1
EXHIBIT 10.16
KANEB SERVICES LLC
401(k) SAVINGS PLAN
2
KANEB SERVICES LLC 401(k) SAVINGS PLAN
THIS AGREEMENT adopted by Kaneb Services LLC, a Delaware limited
liability company (the "Sponsor"),
WITNESSETH:
WHEREAS, the Sponsor desires to establish a profit sharing retirement
plan that is intended to satisfy the requirements of sections 401(a) and 401(k)
of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, the Sponsor hereby adopts the Plan, the terms of which
are set forth below.
3
TABLE OF CONTENTS
SECTION
ARTICLE I - DEFINITIONS
Account.............................................................................................1.01
Affiliated Employer.................................................................................1.02
Annual Compensation.................................................................................1.03
Beneficiary or Beneficiaries........................................................................1.04
Benefit Commencement Date...........................................................................1.05
Board ..............................................................................................1.06
Code ...............................................................................................1.07
Committee...........................................................................................1.08
Computation Period..................................................................................1.09
Considered Compensation.............................................................................1.10
Contribution........................................................................................1.11
Direct Rollover.....................................................................................1.12
Disability..........................................................................................1.13
Distributee.........................................................................................1.14
Eligible Retirement Plan............................................................................1.15
Eligible Rollover Distribution......................................................................1.16
Eligibility Service.................................................................................1.17
Employee............................................................................................1.18
Employer or Employers...............................................................................1.19
Entry Date..........................................................................................1.20
ERISA ..............................................................................................1.21
Five Percent Owner..................................................................................1.22
Forfeitable Interest................................................................................1.23
Highly Compensated Employee.........................................................................1.24
Hour of Employment..................................................................................1.25
Hour of Service.....................................................................................1.26
Leased Employee.....................................................................................1.27
Mandatory Cashout Amount............................................................................1.28
Matched Salary Deferral Contribution................................................................1.29
Maternity or Paternity Absence......................................................................1.30
Member..............................................................................................1.31
Nonforfeitable Interest.............................................................................1.32
Non-Highly Compensated Employee.....................................................................1.33
Normal Retirement Age...............................................................................1.34
Period of Service...................................................................................1.35
Period of Severance.................................................................................1.36
Plan ..............................................................................................1.37
Plan Year...........................................................................................1.38
Qualified Domestic Relations Order..................................................................1.39
Regulation..........................................................................................1.40
-i-
4
Required Beginning Date.............................................................................1.41
Rollover Contribution...............................................................................1.42
Separation From Service.............................................................................1.43
Severance From Service Date.........................................................................1.44
Servers Service.....................................................................................1.45
Sponsor.............................................................................................1.46
Spouse..............................................................................................1.47
Top-Paid Group......................................................................................1.48
Top-Paid Group Determination Year...................................................................1.49
Trust ..............................................................................................1.50
Trustee.............................................................................................1.51
Valuation Date......................................................................................1.52
Vesting Service.....................................................................................1.53
ARTICLE II - ELIGIBILITY
Eligibility Requirements............................................................................2.01
Early Participation for Salary Deferral Contribution and Rollover Purposes..........................2.02
Eligibility Upon Reemployment.......................................................................2.03
Cessation of Participation..........................................................................2.04
Recommencement of Participation.....................................................................2.05
ARTICLE III - CONTRIBUTIONS
Salary Deferral Contributions.......................................................................3.01
Matching Contributions..............................................................................3.02
Supplemental Contributions..........................................................................3.03
Rollover Contributions and Plan-to-Plan Transfers...................................................3.04
QNECS - Extraordinary Employer Contributions........................................................3.05
Restoration Contributions...........................................................................3.06
Restorative Payments................................................................................3.07
Nondeductible Contributions Not Required............................................................3.08
Deadline for Payment of Employer Contributions......................................................3.09
Return of Contributions for Mistake,
Disqualification or Disallowance of Deduction.................................................3.10
ARTICLE IV - ALLOCATION AND VALUATION OF ACCOUNTS
Information Statements from Employer................................................................4.01
Allocation of Salary Deferral Contribution..........................................................4.02
Allocation of Matching Contribution.................................................................4.03
Allocation of Supplemental Contribution.............................................................4.04
Allocation of QNEC..................................................................................4.05
Valuation of Accounts...............................................................................4.06
No Rights Unless Otherwise Prescribed...............................................................4.07
ARTICLE V - BENEFITS
Benefit Upon Separation From Service................................................................5.01
-ii-
5
Distribution Method Available.......................................................................5.02
Direct Rollover Option..............................................................................5.03
Time of Distribution................................................................................5.04
Consent to Distribution Upon Separation From Service................................................5.05
Information Provided to Members.....................................................................5.06
Immediate Payment of Small Benefit..................................................................5.07
Designation of Beneficiary..........................................................................5.08
Distribution to Disabled Person.....................................................................5.09
Distribution Pursuant to Qualified Domestic Relations Order.........................................5.10
Claims Procedure....................................................................................5.11
ARTICLE VI - IN-SERVICE DISTRIBUTIONS AND LOANS
In-Service Financial Hardship Distributions.........................................................6.01
In-Service Age 59 1/2 Distributions.................................................................6.02
Loans ..............................................................................................6.03
ARTICLE VII - VESTING
ARTICLE VIII - ELIGIBILITY SERVICE AND VESTING SERVICE
Eligibility Service.................................................................................8.01
Vesting Service.....................................................................................8.02
Disregard of Certain Service........................................................................8.03
Special Rules for Maternity or Paternity Absences...................................................8.04
Definition of Hour of Employment....................................................................8.05
Service Credit Required by Federal Law..............................................................8.06
Employment Records Conclusive.......................................................................8.07
ARTICLE IX - FORFEITURES AND RESTORATIONS
Forfeiture on Termination of Participation..........................................................9.01
Restoration of Forfeited Amounts....................................................................9.02
Forfeitures by Lost Members or Beneficiaries........................................................9.03
Application of Forfeitures..........................................................................9.04
ARTICLE X - INVESTMENT ELECTIONS
Investment Funds Established.......................................................................10.01
Election Procedures Established....................................................................10.02
ARTICLE XI - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure.................................................................................11.01
No Joint Venture Implied...........................................................................11.02
All Trust Assets Available to Pay All Benefits.....................................................11.03
Qualification a Condition Precedent to Adoption and Continued Participation........................11.04
-iii
6
ARTICLE XII - AMENDMENT AND TERMINATION
Right to Amend and Limitations Thereon.............................................................12.01
Mandatory Amendments...............................................................................12.02
Withdrawal of Employer Upon its Rejection of an Amendment..........................................12.03
Termination of Participation in the Plan...........................................................12.04
Termination of Plan................................................................................12.05
Partial or Complete Termination or Complete Discontinuance of Contributions........................12.06
ARTICLE XIII - MISCELLANEOUS
Plan Not an Employment Contract....................................................................13.01
Benefits Provided Solely from Trust................................................................13.02
Assignments Prohibited.............................................................................13.03
Requirements Upon Merger or Consolidation of Plans.................................................13.04
Gender of Words Used...............................................................................13.05
Severability.......................................................................................13.06
Reemployed Veterans................................................................................13.07
Limitations on Legal Actions.......................................................................13.08
Governing Law......................................................................................13.09
APPENDIX A - LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
APPENDIX B - TOP-HEAVY REQUIREMENTS
APPENDIX C - ADMINISTRATION OF THE PLAN
APPENDIX D - FUNDING
-iv-
7
ARTICLE I
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in the definition unless the context in which the word or phrase appears
reasonably requires a broader, narrower or different meaning.
1.01 "ACCOUNT" means all ledger accounts pertaining to a Member which
are maintained by the Committee to reflect the Member's interest in the Trust.
The Committee shall establish the following accounts and any additional accounts
that the Committee considers necessary to reflect the entire interest of the
Member in the Trust. Each of the accounts listed below and any additional
accounts established by the Committee shall reflect the Contributions made to
the Trust on behalf of a Member and the appreciation or depreciation of the
assets in the Trust and the income earned or loss incurred on the assets in the
Trust attributable to the Contributions and/or other amounts transferred to the
account.
(a) Salary Deferral Contribution Account - the Member's
before-tax contributions, if any, made pursuant to Section 3.01.
(b) Matching Contribution Account - the Employer's matching
contributions, if any, made pursuant to Section 3.02.
(c) Supplemental Contribution Account - the Employer's
contributions, if any, made pursuant to Section 3.03.
(d) Rollover Account - funds rolled over or transferred from
another qualified plan or individual retirement account for the benefit
of a Member.
(e) QNEC Account - the Employer's contributions, known as
"qualified nonelective employer contributions", made as a means of
passing the actual deferral percentage test of section 401(k) of the
Code or the actual contribution percentage test of section 401(m) of
the Code.
1.02 "AFFILIATED EMPLOYER" means the Employer and any 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), which is a member of an affiliated service group (within
the meaning of section 414(m) of the Code) with the Employer, or which is
required to be aggregated with the Employer under section 414(o) of the Code.
For purposes of the limitation on allocations contained in Appendix A, the
definition of Affiliated Employer is modified by substituting the phrase "more
than 50 percent" in place of the phrase "at least 80 percent" each place the
latter phrase appears in section 1563(a)(1) of the Code.
1.03 "ANNUAL COMPENSATION" means the Employee's wages from the
Affiliated Employers as defined in section 3401(a) of the Code for purposes of
federal income tax withholding at the source (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)
I-1
8
modified by including elective contributions under a cafeteria plan described in
section 125 of the Code and elective contributions to any plan qualified under
section 401(k), 408(k), or 403(b) of the Code. Except for purposes of Section
A.4.1 of Appendix A of the Plan, Annual Compensation in excess of $150,000.00
(as adjusted by the Secretary of Treasury) shall be disregarded. If the Plan
Year is ever less than twelve months, the $150,000.00 limitation (as adjusted by
the Secretary of Treasury) will be prorated by multiplying the limitation by a
fraction, the numerator of which is the number of months in the Plan Year, and
the denominator of which is 12.
1.04 "BENEFICIARY" OR "BENEFICIARIES" means the person or persons, or
the trust or trusts created for the benefit of a natural person or persons or
the Member's estate, designated by the Member to receive the benefits payable
under the Plan upon his death.
1.05 "BENEFIT COMMENCEMENT DATE" means (1) if the Member does not elect
to defer receipt of his distribution, the date of the Member's Separation From
Service or (2) if the Member elects to defer receipt of his distribution, the
earlier of the date on which the Member requests to receive a distribution or
the date on which a distribution may be made without his consent under Section
5.05.
1.06 "BOARD" means the board of directors of the Sponsor.
1.07 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
1.08 "COMMITTEE" means the committee described in Appendix C that is
responsible for the day-to-day administration of the Plan.
1.09 "COMPUTATION PERIOD" shall have the meaning specified in Section
8.01.
1.10 "CONSIDERED COMPENSATION" means as to each Employee, that
Employee's Annual Compensation modified by excluding the following items (even
if includable in gross income): awards, tax gross-up payments, reimbursements or
other expense allowances (such as the payment of moving expenses or automobile
mileage reimbursements), cash and noncash fringe benefits, deferred compensation
other than Salary Deferral Contributions (such as options) and welfare benefits
(such as severance pay). If an Employee is a Highly Compensated Employee,
bonuses paid to him will not be Considered Compensation. Compensation paid to an
Employee during any period in which the Employee does not satisfy the
eligibility requirements of Section 2.01 will not be Considered Compensation.
Considered Compensation in excess of $150,000.00 (as adjusted by the Secretary
of Treasury) will be disregarded. If the Plan Year is ever less than twelve
months, the $150,000.00 limitation (as adjusted by the Secretary of Treasury)
will be prorated by multiplying the limitation by a fraction, the numerator of
which is the number of months in the Plan Year, and the denominator of which is
12.
1.11 "CONTRIBUTION" means the total amount of contributions made under
the terms of the Plan. Each specific type of Contribution shall be designated by
the type of contribution made as follows:
(a) Salary Deferral Contribution - a contribution made by the
Employer pursuant to the Employee's salary deferral agreement.
I-2
9
(b) Matching Contribution - a contribution made by the
Employer pursuant to Section 3.02.
(c) Supplemental Contribution - a contribution made by the
Employer pursuant to Section 3.03.
(d) Rollover Contribution - a contribution made by a Member
pursuant to Section 3.04.
(e) QNEC - an extraordinary contribution, known as a
"qualified nonelective employer contribution", made by the Employer
pursuant to Section 3.05 as a means of passing the actual deferral
percentage test of section 401(k) of the Code or the actual
contribution percentage test of section 401(m) of the Code.
1.12 "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.13 "DISABILITY" means a physical or mental condition which, in the
judgment of the Committee, based upon medical reports and other evidence
satisfactory to the Committee, will permanently prevent the Employee from
satisfactorily performing his usual duties for his Employer or the duties of
such other position or job for which the Employee is qualified by reason of his
training, education or experience, and which (1) was not incurred while the
Employee was engaged in a felonious criminal enterprise, and (2) did not result
from alcoholism, addiction to narcotics or a self-inflicted injury.
1.14 "DISTRIBUTEE" means the Member, the Member's surviving Spouse, the
Member's Spouse, or the Member's former Spouse who is an alternate payee under a
Qualified Domestic Relations Order.
1.15 "ELIGIBLE RETIREMENT PLAN" means 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 plan described in section 401(a) of the Code
that is a defined contribution plan that accepts the Distributee's Eligible
Rollover Distribution. However, in the case of an Eligible Rollover Distribution
to a Distributee who is the Member's surviving Spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
1.16 "ELIGIBLE ROLLOVER DISTRIBUTION" means any distribution of all or
any portion 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 for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of ten years or more; (b)
any distribution to the extent the 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); and, (d) any
financial hardship distribution described in section 401(k)(2) of the Code from
a Member's Salary Deferral Contribution Account or from the
I-3
10
Member's QNEC Account (to the extent that QNECs were treated as Section 401(k)
Contributions under Appendix A).
1.17 "ELIGIBILITY SERVICE" means service for which an Employee is
entitled to receive credit under Article VIII for purposes of initial
eligibility to participate in the Plan.
1.18 "EMPLOYEE" means, except as otherwise specified in this Section,
all common law employees of an Affiliated Employer and all Leased Employees.
1.19 "EMPLOYER" OR "EMPLOYERS" means the Sponsor and any other business
organization that adopts the Plan with the consent of the Sponsor.
1.20 "ENTRY DATE" means the first day of each calendar quarter, January
1, April 1, July 1, and October 1.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.22 "FIVE PERCENT OWNER" means a person who is a five percent owner as
defined in section 416(i) of the Code.
1.23 "FORFEITABLE INTEREST" means a Member's forfeitable interest in
his Account balance determined under Article VIII.
1.24 "HIGHLY COMPENSATED EMPLOYEE" means an Employee of an Affiliated
Employer who, (a) during either the calendar year for which a determination of
an Employee's status as a Highly Compensated Employee or a Non-Highly
Compensated Employee is being made, or the preceding calendar year, was at any
time a Five Percent Owner or (b) during the Top-Paid Group Determination Year
had Annual Compensation from the Affiliated Employers in excess of $80,000.00
(as adjusted from time to time by the Secretary of the Treasury) and was in the
Top-Paid Group for such Top-Paid Group Determination Year. A former Employee
shall be treated as a Highly Compensated Employee if (1) he was a Highly
Compensated Employee when he incurred a Separation From Service, or (2) he was a
Highly Compensated Employee at any time after attaining age 55.
