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EXHIBIT 4 (c)
ADM
EMPLOYEE STOCK OWNERSHIP PLAN
FOR SALARIED EMPLOYEES
(As Amended and Restated Effective April 1, 1998)
ARTICLE I
INTRODUCTION
1.1 Plan; Purpose. The ADM EMPLOYEE STOCK OWNERSHIP PLAN FOR
HOURLY EMPLOYEES is sponsored by the Company primarily to
provide Eligible Employees with a means to acquire an
ownership interest in the Company, and also to provide
Eligible Employees with a means to save for their
retirement.
1.2 Qualified Stock Bonus and Employee Stock Ownership Plan.
The Plan is a defined contribution plan that is intended to
qualify under Code 401(a). The portion of the Plan that
consists of the ESOP Subaccounts is a stock bonus and
employee stock ownership plan (within the meaning of Code
4975(3)(7)) that was established effective April 1, 1998,
and is designed to invest in Company Stock; the portion of
the Plan that consists of the Non-ESOP Subaccounts (other
than Predecessor Plan Subaccounts) is a stock bonus plan to
which contributions were discontinued effective April 1,
1988, and which is also designed to invest in Company Stock;
and the portion of the Plan that consists of the Predecessor
Plan Subaccounts reflect account balances transferred from
other plans (as a result of a merger or account transfer)
which will retain the status of the Predecessor Plan.
The employee stock ownership portion of the Plan includes a
cash or deferred arrangement that is intended to qualify
under Code 401(k).
1.3 Plan Document. The Plan document consists of this document,
the various appendices to this document, the List of
Participating Employers for the Plan, the List of
Predecessor Employers for the Plan, the List of Predecessor
Plan Subaccounts for the Plan and any document that is
expressly incorporated by reference into the Plan.
1.4 Effective Date of Document. The Plan (as amended and
restated in this document) is effective April 1, 1998.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions.
2.1.1 "Account" means the bookkeeping account maintained to
reflect the Participant's interest in the Trust Fund.
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2.1.2 "Active Participant" means an Eligible Employee who has
become and remains an Active Participant under Article III.
2.1.3 "Affiliate" means any corporation that is a member of
the same controlled group as the Company as defined in Code
414(b), any business entity that is under common control
with the Company as defined in Code 414(c), any business
entity that is a member of an affiliated service group with
the Company as defined in Code 414(m), or any other
business entity that is required to be aggregated and
treated as one employer with the Company under Code
414(o). For purposes of applying the limits of Code 415,
Code 414(b) and 414(c) will be applied as modified by
Code 415(h).
2.1.4 "Annual Addition" means any of the following amounts
credited to the Participant as of any date within the Plan
Year:
(a) Employee after-tax contributions credited under any
defined contribution plan maintained by the Company or
an Affiliate (but not rollover contributions);
(b) Employer contributions credited under any defined
contribution plan or simplified employee pension plan
maintained by the Company or an Affiliate, including
Before-Tax Contributions credited under this Plan
(including excess contributions distributed under Sec.
6.2, but not including excess deferrals distributed
under Sec. 6.1), and Matching and Non-Matching
Contributions credited under this Plan (including
excess contributions distributed under Sec. 6.2);
(c) Forfeitures credited under any defined contribution
plan maintained by the Company or an Affiliate;
(d) Amounts credited to any individual medical benefit
account (as described in Code 415(l)(2)) under any
defined benefit plan maintained by the Company or an
Affiliate, provided that, such amounts will be
disregarded in applying the twenty-five percent (25%)
of compensation limit under Code 415(c)(1)(B); and
(e) Amounts credited to any separate account for retiree
medical benefits (as described in Code 419A(d)(2)) on
behalf of any Key Employee under any welfare benefit
fund maintained by the Company or an Affiliate.
Any contrary provision notwithstanding, employer
contributions under this Plan that are applied to pay
interest on an Exempt Loan will not be an Annual Addition if
no more than one-third (1/3rd) of the employer contributions
under this Plan that are applied to pay principal or
interest on an Exempt Loan for the Plan Year are allocated
to Participants who are Highly Compensated Employees.
2.1.5 "Before Tax Contribution" means a contribution made
pursuant to Sec. 4.1.
2.1.6 "Beneficiary" means a person or persons designated as
such pursuant to Sec. 12.4.
2.1.7 "Certified Earnings" means the total compensation paid
to an Active Participant by a Participating Employer during
that portion of the Plan Year in which he/she is an Active
Participant, subject to the following:
(a) Specific Inclusions. Certified Earnings includes:
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(1) Before-Tax Contributions to this Plan (and any
contributions made by pay reduction to any other
qualified cash or deferred arrangement that forms
part of a Plan maintained by the Company or an
Affiliate), and contributions made by pay
reduction to the ADM Flexible Spending Plan (or
any other cafeteria plan (as defined in Code
125) maintained by the Company or an Affiliate).
(2) Overtime pay, vacation pay, holiday pay, pay for
jury duty and lump-sum payments in lieu of pay
increases.
(3) Sick pay or short-term disability payments paid
directly by a Participating Employer (not
including any amounts paid by an insurance carrier
under an insured disability program).
(b) Specified Exclusions. Certified Earnings does not
include bonuses, expense allowances or reimbursements,
severance pay, payments or contributions to or for the
benefit of an individual under any other deferred
compensation, pension, profit sharing, insurance, or
other employee benefit plan (except as expressly
provided above), stock options, stock appreciation
rights or cash payments in lieu thereof, merchandise or
service discounts, non-cash employee awards, earnings
payable in a form other than cash, or other fringe
benefits.
(c) Special Rule for Foreign Assignments. Certified
Earnings for persons working outside the United States
is limited to base compensation as so characterized on
the payroll system of the Company and does not include
any extra or added compensation due to the foreign
assignment (such as relocation allowance, education
allowance, or other reimbursements or allowances) and,
in the case of an Employee who is working for an
eligible foreign affiliate, will not include any amount
paid by the Company that is the equivalent of the tax
imposed under Code 3101.
(d) Special Rule for Commissions. Certified Earnings
include commissions when paid and not when earned.
(e) Code Section 401(a)(17) Limit. Certified Earnings do
not include any amounts in excess of the limit in
effect under Code 401(a)(17) for any Plan Year.
2.1.8 "Code" means the Internal Revenue Code of 1986, as
amended.
2.1.9 "Company" means Archer Daniels Midland Company.
2.1.10 "Company Stock" means common stock of the Company.
2.1.11 "Eligible Employee" means the following:
(a) General Rule. An Eligible Employee is an Employee who
satisfies the following criteria:
(1) The Employee is paid on a regular stated salary
basis, a drawing account plus commission basis or
wholly on a commission basis, or is employed in an
office clerical position.
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(2) The Employee is employed with a Participating
Employer (while it is a Participating Employer).
(3) The Employee is not excluded under any one of the
following categories:
(A) Any individual who is compensated on a stated
salary basis but who is nevertheless
classified as an hourly employee by the
Company, and who is eligible to participate
in the ADM Employee Stock Ownership Plan for
Hourly Employees.
(B) Any individual who is classified as a
probationary or temporary employee by the
Company.
(C) Any individual who is classified as an
independent contractor, or as having any
status other than a common-law employee, by
the Company (regardless of whether such
individual is subsequently determined to be a
common-law employee or an employee for any
other purpose).
(D) Any individual who is a citizen or resident
of a foreign country unless the Company
expressly extends eligibility to such
individual, such individual does not receive
contributions under any funded plan of
deferred compensation in a foreign country,
and such individual is on the payroll system
of the Company or an Affiliate in the United
States.
(E) Any individual who is a Leased Employee with
respect to the Company or an Affiliate.
(b) Collective Bargaining Employees. An Employee is not an
Eligible Employee during any period he/she is a member
of a unit of Employees covered by a collective
bargaining agreement unless the agreement expressly
provides that he/she is eligible to participate in this
Plan. For this purpose, a collective bargaining
agreement will be deemed to continue in effect after it
expires during the pendency of collective bargaining
negotiations until the parties have negotiated to
"impasse" as determined by the Company, and an Employee
thereafter will be an Eligible Employee if and only if
participation is part of the impasse proposal of the
Company or the Employee was an Eligible Employee before
the collective bargaining agreement expired and the
Company elects to continue such status.
(c) Authorized Leaves of Absence. An Employee will continue as
an Eligible Employee during any authorized and paid leave of
absence if he/she was an Eligible Employee prior to the start of
such leave until Termination of Employment or the happening of
any event that would have caused the Employee to cease to be an
Eligible Employee if he/she had not been on a leave of absence
(e.g., if his/her employer ceases to be a Participating
Employer).
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2.1.12 "Employee" means any common-law employee of the Company
or an Affiliate (while it is an Affiliate) and any Leased
Employee with respect to the Company or an Affiliate;
provided that, a Leased Employee will not be an Employee if
Leased Employees do not constitute more than twenty percent
(20%) of the combined workforce of the Company and
Affiliates and the Leased Employee is covered by a plan of
the leasing organization that is described in Code
414(n)(5).
An individual who is employed by an eligible foreign
affiliate and who is a citizen or resident of the United
States will be treated as an Employee of the Company for the
period of his/her employment with the eligible foreign
affiliate provided the individual does not receive
contributions under any funded plan of deferred compensation
with respect to remuneration received from the eligible
foreign affiliate. An "eligible foreign affiliate" is any
foreign entity that satisfies the following requirements:
(i) ten percent (10%) or more of the voting stock or profits
interest of the foreign entity is owned by the Company or a
domestic Affiliate of the Company, and (ii) the Company has
entered into an agreement under Code 3121(l) that applies
to individuals employed by that foreign entity who are
citizens or residents of the United States.
2.1.13 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
2.1.14 "Exempt Loan" means a loan or other extension of credit
to the Plan to enable the Plan to acquire shares of Company
Stock.
2.1.15 "Highly Compensated Employee" means an Employee who was
a five-percent owner (as defined in Code 414(q)(2)) at any
time during the prior Plan Year or current Plan Year, or an
Employee who received compensation in excess of the amount
in effect under Code 414(q)(1)(A) for the prior Plan Year,
with "compensation" for this purpose meaning compensation as
defined in Sec. 6.3.3.
2.1.16 "Hour of Service" means each of the following (but in
no event will duplicate credit be given for the same hour
under more than one subsection):
(a) Work Periods. Each hour for which the individual is
paid or entitled to payment by the Company or an
Affiliate (while it is an Affiliate) for the
performance of services, with overtime hours credited
on a straight-time basis.
(b) Non-Work Periods. Each hour for which the individual is
paid or entitled to payment by the Company or an Affiliate (while
it is an Affiliate) on account of a period of time during which
no services are performed (irrespective of whether the employment
relationship has terminated) due to vacation (but excluding hours
attributable to accrued vacation for which payment is made in
lieu of actual time off from work), holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or
leave of absence; provided that, no more than five hundred and
one (501) hours will be credited under this subsection for any
single continuous period during which the individual performs no
services. Hours will not be credited under this subsection with
respect to a payment under a plan maintained to comply with
applicable workers' compensation, unemployment compensation, or
disability insurance laws, or with respect to a payment which
reimburses the individual for medical or medically-related
expenses.
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(c) Back Pay Awards. Each hour for which back pay,
irrespective of mitigation of damages, is either
awarded or agreed to by the Company or an Affiliate
(while it is an Affiliate), with such hours to be
credited to the computation period or periods to which
the award or agreement pertains, rather than to the
computation period in which the award, agreement, or
payment is made.
(d) Credit if No Hour Records Maintained. If an individual
is within a classification for which a record of hours
for the performance of services is not maintained, the
individual will be credited with one hundred and ninety
(190) hours of service for each month for which he/she
would otherwise be credited under (a), (b) or (c) with
at least one Hour of Service.
The Company may use any records to determine hours of
service which it considers an accurate reflection of the
actual facts.
2.1.17 "Leased Employee" means an individual defined as such
under Code 414(n); generally, any individual who is not a
common-law employee of the Company or an Affiliate, but who
performs services for the Company or Affiliate (while it is
an Affiliate) pursuant to an agreement with any other
person, provided such individual has performed such services
for the Company or Affiliate on a substantially full-time
basis for a period of at least one year and such services
are performed under the primary direction and control of the
Company or Affiliate.
2.1.18 "Matching Contribution" means a contribution made
pursuant to Sec. 5.1.
2.1.19 "Non-Matching Contribution" means a contribution made
pursuant to Sec. 5.2.
2.1.20 "Normal Retirement Age" means age 65.
2.1.21 "Participant" means either an Active Participant or an
Employee or former Employee who is no longer an Active
Participant but who still has an Account under the Plan (and
also includes an Employee or former Employee who has a
Rollover Subaccount but who has not become an Active
Participant).
2.1.22 "Participating Employer" means the Company and any
Affiliate that is included on the List of Participating
Employers maintained for the Plan during the effective
period specified on such list (provided that an employer
will automatically cease to be a Participating Employer as
of the date it ceases to be an Affiliate).
2.1.23 "Plan" means the ADM Employee Stock Ownership Plan for
Salaried Employees, as amended.
2.1.24 "Plan Year" means the calendar year.
2.1.25 "Predecessor Employer" means any business entity from
whose employment a group of Employees has been transferred
to employment with the Company or an Affiliate, or any
member of a controlled group of corporations of which an
Affiliate used to be a member prior to becoming a member of
the controlled group of the Company.
2.1.26 "Spouse" means a person of the opposite sex to whom the
Participant is legally married (including a common-law
spouse in any state that recognizes common-law marriage).
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2.1.27 "Termination of Employment" means resignation,
discharge, retirement, death or the happening of any other
event or circumstance that results in the severance of the
employer-employee relationship with the Company and all
Affiliates; provided that, solely to determine whether a
Participant is entitled to a distribution from the Plan, a
Termination of Employment will not be deemed to have
occurred unless there has been a separation from service
which the Company determines satisfies the requirements of
Code 401(k)(2)(B)(i)(I).
