Exhibit 4.1
ADVANCED DRAINAGE SYSTEMS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated Effective April 1, 2015)
Incorporating Amendments through May 30, 2019
ADVANCED DRAINAGE SYSTEMS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated Effective April 1, 2015)
Table of Contents
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| Page Number |
DEFINITIONS | 2 | |
1.1 | Definitions | 2 |
1.2 | Acquisition Loan | 2 |
1.3 | Bargaining Unit | 2 |
1.4 | Beneficiary | 2 |
1.5 | Board of Directors | 2 |
1.6 | Break in Service | 2 |
1.7 | Code | 2 |
1.8 | Committee | 2 |
1.9 | Company | 2 |
1.1 | Company Stock | 2 |
1.11 | Compensation | 3 |
1.12 | Controlled Group Member | 4 |
1.13 | Eligible Employee | 4 |
1.14 | Employee | 4 |
1.15 | Employer | 6 |
1.16 | Employer ESOP Contribution | 6 |
1.17 | Employment Commencement Date | 6 |
1.18 | ERISA | 6 |
1.19 | ESOP Account or “Account” | 6 |
1.20 | Financed Shares | 6 |
1.21 | Forfeitures | 7 |
1.22 | Highly Compensated Employee | 7 |
1.23 | Hour of Service | 7 |
1.24 | Loan Suspense Account | 8 |
1.25 | Normal Retirement Age | 9 |
1.26 | Participant | 9 |
1.27 | [Reserved] | 9 |
1.28 | Period of Service | 9 |
1.29 | Period of Severance | 9 |
1.30 | Plan | 9 |
1.31 | Plan Administrator | 9 |
Table of Contents
(continued)
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Plan Year | 9 | |
1.33 | Profit Sharing Plan | 9 |
1.34 | Reemployment Commencement Date | 9 |
1.35 | Severance from Service Date | 9 |
1.36 | Spouse | 10 |
1.37 | Suspended Participant | 10 |
1.38 | Termination Date | 10 |
1.39 | Total and Permanent Disability | 10 |
1.40 | Trust Agreement and Trust | 10 |
1.41 | Trustee | 11 |
1.42 | Trust Fund | 11 |
1.43 | Valuation Date | 11 |
1.44 | Year of Service | 11 |
1.45 | Special Dividend | 11 |
ARTICLE II | ELIGIBILITY AND PARTICIPATION | 12 |
2.1 | Eligibility and Participation | 12 |
2.2 | Termination and Rehiring | 12 |
2.3 | Duration of Participation | 13 |
2.4 | Special Eligibility and Vesting Rules | 13 |
2.5 | Special Eligibility and Vesting Rules for Employees of Hancor, Inc | 13 |
2.6 | Special Eligibility and Vesting Rules for Employees of ADS Ventures, Inc | 13 |
ARTICLE III | CONTRIBUTIONS | 14 |
3.1 | Employer ESOP Contributions | 14 |
3.2 | Acquisition Loans | 14 |
3.3 | No Participant Contributions | 17 |
3.4 | Reversion of Employer Contributions | 17 |
ARTICLE IV | ALLOCATIONS, ACCOUNTING AND ADJUSTMENTS | 19 |
4.1 | Participants’ ESOP Accounts | 19 |
4.2 | Adjustment of ESOP Stock Accounts | 19 |
4.3 | Adjustment of ESOP Cash Accounts | 19 |
4.4 | Adjustment of Profit Sharing Accounts | 20 |
4.5 | Allocation and Crediting of Employer ESOP Contributions and Forfeitures | 20 |
4.6 | Limitation on Allocations to Participants | 23 |
4.7 | Statement of Plan Interest | 25 |
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Table of Contents
(continued)
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Page Number |
Omission of Eligible Employee | 25 | |
4.9 | Inclusion of Ineligible Employee | 25 |
ARTICLE V | VESTING | 26 |
5.1 | Full Vesting | 26 |
5.2 | Partially Vested Benefits | 26 |
5.3 | Termination of Employment and Forfeitures | 27 |
5.4 | Vesting After Break in Service | 28 |
5.5 | Deemed Distributions | 28 |
ARTICLE VI | TIME AND METHOD OF PAYMENT | 30 |
6.1 | Form of Distribution | 30 |
6.2 | Time for Distribution | 31 |
6.3 | Facility of Payment; Missing Payees | 33 |
6.4 | Absence of Guaranty | 33 |
6.5 | Designation of Beneficiary | 33 |
6.6 | Qualified Domestic Relations Order | 34 |
6.7 | Pre-Retirement Diversification Rights | 36 |
6.8 | Direct Rollovers | 38 |
6.9 | Minimum Distribution Requirements | 39 |
ARTICLE VII | VOTING AND TENDERING OF COMPANY STOCK | 46 |
7.1 | Voting | 46 |
ARTICLE VIII | RIGHTS, RESTRICTIONS AND OPTIONS ON COMPANY STOCK | 48 |
8.1 | Right of First Refusal | 48 |
8.2 | Put Option | 48 |
8.3 | Share Legend | 49 |
8.4 | Nonterminable Rights | 49 |
ARTICLE IX | DIVIDENDS | 50 |
9.1 | Dividends Credited to ESOP Cash Accounts | 50 |
9.2 | Dividends Paid to Participants | 50 |
9.3 | Dividends Used to Repay Acquisition Loan | 50 |
9.4 | Article IX Priority | 51 |
ARTICLE X | ADMINISTRATION OF PLAN | 52 |
10.1 | Named Fiduciaries | 52 |
10.2 | Membership and Authority | 52 |
10.3 | Delegation by Committee | 53 |
10.4 | Uniform Rules | 54 |
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Table of Contents
(continued)
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Page Number |
Information to Be Furnished to Committee | 54 | |
10.6 | Committee’s Decision Final | 54 |
10.7 | Exercise of Committee’s Duties | 54 |
10.8 | Remuneration and Expenses | 55 |
10.9 | Resignation or Removal of Committee Member | 55 |
10.10 | Appointment of Successor Committee Members | 55 |
10.11 | Interested Committee Member | 55 |
10.12 | Records | 55 |
10.13 | Claims Procedure | 55 |
10.14 | Formal Review | 57 |
ARTICLE XI | AMENDMENT AND TERMINATION | 61 |
11.1 | Termination | 61 |
11.2 | Right to Amend, Modify, Change or Revise Plan | 61 |
11.3 | Merger and Consolidation of Plan, Transfer of Plan Assets | 61 |
11.4 | Vesting and Distribution on Termination and Partial Termination | 62 |
ARTICLE XII | TOP-HEAVY PROVISIONS | 63 |
12.1 | Applicability | 63 |
12.2 | Top-Heavy Definitions | 63 |
12.3 | Minimum Employer Contributions | 64 |
12.4 | Adjustments to Code Section 415 Limitations | 65 |
12.5 | Minimum Vesting Requirement | 65 |
12.6 | Coordination with Other Plans | 65 |
ARTICLE XIII | MISCELLANEOUS | 67 |
13.1 | Adoption of the Plan by Other Employers | 67 |
13.2 | No Contract of Employment | 67 |
13.3 | Restrictions upon Assignments and Creditor’s Claims | 67 |
13.4 | Restriction of Claims Against Trust | 68 |
13.5 | Benefits Payable by Trust | 68 |
13.6 | Successor to Plan | 68 |
13.7 | Applicable Laws | 68 |
13.8 | Illegality of Particular Provision | 68 |
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Table of Contents
(continued)
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| Page Number |
13.9 | Notices | 68 |
13.10 | Evidence | 68 |
13.11
| Contributions Are for Exclusive Benefit of Participants and Beneficiaries | 68 |
13.12 | Provisions with Respect to Uniformed Services Employment and Reemployment Rights Act of 1994 | 68 |
ARTICLE XIV | INDEPENDENT FIDUCIARY | 70 |
14.1 | Appointment of Special Fiduciary | 70 |
14.2 | Special Fiduciary Trustee Direction | 70 |
14.3 | Special Fiduciary Indemnification | 70 |
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EXECUTION |
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Composite
ADVANCED DRAINAGE SYSTEMS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated Effective April 1, 2015)
Advanced Drainage Systems, Inc. (the “Company”) hereby amends and completely restates the Advanced Drainage Systems, Inc. Employee Stock Ownership Plan (the “Plan”) effective, except as otherwise indicated, April 1, 2015 (the “Effective Date”). The Plan was originally effective April 1, 1993. The Plan is designed to invest primarily in Company Stock and is intended to meet the applicable requirements of Section 401(a), 409 and 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the “Code”).
The Plan as amended and restated, effective April 1, 2015, hereby incorporates all amendments to the April 1, 2010 amendment and restatement of the Plan (that was executed on December 3, 2013) from 2010 through 2014. The Plan is maintained for the exclusive benefit of Eligible Employees, former Employees, and their Beneficiaries. The provisions of this amended and restated Plan document apply only to Employees who retire, die or otherwise terminate their employment on or after April 1, 2015. Employees who retired, died or otherwise terminated their employment prior to April 1, 2015 shall have their interest determined under the provisions of the Plan in effect at that time.
DEFINITIONS
1.4 | Beneficiary. The term “Beneficiary” as used in the Plan means the person or persons to whom a deceased Participant’s benefits are payable under Section 6.5. |
1.6 | Break in Service. The term “Break in Service” means a Plan Year (or other applicable period) during which an Employee fails to complete more than 500 Hours of Service. |
1.8 | Committee. The persons to whom the Company has delegated its administrative duties as Plan Administrator pursuant to Article X of the Plan. |
1.9 | Company. The term “Company” means Advanced Drainage Systems, Inc., a C corporation within the meaning of Code Section 1361(a)(2). |
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| (a) | that class of common stock of the Company or a Controlled Group Member having the greatest voting power, and |
| (b) | that class of common stock of the Company or a Controlled Group Member having the greatest dividend rights. |
Non-callable preferred stock shall be treated as Company Stock if such stock is convertible at any time into stock which meets the requirements of (a) and (b) next above and if such conversion is at a conversion price which (as of the date of the acquisition by the Plan) is reasonable. For purposes of the last preceding sentence, preferred stock shall be treated as non-callable if, after the call, there will be a reasonable opportunity for a conversion which meets the requirements of the last preceding sentence. If the proceeds from an Acquisition Loan that is subject to the provisions of Section 133 of the Code are used to acquire preferred shares of Company Stock, then such preferred shares must have voting rights equivalent to the common stock into which they may be converted.
The annual Compensation of each Employee taken into account under the Plan shall not exceed the dollar amount specified in Code Section 401(a)(17)(A), currently $265,000 as of the Effective Date, as adjusted for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which Compensation is determined (the “determination period”) beginning in such calendar year. If a determination period consists of fewer than 12 months, the annual Compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.
For purposes of the limitation on allocations under Section 415 of the Code, Compensation is further defined in Section 4.6 of the Plan.
Notwithstanding the foregoing, effective March 1, 2005, for purposes of contributions and allocations pursuant to the Plan (including, but not limited to, Sections 3.1, 4.5 and 9.3 of the Plan), Compensation excludes (i) income described in Code Sections 931(a)(1) and (2) from sources within a “specified possession” as defined in Code Section 931(c); (ii) income described in Code Section 932(a)(1)(A)(ii) from sources within the Virgin Islands; and (iii) income described in Code Sections 933(1) and (2) from sources within Puerto Rico.
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Effective for limitation years beginning on or after July 1, 2007, payments made by the later of 2 ½ months after severance from employment or the end of the limitation year that includes the severance from employment will be Compensation if they are payments that, absent a severance from employment, would have been paid to the Participant while the Participant continued in employment with the Employer and are regular compensation for services during the Participant’s regular working hours, compensation for services outside the Participant’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar compensation. Any payments not described above are not considered Compensation if paid after severance from employment, even if they are paid within 2 ½ months following severance from employment, except for payments to an individual who does not currently perform services for the Employer by reason of qualified military service (within the meaning of Code Section 414(u)(1)) to the extent these payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service.
