AVONDALE INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Amended and Restated Effective January 1,
1989)
AVONDALE INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
Article Contents Section
I. DEFINITIONS
Accounts 1.1
Affiliated Company 1.2
Beneficiary 1.3
Board of Directors 1.4
Code 1.5
Committee 1.6
Company 1.7
Company Stock 1.8
Compensation 1.9
Disability 1.10
Disability Retirement Date 1.11
Early Retirement Date 1.12
Employee 1.13
Employer 1.14
Employer Contribution 1.15
Entry Date 1.16
ERISA 1.17
Exempt Loan 1.18
Highly Compensated Employee 1.19
Hour of Service 1.20
Investment Manager 1.21
Named Fiduciary 1.22
Non-Highly Compensated Employee 1.23
Non-Participating Employer 1.24
Normal Retirement Age 1.25
Normal Retirement Date 1.26
One Year Break In Service 1.27
Parental Absence 1.28
Participant 1.29
Plan 1.30
Plan Year 1.31
Post-1986 Company Stock 1.32
Service Termination Date 1.33
Suspense Account 1.34
Trust or Trust Agreement 1.35
Trustee 1.36
Trust Fund 1.37
Valuation Date 1.38
Vested Interest 1.39
Year of Service 1.40
II. PARTICIPATION
Commencement of Participation 2.1
Termination of Participation 2.2
Participation Following Reemployment 2.3
III. CONTRIBUTIONS
Employer Contributions 3.1
No Employee Contributions 3.2
Time of Payment of Contribution 3.3
For Exclusive Benefit of Participants 3.4
and Beneficiaries
Reversion 3.5
IV. VESTING
Retirement, Death or Disability 4.1
Other Termination 4.2
Forfeitures 4.3
Reemployment 4.4
V. ALLOCATIONS AND ACCOUNTING
Participant Accounts 5.1
Special Definitions for Article V 5.2
Allocation of Employer Contributions 5.3
and Forfeitures
Allocation of Cash Dividends on 5.4
Company Stock
Stock Dividends, Splits, Recapitaliza- 5.5
tions, Etc.
Allocation of Earnings and Losses 5.6
Accounting Procedures 5.7
Valuation Procedures 5.8
Suspense Account 5.9
Release from Suspense Account 5.10
Limitations on Allocations to 5.11
Certain Participants
Limitations on Annual Additions 5.12
VI. BENEFITS
Normal Retirement Date 6.1
Early Retirement Date 6.2
Disability Retirement Date 6.3
Nonalienation of Benefits 6.4
Qualified Domestic Relations Order 6.5
VII. PAYMENT OF BENEFITS
Time of Payment 7.1
Optional Forms of Payment 7.2
Normal Form of Payment of Benefits 7.3
Waiver of Normal Form and Election 7.4
of Optional Form of Payment
Small Amounts 7.5
Temporary Non-Payment of Benefits 7.6
Manner of Payment 7.7
Direct Rollover Rules 7.8
Notice 7.9
VIII. TRUST FUND
Plan Assets 8.1
Investment of Trust Fund 8.2
Company Not Responsible For Adequacy Of 8.3
Trust Fund
Legal Limitation 8.4
Exempt Loans 8.5
IX. ADMINISTRATION
Board of Directors 9.1
ESOP Administrative Committee 9.2
Committee's Duties and Responsibilities 9.3
Committee's Powers 9.4
Chairman of the Committee 9.5
Claims Review Procedure 9.6
Information from Participants 9.7
and Beneficiaries
Actions 9.8
Bond 9.9
Indemnification 9.10
X. RIGHTS AND OPTIONS CONCERNING
COMPANY STOCK
Restrictions on Company Stock 10.1
Right of First Refusal 10.2
Put Option 10.3
Exercise of Voting Rights 10.4
Tender Offer 10.5
Investment Diversification 10.6
XI. AMENDMENT OF THE PLAN
Right to Amend or Suspend Contributions 11.1
Amendment by Committee 11.2
Restriction on Amendment 11.3
Retroactivity 11.4
XII. TERMINATION OF THE PLAN
Events Constituting Termination 12.1
Partial Termination 12.2
Liquidation of the Trust Fund 12.3
Internal Revenue Service Approval for 12.4
Distribution
XIII. TOP HEAVY PROVISIONS
Top Heavy Plan 13.1
Definitions for Article XIII 13.2
Vesting 13.3
Minimum Contribution 13.4
Limitations on Contributions 13.5
Other Plans 13.6
XIV. GENERAL PROVISIONS
Plan Voluntary 14.1
Payments to Minors and Incompetents 14.2
Missing Payee 14.3
Required Information 14.4
Subject to Trust Agreement 14.5
Subject to Contract 14.6
Communications to Committee 14.7
Communications from Employer 14.8
or Committee
Transfers and Rollovers 14.9
Action 14.10
Liability for Benefits 14.11
Named Fiduciary 14.12
Gender 14.13
Captions 14.14
Applicable Law 14.15
Expenses 14.16
TAX\3271.2
PREAMBLE
Avondale Industries, Inc. originally established the
Avondale Industries, Inc. Employee Stock Ownership Plan effective
September 1, 1985, which plan and the amendments thereto made
through December 31, 1988, shall hereinafter be referred to as
the "Prior Plan". The Avondale Industries, Inc. Employee Stock
Ownership Plan was amended and restated effective January 1,
1989, unless otherwise provided herein, as set forth in this
document and in the Trust adopted as part of this Plan, to comply
with the Tax Reform Act of 1986 and subsequent legislation
hereinafter referred to as the "Plan". The Plan is the
continuation of the Prior Plan and no gap in time or effect
exists, or shall ever be construed to exist, between them.
The purpose of the Plan, as revised and restated, is to
encourage employees to make and continue careers with Avondale
Industries, Inc. and certain related employers by allowing
employees to obtain beneficial interests in the common stock of
Avondale Industries, Inc., to provide an effective means for
employees to accumulate funds for their own retirement, and to
enable employees to share in the appreciation and depreciation of
the common stock of Avondale Industries, Inc. accumulated by the
Plan. The Plan is designed to invest primarily in common stock
of Avondale Industries, Inc.
The Plan and its related Trust are intended to qualify as an
employee stock ownership plan and trust under Sections 401(a),
501(a) and 4975(e)(7) of the Internal Revenue Code of 1986, as
amended.
TAX\3271.2
ARTICLE I
DEFINITIONS
All capitalized terms used in this Plan shall have the
meaning set forth in this Article I, unless a different meaning
is plainly required by the context:
1.1 Accounts shall mean a Participant's Company Stock
Account and Investment Account (including any subaccounts
established from time to time under each such Account)
established and maintained to record the interest of a
Participant in the Trust Fund as more fully described in Section
5.1.
1.2 Affiliated Company shall mean any corporation which is
a member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which includes the Company; any trade
or business (whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with the
Company; any organization (whether or not incorporated) which is
a member of an affiliated service group (as defined in Section
414(m) of the Code) which includes the Company; and any other
entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code.
1.3 Beneficiary shall mean the person or persons designated
by a Participant to receive the amount, if any, payable under the
Plan in the event of the Participant's death. Each Beneficiary
designation shall be in the form prescribed by the Committee.
If the Participant is married and designates someone other
than his legal spouse, his Beneficiary designation must include
the written consent of his spouse at the time the designation is
made. Such written consent must approve the Beneficiary
designated and acknowledge the effect of such designation and
must be notarized by a notary public. If it is established to
the satisfaction of the Committee that the Participant has no
spouse or that the spouse's consent cannot be obtained because
the spouse cannot be located, or because of such other
circumstances as may be prescribed in regulations issued pursuant
to Section 417 of the Code, such written consent shall not be
required.
If no valid beneficiary designation is in effect at the time
of the Participant's death, then, to the extent, if any, benefits
are payable under the Plan after such death, Beneficiary shall
mean the Participant's legal spouse, if he is married at the time
of his death, or otherwise the Participant's estate.
1.4 Board of Directors shall mean the Board of Directors of
Avondale Industries, Inc.
1.5 Code shall mean the Internal Revenue Code of 1986, as
amended from time to time. Reference to any Section of the Code
shall include any successor provision thereto.
1.6 Committee shall mean the ESOP Administrative Committee
designated by the Company to administer the Plan in accordance
with Section 9.2.
1.7 Company shall mean Avondale Industries, Inc. and any
successor company that may continue the Plan.
1.8 Company Stock shall mean:
(a) shares of any class of stock issued by the Company
(or by a corporation which is a member of the same
controlled group within the meaning of Section
409(l) of the Code which is readily tradeable on
an established securities market.
