Exhibit 10(A)
CENTURYTEL, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated September 17, 2001
to incorporate prior amendments and to separate the
Plan and Trust into two documents)
TABLE OF CONTENTS
SECTION 1 2
DEFINITIONS 2
1.1 Account 2
1.2 Active Participant 2
1.3 Adjustment Date 2
1.4 Approved Absence 2
1.5 Break in Service 2
1.6 Company Stock 3
1.7 Compensation 3
1.8 Date of Employment 5
1.9 Date of Reemployment 5
1.10 Disability 6
1.11 Eligibility Computation Periods 6
1.12 Employee 6
1.13 Employer 6
1.14 Entry Date 7
1.15 Highly Compensated Employee 7
1.16 Hour of Service 8
1.17 Leased Employee 10
1.18 Limitation Year 11
1.19 Merger Account 11
1.20 Normal Retirement Age 11
1.21 Participant 11
1.22 Plan Administrator 11
1.23 Plan Year 11
1.24 Regular Account 12
1.25 Rollover Account 12
1.26 Suspense Account 12
1.27 Top Heavy Valuation Date 12
1.28 Trust 12
1.29 Trustee 12
1.30 Valuation Date 12
1.31 Vesting Computation Period 12
1.32 Year of Service 12
SECTION 2 15
ELIGIBILITY 15
2.1 Participation 15
2.2 Determination of Eligibility 15
2.3 Election Not to Participate 16
SECTION 3 17
CONTRIBUTIONS 17
3.1 Contributions by Employer 17
3.2 Determination of Contribution 17
3.3 Establishment of Trust 17
3.4 Time of Payment of Contribution 17
3.5 Exclusive Benefit 18
3.6 Return of Contributions 18
SECTION 4 19
ACCOUNTS OF PARTICIPANTS 19
4.1 Individual Accounts for Each Participant 19
4.2 Allocation of Employer Contributions 19
4.3 Allocation of Forfeitures 19
4.4 Year-End Valuation of Accounts 19
4.5 Interim Valuation of Accounts 20
4.6 Debiting of Distributions 20
4.7 Effective Date of Entries 20
LIMIT ON ANNUAL ADDITIONS 21
4.8 Coverage Under This Plan Only 21
4.9 Coverage Under a Prototype Plan 22
4.10 Coverage Under a Non-Prototype Plan 24
4.11 Combined Limits 24
4.12 Definitions 24
SECTION 5 30
BENEFITS PAYABLE AFTER NORMAL RETIREMENT 30
5.1 Optional Methods of Payment Available at Retirement 30
5.2 Manner of Payment Following Commencement of Payments 31
5.3 Required Beginning Date 31
5.4 Determination of Amount to be Distributed Each Year 31
5.5 Age 65 Distributions 32
5.6 Definitions 32
5.7 Small Accounts 32
SECTION 6 32
BENEFITS PAYABLE IN THE EVENT OF DEATH OR DISABILITY 32
6.1 Death Distribution Provisions 32
6.2 Definitions 34
6.3 Designation of Beneficiary 36
6.4 Failure to Designate a Beneficiary or Select a
Method of Payment 36
6.5 Disability of a Participant 36
6.6 Transitional Rule 37
SECTION 7 40
BENEFITS PAYABLE UPON BREAK IN SERVICE OR EMPLOYMENT TERMINATION 40
7.1 Vesting Schedule 40
7.2 Distribution 42
7.3 Restrictions on Immediate Distributions 43
7.4 Payment of Account Balance 45
7.5 Treatment of Accounts in Pay Status 45
7.6 Direct Rollovers 45
7.7 Amendment of Vesting Schedule 46
SECTION 8 48
FORM OF DISTRIBUTION 48
8.1 Payment in Shares or Cash 48
8.2 Dividends 48
SECTION 9 49
MERGER OR CONSOLIDATION 49
9.1 Merger or Consolidation 49
9.2 Merger Accounts 49
9.3 Merger Agreement or Agreement Relating to
Transfer of Assets 49
SECTION 10
CLAIMS PROCEDURE 50
10.1 Filing of a Claim for Benefits 50
10.2 Notification to Claimant of Decision 50
10.3 Review Procedure 50
10.4 Decision of Review 51
10.5 Agent for Service of Process 51
SECTION 11 52
ADOPTION BY OTHER COMPANIES 52
11.1 Rights of Other Companies to Participate 52
11.2 Control of Plan by the Employer 52
11.3 Allocations of Contributions and Forfeitures 52
11.4 Withdrawal of Employer or Adopting Companies 53
11.5 Amendment of Plan 53
11.6 Termination of One or More Parties 54
11.7 Reference to Employer in Plan 54
SECTION 12 55
PROVISIONS RELATING TO PARTICIPANTS 55
12.1 Information Required of Participants 55
SECTION 13 56
PLAN ADMINISTRATOR 56
13.1 Administration by Plan Administrator 56
13.2 Appointment of Committee 56
13.3 Majority Action 56
13.4 Powers of the Plan Administrator 57
13.5 Duties of the Plan Administrator 58
13.6 Expenses 59
SECTION 14 60
ROLLOVERS 60
14.1 Rollover Contributions 60
14.2 Definition of Rollover Contribution 60
14.3 Definition of Rollover Amount 60
14.4 Conduit Rollovers 61
SECTION 15 62
TRADES OR BUSINESS UNDER COMMON CONTROL 62
15.1 Definitions 62
15.2 Allocation 62
15.3 Participation and Vesting 62
15.4 Vesting and Distributions 63
SECTION 16 64
TOP HEAVY PLAN RULES 64
16.1 Key Employee 64
16.2 Non-Key Employee 64
16.3 Super Top Heavy Plan 64
16.4 Top Heavy Plan 65
16.5 Top Heavy Ratio 65
16.6 Top Heavy Plan Year 67
16.7 Top Heavy Compensation 67
16.8 Determination Date 67
16.9 Valuation Date 67
16.10 Aggregation Group 67
16.11 Present Value of Accrued Benefits 68
TOP HEAVY REQUIREMENTS 68
16.12 Top Heavy Plan Requirements 68
161.3 Top Heavy Reduction 68
16.14 Minimum Allocations 69
16.15 Top Heavy Vesting 69
16.16 Minimum Required Distribution 70
16.17 Alternative Effective Date 70
SECTION 17 71
ESOP PROVISIONS 71
17.1 Exempt Loans 71
17.2 Voting Rights 73
17.3 Rights on Tender or Exchange Offer 75
17.4 Special Limitation Rules 76
17.5 Limitation on Electing Shareholder 76
17.6 Investment Diversification 76
17.7 Company Stock Distributions 77
SECTION 18 79
QUALIFIED DOMESTIC RELATIONS ORDERS 79
18.1 Domestic Relations Order 79
18.2 Alternate Payee 79
18.3 Qualified Domestic Relations Order 79
PROCEDURES 80
18.4 Notice 80
18.5 Determination of Qualification 80
18.6 Deferral of Payment 80
18.7 Payment after Deferral 80
18.8 Payments after Eighteen Months 81
18.9 Payments under Qualified Domestic Relations Order 81
18.10 Non-qualification 82
18.11 Effective Dates 82
SECTION 19 83
AMENDMENT AND TERMINATION OF PLAN; ASSIGNMENT OF BENEFITS 83
19.1 Amendment 83
19.2 Termination; Discontinuance of Contributions 83
19.3 Assignment of Benefits 84
STATE OF LOUISIANA
PARISH OF OUACHITA
BE IT KNOWN that on this 17 day of September, 2001, before me, Notary
Public, duly commissioned and qualified in and for the Parish of Ouachita, State
of Louisiana, therein residing and in the presence of the undersigned witnesses:
PERSONALLY CAME AND APPEARED:
CENTURYTEL, INC., represented herein by its Executive Vice President
and Chief Financial Officer, R.Stewart Ewing, Jr., as Plan Sponsor.
The Plan Sponsor appoints Regions Bank of Louisiana as Trustee.
WHEREAS, the Plan Sponsor has previously established the CenturyTel,
Inc. Employee Stock Ownership Plan and Trust; and
WHEREAS, the Plan Sponsor desires to incorporate in this document
various amendments, whether previously made or authorized, to its Employee Stock
Ownership Plan and Trust; and
WHEREAS, the Plan Sponsor desires to amend and restate its Employee
Stock Ownership Plan and Trust to separate the provisions of the Trust contained
therein into a separate trust document; and
WHEREAS, the Plan Sponsor desires that the Employee Stock Ownership Plan
and Trust, as amended and restated, shall constitute a qualified employee
benefit plan under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code") for the exclusive benefit of employees who participate
herein, and shall constitute an employee stock ownership plan under Section
4975(e)(7) of the Code; and
WHEREAS, the Plan Sponsor desires that the separate trust provided for
herein shall constitute an exempt trust under Section 501(a) of the Code;
NOW, THEREFORE, effective September ___, 2001, except as may be
indicated in specific Sections hereof, the Settler hereby amends and restates
its Employee Stock Ownership Plan and Trust, upon the terms and conditions as
provided herein. The primary purpose of the Employee Stock Ownership Plan is to
invest in employer securities.
SECTION 1
DEFINITIONS
1.1 Account.
The Regular Account, the Merger Account, the Rollover Account, and the
Suspense Account of a Participant, whether or not such accounts have been
combined into one account.
1.2 Active Participant.
A Participant who has completed a Year of Service within the Plan Year
ending on the Adjustment Date, whether or not the Participant is employed on
such date.
1.3 Adjustment Date.
The last day of each Plan Year.
1.4 Approved Absence.
An absence from work not exceeding one year, including absence due to
temporary disability, granted to and/or approved for the Employee by an Employer
in a uniform and nondiscriminatory manner; or an absence from work for service
in the Armed Forces or other government services, provided that, and only so
long as, reemployment rights are protected by law.
1.5 Break in Service.
A twelve (12) consecutive month period (computation period) during which
a Participant does not complete more than five hundred (500) Hours of Service
with the Employer. Any Break in Service shall be deemed to have commenced on the
first day of the Plan Year in which it occurs. No Break in Service shall be
deemed to occur during an Employee's initial Eligibility Computation Period
solely because of the failure of the Employee to complete more than five hundred
(500) Hours of Service during any one Plan Year occurring in part during such
twelve-month period if the Employee completes a Year of Service during such
initial Eligibility Computation Period. A Break in Service shall not be deemed
to have occurred during any period of Approved Absence if the Employee returns
to the service of the Employer on or before the last day of the Approved
Absence.
1.6 Company Stock.
Shares of voting common stock, $1.00 par value, issued by the Employer.
1.7 Compensation.
Compensation will mean compensation as that term is defined in Section
4.12(b) of the Plan, and will include any amount which is contributed by the
Employee pursuant to a salary reduction agreement and which is not includible in
the gross income of the Employee under Sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
Notwithstanding the foregoing, Compensation for purposes of this Section
shall not include: (i) reimbursements or other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred compensation, and welfare
benefits; (ii) overtime; (iii) completion bonuses and Christmas bonuses; (iv)
restricted stock awards under the Restricted Stock Plan or the Key Employee
Incentive Compensation Plan; and (v) stock options, performance shares and
similar forms of compensation.
For Plan Years beginning on or after January 1, 1989, and before January
1, 1994, the annual compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan Year shall not
exceed $200,000. This limitation shall be adjusted by the Secretary at the same
time and in the same manner as under Section 415(d) of the Code, except that the
dollar increase in effect on January 1 of any calendar year is effective for
Plan Years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990. For Plan Years beginning on
or after January 1, 1994, the annual compensation of each Participant taken into
account for determining all benefits provided under the Plan for any Plan Year
shall not exceed $150,000, as adjusted for increases in the cost-of-living in
accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment
in effect for a calendar year applies to any determination period beginning in
such calendar year.
If a determination period consists of fewer than 12 months, the annual
compensation limit is an amount equal to the otherwise applicable annual
compensation limit multiplied by a fraction, the numerator of which is the
number of months in the short determination period, and the denominator of which
is 12.
In determining the compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules the adjusted annual compensation limitation is exceeded, then (except for
purposes of determining the portion of compensation up to the integration level
if this Plan provides for permitted disparity), the limitation shall be prorated
among the affected individuals in proportion to each such individual's
compensation as determined under this Section prior to the application of this
limitation.
If compensation for any prior determination period is taken into account
in determining a Participant's allocations for the current Plan Year, the
compensation for such prior determination period is subject to the applicable
annual compensation limit in effect for that prior period. For this purpose, in
determining allocations in Plan Years beginning on or after January 1, 1989, the
annual compensation limit in effect for determination periods beginning before
that date is $200,000. In addition, in determining allocations in Plan Years
beginning on or after January 1, 1994, the annual compensation limit in effect
for determination periods beginning before that date is $150,000.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding twelve (12) months,
over which compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than twelve (12)
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is twelve (12).
For plan years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account
in determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
For any self-employed individual covered under the Plan, compensation
will mean earned income. Compensation shall include only that compensation which
is actually paid to the Participant during the determination period. Except as
provided elsewhere in this plan, the determination period shall be the Plan
Year.
For employees of San Marcos Telephone Company, Inc., SM Telecorp, Inc.,
and subsidiaries thereof, who become participants in the Plan on or after June
20, 1993, compensation for the Plan Year ending December 31, 1993 shall be
recognized commencing as of the effective date of participation of each such
employee pursuant to Section 2.1.
1.8 Date of Employment.
The date on which an Employee first performs an Hour of Service for the
Employer.
1.9 Date of Reemployment
Break in Service on which he performs an Hour of Service.
1.10 Disability.
A Participant shall be considered disabled if the Participant cannot
perform each of the material duties of his regular occupation and is likely to
remain thus incapacitated continuously and permanently.
1.11 Eligibility Computation Periods.
In determining Years of Service and Breaks in Service for purposes of
eligibility, the initial Eligibility Computation Period is the twelve (12)
consecutive month period beginning on an Employee's Date of Employment or Date
of Reemployment. Subsequent Eligibility Computation Periods shall be twelve (12)
consecutive month periods beginning on the first anniversary of an Employee's
Date of Employment or Date of Reemployment and succeeding anniversaries thereof.
