Exhibit 10.13
-------------
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
Restated Effective January 1, 2001
Table of Contents
-----------------
Page
Article One PURPOSE.............................................1
Section 1.1 Introduction...................................1
Section 1.2 Purpose........................................1
Section 1.3 Limitation.....................................1
Article Two DEFINITIONS.........................................2
Section 2.1 Accounting Date................................2
Section 2.2 Accounts.......................................2
Section 2.3 Administrator..................................2
Section 2.4 Affiliate......................................2
Section 2.5 Alternate Payee................................2
Section 2.6 Beneficiary....................................2
Section 2.7 Break in Service...............................2
Section 2.8 Code...........................................4
Section 2.9 Committee......................................4
Section 2.10 Company.......................................4
Section 2.11 Company Stock.................................4
Section 2.12 Compensation..................................5
Section 2.13 Current Market Value..........................7
Section 2.14 Disability....................................7
Section 2.15 Discretionary Employer Contribution...........7
Section 2.16 Discretionary Employer Contribution Account...8
Section 2.17 Early Retirement..............................8
Section 2.18 Early Retirement Date.........................8
Section 2.19 Effective Date................................8
Section 2.20 Employee......................................8
Section 2.21 Employer Contributions........................8
Section 2.22 Employer......................................9
Section 2.23 Employment Commencement Date..................9
Section 2.24 Entrance Date.................................9
Section 2.25 ERISA.........................................9
Section 2.26 ESOP Accounts.................................9
Section 2.27 ESOP Rollover Account.........................9
Section 2.28 ESOP Transfer Account.........................9
Section 2.29 Former Participant...........................10
Section 2.30 Highly Compensated Employee..................10
Section 2.31 Hours of Service.............................11
Section 2.32 Incentive Contribution.......................12
Section 2.33 Matching Employer Contribution...............13
Section 2.34 Matching Employer Contribution Account.......13
Section 2.35 Named Fiduciary..............................13
Section 2.36 Nonforfeitable...............................13
Section 2.37 Non-Highly Compensated Employee..............13
Section 2.38 Normal Retirement Age........................13
Section 2.39 Normal Retirement Date.......................13
Section 2.40 Owner-Employee...............................13
Section 2.41 Participant..................................14
Section 2.42 Participating Employer.......................14
Section 2.43 Participation................................14
Section 2.44 Plan.........................................14
Section 2.45 Plan Sponsor.................................14
Section 2.46 Plan Year....................................14
Section 2.47 Prior Plan...................................14
Section 2.48 Re-Employment Commencement Date..............14
Section 2.49 Related Employer.............................14
Section 2.50 Retirement...................................15
Section 2.51 Rollover Account.............................15
Section 2.52 Savings Account..............................15
Section 2.53 Savings Contributions........................15
Section 2.54 Self-Employed Individual.....................15
Section 2.55 Separation from Service......................16
Section 2.56 Service......................................16
Section 2.57 Shareholder-Employee.........................16
Section 2.58 Separated from Service.......................16
Section 2.59 Special Employer Contributions...............16
Section 2.60 Spouse.......................................16
Section 2.61 Trust........................................17
Section 2.62 Trust Agreement..............................17
Section 2.63 Trust Fund...................................17
Section 2.64 Trustee......................................17
Section 2.65 Valuation Date...............................17
Section 2.66 Vested Percentage............................17
Section 2.67 W & B Plan Rollover Account..................17
Section 2.68 Year of Service..............................18
Article Three ELIGIBILITY AND PARTICIPATION......................20
Section 3.1 Eligibility...................................20
Section 3.2 Eligibility Following Separation From Service.20
Section 3.3 Participation During Leave of Absence.........20
Section 3.4 Notification of Eligibility and Commencement
of Participation..............................21
Article Four CONTRIBUTIONS......................................22
Section 4.1 Savings Contributions.........................22
Section 4.2 Employer Contributions........................31
Section 4.3 Discretionary Employer Contributions..........41
Section 4.4 Payment of Employer Contributions.............41
Section 4.5 Rollover Contributions........................42
Section 4.6 Special Rules under USERRA....................43
Article Five ALLOCATIONS........................................44
Section 5.1 Accounts......................................44
Section 5.2 Allocation of Income and Expense..............44
Section 5.3 Allocation of Savings Contributions...........45
Section 5.4 Allocation of Employer Contributions..........45
Section 5.5 Forfeitures...................................46
Section 5.6 Maximum Additions.............................46
Section 5.7 Notification to Participants..................51
Article Six VESTING............................................52
Section 6.1 Retirement, Death, or Disability..............52
Section 6.2 Separated From Service........................52
Section 6.3 Computation of Years of Service for Vesting...54
Section 6.4 Determination of Amount.......................55
Article Seven INVESTMENT OF TRUST ASSETS.........................57
Section 7.1 Appointment of Trustee........................57
Section 7.2 Investment of Accounts........................57
Section 7.3 Income and Expenses...........................60
Section 7.4 Company Stock.................................60
Section 7.5 Exclusive Benefit.............................61
Section 7.6 Valuation.....................................61
Article Eight BENEFICIARY........................................63
Section 8.1 Designation of Beneficiary....................63
Section 8.2 No Beneficiary................................63
Section 8.3 Mandatory Distribution of Death Benefits......63
Article Nine NOTICES............................................68
Section 9.1 Notice to Trustee.............................68
Section 9.2 Subsequent Notices............................68
Section 9.3 Copy to Participant...........................68
Section 9.4 Reliance Upon Notice..........................68
Article Ten IN-SERVICE WITHDRAWALS AND LOANS TO
PARTICIPANTS.......................................76
Section 10.1 Withdrawals from Accounts....................69
Section 10.2 Loans to Participants........................71
Article Eleven METHODS OF PAYMENT.................................74
Section 11.1 Participant Election.........................74
Section 11.2 Joint and Survivor Annuity...................76
Section 11.3 Joint and Survivor Annuity Requirements......77
Section 11.4 Notice and Explanation to Participants.......82
Section 11.5 Direct Rollover Optional Form of Benefit.....82
Section 11.6 Election to Defer Receipt of Benefits........83
Section 11.7 Election of Form of Payment of Benefits......83
Section 11.8 Limit on Commencement of Distribution........84
Section 11.9 Minority or Disability.......................85
Section 11.10 Unclaimed Benefit...........................85
Article Twelve TOP HEAVY PROVISIONS...............................87
Section 12.1 Application..................................87
Section 12.2 Top-Heavy Plan Status/Super Top-Heavy
Plan Status..................................87
Section 12.3 Top-Heavy Minimum Allocation.................91
Section 12.4 Amendments...................................93
Article Thirteen REPURCHASE OF COMPANY STOCK; NONTERMINABLE
PROTECTIONS AND RIGHTS...........................94
Section 13.1 Employee Stock Ownership Plan................94
Section 13.2 Put Option...................................94
Section 13.3 Payment of Purchase Price....................95
Section 13.4 Notice.......................................96
Section 13.5 Nonterminable Protections and Rights.........96
Section 13.6 Investment in Company Stock..................96
Section 13.7 Partial Diversification of Investment........98
Article Fourteen ADOPTION BY OTHER ORGANIZATIONS.................100
Section 14.1 Procedure for Adoption......................100
Article Fifteen AMENDMENT AND TERMINATION OF PLAN.................101
Section 15.1 Amendment of the Plan.......................101
Section 15.2 Right to Terminate..........................101
Section 15.3 Consolidation or Merger.....................102
Section 15.4 Liquidation of Trust Fund Upon Termination..102
Section 15.5 Permanent Discontinuance of Contributions...102
Section 15.6 Consolidation or Merger of Plan.............102
Article Sixteen GENERAL PROVISIONS................................103
Section 16.1 Non-Guarantee of Employment.................103
Section 16.2 Manner of Payment...........................103
Section 16.3 Nonalienation of Benefits...................103
Section 16.4 Titles for Convenience Only.................105
Section 16.5 Governing Law...............................105
Section 16.6 Contributions Contingent Upon Approval......105
Section 16.7 Payment of Expenses.........................105
Section 16.8 Rights to Trust Assets......................105
Section 16.9 Disclaimer of Liability.....................106
Section 16.10 Persons May Serve in More than One
Capacity...................................106
Section 16.11 Construction...............................106
Section 16.12 Counterparts...............................106
Section 16.13 No Involuntary Retirement Because of Age...107
Section 16.14 Mistake of Fact............................107
Section 16.15 Disallowance of Deduction..................107
Article Seventeen PLAN ADMINISTRATION.............................108
Section 17.1 Committee...................................108
Section 17.2 Claims Procedure............................108
Section 17.3 Powers and Duties of the Committee..........109
Section 17.4 Limitation on Powers........................110
Section 17.5 Limitation on Duties........................110
Section 17.6 Rules and Decisions.........................110
Section 17.7 Committee Procedures........................110
Section 17.8 Liability of Committee......................111
Section 17.9 Bonding.....................................111
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
ARTICLE ONE
-----------
PURPOSE
Section 1.1 Introduction.
Frozen Food Express Industries, Inc., a Texas corporation (hereinafter
referred to as "Employer"), previously established the Frozen Food Express
Industries, Inc. 401(k) Savings Plan as a 401(k) profit sharing plan and
employee stock ownership plan for the exclusive benefit of its eligible
Employees and their Beneficiaries. The Plan is hereby restated for the
purposes of (i) incorporating the four amendments that have been adopted
following the Plan's most recent restatement and (ii) incorporating certain
changes relevant to the Plan made by the Community Renewal Tax Relief Act of
2000. As restated, the Plan is intended to be qualified under Sections 401(a),
401(k), and 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the
"Code"), and Section 407(d)(6) of the Employee Retirement Income Security Act
("ERISA") and applicable regulations thereunder. The restated Plan is generally
effective January 1, 2001, except as otherwise provided herein. The Plan
consists of the Plan document herein and the separate Trust Agreement.
Section 1. 2 Purpose.
The purpose of the Plan is to reward eligible Employees for their loyal
and faithful service, to share with such Employees a portion of the Employers'
profits, to help such Employees accumulate funds for their retirement, and to
provide funds for such Employees or their Beneficiaries in the event of death
or disability. The benefits provided by the Plan will be paid from the Trust
and will be in addition to the benefits eligible Employees are entitled to
receive under any other programs of the Employer and/or from the federal
Social Security Act. The Plan and the Trust are established and shall be
maintained for the exclusive benefit of the eligible Employees and their
Beneficiaries.
Section 1.3 Limitation.
The provisions of this Plan, as amended and restated, shall apply solely
to an Employee who terminates employment with an Employer on or after the
restated Effective Date of this Plan. If an Employee terminates employment
with an Employer prior to the restated Effective Date, that Employee shall be
entitled to benefits under the terms of the Prior Plan, the FFE Transportation
Services ESOP, or the Conwell ESOP, as applicable.
ARTICLE TWO
-----------
DEFINITIONS
When used herein, the following words and phrases shall have the
respective meanings set forth below, unless the context clearly indicates
otherwise:
Section 2.3 Accounting Date.
Accounting Date means the last business day of each calendar quarter
of any Plan Year.
Section 2.4 Accounts.
Accounts means the value of all of the accounts maintained by the
Committee for a particular Participant, including his Discretionary Employer
Contribution Account, Matching Employer Contribution Account, Rollover
Account, Savings Account, W & B Plan Rollover Account, ESOP Transfer
Account, and ESOP Rollover Account.
Section 2.5 Administrator.
Administrator means the Company, unless the Company designates
another person to hold the position of Administrator by written action.
Section 2.6 Affiliate.
Affiliate means any company, other than an Employer, included within a
"controlled group of corporations" defined by Code Section 1563(a) determined
without regard to Code Sections 1563(a)(4) and (e)(3)(C) and Code Section
409(l)(4), which contains an Employer.
Section 2.7 Alternate Payee.
Alternate Payee means any spouse, former spouse, child, or other
dependent of a Participant who is recognized by a domestic relations order as
having a right to receive all, or a portion of, the benefits payable under the
Plan with respect to such Participant.
Section 2.8 Beneficiary.
Beneficiary means a person or entity, either in an individual or fiduciary
capacity, designated by a Participant or Former Participant pursuant to Article
8 to receive any benefit payable under this Plan upon the death of such
Participant or Former Participant.
Section 2.9 Break in Service.
(a) A Break in Service, for purposes of eligibility, means a Period of
Severance of at least twelve (12) consecutive months. A Period of Severance
means a continuous period of time during which an Employee is not employed by
the Employer. Such period shall begin on the date the Employee retires, quits,
is discharged, or dies, or, if earlier, the twelve (12) month anniversary of
the date on which the Employee was otherwise first absent from work.
(b) A Break in Service, for purposes of vesting, means a Period of
Severance of at least twelve (12) consecutive months. A Period of Severance
means a continuous period of time during which an Employee is not employed by
the Employer. Such period shall begin on the date the Employee retires, quits,
is discharged, or dies, or, if earlier, the twelve (12) month anniversary of
the date on which the Employee was otherwise first absent from work.
(c) An Employee shall receive credit for purposes of determining
whether he has incurred a Break in Service under subsection (a) or (b) above
for the aggregate of all time period(s) commencing with the first day such
Employee completes an Hour of Service, the Employment Commencement Date,
(including such day following reemployment) and ending on the date a Break in
Service begins. An Employee shall also receive credit for any Period of
Severance of less than twelve (12) consecutive months. Fractional periods of
a year shall be expressed in terms of days.
(d) Further, solely for the purpose of determining whether a
Participant has incurred a Break in Service under (a) or (b) above, Hours of
Service shall be recognized for "authorized leaves of absence" and "maternity
and paternity leaves of absence."
(i) An "authorized leave of absence" means an unpaid temporary
cessation from active employment with the Employer pursuant
to an established nondiscriminatory policy, whether
occasioned by illness, military service or any other
reason if:
(A) a person is absent on a leave of absence with the
prior consent of his Employer, which consent shall
be granted under uniform rules applied to all
Employees on a nondiscriminatory basis, but only if
such person is an Employee immediately prior to
the commencement of such period of authorized
absence and resumes employment with an
Employer not later than the first working day
following the expiration of such period of
authorized absence;
(B) a person is a member of the Armed Forces of the
United States and his reemployment rights are
guaranteed by law, but only if such person is an
Employee immediately prior to becoming a member
of such Armed Forces and resumes employment
with an Employer within the period during which
his reemployment rights are guaranteed by law; or
(C) a person who is at any time an Employee who is
employed by an entity which is not an Employer but
whose employees are deemed, under Code Section
414, to be employed, together with all Employees,
by a common entity, including a period or periods
of such employment prior to or after any particular
time such person is an Employee.
(ii) A "maternity or paternity leave of absence" means an
absence from work for any period because of the
Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee relating to the
adoption of the child, or any absence for the purpose of
caring for the child for a period immediately following the
birth or placement. For purposes of a maternity and
paternity leave of absence, Hours of Service shall be
credited for the Computation Period in which the absence
from work begins, only if the credit is necessary to prevent
the Employee from incurring a Break in Service, or, in any
other case, in the immediately following Computation
Period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would
normally have been credited but for the absence, or, in any
case in which the Administrator is unable to determine the
hours normally credited, eight (8) Hours of Service per day.
The total Hours of Service required to be credited for a
"maternity or paternity leave of absence" shall not exceed
five hundred one (501) hours.
(e) Notwithstanding the foregoing, no credit will be given for such
absences from work unless the Employee furnishes to the Committee such timely
information as it may reasonably require to establish that the absence from
work is for the reason(s) referred to above and the number of days for which
there was such an absence.
Section 2.10 Code.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Section 2.11 Committee.
Committee means the Savings Plan Committee appointed pursuant to Article
17 to administer the Plan.
Section 2.12 Company.
Company means Frozen Food Express Industries, Inc., a corporation
organized under the laws of the State of Texas.
Section 2.13 Company Stock.
(a) Company Stock means those unrestricted shares of voting common
stock issued by the Company and any common or preferred stock issued by the
Employer or by an Affiliate which constitute Employer Securities under Code
Sections 409(l) and 4975(e)(8).
(b) Qualifying Company Stock means:
(i) Common stock issued by the Employer (or by a corporation
which is a member of the same controlled group) which is
readily tradable on an established securities market; or
(ii) If there is no common stock which meets the requirements
of (i) above, then common stock issued by the Employer
(or by a corporation which is a member of the same
controlled group) having a combination of voting power
and dividend rights equal to or in excess of:
(A) that class of common stock of the Employer (or any
other such corporation) having the greatest voting
power; and
(B) that class of common stock of the Employer (or of
any other such corporation) having the greatest
dividend rights; or
(iii) Noncallable preferred stock, if such stock is convertible
at any time into stock which meets the requirements of (i)
or (ii) (whichever is applicable) and if such conversion
is at a conversion price that is reasonable. A preferred
stock will be considered noncallable if after the call
there will be a reasonable opportunity for a conversion
which meets the requirements of the preceding sentence in
accordance with applicable Treasury regulations.
Notwithstanding the foregoing, references in the Plan to
Company Stock shall mean Qualifying Company Stock as defined
in this subsection (b).
Section 2.14 Compensation.
(a) Compensation, pursuant to the safe harbor definition of Treasury
Regulation Section 1.415-2(d)(10), means 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 described in Treasury Regulation Section 1.62-2(c), plus,
effective January 1, 1998, any amounts excluded from income pursuant to Code
Sections 125 and 401(k), and effective January 1, 2001, Code Section 132(f)
and excluding the following:
(i) contributions by the Employer to any qualified deferred
compensation plan (to the extent not includable in the
Participant's gross income) or simplified employee pension
defined in Code Section 408(k) (to the extent not
includable in the Participant's gross income) (other than,
effective January 1, 1998, amounts contributed pursuant to
Code Sections 401(k) and 125, and, effective January 1,
2001, Code Section 132(f));
(ii) distributions from any plan of deferred compensation;
(iii) amounts realized from the exercise of any nonqualified
stock option, or, in the case of restricted stock, when
such stock becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option;
and
(v) other amounts which receive special tax benefits such as
premiums paid by the Employer (to the extent not
includable in the Participant's gross income) under group
term life insurance, contributions by the Employer to an
annuity under Code Section 403(b) (to the extent not
includable in the Participant's gross income), and any other
amounts received under any Employer sponsored fringe
benefit plan (to the extent not includable in the
Participant's gross income).
(b) Compensation for any Limitation Year includes compensation
received by an Employee in that Limitation Year from an Employer prior to the
Employee becoming a Participant in the Plan.
(c) Notwithstanding the foregoing, Compensation taken into account
for determining all benefits provided under the Plan for any determination
period shall not exceed $150,000, or such larger amount the Secretary of the
Treasury may prescribe for the relevant year. If the period for determining
compensation used in calculating an Employee's allocation for a determination
period is a short Plan Year, the Compensation limit is an amount equal to the
otherwise applicable Compensation limit multiplied by a fraction, the
numerator of which is the number of months in the short Plan Year and the
denominator of which is twelve (12). If Compensation for any prior
determination period is taken into account in determining an Employee's
allocations or benefits for the current determination period, the Compensation
for such prior year is subject to the applicable Compensation limit in effect
for that prior year.
(d) For purposes of determining whether the Plan discriminates in
favor of Highly Compensated Employees, Compensation means Compensation defined
in this Section 2.12, except any exclusions from Compensation other than the
exclusions described in clauses (a)(i), (ii), (iii), (iv), and (v) do not
apply. The Employer also may elect to use an alternate nondiscriminatory
definition, under Code Section 414(s) and the applicable Treasury regulations.
In determining Compensation under this paragraph, the Employer may elect to
exclude all Savings Contributions made by the Employer on behalf of the
Employees. The Employer's election to exclude Savings Contributions must be
consistent and uniform for Employees and all plans of the Employer for any
particular Plan Year. The Employer may make this election to exclude Savings
Contributions for nondiscrimination testing purposes, whether or not this
Section includes Savings Contributions in the general Compensation definition
of the Plan.
(e) Notwithstanding the foregoing, Compensation for any Self-Employed
Individual means earned income.
Section 2.15 Conwell ESOP
Conwell ESOP means the Conwell Corporation Employee Stock Ownership Plan,
formerly maintained by Conwell Corporation, which has been merged into and
consolidated with this Plan, pursuant to that certain Plan merger agreement
effective December 31, 1999.
Section 2.16 Current Market Value.
Current Market Value means the Current Market Value of each asset
included in the Trust Assets on any particular date, which shall be that
amount determined by the Trustee on a basis uniformly applied which, in the
Trustee's opinion, fairly reflects the fair market value of such asset on such
date.
Section 2.17 Disability.
Disability means a physical or mental condition which, in the opinion of
the Committee, totally and presumably permanently prevents a Participant or
Former Participant from satisfactorily performing substantially the same duties
assigned to him by his Employer (which includes for purposes of this Section
2.15 an employing entity described in Section 2.42 at the time such condition
develops, or if such Participant or Former Participant is on an authorized
leave of absence (other than an authorized leave of absence referred to in
Section 2.7(d)(i)) or any other leave of absence approved by his Employer when
such condition develops, substantially the same duties assigned to him by his
Employer immediately prior to the commencement of such period of authorized
or approved absence or such other duties which the Employer makes available
to the Participant and for which the Participant is qualified by reason of his
training, education, or experience. A determination that Disability exists
shall be based upon competent medical evidence satisfactory to the Committee.
The date any person's Disability occurs shall be deemed to be the date such
condition is determined to exist by the Committee.
Section 2.18 Discretionary Employer Contribution.
Discretionary Employer Contribution means any contribution to the Plan
made by an Employer for the Plan Year and allocated to a Participant's
Discretionary Employer Contribution Account.
Section 2.19 Discretionary Employer Contribution Account.
Discretionary Employer Contribution Account means the account or
record maintained or caused to be maintained by the Trustee showing the
composition and value of the individual interest of a particular Participant,
Former Participant or Beneficiary in the Trust Assets attributable to
Discretionary Employer Contributions, if any.
Section 2.20 Early Retirement.
Early Retirement means the date the Participant attains age 55 and
completes ten (10) Years of Service.
Section 2.21 Early Retirement Date.
Early Retirement Date means the first day next following the date the
Participant attains Early Retirement Age and which immediately follows the
last day on which the Participant is an Employee, or, if later, the last day
of the Participant's authorized leave of absence, if any.
Section 2.22 Effective Date.
The original Effective Date of this Plan is October 1, 1987. The
Effective Date of this Plan as restated is January 1, 2001, except as
otherwise provided herein.
Section 2.23 Employee.
(a) Employee means any individual currently employed by the Employer
maintaining the Plan or of any other Employer required to be aggregated with
the Employer under Code Sections 414(b), (c), (m) or (o).
(b) The Plan does not treat any Leased Employee as an Employee of
the Employer. A Leased Employee is an individual, who otherwise is not an
Employee of the Employer, who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning
of Code Section 144(a)(3)) on a substantially full time basis for at least
one (1) year and who performs services under the primary direction and control
of the Employer.
(c) Notwithstanding the preceding, the term "Employee" shall not
include any individual who is designated as an "Independent Contractor" by the
Employer, even if the status of such individual subsequently is changed from
that of an Independent Contractor to that of an employee as a result of
administrative or legal proceedings.
Section 2.24 Employer Contributions.
Employer Contributions means the Matching Employer Contributions,
Discretionary Employer Contributions and Incentive Contributions made by the
Employer pursuant to Section 4.2.
Section 2.25 Employer.
Employer means FROZEN FOOD EXPRESS INDUSTRIES, INC., FFE TRANSPORTATION
SERVICES, INC., CONWELL CORPORATION, W & B REFRIGERATION SERVICE COMPANY, INC.,
LISA MOTOR LINES, INC., GLOBAL REFRIGERANT MANAGEMENT, INC., or any other
Affiliate who, with the written consent of the Plan Sponsor, adopts this Plan
on the effective date of its election to participate.
Section 2.26 Employment Commencement Date.
Employment Commencement Date means the first day for which an Employee
is to be credited with an Hour of Service.
Section 2.27 Entrance Date.
Entrance Date means the first business day of the month following an
Employee's completion of ninety (90) days of employment.
Section 2.28 ERISA.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
Section 2.29 ESOP Accounts.
ESOP Accounts means the ESOP Transfer Accounts and ESOP Rollover
Accounts maintained under this Plan.
Section 2.30 ESOP Rollover Account.
ESOP Rollover Account means the account(s) or record(s) maintained or
caused to be maintained by the Plan Administrator showing the composition and
value of the individual interest of a particular Participant, Former
Participant, or Beneficiary in the Trust Assets attributable to rollover
contributions to the FFE Transportation Services ESOP and/or the Conwell ESOP
contributed to the Trust pursuant to that certain Plan Merger Agreement
effective December 31, 1999.
Section 2.31 ESOP Transfer Account.
ESOP Transfer Account means the account(s) or record(s) maintained or
caused to be maintained by the Plan Administrator showing the composition and
value of the individual interest of a particular Participant, Former
Participant, or Beneficiary in the Trust Assets attributable to the
Participant's or Former Participant's Employer Securities Account and Employer
Investment Account under the FFE Transportation Services ESOP or Conwell ESOP,
contributed to the Trust pursuant to that certain Plan Merger Agreement
effective December 31, 1999.
Section 2.32 FFE Transportation Services ESOP
FFE Transportation Services ESOP means the FFE Transportation
Services, Inc. Employee Stock Ownership Plan, formerly maintained by FFE
Transportation Services, Inc., which has been merged into and consolidated
with this Plan, pursuant to that certain Plan merger agreement effective
December 31, 1999.
Section 2.33 Former Participant.
Former Participant means a Participant who is no longer participating in
the Plan but who has a vested account balance which has not been paid in full.
Section 2.34 Highly Compensated Employee.
Highly Compensated Employee means any Participant or Former
Participant who is a Highly Compensated Employee, defined in Code Section
414(q). Generally, any Participant or Former Participant is considered a
Highly Compensated Employee if the Participant or Former Participant:
(a) was at any time during the Plan Year or during the preceding Plan
Year a Five Percent Owner as defined in Section 12.2(g)(iii); or
(b) for the preceding Plan Year (i) had Compensation from the
Employer in excess of $80,000, as adjusted by the Secretary of the Treasury
for the relevant year and (ii) was in the top-paid group during the preceding
Plan Year.
(c) An Employee is in the top-paid group of Employees for any Plan
Year if such Employee is in the group consisting of the top twenty percent
(20%) of the Employees when ranked on the basis of Compensation paid during
the Plan Year. However, solely for determining the total number of active
Employees for a year, the following Employees are disregarded:
(i) The Employees described in this subsection (i) are
excluded on the basis of age or Service:
(A) Employees who have not completed six (6) months
of Service by the end of the year. (An Employee's
Service in the immediately preceding year is added
to the Employee's Service in the current year to
determine whether the exclusion applies in the
current year.);
(B) Employees who normally work less than 17 1/2 hours
per week. (This determination is made
independently for each year. Weeks during which
the Employee did not work are not considered. An
Employee who works less than 17 1/2 hours a week
for fifty percent (50%) or more of the total weeks
worked by the Employee during the year is deemed
to normally work less than 17 1/2 hours per week
under this rule.);
(ii) Employees who are included in a unit of employees
covered by an agreement that the Secretary of Labor finds
to be a collective bargaining agreement between Employee
representatives and the Employer which satisfies Code
Section 7701(a)(46) and Temporary Treasury Regulation
Section 301.7701-17T are included in determining the
number of Employees in the top-paid group unless the
following exception applies. If ninety percent (90%) or
more of the Employees of the Employer are covered under
collective bargaining agreements that the Secretary of
Labor finds to be collective bargaining agreements between
Employee representatives and the Employer, which
agreements satisfy Code Section 7701(a)(46) and
Temporary Treasury Regulation Section 301.7701-17T,
and the Plan covers only Employees who are not covered
under the agreements, then the Employees who are covered
under the agreements are (A) not counted in determining
the number of noncollective bargaining employees who
will be included in the top-paid group in testing the Plan;
and (B) not included in the top-paid group in testing the
Plan.
