i
AIRGAS, INC. 401(k) PLAN
(Amended and Restated Effective January 1, 1997)
(Revised)
Airgas, Inc. (the "Company") adopted the Airgas, Inc. 401(k) Plan
(the "Plan") for the benefit of certain Employees (as defined in the Plan)
of the Company and its affiliates effective January 1, 1988. The Company
amended the Plan from time to time.
The Company's subsidiary, Midwest Carbide Corporation, adopted the
Keokuk Bargaining Unit 401(k) Plan (the "Keokuk Plan") effective January 1,
1988, for the benefit of certain of its Employees (as provided therein).
The Company provided for the merger of the Keokuk Plan with and into this
Plan effective as of January 1, 1997.
The Company hereby amends and completely restates the Plan
effective January 1, 1997, except as expressly stated to the contrary
herein, subject to the subsequent condition that the Internal Revenue
Service issues a determination that the Plan meets all applicable
requirements of section 401(a) of the Code (as defined in subsection 1(f)),
that employer contributions thereto remain deductible under section 404 of
the Code and that the trust fund maintained with respect thereto remains
tax exempt under section 501(a) of the Code. The Plan, as herein amended
and restated, shall apply only to an Employee who is credited with an Hour
of Service (as defined in subsection 1(o)) on or after January 1, 1997, and
to the Accrued Benefit of a former employee held in the Plan on January 1,
1997.
The Company executed the Plan as initially amended and restated
effective January 1, 1997 on January 27, 1997. The Company revised the
Plan as set forth herein to include subsequent amendments to the Plan and
reflect governmental interpretations of law applicable to the Plan.
ii
AIRGAS, INC. 401(k) PLAN
(Amended and Restated Effective January 1, 1997)
(Revised)
TABLE OF CONTENTS
Section Page
1 DEFINITIONS 1
(a) Accrued Benefit 1
(b) Administrator or Plan Administrator 1
(c) Annual Additions 1
(d) Board of Directors 1
(e) Break in Service 1
(f) Code 1
(g) Committee 2
(h) Company 2
(i) Compensation 2
(j) Employee 3
(k) Entry Date. 3
(l) ERISA 3
(m) Fiduciary 3
(n) Fund 3
(o) Hour of Service 3
(p) Investment Category 5
(q) Investment Manager 5
(r) Limitation Year 6
(s) Matching Account 6
(t) Member 6
(u) Normal Retirement Date 6
(v) Parent Company Stock. 6
(w) Participating Company 6
(x) Payroll Period 6
(y) Period of Service 6
(z) Period of Severance 7
(aa) Plan 7
(ab) Plan Year 7
(ac) Profit Sharing Account 7
(ad) Related Entity 7
(ae) Restatement Effective Date 8
(af) Rollover Account 8
(ag) Salary Reduction Account 8
(ah) Service 8
(ai) Severance Date 8
(aj) Supplemental Participating Company
Contribution 9
(ak) Trust Agreement 9
(al) Trustee 9
(am) Valuation Date 9
(an) Year of Service for Eligibility 9
iii
AIRGAS, INC. 401(k) PLAN
(Amended and Restated Effective January 1, 1997)
(Revised)
TABLE OF CONTENTS
Section Page
2 ADMINISTRATION OF THE PLAN 10
(a) ERISA Reporting and Disclosure
by Administrator 10
(b) Committee 10
(c) Multiple Capacities 10
(d) Committee Powers 10
(e) Allocation of Fiduciary Responsibility 11
(f) Claims 13
(g) Fiduciary Compensation 14
(h) Plan Expenses 14
(i) Fiduciary Insurance 14
(j) Indemnification 14
3 PARTICIPATION IN THE PLAN 15
(a) Initial Eligibility 15
(b) Measuring Service 16
(c) Termination and Requalification 17
(d) Special Rule for Rollovers 17
(e) Termination of Membership 17
4 MEMBER AND PARTICIPATING COMPANY CONTRIBUTIONS 18
(a) Salary Reduction Contributions 18
(b) Salary Reduction Contribution Limitations 18
(c) Salary Reduction Account 20
(d) Compliance with Salary Reduction
Contributions Discrimination Tests 20
(e) Participating Company Matching
Contributions 24
(f) Matching Account 24
(g) Compliance with Participating Company
Matching Contributions Discrimination
Tests 25
(h) Profit Sharing Contributions 28
(i) Profit Sharing Account 30
(j) Rollovers 30
(k) Voluntary Contributions 31
(l) Payroll Taxes 31
(m) Deductibility 31
(n) Supplemental Participating Company
Contributions 32
iv
AIRGAS, INC. 401(k) PLAN
(Amended and Restated Effective January 1, 1997)
(Revised)
TABLE OF CONTENTS
Section Page
5 MAXIMUM CONTRIBUTIONS AND BENEFITS 35
(a) Defined Contribution Limitation 35
(b) Combined Limitation 36
(c) Combined Limitation Computation 36
(d) Definition of "Compensation" for Code
Limitations 37
(e) Transition Provision 39
6 ADMINISTRATION OF FUNDS 40
(a) Investment Control 40
(b) Parent Company Stock 40
(c) Member Elections 40
(d) No Member Election 41
(e) Facilitation 41
(f) Valuations 41
(g) Allocation of Gain or Loss 41
(h) Bookkeeping 42
7 BENEFICIARIES AND DEATH BENEFITS 43
(a) Designation of Beneficiary 43
(b) Beneficiary Priority List 43
(c) Proof of Death 44
(d) Divorce 44
8 BENEFITS FOR MEMBERS 45
(a) Retirement Benefit 45
(b) Death Benefit 45
(c) Termination of Employment Benefit 45
(d) Vesting 45
9 DISTRIBUTION OF BENEFITS 46
(a) Commencement 46
(b) Benefit Forms 47
(c) Deferred Payments 48
(d) Withholding 48
(e) Compliance with Code Requirements 48
(f) Distribution Limitations 48
(g) Rollover Election 49
v
AIRGAS, INC. 401(k) PLAN
(Amended and Restated Effective January 1, 1997)
(Revised)
TABLE OF CONTENTS
Section Page
10 HARDSHIP AND IN-SERVICE DISTRIBUTIONS 51
(a) General Rule 51
(b) Need 51
(c) Satisfaction of Need 52
(d) Limitations 53
(e) Accounting 53
11 LOANS 54
(a) Availability 54
(b) Minimum Requirements 54
(c) Accounting 56
12 TITLE TO ASSETS 57
13 AMENDMENT AND TERMINATION 58
(a) Amendment 58
(b) Termination 58
(c) Conduct on Termination 58
14 LIMITATION OF RIGHTS 60
(a) Alienation 60
(b) Qualified Domestic Relations Order
Exception 60
(c) Employment 60
15 MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS 62
(a) General Rule 62
(b) Protected Benefits 62
(c) Vesting 62
(d) Special In-Service Hardship Distribution
Provisions 62
(e) Special In-Service Age 59-1/2
Distribution Provisions 63
(f) Special In-Service Age 55 Distribution
Provision 63
(g) Installment Settlement 63
(h) Limitations on In-Service Distributions 64
(i) Annuity Settlements 64
vi
AIRGAS, INC. 401(k) PLAN
(Amended and Restated Effective January 1, 1997)
(Revised)
TABLE OF CONTENTS
Section Page
16 PARTICIPATION BY RELATED ENTITIES 69
(a) Commencement 69
(b) Termination 69
(c) Single Plan 69
(d) Delegation of Authority 69
17 TOP-HEAVY REQUIREMENTS 70
(a) General Rule 70
(b) Calculation of Top-Heavy Status 70
(c) Definitions 70
(d) Combined Benefit Limitation 73
(e) Vesting 73
(f) Minimum Contribution 73
18 MISCELLANEOUS 75
(a) Incapacity 75
(b) Reversions 75
(c) Employee Data 76
(d) In Writing Requirement 76
(e) Doubt as to Right to Payment 76
(f) Inability to Locate Distributee 76
(g) Estoppel of Members and Their
Beneficiaries 77
(h) Law Governing 77
(i) Pronouns 77
(j) Interpretation 77
1
1. DEFINITIONS
(a) "Accrued Benefit" shall mean on any date
of determination the value of a Member's share of the Fund.
(b) "Administrator" or "Plan Administrator" shall mean the
entity, individual or group of individuals
designated pursuant to subsection 2(a) to discharge the statutory
responsibilities of a plan administrator under ERISA. As of the
Restatement Effective Date, the Company is the Plan Administrator acting
directly or through its subsidiary, Airgas Management, Inc.
(c) "Annual Additions" shall mean the sum for
any Limitation Year of (i) employer contributions, (ii) employee
contributions, (iii) forfeitures and (iv) amounts described in sections
415(l) and 419A(d) of the Code, which are (A) allocated to an account which
provides medical benefits under section 401(h) or 419(e) of the Code and
(B) treated as "Annual Additions" to the account of a Member under such
provisions of the Code. "Annual Additions" shall include excess
contributions as defined in section 401(k)(8)(B) of the Code, excess
aggregate contributions as defined in section 401(m)(6)(B) of the Code and
excess deferrals as described in section 402(g) of the Code, regardless of
whether such amounts are distributed or forfeited. "Annual Additions"
shall not include (i) rollover contributions (as defined in sections
402(c), 403(a)(4), 403(b)(8) and 408(d)(3) of the Code) or (ii) employee
contributions to a simplified employee pension plan which are excludable
from gross income under section 408(k)(6) of the Code.
(d) "Board of Directors" shall mean the
Board of Directors of the Company or any committee or delegee thereof
designated in accordance with subsection 2(e)(ii).
(e) "Break in Service" shall mean for any
Employee any Plan Year in which he is not credited with more than 500 Hours
of Service.
(f) "Code" shall mean the Internal Revenue Code of 1986,
as amended, and the same as may be further amended from time to time.
2
(g) "Committee" shall mean the individual or group
of individuals designated pursuant to subsection 2(b) to control and manage
the operation and administration of the Plan to the extent set forth
herein.
(h) "Company" shall mean Airgas, Inc.
(i) "Compensation" shall mean the total taxable
income, other than items excluded in he next sentence, paid to an Employee
for services by a Participating Company during a Plan Year, plus
amounts which an Employee elects to have withheld from his remuneration for
services under this Plan or a plan which meets the requirements of section
125 of the Code. "Compensation" shall not include (i) bonuses, (ii) income
from exercise of stock options, receipt or vesting of restricted stock
grants, exercise of stock appreciation rights or similar equity-based
compensation arrangements, (iii) deferred compensation, (iv) severance pay,
(v) accrued vacation pay paid in one lump sum after termination of
employment, (vi) tuition reimbursements, (vii) car allowances, (viii)
moving expenses, (ix) expense reimbursements, (x) employer contributions to
the Plan, (xi) the value of welfare benefits or perquisites, or (xii)
similar items (whether or not includible in gross income). Notwithstanding
the foregoing, "Compensation" for an Employee covered by the collective
bargaining agreement between Midwest Carbide Corporation and the Oil,
Chemical and Atomic Workers International Union, Keokuk Local No. 6-249,
shall mean the Employee's basic hourly rate of pay for a Pay Period
multiplied by the Hours of Service for which he was paid for such Pay
Period. "Compensation" with respect to any Member for any Plan Year shall
be limited to $150,000 (or an increased amount permitted in accordance with
a cost of living adjustment under section 415(d) of the Code).
3
(j) "Employee" shall mean each and every person
employed by a Participating Company or a Related Entity. The term
"Employee" shall also include a person who is a "leased employee" (within
the meaning of section 414(n)(2) of the Code) with respect to a
Participating Company or a Related Entity except that no person who is a
"leased employee" shall be eligible to participate in this Plan or be
deemed an "Employee" for purposes of eligibility to participate.
(k) "Entry Date" shall mean the first day of each
calendar month of each Plan Year.
(l) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the same as may be further amended
from time to time.
(m) "Fiduciary" shall mean a person who, with
respect to the Plan, (i) exercises any discretionary authority or
discretionary control respecting management of the Plan or exercises any
authority or control with respect to management or disposition of the
Plan's assets, (ii) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any monies or other
property of the Plan, or has any authority or responsibility to do so, or
(iii) has any discretionary authority or discretionary responsibility in
the administration of the Plan.
(n) "Fund" shall mean the assets of the Plan. All
Investment Categories shall be part of the Fund.
(o) "Hour of Service"
(i) General Rule. "Hour of Service" shall mean each
hour (A) for which an Employee is directly or indirectly paid, or entitled
to payment, by a Participating Company or a Related Entity for the
performance of duties or (B) for which back pay, irrespective of mitigation
of damages, has been either awarded or agreed to by a Participating Company
or a Related Entity. These hours shall be credited to the Employee for the
period or
4
periods in which the duties were performed or to which the award
or agreement pertains irrespective of when payment is made. The same hours
shall not be credited under both (A) and (B) above.
(ii) Paid Absences. An Employee shall also be credited
with one "Hour of Service" for each hour for which the Employee is directly
or indirectly paid, or entitled to payment, by a Participating Company or a
Related Entity for reasons other than the performance of duties or absence
due to vacation, holiday, illness, incapacity, disability, layoff, jury
duty or authorized leave of absence for a period not exceeding one year for
any reason in accordance with a uniform policy established by the
Committee; provided, however, not more than 501 "Hours of Service" shall be
credited to an Employee under this subsection 1(o)(ii) on account of any
single, continuous period during which the Employee performs no duties and
provided, further, that no credit shall be given if payment (A) is made or
due under a plan maintained solely for the purpose of complying with
applicable worker's compensation, unemployment compensation or disability
insurance laws or (B) is made solely to reimburse an Employee for medical
or medically related expenses incurred by the Employee.
(iii)Military. An Employee shall also be credited with
one "Hour of Service" for each hour during which the Employee is absent on
active duty in the military service of the United States under leave of
absence granted by a Participating Company or a Related Entity or when
required with respect to qualified military service by the Uniform Services
Employment and Reemployment Rights Act of 1994 and section 414(u) of the
Code, provided he returns to employment with a Participating Company or a
Related Entity within 90 days after his release from active duty or within
such longer period during which his right to reemployment is protected by
law.