Years of Service, and Breaks in Service, for eligibility purposes will
be measured on the same Eligibility Computation Period.
1.12 Employee.
Those persons regularly employed by the Employer, including employees of
any other employer required to be aggregated with the Employer under Sections
414(b), (c), (m) or (o) of the Code. The term Employee shall also include any
leased employee deemed to be an employee of the Employer as provided in Sections
414(n) or (o) of the Code. The term Employee shall not include any
owner-employee, as defined in Code Section 401(c)(3).
The term Employee shall not include an employee who is retained by the
Employer pursuant to a contract or agreement that specifies that the employee is
not eligible to participate in the Plan, an individual whose basic compensation
for services rendered is not paid by or on behalf of the Employer, or an
individual who is not classified as a common-law employee by the Employer,
regardless of any subsequent reclassification of such individual as a
"common-law employee" of the Employer by the Employer, any governmental agency,
or any court.
1.13 Employer.
CenturyTel, Inc.
1.14 Entry Date.
(a) The January 1 or July 1 on which or immediately following the date
on which an Employee satisfies the requirements of Section 2.1; or
(b) In the case of an Employee whose Years of Service are disregarded
pursuant to Section 1.30(c), such Employee will be treated as a new Employee for
eligibility purposes. If an Employee's Years of Service may not be disregarded
pursuant to Section 1.30(c), such Employee shall continue to participate in the
Plan, or, if terminated, shall participate immediately upon his Date of
Reemployment.
1.15 Highly Compensated Employee.
A highly compensated active employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received compensation from the Employer in excess of $75,000
(as adjusted pursuant to Section 415(d) of the Code); (ii) received compensation
from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received compensation during such year that is
greater than fifty percent (50%) of the dollar limitation in effect under
Section 415(b)(1)(A) of the Code. The term Highly Compensated Employee also
includes: (i) Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back year" and the
Employee is one of the one hundred (100) Employees who received the most
compensation from the Employer during the determination year; and (ii) Employees
who are five percent (5%) owners at any time during the look-back year or
determination year.
The term Highly Compensated Employee includes highly compensated active
employees and highly compensated former employees.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
Highly Compensated Employee for either the separation year or any determination
year ending on or after the Employee's fifty-fifth (55th) birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a five percent (5%) owner who is an active or former
Employee or a Highly Compensated Employee who is one of the ten (10) most Highly
Compensated Employees ranked on the basis of compensation paid by the Employer
during such year, then the family member and the five percent (5%) owner or
top-ten Highly Compensated Employee shall be aggregated. In such case, the
family member and the five percent (5%) owner or top-ten Highly Compensated
Employee shall be treated as a single Employee receiving compensation and plan
contributions or benefits equal to the sum of such compensation and
contributions or benefits of the family member and the five percent (5%) owner
or top-ten Highly Compensated Employee. For purposes of this Section, family
members include the spouse, lineal ascendants and descendants of the Employee or
former Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of Employees in the top-paid group, the
top one hundred (100) Employees, the number of Employees treated as officers,
and the compensation that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
1.16 Hour of Service.
Each hour for an Employee under (a) through (c), determined from the
employment records of the Employer. Any ambiguity which may arise shall be
resolved in favor of crediting Employees with an Hour of Service.
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours will be credited
to the Employee for the computation period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty, leave of absence or paid time off (PTO). No more than five
hundred one (501) Hours of Service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in a single
computation period). Hours under this paragraph will be calculated and credited
pursuant to Section 2530.200(b) of the Department of Labor Regulations, which is
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of Service will
not be credited both under paragraph (a) and (b), as the case may be, and under
this paragraph (c). These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
Notwithstanding the above, (i) an hour for which an Employee is directly
or indirectly paid, or entitled to payment, on account of a period during which
no duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment compensation or
disability insurance laws; and (ii) Hours of Service are not required to be
credited for a payment which solely reimburses an Employee for medical or
medically-related expenses incurred by the Employee.
Hours of Service will be credited for employment with other members of
an affiliated service group (under Section 414(m)), a controlled group of
corporations (under Section 414(b)), or a group of trades or businesses under
common control (under Section 414(c)) of which the Employer is a member, and any
other entity required to be aggregated with the Employer pursuant to Section
414(o) and the regulations thereunder.
Hours of Service will also be credited for any individual considered an
Employee for purposes of this Plan under Section 414(n) or Section 414(o) and
the regulations thereunder.
Solely for purposes of determining whether a Break in Service, as
defined in Section 1.5, for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, eight Hours of Service per day of
such absence. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of such child by the individual, or (4) for purposes of caring for such
child for a period beginning immediately following such birth or placement. The
Hours of Service credited under this paragraph shall be credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period.
Hours of Service shall be determined under the terms of the Family and
Medical Leave Act of 1993 and the Uniformed Services Employment and Reemployment
Rights Act of 1994.
1.17 Leased Employee.
(a) Any person (other than an employee of the recipient) who pursuant to
an agreement between the recipient and any other person ("leasing organization")
has performed services for the recipient (or for the recipient and related
persons determined in accordance with Code Section 414(n)(6)) on a substantially
full time basis for a period of at least one year, and such services are of a
type historically performed by employees in the business field of the recipient
employer. Contributions or benefits provided a leased employee by the leasing
organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer.
(b) A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least ten
percent (10%) of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement which are
excludable from the leased employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased employees do
not constitute more than twenty percent (20%) of the recipient's nonhighly
compensated workforce.
1.18 Limitation Year.
The Plan Year unless any other twelve (12) consecutive month period is
designated pursuant to a written resolution adopted by the Employer.
1.19 Merger Account.
The account maintained for a Participant with respect to a plan which
has merged with this Plan or transferred its assets to this Plan, in accordance
with Section 9.2.
1.20 Normal Retirement Age.
The fifty-fifth (55th) birthday of a Participant, at which time the
Participant shall become fully vested.
1.21 Plan Administrator.
The Committee referred to in Section 13 of this Plan.
1.22 Plan Year.
The calendar year.
1.23 Regular Account.
The individual account maintained for a Participant to which is credited
his share of Employer contributions and forfeitures, adjusted as herein provided
for investment income, gain or loss.
1.24 Rollover Account.
The account maintained in accordance with Section 14.1 for each
Participant who has made a rollover contribution.
1.25 Suspense Account.
The account maintained in accordance with Section 4.8.
1.26 Top Heavy Valuation Date.
The date specified in Section 16.9 of this Plan.
1.27 Trust.
The CenturyTel, Inc.Employee Stock Ownership Trust, created in
accordance with Section 3.3.
1.28 Trustee.
Regions Bank of Louisiana.
1.29 Valuation Date.
The date on which the Trustee shall make a revaluation of the trust fund
pursuant to Section 4.4.
1.30 Vesting Computation Period.
For purposes of determining Years of Service and Breaks in Service for
computing an Employee's nonforfeitable right to the Account balance derived from
Employer contributions, the computation period shall be the Plan Year.
1.31 Year of Service.
A twelve (12) consecutive month period (computation period) during which
an Employee completes at least five hundred (500) Hours of Service. Effective
January 1, 1994, a Year of Service is a twelve-consecutive month period
(computation period) during which an Employee completes at least one thousand
(1,000) Hours of Service. All of an Employee's Years of Service shall be
counted, subject to the following qualifications and exceptions:
(a) A Year of Service will not be credited for any period of Approved
Absence after the Employee incurs a Break in Service during such absence from
the service of the Employer;
(b) Service performed prior to a Break in Service shall not be taken
into account until the Employee has completed a Year of Service after such Break
in Service. Such Year of Service will be measured by the twelve (12) consecutive
month period beginning on the Employee's Date of Reemployment and, if necessary,
subsequent twelve (12) consecutive month periods beginning on anniversaries of
the Employee's Date of Reemployment;
(c) In the case of an Employee who does not have any nonforfeitable
right to his Regular Account, Years of Service, whether or not consecutive,
before a period of consecutive one (1) year Breaks in Service shall not be taken
into account if the number of consecutive one-year Breaks in Service in such
period equals or exceeds the greater of five (5) or the aggregate number of
Years of Service. Such aggregate number of Years of Service will not include any
Years of Service disregarded under the preceding sentence by reason of prior
Breaks in Service;
(d) In the case of a Participant who has five (5) or more consecutive
one-year Breaks in Service, all service after such Breaks in Service will be
disregarded for purposes of vesting the Employer-derived Account balance that
accrued before such Breaks in Service. Such Participant's pre-break service will
count in vesting the post-break Employer-derived Account balance only if either:
(i) such Participant has any nonforfeitable interest in the Account
balance attributable to Employer contributions at the time of
separation from service; or
(ii) upon returning to service the number of consecutive one-year
Breaks in Service is less than the number of Years of Service.
Separate accounts will be maintained for the Participant's pre-break and
post-break Employer-derived Account balance. Both accounts will share in the
earnings and losses of the trust; and
(e) Any Employee who was employed by Central Telephone of Ohio
("Central") on March 31, 1992 and who was not a member of Local 4370 of the
Communications Workers of America at such time, who became employed by the
Employer on or about April 1, 1992 pursuant to an offer of employment by the
Employer, shall be credited for all purposes under this Plan with service
performed prior to April 1, 1992 for Centel Corporation, Central, or any member
of a controlled group in which Centel Corporation and Central were members.
(f) Service with San Marcos Telephone Company, Inc., SM Telecorp, Inc.,
and subsidiaries thereof, and any successors thereto by merger or otherwise,
shall be counted for all purposes under this Plan.
SECTION 2
ELIGIBILITY
2.1 Participation.
Every Participant in the Plan prior to this Amendment and Restatement
shall continue to participate in the Plan as of the effective date hereof.
Additionally, every Employee who has completed one (1) Year of Service during an
Eligibility Computation Period, shall become a Participant in the Plan as of the
Entry Date. However, Employees whose terms of employment are subject to a
collective bargaining agreement, which does not provide for their coverage under
this Plan, as well as Employees for whom union representation negotiations have
begun, which negotiations do not provide for their coverage under this Plan, are
not eligible to participate. In addition, Employees employed by Century Business
Communications, LLC (formerly Century Business Communications, Inc., and
formerly Century Printing & Publishing, Inc.), CenturyTel Interactive Company
(formerly Century Interactive Communications, Inc., and formerly Interactive
Communications, Inc.), CenturyTel Security Systems, Inc., CenturyTel of
Northwest Arkansas, LLC, CenturyTel of Central Arkansas, LLC, CenturyTel of
Central Wisconsin, LLC, Telephone USA of Wisconsin, LLC and Spectra
Communications Group, LLC, and any wholly-owned subsidiaries or affiliates of
any of the foregoing, are not eligible to participate in the Plan.
Employees of CenturyTel of Pecoco, Inc.(formerly Pecoco, Inc.) and its
subsidiaries are eligible to participate in the Plan as of April 27, 1997.
Non-represented Employees of CenturyTel of the Northwest, Inc.(formerly Pacific
Telecom, Inc.) and Pacific Telecom Cellular, Inc., their subsidiaries, and their
Affiliates prior to the acquisition of Pacific Telecom, Inc.by Century Telephone
Enterprises, Inc.or an Affiliate thereof are eligible to participate in the
Plan as of January 1, 1999.
2.2 Determination of Eligibility.
The Plan Administrator shall determine the eligibility of each Employee
for participation in the Plan. Such determination shall be conclusive and
binding upon all persons.
2.3 Election Not to Participate.
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year. The foregoing election not to participate shall
not be available with respect to partners in a partnership.
SECTION 3
CONTRIBUTIONS
3.1 Contributions by Employer.
For the current Plan Year and for each Plan Year thereafter, the
Employer may make a contribution to the Trust in cash or shares of Company
Stock. The Employer's contribution for any Plan Year shall not exceed the
maximum amount allowable as a deduction to the Employer under Section 404 of the
Code.
Notwithstanding the foregoing, the Employer shall make a contribution to
the extent necessary to provide the top heavy minimum allocations under Section
16.14, even if such contribution exceeds current or accumulated net profits or
the maximum amount deductible from the Employer's income for the year.
3.2 Determination of Contribution.
The Employer shall determine the amount of any contributions to be made
by it to the Trust under the terms of this Agreement. The Employer's
determination of such contributions shall be binding on all Participants and the
Trustee.
The Trustee shall have no right or duty to inquire into the amount of
the Employer's annual contribution or the method used in determining the amount
of the Employer's contribution, but shall be accountable only for funds actually
received by it.
3.3 Establishment of Trust.
Benefits under this Plan shall be funded through the CenturyTel, Inc.
Employee Stock Ownership Trust, established by agreement between CenturyTel,
Inc. and Regions Bank of Louisiana. The Trustee shall receive Employer
contributions, hold and invest the Trust fund in accordance with the Trust
agreement, and distribute benefits to Participants in accordance with this Plan
and directions of the Committee.
3.4 Time of Payment of Contribution.
The Employer shall pay to the Trustee its contribution for each Plan
Year within the time prescribed by law, including extensions of time, for the
filing of its Federal income tax return for such year.
3.5 Exclusive Benefit.
Any and all contributions made by the Employer to the Trust shall be
irrevocable, and neither such contributions nor any income therefrom shall be
used for, or diverted to, purposes other than for the exclusive benefit of
Participants or their beneficiaries under the Plan.
3.6 Return of Contributions.
Any contribution made by the Employer because of a mistake of fact must
be returned to the Employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue determines that
the Plan is not initially qualified under the Internal Revenue Code, any
contribution made incident to that initial qualification by the Employer must be
returned to the Employer within one year after the date the initial
qualification is denied, but only if the application for qualification is made
by the time prescribed by law for filing the Employer's return for the taxable
year in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
In the event the deduction of a contribution made by the Employer is
disallowed under Section 404 of the Code, such contribution (to the extent
disallowed) must be returned to the Employer within one year of the disallowance
of the deduction.