Notwithstanding the foregoing, (i) for the purposes of the contribution and allocation of Employer contributions pursuant to the Plan for the Plan Year ending March 31, 2010, the Compensation of a Participant who is an Employee of ADS Ventures, Inc. includes his Compensation received during the period from March 1, 2010, through March 31, 2010; and (ii) for the purposes of the contribution and allocation of Employer contributions pursuant to the Plan for the Plan Year ending March 31, 2011, the Compensation of a Participant who is an Employee of ADS Ventures, Inc. includes his Compensation received during the period from April 1, 2010, through December 31, 2010.
1.13 | Eligible Employee. An Employee of an Employer who is eligible to participate in the Plan in accordance with Article II. |
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| (b) | Exclusion of Independent Contractors. No individual who is deemed to be an independent contractor, as determined by the Plan Administrator in its sole discretion, or individual performing services for the Employer pursuant to an agreement that provides that such individual shall not be eligible to participate in the retirement or other benefit plans of the Employer, shall be considered to be employed in Covered Employment for purposes of the Plan, irrespective of whether such individual is or is not an Employee. |
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| designating such person as an Employee of the Employer who is no longer a reclassified employee. |
1.17 | Employment Commencement Date. The date on which an Employee first performs an Hour of Service for the Employer or any other member of the Controlled Group. |
The ESOP Stock Account is that separate subaccount which is maintained for each Participant to which are allocated any Employer ESOP Contributions made in Company Stock, his allocable share of released Financed Shares, his allocable share of Company Stock Forfeitures and any Company Stock attributable to earnings on such stock (such as stock dividends).
The Profit Sharing Account is that separate subaccount which is maintained for each Participant who was a participant in the Profit Sharing Plan, which account will reflect the assets transferred from his accounts in the Profit Sharing Plan, his share of Company Stock purchased with assets transferred from his accounts in the Profit Sharing Plan, and any Company Stock attributable to earnings on such stock (such as stock dividends). The Profit Sharing Account is fully vested at all times.
The ESOP Cash Account is that separate subaccount which is maintained for each Participant to which are allocated any ESOP Contributions made in cash, cash transferred from the Profit Sharing Plan, any cash dividends on Company Stock allocated and credited to his ESOP Stock Account (other than dividends that are currently distributable or that are reinvested in Company Stock), his allocable share of cash Forfeitures and any income, gains, losses, appreciation or depreciation attributable thereto.
The Stock Forfeiture Account is that separate subaccount which is maintained for each Participant who has terminated employment to which is allocated any nonvested portion of his ESOP Stock Account that is forfeited under Section 5.3.
The Cash Forfeiture Account is that separate subaccount which is maintained for each Participant who has terminated employment to which is allocated any nonvested portion of his ESOP Cash Account that is forfeited under Section 5.3.
1.20 | Financed Shares. Shares of Company Stock acquired by the Trustee with the proceeds of an Acquisition Loan shall be described as “Financed Shares.” |
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1.21 | Forfeitures. The non-vested portion of a Participant’s ESOP Account which he forfeits as provided in Section 5.3. |
1.22 | Highly Compensated Employee. The term means a highly compensated active Employee or a highly compensated former Employee. |
| (a) | A highly compensated active Employee means any Employee who performs services for the Employer during the determination year and who: |
| (i) | during the look-back year received Compensation (as defined in Section 4.6) in excess of $120,000 (such dollar limitation shall be adjusted automatically in accordance with the maximum amount permitted under Code Section 414(q)); or |
| (ii) | was a five-percent owner at any time during the look-back year or determination year; and |
| (iii) | was a member of the top-paid group for such year. |
| (b) | A highly compensated former Employee means any Employee who separated from service (or was deemed to have separated) prior to the determination year, performs no services for the Employer during the determination year, and was a highly compensated active Employee for either the separation year or any determination year ending on or after the Employee’s 55th birthday. |
| (c) | For this purpose, the determination year shall be the Plan Year. The look-back year shall be the twelve-month period immediately preceding the determination year. |
| (d) | The determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the top-paid group and the Compensation that is considered, will be made in accordance with Code Section 414(q) and the regulations thereunder. |
| (a) | Each hour (1) for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer or other member of the Controlled Group, if applicable, for the performance of duties during the applicable computation period; (2) for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer or other member of the Controlled Group, if applicable, (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence) during the applicable computation period; and (3) for which back pay is awarded or agreed to by the Employer or other member of the Controlled Group, if applicable, without regard to mitigation of damages (provided that the same Hours of Service shall not be credited under both this item (3) and items (1) or (2) above). |
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Notwithstanding the above, (1) no more than 501 Hours of Service are required to be credited to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period); (2) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed, is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker’s compensation, unemployment compensation or disability insurance laws; and (3) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or due from the Employer or other member of the Controlled Group, if applicable, regardless of whether such payment is made by or due from the Employer or other member of the Controlled Group, if applicable, directly or indirectly through, among others, a trust fund, or insurer, to which the Employer or other member of the Controlled Group, if applicable, contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate.
The provisions of Department of Labor regulations Sections 2530.200b-2(b) and (c) are incorporated herein by reference.
Notwithstanding the above, an Employee for whom records of his actual number of Hours of Service are not normally maintained shall be credited with ten Hours of Service for each day he would be required to be credited with at least one Hour of Service as defined herein.
| (b) | Solely for the purpose of determining whether a Participant has incurred a Break in Service or a Period of Severance, Hours of Service shall be recognized for “maternity and paternity leave of absence” as specified herein. A “maternity and paternity leave of absence” means an absence from work for any period by reason of the Participant’s pregnancy, birth of the Participant’s child, placement of a child with the Participant in connection with the adoption of such child, or any absence for the purpose of caring for such child for a period immediately following such birth or placement. For this purpose, Hours of Service shall be credited for the computation period in which the absence from work begins, only if credit therefor is necessary to prevent the Participant from incurring a one-year Break in Service, or, in any other case, in the immediately following computation period. The Hours of Service credited for a “maternity or paternity leave of absence” shall be those which would normally have been credited but for such absence, or, in any case in which the Plan Administrator is unable to determine such hours normally credited, eight Hours of Service per day. The total Hours of Service required to be credited for a “maternity or paternity leave of absence” shall not exceed 501. |
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1.29 | Period of Severance. The period of time commencing on an Employee’s Severance from Service Date and ending on his Reemployment Commencement Date. |
1.31 | Plan Administrator. “Plan Administrator” means the Company, which shall serve pursuant to the provisions of Article X. |
1.35 | Severance from Service Date. The “Severance from Service Date” is the earlier of the following dates: |
| (a) | the date on which a Participant retires, dies or terminates employment (provided, however, that employment shall not be deemed to have terminated upon (i) employment by another Employer or other Controlled Group Member, or (ii) a termination of employment if the Employee is reemployed by an Employer prior to the one-year anniversary of his Severance from Service Date); or |
| (b) | the first anniversary of the first day of a period in which an Employee remains absent from service (with or without pay) with the Employer for any reason other than those listed in (a) above (such as vacation, holiday, sickness, disability, leave of absence, layoff or a “maternity/paternity leave of absence,” as defined in Section 1.23(b). |
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| (a) | Normal or Late Retirement. The Participant retires or is retired, as permitted by applicable law, from the employ of the Employers and the Controlled Group Members on or after the date on which he attains Normal Retirement Age. |
| (b) | Total and Permanent Disability. The Participant’s employment is terminated by reason of his Total and Permanent Disability. |
| (c) | Death. The Participant’s death. |
| (d) | Resignation or Dismissal. The Participant resigns or is dismissed from the employ of the Employers and the Controlled Group Members before retirement (in accordance with paragraph (a) or (b) above). |
1.40 | Trust Agreement and Trust. The Trust Agreement establishing the Advanced Drainage Systems, Inc. Employee Stock Ownership Trust, as amended from time to time, and the Trust established thereunder. |
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1.41 | Trustee. The person or financial institution appointed by the Company to act as Trustee of the Trust pursuant to the Trust Agreement. |
1.42 | Trust Fund. All cash, securities, real estate, or any other property held by the Trustee pursuant to the terms of the Trust Agreement, together with the income therefrom. |
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ELIGIBILITY AND PARTICIPATION
| (a) | Each Employee shall become an Eligible Employee on the date that coincides with his attainment of age 18 and completion of a six-month Period of Service. Each Eligible Employee shall become a Participant in the Plan on the Valuation Date which coincides with or next follows the date on which he becomes an Eligible Employee. |
| (b) | [Reserved] |
| (c) | Transfers. Any ineligible Employee who ceases to be an ineligible Employee (including by reason of a transfer to the employ of a Controlled Group Member which is an Employer hereunder) shall become a Participant as follows: (i) if the Employee has completed the eligibility requirements of this Section, then he shall become a Participant on the day he becomes an Eligible Employee; and (ii) if the Employee has not completed the eligibility requirements of this Section, then he shall become a Participant on the day he becomes an Eligible Employee provided he has not separated from service prior to such date. An Eligible Employee who becomes an ineligible Employee (including by reason of a transfer to the employ of a member of the Controlled Group which is not an Employer hereunder) shall be treated as if he had terminated his employment with the Employer on the date that he becomes an ineligible Employee for purposes of sharing in further contributions under the Plan, but he shall continue to be credited with Hours of Service for vesting purposes for his service as an ineligible Employee. |
| (d) | Notwithstanding the provisions of subsections (a) and (c), no Employee who is prohibited by Code Section 409(n) from receiving an allocation of Company Stock shall be eligible to be a Participant in the Plan. |
| (a) | A Participant who terminates employment and who is subsequently rehired shall be eligible to again participate on his Reemployment Commencement Date. |
| (b) | An Eligible Employee who terminates employment after meeting the eligibility requirements of Section 2.1 but before becoming a Participant and who is subsequently rehired shall be eligible to again participate on the Valuation Date following his Reemployment Commencement Date. |
| (c) | An Employee who terminates employment before meeting the eligibility requirements of Section 2.1 and who is reemployed prior to incurring a one year Period of Severance shall have his Period of Severance counted as a Period of Service for determining his eligibility to participate. |
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CONTRIBUTIONS
| (a) | the maximum amount deductible by that Employer as an expense for Federal income tax purposes; or |
| (b) | the maximum amount which, together with the amount of the Employer’s ESOP Contributions which are to be credited to the ESOP Accounts of Participants from a Loan Suspense Account for that Plan Year, can be credited for that year in accordance with the contribution limitation provisions of Section 4.5. |
An Employer’s ESOP Contribution under this Section 3.1 for any Plan Year shall be due on the last day of the Plan Year and, if not paid by the end of that year, shall be payable to the Trustee as soon thereafter as practicable, but not later than the time prescribed for filing the Employer’s Federal income tax return for the Employer’s fiscal year within which ends such Plan Year, including any extensions of time, without interest, provided, however, that in no event will the contribution be made later than the due date of any indebtedness under the Acquisition Loan for that Plan Year.
