EXHIBIT 10.1
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
("ESOP")
GENERALLY EFFECTIVE AS OF JANUARY 1, 1999
TABLE OF CONTENTS
ARTICLE 1 PURPOSE AND AMENDMENT OF THE PLAN
1.01 Amendment of the Plan
1.02 Purpose
1.03 Trust Agreement
ARTICLE 2 DEFINITIONS
ARTICLE 3 REQUIREMENTS FOR ELIGIBILITY AND PARTICIPATION
3.01 Eligibility
3.02 Employment with a Predecessor Employer
3.03 Change in Status of Eligible Employee
3.04 Participation in the Plan
3.05 Military Service
ARTICLE 4 CONTRIBUTIONS
4.01 Employer Contributions
4.02 Matching Contributions
4.03 Date of Payment of Matching Contributions, Discretionary
Contributions and Pre-Tax Contributions
4.04 Pre-Tax Contributions; Change of Election
4.05 Limitation on Pre-Tax Contributions for Highly Compensated
Employees
4.06 Distribution of Excess Deferrals
4.07 Limitation on Pre-Tax Contributions
4.08 General Withdrawal from After-Tax Contribution Account
4.09 General Withdrawal of Pre-Tax Contributions and Distributions
Restrictions
4.10 Hardship Withdrawals from After-Tax Contribution Account
and Pre-Tax Contribution Account
4.11 Procedure for Withdrawal
4.12 Discretionary Contributions
4.13 Securities Law Limitations on Contributions
ARTICLE 5 ALLOCATION TO PARTICIPANTS' ACCOUNTS
5.01 Trust Accounts
5.02 Contribution Allocations to Accounts
5.03 Time of Allocating Contributions
5.04 Accounts of Participants Transferred to an Affiliated Company
Which has Not Adopted the Plan
5.05 Treatment of Company Stock Purchased under an Exempt Loan
5.06 Limitation on Annual Additions Under Code Section 415
5.07 Limitations on Annual Additions for Employers or Affiliated
Companies Maintaining other Defined Contribution Plans
5.08 Limitations on Annual Additions for Employers or Affliliated
Companies Maintaining Defined Benefit Plans
5.09 Definitions for Purposes of Determining the Annual Addition
Limitations
5.10 Cessation of Eligible Employee Status
5.11 Inclusion of Ineligible Employee and Erroneous Allocations
ARTICLE 6 VALUATION OF TRUST FUND
6.01 Valuation of the Trust Fund and Account Statements
6.02 Forfeitures
6.03 Trust Fund
6.04 Voting of Shares; Exercise of Other Rights
6.05 Put Option with Respect to Company Stock
6.06 Exempt Loan to Purchase Company Stock; Certain Conditions
Applicable to Such Company Stock
6.07 Diversification of Participant's Account
6.08 Emergency Valuation
ARTICLE 7 RETIREMENT BENEFITS
ARTICLE 8 DISABILITY BENEFITS
8.01 Disability Retirement
8.02 Determination of Disability
ARTICLE 9 DEATH BENEFITS
9.01 Death Benefits
9.02 Designation of Beneficiaries
ARTICLE 10 EMPLOYMENT TERMINATION BENEFITS
10.01 Vesting upon Termination of Employment
10.02 Determination of Vesting Years of Service
10.03 Vesting on Divestiture of an Employer
10.04 Forfeiture of Employer Contributions Account
10.05 Restoration of Forfeited Accounts
ARTICLE 11 PAYMENT OF BENEFITS
11.01 Method of Payment
11.02 Time for Distribution of Benefits
11.03 Limitations on Timing
11.04 Restrictions on Distribution
11.05 Payments on Personal Receipt Except in Case of Legal Disability
11.06 Benefits Payable Pursuant to a Qualified Domestic Relations Order
11.07 Direct Rollovers
ARTICLE 12 MISCELLANEOUS PROVISIONS RESPECTING PARTICIPANTS
12.01 Participants to Furnish Required Information
12.02 Participants' Rights in Trust Fund
12.03 Inalienability of Benefits
12.04 Conditions of Employment Not Affected by Plan
12.05 Address for Mailing of Benefits
12.06 Unclaimed Account Procedure
12.07 No Rollovers
ARTICLE 13 ADMINISTRATION OF THE PLAN
13.01 Plan Administrator
13.02 Compensated Expenses of the Plan Administrator
13.03 Agents of the Plan Administrator
13.04 Reliance on Directions of Plan Administrator
13.05 Authority of Plan Administrator
13.06 Authorization of Loan Transactions
13.07 General Administrative Powers
13.08 Additional Powers
13.09 Duties of Administrative Personnel
13.10 Designation of named Fiduciaries and Allocation of Responsibility
13.11 Action by Fiduciaries
13.12 Appointment of Professional Assistants and the Investment Manager
13.13 Bond
13.14 Indemnification
13.15 Payment of Expenses
ARTICLE 14 PARTICIPATION BY EMPLOYERS
14.01 Adoption of Plan by Affiliated Company
14.02 Rights and Obligations of the Company and the Employers
14.03 Withdrawal from Plan
ARTICLE 15 AMENDMENT OF THE PLAN
ARTICLE 16 PERMANENCY OF THE PLAN
16.01 Right to Terminate Plan
16.02 Merger of Consolidation of Plan and Trust
16.03 Continuance be Successor Company
ARTICLE 17 DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION
17.01 Suspension of Contributions
17.02 Discontinuance of Contributions
17.03 Termination of Plan and Trust
17.04 Participant's Rights to Benefits upon Termination or Partial
Termination of Plan or Complete Discontinuance of Contributions
ARTICLE 18 EXCLUSIVE BENEFIT OF THE PLAN
18.01 Limitation on Reversions
18.02 Unallocated Amounts upon Termination of Plan and Trust
18.03 Mistake of Fact or Disallowance of Deduction
ARTICLE 19 TOP HEAVY PLAN RULES
19.01 Definitions
19.02 Determination of Top Heaviness
19.05 Minimum Requirements
19.04 Minimum Benefits for Employers or Affiliated Companies
Maintaining Defined Benefits Plan
19.5 Super Top Heavy Plans
ARTICLE 20 MISCELLANEOUS
20.01 Effect of Bankruptcy and Other Contingencies Affecting an Employer
20.02 Benefits Payable by Trust
20.03 Withholding
20.04 Provisions Hereof for Sole Benefit of Parties
20.05 Article and Section Headings
Hereto and Participants
20.06 Formal Action by Employer
20.07 APPLICABLE LAW
CLUBCORP EMPLOYEE STOCK OWNERSHIP PLAN
ARTICLE 1- PURPOSE AND AMENDMENT OF THE PLAN
1.01 Amendment of the Plan. Brookhaven Country Club, Inc. adopted and
established a profit sharing plan known as the Profit Sharing Plan and Trust of
Brookhaven Club, Inc. effective as of January 1, 1968, which was thereafter,
amended, restated, and renamed into the CCA Associate Clubs Profit Sharing Plan
effective January 1, 1976 (the "Prior Plan"). Subsequent thereto, the Prior
Plan was amended from time to time. Sponsorship of the Prior Plan was
transferred to Club Corporation International (now known as ClubCorp
International, Inc.) (the "Company") effective February 1, 1992. Effective as
of January 1, 1993, the Company amended and restated the Prior Plan in its
entirety as the "ClubCorp Stock Investment Plan (the "SIP")." The SIP was last
amended and restated effective generally as of January 1, 1997. The SIP is
hereby again amended and restated into an employee stock ownership plan
effective generally as of January 1, 1999, to be known as the ClubCorp Employee
Stock Ownership Plan ("Plan").
Except as otherwise provided herein, and subject to the following sentence, the
provisions of this Plan as contained herein are applicable to Employees and
Participants who receive a distribution of their benefits under this Plan on or
after January 1, 1999. Except as otherwise provided herein, any Employee or
Participant who died, retired, suffered Disability or Termination of Employment
prior to January 1, 1999 and received a distribution of their benefits prior to
January 1, 1999, shall receive any benefits to which he or she is entitled based
upon the provisions of the SIP as in effect prior to January 1, 1999.
1.02 Purpose. The purposes of the Plan are: to provide retirement benefits to
Participants and their Beneficiaries; to encourage Eligible Employees to save
for retirement; to provide Participants the opportunity to share in the value of
the Company, and to enhance employee ownership of the Company.
It is the intention of the Employers that the Plan as amended and restated
herein shall meet all of the requirements necessary or appropriate to qualify it
as an employee stock ownership plan under Code Sections 401(a) and 4975(e) and
that the Trust made a part hereof shall continue to be exempt from tax under
Code Section 501(a) and that the Plan satisfy applicable requirements of ERISA,
and all provisions hereof shall be interpreted accordingly.
1.03 Trust Agreement. In furtherance of this Plan, the Company has entered
into the ClubCorp Employee Stock Ownership Trust Agreement effective as of
January 1, 1999, which is made a part hereof, for the purpose of maintaining the
Trust to fund the benefits of this Plan as hereinafter set forth.
ARTICLE 2 - DEFINITIONS
As used in the Plan:
2.01 "Account" or "Accounts" means all or any of the Company Stock Account, the
Other Investments Account, the Employer Divestiture Account, the QDRO Account
and any other account maintained by the Plan Administrator under the provisions
of the Plan to record a Participant's interest (or the undistributed interest of
a Beneficiary or Alternate Payee) in the Trust Fund, as adjusted in accordance
with ARTICLE 6.
2.02 "Affiliated Company" means any of the following: the Company and (i) a
member of a controlled group of corporations of which the Company is a member,
(ii) an unincorporated trade or business which is under common control with the
Company as determined in accordance with Code Section 414(c) and regulations
issued thereunder, (iii) a member of an "affiliated service group" as determined
in accordance with Code Section 414(m) and regulations issued thereunder, of
which the Company or an Employer is a member, or (iv) any other entity which is
required to be aggregated with the Company or an Employer in accordance with
Code Section 414(o) and the regulations issued thereunder. Subject to Code
Section 415(h), a "controlled group of corporations" shall mean a controlled
group of corporations as defined in Code Section 414(b).
2.03 "After-Tax Contribution Account" means the separate account maintained for
each Participant reflecting the After-Tax Contributions made by such Participant
to this Plan, as adjusted in accordance with the provisions of ARTICLE 6 of the
Plan.
2.04 "After-Tax Contributions" means the amount prior to July 1, 1995 each
Participant elected to contribute to the SIP pursuant to SECTION 4.08 thereof.
2.05 "Allocation Date" means the last day of each calendar quarter.
2.06 "Alternate Payee" means an individual or trust entitled to benefits under
the Plan pursuant to a Qualified Domestic Relations Order.
2.07 "Beneficiary" means any person or entity entitled to receive benefits
which are payable upon or after a Participant's death pursuant to ARTICLE 9.
2.08 "Board" means the Board of Directors of the Company, as from time to time
constituted, acting pursuant to delegated authority.
2.09 "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to any Section of the Internal Revenue Code shall include any
successor provision thereto.
2.10 "Company" means ClubCorp International, Inc., or its successor.
2.11 "Company Stock Account" means the separate accounts maintained for each
Participant under his Pre-Tax Contribution Account and Employer Contribution
Account, which are invested in Company Stock.
2.12 "Company Stock" means the common stock of the Company, par value $.01.
2.13 "Compensation" means with respect to all Participants except for those
Participants employed by ClubCorp International Resource Company who are
nonresident aliens who receive no earned income (within the meaning of Code
Section 911(d)(2)) which is U.S. source income (within the meaning of Code
Section 861(a)(3)), a Participant's total compensation for services rendered to
an Employer during a Plan Year, as reported on Form W-2 or other federal wage
statement as taxable for federal income tax purposes; provided, however, that
Compensation shall not include any Compensation paid for any period prior to
participation in the Plan or any of the following forms of Compensation:
relocation allowances, geographic differentials, car allowances, income imputed
for use of a car, noncash compensation, and stock appreciation rights.
Notwithstanding anything in this SECTION 2.13 to the contrary, Compensation with
respect to only those employees of ClubCorp International Resource Company who
are nonresident aliens who receive no earned income (within the meaning of Code
Section 911(d)(2)) which is U.S. source income (within the meaning of Code
Section 861(a)(3)) shall mean (i) such Participant's wages, salaries, earned
income (only if an employee within the meaning of Code Section 401(c)(1)) which
includes foreign earned income (as defined in Code Section 911(b)) whether or
not excludable from gross income under Code Section 911, foreign earned income
(as defined in Code Section 911(b)) whether or not excludable from gross income
under Code Section 911, fees for professional services, and other amounts
received from an Employer for personal services actually rendered in the course
of employment with an Employer as an Employee to the extent that the amounts are
includible in gross income (including, but not limited to, commissions paid
salesmen, overtime pay, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe benefits,
and reimbursements or other expense allowances under a nonaccountable plan, as
described in Treasury Regulations Section 1.62-2(c)), but determined without
regard to the exclusions found in Code Sections 931 and 933, (ii)amounts
received by such Participant described in Code Sections 104(a)(3), 105(a) and
105(h), but only to the extent that these amounts are includable in the gross
income of the Employee, (iii)amounts paid or reimbursed by the Employer to such
Participant for moving expenses incurred by such Participant, but only to the
extent that at the time of payment it is reasonable to believe that these
amounts are not deductible by such Participant under Code Section 217, (iv) the
value of nonqualified stock options granted to such Participant, but only to the
extent that the value of the option is includable in the gross income of such
Participant for the taxable year in which granted, and (v) the amount includable
in the gross income of such Participant upon making the election described in
Code Section 83(b), but excluding the following:
2.13(1) Employer contributions to a plan of deferred compensation to the extent
contributions are not included in gross income of the Participant for the
taxable year in which contributed, and any distributions from a plan of deferred
compensation whether or not includable in the gross income of the Participant
when distributed;
2.13(2) Employer contributions made on behalf of the Participant to a
simplified employee pension described in Code Section 408(k);
2.13(3) amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by the Participant becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
2.13(4) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
2.13(5) amounts that receive special tax benefits, or contributions made by the
Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code Section 403(b) (whether or not
the contributions are excludable from the gross income of the Participant);
provided, however, that Compensation shall not include any Compensation paid for
any period prior to participation in the Plan or any of the following forms of
Compensation: relocation allowances, geographic differentials, car allowances,
income imputed for use of a car, noncash compensation and stock appreciation
rights. Notwithstanding the foregoing, Compensation shall include the amount of
a Participant's elective salary reductions or salary deferrals under any
Employer's cafeteria plan established pursuant to Code Section 125 or an
Employer's plan established pursuant to Code Section 401(k).
2.14 Date of Employment" or "Date of Reemployment" means the day on which an
Employee first commences employment or reemployment following a Termination of
Employment, as the case may be, with any Affiliated Company by performing an
Hour of Service.
2.15 "Disability" means a physical or mental condition which, in the opinion of
the Plan Administrator, pursuant to consistently applied guidelines, medical
reports, and other evidence satisfactory to the Plan Administrator, causes a
Participant to be unable to engage in any substantial gainful employment with
the Employer for an indefinite period; provided, however, the Participant shall
not be deemed to have incurred a Disability if the Participant's Disability
arises under any of the following circumstances:
2.15(1) Injury or disease sustained as a result of excessive and habitual use
of drugs, intoxicating liquors, or narcotics.
2.15(2) Injury or disease sustained while willfully participating in any acts
of violence, riots, civil insurrection, or while committing a felony.
2.15(3) Injury or disease sustained while serving in the Armed Forces or as a
result of warfare.
2.15(4) Injury or disease sustained while rendering services as an employee to
an employer other than the Employer or an Affiliated Company.
2.15(5) Any intentional or self-inflicted injury.
2.16 "Discretionary Contribution" means the amount contributed by the Employer
to the Plan on behalf of a Participant pursuant to SECTION 4.12.
2.17 "Effective Date" means January 1, 1999, except as specifically provided
otherwise in the Plan.
2.18 "Election Period" means two (2) enrollment periods, each approximately one
month in duration, to be held during the Plan Year as determined annually and
announced by the Plan Administrator.
2.19 "Eligibility Year of Service" means an Employment Period during which such
Employee performs one thousand (1,000) or more Hours of Service. For purposes
of determining an Employee's Eligibility Year of Service, the initial
"Employment Period" to be used shall be the twelve (12) consecutive month period
beginning on an Employee's Date of Employment and thereafter the Plan Year,
beginning with the Plan Year within which occurs the Employee's first
anniversary of his Date of Employment. Any Employee who is credited with one
thousand (1,000) or more Hours of Service with any Affiliated Company in either
the initial twelve (12) month period beginning on such Employee's Date of
Employment or the Plan Year within which such initial twelve (12) month period
ends, shall be credited with an Eligibility Year of Service. For purposes of
determining an Employee's Eligibility Year of Service, an Employee, upon
completion of an Hour of Service for an Employer, shall receive credit for
service with any club which is not an Affiliated Company but which is a club
managed by the Company or a club which the Company manages or owns pursuant to a
joint venture with another entity, but only for service while such club is
managed or partially owned.
2.20 "Eligible Employee" means any Employee except the following individuals:
(i) any Employee who is included in a unit of employees covered by a collective
bargaining agreement between employee representatives and one (1) or more
Employers if retirement benefits were the subject of good faith bargaining
between such representatives and employees, unless the collective bargaining
agreement expressly provided for the inclusion of such Employees as Eligible
Employees under this Plan, (ii) except as provided in this SECTION 2.20, a
nonresident alien who receives no earned income within the meaning of Code
Section 911(d)(2)) which is U.S. source income (within the meaning of Code
Section 861(a)(3)), and (iii) except as provided in SECTION 3.02, any person who
is not treated as an employee on the payroll of an Employer, regardless of
whether such person is considered a leased employee within the meaning of Code
Sections 414(n) and 414(o). Notwithstanding anything in the Plan to the
contrary, all employees of ClubCorp International Resource Company shall be
classified and treated as Eligible Employees regardless of whether such
Employees are nonresident aliens who receive no earned income (within the
meaning of Code Section 911(d)(2)) which is U.S. source income (within the
meaning of Code Section 861(a)(3)).
2.21 "Employee" means any person who is employed by one or more Affiliated
Companies, and whose remuneration from an Affiliated Company is subject to FICA
withholding; provided, however, that a person employed by ClubCorp International
Resource Company who is a nonresident alien who receives no earned income
(within the meaning of Code Section 911(d)(2)) which is U.S. source income
(within the meaning of Code Section 861(a)(3)) shall be deemed to be an Employee
regardless of whether such person's remuneration is subject to FICA withholding.
Any leased employee shall be considered an "Employee" under the Plan to the
extent required by Code Sections 414(n) or 414(o), but shall not be eligible to
participate in the Plan unless and until he actually becomes employed on the
payroll of an Employer and otherwise meets the eligibility criteria of ARTICLE
3.
2.22 "Employer" means the Company or any corporation that is an Affiliated
Company which adopts the Plan pursuant to ARTICLE 14.
2.23 "Employer Contribution Account" means the separate account maintained for
each Participant comprised of his Company Stock Account and Other Investment
Account reflecting the Matching Contributions and/or Discretionary Contributions
made on behalf of such Participant. The Employer Contribution Account shall be
credited with all Matching Contributions allocated to such Participant,
Discretionary Contributions allocated to such Participant, profit sharing
contributions allocated to the Participant prior to January 1, 1993, if any, and
employer matching contributions made to the Club Corporation of America
Employees Savings and CCA Investment Plan prior to January 1, 1993, if any,
which were transferred to the Plan, as adjusted in accordance with the
provisions of ARTICLE 6.
2.24 "Employer Contribution" means the amount contributed by the Employer as a
Matching and/or Discretionary Contribution and allocated to either the Company
Stock Account or the Other Investment Account of each Participant, as
appropriate.
2.25 "Employer Divestiture Account" means a separate, fully vested account
which is maintained for a Participant who transfers from one Employer to another
Employer as a result of the divestiture of the original Employer, as provided in
SECTION 10.03.
2.26 "Entry Date" means each January 1 and July 1.
2.27 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. References to any Section of ERISA shall include any
successor provision thereto.
2.28 "Exempt Loan" means a loan which is used to purchase Company Stock and
which meets all of the requirements of SECTION 6.06.
2.29 "Hour of Service" means the following:
2.29(1) Performance of Duties. Each hour for which an Employee is directly or
indirectly paid, or entitled to payment by an Affiliated Company for the
performance of duties. Each such Hour of Service shall be credited to the
Employment Period (as defined in SECTION 2.19) or the Plan Year, as the case may
be, in which the duties were performed. For purposes of this Section, the
applicable Employment Period or Plan Year, as the context requires, shall be
referred to as the "Computation Period."
2.29(2) Back Pay. Each hour for which back pay (irrespective of mitigation of
damages) has been either awarded or agreed to by an Affiliated Company. Each
such Hour of Service shall be credited to the Computation Period to which the
agreement or award for back pay pertains, rather than to the Computation Period
in which the award, agreement, or payment is made. If back pay is either
awarded or agreed to for a period of time during which no duties are performed,
the provisions of SUBSECTIONS 2.29(3)(A) through (C) shall apply to the
calculation and crediting of Hours of Service for such period of time.
2.29(3) Non-Working Time. Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by an Affiliated Company for reasons
other than the performance of duties (irrespective of whether the employment
relationship with such Affiliated Company has terminated) (such as vacations,
holidays, illness, disability, layoff, jury duty, military duty, compensated
Leave of Absence, or similar periods). Each such Hour of Service shall be
calculated and credited on the following basis:
(a) Units of Time. If payments for reasons other than the performance of
duties are calculated on the basis of units of time, such as hours, days, weeks,
or months, the number of Hours of Service to be credited shall be the number of
regularly scheduled working hours included in the units of time on the basis of
which the payments are calculated. In the case of an Employee without a regular
work schedule, such Employee shall be credited with Hours of Service on the
basis of the equivalency schedule set forth in SUBSECTION 2.29(8). Each such
Hour of Service shall be credited to the Computation Period in which the period
during which no duties are performed occurs, beginning with the first unit of
time to which the payment relates.
(b) No Units of Time. If payments for reasons other than the performance of
duties are not calculated on the basis of units of time (such as lump sum
disability payments for an injury), the number of Hours of Service to be
credited shall be equal to the amount of the payment divided by the Employee's
most recent hourly rate of compensation before the period during which no duties
are performed.
(i) In the case of an Employee whose compensation is determined on the basis of
a fixed rate for specified periods of time (other than hours), such as days,
weeks, or months, such Employee's hourly rate of compensation shall be such
Employee's most recent rate of compensation for a specified period of time
(other than hours), divided by the number of hours regularly scheduled for the
performance of duties during such period. In the case of an Employee without a
regular work schedule, such Employee's rate of compensation shall be calculated
on the basis of the schedule of equivalent hours set forth in SUBSECTION
2.29(8).
(ii) In the case of an Employee whose compensation is not determined on the
basis of an hourly rate or on the basis of a fixed rate for specified periods of
time, such Employee's hourly rate of compensation shall be the lowest hourly
wage paid to employees in the same job classification as that of such Employee
or, if no employees in the same classification have an hourly rate of
compensation, the minimum wage as established from time to time under Section
6(a)(1) of the Fair Labor Standards Act of 1938, as amended.
Each such Hour of Service shall be credited to the Computation Period in which
the period during which no duties are performed occurs, except that if such
period extends beyond one of such Computation Periods, such Hours of Service
shall be allocated by the Plan Administrator, in its sole discretion, between
not more than the first two of such Computation Periods on a reasonable basis
which is consistently applied with respect to all Employees within the same job
classification, reasonably defined.
(c) Exclusions. Notwithstanding the foregoing:
(i) An Employee shall not be credited on account of a period during which no
duties are performed with a number of Hours of Service which is greater than the
number of hours regularly scheduled for the performance of duties during such
period.
(ii) In no event shall the number of Hours of Service attributable to a single
continuous period (whether or not such period involves more than one Computation
Period) for which no duties are performed exceed five hundred one (501) Hours of
Service.
(iii) Hours of Service shall not be credited to a period for which payments are
made to an Employee where those payments solely reimburse such Employee for
medical or medically related expenses incurred by such Employee.
