EXHIBIT 10.3
QUANEX CORPORATION 401(k)
SAVINGS PLAN
FOR HOURLY EMPLOYEES
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1, 1998
QUANEX CORPORATION 401(k) SAVINGS PLAN
FOR HOURLY EMPLOYEES
THIS AGREEMENT adopted by Quanex Corporation, a Delaware corporation
(the "Sponsor"),
WITNESSETH:
WHEREAS, effective October 1, 1987, Xxxxxxx-Homeshield, Inc.
established the Xxxxxxx-Homeshield, Inc. Savings Plan for Xxxxxxxxx Hourly
Employees (the "Plan");
WHEREAS, the Sponsor assumed sponsorship of the Plan effective January
1, 1992;
WHEREAS, effective July 1, 1999, the Decatur Aluminum Corporation
Hourly Employees' 401(k) Retirement Plan and Trust was merged into the Plan;
WHEREAS, effective January 1, 1999, the name of the Plan was changed to
the "Xxxxxxx 401(k) Savings Plan for Hourly Employees";
WHEREAS, effective July 1, 2001, the Temroc Metals, Inc. Bargaining
Unit Employees 401(k) Plan was merged into the Plan;
WHEREAS, effective January 1, 2002, the name of the Plan was changed to
the "Quanex Corporation 401(k) Savings Plan for Hourly Employees";
WHEREAS, the Plan is intended to be a profit sharing plan;
WHEREAS, the Sponsor desires to amend and restate the Plan;
NOW, THEREFORE, the Plan is hereby amended and restated in its entirety
as set forth below.
TABLE OF CONTENTS
SECTION
ARTICLE I - DEFINITIONS
Account.............................................................................................1.01
Active Service......................................................................................1.02
Affiliated Employer.................................................................................1.03
Annual Compensation.................................................................................1.04
Benefit Payment Date................................................................................1.05
Beneficiary or Beneficiaries........................................................................1.06
Board or Board of Directors.........................................................................1.07
Catch-up Eligible Participant.......................................................................1.08
Code................................................................................................1.09
Committee...........................................................................................1.10
Considered Compensation.............................................................................1.11
Contribution........................................................................................1.12
Decatur Plan........................................................................................1.13
Direct Rollover.....................................................................................1.14
Disability..........................................................................................1.15
Distributee.........................................................................................1.16
Eligible Employee...................................................................................1.17
Eligible Retirement Plan............................................................................1.18
Eligible Rollover Distribution......................................................................1.19
Employee............................................................................................1.20
Employer or Employers...............................................................................1.21
Entry Date..........................................................................................1.22
ERISA...............................................................................................1.23
Five Percent Owner..................................................................................1.24
Forfeitable Interest................................................................................1.25
Highly Compensated Employee.........................................................................1.26
Hour of Service.....................................................................................1.27
Leased Employee.....................................................................................1.28
Maternity or Paternity Absence......................................................................1.29
Nonforfeitable Interest.............................................................................1.30
Non-Highly Compensated Employee.....................................................................1.31
Participant.........................................................................................1.32
Period of Service...................................................................................1.33
Period of Severance.................................................................................1.34
Plan ..............................................................................................1.35
Plan Year...........................................................................................1.36
Qualified Domestic Relations Order..................................................................1.37
Regulation..........................................................................................1.38
Required Beginning Date.............................................................................1.39
Retirement Age......................................................................................1.40
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Rollover Contribution...............................................................................1.41
Separation From Service.............................................................................1.42
Severance From Service Date.........................................................................1.43
Xxxxxx Service......................................................................................1.44
Sponsor.............................................................................................1.45
Sponsor Stock.......................................................................................1.46
Spouse..............................................................................................1.47
Steelworkers Collective Bargaining Agreement........................................................1.48
Teamsters Collective Bargaining Agreement...........................................................1.49
Trust.............................................................................................. 1.50
Trustee.............................................................................................1.51
UAW Collective Bargaining Agreement.................................................................1.52
Valuation Date......................................................................................1.53
ARTICLE II - ELIGIBILITY
Eligible Employees of Temroc Metals, Inc............................................................2.01
Employees of the Sponsor Covered by the Teamsters
Collective Bargaining Agreement...................................................................2.02
Employees of Xxxxxxx Aluminum Alabama, Inc. Covered
By the Steelworkers Collective Bargaining Agreement...............................................2.03
Eligibility Upon Reemployment.......................................................................2.04
Cessation of Participation..........................................................................2.05
Recommencement of Participation.....................................................................2.06
ARTICLE III - CONTRIBUTIONS
Salary Deferral Contributions.......................................................................3.01
Catch-up Salary Deferral Contributions..............................................................3.02
Supplemental Contributions..........................................................................3.03
Gainsharing Contributions...........................................................................3.04
Rollover Contributions and Plan-to-Plan Transfers...................................................3.05
Restoration Contributions...........................................................................3.06
Restorative Payments................................................................................3.07
Nondeductible Contributions Not Required............................................................3.08
Form of Payment of Contributions....................................................................3.09
Deadline for Payment of Employer Contributions......................................................3.10
Return of Contributions for Mistake,
Disqualification or Disallowance of Deduction.....................................................3.11
ARTICLE IV - ALLOCATION AND VALUATION OF ACCOUNTS
Information Statements from Employer................................................................4.01
Allocation of Salary Deferral Contributions.........................................................4.02
Allocation of Catch-up Salary Deferral Contributions................................................4.03
Allocation of Supplemental Contributions............................................................4.04
Allocation of Gainsharing Contributions.............................................................4.05
Allocation of Forfeitures...........................................................................4.06
Valuation of Accounts...............................................................................4.07
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No Rights Unless Otherwise Prescribed...............................................................4.08
ARTICLE V - BENEFITS
Retirement Benefit..................................................................................5.01
Death Benefit.......................................................................................5.02
Form of Distribution................................................................................5.03
Immediate Payment of Small Amount Upon Separation From Service......................................5.04
Direct Rollover Option..............................................................................5.05
Time of Distribution................................................................................5.06
Consent to Distribution.............................................................................5.07
Information Provided to Participants................................................................5.08
Designation of Beneficiary..........................................................................5.09
Distributions to Minors and Incapacitated Persons...................................................5.10
Distributions Pursuant to Qualified Domestic Relations Orders.......................................5.11
Claims Procedure....................................................................................5.12
ARTICLE VI - IN-SERVICE DISTRIBUTIONS
In-Service Financial Hardship Distributions.........................................................6.01
In-Service Distributions for Certain Participants Who
Have Attained Age 59 1/2..........................................................................6.02
Method of Payment...................................................................................6.03
ARTICLE VII - LOANS
ARTICLE VIII - VESTING
ARTICLE IX - FORFEITURES AND RESTORATIONS
Forfeiture on Termination of Participation..........................................................9.01
Restoration of Forfeited Amounts....................................................................9.02
Forfeitures by Lost Participants or Beneficiaries...................................................9.03
Transition Rule for Decatur Plan Participants.......................................................9.04
ARTICLE X - ACTIVE SERVICE
General Rules......................................................................................10.01
Disregard of Certain Service.......................................................................10.02
Certain Brief Absences Counted as Active Service...................................................10.03
Special Maternity or Paternity Absence Rules.......................................................10.04
Employment Records Conclusive......................................................................10.05
Service Credit Required by Law.....................................................................10.06
Credit for Service With Alumi-Brite Corporation....................................................10.07
Credit for Service With Fruehauf Trailer Corporation...............................................10.08
Credit for Service With Decatur Aluminum Holdings Corp. and its Subsidiaries.......................10.09
Credit for Service With Temroc Metals, Inc.........................................................10.10
Special Transitional Rule..........................................................................10.11
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ARTICLE XI - INVESTMENT ELECTIONS
Investment Funds Established.......................................................................11.01
Election Procedures Established....................................................................11.02
ARTICLE XII - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure.................................................................................12.01
No Joint Venture Implied...........................................................................12.02
All Trust Assets Available to Pay All Benefits.....................................................12.03
Qualification a Condition Precedent to Adoption and Continued Participation........................12.04
ARTICLE XIII - AMENDMENT AND TERMINATION
Right to Amend and Limitations Thereon.............................................................13.01
Mandatory Amendments...............................................................................13.02
Withdrawal of Employer.............................................................................13.03
Termination of Plan................................................................................13.04
Partial or Complete Termination or Complete Discontinuance of Contributions........................13.05
ARTICLE XIV- MISCELLANEOUS
Plan Not an Employment Contract....................................................................14.01
Benefits Provided Solely From Trust................................................................14.02
Assignments Prohibited.............................................................................14.03
Requirements Upon Merger or Consolidation of Plans.................................................14.04
Gender of Words Used...............................................................................14.05
Severability.......................................................................................14.06
Reemployed Veterans................................................................................14.07
Limitations on Legal Actions.......................................................................14.08
Governing Law......................................................................................14.09
APPENDIX A - LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
APPENDIX B - ADMINISTRATION OF THE PLAN
APPENDIX C - FUNDING
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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 Participant or
former Participant which are maintained by the Committee to reflect the
Participant's or former Participant'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 Participant or former
Participant in the Trust. Each of the Accounts listed below and any additional
Accounts established by the Committee shall reflect the Contributions or amounts
transferred to the Trust, if any, 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 Participant's or
former Participant's before-tax contributions, if any, made pursuant to Section
3.01.