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transferred upon default only upon and to the extent of the failure of the Plan to meet the repayment schedule of the Acquisition Loan. |
| (a) | Financed Shares. Except as provided in Section 409(l) of the Code or Treasury Regulation Section 54.4975-7(b)(9) and (10), or as otherwise provided by applicable law, no Financed Shares acquired by the Trustee with the proceeds of an Acquisition 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. |
| (b) | Collateral. An Acquisition Loan may be secured by a collateral pledge of the Financed Shares so acquired and any other Plan assets which are a permissible security within the provisions of Treasury Regulation Section 54.4975-7(b). No other assets of the Plan or Trust may be pledged as collateral for an Acquisition Loan, and no lender shall have recourse against any other Plan assets. |
| (c) | Loan Payment. Repayment of principal and interest on any Acquisition Loan shall be made by the Trustee from annual Employer ESOP Contributions made pursuant to Section 3.1 above and may also be made from the following sources pursuant to the provisions of Section 9.3: |
| (i) | Cash dividends on Financed Shares, which are allocated to Participants’ ESOP Stock Accounts and earnings, if any, on such dividends; and |
| (ii) | Cash dividends on Company Stock held in the Loan Suspense Account and earnings, if any, thereon. |
Payments shall be applied first to pay interest, and then to pay principal obligations under the Acquisition Loan.
| (d) | Release of Financed Shares. Financed Shares shall initially be credited to a Loan Suspense Account and shall be transferred for allocation to the ESOP Stock Accounts of Participants as payments of principal and interest are made on the Acquisition Loan by the Trustee, and any pledge of Financed Shares must provide for the release of shares so pledged on a consistent basis. |
The number of Financed Shares to be released from the Loan Suspense Account for allocation to Participants’ ESOP Stock Accounts as of each Valuation Date shall equal the number of Financed Shares held in the Loan Suspense Account immediately prior to such Valuation Date multiplied by a fraction, the numerator of which is equal to the payments of principal and interest on the Acquisition Loan for the year ending on such date, and the denominator of which is equal to the sum of the numerator plus the total projected payments of principal and interest on the Acquisition Loan over the duration of the Acquisition Loan repayment period, subject to the provisions of Section 4.6.
| (e) | Allocation of Financed Shares. The released Financed Shares shall be allocated to Participants’ ESOP Stock Accounts in accordance with the provisions of Sections 4.5 and 9.3. |
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| (1) | Use of loan proceeds. The proceeds of an Acquisition Loan must be used within a reasonable time after their receipt by the Plan only for any or all of the following purposes: |
| (i) | To acquire Company Stock. |
| (ii) | To repay such loan. |
| (iii) | To repay a prior Acquisition Loan. A new Acquisition Loan, the proceeds of which are so used, must satisfy the provisions of this Section 3.2(f). |
| (2) | Liability and collateral of Plan for loan. An Acquisition Loan must be without recourse against the Plan. Furthermore, the only assets of the Plan that maybe given as collateral on an Acquisition Loan are Company Stock of two classes: those acquired with the proceeds of the loan and those that were used as collateral on a prior Acquisition Loan repaid with the proceeds of the current Acquisition Loan. No person entitled to payment under the Acquisition Loan shall have any right to assets of the Plan other than: |
| (i) | Collateral given for the loan, |
| (ii) | Contributions (other than contributions of Company Stock) that are made under the Plan to meet its obligations under the loan; and |
| (iii) | Earnings attributable to such collateral and the investment of such contributions. |
The payments made with respect to an Acquisition Loan by the Plan during a Plan Year must not exceed an amount equal to the sum of such contributions and earnings received during or prior to the year less such payments in prior years. Such contributions and earnings must be accounted for separately in the books of account of the Plan until the loan is repaid.
| (3) | Suspense Account. All assets acquired by the Plan with the proceeds of an Acquisition Loan under Code Section 4975(d)(3) must be added to and maintained in a suspense account (i.e., the Loan Suspense Account). They are to be withdrawn from the suspense account by applying Treasury Regulation Section 54.4975-7(b)(8) and (15) as if all securities in the suspense account were encumbered. Assets in such suspense accounts are assets of the Plan. Therefore, such assets are subject to Code Section 401(a)(2). |
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| (5) | Continuing loan provisions under Plan. |
| (i) | Creation of protections and rights. The terms of the Plan (i.e., Article VIII) formally provide Participants with certain protections and rights with respect to the Plan assets acquired with the proceeds of an Acquisition Loan. These protections and rights are those referred to the third sentence of Treasury Regulation Section 54.4975-7(b)(4), relating to put, call, or other options and to buy-sell or similar arrangements, and in Treasury Regulation Section 54.4975-7(b)(10), (11), and (12), relating to put options. |
| (ii) | “Nonterminable” protections and rights. The terms of the Plan also formally provide that these protections and rights are nonterminable. If the Plan holds or has distributed Company Stock acquired with the proceeds of an Acquisition Loan and either the loan is repaid or the Plan ceases to be an employee stock ownership plan, these protections and rights continue to exist under the terms of the Plan. However, the protections and rights will not fail to be nonterminable merely because they are not exercisable under Treasury Regulation Section 54.4975-7(b)(11) and (12)(ii). |
| (a) | Employer contributions under the Plan are conditioned upon initial qualification of the Plan under Section 401(a) of the Code for that year, and, if the Plan does not so qualify, the Trustee shall, upon written request of an Employer, return to that Employer any contributions made by that Employer under the Plan conditioned upon initial qualification, reduced by the amount of any losses thereon and increased by the amount of any income thereon and increased by the amount of any income thereon, within one year after the date that qualification of the Plan is denied, but only if an application for qualification is submitted within the time prescribed by law; |
| (b) | if a contribution or any portion thereof is made by an Employer by a mistake of fact, the Trustee shall, upon written request of that Employer, return the |
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| contribution or such portion, reduced by the amount of any losses thereon, to that Employer within one year after the date of payment to the Trustee; |
| (c) | the contributions of each Employer under the Plan are conditioned upon the deductibility thereof under Section 404 of the Code, and, to the extent any such deduction is disallowed, the Trustee shall, upon written request of that Employer, return the amount of the contribution (to the extent disallowed), reduced by the amount of any losses thereon, to that Employer within one year after the date the deduction is disallowed; and |
| (d) | if, upon termination of the Plan with respect to any Employer, any amounts are held in a suspense account which are attributable to the contribution of such Employer, and such amounts may not be credited to the Accounts of Participants, such amounts will be returned to that Employer as soon as practicable after the termination of the Plan with respect to that Employer, to the extent permissible under ERISA. |
The Company may direct the Trustee to make such equitable and practical adjustments as may be necessary to correct any mistake of fact or other error, and to make any other equitable adjustments made necessary because of the existence of circumstances described in the foregoing subsections (a), (b) and (c).
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ALLOCATIONS, ACCOUNTING AND ADJUSTMENTS
| (a) | First, charge to the appropriate ESOP Stock Account of each Participant all distributions and payments made to him, or on his account, since the last preceding Valuation Date that have not been charged previously; |
| (b) | Next, credit to each Participant’s ESOP Stock Account the shares of Company Stock (including the exchange of Company Stock in a Participant’s ESOP Stock Account for cash at the value determined for purposes of the distributions under Section 6.1 in other Participants’ ESOP Cash Accounts, in order for the Trustee to make a distribution to a Participant), if any, that have been purchased with amounts from his ESOP Cash Account since the last preceding Valuation Date, and adjust such accounts in accordance with the provisions of Sections 4.3 and 4.5; and |
| (c) | Finally, allocate and credit to each Participant’s ESOP Stock Account the shares of Company Stock (representing each Employer’s ESOP Contributions made in Company Stock) and Company Stock Forfeitures (to the extent not required for restoration purposes under Section 5.4 of the Plan) that are to be allocated and credited as of that date in accordance with the provisions of Sections 4.3 and 4.5. |
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dividends may be paid to the Participant or reinvested in Company Stock, as described in Article IX. |
As of each Valuation Date, before the allocation of any Employer ESOP Contributions made in cash, as of such date, any appreciation, depreciation, income, gains or losses in the fair market value of the Participants’ ESOP Cash Accounts shall be allocated among and credited to the ESOP Cash Accounts of Participants, pro rata, according to the balance of each ESOP Cash Account as of the immediately preceding Valuation Date, reduced in each case by the amount of any charge to said ESOP Cash Account since the next preceding Valuation Date. In the event of a sale of Company Stock by the Trustee to a third party, any gain or loss realized by the Trustee on the sale of Company Stock will be allocated as follows:
| (a) | in the event of a sale of Company Stock allocated to Participant’s ESOP Stock Accounts, any gain or loss realized by the Trustee on such Company Stock shall be allocated to the ESOP Cash Account of such Participant; |
| (b) | in the event of a sale of Company Stock held in the Loan Suspense Account, pro rata, according to the balance of Participants’ ESOP Stock Accounts. |
For purposes of this Section 4.3, references to a Participant’s ESOP Stock Account shall also include his Stock Forfeiture Account, if any, and references to a Participant’s ESOP Cash Account shall also include his Cash Forfeiture Account, if any.
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completed a Year of Service during the Plan Year and were employed by the Employer on the last day of the Plan Year, as follows: |
| (a) | First, to the extent permitted by the contribution limitation provisions of Section 4.6, such shares shall be allocated among and credited to the ESOP Stock Accounts of such Participants, pro rata, according to the Compensation paid to them, respectively, by that Employer for that year; and |
| (b) | Next, if after the allocation described in paragraph (a) next above, any portion of such shares remain unallocated due to the application of the limitation provisions of Section 4.6, then, to the extent permitted by Section 4.6, such shares and amount shall be allocated and reallocated among and credited to the ESOP Stock Accounts of the remaining Participants entitled to share in such Company Stock for that year, pro rata, according to the Compensation paid to them, respectively, by that Employer for that year until all amounts are allocated or the limitations of Section 4.6 are reached as to each Participant entitled to share in the allocation. |
| (c) | If, after the allocation specified in paragraph (b) next above, due to the limitations of Section 4.6, any portion of such shares to be otherwise allocated remains unallocated, such portion shall be credited to and held in a suspense account, as described in Section 4.6, to the extent that it does not exceed the amount contributed by the Employers for that Plan Year as a result of a reasonable error in estimating Participants’ Compensation or as a result of such other circumstances as the Commissioner of Internal Revenue may determine. For purposes of the Plan, amounts credited to a suspense account for any Plan Year shall be treated as an Employer ESOP Contribution under the provisions of Section 3.1 for the subsequent Plan Year or Plan Years until all amounts so held have been credited to the ESOP Accounts of Participants. |
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| ten years after the date of sale or the date of the allocation attributable to the final payment on the Acquisition Loan incurred with respect to the sale. |
| (e) | Notwithstanding anything herein to the contrary, if the Plan would otherwise fail to meet the requirements of Code Sections 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Treasury Regulations thereunder because Employer contributions have not been allocated to a sufficient number or percentage of Participants for a Plan Year, then the following rules shall apply: |
| (i) | The group of Participants eligible to share in the Employer contributions and Forfeitures for the Plan Year shall be expanded to include the minimum number of Participants, who would not otherwise be eligible, as are necessary to satisfy the applicable test specified above. The specific Participants who shall become eligible under the terms of this paragraph shall be those Participants who are actively employed on the last day of the Plan Year and, when compared to similarly situated Participants, have completed the greatest number of Hours of Service in the Plan Year. |
| (ii) | If after application of paragraph (i) above, the applicable test is still not satisfied, then the group of Participants eligible to share in the Employer Contributions and Forfeitures for the Plan Year shall be further expanded to include the minimum number of Participants who are not actively employed on the last day of the Plan Year as are necessary to satisfy the applicable test. The specific Participants who shall become eligible under the terms of this paragraph shall be those Participants, when compared to similarly situated Participants, who have completed the greatest number of Hours of Service in the Plan Year before terminating employment. |
| (iii) | Nothing in this Section shall permit the reduction of a Participant’s accrued benefit. Therefore, any amounts that have previously been allocated to Participants shall not be reallocated to satisfy these requirements. In such event, the Employer shall make an additional contribution equal to the amount such affected Participants would have received had they been included in the allocations, even if it exceeds the amount which would be deductible under Code Section 404. Any adjustment to the allocations pursuant to this paragraph shall be considered a retroactive amendment adopted by the last day of the Plan Year. |
