PIONEER HI-BRED INTERNATIONAL, INC.
SAVINGS PLAN
ARTICLE I
GENERAL
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Sec. 1.1 Name of Plan. The name of the discretionary contribution
profit sharing plan set forth herein is Pioneer Hi-Bred International, Inc.
Savings Plan. It is sometimes herein referred to as the "Plan".
Sec. 1.2 Purpose. The Plan has been established so that eligible
employees may have an additional source of retirement income.
Sec. 1.3 Effective Date. The "Effective Date" of the Plan, the date as
of which the Plan was established, is September 1, 1979.
Sec. 1.4 Company. The "Company" is Pioneer Hi-Bred International,
Inc., an Iowa corporation, and any Successor Employer thereof.
Sec. 1.5 Participating Employers. The Company is a Participating
Employer in the Plan. As of October 1, 1998, the following subsidiaries of
the Company are also Participating Employers:
(a) PHI Insurance Services, Inc.
(b) The Advantage Corporation
(c) PHI Financial Services, Inc.
(d) Pioneer Hi-Bred of Puerto Rico, Inc.
The President of the Company may from time to time take written action adding
additional subsidiaries as Participating Employers effective as of the date
specified in such action or removing Participating Employers from the Plan. Any
such written action shall be deemed to be an amendment of the Plan. Any
Successor Employer to a Participating Employer shall also be a Participating
Employer in the Plan.
Sec. 1.6 Construction and Applicable Law. The Plan is intended to
meet the requirements for qualification under section 401(a) of the Code and the
requirements applicable to qualified cash or deferred arrangements under section
401(k) of the Code. The Plan is also intended to be in full compliance with
applicable requirements of ERISA. The Plan shall be administered and construed
consistent with said intent. It shall also be construed and administered
according to the laws of the State of Iowa to the extent that such laws are not
preempted by the laws of the United States of America. All controversies,
disputes, and claims arising hereunder shall be submitted to the United States
District Court for the Southern District of Iowa, except as otherwise provided
in any trust agreement entered into with a Funding Agency.
Sec. 1.7 Benefits Determined Under Provisions in Effect at
Termination of Employment. Except as may be specifically provided herein to the
contrary, benefits under the Plan attributable to service prior to a
Participant's Termination of Employment shall be determined and paid in
accordance with the provisions of the Plan as in effect as of the date the
Termination of Employment occurred unless he or she becomes an Active
Participant after that date and such active participation causes a contrary
result under the provisions hereof. However, the provisions of this document
shall apply to any such Participant to the extent necessary to maintain the
qualified status of the Plan under Code section 401(a) or to comply with the
requirements of ERISA.
Sec. 1.8 Effective Date of Document. Unless a different date is
specified for some purpose in this document, the provisions of this Plan
document are generally effective as of October 1, 1998. However, any provision
necessary to comply with a requirement of federal legislation or a Treasury
regulation, which requirement has an earlier effective date, shall be effective
retroactively to the date required by the applicable law or regulation.
ARTICLE II
MISCELLANEOUS DEFINITION
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Sec. 2.1 Account. "Account" means a Participant's or Beneficiary's
interest in the Fund of any of the types described in Sec. 7.1.
Sec. 2.2 Active Participant. An employee is an "Active Participant"
only while he or she is both a Participant and a Qualified Employee.
Sec. 2.3 Affiliate. "Affiliate" means any trade or business entity
under Common Control with a Participating Employer, or under Common Control
with a Predecessor Employer while it is such.
Sec. 2.4 Beneficiary. "Beneficiary" means the person or persons
designated as such pursuant to the provisions of Article VIII.
Sec. 2.5 Board. The "Board" is the board of directors of the Company,
and includes any executive committee thereof authorized to act for said
board of directors.
Sec. 2.6 Certified Earnings. Commencing February 1, 1997, "Certified
Earnings" of a Participant from a Participating Employer for a Plan Year
means the amount determined by the Participating Employer and reported to
the Company to be the total earnings paid to the Participant by the
Participating Employer during such Plan Year for service as a Qualified
Employee, subject to the following:
(a) Certified Earnings include Before-Tax Contributions to this Plan and
any contributions made by salary reduction to any other plan which
meets the requirements of Code sections 125, 401(k), 402(h)(1)(B), or
403(b), whether or not such contributions are actually excludable
from the Participant's gross income for federal income tax purposes.
Certified Earnings do not include Qualified Non-Elective or Matching
Contributions to this Plan.
b) Extraordinary and non-recurring items (such as lump sum
payments to terminate an employment contract or terminal vacation
pay); relocation payments, mobility premiums, cost of living ("COLA")
payments, relocation bonuses or mortgage interest differential
payments; payments in the nature of reimbursements for expenses (such
as mileage payments for use of personal vehicles and construction
travel allowances); reimbursements for employee or dependent
educational expenses (such as College Aid scholarships or tuition
reimbursements); severance pay; any income derived from use of an
automobile provided by a Participating Employer, from employer-paid
life insurance as described in Code section 79 or from employer-paid
trips by the Participant's spouse; benefits derived from the
Participant's participation in any stock-based compensation program
maintained by any Participating Employer; bonuses, incentives or other
amounts paid after the Participant's Termination of Employment;
payments or contributions to or for the benefit of the employee under
any other deferred compensation, pension, insurance, or other employee
benefit plan; or other similar fringe benefits or items of special
compensation shall not be included in computing Certified Earnings,
except as provided in subsection (a) or to the extent such amounts are
required to be included in determining the regular rate of pay of a
Participant who is a non-exempt employee under the Federal Fair Labor
Standards Act for purposes of computing overtime pay thereunder.
c) Effective for Plan Years commencing after 1996, Certified
Earnings of a Participant for any Plan Year shall not exceed $160,000,
adjusted for each Plan Year to take into account any cost of living
increase provided for that year in accordance with regulations
prescribed by the Secretary of the Treasury. The dollar increase in
effect on January 1 of any calendar year shall apply to Plan Years
beginning in that calendar year. If a Plan Year is shorter than 12
months, the limit under this subsection for that year shall be
multiplied by a fraction, the numerator of which is the number of
months in the short Plan Year and the denominator of which is 12.
Sec. 2.7 Code. "Code" means the Internal Revenue Code of 1986 as from
time to time amended.
Sec. 2.8 Common Control. Effective for Plan Years commencing after
1988, a trade or business entity (whether a corporation, partnership, sole
proprietorship or otherwise) is under "Common Control" with another trade or
business entity (i) if both entities are corporations which are members of a
controlled group of corporations as defined in Code section 414(b), or (ii) if
both entities are trades or businesses (whether or not incorporated) which are
under common control as defined in Code section 414(c), or (iii) if both
entities are members of an affiliated service group as defined in Code section
414(m), or (iv) if both entities are required to be aggregated pursuant to
regulations under Code section 414(o). Service for all entities under Common
Control shall be treated as service for a single employer to the extent required
by the Code; provided, however, that an individual shall not be a Qualified
Employee by reason of this section. In applying the first sentence of this
section for purposes of Article VI, the provisions of subsections (b) and (c) of
section 414 of the Code are deemed to be modified as provided in Code section
415(h).
Sec. 2.9 ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974 as from time to time amended.
Sec. 2.10 Family Member. Family aggregation rules ceased to apply
to this Plan effective January 1, 1997.
Sec. 2.11 Forfeitures. "Forfeitures" means that part of the Fund so
recognized under Sec. 9.2(b).
Sec. 2.12 Fund. "Fund" means the aggregate of assets described in
Sec. 11.1.
Sec. 2.13 Funding Agency. "Funding Agency" is a trustee or trustees
or an insurance company appointed and acting from time to time in accordance
with the provisions of Sec. 11.2 for the purpose of holding, investing, and
disbursing all or a part of the Fund.
Sec. 2.14 Highly Compensated Employee. "Highly Compensated Employee"
for any Plan Year means an individual described as such in Code section 414(q).
(a) Unless otherwise provided in Code section 414(q), commencing January
1, 1997, each employee who meets one of the following requirements is
a "Highly Compensated Employee":
(1) The employee at any time during the current or prior Plan Year
was a more than 5-percent owner as defined in Code section
414(q)(2), or was the spouse, child, parent or grandparent of
such an owner to whom the owner's stock is attributed pursuant
to Code section 318 (regardless of the Compensation of the
owner or family member).
(2) The employee received Compensation from the employer in exces
of $80,000for the prior Plan Year.
(3) The individual is a former employee who had a separation year
prior to the current Plan Year and such individual performed
services for the employer and was a Highly Compensated Employee
for either (i) such separation year, or (ii) any Plan Year
ending on or after the individual's 55th birthday. A
"separation year" is the Plan Year in which the individual
separates from service with the employer. With respect to an
individual who separated from service before January 1, 1987,
the individual will be included as a Highly Compensated
Employee only if the individual was a more than 5-percent owner
or received Compensation in excess of $50,000 during (i) the
employee's separation year (or the year preceding such
separation year), or (ii) any year ending on or after such
individual's 55th birthday (or the last year ending before such
individual's 55th birthday).
(b) The dollar amount specified in paragraph (2) of subsection (a) shall
be indexed for cost of living increases for each calendar year after
1996 as provided in the applicable Treasury regulations. For any Plan
Year, the applicable dollar amount shall be the dollar amount in
effect for the calendar year in which the Plan Year commences.
(c) For purposes of this section, "employer" includes all Participating
Employers and all Affiliates, and "employee" includes Leased
Employees.
(d) For purposes of this section, "Compensation" means the amount defined
as such under Sec. 6.1(f) plus the Before-Tax Contributions to this
Plan and any other elective deferral contributions made by or on
behalf of the employee to any other plan maintained by a
Participating Employer or an Affiliate which are not includible in
the gross income of the employee under Code sections 125, 401(k),
402(h)(1)(B), or 403(b). Commencing January 1, 1998, Compensation
means the amount defined as such under Sec. 6.1(f).
Sec. 2.15 Leased Employee. "Leased Employee" means any person defined
as such by Code section 414(n). In general, a Leased Employee is any person who
is not otherwise an employee of a Participating Employer or an Affiliate
(referred to collectively as the "recipient") and who pursuant to an agreement
between the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and related persons
determined in accordance with Code section 414(n)(6)) on a substantially
full-time basis for a period of at least one year and such services are
performed under primary direction or control by the recipient. For purposes of
the requirements listed in Code section 414(n)(3), any Leased Employee shall be
treated as an employee of the recipient, and contributions or benefits provided
by the leasing organization which are attributable to services performed for the
recipient shall be treated as provided by the recipient. However, if Leased
Employees constitute less than 20% of the Participating Employers' non-highly
compensated work force within the meaning of Code section 414(n)(5)(C)(ii),
those Leased Employees covered by a plan described in Code section 414(n)(5)
shall be disregarded. Notwithstanding the foregoing, no Leased Employee shall be
a Qualified Employee or a Participant in this Plan.
Sec. 2.16 Named Fiduciary. The Company is a "Named Fiduciary" for
purposes of ERISA with authority to control or manage the operation and
administration of the Plan, including control or management of the assets of the
Plan. Other persons are also Named Fiduciaries under ERISA if so provided
thereunder or if so identified by the Company, by action of the Board. Such
other person or persons shall have such authority to control or manage the
operation and administration of the Plan, including control or management of the
assets of the Plan, as may be provided by ERISA or as may be allocated by the
Company, by action of the Board.
Sec. 2.17 Non-Highly Compensated Employee. "Non-Highly Compensated
Employee" means an employee of the Participating Employers who is not a Highly
Compensated Employee.
Sec. 2.18 Normal Retirement Age. "Normal Retirement Age" is age 65.
Sec. 2.19 Participant. A "Participant" is an individual describe
as such in Article IV.
Sec. 2.20 Plan Year. A "Plan Year" is the calendar year.
Sec. 2.21 Predecessor Employer. Any corporation, partnership, firm,
or individual, a substantial part of the assets and employees of which are
acquired by a successor is a "Predecessor Employer" if named in this section,
subject to any conditions and limitations with respect thereto imposed by this
section; provided, however, that any such corporation, partnership, firm, or
individual may be named as a Predecessor Employer only if all of its employees
who at the time of the acquisition become employees of the successor and
Participants hereunder are treated uniformly, the use of service with it does
not produce discrimination in favor of Highly Compensated Employees, and there
is no duplication of benefits for such service. To be considered a Predecessor
Employer, the acquisition of assets and employees of a corporation, partnership,
firm, or individual must be by a Participating Employer, by an Affiliate, or by
another Predecessor Employer. Any other employer shall be a Predecessor Employer
if so required by regulations prescribed by the Secretary of the Treasury. As of
October 1, 1998, there are no Predecessor Employers.
Sec. 2.22 Qualified Employee. "Qualified Employee" means any
employee of a Participating Employer, subject to the following:
(a) An employee is not a Qualified Employee prior to the date as of which
his or her employer becomes a Participating Employer.
(b) A nonresident alien within the meaning of Code section 7701(b)(1)(B)
while not receiving earned income (within the meaning of Code section
911(d)(2)) from a Participating Employer which constitutes income
from sources within the United States (within the meaning of Code
section 861(a)(3)) is not a Qualified Employee.
(c) Except as provided in paragraphs (1) and (2), below, an employee is
not a Qualified Employee unless his or her services are performed
within the United States, or the principal base of operations to
which the employee frequently returns is within the United States.
(1) A Qualified Employee who is transferred by a Participating
Employer to a location outside the United States on a temporary
assignment or as a project employee will continue to be a
Qualified Employee during the period the individual works in
either of those categories.
(2) A Qualified Employee who was transferred by a Participating
Employer to a location outside the United States as an
indefinite transferee prior to 1995 will continue to be a
Qualified Employee until the date the individual becomes
covered by any retirement plan maintained by a Participating
Employer or an Affiliate for employees located outside the
United States.
(d) Eligibility of employees in a collective bargaining unit to
participate in the Plan is subject to negotiations with the
representative of that unit. During any period that an employee is
covered by the provisions of a collective bargaining agreement between
a Participating Employer and such representative, the employee shall
not be considered a Qualified Employee for purposes of this Plan
unless such agreement expressly so provides. For purposes of this
section only, such an agreement shall be deemed to continue after its
formal expiration during collective bargaining negotiations pending
the execution of a new agreement.
(e) An employee shall be deemed to be a Qualified Employee during a period
of absence from active service which does not result from a
Termination of Employment, provided he or she is a Qualified Employee
at the commencement of such period of absence.
(f) Notwithstanding anything herein to the contrary, an individual is not
a Qualified Employee during any period during which the individual is
classified by a Participating Employer as an independent contractor or
is classified by a Participating Employer as any other status in which
the person is not treated as a common law employee of a Participating
Employer for purposes of withholding of taxes, regardless of the
correct legal status of the individual. The previous sentence applies
to all periods of such service of an individual who is subsequently
reclassified as an employee, whether the reclassification is
retroactive or prospective.
Sec. 2.23 Successor Employer. A "Successor Employer" is any entity
that succeeds to the business of a Participating Employer through merger,
consolidation, acquisition of all or substantially all of its assets, or
any other means and which elects before or within a reasonable time after
such succession, by appropriate action evidenced in writing, to continue
the Plan; provided, however, that in the case of such succession with
respect to any Participating Employer other than the Company, the acquiring
entity shall be a Successor Employer only if consent thereto is granted by
the Company, by action of the Board or a duly authorized officer.
Sec. 2.24 Top-Heavy Plan. "Top-Heavy Plan" is defined in Sec.
14.2(a).
Sec. 2.25 Valuation Date. "Valuation Date" means the date on which the
Fund and Accounts are valued as provided in Article VII. Each of the
following is a Valuation Date:
(a) Effective January 1, 1998, each business day on which the New York
Stock Exchange is open for business. Prior to 1998, the Valuation
Dates were the last day of each calendar month.
(b) Such other day, as designated by the Company in written notice to the
Funding Agency, as the Company may consider necessary or advisable to
provide for the orderly and equitable administration of the Plan.
ARTICLE III
SERVICE PROVISIONS
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Sec. 3.1 Employment Commencement Date. "Employment Commencement
Date" means the date on which an employee first performs an Hour of Service for
a Participating Employer (whether before or after the Participating Employer
becomes such), an Affiliate, or a Predecessor Employer. The date on which an
employee first performs an Hour of Service after a 1-Year Break in Service is
also an "Employment Commencement Date".
Sec. 3.2 Termination of Employment. The "Termination of Employment"
of an employee for purposes of the Plan shall be deemed to occur upon
resignation, discharge, retirement, death, failure to return to active work at
the end of an authorized leave of absence or the authorized extension or
extensions thereof, failure to return to work when duly called following a
temporary layoff, or upon the happening of any other event or circumstance
which, under the policy of a Participating Employer, Affiliate, or Predecessor
Employer as in effect from time to time, results in the termination of the
employer-employee relationship; provided, however, that a Termination of
Employment shall not be deemed to occur upon a transfer between any combination
of Participating Employers, Affiliates, and Predecessor Employers.