2.1.28 "Trust Fund" means the trust fund or funds (or any
group annuity contract with an insurance company) that
serves as a funding vehicle for the Plan.
2.1.29 "Trustee" means a trustee (or insurance company)
appointed and acting as such with respect to all or any
portion of the Trust Fund.
2.1.30 "Unallocated Reserve" means the portion of the Trust
Fund that consists of shares of Company Stock (and dividends
attributable thereto) that were acquired with the proceeds
of an Exempt Loan and that are held in suspense pending
allocation to Accounts.
2.1.31 "Valuation Date" means each day on which trading occurs
on the New York Stock Exchange.
2.2 Choice of Law. The Plan will be governed by the laws of the
State of Illinois to the extent that such laws are not
preempted by the laws of the United States. All
controversies, disputes, and claims arising hereunder must
be submitted to the United States District Court for the
Central District of Illinois, except as otherwise provided
in any trust agreement or group annuity contract governing
all or a portion of the Trust Fund.
ARTICLE III
PARTICIPATION
3.1 Start of Participation.
3.1.1 New Participants. An Employee will become an Active
Participant on the following date:
(a) The first entry date following the close of the first
eligibility measuring period during which he/she is
credited with one thousand (1,000) or more hours of
service provided he/she is then an Eligible Employee;
or
(b) The first day of the first calendar month thereafter on
which he/she is an Eligible Employee.
The "entry dates" for this purpose are each January 1 and
July 1 and, starting October 1, 1998, the first day of each
calendar month.
The "eligibility measuring period" for this purpose means
the twelve (12) consecutive month period beginning on the
date an Employee is first credited with one Hour of Service,
and each Plan Year thereafter starting with the Plan Year in
which falls the first anniversary of the date the Employee
is first credited with one Hour of Service.
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3.1.2 Former Participants. A former Active Participant will
again become an Active Participant on the first day of the
calendar month after he/she again becomes a Eligible
Employee.
3.1.3 Credit for Service with a Predecessor Employer. An
Employee will receive credit for service with a Predecessor
Employer for purposes of determining his/her eligibility to
participate in the Plan as required under Code 414(a) or
as provided under the List of Predecessor Employers
maintained for the Plan.
3.2 End of Participation. An Active Participant will continue
as such for so long as he/she remains an Eligible Employee,
and a Participant will continue as such until he/she
receives full payment of the balance of his/her Account.
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Before Tax Contributions.
4.1.1 Monthly Before-Tax Contributions. A Before-Tax
Contribution will be made for each month on behalf of each
Active Participant who elects to have his/her Certified
Earnings reduced in order to receive a Before-Tax
Contribution for any payroll period ending within such
month. The amount of the Before-Tax Contribution will equal
the amount of the reduction in Certified Earnings.
An Active Participant may elect to reduce his/her Certified
Earnings for a payroll period by any whole percent, but not
less than one percent (1%) or more than ten percent (10%).
An election (or the modification or revocation of an
election) may be made with such frequency as is deemed
appropriate by the Company, and must be made in such manner
and in accordance with such rules as may be prescribed for
this purpose by the Company (including by means of a voice
response or other electronic system under circumstances
authorized by the Company). An election (or the
modification or revocation of an election) will be effective
as soon as administratively practicable after the election
is made, but in no event will it be effective retroactive to
a payroll period that begins before the election is made.
4.1.2 Limits. Before-Tax Contributions will be subject to
the applicable limits set forth in Article VI. The Company
may limit the Before-Tax Contributions of the Highly
Compensated Employees during the Plan Year if and in such
manner as it deems appropriate in order to comply with such
limits for the Plan Year.
4.2 After-Tax Contributions. An Active Participant is not
required or permitted to make after-tax contributions under
the Plan.
4.3 Rollover Contributions. The Company in its sole discretion
may allow individuals who become Eligible Employees from a
Predecessor Employer and who receive an "eligible rollover
distribution" (as defined in Code 402(c)(4)) from a
qualified plan maintained by the Predecessor Employer to
rollover such distribution to this Plan. A rollover will
not be allowed under any other circumstances. An Eligible
Employee who makes a rollover will not become an Active
Participant merely as a result of the rollover (and thus
will not be eligible to receive Before-Tax, Matching or Non-
Matching Contributions) until he/she has become an Active
Participant in accordance with the normal rules of the Plan.
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A rollover election must be made in such manner and in
accordance with such rules as may be prescribed for this
purpose by the Company.
4.4 Form of Contribution. Before-Tax Contributions will be paid
to the Trust Fund as soon as practicable following the close
of each month (or on a more frequent basis if determined
appropriate by the Company) in cash or shares of Company
Stock, as determined at the sole discretion of the Company.
If Before-Tax Contributions are paid in shares of Company
Stock, such shares will be valued at the closing price of a
share of Company Stock on the New York Stock Exchange for
the business day immediately preceding the day the Company
directs its transfer agent to issue such shares to the Trust
Fund (as reported the next following business day in The
Wall Street Journal).
ARTICLE V
EMPLOYER CONTRIBUTIONS
5.1 Matching Contributions.
5.1.1 Matching Contributions-Before 1999. Prior to
January 1, 1999, a Matching Contribution will be made for
each month on behalf of each Active Participant who receives
a Before-Tax Contribution for any payroll period ending
within such month. The amount of the Matching Contribution
will be based on the amount of the Before-Tax Contributions
received by the Participant as determined under the
following schedule:
For Before-Tax Contributions The Matching Contribution
representing the following will
percent of Certified Earnings be the following percent of
for the
payroll periods ending within Participant's Before-Tax
the month Contributions for
payroll periods ending within
the month
The first 4% 100%
The next 2% 50%
Above 6% 0%
5.1.2 Matching Contributions-After 1998. Starting January 1,
1999, a Matching Contribution will be made for each Plan
Year on behalf of each Active Participant who receives a
Before-Tax Contribution for any payroll period ending within
the Plan Year. The amount of the Matching Contribution will
be based on the amount of the Before-Tax Contributions
received by the Participant as determined under the
following schedule:
For Before-Tax Contributions The Matching Contribution
representing the following will
percent of Certified Earnings be the following percent of
for the
payroll periods ending within Participant's Before-Tax
the Plan Year Contributions for
payroll periods ending within
the Plan Year
The first 4% 100%
The next 2% 50%
Above 6% 0%
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5.1.3 Limits. Matching Contributions will be subject to the
applicable limits set forth in Article VI. A Matching
Contribution will not be made with respect to any amount by
which Before-Tax Contributions must be reduced pursuant to
Sec. 6.1, 6.2 or 6.3 and any Matching Contributions made
before the amount of the reduction is determined will be
forfeited by the Participant and will be applied as a credit
against future Matching Contributions made on behalf of the
Participants.
5.2 Non-Matching Contributions.
5.2.1 Amount of Contribution. A Non-Matching Contribution
will be made for any Plan Year for which a payment is due on
an Exempt Loan or for any other Plan Year for which the
Company in its sole discretion determines that such a
contribution will be made. The amount of the Non-Matching
Contribution for a Plan Year will be determined at the sole
discretion of the Company, but will not be less than the
minimum amount sufficient to enable the Trustee to make the
payment due on any Exempt Loan for the Plan Year to the
extent that such payment cannot be satisfied from cash
dividends paid on shares of Company Stock held in the
Unallocated Reserve.
5.2.2 Allocation of Contribution. A Non-Matching
Contribution first will be applied to make the payment due
on any outstanding Exempt Loan and the shares of Company
Stock released from the Unallocated Reserve as a result of
such payment will be allocated as provided in Sec. 7.2.2. A
Non-Matching Contribution (or the portion thereof) that is
not applied to an Exempt Loan will be allocated among the
ESOP Non-Matching Stock Subaccounts of the eligible
Participants and the portion allocated to each such
Subaccount will be credited to the Subaccount as of the last
Valuation Date in the Plan Year. The portion of the Non-
Matching Contribution allocated to the ESOP Non-Matching
Stock Subaccount of each eligible Participant will equal the
total amount of the Non-Matching Contribution to be so
allocated multiplied by a fraction, the numerator of which
is the Certified Earnings of the Participant for the Plan
Year and the denominator of which is the aggregate Certified
Earnings of all eligible Participants for the Plan Year.
5.2.3 Eligible Participants. An eligible Participant for
purposes of this Section is:
(a) Any Employee who is an Active Participant on the last
business day of the Plan Year, and
(b) Any former Employee whose Termination of Employment
occurred during the Plan Year as a result of death or
disability and who was an Active Participant
immediately prior to his/her Termination of Employment.
A "disability" for this purpose means any disability that
entitles the Participant to benefits under any long-term
disability plan maintained by the Company or an Affiliate.
5.2.4 Limits. Non-Matching Contributions will be subject to
the applicable limits set forth in Article VI.
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5.3 Form of Contribution. Matching Contributions (calculated
based on year-to-date Before-Tax Contributions and Certified
Earnings) will be paid to the Trust Fund as soon as
practicable following the close of each month (or on a more
frequent basis if determined appropriate by the Company) in
cash or shares of Company Stock, as determined at the sole
discretion of the Company. Non-Matching Contributions will
be paid to the Trust Fund at such time or times as is deemed
appropriate by the Company in cash or shares of Company
Stock, as determined at the sole discretion of the Company.
If Matching or Non-Matching Contributions are paid in shares
of Company Stock, such shares will be valued at the closing
price of a share of Company Stock on the New York Stock
Exchange for the business day immediately preceding the day
the Company directs its transfer agent to issue such shares
to the Trust Fund (as reported the next following business
day in The Wall Street Journal).
ARTICLE VI
CONTRIBUTION LIMITS
6.1 Code Section 402(g) Limit on Before-Tax Contributions. The
Before-Tax Contributions made on behalf of a Participant for
a Plan Year will not exceed the limit in effect for such
Plan Year under Code 402(g). If Before-Tax Contributions,
in combination with all other elective deferrals (as defined
in Code 402(g)(3)) of the Participant for the Plan Year,
exceed such limit, then the Participant may attribute all or
any portion of the excess to this Plan and request that such
portion be distributed from this Plan. The portion of the
excess attributed to this Plan will first be reduced by the
amount of any reduction in Before-Tax Contributions made
under Sec. 6.2.1. The remaining excess, adjusted for
investment gain or loss, will be distributed as soon as
administratively practicable after a request for
distribution is filed by the Participant (but not later than
the April 15 following the close of the Plan Year). A
request for distribution must be filed by March 1 following
the close of the Plan Year in such manner and in accordance
with such rules as will be prescribed for this purpose by
the Company. The investment gain or loss allocable to an
excess hereunder will be determined in the same manner
generally used for allocating investment gain or loss to
Accounts, and will include only investment gain or loss for
the Plan Year (and not investment gain or loss for the
period from the close of the Plan Year to the date of the
distribution). For purposes of determining investment gain
or loss, distributions will be deemed to consist of
contributions made in reverse order of time ("last-in, first-
out"), starting with the last contributions made for the
Plan Year.
A Participant will forfeit any Matching Contributions that
were made based on Before-Tax Contributions that are
distributed under this Section. Such forfeitures will be
credited to an unallocated suspense account within the Trust
Fund, and the balance of the suspense account (including
investment gains thereon) will be applied to reduce future
Matching Contributions made on behalf of the Participants.
6.2 Code Section 401(k)/401(m) Nondiscrimination Test.
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6.2.1 Code Section 401(k) Test. The Plan will satisfy the
"average deferral percentage test" of Code 401(k)(3) each
Plan Year. If such test is not satisfied for a Plan Year,
then Before-Tax Contributions made on behalf of Highly
Compensated Employees for such Plan Year will be reduced to
the extent necessary to satisfy such test, with the amount
of the reduction to be determined and allocated among the
Highly Compensated Employees in the manner prescribed by
Code 401(k). The excess allocated to each Highly
Compensated Employee, adjusted for investment gain or loss,
will be distributed as soon as administratively practicable
after the close of the Plan Year (but not later than the
close of the next Plan Year). The investment gain or loss
allocable to an excess hereunder will be determined in the
same manner generally used for allocating investment gain or
loss to Accounts, and will include only investment gain or
loss for the Plan Year (and not investment gain or loss for
the period from the close of the Plan Year to the date of
the distribution). For purposes of determining investment
gain or loss, distributions will be deemed to consist of
contributions made in reverse order of time ("last-in, first-
out"), starting with the last contributions made for the
Plan Year.
The average deferral percentage test will be applied using
the current year testing method.
A Participant will forfeit any Matching Contributions that
were made based on Before-Tax Contributions that are
distributed hereunder. Such forfeitures will be credited to
an unallocated suspense account within the Trust Fund, and
the balance of the suspense account (including investment
gains thereon) will be applied to reduce future Matching
Contributions made on behalf of the Participants.
6.2.2 Code Section 401(m) Test. The Plan will satisfy the
"aggregate contribution percentage test" of Code 401(m)(2)
each Plan Year. If such test is not satisfied for a Plan
Year, the Matching Contributions made on behalf of Highly
Compensated Employees for such Plan Year will be reduced to
the extent necessary to satisfy such test, with the amount
of the reduction to be determined and allocated among the
Highly Compensated Employees in the manner prescribed by
Code 401(m). The excess allocated to each Highly
Compensated Employee, adjusted for investment gain or loss,
will be distributed as soon as administratively practicable
after the close of the Plan Year (but not later than the
close of the next Plan Year). The investment gain or loss
allocable to an excess hereunder will be determined in the
same manner generally used for allocating investment gain or
loss to Accounts, and will include only investment gain or
loss for the Plan Year (and not investment gain or loss for
the period from the close of the Plan Year to the date of
the distribution). For purposes of determining investment
gain or loss, distributions will be deemed to consist of
contributions made in reverse order of time ("last-in, first-
out"), starting with the last contributions made for the
Plan Year.