(iv)Equivalencies. If, for Plan purposes, an
Employee's records are kept on other than an hourly basis as described
above, the Committee, according to uniform
5
rules applicable to a class of Employees or Members, may apply the following
equivalencies for purposes of crediting "Hours of Service":
Basis Upon Which Records Credit Granted to Individual if Individual Earns
are Maintained One or More Hours of Service During Period
Shift Actual hours for full shift
Day 10 Hours of Service
Week 45 Hours of Service
Semi-Monthly Payroll Period 95 Hours of Service
Months of Employment 190 Hours of Service
(v) Miscellaneous. For purposes of this subsection
1(o), the regulations issued by the Secretary of Labor at 29 CFR 2530.200b-
2(b) and (c) are incorporated by reference. Nothing herein shall be
construed as denying an Employee credit for an "Hour of Service" if credit
is required by separate federal law.
(p) "Investment Category" shall mean any
separate investment fund which is made available under the terms of the
Plan.
(q) "Investment Manager" shall mean any
Fiduciary (other than a Trustee) who:
(i) has the power to manage, acquire, or dispose of any
asset of the Plan;
(ii) is:
(A)registered as an investment advisor under the
Investment Advisers Act of 1940;
(B)a bank, as defined in that Act; or
(C)an insurance company qualified to perform
services described in subsection 1(q)(i) above under the laws of more than one
state; and
(iii)has acknowledged in writing that he is a Fiduciary with
6
respect to the Plan.
(r) "Limitation Year" shall mean the
consecutive twelve-month period commencing on January 1st and ending on
December 31st.
(s) "Matching Account" shall mean the portion
of the Member's Accrued Benefit derived from Participating Company
contributions under subsection 4(e) hereof and the corresponding provisions
of the Plan as heretofore effective, adjusted as provided in subsection
4(f).
(t) "Member" shall mean each and every Employee of a
Participating Company who satisfies the requirements for participation
under Section 3 hereof and each other person who has an Accrued Benefit
held under the Plan.
(u) "Normal Retirement Date" shall mean
the date on which a Member attains age 65.
(v) "Parent Company Stock" shall mean
Airgas, Inc. common stock.
(w) "Participating Company" shall mean
each Related Entity with respect to the Company which adopts this Plan
pursuant to Section 16. The term shall also include the Company, unless
the context otherwise requires.
(x) "Payroll Period" shall mean a weekly, bi-weekly, semi-
monthly or monthly pay period or such other standard pay period of a
Participating Company applicable to the class of Employees of which an
individual is a part.
(y) "Period of Service" shall mean the
period of time commencing on the date on which an Employee first is
credited with an Hour of Service or, if applicable, on the date following a
Period of Severance of one year or more on which an Employee first is
credited with an Hour of Service provided he requalifies for participation
under subsection 3(c), and ending on the next following Severance Date.
A Period of Severance of less than one year shall be included in a Period of
Service for all purposes.
7
(z) "Period of Severance" shall mean the
period of time commencing on an Employee's Severance Date and ending on the
date on which the Employee first again is credited with an Hour of Service,
exclusive of periods during which an Employee is on an unpaid leave
pursuant to the Family and Medical Leave Act of 1993.
(aa) "Plan" shall mean the Airgas, Inc. 401(k) Plan as
amended and restated as set forth herein effective January 1, 1997, and the
same as may be amended from time to time.
(ab) "Plan Year" shall mean the consecutive twelve-
month period commencing on January 1st and ending on December 31st.
(ac) "Profit Sharing Account" shall mean the portion of the
Member's Accrued Benefit derived from contributions made under subsection
4(h) hereof and the corresponding provisions of the Plan as heretofore
effective, adjusted as provided in subsection 4(i).
(ad) "Related Entity" shall mean (i) all
corporations which are members with a Participating Company in a controlled
group of corporations within the meaning of section 1563(a) of the Code,
determined without regard to sections 1563(a)(4) and (e)(3)(C) of the Code,
(ii) all trades or businesses (whether or not incorporated) which are under
common control with a Participating Company as determined by
regulations promulgated under section 414(c) of the Code, (iii) all trades
or businesses which are members of an affiliated service group with a
Participating Company within the meaning of section 414(m) of the Code and
(iv) any entity required to be aggregated with a Participating Company
under regulations prescribed under section 414(o) of the Code (to the
extent provided in such regulations); provided, however, for purposes of
Section 5, the definition shall be modified to substitute the phrase "more
than 50%" for the phrase "at least 80%" each place it appears in section
1563(a)(1) of the Code. Furthermore, for purposes of crediting Hours of
Service for eligibility to participate, employment
8
as a "leased employee," within the meaning of section 414(n) of the Code,
of a Participating Company or a Related Entity shall be treated as employment
for a Participating Company or a Related Entity. For purposes of subsections
3(a) and 3(b) governing Hours of Service for purposes of eligibility to
participate, an entity the stock or assets of which a Participating Company
acquires shall be deemed a "Related Entity" for periods prior to such
acquisition for persons who become Employees incident to such acquisition.
In any other case, an entity is a "Related Entity" only during those
periods in which it is included in a category described in this subsection.
(ae) "Restatement Effective Date"
shall mean January 1, 1997
(af) "Rollover Account" shall mean the portion
of the Member's Accrued Benefit derived from contributions made under
subsection 4(j)(i) hereof and the corresponding provisions of the Plan as
heretofore effective, adjusted as provided in subsection 4(j)(ii).
(ag) "Salary Reduction Account" shall
mean the portion of the Member's Accrued Benefit derived from contributions
made under subsection 4(a) hereof and the corresponding provisions of the
Plan as heretofore effective, adjusted as provided in subsection 4(c).
(ah) "Service" shall mean the sum of an Employee's
Periods of Service.
(ai) "Severance Date" shall mean the earliest of
the date an Employee quits, is discharged (or severed, if later), retires,
dies or otherwise has an absence which causes him to cease to be an
Employee. An Employee who terminates employment to enter the military
service of the United States shall not suffer a "Severance Date" as of such
date or any future date unless and until permitted by section 414(u) of the
Code and shall receive credit for Hours of
Service and Service for his entire period of absence. However, if the
Employee does not return to employment with a Participating Company or
Related Entity within the time prescribed by law, then the date he
terminated employment shall be his Severance Date.
9
(aj) "Supplemental Participating Company Contribution" means an
amount contributed by the Participating Companies to the Fund pursuant to
Section 4 of the Plan.
(ak) "Trust Agreement" shall mean the agreement
or agreements between the Company and a Trustee under which all or a
portion of the Fund is held.
(al) "Trustee" shall mean such person, persons or corporate
fiduciary designated pursuant to subsection 6(a) to manage and control all
or a portion of the Fund pursuant to the terms of the Plan and a Trust
Agreement.
(am) "Valuation Date" shall mean any business
day the New York Stock Exchange is open for trading and such other dates as
the Committee may specify from time to time. With respect to a Member's
Accrued Benefit, the business day of initial investment of new
contributions or liquidation of a Member's investment credited to an
Investment Category for reinvestment or distribution shall be the
"Valuation Date" for purposes of determining the amount of investment,
reinvestment or distribution.
(an) "Year of Service for
Eligibility" shall mean a consecutive twelve-month measuring period
specified in the Plan in which an Employee is credited with 1,000 Hours of
Service or more.
10
2. ADMINISTRATION OF THE PLAN
(a) ERISA Reporting and Disclosure by Administrator. The
Company, through its Board of Directors, may designate a Plan Administrator.
If no individual or group of individuals is designated or serving, the Company
shall be the Administrator. The Administrator shall file all reports and
distribute to Members and beneficiaries reports and other information required
under ERISA or the Code and perform such duties as are assigned to the
Administrator by the Plan or delegated to the Administrator by the
Committee.
(b) Committee. The Company, through its Board of
Directors, shall designate a Committee which shall have the authority to
control and manage the operation and administration of the Plan. If the
Committee consists of more than two members, it shall act by majority vote.
The Committee may (i) delegate all or a portion of the responsibilities of
controlling and managing the operation and administration of the Plan to
one or more persons, including the Administrator, and (ii) appoint agents,
investment advisers, counsel, physicians or other representatives to render
advice with regard to any of its responsibilities under the Plan. The
Board of Directors may remove, with or without cause, the Committee or any
Committee member. The Committee may remove, with or without cause, any
delegate or adviser designated by it.
(c) Multiple Capacities. Any person may
serve in more than one fiduciary capacity.
(d) Committee Powers. The responsibility to
control and manage the operation and administration of the Plan shall
include, but shall not be limited to, the performance of the following
acts:
(i) the filing of all reports required of the Plan,
other than those which are the responsibility of the Administrator;
(ii)the distribution to Members and beneficiaries of
all reports
11
and other information required of the Plan, other than reports
and information required to be distributed by the Administrator;
(iii)the keeping of complete records of the
administration of the Plan;
(iv) the promulgation of rules and regulations for
administration of the Plan and establishment of a procedure to determine
the qualified status of a domestic relations order; and
(v) the interpretation of the Plan, including the
determination of any questions of fact arising under the Plan and the
making of all decisions required by the Plan.
The Committee's interpretation of the Plan and any actions and decisions
taken in good faith by the Committee based on its interpretation shall be
final and conclusive. The Committee may correct any defect, or supply any
omission, or reconcile any inconsistency in the Plan in such manner and to
such extent as shall be expedient to carry the Plan into effect and shall
be the sole judge of such expediency.
(e) Allocation of Fiduciary Responsibility. The Board of
Directors, the Administrator, the Committee, each Trustee and each Investment
Manager (if any) possess certain specified powers, duties, responsibilities
and obligations under the Plan's governing instruments. It is intended under
this Plan that each Fiduciary be responsible solely for the proper exercise of
its own functions and that each not be responsible for any act or failure to
act of another, unless otherwise responsible as a breach of its fiduciary duty
or for breach of duty by another Fiduciary under ERISA's rules of co-fiduciary
responsibility. In general:
12
(i) the Board of Directors is responsible for
appointing and removing the Administrator, the Committee, each Trustee and
each Investment Manager (if any); for amending or terminating the Plan,
each Trust Agreement, and each asset management agreement (if any); and
transferring the responsibility for any function from or to a particular
Fiduciary;
(ii) the Board of Directors may delegate any power or
duty it has under the Plan or a Trust Agreement, including, but not limited
to, amending the Plan or a Trust Agreement, to a committee of the Board of
Directors, to any officer or Employee of the Company or a Related Entity or
to any other person or entity, in which case such delegee and not the Board
of Directors, shall be responsible for exercise of the delegated functions;
(iii)the Committee is the Named Fiduciary (within the
meaning of ERISA) for the Plan and is responsible for administering the
Plan, for exercising the powers granted to it under subsections 2(b) and
2(d) and for providing a procedure for carrying out a funding policy and
method consistent with the objectives of the Plan and the requirements of
Title I of ERISA including, but not limited to, selecting or establishing
Investment Categories for the Plan as provided for in Section 6, unless the
Board of Directors establishes a funding policy or delegates the
responsibility to establish a funding policy to another Fiduciary;
(iv) the Administrator is responsible for discharging
the statutory duties of a plan administrator under ERISA and the Code and
such duties that the Committee delegates to the Administrator or the Plan
specifically assigns to the Administrator; and
(v) each Trustee and each Investment Manager (if any)
is responsible for the management and control of the portion of the Fund
over which it has
13
control to the extent provided in its Trust Agreement or asset management
agreement, respectively.
(f) Claims. If, pursuant to the rules, regulations or
other interpretations of the Plan, the Committee denies the claim of a
Member or beneficiary for benefits under the Plan, the Committee shall
provide written notice, within 90 days after receipt of the claim, setting
forth in a manner calculated to be understood by the claimant:
(i) the specific reasons for such denial;
(ii) the specific reference to the Plan provisions on
which the denial is based;
(iii)a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is needed; and
(iv) an explanation of the Plan's claim review procedure
and the time limitations of this subsection applicable thereto.
A Member or beneficiary whose claim for benefits has been denied may
request review by the Committee of the denied claim by notifying the
Committee in writing within 60 days after receipt of the notification of
claim denial. As part of said review procedure, the claimant or his
authorized representative may review pertinent documents and submit issues
and comments to the Committee in writing. The Committee shall render its
decision to the claimant in a manner calculated to be understood by the
claimant not later than 60 days after receipt of the request for review,
unless special circumstances require an extension of time, in which case
decision shall be rendered as soon after the sixty-day period as possible,
but not later than 120 days after receipt of the request for review. The
decision on review shall state the specific reasons therefor and the
specific Plan references on which it is based.
14
(g) Fiduciary Compensation. The
Committee or a Committee member, delegate, or adviser who already receives
full-time pay from a Participating Company or a Related Entity shall serve
without compensation from the Plan for his services as such, but he shall
be reimbursed pursuant to subsection 2(h) for any reasonable expenses
incurred by him in the administration of the Plan. The Committee or a
Committee member, delegate, or adviser who is not already receiving full-
time pay from a Participating Company may be paid such reasonable
compensation as shall be agreed upon.
(h) Plan Expenses. All expenses of
administration of the Plan shall be paid out of the Fund unless paid by the
Company or a Member. According to uniform rules, the Committee may charge
expenses to a particular Investment Category, a particular Member's Accrued
Benefit or a particular Member if the Committee determines that such
allocation of expense or charge is desirable for the equitable
administration of the Plan.
(i) Fiduciary Insurance. If the Committee
so directs, the Plan shall purchase insurance to cover the Plan from
liability or loss occurring by reason of the act or omission of a Fiduciary
provided such insurance permits recourse by the insurer against the
Fiduciary in the case of a breach of a fiduciary obligation by such
Fiduciary.
(j) Indemnification. The Company shall
indemnify and hold harmless to the maximum extent permitted by its by-laws
each Fiduciary who is an Employee or who is an officer or director of a
Participating Company or any Related Entity from any claim, damage, loss or
expense, including litigation expenses and attorneys' fees, resulting from
such person's service as a Fiduciary of the Plan provided the claim,
damage, loss or expense does not result from the Fiduciary's gross
negligence or intentional misconduct.