(iv) Hours of Service shall not be credited for a period to which payments
pertain if such payments are made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, unemployment
compensation, or disability insurance laws.
2.29(4) No Duplication of Credit. An Employee shall not be credited with Hours
of Service under both (i) SUBSECTION 2.29(1) or 2.29(3), as the case may be, and
(ii) SUBSECTION 2.29(2).
2.29(5) Overlapping Payroll Periods. In the case of Hours of Service to be
credited to an Employee for a period of no more than thirty-one (31) days which
overlaps two (2) Computation Periods, all such Hours of Service shall be
credited to either the first or the second of such Computation Periods as the
Plan Administrator, in its sole discretion, may determine on a consistent basis
with respect to all Employees within the same job classification, reasonably
defined.
2.29(6) Maternity or Paternity Absences. Notwithstanding any other provision
of this SECTION to the contrary, solely for purposes of determining whether an
Employee has a One-Year Break in Service, Hours of Service shall include hours
during which an Employee is absent from work for any period: (i) by reason of
(a) the Employee's pregnancy, (b) the birth of the Employee's child, (c) the
placement of a child with the Employee in connection with the adoption of such
child by the Employee, or (ii) for the purpose of caring for such child for a
period beginning immediately following such birth or placement. Hours of
Service shall be credited for purposes of this SUBSECTION to the Plan Year in
which the absence from work begins, provided crediting of such Hours of Service
in such Plan Year would prevent the Participant from incurring a One-Year Break
in Service in such Plan Year solely because of the crediting of such Hours in
such Plan Year. In any other case, Hours of Service shall be credited for
purposes of this SUBSECTION to the immediately following Plan Year. The Hours
of Service credited for purposes of this SUBSECTION shall be those hours which
otherwise normally would have been credited but for such absence or, in any case
in which the Plan Administrator is unable to determine the hours normally
credited, Hours of Service shall be calculated on the basis of the schedule of
equivalent hours set forth in SUBSECTION 2.29(8). The total number of Hours of
Service required to be credited for any absence described in this SUBSECTION
shall not exceed five hundred one (501). Notwithstanding the provisions of this
SUBSECTION, no Hours of Service credit shall be given pursuant to this
SUBSECTION unless the Employee furnishes the Plan Administrator with such
information as the Plan Administrator shall require to establish: (i) that the
absence from work was for the reasons referred to herein, and (ii) the number of
days for which there was such an absence.
2.29(7) Uncompensated Leaves of Absence. Solely for purposes of determining
whether an Employee has a One-Year Break in Service, Hour of Service shall
include each hour (credited on the basis of the schedule of equivalent hours set
forth in SUBSECTION 2.29(8)) for which an Employee is not paid but is on a Leave
of Absence.
2.29(8) Determination of Hours of Service to be Credited to Salaried Employees.
With respect to salaried employees whose hours are not required to be counted
and recorded by the Fair Labor Standards Act of 1938, the determination of the
Hours of Service which must be credited to an Employee in accordance with the
provisions of this SECTION shall be based upon an equivalency schedule of ten
(10) Hours of Service for each day on which the Employee performs an Hour of
Service.
2.30 "Leave of Absence" means an absence from the active employment of an
Employer by reason of an approved absence granted by such Employer on the basis
of a uniform policy applied by such Employer without discrimination. Such a
Leave of Absence will not constitute a Termination of Employment provided the
Employee returns to the active employment of the Employer at or prior to the
expiration of his leave or, if not specified therein, within the period of time
which accords with such Employer's policy with respect to permitted absences.
If the Employee does not return to the active employment of such Employer at or
prior to the expiration of his Leave of Absence, his employment will be
considered terminated as of the date on which his leave expires.
Notwithstanding the foregoing provisions of this SECTION, absence from the
active service of the Employer because of military service will be considered a
Leave of Absence granted by an Employer and will not terminate the employment of
an Employee if he returns to the active employment of an Employer within the
period of time during which he has reemployment rights under any applicable
federal law or within sixty (60) days from and after discharge or separation
from such military service if no federal law is applicable. However, no
provision of this SECTION or of the remainder of the Plan shall require
reemployment of any Employee whose active service with an Employer was
terminated by reason of military service.
2.31 "Matching Contributions" means the amount the Employer contributes on
behalf of each Participant pursuant to SECTION 4.02.
2.32 "Normal Retirement Date" means the date on which occurs the sixty-fifth
(65th) birthday of a Participant.
2.33 "One-Year Break in Service" means a Plan Year during which a Participant
has no Hours of Service.
2.34 "Other Investments Account" means the separate accounts maintained for
each Participant under his Pre-Tax Contributions Account and Employer
Contributions Account which are not invested in Company Stock.
2.35 "Participant" means an Eligible Employee who participates in the Plan as
provided in ARTICLE 3.
2.36 "Plan" means the ClubCorp Employee Stock Ownership Plan, as set forth in
this document, and as hereafter amended.
2.37 "Plan Year" means the twelve (12) consecutive month period ending on
December 31.
2.38 "Pre-Tax Contribution Account" means the separate account maintained for
each Participant comprised of his Company Stock Account and Other Investment
Account consisting of the Pre-Tax Contributions made by the Employer in
accordance with SUBSECTION 4.04(1), and including as applicable, a separate
subaccount for Qualified Nonelective Contributions, as adjusted in accordance
with the provision of ARTICLE 6 of the Plan.
2.39 "Pre-Tax Contributions" means the amount each Participant has elected to
contribute to the Plan pursuant to SUBSECTION 4.04.
2.40 "QDRO Account" means that part of any other Account which has been
segregated from such Account for the benefit of an Alternate Payee pursuant to a
Qualified Domestic Relations Order.
2.41 "Qualified Domestic Relations Order" means an order or decree which:
2.41(1) Relates to the provision of child support, alimony payments, or marital
property rights to a spouse, child, or other dependent of a Participant; and
2.41(2) Is made pursuant to a state domestic relations law (including a
community property law); and
2.41(3) Creates or recognizes the existence of an Alternate Xxxxx's right to,
or assigns to an Alternate Payee the right to, receive all or a portion of the
benefits payable with respect to a Participant under the Plan; and
2.41(4) Is determined by the Plan Administrator to meet all applicable
requirements pursuant to the procedure established by the Plan Administrator for
determining whether an order is a Qualified Domestic Relations Order.
2.42 "Qualified Nonelective Contribution" or "QNEC(s)" shall mean a
contribution (other than Pre-Tax Contributions, Matching Contributions,
Discretionary Contributions, or any contribution required pursuant to SUBSECTION
10.05(2)), if any, (i) made by the Employer in its sole and absolute discretion
for the benefit of Non-Highly Compensated Employees (and thus, satisfies the
requirements of Code Section 401(a)(4)), (ii) which are allocable in accordance
with SUBSECTION 4.05(3)(C), and (iii) which shall be nonforfeitable and treated
for all purposes as Pre-Tax Contributions (including for purposes of SECTION
4.09 but not for purposes of hardship withdrawals as provided in SUBSECTION
4.10).
QNECs shall, in accordance with SUBSECTION 4.05(3)(C) and Treasury Regulations
Sections 1.401(k)-1(b)(5) and 1.401(m)-1(b)(5): (i) be allocated to the
Employee's Pre-Tax Contribution Account as of the last day of the Plan Year,
(ii) not be contingent upon the Employee's participation in the Plan or
performance of services on any date subsequent to the date as of which QNECs are
allocated and (iii) shall be actually paid to the Plan no later than the end of
the twelve (12) month period immediately following the Plan Year to which such
contribution relates; provided however, that if several plans are aggregated in
accordance with Code Section 410(b) and if the Plan Year of the Plan is changed
to satisfy the requirement that plans have the same plan year, the QNECs for the
short Plan Year created must also (iv) be treated as if they were Pre-Tax
Contributions and, (v) be related to the Total Compensation that would have been
received by such Employee during that short Plan Year but for such Employee's
election under SECTION 4.04, or (vi) be attributable to services performed by
the Employee in that short Plan Year, and but for the Employee's election to
defer under SECTION 4.04, would have been received by the Employee within two
and one-half months after the close of that short Plan Year.
2.43 "Quarterly Stock Valuation Date" means December 31 and such other dates as
of which Company Stock is valued, as specified by the Plan Administrator.
2.44 "Required Beginning Date" means, in the case of the Participant who
attains age seventy and one-half (70 1/2) prior to January 1, 1999: (i) April 1
of the calendar year following the calendar year in which the Participant
attains age seventy and one half or (ii) April 1 of the calendar year following
the calendar year in which the Participant retires, as the Participant so
elects. With respect to all other Participants Required Beginning Date means
the calendar April 1 of year following the calendar year in which the
Participant retires.
2.45 "Termination of Employment" shall mean the termination of employment with
all Employers, whether voluntarily or involuntarily, other than by reason of a
Participant's retirement after attaining his Normal Retirement Date or after
sustaining Disability, or death, or transfer to a non-adopting Affiliated
Company.
2.46 "Trust" means the legal entity resulting from the Trust Agreement between
the Company and the Trustee who receives contributions, and holds, invests, and
disburses funds to or for the benefit of Participants and their Beneficiaries.
Unless the context specifically indicates otherwise, the terms "Trust," "Trust
Agreement," "Trust Fund," and "Trustee" refer to all such trusts, trustees,
trust agreements, and trust funds in the aggregate.
2.47 "Trust Agreement" means the instrument establishing the Trust, as amended
from time to time.
2.48 "Trust Fund" means all assets of whatsoever kind or nature from time to
time held by the Trustee pursuant to the Trust Agreement without distinction as
to income and principal.
2.49 "Trustee" means the party or parties, individual or corporate, named in
the Trust Agreement and any duly appointed additional or successor Trustee or
Trustees acting thereunder.
2.50 "Vesting Year of Service" means a Plan Year, beginning with the Plan Year
in which the Employee commenced employment or reemployment with any Affiliated
Company, during which a Participant has completed at least one (1) Hour of
Service with an Affiliated Company. For purposes of determining an Employee's
Vesting Years of Service, an Employee, upon completion of an Hour of Service for
an Employer, shall receive credit for service with any club which is not an
Affiliated Company but which is a club managed by the Company or a club which
the Company manages or owns pursuant to a joint venture with another entity, but
only for service while such club is managed or partially owned.
2.51 Wherever appropriate, words used in the Plan in the singular may mean the
plural, the plural may mean the singular, and the masculine may mean the
feminine.
2.52 The words "herein," "hereof," and "hereunder" refer to the Plan.
2.53 The expressions listed below have the meanings stated in the SECTIONS or
SUBSECTIONS hereof respectively indicated:
"Actual Contribution Percentage" or "ACP" Subsection 4.07(4)(a)
"Actual Deferral Percentage" or "ADP" Subsection 4.05(4)(a)
"Aggregate Limit" Subsection 4.05(2)
"Annual Additions" Section 5.06(1)
"Computation Period" Section 2.29(1)
"Current Value" Subsection 6.01(1)
Defined Benefit Plan" Subsection 5.09(2)
Defined Benefit Plan Fraction" Subsection 5.09(3)
Defined Contribution Plan" Subsection 5.09(4)
Defined Contribution Plan Fraction" Subsection 5.09(5)
Determination Date" Subsection 19.01(3)
Direct Rollover" Subsection 11.07(2)(d)
Distributee" Subsection 11.07(2)(c)
Eligible Employee" Section 2.20;
Subsection 4.05(4)(e);
Subsection 4.07(4)(d)
Eligible Participants" Section 5.03
Eligible Retirement Plan" Subsection 11.07(2)(b)
Eligible Rollover Distribution" Subsection 11.07(2)(a)
Employment Period" Section 2.19; 4.12
Excess Aggregate Contributions" Subsection 4.07(2)
Excess Contributions" Subsection 4.05(4)(b)
Excess Deferrals" Section 4.06
Forfeiture" Subsection 10.04(6)
Highly Compensated Employee" Subsection 4.05(4)(c);
Subsection 4.07(4)(b)
"Key Employee" Subsection 19.01(4)
"Key Employee Participant" Subsection 19.01(5)
"Limitation Year" Subsection 5.09(6)
"Limitation Year Compensation" Subsection 5.09(7);
Subsection 19.01(6)
"Named Fiduciaries" Section 13.10
"Non-Key Employee" Subsection 19.01(7)
"Permissive Aggregation Group" Subsection 19.01(8)
"Permitted Purpose" Subsection 4.10(6)
"Plan Administrator" Section 13.01
"Prior Plan" Section 1.01
"Qualified Consent" Subsection 9.02(2)
"Required Aggregation Group" Subsection 19.01(9)
"Retirement Plan" Subsection 5.09(1)
"Securities Act" Section 4.13
"Super Top Heavy Plan" Subsection 19.02(2)
"Top Heavy Plan" Subsection 19.02(1)
"Top Heavy Ratio" Subsection 19.02(3)
"Total Compensation" Subsection 4.05(4)(f);
Subsection 4.07(4)(e)
"Valuation Date" Subsection 19.01(10)
ARTICLE 3 - REQUIREMENTS FOR ELIGIBILITY AND PARTICIPATION
3.01 Eligibility. Any Employee who met the eligibility requirements under the
Plan, as it existed prior to this amendment and restatement, shall be eligible
to participate in the Plan as of January 1, 1999. Each other Eligible Employee
shall be eligible to participate as of the Entry Date coinciding with or next
following the date upon which such Eligible Employee completes an Eligibility
Year of Service, provided he is an Eligible Employee on such Entry Date. In the
event an Eligible Employee has a Termination of Employment prior to completing
an Eligibility Year of Service, the Eligible Employee may participate as of the
first Entry Date following completion of an Eligibility Year of Service. In the
event an Eligible Employee has a Termination of Employment after completing an
Eligibility Year of Service but prior to the Entry Date upon which such Eligible
Employee would have been eligible to participate in the Plan, and such Eligible
Employee is reemployed by an Employer after the Entry Date upon which the
Eligible Employee would have participated in the Plan, such Eligible Employee
will be eligible to participate as of the Entry Date which next follows his Date
of Reemployment, provided he is an Eligible Employee on such date. In the event
a Participant has a Termination of Employment and is reemployed by an Employer,
he will automatically be reinstated as a Participant as of the Entry Date which
next follows his Date of Reemployment, provided he is an Eligible Employee on
such date.
3.02 Employment with a Predecessor Employer. If the Plan had previously been
maintained by a predecessor of an Employer, whether a corporation, partnership,
sole proprietorship, or other business entity, any period of employment with
such predecessor shall be treated as a period of employment with an Employer.
If the Plan had not been previously maintained by a predecessor of an Employer,
employment with such predecessor shall not be taken into account, except to the
extent required pursuant to regulations prescribed by the Secretary of the
Treasury or his delegate.
3.03 Change in Status of Eligible Employee.
3.03(1) In the event an Employee who is not an Eligible Employee becomes an
Eligible Employee, such individual shall be eligible to participate in the Plan
as of the next following Entry Date, provided he is an Eligible Employee on such
date and he has met the other requirements for eligibility set forth in SECTION
3.01.
3.03(2) In the event a Participant, who ceased to be an Eligible Employee but
who did not terminate his employment with any Affiliated Company, subsequently
becomes an Eligible Employee again, such Eligible Employee will be reinstated as
a Participant as of the date he again becomes an Eligible Employee as of the
next following Entry Date, provided he is an Eligible Employee on such date.
3.04 Participation in the Plan. Each Eligible Employee must, in order to elect
Pre-Tax Contributions and become a Participant, file an election pursuant to
SECTION 4.04, with the Plan Administrator within the Election Period prior to
the Entry Date as of which such Eligible Employee is to become a Participant.
If an Eligible Employee fails to file such an election for the first Entry Date
on which he is eligible to participate, he may elect to begin participation in
the Plan as of any subsequent January 1 or July 1 by filing such an election
during the applicable Election Period, subject to the eligibility requirements
of SECTIONS 3.01, 3.02, and 3.03. Each Eligible Employee shall be provided with
such information as is required by ERISA within the time prescribed for
providing such information. In addition, each Participant shall be provided
with a designation of Beneficiary form which shall provide for a designation of
one or more Beneficiaries to receive benefits in the event of the Participant's
death.
3.05 Military Service. Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Code Section 414(u).
ARTICLE 4 - CONTRIBUTIONS
4.01 Employer Contributions. Subject to SECTIONS 4.07 and 5.06 through 5.09,
each Employer's Contribution shall consist of (i) a Matching Contribution
attributable to its Employees, (ii) a Discretionary Contribution in such amount
as the Board in its sole discretion may authorize for those Participants who are
employed by an Employer on the last day of the Plan Year, (iii)any contribution
required pursuant to SUBSECTION 10.05(2), and (iv) any Qualified Nonelective
Contribution made to satisfy the ACP test. In no event, however, shall total
Employer Contributions exceed the maximum deductible contribution under Code
Section 404(a), including any amount which may be deductible by the Employer
under the carryover provisions of the Code. All Employer Contributions shall be
made in the form of cash or shares of Company Stock, as determined in the sole
discretion of the Board. Notwithstanding the preceding, the Employees of
Operations Company for Homestead, Inc. shall not be eligible to receive a
Matching Contribution or a Discretionary Contribution under this Plan.
4.02 Matching Contributions. Subject to SECTION 4.07 and 5.06 through 5.09,
the Employer shall contribute to the Trust Fund an amount equal to twenty
percent (20%) of each Participant's Pre-Tax Contributions (to the extent not
previously withdrawn) made during the calendar quarter which shall be allocated
(i) if in cash, to the Other Investments Account of the Employer Contribution
Account; and (ii) if in Company Stock, to the Company Stock Account of the
Employer Contribution Account of the Participant whose Pre-Tax Contributions
were so matched.
4.03 Date of Payment of Matching Contributions, Discretionary Contributions and
Pre-Tax Contributions. Matching Contributions shall be paid to the Trust on a
quarterly basis. Discretionary Contributions, if any, shall be paid to the
Trust for a Plan Year on or before the last date, including any extensions
thereof, for filing its federal income tax return for its fiscal year ending
with, or after the last day of such Plan Year and shall be deemed made as of the
last day of the Plan Year for which they are made. An Employer shall make all
Pre-Tax Contributions as provided in SECTION 4.04 hereof to the Trust Fund as
soon as administratively practical following the close of the payroll period for
which the Participant's elections are applicable.
4.04 Pre-Tax Contributions; Change of Election.
4.04(1) Subject to the provisions of SECTION 4.05, a Participant may elect:
(a) To receive his entire Compensation in cash; or
(b) To defer a portion of his Compensation, as a Pre-Tax Contribution, in
specified whole percentages, that is not less than one percent (1%) or more than
six percent (6%) of his Compensation for each payroll period. The Pre-Tax
Contributions shall not exceed $10,000 (ten thousand dollars) (or such greater
amount allowed pursuant to cost of living adjustments prescribed by the
Secretary of the Treasury) during a calendar year. The amount deferred as
Pre-Tax Contributions shall be allocated: (i) if in cash, to the Other
Investments Account of the Pre-Tax Contribution Account; and (ii) if in Company
Stock, to the Company Stock Account of the Pre-Tax Contribution Account. A
Participant's Pre-Tax Contributions shall, at all times and for all purposes be
fully vested and nonforfeitable.
Any amount a Participant elects to defer under this SUBSECTION 4.04(1) shall be
contributed by his Employer to the Trust as a Pre-Tax Contribution and allocated
to the Pre-Tax Contribution Account. The dollar limitation in this SECTION
shall be decreased by any salary deferrals under Code Section 401(k) made by a
Participant under any related plan, to the extent that any Excess Deferrals are
allocated to this Plan pursuant to SECTION 4.06.
4.04(2) Each Employee who becomes eligible or who at a given time is about to
become eligible to participate in the Plan shall elect at such time and in such
form as the Plan Administrator shall in its sole and absolute discretion
determine, to defer the receipt of a portion of his Compensation or to receive
his entire Compensation in cash, in accordance with SUBSECTION 4.04(1). The
Plan Administrator shall establish and communicate to Employees uniform and
nondiscriminatory procedures for the election of percentage rates of Pre-Tax
Contributions, including procedures regarding the effective date of such
election, and may change said procedures at such times and in such manner as the
Plan Administrator may determine to be necessary or desirable. Any such change
in procedures shall be communicated to Employees.
A Participant who has previously elected to defer the receipt of a portion of
his Compensation pursuant to this SECTION 4.04 may elect to change the amount of
the deferral of his Compensation effective on the first day of the July 1 or
January 1 next following the date notice is received by the Plan Administrator;
provided, however, that a notice of the change in election must be delivered to
the Plan Administrator in the form prescribed by the Plan Administrator within
the applicable Election Period.
4.05 Limitation on Pre-Tax Contributions for Highly Compensated Employees.
Each Plan Year, the Plan shall satisfy the nondiscrimination tests in Code
Section 401(k)(3).
4.05(1) Notwithstanding the provisions of SECTION 4.04, the Actual Deferral
Percentage (or "ADP") for the Highly Compensated Employees with respect to any
Plan Year shall not exceed the greater of (a) or (b):
(a) The Actual Deferral Percentage for the Non-Highly Compensated Employees
multiplied by 1.25, or
(b) The Actual Deferral Percentage for the Non-Highly Compensated Employees
multiplied by 2.0; provided, however, that the Actual Deferral Percentage for
the Highly Compensated Employees may not exceed the Actual Deferral Percentage
for the Non-Highly Compensated Employees by more than two (2) percentage points,
but subject to the aggregate limitation rules of SUBSECTION 4.05(2).
4.05(2) If one or more Highly Compensated Employees are eligible to make
Pre-Tax Contributions and are also eligible for contributions that are tested
under Code Section 401(m), multiple use of the Actual Deferral Percentage
alternative limit set forth in SUBSECTION 4.05(1)(B) shall be limited so that
the sum of Actual Deferral Percentage of all such Highly Compensated Employees
and the Actual Contribution Percentage of such Highly Compensated Employees does
not exceed the aggregate limit. For purposes of this SECTION, the "aggregate
limit" shall be the greater of:
(a) The sum of
(i) 1.25 multiplied by the greater of the Actual Deferral Percentage or Actual
Contribution Percentage of the Non-Highly Compensated Employees for the Plan
Year, and
(ii) Two plus the lesser of the Actual Deferral Percentage or the Actual
Contribution Percentage of the Non-Highly Compensated Employees for the Plan
Year; provided, however, that this amount shall not exceed 2.0 multiplied by the
lesser of the Actual Deferral Percentage or the Actual Contribution Percentage
of the Non-Highly Compensated Employees for the Plan Year; or
(b) The sum of
(i) 1.25 multiplied by the lesser of the Actual Deferral Percentage or Actual
Contribution Percentage of the Non-Highly Compensated Employees for the Plan
Year; and
(ii) Two plus the greater of the Actual Deferral Percentage or Actual
Contribution Percentage of the Non-Highly Compensated Employees for the Plan
Year; provided, however, that this amount shall not exceed 2.0 multiplied by the
greater of the Actual Deferral Percentage or Actual Contribution Percentage of
the Non-Highly Compensated Employees for the Plan Year.
(iii) Amounts in excess of the aggregate limit shall be treated as Excess
Contributions or Excess Aggregate Contributions (or a combination of both) as
determined in the sole discretion of the Plan Administrator and adjusted as
provided in SUBSECTION 4.05(3) or 4.07(3), whichever may be applicable. For
purposes of applying this multiple use limit, the Actual Contribution Percentage
and the Actual Deferral Percentage shall be determined after any required
distributions of Excess Contributions, Excess Aggregate Contributions and Excess
Deferrals under SUBSECTIONS 4.05(3) and 4.07(3) and SECTION 4.06.
