<PAGE> 1
As filed with the Securities and Exchange Commission on December 18, 1996
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
CAMCO INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3517570
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
7030 ARDMORE
HOUSTON, TEXAS 77054
(Address of Principal Executive (Zip Code)
Offices)
REED HOURLY THRIFT PLAN
(Full title of the plan)
RONALD R. RANDALL, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CAMCO INTERNATIONAL INC.
7030 ARDMORE
HOUSTON, TEXAS 77054
(Name and address of agent for service)
(713) 747-4000
(Telephone number, including area code, of agent for service)
--------------------
With Copy to:
CURTIS W. HUFF
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED SHARE PRICE(2) FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value . . . 75,000 shares(1) $40.875(2) $3,065,625 $929
- -------------------------------------------------------------------------------------------------------------------------------
Rights to Purchase shares of Common
Stock . . . . . . . . . . . . . . . 75,000(1)
===============================================================================================================================
</TABLE>
(1) Estimated number of shares of Common Stock and accompanying Rights that
could be purchased with the participant contributions, based upon the
price of the Common Stock set forth herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based upon
the average of the high and low sales prices of a share of Common Stock
as reported by the New York Stock Exchange, Inc. on December 16, 1996.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Reed Hourly Thrift Plan described herein.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Camco International Inc., a Delaware corporation (the "Company" or
"Registrant"), and the Reed Hourly Thrift Plan, as amended (the "Plan"),
incorporate by reference in this Registration Statement the following
documents:
1. The Registrant's annual report on Form 10-K for the year ended
December 31, 1995, and the Plan's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
2. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
3. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996;
4. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996;
5. All other reports filed by the Registrant and the Plan pursuant
to Section 13(a) or 15(d) of the Exchange Act since December 31, 1995;
6. The description of the Registrant's common stock, $.01 par value
("Common Stock"), contained in a registration statement on Form 10, as filed
with the Securities and Exchange Commission on October 21, 1993, and as amended
on November 5, 1993, November 19, 1993, and December 9, 1993, including any
amendment or report filed for the purpose of updating such description; and
7. The description of the rights to purchase Common Stock ("Rights")
contained in the Company's Registration Statement on Form 8-A, as filed with
the Securities and Exchange Commission on December 19, 1994, including any
amendment or report filed for the purpose of updating such description.
All documents filed by the Registrant or the Plan pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of the filing hereof and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
II-1
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at the
request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is or
is threatened to be made a party by reason of such position, if such person
shall have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
The Restated Certificate of Incorporation contains provisions which
eliminate the personal liability of the Registrant's directors for monetary
damages resulting from breaches of their fiduciary duty other than liability
for breaches of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, violations
under Section 174 of the General Corporation Law of the State of Delaware or
any transaction from which the director derived an improper personal benefit.
Article VIII of the Registrant's By-laws contains detailed provisions
for the indemnification by the Registrant of current and former directors,
officers, employees and agents of the Registrant on terms that have been
derived from Section 145 of the General Corporation Law of the State of
Delaware.
The Registrant has obtained directors' and officers' liability insurance
that covers certain liabilities and expenses of the Registrant's directors and
officers. In addition, the Registrant has entered into indemnification
agreements with each of its directors and certain of its executive officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 -- Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrant's
II-2
<PAGE> 4
Annual Report on Form 10-K for the fiscal year ended December
31, 1993).
4.2 -- By-laws of the Registrant (incorporated by reference to
Exhibit 3.4 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 33-70036)).
4.3 -- Form of Common Stock Certificate (incorporated by reference
to Exhibit 4.2 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 33-70036)).
4.4 -- Credit Facility dated December 7, 1993 (incorporated by
reference to Exhibit 10.12 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 33-70036)).
4.5 -- First Amendment to Credit Facility dated August 29, 1994
(incorporated by reference to Exhibit 10.14 to the
Registrant's Registration Statement on Form S-1 (Reg. No.
33-83562)).
4.6 -- Reed Hourly Thrift Plan, as amended.
15.1 -- Letter of Arthur Andersen LLP.
23.1 -- Consent of Arthur Andersen LLP.
24.1 -- Powers of Attorney (included on page II-6 of this
Registration Statement).
The Registrant has submitted the Plan to the Internal Revenue Service
("IRS") and hereby undertakes to submit any amendment thereto to the IRS in a
timely manner and will make all changes required by the IRS in order to qualify
the Plan.
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant
has not filed with this Registration Statement certain instruments defining the
rights of holders of long-term debt of the Registrant and its subsidiaries
because the total amount of securities authorized under any of such instruments
does not exceed 10% of the total assets of the Registrant and its subsidiaries
on consolidated basis. The Registrant agrees to furnish a copy of any such
agreements to the Securities and Exchange Commission upon request.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
II-3
<PAGE> 5
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar volume of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 and each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore,
II-4
<PAGE> 6
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on December 13, 1996.
CAMCO INTERNATIONAL INC.
By: /s/ GARY D. NICHOLSON
--------------------------------------
Gary D. Nicholson
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Herbert S. Yates and Ronald R. Randall, and each
of them, either one of whom may act without joinder of the other, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, or the substitute or
substitutes of any or all of them, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ GARY D. NICHOLSON Chairman of the Board, President December 13, 1996
---------------------------- and Chief Executive Officer
Gary D. Nicholson (Principal Executive Officer)
/s/ HERBERT S. YATES Senior Vice President-Finance December 13, 1996
---------------------------- and Chief Financial Officer
Herbert S. Yates (Principal Financial Officer)
/s/ BRUCE F. LONGAKER, JR. Vice President-Finance December 13, 1996
---------------------------- and Corporate Controller
Bruce F. Longaker, Jr. (Principal Accounting Officer)
Director
----------------------------
Hugh H. Goerner
</TABLE>
II-6
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ ROBERT L. HOWARD Director December 12, 1996
----------------------------
Robert L. Howard
/s/ WILLIAM J. JOHNSON Director December 13, 1996
----------------------------
William J. Johnson
/s/ WILLIAM A. KRAUSE Director December 12, 1996
----------------------------
William A. Krause
/s/ CHARLES P. SIESS, JR. Director December 13, 1996
----------------------------
Charles P. Siess, Jr.
/s/ GILBERT H. TAUSCH Director December 13, 1996
----------------------------
Gilbert H. Tausch
</TABLE>
II-7
<PAGE> 9
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the Trustees of the Plan have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Houston, State of Texas, on December 13, 1996.
REED HOURLY THRIFT PLAN
By: /s/ HERBERT S. YATES
--------------------------------------
Herbert S. Yates, Trustee
By: /s/ RONALD R. RANDALL
--------------------------------------
Ronald R. Randall, Trustee
II-8
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- ----------------------------------------
<S> <C>
4.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993).
4.2 By-laws of the Registrant (incorporated by reference to
Exhibit 3.3 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 33-70036)).
4.3 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-1 (Reg. No. 33-70036)).
4.4 Credit Facility dated December 7, 1993 (incorporated by
reference to Exhibit 10.12 to the Registrant's Registration
Statement on Form S-1 (Reg. No. 33-70036)).
4.5 First Amendment to Credit Facility dated August 29, 1994
(incorporated by reference to Exhibit 10.14 to the
Registrant's Registration Statement on Form S-1 (Reg.
No. 33-83562)).
4.6 Reed Hourly Thrift Plan, as amended.
15.1 Letter of Arthur Andersen LLP.
23.1 Consent of Arthur Andersen LLP.
24.1 Powers of Attorney (included on page II-6 of this Registration
Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.6
REED HOURLY THRIFT PLAN
(EFFECTIVE JANUARY 1, 1991)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.1 Account . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.2 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.3 Active Service . . . . . . . . . . . . . . . . . . . . . . . I-2
1.4 Affiliated Employer . . . . . . . . . . . . . . . . . . . . I-2
1.5 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.6 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.7 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.8 Committee . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.9 Compensation Deferral Agreement . . . . . . . . . . . . . . I-3
1.10 Considered Compensation . . . . . . . . . . . . . . . . . . I-3
1.11 Contribution . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.12 Effective Date . . . . . . . . . . . . . . . . . . . . . . . I-4
1.13 Elective Contribution . . . . . . . . . . . . . . . . . . . I-4
1.14 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.15 Employee Account . . . . . . . . . . . . . . . . . . . . . . I-4
1.16 Employee Voluntary Contribution . . . . . . . . . . . . . . I-4
1.17 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.18 Employer Account . . . . . . . . . . . . . . . . . . . . . . I-5
1.19 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.20 Highly Compensated Employee . . . . . . . . . . . . . . . . I-5
1.21 Leased Employee . . . . . . . . . . . . . . . . . . . . . . I-5
1.22 Matching Contribution . . . . . . . . . . . . . . . . . . . I-5
1.23 Net Income . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.24 Non-Highly Compensated Employee . . . . . . . . . . . . . . I-6
1.25 Participant . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.26 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.27 Plan Sponsor . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.28 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.29 Profit Sharing Contribution . . . . . . . . . . . . . . . . I-6
1.30 Qualified Non-Elective Contribution . . . . . . . . . . . . I-6
1.31 Retired Participant . . . . . . . . . . . . . . . . . . . . I-6
1.32 Rollover Account . . . . . . . . . . . . . . . . . . . . . . I-6
1.33 Rollover Contribution . . . . . . . . . . . . . . . . . . . I-6
1.34 Telephonic Procedures . . . . . . . . . . . . . . . . . . . I-7
1.35 Total and Permanent Disability . . . . . . . . . . . . . . . I-7
1.36 Transferred . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.37 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.38 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.39 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.40 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . I-7
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE II EMPLOYEES ELIGIBLE TO PARTICIPATE . . . . . . . . . . . . . . II-1
2.1 Eligibility Requirements . . . . . . . . . . . . . . . . . II-1
2.2 Frozen Participation . . . . . . . . . . . . . . . . . . . II-2
2.3 Active Service . . . . . . . . . . . . . . . . . . . . . . II-2
ARTICLE III CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . III-1
3.1 Employee Voluntary Contributions . . . . . . . . . . . . . III-1
3.2 Compensation Deferral Agreements for
Elective Contributions . . . . . . . . . . . . . . . . . . III-1
3.3 Rollover Contributions . . . . . . . . . . . . . . . . . . III-6
3.4 Employer Contributions . . . . . . . . . . . . . . . . . . III-6
3.5 Highly Compensated Employee . . . . . . . . . . . . . . . III-25
3.6 Composition of and Deadline for Payment of
Employer Contributions . . . . . . . . . . . . . . . . . . III-30
3.7 Return of Contributions for Mistake, Disqualification or
Disallowance of Deduction . . . . . . . . . . . . . . . . III-30
ARTICLE IV PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . IV-1
4.1 Periodic Certification by Employer . . . . . . . . . . . . IV-1
4.2 Allocation of Employer Contributions . . . . . . . . . . . IV-1
4.3 Limitation on Additions to Account . . . . . . . . . . . . IV-2
4.4 Periodic Valuation of Trust Fund . . . . . . . . . . . . . IV-10
4.5 Daily Valuation of Trust Fund . . . . . . . . . . . . . . IV-11
4.6 Forfeitures and Allocation Thereof . . . . . . . . . . . . IV-11
4.7 Effective Date of Allocations and Adjustments . . . . . . IV-14
4.8 Accounting for Transferred Participant . . . . . . . . . . IV-15
4.9 No Vesting Unless Otherwise Prescribed . . . . . . . . . . IV-15
4.10 Investment Elections with Respect to Commingled Funds . . IV-15
ARTICLE V RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.1 Early Retirement . . . . . . . . . . . . . . . . . . . . . V-1
5.2 Normal Retirement . . . . . . . . . . . . . . . . . . . . V-1
5.3 Late Retirement . . . . . . . . . . . . . . . . . . . . . V-1
5.4 Rights of Participants and Prohibition of Unauthorized
Distribution . . . . . . . . . . . . . . . . . . . . . . . V-1
ARTICLE VI DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . VI-1
6.1 Death Benefit . . . . . . . . . . . . . . . . . . . . . . VI-1
6.2 Retirement Benefit . . . . . . . . . . . . . . . . . . . . VI-3
6.3 Total and Permanent Disability Benefit . . . . . . . . . . VI-3
6.4 Severance Benefit . . . . . . . . . . . . . . . . . . . . VI-3
6.5 Accounting for Distributions; Offsets in
Special Circumstances . . . . . . . . . . . . . . . . . . VI-4
6.6 Distributions-Settlement Options . . . . . . . . . . . . . VI-5
6.7 Lost Participants or Beneficiaries; Escheat . . . . . . . VI-16
6.8 Withdrawals by Participants . . . . . . . . . . . . . . . VI-17
6.9 Claims Procedure for Benefits . . . . . . . . . . . . . . VI-21
6.10 Loans to Participants and Beneficiaries . . . . . . . . . VI-22
6.11 Distributions to Divorced Spouse . . . . . . . . . . . . . VI-28
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VII TOP-HEAVY PLAN PROVISIONS . . . . . . . . . . . . . . . . . VII-1
7.1 General Rules for Determining Top-Heavy Status . . . . . . VII-1
7.2 Computation of Present Value of Accrued Benefits . . . . . VII-2
7.3 Special Rules for Plan Years that Plan is Top-Heavy . . . VII-4
7.4 Definitions . . . . . . . . . . . . . . . . . . . . . . . VII-5
ARTICLE VIII COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
8.1 Appointment, Term of Service and Removal . . . . . . . . . VIII-1
8.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
8.3 Organization . . . . . . . . . . . . . . . . . . . . . . . VIII-3
8.4 Quorum and Majority Action . . . . . . . . . . . . . . . . VIII-3
8.5 Signatures . . . . . . . . . . . . . . . . . . . . . . . . VIII-3
8.6 Disqualification of Committee Participant . . . . . . . . VIII-3
8.7 Disclosure to Participants . . . . . . . . . . . . . . . . VIII-3
8.8 Standard of Performance . . . . . . . . . . . . . . . . . VIII-3
8.9 Liability of Committee and Liability Insurance . . . . . . VIII-4
8.10 Exemption from Bond . . . . . . . . . . . . . . . . . . . VIII-4
8.11 No Compensation . . . . . . . . . . . . . . . . . . . . . VIII-4
8.12 Persons Serving in Dual Fiduciary Roles . . . . . . . . . VIII-4
8.13 Administrator . . . . . . . . . . . . . . . . . . . . . . VIII-5
8.14 Indemnification of Participants of Committee . . . . . . . VIII-5
ARTICLE IX TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . IX-1
9.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . IX-1
9.3 Investment Powers . . . . . . . . . . . . . . . . . . . . IX-1
9.4 Voting Company Stock . . . . . . . . . . . . . . . . . . . IX-4
9.5 Tender Offer for Company Stock . . . . . . . . . . . . . . IX-6
9.6 Standard of Performance . . . . . . . . . . . . . . . . . IX-7
9.7 Liability for Investments . . . . . . . . . . . . . . . . IX-8
9.8 Reliance on Directions . . . . . . . . . . . . . . . . . . IX-8
9.9 General Liability of the Trustee . . . . . . . . . . . . . IX-8
9.10 Proof of Trustee's Authority . . . . . . . . . . . . . . . IX-8
9.11 Accounting Required by Trustee . . . . . . . . . . . . . . IX-9
9.12 Resignation or Removal of Trustee . . . . . . . . . . . . IX-9
9.13 Appointment and Power of Successor Trustee . . . . . . . . IX-9
9.14 Compensation of Trustee . . . . . . . . . . . . . . . . . IX-10
9.15 Bonding . . . . . . . . . . . . . . . . . . . . . . . . . IX-10
9.16 Assignment of Trusteeship . . . . . . . . . . . . . . . . IX-10
ARTICLE X ADOPTION OF PLAN BY OTHER EMPLOYERS . . . . . . . . . . . . . X-1
10.1 Adoption Procedure . . . . . . . . . . . . . . . . . . . . X-1
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
10.2 No Joint Venture Implied . . . . . . . . . . . . . . . . . X-1
10.3 Transfer of Participants . . . . . . . . . . . . . . . . . X-2
ARTICLE XI AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . XI-1
11.1 Right to Amend and Limitations Thereon . . . . . . . . . . XI-1
11.2 Mandatory Amendments . . . . . . . . . . . . . . . . . . . XI-2
11.3 Withdrawal of an Employer . . . . . . . . . . . . . . . . XI-2
11.4 Voluntary and Involuntary Termination . . . . . . . . . . XI-3
11.5 Vesting Upon Discontinuance of Employer Contributions,
Total or Partial Termination . . . . . . . . . . . . . . . XI-5
11.6 Continuance Permitted Upon Sale or Transfer of Assets . . XI-6
11.7 Requirement on Merger, Transfer, etc. . . . . . . . . . . XI-6
ARTICLE XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . XII-1
12.1 Plan Not An Employment Contract . . . . . . . . . . . . . XII-1
12.2 Benefits Provided Solely From Trust Fund . . . . . . . . . XII-1
12.3 Spendthrift Provision . . . . . . . . . . . . . . . . . . XII-1
12.4 Gender, Tense and Headings . . . . . . . . . . . . . . . . XII-2
12.5 Severability . . . . . . . . . . . . . . . . . . . . . . . XII-2
12.6 Governing Law; Parties to Legal Actions . . . . . . . . . XII-2
12.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . XII-2
12.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . XII-2
</TABLE>
iv
<PAGE> 6
REED HOURLY THRIFT PLAN
THIS AGREEMENT made the ___ day of _____________, 1994, by and between
Camco International Inc., a Delaware corporation, and Ronald R. Randall and
Herbert S. Yates, hereinafter collectively referred to as the Trustee,
W I T N E S S E T H:
WHEREAS, for the exclusive benefit of its eligible employees and their
beneficiaries, Reed Tool Company, formerly a subsidiary, and currently a
division, of Camco International, Inc. (the "Employer") desires to adopt this
profit sharing plan and trust as embodied in this instrument entitled "Reed
Hourly Thrift Plan" (the "Plan") for the benefit of the eligible hourly-rated
bargaining unit employees of Reed Tool Company (a division of Camco
International Inc.) who are members of United Steel Workers of America, Local
Union 2083, which plan is intended to meet the requirements for qualification
and exemption under applicable provisions of the Internal Revenue Code of 1986,
as amended (the "Code") and to comply with applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended (the "Act"); and
WHEREAS, it is intended that certain other business organizations may
adopt the form of the Plan for the exclusive benefit of their eligible
employees and their eligible employees' beneficiaries; and
WHEREAS, it is intended that the benefits offered under the form of the
Plan will help retain and attract the highest quality employees by providing
additional financial incentives and financial security for eligible employees
and their beneficiaries;
NOW, THEREFORE, the parties hereto enter into this agreement as follows:
I-1
<PAGE> 7
ARTICLE I
DEFINITIONS
As used herein, the words and phrases set forth below shall have the
meaning attributed to them unless the context in which any such word or phrase
appears reasonably requires a broader, narrower or different meaning:
1.1 Account: "Account" shall mean, with respect to a Participant,
all of the ledger accounts maintained by the Committee to set out such
Participant's proportionate interest in the Trust Fund. Should the Committee
in its absolute discretion so direct, any of the Accounts maintained under the
Plan may be divided into subaccounts in order to facilitate administration of
the Plan.
1.2 Act: "Act" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and regulations and other authority issued thereunder
by the appropriate governmental authority. Reference to any section of the Act
shall include reference to any successor section or provision of the Act.
1.3 Active Service: "Active Service" shall mean such term as defined
in Section 2.3 of the Plan.
1.4 Affiliated Employer: "Affiliated Employer" shall mean an
employer which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code), or which is a trade or business
(whether or not incorporated) which is under common control (within the meaning
of Section 414(c) of the Code), or which is a member of an affiliated service
group of employers (within the meaning of Section 414(m) of the Code), which
related group of corporations, businesses or employers includes an Employer;
and any other entity required to be aggregated with an Employer pursuant to
regulations under Section 414(o) of the Code.
1.5 Beneficiary: "Beneficiary" or "Beneficiaries" shall mean the
person(s), the trust(s) created for the benefit of a person or persons who are
the natural object of the Participant's or Retired Participant's bounty, or the
Participant's or Retired Participant's estate, whichever is designated by the
Participant or Retired Participant to receive the benefits payable hereunder
upon his death.
1.6 Board: "Board" shall mean the Board of Directors (or equivalent
governing authority) of the Plan Sponsor.
I-2
<PAGE> 8
1.7 Code: "Code" shall mean the Internal Revenue Code of 1986, as
amended, and regulations and other authority issued thereunder by the
appropriate governmental authority. References to any section of the Code or
the income tax regulations shall include reference to any successor section or
provision of the Code or income tax regulations, as applicable.
1.8 Committee: "Committee" shall mean the committee appointed by the
Board pursuant to Article VIII hereof.
1.9 Compensation Deferral Agreement: "Compensation Deferral
Agreement" shall mean a written agreement between a Participant and an Employer
in a form satisfactory to the Committee to permit an Employer, in lieu of
paying such amounts to the Participant in cash, to reduce such Participant's
current Considered Compensation and contribute the amount of the reduction to
the Plan as an Elective Contribution made by the Employer for the benefit of
the Participant.
1.10 Considered Compensation: "Considered Compensation" shall mean
(subject to the top-heavy rules under Section 7.3(b)), as to each Employee, the
regular compensation that is paid to him by an Employer during the Plan Year
for services performed and which is currently includible in the Employee's
gross income under the Code, including regular or base salary, hourly wages
and/or commissions, plus overtime pay and bonuses, but excluding any non-cash
forms of compensation and credits or benefits under the Plan or any other
deferred compensation plan maintained by an Employer. Considered Compensation
shall be determined before reduction under a compensation deferral agreement
under (i) the Plan or another plan described in Section 401(k) or 408(k) of the
Code, (ii) an annuity described in Section 403(b) of the Code or (iii) an
election under a cafeteria plan described in Section 125 of the Code. With
respect to Plan Years before January 1, 1994, Considered Compensation in excess
of $200,000 (as adjusted, as may be determined by the Commissioner of Internal
Revenue, at the same time and in the same manner as prescribed in Section
415(d) of the Code) shall be disregarded; and with respect to Plan Years
commencing after December 31, 1993, Considered Compensation in excess of
$150,000 (as adjusted, as may be determined by the Commissioner of Internal
Revenue, at such time and in such manner as is prescribed in Section
401(a)(17)(B) of the Code) (hereinafter each applicable dollar limitation shall
be referred to as the "applicable compensation limitation") shall be
disregarded. In determining the applicable compensation limitation, the rules
pertaining to treatment of family members set out in the third paragraph of the
definition of Highly Compensated Employee shall apply, except that in applying
such rules, the term "family" shall include only the spouse and any lineal
descendants of the Employee who have not attained age 19 before the close of
the applicable Plan Year.
For purposes of this definition of "Considered Compensation," and for
purposes of the corresponding limitations on compensation in Sections 3.4(h);
3.4(j); 7.3(b); and 7.4(1), the following provisions shall apply:
(a) The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
compensation is determined ("determination
I-3
<PAGE> 9
period") beginning in such calendar year. If a determination period
consists of fewer than 12 months, the applicable compensation limit will
be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12;
(b) If compensation for any prior determination period is
taken into account in determining an employee's benefits accruing in the
current plan year, the compensation for that prior determination period
is subject to the applicable compensation limit in effect for that prior
determination period, and for this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the applicable compensation limit is $150,000.
1.11 Contribution: "Contribution" shall mean as to an Employer, all
amounts which an Employer contributes to the Trust Fund under the terms of the
Plan. "Contribution" shall mean as to an Employee, an Employee Voluntary
Contribution as defined below.
1.12 Effective Date: "Effective Date" shall mean, subject to the
transitional dates set forth in various sections of the Plan, January 1, 1991,
the effective date of the Plan.
1.13 Elective Contribution: "Elective Contribution" shall mean the
amount which an Employer contributes to the Trust Fund on behalf of
Participants pursuant to Compensation Deferral Agreements.
1.14 Employee: "Employee" shall mean an hourly rated bargaining unit
employee of Reed Tool Company, a division of the Plan Sponsor, who is a member
of United Steel Workers of America, Local Union 2083.
1.15 Employee Account: "Employee Account" shall mean, to the extent
applicable for each Participant, an account which reflects (i) the
Participant's after-tax Employee Voluntary Contributions, if any, and (ii) the
portion of any Employer Contributions which, pursuant to Section 3.4, have been
recharacterized as after-tax Employee Voluntary Contributions, regardless of
whether any Matching Contributions were made with respect thereto, and the
appreciation or depreciation of the Trust Fund and the income earned or loss
incurred by the Trust Fund allocated to the Employee Account.
1.16 Employee Voluntary Contribution: "Employee Voluntary
Contribution" shall mean as to each Participant (i) the amount, if any, which a
Participant contributes (in his capacity as a Participant) to the Trustee as an
after-tax Employee Voluntary Contribution under Section 3.1, and (ii) the
portion of any Elective Contributions which (pursuant to Section 3.4) has been
recharacterized as an after-tax Employee Voluntary Contribution.
1.17 Employer: "Employer" shall mean the Plan Sponsor and any other
person (described in Section 7701(a) of the Code) which adopts the Plan in
accordance with applicable provisions thereof.
I-4
<PAGE> 10
1.18 Employer Account: "Employer Account" shall mean, to the extent
applicable for each Participant, an account which reflects the portion of an
Employer's Contributions allocated to the Participant, and the appreciation or
depreciation and income or loss incurred by the Trust Fund allocated to such
Employer Account. The Employer Account maintained for each Participant shall
consist of (i) an Employer Nonforfeitable Contributions Account which shall
separately reflect (a) any Elective Contributions which are authorized by the
Participant and made by an Employer on behalf of such Participant, and (b) any
Qualified Non-Elective Contributions which are made by an Employer on behalf of
the Participant, and (c) the portion of any Profit Sharing Contributions which
are made by an Employer on behalf of the Participant and are designated (in
resolutions adopted by the Board and communicated to Participants) as allocable
to the Employer Nonforfeitable Contributions Account; and/or (ii) an Employer
Contributions Account which shall reflect (a) any Matching Contributions which
are made by an Employer on behalf of the Participant in order to match Elective
Contributions, and (b) any portion of the Profit Sharing Contributions which
are made by an Employer on behalf of such Participant and not specifically
designated (in resolutions adopted by the Board and communicated to
Participants) as allocable to the Employer Nonforfeitable Contributions
Account.
1.19 Entry Date: "Entry Date" shall mean: (i) for Employees hired
before January 1, 1995, the date on which an Employee becomes a Participant
after having met the eligibility requirements under applicable provisions of
the Plan, which date shall be the first day of that quarter of the Plan Year,
i.e., January 1, April 1, July 1 or October 1, coincident with or next
following satisfaction of such eligibility requirements; and (ii) for Employees
hired on or after January 1, 1995, the date on which an Employee satisfies the
eligibility requirements of the Plan. Without regard to the eligibility
requirements of the Plan and to the extent consistent with the context in which
such term is used, "Entry Date" shall also refer to the first day of each
quarter of a given Plan Year, i.e., January 1, April 1, July 1, or October 1.
1.20 Highly Compensated Employee: "Highly Compensated Employee" shall
mean such term as defined in Section 3.5 of the Plan.
1.21 Leased Employee: "Leased Employee" shall mean any person (i) who
is not a common law employee of the recipient Employer and (ii) who (pursuant
to an agreement between an Employer (or Affiliated Employer) and any other
person ("Leasing Organization")) has performed services for an Employer (or for
an Employer and related persons determined in accordance with Section 414(n)(6)
of the Code) (a) on a substantially full time basis for a period of at least
one year (including periods of service for the recipient Employer for which
such person would have been a Leased Employee but for the requirements of this
subclause (a)) and (b) such services are of a type historically performed by
employees in the business field of the recipient Employer.
1.22 Matching Contribution: "Matching Contribution" means the amount,
if any, which an Employer contributes to the Trust Fund pursuant to applicable
provisions of the Plan in order to match Elective Contributions.
I-5
<PAGE> 11
1.23 Net Income: "Net Income" shall mean, as to an Employer, its net
profit for any given year as determined by its accountant or accounting firm
and reflected on its profit and loss statement for such year, without reduction
for contributions under the Plan or payments of, or reserves for, federal and
state taxes based on income.
1.24 Non-Highly Compensated Employee: "Non-Highly Compensated
Employee" shall mean a Employee who is neither a Highly Compensated Employee
nor a family member thereof described in Section 414(q)(6) of the Code.
1.25 Participant: "Participant" shall mean an Employee who is
participating in the Plan during the Plan Year and, if consistent with the
context in which such term is used, a Participant of the Plan who is a former
Employee of an Employer.
1.26 Plan: "Plan" shall mean the Reed Hourly Thrift Plan, effective as
of January 1, 1991, herein set forth and all subsequent amendments hereto. The
Plan is hereby designated as a profit sharing plan for purposes of Sections
401, 402, 412 and 417 of the Code.
1.27 Plan Sponsor: "Plan Sponsor" shall mean Camco International Inc.
and any successor thereto which adopts and continues the Plan.
1.28 Plan Year: "Plan Year" shall mean the fiscal year of the Plan
which shall end on the last day of December of each calendar year.
1.29 Profit Sharing Contribution: "Profit Sharing Contribution" means
the amount, if any, which an Employer contributes to the Trust Fund pursuant to
applicable provisions of the Plan.
1.30 Qualified Non-Elective Contribution: "Qualified Non-Elective
Contribution" means the amount, if any, which an Employer contributes to the
Trust Fund on behalf of the Non-Highly Compensated Employees who are
Participants in order to satisfy the actual deferral percentage test and/or the
actual contribution percentage test under Section 3.4.
1.31 Retired Participant: "Retired Participant" shall mean a person
who was at one time a Participant and who has retired in accordance with
applicable provisions of the Plan.
1.32 Rollover Account: "Rollover Account" shall mean, to the extent
applicable for a Participant, the account established to hold a Participant's
Rollover Contribution to the Plan, which account shall reflect the amount of
the Rollover Contribution and the appreciation or depreciation and income or
loss incurred by the Trust Fund allocated to the Rollover Account.
1.33 Rollover Contribution: "Rollover Contribution" shall mean an
amount (i) which the Committee determines may be deposited in the Trust Fund in
accordance with Section(s) 402(c), 402(e) or 408(d)(3) of the Code and the
regulations issued thereunder without endangering the qualification and
exemption of the Plan and the Trust under Sections 401(a) and
I-6
<PAGE> 12
501(a) of the Code, respectively, and (ii) which is contributed by a
Participant to his Rollover Account or received in a "direct rollover" (as
described in Section 401(a)(31) of the Code) that is made to the Plan.
1.34 Telephonic Procedures: "Telephonic Procedures" shall mean the
procedures established by the Committee and described in Section 4.10(b),
pursuant to which a Participant may effect contribution and investment changes
by telephone.
1.35 Total and Permanent Disability: "Total and Permanent Disability"
shall mean a mental or physical disability which entitles the Participant to
disability benefits under the Federal Social Security Act, as amended, as being
totally disabled.
1.36 Transferred: "Transferred" as used with respect to an Employee
and "Transfer of an Employee" shall mean the termination of employment with one
Employer and the contemporaneous commencement of employment with another
Employer.
1.37 Trust: "Trust" shall mean the trust estate created under the
Plan.
1.38 Trustee: "Trustee" shall mean the trustee or trustees qualified
and acting hereunder or any successor or successors appointed by the Board.
1.39 Trust Fund: "Trust Fund" shall mean the cash, bonds, stock and
other assets or liabilities held by the Trustee under the terms of the Trust.
1.40 Valuation Date: "Valuation Date" shall mean the date or dates
upon which a Participant's Account may be valued in accordance with Sections
4.4 or 4.5, as applicable.
I-7
<PAGE> 13
ARTICLE II
EMPLOYEES ELIGIBLE TO PARTICIPATE
2.1 Eligibility Requirements: An Employee shall be eligible to
participate in the Plan as of the Entry Date coincident with or next following
the later of (i) the effective date of the adoption of the Plan by his
Employer, or (ii) the date that the Employee completes one hour of Active
Service.
In addition, pursuant to uniform and nondiscriminatory rules established
by the Committee with the consent or approval of the Board, the Committee may
vote to allow Employees (including Employees who would otherwise be excluded
because they are not working in covered employment) to enter the Plan as
Participants on any date which would not otherwise be permitted under the terms
of the Plan. Any such decision shall be evidenced by formal minutes reflecting
such action of the Committee or by a unanimous written consent of the members
of the Committee and shall be appropriately communicated to the affected
Participants, and must be approved or ratified by the Board, unless pursuant to
the rules described in the preceding sentence, approval or ratification by the
Board is not required.
If an individual who satisfies the requirements for participation in the
Plan separates from service of an Employer, but subsequently returns to active
employment with an Employer prior to incurring a period of five (or more)
consecutive one year periods of severance for eligibility, such person shall
become a Participant on the later of (i) the Entry Date on which such person
would otherwise initially be entitled to participate in the Plan or (ii) the
date he ended the above described period of separation from service. Upon an
individual's return to employment, (i) an Employee who had a vested and
nonforfeitable right to any portion of any amount credited to his Employer
Account at the time of his termination of employment and who incurred a period
of five (or more) consecutive one year periods of severance, or (ii) an
Employee who had no vested and nonforfeitable right to any amount credited to
his Employer Account at the time of his termination of employment and who has
incurred a period of five (or more) consecutive one year periods of severance,
which aggregate period is less than the aggregate number of years of Active
Service for eligibility (whether or not consecutive) completed prior to such
period, shall be eligible to participate in the Plan immediately as of his
return to the employ of an Employer. Except with respect to those situations
specifically described in the preceding provisions of this paragraph, upon an
individual's return to covered employment, he will be treated as a new Employee
for eligibility purposes.
Notwithstanding any other provision of the Plan to the contrary, but
subject to the provisions of this paragraph, (i) any individual who was
considered by an Employer to be an independent contractor, but who is later
reclassified as a common-law Employee (excluding any Leased Employee described
in clause (ii) below) of an Employer with respect to any portion of the period
in which such individual was paid by an Employer as an independent contractor,
or (ii) any Leased Employee, shall be excluded from participation in the Plan
with respect to the
II-1
<PAGE> 14
period in which any individual described in clause (i) was considered to be an
independent contractor, or the period in which any individual described in
clause (ii) is a Leased Employee. The immediately preceding sentence shall
fully apply only with respect to Plan Years (or portions thereof) in which none
of the individuals described in such sentence is required to be covered in
order to ensure that the Plan is operated in compliance with the requirements
of Section 401(a)(4) of the Code as set forth in Sections 1.401(a)(4)-2,
1.401(a)(4)-5 and 1.401(a)(4)-11 of the Income Tax Regulations and the
requirements of Section 410(b) of the Code as set forth in Section 1.410(b)-1
and 1.410(b)-2 of the Income Tax Regulations. In the event that any individual
who is included in the class of reclassified independent contractors described
in clause (i) of the first sentence of this paragraph, or who is a Leased
Employee described in clause (ii) of the first sentence of this paragraph, must
be covered with respect to a Plan Year (or portion thereof) in order to ensure
that the requirements of the immediately preceding sentence are met, starting
with the class of reclassified independent contractors, only such number of
individuals within the class which includes the individual (beginning with the
individuals with the lowest Considered Compensation determined on an annualized
basis) as is necessary to ensure compliance with the requirements of the
immediately preceding sentence shall be covered in the Plan only for the Plan
Year (or portion thereof) that is necessary to ensure that the requirements of
the immediately preceding sentence are met.
2.2 Frozen Participation: While service with an Affiliated Employer
which is not an Employer is counted for purposes of determining Active Service,
no person shall authorize Elective Contributions to the Plan except for the
period(s) of service that he is actually employed in covered employment with
and paid by an Employer. If an Employee is (i) transferred from an Employer to
an Affiliated Employer which is not an Employer or (ii) otherwise ceases to be
employed in covered employment with and paid by an Employer (but does not have
a severance from service), his Account shall thereupon be frozen: he shall not
be permitted to authorize contributions to the Plan, and his Account shall not
share in the allocation of any Employer Contribution (except for the period(s)
of service that he is actually employed in covered employment with and paid by
an Employer), but his Account will continue to share in any appreciation or
depreciation of the Trust Fund and in any income or losses incurred by the
Trust Fund during the period of time that he is employed by an Affiliated
Employer which is not an Employer or that he is otherwise excluded from covered
employment; provided, however, he shall continue to accrue Active Service.
2.3 Active Service: For eligibility, vesting and all other pertinent
purposes of the Plan, "Active Service" shall mean, subject to the transition
rules set out in the last paragraph of this Section, as to each Employee, the
number of whole years and complete months of the Employee's period(s) of
service with any Employer or Affiliated Employer, whether or not such period(s)
of service were completed consecutively. Except as otherwise provided below,
in determining the number of whole years and complete months of an Employee's
period of service, non-successive periods of service shall be aggregated, and
less than whole year periods of service (whether or not consecutive) shall be
aggregated on the basis that twelve complete months of service (thirty days
shall be deemed to be a complete month in the case of aggregation of fractional
months) equal a whole year of Active Service.
II-2
<PAGE> 15
If an Employee severs from service by reason of a quit, discharge, or
retirement, and the Employee then performs an hour of service within twelve
months of the severance from service date, such Employee's period of severance
shall be deemed to have been a period of service. If an Employee severs from
service by reason of a quit, discharge, or retirement during an absence from
service for any reason other than a quit, discharge, or retirement, and then
performs an hour of service within twelve months of the date on which the
Employee was first absent from service, such Employee's period of severance
shall be deemed to have been a period of service.
Periods of severance taken into account as periods of service shall not
be taken into account for purposes of determining whether an Employee is in the
employ of the Employer for purposes of allocating Employer Contributions in
accordance with Section 4.2.
For purposes of the Plan, all service with any Affiliated Employer shall
be deemed to be service with the Employer. Furthermore, all covered service
and contiguous noncovered service with an Employer which has adopted the Plan
but which is not an Affiliated Employer shall be deemed to be service with the
Employer.
In the event that an Employer assumes and maintains the plan of a
predecessor employer described in Section 414(a)(2) of the Code, Active Service
for such predecessor employer shall be treated as Active Service for the
Employer in accordance with the provisions of Section 414(a)(1) of the Code.
However, if the Employer does not maintain the plan of a predecessor employer,
the Plan shall treat any Employee's service with the predecessor employer as
service with the Employer only to the extent prescribed in Section 414(a)(2) of
the Code.
In addition, pursuant to uniform and nondiscriminatory rules established
by the Committee with the consent or approval of the Board, the Committee may
vote to allow Employees to be credited with Active Service for eligibility or
vesting with respect to periods of service which would otherwise be disregarded
under the Plan. Any such decision shall be evidenced by formal minutes
reflecting such action of the Committee, or by unanimous written consent of the
members of the Committee, and must be approved or ratified by the Board, unless
pursuant to the rules described in the preceding sentence, approval or
ratification by the Board is not required. Any such decision shall be
appropriately communicated to the affected Participants.