(b) If there is no Company Stock which meets the
requirements of Paragraph (a) above, the term
"Company Stock" means common stock issued by the
Company (or by a corporation which is a member of
the same controlled group within the meaning of
Section 409(l) of the Code having a combination of
voting power and dividend rights equal to or in
excess of:
(i) that class of company stock of the Company
(or of any other such corporation) having the
greatest voting power, and
(ii) that class of common stock of the Company (or
of any other such corporation) having the
greatest dividend rights.
1.9 Compensation shall mean the total annual salary, wages
and other cash compensation paid to an Employee by a
Participating Employer including any amount which such Employee
elects to have the Employer contribute to a qualified plan under
Section 401(k) or Section 125 of the Code, but does not include
imputed income or other non-cash compensation, severance pay,
compensation which arises through a payment to an Employee as
part of a relocation program or moving expense, reimbursed
expenses, any contribution to, or benefit from this Plan or any
other pension plan, profit-sharing plan or employee benefit plan
maintained by a Participating Employer, including any
contribution to, or benefit from, the Performance Share Plan or
the Stock Appreciation Plan. Only Compensation for the period of
time during which the Employee is a Participant shall be
considered.
Effective January 1, 1989, the Compensation of any Employee
for a Plan Year shall be limited to $200,000, as adjusted from
time to time in accordance with Section 401(a)(17) of the Code.
For years beginning on or after January 1, 1994, a Participant's
annual Compensation taken into account under the Plan for any
Plan Year shall not exceed $150,000, as adjusted from time to
time in accordance with Section 401(a)(17) of the Code. In
determining the Compensation of a Participant for purposes of
this limitation, the rules of Code Section 414(q)(6) shall apply,
except in applying these rules, "family" will include only the
Participant's spouse and any lineal descendants of the
Participant who have not attained age 19 before the close of the
year. If, as a result of the application of these rules the
adjusted $150,000 (prior to December 31, 1993, $200,000) limit is
exceeded then the limit will be prorated among the affected
individuals determined under this section before this limit is
applied.
1.10 Disability of a Participant shall mean the total and
permanent incapacity of a Participant to engage in any
substantial gainful employment, as determined by the Committee,
and which qualifies him for commencement of benefits for
permanent and total disability under Federal Old Age and Survivor
Insurance.
1.11 Disability Retirement Date shall have the meaning set
forth in Section 6.3.
1.12 Early Retirement Date shall have the meaning set forth
in Section 6.2.
1.13 Employee shall mean a person employed by a
Participating Employer or Non-Participating Employer, excluding
any employee who is included in a unit of employees covered by a
negotiated collective bargaining agreement which does not provide
for his participation in the Plan. A director of the Company is
not eligible for participation in the Plan unless he is also an
Employee. A leased employee as described in Section 414(n)(2) of
the Code, shall be considered an Employee but shall not be
considered a Participant under this Plan; provided, however, that
any leased employee who subsequently becomes a Participant shall
have his previous service as a leased employee used in
calculating his Years of Service under the Plan.
1.14 Employer shall mean the Company, Avondale Services
Corporation, and any Affiliated Company, subsidiary or related
entity that adopts this Plan pursuant to authorization by the
Board of Directors of the Company and the board of directors of
the newly-adopting entity. The list of Employers and the date
such Employers adopted the Plan shall be contained in Appendix A.
A "Participating Employer" shall mean an entity, including the
Company, included in this definition of Employer.
By authorizing the adoption of this Plan, the governing body
of any Participating Employer expressly recognizes and delegates
to the Company and its Board of Directors the right to exercise
on the behalf of the Participating Employer all power and
authority conferred by the Plan to the Company or its Board of
Directors.
1.15 Employer Contribution shall mean a contribution by an
Employer to the Trust Fund as described in Section 3.1.
1.16 Entry Date shall mean the first day of each month.
1.17 ERISA shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time. References
to any section of ERISA include any successor provision thereto.
1.18 Exempt Loan means a loan (or other credit arrangement)
incurred for the purpose of acquiring Employer Stock which is
(a) extended to the Plan from a disqualified person, or
(b) extended to the Plan from a third party and is guaranteed or
collateralized by a disqualified person, provided such loan or
arrangement qualifies under the provisions of Code Section
4975(d)(3) of the Code and satisfies the conditions of Section
8.5.
1.19 Highly Compensated Employee means any highly
compensated active employee and any highly compensated former
employee as described in this Section 1.19.
A highly compensated active employee includes any employee
who performs service for the employer during the determination
year and who, during the look-back year: (i) received
compensation from the employer in excess of $75,000 (as adjusted
pursuant to section 415(d) of the Code); (ii) received
compensation from the employer in excess of $50,000 (as adjusted
pursuant to section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the
employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect under
section 415(b)(1)(A) of the Code. The term highly compensated
employee also includes: (i) employees who are both described in
the preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the employee is one
of the 100 employees who received the most compensation from the
employer during the determination year; and (ii) employees who
are 5 percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year,
the highest paid officer for such year shall be treated as a
highly compensated employee.
For purposes of this Section 1.19, the determination year
shall be the Plan Year. The look-back year shall be the twelve-
month period immediately preceding the determination year.
A highly compensated former employee includes any employee
who separated from service (or was deemed to have separated)
prior to the determination year, performs no service for the
employer during the determination year, and was a highly
compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th
birthday.
If an employee is, during a determination year or look-back
year, a family member of either a 5 percent owner who is an
active or former employee or a highly compensated employee who is
one of the 10 most highly compensated employees ranked on the
basis of compensation paid by the employer during such year, then
the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the
family member and 5 percent owner or top-ten highly compensated
employee shall be treated as a single employee receiving
compensation and plan contributions or benefits equal to the sum
of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated
employee. For purposes of this paragraph, family member includes
the spouse, lineal ascendants and descendants of the employee or
former employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a highly compensated employee,
including the determinations of the number and identity of
employees in the top-paid group, the top 100 employees, and
number of employees treated as officers and the compensation that
is considered, will be made in accordance with Section 414(q) of
the Code and the Regulations thereunder.
For purposes of this Section 1.19, the term "employer" means
the Company and any Affiliated Company.
1.20 Hour of Service shall mean:
(a) Each hour for which an Employee is directly or
indirectly paid or entitled to payment by a
Participating Employer or Non-Participating
Employer for the performance of duties, including
periods of vacation and holidays;
(b) Each hour for which an Employee is directly or
indirectly paid or entitled to payment by a
Participating Employer or Non-Participating
Employer (including payments made or due from a
trust fund or insurer to which the Participating
Employer or Non-Participating Employer contributes
or pays premiums) on account of a period of time
during which no duties are performed (irrespective
of whether the employment relationship has
terminated) due to illness, incapacity,
disability, layoff, jury duty, military duty, or
leave of absence, provided that:
(i) no more than 501 Hours of Service shall be
credited under this paragraph (b) to an
Employee on account of any single continuous
period during which the Employee performs no
duties; and
(ii) Hours of Service shall not be credited under
this paragraph (b) to an Employee for a
payment which solely reimburses the Employee
for medically related expenses incurred by
the Employee or which 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;
(c) Each hour not already included under paragraph (a)
or (b) above for which back pay, irrespective of
mitigation of damages, is either awarded or agreed
to by such Employer, provided that crediting of
Hours of Service under this paragraph (c) with
respect to periods described in paragraph (b)
above shall be subject to the limitation therein
set forth; and
The number of Hours of Service to be credited under
paragraph (b) or (c) above on account of a period during which an
Employee performs no duties, and the Plan Years to which Hours of
Service shall be credited under paragraphs (a), (b) or (c) above
shall be determined by the Committee in accordance with Sections
2530.200b-2(b) and (c) of the Regulations of the U.S. Department
of Labor.
To the extent not credited above, Hours of Service will also
be credited based on the customary work week of the Employee for
periods of military duty (as required by applicable law) and
approved leaves of absence.
1.21 Investment Manager shall mean the individual,
individuals or institution appointed by the Committee to direct
the investment of all or a part of the assets of the Trust Fund
other than Company Stock. Such Investment Manager must:
(a) be (i) registered in good standing under the
Investment Advisors Act of 1940; or (ii) a bank as
defined in such Act; or (iii) an insurance company
qualified to perform investment management
services under the laws of more than one State of
the United States; and
(b) acknowledge in writing its status as a Named
Fiduciary under the Plan.
1.22 Named Fiduciary under the Plan shall mean the Employer,
the Committee, the Trustee, the Investment Manager, if any, and
any other person or entity described in Section 3(21) of ERISA
with respect to the Plan.
1.23 Non-Highly Compensated Employee shall mean an Employee
who is not a Highly Compensated Employee.
