EXHIBIT 10.1
CENTURY TELEPHONE ENTERPRISES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
1994 AMENDMENT AND RESTATEMENT
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............................................ 6
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 Plan Administrator.................................... 11
1.22 Plan Year............................................. 11
1.23 Regular Account....................................... 11
1.24 Rollover Account ..................................... 12
1.25 Suspense Account...................................... 12
1.26 Top Heavy Valuation Date.............................. 12
1.27 Trust................................................. 12
1.28 Valuation Date........................................ 12
1.29 Vesting Computation Period............................ 12
1.30 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........................... 15
SECTION 3............................................................. 16
CONTRIBUTIONS.................................................... 16
3.1 Contributions by Employer............................. 16
3.2 Determination of Contribution......................... 16
3.3 Time of Payment of Contribution....................... 16
3.4 Exclusive Benefit..................................... 16
3.5 Return of Contributions............................... 17
i
SECTION 4............................................................. 18
ACCOUNTS OF PARTICIPANTS......................................... 18
4.1 Individual Accounts for Each Participant.............. 18
4.2 Allocation of Employer Contributions.................. 18
4.3 Allocation of Forfeitures............................. 18
4.4 Year-End Valuation of Accounts........................ 18
4.5 Interim Valuation of Accounts......................... 19
4.6 Debiting of Distributions............................. 19
4.7 Effective Date of Entries............................. 19
4.8 Coverage Under this Plan Only......................... 20
4.9 Coverage Under a Prototype Plan....................... 21
4.10 Coverage Under a Non-Prototype Plan................... 23
4.11 Combined Limits....................................... 23
4.12 Definitions........................................... 23
SECTION 5............................................................. 29
BENEFITS PAYABLE AFTER NORMAL RETIREMENT......................... 29
5.1 Optional Methods of Payment Available at Retirement... 29
5.2 Manner of Payment Following Commencement of Payments.. 30
5.3 Required Beginning Date............................... 30
5.4 Determination of Amount to be Distributed Each Year... 30
5.5 Definitions........................................... 31
5.6 Small Accounts........................................ 31
SECTION 6............................................................. 32
BENEFITS PAYABLE IN THE EVENT OF DEATH OR DISABILITY............. 32
6.1 Death Distribution Provisions......................... 32
6.2 Definitions........................................... 33
6.3 Designation of Beneficiary............................ 35
6.4 Failure to Designate a Beneficiary or Select a Method
of Payment............................................ 35
6.5 Disability of a Participant........................... 36
6.6 Transitional Rule..................................... 36
6.7 Location of Participant or Beneficiary Unknown........ 38
SECTION 7............................................................. 39
BENEFITS PAYABLE IN THE EVENT OF BREAK IN SERVICE OR EMPLOYMENT
TERMINATION................................................ 39
7.1 Vesting Schedule...................................... 39
7.2 Distributions......................................... 39
7.3 Restrictions on Immediate Distributions............... 41
7.4 Payment of Account Balance............................ 42
7.5 Treatment of Accounts in Pay Status................... 42
7.6 Direct Rollovers...................................... 43
7.7 Amendment of Vesting Schedule......................... 44
SECTION 8............................................................. 45
FORM OF DISTRIBUTION............................................. 45
8.1 Payment in Shares or Cash............................. 45
8.2 Dividends............................................. 45
ii
SECTION 9............................................................. 46
MERGER OR CONSOLIDATION.......................................... 46
9.1 Merger or Consolidation............................... 46
9.2 Merger Accounts....................................... 46
9.3 Merger Agreement or Agreement Relating to Transfer.... 46
SECTION 10............................................................ 47
CLAIMS PROCEDURE................................................. 47
10.1 Filing of a Claim for Benefits....................... 47
10.2 Notification to Claimant of Decision................. 47
10.3 Review Procedure..................................... 47
10.4 Decision on Review................................... 48
10.5 Agent for Service of Process......................... 48
SECTION 11............................................................ 49
ADOPTION BY OTHER COMPANIES...................................... 49
11.1 Rights of Other Companies to Participate............. 49
11.2 Control of Plan by the Employer...................... 49
11.3 Allocations of Contributions and Forfeitures......... 49
11.4 Withdrawal of Employer or Adopting Companies......... 50
11.5 Amendment of Plan.................................... 50
11.6 Termination of One or More Parties................... 51
11.7 Reference to Employer in Plan........................ 51
SECTION 12............................................................ 52
PROVISIONS RELATING TO PARTICIPANTS.............................. 52
12.1 Information Required of Participants................. 52
SECTION 13............................................................ 53
PLAN ADMINISTRATOR............................................... 53
13.1 Administration by Plan Administrator................. 53
13.2 Appointment of Committee............................. 53