(b) Catch-up Salary Deferral Account - the Participant's or former
Participant's before-tax 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) Gainsharing Contribution Account - the Employer's
contributions, if any, made pursuant to Section 3.04.
(e) Rollover Account - funds transferred from another qualified
plan or individual retirement account for the benefit of a Participant or former
Participant.
1.02 "ACTIVE SERVICE" means the Periods of Service for which an
Employee is entitled to receive credit under Article X for purposes of
determining his initial eligibility to participate in the Plan and for purposes
of determining his Nonforfeitable Interest in amounts credited to his Account.
1.03 "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.
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1.04 "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) modified by including
elective contributions under a cafeteria plan maintained by an Affiliated
Employer that are excludable from the Employee's gross income pursuant to
section 125 of the Code, elective contributions under a qualified transportation
fringe benefit plan maintained by an Affiliated Employer that are excludable
from the Employee's gross income pursuant to section 132(f) of the Code and
elective contributions made on behalf of the Employee to any plan maintained by
an Affiliated Employer that is qualified under or governed by 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, effective for Plan Years commencing on or after January 1, 1994,
but prior to January 1, 2002, Annual Compensation in excess of $150,000.00 (as
adjusted by the Secretary of Treasury for increases in the cost of living) shall
be disregarded. Except for purposes of Section A.4.1 of Appendix A of the Plan,
effective for Plan Years commencing on or after January 1, 2002, Annual
Compensation in excess of $200,000.00 (as adjusted by the Secretary of Treasury
for increases in the cost of living) 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 for increases in the cost of living) or, for Plan Years
that commence on or after January 1, 2002, the $200,000.00 limitation (as
adjusted by the Secretary of Treasury for increases in the cost of living) 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 twelve
(12). Effective January 1, 1997, the family aggregation rules previously
contained in section 401(a)(17) of the Code are disregarded.
1.05 "BENEFIT PAYMENT DATE" means the first day of the first period for
which an amount is payable in installments, or in the case of a benefit payable
in the form of a lump sum, the date on which the Trustee disburses the lump sum.
1.06 "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 Participant's or former Participant's estate, designated by the Participant
or former Participant to receive the benefits payable under the Plan upon his
death.
1.07 "BOARD" or "BOARD OF DIRECTORS" means the board of directors of
the Sponsor.
1.08 "CATCH-UP ELIGIBLE PARTICIPANT" means a Participant who is age 50
or who is projected to attain the age of 50 by December 31 of the applicable
Plan Year.
1.09 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
1.10 "COMMITTEE" means the committee appointed by the Sponsor to
administer the Plan.
1.11 "CONSIDERED COMPENSATION" means Annual Compensation paid to a
Participant by an Affiliated Employer for a Plan Year, including regular base
pay, overtime pay, holiday pay, vacation pay, special pay, retroactive pay, sick
pay, short-term disability pay, shift
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premiums, Improshare productivity bonuses other than bonuses paid to a
Participant who is covered by the Steelworkers Collective Bargaining Agreement,
reduced by all of the following items (even if includable in gross income): all
reimbursements or other expense allowances (such as the payment of moving
expenses or automobile mileage reimbursements), cash and noncash fringe benefits
(such as the use of an automobile owned by the Employer, club memberships,
attendance and safety awards and fitness reimbursements), deferred compensation
(such as Employer contributions under the Sponsor's nonqualified stock purchase
plan and pay for accrued vacation upon Separation From Service) and welfare
benefits (such as severance pay). In addition, bonuses paid to a Participant who
is covered by the Steelworkers Collective Bargaining Agreement are not included
in "Considered Compensation." An Employee's Considered Compensation paid to him
during any period in which he is not eligible to participate in the Plan under
Article II shall be disregarded. Effective for Plan Years commencing on or after
January 1, 1994, but prior to January 1, 2002, Considered Compensation in excess
of $150,000.00 (as adjusted by the Secretary of Treasury) shall be disregarded.
Effective for Plan Years commencing on or after January 1, 2002, Considered
Compensation in excess of $200,000.00 (as adjusted by the Secretary of Treasury
for increases in the cost of living) 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 for increases in the cost of living) or, for Plan Years
that commence on or after January 1, 2002, the $200,000.00 limitation (as
adjusted by the Secretary of Treasury for increases in the cost of living) 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 twelve
(12).
1.12 "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 before-tax contribution made
by the Employer pursuant to Section 3.01 and the Employee's salary deferral
agreement.
(b) Catch-up Salary Deferral Contribution - a contribution made by
the Employer pursuant to Section 3.02 and the Participant's or former
Participant's salary deferral agreement.
(c) Supplemental Contribution - a contribution made by the
Employer pursuant to Section 3.03.
(d) Gainsharing Contribution - a contribution made by the Employer
pursuant to Section 3.04.
(e) Rollover Contribution - a contribution made by a Participant
or former Participant which consists of any part of an eligible rollover
distribution (as defined in section 402 of the Code) from a qualified employee
trust described in section 401(a) of the Code.
1.13 "DECATUR PLAN" means the Decatur Aluminum Corporation Hourly
Employees' 401(k) Retirement Plan and Trust.
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1.14 "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.15 "DISABILITY" means a mental or physical disability which, in the
opinion of a physician selected by the Committee, shall prevent the Participant
or former Participant from earning a reasonable livelihood with any Affiliated
Employer and which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months and
which: (a) was not contracted, suffered or incurred while the Participant or
former Participant was engaged in, or did not result from having engaged in, a
felonious criminal enterprise; (b) did not result from alcoholism or addiction
to narcotics; and (c) did not result from an injury incurred while a member of
the Armed Forces of the United States for which the Participant or former
Participant receives a military pension.
1.16 "DISTRIBUTEE" means an Employee or former Employee. In addition,
the Employee's or former Employee's surviving Spouse and the Employee's or
former Employee's Spouse or former Spouse who is the alternate payee under a
Qualified Domestic Relations Order, are Distributees with regard to the interest
of the Spouse or former Spouse.
1.17 "ELIGIBLE EMPLOYEE" means an Employee who is (1) compensated by
the Sponsor on an hourly basis and (2) is included in a unit of employees
covered by the Teamsters Collective Bargaining Agreement. Effective July 1,
1999, "Eligible Employee" also means an Employee who (1) is compensated on an
hourly basis by Xxxxxxx Aluminum Alabama, Inc., a Delaware corporation, and (2)
is included in a unit of employees covered by the Steelworkers Collective
Bargaining Agreement. Effective July 1, 2001, "Eligible Employee" also means an
Employee who (1) is compensated on an hourly basis by Temroc Metals, Inc., a
Minnesota corporation, and (2) is included in a unit of employees covered by the
UAW Collective Bargaining Agreement.
1.18 "ELIGIBLE RETIREMENT PLAN" means (a) an individual retirement
account described in section 408(a) of the Code, (b) an individual retirement
annuity described in section 408(b) of the Code (other than an endowment
contract), (c) an annuity plan described in section 403(a) of the Code, (d) 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,
(e) effective for a distribution on or after January 1, 2002, an eligible
deferred compensation plan described in section 457(b) of the Code that is
maintained by an eligible employer described in section 457(e)(1)(A) of the Code
but only if the plan agrees to separately account for amounts rolled into such
plan, or (f) effective for a distribution on or after January 1, 2002, an
annuity contract described in section 403(b) of the Code. However, in the case
of an Eligible Rollover Distribution made prior to January 1, 2002, and after
the death of a Participant to a Distributee who is the Participant's surviving
Spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
1.19 "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
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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) unless, for a distribution made on or after January 1, 2002, the
Eligible Retirement Plan to which the distribution is transferred (a) agrees to
separately account for amounts so transferred, including separately accounting
for the portion of such distribution which is not includable in gross income or
(b) is an individual retirement account described in section 408(a) of the Code
or an individual retirement annuity described in section 408(b) of the Code
(other than an endowment contract); and, (d) effective for distributions after
December 31, 1998, and prior to January 1, 2002, any financial hardship
distribution described in section 401(k)(2) of the Code from a Participant's
Salary Deferral Contribution Account and (e) effective for a distribution made
after December 31, 2001, a distribution from any of the Participant's Accounts
due to a financial hardship of the Participant.
1.20 "EMPLOYEE" means, except as otherwise specified in this Section,
all common law employees of an Affiliated Employer and all Leased Employees.
1.21 "EMPLOYER" OR "EMPLOYERS" means the Sponsor, Xxxxxxx
Aluminum-Alabama, Inc., a Delaware corporation (previously named Decatur
Aluminum Corp.), Temroc Metals, Inc., a Minnesota corporation and any other
business organization that adopts the Plan.