4.05(3) If at any time during a Plan Year, the Actual Deferral Percentage for
the Highly Compensated Employees exceeds or is reasonably expected by the Plan
Administrator to exceed the amounts allowed under SUBSECTIONS 4.05(1) or
4.05(2), the Plan Administrator, in its sole and absolute discretion, shall, as
often as it elects, do one or more of the following, provided, however, that if
this Plan is aggregated with one or more plans in accordance with Code Sections
401(a)(4), 410(b) or 401(k), such Highly Compensated Employee shall have the
right (in accordance with procedures established by the Plan Administrator) to
direct the Plan Administrator with respect to whether correction of such excess
(or expected excess) will occur under this SUBSECTION 4.05(3) or under the
applicable provisions of the other aggregated plans:
(a) Prospectively and in the same proportion reduce the amount of Compensation
to be deferred pursuant to SUBSECTIONS 4.04(1) or 4.04(2) by each Highly
Compensated Employee who has elected pursuant to SUBSECTIONS 4.04(1) or 4.04(2)
to defer a portion of his Compensation until the Actual Deferral Percentage for
Highly Compensated Employees equals (by rounding up) for the Plan Year the
greater of (a) or (b) of SUBSECTION 4.05(1), as limited by SUBSECTION 4.05(2).
(b) (i) Refund the portion of each Highly Compensated Employee's Pre-Tax
Contribution that constitutes a portion of the Excess Contribution for the Plan
Year, plus earnings (or less losses) on such amount for the Plan Year until the
Actual Deferral Percentage for the Highly Compensated Employees equals (by
rounding up) the greater of (a) or (b) of SUBSECTION 4.05(1), as limited by
SUBSECTION 4.05(2), with all refunds to be charged: (i) first against the Other
Investments Account of the Participant's Pre-Tax Contribution Account for the
calendar year that includes the first day of the Plan Year; (ii) secondly
against the Company Stock Account of the Participant's Pre-Tax Contribution
Account for the calendar year that includes the first day of the Plan Year, and
then, to the extent necessary; (iii) thirdly against the Other Investment
Account of the Participant's Pre-Tax Contribution Account for the calendar year
that includes the last day of the Plan Year; and (iv) then finally against the
Company Stock Account of the Participant's Pre-Tax Contribution Account for the
calendar year that includes the last day of the Plan Year. All such refunds
shall be distributed by the Trustee to the Employee within two and one-half
months after the close of the Plan Year in which the Excess Contribution arose,
if administratively possible, and within twelve (12) months after the close of
such Plan Year at the latest.
The amount of Excess Contributions for each Highly Compensated Employee is to be
determined by the following leveling method, under which the Actual Deferral
Percentage of the Highly Compensated Employee with the highest Actual Deferral
Percentage is reduced to the extent required to: (i) enable the Plan to satisfy
the limitations of SUBSECTIONS 4.05(1) and 4.05(2); or (ii) cause such Highly
Compensated Employee's Actual Deferral Percentage to equal the Actual Deferral
Percentage of the Highly Compensated Employee with the next highest Actual
Deferral Percentage, whichever occurs first. This process must be repeated
until the Plan satisfies the limitations of SUBSECTIONS 4.05(1) and 4.05(2).
The provisions of this SECTION shall be applied after the provisions of SECTION
4.06 are applied and the amount of any Excess Contributions refunded under this
SECTION shall be reduced by Excess Deferrals, if any, attributable to such Plan
Year previously distributed to the Employee. Any distribution made pursuant to
this SUBSECTION 4.05(3)(B)(I) may be made notwithstanding any other provision of
this Plan.
Notwithstanding any Plan provision to the contrary, in no event shall Matching
Contributions remain allocated to a Highly Compensated Employee's account and
such amounts shall be treated as forfeitures (in the same manner as provided in
SUBSECTION 4.07(2)(C)(II)) if the Pre-Tax Contributions which were matched by
such Matching Contributions are refunded as Excess Contributions under this
SUBSECTION 4.05(3)(B)(I).
(ii) The earnings or losses allocable to Excess Contributions for the
applicable Plan Year shall be determined by multiplying the total income (or
loss) allocable the Pre-Tax Contribution Account for the applicable Plan Year by
a fraction, the numerator of which is the Excess Contribution on behalf of the
Participant for the applicable Plan Year and the denominator of which is the
balance of the Participant's Pre-Tax Contribution Account on the last day of the
applicable Plan Year (prior to any refund or redistribution of Excess
Contributions), reduced by the income or gain (or increased by the loss)
allocable to such total amount for the Plan Year.
(iii) The income allocable to Excess Contributions, for purposes of
SUBSECTIONS 4.05(3)(B)(I) and 4.05(3)(B)(II), shall include all earnings and
appreciation, including such items as interest, dividends, rent, royalties,
gains from the sale of property, appreciation in the value of stock, bonds,
annuity and life insurance contracts, and other property, without regard to
whether such appreciation has been realized.
(c) In addition to or in lieu of the above procedures to conform Pre-Tax
Contributions to the limitations of SUBSECTION 4.05(1), the Employer may make a
QNEC on behalf of any Non-Highly Compensated Employee. In the event a QNEC is
to be allocated to a Participant under either this SUBSECTION 4.05(3)(C) or
SUBSECTION 4.07(2)(D) such allocation shall equal the maximum amount which can
be allocated to that Participant without causing the total amount allocated to
the Participant under the Plan to exceed the limitation of SECTION 5.06,
provided that QNECs shall be allocated first to the account of Non-Highly
Compensated Employees who have the lowest Compensation for the Plan Year, then
as the Actual Deferral Percentages (or, if applicable, the Actual Contribution
Percentages) of those Participants increase, allocations shall be made to the
accounts of Non-Highly Compensated Employees with the next lowest Compensation
and so on until the entire QNEC has been allocated.
4.05(4) For purposes of this SECTION 4.05:
(a) "Actual Deferral Percentage" (or "ADP") shall mean for Eligible Employees
the average (arithmetic mean) of the ratio (calculated separately for each
Eligible Employee to the nearest one-hundredth of one percent) of:
(i) the sum of the Pre-Tax Contributions actually contributed to the Trust on
behalf of such Employee and allocated to his Pre-Tax Contribution Account for
such Plan Year, plus
(A) the Qualified Nonelective Contributions, if any, actually contributed to
the Trust on behalf of such Employee and allocated to his Pre-Tax Contribution
Account for such Plan Year, and
(B) the Matching Contributions (other than Qualified Nonelective
Contributions), if any, actually contributed to the Trust on behalf of such
Employee and allocated to his Pre-Tax Contribution Account for such Plan Year
that qualify for aggregation under Code Section 401(k)(3)(D)(ii) and are
designated by the Plan Administrator as includable in this computation for this
Plan Year, to
(ii) the Total Compensation received by the Employee during the Plan Year,
such average of ratios being multiplied by one hundred (100).
Any Pre-Tax Contributions taken into account for purposes of the Actual Deferral
Percentage shall: (i) (but for the election which such Employee made in
accordance with SECTION 3.04) relate to Total Compensation that would have been
received by such Employee during the Plan Year; or (ii) be attributable to
services performed by the Employee in the Plan Year and (but for the election
which such Employee made in accordance with SECTION 3.04) would have been
received by the Employee within two and one-half months after the end of the
Plan Year; and (iii) be allocated to the Employee's Pre-Tax Contribution Account
as of a date within the Plan Year; and (iv) not be contingent upon the
Employee's participation in the Plan or performance of services on any date
subsequent to the date as of which such contributions are allocated; and (v)
shall be actually paid to the Plan no later than the end of the twelve (12)
month period immediately following the Plan Year to which such contribution
relates.
To the extent that the Plan Administrator elects, pursuant to the above
paragraph, to take Matching Contributions (other than Qualified Nonelective
Contributions) for such Plan Year, that meet the requirements of the applicable
Regulations, into account in computing the Actual Deferral Percentage, the
Actual Contribution Percentage tests under SECTION 4.07 must still be completed
and satisfied separately, and in doing so the Employer shall disregard the
Matching Contributions used in computing the Actual Deferral Percentage for such
Plan Year. Any Matching Contributions taken into account for purposes of
determining the Actual Deferral Percentage shall be: (i) allocated only to the
accounts of Participants who are not Non-Highly Compensated Employees; (ii)
allocated to such Employees' Pre-Tax Contribution Account (and at the discretion
of the Plan Administrator to the subaccount for Qualified Nonelective
Contributions); and (iii) shall be nonforfeitable and treated for all purposes
as Pre-Tax Contributions, including for purposes of the directly preceding
paragraph of this SUBSECTION 4.05(4)(A) and SECTION 4.09 but such amounts will
be prohibited from being withdrawn as hardship withdrawals as provided in
SUBSECTION 4.10.
For purposes of this SECTION, the ratio calculated for any Eligible Employee who
is a Highly Compensated Employee for the Plan Year and who is eligible to have
Pre-Tax Contributions allocated to his account under two or more plans or
arrangements described in Code Section 401(k) that are maintained by the
Employer shall be determined as if all such contributions were made under a
single arrangement. Further, in the event that this Plan satisfies the
requirements of Code Sections 401(a)(4) and 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the requirements of
Code Sections 401(a)(4) and 410(b) only if aggregated with this Plan, the Actual
Deferral Percentage shall be determined by calculating the ratio for each
Eligible Employee as if all such plans were a single plan. If the Plan is
permissively aggregated with another plan in order to comply with the
limitations of SUBSECTION 4.05(1), such aggregated plans must also meet the
requirements of Code Sections 401(a)(4) and 410(b) as a single plan.
(b) "Excess Contributions" shall mean, with respect to any Plan Year, the
excess of (i) the aggregate amount of Contributions, if any, included under
SUBSECTION 4.05(4)(A) in the Actual Deferral Percentage computation for the Plan
Year that were actually paid over to the Trust on behalf of Highly Compensated
Employees for such Plan Year, over (ii) the maximum amount of such Pre-Tax
Contributions permitted under the limitations of SUBSECTIONS 4.05(1) and
4.05(2).
(c) "Highly Compensated Employee" shall mean any Eligible Employee who is a
highly compensated employee as defined in Code Section 414(q) and the
regulations thereunder using the calendar year election of Treasury Regulation
Section 1.414(q)-1T, Q&A 14(b). Generally, a Highly Compensated Employee is any
Employee who:
(i) was at any time a 'five percent owner,' as defined in Section 416(i)(1) of
the Code, during the Plan Year for which the definition is being applied or
during the preceding Plan Year with respect to an Employer;
(ii) for the preceding Plan Year -
(A) received Compensation from the Employer in excess of Eighty Thousand
Dollars ($80,000.00) as indexed at the same time and in the same manner as under
Code Section 415(d), and;
(B) if the Employer elects, was in the group of Employees of an Employer and
all Participating Companies consisting of the top twenty percent (20%) of the
Employees when ranked on the basis of Compensation paid during the Plan Year.
For purposes of determining the number of Employees in the top-paid group,
Employees who have not completed six (6) months of Service, normally work less
than seventeen and one-half (17 1/2) hours per week, normally work during six
(6) or less months per year, have not attained the age of twenty-one (21), are
nonresident aliens with no earned income from sources within the United States
(within the meaning of Section 861(a)(3) of the Code), or are included in a unit
of employees covered by a collective bargaining agreement (except to the extent
provided in regulations), shall not be included.
(d) "Non-Highly Compensated Employee" means any Eligible Employee who is not a
Highly Compensated Employee.
(e) "Eligible Employee" shall mean for or during a Plan Year each Employee who
is eligible to become a Participant, including those Employees who are eligible
to but fail to file the election required by SECTION 3.04; provided, however,
that those Employees of ClubCorp International Resource Company who are
nonresident aliens who receive no earned income (within the meaning of Code
Section 911(d)(2)) which is U.S. source income (within the meaning of Code
Section 861(a)(3)) shall not be treated as Eligible Employees for purposes of
this SECTION 4.05.
(f) "Total Compensation" means any payments received by an Eligible Employee
for the Plan Year in question from an Affiliated Company which meet the
definition of Total Compensation chosen by the Plan Administrator for that Plan
Year. Any such definition chosen by the Plan Administrator shall satisfy the
requirements of Code Section 414(s) and all related Treasury Regulations. In
the event an Employee begins, resumes, or ceases to be an Eligible Employee
during a Plan Year, the amount of the Employee's Total Compensation for the
entire Plan Year shall be taken into account for purposes of this SECTION
4.05(4)(F). Notwithstanding the foregoing, Total Compensation shall be limited
to One Hundred Sixty Thousand Dollars ($160,000.00) or such amount to which such
amount shall be adjusted by the Secretary of the Treasury or his delegate
pursuant to Code Section 401(a)(17).
4.06 Distribution of Excess Deferrals. If a Participant is required to include
in his gross income for a calendar year elective deferrals (as defined in Code
Section 402(g)(3)) which exceeded $10,000 (or such greater amount as determined
by the Secretary of the Treasury pursuant to cost-of-living increases) for such
year, such amounts shall be referred to as "Excess Deferrals" and shall be
distributed to the Participant. The Plan Administrator shall distribute such
Excess Deferral, adjusted for any income or losses allocable to such amount
(determined in accordance with the principles of SUBSECTION 4.05(3)(B)), for the
Plan Year in question not later than the time determined under SUBSECTION
4.05(3)(B), provided, however, that the amount of Excess Deferrals to be
distributed shall be reduced by Excess Contributions previously distributed in
accordance with SUBSECTION 4.05(3)(B) to the Employee from the Plan which are
attributable to such Plan Year. Any distribution made pursuant to this SECTION
may be made notwithstanding any other provision of this Plan.
4.07 Limitation on Matching Contributions. Each Plan Year, the Plan shall
satisfy the nondiscrimination tests in Code Section 401(m).
4.07(1) Notwithstanding any other provision of this Plan, the "Actual
Contribution Percentage" (or "ACP") of Matching Contributions made to the Plan
for Highly Compensated Employees during the Plan Year shall not exceed the
greater of the limitations indicated below:
(a) One hundred twenty-five percent (125%) of the ACP for all Non-Highly
Compensated Employees; or
(b) The lesser of: (i) the sum of the ACP for all Non-Highly Compensated
Employees plus two percent (2%); or (ii) two hundred percent (200%) of the ACP
for all Non-Highly Compensated Employees.
If one or more Highly Compensated Employees are eligible for contributions that
are tested under both this SECTION and SECTION 4.05, multiple use of the Actual
Contribution Percentage alternative limit set forth in SUBSECTION 4.05(2) shall
apply.
4.07(2) In the event that following the end of the Plan Year, it is determined
by the Plan Administrator that the Matching Contributions allocated to Highly
Compensated Employees exceed the limitations of SUBSECTION 4.07(1), then the
amount in excess of such limitation ("Excess Aggregate Contributions") (and
income thereon) shall be corrected in accordance with the following rules.
(a) The Excess Aggregate Contributions shall first be applied to reduce by one
percent (1%) the percentage rate or by One Dollar ($l) the amount of those
Highly Compensated Employees who have the highest ACP, shall then be applied to
reduce by one percent (1%) the percentage rate or by One Dollar ($l.00) the ACP
of all those Highly Compensated Employees (including those employees whose
percentage rate or dollar amount was previously reduced) with the next highest
ACP, and shall thereafter continue to be applied to the extent necessary in like
manner in descending order on the basis of ACP until the reductions enable the
Matching Contributions to conform to the limitations of SUBSECTION 4.07(1).
(b) The amount of Excess Aggregate Contributions to be distributed or forfeited
with respect to each affected Highly Compensated Employee shall be equal to the
Matching Contributions made on behalf of such Employee (prior to reduction of
the Excess Aggregate Contributions), less the product of such Employee's ACP
(after reduction of the Excess Aggregate Contributions) times such Participant's
Total Compensation, rounded to the nearest one cent ($.01).
(c) Matching Contributions which constitute Excess Aggregate Contributions (i)
with respect to those Highly Compensated Employees who are vested in such
amounts, shall be distributed to such Employees within two and one-half months
after the close of the Plan Year in which such Excess Aggregate Contributions
occurred, if administratively possible, and within the twelve (12) month period
following the close of the Plan Year in which such Excess Aggregate
Contributions occurred at the latest and (ii) with respect to those Highly
Compensated Employees who are not vested in such amounts, excess Matching
Contributions shall be treated as Forfeitures and forfeited not later than the
last day of the Plan Year following the Plan Year in which such Excess Aggregate
Contributions occurred.
(d) In addition to or in lieu of the above procedures to conform Matching
Contributions to the limitations of SUBSECTION 4.07(1), the Employer may make a
QNEC on behalf of any Non-Highly Compensated Employee to the extent necessary to
insure the limitations of SUBSECTION 4.07(1) are met. Such QNECs shall be
included in the calculations under SUBSECTION 4.07(1) only if the requirements
of Treasury Regulation Section 1.401(m)-l(b)(5) (or any successor thereto) are
met. In addition, the Plan Administrator may designate that all or part of the
Pre-Tax Contributions shall be included in the calculations under SUBSECTION
4.07(1) (any such amounts shall not be included in the calculations under
SUBSECTION 4.05(1)) provided such use complies with the requirements of Treasury
Regulation Section 1.401(m)-l(b)(2) (or any successor thereto).
4.07(3) In determining the amount of income allocable to Excess Aggregate
Contributions which are being distributed or forfeited, the following rules
shall apply:
(a) The income allocable to Excess Aggregate Contributions for the Plan Year in
which the contributions are made is the income for the Plan Year with respect to
the Highly Compensated Employee's Matching Contributions multiplied by a
fraction, the numerator of which is the amount of Excess Aggregate Contributions
made on behalf of the Highly Compensated Employee for the Plan Year and the
denominator of which is the balance of the Participant's Matching Contributions
as of the end of the Plan Year before adjustment of his Employer Contribution
Account in accordance with the provisions of ARTICLE 6. For purposes of this
SUBSECTION 4.07(3), the income of the Plan shall mean all earnings, gains and
losses computed in accordance with the provisions of ARTICLE 6.
(b) No income allocable to Excess Aggregate Contributions for the period
between the end of the Plan Year and the date of the distribution shall be
refunded.
4.07(4) For purposes of this SECTION 4.07:
(a) "Actual Contribution Percentage" (or "ACP") shall mean for Eligible
Employees the average (arithmetic mean) of the ratio (calculated separately for
each Eligible Employee to the nearest one-hundredth of one percent) of:
(i) the sum of Matching Contributions actually contributed to the Trust on
behalf of such Employee and allocated to his Employer Contribution Account for
the Plan Year, plus
(ii) the Qualified Nonelective Contributions actually contributed to the Trust
on behalf of such Employee and allocated to his Pre-Tax Contribution Account for
the Plan Year, plus
(iii) the Pre-Tax Contributions actually contributed to the Trust on behalf of
such Employee and allocated to his Pre-Tax Contribution Account for the Plan
Year,
that qualify for aggregation under Code Section 401(m)(3) and are designated by
the Plan Administrator as includable in this computation for this Plan Year, to
(iv) the Total Compensation, as defined in SUBSECTION 4.05(4)(F), received by
the Employee during the Plan Year,
such average of ratios being multiplied by one hundred (100).
To the extent that the Plan Administrator elects, pursuant to the above
paragraph, to take Pre-Tax Contributions (and other contributions) listed in
SUBSECTION 4.05(4)(A) into account in computing the Actual Contribution
Percentage for such Plan Year, the Actual Deferral Percentage test under SECTION
4.05 must be satisfied separately, disregarding Pre-Tax Contributions (and other
contributions) listed in SUBSECTION 4.05(4)(A) but used in computing the Actual
Contribution Percentage for such Plan Year.
In calculating ACP, all Pre-Tax Contributions taken into account for purposes of
determining the Actual Contribution Percentage shall: (i) (but for the election
which such Employee made in accordance with SECTION 3.04) relate to Total
Compensation that would have been received by such Employee during the Plan
Year; or (ii) be attributable to services performed by the Employee in the Plan
Year (but for the election which such Employee made in accordance with SECTION
3.04) and would have been received by the Employee within two and one-half
months after the end of the Plan Year; and (iii) be allocated to the Employee's
Pre-Tax Contribution Account (and at the discretion of the Plan Administrator to
the subaccount for Qualified Nonelective Contributions) as of a date within the
Plan Year; and (iv) not be contingent upon the Employee's participation in the
Plan or performance of services on any date subsequent to the date as of which
such contributions are allocated; and (v) shall be actually paid to the Plan no
later than the end of the twelve (12) month period immediately following the
Plan Year to which such contribution relates; and (vi) shall be considered for
purposes of the ACP with respect to amounts allocated only to the Pre-Tax
Contribution Accounts of Non-Highly Compensated Employees.
In calculating ACP, a Matching Contribution shall be taken into account for a
Plan Year only if such Matching Contribution: (i) is made on account of the
Employee's Pre-Tax Contribution for the Plan Year; (ii) is allocated to the
Employee as of a date during such Plan Year; and (iii) is paid to the Trust not
later than the last day of the twelfth (12th) month following the close of such
Plan Year.
In calculating ACP, all employee contributions and employer matching
contributions (as defined in Code Section 401(m)(4)) of any Highly Compensated
Employee who participates in more than one plan maintained by an Affiliated
Company shall be aggregated for purposes of determining such percentage.
In calculating ACP, all employee contributions and employer matching
contributions (as defined in Code Section 401(m)(4)) to any plan required to be
aggregated with the Plan for purposes of Code Section 401(a)(4) or 410(b) shall
be treated as if made under the Plan. If the Plan is permissively aggregated
with another plan in order to comply with the limitations of SUBSECTION 4.07(1),
such aggregated plans must also meet the requirements of Code Sections 401(a)(4)
and 410(b) as a single plan.
(b) "Highly Compensated Employee" shall mean a Highly Compensated Employee as
defined in SUBSECTION 4.05(4)(C).
(c) "Non-Highly Compensated Employee" shall mean a Non-Highly Compensated
Employee as defined in SUBSECTION 4.05(4)(D).
(d) "Eligible Employee" shall mean an Eligible Employee as defined in
SUBSECTION 4.05(4)(E).
(e) "Total Compensation" shall mean compensation as defined in SUBSECTION
4.05(4)(F).
4.08 General Xxxxxxxxxx from After-Tax Contribution Account. Upon application
by the Participant received by the Plan Administrator, a Participant may, in
accordance with SECTION 4.11, withdraw all or a portion of the value of such
Participant's After-Tax Contribution Account; provided, however, that: (i) all
partial withdrawals must be for a minimum of Five Hundred Dollars ($500); and
(ii) all partial withdrawals over Five Hundred Dollars ($500) must be made in
Two Hundred Fifty Dollar ($250) increments. Withdrawals under this SECTION 4.08
shall be paid as soon as practicable following receipt by the Plan Administrator
of the application for withdrawal. A Participant shall be limited to two (2)
withdrawals under this SECTION 4.08, per year. General withdrawals shall be
valued and the amounts of the withdrawal shall be subtracted from the
Participant's After-Tax Contribution Account as of the Allocation Date
immediately preceding the date the withdrawal request is received by the Plan
Administrator, after allocation of earnings, losses, appreciation and
depreciation since the last Allocation Date.
4.09 General Withdrawal of Pre-Tax Contributions and Distribution Restrictions.
4.09(1) Notwithstanding any Plan provisions to the contrary, and except as
provided in SECTION 4.10 amounts held in a Participant's Pre-Tax Contribution
Account are not distributable prior to the earliest of:
(i) his separation from service (as defined in Code Section 401(k) and the
Treasury Regulations thereunder) pursuant to ARTICLE 10;
(ii) his Disability pursuant to ARTICLE 8;
(iii) his Death pursuant to ARTICLE 9;
(iv) his attainment of age 59 pursuant to SUBSECTION 4.09(2);
(v) the termination of the Plan; provided, however, that a distribution is
allowable under this provision only if neither the Employer nor another company
in an Affiliated Group with the Employer maintains a successor plan (as defined
in Treasury Regulations Section 1.401(k)-1(d)(3)) other than an employee stock
ownership plan on the date of distribution;
(vi) the disposition, to a corporation that is not in an Affiliated Group with
the Employer, of substantially all (at least eighty-five percent (85%)) of the
assets (within the meaning of Code Section 409(d)(2)) used by the Employer in a
trade or business of the Employer, but only if the Participant continues
employment with the transferee corporation, the Employer continues to maintain
the Plan, and the distribution is in connection with the disposition that causes
the Participant's employment transfer; or
(vii) the disposition, to an entity or individual that is not in an Affiliated
Group with the Employer, of the Employer's interest in a subsidiary (within the
meaning of Code Section 409(d)(3)) in which the Participant is employed, but
only if the Participant continues employment with the subsidiary, the Employer
continues to maintain the Plan, and the distribution is in connection with the
disposition that causes the Participant's employment transfer.