1.25 "HOUR OF EMPLOYMENT" shall have the meaning specified in Section
8.05.
1.26 "HOUR OF SERVICE" means each hour that an Employee is paid or
entitled to payment by an Affiliated Employer for the performance of duties.
1.27 "LEASED EMPLOYEE" means any person who (a) is not a common law
employee of an Affiliated Employer, (b) pursuant to an agreement between an
Affiliated Employer and any other person, has performed services for an
Affiliated Employer (or for an Affiliated Employer and related persons
determined in accordance with section 414(n)(6) of the Code) on a substantially
full-time basis for a period of at least one year and (c) performs the services
under primary direction or control by the recipient.
I-4
11
1.28 "MANDATORY CASHOUT AMOUNT" means the dollar amount specified in
section 411(a)(11) of the Code as it may be amended from time to time.
1.29 "MATCHED SALARY DEFERRAL CONTRIBUTION" means that portion of a
Member's Salary Deferral Contribution that does not exceed six percent of the
Member's Considered Compensation for the Plan Year.
1.30 "MATERNITY OR PATERNITY ABSENCE" means a period in which an
Employee is absent from work (a) by reason of the pregnancy of the Employee, (b)
by reason of the birth of a child of the Employee, (c) by reason of the
placement of a child with the Employee in connection with the adoption of the
child by the Employee, or (d) for purposes of caring for such child for a period
immediately following such birth or placement for adoption.
1.31 "MEMBER" means an Employee or a former Employee who has an Account
balance under the Plan.
1.32 "NONFORFEITABLE INTEREST" means a Member's nonforfeitable interest
in his Account balance determined under Article VII, Section 12.05, Appendix B
and other applicable provisions of the Plan.
1.33 "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee who is not a
Highly Compensated Employee.
1.34 "NORMAL RETIREMENT AGE" means age 65.
1.35 "PERIOD OF SERVICE" means a period of service for an Affiliated
Employer which commences on the day on which an Employee performs his initial
Hour of Service or performs his initial Hour of Service after he Xxxxxx Service,
whichever is applicable, and ends on the date the Employee subsequently Xxxxxx
Service.
1.36 "PERIOD OF SEVERANCE" means the period of time which commences on
the Employee's Severance from Service Date and ends on the date the Employee
subsequently performs an Hour of Service.
1.37 "PLAN" means the Kaneb Services LLC 401(k) Savings Plan, as
amended from time to time.
1.38 "PLAN YEAR" means the calendar year.
1.39 "QUALIFIED DOMESTIC RELATIONS ORDER" means an order which the
Committee determines is a qualified domestic relations order as defined in
section 414(p) of the Code.
1.40 "REGULATION" means the Department of Treasury regulation
specified, as it may be changed from time to time.
I-5
12
1.41 "REQUIRED BEGINNING DATE" means:
(a) in the case of an individual who is not a Five Percent
Owner in the Plan Year that ends in the calendar year in which he
attains age 70 1/2, the Required Beginning Date is April 1 of the
calendar year following the later of (1) the calendar year in which the
individual attains age 70 1/2, or (2) the calendar year in which the
individual incurs a Separation From Service; and
(b) in the case of an individual who is a Five Percent Owner
in the Plan Year that ends in the calendar year in which he attains age
70 1/2, the Required Beginning Date is April 1 of the calendar year
following the year in which he attains age 70 1/2.
1.42 "ROLLOVER CONTRIBUTION" means the amount contributed by a Member
of the Plan which consists of any part of an Eligible Rollover Distribution from
a qualified employee trust described in section 401(a) of the Code.
1.43 "SEPARATION FROM SERVICE" means an individual's termination of
employment with an Affiliated Employer without commencing or continuing
employment with (a) any other Affiliated Employer or (b) any other entity under
such circumstances that, under Regulations and Internal Revenue Service rulings,
the individual is not deemed to have incurred a Separation From Service within
the meaning of section 401(k)(2) of the Code.
1.44 "SEVERANCE FROM SERVICE DATE" means the earlier of the date of the
Employee's Separation From Service, or the first anniversary of the date on
which the Employee is absent from service (with or without pay) for any reason
other than his Separation From Service or a Maternity or Paternity Absence, such
as vacation, holiday, sickness, or a leave of absence other than a Maternity or
Paternity Absence. The Severance From Service Date of an Employee who is absent
beyond the first anniversary of his first day of absence by reason of a
Maternity or Paternity Absence is the second anniversary of the first day of the
absence.
1.45 "XXXXXX SERVICE" means the occurrence of a Member's Severance From
Service Date.
1.46 "SPONSOR" means Kaneb Services LLC, a Delaware limited liability
company.
1.47 "SPOUSE" means the person to whom the Member is married under
applicable local law. In addition, to the extent provided in a Qualified
Domestic Relations Order, a surviving former spouse of a Member will be treated
as the Spouse of the Member and to the same extent any current spouse of the
Member will not be treated as a Spouse of the Member.
1.48 "TOP-PAID GROUP" means an Employee who, for the Top-Paid Group
Determination Year in question, is in the group consisting of the top 20 percent
of the Employees when ranked on the basis of Annual Compensation paid for the
Top-Paid Group Determination Year. For purposes of determining the number of
Employees in the Top-Paid Group, the following shall be excluded: (1) an
Employee who has not been an employee for at least six months by the end of the
Top-Paid Group Determination Year (2) an Employee who normally works less than
17 1/2 hours per week for Affiliated Employers (disregarding any weeks during
which the Employee performed no services for Affiliated Employers), (3) an
Employee who
I-6
13
normally works for Affiliated Employers not more than six months during a
calendar year (determined by disregarding the Top-Paid Group Determination Year,
and by treating the individual as having worked for a month for any month in
which he has worked for one day for an Affiliated Employer), (4) an Employee who
has not attained the age of 21, and (5) except to the extent provided in
Regulations, an Employee who is included in a unit of Employees covered by a
collective bargaining agreement between Employee representatives and an
Affiliated Employer.
1.49 TOP-PAID GROUP DETERMINATION YEAR" means the calendar year
immediately preceding the calendar year for which a determination of the
Employee's status as a Highly Compensated Employee or a Non-Highly Compensated
Employee is being made.
1.50 "TRUST" means the trust estate created to fund the Plan.
1.51 "TRUSTEE" means collectively one or more persons or corporations
with trust powers which have been appointed by the initial Sponsor and have
accepted the duties of Trustee and any successor appointed by the Sponsor.
1.52 "VALUATION DATE" means each business day of the Plan Year.
1.53 "VESTING SERVICE" means service for which an Employee is entitled
to receive credit under Article VIII for purposes of determining his
Nonforfeitable Interest in amounts credited to his Account.
I-7
14
ARTICLE II
ELIGIBILITY
2.01 ELIGIBILITY REQUIREMENTS. Except as specified in this Section 2.01
or in Section 2.02 below, each Employee who has completed one year of
Eligibility Service as of June 1, 2001 shall be eligible to participate in the
Plan on July 1, 2001. Except as specified below, any other Employee who is
employed by an Employer shall be eligible to participate in the Plan beginning
on the First Entry Date after June 1, 2001 that occurs with or next follows the
date on which the Employee completes one year of Eligibility Service. An
Employee shall not be eligible to participate in the Plan during any period in
which he is included in a unit of Employees covered by a collective bargaining
agreement between Employee representatives and the Employer shall be excluded if
there has been good faith bargaining between the Employer and the Employee
representatives pertaining to retirement benefits and the agreement does not
require the Employer to include the Employee in the Plan. In addition, a Leased
Employee shall not be eligible to participate in the Plan unless the Plan's
qualified status is dependent upon coverage of the Leased Employee. An Employee
who is a nonresident alien (within the meaning of section 7701(b) of the Code)
and receives no earned income (within the meaning of section 911(d)(2) of the
Code) from any Affiliated Employer that constitutes income from sources within
the United States (within the meaning of section 861(a)(3) of the Code) is not
eligible to participate in the Plan. During any period in which an individual is
classified by an Employer as an independent contractor with respect to such
Employer, the individual is not eligible to participate in the Plan (even if he
is subsequently reclassified by the Internal Revenue Service or a court as a
common law employee of the Employer and the Employer acquiesces to the
reclassification). An Employee who is a nonresident alien (within the meaning of
section 7701(b) of the Code) and receives no earned income (within the meaning
of section 911(d)(2) of the Code) from any Affiliated Employer that constitutes
income from sources within the United States (within the meaning of section
861(a)(3) of the Code) is not eligible to participate in the Plan. An Employee
who is a nonresident alien (within the meaning of section 7701(b) of the Code)
and who does receive earned income (within the meaning of section 911(d)(2) of
the Code) from any Affiliated Employer that constitutes income from sources
within the United States (within the meaning of section 861(a)(3) of the Code)
all of which is exempt from United States income tax under an applicable tax
convention is not eligible to participate in the Plan. An Employee who is
expatriated to the United States from another country is not eligible to
participate in the Plan for so long as he continues to accrue deferred
compensation or retirement benefits under any agreement or program to which an
Affiliated Employer other than an Employer is a party. Finally, an Employee who
is employed outside the United States is not eligible to participate in the Plan
unless the Committee elects to permit him to participate in the Plan.
2.02 EARLY PARTICIPATION FOR SALARY DEFERRAL CONTRIBUTION AND ROLLOVER
PURPOSES. An Employee who satisfies the eligibility requirements specified in
Section 2.01 other than the service requirement shall be eligible to make Salary
Deferral Contributions and Rollover Contributions to the Plan on the later of
June 1, 2000 or the first day of the month next following (not coincident with)
the date on which he completes an Hour of Employment.
2.03 ELIGIBILITY UPON REEMPLOYMENT. If an Employee incurs a Separation
From Service with the Employer prior to the date he initially begins
participating in the Plan, he shall
II-1
15
be eligible to begin participation in the Plan on the later of (1) the date he
would have commenced participation in the Plan if he had not incurred a
Separation From Service or (2) the date on which he performs an Hour of Service
after his Separation From Service. Subject to Section 2.04, once an Employee
commences participation in the Plan, his eligibility to participate in the Plan
shall continue until he Xxxxxx Service.
2.04 CESSATION OF PARTICIPATION. An individual who has commenced
participation in the Plan will cease participation in the Plan on the earliest
of the date on which he (a) Xxxxxx Service, (b) is transferred from the employ
of an Employer to the employ of an Affiliated Employer that has not adopted the
Plan, (c) becomes included in a unit of employees covered by a collective
bargaining agreement that does not require coverage of those employees under the
Plan, (d) becomes a Leased Employee, or (e) becomes included in another
classification of Employees who, under the terms of the Plan, are not eligible
to participate. Under these circumstances, the Member's Account becomes frozen;
he cannot contribute to the Plan or share in the allocation of any Contributions
for the frozen period. However, his Account shall continue to share in any Plan
income allocable to his Account during the frozen period of time.
2.05 RECOMMENCEMENT OF PARTICIPATION. A person who previously
participated in the Plan will again participate in the Plan on the day on which
he becomes included in a classification of Employees that, under the terms of
the Plan, is eligible to participate.
II-2
16
ARTICLE III
CONTRIBUTIONS
3.01 SALARY DEFERRAL CONTRIBUTIONS. The Employer shall make a Salary
Deferral Contribution in an amount equal to the amount by which its Members'
Considered Compensation was reduced as a result of salary deferral agreements.
Any such salary deferral agreement shall be an agreement in a form satisfactory
to the Committee to prospectively receive Considered Compensation from the
Employer in a reduced amount and to have the Employer contribute an amount equal
to the amount of the reduction to the Trust on account of the Member. Further,
any such salary deferral agreement shall be revocable in accordance with its
terms, provided that no revocation shall be retroactive or permit payment to the
Member of the amount required to be contributed to the Trust. A Member's right
to benefits derived from Salary Deferral Contributions made to the Plan on his
behalf shall be nonforfeitable. The maximum amount a Member may elect to reduce
his Considered Compensation under his salary deferral agreement shall be
determined by the Committee, in its sole discretion from time to time. In
addition, the election to have Salary Deferral Contributions made, the ability
to change the rate of Salary Deferral Contributions, the right to suspend Salary
Deferral Contributions, and the manner of commencing new Salary Deferral
Contributions shall be permitted under any uniform method determined by the
Committee from time to time.
3.02 MATCHING CONTRIBUTIONS. The Employer will make a Matching
Contribution in an amount equal to 50 percent of the Matched Salary Deferral
Contributions of all Members for the Plan Year.
3.03 SUPPLEMENTAL CONTRIBUTIONS. The Employer shall contribute a
Supplemental Contribution in an amount equal to two percent of the Considered
Compensation of all Members during the Plan Year or such greater amount as shall
be determined by the Employer.
3.04 ROLLOVER CONTRIBUTIONS AND PLAN-TO-PLAN TRANSFERS. The Committee
may permit Rollover Contributions by Members and/or direct transfers to or from
another qualified plan on behalf of Members from time to time. If Rollover
Contributions and/or direct transfers to or from another qualified plan are
permitted, the opportunity to make those contributions and/or direct transfers
must be made available to Members on a nondiscriminatory basis. For this purpose
only, all Employees who are included in a classification of Employees who are
eligible to participate in the Plan shall be considered to be Members of the
Plan even though they may not have met the Eligibility Service requirements for
eligibility. However, they shall not be entitled to elect to have Salary
Deferral Contributions made or to share in Employer Contributions or forfeitures
unless and until they have met the requirements for eligibility, contributions
and allocations. A Rollover Contribution shall not be accepted unless it is
directly rolled over to the Plan in a rollover described in section 401(a)(31)
of the Code. A Member shall not be permitted to make a Rollover Contribution if
the property he intends to contribute is for any reason unacceptable to the
Trustee. A Member's right to benefits attributable to his Rollover Contributions
made to the Plan shall be nonforfeitable.
3.05 QNECS - EXTRAORDINARY EMPLOYER CONTRIBUTIONS. Any Employer may
make a QNEC in such amount, if any, as shall be determined by it. A Member's
right to benefits
III-1
17
derived from QNECs made to the Plan on his behalf shall be nonforfeitable. In no
event will QNECs be distributed before Salary Deferral Contributions may be
distributed.
3.06 RESTORATION CONTRIBUTIONS. The Employer shall, for each Plan Year,
make a restoration contribution in an amount equal to the sum of (1) such
amount, if any, as shall be necessary to fully restore all Matching Contribution
Accounts and Supplemental Contribution Accounts required to be restored pursuant
to the provisions of Section 9.02 after the application of all forfeitures
available for such restorations; plus (2) an amount equal in value to the value
of forfeited benefits described in and payable under Section 9.03, after the
application of all forfeitures available for such restorations.
3.07 RESTORATIVE PAYMENTS. If due to an oversight or inadvertent error
an Employer fails to make a Contribution to the Plan on behalf of an Employee,
as soon as administratively practicable following the Employee's discovery of
the error, the Employer shall make a restorative payment to the Plan on behalf
of the Employee in an amount equal to the amount of required Contributions the
Employer should have made to the Plan on behalf of the Employee plus interest
thereon (both determined in a manner that is consistent with then current
guidance from the Department of Treasury concerning such restorative payments)
after the application of forfeitures available for such restoration.