1.24 Non-Participating Employer shall mean an Affiliated
Company, subsidiary or related entity which is not participating
in the Plan or which is no longer participating in the Plan by
reason of the recision of a prior designation of participation by
the Board of Directors or the board of directors of the Non-
Participating Employer.
1.25 Normal Retirement Age shall mean age 65 or, if later, a
Participant's fourth anniversary of commencement of participation
in the Plan.
1.26 Normal Retirement Date shall have the meaning set forth
in Section 6.1.
1.27 One Year Break In Service shall mean a 12-month
consecutive period following an Employee's Service Termination
Date, as defined in paragraph 1.33, during which the Employee
fails to be credited with an Hour of Service.
1.28 Parental Absence shall mean an Employee's absence from
work, on or after January 1, 1985, for any of the following
reasons: (i) the pregnancy of the Employee, (ii) the birth of
the Employee's child, (iii) the adoption of a child by the
Employee, or (iv) the need to care for the Employee's child
immediately following its birth or adoption. Provided, however,
that the Committee, in its sole discretion, may require evidence
that any absence is on account of a reason enumerated herein and
evidence as to the duration of such absence.
1.29 Participant shall mean (i) any Employee who satisfies
the participation requirements set forth in Article II, and
(ii) any former Employee on whose behalf an Account continues to
be maintained in the Plan pursuant to Article II.
1.30 Plan shall mean the Avondale Industries, Inc. Employee
Stock Ownership Plan, as set forth in this document and as
amended from time to time. The Plan is intended to qualify as a
stock bonus under Section 401(a) of the Code, and as an employee
stock ownership plan within the meaning of Section 4975(e)(7) of
the Code.
1.31 Plan Year shall mean the calendar year; provided,
however, that the first Plan Year shall mean the period from
September 1, 1985 to August 31, 1986; the second Plan Year shall
mean the period from September 1, 1986 to August 31, 1987; the
third Plan Year shall mean the period from September 1, 1987 to
August 31, 1988; the fourth Plan Year shall mean the period from
September 1, 1988 to December 31, 1988; and each twelve month
period beginning January 1, 1989 or any anniversary thereof.
1.32 Post-1986 Company Stock shall mean Company Stock
acquired by the Plan after December 31, 1986. The portion of a
Participant's Company Stock Account attributable to Post-1986
Company Stock shall be determined by separately accounting for
such shares and by tracing such shares acquired after
December 31, 1986 to the Company Stock Accounts of the various
Participants receiving allocations. Forfeitures of shares of
Company Stock shall retain their character as either Post-1986
Company Stock or other than Post-1986 Company Stock in the
Company Stock Accounts of the Participant to whom allocated even
though the allocation of the forfeiture may take place after
December 31, 1986.
1.33 Service Termination Date shall mean the earliest of the
following:
(a) the date on which an Employee resigns, is
discharged, retires or dies;
(b) the first anniversary of the date on which an
Employee is laid off, starts an authorized leave
of absence, or is absent from work for any other
reason (other than those instances covered under
paragraphs (a) and (c)), including holidays, paid
vacations, sick leaves and absence on account of
disability;
(c) the second anniversary of the date on which an
Employee commenced a Parental Absence, if such
Employee has not yet returned to work with a
Participating or Non-Participating Employer.
1.34 Suspense Account shall mean the account established
under Section 5.9 as part of the Trust Fund to hold Company Stock
purchased with the proceeds of an Exempt Loan pending the
allocation of such stock to the Company Stock Accounts of
Participants.
1.35 Trust or Trust Agreement shall mean the Avondale
Industries, Inc. Employee Stock Ownership Trust Agreement by and
between the Company and the Trustee as amended from time to time.
1.36 Trustee shall mean the individuals or institution
appointed by the Board of Directors to be Trustee under the Trust
Agreement.
1.37 Trust Fund shall mean all assets held by the Trustee in
accordance with this Plan and the Trust Agreement.
1.38 Valuation Date shall mean the last day of each calendar
quarter during the Plan Year or any other date during the Plan
Year specified by the Committee upon which the assets of the
Trust Fund are valued as described in Section 5.8. The Annual
Valuation Date shall mean the last day of the Plan Year.
1.39 Vested Interest shall mean the portion of a
Participant's Accounts which has become vested and
nonforfeitable.
1.40 Year of Service shall mean a 12-month period commencing
on the first day on which an Employee is credited with an Hour of
Service (or such Employee's date of rehire in the case of an
Employee who has not previously become a Participant and who has
incurred five or more consecutive One Year Breaks in Service) (or
such later date of participation as specified in Appendix A) or
anniversary thereof during which he is continuously employed by a
Participating Employer or Non-Participating Employer, provided
that:
(a) An Employee shall be credited with one Year of
Service for each 12 complete months of employment,
whether or not consecutive.
(b) An Employee shall cease accruing Years of Service
on his Service Termination Date; except that if
such Employee performs an Hour of Service within
the 12-month period commencing on his Service
Termination Date, his period of absence shall be
treated as employment.
(c) Years of Service shall include any one or more of
the following:
(i) any period of absence because of service in
the military forces of the United States,
provided the Employee returns to work within
90 days after first becoming eligible for
discharge from active duty;
(ii) any period of layoff not in excess of one
year in duration;
(iii)any period while the Employee is on an
approved leave of absence with or without pay
(including any leave of absence for maternity
or paternity reasons);
(iv) any other period of absence approved by a
Participating Employer or Non-Participating
Employer including paid holidays, paid
vacations and sick leaves;
(v) any other period of absence during which the
Employee does not incur a One Year Break In
Service; provided the Employee returns to
work with a Participating Employer or Non-
Participating Employer within the one-year
period after his Service Termination Date;
(vi) to the extent not otherwise credited above,
the first 12 months of a Parental Absence if
the Employee provides the Committee with any
evidence it may reasonably require to
determine that the absence is on account of
such Parental Absence.
Except as otherwise specifically provided under this Section
1.40, a partial Year of Service shall be determined by dividing
the number of days of employment, whether or not consecutive, by
the number of days in the calendar year.
Notwithstanding anything in this Plan to the contrary, the
Years of Service of any Participant determined as of January 1,
1989 shall not be less than the number of years he would have had
on such date under the terms of the Prior Plan as in effect on
December 31, 1988.
TAX\3271.2
ARTICLE II
PARTICIPATION
2.1 Commencement of Participation. Each Employee of a
Participating Employer who was participating under the Prior Plan
on December 31, 1988, shall without further requirements,
continue as a Participant hereunder.
Each other Employee of a Participating Employer as of
January 1, 1989, and each person who becomes an Employee of a
Participating Employer after January 1, 1989, shall become a
Participant as of the Entry Date which coincides with or
immediately follows the date on which such Employee completes one
Year of Service, provided he is employed by the Employer on such
date. Notwithstanding the foregoing, no Employee shall become a
Participant prior to the effective date of the adoption of the
Plan by his Employer.
The Committee shall take any necessary or appropriate action
to ensure that each Employee eligible to become a Participant
under this Article II becomes a Participant and, if it is
determined that an Employee has for any reason not been made a
Participant in the Plan or an administrative adjustment is
required, each Employee shall retroactively become a Participant
or such administrative adjustment shall be made.
2.2 Termination of Participation. A Participant who
(i) terminates employment with a Participating Employer
(ii) becomes a member of a group of employees covered by a
negotiated collective bargaining agreement which does not provide
for participation in the Plan or (iii) becomes an Employee of a
Non-Participating Employer shall no longer be considered an
Active Participant as defined in Section 5.2, but shall continue
as a Participant in the Plan entitled to share in the earnings
and losses of the Trust Fund and to exercise the rights of a
Participant hereunder as to elections, claims for benefits,
receipt of information and any other applicable rights until his
Vested Interest has been distributed and the non-vested portion
of his Accounts, if any, has been forfeited pursuant to Section
4.3.
The participation of any Participant shall end when (i) no
further benefits are payable to him or his Beneficiary under the
Plan and (ii) no further amounts are credited to his Accounts.
2.3 Participation Following Reemployment. If an Employee,
whether or not he was a Participant, terminates his employment
with a Participating Employer but is reemployed before a One Year
Break in Service occurs, he shall be treated for purposes of
eligibility to participate in the Plan as if the termination had
not occurred.
If an Employee who had not become a Participant in the Plan
terminates employment, experiences a One Year Break in Service,
and is later reemployed by a Participating Employer, he shall be
treated as a new Employee for purposes of determining eligibility
to participate in the Plan.
If a Participant terminates employment, experiences a One
Year Break in Service and is later reemployed by a Participating
Employer, he shall automatically become a Participant as of the
date he first performs an Hour of Service following reemployment.