A distribution may be made under (v), (vi), or (vii) of SUBSECTION 4.09(1) only
if it constitutes a total distribution of the sum of (i) the Participant's
balances in all of his Accounts and (ii) his account balances under any other
profit sharing plan of the Employer or of a company in an Affiliated Group with
the Employer.
4.09(2) A Participant who has attained age 59-1/2 may withdraw all or any
portion of the balance of his previously unwithdrawn Pre-Tax Contributions as of
the Allocation Date coincident with or next following the date such request for
withdrawal is received by the Plan Administrator. The actual payment of the
amount to be so withdrawn shall occur as soon as administratively feasible on or
after such date. Notwithstanding that the Participant has elected to receive an
in-service withdrawal under this paragraph, the Participant shall continue to be
eligible to participate in the Plan on the same basis as prior to the
withdrawal.
If, at any time, a Participant withdraws less than the entire amount which is
available for his withdrawal under this SUBSECTION 4.09(2) at such time from his
Pre-Tax Contribution Account, then such Participant must withdraw a minimum
amount equal to Five Hundred Dollars ($500.00).
4.10 Hardship Withdrawals from After-Tax Contribution Account and Pre-Tax
Contribution Account.
4.10(1) Upon application by a Participant, the Plan Administrator may, in
accordance with the provisions of this SECTION and SECTION 4.11 permit such
Participant to withdraw a portion of the value of such Participant's After-Tax
Contribution Account or Pre-Tax Contribution Account, pursuant to the following
provision. Of the following provisions, all but SUBSECTIONS 4.10(2) AND 4.10(6)
shall apply to withdrawals of After-Tax Contributions and all but SUBSECTION
4.10(7) shall apply to withdrawals of Pre-Tax Contributions. Notwithstanding
the preceding, a Participant shall in any case be precluded from making a
hardship withdrawal of any amount in his Pre-Tax Contribution Account
attributable to Qualified Nonelective Contributions, Matching Contributions, or
Discretionary Contributions.
4.10(2) No withdrawal may be made for any purpose other than a Permitted
Purpose, as defined in SUBSECTION 4.10(6).
4.10(3) Application for withdrawal must be made in such form as prescribed by
the Plan Administrator, and must set out in detail the circumstances
establishing that the proposed withdrawal is for a Permitted Purpose.
4.10(4) Before the Plan Administrator will permit a Participant to make a
hardship withdrawal pursuant to this SECTION, the Participant must submit
representation that his financial need cannot be relieved: (i) through
reimbursement or compensation by insurance or otherwise; (ii) by reasonable
liquidation of the Participant's assets, to the extent such liquidation would
not itself cause an immediate and heavy financial need; (iii) by cessation of
Pre-Tax Contributions under the Plan; (iv) by other distributions or nontaxable
(at the time of the loan) loans from plans maintained by the Employer or by any
other employer; or (v) by borrowing from commercial sources on reasonable
commercial terms.
4.10(5) The Plan Administrator's determination of whether the application meets
the requirements of this SECTION shall be final and conclusive, and in making
such determination, the Plan Administrator shall follow uniform and
nondiscriminatory rules.
4.10(6) The expression "Permitted Purpose," as used in this SECTION, means a
withdrawal which is necessary in light of immediate and heavy financial need of
the Participant which is: (i) for payment of medical expenses described in Code
Section 213 of the Participant, the Participant's spouse, dependents (as defined
in Code Section 152) or parents as necessary for such persons to obtain medical
care described in Code Section 213; (ii) for purchase of a principal residence
of the Participant; (iii) for payment of tuition and related educational fees
for the next twelve (12) months of post-secondary education for the Participant
or such Participant's spouse, children or dependents; (iv) needed to prevent
eviction of the Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; (v) for payment of funeral
expenses for the Participant's spouse, dependents or parents; or (vi) needed to
prevent the enforcement of state or federal tax liens. Such withdrawal shall
not be permitted unless the Plan Administrator determines the Participant has
obtained all distributions (other than hardship distributions) and all
nontaxable loans currently available under all plans maintained by any
Affiliated Company, and in no event will such payment exceed the amount required
to meet such financial need.
4.10(7) Hardship withdrawal payments under SUBSECTION 4.10(1) shall not exceed
eighty percent (80%) of the balance in the Participant's After-Tax Contribution
Account as of the most currently available Allocation Date and shall be paid as
soon as practicable following receipt by the Plan Administrator of the
application for withdrawal and shall be subtracted from the Participant's
After-Tax Contribution Account as of the date on which the distribution occurs,
prior to allocation of earnings, losses, appreciation and depreciation since the
last Allocation Date.
4.10(8) Hardship withdrawal payments under SUBSECTION 4.10(1) shall not exceed
the excess of: (i) the Participant's actual Pre-Tax Contributions; over (ii)
his prior withdrawals under SUBSECTION 4.10(1) as of the most currently
available Allocation Date and shall be paid as soon as practicable following
receipt by the Plan Administrator of the application for withdrawal and shall be
subtracted from the Participant's Pre-Tax Contributions as of the first day of
the calendar quarter in which the distribution occurs, prior to allocation of
earnings, losses, appreciation and depreciation since the last Allocation Date.
4.11 Procedure for Withdrawal.
4.11(1) All withdrawals shall be subject to the Plan Administrator's
determination that the requirements for withdrawal are satisfied after receipt
of a request for withdrawal on such forms as the Plan Administrator shall
prescribe. If the Plan Administrator is satisfied that the application meets
the requirements of SECTIONS 4.08, 4.09 or 4.10, the application shall be
granted.
4.11(2) When an application for withdrawal is granted under the provisions of
this SECTION, the Plan Administrator shall give such directions to the Trustee
as appropriate to effectuate the distribution in accordance with the terms
hereof of the interest being withdrawn.
4.12 Discretionary Contributions. The Discretionary Contributions, if any, for
each Plan Year shall be in such form (i.e. cash, or Company Stock) and such
amount as the Board, in its sole discretion, may direct; provided however, that
the Discretionary Contributions shall not be less than the amount equal to the
product of: (a) the amount required to fully amortize any outstanding Exempt
Loan; minus (b) the amount already contributed by the Employer as Matching
Contributions pursuant to SECTION 4.02. However, in no event will the total of
Matching Contributions and Discretionary Contributions exceed the maximum amount
deductible from the Employer's income for such taxable year under Sections
404(a)(3)(A) and 404(a)(9) of the Code, including any amounts carried over under
Section 404 of the Code. Discretionary Contributions shall: (i) if made in
cash, be allocated to the Other Investments Accounts of Participants' Employer
Contribution Account; and (ii) if made in Company Stock, be allocated to the
Company Stock Accounts of Participants' Employer Contribution Accounts.
Discretionary Contributions shall be allocated as of the last day of the Plan
Year among all Participants who are employed by an Employer on the last day of
such Plan Year.
If a Participant who is an Eligible Employee ceases to be an Eligible Employee
or is transferred from an Employer to a non-adopting Affiliated Company, he
shall not participate in the allocation of Discretionary Contributions for the
Plan Year in which the cessation or transfer took place. If an Employee
transfers to an adopting Employer, such Employee shall become an Eligible
Employee and eligible to receive an allocation pursuant to the terms of this
SECTION 4.12.
4.13 Securities Law Limitations on Contributions. The Plan Administrator may,
in a nondiscriminatory manner determined in its sole discretion, reduce,
suspend, or refund contributions, as necessary to ensure that the offer and sale
of interests in the Plan and the offer and sale of Company Stock in connection
with the Plan comply with all requirements under the Securities Act of 1933, as
amended (the "Securities Act"), and any other applicable federal or state
securities laws.
ARTICLLE 5 - ALLOCATION TO PARTICIPANTS' ACCOUNTS
5.01 Trust Accounts. The Plan Administrator shall create and maintain adequate
records to reflect all transactions of the Trust and to disclose the interest in
the Trust of each Participant, former Participant, Beneficiary, or Alternate
Payee who has an undistributed interest in the Fund.
5.01(1) Individual Accounts. Where appropriate, the Plan Administrator shall
establish and maintain for each Participant a Pre-Tax Contribution Stock
Account, an Employer Contribution Account, an After-Tax Contribution Account and
an Employer Divestiture Account which Accounts are collectively referred to
herein as an Account.
(a) Pre-Tax Contribution Account. Each Participant's Pre-Tax Contribution
Account shall be further subdivided into the following two Accounts:
(i) Company Stock Account. A Company Stock Account shall be established under
each Participant's Pre-Tax Contribution Account and shall be credited with all
Pre-Tax Contributions made by the Participant which are invested in Company
Stock.
(ii) Other Investments Account. An Other Investments Account shall be
established under each Participant's Pre-Tax Contribution Account and shall be
credited with all Pre-Tax Contributions made by the Participant which are not
invested in Company Stock and if applicable, Qualified Nonelective Contributions
made on the Participant's behalf.
(b) Employer Contribution Accounts. Each Participant's Employer Contribution
Account shall be further subdivided into the following two Accounts:
(i) Company Stock Account. A Company Stock Account shall be established under
each Participant's Employer Contribution Account and shall be credited with all
Matching Contributions and Discretionary Contributions made on behalf of a
Participant which are invested in Company Stock.
(ii) Other Investments Account. An Other Investments Account shall be
established under each Participant's Employer Contribution Account and shall be
credited with all Matching Contributions and Discretionary Contributions made on
behalf of a Participant which are not invested in Company Stock.
5.01(2) General Account. The Plan Administrator shall also establish and
maintain for the Trust suspense accounts to be known as an Unallocated Company
Stock Account and an Unallocated Other Investments Account, in the event Company
Stock is acquired with the proceeds of an Exempt Loan.
5.01(3) Rights in Trust. The maintenance of individual Accounts is only for
accounting purposes, and a segregation of the assets of the Trust to each
Account shall not be required.
5.02 Contribution Allocations to Accounts.
5.02(1) Pre-Tax Contribution Account.
(a) Company Stock Account. The Company Stock Account of the Pre-Tax
Contribution Account of each Participant shall be increased (or decreased) by
his: (1) Pre-Tax Contributions invested in Company Stock; and (2) stock (in
kind) dividends on Company Stock held in the Company Stock Account of his
Pre-Tax Contribution Account. Such increase shall be recorded in whole and
fractional shares of Company Stock in order that such Account shall share in any
appreciation in the market value of the shares of Company Stock in the Company
Stock Account, or in any decreases in such market value.
(b) Other Investments Account. The Other Investments Account of the Pre-Tax
Contribution Account of each Participant will be increased (or decreased) by the
dollar value of his: (1) Pre-Tax Contributions not invested in Company Stock;
(2) Qualified Nonelective Contributions made on his behalf, if any; (3) his
allocable share (determined under SUBSECTION 5.02(4) below) of the net income or
loss attributable to this Account; (4) appreciation (or depreciation) in the
fair market value of the assets of the Trust (other than Company Stock)
attributable to this Account; and (5) cash dividends and other rights or
warrants allocable to Company Stock held in the Company Stock Account of his
Pre-Tax Contribution Account.
5.02(2) Employer Contribution Account.
(a) Company Stock Account. The Company Stock Account of the Employer
Contribution Account of each Participant shall be increased (or decreased) by
his allocable share (determined under SUBSECTION 5.02(4) below) of: (1)
Matching Contributions contributed in kind by the Employer or invested in
Company Stock by the Trust; (2) Discretionary Contributions contributed in kind
by the Employer or invested in Company Stock by the Trust; (3) stock (in kind)
dividends on Company Stock held in the Company Stock Account of his Employer
Contribution Account; and (4) Company Stock released from the Unallocated
Company Stock Account. Such increase shall be recorded in whole and fractional
shares of Company Stock in order that such Account shall share in any
appreciation in the market value of the shares of Company Stock in the Company
Stock Account, or in any decreases in such market value.
(b) Other Investments Account. The Other Investments of the Employer
Contribution Account of each Participant shall be increased (or decreased) by
the dollar value of his: (1) Matching Contributions in other than Company
Stock; (2) Discretionary Contributions in other than Company Stock; (3) his
allocable share (determined under SUBSECTION 5.02(4) below) of the net income or
loss attributable to this Account; (4) appreciation (or depreciation) in the
fair market value of the assets of the Trust (other than Company Stock)
attributable to this Account; (5) proceeds from the disposition of Company Stock
previously held in the Company Stock Account of his Employer Contribution
Account; and (6) his allocable share of cash and other rights or warrants with
respect to fractional shares of Employer Contributions in Company Stock that
cannot be allocated to the Company Stock Account of his Employer Contribution
Account. It will be decreased for: (1) any payments on purchases of Company
Stock or repayment of debt (including principal and interest) incurred for the
purchase of Company Stock which are attributable to such Account; (2) any
distributions or withdrawals; and (3) any expenses or Trustee's compensation
paid or reimbursed out of the Trust pursuant to SECTION 13.15 hereof or pursuant
to the Trust Agreement.
(c) Employer Contributions. Notwithstanding SUBSECTIONS 5.02(2)(A) and (B)
above, if in any Plan Year the foregoing allocation would result in more than
one-third (1/3) of total Employer Contributions for such Plan Year being
allocated to the Prohibited Group, no Employer Contributions in excess of
one-third (1/3) of total Employer Contributions shall be allocated to members of
such group, but such excess shall be reallocated to all other eligible
Participants according to the ratio that each such other eligible Participant's
Compensation bears to the total Compensation of all such other eligible
Participants. For purposes of this Subsection, the "Prohibited Group" means a
group of Participants consisting of highly compensated employees, as described
in section 414(q) of the Code.
5.02(3) Unallocated Company Stock Account and Unallocated Other Investments
Account.
(a) Unallocated Company Stock Account. The Unallocated Company Stock Account
shall be increased as of each Valuation Date with the number of shares of
Company Stock purchased with the proceeds of an Exempt Loan. The Unallocated
Company Stock Account shall also be increased as of each Valuation Date with the
stock (in kind) dividends received with respect to Company Stock held in such
Account. The Unallocated Company Stock Account shall be decreased by the number
of shares of Company Stock that are to be released from such Account in
accordance with the provisions of SUBSECTION 5.05(2) hereof.
(b) Unallocated Other Investments Account. The Unallocated Other Investments
Account will be increased (or decreased) by: (1) the dollar value of such
Account's allocable share of the net income (or loss) of the Trust attributable
to such Account; (2) cash dividends and other rights or warrants received with
respect to Company Stock in the Unallocated Company Stock Account; and (3)
amounts attributable to such Account that are used to pay an Exempt Loan in
accordance with SUBSECTION 5.05(4) hereof.
5.02(4) Earnings Allocation Procedures. Subject to SECTION 5.06 below,
Accounts shall be adjusted in accordance with the following:
(a) Income and Appreciation in Value of Other Investments Accounts in the
Trust. The income of the Other Investments Accounts, the Unallocated Other
Investments Account, the Employer Divestiture Accounts and the After-Tax
Contribution Accounts in the Trust (including the appreciation or depreciation
in value of the assets in the Other Investments Accounts, the Employer
Divestiture Accounts and the After-Tax Contribution Accounts in the Trust) shall
be allocated to such Accounts in proportion to the balances in such Accounts as
of the next preceding Valuation Date, but after first reducing each Account
balance by any distributions or charges from such Account since the next
preceding Valuation Date.
Any dividends allocated to the Unallocated Other Investments Account, to the
extent not used to pay principal and interest on an Exempt Loan, shall: (i)
first be allocated as a Matching Contribution pursuant to SECTION 5.05(3)(A);
and (ii) to the extent such amounts exceed the Employer's Matching Contribution
obligations for the Plan Year shall be allocated as a Discretionary Contribution
pursuant to SECTION 5.05(3)(B).
(b) Income and Appreciation in Value of Company Stock Accounts in the Trust.
The income (except stock (in kind) dividends with respect to Company Stock and
except the unrealized appreciation or depreciation in value of the assets in the
Company Stock Accounts in the Trust) of both the Company Stock Accounts and the
Unallocated Company Stock Account of the Trust shall be allocated to the Other
Investments Accounts and Unallocated Other Investments Account, as is
appropriate, in proportion to the balances, as of the last Valuation Date, in
the respective Company Stock Accounts or Unallocated Company Stock Account to
which the income is attributable but after first reducing each such Account
balance by any distributions or charges from such Accounts since the last
Valuation Date. Cash or stock (in kind) dividends with respect to Company Stock
shall be allocated to the Account which held the Company Stock that generated
the cash or stock (in kind) dividend; provided, however, that cash or stock (in
kind) dividends with respect to Company Stock then allocated to the Unallocated
Company Stock Account or the Unallocated Other Investments Account may first be
used to pay principal and interest on an Exempt Loan.
5.03 Time of Allocating Contributions. Subject to SECTIONS 4.07, 5.06 through
5.09 and SUBSECTION 19.03(2), Pre-Tax Contributions and Matching Contributions
shall be allocated as of the Allocation Date among all Participants (the
"Eligible Participants") who have made Pre-Tax Contributions, respectively,
since the last Allocation Date. Each Participant's allocable share of Matching
Contributions shall equal twenty percent (20%) of such Participant's Pre-Tax
Contributions since the last Allocation Date. Discretionary Contributions, if
any, for each Plan Year shall be allocated as of the last day of the Plan Year.
QNECs shall be allocated in accordance with SUBSECTION 4.05(3)(C).
5.04 Accounts of Participants Transferred to an Affiliated Company Which Has
Not Adopted the Plan. If a Participant is transferred to an Affiliated Company
which has not adopted the Plan, the amount in the Trust which is credited to his
Accounts shall continue to share in the earnings, losses, appreciation, or
depreciation of the Trust Fund, and such Participant's rights and obligations
with respect to such Accounts shall be governed by the provisions of the Plan
and Trust.
5.05 Treatment of Company Stock Purchased under an Exempt Loan.
5.05(1) Debt Purchase of Company Stock. Any Company Stock purchased by the
Trust under an Exempt Loan shall be allocated initially to the Unallocated
Company Stock Account.
5.05(2) Release from Unallocated Company Stock Account. On the Allocation
Date, there shall be released from the Unallocated Company Stock Account a
portion of the Company Stock purchased under an Exempt Loan by the Trust equal
to the number of shares determined by taking the shares so purchased which have
not theretofore been released from the Unallocated Company Stock Account
multiplied by the ratio of (1) the amount of principal and interest paid under
the Exempt Loan subsequent to the last Allocation Date, to (2) the total of all
principal and interest to be paid for the current and all future years.
Notwithstanding the preceding, the number of shares released pursuant to this
SECTION 5.05(2) for any Plan Year shall equal the number of shares purchased
under an Exempt Loan which have not theretofore been released from the
Unallocated Company Stock Account and multiplied by the ratio of (1) the amount
of principal and interest paid under the Exempt Loan for the Plan Year to (2)
the total of all principal and interest to be paid for the current and future
years.
5.05(3) Allocation to Company Stock Accounts. The number of shares of Company
Stock released pursuant to SUBSECTION 5.05(2) shall be allocated to the Company
Stock Accounts of Participants pursuant to the following provisions.
(a) Matching Contributions. The total number of shares released and allocable
as a Matching Contribution shall be determined by multiplying the total shares
released by a fraction the numerator of which is the amount of the cash
contribution needed to fund the Employer's Matching Contribution obligation for
the Plan Year (after allocation of dividends pursuant to SUBSECTION 5.02(4)(B)),
and the denominator of which is the total amount of cash contributed to the Plan
as Matching Contributions for such Plan Year. Each Participant's allocable
share of the Company Stock released which is attributable to the Matching
Contribution shall be determined by multiplying the number of shares released
pursuant to the Matching Contribution by a fraction the numerator of which is
the Participant's Matching Contribution funds for the Plan Year used to repay
principal and interest on an Exempt Loan and the denominator of which is the
aggregate of all Matching Contribution funds for the Plan Year used to repay
principal and interest on an Exempt Loan.
(b) Discretionary Contributions. The total number of shares released and
allocable as a Discretionary Contribution shall equal all remaining shares
released after application of SUBSECTION 5.05(3)(A). Each Participant's
allocable share of the Company Stock released which is attributable to the
Discretionary Contribution for the Plan Year shall be determined by multiplying
the number of shares released pursuant to the Discretionary Contribution for the
Plan Year by a fraction the numerator of which is the Participant's Compensation
for the Plan Year and the denominator of which is the Compensation of all
Participants.
5.04(4) Payments on an Exempt Loan. As of each Allocation Date, installment
payments, including principal and interest, made by the Trust out of Matching
Contributions or Discretionary Contributions since the last preceding
Allocation Date under an Exempt Loan, will decrease the Other Investments
Accounts in the same proportion that Matching Contributions and Discretionary
Contributions are allocated under the provisions of SUBSECTION 5.05(3) hereof.
Dividends from the Unallocated Other Investments Account that are used to pay
principal and interest of any installment payments shall also decrease the
Unallocated Other Investments Account. For purposes of determining payments on
an Exempt Loan, to the extent Matching Contributions are not sufficient to
satisfy all amounts currently due, Discretionary Contributions shall be made in
an amount sufficient to fully satisfy all amounts currently due. Each Exempt
Loan shall provide for payment of principal and interest substantially in
accordance with the following: all income ("specified income") allocable to the
Unallocated Company Stock Account and Unallocated Other Investments Account that
is attributable to collateral for the obligation shall be used, before any
Matching Contributions or Discretionary Contributions are so used, to pay
principal amounts due under such Exempt Loan; Matching Contributions and
Discretionary Contributions shall be first applied to repay interest under an
Exempt Loan with any excess used to fund current principal requirements not
otherwise funded by the specified income; if the specified income of the
Unallocated Company Stock Account and Unallocated Other Investments Account is
not sufficient to pay principal due under an Exempt Loan, then Matching
Contributions and Discretionary Contributions shall be used to fund the
difference; if the specified income exceeds the amount necessary to pay
principal due on Exempt Loans for the Plan Year, then such excess amount shall
be first used to pay interest currently due, if any, with respect to the Exempt
Loan and any remaining amount of income may, at the direction and in the
discretion of the Plan Administrator, be used to prepay principal due on an
Exempt Loan in succeeding Plan Years. Any remaining amount of income not so
used shall be allocated to Participants' Accounts in accordance with SUBSECTIONS
5.02(4)(A) and 5.02(4)(B).
5.06 Limitation on Annual Additions Under Code Section 415. The provisions of
Code Section 415 are incorporated by reference, to the extent not expressly
stated below.
5.06(1) Notwithstanding any other provision of the Plan, the sum of the Annual
Additions to a Participant's Account for any Limitation Year shall not exceed
the lesser of: (i) Thirty Thousand Dollars ($30,000) or, if greater, one-fourth
(1/4) of the defined benefit dollar limitation set forth in Code Section
415(b)(1)(A) as in effect for the Limitation Year; or (ii) twenty-five percent
(25%) of such Participant's Limitation Year Compensation for the entire
Limitation Year (even though such Participant may not have been a Participant
for the entire Limitation Year). The term "Annual Additions" to a Participant's
Account for any Limitation Year shall mean the sum of:
(a) such Participant's allocable share of the Matching Contributions and
Discretionary Contributions credited to such Participant within such Limitation
Year provided, however, that any such contributions applied to the payment of
the interest portion of any Exempt Loan shall not be counted as an Annual
Addition;
(b) the amount of such Participant's Pre-Tax Contributions under the Plan, put
in if any, for such Limitation Year;
(c) any amount allocated to an "individual medical account," as defined in Code
Section 415(l)(2), which is part of a pension or annuity plan maintained by an
Employer; and
(d) any amounts derived from contributions paid or accrued after December 31,
1985, in the first taxable year for which a reserve is established pursuant to
Code Section 419A and each subsequent year, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)) under a welfare benefit fund
(as defined in Code Section 419(e)) maintained by an Employer.