1.22 "ENTRY DATE" means the first day of each calendar quarter, January
1, April 1, July 1, and October 1.
1.23 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.24 "FIVE PERCENT OWNER" means an Employee who is a five percent owner
as defined in section 416(i) of the Code.
1.25 "FORFEITABLE INTEREST" means a Participant's or former
Participant's forfeitable interest in amounts credited to his Account determined
in accordance with Article VIII.
1.26 "HIGHLY COMPENSATED EMPLOYEE" means, effective January 1, 1997, an
Employee or an Affiliated Employer who, during the Plan Year or the preceding
Plan Year, (a) was at any time a Five Percent Owner at any time during the Plan
Year or the preceding Plan Year or (b) 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) for the preceding Plan Year.
1.27 "HOUR OF SERVICE" means each hour that an Employee is paid or
entitled to payment by an Affiliated Employer for the performance of duties.
1.28 "LEASED EMPLOYEE" means, effective January 1, 1997, 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 and control of the recipient.
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1.29 "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.
1.30 "NONFORFEITABLE INTEREST" means a Participant's nonforfeitable
interest in amounts credited to his Account determined in accordance with
Article VIII.
1.31 "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee who is not a
Highly Compensated Employee.
1.32 "PARTICIPANT" means an Employee who is eligible to participate in
the Plan under the provisions of Article II.
1.33 "PERIOD OF SERVICE" means a period of employment with 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.
1.34 "PERIOD OF SEVERANCE" means the period of time commencing on the
Employee's Severance From Service Date and ending on the date the Employee
subsequently performs an Hour of Service.
1.35 "PLAN" means the
Quanex Corporation 401(k) Savings Plan for Hourly
Employees, as amended from time to time.
1.36 "PLAN YEAR" means the calendar year.
1.37 "QUALIFIED DOMESTIC RELATIONS ORDER" means a qualified domestic
relations order as defined in section 414(p) of the Code.
1.38 "REGULATION" means the Department of Treasury regulation
specified, as it may be changed from time to time.
1.39 "REQUIRED BEGINNING DATE" means:
(a) effective January 1, 2001, 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 calendar
year in which he attains age 70 1/2.
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1.40 "RETIREMENT AGE" means, in the case of any Participant or former
Participant, age 65.
1.41 "ROLLOVER CONTRIBUTION" means the amount contributed by a
Participant 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 other than an amount that is not includable in the Participant's gross
income.
1.42 "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), effective for
distributions prior to January 1, 2002, any other entity under circumstances
where, 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.
1.43 "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 leave of 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.
1.44 "XXXXXX SERVICE" means the occurrence of a Participant's or former
Participant's Severance From Service Date.
1.45 "SPONSOR" means
Quanex Corporation, a Delaware corporation.
1.46 "SPONSOR STOCK" means the common stock of the Sponsor or such
other publicly-traded stock of an Affiliated Employer as meets the requirements
of section 407(d)(5) of ERISA with respect to the Plan.
1.47 "SPOUSE" means the person to whom the Participant or former
Participant is married under applicable local law. In addition, to the extent
provided in a Qualified Domestic Relations Order, a surviving former spouse of a
Participant or former Participant will be treated as the Spouse of the
Participant or former Participant, and to the same extent any current spouse of
the Participant or former Participant will not be treated as a Spouse of the
Participant or former Participant.
1.48 "STEELWORKERS COLLECTIVE BARGAINING AGREEMENT" means the
collective bargaining agreement between Xxxxxxx Aluminum Alabama, Inc., a
Delaware corporation, and the United Steelworkers of America, Local 203A.
1.49 "TEAMSTERS COLLECTIVE BARGAINING AGREEMENT" means the collective
bargaining agreement in effect between the Sponsor and the Chauffers, Teamsters
and Helpers Union, Local No. 371.
1.50 "TRUST" means the trust estate created to fund the Plan.
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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 "UAW COLLECTIVE BARGAINING AGREEMENT means the collective
bargaining agreement between Temroc Metals, Inc., a Minnesota corporation, and
the United Steelworkers of America, Local 203A.
1.53 "VALUATION DATE" means each business day of the Plan Year.
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ARTICLE II
ELIGIBILITY
2.01 EMPLOYEES OF TEMROC METALS, INC. COVERED BY THE UAW COLLECTIVE
BARGAINING AGREEMENT. Each Eligible Employee who was a participant in the Temroc
Metals, Inc. Bargaining Unit Employees' 401(k) Plan on June 30, 2001 shall be
eligible to participate in the Plan on July 1, 2001. Each other Eligible
Employee who is employed by Temroc Metals, Inc. shall be eligible to participate
in the Plan on the Entry Date that coincides with or next follows the date on
which the Eligible Employee completes 90 days of Active Service.
2.02 EMPLOYEES OF THE SPONSOR COVERED BY THE TEAMSTERS COLLECTIVE
BARGAINING AGREEMENT. Each Eligible Employee of the Sponsor who is included in a
unit of employees covered by the Teamsters Collective Bargaining Agreement shall
be eligible to participate in the Plan for purposes of making Salary Deferral
Contributions (and, if applicable, Catch-up Salary Deferral Contributions) and
Rollover Contributions on the Entry Date next following (not coincident with)
the date on which he completes an Hour of Service. Each such Eligible Employee
shall be eligible to participate in the Plan for Supplemental Contribution
purposes on the Entry Date that occurs with or next follows the date on which
the Eligible Employee completes one year of Active Service.
2.03 EMPLOYEES OF XXXXXXX ALUMINUM ALABAMA, INC. COVERED BY THE
STEELWORKERS COLLECTIVE BARGAINING AGREEMENT. Each Eligible Employee who was a
participant in the Decatur Plan for all purposes on June 30, 1999, shall be
eligible to participate in the Plan on July 1, 1999 for all purposes. Each other
Eligible Employee who is employed by Xxxxxxx Aluminum Alabama, Inc. and included
in a unit of employees covered by the Steelworkers Collective Bargaining
Agreement shall be a participant in the Plan for purposes of making Salary
Deferral Contributions (and, if applicable, Catch-up Salary Deferral
Contributions) and Rollover Contributions on the Entry Date next following (not
coincident with) the date on which he completes an Hour of Service. Each such
Eligible Employee shall be eligible to participate in the Plan for Supplemental
Contribution purposes on the Entry Date that occurs with or next follows the
date on which the Eligible Employee completes one year of Active Service.
2.04 ELIGIBILITY UPON REEMPLOYMENT. If an Employee incurs a Separation
From Service prior to the date he initially begins participating in the Plan, he
shall be eligible to begin participation in the Plan on the later of the date he
would have become a Participant if he did not incur a Separation From Service or
the date on which he performs an Hour of Service after he incurs a Separation
From Service. Subject to Section 2.05, once an Employee becomes a Participant,
his eligibility to participate in the Plan shall continue until he Xxxxxx
Service.
2.05 CESSATION OF PARTICIPATION. An individual who has become a
Participant will cease to be a Participant 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 Participant's
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Account becomes frozen; he cannot contribute to the Plan or share in the
allocation of any Contributions for the frozen period. However, his Accounts
shall continue to share in any Plan income allocable to his Accounts during the
frozen period of time.
2.06 RECOMMENCEMENT OF PARTICIPATION. A former Participant will again
become a Participant on the day on which he again becomes included in a
classification of Employees that, under the terms of the Plan, is eligible to
participate.
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ARTICLE III
CONTRIBUTIONS
3.01 SALARY DEFERRAL CONTRIBUTIONS. Each Plan Year each Employer shall
make a Salary Deferral Contribution in an amount equal to the amount by which
the Considered Compensation of its Employees who are Participants was reduced on
a pre-tax basis pursuant to salary deferral agreements (excluding amounts of
Considered Compensation deferred pursuant to Section 3.02 that are properly
characterized as Catch-up Salary Deferral Contributions). 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 Participant. 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 Participant of the
amount required to be contributed to the Trust. A Participant's or former
Participant's right to benefits attributable to Salary Deferral Contributions
made to the Plan on his behalf shall be nonforfeitable.
The maximum amount a Participant may elect to reduce his Considered
Compensation under his salary deferral agreement and have contributed to the
Plan on a pre-tax basis shall be determined by the Committee, in its sole
discretion from time to time. 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 CATCH-UP SALARY DEFERRAL CONTRIBUTIONS. Each Plan Year, each
Employer shall make a Catch-up Salary Deferral Contribution in an amount equal
to the amounts by which its Participants' Considered Compensation was reduced as
a result of salary deferral agreements authorizing Catch-up Salary Deferral
Contributions (to the extent that their deferrals are properly characterized as
Catch-up Salary Deferral Contributions). 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 behalf of the Participant. 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 Participant of the
amount required to be contributed to the Trust. A Participant's or former
Participant's right to benefits derived from Catch-up Salary Deferral
Contributions made to the Plan on his behalf shall be nonforfeitable.