| (f) | Notwithstanding any other provision of the Plan to the contrary, if any group or groups of Eligible Employees hereunder are included in a Bargaining Unit, the following rules shall apply: |
| (i) | Amounts shall be allocated among and credited to the ESOP Stock Accounts of Employees who are members of a Bargaining Unit only in the amounts, if any, provided in the applicable collective bargaining agreement. |
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| (ii) | The provisions of Article XII shall not apply with respect to Participants who are members of a Bargaining Unit. |
| (a) | For purposes of this Section, the following terms shall have the indicated meanings: |
| (i) | The term “Annual Additions” means the amount defined in Section 415(c)(2) of the Code, except that if, during any Plan Year, no more than one-third of the Employer ESOP Contributions which are deductible under Section 404(a)(9) of the Code are allocated to the ESOP Accounts of Highly Compensated Employees during the Plan Year, then any Employer ESOP Contributions which are applied by the Trustee to pay interest on an Acquisition Loan, and any Financed Shares which are allocated as Forfeitures, shall not be included in computing Annual Additions. |
| (ii) | The term “Compensation” means compensation as defined in Section 415(c)(3) of the Code, including the items specified in Treasury Regulation Section 1.415(c)-2(b)(1) and excluding the items specified in Treasury Regulation Section 1.415(c)-2(c); provided, however, that, effective for Plan Years beginning after December 31, 1997, the items specified in Section 415(c)(3)(D) of the Code shall be included; and provided further that in no event shall Compensation exceed the limitation in effect for any Plan Year under Section 401(a)(17) of the Code. Effective for limitation years beginning on or after July 1, 2007, payments made by the later of 2 ½ months after severance from employment or the end of the limitation year that includes the severance from employment will be Compensation if they are payments that, absent a severance from employment, would have been paid to the Participant while the Participant continued in employment with the Employer and are regular compensation for services during the Participant’s regular working hours, compensation for services outside the Participant’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar compensation. Any payments not described above are not considered Compensation if paid after severance from employment, even if they are paid within 2 ½ months following severance from employment, except for payments to an individual who does not currently perform services for the Employer by reason of qualified military service (within the meaning of Code Section 414(u)(1)) to the extent these payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service. |
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| the percentage of such Participant’s Compensation paid for a limitation year as set forth in Section 415(c)(1)(B) of the Code, which for purposes of this clause (ii) shall not include any contribution for medical benefits after separation from service (within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition. Notwithstanding the foregoing, in the event that a short limitation year is created due to an amendment changing the limitation year to a different 12-month consecutive period, such Annual Additions shall not exceed the dollar amount under clause (i) above multiplied by a fraction, the numerator of which is the number of months in the short limitation year and the denominator of which is 12. |
| (iv) | The term “Employer” means the Employers and all Controlled Group Members; provided, however, that for purposes of applying the limitations of this Section, “50 percent” rather “80 percent” shall be used in determining a Controlled Group Member for purposes of Section 414(b) and Section 414(c) of the Code. |
| (b) | Notwithstanding any other provision of the Plan to the contrary, the amount of Annual Additions that may be credited to a Participant’s ESOP Account for any limitation year shall not exceed the lesser of the Defined Contribution Maximum Permissible Amount or any other limitation contained in the Plan. If the Annual Additions to the ESOP Account of a Participant in any limitation year would otherwise exceed such amount, the excess amount shall be disposed of as follows: |
| (i) | Corrections for excess Annual Additions will be made first under the Profit Sharing Plan. |
| (ii) | If any amount of excess Annual Additions remains after the corrections made under the Profit Sharing Plan, the excess amount shall be reallocated among the remaining Participants’ Accounts as provided in Section 4.5; provided, however, that such reallocation shall not cause the Annual Additions to any other Participant’s Account to exceed the Defined Contribution Maximum Permissible Amount. |
| (iii) | If such allocation causes the Annual Addition to each Participant’s Account to exceed the Defined Contribution Maximum Permissible Amount for the limitation year, then these excess amounts shall be held unallocated in a suspense account. If a suspense account is in existence at any time during a particular limitation year, other than the limitation year described in the preceding sentence, all amounts in the suspense account must be allocated or reallocated to the Participants’ ESOP Account (not to exceed the Defined Contribution Maximum Permissible Amounts) before any contributions which would constitute Annual Additions may be made to the Plan for that limitation year. |
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VESTING
5.1 | Full Vesting. A Participant shall have a fully vested and non-forfeitable interest in his ESOP Accounts on the first to occur of the following: |
| (a) | his sixty-fifth birthday; |
| (b) | the date of his death; |
| (c) | his completion of the required vesting Years of Service, pursuant to Section 5.2; |
| (d) | upon termination of the Plan or complete discontinuance of contributions pursuant to Section 11.1 of the Plan; or |
| (e) | the date on which he is determined to suffer from a Total and Permanent Disability. |
A Participant shall at all times be fully vested in his Profit Sharing Account.
| (a) | Prior to April 1, 2007. Prior to April 1, 2007, a Participant shall vest in the value of that portion of his ESOP Account other than his Profit Sharing Account in accordance with the schedule set forth in the following table: |
Number ofVested
Years of ServicePercentage
Less than 3 years0%
3 years but less than 4 years20%
4 years but less than 5 years40%
5 years but less than 6 years60%
6 years but less than 7 years80%
7 years or more100%
| (b) | Vesting Beginning April 1, 2007. This subsection (b) applies to Participants who complete an Hour of Service under the Plan in a Plan Year, beginning on or after April 1, 2007. Such a Participant shall vest in the value of that portion of his ESOP Account other than his Profit Sharing Account in accordance with the schedule set forth in the following table: |
Number ofVested
Years of ServicePercentage
Less than 2 years0%
2 years but less than 3 years20%
3 years but less than 4 years40%
4 years but less than 5 years60%
5 years but less than 6 years80%
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| (c) | If any amendment directly or indirectly changes the vesting schedule, a Participant with three or more Vesting Years of Service may elect to have his vested percentage computed under the vesting schedule in effect prior to the amendment by filing a written request with the Plan Administrator within 60 days after the latest of (1) the date he received notice of such amendment, (2) the date such amendment was adopted, and (3) the date such amendment became effective. |
| (a) | No Reemployment Before Break in Service. If the Participant does not return to employment with an Employer or a Controlled Group Member prior to incurring a Break in Service, the balances in his Cash Forfeiture Account and Stock Forfeiture Account, determined as of the Valuation Date coincident with or next following the date on which he incurs a Break in Service (after all adjustments then required under the Plan have been made) will be deemed Forfeitures and will be allocated and credited in accordance with the provisions of Sections 4.3 and 4.5. |
| (b) | Reemployment Before Break in Service. If the Participant returns to employment with an Employer or a Controlled Group Member prior to incurring a Break in Service and subsequently becomes eligible for Plan benefits in accordance with the provisions of Section 5.1, the balances in his Stock Forfeiture Account and Cash Forfeiture Account as of the next following Valuation Date (after all adjustments then required under the Plan have been made) will be distributable to or for his benefit or, in the event of his death, to or for the benefit of his Beneficiary, in accordance with the provisions of Article VI. |
The balances in his ESOP Cash Account and ESOP Stock Account, if any, after the foregoing multiplication, and the entire balance of his Profit Sharing Account, if any, will become distributable to or for his benefit or, in the event of his death, to or for the benefit of his Beneficiary, in accordance with the applicable provisions of Article VI.
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| (a) | Reemployment Before Five Year Break in Service. If a participant returns to employment with an Employer or a Controlled Group Member after incurring a one year Break in Service but before incurring five consecutive one year Breaks in Service, he may repay the amounts previously distributed to him, in which event the Forfeitures will be restored to his ESOP Stock Account and ESOP Cash Account as of the last day of the Plan Year in which he repays such distribution (provided he is actively employed on such last day of the Plan Year), and he will continue to increase his vested percentage in such Accounts as if he had never received a distribution. The funds for such restoration shall come first from Forfeitures allocated at the end of such Plan Year, to the extent available, and, if necessary, thereafter from additional contributions to the Plan by the Employer. If a Participant exercises his right of repayment, he must do so by the earlier to occur of the fifth anniversary of his date of reemployment or the last day of the Plan Year in which he would have incurred five consecutive one year Breaks in Service had he not been reemployed. The Participant must repay in a single lump sum to the Trustee, without interest, the amount of cash, and fair market value of other property, received from his ESOP Stock Account and ESOP Cash Account. If a Participant exercises his right of repayment, upon such Participant’s subsequent Termination Date, his Forfeiture Account will be distributable to or for his benefit or, in the event of his death, to or for the benefit of his Beneficiary, in accordance with Article VI. |
| (b) | Reemployment After Five Year Break in Service. For purposes of determining a Participant’s nonforfeitable portion of his ESOP Accounts, including his Stock Forfeiture Account and Cash Forfeiture Account, if any, earned prior to the date he incurs at least five consecutive one year Breaks in Service, a Participant’s number of Years of Service completed after incurring such a period of Breaks in Service shall be disregarded. |
| (c) | Zero Vested Interest. For purposes of determining a Participant’s nonforfeitable portion of his ESOP Accounts, if an Employee or Participant does not have a nonforfeitable right under the Plan to any portion of his ESOP Account balances and the number of his consecutive one year Breaks in Service equals or exceeds five, then his number of Years of Service, if any, completed prior to such a period of Breaks in Service shall be disregarded and he shall be considered as a new Employee. |
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amounts will be restored to his Account as of the last day of the Plan Year in which he returns to such employment (provided he is actively employed on such last day of the Plan Year), and he will continue to increase his vested percentage in such Account as if he had never been deemed to have received a distribution of his Account. |
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TIME AND METHOD OF PAYMENT
| (a) | Profit Sharing Account: A Participant’s Profit Sharing Account shall be distributed to or for the benefit of the Participant, or, in the case of the Participant’s death, his Beneficiary, in a lump sum payment. Distribution of a Participant’s Profit Sharing Account will be made in whole shares of Company Stock, cash or a combination of both, as determined by the Participant. However, if the charter or by-laws of the Company restrict ownership of substantially all of the outstanding Company Stock to Employees and the Trust, then the distribution of a Participant’s Profit Sharing Account shall be made entirely in the form of cash, and the Participant shall not be entitled to a distribution in the form of Company Stock. In the event of a cash distribution, the Committee shall direct the Trustee on the manner in which the shares of Company Stock allocated to the Participant’s Profit Sharing Account are to be converted to cash. |
| (b) | ESOP Stock Account: Distribution of a Participant’s ESOP Stock Account will be made to or for the benefit of the Participant, or, in the case of the Participant’s death, his Beneficiary, in a lump sum. |
The Participant shall select, with the consent of the Committee, the manner in which his vested ESOP Stock Account balance will be distributed, provided that the Committee’s consent shall be given in a uniform and nondiscriminatory manner. If a Participant does not have a nonforfeitable right to any of his ESOP Stock Account on his Termination Date, then he will be deemed to be cashed out of his ESOP Stock Account as of his Termination Date. Distribution of a Participant’s vested ESOP Stock Account will be made in whole shares of Company Stock, cash, or a combination of both, as determined by the Committee, provided, however, that the Committee shall notify the Participant of his right to demand distribution of his vested ESOP Stock Account balance entirely in whole shares of Company Stock (with the value of any fractional shares paid in cash). However, if the charter or by-laws of the Company restrict ownership of substantially all of the outstanding Company Stock to Employees and the Trust, then the distribution of a Participant’s vested ESOP Stock Account shall be made entirely in the form of cash, and the Participant is not entitled to a distribution in the form of Company Stock. In the event of a cash distribution, the Committee shall direct the Trustee on the manner in which the shares of Company Stock allocated to the Participant’s ESOP Stock Account are to be converted to cash.
