<PAGE> 1
As filed with the Securities and Exchange Commission on July 31, 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)
<TABLE>
<S> <C>
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)
</TABLE>
CAMCO 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 . . . 1,000,000 shares(1) $34.32(2) $34,320,000 $11,835
- ------------------------------------------------------------------------------------------------------------------------------------
Rights to Purchase shares of Common
Stock . . . . . . . . . . . . . . . 1,000,000(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 July 29,
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 Camco 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 Camco 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. 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;
4. 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
5. 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.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
II-1
<PAGE> 3
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.
<TABLE>
<CAPTION>
ITEM 8. EXHIBITS.
<S> <C> <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 3.4 to the Registrant's
Registration Statement on Form S-1 (Reg. No.
33-70036)).
</TABLE>
II-2
<PAGE> 4
<TABLE>
<S> <C> <C>
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 -- Camco 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-5 of this
Registration Statement).
</TABLE>
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:
(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
II-3
<PAGE> 5
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, 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-4
<PAGE> 6
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.
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 the 30th day of
July, 1996.
CAMCO INTERNATIONAL INC.
By:/s/ GARY D. NICHOLSON
------------------------------------
Gary D. Nicholson
Chairman of the Board, President and
Chief Executive Officer
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 and July 30, 1996
------------------------------------------ Chief Executive Officer (Principal
Gary D. Nicholson Executive Officer)
/s/ HERBERT S. YATES Senior Vice President-Finance July 30, 1996
------------------------------------------ and Chief Financial Officer
Herbert S. Yates (Principal Financial Officer)
/s/ BRUCE F. LONGAKER, JR. Vice President-Finance July 30, 1996
------------------------------------------ and Corporate Controller
Bruce F. Longaker, Jr. (Principal Accounting Officer)
Director
------------------------------------------
Hugh H. Goerner
/s/ ROBERT L. HOWARD Director July 29, 1996
------------------------------------------
Robert L. Howard
Director
------------------------------------------
William J. Johnson
/s/ WILLIAM A. KRAUSE Director July 29, 1996
------------------------------------------
William A. Krause
/s/ CHARLES P. SIESS, JR. Director July 29, 1996
------------------------------------------
Charles P. Siess, Jr.
/s/ GILBERT H. TAUSCH Director July 29, 1996
------------------------------------------
Gilbert H. Tausch
</TABLE>
II-6
<PAGE> 8
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 July 30, 1995.
CAMCO THRIFT PLAN
By /s/ HERBERT S. YATES
-------------------------------------
Herbert S. Yates, Trustee
By /s/ RONALD R. RANDALL
-------------------------------------
Ronald R. Randall, Trustee
II-7
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page Number
-------------- ---------------------------------------- -----------
<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 Camco 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-5 of this Registration
Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.6
CAMCO THRIFT PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1987)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.1 Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.2 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.3 Active Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.4 Affiliated Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.5 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.6 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.7 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.8 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.9 Compensation Deferral Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.10 Considered Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.11 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.12 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.13 Elective Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.14 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.15 Employee Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.16 Employee Voluntary Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.17 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.18 Employer Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.19 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.20 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.21 Leased Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.22 Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.23 Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.24 Non-Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.25 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.26 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.27 Plan Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.28 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.29 Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.30 Profit Sharing Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.31 Qualified Non-Elective Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.32 Retired Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.33 Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.34 Rollover Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.35 Telephonic Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.36 Total and Permanent Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
1.37 Transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
1.38 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
1.39 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
1.40 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
1.41 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
ARTICLE II EMPLOYEES ELIGIBLE TO PARTICIPATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
2.1 Eligibility Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
2.2 Frozen Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3
2.3 Active Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3
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-11
4.5 Daily Valuation of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-11
4.6 Forfeitures and Allocation Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-12
4.7 Effective Date of Allocations and Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . IV-15