SECTION 4
ACCOUNTS OF PARTICIPANTS
4.1 Individual Accounts for Each Participant.
The Plan Administrator or, if the Plan Administrator so determines, the
Trustee, shall maintain a Regular Account for each Participant. With respect to
a Participant who incurs five (5) consecutive one-year Breaks in Service before
receiving a distribution, the vested portion of such Participant's Regular
Account shall remain in his Regular Account, and the nonvested portion of the
Participant's Regular Account shall be forfeited as provided in Section 7.2.
4.2 Allocation of Employer Contributions.
Contributions made by the Employer for a Plan Year shall, as of the
Adjustment Date occurring within such Plan Year, be allocated among and posted
to the Regular Account of each Active Participant in the proportion which the
Compensation paid to such Active Participant for such year bears to the total
Compensation of all Active Participants for such year.
4.3 Allocation of Forfeitures.
The amount of forfeitures determined under Section 7.2 shall be
reallocated as of the Adjustment Date on which forfeitures occurred to the
Regular Accounts of Active Participants by adding the total amount of
forfeitures to the Employer's contribution for the year and allocating the sum
thereof in accordance with Section 4.2. If there were no Employer contributions
for the year, the forfeitures shall be allocated in accordance with Section 4.2.
4.4 Year-End Valuation of Accounts.
The Trustee, as of each Adjustment Date, shall determine the net worth
of the assets of the trust fund. In determining such net worth, the Trustee
shall value the assets of the trust fund at their fair market value as of such
Adjustment Date, and shall deduct all liabilities of the Plan and all expenses
payable from the trust fund for which the Trustee has not yet obtained
reimbursement. Such valuation shall not include any contribution for the year
made by the Employer as of the Valuation Date.
As of each Adjustment Date, before allocation of forfeitures and
Employer contributions for the year, the Trustee shall adjust the net credit
balance in the Accounts of all Participants (whether or not active) upward or
downward, pro-rata, so that the total of such net credit balances will equal the
net worth of the trust fund as of the Adjustment Date. As used herein the term
"net credit balance" means the balance to the credit of each Participant as of
the immediately preceding Adjustment Date or Interim Valuation Date, if later,
as reduced for payments from the Accounts and forfeitures on or subsequent to
such date.
4.5 Interim Valuation of Accounts.
As of the end of any month, the Plan Administrator may request the
Trustee to determine, in accordance with the rules of Section 4.4, the then net
worth of the assets constituting the trust fund. The last day of each month as
of which the Plan Administrator has requested the Trustee to determine the
aforementioned net worth is referred to herein as an "Interim Valuation Date."
All distributions which are to be made as of or after any such Interim
Valuation Date, but prior to the next succeeding Adjustment Date, or, if
earlier, the next succeeding Interim Valuation Date, shall be made as if the
credit balances to all Participants' Accounts had actually been credited or
debited so that the total credit balances to all Accounts would equal the net
worth of the assets constituting the trust fund as of such Interim Valuation
Date.
4.6 Debiting of Distributions.
The amounts, if any, paid to or on behalf of a Participant at any time
shall, concurrent with such payment, be debited against his Account.
4.7 Effective Date of Entries.
Each Account entry which, in accordance with the provisions hereof,
needs to be made shall be considered as having been made on the date herein
specified regardless of the date of actual entry.
LIMIT ON ANNUAL ADDITIONS
4.8 Coverage Under This Plan Only.
(a) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the Employer, or a welfare
benefit fund, as defined in Section 419(e) of the Code, maintained by the
Employer, or an individual medical account, as defined in Section 415(l)(2) of
the Code, maintained by the Employer, or a simplified employee pension, as
defined in Section 408(k) of the Code, maintained by the Employer, which
provides an annual addition as defined in Section 4.12, the amount of annual
additions which may be credited to the Participant's Account for any Limitation
Year will not exceed the lesser of the maximum permissible amount or any other
limitation contained in this Plan. If the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account would cause
the annual additions for the Limitation Year to exceed the maximum permissible
amount, the amount contributed or allocated will be reduced so that the annual
additions for the Limitation Year will equal the maximum permissible amount.
(b) Prior to determining the Participant's actual compensation for the
Limitation Year, the Employer may determine the maximum permissible amount for a
Participant on the basis of a reasonable estimate of the Participant's
compensation for the Limitation Year, uniformly determined for all Participants
similarly situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the maximum permissible amount for the Limitation Year will be
determined on the basis of the Participant's actual compensation for the
Limitation Year.
(d) If, pursuant to Section 4.8(c) or as a result of the allocation of
forfeitures, there is an excess amount, the excess will be disposed of as
follows:
(i) Any nondeductible voluntary employee contributions, to the
extent they would reduce the excess amount, will be
returned to the Participant;
(ii) If after the application of paragraph (i) an excess amount
still exists, and the Participant is covered by the Plan
at the end of the Limitation Year, the excess amount in
the Participant's Account will be used to reduce Employer
contributions (including any allocation of forfeitures)
for such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(iii) If after the application of paragraphs (i) and (ii) an
excess amount still exists, and the Participant is not
covered by the Plan at the end of a Limitation Year, the
excess amount will be held unallocated in a Suspense
Account. The Suspense Account will be applied to reduce
future Employer contributions for all remaining
Participants in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(iv) If a Suspense Account is in existence at any time during a
Limitation Year pursuant to this Section, it will not
participate in the allocation of the Trust's investment
gains and losses. If a Suspense Account is in existence at
any time during a particular Limitation Year, all amounts
in the Suspense Account must be allocated and reallocated
to Participants' Accounts before any Employer or any
Employee contributions may be made to the Plan for that
Limitation Year. Excess amounts may not be distributed to
Participants or former Participants.
4.9 Coverage Under A Prototype Plan.
(a) This Section applies if, in addition to this Plan, the Participant
is covered under a qualified master or prototype defined contribution plan
maintained by the Employer, a welfare benefit fund maintained by the Employer,
an individual medical account maintained by the Employer, or a simplified
employee pension maintained by the Employer that provides an annual addition as
defined in Section 4.12 during any Limitation Year. The annual additions which
may be credited to a Participant's Account under this Plan for any such
Limitation Year will not exceed the maximum permissible amount reduced by the
annual additions credited to a Participant's account under the other qualified
master or prototype defined contribution plans, and welfare benefit funds for
the same Limitation Year. If the annual additions with respect to the
Participant under other qualified master or prototype defined contribution
plans, welfare benefit funds, individual medical accounts, and simplified
employee pensions maintained by the Employer are less than the maximum
permissible amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's Account under this Plan would
cause the annual additions for the Limitation Year to exceed this limitation,
the amount contributed or allocated will be reduced so that the annual additions
under all such plans and funds for the Limitation Year will equal the maximum
permissible amount. If the annual additions with respect to the Participant
under such other qualified master or prototype defined contribution plans,
welfare benefit funds, individual medical accounts, and simplified employee
pensions in the aggregate are equal to or greater than the maximum permissible
amount, no amount will be contributed or allocated to the Participant's Account
under this Plan for the Limitation Year.
(b) Prior to determining the Participant's actual compensation for the
Limitation Year, the Employer may determine the maximum permissible amount for a
Participant in the manner described in Section 4.8(b).
(c) As soon as is administratively feasible after the end of the
Limitation Year, the maximum permissible amount for the Limitation Year will be
determined on the basis of the Participant's actual compensation for the
Limitation Year.
(d) If, pursuant to Section 4.9(c) or as a result of the allocation of
forfeitures, a Participant's annual additions under this Plan and such other
plans would result in an excess amount for a Limitation Year, the excess amount
will be deemed to consist of the annual additions last allocated, except that
annual additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by annual additions to a welfare benefit
fund or individual medical account, regardless of the actual allocation date.
(e) If an excess amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan, the
excess amount attributed to this Plan will be the product of:
(i) the total excess amount allocated as of such date, times
(ii) the ratio of (A) the annual additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (B) the total annual additions allocated to
the Participant for the Limitation Year as of such date
under this and all the other qualified master or prototype
defined contribution plans.
(f) Any excess amount attributed to this Plan will be disposed in the
manner described in Section 4.8(d).
4.10 Coverage Under A Non-Prototype Plan.
If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a master or prototype
plan, annual additions which may be credited to the Participant's Account under
this Plan for any Limitation Year will be limited in accordance with Section 4.9
as though the other plan were a master or prototype plan.
4.11 Combined Limits.
If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of the
Participant's defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any Limitation Year. If the sum of the defined
benefit plan fraction and the defined contribution plan fraction shall exceed
1.0 in any Limitation Year for any Participant in this Plan, the Plan
Administrator shall adjust the numerator of the defined benefit plan fraction so
that the sum of both fractions shall not exceed 1.0 in any Limitation Year for
such Participant.
4.12 Definitions.
(a) Annual additions: The sum of the following amounts credited to a
Participant's Account for the Limitation Year:
(i) Employer contributions;
(ii) Employee contributions;
(iii) Forfeitures;
(iv) Amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(l)(2) of the Code,
which is part of a pension or annuity plan maintained by the
Employer are treated as annual additions to a defined
contribution plan. Also amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to post-
retirement medical benefits, allocated to the separate account
of a key employee, as defined in Section 419A(d)(3) of the
Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer are treated as
annual additions to a defined contribution plan; and
(v) Allocations under a simplified employee pension.
For this purpose, any excess amount applied under Sections 4.8(d) or
4.9(f) in the Limitation Year to reduce Employer contributions will be
considered annual additions for such Limitation Year.
(b) Compensation: For purposes of this Section, compensation shall mean
Section 415 safe-harbor compensation. Compensation is defined as all of a
Participant's wages, salaries, and fees for professional services and other
amounts received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements, or
other expense allowances under a nonaccountable plan [as described in Section
1.61-2(c)]), and excluding the following:
(i) Employer contributions to a plan of deferred compensation
which are not includible in the Employee's gross income
for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan, or
any distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held
by the Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(iv) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity described in Section 403(b) of the Code (whether
or not the amounts are actually excludable from the gross
income of the Employee).
For any self-employed individual, compensation will mean earned income.
For purposes of applying the limitations of this Section, compensation for a
Limitation Year is the compensation actually paid or includable in gross income
during such Limitation Year.
Notwithstanding the preceding sentence, compensation for a Participant
in a defined contribution plan who is permanently and totally disabled (as
defined in Section 22(e)(3) of the Code) is the compensation such Participant
would have received for the Limitation Year if the Participant had been paid at
the rate of compensation paid immediately before becoming permanently and
totally disabled; such imputed compensation for the disabled Participant may be
taken into account only if the Participant is not a highly compensated employee
(as defined in Section 414(q) of the Code) and contributions made on behalf of
such Participant are nonforfeitable when made.
(c) Defined benefit fraction: A fraction, the numerator of which is the
sum of the Participant's projected annual benefits under all defined benefit
plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of one hundred twenty-five percent (125%) of
the dollar limitation determined for the Limitation Year under Sections 415(b)
and (d) of the Code or one hundred forty percent (140%) of the highest average
compensation, including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31, 1986, in
one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
one hundred twenty-five percent (125%) of the sum of the annual benefits under
such plans which the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the Plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all Limitation Years
beginning before January 1, 1987.
(d) Defined contribution dollar limitation: $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth in Section 415
(b)(1) of the Code as in effect for the Limitation Year.
(e) Defined contribution fraction: A fraction, the numerator of which
is the sum of the annual additions to the Participant's account under all
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior limitation years (including the annual
additions attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
Employer, and the annual additions attributable to all welfare benefit funds,
individual medical accounts, and simplified employee pensions maintained by the
Employer), and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior limitation years of service with the
Employer (regardless of whether a defined contribution plan was maintained by
the Employer). The maximum aggregate amount in any limitation year is the lesser
of one hundred twenty-five percent (125%) of the dollar limitation determined
under Sections 415(b) and (d) of the Code in effect under Section 415(c)(1)(A)
of the Code or thirty-five percent (35%) of the Participant's compensation for
such year. If the Employee was a participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence on
May 6, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0, times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The annual addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all Employee contributions as annual
additions.
(f) Employer: For purposes of this Section, Employer shall mean the
Employer and all members of a controlled group of corporations (as defined in
Section 414(b) of the Code as modified by Section 415(h)), all commonly
controlled trades or businesses (as defined in Section 414(c) of the Code as
modified by Section 415(h)) or affiliated service groups (as defined in Section
414(m) of the Code) of which the Employer is a part, and any other entity
required to be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code.
(g) Excess amount: The excess of the Participant's annual additions for
the Limitation Year over the maximum permissible amount.
(h) Highest average compensation: The average compensation for the three
consecutive Years of Service with the Employer that produces the highest
average. A Year of Service with the Employer is the twelve (12) consecutive
month period defined in Section 1.29 of this Plan.
(i) Limitation year: The calendar year. All qualified plans maintained
by the Employer must use the same Limitation Year. If the Limitation Year is
amended to a different twelve (12) consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the amendment is
made.
(j) Master or prototype plan: A plan the form of which is the subject
of a favorable opinion letter from the Internal Revenue Service.
(k) Maximum permissible amount: The maximum annual addition that may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year shall not exceed the lesser of:
(i) the defined contribution dollar limitation, or
(ii) 25 percent of the Participant's compensation for the
Limitation Year.
The compensation limitation referred to in (ii) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an annual
addition under Section 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different twelve (12) consecutive month period, the
maximum permissible amount will not exceed the defined contribution dollar
limitation multiplied by the following fraction:
Number of months in the short Limitation Year
12
(l) Projected annual benefit: The annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit is expressed in
a form other than a straight life annuity or qualified joint and survivor
annuity) to which the Participant would be entitled under the terms of the Plan
assuming:
(i) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later),
and
(ii) the Participant's compensation for the current Limitation
Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all
future Limitation Years.