TAX\3271.2
ARTICLE III
CONTRIBUTIONS
3.1 Employer Contributions.
(a) Subject to the provisions of any loan or
contribution agreement, the Employer shall
contribute to the Trust Fund for each Plan Year
such sum as the Board of Directors may, in its
sole discretion, determine, which amount may be
zero. The Company may contribute all or part of
the entire amount due on behalf of one or more
Participating Employers and charge the amount
thereof to the Participating Employer responsible
therefor.
The contribution for any year shall not exceed the
maximum amount deductible from the Employer's
income for such year under Section 404 of the
Code, except to the extent necessary to provide
the top-heavy minimum allocations under Section
13.4.
Employer Contributions may be made in the form of
cash or Company Stock.
(b) All or part of the contributions made under
Section 3.1(a) hereof may be applied to repay any
outstanding Exempt Loan. The Committee may,
subject to any pledge or similar agreement, direct
or determine the proportions of such contributions
which are applied to repay each such Exempt Loan.
(c) All or part of the contributions made under
Section 3.1(a) hereof may be used to purchase
Shares allocated to the Account of any Participant
or Beneficiary in order to make a distribution
under Article VII hereof to such Participant or
Beneficiary.
3.2 No Employee Contributions. No Employee shall be
required or permitted to contribute to the Trust Fund.
3.3 Time of Payment of Contribution. The Employer
Contribution for each Plan Year shall be paid to the Trustee not
later than the time prescribed by law for filing the federal
corporate income tax return, including extensions, for the
taxable year ending with or within such Plan Year. At the time
such contribution is made to the Trust Fund, the Board of
Directors shall designate the Plan Year for which such
contribution is made, either by amount or by formula.
3.4 For Exclusive Benefit of Participants and
Beneficiaries. Subject to Section 3.5, all Employer
Contributions to the Trust Fund shall be irrevocable, and neither
such contributions nor any income therefrom shall be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries under the Plan.
3.5 Reversion. In no event shall the assets of the Plan
revert to the benefit of the Employer except as provided in this
Section 3.5. Notwithstanding any provision of the Plan to the
contrary, any contribution by the Employer is conditioned upon
the deductibility of such contribution under Section 404 of the
Code. In the event all or any portion of a contribution made by
the Employer is attributable to a good faith mistake in
determining the deductibility of the contribution, the Employer
may demand repayment of the affected contributions, and the
Trustee shall return such contributions. Any such demand shall
be made within one year following a final determination of the
disallowance by the Internal Revenue Service.
In the event all or any portion of a contribution made by
the Employer is attributable to a good faith mistake of fact, the
Trustee shall return the affected portion of the contribution,
provided the Employer furnishes the Trustee evidence of the
mistake within one year of the contribution.
The maximum amount that may be returned to the Employer in
the case of a mistake of fact or the disallowance of a deduction
is the excess of (1) the amount contributed, over, as relevant,
(2) (A) the amount that would have been contributed had no
mistake of fact occurred, or (B) the amount that would have been
contributed had the contribution been limited to the amount that
is deductible after any disallowance by the Internal Revenue
Service. Earnings attributable to the excess contribution may
not be returned to the Employer, but losses attributable thereto
must reduce the amount to be so returned. Furthermore, if the
withdrawal of the amount attributable to the mistaken or
nondeductible contribution would cause the balance of the
individual account of any Participant to be reduced to less than
the balance which would have been in the account had the mistaken
or nondeductible amount not been contributed, then the amount to
be returned to the Employer must be limited so as to avoid such
reduction.
TAX\3271.2
ARTICLE IV
VESTING
4.1 Retirement, Death or Disability. A Participant shall
have a nonforfeitable and fully vested interest in his Accounts
upon the attainment, prior to termination of Employment, of
Normal Retirement Age, death or Disability prior to termination
of employment.
4.2 Other Termination. Except as otherwise provided in
this Section 4.2 and Section 13.3, a Participant who terminates
employment for reasons other than death, Disability or attainment
of Normal Retirement Age prior to termination of employment shall
have the Vested Interest in his Accounts determined by the
following schedule:
---------------------------------------------
YEARS OF SERVICE VESTED INTEREST
Less than 5 years 0%
5 years or more 100%
Notwithstanding the vesting schedule above, (i) a
Participant shall have a fully vested and nonforfeitable interest
in any amounts allocated to his Accounts which are attributable
to a plan-to-plan transfer to the Trust from a defined benefit
plan maintained by the Company as more fully described in Section
5.1 and (ii) any Employee who was a Participant in the Prior Plan
and had completed at least 3 Years of Service prior to January 1,
1989, shall be subject to the Prior Plan schedule to the extent
that such schedule is more liberal than the vesting schedule
provided above. The following is the Prior Plan vesting
schedule:
---------------------------------------------
YEARS OF SERVICE VESTED INTEREST
Less than 4 years 0%
4 years 40%
5 years 100%
4.3 Forfeitures. The non-vested portion of a Participant's
Accounts shall be forfeited on the date on which he incurs 5
consecutive One Year Breaks in Service, and shall be reallocated
among the Accounts of Active Participants as provided in Section
5.3. For purposes of this Section 4.3, if the value of a
Participant's vested interest in his Accounts is zero, the
Participant shall be deemed to have received a distribution of
such vested Account (and therefore a forfeiture results) as of
the end of the Plan Year in which his or her employment
terminates, and the non-vested portion shall be allocated among
the Accounts of Active Participants as provided in Section 5.3.
Forfeitures shall be determined pursuant to Section 54.4975-
11(d)(4) of the Treasury Regulations.
If a portion of a Participant's Account is forfeited,
Company Stock, which represent the Participant's interest in
Company Stock released from the Suspense Account, must be
forfeited only after other assets. If interest in more than one
class of Company Stock have been allocated to the Participant's
Account, the Participant must be treated as forfeiting the same
proportion of each such class.
A Participant can have a forfeiture restored after re-
employment, but only under the circumstances described in Section
4.4
4.4 Reemployment. If a participant terminates his or her
employment with the Employer, incurs a Break in Service, and is
later reemployed by the Employer:
(a) His or her Years of Service prior to the Break in
Service shall be taken into account for purposes
of determining the vested portion of such
Participant's Account funded after reemployment
(i) if any portion of the Participant's Account is
vested at the time of the Break in Service, or
(ii) if the number of years in the Break in
Service is less than the five.
(b) His or her Years of Service which accrue after the
Break in Service shall be taken into account for
purposes of determining the vested portion of such
Participant's Account funded prior to the Break in
Service, provided such Participant is reemployed
by the Employer before he or she incurs five (5)
consecutive Breaks in Service.
(c) Any Participant who terminates employment with
zero vesting in his or her Accounts shall be
credited with the full value of such Accounts
determined as of the date of the deemed
distribution under Section 4.3 if the Participant
is re-employed before he or she incurs five (5)
consecutive Breaks in Service. If any credit is
required under this Subparagraph (c), the credit
shall be made no later than the close of the Plan
Year in which occurs the later of the re-
employment or the repayment. The credit shall be
satisfied first from forfeitures and second from
Employer Contributions.
TAX\3271.2
ARTICLE V
ALLOCATIONS AND ACCOUNTING
5.1 Participant Accounts. The Committee shall maintain
(i) a Company Stock Account and (ii) an Investment Account for
each Participant. Each Participant's Company Stock Account shall
consist solely of shares of Company Stock. Each Participant's
Investment Account shall consist of the Participant's shares of
Trust Assets other than Company Stock.
For all Participants who were Participants in the Plan on
August 31, 1986, a subaccount of the Company Stock Account and
Investment Account shall be maintained to reflect the shares of
Company Stock and other assets attributable to the sale of
Company Stock allocated to the Participant's Company Stock
Account on August 31, 1986, as a result of Company Stock acquired
by the Trust in a plan-to-plan transfer from a defined benefit
plan maintained by the Company. The subaccounts established for
a Participant as a result of the plan-to-plan transfer from the
defined benefit plan maintained by the Company shall be 100%
vested at all times. Other subaccounts may be established and
maintained from time to time at the direction of the Committee.
Unless otherwise required by applicable law, the maintenance
of all accounts and subaccounts shall be for bookkeeping purposes
only and no segregation of Trust Fund assets shall be required.
5.2 Special Definitions for Article V. For purposes of
this Article V, the term Active Participant shall mean a
Participant (i) who is employed by a Participating Employer
through the last payroll period ending within the Plan Year,
(ii) who died prior to termination of employment, (iii) retired
from active employment with a Participating Employer on or after
his Early or Normal Retirement Date during the Plan Year, or
(iv) who received self-insured, short-term Disability payments
from the Employer during the Plan Year.
Dividends. For purposes of this Article V, the term
Dividends shall include distributions, which are dividends under
applicable state law accounted for as dividends under generally
accepted accounting principles, provided such dividends do not
constitute extraordinary dividends.