The Committee must make the determination of who is a Highly
Compensated Employee consistent with Code Section 414(q) and regulations
issued under that Code Section. The Employer may make a calendar year
election to determine the Highly Compensated Employees for the preceding Plan
Year, as prescribed by Treasury regulations. A calendar year election must
apply to all plans and arrangements of the Employer.
For purposes of this Section, Compensation means Compensation defined
in Section 2.12, and including deferrals under (a) Code Section 402(a)(8)
relating to a Code Section 401(k) arrangement; (b) Code Section 125 relating
to a cafeteria plan; (c) Code Section 403(b) relating to a tax sheltered
annuity plan; (d) Code Section 408(h) relating to a simplified employee
pension; (e) effective January 1, 1998, Code Section 402(k) relating to a
simple retirement account; and (f) effective January 1, 2001, Code Section
132(f) relating to transportation fringe benefits. Compensation from each
Related Employer shall be taken into account.
Section 2.35 Hours of Service.
(a) Hours of Service shall be credited for periods during which an
Employee is either:
(i) directly or indirectly paid, or entitled to payment, by an
Employer or an entity described in Section 2.44 for the
performance of duties in his capacity as an Employee of
such Employer or entity;
(ii) directly or indirectly paid or entitled to payment, by an
Employer or an entity described in Section 2.44 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 any other leave of absence approved by such Employer or
entity;
(iii) entitled to back pay, irrespective of mitigation of damages,
which is either awarded or agreed to by an Employer or an
entity described in Section 2.44; or
(iv) on an authorized leave of absence.
(b) An Employee shall not receive credit for the same Hours of
Service under more than one paragraph of this Section 2.33(a);
(c) An Employee shall also receive credit for any additional Hours
of Service required by applicable federal law (other than ERISA)
to be credited to him, the nature and extent of such credit to be
determined under such law.
(i) Except as provided in the following sentence, Hours of
Service under Subsection 2.33(a)(i) shall be computed by
crediting an Employee with 190 Hours of Service for each
month such Employee is entitled to be credited with one
Hour of Service under Subsection 2.33(a)(i). If an
Employee is a part-time Employee, such Employee shall
receive credit for Hours of Service equal to the actual
number of hours worked by such Employee, as determined
from the appropriate payroll records.
(ii) Hours of Service under Subsection 2.33(a)(ii) shall be
determined pursuant to the rules set forth in paragraphs
(b) and (c) of Section 2530.200b-2 of the United States
Department of Labor Regulations, which rules are hereby
incorporated and made a part of this Plan by reference.
(iii) Except for part-time Employees, Hours of Service under
Subsection 2.33(a)(iv) shall be credited on the basis of
190 hours for each complete calendar month of a person's
authorized leave of absence, but no such Hours of Service
shall be credited for any month for which an Employee
receives credit for Hours of Service under Subsection
2.33(a)(i) or (ii).
(iv) For purposes of this Section an Employee works "part-time"
if he normally is employed for less than twenty (20)
hours per week or less than six (6) months per Plan Year.
(d) The terms defined in this Section 2.33 shall include Hours of
Service rendered by an Employee prior to the Effective Date for an Employer
or a member of a controlled group of corporations including an Employer.
Section 2.36 Incentive Contribution.
Incentive Contribution means any contribution to the Plan made by FFE
Transportation Services, Inc. pursuant to the 1994 Incentive Bonus Plan and
allocated to a Participant's Savings Account. All Employer Contributions
under Section 4.2(b)(ii) are Incentive Contributions.
Section 2.37 Matching Employer Contribution.
Matching Employer Contribution means any contribution to the Plan made
by an Employer for the Plan Year and allocated to a Participant's Matching
Employer Contribution Account by reason of the Participant's Savings
Contributions. All Employer Contributions under Section 4.2(a) are Matching
Employer Contributions.
Section 2.38 Matching Employer Contribution Account.
Matching Employer Contribution Account means the account or record
maintained or caused to be maintained by the Trustee showing the composition
and value of the individual interest of a particular Participant, Former
Participant or Beneficiary in the Trust Assets attributable to Matching
Employer Contributions and Special Employer Contributions, if any.
Section 2.39 Named Fiduciary.
Named Fiduciary means one or more fiduciaries named in this Agreement
who jointly and severally shall have authority to control or manage the
operation and administration of the Plan. Frozen Food Express Industries, Inc.
shall be the Named Fiduciary unless it designates another person by written
Employer action.
Section 2.40 Nonforfeitable.
Nonforfeitable means a vested interest attained by a Participant or
Beneficiary in that part of the Participant's benefit under the Plan arising
from the Participant's Service, which claim is unconditional and legally
enforceable against the Plan.
Section 2.41 Non-Highly Compensated Employee.
Non-Highly Compensated Employee means an Employee who is not a Highly
Compensated Employee.
Section 2.42 Normal Retirement Age.
Normal Retirement Age means the 65th birthday of a Participant or
Former Participant.
Section 2.43 Normal Retirement Date.
Normal Retirement Date means, for each Participant, the first day next
following the date the Participant attains Normal Retirement Age and which
immediately follows the last day on which the Participant is an Employee, or,
if later, the last day of the Participant's authorized leave of absence, if
any.
Section 2.44 Owner-Employee.
Owner Employee means a sole proprietor or a partner who owns more than
ten percent (10%) of either the capital interest or profits interest in an
unincorporated Employer and who receives income from such unincorporated
Employer for personal services.
Section 2.45 Participant.
Participant means an Employee of the Employer who has met the
eligibility requirements of this Plan and who has been enrolled as a
Participant in this Plan pursuant to Article 3.
Section 2.46 Participating Employer.
Participating Employer means any Related Employer that may elect to
adopt this Plan pursuant to Article 14.
Section 2.47 Participation.
Participation means any period commencing on the date the Employee
becomes a Participant and ending on the date on which the Employee incurs a
Severance from Service.
Section 2.48 Plan.
Plan means the Frozen Food Express Industries, Inc. 401(k) Savings Plan,
as restated herein.
Section 2.49 Plan Sponsor.
Plan Sponsor means Frozen Food Express Industries, Inc.
Section 2.50 Plan Year.
The annual period beginning on January 1 and ending on December 31.
Section 2.51 Prior Plan.
Prior Plan means the Frozen Food Express Industries, Inc. 401(k) Savings
Plan as in effect prior to the Effective Date.
Section 2.52 Re-Employment Commencement Date.
The first date on which an Employee is credited with an Hour of Service
upon his return to employment with an Employer after he has Separated from
Service.
Section 2.53 Related Employer.
A related group of employers is a controlled group of corporations
(defined in Code Section 414(b)), trades or businesses (whether or not
incorporated) which are under common control (defined in Code Section 414(c))
or an affiliated service group (defined in Code Section 414(m) or in Code
Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours
of Service, determining Years of Service and Breaks in Service under Articles
2 and 6, applying the participation test of Code Section 401(a)(26) and the
coverage test of Code Section 410(b), applying the limitations on allocations
in Article 5, applying the top-heavy rules and the minimum allocation
requirements of Article 12, the definitions of Employee, Highly Compensated
Employee, Compensation and Leased Employee, and for any other purpose
required by the applicable Code Section or by a Plan provision. However, an
Employer may contribute to the Plan only by being a signatory to a
Participation Agreement to the Plan. If one or more of the Employer's related
group members become Participating Employers by executing a Participation
Agreement to the Plan, the term "Employer" includes the participating related
group members for all purposes of the Plan, and Administrator means the
Employer that is the signatory to the Plan. For Plan allocation purposes,
Compensation does not include Compensation received from a Related Employer
that is not participating in this Plan.
Section 2.54 Retirement.
A Participant's or Former Participant's being Separated from Service on
or after his Normal Retirement Date. Retirement shall be considered as
commencing on that day which occurs on or after a Participant or Former
Participant had reached Normal Retirement Date and which immediately follows
(i) the last day of which such Participant or Former Participant is an
Employee or, if later, (ii) the last day of an authorized leave of absence or
any other leave of absence approved by such Participant's or Former
Participant's Employer.
Section 2.55 Rollover Account.
The account(s) or record(s) maintained or caused to be maintained by the
Trustee showing the composition and value of the individual interest of a
particular Participant, Former Participant or Beneficiary in the Trust Assets
attributable to each contribution of a Rollover Amount (as defined in Section
4.5) or a direct trustee-to-trustee transfer of assets to the Trust from a
qualified plan or Code Section 403(b) annuity on behalf of a Participant.
Section 2.56 Savings Account.
The account or record maintained or caused to be maintained by the
Trustee showing the composition and value of the individual interest of a
particular Participant, Former Participant or Beneficiary in the Trust Assets
attributable to Savings Contributions elected by Participants, Incentive
Contributions, Qualified Non-Elective Contributions and Qualified Matching
Contributions.
Section 2.57 Savings Contributions.
Savings Contributions means Employer contributions to the Plan made
pursuant to Participants' elections under Section 4.1.
Section 2.58 Self-Employed Individual.
Self-Employed Individual means, regarding an unincorporated business,
an individual described in Code Section 401c(1). A Self-Employed Individual
shall be treated as an Employee if the individual has an ownership interest
in either the capital or profits interest of an unincorporated Employer and
receives income from the Employer for personal services.
Section 2.59 Separation from Service.
Separation from Service occurs whenever a person ceases to be an
Employee of the Employer and is no longer being credited with Hours of
Service.
Section 2.60 Service.
Service means any period of time the Employee is in the employ of the
Employer. Service in all cases includes periods during which the Employee is
on an "authorized leave of absence" or a "maternity or paternity leave of
absence" defined in Section 2.7(d) relating to a Break in Service. Leaves of
absence also shall include periods of absence in connection with military
service during which the Employee's re-employment rights are legally protected.
Except for absence by reason of military service, leaves of absence shall be
for a maximum period of two (2) years. Leaves of absence shall be granted on
a uniform and nondiscriminatory basis.
If the Employer maintains the plan of a Predecessor Employer, Service
shall include service for the Predecessor Employer. To the extent it may be
required under applicable Treasury regulations under Code Section 414,
Service shall include all service for any Predecessor Employer.
For purposes of determining vesting of a Participant's ESOP Transfer
Account, the Participant will be credited with the greater of (i) his Service
as determined in accordance with the elapsed time method described in the
Plan, or (ii) the Years of Service credited to such Participant as of
December 31, 1999, under the FFE Transportation Services ESOP and/or the
Conwell ESOP, plus the number of Years of Service credited under this Plan
from and after January 1, 2000 (using the elapsed time method from such date
forward).
Section 2.61 Shareholder-Employee.
Shareholder-Employee means a Participant who owns more than five
percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation under
Code Section 1362(a) and who receives income from the Employer for personal
services.
Section 2.62 Separated from Service.
A person is Separated from Service when he is no longer an Employee.
Section 2.63 Special Employer Contributions.
Special Employer Contributions means the Special Employer Contributions
made by the Employers pursuant to the terms of the Prior Plan.
Section 2.64 Spouse.
Spouse means the spouse to whom a Participant or Former Participant is
married on the date the Participant or Former Participant becomes entitled to
benefit payments under the Plan, or if such entitlement has not occurred, the
spouse to whom the Participant or Former Participant was married on the date
of his death; provided, however, that the Participant or Former Participant
had been married to such spouse for at least one year ending on the date the
Participant becomes entitled to benefit payments or the date of the
Participant's or Former Participant's death.
Section 2.65 Trust.
Trust means the trust created by the Trust Agreement between Frozen Food
Express Industries, Inc. and the Trustee.
Section 2.66 Trust Agreement.
Trust Agreement means the agreement, entered into by Frozen Food Express
Industries, Inc. and the Trustee, or any successor Trustee, establishing the
Trust and specifying the duties of the Trustee.
Section 2.67 Trust Fund.
Trust Fund means all assets of any kind and nature from time to time
held by the Trustee or its agent under the Trust Agreement without
distinction between income and principal. This Plan contemplates a single
Trust for all Employers participating under the Frozen Food Express
Industries, Inc. 401(k) Savings Plan. However, the Trustee will maintain
separate records of account to reflect properly each Participant's Account
Balance from each Participating Employer.
Section 2.68 Trustee.
Trustee means at any particular time, the then acting Trustee or,
collectively, if there is more than one, the then acting Trustees of the
Trust.
Section 2.69 Valuation Date.
Valuation Date means any business day on which the Nasdaq National
Market is open.
Section 2.70 Vested Percentage.
Vested Percentage means that percentage of a Participant's Discretionary
Employer Contribution Account, Matching Employer Contribution Account,
W & B Plan Rollover Account, and ESOP Transfer Account, if any, in which the
Participant's rights are nonforfeitable and fully vested, which percentage is
determined by reference to the vesting schedule set forth in Section 6.2.
Section 2.71 W & B Plan Rollover Account.
W & B Plan Rollover Account means the account(s) or record(s) maintained
or caused to be maintained by the Plan Administrator showing the composition
and value of the individual interest of a particular Participant, Former
Participant, or Beneficiary in the Trust assets attributable to the direct
trustee-to-trustee transfers of assets to the Trust from the W & B
Refrigeration Service Co., Inc. Employees' Profit Sharing Plan and Trust.
Section 2.72 Year of Service.
(a) For purposes of eligibility, a Year of Service means the twelve
(12) consecutive month period commencing on an Employee's Employment
Commencement Date and ending on the anniversary of the Employee's Employment
Commencement Date. If an Employee fails to complete a Year of Service on the
first anniversary of the Employment Commencement Date, the Employee shall be
deemed to complete a Year of Service upon the completion of twelve (12) months
of Service. An Employee shall receive credit for the aggregate of all time
periods commencing with the first day the Employee is entitled to credit for
an Hour of Service, including the Re-Employment Commencement Date, and ending
on the date a Break in Service begins. An Employee also shall receive credit
for any Period of Severance of less than twelve (12) consecutive months.
Fractional periods of a year shall be expressed in terms of months, with
credit for a month of service being given for each thirty (30) days of Service.
(b) For purposes of vesting, and subject to Section 6.3, a Year of
Service means twelve (12) months of Service. For purposes of determining an
Employee's Years of Service for vesting purposes, an Employee shall receive
credit for the aggregate of all time periods commencing on an Employee's
Employment Commencement Date, including the Re-Employment Commencement Date,
and ending on the date a Break in Service begins. An Employee also shall
receive credit for any Period of Severance of less than twelve (12)
consecutive months. Fractional periods of a year shall be expressed in terms
of months, with credit for a month of service being given for each thirty (30)
days of Service. In computing an Employee's Years of Service, the following
rules shall apply:
(i) For an Employee who terminates employment and is
subsequently re-employed after incurring a Break in
Service, Service prior to the Break in Service shall be
taken into account immediately upon re-employment.
(ii) For a Participant who terminates employment and who
subsequently is re-employed after incurring five (5)
consecutive Breaks in Service, Years of Service after the
Break in Service shall not be taken into account for
purposes of determining the Nonforfeitable percentage of
an Employee's Account Balance derived from Employer
Contributions which accrued before the Break in Service.
(iii) For a Participant who terminates employment without any
vested right to his Discretionary Employer Contribution
Account or Matching Employer Contribution Account and
who is re-employed after a Break in Service, Service before
the Break in Service shall be taken into account for
purposes of determining the Nonforfeitable percentage of
an Employee's Account Balance derived from Employer
Contributions which accrue after the Break in Service.
(iv) Years of Service, for purposes of vesting, shall include
all Years of Service of the Employee with any Predecessor
Employer.
(v) Years of Service with the Employer before a Participant
enters the Plan shall be considered for purposes of vesting.
(vi) If the Employer is a member of a group of Related
Employers, then Year of Service for purposes of vesting
shall include Service with any Related Employer.
(vii) For purposes of determining Years of Service for vesting,
the following definitions shall apply:
(A) Employment Commencement Date means the date
on which an Employee is first entitled to credit for
an Hour of Service.
(B) Period of Severance means the period of time
commencing on the Severance from Service Date
and ending on the date on which the Employee
again performs an Hour of Service for the Employer.
(C) Re-Employment Commencement Date means the
first date, following a Period of Severance which is
not required to be considered under the Service
rules, on which the Employee performs an Hour of
Service for the Employer.
(D) Severance from Service Date means the date on
which occurs the earlier of: (i) the date on which an
Employee quits, retires, is discharged or dies; or
(ii) the first anniversary of the first date of a
period in which an Employee remains absent from
Service, with or without pay, with the Employer for
any other reason, such as vacation, holiday, sickness,
disability, leave of absence or layoff.
(c) For purposes of vesting, an Employee's years of service with
W & B Refrigeration Service Co., Inc. shall be counted as Years of Service
under this Plan to the extent that such service was counted as years of
service under the W & B Refrigeration Service Co., Inc. Employees' Profit
Sharing Plan and Trust.
(d) For purposes of determining vesting of a Participant's ESOP
Transfer Account, the Service crediting provisions of Section 2.58 of the
Plan shall apply.
(e) The terms defined in this Section 2.70 shall include Years of
Service performed by an Employee prior to the Effective Date.
* * * * * *
ARTICLE THREE
-------------
ELIGIBILITY AND PARTICIPATION
Section 3.3 Eligibility.
(a) Any Employee included under the provisions of the Prior Plan as
of December 31, 2000, shall continue to participate in accordance with the
provisions of this Plan.
(b) Any other Employee shall become a Participant as of the Entrance
Date following the date on which he completes ninety (90) days of employment.
(c) An Employee who has not satisfied the requirements of Section
3.1(b) above and is entitled to receive an allocation of Incentive
Contributions under the FFE Transportation Services, Inc. 1994 Incentive Bonus
Plan shall become a Participant in the Plan as of the Entrance Date
immediately following his completion of one day of employment; provided,
however, that such participation shall be limited to his ability to receive
an allocation of Incentive Contributions under Section 4.2(b)(ii) and shall
not cause him to be eligible to receive an allocation of any other
contributions to the Plan.
Section 3.4 Eligibility Following Separation From Service.
If an Employee who has satisfied the eligibility requirements of Section
3.1 has Separated from Service and later returns to Service with an Employer, he
shall become a Participant on his Re-Employment Commencement Date;
provided, however, that any Employee who Separated from Service at a time
when he had no Vested Percentage and who has incurred five consecutive Breaks-
in-Service before his Re-Employment Commencement Date, must meet the
eligibility requirements of Section 3.1 anew before he will become or again
become a Participant.
Section 3.5 Participation During Leave of Absence.
During an authorized leave of absence or any other leave of absence
approved by a Participant's or Former Participant's Employer:
(a) The Participant's Accounts shall share in the allocation of net
earnings, net losses, taxes (if any) and expenses of the Trust during such
period; and
(b) In the case of an authorized leave of absence under Section 2.7,
the Participant's interest in his Discretionary Employer Contribution
Account, Matching Employer Contribution Account, and ESOP Transfer Account
shall continue to vest, as provided in Article 6, until he is Separated from
Service. In the case of any other authorized leave of absence or any other
leave of absence approved by his Employer, his interest in his Discretionary
Employer Contribution Account, Matching Employer Contribution Account and
ESOP Transfer Account shall continue to vest, as provided in Article 6, but
only if he resumes employment with an Employer not later than the first
working day following the expiration of the period of such leave. If such
employment is not so resumed, the date he is Separated from Service for
purposes of such vesting shall be deemed to be the last day of employment
prior to the commencement of such authorized or approved absence and such
Participant or Former Participant shall not receive credit for any Hours of
Service under Section 2.33(a)(ii) after such last day.
Section 3.6 Notification of Eligibility and Commencement of Participation.
As soon as administratively feasible prior to each Entrance Date, the
Employers shall furnish the Committee with a list of all Employees who become
eligible or re-eligible to participate in the Plan as of that Entrance Date.
The Committee shall promptly notify each such Employee of his prospective
participation and provide each such Employee with such explanation of the
Plan as the Committee may provide for that purpose, together with such forms
as the Committee may prescribe for elections to participate in the Plan.
Such forms shall include elections for (1) Savings Contributions (via payroll
deduction); (2) investment direction of a Participant's accounts and
(3) Beneficiary designation. Each Employee shall be eligible to have Savings
Contributions made on his behalf as of the Entrance Date concurrent with or
next following the date on which he (1) becomes a Participant in accordance
with Plan Section 3.1, and (2) has signed and returned all election forms as
required by the Employer. In accordance with Plan Section 4.1(b), if the
Employee has not submitted all election forms as of the Entrance Date
concurrent with or next following the date on which he becomes a Participant,
the Employee shall be eligible to have Savings Contributions made on his
behalf as of the payroll period concurrent with or next following the date
the Employee submits such election forms.
* * * * * * *
ARTICLE FOUR
------------
CONTRIBUTIONS
Section 4.3 Savings Contributions.
(a) Subject to the provisions of Sections 4.1(d) and (f), each
Participant may elect that an amount, in any whole percentage of his
Compensation, not to exceed twenty percent (20%) of his Compensation, be
withheld from his Compensation and contributed by his Employer to the Trust.
The Plan Administrator may permit a Participant to make an election under this
Section through any written, electronic or telephonic means authorized by
the Committee. Such contributions shall be known as Savings Contributions.
(b) A Participant who does not have an election to have Savings
Contributions made on his behalf in effect, or any Participant who would like
to amend his election, may make such election or amend such election,
effective as of the next following payroll period by filing an election with
the Plan Administrator within a reasonable time prior to commencement of such
payroll period. The Plan Administrator may permit a Participant to make an
election under this Section through any written, electronic or telephonic
means authorized by the Committee. Any such election or amendment of an
election shall be effective only with respect to Compensation payable after
the Plan Administrator receives such election.
(c) Savings Contributions shall be effected by payroll deductions for
each pay period of the electing Participant commencing after the
effective date of his election and shall be paid over to the Trustee
no later than the fifteenth (15th) business day of the month
following the month of such payroll deduction.
(d) No Employee shall be permitted to have Savings Contributions
made under this Plan during any Plan Year which exceed the
statutory dollar limitation under Code Section 402(g) for the
taxable year of the Participant, as adjusted annually by the
Secretary of the Treasury ($10,500 for 2000). In computing this
limitation, a Participant shall include any Elective Deferrals under
other retirement arrangements. For this purpose, "Elective
Deferrals" means, for any taxable year, the sum of:
(i) any Employer contribution under a qualified cash or
deferred arrangement defined in Code Section 401(k), to
the extent not includable in gross income for the taxable
year under Code Section 402(e)(3), determined without
regard to the dollar limitation under Code Section 402(g);
(ii) any Employer contribution under a simplified employee
pension as defined in Code Section 408(k)(6), pursuant to
a salary reduction agreement;
(iii) any Employer contribution toward the purchase of a tax
sheltered annuity contract as defined in Code Section
403(b), pursuant to a salary reduction agreement; and
(iv) effective January 1, 1998, any Employer contribution
under a SIMPLE Plan pursuant to Code Section 408(p)(2)
If the statutory dollar limitation under Code Section 402(g) is
exceeded, the Committee shall direct the Trustee to distribute the Excess
Elective Deferrals (defined below), and any income or loss allocable to such
Excess Elective Deferrals, to the Participant not later than the first April
15 following the close of the Participant's taxable year. The amount of
Excess Elective Deferrals to be distributed to an Employee for a taxable year
will be reduced by Excess Contributions previously distributed or
recharacterized for the Plan Year beginning in the taxable year of the
Employee. The term "Excess Elective Deferrals" means those Elective Deferrals
that are includable in a Participant's gross income under Code Section 402(g)
to the extent the Participant's Elective Deferrals for a taxable year exceed
the dollar limitation under Code Section 402(g). Excess Elective Deferrals
under this Plan shall be treated as Annual Additions under the Plan, unless
such amounts are distributed no later than the first April 15 following the
close of the Participant's taxable year.
If a Participant is also a Participant in (i) another qualified cash or
deferred arrangement defined in Code Section 401(k); (ii) a simplified
employee pension defined in Code Section 408(k); (iii) a salary reduction
arrangement pursuant to which an employer purchases a tax sheltered annuity
contract defined in Code Section 403(b) or (iv) a SIMPLE Plan defined in
Code Section 408(p), and the Elective Deferrals made under the other
arrangement(s) and this Plan cumulatively exceed the amount of the dollar
limitation under Code Section 402(g) in effect on January 1 of each calendar
year, as adjusted annually by the Secretary of the Treasury ($10,500 for
2000), then the Participant may, not later than March 1 following the close of
the Participant's taxable year, notify the Administrator in writing of the
excess and request that the Participant's Savings Contributions under this
Plan be reduced by an amount specified by the Participant. The specified amount
then shall be distributed in the same manner as provided in the preceding
paragraph. A Participant is deemed to notify the Administrator of any Excess
Elective Deferrals that arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of this Employer.
(e) Limitations on Savings Contributions.
(i) Actual Deferral Percentage Test. The annual allocation
derived from Savings Contributions to a Participant's
Savings Account shall satisfy one of the following tests:
(A) The Average Actual Deferral Percentage for
Participants who are Eligible Highly Compensated
Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Participants
who are Eligible Non-Highly Compensated
Employees for the current Plan Year multiplied by
1.25; or
(B) The Average Actual Deferral Percentage for
Participants who are Eligible Highly Compensated
Employees for the Plan Year shall not exceed the
Average Actual Deferral Percentage for Participants
who are Eligible Non-Highly Compensated
Employees for the current Plan Year multiplied by
two (2); provided that the Average Actual Deferral
Percentage for Participants who are Eligible Highly
Compensated Employees for the Plan Year does not
exceed the Average Actual Deferral Percentage for
Participants who are Eligible Non-Highly
Compensated Employees for the current Plan Year
by more than two (2) percentage points or the
amount as may be prescribed in applicable Treasury
regulations to prevent the multiple use of this
alternative limitation for any Highly Compensated
Employee.
(ii) Definitions. For the purposes of this Section, the
following definitions shall apply:
(A) Actual Deferral Percentage means the ratio,
expressed as a percentage, of (i) the amount of
Savings Contributions actually paid to the Trust
Fund on behalf of the Eligible Participant for the
Plan Year to (ii) the Eligible Participant's
Compensation for the Plan Year, whether or not the
Employee was a Participant for the entire Plan
Year. Savings Contributions on behalf of any
Participant shall include:
(i) any Savings Contributions, (including Excess
Elective Deferrals of Highly Compensated
Employees), but excluding
(1) Excess Elective Deferrals of Non-Highly
Compensated Employees that arise solely
fromSavings Contributions made under this
plan or plans of this Employer, and
(2) Savings Contributions that are taken into
account in the Contribution Percentage Test
(provided the Actual Deferral Percentage
Test is satisfied both with and without
exclusion of these Savings Contributions);
and
(ii) at the election of the Employer, Qualified
Non-Elective Contributions and Qualified
Matching Contributions.