13.3 Majority Action...................................... 53
13.4 Powers of Plan Administrator......................... 54
13.5 Duties of Plan Administrator......................... 55
13.6 Expenses............................................. 56
SECTION 14............................................................ 57
ROLLOVERS........................................................ 57
14.1 Rollover Contributions............................... 57
14.2 Definition of Rollover Contribution.................. 57
14.3 Definition of Rollover Amount........................ 57
14.4 Conduit Rollovers.................................... 58
SECTION 15............................................................ 59
TRADES OR BUSINESSES UNDER COMMON CONTROL........................ 59
15.1 Definitions.......................................... 59
15.2 Allocation........................................... 59
15.3 Participation and Vesting............................ 59
15.4 Vesting and Distributions............................ 60
iii
SECTION 16............................................................ 61
TOP HEAVY PLAN RULES............................................. 61
16.1 Key Employee......................................... 61
16.2 Non-Key Employee..................................... 61
16.3 Super Top Heavy Plan................................. 61
16.4 Top Heavy Plan....................................... 62
16.5 Top Heavy Ratio...................................... 62
16.6 Top Heavy Plan Year.................................. 64
16.7 Top Heavy Compensation............................... 64
16.8 Determination Date................................... 64
16.9 Valuation Date....................................... 64
16.10 Aggregation Group.................................... 65
16.11 Present Value of Accrued Benefits.................... 65
16.12 Top Heavy Plan Requirements.......................... 65
16.13 Top Heavy Reduction.................................. 66
16.14 Minimum Allocation................................... 66
16.15 Top Heavy Vesting.................................... 67
16.16 Minimum Required Distribution........................ 67
16.17 Alternative Effective Date........................... 68
SECTION 17 ........................................................... 69
ESOP PROVISIONS.................................................. 69
17.1 Exempt Loans......................................... 69
17.2 Voting Rights........................................ 71
17.3 Rights on Tender or Exchange Offer................... 73
17.4 Special Limitation Rules............................. 74
17.5 Limitation on Electing Shareholder................... 74
17.6 Investment Diversification........................... 75
17.7 Company Stock Distributions.......................... 76
SECTION 18 ........................................................... 77
QUALIFIED DOMESTIC RELATIONS ORDERS.............................. 77
18.1 Domestic Relations Order............................. 77
18.2 Alternate Payee...................................... 77
18.3 Qualified Domestic Relations Order................... 77
18.4 Notice............................................... 78
18.5 Determination of Qualification....................... 78
18.6 Deferral of Payment.................................. 78
18.7 Payment after Deferral............................... 78
18.8 Payments after Eighteen Months....................... 79
18.9 Payments Under Qualified Domestic Relations Order.... 79
18.10 Non-qualification.................................... 80
18.11 Effective Dates...................................... 80
SECTION 19 ........................................................... 81
AMENDMENT AND TERMINATION OF PLAN; ASSIGNMENT OF BENEFITS........ 81
19.1 Amendment............................................ 81
19.2 Termination; Discontinuance of Contributions......... 81
19.3 Assignment of Benefits............................... 82
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THE TRUST............................................................. 83
TRUST SECTION 1 ...................................................... 83
TRUSTEE......................................................... 83
1.1 Establishment and Acceptance of Trust................. 83
1.2 Investment of Trust Fund.............................. 83
1.3 Powers of Trustee..................................... 84
1.4 Payments from the Trust............................... 86
1.5 Payment of Compensation, Expenses and Taxes........... 86
1.6 Accounting............................................ 87
1.7 Removal, Resignation and Appointment of Successor
Trustee............................................... 87
TRUST SECTION 2....................................................... 88
FIDUCIARY RESPONSIBILITY......................................... 88
2.1 Fiduciary Duties...................................... 88
2.2 Location of Assets.................................... 88
2.3 Deposits with Trustee................................. 88
2.4 Common Trust Fund..................................... 88
2.5 Prohibited Transactions by Trustee.................... 88
2.6 Party in Interest and Disqualified Person Transaction. 89
2.7 Intent of Trust....................................... 89
TRUST SECTION 3....................................................... 91
SPENDTHRIFT CLAUSE............................................... 91
3.1 Restrictions on Alienation............................ 91
3.2 Qualified Domestic Relations Order.................... 91
TRUST SECTION 4....................................................... 92
AMENDMENT AND TERMINATION OF TRUST............................... 92
4.1 Amendment............................................. 92
4.2 Termination; Discontinuance of Contributions.......... 92
v
STATE OF LOUISIANA
PARISH OF OUACHITA
BE IT KNOWN that on this 30th day of December,
1994, 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:
CENTURY TELEPHONE ENTERPRISES, INC. represented herein by
its Senior Vice President and Chief Financial Officer, R.