Notwithstanding any other provision hereof, any period of service
occurring prior to the effective date of the adoption of the Plan by an
Employer shall be taken into account for purposes of determining vesting credit
hereunder. Except as otherwise provided in Section 2.1, in the case of an
Employee who has incurred a one year period of severance, the period of service
completed before such period of severance shall not be taken into account until
the Employee has completed a one year period of service after his return to
service. In the case of an Employee who completes at least one hour of service
under the Plan, (i) if he has incurred five (or more) consecutive periods of
severance, the period of service completed after such period of severance shall
not be taken into account for purposes of determining the Participant's
II-3
<PAGE> 16
vested percentage in amounts credited to his Employer Contributions Account
prior to such five (or more) consecutive periods of severance, and (ii) if he
does not have any vested right under the Plan to Employer Contributions
credited to his Account at the time he incurs a period of five (or more)
consecutive one year periods of severance, the period of service completed by
such Employee before such period of severance shall not be taken into account
for any reason when the period of five (or more) consecutive periods of
severance equals or exceeds his period of service, whether or not consecutive,
completed before such period of severance. In computing the aggregate period
of service prior to any such period of severance, any periods of service which
may be disregarded by reason of any prior periods of severance shall be
disregarded.
Subject to the transition rules set out in the last paragraph of this
Section, a "period of service" shall mean a period of service with any Employer
or Affiliated Employer commencing on the Employee's employment commencement
date or reemployment commencement date, whichever is applicable, and ending on
the severance from service date. "Employment commencement date" shall mean the
date on which the Employee first performs an hour of service initially.
"Reemployment commencement date" shall mean the date on which the Employee
first performs an hour of service following a period of severance not deemed to
have been a period of service.
A "period of severance" shall mean the period of time commencing on the
severance from service date and ending on the date on which the Employee again
performs an hour of service. A "one year period of severance" shall mean a 12-
consecutive-month period beginning on the severance from service date and
ending on the first anniversary of such date, if the Employee does not perform
an hour of service during such 12-consecutive-month period; provided, however,
solely for purposes of determining whether an Employee has incurred a one year
period of severance, any Employee who is absent from employment with the
Employer or Affiliated Employer for a period of absence which (1) is incurred
by reason of (i) the pregnancy of the Employee, (ii) the birth of a child of
the Employee, (iii) the placement of a child with the Employee in connection
with adoption of such child by the Employee or (iv) for purposes of caring for
such child for a period beginning immediately following such birth or
placement, or (2) begins on or after the earlier of February 5, 1994, or the
date of the termination of the collective bargaining agreement in effect on
August 5, 1993, and to which the Employee is entitled under the Family and
Medical Leave Act of 1993, shall not be charged with a period of severance with
respect to (a) the 12-consecutive-month period beginning on the first day of
such absence or (b) the 12-consecutive-month period commencing on the first
anniversary of the first day of the period described in clause (a) if the
period in clause (a) is included in the Employee's period of service. The
applicable 12-consecutive-month period described in clause (a) or (b) shall be
subtracted from any period of severance which would otherwise include the
period described in clause (a) or (b), as applicable.
An Employee's "severance from service date" shall occur on the earlier
of (i) the date on which the Employee quits, retires, is discharged, or dies;
or (ii) the first anniversary of the first day of a period in which the
Employee remains absent from service (with or without pay) for any reason other
than a quit, retirement, discharge, or death, such as vacation, holiday,
II-4
<PAGE> 17
sickness, disability, leave of absence, or layoff. In addition, any period of
absence which is not described in the preceding sentence, which (1) is incurred
by reason of (i) the pregnancy of the Employee, (ii) the birth of a child of
the Employee, (iii) the placement of a child with the Employee in connection
with the adoption of such child by the Employee or (iv) for purposes of caring
for such child for a period beginning immediately following such birth or
placement, or (2) begins on or after the earlier of February 5, 1994, or the
date of the termination of the collective bargaining agreement in effect on
August 5, 1993, and to which the Employee is entitled under Family and Medical
Leave Act of 1993, shall be deemed to be a period of absence described in
clause (ii) of the preceding sentence.
An "hour of service" shall mean an hour for which an Employee is paid,
or entitled to payment, for the performance of duties for any Employer or
Affiliated Employer. "Covered service" shall mean service within a job
classification or class of employees covered under the Plan. "Contiguous
noncovered service" shall mean service other than covered service, which
precedes or follows covered service, if no quit, discharge, or retirement
occurs between such covered service and such other service.
II-5
<PAGE> 18
ARTICLE III
CONTRIBUTIONS
3.1 Employee Voluntary Contributions: Employee Voluntary
Contributions (defined below) on the part of the Participants shall be
permitted from time to time as determined by the Board. "Employee Voluntary
Contributions" shall mean after-tax amounts contributed to the Plan by a
Participant which are not required as a condition of employment, as a condition
of participation in the Plan or as a condition to obtaining benefits (or
additional benefits) under the Plan attributable to Employer Contributions.
Employee Voluntary Contributions shall not be deductible or excludible from the
Participant's gross income.
In the event Employee Voluntary Contributions are permitted, the
opportunity to contribute shall be announced and made available to all
Participants upon an equal basis in the manner hereinafter set out. Once
Employee Voluntary Contributions have been permitted, if the Committee
determines to stop Employee Voluntary Contributions, an announcement shall be
made to all Employees and the Contributions to the effective date of the
announcement shall be retained in the Plan subject to the terms and provisions
of the Plan including the right of withdrawal by the Participants under Section
6.8.
From and after the date, if any, established by the Board, or the Entry
Date or other date with respect to which a Participant is eligible to
participate, if later, each Participant may execute a written agreement in a
form satisfactory to the Committee whereunder the Participant shall agree,
subject to any necessary adjustments pursuant to Sections 3.4 and 4.3, (i) to a
reduction of not less than one percent (1%) nor more than ten percent (10%) of
his Considered Compensation attributable to the applicable pay periods, and
(ii) to contribute the amount of the authorized reduction to the Plan as an
Employee Voluntary Contribution. Any such reduction authorized by the
Participant within the limits set forth in the previous sentence may be either
a percentage or a dollar amount of Considered Compensation each applicable
payroll period.
All Employee Voluntary Contributions shall be made by periodic payroll
deductions on such uniform basis as shall be determined from time to time by
the Committee. An Employer shall deposit each Participant's Employee Voluntary
Contribution with the Trustee within thirty (30) days after its deduction. The
Committee shall credit the Participant's Employee Voluntary Contribution to his
Employee Account. A Participant shall be allowed to increase, decrease, or
cease his Voluntary Employee Contributions at any time, with any such change
being effective as of the first day of the first pay period thereafter that is
administratively feasible.
3.2 Compensation Deferral Agreements for Elective Contributions:
(a) Compensation Deferral Agreements: Subject to applicable
conditions and limitations of the Plan, at such time or times as may be
permitted by the Board, and in such manner and amounts as shall be
consistent with the provisions of this Section, in
III-1
<PAGE> 19
lieu of receipt of such amounts in cash, Participants may authorize an
Employer to make Elective Contributions to the Plan on their behalf.
Elective Contributions shall be held, invested and distributed as
provided under applicable provisions of the Plan. Provided, however, no
Compensation Deferral Agreement (or any other deferral mechanism that
may be permitted under the Plan) may be adopted retroactively. In the
event Elective Contributions are permitted, the opportunity to authorize
Elective Contributions hereunder shall be announced and made available
to all Participants upon an equal basis. Once Elective Contributions
have been permitted, if the Committee determines to stop Elective
Contributions, an announcement shall be made to all Employees and the
Elective Contributions to the effective date of the announcement shall
be retained in the Plan subject to the other terms and provisions of the
Plan including any right of withdrawal under Section 6.8.
From and after the date, if any, established by the Board
pursuant to the preceding paragraph of this Section, or the Entry Date
or other date with respect to which a Participant is eligible to
participate, if later, each Participant may execute a Compensation
Deferral Agreement in a form satisfactory to the Committee whereunder
the Participant shall agree, subject to any necessary adjustments
pursuant to this Section and Sections 3.4 and 4.3, (i) to a reduction of
not less than one percent (1%) nor more than fifteen percent (15%) of
his Considered Compensation (before such authorized reduction)
attributable to the applicable pay periods, and (ii) to have an Employer
contribute (as an Elective Contribution) to the Plan an amount equal to
the amount of the authorized reduction, which Elective Contribution
shall be allocated and credited to the Participant's Employer
Nonforfeitable Contributions Account. The election shall separately
specify the reduction, if any, applicable to any Considered Compensation
to be received on a non-periodic basis, or on the basis of periods no
more frequent than calendar quarters. Any reduction authorized by the
Participant within the limits set forth in the previous two sentences
may be either a percentage or a dollar amount of Considered Compensation
each applicable payroll period. The term "payroll period" shall mean
the regular pay periods at the end of which compensation is paid,
whether that compensation is a regular or a non-periodic payment.
Reductions authorized under Compensation Deferral Agreements
shall be irrevocable, except that Elective Contributions may be
discontinued, increased or decreased by a Participant at any time, with
any such change being effective as of the first day of the first pay
period thereafter that is administratively feasible. Under special
circumstances, pursuant to uniformly applied nondiscriminatory rules
established by the Committee, the Committee may permit different or
additional effective dates for increases or decreases of Elective
Contributions authorized under Compensation Deferral Agreements, or may
waive the otherwise applicable notice requirement, in order to prevent
hardship to any Participant, provided that the waiver is not contrary to
the best interests of the other Participants.
III-2
<PAGE> 20
(b) Special Compensation Deferral Agreements: Notwithstanding
the preceding subsection, unless the Committee otherwise determines in
its sole discretion, prior to the first day of the last month of the
Plan Year, each Participant may execute a Compensation Deferral
Agreement (in such form as is satisfactory to the Committee and
hereinafter referred to as a "Special Compensation Deferral Agreement")
providing for an increase or a reduction of Elective Contributions with
respect to any part or all of the Participant's Considered Compensation
for any part or all of the last month of the Plan Year; provided,
however, (i) that such Special Compensation Deferral Agreement shall be
deemed to modify and override any prior Compensation Deferral Agreement
during the period covered by the Special Compensation Deferral
Agreement, (ii) that the deferrals authorized under the Special
Compensation Deferral Agreement may be increased, reduced or revoked
only if permitted by the Committee in accordance with uniformly applied
nondiscriminatory rules which may be established by the Committee, and
(iii) that the Special Compensation Deferral Agreement shall
automatically terminate as of the earlier of such time (a) it is revoked
by the Participant in accordance with uniformly applied
nondiscriminatory rules established by the Committee or (b) the last day
of the period with respect to which authorized reductions thereunder are
contributed to the Plan. All deferrals required as a result of the
execution of a Special Compensation Deferral Agreement shall be subject
to all applicable terms, conditions, and limitations of the Plan. As of
the date that the Special Compensation Deferral Agreement ceases to be
operative, the Participant's then otherwise operative Compensation
Deferral Agreement shall govern deferrals to be made on behalf of the
Participant.
(c) Dollar Limit On Elective Deferrals: Notwithstanding any
other provision of the Plan to the contrary, with respect to any taxable
year of any Participant, deferrals under the Plan in lieu of cash
Considered Compensation, pursuant to any Compensation Deferral Agreement
and Special Compensation Deferral Agreement, when added to (i) any
employer contribution under any other cash or deferred arrangement
(described in Section 401(k) of the Code) to the extent not includible
in gross income for the taxable year under Section 402(a)(8) of the
Code, (ii) any employer contribution (to a simplified pension plan under
a salary reduction agreement) to the extent not includible in gross
income for the taxable year under Section 402(h)(1)(B) of the Code,
(iii) any employer contribution to purchase an annuity contract
(described in Section 403(b) of the Code) under a salary reduction
agreement (within the meaning of Section 3121(a)(5)(D) of the Code) to
the extent not includable in gross income for the taxable year under
Section 403(b) of the Code, and (iv) any employer contribution (pursuant
to any election to defer under any eligible deferred compensation plan)
to the extent not includable in gross income under Section 457 of the
Code, are limited to $7,000 (as adjusted, as may be determined by the
Commissioner of Internal Revenue, at the same time and in the same
manner as prescribed in Section 415(d) of the Code). In addition,
without limiting the scope of the immediately preceding sentence, with
respect to any Plan Year or
III-3
<PAGE> 21
taxable year of any Participant, Elective Contributions and/or any
similar elective deferrals (described in Section 402(g)(3) of the Code)
to the Plan and/or any other qualified plan, contract or arrangement,
which is described in the immediately preceding sentence and maintained
by an Employer and/or any Affiliated Employer, shall not in the
aggregate exceed the dollar limitation (as adjusted) of the immediately
preceding sentence and Section 402(g) of the Code as in effect at the
beginning of such taxable year.
(d) Remedying Excess Deferrals: To the extent that a
Participant's elective deferrals, authorized pursuant to the Sections of
the Code referenced in the immediately preceding subsection, exceed the
applicable limit for the applicable year so that any amount otherwise
excludable from such Participant's gross income for federal income tax
purposes is includible in his gross income, then, not later than the
first March 1 following the close of the taxable year of such excess
deferral, the Participant shall notify the Committee in writing of any
portion of any such excess deferrals which the Participant has elected
to allocate to the Plan. Such notice shall include the Participant's
certified written claim for a specified amount of excess deferrals for
the preceding calendar year and shall be accompanied by the
Participant's certified written statement that if such amounts are not
distributed, such excess deferrals, when added to amounts deferred under
other plans or arrangements described in Sections 401(k), 408(k), 403(b)
or 457 of the Code, exceeds the limit imposed under Section 402(g) of
the Code for the year in which the deferral occurred. In accordance
with Section 1.402(g)-1(e)(2) of the income tax regulations, to the
extent that the Participant only has elective deferrals for the taxable
year under the Plan and any other plan or arrangement described in the
previous sentence which is maintained by the same Employer, such
Employer may notify the Committee of any excess deferrals made on behalf
of the Participant.
Following actual receipt by the Committee of the notice described
in the immediately preceding paragraph, (notwithstanding any other
provision of law or the Plan relating to spousal consent), not later
than the first April 15 immediately following such March 1 deadline for
written notification of the Committee, the Plan shall distribute to such
Participant in a lump sum (in cash or in kind) the amount of excess
elective deferrals allocated to the Plan (and any income allocable to
such amount). Such distribution shall be made first by distribution of
nonmatched Elective Contributions, if any, allocated to the
Participant's Employer Nonforfeitable Contributions Account, and, if
necessary, next by distribution of Elective Contributions which were
made on behalf of the Participant and were matched by Matching
Contributions. Subject to the subsequent provisions of this paragraph,
to the extent that such excess deferrals are attributable to matched
Elective Contributions (and any income allocable thereto) which amounts
are distributed to the Participant pursuant to the preceding provisions
of this Section, Matching Contributions (and any income allocable
thereto) will be appropriately reduced and such reduced Matching
Contributions (and any income allocable thereto) shall be applied as
forfeitures pursuant to Section 4.6. Such reduction shall be made first
by reduction of Matching Contributions allocated to the Participant's
Employer Nonforfeitable Contributions Account, and, if necessary, next
by reduction of Matching
III-4
<PAGE> 22
Contributions allocated to the Participant's Employer Contributions
Account. The provisions of this paragraph (which provide for reduction
of Matching Contributions made with respect to Elective Contributions
which are distributed hereunder) are intended to comply with the
requirements of Sections 401(a), 401(k), 401(m) and 411 of the Code and
regulations or other authority issued thereunder by the appropriate
governmental authority. To the extent that any provision of this
paragraph is inconsistent with the preceding sentence, such provision
shall be deemed to be inoperative and the plan shall be operated in a
manner that complies with the requirements of the immediately preceding
sentence.
Income or loss allocable to the portion of the Participant's
Employer Nonforfeitable Contributions Account that is attributable to
excess elective deferrals (described below) shall be income or loss for
the taxable year allocable to the portion of Participant's Employer
Nonforfeitable Contributions Account that is attributable to elective
deferrals multiplied by a fraction, the numerator of which is the
Participant's excess elective deferrals for the year and the denominator
of which is the balance as of the end of such year of the portion of the
Participant's Employer Nonforfeitable Contributions Account that is
attributable to elective deferrals reduced by any gain and increased by
any loss allocable to such balance for the taxable year. In the event
that a separate subaccount is not maintained with respect to elective
deferrals attributable to Elective Contributions (and any income
allocable thereto), the portion of an Employer Nonforfeitable
Contributions Account which is attributable to elective deferrals is
determined by multiplying the balance of the Participant's Employer
Nonforfeitable Contributions Account by a fraction, the numerator of
which is an Elective Contributions made to the Plan on behalf of the
Participant and allocated and credited to the Participant's Employer
Nonforfeitable Contributions Account less any permitted withdrawals, and
the denominator of which is the sum of all Employer Contributions made
to the Plan on behalf of the Participant and allocated and credited to
the Participant's Employer Nonforfeitable Contributions Account less any
permitted withdrawals. Similar rules apply with respect to
determination of Matching Contributions allocated to an Employer
Contributions Account and any income allocable thereto. No income or
loss will be allocated for the gap period between the end of the taxable
year to the date of distribution for Plan Years beginning on or after
January 1, 1992 and, with respect to Plan Years beginning before such
date, income or loss shall be allocated in accordance with the
applicable income tax regulations and Plan document as then in effect.
Notwithstanding the preceding provisions of this subsection, any
Participant who has excess elective deferrals for a taxable year may
receive a corrective distribution of such deferrals (and income
attributable thereto) during the same year if the Participant notifies
the Committee of an excess deferral, the correcting distribution is made
after the date on which the Plan received the excess deferral and the
Plan designates and treats the distribution as a distribution of an
excess deferral. Any distribution described in the immediately
preceding sentence shall be made as soon as practicable, but absent
III-5
<PAGE> 23
circumstances beyond the control of the Committee, not later than 60
days after the first day of the month that occurs on or after the later
of (i) the actual receipt by Committee of the Participant's notification
of an excess deferral or (ii) the date that the Plan actually receives
the excess elective deferral. The income allocable to elective
deferrals from the first day of the taxable year to the date of the
distribution shall be determined by using the method described in the
immediately preceding paragraph.
Notwithstanding any other provision of this subsection to the
contrary, the amount of excess deferrals that may be distributed under
this subsection shall be reduced by any excess contributions over the
ADP limit (described in Section 3.4) previously distributed or
recharacterized with respect to a Participant for the Plan Year
beginning with or within such Participant's taxable year. In no event
shall any Participant receive from the Plan a corrective distribution
for the taxable year of an amount in excess of the Participant's total
elective deferrals under the Plan for the taxable year. Except as may
be otherwise required under Section 3.4, any excess deferral not timely
distributed shall remain in the Plan and shall be subject to otherwise
applicable terms, provisions, conditions and limitations thereof. In
addition, any excess elective deferrals shall be treated as annual
additions under Section 4.3. In addition, any excess deferrals which
are timely distributed under the preceding provisions of this subsection
shall not be treated as an annual addition under Section 4.3. Also,
excess deferrals by Non-Highly Compensated Employees shall not be taken
into account under the actual deferral percentage test of Section 3.4 to
the extent such excess deferrals are made under the Plan or any other
qualified plan of an Employer or any Affiliated Employer. A
distribution of elective deferrals (and allocable income thereon) under
this subsection shall not be considered as a distribution for purposes
of compliance with the minimum distribution provisions of Section 6.6.
3.3 Rollover Contributions: Rollover Contributions on the part of
the Employees shall be permitted from time to time as determined by the
Committee. In the event Rollover Contributions are permitted, the opportunity
to contribute shall be made available to Employees upon a nondiscriminatory
basis. An Employee who is permitted to make a Rollover Contribution shall not
be entitled to authorize Elective Contributions to the Plan or share in the
allocation of any Employer Contributions unless and until the Employee meets
the requirements of Sections 2.1, 3.2 and 4.2 of the Plan. Any such Rollover
Contribution made by an Employee shall be held in a separate Rollover Account
for such Employee which will share in any income or losses and/or appreciation
or depreciation of the Trust Fund. Rollover Contributions shall not be
considered Employee Voluntary Contributions under this Plan and shall have no
effect upon any limitation under the Plan based upon a Participant's
Contributions.
3.4 Employer Contributions:
(a) Elective Contributions: Subject to the applicable
limitations of the Plan set forth below, each periodic pay period an
Employer shall contribute to the Trust Fund (without regard to its Net
Income or accumulated earnings and profits) Elective
III-6
<PAGE> 24
Contributions for each Participant in an amount equal to the amount by
which the Participant's Considered Compensation was reduced pursuant to
a Compensation Deferral Agreement (and, if applicable, Special
Compensation Deferral Agreement) executed by the Participant pursuant to
Section 3.2.
(b) Matching Contributions: Subject to the applicable
limitations of the Plan set forth below, in addition to the Elective
Contributions described in the preceding subparagraph, with respect to
each month of the Plan Year (or such other period as may be prescribed
by the Board), an Employer may, in the discretion of the Board,
contribute to the Trust Fund (without regard to its Net Income or
accumulated earnings and profits) Matching Contributions on behalf of
each eligible Participant in an amount equal to the lesser of fifty
percent (50%) of the amount by which the Participant's Considered
Compensation was reduced for the month (or such other period as may be
prescribed by the Board) pursuant to a Compensation Deferral Agreement
(and, if applicable, Special Compensation Deferral Agreement) under
Section 3.2, not to exceed the "maximum dollar amount" as defined in the
immediately succeeding sentence for the month (or such other period as
may be prescribed by the Board), or such other percentage or dollar
amount as may be established by the Board pursuant to uniformly applied
nondiscriminatory rules. The "maximum dollar amount" shall be: (i) for
periods prior to June 1, 1992: $90 per month; (ii) for periods
beginning on or after June 1, 1992 and before January 1, 1997: the
first $2,160 of Elective Contributions made on behalf of the Participant
during the applicable calendar year; and (iii) for periods beginning on
and after January 1, 1997: the first $3,000 of Elective Contributions
made on behalf of the Participant during the applicable calendar year.
Any decision to provide a Matching Contribution for any Plan Year (or
such other period as may be prescribed by the Board) or any increase or
decrease in the percentage or dollar amount in effect from time to time,
shall be communicated to all eligible Employees at least seven (7) days
prior to the date on which eligible Employees are required to inform the
Committee of an increase or decrease in their Elective Contributions
under a Compensation Deferral Agreement (and, if applicable, a Special
Compensation Deferral Agreement) pursuant to Section 3.2.
(c) Profit Sharing Contributions: Subject to applicable
limitations of the Plan set forth below, with respect to each Plan Year,
an Employer may contribute to the Trust Fund (from its Net Income or
accumulated earnings and profits) Profit Sharing Contributions in such
amount as shall be determined by the Board in its discretion. Profit-
Sharing Contributions, if any, shall be made on behalf of each
Participant who remains in the employ of an Employer on the last day of
the Plan Year, notwithstanding the fact that the Participant did not
elect to reduce his Considered Compensation pursuant to a Compensation
Deferral Agreement (and, if applicable, a Special Compensation Deferral
Agreement) under Section 3.2 at any time during such Plan Year. For
purposes of the preceding sentence, any Participant whose employment
terminates on account of retirement, Total and Permanent Disability or
death, shall be deemed to be in the employ of
III-7
<PAGE> 25
an Employer on the last day of the Plan Year in which such termination
of employment occurs.
In addition, notwithstanding any other provision of the Plan to
the contrary, (i) any Participant whose employment terminates prior to
the last day of the Plan Year or who would otherwise not be treated as
employed in covered employment on the last day of the Plan Year, shall,
nevertheless, be treated as employed on the last day of the Plan Year to
the extent necessary to ensure compliance with Section 401(a)(4) of the
Code as set forth in Sections 1.401(a)(4)-2, 1.401(a)(4)-5 and
1.401(a)(4)-11 of the Income Tax Regulations, the requirements of
Section 410(b) of the Code as set forth in Sections 1.410(b)-1 and
1.410(b)-2 of the Income Tax Regulations and the requirements of Section
401(a)(26) of the Code as set forth in Section 1.401(a)(26)-2 of the
Income Tax Regulations; and (ii) any Participant who is, on the last day
of the Plan Year (or applicable shorter period), on a leave of absence
to which such Participant is entitled under the Family and Medical Leave
Act of 1993 ("FMLA") shall be deemed to be in the employ of the Employer
on such last day unless final regulations issued under the FMLA do not
require such treatment for this purpose.
In addition, the Plan Sponsor shall make a special, one time, per capita
contribution in the amount of $250 for each Employee who is employed by Reed
Tool Company on August 1, 1990. The special contribution described in the
previous sentence shall be contributed by the Plan Sponsor to the Trust Fund
during the Plan Year beginning January 1, 1991, and $250 shall thereafter be
allocated and credited to the Employer Contributions Account of each eligible
Employee.
(d) Qualified Non-Elective Contributions: At the election of
the Board, in lieu of distributing or recharacterizing excess Employer
Contributions to Highly Compensated Employees in order to satisfy the
actual deferral percentage test or the actual contribution percentage
test, as described below in this Section, an Employer may make Qualified
Non-Elective Contributions on behalf of Non-Highly Compensated Employees
who are Participants in such amounts as are sufficient to satisfy the
actual deferral percentage test or the actual contribution percentage
test, as applicable. Qualified Non-Elective Contributions, if any,
shall be made on behalf of each Participant who (i) is a Non-Highly
Compensated Employee and (ii) remains in the employ of an Employer as of
the last day of the Plan Year. For purposes of the preceding sentence,
any Participant whose employment terminates on account of retirement,
Total and Permanent Disability, or death, shall be deemed to be in the
employ of an Employer on the last day of the Plan Year in which the
termination of employment occurred.
In addition, notwithstanding any other provision of the Plan to
the contrary, any Participant whose employment terminates prior to the
last day of the Plan Year or who would otherwise not be treated as
employed in covered employment on the last day of the Plan Year, shall,
nevertheless, be treated as employed on the last day of the Plan Year to
the extent necessary to ensure compliance with Section 401(a)(4),
III-8
<PAGE> 26
Section 401(a)(26) and/or Section 410(b) of the Code; and (ii) any
Participant who is, on the last day of the Plan Year (or applicable
shorter period), on a leave of absence to which such Participant is
entitled under the Family and Medical Leave Act of 1993 ("FMLA") shall
be deemed to be in the employ of the Employer on such last day unless
final regulations issued under the FMLA do not require such treatment
for this purpose.
(e) Restoration of Forfeited Benefits: Not later than the
last day of the Plan Year in which occurs any repayment described in
Section 4.6, an Employer shall contribute (without regard to its Net
Income or accumulated earnings and profits) an amount which, when added
to previously unapplied and unallocated forfeitures, shall be equal to
the amount previously forfeited under applicable provisions of the Plan
by any Participant entitled to have his Account restored in accordance
with Section 4.6. In addition, as soon as administratively practicable
following receipt of a claim under circumstances described in Section
6.7, an Employer shall contribute (without regard to its Net Income or
accumulated earnings and profits) an amount equal to the value of the
forfeited benefits described in and payable under Section 6.7.
(f) Top-Heavy Minimum Contribution: In the event that the
Plan is a Top-Heavy Plan described in Article VII with respect to any
Plan Year, an Employer shall contribute (without regard to its Net
Income or accumulated earnings and profits) any amount necessary to
ensure that Participants who are entitled to a minimum allocation
pursuant to Section 7.3(c) in fact receive such allocation.
(g) Contribution Limits: No Contribution by an Employer shall
exceed a sum equal to fifteen percent (15%) of the total compensation
paid or accrued during its taxable year ending with or within the Plan
Year to all Participants.
No Contribution shall be made to the Plan under circumstances
which would result in any violation of the limitations of Section 3.2,
this Section 3.4 or Section 4.3 of the Plan. An Employer shall maintain
such records as may be necessary to demonstrate compliance with the
nondiscrimination tests set forth below in this Section.
(h) Actual Deferral Percentage Test: The actual deferral
percentage ("ADP") for all eligible Highly Compensated Employees shall
not exceed the greater of:
(i) the actual deferral percentage for the group of all
eligible Non-highly Compensated Employees multiplied by 1.25, or
(ii) the actual deferral percentage of the group of all
eligible Non-highly Compensated Employees multiplied by 2.0;
provided, however, that the actual deferral percentage for the
group of eligible Highly Compensated Employees may not exceed the
actual deferral percentage of the group of all eligible Non-
Highly Compensated Employees by more than two percentage points
(2%).
III-9
<PAGE> 27
For purposes of the immediately preceding sentence, the provisions of
Section 401(k)(3) of the Code and Section 1.401(k)-1(b) of the income
tax regulations are hereby incorporated into the Plan for all purposes.
In addition, if (i) any Highly Compensated Employee is eligible to
authorize Elective Contributions under the Plan and to have Matching
Contributions allocated with respect to an Elective Contributions or
(ii) such Highly Compensated Employee is eligible to make elective
deferrals (described in Section 402(g)(3) of the Code) under any other
cash or deferred arrangement (described in Section 401(k) of the Code)
and/or to make employee contributions (described in Section 401(m) of
the Code) or to receive matching contributions (described in Section
401(m) (4)(A) of the Code) under any other qualified plan of an Employer
and/or any Affiliated Employer regardless of whether such plan contains
a cash or deferred arrangement, the disparities between the actual
deferral percentages of the respective groups of eligible Highly
Compensated Employees and Non-Highly Compensated Employees shall be
reduced as described in Section 1.401(m)-2 of the income tax
regulations, and the provisions of subsection (k) below.
Subject to the provisions of the Plan set forth below, the actual
deferral percentage for a specified group of eligible Employees for a
Plan Year shall be the average of the actual deferral ratios (calculated
separately for each Employee in such group) of the sum of Elective
Contributions, Qualified Non-Elective Contributions, if any, and Profit
Sharing Contributions, if any, actually paid over to the Trust Fund on
behalf of each such Employee for such Plan Year, and allocated to the
Employee's Employer Nonforfeitable Contributions Account for such Plan
Year, to the Employee's Compensation (described in the immediately
succeeding sentence) for the Plan Year. For the purposes of performing
the ADP test, Compensation shall mean all remuneration:
(i) that is (a) received during the Plan Year by the
eligible Employee from an Employer and is required to be reported
as wages on the eligible Employee's form W-2 (or its successor)
for federal income tax withholding purposes (or, in the case of a
nonresident alien employee, is the type of income that would be
required to be reported as wages on form W-2 if such employee
were subject to such reporting requirements), but determined
without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor
in Section 3401(a)(2) of the Code), plus (b) any reduction under
a compensation deferral agreement under (1) a plan described in
Section 401(k) or 408(k) of the Code, (2) an annuity described in
Section 403(b) of the Code or (3) an election under a cafeteria
plan described in Section 125 of the Code,
(ii) that, subject to clause (iv) below, is actually
paid to or is includible (within the meaning of Section 1.415-
2(d)(3) and (4) of the income tax regulations) in the gross
income of the eligible Employee
III-10
<PAGE> 28
within the relevant Plan Year, or would have been so paid or
includible but for a reduction described in clause (i)
immediately above,
(iii) that does not exceed (A) for Plan Years beginning
on or after January 1, 1991 and before January 1, 1994, $200,000
and (B) for Plan Years beginning on or after January 1, 1994,
$150,000 (as adjusted at such time and in such manner as is
prescribed in Section 401(a)(17)(B) of the Code), and
(iv) that is received by the eligible Employee during
the entire Plan Year and not only while he is a Participant.
For the purposes of the immediately preceding paragraph, provided
that the actual deferral percentage test is satisfied both with and
without exclusion of these Elective Contributions, Elective
Contributions shall include excess elective deferrals described in
Section 3.2 (even if distributed under Section 3.3) made by Highly
Compensated Employees, as well as all Elective Contributions made by all
Participants that are not taken into account in the ACP test described
in a subsection below. In accordance with Section 1.402(g)-1(e)(iii) of
the income tax regulations, excess elective deferrals described in
Section 3.2 made by Non-Highly Compensated Employees, to the extent made
under the Plan or a plan maintained by an Affiliated Employer, shall not
be taken into account under the ADP test described in this subsection.
For the purpose of calculating the actual deferral percentages
hereunder, subject to and in accordance with regulations or other
authority issued under Sections 401(k) and/or 401(m) of the Code by the
appropriate governmental authority, only such portion of the applicable
Contributions (as described in the second previous paragraph) as may be
necessary to ensure compliance with the actual deferral percentage test
shall be taken into account for purposes of that test. Such actual
deferral ratios of each eligible Employee and the actual deferral
percentage of each group shall be calculated to the nearest one-
hundredth of one percent of the eligible Employee's Compensation. The
actual deferral ratio of an eligible Employee is zero if no applicable
Contributions were allocated to such Employee's Employer Nonforfeitable
Contributions Account for the Plan Year.
In accordance with the requirements of Section 1.401(k)-1(b)(3)
of the income tax regulations, two or more cash or deferred arrangements
(as defined in Section 401(k) of the Code) may be considered one such
arrangement for purposes of determining whether such arrangements
satisfy the requirements of Sections 401(a)(4), Section 401(k) and
410(b) of the Code. In such case, the cash or deferred arrangements
included in such plans and the plans including such arrangements shall
be treated as one arrangement and as one plan for purposes of applying
this Section and Sections 401(a)(4), 401(k) and 410(b) of the Code. If
an Employer and any Affiliated Employer individually or collectively
maintain two or more plans that are treated as a single plan for
purposes of
III-11
<PAGE> 29
Section 401(a)(4) or 410(b) of the Code (other than Section
410(b)(2)(A)(ii) of the Code, all cash or deferred arrangements that are
included in such plans are to be treated as a single arrangement for
purposes of this Section and Sections 401(a)(4), 401(k) and 410(b) of
the Code. Plans may be aggregated under the preceding provisions of
this paragraph only if they have the same Plan Year. With respect to
Plan Years beginning after December 31, 1986, if any Highly Compensated
Employee is a participant under two or more cash or deferred
arrangements (as defined in Section 401(k) of the Code) of an Employer,
for purposes of determining the actual deferral ratio with respect to
such Highly Compensated Employee, all such cash or deferred arrangements
shall be treated as one cash or deferred arrangement. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, the immediately preceding
sentence shall be applied by treating all cash or deferred arrangements
with years ending with or within the same calendar year as a single
arrangement. Contributions and allocations under an employee stock
ownership plan described in Section 4975(e)(7) of the Code may not be
combined with contributions or allocations under any plan not described
in Section 4975(e)(7) of the Code.
With respect to Plan Years beginning prior to January 1, 1992,
the Plan or, if the Plan is aggregated with another cash or deferred
arrangement pursuant to the previous paragraph, such aggregated Plan
may, in the discretion of the Committee, be restructured (in accordance
with Sections 1.401(k)-1(h)(3)(iii), 1.401(a)(4)-1(c)(8)(iii) and
1.401(a)(4)-9(c) of the income tax regulations into two or more
component plans for purposes of determining whether the Plan or
aggregated Plan satisfies Section 401(a))(4) of the Code and the actual
deferral percentage test set forth above. If each of the component
plans of the Plan or aggregated Plan satisfies all of the requirements
of Sections 401(a)(4) and 410(b) of the Code as if it were a separate
Plan or aggregated Plan, then the Plan or aggregated Plan is treated as
satisfying Section 401(a)(4) of the Code. If the Plan or aggregate Plan
is restructured into component plans for purposes of testing for
compliance with Section 401(a)(4) of the Code and the actual deferral
percentage test, each component plan resulting from such restructuring
shall consist of all of the allocations, accruals, and other benefits,
rights and features provided to a group of Employees under the Plan or
aggregated Plan. Each Employee is permitted to be included in only one
such component plan.
If an eligible Highly Compensated Employee is subject to the
family aggregation rules of Section 414(q)(6) of the Code (as described
in the third paragraph of the Highly Compensated Employee definition in
Section 3.5) because such person is either a 5-percent owner (described
in the Highly Compensated Employee definition) or a Highly Compensated
Employee in the group consisting of the ten Highly Compensated Employees
paid the greatest compensation (as described in the Highly Compensated
Employee definition), the combined actual deferral ratio of the family
group (which is treated as one Highly Compensated Employee) shall be
determined by combining the Compensation, as well as the applicable
Contributions (described above) which are allocated to the Employer
Nonforfeitable Contributions Account of all such eligible
III-12
<PAGE> 30
family members described in this sentence. The Compensation, as well as
the applicable Contributions (described above) allocated to the Employer
Nonforfeitable Contributions Accounts of all eligible family members,
are disregarded for purposes of determining the ADP of the group of
Non-Highly Compensated Employees. If any eligible Employee is required
to be aggregated as a member of more than one family group, all eligible
Employees who are members of those family groups that include such
Employee are aggregated as one family group in accordance with the
preceding provisions of this paragraph.
(i) Excess Employer Contributions Over ADP Limits:
(i) Distribution of Excess Employer Contributions: In
the event that with respect to any Plan Year, the aggregate
amount of Employer Contributions (taken into account in computing
the actual deferral percentage of Highly Compensated Employees
for the Plan Year) exceeds the maximum amount of such Employer
Contributions permitted under the actual deferral percentage
tests set out above, then (to the extent that another means of
satisfying the ADP test is not implemented by the Committee),
within two and one-half months from the end of the Plan Year or
as soon as practicable, but not later than the end of the Plan
Year immediately following the Plan Year to which any such excess
Employer Contributions pertain, such excess (plus allocable
income or loss) shall be distributed to Highly Compensated
Employees, as provided below. In lieu of distribution of excess
Contributions, within twelve (12) months after the end of the
Plan Year, an Employer may make Qualified Non-Elective
Contributions on behalf of Non-Highly Compensated Employees
pursuant to Section 3.4(d) in an amount sufficient to satisfy the
ADP test for the Plan Year.
The amount of such excess Employer Contributions for a
Highly Compensated Employee for a Plan Year shall be determined
by the following leveling method, under which the actual deferral
ratio of the Highly Compensated Employee with the highest actual
deferral ratio is reduced to the extent required to (i) enable
the Plan to satisfy the actual deferral percentage test set out
above, or (ii) cause such Highly Compensated Employee's actual
deferral ratio to equal the ratio of the Highly Compensated
Employee with the next highest actual deferral ratio. This
process shall be repeated until the Plan satisfies the actual
deferral percentage test. For each Highly Compensated Employee,
the amount of such excess Employer Contributions is equal to the
applicable Contributions that were allocated to such Employee's
Employer Nonforfeitable Contributions Account and taken into
account in computing his actual deferral ratio (determined prior
to the application of this and the immediately preceding
sentence), minus the amount determined by
III-13
<PAGE> 31
multiplying such Employee's actual deferral ratio (determined
after application of this and the immediately preceding sentence)
by his Compensation used in determining such ratio.
Any such excess Employer Contributions shall be allocated
to Participants who are subject to the family member aggregation
rules of Section 414(q)(6) of the Code (described in the third
paragraph of the Highly Compensated Employee definition) in the
manner prescribed under Section 1.401(k)-1(f)(5) of the income
tax regulations. Any such excess Employer Contributions
(including any amounts that are recharacterized under applicable
provisions of the Plan) shall be treated as annual additions
under Section 4.3 of the Plan. In no event shall the amount of
such excess Employer Contributions to be recharacterized for a
Plan Year with respect to any Highly Compensated Employee exceed
the amount of Employer Contributions made on behalf of such
Highly Compensated Employee for such Plan Year.