SECTION 5
BENEFITS PAYABLE AFTER NORMAL RETIREMENT
5.1 Optional Methods of Payment Available at Retirement.
All sums credited to a Participant's Account shall become fully vested
upon attainment of Normal Retirement Age. Upon actual retirement at or after
Normal Retirement Age, a Participant shall be entitled to receive the full
amount credited to his Account as of the Valuation Date or Interim Valuation
Date immediately preceding the month in which payment is to be made, which
amount shall be paid to the Participant in one lump sum: (i) within sixty (60)
days after the close of the Plan Year in which the Participant retires, or (ii)
within sixty (60) days after the distributable amount has been determined
retroactive to the date in 5.1(i), unless prior to the date of his retirement he
elects, in the manner prescribed by the Plan Administrator, any one of the
following method or methods:
(a) Payment of the entire amount of the Participant's Account in one
lump sum at some future date, not later than one year after Normal Retirement
Date;
(b) Payment in substantially equal annual, quarterly or monthly
installments (including net investment income, gain or loss) until the value of
such Participant's Account is exhausted. Unless the Participant elects
otherwise, the payment period shall not exceed five (5) years. This five (5)
year period shall be extended by one (1) year, up to five (5) additional years,
for each $113,980 (or fraction thereof) by which such Participant's Account
balance exceeds $569,900 (the dollar amounts herein are subject to cost of
living adjustments prescribed by the Secretary of the Treasury); or
(c) Any combination of the foregoing.
Notwithstanding anything contained in this Section 5.1, lump sum,
installment or any other benefits may not be paid directly from the Plan in any
form of a life annuity or through the distribution of property in any form of a
life annuity.
In addition, if the Participant's spouse is not the designated
beneficiary, the method of distribution selected must assure that at least fifty
percent (50%) of the present value of the amount available for distribution is
paid within the life expectancy of the Participant.
All distributions required under this Section shall be determined and
made in accordance with the proposed regulations under Section 401(a)(9) of the
Code, including the minimum distribution incidental benefit requirement of
Section 1.401(a)(9)-2 of the proposed regulations.
Any distribution under this Section 5.1 shall comply with the consent
requirements contained in Section 7.3.
5.2 Manner of Payment Following Commencement of Payments
Following the commencement of payments under Section 5.1, a Participant
and the Plan Administrator may, notwithstanding the fact that periodic benefits
are being paid, agree that as of any subsequent date the balance credited to
such Participant's Account shall be paid to or applied for the benefit of the
Participant in accordance with any other payout method of Section 5.1.
5.3 Required Beginning Date.
The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's required beginning date, as defined
in Section 6.2(f). 5.4 Determination of Amount to be Distributed Each Year.
If a Participant's interest is to be distributed in other than a
single-sum, the following minimum distribution rules shall apply on or after the
required beginning date:
(a) If a Participant's benefit is to be distributed over (1) a period
not extending beyond the life expectancy of the Participant or the joint life
and last survivor expectancy of the Participant and the Participant's designated
beneficiary or (2) a period not extending beyond the life expectancy of the
designated beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy.
(b) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the amount to
be distributed each year, beginning with distributions for the first
distribution calendar year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's spouse is not the designated beneficiary,
the applicable divisor determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the proposed regulations. Distributions after the death of the
Participant shall be distributed using the applicable life expectancy in Section
5.4(a) above as the relevant divisor without regard to proposed regulations
Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's required
beginning date. The minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which the
Participant's required beginning date occurs, must be made on or before December
31 of that distribution calendar year. 5.5 Age 65 Distributions.
Upon the attainment of the age of 65 years, a Participant shall be
entitled to elect a distribution of all or a portion of his Account in the Plan.
A Participant who elects to receive a distribution pursuant to this Section 5.5
shall continue to be eligible to participate in the Plan on the same basis as
any other Participant.
5.6 Definitions.
For purposes of this Section, the definitions contained in Section 6.2
shall apply.
5.7 Small Accounts.
Any provision of the Plan to the contrary notwithstanding, the
Administrator shall have the authority to direct the settlement of any Account
having a balance of less than $5,000.00 by the payment of one lump sum.
SECTION 6
BENEFITS PAYABLE IN THE EVENT OF DEATH OR DISABILITY
6.1 Death Distribution Provisions.
Upon the death of a Participant, his or her beneficiary shall be
entitled to receive the full amount credited to his Account. Upon the death of a
Participant, the following distribution provisions shall take effect:
(a) If the Participant dies after distribution of his or her interest
has begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Participant's death.
(b) If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made to receive
distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable to
a designated beneficiary, distributions may be made over
the life expectancy or over a period certain not greater
than the life expectancy of the designated beneficiary
commencing on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died;
(ii) if the designated beneficiary is the Participant's
surviving spouse, the date distributions are required to
begin in accordance with (i) above shall not be earlier
than the later of (1) December 31 of the calendar year in
which the Participant died and (2) December 31 of the
calendar year in which the Participant would have attained
age 70 1/2.
If the Participant has not made an election pursuant to this Section
6.1(b) by the time of his or her death, the Participant's designated beneficiary
must elect the method of distribution no later than the earlier of (1) December
31 of the calendar year in which distributions would be required to begin under
this Section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated beneficiary, or if the designated beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
(c) For purposes of Section 6.1(b) above, if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the provisions
of Section 6.1(b), with the exception of paragraph (ii) therein, shall be
applied as if the surviving spouse were the Participant.
(d) For purposes of this Section 6.1, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse when the child reaches the
age of majority.
(e) For the purposes of this Section 6, distribution of a Participant's
interest is considered to begin on the Participant's required beginning date
(or, if Section 6.1(c) above is applicable, the date distribution is required to
begin to the surviving spouse pursuant to Section 6.1(b) above). If distribution
in the form of an annuity irrevocably commences to the Participant before the
required beginning date, the date distribution is considered to begin is the
date distribution actually commences.
6.2 Definitions.
For purposes of this Section and Section 5, the following definitions
shall apply:
(a) Applicable life expectancy. The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the Participant (or
designated beneficiary) as of the Participant's (or designated beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy shall be the
life expectancy as so recalculated. The applicable calendar year shall be the
first distribution calendar year, and if life expectancy is being recalculated
such succeeding calendar year.
(b) Designated beneficiary. The individual who is designated as the
beneficiary under the Plan in accordance with Section 401(a)(9) and the proposed
regulations thereunder.
(c) Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to this Section 6.1 above.
(d) Life expectancy. Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples in Tables V and
VI of Section 1.72-9 of the income tax regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in Section 6.1(b)(ii) above) by the time distributions
are required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse beneficiary may not
be recalculated.
(e) Participant's benefit.
(i) The Account balance as of the last valuation date in the
calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to
the Account balance as of dates in the valuation calendar
year after the valuation date and decreased by
distributions made in the valuation calendar year after
the valuation date.
(ii) Exception for second distribution calendar year. For
purposes of paragraph (i) above, if any portion of the
minimum distribution for the first distribution calendar
year is made in the second distribution calendar year on
or before the required beginning date, the amount of the
minimum distribution made in the second distribution
calendar year shall be treated as if it had been made in
the immediately preceding distribution calendar year.
(f) Required beginning date.
(i) General rule. The required beginning date of a Participant
is the first day of April of the calendar year following
the calendar year in which the Participant attains age
701/2.
(ii) Transitional rules. The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988,
shall be determined in accordance with (A) or (B) below:
(A) Non-5-percent owners. The required beginning date
of a Participant who is not a 5-percent owner is
the first day of April of the calendar year
following the calendar year in which the later of
retirement or attainment of age 70 1/2 occurs.
(B) 5-percent owners. The required beginning date of a
Participant who is a 5-percent owner during any
year beginning after December 31, 1979, is the
first day of April following the later of:
(1) the calendar year in which the Participant
attains age 701/2, or
(2) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5-percent owner, or
the calendar year in which the Participant
retires.
The required beginning date of a Participant who is
not a 5-percent owner who attains age 70 1/2 during
1988 and who has not retired as of January 1, 1989,
is April 1, 1990.
(iii) 5-percent owner. A Participant is treated as a 5-percent
owner for purposes of this Section if such Participant is
a 5-percent owner as defined in Section 416(i) of the Code
(determined in accordance with Section 416 but without
regard to whether the Plan is top-heavy) at any time
during the Plan Year ending with or within the calendar
year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
(iv) Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even
if the Participant ceases to be a 5-percent owner in a
subsequent year.
6.3 Designation of Beneficiary.
A Participant at the time he joins the Plan shall designate a
beneficiary or beneficiaries to receive the sums credited to his Account in the
event of his death, which designation may be changed by the Participant from
time to time. To be effective, the original designation of beneficiaries and any
subsequent change must be in writing on the form provided for that purpose by
the Plan Administrator.
The beneficiary of a Participant who is married at the time of his death
shall be his surviving spouse unless his surviving spouse consents in writing on
the form provided for that purpose by the Plan Administrator to the designation
of another beneficiary. A consent by a Participant's spouse shall not be
effective unless such consent is witnessed by the Plan Administrator or a Notary
Public.
6.4 Failure to Designate a Beneficiary or Select a Method of Payment
In the event that no beneficiary is properly designated or in the event
that a beneficiary designated by the Participant predeceased the Participant and
no new designation of beneficiary is made, the Plan Administrator, in its
discretion, may direct the Trustee to make payment of all sums to which the
deceased Participant is entitled to either:
(a) any one or more of the next of kin (including the surviving spouse)
of the Participant and in such proportions as the Plan Administrator may
determine; or
(b) the legal representative or representatives of the estate of the
last to die of the Participant or his beneficiary.
If a Participant who is married at the time of his death has not
properly designated a beneficiary other than his spouse in accordance with the
last paragraph of Section 6.3, the Participant's beneficiary shall be his
surviving spouse.
6.5 Disability of a Participant.
In the event of the Disability of a Participant prior to attaining
Normal Retirement Age, such Participant shall be entitled to receive the entire
amount credited to his Account. Payment shall begin not later than the sixtieth
(60th) day after the close of the Plan Year in which the Administrator receives
proof of the Participant's Disability, and shall be made in accordance with any
of the methods provided in Section 5, as selected by the Participant. Any
distribution hereunder shall comply with the consent requirements contained in
Section 7.3.
6.6 Transitional Rule.
Notwithstanding the other requirements of this Section, distribution on
behalf of any Employee, including a 5-percent owner, may be made in accordance
with all of the following requirements (regardless of when such distribution
commences):
(a) The distribution by the Plan is one which would not have
disqualified such Plan under Section 401(a)(9) of the Code as in effect prior to
amendment by the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the Plan is being distributed or,
if the Employee is deceased, by a beneficiary of such Employee.
(c) Such designation was in writing, was signed by the Employee or the
beneficiary, and was made before January 1, 1984.
(d) The Employee had accrued a benefit under the plan as of December
31, 1983.
(e) The method of distribution designated by the Employee or the
beneficiary specifies the time at which distribution will commence, the period
over which distributions will be made, and in the case of any distribution upon
the Employee's death, the beneficiaries of the Employee listed in order of
priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the Employee.
For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the beneficiary to whom such
distribution is being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in (a) and (e) above.
If a designation is revoked any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and the proposed regulations
thereunder. If a designation is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the proposed regulations thereunder,
but for the Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum distribution
incidental benefit requirements in Section 1.401(a)(9)-2 of the proposed
regulations. Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or addition of
another beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distributions are
to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the rules in Q&A J-2
and Q&A J-3 shall apply.
SECTION 7
BENEFITS PAYABLE UPON BREAK IN SERVICE
OR EMPLOYMENT TERMINATION
7.1 Vesting Schedule.
Any Participant who incurs a Break in Service during a vesting
computation period for reasons other than his retirement, death or disability
shall be entitled to receive at the time and in the manner described hereinafter
that percentage of the amount credited to his Account as of the Valuation Date
or Interim Valuation Date coincident with or immediately preceding the Break in
Service, determined as follows:
(a) A Regular Account shall be vested in accordance with the following
schedule:
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
less than 5 0
5 or more 100
(b) A Rollover Account shall be fully vested at all times.
Notwithstanding the above provisions of this Section 7.1, a
Participant's vested interest shall not be less than it was before this
amendment and restatement. Also, notwithstanding the above vesting schedule, an
Employee's right to his or her Account balance is nonforfeitable upon the
attainment of Normal Retirement Age.
Finally, notwithstanding the above vesting schedule, an Employee's right
to his or her Account balance shall fully vest and become nonforfeitable
automatically upon the occurrence of any of the following events, each of which
shall constitute a "Change of Control": (i) the acquisition by any person of
beneficial ownership of 30% or more of the outstanding shares of the Company
Stock, or 30% or more of the combined voting power of the Employer's then
outstanding securities entitled to vote generally in the election of directors;
provided, however, that for purposes of this sub-item (i), the following
acquisitions shall not constitute a Change of Control: (a) any acquisition
(other than a Business Combination (as defined below) which constitutes a Change
of Control under sub-item (iii) hereof) of Company Stock directly from the
Employer, (b) any acquisition of Company Stock by the Employer or its
subsidiaries, (c) any acquisition of Company Stock by any employee benefit plan
(or related trust) sponsored or maintained by the Employer or any corporation
controlled by the Employer, or (d) any acquisition of Company Stock by any
corporation pursuant to a Business Combination that does not constitute a Change
of Control under sub-item (iii) hereof; or (ii) individuals who, as of January
1, 2000, constitute the Board of Directors of the Employer (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director subsequent
to such date whose election, or nomination for election by the Employer's
shareholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board shall be considered a member of the
Incumbent Board, unless such individual's initial assumption of office occurs as
a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the Incumbent Board;
or (iii) consummation of a reorganization, share exchange, merger or
consolidation (including any such transaction involving any direct or indirect
subsidiary of the Employer), or sale or other disposition of all or
substantially all of the assets of the Employer (a "Business Combination");
provided, however, that in no such case shall any such transaction constitute a
Change of Control if immediately following such Business Combination: (a) the
individuals and entities who were the beneficial owners of the Employer's
outstanding Company Stock and the Employer's voting securities entitled to vote
generally in the election of directors immediately prior to such Business
Combination have direct or indirect beneficial ownership, respectively, of more
than 50% of the then outstanding shares of common stock, and more than 50% of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the surviving or successor
corporation, or, if applicable, the ultimate parent company thereof (the
"Post-Transaction Corporation"), and (b) except to the extent that such
ownership existed prior to the Business Combination, no person (excluding the
Post-Transaction Corporation and any employee benefit plan or related trust of
either the Employer, the Post-Transaction Corporation or any subsidiary of
either corporation) beneficially owns, directly or indirectly, 20% or more of
the then outstanding shares of common stock of the corporation resulting from
such Business Combination or 20% or more of the combined voting power of the
then outstanding voting securities of such corporation, and (c) at least a
majority of the members of the board of directors of the Post-Transaction
Corporation were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board of Directors, providing for
such Business Combination; or (iv) approval by the shareholders of the Employer
of a complete liquidation or dissolution of the Employer. For purposes of the
immediately preceding sentence, the term "person" shall mean a natural person or
entity, and shall also mean the group or syndicate created when two or more
persons act as a syndicate or other group (including, without limitation, a
partnership or limited partnership) for the purpose of acquiring, holding, or
disposing of a security, except that "person" shall not include an underwriter
temporarily holding a security pursuant to an offering of the security.