(a) Solely for purposes of this Plan, a Participant's Termination of
Employment shall be deemed to occur on the date the Participant has
been disabled for six months as defined in Sec. 9.1(b) (if an actual
Termination of Employment has not occurred prior to that date) for
purposes of determining the Participant's entitlement to
distributions under Sec. 9.1 and Article X, but Sec. 10.1(h) will not
apply to a Participant described in this subsection.
(b) Notwithstanding the foregoing, a Termination of Employment shall be
deemed not to have occurred for purposes of entitling a Participant
to distributions from his or her Before-Tax Account or Qualified
Non-Elective Contribution Account if the Participant has not incurred
a "separation from service" or "disability" as defined in applicable
regulations, except as provided in Sec. 10.12.
Sec. 3.3 Hours of Service. "Hours of Service" are determined
according to the following subsections with respect to each applicable
computation period. The Company may round up the number of Hours of Service at
the end of each computation period or more frequently as long as a uniform
practice is followed with respect to all employees determined by the Company to
be similarly situated for compensation, payroll, and recordkeeping purposes.
(a) Hours of Service are computed only with respect to service with
Participating Employers (for service both before and after the
Participating Employer becomes such), Affiliates, and Predecessor
Employers and are aggregated for service with all such employers.
(b) For any portion of a computation period during which a record of
hours is maintained for an employee, Hours of Service shall be
credited as follows:
(1) Each hour for which the employee is paid, or entitled to
payment, for the performance of duties for his or her employer
during the applicable computation period is an Hour of Service.
(2) Each hour for which the employee is paid, or entitled to
payment, by his or her employer on account of a period of time
during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty, or leave of absence, is an Hour of
Service. No more than 501 Hours of Service shall be credited
under this paragraph for any single continuous period (whether
or not such period occurs in a single computation period).
Hours of Service shall not be credited under this paragraph
with respect to payments under a plan maintained solely for the
purpose of complying with applicable workers' compensation,
unemployment compensation, or disability insurance laws or with
respect to a payment which solely reimburses the individual for
medical or medically related expenses incurred by the employee.
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the employer is an
Hour of Service. Such Hours of Service shall be credited to the
computation period or periods to which the award or agreement
for back pay pertains, rather than to the computation period in
which the award, agreement, or payment is made. Crediting of
Hours of Service for back pay awarded or agreed to with respect
to periods described in paragraph (2) shall be subject to the
limitations set forth therein.
(4) Notwithstanding the preceding provisions of this subsection,
with respect to Hours of Service to be credited to an employee
in connection with a period of no more than 31 days, as
determined by the Company, which extends beyond one computation
period, all such hours may be credited to the second
computation period. Crediting of Hours of Service under this
paragraph shall be done by the Company consistently with
respect to all employees within the same job classifications,
reasonably defined.
(5) Hours under this subsection shall be calculated and credited
pursuant to section 2530.200b-2 of the Department of Labor
Regulations, which are incorporated herein by this reference.
(6) The Company may use any records to determine Hours of Service
which it considers an accurate reflection of the actual facts.
(c) For any portion of a computation period during which an employee is
within a classification for which a record of hours for the
performance of duties is not maintained, the employee shall be
credited with 190 Hours of Service for each month for which he or she
would otherwise be credited with at least one Hour of Service under
subsection (b).
(d) Nothing in this section shall be construed as denying an employee
credit for an Hour of Service if credit is required by any federal
law other than ERISA. The nature and extent of such credit shall be
determined under such other law.
(e) In no event shall duplicate credit as an Hour of Service be given for
the same hour.
Sec. 3.4 Eligibility Computation Period. An employee's first
Eligibility Computation Period is the 12-consecutive-month period beginning on
his or her Employment Commencement Date. The second Eligibility Computation
Period is the Plan Year commencing in said 12-consecutive-month period. Each
subsequent Plan Year prior to the end of the Plan Year in which the employee has
a 1-Year Break In Service is an Eligibility Computation Period. If subsequent to
a 1-Year Break In Service the employee has another Employment Commencement Date,
Eligibility Computation Periods for the period beginning on such date shall be
computed as though such date were the employee's first Employment Commencement
Date.
Sec. 3.5 Year of Eligibility Service. A "Year of Eligibility Service"
is an Eligibility Computation Period in which an employee has at least 1000
Hours of Service. The Year of Eligibility Service will be credited to the
employee on the date during the Eligibility Computation Period on which the
employee has been credited with 1000 Hours of Service.
Sec. 3.6 Year of Vesting Service. A "Year of Vesting Service" is a
Plan Year in which an employee has at least 1000 Hours of Service, subject to
the following:
(a) Any Plan Year prior to the Plan Year in which the employee's
Participating Employer first maintained the Plan or a predecessor
plan (or, if earlier, the earliest Plan Year in which any trade or
business entity at that time under Common Control with that
Participating Employer first maintained the Plan or a predecessor
plan) shall be disregarded.
(b) If the Participant has had a 1-Year Break In Service prior to the
first day of the first Plan Year beginning in 1985, or a period of
five consecutive 1-Year Breaks In Service ending on or after that
date, for purposes of determining the vested percentage of the
Participant's Accounts attributable to employer contributions which
accrued before such break, any Years of Vesting Service after such
break in service shall not be taken into account.
(c) If a nonvested Participant has had a period of five consecutive
1-Year Breaks In Service, for purposes of determining the vested
percentage of the Participant's Accounts (if any) attributable to
employer contributions made on his or her behalf after such period,
Years of Vesting Service prior to such period shall not be taken into
account if the number of consecutive 1-Year Breaks In Service within
such period equals or exceeds the aggregate number of Years of
Vesting Service before such period, subject to the following:
(1) If any Years of Vesting Service are not required to be taken
into account by reason of a break-in-service period to which
this subsection applies, or if any service was disregarded
under the provisions of the Plan previously in effect by reason
of a break-in-service period of any length, such Years of
Vesting Service shall not be taken into account in applying
this subsection to a subsequent break-in-service period or in
determining the Participant's Years of Vesting Service.
(2) For purposes of this subsection, a "nonvested Participant" is a
Participant who has no vested right to an accrued benefit under
the Plan derived from employer contributions (including
Before-Tax Contributions).
(d) Notwithstanding the first sentence of this section, commencing
January 1, 1998, a Participant's Years of Vesting Service shall not
be less than the number of years determined as follows:
(1) The Participant will be credited with one Year of Vesting
Service as of the June 1st of the Plan Year in which the
Participant is first credited with a Year of Eligibility
Service.
(2) Commencing with the Plan Year following the Plan Year in which
the Participant was first credited with a Year of Eligibility
Service, the Participant will be credited with one Year of
Vesting Service on each June 1st, provided that he or she is a
Qualified Employee on that June 1st.
(3) Years of Vesting Service credited under this subsection (d)
shall be subject to the rules in subsections (a), (b) and (c)
for disregarding service.
Sec. 3.7 1-Year Break In Service. "1-Year Break In Service" means
a Plan Year in which the employee has 500 or fewer Hours of Service. The 1-Year
Break In Service shall be recognized as such on the last day of such Plan Year.
(a) Notwithstanding the provisions of Sec. 3.3, for purposes of
determining whether a 1-Year Break In Service has occurred with
respect to a Plan Year beginning after 1984, an individual who is
absent from work for maternity or paternity reasons, or because the
individual is receiving workers' compensation benefits, shall receive
credit for the Hours of Service which would otherwise have been
credited to such individual but for such absence, or in any case in
which such hours cannot be determined, 8 Hours of Service per day of
such absence; provided, however, that the total number of Hours of
Service recognized under this subsection shall not exceed 501 hours.
The Hours of Service credited under this subsection shall be credited
in the Plan Year in which the absence begins if the crediting is
necessary to prevent a 1-Year Break In Service in that Plan Year or,
in all other cases, in the following Plan Year.
(b) For purposes of subsection (a), an absence from work for maternity or
paternity reasons means an absence that started during a Plan Year
beginning after 1984 (i) by reason of the pregnancy of the individual,
(ii) by reason of the birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (iv) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.
(c) For purposes of subsection (a), an absence from work for workers'
compensation means (i) the individual is receiving payments from a
State Workers' Compensation program, and (ii) meets the requirements
that enable him or her to receive such payments.
Sec. 3.8 Periods of Military Service. Notwithstanding any provision
of this Plan to the contrary, effective December 12, 1994, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Code section 414(u).
Sec. 3.9 Credit for Service with Optimum. Commencing January 1, 1998,
if an individual was employed by Optimum Quality Grains, L.L.C. immediately
prior to the date he or she becomes an employee of a Participating Employer, and
Optimum Quality Grains, L.L.C. was a 50% or more direct or indirect subsidiary
of the Company immediately prior to that date, the individual will be credited
with his or her prior continuous service with Optimum as if such service had
been service for a Participating Employer for purposes of determining the
individual's Years of Eligibility Service and Years of Vesting Service under
this Plan.
ARTICLE IV
PLAN PARTICIPATION
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Sec. 4.1 Entry Date. Commencing May 1, 1998, "Entry Date" means
January 1st and the first day of each payroll period beginning during each Plan
Year.
Sec. 4.2 Eligibility for Participation. Eligibility to
participate in the Plan shall be determined as follows:
(a) An employee of a Participating Employer shall become a Participant in
the Plan on the earliest Entry Date (on or after the date the Plan
becomes effective with respect to his or her Participating Employer)
on which all of the following requirements are met:
(1) The employee is a Qualified Employee.
(2) The employee has been credited with one Year of Eligibility
Service.
(b) If a former Participant is reemployed and meets the requirements of
subsection (a) on the date of rehire, the employee will become a
Participant again on that date.
(c) If a former employee who was not previously a Participant is
reemployed as a Qualified Employee, if the employee meets the
requirements of subsection (a) on the date of rehire, and if the
employee would have met the requirements of subsection (a) on the
immediately preceding Entry Date if he or she had been a Qualified
Employee on that Entry Date, the employee shall become a Participant
on the date of rehire.
(d) If an employee of a Participating Employer or an Affiliate who is
neither a Participant nor a Qualified Employee is transferred to a
position in which he or she is a Qualified Employee, and if the
employee would have met the eligibility requirements of subsection
(a) on the Entry Date preceding the transfer had he or she been a
Qualified Employee on that Entry Date, the employee shall become a
Participant on the date of transfer.
Sec. 4.3 Duration of Participation. A Participant shall continue
to be such until the later of:
(a) The Participant's Termination of Employment.
(b) The date all benefits, if any, to which the Participant is entitled
hereunder have been distributed from the Fund.
Sec. 4.4 No Guarantee of Employment. Participation in the Plan
does not constitute a guarantee or contract of employment with the Participating
Employers. Such participation shall in no way interfere with any rights the
Participating Employers would have in the absence of such participation to
determine the duration of an employee's employment.
ARTICLE V
CONTRIBUTIONS
-------------
Sec. 5.1 Before-Tax Contributions. Each Active Participant may
elect to have his or her Participating Employer make Before-Tax Contributions on
his or her behalf, subject to the following:
(a) Commencing February 1, 1997, the Participant may elect to have his or
her current earnings reduced by any whole percent the Participant may
designate, but not exceeding 15 percent of Certified Earnings. This
election may only be made pursuant to a written salary reduction
agreement or an alternative means authorized by the Company. The
agreement shall be in such form and executed subject to such rules as
the Company may prescribe. Each election shall apply only to earnings
which become payable after the election is filed with the Company.
Each election shall continue in effect until a new election is made
pursuant to this section.
(b) Each Participating Employer will make a Before-Tax Contribution with
respect to each Participant in its employ who elects to have earnings
for that period reduced pursuant to this section. The amount of the
contribution will be equal to the amount by which the Participant's
earnings were reduced.
(c) Commencing May 1, 1998, the salary reduction agreement may be
effective as of the first day of the pay period occurring as soon as
administratively feasible after the date on which the employee has
satisfied the eligibility requirements of Sec. 4.2 and elected to make
Before-Tax Contributions, or the first day of any subsequent pay
period, provided that the employee has submitted the agreement to the
Company or its designated agent prior to the payroll cut-off date
established by the Company for that pay period.
(d) An Active Participant may amend his or her salary reduction agreement
to increase or decrease the contribution rate, or to discontinue or
recommence contributions, effective as of the first day of any pay
period by filing an approved amendment form with the Company or its
designated agent (or by making the amendment using an alternative
means authorized by the Company) prior to the payroll cut-off date
established by the Company for that pay period.
(e) All Before-Tax Contributions by a Participant shall cease when the
Participant ceases to be a Qualified Employee.
(f) Effective January 1, 1998, Before-Tax Contributions by a Participant
for any calendar year may not exceed $10,000, and shall cease at the
point that limit is reached during the year. The limit in the previous
sentence shall be adjusted for any cost of living increases provided
for any calendar year in accordance with regulations issued by the
Secretary of the Treasury.
(g) Notwithstanding the foregoing provisions, if the Participant has
received a hardship distribution from this Plan in accordance with
Sec. 9.4(a) or from any other plan maintained by a Participating
Employer or an Affiliate, no Before-Tax Contributions shall be made to
this Plan on behalf of such Participant for 12 months following the
date on which the hardship distribution was made. Furthermore, the
limit under subsection (f) for the calendar year following the year in
which the hardship withdrawal is made shall be reduced by the amount
of Before-Tax Contributions (and any elective contributions to any
other plan maintained by the employer) for the calendar year in which
the hardship withdrawal was made.
(h) If a Participant's Before-Tax Contributions are suspended under
subsection (g), the Participant may elect to recommence Before-Tax
Contributions effective as of the first day of the pay period
immediately following the end of the 12-month suspension period by
filing a new election with the Company prior to the payroll cut-off
date established by the Company for that pay period.
Sec. 5.2 Matching Contributions. The Participating Employers will
match each Participant's Before-Tax Contributions as follows:
(a) Commencing February 1, 1997, for each pay period ending in a Plan
Year, the Participant's Participating Employer will make a Matching
Contribution equal to (i) 50% of the total Before-Tax Contributions
made by the Participant for the current pay period and all pay
periods ending during the Plan Year prior to the current pay period,
minus (ii) the total Matching Contributions made for the Participant
for pay periods ending during the Plan Year prior to the current pay
period, subject to the following:
(1) The total of the Matching Contributions for the current pay
period and all pay periods ending during the Plan Year prior to
the current pay period may not exceed 3% of the Participant's
total Certified Earnings for such pay periods.
(2) The total of the Matching Contributions for a Participant for
all pay periods ending in a Plan Year shall not exceed
$3,000.00. Matching Contributions during a Plan Year shall
cease when this limit is reached.
(b) No Matching Contribution will be made with respect to any amount by
which the Participant's Before-Tax Contributions must be reduced
pursuant to Sec. 5.4, Sec. 5.5 or Sec. 5.7. Any such Matching
Contributions which are made before the amount of the reduction is
determined shall be forfeited and shall be applied as a credit
against future contributions from the Participating Employers.
(c) Any Forfeitures attributable to a Participating Employer for a Plan
Year (adjusted for any allocable investment earnings or losses on the
Plan's Forfeiture Account) which are not used to reinstate Accounts
pursuant to Sec. 9.2(b) shall be credited against the Participating
Employer's Matching Contributions for that Plan Year.
Sec. 5.3 Qualified Non-Elective Contributions. For each Plan Year the
Company shall determine whether it will make a Qualified Non-Elective
Contribution to the Fund for such Plan Year and, if it is determined that a
contribution will be made, the amount of the contribution or the formula by
which the amount of the contribution will be calculated. The contribution of
each Participating Employer other than the Company for a Plan Year shall be an
amount which is the same percent of the Certified Earnings of its employees
eligible to share in the contribution for that year as the contribution of the
Company for the Plan Year bears to the total Certified Earnings of its employees
eligible to share in the contribution for that year. Qualified Non-Elective
Contributions shall be paid to the Funding Agency designated by the Company.
(a) To be eligible to share in the Qualified Non-Elective Contributions of
a Participating Employer for a Plan Year, a Participant (i) must have
been an Active Participant at some time during the Plan Year, (ii)
must be employed by the Participating Employer or an Affiliate on the
last day of the Plan Year, and (iii) must have completed at least
1,000 Hours of Service during the Plan Year.
(b) The Company may designate that part or all of the Qualified
Non-Elective Contribution of the Participating Employers under this
section for a Plan Year shall be used to satisfy the requirements of
Sec. 5.4(c) and/or Sec. 5.6(c) for that Plan Year. The Company shall
designate whether the Qualified Non-Elective Contribution will be
allocated among all those Participants who satisfy the requirements of
subsection (a), or only among the Non-Highly Compensated Employees who
satisfy those requirements. A Qualified Non-Elective Contribution
shall be allocated in proportion to the Certified Earnings of those
eligible Participants who are employed by the Participating Employers.
Notwithstanding any provisions of the Plan to the contrary, any
Qualified Non-Elective Contributions shall be subject to the
withdrawal restrictions of Sec. 9.4, and shall be 100% vested and
nonforfeitable when made.
Sec. 5.4 Adjustment of Contributions Required by Code Section 401k).