3.08 NONDEDUCTIBLE CONTRIBUTIONS NOT REQUIRED. Notwithstanding any
other provision of the Plan, no Employer shall be required to make any
contribution that would be a "nondeductible contribution" within the meaning of
section 4972 of the Code.
3.09 DEADLINE FOR PAYMENT OF EMPLOYER CONTRIBUTIONS. Salary Deferral
Contributions shall be paid to the Trustee in installments. The installment for
each payroll period shall be paid as soon as administratively feasible. The
Matching Contributions, the Supplemental Contributions and QNECs for a Plan Year
shall be paid to the Trustee in one or more installments, as the Employer may
from time to time determine; provided, however, that such contributions may not
be paid later than the time prescribed by law (including extensions thereof) for
filing the Employer's income tax return for its taxable year ending with or
within such Plan Year.
3.10 RETURN OF CONTRIBUTIONS FOR MISTAKE, DISQUALIFICATION OR
DISALLOWANCE OF DEDUCTION. Subject to the limitations of section 415 of the
Code, the assets of the Trust shall not revert to any Employer or be used for
any purpose other than the exclusive benefit of the Members, former Members, and
their Beneficiaries and the reasonable expenses of administering the Plan
except:
(a) any Employer Contribution made because of a mistake of
fact may be repaid to the Employer within one year after the payment of
the Contribution;
(b) all Employer Contributions are conditioned upon the Plan's
initial qualification under section 401 of the Code and may be repaid
to the Employer within one year after the date of denial of the initial
qualification of the Plan; and
III-2
18
(c) all Employer Contributions are conditioned upon their
deductibility under section 404 of the Code; therefore, to the extent
the deduction is disallowed, the Contributions may be repaid to the
Employer within one year after the disallowance.
The Employer has the exclusive right to determine if a Contribution or
any part of it is to be repaid or is to remain as a part of the Trust except
that the amount to be repaid is limited, if the Contribution is made by mistake
of fact or if the deduction for the Contribution is disallowed, to the excess of
the amount contributed over the amount that would have been contributed had
there been no mistake or over the amount disallowed. Earnings which are
attributable to any excess contribution cannot be repaid. Losses attributable to
an excess contribution must reduce the amount that may be repaid. All repayments
of Contributions made due to a mistake of fact or with respect to which a
deduction is disallowed are limited so that the balance in a Member's Account
cannot be reduced to less than the balance that would have been in the Member's
Account had the mistaken amount or the amount disallowed never been contributed.
III-3
19
ARTICLE IV
ALLOCATION AND VALUATION OF ACCOUNTS
4.01 INFORMATION STATEMENTS FROM EMPLOYER. Upon request by the
Committee, the Employer shall provide the Committee with a schedule setting
forth the amount of its Salary Deferral Contribution, Supplemental Contribution,
QNEC, and restoration contribution; the names of its Members, the number of
years of Vesting Service of each of its Members, the amount of Considered
Compensation and Annual Compensation paid to each Member, and the amount of
Considered Compensation and Annual Compensation paid to all its Members. Such
schedules shall be conclusive evidence of such facts.
4.02 ALLOCATION OF SALARY DEFERRAL CONTRIBUTION. The Committee shall
allocate the Salary Deferral Contribution among the Members by allocating to
each Member the amount by which his Considered Compensation was reduced pursuant
to a salary deferral agreement (as described in Section 3.01) and shall credit
each such Member's share to his Salary Deferral Contribution Account.
4.03 ALLOCATION OF MATCHING CONTRIBUTION. The Committee shall
separately allocate the Matching Contribution made by an Employer among the
Employer's Members in the proportion which the Matched Salary Deferral
Contributions of each such Member bears to the total Matched Salary Deferral
Contributions of all such Members. Each Member's proportionate share shall be
credited to his Matching Contribution Account.
4.04 ALLOCATION OF SUPPLEMENTAL CONTRIBUTION. For each Plan Year, the
Committee shall allocate the Supplemental Contribution made by an Employer among
the Members who are employed by the Employer during the Plan Year, based upon
each such Member's Considered Compensation paid by the Employer as compared to
the Considered Compensation for all such Members employed by the Employer and
eligible for the allocation.
4.05 ALLOCATION OF QNEC. The Committee shall separately allocate the
QNEC among the Non-Highly Compensated Employees who are Members based upon each
such Member's Considered Compensation as compared to the Considered Compensation
of all such Members.
4.06 VALUATION OF ACCOUNTS. A Member's Account shall be valued at fair
market value on each Valuation Date. The earnings and losses attributable to any
asset in the Trust will be allocated solely to the Account of the Member on
whose behalf the investment in the asset was made. In determining the fair
market value of the Member's Account, the Trustee shall utilize such sources of
information as it may deem reliable including, but not limited to, stock market
quotations, statistical evaluation services, newspapers of general circulation,
financial publications, advice from investment counselors or brokerage firms, or
any combination of sources which in the opinion of the Trustee will provide the
price such assets were last traded at on a registered stock exchange; provided,
however, that with respect to regulated investment company shares, the Trustee
shall rely exclusively on information provided to it by the investment adviser
to such funds.
IV-1
20
4.07 NO RIGHTS UNLESS OTHERWISE PRESCRIBED. No allocations,
adjustments, credits, or transfers shall ever vest in any Member any right,
title, or interest in the Trust except at the times and upon the terms and
conditions herein set forth.
IV-2
21
ARTICLE V
BENEFITS
5.01 BENEFIT UPON SEPARATION FROM SERVICE. Upon his Separation From
Service, a Member (or in the event the Member has died, his Beneficiary) is
entitled to receive his Nonforfeitable Interest in his Account balance
commencing no later than the applicable deadline specified in Section 5.04.
5.02 DISTRIBUTION METHOD AVAILABLE. The only distribution method
available under the Plan is a lump sum payment in cash.
5.03 DIRECT ROLLOVER OPTION. To the extent required under Regulations,
a Distributee has the right to direct that any portion of his Eligible Rollover
Distribution will be directly paid to an Eligible Retirement Plan specified by
him that will accept the Eligible Rollover Distribution.
5.04 TIME OF DISTRIBUTION. Notwithstanding any other provision of the
Plan, all benefits payable under the Plan shall be distributed, or commence to
be distributed, in compliance with the following provisions:
(a) DISTRIBUTION DEADLINES FOR CERTAIN MEMBERS WHO ARE AGE
70 1/2 OR OLDER. If a Member is required to receive a distribution
under section 401(a)(9) of the Code, the Member must elect to receive a
distribution in one lump sum or in installments which must commence by
his Required Beginning Date. If installments are elected, each
installment paid must be equal to or greater than the minimum required
distribution under section 401(a)(9) of the Code.
(b) DISTRIBUTION DEADLINE FOR DEATH BENEFITS. If a Member dies
before the distribution of his Plan benefit has commenced, his entire
interest shall be distributed within five years after his death. This
five-year deadline (as opposed to the life expectancy rule in section
401(a)(9)(B)) will apply in all cases.
(c) LIMITATIONS ON DEATH BENEFITS. Benefits payable under the
Plan shall not be provided in any form that would cause a Member's
death benefit to be more than incidental. Any distribution required to
satisfy the incidental benefit requirement shall be considered a
required distribution for purposes of section 401(a)(9) of the Code.
(d) COMPLIANCE WITH SECTION 401(a)(9). All distributions under
the Plan will be made in accordance with the requirements of section
401(a)(9) of the Code and all Regulations promulgated thereunder,
including Regulations that were proposed in January of 2001 (until
final Regulations are issued) but not including Regulations that were
proposed prior to January of 2001.
(e) COMPLIANCE WITH SECTION 401(a)(14). Unless the Member
otherwise elects, the payment of benefits under the Plan to the Member
will begin not later than the 60th day after the close of the Plan Year
in which occurs the latest of (a) the date on which the Member attains
the later of age 62 or Retirement Age, (b) the tenth
V-1
22
anniversary of the year in which the Member commenced participation in
the Plan, or (c) the date of the Member's Separation From Service.
5.05 CONSENT TO DISTRIBUTION UPON SEPARATION FROM SERVICE.
Notwithstanding any other provision of the Plan, no benefit shall be distributed
or commence to be distributed to a Member prior to his attainment of the later
of age 62 or Retirement Age without his consent, unless the benefit is payable
immediately under Section 5.07. Any such consent shall be valid only if given
not more than 90 days prior to the Member's Benefit Commencement Date and after
his receipt of the notice regarding benefits described in Section 5.06.
5.06 INFORMATION PROVIDED TO MEMBERS. Unless a Member's benefit is
payable immediately under Section 5.07, the Sponsor shall provide each Member
with a written explanation of the Member's right, if any, to defer receipt of
the distribution. The written explanation shall be provided to a Member no less
than 30 days and no more than 90 days before his Benefit Commencement Date
unless he legally waives this requirement.
5.07 IMMEDIATE PAYMENT OF SMALL BENEFIT. Notwithstanding any other
provision of the Plan other than Section 5.03, if a Member's Account balance at
the time of his Separation From Service is less than or equal to the Mandatory
Cashout Amount, his Account balance shall be paid to him (or in the event he has
died, to his Beneficiary) as soon as administratively practicable in the form of
a single sum payment. If a Distributee who is subject to this Section 5.07 does
not furnish instructions in accordance with Plan procedures to directly roll
over his Plan benefit within 45 days after he has been given direct rollover
forms, he will be deemed to have elected to receive a lump sum cash distribution
of his entire Plan benefit.
5.08 DESIGNATION OF BENEFICIARY. Each Member has the right to designate
and to revoke the designation of his Beneficiary or Beneficiaries. Each
designation or revocation must be evidenced by a written document in the form
required by the Committee, signed by the Member and filed with the Committee. If
no designation is on file at the time of a Member's death or if the Committee
determines that the designation is ineffective, the designated Beneficiary shall
be the Member's Spouse, if living, or if not, the executor, administrator or
other personal representative of the Member's estate. If a Member is considered
to be married under local law, the Member's designation of any Beneficiary,
other than the Member's Spouse, shall not be valid unless the spouse
acknowledges in writing that she understands the effect of the Member's
beneficiary designation and consents to it. The consent must be to a specific
Beneficiary. The written acknowledgement and consent must be filed with the
Committee, signed by the Spouse and at least two witnesses, one of whom must be
a member of the Committee or a notary public. However, if the Spouse cannot be
located or there exist other circumstances as described in sections 401(a)(11)
and 417(a)(2) of the Code, the requirement of the Member's Spouse's
acknowledgement and consent may be waived. If a Beneficiary other than the
Member's Spouse is named, the designation shall become invalid if the Member is
later determined to be married under local law, the Member's missing Spouse is
located or the circumstances which resulted in the waiver of the requirement of
obtaining the consent of the Member's Spouse no longer exist.
5.09 DISTRIBUTION TO DISABLED PERSON. If the Committee determines that
any person to whom a payment is due is unable to care for his affairs because of
physical or mental
V-2
23
disability, it shall have the authority to cause the payments to be made to the
Spouse, brother, sister or other person the Committee determines to have
incurred, or to be expected to incur, expenses for that person unless a prior
claim is made by a qualified guardian or other legal representative. The
Committee and the Trustee shall not be responsible to oversee the application of
those payments. Payments made pursuant to this power shall be a complete
discharge of all liability under the Plan and the Trust and the obligations of
the Employer, the Trustee, the Trust and the Committee.
5.10 DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDER. The
Committee will instruct the Trustee to pay benefits in accordance with the terms
of any order that has been determined, in accordance with Plan procedures, to be
a Qualified Domestic Relations Order. A Qualified Domestic Relations Order may
require the payment of an immediate cash lump sum to an alternate payee even if
the Member is not then entitled to receive an immediate payment of Plan
benefits.
5.11 CLAIMS PROCEDURE. When a benefit is due, the Member or Beneficiary
should submit a claim to the office designated by the Committee to receive
claims. Under normal circumstances, the Committee will make a final decision as
to a claim within 90 days after receipt of the claim. If the Committee notifies
the claimant in writing during the initial 90-day period, it may extend the
period up to 180 days after the initial receipt of the claim. The written notice
must contain the circumstances necessitating the extension and the anticipated
date for the final decision. If a claim is denied during the claims period, the
Committee must notify the claimant in writing. The denial must include the
specific reasons for it, the Plan provisions upon which the denial is based, any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary, and
the Plan's review procedures and time limits, including a statement of the
claimant's right to bring a civil action under section 502(a) of ERISA.
If a Member's or Beneficiary's claim is denied and he wants a review,
he must apply to the Committee in writing. That application can include any
arguments, written comments, documents, records, and other information relating
to the claim for benefits. In addition, the claimant is entitled to receive on
request and free of charge reasonable access to and copies of all information
relevant to the claim. For this purpose, "relevant" means information that was
relied on in making the benefit determination or that was submitted, considered
or generated in the course of making the determination, without regard to
whether it was relied on, and information that demonstrates compliance with the
Plan's administrative procedures and safeguards for assuring and verifying that
Plan provisions are applied consistently in making benefit determinations. The
Committee must take into account all comments, documents, records, and other
information submitted by the claimant relating to the claim, without regard to
whether the information was submitted or considered in the initial benefit
determination. The claimant may either represent himself or appoint a
representative, either of whom has the right to inspect all documents pertaining
to the claim and its denial. The Committee can schedule any meeting with the
claimant or his representative that it finds necessary or appropriate to
complete its review. The request for review must be filed within 90 days after
the denial. If it is not, the denial becomes final. If a timely request is made,
the Committee must make its decision, under normal circumstances, within 60 days
of the receipt of the request for review. However, if the Committee notifies the
claimant prior to the expiration of the initial review period, it may extend
V-3
24
the period of review up to 120 days following the initial receipt of the request
for a review. All decisions of the Committee must be in writing and must include
the specific reasons for its action, the Plan provisions on which its decision
is based, and a statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records,
and other information relevant to the claimant's claim for benefits, and a
statement of the claimant's right to bring an action under section 502(a) of
ERISA If a decision is not given to the claimant within the review period, the
claim is treated as if it were denied on the last day of the review period.
V-4
25
ARTICLE VI
IN-SERVICE DISTRIBUTIONS AND LOANS
6.01 IN-SERVICE FINANCIAL HARDSHIP DISTRIBUTIONS.
(a) General. Prior to his Separation From Service, a Member is
entitled to receive a distribution from his Salary Deferral
Contribution Account (except for income credited to his Salary Deferred
Contribution Account), his Rollover Account, his Nonforfeitable
Interest in his Matching Contribution Account and his Nonforfeitable
Interest in his Supplemental Contribution Account in the event of an
immediate and heavy financial need incurred by the Member and the
Committee's determination that the withdrawal is necessary to alleviate
that hardship.