15
3. PARTICIPATION IN THE PLAN
(a) Initial Eligibility
(i) Salary Reduction Contributions. Each and every Employee
of a Participating Company who is not excluded under subsection 3(a)(iv) shall
be eligible to make contributions under subsection 4(a) as of the first
Entry Date after the date the Employee first is credited with an Hour of
Service.
(ii) Matching Contributions. Each and every Employee
of a Participating Company not excluded under subsection 3(a)(iv) shall be
eligible and shall qualify to be allocated matching contributions for
Payroll Periods commencing after the date such Employee is credited with
one Year of Service for Eligibility.
(iii) Profit Sharing Contributions. Each and every
Employee of a Participating Company not excluded under subsection 3(a)(iv)
shall be eligible to be allocated profit sharing contributions, if any,
made by the Participating Company which employs him for a Plan Year ending
after the date such Employee is credited with one Year of Service for
Eligibility.
(iv) Excluded Employees. Notwithstanding the foregoing
provisions of this subsection,
(A)no Employee whose terms and conditions of
employment are determined by a collective bargaining agreement between
employee representatives and a Participating Company shall be eligible to
participate unless such collective bargaining agreement provides to the
contrary, in which case such Employee shall be eligible to participate only
to the extent provided in such agreement upon compliance with such
provisions for eligibility and participation as such agreement shall
provide; except that no Employee who has selected, or in the future
selects, a union shall become ineligible
16
during the period between his selection of the union and the execution of
the first collective bargaining agreement which covers him;
(B)no Employee who is a summer student, co-
operative student or student intern hired on an "as needed" or temporary
basis shall be eligible to participate;
(C)no Employee who is hired as a temporary or
occasional Employee or in a temporary position shall be eligible to
participate;
(D) no Employee who is a non-resident alien and who
receives no earned income (within the meaning of section 911(d)(2) of the
Code) from a Participating Company which constitutes income from sources
within the United States (within the meaning of section 861(a)(3) of the
Code) shall be eligible to participate;
(E)no person who is an Employee by reason of the
second sentence of subsection 1(j) shall be eligible to participate; and
(F)no person a Participating Company determines is
not its Employee for purposes of federal income tax withholding shall be
eligible to participate, regardless of whether an administrative agency or
court rules that such person is a Participating Company's employee for any
purpose.
(b) Measuring Service. For purposes of
measuring service to satisfy the eligibility provisions of subsections
3(a)(ii) and (iii), the Year of Service for Eligibility computation period
shall begin with the date on which the Employee first is credited with an
Hour of Service; provided, however, if an Employee is credited with less
than 1,000 Hours of Service in such measuring period, then subsequent
measuring periods shall begin with the January 1st next following the
Employee's date of hire and continue on a Plan Year basis thereafter.
17
(c) Termination and Requalification. An Employee who has
satisfied an applicable service requirement of subsection 3(a) and who
subsequently becomes ineligible for any reason shall requalify for
participation on the date on which he is next credited with an Hour of
Service in an eligible job classification under subsection 3(a); provided,
however, if the Employee has a Break in Service with respect to a Plan
Year, he shall not be eligible under subsection 3(a)(ii) or (iii) for
matching contributions or profit sharing contributions until he again
satisfies the service requirement applicable thereto.
(d) Special Rule for Rollovers. An
Employee of a Participating Company who will be eligible to participate in
the Plan after satisfying the service requirement of subsection 3(a)(i) may
make a contribution to the Plan under subsection 4(i) on or after the date
he first is credited with an Hour of Service. An Employee who makes a
contribution under subsection 4(i) shall become a Member on the date of his
contribution; however, such individual shall not be considered to be a
Member for purposes of the remainder of Section 4 until he satisfies the
applicable service requirements of subsection 3(a).
(e) Termination of Membership. An
Employee who becomes a Member shall remain a Member as long as he has an
Accrued Benefit held under the Plan.
18
4. MEMBER AND PARTICIPATING COMPANY CONTRIBUTIONS
(a) Salary Reduction Contributions. Each Employee who
becomes eligible to participate under subsection 3(a)(i) may contribute
any even multiple of 1.0% of his Compensation, but not more than 15% (or
such other percentage as may be applicable to a class of Members covered by
a specific collective bargaining agreement) of his Compensation, for a Payroll
Period, as he shall elect in a manner prescribed by the Committee. The
initial election to contribute may be effective as of the first day of any
calendar month. Such contribution shall be accomplished through direct
reduction of Compensation in each Payroll Period that the election is in
effect. For purposes of the Code, such contribution shall be deemed to be
made by the Member's employer. A Member may elect to increase, reduce or
terminate his contributions from time to time. All such elections shall be
made in a manner and shall become effective on the date prescribed therefor
by the Committee. Contributions made by Participating Companies under this
subsection shall be made at such times as the Company determines and shall
be allocated to the Salary Reduction Accounts of the Members from whose
Compensation the contributions were withheld in an amount equal to the
amount withheld.
(b) Salary Reduction Contribution Limitations. Contributions
under subsection 4(a) shall be limited as provided below:
(i) Exclusion Limit. The maximum amount of
contribution which any Member may make in any calendar year under
subsection 4(a) is $9,500 (or such increased annual amount resulting from a
cost of living adjustment pursuant to sections 402(g)(5) and 415(d)(1) of
the Code), reduced by the amount of elective deferrals by such Member under
all other plans, contracts or arrangements of any Participating Company or
Related Entity. If the contribution under subsection 4(a) for a Member for
any calendar year exceeds $9,500 (or such increased annual amount resulting
from an adjustment described above), the Committee shall direct the Trustee
to distribute the excess amount (plus any income
19
and minus any loss allocable to such amount) to the
Member not later than the April 15th following the close of such calendar
year. If (A) a Member participates in another plan which includes a
qualified cash or deferred arrangement, (B) such Member contributes in the
aggregate more than the exclusion limit under this Plan and the
corresponding provisions of the other plan and (C) the Member notifies the
Committee not later than the March 1st following the close of such calendar
year of the portion of the excess the Member has allocated to this Plan,
then the Committee may direct the Trustee to distribute to the Member not
later than April 15th following the close of such calendar year the excess
amount (plus any income and minus any loss allocable to such amount) which
the Member allocated to this Plan. A Member shall be deemed to have given
the notification described in (C) above if the excess results from
contributions solely to this Plan or plans sponsored by Related Entities.
(ii) Discrimination Test Limits. The Committee may
limit the maximum amount of contribution for Members who are "highly
compensated employees" (as defined below) to the extent it determines that
such limitation is necessary to keep the Plan in compliance with section
401(a)(4) or section 401(k)(3) of the Code. Any limitation shall be
effective for all Payroll Periods following the announcement of the
limitation. For purposes of Section 4 of the Plan, the term "highly
compensated employee" for a Plan Year shall mean an Employee who is
described in either or both of the following groups:
(A)an Employee who was a 5% owner, as defined in
section 416(i)(1) of the Code, at any time during the current Plan Year or
last preceding Plan Year; or
(B)an Employee who receives "compensation" (as
defined below) in excess of $80,000 (or an increased amount resulting from
a cost of living
20
adjustment) during the preceding Plan Year and was in the "top-paid group"
(as defined below) for the preceding Plan Year.
For purposes hereof, the following rules and definitions
shall apply:
(C)The "top-paid" group consists of the top 20% of
Employees ranked on the basis of "compensation" received during the year.
For purposes of determining the number of Employees in the "top-paid"
group, Employees described in section 414(q)(5) of the Code and Q & A 9(b)
of section 1.414(q)-1T of the regulations thereunder are excluded.
(D)"Compensation" is compensation within the
meaning of section 415(c)(3) of the Code and for the 1997 Plan Year also
includes elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity under sections 125,
402(e)(3), 402(h)(3) and 403(b) of the Code.
(E)Employers aggregated under section 414(b), (c),
(m), or (o) of the Code are treated as a single employer.
(c) Salary Reduction Account. Each
Member's salary reduction contributions, as adjusted for investment gain or
loss and income or expense, constitute such Member's Salary Reduction
Account. A Member shall at all times have a nonforfeitable interest in the
portion of his Accrued Benefit derived from his Salary Reduction Account.
(d) Compliance with Salary Reduction Contributions
Discrimination Tests
(i) Rule. In no event shall the "average deferral
percentage" (as defined below) for Members who are "highly compensated
employees" in a testing group for any Plan Year bear a relationship to the
"average deferral percentage" for Members who are not "highly compensated
employees" in such testing group which does not satisfy either subsection
4(d)(i)(A) or (B) below. The test shall be separately performed for each
testing group. Each
21
group of Members who participate in the Plan pursuant
to a collective bargaining agreement shall be a separate testing group and
all other Members shall be a separate testing group.
(A)The requirement shall be satisfied for a Plan
Year if the "average deferral percentage" for the Plan Year for the group
of Members who are "highly compensated employees" for the Plan Year is not
more than the "average deferral percentage" for the preceding Plan Year of
all Members who are not "highly compensated employees" for the preceding
Plan Year multiplied by 1.25.
(B)The requirement shall be satisfied for a Plan
Year if (1) the excess of the "average deferral percentage" for the Plan
Year for the Members who are "highly compensated employees" for the Plan
Year over the "average deferral percentage" for the preceding Plan Year of
all Members who are not "highly compensated employees" for the preceding
Plan Year is not more than two percentage points (or such lower amount as
may be required by applicable regulations under the Code) and (2) the
"average deferral percentage" for the Plan Year for Members who are "highly
compensated employees" for the Plan Year is not more than the "average
deferral percentage" for the preceding Plan Year of all Members who are not
"highly compensated employees" for the preceding Plan Year multiplied by
two (or such lower multiple as may be required by applicable regulations
under the Code).
(C) The Plan may test using the "average deferral
percentage" for non-highly compensated employees for the current Plan Year
rather than the preceding Plan Year if the Administrator so elects. The
Administrator may only revoke such an election in accordance with rules
promulgated by the Secretary of the Treasury. For the 1997 Plan Year, the
Administrator elected to use the percentage for the current (1997) Plan
Year rather than the percentage for the preceding Plan Year. For the 1998
Plan Year, the Administrator elected to use the percentage for the
preceding Plan Year.
(ii)Qualified Nonelective Contributions or Refunds.
22
If the relationship of the "average deferral percentages" does not satisfy
subsection 4(d)(i) for any Plan Year, the Participating Companies may make
"qualified nonelective contributions" (within the meaning of the
regulations promulgated under section 401(k) of the Code) in an equal
dollar amount for all or a class of eligible "nonhighly compensated
employees". Such contributions shall be treated for all purposes of the
Plan as contributions made by a Member under subsection 4(a) for the Plan
Year for which they are made and shall be a part of the Member's Salary
Reduction Account, except that such contributions may not be distributed
under subsection 10(d)(ii). If the Participating Companies do not make
such contributions or such contributions do not result in satisfaction of
subsection 4(d)(i), then the Committee shall direct the Trustee to
distribute the "excess contribution" (as defined below) for such Plan Year
(plus any income and minus any loss allocable thereto for the Plan Year in
which the contributions were made as determined under the Plan's method for
allocating income and loss) within twelve months after the close of the
Plan Year to the "highly compensated employees" on the basis of the amount
of contributions attributable to each until the "excess contribution" is
eliminated. The portion of the "excess contribution" attributable to a
"highly compensated employee" is determined by reducing the dollar amount
of contributions paid over to the Fund on behalf of "highly compensated
employees", starting with the highest dollar amount of such contributions,
until the "excess contribution" is eliminated. The amount of "excess
contributions" to be distributed shall be reduced by excess deferrals
previously distributed for the taxable year ending in the same Plan Year
and excess deferrals to be distributed for a taxable year shall be reduced
by excess contributions previously distributed for the Plan Year beginning
in such taxable year. Any refund made to a Member in accordance with this
subsection shall be withdrawn from his Salary Reduction Account.
(iii)Additional Definitions. For purposes of this
subsection 4(d), the term "Member" shall mean each Employee eligible to
make contributions under subsection
23
4(a) at any time during a Plan Year.
The "average deferral percentage" for a specific group of Members for a
Plan Year shall be the average of the "actual deferral percentage" for each
Member in the group for such Plan Year. The "actual deferral percentage"
for a particular Member for a Plan Year shall be the ratio of the amount of
contributions made under subsection 4(a) no later than twelve months after
the close of the relevant Plan Year for such Member out of amounts that
would have been received by him in the Plan Year but for his election under
subsection 4(a) and which are allocated to the Member on or before the last
day of the Plan Year without regard to participation or performance of
services thereafter to the Member's "compensation" for such Plan Year. For
this purpose, "compensation" means compensation for service performed for a
Participating Company which is currently includable in gross income or
which is excludable from gross income pursuant to an election under a
qualified cash or deferred arrangement under section 401(k) of the Code or
a cafeteria plan under section 125 of the Code; provided, however, the
Company may elect to limit compensation for all Members to amounts paid
during the portion of the Plan Year during which the Member was eligible to
participate in the Plan or use any definition of compensation permissible
under section 414(s) of the Code and the regulations thereunder. The
"excess contribution" for any Plan Year is the excess of the aggregate
amount of contributions paid over to the Fund pursuant to subsection 4(a)
on behalf of "highly compensated employees" for such Plan Year over the
maximum amount of such contributions permitted for "highly compensated
employees" under subsection 4(d)(i).
(iv) Aggregation of Contributions. The "actual deferral
percentage" for any Member who is a "highly compensated employee" for the
Plan Year and who is eligible to make elective contributions excludable
from income under sections 401(k) and 402(a)(8) of the Code to any plan
maintained by a Participating Company or a Related Entity shall be
determined as if all such contributions were made under this Plan.
(v) Aggregation of Plans. In the event that this Plan
satisfies the
24
requirements of section 401(a)(4) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of section 401(a)(4) or 410(b) of the Code only if
aggregated with this Plan, then subsection 4(d)(i) shall be applied by
determining the "actual deferral percentages" of Members as if all such
plans were a single plan.