If necessary to satisfy the requirements of Code section 401(k), Before-Tax
Contributions shall be adjusted in accordance with the following:
(a) Each Plan Year, the "deferral percentage" will be calculated for each
Active Participant. Each Participant's deferral percentage is
calculated by dividing the amount referred to in paragraph (1) by the
amount referred to in paragraph (2):
(1) The total Before-Tax Contributions (including Excess Deferrals of
Highly Compensated Employees distributed under Sec. 5.5 but
excluding Excess Deferrals of Non-Highly Compensated Employees
that arise solely from contributions made under plans of the
Participating Employers or Affiliates), if any, allocated to the
Participant's Accounts with respect to the Plan Year. The Company
may also elect to include all or part of the Qualified
Non-Elective Contributions to be allocated to the Participant's
Accounts with respect to that Plan Year, provided that the
provisions of Treasury Regulationss. 1.401(k)-1(b) are satisfied.
(2) The Participant's Compensation with respect to the Plan Year.
For purposes of this section, a Participant's "Compensation"
for the Plan Year means compensation determined according to a
definition selected by the Company for that year which
satisfies the requirements of Code section 414(s). The same
definition of Compensation shall be used for all Participants
for a particular Plan Year, but different definitions may be
used for different Plan Years. The Company shall also determine
whether Compensation includes or does not include the
Before-Tax Contributions to this Plan and any contributions
made pursuant to a salary reduction agreement by or on behalf
of the Participant to any other plan which meets the
requirements of Code sections 125, 401(k), 402(h)(1)(B), or
403(b), and whether or not it includes amounts paid prior to
the date an individual became a Participant. Compensation shall
be subject to the limit provided under Sec. 2.6(c).
(b) Each Plan Year, the average deferral percentage for Active
Participants who are Highly Compensated Employees and the average
deferral percentage for Active Participants who are Non-Highly
Compensated Employees will be calculated. A separate average deferral
percentage shall be calculated for Active Participants in a collective
bargaining unit who are required to be disaggregated pursuant to
Treasury Regulationss. 1.401(k)-1(g)(11) (ii)(B). Such Participants
shall be disregarded in calculating the average deferral percentage
for Active Participants who are not in such collective bargaining
units. In each case, the average is the average of the percentages
calculated under subsection (a) for each of the employees in the
particular group. The deferral percentage for each Participant and the
average deferral percentage for a particular group of employees shall
be calculated to the nearest one-hundredth of one percent.
(c) If the requirements of either paragraph (1) or (2) are satisfied, then
no further action is needed under this section:
(1) The average deferral percentage for Participants who are Highly
Compensated Employees is not more than 1.25 times the average
deferral percentage for Participants who are Non-Highly
Compensated Employees.
(2) The excess of the average deferral percentage for Participants
who are Highly Compensated Employees over the average deferral
percentage for Participants who are Non-Highly Compensated
Employees is not more than two percentage points, and the
average deferral percentage for such Highly Compensated
Employees is not more than 2 times the average deferral
percentage for such Non-Highly Compensated Employees.
The requirements of this subsection (c) shall be applied separately
with respect to Participants in a collective bargaining unit who are
required to be disaggregated pursuant to Treasury Regulation ss.
1.401(k)-1(g)(11)(ii)(B).
(d) Commencing January 1, 1997, if neither of the requirements of
subsection (c) is satisfied, then the Before-Tax Contributions with
respect to Highly Compensated Employees shall be reduced, beginning
with the contributions representing the greatest dollar amount per
Participant, to the extent necessary to make the aggregate dollar
amount of such reductions equal to the amount by which the Before-Tax
Contributions (prior to such reduction) had exceeded the requirements
of subsection (c)(1) or (c)(2), whichever is less. Such reduction
shall be made in accordance with the methodology prescribed at the
time of the reduction by the Internal Revenue Service under Notice
97-2 or other applicable Notices or Treasury Regulations.
(e) At any time during the Plan Year, the Company may make an estimate of
the amount of Before-Tax Contributions by Highly Compensated Employees
that will be permitted under this section for the year and may reduce
the percent specified in Sec. 5.1(a) for such Participants to the
extent the Company determines in its sole discretion to be necessary
to satisfy at least one of the requirements in subsection (c).
(f) If Before-Tax Contributions with respect to a Highly Compensated
Employee are reduced pursuant to subsection (d), the Excess Before-Tax
Contributions shall be distributed, subject to the following:
(1) For purposes of this subsection, "Excess Before-Tax
Contributions" mean the amount by which Before-Tax
Contributions for Highly Compensated Employees have been
reduced under subsection (d).
(2) Excess Before-Tax Contributions (adjusted for income or losses
allocable thereto as specified in paragraph (3), if any) shall
be distributed to Participants on whose behalf such excess
contributions were made for the Plan Year no later than the
last day of the following Plan Year. Furthermore, the Company
shall attempt to distribute such amount by the 15th day of the
third month following the Plan Year for which the excess
contributions were made to avoid the imposition on the
Participating Employers of an excise tax under Code section
4979.
(3) Income or losses allocable to Excess Before-Tax Contributions
for the Plan Year shall be determined by multiplying the amount
of income or loss for the Plan Year which is allocable to the
Participant's Before-Tax Contributions (and to other amounts
credited to the Participant that the Company elects to include
under subsection (a)(1) by a fraction. The numerator of the
fraction is the Participant's Excess Before-Tax Contributions
for the Plan Year. The denominator of the fraction is the total
balance in the Participant's Accounts attributable to
Before-Tax Contributions (and to other amounts the Company has
elected to include under subsection (a)(1)) on the first day of
the Plan Year, plus Before-Tax Contributions for the Plan Year
and any other amounts the Company has elected to include under
subsection (a)(1) for the Plan Year.
(4) The amount of Excess Before-Tax Contributions and income or
losses allocable thereto which would otherwise be distributed
pursuant to this subsection shall be reduced, in accordance
with regulations, by the amount of Excess Deferrals and income
or losses allocable thereto previously distributed to the
Participant pursuant to Sec. 5.5 for the calendar year ending
with or within the Plan Year.
(g) The deferral percentage for any Participant who is a Highly
Compensated Employee for the Plan Year, and who is eligible to
participate in two or more plans with cash or deferred arrangements
described in Code section 401(k) to which any Participating Employer
or Affiliate contributes, shall be determined as if all employer
contributions were made under a single arrangement unless mandatorily
disaggregated pursuant to regulations under Code section 401(k). This
subsection shall be applied by treating all cash or deferred
arrangements with Plan Years ending within the same calendar year as a
single arrangement.
(h) If two or more plans which include cash or deferred arrangements are
considered as one plan for purposes of Code section 401(a)(4) or Code
section 410(b), the cash or deferred arrangements shall be treated as
one for the purposes of applying the provisions of this section unless
mandatorily disaggregated pursuant to regulations under Code section
401(k).
(i) If the entire Account balance of a Highly Compensated Employee has
been distributed during the Plan Year in which an excess arose, the
distribution shall be deemed to have been a corrective distribution of
the excess and income attributable thereto to the extent that a
corrective distribution would otherwise have been required under
subsection (f) of this section, Sec. 5.5 or Sec. 5.6(f).
(j) A corrective distribution of excess contributions under subsection (f)
of this section, Excess Aggregate Contributions under Sec. 5.6(f), or
Excess Deferrals under Sec. 5.5 may be made without regard to any
notice or Participant or spousal consent required under Article VIII
or X.
(k) In the event of a complete termination of the Plan during the Plan
Year in which an excess arose, any corrective distribution under
subsection (f) of this section or Sec. 5.6(f) shall be made as soon as
administratively feasible after the termination, but in no event later
than 12 months after the date of termination.
Sec. 5.5 Distribution of Excess Deferrals. Notwithstanding any
other provisions of the Plan, Excess Deferrals for a calendar year and income or
losses allocable thereto shall be distributed no later than the following April
15 to Participants who claim such Excess Deferrals, subject to the following:
(a) For purposes of this section, "Excess Deferrals" means the amount of
Before-Tax Contributions for a calendar year that the Participant
claims pursuant to the procedure set forth in subsection (b) because
the total amount deferred for the calendar year exceeds $10,000 for
1998 (indexed for inflation for subsequent calendar years) or such
other limit imposed on the Participant for that year under Code
section 402(g).
(b) The Participant's written claim, specifying the amount of the
Participant's Excess Deferral for any calendar year, shall be
submitted to the Company no later than the March 1 following such
calendar year. The claim shall include the Participant's written
statement that if such amounts are not distributed, such Excess
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code section 401(k), 403(b), or 408(k),
exceed the limit imposed on the Participant by Code section 402(g) for
the year in which the deferral occurred. A Participant shall be deemed
to have submitted such a claim to the extent the Participant has
Excess Deferrals for the calendar year taking into account only
contributions under this Plan and any other plan maintained by a
Participating Employer or an Affiliate.
(c) Excess Deferrals distributed to a Participant with respect to a
calendar year shall be adjusted to include income or losses allocable
thereto using the same method specified for excess Before-Tax
Contributions under Sec. 5.4(f)(3).
(d) The amount of Excess Deferrals and income allocable thereto which
would otherwise be distributed pursuant to this section shall be
reduced, in accordance with applicable regulations, by the amount of
excess Before-Tax Contributions and income allocable thereto
previously distributed to the Participant pursuant to Sec. 5.4 for the
Plan Year beginning with or within such calendar year, and by the
amount of any deferrals properly distributed as excess annual
additions under Sec. 6.1.
Sec. 5.6 Adjustment of Contributions Required by Code Section
401(m). After the provisions of Sec. 5.4 and Sec. 5.5 have been satisfied, the
requirements set forth in this section must also be met. If necessary to
satisfy the requirements of Code section 401(m), Matching Contributions shall be
adjusted in accordance with the following:
(a) Each Plan Year, the "contribution percentage" will be calculated for
each Active Participant (other than an Active Participant who is in a
collective bargaining unit required to be disaggregated pursuant to
Treasury Regulation ss. 1.401(m)-1(b)(3)(ii)). Each Participant's
contribution percentage is calculated by dividing the amount referred
to in paragraph (1) by the amount referred to in paragraph (2).
(1) The total Matching Contributions under Sec. 5.2, if any,
allocated to the Participant's Accounts with respect to the
Plan Year. The Company may also elect to include all or part of
the Before-Tax Contributions and Qualified Non-Elective
Contributions to be allocated to the Participant's Accounts
with respect to that Plan Year, provided that the requirements
of Treasury Regulation ss.1.401(m)-1(b) are satisfied and
provided that the requirements of Sec. 5.4 are met before such
contributions are used under this section and continue to be
met after the exclusion for purposes of Sec. 5.4 of those
contributions that are used to satisfy the requirements of this
section. However, any Matching Contributions that are
forfeited, either to correct excess contributions under
subsection (f) of this section, or because the contributions to
which they relate are Excess Before-Tax Contributions under
Sec. 5.4, Excess Deferrals under Sec. 5.5 or excess
contributions under subsection (f) of this section, shall be
disregarded.
(2) The Participant's Compensation with respect to the Plan Year
For purposes of this section, "Compensation" has the same
meaning as provided in Sec.
5.4(a)(2).
(b) Each Plan Year, the average contribution percentage of Active
Participants who are Highly Compensated Employees and the average
contribution percentage for Active Participants who are Non-Highly
Compensated Employees will be calculated. In each case, the average is
the average of the percentages calculated under subsection (a) for
each of the employees in the particular group. In calculating average
contribution percentages, Participants employed in a collective
bargaining unit required to be disaggregated pursuant to Treasury
Regulation ss. 1.401(m)-1(f)(14) shall be disregarded. The
contribution percentage for each Participant and the average
contribution percentage for a particular group of employees shall be
calculated to the nearest one-hundredth of one percent.
(c) If the requirements of either paragraph (1) or (2) are satisfied, then
no further action is needed under this section:
(1) The average contribution percentage for Participants who are
Highly Compensated Employees is not more than 1.25 times the
average contribution percentage for Participants who are
Non-Highly Compensated Employees.
(2) The excess of the average contribution percentage for
Participants who are Highly Compensated Employees over the
average contribution percentage for Participants who are
Non-Highly Compensated Employees is not more than two
percentage points, and the average contribution percentage for
such Highly Compensated Employees is not more than 2 times the
average contribution percentage for such Non-Highly Compensated
Employees.
(d) Commencing January 1, 1997, if neither of the requirements of
subsection (c) is satisfied, then the Matching Contributions with
respect to Highly Compensated Employees shall be reduced, beginning
with the contributions representing the greatest dollar amount per
Participant, to the extent necessary to make the aggregate dollar
amount of such reductions equal to the amount by which the Matching
Contributions (prior to such reduction) had exceeded the requirements
of subsection (c)(1) or (c)(2), whichever is less. Such reduction
shall be made in accordance with the methodology prescribed at the
time of the reduction by the Internal Revenue Service under Notice
97-2 or other applicable Notices or Treasury Regulations.
(e) At any time during the Plan Year, the Company may make an estimate of
the amount of Matching Contributions on behalf of Highly Compensated
Employees that will be permitted under this section for the year. If
the Company determines in its sole discretion that reductions are
necessary to assure that at least one of the requirements in
subsection (c) are satisfied, the Company may take written action
amending Sec. 5.2 to reduce or eliminate Matching Contributions for
Highly Compensated Employees with respect to Certified Earnings to be
paid from the date such action is adopted to the end of the Plan Year.
(f) If contributions with respect to a Highly Compensated Employee are
reduced pursuant to subsection (d), the Excess Aggregate Contributions
shall be treated as follows:
(1) For purposes of this subsection, "Excess Aggregate
Contributions" mean the amount by which Matching Contributions
must be reduced under subsection (d).
(2) Excess Matching Contributions (adjusted for income or losses
allocable thereto) shall be forfeited (if otherwise forfeitable
under the provisions of Sec. 9.2 if the Participant were to
terminate employment on the last day of the Plan Year for which
the contribution was made). Excess Matching Contributions which
are non-forfeitable (adjusted for income or losses allocable
thereto) shall be distributed to Participants on whose behalf
such excess contributions were made for the Plan Year no later
than the last day of the following Plan Year. Furthermore, the
Company shall attempt to distribute such amount by the 15th day
of the third month following the Plan Year for which the excess
contributions were made to avoid the imposition on the
Participating Employers of an excise tax under Code section
4979.
(3) Income or losses allocable to Excess Aggregate Contributions
shall be determined in the same manner specified for Excess
Before-Tax Contributions under Sec. 5.4(f)(3).
(4) Amounts forfeited by Highly Compensated Employees pursuant to
paragraph (2) shall be applied to reduce future Matching
Contributions as provided in Sec.
5.2.
(g) The contribution percentage for any Participant who is a Highly
Compensated Employee for the Plan Year, and who is eligible to make
nondeductible employee contributions or to receive matching
contributions under two or more plans described in Code section 401(a)
that are maintained by the Participating Employers or any Affiliate,
shall be determined as if all such contributions were made under a
single arrangement unless mandatorily disaggregated pursuant to
regulations under Code section 401(m).
(h) If two or more plans maintained by the Participating Employers or
Affiliates are treated as one plan for purposes of satisfying the
eligibility requirements of Code section 410(b), those plans must be
treated as one plan for purposes of applying the provisions of this
section unless mandatorily disaggregated pursuant to regulations under
Code section 401(m).
(i) Notwithstanding the foregoing, if neither subparagraph (c)(1) of this
section nor Sec. 5.4(c)(1) was satisfied, the requirements set forth
in Sec. 5.7 must also be satisfied.
Sec. 5.7 Multiple Use of the Alternative Limitations. If neither
Sec. 5.4(c)(1) nor Sec. 5.6(c)(1) was satisfied, the following additional
requirements must also be satisfied:
(a) The sum of the following two amounts must not exceed the greater of
the limit determined under subsection (b) or the limit determined
under subsection (c):
(1) The average deferral percentage for Highly Compensated Employees
(determined under Sec. 5.4(b) following any adjustments required
by Sec. 5.4).
(2) The average contribution percentage for Highly Compensated
Employees (determined under Sec. 5.6(b) following any
adjustments required by Sec.
5.6).
(b) The limit under this subsection is the sum of the following amounts:
(1) 1.25 multiplied by the greater of:
(A) The average deferral percentage for Non-Highly Compensated
Employees (determined under Sec. 5.4(b) following any
adjustments required by Sec. 5.4), or
(B) The average contribution percentage for Non-Highly
Compensated Employees (determined under Sec. 5.6(b)
following any adjustments required by Sec. 5.6).
(2) Two percentage points plus the lesser of:
(A) The average deferral percentage for Non-Highly Compensated
Employees, or
(B) The average contribution percentage for Non-Highly
Compensated Employees.
Notwithstanding the foregoing, the amount under this paragraph
(2) cannot exceed the lesser of (A) or (B) above, multiplied by
two, or such other limit as may be prescribed by Treasury
Regulations.
(c) The limit under this subsection (c) is the amount that would be
determined under subsection (b) by:
(1) Substituting "lesser" for "greater" in paragraph (1) of
subsection (b), and
(2) Substituting "greater" for "lesser" each place that word
appears in paragraph (2) of subsection (b).