The aggregate contribution percentage test will be applied
by using the current year testing method.
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6.2.3 Multiple Use of the Alternative Limitations. The Plan
will satisfy the "multiple use" test of Code 401(m)(9)
each Plan Year. If such test is not satisfied for any Plan
Year, then the Before-Tax Contributions made on behalf of
Highly Compensated Employees for such Plan Year will be
reduced to the extent necessary to satisfy such test in
accordance with Sec. 6.2.1.
6.2.4 Incorporation of Guidance. All nondiscrimination tests
will be applied by reference to current regulations and
subsequent guidance issued by the IRS.
6.3 Maximum Annual Additions.
6.3.1 Defined Contribution Plan Limit. The Annual Additions
with respect to a Participant for a Plan Year will not exceed the
lesser of:
(a) The dollar amount in effect for such Plan Year under Code
415(c)(1)(A)), or
(b) Twenty-five percent (25%) of the Participant's compensation
for the Plan Year.
If a Participant has Annual Additions under more than one
defined contribution plan maintained by the Company or an
Affiliate, the Annual Additions under all such plans will
not exceed the above-specified limit. To the extent
necessary to comply with this limit: first, a refund will
be made of the employee after-tax contributions made by the
Participant, adjusted for investment gains; and second, a
refund will be made of the Before-Tax Contributions made by
the Participant, adjusted for investment gains (and, in
either case, if such type of contribution has been made
under more than one plan, then the refunds will be made
prorata from such plans). For purposes of determining
investment gain, refunds will be deemed to consist of
contributions made in reverse order of time ("last-in, first-
out"), starting with the last contributions made for the
Plan Year.
A Participant will forfeit any Matching Contributions that
were made based on Before-Tax Contributions that are
distributed hereunder. Such forfeitures will be credited to
an unallocated suspense account within the Trust Fund, and
the balance of the suspense account (including investment
gains thereon) will be applied to reduce future Matching
Contributions made on behalf of the Participants.
If an excess remains after the refunds and forfeitures
described above, then the excess will be allocated prorata
among the defined contribution plans in which the
Participant had Annual Additions (except that, the excess
will be allocated last to an individual medical benefit
account or a separate account for retiree medical benefits).
The excess allocated to this Plan will be charged against
the Matching and/or Non-Matching Contribution Account of the
Participant and will be credited to a suspense account
within the Trust Fund, and the balance of the suspense
account (including investment gains thereon) will be used to
reduce future Matching Contributions made on behalf of the
Participants.
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6.3.2 Defined Contribution/Defined Benefit Plan Limit. If a
Participant also participates in one or more defined benefit
plans maintained by the Company or an Affiliate, the sum of
the defined benefit plan fraction and defined contribution
plan fraction, determined in accordance with Code 415(e)
for any Plan Year may not exceed one (1.00). If the sum of
a defined benefit plan fraction and defined contribution
plan fraction would otherwise exceed one (1.00) for any Plan
Year, the pension benefit otherwise accrued and payable
under the defined benefit plans will be limited to the
extent necessary to reduce the sum of the fractions to one
(1.00). This multiple Plan limit will not apply to Plan
Years beginning after December 31, 1999.
6.3.3 Compensation. For purposes of applying the limits of
Code 415, "compensation" means compensation as defined in
Code 415(c)(3), and includes those items specified in
Treas. Reg. 1.415-2(d)(2) and does not include those items
specified in Treas. Reg. 1.415-2(d)(3). For Plan Years
beginning on or after January 1, 1998, "compensation" also
includes elective deferrals (as defined in Code
402(g)(3)), and any amounts that are contributed or deferred
at the election of the Participant and that are not
includible in gross income by reason of Code 125.
6.4 Deduction Limit. The contributions made for any Plan Year
will not exceed the maximum amount allowable as a deduction
in computing the taxable income for federal income tax
purposes of the Company and its Affiliates for the taxable
year of the Company that ends with or within the Plan Year,
and each contribution is expressly conditioned upon its
being deductible under Code 404.
ARTICLE VII
ACCOUNTS
7.1 Accounts.
7.1.1 Types of Subaccounts. The following Subaccounts will
be maintained under the Plan as part of the Account of each
Participant:
ESOP Subaccounts.
(a) An "ESOP Before-Tax Stock Subaccount" to reflect
amounts attributable to Before-Tax Contributions made
with respect to the period after April 1, 1998, other
than such amounts that have been diversified pursuant
to Sec. 8.3.
(b) An "ESOP Before-Tax Diversified Subaccount" to reflect
amounts attributable to Before-Tax Contributions made
with respect to the period after April 1, 1998, and
that have been diversified pursuant to Sec. 8.3.
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(c) An "ESOP Matching Stock Subaccount" to reflect amounts
attributable to Matching Contributions made with
respect to the period after April 1, 1998, other than
such amounts that have been diversified pursuant to
Sec. 8.3.
(d) An "ESOP Matching Diversified Subaccount" to reflect
amounts attributable to Matching Contributions made
with respect to the period after April 1, 1998, and
that have been diversified pursuant to Sec. 8.3.
(e) An "ESOP Non-Matching Stock Subaccount" to reflect
amounts attributable to Non-Matching Contributions made
after April 1, 1998, other than such amounts that have
been diversified pursuant to Sec. 8.3.
(f) An "ESOP Non-Matching Diversified Subaccount" to
reflect amounts attributable to Non-Matching
Contributions made after April 1, 1998, and that have
been diversified pursuant to Sec. 8.3.
(g) An "ESOP Tax Credit Stock Subaccount" to reflect
amounts attributable to employer contributions made
before 1987, other than such amounts that have been
diversified pursuant to Sec. 8.3.
(h) An "ESOP Tax Credit Diversified Subaccount" to
reflect amount attributable to employer contributions
made before 1987, and that have been diversified
pursuant to Sec. 8.3.
(i) An "ESOP Voluntary Stock Subaccount" to reflect
amounts attributable to employee after-tax
contributions made before 1983, other than such amounts
that have been diversified pursuant to Sec. 8.3.
(j) An "ESOP Voluntary Diversified Subaccount" to
reflect amounts attributable to employee after-tax
contributions made before 1983, and that have been
diversified pursuant to Sec. 8.3.
Non-ESOP Subaccounts.
(k) A "SIP Before-Tax Stock Subaccount" to reflect
amounts attributable to Before-Tax Contributions made
with respect to the period before April 1, 1998.
(l) A "SIP Matching Stock Subaccount" to reflect amounts
attributable to Matching Contributions made with
respect to the period before April 1, 1998.
(m) A "Rollover Subaccount" to reflect amounts
attributable to rollover contributions.
(n) A "Predecessor Plan Subaccount" to reflect amounts
attributable to any transfer received from a
Predecessor Plan (and more than one Predecessor Plan
Subaccount may be maintained with respect to a given
merger or transfer as deemed appropriate by the Company
to Account for different contribution sources).
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Additional Subaccounts may also be maintained if considered
appropriate in the administration of the Plan.
7.1.2 Balance of Accounts. A Subaccount (other than an ESOP
Diversified Subaccount or a Predecessor Plan Subaccount)
will have a stock balance expressed in shares of Company
Stock, and will have a cash balance expressed in dollars to
reflect cash contributions, cash dividends, cash repayments
on a loan made to a Participant and other cash amounts
received by the Trust Fund that are held in cash or short
term investments pending investment in shares of Company
Stock, and also to reflect any outstanding loan made to a
Participant and drawn from the Subaccount. An ESOP
Diversified Subaccount and Predecessor Plan Subaccount will
have a cash balance, but will not have a stock balance
unless a pooled investment fund that is designed to invest
primarily in Company Stock is established as an available
investment option and share accounting is used for such
pooled investment fund or unless, in the case of a
Predecessor Plan Subaccount, such Subaccount holds shares of
Company Stock.
7.1.3 Accounts for Bookkeeping Only. Accounts and
Subaccounts are for bookkeeping purposes only and the
maintenance of Accounts and Subaccounts will not require any
segregation of assets of the Trust Fund.
7.2 Valuation of Accounts.
7.2.1 Daily Adjustments. Subaccounts will be adjusted as of
each Valuation Date as follows:
(a) Contributions. Contributions made with respect to a
Participant will be added to the balance of the appropriate
Subaccount as soon as administratively practicable after such
contributions are paid into the Trust Fund; provided that, for
purposes of applying the nondiscrimination tests under Code
401(a)(4), 401(k) and 401(m), for purposes of determining the
maximum allocations under Code 415, for purposes of calculating
the deductions under Code 404 and for any other qualification
provision of the Code, a contribution will be treated as having
been made for the Plan Year designated by the Company provided
that the contribution is paid into the Trust Fund by such
deadline as may be prescribed for the applicable provision of the
Code.
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(b) Cash Dividends. The cash dividends paid on shares of
Company Stock held by the Trust Fund as of the record
date of such dividend (other than cash dividends paid
on shares held in the Unallocated Reserve) will be
allocated among the Subaccounts and the portion
allocated to each Subaccount will be added to balance
of the Subaccount as soon as administratively
practicable after such dividends are paid into the
Trust Fund. The portion of such cash dividends
allocated to each Participant Subaccount will be
determined by multiplying the total cash dividends
(other than cash dividends paid on shares held in the
Unallocated Reserve) by a fraction, the numerator of
which is the number of shares of Company Stock credited
to the Subaccount as of the date the dividends are paid
into the Trust Fund (or as of such other date as may be
established by the Company) and the denominator of
which is the total number of shares of Company Stock
held in all Participant Subaccounts as of the date the
dividends are paid into the Trust Fund (or as of such
other date as may be established by the Company).
The cash dividends paid on shares of Company Stock held
in the Unallocated Reserve as of the record date of
such dividend will be credited to the Unallocated
Reserve and will thereafter be applied to any payment
due for the Plan Year on the Exempt Loan.
(c) Stock Dividends and Splits. The stock dividends paid
on shares of Company Stock credited to any Subaccount
of a Participant as of the record date of such
dividend, and stock splits or reverse stock splits with
respect to shares of Company Stock credited to any
Subaccount of a Participant as of the record date of
such split, will be added to the balance of the
Subaccount as soon as administratively practicable
after the additional shares resulting from such stock
dividend, stock split or reverse stock split are paid
into the Trust Fund.
The stock dividends paid on shares of Company Stock
held in the Unallocated Reserve as of the record date
of such dividend, and stock splits or reverse stock
splits with respect to shares of Company Stock held in
the Unallocated Reserve as of the record date of such
dividend, will be credited to the Unallocated Reserve.
(d) Gain or Loss on Investment Funds. The gain or loss on
the mutual funds or other investment options in which
ESOP Diversified Subaccounts and Predecessor Plan
Subaccounts are invested will be reflected in such
Subaccounts as provided in Sec. 8.2.2.
(e) Loan Interest Payments. The interest payments received
on a loan made to a Participant will be added to the
balance of the appropriate Subaccount as soon as
administratively practicable after such interest
payments are paid into the Trust Fund. Interest
accrued but unpaid on a loan on the date of any
distribution from a Subaccount against which the loan
is to be offset will be added to the balance of the
Subaccount prior to such offset (or as of such earlier
date as may be specified in the loan procedures for the
participant loan program).
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(f) Withdrawals and Distributions. The withdrawals and
distributions made from a Subaccount will be subtracted
from the balance of the Subaccount as of the date the
withdrawal or distribution is made from the Trust Fund.
Any items of income, gain or loss, or expense not provided
for under the above provisions and not applied to pay
expenses of the Plan will be allocated among the Subaccounts
in accordance with rules prescribed for this purpose by the
Company and the portion allocated to each will be added to
or subtracted from the Subaccount as of the date established
by the Company.
7.2.2 Annual Adjustments for Non-Matching
Contributions/Shares Released from Unallocated Reserve. The
shares of Company Stock released from the Unallocated
Reserve for a Plan Year will be allocated among the ESOP Non-
Matching Stock Subaccounts of the eligible Participants (as
defined in Sec. 5.2.3) and the shares allocated to each such
Subaccount will be added to the balance of the Subaccount as
of the last Valuation Date in the Plan Year. The number of
shares of Company Stock allocated to the ESOP Non-Matching
Stock Subaccount of each eligible Participant will be
determined by multiplying the number of shares of Company
Stock released from the Unallocated Reserve by a fraction,
the numerator of which is the Certified Earnings of the
eligible Participant for the Plan Year and the denominator
of which is the Certified Earnings of all eligible
Participants for the Plan Year.
Any Non-Matching Contribution that is allocated to a
Participant under Sec. 5.2.2 (and not applied to an Exempt
Loan) will be added to the balance of the ESOP Non-Matching
Stock Subaccount of the Participant as of the last Valuation
Date in the Plan Year.
7.2.3 Processing Transactions Involving Accounts. Accounts
shall be adjusted to reflect contributions, distributions
and other transactions as provided in Sec. 7.2.1. However,
all information necessary to properly reflect a given
transaction in the Subaccounts may not be immediately
available, in which case the transaction will be reflected
in the Subaccounts when such information is received and
processed. Further, subject to express limits that may be
imposed under the Code, the Company reserves the right to
delay the processing of any contribution, distribution or
other transaction for any legitimate business reason
(including, but not limited to, failure of systems or
computer programs, failure of the means of the transmission
of data, force majeure, the failure of a service provider to
timely receive net asset values or prices, or to correct for
its errors or omissions or the errors or omissions of any
service provider). With respect to any contribution,
distribution or other transaction, the processing date of
the transaction will be considered the applicable Valuation
Date for that transaction and will be binding for all
purposes of the Plan.