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| Distribution of a Participant’s vested ESOP cash account balance will be made in cash. |
| (a) | Distribution of ESOP Cash Accounts and Profit Sharing Accounts. A Participant, or his Beneficiary, as applicable, shall be eligible to have the distribution of his ESOP Cash Account and Profit Sharing Account, if any, made or commenced as soon as practicable following the Participant’s election to commence benefits subject to paragraph (f) below. |
| (b) | Distribution of ESOP Stock Account upon Retirement, Total and Permanent Disability or Death. Unless an earlier date is required by paragraphs (d), (e) or (f) of this Section, or unless the Participant elects a later date, if a Participant retires, is retired, or terminates employment due to Total and Permanent Disability, or if a Participant dies while in the employ of an Employer or Controlled Group Member, distribution of his Accounts will be made or commenced as soon as practicable following the Participant’s (or Beneficiary’s) election to commence benefits, subject to paragraph (f) below, but not later than the 60th day next following the close of the Plan Year during which the Participant dies, becomes Totally and Permanently Disabled, or attains Normal Retirement Age or, if later, during which his Termination Date occurs; provided that if the valuation of the Company Stock is not completed by that date, the distribution will be made within 60 days after the valuation is completed. |
| (c) | Distribution of ESOP Stock Account upon Resignation or Dismissal. Unless an earlier date is required by paragraphs (d), (e) or (f) of this Section, if a Participant resigns or is dismissed from the employ of the Employers and Controlled Group Members for a reason other than retirement, Total and Permanent Disability or death, the Participant will be eligible to receive a distribution of his ESOP Stock Account as soon as practicable following the Participant’s election to commence benefits, subject to paragraph (f) below. |
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| minimum distribution incidental benefit requirements of the proposed regulations thereunder. Therefore, in no event shall a distribution of a Participant’s ESOP Accounts commence later than the later of: |
| (i) | the April 1 of the calendar year next following the calendar year in which the Participant attains age 70-1/2; or |
| (ii) | the April 1 of the calendar year next following the calendar year in which the Participant’s Termination Date occurs, if the Participant is not a 5 percent owner (except for a Participant who is a 5 percent owner, as defined in Section 416(i)(1)(B) of the Code, the date determined under this paragraph (ii) shall be the April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2, without regard to the date of the Participant’s Termination Date). |
Any non-retired Participant (other than a five-percent owner) who attains age 70-1/2 on or after January 1, 1996 and prior to January 1, 2003 may elect to receive distribution of his vested ESOP Account while employed by the Employer. Such election shall be made in writing in the manner, time and form required by the Company.
Notwithstanding any other provision of the Plan to the contrary with respect to distributions under the Plan made on or after January 1, 2002, the Plan will apply the minimum distribution requirements of Section 401(a)(9) of the Code in accordance with the regulations under Section 401(a)(9) of the Code that were proposed on January 17, 2001 (the (“2001 Proposed Regulations”). This provision relating to distributions under the 2001 Proposed Regulations shall continue in effect until the last calendar year beginning before the effective date of the final regulations under Section 401(a)(9) of the Code or such other date as may be published by the Internal Revenue Service.
| (e) | Distributions to Beneficiary upon Death. Notwithstanding the provisions of paragraphs (b) and (c) above, distributions upon the death of a Participant shall be made in accordance with the following requirements and shall otherwise comply with Section 401(a)(9) of the Code and any regulations issued thereunder. If a Participant dies before his distribution has commenced, distribution of his ESOP Accounts to his Beneficiary shall commence not later than the earlier of: |
| (i) | one year after the end of the Plan Year in which the Participant died, or |
| (ii) | if the Beneficiary is the surviving spouse, the later of one year after the Participant’s death or the date the Participant would have attained age 70‑1/2, |
and shall be completed within five years after the Participant’s death.
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If a Participant dies after distribution of his interest has begun, the remaining portion of such interest will continue to be distributed as least as rapidly as under the method of distribution being used prior to the Participant’s death.
| (f) | Small Amounts. Notwithstanding any provision to the contrary, if a Participant’s vested ESOP Accounts as of the date the Participant (or Beneficiary) is eligible to receive a distribution do not exceed $1,000, then such Participant’s ESOP Accounts shall be distributed in a lump sum as soon as practicable after such date. |
| (g) | Zero Vested Account Balance. Notwithstanding the foregoing provisions of this Section 6.2, if the value of a Participant’s vested Account is zero upon his termination of employment with the Employer or Controlled Group Member, the Participant shall be deemed to have received a distribution of such Account in a single sum distribution on such date. |
| (a) | Directly to such Participant or Beneficiary; or |
| (b) | To the legal representative of such Participant or Beneficiary. |
If the recipient of a distribution cannot be located within one year after he is entitled to receive the distribution, the Plan Administrator may, in its discretion, direct that such distribution be treated as a forfeiture in accordance with Treasury Regulation Section 1.411(a)-4(b)(6). In the event such person subsequently makes a claim for such forfeited benefits, such benefits shall be reinstated. Any payment made pursuant to this Section shall be in complete discharge of the obligation under the Plan.
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| such interest shall be paid in equal shares to those Beneficiaries, if any, who survive the Participant. |
| (b) | Notwithstanding any provision in the Plan to the contrary, the designated Beneficiary of a married Participant shall be his spouse, unless the spouse consents, in writing, to the designation by the Participant of a different Beneficiary. Such spouse’s consent must acknowledge the effect of such consent and must be witnessed by a Plan representative or a notary public. Such consent shall not be required if it is established to the satisfaction of the Plan Administrator that the required consent cannot be obtained because there is no spouse, the spouse cannot be located, or other circumstances that may be prescribed by Treasury Regulations. The designation made by the Participant and consented to by his spouse may be revoked by the Participant in writing without the consent of the spouse at any time. Any new designation specifying a different Beneficiary must again comply with the requirements of this Section. A former spouse’s consent shall not be binding on a new spouse. Any designation by an unmarried Participant shall be rendered ineffective by any subsequent marriage. |
| (c) | If a Participant fails to designate a Beneficiary, if such designation is for any reason illegal or ineffective, or if no Beneficiary survives the Participant, his death benefits shall be paid in accordance with the following: |
| (i) | to his surviving spouse; |
| (ii) | if there is no surviving spouse, to his descendants (including legally adopted children and their descendants) per stirpes; or |
| (iii) | if there is neither surviving spouse nor surviving descendants, to the executor or other personal representative of the Participant to be distributed in accordance with the Participant’s will or applicable law. |
| (d) | The Plan Administrator may determine the identity of the distributees and in so doing may act and rely upon any information it may deem reliable upon reasonable inquiry and upon any affidavit, certificate, or other paper believed by it to be genuine, and upon any evidence believed by it sufficient. |
| (e) | Effect of Divorce. If a married Participant designates his spouse as Beneficiary (whether by name or designation as the spouse) and the marriage of the Participant and spouse is subsequently terminated through divorce, dissolution, annulment or otherwise, except as may be provided in a Qualified Domestic Relations Order (as defined in Section 414(p) of the Code), the designation of the spouse as Beneficiary shall be void, as if the former spouse had predeceased the Participant; and the Participant may designate another Beneficiary in accordance with the terms of the Plan (but subject to the terms of any applicable Qualified Domestic Relations Order). |
6.6 | Qualified Domestic Relations Order. In addition to payments made under this Article on account of a Participant’s termination of employment, payments may be made to an |
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Alternate Payee (as defined below) prior to, coincident with, or after Participant’s termination of employment if made pursuant to a Qualified Domestic Relations Order (as defined below). A distribution to an Alternate Payee may be made out of a Participant’s Accounts on a date coincident with the Participant’s “earliest retirement age,” defined as the earlier of (i) the date on which the Participant is entitled to a distribution under the Plan, or (ii) the later of (A) the date the Participant attains age 50, or (B) the earliest date on which the Participant could begin receiving benefits under the Plan if he had separated from service. In addition, this Plan specifically authorizes distributions to an Alternate Payee under a Qualified Domestic Relations Order prior to the Participant’s attainment of the earliest retirement age (as defined above and in Section 414(p) of the Code) but only if: (1) the order specifies distribution at the earlier date or permits an agreement between the Plan and the Alternate Payee authorizing an earlier distribution; and (2) the Alternate Payee consents to a distribution prior to the Participant’s earliest retirement age if the present value of the Alternate Payee benefits under the Plan exceeds $5,000 (or such higher amount permitted by Code Section 417(e)) at the time of distribution thereof. Nothing in this Section shall provide a Participant with a right to receive a distribution at a time not otherwise permitted under the Plan, nor shall it provide the Alternate Payee with a right to receive a form of payment not permitted under the Plan. The term “Qualified Domestic Relations Order” means any judgment, decree, or order (including approval of a property settlement agreement) which: |
| (a) | relates to the provision of child support, alimony payments, or marital property rights to a spouse, child or other dependent of a Participant, |
| (b) | is made pursuant to a State domestic relations law (including a community property law), |
| (c) | creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable with respect to the Participant, |
| (d) | clearly specifies the name and last known mailing address, if any, of the Participant and the name and mailing address of each Alternate Payee covered by the order, the amount and percentage of the Participant’s benefits to be paid by the Plan to each Alternate Payee, or the manner in which such amount or percentage is to be determined, the number of payments or period to which such order applies and each plan to which such order applies, and |
| (e) | does not require the Plan to provide (i) any form or type of benefit, or any option, not otherwise provided under the Plan, (ii) increased benefits, or (iii) benefits to an Alternate Payee which are required to be paid to another payee under another order previously determined by the Trustee to be a Qualified Domestic Relations Order. |
The Committee shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. The Committee may, in its sole discretion, establish and maintain a segregated account for each Alternate Payee. The term “Alternate Payee” means any spouse, former spouse, child or
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other dependent of a Participant who is recognized by a Qualified Domestic Relations Order as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to the Participant.
| (a) | Effective prior to April 1, 2002, if a Participant attains age 55 and has 10 years of participation in this Plan (so that he is a “Qualified Participant”), the Committee shall offer such Participant a distribution in cash of the value (determined as of the Valuation Date coinciding with or next following the Participant’s election to diversify) of at least 25% of the number of shares of Company Stock credited to his ESOP Stock Account and Profit Sharing Account in the first five years of his Qualified Election Period (as defined below), and 50% of the number of shares of Company Stock credited to his ESOP Stock Account and Profit Sharing Account in the last year of the Qualified Election Period in accordance with the provisions of this Section. For purposes of the shares held in his Profit Sharing Account, but not shares held in the ESOP Stock Account, years of participation in the Profit Sharing Plan prior to the Effective Date will count toward the required 10 years of participation. The Participant must elect to receive such a distribution within 90 days after the end of each of the six Plan Years during the Qualified Election Period (the “Diversification Election Period”), and the distribution will be made within 90 days after each election made by Participant during the Diversification Election Period. The “Qualified Election Period” means the six Plan Years beginning with the Plan Year during which a Participant becomes a Qualified Participant. The amount which may be distributed to a Participant during the Qualified Election Period shall be determined by multiplying the number of shares of Company Stock credited to the Participant’s ESOP Stock Account and Profit Sharing Account (including shares of Company Stock the value of which has been previously distributed pursuant to this Section) by 25% or, with respect to a Participant’s final election, 50%, reduced by the amount of any prior distributions received by such Participant pursuant to this Section. Notwithstanding the foregoing, if the fair market value of the Company Stock allocated to the ESOP Stock Account and Profit Sharing Account of a Qualified Participant is $500 or less as of the Valuation Date immediately preceding the first day of any Diversification Election Period, then such Qualified Participant shall not be entitled to an election under this Section for that Diversification Election Period. |
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| ESOP Stock Account, years of participation in the Profit Sharing Plan prior to the April 1, 1993 Effective Date of the Plan will count toward the required seven (7) years of participation to become a Qualified Participant. The Participant must elect to diversify such Company Stock within ninety (90) days after the end of each of the Plan Years during the Qualified Election Period (the “Diversification Election Period”), and within ninety (90) days after each Diversification Election Period the Qualified Participant’s diversified amount will be invested in one or more of at least three non-Company Stock investment fund options under the Plan in the proportions elected by the Qualified Participant. The “Qualified Election Period” means the greater of (i) eleven (11) Plan Years beginning with the Plan Year during which a Participant becomes a Qualified Participant, or (ii) the number of Plan Years beginning with the Plan Year during which a Participant becomes a Qualified Participant and ending on the Qualified Participant’s Severance from Service Date. The amount which may be diversified by a Participant during the Qualified Election Period shall be determined by multiplying the number of shares of Company Stock credited to the Participant’s ESOP Stock Account and Profit Sharing Account (including shares of Company Stock the value of which has been previously distributed and/or diversified pursuant to this Section 6.7) by twenty-five percent (25%) with respect to a Qualified Participant’s first five (5) years of the Qualified Election Period or, with respect to a Qualified Participant’s sixth (6th) and subsequent years of the Qualified Election Period, fifty percent (50%), reduced by the amount of any prior distributions received by such Participant pursuant to this Section 6.7 and by any amount previously diversified at the Participant’s election pursuant to this Section 6.7. Notwithstanding the foregoing, if the fair market value of the Company Stock allocated to the ESOP Stock Account and Profit Sharing Account of a Qualified Participant is Five Hundred Dollars ($500) or less as of the Accounting Date immediately preceding the first day of any Diversification Election Period, then such Qualified Participant shall not be entitled to an election under this Section 6.7 for that Diversification Election Period. |
| (c) | Effective November 1, 2007, at the election of the Plan Administrator, a Qualified Participant’s diversified amount will be: |
| (i) | Invested, in accordance with subsection (b) above, in one or more of at least three non-Company Stock investment fund options under the Plan in the proportions elected by the Qualified Participant; |
| (ii) | Transferred, in a direct plan-to-plan transfer, to the Profit Sharing Plan, to be invested, in accordance with subsection (b) above, in one or more of at least three non-Company Stock investment fund options under the Profit Sharing Plan in the proportions elected by the Qualified Participant; or |
| (iii) | Distributed to the Qualified Participant in accordance with subsection (a) above. |
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At the election of the Plan Administrator, amounts previously invested in accordance with paragraph (i) above may be transferred to the Profit Sharing Plan in accordance with paragraph (ii) at any time.