7.2 Distributions.
(a) If an Employee terminates service, and the value of the Employee's
vested Account balance derived from Employer and Employee contributions is not
greater than $5,000, the Employee will receive a distribution of the value of
the entire vested portion of such Account balance and the nonvested portion will
be treated as a forfeiture. For purposes of this Section, if the value of an
Employee's vested Account balance is zero, the Employee shall be deemed to have
received a distribution of such vested Account balance. A Participant's vested
Account balance shall not include accumulated deductible employee contributions
within the meaning of Section 72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
(b) If an Employee terminates service, and elects, in accordance with
the requirements of this Section 7, to receive the value of the Employee's
vested Account balance, the nonvested portion will be treated as a forfeiture.
If the Employee elects to have distributed less than the entire vested portion
of the Account balance derived from Employer contributions, the part of the
nonvested portion that will be treated as a forfeiture is the total nonvested
portion multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator of which
is the total value of the vested Employer-derived Account balance.
(c) If an Employee receives or is deemed to receive a distribution
pursuant to this Section and the Employee resumes employment covered under this
Plan, the Employee's Employer-derived Account balance will be restored to the
amount on the date of distribution if the Employee repays to the Plan the full
amount of the distribution attributable to Employer contributions before the
earlier of five (5) years after the first date on which the Participant is
subsequently re-employed by the Employer, or the date the Participant incurs
five (5) consecutive one-year Breaks in Service following the date of the
distribution. If an Employee is deemed to receive a distribution pursuant to
this Section, and the Employee resumes employment covered under this Plan before
the date the Participant incurs five (5) consecutive one-year Breaks in Service,
upon the reemployment of such Employee, the Employer-derived Account balance of
the Employee will be restored to the amount on the date of such deemed
distribution.
In the event restoration is required under this Section 7.2(c), the
sources of restoration, in the order listed, shall be:
(i) Forfeitures. To the extent used for restoration, they
shall not be reallocated, or used to reduce the Employer
contribution, as normally provided in Section 4.3.
(ii) Employer contribution. Notwithstanding Section 3.1,
the Employer shall make any contribution required for
restoration.
Such restoration shall be made for the year in which repayment occurs
within the time prescribed by law, including extensions of time, for the filing
of the Employer's Federal income tax return for such year.
For purposes of applying the limitations of Code Sections 415(c) and
(e), and Section 4.8 and 4.9 of this Plan, the repayment by the Participant and
the restoration provided for above shall not be treated as annual additions.
7.3 Restrictions on Immediate Distributions.
(a) If the value of a Participant's vested Account balance derived from
Employer and Employee contributions exceeds (or at the time of any prior
distribution exceeded) $5,000, and the Account balance is immediately
distributable, the Participant must consent to any distribution of such Account
balance. The Plan Administrator shall notify the Participant of the right to
defer any distribution until the Participant's Account balance is no longer
immediately distributable. Such notification shall include a general description
of the material features, and an explanation of the relative values of, the
optional forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Section 417(a)(3), and shall be provided no
less than thirty (30) days and no more than ninety (90) days prior to the
annuity starting date. However, distribution may commence less than thirty (30)
days after the notice described in the preceding sentence is given, provided the
distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least thirty (30) days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and the Participant,
after receiving the notice, affirmatively elects a distribution.
(b) The consent of the Participant shall not be required to the extent
that a distribution is required to satisfy Section 401(a)(9) or Section 415 of
the Code. In addition, upon termination of this Plan if the Plan does not offer
an annuity option (purchased from a commercial provider) and if the Employer or
any entity within the same controlled group as the Employer does not maintain
another defined contribution plan (other than an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code), the Participant's Account balance
will, without the Participant's consent, be distributed to the Participant.
However, if any entity within the same controlled group as the Employer
maintains another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975 (e)(7) of the Code) then the
Participant's account balance will be transferred, without the Participant's
consent, to the other plan if the Participant does not consent to an immediate
distribution.
(c) An Account balance is immediately distributable if any part of the
Account balance could be distributed to the Participant (or surviving spouse)
before the Participant attains (or would have attained if not deceased) the
later of Normal Retirement Age or age 62.
(d) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested Account
balance shall not include amounts attributable to accumulated deductible
employee contributions within the meaning of Section 72(o)(5)(B) of the Code.
7.4 Payment of Account Balance.
Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the close of the Plan Year
in which:
(a) the Participant attains age 65 (or Normal Retirement Age,
if earlier);
(b) occurs the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant to consent to a
distribution while a benefit is immediately distributable, within the meaning of
Section 7.3 of the Plan, shall be deemed to be an election to defer commencement
of payment of any benefit sufficient to satisfy this Section.
7.5 Treatment of Accounts in Pay Status.
If payments are to be made under Section 5.1(b) or (c), at the election
of the Plan Administrator:
(a) The Participant's Account shall continue to share in the annual and
interim valuations of the trust fund and in the adjustment of the accounts for
investment income, gains or losses as provided in Sections 4.4 and 4.5; or
(b) The Plan Administrator may instruct the trustee to segregate the
Participant's Account which shall then be separately valued and adjusted each
year to reflect the actual income derived thereon and any distributions made
therefrom under this Plan.
7.6 Direct Rollovers.
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an eligible rollover distribution that is equal to at least
$500 paid directly to an eligible retirement plan specified by the distributee
in a direct rollover. The distributee may select only one (1) eligible
retirement plan to which a direct rollover may be made.
(b) Definitions
(i) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee
or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distri-
bution to the extent such distribution is required under
Section 401(a)(9) of the Code; the portion of any other
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities);
and any other distribution(s) that is reasonably expected to
total less than $200 during a year.
(ii) Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified
plan described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(iii) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
7.7 Amendment of Vesting Schedule.
If the Plan's vesting schedule is amended, or the Plan is amended in any
way that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an automatic
change to or from a top-heavy vesting schedule, each Participant with at least
three (3) Years of Service with the Employer may elect, within a reasonable
period after the adoption of the amendment or change, to have the nonforfeitable
percentage computed under the Plan without regard to such amendment or change.
For Participants who do not have at least one (1) Hour of Service in any Plan
Year beginning after December 31, 1988, the preceding sentence shall be applied
by substituting "five (5) Years of Service" for "three (3) Years of Service"
where such language appears.
The period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end on the latest
of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
SECTION 8
FORM OF DISTRIBUTION
8.1 Payment in Shares or Cash.
Any distributions under Sections 5, 6, and 7 shall be made by the
Trustee by distributing whole shares of Company Stock, as determined by the
Trustee, at the market value of such shares on a national securities exchange or
a national quotation system, with the value of any fractional shares paid in
cash.
The Trustee may, with the consent of the Participant or if the
Participant is deceased, his beneficiary, make distributions under Sections 5, 6
and 7 in cash. The amount of cash to be distributed to a Participant for shares
actually allocated to his Account shall be determined based on the market value
of the shares of Company Stock as of the trading date immediately preceding the
distribution.
8.2 Dividends.
Cash dividends on shares of Company Stock allocated to Participants'
Accounts may be paid to Participants currently, or at such time as payment is
otherwise due under Sections 5, 6, and 7, as determined in the sole discretion
of the Plan Administrator, exercised in a uniform and nondiscriminatory manner.
SECTION 9
MERGER OR CONSOLIDATION
9.1 Merger or Consolidation.
In the event of a merger or consolidation of this Plan with any other
plan, or in the event of a transfer of assets or liabilities of this Plan to any
other plan, each Participant in the Plan will receive a benefit immediately
after the merger, consolidation, or transfer (as if the Plan then terminated)
which is at least equal to the benefit the Participant would have been entitled
to immediately before such merger, consolidation, or transfer (as if the Plan
had then terminated).
9.2 Merger Accounts.
In the event any other plan transfers its assets to this Plan or merges
with this Plan, this Plan being the surviving plan, the Plan Administrator, or
if the Plan Administrator so determines, the Trustee, shall create a "Merger
Account" for each Participant whose accounts are transferred to this Plan. A
Participant's Merger Account shall be paid to the Participant or his
beneficiaries in accordance with Sections 5, 6, 7 and 8. Merger Accounts shall
participate in the earnings and losses in the fund and in forfeitures and
Employer contributions in the same manner as Regular Accounts.
9.3 Merger Agreement or Agreement Relating to Transfer of Assets.
Upon instructions of the Plan Administrator, the Trustee shall enter
into a merger agreement with any other plan or shall enter into an agreement
respecting the transfer of assets of this Plan to another plan or from any other
plan to this Plan; however, if this Plan is a profit-sharing plan which does not
provide for a life annuity form of payment to Participants, the Plan
Administrator shall not enter into any agreement for the transfer of assets from
another plan to this Plan if the proposed transferor plan is a defined benefit
plan, money purchase pension plan (including a target benefit plan), stock
bonus, or profit sharing plan which would otherwise provide for a life annuity
form of payment to the participants in such plan.
SECTION 10
CLAIMS PROCEDURE
10.1 Filing of a Claim for Benefits.
(a) Every Participant and beneficiary (the claimant) who thinks he is
entitled to a benefit under the Plan or who is not satisfied that the correct
benefit is being paid shall have the right to file a claim for such benefit at
any time.
(b) Such claim must be filed in writing with the Plan Administrator. The
claim shall set forth the grounds on which it is based, but no particular form
of written claim is required.
10.2 Notification to Claimant of Decision.
(a) The Plan Administrator shall furnish notice of its decision (to
grant the claim or to deny it in whole or in part) to the claimant within sixty
(60) days after the claim is filed. If the Plan Administrator fails to give
notice within sixty (60) days after the claim is filed, it shall be considered
wholly denied.
(b) If the claim is denied in whole or in part, the notice of denial by
the Plan Administrator to the claimant shall set forth in writing in a manner
calculated to be understood by the claimant:
(i) The specific reason or reasons for the denial;
(ii) Specific reference to pertinent plan provisions on which
the denial is based;
(iii) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary; and
(iv) An explanation of the Plan's claim review procedure as set
forth in Section 10.3.
10.3 Review Procedure.
(a) A claimant may appeal the denial of a claim, including a claim
considered denied, to the Plan Administrator for a full and fair review of the
claim.
(b) A request for review of a denied claim must be made in writing to
the Plan Administrator within sixty (60) days after the date of the notice
denying the claim or within sixty (60) days after the date on which the claim is
considered denied.
(c) The claimant or his authorized representative shall have the right,
during the review procedure, to review all pertinent documents and to submit
issues and comments in writing to the Plan Administrator.
10.4 Decision on Review.
(a) A decision on review shall be made promptly by the Plan
Administrator and not later than sixty (60) days after it receives the request
for review.
(b) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant and specific references to pertinent Plan provisions
on which the decision is based.
10.5 Agent for Service of Process.
In any action against the Plan or Trust, the Plan Administrator, whose
address is 100 CenturyTel Drive, Monroe, Louisiana 71203, shall be the agent for
service of process of the Plan and Trust.
SECTION 11
ADOPTION BY OTHER COMPANIES
11.1 Rights of Other Companies to Participate
Any other corporation, association, joint venture, proprietorship or
partnership (hereinafter called adopting companies) may adopt the terms of this
Plan by a resolution of the Board of Directors of such entity in the form
specified by the Plan Administrator, provided that the Board of Directors of the
Employer and the Plan Administrator both approve such participation. Unless
otherwise provided in the Plan or in a separate written agreement, all
subsidiaries of the Employer shall be deemed to be adopting companies
participating in the Plan. A newly formed subsidiary, or a subsidiary acquired
by the Employer, shall be deemed to be an adopting company as of the date of
formation or acquisition, as the case may be, unless otherwise provided in the
Plan or in a separate written agreement.
11.2 Control of Plan by the Employer.
The administrative powers and control of the Employer as provided in the
Plan, shall not be deemed diminished under the Plan by reason of participation
of adopting companies in the Plan, and such administrative powers and control
specifically granted herein to the Employer with respect to the appointment of
the Plan Administrator and Trustee and other matters shall apply only with
respect to the Employer. The Plan Administrator, under the control of the
Employer, shall also be the Plan Administrator for the adopting companies.
11.3 Allocations of Contributions and Forfeitures.
The amounts forfeited by Employees of the Employer and adopting
companies shall be allocated across company lines in accordance with the
provisions of Section 4.3 hereof to all Participants who were Employees of the
Employer and applicable adopting companies during the Plan Year in which such
forfeitures occurred and the contributions made by the Employer and each
adopting company shall be allocated across company lines in accordance with the
provisions of Section 4.2 hereof to Participants who were Employees of the
Employer and applicable adopting companies during the Plan Year for which each
contribution is made. One member of an affiliated group may make contributions
on behalf of another member of such group in accordance with Regulations Section
1.404(a)-10, as amended.
11.4 Withdrawal of Employer or Adopting Companies
The Employer or adopting company may withdraw at any time without
affecting the others in the Plan. Such withdrawal may be accompanied by such
amendments to the Plan as the withdrawing Employer or adopting company shall
deem proper to continue a plan for its Employees separate and distinct from this
Plan, but, if such withdrawing party does not provide for the continuance of a
separate plan for its Employees, such withdrawal shall constitute a termination
of this Plan with respect to that withdrawing party. The Employer may in its
absolute discretion terminate any adopting company's participation at any time.
Withdrawal from the Plan by any party shall not affect the continued operation
of the Plan with respect to the other participating parties.