4.8 Accounting for Transferred Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-16
4.9 No Vesting Unless Otherwise Prescribed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-16
4.10 Investment Elections with Respect to Commingled Funds . . . . . . . . . . . . . . . . . . . . . . IV-16
4.11 Special Transition Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-18
ARTICLE V RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.1 Normal Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.2 Late Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.3 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-17
6.8 Withdrawals by Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-18
</TABLE>
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6.9 Claims Procedure for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-23
6.10 Loans to Participants and Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-24
6.11 Distributions to Divorced Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-29
6.12 Special Transition Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-30
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-6
ARTICLE VIIICOMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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
</TABLE>
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ARTICLE X ADOPTION OF PLAN BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
10.1 Adoption Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
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 General Transition Rules Relating to Amendment, Restatement and Continuation of Plan . . . . . . . XII-2
12.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-3
12.7 Governing Law; Parties to Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-4
12.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-4
12.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-4
</TABLE>
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CAMCO 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, Camco, Incorporated, heretofore adopted the profit sharing plan
and trust which were embodied in the instrument entitled "Camco, Incorporated
Employees' Thrift Plan" (the "Prior Plan") which instrument was 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 has been determined that said Prior Plan should be
completely amended, restated and continued without a gap or lapse in coverage,
time or effect of a qualified plan and exempt trust under applicable provisions
of the Code in order (i) to effect numerous technical changes for the benefit
of eligible employees and beneficiaries thereof, (ii) to ensure that the terms
and provisions of the Prior Plan continue to meet the requirements for
qualification and exemption under applicable provisions of the Code and to
comply with applicable provisions of the Act following amendment of the Code
and the Act by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation
Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the Technical and
Miscellaneous Revenue Act of 1988 and the Omnibus Budget Reconciliation Act of
1989, the Unemployment Compensation Amendments of 1992, the Omnibus Budget
Reconciliation Act of 1993, and regulations and other applicable guidance
promulgated by appropriate governmental agencies pursuant to such legislation;
(iii) to establish individual direction of investments by Participants; (iv) to
change the name of the Prior Plan to the "Camco International Inc. Thrift Plan"
primarily to reflect the change in name of the Plan Sponsor; and (v) to change
the name, effective as of January 1, 1994, of the amended and restated plan to
"Camco Thrift Plan" (the "Plan"), primarily for simplification; 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;
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NOW, THEREFORE, the parties hereto enter into this agreement, as a
complete amendment, restatement and continuation of the Prior Plan under the
form of the Plan hereinafter set forth, without a gap or lapse in coverage,
time or effect of a qualified plan and exempt trust under applicable provisions
of the Code, as follows:
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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. With respect to Plan
Years that commence prior to January 1, 1989, accounts shall be maintained in
accordance with the requirements of the Prior Plan. 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.
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<PAGE> 9
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 commencing after December 31, 1988 and 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:
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(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 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, 1987,
the effective date of the complete amendment, restatement and continuation of
the Camco, Incorporated Employees' Thrift Plan under the form of this 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 every person employed as a
common law employee by an Employer, including, in the case of a corporation,
officers (but excluding any director unless the director is also a salaried
officer or other common law employee). In accordance with the requirements of
Section 414(n) of the Code, any Leased Employee shall be treated as an Employee
of the recipient Employer, however, contributions or benefits provided by the
Leasing Organization (described in the definition of Leased Employee) which are
attributable to services performed for the recipient Employer shall be treated
as provided by the recipient Employer. Provided that Leased Employees do not
comprise more than 20 percent of the recipient's nonhighly compensated work
force (described in Section 414(n)(5)(C) of the Code), the preceding sentence
shall not apply if such Leased Employee is covered by a money purchase pension
plan providing: (i) an nonintegrated employer contribution rate of at least 10
percent of compensation, (ii) immediate participation by each employee of the
Leasing Organization other than (a) employees who perform substantially all of
their services for the Leasing Organization and (b) any individual whose
compensation (as defined in Section 415(c)(3) of the Code, including also
amounts contributed 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) from the Leasing
Organization in each Plan Year
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<PAGE> 11
during the 4-year period ending with the Plan Year is less than $1,000, and
(iii) full and immediate vesting.
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.
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
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<PAGE> 12
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.
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 Camco International Inc. Thrift
Plan, as renamed the "Camco Thrift Plan" effective as of January 1, 1994,
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.