(vi) Testing Alternatives. To the extent permitted by the
Code, the Plan may treat contributions made under subsection 4(a) as
contributions made under subsection 4(e), and vice versa, to facilitate
satisfaction of any applicable nondiscrimination requirement.
(e) Participating Company Matching Contributions
(i) Amount. Each Participating Company shall contribute
with respect to each Member employed by it who is eligible under subsection
3(a)(ii) with respect to a Plan Year an amount set by the Board of Directors and
communicated to Members prior to the first day of such Plan Year. Pending such
action, the amount shall be equal to the lesser of (A) 50% of the Member's
salary reduction contribution for each Payroll Period commencing after he has
completed a Year of Service for Eligibility or (B) 2% of the Member's
Compensation for such Payroll Period. No Member covered by a collective
bargaining agreement shall be eligible for a contribution under this subsection
unless the collective bargaining agreement covering him so provides, in which
case the rate and amount of matching contributions shall be as provided in the
collective bargaining agreement.
(ii) Payment Date. The Participating Companies shall
pay over to the Fund all contributions required under this subsection no
later than the due date, including extensions, for filing the Participating
Companies' federal income tax returns for the taxable year ended coincident
with or immediately following the end of the Plan Year with respect to
which such contributions are to be made.
(f) Matching Account. The Participating
Company contributions allocated to a Member under subsection 4(e) and the
corresponding provisions of the Plan as heretofore effective, all as
adjusted for the investment gain or loss and income or expense, constitute
25
the Member's Matching Account. A Member shall at all times have a
nonforfeitable interest in the portion of his Accrued Benefit derived from
his Matching Account.
(g) Compliance with Participating Company
Matching Contributions Discrimination Tests
(i) Rule. In no event shall the "average contribution
percentage" (as defined below) for Members who are "highly compensated
employees" for any Plan Year bear a relationship to the "average
contribution percentage" for Members who are not "highly compensated
employees" which does not satisfy either subsection 4(g)(i)(A) or (B)
below. The requirement of this subsection shall not apply to Members who
participate in this Plan pursuant to a collective bargaining agreement, and
any such Members shall be excluded from the testing group.
(A)The requirement shall be satisfied for a Plan
Year if the "average contribution percentage" for the Plan Year for the
group of Members who are "highly compensated employees" for the Plan Year
is not more than the "average actual contribution percentage" for the
preceding Plan Year of all Members who are not "highly compensated
employees" for the preceding Plan Year multiplied by 1.25.
(B)The requirement shall be satisfied for a Plan
Year if (1) the excess of the "average contribution percentage" for the
Plan Year for the Members who are "highly compensated employees" for the
Plan Year over the "average contribution percentage" of all Members who are
not "highly compensated employees" for the preceding Plan Year is not more
than two percentage points (or such lower amount as may be required by
applicable regulations under the Code) and (2) the "average contribution
percentage" for the Plan Year for Members who are "highly compensated
employees" for the Plan Year is not more than the "average contribution
percentage" for the preceding Plan Year of all Members who are not
26
"highly compensated employees" for the preceding Plan Year multiplied by
two (or such lower multiple as may be required by applicable regulations
under the Code).
(C)The Plan may test using the average
contribution percentage for nonhighly compensated employees for the current
Plan Year rather than the preceding Plan Year if the Administrator so
elects. The Administrator may only revoke such an election in accordance
with rules promulgated by the Secretary of the Treasury. For the 1997 Plan
Year, the Administrator elected to use the percentage for the current
(1997) Plan Year rather than the percentage for the preceding Plan Year.
For the 1998 Plan Year, the Administrator elected to use the percentage for
the preceding Plan Year.
(ii) Refund. If the relationship of the "average
contribution percentages" does not satisfy subsection 4(g)(i) for any Plan
Year, then the Committee shall direct the Trustee to distribute the "excess
aggregate contribution" (as defined below) for such Plan Year (plus any
income and minus any loss allocable thereto for the Plan Year in which the
contributions were made as determined under the Plan's method for
allocating income and loss) within twelve months after the close of the
Plan Year to the "highly compensated employees" on the basis of the amount
of contributions attributable to each until the "excess aggregate
contribution" is eliminated. The portion of the "excess aggregate
contribution" attributable to a "highly compensated employee" is determined
by reducing the dollar amount of contributions paid over to the Fund on
behalf of the "highly compensated employees", starting with the highest
dollar amount of such contributions, until the "excess aggregate
contribution" is eliminated. Any refund made to a Member in accordance
with this subsection shall be drawn from his Matching Account.
(iii)Additional Definitions. For purposes of this
subsection 4(g), the term "Member" shall mean each Employee not covered by
a collective bargaining agreement eligible to receive a matching
contribution under subsection 4(e) at any time during a Plan Year.
27
The "average contribution percentage" for a specific group of Members for a
Plan Year shall be the average of the "actual contribution percentage" for
each Member in the group for such Plan Year. The "actual contribution
percentage" for a particular Member for a Plan Year shall be the ratio of
the sum of (A) the amount of contributions made under subsection 4(e) no
later than twelve months after the close of the Plan Year for such Member
which are allocated to the Member on or before the last day of the Plan
Year without regard to participation or performance of services thereafter,
(B) elective contributions of a nonhighly compensated employee which are
permitted to be treated as matching contributions under regulations
promulgated under section 401(m) of the Code and (C) after-tax employee
contributions which are Annual Additions to the Member's "compensation" for
such Plan Year. For this purpose, "compensation" means compensation for
service performed for a Participating Company which is currently includable
in gross income or which is excludable from gross income pursuant to an
election under a qualified cash or deferred arrangement under section
401(k) of the Code or a cafeteria plan under section 125 of the Code;
provided, however, the Company may elect to limit compensation for all
Members to amounts paid during the portion of the Plan Year during which
the Member was eligible to participate in the Plan or use any definition of
compensation permissible under section 414(s) of the Code and the
regulations thereunder. The "excess aggregate contribution" for any Plan
Year is the excess of the aggregate amount of matching contributions paid
over to the Fund pursuant to subsection 4(e) on behalf of "highly
compensated employees" for such Plan Year over the maximum amount of such
matching contributions permitted for "highly compensated employees" under
subsection 4(g)(i).
(iv) Aggregation of Contributions. The "actual
contribution percentage" for any Member who is a "highly compensated
employee" for the Plan Year and who is eligible to make after-tax
contributions to any plan subject to section 415 of the Code maintained by
a Participating Company or a Related Entity or to have employer matching
28
contributions within the meaning of section 401(m)(4)(A) of the Code
allocated to his account under two or more plans described in section
401(a) of the Code that are maintained by a Participating Company or a
Related Entity shall be determined as if all such contributions were made
under this Plan and each other plan.
(v) Aggregation of Plans. In the event that this Plan
satisfies the requirements of section 401(a)(4) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of section 401(a)(4) or 410(b) of the Code only if
aggregated with this Plan, then subsection 4(g)(i) shall be applied by
determining the "actual contribution percentages" of Members as if all such
plans were a single plan.
(vi) Aggregate Limit -- Multiple Use of Alternative
Limitation. The provisions of section 1.401(m)-2(b) of the regulations
under section 401(m) of the Code are hereby incorporated by reference. If
the limitation thereof is exceeded, it shall be corrected through reduction
of the "actual contribution percentage" in the manner specified in
subsection 4(g)(iii) with respect to "highly compensated employees"
eligible under both subsection 4(a) and subsection 4(e) of the Plan.
(vii)Testing Alternatives. To the extent permitted by
the Code, the Plan may treat contributions made under subsection 4(e) as
contributions made under subsection 4(a), and vice versa, to facilitate
satisfaction of any applicable nondiscrimination requirement.
(h) Profit Sharing Contributions
(i) Amount. For each Plan Year each Participating
Company may make contributions to the Fund in such amounts as the Company,
in its absolute discretion, shall determine; provided, however, the
aggregate contribution for a Plan Year shall not exceed any applicable
limitation of Section 4 or 5. The Company shall either (A) designate the
29
payment in writing to the Trustee as a payment on account of its taxable
year which ends coincident with or next following such Plan Year or (B)
claim such payment as a deduction on its federal income tax return for such
taxable year. The Participating Companies shall pay the contribution, if
any, for a Plan Year on or before the date (including any extensions
thereof) on which they are required to file their federal income tax
returns for the taxable year which ends coincident with or next following
such Plan Year.
(ii) Allocation of Contributions. As of the last day of
each Plan Year, the Committee shall allocate to the Profit Sharing Account
of each eligible Member a portion of the amount, if any, contributed to the
Fund in respect of such Plan Year by the Participating Company employing
him on the last day of such Plan Year. Eligible Members shall be limited
to Employees who (A) have satisfied the eligibility requirements of
subsection 3(a)(iii), (B) are employed by a Participating Company on the
last day of the Plan Year and (C) are not excluded under subsection
3(a)(iv). The Committee shall allocate the amount among eligible Members
employed by a contributing Participating Company on the last day of the
Plan Year in the ratio that each such Member's Compensation for the Plan
Year bears to the Compensation of all eligible Members for such Plan Year.
Notwithstanding the foregoing, for the 1997 Plan Year the contribution of
Sierra Airgas shall be allocated to Members who were employed by it on both
the first and last day of the Plan Year and who were credited with 1,000
Hours of Service in such Plan Year and for the 1998 Plan Year and
subsequent Plan Years, the contribution of Airgas Northern California and
Nevada shall be allocated to Members who were (A) employed on the first day
of the Plan Year either by it or an entity merged or consolidated with it
during the Plan Year, (B) employed on the last day of the Plan Year by it
and (C) credited with 1,000 Hours of Service during the Plan Year. Sixty
percent of the contribution made by Sierra Airgas for 1997 and by Airgas
Northern California and Nevada thereafter, shall be allocated in proportion
to Compensation, as described above, and 40% shall be allocated in
30
proportion to years of service where a Member is credited with one year for
each calendar year, including years prior to the date the Plan became
effective, in which he is credited with 1,000 Hours of Service.
(iii)Collective Bargaining Units. Notwithstanding
subsections 4(h)(i) and (ii) above, each Participating Company shall make
any formula profit sharing contribution required by a collective bargaining
agreement in accordance with the terms thereof. Such contribution shall be
allocated among Members eligible under the terms of the applicable
collective bargaining agreement as provided therein.
(i) Profit Sharing Account. The Participating Company
contributions allocated to a Member under subsection 4(h) and the
corresponding provisions of the Plan as heretofore effective, all as
adjusted for investment gain or loss and income or expense, constitute the
Member's Profit Sharing Account. A Member shall at all times have a
nonforfeitable interest in the portion of his Accrued Benefit derived from
his Profit Sharing Account.
(j) Rollovers
31
(i) Contributions. Each Employee eligible under
subsection 3(e) and each Member actively employed by a Participating
Company may contribute to the Fund an amount constituting an "eligible
rollover distribution" from a "qualified trust," both within the meaning of
section 402(c)(4) of the Code, from a previous employer's retirement plan
(or an individual retirement account consisting solely of an "eligible
rollover distribution" from a "qualified trust").
(ii) Rollover Account. Each Member's contributions
under subsection 4(j)(i) and the corresponding provisions of the Plan as
heretofore effective, all as adjusted for investment gain or loss and
income or expense, constitute such Member's Rollover Account. A Member
shall at all times have a nonforfeitable interest in the portion of his
Accrued Benefit derived from his Rollover Account.
(iii)Refunds. If an Employee makes a contribution under
this subsection 4(j) which the Committee subsequently determines is not
eligible for contribution under section 402 of the Code, then the Committee
shall take such corrective action as the Committee determines is necessary
or appropriate under applicable law.
(k) Voluntary Contributions. A Member
shall not be permitted to make contributions to the Plan other than as
permitted under subsection 4(a) or 4(j).
(l) Payroll Taxes. The Participating Companies
shall withhold from the Compensation of the Members and remit to the
appropriate government agencies such payroll taxes and income withholding
as the Company determines is or may be necessary under applicable statutes
or ordinances and the regulations and rulings thereunder.
(m) Deductibility. All Participating Company
contributions are expressly conditioned upon their deductibility for
federal income tax purposes. Nondeductible contributions shall be abated
and to the extent permitted by applicable law, refunded, starting with
contributions made under subsection 4(h), then 4(e) and finally 4(a).
32
(n) Supplemental Participating Company Contributions.
Notwithstanding any provision of the Plan to the contrary, the following
provisions shall govern the treatment of Supplemental Participating Company
Contributions.
(i) Frequency and Amount. For each Plan Year, the
Participating Companies shall make a Supplemental Participating Company
Contribution in an amount fixed by resolution of the Board of Directors
adopted on or before the last day of the Company's taxable year that ends
within such Plan Year, to be allocated as provided in subsection 4(n)(ii).
(ii) Allocation Method. The Supplemental Participating
Company Contribution shall be allocated among each individual who is both
an Employee and a Member on the first day of the Plan Year as follows:
(A) The Supplemental Participating Company
Contribution shall be allocated during the Plan Year as contributions under
subsections 4(a) and 4(e) to the Salary Reduction Account and Matching
Account of each eligible Member pursuant to the allocation provisions of
subsections 4(a) and 4(e) of the Plan.
(B) Second, the balance of the Supplemental
Participating Company Contribution remaining after the allocation in
subsection 4(n)(ii)(A), if any, shall be allocated as an additional
matching contribution under subsection 4(e) on the last day of the Plan
Year to the Matching Account of each eligible Member in the employ of a
Participating Company on the last day of the Plan Year in the ratio that
such Member's contributions under subsection 4(a) during the Plan Year
bears to the contributions under subsection 4(a) of all such eligible
Members during the Plan Year.
(C) The Committee shall reduce the proportionate
allocation under subsection 4(n)(ii)(B) to highly compensated employees (as
defined in section 414(q) of the Code) to the extent necessary to comply
with the provisions of section 401(a)(4) or 401(m) of the Code and the
regulations thereunder.
33
(D) The Supplemental Participating Company
Contribution allocated as matching contributions to the Member's Matching
Account pursuant to subsection 4(n)(ii)(B) shall be treated in the same
manner as matching contributions for all purposes of the Plan.