5.3 Allocation of Employer Contributions and Forfeitures.
As of each Annual Valuation Date, the total number of shares
(including fractional shares) of Company Stock (i) contributed to
the Trust Fund by the Employer, (ii) purchased by the Trustee
with Employer Contributions made in cash, (iii) released from the
Suspense Account pursuant to Section 5.10 during the Plan Year or
(iv) forfeited during the Plan Year pursuant to Section 4.3 shall
be computed and allocated to the Company Stock Accounts of all
Active Participants in proportion that each such Active
Participant's Compensation bears to the total Compensation for
all Active Participants for such year.
As of each Annual Valuation Date, Employer Contributions
made in cash during the Plan Year which are not used to purchase
Company Stock or to repay an Exempt Loan, as well as any
forfeitures from Participant Investment Accounts pursuant to
Section 4.3, shall be computed and allocated to the Investment
Accounts of all Active Participants in proportion that each such
Active Participant's Compensation bears to the total Compensation
for all Active Participants for such year.
5.4 Allocation of Cash Dividends on Company Stock. All
Dividends payable with respect to Company Stock held by the Trust
Fund, whether or not allocated to the Company Stock Accounts of
Participants will be used for the purpose of repaying one or more
Exempt Loans. If Dividends on Company Stock allocated to a
Participant's Company Stock Account are used to pay an Exempt
Loan, Company Stock having a fair market value of not less than
the amount of any such Dividend shall be allocated to such
Participant's Employer Stock Account. Nevertheless, with respect
to cash Dividends attributable to Company Stock allocated to the
Company Stock Accounts of Participants, the Committee may, in its
sole discretion, determine for any Plan Year whether to either
(i) allocate such cash Dividends received by the Trust Fund to
the Investment Accounts of Participants in proportion to the
Company Stock allocated to each Participant's Company Stock
Account as of the record date established by the Company with
respect to such Dividends, or (ii) distribute such cash Dividends
to Participants in proportion to the shares of Company Stock
(including fractional shares) allocated to each Participant's
Company Stock Account as of the record date established by the
Company with respect to such Dividends.
Cash dividends which are paid to Participants may be paid
directly by the Company or may be paid by the Trustee and/or
Committee within 90 days after the end of the Plan Year of
receipt by the Trustee.
In the case of Dividends distributed to Participants,
Dividend checks that are returned to the Committee as
undeliverable to Participants at their last known address will be
restored to the accounts of such Participants and such cash
dividends will be 100 percent vested irrespective of whether the
shares to which the dividends are attributable were vested. The
Participant's entire vested account, including the dividends, are
subject to forfeiture under paragraph 14.3 of the ESOP if the
Participant still cannot be located after 5 years of consecutive
Breaks in Service.
5.5 Stock Dividends, Splits, Recapitalizations, Etc. Any
shares (including fractional shares) of Company Stock received by
the Trust on shares allocated to Company Stock Account of
Participants as a result of a stock dividend, stock split,
conversion, or as a result of a reorganization or other
recapitalization of the Company, shall be allocated as of the
record date of such distribution in proportion to the shares
(including fractional shares) then allocated to each
Participant's Company Stock Account; provided, however, that any
stock dividends may, in the sole discretion of the Committee, be
used to repay an Exempt Loan.
5.6 Allocation of Earnings and Losses. As of each
Valuation Date, the Trustee shall determine the fair market value
of the Trust Fund and the net earnings and gains or losses of the
Trust Fund (other than unrealized appreciation or depreciation in
Company Stock) after deducting any expenses which have not been
paid by the Company.
After the Trustee has completed its calculations, the
Committee shall allocate the net earnings and gains or losses of
the Trust Fund since the immediately preceding Valuation Date to
the Investment Accounts of all Participants in proportion to the
balances of such Accounts as of the immediately preceding
Valuation Date. The Committee may also make such other
adjustments to the Participant Accounts as it deems necessary and
appropriate in order to achieve an equitable allocation of the
net earnings and gains or losses as long as it does so in a
uniform and nondiscriminatory manner and such adjustments are
consistent with the accounting procedures established by Section
5.7.
5.7 Accounting Procedures. The Committee shall establish
the accounting procedures for the purposes of making the
allocations to Participant Accounts in accordance with the
provisions of the Plan. From time to time the Committee may
modify its accounting procedures for the purpose of achieving
equitable and non-discriminatory allocations.
5.8 Valuation Procedures. In determining the fair market
value of the Trust Fund, the Committee and/or Trustee shall act
in accordance with generally accepted valuation methods and
practices and shall be entitled to retain such independent
appraisers as it deems necessary to determine the value of any
Trust Fund assets that are not traded freely on a recognized
market. All valuations of Company Stock made during a period
when Company Stock is not readily tradable on an established
securities market shall be made by an "independent appraiser" as
defined in the Regulations prescribed under Section 170(a)(1) of
the Code.
As soon as practicable after the close of each Plan Year,
the Committee shall mail to each Participant (at his last known
address) a valuation notice which includes the number of shares
(including fractional shares) allocated to his Company Stock
Account, the value of such shares determined at the end of the
Plan Year, the value of his Investment Account and the
Participant's Vested Interest.
5.9 Suspense Account. Shares of Company Stock acquired by
the Trust Fund through an Exempt Loan shall be added to and
maintained in the Suspense Account on an unallocated basis until
released from the Suspense Account as provided in Section 5.10
and allocated to the Company Stock Accounts of Participants as
provided in Section 5.3.
5.10 Release from Suspense Account. Shares of Company Stock
acquired for the Trust Fund with the proceeds of an Exempt Loan
shall be released from the Suspense Account as the Exempt Loan is
repaid, in accordance with the following provisions of this
Section 5.10:
(a) For each Plan Year until the Exempt Loan is fully
repaid, the number of shares of Company Stock
released from the Suspense Account shall equal the
number of unreleased shares immediately before
such release for the current Plan Year multiplied
by the "Release Fraction." As used herein, the
term "Release Fraction" shall mean a fraction, the
numerator of which is the amount of principal and
interest paid on the Exempt Loan for such current
Plan Year and the denominator of which is the sum
of the numerator plus the principal and interest
to be paid on such Exempt Loan for all future
years during the term of such Exempt Loan
(determined without reference to any possible
extensions or renewals thereof). For purposes of
computing the denominator of the Release Fraction,
if the interest rate on the Exempt Loan is
variable, the interest to be paid in subsequent
Plan Years shall be calculated by assuming that
the interest rate in effect as of the end of the
applicable Plan Year will be the interest rate in
effect for the remainder of the term of the Exempt
Loan. Notwithstanding the foregoing, in the event
such Exempt Loan shall be repaid with the proceeds
of a subsequent Exempt Loan (the "Substitute
Loan"), such repayment shall not operate to
release all such shares in the Suspense Account,
but, rather, such release shall be effected
pursuant to the foregoing provisions of this
paragraph (a) on the basis of payments of
principal and interest on such Substitute Loan.
(b) If required by any pledge or similar agreement,
then in lieu of applying the provisions of
paragraph (a) with respect to an Exempt Loan,
shares of Company Stock shall be released from the
Suspense Account as the principal amount of such
Exempt Loan is repaid (without regard to interest
payments), provided the following three conditions
are satisfied:
(i) The Exempt Loan shall provide for annual
payments of principal and interest at a
cumulative rate that is not less rapid at any
time than level annual payments of such
amounts for 10 years;
(ii) The interest portion of any payment shall be
disregarded only to the extent it would be
treated as interest under standard loan
amortization tables; and
(iii)If the Exempt Loan is renewed, extended or
refinanced, the sum of the expired duration
of the Exempt Loan and the renewal, extension
or new Exempt Loan period shall not exceed 10
years.
(c) If at any time there is more than one Exempt Loan
outstanding, then separate accounts may be
established under the Suspense Account for each
such Exempt Loan. Each Exempt Loan for which a
separate account is maintained may be treated
separately for purposes of the provisions
governing the release of shares of Company Stock
from the Suspense Account and for purposes of the
provisions governing the application of Employer
Contributions to repay an Exempt Loan.
(d) It is intended that the provisions of this Section
5.10 shall be applied and construed in a manner
consistent with the requirements and provisions of
Treasury Regulation Section 54.4975-7(b)(8), and
any successor Regulation thereto.