Stewart Ewing, Jr., as Settlor.
The Settlor appoints Regions Bank of Louisiana as Trustee.
WHEREAS, the Trustee has previously established the Century
Telephone Enterprises, Inc. Employee Stock Ownership Plan and
Trust; and
WHEREAS, the Settlor desires to amend its Employee Stock
Ownership Plan and Trust to comply with the Tax Reform Act of
1986, the Technical and Miscellaneous Revenue Act of 1988,
technical corrections and other statutory revisions; and
WHEREAS, the Settlor desires to incorporate in this
document various amendments to its Employee Stock Ownership Plan
and Trust; and
WHEREAS, the Settlor 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;
NOW, THEREFORE, effective January 1, 1989, except as
may be indicated in specific Sections hereof, the Settlor
hereby amends and restates its Employee Stock Ownership Plan
and Trust, upon the terms and conditions as provided herein.
1
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-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.
2
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; or (iii) bonuses and special awards.
In the case of a commission salesman, compensation shall mean the lesser of:
(i) the base draw of such salesman; or (ii) the commissions paid by the
Employer to such salesman as reported on his Federal income tax withholding
statement (Form W-2).
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.
3
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, 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 12
4
months, over which compensation is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than 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 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.
--------------------
The first date occurring after an Employee's Break in Service on which
he performs an Hour of Service.
5
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).
1.13 Employer.
--------
Century Telephone Enterprises, Inc.
1.14 Entry Date.
----------
(a) The first day of the Plan Year on which or immediately preceding
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
6
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
7
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;
8
(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 or leave of
absence. 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,
9
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.
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.
10
(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.
11
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 trust created in accordance with Sections 1-4 of
the trust contained herein, or pursuant to a separate
written agreement between the Employer and the Trustee.
1.28 Valuation Date.
--------------
The date on which the Trustee shall make a revaluation of
the trust fund pursuant to Section 4.4.
1.29 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.
1.30 Year of Service.
---------------
A twelve-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;
12
(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 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 chapter 4370 of the Communications
13
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.
14
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, Inc.
(formerly Century Printing & Publishing, Inc.), Interactive Communications,
Inc., and Metro Access Networks, Inc. are not eligible to participate
in this Plan.
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.
15
SECTION 3
CONTRIBUTIONS
3.1 Contributions by Employee.
-------------------------
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 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.
3.4 Exclusive Benefit.
-----------------
Any and all contributions made by the Employer to the trust fund
shall be irrevocable, and neither such contributions nor any income
therefrom shall be used for, or diverted to, purposes other than for
16
the exclusive benefit of Participants or their beneficiaries under the Plan.
3.5 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.
17
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 Forfeiture.
------------------------
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 Account.
-----------------------------
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.
18
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 Distribution.
------------------------
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.
19
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
20
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
21
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.
22
(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
23
(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.
24
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)
25
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
26
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:
27
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.
28
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.
29
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.
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.
30
(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 Definitions.
-----------
For purposes of this Section, the definitions contained in
Section 6.2 shall apply.
5.6 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 three thousand five hundred
dollars ($3,500.00) by the payment of one lump sum.
31
SECTION 6
BENEFITS PAYABLE IN THE EVENT OF DEATH OR DISABILITY
6.1 Death Distribution Provisions.
-----------------------------
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
32
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.
33
(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 70 1/2.
(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:
34
(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 70 1/2, 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.
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:
35
(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.
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.