Notwithstanding any other provision of the Plan to the contrary, any
allocation to a Member's Salary Reduction Account shall be made under
subsection 4(a) or this subsection, as appropriate, but not both
subsections. Similarly, any allocation to a Member's Matching Account
shall be made under subsection 4(e) or this subsection, as appropriate, but
not both subsections. Notwithstanding any other provision of the Plan to
the contrary, the amount allocated to a Member under (A) through (D) above
may be subject to an adjustment as may be determined necessary to prevent
contributions made by or on behalf of a Member for a Plan Year to exceed
the maximum allowable under section 415 of the Code.
(iii) Timing, Medium and Posting. The Participating
Companies shall make the Supplemental Participating Company Contribution in
cash, in one or more installments without interest, at any time during the
Plan Year, and for purposes of deducting such Contribution, not later than
the Company's federal tax return due date, including extensions, for its
taxable year that ends within such Plan Year. The Supplemental
Participating Company Contribution shall be held in a suspense account
until allocated. Such suspense account shall not participate in the
allocation of investment gains, losses, income and deductions of the Fund
as a whole, but shall be invested separately at the direction of the
Committee and all gains, losses, income and deductions attributable to such
investment shall be applied to pay Plan fees and expenses and, thereafter,
to reduce matching contributions.
(iv) Deduction Limitation. In no event shall the
Supplemental Participating Company Contribution, when aggregated with other
contributions
34
for the Company's taxable year that ends within such Plan Year, exceed the
amount deductible by the Participating Companies for federal income tax
purposes for such taxable year.
35
5. MAXIMUM CONTRIBUTIONS AND BENEFITS
(a) Defined Contribution Limitation. In the event that the
amount allocable to a Member from contributions to the Fund with respect to
any Plan Year would cause the Annual Additions allocated to any Member under
this Plan plus the Annual Additions allocated to such Member under any other
plan maintained by a Participating Company or a Related Entity to exceed for
any Limitation Year the lesser of (i) $30,000 (or, if greater, one-fourth of
the dollar limitation in effect under subsection 415(b)(1)(A) of the Code for
such Limitation Year) or (ii) 25% of such Member's compensation (as defined in
subsection 5(d)) for such Limitation Year, then such amount allocable to
such Member shall be reduced by the amount of such excess to determine the
actual amount of the contribution allocable to such Member with respect to
such Plan Year. If the excess amount results from a reasonable error in
determining the amount of contribution that may be made under subsection
4(a) without violating the limitation of this subsection, then the excess
amount with earnings attributable thereto shall be refunded to the Member.
If the excess amount results (i) from the allocation of forfeitures, (ii) a
reasonable error in estimating a Member's annual compensation (as defined
in subsection 5(d)) or (iii) under other limited facts and circumstances
that the Commissioner of Internal Revenue finds justify the availability of
the remedy next following, the excess amount with earnings attributable
thereto allocable to a Member's Accrued Benefit shall be held in a suspense
account and shall be used to reduce contributions allocable to the Member
for the next Limitation Year (and succeeding Limitation Years as necessary)
provided the Member is covered by the Plan as of the end of the Limitation
Year. However, if the Member is not covered by the Plan as of the end of
the Limitation Year, then the excess amount shall be held unallocated in a
suspense account and shall be allocated, after adjustment for investment
gains or losses, among all Employees eligible to make contributions under
subsection 4(a) for such Limitation Year as an equal percentage of their
Compensation for such Limitation Year. No excess amount may be distributed
36
to a Member or former Member.
(b) Combined Limitation. In addition to
the limitation of subsection 5(a), if a Participating Company or a Related
Entity maintains or maintained a defined benefit plan and the amount
required to be contributed to the Fund with respect to any Plan Year would
cause the aggregate amount allocated to any Member under all defined
contribution plans maintained by any Participating Company or Related
Entity to exceed the maximum allocation as determined in subsection 5(c),
then such amount required to be contributed with respect to such Member
shall be reduced by the amount of such excess to determine the actual
amount of the contribution with respect to such Member for such Plan Year.
Notwithstanding the foregoing, if an excess amount is contributed with
respect to any Member, then the excess allocation shall be reallocated or
held in a suspense account in accordance with subsection 5(a). The
limitation of this subsection shall be applied to the Member's benefit from
the defined benefit plan prior to reduction of the Member's Annual
Additions under this Plan.
(c) Combined Limitation Computation.
The maximum allocation is the amount of Annual Additions
which may be allocated to a Member's benefit without permitting the sum of
the defined benefit plan fraction (as hereinafter defined) and the defined
contribution plan fraction (as hereinafter defined) from exceeding 1.0 for
any Limitation Year. The defined benefit plan fraction applicable to a
Member for any Limitation Year is a fraction, the numerator of which is the
projected annual benefit of the Member under the plan determined as of the
close of the Limitation Year and the denominator of which is the lesser of
(i) the product of 1.25 multiplied by the maximum then permitted dollar
amount of straight life annuity payable under the defined benefit plan
maximum benefit provisions of the Code and (ii) the product of 1.4
multiplied by the maximum permitted amount of straight life annuity, based
on the Member's
37
compensation, payable under the defined benefit plan
maximum benefit provisions of the Code. For purposes of this subsection
5(c), a Member's projected annual benefit is equal to the annual benefit,
expressed in the form of a straight life annuity, to which the Member would
be entitled under the terms of the defined benefit plan based on the
assumptions that (i) the Member will continue employment until reaching his
normal retirement age under the plan (or current age, if later) at a rate
of compensation equal to that for the Limitation Year under consideration
and (ii) all other relevant factors used to determine benefits under the
plan for the Limitation Year under consideration will remain constant for
future Limitation Years. The defined contribution plan fraction applicable
to a Member for any Limitation Year is a fraction, the numerator of which
is the sum of the Annual Additions for all Limitation Years allocated to
the Member as of the close of the Limitation Year and the denominator of
which is the sum of the lesser, separately determined for each Limitation
Year of the Member's employment with a Participating Company or Related
Entity, of (i) the product of 1.25 multiplied by the maximum dollar amount
of Annual Additions which could have been allocated to the Member under the
Code for such Limitation Year and (ii) the product of 1.4 multiplied by the
maximum amount, based on the Member's compensation, of Annual Additions
which could have been allocated to the Member for such Limitation Year.
(d) Definition of "Compensation" for Code Limitations. For
purposes of the limitations on the allocation of Annual Additions to a Member
and maximum benefits under a defined benefit plan as provided for in this
Section 5, "compensation" for a Limitation Year shall mean the sum of
amounts paid by a Participating Company or a Related Entity to the Member
with respect to personal services rendered by the Member during the
Limitation Year plus (i) amounts received by the Member (A) through
accident or health insurance or under an accident or health plan maintained
or contributed to by a Participating Company or a Related Entity and which
are includable in the gross income of the Member, (B) through a plan
38
contributed to by a Participating Company or a Related Entity providing
payments in lieu of wages on account of a Member's permanent and total
disability, or (C) as a moving expense allowance paid by a Participating
Company or a Related Entity and which are not deductible by the Member for
federal income tax purposes; (ii) the value of a non-statutory stock option
granted by a Participating Company or a Related Entity to the Member to the
extent included in the Member's gross income for the taxable year in which
it was granted; and (iii) the value of property transferred by a
Participating Company or a Related Entity to the Member which is includable
in the Member's gross income due to an election by the Member under
section 83(b) of the Code. "Compensation" shall not include (i)
contributions made by a Participating Company or a Related Entity to a
deferred compensation plan to the extent that, before application of the
limitations of section 415 of the Code to the plan, such contributions are
not includable in the Member's gross income for the taxable year in which
contributed, (ii) Participating Company or Related Entity contributions
made on behalf of a Member to a simplified employee pension plan to the
extent they are deductible by the Member under section 219(b) of the Code,
(iii) distributions from a deferred compensation plan (except from an
unfunded nonqualified plan when includable in gross income), (iv) amounts
realized from the exercise of a nonqualified stock option, or when
restricted stock (or property) held by a Member either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture,
(v) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified or incentive stock option, and (vi) other
amounts which receive special tax benefits, such as premiums for group term
life insurance (to the extent excludable from gross income) or
Participating Company or Related Entity contributions towards the purchase
of an annuity contract described in section 403(b) of the Code.
Notwithstanding the foregoing, for Plan Years beginning after December 31,
1997, elective deferrals as defined in section 402(g)(3) of the Code and
any amount which is contributed or deferred by a Participating Company at
the election
39
of an Employee and which is not included in gross income of
the Employee by reason of section 125 or 457 of the Code shall be included
in "compensation".
(e) Transition ProvisionTransition Provision.
Notwithstanding the foregoing provisions of this Section 5, the benefit of
a Member on January 1, 1987 under a defined benefit pension plan shall not
be less than it was on December 31, 1986 by reason of the reduction in the
dollar limit of section 415(b) of the Code which then became effective.
However, amounts in excess of the limitation by reason of changes in the
terms and conditions of a defined benefit pension plan made after May 5,
1986 shall not be preserved.
40
6. ADMINISTRATION OF FUNDS
(a) Investment Control. Pursuant to the
terms of the Trust Agreement, the management and control of the assets of
the Plan shall be vested in the Trustee designated from time to time by the
Company through its Board of Directors; provided, however, the Company
through its Board of Directors may appoint one or more Investment Managers
to manage, acquire or dispose of any assets of the Plan. The Committee
shall instruct the Trustee or an Investment Manager to establish Investment
Categories for selection by the Members and may at any time add to or
delete from the Investment Categories.
(b) Parent Company Stock. The Committee
shall establish an Investment Category consisting solely of Parent Company
Stock. All dividends or other distributions with respect thereto shall be
applied to purchase additional Parent Company Stock. The Trustee may
acquire Parent Company Stock from any source, including the public market,
in private transactions, from the Company's treasury shares or from
authorized but unissued shares. A Member may elect in accordance with
subsection 6(c) that all or a portion of his Accrued Benefit be applied to
purchase Parent Company Stock. A Member shall have the right to direct the
Trustee to vote Parent Company Stock allocated to him in accordance with
procedures established under the Trust Agreement.
(c) Member Elections. In accordance with
rules established by the Committee, each Member shall have the right to
designate the Investment Category or Categories in which new contributions
allocated to such Member and prior balances are invested. Any designation
or change in designation of Investment Category shall be made in such
manner and be subject to such frequency limitations as the Committee shall
from time to time specify. The designation or change shall become
effective as of the date specified by the Committee on or after which it is
received. Any election of Investment Category by any Member shall, on its
effective date, cancel any prior election. The right to elect Investment
41
Categories as set forth herein shall be the sole and exclusive investment
power granted to Members. The Committee may limit the right of a Member
(i) to increase or decrease his contributions to a particular Investment
Category, (ii) to transfer amounts to or from a particular Investment
Category or (iii) to transfer amounts between particular Investment
Categories, if such limitation is required by the rules establishing an
Investment Category or necessary to facilitate administration of the Plan.
In accordance with subsection 2(d), the Committee may promulgate separate
accounting and administrative rules to facilitate the establishment or
maintenance of an Investment Category.
(d) No Member Election. If a Member does
not make a written election of Investment Category, the Committee shall
direct that all amounts allocated to such Member be invested in the
Investment Category which, in the opinion of the Committee, best protects
principal.
(e) Facilitation. Notwithstanding any
instruction from any Member for investment of funds in an Investment
Category as provided for herein, the Trustee shall have the right to hold
uninvested or invested in a short-term investment fund any amounts intended
for investment or reinvestment until such time as investment may be made in
accordance with the Plan and the Trust Agreement.
(f ) Valuations. The Fund and each Investment
Category shall be valued at fair market value as of each Valuation Date.
(g) Allocation of Gain or Loss.
The Trustee may maintain accounts for each Member's investment in each
Investment Category. If such separate accounts are not maintained, then
any increase or decrease in the market value of each Investment Category of
the Fund since the preceding Valuation Date, as computed pursuant to
subsection 6(f), and all accrued income or expense and realized profit or
loss shall be added to or deducted from the account of each Member in the
ratio that each Member's account in such Investment Category at the prior
42
Valuation Date adjusted on a uniform basis to reflect contributions and
withdrawals during the valuation period bears to the total of all such
adjusted accounts in such Investment Category; provided, however, such
allocation for the first period following the establishment of an
Investment Category shall be made based on the ratio that the amount
allocated to each Member in such Investment Category in the period bears to
the total amount allocated to such Investment Category in the period.
(h) Bookkeeping. The Committee shall direct that
separate bookkeeping accounts be maintained to reflect each Member's Salary
Reduction Account, elective contributions under subsection 4(a), Matching
Account, Profit Sharing Account and Rollover Account.
43
7. BENEFICIARIES AND DEATH BENEFITS
(a) Designation of Beneficiary.
Each Member shall have the right to designate one or more beneficiaries and
contingent beneficiaries to receive any benefit to which such Member may be
entitled hereunder in the event of the death of the Member prior to the
complete distribution of such benefit by filing a written designation with
the Committee on the form prescribed by the Committee. Such Member may
thereafter designate a different beneficiary at any time by filing a new
written designation with the Committee. Notwithstanding the foregoing, if
a married Member designates a beneficiary other than his spouse, such
designation shall not be valid unless the spouse consents thereto in
writing witnessed by a notary public or authorized representative of the
Plan. A spouse's consent given in accordance with the Committee's rules
shall be irrevocable by the spouse with respect to the beneficiary then
designated by the Member unless the Member makes a new beneficiary
designation. Any written designation shall become effective only upon its
receipt by the Committee or its designee. If the beneficiary designated
pursuant to this subsection dies on or before the commencement of
distribution of benefits and the Member fails to make a new designation,
then his beneficiary shall be determined pursuant to subsection 7(b).
Notwithstanding the above, to the extent provided in a qualified domestic
relations order (within the meaning of section 414(p) of the Code) the
former spouse of the Member may be treated as the spouse of the Member for
purposes of this subsection, and the current spouse will not be treated as
the Member's spouse for such purposes.