(b) Permitted Reasons for Financial Hardship Withdrawals. A
distribution shall be made on account of financial hardship only if the
distribution is for: (1) Expenses for medical care described in section
213(d) of the Code previously incurred by the Member, the Member's
Spouse, or any dependents of the Member (as defined in section 152 of
the Code) or necessary for these persons to obtain medical care
described in section 213(d) of the Code, (2) costs directly related to
the purchase (excluding mortgage payments) of a principal residence for
the Member, (3) payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Member, his Spouse,
children, or dependents (as defined in section 152 of the Code), or (4)
payments necessary to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's
principal residence.
(c) Amount. A distribution to satisfy an immediate and heavy
financial need shall not be made in excess of the amount of the
immediate and heavy financial need of the Member and the Member must
have obtained all distributions, other than hardship distributions, and
all nontaxable (at the time of the loan) loans currently available
under all plans maintained by the Employer. The amount of a Member's
immediate and heavy financial need includes any amounts necessary to
pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the financial hardship distribution.
(d) Suspension of Participation in Certain Benefit Programs.
The Member's hardship distribution shall terminate his right to have
the Employer make any Salary Deferral Contributions on his behalf until
the next time Salary Deferral Contributions are permitted after the
lapse of 12 months following the hardship distribution and his timely
filing of a written request to resume his Salary Deferral
Contributions. In addition, for 12 months after he receives a hardship
distribution from the Plan, the Member is prohibited from making
elective contributions and employee contributions to or under all other
qualified and nonqualified plans of deferred compensation maintained by
the Employer. However, the Member is not prohibited from making
contributions to a health or welfare benefit plan, including one that
is part of a cafeteria plan within the meaning of section 125 of the
Code.
VI-1
26
(e) Resumption of Salary Deferral Contributions. When the
Member resumes Salary Deferral Contributions, he cannot have the
Employer make any Salary Deferral Contributions in excess of the limit
in section 402(g) of the Code for that taxable year reduced by the
amount of Salary Deferral Contributions made by the Employer on the
Member's behalf during the taxable year of the Member in which he
received the hardship distribution.
(f) Order of Withdrawals. Financial hardship distributions
will be made in the following order: First withdrawals will be made
from the Member's Supplemental Contribution Account, then from his
Matching Contribution Account, then from his Rollover Account, and
finally, from his Salary Deferral Contribution Account. A Member shall
not be entitled to receive a financial hardship distribution of any
amount credited to his QNEC Account, or of any income that is allocable
or credited to his Member's Salary Deferral Contribution Account.
(g) Method of Payment. Distributions pursuant to this Section
6.01 will be paid in lump sums in cash.
6.02 IN-SERVICE AGE 59 1/2 DISTRIBUTIONS. Prior to his Separation From
Service, a Member may withdraw part or all of his Nonforfeitable Interest in his
Account balance on or after the date that he attains age 59 1/2. Distributions
pursuant to this Section 6.02 will be paid in lump sums in cash.
6.03 LOANS. The Committee may direct the Trustees to make a loan to a
Member who is an Employee, or to a Beneficiary who is a "party in interest"
within the meaning of ERISA. The Committee will be responsible for administering
the Plan loan program. The Committee is authorized to adopt Plan loan
procedures. All loans will comply with the following requirements:
(a) All loans will be made solely from the Member's or
Beneficiary's Account.
(b) Loans will be available on a nondiscriminatory basis to
all Beneficiaries who are "parties in interest" within the meaning of
ERISA, and to all Members who are Employees.
(c) Loans will not be made for less than $1,000.00.
(d) The maximum amount of a loan may not exceed the lesser of
(1) $50,000.00 reduced by the person's highest outstanding loan balance
from the Plan during the preceding one-year period, or (2) one-half of
the person's Nonforfeitable Interest in his Account balance determined
as of the date on which the loan is approved by the Committee.
(e) Any loan from the Plan will be evidenced by a note or
notes (signed by the person applying for the loan) having such
maturity, bearing such rate of interest, and containing such other
terms as the Committee will require by uniform and nondiscriminatory
rules consistent with this Section and proper lending practices.
VI-2
27
(f) All loans will bear a reasonable rate of interest which
will be established by the Committee.
(g) Each loan will be fully secured by a pledge of the
borrowing person's Account balance. No more than 50 percent of the
person's Account balance (determined immediately after the origination
of the loan) will be considered as security for any loan.
(h) Generally, the term of the loan will not be more than five
years. The Committee may agree to a longer term only if such term is
otherwise reasonable and the proceeds of the loan are to be used to
acquire a dwelling which will be used within a reasonable time
(determined at the time the loan is made) as the principal residence of
the borrowing person.
(i) The terms of each Plan loan agreement will require
substantially level amortization of the loan (with payments not less
frequently than quarterly) over the term of the loan. However, the
level amortization requirement will not apply for a period, not longer
than one year (or such longer period as may apply under the Uniformed
Services Employment and Reemployment Rights Act of 1994 ("USERRA"))
that an eligible borrower is on a bona fide leave of absence, either
without pay from the Employer or at a rate of pay (after income and
employment tax withholding) that is less than the amount of the
installment payments required under the terms of the loan. However, the
loan (including interest that accrues during the leave of absence) must
be repaid by the five-year loan maturity deadline specified in
paragraph (h) above (unless the loan was a home loan described in
paragraph (h) above), and the amount of the installments due after the
leave ends (or, if earlier, after the first anniversary of the leave or
such longer period as may apply under USERRA) must not be less than the
amount required under the terms of the original loan.
(j) No amount that is pledged as collateral for a Plan loan to
a Member will be available for distribution or withdrawal before the
Member has fully repaid his loan.
(k) All interest payments made pursuant to the terms of the
loan agreement will be credited to the borrowing person's Account and
will not be considered as general earnings of the Trust to be allocated
to other Members.
(l) A Member may have no more than one Plan loan outstanding
at any time.
VI-3
28
ARTICLE VII
VESTING
A Member always has a fully Nonforfeitable Interest in amounts credited
to his Salary Deferral Contribution Account, his QNEC Account and his Rollover
Account. A Member has a fully Nonforfeitable Interest in amounts credited to his
Matching Contribution Account and his Supplemental Contribution Account when he
(1) attains his Normal Retirement Age on or prior to his Separation From
Service, (2) incurs a Separation From Service due to death or (3) incurs a
Separation From Service due to Disability. Prior to the occurrence of any of the
three events listed in the preceding sentence, a Member has a Nonforfeitable
Interest in amounts credited to his Matching Contribution Account and his
Supplemental Contribution Account determined in accordance with the following
vesting schedule:
IF THE MEMBER HAS COMPLETED THE FOLLOWING NUMBER OF HIS NONFORFEITABLE INTEREST
YEARS OF VESTING SERVICE IS
--------------------------------------------------- ---------------------------
Less than one year 0 percent
One but less than two 20 percent
Two but less than three 40 percent
Three but less than four 60 percent
Four but less than five 80 percent
Five or more 100 percent
Except as specified in this Article, subject to the possible
application of Section 12.06 or Section B.2.3 of Appendix B, a Member has no
Nonforfeitable Interest in amounts credited to his Matching Contribution Account
or his Supplemental Contribution Account. To the extent that a Member does not
have a Nonforfeitable Interest in amounts credited to his Matching Contribution
Account or his Supplemental Contribution Account, he has a Forfeitable Interest
in amounts credited to such accounts.
VII-1
29
ARTICLE VIII
ELIGIBILITY SERVICE AND VESTING SERVICE
8.01 ELIGIBILITY SERVICE. For the purpose of determining eligibility to
participate in the Plan, an Employee will earn one year of Eligibility Service
if he completes 1,000 Hours of Employment during a Computation Period. The
Computation Period is merely a measurement period during which an Employee must
earn 1,000 Hours of Employment in order to be credited with one year of
Eligibility Service. There is no requirement that the entire 12-month
Computation Period must elapse before the Employee may be credited with one year
of Eligibility Service. Initially, an Employee's Computation Period is the
12-month period commencing on the date on which he first completes an Hour of
Employment. If the Employee does not complete 1,000 Hours of Employment during
the 12-month period commencing on the date on which he first completes an Hour
of Employment, his Computation Period shall then shift to the Plan Year in which
occurs the first anniversary of the date on which he first completes an Hour of
Employment. Thereafter, the Employee's Computation Periods shall be succeeding
Plan Years.
8.02 VESTING SERVICE. For purposes of determining an Employee's
nonforfeitable interest in his Account balance, an Employee shall receive credit
for Vesting Service commencing on the date the Employee first performs an Hour
of Service and ending on his Severance From Service Date. If an Employee Xxxxxx
Service he shall recommence earning Vesting Service when he again performs an
Hour of Service. If an Employee performs an Hour of Service within 12 months
after he Xxxxxx Service, the intervening Period of Severance shall be counted as
a Period of Service for vesting purposes. Subject to Section 8.03, when
determining an Employee's Vesting Service, all Periods of Service, whether or
not completed consecutively, shall be aggregated. In aggregating Vesting
Service, 365 days of Vesting Service shall be counted as one year of Vesting
Service. No fractional years shall be counted for purposes of vesting.
8.03 DISREGARD OF CERTAIN SERVICE. If an Employee incurs a Separation
From Service at a time when he does not have a nonforfeitable interest in a
portion of his Account balance and his Period of Severance continues for a
continuous period of five years or more, the Period of Service completed by the
Employee before the Period of Severance shall not be taken into account for
Vesting Service purposes if his Period of Severance equals or exceeds his Period
of Service, whether or not consecutive, completed before the Period of
Severance.
8.04 SPECIAL RULES FOR MATERNITY OR PATERNITY ABSENCES. Except as
specified below, the period of time between (a) the first anniversary of the
first day of a Maternity or Paternity Absence of an Employee and (b) the second
anniversary of the first day of the absence shall not be counted as a Period of
Severance or as Eligibility Service or Vesting Service. However, if the Employee
returns to active employment with an Affiliated Employer prior to the expiration
of twelve months following the earlier of (1) the date of his Separation From
Service or (2) the second anniversary of the first day of his Maternity or
Paternity Absence, he shall be granted Eligibility Service and Vesting Service
for the entire period of his Maternity or Paternity Absence.
VIII-1
30
8.05 DEFINITION OF HOUR OF EMPLOYMENT. An Hour of Employment for
purposes of the Plan shall be each hour (1) for which an Employee is either
directly or indirectly paid or entitled to payment by the Affiliated Employer
for the performance of duties; (2) for which an Employee is either directly or
indirectly paid or entitled to payment by the Affiliated Employer on account of
a period of time during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation, holiday, illness,
incapacity (including Disability), layoff, jury duty, military duty or leave of
absence; or (3) for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Affiliated Employer; provided, however, that
the same Hours of Employment shall not be credited both under clause (1) or
clause (2) and this clause (3). Solely for purposes of clause (2) of the
preceding sentence, (1) no more than 501 Hours of Employment shall be credited
to an Employee on account of any single continuous period during which the
Employee performs no duties (whether or not such period occurs in a single
computation period); (2) Hours of Employment shall not be credited if payment
therefor is made or due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation, or unemployment compensation
or disability insurance laws; and (3) Hours of Employment shall not be credited
for a payment which solely reimburses an Employee for medical or
medically-related expenses incurred by the Employee. The number of Hours of
Employment to be credited with respect to a payment which is made or due on
account of a period during which an Employee performs no duties shall be
determined with reference to whether or not a payment is calculated on the basis
of units of time. Except as otherwise provided below, with respect to such a
payment made or due which is calculated on the basis of units of time, the
number of Hours of Employment to be credited shall be the number of regularly
scheduled hours included in the units of time on the basis of which payment is
calculated. With respect to a payment made or due which is not calculated on the
basis of units of time, the number of Hours of Employment to be credited shall
be equal to the amount of the payment divided by the Employee's most recent
hourly rate of compensation before the period during which no duties are
performed. For purposes of the preceding sentence, (1) if an Employee's
compensation is determined on the basis of an hourly rate, such hourly rate
shall be the Employee's most recent hourly rate of compensation, (2) if an
Employee's compensation is determined on the basis of a fixed rate for specified
periods of time other than hours, the Employee's hourly rate of compensation
shall be the Employee's most recent rate of compensation for a specified period
of time divided by the number of hours regularly scheduled for the performance
of duties during such period of time and (3) if an Employee's compensation is
not determined on the basis of a fixed rate for specified periods of time, then
the Employee's hourly rate of compensation shall be the lowest hourly rate of
compensation paid to employees in the same job classification as that of the
Employee or, if no employees in the same job classification have the same hourly
rate, the minimum wage as established from time to time under section 6(a)(1) of
the Fair Labor Standards Act of 1938, as amended. Notwithstanding the above, an
Employee shall not be credited on account of a period during which no duties are
performed with a number of Hours of Employment which is greater than the number
of hours regularly scheduled for the performance of duties during such period.
For purposes of this paragraph, an Employee without a regular work schedule
shall be deemed to regularly work a 40-hour week, 8-hour day, or such other
representative period (determined by the Committee and announced to employees)
which reflects the average hours worked by the employee, or by other employees
in the same job classification, provided the method used to calculate the
average
VIII-2
31
number of hours worked during such period is consistently applied with respect
to all Employees within the same reasonably defined job classifications.
Except as otherwise provided below, Hours of Employment shall be
credited to the above-described computation period(s) in which duties are
performed. With respect to Hours of Employment for which an Employee is either
directly or indirectly paid or entitled to payment by an Employer on account of
a period of time during which no duties are performed, (1) hours of service
credited to the Employee on account of a payment which is calculated on the
basis of units of time shall be credited to the computation period or periods in
which the period during which no duties are performed occurs, beginning with the
first unit of time to which the payment relates; and (2) Hours of Employment
credited to an Employee by reason of a payment which is not calculated on the
basis of units of time shall be credited to the computation period in which the
period during which no duties are performed occurs, or if the period during
which no duties are performed extends beyond one computation period, such Hours
of Employment shall be allocated between not more than the first two computation
periods on any reasonable basis which is consistently applied with respect to
all employees within the same reasonably defined job classifications. Hours of
Employment for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer shall be credited to the computation period
or periods to which the award or agreement for back pay pertains, rather than to
the computation period in which the award, agreement or payment is made. For
purposes of this paragraph, if Hours of Employment are to be credited to an
Employee in connection with a period of no more than 31 days which extends
beyond one computation period, all such hours may be credited to the first or
second computation period provided all Employees within the same reasonably
defined job classifications are consistently treated similarly.
8.06 SERVICE CREDIT REQUIRED BY FEDERAL LAW. An Employee will be
granted credit for Eligibility Service and Vesting Service for time he is not
actively performing services for an Affiliated Employer to the extent required
under federal law.
8.07 EMPLOYMENT RECORDS CONCLUSIVE. The employment records of the
Employer shall be conclusive for all determinations of Eligibility Service and
Vesting Service.
VIII-3
32
ARTICLE IX
FORFEITURES AND RESTORATIONS
9.01 FORFEITURE ON TERMINATION OF PARTICIPATION.
(a) If as a result of his Separation From Service a Member
receives (or is deemed to receive under Section 6.02) a distribution of
his entire Nonforfeitable Interest in his Matching Contribution Account
and his Supplemental Contribution Account not later than the end of the
second Plan Year following the Plan Year in which his Separation From
Service occurs, the remaining amounts credited to his Matching
Contribution Account and his Supplemental Contribution Account will be
immediately forfeited upon the distribution.