For purposes of this subsection, in accordance with
Section 1.401(k)-1(f)(4)(ii)(C) of the income tax regulations,
income or loss that is allocable to excess Employer Contributions
(described above) for the Plan Year shall be the income or loss
allocable to the Participant's Employer Nonforfeitable
Contributions Account (to the extent attributable to applicable
Contributions (described above) used in the ADP test), multiplied
by a fraction. The numerator of the fraction is the
Participant's excess Employer Contributions for the Plan Year.
The denominator is the balance of the Participant's Employer
Nonforfeitable Contributions Account (to the extent attributable
to applicable Contributions (described above) used in the ADP
test), as of the beginning of that Plan Year, plus the applicable
Contributions (described above) allocated to his Employer
Nonforfeitable Contributions Account for the Plan Year. No
income or loss will be allocated for the gap period between the
end of the Plan Year to the date of distribution for Plan Years
beginning on or after January 1, 1992 and, with respect to Plan
Years beginning before such date, income or loss shall be
allocated in accordance with the applicable income tax
regulations and Plan document as then in effect.
Excess Employer Contributions (and any income allocable
thereto) shall be distributed from the portion of an Employer
Nonforfeitable Contributions Account attributable to the
Contributions used in the ADP test. If the Plan has Qualified
Matching Contributions ("QMC"), distribution of Elective
Contributions (plus earnings) and QMC (plus earnings) shall be
made in proportion to the Participant's Elective Contributions
and QMC (to the extent used in the ADP test) for the Plan Year,
unless the Code permits and the committee elects otherwise. In
III-14
<PAGE> 32
addition, to the extent that such excess Employer Contributions
are attributable to Elective Contributions (and any income
allocable thereto) which amounts are distributed to the
Participant pursuant to the preceding provisions of this
subsection, Matching Contributions (and any income allocable
thereto determined in the same manner as for other contributions)
will be appropriately reduced and the reduced Matching
Contributions (and any income allocable thereto) shall be applied
as forfeitures pursuant to Section 4.6. Such reduction shall be
made first by reduction of Matching Contributions allocated to
the Participant's Employer Nonforfeitable Contributions Account,
and, if necessary, next by reduction of Matching Contributions
allocated to the Participant's Employer Contributions Account.
The provisions of this paragraph (which provide for reduction of
Matching Contributions made with respect to excess Elective
Contributions which are distributed hereunder) are intended to
comply with the requirements of Sections 401(a), 401(k), 401(m)
and 411 of the Code. To the extent that any provision of this
paragraph is inconsistent with the preceding sentence, such
provision shall be deemed to be inoperative and the plan shall be
operated in a manner that complies with the requirements of the
immediately preceding sentence.
(ii) Recharacterization of Excess Employer
Contributions: Recharacterization of excess Employer
Contributions in accordance with provisions of this paragraph
shall be permitted from time to time as determined by the
Committee with respect to any Plan Year in which Employee
Voluntary Contributions are permitted under the Plan. In the
event that such recharacterization is permitted, the opportunity
to elect to recharacterize excess Employer Contributions shall be
announced and made available to all affected Participants on a
uniform basis. If a determination is made to permit
recharacterization, pursuant to uniformly applied
nondiscriminatory rules which shall be established from time to
time by the Committee, and subject to the provisions of this
paragraph, following a Participant's receipt of written
notification of excess Employer Contributions allocable thereto,
such Participant may elect (at such time and in such manner as
shall be prescribed under non-discriminatory rules established
from time to time by the Committee) whether or not all or any
portion of such excess Employer Contributions shall be
recharacterized as after-tax Employee Voluntary Contributions;
provided, however, that the Committee may effect the
recharacterization of a Participant's excess Employer
Contributions without such Participant's election or consent if
the Committee determines, in its sole discretion, that it is not
feasible under the circumstances to obtain the Participant's
election and that it is necessary or desirable to promptly effect
such recharacterization in order to ensure compliance with plan
qualification requirements. The amount
III-15
<PAGE> 33
of excess Employer Contributions that may be recharacterized with
respect to an affected Participant for a Plan Year shall be
reduced by any excess deferrals that were previously distributed
to such Participant with respect to his taxable year ending with
or within such Plan Year.
Recharacterized amounts shall remain nonforfeitable and,
except as provided in regulations issued under Section 401(k) of
the Code, shall be treated as Employee Contributions for purposes
of Section 401(a)(4) of the Code and Section 1.401(k)-1(b) of the
income tax regulations (including the continued application of
the same limits on distributions that apply to Elective
Contributions), however, for all other purposes, such amounts
shall be treated as Elective Contributions. Elective
Contributions shall be reduced by the amount recharacterized and
related earnings. Notwithstanding any other provision of this
subsection to the contrary, recharacterization of excess Employer
Contributions allocable to a Participant shall not be permitted
to the extent that such amount, in combination with any other
Employee Contributions made by the affected Participant, would
exceed any limit under the Plan affecting Employee Contributions.
If less than all such excess Employer Contributions are
recharacterized, the amount that must otherwise be distributed
under the Plan in order to correct such excess shall be reduced
by the amount recharacterized and related earnings. Earnings
related to any recharacterized amount shall not be treated as a
recharacterized amount.
Recharacterization must occur no later than two and one-
half months after the last day of the Plan Year in which such
excess Employer Contributions arose, and shall be deemed to occur
no earlier than the date that the last Highly Compensated
Employee is informed (by the Committee) in writing of the amount
recharacterized and the consequences thereof. Recharacterized
amounts will be taxable to the Participant for the Participant's
tax year in which the Participant would have received them in
cash.
(j) Actual Contribution Percentage Test: The actual
contribution percentage ("ACP"), as determined for a Plan Year pursuant
to this subsection, for all eligible Highly Compensated Employees shall
not exceed the greater of:
(i) the actual contribution percentage for the group of
all eligible Non-Highly Compensated Employees multiplied by 1.25,
or
(ii) the actual contribution percentage of the group of
all eligible Non-Highly Compensated Employees multiplied by 2.0;
provided, however, that the actual contribution percentage for
the group of eligible Highly Compensated Employees may not exceed
the actual contribution
III-16
<PAGE> 34
percentage of the group of all eligible Non-Highly Compensated
Employees, by more than two percentage points (2%).
For purposes of the immediately preceding sentence, the provisions of
Section 401(m) of the Code and Section 1.401(m)-1 of the income tax
regulations are hereby incorporated into the Plan for all purposes. In
addition, if any Highly Compensated Employee is eligible to authorize
Elective Contributions under the Plan and to have Matching Contributions
allocated with respect thereto, or if such Highly Compensated Employee
is eligible to make elective contributions (described in Section
402(g)(3) of the Code) under any other cash or deferred arrangement
(described in Section 401(k) of the Code) and/or to make employee
contributions (described in Section 401(m) of the Code) or to receive
matching contributions (described in Section 401(m)(4)(A) of the Code)
under any other qualified plan of an Employer and/or any Affiliated
Employer regardless of whether such plan contains a cash or deferred
arrangement, the disparities between the actual contribution percentages
of the respective groups of eligible Highly Compensated Employees and
Non-Highly Compensated Employees shall be reduced as described in
Section 1.401(m)-2 of the income tax regulations and subsequent
provisions of this subsection.
Subject to the limitations set forth below, the actual
contribution percentage for a specified group of eligible Employees for
a Plan Year shall be the average of the actual contribution ratios
(calculated separately for each Employee in such group) of the sum of
any (i) Employer Matching Contributions allocated to the Employee's
Employer Contributions Account for the Plan Year, (ii) Employee
Voluntary Contributions, including any amounts recharacterized as
Employee Voluntary Contributions and allocated to the Employee's
Employee Account, and (iii) to the extent taken into account under
Section 1.401(m)-1(b)(5) of the income tax regulations and this
subsection, any Elective Contributions, Qualified Non-Elective
Contributions, and Profit Sharing Contributions allocated to the
Employee's Employer Nonforfeitable Contributions Account for such Plan
Year, to the Employee's Compensation (defined below) for the Plan Year.
Notwithstanding anything in the preceding sentence to the contrary, the
ACP described in the preceding sentence shall not include Matching
Contributions that are forfeited either to correct excess aggregate
contributions or because the contributions to which they relate are
excess deferrals, excess contributions or excess aggregate
contributions. To the extent that any Contribution is required to
satisfy the ADP test set forth above in this Section, it may not be used
to satisfy the ACP test. For the purposes of performing the ACP test,
Compensation shall mean all remuneration:
(i) that is (a) received during the Plan Year by the
eligible Employee from an Employer and is required to be reported
as wages on the eligible Employee's form W-2 (or its successor)
for federal income tax withholding purposes (or, in the case of a
nonresident alien employee, is the type of income that would be
required to be reported on form W-2 if such employee were subject
to such reporting requirements), but
III-17
<PAGE> 35
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception
for agricultural labor in Section 3401(a)(2) of the Code), plus
(b) any reduction under a compensation deferral agreement under
(1) a plan described in Section 401(k) or 408(k) of the Code, (2)
an annuity described in Section 403(b) of the Code or (3) an
election under a cafeteria plan described in Section 125 of the
Code,
(ii) that subject to clause (iv) below, is actually paid
to or is includible (within the meaning of Section 1.415-2(d)(3)
and (4) of the income tax regulations) in the gross income of the
eligible Employee within the relevant Plan Year, or would have
been so paid or includible but for a reduction described in
clause (i) immediately above,
(iii) that does not exceed (A) for Plan Years beginning
on or after January 1, 1991 and before January 1, 1994, $200,000;
and (B) for Plan Years beginning on or after January 1, 1994,
$150,000 (as such dollar amounts are adjusted at such time and in
such manner as may be prescribed in Section 401(a)(17)(B) of the
Code), and
(iv) that is received by the eligible Employee during
the entire Plan Year and not only while he is a Participant.
For the purposes of computing the actual contribution percentage ratios,
Elective Contributions shall include excess elective deferrals described
in Section 3.2 and any Elective Contributions that are not taken into
account in the actual deferral percentage test, provided that the actual
deferral percentage test is satisfied both with and without exclusion of
these Elective Contributions. Any Qualified Non-Elective Contributions
and any Profit Sharing Contributions allocated to the Participant's
Employer Nonforfeitable Contributions Account, as provided above, shall
be taken into account for purposes of the actual contribution percentage
test to the extent that such amounts are not needed to pass the actual
deferral percentage test. Such actual contribution ratios of each
eligible Employee and the actual contribution percentage of each group
shall be calculated to the nearest one-hundredth of one percent of the
eligible Employee's Compensation. The actual contribution ratio of an
eligible Employee is zero if no Contributions which are used in
computing actual contribution ratios are allocated on behalf of such
Employee.
If an Employer and any Affiliated Employer, individually or
collectively, maintain two or more plans that are treated as a single
plan for purposes of Section 401(a)(4) or 410(b) of the Code (other than
Section 410(b)(2)(A)(ii) of the Code, all employee and matching
contributions described in Section 1.401(m)-1(f) of the Proposed income
tax regulations (or any successor thereto) are to be treated as made
under a single plan for purposes of this Section and Sections 401(a)(4),
401(k) and 410(b) of the Code. Plans
III-18
<PAGE> 36
may be aggregated under the preceding provisions of this paragraph only
if they have the same Plan Year. If any Highly Compensated Employee is
a participant under two or more plans of an Employer or any Affiliated
Employer which are subject to Section 401(m) of the Code, for purposes
of determining the actual contribution ratio with respect to such Highly
Compensated Employee, all employee and/or matching contributions
described in Section 1.401(m)-1(f) of the Proposed income tax
regulations (or any successor thereto) made under such plans must be
aggregated. Contributions and allocations under an employee stock
ownership plan described in Section 4975(e)(7) of the Code may not be
combined with contributions or allocations under any plan not described
in Section 4975(e)(7) of the Code.
With respect to Plan Years beginning prior to January 1, 1992,
the Plan or, if the Plan is aggregated with another plan pursuant to the
previous paragraph, such aggregated Plan may, in the discretion of the
Committee, be restructured (in accordance with Sections 1.401(m)-
1(g)(5), 1.401(a)(4)-1(c)(8)(iii) and 1.401(a)(4)-9(c) of the income tax
regulations into two or more component plans for purposes of determining
whether the Plan or aggregated Plan satisfies Section 401(a)(4) of the
Code and the actual contribution percentage test set forth above. If
each of the component plans of the Plan or aggregated Plan satisfies all
of the requirements of Sections 401(a)(4) and 410(b) of the Code as if
it were a separate Plan or aggregated Plan, then the Plan or aggregated
Plan is treated as satisfying Section 401(a)(4) of the Code. If the
Plan or aggregated Plan is restructured into component plans for
purposes of testing for compliance with Section 401(a)(4) of the Code
and the actual contribution percentage test, each component plan
resulting from such restructuring shall consist of all the allocations,
accruals, and other benefits, rights and features provided to a group of
Employees under the Plan or aggregated Plan. Each Employee is permitted
to be included in only one such component plan.
If an eligible Highly Compensated Employee is subject to the
family aggregation rules of Section 414(q)(6) of the Code (described in
the third paragraph of the Highly Compensated Employee definition in
Article I) because such person is either a 5-percent owner (as described
in the Highly Compensated Employee definition) or a Highly Compensated
Employee in the group consisting of the ten Highly Compensated Employees
paid the greatest compensation (as described in the Highly Compensated
Employee definition), the combined actual contribution ratio of the
family group (which is treated as one Highly Compensated Employee) shall
be determined by combining the Compensation, as well as the applicable
Contributions (described above) which are allocated to the appropriate
Accounts of all eligible family members described in this sentence. The
Compensation, as well as the applicable Contributions (described above)
which are allocated to the appropriate Accounts of all eligible family
members are disregarded for purposes of determining the ACP of the group
of Non-Highly Compensated Employees. If any eligible Employee is
required to be aggregated as a member of more than one family group, all
eligible Employees who are members of
III-19
<PAGE> 37
those family groups that include that Employee shall be aggregated as
one family group in accordance with the preceding provisions of this
paragraph.
(k) Prohibited Multiple Use of 2.0/2% Alternative Limits for
the ADP and ACP Tests: Any disparity between the actual deferral
percentage or actual contribution percentage of the respective groups of
Highly Compensated Employees and Non-Highly Compensated Employees shall
be reduced as described in Section 1.401(m)-2 of the income tax
regulations (or any successor regulations). Without limiting the scope
of the immediately preceding sentence, any multiple use of the
alternative method of compliance with the ADP and ACP tests (i.e., the
2.0/2% alternative limit which is described in clauses (ii) and (iv)
below and in Sections 401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the
Code) shall be determined and corrected, as appropriate, in accordance
with the provisions of this subsection.
Multiple use of such alternative limitation shall occur if the
sum of (a) the actual deferral percentage of the entire group of
eligible Highly Compensated Employees under the Plan or any other cash
or deferred arrangement (described in Section 401(k) of the Code) of an
Employer or an Affiliated Employer and (b) the actual contribution
percentage of the entire group of eligible Highly Compensated Employees
under the Plan or any other qualified plan of an Employer or an
Affiliated Employer that is subject to Section 401(m) of the Code,
exceeds the greater of:
(i) 125 percent of the greater of (1) the actual
deferral percentage of the group of Non-Highly Compensated
Employees eligible under the Plan (or other arrangement of an
Employer or Affiliated Employer that is subject to Section 401(k)
of the Code) for the Plan Year, or (2) the actual contribution
percentage of the group of Non-Highly Compensated Employees under
the Plan (or other plan of an Employer or Affiliated Employer
that is subject to Section 401(m) of the Code) for the Plan Year
beginning with the Plan Year of the Plan (or other arrangement
that is subject to Section 401(k) of the Code), plus
(ii) the number two (2) plus the lesser of clause (1) or
(2) of (i) above; provided, however, in no event shall the amount
computed under this (ii) exceed 200 percent of the lesser of
clause (1) or (2) of (i) above; or
(iii) 125 percent of the lesser of (1) the actual
deferral percentage of the group of Non-Highly Compensated
Employees eligible under the Plan (or other arrangement of an
Employer or Affiliated Employer that is subject to Section 401(k)
of the Code) for the Plan Year, or (2) the actual contribution
percentage of the group of Non-Highly Compensated Employees under
the Plan (or other plan of an Employer or Affiliated Employer
that is subject to Section 401(m) of the Code)
III-20
<PAGE> 38
for the Plan Year beginning with the Plan Year of the Plan (or
other arrangement that is subject to Section 401(k) of the Code),
plus
(iv) the number two (2) plus the greater of clause (1)
or (2) of (iii) above; provided, however, in no event shall the
amount computed under this (iv) exceed 200 percent of the lesser
of clause (1) or (2) of (iii) above.
Notwithstanding the previous paragraph, multiple use of the
alternative limitation does not occur if (i) the ADP of the group of
Highly Compensated Employees does not exceed the product of 1.25
multiplied by the ADP of the group of Non-Highly Compensated Employees,
or (ii) the ACP of the group of Highly Compensated Employees does not
exceed the product of 1.25 multiplied by the ACP of the group of Non-
Highly Compensated Employees.
The actual deferral percentage and actual contribution percentage
of the group of eligible Highly Compensated Employees shall be
determined after the use of all applicable Contributions to meet the
actual deferral percentage test and after use of all applicable
Contributions to meet the requirements of the actual contribution
percentage test. In addition, the actual deferral percentage and the
actual contribution percentage of the group of eligible Highly
Compensated Employees shall be determined after any required corrective
distribution of excess deferrals, excess Employer Contributions or
excess aggregate Contributions (described below), and after any required
recharacterization of excess Employer Contributions, without regard to
the rules hereunder relating to multiple use of the alternative methods
of compliance contained in this subsection and Sections
401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code.
If a multiple use of the alternative method of compliance with
Sections 401(k) and 401(m) occurs, in order to eliminate the multiple
use of such alternative method of compliance, the amount of reduction to
the actual deferral percentage of the entire group of eligible Highly
Compensated Employees under the Plan (and each other arrangement subject
to Section 401(k) of the Code) shall be calculated in the manner
described in this Section 3.4(k) of the Plan and Section 1.401(k)-
1(f)(2) of the income tax regulations. Such required reduction shall be
treated as an excess contribution under the arrangement subject to
Section 401(k) of the Code. However, if any excess contribution is
recharacterized as an Employee Voluntary Contribution, such
recharacterized amount shall be treated as an excess aggregate
Contribution. Instead of reducing the actual deferral ratios of Highly
Compensated Employees, the Employer may eliminate the multiple use of
the alternative limitation by making Qualified Non-Elective
Contributions on behalf of Non-Highly Compensated Employees (pursuant to
Section 3.4(d)) within twelve (12) months after the end of the Plan
Year.
(l) Excess Aggregate Contributions Over ACP Limits: In the
event that with respect to any Plan Year, the aggregate amount of
applicable Contributions taken into
III-21
<PAGE> 39
account under the actual contributions percentage test (set forth above)
on behalf of Highly Compensated Employees exceeds the maximum amount of
such Contributions permitted under the actual contribution percentage
test set out above (determined by reducing such Contributions made on
behalf of Highly Compensated Employees in order of actual contribution
percentages beginning with the highest of such percentages), then,
within two and one-half months from the end of the Plan Year or as soon
as practicable, but not later than the end of the Plan Year immediately
following the Plan Year to which any such excess aggregate Contributions
pertain, as described below, such excess (plus allocable income loss)
shall be forfeited, if forfeitable, or distributed to Highly Compensated
Employees on the basis of the respective portions of such excess
aggregate Contributions attributable to each of the Highly Compensated
Employees as provided below. In lieu of forfeiture or distribution of
such excess aggregate contributions, within twelve (12) months after the
end of the Plan Year, the Employer may make Qualified Non-Elective
Contributions on behalf of Non-Highly Compensated Employees pursuant to
Section 3.4(d) in an amount sufficient to satisfy the ACP test for the
Plan Year.
The amount of such excess aggregate Contributions for a Highly
Compensated Employee for a Plan Year shall be determined by the
following leveling method, under which the actual contribution ratio of
the Highly Compensated Employee with the highest actual contribution
ratio is reduced to the extent required to (i) enable the Plan to
satisfy the actual contributions percentage test set out above, or (ii)
cause such Highly Compensated Employee's actual contribution ratio to
equal the ratio of the Highly Compensated Employee with the next highest
actual contribution ratio. This leveling process shall be repeated
until the Plan satisfies the actual contributions percentage test. For
each Highly Compensated Employee, the amount of such excess aggregate
Contributions is equal to the applicable Contributions described below
that were taken into account in computing his actual contribution ratio
(determined prior to the application of this and the immediately
preceding sentence), minus the amount determined by multiplying such
Employee's actual contribution ratio (determined after application of
this and the immediately preceding sentence) by his Compensation used in
determining such ratio. Any such excess aggregate Contributions shall
be allocated to Participants who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code (described in the
third paragraph of the Highly Compensated Employee definition) in the
manner prescribed under Section 1.401(k)-1(f)(5) of the income tax
regulations.
For purposes of this subsection, in accordance with Section
1.401(m)-1(e)(3)(ii)(C) of the income tax regulations, income or loss
that is allocable to excess aggregate Contributions (described above)
for the Plan Year shall be the income or loss allocable to the
applicable Contributions (described above) used in the ACP test
multiplied by a fraction. The numerator of this fraction is the
Participant's excess aggregate Contributions for the Plan Year. The
denominator is the balance of the Participant's Account to the extent
used in the ACP test as of the beginning of the Plan Year, plus the
applicable Contributions (described above) used in the ACP test for the
III-22
<PAGE> 40
Plan Year. Income or loss allocable to excess aggregate contributions
that are recharacterized as after-tax Employee Voluntary Contributions
is determined as if the recharacterized amounts had been distributed as
Elective Contributions. No income or loss will be allocated for the gap
period between the end of the Plan Year and the date of distribution for
Plan Years beginning on or after January 1, 1992 and, with respect to
Plan Years beginning before such date, income or loss shall be allocated
in accordance with the income tax regulations and Plan document as then
in effect.
The Committee (on or before the fifteenth day of the third month
following the end of the Plan Year but, in any event, before the end of
the next Plan Year) shall direct the Trustee to distribute to the Highly
Compensated Employee having the highest actual contribution ratio, his
portion of the excess aggregate contributions (and income allocable
thereto) or, if forfeitable, forfeit such non-vested excess aggregate
contributions attributable to Matching Contributions (and income
allocable thereto) pursuant to Section 4.6. This process shall be
repeated until the ACP test is satisfied, or until the actual
contribution ratio of such Highly Compensated Employee equals the actual
contribution ratio of the Highly Compensated Employee having the next
highest actual contribution ratio. Vested Matching Contributions may
not be forfeited to correct excess aggregate contributions; provided,
however, an otherwise vested Matching Contribution may be forfeited if
the Elective Contribution to which such Matching Contribution relates is
an excess contribution (above the ADP limits of Section 401(k)(3) of the
Code) or an excess deferral (above the annual dollar limit of Section
402(g) of the Code). The forfeiture or distribution of excess aggregate
contributions (and allocable income) shall be made in the following
order:
(i) Distribution of Elective Contributions recharacterized as
Employee Voluntary Contributions, if any;
(ii) Forfeiture of non-vested Matching Contributions, if any;
and
(iii) Distribution of vested Matching Contributions, if any.
Forfeitures of excess aggregate contributions (and income
allocable thereto) shall be administered in accordance with Section 4.6;
provided, however, if forfeitures are allocated to Participants under
Section 4.6, no forfeitures may be allocated to a Highly Compensated
Employee whose excess aggregate contributions were reduced pursuant to
the previous paragraph.
Excess aggregate contributions are still counted as Employer
Contributions, for purposes of Sections 404 and 415 of the Code, for the
Plan Year when made, even if distributed from the Plan. In addition,
forfeitures of excess Matching Contributions to satisfy the ACP test are
still counted as annual additions under Section 415 of the Code for the
Plan Year when made on behalf of the applicable Highly Compensated
Employees from whose Accounts such amounts were forfeited. If
forfeitures are re-allocated to
III-23
<PAGE> 41
Participants' Accounts pursuant to Section 4.6, such forfeitures are
also treated as annual additions under Section 415 of the Code on behalf
of such Participants for the Plan Year in which such amounts are re-
allocated.
(m) Mandatory Disaggregation of Certain Plans: Notwithstanding
any provision of this Section 3.4 to the contrary, the Plan shall be
operated in accordance with Section 1.401(k)-1(g)(11) of the income tax
regulations concerning mandatory disaggregation of certain types of
plans. Subject to all the requirements of Section
1.401(k)-1(g)(11)(iii) of the income tax regulations, the following
plans shall be treated as comprising separate plans:
(i) Plans benefiting collective bargaining unit
employees. A plan that benefits employees who are included in a
unit of employees covered by a collective bargaining agreement
and employees who are not included in such a collective
bargaining unit is treated as comprising separate plans.
(ii) ESOPS and non-ESOPs. For Plan Years beginning on
or after January 1, 1991, the portion of a plan that is an
employee stock ownership plan described in Section 4975(e) or 409
of the Code (an ESOP) and the portion of the plan that is not an
ESOP are treated as separate plans, except as otherwise permitted
under Section 54.4975-11(e) of the income tax regulations.
(iii) Plans benefiting employees of qualified separate
lines of business. If an Employer is treated as operating
qualified separate lines of business for purposes of Section
410(b) of the Code, the portion of a plan that benefits employees
of one qualified separate line of business is treated as a
separate plan from the portions of the same plan that benefit
employees of the other qualified separate lines of business of
the Employer.
(iv) Plans maintained by more than one employer--
(A) Multiple employer plans. If a plan
benefits employees of more than one Employer and
the employees are not included in a unit of
employees covered by a collective bargaining
agreement (a multiple employer plan), the plan is
treated as comprising separate plans each of which
is maintained by a separate Employer.
(B) Multiemployer plans. The portion of
a plan that benefits employees who are included in
a collective bargaining unit, the portion of a plan
that benefits
III-24
<PAGE> 42
employees who are included in another collective
bargaining unit and the portion of a plan that
benefits non-collective bargaining unit employees
are all treated as separate plans. Consistent with
Section 413(b) of the Code, the portion of a plan
that is maintained pursuant to a collective
bargaining agreement is treated as a single plan
maintained by a single employer that employs all
the employees benefiting under the same benefit
computation formula and covered pursuant to that
collective bargaining agreement. The non-
collectively bargained portion of the plan is
treated as maintained by one or more employers,
depending on whether the non-collective bargaining
unit employees who benefit under the plan are
employed by one or more employers.
3.5 Highly Compensated Employee: For all purposes of the Plan,
"Highly Compensated Employee" shall mean (subject to the subsequent provisions
hereof) any Employee, who during the Plan Year for which the determination is
being made (the "determination year") or during the 12-month period immediately
preceding the Plan Year (the "look-back year"):
(a) was at any time a 5-percent owner (as defined in Section
416(i)(1) of the Code and Section 7.4),
(b) received compensation (described below) from an Employer
in excess of $75,000 (as adjusted at such time and in such manner as may
be prescribed under Section 414(q) and Section 415(d) of the Code,
(c) received compensation from an Employer in excess of
$50,000 (as adjusted at such time and in such manner as may be
prescribed under Section 414(q) and Section 415(d) of the Code, and was
in the top-paid group of Employees consisting of the top 20-percent of
the Employees when ranked on the basis of compensation paid during such
year, excluding, however, for purposes of determining the number (but,
except for Employees covered by collective bargaining agreements
described below, not identity) of Employees which comprise such top-paid
group of Employees, (i) any Employee who has not completed six months of
service as of the end of the current year after aggregating the
Employee's service for an Employer during the current year and the
immediately preceding year, (ii) any Employee who normally works less
than 17-1/2 hours per week for 50% or more of the total weeks worked
during such year (excluding weeks during which an Employee did not work
for an Employer), (iii) any Employee who normally works during not more
than six months during any year (an Employee who works on one day during
a month is deemed to have worked during that month), (iv) any Employee
who has not attained age 21 as of the end of the applicable year, and
(v) except to the extent provided in regulations
III-25
<PAGE> 43
issued under Section 414(q) of the Code by the appropriate governmental
authority, any Employee who is included in a unit of Employees covered
by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between Employee representatives and an Employer,
if at least 90 percent of the Employees of an Employer are covered under
one or more such collective bargaining agreements and the Plan does not
cover any Employee who is covered by any such collective bargaining
agreement.
(d) was at any time an officer (within the meaning of Section
416(i) of the Code) and received compensation greater than 50-percent
of the dollar amount in effect under Section 415(b)(1)(A) of the Code
for the calendar year in which the determination year or look-back year
begins.
With respect to the exclusions for Employees who normally work less than
17 1/2 hours per week or during not more than six months during any year (as
described in clauses (c)(ii) and (c)(iii), respectively, above), such exclusion
determinations may be made separately with respect to each Employee, or on the
basis of groups of Employees who fall within particular job categories as
established by an Employer on a reasonable and consistent basis. For purposes
of clause (c)(ii) above, an Employer may exclude Employees who are members of a
particular job category if (i) 80% of the positions within that job category
are filled by Employees who normally work less than 17 1/2 hours per week, or
(ii) the median number of hours of service credited to Employees in that job
category during a determination year or look-back year, as the case may be, is
less than or equal to 500. Any Employee who is a non-resident alien who
receives no earned income (within the meaning of Section 911(d)(2) of the Code)
from an Employer which constitutes income from sources within the United States
(within the meaning of Section 861(a)(3) of the Code) shall not be treated as
an Employee for the purpose of determining whether an Employee is a Highly
Compensated Employee or a Non-Highly Compensated Employee.
An Employee shall not be treated as described in Sections 3.5(a), (b) or
(c) for the determination year unless such Employee is also a member of the
group consisting of the 100 Employees paid the greatest compensation (described
below) during the determination year. For purposes of Section 3.5(d), without
regard to any exclusions applicable for purposes of determining the number of
Employees in the top-paid group of Employees, no more than 50 Employees (or, if
lesser, the greater of (i) three Employees who perform services during the
determination or look-back year or (ii) 10% of such Employees) shall be treated
as officers with respect to the determination year or the look-back year,
whichever may be applicable. Provided, however, that if for either such year
the number of officers of an Employer who satisfy the requirements of Section
3.5(d) (as limited by the first sentence of this paragraph) exceeds the 50-
Employee limitation of the immediately preceding sentence, then the officers
who receive the greatest compensation during the determination year or look-
back year will be considered includible officers; and, further provided, that
if for any such year, no officer of an Employer is described in Section 3.5(d),
the highest paid officer of an Employer for such year (without regard to the
amount of compensation paid to such officer in relation to the dollar limit of
III-26
<PAGE> 44
Section 415(c)(1)(A) of the Code for the year) shall be treated as described in
such Section 3.5(d) whether or not such Employee is also a Highly Compensated
Employee on any other basis. An individual who is a Highly Compensated
Employee for the determination year or the look-back year by reason of being
described in two or more of Sections 3.5(a), (b), (c), or (d) shall not be
disregarded in determining whether another individual is a Highly Compensated
Employee. The Committee shall prescribe reasonable and nondiscriminatory rules
which shall be uniformly and consistently applied for the purposes of (i)
rounding calculations incident to determining the number of Employees in the
top-paid group of Employees and (ii) breaking ties among two or more Employees
incident to identifying particular Employees who are in the top-paid group of
Employees, who are among the top-10 Highly Compensated Employees, or who are
among the 100 Employees paid the greatest compensation during the determination
year.
If, on any single day during any determination year or look-back year,
an Employee is a member of the family (described below) of another individual
who is (i) a 5-percent owner who is a current or former Employee or (ii) a
Highly Compensated Employee (including former Employees) in the group
consisting of the 10 Highly Compensated Employees paid the greatest
compensation during the determination year or the look-back year, then such
family member and 5-percent owner or top-10 Highly Compensated Employee shall
be considered to be a single Employee receiving an amount of compensation and a
Plan contribution that is based on the compensation and Plan contribution
attributable to such family member and the 5-percent owner or top-10 Highly
Compensated Employee. For purposes of the immediately preceding sentence,
family members of any Employee or former Employee include the Employee's or
former Employee's spouse and lineal ascendants or descendants and the spouses
of lineal ascendants and descendants. Family members are subject to the
aggregation rule described in the second preceding sentence whether or not (i)
they fall within the categories of Employees that may be excluded for purposes
of determining the number of Employees in the top-paid group consisting of the
top 20-percent of the Employees when ranked on the basis of compensation (as
such top-paid group is described in Section 3.5(c) above), or (ii) they are
Highly Compensated Employees when considered separately.
A former Employee who, with respect to an Employer, had a "separation
year" (described below) or a "deemed separation year" (described below) prior
to the determination year will be treated as a Highly Compensated Employee for
the determination year if such former Employee was (i) a Highly Compensated
Employee for such former Employee's separation year or deemed separation year,
or (ii) a Highly Compensated Employee for any determination year ending on or
after such former Employee attained age 55. For purposes of the immediately
preceding sentence, an Employee who performs no services for an Employer during
a determination year (including a leave of absence throughout the determination
year) is treated as a former Employee. A "separation year" is the
determination year during which the Employee separates from service with an
Employer; provided, however, an Employee who performs no services for an
Employer during a determination year will be treated as having separated from
service with an Employer in the year in which such Employee last performed
services for an Employer. An Employee who performs services for an Employer
during a determination year will incur a "deemed separation year" if, in any
determination year which
III-27
<PAGE> 45
ends prior to such Employee's attainment of age 55, the Employee receives
compensation in an amount less than 50% of the Employee's average annual
compensation for the three consecutive calendar years preceding such
determination year during which the Employee received the greatest amount of
compensation from an Employer; provided, however, an Employee will not be
treated as a Highly Compensated Employee (solely by reason of a deemed
separation in a deemed separation year) if, after such deemed separation and
before the year of the Employee's actual separation, such Employee's
compensation increased sufficiently to permit the Employee to be treated as
having a deemed resumption of employment with respect to a determination year,
as prescribed in regulations issued under Section 414(q) of the Code by the
appropriate governmental authority.
Former Employees are not counted for purposes of determining the top-
paid group consisting of the top 20-percent of the Employees when ranked on the
basis of compensation (as such top-paid group is described in Section 3.5(c)
above). Furthermore, with respect to the determination year, former Employees
are not included in (i) the group consisting of the 100 Employees paid the
greatest compensation, or (ii) the group of includible officers of an Employer,
as such groups are described in the second paragraph of this Section.
For purposes of this Section, "compensation" shall mean the wages (as
defined in Section 3401(a) of the Code for purposes of income tax withholding
at the source) that are paid (within the meaning of Section 1.415-2(d)(3) and
(4) of the income tax regulations) to the Employee by an Employer during the
Plan Year for services performed and reportable on the Employee's form W-2 (or
its successor), determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2) of the Code), but including elective or salary
reduction contributions to cafeteria plans under Section 125 of the Code, or to
cash or deferred arrangements under Sections 402(a)(8) and 402(h)(1)(B) of the
Code, or to tax-sheltered annuities under Section 403(b) of the Code. Only
compensation received by the Employee from an Employer, or deemed to be
received pursuant to the preceding sentence, shall be considered for purposes
of this Section; therefore, compensation shall not be annualized in order to
compute an Employee's compensation in the determination year or the look-back
year.
The rules of Section 414(b), (c), (m), (n) and (o) of the Code shall be
applied before the above provisions of this Section are applied. The rules
described in the immediately preceding sentence do not apply for purposes of
determining who is a 5-percent owner. Notwithstanding any provision hereof to
the contrary, the determination of who is a Highly Compensated Employee shall
be made in accordance with Section 414(q) of the Code and the regulations or
other authority issued thereunder by the appropriate governmental authority.
In the event that the Committee elects to have one or more of the
provisions of this paragraph apply for purposes of determining the status of an
Employee as a Highly Compensated Employee or a Non-Highly Compensated Employee,
the Committee shall adopt a resolution which shall specifically identify the
provision or provisions of this paragraph which shall apply and the effective
date of such application, and a certified copy of such resolution shall be
III-28
<PAGE> 46
attached to the Plan as an exhibit which shall be referenced to this Section
and shall be deemed to be an amendment of the Plan which is incorporated in and
made a part of this Section for all purposes of the Plan. Any provision of
this paragraph which becomes operative by virtue of application of the
preceding sentence shall override or supersede and control over any provision
or provisions of this Section which may be inconsistent with the operative
provision or provisions of this paragraph. Accordingly, to the extent elected
by the Committee in compliance with the requirements of the first sentence of
this paragraph, the following provision or provisions shall apply:
(x) To the extent permitted in regulations issued under
Section 414(q) of the Code by the appropriate governmental authority,
the look-back year calculation for a determination year shall be made on
the basis of the calendar year ending with or within the applicable
determination year (or, in the case of a determination year that is
shorter than twelve months, the calendar year ending with or within the
twelve month period ending with the end of the applicable determination
year); provided, however, the computation contemplated hereunder shall
apply only if the Committee elects, as described above, to apply the
same computation provisions to all plans, entities and arrangements of
an Employer which are required to apply the definition of Highly
Compensated Employee set forth in Section 414(q) of the Code.
(y) To the extent permitted in regulations issued under
Section 414(q) of the Code, Leased Employees covered under a qualified
money purchase pension plan maintained by a leasing organization and not
covered under a qualified retirement plan of an Employer (including the
Plan), shall be included for purposes of determining the group of Highly
Compensated Employees hereunder.
(z) To the extent permitted in regulations issued under
Section 414(q) of the Code, the special definition (described in such
regulations) for purposes of determining whether former Employees who
separated from service with an Employer prior to January 1, 1987 are
Highly Compensated Employees shall apply; provided, however, the special
definition contemplated hereunder shall apply only if the Committee
elects, as described above, to apply the special definition to all
plans, entities and arrangements of an Employer which are required to
apply the definition of Highly Compensated Employee set forth in Section
414(q) of the Code, and further, provided that such election to use such
special definition may not be changed by an Employer without the consent
of the Internal Revenue Service.
Subject to any governmental approval as may be required under applicable
regulations or other authority issued by the appropriate governmental
authority, any operative provision of this paragraph may be changed by
attaching a certified resolution of the Committee (which resolution shall be
attached to the Plan as an exhibit) which (i) shall identify the provision or
provisions
III-29
<PAGE> 47
of the paragraph that are to be changed and the effective date of such change,
(ii) shall be referenced to this Section, and (iii) shall be deemed to be an
amendment of the Plan which is incorporated in and made part of this Section
for all purposes of the Plan.
3.6 Composition of and Deadline for Payment of Employer
Contributions: Employer Contributions shall be paid to the Trust Fund in cash
or in kind (including shares of common stock of the Plan Sponsor).