A Savings Contribution will be taken into account under
the Actual Deferral Percentage Test for a Plan Year only
if it relates to compensation that either would have been
received by the Employee in the Plan Year, but for the
deferral election, or is attributable to services
performed by the Employee in the Plan Year and would have
been received by the Employee within two and one-half
(2 1/2) months after the close of the Plan Year, but for
the deferral election. To compute Actual Deferral
Percentages, an Employee who would be a Participant but
for the failure to make Savings Contributions shall be
treated as a Participant on whose behalf no Savings
Contributions are made.
(B) Average Actual Deferral Percentage means the
average, expressed as a percentage, of the Actual
Deferral Percentages of the Eligible Participants in
a group.
(C) Eligible Participant means any Employee of the
Employer who is directly or indirectly eligible
under the Plan to have Savings Contributions (or
Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, if treated as
Savings Contributions for the Actual Deferral
Percentage Test) allocated to his or her Savings
Account for all or any portion of the Plan Year.
Eligible Participant includes an Employee whose
eligibility to make Savings Contributions has been
suspended because of an election (other than certain
one-time elections) not to participate, a
distribution, or a loan; and an Employee who cannot
defer because of Code Section 415 limitations.
(D) Qualified Non-Elective Contributions means
Employer Contributions, other than Savings
Contributions and Matching Contributions,
allocated to Participants' accounts which are 100%
Nonforfeitable at all times and which are subject to
the distribution restrictions described in Section
4.1(g). Employer Contributions are not 100%
Nonforfeitable at all times if the Employee has a
100% Nonforfeitable interest because of Years of
Service taken into account under a vesting schedule.
Any Employer Contributions allocated to a
Participant's Savings Account under the Plan
automatically satisfy the definition of Qualified
Non-Elective Contributions.
(E) Qualified Matching Contributions means Matching
Employer Contributions allocated to Participants'
accounts which are 100% Nonforfeitable at all
times and which are subject to the distribution
restrictions described in Section 4.1(g). Matching
Contributions are not 100% Nonforfeitable at all
times if the Employee has a 100% Nonforfeitable
interest because of Years of Service taken into
account under a vesting schedule. Any Matching
Contributions allocated to a Participant's Savings
Account under the Plan automatically satisfy the
definition of Qualified Matching Contributions.
(iii) Special Rules.
(A) For purposes of this Section, the Actual Deferral
Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year who is
eligible to have Savings Contributions (or Qualified
Non-Elective Contributions or Qualified Matching
Contributions, or both, if treated as Savings
Contributions for the Actual Deferral Percentage
Test) allocated to his or her account under two (2)
or more plans or arrangements described in Code
Section 401(k) that are maintained by the Employer
or a Related Employer shall be determined as if all
Savings Contributions (and, if applicable, Qualified
Non-Elective Contributions or Qualified Matching
Contribution, or both) were made under a single
arrangement. If a Highly Compensated Employee
participates in two (2) or more cash or deferred
arrangements that have different plan years, all
cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if
mandatorily disaggregated under applicable
Treasury regulations pursuant to Code Section
401(k).
(B) If this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4) or 410(b) only if
aggregated with one or more other plans, or if one
or more other plans satisfy the requirements of the
Code Sections only if aggregated with this Plan,
then this Section shall be applied by determining
the Actual Deferral Percentage of Employees as if
all such plans were a single plan. Plans may be
aggregated to satisfy Code Section 401(k) only if
they have the same Plan Year.
(C) To determine the Actual Deferral Percentage Test,
Savings Contributions, Qualified Non-Elective
Contributions, and Qualified Matching
Contributions must be made before the last day of
the twelve (12) month period immediately
following the Plan Year to which contributions
relate.
(D) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral
Percentage Test and the amount of Qualified Non-
Elective Contributions or Qualified Matching
Contributions, or both, used in the test.
(E) The determination and treatment of the Actual
Deferral Percentage amounts of any Participant
shall satisfy other requirements prescribed by
applicable Treasury regulations.
(iv) Fail-Safe Provisions. If the initial allocations of the
Savings Contributions do not satisfy one of the tests set
forth in paragraph (i) of this Subsection, the Administrator
shall adjust the accounts of the Participants pursuant to
one (1) or more of the following options:
(A) Distribution of Excess Contributions. If the
Committee determines that the initial allocations of
the Savings Contributions do not satisfy one of the
Actual Deferral Percentage Tests set forth in
paragraph (i) of this Subsection, the Administrator
must distribute the Excess Contributions, as
adjusted for allocable income, during the next Plan
Year. However, the Employer will incur an excise
tax equal to 10% of the amount of Excess
Contributions for a Plan Year not distributed to
the appropriate Highly Compensated Employees during
the first two and one-half (2 1/2) months of the
next Plan Year. The Excess Contributions are the
amount of Savings Contributions made at the
election of the Highly Compensated Employees
which causes the Plan to fail to satisfy the Actual
Deferral Percentage Test. The Administrator shall
make distributions to each Highly Compensated
Employee of his or her respective share of the
Excess Contributions pursuant to the following steps:
(1) The Administrator shall calculate total
Excess Contributions for the Highly
Compensated Employees.
(2) The Administrator shall calculate the total
dollar amount by which the Excess
Contributions for the Highly Compensated
Employees must be reduced in order to
satisfy the Average Deferral Percentage
Test.
(3) The Administrator shall calculate the total
dollar amount of the Excess Contributions
for each Highly Compensated Employee.
(4) The Administrator shall reduce the Excess
Contributions of the Highly Compensated
Employee(s) with the highest dollar amount
of Excess Contributions by refunding such
contributions to such Highly Compensated
Employee(s) in the amount required to cause
the dollar amount of such Highly
Compensated Employee(s)' Savings
Contributions to equal the dollar amount of
the Savings Contributions of the Highly
Compensated Employee(s) with the next
highest dollar amount of Savings
Contributions.
(5) If the total dollar amount distributed
pursuant to Step (4) above is less than the
total dollar amount of Excess Contributions,
Step (4) shall be applied to the Highly
Compensated Employee(s) with the next
highest dollar amount of Excess
Contributions until the total amount of
distributed Excess Contributions equals the
total dollar amount calculated in Step (2).
(6) When calculating the amount of a
distribution under Step (4), if a lesser
reduction, when added to any amounts
already distributed under this Section, would
equal the total amount of distributions
necessary to permit the Plan to satisfy the
requirements of paragraph (i) of this
Subsection, the lesser amount shall be
distributed from the Plan.
(B) Allocable Income. To determine the amount of the
corrective distribution required under this Section,
the Administrator must calculate the allocable
income for the Plan Year in which the Excess
Contributions arose. The income allocable to
Excess Contributions is equal to the sum of the
allocable gain or loss for the Plan Year.
(1) Method of Allocating Income. The
Administrator may use any reasonable
method for computing the income allocable
to Excess Contributions, provided that the
method does not violate Code Section
401(a)(4), is used consistently for all
Participants and for all corrective
distributions under the Plan for the Plan
Year, and is used by the Plan for allocating
income to Participants' Accounts.
(2) Alternative Method of Allocating Income.
A Plan may allocate income to Excess
Contributions by multiplying the income for
the Plan Year allocable to Savings
Contributions and amounts treated as
Savings Contributions by a fraction. The
numerator of the fraction is the Excess
Contributions for the Employee for the Plan
Year. The denominator of the fraction is
equal to the sum of:
(a) The total account balance of the
Employee attributable to Savings
Contributions and amounts treated as
Savings Contributions as of the
beginning of the Plan Year; plus
(b) The Employee's Savings Contributions,
and amounts treated as Savings
Contributions for the Plan Year.
(C) Recharacterization of Matching Contributions. A
portion of the Employer's Matching Contribution
shall be deemed a Savings Contribution for
purposes of paragraph (i) of this Subsection and for
vesting and withdrawal purposes. The portion shall
be equal to an amount necessary to satisfy one of
the tests set forth in paragraph (i) of this
Subsection, taking into account the Administrator's
action under any option herein and shall be
reallocated to the Savings Account. Reallocation
of the Employer's Matching Contribution shall be
made on behalf of Participants who are Non-Highly
Compensated Employees.
(D) Qualified Non-Elective and Qualified Matching
Contributions. The Employer shall make Qualified
Non-Elective Contributions or Qualified Matching
Contributions on behalf of Participants who are
Non-Highly Compensated Employees in an amount
sufficient to satisfy one of the tests set forth in
paragraph (i) of this Subsection, taking into
account the Administrator's action under any option
herein. These contributions shall be made in the
minimum amount of dollars required to satisfy the
requirements of paragraph (i) of this Subsection and
shall be allocated first to the lowest-paid such
Participant, subject to Section 5.6, and then to the
next lowest-paid Participant, subject to Section 5.6,
and thereafter in like manner in ascending order
until the limitations of paragraph (i) are met.
Such additional contributions shall be fully vested
and subject to the distribution restrictions of
Section 4.1(g) hereof, and must be made prior to
the last day of the twelve month period immediately
following the Year to which they relate.
The Qualified Non-Elective and Qualified Matching
Contributions may be treated as Savings Contributions
provided that each of the following requirements,
to the extent applicable, is satisfied:
(1) The amount of Employer Contributions,
including those Qualified Non-Elective
Contributions treated as Savings
Contributions for purposes of the Actual
Deferral Percentage Test, satisfies the
requirements of Code Section 401(a)(4).
(2) The amount of Employer Contributions,
excluding those Qualified Non-Elective
Contributions treated as Savings
Contributions for purposes of the Actual
Deferral Percentage Test and those
Qualified Non-Elective Contributions
treated as Matching Contributions under
Treasury Regulations Section 1.401(m)-1(b)(5)
for purposes of the Average Contribution
Percentage Test, satisfies the requirements of
Code Section 401(a)(4).
(3) The Matching Contributions, including
those Qualified Matching Contributions
treated as Savings Contributions for
purposes of the Actual Deferral Percentage
Test, satisfy the requirements of Code
Section 401(a)(4).
(4) The Matching Contributions, excluding
those Qualified Matching Contributions
treated as Savings Contributions for
purposes of the Actual Deferral Percentage
Test, satisfy the requirements of Code
Section 401(a)(4).
(5) The Qualified Non-Elective Contributions
and Qualified Matching Contributions
satisfy the requirements of Treasury
Regulations Section 1.401(k)-1(b)(4)(i) for
the Plan Year as if the contributions were
Savings Contributions.
(6) The plan that includes the cash or deferred
arrangement and the plan or plans to which
the Qualified Non-Elective Contributions
and Qualified Matching Contributions are
made could be aggregated for purposes of
Code Section 410(b).
(f) Wrap-Plan Provisions. Savings Contributions elected by
Participants who are Highly Compensated Employees may be prospectively limited
by the Committee without the Participant's consent if necessary to meet the
limits of Section 4.1(e). Any Participant in this Plan who is both a Highly
Compensated Employee and a Participant for the Plan Year in the FFE
Transportation Services, Inc. 401(k) Wrap Plan ("Highly Compensated Wrap Plan
Participant") may not elect to have Savings Contributions made on his behalf
by payroll deductions under this Plan during such Plan Year. In lieu of
Savings Contributions effected by payroll deductions on behalf of any Highly
Compensated Wrap Plan Participant, as soon as administratively feasible after
the end of a Plan Year, but in no event later than 2 1/2 months following the
end of that Plan Year, the Committee shall permit the transfer to the Plan of
all the Nonqualified Savings Contributions credited to the Nonqualified
Savings Account of each Highly Compensated Wrap Plan Participant in the FFE
Transportation Services, Inc. 401(k) Wrap Plan, but in no event shall an
amount be transferred that would cause this Plan to exceed the limitations
of Code Section 401(k)(3) set forth in Plan Section 4.1(e) for such Plan Year.
In determining the permitted transfer amounts, the Employers may authorize a
Qualified Non-Elective Contribution or Qualified Matching Contribution to be
made for such year, and allocated as provided in Section 4.1(e)(iv)c.
(g) Restrictions on Distributions. Subject to the following
limitations, amounts held in the Participant's Savings Account may not be
distributable prior to the earliest of:
(i) separation from Service, total and permanent disability
or death;
(ii) attainment of age fifty-nine and one-half (59 1/2) years;
(iii) Plan termination without establishment of another defined
contribution plan, other than an employee stock ownership
plan (as defined in Code Sections 4975(e) or 409) or a
simplified employee pension plan as defined in Code
Section 408(k);
(iv) disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning of
Code Section 409(d)(2)) used in a trade or business of
the corporation, if the corporation continues to maintain
this Plan after the disposition, but only with respect to
Employees who continue employment with the corporation
acquiring the assets;
(v) disposition by a corporation to an unrelated entity of the
corporation's interest in a subsidiary (within the meaning
of Code Section 409(d)(3)) if the corporation continues
to maintain this Plan, but only with respect to Employees
who continue employment with the subsidiary; or
(vi) proven financial hardship, subject to the limitations set
forth in Article 10.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and Participant
consent requirements, if applicable, of Code Sections 401(a)(11) and 417. In
addition, distributions that are triggered by one of the preceding events
enumerated as (iii), (iv), (v), or (vi) must be made in a lump sum
distribution.
Section 4.4 Employer Contributions.
(a) Matching Employer Contributions. In addition to the total amount
of Savings Contributions elected for each month pursuant to
Section 4.1, but subject to the limits of Section 4.2(c), each
Employer shall, as a Matching Employer Contribution to the Plan,
pay to the Trustee for each calendar quarter an amount equal to
100% of each Participant's Savings Contributions for each payroll
period pursuant to Section 4.1 hereof which does not exceed four
percent (4%) of his Compensation for such payroll period.
Effective November 1, 2001, Section 4.2(a) reads as follows.
(a) Matching Employer Contributions. In addition to the total
amount of Savings Contributions elected for each month pursuant
to Section 4.1, but subject to the limits of Section 4.2(c),
each Employer shall, as a Matching Employer Contribution to the
Plan, pay to the Trustee for each calendar quarter an amount
equal to fifty percent (50%) of each Participant's Savings
Contributions for each payroll period pursuant to Section 4.1
hereof which does not exceed four percent (4%) of his
Compensation for such payroll period. Matching Employer
Contributions shall be made in Company Stock in accordance with
the closing market price on the business day immediately
preceding the day such Contributions are made. In accordance
with Section 7.2(a), such Contributions may be re-invested by
the Trustee in accordance with Participant direction.
(b) Qualified Non-Elective Contributions and Qualified Matching
Contributions.
(i) General. The Employer may, in its discretion, make
Qualified Non-Elective Contributions and/or Qualified
Matching Contributions to the Plan from time to time. Any
Qualified Non-Elective Contributions made pursuant to this
Section 4.2(b)(i) shall be treated as a Savings Contribution
for purposes of Section 4.1(e)(i) and shall be allocated as
provided in Section 4.1(e)(iv)(C). Any Qualified Matching
Contributions made pursuant to this Section shall be treated
as a Matching Employer Contribution for purposes of
Section 4.2(c)(i) and shall be allocated as provided in
Section 4.2(c)(iv)(C).
(ii) Incentive Contributions. FFE Transportation Services, Inc.
shall make Qualified Non-Elective Contributions to the
Plan as provided pursuant to the terms of the FFE
Transportation Services, Inc. 1994 Incentive Bonus Plan.
Contributions under this Section 4.2(b)(ii) shall be treated
as Savings Contributions for purposes of Plan Section
4.1(e)(i) and shall be contributed to the Plan on an annual
basis.
(c) Limitations on Matching Employer Contributions.
(i) Average Contribution Percentage Test. The annual
allocation derived from Matching Contributions and
Qualified Matching Contributions to a Participant's
Individual Account shall satisfy one of the following tests:
(A) The Average Contribution Percentage for
Participants who are Eligible Highly Compensated
Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Participants
who are Eligible Non-Highly Compensated
Employees for the current Plan Year multiplied by
1.25; or
(B) The Average Contribution Percentage for
Participants who are Eligible Highly Compensated
Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Participants
who are Eligible Non-Highly Compensated
Employees for the current Plan Year multiplied by
two (2); provided that the Average Contribution
Percentage for Participants who are Eligible Highly
Compensated Employees for the Plan Year does not
exceed the Average Contribution Percentage for
Participants who are Eligible Non-Highly
Compensated Employees for the current Plan Year
by more than two (2) percentage points or the
amount prescribed in applicable Treasury
regulations to prevent the multiple use of this
alternative limitation for any Highly Compensated
Employee.
(ii) Definitions.
(A) Aggregate Limit means the greater of (1) or (2),
described as follows:
(1) The sum of:
(a) 1.25 multiplied by the greater of the
Actual Deferral Percentage or the
Average Contribution Percentage for
Participants who are Eligible Non-Highly
Compensated Employees, and
(b) Two (2) percentage points plus the
lesser of Actual Deferral Percentage
or the Average Contribution
Percentage of Participants who are
Eligible Non-Highly Compensated
Employees. (In no event shall this
amount exceed twice the lesser of the
Actual Deferral Percentage or
Average Contribution Percentage of
Participants who are Eligible Non-
Highly Compensated Employees).
(2) The sum of:
(a) 1.25 multiplied by the lesser of the
Actual Deferral Percentage or the
Average Contribution Percentage of
Participants who are Eligible Non-Highly
Compensated Employees, and
(b) Two (2) percentage points plus the
greater of Actual Deferral Percentage
or the Average Contribution
Percentage of Participants who are
Eligible Non-Highly Compensated
Employees. (In no event shall this
amount exceed twice the greater of
the Actual Deferral Percentage or
Average Contribution Percentage of
Participants who are Eligible Non-Highly
Compensated Employees).
(B) Average Contribution Percentage means the
average, expressed as a percentage, of the
Contribution Percentages of the Eligible
Participants in a group.
(C) Contribution Percentage means the ratio,
expressed as a percentage, of the sum of the
Matching Contributions and Qualified Matching
Contributions, if any, under the Plan on behalf of
the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation for the Plan
Year.
(D) Contribution Percentage Amounts means the sum of
the Matching Contributions and Qualified Matching
Contributions, to the extent not taken into account
for purposes of the Actual Deferral Percentage Test,
made under the Plan on behalf of the Participant for
the Plan Year. Contribution Percentage Amounts
shall include Forfeitures of Excess Aggregate
Contributions or Matching Contributions allocated
to the Participant's Account that shall be taken into
account in the year in which the Forfeiture is
allocated. Notwithstanding the foregoing,
Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because
the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess
Aggregate Contributions. The Employer may
include Qualified Non-Elective Contributions in the
Contribution Percentage Amounts. The Employer
also may elect to use Savings Contributions in the
Contribution Percentage Amount if the Actual
Deferral Percentage Test is met before the Savings
Contributions are used in the Average Contribution
Percentage Test and continues to be met following
the exclusion of those Savings Contributions that
are used to meet the Average Contribution
Percentage Test. In the case of an Eligible
Participant who makes no Savings Contributions
and receives no Matching Contributions, the
Contribution Percentage Amount shall be zero.
(E) Eligible Participant means any Employee who is
eligible to make a Savings Contribution, if the
Employer takes the contributions into account in
calculating the Contribution Percentage, or to
receive a Matching Contribution, including
Forfeitures, or a Qualified Matching Contribution.
(F) Matching Contribution means an Employer
Contribution made to this or any other defined
contribution plan on behalf of a Participant on
account of a Savings Contribution made by the
Participant, or on account of a Participant's election
to defer a portion of his or her Compensation under
a plan maintained by the Employer.
(G) Qualified Non-Elective Contributions means
Employer Contributions, other than Savings
Contributions and Matching Contributions,
allocated to Participants' accounts which are 100%
Nonforfeitable at all times and which are subject to
the distribution restrictions described in Section
4.1(g). Employer Contributions are not 100%
Nonforfeitable at all times if the Employee has a
100% Nonforfeitable interest because of Years of
Service taken into account under a vesting schedule.
Any Employer Contributions allocated to a
Participant's Savings Account under the Plan
automatically satisfy the definition of Qualified
Non-Elective Contributions.
(H) Qualified Matching Contributions means Matching
Employer Contributions allocated to Participants'
accounts which are 100% Nonforfeitable at all
times and which are subject to the distribution
restrictions described in Section 4.1(g). Matching
Contributions are not 100% Nonforfeitable at all
times if the Employee has a 100% Nonforfeitable
interest because of Years of Service taken into
account under a vesting schedule. Any Matching
Contributions allocated to a Participant's Savings
Account under the Plan automatically satisfy the
definition of Qualified Matching Contributions.
(iii) Special Rules
(A) Multiple Use. If one or more Highly Compensated
Employees participate in both a cash or deferred
arrangement subject to Code Section 401(k) and a
plan maintained by the Employer subject to Code
Section 401(m) and the sum of the Actual Deferral
Percentage and Average Contribution Percentage of
those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit,
then the Average Contribution Percentage of those
Highly Compensated Employees who also
participate in a cash or deferred arrangement will be
reduced in the manner described in Section 4.1(e)
so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's
Contribution Percentage Amount is reduced shall be
treated as an Excess Aggregate Contribution. The
Actual Deferral Percentage and Average
Contribution Percentage of the Highly
Compensated Employees are determined after:
(1) use of Qualified Non-Elective Contributions
and Qualified Matching Contributions to
meet the Actual Deferral Percentage Test;
(2) use of Qualified Non-Elective Contributions
and Elective Contributions to meet the
Actual Deferral Percentage Test;
(3) any corrective distribution or forfeiture of
Excess Deferrals, Excess Contributions or
Excess Aggregate Contributions; and
(4) after any recharacterization of Excess
Contributions required without regard to
multiple use of the alternative limitation;
and are deemed to be the maximum permitted under
such tests for the Plan Year.
Multiple use occurs if the Actual Deferral Percentage and
Average Contribution Percentage of the Highly Compensated
Employees exceeds the Aggregate Limit. For purposes of
this Section, the "Aggregate Limit" is the greater of:
(1) the sum of (i) 1.25 times the greater of the
relevant actual deferral percentage or the
relevant actual contribution percentage, and
(ii) two percentage points plus the lesser of
the relevant actual deferral percentage or the
relevant actual contribution percentage;
provided, however, that this amount may not
exceed twice the lesser of the relevant actual
deferral percentage or the relevant actual
contribution percentage; or
(2) the sum of (i) 1.25 times the lesser of the
relevant actual deferral percentage or the
relevant actual contribution percentage, and
(ii) two percentage points plus the greater of
the relevant actual deferral percentage or the
relevant actual contribution percentage;
provided, however, that this amount may not
exceed twice the greater of the relevant
actual deferral percentage or the relevant
actual contribution percentage.
For purposes of the preceding sentence, the "relevant"
actual deferral percentage and actual contribution
percentage is the actual deferral percentage and
actual contribution percentage of the Non-Highly
Compensated Employees.
(B) For purposes of this Section, the Contribution
Percentage for any Participant who is an Eligible
Highly Compensated Employee for the Plan Year
who is eligible to have Contribution Percentage
Amounts allocated under two (2) or more plans
described in Code Section 401(a) or arrangements
described in Code Section 401(k) that are
maintained by the Employer or a Related Employer
shall be determined as if the total of the
Contribution Percentage Amounts were made under
each plan. If a Highly Compensated Employee
participates in two (2) or more cash or deferred
arrangements that have different plan years, all cash
or deferred arrangements ending with or within the
same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if
mandatorily disaggregated under regulations
pursuant to Code Section 401(m).
(C) If this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4) or 410(b) only if
aggregated with one (1) or more other plans, or if
one (1) or more other plans satisfy the requirements
of the Code Sections only if aggregated with this
Plan, then this Section shall be applied by
determining the Contribution Percentages of
Eligible Participants as if all such plans were a
single plan.
(D) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Average
Contribution Percentage Test.
(E) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy other
requirements prescribed by applicable Treasury
regulations.
(iv) Fail Safe Provisions. If the initial allocations of the
Matching Employer Contributions do not satisfy one of the
tests set forth in paragraph (i) of this Section, the
Administrator shall adjust the accounts of the Participants
pursuant to one (1) or more of the following options:
(A) Distribution of Excess Aggregate Contributions.
The Administrator will determine Excess Aggregate
Contributions after determining Excess Elective
Deferrals under Section 4.1(d) and Excess
Contributions under Section 4.1(e). If the
Administrator determines that the Plan fails to
satisfy the Average Contribution Percentage Test
for a Plan Year, it must distribute the Excess
Aggregate Contributions, as adjusted for allocable
income, during the next Plan Year. However, the
Employer will incur an excise tax equal to 10% of
the amount of Excess Aggregate Contributions for a
Plan Year not distributed to the appropriate Highly
Compensated Employees during the first two and
one-half (2 1/2) months of the next Plan Year. The
Excess Aggregate Contributions are the amount of
aggregate contributions allocated on behalf of the
Highly Compensated Employees which causes the
Plan to fail to satisfy the Average Contribution
Percentage Test. The Administrator shall make
distributions to each Highly Compensated
Employee of his or her respective share of the
Excess Aggregate Contributions in accordance with
the following steps:
(1) The Administrator shall calculate total
Excess Aggregate Contributions for the
Highly Compensated Employees.
(2) The Administrator shall calculate the total
dollar amount by which the Excess
Aggregate Contributions for the Highly
Compensated Employees must be reduced in
order to satisfy the Average Contribution
Percentage Test.
(3) The Administrator shall calculate the total
dollar amount of the Excess Aggregate
Contributions for each Highly Compensated
Employee.
(4) The Administrator shall reduce the Excess
Aggregate Contributions of the Highly
Compensated Employee(s) with the highest
dollar amount of Excess Aggregate
Contributions by refunding such
contributions to such Highly Compensated
Employee(s) in the amount required to cause
the dollar amount of such Highly
Compensated Employee(s)' Matching
Employer Contributions to equal the dollar
amount of the Matching Employer
Contributions of the Highly Compensated
Employee(s) with the next highest dollar
amount of such contributions.
(5) If the total dollar amount distributed
pursuant to Step (4) above is less than the
total dollar amount of Excess Aggregate
Contributions, Step (4) shall be applied to
the Highly Compensated Employee(s) with
the next highest dollar amount of Excess
Aggregate Contributions until the total
amount of distributed Excess Aggregate
Contributions equals the total dollar amount
calculated in Step (2).
(6) When calculating the amount of a
distribution under Step (4), if a lesser
reduction, when added to any amounts
already distributed under this Section, would
equal the total amount of distributions
necessary to permit the Plan to satisfy the
requirements of Section 4.2c(i), the lesser
amount shall be distributed from the Plan.
(B) Allocable Income. To determine the amount of the
corrective distribution required under this Section,
the Administrator must calculate the allocable
income for the Plan Year in which the Excess
Aggregate Contributions arose. The income
allocable to Excess Aggregate Contributions is
equal to the sum of the allocable gain or loss for the
Plan Year.
(1) Method of Allocating Income. The
Administrator may use any reasonable
method for computing the income allocable
to Excess Aggregate Contributions,
provided that the method does not violate
Code Section 401(a)(4), is used consistently
for all Participants and for all corrective
distributions under the Plan for the Plan
Year, and is used by the Plan for allocating
income to Participants' Accounts.
(2) Alternative Method of Allocating Income.
A Plan may allocate income to Excess
Aggregate Contributions by multiplying the
income for the Plan Year allocable to
Matching Contributions and amounts treated
as Matching Contributions by a fraction.