11.5 Amendment of Plan.
The participation in the Plan of adopting companies shall not limit the
power of the Employer under Trust Section 4.1; provided, however, that the
Employer shall deliver notice of each amendment to the Plan to each adopting
company within thirty (30) days of such amendment. Amendments by the Employer
shall be binding upon all adopting companies to the extent accepted by such
adopting companies. Acceptance by each such company shall be presumed unless the
Employer and Trustee are given written notice of refusal to accept within sixty
(60) days after the date of the amendment. The Employer and each adopting
company may modify the provisions of the Plan as it pertains only to its own
Employees by the adoption of an amendment to the Plan specifying such
modifications which shall pertain only to its Employees except to the extent
that Employer amendments are presumed accepted by the adopting companies, and
shall not affect the continued operation of the Plan with respect to any other
party.
11.6 Termination of One or More Parties.
The Plan may be terminated by all parties at any time in the manner
described in Trust Section 4.2, on the part of each party. The Plan may be
terminated in the manner described above with respect to one, but less than all
the parties hereto and the Plan continued for the remaining parties. 11.7
Reference to Employer in Plan.
Except as provided in this Section 11 and unless the context indicates
otherwise, references to "Employer" in this Plan shall mean the Employer and all
adopting companies.
SECTION 12
PROVISIONS RELATING TO PARTICIPANTS
12.1 Information Required of Participants.
Each Participant shall furnish to the Plan Administrator such
information as the Plan Administrator shall deem necessary and desirable for
purposes of administering the Plan.
Any notice or information which, according to the provisions of the
Plan, must be filed with the Plan Administrator shall be deemed so filed if
addressed to 100 CenturyTel Drive, Monroe, Louisiana 71203, and either delivered
in person or mailed to such address, postage fully paid.
SECTION 13
PLAN ADMINISTRATOR
13.1 Administration by Plan Administrator.
This Plan shall be administered by a Committee, which shall be the "Plan
Administrator" and "named fiduciary."
13.2 Appointment of Committee.
The Board of Directors of the Employer shall fix the number of persons
to be members of the Committee (which number of voting members shall always be
an odd number) and shall appoint persons from among the officers and Employees
of the Employer to serve as members of the Committee. The Committee shall have
complete control of the administration of the Plan. Members of the Committee
shall serve without remuneration for so long as it is mutually agreeable to them
and to the Employer but they shall be reimbursed for all expenses incurred by
them in the performance of their duties. Any member may resign by delivering his
written resignation to the Employer and to the other members of the committee.
The Board of Directors of the Employer may remove or replace any member of the
Committee, or fill any vacancy, no matter how created, by notifying the member
concerned and the other members of the Committee in writing.
13.3 Majority Action.
Action taken by a majority of the members of the Committee shall, to the
extent lawful, be binding upon the Employees, Participants, and all persons
claiming any right under the Plan through any Employee or Participant. The
Committee may act by vote, at a meeting, or in writing, without a meeting.Any
act of the Committee shall be sufficiently evidenced if certified to by any two
members thereof or by any person not a member of the Committee but who is
designated, in writing, as the Secretary of the Committee by a majority thereof.
A member of the Committee who is a Participant shall not vote on any question
relating specifically to himself, and in the event the remaining members of the
Committee are unable to agree to a determination of such question, another
person shall be selected by the Board of Directors of the Employer for the
purpose of making such determination.
13.4 Powers of the Plan Administrator.
The Committee as Plan Administrator shall have the following powers:
(a) To make rules and regulations for the administration of the Plan
which are not inconsistent with the terms and provisions hereof;
(b) To construe all terms, provisions, conditions and limitations of
this Plan;
(c) To correct any defect or supply any omission or reconcile any
inconsistency that may appear in the Plan, in such manner and to such extent as
it shall deem expedient to carry this Plan into effect for the greatest benefit
of all interested parties;
(d) To select, employ and compensate from time to time such consultants,
actuaries, accounts, attorneys, and other agents and Employees as the Plan
Administrator may deem necessary or advisable in the proper and efficient
administration of this Plan and Trust to carry out nonfiduciary and fiduciary
responsibilities (other than trustee responsibilities as defined in Section
405(c)(3) of ERISA);
(e) To determine all questions relating to the eligibility of Employees
to become Participants, and to determine the amount of compensation upon which
the allocation of each Participant shall be calculated;
(f) To make all determination and computations concerning the benefits,
credits and debits to which any Participant or beneficiary is entitled under the
Plan;
(g) To determine all questions relating to the administration of this
Plan and Trust (1) when differences of opinion arise between the Employer, the
Trustee, a Participant, or any of them, and (2) whenever it is deemed advisable
to determine such questions in order to promote the uniform administration of
the Plan for the greatest benefit of all parties concerned;
(h) To appoint any Employee of the Employer to act as secretary for the
Plan Administrator, and to authorize the secretary so appointed to act for the
Plan Administrator in all routine matters connected with the administration of
the Plan;
(i) To determine whether a Participant is disabled for the purposes of
Section 6.5 hereof;
(j) To appoint an investment manager or managers (as defined in Section
3(38) of ERISA) to manage (including the power to acquire and dispose of) all
or any part of the assets of the Plan; and
(k) To provide for the allocation of fiduciary responsibilities (other
than trustee responsibilities as defined in Section 405(c)(3) of ERISA).
Actions dealing with fiduciary responsibilities shall be taken in writing and
the performance of agents, counsel, and fiduciaries to whom fiduciary
responsibilities have been delegated shall be reviewed periodically.
The foregoing list of express powers is not intended to be either
complete or conclusive, but the Plan Administrator shall, in addition, have such
powers as it may reasonably determine to be necessary to the performance of its
duties under the Plan and Trust. The decision or judgment of the Plan
Administrator on any question arising in connection with the exercise of any of
its powers or any matter of the Plan administration or the determination of
benefits shall be final, binding and conclusive upon all parties concerned.
13.5 Duties of the Plan Administrator.
The Committee as Plan Administrator shall, as a part of its general duty
to supervise and administer the Plan:
(a) Establish and maintain the Accounts described herein and direct the
maintenance of such other records and the preparation of such forms as are
required for the efficient administration of the Plan;
(b) Give the Trustee specific directions in writing in respect to:
(i) The making of distribution payments, giving the names of
the payees, the amounts to be paid and the time or times
when payments shall be made; and
(ii) The making of any other payments which the Trustee is not
by the terms of the trust agreement authorized to make
without a direction in writing by the Plan Administrator;
and
(c) Prepare an annual report, as of the end of the Plan Year.
13.6 Expenses.
The Employer shall reimburse the trust fund for all expenses (other than
normal brokerage charges which are included in the cost of securities purchased
or charged to proceeds in the case of sales) incurred in the administration of
the Plan under Trust Section 1.5, including the expenses and fees of the
Trustee, except that any such expenses not so reimbursed by the Employer shall
be paid from the trust fund.
SECTION 14
ROLLOVERS
14.1 Rollover Contributions.
If the Plan Administrator instructs the Trustee in writing to accept
Rollover Contributions, any Employee who is a Participant or who will become a
Participant if he completes a Year of Service in an Eligibility Computation
Period may make a Rollover Contribution at any time. The Trustee shall credit
the fair market value of any Rollover Contribution to a Rollover Account of the
contributing Participant as of the date the Rollover Contribution is made. A
Rollover Account shall be fully vested and shall be paid to the Participant or
his beneficiaries in accordance with Section 5, 6, 7 and 8. Rollover Accounts
shall participate in the earnings and losses of the Trust Fund, but not in
forfeitures or Employer contributions.
14.2 Definition of Rollover Contribution.
The term Rollover Contribution is defined as the contribution of a
Rollover Amount as defined in Section 14.3 to the Trustee on or before the
sixtieth (60th) day immediately following the day the contributing Participant
receives the Rollover Amount.
14.3 Definition of Rollover Amount.
The term Rollover Amount is defined as a distribution which meets the
following requirements:
(a) the amount distributed to the Participant is deposited to the
Plan no later than the sixtieth day after such distribution was received by
the Participant;
(b) the amount distributed is not one of a series of substantially equal
periodic payments made for the life (or life expectancy) of the Participant or
the joint lives (or joint life expectancies) of the Participant and the
Participant's designated beneficiary, or for a specified period of ten years or
more;
(c) the amount distributed is not required under Code Section 401(a)(9);
(d) if the amount distributed included property such property is rolled
over, or if sold the proceeds of such property may be rolled over;
(e) the amount distributed is includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
In addition, if the Plan Administrator so instructs the Trustee in
writing, the Plan will accept any eligible rollover distribution (as defined in
Section 7.6) directly to the Plan.
Rollover Amounts which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (e) and additionally meet
the requirements of paragraph (f):
(f) The distribution from the qualified plan constituted the
Participant's entire interest in such Plan and was distributed within one
taxable year to the Participant:
(i) on account of separation from service, a Plan termination,
or in the case of a profit-sharing or stock bonus plan, a
complete discontinuance of contributions under such plan
within the meaning of Code Section 402(a)(6)(A), or
(ii) in one or more distributions which constitute a qualified
lump sum distribution within the meaning of Code Section
402(e)(4)(A), determined without reference to
subparagraphs (B) and (H).
14.4 Conduit Rollovers.
Rollover Contribution may also be made through an individual retirement
account (IRA) qualified under Code Section 408 where the IRA was used as a
conduit from a qualified plan, the Rollover Contribution is made in accordance
with the rules provided under paragraphs (a) through (e) and the Rollover
Contribution does not include any regular IRA contributions, or earnings
thereon, which the Participant may have made to the IRA. Rollover Contributions,
which relate to distributions prior to January 1, 1993, may be made through an
IRA in accordance with paragraphs (a) through (f) and additional requirements as
provided in the previous sentence. The Trustee shall not be held responsible for
determining the tax free status of any Rollover Contribution made under this
Plan.
SECTION 15
TRADES OR BUSINESSES UNDER COMMON CONTROL
15.1 Definitions.
All employees of all corporations which are members of a controlled
group of corporations (as defined in Section 414(b) of the Code) and all
employees of all trades or businesses (whether or not incorporated) which are
under common control (as defined in Section 414(c) of the Code) will be treated
as employed by a single employer.
Such other trades or businesses in a group with the Employer are
hereinafter called "Associated Employer." The term "transferred participant"
means an Employee of the Employer who was a Participant in this Plan and who is
employed by an Associated Employer after his services with the Employer are
terminated.
In addition to the foregoing, Hours of Service will also be credited for
any individual required under Section 414(m) or 414(n) of the Code to be
considered an employee of any employer aggregated under Section 414(b), (c), or
(m) or the Code.
Any Leased Employee as defined in Section 1.17(a), excluding any Leased
Employee described in Section 1.17(b), shall be treated as an employee of the
recipient employer.
15.2 Allocation.
No Employee shall be credited with any compensation for a year under
Section 4.2 of this Plan except with respect to compensation actually paid to
him by the Employer or accrued by the Employer with respect to him.
15.3 Participation and Vesting.
All of an Employee's service with an Associated Employer shall be
counted as service with the Employer for all purposes of this Plan, except as
otherwise provided in the Plan or in a separate written agreement.
15.4 Vesting and Distributions.
In determining whether a transferred participant incurs a Break in
Service under this Plan, his service with the Employer shall be combined with
his service with an Associated Employer. In determining whether a transferred
participant subsequently incurs a Break in Service with the Employer for vesting
and distribution purposes, his Hours of Service with Associated Employers shall
be counted.
SECTION 16
TOP HEAVY PLAN RULES
16.1 Key Employee.
Any Employee or former Employee (and the beneficiaries of such Employee)
who at any time during the determination period was an officer of the Employer
if such individual's annual compensation exceeds fifty percent (50%) of the
dollar limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of the ten largest
interests in the Employer if such individual's compensation exceeds one hundred
percent (100%) of the dollar limitation under Section 415(c)(1)(A) of the Code,
a five percent (5%) owner of the Employer, or a one percent (1%) owner of the
Employer who has an annual compensation of more than $150,000. Annual
compensation means compensation as defined in Section 415(c)(3) of the Code, but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under Section
125, Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code. The
determination period is the Plan Year containing the determination date and the
four (4) preceding Plan Years.
The determination of who is a Key Employee will be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
16.2 Non-Key Employee.
Any Employee who is not a Key Employee.
16.3 Super Top Heavy Plan.
For any Plan Year beginning after December 31, 1983, this Plan is a
Super Top Heavy Plan if any of the following conditions exists:
(a) If the top heavy ratio for this Plan exceeds ninety percent (90%)
and this Plan is not part of any required aggregation group or permissive
aggregation group of plans.
(b) If this Plan is a part of a required aggregation group of plans but
not part of a permissive aggregation group and the top heavy ratio for the group
of plans exceeds ninety percent (90%).
(c) If this Plan is a part of a required aggregation group and part of
a permissive aggregation group of plans and the top heavy ratio for the
permissive aggregation group exceeds ninety percent (90%).
16.4 Top Heavy Plan.
For any Plan Year beginning after December 31, 1983, this Plan is a Top
Heavy Plan if any of the following conditions exists:
(a) If the top heavy ratio for this Plan exceeds sixty percent (60%) and
this Plan is not part of any required aggregation group or permissive
aggregation group of plans.
(b) If this Plan is a part of a required aggregation group of plans but
not part of a permissive aggregation group and the top heavy ratio for the group
of plans exceeds sixty percent (60%).
(c) If this Plan is a part of a required aggregation group and part of
a permissive aggregation group of plans and the top heavy ratio for the
permissive aggregation group exceeds sixty percent (60%).