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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 Prior Plan: "Prior Plan" shall mean the "Camco, Incorporated
Employees' Thrift Plan" as in effect prior to its amendment, restatement and
continuation under the form of this Plan, but subject to any transitional dates
as set forth in various sections of this Plan. The term "Prior Plan" shall
also include any other defined contribution plan described in Section 414(i) of
the Code (excluding any plan that is subject to the minimum funding standards
of Section 412 of the Code or that is required to provide a qualified joint and
survivor annuity or a qualified preretirement survivor annuity described in
Sections 401(a)(11) and 417 of the Code), which plan at all times relevant met
the requirements for qualification under Section 401(a) or 403(a) of the Code
as in effect on the date immediately prior to the date that such plan was
completely amended, restated and continued under the form of the Plan, without
a gap or lapse in coverage, time or effect of a qualified plan and exempt trust
under applicable provisions of the Code.
1.30 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.
1.31 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.
1.32 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.
1.33 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.
1.34 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 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.
1.35 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.
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<PAGE> 14
1.36 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.
1.37 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.
1.38 Trust: "Trust" shall mean the trust estate created under the
Plan.
1.39 Trustee: "Trustee" shall mean the trustee or trustees
qualified and acting hereunder or any successor or successors appointed by the
Board.
1.40 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.
1.41 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.
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<PAGE> 15
ARTICLE II
EMPLOYEES ELIGIBLE TO PARTICIPATE
2.1 Eligibility Requirements: Subject to compliance with
applicable provisions of Section 3.2, every Employee who was a participant in a
Prior Plan on the date immediately prior to the date such Prior Plan was
amended, restated and continued under the form of the Plan, shall be deemed to
be a Participant hereunder as of the date such Prior Plan was amended, restated
and continued under the form of the Plan. With respect to Plan Years
commencing prior to January 1, 1989, every other Employee who has completed
five (5) months or more of Active Service shall be eligible to participate in
the Plan as of the January 1 or July 1 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 the Employee satisfies the aforementioned eligibility
requirements. With respect to Plan Years commencing on or after January 1,
1989, an Employee not described in the first sentence of this paragraph 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. Notwithstanding the above, employees of the Reda Pump Division
of TRW, Inc. ("Reda") who, as of the date that the Plan Sponsor acquired
substantially all of the assets of Reda, satisfy the aforementioned eligibility
requirements shall participate in the Plan as of the date of such asset
acquisition.
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
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<PAGE> 16
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; provided, however, this sentence shall
not apply in the case of an Employee who completes at least one hour of service
under the Plan or Prior Plan on or after the Plan Year commencing after
December 31, 1984 if the Employee's prior period of Active Service would have
been disregarded under applicable provisions of the Plan or Prior Plan as of
the date immediately prior to the first day of the Plan Year beginning after
December 31, 1984. 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.
Except as otherwise provided above, Employees who are included in a
unit of Employees covered by an agreement which the U.S. Secretary of Labor
finds to be a collective bargaining agreement between an Employees'
representative and an Employer shall be excluded from participation in the Plan
if (i) there is evidence that retirement benefits were the subject of good
faith bargaining between the Employees' representative and an Employer and (ii)
the agreement does not require an Employer to include such Employees in this
Plan. For purposes of the preceding sentence the term "Employees'
representative" shall not include any organization more than one-half of the
members of which are Employees who are owners, officers or executives of an
Employer.
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 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 Sections 401(a) and 410(b) of the Code. 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.
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<PAGE> 17
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.
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.
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<PAGE> 18
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. With respect to
acquisitions occurring on or before October 1, 1988, and subject to other
applicable provisions of the Plan, solely for purposes of determining
eligibility and vesting credit under the Plan, employees of acquired business
units who were active employees on both the date of acquisition and October 1,
1988 shall receive full credit under the Plan for all periods of service with
their respective business units prior to the acquisition thereof by an
Employer. With respect to acquisitions occurring after October 1, 1988, credit
for service before such acquisition shall be given to employees of acquired
business units for purposes of eligibility and vesting under the Plan only to
the extent specified in the purchase and sale agreement by which the Employer
acquired the business unit by which such employee was employed immediately
prior to such acquisition.