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7.3 Statements. The Company may cause benefit statements to be
issued from time to time advising Participants of the status
of their Accounts, but it is not required to issue benefit
statements and the issuance of such benefit statements (and
any errors that may be reflected on benefit statements) will
not in any way alter or affect the rights of Participants
with respect to the Trust Fund.
7.4 Voting Rights on Company Stock.
7.4.1 Voting of Allocated Shares. A Participant (or
Beneficiary of a deceased Participant) may instruct the
Trustee as to how to vote shares of Company Stock credited
to his/her Account on any matter submitted for a vote to
shareholders of the Company. The number of shares with
respect to which a Participant may provide voting
instructions will equal the number of full and fractional
shares credited to his/her Account as of the record date for
determining the shareholders entitled to vote at the
shareholder meeting. The Company will cause the proxy
materials that are sent to shareholders to be sent to
Participants prior to the shareholders meeting at which the
vote is to be cast. The Company or Trustee will establish a
deadline by which instructions must be received from
Participants; the Trustee will tabulate the instructions
received by that deadline, will determine the number of
votes for and against each proposal, and will vote the
allocated shares in accordance with the directions received.
A Participant (or Beneficiary) will be a "named fiduciary"
to the extent of the voting control granted to the
Participant under this Section.
7.4.2 Voting of Unallocated Shares/Shares for Which
Directions Not Received. The Trustee will vote all shares
of Company Stock held in the Unallocated Reserve (if any)
and all shares of Company Stock credited to Accounts for
which instructions from the Participants (or Beneficiaries)
have not been received by the established deadline in the
same proportion as the vote cast pursuant to Sec. 7.4.1.
7.4.3 Effective Date. The voting procedures specified above
will apply with respect to the vote cast on any matter where
the record date established for determining the shareholders
entitled to vote falls on or after October 1, 1998. The
voting procedures in effect under this Plan (then called the
Savings and Investment Plan) immediately prior to April 1,
1998, will apply with respect to any other vote.
7.5 Tender or Exchange Offers Regarding Company Stock.
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7.5.1 Tender of Allocated Shares. A Participant (or
Beneficiary of a deceased Participant) may instruct the
Trustee as to whether or not to tender or exchange shares of
Company Stock credited to his/her Account in any tender or
exchange offer for shares of Company Stock. The number of
shares with respect to which a Participant may provide
instructions will equal the number of full and fractional
shares credited to his/her Account as of a date established
by the Company that precedes the date on which a response is
required to the offer (with appropriate adjustments to
reflect subsequent transactions with respect to the
Account). The Company will use reasonable efforts to cause
each Participant to be sent a notice of the terms of any
tender or exchange offer, and to be provided with forms by
which the Participant may instruct the Trustee to tender
shares of Company Stock credited to his/her Account, to the
extent permitted under the terms of such offer. The Company
or Trustee will establish a deadline by which instructions
must be received from Participants; the Trustee will
tabulate the instructions received by that deadline, will
determine the number of shares to tender and retain, and
will tender or retain the allocated shares in accordance
with the directions received.
A Participant (or Beneficiary ) may not instruct the Trustee
to tender or exchange some but less than all of the shares
of Company Stock credited to his/her Account, and an
instruction to tender or exchange less than all will be
deemed to be an instruction not to tender or exchange any
shares of Company Stock credited to his/her Account.
A Participant (or Beneficiary) will be a "named fiduciary"
to the extent of the investment control granted to the
Participant under this Section.
7.5.2 Tender of Unallocated Shares/Shares for Which No
Directions Received. The Trustee will tender or exchange,
or retain, shares of Company Stock held in the Unallocated
Reserve (if any) and shares of Company Stock credited to
Participant Accounts for which instructions from the
Participant (or Beneficiary) have not been received by the
established deadline, in the same proportion as the decision
made in Sec. 7.5.1.
ARTICLE VIII
INVESTMENT OF ACCOUNTS
8.1 Investment in Company Stock. The Subaccounts (other than an
ESOP Diversified Subaccount or a Predecessor Plan
Subaccount) will be invested in shares of Company Stock;
except that, such Subaccounts may be invested in cash or
other short-term investments pending investment in Company
Stock and may be invested in a loan made pursuant to any
participant loan program adopted by the Company. All shares
of Company Stock held under the Plan will be held in the
name of the Trustee or the nominee of the Trustee.
The portion of the Plan consisting of the ESOP Subaccounts
is intended to qualify as an employee stock ownership plan
and thus is designed to invest in Company Stock except to
the extent otherwise provided under this Plan.
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8.2 Investment in Other Investment Options.
8.2.1 Investment Options. A Participant (or Beneficiary
following the death of the Participant) will be allowed to
direct the investment of his/her ESOP Diversified
Subaccounts and Predecessor Plan Subaccounts among the
mutual funds or other investment options available under the
Plan. The Company will determine the mutual funds or other
investment options that will be made available under the
Plan for such investment (which may include a pooled
investment fund that is designed to invest primarily in
Company Stock if deemed appropriate by the Company), and may
at any time add to or remove from the mutual funds or other
investment options; provided that, at least three (3) mutual
funds or other investment options will be available at all
times.
8.2.2 Investment Gains or Losses. Investment gains or losses
of the Trust Fund with respect to an investment option will
be allocated as follows:
(a) In the case of any mutual fund, the value of that
portion of a Subaccount invested in the mutual fund as
of any date will equal the value of a share in such
fund multiplied by the number of shares credited to the
Subaccount.
(b) In the case of any pooled investment fund, gains or
losses on the pooled investment fund will be allocated
among the Subaccounts in proportion to the value of
that portion of each Subaccount invested in such fund
immediately prior to the allocation, and the gain or
loss allocated to each will be credited to or charged
against the Subaccount. Alternatively, unit values may
be established for a pooled investment fund in
accordance with investment rules prescribed for this
purpose by the Company, and the value of that portion
of a Subaccount invested in a pooled investment fund
will equal the value of a unit in such fund multiplied
by the number of units credited to the Subaccount.
(c) In the case of any investment that is held specifically
for a Subaccount, any gain or loss on such investment
will be credited to or charged against the Subaccount.
Any investment gain or loss of the Trust Fund that is not
directly attributable to the investment of the Account of
any Participant (including, for example, any "float" earned
on the disbursement account established for the Plan and not
treated as part of the compensation of the Trustee or paying
agent for the Plan, and any 12b-1 or similar fees paid to
the Plan) will be applied to pay administrative expenses of
the Plan, with any excess remaining at the close of the Plan
Year being allocated among the Accounts in accordance with
rules established for this purpose by the Company.
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8.2.3 Investment Direction Procedures. Investment directions
may be given with such frequency as is deemed appropriate by
the Company, and must be made in such percentage or dollar
increments, in such manner and in accordance with such rules
as may be prescribed for this purpose by the Company
(including by means of a voice response or other electronic
system under circumstances so authorized by the Company).
All investment directions will be complete as to the terms
of the investment transaction and will remain in effect
until a new investment direction is filed by the
Participant.
8.2.4 Processing Investment Transactions. Investment
directions will be processed as soon as administratively
practicable after proper investment directions are received
from the Participant. Neither the Plan nor the Company
provides a guarantee that investment directions will be
processed on a daily basis, or provides a guarantee in any
respect as to the processing time of an investment
direction. Notwithstanding the general provisions of Sec.
7.2.1, the Company reserves the right to not value an
investment option or a Subaccount on any given Valuation
Date for any reason deemed appropriate by the Company. The
Company further reserves the right to delay the processing
of any investment transaction for any legitimate business
reason (including, but not limited to, failure of systems or
computer programs, failure of the means of the transmission
of data, force majeure, the failure of a service provider to
timely receive values or prices, to correct for its errors
or omissions or the errors or omissions of any service
provider). With respect to any investment transaction, the
processing date of the transaction will be considered the
applicable Valuation Date for that transaction and will be
binding for all purposes of the Plan.
8.3 Reinvestments to Satisfy Diversification Rules. Starting
January 1, 1999, a Participant who has both attained age
fifty-five (55) and completed ten (10) years of service with
the Company or an Affiliate (while it is an Affiliate) may
elect to convert all or any number of his/her reinvestment
eligible shares to cash and have such cash credited to the
appropriate ESOP Diversified Subaccount to be invested in
the mutual funds or other investment options then available
under the Plan. For this purpose, service will include the
last period of uninterrupted service with a Predecessor
Employer if a defined contribution plan of the Predecessor
Employer is merged into this Plan or if the account balance
of the Participant under a defined contribution plan of the
Predecessor Employer is transferred to this Plan.
The "reinvestment eligible shares" for this provision are
all shares of Company Stock held in the ESOP Subaccounts of
the Participant.
A diversification election under this Section will be drawn
from the ESOP Subaccounts in the following order: ESOP Tax
Credit Stock Subaccount, ESOP Before-Tax Stock Subaccount,
ESOP Matching Stock Subaccount, ESOP Non-Matching Stock
Subaccount, and ESOP Voluntary Stock Subaccount.
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8.4 Source of Payments on an Exempt Loan. If an Exempt Loan is
outstanding, a Non-Matching Contribution will be made for
the Plan Year in an amount at least sufficient to make the
payment due on the Exempt Loan to the extent that such
payment cannot be made from cash dividends paid on shares of
Company Stock held in the Unallocated Reserve. Before-Tax
Contributions, Matching Contributions, and dividends paid on
shares allocated to Participant Accounts will not be used to
make payments on an Exempt Loan.
8.5 Participant Loan Program. The Company may establish a
participant loan program in accordance with ERISA
408(b)(1), the terms and conditions of which will be
determined by the Company and set forth in written loan
procedures that will be deemed to form part of the Plan.
The rules and regulations will apply on a uniform basis to
all Participants, and will not allow for an offset against
the balance of an Account upon default of a loan prior to
the date distributions are permitted under the Code
(regardless of whether a prior taxable event occurs in
connection with the loan under Code 72(p)).
8.6 Valuation of Non-Traded Shares. If shares of Company Stock
cease to be readily tradable on an established securities
market, all valuations of such shares for purposes of the
Plan will be performed by an independent appraiser as
provided in Code 401(a)(28)(C).
ARTICLE IX
VESTING
A Participant will have a fully vested and nonforfeitable
interest at all times in his/her Account under this Plan.
ARTICLE X
WITHDRAWALS WHILE EMPLOYED
10.1 Withdrawals for Hardship.
10.1.1 Withdrawal. A Participant may make a withdrawal from
an available Subaccount prior to the date he/she attains age
fifty-nine and one-half (59 1/2) if the withdrawal is on
account of an immediate and heavy financial need and the
withdrawal is needed to alleviate the financial need;
provided that, a withdrawal will not be allowed of a cash
amount less than one thousand dollars ($1,000) or of a
number of shares of Company Stock with a fair market value
less than one thousand dollars ($1,000) (or the total amount
available for withdrawal if less than such amount); provided
further that, no more than one withdrawal will be allowed in
any Plan Year.
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10.1.2 Available Subaccounts/Ordering. A withdrawal under
this Section will be made from the following Subaccounts and
in the following order: Tax-Credit Subaccount, ESOP Before-
Tax Stock Subaccount, SIP Before-Tax Stock Subaccount,
Rollover Subaccount, and Voluntary Subaccount; provided
that, a Participant may elect to receive a withdrawal from
his/her Voluntary Subaccount regardless of the otherwise
applicable ordering rules.
Any contrary provision notwithstanding, a withdrawal from
the SIP Before-Tax Stock Subaccount may not exceed an amount
equal to the balance of such Subaccount as of December 31,
1988, plus the amount of the additional Before-Tax
Contributions credited to such Subaccount after December 31,
1988, reduced by the amount previously withdrawn from such
Subaccount on account of hardship; and a withdrawal from the
ESOP Before-Tax Stock Subaccount may not exceed an amount
equal to the amount of the Before-Tax Contributions credited
to such Subaccount (regardless of whether such amounts have
been reinvested pursuant to Sec. 8.3), reduced by the amount
previously withdrawn account of hardship from such
Subaccount.
10.1.3 Immediate and Heavy Financial Need. A withdrawal will
be deemed to be on account of an immediate and heavy
financial need only if the withdrawal is for one of the
following reasons:
(a) Expenses for medical care (as defined in Code 213(d))
incurred by the Participant, the Spouse of the
Participant, or any dependent (as defined in Code
152) of the Participant, or expenses necessary for any
of such persons to obtain such medical care.
(b) Costs directly related to the purchase of the principal
residence of the Participant (excluding mortgage
payments).
(c) Payment of tuition, related educational fees and room
and board expenses for the next semester or quarter of
post-secondary education for the Participant or the
Spouse, child, or dependent (as defined in Code 152)
of the Participant.
(d) To prevent the eviction of the Participant from his/her
principal residence or foreclosure on the mortgage of
the principal residence of the Participant.
10.1.4 Needed to Alleviate Need. A withdrawal will be deemed
to be needed to alleviate an immediate and heavy financial
need only if:
(a) The withdrawal amount does not exceed the amount of the
immediate and heavy financial need (plus the amount
necessary to pay any federal, state or local income
taxes or penalties reasonably expected to result from
the withdrawal as determined by the Company).
(b) The Participant has obtained all distributions (other
than hardship distributions) and all nontaxable loans
currently available under all plans maintained by the
Company or an Affiliate.
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(c) The Participant agrees that the Before-Tax
Contributions to this Plan, and the elective and
employee contributions under all other qualified and
nonqualified plans of deferred compensation (including
stock option, stock purchase or similar plan)
maintained by the Company or an Affiliate, will be
suspended for at least twelve (12) months after the
receipt of the hardship distribution.
(d) For the calendar year immediately following the
calendar year of the withdrawal, the Participant may
not make contributions under all plans maintained by
the Company or any Affiliate in excess of the
applicable limit under Code 402(g) for such next
calendar year less the amount of his/her elective
contributions for the calendar year of the hardship
distribution.