Catch-up Salary Deferral Contributions on behalf of a Participant shall
be permitted to the extent that the Catch-up Salary Deferral Contributions do
not exceed the lesser of (a) the "applicable dollar amount" under section 414(v)
of the Code for the Plan Year (as adjusted from time to time by the Secretary of
Treasury), or (b) an amount equal to the Participant's Annual Compensation for
the Plan Year minus the Participant's Salary Deferral Contributions for the Plan
Year.
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A final determination as to whether amounts deferred under the Plan by
a Participant are properly characterized as Salary Deferral Contributions or
Catch-up Salary Deferral Contributions for a Plan Year shall be made as of the
end of the Plan Year. To the extent that amounts deferred under the Plan on a
pre-tax basis at the election of a Participant exceed the least of (a) the
lowest statutory limit on Salary Deferral Contributions (including limits
imposed under sections 401(a)(30) and 415 of the Code), (b) the maximum
limitation on Salary Deferral Contributions, if any, imposed by the Committee
pursuant to Section 3.01, or (c) the highest amount of Salary Deferral
Contributions on behalf of the Participant that may be retained in the Plan
under the rules of section 401(k)(8)(C) of the Code, the amounts deferred shall
be characterized as Catch-up Salary Deferral Contributions. Any amounts deferred
under the Plan on a pre-tax basis at the election of a Participant that are not
properly characterized as Catch-up Salary Deferral Contributions pursuant to the
rules of the preceding sentence shall be characterized as Salary Deferral
Contributions for all purposes under the Plan.
3.03 SUPPLEMENTAL CONTRIBUTIONS. Each Plan Year the Sponsor shall make
a Supplemental Contribution for its Eligible Employees who are Participants in
such amount as is required under the terms of the Teamsters Collective
Bargaining Agreement. Each Plan Year Xxxxxxx Aluminum Alabama, Inc. shall make a
Supplemental Contribution for its Eligible Employees who are Participants in
such amount as is required under the terms of the Steelworkers Collective
Bargaining Agreement.
3.04 GAINSHARING CONTRIBUTIONS. Each Plan Year Temroc Metals, Inc.
shall make a Gainsharing Contribution for its Eligible Employees who are
Participants in such amount as is required under the terms of the UAW Collective
Bargaining Agreement.
3.05 ROLLOVER CONTRIBUTIONS AND PLAN-TO-PLAN TRANSFERS. The Committee
may permit Rollover Contributions by Participants and/or direct transfers to or
from another qualified plan on behalf of Participants 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 Participants 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
Participants of the Plan even though they may not have met the Active 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 Participant 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 Participant's or former Participant's right to
benefits attributable to his Rollover Contributions made to the Plan shall be
nonforfeitable.
3.06 RESTORATION CONTRIBUTIONS. The Employer shall, for each Plan Year,
make a restoration contribution in an amount equal to the sum of (a) such
amount, if any, as shall be necessary to fully restore all Supplemental
Contribution Accounts required to be restored pursuant to the provisions of
Section 9.02 after the application of all forfeitures available for such
restoration; plus (b) an amount equal in value to the value of forfeited
benefits required to
III-2
be restored under Section 9.03, after the application of all forfeitures
available for such restoration.
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 Contribution 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 FORM OF PAYMENT OF CONTRIBUTIONS. Contributions may be paid to the
Trustee either in cash or in qualifying employer securities (as such term is
defined in section 407(d) of ERISA) or any combination thereof, provided that
payment may not be made in any form constituting a prohibited transaction under
section 4975 of the Code or section 406 of ERISA.
3.10 DEADLINE FOR PAYMENT OF 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
Supplemental Contributions and Xxxxxxxxxxx Contributions 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.
3.11 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 Participants, former
Participants 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; and
(b) 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
III-3
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 Participant's or former Participant's Account cannot be
reduced to less than the balance that would have been in the Participant's or
former Participant's Account had the mistaken amount or the amount disallowed
never been contributed.
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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, and restoration
contribution; the names of its Participants, the number of years of Active
Service of each of its Participants, the amount of Considered Compensation and
Annual Compensation paid to each Participant, and the amount of Considered
Compensation and Annual Compensation paid to all its Participants. Such
schedules shall be conclusive evidence of such facts.
4.02 ALLOCATION OF SALARY DEFERRAL CONTRIBUTIONS. The Committee or its
designee shall allocate the Salary Deferral Contribution among the Participants
by allocating to each Participant 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 Participant's share to his Salary
Deferral Contribution Account.
4.03 ALLOCATION OF CATCH-UP SALARY DEFERRAL CONTRIBUTION. The Committee
shall allocate the Catch-up Salary Deferral Contribution among the Participants
by allocating to each Participant the amount by which his Considered
Compensation was reduced pursuant to a salary deferral agreement under Section
3.02 and shall credit each such Participant's share to his Catch-up Salary
Deferral Contribution Account.
4.04 ALLOCATION OF SUPPLEMENTAL CONTRIBUTIONS. For each Plan Year, the
Committee shall allocate the Supplemental Contribution made by an Employer among
the Participants who are employed by the Employer during the Plan Year, based
upon each such Participant's Considered Compensation paid by the Employer as
compared to the Considered Compensation for all such Participants who are
employed by the Employer.
4.05 ALLOCATION OF GAINSHARING CONTRIBUTIONS. The Committee or its
designee shall allocate the Gainsharing Contribution among Participants who are
covered by the UAW Collective Bargaining Agreement in the manner required under
the UAW Collective Bargaining Agreement.
4.06 ALLOCATION OF FORFEITURES. At the time a forfeiture occurs
pursuant to Article VIII or Section A.3.2 of Appendix A, the amount forfeited
will first be used to reinstate any Account required to be reinstated under
Article VIII, and any remaining amount will be applied to reduce the Employer's
obligation to make future Supplemental Contributions.
4.07 VALUATION OF ACCOUNTS. A Participant's or former Participant's
Accounts shall be valued by the Trustee 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 Participant or former Participant on
whose behalf the investment in the asset was made. In determining the fair
market value of the Participant's or former Participant's Accounts, 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
IV-1
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.
4.08 NO RIGHTS UNLESS OTHERWISE PRESCRIBED. No allocations,
adjustments, credits, or transfers shall ever vest in any Participant or former
Participant any right, title, or interest in the Trust except at the times and
upon the terms and conditions set forth in the Plan.
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ARTICLE V
BENEFITS
5.01 RETIREMENT BENEFIT. Upon his Separation From Service, a
Participant or former Participant is entitled to receive his Nonforfeitable
Interest in his Account balances.
5.02 DEATH BENEFIT. If a Participant or former Participant dies, the
death benefit payable to his Beneficiary shall be the Participant's
Nonforfeitable Interest in 100 percent of the remaining amount of his Account
balances.
5.03 FORM OF DISTRIBUTION. Any distribution under the Plan shall be
made in the form of a cash lump sum. However, a Participant who accrued any
benefits under the Decatur Plan has the right to elect to receive payments in
the form of property instead of cash, but only with respect to his Decatur Plan
account balances that were transferred to the Plan.
5.04 DISTRIBUTION METHODS. Subject to Section 5.05, the distribution
methods available under the Plan are (a) a lump sum payment and (b) periodic
installment payments.
If a Participant or former Participant elects periodic installments
payments, his Account balances shall be paid in substantially equal monthly,
quarterly, semi-annual or annual periodic installments (as elected by him) for a
specified number of years which may not exceed his life expectancy or the joint
and last survivor life expectancy of him and his Beneficiary. Life expectancies
will be determined, under Regulations issued under section 79 of the Code, as of
the time payments commence. If installments are elected, the Committee may
direct that the Participant's or former Participant's interest in the Plan be
segregated and invested separately. Upon the death of a Participant or former
Participant prior to the complete distribution of his Account balances, his
Beneficiary may elect to receive the Beneficiary's interest in the Account in
(a) an immediate lump sum cash payment or (b) installment payments for any
period not in excess of the period (if any) selected by the Participant or
former Participant.
5.05 IMMEDIATE PAYMENT OF SMALL AMOUNT UPON SEPARATION FROM SERVICE.
Each Participant or former Participant whose Nonforfeitable Interest in his
Account balance at the time of a distribution to him on account of his
Separation From Service is, in the aggregate, less than or equal to $5,000.00,
shall be paid in the form of an immediate single sum cash payment and/or as a
Direct Rollover, as elected by him under section 5.05. However, if a Distributee
who is subject to this Section 5.04 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 an immediate lump sum cash distribution of his entire Plan benefit. If a
Participant's or former Participant's Nonforfeitable Interest in his Account
balance payable upon his Separation From Service is zero (because he has no
Nonforfeitable Interest in his Account balance), he will be deemed to receive an
immediate distribution of his entire Nonforfeitable Interest in his Account
balance.
5.06 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
V-1
to an Eligible Retirement Plan specified by him that will accept the Eligible
Rollover Distribution.