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. With respect to Plan Years beginning after December 31, 1984, in the
case of an Employee who completes at least one hour of service under the Plan or
any Prior Plan on or after the beginning of any Plan Year commencing after
December 31, 1984, (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 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; provided,
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<PAGE> 19
however, in the case of an Employee who completes at least one hour of service
under the Plan on or after the first day of the Plan Year commencing after
December 31, 1984, any period of service which would have been disregarded
under the Plan or any Prior Plan, as of the date immediately prior to the first
day of any Plan Year after December 31, 1984, shall not be recognized under the
Plan. 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) begins after
the first day of the Plan Year beginning after December 31, 1984, and which 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 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,
sickness, disability, leave of absence, or layoff. In addition, any period of
absence which is not described in the preceding sentence, which (1) begins on
or after the first day of the Plan Year
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<PAGE> 20
beginning after December 31, 1984, and which 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 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.
Notwithstanding any other provision of the Plan to the contrary, the
provisions of this paragraph shall govern the method for determining and
crediting Active Service with respect to any Employee covered under any Prior
Plan. For purposes of determining the Active Service of a Participant who was
a participant in and had an interest under a Prior Plan as of the date
immediately prior to the date that the Prior Plan was amended and continued
under the form of the Plan, such Participant shall be credited with Active
Service (for his period(s) of service prior to the date that the Prior Plan was
amended and continued under the form of the Plan) equal to the service
determined and credited to such Participant under applicable provisions of the
Prior Plan as of the date immediately prior to the date that the Prior Plan was
amended and continued under the form of the Plan. For purposes of determining
such Participant's Active Service for the period(s) of service continuing or
commencing on or after the date that the Prior Plan was amended and continued
under the form of the Plan, such Participant's Active Service shall be
determined using the methods set out under applicable provisions of the Plan,
unless the Plan is retroactively effective as of a date which occurs within a
computation period of a Prior Plan (under which service credit was determined
with reference to computation periods and hours of service credited thereto).
In such event, Active Service shall be determined and credited with respect to
such computation period under applicable provisions of the Prior Plan if
necessary to ensure that a Participant does not lose service credit otherwise
recognizable under the Prior Plan with respect to such computation period, and
then Active Service of any such Participant for period(s) of service continuing
or commencing on or after the end of such computation period shall be
determined using the methods set out under applicable provisions of the Plan.
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<PAGE> 21
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 lieu of
receipt of such amounts in cash, Participants may authorize an
Employer to make
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<PAGE> 22
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.
(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
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<PAGE> 23
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 beginning after December 31, 1986,
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 taxable year of any Participant which
begins after December 31, 1987, 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.
III-3
<PAGE> 24
(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
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
III-4
<PAGE> 25
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
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.
III-5
<PAGE> 26
Notwithstanding any other provision of this Section to the
contrary, with respect to taxable years that began in 1987, the method
employed by the Plan (of such time) for computing the income allocable
to excess deferrals for such taxable year, shall supersede and
override any inconsistent provisions of this Section. Provided,
however, the provisions of the immediately preceding sentence shall
not apply with respect to taxable years beginning after 1987.
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> 27
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, 1996:
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, 1996: 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
III-7
<PAGE> 28
of 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), 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.
(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),
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.
III-8
<PAGE> 29
(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%).
For purposes of the immediately preceding sentence, for Plan Years
commencing after December 31, 1986, 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, for Plan Years beginning after December 31, 1988, if (i)
any Highly Compensated Employee is eligible to authorize Elective
Contributions
III-9
<PAGE> 30
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 within the
relevant Plan Year, or would have been so paid or includible
but for a reduction described in clause (i) immediately above,
III-10
<PAGE> 31
(iii) that does not exceed (A) for Plan Years
beginning on or after January 1, 1989 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. With respect to Plan Years commencing after December 31,
1988, 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 Section 401(a)(4) or 410(b) of
the Code (other than Section 410(b)(2)(A)(ii) of the Code as in effect
for Plan Years which begin after December 31, 1988), all cash or
deferred arrangements that are included in such plans are to be treated
as a single arrangement for
III-11
<PAGE> 32
purposes of this Section and Sections 401(a)(4), 401(k) and 410(b) of
the Code. For Plan Years beginning after December 31, 1989, 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. For Plan Years beginning
after December 31, 1988, 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. For Plan Years beginning
after 1988, 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.