| (a) | Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. |
| (b) | The following are definitions for purposes of this Section: |
| (i) | 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: (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated beneficiary, or for a specified period of ten years or more; (ii) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; (iii) 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); (iv) any distribution of elective deferrals on account of hardship on or after January 1, 1999; (v) any distribution on account of hardship on or after January 1, 2002; and (vi) any other distribution which the Secretary of the Treasury (or his delegate) provides in regulations or rulings of general applicability may be excluded from the direct rollover rules under Section 401(a)(31) of the Code. A portion of a distribution that is received on or after January 1, 2002, shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax contributions that are not includable in gross income; provided, however, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to account separately for amounts so transferred, including separately accounting for the portion of such distribution that is includable in gross income and the portion of such distribution that is not so includable. In addition to the foregoing, effective as of January 1, 2009, an Eligible Rollover Distribution includes a distribution to a Beneficiary who is not the surviving spouse of the Participant, provided that: |
| (A) | the Beneficiary would be considered a beneficiary of the Participant in accordance with Code Section 401(a)(9)(E), |
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| (B) | for this purpose, an Eligible Retirement Plan only includes an individual retirement account or annuity described in Code Section 408(a) or (b), and |
| (C) | all other requirements of Code Section 402(c)(11) are met. |
| (ii) | Eligible Retirement Plan. An “Eligible Retirement Plan” is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Participant’s Eligible Rollover Distribution. In addition, for distributions on or after January 1, 2002, “Eligible Retirement Plan” also means an annuity contract described in Code Section 403(b) or an individual retirement account or individual retirement annuity described in Code Section 408(a) or (b). In the case of an Eligible Rollover Distribution prior to January 1, 2002, to a Beneficiary who is a Participant’s surviving spouse, an Eligible Retirement Plan means only an individual retirement account or individual retirement annuity. Effective for distributions on or after January 1, 2008, an Eligible Retirement Plan includes a Roth IRA described in Code Section 408A. |
| (iii) | 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 Section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. |
| (iv) | Direct Rollover. A “Direct Rollover” is a payment by the Plan to the Eligible Retirement Plan specified by the Participant. |
| (c) | Automatic Rollover of Small Benefits. In the event of a mandatory distribution greater than $1,000 in accordance with the terms of Section 6.2, if a Participant does not elect to have such distribution paid directly to an Eligible Retirement Plan specified by the Participant in a Direct Rollover or to receive the distribution directly in accordance with the terms of this Section, then the Plan Administrator will pay the distribution in a Direct Rollover to an individual retirement plan designated by the Plan Administrator. |
| (a) | Definitions. The following definitions apply for purposes of this Section. |
| (i) | Designated beneficiary: The individual who is designated as the beneficiary under Section 1.4 of the Plan and is the designated beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations. |
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| (iii) | Life expectancy: Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury Regulations. |
| (iv) | Participant’s account balance: The ESOP Account balance as of the last Valuation Date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the ESOP Account balance as of dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. |
| (v) | Required beginning date: The date specified in Section 6.2(d) of the Plan. |
| (b) | General Rules. |
| (i) | Effective Date. The provisions of this Section will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. |
| (ii) | Precedence. The requirements of this Section will take precedence over any inconsistent provisions of the Plan. |
| (iii) | Requirements of Treasury Regulations Incorporated. All distributions required under this Section will be determined and made in accordance with the Treasury Regulations under Section 401(a)(9) of the Internal Revenue Code. |
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| (i) | Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s required beginning date. |
| (ii) | Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows: |
| (A) | If the Participant’s surviving spouse is the Participant’s sole designated beneficiary, then, except as provided in subsection (f), distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later. |
| (B) | If the Participant’s surviving spouse is not the Participant’s sole designated beneficiary, then, except as provided in subsection (f), distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. |
| (C) | If there is no designated beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. |
| (D) | If the Participant’s surviving spouse is the Participant’s sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this paragraph (ii), other than subparagraph (A), will apply as if the surviving spouse were the Participant. |
For purposes of this paragraph (ii) and subsection (e), unless subparagraph (c)(ii)(D) applies, distributions are considered to begin on the Participant’s required beginning date. If subparagraph (c)(ii)(D) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under subparagraph (c)(ii)(A). If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant’s required beginning date (or to the Participant’s surviving spouse before the date distributions are required to begin to the surviving spouse under subparagraph (c)(ii)(A)), the date distributions are considered to begin is the date distributions actually commence.
| (iii) | Forms of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single |
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| sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with subsections (d) and (e) of this Section. If the Participant’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the Code and the Treasury Regulations. |
| (d) | Required Minimum Distributions During Participant’s Lifetime. |
| (i) | Amount of Required Minimum Distribution for Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: |
| (A) | the quotient obtained by dividing the Participant’s account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or |
| (B) | if the Participant’s sole designated beneficiary for the distribution calendar year is the Participant’s spouse, the quotient obtained by dividing the Participant’s account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the distribution calendar year. |
| (ii) | Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death. Required minimum distributions will be determined under this subsection (d) beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participant’s date of death. |
| (e) | Required Minimum Distributions After Participant’s Death. |
| (i) | Death on or After Date Distributions Begin. |
| (A) | Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant’s designated beneficiary, determined as follows: |
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| (1) | The Participant’s remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
| (2) | If the Participant’s surviving spouse is the Participant’s sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For distribution calendar years after the year of the surviving spouse’s death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year. |
| (3) | If the Participant’s surviving spouse is not the Participant’s sole designated beneficiary, the designated beneficiary’s remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent year. |
| (B) | No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the Participant’s remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
| (ii) | Death Before Date Distributions Begin. |
| (A) | Participant Survived by Designated Beneficiary. Except as provided in subsection (f), if the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant’s account balance by the remaining life expectancy of the Participant’s designated beneficiary, determined as provided in paragraph (e)(i). |
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| completed by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. |
| (C) | Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant’s surviving spouse is the Participant’s sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under subparagraph (c)(ii)(A), this paragraph (e)(ii) will apply as if the surviving spouse were the Participant. |
| (f) | Modifications. |
| (i) | Election to Apply Five-Year Rule to Distributions to Designated Beneficiaries. If the Participant dies before distributions begin and there is a designated beneficiary, distribution to the designated beneficiary is not required to begin by the date specified in paragraph (c)(ii) of this Section, but the Participant’s entire interest will be distributed to the designated beneficiary by December 31 of the calendar year containing the fifth anniversary of the Participant’s death. If the Participant’s surviving spouse is the Participant’s sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to either the Participant or the surviving spouse begin, this election will apply as if the surviving spouse were the Participant. This election will apply to all distributions. |
| (ii) | Election to Allow Participants or Beneficiaries to Elect 5-Year Rule. Participants or beneficiaries may elect on an individual basis whether the five-year rule or the life expectancy rule in paragraphs (c)(ii) and (e)(ii) of this Section applies to distributions after the death of a Participant who has a designated beneficiary. The election must be made no later than the earlier of September 30 of the calendar year in which distribution would be required to begin under paragraph (c)(ii) of this Section, or by September 30 of the calendar year which contains the fifth anniversary of the Participant’s (or, if applicable, surviving spouse’s) death. If neither the Participant nor beneficiary makes an election under this paragraph, distributions will be made in accordance with paragraphs (c)(ii) and (e)(ii) of this Section and, if applicable, the elections in paragraph (i) above. |
| (iii) | Election to Allow Designated Beneficiary Receiving Distributions Under 5-Year Rule to Elect Life Expectancy Distributions. A designated beneficiary who is receiving payments under the five-year rule may make a new election to receive payments under the life expectancy rule until December 31, 2003, provided that all amounts that would have been required to be distributed under the life expectancy rule for all distribution calendar years before 2004 are distributed by the earlier of December 31, 2003 or the end of the five-year period. |
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VOTING AND TENDERING OF COMPANY STOCK
7.1 | Voting. Except as provided below, all Company Stock held in the Trust shall be voted by the Trustee at the written direction of the Committee: |
| (a) | During such time period as the Company has a registration-type class of securities, each Participant or, if applicable, the Participant’s Beneficiary shall be entitled to direct the Trustee as to the exercise of any shareholder voting rights attributable to shares of Company Stock then allocated to his or her ESOP Accounts, but only to the extent required by Section 409(e)(2) of the Code and the regulations thereunder. |
| (b) | If the provisions of paragraph (a) above are inapplicable, with respect to any corporate matter which involves the voting of Company Stock with respect to the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all of the assets of a trade or business, or such other transactions which may be prescribed by regulation, each Participant may be entitled to direct the Trustee as to the exercise of any voting rights attributable to shares of Company Stock then allocated to his ESOP Stock Account and Profit Sharing Account, but only to the extent required by Sections 401(a)(22) and 409(e)(3) of the Code and the regulations thereunder. |
| (c) | If the provisions of paragraphs (a) and (b) above are inapplicable, with respect to any tender or exchange offer for, or a request or invitation for tenders or exchanges of, Company Stock made to the Trustee, the Trustee shall request from each Participant instructions as to the tendering or exchanging of shares of Company Stock then allocated to his ESOP Stock Account and Profit Sharing Account. For the avoidance of doubt, any redemption, repurchase or exchange of, or offer to redeem, repurchase, or exchange, Company Stock by the Company that is an Approved Company Repurchase shall not be, and shall not be interpreted to be, a tender or exchange offer for, or a request or invitation for tender or exchange of, Company Stock for purposes of this Section 7.1(c). “Approved Company Repurchase” means a redemption, repurchase or exchange of Company Stock in the Trust Fund by the Company in one or more transactions where the transaction is approved (or with respect to a series of transactions are approved) by at least seventy five percent (75%) of the members of the Board of Directors. This Section 7.1(c) may be amended only by an amendment approved by at least seventy five percent (75%) of the members of the Board of Directors. |
If a Participant is entitled to so direct the Trustee pursuant to paragraphs (a), (b), or (c) above, all allocated Company Stock as to which such instructions have been received (which may include an instruction to abstain) shall be voted or tendered or exchanged in accordance with such instructions. The Trustee shall vote any unallocated Company Stock in the Trust Fund, or any allocated Company Stock in the Trust Fund as to which no voting instructions have been received, in such manner as the Trustee is directed in writing by the Committee; however, in the event of either a corporate matter described in paragraph (b)
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above or a tender offer or exchange offer for (or a request or invitation for tenders or exchanges of) shares of Company Stock described in paragraph (c) above, the Trustee shall vote or tender or exchange any (i) unallocated Company Stock and, (ii) allocated Company Stock as to which no Participant instructions were received, in the same proportion as the allocated Company Stock for which instructions have been received is voted or tendered or exchanged.