The numerator of the fraction is the Excess
Aggregate Contributions for the Employee
for the Plan Year. The denominator of the
fraction is equal to the sum of:
(a) The total account balance of the
Employee attributable to Matching
Contributions and amounts treated as
Matching Contributions as of the
beginning of the Plan Year; plus
(b) The Matching Contributions and
amounts treated as Matching
Contributions for the Plan Year.
(C) Characterization of Excess Aggregate Contributions.
The Administrator will treat a Highly Compensated
Employee's allocable share of Excess Aggregate
Contributions in the following priority:
(i) first as attributable to his or her Matching
Contributions allocable with respect to Excess
Contributions determined under the Actual
Deferral Percentage Test described in Section
4.1(e);
(ii) then on a pro rata basis to Matching
Contributions and to the Savings Contributions
relating to those Matching Contributions which
the Administrator has included in the Average
Contribution Percentage Test;
(iii) then on a pro rata basis to Savings
Contributions which are mandatory
contributions, if any, and to the Matching
Contributions allocated on the basis of those
mandatory contributions; and
(iv) last to Qualified Non-Elective Contributions
used in the Average Contribution Percentage
Test. To the extent the Highly Compensated
Employee's Excess Aggregate Contributions are
attributable to Matching Contributions, and
he or she is not 100% vested in the Account
Balance attributable to Matching Contributions,
the Administrator will distribute only the
vested portion and forfeit the nonvested
portion. The vested portion of the Highly
Compensated Employee's Excess Aggregate
Contributions attributable to Matching
Employer Contributions is the total amount of
the Excess Aggregate Contributions (as
adjusted for allocable income) multiplied by
his or her vested percentage (determined as
of the last day of the Plan Year for
which the Employer made the Matching
Contribution).
(D) Qualified Non-Elective and Qualified Matching
Contributions. The Employer shall make Qualified
Non-Elective Contributions or Qualified Matching
Contributions that, in combination with Matching
Contributions, satisfy one of the tests set forth in
paragraph (i) of this Subsection, taking into account
the Administrator's action under any option herein.
Any such contribution shall be treated as a Participant
Savings Contribution and shall be allocated to the
Account of each Participant. The total of these
contributions shall be at least equal to the amount
necessary to satisfy the requirements of paragraph
(i) of this Subsection and shall be allocated first to
the lowest-paid such Participant, subject to Section
5.6, and then to the next lowest-paid Participant,
subject to Section 5.6, and thereafter in like manner
in ascending order until the limitations of paragraph
(i) are met. Such additional contributions shall be
fully vested and subject to the distribution
restrictions of Section 4.1(g) hereof, and must be
made prior to the last day of the twelve month
period immediately following the Year to which
they relate. The Qualified Non-Elective and
Qualified Matching Contributions may be treated as
Matching Contributions provided that each of the
following requirements, to the extent applicable, is
satisfied:
(1) The amount of Employer Contributions,
including those Qualified Non-Elective and
Qualified Matching Contributions treated as
Matching Contributions for purposes of the
Average Contribution Percentage Test,
satisfies the requirements of Code Section
401(a)(4).
(2) The amount of Employer Contributions,
excluding those Qualified Non-Elective
Contributions and Qualified Matching
treated as Matching Contributions for
purposes of the Average Contribution
Percentage Test and those Qualified Non-
Elective Contributions treated as Elective
and Qualified Matching Contributions under
Treasury Regulations Section 1.401(k)-
1(b)(5) for purposes of the Actual Deferral
Percentage Test, satisfies the requirements
of Code Section 401(a)(4).
(3) The Savings Contributions, including those
treated as Qualified Matching Contributions
for purposes of the Average Contribution
Percentage Test, satisfy the requirements of
Code Section 401(k)(3) for the Plan Year.
(4) The Qualified Non-Elective and Qualified
Matching Contributions are allocated to the
Employee under the Plan as of a date within
the Plan Year, and the Savings
Contributions satisfy the requirements of
Treasury Regulations Section 1.401(k)-
1(b)(4)(i) for the Plan Year.
(5) The plan that takes Qualified Non-Elective
Contributions and Qualified Matching
Contributions into account in determining
whether Savings and Matching
Contributions satisfy the requirements of
Code Section 401(m)(2)(A), and the plans to
which the Qualified Non-Elective
Contributions and Qualified Matching
Contributions are made, are or could be
aggregated for purposes of Code Section
410(b).
(E) Forfeiture of Non-Vested Matching Employer
Contributions. Matching Employer Contributions
that are not vested may be forfeited to correct
Excess Aggregate Contributions. Notwithstanding
the foregoing sentence, Excess Aggregate
Contributions for a Plan Year may not remain
unallocated or be allocated to a suspense account
for allocation to one or more Employees in any
future year. Forfeitures of Matching Contributions
to correct Excess Aggregate Contributions shall be
applied to reduce the Employers' Matching
Employer Contributions for the Plan Year in which
the excess arose.
(d) Notwithstanding the foregoing provisions of this Section 4.2 the
Employer Contribution specified therein shall be limited by and in
no event shall exceed the following limits:
(i) The total amount deductible by such Employer under Code
Section 404; or
(ii) The maximum amount that may be allocated to a particular
Participant's Accounts under the annual additions limit of
Section 5.6 (and, if applicable, Article 12).
Section 4.5 Discretionary Employer Contributions.
For each Plan Year, the amount of the Discretionary Employer
Contribution to the Trust Fund will equal the amount, if any, the Employer may
from time to time determine and authorize. Although the Employer may
contribute to this Plan whether or not it has net profits, the Employer intends
the Plan to be a profit sharing plan, including a qualified cash or deferred
arrangement, and an employee stock ownership plan, for all purposes of the
Code. The Employer shall not authorize contributions at such times or in such
amounts that the Plan in operation discriminates in favor of Highly
Compensated Employees. Notwithstanding the foregoing, the Discretionary
Employer Contribution for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under Code Section 404. The
Discretionary Employer Contributions shall be allocated to the Participants'
Discretionary Employer Contribution Accounts under the formula provided in
Section 5.4.
Section 4.6 Payment of Employer Contributions.
(a) Matching Employer Contributions shall be paid to the Trustee
as soon as administratively feasible following the payroll period to
which they relate. Notwithstanding the preceding sentence, Employer
Contributions shall be paid to the Trustee no later than the date prescribed
by law for filing such Employer's federal income tax return for its taxable
year ending with or within the Plan Year for which such contribution is made,
including extensions which have been granted for the filing of such tax
return. The Trustee shall hold all such Employer Contributions
subject to the provisions of the Plan and Trust Agreement, and no
part of such contributions shall be used for, or diverted to, any
purpose other than those specified in the Plan and Trust
Agreement.
(b) Notwithstanding anything to the contrary contained herein, an
Employer Contribution for a Plan Year may be returned to the
Employer to the extent that the amount of such contribution
exceeds the amount that such Employer would have contributed
for such Plan Year but for (i) a good faith mistake of fact made in
determining the amount of such contribution or (ii) a good faith
mistake in determining that the contribution made would be
deductible under Code Section 404.
The return of a portion of an Employer Contribution shall be subject to
the following conditions: (i) earnings attributable to the amount to be
returned may not be distributed to the Employer but losses attributable
thereto must reduce the amount to be returned; (ii) the amount to be returned
shall be limited so as to avoid reducing the balance in the Participant's
Discretionary Employer Contribution Account and Matching Employer Contribution
Account to less than the balance which would have been in such account if the
amount attributable to such mistake had not been contributed; (iii) the return
of an amount attributable to a mistake of fact may only be made within one
year after such amount was paid to the Trustee; and (iv) the return of an
amount attributable to a mistake in determining such deductibility may only
be made within one year after the disallowance of such deduction. Except as
provided in the preceding sentence, an appropriate adjustment shall be made
in the Participant's Discretionary Employer Contribution Account and
Matching Employer Contribution Account, if any, to reflect the return of a
portion of an Employer Contribution.
Section 4.7 Rollover Contributions
(a) Upon approval by the Committee, an Employee who has received
an eligible rollover distribution, as defined in Code Section
402(c)(4) may contribute such eligible rollover distribution to a
Rollover Account under the Plan. An Employee may also transfer
to a Rollover Account under the Plan (upon Committee approval)
an eligible rollover distribution from an individual retirement
account or from an individual retirement annuity, but only if such
distribution or proceeds qualify for tax-free rollovers under Code
Section 408(d)(3)(A)(ii). In addition, the Plan will accept (upon
Committee approval) direct trustee-to-trustee transfers from
another qualified plan or a Code Section 403(b) annuity and will
account for such transfers separately from any other Rollover
Account. Notwithstanding the foregoing, in no event shall an
eligible rollover distribution be contributed to an ESOP Account
under the Plan.
(b) Any contribution under this Section 4.5 shall be treated as the
contribution of a "Rollover Amount" and, except in the case of
trustee-to-trustee transfers, shall be subject to the following
requirements and conditions:
(i) The Employee must transfer the Rollover Amount or cause
to be transferred such amount to the Committee for
delivery to the Trustee or, if the Committee directs, to the
Trustee, in time for the Trustee to receive such amount on
or before the 60th day after the day on which such amount
was received by the Employee.
(ii) The Employee must furnish such evidence as the
Committee may require that such Rollover Amount
includes all of (and does not include anything other than)
the amount required to be transferred by Code Section
402c(4) or 408(d)(3)(A)(ii), as appropriate.
(c) The Committee shall not deliver or cause the delivery of any
Rollover Amount to the Trustee prior to its receipt of such
evidence as may be required by it pursuant to Section 4.5(b) and,
except in the case of trustee-to-trustee transfers, shall not deliver or
cause the delivery of any Rollover Amount to the Trustee if such
Rollover Amount would not be received by the Trustee on or
before the 60th day after the day on which such amount was
received by the Employee who wishes to transfer such amount to
the Plan.
(d) An Employee shall be eligible to transfer amounts to a Rollover
Account pursuant to this Section 4.5 notwithstanding the
provisions of Article 3 hereof.
(e) An Employee who establishes and maintains a Rollover Account
or Accounts shall be deemed to be a Participant under the Plan
notwithstanding the provisions of Article 3, but no such Employee
shall be entitled to share in any Employer Contributions or elect
Savings Contributions unless he is otherwise participating under
Article 3.
(f) Fees and expenses of the Trustee attributable to the maintenance of
Rollover Accounts shall be paid as provided in Section 16.7.
(g) Articles 6, 8, and 11 shall govern the time and method of payment
from an Employee's Rollover Accounts.
Section 4.8 Special Rules under USERRA.
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
* * * * * * *
ARTICLE FIVE
------------
ALLOCATIONS
Section 5.3 Accounts.
The Committee shall maintain or cause to be maintained adequate records
to disclose the interest in the Trust of each Participant, Former Participant,
and Beneficiary. Such records shall be in the form of individual accounts,
and credits and charges shall be made to such accounts in the manner herein
described. When appropriate, a Participant shall have, as separate accounts,
a Matching Employer Contribution Account, a Discretionary Employer Contribution
Account, a Rollover Account, a Savings Account, a W & B Plan Rollover Account,
an ESOP Transfer Account, and an ESOP Rollover Account. The maintenance of
separate accounts is only for accounting purposes, and a segregation of the
Trust Assets to each account shall not be required. Each Account shall reflect
its allocable share of income, loss, appreciation, and depreciation of the
Trust Assets. Distributions made from an Account shall be charged to such
Account as of the Valuation Date on which the distribution is made.
Section 5.4 Allocation of Income and Expense.
(a) Except as otherwise provided in Section 7.3(a), income of the
Trust Assets shall be allocated as of each Valuation Date to the
Accounts that generated such income.
(b) Except as otherwise provided by Sections 7.3(b) and 16.7,
expenses paid from the Trust Assets and not reimbursed by an
Employer shall be allocated as of each Valuation Date to the
Accounts of Participants, Former Participants and Beneficiaries
who had undistributed balances in their Accounts on such last
preceding Valuation Date in proportion to the balances in such
Accounts on such date, but after first reducing each such account
balance by any distributions from the account since such last
preceding Valuation Date.
(c) cUpon instruction from the Committee, the Trustee shall
distribute to each Participant with an ESOP Account, in cash, all or
a portion of the dividends paid to the Plan with respect to
Company Stock held by the Plan and allocated to ESOP Accounts,
within ninety (90) days after the close of the Plan Year in which
such dividends are paid. The dividends, if distributed in
accordance with this Section, shall be paid out as if each
Participant directly owned the numbers of shares of Company
Stock allocated to the Participant's ESOP Accounts (including
fractional shares so allocated), as of the Accounting Date
corresponding with, or if none, next following the record date for
such dividend declaration. Such dividend payments shall not be
considered to be distributions under the Plan.
Section 5.5 Allocation of Savings Contributions.
Savings Contributions elected by a Participant during any calendar month
shall be credited and allocated to his Savings Account no later than the
fifteenth (15th) business day of the month following the month such Savings
Contributions are effected by payroll deduction.
Section 5.6 Allocation of Employer Contributions.
(a) Matching Employer Contributions. Each Participant who is a
Participant during a payroll period is entitled to share in the
Matching Employer Contribution for such payroll period. Subject
to Section 5.6, the Committee shall instruct the Trustee to allocate
the portion of the Matching Employer Contribution for each
payroll period to the Matching Employer Contribution Account of
each Participant or Former Participant for whom Savings
Contributions were made during such payroll period pursuant to
Section 4.2(a).
(b) Discretionary Employer Contributions. Each Participant who is
employed on the last business day of the Plan Year is entitled to
share in the allocation of Discretionary Employer Contributions, if
any, for such Plan Year. The Committee shall allocate the
Discretionary Employer Contributions, if any, to each eligible
Participant's Discretionary Employer Contribution Account in the
same ratio that each Participant's Annual Compensation for the
Plan Year bears to the total Annual Compensation of all
Participants for such Plan Year. Notwithstanding the preceding, a
Former Participant who would have been a Participant on the last
business day of the Plan Year but for his death, Disability, Early
Retirement, or Retirement during the Plan Year shall be entitled to
share in the allocation of the Discretionary Contributions, if any, for
such Plan Year.
(c) Qualified Non-Elective Contributions and Qualified Matching
Contributions. Each Participant who is a Non-Highly
Compensated Employee and who is a Participant on the last
business day of the Plan Year and each Former Participant who is a
Non-Highly Compensated Employee and who would have been a
Participant on the last business day of the Plan Year but for his
death, Disability, Early Retirement, or Retirement during the Plan
Year, is entitled to share in the allocation of Qualified Non-
Elective Contributions and/or Qualified Matching Contributions, if
any, for such Plan Year. Such contributions shall be allocated
pursuant to the provisions of Section 4.2(b)(i).
(d) Incentive Contributions. Each Participant who is entitled to
receive an allocation of Incentive Contributions under the terms of
the FFE Transportation Services, Inc. 1994 Incentive Bonus Plan
(the "Incentive Plan") shall receive an allocation of such amounts
under this Plan. The Committee shall allocate the Incentive
Contributions, if any, to each eligible Participant's Savings
Account in the manner provided by the terms of the Incentive Plan.
Section 5.7 Forfeitures.
Amounts forfeited pursuant to Sections 5.6 or 6.3 shall be used to pay
Plan expenses in the Plan Year in which they are forfeited. To the extent
such Forfeitures exceed Plan expenses in such Plan Year, they shall be used to
reduce the Matching Employer Contributions to the Plan under Section 4.2(a)
during the subsequent Plan Year, unless the Employer directs that such
Forfeitures are to be used to reduce the Matching Employer Contributions to
the Plan under Section 4.2(a) during the Plan Year in which they are
forfeited.
Section 5.8 Maximum Additions.
(a) Defined Contribution Plan Limits. The amount of Annual
Additions that the Committee may allocate under this Plan on a Participant's
behalf for a Limitation Year may not exceed the Maximum Permissible Amount.
If the amount the Employer otherwise would contribute to the Participant's
Account would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the Employer will reduce the amount of its
contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer Contributions
pursuant to Section 5.4 would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 5.6(c))
to the Participant's Account, the Committee will reallocate the Excess Amount
to the remaining Participants who are eligible for an allocation of Employer
Contributions for the Plan Year in which the Limitation Year ends. The
Committee will make this reallocation on the basis of the allocation method
under the Plan as if the Participant whose Individual Account otherwise would
receive the Excess Amount is not eligible for an allocation of Employer
Contributions.
(b) Estimation. Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated Compensation
defined in Section 5.6(e) for the Limitation Year. The Committee must make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Committee must reduce any Employer Contributions
(including any allocation of Forfeitures) based on estimated Compensation by
any Excess Amounts carried over from prior years. As soon as administratively
feasible after the end of the Limitation Year, the Committee will determine
the Maximum Permissible Amount for the Limitation Year based on the
Participant's actual Compensation for the Limitation Year.
(c) Disposition of Excess Amount. If, pursuant to Section 5.6(b) or
because of an allocation of Forfeitures, there is an Excess Amount attributable
to a Participant for a Limitation Year, then the Committee will dispose of
the Excess Amount as follows:
(i) The Committee shall return any nondeductible Participant
voluntary after tax contributions to the Participant to the
extent that the return would reduce the Excess Amount.
(ii) If, after the application of clause (i) an Excess Amount still
exists, and the Plan covers the Participant at the end of the
Limitation Year, then the Committee will use the Excess
Amounts to reduce future Employer Contributions
(including any allocation of Forfeitures) under the Plan for
the next Limitation Year and for each succeeding
Limitation Year, as is necessary, for the Participant. The
Participant may elect to limit Compensation for allocation
purposes to the extent necessary to reduce the allocation for
the Limitation Year to the Maximum Permissible Amount
and eliminate the Excess Amount.
(iii) If, after the application of clause (i) an Excess Amount still
exists and the Plan does not cover the Participant at the end
of the Limitation Year, then the Committee shall hold the
Excess Amount in a suspense account and use the Excess
Amount to reduce Employer Contributions on behalf of
remaining Participants and shall allocate and reallocate to
the Individual Accounts of remaining Participants in
succeeding Limitation Years to the extent permissible
under the foregoing limitations, prior to any further Annual
Additions to the Plan. If the Plan should be terminated or
contributions should be completely discontinued, the funds
in the suspense account will be allocated to the extent not
prohibited by Code Section 415. Any suspense account
shall not be adjusted for investment gains or losses of the
Trust Fund.
(iv) The Committee will not distribute any Excess Amount(s) to
Participants or to Former Participants.
(v) Notwithstanding the first sentence and the foregoing
paragraphs (i), (ii), (iii), and (iv), the Committee may
distribute Elective Deferrals (within the meaning of Code
Section 402(g)(3)) or return voluntary or mandatory
Employee Contributions, to the extent the distribution or
return would reduce the excess amounts in the Participant's
account.
(d) Multiple Defined Contribution Plan Limits. If the Employer
maintains any other qualified defined contribution plan, the amount of the
Annual Addition which may be allocated to a Participant's Individual Account
in this Plan shall not exceed the Maximum Permissible Amount, reduced by the
amount of Annual Additions to such Participant's accounts for the same
Limitation Year in the other plan(s). The Excess Amount attributed to this
Plan equals the product of:
(i) the total Excess Amount allocated as of such date
(including any amount the Committee would have allocated
but for the limitations of Code Section 415), multiplied by
(ii) the ratio of:
(A) the amount allocated to the Participant as of such
date under this Plan, divided by
(B) the total amount allocated as of such date under all
qualified defined contribution plans (determined
without regard to the limitations of Code Section 415).
(e) Definitions. For purposes of the limitations of Code Section 415
set forth in this Section, the following definitions shall apply:
(i) Annual Additions means the sum of the following amounts
allocated on behalf of a Participant for a Limitation Year:
(A) all Employer Contributions;
(B) all Forfeitures;
(C) call Employee Contributions;
(D) excess contributions described in Code Section
401(k) and excess aggregate contributions described
in Code Section 401(m), irrespective of whether the
Plan distributes or forfeits such Excess Amounts,
and excess deferrals described in Code Section
402(g), unless the excess deferrals are distributed no
later than the first April 15 following the close of
the Participant's taxable year;
(E) excess Amounts reapplied to reduce Employer
Contributions under this Section 5.6;
(F) amounts allocated after March 31, 1984 to an
individual medical account, as defined in Code
Section 415(l)(2), included as part of a pension or
annuity plan maintained by the Employer;
(G) contributions paid or accrued after December 31,
1985, in taxable years ending after that date, which
are attributable to post-retirement medical benefits
allocated to the separate account of a Key Employee
as defined in Code Section 419A(d)(3), under a
welfare benefit fund, as described in Code Section
419(e), maintained by the Employer; and
(H) allocations under a simplified employee pension plan.
(ii) Compensation means the total amount of salary, wages,
commissions, bonuses and overtime, paid or otherwise
includable in the gross income of a Participant during the
Limitation Year plus, effective January 1, 1998, any
amounts excluded from income pursuant to Code Sections
125 and 401(k) and, effective January 1, 2001, Code
Section 132(f), but excluding:
(A) Employer contributions to any deferred
compensation plan (to the extent the contributions
are not included in the Participant's gross income
for the taxable year in which contributed) or
simplified employee pension under Code Section
408(k) (to the extent the contributions are
excludable from the Participant's gross income)
(effective January 1, 1998, other than any amounts
excluded from income pursuant to Code Sections
401(k) and 125, and, effective January 1, 2001,
Code Section 132(f));
(B) distributions from any plan of deferred
compensation, whether or not such amounts are
includable in the gross income of the Employees
when distributed;
(C) camounts realized from the exercise of any
nonqualified stock option, or when restricted stock
becomes freely transferable or is no longer subject
to a substantial risk of forfeiture;
(D) amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock
option described in Part II, Subchapter D, Chapter 1
of the Code;
(E) premiums paid by the Employer for group term life
insurance (to the extent the premiums are not
includable in the Participant's gross income);
contributions by the Employer to an annuity under
Code Section 403(b) (to the extent not includable in
the Participant's gross income); and any other
amounts received under any Employer sponsored
fringe benefit plan (to the extent not includable in
the Participant's gross income);
(F) any contribution for medical benefits, within the
meaning of Code Section 419A(f)(2), after
separation from Service which is otherwise treated
as an Annual Addition; and
(G) any amount otherwise treated as an Annual
Addition under Code Section 415(l)(1).
(iii) Average Compensation means the average compensation
during a Participant's highest three (3) consecutive Years of
Service, which period is the three (3) consecutive calendar
years (or the actual number of consecutive years of
employment for those Employees who are employed for
less than three (3) consecutive years with the Employer)
during which the Participant had the greatest aggregate
compensation from the Employer
(iv) Notwithstanding the foregoing, in the case of a Participant
(i) who is permanently and totally disabled (as provided in
Code Section 415c(3)c), (ii) who is not a Highly
Compensated Employee, and (iii) with respect to whom the
Employer elects to have this subparagraph apply, the term
Compensation shall mean the Compensation the Participant
would have received for the Plan Year if the Participant had
been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled. This
subparagraph (iv) shall apply only if contributions made
with respect to amounts treated as Compensation under this
subparagraph (iv) are nonforfeitable when made.
(v) Employer means the Employer that adopts this Plan. All
Related Employers shall be considered a single Employer
for purposes of applying the limitations of this Section.
(vi) Excess Amount means the excess of the Participant's
Annual Additions for the Limitation Year over the
Maximum Permissible Amount, less administrative charges
allocable to such Excess Amount.
(vii) Limitation Year means the Limitation Year specified in the
Plan or, if none is specified, the calendar year.
(viii) Maximum Permissible Amount means, with respect to any
Participant for a Limitation Year, the lesser of:
(A) $30,000 (with such amount to be adjusted
automatically to reflect any cost-of-living
adjustment authorized by section 415(d) of the Code); or
(B) twenty-five percent (25%) of the Participant's
Compensation, within the meaning of Code Section 415(c)(3).
(ix) Projected Annual Benefit means the benefit of the
Participant payable annually in the form of a straight life
annuity (with no ancillary benefits) under the terms of a
defined benefit plan to which employees do not contribute
and under which no rollover contributions are made,
assuming that the Participant continues employment until
Normal Retirement Age (or current age, if later),
compensation continues at the same rate as in effect in the
Limitation Year under consideration until the date of
Normal Retirement Age, and all other relevant factors used
to determine benefits under the defined benefit plan remain
constant as of the current Limitation Year for all future
Limitation Years.
Section 5.9 Notification to Participants.
At least once annually the Committee shall advise each Participant or
Former Participant of the then-composition and value of his Accounts.
* * * * * * *
ARTICLE SIX
-----------
VESTING
Section 6.3 Retirement, Death, or Disability.
If a Participant ceases to be an Employee due to the Participant's
Retirement, Early Retirement, death, or Disability, such Participant, Former
Participant, or the Beneficiary, as the case may be, shall be fully vested in
and entitled to the total amount credited to each of his Accounts.
Section 6.4 Separated From Service
If a Participant or Former Participant is Separated from Service for any
reason other than Retirement, Early Retirement, death, or Disability, such
Participant or Former Participant, or the Beneficiary, as the case may be,
shall be entitled to the sum of the following:
(a) The total amount credited to the Participant's Savings Account,
Rollover Account, and ESOP Rollover Account , if any; and
(b) The Vested Percentage at the date he is Separated from Service, of
the total amount credited to the Participant's Matching Employer
Contribution Account, Discretionary Employer Contribution
Account, W & B Plan Rollover Account, and ESOP Transfer
Account, if any. The Vested Percentage shall be determined in
accordance with the following schedule:
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
---------------- -------------------------
Less than 3 years 0%
At least 3 but less than 4 years 20%
At least 4 but less than 5 years 40%
At least 5 but less than 6 years 60%
At least 6 but less than 7 years 80%
At least 7 or more years 100%
(c) Notwithstanding the foregoing vesting schedule, for any Plan
Year in which the Plan is a Top-Heavy Plan, the following vesting
schedule shall apply:
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
---------------- -------------------------
Less than 2 years 0%
At least 2 but less than 3 years 20%
At least 3 but less than 4 years 40%
At least 4 but less than 5 years 60%
At least 5 but less than 6 years 80%
At least 6 or more years 100%
(d) If, in any subsequent Plan Year, the Plan ceases to be a Top-Heavy
Plan, the vesting schedule in paragraph c shall continue to apply
unless the Employer elects, in writing, to revert to the vesting
schedule set forth in paragraph (b). Any reversion shall be treated
as a plan amendment and shall be subject to the restrictions of
Section 15.1 and this paragraph. No such amendment shall be
effective unless, in the event it changes the Plan's applicable
vesting schedule (determined in accordance with regulations under
Code Section 411), each Participant's nonforfeitable percentage of
his accounts (determined as of the later of the date such
amendment is adopted or becomes effective) is not less than such
percentage computed under this Section 6.2 without regard to such
amendment and unless, in such event, each Participant having not
less than three (3) Years of Service, is permitted to elect (pursuant
to regulations under Code Section 411) to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment.
(e) If the Trustee pays any amount outstanding to the credit of a
Participant in the Participant's Discretionary Employer Account,
Matching Employer Account, or W & B Plan Rollover Account
while the Participant is not fully vested in such account(s), other
than a Cashout Distribution defined in Section 6.3(b), and prior to
the date on which the Participant shall incur five (5) consecutive
one year Breaks in Service, his or her vested and undistributed
Discretionary Employer Account, Matching Employer Account,
and W & B Plan Rollover Account shall be determined at any time
prior to and including the date on which the Participant shall incur
five (5) consecutive one year Breaks in Service under the
following formula:
X = P(AB + (RxD)) - (RxD).