Provided, however, that the twenty-five percent (25%) limitation set forth in
this SUBSECTION 5.06(1)(II) shall not apply to amounts described in SUBSECTION
5.06(1)(II)(D).
Solely for purposes of this SECTION, the determination of a Participant's
Pre-Tax Contributions for a Limitation Year shall exclude the items set forth in
Treasury Regulations Sections 1.415-6(b)(3)(i)-(iv), and the determination of a
Participant's allocable share of Matching Contributions for a Limitation Year
shall exclude any Matching Contributions allocated to such Participant for any
of the reasons set forth in Treasury Regulations Sections 1.415-6(b)(2)(ii)-(vi)
(except as otherwise provided in such Sections).
5.06(2) In the event that as a result of: (i) a reasonable error in estimating a
Participant's Limitation Year Compensation or (ii) other facts and circumstances
which the Internal Revenue Service finds justify the availability of the
provisions of this Subsection and Subsection 5.02(3), it is determined that the
Annual Additions to a Participant's Account for any Limitation Year will exceed
the limitations contained herein, such Annual Additions shall be reduced to the
extent necessary to meet the limitations contained in Subsection 5.02(1) by
first reducing, to the extent necessary, such Participant's After-Tax
Contributions, then by reducing, to the extent necessary, such amounts allocated
to the Participant's Pre-Tax Contribution Account, then by reducing to the
extent necessary, his allocable share of Matching Contributions for the Plan
Year ending within such Limitation Year. If such prospective reductions are not
sufficient to cure the excess Annual Additions, the Participant's Pre-Tax
Contributions and/or After-Tax Contributions shall be refunded as necessary to
meet the limitations.
5.06(3) If the amount of any Participant's allocable share of Matching
Contributions is reduced in accordance with SUBSECTION 5.06(2), the amount of
such reduction shall be maintained in a suspense account under the Trust to be
used to reduce Matching Contributions for all Participants for the next
Limitation Year (and succeeding Limitation Years, if applicable). Any suspense
account established pursuant to this SUBSECTION shall not be adjusted to reflect
net income, loss, appreciation or depreciation in the value of the Trust Fund as
provided for a Participant's regular Accounts pursuant to ARTICLE 6.
5.06(4) If the amount of any Participant's Pre-Tax Contributions are refunded
in accordance with SUBSECTION 5.06(2), the amount of such refund (adjusted for
earnings, losses, appreciation, or depreciation) shall be disregarded for
purposes of the $10,000 limitation set forth in SUBSECTION 4.04(1)(B) and
SECTION 4.06.
5.06(5) In the event of termination of the Plan, the suspense account described
in SUBSECTION 5.06(3) shall revert to the Company to the extent it may not then
be allocated to any Participant's Account.
5.07 Limitations on Annual Additions for Employers or Affiliated Companies
Maintaining other Defined Contribution Plans. In the event that any Participant
in this Plan is also a participant under any other Defined Contribution Plan
maintained by an Affiliated Company, the total amount of Annual Additions to
such Participant's accounts under all such Defined Contribution Plans shall not
exceed the limitations set forth in SUBSECTION 5.06(1). If such total amount of
Annual Additions to each Participant's Accounts under all such Defined
Contribution Plans does exceed the limitations set forth in SUBSECTION 5.06(1),
then the Annual Additions to a Participant's Account in the Plan shall be
reduced after contributions to all other qualified plans of the Company are
reduced.
5.08 Limitations on Annual Additions for Employers or Affiliated Companies
Maintaining Defined Benefit Plans. In the event that any Participant under this
Plan is a participant under one or more Defined Benefit Plans maintained by an
Affiliated Company (whether or not terminated), then the sum of the Defined
Benefit Plan Fraction for such Limitation Year and the Defined Contribution Plan
Fraction for such Limitation Year shall not exceed one (1.0). If the sum of the
Defined Benefit Plan Fraction for any Limitation Year and the Defined
Contribution Plan Fraction for such Limitation Year does exceed one (1.0), then
the Annual Additions to a Participant's Accounts in this Plan shall be reduced,
and such reduction shall be accomplished in accordance with SECTION 5.06.
5.09 Definitions for Purposes of Determining the Annual Addition Limitations.
For purposes of SECTIONS 5.06, 5.07, 5.08 and this SECTION 5.09, the following
definitions shall apply:
"5.09(1) Retirement Plan" means: (a) any profit sharing, pension, or stock
bonus plan described in Code Sections 401(a) and 501(a); (b) any annuity plan or
annuity contract described in Code Section 403(a) or 403(b); and (c) any
simplified employee pension plan described in Code Section 408(k).
5.09(2) "Defined Benefit Plan" means any Retirement Plan which is not a Defined
Contribution Plan.
5.09(3) "Defined Benefit Plan Fraction" means a fraction calculated in
accordance with Code Section 415(e)(2).
5.09(4) "Defined Contribution Plan" means a Retirement Plan which provides for
an individual account for each participant and for benefits based solely on the
amount contributed to the participant's account, and any income, expenses,
gains, or losses, and any forfeitures of accounts of other participants which
may be allocated to such participant's account.
5.09(5) "Defined Contribution Plan Fraction" means a fraction, the numerator of
which is the sum of the Annual Additions to the participant's accounts under all
the Defined Contribution Plans (whether or not terminated) maintained by any
Affiliated Company for the current and all prior Limitation Years (including the
Annual Additions attributable to the participant's nondeductible employee
contributions to this and all other Defined Contribution Plans, whether or not
terminated, maintained by any Affiliated Company), and the denominator of which
is the sum of the Maximum Aggregate Amounts for the current and all prior
Limitation Years of employment with any Affiliated Company (regardless of
whether a Defined Contribution Plan was maintained by any Affiliated Company).
The "Maximum Aggregate Amount" in any Limitation Year is the lesser of one
hundred twenty-five percent (125%) of the dollar limitation in effect under Code
Section 415(c)(1)(A) or one hundred forty percent (140%) of the amount which may
be taken into account under Code Section 415(c)(1)(B).
5.05(6) "Limitation Year" means the Plan Year.
5.09(7) "Limitation Year Compensation" means a Participant's total compensation
for services rendered to an Employer during a Plan Year, as reported on Form W-2
or other federal wage statement as taxable for federal income tax purposes,
except that for only those Employees of ClubCorp International Resource Company
who are nonresident aliens who receive no earned income (within the meaning of
Code Section 911(d)(2)) which is U.S. source income (within the meaning of Code
Section 861(a)(3), Limitation Year Compensation shall mean: (i) such
Participant's wages, salaries, earned income (only if an employee within the
meaning of Code Section 401(c)(1)) which includes foreign earned income (as
defined in Code Section 911(b)) whether or not excludable from gross income
under Code Section 911, foreign earned income (as defined in Code Section
911(b)) whether or not excludable from gross income under Code Section 911, fees
for professional services, and other amounts received from an Employer for
personal services actually rendered in the course of employment with an Employer
as an Employee to the extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen, overtime pay,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits and reimbursements or
other expense allowances under a nonaccountable plan, as described in Treasury
Regulations Section 1.62-2(c)), but determined without regard to the exclusions
found in Code Sections 931 and 933; (ii) amounts received by such Participant
described in Code Sections 104(a)(3), 105(a) and 105(h), but only to the extent
that these amounts are includable in the gross income of the Employee; (iii)
amounts paid or reimbursed by the Employer to such Participant for moving
expenses incurred by such Participant, but only to the extent that at the time
of payment it is reasonable to believe that these amounts are not deductible by
such Participant under Code Section 217; (iv) the value of nonqualified stock
options granted to such Participant, but only to the extent that the value of
the option is includable in the gross income of such Participant for the taxable
year in which granted; and (v) the amount includable in the gross income of such
Participant upon making the election described in Code Section 83(b), but
excluding the following:
(a) Employer contributions to a plan of deferred compensation to the extent
contributions are not included in gross income of the Participant for the
taxable year in which contributed, and any distributions from a plan of deferred
compensation whether or not includable in the gross income of the Participant
when distributed;
(b) Employer contributions made on behalf of the Participant to a simplified
employee pension described in Code Section 408(k);
(c) amounts realized from the exercise of a nonqualified stock option, or when
restricted stock (or property) held by the Participant becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(d) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
amounts that receive special tax benefits, or contributions made by the Employer
(whether or not under a salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Participant).
5.10 Cessation of Eligible Employee Status. If any Participant does not incur
a Termination of Employment but ceases to be an Eligible Employee as defined in
SECTION 2.20, then, during the period that such Participant is not an Eligible
Employee as defined in such SECTION 2.20: (i) such Participant's Accounts shall
continue to share in the earnings, losses, appreciation, or depreciation of the
Trust Fund; and (ii) such Participant shall receive credit for vesting purposes
pursuant to SECTION 10.01 for any Vesting Years of Service completed during such
period.
5.11 Inclusion of Ineligible Employee and Erroneous Allocations. If in any
Plan Year any person who should not have been included as a Participant in the
Plan is erroneously included and Pre-Tax Contributions, Matching Contributions
or Discretionary Contributions are mistakenly made on such Participant's behalf,
the Plan records shall be corrected and such Pre-Tax, Matching and Discretionary
Contributions shall be treated as Forfeitures for the Plan Year in which the
discovery is made.
ARTICLE 6 - VALUATION OF TRUST FUND
6.01 Valuation of the Trust Fund and Account Statements.
6.01(1) Within a reasonable time after the Allocation Date, the Plan
Administrator shall have the Trustee prepare a statement of the condition of the
Trust Fund as of the close of business on such Allocation Date setting forth:
(i) the assets of the Trust Fund as of such Allocation Date, and the cost and
current value thereof as defined in ERISA Section 3(26) (the "Current Value")
and (ii) all investments, receipts, disbursements and other transactions
effected by it. This statement shall be delivered to the Plan Administrator.
As soon as practicable following each June 30 and December 31 Allocation Date,
the Plan Administrator shall cause to be prepared, and shall cause to be
delivered to each Participant, Beneficiary, or Alternate Payee, a report
disclosing the status of each such individual's Accounts in the Trust Fund.
6.01(2) Notwithstanding anything to the contrary contained herein, Company
Stock shall be valued by the Company in its discretion and confirmed by an
independent appraiser selected and retained by the Trustee; provided, however,
that in the event Company Stock becomes publicly traded, the foregoing sentence
shall not apply.
6.01(3) The Trustee's (or, in the case of Company Stock, the Company's)
determination of the Current Value of the assets in the Trust Fund and the Plan
Administrator's charges or credits to the individual Accounts with respect to
Participants, Beneficiaries, or Alternate Payees, as provided in SECTION 6.02,
shall be final and conclusive on all persons ever interested hereunder.
6.02 Forfeitures.
6.02(1) Application of Forfeitures. Forfeitures under this Plan shall be
applied pursuant to SECTION 10.04(6).
6.02(2) Computations. All of the computations required to be made under the
provisions of this ARTICLE 6, when made, shall be conclusive with respect
thereto and shall be binding upon all the Participants, Beneficiaries, Alternate
Payees, and all other persons ever having an interest in the Trust Fund.
6.03 Trust Fund. The Trust shall be invested in Company Stock (which is a
qualifying employer security within the meaning of ERISA), provided that to the
extent the Trustee determines it is required under ERISA to do so, or cash is
needed for administrative expenses or distributions, assets of the Trust Fund
shall be invested in short-term investments in the Trustee's discretion. All
purchases of qualifying employer securities, including Company Stock, shall be
for no more than the fair market value as determined in good faith by the
Company and confirmed by an appraisal submitted by an independent appraiser
selected and retained by the Trustee and no commission shall be charged with
respect to any purchase from a party in interest.
6.04 Voting of Shares; Exercise of Other Rights. Shares of Company Stock in
the Trust shall be voted by the Trustee as shall be directed by the Plan
Administrator. With respect to any corporate matter which involves the voting
of such shares at a shareholder meeting and which constitutes a merger,
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business or a similar transaction
specified in regulations under Section 409(e)(3) of the Code, however, each
Participant (or Beneficiary) will be entitled to give confidential instructions
to the Trustee as to the voting of shares of Company Stock then allocated to his
Company Stock Account. In that event, any allocated Company Stock with respect
to which voting directions are not given shall be voted, and shares of Company
Stock held by the Trust which are not then allocated to Participants' Company
Stock Accounts shall be voted in the manner determined by the Plan
Administrator. In the event the Company becomes publicly traded, i.e. the
Company Stock is required to be registered under Section 12 of the Securities
Exchange Act of 1934, each Participant will be entitled to give confidential
instructions to the Trustee as to the voting of all shares of Company Stock then
allocated to his Company Stock Account (as outlined above) as to all corporate
matters requiring a shareholder vote.
6.05 Put Option with Respect to Company Stock. Any Company Stock, if it is not
publicly traded, when distributed or is subject to a trading limitation when
distributed, must be subject to a put option. The put option is to be
exercisable only by the Participant, the Participant's donees, an Alternate
Payee, or by a person (including an estate or its distribute) to whom the
Company Stock passes by reason of a Participant's death. The put option must
permit the Participant to put the Company Stock to the Employer. The put option
must be exercisable during the sixty (60) consecutive days beginning on the date
that the Company Stock subject to the put option is distributed by the Plan, and
for another sixty (60) consecutive days during the Plan Year next following the
Plan Year in which the shares were distributed. The put option may be exercised
by the holder by notifying the Employer in writing that the put option is being
exercised. The period during which a put option is exercisable does not include
any period when a distributee is unable to exercise it because the party bound
by the put option is prohibited from honoring it by applicable federal or state
law. The price at which the put option is exercisable is the fair market value
of the Company Stock on the date of the transaction determined in good faith
based on all relevant factors.
Payment pursuant to the put option shall be made: (1) in the case of
distribution of the Participant's entire Account within one taxable year of the
recipient, no less rapidly than in substantially equal installments at least
annually over a period beginning no later than thirty (30) days after the
exercise of the put option and not exceeding five (5) years in all; adequate
security shall be provided and reasonable interest shall be paid on any
installments outstanding after thirty (30) days after exercise of the put
option; and (2) in the case of any other form of distribution not described in
the directly preceding clause (1) of this paragraph in this SECTION 6.05, within
thirty (30) days of the exercise of the put option. Notwithstanding the
preceding, payment pursuant to the put option may be extended to a date no later
than ten (10) years after the earlier of the date the put option is exercised or
the date of final repayment of any debt incurred in connection with the
acquisition of the Company Stock. The provisions described in this SECTION 6.05
are nonterminable even if the Exempt Loan is repaid or the Plan ceases to be an
employee stock ownership plan, or the custodian or trustee of an individual
retirement account described in Code Section 408(a) established by the
Participant or his surviving spouse.
6.06 Exempt Loan to Purchase Company Stock; Certain Conditions Applicable to
Such Company Stock. It is the express purpose of this Plan and its related
Trust Agreement to invest substantial sums in Company Stock for the benefit of
Participants in the Plan. Pursuant to this purpose, it is contemplated that the
Trustee will from time to time, upon the direction of the Plan Administrator,
borrow funds either through installment purchase contract, loan agreement or
other instrument of indebtedness (Exempt Loan) in order to purchase Company
Stock with such indebtedness either guaranteed by the Employer or one or more
Affiliated Companies or made directly from the Employer or one or more
Affiliated Companies to the Trust.
6.06(1) Use of Proceeds. All proceeds of such an Exempt Loan shall be used
within a reasonable time after receipt by the Trustee only for any or all of the
following purposes: to purchase Company Stock, to repay obligations incurred
under the Exempt Loan or to repay a prior Exempt Loan.
6.06(2) Non-Recourse Loans Only. Any Exempt Loan must be without recourse as
against the Plan and the Trust.
6.06(3) Collateral. The only assets of the Plan and Trust which may be given
as collateral for an Exempt Loan are shares of Company Stock acquired with the
proceeds of the Exempt Loan and those shares of Company Stock that were used as
collateral on a prior Exempt Loan repaid with the proceeds of the current Exempt
Loan.
6.06(4) Creditor's Rights to Assets. No person entitled to payment under the
Exempt Loan shall have any right to assets of the Plan or Trust other than
collateral given for the Exempt Loan, contributions (other than contributions of
Company Stock) that are made under the Plan to meet the Plan's obligations under
the Exempt Loan, and earnings attributable to such collateral and the investment
of such contributions.
6.06(5) Transfers Upon Default. In the event of default upon an Exempt Loan,
the value of Plan assets transferred in satisfaction of the Exempt Loan must not
exceed the amount of default. If the lender is a "disqualified person," the
Exempt Loan must provide for a transfer of Plan assets upon default only upon
and to the extent of the failure of the Plan to meet the repayment schedule of
the Exempt Loan.
6.06(6) Interest. The interest rate of any Exempt Loan described herein must
not be in excess of a reasonable rate of interest. In determining what is a
reasonable rate of interest, all relevant factors will be considered, including
the amount and duration of the loan, the security and guarantee (if any)
involved, the credit standing of the Plan and Trust and the guarantor (if any),
and the interest rate prevailing for comparable loans. A variable interest rate
is permissible if determined to be reasonable.
6.06(7) Release from Collateral or Suspense. The instrument evidencing the
indebtedness shall provide for release from collateral or suspense in accordance
with the provisions of SUBSECTION 5.05(2) of the Plan.
6.06(8) Limitation or Restrictions on Company Stock; Right of First Refusal.
Except as provided herein or in SECTION 6.05, no Company Stock acquired with
the proceeds of an Exempt Loan may be subject to a put, call, or other option,
or buy-sell or similar arrangement while held by and when distributed from the
Plan or its related Trust, whether or not the Plan is then an "Plan" within the
ambit of Section 54.4975-7(b)(1)(i) of the Treasury Regulations, unless
specifically required or permitted by such regulations. A holder
("Shareholder") of shares of Company Stock which have been distributed by the
Trustee, may not, for valuable consideration, sell, assign, pledge, convey in
trust, or otherwise transfer or encumber in any manner or by any means whatever
("Transfer") any interest in all or any part of Company Stock held by him except
in accordance with the terms and conditions of this SUBSECTION 6.06(8), if at
the time of such Transfer the Company Stock is not publicly traded. Provided,
however, "Transfer" shall not include any transfer of such shares by reason of a
Participant's death, any transfer to an Alternate Payee, or the transfer by a
Participant or his surviving spouse of the shares to an individual retirement
account, described in Code Section 408(a), in a transaction described in Code
Section 402(c). Upon the receipt of the Notice described below, the Company
shall have the first option to purchase the shares to be Transferred by the
Shareholder, and, if that option is not exercised in full by the Company, then
Trustee shall have the option to purchase shares not purchased by the Company.
Prior to any proposed Transfer, the Shareholder must first give written notice
("Notice") to the Plan Administrator that he intends to Transfer his shares of
Company Stock or any interest therein, which Notice shall state the number of
shares to be transferred, the name of the proposed transferee, the consideration
for the proposed Transfer, and the terms and conditions of the Transfer. The
Shareholder shall also submit with the Notice copies of all papers and other
documents to be used in connection with the proposed Transfer. Any deviation in
the terms of such Transfer, however slight, shall require a new Notice thereby
effecting a new option under this SUBSECTION 6.06(8).
The Company must exercise its option to purchase, as to all or a portion of the
shares offered, within fourteen (14) days of receipt of the Notice. If the
Company fails to exercise its option as to any or all of the shares, then the
Trustee (as directed by the Plan Administrator) shall be entitled to act upon
its option to purchase within that same fourteen (14) day period. Options shall
be exercised in the form of written notice of exercise to the Shareholder or his
legal representative within the designated period.
If the option is not exercised in full by the Company, the Trustee, or both,
within fourteen (14) days after Notice, the unexercised part of the option shall
lapse, and then the proposed Transfer (if to a transferee other than the Company
or Trustee) must be completed within ninety (90) days following the end of the
period for exercise, but only upon the same terms and at a price which is no
less than that set forth in the Notice. Any such permitted Transfer, however,
shall be conditioned upon the proposed transferee executing such documents as
counsel for the Company may reasonably request which evidences the transferee's
agreement to abide by the terms and provisions of this SUBSECTION 6.06(8)
concerning the shares, or any interest therein proposed to be acquired, and to
agree to any legending of certificates and to any restrictions on
transferability as the Company may reasonably require to ensure compliance with
federal or state securities laws.
In exercising an option to purchase, the Company, Trustee, or both, as the case
may be, must purchase pursuant to the terms of the Notice and at the greater of
the fair market value such shares of Company Stock or the price specified in the
Notice. The terms of the payment of the purchase price shall in no event be
less favorable than the terms of an independent third-party offer.
6.06(9) Limitations on Payments. The payments made during any Plan Year with
respect to an Exempt Loan described herein may not exceed an amount equal to the
sum of (1) the Matching Contributions, plus (2) the Discretionary Contributions,
plus (3) earnings received during or previous to the current Plan Year less
payments previously made with respect to such loan, plus (4) any dividends
received by the Trust on Company Stock purchased with the proceeds of an Exempt
Loan. The Employer Contributions and earnings described herein must be
accounted for separately on the books of account of the Plan and Trust until any
Exempt Loan is repaid, as is provided in the other provisions of ARTICLE 5 of
this Plan.
6.06(10) Term of Exempt Loans. Any Exempt Loan made by the Plan or Trust for
the purpose of purchasing Company Stock must be for a specific term and may not
be payable on the demand of any person, except in the case of default.
6.07 Diversification of Participant's Account. This SECTION 6.07 shall apply
to the extent a Participant's Account is credited with Company Stock ("Eligible
Assets"). A Participant who has attained age fifty-five (55) and who has
completed ten (10) or more years of participation in the Plan ("Eligible Age 55
Participant") may elect to have twenty-five percent (25%) of the Eligible Assets
then in his Account, after taking into account all assets as to which a prior
election is made at the fair market value of such assets at the time a prior
election is made, (and if in Company Stock, after converting such Company Stock
into cash at the Company Stock's current fair market value) transferred to the
ClubCorp Individual Investment Plan ("IIP"). Such an election shall be
permitted each year during the period of ninety (90) days after the close of
each Plan Year in a period of six (6) consecutive Plan Years beginning with the
Plan Year during which the Participant first becomes an Eligible Age 55
Participant. Participation for this purpose does not include any Years of
Service prior to establishment of the Plan or participation in any other plan.
During the last such election period, an Eligible Age 55 Participant may elect
to convert and transfer fifty percent (50%) of the Eligible Assets in his
Account, taking into account all assets as to which he has previously made an
election at the fair market value of such assets at the time a prior election is
made. To the extent a Participant makes an election under this SECTION 6.07,
the portion of the Eligible Assets in the Participant's Account that is subject
to the election shall, subject to SECTION 6.06 hereof, be converted and
transferred to the IIP no later than ninety (90) days after the end of the
election period.
6.08 Emergency Valuation. It is contemplated that the Trust will be valued by
the Trustee as of the Valuation Date and allocations made as of each Allocation
Date. However, should the Plan Administrator in good faith determine that,
because of an extraordinary change in general economic conditions or the
occurrence of an event radically affecting the value of all or a substantial
part of the Trust, an abnormal fluctuation in the value of the Trust has
occurred since the end of the preceding Plan Year, and that it has become
necessary to make a distribution to one (1) or more Participants, Beneficiaries,
or Alternate Payees under the provisions hereof, the Plan Administrator may, in
its sole discretion, to prevent any such person from receiving a substantially
greater or lesser amount than what he would be entitled to, based on the current
value of the Trust (as defined in ERISA Section 3(26)), cause a revaluation of
the Trust to be made and a reallocation of the interests therein as of the date
such person's right of distribution becomes fixed. The Plan Administrator's
determination to make such emergency valuation and the valuation of the Trust as
determined by the Trustee shall be conclusive and binding on all persons ever
interested hereunder.
ARTICL 7 - RETIREMENT BENEFITS
A Participant's Employer Contribution Account shall fully vest on his Normal
Retirement Date, provided such Participant is employed by an Affiliated Company
on such date. A Participant who continues in the Employer's employment after
his Normal Retirement Date shall continue to be a Participant in the Plan until
his actual retirement. Upon actual retirement on or after his Normal Retirement
Date, a Participant shall be entitled to receive distribution of the balance of
his entire Account as of the Allocation Date coinciding with or immediately
following the date on which such Participant retires. Payment upon retirement
shall be made by the Trustee at the direction of the Plan Administrator at the
time and manner provided in ARTICLE 11.