(b) Beneficiary Priority List. If
(i) a Member omits or fails to designate a beneficiary, (ii) no designated
beneficiary survives the Member or (iii) the Committee determines that the
Member's beneficiary designation is invalid for any reason, then the death
benefits shall be paid to the Member's surviving spouse, or if the Member
is not survived by his spouse, then to the Member's estate. If the
Member's designated
44
beneficiary dies after the Member but before distribution of benefits, then
the death benefits shall be paid to the beneficiary's estate.
(c) Proof of Death. The Committee may, as a
condition precedent to making payment to any beneficiary, require that a
death certificate, burial certificate or other evidence of death acceptable
to it be furnished.
(d) Divorce. If a Member designates his spouse as
beneficiary and subsequent to making the designation a decree of divorce is
issued which terminates the Member's marriage to such spouse, then the
Member's prior beneficiary designation shall be invalid and, unless the
Member makes a new designation, the Member shall be treated as having died
without designating a beneficiary.
45
8. BENEFITS FOR MEMBERS
The following are the only post-employment benefits provided by the
Plan:
(a) Retirement Benefit
(i) Valuation. Each Member who retires on or after his
Normal Retirement Date shall be entitled to a retirement benefit equal to
100% of the Member's Accrued Benefit on the Valuation Date as of which his
Accrued Benefit is liquidated for distribution. Distribution will be made
at the time and the manner provided by Section 9.
(ii) Late Retirement. A Member who continues employment
beyond his Normal Retirement Date shall continue to participate in the
Plan.
(b) Death Benefit. In the event of the death of
a Member, 100% of the Member's Accrued Benefit on the Valuation Date after
his death as of which his Accrued Benefit is liquidated for distribution
shall constitute his death benefit and shall be distributed pursuant to
Sections 7 and 9 (i) to his designated beneficiary or (ii) if no
designation of beneficiary is then in effect, to the beneficiary determined
pursuant to subsection 7(b).
(c) Termination of Employment Benefit.
In the event a Member terminates employment with all
Participating Companies and all Related Entities for reasons other than
those covered by subsections 8(a) and 8(b) above, the Member shall be
entitled to receive a benefit equal to 100% of his Accrued Benefit on the
Valuation Date on which his Accrued Benefit is liquidated for distribution.
Distributions shall be made at the time and in the manner provided by
Section 9.
(d) Vesting. A Member shall have a nonforfeitable
right to his Accrued Benefit at all times.
46
9. DISTRIBUTION OF BENEFITS
(a) Commencement
(i) Vested and Retirement Benefits. Generally, vested
and retirement benefits shall be paid as soon after the Member's
termination of employment as is administratively feasible, but not sooner
than 30 days after the Member receives the notice required by section
1.411(a)-11(c) of the regulations under section 411(a)(11) of the Code
unless the Member receives written notice that he has a right to a period
of at least 30 days after receipt of the notice to consider whether or not
to elect a distribution and affirmatively elects after receipt of the
notice to accept a distribution rather than elect the rollover provided for
under subsection 9(g). In addition, if the Member's nonforfeitable Accrued
Benefit exceeds $3,500, distribution of benefits shall not begin unless the
Member consents to such distribution in writing within the 90-day period
ending on the date on which the notice required under section 411(a)(11) of
the Code is given. If the Member does not consent to the distribution, his
Accrued Benefit shall be retained in the Fund. Distribution shall commence
as soon as administratively feasible after the Member's request for
distribution or, if earlier, the date on which the Member is required to
receive distribution under subsection 9(a)(ii). For purposes of the $3,500
threshold with respect to distributions made on or after March 22, 1999, if
the present value of the Accrued Benefit at the time of any distribution
exceeds $3,500, the present value of the Accrued Benefit at any subsequent
time will be deemed to exceed $3,500. For Plan Years beginning on or after
January 1, 1998, "$5,000" is substituted for "$3,500", each place "$3,500"
appears in this subsection.
(ii) Limitation and Required Commencement Date. In no
event other than with the written consent of the Member shall the payment
of benefits commence later than the 60th day after the close of the Plan
Year in which the latest of the following occurs:
(A)The Member's Normal Retirement Date;
47
(B)The Member's termination of employment; or
(C)The tenth anniversary of the year in which the
Member first commenced participation in the Plan.
Furthermore, distribution of benefits must commence on or before the April
1st of the calendar year following the calendar year in which the Member
attains age 70-1/2 or terminates employment, whichever is later; provided,
however, if a Member is a 5% owner (as defined in section 416 of the Code)
with respect to the Plan at any time during the Plan Year ending in the
calendar year in which he attained age 70-1/2, then distribution of
benefits must commence no later than the April 1st of the calendar year
following the calendar year in which the Member attains age 70-1/2.
Distribution required under the preceding sentence shall be made in one
lump sum if the Member's Severance Date has occurred.
(iii) Death Benefits. The Plan shall pay a Member's
death benefit as soon after such time as the Member's beneficiary requests,
but not later than the December 31st of the calendar year in which occurs
the fifth anniversary of the Member's death or, if the Member's beneficiary
is the Member's spouse, the date on which the Member would have attained
age 70-1/2, if later.
(b) Benefit Forms. All benefits distributed
under Section 8 shall be paid in one lump sum. If a portion of a Member's
Accrued Benefit is invested in an Investment Category holding Parent
Company Stock, the Member may direct that the portion of his Accrued
Benefit so held be distributed to him in kind, except that the value of a
fractional share shall be distributed in cash.
48
(c) Deferred Payments. If the payment of benefits is to be
deferred, the undistributed value of the benefit shall be retained in the
Fund subject to the administrative provisions of the Plan and the Trust
Agreement.
(d) Withholding. All distributions under the Plan
are subject to federal, state and local tax withholding as required by
applicable law as in effect from time to time.
(e) Compliance with Code Requirements.
All forms of benefit distributions and required benefit
commencement dates shall be subject to and in compliance with section
401(a)(9) of the Code and the regulations thereunder, including the minimum
distribution incidental benefit requirement. Unless the Member irrevocably
elects to the contrary at the time required distributions under section
401(a)(9) of the Code begin, required minimum distributions made before the
Member's Severance Date shall be based on the life expectancy of the
Member, as determined under the Code, without recalculation. The
provisions of section 401(a)(9) of the Code and the regulations thereunder,
including proposed regulation sections 1.401(a)(9)-1 and 2, shall override
any provision of the Plan inconsistent therewith.
(f) Distribution Limitations. Amounts contributed pursuant
to subsection 4(a) of the Plan shall not be distributed earlier than upon
occurrence of one of the following events:
(i) The Member's retirement, death, disability or
separation from service (within the meaning of sections 401(a) and (k) of
the Code);
(ii) The termination of the Plan without establishment
or maintenance of another defined contribution plan (other than an ESOP or
SEP);
(iii)The Member's attainment of age 59-1/2 or suffering
hardship;
(iv) The sale or other disposition by a Participating
Company to an unrelated corporation of substantially all of the assets used
in a trade or business, but only
49
with respect to employees who continue
employment with the acquiring corporation and provided the acquiring
corporation does not maintain the Plan after the disposition; and
(v) The sale or other disposition by a Participating
Company of its interest in a subsidiary to an unrelated entity but only
with respect to employees who continue employment with the subsidiary and
provided the acquiring entity does not maintain the Plan after the
disposition.
Subsections 9(f)(ii), (iv) and (v), above, apply only if the distribution
is in the form of a lump sum. Subsections 9(f)(iv) and (v), above, apply
if the transferor corporation continues to maintain the Plan. This
subsection 9(f) shall not be construed as giving a Member a right to a
distribution not otherwise expressly provided for by another subsection of
the Plan.
(g) Rollover Election. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a "distributee's" election
under this subsection, a "distributee" may elect, at the time and in the
manner prescribed by the Committee, 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, the definitions specified below shall apply:
(i) Eligible Rollover Distribution. An eligible
rollover distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; any hardship distribution described in section
401(k)(2)(B)(i)(IV) of the Code made after December 31, 1999; and the
portion of any distribution that is not includible in gross income
50
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(ii) Eligible Retirement Plan. An eligible retirement
plan is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or an individual
retirement annuity.
(iii)Distributee. A distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse who is the
alternate payee under a qualified domestic relations order, as defined in
section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(iv) Direct Rollover. A direct rollover is a payment by
the Plan to the eligible retirement plan specified by the distributee.
51
10. HARDSHIP AND IN-SERVICE DISTRIBUTIONS
(a) General Rule
(i) Rollover. A Member may receive an in-service
distribution of all or a portion of his Rollover Account.
(ii) Hardship. A Member shall have the right to receive
an in-service distribution from his Rollover Account and Salary Reduction
Account on account of hardship. A distribution is on account of hardship
only if the distribution both (A) is made on account of an immediate and
heavy financial need of the Member and (B) is necessary to satisfy such
financial need.
(iii) Age 59-1/2. A Member who has attained age 59-
1/2 may receive an in-service distribution from his Rollover Account and
Salary Reduction Account without regard to hardship.
(iv) Age 70-1/2. A Member who has attained age 70-1/2
may receive an in-service distribution of all or any portion of his Accrued
Benefit.
(b) Need. A distribution shall be deemed to be made on
account of an immediate and heavy financial need of the Member if the
distribution is on account of (i) medical expenses described in section
213(d) of the Code incurred or to be incurred by the Member, the Member's
spouse or any dependent of the Member (as defined in section 152 of the
Code); (ii) purchase (excluding mortgage payments) of a principal residence
for the Member; (iii) payment of tuition and related educational fees,
including room and board expenses, for the next twelve months of post-
secondary education for the Member, the Member's spouse, child or any
dependent of the Member (as defined in section 152 of the Code); (iv) the
need to prevent the eviction of the Member from his principal residence or
foreclosure on the mortgage of the Member's principal residence; or (v)
such other reason as the Commissioner of Internal Revenue specifies as a
deemed immediate and heavy financial need through the publication of
regulations,
52
revenue rulings, notices or other documents of general applicability.
(c) Satisfaction of Need. A distribution
shall be deemed to be necessary to satisfy an immediate and heavy financial
need of a Member only if all of the requirements or conditions set forth
below are satisfied or agreed to by the Member, as appropriate.
(i) Amount. The distribution is not in excess of the
amount of the immediate and heavy financial need of the Member, which
amount shall be deemed to include anticipated federal, state and local
income taxes and penalties.
(ii) Other Sources. The Member has obtained all
distributions, other than hardship distributions, and all nontaxable loans
currently available under all plans subject to section 415 of the Code
maintained by any Participating Company or Related Entity.
(iii) Suspension. The Member's elective
contributions under this Plan and each other deferred compensation plan
(within the meaning of regulations under section 401(k) of the Code)
maintained by a Participating Company or a Related Entity in which the
Member participates shall be suspended for twelve full calendar months
after receipt of the distribution.
(iv) Contribution Limitation. The Member does not (and
is not permitted to) make elective contributions under this Plan or any
other plan maintained by a Participating Company or a Related Entity for
the year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under section 402(g) of the
Code for such next taxable year reduced by the amount of the Member's
elective contributions for the taxable year of the hardship distribution.
53
(d) Limitations.
(i) Hardship. Distributions on account of hardship
shall be limited to the sum of (A) the Member's Rollover Account, (B) the
Member's elective contributions under subsection 4(a) and (C) income
credited to the Member's Salary Reduction Account as of December 31, 1988.
(ii) Other Distributions. A Member shall be permitted
only one in-service distribution per Plan Year under subsection 10(a).
(e) Accounting. A distribution under subsection
10(a)(ii) or (iii) shall be charged first against the Member's Rollover
Account and then against the Member's Salary Reduction Account. The
Committee may prescribe rules with respect to the order of Investment
Category from which the distribution shall be paid.
54
11. LOANS
(a) Availability. The Committee shall direct
that a bona fide loan be made from the Fund to any Member who requests the
same, provided the Member (i) pays any application or processing fee which
the Committee uniformly charges with respect to loan requests and (ii) on
the date the loan would be disbursed is employed by a Participating Company
or Related Entity or is a party in interest (as defined in ERISA) with
respect to the Plan. All such loans shall be subject to the requirements
of this Section which shall be deemed to include written rules prescribed
by the Committee from time to time with respect to loans. Eligibility for
and the rules with respect to loans shall be uniformly applied.
(b) Minimum Requirements. Loans shall be
subject to the following rules:
(i) Principal Amount. The principal amount of the loan
to a Member may not be less than $1,000 and may not exceed, when added to
the outstanding balance of all other loans to the Member from the Plan, the
lesser of (A) $50,000, reduced by the excess of the highest outstanding
balance of loans to the Member from the Plan during the one-year period
ending on the day before the date on which such loan was made over the
outstanding balance of loans to the Member from the Plan on the date on
which such loan is made or (B) 50% of the Member's nonforfeitable Accrued
Benefit on the date on which the loan is made.
(ii) Maximum Term. The term of the loan may not exceed
five years; however, if the Member uses the loan proceeds to acquire his
principal residence, the term may be thirty years. If a Member's
employment with all Participating Companies and Related Entities terminates
for any reason, the loan shall be due and payable on the last day of the
calendar quarter following the calendar quarter in which employment
terminated; provided, however, in the case of a disposition of a
Participating Company or substantially all the assets of a trade or
business, the Committee, according to a uniform rule applicable to all
Members
55
affected by the transaction, may permit Members to continue to
amortize the loan.
(iii) Interest Rate. The interest rate shall be a
rate charged by commercial lenders for comparable loans on the date the
loan request is approved, as determined by the Committee.
(iv) Repayment. The loan shall be repaid over its term
in level installment payments corresponding to the Member's payroll period.
As a condition precedent to approval of the loan, the Member shall be
required to authorize payroll withholding in the amount of each installment
for all periods he is employed by a Participating Company. Notwithstanding
the foregoing, the loan repayment of a Member who is in qualified military
service within the meaning of section 414(u) of the Code shall be suspended
to the extent permitted by section 414(u) of the Code.
(v) Collateral. The loan shall be secured by 50% of
the Member's nonforfeitable Accrued Benefit.