Any Elective Contributions made pursuant to Compensation Deferral
Agreements for the Plan Year shall be paid to the Trust Fund (in installments
based on an Employer's pay period and in an amount equal to the amount by which
all Participants' Considered Compensation was reduced pursuant to Compensation
Deferral Agreements applicable to the pay period) not later than thirty (30)
days after the end of an Employer's pay period to which such Contributions are
attributable, while all other Contributions of an Employer for each Plan Year
shall be paid to the Trustee in one or more installments as the Committee may
from time to time determine; provided, however, the Contribution may be paid
not later than the time prescribed by law for filing an Employer's federal
income tax return (including extensions thereof) for such Employer's taxable
year ending with or within the Plan Year if (i) the Contribution is treated by
the Plan in the same manner that the Plan would treat a Contribution actually
received on the last day of such taxable year and (ii) either of the following
conditions are satisfied: (1) an Employer designates the Contribution in
writing to the Trustee as a payment on account of such taxable year, or (2) an
Employer claims such Contribution as a deduction on its federal income tax
return for such taxable year; and, further provided, that to the extent
required under regulations or other authority prescribed by the appropriate
governmental authority, any Contributions (other than Elective Contributions)
which are to be taken into account for purposes of determining the actual
deferral percentage or actual contribution percentage (defined in Section 3.4)
shall (in addition to the limitations thereon under the Plan with respect to
vesting and withdrawals) be paid to the Trust Fund not later than the last day
of the 12-month period that immediately follows the end of the Plan Year to
which such Contributions pertain. To the extent required under regulations or
other authority prescribed by the appropriate governmental authority, Matching
Contributions which are taken into account for the actual contribution
percentage (defined in Section 3.4) shall similarly be paid to the Trustee not
later than the last day of the 12-month period that immediately follows the end
of the Plan Year to which such Contributions pertain.
3.7 Return of Contributions for Mistake, Disqualification or
Disallowance of Deduction: The assets of the Trust Fund shall in no event be
paid to or revert to any Employer or be used for any purpose other than the
exclusive benefit of the Participants and their Beneficiaries and the
reasonable expenses of administering the Plan except that:
(a) If an Employer makes a Contribution by mistake of fact,
such mistaken Contribution shall revert and be repaid to an Employer
within one year after the payment of the Contribution;
III-30
<PAGE> 48
(b) An Employer's Contribution for each Plan Year is
conditioned on the Plan's initial qualification under Section 401 of the
Code and an Employer's Contribution shall revert and be repaid to an
Employer within one year after the date of denial of the initial
qualification of the Plan; and
(c) An Employer's Contribution is conditioned upon the
deductibility thereof under Section 404 of the Code and, to the extent
the deduction is disallowed, the Contribution shall revert and be repaid
to an Employer within one year after the disallowance of the deduction.
In any case hereinabove described in clauses (a), (b), or (c) of this
Section, an Employer shall, subject to the limitations set forth below, have
exclusive authority and absolute discretion to determine whether a
Contribution, or any part thereof, shall revert and be repaid to it or shall
instead remain a part of the Trust Fund. The amount which may be repaid to an
Employer under clauses (a) or (c) of this Section may not exceed the excess of
(i) the amount contributed over (ii) the amount that would have been
contributed had there not occurred a mistake of fact or a mistake in
determining the deduction. Earnings attributable to such excess contribution
shall not be repaid, and losses attributable thereto shall reduce the amount
which may be returned. If the repayment of the amount attributable to the
mistaken Contribution would cause the balance of any Participant's Account to
be reduced to less than the balance which would have been in the Account had
the mistaken amount not been contributed, then the amount which may be repaid
to an Employer shall be limited so as to avoid such reduction.
III-31
<PAGE> 49
ARTICLE IV
PARTICIPATION
4.1 Periodic Certification by Employer: As soon as practicable after
such Contribution is made, each Employer shall certify to the Committee the
amount of any Elective, Matching, Qualified Non-Elective, and/or Profit Sharing
Contribution that it made for the period then ended, the names of its
Participants entitled to share in each type of Contribution, the amount of each
of its Participant's Voluntary Contributions, if any, for such period, the
number of years of Active Service of its Participants, the amount of Considered
Compensation paid to each such Participant for such period, and the amount of
Considered Compensation paid to all its Participants for such period. Such
certification shall be conclusive evidence of such facts.
4.2 Allocation of Employer Contributions:
(a) Elective Contributions: As of the end of each month to
which Elective Contributions apply, Elective Contributions authorized by
the Participant for such month pursuant to a Compensation Deferral
Agreement (and permitted under applicable provisions of the Plan to be
made by an Employer on behalf of the Participant) shall be allocated to
the Participant's Employer Nonforfeitable Contributions Account.
(b) Matching Contributions: As of the last day of each
applicable month, Matching Contributions described in Section 3.4(b)
shall be credited to the Participant's Employer Contributions Account.
(c) Profit Sharing Contributions: As of the end of the Plan
Year to which any Profit Sharing Contribution applies, the Committee
shall allocate any Profit Sharing Contribution for the Plan Year to each
Participant who satisfies the requirements of Section 3.4(c) in the
proportion that the total Considered Compensation of each such
Participant for such Plan Year bears to the total Considered
Compensation for all such Participants for such Plan Year, and shall
credit each such Participant's proportionate share to the Participant's
Employer Nonforfeitable Contributions Account and/or Employer
Contributions Account, as specified in resolutions adopted by the Board
and communicated to Participants; provided, however, absent such
specification, the Committee shall credit each Participant's
proportionate share to the Participant's Employer Contributions Account.
(d) Qualified Non-Elective Contributions: As of the end of
the Plan Year to which any Qualified Non-Elective Contribution applies,
the Committee shall allocate any Qualified Non-Elective Contribution for
the Plan Year to each eligible Participant who satisfies the
requirements of Section 3.4(d) in the proportion that total Considered
Compensation of each such Participant for the Plan Year bears to total
Considered Compensation for all such Participants for such Plan Year,
and shall credit each such
IV-1
<PAGE> 50
Participant's proportionate share to the Participant's Employer
Nonforfeitable Contributions Account.
(e) Top-Heavy Minimum Contribution: Notwithstanding any other
provision of the Plan to the contrary, if the Plan is a Top-Heavy Plan
described in Article VII for the Plan Year, such portion of an
Employer's Contribution (made pursuant to applicable provisions of
Section 3.4(f)) shall be allocated among an Employer's Participants who
are in its employ at the end of the Plan Year (including Participants
who, except for Section 7.4(f) of the Plan, may not otherwise be
entitled to share in the allocation) as may be required to ensure that
each such Participant is credited with an amount which when added to any
other portion of an Employer Contribution allocated to his Account will
equal the minimum allocation required under Section 7.3(c) of the Plan.
Any such amount allocated hereunder shall be specially allocated
pursuant hereto and credited to the Participant's Employer Contributions
Account.
(f) Restoration of Forfeited Amounts: The Committee shall
allocate any Employer Contribution (made in accordance with applicable
provisions of Section 3.4(e) to restore an Account in accordance with
the requirements of Section 4.6) to the Account required to be restored
under applicable provisions of Section 4.6. The Committee shall
temporarily hold any Employer Contribution (made in accordance with
Section 3.4 to restore an Account in accordance with the requirements of
Section 6.7) in an unallocated distribution account until it can be paid
out in accordance with the provisions of Section 6.7. Distribution from
the unallocated distribution account to the appropriate person shall be
made as soon as practicable.
If a Participant has been Transferred during a pay period or the
Plan Year, such Participant shall be entitled to have allocated to his
Account a portion of an Employer Contribution made by each Employer by
whom such Participant was employed during such pay period or Plan Year,
and such Participant's share of each Employer's Contribution shall be
computed with respect to each such Employer in the manner hereinabove
provided.
4.3 Limitation on Additions to Account:
Capitalized terms used in this Section which are not otherwise defined
in Article I of the Plan are defined in Section 4.3(d).
(a) Participant Covered Solely in This Plan: This Section
4.3(a) applies only if the Participant does not participate in, and has
never participated in, another qualified plan, a welfare benefit fund,
as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, maintained by an
Employer, which provides an Annual Addition.
IV-2
<PAGE> 51
(i) If the Participant does not participate in, and has
never participated in another qualified plan, a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(l)(2) of the Code,
maintained by an Employer, the amount of Annual Additions which
may be credited to the Participant's Account as of any allocation
date for any Limitation Year will not exceed the lesser of (1)
the Maximum Permissible Amount or (2) any other limitation
contained in the Plan. If an Employer Contribution that would
otherwise be contributed or allocated to the Participant's
Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the amount contributed
or allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount.
(ii) Prior to the determination of the Participant's
actual compensation for a Limitation Year, an Employer may
determine the Maximum Permissible Amount on the basis of a
reasonable estimation of the Participant's annual Compensation
for such Limitation Year, uniformly determined for all
Participants similarly situated.
(iii) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for
such Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year.
(iv) Pursuant to Section 1.415-6(b)(6) of the income tax
regulations, if, as a result of the allocation of forfeitures, a
reasonable error in estimating a Participant's annual
compensation, a reasonable error in determining the amount of
elective deferrals (within the meaning of Section 3.2 of the Plan
and Section 402(g)(3) of the Code) that may be made with respect
to a Participant under the limits of Section 415 of the Code, or
any other facts and circumstances as the Internal Revenue Service
determines justify the availability of this Section 4.3(a)(iv),
there is an Excess Amount with respect to a Participant for a
Limitation Year, such Excess Amount shall be disposed of as
follows:
(1) First, if the Participant is in the service
of an Employer at the end of the Limitation Year, then
such Excess Amounts in the Participant's Account must not
be distributed to the Participant, but shall be
reallocated to a temporary suspense account and shall be
reapplied to reduce future Employer Contributions under
the Plan for such Participant in the next Limitation Year,
and for each succeeding Limitation Year, if necessary.
IV-3
<PAGE> 52
(2) If after application of Section
4.3(a)(iv)(1) an Excess Amount still exists, and the
Participant is not in the service of an Employer at the
end of the Limitation Year, then such Excess Amounts in
the Participant's Account must not be distributed to the
Participant, but shall be reallocated to a temporary
suspense account and shall be reapplied to reduce future
Employer Contributions for all remaining Participants in
the next Limitation Year and each succeeding Limitation
Year if necessary.
(3) If a temporary suspense account is in
existence at any time during the Limitation Year pursuant
to this Section, it will not participate in the allocation
of the Trust Fund's investment gains and losses. If a
temporary suspense account is in existence at any time
during a Limitation Year, all amounts in the suspense
account must be applied as set forth above before any
Employer or Employee Contributions may be made to the Plan
for that Limitation Year. Excess Amounts may not be
distributed to Participants.
If due to a reasonable error in determining the amount of
Elective Contributions that may be made within the limits of Section 415
of the Code, in accordance with Section 1.415-6(b)(6) of the income tax
regulations, the Plan shall first return any Employee Voluntary
Contributions (and distribute any earnings attributable thereto) to the
extent that the return reduces the Excess Amount, and if after such
return and distribution, an Excess Amount still exists, the Plan shall
next distribute Elective Contributions (and any earnings attributable
thereto) to the extent that such distribution reduces the Excess Amount.
Earnings shall be determined in the same manner as for remedying excess
Employer Contributions under Section 3.4(i) and excess Contributions
under Section 3.4(l), as applicable. Any such amounts returned or
distributed shall not be taken into account for purposes of computing
(i) the dollar limit on Elective Contributions under Section 3.2 of the
Plan and Section 402(g) of the Code, (ii) the ADP test under Section 3.4
of the Plan and Section 401(k)(3) of the Code, and (iii) the ACP test
under Section 3.4 of the Plan and Section 401(m)(2) of the Code.
(b) Participant Covered Under Defined Contribution Plan: This
Section 4.3(b) applies if, in addition to the Plan, the Participant is
covered under another qualified plan which is a defined contribution
plan, a welfare benefit fund, as defined in Section 419(e) of the Code,
or an individual medical account, as defined in Section 415(l)(2) of the
Code, maintained by an Employer during any Limitation Year, which
provides an Annual Addition during the Limitation Year.
(i) The Annual Additions which may be credited to a
Participant's Account under the Plan for any such Limitation Year
will not exceed the lesser of (1) the Maximum Permissible Amount
reduced by the
IV-4
<PAGE> 53
Annual Additions credited to a Participant's account under the
other plans, welfare benefit funds and individual medical
accounts for the same Limitation Year or (2) any other limitation
contained in the Plan. If the Annual Additions with respect to
the Participant under other defined contribution plans, welfare
benefit funds, and individual medical accounts, maintained by an
Employer are less than the Maximum Permissible Amount and an
Employer Contribution that would otherwise be contributed or
allocated to the Participant's Account under the Plan would cause
the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and funds for
the Limitation Year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under
such other defined contribution plans, welfare benefit funds, and
individual medical accounts, in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Account under the
Plan for the Limitation Year.
(ii) Prior to determining the Participant's actual
Compensation for the Limitation Year, an Employer may determine
the Maximum Permissible Amount in the manner described in Section
4.3(a)(ii).
(iii) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for
the Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year.
(iv) Pursuant to Section 1.415-6(b)(6) of the income tax
regulations, if, as a result of the allocation of forfeitures, a
reasonable error in estimating a Participant's annual
compensation, a reasonable error in determining the amount of
elective deferrals (within the meaning of Section 3.2 of the Plan
and Section 402(g)(3) of the Code) that may be made with respect
to a Participant under the limits of Section 415 of the Code, or
any other facts and circumstances as the Internal Revenue Service
determines justify the availability of this Section 4.3(b)(iv), a
Participant's Annual Additions under the Plan and all such other
plans result in an Excess Amount, such Excess Amount shall be
deemed to consist of the Annual Additions last allocated, except
that Annual Additions attributable to a welfare benefit fund will
be deemed to have been allocated first regardless of the actual
allocation date.
(v) If an Excess Amount was allocated to a
Participant's Account on an allocation date of the Plan which
coincides with an
IV-5
<PAGE> 54
allocation date of another plan, the Excess Amount attributed to
the Plan will be the product of,
(1) the total Excess Amount allocated as of such
date, multiplied by
(2) the ratio of (A) the Annual Additions
allocated to the Participant's Account for the Limitation
Year as of such date under the Plan, divided by (B) the
total Annual Additions allocated to the Participant's
Account for the Limitation Year as of such date under the
Plan and all qualified defined contribution plans.
(vi) Any Excess Amounts attributed to the Plan shall be
disposed of as provided in Section 4.3(a)(iv).
If due to a reasonable error in determining the amount of
Elective Contributions that may be made within the limits of Section 415
of the Code, in accordance with Section 1.415-6(b)(6) of the income tax
regulations, the Plan shall distribute Elective Contributions to the
extent that such distribution reduces the Excess Amount. Any such
amounts distributed shall not be taken into account for purposes of
computing (i) the dollar limit on Elective Contributions under Section
3.2 of the Plan and Section 402(g) of the Code, (ii) the ADP test under
Section 3.4 of the Plan and Section 401(k)(3) of the Code, and (iii) the
ACP test under Section 3.4 of the Plan and Section 401(m)(2) of the
Code.
(c) Participant Covered Under Defined Benefit Plan: If an
Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant of the Plan, the sum of the
Participant's Defined Benefit Fraction and Defined Contribution Fraction
will not exceed 1.0. For purposes of this Section 4.3, all defined
contribution plans of an Employer are to be treated as one defined
contribution plan and all defined benefit plans of an Employer are to be
treated as one defined benefit plan, whether or not such plans have been
terminated. If the sum of the Defined Contribution Fraction and Defined
Benefit Plan Fraction exceeds 1.0, the rate of accrual of the annual
benefit of the defined benefit plan(s) will be reduced so that the sum
of the fractions will not exceed 1.0. In no event will the annual
benefit be decreased below the amount of the accrued benefit to date.
If additional reductions are required for the sum of the fractions to
equal 1.0, the reductions will then be made to the Annual Additions of
the defined contribution plans. If the defined benefit plan does not
contain provisions which correspond to this provision, the Annual
Addition to the defined contribution plans for the Limitation Year will
be reduced so that the sum of the fractions will not exceed 1.0.
(d) Definitions: For purposes of this Section 4.3, the
following terms shall be defined as follows:
IV-6
<PAGE> 55
(i) Annual Addition -- With respect to any Participant
an Annual Addition shall be the sum, for the Limitation Year, of
(1) all Employer Contributions allocated to his Account; (2) all
forfeitures allocated to his Account; and (3) the amount of any
nondeductible after-tax Participant Voluntary Contributions
allocated to his Account. Moreover, any Excess Amounts applied
under Section 4.3(a)(iv) or 4.3(b)(vi) during the Limitation Year
to reduce Employer Contributions shall be considered to be Annual
Additions for such Limitation Year. Subject to the correction
rules of Section 4.3(a)(iv), Contributions do not fail to be
Annual Additions merely because they are excess deferrals
(described in Section 3.2(c) of the Plan), excess contributions
above the ADP limits (described in Section 3.4(h) of the Plan),
or excess aggregate contributions above the ACP limits (described
in Section 3.4(j) of the Plan); provided, however, excess
deferrals which are timely distributed by April 15 following the
year of deferral to the applicable Participant pursuant to
Section 3.2(d) of the Plan are not Annual Additions.
Amounts allocated to an individual medical account, as
defined in Section 415(1) of the Code, which is part of a defined
benefit plan maintained by an Employer, are treated as Annual
Additions to a defined contribution plan. Also, amounts derived
from contributions paid or accrued which are attributable to
postretirement medical benefits allocated to the separate account
of a key employee, as defined in Section 419A(d)(3) of the Code,
under a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by an Employer, are treated as Annual Additions
to a defined contribution plan.
(ii) Compensation -- For each Limitation Year, a
Participant's wages (as defined in Section 3401(a) of the Code
for purposes of income tax withholding at the source) that are
paid (within the meaning of Section 1.415-2(d)(3) and (4) of the
income tax regulations) to the Participant by an Employer during
the Limitation Year for services performed and reportable on the
Participant's form W-2 (or its successor), but determined without
regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in
Section 3401(a)(2) of the Code).
(iii) Defined Benefit Fraction -- A fraction, the
numerator of which is the sum of the Participant's Projected
Annual Benefits under all the defined benefit plans (whether or
not terminated) maintained by an Employer and, subject to
application of Section 416(h) of the Code and Article VII of the
Plan relating to Top-Heavy Plans, the denominator of which is the
lesser of 125 percent of the dollar limitation in effect for the
IV-7
<PAGE> 56
Limitation Year under Section 415(b)(1)(A) and Section 415(d) of
the Code or 140 percent of the Highest Average Compensation,
including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit
plans maintained by an Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which
the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the Plan after May 5,
1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code and regulations or other
authority issued thereunder by the appropriate governmental
authority for all Limitation Years beginning before January 1,
1987.
(iv) Defined Contribution Fraction -- A fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans
(whether or not terminated) maintained by an Employer for the
current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible
employee contributions to all defined benefit plans, whether or
not terminated, maintained by an Employer, and the Annual
Additions to all welfare benefit funds as defined in Section
419(e) of the Code, and individual medical accounts, as defined
in Section 415(l)(2) of the Code, maintained by an Employer), and
the denominator of which is the sum of the Maximum Aggregate
Amounts for the current and all prior Limitation Years of service
with an Employer (regardless of whether a defined contribution
plan was maintained by an Employer). Subject to application of
Section 416(h) of the Code and Article VII of the Plan relating
to Top-Heavy Plans, the Maximum Aggregate Amount in any
Limitation Year is the lesser of 125 percent of the dollar
limitation in effect under Section 415(c)(1)(A) of the Code or 35
percent of the Participant's Compensation for such year.
(v) Employer -- An Employer that adopts the Plan. In
the case of a group of Employers which constitutes a controlled
group of corporations (as defined in Section 414(b) of the Code
as modified by Section 415(h) of the Code) or which constitutes
trades or businesses (whether or not incorporated) which are
under common control (as defined in Section 414(c) as modified by
Section 415(h) of the Code) or all members of an affiliated
service group (as defined in Section 414(m) of
IV-8
<PAGE> 57
the Code) or any other entity required to be aggregated with an
Employer pursuant to regulations under Section 414(o) of the
Code, all such Employers shall be considered a single Employer
for purposes of applying the limitations of this Section 4.3.
(vi) Excess Amount -- The excess of the Annual Additions
credited to the Participant's Account for the Limitation Year
over the Maximum Permissible Amount.
(vii) Highest Average Compensation -- The average
compensation for the three consecutive years of service with an
Employer that produces the highest average. A year of service
with an Employer is the 12-consecutive-month period which
corresponds with the Limitation Year.
(viii) Limitation Year -- The 12-consecutive-month period
which begins on the first day of the Plan Year and anniversaries
thereof. All qualified plans maintained by an Employer must use
the same Limitation Year. If the Limitation Year is amended to a
different 12-consecutive-month period, the new Limitation Year
must begin on a date within the Limitation Year in which the
amendment is made.
(ix) Maximum Permissible Amount -- The Maximum
Permissible Amount with respect to any Participant shall be the
lesser of (1) $30,000 (or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Section 415(b)(1) of the
Code as in effect for the Limitation Year) or (2) except as
otherwise provided below, 25 percent of his actual Compensation
for the Limitation Year. Effective on January 1 of the calendar
year prescribed in Section 415(d) of the Code and each January 1
thereafter, the $30,000 limitation above will be automatically
adjusted to the new dollar limitation determined by the
Commissioner of Internal Revenue for that calendar year in
accordance with applicable provisions of Sections 415(b), 415(c)
and 415(d) of the Code. The new limitation will apply to
Limitation Years ending within the calendar year of the date of
the adjustment. The 25 percent of actual Compensation limitation
referred to above shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or Section
419A(f)(2) of the Code) after separation from service which is
otherwise treated as an Annual Addition, or to any other amount
otherwise treated as an Annual Addition under Section 415(1)(1)
or Section 419A(d)(2) of the Code.
If a short Limitation Year is created because of an
amendment changing the limitation to a different 12-consecutive-
month period, the
IV-9
<PAGE> 58
Maximum Permissible Amount shall not exceed the defined
contribution dollar limitation for the short Limitation Year
determined as follows: the dollar limitation in effect for the
calendar year in which the short Limitation Year ends will be
multiplied by a fraction, the numerator of which is the number of
months in the short Limitation Year, and the denominator of which
is 12.
(x) Projected Annual Benefit -- A Participant's annual
retirement benefit (adjusted to the actuarial equivalent of a
straight life annuity if expressed in a form other than a
straight life or qualified joint and survivor annuity) to which
the Participant would be entitled under the respective plan,
assuming that the Participant will continue employment until the
later of current age or normal retirement age under the
respective plan, and that the participant's compensation for the
current Limitation Year and all other relevant factors used to
determine benefits under the respective plan will remain constant
for all future Limitation Years.
4.4 Periodic Valuation of Trust Fund: Subject to Sections 4.5 and
4.10, as of the last day of each Plan Year (or such other date or dates as may
be prescribed by the Committee), the Trustee shall determine the amount of
income earned or loss incurred by the Trust Fund during the period since the
last Valuation Date, taking into account estimated expenses, and shall provide
such information to the Committee. The Committee shall then allocate the
income or loss among the Participants based upon the daily compound interest
earned or lost by each Participant's Account during the period. Additionally,
as of the end of the Plan Year, the Trustee shall revalue the Trust Fund at
fair market value, determining appreciation or depreciation, if any, and shall
determine the exact income or loss of the Trust Fund, taking into account any
understatement or overstatement of income because the estimated investment fees
and other expenses differed from the actual expenses for the Plan Year. The
Trustee then shall provide such information to the Committee. The Committee
shall then allocate all such appreciation or depreciation and all such
understatement or overstatement of income or loss among the Participants in the
same ratio that the income or loss was allocated to each Participant's Account
during the Plan Year as compared to the income allocated to all Participants'
Accounts during the Plan Year who are Participants of the Plan on the last day
of the Plan Year, crediting each such Participant's individual accounts and
subaccounts with their proportionate share based upon the income or loss
allocated to such accounts for the Plan Year, as compared to the income or loss
allocated to the whole of the Participant's Account for that Plan Year.
Prior to the allocations described in this Section and subject to
Section 4.10, Account balances shall be reduced as appropriate by forfeitures,
withdrawals, payments or distributions, or other amounts properly chargeable to
Participants' Accounts under the Plan during the applicable accounting period.
Notwithstanding the above, solely for purposes of the allocations made under
this Section pursuant to nondiscriminatory rules which may be established by
the Committee, any Rollover Contributions allocated and credited on or after
the first day of the
IV-10
<PAGE> 59
applicable accounting period to the Participant's Rollover Account, if any,
and/or any Contributions allocated and credited on or after the first day of
the applicable accounting period to the Participant's Employee Account, if any,
and/or Employer Account, if any, shall be taken into account to ensure that
such amounts transferred or contributed to the Plan share in the allocations
hereunder with respect to such accounting period; provided, however, the
Committee shall not be required to establish any such rules pursuant hereto.
4.5 Daily Valuation of Trust Fund: To the extent that the Plan
invests in assets that are subject to daily valuation, the following provisions
shall apply. For purposes of valuation of the Trust Fund and distribution of
the accrued vested benefit of each Participant, the term "Valuation Date" shall
mean the date upon which a Participant's Account may be valued for purposes of
investment direction and accrued vested benefit distribution. Each business
day of the Plan Year shall be considered as a Valuation Date. The Trustee
shall, following the end of each business day, value all assets of the Trust
Fund as of that business day in the following manner:
(a) The Trustee shall first compute the fair market value of
the securities and/or the other assets in each investment fund, designated by
the Committee for direction of investment by the Participants of this Plan.
This market value shall be equal to the market price of the fund on the prior
business day applied to the balance of the fund as of the close of business on
the current business day.
(b) The Trustee shall, following the computation of the fair
market value, compute each Participant's share of the fund and assign a gain or
loss to each Participant's account.
(c) The Trustee shall then account for any requests for
additions or withdrawals made to or from a specific designated investment fund
by any Participant, including allocations of Employer contributions and
forfeitures made as of the date of such allocations and received by the Trustee
prior to the stated deadline on such business day.
In completing the valuation procedure described above, such adjustments
in the amounts credited to such accounts shall be deemed to have been made on
the business day to which the investment activity relates. No Employer profit
sharing contribution or Employer deferred pay contribution made by an Employer
pursuant to this Plan shall be taken into account until the allocation date
coinciding with or next following the date such contribution was both actually
paid to the Trustee by an Employer and allocated among the accounts of
Participants. It is intended that this Section operate to allocate among each
Participant Account in the Trust Fund, all income of the Trust Fund and changes
in the value of the Trust Fund's assets.
4.6 Forfeitures and Allocation Thereof:
(a) General Rule: In the event that a Participant terminates
employment with any Employer and all Affiliated Employers, his vested
interest in his Account will be
IV-11
<PAGE> 60
paid (or deemed to be paid in the case of a nonvested Participant, as
described below) in accordance with this Section and Section 6.6, and
any nonvested amount shall be forfeited at such time as is provided
under subsequent provisions of this Section. Not later than the last
day of the Plan Year in which such distribution (or deemed distribution)
occurred, such forfeiture shall be applied first to reinstate any
Account required to be reinstated during the Plan Year under the
subsequent provisions of this Section, and any remaining forfeitures
shall then be applied to reduce any subsequent Contributions of the
Employer that contributed with respect to the amounts forfeited.
Notwithstanding any other provisions of the Plan to the contrary, any
nonvested amounts that were held under the Plan (as in effect
immediately prior to the Plan Year that commenced on January 1, 1994),
in accounts maintained for Participants who had incurred at least five
(5) consecutive one year periods of severance on or before December 31,
1993, shall be deemed to have been forfeited during the first Plan Year
that commenced immediately after December 31, 1993 and shall be applied
as herein provided.
(b) Actual and Deemed Cash-outs of Nonvested or Partially
Vested Accounts Within Two Plan Years After the Participant's
Termination of Employment; Reinstatement of Such Accounts: With respect
to any Participant (i) who terminates employment with any Employer and
all Affiliated Employers, (ii) who has a zero percent (0%) vested
interest in his Employer Contributions Account or (iii) who has a vested
interest in his Employer Contributions Account that is greater than zero
percent (0%), but is less than one hundred percent (100%) and (iv) who,
pursuant to Section 6.6, receives a distribution (including a direct
rollover pursuant to Section 6.6(b) of all or part of the amount
distributable) of the full amount of his entire vested interest in his
Employer Account in the form of a lump sum distribution by the close of
the second Plan Year following the Plan Year in which his employment
terminated (or is deemed under this Section and Section 6.6 to have
received such distribution of zero dollars on the date his employment
terminated in the case of a nonvested terminated Participant described
in clause (ii) above), which distribution (i) includes the full amount
of his entire vested interest in his Employer Account as a result of his
termination of participation in the Plan, and (ii) is $3,500 or less, or
is more than $3,500 but is consented to, then, the nonvested,
forfeitable amount credited to his Employer Contributions Account (as of
the Valuation Date with respect to which the amount of the distribution
is determined) shall become a forfeiture as of the distribution date (or
as of the date his employment terminated if no amount is payable from
Employer Contributions made to the Plan on his behalf, but such
Participant is deemed under this Section and Section 6.6 to have
received a distribution of zero dollars on the date his employment
terminated). Provided, however, in the event that a partially vested
terminated Participant (described in clause (iii) of the first sentence
of this Section 4.6(b)) who received a distribution described in the
immediately preceding sentence resumes employment covered under the
Plan, his Employer Account shall be restored pursuant to Section 4.6(c)
if he repays to the Trustee the full amount of such distribution
attributable to Employer Contributions prior to the earlier of (i) the
date on which the Participant incurs a period of five (5) consecutive
one
IV-12
<PAGE> 61
year periods of severance, or (ii) five (5) years after the first date
that he is subsequently re-employed by the Employer. If a terminated
Participant with no amount payable from Employer Contributions made to
the Plan on his behalf had a zero percent (0%) vested interest in his
Employer Contributions Account at the time of his termination of
employment and thus is deemed under this Section and Section 6.6 to have
received a distribution of a vested interest in his Employer
Contributions Account equal to zero dollars (thus actually receiving no
distribution from his Employer Contributions Account as a result of his
termination of employment), his Employer Contributions Account will be
restored if he resumes employment covered under the Plan prior to
incurring a period of five (5) consecutive one year periods of
severance. Such reemployed Participant shall be deemed to have repaid a
distribution of zero dollars on the date of his reemployment with the
Employer.
(c) Amount and Timing of Restoration of Accounts: With
respect to Employer Accounts which are entitled to be restored as a
result of compliance with all of the requirements of Section 4.6(b), the
amount to be restored under the provisions of this Section 4.6(c) shall
be the amount credited to the Participant's Employer Account, both the
vested and the nonvested portions, immediately prior to the rehired
Participant's distribution (or deemed distribution), unadjusted by any
subsequent gains or losses. Such restoration shall be made as soon as
administratively practicable after the later of the date the Participant
resumes employment covered under the Plan or the date on which any
required repayment is completed and shall be effective as of the end of
the Plan Year (or other period designated by the Committee) coincident
with or next following the occurrence of the event which gives rise to
the restoration of the Participant's Employer Account.
Except as otherwise provided above, a Participant's Employer
Account shall not be restored upon resumption of employment covered
under the Plan. Any portion of the Trust Fund attributable to Active
Service prior to resumption of employment by a Participant whose
Employer Account has not been restored shall be held and distributed in
accordance with applicable provisions of the Plan and elections made
thereunder. Separate accounts may be established and maintained for
Contributions allocable to such a Participant after his resumption of
employment covered under the Plan.
(d) Cash-outs of Fully Vested Accounts Within Two Plan Years
After the Participant's Termination of Employment; Non-Reinstatement of
Such Accounts: With respect to any Participant (i) who terminates
employment with any Employer and all Affiliated Employers, (ii) who has
a vested interest in his Employer Contributions Account equal to 100%
and (iii) who received a distribution from his Employer Account in the
form of a lump sum distribution by the close of the second Plan Year
following the Plan Year in which his employment terminated, which
distribution (i) includes the full amount of his entire vested interest
in his Employer Account as a result of his termination of participation
in the Plan, and (ii) is $3,500 or less, or is more than $3,500 but is
consented to, shall not be permitted to repay to the Trustee the full
amount of such
IV-13
<PAGE> 62
distribution attributable to Employer Contributions in order to restore
his Employer Account.
(e) Distributions Made or Commenced More Than Two Plan Years
After the Participant's Termination of Employment: With respect to a
Participant (i) who terminates employment with any Employer and all
Affiliated Employers with greater than a zero percent (0%), but less
than a one hundred percent (100%), vested interest in his Employer
Contributions Account and (ii) who received or commenced to receive
payments of a termination distribution from his Employer Account after
the close of the second Plan Year following the Plan Year in which his
employment terminated, any amount remaining in his Employer
Contributions Account shall continue to be maintained as a separate
account. At any relevant time, such Participant's nonforfeitable
portion of his separate account shall be determined in accordance with
the following formula:
X = P (AB + D) - D
For purposes of applying the formula: X is the nonforfeitable portion
of such separate account at the relevant time; P is the Participant's
vested interest in his Employer Contributions Account at the relevant
time; AB is the balance of such separate account at the relevant time;
and D is the amount of the distribution. For all other purposes of the
Plan, a Participant's separate account shall be treated as an Employer
Contributions Account. The forfeitable portion of a terminated
Participant's separate Employer Contributions Account that is subject to
such formula shall be forfeited on the date on which such Participant
incurs a period of five (5) consecutive one year periods of severance.
(f) Deferred Distributions of Partially Vested Accounts: With
respect to a Participant (i) who terminates employment with any Employer
and all Affiliated Employers with greater than a zero percent (0%), but
less than a one hundred percent (100%), vested interest in his Employer
Contributions Account and (ii) who is not otherwise subject to the
forfeiture provisions of Sections 4.6(b) or (e) above, the forfeitable
portion of such terminated Participant's Employer Contributions Account
shall be forfeited on the date on which such Participant incurs a period
of five (5) consecutive one year periods of severance.
4.7 Effective Date of Allocations and Adjustments: The Committee
will credit to each eligible Participant's Account the Participant's portion of
an Employer Contributions referred to in Section 4.2 so that all Employer
Contributions will become effective and will be credited to each Participant's
Account as of the end of the Plan Year (or such shorter accounting period as
may be prescribed in Sections 4.2, 4.5, or by the Committee) for which they are
attributable.
In addition, any amounts contributed to any Participant's Employee
Account, shall be credited as of the last day of the month in which the
Employee Voluntary Contribution was
IV-14
<PAGE> 63
made. Furthermore, any amount contributed to any Participant's Rollover
Account shall be credited to the appropriate Account as of the end of the Plan
Year (or such shorter accounting period as may be prescribed by the Committee)
to which they are attributable.
The Committee shall credit to each Participant's Account such
Participant's portion of the (i) income or loss incurred by the Trust Fund as
referred to in Section 4.4, and (ii) appreciation or depreciation of the Trust
Fund and any understatement or overstatement referred to in Section 4.4, as of
the end of the Plan Year (or such shorter accounting period as may be
prescribed by the Committee) for which they are attributable.
In the event that interim adjustments and allocations are required by
Section 4.5, they will become effective and will be entered in each
Participant's Account as of the end of the applicable accounting period next
preceding the event requiring the interim adjustment and, additionally,
allocation and distribution of benefits during the applicable accounting period
in which the interim adjustment or allocation is made shall take into account
the interim adjustments and allocations.
4.8 Accounting for Transferred Participant: In the case of a
Participant who is Transferred during a Plan Year, the Committee, as of the
date the Participant is Transferred, shall transfer on their books such
Participant's Account (including that portion of the Trust Fund allocated
thereto) so that such Participant's Account will always be reflected on the
Committee's books as being attributable to an Employer with whom such
Participant is currently employed.
4.9 No Vesting Unless Otherwise Prescribed: No allocations,
adjustments, credits or transfers shall ever vest in any Participant any right,
title or interest in the Trust Fund except at the times and upon the terms and
conditions herein set forth. The Trust Fund shall be, as to all Participant's
Accounts, a commingled fund.
4.10 Investment Elections with Respect to Commingled Funds:
(a) Investment Funds Established: The assets of the Plan
shall be invested in one or more categories of assets (which conform to
any portfolio standards and guidelines established by the Trustee),
including common stock issued by the Plan Sponsor, as may be determined
from time to time in the discretion of the Committee and announced and
made available on an equal basis to all Participants subject to the
provisions of this Section 4.10. When the Trustee or any agent thereof
(i) receives funds to be invested or determines that assets from those
funds, if applicable, should be sold and the proceeds held for a period
of time pending reinvestment or other purpose, or (ii) has notice that
required or appropriate filings with the Securities and Exchange
Commission have not been timely accepted as filed and funds received
have been designated to be invested in shares of common stock issued by
the Plan Sponsor, then, prior to completion of required or appropriate
filings with the Securities and Exchange Commission, such funds may be
held in cash or invested in short-term investments such as U.S. Treasury
bills, commercial paper, demand notes, money market funds, any savings
accounts, money
IV-15
<PAGE> 64
market accounts, certificates of deposit or like investments with the
commercial department of any bank, including any bank serving as
Trustee, as long as they bear a reasonable rate of interest and the bank
is supervised by the United States or a state, any common, pooled or
collective or group trust funds, mutual funds or insurance contracts,
any of which any bank, including any bank serving as Trustee or any of
its affiliates, or any other corporation may now have or in the future
may adopt for such short-term investments (the governing document of
such common, pooled or collective trust fund(s) being hereby
incorporated herein by reference), and other similar assets which may be
offered by the federal government, or any national or state bank
(whether or not serving as Trustee hereunder), and as may be determined
by the Trustee, in its discretion, which assets will remain a part of
the fund to which they would otherwise relate.
(b) Election Procedures Established: If Participants are
given the right to designate the funds in which their Accounts are
invested pursuant to Section 4.10(a), on such form as shall be
prescribed by the Committee, each Participant shall designate the
percentage of his Account (as such Account presently exists and the
percentage of future contributions, if any, to be allocated to such
Account) to be invested in any one or more funds, as such funds may be
established from time to time as set forth in Section 4.10(a). At such
times as shall be prescribed by the Committee in its discretion, the
percentage elected to be placed in any one fund may be changed by the
Participant, which change will be effective after such period of time as
shall be established by the Committee. The Committee shall determine
whether any such change as to investments will change the Participant's
Account as it presently exists or whether it will be only effective as
to succeeding investments of Contributions; however, any such change,
when made, shall continue to be effective for all succeeding investments
of Contributions until revoked or changed in a like manner. The rules
established and the discretion exercised by the Committee hereunder
shall apply to all Participants on a nondiscriminatory basis. The rules
and procedures that are prescribed by the Committee as described herein
may include Telephone Procedures, and in such case the Trustee shall be
authorized to accept elections made by Participants pursuant to such
Telephone Procedures.
(c) Investment in Employer Securities: Notwithstanding
anything to the contrary herein, except as otherwise may be determined
by the Committee in its sole discretion, no investment shall be made by
the Trustee in any securities other than those permitted under
applicable provisions of The Securities Act of the State of Texas, as
amended from time to time, and so long as the transactions contemplated
by this Plan remain otherwise exempt from The Securities Act of the
State of Texas and the Trustee is not required to register the Plan as a
security under applicable provision of such act. In addition, except as
otherwise may be determined by the Committee in its sole discretion,
unless the Plan would not have to be registered under the federal
Securities Act of 1933, no amount in excess of an Employer's
Contribution (other than Elective Contributions) shall be allocated to
the purchase of securities issued by an Employer or any company directly
or indirectly controlling, controlled by or under common control with an
Employer. Any such determination by the Committee shall be evidenced by
IV-16
<PAGE> 65
formal minutes reflecting such action of the Committee or by a unanimous
written consent of the members of the Committee and shall be
appropriately communicated to the affected Participants, and must be
pre-approved by the Board or ratified by the Board at the next regularly
scheduled meeting of the Board.