10.1.5 Medium of Withdrawal. A withdrawal will be made in the
following medium at the election of the Participant:
(a) Fully in cash; or
(b) Fully in whole shares of Company Stock (with
any fractional share in cash).
10.2 Withdrawals After Age 59 1/2.
10.2.1 Withdrawals. A Participant may make a withdrawal from
an available Subaccount for any reason after he/she attains
age fifty-nine and one-half (59 1/2); provided that, a
withdrawal will not be allowed of a cash amount less than
one thousand dollars ($1,000) or of a number of shares of
Company Stock with a fair market value less than one-
thousand dollars ($1,000) (or the total amount available for
withdrawal if less than such amount); provided further that,
no more than one withdrawal will be allowed in any Plan
Year.
10.2.2 Available Subaccounts/Ordering. A withdrawal under
this Section will be made from the Subaccounts in the
following order: ESOP Before-Tax Diversified Subaccount,
ESOP Matching Diversified Subaccount, ESOP Non-Matching
Diversified Subaccount, ESOP Tax Credit Diversified
Subaccount, ESOP Before-Tax Stock Subaccount, ESOP Matching
Stock Subaccount, ESOP Non-Matching Stock Subaccount, ESOP
Tax Credit Stock Subaccount, SIP Before-Tax Stock
Subaccount, SIP Matching Stock Subaccount, Rollover
Subaccount, ESOP Voluntary Diversified Subaccount and ESOP
Voluntary Stock Subaccount; provided that, a Participant may
elect to receive a distribution from a Voluntary Subaccount
regardless of the otherwise applicable ordering rules.
10.2.3 Medium of Withdrawal. A withdrawal will be made in the
following medium at the election of the Participant:
(a) Fully in cash; or
(b) Fully in whole shares of Company Stock (with
any fractional share in cash).
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10.3 Withdrawals from Predecessor Plan Accounts. A Participant
may make a withdrawal from a Predecessor Plan Subaccount as
provided on the List of Predecessor Plan Accounts for the
Plan.
10.4 Withdrawal Procedures. A withdrawal request must be made in
such manner and in accordance with such rules as may be
prescribed for this purpose by the Company (including by
means of a voice response or other electronic system under
circumstances authorized by the Company).
ARTICLE XI
DISTRIBUTIONS AFTER TERMINATION
11.1 Benefit on Termination of Employment. A Participant will be
eligible to receive a distribution of the balance of his/her
Account following his/her Termination of Employment in
accordance with the terms of this Article.
11.2 Time, Form and Medium of Distribution.
11.2.1 Time of Distribution. A distribution will be made (or
distributions will commence) as soon as administratively
practicable after the Participant files a request for
distribution following his/her Termination of Employment,
but not later than sixty (60) days after the close of the
Plan Year in which he/she attains Normal Retirement Age (or
in which his/her Termination of Employment occurs, if
later).
11.2.2 Form of Distribution. A distribution will be made in
the following form:
(a) Retirements. If the Termination of Employment is
a normal retirement or an early retirement under the
ADM Retirement Plan, or if the Participant is receiving
disability payments under any long-term disability plan
maintained by the Company or an Affiliate, payment will
be made in either of the following forms at the
election of the Participant:
(1) A single-sum distribution of the
full balance of his/her Account; or
(2) Two or more partial distributions each
of which (other than the final distribution) is
not less than one-thousand dollars ($1,000) or a
number of shares of Company Stock with a fair
market value of not less than one-thousand dollars
($1,000); provided that, no more than one
distribution may be made in any calendar year.
(b) Vested Terminations. In all other cases, the
distribution will be in the form of a single-sum
distribution of the full balance of his/her Account
(partial distributions are not permitted).
11.2.3 Medium of Distribution. A distribution (other than
from a Predecessor Plan Account) will be made in the
following medium at the election of the Participant:
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(a) Fully in cash;
(b) Fully in whole shares of Company Stock (with
any fractional share in cash); or
(c) Partly in cash and partly in whole shares of
Company Stock.
A distribution from a Predecessor Plan Subaccount will be
made in cash unless otherwise specified in the List of
Predecessor Plan Accounts for the Plan.
11.2.4 Default Upon Failure to Request Distribution. If the
Participant fails to file a distribution request, a
distribution will be made as soon as administratively
practicable after the Participant attains Normal Retirement
Age (or after his/her Termination of Employment occurs, if
later) in the form of a single-sum distribution in whole
shares of Company Stock to the extent the Account is then
invested in shares of Company Stock (with the balance in
cash).
11.2.5 Ordering. A partial distribution will be drawn from
the Subaccounts in the following order: ESOP Before-Tax
Diversified Subaccount, ESOP Matching Diversified
Subaccount, ESOP Non-Matching Diversified Subaccount, ESOP
Tax Credit Diversified Subaccount, ESOP Before-Tax Stock
Subaccount, ESOP Matching Stock Subaccount, ESOP Non-
Matching Stock Subaccount, ESOP Tax Credit Stock Subaccount,
SIP Before-Tax Stock Subaccount, SIP Matching Stock
Subaccount, Rollover Subaccount, ESOP Voluntary Diversified
Subaccount and ESOP Voluntary Stock Subaccount; provided
that, a Participant may elect to receive a distribution from
a Voluntary Subaccount regardless of the otherwise
applicable ordering rules.
11.3 Cash-Out of Small Accounts. Any contrary provision
notwithstanding, if the value of a Participant's Account
does not exceed the cash-out amount (as defined below), and
the value of the Account did not exceed the cash-out amount
immediately prior to any previous distribution to the
Participant, a single-sum distribution of the full balance
of the Account will be made to the Participant as soon as
administratively practicable after his/her Termination of
Employment. If the Participant fails to file an election as
to the medium of distribution, the distribution will be made
in whole shares of Company Stock to the extent the Account
is invested in Company Stock (with the balance in cash).
The "cash-out amount" is $3,500 prior to, and is $5,000 on
and after, January 1, 1998.
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11.4 Minimum Distribution Rules. Any contrary provision
notwithstanding, distributions will be made as necessary to
comply with the minimum distribution rules of Code
401(a)(9) (including the incidental death benefit rules of
Code 401(a)(9)(G)). To calculate the minimum distribution
for the first year, the initial life expectancy (or joint
life and last survivor expectancy) will be determined based
on the age of the Participant and his/her Beneficiary on the
birthday in the calendar year in which the Participant
attains 70 1/2 (or retires, if later) using the expected return
multiples in Tables V and VI of Treas. Reg. 1.72-9 or, if
applicable, the appropriate minimum distribution incidental
benefit table in Prop. Treas. Reg. 1.401(a)(9)-2. To
calculate the minimum distribution for each succeeding year,
the initial life expectancy (or joint life and last survivor
expectancy) will be reduced by one for each succeeding year
(and life expectancies will not be redetermined each year).
A minimum distribution will be drawn from the Subaccounts in
the order specified in Sec. 11.2.5.
11.5 Distribution Procedures. A distribution request must
be made in such manner and in accordance with such rules as
may be prescribed for this purpose by the Company (including
by means of a voice response or other electronic system
under circumstances authorized by the Company).
ARTICLE XII
DISTRIBUTIONS AFTER DEATH
12.1 Benefit on Death. The Beneficiary of a Participant will be
eligible to receive a distribution of that portion of the
balance (or remaining balance) of the Participant's Account
allocated to such Beneficiary following the Participant's
death in accordance with the terms of this Article.
12.2 Time, Form and Medium of Distribution.
12.2.1 Time of Payment. A distribution will be made as soon
as administratively practicable after the death of the
Participant and the entitlement of the Beneficiary has been
determined by the Company.
12.2.2 Form of Distribution. A distribution will be made in
the form of a single-sum distribution of the full balance
payable to the Beneficiary.
12.2.3 Medium of Distribution. A distribution (other than
from a Predecessor Plan Subaccount) will be made in the
following medium, at the election of the Beneficiary:
(a) Fully in cash;
(b) Fully in whole shares of Company Stock (with any
fractional share paid in cash); or
(c) Partly in cash and partly in whole shares of
Company Stock;
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A distribution from a Predecessor Plan Subaccount will be
made in cash unless otherwise specified in the List of
Predecessor Plan Accounts for the Plan.
12.2.4 Default Upon Failure to Request Distribution. If the
Beneficiary fails to file an election as to the medium of
distribution, a distribution will be made in whole shares of
Company Stock to the extent the Account is then invested in
Company Stock (with the balance in cash).
12.3 Beneficiary Designation.
12.3.1 General Rule. A Participant may designate any person
(natural or otherwise, including a trust or estate) as
his/her Beneficiary to receive any balance remaining in
his/her Account when he/she dies, and may change or revoke a
Beneficiary designation previously made without the consent
of any Beneficiary named therein.
12.3.2 Special Requirements for Married Participants. If a
Participant has a Spouse at the time of death, such Spouse
will be his/her Beneficiary unless:
(a) The Spouse has consented in writing to the designation
of a different Beneficiary;
(b) The Spouse's consent acknowledges the effect of such
designation; and
(c) The Spouse's consent is witnessed by a notary public or
an authorized representative of the Plan.
Consent of a Spouse will be deemed to have been obtained if
it is established to the satisfaction of the Company that
such consent cannot be obtained because the Spouse cannot be
located, or because of such other circumstances as may be
prescribed by the Secretary of Treasury. A consent by a
Spouse will be effective only with respect to such Spouse,
and cannot be revoked. A Beneficiary designation that has
received spousal consent cannot be changed without spousal
consent.
12.3.3 Form and Method of Designation. A Beneficiary
designation must be made on such form and in accordance with such
rules as may be prescribed for this purpose by the Company. A
Beneficiary designation will be effective (and will revoke all
prior designations) only if it is received by the Company (or if
sent by mail, the post-mark of the mailing is) prior to the date
of death of the Participant. The Company may rely on the latest
Beneficiary designation on file with it (or may direct that
payment be made pursuant to the default provision of the Plan if
an effective designation is not on file) and will not be liable
to any person making claim for such payment under a subsequently
filed Beneficiary designation or for any other reason.
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12.3.4 Default Designation. If a Beneficiary designation is
not on file with the Company, or if no designated
Beneficiary survives the Participant, the Beneficiary will
be the person or persons surviving the Participant in the
first of the following classes in which there is a survivor,
share and share alike:
(a) The Participant's Spouse.
(b) The Participant's children, except that if any of
the Participant's children predecease the Participant
but leave issue surviving the Participant, such issue
will take by right of representation the share their
parent would have taken if living.
(c) The Participant's parents.
(d) The Participant's brothers and sisters.
(e) The Participant's estate.
The identity of the Beneficiary in each case will be
determined by the Company.
12.3.5 Successor Beneficiary. If a Beneficiary survives the
Participant but dies before receiving the full balance to
which he/she is entitled, the remaining balance will be
payable to the surviving contingent Beneficiary designated
by the Participant or otherwise to the estate of the
deceased Beneficiary.
12.3.6 Special Rule for Predecessor Plan Accounts. A
Beneficiary designation in effect under a predecessor plan
immediately prior to its merger into this Plan or transfer
of account balance to this Plan will be deemed to be valid
under this Plan with respect to the resulting Predecessor
Plan Subaccount (and only such subaccount) unless and until
changed or revoked by the Participant.
12.4 Multiple Beneficiaries. If more than one Beneficiary is
entitled to benefits following the death of a Participant,
the interest of each will be segregated for purposes of
applying this Article.
12.5 Minimum Distribution Rules. Any contrary provision
notwithstanding, distributions after the death of the
Participant will be made as necessary to comply with the
minimum distribution rules of Code 401(a)(9) (including
the incidental death benefit rules of Code 401(a)(9)(G)).
To comply with such minimum distribution rules, distribution
of the full balance payable to all Beneficiaries will be
made not later than the last day of the calendar year in
which falls the fifth (5th) anniversary of the date the
Participant dies.
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ARTICLE XIII
MISCELLANEOUS BENEFIT PROVISIONS
13.1 Valuation of Accounts Following Termination of
Employment.
13.1.1 Continued Adjustment of Accounts. If a distribution of
all or any portion of an Account is deferred or delayed for any
reason, the Account will continue to be adjusted to reflect
increases or decreases in the value of Company Stock, dividends,
and other investment gains or losses in accordance with the terms
of the Plan.
13.1.2 Segregation of Accounts/Disbursement Accounts. If
shares of Company Stock or other investments of an Account
are liquidated to allow for a distribution, the resulting
proceeds may be credited to a segregated account maintained
under the Plan for the benefit of the person to whom the
distribution is to be made, and any investment gains or
losses on such segregated account will be allocated solely
to such segregated account (and the Accounts of other
Participants or Beneficiaries will not be affected by such
investment gains or losses). Any such segregated account
may be held uninvested in cash, or invested in an interest-
bearing account or other short-term investment as directed
by the Company pending distribution from the Plan.
A disbursement account also will be established for the Plan
(either with the Trustee, any affiliate of the Trustee, or
any third party bank selected by the Company) to allow for
any distributions from the Plan. Such disbursement account
is separate and distinct from any segregated account
established under the prior paragraph, and any interest or
other income earned on such disbursement account will inure
to the benefit of the Plan and not the Participant. Such
interest or other income will be applied to pay
administrative expenses of the Plan or, pursuant to
agreement with the Trustee or paying agent for the Plan,
will be treated as part of the compensation of the Trustee
or paying agent for the Plan. In any event, a Participant
will have no claim to any income on any disbursement account
established for the Plan.