With respect to Plan Years beginning after December 31, 1986,
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
III-12
<PAGE> 33
Nonforfeitable Contributions Account of all such eligible 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> 34
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> 35
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> 36
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> 37
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, for Plan Years
commencing after December 31, 1986, 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, for
Plan Years beginning after December 31, 1988, 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
III-17
<PAGE> 38
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 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, 1989 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.
With respect to Plan Years commencing after December 31, 1988, 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 as in effect for Plan Years
which began after December 31, 1988), all employee and matching
contributions
III-18
<PAGE> 39
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. For Plan Years beginning after
December 31, 1989, 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 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. For Plan Years
beginning after 1988, 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.
With respect to Plan Years beginning after December 31, 1986,
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
III-19
<PAGE> 40
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 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
III-20
<PAGE> 41
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
(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
III-21
<PAGE> 42
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 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
III-22
<PAGE> 43
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 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.
III-23
<PAGE> 44
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 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),
III-24
<PAGE> 45
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 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
III-25
<PAGE> 46
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 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
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<PAGE> 47
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 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
III-27
<PAGE> 48
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 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.
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<PAGE> 49
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
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.
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<PAGE> 50
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 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:
III-30
<PAGE> 51
(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;
(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.
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<PAGE> 52
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
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<PAGE> 53
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.
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<PAGE> 54
(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.
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<PAGE> 55
(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
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<PAGE> 56
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
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<PAGE> 57
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:
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(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, after March 31, 1984, 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 after December 31, 1985, in taxable years
ending after such date, 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. The Annual
Addition for any Limitation Year beginning before January 1,
1987 shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(ii) Compensation -- For each Limitation Year
commencing after December 31, 1989, 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). For each
Limitation Year commencing prior to January 1, 1990,
Compensation for purposes of this Section shall be defined by
reference to Section 1.415-2(d)(1) and (2) of the income tax
regulations.
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(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 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.
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If the Participant was a Participant as of the end of
the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined contribution plans
maintained by an Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the Defined Benefit Fraction would
otherwise exceed 1.0 under the terms of the Plan. Under the
adjustment, an amount equal to the product of (1) the excess
of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the end of
the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat any
Employee Contributions as Annual Additions.
(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 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
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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 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.
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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 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:
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(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 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, 1994, shall be
deemed to have been forfeited during the first Plan Year that commenced
immediately after December 31, 1994 and shall be applied as herein
provided.
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(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 who terminates employment with any Employer
and all Affiliated Employers and who (i) either (A) has a zero percent
(0%) vested interest in his Employer Contributions Account or (B) 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 (ii) pursuant to Section 6.6, receives a distribution
(including a direct rollover pursuant to Section 6.6(c) 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 subclause (i)(A) 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 subclause (i)(B) 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 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
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<PAGE> 65
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 distribution attributable to Employer Contributions in order to
restore his Employer Account.
(e) Distributions Other than Lump Sum Payments Made 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 payment or commenced to
receive payments of a termination distribution from his Employer
Account in a form other than a lump sum distribution subject to the
provisions of Section 4.6(b), 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
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<PAGE> 66
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 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.
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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 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
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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
provisions 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 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
preapproved 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, Sections 9.4 and 9.5 shall govern the rights of the affected
Participants and Beneficiaries with respect to voting and tending
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 give
Plan
IV-17
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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
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.
(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 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.