5.07 TIME OF DISTRIBUTION. Notwithstanding any other provision of the
Plan, any benefit payable under the Plan shall be distributed in compliance with
the following provisions:
(a) DISTRIBUTION DEADLINES FOR PARTICIPANTS OR FORMER PARTICIPANTS
WHO ARE 70 1/2 OR OLDER. If a Participant or former Participant attains 70 1/2,
the Participant or former Participant must elect to receive the distribution
required under section 401(a)(9) of the Code in one lump sum which must be paid
by his Required Beginning Date.
(b) DISTRIBUTION DEADLINE FOR DEATH BENEFITS. If a Participant or
former Participant dies before the distribution of his Plan benefit has
commenced, his entire interest shall be distributed within five years after his
death.
(c) LIMITATIONS ON DEATH BENEFITS. Benefits payable under the Plan
shall not be provided in any form that would cause a Participant's or former
Participant'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, effective
January 1, 2001, 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. The provisions of the Plan reflecting section 401(a)(9) of
the Code override any distribution options in the Plan inconsistent with such
Section.
(e) COMPLIANCE WITH SECTION 401(a)(14). Unless the Participant or
former Participant otherwise elects, the payment of benefits under the Plan to
the Participant or former Participant 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 Participant or former Participant attains the later of age 62 or
Retirement Age, (b) the tenth anniversary of the year in which the Participant
or former Participant commenced participation in the Plan, or (c) the
Participant's or former Participant's Separation From Service.
5.08 CONSENT TO DISTRIBUTION. Notwithstanding any other provision of
the Plan, no benefit shall be distributed or commence to be distributed to a
Participant or former Participant prior to his attainment of the later of age 62
or Retirement Age without his consent, unless the benefit is payable immediately
under Section 5.05. Any such consent shall be valid only if given not more than
90 days prior to the Participant's or former Participant's Benefit Payment Date
and after his receipt of the notice regarding benefits described in Section
5.09(a).
5.09 INFORMATION PROVIDED TO PARTICIPANTS. Information regarding the
form of benefits available under the Plan shall be provided to Participants or
former Participants in accordance with the following provisions:
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(a) General Information. The Sponsor shall provide each
Participant or former Participant with a written general explanation of the
Participant's or former Participant's right, if any, to defer receipt of the
distribution.
(b) Time for Giving Notice. The written general explanation or
description regarding any optional forms of benefit available under the Plan
shall be provided to a Participant or former Participant no less than 30 days
and no more than 90 days before his Benefit Payment Date unless he legally
waives this requirement.
5.10 DESIGNATION OF BENEFICIARY. Each Participant and former
Participant 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
Participant or former Participant and filed with the Committee. If no
designation is on file at the time of a Participant's or former Participant's
death or if the Committee determines that the designation is ineffective, the
designated Beneficiary shall be the Participant's or former Participant's
Spouse, if living, or if not, the executor, administrator or other personal
representative of the Participant's or former Participant's estate. If a
Participant or former Participant is considered to be married under local law,
his designation of any Beneficiary, other than his Spouse, shall not be valid
unless the Spouse acknowledges in writing that the Spouse understands the effect
of the Participant's or former Participant'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 Participant's or former Participant's Spouse's
acknowledgement and consent may be waived. If a Beneficiary other than the
Participant's or former Participant's Spouse is named, the designation shall
become invalid if the Participant or former Participant is later determined to
be married under local law, the Participant's or former Participant's missing
Spouse is located or the circumstances which resulted in the waiver of the
requirement of obtaining the consent of his Spouse no longer exist.
5.11 DISTRIBUTIONS TO MINORS AND INCAPACITATED PERSONS. If the
Committee determines that any person to whom a payment is due a minor or is
unable to care for his affairs because of physical or mental 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.
5.12 DISTRIBUTIONS PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS. 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 Participant or former Participant is not then entitled to receive an
immediate payment of Plan benefits.
V-3
5.13 CLAIMS PROCEDURE. When a benefit is due, the Participant, former
Participant or Beneficiary should submit his claim to the person or office
designated by the Committee to receive claims. Under normal circumstances, a
final decision shall be made 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, and the claims review procedure. If
no action is taken during the claims period, the claim is treated as if it were
denied on the last day of the claims period.
If a Participant's, former Participant's or Beneficiary's claim is
denied and he wants a review, he must apply to the Committee in writing. That
application may include any comment or argument the claimant wants to make. 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 may 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 60 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 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 their action and the Plan provisions on which their
decision is based. 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.
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ARTICLE VI
LOANS
Except as specified below, the Committee may direct the Trustees to
make loans to Participants (and Beneficiaries who are "parties in interest"
within the meaning of ERISA) who have Nonforfeitable Interests in their Account
balances. The Loan Committee established by the Committee will be responsible
for administering the Plan loan program. All loans will comply with the
following requirements:
(a) All loans will be made solely from the Participant'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 Participants.
(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 (A)
$50,000.00 reduced by the person's highest outstanding loan balance from the
Plan during the preceding one-year period, or (B) one-half of the person's
Nonforfeitable Interest in his Account balance under the Plan determined as of
the date on which the loan is approved by the Loan 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 Loan Committee will
require by uniform and nondiscriminatory rules consistent with this Article and
proper lending practices.
(f) All loans will bear a reasonable rate of interest which will
be established by the Loan Committee. In determining the proper rate of interest
to be charged, at the time any loan is made or renewed, the Loan Committee will
contact at least two of the largest banks in the geographic location in which
the Participant or Beneficiary resides to determine what interest rate the banks
would charge for a similar loan taking into account the collateral offered.
(g) Each loan will be fully secured by a pledge of the borrowing
person's Nonforfeitable Interest in his Account balance. No more than 50 percent
of the person's Nonforfeitable Interest in his Account balance (determined
immediately after the origination of the loan) will be considered as security
for any loan.
(h) The term of the loan will not be less than 18 months.
Generally, the term of the loan will not be more than five years. The Loan
Committee may agree to a longer term (but not more than seven years) 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.
VI-1
(i) The loan agreement will require level amortization over the
term of the loan. A Participant's loan agreement will also require that loan
repayments be made through payroll deductions.
(j) If a person fails to make a required payment within 30 days of
the due date set forth in the loan agreement, the loan will be in default.
(k) If a Participant or former Participant has an outstanding loan
from the Plan at the time of his Separation From Service, the outstanding loan
principal balance and any accrued but unpaid interest will become immediately
due in full. The Participant or former Participant will have the right to
immediately pay the Trustee that amount. If the Participant or former
Participant fails to repay the loan, the Trustee will foreclose on the loan and
the Participant will be deemed to have received a Plan distribution of the
amount foreclosed upon. The Trustee will not foreclose upon a Participant's or
former Participant's Salary Deferral Contribution Account or Catch-up Salary
Deferral Contributions Account until the Participant's Separation From Service.
(l) If a Beneficiary defaults on his loan, the Trustee will
foreclose on the loan and the Beneficiary will be deemed to have received a Plan
distribution of the amount foreclosed upon.
(m) No amount that is pledged as collateral for a Plan loan to a
Participant will be available for withdrawal before he has fully repaid his
loan.
(n) 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 Fund to be allocated to other
Participants.
VI-2
ARTICLE VII
IN-SERVICE DISTRIBUTIONS
7.01 IN-SERVICE FINANCIAL HARDSHIP DISTRIBUTIONS.
(a) General. Prior to his Separation From Service, a Participant
is entitled to receive a distribution from his Salary Deferral Contribution
Account (except for income that was not credited to his Salary Deferral Account
as of December 31, 1988), his Catch-up Salary Deferral Contribution Account
(except for income credited to his Catch-up Salary Deferral Contribution
Account), his Rollover Account, his Gainsharing Account, and his Nonforfeitable
Interest in his Supplemental Contribution Account in the event of an immediate
and heavy financial need incurred by the Participant and the Committee's
determination that the withdrawal is necessary to alleviate that hardship.
(b) Permitted Reasons For Financial Hardship Distributions. A
distribution shall be made on account of financial hardship only if the
distribution is for: (i) expenses for medical care described in section 213(d)
of the Code previously incurred by the Participant, the Participant's Spouse, or
any dependents of the Participant (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, (ii) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant, (iii) payment of tuition
and related educational fees for the next 12 months of post-secondary education
for the Participant, his Spouse, children, or dependents (as defined in section
152 of the Code), (iv) payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of the
Participant's principal residence, or (v) any other event added to this list by
the Commissioner of Internal Revenue. In addition to the foregoing reasons, a
Participant who is employed by Temroc Metals, Inc. may receive a financial
hardship distribution under this Section 7.01 to pay funeral or burial expenses
for a Participant's Spouse or dependent child.
(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 Participant and the Participant 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 Participant'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
Participant'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 (1) the lapse of 12
months following the hardship distribution and (2) 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 Participant
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, including stock option plans, stock purchase plans
and Code section 401(k) cash or deferred arrangements that are part
VII-1
of cafeteria plans described in section 125 of the Code. However, the
Participant 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.
(e) Resumption of Salary Deferral Contributions. Effective for
Plan Years that commence prior to January 1, 2002, when the Participant 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 Participant's behalf during the taxable year of the
Participant in which he received the hardship distribution.