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
36
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.
37
6.7 Location of Participant or Beneficiary Unknown.
----------------------------------------------
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the expiration of
five (5) years after it shall become payable, remain unpaid solely by
reason of the inability of the Plan Administrator, after sending a
certified letter, return receipt requested, to the last known address,
and after further diligent effort, to ascertain the whereabouts of
such Participant or his Beneficiary, the amount so distributable shall
be allocated in the same manner as a forfeiture, pursuant to this Agreement.
If an amount is forfeited pursuant to this Section, such amount will be
reinstated if a claim is made by the Participant or beneficiary.
38
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.
7.2 Distribution.
------------
(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 $3,500, 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
39
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 reemployed 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.
40
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) $3,500, 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 30 days and no more
than 90 days prior to the annuity starting date. However,
distribution may commence less than 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 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
41
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:
42
(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 distribution 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
43
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.
44
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.
45
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.
46
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.
47
(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 Century Park
Drive, Monroe, Louisiana 71203, shall be the agent for
service of process of the Plan and Trust.
48
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 Sections 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
49
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.
50
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.
51
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
Century Park Drive, Monroe, Louisiana 71203, and either
delivered in person or mailed to such address, postage fully
paid.
52
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 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
53
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;
54
(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:
55
(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.
56
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) 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);
57
(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 distibutions 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 taxfree status of any Rollover Contribution
made under this Plan.
58
SECTION 15
TRADES OR BUSINESSES UNDER COMMON CONTROL
15.1 Definitions.
-----------
All employees of all corporations which are members
of a controlled groups 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.
59
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.
60
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.
61
(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
62
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 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
63
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.
64
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 lan 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.
65
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.
66
(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
topheavy 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.
67
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.
68
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 period
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.
69
(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
70
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. 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 released
pursuant to Section 17.1(h) and (i) and 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 released
pursuant to Section 17.1(h) and (i) and 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,
71
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 released as of the record date for the matter
requiring the vote shall be determined:
(b) next, the total number of votes attributable to
Company Stock owned by the Plan, whether released or
unreleased, shall be determined;
(c) next, the number of votes attributable to released
shares shall be determined by multiplying the total number
of available votes by a fraction, the numerator of which shall
be the number of released 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 released shares allocated to
such Participant's Account or Accounts as of the immediately
preceding Valuation Date bears to the total number of
released 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
72
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. 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. 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
73
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. 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 officers of the Employer, shareholders owning more
than ten percent (10%) of Company Stock, as determined
under Section 415(c)(6)(B)(iv) of the Code, or Employees whose
compensation exceeds an amount equal to twice the dollar
amount referred to in Section 4.8; and the Committee
shall reallocate such Employer contributions to the extent
necessary to satisfy this special rule.
17.5 Limitation on Electing Shareholder.
----------------------------------
To the extent that a shareholder sells Company Stock
to the Plan and elects (with the consent of the Company) special tax
treatment under Section 1042 of the Code, no assets
attributable to such Company Stock may be allocated to the
Account of:
(a) Any person who owns (after application of Section
318(a) of the Code) more than twenty-five percent (25%)
in value of the outstanding securities of the Employer; or
74
(b) the shareholder, and any person who is related to such
shareholder (within the meaning of Section 267(b) of the Code,
but excluding lineal descendants of such shareholder as
long as no more than five percent (5%) of the aggregate amount
of all Company Stock sold by such shareholder in a transaction
to which Section 1042 of the Code applies is allocated to
lineal descendants of such shareholder) during the
Nonallocation Period (as defined below).
Further, no allocation of Employer contributions may be
made to the Accounts of such persons unless additional
allocations are made to other Participants, in accordance
with the provisions of Sections 401(a) and 410 of the Code.
The phrase "Nonallocation Period" means the period beginning
on the date of sale and ending on the later of ten (10) years
after the date of sale or the date of the allocation attributable
to the final payment on the exempt loan or other indebtedness
incurred with respect to the sale.