5.11 Limitations on Allocations to Certain Participants.
Notwithstanding the foregoing provisions of this Article V:
(a) If more than one-third of the total allocations to
Active Participants' Accounts with respect to a
Plan Year would be allocated pursuant to Section
5.3, in the aggregate, to the Accounts of Highly
Compensated Employees then the allocations to the
Accounts of Highly Compensated Employees shall be
reduced, pro rata, in an amount sufficient to
reduce the amounts allocated to the Accounts of
such Active Participants to an amount not in
excess of one-third of the total allocations to
Active Participants' Accounts with respect to such
Plan Year; and
(b) Any amounts which are prevented from being
allocated due to the restriction contained in
paragraph (a) shall be allocated pursuant to
Section 5.3 to the Accounts of Non-Highly
Compensated Employees as though the Highly
Compensated Employees did not participate in the
Plan.
5.12 Limitation on Annual Additions. The following
paragraphs of this Section 5.12 shall apply notwithstanding any
provision of the Plan to the contrary:
(a) The total "Annual Additions" to a Participant's
Accounts for any Plan Year under the provisions of
this Article V shall not exceed the lesser of
(i) 25% of the Participant's compensation (as
defined in Section 415(c)(3) of the Code and the
Regulations promulgated thereunder) or
(ii) $30,000 or such larger amount equal to 1/4 of
the defined benefit dollar limitation as adjusted
or cost-of-living increases pursuant to Code
Sections 415(c)(1), 415(d)(1) and 415(d)(3);
provided, however, that for Plan Years ending
prior to January 1, 1990 if the restriction
contained in Section 5.11 remains in effect, such
dollar amount shall be increased by the lesser of
(i) 100% of the dollar amount otherwise applicable
for the Plan Year or (ii) the amount of Company
Stock contributed to the Plan or attributable to
cash contributed to the Plan.
(b) For purposes of paragraph (a), the term "Annual
Additions" shall mean for any Plan Year the
aggregate of amounts of Employer Contributions and
forfeitures credited to a Participant's Accounts,
such as Employer Contributions used to repay one
or more Exempt Loans or to purchase shares of
Company Stock which are deemed allocated to such
Participant's Accounts; provided, however, that
"Annual Additions" shall not include any amounts
credited to the Participant's Accounts (i) due to
Employer Contributions relating to an interest
payment on an Exempt Loan, (ii) received by the
Trust through a plan-to-plan transfer,
(iii) attributable to a forfeiture of Company
Stock acquired with the proceeds of an Exempt
Loan, or (iv) received by the Trust as a result of
a dividend, as defined in Section 5.2 (or a stock
split, recapitalization or other event described
in Section 5.5), declared by the Company and
allocated to such Participants' Accounts in
proportion to the shares (including fractional
shares) of Company Stock allocated to such
Accounts. For purposes of this paragraph (b), the
portion of an Employer Contribution used to repay
one or more Exempt Loans or to purchase shares of
Company Stock which is deemed allocated to an
Active Participant's Account shall be in the
proportion that each such Active Participant's
Compensation bears to the total Compensation for
all Active Participants for such year.
For purposes of this paragraph (b), all defined
contribution plans of the Employer, whether or not
terminated, are to be treated as one defined
contribution plan.
(c) The term "Annual Additions" also includes amounts
allocated to an individual medical account, as
defined in Code Section 415(l)(2), which is part
of a defined benefit plan maintained by the
Employer, and amounts derived from contributions
which are attributable to post-retirement medical
benefits allocated to the separate account of a
key employee, as defined in Code Section
419(A)(d)(3), under a welfare benefit fund, as
defined in Code Section 419(e), maintained by the
Employer.
(d) For purposes of this Section 5.12, Participant's
compensation, as defined in Section 415(c)(3) of
the Code and Regulation, shall mean wages,
salaries and fees for professional services and
other amounts received (without regard to whether
or not an amount was paid in cash) for personal
services actually rendered in the course of
employment for the Employer maintaining the Plan
to the extent that the amounts are includible in
gross income (including but not limited to
commissions paid salesmen, compensation for
services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other
expense allowances under a nonaccountable plan (as
described in section 1.62-2(c) of the
Regulations)), but excluding:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year
in which contributed, or employer
contributions under a simplified employee
pension plan to the extent such contributions
are deductible by the Employee or any
distributions from a plan of deferred
compensation;
(ii) Amounts realized from the exercise of a non-
qualified stock option or when restricted
stock or property held by the Employee is no
longer subject to a substantial risk of
forfeiture or becomes freely transferable;
(iii)Amounts realized from the sale, exchange or
other disposition of stock acquired under an
incentive stock option; and
(iv) Other amounts which received special tax
benefits such as premiums for group-term life
insurance (but only to the extent that the
premiums are not includible in the gross
income of the employee).
(e) If for any reason the Annual Additions to a
Participant's Accounts would exceed the limitation
described in paragraph (a) above, the allocation
of the annual addition shall be reduced as
follows:
(i) Excess amounts shall be allocated and
reallocated to the Accounts of other
Participants in accordance with Section 5.3
to the extent that such allocations would not
cause Annual Additions to each Participant's
Accounts to exceed the limitations of this
Section 5.12.
(ii) To the extent the reductions described in
Subparagraph (1) cannot be allocated to other
Participants' Accounts, such reduction shall
be allocated to a Section 415 Suspense
Account. All amounts in the Section 415
Suspense Account must be allocated and
reallocated to Participants' Accounts in the
same manner as other forfeitures before an
Employer Contribution which would constitute
Annual Additions may be made. No investment
gains and losses shall be allocated to the
Section 415 Suspense Account. The Committee
may, in its discretion, use any such
investment gains and losses to repay an
Exempt Loan or to be allocated to Participant
Accounts. Any amounts allocated to
Participants from the Section 415 Suspense
Account shall be considered Annual Additions.
In the event of termination of the Plan, the
balance of the Section 415 Suspense Account
shall revert to the Company to the extent it
may not then be allocated to any
Participants' Accounts.
(iii)Subparagraphs (1) and (2) notwithstanding,
any amounts held in an individual
Participant's Section 415 Suspense Account as
of December 31, 1988, under the terms of the
Prior Plan shall continue to be held for, and
allocated to, such Participant pursuant to
Section 11.3 of the Prior Plan.
(iv) The excess amounts shall not be deemed Annual
Additions in that limitation year if they are
treated in accordance with this Subparagraph
and if the excess amounts are a result of the
allocation of forfeitures, a reasonable error
in estimating a Participant's annual
Compensation, a reasonable error in
determining the amount of elective deferrals
(within the meaning of Section 402(g)(3))
that may be made with respect to any
individual under the limits of Section 415 or
under other limited facts and circumstances
that the Commissioner finds justify the
availability of the rules set forth in this
Paragraph.
(f) Paragraph (a) notwithstanding, if a Participant is
included in both a defined benefit plan and a
defined contribution plan maintained by the
Employer, the sum of the "defined benefit plan
fraction" and the "defined contribution plan
fraction" as defined in Section 415(e) of the Code
for any Plan Year may not exceed 1.00. Reduction
of contributions to all benefits from all other
plans, where required, shall be accomplished by
first reducing benefits under such other defined
benefit plan or plans, then reducing contributions
or allocating excess in the manner and priority
set out in such other defined contribution plans,
and finally by allocating any remaining excess for
this Plan in the manner and priority set out above
with respect to this Plan.
The defined benefit plan fraction for any year is
a fraction (a) the numerator of which is the
projected "annual benefit" of the Participant
under the defined benefit plan (determined as of
the close of the Plan Year), and (b) the
denominator of which is the lesser of: (1) the
product of 1.25 multiplied by the maximum dollar
limitation in effect under Section 415(b)(1)(A) of
the Code for such year, or (2) the product of 1.4
multiplied by the amount which may be taken into
account under Section 415(b)(1)(B) of the Code for
such year. The defined contribution plan fraction
for any year is a fraction (1) the numerator of
which is the sum of the "annual additions" to the
Participant's Account as of the close of the
Limitation Year and (b) the denominator of which
is the sum of the lesser of the following amounts
determined for such year and each prior Year of
Service with the Employer: (1) the product of
1.25 multiplied by the dollar limitation in effect
under Section 415(c)(1)(A) of the Code for such
year (determined without regard to Section
415(c)(6) of the Code, or (2) the product of 1.4
multiplied by the amount which may be taken into
account under Section 415(c)(1)(B) of the Code for
such year.
(g) For purposes of this Section 5.12, the term
"Employer" includes any entity required to be
aggregated with the Company or any other
Participating Employer under Sections 414(b), (c),
(m) or (o) of the Code.
TAX\3271.2
ARTICLE VI
BENEFITS
6.1 Normal Retirement Date. The Normal Retirement Date
shall be the later of (a) the first day of any month coincident
with or next following the Participant's actual retirement (or
other termination of employment) after age 65, or (b) the first
day of the month coincident with or next following a
Participant's fourth anniversary of commencement of participation
in the Plan. Any Participant who remains an Employee beyond age
65, or becomes a Participant after such date, shall participate
in the contributions and benefits of the Plan in the same manner
as any other Participant.