In the event that common stock of the Plan Sponsor ("Company
Stock") is authorized by the Committee for investment through a fund
("Company Stock Fund") under which shares of Company Stock are allocated
to the Accounts of Participants and Beneficiaries, who pursuant to the
Plan, direct the Trustee to invest in the Company Stock Fund, Section
9.4 and 9.5 shall govern the rights of the affected Participants and
Beneficiaries with respect to voting and tendering shares of Company
Stock allocated to their Accounts.
Notwithstanding anything to the contrary herein, in order to
assure compliance with rules promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), the Committee may, in its sole
discretion, impose additional restrictions on investment in the Company
Stock Fund by any Participant who at any time during any given Plan Year
is subject to the provisions of Section 16 of the Exchange Act. Such
restrictions may include, without limitation, an unqualified prohibition
on investment in the Company Stock Fund by any Participant described in
the immediately preceding sentence. Any such decision by the Committee
shall be evidenced by formal minutes reflecting such action of the
Committee or by a unanimous written consent of the members of the
Committee and shall be appropriately communicated to affected
Participants, and must be pre-approved by the Board or ratified by the
Board at the next regularly scheduled meeting of the Board.
(d) Allocations Attributable to Directed Investments in
Commingled Funds: If Participants are given the right to designate the
funds in which their Accounts are invested pursuant to Section 4.10(a),
each valuation and determination of income or loss and appreciation or
depreciation provided for hereunder shall reflect the value of the
different categories of assets separately. The Committee shall allocate
appreciation, depreciation, income, and loss attributable to each such
category of assets among the Participants' various Accounts (each type
of Account being considered separately) in the ratio that the amount in
each Account which was invested in a particular category as of the first
day of the applicable accounting period bears to the amount in all
Accounts which was invested in such category as of the first day of such
applicable accounting period.
(e) Valuation Dates: Pursuant to nondiscriminatory rules
established by the Committee and uniformly applied to similarly situated
Participants, separate valuation dates may be established (with respect
to one Participant's Account which may not apply to another Account) as
necessary or appropriate to facilitate measurement of investment
performance, changes in investments or distribution of Accounts of
Participants who
IV-17
<PAGE> 66
direct (or are deemed to direct) investment thereof pursuant to the
provisions of this Section 4.10.
(f) Section 404(c) of the Act: Except as may otherwise be
prescribed by the Committee, categories of assets, election procedures
and other rules relating to investment elections under this Section
shall comply with the requirements of Section 404(c) of the Act.
IV-18
<PAGE> 67
ARTICLE V
RETIREMENT
5.1 Early Retirement: A Participant may retire on the first day of
any month coincident with or next following the date on which he has attained
age fifty-five (55) years or older and completed ten (10) years of Active
Service for vesting purposes.
5.2 Normal Retirement: A Participant may retire on the first day of
the month coincident with or immediately following his attainment of normal
retirement age. A Participant's normal retirement age shall be his sixty-fifth
(65th) birthday, from which time he shall henceforth be one hundred percent
(100%) vested in his Account.
5.3 Late Retirement: A Participant may continue his employment after
he attains normal retirement age (subject to satisfactory performance of his
assigned duties); provided, that he shall have the right to retire on any
subsequent date.
5.4 Rights of Participants and Prohibition of Unauthorized
Distribution: Until a Participant retires or otherwise terminates service he
shall be accorded all rights as a Participant under the Plan, but, subject to
Section 6.6, he shall receive no distribution until he actually retires or
otherwise becomes entitled to a distribution under the provisions of Article
VI.
V-1
<PAGE> 68
ARTICLE VI
DISTRIBUTION OF BENEFITS
Distributions under the Trust Fund shall be made to Participants,
spouses, Beneficiaries, executors or administrators, as the case may be, only
upon the following conditions and in the manner specified.
6.1 Death Benefit: On the death of a Participant or a Retired
Participant prior to complete distribution of such Participant's or Retired
Participant's Account, his death benefit shall be (i) 100% of the amount
credited to his Account as of the end of the applicable accounting period
coincident with or next preceding the date of the Participant's death, (ii) an
amount equal to any (a) Rollover Contributions, and (b) Elective Contributions
recharacterized as Employee Voluntary Contributions, (iii) an amount equal to
any Employee Voluntary Contributions or Employer Contributions made by, or on
behalf of, such Participant after the end of such accounting period, and, if
applicable, (iv) to the extent that the Participant's Account has any
undistributed balance which has not been paid as of the end of the applicable
accounting period (for which the last valuation was made), that portion of the
periodic adjustments and allocations required by Article IV to be credited to
the Participant's Account as of the end of the applicable accounting period
next preceding or coincident with payment of the benefits payable. In
accordance with Section 6.10, the death benefit described in the immediately
preceding sentence shall be reduced by any security interest held by the Plan
by reason of any outstanding loan to the Participant.
The death benefit shall be paid to the Participant's surviving spouse,
or if there is no surviving spouse or the surviving spouse consents in the
manner described below, to such Participant's designated Beneficiary (other
than such surviving spouse). At any time, subject to the following provisions
of this Section, each Participant shall have the right to designate any
Beneficiary or Beneficiaries to receive his death benefit and shall have the
unrestricted right to revoke any such designation; provided, however, subject
to the subsequent provisions hereof which permit the spouse to consent to the
Participant's waiver of the requirements of this sentence, any new designation
of a Beneficiary (other than the Participant's spouse) by a Participant who is
lawfully married (or deemed to be married under applicable local law) shall
require a new spousal consent. Provided further that (i) any waiver by any
married Participant (with spousal consent as required hereunder) of the spousal
death benefit otherwise payable hereunder is not required to specify any
optional form of benefit payment, (ii) any such married Participant may change
any optional form of spousal death benefit payment available under the Plan
without obtaining spousal consent, and (iii) a Beneficiary may elect any
optional form of payment available under the Plan to the extent permitted under
applicable provisions of the Plan. Each such designation or revocation by a
Participant shall be evidenced by a written instrument which shall be (i)
limited to a benefit for at least one specific Beneficiary (including nonspouse
Beneficiary, or any class of Beneficiaries or any contingent Beneficiaries),
(ii) filed with the Committee, (iii) signed by the Participant, and (iv) bear
the signature of at least two persons (at
VI-1
<PAGE> 69
least one of which shall be a representative designated by the Committee or a
Notary Public) as witnesses to his signature.
With respect to any Participant who is lawfully married (or deemed to be
married under applicable local law), any such Participant's designation of a
Beneficiary (other than the Participant's spouse) to receive any portion of
such death benefit shall be deemed to be ineffective, unless the Participant's
spouse consents to such designation and acknowledges the effect of such
election, which consent and acknowledgement shall be evidenced by a written
instrument which shall be (i) limited to a benefit for at least one specific
Beneficiary which may not be changed without spousal consent (or the spouse's
consent expressly permits at least one additional designation of another
Beneficiary without any requirement of further consent by such spouse if such
spouse's consent expressly acknowledges that a more limited consent could be
provided), (ii) filed with the Committee, (iii) signed by the spouse and (iv)
bear the signature of at least two persons (at least one of which must be a
representative designated by the Committee or a Notary Public) as witnesses to
the signature. Notwithstanding the immediately preceding sentence, a
Participant's designation of a Beneficiary (other than the Participant's
spouse) shall be effective if it is established to the satisfaction of the
Committee that the consent required in the preceding sentence may not be
obtained because (i) there is no spouse, (ii) the spouse cannot be located,
(iii) the Participant has provided a duly certified copy of a court order
issued by a court of competent jurisdiction which recognizes that the
Participant is legally separated or has been abandoned (under applicable local
law) and the Committee has not received a duly certified copy of a qualified
domestic relations order (described in Section 414(p) of the Code) which
requires spousal consent, or (iv) there exists such other circumstance (as are
prescribed in regulations or other authority issued under Sections 401(a)(11)
and 417(a)(2) of the Code) which obviate the necessity of obtaining the consent
described in the preceding sentence. In addition, if the surviving spouse is
not legally competent to give consent, such spouse's legal guardian, which may
be the Participant, may give the consent required hereunder. Any consent by a
Participant's spouse (or establishment that the consent of a Participant's
spouse may not be obtained) shall be effective only with respect to such
spouse.
Notwithstanding any other provision hereof to the contrary, any spousal
consent which expressly acknowledges that a more limited consent could be
provided may expressly provide that the spouse consents to the designation by
the Participant of any Beneficiary (or any number of specified Beneficiaries)
without any requirement of further consent by the spouse and, in such event, no
further spousal consent shall be required, provided that any change of
Beneficiary by the Participant does not exceed any limit contained in the
spouse's consent on such Participant's right to change his Beneficiary. Any
spousal consent shall be deemed to be revocable unless it is expressly made
irrevocable at the election of the Participant's spouse.
Any designation of a Beneficiary (other than the Participant's spouse)
which otherwise meets the above requirements of this Section shall become
inoperative in the event that (i) the Participant subsequently marries (or
subsequently is deemed to be married under applicable local law), (ii) any
missing spouse is located or (iii) any other circumstance which earlier
precluded the necessity of obtaining consent of the Participant's spouse no
longer exists. If no designation
VI-2
<PAGE> 70
of Beneficiary is on file with the Committee at the time of the Participant's
death, or if the Committee for any reason determines that such designation is
ineffective, then, such Participant's spouse, if then living, or if not, then
the executor, administrator, or other personal representative of the estate of
such Participant shall be conclusively deemed to be the Beneficiary designated
to receive such Participant's death benefit.
The provisions of this Section are intended to comply with the
requirements of Sections 401(a)(11) and 417(a)(2) of the Code. To the extent
any provision hereof is inconsistent with the preceding sentence, such
provision shall be deemed to be inoperative and the Plan shall be operated in a
manner which complies with the requirements of the immediately preceding
sentence.
Whenever the Trustee is authorized by this Plan or by a designation of
Beneficiary to pay funds to a minor or an incompetent, the Trustee shall be
authorized to pay such funds to a parent of such minor, to a guardian of such
minor or incompetent, or directly to such minor, or to apply such funds for the
benefit of such minor or incompetent in such manner as the Committee may in
writing direct. The Trustee, Committee, and Employer shall be fully discharged
with respect to any payment made in accordance with the preceding sentence.
6.2 Retirement Benefit: Upon the retirement of a Participant, his
retirement benefit shall be 100% of the amount credited to his Account as of
the end of the applicable accounting period coincident with or next preceding
his retirement, plus an aggregate amount equal to the sum of the amounts
described in clauses (ii), (iii) and (iv) of the first paragraph of Section
6.1. Provided, however, in accordance with the provisions of Section 6.10, the
retirement benefit described in the preceding sentence shall be reduced by any
security interest held by the Plan by reason of any outstanding loan to the
Participant.
6.3 Total and Permanent Disability Benefit: In the event that the
Committee determines that a Participant is suffering from a Total and Permanent
Disability, his disability benefit shall be 100% of the amount credited to his
Account as of the end of the applicable accounting period coincident with or
next preceding such determination, plus an aggregate amount equal to the sum of
the amounts described in clauses (ii), (iii) and (iv) of the first paragraph of
Section 6.1. In accordance with Section 6.10, the disability benefit described
in the preceding sentence shall be reduced by any security interest held by the
Plan by reason of any outstanding loan to the Participant.
6.4 Severance Benefit: Upon a Participant's severance from
employment with an Employer and all Affiliated Employers, for any reason other
than death, retirement, or Total and Permanent Disability, his severance
benefit shall be an amount equal to the sum of: (i) 100% of the total amount
credited to his Employee Account, if any, Employer Nonforfeitable Contributions
Account, and Rollover Account, if any, as of the end of the applicable
accounting period (for which the last valuation was made) coincident with or
next preceding the date of such Participant's severance, together with an
amount equal to any Employee Voluntary Contributions made or recharacterized
after the end of such accounting period, any Contributions, Rollover
VI-3
<PAGE> 71
Contributions or direct transfers made by or on behalf of the Participant after
the end of such accounting period which were allocated to any of the above-
listed Accounts, and (ii) the percentage of the total amount credited to his
Employer Contributions Account, as of the end of such accounting period
coincident with or next preceding the date of such Participant's severance,
together with the percentage of the amount of any Contributions made on behalf
of such Participant after the end of such accounting period which were
allocated to an Employer Contributions Account, as such percentage is shown in
the table set out below for the total number of years of Active Service
credited to the Participant prior to his date of severance of employment, and,
if applicable, (iii) to the extent that the Participant's Account has any
undistributed balance which has not been paid as of the end of the applicable
accounting period (for which the last valuation was made), that portion of the
periodic adjustments and allocations required by Article IV to be credited to
the Participant's Account as of the end of the applicable accounting period
next preceding or coincident with payment of benefits described above. In
accordance with Section 6.10, the severance benefit described in the
immediately preceding sentence shall be reduced by any security interest held
by the Plan by reason of any outstanding loan to the Participant.
<TABLE>
<S> <C>
Less than one year . . . . . . . . . . . . . . . . . . . . . . . . 0%
One year, but less than two years . . . . . . . . . . . . . . . . . 20%
Two years, but less than three years . . . . . . . . . . . . . . . 40%
Three years, but less than four years . . . . . . . . . . . . . . . 60%
Four years, but less than five years . . . . . . . . . . . . . . . 80%
Five years, or more . . . . . . . . . . . . . . . . . . . . . . . . 100%
</TABLE>
A Participant who is a former Employee of an Employer shall be entitled to
benefits under the vesting schedule and other terms and provisions of the Plan
as in effect on the date that the Participant's employment with an Employer was
terminated. The above vesting schedule is subject to automatic 100% vesting in
the event of a full or partial termination of the Plan pursuant to Section
11.5. The amount credited to such Participant's Account which is not vested
upon distribution shall be forfeited and reallocated as provided in Section
4.6.
6.5 Accounting for Distributions; Offsets in Special Circumstances:
Subject to the provisions of Section 4.6 governing restoration of Participants'
Accounts and to Section 4.10 concerning individual investment direction, if
applicable, any distribution of any benefits under the Plan (and any
forfeitures arising incident thereto) shall be subtracted from the affected
Participant's Account balance as of the end of the Plan Year (or such shorter
accounting period as may be prescribed by the Committee) coincident with or
next preceding the applicable accounting period in which such distribution was
paid. Moreover, notwithstanding any other provision of the Plan to the
contrary, if after a Participant's employment with an Employer and all other
Affiliated Employers terminates, such person is reemployed by an Employer after
receiving a distribution pursuant to Section 6.6 and again becomes eligible for
membership, and has his Employer Account restored pursuant to Section 4.6, then
any benefits that such Participant may become entitled to receive hereunder
after reentry in the Plan shall be reduced
VI-4
<PAGE> 72
by any amounts distributed from his Employer Account which were not repaid by
such Participant incident to restoration of his Employer Account pursuant to
Section 4.6.
6.6 Distributions-Settlement Options:
(a) General Rules:
(i) Form and Method of Payment of Benefits: Subject to
Sections 3.2, 3.4, 6.8, 6.11, 11.4, 11.7 and 12.3, distributions
shall be made under the Plan only upon the occurrence of one of
the events described in Sections 6.1 through 6.4. To the extent
required by Section 401(k) of the Code, the limitations of the
preceding sentence shall continue to apply even if Trust Fund
assets attributable to any Participant's Account are transferred
to another plan pursuant to applicable provisions of Section 8.2,
9.2 or 11.7. Subject to the following provisions of this Section
6.6(a), distributions provided for in the Plan shall be made in
cash under one of the settlement options available under the Plan
as elected by the Participant; provided, however, in the absence
of such election, settlement shall be made in the form of a lump
sum payment or, to the extent elected by the distributee, in the
form of a direct rollover as described in Section 6.6(b) if the
requirements of that section are satisfied.
With respect to any amounts invested in common stock of
the Plan Sponsor, distribution shall be paid in cash in an amount
equal to the value (as of the date or dates shares of common
stock of the Plan Sponsor allocated and credited to the
Participant's Account are converted into cash) of the
Participant's vested interest in shares of common stock of the
Plan Sponsor allocated and credited to such Participants Account,
or in whole shares of common stock of the Plan Sponsor, or in any
combination thereof as elected by the Participant; provided,
however, that any fractional shares of the Plan Sponsor to which
the Participant or Beneficiary may be entitled shall be valued
(as of the date immediately prior to the date of distribution)
and paid in cash.
A Participant must consent, in writing, to any
distribution required hereunder if the present value of the
Participant's vested Account balance (derived from Employer and
any Employee Contributions) distributable under the Plan exceeds
$3,500 and the Participant has not attained the normal retirement
age described in Article V. After the Participant's death,
benefits may be paid in accordance with applicable provisions of
the Plan without regard to the requirements of the immediately
preceding sentence. The present value of the settlement under
any option shall be no less than the amount that would be payable
as an immediate lump-sum distribution. The settlement options
available under the Plan are as follows:
(1) A lump-sum payment; or
VI-5
<PAGE> 73
(2) Periodic installments payments. The amount
payable to the Participant under this option shall be paid
in equal monthly or quarterly installments for a certain
period of time that does not exceed the life expectancy of
the Participant or joint life and last survivor expectancy
of the Participant and a designated Beneficiary
(determined as of the date that payment of benefits
commences). At the election of the Participant, the
Participant's Account from which such installments are
payable may be (a) maintained as a part of the Trust Fund
and be subject to its proportionate share of the income,
appreciation or depreciation of the Trust Fund as a whole,
but not subject to any further Contributions, or (b)
segregated and placed on deposit at interest in an insured
depository.
A Participant who elects periodic installments under this option
and begins to receive such periodic payments may, at a future
date but not more often than once in each calendar year, file a
new election with the Committee under which such Participant may
(i) modify the certain period of time over which such installment
payments are payable (but in no event over a period that exceeds:
(A) the life expectancy of the Participant or the joint life
expectancy of the Participant and a designated Beneficiary, as
determined as of the date that such periodic installments
originally began under this option) or (B) in the case of a
Participant who has reached his Required Beginning Date (as
defined in Section 6.6(a)(1)(iv)(1) below), a period that is
longer than the period over which payments were being made at the
time such Participant reached his Required Beginning Date); or
(ii) elect to receive a lump sum payment of his entire remaining
Account balance under the Plan, payable as soon as
administratively feasible after the Committee receives such
election.
None of the above described settlement options may be made in the
form of an annuity payable for the life of any Participant,
Beneficiary or any other person.
(ii) Distributable Account Balance Does Not Exceed
$3,500. If the present value of a Participant's vested Account
balance (derived from Employer Contributions and any Employee
Contributions) which is distributable under the Plan does not
exceed $3,500, then except to the extent that the distributee has
properly elected a direct rollover pursuant to Section 6.6(b)
hereof, the Participant's vested interest in his Account balance
shall be distributed in a single sum in cash. Any Participant
who receives a distribution pursuant to the preceding sentence
and who does not have a vested interest in his Account balance
(derived from Employer Contributions) distributable under the
Plan, shall be deemed to have received a distribution of a vested
Account balance (derived from Employer Contributions) equal to
zero. Such distribution may be made without the necessity of
obtaining the consent of the Participant and/or his spouse or any
Beneficiary other than such Participant's spouse, if applicable.
Such payment may be made as soon as practicable, but (absent
circumstances beyond
VI-6
<PAGE> 74
the control of the Committee) in no event later than one year
after the last day of the Plan Year in which the Participant's
employment with an Employer and all Affiliated Employers is
terminated.
(iii) Distributable Account Balance Exceeds $3,500: If
the present value of a Participant's vested Account balance
(derived from Employer Contributions and any Employee
Contributions) which is distributable under the Plan is in excess
of $3,500 and if the Participant provides the Committee written
consent to the distribution, the Committee shall direct the
Trustee to make settlement of the Participant's Account within
the 60-day period (or as soon as practicable) after the Committee
receives such consent, but (absent circumstances beyond the
control of the Committee) in no event later than sixty (60) days
after the last day of the Plan Year in which the Participant's
employment with an Employer and all Affiliated Employers is
terminated. Except as provided in the immediately succeeding
paragraph of this Section 6.6(a)(iii), no such written consent
shall be considered valid unless (within the period which shall
begin no more than ninety (90) days before the annuity starting
date (described below) and shall end no less than thirty (30)
days before the annuity starting date) such Participant has
received a general written explanation of the general features
and values of each optional form of payment available under the
Plan, and has been informed in writing of his right to defer
receipt of the distribution. Such written explanation may be
provided by mail, personal delivery, or other means which would
normally ensure or facilitate the continued attention of the
Participant during the period prescribed below in which the
Participant is to consent to the distribution or otherwise be
deemed to have elected to defer receipt (as set out below).
Written consent of the Participant shall be invalid unless it is
given after receipt of the written explanation described above
and not more than ninety (90) days before the annuity starting
date. The term "annuity starting date" means the first day of
the first period for which an amount is paid pursuant to any
settlement option available under the Plan.
Notwithstanding the provisions of the immediately
preceding paragraph of this Section 6.6(a)(iii), if a
distribution is one to which sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30
days after the notice required under section 1.411(a)-11(c) of
the Regulations is given, provided that:
(1) the Committee clearly informs the
participant that the participant has a right to a period
of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option, and
(2) the participant, after receiving the notice,
affirmatively elects a distribution.
VI-7
<PAGE> 75
In addition, subject to a designated Beneficiary's right
to elect the date of settlement in the case of a Participant who
dies prior to receipt of any benefits under the Plan, a valid
written consent to such distribution may be made by a Participant
without the necessity of obtaining the consent of the
Participant's spouse or any Beneficiary other than such
Participant's spouse, if applicable. If the present value of
such Participant's vested Account balance which is distributable
under the Plan is in excess of $3,500 at the time of any
distribution, the present value of such Account balance at any
subsequent time shall be deemed to exceed $3,500.
If the Committee fails to receive the Participant's
written consent to the distribution within 60 days after his
receipt of the written explanation described above, subject to
the distribution requirements of Section 6.6(a)(iv) below, such
Participant shall be deemed to have irrevocably elected to defer
receipt of settlement of his Account to a date that is not
earlier than the earlier of the date of his death or of his
attainment of normal retirement age hereunder; except that (i)
such a Participant who, on the above described termination date,
met any service requirement for early retirement may file a claim
with the Committee requesting settlement to be made or commence
on any date which is after his early retirement date or (ii) any
other Participant may file a claim with the Committee requesting
settlement to be made or commence on any date which is after his
normal retirement date, provided that in either case such a claim
for settlement is filed with the Committee within a reasonable
time before such date. The balance credited to the Account of
any Participant during any period of deferral of his settlement
shall continue to be part of the commingled Trust Fund and thus
shall continue to share in any appreciation or depreciation of
the Trust Fund and in any income or losses incurred by the Trust
Fund pending distribution of such Account balance; provided,
however, no further Contributions shall be credited to his
Account.
If Participants are permitted to direct the investment of
their Accounts in accordance with Section 4.10, unless the
Committee otherwise prescribes pursuant to uniformly applied
nondiscriminatory rules established by the Committee, a
Participant who is a former Employee of an Employer shall be
entitled to direct the investment of such Participant's Account
after the Participant becomes entitled to a distribution under
Article VI of the Plan.
(iv) Distribution Requirements: Capitalized terms used
in this Section 6.6(a)(iv) which are not otherwise defined in
Article I are defined in Section 6.6(a)(iv)(5). The requirements
of this Section 6.6(a)(iv) shall apply to any distribution of a
Participant's or Beneficiary's vested Benefit and will take
precedence over any inconsistent provisions of the Plan. All
distributions required under Article VI shall be determined and
made in accordance with Section 401(a)(9) of the Code, including
the minimum distribution incidental benefit requirement of
VI-8
<PAGE> 76
Section 1.401(a)(9)-2 of the proposed Income Tax Regulations or
any successor or final regulation issued with respect thereto.
(1) Required Beginning Date. Notwithstanding
any other provision of the Plan to the contrary, but
subject to the immediately succeeding sentence, unless the
Participant otherwise elects, the Trustee must make full
settlement or begin Benefit payments to the Participant
not later than the 60th day after the latest of the close
of the Plan Year in which: (a) the Participant attains the
normal retirement age set out in Article V, (b) occurs the
tenth (10th) anniversary of the year in which the
Participant commenced participation in the Plan, or (c)
the Participant terminates employment with an Employer.
The entire vested Benefit payable to a Participant must be
distributed or commence to be distributed no later than
the Required Beginning Date.
(2) Limits on Distribution Periods. As of the
first Distribution Calendar Year, distributions, if not
made in a single-sum, may only be made over a period which
shall not extend beyond one of the following periods (or a
combination thereof):
(A) the Life Expectancy of the
Participant, or
(B) the Life Expectancy of the
Participant and a Designated Beneficiary.
(3) Determination of Amount to be Distributed
Each Year. If the Participant's vested Benefit is to be
distributed in other than a single sum, the following
minimum distribution rules shall apply on or after the
Required Beginning Date.
(A) If a Participant's vested Benefit is
to be distributed over (i) a period not extending
beyond the Life Expectancy of the Participant or
the joint life and last survivor expectancy of the
Participant and the Participant's Designated
Beneficiary or (ii) a period not extending beyond
the Life Expectancy of the Designated Beneficiary,
the amount required to be distributed for each
calendar year, beginning with distributions for the
first Distribution Calendar Year, must at least
equal the quotient obtained by dividing the
Participant's vested Benefit by the Applicable Life
Expectancy.
(B) For calendar years beginning after
December 31, 1988, the amount to be distributed
each year, beginning with the distribution for the
first Distribution Calendar Year shall not be
VI-9
<PAGE> 77
less than the quotient obtained by dividing the
Participant's vested Benefit by the lesser of (i)
the Applicable Life Expectancy or (ii) if the
Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from
the table set forth in Q & A-4 of Section
1.401(a)(9)-2 of the proposed Income Tax
Regulations or any successor or final regulation
issued with respect thereto. Distributions after
the death of the Participant shall be distributed
using the Applicable Life Expectancy in Section
6.6(a)(iv)(3)(A) above as the relevant divisor
without regard to Section 1.401(a)(9)-2 of the
proposed Income Tax Regulations or any successor or
final regulation issued with respect thereto.
(C) The minimum distribution required
for the Participant's first Distribution Calendar
Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution
for other calendar years, including the minimum
distribution for the Distribution Calendar Year in
which the Required Beginning Date occurs, must be
made on or before December 31 of that Distribution
Calendar Year.
(4) Participant's Death Prior to Receipt of All
Vested Benefits.
(A) 5-Year Rule. In the event that the
Participant dies prior to payment or commencement
of payment of benefits hereunder, such
Participant's entire vested Benefit shall be
distributed following the Participant's date of
death on, or as soon as is administratively
practicable following, the date elected by the
Participant's Designated Beneficiary (but in any
event not later than December 31 of the calendar
year in which occurs the fifth (5th) anniversary of
the date of the Participant's death) in any of the
optional forms permitted hereunder as the
Participant's Designated Beneficiary may elect in
writing or, in the absence of such written
election, in the form of a lump sum payment in
cash. Any such election must be made (and shall be
deemed irrevocable) as of the earlier of (i)
December 31 of the calendar year in which occurs
the fifth (5th) anniversary of the Participant's
date of death or (ii) the date on which payment
must commence under applicable provisions of this
Section set out below. Provided, however, if the
present value of the Participant's vested Account
balance (derived from Employer Contributions and
any Employee Contributions) which is distributable
on account of the death of the Participant does not
exceed $3,500, such Participant's entire vested
interest shall be distributed in a single sum
payment in cash, which payment shall be made as
soon as practicable, but (absent
VI-10
<PAGE> 78
circumstances beyond the control of the Committee)
in no event later than sixty (60) days after the
last day of the Plan Year in which the
Participant's date of death occurs.
(B) Distribution Commencing Before
Participant's Death. In the event that the
Participant dies after distribution of his vested
Benefit has begun over a period certain, the
remaining portion of such Benefit will continue to
be distributed at least as rapidly as under the
method of distribution being used prior to the
Participant's death; provided, however, that the
Committee shall accelerate payments under said
payment option if acceleration is requested in
writing by the Designated Beneficiary.
(C) Distribution Commencing After
Participant's Death.
(i) Notwithstanding the first
sentence of Section 6.6(a)(iv)(4)(A), and
except as otherwise provided below, if any
portion of the Participant's vested Benefit
is payable to (or for the benefit of) his
surviving spouse (or other Designated
Beneficiary), payments attributable to such
portion may be made to such surviving spouse
(or other Designated Beneficiary) under one
of the optional forms permitted hereunder in
substantially equal installments over a
period not to exceed such surviving spouse's
(or other Designated Beneficiary's) Life
Expectancy, provided that such payments
shall commence not later than December 31 of
the calendar year immediately following the
calendar year in which the Participant died.
(ii) If the payments described in
Section 6.6(a)(iv)(4)(C)(i) are payable to
the deceased Participant's surviving spouse,
the payments need not begin earlier than
December 31 of the calendar year in which
the deceased Participant would have attained
age 70 1/2. The Participant's surviving
spouse may elect in writing that the
Committee postpone such payment to any date
within the time period which is permitted
under the previous sentence.
(iii) Notwithstanding Section
6.6(a)(iv)(4)(C)(ii), if the Participant
dies prior to commencement of Benefits, the
Participant's Designated Beneficiary is his
surviving spouse, and such surviving spouse
dies before distributions to the surviving
spouse begin, the rules under applicable
provisions of the first two sentences of
Section
VI-11
<PAGE> 79
6.6(a)(iv)(4)(A) shall apply as if the
surviving spouse were the Participant so
that Plan benefits otherwise payable to the
deceased surviving spouse of the deceased
Participant shall in all events be
distributed to the Designated Beneficiary of
the deceased spouse of the deceased
Participant not later than December 31 of
the calendar year in which occurs the fifth
(5th) anniversary of the date of death of
the deceased spouse of the deceased
Participant.
(iv) For purposes of this Section
6.6(a)(iv)(4)(C), distribution of a
Participant's vested Benefit is considered
to begin on the Participant's Required
Beginning Date (or, if applicable, any
earlier date distribution is required under
this Section to begin to the surviving
spouse).
(5) Definitions.
(A) Applicable Life Expectancy. The
Life Expectancy (or joint and last survivor
expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of
the Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced by
one for each calendar year which has elapsed since
the date Life Expectancy was first calculated. If
Life Expectancy is being recalculated, the
applicable Life Expectancy shall be the Life
Expectancy as so recalculated. The applicable
calendar year shall be the first Distribution
Calendar year, and if Life Expectancy is being
recalculated such succeeding calendar year.
(B) Designated Beneficiary. The
individual who is designated as the Beneficiary
under the Plan in accordance with section 401(a)(9)
of the Code.
(C) Benefit.
(i) The Account Balance as of the
last Valuation Date in the calendar year
immediately preceding the Distribution
Calendar Year (valuation calendar year)
increased by the amount of any contributions
allocated to the Account as of dates in the
valuation calendar year after the Valuation
Date and decreased by distributions made in
the valuation calendar year after the
Valuation Date.
VI-12
<PAGE> 80
(ii) For purposes of Section
6.6(a)(iv)(5) (C)(i) above, if any portion
of the minimum distribution for the first
Distribution Calendar Year is made in the
second Distribution Calendar Year on or
before the Required Beginning Date, the
amount of the minimum distribution made in
the second Distribution Calendar Year shall
be treated as if it had been made in the
immediately preceding Distribution Calendar
Year.
(D) Distribution Calendar Year. A
calendar year for which a minimum distribution is
required. For distributions beginning before the
Participant's death, the first Distribution
Calendar Year is the calendar year immediately
preceding the calendar year which contains the
Participant's Required Beginning Date. For
distributions beginning after the Participant's
death, the first Distribution Calendar Year is the
calendar year in which distributions are required
to begin pursuant to section 6.6(a)(iv)(4).
(E) Life Expectancy. Life Expectancy
and joint and last survivor expectancy are computed
by use of the expected return multiples in Tables V
and VI of Section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant
(or spouse, in the case of distributions described
in Section 6.6(a)(iv)(4)(C)(ii) above) by the time
distributions are required to begin, Life
Expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant
(or spouse) and shall apply to all subsequent
years. The Life Expectancy of a nonspouse
Beneficiary cannot be recalculated.
(F) Required Beginning Date.
(i) General rule. The Required
Beginning Date of a Participant is the first
day of April of the calendar year following
the calendar year in which the Participant
attains age 70 1/2.
(ii) Transitional rules. The
Required Beginning Date of a Participant who
attains age 70 1/2 before January 1, 1988,
shall be determined in accordance with (1)
or (2) below:
VI-13
<PAGE> 81
(1) Non-5-percent Owners. The
Required Beginning Date of a
Participant who is not a 5-percent
Owner (defined below) is the first day
of April of the calendar year following
the calendar year in which the later of
retirement or attainment of age 70 1/2
occurs.
The Required Beginning Date of a
Participant who is not a 5-percent
Owner who attains age 70 1/2 during
1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(2) 5-percent Owners. The
Required Beginning Date of a
Participant who is a 5-percent Owner
during any year beginning after
December 31, 1979, is the first day of
April following the later of:
(A) the calendar year
in which the Participant attains
age 70 1/2, or
(B) the earlier of the
calendar year with or within
which ends the Plan Year in
which the Participant becomes a
5-percent Owner, or the calendar
year in which the Participant
retires.
(iii) 5-percent Owner. A Participant
is treated as a 5-percent Owner for purposes
of this Section if such Participant is a
5-percent Owner (as defined in Section
416(i) of the Code determined in accordance
with Section 416 but without regard to
whether the Plan is Top-Heavy) at any time
during the Plan Year ending with or within
the calendar year in which such owner
attains age 66 1/2 or any subsequent Plan
Year.
(iv) Distributions Begun to 5-
percent Owner. Once distributions have
begun to a 5-percent Owner under this
Section, they must continue to be
distributed, even if the Participant ceases
to be a 5-percent Owner in a subsequent
year.
(b) Special Rules Regarding Direct Rollovers:
VI-14
<PAGE> 82
(i) General Rule: This Section 6.6(b) applies to
distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section 6.6(b), a
distributee may elect, at the time and in the manner prescribed
by the Committee, to have all or any portion (provided that such
portion is at least $500) of an eligible rollover distribution
paid, in a direct rollover, directly to an eligible retirement
plan specified by the distributee. Only one direct rollover
shall be allowed for each eligible rollover distribution. Prior
to any direct rollover pursuant to this Section 6.6(b), the
distributee shall furnish to the Committee a statement from the
plan administrator or trustee of the qualified plan, or the
trustee or custodian of the individual retirement account or
annuity, to which the direct rollover is to be transferred that
such plan, account or annuity is, or is intended to be an
eligible retirement plan.
(ii) Definitions.
(1) Eligible rollover distribution: An eligible
rollover distribution is any distribution of all or any
portion (that is at least $500) of the balance to the
credit of the distributee, except that an eligible
rollover distribution does not include: (A) any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made (i) for the life (or life expectancy) of
the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or (ii) for a specified period of
ten years or more; (B) any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; (C) the portion of any distribution that is not
includable in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect
to employer securities) (D) any distribution that, when
aggregated with all other eligible rollover distributions
within the same taxable year of the distributee from this
Plan, are reasonably expected to total less than $200; and
(E) any other amounts that are treated as not being
eligible rollover distributions under Temporary Regulation
Section 1.401(a)(31)-1T or other guidance issued by
applicable governmental authority under Section 401(a)(31)
of the Code.
(2) Eligible retirement plan: An eligible
retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
VI-15
<PAGE> 83
(3) Distributee: A distributee includes a
Participant who is an Employee or former Employee. In
addition, such Employee's spouse or former Employee's
surviving spouse and such Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(4) Direct rollover: A direct rollover is a
payment by the Plan to the eligible retirement plan
specified by the distributee.
(iii) Effect of Failure to Make Direct Rollover Election: In
the event that a distributee entitled to an eligible rollover
distribution under this Plan fails to elect, in the time and manner
prescribed by the Committee, that a direct rollover be made on his
behalf to an eligible retirement plan, such distributee shall be deemed
to have elected that no such direct rollover be made and that
distribution of his interest under the Plan be made in accordance with
otherwise applicable provisions of the Plan, but such deemed elections
will only be treated as having been made if such distributee was
provided with the notice and explanation described in Section 402(f) of
the Code not more than 90 days and not less than 30 days, before making
such distribution.
6.7 Lost Participants or Beneficiaries; Escheat: If a Participant or
Beneficiary thereof cannot be located within sixty (60) days of the date any
benefits payable under the Plan should be paid or commence to be paid pursuant
to Section 6.6, the Participant's entire Account may be forfeited and allocated
as any other forfeiture pursuant to applicable provisions of Section 4.6.
Notwithstanding the preceding sentence, if the Participant or Beneficiary files
a valid claim pursuant to Section 6.10 for the forfeited benefits payable under
the Plan, then (i) as soon as administratively practicable, the forfeited
benefits payable to such Participant or Beneficiary shall be reinstated
effective as of the date of receipt of the claim and (ii) as soon as
administratively practicable following an Employer's Contribution (pursuant to
applicable provisions of Section 3.4) of an amount equal in value to the value
of such forfeited benefits, the value of the reinstated benefits shall be paid
pursuant to Section 6.6.
Should the Plan be joined as a part to any escheat proceedings
concerning rights to any benefits payable to a Participant or Beneficiary
thereof, the Plan shall comply with any final judgment (of the appropriate
court declaring that title to any benefits payable under the Plan to a
Participant or Beneficiary thereof vests in the State) by (i) treating the
judgment as if it were a claim filed by the Participant or Beneficiary thereof
on the effective date of the final judgment and (ii) paying the State as if it
were the Participant or Beneficiary who filed the claim for benefits which the
court determined have escheated to the State.