17.6 Investment Diversification.
--------------------------
Each Participant who has completed at least ten (10)
years of participation under the Plan and has attained age
fifty-five (55) may elect, within ninety (90) days after the
end of each Plan Year in the five (5) year period beginning
with the Plan Year after the Plan Year in which the
Participant attains age fifty-five (55) (or, if later,
beginning with the Plan Year after the first Plan Year in
which the individual completes at least ten (10) years of
participation under the Plan and has attained age fifty-
five (55)), to direct the investment of twenty-five percent
(25%) of the Participant's Account balance under the Plan,
to the extent such portion exceeds the amount to which a prior
election applied. For the last Plan Year in which the
Participant can make an election, the Participant shall
be entitled to direct the investment of fifty percent
(50%) of his Account balance in the Plan, to the extent such
portion exceeds the amount to which a prior election applied.
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,
75
within ninety (90) days after the end of the Plan Year for 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.
76
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;
77
(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).
78
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 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 $3,500. 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.
79
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.
80
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 agreement and the Trust hereby created. Such
termination shall be effective upon execution by the Employer of
an appropriate instrument
81
terminating the Plan and Trust
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.
82
THE TRUST
TRUST SECTION 1
TRUSTEE
1.1 Establishment and Acceptance of Trust.
-------------------------------------
The Trustee shall receive any contributions paid to it
in cash, or other property approved by the Plan
Administrator for acceptance by the Trustee. All contributions
so received together with the income therefrom (herein called
the "Trust Fund") shall be held, managed, and administered in
Trust pursuant to the terms of this Agreement. The Trustee
hereby accepts the Trust created hereunder and agrees to
perform the duties under this Agreement on its part to be
performed. The assets of the trust will be valued annually at
fair market value as of the last day of the Plan Year. On such
date, the earnings and losses of the Trust will be
allocated to each Participant's account in the ratio that
such Account balance bears to all Account balances.
1.2 Investment of Trust Fund.
------------------------
The Trustee shall invest and reinvest the
principal and income of the Trust Fund and keep the Trust
Fund invested, without distinction between principal and income. All
contributions shall be applied by the Trustee as follows:
(a) To the payment of principal and interest on any
outstanding exempt loan made to the Trust.
(b) To purchase shares of Company Stock under the direction
of the Plan Administrator.
Subject to the provisions of ERISA Section 404, as
additional shares of Company Stock become available and
subject to the direction of the Plan Administrator, funds,
as they become available, shall be used for the purpose
of purchasing such shares.
This Plan is designed to invest primarily in Company
Stock, and the investment policy of this Plan is to so
invest. To the extent funds remain after acquiring available Company Stock
and until other Company Stock becomes available, subject
to the direction of the Plan Administrator, the Trustee may
83
invest in such securities or in such property, real or
personal, wherever situated, as the Trustee shall deem
advisable, including, but not limited to, stocks, common or
preferred, bonds and mortgages, and other evidences of
indebtedness or ownership. In making such investments,
the Trustee shall be restricted to securities or other
property of the character authorized by applicable law from
time to time for trust investments.
1.3 Powers of Trustee.
-----------------
The Trustee shall have the following powers and authority
in the administration of the Trust Fund:
(a) Purchase of Property.
--------------------
To purchase or subscribe for any securities or
other property and to retain the same in trust.
(b) Sale, Exchange, Conveyance and Transfer of Property.
To sell, exchange, convey, transfer, or
otherwise dispose of any securities or other property held by
it, by private contract or at public auction. No person
dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the
validity, expediency, or propriety of any such sale or other
disposition.
(c) Exercise of Owner's and Voting Rights.
-------------------------------------
To vote any stocks, bonds or other securities; to
give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges, subscription rights, or other options, and to
make any payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate
reorganizations or other changes
affecting the corporate securities, and to delegate
discretionary powers, and to pay any assessments or
charges in connection therewith; and generally to exercise
any of the powers of an owner with respect to stocks, bonds,
securities or other property
84
held as part of the Trust Fund.
The Trustee shall vote Company Stock held in the Plan in
accordance with Section 17 and the instructions of the
Plan Administrator.
(d) Registration of Investments.
---------------------------
To cause any securities or other property held as
part of the Trust Fund to be registered in its own name or in
the name of one or more of its nominees, and to hold any
investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments are a
part of the Trust Fund.
(e) Borrowing and Lending.
---------------------
To borrow or raise money for the purposes of the
Trust in such amount, and upon such terms and conditions, as
the Trustee shall deem advisable; and, for any sum so borrowed,
to issue its promissory note as Trustee, and to secure the
repayment thereof by pledging all, or any part, of the
Trust Fund; and no person lending money to the Trustee
shall be bound to see to the application of the money lent
or to inquire into the validity, expediency or propriety of
any such borrowing.