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RIGHTS, RESTRICTIONS AND OPTIONS ON COMPANY STOCK
| (a) | the transfer upon the death of a Participant or Beneficiary of any shares of Company Stock to his legal representatives, heirs and legatees, provided however, that any proposed sale or other disposition of any such shares by any legal representative, heir or legatee shall remain subject to the Right of First Refusal; |
| (b) | the transfer by a Participant or Beneficiary in accordance with the Put Option pursuant to Section 8.2 below; or |
| (c) | the transfer while the Company Stock is listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, or quoted on a system sponsored by a national securities association registered under Section 15A(b) of the Securities Exchange Act of 1934. |
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may be, the payment for Company Stock sold pursuant to a Put Option shall be made, as determined in the discretion of the Company or the Trustee, as the case may be, in the following forms: |
| (a) | if the Company Stock was distributed as part of a total distribution (that is, a distribution within one taxable balance of the credit of his ESOP Accounts), then payment will be made with a promissory note which provides for substantially equal annual installments commencing within 30 days from the date of the exercise of the Put Option and over a period not exceeding 5 years, with interest payable at a reasonable rate (as determined by the Company) on any unpaid installment balance, with adequate security provided, and without penalty for any prepayment of such installments; or |
| (b) | in a lump sum no later than 30 days after such Participant exercises the Put Option. |
At the direction of the Committee the Trustee on behalf of the Trust may offer to purchase any shares of Company Stock (which are not sold pursuant to a Put Option) from any former Participant or Beneficiary at any time in the future, at their then fair market value.
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DIVIDENDS
| (a) | To the extent permitted by applicable law, any cash dividends paid with respect to Financed Shares which are allocated to the Participants’ ESOP Stock Accounts may (as required by applicable Acquisition Loan documentation or, if not required, as determined in the sole discretion of, and as directed by, the Committee) be used to repay the principal balance of an outstanding Acquisition Loan or interest thereon in whole or in part as provided in Section 3.2(c). Financed Shares released from the Loan Suspense Account as a result of such Acquisition Loan payment, with a fair market value at least equal to the cash dividends paid with respect to the Company Stock allocated to the Participants’ ESOP Stock Accounts, shall be allocated, as of the Dividend Declaration Date, among and credited to the ESOP Stock Accounts of such Participants, pro rata, according to the number of shares of Company Stock held in such ESOP Stock Accounts on the Dividend Declaration Date. |
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| ESOP Stock Accounts of all Participants employed on such Valuation Date, pro rata, according to each Participant’s Compensation. |
| (c) | Effective for Plan Years commencing April 1, 2019, and ending on March 31, 2023 (the repayment due date of the outstanding Acquisition Loan), any Special Dividend paid with respect to Financed Shares held in the Loan Suspense Account shall be used to repay the principal balance of the then outstanding Acquisition Loan as provided in Section 3.2(c). To the extent the amount of any such Special Dividend exceeds the principal balance of the then outstanding Acquisition Loan, such excess portion of the Special Dividend shall be used to repay the interest of the then outstanding Acquisition Loan, and any excess portion after the payment of such interest shall be allocated among and credited to ESOP Cash Accounts of the Participants as provided in Section 9.1. Any Financed Shares released from the Loan Suspense Account by reason of a Special Dividend paid with respect to Company Stock held in the Loan Suspense Account shall be allocated, as of the Valuation Date, among and credited to the ESOP Stock Accounts of all Participants employed on the Valuation Date, pro rata, according to each Participant’s Compensation. |
9.4 | Article IX Priority. For the avoidance of doubt, this Article IX, not Section 4.5, governs the payment and allocation of cash dividends |
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ADMINISTRATION OF PLAN
| (a) | To adopt such rules of procedure and regulations as, in its opinion, may be necessary for the proper and efficient administration of the Plan and as are consistent with the provisions of the Plan; |
| (b) | To enforce the Plan in accordance with its terms and with such applicable rules and regulations as may be adopted by the Committee; |
| (c) | To determine all questions arising under the Plan, including the power to determine the rights or eligibility of Employees or Participants and their Beneficiaries and their respective benefits, and to remedy ambiguities, inconsistencies or omissions; |
| (d) | To give such directions to the Trustee with respect to the Trust Fund as may be provided in the Trust Agreement, including disbursements (except for the ordinary expenses of administration of the Trust Fund or the reimbursement of reasonable expenses at the direction of the Company, as provided herein) and the depositaries which have been designated by the Board, which must be an incorporated Federally insured bank or trust company; and to direct the Trustee, in the discretion of the Committee, to invest assets of the Plan in assets other than Company Stock. |
| (e) | To maintain and keep adequate books, records and other data as shall be necessary to administer the Plan, except those that are maintained by the Company or by the Trustee, and to meet the disclosure and reporting requirements of ERISA; |
| (f) | To direct all payments of benefits under the Plan; |
| (g) | To establish an investment policy and objective for the Plan; |
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| (h) | To elect a chairman and to appoint a secretary who shall keep minutes of the proceedings and have custody of all records and documents pertaining to administration of the Plan; |
| (i) | To be agent for the service of legal process on behalf of the Plan; |
| (j) | To authorize one or more of its members to execute any documents on behalf of the Committee, in which event the Committee shall notify the Trustee in writing of such action; |
| (k) | To engage the services of an investment manager or managers as defined in Section 3(38) of ERISA (“Investment Manager”), each of whom will have the full power and authority to manage, acquire or dispose (or direct the Trustee with respect to the acquisition or disposition) of any Plan asset(s) under the control of such Investment Manager. The Investment Manager shall have the power to invest Plan assets as provided in a written agreement between the Committee and the Investment Manager (which agreement may be acknowledged by the Trustee) which may include such securities or such other property, real or personal, as the Investment Manager shall deem advisable, including but not limited to, capital, common and preferred stocks; corporate and governmental obligations, secured or unsecured; mortgages, leaseholds, fees and other interests in realty; oil, gas, or mineral properties, rights, royalties, payments or other interest(s) in such property; contracts, conditional sale agreements, choses in action, trust and participation certificates, or other evidences of ownership, part ownership, full interest or part interest. |
| (l) | To perform any other acts necessary or appropriate to the administration of the Plan and the discharge of its duties. |
| (m) | To interpret the provisions of the Plan. |
The Committee shall have no power in any way to modify, alter, add to or subtract from, any provisions of the Plan. The certificate of the chairman or the secretary of the Committee that the Committee has taken or authorized any action shall be conclusive in favor of any person relying on the certificate. The Employers shall pay, or the Company shall cause to be paid from the Trust Fund, expenses incurred by the Committee in the administration of the Plan and Trust.
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action required by this Plan or the Trust to be taken by an Investment Manager. In exercising its authority to control and manage the operation and administration of the Plan, the Committee may employ agents and counsel (who may also be employed by or represent any Employer) and to delegate to them such powers as the Committee deems desirable. Any such delegation or appointment shall be in writing and shall reflect the unanimous action of the Committee members then acting. The writing contemplated by the foregoing sentence shall fully describe the advice to be rendered or the functions and duties to be performed by the delegate. The Employers shall pay, or the Company shall cause to be paid from the Trust Fund, the compensation of such agents and counsel. |
| (a) | for the exclusive purpose of providing benefits to Participants and other persons entitled to benefits under the Plan; |
| (b) | with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; and |
| (c) | in accordance with the documents and instruments governing the Plan insofar as they are consistent with ERISA. |
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Each Participant or Beneficiary claiming a benefit under the Plan must complete and file such application forms with the Committee. One Committee member shall be designated to review all applications for benefits. He shall notify the claimant in writing of his decision within 90 days (45 days for a claim for disability) of his receipt of the application. If special circumstances require any extension of time for processing the claim, the claimant will be notified in writing of the extension prior to the expiration of the initial 90 day period. The extension of time will not exceed 90 days (30 days for a claim for disability benefits, with a second extension of 30 days if necessary). The extension notice shall indicate the date by which the Committee expects to render the benefit determination. In the case of any extension for a claim for disability benefits, the notice of extension shall specifically explain the standards on which entitlement to a benefit is based, the unresolved
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issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the applicant shall be afforded at least 45 days within which to provide the specified information.
The reviewing member of the Committee shall make all determinations on behalf of the Committee as to the right of any person to a benefit. Any denial by the reviewing Committee member of a claim for benefits by a Participant or Beneficiary shall be stated in writing and mailed to the Participant or Beneficiary. This claims denial shall be written in a manner calculated to be understood by the claimant and shall include the following:
| (a) | the specific reason or reasons for any denial of benefits; |
| (b) | the specific Plan provisions on which any denial is based; |
| (c) | a description of any further material or information which is necessary for the claimant to perfect his claim and an explanation of why the material or information is needed; |
| (d) | an explanation of the Plan’s formal claim review procedure, including a statement of claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review; and |
| (e) | With respect to a claim for disability benefits, the notice shall also set forth the following information: |
| (i) | A discussion of the decision, including an explanation of the basis for disagreeing with or not following: |
| (A) | The views presented by the applicant to the Committee of health care professionals treating the applicant and vocational professionals who evaluated the applicant; |
| (B) | The views of medical or vocational experts whose advice was obtained on behalf of the Committee in connection with the denial, without regard to whether the advice was relied upon in making the denial; and |
| (C) | A disability determination regarding the applicant presented by the applicant to the Committee made by the Social Security Administration; |
| (ii) | If the denial is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of this Plan to the applicant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request; |
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| (iv) | A statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the applicant’s claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to Section 2560.503-1(m)(8) of the Department of Labor Regulations; and |
| (v) | The notice shall be provided in a culturally and linguistically appropriate manner (as described in Section 2560.503-1(o) of the Department of Labor Regulations). |
If the claimant does not respond to the denial, posted by first class mail to the address of record of the Committee/Plan Administrator, within 60 days (180 days for a claim for disability benefits filed) after receipt of the written notice of denial, the claimant shall be considered satisfied in all respects.
| (a) | to request in writing that the Committee review the denial; |
| (b) | to review pertinent documents and request copies of them, free of charge; |
| (c) | to submit issues and comments in writing to which the Committee shall respond; and |
| (d) | to request a hearing with the Committee. |
In addition, with respect to a claim for disability benefits, the review will meet all of the following requirements:
| (a) | the review will not afford deference to the initial denial by the Committee; |
| (b) | the review will be conducted by a person who is neither the individual who made the initial denial that is the subject of the appeal, nor the subordinate of such individual; |
| (c) | in deciding an appeal of any initial denial that is based in whole or in part on a medical judgment, including determinations with regard to whether a particular |
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| treatment, drug, or other item is experimental, investigational, or not medically necessary or appropriate, the person shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment. The health care professional engaged for purposes of a consultation shall be an individual who is neither an individual who was consulted in connection with the initial denial that is the subject of the appeal, nor the subordinate of any such individual; |
| (d) | provide for the identification of medical or vocational experts whose advice was obtained on behalf of the Committee in connection with an applicant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; and |
| (e) | the review will also: |
| (i) | Provide that before the Committee can issue an adverse benefit determination on review of a disability claim, the Committee shall provide the applicant, free of charge, with any new or additional evidence considered, relied upon, or generated by the Committee, insurer, or other person making the benefit determination (or at the direction of the Committee, insurer or such other person) in connection with the claim; such evidence must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided to give the applicant a reasonable opportunity to respond prior to that date; and |
| (ii) | Provide that, before the Committee can issue an adverse benefit determination on review of a disability claim based on a new or additional rationale, the Committee shall provide the applicant, free of charge, with the rationale; the rationale must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided to give the applicant a reasonable opportunity to respond prior to that date. |
The decision on review shall be made within 60 days (45 days for a claim based on disability) of receipt of the request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than 120 days (90 days for a claim based on disability) after receipt of a request for review. If such an extension of time is required, written notice of the extension shall be furnished to the applicant before the end of the original period. The decision on review shall be made in writing, shall be written in a manner calculated to be understood by the applicant, and shall include specific references to the provisions of the Plan on which such denial is based. If the decision on review is not furnished within the time specified above, the claim shall be deemed denied on review.