VI-16
<PAGE> 84
6.8 Withdrawals by Participants:
(a) Withdrawal of Employer Contributions: Subject to the
conditions of this Section, upon giving thirty (30) days' written notice
to the Committee, any Participant who has withdrawn the maximum
permissible amount under Section 6.8(b) and (i) who has attained age 59
1/2 and has been a Participant for at least five (5) years, or (ii) who
is suffering an immediate and heavy financial hardship (a) because of
expenses previously incurred, or necessary to be incurred, for medical
care described in Section 213(d) of the Code (not covered by insurance
or otherwise reimbursable from any other source) of the Participant, the
Participant's spouse or any other person who qualifies as a dependent of
the Participant under Section 152 of the Code, (b) due to lack of funds
required to pay expenses and/or other amounts required (excluding
mortgage payments) to effect the purchase of a principal residence for
the Participant, (c) due to a lack of funds required to make any payment
required to avoid eviction from the Participant's principal residence,
(d) due to lack of funds required to make any payment required to avoid
foreclosure on the Participant's principal residence, or (e) due to a
lack of funds to pay amounts demanded by the trustee in bankruptcy or
other appropriate representative of the Participant's creditors in any
bankruptcy, insolvency or similar proceeding in which the Participant's
Account is properly subject to claims of such creditors as required by
applicable law, shall be entitled to withdraw from his Account, in the
order of priority set out below, an amount equal to the lesser of (A)
the amount needed to alleviate the hardship or (B) the Distributable
Amount (defined below) then credited to the Participant's Account. Any
Participant who has attained age 59 1/2, but who has not been a
Participant for at least five (5) years, and who is not making a
hardship withdrawal described in the immediately preceding sentence,
shall be entitled to make a withdrawal from his Employer Account in the
same amount as set forth in the immediately preceding sentence, and
priority as set forth in second paragraph below, except that such
Participant shall be entitled to withdraw only those vested Matching
Contributions (and any earnings attributable thereto) which have been
credited to the Participant's Account for at least two (2) years before
the withdrawal. The requested withdrawal under clause (A) above may
include an additional amount necessary to pay any federal, state or
local income taxes or penalties (including additional taxes under
Section 72(t) of the Code) that are reasonably expected to result from
the withdrawal. For purposes of clause (B) above in accordance with
Section 1.401(k)-1(d)(2)(ii) of the income tax regulations, the
Distributable Amount shall be equal to the Participant's total Elective
Contributions credited to his Employer Nonforfeitable Contributions
Account as of the date of withdrawal; provided, however, the
Distributable Amount shall be increased by any Qualified Non-Elective
Contributions and net earnings and appreciation on Elective
Contributions and Qualified Non-Elective Contributions that were
credited to the Participant's Nonforfeitable Contributions Account as of
December 31, 1988. The Distributable Amount shall not include any (i)
Qualified Non-Elective Contributions and (ii) earnings and appreciation,
that were credited to the Participant's Nonforfeitable Contributions
Account after December 31, 1988.
VI-17
<PAGE> 85
Except as may otherwise be prescribed by the Committee under
nondiscriminatory rules uniformly applied and announced to Participants,
withdrawals permitted hereunder shall be made in the following order:
(i) the Employee Account, if any;
(ii) the Rollover Account, if any;
(iii) the Employer Contributions Account whereunder the
Participant shall effect such withdrawal
(1) from amounts attributable to any predecessor Profit
Sharing and Savings Plan Contributions and any
income and increments thereon;
(2) from any Profit Sharing Contributions and any
income and increments thereon; and lastly
(3) from any Matching Contributions and any income and
increments thereon.
(iv) the Employer Nonforfeitable Contributions Account
whereunder the Participant shall effect withdrawal
(1) from amounts attributable to any Qualified Non-
Elective Contributions and any income and
increments thereon;
(2) from any Profit Sharing Contributions and any
income and increments thereon;
(3) from any income or increment on Elective
Contributions; and lastly
(4) from any Elective Contributions.
The entire withdrawable balance then credited to the applicable account
described in the preceding sentence must be withdrawn before withdrawals
may be made from the succeeding account. All other amounts credited to
such Participant's Account and not withdrawn shall remain in such
Participant's Account.
If such withdrawal is made at a time when the member is not fully
vested in the portion of his Employer Contributions Account and such
Participant can increase his vested percentage in his Employer
Contributions Account, such Participant's vested interest in his
Employer Contributions Account at any relevant time will be determined
VI-18
<PAGE> 86
under the following formula: X = P(AB + D)-D. For purposes of applying
the formula: P is the vested percentage at the relevant time; AB is an
Employer Contributions Account balance at the relevant time; and D is
the amount of the withdrawal.
A Participant shall not be considered as suffering an immediate
and heavy financial hardship unless such Participant submits to the
Committee (i) written evidence (satisfactory to the Committee) of such
hardship and the amount needed to alleviate the hardship (ii) any other
written agreement or other documentation which the Committee deems to be
necessary or appropriate in order to ensure that the Participant
understands and will comply with the requirements of this Section.
Absent actual knowledge to the contrary, any Participant shall be deemed
to have met the requirements of the immediately preceding sentence if
the Participant complies with the requirements of the immediately
succeeding sentence and if he submits a written request in which he
specifically identifies the hardship and attaches a photocopy of (i)
bills for medical care (described in the first paragraph of this
Section) previously incurred or physician's reports and other evidence
of medical care to be incurred, (ii) a contract to purchase property
which he represents to be his principal residence, (iii) a notice or
other evidence of imminent eviction from property which the Participant
represents to be his principal residence, (iv) a notice or other
evidence of imminent foreclosure action with respect to property which
the Participant represents to be his principal residence, (v) a
certified copy of the order of the court or other authority with
jurisdiction over the trustee in bankruptcy or other appropriate
representative of the Participant's creditors in any bankruptcy,
insolvency or similar proceeding, to the effect that the amounts
demanded by such trustee or other appropriate representative have been
determined by such court or other authority to be due and payable to or
for the benefit of such creditors, or (vi) other evidence of the claimed
hardship and the amount of funds required to alleviate such hardship.
In addition, the Participant must represent in writing that (i)
his financial need cannot be relieved through reimbursement or
compensation by insurance or otherwise, (ii) his financial need cannot
be relieved through liquidation of any of his remaining assets (or any
remaining assets of his spouse or minor children that are readily
available to the Participant) without such liquidation itself causing an
immediate and heavy financial hardship, (iii) his financial need cannot
be relieved through his cessation of any contributions made by or on
behalf of such Participant to the Plan, (iv) such Participant has
received or applied for all other distributions available to him from
plans maintained by an Employer and any other employer, and such
distributions have not or will not relieve the claimed financial
hardship, and (v) such Participant has received or applied for all
nontaxable loans available to him from plans maintained by an Employer
or any other employer and from commercial sources, and such loans have
not or will not relieve the claimed financial hardship. However, the
purpose of permitting withdrawals under this Section is to reduce the
specific need. Therefore, if requiring one of the actions listed in
items (i) through (v) above would have the effect of increasing the
amount
VI-19
<PAGE> 87
needed, then the action will not be required. For example, if a
participant needs funds to purchase a principal residence, but receiving
a Plan loan would disqualify the employee from obtaining other necessary
financing, then obtaining the Plan loan will not be required even though
it is listed as item (v) above.
The Committee shall have no duty or obligation to independently
investigate or verify the truth or accuracy of any representation of the
Participant or the authenticity or accuracy of any documentary evidence
provided by the Participant and, absent actual knowledge to the
contrary, the Committee shall assume that any such representation is
true and correct and any such documentary evidence is authentic and
correct.
Any withdrawal hereunder shall result in suspension (for a period
of 12 months after the Participant's receipt of amounts withdrawn
hereunder) of Elective Contributions and Employee Voluntary
Contributions under the Plan and any elective deferrals (described in
Section 402(g)(3) of the Code) and any employee contributions described
in Section 401(m) of the Code under any other plan of deferred
compensation maintained by an Employer and/or any Affiliated Employer.
The term "any other plan of deferred compensation" as used in the
immediately preceding sentence shall mean any plan of deferred
compensation maintained by an Employer or any Affiliated Employer,
including stock option, stock purchase and similar plans, as well as a
cash or deferred arrangement under a cafeteria plan described in Section
125 of the Code, but excluding health or welfare benefit plans, and
excluding the mandatory contributions portion of any defined benefit
plan maintained by an Employer or any Affiliated Employer. Accordingly,
as a prior condition of any hardship withdrawal, the Participant shall
execute any written agreement or other document that the Committee deems
necessary to ensure that during the one-year suspension period, the
Participant is on notice and will comply with requirements of Section
401(k) of the Code.
In addition, under the Plan and any other plan maintained by an
Employer and/or any Affiliated Employer, the Participant may not
authorize Elective Contributions or any other elective deferrals
(described in Section 402(g)(3) of the Code) for the Participant's
taxable year immediately following the taxable year of receipt of the
amount withdrawn hereunder in excess of the applicable dollar limit
under Section 402(g) of the Code for such next taxable year, less the
amount of such Elective Contributions and any other elective deferrals
(described above) for the Participant's taxable year of receipt of the
amount withdrawn hereunder.
No withdrawal hereunder shall result in any forfeiture of a
Participant's vested Account balance and no repayment of amounts
withdrawn in order to wholly or partially restore a withdrawing
Participant's Account shall be permitted.
The Participant's Account shall be credited with the income of
the Trust Fund pursuant to Section 4.4 until the day of withdrawal, as
provided above. Amounts eligible to be withdrawn under this Section
shall be made available as soon as practical after the
VI-20
<PAGE> 88
Participant's withdrawal request is approved. No more than one
withdrawal can be made during any quarter of a Plan Year.
Subject to the requirements of Section 411(d)(6) of the Internal
Revenue Code and regulations and other guidance issued thereunder by the
Internal Revenue Service, to the extent that a Participant would be
entitled to withdraw any portion of his Account balance (immediately
prior to the most recent effective date of this Section 6.8(a)) under
the provisions of this Section as in effect immediately prior to the
most recent effective date of this Section, but may not withdraw such
portion under the currently operative provisions of this Section, the
provisions of this Section as in effect immediately prior to the most
recent effective date of this Section shall apply with respect to the
Participant's Account balance immediately prior to the effective date of
this Section.
(b) Withdrawal of Participant Contributions: Subject to the
conditions of this Section, each Participant, upon giving written notice
to the Committee and the Trustee, shall be entitled to withdraw from his
Employee Account an amount equal to the balance of such Employee
Account. Any portion of the Participant's Employee Account that is
derived from recharacterized Elective Contributions shall be subject to
the same conditions, limitations and penalty provisions as are set out
in Section 6.8(a). The Participant's Employee Account shall be credited
with the income of the Trust Fund in accordance with Section 4.4 until
the day of withdrawal. The appreciation or depreciation of the Trust
Fund and any understatement or overstatement of income shall be
allocated as of the end of the Plan Year pursuant to Section 4.4 but
based on only the income remaining in the Account after the withdrawal.
Amounts eligible to be withdrawn under this Section 6.8(b) shall be made
available as soon as practical after the Participant's withdrawal
request is approved. No more than one withdrawal can be made during any
quarter of a Plan Year.
6.9 Claims Procedure for Benefits: When a benefit is due under the
Plan, a claim should be submitted to the personnel office of an Employer by
which the Participant is or was employed. Under normal circumstances a final
decision on a claimant's request for benefits shall be made within ninety (90)
days after receipt of the claim. However, if special circumstances require an
extension of time to process a claim, a final decision may be deferred up to
one hundred eighty (180) days after receipt of the claim if, prior to the end
of the initial ninety (90) day period, the claimant is furnished with written
notice of the special circumstances requiring the extension and the anticipated
date of a final decision. If the claim is denied, within the applicable period
of time set out above, the claimant shall receive written notification of the
denial, which notice shall set forth the specific reasons for the denial, the
relevant Plan provisions on which the denial is based, and the claim review
procedure under the Plan. In the event that a claim is denied, or in the event
no action is taken on the claim within the above-described period(s) of time,
the following procedure shall be used:
(a) First, in the event that the claimant does not timely
receive the above-described written notification, the claimant's request
for benefits shall be deemed to be
VI-21
<PAGE> 89
denied as of the last day of the relevant period and the claimant shall
be entitled to a full review of his claim in accordance with the
following provisions of this Section.
(b) Second, a claimant is entitled to a full review of his
claim after actual or constructive notification of a denial. A claimant
desiring a review must make a written request to the Committee
requesting such a review, which may include whatever comments or
arguments the claimant wishes to submit. Incident to the review, the
claimant may represent himself or appoint a representative to do so, and
will have the right to inspect all documents pertaining to the issue.
The Committee, in its sole discretion, may schedule any meeting(s) with
the claimant and/or the claimant's representative that it deems
necessary or appropriate to facilitate or expedite its review of a
denied claim.
A request for a review must be filed with the Committee within ninety (90) days
after the denial of the claim for benefits was actually or constructively
received by the claimant. If no request is received within the 90-day time
limit, the denial of benefits will be final. However, if a request for review
of a denied claim is timely filed, the Committee must render its decision under
normal circumstances within sixty (60) days of the receipt of the request for
review. In special circumstances the decision may be delayed if, prior to
expiration of the initial 60-day period, the claimant is notified of the
extension, but must in any event be rendered no later than one hundred twenty
(120) days after the receipt of the request. If the decision on review is not
furnished to the claimant within the applicable time period(s) set above, the
claim shall be deemed denied on the last day of the relevant period. All
decisions of the Committee shall be in writing and shall include specific
reasons for whatever action has been taken, including the specific Plan
provisions on which the decision is based.
6.10 Loans to Participants and Beneficiaries:
(a) Loans may be permitted from time to time, as determined by
the Committee, to (i) any Participant or (ii) any Participant's
Beneficiary or alternate payee under a qualified domestic relations
order described in Section 414(p) of the Code, who is a "party in
interest," as defined in Section 3(14) of the Act, or a "disqualified
person," as defined in Section 4975(e)(2) of the Code, and (iii) on
whose behalf an Account or subaccount is maintained under the Plan
(hereinafter an individual described in clause (i) or (ii) and (iii)
shall be referred to as a "Qualified Participant"). For purposes of
this Section, a "loan" shall include any renewal or modification to an
existing loan hereunder so long as, at the time of any such modification
or extension, the requirements of this Section are met. Any action
taken by the Committee shall be taken pursuant to applicable provisions
of Article VIII and shall be communicated to Qualified Participants at
such time and in such manner as shall be prescribed by the Committee.
In order to relieve any demonstrated financial hardship, as
described under the provisions of the Plan which cover in-service
withdrawals, or for any other suitable purpose (such as financing the
purchase of a home or paying education expenses) as
VI-22
<PAGE> 90
determined by the Committee and announced to Qualified Participants, a
Qualified Participant may borrow from his vested Account balance under
the Plan, subject to the following provisions of this Section and to
such additional rules or guidelines as the Committee may adopt
hereunder, by making prior written application to the Committee on forms
provided for that purpose by the Committee. Such forms (hereinafter
referred to as the "application forms") shall (i) specify the terms
pursuant to which the loan is requested to be made, (ii) designate the
extent, if any, that the loan will be made from any one or more of any
funds as may have been established under Section 4.10 in which the
Qualified Participant has an interest, (iii) authorize the repayment of
the loan through payroll deductions in accordance with subsection (c) of
this Section if the Qualified Participant is an Employee, or authorize a
procedure whereby the Qualified Participant is to be invoiced monthly in
accordance with subsection (c) of this Section if the Qualified
Participant is not an Employee, (iv) provide such additional information
and documentation (including but not limited to demonstration of
financial hardship or any other suitable purpose of the loan) as the
Committee shall require, and (v) include a note and security agreement,
duly executed by the Qualified Participant, pursuant to which the
Qualified Participant promises to repay the note and grants a security
interest, as described in subsection (c) of this Section, to secure
repayment of the loan and the note.
(b) The Committee shall issue rules or guidelines
("Standards") which shall not be inconsistent with applicable provisions
of the Code and the Act, and regulations or other authority issued
thereunder by the appropriate governmental authority and which shall be
uniformly applicable to all Qualified Participants similarly situated
and shall govern the Committee's approval or disapproval of completed
application forms. Under such Standards, the Committee shall consider
the Qualified Participant's creditworthiness and credit history, fair
market value and liquidity of the Qualified Participant's collateral to
be pledged as security for the loan, and any other factors which the
Committee determines are considered in a normal commercial setting by a
commercial lender. To the extent not inconsistent with the requirements
of applicable provisions of the Code and the Act, the Standards shall
prescribe the manner for determining the annual rate of interest to be
charged on each loan to a Qualified Participant under the Plan. Without
limiting the scope of the immediately preceding sentence, such annual
rate of interest for such loans must provide the Plan with an annual
rate of return commensurate with the prevailing interest rate charged on
similar commercial loans by persons in the business of lending money for
loans which would be made under similar circumstances. In addition, the
Standards may provide for assessment of a fee for processing loan
application forms, obtaining credit reports, collection and processing
late payments, and similar administrative expenses which amounts shall
be charged directly to the Account of the affected Qualified
Participant. The Committee shall from time to time prescribe such
additional Standards that it deems to be necessary or appropriate and
which are consistent with proper lending practices.
(c) To the extent that loans are permitted under this Section,
subject to applicable provisions of this Section, following receipt by
the Committee of a properly
VI-23
<PAGE> 91
completed application form, each Qualified Participant who, pursuant to
the above-described Standards, the Committee determines to be credit
worthy and to be able to provide the requisite security shall be
entitled to borrow from his Account an amount which (when added to the
outstanding balance of all other loans to the Qualified Participant
under all "qualified employer plans," as defined in Section 72(p)(4) of
the Code, of an Employer and any Affiliated Employers) is not in excess
of the lesser of (i) $50,000, reduced by the excess, if any, of (a) the
highest outstanding balance of such loans during the one-year period
ending on the day before the latest date on which a loan was made, over
(b) the outstanding balance of such loans on the latest date on which a
loan was made, or (ii) one-half (1/2) of the present value of the vested
account balance of the Qualified Participant under the Plan as of the
most recent Valuation Date. Any renewal or modification of an existing
loan hereunder shall be deemed to be a new loan for purposes of this
Section. Any such loan shall be secured by such Qualified Participant's
vested interest in his Account balance; provided however, such security
interest may not exceed one-half of such Account balance immediately
after the origination of each loan hereunder. In addition, any loan
originated, renewed or modified hereunder with respect to a Qualified
Participant who is an Employee shall be repaid by payroll deduction
pursuant to a substantially level amortization schedule as provided in
the Standards issued by the Committee (with payments not less frequently
than quarterly) over the term of the loan. Any such loan issued
hereunder to a Qualified Participant who is not an Employee shall be
repaid pursuant to a monthly invoice issued by the Committee requiring
payment by the Qualified Participant within 30 days of the Qualified
Participant's receipt of the monthly invoice and in accordance with a
substantially level amortization schedule as provided in the Standards
issued by the Committee (with payments not less frequently than
quarterly) over the term of the loan. No loan shall have a maturity
date in excess of five (5) years, unless the loan is used to acquire any
dwelling unit which within a reasonable time is to be used (determined
at the time the loan is made) as a principal residence of the
Participant.
Any loan may be prepaid without penalty, if the Qualified
Participant repays the full amount of the loan, plus all interest
accrued and unpaid thereon; provided, however, partial payments on a
loan may be permitted by the Committee in the nondiscriminatory exercise
of its discretion pursuant to rules established by the Committee which
are applicable to similarly situated Qualified Participants.
Notwithstanding any other provision to the contrary, (i) no loan
shall be made to any Qualified Participant who is or was either an
"owner employee" or is a "shareholder employee" of any Employer that is
an S corporation within the meaning of such terms under Section 4975(d)
of the Code, (ii) no Qualified Participant shall be entitled to a loan
from the Trust Fund if the amount of the loan is less than $1,000,
except in the case of a loan for the purpose of paying amounts demanded
in connection with any bankruptcy, insolvency or similar proceeding
described in Section 6.8(a), in which event, no minimum loan amount
shall apply, and (iii) to the extent applicable, no Qualified
Participant shall be entitled to a loan from the Trust Fund if the
making of the loan would
VI-24
<PAGE> 92
interfere with the orderly management of the Plan for the benefit of all
the Qualified Participants or otherwise contravene any applicable law or
regulation.
(d) After May 31, 1992, any loan or loans to a Qualified
Participant hereunder shall not be made as an investment of the Trust
Fund but instead shall be considered to be an earmarked investment of
the Qualified Participant's Account. A subaccount shall be established
for the Qualified Participant and shall be maintained until the loan or
loans are repaid in full. Such loan or loans shall be the only
investment of such subaccount and thus such subaccount shall not be
taken into account for purposes of determining or allocating income,
gains or losses of any commingled portion of the Trust Fund and all
costs, charges, fees or expenses in connection with acquisition and
disposition of such investment of the subaccount shall be charged
directly to such subaccount; provided however, such subaccount shall not
be charged with any portion of comparable costs, charges, fees or
expenses incurred on behalf of Accounts which are part of the commingled
portion of the Trust Fund.
(e) The Committee shall, in accordance with its established
Standards, review and approve or disapprove completed application forms
as soon as practicable after its receipt thereof, and shall promptly
notify the applying Qualified Participant of the disposition of his
application form. The Committee shall have the authority to delegate
the power to review and approve or disapprove loans under this Section
to such agents or committees composed of persons appointed by the
Committee as the Committee shall deem proper, provided that any such
agents or committees shall act only in accordance with the Standards
established by the Committee pursuant to this Section. If the Trustee,
in its sole discretion, determines that it is not reasonably and
prudently able, in the interest of Qualified Participants, to liquidate
the necessary amount from any funds that may have been established under
Section 4.10, the Trustee shall notify the Committee, and the amount to
be paid to each Qualified Participant whose completed application form
designated that a loan be made from such fund shall be reduced in
proportion to the ratio which the aggregate amount, if any, that the
Trustee has advised the Committee may prudently be liquidated bears to
the aggregate amount which all such Qualified Participants designated to
be paid from such fund.
(f) Subject to subsection (e), the Committee, upon approval of
a completed application, shall direct the Trustee to convert all or any
part of the Qualified Participant's interest in the Trust Fund, or in
each affected fund which may have been established pursuant to Section
4.10, in the aggregate amount necessary to make payment of the loan
proceeds from the Trust Fund, or each such fund as may have been
established pursuant to Section 4.10, to the extent designated in the
completed application form, and shall direct the Trustee to transfer
cash to the Qualified Participant in such aggregate amount. The
Committee shall maintain sufficient records to permit an accurate
crediting of repayments of the loan in accordance with Subsection (j) of
this Section.
VI-25
<PAGE> 93
(g) The unpaid balance owed by a Qualified Participant on a
loan under the Plan shall not reduce the amount credited to his Account
under the Plan. However, from the time of payment of the proceeds of
the loan to the Qualified Participant, his Account balance shall be
deemed invested, to the extent of such unpaid loan balance, in such loan
until the complete repayment thereof or distribution from such Account.
At the time a loan is made, the amount loaned shall
(i) first be deemed an investment of, and allocated to,
the Qualified Participant's Employer Nonforfeitable
Contributions Account to the extent that amounts
allocated thereto are not already allocated to a
loan, assuming that such loan is derived first from
Elective Contributions and any income and
increments thereon; next, from any Profit Sharing
Contributions and any income and increments
thereon; and lastly, from any Qualified Non-
Elective Contributions and any earnings and
increments thereon; and
(ii) to the extent that such loan is in excess of such
amounts, it shall then be deemed an investment of,
and allocated to, the remaining vested portion of
the Qualified Participant's Employer Account to the
extent that amounts allocated thereto are not
already allocated to a loan; assuming that such
loan is derived first from any Matching
Contributions and any income and increments
thereon, and next from the investment of amounts
attributable to any predecessor Profit Sharing and
Savings Plan Contributions and any income and
increments thereon; and
(iii) to the extent that such loan is in excess of such
amounts, it shall then be deemed an investment of,
and allocated to, the Qualified Participant's
Rollover Account, if any, to the extent that
amounts allocated thereto are not already allocated
to a loan; and
(iv) to the extent that such loan is in excess of such
amounts, it shall then be deemed an investment of,
and allocated to the Qualified Participant's
Employee Account to the extent that amounts
allocated thereto are not already allocated to a
loan.
(h) Except in the event of application of a Qualified
Participant's Account balance to repayment of a loan in the event of a
default in accordance with subsection (k) of this Section, no withdrawal
may be made by a Qualified Participant under this Article VI of any
amount deemed invested in the outstanding balance of any loan made
pursuant to this Section.
(i) The amount of any distribution otherwise payable to a
Qualified Participant shall be reduced by the amount owed (including any
accrued interest) on all loans of the
VI-26
<PAGE> 94
Qualified Participant at the time of such distribution. The Trustee
shall apply the pledged portion of the Qualified Participant's Account
to be distributed or paid toward the liquidation of the Qualified
Participant's indebtedness to the Plan and the Trust Fund. Such
reduction shall constitute a complete discharge of all liability to the
Plan and the Trust Fund for the loan to the extent of such reduction.
(j) Repayment of all loans under the Plan shall be secured by
the Qualified Participant's vested Account balance in accordance with
applicable provisions of subsection (c) of this Section; provided,
however, that repayment shall be secured by the Qualified Participant's
vested interest in his Account only for such time, and to the extent
that, a portion of such loan is allocated to such Account. Any loan
repayment shall first be credited as soon as practicable to the
Qualifying Participant's segregated subaccount and to that portion of
the loan allocated to the Qualified Participant's individual accounts in
the same order of priority as described in subsection (g) of this
Section. Such credited amounts shall be transferred as soon as
practicable following receipt thereof to the individual accounts of the
Qualified Participant from which the assets were released upon
establishment of the segregated subaccount, and shall thereafter be
invested as part of the Trust Fund. A Qualified Participant may prepay
his loan at any time, without penalty, provided that he pays the full
amount of the loan, plus all interest accrued and unpaid thereon.
If, at any time prior to the full repayment of a loan to a
Participant under the Plan, the Participant should cease to be a
Participant by reason of his termination of employment for any reason,
or the Plan should terminate, the unpaid balance owed by the Participant
on the loan and all accrued but unpaid interest shall be due and payable
immediately. If the Qualified Participant should cease to be an
Employee for any reason, but no distribution is made under the Plan with
respect to such Qualified Participant, or if the loan is to a Qualified
Participant who is a former Employee or a Beneficiary, and no
distribution is made under the Plan with respect to such Qualified
Participant, such Qualified Participant may make all repayments due on
outstanding loans of such Qualified Participant by personal check or
money order in accordance with the Qualified Participant's repayment
schedule. Pursuant to applicable provisions of subsection (c), such
repayment shall be made within 30 days of receipt of a monthly invoice.
(k) In the event of failure to make any payment of principal
or interest under a loan when due, the loan shall be in default
("Default") and all the unpaid balance owed by the Qualified Participant
and all accrued but unpaid interest shall be due and payable
immediately. Following a Default, the Committee and the Trustee may
apply any pledged portion of the vested Account balance of the Qualified
Participant to pay the loan, in whole or in part, and take any other
action or remedy as allowed by law, provided that no application of a
Qualified Participant's vested Account balance shall occur prior to the
time such vested Account balance is otherwise distributable under the
terms of the Plan, except as permitted by the Code and the Act. The
amount of any withdrawal or distribution from the vested Account balance
of a Qualified Participant or
VI-27
<PAGE> 95
Beneficiary following a Default shall then be reduced by the amount of
any loan in Default and such amount shall be applied to the unpaid loan
balance and any accrued but unpaid interest thereon.
6.11 Distributions to Divorced Spouse: Subject to the provisions of
Section 12.3 which pertain to qualified domestic relations orders ("QDRO") and
pursuant to the qualified domestic relations order procedures of the Plan, in
the event that the Committee receives a domestic relations order that it
determines to be a valid QDRO, and if such QDRO provides that distribution of
vested benefits to an alternate payee described therein is not to commence or
be made immediately, but the QDRO provides for the apportionment of such
benefits to be made immediately, the Committee shall establish a separate
account under the Plan for the alternate payee. Subject to Section 12.3 and
the qualified domestic relations order procedures of the Plan, if the Committee
receives a domestic relations order that it determines to be a valid QDRO, and
if the QDRO provides that distribution of vested benefits to an alternative
payee described therein is to commence or to be made immediately, then the
Committee shall direct the Trustee to effect distribution to the alternate
payee who, for the purpose of effecting such distribution, shall be considered
and treated as any other Participant who is entitled to receive the benefit
payable under the Plan.
If any such distribution is made at a time when the Participant is not
fully vested in the Participant's Employer Account and the Participant can
increase his or her vested percentage in such Employer Account, the
Participant's vested interest in his Employer Account shall be determined by
the following formula: X = P(AB + D)-D. For purposes of applying the formula:
P is the vested percentage at the relevant time; AB is an Employer Account
balance at the relevant time; and D is the amount of the distribution. For
purposes of allocating appreciation or depreciation of the Trust Fund and
income or loss of the Trust Fund, such distribution shall be subtracted from
the Participant's Account balance at the beginning of the Plan Year in which
the distribution is made.
Notwithstanding the provisions of the preceding paragraph, the Committee
shall comply with the terms and provisions of any order which requires
distribution to an alternate payee prior to the affected Participant's
"earliest retirement age," as such term is defined in Section 206(d)(3)(E)(ii)
of the Act and Section 414(p)(4)(B) of the Code, if the order would have been
determined to be a valid QDRO if the order had required distribution at or
after the Participant's "earliest retirement date."
VI-28
<PAGE> 96
ARTICLE VII
TOP-HEAVY PLAN PROVISIONS
Capitalized terms used in this Article VII which are not otherwise
defined in Article I of the Plan are defined in Section 7.4.
7.1 General Rules for Determining Top-Heavy Status: In order to
determine whether the Plan is Top-Heavy for a Plan Year, it is necessary to
determine (i) whether an Employer must be aggregated with other employers which
will be treated as a single employer, (ii) what the Determination Date is for
the Plan Year, (iii) which Employees or former Employees or other individuals
who perform or performed services as owners or employees of any Affiliated
Employer which is not an Employer (whether or not Qualified Plan participants)
are, or formerly were, Key Employees, (iv) which former Employees or other
individuals who performed services as owners or employees of any Affiliated
Employer which is not an Employer (whether or not Qualified Plan participants)
have not performed any service for an Employer (or any Affiliated Employer
which is not an Employer) at any time during the five-year period ending on the
Determination Date, (v) if, at any time during the five-year period ending on
the Determination Date, an Employer and the Affiliated Employers maintain or
maintained Qualified Plans (whether or not terminated) in addition to the Plan,
which Qualified Plans (including the Plan) are required or permitted to be
aggregated to determine Top-Heavy status and (vi) the present value of accrued
benefits (including distributions made during the plan year of the Qualified
Plan(s) and the four preceding plan years of the Qualified Plan(s)) of Key
Employees, former Key Employees and non-Key Employees. For this purpose, an
Employer and all Affiliated Employers must be treated as one employer and the
Employees or former Employees or other individuals who perform or performed
services as owners or employees of any Affiliated Employer which is not an
Employer (whether or not participants in all Qualified Plans maintained by an
Employer and the Affiliated Employers) must be categorized as Key Employees,
former Key Employees or non-Key Employees. Former Key Employees are non-Key
Employees and are excluded entirely from the calculation used to determine if a
plan or aggregation group of plans is Top-Heavy.
The accrued benefit of any individual who has not performed any services
for an Employer or any Affiliated Employer at any time during the five-year
period ending on the Determination Date shall be excluded from the calculation
used to determine if the plan or aggregation group of plans is Top-Heavy. In
addition, incident to testing whether any such Plan or group of plans is Top-
Heavy, an individual's present value of accrued benefits is used only once.
All Qualified Plans (of an Employer and the Affiliated Employers) in which a
Key Employee participates, and certain other Qualified Plans, must be
aggregated to form the Required Aggregation Group. Other Qualified Plans may
be aggregated with the Required Aggregation Group to form a Permissive
Aggregation Group. Once aggregated, all Qualified Plans that are required to
be aggregated will be Top-Heavy Plans only if the aggregation group is Top-
Heavy. No Qualified Plan in the Required Aggregation Group will be Top-Heavy
if the Required Aggregation Group is not Top-Heavy. If a Permissive
Aggregation Group is Top-
VII-1
<PAGE> 97
Heavy, only those Qualified Plans which are part of the Required Aggregation
Group shall be treated as Top-Heavy Plans subject to the provisions of this
Article VII.
7.2 Computation of Present Value of Accrued Benefits:
(a) Defined Contribution Plan(s): The present value of
accrued benefits as of the Determination Date for any individual who is
a participant in a Qualified Plan which is (or is treated as) a defined
contribution plan is the sum of (i) the account balance as of the most
recent Valuation Date occurring within a 12-month period ending on the
Determination Date, and (ii) an adjustment for contributions due as of
the Determination Date. In the case of such a Qualified Plan not
subject to the minimum funding requirements of Section 412 of the Code,
the adjustment in (ii) is generally the amount of any contributions
actually made after the Valuation Date but on or before the
Determination Date. However, in the first plan year of the Qualified
Plan, the adjustment in (ii) should also reflect the amount of any
contributions made after the Determination Date that are allocated as of
a date in that first plan year of the plan. In the case of a Qualified
Plan that is a defined contribution plan and is subject to the minimum
funding requirements, the account balance in (i) should include
contributions that would be allocated as of a date not later than the
Determination Date, even though those amounts are not yet required to be
contributed. Thus, the account balance will include contributions
waived in prior years as reflected in the adjusted account balance and
contributions not paid that resulted in a funding deficiency. The
adjusted account balance is described in Rev. Rul. 78-223, 1978-1 C.B.
125. Also, the adjustment in (ii) should reflect the amount of any
contribution actually made (or due to be made) after the Valuation Date
but before the expiration of the extended payment period in Section
412(c)(10) of the Code. The account balance of any individual who has
not performed services for an Employer at any time during the 5-year
period ending on the Determination Date shall be disregarded.
(b) Defined Benefit Plans: The present value of an accrued
benefit under a Qualified Plan that is a defined benefit plan as of the
Determination Date must be determined as of the most recent Valuation
Date which is within a 12-month period ending on the Determination Date.
In the first plan year of a plan, the accrued benefit for a current
participant must be determined either (i) as if the individual
terminated service as of the Determination Date (i.e., the last day of
plan year of the plan) or, (ii) as if the individual terminated service
as of the Valuation Date, but taking into account the estimated accrued
benefit as of the Determination Date. However, for any other year, the
accrued benefit for a current participant must be determined as if the
individual terminated service as of such Valuation Date. For this
purpose, the Valuation Date must be the same Valuation Date used for
computing plan costs for minimum funding, regardless of whether a
valuation is performed that year. For purposes of this paragraph,
present value shall be determined with reference to the interest rate
and mortality table used to determine Actuarial Equivalent optional
benefits under the defined benefit plan. The accrued benefit of a
Participant (other than a Key Employee) shall be determined
VII-2
<PAGE> 98
(i) under the method which is used for accrual purposes for all plans of
an Employer or (ii) or if there is no method described in clause (i), as
if such benefit occurred not more rapidly than the slowest accrual rate
permitted under Section 411(b)(1)(c) of the Code. The accrued benefit
of any individual who has not performed services for an Employer at any
time during the 5-year period ending on the Determination Date shall be
disregarded.
(c) Employee Contributions: For purposes of determining the
present value of accrued benefits in either a defined benefit or defined
contribution plan, the accrued benefits attributable to employee
contributions are considered to be part of the accrued benefits whether
such contributions are mandatory or voluntary. However, the amounts
attributable to deductible employee contributions are not considered to
be part of the accrued benefits.
(d) Distributions: For purposes of determining the present
value of accrued benefits, distributions made within the plan year of
the Qualified Plan that includes the Determination Date or within the
four preceding plan years of such plan are added to the present value of
accrued benefits in testing for topheaviness. However, in the case of
distributions made after the Valuation Date and prior to the
Determination Date, such distributions are not included as distributions
in Section 416(g)(3)(A) of the Code to the extent that such
distributions are included in the present value of the accrued benefits
as of the Valuation Date. In the case of the distribution of an annuity
contract, the amount of such distribution is deemed to be the current
actuarial value of the contract, determined on the date of the
distribution. Benefits paid on account of death are treated as
distributions hereunder to the extent such benefits do not exceed the
present value of accrued benefits immediately prior to death.
(e) Rollover Contributions and Plan-to-Plan Transfers: With
respect to proper treatment of rollover contributions and plan-to-plan
transfers incident to determining the present value of accrued benefits,
it must first be determined whether the rollovers and plan-to-plan
transfers are unrelated (both initiated by the employee and made from a
plan maintained by one employer to a plan maintained by another
employer) or whether they are related (a rollover either not initiated
by the employee or made to a plan maintained by the same employer). For
purposes of determining whether the employer is the same employer, all
employers aggregated under Section 414(b), (c), (m) or (o) of the Code
are treated as the same employer. Thus, an Employer and all Affiliated
Employers are to be treated as a single employer. In the case of
unrelated rollovers, (i) the plan providing the distributions shall
count the distribution as a distribution under Section 416(g)(3)(B) of
the Code and (ii) the plan accepting the rollover shall not consider the
rollover part of the accrued benefit if such rollover was accepted after
December 31, 1983, but must consider it part of the accrued benefit if
such rollover was accepted prior to January 1, 1984. In the case of
related rollovers, the plan providing the rollover shall not count the
rollover as a distribution under Section 416(g)(3)(B) of the Code and
the plan accepting the rollover counts the rollover in the present value
of the accrued benefits. The
VII-3
<PAGE> 99
provisions of this Section 7.2 shall not apply to direct rollovers
described in Section 6.6(b).
7.3 Special Rules for Plan Years that Plan is Top-Heavy:
Notwithstanding any other provision of the Plan and Trust to the contrary, if
the Plan is Top-Heavy for any Plan Year, then the following provisions shall be
applicable and shall supersede and override any conflicting provision of the
Plan for such Plan Year:
(a) Vesting: Vesting of accrued benefits (described in
Section 411(a)(7) of the Code, except those attributable to any Employee
Voluntary Contributions, including benefits accrued before the effective
date of Section 416 of the Code and benefits accrued before the Plan
became Top-Heavy) under the Plan shall be determined in accordance with
the vesting table set out in Section 6.4.
(b) Top-Heavy Compensation: Considered Compensation and Top-
Heavy Compensation for any one Participant for such Plan Year in excess
of (i) for Plan Years beginning on or after January 1, 1991,
$200,000.00; and (ii) for Plan Years beginning on or after January 1,
1994, $150,000, as both of such dollar amounts are adjusted at such time
and in such manner as is prescribed in Section 401(a)(17)(B) of the
Code, shall be disregarded for any Plan Year in which the Plan is Top-
Heavy.
(c) Minimum Allocations: Subject to the following provisions
hereof, for any Plan Year in which the Plan is Top-Heavy, each
Participant shall receive an allocation of an Employer Contribution and
forfeitures, if any, for the Plan Year in an amount equal to the lesser
of (i) three percent (3%) of the Participants' Top-Heavy Compensation and
(ii) the largest percentage of Top-Heavy Compensation provided on behalf
of any Key Employee. The minimum allocation shall be made without regard
to any contribution to Social Security. To the extent permitted under
applicable law or other authority issued thereunder by the appropriate
governmental authority, in determining whether an allocation of Employer
Contributions equal to the required percentage of Top-Heavy Compensation
meets the requirements of this Section, all benefits allocated under
defined contribution plans required to be aggregated under Section 7.1
shall be considered benefits allocated under the Plan, and any Employer
Contribution attributable to a salary reduction or similar arrangement
shall be taken into account. Accordingly, for the purpose of clarity and
without limiting the scope of the immediately preceding sentence, (i) any
elective deferral (described in Section 402(g)(3) of the Code) under the
Plan or any plan described in the immediately preceding sentence on
behalf of any Participant who is not a key Employee shall not be treated
as an Employer Contribution for purposes of this Section, but will be
treated as an Employer Contribution for purposes of determining the
percentage at which Contributions are made for the Key Employee with the
highest percentage; (ii) qualified nonelective contributions (described
in Section 401(m)(4)(C) of the Code) under the Plan or any plan described
in the immediately preceding sentence on behalf of any Participant shall
be treated as an Employer Contribution for purposes of this Section; and
(iii) any matching contribution (described
VII-4
<PAGE> 100
in Section 401(m)(4)(A) of the Code) under the Plan or any plan described
in the immediately preceding sentence on behalf of any Participant who is
not a Key Employee shall not be treated as an Employer Contribution for
purposes of this Section to the extent such matching contribution is
treated as an elective deferral for purposes of satisfying the actual
deferral percentage test of Section 401(k)(3) of the Code or a matching
contribution for purposes of satisfying the actual contribution
percentage of Section 401(m)(2) of the Code.