16.5 Top Heavy Ratio.
(a) If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer has not
maintained any defined benefit plan which during the five (5) year period ending
on the determination date(s) has or had accrued benefits, the top heavy ratio
for this Plan alone or for the required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the determination date(s) (including any
part of any account balance distributed in the five (5) year period ending on
the determination date(s)), and the denominator of which is the sum of all
Account balances (including any part of any Account balance distributed in the
five (5) year period ending on the determination date(s)), both computed in
accordance with Section 416 of the Code and the regulations thereunder. Both the
numerator and denominator of the top heavy ratio are adjusted to reflect any
contribution not actually made as of the determination date, but which is
required to be taken into account on that date under Section 416 of the Code and
the regulations thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer maintains or
has maintained one or more defined benefit plans which during the five (5) year
period ending on the determination date(s) has or has had any accrued benefits,
the top heavy ratio for any required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plan or plans for all Key Employees,
determined in accordance with (a) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all Participants determined in accordance with (a) above, and the
present value of accrued benefits under the defined benefit plan or plans for
all Participants as of the determination date(s), all determined in accordance
with Section 416 of the Code and the regulations thereunder. The accrued
benefits under a defined benefit plan in both the numerator and denominator of
the top heavy ratio are increased for any distribution of an accrued benefit
made in the five (5) year period ending on the determination date.
(c) For purposes of (a) and (b) above, the value of account balances and
the present value of accrued benefits will be determined as of the most recent
valuation date that falls within or ends with the twelve (12) month period
ending on the determination date, except as provided in Section 416 of the Code
and the regulations thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of a Participant (1) who
is not a Key Employee but who was a Key Employee in a prior year, or (2) who has
not been credited with at least one Hour of Service with any employer
maintaining the Plan at any time during the five (5) year period ending on the
determination date will be disregarded. The calculation of the top heavy ratio,
and to the extent to which distributions, rollovers, and transfers are taken
into account will be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions will not be taken into
account for purposes of computing the top heavy ratio. When aggregating plans
the value of account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C)
of the Code. 16.6 Top Heavy Plan Year.
For a particular Plan Year commencing after December 31, 1983, the Plan
is a Top Heavy Plan.
16.7 Top Heavy Compensation.
For any Top Heavy Plan Year, compensation as defined in Code Section
415(c)(3) and Regs.Section 1.415-2(d), not in excess of $200,000 (or such other
amounts as the Secretary of Treasury or his delegate may designate), which shall
be considered as compensation for all purposes of Section 16 of this Plan. 16.8
Determination Date.
The last day of the preceding Plan Year, or, in the case of the first
Plan Year, the last day of such Plan Year.
16.9 Valuation Date.
The last day of the Plan Year, on which Account balances or accrued
benefits are valued for purposes of calculating the Top Heavy Ratio.
16.10 Aggregation Group.
Either a Required Aggregation Group or a Permissive Aggregation
Group as hereinafter determined.
(a) Required Aggregation Group: (i) Each qualified plan of the Employer
in which at least one Key Employee participates or participated at any time
during the determination period (regardless of whether the Plan has terminated),
and (ii) any other qualified plan of the Employer which enables a plan described
in (i) to meet the requirements of Sections 401(a)(4) or 410 of the Code.
In the case of a Required Aggregation Group, each plan in the group will
be considered a Top Heavy Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will be considered a Top Heavy
Plan if the Required Aggregation Group is not a Top Heavy Group.
(b) Permissive Aggregation Group: The required aggregation group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the required aggregation group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
In the case of a Permissive Aggregation Group, only a plan that is part
of the Required Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
16.11 Present Value of Accrued Benefits.
The present value of an accrued benefit under a defined benefit plan
shall be based on the interest and mortality rates specified in such defined
benefit plan.
TOP HEAVY REQUIREMENTS
16.12 Top Heavy Plan Requirements.
If the Plan is or becomes top heavy in any Plan Year beginning after
December 31, 1983, the provisions of this Section 16 will supersede any
conflicting provisions in the Plan. 16.13 Top Heavy Reduction.
(a) In Section 4.9(a), 1.0 shall be substituted for 1.25 unless the
extra minimum allocation is being made pursuant to Section 16.14. However, for
any Plan Year in which this Plan is a Super Top Heavy Plan, 1.0 shall be
substituted for 1.25 in any event.
(b) $41,500 shall be substituted for $51,875 in determining the
"transition fraction" of Section 4.9(b).
16.14 Minimum Allocations.
(a) Except as otherwise provided in (c) and (d) below, the Employer
contributions and forfeitures allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser of three percent of such
Participant's compensation or in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy Section 401 of the Code, the
largest percentage of Employer contributions and forfeitures, as a percentage of
the Key Employee's compensation, as limited by Section 401(a)(17) of the Code,
allocated on behalf of any Key Employee for that year. The minimum allocation is
determined without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation, or would
have received a lesser allocation for the year because of (i) the Participant's
failure to complete 1,000 Hours of Service (or any equivalent provided in the
Plan), or (ii) the Participant's failure to make mandatory employee
contributions to the Plan, or (iii) compensation less than a stated amount.
(b) For purposes of computing the minimum allocation, compensation will
mean compensation as defined in Section 1.7 of the Plan.
(c) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the Employer
and the Employer has elected that the minimum allocation or benefit requirement
applicable to top heavy plans will be met in the other plan or plans.
(e) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be forfeited under
Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
16.15 Top Heavy Vesting.
For any Plan Year in which this Plan is top-heavy, the following vesting
schedule will automatically apply to the Plan, but only if the application of
such schedule results in a higher vested percentage for the Participant:
YEARS OF SERVICE VESTED PERCENTAGE
--------------------- -----------------
2 20%
3 40%
4 60%
5 80%
6 100%
The minimum vesting schedule applies to all benefits within the meaning of
Section 411(a)(7) of the Code except those attributable to employee
contributions, including benefits accrued before the effective date of Section
416 of the Code and benefits accrued before the Plan became top-heavy. Further,
no decrease in a Participant's nonforfeitable percentage may occur in the event
the Plan's status as top-heavy changes for any Plan Year. However, this Section
does not apply to the Account balance of any Employee who does not have an Hour
of Service after the Plan has initially become top-heavy and such Employee's
Account balance attributable to Employer contributions and forfeitures will be
determined without regard to this Section.
16.16 Minimum Required Distribution.
A Key Employee's benefits shall be distributed to him or begin to be
distributed to him under Section 5 no later than the taxable year in which he
attains age 70 1/2 regardless of when he retires.
16.17 Alternative Effective Date.
Notwithstanding any other provision of this Plan and Trust, the
effective date otherwise provided for the application of this Section 16 shall
be extended in accordance with any legislative act of Congress.
SECTION 17
ESOP PROVISIONS
17.1 Exempt Loans.
(a) Subject to the provisions of this Section 17.1, the Trustee may
incur installment obligations from time to time to finance the acquisition of
Company Stock for the Trust or to repay a prior loan. Any such loan which is
made or guaranteed, directly or indirectly, by a disqualified person or party in
interest is referred to herein as an "exempt loan".
(b) An exempt loan must be primarily for the benefit of the Participants
and beneficiaries of this Plan. At the time the loan is made, the interest rate
and price of Company Stock to be acquired with loan proceeds should not be such
that the Plan assets might be drained off. The terms of a loan must, at the time
the loan is made, be at least as favorable to the Plan as the terms of a
comparable loan resulting from arms length negotiations between independent
parties.
(c) The proceeds of an exempt loan must be used within a reasonable time
after receipt by the Plan and Trust only for any or all of the following
purposes:
(i) To acquire Company Stock;
(ii) To repay such loan; or
(iii) To repay a prior exempt loan. A new loan the proceeds of
which are so used must satisfy the provisions of this
paragraph (c).
Except as otherwise provided in this section 17, or as otherwise
required by applicable law, no Company Stock acquired with the proceeds of an
exempt loan may be subject to a put, call, or other option, or buy-sell or
similar arrangement while held by and when distributed from this Plan, whether
or not this Plan is then an ESOP.
(d) An exempt loan shall be without recourse against the Plan and Trust;
and only Company Stock acquired with the proceeds of a prior exempt loan or with
the proceeds of a prior exempt loan repaid with the proceeds of the current
exempt loan may be given as collateral.
(e) No person entitled to payment under the exempt loan shall have any
rights to the assets of the Plan and Trust other than:
(i) Collateral given for the loan,
(ii) Contributions other than contributions of Company Stock
that are made to the Plan to meet its obligations under
the loan, and
(iii) Earnings attributable to such collateral and the
investment of such contributions.
The payment made with respect to an exempt loan by the Plan and Trust
during a Plan Year shall not exceed an amount equal to the sum of such
contribution and earnings received during or prior to the year less such
payments in prior years. Such contributions and earnings shall be accounted
for separately on the books of account of the Plan until the loan is repaid.
(f) In the event of a default upon an exempt loan, the value of the Plan
assets transferred in satisfaction of the loan shall not exceed the amount of
default. If the lender is a disqualified person, the loan shall provide for a
transfer of Plan assets upon default only upon and to the extent of the failure
of the Plan to meet the payment schedule of the loan.
(g) The interest rate of an exempt loan must not be in excess of a
reasonable rate of interest.
(h) An exempt loan shall provide for the release from encumbrance
under this subsection (h) of the Plan assets used as collateral for the loan
in one of the two methods described in this subsection (h):
(i) For each Plan Year during the duration of the loan, the
number of securities released must equal the number of
encumbered securities held immediately before release for
the current Plan Year multiplied by a fraction, the
numerator of which is the amount of principal and
interest paid for the year and the denominator of which
is the sum of the numerator plus the principal and
interest to be paid for all future years. The number of
future years on the 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 interest to be paid
in the future years must be computed by using the
interest rate applicable as of the end of the Plan Year.
(ii) The number of shares of Company Stock to be released from
encumbrance may be determined solely with reference to
principal payments provided the following requirements
are satisfied. The loan must provide for annual payments
of principal and interest at a cumulative rate that is
not less rapid at any time than level annual payments of
such amounts for ten (10) years. Interest included in any
payment is disregarded only to the extent that it would
be determined to be interest under standard loan
amortization tables. This subparagraph (h)(ii) is not
applicable from the time, that, by reason of a renewal,
extension or refinancing, the sum of the expired duration
of the exempt loan, the renewal period, the extension
period, and the duration of the new exempt loan exceeds
ten (10) years.
(i) All assets acquired by the Plan and Trust with the proceeds of an
exempt loan shall be held in a Suspense Account, and shall be released from
encumbrance under subsection (h). For purposes of the allocation to be made
under Section 4.2, assets released from the Suspense Account shall be treated as
having been contributed to the Plan in the Plan Year in which they are released,
and shall be allocated to Participant's Accounts in non-monetary units. Income
with respect to Company Stock acquired with the proceeds of an exempt loan shall
be allocated as provided in Sections 4.4 and 4.5 except to the extent that
income from such Company Stock is to be used to repay the loan.
17.2 Voting Rights.
Each Participant in the Plan (or, in the event of the Participant's
death, the Participant's beneficiary) is, for purposes of this Section 17.2,
hereby designated a "named fiduciary" within the meaning of Section 403(a)(1) of
ERISA and shall be entitled to direct the Plan and Trustee as to the manner in
which Company Stock allocated to the Account or Accounts of such Participant is
to be voted on each matter brought before an annual or special stockholders'
meeting of the Employer. Before each such meeting of stockholders, the Trustee
shall cause to be furnished to each Participant (or beneficiary) a copy of the
proxy solicitation material, together with a form requesting confidential
directions on how such shares of stock allocated to such Participant's Account
or Accounts shall be voted on each such matter. Upon timely receipt of such
directions the Trustee shall on each such matter vote as directed the number of
votes attributable, as provided below, to such Participant.
The instructions received by the Trustee from Participants shall be held
by the Trustee in strict confidence and shall not be divulged or released to any
person, including officers or employees of the Employer or any affiliate;
provided, however, that to the extent necessary for the operation of the Plan,
such instructions may be relayed by the Trustee to a recordkeeper, auditor or
other person providing services to the Plan if such person (i) is not the
Employer, an affiliate or any employee, officer or director thereof, and (ii)
agrees not to divulge such directions to any other person, including employees,
officers and directors of the Employer and its affiliates.
The number of votes attributable to each Participant shall be determined
as follows:
(a) first, the total number of shares of Company Stock allocated as of
the record date for the matter requiring the vote shall be
determined:
(b) next, the total number of votes attributable to all Company Stock
owned by the Plan shall be determined;
(c) next, the number of votes attributable to allocated shares shall
be determined by multiplying the total number of available votes
by a fraction, the numerator of which shall be the number of
allocated shares, and the denominator of which shall be total
shares;
(d) next, the number of votes determined under (iii), above, shall be
attributed to each Participant, in the ratio which the number of
shares allocated to such Participant's Account or Accounts as of
the immediately preceding Valuation Date bears to the total
number shares allocated to Participants' Accounts as of such
date.
Each Participant, as a named fiduciary, shall also be entitled to
separately direct the vote of a portion of the number of votes with respect to
which a signed voting-direction instrument is not timely received from the
Participants and a portion of the number of votes with respect to any shares of
stock not then released pursuant to Section 17.1(h) and (i) and held in the
Suspense Account and a portion of the number of votes with respect to any shares
of stock released pursuant to Section 17.1(h) and (i) and not allocated to
Participants' Accounts ("Undirected Votes"). Such direction with respect to each
Participant who timely elects to direct the vote of Undirected Votes as a named
fiduciary shall be with respect to a number of Undirected Votes equal to the
total number of Undirected Votes multiplied by a fraction, the numerator of
which is the total number of votes attributable to such Participant and the
denominator of which is the total number of votes attributable to all
Participants who timely elect to vote Undirected Votes as a named fiduciary.