6.2 Early Retirement Date. Any Participant who has
attained age 55 and who has at least 10 Years of Service may
retire on an Early Retirement Date by making written application
to the Committee specifying an Early Retirement Date which is the
first day of a month not more than 90 days following the date of
the filing of the application.
6.3 Disability Retirement Date. Any Participant who has
incurred a Disability, as determined by the Committee, may retire
on a Disability Retirement Date by making written application to
the Committee specifying a Disability Retirement Date which is
the first day of a month not more than 90 days following the date
of the filing of the application. Former Employees shall not be
eligible for Disability Retirement unless the Disability was
determined to have occurred during the course of such former
Employee's employment with the Employer. Subject to Section 9.6,
the determination of the Committee as to whether a Participant
has a Disability and the date of such Disability shall be final,
binding and conclusive.
6.4 Nonalienation of Benefits. Except with respect to
federal income tax withholding and federal tax levies, benefits
payable under this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind,
either voluntary or involuntary, including any such liability
which is for alimony or other payments for the support of a
spouse or former spouse or for any other relative of the
Employee, prior to actually being received by the person entitled
to the benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or otherwise dispose of any right to benefits payable
hereunder, shall be void. The Trust Fund shall not in any manner
be liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to benefits
hereunder.
Notwithstanding the above, the Committee shall direct the
Trustee to comply with a qualified domestic relations order
described in Section 6.5.
6.5 Qualified Domestic Relations Order. All rights and
benefits, including election rights, provided to Participants
pursuant to this Plan, are subject to the rights afforded to any
"alternate payee" pursuant to a "qualified domestic relations
order," as those terms are defined below.
Pursuant to the provisions of Section 414(p) of the Code, a
"qualified domestic relations order" shall mean a judgment,
decree or order (including approval of a property settlement
agreement) made pursuant to a state domestic relations law
(including a community property law) that relates to the
provision of child support, alimony payments, or marital property
rights to a spouse, former spouse, child or other dependent of a
Participant ("alternate payee") and which:
(a) creates or recognizes the existence of an
alternate payee's right to, or assigns to an
alternate payee the right to, receive all or a
portion of the benefits payable to a Participant
under this Plan; and
(b) specifies (i) the name and last known mailing
address (if any) of the Participant and each
alternate payee covered by the order, (ii) the
amount or percentage of the Participant's benefits
under the Plan to be paid to each such alternate
payee, or the manner in which such amount or
percentage is to be determined and, (iii) the
number of payments or the period to which the
order applies; and
(c) does not require this Plan to:
(i) provide any type or form of benefit, or any
option, not otherwise provided hereunder;
(ii) pay any benefits to any alternate payee prior
to the earlier of:
(A) the earliest date benefits are payable
hereunder to a Participant, or
(B) the later of the date the Participant
attains age 50 or the earliest date on
which the Participant could obtain a
distribution under the Plan if the
Participant terminated employment;
(iii)pay any benefits which are not vested under
the Plan;
(iv) provide increased benefits, or
(v) pay benefits to an alternate payee which are
required to be paid to another alternate
payee under a prior qualified domestic
relations order.
For purposes of this Plan, an alternate payee who had been
married to the Participant for at least one year may be treated
as a spouse with respect to the portion of the Participant's
Accounts in which such alternate payee has an interest provided
that the qualified domestic relations order provides for such
treatment. However, under no circumstances may the spouse of an
alternate payee (who is not a Participant hereunder) be treated
as a spouse under the terms of the Plan.
Upon receipt of any judgment, decree or order (including
approval of a property settlement agreement) relating to the
provision of payment by the Plan to an alternate payee pursuant
to a state domestic relations law, the Committee shall promptly
notify the affected Participant and any alternate payee of the
receipt of such judgment, decree order and shall notify the
affected Participant and any alternate payee of the Committee's
procedure for determining whether or not the judgment, decree or
order is a qualified domestic relations order.
The Committee shall establish procedures to determine the
status of a judgment, decree or order as a qualified domestic
relations order and to administer Plan distributions in
accordance with any such qualified domestic relations order. Such
procedures shall be in writing, shall include provisions
specifying the notification requirements enumerated in the
preceding paragraph, shall permit an alternate payee to designate
a representative for receipt of communications from the
Committee, and shall include such other provisions as the
Committee shall determine, including such provisions required
under Treasury Regulations.
During any period in which the issue of whether a judgment,
decree or order is a qualified domestic relations order is being
determined (by the Committee, a court of competent jurisdiction
or otherwise), the Committee shall account for separately the
amount, if any, which would have been payable to the alternate
payee during such period if the judgment, decree or order had
been determined to be a qualified domestic relations order.
If the judgment, decree or order is determined to be a
qualified domestic relations order within the 18-month period
following the receipt by the Committee of the qualified domestic
relations order, then payment of the amount shall be paid to the
appropriate alternate payee at the time and in the form specified
in such order. If such a determination is not made within the
18-month period, the amount shall be returned to the
Participant's Accounts under the Plan and shall be paid at the
time and in the manner provided under the Plan as if no order,
judgment or decree had been received by the Committee.
TAX\3271.2
ARTICLE VII
PAYMENT OF BENEFITS
7.1 Time of Payment. Subject to the temporary non-payment
provisions of Section 7.6, the payment of a Participant's Vested
Interest shall be made, or commence, as soon as administratively
practicable following the Participant's Normal Retirement Date or
death (but not later than 60 days after the end of the Plan Year
in which the Participant attains his Normal Retirement Date or
dies); provided, however, that no distribution shall commence
later than April 1 following the calendar year in which the
Participant attains age 70 1/2, even if still employed, whether
or not he is employed by a Participating Employer.
For a Participant electing an Early Retirement Date as
provided in Section 6.2 or a Disability Retirement Date as
provided in Section 6.3, the payment of his Vested Interest shall
be made, or commence, as soon as administratively practicable
following his Early Retirement Date or Disability Retirement Date
(but not later than 60 days after the end of the Plan Year in
which the Early Retirement Date or Disability Retirement Date
occurs).
For a Participant who terminates employment (other than by
reason of death or Disability) prior to his Normal Retirement
Date or Early Retirement Date, the payment of his Vested Interest
shall be made, or begin to be made, within 60 days after the
close of the Plan Year in which the Participant attains his Early
Retirement Date or Normal Retirement Date or dies.
Notwithstanding the foregoing paragraphs of this Section
7.1, the payment of the Vested Interest of a Participant's
Company Stock Account attributable to Post-1986 Company Stock
shall be made, or shall commence, not later than the sixth Plan
Year following the Plan Year in which the Participant terminated
employment, provided that the Participant has not been reemployed
by the Employer before the date of the distribution.
7.2 Optional Forms of Payment. A Participant whose Vested
Interest is greater than $3,500 may elect to receive his Vested
Interest in the form of any one of the following optional forms
of benefit:
(a) Lump Sum Option, under which the Participant's
Vested Interest is paid to him in one lump sum.
(b) Installment Option, under which the Participant's
Vested Interest is paid to him in ten
substantially equal annual installments. Unless
the Participant elects otherwise, the Vested
Interest of a Participant's Company Stock Account
attributable to Post-1986 Company Stock is paid to
him in five substantially equal annual
installments.
(c) Combination Option, under which a portion of the
Participant's Vested Interest is paid as an
annuity pursuant to Section 7.3 and the remaining
portion of his Vested Interest is paid pursuant to
the Lump Sum Option or the Installment Option
described above.
(d) Transfer Benefit, under which all of the
Participant's Vested Interest is transferred to
the Company's Pension Plan. The Participant will
receive his Vested Interest in a form selected
under the Company's Pension Plan. This optional
form of benefit is available only to Participants
who are also participating in the Company's
Pension Plan (other than Participants whose
benefits are frozen under the Company's Pension
Plan) and who has requested and is eligible to
receive a retirement income under the Company's
Pension Plan. This provision does not apply to
amounts allocated to a Participant's Account which
are not considered in computing the Participant's
retirement income under the Company's Pension
Plan.
Notwithstanding the above, a Participant whose Vested Interest
exceeds $3,500 must consent to a distribution of his Vested
Interest.