(d) If the amount determined under subsection (a) exceeds the greater of
the limits determined under subsections (b) and (c), an additional
amount must be treated as Excess Before-Tax Contributions and
distributed under Sec. 5.4. In addition, any Matching Contributions
attributable to those Before-Tax Contributions shall be treated as
forfeited and shall be applied as a credit against future
contributions from the Participating Employers. Appropriate
adjustments under this subsection must be made pursuant to Treasury
regulations until the sum of the average deferral percentage and
average contribution percentage for Highly Compensated Employees is
equal to the greater of the limits determined under subsections (b)
and (c).
(e) For Plan Years commencing after 1996, this section shall be applied in
accordance with the provisions of IRS Notice 97-2 or other applicable
Notices or Treasury Regulations.
Sec. 5.8 Time of Contributions. Before-Tax Contributions, Matching
Contributions, and Qualified Non-Elective Contributions by a Participating
Employer for a Plan Year shall be paid to the Funding Agency no later than the
time (including extensions thereof) prescribed by law for filing the employer's
federal income tax return for the tax year in which the Plan Year ends.
Before-Tax Contributions and any other contributions taken into account under
Sec. 5.4(a)(1) shall be paid to the Funding Agency no later than 12 months
following the end of the Plan Year, if earlier. In addition, Before-Tax
Contributions or Matching Contributions shall be paid to the Funding Agency by
any earlier date that may be specified in Treasury or Department of Labor
regulations.
Sec. 5.9 Allocations. Contributions under Sections 5.1, 5.2, and
5.3 shall be allocated to the Accounts of Participants as follows:
(a) Before-Tax Contributions with respect to each Participant electing
deferrals pursuant to Sec. 5.1 for a Plan Year shall be allocated to
the Before-Tax Account of each such Participant as of the last day of
the Plan Year.
(b) Matching Contributions for a Plan Year, and the Forfeitures credited
against such Contributions, shall be allocated to the Matching Account
of each eligible Participant as of the last day of the Plan Year.
(c) Qualified Non-Elective Contributions for a Plan Year shall be
allocated to the Qualified Non-Elective Contribution Account of each
eligible Participant as of the last day of the Plan Year.
(d) Allocations shall be reflected in Accounts as provided in Article VII.
However, the Funding Agency shall treat contributions as though they
had been allocated to the Accounts as of the Valuation Date coinciding
with or following the date they were deposited with the Funding Agency
for purposes of allocating investment gains and losses pursuant to
Sec. 7.2 and Sec. 7.3.
(e) Before-Tax Contributions and Matching Contributions for a Plan Year
which are deposited with the Funding Agency after the end of that Plan
Year but prior to the deadline specified in Sec. 5.8 shall also be
allocated to the appropriate Before-Tax Account or Matching Account as
of the last day of that Plan Year except to the extent the Company
determines that it is necessary to treat some or all of such
contributions as being contributions for the Plan Year in which they
are deposited with the Funding Agency in order to satisfy the
requirements of Sec. 5.4 or Sec. 5.6.
Sec. 5.10 Limitations on Contributions. In no event shall the
amount of a Participating Employer's contribution under this Article for any
Plan Year exceed the lesser of:
(a) The maximum amount allowable as a deduction in computing its taxable
income for that Plan Year for federal income tax purposes.
(b) The aggregate amount of the contributions by such Participating
Employer that may be allocated to Accounts of Participants under the
provisions of Article VI.
ARTICLE VI
LIMITATION ON ALLOCATIONS
-------------------------
Sec. 6.1 Limitation on Allocations. Notwithstanding any provisions of
the Plan to the contrary, allocations to Participants under the Plan shall not
exceed the maximum amount permitted under Code section 415. For purposes of the
preceding sentence, the following rules shall apply to Plan Years commencing
after 1986 unless otherwise provided in Code section 415:
(a) The Annual Additions with respect to a Participant for any Plan Year
shall not exceed the lesser of:
(1) $30,000, adjusted for each Plan Year commencing on or after
January 1, 1995 to reflect cost of living increases for that
Plan Year published by the Secretary of the Treasury.
(2) 25% of the Compensation of such Participant for such Plan Year.
(b) If a Participant is also a participant in one or more other defined
contribution plans maintained by a Participating Employer or an
Affiliate, and if the amount of employer contributions and forfeitures
otherwise allocated to the Participant for a Plan Year must be reduced
to comply with the limitations under Code section 415, such
allocations under this Plan and each of such other plans shall be
reduced pro rata in the sequence specified in subsection (c), and pro
rata within each category within that sequence, to the extent
necessary to comply with said limitations, except that reductions to
the extent necessary shall be made in allocations under profit sharing
plans and stock bonus plans before any reductions are made under money
purchase plans.
(c) If for any Plan Year the limitation described in subsection (a) would
otherwise be exceeded by contributions to this Plan with respect to
any Participant, the Participant's Annual Additions shall be adjusted
in the following sequence, but only to the extent necessary to reduce
Annual Additions to the level permitted in subsection (a):
(1) The Participant's after-tax voluntary employee contributions
for the Plan Year, if any, shall be refunded to the Participant
during the Plan Year or as soon as reasonably possible
following the end of the Plan Year.
(2) The Participant's Before-Tax Contributions for the Plan Year,
if any, shall be reduced, and that amount shall be refunded to
the Participant.
(3) If, after the adjustments in paragraphs (1) and (2) there is an
excess amount with respect to a Participant for a Plan Year,
such excess amount shall be held unallocated in a suspense
account. The suspense account will be applied to reduce future
employer contributions for all Participants in the current Plan
Year, the next Plan Year, and in each succeeding Plan Year, if
necessary. The suspense account will participate in the
allocation of the investment gains and losses of the Fund and
the value of such account will be considered in valuing other
Accounts under the Plan.
(4) Any amounts refunded under paragraphs (1) or (2) shall be
disregarded for purposes of applying the limits under Sec. 5.4,
Sec. 5.5 and Sec. 5.6.
(d) If the Participant is also a participant in one or more defined
benefit plans maintained by a Participating Employer or an Affiliate,
the sum of the Participant's defined benefit plan fraction and defined
contribution plan fraction, determined according to Code section
415(e), for any Plan Year may not exceed 1.0. If the sum of a
Participant's defined benefit fraction and defined contribution
fraction would otherwise exceed 1.0 for any Plan Year, the benefits
provided under the defined benefit plan or plans shall be reduced to
the extent necessary to reduce the sum of the fractions to 1.0. This
subsection (d) ceases to apply commencing January 1, 2000.
(e) For purposes of this section, "Annual Additions" means the sum of the
following amounts allocated to a Participant for a Plan Year under
this Plan and all other defined contribution plans maintained by a
Participating Employer or an Affiliate in which he or she
participates:
(1) Employer contributions, including Before-Tax Contributions made
under this Plan. Excess Before-Tax Contributions, and Excess
Aggregate Contributions which are distributed under the
provisions of Article V are included in Annual Additions, but
Excess Deferrals which are distributed under Sec. 5.5 are not
included in Annual Additions.
(2) Forfeitures, if any.
(3) Voluntary non-deductible contributions, if any.
(4) Amounts attributable to medical benefits as described in Code
sections 415(1)(2) and 419A(d)(2).
An Annual Addition with respect to a Participant's Accounts shall be
deemed credited thereto with respect to a Plan Year if it is
allocated to the Participant's Accounts under the terms of the Plan
as of any date within such Plan Year.
(f) For purposes of this section, "Compensation" means an employee's
earned income, wages, salaries, 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 Participating Employers and Affiliates to the
extent that the amounts are includible in gross income (including, but
not limited to, commissions, compensation for services on the basis of
a percentage of profits, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan
described in Treasury Regulationss. 1.62-2(c)), subject to the
following:
(1) Compensation excludes any employer contributions to a plan of
deferred compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, any distributions from a plan of deferred
compensation, and any other amounts which receive special tax
benefits. However, any amounts received by an employee pursuant
to an unfunded non-qualified plan of deferred compensation may
be considered as Compensation in the year such amounts are
includible in the employee's gross income. Notwithstanding the
foregoing, for Plan Years commencing on or after January 1,
1998, Compensation includes the Before-Tax Contributions to
this Plan and any other elective deferrals which are not
includible in the gross income of the employee under Code
sections 125, 401(k), 402(h)(1)(B), 403(b) or 457.
(2) Compensation excludes amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) becomes transferable, is no longer subject to a
substantial risk of forfeiture, or becomes taxable pursuant to
an election under Code section 83(b).
ARTICLE VII
INDIVIDUAL ACCOUNTS
-------------------
Sec. 7.1 Accounts for Participants. The following Accounts may be
established under the Plan for a Participant:
(a) A Before-Tax Account and Matching Account shall be established for
each Participant who makes or receives contributions allocable to
such an Account.
(b) A Qualified Non-Elective Account shall be established for each
Participant who receives a Qualified Non-Elective Contribution under
Sec. 5.3.
(c) A Rollover Account shall be established for each Participant who
makes a Rollover Contribution, as provided by Sec. 7.5.
(d) A Voluntary After-Tax Account shall be maintained for each
Participant who elected to make Voluntary After-Tax Contributions
prior to 1988. A Voluntary Deductible Account shall be maintained for
each Participant who elected to make voluntary deductible
contributions under the provisions of the Plan previously in effect.
More than one of any of the above types of Accounts may be established if
required by the Plan or if considered advisable by the Company in the
administration of the Plan. The Company may also cause the Funding Agency to
establish a Forfeiture Account for the Plan (which may be divided into multiple
subaccounts) to hold amounts which have become Forfeitures under Sec. 9.2(b),
and investment earnings and losses allocable to such amounts, until they are
applied as provided in Sec. 5.2(c). Except as expressly provided herein to the
contrary, the Fund shall be held and invested on a commingled basis, Accounts
shall be for bookkeeping purposes only, and the establishment of Accounts shall
not require any segregation of Fund assets.
Sec. 7.2 Valuation Procedure. As of each Valuation Date, the value
of each Account shall be adjusted to reflect the effect of distributions,
transfers, withdrawals, income, realized and unrealized profits and losses,
contributions, and all other transactions with respect to the Account since the
next preceding Valuation Date, as follows:
(a) The value of each Account determined in accordance with this section
as of the preceding Valuation Date (and adjusted as provided in
subsection (c) below) shall be adjusted to reflect any investment
gains, losses or expenses credited to or charged against the Account
by the Funding Agency pursuant to Sec. 7.3.
(b) There shall be added to the adjusted value of each Account the amount
of any contributions made for that Account pursuant to Article V
during the period subsequent to the preceding Valuation Date and
ending on the current Valuation Date.
(c) From the value of each Account determined as of the next preceding
Valuation Date, there shall be deducted the amount of all
distributions and withdrawals, if any, made from the Account since
the preceding Valuation Date. There shall also be deducted any
non-vested portion of a Matching Account which has become a
Forfeiture since the preceding Valuation Date.
(d) The Plan's Forfeiture Account shall be adjusted as of each Valuation
Date to reflect any investment earnings and losses on the investments
held for that Account, transfers into that Account of amounts which
have become Forfeitures under Sec. 9.2(b), and withdrawals from that
Account to reinstate Accounts pursuant to Sec. 9.2(b) or to be
applied as credits against Matching Contributions pursuant to Sec.
5.2(d).
Sec. 7.3 Investment of Accounts. Each Participant shall direct the
investment of his or her Accounts, subject to the following:
(a) The Company shall determine the class or classes of investments which
will be made available as investment options under this Plan from time
to time. The Company may in its sole discretion add additional
options, merge options, or delete existing options at any time. If one
or more existing investment options are to be replaced by one or more
new options, the transfers from old to new options shall be made
pursuant to such rules and procedures as the Company establishes for
this purpose, and the resulting investments shall continue to be held
for the Participant until the Participant files a new investment
direction.
(b) All investment directions shall be filed in writing on a prescribed
form (or by using an alternative method authorized by the Company) and
shall be filed with the Company, or with such agent or agents as may
be designated from time to time by the Company for this purpose. Each
investment direction shall remain in effect until a new investment
direction is made by the Participant. An initial investment direction
shall be made by the Participant when an Account is first established
for the Participant. Thereafter, a Participant may change the
investment of the existing Account balances and future contributions
at such intervals as may be authorized by the Company or the
designated agent. All investment directions must be in such increments
for any investment option as are specified by the Company or its
designated agent. Each investment direction must be received by the
Company, or by an agent appointed by the Company for this purpose,
prior to the deadline established from time to time by the Company or
its agent for the date it is to be effective (which deadline can vary
depending on the type of election or the manner in which the direction
is made). Each such investment direction will be implemented within a
reasonable period of time, as determined by the Company or its
designated agent and by the Funding Agency, after the direction is
received by the Funding Agency. Notwithstanding the foregoing, the
Company may establish rules delaying the effective date of investment
elections, or establishing blackout periods during which investment
elections or other transactions will not be processed, as the Company
determines is advisable for the administration of the Plan.
(c) All investment directions by a Participant shall be complete as to the
terms of the investment transaction. An investment direction shall
provide for both the investment of existing Account balances and the
investment of future contributions on behalf of the Participant. The
Company or its agent may allow Participants to make separate
investment directions for separate Accounts or groups of Accounts. No
Funding Agency shall have any obligation whatsoever to invest or
manage any assets held in a Participant's Accounts, its sole duty
being to follow within a reasonable period of time all proper
directions of the Participant which are made in accordance with the
Plan and which are not contrary to ERISA. If a Participant fails to
provide directions as to the investment of any cash held in his or her
Accounts, the Company may in its sole discretion designate an
investment vehicle or vehicles to be used to hold such funds.
(d) All earnings and losses on the investments held for each of the
Participant's Accounts shall be credited directly to such Account, and
the Account shall be charged with all expenses attributable to such
investments. If assets of an Account are commingled for investment
with assets of other Accounts, all such Accounts shall share
proportionately in the investment experience of and expenses
chargeable to the commingled fund according to a method which the
Funding Agency determines in its sole discretion to be reasonable. The
Funding Agency may also charge to each Account such portion of the
general expenses of the Fund as the Funding Agency determines in its
sole discretion to be reasonable.
(e) Following the death of the Participant, each of his or her
Beneficiaries shall have the right to direct the investment of the
portion of the Participant's Accounts held on behalf of the
Beneficiary. An "alternate payee" pursuant to the terms of a qualified
domestic relations order shall have the right to direct the investment
of the Accounts held on behalf of the alternate payee after the order
is determined to be qualified, unless the order specifically provides
to the contrary. In each such case, the directions shall be subject to
the same terms and conditions as applied to the Participant.
(f) Except as provided in Sections 7.6 and 7.7, the Funding Agency shall
at all times retain title to all assets held for Accounts, and shall
have the voting power with respect to all stock or other securities
held for Accounts, unless that voting power has been delegated in
writing to an investment manager or other entity or individual.
(g) All investment directions shall be in accordance with such rules and
regulations as the Company or the Funding Agency may establish from
time to time for this purpose.
(h) The Plan's Forfeiture Account shall be invested in such investments as
the Company may designate from time to time for this purposes.
(i) Each Account shall be valued by the Funding Agency at fair market
value as of each Valuation Date and at such other times as may be
necessary for the proper administration of the Plan. If fair market
value of an asset is not available, it shall be deemed to be fair
value as determined in good faith by the Company or other Named
Fiduciary assigned such function, or if such asset is held in trust
and the trust agreement so provides, as determined in good faith by
the trustee. If any portion of the fund is invested in a contract
issued by an insurance company, of a type sometimes referred to as a
"guaranteed income contract", under which the insurance company pays a
guaranteed minimum rate of interest for a stated period of time, and
if no event has occurred that will result in repayment of principal at
a discounted value, the fair market value of the contract shall be
deemed to be its book value.
(j) Notwithstanding anything herein to the contrary, if the Plan receives
a recovery on an investment (including, but not limited to, a recovery
from the Federal Deposit Insurance Corporation, a state insurance
guaranty association or the Securities Industry Protection
Corporation, or a recovery under federal or state securities laws)
which recovery is earmarked by the paying entity as attributable to a
specific Participant or Beneficiary, the amount recovered shall be
allocated only to the Account(s) of such Participant or Beneficiary,
and the Accounts of other Participants and Beneficiaries shall not
share in the recovery. The Company shall make appropriate adjustments
in allocations of investment earnings and losses and Account values to
reflect the provisions of this subsection.
Sec. 7.4 Participant Statements. Each Plan Year the Company ma
cause each Participant to be provided with a statement of Account balances as of
the end of the immediately preceding Plan Year.
Sec. 7.5 Rollover Accounts. At the request of a Qualified Employee
and with the consent of the Company, the Plan may accept a transfer to the Fund
of an amount that constitutes a Rollover Contribution. The Company shall grant
such consent in its sole discretion and only if it is certain that the amount to
be transferred will constitute a proper Rollover Contribution. Notwithstanding
any provisions of the Plan to the contrary, the following shall apply with
respect to a Rollover Contribution:
(a) A Rollover Account shall be established for each employee who makes a
Rollover Contribution. From the date the assets of the Rollover
Contribution are transferred to the Fund through the first Valuation
Date following such transfer, the Rollover Account shall be valued at
the fair market value of said assets on the date of such transfer.