For this formula, the variables represent the following factors:
X is the value of the vested portion of the Participant's account;
P is the Participant's Nonforfeitable percentage at the relevant time;
AB is the account balance of the Participant's account at the relevant
time;
D is the amount of the distribution; and
R is the ratio of the Participant's account balance at the relevant time
to the Participant's account balance after the distribution.
(f) Notwithstanding the foregoing, a Participant's Vested Percentage
in his W & B Plan Rollover Account and ESOP Accounts, if any,
shall never be less than his vested percentage in the assets
transferred to such Account at the time such assets were transferred
to the Plan from the W & B Refrigeration Service Co., Inc.
Employees' Profit-Sharing Plan and Trust, the FFE Transportation
Services ESOP, or the Conwell ESOP, respectively.
Section 6.5 Computation of Years of Service for Vesting.
(a) General. For purposes of computing a Participant's or Former
Participant's Vested Percentage of his Discretionary Employer
Contribution Account, Matching Employer Contribution Account,
and ESOP Transfer Account, each Participant or Former
Participant shall be credited with all Years of Service to which he
is entitled pursuant to Section 2.68.
(b) Forfeitures. When a Participant has Separated from Service, his
Matching Employer Contribution, Discretionary Employer
Contribution, and ESOP Transfer Accounts shall be divided into
two portions, one representing the vested portion, and the other
representing the forfeiture portion, of such Accounts. Such
Accounts shall continue to receive income allocations pursuant to
Section 5.2 until distributed in full. A Participant shall forfeit the
forfeiture portion of his Matching Employer Contribution,
Discretionary Employer Contribution, and ESOP Transfer
Accounts on the earlier of the date on which the Participant incurs
five (5) consecutive one year Breaks-in-Service or the date on
which the Participant receives a Cashout Distribution. A "Cashout
Distribution" means a lump sum distribution pursuant to Section
11.1 that occurs concurrently with or at any time subsequent to the
date on which the Participant separates from Service. For purposes
of this Section, a Participant who separates from Service without a
nonforfeitable percentage in the Participant's Matching Employer
Contribution, Discretionary Employer Contribution, and ESOP
Transfer Accounts shall be deemed to have received a distribution
of such Accounts on the date of separation from Service, or if the
Participant is entitled to an allocation of Matching Employer
Contributions for the Plan Year in which he separates from
Service, on the last day of that Plan Year. The amount forfeited
under this Section shall remain in the Trust Fund and shall be
allocated as provided in Section 5.5.
(c) Benefit Accruals and Repayments.
(i) For purposes of determining a Participant's Vested
Percentage under the Plan, the Plan will disregard service
performed by the Participant with respect to which he has
received a distribution if the present value of his entire
Vested Percentage of such distribution was not more than
$5,000. This paragraph (i) shall apply, however, only if
such distribution was made on termination of the
Participant's participation in the Plan.
(ii) For purposes of determining a Participant's Vested
Percentage under the Plan, the Plan will not disregard
service as provided in paragraph c(i) above if the
Participant repays the full amount of the distribution
described in such paragraph c(i). Upon such repayment,
the Participant's account balance prior to the distribution
will be restored (unadjusted by any gains or losses between
the time of distribution and the time of repayment) and his
Vested Percentage will be recomputed by taking into
account service so disregarded. This paragraph (ii) shall
apply, however, only in the case of a Participant who-
(A) resumes employment before the date on which he
would have incurred five (5) consecutive Breaks-in-
Service; and
(B) repays the full amount of such distribution before
the date on which he would have incurred five (5)
consecutive Breaks-in-Service.
The Employer will make a special restoration contribution to the Plan
in order to restore any account balances hereunder.
For purposes of Plan Section 5.6 and Code Section 415c, the
repayment by the Participant and the restoration will not be treated as
"annual additions."
Section 6.6 Determination of Amount.
(a) For purposes of Sections 6.1, 6.2 and 6.3, the amount credited to
the Accounts of a Participant or Former Participant shall be
determined as of the Valuation Date next preceding the date such
Accounts are distributed, and the distribution from the Plan of such
amount shall be made or shall commence as soon thereafter as
practicable in the manner determined under Article 11.
(b) If, on the Valuation Date referred to in Section 6.4(a), the amount
credited to the Account in question does not include the allocation,
if any, to which such Account is entitled under Article 5 for the
months which include and/or follow such Valuation Date, then the
particular Participant's or Former Participant's vested portion,
determined under Section 6.1, 6.2 and 6.3, as appropriate, of such
allocation shall be distributed in the manner provided under
Section 11.1(d) as soon as practicable after such allocation is
made.
* * * * * * *
ARTICLE SEVEN
-------------
INVESTMENT OF TRUST ASSETS
Section 7.3 Appointment of Trustee.
The Board of Directors of the Company shall determine the number of
Trustees, shall appoint such Trustees, and may at any time and from time to
time increase or decrease the number of Trustees. The Board of Directors of
the Company may remove any Trustee at any time and appoint a successor
Trustee or Trustees or reduce the number of Trustees (but not to less than
one). The Trustee or Trustees shall have such rights, powers and duties as
shall from time to time be specified in or determined pursuant to the Trust
Agreement. The Trust Agreement shall form a part of the Plan, and the Trust
Assets shall be administered in accordance with the terms of the Plan and the
Trust Agreement.
Section 7.4 Investment of Accounts.
(a) Participant Direction of Investment. Except as provided in Section
7.2(c)(i) (regarding the Restricted Company Stock Fund), the following Accounts
shall be known as Participant-Directed Accounts and shall be invested and
reinvested by the Trustee in accordance with Participant direction, as
provided herein: Discretionary Employer Contribution Accounts, Matching
Employer Contribution Accounts, Savings Accounts, and W & B Plan Rollover
Accounts.
(i) Each Participant, in his written application for participation
or through such other means as may be authorized by the
Plan Administrator, if any, shall direct the Committee and
the Trustee as to which Investment Fund(s) (as defined in
Section 7.2(b) below) he wishes to utilize and the
percentage of his Participant-Directed Accounts he wishes
to have invested in each fund. The Participant shall make a
separate investment election for his Rollover Account, if
any, and his W & B Plan Rollover Account, if any. The
Participant's direction shall include the percentage of his
Accounts to be invested in each such Investment Fund;
provided, however, that all investments shall be made in
whole percentages. Such election shall be expressed in
terms of the percentage amount of the Accounts, other than
amounts invested in the Restricted Company Stock Fund, to
be allocated to each Investment Fund.
(ii) A Participant may change his designation of the manner for
investment of such Participant's Participant-Directed
Accounts, other than amounts held in the Restricted
Company Stock Fund, or current contributions made on
behalf of or by the Participant, or both, to any other manner
permitted hereunder. This change may be made in writing
to the Committee or through such other means as may be
authorized by the Plan Administrator, if any. A change
shall be applicable as soon as administratively feasible
following its delivery to the Committee. In order to
comply with applicable federal or state securities laws, the
Committee may establish such rules with respect to the
change of investment designation by participants as it shall
deem necessary or advisable to prevent possible violations
of such laws.
(iii) To the extent a Participant fails to direct the investment of
all or any portion of his Participant-Directed Accounts,
the Committee shall direct the Trustee to invest such
Participant-Directed Accounts in the Investment Fund(s)
designated by the Committee from time to time in a
uniform and nondiscriminatory manner.
(iv) The Plan Administrator may permit a Participant to make
an election under this Section 7.2 through any electronic or
telephonic means authorized by the Committee.
(b) Investment Funds. The Plan Committee will select the "Investment
Funds" available under the Plan in accordance with a separate written
Investment Policy. The Committee shall select and maintain such Investment
Funds in accordance with the Committee's written Investment Policy. Such
Investment Funds shall be communicated to Participants in writing. All
Participant-Directed Accounts shall be allocated by the Committee to the
Investment Funds specified in the separate written Investment Policy.
Dividends, interest and other distributions shall be reinvested in the same
Investment Fund from which they are received.
Except as provided in paragraph c and (d) below, the assets of each
Investment Fund shall be invested exclusively in shares of the registered
investment company designated by the Committee, provided that such shares
constitute securities described in ERISA Section 401(b)(1). Amounts in any
such Investment Fund in amounts estimated by the Trustee to be needed for
cash withdrawals, or in amounts too small to be reasonably invested, or in
amounts which the Trustee deems to be in the best interest of the Participants,
may be retained by the Trustee in cash or invested temporarily.
There shall be at least five Investment Funds for the Participants to
choose between, not including the Unrestricted Company Stock Fund and the
Restricted Company Stock Fund. The Committee may, from time to time and
in its sole discretion, increase or decrease the number and type of the
Investment Fund(s) available for the Participants to choose among; provided,
however, that the Committee shall not decrease the number of Investment
Funds to fewer than five.
(c) Company Stock Funds. The Trustee shall maintain a Restricted
Company Stock Fund and an Unrestricted Company Stock Fund (collectively, the
"Company Stock Funds") under this Plan. The Company Stock Funds shall be
invested solely in Company Stock. The Trustee is explicitly authorized to
acquire and hold shares of Company Stock in the Company Stock Funds. Any and
all investments, reinvestments, or purchases shall be made at prices
not in excess of the fair market value of the Company Stock prevailing at the
time of such purchase or investment.
(i) Restricted Company Stock Fund. All amounts invested in
Company Stock that were subject to investment restrictions
pursuant to the terms of the Prior Plan shall be invested and
reinvested by the Trustee in the Restricted Company Stock
Fund. Each Participant's investment in the Restricted
Company Stock Fund shall be equal to the portion of his
Participant-Directed Accounts that was invested in the
Restricted Company Stock Fund under the Prior Plan.
Participants shall have no right to direct investment of any
amounts held in the Restricted Company Stock Fund.
During each Diversification Period, the Trustee shall transfer
a portion of each Participant's investment in the Restricted
Company Stock Fund to the Unrestricted Company Stock Fund as
follows:
(A) The transfer shall be made as of the first day of the
calendar month immediately following the calendar
month that includes the anniversary of a
Participant's Employment Commencement Date.
(B) The amount transferred shall be equal to the
Participant's investment in the Unrestricted
Company Stock Fund times a fraction, the
numerator of which shall be one and the
denominator of which shall be equal to (i) for the
Diversification Period beginning July 1, 1999, four,
(ii) for the Diversification Period beginning July 1,
2000, three, (iii) for the Diversification Period
beginning July 1, 2001, two, and (iv) for the
Diversification Period beginning July 1, 2002, one.
For purposes of this Section, the term "Diversification
Period" shall mean the twelve month period beginning
each July 1st and ending each June 30th.
(ii) Unrestricted Company Stock Fund. Any amounts invested
in shares of Company Stock on or after the Effective Date,
any amounts invested in Company Stock that were not
subject to investment restrictions pursuant to the terms of
the Prior Plan, and any amounts transferred from the
Restricted Company Stock Fund, shall be invested and
reinvested by the Trustee in the Unrestricted Company
Stock Fund. Each Participant shall be permitted to direct
the Trustee to cause his Participant-Directed Accounts to
purchase or sell shares of Company Stock held in the
Unrestricted Company Stock Fund at any time.
Any transfer of funds within a Participant-Directed Account
from the Unrestricted Company Stock Fund to any other
Investment Fund, will require that the Company Stock allocated
to such Account be sold for its then market value and the sales
proceeds transferred to the other Investment Fund (which
will remain allocated to that same Account). The Trustee may
sell shares of Company Stock to private purchasers (including
an Employer) or in the open market; provided, however, that a
sale to a private purchaser shall be made for no less than the
market price then prevailing. Any transfer of funds within a
Participant-Directed Account from another Investment Fund to
the Unrestricted Company Stock Fund will require that the
transferred funds be used to purchase shares of Company Stock
(such stock to be allocated to the same Account from which the
fund transfer was made).
(d) ESOP Accounts. The ESOP Accounts shall be invested and reinvested
by the Trustee in accordance with Article 13.
Section 7.5 Income and Expenses.
(a) Except as provided in Section 5.2, the dividends, capital gains
distributions, and other earnings received on any share of
Company Stock or an Investment Fund that is specifically credited
to a Participant's or Former Participant's separate Account under
the Plan shall be allocated to such separate Account and
immediately reinvested, to the extent practicable, in additional
shares of Company Stock or shares of such Investment Fund.
(b) Except as otherwise provided in Sections 5.5 and 16.7, fees
charged by the Trustee and other expenses of operating the Trust
may be paid by the Employers or, in the absence of such payments
(which are not obligatory), out of the general Trust assets and
charged to the separate Accounts of all Participants and Former
Participants under the Plan in the ratio that the fair market value of
each such Account bears to the total fair market value of all
separate Accounts; provided, however, that such amounts shall be
adjusted to reflect any revenue sharing payments received from an
Investment Fund. However, notwithstanding the above, any
brokerage fees, commissions, taxes and other costs incurred by the
Trust (and not reimbursed by the Employers) with respect to the
purchase, sale, or distribution of Company Stock pursuant to an
inter-fund transfer in connection with an in-service withdrawal or a
distribution made at the direction of a Participant, Former
Participant, or Beneficiary pursuant to Section 10.1 or 11.1(a) or
(b), shall be charged to and paid by such Participant's, Former
Participant's, or Beneficiary's separate Accounts.
Section 7.6 Company Stock.
(a) Acquisition of Stock by Trustee. The Trustee shall acquire shares
of Company Stock pursuant to Participants' elections under Section
7.2 from private sources (including an Employer) or the open
market, at not more than the market price then prevailing. All
shares of Company Stock shall be carried by the Trustee at the
actual cost thereof, including taxes, brokerage fees and
commissions, if any, incident to the purchase, if the shares of
Company Stock were purchased, or shall be carried by the Trustee
at their value at the time of contribution to the Plan, if contributed
in kind to the Plan by the Employer, determined by the average of
the closing prices of such stock for the twenty (20) consecutive
trading days immediately preceding their contribution to the Plan.
(b) Stock Rights, Stock Splits, and Stock Dividends. No Participant,
Former Participant or Beneficiary shall have any right of request,
direction, or demand upon the Committee or the Trustee to
exercise in his behalf rights or privileges to acquire, convert into,
or exchange for Company Stock or other securities. The Trustee,
in its sole discretion, may exercise or sell any such rights or
privileges. The separate Accounts shall be appropriately credited
if such rights are exercised or sold. Company Stock received by
the Trustee by reason of a stock split, stock dividend or
recapitalization shall be appropriately allocated to the separate
Accounts of the affected Participant, Former Participant, or
Beneficiary.
(c) Voting of Company Stock. At each annual meeting and special
meeting of the stockholders of the Company, the Committee shall
direct the Trustee how to vote the shares of Company Stock held in
Participant-Directed Accounts. Notwithstanding the foregoing,
Company Stock held in ESOP Accounts shall be voted in
accordance with Section 13.6c.
Section 7.7 Exclusive Benefit.
The Plan and the Trust are established and shall be maintained for the
exclusive benefit of the Participants, Former Participants and their
Beneficiaries. Subject to the exceptions expressly set forth in the Plan or
the Trust Agreement, no part of the Trust Assets may ever revert to an
Employer or be used for or diverted to purposes other than the exclusive
benefit of the Participants, Former Participants and Beneficiaries.
Section 7.8 Valuation.
The value of each Account shall be determined as of each Valuation Date,
on the basis of the fair market value of the assets allocated to each such
Account, as appraised by the Trustee.
(a) As of each Valuation Date, the Committee shall determine the fair
market value of each Investment Fund being administered by the
Trustee. With respect to each such Investment Fund, the
Committee shall determine (a) the change in value between the
current Valuation Date and the then last preceding Valuation Date,
(b) the net gain or loss resulting from expenses paid (including fees
and expenses, if any, which are to be charged to such Investment
Fund) and (c) realized and unrealized gains and losses.
Contributions and rollovers received by the Plan shall be credited to
a Participant's Accounts as of the Valuation Date that such amounts
are invested in an Investment Fund and shall not be considered in
allocating gains and losses to the Participant's Accounts on such
Valuation Date.
The transfer of funds to or from an Investment Fund pursuant to
Section 7.2 and 7.3 and payments, distributions and withdrawals from an
Investment Fund to provide benefits under the Plan for Participants or
Beneficiaries shall not be deemed to be gains, expenses or losses of an
Investment Fund.
As of each Valuation Date, the Committee shall allocate the net gain
or loss of each Investment Fund on the Valuation Date to the Accounts of
Participants participating in such Investment Fund on such Valuation Date.
(b) The reasonable and equitable decision of the Committee as to the
value of each Investment Fund, and of any Account as of each
Valuation Date shall be conclusive and binding upon all persons
having any interest, direct or indirect, in the Investment Funds or
in any Account.
* * * * * * *
ARTICLE EIGHT
-------------
BENEFICIARY
Section 8.3 Designation of Beneficiary.
Each Participant or Former Participant may, from time to time, designate
any person or persons (who may be designated contingently or successively and
who may be an entity or a natural person), either individually or in a
fiduciary capacity, the Beneficiary or Beneficiaries to whom his Plan benefits
are to be paid if he dies before receipt of all such benefits. However, a
married Participant or a married Former Participant may not select a
Beneficiary other than his Spouse unless the Spouse consents to such selection
in writing, and the Spouse's consent acknowledges the effect of such selection
and is witnessed by a Plan representative or a notary public. Each
Beneficiary designation shall be in the form prescribed by the Committee and
will be effective only when filed with the Committee during the Participant's
or Former Participant's lifetime. Each Beneficiary designation filed with the
Committee will cancel all Beneficiary designations previously filed with the
Committee.
Section 8.4 No Beneficiary.
If any Participant or Former Participant fails to designate a Beneficiary
in the manner provided above, or if the Beneficiary designated by a
Participant, or Former Participant dies before him and the Participant or
Former Participant fails to designate a new Beneficiary, or if the Beneficiary
designated by a deceased Participant or Former Participant dies before
complete distribution of the deceased Participant's or Former Participant's
benefit, the Committee shall direct the Trustee to distribute such Participant's
or Former Participant's benefits (or the balance thereof) to one or more of
the following, as determined by the Committee in its sole discretion:
(a) To the surviving spouse of such Participant or Former Participant;
(b) To any one or more or all of the next of kin of such Participant or
Former Participant, and in such proportions, as the Committee shall determine;
or
(c) To the estate of the last to die of such Participant or Former
Participant and his Beneficiary or Beneficiaries; or
(d) To such recipient as may be required by applicable law.
Section 8.5 Mandatory Distribution of Death Benefits.
The Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Account Balance to the Beneficiary or Designated Beneficiary,
under a method of payment which, as of the Required Beginning Date, does not
satisfy the minimum distribution requirements under Code Section 401(a)(9) and
the applicable Treasury regulations. With respect to distributions made for
calendar years beginning on or after January 1, 2002, the Plan will apply the
minimum distribution requirements of section 401(a)(9) of the Code in
accordance with the regulations under Section 401(a)(9) that were proposed on
January 17, 2001, notwithstanding any provision of the Plan to the contrary.
The foregoing sentence shall continue in effect until the end of the last
calendar year beginning before the effective date of final regulations under
Section 401(a)(9) or such other date as may be specified in guidance published
by the Internal Revenue Service.
(a) Limits on Distribution Periods.
(i) If the Participant or Former Participant dies after
distribution has commenced, the Trustee shall continue to
distribute the remaining portion of the Participant's or
Former Participant's Nonforfeitable Account Balance at
least as rapidly as under the method of distribution used
prior to the Participant's death.
(ii) If the Participant or Former Participant dies before
distribution commences, the Trustee shall complete
distribution of the Participant's or Former Participant's
Nonforfeitable Account Balance by December 31 of the
calendar year containing the fifth (5th) anniversary of the
Participant's or Former Participant's death, except to the
extent that the Designated Beneficiary elects to receive
distributions under paragraphs (A) or (B) below:
(A) If any portion of the Participant's or Former
Participant's Nonforfeitable Account Balance is
payable to a Designated Beneficiary, the Designated
Beneficiary may elect distributions over the life 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 or Former Participant
died;
(B) If the Designated Beneficiary is the Participant's
Surviving Spouse, the date distributions must begin
under paragraph (A) above shall not be earlier than
the later of: (1) December 31 of the calendar year
immediately following the calendar year in which
the Participant or Former Participant died; or (2)
December 31 of the calendar year in which the
Participant or Former Participant would have
attained age seventy and one-half (70 1/2) years. If
the Participant has not made an election pursuant to
this Section by the time of death, the Designated
Beneficiary must elect the method of distribution no
later than the earlier of: (1) December 31 of the
calendar year in which distributions must begin
under this Section; or (2) December 31 of the
calendar year which contains the fifth (5th)
anniversary of the date of death of the Participant or
Former Participant. If the Participant has no
Designated Beneficiary, or if the Designated
Beneficiary does not elect a method of distribution,
distribution of the Nonforfeitable Account Balance
of the Participant or Former Participant must be
completed by December 31 of the calendar year
containing the fifth (5th) anniversary of death.
(C) If the Surviving Spouse is the Beneficiary of any
portion of a deceased Participant's or Former
Participant's benefits under the Plan, the Surviving
Spouse shall be permitted to direct that this
distribution of benefits commence at a reasonable
time following the death of the Participant or
Former Participant under applicable Treasury
regulations.
(D) If the Surviving Spouse dies after the Participant or
Former Participant, but before payments to the
Spouse begin, the preceding provisions of this
Section, with the exception of paragraph (B), shall
be applied as if the Surviving Spouse had been the
Participant.
(b) Minimum Distribution Amounts. If the Trustee will distribute a
Participant's or Former Participant's Nonforfeitable Account Balance in
accordance with the Designated Beneficiary's life expectancy, the minimum
distribution for a calendar year equals the Participant's Nonforfeitable
Account Balance as of the latest Valuation Date preceding the beginning of
the calendar year divided by the Designated Beneficiary's life expectancy.
For purposes of this Section, payments will be calculated by using the
expected return multiples specified in Tables V and VI of Treasury
Regulations Section 1.72-9. Except as the Surviving Spouse may otherwise
elect in Section 8.3(d)(i) below, the life expectancy of a Surviving Spouse
shall be recalculated annually; however, in the case of any other Designated
Beneficiary, life expectancy will be calculated when the first payment
commences without further recalculation. For purposes of this Section, any
amount paid to a child of the Participant or Former 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.
(c) Commencement of Benefits.
(i) General Rule. For the purposes of this Section, distribution
of a Participant's or Former Participant's Nonforfeitable
Account Balance is considered to begin on the Participant's
or Former Participant's Required Beginning Date or, if
Section 8.3(a)(ii)(D) applies, the date distribution is
required to begin to the Surviving Spouse pursuant to
Section 8.3(a)(ii)(A). If distribution in the form of an
annuity irrevocably commences before the Required
Beginning Date, the date distribution is considered to begin
is the date distribution actually commences.
(ii) Required Beginning Date. A Participant's (or Former
Participant's) "Required Beginning Date" shall be as
follows:
(A) For a Participant who is a Five Percent Owner, the
Required Beginning Date shall commence on the
first day of April following the later of:
(1) the calendar year in which the Participant
attains age seventy and one-half (70 1/2)
years; or
(2) the earlier of the calendar year with or
within which ends the Plan Year in which
the Participant becomes a Five Percent
Owner, or the calendar year in which the
Participant retires.
(B) For a Participant who is not a Five Percent Owner,
the Required Beginning Date is the first day of
April of the calendar year immediately following
the later of:
(1) the calendar year in which the Participant
attains age seventy and one-half (70 1/2); or
(2) the calendar year in which the Participant
terminates employment with the Employer.
A Participant is treated as a "Five Percent Owner" for purposes of this
Section if the Participant is a Five Percent Owner as defined in Section
12.2(g)(iii) and Code Section 416(i) (determined under Code 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 the owner attains age
sixty-six and one-half (66 1/2) years or any subsequent Plan Year. Once
distributions have begun to a Five Percent Owner under this Section, they
must continue to be distributed, even if the Participant ceases to be a Five
Percent Owner in a subsequent year.
(d) Definitions.
(i) Applicable Life Expectancy means the life expectancy
calculated using the attained age of the Participant (or the
Designated Beneficiary) as of the Participant's (or the
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 the Designated Beneficiary is the Spouse of
the Participant, such Spouse may make an irrevocable
election to recalculate his or her life expectancy, prior to
the Participant's Required Beginning Date. If life
expectancy is being recalculated, the Applicable Life
Expectancy shall be the life expectancy as recalculated.
The applicable calendar year shall be the first Distribution
Calendar Year and, if life expectancy is being recalculated,
the succeeding calendar year.
(ii) Designated Beneficiary means the individual who is
designated as the Beneficiary under the Plan under Code
Section 401(a)(9) and the applicable Treasury regulations.
(iii) Distribution Calendar Year means 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.
(iv) Participant's Nonforfeitable Account Balance means 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 the dates in the Valuation Calendar
Year after the Valuation Date and decreased by
distributions made in the Valuation Calendar Year after the
Valuation Date. 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.
* * * * * * *
ARTICLE NINE
------------
NOTICES
Section 9.3 Notice to Trustee.
As soon as practicable after a Participant, Former Participant or
Beneficiary becomes entitled to benefits in accordance with Article 6, the
Committee shall give written notice to the Trustee, which notice shall include
the following information and directions:
(a) The name and address of the Participant, Former Participant, or
Beneficiary.
(b) The percentage or amount to which the Participant, Former
Participant, or Beneficiary is entitled under Article 6.
(c) The time, manner and amount of payments to be made pursuant
to Article 11.
Section 9.4 Subsequent Notices.
At any time and from time to time after giving the notice provided for
in Section 9.1, the Committee may modify such original notice or any
subsequent notice by means of a further written notice or notices to the
Trustee, but any action taken or payments made by the Trustee pursuant to the
original notice and prior to the receipt of a subsequent notice shall not be
affected by such subsequent notice.
Section 9.5 Copy to Participant.
A copy of each notice provided for in Sections 9.1 and 9.2 shall be
mailed by the Committee to the Participant or Former Participant or to each
Beneficiary involved, as the case may be, but if, for any reason, such copy
is not sent or received, that fact shall not affect the validity of any
notice to the Trustee nor the validity of any action taken or payment made
pursuant thereto.
Section 9.6 Reliance Upon Notice.
Upon receipt of any notice as provided in this Article 9, the Trustee
shall promptly take whatever action and make whatever payments are called for
therein.
* * * * * * *
ARTICLE TEN
-----------
IN-SERVICE WITHDRAWALS AND LOANS TO PARTICIPANTS
Section 10.3 Withdrawals from Accounts.
(a) Savings Accounts.
(i) Hardship Distributions. Distribution of Savings
Contributions, Incentive Contributions, Qualified Non-
Elective Contributions, and Qualified Matching
Contributions made pursuant to a Participant's Savings
Contributions, including any shares of Company Stock held
in the Restricted Company Stock Fund, may be made to a
Participant in the event of hardship. For the purposes of this
Section, a hardship distribution is defined pursuant to the
safe harbor definition of Treasury Regulation Section
1.401(k)-1(d)(2)(iv) and means a distribution necessary to
satisfy an immediate and heavy financial need of an
Employee who lacks other available resources.