13.2 Direct Rollover Option. A distribution to a Participant,
the surviving Spouse of a Participant, or an alternate payee
under a qualified domestic relations order who is the Spouse
or former Spouse of a Participant may be made in the form of
a direct rollover to an individual retirement account or
annuity described in Code 408 or to another qualified plan
described in Code 401(a); except that, a qualified plan is
not available as a rollover alternative in the case of the
surviving Spouse of the Participant. A direct rollover will
be allowed only to the extent that the distribution is an
"eligible rollover distribution" (as defined in Code
402(f)) (e.g., an eligible rollover distribution does not
include a hardship distribution, a distribution that is part
of a series of installments payable over a period of ten
(10) years or more or a distribution that is required under
Code 401(a)(9)). The recipient of
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an eligible rollover distribution must provide the Company
with the information necessary to accomplish the direct
rollover in such manner and in accordance with such rules as
may be prescribed for this purpose by the Company (including
by means of a voice response or other electronic system
under circumstances authorized by the Company).
13.3 Missing Participants or Beneficiaries. A Participant
or Beneficiary must maintain his/her most recent post office
address on file with the Company. Any communication
addressed to the Participant or Beneficiary at the post
office address on file with the Company will be binding on
the Participant or Beneficiary for all purposes of the Plan,
and the Company is not obligated to search for any
Participant or Beneficiary. If a Participant or Beneficiary
fails to claim any amount payable under the Plan (or fails
to cash any check drawn on the disbursement account
established for the Plan), such amount will be forfeited by
the Participant or Beneficiary at such time as is deemed
appropriate by the Company (or, in the case of any amount
outstanding from the disbursement account, such amount will
escheat to the state in accordance with applicable law, and
the Participant or Beneficiary thereafter will have no
further claim for such amount against the Plan), or may be
disposed of in such other equitable manner as is deemed
appropriate by the Company. Any forfeited amounts shall be
applied to reduce Matching Contributions made to the Plan.
If a Participant or Beneficiary claims a forfeited amount
prior to termination of the Plan, the value forfeited
(measured as of the date of the forfeiture) shall be
restored to the Participant or Beneficiary (without
adjustment for subsequent income or appreciation). The
Company shall make an additional contribution to the Plan as
necessary to provide for the restoration.
13.4 Distribution in Event of Certain Corporate Transactions.
The Company or an Affiliate may from time to time sell an
interest in a subsidiary. The Company or an Affiliate also
may from time to time sell a facility, division or service
line and, in connection with such sale, a Participant may
terminate his/her employment with the Company and become an
employee of the purchaser of such facility, division or
service line. In either event, the Company will determine
whether a separation from service has occurred that
satisfies the requirements of Code 401(k)(2)(B)(i)(I) and
thus whether there has been a Termination of Employment that
allows a distribution from the Plan. If the Company
determines that there has not been a separation from
service, the Company, in its sole discretion may nonetheless
allow affected Participants to receive a distribution of
their Account if it determines that either of the following
events has occurred:
(a) There has been a sale by the Company or an Affiliate
(provided it is a corporation) of substantially all of
the assets (within the meaning of Code 409(d)(2))
used in a trade or business to another corporation.
(b) There has been a sale by the Company or an Affiliate
(provided it is a corporation) of an interest in a
subsidiary (within the meaning of Code 409(d)(3)).
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A distribution under this provision will be allowed only in
the form of a single-sum payment to be made as of the date
established by the Company that is not later than the last
day of the Plan Year following this event.
13.5 Distribution to Alternate Payee. An alternate payee under a
qualified domestic relations order (each as defined in Code
414(p)) may elect to receive a lump-sum distribution of the
amount assigned to such individual under the order as soon
as administratively practicable after the Company has
determined that the order is a qualified domestic relations
order (and all time for appeal of such decision has
expired), or as of such later date as may be specified in
the order, without regard to whether such distribution is
made prior to the earliest retirement age (as defined in
Code 414(p)). If the amount assigned to the alternate
payee under a qualified domestic relations order does not
exceed five thousand dollars ($5,000), such amount will be
paid to the alternate payee in a lump-sum distribution as
soon as administratively practicable after the date
specified above and a delayed distribution option will not
be available to the alternate payee.
13.6 Brokerage Fees. Any brokerage fees incurred to accommodate
any distribution in cash that requires that shares of
Company Stock be sold to allow for such distribution (other
than a distribution of cash in lieu of a fractional share)
will be reduced to reflect any broker fees incurred on the
sale of Company Stock.
13.7 Put Option; Other Restrictions on Company Stock.
13.7.1 Put Option. If shares of Company Stock are either not
readily tradable on an established securities market or are
subject to a trading limitation when such shares are
distributed, such shares will be subject to a "put option"
as follows:
(a) The put option will be to the Company; provided that,
the Trustee may at its discretion cause the Plan to
voluntarily assume the rights and obligations of the
Company with respect to the put option.
(b) The put option may be exercised only by the distributee
(whether the Participant, Beneficiary or alternate
payee), any person to whom the shares have passed by
gift from the distributee or any person (including an
estate or distributee of an estate) to whom the shares
have passed on the death of the distributee.
(c) The put option may be exercised only during the fifteen
(15) month period beginning on the date the shares are
distributed from the Plan; provided that, the exercise
period will be extended by the number of days during
such period that the holder is unable to exercise the
put option because the Company is prohibited from
honoring the put option by federal or state law.
(d) The put option may be exercised by written notice of
exercise to the Company made on such form and in
accordance with such rules as may be prescribed for
this purpose by the Company.
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(e) The Company will honor a put option by paying to the
holder the fair market value either in a single lump
sum or substantially equal installments (bearing a
reasonable rate of interest and providing adequate
security to the holder) over a period beginning within
thirty (30) days following the date the put option is
exercised and ending not more than five (5) years after
the date the put option is exercised.
A "trading limitation" means a restriction under any federal
or state securities law or under any agreement affecting the
shares that would make the shares not as freely tradable as
shares not subject to such restriction.
13.7.2 Other Restrictions. No other options, buy-sell
arrangements, puts, call, rights of first refusal or other
restrictions on alienability will attach to any shares of
Company Stock acquired with the proceeds of an Exempt Loan
and held in the Trust Fund or distributed from the Plan,
whether or not this Plan continues to be an employee stock
ownership plan.
13.8 No Other Benefits. No benefits other than those
specifically provided for in the Plan document will be
provided under the Plan.
13.9 Source of Benefits. All benefits to which any person
becomes entitled under the Plan will be provided only out of
the Trust Fund and only to the extent that the Trust Fund is
adequate therefor. The Participants and Beneficiaries
assume all risk connected with any decrease in the market
value of shares of Company Stock or any other assets held
under the Plan, and the Company and its Affiliate do not in
any way guarantee the Trust Fund against any loss or
depreciation, or the payment of any amount, that may be or
become due to any person from the Trust Fund.
13.10 Incompetent Payee. If a person entitled to payments
hereunder is in the opinion of the Company unable to care
for his/her affairs because of a mental or physical
condition, any payment due such person may be made to such
person's guardian, conservator, or other legal personal
representative upon furnishing the Company with evidence
satisfactory to the Company of such status. Prior to the
furnishing of such evidence, the Company may cause payments
due the person to be made, for such person's use and
benefit, to any person or institution then in the opinion of
the Company caring for or maintaining the person. The
Company will have no liability with respect to payments so
made and will have no duty to make inquiry as to the
competence of any person entitled to receive payments
hereunder.
13.11 No Assignment or Alienation of Benefits. The interests
of any person who is entitled to benefits under the Plan may
not in any manner whatsoever be assigned or alienated,
whether voluntarily or involuntarily, directly or
indirectly, except as expressly permitted under Code
401(a)(13).
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13.12 Payment of Taxes. The Trustee may pay any estate,
inheritance, income, or other tax, charge, or assessment
attributable to any benefit payable hereunder which in the
Trustee's opinion it will be or may be required to pay out
of such benefit. The Trustee may require, before making any
payment, such release or other document from any taxing
authority and such indemnity from the intended payee as the
Trustee will deem necessary for its protection.
13.13 Conditions Precedent. No person will be entitled to a
benefit until his/her right to such benefit has been finally
determined by the Company nor until he/she has submitted to
the Company relevant data reasonably requested by the
Company, including, but not limited to, proof of birth or
death.
13.14 Delay of Distribution in Event of Stock Dividend or
Split. The Company may direct that, no distribution will be
made between the record date and the ex-date of any stock
dividend, stock split or reverse stock split if the ex-date
is after the record date.
ARTICLE XIV
TRANSFER OR REEMPLOYMENT
14.1 Transfer of Employment.
14.1.1 Transfers To Hourly Plan. If a Participant in this
Plan becomes a participant in the ADM Employee Stock
Ownership Plan for Hourly Employees, the Company may arrange
for transfer of his/her Account under this Plan to a
comparable account under the ADM Employee Stock Ownership
Plan for Hourly Employees.
14.1.2 Transfers From Hourly Plan. If a participant in the
ADM Employee Stock Ownership Plan for Hourly Employees
becomes an Eligible Employee, he/she will become an Active
Participant in this Plan (and will cease to be a participant
in the ADM Employee Stock Ownership Plan for Hourly
Employees) effective for the first payroll period that
begins in the calendar month after the date he/she becomes
an Eligible Employee. All elections and designations made
under the ADM Employee Stock Ownership Plan for Hourly
Employees (including contribution elections and Beneficiary
designations) will continue in effect under this Plan until
modified or revoked in accordance with the terms of this
Plan. The Company also may arrange for transfer of his/her
account balance under such Plan to the comparable Accounts
under this Plan.
14.2 Effect of Reemployment. If a Participant is reemployed by
the Company or an Affiliate (while it is an Affiliate)
before he/she has received full distribution of the balance
of his/her Account, entitlement to a distribution will cease
upon such reemployment, and will recommence in accordance
with the terms of the Plan upon subsequent Termination of
Employment.
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ARTICLE XV
TRUST FUND
15.1 Composition. The assets of the Plan will be held in trust
by one or more Trustees appointed by the Company under one
or more trust agreements. The Company may cause the assets
held under any trust agreement to be divided into any number
of parts for investment purposes or any other purpose deemed
necessary or advisable for the proper administration of the
Plan.
15.2 No Diversion. The Trust Fund will be maintained for the
exclusive purpose of providing benefits to Participants and
their Beneficiaries and defraying reasonable expenses of
administering the Plan. No part of the corpus or income of
the Trust Fund may be used for, or diverted to, purposes
other than for the exclusive benefit of Employees or their
Beneficiaries. Notwithstanding the foregoing:
(a) If all or any portion of a contribution is made as a
result of a mistake of fact, the Trustee will, upon
written request of the Company, return such portion of
the contribution to the Company within one year after
its payment to the Trust Fund. Earnings attributable
to such portion of the contribution (or portion
thereof) will not be returned but will remain in the
Trust Fund, and the amount returned will be reduced by
any losses attributable to such portion of the
contribution.
(b) Each contribution is conditioned upon the deductibility
of the contribution under Code 404. To the extent
the deduction is disallowed, the Trustee will return
such contribution to the Company within one year after
the disallowance of the deduction; however, earnings
attributable to such contribution (or disallowed
portion thereof) will not be returned but will remain
in the Trust Fund, and the amount returned will be
reduced by any losses attributable to such contribution
(or disallowed portion thereof).
In the case of any such return of contribution, the Company
will cause such adjustments to be made to the Accounts of
Participants as it considers fair and equitable under the
circumstances resulting in the return of such contribution.
15.3 Borrowing to Purchase Company Stock. The Plan may engage in
an Exempt Loan that satisfies the following requirements:
(a) Lender. The Exempt Loan may be made by the Company or
any lender acceptable to the Company, and may be made
or guaranteed by a party in interest (as defined in
ERISA 3(14)) or a disqualified person (as defined in
Code 4975).
(b) Use of Loan Proceeds. The Exempt Loan must be used
within a reasonable time after receipt to acquire
shares of Company Stock for the Unallocated Reserve, or
to repay a prior Exempt Loan, or for any combination of
the foregoing purposes.
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(c) No Recourse Against Trust Fund. The Exempt Loan must
be without recourse against the Trust Fund except that:
(1) The Company Stock acquired with the proceeds of
the Exempt Loan may be pledged or otherwise used
to secure repayment of the Exempt Loan, and
(2) The Company Stock acquired with the proceeds of a
prior Exempt Loan which is repaid with the
proceeds of the Exempt Loan may be pledged or
otherwise used to secure repayment of the Exempt
Loan, and
(3) Any cash contributions to the Plan that are made
for the purpose of satisfying the obligations
under the Exempt Loan (and earnings thereon) may
be pledged or otherwise used to secure repayment
of the Exempt Loan, and
(4) The earnings attributable to shares of Company
Stock acquired with the proceeds of an Exempt Loan
may be used to repay that Exempt Loan or any
renewal or extension thereof, and
(5) The earnings attributable to unallocated shares of
Company Stock that were acquired with the proceeds
of an Exempt Loan may be pledged or otherwise used
as security for another Exempt Loan.
(d) Term of Loan. The Exempt Loan must provide for
principal and interest to be paid over a specific term.
(e) Release of Shares from Unallocated Reserve. Payments
on an Exempt Loan will result in release of shares from
the Unallocated Reserve, with the number of shares
released each Plan Year being determined in accordance
with one of the following methods as directed by the
Company:
(1) Principal and Interest Method. The number of shares
released from the Unallocated Reserve will equal the number of
shares held in the Unallocated Reserve immediately before the
release, multiplied by a fraction, the numerator of which is
equal to the principal and interest payments made on the Exempt
Loan for the Plan Year and the denominator of which is equal to
the total principal and interest paid on the Exempt Loan for the
current Plan Year and scheduled to be paid for all subsequent
Plan Years. The number of future years for which principal and
interest are payable under the Exempt Loan must be definitely
ascertainable and must be determined without taking into Account
any possible extensions or renewal periods. If the interest rate
under the loan is variable, the amount of future interest payable
will be calculated by using the interest rate in effect on the
last day of the current Plan Year.