(b) No employer or employee contributions or Forfeitures shall ever be
added to a Rollover Account. In the event of the employee's
Termination of Employment entitling him or her to a benefit under
Sec. 9.2, the vested percentage in the Rollover Account shall be
100%.
(c) The employee shall be treated the same as a Participant hereunder
from the time of the transfer, but shall not actually be a
Participant and shall not be eligible to receive an allocation of
employer contributions or Forfeitures or to make employee
contributions until he or she has satisfied the requirements of
Article IV.
(d) Notwithstanding anything herein to the contrary, if the Company
subsequently determines that an amount received pursuant to this
section does not qualify as a Rollover Contribution, such amount
(adjusted for investment earnings or losses allocated to such amount
after it was received by the Plan) shall be returned as soon as
reasonably possible to the individual or entity that transferred the
amount to the Plan (or to the Participant if the transferor refuses
to accept the return).
(e) For purposes of this section, "Rollover Contribution" means a
contribution of an amount which may be rolled over to this Plan
pursuant to Code section 401(a)(31), 402(c), 403(a)(4), 408(d)(3), or
any other provision of the Code which may permit rollovers to this
Plan from time to time.
Sec. 7.6 Voting of Company Stock. Before each annual or special
meeting of the stockholders of the Company, the Company shall cause to be sent
to each Participant a copy of the proxy solicitation material therefor, together
with a form requesting confidential instructions to the Funding Agency on how to
vote the shares of Company stock held in the Company Stock Fund. Instructions
received from Participants by the Funding Agency shall be held in the strictest
confidence and shall not be divulged or released to any person, including
officers or employees of the Company. To be effective, such instructions must be
received by the Funding Agency at least the number of days prior to the
stockholder's meeting specified in the materials sent to the Participants. The
Funding Agency shall vote all shares of Company stock held in the Company Stock
Fund in proportion to "votes" cast by Participants, as follows:
(a) The Funding Agency shall determine the aggregate number of votes
which may be cast with respect to all shares of Company stock held in
the Company Stock Fund.
(b) The Company shall determine the Participant's aggregate interest in
the Company Stock Fund as a percentage of the interests of all
Participants in said Fund.
(c) The number of "votes" the Participant may cast shall be determined by
applying the percentage in (b) to the aggregate number of shares in
(a).
(d) The Funding Agency shall determine the number of "votes" for,
against, and abstaining with respect to each proposition and shall
vote, in person or by proxy, shares of Company stock held in the
Company Stock Fund equal to the "votes" received in the manner
directed in those "votes".
(e) Notwithstanding anything in this section to the contrary, if a matter
to be voted upon is one with respect to which shares of a particular
class must vote separately, shares of that class held by the Plan
shall be voted in accordance with this section applied as if the Plan
held only those shares.
The determinations in subsections (a), (b), and (c) shall be as of a Valuation
Date designated by the Company which is not more than 90 days prior to the
meeting. It is intended that shares held for the benefit of Participants who do
not give voting instructions with respect to any matter will not be voted by the
Funding Agency on that matter. The Company may require verification of the
Funding Agency's compliance with voting instructions received from Participants
by any independent auditor selected by the Company. The rights extended to
Participants by this section shall also apply to the Beneficiaries of deceased
Participants. For purposes of this Sec. 7.6, each Participant or Beneficiary who
gives voting instructions shall be deemed a "named fiduciary" (within the
meaning of ERISA) with respect to such instructions. For purposes of this Sec.
7.6 and Sec. 7.7, the "Company Stock Fund" is any investment fund established
and made available to Participants under Sec. 7.3 which is primarily invested in
shares of stock of the Company.
Sec. 7.7 Tender or Exchange Offers Regarding Company Stock. As soon
as practicable after the commencement of a tender or exchange offer (an "Offer")
for shares of Company stock, the Company shall use its best efforts to cause
each Participant whose Accounts has allocated to them any shares of Company
stock to be advised in writing of the terms of the Offer, and to be provided
with forms by which the Participant may instruct the Funding Agency, or revoke
such instruction, to tender or exchange shares of Company stock, to the extent
permitted under the terms of such Offer. The Funding Agency shall follow the
directions of each Participant. In advising Participants of the terms of the
Offer, the Company may include statements from the Board setting forth its
position with respect to the Offer. The giving of instructions by a Participant
to the Funding Agency to tender or exchange shares and the tender or exchange
thereof shall not be deemed a withdrawal or suspension from the Plan or a
forfeiture of any portion of such Participant's interest in the Plan solely by
reason of the giving of such instructions and the Funding Agency's compliance
therewith.
(a) The number of shares as to which a Participant may provide
instructions shall be determined as follows:
(1) The Funding Agency shall determine the aggregate number of
shares held in the Company Stock Fund.
(2) The Company shall determine the Participant's aggregate
interest in the Company Stock Fund as a percentage of the
interests of all Participants in said Fund.
(3) The Participant may provide instructions with respect to a
number of shares of Company stock determined by applying the
percentage in (2) to the aggregate number of shares in (1). If
the Participant directs tender or exchange of the shares for
which he or she may provide instructions, the Funding Agency
shall follow that instruction. The Funding Agency shall not
tender or exchange the shares for which a Participant may
provide instructions if the Participant (i) directs against
their tender or exchange or (ii) gives no direction.
(b) The determination of the number of shares as to which a Participant
may provide instructions shall be as of the close of business on the
day preceding the date on which the Offer is commenced or such earlier
date as shall be designated by the Company as the Company, in its sole
discretion, deems appropriate for reasons of administrative
convenience. Any securities received by the Funding Agency as a result
of a tender or exchange of shares of Company stock shall be held, and
any cash so received shall be invested in short-term investments
pending any reinvestment by the Funding Agency, as it may deem
appropriate, consistent with the purposes of the Plan. The rights
extended to Participants by this section shall also apply to the
Beneficiaries of deceased Participants.
(c) If a tender or exchange offer is limited so that all of the shares
that the Funding Agency has been directed to tender or exchange cannot
be sold or exchanged, the shares that each Participant directed be
tendered or exchanged shall be deemed to have been sold or exchanged
in the same ratio that the number of shares actually sold or exchanged
bears to the total number of shares that the Funding Agency was
directed to tender or exchange.
(d) For purposes of this Sec. 7.7, each Participant or Beneficiary who is
entitled to give such instructions shall be deemed a "named fiduciary"
(within the meaning of ERISA) with respect to such instructions.
ARTICLE VIII
DESIGNATION OF BENEFICIARY
--------------------------
Sec. 8.1 Persons Eligible to Designate. Any Participant may designate
a Beneficiary to receive any amount payable from the Fund as a result of the
Participant's death, provided that the Beneficiary survives the Participant. The
Beneficiary may be one or more persons, natural or otherwise. By way of
illustration, but not by way of limitation, the Beneficiary may be an
individual, trustee, executor, or administrator. The Beneficiary with respect to
one Account may be different from the Beneficiary with respect to another
Account. A Participant may also change or revoke a designation previously made,
without the consent of any Beneficiary named therein.
Sec. 8.2 Special Requirements for Married Participants.
Notwithstanding the provisions of Sec. 8.1, if a Participant is married at the
time of his or her death, the Beneficiary shall be the Participant's spouse
unless the spouse has consented in writing to the designation of a different
Beneficiary, the spouse's consent acknowledges the effect of such designation,
and the spouse's consent is witnessed by a representative of the Plan or a
notary public. Such consent shall be deemed to have been obtained if it is
established to the satisfaction of the Company that such consent cannot be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as may be prescribed by federal regulations.
Any consent by a spouse shall be irrevocable. Any designation of a Beneficiary
which has received spousal consent may be changed (other than by being revoked)
without spousal consent only if the consent by the spouse expressly permits
subsequent designations by the Participant without any requirement for further
consent by the spouse. Any such consent shall be valid only with respect to the
spouse who signed the consent, or in the case of a deemed consent, the
designated spouse. The provisions of this section shall apply only to
Participants who have at least one Hour of Service on or after August 23, 1984.
Sec. 8.3 Form and Method of Designation. Any designation or a
revocation of a prior designation of Beneficiary shall be in writing on a form
acceptable to the Company and shall be filed with the Company. The Company and
all other parties involved in making payment to a Beneficiary may rely on the
latest Beneficiary designation on file with the Company at the time of payment
or may make payment pursuant to Sec. 8.4 if an effective designation is not on
file, shall be fully protected in doing so, and shall have no liability
whatsoever to any person making claim for such payment under a subsequently
filed designation of Beneficiary or for any other reason.
Sec. 8.4 No Effective Designation. If there is not on file with
the Company an effective designation of Beneficiary by a deceased Participant,
the Beneficiary shall be the person or persons surviving the Participant in the
first of the following classes in which there is a survivor, share and share
alike:
(a) The Participant's spouse.
(b) The Participant's children, except that if any of the Participant's
children predecease the Participant but leave issue surviving the
Participant, such issue shall take by right of representation the
share their parent would have taken if living.
(c) The Participant's parents.
(d) The Participant's brothers and sisters.
(e) The Participant's estate.
Determination of the identity of the Beneficiary in each case shall be made by
the Company.
Sec. 8.5 Successor Beneficiary. If a Beneficiary who survives the
Participant subsequently dies before receiving all payments to which the
Beneficiary was entitled, the successor Beneficiary, determined in accordance
with the provisions of this section, shall be entitled to the balance of any
remaining payments due. A Beneficiary who is not the surviving spouse of the
Participant may not designate a successor Beneficiary. A Beneficiary who is the
surviving spouse may designate a successor Beneficiary only if the Participant
specifically authorized such designations on the Participant's Beneficiary
designation form. If a Beneficiary is permitted to designate a successor
Beneficiary, each such designation shall be made according to the same rules
(other than Sec. 8.2) applicable to designations by Participants. If a
Beneficiary is not permitted to designate a successor Beneficiary, or is
permitted to do so but fails to make such a designation, the balance of any
payments remaining due will be payable to a contingent Beneficiary if the
Participant's Beneficiary designation so specifies, and otherwise to the estate
of the deceased Beneficiary.
ARTICLE IX
BENEFIT REQUIREMENTS
--------------------
Sec. 9.1 Benefit on Retirement, Disability or Change in Control.
If a Participant's Termination of Employment occurs (for any reason other than
death) under any of the following circumstances, the Participant shall be 100%
vested and shall be entitled to a benefit equal to the value of all of his or
her Accounts:
(a) The Participant has reached age 55.
(b) The Participant's Termination of Employment has occurred due to a
bodily injury or disease which the Company determines, based on
competent medical evidence, makes the Participant unfit to perform
the normal duties of his or her position with a Participating
Employer and causes the Participant to be eligible to receive
benefits under a long-term disability plan of a Participating
Employer or Social Security disability benefits.
(c) The Participant has an Involuntary Termination of Employment within
three years after the date a Change in Control occurs. For purposes
of this subsection:
(1) The term "Change in Control" means (i) the acquisition, whether
directly, indirectly, beneficially (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended
(the "1934 Act")), or of record, of securities of the Company
representing 25% or more in number of the total of a) the
number of shares of common stock then outstanding, b) the
number of shares of common stock issuable upon conversion
(whether or not then convertible) or otherwise of Class B
Common Stock, and c) the number of shares of common stock
issuable upon conversion (whether or not then convertible) or
otherwise constituting the common stock equivalent of any other
class or series of capital stock which votes for or in the
election of directors (hereinafter, "Total Shares") by any
"person" (within the meaning of Sections 13(d) and 14(d)(2) of
the 1934 Act), including any corporation or group of associated
persons acting in concert, other than (I) the Company and/or
(II) any employee pension benefit plan (within the meaning of
Section 3(2) of ERISA) of the Company or any of its
subsidiaries, including a trust established pursuant to any
such plan, or (ii) the nomination and election of 25% or more
of the Company's Board of Directors without recommendation of
such Board. The ownership of record of 25% or more of the Total
Shares of the Company by a person engaged in the business of
acting as nominee for unrelated beneficial owners shall not of
itself be deemed to constitute a Change in Control.
(2) The term "Involuntary Termination of Employment" means (i) the
Termination of Employment of a Participant by the Company or a
subsidiary other than a Termination for Cause, or (ii) in the
case of a Participant who is employed by a subsidiary of the
Company, either (I) the sale of a substantial portion of the
assets of the subsidiary within the meaning of Code section
280G, or (II) the acquisition by an unrelated third party of
ownership of more than 50% of the then outstanding stock of the
subsidiary. "Termination for Cause" means the Termination of
Employment of a Participant as a direct result of an act or
acts of dishonesty constituting a felony under the laws of the
United States or the State of Iowa and resulting or intended to
result directly or indirectly in gain or personal enrichment at
the expense of any Participating Employer. An act or acts of
dishonesty constituting the felony are established either by
(i) the specific admission of the Participant, or (ii) a final
nonappealable judgment of a court of competent jurisdiction.
The benefit shall be paid at the times and in the manner determined under
Article X.
Sec. 9.2 Other Termination of Employment. If a Participant's
Termination of Employment occurs (for any reason other than death) under
circumstances such that the Participant is not entitled to a benefit under Sec.
9.1, the Participant shall be entitled to a benefit equal to the value of all of
his or her Accounts other than any Matching Account and also a benefit equal to
the vested percentage of the value of the Participant's Matching Account,
subject, however, to the following:
(a) The vested percentage shall depend upon the number of the
Participant's Years of Vesting Service at the time of the Termination
of Employment, as follows:
Vesting Schedule
Years of Vesting Service Vested Percentage
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
Notwithstanding the foregoing, if a Participant's Termination of
Employment occurred as of December 31, 1997 and the Participant was
employed by Optimum Quality Grains, L.L.C. as of January 1, 1998, the
Participant's vested percentage shall be 100% regardless of his or
her Years of Vesting Service. A Participant described in the previous
sentence may file an election with the Company (in such manner as may
be prescribed by the Company from time to time) at any time prior to
his or her termination of employment with Optimum to have his or her
Accounts in the Plan transferred to the Optimum Quality Grains,
L.L.C. Retirement and Savings Plan. Such transfer shall be made as
soon as administratively feasible after the election is received by
the Company or its designated agent and the Company or its agent has
determined in its sole discretion that such plan-to-plan transfer
will not jeopardize the qualified status of this Plan under Code
section 401(a).
(b) The disposition of the portion of a Participant's Matching Account
that is not vested shall be as provided below:
(1) The portion of the Participant's Matching Account that is not
vested shall become a Forfeiture as of the earlier of the
following dates:
(A) The date the Participant incurs his or her fifth
consecutive 1-Year Break In Service.
(B) The date that the vested portion of all of the
Participant's Accounts has been distributed to the
Participant. If the Participant was 0% vested in a
particular Account, that Account will be deemed for
purposes of this subparagraph (B) to have been distributed
when the Participant's Termination of Employment occurred.
The Participant shall lose all claim to the amount forfeited on
the date as of which the Forfeiture occurs. The Forfeiture
shall be transferred to the Plan's Forfeiture Account for
application as provided in paragraph (4) below and in Sec.
5.2(c).
(2) If a former Participant whose Account was forfeited under
paragraph (1) is subsequently reemployed and completes a Year
of Vesting Service before incurring five consecutive 1-Year
Breaks In Service, a separate Matching Account shall be
reinstated for the Participant as of the last Valuation Date of
the Plan Year in which such Year of Vesting Service is
completed. The Participant shall be entitled to such Account in
accordance with the provisions of this Article IX upon any
subsequent Termination of Employment, subject to the provisions
of paragraph (3). The total value of such Account as of such
Valuation Date shall be equal to the value of the Forfeiture on
the date as of which the Forfeiture occurred. The reinstated
Account shall be funded as provided in paragraph (4).
(3) If a Participant referred to in paragraph (2) who received a
distribution from a Matching Account as a result of a previous
Termination of Employment is not 100% vested in the reinstated
Matching Account upon a subsequent Termination of Employment,
the benefit to which the Participant is entitled therefrom
shall be determined as follows:
(A) To the value of such reinstated Account there shall be
added the amount of the benefit from the Matching Account
which the Participant received as a result of the prior
Termination of Employment.
(B) The applicable vested percentage from the vesting schedule
shall be applied to such sum.
(C) From the result obtained in (B), there shall be subtracted
the amount added to the value of the reinstated Account
under (A).
(4) The amount required to reinstate an Account pursuant to
paragraph (2) as of the last Valuation Date of a Plan Year
shall be provided from the following sources in the priority
indicated:
(A) Amounts forfeited under this subsection (b).
(B) Employer contributions for the Plan Year.
(C) Net income or gain of the Fund not previously allocated to
other Accounts.
(5) If Forfeitures are to be applied as a credit against future
contributions and a Forfeiture would exceed the amount
remaining due from the Participating Employers for the Plan
Year, the Forfeiture shall instead occur on the first day of
the following Plan Year.