Notwithstanding the preceding paragraph, in the event that an
Employee is a Participant of the Plan and another Qualified Plan which
is a defined benefit plan maintained by an Employer and/or any
Affiliated Employer, such Employee shall not receive both the minimum
benefit provided hereunder and the minimum benefit provided under the
defined benefit plan on account of such plans being Top-Heavy. Instead,
the aggregate minimum benefit requirement for any Employee who is a
Participant under the Plan, and any defined benefit plan described in
the preceding sentence, shall be provided under the defined benefit
plan, which defined benefit minimum shall be offset by the value of the
Participant's vested and nonforfeitable interest in his accrued benefit
derived from Employer Contributions under the Plan. If the defined
benefit minimum will be paid in the form of an annuity, the offset shall
be effected by converting the Participant's vested accrued benefit
derived from Employer Contributions under the Plan into an annuity
(payable in the same form and commencing at the same time as the defined
benefit minimum) which can be provided by the Participant's vested
accrued benefit derived from Employer Contributions using the interest
rate and mortality table for immediate annuities published by the
Pension Benefit Guaranty Corporation as in effect on the date the
defined benefit minimum is to commence. If the defined benefit minimum
is paid in the form of a lump sum, the lump sum value of the
Participant's accrued benefit derived from Employer Contributions under
the Plan shall be offset against the single sum value of the defined
benefit minimum calculated in accordance with the applicable provisions
of the defined benefit plan. For purposes of this Section, a
Participant's accrued benefit derived from Employer Contributions shall
include any prior withdrawals or distributions attributable thereto.
(d) Special Rules: For any Plan Year that the Plan is (i)
Top-Heavy and the additional minimum benefit described in Section 416(h)
of the Code is not provided or (ii) Super Top-Heavy, the limitations of
Section 4.3(d)(iv) and (v) shall be applied by substituting "100
percent" for "125 percent" wherever it appears therein. Such
substitution shall not cause a reduction in any account balances
attributable to Contributions for a Plan Year prior to the Plan Year in
which the Plan is Top-Heavy or Super Top-Heavy.
7.4 Definitions: For purposes of this Article VII, the following
terms shall be defined as follows:
VII-5
<PAGE> 101
(a) Affiliated Employer: "Affiliated Employer" shall mean the
Affiliated Employer described in Article I of the Plan.
(b) Determination Date: "Determination Date" shall mean with
respect to a single Qualified Plan, (i) the last day of the preceding
plan year of the Qualified Plan, or (ii) in the case of the first plan
year of the Qualified Plan, the last day of such plan year. When
aggregating Qualified Plans, the value of accrued benefits will be
calculated with reference to the Determination Dates that fall within
the same calendar year.
(c) Employee: "Employee" shall mean the Employee described
in Article I of the Plan.
(d) Employer: "Employer" shall mean an Employer described in
Article I of the Plan.
(e) Key Employee: "Key Employee" shall mean with respect to
any Qualified Plan, any Employee or former Employee (or any other person
(i) who is or was employed by any Affiliated Employer or (ii) who owns
or owned any interest in any Affiliated Employer and who derives or
derived earned income from such Affiliated Employer or would have
derived earned income had such Affiliated Employer had net profits),
including any beneficiary described below, who, at any time during the
Qualified Plan's plan year containing the Determination Date or any of
the four (4) preceding plan years of such Qualified Plan, is:
(i) An officer of any Employer or any Affiliated
Employer treated separately, if such individual earns annual
compensation for a plan year (for services rendered to an
Employer and any Affiliated Employer during the relevant plan
year of the Qualified Plan) greater than fifty percent (50%) of
the amount in effect under Section 415(b)(1)(A) of the Code as in
effect for the calendar year in which such plan year ends (one
hundred fifty percent (150%) of the maximum dollar limitation set
forth under Section 415(c)(1)(A) of the Code as in effect for the
calendar year in which such plan year ends); provided, however,
subject to the last paragraph of this Section 7.4(e), no more
than fifty (50) individuals who are or were Employees of an
Employer and/or employees of an Affiliated Employer or, if less,
the greater of three (3) individuals who are Employees of an
Employer and/or employees of an Affiliated Employer or ten
percent (10%) of all such individuals, shall be considered Key
Employees by reason of being officers;
(ii) One of the ten (10) individuals owning (or
considered as owning within the meaning of Section 318 of the
Code) both more than a 1/2 percent interest and the largest
interests in an Employer or any Affiliated Employer, treated
separately, if such individual earns annual
VII-6
<PAGE> 102
compensation for a plan year (for services rendered to an
Employer and any Affiliated Employer during the relevant plan
year of the Qualified Plan) more than the maximum dollar
limitation set forth under Section 415(c)(1)(A) of the Code as in
effect for the calendar year in which such plan year ends;
provided, however, if two such individuals have the same interest
in an Employer or Affiliated Employer, treated separately, the
individual earning the greater compensation (for purposes of this
Section 7.4(e)(ii)) shall be treated as having a larger interest;
(iii) Any individual owning (or considered as owning
within the meaning of Section 318 of the Code) more than five
percent (5%) of the outstanding stock of any corporate Employer
or any corporate Affiliated Employer treated separately, or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of any corporate Employer or any
corporate Affiliated Employer, treated separately, or, if an
Employer or Affiliated Employer is not a corporation, any
individual owning more than five percent (5%) of the capital or
profits interest of such Employer, or Affiliated Employer treated
separately; or
(iv) Any individual whose aggregate annual compensation
for a plan year (for services rendered to an Employer and any
Affiliated Employer during the relevant plan year of the
Qualified Plan) is more than $150,000.00 and who would be
described in Section 7.4(e)(iii) if one percent (1%) were
substituted for five percent (5%) therein.
Any Beneficiary of an Employee who is a Key Employee or a former
Key Employee and any Beneficiary of any other individual described above
who is a Key Employee or former Key Employee shall be treated as a Key
Employee or former Key Employee, whichever is applicable. Similarly,
any Beneficiary of an Employee who is a former non-Key Employee and any
Beneficiary of any other individual described above who is a former non-
Key Employee shall be treated as a former non-Key Employee.
For purposes of applying Section 318 of the Code to the
provisions of this Section, subparagraph (C) of Section 318(a)(2) of the
Code shall be applied by substituting five percent (5%) for fifty
percent (50%). For purposes of this Section, annual compensation for
the plan year of the Qualified Plan shall include all remuneration
described in Treasury Regulation Section 1.415-2(d) and any successor
thereto, but including amounts contributed by an Employer or Affiliated
Employer pursuant to a salary reduction agreement which are excludible
from the individual's gross income under Section 125, Section 402(a)(8),
Section 402(h) or Section 403(b) of the Code.
In the event that the number of Key Employees determined under
Subsection (e)(i) of this Section would, but for the numerical limitations of
that Subsection, exceed the number determined under that Subsection, then those
officers having the largest annual compensation
VII-7
<PAGE> 103
during the plan year of the Qualified Plan and the four (4) preceding plan
years of such Qualified Plan shall be the Key Employees. Such term shall not
include any officer or employee of an entity referred to in Section 414(d) of
the Code. Notwithstanding any provision hereof to the contrary, determination
of who is a Key Employee shall be made in accordance with Section 416(i)(1) of
the Code and the regulations thereunder.
(f) Participant: "Participant" shall mean any Participant
described in Article I of the Plan except that if the Plan is Top-Heavy,
in addition to Employees who would otherwise be considered to be
Participants under the Plan, the following Employees shall be considered
to be Participants solely for purposes of determining the individuals
entitled to share in the minimum benefit described in Section 7.3(c):
(i) Participants who have not separated from service at the end of the
Plan Year, (ii) individuals who are otherwise eligible to participate in
the Plan but who have failed to complete 1000 hours of service (or the
equivalent) during the Plan Year, (iii) individuals who are otherwise
eligible to participate in the Plan but who declined to make any
required Contributions to the Plan or, in the case of a cash or deferred
arrangement, any elective contributions permitted or required under the
Plan, or (iv) individuals who are eligible to participate in the Plan
but who have been excluded from the Plan because each such individual's
Considered Compensation is less than a stated amount.
(g) Permissive Aggregation Group: "Permissive Aggregation
Group" shall mean a Required Aggregation Group plus one or more
Qualified Plans which are not part of the Required Aggregation Group but
which satisfy the requirements of Section 401(a)(4) and 410 when
considered together with the Required Aggregation Group.
(h) Qualified Plan: "Qualified Plan" shall mean the Plan and
any other defined contribution plan (whether or not terminated)
described in Section 414(i) of the Code and/or any defined benefit plan
(whether or not terminated) described in Section 414(j) of the Code
which is/are (or with respect to any such plan which has been
terminated, was/were) maintained at any time during the five-year period
ending on the Determination Date by an Employer and/or the Affiliated
Employers and intended to meet the requirements of Section 401(a) of the
Code; provided, however, a simplified employee pension plan described in
Section 408(k) of the Code shall be treated as a defined contribution
plan.
(i) Required Aggregation Group: "Required Aggregation Group"
shall mean a group of Qualified Plans, which group shall include each
Qualified Plan maintained by an Employer and/or the Affiliated Employers
in which a Key Employee participates in the relevant plan year including
the Determination Date, or any of the four preceding plan years, and
which group shall exclude any Qualified Plan in which a Key Employee
does not participate at any time during the plan year, or any of the
four preceding plan years, unless during such period such Qualified Plan
enables any Qualified Plan in which a Key Employee participates to meet
the requirements of Sections 401(a)(4) or 410 of the Code.
VII-8
<PAGE> 104
(j) Super Top-Heavy: "Super Top-Heavy" shall mean Top-Heavy
except for purposes of this Section 7.4(j), "ninety percent (90%)" shall
be substituted for "sixty percent (60%)" wherever the latter percent
appears in Section 7.4(k).
(k) Top-Heavy: "Top-Heavy" shall mean with respect to any
Qualified Plan, which is not included in any aggregation group, any such
Qualified Plan whereunder, as of the Determination Date, the sum of the
present value of the accrued benefits for Key Employees is more than
sixty percent (60%) of the sum of the present value of the accrued
benefits of all Employees of an Employer plus, if applicable, all
employees (and self-employed individuals) of all Affiliated Employers,
excluding former Key Employees, and shall mean with respect to any
aggregation group, Required Aggregation Group or Permissive Aggregation
Group, whereunder as of the Determination Date, the sum of the present
value of the accrued benefits for Key Employees is more than sixty
percent (60%) of the sum of the present value of accrued benefits of all
Employees of an Employer plus all employees (and self-employed
individuals) of all Affiliated Employers, excluding former Key
Employees. For purposes of this Section 7.4(k), the accrued benefit of
any individual who is not a Key Employee, but who is a former Key
Employee will be disregarded, and, with respect to Plan Years beginning
after December 31, 1984, the accrued benefit of any individual described
in this Section 7.4(k) who has not performed any service for an Employer
and any Affiliated Employer(s) maintaining any Qualified Plan at any
time during the five-year period ending on the Determination Date shall
be disregarded. In addition, when aggregating Qualified Plans, the
value of accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
(l) Top-Heavy Compensation: "Top-Heavy Compensation" shall
mean (i) the wages (as defined in Section 3401(a) of the Code for
purposes of income tax withholding at the source) that are paid (within
the meaning of Section 1.415-2(d)(3) and (4) of the Income Tax
Regulations) to the Employee by an Employer during the Plan Year for
services performed and reportable on the Employee's form W-2 (or its
successor), determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code), plus, any
reduction under a compensation deferral agreement under (a) a plan
described in Section 401(k) or 408(k) of the Code, (b) an annuity
described in Section 403(b) of the Code or (c) an election under a
cafeteria plan described in Section 125 of the Code, (ii) that is
actually paid to or is includible in the gross income of the Participant
within the relevant Plan Year, or would have been so paid or includible
but for a reduction described in clause (i) immediately above, and (iii)
that does not exceed (A) for Plan Years beginning on or after January 1,
1991, $200,000; and (B) for Plan Years beginning on or after January 1,
1994, $150,000, as both of such amounts are adjusted at such time and in
such manner as is prescribed in Section 401(a)(17)(B) of the Code.
VII-9
<PAGE> 105
ARTICLE VIII
COMMITTEE
8.1 Appointment, Term of Service and Removal: The Board of the Plan
Sponsor shall appoint an Committee of not less than three (3) persons, the
members of which shall serve until their resignation, death or removal. Any
member of the Committee may resign at any time by mailing or delivering written
notice of such resignation to the Board. Any member of the Committee may be
removed by the Board, with or without cause, at any time by mailing or
delivering written notice to such person at the address set forth in the
records of an Employer. Vacancies in the Committee arising by resignation,
death, removal or otherwise shall be filled by such persons as may be appointed
by the Board.
8.2 Powers: The Committee shall be a fiduciary and shall, in that
capacity, have the exclusive responsibility for the general administration of
the Plan, according to its terms and provisions, and shall have all discretion
and power necessary to accomplish such purposes, including, but not by way of
limitation, the right, power, and authority:
(a) To make rules and regulations for the administration of
the Plan which are not inconsistent with the terms and provisions
hereof;
(b) To construe all terms, provisions, conditions, and
limitations of the Plan; and its construction thereof, shall be final
and conclusive on all persons or entities;
(c) To correct any defect, supply any omission, or
reconcile any inconsistency which may appear in the Plan in such manner
and to such extent as it shall deem necessary or appropriate, and its
judgment in such matters shall be final and conclusive as to all persons
or entities;
(d) To select, employ, and compensate from time to time such
consultants, actuaries, accountants, attorneys, and other agents and
employees as the Committee may deem necessary or advisable for the
proper and efficient administration of the Plan; any agent, firm or
employee so selected by the Committee may be a disqualified person or a
party in interest but only if the requirements of Section 4975(d) of the
Code and the regulations issued thereunder, and Section 408(b) of the
Act and the regulations issued thereunder, have been satisfied;
(e) To determine all questions relating to the eligibility of
Employees to become Participants, and to determine the period of Active
Service and the amount of Considered Compensation upon which the
benefits of each Participant shall be calculated;
(f) To determine all controversies relating to the
administration of the Plan, including but not limited to: (i)
differences of opinion arising between an Employer and the Trustee or a
Participant, or any combination thereof; and (ii) any questions it deems
VIII-1
<PAGE> 106
advisable to determine in order to promote the non-discriminatory
administration of the Plan for the benefit of the Participants and
Beneficiaries;
(g) Subject to portfolio standards and guidelines which may be
established by the Trustee from time to time, to direct and instruct (or
to appoint an investment manager which would have the power to direct
and instruct) the Trustee in all matters relating to the preservation,
investment, reinvestment, management and disposition of the Trust Fund;
provided, however that the Committee shall not have any authority to
direct the Trustee with respect to preservation, investment,
reinvestment or disposition of common stock of the Plan Sponsor;
(h) To direct and instruct the Trustee in all matters relating
to the payment of Plan benefits and to determine the entitlement of a
Participant or Beneficiary to a benefit should he appeal a denial of his
claim, or any portion thereof;
(i) If, incident to a divestiture or other reorganization of
any Employer, a Participant who is a former Employee of such Employer
requests in writing and if the Committee has satisfied itself that the
employer representations herein described are true and correct, to
direct the Trustee to transfer such Participant's vested interest, if
any, in the Plan directly to the trustee of the trust used to fund any
other plan which is maintained by such Participant's new employer and
which is represented in writing by such employer (i) to satisfy the
requirements for qualification and exemption under Sections 401(a) and
501(a) of the Code and (ii) to expressly permit such transfer to be made
thereto;
(j) With the consent or ratification of the Board, to direct
the Trustee to enter into any agreement that the Committee deems to be
necessary or appropriate to effect any transaction described in Section
8.2(i), 8.2(j) or 11.7;
(k) To delegate by written notice such clerical and
recordation duties of the Committee under the Plan as the Committee may
deem necessary or advisable for the proper and efficient administration
of the Plan or the Trust;
(l) To determine whether the requirements of Section 6.6(b)
have been satisfied and, if it so determines, to direct and instruct the
Trustees to effect the direct rollover of an eligible rollover
distribution (as defined in Section 6.6(c) hereof) to the trustee or
custodian of an eligible retirement plan, as elected by the distributee
of such eligible rollover distribution;
(m) To delegate the power to review applications for
withdrawals under Section 6.8(a) and to determine whether the
requirements of such section are satisfied, and in the event that the
Committee delegates such power, references in Section 6.8(a) to the
Committee, shall be deemed to be references to the person or persons to
whom such power has been delegated; and
VIII-2
<PAGE> 107
(n) To delegate the power to review, and approve or
disapprove, applications for loans hereunder in accordance with Section
6.10(e), and in the event that the Committee delegates such power,
references in Section 6.10(e) and (f) to the Committee shall be deemed
to be references to the person or persons to whom such power has been
delegated.
8.3 Organization: The Committee shall select from among its members
a chairman, who shall preside at all of its meetings, and shall select a
secretary, who need not be a member of the Committee and who shall keep all
records, documents and data pertaining to its supervision of the administration
of the Plan.
8.4 Quorum and Majority Action: A majority of the members of the
Committee constitutes a quorum for the transaction of business. The majority
vote of the members present at any meeting called by the chairman of the
Committee at which there is a quorum will decide any question brought before
that meeting. In addition, the Committee may decide any other question, which
is not brought before a meeting called by the chairman of the Committee, by a
majority vote taken of all of the members, or by a consent executed by a
majority of the members.
8.5 Signatures: The chairman, the secretary and any one or more of
the members of the Committee to which the Committee has delegated the power,
shall each, severally, have the power to execute any document on behalf of the
Committee, to execute any certificate or other written evidence of the action
of the Committee, and to delegate any authority or responsibility of the
Committee to an officer of an Employer. The Trustee, after being notified of
any such delegation of power in writing, shall thereafter accept and may rely
upon any document executed by any such person as representing the action of the
Committee until the Committee files with the Trustee a written revocation of
that delegation of power.
8.6 Disqualification of Committee Participant: A member of the
Committee who is also a Participant, Retired Participant or Beneficiary shall
not vote or act upon any matter relating solely to himself. With respect to
any other matter before the Committee, no member of the Committee shall be
deemed disqualified by reason of being a Participant, Retired Participant or
Beneficiary or by reason of any interest in any matter to be acted upon by the
Committee unless expressly so disqualified as to such matter by a resolution
adopted by the Board.
8.7 Disclosure to Participants: The Committee shall make available
to each Participant and Beneficiary for his examination such records, documents
and other data as are required under the Act, but only at reasonable times
during business hours. No Participant or Beneficiary shall have the right to
examine any data or records reflecting the compensation paid to any other
Participant or Beneficiary, and the Committee shall not be required to make any
other data or records available other than those required by the Act.
8.8 Standard of Performance: The Committee, and each of its members,
shall (i) use the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent
VIII-3
<PAGE> 108
man acting in a like capacity and familiar with such matters would use in
conducting his business as the administrator of the Plan; (ii) when exercising
its power to direct investments, diversify the investments of the Plan so as to
minimize the risk of large losses unless under the circumstances it is clearly
prudent not to do so; and (iii) otherwise act in accordance with the provisions
of the Plan and the Act.
The Committee shall exercise its responsibility and authority hereunder
in a uniform and non-discriminatory manner with respect to all Participants.
8.9 Liability of Committee and Liability Insurance: No member of the
Committee shall be liable for any act or omission of any other member of the
Committee, the Trustee, any investment manager appointed by the Committee, or
any other agent or representative appointed by the Committee, except to the
extent required by the Act, and any other applicable state or federal law,
which liability cannot be waived. No member of the Committee shall be liable
for any act or omission on his own part except to the extent required by the
Act, and any other applicable state or federal law, and then only if and to the
extent such liability cannot be waived. It is the express intent of the Plan
to waive any such liability to the fullest extent permitted by law.
Further, it is specifically provided that, if directed by the Committee,
the Trustee may purchase out of the Trust Fund insurance for the members of the
Committee, any other fiduciaries appointed by the Committee, and for the Trust
Fund itself, to cover liability or losses occurring by reason of the act or
omission of any one or more of the members of the Committee or any other
appointed fiduciary under the Plan or any other agents; provided, however, such
insurance permits recourse by the insurer against the members of the Committee
or the other concerned fiduciaries in the case of a breach of a fiduciary
obligation by one or more members of the Committee or other fiduciary covered
thereby.
8.10 Exemption from Bond: No member of the Committee shall be
required to give bond for the performance of his duties hereunder, unless
required by law which cannot be waived.
8.11 No Compensation: The Committee shall serve without compensation
for its services, but shall be reimbursed by the Employer(s) for all expenses
properly and actually incurred in the performance of its duties under the Plan,
unless the Employer(s) elects to have such expenses paid out of the Trust Fund.
Each Employer shall bear such portion of such expense as shall be determined by
the Committee based upon the approximate total amount in the Accounts of
Participants employed by it as compared to the approximate total amount in the
Accounts of all Participants.
8.12 Persons Serving in Dual Fiduciary Roles: Any person, group of
persons, corporation, firm or other entity, may serve in more than one
fiduciary capacity with respect to the Plan, including the ability to serve
both as Trustee and as a member of the Committee.
VIII-4
<PAGE> 109
8.13 Administrator: For all purposes of the Act, the Administrator of
the Plan shall be the Plan Sponsor. The Administrator of the Plan shall have
final responsibility for compliance with all reporting and disclosure
requirements imposed with respect to the Plan under any applicable federal or
state law, or under any regulations or other authority promulgated thereunder
by the appropriate governmental authority.
8.14 Indemnification of Participants of Committee. To the full extent
permitted by law, the Plan Sponsor and each other Employer, jointly and
severally, shall indemnify each present and future member of the Committee
against, and each member of the Committee shall be entitled without further act
on his part to indemnity from each Employer for, any and all losses,
liabilities, costs and expenses (including the amount of judgments, court
costs, reasonable attorney's fees, and the amount of approved settlements made
with a view to the curtailment of costs of litigation, other than amounts paid
to an Employer itself) incurred by such member in connection with or arising
out of any pending, threatened or anticipated possible action, suit, or other
proceeding, including any investigation that might lead to such a proceeding,
in which he is or may be involved by reason of or in connection with his being
or having been a member of the Committee, whether or not he continues to be a
member of the Committee at the time of incurring any such losses, liabilities,
costs and expenses; provided, however, that such indemnity shall not include
any losses, liabilities, costs and expenses incurred by such member of the
Committee (i) with respect to any matters as to which he is finally adjudged in
any such action, suit or proceeding to have been guilty of gross negligence or
willful and culpable misconduct in the performance of his duties as a member of
the Committee, or (ii) with respect to any matter to the extent that a
settlement thereof is effected in an amount in excess of the amount approved by
the Plan Sponsor (or by the affected Employer if not an Affiliated Employer),
which consent shall not be unreasonably withheld. No right of indemnification
hereunder shall be available to, or enforceable by, any such member of the
Committee unless, within sixty (60) days after his actual receipt of service of
process in any such action, suit or other proceeding (or such longer period as
may be approved by the Board), he shall have offered the Plan Sponsor (or
affected Employer if not an Affiliated Employer), in writing, the opportunity
to handle and defend same at its sole expense. The decision by the Plan
Sponsor or other affected Employer to handle the proceeding shall conclusively
determine that such person is entitled to the indemnity provided herein unless
then otherwise expressly agreed by the person. Until and unless a final
judicial determination has been made that indemnity is not applicable, all such
person's expenses shall be promptly and fully paid or reimbursed by the Plan
Sponsor and each other Employer upon demand by such person. The foregoing
right of indemnification shall inure to the benefit of the heirs, executors,
administrators and personal representatives of each such member of the
Committee and shall be in addition to all other rights to which such member of
the Committee may be entitled as a matter of law, contract, or otherwise.
VIII-5
<PAGE> 110
ARTICLE IX
TRUSTEE
9.1 Appointment: The office of the Trustee shall be composed of one
or more individuals, or one corporation which is authorized to conduct a trust
business under applicable state law, as appointed from time to time by the
Board. When there are individual trustees, action by the individual trustees
shall be determined by the majority vote of the individuals then acting taken
with or without a meeting. Such action shall be binding upon all parties at
interest. Any act of the individual trustee or trustees shall be sufficiently
evidenced if certified by the individual trustee or trustees, and, if there is
more than one individual trustee, one of the individual trustees may be given
the authority to certify such acts and, generally, to perform all
administrative and ministerial duties on behalf of the individual trustees. An
individual trustee otherwise eligible to participate in the Plan shall not be
excluded on the basis that he is an individual trustee, however, in such event,
he shall not participate in any decisions pertaining solely to himself as a
Participant or a Beneficiary.
9.2 Authority: The Trustee shall also be a fiduciary and, in that
capacity, shall have the exclusive responsibility for and all powers necessary
to receive, hold, preserve, manage, invest and reinvest the Trust Fund as
provided generally in this Article IX, and to pay all costs and expenses
incident thereto. However, if the Committee, as a co-fiduciary, or an
investment manager appointed by the Committee, shall exercise its power given
hereunder at any time, by written notice to the Trustee to direct the Trustee
(i) in the management, investment and reinvestment of the Trust Fund or (ii)
with respect to the transfer or acceptance of assets pursuant to Sections 1.1,
8.2(i), 8.2(j) or 11.7, then, in that event, the Trustee shall be subject to
all proper directions of the Committee or its appointed investment manager,
provided that such directions are made in accordance with the Plan and the Act.
9.3 Investment Powers: Subject to applicable provisions of Section
4.10, the Trustee shall have the following powers relating to the receipt,
preservation, management, investment and reinvestment of both the principal and
income of the Trust Fund, as it may be composed from time to time, in addition
to all of the powers, rights, options and privileges now or hereafter provided
for, vested in, or granted the Trustee under common law and applicable
provisions of the Texas Trust Code, as amended from time to time, and all other
applicable laws, except such as conflict with the terms and provisions of the
Plan; and, as far as possible, no subsequent legislation or regulation shall be
in limitation of the rights, powers or privileges granted the Trustee hereunder
or in the Texas Trust Code as it exists at the time of the execution of the
Plan and Trust;
(a) To handle, deal with, and dispose of the Trust Fund
property and estate as if the Trustee were the fee simple owner of such
property and estate;
(b) Except where prohibited by applicable law which cannot be
waived, to keep any and all securities or other property in the name of
some other person or entity,
IX-1
<PAGE> 111
with a power of attorney for their transfer attached, in bearer or
Federal Reserve Book-Entry form, or in the name of the Trustee, without
disclosing the fiduciary capacity of the Trustee;
(c) Subject to Sections 9.4 and 9.5, to exercise all voting
rights with respect to any investments held in the Trust Fund and to
grant proxies, discretionary or otherwise, with or without the power of
substitution, with respect thereto, but only according to the directions
of the Committee or investment manager; or, to the extent that such
rights are exercisable by Participants in the Plan, according to the
directions of such Participants. The Trustee shall deliver or cause to
be executed and delivered to the named fiduciary, all notices,
prospectuses, finance statements, proxies and proxy soliciting materials
relating to investments held hereunder. The Trustee shall not vote any
proxy except in accordance with the timely written instructions of the
Committee or the Investment Manger. If no such written instructions are
received, such proxies shall not be voted.
The Committee may assign to the Participants the right to vote
proxies. To the extent the right to vote is vested in whole or in part
in the Participants, the Trustee shall act in this regard only in
accordance with the timely written instructions received from the
Participants. Solely for this purpose, each Participant shall act as
the named fiduciary in providing direction to the Trustee. To the
extent practicable, all unallocated or unvoted shares held hereunder
shall, solely for the purpose of this section, be voted in the same
proportion as such Participant's allocated proportion of shares bear to
the aggregate of all like shares for which instructions have been issued
by the Participants as named fiduciaries to the Trustee.
(d) To collect the principal and income of the Trust Fund as
the same may become due and payable and to give binding receipt
therefor;
(e) To take any action, whether by legal proceeding,
compromise, or otherwise, as the Trustee, in its sole discretion deems
to be in the best interest of the Trust; to settle, compromise or submit
to arbitration any claims, debts or damages due or owing the Trust; to
commence or defend suits or legal proceedings to protect any interests
of the Trust, and to represent the Trust in all suits and other legal
proceedings in any court or before any body, board, agency, panel or
tribunal;
(f) To hold uninvested at any time, without liability for
interest thereon for a reasonable period of time, any amount of money
received by the Trustee or raised by the Trustee from the sale of
investments or otherwise until same can be reinvested or disbursed;
(g) To invest and reinvest the Trust Fund assets, or any part
thereof, in any property of any kind or nature whatsoever, whether real,
personal or mixed, whether tangible or intangible or productive of
income, or in any rights or interests in property,
IX-2
<PAGE> 112
or in any evidence or indicia of property, including, but not limited
to, the following types of properties or interests therein, or anything
of a similar kind, character, or class: common or preferred stock,
interests in so-called Massachusetts trusts, insurance contracts, key-
man or otherwise (provided that no payment under any such contracts
shall be made in contravention of applicable provisions of Article VI of
the Plan), fees, beneficial interests, leaseholds, bonds, mortgages,
leases, notes (including, but not limited to secured or unsecured notes
of any kind), obligations, oil and gas payments, oil and gas contracts,
savings accounts, certificates of deposit or like investments with the
commercial department of any bank (including any bank acting as Trustee
or its affiliates so long as they bear a reasonable interest rate and
the bank is supervised by the United States or a state), common, pooled,
collective or group trust funds, mutual funds or insurance contracts,
any of which the Trustee or any of its affiliates or any other entity
may now have or in the future may manage, distribute or adopt for the
collective investment of funds of trusts of employee benefit plans
qualified under Section 401(a) of the Code and exempt from federal
income taxes under Section 501(a) of the Code (the instrument creating
such common, pooled, collective or group trust fund, together with any
amendments thereto, being hereby incorporated in and made a part of the
Trust), in money market funds, or qualifying employer securities and/or
qualifying employer real property of an Employer up to one hundred
percent (100%) of the Trust Fund; provided, however, subject to the
right of the Committee under Section 4.10(c) of the Plan to override
clause (i) below, (i) unless the Plan would not have to be registered
under the federal Securities Act of 1933, only amounts attributable to
Employer Contributions (other than Elective Contributions) shall be used
to purchase qualifying employer securities and, (ii) to the extent the
Trustee is not independent of the issuer of such employer securities,
the issuer shall retain the services of an "agent independent of the
issuer" (as such term is defined in Rule 10b-18 promulgated under the
Securities Exchange Act of 1934) to effect such purchase and, further
provided, that the purchases are made in accordance with the provisions
of the Act.
(h) To lease and let all or any portion of the properties
possessed by the Trust Fund for the development or production of oil,
gas, sulphur or other minerals, or for any other purpose, on such terms,
times and conditions (including a term which will extend beyond the term
of this Trust), and for such consideration or royalties as the Trustee
deems proper;
(i) To borrow from or loan such sums as the Trustee considers
necessary or desirable (but not including loans to members without the
express direction from the Committee) and, for that purpose, to mortgage
or pledge all or any part of the Trust Fund property;
(j) If specifically directed in writing by the Committee, to
purchase deposit administration contracts, individual annuity contracts,
or group annuity contracts from any insurance company licensed in the
State of Texas; provided, however, no payment
IX-3
<PAGE> 113
under any such contract shall be made in contravention of applicable
provisions of the Plan; and
(k) To employ such lawyers, accountants, actuaries, brokers,
banks, investment counsel or other agents or employees and to delegate
to them such duties, rights and powers of the Trustee hereunder
(including the power to vote shares of stock) as the Trustee deems
advisable in administering the Trust Fund.
The Trustee shall not be required to take any legal action to collect, preserve
or maintain any Trust Fund property unless the Trustee has been indemnified
either by the Trust itself, with the approval of the Committee, or by an
Employer, with respect to any expenses or losses to which the Trustee may be
subjected by taking such action. Any property acquired by the Trustee through
the enforcement or compromise of any claim the Trustee has as Trustee will
become a part of the Trust Fund. The Trustee shall be responsible only for the
property actually received by it hereunder. It shall have no duty or authority
to compute any amount to be paid to it by an Employer or a Participant, or to
bring any action or proceeding to enforce the collection of any contribution to
the Trust Fund.
9.4 Voting Company Stock: This Section applies in the event that
common stock of the Plan Sponsor ("Company Stock") is authorized by the
Committee, pursuant to Section 4.10, for investment through a fund ("Company
Stock Fund") under which shares of Company Stock are allocated to the Accounts
of Participants and Beneficiaries who, pursuant to the Plan, direct the Trustee
to invest in the Company Stock Fund.
(a) Registration-Type Class of Securities: During such time
as the Plan Sponsor has a "registration-type class of securities"
(defined below), each Participant or Beneficiary, as applicable, will be
entitled to instruct the Trustee on how to vote the shares of Company
Stock allocated to his Account on the record date of each annual or
special meeting of the Plan Sponsor's shareholders. For purposes of the
Plan, in accordance with Section 409(e)(4) (or any successor provision)
of the Code, the term "registration-type class of securities" means: a
class of securities (1) required to be registered under Section 12 of
the Securities Exchange Act of 1934 (the "Exchange Act") or (2) that
would be required to be so registered except for the exemption from
registration provided in subsection (g)(2)(H) of Section 12 of the
Exchange Act.
(b) No Registration-Type Class of Securities: If the Plan
Sponsor does not have a "registration-type class of securities" (defined
in (a) above), each Participant or Beneficiary, as applicable, shall be
entitled to instruct the Trustee on how to vote the shares of Company
Stock allocated to his Account on the record date of each annual or
special meeting of the Plan Sponsor's shareholders, but only with
respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation,
dissolution, sale of substantially all assets of a trade or business, or
any such similar transaction as shall be prescribed by the Secretary of
the Treasury in regulations
IX-4
<PAGE> 114
or other authority issued under Section 409(e)(3) (or any successor
provision) of the Code.
With respect to all matters involving the voting of Company Stock
not described in the immediately preceding paragraph, unless the
Committee determines otherwise, all Company Stock held in the Trust Fund
(both allocated and any unallocated shares) shall be voted by the
Trustee in accordance with the Committee's instructions. The Committee
may, in its discretion pursuant to Sections 405(c) and 404(a)(1) of the
Act, delegate any power or duty allocated to it pursuant to immediately
preceding sentence to another person or entity who, with the consent of
such other person or entity, shall act as an independent fiduciary and
shall exercise such power or duty to the same extent as it could have
been exercised by the Committee. The persons or entities to which such
powers and duties may be delegated shall include, without limitation,
the Board or any committee of the Board, the Trustee, any person or
entity that meets the requirements of an investment manager under
Section 3(38) of the Act, or any other person or entity that the
Committee determines in good faith has the requisite knowledge and
experience concerning the matter with respect to which the delegation is
made. The Committee may in its discretion remove any fiduciary to whom
it has delegated any power or duty and exercise such power or duty
itself or appoint a successor fiduciary.
(c) Voting Procedure: Before each annual or special meeting
of the Plan Sponsor's shareholders, the Committee shall direct the
Trustee to send to each Participant and Beneficiary who is entitled to
exercise voting rights, as provided in this Section, a copy of the proxy
solicitation materials therefor, together with a form requesting
confidential, written instructions on how to vote the shares of Company
Stock allocated to his Account with respect to such matters on which he
is entitled to vote. The proxy solicitation materials described in the
preceding sentence shall be the same as those for shareholders of
Company Stock generally, and shall comply with applicable state and
federal law and the Plan Sponsor's charter and bylaws as generally
applicable to shareholders of Company Stock. The Trustee shall not make
recommendations to Participants and Beneficiaries on whether to vote or
how to vote. The individual instructions received by the Trustee shall
be held in strict confidence and shall not be divulged or released to
any person, including Employees of any Employer or Affiliated Employer;
provided, however, the Trustee shall advise any officer of the Plan
Sponsor, at any time upon request, of the total number of shares of
Company Stock that it has been instructed to vote in favor of each
matter for which a vote was solicited, the total number of shares of
Company Stock that it has been instructed not to vote in favor of each
such matter and the total number of shares in respect of which it has
received no instructions.
(d) Voting by Trustee Proportionate to Direction: The Trustee
shall aggregate the instructions timely received pursuant to (c) above
and vote allocated whole shares of Company Stock and, to the same extent
permitted for shareholders of the Plan Sponsor generally, allocated
fractional shares of Company Stock specifically in accordance with
IX-5
<PAGE> 115
the valid instructions so received from the Participants and
Beneficiaries or from the Committee (or its delegate), pursuant to
subsections (a) or (b) above as applicable. Additionally, the Trustee
shall vote any whole shares, and fractional shares to the extent
permitted, of Company Stock allocated to the Accounts for which it does
not receive valid instructions in the same proportion as are voted the
shares of Company Stock allocated to the Accounts with respect to which
the Trustee has received valid instructions from the Participants and
Beneficiaries or from the Committee (or its delegate), pursuant to
subsections (a) or (b) above as applicable.
9.5 Tender Offer for Company Stock. This Section applies in the
event that common stock of the Plan Sponsor ("Company Stock") is authorized by
the Committee, pursuant to Section 4.10, for investment through a fund
("Company Stock Fund") under which shares of Company Stock are allocated to the
Accounts of Participants and Beneficiaries who, pursuant to the Plan, direct
the Trustee to invest in the Company Stock Fund. For purposes of this Section,
"Tender Offer" shall collectively mean (i) a cash tender offer, which includes
a tender offer for, or request or invitation for tenders of, shares of Company
Stock in exchange for cash, as made to the Trustee or to the shareholders of
Company Stock generally, and (ii) an exchange offer, which includes a tender
offer for, or request or invitation for tenders of, any shares of Company Stock
in exchange for any consideration other than all cash, as made to the Trustee
or to the shareholders of Company Stock generally.
(a) Allocated Shares of Company Stock: In the event of a
Tender Offer, the Committee shall direct the Trustee to take those steps
reasonably necessary to furnish information to, and request instructions
from, each Participant or Beneficiary, as applicable, who has shares of
Company Stock allocated to his Company Stock Account in substantially
the same manner as with respect to the shareholders of Company Stock
generally. In that regard, the Trustee shall:
(i) Inform each Participant (or Beneficiary) as to the
existence of the Tender Offer; however, the Trustee shall not
make any recommendations with respect to such Tender Offer;
(ii) Transmit to each Participant (or Beneficiary) such
written information and other materials relative to the Tender
Offer as are made available by the persons or entities making
such Tender Offer to the shareholders of Company Stock generally;
(iii) Request written instructions from each Participant
(or Beneficiary) as to whether or not to tender or exchange the
shares of Company Stock allocated to his Account; and
(iv) Use reasonably diligent efforts to effect, on a
nondiscriminatory basis, the tender or exchange of allocated
shares of Company
IX-6
<PAGE> 116
Stock in accordance with the written instructions received from
the Participants and Beneficiaries.