(b) If a Member's Forfeitable Interest is not forfeited
pursuant to Section 9.01(a), his Forfeitable Interest in amounts
credited to his Matching Contribution Account and his Supplemental
Contribution Account will be permanently forfeited (with no right of
reinstatement under Section 9.02) on the later of the date of his
Separation From Service or the date on which he has incurred a Period
of Severance of five consecutive years.
9.02 RESTORATION OF FORFEITED AMOUNTS. If a Member who forfeited any
portion of amount credited to his Matching Contribution Account and his
Supplemental Contribution Account pursuant to the provisions of Section 9.01(a)
subsequently performs an Hour of Service, then the following provisions shall
apply:
(a) Repayment Requirement. The Member's Matching Contribution
Account and Supplemental Contribution Account balances shall be
restored if he repays to the Trustee the full amount of any
distribution from his Matching Contribution Account and his
Supplemental Contribution Account with respect to which the forfeiture
arose prior to the earlier of (1) the date on which he incurs a Period
of Severance of five years commencing after his distribution, or (2)
the fifth anniversary of the first date on which the Member
subsequently performs his first Hour of Service after his Separation
From Service. A person who is deemed to have received a distribution
under Section 6.02 (because he had no Nonforfeitable Interest in
amounts credited to his Matching Contribution Account and his
Supplemental Contribution Account) will be deemed to have repaid
amounts credited to his Matching Contribution Account and his
Supplemental Contribution Account upon his reemployment if he is
reemployed before the earlier of the dates specified in clauses (1) and
(2) in the preceding sentence.
(b) Amount Restored. The amount to be restored under the
preceding provisions of this Section 9.02 shall be the dollar value of
the Member's Matching Contribution Account and Supplemental
Contribution Account balances, both the amount distributed and the
amount forfeited. The Member's Matching Contribution Account and
Supplemental Contribution Account balances shall be restored as soon as
administratively practicable after the later of the date the Member
first performs an Hour of Service after his Separation From Service or
the date on which any required repayment
IX-1
33
is completed. No distribution shall be made to a Member as a result of
a prior Separation From Service after the restoration of such account
balances has been effectuated.
(c) No Other Basis for Restoration. Except as otherwise
provided above, a Member's Account balance shall not be restored after
it has been forfeited pursuant to Section 9.01.
9.03 FORFEITURES BY LOST MEMBERS OR BENEFICIARIES. If a person who is
entitled to a distribution cannot be located during a reasonable search after
the Trustee has initially attempted making payment, his Account balance shall be
forfeited. However, if at any time prior to the termination of the Plan and the
complete distribution of the Trust Fund, the missing former Member or
Beneficiary files a claim with the Committee for the forfeited Account balance,
that Account balance shall be reinstated (without adjustment for income and
losses during the forfeited period) effective as of the date of the receipt of
the claim.
9.04 APPLICATION OF FORFEITURES. Forfeitures under the Plan for a Plan
Year shall be applied in satisfaction of some or all of the Employer's
contribution or restorative payment obligations under the Plan for the Plan
Year. Any remaining forfeitures under the Plan for a Plan Year shall be used to
pay Plan administrative expenses for the Plan Year.
IX-2
34
ARTICLE X
INVESTMENT ELECTIONS
10.01 INVESTMENT FUNDS ESTABLISHED. It is contemplated that the assets
of the Plan shall be invested in such categories of assets as may be determined
from time to time by the Committee and announced and made available on an equal
basis to all Members. In accordance with procedures established by the
Committee, each Member may designate the percentage of his Matching Contribution
Account, QNEC Account, Rollover Contribution Account and Salary Deferral
Contribution Account to be invested in each investment fund available under the
Plan.
10.02 ELECTION PROCEDURES ESTABLISHED. The Committee shall, from time
to time, establish rules to be applied in a nondiscriminatory manner as to all
matters relating to the administration of the investment of funds including, but
not limited to, the following:
(a) the percentage of a Member's Account as it exists, from
time to time, that may be transferred from one fund to another and the
limitations based on amounts, percentages, time, or frequency, if any,
on such transfers;
(b) the percentage of a Member's future contributions, when
allocated to his Account, that may be invested in any one or more funds
and the limitations based upon amounts, percentages, time, or
frequency, if any, on such investments in various funds;
(c) the procedures for making investment elections and
changing existing investment elections;
(d) the period of notice required for making investment
elections and changing existing investment elections;
(e) the handling of income and change of value in funds when
funds are in the process of being transferred between investment funds
and to investment funds; and
(f) all other matters necessary to permit the orderly
operation of investment funds within the Plan.
When the Committee changes any previous applicable rule, it shall state the
effective time of the change and the procedures for complying with any such
change. Any change shall remain effective until such date as stated in the
change, or if none is stated, then until revoked or changed in a like manner.
X-1
35
ARTICLE XI
ADOPTION OF PLAN BY OTHER EMPLOYERS
11.01 ADOPTION PROCEDURE. Any business organization may, with the
approval of the Board, adopt the Plan by:
(a) a certified resolution or consent of the board of
directors of the adopting Employer or an executed adoption instrument
(approved by the board of directors of the adopting Employer) agreeing
to be bound as an Employer by all the terms, conditions and limitations
of the Plan except those, if any, specifically described in the
adoption instrument; and
(b) providing all information required by the Committee and
the Trustee.
11.02 NO JOINT VENTURE IMPLIED. The document which evidences the
adoption of the Plan by an Employer shall become a part of the Plan. However,
neither the adoption of the Plan and the Trust by an Employer nor any act
performed by it in relation to the Plan and the Trust shall ever create a joint
venture or partnership relation between it and any other Employer.
11.03 ALL TRUST ASSETS AVAILABLE TO PAY ALL BENEFITS. The Accounts of
Members employed by the Employers that adopt the Plan shall be commingled for
investment purposes. All assets in the Trust shall be available to pay benefits
to all Members employed by any Employer.
11.04 QUALIFICATION A CONDITION PRECEDENT TO ADOPTION AND CONTINUED
PARTICIPATION. The adoption of the Plan and the Trust by a business organization
is contingent upon and subject to the express condition precedent that the
initial adoption meets all statutory and regulatory requirements for
qualification of the Plan and the exemption of the Trust that are applicable to
it and that the Plan and Trust continue in operation to maintain their qualified
and exempt status. In the event the adoption fails to initially qualify, the
adoption shall fail retroactively for failure to meet the condition precedent
and the portion of the Trust assets applicable to the adoption shall be
immediately returned to the adopting business organization and the adoption
shall be void ab initio. In the event the adoption as to a given business
organization later becomes disqualified and loses its exemption for any reason,
the adoption shall fail retroactively for failure to meet the condition
precedent and the portion of the Trust assets allocable to the adoption by that
business organization shall be immediately spun off, retroactively as of the
last date for which the Plan qualified, to a separate trust for its sole benefit
and an identical but separate Plan shall be created, retroactively effective as
of the last date the Plan as adopted by that business organization qualified,
for the benefit of the Members covered by that adoption.
XI-1
36
ARTICLE XII
AMENDMENT AND TERMINATION
12.01 RIGHT TO AMEND AND LIMITATIONS THEREON. The Sponsor has the sole
right to amend the Plan. An amendment may be made by a resolution of the Board,
a resolution of the Compensation Committee of the Board, or by an instrument in
writing executed by an authorized officer of the Sponsor. The amendment must
describe the nature of the amendment and its effective date. No amendment shall:
(a) vest in an Employer any interest in the Trust;
(b) cause or permit the Trust assets to be diverted to any
purpose other than the exclusive benefit of the present or future
Members and their Beneficiaries except under the circumstances
described in Section 3.09;
(c) decrease the Account of any Employee, or eliminate an
optional form of payment in violation of section 411(d)(6) of the Code;
(d) increase substantially the duties or liabilities of the
Trustee without its written consent; or
(e) change the vesting schedule to one which would result in
the Member's Nonforfeitable Interest in amounts credited to his Account
(determined as of the later of the date of the adoption of the
amendment or of the effective date of the amendment) being less than
his Nonforfeitable Interest computed under the Plan without regard to
the amendment. If the Plan's vesting schedule is amended, if the Plan
is amended in any other way that affects the computation of the
Member's Nonforfeitable Interest, or if the Plan is deemed amended by
an automatic change to or from a top-heavy vesting schedule, each
Member who has earned at least three years of Vesting Service as of the
date of the amendment or change shall have his Nonforfeitable Interest
computed under the Plan without regard to the amendment or the change
if that results in a higher Nonforfeitable Interest.
Each Employer shall be deemed to have adopted any amendment made by the
Sponsor unless the Employer notifies the Committee of its rejection in writing
within 30 days after it receives a copy of the amendment. A rejection shall
constitute a withdrawal from the Plan by that Employer unless the Sponsor
acquiesces to the rejection.
12.02 MANDATORY AMENDMENTS. The Contributions of each Employer to the
Plan are intended to be:
(a) deductible under the applicable provisions of the Code;
(b) except as otherwise prescribed by applicable law, exempt
from the Federal Social Security Act;
XII-1
37
(c) except as otherwise prescribed by applicable law, exempt
from withholding under the Code; and
(d) excludable from any Employee's regular rate of pay, as
that term is defined under the Fair Labor Standards Act of 1938, as
amended.
The Sponsor shall make any amendment necessary to carry out this
intention, and it may be made retroactively.
12.03 WITHDRAWAL OF EMPLOYER UPON ITS REJECTION OF AN AMENDMENT. An
Employer may withdraw from the Plan and the Trust if the Sponsor does not
acquiesce in the Employer's rejection of an amendment or by giving written
notice of its intent to withdraw to the Committee. The Committee shall then
determine the portion of the Trust assets that is attributable to the Members
employed by the withdrawing Employer and shall notify the Trustee to segregate
and transfer those assets to the successor trustee when it receives a
designation of the successor from the withdrawing Employer.
The determination of the Committee, in its sole discretion, of the
portion of the Trust assets that is attributable to the Members employed by the
withdrawing Employer shall be final and binding upon all parties; 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
withdrawing Employer, the Members employed by that Employer and their
Beneficiaries, and the successor trustee.
12.04 TERMINATION OF PARTICIPATION IN THE PLAN. An Employer may
terminate its participation in the Plan by executing and delivering to the
Sponsor a notice of termination of participation which specifies the date of the
termination of participation.
12.05 TERMINATION OF PLAN. The Sponsor may completely terminate the
Plan and the Trust with respect to all Employers by executing and delivering to
the Committee and the Trustee, a notice of termination which specifies the date
of termination.
12.06 PARTIAL OR COMPLETE TERMINATION OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS. Without regard to any other provision of the Plan, if there is a
partial or total termination of the Plan or there is a complete discontinuance
of the Employer's Contributions, each of the affected Members shall immediately
have a 100 percent Nonforfeitable Interest in his Account as of the end of the
last Plan Year for which a substantial Employer Contribution was made and in any
amounts later allocated to his Account. If the Employer then resumes making
substantial Contributions at any time, the appropriate vesting schedule shall
again apply to all amounts allocated to each affected Member's Account beginning
with the Plan Year for which they were resumed.
XII-2
38
ARTICLE XIII
MISCELLANEOUS
13.01 PLAN NOT AN EMPLOYMENT CONTRACT. The maintenance of the Plan and
the Trust is not a contract between any Employer and its Employees which gives
any Employee the right to be retained in its employment. Likewise, it is not
intended to interfere with the rights of any Employer to discharge any Employee
at any time or to interfere with the Employee's right to terminate his
employment at any time.
13.02 BENEFITS PROVIDED SOLELY FROM TRUST. All benefits payable under
the Plan shall be paid or provided for solely from the Trust. No Employer
assumes any liability or responsibility to pay any benefit provided by the Plan.
13.03 ASSIGNMENTS PROHIBITED. No principal or income payable or to
become payable from the Trust shall be subject to anticipation or assignment by
a Member or by a Beneficiary to attachment by, interference with, or control of
any creditor of a Member or Beneficiary; or to being taken or reached by any
legal or equitable process in satisfaction of any debt or liability of a Member
or Beneficiary prior to its actual receipt by the Member or Beneficiary. Any
attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance of
the Trust, any part of it, or any interest in it by a Member or Beneficiary
prior to distribution shall be void, whether that conveyance, transfer,
assignment, mortgage, pledge, or encumbrance is intended to take place or become
effective before or after any distribution of Trust assets or the termination of
the Trust itself. The Trustee shall never under any circumstances be required to
recognize any conveyance, transfer, assignment, mortgage, pledge or encumbrance
by a Member or Beneficiary of the Trust, any part of it, or any interest in it,
or to pay any money or thing of value to any creditor or assignee of a Member or
Beneficiary for any cause whatsoever. These prohibitions against the alienation
of a Member's Account shall not apply to a Qualified Domestic Relations Order or
to a voluntary revocable assignment of benefits not in excess of ten percent of
the amount of any payment from the Plan if such assignment complies with
Regulations issued under section 401(a)(13) of the Code. Further, these
prohibitions shall not apply to any offset of a Member's benefit under the Plan
against an amount that the Member is ordered or required to pay to the Plan if
(a) the order or requirement to pay (1) arises under a judgment of conviction
for a crime involving the Plan, (2) arises under a civil judgment (including a
consent order or decree) entered by a court in an action in connection with an
alleged violation of part 4 of subtitle B of title I of ERISA, or (3) is
pursuant to a settlement agreement between the Secretary of Labor and the Member
in connection with an alleged violation of part 4 of subtitle B of title I of
ERISA by a fiduciary or any other person and (b) the judgment, order, decree or
settlement agreement expressly provides for the offset of all or a part of the
amount ordered or required to be paid to the Plan against the Member's benefits
provided under the Plan.
13.04 REQUIREMENTS UPON MERGER OR CONSOLIDATION OF PLANS. The Plan
shall not merge or consolidate with or transfer any assets or liabilities to any
other plan unless each Member would receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated).
XIII-1
39
13.05 GENDER OF WORDS USED. If the context requires it, words of one
gender when used in the Plan shall include the other gender, and words used in
the singular or plural shall include the other.
13.06 SEVERABILITY. Each provision of this Agreement may be severed. If
any provision is determined to be invalid or unenforceable, that determination
shall not affect the validity or enforceability of any other provision.
13.07 REEMPLOYED VETERANS. The requirements of the Uniformed Services
Employment and Reemployment Rights Act of 1994 will be complied with in the
operation of the Plan in the manner permitted under section 414(u) of the Code.
Notwithstanding any other provision of the Plan, Contributions, Eligibility
Service and Vesting Service with respect to a person who has engaged in
qualified military service will be provided in accordance with section 414(u) of
the Code.
13.08 LIMITATIONS ON LEGAL ACTIONS. No person may bring an action
pertaining to the Plan or the Trust until he has exhausted his administrative
claims and appeal remedies identified in Section 5.11. Further, no person may
bring an action pertaining to a claim for benefits under the Plan or the Trust
following 120 days after the Committee's final denial of his claim for benefits.
13.09 GOVERNING LAW. The provisions of the Plan shall be construed,
administered, and governed under the laws of the United States unless the
specific matter in question is governed by state law in which event the laws of
the State of Texas shall apply.