(6) This subsection (b) shall not apply to any Forfeiture Account
which became a Forfeiture pursuant to the provisions of the
Plan in effect prior to the adoption of this version of this
subsection. Any such Forfeiture Account shall be disposed of
pursuant to such prior Plan provisions.
(c) The benefit under this section shall be paid at the times and in the
manner determined under Article X.
Sec. 9.3 Death. If a Participant's Termination of Employment is the
result of death, his or her Beneficiary shall be entitled to a benefit equal to
the value of all of the Participant's Accounts. Such benefit shall be paid at
the times and in the manner determined under Article X. If a Participant's death
occurs after his or her Termination of Employment, distribution of the vested
balance of the Participant's Accounts shall be made to the Beneficiary in
accordance with the provisions of Article X, and any non-vested portion of the
Participant's Matching Account shall be treated as becoming a Forfeiture under
Sec. 9.2(b) as of the date of the Participant's death.
Sec. 9.4 Withdrawals Before Termination of Employment.
A Participant may request a cash withdrawal from his or her Accounts at any time
prior to the date benefits first become payable to the Participant under
Sec. 9.1 or Sec. 9.2 pursuant to the following:
(a) A withdrawal may be made from the Participant's Before-Tax and
Matching Accounts only to meet a financial hardship.
(1) A hardship withdrawal will be permitted only if the Company
determines that both of the following requirements are met:
(A) The withdrawal must be made on account of one of the
following reasons:
(i) Expenses for medical care described in section 213(d)
of the Code incurred by the Participant, the
Participant's spouse, or any dependents of the
Participant, as defined in section 152 of the Code,
or expenses necessary for any of those persons to
obtain such medical care, which are not reimbursable
from insurance or any other source.
(ii) Costs directly related to the purchase of the
principal residence of the Participant (excluding
mortgage payments).
(iii)Payment of tuition for the next 12 months of
post-secondary education for the Participant, or for
his or her spouse, children or dependents.
(iv) The need to prevent the eviction of the Participant
from his or her principal residence or foreclosure on
the mortgage of the Participant's principal
residence.
(B) All of the following requirements must be satisfied:
(i) The amount of the distribution cannot exceed the
amount of the immediate and heavy financial need of
the Participant. The Company may reasonably rely on
the Participant's representation as to that amount.
However, the amount of the distribution may include
any amounts determined by the Company to be necessary
to pay any federal, state or local income taxes or
penalties reasonably expected to result from the
distribution.
(ii) The Participant must have obtained all distributions,
other than hardship distributions, and all nontaxable
loans currently available under all plans maintained
by the Participating Employers or any Affiliate.
(iii)The Participant's elective contributions and employee
contributions under the Plan and all other qualified
and nonqualified plans of deferred compensation
maintained by the Participating Employers or any
Affiliate will be suspended pursuant to the terms of
the plan or an otherwise legally enforceable
agreement for at least 12 months after the receipt of
the hardship distribution.
(iv) For the calendar year immediately following the
calendar year of the hardship distribution, the
Participant may not make contributions under all
plans maintained by the Participating Employers or
any Affiliate in excess of the applicable limit under
section 402(g) of the Code for such next calendar
year less the amount of the Participant's elective
contributions for the calendar year of the hardship
distribution.
(v) Notwithstanding the foregoing provisions of this
subparagraph (B), this subparagraph (B) will be
satisfied if the IRS issues a revenue ruling, notice,
or other document of general applicability which
establishes an alternative method under which
distributions will be deemed to be necessary to
satisfy an immediate and heavy financial need and all
of the requirements of such alternative method are
met.
(2) With respect to any such hardship withdrawal, earnings credited
to the Participant's Before-Tax Account after December 31, 1988
cannot be withdrawn under this subsection (a), and no
withdrawals under this subsection (a) may be made from any
Qualified Non-Elective Account which is attributable to
contributions used to calculate deferral percentages under Sec.
5.4(a)(1) and earnings attributable to such contributions.
(3) No withdrawal shall be permitted under this subsection unless
the Participant has previously withdrawn or concurrently
withdraws the maximum amount permitted to be withdrawn under
subsection (b). Except as otherwise provided in paragraph (2),
all amounts shall be withdrawn from the Participant's
Before-Tax Account before any withdrawals are made from the
Participant's Matching Account.
(4) Notwithstanding the foregoing, amounts may be withdrawn from a
Matching Account only to the extent the Participant would be
vested in such amounts if his or her Termination of Employment
occurred on the date of the withdrawal. If a Participant who
has made a withdrawal under this section from a Matching
Account subsequently has a Termination of Employment before
becoming 100% vested, the amount to which the Participant is
entitled from that Account as of the Valuation Date specified
in Sec. 9.2 shall be adjusted by (i) adding to the value of
that Account the amount which has been withdrawn, (ii)
multiplying the result by the vested percentage from Sec.
9.2(a), and (iii) subtracting from that result the amount which
has been withdrawn.
(b) A withdrawal may be made from the Participant's Voluntary After-Tax,
Rollover and Voluntary Deductible Accounts for any reason.
Withdrawals under this subsection shall be made in the following
order of priority (i) the portion of the Participant's Voluntary
After-Tax Account equal to the contributions made by the Participant
prior to 1987, (ii) the remainder of the Voluntary After-Tax Account,
(iii) any Rollover Account, (iv) any Voluntary Deductible Account.
(c) Requests for withdrawals under this section shall be made pursuant to
applicable rules and regulations adopted by the Company which are
uniform and non-discriminatory as to all Participants and shall be
submitted in writing to the Company on such form as the Company
prescribes for this purpose. The Company shall determine whether the
requirements of this section have been met.
(d) The Company shall direct the Funding Agency respecting the payment of
withdrawals under this section. Commencing January 1, 1998, payment
shall be made to the Participant as soon as administratively feasible
following the date the withdrawal request has been approved by the
Company or its designated agent, and shall be based on values
determined as of a Valuation Date selected by the Funding Agency
which is on or before the date of payment.
(e) The amount of a withdrawal under this section from any Account may
not exceed the balance standing to the credit of the Account on the
applicable Valuation Date less any portion of the Account
attributable to any outstanding loan.
(f) Withdrawals shall be taken pro rata from the investments held for the
Accounts of the Participant subject to the withdrawal.
(g) Only two withdrawals under this section may be made in any calendar
year.
Sec. 9.5 Loans to Participants. The Company may authorize a loan
to a Participant who is an employee of a Participating Employer or an Affiliate
and who makes application therefor. Each such loan shall be subject to the
following provisions:
(a) The amount of any loan to a Participant, when added to the balance of
all other loans to the Participant under this Plan and all related
plans which are outstanding on the day on which such loan is made,
shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of (i) the highest
outstanding balance of loans to the 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 from the Plan and all
related plans on the date the loan is made; or
(2) 50% of the amount to which the Participant would be entitled in
the event his or her Termination of Employment were 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)(4), sponsored by the
Participant's Participating Employer or any related employer,
determined according to Code section 72(p)(2)(D).
(b) The minimum amount of any loan shall be $1,000.00. Only one loan may
be outstanding to a Participant at any time.
(c) Each loan shall be evidenced by the Participant's promissory note
payable to the order of the Funding Agency, in such form and executed
in such manner as is determined under procedures established by the
Company or its designated agent. Each loan shall be adequately
secured as determined by the Company. A loan shall be considered
adequately secured whenever the outstanding balance does not exceed
the amount in which the Participant would have a vested interest in
the event of his or her Termination of Employment.
(d) The Company shall determine the rate of interest to be paid with
respect to each loan, which shall be a reasonable rate of interest
within the meaning of Code section 4975. The rate shall be based on
the interest rates charged by persons in the business of lending
money in the region in which the Company operates for loans which
would be made under similar circumstances.
(e) Each such loan shall provide for the payment of accrued interest and
for repayment of principal in substantially equal installments not
less frequently than monthly. There will be no penalty for prepayments
of any loan, but any prepayment must be in the form of a lump sum
payment of the entire outstanding balance of the loan. While the
Participant is employed by the Participating Employers, all loans
shall be repaid through payroll deductions to the extent possible,
except in the case of temporary employees for whom the Company
authorizes an alternate method of repayment. The Participant shall
execute any documents required to authorize such deductions.
(f) Each loan shall extend for a stated period determined by agreement of
the Participant and the Company, not exceeding five years.
(g) Failure to pay any installment of interest or principal when due shall
constitute a default on the loan (subject to any applicable grace
period for correcting the default). Upon any such default, the entire
loan balance shall be declared to be in default to the extent required
by applicable regulations. Events of default shall also include any
other events identified as such in the Participant's note. In the
event of a default on a loan, foreclosure on the note and application
of the Participant's Accounts to satisfy the note will occur as of the
earliest date on which the Participant or Beneficiary is eligible to
receive payment of benefits under the Plan attributable to the loan,
but will not occur prior to that date. Loan repayments will be
suspended under this Plan as permitted under Code section 414(u)(4)
(relating to periods of military service).
(h) If a loan to a Participant is outstanding on the date a distribution
is to be made from the Fund with respect to the portion of the
Participant's Account or 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. 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 portion of the Participant's Account or Accounts
equal to the outstanding balance on the loan may be distributed in
kind by distribution of the Participant's note.
(i) If a loan to a Participant is outstanding at the time of the
Participant's death, and if the loan is not repaid by the
Participant's executor or administrator, the note shall be
distributed in kind to the Participant's Beneficiary.
(j) The Company shall administer the loan program under this section and
shall direct the Funding Agency with respect to the making of loans
to Participants, the collection thereof, and all other matters
pertaining thereto. The Funding Agency shall follow such directions
to the extent possible and shall not take any independent action with
respect to such loans, except to the extent the Funding Agency has
agreed to process loans on behalf of the Plan.
(k) In accordance with the foregoing standards and requirements, loans
shall be available to all Participants on a reasonably equivalent
basis.
(l) All loans shall be governed by such non-discriminatory written rules
as the Company may adopt, which shall be deemed to be a part of this
Plan. Applications for loans shall be filed with the Company or its
designated agent (which may be the Funding Agency) in such manner as
the Company may prescribe from time to time for this purpose. The
loan principal will be disbursed by the Funding Agency within a
reasonable time after the application has been received and approved.
(m) The Company 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.
(n) The portion of a Participant's Account or Accounts represented by the
outstanding loan principal shall be segregated for investment
purposes. In lieu of sharing in income or losses on investments of the
Fund, the segregated portion of the Participant's Accounts shall be
credited with all interest paid by the Participant on the loan.
Repayments of principal and interest on a loan shall be reinvested in
accordance with the investment designation in effect under Sec. 7.3
for future contributions at the time the repayment is received by the
Funding Agency. The Funding Agency may charge to the Participant's
Accounts any expenses attributable to the loan and such portion of the
general expenses of the Fund as the Funding Agency determines in its
discretion to be reasonable. In the event of a Forfeiture under Sec.
9.2(b), no portion of an outstanding loan may be transferred to the
Forfeiture Account.
(o) The investments held in the Participant's Accounts shall be
liquidated on a pro rata basis to provide the Fund with cash equal to
the loan principal. The loan principal shall be obtained from the
Participant's Accounts in the order of priority established by the
Company for this purpose.
(p) Solely for purposes of this section, a former Participant (or any
Beneficiary of a deceased Participant or alternate payee of a
Participant under a qualified domestic relations order) who is
entitled to a benefit from the Plan, and who is a "party in interest"
as defined in section 3(14) of ERISA, is considered to be an employee
of a Participating Employer who is eligible to receive a loan from
the Plan. No such person who is not a "party in interest" is eligible
to receive a loan.
ARTICLE X
DISTRIBUTION OF BENEFITS
------------------------
Sec. 10.1 Time and Method of Payment. The benefit to which a
Participant or Beneficiary may become entitled under Article IX shall be
distributed to that individual at such time as he or she elects, subject to the
following:
(a) The distribution may be made at any time after the date as of which
the Participant or Beneficiary becomes entitled to a benefit payment
under Article IX. The amount of the distribution will be determined
pursuant to Sec. 10.3.
(1) All distributions shall be made by payment in a single sum
except as provided in paragraph (2).
(2) If the Participant's Termination of Employment occurs after the
Participant reaches age 55, the Participant may elect to make
partial withdrawals from his or her Accounts, subject to the
following:
(A) No more than two such withdrawals may be made during any
calendar year.
(B) The amount to be distributed to the Participant on or
after January 1 of the calendar year in which the
Participant attains age 70 1/2 and on or before April 1
following that year shall be at least equal to the
Participant's entire interest in the Plan as of the
December 31st preceding such calendar year divided by the
smaller of:
(i) The joint life and last survivor expectancy
(determined pursuant to Treasury Regulation
ss.1.72-9) of the Participant and the Participant's
oldest designated Beneficiary, if any, based on the
age of each individual as of their birthdays in such
calendar year.
(ii) In the case of distributions to a Participant whose
designated Beneficiary is not the Participant's
spouse, the applicable divisor provided in
regulations under Code section 401(a)(9)(G) relating
to incidental death benefits.
(C) The amount to be distributed to the Participant by December
31st of each calendar year following the year in which the
Participant attains age 70 1/2shall be at least equal to the
Participant's entire interest in the Plan as of the December
31st preceding each such calendar year divided by the
smaller of (i) the life expectancy determined in
subparagraph (B)(I) reduced by one year for each subsequent
calendar year, or (ii) the applicable divisor determined
under subparagraph (B)(II)
(b) Unless the Participant elects otherwise, distribution must be made or
commence no later than the 60th day after the close of the Plan Year in
which the Participant reaches Normal Retirement Age or in which the
Participant's Termination of Employment occurs, whichever is later;
provided, however, that if the amount of the payment to be made cannot be
determined by the later of the aforesaid dates, a payment retroactive to
such date may be made no later than 60 days after the earliest date on
which the amount of such payment can be ascertained. For purposes of this
subsection, the failure of a Participant to elect to receive a distribution
shall be deemed to be an election to defer distribution of the benefit.
(c) The distribution to a Participant must be made or distributions must
commence by April 1 following the calendar year in which the Participant
attains age 70 1/2 unless the Participant's death occurs before that date.
However, if the Participant attained age 70 1/2before January 1, 1988 and
is not a more than 5-percent owner, distribution is not required to be made
(or commence under subsection (a)(2)) until April 1 following the calendar
year in which the Participant's Termination of Employment occurs, if later.
For purposes of this subsection, a "more than 5-percent owner" is a person
who was a more than 5-percent owner of a Participating Employer (as defined
in Code section 416) at any time during the Plan Year ending with or within
the calendar year in which he or she attained age 70 1/2.
(d) If the Participant dies before receiving the entire distribution and
before the date that the distribution was required to occur or
commence under subsection (c), the Participant's Accounts shall be
distributed in a lump sum to the Beneficiary not later than December
31 of the year containing the fifth anniversary of the Participant's
death; provided, however, that if the designated Beneficiary is the
surviving spouse of the Participant, the payment may be made any time
on or before the later of (i) December 31 of the year in which the
Participant would have reached age 70 1/2, or (ii) December 31 of the
year following the year in which the Participant's death occurred. If
a surviving spouse who is entitled to benefits under this subsection
dies before the distribution to the surviving spouse has been made,
this subsection (other than the special exception which applies to a
designated Beneficiary who is the surviving spouse of the Participant)
shall be applied as if the surviving spouse were the Participant, with
the date of death of the surviving spouse being substituted for the
date of death of the Participant.
(e) If the Participant dies after the date that distribution was required
to commence under subsection (c), any remaining benefit shall be
distributed to the Beneficiary at least as rapidly as the method
specified in subsection (a)(2)(C), but the Beneficiary may elect to
receive a lump sum distribution of the remaining benefit at any time.
(f) For purposes of this section, "designated Beneficiary" means any
individual who is a Beneficiary pursuant to Article VIII. If more
than one Beneficiary is entitled to benefits following the
Participant's death, the interest of each Beneficiary shall be
segregated into a separate Account for purposes of applying this
section.
(g) Notwithstanding the foregoing, distributions may be made to any
Participant or Beneficiary pursuant to any designation made prior to
January 1, 1984 which satisfied all the requirements of Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982, as
in effect on January 1, 1984, and the regulations thereunder;
provided, however, that any designation of Beneficiary included as a
part of such designation must comply with the spousal consent
requirements under Sec. 8.2.
(h) Notwithstanding the foregoing, commencing January 1, 1998 (regardless
of when the Participant's Termination of Employment occurred), if the
total vested value of the Accounts of a Participant (or a Beneficiary
following the Participant's death) is $5,000 or less following the
date the Participant's Termination of Employment or death occurs, a
single-sum distribution shall be made to the Participant (or
Beneficiary) as of the earliest date permitted by the Plan. However,
this subsection shall not apply to a Participant if the total vested
value of the Participant's Accounts exceeded $5,000 at the time any
previous distribution was made to the Participant.
(i) Notwithstanding any provision of the Plan to the contrary,
distributions under this section shall be made in accordance with the
requirements of Code section 401(a)(9), including the incidental
death benefit requirements of Code section 401 (a)(9)(G) and the
regulations thereunder. No distribution option otherwise permitted
under this Plan will be available to a Participant or Beneficiary if
such distribution option does not meet the requirements of Code
section 401(a)(9), including subparagraph (G) thereof.