(A) A distribution will be considered to satisfy an
immediate and heavy need of an Employee if the
distribution is for:
(1) expenses incurred for or necessary to obtain
medical care, described in Code Section
213(d), of the Employee, the Employee's
spouse, children, or dependents;
(2) costs directly related to the purchase,
excluding mortgage payments, of a principal
residence for the Employee;
(3) payment of tuition and related educational
fees for the next twelve (12) months of post-
secondary education for the Employee, the
Employee's Spouse, children or dependents; or
(4) payment necessary to prevent the eviction of
the Employee from, or a foreclosure on the
mortgage of, the Employee's principal
residence.
(B) A distribution will be considered necessary to
satisfy an immediate and heavy financial need of an
Employee who lacks other available resources only if:
(1) the Employee has obtained all distributions,
other than hardship distributions, and all
nontaxable loans under all plans maintained
by the Employer; and
(2) the distribution is not in excess of the
amount of an immediate and heavy financial
need, including amounts necessary to pay
any federal, state or local income taxes or
penalties reasonably anticipated to result
from the distribution.
(C) In addition to the conditions above, any hardship
withdrawal to a Participant made pursuant to this
Section shall be increased by an amount equal to the
lesser of:
(1) all federal, state, and local income taxes and
associated penalties (including, if applicable,
the additional income tax described in Code
Section 72(t) imposed with respect to such
hardship withdrawal); or
(2) the amount, if any, in such Participant's
Savings Account in excess of such hardship
withdrawal.
(ii) Upon Attainment of Age 59 1/2. A Participant may elect to
receive a lump-sum distribution of the amount in his
Savings Account at any time after such Participant attains
age fifty-nine and one-half (59 1/2); provided, however, that
such distribution shall not include any shares of Company
Stock held in the Restricted Company Stock Fund.
(b) Matching Employer Contribution Accounts and Discretionary
Employer Contribution Accounts.
(i) Prior to Attainment of Age 59 1/2. A Participant may not
receive a distribution from his Matching Employer
Contribution Account or his Discretionary Employer
Contribution Account prior to his attainment of age
fifty-nine and one-half (59 1/2).
(ii) After Attainment of Age 59 1/2. A Participant may elect to
receive a lump-sum distribution of the vested amount in his
Matching Employer Contribution Account and/or his
Discretionary Employer Contribution Account at any time
after such Participant attains age fifty-nine and one-half
(59 1/2); provided, however, that such distribution shall not
include any shares of Company Stock held in the Restricted
Company Stock Fund.
(c) Rollover Accounts. A Participant may receive an in-service
distribution from his Rollover Account at any time. A Participant may not
receive an in-service distribution from his W & B Plan Rollover Account.
(d) ESOP Accounts.
(i) Hardship Distributions. A Participant may not receive a
hardship distribution from his ESOP Accounts.
(ii) In-service Distributions. A Participant may not receive an
in-service distribution from his ESOP Accounts.
(e) Section 16 Insiders. Notwithstanding the preceding, if the
Participant requesting a withdrawal from the Company Stock Funds is an
executive officer, director or 10% shareholder of the Company (a "Section 16
Insider"), then any such withdrawal from the Company Stock Funds shall be
paid by a distribution in kind of Company Stock, and cash may be distributed
only to the extent that the distribution is made pursuant to an election made
at least six (6) months following the date of the most recent election, with
respect to any employee benefit plan of the Company, that effected an
opposite way "discretionary transaction," qualifying for exemption under the
requirements for an exempt "discretionary transaction," as that term is
defined in Rule 16b-3, issued by the Securities and Exchange Commission under
Section 16 of the Securities Exchange Act of 1934. The Committee shall give
such directions to the Trustee as shall be appropriate to effectuate the
distribution in accordance with the terms hereof of the amount being withdrawn.
Such withdrawals described in Section 10.2(b) below shall be debited to the
Participant's Savings Account, and the Committee shall charge the sum of such
debits to the Company Stock Funds and/or other Investment Fund(s) within such
Savings Account in such manner as the Participant designates in writing;
provided, however, if the Participant fails to make such a written designation,
the Committee shall charge the sum of such debits to the investment fund to
be determined by the Committee.
Section 10.4 Loans to Participants.
The Committee may authorize a loan to the Participants and to any Former
Participant who is a "party-in-interest" (as defined in ERISA Section 3(14))
who makes application therefore, of amounts credited to the Participant's
Accounts, including any shares of Company Stock held in the Restricted Company
Stock Fund. Provided, however, that no portion of the Annuity-Restricted
Account (as defined in Section 11.2) or the ESOP Accounts shall be available
for a loan. Loans shall not be available to any person who is not a party-in-
interest as defined in ERISA Section 3(14).
Each such loan shall be subject to the following provisions:
(a) A Participant must apply for each loan either in writing on an
application form provided by the Committee or through such other means as may
be authorized by the Committee. As a condition to the making of the loan,
the Participant shall agree to pay the loan set-up and annual loan
administration fees associated with the extension of the loan from his
Account (unless paid directly by the Participant).
(b) The amount of any loan, when added to the outstanding balance of
all other loans to the Participant or Former Participant under this
Plan shall not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of (i) the highest
outstanding balance of loans to the Participant or Former
Participant from the Plan and all related plans during the
one year period ending on the day before the date the loan
is made, over (ii) the outstanding balance of loans to the
Participant or Former Participant from the Plan and all
related plans on the date the loan is made; and
(ii) 50% of the amount in which the Participant would have a
vested interest in the event his Separation from Service was
to occur on the date the loan is made.
For purposes of this Section, a related plan is any "qualified
employer plan," as defined in Code Section 72(p)(3), sponsored
by the Employers or any related employer, determined according
to Code Section 72(p)(2)c.
(c) Each loan shall be evidenced by a promissory note payable to the
order of the Plan. Each loan shall be adequately secured as determined by
the Committee. A loan shall be considered adequately secured if the amount
of the loan at the date the loan is granted does not exceed one-half of the
amount in which the Participant would have a vested interest in the event of
his Separation from Service.
(d) Each loan shall bear an interest rate equal to the "prime lending
rate" published in the Wall Street Journal plus one percent (1%) at
the time such loan is requested.
(e) Each such loan shall provide for the repayment of principal and
accrued interest in substantially level amortized payments payable
not less frequently than quarterly through payroll deduction
payments.
(f) Each loan shall extend for a stated period determined by agreement
of the Participant and the Committee, not exceeding five years.
The limitation in the preceding sentence shall not apply to any loan
designated by the Committee as a home loan. For purposes of this
Section 10.2, a "home loan" is a loan used to acquire any dwelling
unit that within a reasonable time is to be used as the principal
residence of the Participant. A home loan shall not exceed ten (10)
years.
(g) If a loan to a Participant is outstanding on the date a distribution
is to be made from the Plan with respect to a portion of the Participant's
Accounts represented by the loan, the balance of the loan, or a portion
thereof equal to the amount to be distributed, if less, shall on such date
become due and payable; provided that if the Participant is a party-in-
interest (as defined in ERISA Section 3(14)), such loan shall not become due
and payable if renegotiated on terms acceptable to the Committee. The
portion of the loan due and payable shall be satisfied by offsetting such
amount against the amount to be distributed to the Participant. Alternatively,
the Committee may in its discretion direct that the portion of the Participant's
Accounts equal to the outstanding loan balance be distributed in kind by
distribution of the Participant's note.
(h) If a loan to a Participant is outstanding at the time of the
Participant's death, and if the Participant's executor or administrator does
not repay the loan, the note shall be distributed in kind to the Participant's
Beneficiary.
(i) A loan shall be accelerated and immediately due in full upon a
Participant's termination of employment.
(j) If a Participant fails to pay interest or principal on an
outstanding loan when due, his Account from which the loan was made shall,
at the direction of the Committee, be reduced by the unpaid amount if a
withdrawal would be permitted from said Account pursuant to Article 6. The
Participant shall be treated as having received such a distribution and shall
receive credit under the promissory note for the delinquent payment
accordingly. If the Committee does not take such action, the Committee shall
take whatever steps (including legal action) it deems necessary to collect the
unpaid amount.
(k) In accordance with the foregoing standards and requirements,
loans shall be available to all Participants on a reasonably equivalent basis.
A Participant shall only be entitled to have two (2) loans in effect at the
same time. Each loan must be in a minimum amount of $1,000.
(l) All loans shall be governed by such rules and regulations as the
Committee may adopt which rules and regulations are hereby incorporated by
reference. The Committee shall cause to be furnished to any Participant
receiving a loan any information required to be furnished pursuant to the
Federal Truth in Lending Act, if applicable, or pursuant to any other
applicable law.
(m) The portion of a Participant's Accounts represented by the
outstanding loan principal shall be segregated and shall not share in the
income or losses of the Plan. In lieu of sharing in such income or losses,
the Participant's Accounts shall be credited with all interest paid by the
Participant on the loan. The Trustee may charge to the Participant's
Accounts any expenses attributable to the loan.
(n) The investment funds held for a Participant's Accounts shall be
liquidated to provide cash equal to the loan principal on a pro rata basis.
(o) Loan repayments will be suspended under this Plan, as permitted
under Code Section 414(u)(4), on behalf of those Participants who are on an
authorized leave of absence pursuant to qualified military service.
* * * * * * *
ARTICLE ELEVEN
--------------
METHODS OF PAYMENT
Section 11.3 Participant Election.
(a) Timing of Distributions.
(i) Subject to the provisions of this Article 11, upon the
Retirement or Disability of a Participant, or the death of a
Participant or Former Participant, distribution of amounts
to which a Participant, Former Participant or Beneficiary
became entitled pursuant to Section 6.1 of the Plan shall
commence as soon as administratively practicable
following the event which caused entitlement to a
distribution, and shall be completed as soon as
administratively practicable following the end of the Plan
Year in which the Participant or Former Participant
Retired, became Disabled or died.
(ii) Subject to the provisions of this Article 11, upon the
Separation from Service of a Participant, distribution of
amounts to which a Participant becomes entitled pursuant
to Sections 6.2 and 6.3c of the Plan shall be completed as
soon as administratively practicable following the event
which caused entitlement to a distribution.
(b) ESOP Account Distributions.
(i) Notwithstanding the provisions of Section 11.1(a)(ii), if the
Participant Separates from Service for any reason other
than Retirement, Death or Disability and is not reemployed
by the Employer at the end of the first Plan Year following
the Plan Year of the Separation from Service, the
Participant may elect to have distribution of the vested
percentage of his ESOP Accounts made on or after the date
that is one year after the close of the first Plan Year
following the Plan Year in which the Participant Separated
from Service by completing a distribution request form and
submitting it to the Committee; in the absence of such an
election, distribution of the vested percentage of the
Participant's ESOP Accounts will begin during the sixty
(60) day period following the end of the Plan Year in which
the Participant reaches Normal Retirement Age. If the
Participant is reemployed by the Employer by the end of
the first Plan Year, distribution under the Plan will be
governed by whichever part of this Article thereafter
becomes applicable. The Committee shall combine the
Nonforfeitable percentage of the ESOP Transfer Account
of a Participant determined under Section 6.2 with the
Participant's ESOP Rollover Account into one Account,
and the Trustee shall make payments to the Participant
pursuant to Article 11.
(ii) Notwithstanding any contrary provision, unless other Plan
distribution provisions require earlier distribution of the
Participant's ESOP Accounts, if the Participant and, if
applicable pursuant to Code Sections 401(a)(11) and 417,
with the consent of the Participant's spouse, elects, the
Committee shall direct the Trustee to commence distribution
of the Participant's Account Balance attributable to
Company Stock acquired after December 31, 1986 in the
Participant's ESOP Accounts no later than one (1) year after
the close of the Plan Year in which the Participant Separates
from Service because of attainment of Normal Retirement
Age, Disability, or death. This distribution requirement is
subject to the form of distribution requirements of this
Article 11.
(iii) Notwithstanding any contrary provision, unless other Plan
distribution provisions require earlier distribution of the
Participant's ESOP Accounts, if the Participant and, if
applicable pursuant to Code Sections 401(a)(11) and 417,
with the consent of the Participant's spouse, elects, the
Committee shall direct the Trustee to commence distribution
of the Participant's Account Balance attributable to
Company Stock acquired after December 31, 1986 in the
Participant's ESOP Accounts no later than one (1) year after
the close of the Plan Year which is the fifth (5th) Plan Year
following the Plan Year in which the Participant Separates
from Service for any reason other than attainment of Normal
Retirement Age, death or disability. This distribution
requirement is subject to the form of distribution
requirements of this Article. If the Participant resumes
employment with the Employer on or before the last day of
the fifth (5th) Plan Year following the Plan Year of the
Participant's Separation from Service, the distribution
provisions of this paragraph will not apply until the
Participant again may separate from Service for any reason
other than attainment of Normal Retirement Age, death or
disability.
(c) Form of Distribution.
(i) Participant-Directed Accounts. Except as provided in
Section 11.2, distributions under this Plan shall be made in
a lump sum. A Participant shall elect whether his lump
sum distribution shall be made in cash or as a combination
of Company Stock (and cash in lieu of fractional shares)
from any Account balances invested in the Company Stock
Funds and cash from any Account balances invested in the
other Investment Fund(s).
(ii) ESOP Accounts. Distributions from a Participant's ESOP
Accounts shall be made in a lump sum and shall be in the
form of whole shares of Company Stock. The value of any
fractional shares shall be distributed in cash. If Company
Stock is not readily tradable on an established market, the
recipient shall receive a put option as described in Section
13.2. A Participant entitled to a distribution from his ESOP
Accounts shall have the right to demand that all such
distributions be made in Qualifying Company Stock or in
cash for fractional shares.
(d) An amount to which a Participant, Former Participant or Beneficiary
is entitled pursuant to Section 6.4(b) shall be paid in cash to such
Participant, Former Participant or Beneficiary as soon as administratively
practicable after the determination of such amount or, if later, the date a
payment is made to such Participant, Former Participant or Beneficiary under
Section 11.1(a) or (b); provided, however, that if the total value of his
vested interest in his Accounts is less than or equals $5,000 he shall be
entitled to receive a distribution of the portion of such Accounts which was
invested in Company Stock at the time the Participant became entitled thereto,
in cash or shares of Company Stock, with the value of any fractional shares to
be paid in cash.
(e) Notwithstanding anything to the contrary herein contained, unless
a Participant or Former Participant has attained age sixty-five (65), if the
value of the vested interest in his Accounts exceeds $5,000, no distribution
may be made to such Participant or Former Participant without his express
written consent.
(f) Notwithstanding anything to the contrary herein contained, a
Participant's benefits will in all events be paid in a lump sum as soon as
practicable following the end of the Plan Year in which such Participant
terminates employment if the total value of his vested interest in all
Accounts is less than or equals $5,000. Unless affirmatively elected
otherwise, such distribution shall be made in cash and in whole shares of
Company Stock for all ESOP Accounts and any other account balances invested
in the Company Stock Funds.
Section 11.4 Joint and Survivor Annuity.
(a) Notwithstanding any provision of the Plan to the contrary, if any
portion of a Participant's Rollover Account, W & B Plan Rollover Account, or
ESOP Rollover Account represents a transfer of assets, directly or indirectly,
from a defined benefit plan, or from a defined contribution plan that is
either subject to the funding standards of Code Section 412 or otherwise
subject to the requirements of Code Section 401(a)(11)(A), such portion
(referred to in this Article 11 as the "Annuity-Restricted Account") shall,
if the Participant does not die before the Annuity Starting Date, be
distributed in the form of a qualified joint and survivor annuity in the
absence of a qualified waiver under Section 11.3, or except as otherwise
provided in Section 6.3(c). For purposes of this paragraph, Annuity Starting
Date means the first day of the first period for which an amount is payable
as an annuity, or, in the case of the benefit not payable in the form of an
annuity, the first day on which all events have occurred which entitled the
Participant to such benefit. The qualified joint and survivor annuity shall
be purchased with the total amount (as determined under Article 11) credited
to the Participant's Annuity-Restricted Account subject to this Section 11.2.
(b) Notwithstanding any provision of the Plan to the contrary, in the
case of any Participant who dies before distribution of his benefits under
the Plan has commenced, a qualified preretirement survivor annuity shall be
payable from the Annuity-Restricted Account (as determined under Article 11)
to the Spouse of the Participant in the absence of a qualified waiver under
Section 11.3, or except as otherwise provided in Section 6.3(c).
Section 11.5 Joint and Survivor Annuity Requirements.
(a) This Plan is a profit sharing plan and the provisions of this Section
11.3 apply only to a Participant described in Section 11.2 and this Section.
The provisions of this Section 11.3 do not apply to any Participant in the
Plan except:
(i) a Participant described in Section 11.2;
(ii) a Participant for whom the Plan is a direct or indirect
transferee from a plan subject to the survivor annuity
requirements of Code Sections 401(a)(11) and 417 and the
Plan received the transfer after December 31, 1984, unless
the transfer is an Elective Transfer;
(iii) a Participant who elects a life annuity distribution (if the
Plan is required to provide a life annuity distribution
option); or
(iv) a Participant whose benefits under a defined benefit plan
maintained by the Employer are offset by benefits provided
under this Plan.
If the provisions of this Section apply to any Participant, the
provisions of this Section shall apply to all vested benefits of the
Participant, whether the Participant became vested in the benefit before or
after death, which are payable under the Plan, including any proceeds from
contracts, if any, on the Participant's life, owned by the Plan.
(b) Qualified Joint and Survivor Annuity. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the ninety (90)
day period ending on the Annuity Starting Date, a married Participant's
Nonforfeitable Account Balance will be paid in the normal form of a Qualified
Joint and Survivor Annuity, defined in Section 11.3(d)(vi), and an unmarried
Participant's Nonforfeitable Account Balance will be paid in the normal form
of an immediate life annuity. The Participant may elect to have the annuity
distributed upon attainment of the Earliest Retirement Age under the Plan.
A Participant shall be considered vested even if the Participant is only
vested in Employee Contributions. For purposes of satisfying the Qualified
Joint and Survivor Annuity requirements, Account Balances shall mean benefits
derived from both Employee and Employer Contributions.
(c) Qualified Preretirement Survivor Annuity. Unless an optional
form of benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting Date,
then the Participant's Nonforfeitable Account Balance shall be applied toward
the purchase of a Qualified Preretirement Survivor Annuity, defined in
Section 11.3(d)(vii). The Surviving Spouse may elect to commence payment of
the Qualified Preretirement Survivor Annuity within a reasonable period after
the Participant's death. For purposes of this Section 11.3c, the amount of
the Qualified Preretirement Survivor Annuity attributable to Employee
Contributions shall not be an amount in excess of the ratio of Employee and
Employer Contributions. In determining the value of the Qualified
Preretirement Survivor Annuity, any portion of a Participant's Individual
Account which is pledged as collateral to secure payment of a Plan
Participant loan shall be included in the Nonforfeitable Account Balance.
(d) Definitions.
(i) Annuity Starting Date means the first day of the first period
for which an amount is paid as an annuity or any other
form.
(ii) Election Period means the period that begins on the first
day of the Plan Year in which the Participant attains age
thirty-five (35) years and ends on the date of the
Participant's death. If a Participant separates from Service
prior to the first day of the Plan Year in which the
Participant attains age thirty-five (35) years, for the
Account Balance as of the date of separation, the Election
Period shall begin on the date of separation. A Participant
who will not yet attain age thirty-five (35) years as of the
end of any current Plan Year may make a Special Qualified
Election to waive the Qualified Preretirement Survivor
Annuity for the period beginning on the date of the election
and ending on the first day of the Plan Year in which the
Participant will attain age thirty-five (35) years. The
election shall not be valid unless the Participant receives a
written explanation of the Qualified Preretirement Survivor
Annuity in such terms as are comparable to the explanation
required under Section 11.3(e)(i). Qualified Preretirement
Survivor Annuity coverage will be automatically reinstated
as of the first day of the Plan Year in which the Participant
attains age thirty-five (35) years. Any new waiver on or
after the date shall be subject to the full requirements of
this Article.
(iii) Earliest Retirement Age means the earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
(iv) Nonforfeitable Account Balance means the aggregate value
of the Participant's Nonforfeitable Account Balance derived
from Employer and Employee Contributions, including
rollovers, whether vested before or upon death, including
the proceeds of contracts, if any, on the Participant's life.
The provisions of this Article shall apply to a Participant
who is vested in amounts attributable to Employer
Contributions, Employee Contributions, or both, at the time
of death or distribution.
(v) Qualified Election means a waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor
Annuity. Any waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity
shall not be effective unless:
(A) the Participant's Spouse to whom the Survivor
Annuity or Preretirement Survivor Annuity is
payable consents in writing to the waiver election;
(B) the election designates a specific Beneficiary,
including any class of Beneficiaries or any
contingent Beneficiaries;
(C) the Spouse is the Participant's sole primary
Beneficiary, the Spouse consents to the Participant's
Beneficiary designation or consents to any change
in the Participant's Beneficiary designation without
any further spousal consent;
(D) the Spouse's consent acknowledges the effect of the
election; and
(E) the Spouse's consent is witnessed by a Plan
representative or notary public.
(F) Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective
unless the election designates a form of benefit
payment and the Spouse consents to the form of
payment designated by the Participant or consents
to any change in that designated form of payment
without any further spousal consent.
Notwithstanding this consent requirement, if the Participant establishes
to the satisfaction of a Plan representative that written consent may not be
obtained because there is no Spouse, or the Spouse cannot be located, a
waiver will be deemed a Qualified Election. If the Spouse is legally
incompetent to give consent, the Spouse's legal guardian, even if the guardian
is the Participant, may give consent. Also, if the Participant is legally
separated or the Participant has been abandoned (within the meaning of local
law) and the Participant has a court order to such effect, spousal consent is
not required unless a Qualified Domestic Relations Order described in Code
Section 414(p) provides otherwise. Any consent obtained under this
provision, or establishment that the consent of a Spouse may not be obtained,
shall be effective only with respect to the Spouse who signs the consent, or
in the event of a deemed Qualified Election, the designated spouse. A
consent that permits designations by the Participant without any requirement
of further consent by the Spouse must acknowledge that the Spouse has the
right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to
relinquish either or both of the rights. A revocation of a prior waiver may
be made by a Participant without the consent of the Spouse at any time before
the commencement of benefits. The number of revocations shall not be limited.
No consent obtained under this provision shall be valid unless the Participant
has received notice as provided in Section 11.3(e). After the Participant's
death, a Beneficiary may change the optional form of survivor benefit as
permitted by the Plan.
(vi) Qualified Joint and Survivor Annuity means, in the case of
a married Participant who does not die before the Annuity
Starting Date, an immediate annuity for the life of the
Participant with a Survivor Annuity for the life of the
Spouse which is equal to fifty percent (50%) of the amount
of the annuity which is payable during the joint lives of the
Participant and the Spouse and which is the amount of
benefit which can be purchased with the Participant's
Nonforfeitable Account Balance. In the case of an
unmarried Participant who does not die before the Annuity
Starting Date, the Qualified Joint and Survivor Annuity
requirement means an annuity for the life of the Participant
which is the amount of benefit which can be purchased
with the Participant's Nonforfeitable Account Balance.
(vii) Qualified Preretirement Survivor Annuity means an annuity
for the life of the Participant's Spouse, the payments under
which shall be equal to the amount of benefit which can be
purchased with the Nonforfeitable Account Balance of the
Participant. The Participant's Surviving Spouse will
receive the same benefit that would be payable if the
Participant had retired with an immediate Qualified Joint
and Survivor Annuity on the day before the Participant's
date of death.
(viii) Spouse, Surviving Spouse means the Spouse or Surviving
Spouse of the Participant, provided that a former spouse
will be treated as the Spouse or Surviving Spouse and a
current spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified
Domestic Relations Order described in Code Section 414(p).
(e) Notice Requirements.
(i) For a Qualified Joint and Survivor Annuity described in
Section 11.3(d)(vi), the Administrator shall provide, no less
than thirty (30) days and no more than ninety (90) days prior
to the Annuity Starting Date, to each Participant a written
explanation of:
(A) the terms and conditions of a Qualified Joint and
Survivor Annuity;
(B) the Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor
Annuity form of benefit;
(C) the rights of a Participant's Spouse; and
(D) the right to make, and the effect of, a revocation of
a previous election to waive the Qualified Joint and
Survivor Annuity.
(ii) For a Qualified Preretirement Survivor Annuity described
in Section 11.3(d)(vii), the Administrator shall provide,
within the applicable notice period for the Participant, to
each Participant a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such
manner comparable to the explanation provided for
meeting the requirements of Section 11.3(e)(i) applicable to
a Qualified Joint and Survivor Annuity.
The applicable notice period for the waiver of the Qualified
Preretirement Survivor Annuity is whichever of the following
periods ends last:
(A) the period beginning with the first day of the Plan
Year in which the Participant attains age thirty-two
(32) years and ending with the close of the Plan
Year preceding the Plan Year in which the
Participant attains age thirty-five (35) years;
(B) a reasonable period ending after the individual
becomes a Participant;
(C) a reasonable period ending after Section 11.3(e)(iii)
ceases to apply to the Participant; or
(D) a reasonable period ending after this Article first
applies to the Participant.
Notwithstanding the foregoing, notice must be provided within
a reasonable period ending after separation from Service in
the case of a Participant who separates from Service before
attaining age thirty-five (35) years.
For purposes of applying the preceding paragraph, a reasonable period
ending after the events described in (B), (C) and (D) is the end of the two
(2) year period beginning one (1) year prior to the date the applicable event
occurs and ending one (1) year after that date. In the case of a Participant
who separates from Service before the Plan Year in which the Participant
attains age thirty-five (35) years, notice shall be provided within the two
(2) year period beginning one (1) year prior to separation and ending one
(1) year after separation. If the Participant thereafter returns to
employment with the Employer, the applicable period for the Participant shall
be redetermined.
If a Participant enters the Plan after the first day of the Plan Year in
which the Participant attained age thirty-two (32) years, the Administrator
shall provide notice no later than the close of the second Plan Year succeeding
the entry of the Participant in the Plan.
(iii) Notwithstanding the other requirements of this Section
11.3(e), the respective notices prescribed by this Section
shall be given to a Participant even if the Plan fully
subsidizes the costs of a Qualified Joint and Survivor
Annuity or Qualified Preretirement Survivor Annuity. For
purposes of this Section 11.3(e), a plan fully subsidizes the
costs of a benefit if under the plan the failure to waive the
benefit by a Participant would not result in a decrease in
any plan benefit with respect to the Participant and would
not result in increased contributions from the Participant.
Notwithstanding the foregoing, the Committee may provide
the written explanation described above to the Participant
after his benefit commencement date. The Participant (and
his Spouse, if applicable) may waive the 30-day election
period if the distribution of the elected form of benefit
commences more than seven (7) days after the Committee
provides the Participant (and his Spouse, if applicable) the
written explanation.
Section 11.6 Notice and Explanation to Participants.
The Committee shall provide each Participant who has an Annuity-
Restricted Account within a reasonable period of time prior to the
commencement of benefits under the Plan a written explanation setting forth
the provisions of Section 11.3.
Section 11.7 Direct Rollover Optional Form of Benefit.
(a) Direct Rollover. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(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 Code Section
401(a)(9); the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
Employer Securities); and hardship distributions made pursuant
to Section 10.1(a)(i).
(ii) Eligible Retirement Plan. An eligible retirement plan is an
individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section
501(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(iii) Distributee. A distributee includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving Spouse and the Employee's or former
Employee's Spouse or former Spouse who is the alternate
payee under a qualified domestic relations order, as defined
in Code Section 414(p), 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.