(f) Order of Distributions. Financial hardship distributions will
be made in the following order: First withdrawals will be made from the
Participant's Rollover Contribution Account, then from his Supplemental
Contribution Account, then from his Gainsharing Contribution Account, then from
his Salary Deferral Contribution Account, and finally, from his Catch-up Salary
Deferral Contribution Account.
7.02 IN-SERVICE DISTRIBUTIONS FOR CERTAIN PARTICIPANTS WHO HAVE
ATTAINED AGE 59 1/2. Prior to his Separation From Service, a Participant who is
at least age 59 1/2 is entitled to withdraw all or any portion of his
Nonforfeitable Interest in amounts credited to his Accounts.
7.03 METHOD OF PAYMENT. Any distribution made pursuant to this Article
VII, will be paid in the form of a cash lump sum.
VII-2
ARTICLE VIII
VESTING
A Participant or former Participant has a fully Nonforfeitable Interest
in his entire Account balance when he (a) incurs a Disability on or prior to the
date of his Separation From Service, (b) attains his Normal Retirement Age on or
prior to the date of his Separation From Service, or (c) incurs a Separation
From Service due to death. A Participant or former Participant shall at all
times have a fully Nonforfeitable Interest in amounts credited to his Salary
Deferral Contribution Account, his Catch-up Salary Deferral Contribution
Account, and his Rollover Account. A Participant or former Participant who,
during his participation in the Plan, was included in a unit of employees
covered by the UAW Collective Bargaining Agreement, shall at all times have a
fully Nonforfeitable Interest in amounts credited to his Gainsharing
Contribution Account. A Participant or former Participant who, during his
participation in the Plan, was not included in a unit of employees covered by
the UAW Collective Bargaining Agreement shall have a Nonforfeitable Interest in
the following percentage of amounts credited to his Supplemental Contribution
Account:
Years of Active Service Completed by the
Participant or Former Participant Vested Percentage
---------------------------------------- -----------------
Less than one............................................................................. 0
One but less than two..................................................................... 20
Two but less than three................................................................... 40
Three but less than four.................................................................. 60
Four but less than five................................................................... 80
Five or more.............................................................................. 100
Subject to the possible application of Section 13.05, except as
specified above, a Participant or former Participant has a Forfeitable interest
in his Account balance and shall not be entitled to any benefits under the Plan
upon or following his Separation From Service.
VIII-1
ARTICLE IX
FORFEITURES AND RESTORATIONS
9.01 FORFEITURE ON TERMINATION OF PARTICIPATION.
(a) If as a result of his Separation From Service a Participant or
former Participant receives (or is deemed to receive under Section 5.05), a
distribution of his entire Nonforfeitable Interest in the Plan not later than
the end of the second Plan Year following the Plan Year in which his Separation
From Service occurs, the remaining Forfeitable Interest in his Account balance
will be immediately forfeited upon the distribution.
(b) If a Participant or former Participant neither receives nor is
deemed to receive a distribution as a result of his Separation From Service, the
Participant's or former Participant's Forfeitable Interest in his Account
balance 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 Participant or former
Participant who forfeited any portion of his Account balance pursuant to the
provisions of Section 8.01 subsequently performs an Hour of Service, then the
following provisions shall apply:
(a) Repayment Requirement. The Participant's Account balance
(unadjusted for gains or losses subsequent to the forfeiture) shall be restored
if he repays to the Trustee the full amount of any distribution 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 Participant
subsequently performs his first Hour of Service after his Separation From
Service. A Participant who is deemed to have received a distribution under
Section 5.04 (because he had no Nonforfeitable Interest in his Account balance)
will be deemed to have repaid his Account balance 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 Account
balance, both the amount distributed and the amount forfeited. The Participant's
Account balance shall be restored as soon as administratively practicable after
the later of the date the Participant first performs an Hour of Service after
his Separation From Service or the date on which any required repayment is
completed.
(c) No Other Basis for Restoration. Except as otherwise provided
above, a Participant's Account balance shall not be restored after it has been
forfeited pursuant to Section 9.01.
9.03 FORFEITURES BY LOST PARTICIPANTS OR BENEFICIARIES. If a person who
is entitled to a distribution cannot be located during a reasonable search after
the Committee has initially
IX-1
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 assets, the missing former Participant or Beneficiary files a claim
with the Committee for the forfeited Account balance, that Account balance shall
be reinstated (without adjustment for trust income or losses during the period
of forfeiture) effective as of the date of the receipt of the claim.
9.04 TRANSITION RULE FOR DECATUR PLAN PARTICIPANTS. Any Plan
forfeitures occurring during or prior to the 1999 Plan Year that are
attributable to persons who are or were employed by Xxxxxxx Aluminum-Alabama,
Inc. will be allocated to the Supplemental Contribution Accounts of Participants
who are Employees of Xxxxxxx Aluminum-Alabama, Inc. in the manner specified in
the provisions of the Decatur Plan as in effective immediately prior to January
1, 1999. Any forfeitures that occur during the 2000 Plan Year or subsequent Plan
Years will be applied as specified in the other provisions of this Article IX.
IX-2
ARTICLE X
ACTIVE SERVICE
10.01 GENERAL RULES. For purposes of determining an Employee's
eligibility to participate in the Plan and his Nonforfeitable Interest in his
Account balance, the Employee shall receive credit for Active Service commencing
on the date he first performs an Hour of Service and ending on his Severance
From Service Date. If such an Employee Xxxxxx Service, he shall recommence
earning Active Service when he again performs an Hour of Service. If such an
Employee performs an Hour of Service within twelve months after his Severance
From Service Date, the intervening Period of Severance shall be counted as
Active Service. When determining such an Employee's Active Service, all Periods
of Service, whether or not completed consecutively, shall be aggregated on a
per-day basis. In aggregating service for purposes of determining such an
Employee's Nonforfeitable Interest in amounts credited to his Account, 365 days
shall be counted as one year of Active Service. Except to the extent expressly
provided otherwise in the Plan, such an Employee shall be granted credit for all
Periods of Service with Affiliated Employers (including Periods of Service
performed while the Employee is not eligible to participate in the Plan because
he does not satisfy the requirements of Section 2.01).
10.02 DISREGARD OF CERTAIN SERVICE. If such an Employee incurs a
Separation From Service at a time when he does not have a Nonforfeitable
Interest in a portion of his Supplemental Contribution 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 as Active Service, if his Period of Severance equals
or exceeds his Period of Service, whether or not consecutive, completed before
the Period of Severance.
10.03 CERTAIN BRIEF ABSENCES COUNTED AS ACTIVE SERVICE. If an
Employee performs an Hour of Service within 365 days after he Xxxxxx Service,
the intervening Period of Severance shall be counted as a Period of Service.
10.04 SPECIAL MATERNITY OR PATERNITY ABSENCE RULES. Except as
specified below, the period of time between (a) the first anniversary of the
first day of a Maternity or Paternity Absence of such 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 Active 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 Active Service for the entire period of his
Maternity or Paternity Absence.
10.05 EMPLOYMENT RECORDS CONCLUSIVE. The employment records of the
Employer shall be conclusive for all determinations of Active Service.
10.06 SERVICE CREDIT REQUIRED BY LAW. An Employee will be granted
credit for Active Service for time he is not actively performing services for an
Affiliated Employer to the extent required under federal law. An Employee will
be granted credit for Active Service for
X-1
services performed for a predecessor employer to the extent required by section
414(a) of the Code and Regulations issued thereunder.
10.07 CREDIT FOR SERVICE WITH ALUMI-BRITE CORPORATION. For purposes of
determining an Employee's Active Service for eligibility to participate and
vesting, his service with Alumi-Brite Corporation, an Illinois corporation, will
be counted as Active Service under the Plan.
10.08 CREDIT FOR SERVICE WITH FRUEHAUF TRAILER CORPORATION. For
purposes of determining an Employee's Active Service for eligibility to
participate and vesting, his service with Fruehauf Trailer Corporation, a
Delaware corporation, will be counted as Active Service under the Plan.
10.09 CREDIT FOR SERVICE WITH DECATUR ALUMINUM HOLDINGS CORP. AND ITS
SUBSIDIARIES. For purposes of determining an Employee's Active Service for
eligibility to participate and for purposes of determining an Employee's
Nonforfeitable Interest in amounts credited to his Account, his service with
Decatur Aluminum Holdings Corp., a Delaware corporation, and its wholly-owned
subsidiaries will be counted as Active Service under the Plan.
10.10 CREDIT FOR SERVICE WITH TEMROC METALS, INC. For purposes of
determining an Employee's Active Service for eligibility to participate and for
purposes of determining an Employee's Nonforfeitable Interest in amounts
credited to his Account, his service with Temroc Metals, Inc., a Minnesota
corporation, will be counted as Active Service under the Plan.
10.11 SPECIAL TRANSITIONAL RULE. Any Eligible Employee who is covered
by the Teamsters Collective Bargaining Agreement and who was an Employee prior
to July 1, 1999 shall have his Active Service calculated under the provisions of
the Plan in effect on June 30, 1999 if that method of calculating his Active
Service is more beneficial for him than the method otherwise set out in this
Article X.