(j) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election, a distributee may elect, at
the time and in the manner prescribed by the Company, to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this subsection:
(1) 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 to the extent such distribution is required
under Code section 401(a)(9), and the portion of any
distribution that is not includible in gross income.
(2) 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 401(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.
(3) A "distributee" includes a Participant or former Participant.
In addition, the Participant's or former Participant's
surviving spouse and the Participant's or former Participant'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.
(4) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
Sec. 10.2 Form of Distribution. Distributions will be made in cash
only, except as otherwise provided in Sec. 9.5, and except that a Participant
whose Termination of Employment has occurred and who has elected to have some or
all of his or her Accounts invested in a Company Stock Fund pursuant to Article
VII may elect, prior to such deadline as may be established from time to time by
the Company or its designated agent, to receive the portion of such Accounts
representing whole shares of Company stock in kind by distribution of shares of
Company stock. Any fractional shares of Company stock shall be distributed in
cash in all events.
Sec. 10.3 Accounting Following Termination of Employment. If
distribution of a benefit is deferred or delayed for any reason, the
undistributed Accounts shall continue to be revalued as of each Valuation Date
as provided in Article VII. Commencing January 1, 1998, payment shall be made as
of a Valuation Date determined by the Funding Agency which occurs as soon as
administratively feasible following the date the Participant (or Beneficiary
following the Participant's death) files the request for payment with the
Company or its designated agent (or following the Participant's Termination of
Employment or death in the case of an automatic payment under Sec. 10.1(h)). If
a Participant has more than one Account, each distribution shall be made from
such Account or Accounts as the Participant designates.
Sec. 10.4 Reemployment. Except where distributions are required
under Sec. 10.1, entitlement to a distribution from the Fund shall cease upon
reemployment of a Participant in a regular position by a Participating Employer,
and shall recommence in accordance with the provisions of this Article upon the
Participant's subsequent Termination of Employment.
Sec. 10.5 Source of Benefits. All benefits to which persons become
entitled hereunder shall be provided only out of the Fund and only to the extent
that the Fund is adequate therefor. No benefits are provided under the Plan
except those expressly described
herein.
Sec. 10.6 Incompetent Payee. If in the opinion of the Company a
person entitled to payments hereunder is disabled from caring for his or her
affairs because of mental or physical condition, or age, payment due such person
may be made to such person's guardian, conservator, or other legal personal
representative upon furnishing the Company with evidence satisfactory to the
Company of such status. Prior to the furnishing of such evidence, the Company
may cause payments due the person under disability to be made, for such person's
use and benefit, to any person or institution then in the opinion of the Company
caring for or maintaining the person under disability. The Company shall have no
liability with respect to payments so made. The Company shall have no duty to
make inquiry as to the competence of any person entitled to receive payments
hereunder.
Sec. 10.7 Benefits May Not Be Assigned or Alienated. Except as
otherwise expressly permitted by the Plan or required by law, the interests of
persons entitled to benefits under the Plan may not in any manner whatsoever be
assigned or alienated, whether voluntarily or involuntarily, or directly or
indirectly. However, the Plan shall comply with the provisions of any court
order which the Company determines is a qualified domestic relations order as
defined in Code section 414(p). Notwithstanding any provisions in the Plan to
the contrary, an individual who is entitled to payments from the Plan as an
"alternate payee" pursuant to a qualified domestic relations order shall receive
a lump sum payment from the Plan as soon as administratively feasible after the
Valuation Date coincident with or next following the date of the Company's
determination that the order is a qualified domestic relations order, unless the
order specifically provides for payment to be made at a later time.
Sec. 10.8 Payment of Taxes. The Funding Agency may pay any estate,
inheritance, income, or other tax, charge, or assessment attributable to any
benefit payable hereunder which in the Funding Agency's opinion it shall be or
may be required to pay out of such benefit. The Funding Agency may require,
before making any payment, such release or other document from any taxing
authority and such indemnity from the intended payee as the Funding Agency shall
deem necessary for its protection.
Sec. 10.9 Conditions Precedent. No person shall be entitled to a
benefit hereunder until his or her right thereto has been finally determined by
the Company nor until the person has submitted to the Company relevant data
reasonably requested by the Company, including, but not limited to, proof of
birth or death.
Sec. 10.10 Company Directions to Funding Agency. The Company shall
issue such written directions to the Funding Agency as are necessary to
accomplish distributions to the Participants and Beneficiaries in accordance
with the provisions of the Plan.
Sec. 10.11 Effect on Unemployment Compensation. For purposes of any
unemployment compensation law, a distribution hereunder in one sum to the extent
attributable to employer contributions, shall be considered to be a severance
payment and shall be allocated over a period of weeks equal to the one sum
payment divided by the employee's regular weekly pay while employed by the
Participating Employers, which period shall commence immediately following the
employee's Termination of Employment.
Sec. 10.12 Special Distribution Events. Notwithstanding anything
herein to the contrary, if the agreement between the buyer and the seller in one
of the following types of transaction provides that distributions are to be made
to affected Participants, each such Participant shall receive a distribution of
his or her vested Account balance as soon as administratively feasible after
either of the following events:
(a) The disposition by a Participating Employer 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 such
Participating Employer if such Participating Employer continues to
maintain this Plan after the disposition, but only with respect to
employees who continue employment with the corporation acquiring such
assets.
(b) The disposition by a Participating Employer or by an Affiliate to an
unrelated entity of such corporation's interest in a subsidiary
(within the meaning of Code section 409(d)(3)) which was a
Participating Employer if such corporation continues to maintain this
Plan, but only with respect to employees who continue employment with
such subsidiary.
All distributions under this section are subject to any applicable consent
requirements under Sec. 10.1. In addition, distributions under this section must
be made in a lump sum.
ARTICLE XI
FUND
----
Sec. 11.1 Composition. All sums of money and all securities and other
property received by the Funding Agency for purposes of the Plan, together with
all investments made therewith, the proceeds thereof, and all earnings and
accumulations thereon, and the part from time to time remaining shall constitute
the "Fund". The Company may cause the Fund to be divided into any number of
parts for investment purposes or any other purposes necessary or advisable for
the proper administration of the Plan.
Sec. 11.2 Funding Agency. The Fund may be held and invested as one
fund or may be divided into any number of parts for investment purposes. Each
part of the Fund, or the entire Fund if it is not divided into parts for
investment purposes, shall be held and invested by one or more trustees or by an
insurance company. The trustee or trustees or the insurance company so acting
with respect to any part of the Fund is referred to herein as the Funding Agency
with respect to such part of the Fund. The selection and appointment of each
Funding Agency shall be made by the Company. The Company shall have the right at
any time to remove a Funding Agency and appoint a successor thereto, subject
only to the terms of any applicable trust agreement or group annuity contract.
The Company shall have the right to determine the form and substance of each
trust agreement and group annuity contract under which any part of the Fund is
held, subject only to the requirement that they are not inconsistent with the
provisions of the Plan. Any such trust agreement may contain provisions pursuant
to which the trustee will make investments on direction of a third party.
Sec. 11.3 Compensation and Expenses of Funding Agency. The Funding
Agency shall be entitled to receive such reasonable compensation for its
services as may be agreed upon with the Company. The Funding Agency shall also
be entitled to reimbursement for all reasonable and necessary costs, expenses,
and disbursements incurred by it in the performance of its services. Such
compensation and reimbursements shall be paid from the Fund if not paid directly
by the Participating Employers in such proportions as the Company shall
determine.
Sec. 11.4 Funding Policy. The Company shall adopt a procedure, and
revise it from time to time as it shall consider advisable, for establishing and
carrying out a funding policy and method consistent with the objectives of the
Plan and the requirements of ERISA. It shall advise each Funding Agency of the
funding policy in effect from time to time.
Sec. 11.5 Securities and Property of Participating Employers. An
agreement with a Funding Agency may provide that all or any part of the Fund may
be invested in qualifying employer securities or qualifying employer real
property, as those terms are used in ERISA; provided, however, that the Company
shall take any steps necessary to assure that investments in securities of any
Participating Employer or any trade or business entity directly or indirectly
controlling, controlled by, or under Common Control with a Participating
Employer do not exceed those that can be acquired by that part of the Fund
attributable to contributions by Participating Employers (other than Before-Tax
Contributions), as distinguished from that part of the Fund, if any,
attributable to contributions by Participants or Before-Tax Contributions,
unless there has been compliance with any applicable securities laws. If
qualifying employer securities or qualifying employer real property are
purchased or sold as an investment of the Fund from or to a disqualified person
or party in interest, as those terms are used in ERISA, and if there is no
generally recognized market for such securities or property, the purchase shall
be for not more than fair market value and the sale shall be for not less than
fair market value, as determined in good faith by the Company or other Named
Fiduciary assigned such function, or if such assets are held in trust and the
trust agreement so provides, as determined in good faith by the trustee.
Sec. 11.6 No Diversion. The Fund shall be for the exclusive purpose
of providing benefits to Participants under the Plan and their beneficiaries and
defraying reasonable expenses of administering the Plan. Such expenses may
include premiums for the bonding of Plan officials required by ERISA. No part of
the corpus or income of the Fund may be used for, or diverted to, purposes other
than for the exclusive benefit of employees of the Participating Employers or
their beneficiaries. Notwithstanding the foregoing:
(a) If any contribution or portion thereof is made by a Participating
Employer by a mistake of fact, the Funding Agency shall, upon written
request of the Company, return such contribution or portion thereof to
the Participating Employer within one year after the payment of the
contribution to the Funding Agency; however, earnings attributable to
such contribution or portion thereof shall not be returned to the
Participating Employer but shall remain in the Fund, and the amount
returned to the Participating Employer shall be reduced by any losses
attributable to such contribution or portion thereof.
(b) Contributions by the Participating Employers are conditioned upon the
deductibility of each contribution under Code section 404. To the
extent the deduction is disallowed, the Funding Agency shall return
such contribution to the Participating Employer within one year after
the disallowance of the deduction; however, earnings attributable to
such contribution (or disallowed portion thereof) shall not be
returned to the Participating Employer but shall remain in the Fund,
and the amount returned to the Participating Employer shall be reduced
by any losses attributable to such contribution (or disallowed portion
thereof).
(c) Contributions by a Participating Employer are conditioned upon initial
qualification of the Plan as to such Participating Employer under Code
section 401(a). If the Plan receives an adverse determination letter
from the Internal Revenue Service with respect to such initial
qualification, the Funding Agency shall, upon written request of the
Company, return the amount of such contribution to the Participating
Employer within one year after the date of denial of qualification of
the Plan. For this purpose, the amount to be so returned shall be the
contributions actually made, adjusted for the investment experience
of, and any expenses chargeable against, the portion of the Fund
attributable to the contributions actually made.
In the case of any such return of contribution the Company shall cause such
adjustments to be made to the Accounts of Participants as it considers fair and
equitable under the circumstances resulting in the return of such contribution.
ARTICLE XII
ADMINISTRATION OF PLAN
----------------------
Sec. 12.1 Administration by Company. The Company is the
"administrator" of the Plan for purposes of ERISA. Except as expressly otherwise
provided herein, the Company shall control and manage the operation and
administration of the Plan and make all decisions and determinations incident
thereto. In carrying out its Plan responsibilities, the Company shall have
discretionary authority to construe the terms of the Plan. Except in cases where
the Plan expressly provides to the contrary, action on behalf of the Company may
be taken by any of the following:
(a) The Board.
(b) The chief executive officer of the Company.
(c) Any person or persons, natural or otherwise, or committee, to whom
responsibilities for the operation and administration of the Plan are
allocated by the Company, by resolution of the Board or by the chief
executive officer of the Company, but action of such person or
persons or committee shall be within the scope of said allocation.
Sec. 12.2 Certain Fiduciary Provisions. For purposes of the Plan:
(a) Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
(b) A Named Fiduciary, or a fiduciary designated by a Named Fiduciary
pursuant to the provisions of the Plan, may employ one or more persons
to render advice with regard to any responsibility such fiduciary has
under the Plan.
(c) To the extent permitted by any applicable trust agreement or group
annuity contract a Named Fiduciary with respect to control or
management of the assets of the Plan may appoint an investment manager
or managers, as defined in ERISA, to manage (including the power to
acquire and dispose of) any assets of the Plan.
(d) At any time the Plan has more than one Named Fiduciary, if pursuant to
the Plan provisions fiduciary responsibilities are not already
allocated among such Named Fiduciaries, the Company, by action of the
Board or its chief executive officer, may provide for such allocation;
except that such allocation shall not include any responsibility, if
any, in a trust agreement to manage or control the assets of the Plan
other than a power under the trust agreement to appoint an investment
manager as defined in ERISA.
(e) Unless expressly prohibited in the appointment of a Named Fiduciary
which is not the Company acting as provided in Sec. 12.1, such Named
Fiduciary by written instrument may designate a person or persons
other than such Named Fiduciary to carry out any or all of the
fiduciary responsibilities under the Plan of such Named Fiduciary;
except that such designation shall not include any responsibility, if
any, in a trust agreement to manage or control the assets of the Plan
other than a power under the trust agreement to appoint an investment
manager as defined in ERISA.
(f) A person who is a fiduciary with respect to the Plan, including a
Named Fiduciary, shall be recognized and treated as a fiduciary only
with respect to the particular fiduciary functions as to which such
person has responsibility.
Each Named Fiduciary (other than the Company), each other fiduciary, each person
employed pursuant to (b) above, and each investment manager shall be entitled to
receive reasonable compensation for services rendered, or for the reimbursement
of expenses properly and actually incurred in the performance of their duties
with the Plan and to payment therefor from the Fund if not paid directly by the
Participating Employers in such proportions as the Company shall determine.
Notwithstanding the foregoing, no person so serving who already receives
full-time pay from any employer or association of employers whose employees are
Participants, or from an employee organization whose members are Participants,
shall receive compensation from the Plan, except for reimbursement of expenses
properly and actually incurred. Furthermore, no Participant, Beneficiary, or
"alternate payee" under a qualified domestic relations order who is eligible to
direct the investment of his or her Accounts shall receive any compensation or
reimbursement of expenses with respect to such investing.
Sec. 12.3 Discrimination Prohibited. No person or persons in
exercising discretion in the operation and administration of the Plan shall
discriminate in favor of Highly Compensated Employees.
Sec. 12.4 Evidence. Evidence required of anyone under this Plan may
be by certificate, affidavit, document, or other instrument which the person
acting in reliance thereon considers to be pertinent and reliable and to be
signed, made, or presented to the proper party.
Sec. 12.5 Correction of Errors. It is recognized that in the
operation and administration of the Plan certain mathematical, accounting and
other errors may be made or mistakes may arise by reason of factual errors in
information supplied to the Company or Funding Agency. The Company shall have
power to cause such equitable adjustments to be made to correct for such errors
as the Company in its discretion considers appropriate. Such adjustments shall
be final and binding on all persons. The Company may recover any overpayment
from the person who received it. Any return of a contribution due to a mistake
in fact will be subject to Sec. 11.6.
Sec. 12.6 Records. Each Participating Employer, each fiduciary with
respect to the Plan, and each other person performing any functions in the
operation or administration of the Plan or the management or control of the
assets of the Plan shall keep such records as may be necessary or appropriate in
the discharge of their respective functions hereunder, including records
required by ERISA or any other applicable law. Records shall be retained as long
as necessary for the proper administration of the Plan and at least for any
period required by ERISA or other applicable law.
Sec. 12.7 General Fiduciary Standard. Each fiduciary shall
discharge its duties with respect to the Plan solely in the interests of
Participants and their beneficiaries and with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
Sec. 12.8 Prohibited Transactions. A fiduciary with respect to the
Plan shall not cause the Plan to engage in any prohibited transaction within the
meaning of ERISA.
Sec. 12.9 Claims Procedure. The Company shall establish a claims
procedure consistent with the requirements of ERISA. Such claims procedure shall
provide adequate notice in writing to any Participant or beneficiary whose claim
for benefits under the Plan has been denied, setting forth the specific reasons
for such denial, written in a manner calculated to be understood by the claimant
and shall afford a reasonable opportunity to a claimant whose claim for benefits
has been denied for a full and fair review by the appropriate Named Fiduciary of
the decision denying the claim.
Sec. 12.10 Bonding. Plan personnel shall be bonded to the extent
required by ERISA. Premiums for such bonding may, in the sole discretion of the
Company, be paid in whole or in part from the Fund. Such premiums may also be
paid in whole or in part by the Participating Employers in such proportions as
the Company shall determine. The Company may provide by agreement with any
person that the premium for required bonding shall be paid by such person.
Sec. 12.11 Waiver of Notice. Any notice required hereunder may be
waived by the person entitled thereto.
Sec. 12.12 Agent For Legal Process. The Company shall be the agent
for service of legal process with respect to any matter concerning the Plan,
unless and until the Company designates some other person as such agent.