4.11 Special Transition Rule: Notwithstanding any other provisions
of the Plan to the contrary, if the Plan is retroactively effective with respect
to any Plan Year (or other applicable accounting period) of a Prior Plan, the
Account of any individual who was a participant or Participant during such Plan
Year (or other applicable accounting period) shall be credited with any Employer
Contributions under the Plan attributable to such Plan Year if such
Participant's Account would have been entitled to such an allocation under the
Prior Plan immediately prior to the later of (i) the adoption of or (ii) the
effective date of the amendment and continuation of the Prior Plan under the
form of the Plan. In addition, notwithstanding any other provision of the Plan
to the contrary, if the participant or Participant described in the preceding
sentence
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would have been so entitled under the Prior Plan immediately prior to the later
of (i) the adoption of or (ii) the effective date of, its amendment and
continuation under the form of the Plan, the Account of such Participant shall
be charged or credited with its proportionate share of the Trust Fund's income,
gains, losses, appreciation or depreciation attributable to the Plan Year or
other applicable accounting period (or portion thereof).
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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 has completed at least five (5) years of
Active Service for vesting purposes.
5.1 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.
5.2 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.
5.3 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
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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
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<PAGE> 73
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, commencing
with Plan Years beginning after October 22, 1986, 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
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the necessity of obtaining consent of the Participant's spouse no longer
exists. If no designation 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
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<PAGE> 75
made or recharacterized after the end of such accounting period, any
Contributions, Rollover 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.
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%
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
or Prior 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
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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) and Section
6.6(b), 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(c) 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:
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<PAGE> 77
(1) A lump-sum payment; or
(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(c) 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
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or any Beneficiary other than such Participant's spouse, if
applicable. Such payment may be made as soon as practicable,
but (absent circumstances beyond 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
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<PAGE> 79
(2) the participant, after receiving the
notice, affirmatively elects a distribution.
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
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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 Section 1.401(a)(9)-2 of the proposed Income
Tax Regulations or any successor or final regulation issued
with respect thereto. Unless otherwise specified, the
provisions of this Section 6.6(a)(iv) apply to calendar years
beginning after December 31, 1984.
(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
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dividing the Participant's vested Benefit by
the Applicable Life Expectancy.
(B) For calendar years beginning
before January 1, 1989, if the Participant's
spouse is not the Designated Beneficiary, the
method of distribution selected must assure
that at least 50% of the present value of the
amount available for distribution is paid
within the Life Expectancy of the
Participant.
(C) 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 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.
(D) 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
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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
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
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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
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.
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(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.
(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.
VI-13
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(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:
(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)
VI-14
<PAGE> 86
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 Transition Rules: Notwithstanding the above
requirements of Sections 6.6(a), if applicable, distribution on behalf
of any Participant, including a Key Employee in a Top-Heavy plan (as
such terms are defined in Section 7.4), may be made in accordance with
the following requirements of this Section 6.6(b) (regardless of when
such distribution commences):
(i) The distribution by the Plan is one which
would not have disqualified such Plan under Section 401(a)(9)
of the Code as in effect prior to amendment by the Tax Reform
Act of 1984;
(ii) The distribution is in accordance with a
method of distribution designated by the Participant whose
interest in the Plan is being distributed or, if the
Participant is deceased, by a Beneficiary of such Participant;
(iii) Such designation was in writing, was signed
by the Participant or the Beneficiary, and was made before
January 1, 1984;
(iv) The Participant had accrued a benefit under
the Plan or any Prior Plan as of December 31, 1983; and
(v) The method of distribution designated by the
Participant or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Participant's death, the Beneficiaries
of the Participant listed in order of priority.
A distribution upon death will not be covered by this Section 6.6(b)
unless the information in the designation contains the required
information described above with respect to distribution to be made
upon the death of the Participant. For any distribution which commences
before January 1, 1984, but continues after December 31, 1983, the
Participant, or the Beneficiary, to whom such distribution is being
made, will be presumed to have designated that method of distribution
if the method of distribution was specified in writing and the
distribution satisfies the requirements of applicable law. If a
designation is revoked, any subsequent distribution must satisfy the
requirements of
VI-15
<PAGE> 87
Section 401(a)(9) of the Code and regulations or other authority
issued thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Plan must distribute by the
end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would
have been required to have been distributed to satisfy Section
401(a)(9) of the Code and regulations or other authority issued
thereunder, but for the Section 242(b)(2) election. For calendar
years beginning after December 31, 1988, such distributions must meet
the minimum distribution incidental benefit requirements set forth in
Section 1.401(a)(9)-2 of the proposed Income Tax Regulations or any
successor regulation. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to be
made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the event that an amount is
transferred or rolled over from one plan to another plan, the rules
set forth in the regulations or other authority issued under Section
401(a)(9) of the Code shall apply.