X-2
ARTICLE XI
INVESTMENT ELECTIONS
11.01 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 Participants and former Participants. In accordance with procedures
established by the Committee, each Participant and former Participant may
designate the percentage of his Account to be invested in each investment fund
available under the Plan. Up to one hundred percent of the Trust assets may be
invested in Sponsor Stock.
11.02 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 Participant's or former Participant'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 Participant'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.
XI-1
ARTICLE XII
ADOPTION OF PLAN BY OTHER EMPLOYERS
12.01 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.
12.02 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.
12.03 ALL TRUST ASSETS AVAILABLE TO PAY ALL BENEFITS. The Accounts of
Participants 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 Participants employed by any Employer.
12.04 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 Participants covered by that adoption.
XII-1
ARTICLE XIII
AMENDMENT AND TERMINATION
13.01 RIGHT TO AMEND AND LIMITATIONS THEREON. The Sponsor has the sole
right to amend the Plan. An amendment may be made by a certified resolution or
consent of the Board, or by an instrument in writing executed by the appropriate
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, former or future
Participants and their Beneficiaries except under the circumstances described in
Section 3.11;
(c) decrease the Account of any Participant or former
Participant, or eliminate an optional form of payment in violation of section
411(d)(6) of the Code; or
(d) change the vesting schedule to one which would result in a
Participant's or former Participant's Nonforfeitable Interest in his Account
balance (determined as of the later of the date of the adoption of the amendment
or of the effective date of the amendment) of any Participant or former
Participant being less than his Nonforfeitable Interest computed under the Plan
without regard to the amendment. If the Plan's vesting schedule is amended or if
the Plan is deemed amended by an automatic change to or from a top-heavy vesting
schedule, each Participant or former Participant who has at least three years of
Active Service as of the date of the amendment or change shall have his
nonforfeitable percentage computed under the Plan without regard to the
amendment or the change if that results in a higher Nonforfeitable Interest in
his Account balance.
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 in the rejection.
13.02 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;
(c) except as otherwise prescribed by applicable law, exempt from
with- holding 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.
XIII-1
The Sponsor shall make any amendment necessary to carry out this
intention, and it may be made retroactively.
13.03 WITHDRAWAL OF EMPLOYER. An Employer may withdraw from the Plan
and the Trust if the Sponsor does not acquiesce in its 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 Participants 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.
A withdrawal shall not terminate the Plan and the Trust with respect to
the withdrawing Employer, if the Employer either appoints a successor trustee
and reaffirms the Plan and the Trust as its new and separate plan and trust
intended to qualify under section 401(a) of the Code, or establishes another
plan and trust intended to qualify under section 401(a) of the Code.
The determination of the Committee, in its sole discretion, of the
portion of the Trust assets that is attributable to the Participants 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 Participants employed by that Employer and their
Beneficiaries, and the successor trustee.
13.04 TERMINATION OF PLAN. The Sponsor may 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, specifying the date of termination.
13.05 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 (within the meaning of section 411 of
the Code and Regulations thereunder) or there is a complete discontinuance of
the Employer's Contributions (within the meaning of section 411 of the Code and
Regulations thereunder), each of the affected Participants shall immediately
have a fully 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 Participant's Account
beginning with the Plan Year for which they were resumed.
XIII-2
ARTICLE XIV
MISCELLANEOUS
14.01 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.
14.02 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.
14.03 ASSIGNMENTS PROHIBITED. No principal or income payable or to
become payable from the Trust Fund shall be subject to anticipation or
assignment by a Participant, former Participant or Beneficiary to attachment by,
interference with, or control of any creditor of a Participant, former
Participant or Beneficiary; or to being taken or reached by any legal or
equitable process in satisfaction of any debt or liability of a Participant,
former Participant, or Beneficiary prior to its actual receipt by the
Participant, former Participant or Beneficiary. Any attempted conveyance,
transfer, assignment, mortgage, pledge, or encumbrance of any Trust assets, any
part of it, or any interest in it by a Participant, former Participant 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 Participant, former Participant, 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 Participant, former Participant or
Beneficiary for any cause whatsoever. These prohibitions against the alienation
of a Participant'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, effective
for judgments, orders and decrees issued, and settlement agreements entered
into, on or after August 5, 1997, these prohibitions shall not apply to any
offset of a Participant's or former Participant's benefits provided under a Plan
against an amount that the Participant or former Participant is ordered or
required to pay to the Plan if--(a) the order or requirement to pay arises--(1)
under a judgment of conviction for a crime involving the Plan, (2) under a civil
judgment (including a consent order or decree) entered by a court in an action
brought in connection with an alleged violation of part 4 of subtitle B of title
I of ERISA, or (3) pursuant to a settlement agreement between the Secretary of
Labor and the Participant or former Participant in connection with a violation
(or alleged violation) of part 4 of subtitle B 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 part of the amount ordered or
required to be paid to the Plan against the Participant's or former
Participant's benefits provided under the Plan.
XIV-1
14.04 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 Participant 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).
14.05 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.
14.06 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.
14.07 REEMPLOYED VETERANS. Effective January 12, 1994, 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.
14.08 LIMITATIONS ON LEGAL ACTIONS. No person may bring an action
pertaining to the Plan or Trust until he has exhausted his administrative claims
and appeal remedies identified in Section 5.13. Further, no person may bring an
action pertaining to a claim for benefits under the Plan or the Trust following
180 days after the Committee's final denial of his claim for benefits.
14.09 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.
XIV-2
IN WITNESS WHEREOF,
Quanex Corporation has caused this Agreement to be
executed this 22nd day of February, 2002, in multiple counterparts, each of
which shall be deemed to be an original, to be effective the 1st day of January,
1998, except for those provisions which have an earlier effective date provided
by law, or as otherwise provided under applicable provisions of the Plan.
QUANEX CORPORATION
By /s/ Xxxxx X. Xxxxxx
-------------------
Title: Controller
----------
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 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 Salary Deferral 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.1.2 "ACTUAL DEFERRAL RATIO" means the ratio of Salary Deferral
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.1.3 "ANNUAL ADDITIONS" means the sum of the following amounts
credited on behalf of a Participant for the Limitation Year: (a) Employer
contributions excluding Catch-up Salary Deferral Contributions and including
Salary Deferral Contributions, (b) Employee after-tax contributions and (c)
forfeitures. For this purpose, Employee contributions are determined without
regard to any rollover contributions (as defined in sections 402(c), 403(a)(4),
403(b)(8), 408(d)(3) and 457(e)(16) of the Code without regard to employee
contributions to a simplified employee pension which are excludable from gross
income under section 408(k)(6) of the Code). 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.1.4 "EXCESS AMOUNT" shall mean the excess of the Annual Additions
credited to the Participant's Account for the Limitation Year over the Maximum
Permissible Amount.
A.1.5 "EXCESS 401(k) CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of (a) the aggregate amount of Salary Deferral 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.2.3.
A.1.6 "LIMITATION YEAR" shall mean the Plan Year. All qualified plans
maintained by any Affiliated Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12-consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.
A.1.7 "MAXIMUM PERMISSIBLE AMOUNT" means, for Limitation Years that
commence prior to January 1, 2002, the lesser of (1) $30,000.00 as adjusted by
the Secretary of Treasury for increases in the cost of living, or (2) 25 percent
of the Participant's Annual Compensation for the Limitation Year. "Maximum
Permissible Amount" means, for Limitation Years that commence on or after
January 1, 2002, the lesser of (1) $40,000.00 as adjusted by the Secretary of
Treasury for increases in the cost of living or (2) 100 percent of the
Participant's Annual Compensation for the Limitation Year. The Annual
Compensation limitation referred to in clauses (2) of the immediately preceding
sentences shall not apply to any contribution for medical benefits (within the
meaning of section 401(h) or section 419A(f)(2) of the Code) that is otherwise
treated as an Annual Addition under section 415(l)(1) or section 419A(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.
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PART A.2 LIMITATIONS ON CONTRIBUTIONS
A.2.1 LIMITATIONS BASED UPON DEDUCTIBILITY AND THE MAXIMUM ALLOCATION
PERMITTED TO A PARTICIPANT'S ACCOUNT. Notwithstanding any other provision of the
Plan, no Employer shall make any contribution that would be a nondeductible
contribution within the meaning of section 4972 of the Code or that would cause
the limitation on allocations to each Participant's Account under section 415 of
the Code and Section A.4.1 to be exceeded.
A.2.2 DOLLAR LIMITATION UPON SALARY DEFERRAL CONTRIBUTIONS. The maximum
Salary Deferral Contribution that a Participant may elect to have made on his
behalf during the Participant's taxable year may not, when added to the amounts
deferred under other plans or arrangements described in sections 401(k), 408(k)
and 403(b) of the Code, exceed $7,000 (as adjusted by the Secretary of
Treasury). For purposes of applying the requirements of Section A.2.3, 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 are not
to be taken into account under Section A.2.3.