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If the applicant’s appeal of the denial of the applicant’s benefits claim is denied in whole or in part, the Committee shall provide a written notice to the applicant, using language calculated to be understood by the applicant, setting forth:
| (a) | The specific reasons for such denial of the appeal; |
| (b) | Specific reference to pertinent provisions of this Plan on which such denial of the appeal is based; |
| (c) | A statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the applicant’s benefits claim (and a document, record or other information shall be considered “relevant” to the benefits claims as provided in Section 2560.503-1(m)(8) of the Department of Labor Regulations); |
| (d) | A statement describing the applicant’s right to bring an action under Section 502(a) of ERISA; |
| (e) | With respect to claims based on disability, the notice shall also set forth the following: |
| (i) | A discussion of the decision, including an explanation of the basis for disagreeing with or not following: |
| (A) | The views presented by the applicant to the Committee of health care professionals treating the applicant and vocational professionals who evaluated the applicant; |
| (B) | The views of medical or vocational experts whose advice was obtained on behalf of the Committee in connection with an applicant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; and |
| (C) | A disability determination regarding the applicant presented by the applicant to the Committee made by the Social Security Administration; |
| (ii) | If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, applying the terms of this Plan to the applicant’s medical circumstances, or a statement that such explanation will be provided free of change upon request; |
| (iii) | Either the specific internal rules, guidelines, protocols, standards or other similar criteria of this Plan relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria of this Plan do not exist; and |
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| (iv) | The notice shall be provided in a culturally and linguistically appropriate manner (as described in Section 2560.503-1(o) of the Department of Labor Regulations). |
Any action brought to enforce any claim or to obtain any benefit under this Plan must be brought forth within three (3) years from the date of the final claim appeal denial. Any action brought to enforce any claim or to obtain any benefit under this Plan must be litigated in Franklin County state court in Ohio or the United States District Court for the Southern District of Ohio and no other.
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AMENDMENT AND TERMINATION
| (a) | It is the expectation of the Employer that it will continue the Plan and the payment of contributions hereunder indefinitely, but the continuation of the Plan is not assumed as a contractual obligation of the Employer; and the right is reserved by the Employer at any time to permanently discontinue its contributions hereunder. In the event that the Plan is terminated in whole or in part or if contributions by the Employer are completely discontinued, the interest of all affected Participants shall be fully vested and non-forfeitable. |
| (b) | This Plan may be terminated by the Board of Directors of the Company at any time when its judgment, business, financial or other good causes make such termination necessary. Such termination shall become effective upon the execution and delivery by the Company to the Trustee of a written instrument signed on its behalf by its President or any officer and stating the fact of such termination. |
| (c) | Upon termination of the Plan, further payment of the Employer contributions to the Trust shall cease. The Trustees shall notify each Participant of the termination of the Plan. Each Participant shall be entitled to receive the entire amount of his Account balances and the Trustee shall make payment to each Participant of such amount in cash or in assets of the Trust Fund, as the Trustee shall determine. |
| (d) | For purposes of this Section, each Employer may unilaterally decide to terminate its participation in the Plan without forcing the termination of any other Employer’s participation in the Plan, unless the Company terminates the Plan in its entirety pursuant to subsection (b) of this Section. The unilateral decision of an Employer to terminate its participation in the Plan shall be treated as a termination of only those Participants (and their ESOP Accounts) who are employed by said Employer. |
| (a) | the duties and liabilities of the Trustee cannot be substantially changed without his consent; and |
| (b) | no amendment shall reduce a Participant’s benefits to less than the amount such Participant would be entitled to receive if such Participant had resigned from the employ of all of the Employers and Controlled Group Members on the date of the amendment. |
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would receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately prior to the merger, consolidation or transfer (if the Plan had then terminated). |
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TOP-HEAVY PROVISIONS
| (a) | The term “Compensation” means compensation as defined in Section 415(c)(3) of the Code, including the items specified in Treasury Regulation Section 1.415-2(d)(2)(i) and excluding the items specified in Treasury Regulation Section 1.415-2(d)(3); provided, however, that, effective for Plan Years beginning after December 31, 1997, the items specified in Section 415(c)(3)(D) of the Code shall be included; and provided further, that in no event shall Compensation exceed the limitation in effect for any Plan Year under Section 401(a)(17) of the Code. |
| (b) | The term “Determination Date” with respect to any Plan Year means the last day of the preceding Plan Year (or, in the case of the first Plan Year of the Plan, the last day of the first Plan Year). |
| (c) | The term “Key Employee” means any Employee or former Employee (including any deceased Employee) who is a key employee pursuant to the provisions of Section 416(i)(1) of the Code and any Beneficiary of such Employee or former Employee. |
| (d) | The term “Non-Key Employee” means any Employee who is not a Key Employee. |
| (e) | The term “Permissive Aggregation Group” means those plans included in the Employer’s Required Aggregation Group in conjunction with any other plan or plans of the Employer, so long as the entire group of plans would continue to meet the requirements of Sections 401(a)(4) and 410 of the Code. |
| (f) | The term “Required Aggregation Group” shall include (i) all plans of the Employer in which a Key Employee is a participant, and (ii) all other plans of Employer which enable a plan described in clause (i) hereof to meet the requirements of Sections 401(a)(4) or 410 of the Code. |
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| (i) of this Section with “90 percent” substituted for “60 percent” each place where “60 percent” appears in such definition. |
| (h) | The term “Super Top-Heavy Plan” with respect to a particular Plan Year means a plan that, as of the Determination Date, would qualify as a Top-Heavy Plan under the definition in subsection (j) of this Section with “90 percent” substituted for “60 percent” each place where “60 percent” appears in such definition. A plan is also a “Super Top-Heavy Plan” if it is part of a Super Top-Heavy Plan Group. |
| (i) | The term “Top-Heavy Plan Group” with respect to a particular Plan Year means a Required or a Permissive Aggregation Group if the sum, as of the Determination Date, of the present value of the cumulative accrued benefits for Key Employees under all defined benefit plans included in such group and the aggregate of the account balances of Key Employees under all defined contribution plans included in such group exceeds 60 percent of a similar sum determined for all Employees covered by the plans included in such group. |
| (j) | The term “Top-Heavy Plan” with respect to a particular Plan Year means (i) in the case of a defined contribution plan, a plan for which, as of the Determination Date, the aggregate of the accounts (within the meaning of Section 416(g) of the Code and the regulations thereunder) of Key Employees exceeds 60 percent of the aggregate of the accounts of all Participants under the plan, with the accounts valued as of the relevant Valuation Date, (ii), in the case of a defined benefit plan, a plan for which, as of the Determination Date, the present value of the cumulative accrued benefits payable under the plan (within the meaning of Section 416(g) of the Code and the regulations thereunder) to Key Employees exceeds 60 percent of the present value of the cumulative accrued benefits under the plan for all Employees, with present value of accrued benefits to be determined in accordance with the actuarial assumptions specified in such defined benefit plan, and (iii) a plan that is part of a Top-Heavy Plan Group. Notwithstanding the foregoing provisions of this subsection, however, a plan shall be deemed not to be a Top-Heavy Plan if it is part of a Required or Permissive Aggregation Group that is not a Top-Heavy Plan Group. |
| (k) | The term “Valuation Date” means the most recent date on or immediately preceding the Determination Date on which accounts are valued under Article IV. |
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the Plan enables a defined benefit plan included in such group to meet the requirements of Section 401(a)(4) or 410 of the Code, the minimum allocation of Employer contributions to the ESOP Account of each non-Key Employee shall be 3 percent of the Compensation of such Non-Key Employee. Any minimum allocation to the ESOP Account of a Participant required by this Section shall be made without regard to any Social Security contribution made by the Employer on behalf of the Participant. Notwithstanding the minimum top-heavy allocation requirements of this Section, in the event that the Plan is a Top-Heavy Plan, each Non-Key Employee hereunder who is also covered under a top-heavy defined benefit plan maintained by the Employer will receive the top-heavy benefits provided for under such defined benefit plan in lieu of the minimum top-heavy allocation under the Plan. |
Years of ServiceVested Percentage
Less than 2 years0%
2 years but less than 3 years20%
3 years but less than 4 years40%
4 years but less than 5 years60%
5 years but less than 6 years80%
6 years or more100%
The vesting schedule described in the immediately preceding sentence shall cease to be applicable when the Plan ceases to be a Top-Heavy Plan, provided that the percentage of an Employee’s ESOP Account that becomes non-forfeitable pursuant thereto before the Plan ceases to be a Top-Heavy Plan shall remain non-forfeitable, and the change in the vesting schedule which occurs when the Plan ceases to be a Top-Heavy Plan shall be subject to the provisions of Section 5.2.
| (a) | In applying this Article, any Employer required to be combined under Section 414(b), (c), or (m) of the Code shall be treated as a single Employer, and the qualified plans maintained by such single Employer shall be taken into account. |
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| satisfies Section 12.3; and the minimum benefit required for a Non-Key Employee in the Plan under Section 12.3 will be reduced or eliminated, in accordance with the requirements of Section 416 of the Code and the Treasury Regulations thereunder, if a minimum contribution or benefit is made or accrued in whole or in part in respect to such other plan(s). |
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MISCELLANEOUS
| (a) | Any member of the Controlled Group or any affiliate of the Company may, with the consent of the Company, adopt the Plan and thereby become an Employer hereunder by executing an instrument evidencing such adoption on the order of its board of directors and filing a copy thereof with the Company and the Trustee, and such instrument shall (subject to such terms and conditions as the Company may require) become incorporated in the Plan by reference. |
| (b) | Any instrument of adoption pursuant to subsection (a) of this Section shall: |
| (i) | specify the effective date of the adoption of the Plan by the Employer; |
| (ii) | set forth the class or classes of Employees of the Employer eligible to participate in the Plan; |
| (iii) | specify what service is to be credited for prior service with the adopting Employer; and |
| (iv) | evidence the Employer’s intent to be bound by all provisions of the Plan and its related Trust Agreement as amended from time to time. |
| (c) | The Company at any time in its discretion may determine that an Employer shall no longer participate in the Plan and may direct that such Employer withdraw from the Plan. Any Employer may similarly elect to terminate its participation in the Plan at any time. |
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13.5 | Benefits Payable by Trust. All benefits payable under the Plan shall be paid or provided for solely from the Trust, and the Employer assumes no liability or responsibility therefor. |
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| benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the Participant resumed and then terminated employment on account of death. |
| (b) | Differential Wage Payments. For Plan Years beginning on or after January 1, 2009, (i) an individual receiving a differential wage payment, as defined in Code Section 3401(h)(2), shall be treated as an Employee of the Employer making the payment, and (ii) the differential wage payment shall be treated as Compensation. |
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ARTICLE XIV
INDEPENDENT FIDUCIARY
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EXECUTION
IN WITNESS WHEREOF the Plan, as amended and restated, is executed, subject to Board of Directors approval, effective as of the April 1, 2015 Effective Date, but on the actual dates below.
ADVANCED DRAINAGE SYSTEMS, INC.
By
Title:
Date:
ADS STRUCTURES, INC.
By
Title:
Date:
ADVANCED DRAINAGE OF OHIO, INC.
By
Title:
Date:
ADS VENTURES, INC.
By
Title:
Date:
SPARTAN CONCRETE, INC.
By
Title:
Date:
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