ARTICLE 8 - DISABILITY BENEFITS
8.01 Disability Retirement. If a Participant retires by reason of Disability
while in the employ of an Affiliated Company or on Leave of Absence, his
Employer Contribution Account shall fully vest and he shall be entitled to
receive distribution of the balance of his entire Account as of the Allocation
Date coinciding with or immediately following the date on which such Participant
retires. Payments resulting from a Participant's retirement on account of
Disability shall be made by the Trustee at the direction of the Plan
Administrator at the time and in the manner provided in ARTICLE 11.
8.02 Determination of Disability. The Plan Administrator shall determine
whether a Participant has suffered a Disability, and its determination in that
respect is binding upon the Participant, provided that the Plan Administrator
may rely upon professional medical advice in making such determination. In
making its determination, the Plan Administrator may require the Participant to
submit to medical examinations by doctors selected by the Plan Administrator.
The provisions of this ARTICLE 8 shall be uniformly and consistently applied to
all Participants.
ARTICLE 9 - DEATH BENEFITS
9.01 Death Benefits. Upon the death of a Participant while in the employ of an
Affiliated Company or on Leave of Absence, his Employer Contribution Account
shall fully vest and his Beneficiary, determined in accordance with SECTION
9.02, shall be entitled to receive distribution of the balance of his entire
Account as of the Allocation Date coinciding with or immediately following such
Participant's date of death, provided proper proof of death is filed with the
Plan Administrator.
Upon the death of a Participant who is no longer employed by an Affiliated
Company prior to receipt by such Participant of all amounts to which such
Participant is entitled under the provisions of the Plan, his Beneficiary,
determined in accordance with SECTION 9.02, shall be entitled to receive
distribution of the undistributed balance of such Participant's Account, to the
extent otherwise vested, as of the Allocation Date coinciding with or
immediately following such Participant's date of death, provided proper proof of
death is filed with the Plan Administrator.
Payments resulting from the death of a Participant shall be made by the Trustee
at the direction of the Plan Administrator at the time and in the manner
provided in ARTICLE 11.
9.02 Designation of Beneficiaries
9.02(1) Subject to the provisions of SUBSECTIONS 9.02(2) and 12.03(2), each
Participant may designate a Beneficiary or Beneficiaries, and contingent
Beneficiary or Beneficiaries, if desired, including the executor or
administrator of his estate, to receive his interest in the Trust Fund in the
event of his death, but the designation of a Beneficiary shall not be effective
for any purpose unless and until it has been filed with the Plan Administrator
on the form provided therefor. If the Participant has a surviving spouse, the
amount, if any, which is payable hereunder in respect of such deceased
Participant shall be paid to the surviving spouse unless the Participant is
survived by a Beneficiary designated in accordance with SUBSECTION 9.02(2). If
the Participant does not have a surviving spouse and the deceased Participant
failed to name a Beneficiary in the manner herein prescribed, or the Beneficiary
or all Beneficiaries so named predecease the Participant, the amount, if any,
which is payable hereunder in respect of such deceased Participant shall be paid
to the estate of such deceased Participant, in the form of a lump sum payment as
soon as practicable following the Participant's death. Any payment made to any
person pursuant to the power and discretion conferred upon the Plan
Administrator by the preceding sentence shall operate as a complete discharge of
all obligations under the Plan in respect of such deceased Participant and shall
not be subject to review by anyone, but shall be final, binding, and conclusive
on all persons ever interested hereunder.
Subject to the provisions of SUBSECTION 9.02(2), a Participant may from time to
time change any Beneficiary designated by him without notice to such
Beneficiary, under such rules and regulations as the Plan Administrator may from
time to time promulgate, but the last Beneficiary designation filed with the
Plan Administrator shall control.
9.02(2) With respect to a Participant who has been credited with an Hour of
Service on or after August 23, 1984, notwithstanding any other provision herein
to the contrary, but subject to the provisions of SUBSECTION 12.03(2), if, as of
such Participant's death, such Participant is married, the vested portion of
such Participant's Accounts shall, on his death, be paid to the surviving spouse
to whom he was married at the date of his death unless the surviving spouse has
made a Qualified Consent to the payment of any or all of said Accounts to a
designated Beneficiary other than the surviving spouse. "Qualified Consent"
means an irrevocable written consent executed by the Participant's spouse which
acknowledges the effect of the consent and is witnessed by a Plan representative
or a notary public. A Participant may, after obtaining a Qualified Consent,
change his Beneficiary designation as permitted by SUBSECTION 9.02(1), but any
such change is subject to the requirements of this SUBSECTION 9.02(2) and will
require another Qualified Consent should the spouse, if surviving, not be the
sole Beneficiary of all amounts in the Account, unless a Qualified Consent
previously executed by such spouse expressly authorizes changes in the
Beneficiary without further consent of the spouse. A Qualified Consent is
effective only with respect to the spouse who executes it. If the Plan
Administrator is satisfied that there is no spouse, or that the spouse cannot
reasonably be located, or in such other circumstances as permitted by Treasury
Regulations, no Qualified Consent shall be required as a condition to payment,
under SECTION 9.01, to a Beneficiary who is not the surviving spouse.
ARTICLE 10 - EMPLOYMENT TERMINATION BENEFITS
10.01 Vesting upon Termination of Employment. Subject to the provisions of
SECTIONS 4.08 and 10.04 and SUBSECTION 12.03(2), in the event of the Termination
of Employment of a Participant, such Participant shall be entitled to receive
distribution of the following percentage of his Employer Contribution Account,
as of the Allocation Date coinciding with or immediately following the date on
which such Participant terminates employment:
Vesting Years of Service . Nonforfeitable Percentage of Account
Less than 3 years . . . . . . 0%
3 years but less than 4 years 30%
4 years but less than 5 years 40%
5 years but less than 6 years 60%
6 years but less than 7 years 80%
7 years or more . . . . . . . 100%
Notwithstanding the foregoing, for Participants hired before January 1, 1989,
their vested percentage shall be one percent (1%) rather than zero percent (0%)
prior to being credited with three (3) Vesting Years of Service.
The Participant shall also be entitled to receive distribution of his entire
After-Tax Contribution Account, Pre-Tax Contribution Account, and Employer
Divestiture Account, if any, as of the Allocation Date coinciding with or
immediately following the date on which such Participant terminates employment.
Payment pursuant to this ARTICLE 10 shall be made by the Trustee, at the
direction of the Plan Administrator, at the time and manner provided in ARTICLE
11.
10.02 Determination of Vesting Years of Service. All Vesting Years of Service
(whether or not continuous) shall be taken into account.
10.03 Vesting on Divestiture of an Employer. If an Employer ceases to be an
Affiliated Company as a result of a divestiture by the Company, the Accounts of
Participants who are Employees of the divested Employer as of the date of the
divestiture shall become one hundred percent (100%) vested as of that date. If
a Participant who is an Employee of a divested Employer transfers to employment
with another Employer, an Employer Divestiture Account shall be established for
the Participant and the fully vested balance in the Participant's Account shall
be transferred to the Employer Divestiture Account. Full vesting pursuant to
this SECTION shall not affect the vesting of any Matching Contributions made for
such Participant subsequent to the divestiture. Following such Participant's
transfer, all subsequent Matching Contributions allocated to the Participant
shall be allocated to the Participant's Company Stock Account and shall be
subject to the provisions of this Plan otherwise applicable to the Participant.
Any adjustments provided for in ARTICLE 6 shall be made separately with respect
to such Participant's Employer Divestiture Account and his Employer Contribution
Account, and distribution of a Participant's Employer Divestiture Account shall
be made at the same time and in the same manner as provided in the Plan for the
distribution of a Participant's other Accounts in the Plan.
10.04 Forfeiture of Employer Contribution Account.
10.04(1) If a Participant has a Termination of Employment at a time when he has
no vested interest in his Employer Contribution Account, the non-vested amount
in his Employer Contribution Account shall be forfeited as of the date on which
such Participant incurs such Termination of Employment.
10.04(2) If a partially vested Participant has a Termination of Employment and
has received a distribution of the vested portion of his Employer Contribution
Account and his entire After-Tax Contribution Account, Pre-Tax Contribution
Account and Employer Divestiture Account, if any, the non-vested amounts in his
Employer Contribution Account shall be forfeited as of the date on which such
Participant receives such cash-out distribution.
10.04(3) If a partially vested Participant has a Termination of Employment and
has not received a distribution of the vested portion of his Employer
Contribution Account and his entire After-Tax Contribution Account, Pre-Tax
Contribution Account and Employer Divestiture Account, if any, the non-vested
amounts in his Employer Contribution Account shall be forfeited as of the last
day of the Plan Year in which such Participant has incurred five (5) consecutive
One-Year Breaks in Service.
10.04(4) If a partially vested Participant who has a Termination of Employment
and has not received a distribution of the vested portion of his Employer
Contribution Account, and his entire After-Tax Contribution Account and Pre-Tax
Contribution, is reemployed prior to incurring five (5) consecutive One-Year
Breaks in Service, such Participant shall not forfeit the non-vested amounts in
his Employer Contribution Account, and the vested amount in his Employer
Contribution Account shall be determined in accordance with the provisions of
this ARTICLE 10 without regard to such Participant's Termination of Employment.
10.04(5) In the case of any Participant who receives a refund of Excess
Contributions pursuant to SUBSECTION 4.05(3)(B) for the Plan Year, such
Participant shall forfeit for such Plan Year all Matching Contributions (whether
or not vested pursuant to SECTION 10.01) which relate to and were made on
account of amounts refunded under SUBSECTION 4.05(3)(B).
10.04(6) All amounts forfeited as provided in this SECTION 10.04 and SECTIONS
4.05 and 4.07 are herein referred to as "Forfeitures." Forfeitures shall first
be applied to fund any restorations of Forfeitures pursuant to SECTION 10.05 or
12.06, then shall be applied to pay administrative expenses, and then shall be
applied to reduce each Employer's Contributions in the proportion that each such
Employer's Contribution for such Plan Year bears to the total of all Employers'
Contributions for such Plan Year.
10.05 Restoration of Forfeited Accounts.
10.05(1) In the event a Participant who has forfeited all or part of his
Employer Contribution Account as described in SECTION 10.04, is reemployed by an
Employer prior to the date on which such Participant has incurred five (5)
consecutive One-Year Breaks in Service, an amount equal to the value of the
forfeited portion of his Employer Contribution Account without adjustment for
any gains or losses in the Trust Fund subsequent to the date of such Forfeiture)
plus any amount repaid by the Participant (as hereinafter provided) shall be
restored to such Participant's Employer Contribution Account, as appropriate;
provided, however, that if such Participant received a distribution, such
restoration shall not occur unless and until: (i) such Participant repays to the
Plan the full amount of his distribution and (ii) such Participant's repayment
is made before the end of the five (5) year period beginning with the
Participant's Reemployment Date. Upon the restoration of an Employer
Contribution Account as provided for hereinabove, the vested amount in such
Employer Contribution Account (whether attributable to amounts restored or
additional amounts added to such accounts after such reemployment) shall
thereafter be determined in accordance with the provisions of this ARTICLE 10
without regard to such Participant's original Termination of Employment.
10.05(2) The restoration of a Participant's Employer Contribution Account as
provided for in SUBSECTION 10.05(1), shall be made from the Forfeitures which
occurred during the Plan Year of such restoration before any use of such
Forfeitures as otherwise provided in SUBSECTION 10.04(5). Should such
Forfeitures be insufficient to restore the aggregate non-vested amounts owing to
any Participant under SUBSECTION 10.05(1), the additional amount necessary for
restoration shall be contributed by the Employer employing such Participant as a
special contribution to be specially allocated to the Participant's Employer
Contribution Account, as appropriate.
ARTICLE 11 - PAYMENT OF BENEFITS
11.01 Method of Payment
11.01(1) Upon a Participant's: (i) retirement on or after his Normal Retirement
Date; (ii) retirement due to Disability; (iii) death; or (iv) Termination of
Employment (subject to SECTION 4.09), he or his Beneficiary shall be entitled to
payment in an amount determined in accordance with the provisions of ARTICLE 7,
8, 9 or 10. All distributions shall be in either cash or in whole shares of
Company Stock to the extent such Participant's Account is invested in Company
Stock, as elected by the Participant or his Beneficiary. The amount to which a
Participant is entitled shall be paid to him or his Beneficiary or to an
Alternate Payee in: (i) a single lump sum distribution; or (ii) installments
subject to the limitations set forth in SUBSECTION 11.01(2).
11.01(2) Restrictions on Installment Payments.
(a) Permissible Periods. If a Participant's interest is to be distributed in
installments, it shall be paid in substantially equal monthly, quarterly, or
annual payments over one of the following periods. Notwithstanding any
provision in this Plan to the contrary, if an installment option is elected, the
Participant shall not be allowed to elect receipt of any of his Accounts in
Company Stock.
(i) Over a fixed, reasonable period of time, not exceeding the life expectancy
of the Participant, or the joint life expectancy of the Participant and his
designated Beneficiary.
(ii) Over a reasonable period of time, not exceeding fifteen (15) years;
provided, however, such period shall not exceed the life expectancy of the
Participant or the joint life expectancy of the Participant and his designated
Beneficiary. In the event a Participant elects a period of time of five (5)
years or less and the distribution exceeds five hundred thousand dollars
($500,000), as indexed under Code Section 415, the term of the distribution
shall be five (5) years, plus one (1) year (but not more than five (5)
additional years) for each one hundred thousand dollars ($100,000), as indexed
under Code Section 415, (or fraction thereof) by which the distribution exceeds
five hundred thousand dollars ($500,000), as indexed under Code Section 415.
The amount to be distributed each year must be at least equal to the quotient
obtained by dividing the Participant's entire interest by the life expectancy of
the Participant or the joint life expectancy of the Participant and his
designated Beneficiary, as the case may be.
(b) Computation of Life Expectancy. The minimum distribution shall be computed
by reference to the life expectancy multiples under Treasury Regulations Section
1.72-9. For purposes of this computation, the life expectancy of a Participant
and his spouse may be redetermined annually, but the life expectancy of a
non-spouse Beneficiary may not be recalculated. Such recalculation shall be
determined in accordance with Code Section 401(a)(9) and the regulations
thereunder.
(c) Incidental Benefit Restriction. If the Participant's spouse is not the
designated Beneficiary, the method of distributions selected must assure that
the incidental benefit restrictions of the regulations under Code Section
401(a)(9) are met.
(d) Prohibition Against Life Annuity. Nothing contained herein shall be
construed to allow a Participant to have his interest paid in the form of a life
annuity or to receive the distribution of an insurance contract providing for an
annuity.
11.02 Time for Distribution of Benefits. Distribution shall occur in
accordance with the following provisions:
11.02(1) Subject to the provisions of this SECTION 11.02 and SECTIONS 11.01 and
11.03, if a Participant or his Beneficiary is entitled to a distribution
pursuant to ARTICLE 7, 8, 9, or 10, unless the Participant elects to defer
distribution to a later time permitted by SECTION 11.03, such amounts shall be
distributed in a single cash lump sum as soon as administratively possible after
the Allocation Date coinciding with or immediately following the date of such
Participant's retirement on or after his Normal Retirement Date, retirement due
to total and permanent Disability, death or Termination of Employment, but in no
event later than the sixtieth (60th) day after the close of the Plan Year in
which occurs the latest of:
(a) The date on which the Participant attains or would have attained sixty-five
(65) years of age;
(b) The tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan; or
(c) The date the Participant suffers a Termination of Employment or death.
11.02(2) Notwithstanding any other provision of this Plan to the contrary, if
actual distribution pursuant to SUBSECTION 11.02(1) is delayed for any reason to
or beyond the Allocation Date next following the Allocation Date upon which the
amount of such distribution was to be based, the distribution shall be based on
the balance of the Participant's Accounts as of the Allocation Date coinciding
with or immediately preceding the date on which such distribution is made.
11.02(3) Notwithstanding the provisions of SUBSECTION 11.02(1), and subject to
SECTION 11.03, if a Participant has a Termination of Employment or retires due
to Disability and his vested Account at such time exceeds Five Thousand
($5,000), the amounts owing to such Participant shall be distributed in a single
lump sum as soon as administratively possible after such Participant attains age
sixty-five (65) or dies, unless such Participant has delivered to the Plan
Administrator his consent, in such form as prescribed by the Plan Administrator,
to a distribution at an earlier time.
11.02(4) If, upon Termination of Employment for any reason, or, when
distributions are required to commence to a Participant pursuant to SUBSECTION
11.03(1), the value of the vested portion of a Participant's Account is Five
Thousand Dollars ($5,000) or less and has never at any time prior exceeded Five
Thousand Dollars ($5,000), then his Account shall be paid to or for the benefit
of the Participant, or in the case of his death, to or for the benefit of his
Beneficiary or Beneficiaries, as a lump sum payment as soon as administratively
feasible.
11.03 Limitations on Timing. Notwithstanding any other provision of the Plan
to the contrary, distributions must occur at least as rapidly as required under
this SECTION 11.03.
11.03(1) Distribution of a Participant's entire interest in the Plan shall
commence to be distributed to him no later than the Required Beginning Date, and
at the Participant's election shall be fully distributed in a lump sum, based on
the balance in his Account as of the Allocation Date coinciding with or
immediately preceding the Required Beginning Date.
11.03(2) In the event of the death of a Participant prior to distribution of
his benefits under the Plan, distribution of such deceased Participant's entire
interest under the Plan shall be made within five (5) years after the death of
such Participant.
11.03(3) All distributions shall comply with the provisions of Code Sections
401(a)(9).
11.04 Restrictions on Distribution. Notwithstanding the foregoing provisions
of ARTICLE 11, the Plan shall not distribute any Company Stock acquired with the
proceeds of an Exempt Loan until the close of the Plan Year in which such Exempt
Loan has been repaid in full.
11.05 Payments on Personal Receipt Except in Case of Legal Disability. All
payments to any Participant, Beneficiary or Alternate Payee from the Trust Fund
shall be made to the recipient entitled thereto in person or upon his personal
receipt, in a form satisfactory to the Plan Administrator, except when the
recipient entitled thereto shall be under a legal disability, or, in the sole
judgment of the Plan Administrator, shall otherwise be unable to apply such
payments in furtherance of his own interests and advantage. The Plan
Administrator may, in such event, in its sole discretion, direct all or any
portion of such payments to be made in any one or more of the following ways:
(i) directly to such person, (ii) to the guardian of his person or of his
estate, even though appointed by a court other than a Texas state court, (iii)
to his spouse or to any other person, to be expended for his benefit, or (iv) to
a custodian under any applicable Uniform Gifts to Minors Act or Uniform
Transfers to Minors Act. The decision of the Plan Administrator, in each case,
will be final, binding and conclusive upon all persons ever interested
hereunder, and the Plan Administrator shall not be obliged to see to the proper
application or expenditure of any payments so made. Any payment made pursuant
to the power herein conferred upon the Plan Administrator shall operate as a
complete discharge of all obligations of the Trustee and the Plan Administrator,
to the extent of the amounts so paid.
11.06 Benefits Payable Pursuant to a Qualified Domestic Relations Order.
Notwithstanding any other provision of the Plan to the contrary, immediate
distribution of benefits payable to an Alternate Payee pursuant to a Qualified
Domestic Relations Order shall be permitted even though the Participant whose
benefits have been assigned to the Alternate Payee would not be entitled to
receive a distribution at such time, if all of the following requirements are
met: (i) the Participant's Account is one hundred percent (100%) vested; (ii)
the entire amount payable to the Alternate Payee does not exceed Five Thousand
Dollars ($5,000), or the Alternate Payee has requested immediate distribution in
such form as prescribed by the Plan Administrator; (iii) allocation pursuant to
SECTION 6.04 of all amounts required to be paid to the Alternate Payee has been
completed; (iv) the Qualified Domestic Relations Order requires or permits
immediate distribution; and (v) the conditions of SUBSECTION 11.01(1) as to form
of payment are met.
In the event an Alternate Payee dies prior to distribution of the amounts
payable to the Alternate Payee pursuant to the Qualified Domestic Relations
Order, the amount payable shall be distributed as provided in the Qualified
Domestic Relations Order. If the Qualified Domestic Relations Order does not
specify how such amounts are to be distributed in the event of the Alternate
Payee's death, the Plan Administrator shall cause such amounts to be distributed
to a Beneficiary designated by the Alternate Payee or if no Beneficiary has been
designated, in accordance with SUBSECTION 9.02(1) (by substituting Alternate
Payee for Participant whenever such term appears in that SECTION).
11.07 Direct Rollovers.
11.07(1) This SECTION 11.07 applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee from making an election under this SECTION, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover to the extent that such Eligible Rollover Distribution is at least $200
(or is reasonably expected to total at least $200 when aggregated with other
distributions during the Plan Year from this Plan). The procedures prescribed
by the Plan Administrator may include a deadline for making such an election and
may require the Distributee to furnish adequate information regarding the
Eligible Retirement Plan specified by the Participant in a Direct Rollover.
Such procedures may also require the Direct Rollover of at least $500 as a
condition of permitting Direct Rollover of less than the total distribution and
may limit Participants to a single Direct Rollover.
11.07(2) Definitions.
(a) Eligible Rollover Distribution. An "Eligible Rollover Distribution" is 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:
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 Participant and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); and 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).
(b) Eligible Retirement Plan. An "Eligible Retirement Plan" is an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a) that
accepts the distributees Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
(c) Distributee. A "Distributee" includes 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, as defined in Code Section
414(p), are Distributees with regard to the interest of the spouse of former
spouse.
(d) Direct Rollover. A "Direct Rollover" is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
11.07(3) Such distribution may commence less than thirty (30) days after the
notice required under Treasury Regulations Sections 1.411(a)-11(c) is given,
provided that:
(a) the Plan Administrator clearly informs the participant that the participant
has a right to a period of at least thirty (30) days after receiving the notice
to consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively elects a
distribution.
ARTICLE 12 - MISCELLANEOUS PROVISIONS RESPECTING PARTICIPANTS
12.01 Participants to Furnish Required Information.
12.01(1) Each Participant shall furnish to the Plan Administrator such
information as the Plan Administrator considers necessary or desirable for
purposes of administering the Plan, and the provisions of the Plan respecting
any payments hereunder are conditional upon the Participant's furnishing
promptly such true, full, and complete information as the Plan Administrator may
reasonably request.
12.01(2) Each Participant shall submit proof of such Participant's age to the
Plan Administrator. The Plan Administrator shall, if such proof of age is not
submitted as required, use as conclusive evidence thereof, such information as
is deemed by it to be reliable, regardless of the source of such information.
Any adjustment required by reason of lack of proof or the misstatement of the
age of persons entitled to benefits hereunder, by the Participant or otherwise,
shall be in such manner as the Plan Administrator deems equitable.
12.01(3) Any election, notice, or information which according to the terms of
the Plan or the rules of the Plan Administrator must be filed with the Plan
Administrator, shall be deemed so filed if addressed and either delivered in
person, delivered by electronic transmission, or mailed, postage fully prepaid,
to the Plan Administrator. Whenever a provision herein requires that a
Participant (or the Participant's Beneficiary) give notice to the Plan
Administrator or make an election within a specified number of days or by a
certain date, and the last day of such period, or such date, falls on a
Saturday, Sunday or Employer holiday, the Participant (or the Participant's
Beneficiary) will be deemed in compliance with such provision if notice is
delivered in person to the Plan Administrator, delivered by electronic
transmission, or is mailed, properly addressed, postage prepaid, and postmarked
on or before the business day next following such Saturday, Sunday or Employer
holiday. The Plan Administrator may, in its sole discretion, modify or waive
any specified notice requirement; provided, however, that such modification or
waiver must be administratively feasible, must be in the best interest of the
Participant, and must be made on the basis of the rules of the Plan
Administrator which are applied uniformly to all Participants.