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(2) Principal Only Method. The number of shares of
Company Stock released from the Unallocated
Reserve will be equal to the number of shares held
in the Unallocated Reserve immediately before the
release multiplied by a fraction, the numerator of
which is equal to the principal payments made on
the Exempt Loan for the Plan Year and the
denominator of which is equal to the total
principal outstanding on the Exempt Loan. This
method may be used only if:
(A) The Exempt Loan provides for principal and
interest payments at a cumulative rate that
is not less rapid at any time than level
annual payments of such amounts for ten (10)
years.
(B) If the Exempt Loan constitutes a renewal,
extension or refinancing of a prior Exempt
Loan, the sum of the expired duration of the
prior Exempt Loan, the renewal period, the
extension period, and the duration of the new
Exempt Loan does not exceed ten years.
(C) For purposes of this subsection, the amount
of interest included in any payment is
disregarded only to the extent that it would
be determined to be interest under standard
loan amortization tables.
(f) Interest Rate. The Exempt Loan must bear interest at a
fixed or variable rate that is not in excess of a
reasonable rate of interest considering all relevant
factors (including, but not limited to, the amount and
duration of the loan, the security given, the
guarantees involved, the credit standing of the Plan,
the Company, and the guarantors, and the generally
prevailing rates of interest).
(g) Default. The Exempt Loan must provide that, in the
event of default, the fair market value of Company
Stock and other assets which can be transferred in
satisfaction of the loan must not exceed the amount of
the loan. If the lender is a party in interest or
disqualified person, the loan must provide for a
transfer of Plan assets upon default only upon and to
the extent of the failure of the Plan to satisfy the
payment schedule of the Exempt Loan.
15.4 Funding Policy. The Company will adopt a procedure, and
revise it from time to time as it considers advisable, for
establishing and carrying out a funding policy and method
consistent with the objectives of the Plan and the
requirements of ERISA.
15.5 Share Registration. Any shares of Company Stock contributed
by or purchased from the Company will be registered in
accordance with requirements prescribed by the Securities
and Exchange Commission. The number of shares so registered
will be appropriately adjusted to reflect any stock
dividends, stock splits, or other similar changes.
15.6 Purchase/Sale of Company Stock.
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15.6.1 Purchases of Company Stock. If it is necessary to
purchase Company Stock for the Trust Fund, such purchase may
be on the open market or from the Company. If shares are
purchased from the Company, the purchase will be made at the
closing price of a share of Company Stock on the New York
Stock Exchange for the business day immediately preceding
the transaction (as reported the next following business day
in The Wall Street Journal), and no commission will be paid
on any purchase from the Company.
15.6.2 Sales of Company Stock. If it is necessary to convert
shares of Company Stock held in the Trust Fund to cash to
provide for a distribution or loan, or for any other reason
required under the Plan, conversion may be made by
exchanging such shares for cash (if any) then held in the
Trust Fund and credited to Accounts (other than ESOP
Diversified Subaccounts and Predecessor Plan Subaccounts),
or by selling such shares on the open market or to the
Company. If shares are exchanged for cash then held in the
Trust Fund or sold to the Company, the exchange or sale will
be made at the closing price of a share of Company Stock on
the New York Stock Exchange for the business day immediately
preceding the transaction (as reported the next following
business day in The Wall Street Journal), and no commission
will be paid on any sale to the Company.
ARTICLE XVI
ADMINISTRATION
16.1 Administration.
16.1.1 Administrator. The Company is the "administrator" of
the Plan, with authority to control and manage the operation
and administration of the Plan and make all decisions and
determinations incident thereto. Action on behalf of the
Company as administrator may be taken by any of the
following:
(a) Its Board of Directors (or a committee thereof).
(b) Its Chief Executive Officer.
(c) Its Benefit Plans Committee.
(d) Any individual, committee, or entity to whom
responsibility for the operation and administration of
the Plan is allocated to by action of one of the above.
16.1.2 Third-Party Service Providers. The Company may from
time to time contract with or appoint a recordkeeper or other
third-party service provider for the Plan. Any such recordkeeper
or other third-party service provider will serve in a
nondiscretionary capacity and will act in accordance with
directions given and/or procedures established by the Company.
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16.2 Certain Fiduciary Provisions. The Company is a "named
fiduciary" of the Plan with authority to appoint additional
named fiduciaries and to allocate responsibilities among
them, and the power to appoint one or more investment
managers (as defined in ERISA 3(38)) to manage any assets
of the Plan (including the power to acquire and dispose of
such assets). If so permitted by the Company in the
appointment of a named fiduciary, such named fiduciary may
designate another person to carry out any or all of the
fiduciary responsibilities of the named fiduciary; except
that, a named fiduciary may not designate another person to
carry out any responsibilities relating to the management or
control of Plan assets other than in exercise of a power
granted under the trust agreement to appoint an investment
manager.
16.3 Payment of Expenses. The compensation and expense
reimbursements payable to any fiduciary, or to any
recordkeeper or other non-discretionary service provider,
any other fees and expenses incurred in the operation or
administration of the Plan may be paid out of the Trust Fund
if not prohibited by ERISA. Such other fees and expenses
include, but are not limited to, fees and expenses for
investment, education or advice services, premiums on bonds
required under ERISA and direct cost incurred by the Company
or any Affiliate to the extent that the payment of such
amounts out of the Trust Fund is not prohibited by ERISA.
16.4 Evidence. Evidence required of anyone under the Plan may be
by certificate, affidavit, document, or other instrument
which the person acting in reliance thereon considers to be
pertinent and reliable and to be signed, made, or presented
by the proper party.
16.5 Correction of Errors. Errors may occur in the operation and
administration of the Plan. The Company reserves the power
to cause such equitable adjustments to be made to correct
for such errors as it considers appropriate. Such
adjustments will be final and binding on all persons
16.6 Claims Procedure. The Company will establish a claims
procedure which must be followed by any claimant as a
condition to the receipt of benefits or as a condition to
receipt of any other relief under or with respect to the
Plan. The claims procedure will be set forth in written
procedures (which may be in the summary plan description)
that will be deemed to form a part of the Plan and are
incorporated by reference into the Plan.
16.7 Waiver of Notice. Any notice required hereunder may be
waived by the person entitled thereto.
16.8 Agent For Legal Process. The Company will be the agent for
service of legal process with respect to any matter
concerning the Plan (unless it designates some other entity
or person as such agent).
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16.9 Indemnification. The Company and its Affiliates jointly and
severally agree to indemnify and hold harmless, to the
extent permitted by law, each director, officer, and
Employee against any and all liabilities, losses, costs, or
expenses (including legal fees) of whatsoever kind and
nature that may be imposed on, incurred by, or asserted
against such person at any time by reason of such person's
services in the administration of the Plan, but only if such
person did not act dishonestly, or in bad faith, or in
willful violation of the law or regulations under which such
liability, loss, cost, or expense arises.
16.10 Exercise of Authority. The Company and any person who
has authority with respect to the management, administration
or investment of the Plan may exercise that authority in
its/his/her full discretion, subject only to the duties
imposed under ERISA. This discretionary authority includes,
but is not limited to, the authority to make any and all
factual determinations and interpret all terms and
provisions of this document (or any other document
established for use in the administration of the Plan)
relevant to the issue under consideration. The exercise of
authority will be binding upon all persons; and it is
intended that the exercise of authority be given deference
in all courts of law to the greatest extent allowed under
law, and that it not be overturned or set aside by any court
of law unless found to be arbitrary and capricious, or made
in bad faith.
16.11 Telephonic or Electronic Notices and Transactions. Any
notice that is required to be given under the Plan to a
Participant or Beneficiary, and any action that can be taken
under the Plan by a Participant or Beneficiary (including
enrollments, changes in deferral percentages, loans,
withdrawals, distributions, investment changes, consents,
etc.), may be by means of voice response or other electronic
system to the extent so authorized by the Company and
permitted under the Code.
ARTICLE XVII
AMENDMENT, TERMINATION, MERGER
17.1 Amendment.
17.1.1 Amendment. The Company expressly reserves the right to
amend the Plan in whole or in part at any time and from time
to time. An amendment may be adopted:
(a) By resolution of the Board of Directors.
(b) By signed writing of the Chief Executive Officer.
(c) By signed writing of the Benefit Plans Committee to the
extent amendment authority has been delegated by the
Board of Directors.
(d) By signed writing of any person to whom amendment
authority has been delegated by action of one of the
above.
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No action by any person or body with amendment authority
will constitute an amendment to the Plan unless it is
expressly designated as an amendment to the Plan.
17.1.2 Effect on Prior Operation of Plan. An amendment will
not affect the operation of the Plan or the rights of any
Participant retroactive to a date prior to the effective
date of the amendment. The Account of a Participant (and
all payment options and other rights with respect thereto)
will be determined and paid in accordance with the terms of
the Plan in effect as of his/her Termination of Employment,
without regard to any subsequent amendment to the Plan
(including an amendment with an effective date retroactive
to a date prior to Termination of Employment) unless such
amendment is required by law to be applied to the
Participant or the amendment expressly provides that it will
apply to Participants who have already had a Termination of
Employment. The Company reserves the right to adopt an
amendment with a retroactive effective date to the extent
that retroactive application of the amendment is required by
law or for any other reason deemed appropriate by the
Company.
17.1.3 Effect on Vesting. An amendment will not reduce the
vested percentage of a Participant determined as of the
later of the effective or adoption date of the amendment.
Further, if the Company amends the vesting schedule under
the Plan, with respect to any Participant who has three (3)
or more years of vesting service (determined using the
elapsed time methodology set forth in ERISA Reg. 2530.200b-
9), the Company either will permit such Participant to elect
to have his/her vested percentage computed without regard to
such amendment or will amend the Plan to provide that the
vested interest of such Participant will be the greater of
his/her vested interest with regard to such amendment or
his/her vested interest without regard to such amendment.
17.1.4 Effect on Protected Benefits. An amendment will not
reduce any Account balance or eliminate any optional form of
benefit to the extent to prohibited under Code 411(d)(6).
17.2 Permanent Discontinuance of Contributions. The Company may
completely discontinue contributions under the Plan. No
Employee will become a Participant after such discontinuance
and each Participant will be fully vested in his/her Account
balance. Subject to the foregoing, all of the provisions of
the Plan will continue in effect, and upon entitlement
thereto distributions will be made in accordance with the
terms of the Plan.
17.3 Termination. The Company may terminate the Plan at any time
and for any reason by action of its Board of Directors.
After the Plan is terminated no further contributions will
be made. Distributions will be made to Participants and
Beneficiaries promptly after the termination of the Plan,
but not before the earliest date permitted under the Code
and applicable regulations, and the Plan and any related
trust agreement or group annuity contract will continue in
force for the purpose of making such distributions.
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17.4 Partial Termination. If the Company determines that there
has been a partial termination of the Plan, any Participant
affected by such partial termination will become vested in
his/her Account.
17.5 Merger, Consolidation, or Transfer of Plan Assets. If the
Plan is merged or consolidated with any other plan, or if
assets or liabilities of the Plan are transferred to any
other plan, provision will be made so that each Participant
and Beneficiary would (if such other plan then terminated)
receive a benefit immediately after the merger,
consolidation, or transfer that is equal to or greater than
the benefit he/she would have been entitled to receive
immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).
17.6 Deferral of Distributions. In the case of a complete
discontinuance of contributions to the Plan or of a complete
or partial termination of the Plan, the Company or the
Trustee may defer any distribution of benefits to
Participants and Beneficiaries with respect to which such
discontinuance or termination applies (except for
distributions which are required to be made under Code
401(a)(9)) until appropriate adjustment of Accounts to
reflect taxes, costs, and expenses, if any, incident to such
discontinuance or termination.
ARTICLE XVIII
PREDECESSOR PLAN ACCOUNTS
18.1 Transfers from Other Plans. The Company may from time to
time arrange for the merger of another qualified defined
contribution plan into this Plan, or may accept the transfer
of account balances from a qualified plan maintained by a
Predecessor Employer to this Plan. A Predecessor Plan
Subaccount will be maintained to reflect amounts
attributable to any merger or transfer (and more than one
Predecessor Plan Subaccount may be maintained with respect
to a given merger or transfer as deemed appropriate by the
Company to Account for different contribution sources or for
any other reason).
18.2 Optional Forms of Payment. All optional forms of payment
available under the Predecessor Plan will be available under
this Plan for a Predecessor Plan Subaccount; except that,
any hardship standards on withdrawals will be as specified
in this Plan, and optional forms of payment may be modified
or eliminated to the extent so permitted under Code
411(d)(6).
18.3 Special Rules if Survivor Annuity Requirements Apply.
18.3.1 To Whom this Section Applies. This Section applies
with respect to a Participant if:
(a) The Predecessor Plan was a money purchase pension plan and
after the transfer of the Predecessor Plan Account to this Plan
the Predecessor Plan Subaccount remains subject to the survivor
annuity requirements of Code 417; or
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(b) A life annuity is an available optional form of
payment with respect to a Predecessor Plan Subaccount,
the Participant elects to receive a life annuity and
the Participant has a Spouse on the pension
commencement date.
18.3.2 Payment Form. A Participant to whom this Section
applies will have his/her Predecessor Plan Subaccount
applied to purchase a life annuity if the Participant does
not have a Spouse on his/her pension commencement date, or a
qualified joint and survivor annuity if the Participant does
have a Spouse on his/her pension commencement date, unless
the Participant elects an optional form of payment. A
Participant may elect to waive the life annuity or qualified
joint and survivor annuity and instead elect to receive have
his/her Predecessor Plan Subaccount paid in any optional
form of payment available with respect to such Subaccount.
For purposes of this Section, a "life annuity" is a an
annuity providing equal periodic payments to the Participant
with the last such payment due for the period in which the
Participant dies; and a "qualified joint and survivor
annuity" is an annuity providing equal periodic payments to
the Participant with the last such payment due for the
period in which the Participant dies, but with the provision
that if the Participant is survived by his/her Spouse on the
pension commencement date, fifty percent (50%) of the period
payment will be continued to such Spouse with the last such
period payment due for the period in which the Spouse dies.