XIII-2
40
IN WITNESS WHEREOF, Kaneb Services LLC has caused this Agreement to be
executed this ______ day of __________, 2001, in multiple counterparts, each of
which shall be deemed to be an original, to be effective the 1st day of June,
2001, except for those provisions which have an earlier effective date provided
by law, or as otherwise provided under applicable provisions of the Plan.
KANEB SERVICES LLC
By:
---------------------------
Title:
------------------------
41
APPENDIX A
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
PART A.1 DEFINITIONS
DEFINITIONS. As used herein the following words and phrases have the
meaning attributed to them below:
A.1.1 "ACTUAL CONTRIBUTION RATIO" means the ratio of Section 401(m)
Contributions actually paid into the Trust on behalf of an Employee for a Plan
Year to the Employee's Annual Compensation for the same Plan Year. For this
purpose, Annual Compensation for any portion of the Plan Year in which the
Employee was not an eligible Employee (as defined in Section A.2.4) will not be
taken into account.
A.1.2 "ACTUAL DEFERRAL PERCENTAGE" means, for a specified group of
Employees for a Plan Year, the average of the ratios (calculated separately for
each Employee in the group) of the amount of Section 401(k) Contributions
actually paid into the Trust on behalf of the Employee for the Plan Year to the
Employee's Annual Compensation for the Plan Year.
A.1.3 "ACTUAL DEFERRAL RATIO" means the ratio of Section 401(k)
Contributions actually paid into the Trust on behalf of an Employee for a Plan
Year to the Employee's Annual Compensation for the same Plan Year. For this
purpose, Annual Compensation for any portion of the Plan Year in which the
Employee was not an eligible Employee (as defined in Section A.2.3) will not be
taken into account.
A.1.4 "ANNUAL ADDITIONS" means the sum of the following amounts
credited on behalf of a Member for the Limitation Year: (a) Employer
contributions, (b) Employee contributions and (c) forfeitures. Excess 401(k)
Contributions for a Plan Year are treated as Annual Additions for that Plan Year
even if they are corrected through distribution. Excess Deferrals that are
timely distributed as set forth in Section A.3.1 will not be treated as Annual
Additions.
A.1.5 "CONTRIBUTION PERCENTAGE" means, for a specified group of
Employees for a Plan Year, the average of the ratios (calculated separately for
each Employee in the group) of the amount of Section 401(m) Contributions
actually paid into the Trust on behalf of the Employee for the Plan Year to the
Employee's Annual Compensation for the Plan Year.
A.1.6 "CURRENT PLAN YEAR" means the Plan Year for which the applicable
discrimination test under section 401(k) or section 401(m) is being performed.
A.1.7 "EXCESS AGGREGATE 401(m) CONTRIBUTIONS" means, with respect to
any Plan Year, the excess of (a) the aggregate amount of Section 401(m)
Contributions actually paid into the Trust on behalf of Highly Compensated
Employees for the Plan Year over (b) the maximum amount of those contributions
permitted under the limitations set out in the first sentence of Section A.2.3.
A.1.8 "EXCESS AMOUNT" means the excess of the Annual Additions credited
to the Member's Account for the Limitation Year over the Maximum Permissible
Amount.
A-1
42
A.1.9 "EXCESS DEFERRAL" means the aggregate amount of a Member's Salary
Deferral Contributions and other elective deferral contributions described in
Section A.2.1. in excess of the limitation specified in Section A.2.1.
A.1.10 "EXCESS 401(k) CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of (a) the aggregate amount of Section 401(k) Contributions
actually paid to the Trustee on behalf of Highly Compensated Employees for the
Plan Year over (b) the maximum amount of those contributions permitted under the
limitations set out in the first sentence of Section A.2.2.
A.1.11 "LIMITATION YEAR" means the calendar year. All qualified plans
maintained by any Affiliated Employer must use the same Limitation Year. If the
Limitation Year is changed 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.
A.1.12 "MAXIMUM PERMISSIBLE AMOUNT" means the lesser of (a) the dollar
limitation in effect under section 415(c)(1)(A) of the Code for the Limitation
Year, or (b) 25 percent of the Member's Annual Compensation for the Limitation
Year. The Annual Compensation limitation referred to in clause (b) of the
immediately preceding sentence shall not apply to any contribution for medical
benefits (within the meaning of section 401(h) or section 419(A)(f)(2) of the
Code) that is otherwise treated as an Annual Addition under section 415(l)(1) or
section 419(A)(d)(2) of the Code. If a short Limitation Year is created because
of an amendment changing the Limitation Year to a different 12-consecutive month
period, the Maximum Permissible Amount shall not exceed the dollar limitation in
effect under section 415(c)(1)(A) of the Code 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.
A.1.13 "PRECEDING PLAN YEAR" means the Plan Year immediately preceding
the Current Plan Year.
A.1.14 "SECTION 401(k) CONTRIBUTIONS" means the sum of Salary Deferral
Contributions made on behalf of the Member during the Plan Year, and QNECs that
the Employer elects to have treated as section 401(k) Contributions pursuant to
section 401(k)(3)(d)(ii) of the Code.
A.1.15 "SECTION 401(m) CONTRIBUTIONS" means the sum of Matching
Contributions made on behalf of the Member during the Plan Year and other
amounts that the Employer elects to have treated as Section 401(m) Contributions
pursuant to section 401(m)(3)(B) of the Code. However, Matching Contributions
and Salary Deferral Contributions that the Employer could otherwise elect to
have treated as Section 401(m) Contributions are not Section 401(m)
Contributions to the extent that they are used to enable the Plan to satisfy the
minimum contribution requirements of section 416 of the Code.
PART A.2 LIMITATIONS ON CONTRIBUTIONS
A.2.1 DOLLAR LIMITATION UPON SALARY DEFERRAL CONTRIBUTIONS. The maximum
Salary Deferral Contribution that a Member may elect to have made on his behalf
during a calendar year may not, when added to his elective deferrals under other
plans or arrangements which are both described in sections 401(k), 403(b),
408(k) and 408(p)(2) of the Code and maintained by an Affiliated Employer,
exceed the amount of the limitation in effect under section 402(g)(1) of
A-2
43
the Code for the Member's taxable year beginning in such calendar year. For
purposes of applying the requirements of Section A.2.2, Excess Deferrals shall
not be disregarded merely because they are Excess Deferrals or because they are
distributed in accordance with this Section. However, Excess Deferrals made to
the Plan on behalf of Non-Highly Compensated Employees in violation of this
Section A.2.1 are not to be taken into account under Section A.2.2.
A.2.2 LIMITATION BASED UPON ACTUAL DEFERRAL PERCENTAGE. The Actual
Deferral Percentage for eligible Highly Compensated Employees for the Current
Plan Year must bear a relationship to the Actual Deferral Percentage for all
other eligible Employees for the Preceding Plan Year (except for the first Plan
Year, in which case the reference to the Preceding Plan Year shall be deemed to
be a reference to the Current Plan Year) which meets either of the following
tests:
(1) the Actual Deferral Percentage of the eligible Highly
Compensated Employees is not more than the Actual Deferral Percentage
of all other eligible Employees multiplied by 1.25; or
(2) the excess of the Actual Deferral Percentage of the
eligible Highly Compensated Employees over that of all other eligible
Employees is not more than two percentage points, and the Actual
Deferral Percentage of the eligible Highly Compensated Employees is not
more than the Actual Deferral Percentage of all other eligible
Employees multiplied by two.
For purposes of this test an eligible Employee is an Employee who is
directly or indirectly eligible to make Salary Deferral Contributions for all or
part of the Current Plan Year. A person who is suspended from making Salary
Deferral Contributions because he has made a withdrawal is an eligible Employee.
If no Salary Deferral Contributions are made for an eligible Employee, the
Actual Deferral Ratio that shall be included for him in determining the Actual
Deferral Percentage is zero. If the Plan and any other plan or plans which
include cash or deferred arrangements are considered as one plan for purposes of
section 401(a)(4) or 410(b) of the Code, the cash or deferred arrangements
included in the Plan and the other plans shall be treated as one plan for
purposes of this Section. If any Member who is a Highly Compensated Employee is
a participant in any other cash or deferred arrangements of the Employer, when
determining the deferral percentage of such Member, all such cash or deferred
arrangements are treated as one cash or deferred arrangement.
Notwithstanding the foregoing, an individual who is not a Highly
Compensated Employee and who has not satisfied the minimum age and service
requirements of Section 410(a)(1)(A) will not be treated as an eligible Employee
for purposes of this Section A.2.2 if the Sponsor elects to apply section
410(b)(4)(3) of the Code in determining whether the Plan meets the requirements
of section 401(k)(3) of the Code.
A Salary Deferral Contribution will be taken into account under the
Actual Deferral Percentage test of section 401(k) of the Code and this Section
for a Plan Year only if it relates to Considered Compensation that either would
have been received by the Employee in the Plan Year (but for the deferral
election) or is attributable to services performed by the Employee in
A-3
44
the Plan Year and would have been received by the Employee within 2 1/2 months
after the close of the Plan Year (but for the deferral election). In addition, a
Section 401(k) Contribution will be taken into account under the Actual Deferral
Percentage test of section 401(k) of the Code and this Section for a Plan Year
only if it is allocated to an Employee as of a date within that Plan Year. For
this purpose a Section 401(k) Contribution is considered allocated as of a date
within a Plan Year if the allocation is not contingent on participation or
performance of services after such date and the Section 401(k) Contribution is
actually paid to the Trust no later than 12 months after the Plan Year to which
the Section 401(k) Contribution relates.
Failure to correct Excess 401(k) Contributions by the close of the Plan
Year following the Plan Year for which they were made will cause the Plan's cash
or deferred arrangement to be disqualified for the Plan Year for which the
Excess 401(k) Contributions were made and for all subsequent years during which
they remain in the Trust. Also, the Employer will be liable for a ten percent
excise tax on the amount of Excess 401(k) Contributions unless they are
corrected within 2 1/2 months after the close of the Plan Year for which they
were made.
A.2.3 LIMITATION BASED UPON CONTRIBUTION PERCENTAGE. The Contribution
Percentage for eligible Highly Compensated Employees for the Current Plan Year
must bear a relationship to the Contribution Percentage for all other eligible
Employees for the Preceding Plan Year (except for the first Plan Year, in which
case the reference to the Preceding Plan Year shall be deemed to be a reference
to the Current Plan Year) which meets either of the following tests:
(1) the Contribution Percentage of the eligible Highly
Compensated Employees is not more than the Contribution Percentage of
all other eligible Employees multiplied by 1.25; or
(2) the excess of the Contribution Percentage of the eligible
Highly Compensated Employees over that of all other eligible Employees
is not more than two percentage points, and the Contribution Percentage
of the eligible Highly Compensated Employees is not more than the
Contribution Percentage of all other eligible Employees multiplied by
two.
For purposes of this test an eligible Employee is an Employee who is
directly or indirectly eligible to receive an allocation of Matching
Contributions for all or part of the Plan Year. Except as provided below, an
Employee who would be eligible to receive an allocation of Matching
Contributions but for his election not to participate is an eligible Employee.
An Employee who would be eligible to receive an allocation of Matching
Contributions but for the limitations on his Annual Additions imposed by section
415 of the Code or because he has made a withdrawal is an eligible Employee.
Notwithstanding the foregoing, an individual who is not a Highly
Compensated Employee and who has not satisfied the minimum age and service
requirements of section 410(a)(1)(A) of the Code will not be treated as an
eligible Employee for purposes of this Section A.2.4 if the Sponsor elects to
apply section 410(b)(4)(B) of the Code in determining whether the Plan meets the
requirements of section 401(m)(2) of the Code.
A-4
45
If no Section 401(m) Contributions are made on behalf of an eligible
Employee, the Actual Contribution Ratio that shall be included for him in
determining the Contribution Percentage is zero.
If the Plan and any other plan or plans to which Section 401(m)
Contributions are made are considered as one plan for purposes of section
401(a)(4) or 410(b) of the Code, the Plan and those plans are to be treated as
one plan. The Actual Contribution Ratio of a Highly Compensated Employee who is
eligible to participate in more than one plan of an Affiliated Employer to which
employee or matching contributions are made is calculated by treating all the
plans in which the Employee is eligible to participate as one plan. However,
plans that are not permitted to be aggregated under Regulation section
1.410(m)-1(b)(3)(ii) are not aggregated for this purpose.
A Matching Contribution will be taken into account under this Section
for a Plan Year only if (1) it is allocated to the Employee's Account as of a
date within the Plan Year, (2) it is paid to the Trust no later than the end of
the 12-month period beginning after the close of the Plan Year, and (3) it is
made on behalf of an Employee on account of his Salary Deferral Contributions
for the Plan Year.
At the election of the Employer, a Member's Salary Deferral
Contributions, and XXXXx made on behalf of the Member during the Plan Year shall
be treated as Section 401(m) Contributions that are Matching Contributions
provided that the conditions set forth in Regulation section 1.401(m)-1(b)(5)
are satisfied. Salary Deferral Contributions may not be treated as Matching
Contributions for purposes of the contribution percentage test set forth in this
Section unless such contributions, including those taken into account for
purposes of the test set forth in this Section, satisfy the actual deferral
percentage test set forth in Section A.2.3. Moreover, Salary Deferral
Contributions and QNECs may not be taken into account for purposes of the test
set forth in this Section to the extent that such contributions are taken into
account in determining whether any other contributions satisfy the actual
deferral percentage test set forth in Section A.2.2. Finally, Salary Deferral
Contributions and QNECs may be taken into account for purposes of the test set
forth in this Section only if they are allocated to the Employee's Account as of
a date within the Plan Year being tested within the meaning of Regulation
section 1.401(k)-1(b)(4).
Failure to correct Excess Aggregate 401(m) Contributions by the close
of the Plan Year following the Plan Year for which they were made will cause the
Plan to fail to be qualified for the Plan Year for which the Excess Aggregate
401(m) Contributions were made and for all subsequent years during which they
remain in the Trust. Also, the Employer will be liable for a ten percent excise
tax on the amount of Excess Aggregate 401(m) Contributions unless they are
corrected within 2 1/2 months after the close of the Plan Year for which they
were made.
A.2.4 ADDITIONAL TEST IN THE EVENT OF MULTIPLE USE OF THE ALTERNATIVE
LIMITATION. If the second alternative permitted in Sections A.2.2 and A.2.3 is
used for both the actual deferral percentage test and the contribution
percentage test the following additional limitation on Salary Deferral
Contributions shall apply. The Actual Deferral Percentage plus the Contribution
Percentage of the eligible Highly Compensated Employees cannot exceed the
greater of (a) or (b), where
A-5
46
(a) is the sum of:
(1) 1.25 times the greater of the Actual Deferral
Percentage or the Contribution Percentage of the eligible
Non-Highly Compensated Employees for the Preceding Plan Year,
and
(2) the lesser of (x) two percentage points plus the
lesser of the Actual Deferral Percentage or the Contribution
Percentage of the eligible Non-Highly Compensated Employees
for the preceding Plan Year or (y) two times the lesser of the
Actual Deferral Percentage or the Contribution Percentage of
the group of eligible Non-Highly Compensated Employees for the
Preceding Plan Year; and
(b) is the sum of:
(1) 1.25 times the lesser of the Actual Deferral
Percentage or the Contribution Percentage of the eligible
Non-Highly Compensated Employees for the Preceding Plan Year,
and
(2) the lesser of (x) two percentage points plus the
greater of the Actual Deferral Percentage or the Contribution
Percentage of the eligible Non-Highly Compensated Employees
for the preceding Plan Year or (y) two times the greater of
the Actual Deferral Percentage or the Contribution Percentage
of the group of eligible Non-Highly Compensated Employees for
the Preceding Plan Year.