12.02 Participants' Rights in Trust Fund. No Participant or other person shall
have any right, title or interest in, to or under the Trust Fund, or any part of
the assets thereof, except and to the extent expressly provided in the Plan.
12.03 Inalienability of Benefits.
12.03(1) Restrictions on Assignment. The benefits provided hereunder are
intended for the personal security of persons entitled to payment under the
Plan, and are not subject in any manner to the debts or other obligations of the
persons to whom they are payable. The interest of a Participant or such
Participant's Beneficiary or Beneficiaries may not be sold, transferred,
assigned, or encumbered in any manner, either voluntarily or involuntarily, and
any attempt so to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be null and void; neither shall the Trust
Fund nor any benefits thereunder or hereunder be liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person to whom such
benefits or funds are payable, nor shall they be subject to garnishment,
attachment, or other legal or equitable process nor shall they be an asset in
bankruptcy. All of the provisions of this SECTION 12.03, however, are subject
to SECTION 11.03, to withholding of any applicable taxes and to assignments
permitted by Code Section 401(a)(13).
12.03(2) Exception for Benefit Payable pursuant to a Qualified Domestic
Relations Order.
(a) The prohibitions contained in SUBSECTION 12.03(1) shall not apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a Qualified Domestic Relations Order.
(b) The Plan Administrator shall establish written procedures for the
determination of the qualified status of a domestic relations order.
(c) Upon receiving a domestic relations order, the Plan Administrator shall
notify the Participant and Alternate Payee named in the order, in writing, of
the receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Plan Administrator shall determine the qualified
status of the order and shall notify the Participant and the Alternate Payee, in
writing, of its determination. The Plan Administrator shall provide notice
under this paragraph by mailing such notice to the individual's address
specified in the domestic relations order, or in a manner consistent with
Department of Labor regulations.
(d) During any period in which the issue of whether a domestic relations order
is a Qualified Domestic Relations Order is being determined, notwithstanding any
other provision of the Plan to the contrary, the Plan Administrator shall
segregate in a separate account the amounts which would have been payable during
such period to an Alternate Payee pursuant to a Qualified Domestic Relations
Order, if such order had been determined to be a Qualified Domestic Relations
Order. During the period such amounts are segregated in a separate account
under the Plan, such amounts shall remain subject to the general investment
provisions of the Plan. If within the eighteen (18) month period beginning with
the date on which the first payment would be required to be made under such
domestic relations order, the domestic relations order is determined to be a
Qualified Domestic Relations Order, the Plan Administrator shall direct the
Trustee to distribute to the Alternate Payee the segregated amounts including
any earnings and appreciation (or losses and depreciation) thereon in accordance
with SECTION 11.05 and such domestic relations order. However, if within such
eighteen (18) month period, it is determined that such order is not qualified,
or the issue of qualification is not resolved, then the Plan Administrator shall
pay the segregated amounts, including any earnings and appreciation (or losses
and depreciation) thereon, to the person or persons who would have been entitled
to such amounts if there had been no such order.
(e) Notwithstanding any other provision of the Plan to the contrary, all rights
and benefits, including rights to make elections or to give directions, provided
to a Participant under this Plan shall be subject to the rights, benefits and
elections or directions afforded to an Alternate Payee, pursuant to a Qualified
Domestic Relations Order, and this Plan shall be interpreted and administered by
the Plan Administrator in such manner as to effectuate the provisions of any
such Qualified Domestic Relations Order as it relates to the rights, benefits,
and elections or directions afforded to such Alternate Payee under such
Qualified Domestic Relations Order. Furthermore, to the extent provided in any
such Qualified Domestic Relations Order, a former spouse of a Participant shall
be treated as a spouse or surviving spouse for all applicable purposes under the
Plan.
The Trustee shall make any payments or distributions required under this
SUBSECTION 12.03(2) by separate benefit checks or other separate distribution to
the Alternate Payee(s).
12.04 Conditions of Employment Not Affected by Plan. Neither the Plan nor the
Trust nor the Trust Agreement shall confer on any Employee, including any
Participant, any right to be retained in the service of any Employer, and
nothing contained herein or in the Trust Agreement shall be construed in any way
to limit or restrict the right of any Employer to discharge any Employee,
regardless of whether such Employee is a Participant, or to change such
Employee's position or the basis or amount of such Employee's compensation.
12.05 Address for Mailing of Benefits.
12.05(1) Each Participant and each other person entitled to benefits hereunder
shall file with the Plan Administrator from time to time in such form as
prescribed by the Plan Administrator such Participant's post office address and
each change of address. Any check representing payment hereunder and any
communication addressed to a Participant, an Employee, or Beneficiary, at such
person's last address filed with the Plan Administrator, or if no such address
has been filed, then at such person's last address as indicated on the records
of an Employer, shall be deemed to have been delivered to such person on the
date on which such check or communication is deposited, postage prepaid, in the
United States mail.
12.05(2) If the Plan Administrator is in doubt as to whether payments are being
received by the person entitled thereto, it shall, by registered mail addressed
to the person concerned, at his address last known to the Plan Administrator,
notify such person that all unmailed and future payments shall be withheld until
he provides the Plan Administrator with a sworn statement, properly notarized,
evidencing his continued life and his proper mailing address.
12.06 Unclaimed Account Procedure.
12.06(1) Neither the Trustee nor the Plan Administrator shall be obliged to
search for, or ascertain the whereabouts of any Participant, Beneficiary, or
Alternate Payee. Upon the return of a distribution check, the Plan
Administrator, by certified or registered mail addressed to such Participant's,
Beneficiary's, or Alternate Payee's last known address, shall notify the
Participant, Beneficiary, or Alternate Payee that such Participant, Beneficiary,
or Alternate Payee is entitled to a distribution under this Plan.
1206(2) Any distribution or payment which is not claimed by the person entitled
thereto within six (6) months from the date the certified or registered letter
is sent to the individual shall be forfeited. Any distribution check which is
not cashed within six (6) months from its date of issuance shall be void and the
amount thereof forfeited. Such forfeited amounts shall be added to Forfeitures.
Should such person make a claim for such forfeited benefit, at any time prior to
termination of the Plan and final distribution thereunder, which is approved by
the Plan Administrator, such benefit shall be restored as follows: An amount
equal to the amount previously forfeited (but without interest on such amount
for the period from the date of such forfeiture to the date of such restoration)
shall be specially allocated from Forfeitures in the current Plan Year for the
benefit of such Participant or Beneficiary. Immediately upon allocation to such
Participant or Beneficiary, the Plan Administrator shall instruct the Trustee to
distribute in a lump sum, directly to such Participant or Beneficiary, the
amount specially allocated to such Participant or Beneficiary.
12.06(3) In the event of Plan termination, amounts that were forfeited pursuant
to the provisions of SUBSECTION 12.06(2) which exceeded Five Thousand Dollars
($5,000) or were otherwise distributable without Participant consent, shall be
considered lost. If the period of time since forfeiture for such lost benefits
exceeds the applicable state escheat period, the forfeiture shall become
permanent upon Plan termination. All other amounts forfeited pursuant to
SUBSECTION 12.06(2) shall be reinstated as of the Plan's termination date.
12.07 No Rollovers. No rollovers shall be accepted.
ARTICLLE 13 - ADMINISTRATION OF THE PLAN
13.01 Plan Administrator. The administration of the Plan will be the
responsibility of the Plan Administrator which shall be the Company.
13.02 Compensated Expenses of the Plan Administrator. The Plan Administrator
shall serve without compensation for its services as such, but the reasonable
and necessary expenses of the Plan Administrator shall be paid by the Trust Fund
unless paid by the Employers as provided in SECTION 13.15. When, in its
discretion, the Plan Administrator, or any Employer, deems it advisable, the
Plan Administrator shall be authorized to have the records of the Plan
Administrator and the Trustee audited by an independent auditor, and reasonable
and necessary expenses thereby incurred shall be paid by the Trust Fund unless
paid by the Employers, as provided in SECTION 13.15.
13.03 Agents of the Plan Administrator. The Plan Administrator may employ such
agents and such clerical and other administrative personnel as reasonably may be
required for the purpose of administering the Plan. Such administrative
personnel shall carry out the duties and responsibilities assigned to them by
the Plan Administrator. Reasonable expenses necessarily incurred for such
purpose shall be paid by the Trust Fund unless paid by the Employers, as
provided in SECTION 13.15.
13.04 Reliance on Directions of Plan Administrator. The Plan Administrator
shall give to the Trustee any order, direction, consent, certificate, or advice
required or permitted under the terms of the Plan or Trust Agreement, and the
Trustee shall be entitled to rely on, as evidencing the action of the Plan
Administrator, any instrument delivered to the Trustee when: (i) if a
resolution, it is certified by the Secretary of the Board; or (ii) if a
memorandum, it is signed by a person who shall have been authorized to act for
the Plan Administrator in respect of the subject matter thereof.
13.05 Authority of Plan Administrator. The Plan Administrator is authorized to
take such actions as may be necessary to carry out the provisions and purposes
of the Plan and shall have the authority to control and manage the operation and
administration of the Plan. In order to effectuate the purposes of the Plan,
the Plan Administrator shall have the discretionary power to construe and
interpret the Plan, to supply any omissions therein, to reconcile and correct
any errors or inconsistencies, to decide any questions in the administration and
application of the Plan, to recover in any manner authorized by law any payments
erroneously or wrongfully made from the Plan to Participants or any other person
or entity, and to make equitable adjustments for any mistakes or errors made in
the administration of the Plan. All such actions or determinations made by the
Plan Administrator, and the application of rules and regulations to a particular
case or issue by the Plan Administrator, in good faith, shall not be subject to
review by anyone, but shall be final, binding, and conclusive on all persons
ever interested hereunder. In construing the Plan and in exercising its power
under provisions requiring Plan Administrator approval, the Plan Administrator
shall attempt to ascertain the purpose of the provisions in question and when
such purpose is known or reasonably ascertainable, such purpose shall be given
effect to the extent feasible. Likewise, the Plan Administrator is authorized
to determine all questions with respect to the individual rights of all
Participants and their Beneficiaries and Alternate Payees under this Plan,
including, but not limited to, all issues with respect to eligibility,
Compensation, service, valuation of Accounts, allocation of consolidated
contributions and Trust Fund earnings, and retirement or Termination of
Employment, and shall direct the Trustee concerning the allocation, payment and
distribution of all funds held in trust for purposes of the Plan. The Plan
Administrator, in the exercise of any discretionary powers hereunder, shall not
exercise that discretion so as to discriminate in favor of Highly Compensated
Employees. The Plan Administrator shall establish investment objectives and
monitor, or cause to be monitored, the investment performance of the Trustee or
any Investment Manager which may be appointed with respect to any assets of the
Plan.
13.06 Authorization of Loan Transactions. Upon directions from the Board, the
Plan Administrator shall have the authority to direct the Trustee to borrow
funds to purchase Company Stock. Upon directions from the Board, the Plan
Administrator shall consult with the Trustee concerning the source of the
borrowed funds, the terms of the loan agreement, and the provision of
collateral. The Board may empower the Plan Administrator to authorize the
guarantee or making by the Company of any such loan. Any loan made by or
guaranteed by the Company or which involves a disqualified person (as defined in
Section 4975(e)(2) of the Code) shall comply with all applicable requirements of
Section 4975(d)(3) of the Code and regulations issued thereunder in order that
the extension of credit shall be exempt from excise taxes imposed with respect
to prohibited transactions under Section 4975 of the Code and any liability
imposed by Section 406 of ERISA. From time to time at the Board's direction,
the Plan Administrator may direct the Trustee to enter into loan arrangements
and purchase additional Company Stock and may direct the Trustee to refinance
previous loans.
13.07 General Administrative Powers. The Plan Administrator shall have
authority to make, and from time to time, revise, rules and regulations for the
administration of the Plan.
13.08 Additional Powers. The Plan Administrator shall exercise such authority
and responsibility as it deems appropriate to comply with the provisions of
federal law and governmental regulations issued thereunder, including, but not
limited to, records of Participants' service, accrued benefits and the
percentage of such benefits which are nonforfeitable under the Plan,
notification to Participants, annual registration with the Internal Revenue
Service, annual reports to the Department of Labor, and furnishing the Trustee
with any directions or information regarding income tax withholding required by
law. The Plan Administrator is hereby designated as the agent for service of
process unless the Plan Administrator designates another person or entity.
13.09 Duties of Administrative Personnel. Administrative personnel appointed
pursuant to SECTION 13.03, shall be responsible for such matters as the Plan
Administrator shall delegate to them by written instrument, including, but not
limited to communications to Employees at the direction of the Plan
Administrator, reports to the Plan Administrator involving questions of
eligibility and the amount of Compensation of Participants, assisting
Participants, Beneficiaries and Alternate Payees in the completion of forms
prescribed by the Plan Administrator, and maintenance of records concerning
terminated vested Participants, Participants who have retired and Beneficiaries.
Administrative personnel may not make any decision as to Plan policy,
interpretations, practices or procedures unless the authority to make such
decisions has been delegated to them in writing by the Plan Administrator and
they accept fiduciary responsibilities in accordance with the provisions of
SECTION 13.10. All administrative personnel shall perform their allocated
function within the policies, interpretations, rules, practices and procedures
established by the Plan Administrator, except that administrative personnel
shall coordinate matters related to the Plan with the appropriate departments of
each Employer as the Plan Administrator directs.
13.10 Designation of Named Fiduciaries and Allocation of Responsibility. ERISA
requires that certain persons, who are deemed to be "fiduciaries," as defined in
ERISA Section 3(21)(A), be designated as "Named Fiduciaries" in the Plan. The
Board, the Plan Administrator, and the Trustees are hereby designated Named
Fiduciaries. Each Named Fiduciary shall have only the powers, duties and
responsibilities specifically allocated to such fiduciary pursuant to the terms
of this Plan and the Trust. Each Named Fiduciary may, by written instrument,
allocate some or all of its responsibilities to another fiduciary or designate
another person to carry out some or all of its fiduciary responsibilities. Each
fiduciary under the Plan (including fiduciaries to whom responsibilities are
allocated by a Named Fiduciary) will be furnished a copy of the Plan, and their
acceptance of such responsibility will be made by agreeing in writing to act in
the capacity designated. No Named Fiduciary shall be liable for an act or
omission of any person who is allocated a fiduciary responsibility or who is
designated to carry out such responsibility by a Named Fiduciary, except to the
extent that the Named Fiduciary did not act in accordance with the standards
contained in SUBSECTION 13.11(2) with respect to the allocation or designation
of a fiduciary duty. Any person or group of persons may serve in more than one
(1) fiduciary capacity with respect to the Plan.
13.11 Action by Fiduciaries.
13.11(1) Any action herein permitted or required to be taken by an Employer
shall, subject to the provisions of SECTION 20.07, be by resolution of its Board
or by written instrument signed by a person or group of persons who has been
authorized by resolution of such Board as having authority to take such action.
13.11(2) Each fiduciary with respect to the Plan shall perform all of his
duties and responsibilities and exercise his powers hereunder with the care,
skill, prudence, and diligence under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with like aims, and no
fiduciary shall be liable for any act or failure to act on his part (including
reliance on the advice of counsel) which conforms to that standard, unless: (i)
he knowingly participates in or knowingly undertakes to conceal an act or
omission of another fiduciary of the Plan, with the knowledge that such act or
omission is a breach of fiduciary responsibility; (ii) knowing of a breach of
fiduciary responsibility, he fails to make reasonable efforts under the
circumstances to remedy the breach; or (iii) by failing to carry out his
specific responsibilities, in accordance with such standard, he has enabled
another fiduciary of the Plan to commit a breach.
13.11(3) Each fiduciary shall furnish or cause to be furnished to each other
fiduciary all information needed for the proper performance of its duties. Each
fiduciary warrants that any directions given, information furnished or action
taken by it shall be in accordance with the provisions of the Plan or the Trust
Agreement, as the case may be, authorizing or providing for such direction,
information or action.
13.12 Appointment of Professional Assistants and the Investment Manager. A
Named Fiduciary may appoint such accountants, counsel, and actuaries and other
advisers as it deems necessary or desirable in connection with the
administration of the Plan. A Named Fiduciary shall be entitled to rely upon
and shall not be liable for any act or failure to act in reliance, on any
opinion or reports, which shall be furnished to such Named Fiduciary by any such
accountant with respect to accounting matters, counsel in respect to legal
matters, or actuary in respect of actuarial matters as long as the Named
Fiduciary's reliance is in accordance with the standard set forth in SUBSECTION
13.11(2). The fees and costs of such services are an administrative expense to
the Plan to be paid out of the Trust Fund except to the extent that Employers
elect to pay such fees and costs.
13.13 Bond. The Plan Administrator shall see that the appropriate fiduciaries
are bonded as required by federal law or regulation. Except as required by the
Board or by state or federal statute, irrespective of this provision, no bond or
other security shall be required of any fiduciary.
13.14 Indemnification. In the event and to the extent not insured against
under any contract of insurance with an insurance company, the Employers shall
indemnify and hold harmless each "Indemnified Person" as defined below, against
any and all claims, demands, suits, proceedings, losses, damages, interest,
penalties, expenses, (specifically including, but not limited to reasonable
counsel fees, court costs and other reasonable expenses of litigation), and
liability of every kind, including amounts paid in settlement, with the approval
of the Board, arising from any action or cause of action related to the
Indemnified Person's act or acts or failure to act. Such indemnity shall apply
regardless of whether such claims, demands, suits, proceedings, losses, damaged,
interest, penalties, expenses, and liability arise in whole or in part from:
(i) the negligence or other fault of the Indemnified Person, except when the
same is judicially determined to be due to gross negligence, fraud, or willful
or intentional misconduct of such Indemnified Person; or (ii) from the
imposition on such Indemnified Person of any penalties imposed by the Secretary
of Labor, pursuant to ERISA Section 502(1), relating to any breaches of
fiduciary responsibility under Part 4 of Title I of ERISA.
"Indemnified Person" shall mean each member of the Board, the Plan
Administrator, each individual Trustee, and each other Employee who is allocated
fiduciary responsibility hereunder. Upon request by the Indemnified Person, and
at such other times as may be determined by the Plan Administrator, any
indemnification due under this SECTION shall be made as the loss or expense as
incurred. Payments under this SECTION may be made directly to a third party at
the direction of the Board or the Indemnified Person. In the event the Plan
Administrator subsequently determines that a payment based upon an initial
determination of the applicability of this SECTION was inadvertently made, the
Indemnified Person on whose behalf such payment was made shall reimburse the
Employers to the extent required to satisfy the terms of this SECTION. The
indemnification provisions of this SECTION shall not relieve any person from any
liability he may have under ERISA for breach of fiduciary duty.
13.15 Payment of Expenses. The expenses of agents or advisers, and any other
reasonable expenses of the Plan Administrator, shall be paid or reimbursed by
the Trustee out of the Trust Fund unless paid by the Employers. Such expenses
shall be paid first from Forfeitures. To the extent permitted by XXXXX, the
Trustee may also reimburse an Employer for reasonable and necessary direct
expenses incurred for administration of the Plan.
ARTICLE 14 - PARTICIPATION BY EMPLOYERS
14.01 Adoption of Plan by Affiliated Company. Any Affiliated Company, whether
or not presently existing, may adopt this Plan with the consent of the Company.
Adoption by an Affiliated Company shall be accomplished in such manner as is
specified by the Company from time to time. With the approval of the Company,
an Affiliated Company may adopt the Plan with such modifications as it specifies
in its instrument of adoption.
14.02 Rights and Obligations of the Company and the Employers. Throughout this
instrument, a distinction is purposely drawn between rights and obligations of
the Company and rights and obligations of each other Employer. The rights and
obligations specified as belonging to the Company shall belong only to the
Company. Each Employer (other than Operations Company for Homestead, Inc.)
shall have the obligation, as herein provided, to make Matching Contributions
and Discretionary Contributions for its own Participants, and no Employer shall
have the obligation to make Matching Contributions or Discretionary
Contributions for the Participants of any other Employer. Any failure by an
Employer to fulfill its own obligations under this Plan shall have no effect
upon any other Employer. An Employer may withdraw from this Plan without
affecting any other Employer.
14.03 Withdrawal from Plan. Any Employer may withdraw from the Plan upon
giving the Company and the Trustee at least sixty (60) days' notice in writing
of its intention to withdraw. Such withdrawal shall terminate all obligations
of the withdrawn Employer under the Plan, but, except as otherwise provided by
the Company in its sole discretion, the Accounts of such Employers' Employees
shall remain in the Trust until otherwise payable to the Participants.
ARTICLLE 15 - AMENDMENT OF THE PLAN
The Company reserves the right to amend the Plan with respect to all Employers
at any time and from time to time. Unless otherwise permitted by law, no
amendment shall permit any part of the Trust Fund to revert to or be recoverable
by an Employer or be used for or diverted to purposes other than the exclusive
benefit of the Participants or their Beneficiaries, or deprive any Participant
of any interest he might have in the Trust Fund at the time of the amendment to
the extent that such interest would be available to the Participant under
ARTICLE 10 were he to voluntarily resign as of the effective date of the
amendment.
(a) Under no condition, shall such amendment, amendments, or restatements
increase the duties or responsibilities, or decrease the compensation,
privileges, and immunities of the Trustee without the Trustee's written consent.
(b) Under no condition, shall such amendment change the vesting schedule to one
which would result in the nonforfeitable percentage of the accrued benefit
derived from Matching Contributions or Discretionary Contributions (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 being less than such nonforfeitable
percentage computed under the Plan without regard to such amendment; provided,
however, that no amendment shall change the vesting schedule unless each
Participant with three (3) or more Vesting Years of Service, is permitted to
elect, within the election period described below, to have his nonforfeitable
percentage computed under the Plan without regard to the amendment. The
election period described herein shall begin no later than the date upon which
the amendment is adopted and shall end no later than the latest of the following
dates: (i) the date which is sixty (60) days after the day the amendment is
adopted; (ii) the date which is sixty (60) days after the day the amendment
becomes effective; or (iii) the date which is sixty (60) days after the day the
Participant is issued a written notice of the amendment by the Company.
(c) Subject to the above stated limitations and the requirement that no
amendment shall eliminate (except with respect to any future contributions or
future accrual of benefits and except as otherwise permitted by Treasury
Regulations or rulings) any nondiscretionary optional form of payment as
provided in Treasury Regulations Section 1.411(d)-4 and Code Section 411(d)(6),
with respect to any Participant who is a Participant immediately prior to the
amendment, the Company shall have the power to amend the Plan and Trust
Agreement, retroactively or otherwise, in any manner in which it deems
desirable, including, but not by way of limitation, the power to change any
provisions relating to the administration of the Plan and Trust Fund, and to
change any provisions relating to the benefits or payment of any of the assets
of the Trust Fund. Each such amendment shall become effective when executed by
the Company unless a different effective date is specified in the amendment.
(d) Notwithstanding anything herein to the contrary, this Plan may be amended
at any time by the Company if necessary or desirable in order to have it conform
to the provisions and requirements of the Code or any other applicable law, and
no such amendment shall be considered prejudicial to the rights of any
Participant hereunder or of any Beneficiary, Alternate Payee, or Employee.
Further, it is understood that any provisions of this Plan as herein contained
which are contrary to the requirements of the Code for a qualified tax exempt
employees' stock bonus plan and trust shall be deemed void and of no effect,
without affecting the validity of other provisions hereof.
ARTICLE 16 - PERMANENCY OF THE PLAN
16.01 Right to Terminate Plan. The Company contemplates that the Plan shall be
permanent and that the Employers shall be able to make contributions to the
Plan. Nevertheless, in recognition of the fact that future conditions and
circumstances cannot now be entirely foreseen, the Company reserves the right to
terminate the Plan.
16.02 Merger or Consolidation of Plan and Trust. Neither the Plan nor the
Trust may be merged or consolidated with, nor may its assets or liabilities be
transferred to, any other plan or trust, unless each Participant would (if the
Plan then terminated) 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). The Plan
Administrator is empowered to direct the Trustee to transfer assets and
liabilities from the Plan relating to such Participant Accounts as the Plan
Administrator designates to another plan, such transfer must meet the
requirements of Code Section 414, and trust-to-trust transfer under this SECTION
16.02 shall only be made in cash.