(c) Special Rules Regarding Direct Rollovers:
(i) General Rule: This Section 6.6(c) 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(c), 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(c), 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
VI-16
<PAGE> 88
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.
(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
VI-17
<PAGE> 89
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.
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
VI-18
<PAGE> 90
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.
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;
VI-19
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(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
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-20
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(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 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
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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 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
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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 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.
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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) after
October 18, 1989, 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 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
VI-24
<PAGE> 96
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 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, with respect to any loan made after October 18, 1989, 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
VI-25
<PAGE> 97
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 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,
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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.
(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
VI-27
<PAGE> 99
(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 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.
With respect to any loan made prior to October 19, 1989, 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. With respect to
VI-28
<PAGE> 100
any loan made after October 18, 1989, 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 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
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<PAGE> 101
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."
6.12 Special Transition Rule: Notwithstanding any other provisions
of the Plan to the contrary, if the Plan is retroactively effective with
respect to any Plan Year (or other applicable accounting period) of a Prior
Plan, the benefit payable under the Plan to any Participant who terminated
employment during such Plan Year (or other applicable accounting period shall)
be determined with reference to the special transition rules of Sections 2.3,
4.12 and 12.5.
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<PAGE> 102
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.
With respect to plan years beginning after December 31, 1984, 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-
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<PAGE> 103
Heavy. If a Permissive Aggregation Group is Top-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.
VII-2
<PAGE> 104
The accrued benefit of a Participant (other than a Key Employee) shall
be determined (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
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<PAGE> 105
the rollover counts the rollover in the present value of the accrued
benefits. Rules for related rollovers do not depend on whether the
rollover was accepted prior to January 1, 1984. The provisions of
this Section 7.2 shall not apply to direct rollovers described in
Section 6.6(c).
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 beginning after December 31, 1983, 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, 1989,
$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, with respect to
Plan Years beginning after December 31, 1984, 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) with respect to Plan Years beginning after December 31, 1988, 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
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<PAGE> 106
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) with
respect to Plan Years beginning after December 31, 1988, any matching
contribution (described 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.
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<PAGE> 107
7.4 Definitions: For purposes of this Article VII, the following
terms shall be defined as follows:
(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 for plan years beginning after December 31, 1986 (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 for plan
years beginning prior to January 1, 1987); 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;
VII-6
<PAGE> 108
(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 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.
VII-7
<PAGE> 109
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 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
VII-8
<PAGE> 110
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.
(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, with
respect to Plan Years beginning after December 31, 1988, 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,
1989,
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<PAGE> 111
$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.
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<PAGE> 112
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> 113
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(c) 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> 114
(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> 115
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.
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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.
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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,
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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,
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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
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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
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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
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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
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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
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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
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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
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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 Advisors 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.
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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.
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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.
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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
after July 30, 1984, 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 beginning
after December 31, 1988, 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.
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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
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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
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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 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
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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,
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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(c) 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),
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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.
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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, hypothecate 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.
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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 General Transition Rules Relating to Amendment, Restatement
and Continuation of Plan: This Section shall generally apply to any Prior
Plan.
(a) Application of Plan: Except as otherwise provided
under the Plan, in the event that an Employer adopts the Plan as an
amendment, restatement and continuation of a Prior Plan, the
provisions of the Plan shall apply only to Employees whose employment
with an Employer terminates after the effective date of the Plan. If
an Employee's employment with an Employer terminates prior to the
effective date of an Employer's adoption of the Plan, the former
Employee shall be entitled to benefits under the terms and provisions
of Employer's Prior Plan as that plan existed on the date of the
termination of employment.