(f) Retention of Cash.
-----------------
Subject to the direction of the Committee, to keep
such portion of the Trust Fund in cash or cash balances as the
Trustee may, from time to time, deem to be in the best
interests of the Trust created hereby.
(g) Execution of Instruments.
------------------------
To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted.
(h) Settlement of Claims and Debts.
------------------------------
To settle, compromise, or submit to arbitration any
claims, debts or damages due or
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owing to or from the
Trust Fund, and to commence or defend suits or legal
or administrative proceedings.
(i) Employment of Agents and Counsel.
--------------------------------
To employ suitable agents and counsel (who may also
be counsel for the Employer), and to pay their reasonable
expenses and compensation.
(j) Power to do any Necessary Act.
-----------------------------
To do all such acts, take all such proceedings,
and exercise all such rights and privileges, although not
specifically mentioned herein, as the Trustee may deem
necessary to administer the Trust Fund, and to carry out the
purposes of this Trust.
1.4 Payments from the Trust.
-----------------------
The Trustee shall from time to time, on the
written directions of the Committee, make payments out of the
Trust Fund to such persons, in such manner, in such
amounts, and for such purposes as may be specified in the
written directions of the Committee, and upon any payment
being made, the amount thereof shall no longer constitute a
part of the Trust Fund. Each such written direction shall be
accompanied by a certificate of the Committee that the
payment is in accordance with the Plan. The Trustee shall not
be responsible in any way for the application of such payments
or for the adequacy of the Trust Fund to discharge any and all
liabilities under the Plan.
1.5 Payment of Compensation, Expenses and Taxes.
-------------------------------------------
The Trustee shall be paid by the Employer such
reasonable compensation as shall from time to time be
agreed upon by the Employer and the Trustee. In addition,
the Trustee shall be reimbursed by the Employer for any
reasonable expenses, including reasonable counsel fees,
incurred by it in the administration of the Trust Fund. All
taxes of any and all kinds whatsoever that may be levied or
assessed under existing or future laws upon, or in respect
of, the Trust Fund or the income thereof shall be paid by the
Employer. Nevertheless, if the Employer refuses to make
such payments, such compensation and expenses may be made from
the Trust Fund.
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1.6 Accounting.
----------
The Trustee shall keep accurate and detailed accounts
of all investments, receipts, disbursements, and other
transactions hereunder. All accounts, books and records relating to
such transactions shall be open for inspection and
audit at all reasonable times by any person designated by
the Committee.
Within one hundred thirty-five (135) days following the close
of each fiscal year of the Trust and within sixty (60) days
after the removal or resignation of the Trustee as provided
in Section 1.7 hereof, the Trustee shall file with the
Committee a written account setting forth all investments,
receipts, disbursements, and other transactions effected by
it during such fiscal year or during the period from the close
of the last fiscal year to the date of such removal or
resignation, and setting forth the current value of the Trust
Fund.
1.7 Removal, Resignation and Appointment of Successor Trustee.
---------------------------------------------------------
The Trustee may be removed by the Employer at any time upon
ten (10) days' notice in writing to the Trustee. The Trustee
may resign at any time upon ten (10) days' notice in writing
to the Employer. Upon such removal or resignation of the
Trustee, the Employer shall appoint a successor Trustee who
shall have the same powers and duties as those conferred upon
the Trustee hereunder. Upon acceptance of such appointment by
the successor Trustee, the Trustee shall assign, transfer,
and pay over to such successor Trustee the funds and
properties then constituting the Trust Fund. The Trustee is
authorized, however, to reserve such sum of money, as it may
deem advisable, for payment of its fees and expenses in
connection with the settlement of its account or otherwise
which the Employer refuses to pay, and any balance of
such reserve remaining after the payment of such fees and
expenses shall be paid over to the successor Trustee.
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TRUST SECTION 2
FIDUCIARY RESPONSIBILITY
2.1 Fiduciary Duties.
----------------
The Trustee shall discharge its duties with the care,
skill, prudence, and diligence under the circumstances
then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with like aims, by
diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it
is clearly prudent not to do so, and in accordance with
the Plan and Trust provisions insofar as the provisions
thereof are consistent with the provisions of the
Employee Retirement Income Security Act of 1974.