Sec. 12.13 Indemnification. In addition to any other applicable
provisions for indemnification, the Participating Employers jointly and
severally agree to indemnify and hold harmless, to the extent permitted by law,
each director, officer, and employee of the Participating Employers against any
and all liabilities, losses, costs, or expenses (including legal fees) of
whatsoever kind and nature which may be imposed on, incurred by, or asserted
against such person at any time by reason of such person's services as a
fiduciary in connection with the Plan, but only if such person did not act
dishonestly, or in bad faith, or in willful violation of the law or regulations
under which such liability, loss, cost, or expense arises.
ARTICLE XIII
AMENDMENT, TERMINATION, MERGER
------------------------------
Sec. 13.1 Amendment. Subject to the non-diversion provisions of Sec.
11.6, the Company, by action of the Board, or by written action of a person so
authorized by resolution of the Board, may amend the Plan at any time and from
time to time. No action by a person other than the Board shall be an amendment
of the Plan unless it specifically references the Plan and states that it alters
the terms or conditions of the Plan. No amendment of the Plan shall have the
effect of changing the rights, duties, and liabilities of any Funding Agency
without its written consent. Also, no amendment shall divest a Participant or
Beneficiary of Accounts accrued prior to the amendment or decrease a
Participant's accrued benefit except to the extent permitted by Code section
411(d)(6).
(a) Promptly upon adoption of any amendment to the Plan, the Company will
furnish a copy of the amendment, together with a certificate
evidencing its due adoption, as follows:
(1) To each Funding Agency then acting.
(2) To any other Participating Employer that is not under Common
Control with the Company. The amendment shall be effective as
to such a Participating Employer and its employees unless,
within 30 days of receipt of the certificate it notifies the
Company and each Funding Agency in writing that it is
discontinuing its joint participation in the Plan pursuant to
Sec.
13.8.
(b If an amendment to the Plan that is effective for a Plan Year
beginning after 1988 changes the vesting schedule of the Plan, each
Participant having not less than three years of service by the end of
the election period with respect to such amendment shall be permitted
within such election period to elect to have his or her vested
percentage computed under the Plan without regard to such amendment.
Each election shall be made in writing by filing with the Company
within the election period a form available from the Company for the
purpose. The election period shall be a reasonable period determined
by the Company commencing not later than the date the amendment is
adopted and shall be in conformance with any applicable regulation
prescribed by the Secretary of Labor or the Secretary of the Treasury.
Notwithstanding the foregoing, no election need be provided for any
Participant whose vested percentage under the Plan, as amended, cannot
at any time be less than the vested percentage determined without
regard to such amendment.
Sec. 13.2 Permanent Discontinuance of Contributions. The Company, by
action of the Board, may completely discontinue contributions in support of the
Plan by all Participating Employers. In such event, notwithstanding any
provisions of the Plan to the contrary, (i) no employee shall become a
Participant after such discontinuance, (ii) any amount held in the Plan's
Forfeiture Account shall be applied as provided in Sec. 5.2(c) or to pay Plan
expenses, and (iii) the Accounts of each Participant which have not become a
Forfeiture prior to the date of such discontinuance shall be nonforfeitable.
Subject to the foregoing, all of the provisions of the Plan shall continue in
effect, and upon entitlement thereto distributions shall be made in accordance
with the provisions of Article X.
Sec. 13.3 Termination. The Company, by action of the Board, may
terminate the Plan as applicable to all Participating Employers and their
employees. After such termination no employee shall become a Participant, no
further contributions shall be made and any amount in the Plan's Forfeiture
Account shall be applied as provided in Sec. 5.2(c) or to pay Plan expenses. The
Accounts of each Participant which have not become a Forfeiture prior to the
date of such termination shall be nonforfeitable, distributions shall be made to
Participants, Beneficiaries and alternate payees promptly after the termination
of the Plan, but not before the earliest date permitted under the Code and
applicable regulations, and the Plan and any related trust agreement or group
annuity contract shall continue in force for the purpose of making such
distributions.
Sec. 13.4 Partial Termination. If there is a partial termination of
the Plan, either by operation of law, by amendment of the Plan, or for any other
reason, which partial termination shall be confirmed by the Company, any then
existing Account of a Participant who was in the classification of employees
with respect to which the partial termination occurs which has not become a
Forfeiture prior to the date of the partial termination shall be nonforfeitable.
Subject to the foregoing, all of the provisions of the Plan shall continue in
effect as to each such Participant, and upon entitlement thereto distributions
shall be made in accordance with the provisions of Article X.
Sec. 13.5 Merger, Consolidation, or Transfer of Plan Assets. In the
case of any merger or consolidation of the Plan with any other plan, or in the
case of the transfer of assets or liabilities of the Plan to any other plan,
provision shall be made so that each Participant, Beneficiary and alternate
payee would (if such other plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to or greater than
the benefit he or she would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had then terminated). No such
merger, consolidation, or transfer shall be effected until such statements with
respect thereto, if any, required by ERISA to be filed in advance thereof have
been filed.
Sec. 13.6 Deferral of Distributions. Notwithstanding any provisions
of the Plan to the contrary, in the case of a complete discontinuance of
contributions to the Plan or of a complete or partial termination of the Plan,
the Company or the Funding Agency may defer any distribution of benefit payments
to Participants and Beneficiaries with respect to which such discontinuance or
termination applies (except for distributions which are required to be made
under Sec. 10.1) until after the following have occurred:
(a) Receipt of a final determination from the Treasury Department or any
court of competent jurisdiction regarding the effect of such
discontinuance or termination on the qualified status of the Plan
under Code section 401(a).
(b) Appropriate adjustment of Accounts to reflect taxes, costs, and
expenses, if any, incident to such discontinuance or termination.
Sec. 13.7 Reorganizations of Participating Employers. In the event
two or more Participating Employers are consolidated or merged or in the event
one or more Participating Employers acquires the assets of another Participating
Employer, the Plan shall be deemed to have continued, without termination and
without a complete discontinuance of contributions, as to all the Participating
Employers involved in such reorganization and their employees. In such event, in
administering the Plan the corporation resulting from the consolidation, the
surviving corporation in the merger, or the employer acquiring the assets shall
be considered as a continuation of all of the Participating Employers involved
in the reorganization.
Sec. 13.8 Discontinuance of Joint Participation of a Participating
Employer. The Company, by action of the Board or the President of the Company,
may discontinue the joint participation in the Plan by another Participating
Employer. A Participating Employer which is not under Common Control with the
Company may discontinue its joint participation in the Plan with the other
Participating Employers by action of its board of directors and on appropriate
written notice to the Company and each Funding Agency then acting.
(a) If the Company determines in its sole discretion to spin off the
portion of the Plan attributable to the withdrawing employer, the
Company shall cause a determination to be made of the equitable part
of the Fund assets held on account of Participants of the withdrawing
employer and their Beneficiaries. The Company shall direct the Funding
Agency or Funding Agencies to transfer assets representing such
equitable part to a separate fund for the plan of the withdrawing
employer. Such withdrawing employer may thereafter exercise, with
respect to such separate fund, all the rights and powers reserved to
the Company with respect to the Fund. The plan of the withdrawing
employer shall, until amended by the withdrawing employer, continue
with the same terms as the Plan herein, except that with respect to
the separate plan of the withdrawing employer the words "Participating
Employer", "Participating Employers", and "Company" shall thereafter
be considered to refer only to the withdrawing employer. Any such
spinoff shall be effected in such manner that each Participant or
Beneficiary would (if the Plan and the plan of the withdrawing
employer then immediately terminated) receive a benefit which is equal
to or greater than the benefit the individual would have been entitled
to receive immediately before such spinoff if the Plan had then
terminated. No transfer of assets pursuant to this section shall be
effected until such statements with respect thereto, if any, required
by ERISA to be filed in advance thereof have been filed.
(b) If subsection (a) does not apply, the Accounts of Participants of the
withdrawing employer and their Beneficiaries shall continue to be
held in the Plan for distribution in accordance with the provisions
hereof.
Sec. 13.9 Participating Employers Not Under Common Control. If a
Participating Employer is not under Common Control with the Company, the
provisions of the Plan (other than this Article XIII) shall be applied as though
a separate plan is being maintained for that Participating Employer to the
extent required by Code section 413(c).
ARTICLE XIV
TOP-HEAVY PLAN PROVISIONS
-------------------------
Sec. 14.1 Key Employee Defined. "Key Employee" means any employee
or former employee of the employer who at any time during the determination
period was an officer of the employer or is deemed to have had an ownership
interest in the employer and who is within the definition of key employee in
Code section 416(i). "Non-Key Employee" means any employee who is not a Key
Employee.
Sec. 14.2 Determination of Top-Heavy Status. The top-heavy status
of the Plan shall be determined according to Code section 416 and the
regulations thereunder, using the following standards and definitions:
(a) The Plan is a Top-Heavy Plan for a Plan Year if either of the
following applies:
(1) If this Plan is not part of a required aggregation group and
the top-heavy ratio for this Plan exceeds 60 percent.
(2) If this Plan is part of a required aggregation group of plans
and the top-heavy ratio for the group of plans exceeds 60
percent.
Notwithstanding paragraphs (1) and (2) above, the Plan is not a
Top-Heavy Plan with respect to a Plan Year if it is part of a
permissive aggregation group of plans for which the top-heavy ratio
does not exceed 60 percent.
(b) The "top-heavy ratio" shall be determined as follows:
(1) If the employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and has
not maintained any defined benefit plan which during the 5-year
period ending on the determination date has or has had accrued
benefits, the top-heavy ratio for this Plan or for the required
or permissive aggregation group (as appropriate) is a fraction,
the numerator of which is the sum of the account balances of
all Key Employees under the Plan or plans as of the
determination date (including any part of any account balance
distributed in the five-year period ending on the determination
date), and the denominator of which is the sum of the account
balances (including any part of any account balance distributed
in the five-year period ending on the determination date) of
all employees under the Plan or plans as of the determination
date. Both the numerator and denominator of the top-heavy ratio
shall be increased to reflect any contribution not actually
made as of the determination date but which is required to be
taken into account on that date under Code section 416 and the
regulations thereunder.
(2) If the employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
maintains or has maintained one or more defined benefit plans
which during the 5-year period ending on the determination date
has or has had any accrued benefits, the top-heavy ratio for
any required or permissive aggregation group (as appropriate),
is a fraction, the numerator of which is the sum of the account
balances of all Key Employees under the aggregated defined
contribution plan or plans, determined according to paragraph
(1) above, and the present value of accrued benefits of all Key
Employees under the defined benefit plan or plans as of the
determination date, and the denominator of which is the sum of
such account balances of all employees under the aggregated
defined contribution plan or plans and the present value of
accrued benefits of all employees under the defined benefit
plan or plans as of the determination date. The account
balances and accrued benefits in both the numerator and
denominator of the top-heavy ratio shall be adjusted to reflect
any distributions made in the five-year period ending on the
determination date and any contributions due but unpaid as of
the determination date.
(3) For purposes of paragraphs (1) and (2), the value of account
balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls
within the 12-month period ending on the determination date,
except as provided in Code section 416 and the regulations
thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of an
employee (i) who is not a Key Employee but who was a Key
Employee in a prior year, or (ii) who has not been credited
with at least one hour of service with any employer maintaining
the Plan at any time during the 5-year period ending on the
determination date, will be disregarded. The calculation of the
top-heavy ratio and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Code section 416 and the regulations
thereunder. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference
to the determination dates that fall within the same calendar
year.
(c) "Required aggregation group" means (i) each qualified plan of the
employer in which at least one Key Employee participates in the Plan
Year containing the determination date, or any of the four preceding
Plan Years, and (ii) any other qualified plan of the employer that
enables a plan described in (i) to meet the requirements of Code
sections 401(a)(4) and 410.
(d) "Permissive aggregation group" means the required aggregation group
of plans plus any other plan or plans of the employer which, when
consolidated as a group with the required aggregation group, would
continue to satisfy the requirements of Code sections 401(a)(4) and
410.
(e) "Determination date" means, for any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first
Plan Year of the Plan, the last day of that year is the determination
date.
(f) The "determination period" for a Plan Year is the Plan Year in which
the applicable determination date occurs and the four preceding Plan
Years.
(g) The "valuation date" is the last day of each Plan Year and is the
date as of which account balances or accrued benefits are valued for
purposes of calculating the top-heavy ratio.
(h) For purposes of establishing the "present value" of benefits under a
defined benefit plan to compute the top-heavy ratio, any benefit
shall be discounted only for mortality and interest based on the
interest rate and mortality table specified in the defined benefit
plan for this purpose.
(i) If an individual has not performed services for the employer at any
time during the five-year period ending on the determination date
with respect to a Plan Year, any account balance or accrued benefit
for such individual shall not be taken into account for such Plan
Year.
(j) For purposes of determining if a defined benefit plan included in a
required aggregation group of which this Plan is a part is a
Top-Heavy Plan, the accrued benefit to any employee (other than a Key
Employee) shall be determined as follows:
(1) Under the method which is used for accrual purposes under all
defined benefit plans maintained by the employer.
(2) If there is no method described in paragraph (1), as if such
benefit accrued not more rapidly than the lowest accrual rate
permitted under Code section 411(b)(1)(C).
Sec. 14.3 Minimum Contribution Requirement. For any Plan Year with
respect to which the Plan is a Top-Heavy Plan, the employer contributions and
Forfeitures allocated to each Active Participant who is not a Key Employee and
whose Termination of Employment has not occurred prior to the end of such Plan
Year shall not be less than the minimum amount determined in accordance with the
following:
(a) The minimum amount shall be the amount equal to that percentage of
the Participant's Compensation for the Plan Year which is the smaller
of:
(1) 3 percent.
(2) The percentage which is the largest percentage of Compensation
allocated to any Key Employee from employer contributions and
Forfeitures for such Plan Year.
For purposes of this section, "Compensation" means the amounts
specified in Sec. 6.1(f), subject to the limitation in Sec. 2.6(c).
(b) For purposes of this section, any employer contribution attributable
to a salary reduction or similar arrangement shall be taken into
account. Any employer contribution attributable to a salary reduction
or similar arrangement (including Before-Tax Contributions and
Matching Contributions under this Plan) may not be used to satisfy
the minimum amount of employer contributions which must be allocated
under subsection (a).
(c) This section shall not apply to any Participant who is covered under
any other plan of the employer under which the minimum contribution
or minimum benefit requirement applicable to Top-Heavy Plans will be
satisfied.
Sec. 14.4 Participation under Defined Benefit Plan and Defined
Contribution Plan. If a Participant is also a participant in a defined benefit
plan maintained by the employer, with respect to any Plan Year for which the
Plan is a Top-Heavy Plan, Sec. 6.1(d) shall be applied:
(a) By substituting "1.0" for "1.25" in paragraphs (2)(B) and (3)(B) of
Code section 415(e).
(b) By substituting "$41,500" for "$51,875" in Code section
415(e)(6)(B)(i).
The foregoing provisions of this section shall be suspended with respect to any
individual so long as there are no employer contributions, forfeitures, or
voluntary nondeductible contributions allocated to such individual, and no
defined benefit plan accruals for such individual, either under this Plan or
under any other plan that is in a required aggregation group of plans, within
the meaning of Code section 416(g)(2)(A)(i), that includes this Plan.
Sec. 14.5 Definition of Employer. For purposes of this Article XIV,
the term "employer" means all Participating Employers and any trade or business
entity under Common Control with a Participating Employer.
Sec. 14.6 Exception For Collective Bargaining Unit. Section 14.3
shall not apply with respect to any employee included in a unit of employees
covered by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and one or more employers
if there is evidence that retirement benefits were the subject of good faith
bargaining between such employee representative and such employer or employers.
ARTICLE XV
MISCELLANEOUS PROVISIONS
------------------------
Sec. 15.1 Insurance Company Not Responsible for Validity of Plan. No
insurance company that issues a contract under the Plan shall have any
responsibility for the validity of the Plan. An insurance company to which an
application may be submitted hereunder may accept such application and shall
have no duty to make any investigation or inquiry regarding the authority of the
applicant to make such application or any amendment thereto or to inquire as to
whether a person on whose life any contract is to be issued is entitled to such
contract under the Plan.
Sec. 15.2 Headings. Headings at the beginning of articles and
sections hereof
are for convenience of reference, shall not be considered a part of the text of
the Plan, and shall not influence its construction.
Sec. 15.3 Capitalized Definitions. Capitalized terms used in the
Plan shall have their meaning as defined in the Plan unless the context clearly
indicates to the contrary.
Sec. 15.4 Gender. Any references to the masculine gender include
the feminine and vice versa.
Sec. 15.5 Use of Compounds of Word "Here". Use of the words
"hereof", "herein", "hereunder", or similar compounds of the word "here" shall
mean and refer to the entire Plan unless the context clearly indicates to the
contrary.
Sec. 15.6 Construed as a Whole. The provisions of the Plan shall be
construed as a whole in such manner as to carry out the provisions thereof and
shall not be construed separately without relation to the context.
Dated: September 14, 1998 PIONEER HI-BRED INTERNATIONAL, INC.
/s/ Joseph G.(Joe) Dollison
By: Joseph G.(Joe) Dollison
Its Treasurer