PART A.3 CORRECTION PROCEDURES FOR CONTRIBUTIONS IN EXCESS OF
LIMITATIONS
A.3.1 EXCESS DEFERRAL FAIL SAFE PROVISION. After the close of each Plan
Year, the Committee shall determine if there would be any Excess Deferrals. If
there would be an Excess Deferral by a Member, the Excess Deferral as adjusted
by any earnings or losses, will be distributed from the Plan to the Member no
later than April 15 following the Member's taxable year in which the Excess
Deferral was made. The income allocable to the Excess Deferrals for the taxable
year of the Member shall be determined by multiplying the income for the taxable
year of the Member allocable to Salary Deferral Contributions by a fraction. The
numerator of the fraction is the amount of the Excess Deferrals made on behalf
of the Member for the taxable year. The denominator of the fraction is the
Member's total Salary Deferral Account balance as of the beginning of the
taxable year plus the Member's Salary Deferral Contributions for the taxable
year.
A.3.2 ACTUAL DEFERRAL PERCENTAGE FAIL SAFE PROVISION. As soon as
practicable after the close of each Plan Year, the Committee shall determine
whether the Actual Deferral Percentage for the Highly Compensated Employees
would exceed the limitation set forth in Section A.2.2. If the limitation would
be exceeded for a Plan Year, before the close of the following Plan Year (a) the
amount of Excess 401(k) Contributions for that Plan Year (and any income
allocable to those contributions as calculated in the specific manner required
by Section A.3.5) shall be distributed or (b) the Employer may make a QNEC which
it elects to have treated as a Section 401(k) Contribution.
A-6
47
The amount of Excess 401(k) Contributions to be distributed shall be
determined in the following manner.
First, the Committee will determine the aggregate amount of Excess
401(k) Contributions as follows. The Committee will determine how much the
Actual Deferral Ratio of the Highly Compensated Employee with the highest Actual
Deferral Ratio would have to be reduced to satisfy the Actual Deferral
Percentage Test or cause such Actual Deferred Ratio to equal the Actual Deferral
Ratio of the Highly Compensated Employee with the next highest Actual Deferred
Ratio. If a lesser reduction would enable the Plan to satisfy the Actual
Deferral Percentage Test, only the lesser reduction may be made. Second, this
process is repeated until the Actual Deferral Percentage Test is satisfied. The
amount of Excess 401(k) Contributions is equal to the sum of these hypothetical
reductions multiplied, in each case, by the Highly Compensated Employee's Annual
Compensation.
Then, the total amount of Excess 401(k) Contributions shall be
distributed on the basis of the respective amounts attributable to each Highly
Compensated Employee. The Highly Compensated Employees subject to the actual
distribution are determined using the "dollar leveling method." The Salary
Deferral Contributions of the Highly Compensated Employee with the greatest
dollar amount of Salary Deferral Contributions and other contributions treated
as Section 401(k) Contributions for the Plan Year are reduced by the amount
required to cause that Highly Compensated Employee's Salary Deferral
Contributions to equal the dollar amount of the Salary Deferral Contributions
and other contributions treated as Section 401(k) Contributions for the Plan
Year of the Highly Compensated Employee with the next highest dollar amount.
This amount is then distributed to the Highly Compensated Employee with the
highest dollar amount. However, if a lesser deduction, when added to the total
dollar amount already distributed under this Section A.3.2 would equal the total
Excess 401(k) Contributions, the lesser reduction shall be distributed. This
process shall be continued until the amount of the Excess 401(k) Contributions
have been distributed.
QNEC's will be treated as Section 401(k) Contributions only if: (a) the
conditions described in Regulation section 1.401(k)-1(b)(5) are satisfied and
(b) they are allocated to Members' Accounts as of a date within that Plan Year
and are actually paid to the Trust no later than the end of the 12-month period
immediately following the Plan Year to which the contributions relate. If the
Employer makes a QNEC that it elects to have treated as a Section 401(k)
Contribution, the Contribution will be in an amount necessary to satisfy the
Actual Deferral Percentage test and will be allocated first to those Non-Highly
Compensated Employees who had the lowest Actual Deferral Ratio. The Excess
401(k) Contributions of Highly Compensated Employees will not be recharacterized
to the extent that the recharacterized amounts would exceed the Contribution
Percentage as determined prior to applying the Contribution Percentage
limitations.
Any distributions of the Excess 401(k) Contributions for any Plan Year
are to be made to Highly Compensated Employees on the basis of the amount of
contributions by, or on behalf of, each Highly Compensated Employee. The amount
of Excess 401(k) Contributions to be distributed for any Plan Year must be
reduced by any excess Salary Deferral Contributions previously distributed for
the taxable year ending in the same Plan Year.
A-7
48
A.3.3 CONTRIBUTION PERCENTAGE FAIL SAFE PROVISION. If the limitation
set forth in Section A.2.3 would be exceeded for any Plan Year, any one or more
of the following corrective actions shall be taken before the close of the
following Plan Year as determined by the Committee in its sole discretion: (a)
the amount of the Excess Aggregate 401(m) Contributions for that Plan Year (and
any income allocable to those Contributions as calculated in the manner set
forth in Section A.3.5) shall be either distributed, or forfeited to the extent
they are not vested or (b) the Employer may make a QNEC which it elects to have
treated as a Section 401(m) Contribution. Forfeitures of Excess Aggregate 401(m)
Contributions shall be allocated to Members who are Non-Highly Compensated
Employees as if such Contributions were additional Matching Contributions for
the Plan Year.
The amount of Excess Aggregate 401(m) Contributions to be distributed
shall be determined in the following manner.
First, the Committee will determine the aggregate amount of Excess
Aggregate 401(m) Contributions as follows. The Committee will determine how much
the Actual Contribution Ratio of the Highly Compensated Employee with the
highest Actual Contribution Ratio would have to be reduced to satisfy the Actual
Contribution Percentage Test or cause such Actual Contribution Ratio to equal
the Actual Contribution Ratio of the Highly Compensated Employee with the next
highest Actual Contribution Ratio. If a lesser reduction would enable the Plan
to satisfy the Actual Contribution Percentage Test, only this lesser reduction
may be made. Second, this process is repeated until the Actual Contribution
Percentage Test is satisfied. The amount of Excess Aggregate 401(m)
Contributions is equal to the sum of these hypothetical reductions multiplied,
in each case, by the Highly Compensated Employee's Annual Compensation.
Then, the total amount of Excess Aggregate 401(m) Contributions shall
be distributed on the basis of the respective amounts attributable to each
Highly Compensated Employee. The Highly Compensated Employees subject to the
actual distribution are determined using the "dollar leveling method." The
Matching Contributions of the Highly Compensated Employee with the greatest
dollar amount of Matching Contributions and other contributions treated as
Section 401(m) Contributions for the Plan Year are reduced by the amount
required to cause that Highly Compensated Employee's Matching Contributions and
other contributions treated as Section 401(m) Contributions for the Plan Year to
equal the dollar amount of Matching Contributions and other contributions
treated as Section 401(m) Contributions for the Plan Year of the Highly
Compensated Employee with the next highest dollar amount. This amount is then
distributed to the Highly Compensated Employee with the highest dollar amount.
However, if a lesser reduction, when added to the total dollar amount already
distributed under this Section A.3.3., would equal the total Excess Aggregate
401(m) Contributions, the lesser reduction amount shall be distributed. This
process shall be continued until the amount of the Excess Aggregate 401(m)
Contributions have been distributed.
The corrective actions take under this Section A.3.3 must satisfy the
requirements of section 401(a)(4) of the Code. After correction, each level of
Matching Contributions must be currently and effectively available to a group of
employees that satisfies the minimum coverage requirements of section 410(b) of
the Code. A method under which employee contributions are distributed to highly
compensated employees to the extent necessary to meet the requirements of
A-8
49
section 401(m)(2) while matching contributions attributable to such employee
contributions remain allocated to the employee's account will not meet the
requirement of section 401(a)(4).
A.3.4 ALTERNATIVE LIMITATION FAIL SAFE. As soon as practicable after
the close of each Plan Year, the Committee shall determine whether the
alternative limitation would be exceeded. If the limitation would be exceeded
for any Plan Year, before the close of the following Plan Year the Actual
Deferral Percentage or Contribution Percentage of the eligible Highly
Compensated Employees, or a combination of both, shall be reduced by
distributions made in the manner described in the Regulations. These
distributions shall be in addition to and not in lieu of distributions required
for Excess 401(k) Contributions and Excess Aggregate 401(m) Contributions.
A.3.5 INCOME ALLOCABLE TO EXCESS 401(k) CONTRIBUTIONS AND EXCESS
AGGREGATE 401(m) CONTRIBUTIONS. The income allocable to Excess 401(k)
Contributions for the Plan Year shall be determined by multiplying the income
for the Plan Year allocable to Section 401(k) Contributions by a fraction. The
numerator of the fraction shall be the amount of Excess 401(k) Contributions
made on behalf of the Member for the Plan Year. The denominator of the fraction
shall be the Member's total Account balance attributable to Section 401(k)
Contributions as of the beginning of the Plan Year plus the Member's Section
401(k) Contributions for the Plan Year. The income allocable to Excess Aggregate
401(m) Contributions for a Plan Year shall be determined by multiplying the
income for the Plan Year allocable to Section 401(m) Contributions by a
fraction. The numerator of the fraction shall be the amount of Excess Aggregate
401(m) Contributions made on behalf of the Member for the Plan Year. The
denominator of the fraction shall be the Member's total Account balance
attributable to Section 401(m) Contributions as of the beginning of the Plan
Year plus the Member's Section 401(m) Contributions for the Plan Year.
PART A.4 LIMITATION ON ALLOCATIONS
A.4.1 BASIC LIMITATION ON ALLOCATIONS. The Annual Additions which may
be credited to a Member's Account under the Plan for any Limitation Year will
not exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to a Member's Account for the same Limitation Year under any other
qualified defined contribution plans maintained by any Affiliated Employer. If
the Annual Additions with respect to the Member under such other qualified
defined contribution plans are less than the Maximum Permissible Amount and the
Employer Contribution that would otherwise be contributed or allocated to the
Member's Account under the Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
under the Plan will be reduced so that the Annual Additions under all qualified
defined contribution plans maintained by any Affiliated Employer for the
Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Member under such other qualified defined
contribution plans in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to the Member's
Account under the Plan for the Limitation Year.
A.4.2 ESTIMATION OF MAXIMUM PERMISSIBLE AMOUNT. Prior to determining
the Member's actual Annual Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount on the basis of a reasonable
estimation of the Member's
A-9
50
Annual Compensation for such Limitation Year, uniformly determined for all
Members similarly situated. 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 Member's actual Annual Compensation
for such Limitation Year.
A.4.3 ATTRIBUTION OF EXCESS AMOUNTS. If a Member's Annual Additions
under the Plan and all other qualified defined contribution plans maintained by
an Affiliated Employer result in an Excess Amount, the total Excess Amount shall
be attributed to the Plan.
A.4.4 TREATMENT OF EXCESS AMOUNTS. If an Excess Amount attributed to
the Plan is held or contributed as a result of or because of (a) the allocation
of forfeitures, (b) reasonable error in estimating a Member's Considered
Compensation, (c) reasonable error in calculating the maximum Salary Deferral
Contribution that may be made with respect to a Member under section 415 of the
Code or (d) any other facts and circumstances which the Commissioner of Internal
Revenue finds to be justified, the Excess Amount shall be reduced as follows:
(1) First, the Excess Amount shall be reduced to the extent
necessary by distributing to the Member all Salary Deferral
Contributions together with their earnings. These distributed amounts
are disregarded for purposes of the testing and limitations contained
in this Appendix A.
(2) Second, if the Member is still employed by the Employer at
the end of the Limitation Year, then such Excess Amounts shall not be
distributed to the Member, but shall be reallocated to a suspense
account and shall be reapplied to reduce future Employer Contributions
(including any allocation of forfeitures) under the Plan for such
Member in the next Limitation Year, and for each succeeding Limitation
Year, if necessary.
(3) If, after application of paragraph (b) of this Section, an
Excess Amount still exists, and the Member is not still employed by the
Employer at the end of the Limitation Year, then such Excess Amounts in
the Member's Account shall not be distributed to the Member, but shall
be reallocated to a suspense account and shall be reapplied to reduce
future Employer Contributions (including allocation of any
forfeitures), for all remaining Members in the next Limitation Year and
each succeeding Limitation Year if necessary.
(4) If a 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's investment gains and losses. If a
suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated
and reallocated to Members' Accounts before any Employer Contribution
may be made to the Plan for that Limitation Year. Excess Amounts may
not be distributed to Members or former Members. If the Plan is
terminated while a suspense account described in this Section is in
existence, the amount in such suspense account shall revert to the
Employer(s) to which it is attributable.
A-10
51
APPENDIX B
TOP-HEAVY REQUIREMENTS
PART B.1 DEFINITIONS
DEFINITIONS. As used herein, the following words and phrases have the
meaning attributed to them below:
B.1.1 "AGGREGATE ACCOUNTS" means the total of all Account balances
derived from Employer Contributions and Rollover Contributions.
B.1.2 "AGGREGATION GROUP" means (a) each plan or any Affiliated
Employer in which a Key Employee is a Member and (b) each other plan of the
Employer or any Affiliated Employer which enables any plan in (a) to meet the
requirements of either section 401(a)(4) or 410 of the Code. Any Employer may
treat a plan not required to be included in the Aggregation Group as being a
part of the group if the group would continue to meet the requirements of
section 401(a)(4) and 410 of the Code with that plan being taken into account.
B.1.3 "DETERMINATION DATE" means for a given Plan Year the last day of
the preceding Plan Year or in the case of the first Plan Year the last day of
that Plan Year.
B.1.4 "KEY EMPLOYEE" means an Employee or former or deceased Employee
or Beneficiary of an Employee who at any time during the Plan Year or any of the
four preceding Plan Years is (a) an officer of any Affiliated Employer having
Annual Compensation greater than 50 percent of the annual addition limitation of
section 415(b)(1)(A) of the Code for the Plan Year, (b) one of the ten employees
having Annual Compensation from an Employer or any Affiliated Employer of
greater than 100 percent of the annual addition limitation of section
415(c)(1)(A) of the Code for the Plan Year and owning or considered as owning
(within the meaning of section 318 of the Code) the largest interest in any
Affiliated Employer, treated separately, (c) a Five Percent Owner of any
Affiliated Employer, treated separately, or (d) a one percent owner of any
Affiliated Employer, treated separately, having Annual Compensation from any
Affiliated Employer of more than $150,000.00. For this purpose no more than 50
employees or, if fewer, the greater of three employees or ten percent of the
employees shall be treated as officers. Section 416(i) of the Code shall be used
to determine percentage of ownership. For the purpose of the test set out in (b)
above, if two or more employees have the same interest in an Employer, the
employee with the greater Annual Compensation from the Affiliated Employer shall
be treated as having the larger interest.