2.2 Location of Assets.
------------------
The Trustee may not maintain the indicia of ownership of
any assets of the Plan outside the jurisdiction of the
courts of the United States.
2.3 Deposits with Trustee.
---------------------
The investment of all or part of the Plan's assets in
demand deposits and in deposits which bear a reasonable rate
of interest in the commercial banking department of the
corporate Trustee is hereby expressly authorized.
2.4 Common Trust Fund.
-----------------
Notwithstanding any other provision of this Agreement,
the Trustee may cause any part or all of the cash properly
held by the Trust to be invested as a part of any common trust
fund created by the corporate Trustee or any other bank.
The bank shall not receive more than reasonable
compensation for its services in operating and administering
the common trust funds.
2.5 Prohibited Transactions by Trustee.
----------------------------------
A fiduciary under this Plan and Trust shall not:
(a) Deal with the assets of the Plan for its own account;
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(b) Act in any capacity in any transaction involving the
Plan on behalf of a party whose interests are adverse to the
Plan or its Participants; or
(c) Receive any consideration from any party in connection
with any transaction involving Plan assets (other than for
its compensation and expenses as provided for herein).
2.6 Party in Interest and Disqualified Person Transactions.
------------------------------------------------------
A fiduciary of the Plan shall not cause the Plan to
engage in a transaction, if he knows or should know that
such transaction constitutes a direct or indirect:
(a) Sale, exchange or lease of property between the Plan
and a party in interest;
(b) Loan or extension of credit between the Plan and a
party in interest, except as permitted in Plan Section 17;
(c) Furnishing of goods, services or facilities between the
Plan and a party in interest;
(d) Transfer to, or use by or for the benefit of, a party
in interest of any assets of the Plan, or from the Plan; or
(e) An acquisition of Employer securities or real estate in
violation of Section 407(a) of the Employee Retirement
Income Security Act of 1974.
Nothing in this paragraph shall restrict the
Trustee in investing funds in common trust funds maintained
by it or from maintaining demand, savings or time
deposits in its commercial banking department or from
providing other ancillary services as defined in Section
408(b)(6) of the Employee Retirement Income Security Act of
1974. Nor shall the Trustee be prevented from borrowing
funds from its commercial department for the purposes of
covering overdrafts in its demand account or to permit
payments to Participants without the necessity for immediate
liquidation of assets.
2.7 Intent of Trust.
---------------
The provisions of this Trust are intended to comply with the fiduciary
responsibility requirements of the Employee Retirement Income Security
Act of 1974 and no provision herein shall be construed to authorize
the Trustee to violate any of the fiduciary responsibility or prohibited
transaction provisions of
89
that Act. Any provision herein which is contrary
to the provisions of that Act shall be considered not written and any
provision required to be written into the Plan and Trust by that
Act which is not expressly provided for in this instrument is
hereby incorporated herein by reference and shall be just as binding
upon the Trustee as if it were expressly written herein. In order
that this Plan and Trust may expressly comply with that Act,
it may be amended retroactively.
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TRUST SECTION 3
SPENDTHRIFT CLAUSE
3.1 Restrictions on Alienation.
--------------------------
No benefit or interest available hereunder will be
subject to alienation or assignment, either voluntary or
involuntary, and 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.
3.2 Qualified Domestic Relations Order.
----------------------------------
Section 3.1 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.
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TRUST SECTION 4
AMENDMENT AND TERMINATION OF TRUST
4.1 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 this Trust. 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 and their beneficiaries
or estates. Any such amendment shall become effective
upon the adoption thereof by 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.
4.2 Termination; Discontinuance of Contributions.
--------------------------------------------
The Employer shall have the right at any time to
terminate the Trust hereby created. Such termination shall
be effective upon execution by the Employer of an
appropriate instrument terminating the Plan and Trust 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 Trust by
any method, 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.
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 CENTURY TELEPHONE ENTERPRISES,INC.
/S/ Merrie D. Rachal
- --------------------- By: /S/ R. Stewart Ewing, Jr.
---------------------------
/S/ Carol P. Caruso R. Stewart Ewing, Jr.
- --------------------- Senior Vice President
/S/ G. Robert Collier
-----------------------
NOTARY PUBLIC
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