16.03 Continuance by Successor Company. Subject to approval of the Board, in
the event of the liquidation, dissolution, merger, consolidation, or
reorganization of an Employer, the successor company may, with the approval of
the Company, adopt the Plan and Trust for the benefit of the Employees of such
Employer. If such successor company does adopt the Plan and Trust, it shall, in
all respects, be substituted for such Employer under the Plan and Trust. Any
such substitution of such successor company shall constitute an assumption of
Plan liabilities by such successor company, and such successor company shall
have all of the powers, duties and responsibilities of such Employer under the
Plan and Trust. If such successor company does not adopt the Plan and Trust,
participation in the Plan and Trust shall cease with respect to such Employer in
accordance with the provisions of the Plan and Trust Agreement and the assets of
the successor company's employees shall be held or distributed as directed by
the Board.
ARTICLE 17 - DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION
17.01 Suspension of Contributions. Should an Employer fail to make Matching
Contributions in any one (1) or more years, such failure shall not, of itself,
terminate or discontinue this Plan and Trust as to the Employer and its
Participants, nor shall the Employer incur any obligation to resume its Matching
Contributions in whole or in part.
17.02 Discontinuance of Contributions. Whenever an Employer determines that it
is impossible or inadvisable for it to make further Matching Contributions, such
Employer may without terminating the Trust, permanently discontinue all further
Matching Contributions by such Employer. A certified copy of such Employer's
resolution or other formal written instrument pursuant to SECTION 20.06, shall
be delivered to the Plan Administrator and the Trustee. Thereafter, the Plan
Administrator and the Trustee shall continue to administer all the provisions of
the Plan which are necessary and remain in force, other than the provisions
relating to Matching Contributions by such Employer. Unless otherwise provided
by the Company, the Trust shall remain in existence with respect to such
Employer and all of the provisions of the Trust Agreement shall remain in force.
17.03 Termination of Plan and Trust. If the Company determines to terminate
the Plan and Trust completely, it shall be terminated as of the date specified
in certified copies of resolutions or other formal written instrument pursuant
to SECTION 20.06, delivered to the Trustee. The Company shall direct the
Trustee whether to continue to hold assets of the Plan pending distribution to
Participants and Beneficiaries at the times provided in ARTICLE 11, or to
liquidate and distribute assets of the Plan as hereinafter provided. Upon such
termination of the Plan and Trust and before liquidation of the Trust, the
Trustee shall do a special valuation of the Trust, if the liquidation is not to
occur as of an Allocation Date. After payment of all expenses and proportional
adjustment of Accounts of Participants to reflect such expenses, Trust Fund
profits or losses, and subject to the limitations contained in SECTION 5.04,
allocations of any previously unallocated funds to the date of termination,
Participants shall be entitled to receive the amount then credited to their
respective Accounts in the Trust Fund in accordance with ARTICLE 11. If, in the
opinion of the Plan Administrator, assets in the Trust Fund or certain of them
may possibly not be readily salable (i) because of federal or state securities
laws, or the rules and regulations thereunder or (ii) at a fair value, the Plan
Administrator shall direct and the Trustee shall effect, a distribution of such
assets in kind. Upon completion of liquidation and distribution of the assets
of the Trust to the Participants, the Trustee shall thereby complete the
Trustee's duties, and the Trust shall terminate.
17.04 Participant's Rights to Benefits upon Termination or Partial Termination
of Plan or Complete Discontinuance of Contributions. Upon the termination or
partial termination (as determined by the Internal Revenue Service) of the Plan
or the complete discontinuance of Matching Contributions, the rights of affected
Participants with respect to the amounts credited to their Accounts at such time
shall be nonforfeitable without reference to any formal action on the part of
such Employer, the Plan Administrator, or the Trustee.
ARTICLE 18 - EXCLUSIVE BENEFIT OF THE PLAN
18.01 Limitation on Reversions. Except as otherwise provided in this ARTICLE
18, it shall be impossible, at any time, for any part of the Trust Fund, other
than such part as is required to pay taxes and administration expenses or such
part as may otherwise be permitted by law to be returned to the Employer, to be
recoverable by an Employer, or to be used for, or diverted to, purposes other
than for the exclusive benefit of the Participants, Beneficiaries, and Alternate
Payees.
18.02 Unallocated Amounts upon Termination of Plan and Trust. In the event the
Plan and Trust are terminated, any previously unallocated amounts maintained in
the suspense account in accordance with the provisions of SUBSECTION 5.06(3)
which cannot be allocated to Participants upon the termination of the Plan and
Trust pursuant to SECTION 17.03 because of the limitations contained in SECTIONS
5.07 through 5.09, shall revert to the Employer or Employers employing the
Participant at the time of such termination.
18.03 Mistake of Fact or Disallowance of Deduction. If the Plan Administrator
in good faith determines that (a) a Discretionary Contribution, a Matching
Contribution or Pre-Tax Contribution was made by reason of a mistake of fact or
(b) a Discretionary Contribution, a Matching Contribution or Pre-Tax
Contribution is conditioned on its being deductible under Code Section 404, but
the Internal Revenue Service disallows such deduction, the amount of the excess
Discretionary Contribution, Matching Contribution or Pre-Tax Contribution less
losses attributable thereto may, upon direction of the Plan Administrator, be
returned to the contributing Employer. All payments of returned Discretionary
Contribution, Matching Contributions or Pre-Tax Contributions under this SECTION
shall be made within one (1) year from the date of the payment of such mistaken
Discretionary Contribution, Matching Contribution or Pre-Tax Contribution or the
disallowance by the Internal Revenue Service of the deduction, whichever is
applicable. The amount of the excess Discretionary Contribution, Matching
Contribution or Pre-Tax Contribution shall be the excess of (1) the amount
contributed over (2) the amount that would have been contributed had there not
occurred a mistake of fact or had the deduction not been disallowed. Earnings
attributable to the excess Discretionary Contribution, Matching Contribution or
Pre-Tax Contribution shall not be returned to the contributing Employer, but
losses attributable thereto shall reduce the amount of such Discretionary
Contribution, Matching Contribution or Pre-Tax Contribution to be so returned.
Furthermore, if the withdrawal of the amount attributable to the mistaken
Discretionary Contribution, Matching Contribution or Pre-Tax Contribution would
cause the balance of a Participant's Account to be reduced to an amount which is
less than the balance which would have been in said Account had the mistaken
Discretionary Contribution, amount not been contributed, then the amount to be
returned to the Employer under this SECTION will be reduced so as to avoid any
such reduction.
ARTICLE 19 - TOP HEAVY PLAN RULES
19.01 Definitions. As used in this ARTICLE 19:
19.01(1) "Defined Benefit Plan" shall have the meaning set forth in SUBSECTION
5.09(2).
19.01(2) "Defined Contribution Plan" shall have the meaning set forth in
SUBSECTION 5.09(4).
19.01(3) "Determination Date" means with respect to any Plan Year, the last day
of the preceding Plan Year, except that in the case of the first Plan Year of
any plan, the last day of such first Plan Year.
19.01(4) "Key Employee" means any person employed or formerly employed by any
Affiliated Company (and the beneficiaries of any such person) who is, at any
time during the Plan Year containing the Determination Date, or who was, during
any one or more of the four (4) preceding Plan Years, any one or more of the
following:
(a) An officer of an Affiliated Company having Limitation Year Compensation for
the applicable Plan Year greater than fifty percent (50%) of the maximum dollar
limitation under Code Section 415(b)(1)(A) (as in effect for the calendar year
in which the Determination Date for such Plan Year falls). For purposes of this
SUBSECTION, not more than fifty (50) employees shall be treated as officers.
(b) A person employed by an Affiliated Company having Limitation Year
Compensation for the applicable Plan Year greater than the maximum dollar
limitation under Code Section 415(c)(1)(A) as in effect for the calendar year in
which the Determination Date for such Plan Year falls, and owning (or considered
as owning within the meaning of Code Section 318) both more than one-half of one
percent (1/2 of 1%) interest and one of the ten (10) largest interests in an
Affiliated Company. For purposes of this SUBSECTION: (i) a person who has some
ownership interest is considered to be one of the top ten (10) owners unless at
least ten (10) other persons own a larger interest than that person and (ii) if
two (2) or more persons have the same ownership interest in an Affiliated
Company, the person having greater annual Limitation Year Compensation from all
Employers and Affiliated Companies shall be treated as having the larger
interest.
(c) Any person owning (or considered as owning within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of an
Affiliated Company or stock possessing more than five percent (5%) of the total
combined voting power of such stock or more than five percent (5%) of the
capital or profits interest of an Affiliated Company which is not a corporation.
(d) A person who would be described in SUBSECTION (C) if "one percent (1%)"
were substituted for "five percent (5%)" each place it appears in said
SUBSECTION, and whose aggregate annual Limitation Year Compensation from all
Employers and Affiliated Companies is more than One Hundred Sixty Thousand
Dollars ($160,000).
(e) Notwithstanding any other provision in this Plan to the contrary, for
purposes of determining ownership under SUBSECTIONS 19.01(4)(C) and (D), the
rules of Code Sections 414(b), (c), and (m) shall not apply in defining who is
an Employer.
The determination of who is a Key Employee hereunder shall be made in accordance
with the provisions of Code Section 416(i)(1) and the regulations thereunder.
19.01(5)"Key Employee Participant" means a Participant in this Plan who is a Key
Employee.
19.01(6) "Limitation Year Compensation" shall have the meaning set forth in
SUBSECTION 5.09(7), except that if the Limitation Year and the Plan Year under
the applicable plan are not the same, then for purposes of this ARTICLE 19,
"Plan Year" shall be substituted for "Limitation Year" every place it occurs in
SUBSECTION 5.09(7).
19.01(7) "Non-Key Employee" means any person employed or formerly employed by
any Affiliated Company, including the Beneficiaries of any such person, who is
not a Key Employee.
19.01(8) "Permissive Aggregation Group" means the Required Aggregation Group,
plus any other plan or plans of any Affiliated Company selected by the Company,
provided that such selected plans, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of Code Sections
401(a)(4) and 410.
19.01(9) "Required Aggregation Group" means the group of plans consisting of:
(i) all tax qualified plans maintained by the Employers or Affiliated Companies
in which at least one Key Employee participates in the Plan Year containing the
Determination Date, or any of the four (4) preceding Plan Years, and (ii) any
other tax qualified plan maintained by the Employers or Affiliated Companies
which enables a plan described in clause (i) to meet the requirements of Code
Section 401(a)(4) or 410.
19.01(10) "Valuation Date" means: (i) in the case of a Defined Contribution
Plan, the last day of the Plan Year for the appropriate plan and (ii) in the
case of a Defined Benefit Plan, the date used for computing plan costs for
minimum funding, regardless of whether a valuation is performed that year.
19.01(11) All of the definitions set forth in ARTICLE 2 and not set forth
herein shall have the same meaning in this ARTICLE.
19.02 Determination of Top Heaviness.
19.02(1) This Plan shall be a "Top Heavy Plan" with respect to any Plan Year
if, as of the Determination Date for said Plan Year, any of the following
conditions exists:
(a) The Top Heavy Ratio for this Plan exceeds sixty percent (60%), and this
Plan is part of a Required Aggregation Group or a Permissive Aggregation Group.
(b) This Plan is part of a Required Aggregation Group, but not part of a
Permissive Aggregation Group, and the Top Heavy Ratio for the Required
Aggregation Group exceeds sixty percent (60%).
(c) This Plan is part of a Required Aggregation Group and part of a Permissive
Aggregation Group, and the Top Heavy Ratio for the Permissive Aggregation Group
exceeds sixty percent (60%).
19.02(2) This Plan shall be a "Super Top Heavy Plan" if it would be a Top Heavy
Plan under the provisions of SUBSECTION 19.02(1) if "ninety percent (90%)" were
substituted for "sixty percent (60%)" everywhere sixty percent (60%) appears in
said SUBSECTION 19.02(1).
19.02(3) The "Top Heavy Ratio" referred to in SUBSECTION 19.02(1) shall be
determined as follows:
(a) If the Employers or Affiliated Companies maintain or have maintained one or
more Defined Contribution Plans but have never maintained a Defined Benefit Plan
which has covered or could cover a Participant in this Plan, the Top Heavy Ratio
is a fraction, the numerator of which is the sum of the account balances under
the Defined Contribution Plans for all Key Employees as of the Determination
Date (including any part of any such account balance distributed in the five (5)
year period ending on the Determination Date), and the denominator of which is
the sum of all account balances under the Defined Contribution Plans for all
participants as of the Determination Date (including any part of any such
account balance distributed in the five (5) year period ending on the
Determination Date). Both the numerator and the denominator of the Top Heavy
Ratio shall be adjusted to reflect any contribution which is due but unpaid as
of the appropriate Determination Date. In determining the account balances
which have been distributed in the five (5) year period ending on the
Determination Date, distributions under a terminated plan shall be included,
provided such terminated plan, if it had not been terminated, would have been
included in a Required Aggregation Group.
(b) If the Employers or Affiliated Companies maintain one or more Defined
Contribution Plans and maintain or have maintained one or more Defined Benefit
Plans which have covered or could cover a Participant in this Plan, the Top
Heavy Ratio is a fraction, the numerator of which is the sum of account balances
under the Defined Contribution Plans for all Key Employees and the present value
of accrued benefits under the Defined Benefit Plans for all Key Employees, both
calculated as of the Determination Date, and the denominator of which is the sum
of the account balances under the Defined Contribution Plans for all
participants and the present value of accrued benefits under the Defined Benefit
Plans for all participants, both calculated as of the Determination Date. Both
the numerator and denominator of the Top Heavy Ratio are adjusted for any
distribution of an account balance or an accrued benefit made in the five (5)
year period ending on the appropriate Determination Date and any contribution
due but unpaid as of the appropriate Determination Date. In determining the
account balances or accrued benefits which have been distributed in the five (5)
year period ending on the Determination Date, distributions under a terminated
plan shall be included provided such terminated plan, if it had not been
terminated, would have been included in a Required Aggregation Group.
(c) For purposes of SUBSECTIONS 19.02(3)(A) and (B), the value of account
balances and the present value of accrued benefits shall be determined as of the
most recent Valuation Date that falls within or ends with the twelve (12) month
period ending on the Determination Date. The present value of accrued benefits
under Defined Benefit Plans shall be determined using the single accrual method
used for all plans of the Employers and Affiliated Companies, or if no such
single method exists, using a method which results in benefits accruing not more
rapidly than the slowest accrual rate permitted under Code Section 411(b)(1)(C)
as of said Valuation Date as if the person voluntarily terminated employment as
of such Valuation Date. For Plan Years beginning prior to January 1, 1987, the
present value of accrued benefits shall be determined under the provisions of
the applicable Defined Benefit Plan without regard to the preceding sentence.
If any Participant was a Key Employee as set forth in SUBSECTION 19.01(4) for
any prior Plan Year, but such Participant ceases to be a Key Employee for any
Plan Year, such Participant's account balances and accrued benefits shall not be
taken into account for purposes of determining whether or not this Plan is a Top
Heavy Plan or a Super Top Heavy Plan as of the Determination Date of said Plan
Year. Accounts and accrued benefits shall be calculated to include all amounts
attributable to both contributions by an Affiliated Company and contributions by
persons employed by an Affiliated Company, but shall exclude amounts
attributable to voluntary deductible contributions by said persons. The
calculation of the Top Heavy Ratios, and the extent to which distributions,
rollovers and transfers are taken into account shall be made in accordance with
Code Section 416 and the regulations thereunder. When aggregating plans for
purposes of an Aggregation Group, the value of account balances and accrued
benefits will be calculated with reference to the Determination Dates that fall
within the same calendar year. Notwithstanding the provisions of SUBSECTIONS
19.02(3)(A) and (B), in determining the fractions referred to therein, there
shall not be taken into account the accrued benefits or account balances of any
person who has not performed services for any Affiliated Company maintaining any
Defined Contribution Plan or Defined Benefit Plan referred to in such
SUBSECTIONS at any time during the five (5) year period ending on the
Determination Date.
19.03 Minimum Requirements. Notwithstanding any other provision of this Plan
to the contrary, if the Plan is a Top Heavy Plan for any Plan Year, then the
following provisions shall apply:
19.03(1) Vesting. Any Participant who is credited with an Hour of Service in
the first Plan Year in which the Plan is a Top Heavy Plan, or in any subsequent
Plan Year after such first Plan Year (whether or not the Plan is a Top Heavy
Plan in such subsequent Plan Year) shall have his percentage of vested benefits
owing upon a Termination of Employment determined pursuant to the following
schedule, in lieu of the schedule set forth in SECTION 10.01:
Vesting Years of Service . Percentage
Less than 2 years . . . . . . 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more . . . . . . . 100%
Notwithstanding the foregoing, for Participants hired before January 1, 1989,
their vested percentage shall be one percent (1%) rather than zero percent (0%)
prior to being credited with two (2) Vesting Years of Service.
19.03(2) Required Minimum Allocation of Contributions. Except as otherwise
provided in this ARTICLE 19 and notwithstanding any other provision of this Plan
to the contrary, for any Plan Year in which the Plan is a Top Heavy Plan, the
Matching Contributions allocated on behalf of each Participant who is a Non-Key
Employee shall not be less than the lesser of: (i) three percent (3%) of such
Participant's Limitation Year Compensation or (ii) the largest percentage of
Matching Contributions as a percentage of the Key Employee Participant's
Compensation, allocated on behalf of any Key Employee Participant for that Plan
Year; provided, however, that the provisions of clause (ii) shall not apply to
any plan included in a Required Aggregation Group if such plan enables a Defined
Benefit Plan included in such Required Aggregation Group to meet the
requirements of Code Section 401(a)(4) or 410. The minimum allocation provided
for herein shall be determined without taking into account contributions or
benefits under Code Chapter 21 (relating to the Federal Insurance Contributions
Act), Title II of the Social Security Act or any other federal or state law, and
shall be made without regard to any contrary provisions of the Plan regarding
the allocation of Matching Contributions to affected Participants which might
otherwise result in such Participant being entitled to no allocation or a lesser
allocation due to the Participant's failure to complete one thousand (1,000)
Hours of Service (or the equivalent) during the Plan Year, the Participant's
failure to make mandatory employee contributions or the Participant's failure to
earn a stated amount of Compensation; provided, however, that such minimum
allocation shall not be required to be made on behalf of any Participant who is
not actively employed by an Employer on the last day of the applicable Plan
Year. For purposes of this SECTION 19.03, all Defined Contribution Plans
required to be included in an Aggregation Group shall be treated as one plan.
Pre-Tax Contributions on behalf of Key Employee Participants are taken into
account in determining the minimum contribution under this SUBSECTION. On the
other hand, Pre-Tax Contributions on behalf of Non-Key Employees may not be
treated as a Matching Contribution for purposes of the minimum contribution or
benefit requirement of Code Section 416.
19.04 Minimum Benefits for Employers or Affiliated Companies Maintaining
Defined Benefit Plans. If any Participant who is a Non-Key Employee is also a
participant under a Defined Benefit Plan maintained by an Affiliated Company
which is also a Top Heavy Plan, then SUBSECTION 19.03(2) shall not apply, and
such Participant shall receive an allocation of Matching Contributions in an
amount no less than five percent (5%) of such Participant's Compensation under
the Plan for the applicable Plan Year. Such allocation shall be made without
regard to the amount allocated under the Plan on behalf of any Key Employee
Participant for such Plan Year. For purposes of this SECTION 19.04, all Defined
Contribution Plans required to be included in a Required Aggregation Group shall
be treated as one plan.
19.05 Super Top Heavy Plans. If in any Plan Year in which the Plan is a Top
Heavy Plan: (i) it is also a Super Top Heavy Plan or (ii) it does not provide
minimum benefits under SUBSECTION 19.03(2) after substituting "four percent
(4%)" for "three percent (3%)" contained in clause (i) of the first sentence of
said SUBSECTION or (iii) if SECTION 19.04 applies, it does not provide minimum
benefits under SECTION 19.04 after substituting "seven and one-half percent (7
%)" for "five percent (5%)" contained in the first sentence of said SECTION,
then, in any such event, for purposes of the definitions set forth in
SUBSECTIONS 5.09(3) and 5.09(5), the dollar limitations contained in Code
Sections 415(e)(2)(B) and 415(e)(3)(B) shall be multiplied by 1.0 rather than
1.25. Notwithstanding the foregoing provisions of this SECTION 19.05, if the
application of said provisions would cause any individual to exceed the combined
limits of SECTION 5.06, if applicable, then the requirements of this SECTION
19.05 shall be suspended as to such individual until such time as he no longer
exceeds the limitations of SECTION 5.06 as modified by this SECTION 19.05, and
during the period of such suspension, said individual shall receive no
allocation of Matching Contributions and shall not be entitled to make Pre-Tax
Contributions under this Plan or any other Defined Contribution Plan maintained
by an Affiliated Company, and there shall be no accruals of benefits for such
individual under any Defined Benefit Plan maintained by an Affiliated Company.
ARTICLE 20 - MISCELLANEOUS
20.01 Effect of Bankruptcy and Other Contingencies Affecting an Employer.
Neither the bankruptcy, receivership, insolvency, liquidation, dissolution,
merger, consolidation or reorganization of an Employer, or any other eventuality
affecting the Employer, shall terminate the Trust or render ineffectual this
Plan or discharge any Employer from any liabilities to the Trust for which it
shall already have become obligated, but the same shall continue in full force
and effect as though such eventuality had not occurred; however, the Plan
Administrator shall in such event be authorized hereby to make any and all rules
and regulations not inconsistent with the purposes of the Plan as shall be
necessary to deal with such change in the situation of the Plan and Trust.
20.02 Benefits Payable by Trust. All benefits payable under the Plan shall be
paid or provided for solely from the Trust Fund. No Employer assumes any
liability or responsibility therefor.
20.03 Withholding. The Plan Administrator shall determine whether or not
federal income tax withholding is required with respect to any distribution or
withdrawal hereunder, shall direct the Trustee to withhold any amounts required
by law to be withheld, and shall furnish the Trustee with any information
required by Treasury Regulations regarding withholding. Notwithstanding any
other provision of this Plan to the contrary, all rights and benefits of a
Participant, Beneficiary, or Alternate Payee are subject to withholding of any
tax required by law to be withheld.
20.04 Provisions Hereof for Sole Benefit of Parties Hereto and Participants.
All of the covenants, stipulations, and agreements contained in this Plan are
and shall be for the sole and exclusive benefit of and binding upon the parties
hereto, their successors and assigns, and the Participants and their
Beneficiaries.
20.5 Article and Section Headings. The titles or headings of the respective
Articles and Sections in this Plan are inserted merely for convenience and shall
be given no legal effect.
20.06 Formal Action by Employer. Any formal action herein permitted or
required to be taken by an Employer shall be:
20.06(1) if and when a partnership, by written instrument executed by one or
more of its general partners or by written instrument executed by a person or
group of persons who has been authorized by written instrument executed by one
or more general partners as having authority to take such action;
20.06(2) if and when a proprietorship, by written instrument executed by the
proprietor or by written instrument executed by a person or group of persons who
has been authorized by written instrument executed by the proprietor as having
authority to take such action;
20.06(3) if and when a corporation, by resolution of its board of directors or
other governing board, or by written instrument executed by a person or group of
persons who has been authorized by resolution of its board of directors or other
governing board as having authority to take such action; or
20.06(4) if and when a joint venture, by written instrument executed by one of
the joint venturers or by written instrument executed by a person or group of
persons who has been authorized by written instrument executed by one of the
joint venturers as having authority to take such action.
20.07 APPLICABLE LAW. THIS PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
TEXAS TO THE EXTENT NOT PREEMPTED BY APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, CLUBCORP INTERNATIONAL, INC. has caused this Plan to be
executed by its duly authorized representative this 30th day of December, 1998.
CLUBCORP INTERNATIONAL, INC.
By: /s/Xxxxxx X. Xxxx, III
Title: Executive Vice President