(vi) Distribution of Accrued Benefit. If the
nonforfeitable portion of a Member's Accrued Benefit is to be distributed
prior to the Member's payment of all principal and accrued interest due on
any loan to such Member, the distribution shall include as an offset the
amount of unpaid principal and interest due on the loan and the note shall
be distributed.
(vii) Notes. All loans shall be evidenced by a note
containing such terms and conditions as the Committee shall require.
(viii) Multiple Loans. A Member shall be permitted
only one outstanding loan at any time.
(ix) Fees. The Committee may adopt a rule pursuant to
subsections 2(h) and 11(a) of the Plan imposing a reasonable fee on a
Member who borrows under this Section 11 for processing his loan
application, preparing his loan documentation or administering his loan.
56
(c) Accounting. The principal amount of any loan
shall be drawn first from the Member's Rollover Account, then from the
Member's Profit Sharing Account, then from the Member's Matching Account
and finally from the Member's Salary Reduction Account. The Committee may
prescribe rules with respect to the order of Investment Categories from
which the distribution shall be paid. The loan shall be treated as a
separate Investment Category of the borrowing Member. All payments of
principal and interest with respect to such loan shall be credited to the
borrowing Member, with repayment of principal credited to the Member's
Accounts in reverse order from the Accounts withdrawn. The repayment shall
be invested in accordance with the Member's current election for new
contributions.
57
12. TITLE TO ASSETS
No person or entity shall have any legal or equitable right or
interest in the contributions made by any Participating Company, or
otherwise received into the Fund, or in any assets of the Fund, except as
expressly provided in the Plan.
58
13. AMENDMENT AND TERMINATION
(a) Amendment. The provisions of this Plan may be
amended by the Board of Directors (or its delegee as authorized by
subsection 2(e)) from time to time and at any time in whole or in part,
provided that no amendment shall be effective unless the Plan as so amended
shall be for the exclusive benefit of the Members and their beneficiaries,
and that no amendment shall operate to deprive any Member of any rights or
benefits accrued to him under the Plan prior to such amendment.
(b) Termination. While it is the Company's
intention to continue the Plan in operation indefinitely, the Company
nevertheless expressly reserves the right by action of the Board of
Directors to terminate the Plan in whole or in part or discontinue
contributions. Any such termination, partial termination or discontinuance
of contributions shall be effected only upon condition that such action is
taken as shall render it impossible for any part of the corpus of the Fund
or the income therefrom to be used for, or diverted to, purposes other than
the exclusive benefit of the Members and their beneficiaries.
(c) Conduct on Termination. If the
Plan is to be terminated at any time, the Company shall give written notice
to the Trustee which shall thereupon revalue the assets of the Fund and the
accounts of the Members as of the date of termination, partial termination
or discontinuance of contributions and, after discharging and satisfying
any obligations of the Plan, shall allocate all unallocated assets to the
Accrued Benefits of the Members at the date of termination, partial
termination or discontinuance of contributions in accordance with
subsection 6(g). Upon termination, partial termination or discontinuance
of contributions, the Accrued Benefits of Members affected thereby shall
remain fully vested and shall not thereafter be subject to forfeiture in
whole or in part. The Committee shall instruct the Trustee to continue to
control and manage the Fund for the benefit of Members to whom
distributions will be made at the time and in the manner provided in
Section 9. Notwithstanding the foregoing, incident to a termination or a
59
discontinuance of contributions, the Company may amend the Plan and the
Trust Agreement to provide for distribution of Accrued Benefits to each
affected Member provided such distribution does not violate any applicable
provision of subsection 9(f) of the Plan or section 401(a) or 401(k) of the
Code.
60
14. LIMITATION OF RIGHTS
(a) Alienation. None of the payments, benefits or
rights of any Member shall be subject to any claim of any creditor of such
Member and, in particular, to the fullest extent permitted by law, shall be
free from attachment, garnishment, trustee's process, or any other legal or
equitable process available to any creditor of such Member. No Member
shall have the right to alienate, anticipate, commute, pledge, encumber or
assign any of the benefits or payments which he may expect to receive,
contingently or otherwise, under this Plan, except the right to designate a
beneficiary or beneficiaries in accordance with the Plan. This subsection
shall not apply to (i) voluntary and revocable assignments within the
meaning of the regulations under section 401(a)(13) of the Code, (ii)
offsets permitted by section 401(a)(13)(C) of the Code for amounts a Member
is required to pay by order, judgment, settlement or the like, (iii) the
pledging of a Member's Accrued Benefit as security for a loan made to such
Member under Section 11, (iv) the enforcement of a federal tax levy made
pursuant to section 6331 of the Code or (v) the collection by the United
States on a judgment resulting from an unpaid tax assessment.
(b) Qualified Domestic Relations Order Exception.
Subsection 14(a) shall not apply to
the creation, assignment or recognition of a right to any benefit payable
with respect to a Member under a qualified domestic relations order within
the meaning of section 414(p) of the Code. Notwithstanding Sections 8-10,
distribution to an alternate payee pursuant to a qualified domestic
relations order shall be made (i) at the time specified in such order or
(ii), if the order permits, as soon after the Committee approves the order
as is administratively feasible provided such distribution is permitted
under applicable provisions of the Code.
(c) Employment. Neither the establishment of the
Plan, nor any modification thereof, nor the creation of any fund, trust or
account, nor the payment of any benefit shall be construed as giving any
Member or Employee, or any person whomsoever, any legal or equitable right
against any Participating Company, the Trustee or the Committee unless
61
such right shall be specifically provided for in the Trust Agreement or the
Plan or conferred by affirmative action of the Company or the Committee in
accordance with the terms and provisions of the Plan or as giving any
Member or Employee the right to be retained in the employ of any
Participating Company. All Members and other Employees shall remain
subject to discharge to the same extent as if the Plan had never been
adopted.
62
15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
(a) General Rule. In the case of any Plan merger
or Plan consolidation with, or transfer of assets or liabilities of the
Plan to, any other plan, each Member in the Plan must be entitled to
receive a benefit immediately after the merger, consolidation, or transfer
(if the Plan were then to terminate) which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had been terminated).
(b) Protected Benefits. Each Member who
had an account (the "Transferred Account") (i) in a plan which merges with
and into this Plan or (ii) a plan which transfers an account into this Plan
without providing the Member the option to receive a distribution, shall
have all of the benefits, rights or features provided by the transferor
plan which are protected under section 411(d)(6) of the Code with respect
to the Transferred Account. The Committee shall provide for separate
recordkeeping for a Member's Transferred Account and such additional
subaccounts as may be necessary to comply with the requirements of this
subsection. Except to the extent necessary to comply with the requirements
of this subsection, all Transferred Accounts shall be subject to the
general provisions of the Plan applicable to the type of account to which
they would have been credited had the amounts initially been contributed to
this Plan.
(c) Vesting. All Transferred Accounts shall be 100%
nonforfeitable, subject to valuation adjustment.
(d) Special In-Service Hardship Distribution Provisions. All
Transferred Accounts from the plans listed below shall be available for in-
service distribution for hardship in accordance with the Plan's general
rules applicable to distributions under subsection 10(a)(ii) but subject to
spousal consent requirements, if applicable, under
63
subsection 15(i)(vi):
Acetylene Gas Company Retirement Plan.
Carbonic Industries Corporation 401(k) Plan.
Ia-Tech Sales Co. 401(k) Profit Sharing Plan.
National Welding Supply Co. 401(k) Salary Reduction Plan.
Industrial Gas Products & Supply, Inc. Profit Sharing
Plan.
(e) Special In-Service Age 59-1/2 Distribution Provisions. All
Transferred Accounts from the plans listed below shall be eligible for in-
service distributions in accordance with the Plan's rules applicable to
distributions under subsection 10(a)(iii) but subject to spousal consent
requirements, if applicable, under subsection 15(i)(vi):
Acetylene Gas Company Retirement Plan.
Carbonic Industries Corporation 401(k) Plan.
National Welding Supply Co. 401(k) Salary Reduction Plan.
Rutland Tool & Supply Co., Inc. Profit Sharing/401(k)
Plan.
(f) Special In-Service Age 55 Distribution Provision.
A Member with a Transferred Account consisting of employer contributions and
earnings thereon from the Industrial Gas Products & Supply, Inc. Profit
Sharing Plan shall be eligible for an in-service distribution from such
Transferred Account in accordance with the Plan's rules applicable to
distributions under subsection 10(a)(iii).
(g) Installment Settlement. All
Transferred Accounts from the plans listed below may, at the election of
the Member, but subject to spousal consent requirements, if applicable,
under section 15(i)(vi) be distributed by payment in monthly, quarterly or
annual installments over a fixed reasonable period of time, not exceeding
the life expectancy of the Member, or the joint life and last survivor
expectancy of the Member and his beneficiary. Distributions under this
subsection shall be subject to the minimum distribution requirements of
64
section 401(a)(9) of the Code and the regulations thereunder, including the
minimum distribution incidental death benefit requirement:
Acetylene Gas Company Retirement Plan.
Carbonic Industries Corporation 401(k) Plan.
Ia-Tech Sales Co. 401(k) Profit Sharing Plan.
Rutland Tool & Supply Co., Inc. Profit Sharing/401(k)
Plan.
Kendeco Supply Co., Inc. Profit Sharing & 401(k)
Plan.
Industrial Gas Products & Supply, Inc. Profit Sharing
Plan.
(h) Limitations on In-Service Distributions.
The portion of each Member's Transferred Account
attributable to "qualified nonelective contributions" and "qualified
matching contributions" (within the meaning of the regulations under the
Code), if any, shall not be available for any in-service distribution
otherwise permitted under the Plan.
(i) Annuity Settlements. A Member's
Transferred Account from the plans listed below may be distributed in a
form of annuity settlement permitted under subsection 15(i)(vi) and shall
be subject to the distribution limitations and special rules set forth
below:
Acetylene Gas Company Retirement Plan.
Carbonic Industries Corporation 401(k) Plan.
Ia-Tech Sales Co. 401(k) Profit Sharing Plan.
National Welding Supply Co. 401(k) Salary Reduction Plan.
Rutland Tool & Supply Co., Inc. Profit Sharing/401(k)
Plan.
Langdon Oxygen Company, Inc. Employees 401(k) Profit
Sharing Plan.
Kendeco Supply Co., Inc. Profit Sharing & 401(k) Plan.
A Member's Transferred Account from the Carbonic Industries Corporation
401(k) Plan shall be subject to the spousal consent requirements of this
subsection 15(i) only if the Member is
65
married as described in subsection
15(i)(i) and elects an annuity form of settlement other than a joint and
survivor annuity with his spouse as at least a 50% contingent annuitant, in
which case this subsection 15(i) shall only apply to such election.
(i) Married Member. If (A) a Member is
married to his then spouse for at least one year on the date on which
benefit payments are to commence and (B) his nonforfeitable Accrued Benefit
exceeds $5,000, his Transferred Account will be distributed in the form of
a joint and survivor annuity with his spouse as survivor annuitant, with
the survivor annuity in an amount not less than 50% or more than 100% of
the amount payable to the Member, unless the Member, with the written
consent of his spouse witnessed by a notary public or an authorized Plan
representative in a manner prescribed by the Committee, elects a straight
life annuity for his life or an alternate form of settlement permitted by
the Plan. Further, no total or partial distribution of a Member's
Transferred Account may be made after the annuity starting date where the
present value of the Member's Accrued Benefit immediately before the
annuity starting date exceeds $5,000 unless the Member and his spouse (or
where the Member has died, the surviving spouse) consent in writing
witnessed by a notary public or a representative of the Plan in a manner
prescribed by the Committee prior to such distribution. The Committee
shall furnish to such Member a written notification of the availability of
the election hereunder at least 90 days before the Member's anticipated
benefit commencement date or, if a Member notifies the Committee of his
intent to terminate employment less than 90 days before the proposed
benefit commencement date, as soon after the Member notifies the Committee
as is administratively feasible. The notification shall explain the terms
and conditions of the joint and survivor annuity described above and the
effect of electing not to take such annuity. The Member may, within a
period of 90 days after receipt of the written notification or such longer
period as the Committee may uniformly make available, complete the
election. The Member may revoke an election not to
66
take the joint and survivor annuity described above or choose again to take
such annuity at any time and any number of times within the applicable
election period. If a Member requests additional information within 60 days
after receipt of the notification of election, the minimum election period
shall be extended an additional 60 days following his receipt of such
additional information.
(ii) Single Member. If (A) a Member is
single or has not been married to his then spouse for at least one year on
the date on which benefit payments are to commence and (B) his
nonforfeitable Accrued Benefit exceeds $5,000, benefits will be distributed
in the form of a straight life annuity for the Member's life unless the
Member elects an alternate form of settlement permitted by the Plan in
accordance with the election procedures described in subsection (i) above.
(iii) Annuity Purchases. If
benefits are to be paid in a form of an annuity, the Committee shall direct
the Trustee to apply the Member's Transferred Account to purchase an
appropriate nontransferable annuity contract and to deliver it to the
Member.
(iv) Spousal Death Benefit. If the
Member's beneficiary is the Member's surviving spouse, the Member's
Transferred Account shall be used to purchase a straight life annuity for
the spouse's life commencing as soon after the Member's date of death as is
administratively feasible unless the spouse elects a lump sum settlement or
approximately equal installment payments over the spouse's life expectancy
(or a specified shorter period) commencing not later than the date on which
the Member would have attained age 70-1/2 or, if later, as soon after the
Member's date of death as is administratively feasible.
(v) Special Beneficiary Designation Provisions.
Notwithstanding subsection 7(a), if a married Member designates a beneficiary
other than his
67
spouse for his Transferred Accounts, such designation shall not be valid
(i) unless the spouse consents thereto in writing witnessed by a notary public
or authorized representative of the Plan and (ii) the Member attained age 35
on or before the first day of the Plan Year in which the spouse waived the
benefit. Further, the Committee shall provide to the Member within the
"applicable period" a written explanation of the terms and conditions of
the death benefit described above and the rights of the Member's spouse
with respect to the designation of an alternate beneficiary. For purposes
of this subsection "applicable period" shall mean whichever of the
following periods ends last:
(A)the period beginning with the first day of the
Plan Year in which the Member attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Member attains age 35;
(B)a reasonable period after the Member commences
participation in the Plan; or
(C)in the case of a Member who separates from
service before attaining age 35, the period beginning one year before and
ending one year after such separation from service.