A.2.3 LIMITATION BASED UPON ACTUAL DEFERRAL PERCENTAGE. Effective for
Plan Years commencing on or after January 1, 1997, the Actual Deferral
Percentage for eligible Highly Compensated Employees for any Plan Year must bear
a relationship to the Actual Deferral Percentage for all other eligible
Employees for (1) the preceding Plan Year in the case of testing for Plan Years
commencing on or after January 1, 1998, or (2) the current Plan Year in the case
of testing for Plan Years commencing prior to January 1, 1998, which meets
either of the following tests:
(a) 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
(b) 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 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 Participant 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 Participant, all such cash or
deferred arrangements are treated as one plan for these dates.
Notwithstanding the foregoing, effective for Plan Years commencing on
or after January 1, 1998, 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.2.3 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 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 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 is allocated to an Employee as of a date within that Plan Year. For
this purpose a
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Salary Deferral 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 Salary Deferral Contribution is actually paid
to the Trust no later than 12 months after the Plan Year to which the Salary
Deferral 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.
For the Plan Year that commences on January 1, 1998, the Actual
Deferral Percentage of persons who are not Highly Compensated Employees will be
determined by taking into account only Salary Deferral Contributions for such
persons that were taken into account for purposes of the actual deferral
percentage test set forth in section 401(k) of the Code and this Section A.2.3
for the Plan Year that commenced on January 1, 1997.
Notwithstanding any other provision of the Plan except the immediately
following sentence, the Sponsor may if it so chooses, for any given Plan Year,
apply the Actual Deferral Percentage test set forth in this Section A.2.3
separately with respect to one or more groups of Employees covered by separate
collective bargaining agreements. Further, notwithstanding any other provision
of the Plan, the Sponsor shall apply the Actual Deferral Percentage test set
forth in this Section A.2.3 separately with respect to Employees who are covered
by the Steelworkers Collective Bargaining Agreement.
PART A.3 CORRECTION PROCEDURES FOR ERRONEOUS CONTRIBUTIONS
A.3.1 EXCESS DEFERRAL FAIL SAFE PROVISION. As soon as practical 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 Participant, the
Excess Deferral as adjusted by any earnings or losses, will be distributed to
the Participant no later than April 15 following the Participant's taxable year
in which the Excess Deferral was made. The income allocable to the Excess
Deferrals for the taxable year of the Participant shall be determined by
multiplying the income for the taxable year of the Participant 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 Participant for the
taxable year. The denominator of the fraction is the Participant's total Salary
Deferral Account balance as of the beginning of the taxable year plus the
Participant'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.2.3. If the limitation would
be exceeded for a Plan Year, before the close of the following Plan Year 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.3.3) shall be distributed.
The amount of Excess 401(k) Contributions to be distributed shall be
determined in the following manner:
First, the Plan 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 Deferral Ratio to equal the Actual Deferral Ratio of the Highly
Compensated Employee with the next highest Actual Deferral Ratio. If a lesser
reduction would enable the Plan to satisfy the Actual Deferral Percentage Test,
only this 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, effective for Plan Years that commence on or after January 1,
1997, 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
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the greatest dollar amount of Salary Deferral Contributions 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
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.3.2,
would equal the total Excess 401(k) Contributions, the lesser reduction amount
shall be distributed. This process shall be continued until the amount of the
Excess 401(k) Contributions have been distributed.
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.3.3 INCOME ALLOCABLE TO EXCESS 401(k) 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 Salary Deferral
Contributions by a fraction. The numerator of the fraction shall be the amount
of Excess 401(k) Contributions made on behalf of the Participant for the Plan
Year. The denominator of the fraction shall be the Participant's total Account
balance attributable to Salary Deferral Contributions as of the beginning of the
Plan Year plus the Participant's Salary Deferral 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 Participant's Accounts under the Plan for any Limitation Year
will not exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant'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 Participant 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
Participant's Accounts 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 Participant under such other qualified defined
contribution plans maintained by any Affiliated Employer in the aggregate are
equal to or greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Account under the Plan for the
Limitation Year. Effective as of January 1, 1987, until January 1, 2000 (the
effective date of the repeal of section 415(e) of the Code) a permanent
adjustment shall be made to the defined contribution fraction for purposes of
applying the limitation of section 415(e) of the Code to the Plan. The
adjustment is to permanently subtract from the defined contribution numerator an
amount equal to the product of (1) the sum of the defined contribution fraction
plus the defined benefit fraction as of the determination date minus one, times
(2) the denominator of the defined contribution fraction as of the determination
date. For this purpose, the determination date is December 31, 1986. Both
fractions in clauses (1) and (2) above are computed in accordance with section
415 of the Code as amended by the Tax Reform Act of 1986 and section 1106(i)(3)
of the Tax Reform Act of 1986.
A.4.2 ESTIMATION OF MAXIMUM PERMISSIBLE AMOUNT. Prior to determining
the Participant'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 Participant's Annual Compensation for such
Limitation Year, uniformly determined for all Participants 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 Participant's actual Annual Compensation for such Limitation
Year.
A.4.3 ATTRIBUTION OF EXCESS AMOUNTS. If a Participant's Annual
Additions under the Plan and all other qualified defined contribution plans
maintained by any Affiliated Employer result in an Excess Amount, the total
Excess Amount shall be attributed to the Plan.
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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 (i) the allocation
of forfeitures, (ii) reasonable error in estimating a Participant's Considered
Compensation, (iii) reasonable error in calculating the maximum Salary Deferral
Contribution that may be made with respect to a Participant under section 415 of
the Code or (iv) any other facts and circumstances which the Commissioner of
Internal Revenue finds to be justified, the Excess Amount shall be reduced as
follows:
(a) First, the Excess Amount shall be reduced to the extent
necessary by distributing to the Participant 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.
(b) Second, if the Participant is still employed by the
Employer at the end of the Limitation Year, then such Excess Amounts
shall not be distributed to the Participant, 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 Participant in the next Limitation Year, and for each
succeeding Limitation Year, if necessary.
(c) If, after application of paragraph (b) of this Section, an
Excess Amount still exists, and the Participant is not still employed
by the Employer at the end of the Limitation Year, then such Excess
Amounts in the Participant's Accounts shall not be distributed to the
Participant, 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 Participants in the
next Limitation Year and each succeeding Limitation Year if necessary.
(d) 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 Fund'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 Participants' Accounts before any Employer
Contribution may be made to the Plan for that Limitation Year. Excess
Amounts may not be distributed to Participants or former Participants.
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.
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APPENDIX B
ADMINISTRATION OF THE PLAN
B.1 APPOINTMENT, TERM, RESIGNATION, AND REMOVAL. The Board shall
appoint a Committee of not less 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.
B.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 Participant
or former Participant 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 Participants, and to determine the period of Active
Service and the amount of Considered Compensation upon which the
benefits of each Participant shall be calculated;
(f) to 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 Participant
or former Participant, 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;
(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 assets;
provided, however, that the Committee shall have no authority that
would prevent the Trustee from being an "agent independent of the
issuer," as that term is defined in Rule 10b-18 promulgated under the
Securities Exchange Act of 1934, at any time that the Trustee's failure
to maintain such status would result in the Sponsor or any other person
engaging in a "manipulative or deceptive device or contrivance" under
the provisions of Rule 10b-6 of such Act;
(h) to direct and instruct the Trustee in all matters relating
to the payment of Plan benefits and to determine a Participant's or
former Participant's entitlement to a benefit should he appeal a denial
of his claim for a benefit or any portion thereof; and
B-1
(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.
B.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 the
Committee, who shall keep all records, documents, and data pertaining to its
supervision of the administration of the Plan.
B.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.
B.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.
B.6 DISQUALIFICATION OF COMMITTEE MEMBERS. A member of the Committee
who is also a Participant of the Plan shall not vote or act upon any matter
relating solely to himself.
B.7 DISCLOSURE TO PARTICIPANTS. The Committee shall make available to
each Participant, former Participant, 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 Participant, former Participant, or
Beneficiary shall have the right to examine any data or records reflecting the
compensation paid to any other Participant, former Participant, or Beneficiary,
and the Committee shall not be required to make any data or records available
other than those required by ERISA.
B.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.
B.9 LIABILITY OF ADMINISTRATIVE 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 Participant
or former Participant 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 Participant 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 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.
B-2
B.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.
B.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.
B.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.
B.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.
B.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 is allocated or delegated
to other parties pursuant to the terms of the Plan.
B.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 rights, powers, and authorities specified in this Appendix and elsewhere in
the Plan. Notwithstanding any provision of law or any explicit or implicit
provision of this document, 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 Participants, former Participants 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.
B.16 INDEMNIFICATION OF COMMITTEE BY THE SPONSOR. The Sponsor shall
indemnify and hold harmless the Committee, the Committee members, and any
persons 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.
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APPENDIX C
FUNDING
C.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.
C.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.
C.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.
C.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, is in
his 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.
C.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.
C.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 Fund, 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
Participants and former Participants.
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