17.3 Rights on Tender or Exchange Offer.
Each Participant (or, in the event of the Participant's death, the
Participant's beneficiary) is, for purposes of this Section 17.3, hereby
designated a "named fiduciary" within the meaning of Section 403(a)(1) of ERISA
and shall have the right, to the extent of the number of shares of Company Stock
allocated to such Participant's Account or Accounts, to direct the Trustee in
writing as to the manner in which to respond to a tender or exchange offer with
respect to shares of Company Stock.Each Participant, as a named fiduciary, shall
also be entitled to separately direct the tender of a portion of the shares of
Company Stock not released pursuant to Section 17.1(h) and (i) and held in the
Suspense Account and a portion of the shares of Company Stock released pursuant
to Section 17.1(h) and (i) and not allocated to Participants' Accounts. Such
direction shall be with respect to the total of the number of shares of Company
Stock in the Suspense Account and the number of shares of Company stock released
and not allocated multiplied by a fraction, the numerator of which is the total
shares of Company Stock allocated to the Participant's Account or Accounts and
the denominator of which is the total number of shares of Company Stock which
are allocated to the Accounts of all Participants. The Trustee shall use its
best efforts to timely distribute or cause to be distributed to each Participant
(or beneficiary) such information as will be distributed to stockholders of the
Employer in connection with any such tender or exchange offer. Upon timely
receipt of such instructions, the Trustee shall respond as instructed with
respect to shares of Company Stock allocated to such Participant's Account or
Accounts. The instructions received by the Trustee from Participants shall be
held by the Trustee in strict confidence and shall not be divulged or released
to any person, including officers or employees of the Employer or any affiliate;
provided, however, that to the extent necessary for the operation of the Plan,
such instructions may be relayed by the Trustee to a recordkeeper, auditor or
other person providing services to the Plan if such person (i) is not the
Employer, an affiliate or any employee, officer or director thereof, and (ii)
agrees not to divulge such directions to any other person, including employees,
officers and directors of the Employer and its affiliates. If the Trustee shall
not receive timely instruction from a Participant (or beneficiary) as to the
manner in which to respond to such a tender or exchange offer, the Trustee shall
not tender or exchange any shares of Company Stock with respect to which such
Participant has the right of direction. In effecting the foregoing, to the
extent possible, the Trustee shall tender or exchange shares of Company Stock
entitled to one vote per share prior to shares of Company Stock having greater
than one vote per share.
17.4 Special Limitation Rules.
Any Employer contributions which are used by the Trustee (not later than
the due date, including extensions, for filing the Company's Federal income tax
return for the Plan Year) to pay interest on an exempt loan shall not be
included as annual additions under Section 4.8; provided, however, that the
provisions of this Section 17.4 shall be applicable only for a Plan Year in
which not more than one-third (1/3) of the Employer contributions applied to pay
principal and/or interest on an exempt loan are allocated to Participants who
are highly compensated employees, as defined in Section 414(q) of the Code; and
the Committee shall reallocate such Employer contributions to the extent
necessary to satisfy this special rule.
17.5 Limitation on Electing Shareholder.
[RESERVED]
17.6 Investment Diversification.
Each Participant in the Plan who has attained age fifty-five (55) and
has completed at least ten (10) years of participation in the Plan shall be
permitted to direct the investment of twenty-five percent (25%) of the total
number of shares of Company Stock acquired by or contributed to the Plan after
December 31, 1986 and allocated to his Account in the Plan, reduced by the
number of shares of Company Stock previously diversified pursuant to an election
under this paragraph. This election may be made within the ninety (90) day
period following the end of each Plan Year during the six (6) Plan Year period
beginning with the first Plan Year in which the Participant is eligible to make
the election. For the last Plan Year in which the Participant can make an
election, this paragraph shall be applied by substituting "fifty percent (50%)"
for "twenty-five percent (25%)" herein.
If a Participant elects to diversify pursuant to the preceding
paragraph, the Committee shall facilitate such diversification by making
available to the Participant at least three (3) investment options which are not
Company Stock, and which are consistent with the requirements of regulations
promulgated by the Secretary of the Treasury. These investment options may be
provided either in this Plan or in another qualified plan sponsored by the
Employer. The number and type of investment options available, and the
determination regarding the inclusion of the investment options in this Plan or
another qualified plan, shall be at the sole discretion of the Committee.
The Trustee shall comply with any diversification election hereunder
within ninety (90) days following the ninety (90) day election period by either
(i) substituting other investment assets in this Plan for the Company Stock as
to which the election is made, or (ii) if the Participant's investment options
are made available under another qualified plan, transferring to such qualified
plan the net cash proceeds realized from the sale by the Plan of the shares of
Company Stock for which diversification is elected."
If a Participant elects to diversify the investment of twenty-five (25%)
or fifty percent (50%) of his Account balance, as the case may be, the Plan
Administrator shall direct the Trustee to distribute, within ninety (90) days
after the end of the election period during which the election could be made,
the portion of the Participant's Account balance covered by the election.
17.7 Company Stock Distributions.
(a) Notwithstanding the provisions of Sections 5, 6, 7 and 8,
distributions of Company Stock from the Plan shall be made in accordance with
this Section 17.7, unless the application of Sections 5, 6, 7 and 8 would result
in an earlier distribution date.
(b) Unless the Participant (or his beneficiary, if the Participant is
deceased) elects otherwise, if a Participant retires, dies or becomes disabled
while employed by the Employer, distribution of Company Stock in his Account
will be made or commenced as soon as practicable following the date on which the
Participant retires, dies or becomes disabled, but not later than the sixtieth
(60th) day next following the close of the Plan Year during which the
Participant retires, dies or becomes disabled.
(c) Unless the Participant elects otherwise, upon termination of
employment of the Participant with the Employer for reasons other than
retirement, death or disability, distribution of Company Stock in his Account
will be made not later than the later of:
(i) one (1) year after the close of the Plan Year which is the
fifth (5th) Plan Year following the Plan Year in which his
employment terminates, unless the Participant is
reemployed by the Employer before the end of such year; or
(ii) the earlier of:
(A) the Plan Year in which an Exempt Loan is fully
repaid with respect to distributions of Company
Stock acquired with the proceeds of that Exempt
Loan; or
(B) the sixtieth (60th) day following the end of the
Plan Year in which the Participant attains Normal
Retirement Age.
(d) Any distribution hereunder shall comply with the consent
requirements contained in Sections 411(a)(11) and 409(o) of the Code.
SECTION 18
QUALIFIED DOMESTIC RELATIONS ORDERS
DEFINITIONS
18.1 Domestic Relations Order.
Any judgment, decree, or order (including approval of a property
settlement agreement) that relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child or other
dependent of a Participant, made pursuant to a state domestic relations law,
including a community property law.
18.2 Alternate Payee.
Any spouse, former spouse, child or other dependent of a Participant who
is recognized by a Qualified Domestic Relations Order as having a right to
receive all, or a portion of, the benefits payable under the Plan with respect
to a Participant.
18.3 Qualified Domestic Relations Order.
A Domestic Relations Order as described in Section 414(p) of the Code
which:
(a) Creates or recognizes the existence of an Alternate Payee's right
to, or assigns to an Alternate Payee the right to, receive all or a portion of
the benefits payable with respect to a Participant under the Plan; and
(b) Clearly specifies the following:
(i) the name and last known mailing address (if available) of
the Participant and each Alternate Payee to which the
order relates (unless the Plan Administrator has reason to
know such addresses independently);
(ii) the amount or percentage of the Participant's benefits to
be paid to an Alternate Payee or the manner in which the
amount is to be determined; and
(iii) the number of payments or period for which payments are
required.
A Qualified Domestic Relations Order does not include an order which:
(a) requires the Plan to provide any type or form of benefit, or any
option, not otherwise provided under the Plan;
(b) requires the Plan to provide increased benefits, i.e., provides
for the payment of benefits in excess of the benefits to which the Participant
would be entitled in the absence of the order; or
(c) requires the payment of benefits to an Alternate Payee that are
required to be paid to another Alternate Payee under a previously existing
Qualified Domestic Relations Order.
PROCEDURES
18.4 Notice.
Upon receipt of a Domestic Relations Order, the Plan Administrator shall
promptly notify the Participant and any Alternate Payee of receipt of the order
and of the Plan's procedures for determining whether the order is a Qualified
Domestic Relations Order.
18.5 Determination of Qualification.
Within a reasonable period of time after receipt of the order (as
defined in regulations to be prescribed by the Secretary of Labor), the Plan
Administrator shall determine whether the order is qualified and notify the
Participant and any Alternate Payee of such determination.
18.6 Deferral of Payment.
During any time period during which the issue of whether a Domestic
Relations Order is qualified is being determined, any amount which would be
payable pursuant to the terms of the order shall be deferred and the amounts so
payable will be segregated into a separate account.
18.7 Payment after Deferral.
If, within eighteen (18) months after payment is deferred in accordance
with Section 18.6, the Plan Administrator determines that the Domestic Relations
Order is qualified, the amounts segregated into the separate accounts, plus
earnings thereon, shall be paid to the Alternate Payee(s) specified in the
order, in accordance with the terms of the order (subject, however, to the
provisions of Code Section 414 (p) this Section 18 and other applicable
provisions of the Plan).
18.8 Payments after Eighteen Months.
If, after eighteen (18) months have elapsed after the deferral of
benefits pursuant to Section 18.6, the Plan Administrator determines that the
order is qualified, the Plan Administrator shall make payments pursuant to the
order; however, such payments shall be made prospectively only, and any amounts
segregated into the special account for periods before the determination that
the order is qualified shall be paid to the person or persons who would have
received the amounts if the order had not been issued. Neither the Plan, nor the
Plan Administrator, shall be liable for payments to any Alternate Payee for any
period before the order is determined to be qualified.
18.9 Payments Under Qualified Domestic Relations Order.
Payments may be made to an Alternate Payee prior to, coincident with, or
after Participant's termination of employment if made pursuant to a Qualified
Domestic Relations Order. A distribution to an Alternate Payee may be made out
of a Participant's Account on a date coincident with the Participant's "earliest
retirement age," defined as the earlier of (i) the date on which the Participant
is entitled to a distribution under the Plan, or (ii) the later of (A) the date
the Participant attains age 50, or (B) the earliest date on which the
Participant could begin receiving benefits under the Plan if he had separated
from service. In addition, this Plan specifically authorizes distributions to an
Alternate Payee under a Qualified Domestic Relations Order prior to the
Participant's attainment of the earliest retirement age (as defined above and in
Section 414(p) of the Code) but only if: (1) the order specifies distribution at
the earlier date or permits an agreement between the Plan and the Alternate
Payee authorizing an earlier distribution; and (2) the Alternate Payee consents
to a distribution prior to the Participant's earliest retirement age if the
present value of the Alternate Payee's benefits under the Plan exceeds $5,000.
Nothing in this Section 18 shall provide a Participant with a right to receive a
distribution at a time not otherwise permitted under the Plan, nor shall it
provide the Alternate Payee with a right to receive a form of payment not
permitted under the Plan.
18.10 Non-qualification.
If the Plan Administrator determines that the order is not qualified, or
if eighteen (18) months have expired since deferral of benefits, the Plan
Administrator shall pay the amounts segregated pursuant to Section 18.6 above to
the person or persons who would have received the amounts if the order had not
been issued.
18.11 Effective Dates.
The provisions of this Section 18 shall be effective for orders issued
on or after January 1, 1985; however, the Plan Administrator may treat any order
issued before such date as a Qualified Domestic Relations Order if it otherwise
meets the requirements of this Section 18. Additionally, the Plan Administrator
shall treat a Domestic Relations Order received before January 1, 1985 as a
Qualified Domestic Relations Order to the extent payments are being made
pursuant to the order.
SECTION 19
AMENDMENT AND TERMINATION OF PLAN;
ASSIGNMENT OF BENEFITS
19.1 Amendment.
The Employer shall have the right at any time, and from time to time, to
amend, in whole or in part, any or all of the provisions of the Plan. However,
no such amendment shall authorize or permit any part of the Trust Fund (other
than such part as is required to pay taxes and administration expenses) to be
used for or diverted to purposes other than for the exclusive benefit of the
Participants or their beneficiaries or estates. Any such amendment shall become
effective upon the adoption thereof by an appropriate written instrument
executed by order of the Board of Directors or upon such later date as may be
specified in such instrument provided that any amendment affecting the powers
and duties of the Trustee shall not be effective until the date it is accepted
in writing by the Trustee.
No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of this paragraph, a
Plan amendment which has the effect of decreasing a Participant's Account
balance or eliminating an optional form of benefit with respect to benefits
attributable to service before the amendment shall be treated as reducing an
accrued benefit. Furthermore, if the vesting schedule of the Plan is amended, in
the case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's right to his
Employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
19.2 Termination; Discontinuance of Contributions.
The Employer shall have the right at any time to terminate this Plan.
Such termination shall be effective upon execution by the Employer of an
appropriate instrument terminating the Plan as authorized by the Board of
Directors or upon such later date as may be specified in such instrument. A copy
of such instrument shall be delivered to the Trustee.
Upon termination or partial termination of the Plan by any method, the
Regular Accounts of all Participants shall become fully vested and the Plan
Administrator shall direct the Trustee to distribute all assets remaining in the
Plan to Participants, their beneficiaries or estates in the ratio of the
Participants' Account balances in the Plan.
In the event the Employer completely discontinues contributions for a
fixed or indeterminate period, but without terminating this Plan, the Regular
Accounts of Participants shall be completely vested and nonforfeitable at the
values determined by the Trustee as of the close of the year in which
contributions have been suspended, and all adjustments in Participant's Accounts
thereafter made under the terms of the Plan and Trust with respect to the
amounts so vested shall similarly be completely vested in favor of each
Participant but no distribution shall be made of any Account except on actual
termination of the Plan or the occurrence of any of the events stated in
Sections 5, 6, and 7 and then only in the manner provided in such Sections.
19.3 Assignment of Benefits.
No benefit or interest available hereunder will be subject to assignment
or alienation, either voluntarily or involuntarily. The interest of each
Participant or beneficiary shall be held subject to the maximum restraint on
alienation permitted or required by applicable Louisiana or Federal law. The
preceding sentences shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
Domestic Relations Order, unless such order is determined to be a Qualified
Domestic Relations Order, as defined in Section 414(p) of the Code.
THUS DONE AND SIGNED on the day first above shown, in the presence of
the undersigned competent witnesses, who hereunto sign their names with the said
appearers and me, Notary after reading of the whole.
WITNESSES: CENTURYTEL, INC.
/s/ Linda Vaughn /s/ R. Stewart Ewing, Jr.
_________________________________ By:________________________________
R.Stewart Ewing, Jr.
Executive Vice-President
/s/ Linda Reeves and Chief Financial Officer
_________________________________
/s/ Connie J. Walker
__________________________
NOTARY PUBLIC