(vi) Alternate Forms of Settlement.
Subject to the spousal consent requirements described above, a
Member may elect that his Transferred Account be distributed in the form of
a lump sum settlement as provided under the Plan, in installments if
available under subsection 15(h) or in the form of a joint and survivor
annuity or period certain and life annuity with a contingent annuitant
other than his spouse. Distributions under this subsection shall be
subject to the minimum distribution requirements of section 401(a)(9) of
the Code and the regulations thereunder, including the minimum distribution
incidental death benefit requirement.
(vii) Loans and In-Service Distributions.
68
A married Member may not either pledge his
Transferred Account as security for a loan from the Plan or receive an in-
service distribution from his Transferred Account, in accordance with the
generally applicable rules of the Plan and the special provisions of this
Section 15, without the prior written consent of his spouse witnessed by a
notary public or authorized Plan representative in a manner prescribed by
the Committee.
69
16. PARTICIPATION BY RELATED ENTITIES
(a) Commencement. Any entity which is a Related
Entity with respect to the Company shall be deemed to adopt this Plan and
the accompanying Trust Agreement effective as of the date the Committee
permits its Employees to make contributions under subsection 4(a).
(b) Termination. The Company may, by action of
the Board of Directors, determine at any time that any such Participating
Company shall cease participation in the Plan or withdraw and establish a
separate plan and fund. And such withdrawal shall be effected by a duly
executed instrument delivered to the Trustee instructing the Trustee to
segregate the assets of the Fund allocable to the Employees of such
Participating Company and pay them over to the separate fund. The
participation of any Participating Company and its Employees shall
automatically cease when such Participating Company ceases to be a Related
Entity unless the Committee expressly provides to the contrary. If a
Participating Company's participation in this Plan terminates for any
reason, the Accrued Benefits of Members employed by it shall be retained in
the Plan unless the Committee otherwise directs, subject to the Plan's
generally applicable benefit distribution provisions.
(c) Single Plan. The Plan shall at all times be
administered and interpreted as a single plan for the benefit of the
Employees of all Participating Companies.
(d) Delegation of Authority. Each
Participating Company hereby acknowledges that the Company has all the
rights and duties thereof under the Plan and the Trust Agreement, including
the right to amend the same.
70
17. TOP-HEAVY REQUIREMENTS
(a) General Rule. For any Plan Year in which the
Plan is a top-heavy plan or included in a top-heavy group, as determined
under subsection 17(b), the special requirements of this Section shall
apply to Members not covered by a collective bargaining agreement.
(b) Calculation of Top-Heavy Status.
The Plan shall be a top-heavy plan (if it is not included in an
"aggregation group") or a plan included in a top-heavy group (if it is
included in an "aggregation group") with respect to any Plan Year if the
sum as of the "determination date" of the "cumulative accounts" of "key
employees" for the Plan Year exceeds 60% of a similar sum determined for
all "employees," excluding "employees" who were "key employees" in prior
Plan Years only.
(c) Definitions. For purposes of this Section 17,
the following definitions shall apply to be interpreted in accordance with
the provisions of section 416 of the Code and the regulations thereunder.
(i) "Aggregation Group" shall mean the plans of a
Participating Company or a Related Entity included below within the
following categories:
(A)each such plan in which a "key employee" is a
participant including a terminated plan in which a "key employee" was a
participant within the five-years ending on the "determination date";
(B)each other such plan which enables any plan in
subsection (A) above to meet the requirements of section 401(a)(4) or 410
of the Code; and
(C)each other plan not required to be included in
the "aggregation group" which the Company elects to include in the
"aggregation group" in accordance with the "permissive aggregation group"
rules of the Code if such group would
71
continue to meet the requirements of sections 401(a) and 410 of the Code
with such plan being taken into account.
(ii) "Cumulative Account" for any "employee" shall mean
the sum of the amount of his accounts under this Plan plus all defined
contribution plans included in the "aggregation group" (if any) as of the
most recent valuation date for each such plan within a twelve-month period
ending on the "determination date," increased by any contributions due
after such valuation date and before the "determination date" plus the
present value of his accrued benefit under all defined benefit pension
plans included in the "aggregation group" (if any) as of the "determination
date." For a defined benefit plan, the present value of the accrued
benefit as of any particular "determination date" shall be the amount
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Participating Companies and all
Related Entities, or (B) if there is no such method, as if such benefit
accrued not more rapidly than under the slowest accrual rate permitted
under the fractional accrual rule of section 411(b)(1)(C) of the Code, as
of the most recent valuation date for the defined benefit plan, under
actuarial equivalent factors specified therein, which is within a twelve-
month period ending on the "determination date." For this purpose, the
valuation date shall be the date for computing plan costs for purposes of
determining the minimum funding requirement under section 412 of the Code.
"Cumulative accounts" of "employees" who have not performed services for
any Participating Company or a Related Entity for the five-year period
ending on the "determination date" shall be disregarded. An "employee's"
"cumulative account" shall be increased by the aggregate distributions
during the five-year period ending on the "determination date" made with
respect to him under any plan in the aggregation group. Rollovers and
direct plan-to-plan transfers to this Plan or to a plan in the "aggregation
group" shall be included in an "employee's" "cumulative account" unless the
transfer is initiated by the "employee" and made from a plan maintained by
an employer which is not a Participating
72
Company or a Related Entity.
(iii)"Determination Date" shall mean with respect to any
Plan Year the last day of the preceding Plan Year.
(iv) "Employee" shall mean any person (including a
beneficiary thereof) who has or had an accrued benefit held under this Plan
or a plan in the "aggregation group" including this Plan at any time during
the current or any one of the four preceding Plan Years. Any "employee"
other than a "key employee" described in subsection 17(c)(v) shall be
considered a "non-key employee" for purposes of this Section 17.
(v) "Key Employee" shall mean any "employee" or former
"employee" (including a beneficiary thereof) who is, at any time during the
Plan Year, or was, during any one of the four preceding Plan Years any one
or more of the following:
(A)an officer of a Participating Company or a
Related Entity whose compensation (as defined in subsection 5(d)) exceeds
50% of the dollar limitation in effect under section 415(b)(1)(A) of the
Code, unless 50 other such officers (or, if lesser, a number of such
officers equal to the greater of three or 10% of the "employees") have
higher annual compensation;
(B)one of the ten persons employed by a
Participating Company or a Related Entity both having annual compensation
(as defined in subsection 5(d)) greater than the limitation in effect under
section 415(c)(1)(A) of the Code, and owning (or considered as owning
within the meaning of section 318 of the Code) the largest interests (but
at least more than a 0.5% interest) in the Participating Companies and all
Related Entities. For purposes of this subsection (B), if two "employees"
have the same interest, the one with the greater compensation shall be
treated as owning the larger interest;
73
(C)any person owning (or considered as owning
within the meaning of section 318 of the Code) more than 5% of the
outstanding stock of all Participating Companies or Related Entities or
stock possessing more than 5% of the total combined voting power of such
stock;
(D)a person who would be described in subsection
(C) above if 1% were substituted for 5% each place the same appears in
subsection (C) above, and who has annual compensation of more than
$150,000.
For purposes of determining ownership under this subsection, section
318(a)(2)(C) of the Code shall be applied by substituting 5% for 50%.
(d) Combined Benefit Limitation.
For purposes of the calculation of the combined limitation of subsection
5(c), "1.0" shall be substituted for "1.25" each place the same appears in
that subsection.
(e) Vesting. The Member's Accrued Benefit shall be
nonforfeitable.
(f) Minimum Contribution. Minimum
Participating Company contributions for a Member who is not a "key
employee" shall be required in an amount equal to the lesser of 3% of
compensation (as defined in subsection 5(d)) or the highest percentage of
such compensation limited to $150,000 (or an increased amount resulting
from a cost of living adjustment under section 415(d) of the Code)
contributed for any "key employee" under subsections 4(a) and 4(d). For
purposes of meeting the minimum contribution requirement, employer social
security contributions and elective contributions on behalf of "employees"
other than "key employees" shall be disregarded. Each "non-key employee"
of a Participating Company who has not separated from service at the end of
the Plan Year and who has satisfied the eligibility requirements of
subsection 3(a) shall receive any minimum contribution provided under this
Section 17 without regard to (i) whether he is credited with 1,000 Hours of
Service in the Plan Year, (ii) earnings level for the Plan Year or (iii)
74
whether he elects to make contributions under subsection 4(a). If an
"employee" participates in both this Plan and another defined contribution
plan maintained by a Participating Company or a Related Entity, the minimum
benefit shall be provided under the other plan. Furthermore, if an
"employee" participates in both this Plan and a defined benefit plan
maintained by a Participating Company or a Related Entity, the minimum
benefit shall be provided under the defined benefit plan.
75
18. MISCELLANEOUS
(a) Incapacity. If the Committee receives a copy
of a certified court order, or other binding legal certification, that a
person entitled to receive any benefit payment is under a legal disability
or is incapacitated in any way so as to be unable to manage his financial
affairs, the Committee shall direct that payments be made to such person's
legally appointed guardian or other representative. Any payment of a
benefit in accordance with the provisions of this subsection shall be a
complete discharge of any liability to make such payment.
(b) Reversions. In no event, except as provided
herein, shall the Trustee return to a Participating Company any amount
contributed by it to the Plan.
(i) Mistake of Fact. In the case of a contribution
made by a good faith mistake of fact, the Trustee shall return the
erroneous portion of the contribution, without increase for investment
earnings, but with decrease for investment losses, if any, within one year
after payment of the contribution to the Fund.
(ii) Deductibility. To the extent deduction of any
contribution determined by the Company to be deductible is disallowed, the
Trustee shall return that portion of the contribution, without increase for
investment earnings but with decrease for investment losses, if any, for
which deduction has been disallowed within one year after the disallowance
of the deduction.
(iii)Limitation. No return of contribution shall be
made under this subsection which adversely affects the Plan's qualified
status under regulations, rulings
or other published positions of the Internal Revenue Service or reduces a
Member's Accrued
Benefit below the amount it would have been had such contributions not been
made.
(iv) Compliance Refunds. This subsection shall not
preclude refunds made in accordance with subsection 4(b)(i), 4(d)(ii),
4(g)(ii), 4(j)(iii) or 5(a).
(c) Employee Data. The Committee, the Trustee
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or the Administrator may require that each Employee provide such data as it
deems necessary upon his becoming a Member in the Plan. Each Employee,
upon becoming a Member, shall be deemed to have approved of and to have
acquiesced in each and every provision of the Plan for himself, his
personal representatives, distributees, legatees, assigns, and
beneficiaries.
(d) In Writing Requirement. Unless
otherwise required by law, a requirement that a transaction or consent
under the Plan be "in writing" may, at the discretion of the Plan
Administrator, be effected through an interactive telephone system or by
other types of electronic communication.
(e) Doubt as to Right to Payment.
In the event that at any time any doubt exists as to the right of any
person to any payment hereunder or the amount or time of such payment
(including, without limitation, any case of doubt as to identity, or any
case in which any notice has been received from any other person claiming
any interest in amounts payable hereunder, or any case in which a claim
from other persons may exist by reason of community property or similar
laws), the Committee shall be entitled, in its discretion, to direct the
Trustee to hold such sum as a segregated amount in trust until such right
or amount or time is determined or until order of a court of competent
jurisdiction, or to pay such sum into court in accordance with appropriate
rules of law in such case then provided, or to make payment only upon
receipt of a bond or similar indemnification (in such amount and in such
form as is satisfactory to the Committee).
(f) Inability to Locate Distributee.
Notwithstanding any other provision of the Plan, in the event
that the Committee cannot locate any person to whom a payment is due under
this Plan, the benefit in respect of which such payment is to be made shall
be forfeited at such time as the Committee shall determine in its sole
discretion (but in all events prior to the time such benefit would
otherwise escheat under any applicable state law); provided, that such
benefit shall be reinstated if such person subsequently makes a valid claim
for such benefit.
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(g) Estoppel of Members and Their Beneficiaries.
The Participating Companies, Committee
and Trustee may rely upon any certificate, statement or other
representation made to them by any Employee, Member or beneficiary with
respect to age, length of service, leave of absence, date of cessation of
employment, marital status, or other fact required to be determined under
any other provisions of this Plan, and shall not be liable on account of
the payment of any moneys or the doing of any act in reliance upon any such
certificate, statement or other representation. Any such certificate,
statement or other representation made by an Employee or Member shall be
conclusively binding upon such Employee or Member and his beneficiary, and
such Employee, Member or beneficiary shall thereafter and forever be
estopped from disputing the truth and correctness of such certificate,
statement or other representation. Any such certificate, statement or
other representation made by a Member's beneficiary shall be conclusively
binding upon such beneficiary and such beneficiary shall thereafter and
forever be estopped from disputing the truth and correctness of such
certificate, statement or other representation.
(h) Law Governing. This Plan shall be
construed, administered and applied in a manner consistent with the laws of
the Commonwealth of Pennsylvania where those laws are not superseded by
federal law.
(i) Pronouns. The use of the masculine pronoun shall
be extended to include the feminine gender wherever appropriate.
(j) Interpretation. The Plan is a profit
sharing plan including a qualified, tax exempt trust under sections 401(a)
and 501(a) of the Code and a qualified cash
or deferred arrangement under section 401(k)(2) of the Code. The Plan
shall be interpreted
78
in a manner consistent with its satisfaction of all requirements of the
Code applicable to such a plan.
IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by
the Company, it has caused the same to be signed by its officers thereunto
duly authorized, and its corporate seal to be affixed hereto, this 20th
day of August, 1999.
AIRGAS, INC.
Attest:
/S/ Todd R. Craun By: /S/ Scott M. Melman
Todd R. Craun Scott M. Melman
General Counsel and Secretary Vice President,
Chief Financial Officer
(Corporate Seal)