18.3.3 Spousal Consent Requirement. If a Participant elects
to waive the qualified joint and survivor annuity and elects
to have his/her Account balance paid in an optional form of
payment, the election will not take effect unless:
(a) The election specifically designates a specific
optional payment form and a specific joint annuitant or
Beneficiary, if applicable, with respect thereto (these
designations cannot be changed without further consent
of the Spouse).
(b) The Spouse consents in writing to the election.
(c) The Spouse's consent acknowledges the effect of the
election.
(d) The Spouse's consent is witnessed by a notary public or
an authorized representative of the Plan.
Consent of the Spouse will be deemed to have been obtained
if it is established to the satisfaction of the Company that
such consent cannot be obtained because the Spouse cannot be
located or because of such other circumstances as may be
prescribed by the Secretary of the Treasury. A consent by a
Spouse will be effective only with respect to such Spouse,
and cannot be revoked.
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18.3.4 Conditions Relating to Election of Options. A
Participant will be provided with a written explanation of
the terms and conditions of the life annuity or qualified
joint and survivor annuity. The written explanation will
include an explanation of the Participant's right to waive
the life annuity or qualified joint and survivor annuity and
the effect of such waiver, the Participant's right to have
at least thirty (30) days to consider such waiver, the
Participant's right to revoke a waiver and the effect of
such revocation, and the rights of the Participant's Spouse
with respect thereto.
The waiver of a life annuity or qualified joint and survivor
annuity and the election of an optional payment form must be
made on such form and in accordance with such rules as may
be prescribed for this purpose by the Company (including by
means of voice response or other electronic system under
circumstances authorized by the Company). The Participant
must designate on such form the specific optional payment
form and, if applicable, the specific joint annuitant or
Beneficiary with respect thereto. The waiver and election
may be revoked by the Participant prior to the pension
commencement date or, if later, prior to the end of the
seven (7) day period that begins the day after the written
explanation is provided to the Participant.
18.3.5 Qualified Preretirement Survivor Annuity. If a
Participant to whom this Section applies dies before
commencement of the life annuity or qualified joint and
survivor annuity, and if the Participant has a Spouse on the
date of death, the Account balance of the Participant will
be applied to purchase an annuity for the life of the Spouse
unless the Spouse files a written election of some other
form of payment after the Participant's death and prior to
the due date of the first benefit payment to the Spouse.
ARTICLE XIX
MISCELLANEOUS PROVISIONS
19.1 Special Top-Heavy Rules. The following provisions apply in
any Plan Year in which the Plan is top-heavy.
19.1.1 Minimum Contribution. If the Plan is top-heavy for a
Plan Year, a minimum contribution will be made for such Plan
Year on behalf of each Active Participant who is not a Key
Employee and who is employed with the Company or an
Affiliate on the last day of such Plan Year. The minimum
contribution will equal that percentage of the Participant's
compensation for the Plan Year which is the smaller of:
(a) Three percent (3%).
(b) The percentage which is the largest percentage of
compensation allocated to any Key Employee from employer
contributions for such Plan Year.
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The Before-Tax and Matching Contributions made on behalf of
non-key Employees will not be counted toward the minimum
contribution required under this Section (however, such
contributions made on behalf of Key Employees will be
counted for purposes of determining the percentage in (b)).
19.1.2 Participation under Defined Benefit Plan and Defined
Contribution Plan. If the Plan is top-heavy for a Plan
Year, Code 415(e) will be modified for such Plan Year by
substituting "1.0" for "1.25" in paragraphs (2)(B) and
(3)(B) thereof and by substituting "$41,500" for "$51,875"
in Code 415(e)(6)(B)(i). However, this Section will not
apply with respect to any Plan Year beginning after December
31, 1999.
19.1.3 Definitions. The following terms have the following
meanings in this Section:
(a) "Compensation" means compensation as defined in Sec.
6.3.3, but disregarding any amounts in excess of the
limit in effect under Code 401(a)(17).
(b) "Determination Date" means the last day of the
preceding Plan Year.
(c) "Determination Period" means the Plan Year in
which the applicable Determination Date occurs and the
four preceding Plan Years.
(d) "Key Employee" means any Employee or former
Employee of the Company or an Affiliate who is defined
as such under Code 416(i).
(e) "Required Aggregation Group" means each qualified
plan of the Company or an Affiliate in which at least
one Key Employee participates in the Plan Year that
contains the Determination Date or any of the four
preceding Plan Years, and any other qualified plan of
the Company or an Affiliate that enables such a Plan to
meet the requirements of Code 401(a)(4) and 410.
(f) "Permissive Aggregation Group" means the Required
Aggregation Group plus any other qualified plan of the
Company or an Affiliate which, when consolidated as a
group with the Required Aggregation Group, would
continue to satisfy the requirements of Code
401(a)(4) and 410.
(g) "Present Value" for purposes of determining
whether a defined benefit plan is Top-Heavy, will be
calculated using the actuarial assumptions specified in
the defined benefit plan for this purpose.
(h) "Top-Heavy" means the condition of the Plan (or of all
within the required aggregation group or permissive
aggregation group) that would exist if, as of the
Determination Date for the Plan Year, the Account
balances plus the present value of the accrued benefits
of the Key Employees exceeded sixty percent (60%) of
the Account balances plus the present value of the
accrued benefits of all Employees. For purposes of
making this calculation:
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(1) The Account balances and the present
value of accrued benefits will be determined as of
the most recent Valuation Date that falls within
the 12-month period ending on the Determination
Date.
(2) The Account balances and accrued benefits of a
Participant who is not a Key Employee but who was
a Key Employee in a prior year will be
disregarded.
(3) The Account balances of any Employees who has not
been credited with at least one Hour of Service
with the Company or an Affiliate at any time
during the five (5)-year period ending on the
Determination Date will be disregarded.
(4) For purposes of determining if a defined
benefit plan included in a Required Aggregation
Group of which this Plan is a part is Top-Heavy,
the accrued benefit to any Employee (other than a
Key Employee) will be determined under the method
that is used for accrual purposes under all
defined benefit plans maintained by the Company or
an Affiliate or, if there is no such method, as if
such benefit accrued not more rapidly than the
lowest accrual rate permitted under Code
411(b)(1)(C).
(i) If an individual has not performed services for
the employer at any time during the five-year period
ending on the determination date with respect to a Plan
Year, any Account balance or accrued benefit for such
individual will not be taken into Account for such Plan
Year.
19.1.4 Exception For Collective Bargaining Unit. The minimum
contribution requirement described above will not apply to
any Employee covered by the provisions of a collective
bargaining agreement.
19.2 Qualified Military Service. The Plan will comply with
the requirements of Code 414(u) with respect to each
Participant who is absent from service because of "qualified
military service" (as defined in Code 414(u)(5)) provided
that he/she returns to employment within such period after
the end of the qualified military service as is prescribed
under Code 414(u) (or other federal law cited therein).
Accordingly, any such Participant will be permitted to make
additional Before-Tax Contributions after his/her
reemployment, will receive Matching Contributions on such
Before-Tax Contributions, and will receive service credit
for the period of qualified military service as required
under Code 414(u).
19.3 Insurance Company Not Responsible for Validity of Plan. Any
insurance company that issues a contract under the Plan will
not have any responsibility for the validity of the Plan.
An insurance company to which an application may be
submitted hereunder may accept such application and will
have no duty to make any investigation or inquiry regarding
the authority of the applicant to make such application or
any amendment thereto or to inquire as to whether a person
on whose life any contract is to be issued is entitled to
such contract under the Plan.
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19.4 No Guarantee of Employment. The Plan is not an employment
agreement, and participation herein does not constitute a
guarantee of employment with the Company or any Affiliate.
19.5 Use of Compounds of Word "Here". Use of the words "hereof",
"herein", "hereunder", or similar compounds of the word
"here" will mean and refer to the entire Plan unless the
context clearly indicates to the contrary.
19.6 Construed as a Whole. The Plan is to be construed as a
whole in such manner as to carry out its purpose and a given
provision is not to be construed separately without relation
to the context.
19.7 Headings. Headings at the beginning of Articles and
Sections are for convenience of reference, are not
considered a part of the text of the Plan, and will not
influence its construction.
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EMPLOYEE STOCK OWNERSHIP PLAN
FOR SALARIED EMPLOYEES
(As Amended and Restated Effective April 1, 1998)
Page 50
Page 51
EMPLOYEE STOCK OWNERSHIP PLAN
FOR SALARIED EMPLOYEES
TABLE OF CONTENTS
ARTICLE I INTRODUCTION
1.1 Plan; Purpose 1
1.2 Qualified Stock Bonus and Employee Stock Ownership
Plan 1
1.3 Plan Document 1
1.4 Effective Date of Document 1
ARTICLE II DEFINITIONS AND CONSTRUCTION
2.1 Definitions 1
2.2 Choice of Law 9
ARTICLE III PARTICIPATION
3.1 Start of Participation 9
3.2 End of Participation 11
ARTICLE IV EMPLOYEE CONTRIBUTIONS
4.1 Before Tax Contributions 11
4.2 After-Tax Contributions 11
4.3 Rollover Contributions 11
4.4 Form of Contribution 12
ARTICLE V EMPLOYER CONTRIBUTIONS
5.1 Matching Contributions 12
5.2 Non-Matching Contributions 14
5.3 Form of Contribution 15
ARTICLE VI CONTRIBUTION LIMITS
6.1 Code Section 402(g) Limit on Before-Tax
Contributions 15
6.2 Code Section 401(k)/401(m) Nondiscrimination Test 15
6.3 Maximum Annual Additions 17
6.4 Deduction Limit 18
ARTICLE VII ACCOUNTS
7.1 Accounts 18
7.2 Valuation of Accounts 20
7.3 Statements. 23
7.4 Voting Rights on Company Stock 23
7.5 Tender or Exchange Offers Regarding Company Stock 23
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ARTICLE VIII INVESTMENT OF ACCOUNTS
8.1 Investment in Company Stock 24
8.2 Investment in Other Investment Options 25
8.3 Reinvestments to Satisfy Diversification Rules 26
8.4 Source of Payments on an Exempt Loan 27
8.5 Participant Loan Program 27
8.6 Valuation of Non-Traded Shares 27
ARTICLE IX VESTING
ARTICLE X WITHDRAWALS WHILE EMPLOYED
10.1 Withdrawals for Hardship 27
10.2 Withdrawals After Age 59 1/2 29
10.3 Withdrawals from Predecessor Plan Accounts 30
10.4 Withdrawal Procedures 30
ARTICLE XI DISTRIBUTIONS AFTER TERMINATION
11.1 Benefit on Termination of Employment 30
11.2 Time, Form and Medium of Distribution 30
11.3 Cash-Out of Small Accounts 31
11.4 Minimum Distribution Rules 32
11.5 Distribution Procedures 32
ARTICLE XII DISTRIBUTIONS AFTER DEATH
12.1 Benefit on Death 32
12.2 Time, Form and Medium of Distribution 32
12.3 Beneficiary Designation 33
12.4 Multiple Beneficiaries 34
12.5 Minimum Distribution Rules 34
ARTICLE XIII MISCELLANEOUS BENEFIT PROVISIONS
13.1 Valuation of Accounts Following Termination of
Employment 35
13.2 Direct Rollover Option 35
13.3 Missing Participants or Beneficiaries 36
13.4 Distribution in Event of Certain Corporate
Transactions 36
13.5 Distribution to Alternate Payee 37
13.6 Brokerage Fees 37
13.7 Put Option; Other Restrictions on Company Stock 37
13.8 No Other Benefits 38
13.9 Source of Benefits 38
13.10 Incompetent Payee 38
13.11 No Assignment or Alienation of Benefits 38
13.12 Payment of Taxes 39
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13.13 Conditions Precedent 39
13.14 Delay of Distribution in Event of Stock Dividend
or Split 39
ARTICLE XIV TRANSFER OR REEMPLOYMENT
14.1 Transfer of Employment 39
14.2 Effect of Reemployment 39
ARTICLE XV TRUST FUND
15.1 Composition 40
15.2 No Diversion 40
15.3 Borrowing to Purchase Company Stock 40
15.4 Funding Policy 42
15.5 Share Registration 42
15.6 Purchase/Sale of Company Stock 42
ARTICLE XVI ADMINISTRATION
16.1 Administration 43
16.2 Certain Fiduciary Provisions 44
16.3 Payment of Expenses 44
16.4 Evidence 44
16.5 Correction of Errors 44
16.6 Claims Procedure 44
16.7 Waiver of Notice 44
16.8 Agent For Legal Process 44
16.9 Indemnification 45
16.10 Exercise of Authority 45
16.11 Telephonic or Electronic Notices and Transactions 45
ARTICLE XVII AMENDMENT, TERMINATION, MERGER
17.1 Amendment 45
17.2 Permanent Discontinuance of Contributions 46
17.3 Termination 46
17.4 Partial Termination 47
17.5 Merger, Consolidation, or Transfer of Plan Assets 47
17.6 Deferral of Distributions 47
ARTICLE XVIII PREDECESSOR PLAN ACCOUNTS
18.1 Transfers from Other Plans 47
18.2 Optional Forms of Payment 47
18.3 Special Rules if Survivor Annuity Requirements Apply 47
ARTICLE XIX MISCELLANEOUS PROVISIONS
19.1 Special Top-Heavy Rules 49
19.2 Qualified Military Service 51
19.3 Insurance Company Not Responsible for Validity of
Plan 51
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19.4 No Guarantee of Employment 52
19.5 Use of Compounds of Word "Here" 52
19.6 Construed as a Whole 52
19.7 Headings 52
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