(b) Maintenance of Accounts: Amounts credited to a
Participant's accounts under the Prior Plan as in effect immediately
prior to the effective date of its amendment, restatement and
continuation hereunder shall constitute the opening balances of
corresponding Accounts established under the Plan. To the extent that
individual direction of investment of individual Accounts is no longer
permitted under the Plan after the effective date of an Employer's
adoption thereof, the Committee may direct that such Accounts shall be
liquidated and the proceeds shall establish opening Account balances
as of the date specified by the Committee, whereupon such Accounts
shall become part of the commingled Trust Fund subject to otherwise
applicable rules for allocating income, gain, loss, appreciation or
depreciation to Accounts.
(c) Employee Elections: Employee elections (under the
Prior Plan as in effect immediately prior to the effective date of its
amendment, restatement and continuation hereunder) with respect to
Employee contribution rates, investment thereof, etc., shall continue
in effect under the Plan unless the Committee otherwise directs.
Similarly, any beneficiary designation in effect under the Prior Plan
immediately prior to its
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amendment, restatement and continuation hereunder shall be deemed to
be a valid designation filed with the Committee under applicable
provisions of the Plan, to the extent consistent with the Plan and
applicable law and regulations or other authority issued thereunder by
the appropriate governmental authority, unless and until the
Participant revokes such Beneficiary designation under applicable
provisions of the Plan.
(d) Contributions: With respect to Plan Years that
commenced prior to January 1, 1989, the terms and provisions of the
Plan document and Prior Plan document (as in effect at such time)
which govern determination of the amount of (i) any contributions
(therein described) and (ii) the Participants entitled to share in the
allocation of contributions shall apply to Participants who were
subject thereto during such Plan Years solely for the purpose of
determining (i) the amount of any such contribution and (ii) the
Participants who are entitled to share in the allocations thereof for
any such Plan Year.
(e) Withdrawals and Loans: Except to the extent
inconsistent with applicable law and regulations or other authority
issued thereunder by the appropriate governmental authority, and
unless the Committee otherwise directs, any withdrawals authorized and
loans made under the Prior Plan, as in effect immediately prior to the
effective date of its amendment, restatement and continuation
hereunder, shall continue to be governed by the terms and provisions
of the Prior Plan as it existed on the date of the withdrawal and/or
loan. Provided, however, any withdrawals or loans permitted under the
Plan after its effective date shall be governed solely by terms and
provisions of the Plan.
(f) Accounting: Unless the Committee otherwise directs,
Trust Fund accounting for income, gain, loss, appreciation and
depreciation and forfeitures under the Prior Plan, as in effect
immediately prior to the effective date of its amendment, restatement
and continuation hereunder, shall not be affected by the adoption of
the Plan.
(g) Distribution of Benefits: Amounts being paid to a
Participant who is a former Employee of an Employer, or such person's
Beneficiary under the Prior Plan, as in effect immediately prior to
the effective date of its amendment, restatement and continuation
hereunder, shall continue to be paid in accordance with the terms and
provisions of the Prior Plan.
(h) Continued Term of Plan Officials: Unless the
Committee otherwise directs, members of the committee (or comparable
administrator or governing authority) and the agent for service of
legal process under the Prior Plan shall not continue in such
capacities under the Plan.
12.6 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.
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12.7 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.
12.8 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.
12.9 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 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.
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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, 1987, except as otherwise
provided under certain terms or provisions of the Plan.
ATTEST: CAMCO INTERNATIONAL INC.
By: ________________________________ By:_________________________________
President
Name: ______________________________
Title:_______________________________
By:_________________________________
Ronald R. Randall, as Trustee
By:_________________________________
Herbert S. Yates, as Trustee
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<PAGE> 141
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
Camco International Inc. Thrift Plan.
________________________________________
Notary Public in and for
the State of Texas
Printed Name:__________________________
My commission expires:_________________
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<PAGE> 1
EXHIBIT 15.1
[Arthur Andersen LLP Letterhead]
July 30, 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-Q for the quarter ended March
31, 1996, which includes our report dated April 16, 1996, covering the
unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933, that report is not considered a
part of the registration statements prepared or certified by our firm or a
report 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
July 30, 1996