B.1.5 "NON-KEY EMPLOYEE" means any Employee who is not a Key Employee.
B.1.6 "ONE PERCENT OWNER" means a person who is a one percent owner as
defined in section 416(i) of the Code.
B.1.7 "TOP-HEAVY PLAN" means any plan which has been determined to be
top-heavy under the test described in Appendix B of the Plan.
B-1
52
PART B.2 APPLICATION
B.2.1 APPLICATION. The requirements described in this Appendix B shall
apply to each Plan Year that the Plan is determined to be a Top-Heavy Plan.
B.2.2 TOP-HEAVY TEST. If on the Determination Date the Aggregate
Accounts of Key Employees in the Plan exceed 60 percent of the Aggregate
Accounts of all Employees in the Plan, the Plan shall be a Top-Heavy Plan for
that Plan Year. In addition, if the Plan is required to be included in an
Aggregation Group and that group is a top-heavy group, the Plan shall be treated
as a Top-Heavy Plan. An Aggregation Group is a top-heavy group if on the
Determination Date the sum of (a) the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans in the Aggregation
Group which contains the Plan, plus (b) the total of all of the accounts of Key
Employees under all defined contribution plans included in the Aggregation Group
(which contains the Plan) is more than 60 percent of a similar sum determined
for all employees covered in the Aggregation Group which contains the Plan.
In applying the above tests, the following rules shall apply:
(1) in determining the present value of the accumulated
accrued benefits for any Employee or the amount in the account of any
Employee, the value or amount shall be increased by all distributions
made to or for the benefit of the Employee under the Plan during the
five-year period ending on the Determination Date;
(2) all rollover contributions made after December 31, 1983 by
the Employee to the Plan shall not be considered by the Plan for either
test;
(3) if an Employee is a Non-Key Employee under the Plan for
the Plan Year but was a Key Employee under the Plan for another prior
Plan Year, his Account shall not be considered; and
(4) benefits shall not be taken into account in determining
the top-heavy ratio for any Employee who has not performed services for
the Employer during the last five-year period ending upon the
Determination Date.
B.2.3 VESTING RESTRICTIONS IF PLAN BECOMES TOP-HEAVY. If a Member has
at least one Hour of Service during a Plan Year when the Plan is a Top-Heavy
Plan, he shall either vest under each of the normal vesting provisions of the
Plan or under the following vesting schedule, whichever is more favorable:
B-2
53
HIS NONFORFEITABLE INTEREST IN
HIS MATCHING CONTRIBUTION
IF THE MEMBER HAS COMPLETED THE ACCOUNT AND HIS SUPPLEMENTAL
FOLLOWING NUMBER OF YEARS OF VESTING SERVICE CONTRIBUTION ACCOUNT IS
-------------------------------------------- ------------------------------
Less than two years 0 percent
Two years but less than three years 20 percent
Three years but less than four years 40 percent
Four years but less than five years 60 percent
Five years but less than six years 80 percent
Six years or more 100 percent
If the Plan ceases to be a Top-Heavy Plan, this requirement shall no longer
apply. After that date, the normal vesting provisions of the Plan shall be
applicable to all subsequent Contributions by the Employer.
B.2.4 MINIMUM CONTRIBUTIONS IF PLAN BECOMES TOP-HEAVY. If the Plan is a
Top-Heavy Plan and the normal allocation of the Employer Contribution and
forfeitures is less than three percent of any Non-Key Employee Member's Annual
Compensation, the Committee, without regard to the normal allocation procedures,
shall allocate the Employer Contribution and the forfeitures among the Members
who are in the employ of the Employer at the end of the Plan Year in proportion
to each Member's Annual Compensation as compared to the total Annual
Compensation of all Members for that Plan Year until each Non-Key Employee
Member has had an amount equal to the lesser of (a) the highest rate of
Contribution applicable to any Key Employee, or (b) three percent of his Annual
Compensation allocated to his Account. At that time, any more Employer
Contributions or forfeitures shall be allocated under the normal allocation
procedures described earlier in the Plan. Salary Deferral Contributions made on
behalf of Key Employees are included in determining the highest rate of Employer
Contributions. Salary Deferral Contributions made on behalf of Non-Key Employees
are not included for that purpose. Amounts that may be treated as Section 401(k)
Contributions made on behalf of Non-Key Employees may not be included in
determining the minimum contribution required under this Section to the extent
that they are treated as Section 401(k) Contributions for purposes of the Actual
Deferral Percentage test.
In applying this restriction, the following rules shall apply:
(1) Each Employee who is eligible for membership (without
regard to whether he has made mandatory contributions, if any are
required, or whether his compensation is less than a stated amount)
shall be entitled to receive an allocation under this Section; and
(2) All defined contribution plans required to be included in
the Aggregation Group shall be treated as one plan for purposes of
meeting the three percent maximum; this required aggregation shall not
apply if the Plan is also required to be included in an Aggregation
Group which includes a defined benefit plan and the Plan
B-3
54
enables that defined benefit plan to meet the requirements of sections
401(a)(4) or 410 of the Code.
B.2.5 DISREGARD OF GOVERNMENT PROGRAMS. If the Plan is a Top-Heavy
Plan, it must meet the vesting and benefit requirements described in this
Article without taking into account contributions or benefits under Chapter 2 of
the Code (relating to the tax on self-employment income), Chapter 21 of the Code
(relating to the Federal Insurance Contributions Act), Title II of the Social
Security Act, or any other federal or state law.
B-4
55
APPENDIX C
ADMINISTRATION OF THE PLAN
C.1 APPOINTMENT, TERM, RESIGNATION, AND REMOVAL. The Board shall
appoint an Committee of no fewer than two persons, the members of which shall
serve until their resignation, death, or removal. The Sponsor shall notify the
Trustee in writing of its composition from time to time. Any member of the
Committee may resign at any time by giving written notice of such resignation to
the Sponsor. Any member of the Committee may be removed by the Board, with or
without cause. Vacancies in the Committee arising by resignation, death,
removal, or otherwise shall be filled by such persons as may be appointed by the
Board.
C.2 POWERS. The Committee shall have exclusive responsibility for the
administration of the Plan, according to the terms and provisions of this
document, and shall have all powers 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
thereof, provided such rules and regulations are evidenced in writing;
(b) to construe all terms, provisions, conditions, and
limitations of the Plan; and its construction thereof made in good
faith and without discrimination in favor of or against any Member
shall be final and conclusive on all parties at interest;
(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 expedient to carry the Plan into effect
for the greatest benefit of all parties at interest, and its judgment
in such matters shall be final and conclusive as to all parties at
interest;
(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, and any agent, firm,
or employee so selected by the Committee may be a disqualified person,
but only if the requirements of section 4975(d) of the Code have been
met;
(e) to resolve all questions relating to the eligibility of
Employees to become Members, and to determine the period of Vesting
Service and the amount of Considered Compensation with respect to which
the benefits of each Member shall be calculated;
(f) to resolve all controversies relating to the
administration of the Plan, including but not limited to (1)
differences of opinion arising between the Employer and a Member or
former Member, and (2) any questions it deems advisable to determine in
order to promote the uniform and nondiscriminatory administration of
the Plan for the benefit of all parties at interest;
C-1
56
(g) to direct and instruct or to appoint an investment manager
or managers 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.
(h) to direct and instruct the Trustee in all matters relating
to the payment of Plan benefits and to determine a Member's or former
Member's entitlement to a benefit should he appeal a denial of his
claim for a benefit or any portion thereof; and
(i) to delegate such of its clerical and recordation duties
under the Plan as it may deem necessary or advisable for the proper and
efficient administration of the Plan.
C.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, without regard as to whether that person is a member of that
Committee, who shall keep all records, documents, and data pertaining to its
supervision of the administration of the Plan.
C.4 QUORUM AND MAJORITY ACTION. A majority of the members of the
Committee shall constitute a quorum for the transaction of business, and the
vote of a majority of the members present at any meeting will decide any
question brought before that meeting. In addition, the Committee may decide any
question by a vote, taken without a meeting, of a majority of its members.
C.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, and to execute any certificate or other written evidence of the
action of the Committee. The Trustee, after being notified of any such
delegation of power in writing, shall thereafter accept and may rely upon any
document executed by such member or members as representing the action of the
Committee until the Committee files with the Trustee a written revocation of
that delegation of power.
C.6 DISQUALIFICATION OF COMMITTEE MEMBERS. A member of the Committee
who is also a Member of the Plan shall not vote or act upon any matter relating
solely to himself, unless he is the sole member of the Committee.
C.7 DISCLOSURE TO MEMBERS. The Committee shall make available to each
Member and Beneficiary for his examination such records, documents, and other
data as are required under ERISA, but only at reasonable times during business
hours. No Member or Beneficiary shall have the right to examine any data or
records reflecting the compensation paid to any other Member or Beneficiary, and
the Committee shall not be required to make any data or records available other
than those required by ERISA.
C.8 STANDARD OF PERFORMANCE. The Committee and each of its members
shall use the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in conducting his business as the administrator of the Plan;
shall, 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 shall otherwise act in
accordance with the provisions of the Plan and ERISA.
C-2
57
C.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, or any Member who directs the
investment of his Account or other agent appointed by the Committee except to
the extent required by the terms of ERISA, 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 terms of ERISA, and any other applicable state or federal law, which
liability cannot be waived. In this connection, each provision hereof is
severable and if any provision is found to be void as against public policy, it
shall not affect the validity of any other provision hereof.
Further, it is specifically provided that the Trustee may, at the
direction of the Committee, purchase out of the Trust assets hereof insurance
for the members of the Committee and any other fiduciaries appointed by the
Committee, and for the Trust 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 fiduciary appointed by them under the Plan, provided such insurance
permits recourse by the insurer against the members of the Committee or the
other fiduciaries concerned in the case of a breach of a fiduciary obligation by
one or more members of the Committee or other fiduciary covered thereby.
C.10 BONDING. No member of the Committee shall be required to give bond
for the performance of his duties hereunder unless required by a law which
cannot be waived.
C.11 COMPENSATION. The Committee shall serve without compensation for
their services, but shall be reimbursed by the Employers for all expenses
properly and actually incurred in the performance of their duties under the Plan
unless the Employers elect to have such expenses paid out of the Trust assets.
C.12 PERSONS SERVING IN DUAL FIDUCIARY ROLES. Any person, group of
persons, corporations, firm, or other entity may serve in more than one
fiduciary capacity with respect to the Plan, including the ability to serve both
as a successor trustee and as a member of the Committee.
C.13 ADMINISTRATOR. For all purposes of ERISA, the administrator of the
Plan within the meaning of ERISA shall be the Sponsor. The Sponsor shall have
final responsibility for compliance with all reporting and disclosure
requirements imposed with respect to the Plan under any federal or state law, or
any regulations promulgated thereunder.
C.14 NAMED FIDUCIARY. The members of the Committee shall be the "named
fiduciary" for purposes of section 402(a)(1) of ERISA, and as such shall have
the authority to control and manage the operation and administration of the
Plan, except to the extent such authority and control are allocated or delegated
to other parties pursuant to the terms of the Plan.
C.15 STANDARD OF JUDICIAL REVIEW OF COMMITTEE ACTIONS. The Committee
has full and absolute discretion in the exercise of each and every aspect of its
authority under the Plan, including without limitation, the authority to
determine any person's right to benefits under the Plan, the correct amount and
form of any such benefits; the authority to decide any appeal; the authority to
review and correct the actions of any prior administrative committee; and all of
the
C-3
58
rights, powers, and authorities specified in this Appendix C and elsewhere in
the Plan. Notwithstanding any provision of law or any explicit or implicit
provision of the Plan, or any action taken, or ruling or decision made, by the
Committee in the exercise of any of its powers and authorities under the Plan
will be final and conclusive as to all parties other than the Sponsor or
Trustee, including without limitation all Members and Beneficiaries, regardless
of whether the Committee or one or more members thereof may have an actual or
potential conflict of interest with respect to the subject matter of such
action, ruling, or decision. No such final action, ruling, or decision of the
Committee will be subject to de novo review in any judicial proceeding; and no
such final action, ruling, or decision of the Committee may be set aside unless
it is held to have been arbitrary and capricious by a final judgment of a court
having jurisdiction with respect to the issue.
C.16 INDEMNIFICATION OF THE BOARD AND THE COMMITTEE BY THE SPONSOR. The
Sponsor shall indemnify and hold harmless the Board, the Committee, the Board
members, the Committee members, and any Employees of an Employer to whom the
Committee has allocated or delegated its responsibilities in accordance with the
provisions hereof, as well as any other fiduciary who is also an officer,
director, or Employee of an Employer, and hold each of them harmless from and
against all claims, loss, damages, expense, and liability arising from their
responsibilities in connection with the administration of the Plan which is not
otherwise paid or reimbursed by insurance, unless the same shall result from
their own willful misconduct.
C-4
59
APPENDIX D
FUNDING
D.1 BENEFITS PROVIDED SOLELY BY TRUST. All benefits payable under the
Plan shall be paid or provided for solely from the Trust, and the Employer
assumes no liability or responsibility therefor.
D.2 FUNDING OF PLAN. The Plan shall be funded by one or more separate
Trusts. If more than one Trust is used, each Trust shall be designated by the
name of the Plan followed by a number assigned by the Committee at the time the
Trust is established.
D.3 INCORPORATION OF TRUST. Each Trust is a part of the Plan. All
rights or benefits which accrue to a person under the Plan shall be subject also
to the terms of the agreements creating the Trust or Trusts and any amendments
to them which are not in direct conflict with the Plan.
D.4 AUTHORITY OF TRUSTEE. Each Trustee shall have full title and legal
ownership of the assets in the separate Trust which, from time to time, are in
his or its separate possession. No other Trustee shall have joint title to or
joint legal ownership of any asset in one of the other Trusts held by another
Trustee. Each Trustee shall be governed separately by the trust agreement
entered into between the Employer and that Trustee and the terms of the Plan
without regard to any other agreement entered into between any other Trustee and
the Employer as a part of the Plan.
D.5 ALLOCATION OF RESPONSIBILITY. To the fullest extent permitted under
section 405 of ERISA, the agreements entered into between the Employer and each
of the Trustees shall be interpreted to allocate to each Trustee its specific
responsibilities, obligations and duties so as to relieve all other Trustees
from liability either through the agreement, Plan or ERISA, for any act of any
other Trustee which results in a loss to the Plan because of his act or failure
to act.
D.6 TRUSTEE'S FEES AND EXPENSES. The Trustee shall receive for its
services as Trustee hereunder the compensation which from time to time may be
agreed upon by the Sponsor and the Trustee. All of such compensation, together
with the expenses incurred by the Trustee in connection with the administration
of this Trust, including fees for legal services rendered to the Trustee, all
other charges and disbursements of the Trustee, and all other expenses of the
Plan shall be charged to and deducted from the Trust assets, unless the Sponsor
elects in writing to have any part or all of such compensation, expenses,
charges, and disbursements paid directly by the Sponsor. The Trustee shall
deduct from and charge against the Trust assets any and all taxes paid by it
which may be levied or assessed upon or in respect of the Trust hereunder or the
income thereof, and shall equitably allocate the same among the several Members.
D-1