Section 11.8 Election to Defer Receipt of Benefits.
Notwithstanding the foregoing, a Participant who leaves the employment
of the Employer before his or her Normal Retirement Date or Early Retirement
Date may elect to leave his or her Nonforfeitable Account Balance under the
management of the Trustee until Normal Retirement Date or Early Retirement
Date. The Trustee shall invest and reinvest and shall credit and charge the
Individual Account with its proportionate share of gains and losses of the
Trust Fund pursuant to Article 5 until the Nonforfeitable Account Balance is
paid out to the Former Participant under this Article. Any election made
under this Section shall be irrevocable and shall be made no later than
fourteen (14) days before the electing Participant becomes entitled to
receive his or her Nonforfeitable Account Balance in the Plan. Notwithstanding
the foregoing, a Participant who has elected to leave his or her Nonforfeitable
Account Balance under the management of the Trustee may later elect to have
the Account Balance transferred to any pension or profit sharing plan maintained
by another Employer in which the Participant has, at the time of the later
election, become a Participant under the transferee plan. Section 11.9 Election
of Form of Payment of Benefits.
(a) The Participant, Former Participant, or Beneficiary shall elect the
form or forms of payment of benefits permitted in Sections 11.1 and 11.5 which
the Committee and Trustee shall implement. Not earlier than ninety (90) days,
but not later than thirty (30) days, before the Participant's Annuity Starting
Date, the Committee must provide a benefit notice to a Participant who is
eligible to make an election under this Section. The Participant's Annuity
Starting Date means the first day of the first period for which an amount is
paid as an annuity or any other form. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he or she attains the later of Normal Retirement Age or
age 62.
(b) If a distribution is one to which Code Sections 401(a)(11) and 417
do not apply, such distribution may commence less than thirty (30) days after
the notice required under Treasury Regulations Section 1.411(a)-11(c) given,
provided that:
(i) the Plan Administrator clearly informs the Participant that
he or she has a right to a period of at least thirty (30) days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
(c) If a Participant, Former Participant, or Beneficiary makes an
election prescribed by this Section, the Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Account Balance pursuant to that
election. Any election under this Section is subject to the mandatory
distribution requirements of Sections 11.8 and 8.3 and the survivor annuity
requirements of Sections 11.2 and 11.3, if applicable. The Participant,
Former Participant or Beneficiary must make an election under this Section by
filing an election form with the Committee at any time before the Trustee
otherwise would commence to pay a Participant's Account Balance under the
applicable requirements of Articles 6, 8 and 11.
Section 11.10 Limit on Commencement of Distribution.
(a) Unless both the Employer and the Participant or Former Participant
agree otherwise, the payment of benefits to which a Participant, Former
Participant or Beneficiary is entitled shall in no event commence later than
the latest of the following dates:
(i) the 60th day after the close of the Plan Year in which such
Participant or Former Participant attains his Normal
Retirement Date;
(ii) the 60th day after the close of the Plan Year in which
occurs the date 10 years after the date such Participant or
Former Participant first commenced participation in the
Plan; or
(iii) the 60th day after the close of the Plan Year in which such
Participant or Former Participant terminates his
employment with all Employers.
(b) If payment does not commence earlier under Section 11.8(a), the
payment of benefits to which a Participant, Former Participant or Beneficiary
is entitled will be distributed or commence to be distributed to him not later
than his Required Beginning Date.
(c) The Committee may not direct the Trustee to distribute the
Participant's Nonforfeitable Account Balance, nor may the Participant elect
to make the Trustee distribute the Nonforfeitable Account Balance, under a
method of payment which, as of the Required Beginning Date, does not satisfy
the minimum distribution requirements under Code Section 401(a)(9) and the
applicable Treasury Regulations. All distributions required under
this Article shall be determined and made under Code Section 401(a)(9) and
applicable Treasury Regulations, including the minimum distribution incidental
benefit requirements of Treasury Regulation Section 1.401(a)(9)-2. With
respect to distributions made for calendar years beginning on or after January
1, 2002, the Plan will apply the minimum distribution requirements of section
401(a)(9) of the Code in accordance with the regulations under Section
401(a)(9) that were proposed on January 17, 2001, notwithstanding any
provision of the Plan to the contrary. The foregoing sentence shall continue
in effect until the end of the last calendar year beginning before the
effective date of final regulations under Section 401(a)(9) or such other
date as may be specified in guidance published by the Internal Revenue
Service. A mandatory distribution at the Participant's Required Beginning
Date will be in one lump sum unless the provisions of Section 11.2
or Section 8.3 apply. As of the first Distribution Calendar Year,
distributions may only be made in one of the optional forms of benefit
permitted by Sections 11.1, 11.2, and 11.5 hereof.
(d) Defined terms used in this Section 11.8 and not defined in this
Article or in Article 2 are defined in Section 8.3c(ii) and (d).
Section 11.11 Minority or Disability.
During the minority or disability of any person entitled to receive
benefits hereunder, the Committee may direct the Trustee to make payments
thereof to the guardian or other legal representative authorized under
applicable law to receive property on behalf of such person. If permitted
under applicable law, the Committee may direct such payments to be made
directly to such person, to such person's Spouse, to a relative of such person
or to any individual or institution having custody of such person. If such
applicable law does not permit payment of benefits to be made as provided
above in this Section 11.9, then such payments shall be made in such manner,
at such time, and to such person or entity as may be required or permitted
under such applicable law. Except as may otherwise be provided by applicable
law: (i) neither the Committee nor the Trustee shall be required to see to
the application of any payments made under this Section 11.9; and (ii) the
receipt of the payee shall be conclusive as to all interested parties.
Section 11.12 Unclaimed Benefit.
If at, after, or during the time when a benefit hereunder is payable to
any Participant, Former Participant or Beneficiary, the Committee, upon
request of the Trustee, or at its own instance, mails by registered or
certified mail to such Participant, Former Participant or Beneficiary at his
last known address, a written demand for his then address, or for satisfactory
evidence of his continued life, or both, and if such Participant, Former
Participant, or Beneficiary shall fail to furnish the same to the Committee
within two years from the mailing of such demand, then, unless otherwise
required by applicable law, the Committee may, in its sole discretion,
determine that such Participant, Former Participant or Beneficiary has
forfeited his right to such benefit and may declare such benefit, or any
unpaid portion thereof, terminated as if the death of the Participant, Former
Participant or Beneficiary (with no surviving Beneficiary) had occurred on
the date of the last payment made thereon or on the date such Participant,
Former Participant or Beneficiary first became entitled to receive benefit
payments, whichever is later. All such forfeitures shall be used to reduce
future Employer Contributions, shall at all times remain Trust Assets, and in
no event shall they escheat to any governmental unit under any escheat law.
If such applicable law does not permit this disposition of unclaimed benefits
then such unclaimed benefits shall be administered in such manner as may be
required or permitted under such applicable law.
* * * * * * *
ARTICLE TWELVE
--------------
TOP HEAVY PROVISIONS
Section 12.3 Application.
This Article shall apply for any Plan Year beginning with the first Plan
Year in which the Plan is determined to be top-heavy.
Section 12.4 Top-Heavy Plan Status/Super Top-Heavy Plan Status.
This Plan shall be a Top-Heavy Plan in any Plan Year in which, as of the
Determination Date, (a) the Present Value of Accrued Benefits of Key
Employees, or (b) the sum of the Aggregate Accounts of Key Employees of any
plan of an Aggregation Group, exceeds sixty percent (60%) of the Present Value
of Accrued Benefits or Aggregate Accounts of all Participants under this Plan
and any plan of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but the
Participant was a Key Employee for any prior Plan Year, the Participant's
Aggregate Account balance shall not be taken into account in determining
whether this Plan is a Top-Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top-Heavy Group) as further defined in Code Section
416(g) and the applicable Treasury regulations.
This Plan shall be a Super Top-Heavy Plan for any Plan Year in which, as
of the Determination Date, (a) the Present Value of Accrued Benefits of Key
Employees, or (b) the sum of the Aggregate Accounts of Key Employees of any
plan of an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Participants under
this Plan and any plan of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but the
Participant was a Key Employee for any prior Plan Year, the Participant's
Aggregate Account balance shall not be taken into account in determining
whether this Plan is a Super Top-Heavy Plan (or whether any Aggregation Group
which includes this Plan is a Top-Heavy Group) as further defined in Code
Section 416(g) and the applicable Treasury regulations.
For purposes of determining Top-Heavy and Super Top-Heavy status, the
following definitions shall apply:
(a) Aggregate Account means, as of the Determination Date, the sum of:
(i) the account balances of the Savings Account, Discretionary
Employer Contribution Account, Matching Employer
Contribution Account and ESOP Transfer Account as of
the most recent Valuation Date occurring within a twelve
(12) month period ending on the Determination Date;
(ii) the contributions that would be allocated as of a date not
later than the Determination Date, even though those
amounts are not yet made or required to be made;
(iii) any plan distributions made during the Determination
Period (However, in the case of distributions made after the
Valuation Date and prior to the Determination Date, such
distributions are not included as distributions for Top-Heavy
purposes to the extent that the distributions are
already included in the Participant's Aggregate Account
balance as of the Valuation Date.); and
(iv) any Employee contributions, whether voluntary or
mandatory (However, amounts attributable to Participant
Deductible Voluntary Contributions shall not be considered
to be a part of the Participant's Aggregate Account
balance.).
(v) Regarding unrelated rollovers and plan-to-plan transfers
(those which are (A) initiated by the Employee and (B)
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides for
rollovers or plan-to-plan transfers, an unrelated rollover or
plan-to-plan transfer shall be considered as a distribution
for purposes of this Section. If this Plan is the plan
accepting an unrelated rollover or plan-to-plan transfer, an
unrelated rollover or plan-to-plan transfer shall not be
considered as part of the Participant's Aggregate Account
balance.
(vi) Regarding related rollovers and plan-to-plan transfers
(those either (A) not initiated by the Employee or (B) made
to a plan maintained by the same Employer), if this Plan
provides for rollovers or plan-to-plan transfers, a related
rollover or plan-to-plan transfer shall be considered as a
distribution for purposes of this Section. If this Plan is the
plan accepting a related rollover or plan-to-plan transfer, a
related rollover or plan-to-plan transfer shall be considered
as part of the Participant's Aggregate Account balance,
irrespective of the date on which the related rollover or
plan-to-plan transfer is accepted.
(b) Aggregation Group means either a Required Aggregation Group or
a Permissive Aggregation Group as hereinafter determined.
(i) Required Aggregation Group means the group of plans
composed of (A) each plan of the Employer in which a Key
Employee is a Participant or participated at any time during
the Determination Period, regardless of whether the plan
has terminated; and (B) each other plan of the Employer
which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections
401(a)(4) or 410, which shall be aggregated.
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.
(ii) Permissive Aggregation Group means the Required
Aggregation Group plus any other plan not required to be
included in the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to satisfy
Code Sections 401(a)(4) and 410.
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.
(iii) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year
shall be aggregated to determine whether the plans are Top-
Heavy Plans.
(c) Determination Date means for any Plan Year (i) the last day of
the preceding Plan Year, or (ii) in the case of the first Plan Year of
the Plan, the last day of the first Plan Year.
(d) Determination Period means the five (5) year period ending on the
Determination Date.
(e) Employer means the Employer that adopts this Plan. Related
Employers shall be considered a single Employer for purposes of applying the
limitations of these top-heavy rules.
(f) Excluded Employees means any Employee who has not performed any
Service for the Employer during the five (5) year period ending on the
Determination Date. Excluded Employees shall be excluded for purposes of a
Top-Heavy determination.
(g) Key Employee means any Employee or Former Employee, or Beneficiary
of the Employee, who, for any Plan Year in the Determination Period is:
(i) An officer of the Employer having Compensation from the
Employer and any Related Employer greater than fifty
percent (50%) of the amount in effect under Code Section
415(b)(1)(A);
(ii) One of the ten (10) Employees having Compensation from
the Employer and any Related Employer of more than the
limitation in effect under Code Section 415c(1)(A) and
owning (or considered as owning within the meaning of
Code Section 318) the largest interests in the Employer;
(iii) A Five Percent Owner of the Employer (Five Percent
Owner means any person owning, or considered as owning
within the meaning of Code Section 318, more than five
percent (5%) of the outstanding stock of the Employer or
stock possessing more than five percent (5%) of the total
combined voting power of all stock of the Employer; or in
the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits
interest in the Employer.); or
(iv) A One Percent Owner of the Employer having
Compensation from the Employer of more than $150,000
(One Percent Owner means any person having
Compensation from the Employer and any Related
Employer in excess of $150,000 and owning, or considered
as owning within the meaning of Code Section 318, more
than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%)
of the total combined voting power of all stock of the
Employer; or in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital
or profits interest in the Employer.).
(v) Notwithstanding the foregoing, Key Employee shall have
the meaning set forth in Code Section 416(i), as amended.
(vi) For purposes of determining whether an Employee or
Former Employee is an officer under this subsection (g), an
officer of the Employer shall have the meaning set forth in
the regulations under Code Section 416(i).
(vii) For purposes of this Section, Compensation means
Compensation determined under Section 2.32 for the
definition of a Highly Compensated Employee.
(viii) For purposes of determining ownership hereunder,
employers that would otherwise be aggregated as Related
Employers shall be treated as separate employers.
(h) Non-Key Employee means any Employee or Former Employee, or
Beneficiary of the Employee, who is not a Key Employee.
(i) Present Value of Accrued Benefit. Solely for the purpose of
determining if the Plan, or any other plan included in a Required
Aggregation Group of which this Plan is a part, is a Top-Heavy
Plan, the Accrued Benefit of a Non-Key Employee shall be
determined under (i) the method, if any, that uniformly applies for
accrual purposes under all plans maintained by the Related
Employers, or (ii) if there is no uniform method, in accordance
with the slowest accrual rate permitted under the fractional accrual
method described in Code Section 411(b)(1)(C). To calculate the
Present Value of Accrued Benefits from a defined benefit plan, the
Committee will use the actuarial assumptions for interest and
mortality only, prescribed by the defined benefit plan(s) to value
benefits for Top-Heavy purposes. If an aggregated plan does not
have a Valuation Date coinciding with the Determination Date, the
Committee must value the Accrued Benefits in the aggregated plan
as of the most recent Valuation Date falling within the twelve (12)
month period ending on the Determination Date, except as Code
Section 416 and applicable Treasury regulations require for the
first and second plan year of a defined benefit plan. The
Committee will determine whether a plan is Top-Heavy by
referring to Determination Dates that fall within the same calendar
year.
(j) Top-Heavy Group means an Aggregation Group in which, as of
the Determination Date, the sum of:
(i) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group; and
(ii) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
(k) Valuation Date means the Determination Date defined above.
Section 12.5 Top-Heavy Minimum Allocation.
(a) Minimum Allocation. Notwithstanding the foregoing, for any Plan
Year in which the Plan is determined to be Top-Heavy, the amount of Employer
Non-Elective Contributions and Forfeitures allocated to the Individual
Account of each Non-Key Employee shall be equal to the lesser of three
percent (3%) of each Non-Key Employee's Compensation or the highest
contribution rate for the Plan Year made on behalf of any Key Employee.
However, if a defined benefit plan maintained by the Employer which benefits
a Key Employee depends on this Plan to satisfy the nondiscrimination rules of
Code Section 401(a)(4) or the coverage rules of Code Section 410 (or another
plan benefiting the Key Employee so depends on the defined benefit plan), the
top heavy minimum allocation is three percent (3%) of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key Employee.
(b) Compensation. For purposes of this Section, Compensation means
Compensation defined in Section 2.12 except (i) Compensation does not include
Elective Contributions, and (ii) any exclusions from Compensation (other than
the exclusion of Elective Contributions and the exclusions described in clauses
(i) through (v) of Section 2.12(a)) do not apply. Notwithstanding the
foregoing, effective January 1, 1998, Compensation, for purposes of this
Section, shall include elective contributions (as defined in Code Section
402(g)(3)) and any amount which is contributed or deferred by the Employer at
the election of the Employee and which is not includable in the gross income
of the Employee by reason of Code Sections 125 or 457 and, effective January
1, 2001, Code Section 132(f)(4). Notwithstanding the definition of
Compensation in Section 2.12, the period preceding a Participant's Entry Date
shall be included in determining the minimum top-heavy allocation provided by
this Section.
(c) Contribution Rate. For purposes of this Section, a Participant's
contribution rate is the sum of Employer Contributions (not including Employer
Contributions to Social Security) and Forfeitures allocated to the Participant's
Account for the Plan Year divided by his or her Compensation for the entire
Plan Year. To determine a Participant's contribution rate, the Committee must
treat all qualified top-heavy defined contribution plans maintained by the
Employer (or by any Related Employers described in Section 2.51) as a single
plan. For purposes of this Section, the following rules apply:
(i) Savings Contributions on behalf of Key Employees are
taken into account in determining the minimum required
contribution under Code Section 416c(2). However,
Savings Contributions on behalf of Employees other than
Key Employees may not be treated as Employer
Contributions for the minimum contribution or benefit
requirement of Code Section 416.
(ii) Matching Employer Contributions allocated to Key
Employees are treated as Employer Contributions for
determining the minimum contribution or benefit under
Code Section 416. However, if a plan utilizes Matching
Contributions allocated to Employees other than Key
Employees as Employee Contributions or Elective
Contributions to satisfy the minimum contribution
requirement, the Matching Contributions are not treated as
Matching Contributions for applying the requirements of
Code Section 401(k) and 401(m).
(iii) Qualified Non-Elective Contributions described in Code
Section 401(m)(4)c may be treated as Employer
Contributions for the minimum contribution or benefit
requirement of Code Section 416.
(d) Participant Entitled to Top-Heavy Minimum Allocation. The
minimum allocation under this Section shall be provided to each
Non-Key Employee who is a Participant and is employed by the
Employer on the last day of the Plan Year, whether or not the
Participant has been credited with one thousand (1,000) Hours of
Service for the Plan Year. The minimum allocation under this
Section shall not be provided to any Participant who was not
employed by the Employer on the last day of the Plan Year. The
provisions of this Section shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of
the Employer under which the minimum allocation or benefit
requirements under Code Section 416c(1) or c(2) are met for the
Participant.
(e) Compliance. The Plan will satisfy the top-heavy minimum
allocation under this Section. The Committee first will allocate the
Employer Contributions (and Participant Forfeitures, if any) for the
Plan Year pursuant to the allocation formula under Sections 5.4
and 5.6. The Employer then will contribute an additional amount
for the Individual Account of any Participant entitled under this
Section to a top-heavy minimum allocation and whose contribution
rate for the Plan Year, under this Plan and any other plan
aggregated under this Section, is less than the top-heavy minimum
allocation. The additional amount is the amount necessary to
increase the Participant's contribution rate to the top-heavy
minimum allocation. The Committee will allocate the additional
contribution to the Account of the Participant on whose behalf the
Employer makes the contribution.
Section 12.6 Amendments.
If the Plan is determined to be top-heavy, the vesting schedule in
Section 6.2c shall continue to apply notwithstanding a determination in a
later Plan Year that the Plan is no longer top-heavy unless the Company shall
amend the Plan to provide otherwise. No such amendment shall be effective
unless, in the event it changes the Plan's applicable vesting schedule
(determined in accordance with regulations under Code Section 411), each
Participant's Nonforfeitable percentage of his Accounts (determined as of the
later of the date such amendment is adopted or becomes effective) is not less
than such percentage computed under Section 6.2c without regard to such
amendment and unless, in such event, each Participant having not less than
three (3) Years of Service is permitted to elect (pursuant to regulations
under Code Section 411) to have his nonforfeitable percentage computed under
the Plan without regard to such amendment
* * * * * * *
ARTICLE THIRTEEN
----------------
REPURCHASE OF COMPANY STOCK;
NON-TERMINABLE PROTECTIONS AND RIGHTS
Section 13.3 Employee Stock Ownership Plan.
The ESOP Accounts in the Plan are specifically designated an "employee
stock ownership plan" within the meaning of Code Section 4975(e)(7), ERISA
Section 407(d)(6), and applicable regulations thereunder. This Article
applies solely to the Company Stock held in ESOP Accounts.
Section 13.4 Put Option.
A share of Company Stock shall be subject to a put option if it is not
publicly traded, or if it is subject to a trading limitation, when distributed.
The Employer shall issue a put option to each Participant or Former
Participant receiving a distribution of Company Stock from the Plan required
under the conditions described in the foregoing sentence, in accordance with
the terms set forth in this Section:
(a) Exercise of Option. The put option shall be exercisable only by a
Participant or Beneficiary; by a donee of the Participant or
Beneficiary; or by a person, including an estate or its distributees,
to whom such Company Stock has passed because of the death of
the Participant.
(b) Rights Under Put Option. The put option shall give to the eligible
holder the right to put such shares to the Employer. Under no
circumstances may it bind the Plan or Trust, but it may grant the
Plan or Trust an option to assume the rights and obligations of the
Employer at the time it is exercised; if it is known, at the time such
stock is acquired, that Federal or state law will be violated if the
Employer honors such put option, it must permit the stock subject
thereto to be put, in a manner consistent with such law, to a third
party (e.g., an affiliate or a shareholder of the Employer other than
the Plan or the Trust) that has substantial net worth at the time such
debt is incurred and whose net worth is reasonably expected to
remain substantial.
(c) Period of Option.
(i) The put option must be exercisable at least during a sixty
(60) day period following the date of distribution from the
Trust to the Participant or Beneficiary and for an additional
sixty (60) day period during the Plan Year immediately
following the Plan Year in which the first option period
ends;
(ii) In the case of Company Stock that is publicly traded
without limitation when distributed by the Trust but ceases
to be so traded within the same Plan Year as the
distribution, the Employer shall notify each holder of such
stock in writing on or before the tenth day after such stock
ceased to be so traded that for at least a sixty (60) day
period during such Plan Year, and for an additional sixty
(60) day period during the following Plan Year, such stock
is subject to a put option. Such notice must inform such
holders of the terms of such put option, which shall satisfy
the requirements of this Section;
(iii) The period during which it is exercisable shall not include
any time when a distributee is unable to exercise it because
the party bound by it is prohibited from honoring it by
applicable Federal or state law;
(iv) The put option shall be exercisable by the holder notifying
the Employer in writing that it is being exercised; and
(v) The price at which it is exercisable shall be the fair market
value of the stock then prevailing, determined as of the
most recent Accounting Date; provided, however, that such
value shall be determined as of the date the put is honored
if the holder of such put is a "disqualified person" (as
defined under Section 4975 of the Code).
(d) Option Rights Not Affected by Amendment. The rights provided
to Participants under this Article shall be non-terminable and no amendment
to this Plan shall affect these rights except such amendments to this Article
as may be required to assure the continuing qualification of the Plan under
the Code.
Section 13.5 Payment of Purchase Price.
If a Participant or Former Participant exercises a put option pursuant
to Section 13.2, the purchaser may make payment by delivery of a note with
payments commencing not more than thirty (30) days after the exercise of the
put option. The payment obligation will be satisfied by the delivery of said
note, which must meet the following requirements:
(a) the note must bear a reasonable rate of interest determined at
Closing;
(b) the purchaser must provide adequate security for the note;
(c) the note must provide for equal annual installments not to exceed
five (5) years, with interest payable with each installment, the first
installment due and payable thirty (30) days after the exercise of
the Put Option;
(d) the note must provide for acceleration upon thirty (30) days'
default of the payment on interest or principal; and
(e) the note must grant to the maker the right to prepay the note in
whole or in part at any time or times without penalty; provided, however, the
purchaser must not have the right to make any prepayment during the calendar
year or fiscal year of the Participant (Beneficiary) in which Closing occurs.
Payment under a put option may not be restricted by the provisions of a loan
or any other arrangement, including the terms of the Company's articles
of incorporation, unless so required by applicable state law.
Section 13.6 Notice.
A person has given notice under this Section when the person deposits the
notice in the United States mail, first class, postage prepaid, addressed to
the person entitled to the Notice at the address currently listed for the
person in the Committee records. Any person affected by this Section has the
obligation to inform the Committee of any change of address.
Section 13.7 Non-terminable Protections and Rights.
Except as provided in this Article, no Company Stock may be subject to a
put, call, or other option, or buy-sell or similar arrangement when held by and
when distributed from an ESOP Account, whether or not the Plan then qualifies
as an employee stock ownership plan. The protections and rights granted in
this Article and in Section 11.1 pursuant to Code Section 409(o) attributable
to stock acquired after December 31, 1986, are non-terminable and shall
continue to exist under the terms of this Plan with regard to Company Stock
that is held in an ESOP Account or by any Participant or other person for
whose benefit such protections and rights have been created. Neither the
failure of the Plan to qualify as an employee stock ownership plan, nor an
amendment of the Plan shall cause a termination of such protections and
rights.
Section 13.8 Investment in Company Stock.
(a) Type of Company Stock. The Trustee shall invest ESOP Accounts
primarily in Qualifying Company Stock to the extent practicable and may
invest one hundred percent (100%) of the ESOP Accounts in Company Stock. The
Company Stock may be Treasury Stock which has been purchased by the Employer;
stock which has been authorized, but never issued by the Employer; Company
Stock traded on a public market; or Company Stock owned by shareholders of
the Employer.
(b) Purchase Price. For the purchase of Company Stock, from the
Parent or any Employer or from a shareholder of the Parent or any Employer,
the Trustee shall not pay more than fair market value as determined by the
current market price of the Company Stock, if there is a market, and if there
is not a market for the stock, then as determined by an independent appraisal.
All valuations of Company Stock which is not readily tradable on an
established securities market, with respect to activities carried on by the
Plan, must be made by an independent appraiser meeting requirements similar
to requirements of the Regulations prescribed under Code Section 170A-1. For
the purchase of Company Stock from a Disqualified Person, the value of the
Company Stock must be determined as of the date of the transaction. For any
other purchase, the value shall be based on a current valuation.
Notwithstanding the preceding provisions of this Section, the Trustee may
purchase Company Stock at a price lower than that determined in accordance
with the preceding provisions of this Section 13.6(b) from any source
whatsoever. If a public market is made for the Company Stock, the purchase
price shall be the average of the closing prices on the OTC for the last
three days for which such prices are quoted in the Wall Street Journal
preceding the purchase.
(c) Voting Rights.
(i) Each Participant shall be entitled to direct the Trustee as to
the manner in which voting rights with respect to shares of
Company Stock allocated to such Participant's ESOP
Accounts shall be exercised.
(ii) In order to implement the voting rights granted in this
Section, the Plan Administrator shall furnish the Trustee
and Participants who have an ESOP Account with a notice
or information statement which complies with both the law
and the Plan Sponsor's charter and bylaws applicable to
security holders in general. Allocated shares of Company
Stock with respect to which timely voting instructions have
not been received shall be voted by the Trustee on each
matter in the same proportion as shares with respect to
which such instructions have been received on such matter.
(d) Tender Offer
(i) Notwithstanding any other provisions of the Plan or Trust,
the provisions of this Section shall govern the tendering of
shares of Company Stock held in ESOP Accounts. Upon
commencement of a tender offer for any securities held in
ESOP Accounts that are Company Stock, the Plan
Administrator shall notify each Participant of such tender
offer, utilize its best efforts to timely distribute or cause
to be distributed to the Participants such information as is
distributed to shareholders of the Employer in connection
with such tender offer, and shall provide a means by which
the Participant can instruct the Trustee whether or not to
tender the Company Stock allocated to such Participant's
ESOP Accounts. The Plan Administrator shall provide the
Trustee with a copy of any materials provided to
Participants. Each Participant shall have the right to
instruct the Trustee as to the manner in which the Trustee is
to respond to the tender offer for any or all of the Company
Stock allocated to such Participant's ESOP Accounts. The
Trustee shall respond to the tender offer with respect to the
Company Stock as instructed by the Participant. Allocated
shares of Company Stock with respect to which timely
tender instructions have not been received shall be tendered
by the Trustee in the same proportion as shares with respect
to which such instructions have been received.