The number of shares to which a Participant's (or Beneficiary's)
instructions apply will be the total number of shares allocated to his
Account, regardless of whether the shares are vested, as of the close of
business on the day preceding the date on which the tender offer
commences. In accordance with the terms and conditions of the Tender
Offer, the Trustee will tender or exchange those shares of Company Stock
that it has been properly instructed to tender or exchange, and it will
not tender or exchange those shares that it has not been properly
instructed to tender or exchange. Instructions to the Trustee from a
Participant or Beneficiary to tender or exchange shares will not be
deemed a withdrawal or suspension from the Plan or a forfeiture of any
portion of such person's interest in the Plan. Shares of Company Stock
which are not tendered or exchanged pursuant to valid instructions shall
remain invested in Company Stock.
The individual instructions received by the Trustee shall be held
in strict confidence and shall not be divulged or released to any
person, including Employees of any Employer or Affiliated Employer;
provided, however, the Trustee shall advise any officer of the Plan
Sponsor, at any time upon request, of the total number of shares of
Company Stock that it has been instructed to tender or exchange, the
total number of shares that it has been instructed not to tender or
exchange and the total number of shares for which it has received no
instructions.
(b) Fractional and any Unallocated Shares of Company Stock:
The Trustee shall accumulate all fractional shares of Company Stock
allocated to the Accounts and tender or exchange such fractional shares
in the same proportion as the whole shares of Company Stock allocated to
the Accounts (for which the Trustee received valid instructions to
tender or exchange) were tendered or exchanged pursuant to subsection
(a) above. Likewise, the Trustee shall tender or exchange any
unallocated shares of Company Stock held in the Trust Fund in the same
proportion as the whole shares of Company Stock allocated to the Company
Stock Accounts (for which the Trustee received valid instructions to
tender or exchange) were tendered or exchanged pursuant to subsection
(a) above. Any shares of Company Stock which are not tendered or
exchanged pursuant to the provisions of this subsection (b) shall remain
invested in Company Stock.
(c) Funds Received for Tendered Company Stock: Cash or other
consideration received in exchange for tendered or exchanged Company
Stock shall be held in accordance with Section 4.10(a) pending
instructions from the Committee.
9.6 Standard of Performance: The Trustee in discharging the duties
of Trustee with respect to the management, investment and reinvestment of the
Trust Fund assets shall do so solely in the interest of the Participants and
Beneficiaries, using the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity
IX-7
<PAGE> 117
and familiar with such matters would use in the conduct of an enterprise of a
like character; shall diversify the investments of the Trust Fund so as to
minimize the risk of large losses unless under the circumstances it is clearly
prudent not to do so; and shall otherwise act in accordance with the provisions
of the Plan and the Act.
9.7 Liability for Investments: The Trustee shall not be liable to
the Trust, or to any person or entity having a beneficial interest in the
Trust, for any loss or decline in value which may be incurred upon any
investment of the Trust Fund assets, including, but not limited to, qualifying
employer securities and qualifying employer real property, or for failure of
such assets to produce any or greater earnings, interest, or profits, so long
as the Trustee acts in good faith and in accordance with the responsibilities,
obligations and duties placed on the Trustee under the Plan and the Act.
9.8 Reliance on Directions: When the Trustee acts in good faith, the
Trustee, in all matters pertaining to the Trustee's management and investment
of the Trust Fund, may rely upon any notice, resolution, instruction,
direction, order, certificate, opinion, letter, telegram or other document
believed by the Trustee to be genuine, to have been signed by a proper
representative of the Committee or an investment manager, if one is appointed,
and to be the act of the Committee or the investment manager, as the case may
be. The Trustee shall accept any certificate or other instrument duly signed
by a proper representative of the Committee or an investment manager, if one is
appointed, which purports to evidence an instruction, direction, or order of
the Committee or the investment manager, as the case may be, as conclusive
evidence thereof.
9.9 General Liability of the Trustee: The Trustee shall not be
liable for any act or omission by the Trustee because of a direction of the
Committee or an investment manager appointed by the Committee; nor for any act
or omission of the Committee, an investment manager appointed by the Committee,
or any other agent appointed by the Committee, except to the extent required by
the Act and any other applicable state or federal law, which liability cannot
be waived. The Trustee shall not be liable for any act or omission on the
Trustee's own part except to the extent required by the Act and any other
applicable state or federal law, which liability cannot be waived. Further, it
is specifically provided that the Trustee may, with the written approval of the
Committee, purchase out of the Trust Fund insurance for the Trustee and for the
Trust Fund itself to cover liability and losses occurring by reason of the act
or omission of the Trustee, provided that such insurance permits recourse by
the insurer against the Trustee in the case of a breach of a fiduciary
obligation by the Trustee.
9.10 Proof of Trustee's Authority: All persons dealing with the
Trustee are entitled to rely upon the representations of the Trustee as to the
Trustee's authority and are released from any duty to inquire into the
Trustee's authority for taking or omitting any action, or to verify that any
money paid for other property delivered to the Trustee is used by the Trustee
for Trust purposes. Any action of the Trustee under the Plan shall be
conclusively evidenced for all purposes by a certificate or other document
signed by the Trustee, and any such certificate or document shall be conclusive
evidence of the facts recited therein. Any person shall be fully
IX-8
<PAGE> 118
protected when acting or relying upon any notice, resolution, instruction,
direction, order, certificate, opinion, letter, telegram or other document
believed by such person to be genuine, to have been signed by the Trustee, and
to be the act of the Trustee.
9.11 Accounting Required by Trustee. Within a reasonable time (as
determined in the sole discretion of the Committee) after the close of each
Plan Year, and at such other times (or shorter accounting periods) as requested
in writing by the Committee, and as of the date of the removal or resignation
of the Trustee, the Trustee shall render to each Employer and the Committee, an
accounting report of the Trust Fund covering the period since the previous
accounting report. The report shall reflect the transactions, expenses, and
earnings or losses for the period covered, and, as of the last day of such
period, the cost basis of the assets, the fair market value of the assets, and
the liabilities of the Trust Fund. The written approval of such accounting
report by the Committee or the affected Employer, or the failure of the
Committee or the affected Employer to notify the Trustee of its disapproval of
such report within ninety (90) days after receipt thereof, shall be final and
binding as to the Trustee's administration of the Trust for such period upon
such Employer and all Participants (and Beneficiaries thereof) of such Employer
who have or may thereafter have an interest in the Trust, except with respect
to (i) any matter that the Committee or affected Employer could not reasonably
be expected to discover upon review of such accounting report, (ii) any actions
or omissions in violation of the Act or other applicable law, and (iii) any
actions or omissions that are determined by a court of competent jurisdiction
to constitute gross negligence or intentional or willful misconduct.
9.12 Resignation or Removal of Trustee: The Trustee may resign at any
time by giving at least sixty (60) days prior written notice to the Board,
unless the Board agrees to a shorter notice period. The Board may remove the
Trustee at any time by giving at least thirty (30) days prior written notice to
the Trustee, unless the Trustee agrees to a shorter notice period. Upon the
resignation or removal of the Trustee, the Trustee shall render to the
Committee and to each Employer a written account of the administration of the
Trust for the period following the period that was covered by the last
accounting report.
Notwithstanding any provision of this Plan, it is agreed that in the
event of the resignation or removal of the Trustee, the Board shall promptly
appoint a successor. If no appointment of a successor is made by the Board
within sixty (60) days after the resignation or removal of the Trustee, after
notice to the other party, the Trustee may apply to any court of competent
jurisdiction for appointment of a successor. The Trustee shall be entitled to
reasonable compensation and reimbursement for costs associated with bringing
such action. The Trustee shall be furnished with written notice from the Plan
Sponsor or the court, as the case may be, of the appointment of the successor,
and shall also be furnished with written evidence of the successor's acceptance
of trusteeship.
9.13 Appointment and Power of Successor Trustee: Any vacancy in the
office of Trustee created by the resignation or removal of the Trustee shall
not terminate the Trust. In the event of any such vacancy, the Board shall
appoint a successor Trustee. Any successor Trustee, after acknowledging
acceptance of the Trust and accepting the Trust Fund assets and
IX-9
<PAGE> 119
liabilities and the accounting of the retiring Trustee, shall be vested with
all the estates, titles, rights, powers, duties, and discretions which were
granted to the retiring Trustee. The retiring Trustee shall execute and
deliver all assignments or other instruments as may be necessary or advisable
in the discretion of the successor Trustee.
9.14 Compensation of Trustee: Any corporate Trustee shall be
reimbursed for expenses properly and actually incurred in the performance of
its duties under the Plan and shall receive reasonable compensation for
services rendered as may be agreed upon, from time to time, between the Trustee
and the Committee with the consent and approval of the Board. Any individual
serving as Trustee shall not receive any compensation for his services, but
shall be reimbursed for all expenses properly and actually incurred in the
performance of his duties under the Plan.
The Trustee's compensation, if any, and the expenses of the Trust shall
be paid by an Employer(s) unless an Employer elects to have the Trustee's
compensation and the expenses of the Trust paid out of the Trust Fund. Until
such compensation and expense is actually paid, it shall constitute a charge or
lien on the Trust Fund. Each Employer shall bear that portion of such
compensation and expense as shall be determined by the Committee based upon the
approximate total amount in the Accounts of Participants employed by it as
compared to the approximate total amount in the Accounts of all Participants.
9.15 Bonding. The Trustee and each other fiduciary pursuant to the
Act, except a bank, insurance company or another person or entity which is
exempted under the Act, shall be bonded in an amount not less than ten percent
(10%) of the amount of funds that such fiduciary handles; provided, however,
the minimum bond shall be $1,000 and the maximum bond shall be $500,000. The
amount of funds handled shall be determined at the beginning of each Trust Year
by the amount of funds handled by each covered fiduciary and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of funds to be handled during the
current Plan Year. The bond shall provide protection to the Trust against any
loss by reason of the fraud or dishonesty of the fiduciary acting alone or in
connivance with others. The surety shall be a corporate surety company (as
such term is used in Section 412(a)(2) of the Act), and the bond shall be in a
form approved by the U.S. Secretary of Labor in regulations or other authority
issued under the Act.
9.16 Assignment of Trusteeship. No assignment (as defined in the
Investment Advisers Act of 1940) of this Agreement shall be made by the Trustee
without the written consent of the Plan Sponsor; provided, however, that the
Trustee may assign this Agreement to another wholly-owned subsidiary of the
Trustee which is organized and chartered as a trust company if the Trustee
first gives the Plan Sponsor forty-five days advance notice and the Plan
Sponsor does not object within the forty-five day period.
IX-10
<PAGE> 120
ARTICLE X
ADOPTION OF PLAN BY OTHER EMPLOYERS
10.1 Adoption Procedure: Any business organization may, with the
approval of the Board, adopt the Plan for all or any classification of its
Employees, as permitted by Section 401(a) of the Code, by delivering to the
Committee:
(a) A certified resolution or consent of the sole proprietor,
managing partner(s) or board of directors (or equivalent governing
authority) of the adopting Employer, or a duly executed adoption
instrument (adopted and approved by the sole proprietor, managing
partner(s) or board of directors (or equivalent governing authority) of
the adopting Employer)) setting forth its agreement to be bound as an
Employer by all the terms, provisions, conditions and limitations of the
Plan, except those, if any, specifically set forth in the adoption
instrument;
(b) All information required by the Committee and the Trustee
with reference to Employees or Participants; and
(c) The written consent of the Board to the adoption of this
Plan. Any adoption may be made retroactive to the beginning of a Plan
Year by complying with the foregoing conditions on or before the last
day of that Plan Year.
10.2 No Joint Venture Implied: The adoption instrument executed by an
Employer shall become, as to it and its Employees, a part of the Plan.
However, except as otherwise provided under the Plan, neither the adoption of
the Plan by an Employer, nor any act performed by it in relation to the Plan
shall ever create a joint venture or partnership relation between it and any
other Employer. Although the Accounts of Participants employed by an Employers
which adopt the Plan shall be commingled for purposes of investment thereof,
unless the Committee and the Trustee are otherwise directed by the Board,
amounts held in the Trust Fund allocable to a particular Employer shall, on an
ongoing basis, be available to pay benefits to Participants employed by that
Employer, and to pay benefits to Participants employed by any other Employer
which is an Affiliated Employer required to be aggregated with the first such
Employer, but not otherwise. In addition, unless the Committee and Trustee are
otherwise directed by the Board, the Committee shall maintain completely
separate accounts and records for the Plan Sponsor and each other Employer
which is an Affiliated Employer required to be aggregated with the Plan Sponsor
(and Employees thereof who are Participants), but otherwise the Plan shall be
maintained on a consolidated basis for the Plan Sponsor and all such other
Affiliated Employers. The Committee shall maintain completely separate
accounts and records for any Employer that is not an Affiliated Employer, as
distinguished from maintaining the Plan on a consolidated basis with such other
Employer.
X-1
<PAGE> 121
10.3 Transfer of Participants: If an Employee of one Employer is
Transferred to the service of another Employer, the Employee shall maintain all
of his rights under the Plan. Contributions to the Transferred Employee's
Employer Account shall be handled in accordance with the provisions of Sections
4.2 and 4.8, and his Active Service shall be considered uninterrupted, as if no
Transfer had occurred. Unless otherwise provided hereunder, Active Service
with any Employer or Affiliated Employer shall count as Active Service with all
Employers, whether before or after the date that an Employer adopts the Plan.
X-2
<PAGE> 122
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 Right to Amend and Limitations Thereon: The Board shall have the
sole right to amend the Plan. Any amendment shall (i) be made by a written
instrument and executed by an appropriate officer of the Plan Sponsor, (ii) set
forth the nature of the amendment and its effective date (which may be
retroactive), and (iii) be supported by a certified copy of the resolution or
direction which authorized or ratified it. Although the Trustee shall be
expected to execute each amendment of the Plan, failure of the Trustee to
execute any such amendment shall not adversely affect the Plan Sponsor's
exclusive right to effectively amend the Plan without regard to any act or
forbearance on the part of the Trustee. No amendment shall:
(a) Except as otherwise specifically provided in the Plan,
cause or permit any Trust Fund assets to be diverted to any purpose
other than the exclusive benefit of the Participants and their
Beneficiaries;
(b) Decrease the accrued benefit of any Participant or
eliminate a protected form of benefit in violation of Section 411(d)(6)
of the Code;
(c) Increase the duties or liabilities of the Trustee without
its prior written consent; or
(d) Change the vesting schedule to one which would result in
the nonforfeitable percentage of the accrued benefit derived from
Employer Contributions (determined as of the later of the amendment's
adoption date or effective date) of any Participant being less than such
nonforfeitable percentage computed under the Plan without regard to such
amendment. If the Plan's vesting schedule is amended, or if the Plan is
amended in any way that directly or indirectly affects the computation
of the Participant's nonforfeitable percentage, or if the Plan is deemed
amended by an automatic change to or from a Top-Heavy vesting schedule,
each Participant with at least three years of service with an Employer
may elect, within a reasonable period after the adoption of the
amendment or change, to have the nonforfeitable percentage computed
under the Plan without regard to such amendment or change. With respect
to Participants who are not entitled to be credited with at least one
hour of service in any Plan Year, the immediately preceding sentence
shall be applied by substituting "five years of service" for "three
years of service." The period during which the election may be made
shall begin no later than the date upon which the amendment is adopted
or deemed to be made and shall end no later than the latest of the
following dates: (1) the date which is sixty (60) days after the day
that the amendment is adopted or deemed to be made; (2) the date which
is sixty (60) days after the day that the amendment becomes effective;
or (3) the date which is sixty (60) days after the day the Participant
is issued written notice of the amendment by an Employer.
XI-1
<PAGE> 123
In the event of an amendment, each Employer will be deemed to have
consented to and adopted the amendment unless an Employer notifies the Plan
Sponsor, the Committee, and the Trustee to the contrary in writing within
thirty (30) days after receipt of a copy of the amendment, in which case the
rejection will constitute a withdrawal from the Plan by that Employer.
11.2 Mandatory Amendments: Except as otherwise provided in the Plan,
or except as otherwise prescribed by applicable law or other authority
prescribed thereunder by the appropriate governmental authority, the
Contributions of each Employer to the Plan are intended to be:
(a) Deductible under applicable provisions of the Code;
(b) Exempt from the federal Social Security Act, as amended;
(c) Exempt from withholding under the Code; and
(d) Excludible from any Employee's regular rate of pay, as
that term is defined under the Fair Labor Standards Act of 1938, as
amended.
The Plan Sponsor shall make such amendments to the Plan as may be
necessary to carry out this intention, and all such amendments may be made
retroactively.
11.3 Withdrawal of an Employer: An Employer may withdraw from the
Plan either by rejecting an amendment or by giving written notice of its intent
to withdraw to the Plan Sponsor, the Committee and the Trustee. The Committee
shall then determine, within ninety (90) days following the receipt of the
rejection or notice, the portion of the Trust Fund that is attributable to the
Participants employed by the withdrawing Employer and shall forward a copy of
such determination to the Trustee. Upon receipt of the determination, the
Trustee shall immediately segregate those assets attributable to the
Participants employed by the withdrawing Employer and shall transfer those
assets to the successor trustee when it receives a designation of such
successor from the withdrawing Employer.
The withdrawal from the Plan will not terminate the Plan with respect to
the withdrawing Employer. Instead, the withdrawing Employer shall, as soon as
practical, either appoint a successor trustee or trustees and reaffirm the Plan
as a new and separate plan and trust intended to qualify under Sections 401(a)
and 501(a) of the Code, or establish another plan and trust intended to qualify
under Sections 401(a) and 501(a) of the Code.
The determination of the Committee, in its sole discretion, of the
portion of the Trust Fund that is attributable to the Participants employed by
the withdrawing Employer shall be final and binding upon all persons or
entities; and, the Trustee's transfer of those assets to the designated
successor trustee shall relieve the Trustee of any further obligation,
liability or duty to the
XI-2
<PAGE> 124
withdrawing Employer, the Participants employed by that Employer and their
Beneficiaries, and the successor Trustee.
11.4 Voluntary and Involuntary Termination: Any Employer may
terminate its participation in the Plan by executing and delivering to the
Committee and the Trustee a notice which specifies the date on which its
participation in the Plan shall terminate. Likewise, participation of an
Employer in the Plan will automatically terminate upon the general assignment
by that Employer of substantially all of its assets to or for the benefit of
its creditors, or the liquidation or dissolution of that Employer without a
successor (whether or not as the result of a bankruptcy proceeding).
Upon termination of participation in the Plan by any Employer without
provision for continuation of the portion thereof attributable to such
Employer, subject to the provisions of this Section, the Trustee shall
distribute to each Participant employed by the terminating Employer the vested
amounts certified by the Committee as then credited to the Accounts of the
Participants employed by the terminating Employer. If a Participant's vested
Account balance (derived from Employer and any Employee Contributions) which is
distributable hereunder does not exceed $3,500, such Account balance shall be
distributed in the form of a lump sum payment which may be paid in cash or in
kind (other than an annuity based on the life of the Participant or any
Beneficiary). Such distribution may be made without the necessity of obtaining
the consent of the Participant. If a Participant's vested Account balance
(derived from Employer and any Employee Contributions) which is distributable
hereunder is in excess of $3,500, and if the Participant consents to the
distribution hereunder in the form of a lump sum payment, the Committee shall
direct the Trustee to make settlement of a Participant's Account as provided in
the second preceding sentence. If a Participant's vested Account balance
(derived from Employer and any Employee Contributions) which is distributable
hereunder is in excess of $3,500, and if the Participant fails to consent to
the distribution hereunder, the Committee shall direct the Trustee to make
settlement of the Participant's Account by distribution of a deferred
commercial annuity which can be purchased (with the net proceeds of the
Participant's vested Account balance) from any life insurance company licensed
to conduct business in the State of the situs of the Trust, provided that such
annuity (i) shall provide the same settlement provisions as are set out in
Article VI and (ii) shall be issued or endorsed as nontransferable so that the
owner thereof cannot sell, assign, discount, or pledge as collateral for a loan
or as security for the performance of an obligation or for any other purpose
his interest in such contract to any person, other than the issuer of such
annuity upon the surrender thereof, and, further provided, that in the event of
any conflict between applicable provisions of the Plan (regarding the timing or
manner of payment of benefit) and the terms and provisions of any such
commercial annuity purchased hereunder, the terms and provisions of the Plan
shall control. Subject to subsequent provisions hereof, distributions
hereunder shall be made as soon as administratively practicable, but in no
event later than the time required under applicable provisions of the Code.
In the event that (i) the Plan is maintained by the Plan Sponsor and at
least one other Employer which is an Affiliated Employer required to be
aggregated with the Plan Sponsor, (ii) on an ongoing basis, assets of the Plan
are available to pay benefits to any Employee who
XI-3
<PAGE> 125
is a Participant (and Beneficiaries thereof) and thus the Plan should be viewed
as a single plan for purposes of Section 414(1) of the Code, and (iii) the Plan
is operated on a consolidated basis, then, in that event, should any Employer
which is an Affiliated Employer terminate participation in the Plan without
provision for continuation of the portion thereof attributable to such
Employer, subject to application of Section 11.5 (relating to partial
terminations), any forfeitures arising incident to the distributions described
above shall be allocated in accordance with Section 4.6 ratably among the Plan
Sponsor and each remaining Employer which is an Affiliated Employer, to reduce
future Contributions of each such Employer. Any unapplied portion (comprised
of excess amounts arising from or attributable to Contributions of such
terminating Affiliated Employer) of any suspense account described in Section
4.3 shall be applied pro-rata to reduce future Contributions of the Plan
Sponsor and any remaining Employer which is an Affiliated Employer.
Regardless of whether the Plan is operated on an ongoing basis which
should result in the Plan being viewed as a single plan for purposes of Section
414(1) of the Code, in the event that the Plan is not operated on a
consolidated basis and separate accounts and records are maintained for each
separate Employer under the Plan, then should any Employer which is an
Affiliated Employer terminate participation in the Plan without provision for
continuation of the portion thereof attributable to such Employer, Participants
employed by such terminating Employer as of the date of such termination of
participation in the Plan shall have a 100% vested and nonforfeitable interest
in their Accounts. Similar rules shall apply with respect to any other
Employer with respect to which the Plan is not operated on a consolidated
basis.
If the Plan should terminate, or should an Employer terminate its
participation in the Plan without causing the Plan to terminate, the Trustee,
as directed by the Committee, shall notify the Internal Revenue Service of such
termination of the Plan or termination of participation in the Plan by an
Employer, and the Plan Sponsor shall apply to the Internal Revenue Service for
a determination letter with respect to said termination of the Plan or
termination of participation in the Plan by an Employer. The Trustee shall not
distribute the assets in the Trust Fund in violation of applicable provisions
of Article VI of the Plan or prior to receipt of a copy of a determination
letter from the Internal Revenue Service to the effect that an immediate
distribution of Plan assets will not adversely affect the prior qualification
of the Plan under Sections 401(a) of the Code and the exemption of the Trust
under Section 501(a) of the Code. Provided further, notwithstanding any other
provision of the Plan to the contrary, amounts allocated and credited to the
affected Participants' Accounts may be distributed in any form authorized
hereunder which constitutes a lump sum distribution described in Section
401(k)(10) of the Code prior to such time such amounts would otherwise be
distributed if (i) the Plan is terminated without establishment of a successor
plan in contravention of Section 401(k)(10)(A)(i) of the Code and regulations
or other authority issued thereunder by the appropriate governmental authority,
(ii) the Plan Sponsor or other Employer effects a disposition (to an employer
which is not an Affiliated Employer) of substantially all of the assets (within
the meaning of Section 409(d)(2) of the Code) used by such Plan Sponsor or
other Employer in a trade or business of such Plan Sponsor or other Employer
with respect to any former Participant who continues employment with the
employer which acquires such assets, and the Plan Sponsor or other
XI-4
<PAGE> 126
Employer continues to maintain the Plan after such disposition, or (iii) the
Plan Sponsor or other Employer effects a disposition (to an employer which is
not an Affiliated Employer) of its interest in a subsidiary (within the meaning
of Section 409(d)(3) of the Code) with respect to any Participant who is a
former Employee of such Employer who continues employment with the subsidiary,
and the Plan Sponsor or other Employer continues to maintain the Plan after
such disposition. A distribution may be made under Section 401(k)(10) of the
Code and clauses (ii) and (iii) of this paragraph only if the Plan Sponsor or
Employer continues to maintain the Plan after the disposition. This
requirement is satisfied only if the purchaser does not maintain the Plan after
the disposition. A purchaser maintains the Plan if it adopts the Plan or
otherwise becomes an employer whose employees accrue benefits under the Plan.
A purchaser also maintains the Plan if the Plan is merged or consolidated with,
or any assets or liabilities are transferred from the Plan to, a plan
maintained by the purchaser in a transaction subject to Section 414(l)(1) of
the Code. A purchaser is not treated as maintaining the Plan merely because a
plan that it maintains accepts rollover contributions of amounts distributed by
the Plan.
For purposes of the previous paragraph, in accordance with Section
1.401(k)-1(d)(3) of the Income Tax Regulations, a successor plan is any other
defined contribution plan maintained by the same employer. However, if fewer
than two percent (2%) of the employees who are eligible under the Plan at the
time of its termination are or were eligible under another defined contribution
plan at any time during the 24-month period beginning 12 months before the time
of the termination, the other plan is not a successor plan. The term "defined
contribution plan" means a plan that is a defined contribution plan as defined
in Section 414(i) of the Code, but does not include an employee stock ownership
plan as defined in Section 4975(e) or 409 of the Code or a simplified employee
pension as defined in Section 408(k) of the Code. A plan is a successor plan
only if it exists at the time the Plan is terminated or within the period
ending 12 months after distribution of all assets from the Plan.
Pursuant to Section 11.5, the termination of participation in the Plan
by any one or more of an Employers will not constitute a termination of the
Plan with respect to any other remaining Employers. Upon satisfaction of all
liabilities to all Participants and Beneficiaries hereunder, the Trust shall
terminate.
11.5 Vesting Upon Discontinuance of Employer Contributions, Total or
Partial Termination: Notwithstanding any other provision of the Plan, in the
event that there is a total or partial termination, or complete discontinuance
of an Employer Contributions hereunder, the vesting schedule contained in
Sections 6.4 shall be inapplicable to the affected Participants and each
affected Participant thereupon shall have a full 100% vested interest in the
amount credited to his Account as of the end of the last Plan Year for which a
substantial Employer Contribution was made and in any amounts thereafter
credited or allocated to his Account; provided, however, that if an Employer
shall thereafter resume making substantial Contributions hereunder, all amounts
credited or allocated to an affected Participant's Account with respect to the
Plan Year for which such Contributions are resumed, and the Plan Years for
which they are continued, shall vest only in accordance with the vesting
schedules contained in Sections 6.4. During any such period of termination or
complete discontinuance of Employer Contributions,
XI-5
<PAGE> 127
all other provisions of the Plan shall nevertheless continue in full force and
effect, other than provisions for Employer Contributions and the allocation
thereof to the affected Participants' Accounts. Except as otherwise provided
in Section 11.4, the Plan shall not terminate earlier than the effective date
as of which the Plan is voluntarily terminated by the Plan Sponsor or by the
Plan Sponsor and the other Employers maintaining the Plan.
11.6 Continuance Permitted Upon Sale or Transfer of Assets: An
Employer's participation in the Plan will not automatically terminate in the
event that it consolidates, merges, and is not the surviving corporation; sells
substantially all of its assets; is a party to a reorganization and its
Employees and substantially all of its assets are transferred to another
entity; or liquidates or dissolves, if there is a successor entity. Instead,
the resulting successor person, firm, corporation, or other entity may assume
and continue the Plan and the Trust by executing a direction, entering into a
contractual commitment or adopting a resolution, as the case may be, providing
for the continuance of the Plan and the Trust simultaneous with or within one
hundred twenty (120) days after such consolidation, merger, sale,
reorganization, liquidation or dissolution. If after such one hundred twenty
(120) day period, the successor entity has not assumed and continued the Plan
and otherwise complied with the provisions of Section 11.3, the successor
entity shall be deemed to have given notice under Section 11.4 and its
participation in the Plan will then automatically terminate on the one hundred
twenty-first (121st) day and, in that event, the appropriate portion of the
Trust Fund will be distributed exclusively to the affected Participants or
their Beneficiaries as soon as practicable pursuant to Section 11.4.
11.7 Requirement on Merger, Transfer, etc.: Notwithstanding any other
provision hereof, in accordance with Section 414(1) of the Code and regulations
or other authority issued thereunder by the appropriate governmental authority,
the Plan will not be merged or consolidated with, nor shall any assets or
liabilities of the Plan be transferred to, any other plan unless each
Participant would receive (if the Plan then terminated) a benefit immediately
after the merger, consolidation, or transfer which is equal to or greater than
the benefit that he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had then terminated). In
addition, any accrued benefits under the Plan which are subject to and
protected under Section 411(d)(6) of the Code shall not be reduced or
eliminated in violation of Section 411(d)(6) of the Code (or regulations or
other authority issued thereunder by the appropriate governmental authority)
incident to (i) any merger, consolidation, spin-off or transfer of such accrued
benefits or (ii) any transaction involving an amendment or having the effect of
an amendment of the Plan to transfer such accrued benefits.
Subject to Sections 8.2(i), 8.2(j), 8.2(k) and 9.2, the Trustee, as
directed by the Committee, shall have the authority to enter into (i) an
agreement to merge or consolidate the Plan with another plan which meets the
requirements of Sections 401(a) and 501(a) of the Code or (ii) an agreement to
accept the direct transfer of assets from any such plan or to transfer Plan
assets to any such plan. Except in cases in which the Plan accepts direct
rollovers of eligible rollover distributions in accordance with Section
401(a)(31) of the Code and Section 6.6(b) hereof, to the extent that any such
assets that are directly transferred to the Plan are composed of amounts
attributable to elective contributions (described in Section 402(g)(3) of the
Code),
XI-6
<PAGE> 128
or qualified nonelective contributions (described in Section 401(m)(4)(C) of
the Code), or matching contributions (described in Section 401(m)(4)(A) of the
Code) that are treated as elective contributions under Section 401(k) of the
Code, such amounts shall remain subject to any limitations on distribution
thereof and, thus, shall not be distributed under the Plan prior to such time
as is permitted under the transferor plan and Section 401(k) of the Code.
Subject to the Code Sections described in the immediately preceding sentence,
if assets are accepted on behalf of any Employee prior to the date that such
Employee is eligible to enter the Plan as an active Participant, such Employee
shall be deemed to be a Participant; provided however, such Employee shall not
be entitled to make or authorize Contributions to the Plan or share in the
allocation of any Employer Contributions unless and until such Employee meets
the requirements of Sections 2.1, 3.2 and 4.2 of the Plan.
The Trustee shall not consent or be a party to a merger, consolidation
or transfer of assets with a defined benefit plan, except with respect to a
Rollover Contribution or a transfer which the Committee has determined to be an
"elective transfer" (described below). The Trustee shall hold, administer and
distribute the transferred assets as a part of the Trust Fund. Unless a
transfer of assets to the Plan is a Rollover Contribution or an "elective
transfer" (defined below), the Plan shall apply the optional forms of benefit
protections described in this Section and in Section 11.1 to all of the
transferred assets. A transfer is an elective transfer if: (i) the transfer
satisfies the preceding provisions of this Section; (ii) the transfer is
voluntary, under a fully informed election by the Participant; (iii) the
Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the transferor
plan if that plan is not terminating and the Participant's transferor plan
account exceeds $3,500); (iv) the transfer satisfies the applicable spousal
consent requirements of the Code; (v) the transferor plan satisfies the
qualified joint and survivor annuity notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (vi) the
Participant has the right to immediate distribution from the transferor plan in
lieu of the elective transfer; (vii) the transferred benefit is the entire
nonforfeitable accrued benefit under the transferor plan (1) calculated to be
at least the greater of the single sum distribution provided by the transferor
plan for which the Participant is eligible or the present value of the
Participant's accrued benefit under the transferor plan payable at that plan's
normal retirement age and (2) calculated by using an interest rate that
complies with the requirements of Section 417(e) of the Code and subject to the
overall limitations of Section 415 of the Code; (viii) the Participant has 100%
vested interest in the transferred benefit; and (ix) the transfer otherwise
satisfies applicable regulations or other guidance issued under applicable
provisions of the Code by the appropriate governmental authority.
XI-7
<PAGE> 129
ARTICLE XII
MISCELLANEOUS
12.1 Plan Not An Employment Contract: The adoption and maintenance of
the Plan shall not be deemed to be a contract between any Employer and its
Employees which gives any Employee the right to be retained in the employment
of any Employer; to interfere with the rights of any Employer to discharge any
Employee at any time; or to interfere with any Employee's right to terminate
his employment at any time.
12.2 Benefits Provided Solely From Trust Fund: All benefits payable
under the Plan shall be paid or provided for solely from the Trust Fund;
neither the Committee nor any Employer assumes any liability or responsibility
therefor. Each Participant assumes all risks in connection with any decrease
in the market value of any common stocks or other investments held on his
behalf in accordance with the provisions of the Plan.
12.3 Spendthrift Provision: No principal or income payable, or to
become payable, from the Trust Fund will be subject to: (i) anticipation or
assignment by any Participant or by any Beneficiary; (ii) attachment by,
interference with, or control of any creditor of a Participant or Beneficiary;
or (iii) being taken or reached by any legal or equitable process in
satisfaction of any debt or liability of a Participant or Beneficiary prior to
its actual receipt by such Participant or Beneficiary. Any attempted
conveyance, transfer, assignment, mortgage, pledge, hypothecate or encumbrance
of the Trust Fund, or any part or interest in it, by a Participant or
Beneficiary prior to distribution will be void, whether that conveyance,
transfer, assignment, mortgage, pledge, hypothecation or encumbrance is
intended to take place or become effective before or after any distribution of
Trust Fund assets or the termination of the Trust. Furthermore, the Trustee
shall not be required to recognize any conveyance, transfer, assignment,
mortgage, pledge, hypothecation or encumbrance by a Participant or Beneficiary
of the Trust, or any part or interest in it, or to pay any money or thing of
value to any creditor or assignee of a Participant or Beneficiary for any cause
whatsoever.
This Section shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
qualified domestic relations order (as defined in Section 414(p) of the Code).
In addition, in the event that, pursuant to a qualified domestic relations
order described above, an Account or subaccount is established for the benefit
of the former spouse or dependent of a Participant ("alternate payee"), and in
the further event that Participants are entitled to direct the investment of
their Accounts in accordance with Section 4.10, unless the Committee otherwise
prescribes pursuant to uniformly applied nondiscriminatory rules formulated by
the Committee, any alternate payee shall be considered to be a Participant for
purposes of Section 4.10 and, thus, shall be entitled to direct the investment
of such Account or subaccount.
XII-1
<PAGE> 130
In the event that the Committee receives notice that a domestic
relations order that is intended to be qualified domestic relations order is
being prepared and will be provided to the Committee within a reasonably short
time, the Committee may place a temporary hold on the distribution of benefits
under the Plan to the affected Participant, pending (a) the determination of
whether such order is a qualified domestic relations order within the meaning
of Section 414(p) of the Code, and (b) the rights of the alternate payee under
such order; provided that no such temporary hold shall prevent the Plan from
making any distributions required by Section 6.6(a)(iv) hereof.
12.4 Gender, Tense and Headings: Whenever the context so requires,
words of the masculine gender used herein shall include the feminine and
neuter, and words used in the singular shall include the plural. The words
"herein," "hereof," "hereunder," and other similar compounds of the word "here"
shall refer to the entire Plan, not to any particular Section or provision of
the Plan. Headings of Articles, Sections and subsections as used herein are
inserted solely for convenience and reference and constitute no part of the
Plan.
12.5 Severability: Each term and provision of the Plan is severable,
and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision.
12.6 Governing Law; Parties to Legal Actions: The terms and
provisions of the Plan shall be construed, administered, and governed under the
laws of the State of Texas and, to the extent applicable, by the laws of the
United States. The Trustee or any Employer may at any time initiate a legal
action or proceeding for the settlement of the account of the Trustee, for the
determination of any question, or for instructions. The only necessary parties
to any such action or proceeding are the Trustee, the Plan Sponsor or other
affected Employer; however, any other person may be included as a party at the
election of the Trustee, the Plan Sponsor or other affected Employer.
12.7 Notices: Except as otherwise specifically provided under the
Plan, any notice, description, explanation, direction, consent, election,
waiver or other information required or permitted to be given under the Plan
shall be sufficient if it is in writing and otherwise complies with the
requirements of applicable provisions of the Plan and rules established by the
Committee and if hand-delivered to the Participant, Beneficiary, member of the
Committee, Trustee or other person to whom such communication is to be given,
or if sent by registered mail (return receipt requested) or by any other
reasonable method to such person at the address last furnished by such person.
Any such communication described in the immediately preceding sentence shall be
effective as of the date of the postmark if mailed via registered mail and the
return receipt is received by the sender, or upon actual receipt by the party
receiving such communication in the event that (i) such return receipt is not
received by the sender or (ii) such communication was given by in-hand delivery
or by any other reasonable method.
12.8 Counterparts: This Plan and Trust may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the
XII-2
<PAGE> 131
same instrument. It shall not be necessary that any single counterpart hereof
be executed by all parties so long as each party executes at least one
counterpart.
IN WITNESS WHEREOF, the Plan Sponsor and the Trustee have caused this
Agreement to be executed this ______ day of ________________, 1994, to be
effective as of the Effective Date of January 1, 1991, except as otherwise
provided under certain terms or provisions of the Plan.
ATTEST: CAMCO INTERNATIONAL INC.
By: By:
-------------------------------- ----------------------------------
Name: President
------------------------------
Title:
-----------------------------
By:
---------------------------------
Ronald R. Randall, as Trustee
By:
---------------------------------
Herbert S. Yates, as Trustee
XII-3
<PAGE> 132
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
This instrument was acknowledged before me on ________________________
by _________________, President of Camco International Inc., a Delaware
corporation, on behalf of said corporation.
-------------------------------------
Notary Public in and for
the State of Texas
Printed Name:
------------------------
My commission expires:
---------------
THE STATE OF TEXAS )
)
COUNTY OF __________ )
This instrument was acknowledged before me on __________________________
by Ronald R. Randall and Herbert S. Yates, individuals, as trustees of the Reed
Hourly Thrift Plan.
-------------------------------------
Notary Public in and for
the State of Texas
Printed Name:
------------------------
My commission expires:
---------------
XII-4
<PAGE> 1
EXHIBIT 15.1
[Arthur Andersen LLP Letterhead]
December 18, 1996
To Camco International Inc.:
We are aware that Camco International Inc. has incorporated by reference in
this Form S-8 registration statement its Form 10-Qs for the quarters ended
March 31, 1996, June 30, 1996, and September 30, 1996, which include our
reports dated April 16, 1996, July 16, 1996, and October 15, 1996, covering
the unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933, each of these reports is not
considered a part of the registration statement prepared or certified by our
firm or reports prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
ARTHUR ANDERSEN LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our report dated February
7, 1996 included in Camco International Inc.'s Form 10-K for the year ended
December 31, 1995, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
December 18, 1996