(ii) A Participant who has directed the Trustee to tender shares
of Company Stock allocated to such Participant's ESOP
Accounts may, at any time, prior to the tender offer
withdrawal date, instruct the Trustee to withdraw, and the
Trustee shall withdraw such shares of Company Stock from
the tender offer prior to the withdrawal deadline. A
Participant shall not be limited as to the number of
instructions to tender or withdraw which he may give to the
Trustee.
(iii) The Trustee shall credit the proceeds received in exchange
for the tendered Company Stock allocated to the ESOP
Account of each Participant who instructed the Trustee to
so tender, to that Participant's respective ESOP Account.
The Trustee shall exercise its best efforts to invest the
proceeds from such tender, whether cash or securities, in
conformity with the requirements of Code Section 4975.
(e) Shareholder Agreements. The Trustee may enter into agreements
with shareholders to purchase shares of Company Stock under which the Trustee
is granted an option to purchase all or a portion of the shares of Company
Stock owned by the shareholders on the death of the shareholder or shareholders.
To provide for the funding of the purchase of shares of Company Stock, the
Trustee may apply for and pay premiums on contracts of life insurance on the
life of such shareholder for the benefit of the Trust Fund as a whole,
provided, however, that the Trustee may not enter into any agreement which
would obligate the Plan and Trust to purchase Company Stock from a particular
shareholder at an indefinite time determined upon the happening of an event
such as death of the shareholder.
Section 13.9 Partial Diversification of Investment.
(a) For purposes of this Section, the following definitions apply:
(i) "Qualified Participant" means any Employee who has
completed at least ten (10) years of participation under the
Plan and has attained age fifty-five (55) years.
(ii) "Qualified Election Period" means the six (6) Plan Year
period beginning with the Plan Year in which the
Participant becomes a Qualified Participant.
(iii) "Diversification Election Interval" means the span of ninety
(90) days after the close of each Plan Year within a
Qualified Participant's Qualified Election Period.
(b) A Qualified Participant may elect within the Diversification
Election Interval during his Qualified Election Period to direct the Trustee
on the investment of: (a) not more than twenty-five percent (25%) of the
Qualified Participant's ESOP Account Balance (excluding accumulated employee
contributions) at the end of the Plan Year, reduced by amounts previously
diversified, during the first five (5) years of his Qualified Election Period;
and (b) not more than fifty percent (50%) of the Qualified Participant's ESOP
Account Balance (excluding accumulated employee contributions) at the end of
the Plan Year, reduced by amounts previously diversified, during the sixth
(6th) year of his Qualified Election Period.
The Trustee shall complete diversification of a Qualified Participant's
investment in accordance with a Qualified Participant's Election no later than
ninety (90) days after the close of the Diversification Election Interval. The
Trustee shall satisfy this requirement: (a) by distributing to the Participant
an amount equal to the amount for which the Participant elected diversification;
or (b) by substituting for the amount of the Company Stock for which the
Participant elected diversification an equivalent amount of participant-directed
investments in other Investment Funds offered in the Plan pursuant to
Article 7.
* * * * * * *
ARTICLE FOURTEEN
----------------
ADOPTION BY OTHER ORGANIZATIONS
Section 14.3 Procedure for Adoption.
Any corporation or other organization with employees, now in existence
or hereafter formed or acquired, which is not already an Employer under the
Plan and which is otherwise legally eligible, may, in the future, with the
consent and approval of the Company, by resolution or decision of its own
board or governing authority, adopt the Plan and the Trust, for all or any
classification of persons in its employment, and thereby, from and after the
effective date specified in such resolution or decision, become an Employer.
The adoption resolution or decision may contain such specified changes and
variations in the terms and provisions of the Plan or the Trust Agreement as
may be acceptable to the Company and the Trustee. The adoption resolution or
decision shall become, as to such adopting organization and its Employees, a
part of the Plan and the Trust Agreement. It shall not be necessary for the
adopting organization to sign or execute the Plan or the Trust Agreement.
The effective date of the Plan for any such adopting organization shall be
that stated in the resolution or decision of adoption, and from and after
such effective date such adopting organization shall assume all the rights,
obligations, and liabilities of an Employer under the Plan and the Trust
Agreement, and shall be included within the meaning of the term Employer. The
administrative powers and control of the Company, as provided in the Plan and
the Trust Agreement, including the right of amendment and of appointment and
removal of the Committee, the Trustee, and their successors, shall be the sole
right of the Company and shall not be diminished by reason of the participation
of any such adopting organization. Any participating Employer may withdraw
from the Plan and the Trust at any time without affecting other Employers not
withdrawing, by complying with the provisions of the Plan and the Trust
Agreement. Separate records shall be kept as to each Employer and its
Employees.
* * * * * * *
ARTICLE FIFTEEN
---------------
AMENDMENT AND TERMINATION OF PLAN
Section 15.3 Amendment of the Plan.
The Company may, without the consent of any other party, make from
time to time any amendment or amendments to the Plan which do not operate
retroactively to reduce or divest the then-vested interest in any
Discretionary Employer Contribution Account, Matching Employer Contribution
Account, W & B Plan Rollover Account, or ESOP Transfer Account or to reduce
or divest any benefit then payable hereunder. Each such amendment shall be
in writing, signed by a duly authorized officer of the Company and shall
become effective as of the date specified therein. In addition, no such
amendment shall (i) reduce the vested percentage of any Participant with
respect to Employer contributions made either before or after the effective
date of the amendment; (ii) eliminate or reduce an early retirement benefit or
a retirement-type subsidy or eliminate an optional form of benefit with
respect to benefits attributable to service before the amendment; or
(iii) restrict the availability of an "alternative form of benefit" to a
certain select group or classification of Participants or Beneficiaries which
favor the "prohibited group," or restrict or deny a Participant through the
withholding of consent or the exercise of discretion by some person or
persons other than the Participant (and, where relevant, his Spouse) of an
alternative form of benefit. For purposes of this Section 15.1, Plan
provisions will be considered to favor the prohibited group if the group of
Employees to whom the benefit is available does not satisfy either the 70%
test of Code Section 410(b)(1)(A) or the nondiscriminatory classification
test of Code Section 410(b)(1)(B). For purposes of this Section 15.1, an
alternative form of benefit encompasses the different forms of benefit payment
available under the Plan which provide that (a) a Participant's benefits under
the Plan may be paid in more than one form, or (b) payment of a particular
form of benefits may commence at some time earlier or later than the normal
date for the commencement of such benefit.
Whenever Participating Employers have elected to adopt this Plan,
amendment of this Plan by the Plan Sponsor shall be effective upon the written
action of the Plan Sponsor. Each Participating Employer shall be deemed to
have authorized irrevocably the Plan Sponsor or any person(s) duly authorized
by resolution of the Board of Directors of the Plan Sponsor, to amend and
modify this Plan in any manner it deems necessary or desirable, retroactively
or prospectively, subject to the provisions of this Article.
Section 15.4 Right to Terminate.
An Employer may at any time terminate the Plan with respect to its
Employees, pursuant to resolution or decision of the Board of Directors or
other governing authority of such terminating Employer. Upon termination with
respect to an Employer, the Committee shall direct the Trustee to distribute
the share of the Trust Assets allocable to the Employees of such Employer, as
provided in Section 15.4. If the Plan is terminated with respect to fewer
than all Employers, the Plan shall continue in effect for Employees of the
remaining Employers.
Section 15.5 Consolidation or Merger.
Upon an Employer's liquidation, dissolution, bankruptcy, or insolvency,
or upon its sale, consolidation or merger to or with another organization
that is not an employer hereunder, in which such Employer is not the surviving
company, the Plan will terminate insofar as that Employer is concerned unless
the successor to that Employer assumes the duties and responsibilities of
such Employer by adopting the Plan and Trust, by combining the Plan and Trust
with an existing plan and trust of such successor with the consent and
agreement of that Employer, or by the establishment of a separate plan and
trust to which the Trust Assets held on behalf of the Employees of such
Employer shall be transferred with the consent and agreement of that Employer.
If the successor to an Employer is itself an Employer, such successor shall
succeed to all the rights and duties under the Plan and Trust of the
Employers involved.
Section 15.6 Liquidation of Trust Fund Upon Termination.
Upon a complete or partial termination of the Plan with respect to any
Employer, the Discretionary Employer Contribution Accounts, Matching
Employer Contribution Accounts, W & B Plan Rollover Accounts, and ESOP
Transfer Accounts, if any, of the Participants, Former Participants and
Beneficiaries affected thereby shall become fully vested and Nonforfeitable,
and the proportionate interests of such Participants, Former Participants and
Beneficiaries in the Trust Assets, as determined by the Committee, shall be
distributed as soon as practicable after provision is made for the expenses of
administration, termination and liquidation. Distributions due to termination
of the Plan will be made in accordance with the methods of distribution
provided for in the Plan.
Section 15.7 Permanent Discontinuance of Contributions.
Upon a permanent discontinuance of contributions with respect to any
Employer, the Discretionary Employer Contribution Accounts, Matching
Employer Contribution Accounts, W & B Plan Rollover Accounts, and ESOP
Transfer Accounts shall become fully vested and nonforfeitable and, unless
such Employer provides by appropriate resolution that the Plan and Trust will
continue for the purpose of holding, investing, and distributing Trust Assets
pursuant to other provisions of the Plan and Trust Agreement, the
proportionate interest of the Participants, Former Participants and
Beneficiaries of such Employer in the Trust Assets, as determined by the
Committee, shall be distributed (subject to the restrictions of Section
15.4(b)) as soon as practicable after provision is made for the expenses of
administration, termination and liquidation.
Section 15.8 Consolidation or Merger of Plan.
In the event that the Plan is merged or consolidated with any other plan,
or in the event that any assets or liabilities of the Plan are transferred to
any other plan, the benefit any Participant, Former Participant or Beneficiary
under the Plan would be entitled to receive if such other plan were terminated
immediately after such merger, consolidation, or transfer shall be equal to
or greater than the benefit such Participant, Former Participant or
Beneficiary would be entitled to receive if the Plan terminated immediately
before such merger, consolidation, or transfer.
* * * * * * *
ARTICLE SIXTEEN
---------------
GENERAL PROVISIONS
Section 16.3 Non-Guarantee of Employment.
Nothing contained in the Plan or Trust Agreement shall be construed as a
contract of employment between any person and an Employer, as a right of any
person to be continued in the employment of an Employer (or such entity), or
as a limitation of the right of an Employer (or such entity) to discharge any
person, with or without cause.
Section 16.4 Manner of Payment.
Subject to the provisions of Sections 11.7 and 11.8, wherever and
whenever it is herein provided for payments or distributions to be made, said
payments or distributions shall be made directly into the hands of the
Participant, Former Participant, Beneficiary, or their respective
administrators, executors, or guardians, as the case may be. Deposit to the
credit of any such person in any bank or trust company selected by such
person shall be deemed to be payment into his hands.
Section 16.5 Nonalienation of Benefits.
(a) In General. Except as otherwise provided below in this Section
16.3, interests of Participants, Former Participants and Beneficiaries under
the Plan and benefits payable under the Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, disposition, garnishment, execution, or levy of any kind,
either voluntary or involuntary, including any liability for alimony or other
payments for property settlement or support of a Spouse or former Spouse, or
for any other relative of the Participant, Former Participant or Beneficiary,
but excluding devolution by death or mental incompetency, prior to actually
being received by the person entitled to the benefits under the terms of the
Plan; any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits payable
hereunder shall be void; the Trust Assets shall not in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements or
torts of any person entitled to benefits hereunder.
(b) Qualified Domestic Relations Order. Notwithstanding anything to
the contrary above, however, if the Committee determines that a domestic
relations order is a "qualified domestic relations order" as defined in
Section 206(d)(3) of ERISA, benefits shall be payable in accordance with the
applicable requirements of any such order and in accordance with the
requirements of Section 206(d)(3) of ERISA. To the extent of any conflict
between the terms of any such order and the terms of ERISA Section 206(d)(3),
the latter shall control in all respects. To the extent provided in an order,
an "alternate payee," as described in Code Section 414(p), may elect to
receive an immediate distribution of such payee's benefits from this Plan.
Such a distribution may be received from any Account, as applicable.
(c) Certain Judgments and Settlements. Nothing contained in this Plan
shall prevent the Trustee from complying with a judgment or settlement entered
into on or after August 5, 1997 which requires the Trustee to reduce a
Participant's benefits under the Plan by an amount that the Participant is
ordered or required to pay to the Plan if each of the following criteria are
satisfied:
(i) The order or requirement must arise:
(A) under a judgment or conviction for a crime
involving the Plan;
(B) under a civil judgment (including a consent order or
decree) entered by a court in an action brought in
connection with an actual or alleged violation of
Part 4 of Title I of ERISA; or
(C) cunder a settlement agreement with either the
Secretary of Labor or the Pension Benefit Guaranty
Corporation and the Participant in connection with
an actual or alleged violation of Part 4 of title I of
ERISA by a fiduciary or any other person.
(ii) The decree, judgment, order or settlement must expressly
provide for the offset of all or part of the amount ordered or
required to be paid to the Plan against the Participant's
benefits under the Plan.
(iii) In addition, if the joint and survivor annuity requirements
of Code Section 401(a)(11) apply with respect to
distributions from the Plan to the Participant and the
Participant has a spouse at the time at which the offset is
to be made, then one of the following three conditions must
be satisfied:
(A) Such spouse has consented in writing to such offset
and such consent is witnessed by a notary public or
representative of the Plan (or it is established to the
satisfaction of a Plan representative that such
consent may not be obtained by reason of
circumstances described in Code Section 417(a)(2)(B)),
or an election to waive the right of the spouse to either
a qualified joint and survivor annuity or a qualified
preretirement survivor annuity is in effect
in accordance with the requirements of Code
Section 417(a);
(B) Such spouse is ordered or required in such
judgment, order, decree, or settlement to pay an
amount to the Plan in connection with a violation of
part 4 of subtitle B of title I of ERISA; or
(C) In such judgment, order, decree, or settlement,
such spouse retains the right to receive the survivor
annuity under a qualified joint and survivor annuity
provided pursuant to section 401(a)(11)(A)(i) and
under a qualified preretirement survivor annuity
provided pursuant to Code Section 401(a)(11)(A)(ii),
determined in accordance with Code Section 401(a)(13)(D).
Section 16.6 Titles for Convenience Only.
Titles of the Articles, Sections and Subsections hereof are for
convenience only and shall not be considered in construing the Plan.
Section 16.7 Governing Law.
Except as may otherwise be required by applicable federal law, the Plan
and each of its provisions shall be construed and their validity determined
by the laws of the State of Texas.
Section 16.8 Contributions Contingent Upon Approval.
Any contribution to the Trust Fund associated with this Plan is con-
ditioned on initial qualification of the Plan under Code Section 401(a) and
of the exemption of the Trust created under the Plan under Code Section
501(a). If the Commissioner of the Internal Revenue Service, upon the
Employer's request for initial approval of this Plan and Trust, determines
that the Plan is not qualified or the Trust is not exempt, then the Trustee
may return to each Employer, within one (1) year after the date of final
disposition of the request for initial approval, any contribution made by
the Employers, and any increment attributable to the contribution. The Plan
and Trust shall then terminate and all rights of Participants, Former
Participants and Beneficiaries with respect to such Employers' contributions
shall cease.
Section 16.9 Payment of Expenses.
Except as otherwise specifically provided herein, all expenses incident
to the administration, termination, or protection of the Plan and Trust,
including but not limited to, actuarial, legal, accounting, and Trustee fees,
may be paid by the Company, which may require reimbursement from the other
Employers for their pro rata shares, or if not paid by the Company (which
payment is not obligatory), shall be paid by the Trustee from the Trust
Assets, but no amount paid pursuant to Section 17.9 or Subsection 16.9(d)
shall be paid, directly or indirectly, from the Trust Assets. Notwithstanding
the preceding, the expenses incident to maintaining an Account for a Former
Participant shall be charged to such Former Participant's Account.
Section 16.10 Rights to Trust Assets.
No Participant, Former Participant or Beneficiary shall have any right
to, or interest in, any Trust Assets upon termination of his employment or
otherwise, except as provided from time to time under the Plan, and then only
to the extent of the benefits payable to such Participant, Former Participant
or Beneficiary out of the Trust Assets. All payments of benefits as provided
for in the Plan shall be made solely out of the Trust Assets and, except as
may otherwise be provided by applicable law, neither the boards of Directors
of the Employers, the Employers, the Trustee, nor the Committee shall be
liable therefore in any manner.
Section 16.11 Disclaimer of Liability.
Except as otherwise provided herein or under Sections 404 through 409 of
ERISA (to the extent applicable):
(a) Neither the Board of Directors of the Employers, the Employers, the
Trustee, nor the Committee guarantees the Trust Assets or other Assets of the
Plan in any manner against loss or depreciation, and they shall not be liable
for any act or failure to act which is made in good faith pursuant to the
provisions of the Plan and Trust Agreement.
(b) The Board of Directors of the Employers and the Employers shall
not be responsible for any act or failure to act of the Committee or the
Trustee.
(c) The Committee shall not be responsible for any act or failure to
act of the Board of Directors of the Employers, the Employers, or
the Trustee.
(d) Each Employer shall indemnify each member of its Board of
Directors against any liability or losses sustained by such member
by reason of any act or failure to act relating to the Plan or Trust in
his capacity as such member if such act or failure to act is in good
faith and does not constitute willful misconduct. Such indemnification shall
include attorney's fees and other costs and expenses reasonably incurred by
such member in defense of any action brought against him by reason of any
such act or failure to act.
Section 16.12 Persons May Serve in More than One Capacity.
A person may serve both as a member or secretary of the Committee and
as a Trustee hereunder. A person serving as a member of the Board of
Directors or as an officer of an Employer may serve as a member or secretary
of the Committee or as a Trustee, or both, hereunder.
Section 16.13 Construction.
The masculine gender, where appearing in the Plan, shall be deemed to
include the feminine gender, unless the context clearly indicates to the
contrary. The words "herein," "hereof," "hereunder" and other similar
compounds of the word "here" shall mean and refer to the entire Plan, not to
any particular provision, section, or subsection, and words used in the
singular or the plural may be construed as though in the plural or singular
where they would so apply.
Section 16.14 Counterparts.
The Plan may be executed in any number of counterparts, each of which
shall be considered an original, and only one such counterpart need be
produced.
Section 16.15 No Involuntary Retirement Because of Age.
Notwithstanding the provisions hereof defining Normal Retirement Date
and Retirement, nor any other provision hereof, nothing contained in the Plan
or Trust Agreement shall be construed to require or permit the involuntary
retirement of any Employee solely because of age.
Section 16.16 Mistake of Fact.
Notwithstanding any contrary provision in this Agreement, if a
contribution is made by an Employer by a mistake of fact, the contribution
may be returned to the Employer within one (1) year after the payment of the
contribution. The amount of the mistaken contribution is equal to the excess
of (a) the amount contributed over (b) the amount that would have been
contributed had there not occurred a mistake of fact. Earnings attributable
to mistaken contributions may not be returned to the Employer, but losses
attributable thereto shall reduce the amount to be returned.
Section 16.17 Disallowance of Deduction.
Notwithstanding any contrary provision in this Agreement, any
contributions by an Employer to the Plan and Trust are conditioned on the
deductibility of the contribution by the Employer under the Code. To the
extent any deduction is disallowed, the Employer, within one (1) year
following a final determination of the disallowance, whether by agreement
with the Internal Revenue Service or by final decision in a court of
competent jurisdiction, may demand repayment of the disallowed contribution,
and the Trustee shall return the contribution within one (1) year following
the disallowance. Earnings attributable to excess contributions may not be
returned to the Employer, but losses attributable thereto shall reduce the
amount to be returned.
* * * * * *
ARTICLE SEVENTEEN
-----------------
PLAN ADMINISTRATION
Section 17.3 Committee.
The Plan shall be administered by the Savings Plan Committee. The
Committee shall consist of not less than three nor more then seven members.
Each member shall be appointed, and may at any time be removed, by the Board
of Directors of the Company, and the Board of Directors of the Company shall
designate the chairman of the Committee. Any vacancy on the Committee
resulting from resignation, death, removal by the Board of Directors of the
Company, or otherwise, shall be filled by the Board of Directors of the
Company. The chief executive officer of the Company may appoint a person to
fill any vacancy during the period prior to action by the Board of Directors
filling such vacancy. All usual and reasonable expenses of the Committee
shall be paid as provided in Section 16.7. The members of the Committee shall
not receive compensation from the Plan or the Trust with respect to their
services in administering the Plan.
Section 17.4 Claims Procedure.
(a) The Committee shall make all determinations as to the right of
any person to a benefit. Any denial by the Committee of a claim for
benefits under the Plan by a Participant, Former Participant or
Beneficiary shall be stated in writing and delivered or mailed to the
Participant, Former Participant or Beneficiary. Such notice of
denial shall to the best of the Committee's ability, be written to be
understood without legal or actuarial counsel or other specialized
knowledge or advice, and shall:
(i) set forth the reasons for such denial;
(ii) specify the pertinent provisions of the Plan on which
such denial is based;
(iii) describe any additional material or information necessary
for perfection of such claim and explain why such material
or information is necessary; and
(iv) explain the claims review procedure established by the
Committee under the Plan.
(b) In the case of any Participant, Former Participant or Beneficiary
whose claim for benefits under the Plan has been denied, such Participant,
Former Participant or Beneficiary, or his duly authorized representative,
may:
(i) request a review of such denial by written application
mailed or delivered to the Committee by the 60th day after
receipt of such denial; and
(ii) within such reasonable times as may be prescribed in the
claims review procedure established by the Committee,
(A) review pertinent documents; and
(B) submit issues and comments in writing.
(c) The Committee shall provide a full and fair review of any
request submitted under Section 17.2(b). In connection with such review, the
Committee may request an opinion from an Employer's counsel and shall be fully
protected by the Company and such Employer from any liability resulting from
good faith reliance on such opinion.
Section 17.5 Powers and Duties of the Committee.
The Committee shall have such powers and duties as may be necessary to
discharge its duties hereunder, including, but not by way of limitation, the
following powers and duties:
(a) To administer the Plan;
(b) To construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment
of any benefits hereunder;
(c) To review the performance of the Trustee and to report thereon
to the Board of Directors of the Company;
(d) To prescribe and establish (i) procedures to be followed and
forms to be used by Employees, Participants, Former Participants or
Beneficiaries for commencing or resuming participation in the Plan
and for applying for benefits from the Plan and (ii) such additional
procedures and forms for reviewing denials of claims for benefits
as the Committee deems advisable which are not inconsistent with
the provisions of the Plan or applicable law, but if any procedure
or form is prescribed by the Plan or by applicable law, such
procedure or form shall be used for the purpose prescribed;
(e) To receive from the Employers and from Employees, Participants,
Former Participants and Beneficiaries such information as shall be
necessary for the proper administration of the Plan;
(f) To prepare and distribute, in such manner as required by
applicable law, information explaining the Plan;
(g) To prepare such reports with respect to the Plan as are required
by applicable law and such other reports as are reasonable and appropriate
and requested by the Employers;
(h) To appoint or employ such agents or employees as it deems
advisable, including legal counsel, accountants, and actuaries, as
needed for the discharge of its duties;
(i) To allocate in writing any of its rights, powers, or duties
hereunder to a particular member or members of the Committee; in the event
of any such allocation, the exercise of right or power, or the
discharge of a duty has been allocated shall be deemed to be an act
of the Committee; and
(j) To designate persons who are not members of the Committee to
exercise any of the foregoing powers, to carry out any of the
foregoing duties, or to authorize benefit payments.
Section 17.6 Limitation on Powers.
The Committee shall have no power to add to, subtract from, or modify
any of the terms of the Plan, or to waive or fail to apply any requirements of
eligibility for benefits under the Plan.
Section 17.7 Limitation on Duties.
Except as elsewhere provided herein, the Committee shall have no power
to manage or responsibility for managing the investing (including selection,
acquiring, retaining, or disposing) of the Trust Assets.
Section 17.8 Rules and Decisions.
The Committee may adopt such rules as it deems necessary, desirable, or
appropriate. All rules and decisions of the Committee shall be uniformly and
consistently applied to all Employees, Participants, Former Participants, and
Beneficiaries in similar circumstances. Any rule or decision which is not
inconsistent with the provisions of the Plan shall be conclusive and binding
upon all persons affected by it, and, except as otherwise provided by
applicable law or herein, there shall be no appeal from any decision by the
Committee which is within its authority. When making a determination or
calculation, the Committee shall be entitled to rely upon information
furnished by an Employer, the legal counsel of an Employer, or an accountant
or actuary of the Plan. When making any decision hereunder, the Committee
may consult with any Participant, Former Participant, or Beneficiary affected
thereby and may, if appropriate, take such Participant's, Former Participant's,
or Beneficiary's preference into account, but the Committee shall not be
required to consult with or follow the preference of any Participant, Former
Participant, or Beneficiary in the making of any decision hereunder unless it
is expressly required to do so by other provisions hereof or by applicable law.
Section 17.9 Committee Procedures.
The Committee may act at a meeting or in writing without a meeting. The
Committee shall appoint a secretary, who may or may not be a Committee
member, and advise the Trustee of such action in writing. The secretary
shall keep a record of all meetings and forward all necessary communications
to the Employers or the Trustee. The Committee may adopt such bylaws and
regulations as it deems desirable for the conduct of its affairs. All
decisions of the Committee shall be made by the vote of a majority of the
total number of members at the time serving on the Committee including
actions in writing taken without a meeting.
Section 17.10 Liability of Committee.
Except as may otherwise be required by applicable law, no member of the
Committee shall be liable for any act or omission of his own or of any agent
or employee appointed or employed by the Committee, unless such act or
omission is the result of his own willful misconduct or bad faith. The
Company shall indemnify each such member against any liability or loss
sustained by him by reason of any act or failure to act in his capacity as
such member if such act or failure to act is in good faith and does not
constitute willful misconduct. Such indemnification shall include attorney's
fees and other costs and expenses reasonably incurred by such member in
defense of any action brought against him by reason of any such act or
failure to act.
Section 17.11 Bonding.
The secretary and members of the Committee and any persons designated
under Subsection 17.3(j) shall serve without bond except as otherwise required
by applicable law or by the Company. The premium on any bond required of
the secretary or members of the Committee shall be paid as provided in
Section 16.7.
IN WITNESS WHEREOF, FROZEN FOOD EXPRESS INDUSTRIES, INC. has caused this
Plan to be executed by its duly appointed officers on this 1 day of January,
2001, to be effective January 1, 2001.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
------------------------------------
By: /s/ Stoney M. Stubbs, Jr.
-------------------------------
Stoney M. Stubbs, Jr.
President and Chief Executive Officer
ATTEST:
/s/ Leonard W. Bartholomew
- ------------------------------
By: Leonard W. Barthomew
Secretary