7.3 Normal Form of Payment of Benefits. Subject to
Sections 7.4 and 7.5, a Participant's Vested Interest under the
Plan shall be payable as follows:
(a) If a Participant is married on the date his
distribution of benefits commences, the normal
form of payment shall be a 50% Joint and Survivor
Spouse Annuity. The "50% Joint and Survivor
Spouse Annuity" means a benefit providing an
annuity for the life of the Participant, ending
with the payment due on the first day of the month
coincident with or preceding the date of his
death, and, if the Participant's legal spouse
(determined as of the commencement of the annuity)
survives him, a survivor annuity for the life of
the legal spouse equal to 50% of the annuity
payable for the life of the Participant,
commencing on the first day of the month following
the date of the Participant's death and ending
with the payment due on the first day of the month
coincident with or preceding the date of the legal
spouse's death. The 50% Joint and Survivor
Annuity shall be purchased with the value of the
Participant's Vested Interest determined as of the
Valuation Date coincident with or immediately
preceding the benefit commencement date; provided,
however, Company Stock shall be valued pursuant to
7.7(c).
(b) If a Participant is not married on the date his
distribution of benefits commences, or the
Participant has not been legally married for at
least one year ending on the date as of which
distribution of his Vested Interest Commences, the
normal form of payment shall be a Straight Life
Annuity. A "Straight Life Annuity" shall mean an
annuity for life ending with the payment due on
the last day of the month coincident with or
preceding the date of the Participant's death.
The Straight Life Annuity shall be purchased with
the value of the Participant's Vested Interest
determined as of the Valuation Date coincident
with or immediately preceding the benefit
commencement date; provided, however, Company
Stock shall be valued pursuant to 7.7(c).
(c) A Preretirement Survivor Annuity shall be paid to
the surviving spouse of a Participant who, after
earning a nonforfeitable right to any portion of
his Account attributable to a plan-to-plan
transfer of assets from a defined benefit pension
plan maintained by the Company to the Plan, dies
before the commencement of the distribution of
that portion of his Account. The term
"Preretirement Survivor Annuity" means a benefit
providing for payment of a survivor annuity to a
Participant's surviving spouse equal to either
one-half or the full amount (as the Participant
shall elect) of the annuity which would have been
payable for the life of the Participant under a
50% Joint and Survivor Spouse Annuity described
above. In the case of a Participant who dies on
or after the first date which could have been his
Early Retirement Date but before distribution of
his Vested Interest has commenced, the
Preretirement Survivor Annuity shall be based on
the 50% Joint and Survivor Spouse Annuity which
would have been payable under the 50% Joint and
Survivor Spouse Annuity if it had commenced on the
first day of the month coincident with or
preceding the date of his death. In the case of a
Participant who dies before the first date which
could have been his Early Retirement Date, the
Preretirement Survivor Annuity shall be based on
the 50% Joint and Survivor Spouse Annuity which
would have been payable if the Participant had
terminated employment on the date of death,
survived until the first date which could have
been his Early Retirement Date, immediately began
receiving payments under the 50% Joint and
Survivor Annuity and died on the day following
such Early Retirement Date. Payment of a
Preretirement Survivor Annuity shall commence on
the first day of the month following the later of
(i) the first month in which the Participant could
have retired or an Early Retirement Date, or
(ii) the month in which the Participant dies.
7.4 Waiver of Normal Form and Election of Optional Form of
Payment. A Participant may waive the normal form of payment
described in Section 7.3 provided that concurrently with such
waiver he shall elect an optional form of payment of benefits
from those provided in Section 7.2. Such election shall be made
in writing and shall not take effect unless either: (i) the
Participant's legal spouse consents in writing to such election
and the spouse's consent acknowledges the effect of such election
and is witnessed by a notary public, or (ii) it is established to
the satisfaction of the Committee that the Participant has no
legal spouse, or that such spouse's consent cannot be obtained
because the spouse cannot be located, or because of such other
circumstances as may be prescribed in Regulations issued pursuant
to Section 417 of the Code.
The Committee shall make an election form available to each
Participant not less than 9 months before the Participant attains
his earliest possible Early Retirement Date as described in
Section 6.2. Such form shall describe in plain language the
terms and conditions of the optional forms of benefit and shall
provide for election of optional forms of benefit and a benefit
commencement date. The completed form should be returned to the
Committee within the 90 day period ending on the designated
benefit commencement date. Any waiver may be revoked, or
election changed, at any time up to the due date for the
Participant's first benefit payment, on a form approved by the
Committee. If no election has been made at the time benefits
commence, benefits will be payable in accordance with Section
7.3.
The Committee shall, when necessary, mail the form to the
Participant via certified mail, at his last address on the
records of the Committee, or, if deemed appropriate, through any
facilities made available by the United States Social Security
Administration. Following receipt of the election form, the
Participant may request information with respect to the financial
effect of his waiver on the normal form of payment and the
election of any available optional form of payment.
7.5 Small Amounts. The distribution to any Participant
whose Vested Interest is $3,500 or less shall be made in the form
of a lump sum.
7.6 Temporary Non-Payment of Benefits. If a Participant or
Beneficiary fails to submit the form required under Section 7.4
or fails to furnish information reasonably requested by the
Committee which is necessary to determine whether such
Participant or Beneficiary has satisfied all requirements for
payment of benefits, the Committee shall delay payment of
benefits until the requested information is furnished and shall
make reasonable efforts to obtain such information. After the
requested information has been furnished and the Committee has
determined that the Participant or Beneficiary has met the
requirements for payment of benefits, such benefits shall be
payable.
7.7 Manner of Payment. The following rules shall govern
the payment of benefits pursuant to this Article VII:
(a) All lump sum and installment payments under this
Article VII from the Participant's Company Stock
Account shall be made in the form of Company
Stock, with the value of any fractional shares
paid in cash, unless the provision of Section
409(h)(2) of the Code becomes applicable. The
amount of cash to be distributed to a Participant
for fractional shares (or for whole shares in the
event the provisions of Section 409(h)(2) of the
Code are applicable) allocated to his Company
Stock Account shall be determined by the closing
price of Company Stock on the last trading day of
the month preceding payment, or in the event
Company Stock is not currently traded on an
established securities market, the price
determined by an independent appraiser as of the
Annual Valuation coincident with or immediately
preceding the date of distribution.
(b) All lump sum and installment payments under this
Article VII from a Participant's Investment
Account shall be made in cash; provided, however,
that the Participant shall be entitled to receive
the value of his Investment Account (determined as
of the most recent Valuation Date) in shares of
Company Stock. The price of the shares shall be
determined as of the last trading day of the month
preceding payment, or in the event Company Stock
is not currently traded on an established
securities market, the price determined by an
independent appraiser as of the Annual Valuation
Date coincident with or immediately preceding the
date of distribution. To receive the value of his
Investment Account in shares of Company Stock, a
Participant must make a written request on forms
provided by the Committee for this purpose within
14 days after receipt of the Committee's intention
to distribute in cash.
(c) If an annuity is purchased, Company Stock
allocated to the Participant's Company Stock
Account shall be valued at the closing price of
Company Stock on the last trading day of the month
preceding payment or, if Company Stock is not
currently traded on an established securities
market, the price determined by an independent
appraiser as of the Annual Valuation Date
coincident with or immediately preceding the date
of distribution. The Participant's Investment
Account shall be valued as of the Valuation Date
coincident with or immediately preceding the date
of distribution; provided, however, that such
account shall be increased by any cash dividends
added thereto and decreased by cash dividends paid
therefrom since the prior Valuation Date.
(d) If the Participant elects to transfer his Vested
Interest to the Company's Pension Plan, the
transfer shall be made in cash.
(e) If the Participant has received a distribution
following his or her Normal Retirement Date, Early
Retirement Date, Disability Retirement Date or
death and he or she receives a second distribution
of 10 or fewer shares of Company Stock, such
Participant can elect to receive the second
distribution in the form of cash.
7.8 Direct Rollover Rules. This Section applies to
distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this Article, 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. Definitions
are as follows:
(a) The term Eligible Rollover Distribution means 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; and the portion of any distribution
that is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) An Eligible Retirement Plan includes 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 individual
retirement annuity.
(c) The term Distributee includes an employee or
former employee. In addition, the employee's or
former employee's surviving spouse and the
employee's or former employee's spouse or former
spouse who is the alternate payee under a
qualified domestic relations order, as defined in
Section 414(p) of the Code, are Distributees with
regard to the interest of the spouse or former
spouse.
(d) The term Direct Rollover means a payment by the
plan to the eligible retirement plan specified by
the Distributee.
7.9 Notice. For Plan Years beginning after December 31,
1993, a Participant's Vested Interest may commence no less than
30 days after the notice required under section 1.411(a)-11(c) of
the Income Tax Regulations is given, unless:
(a) The Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the
notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a
particular distribution option), and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
TAX\3271.2
ARTICLE VIII
TRUST FUND
8.1 Plan Assets. The Company has entered into the Trust
Agreement providing for the establishment of a trust to hold the
assets of the Plan. All contributions shall be paid over to the
Trustee and held pursuant to the provisions of the Plan and the
Trust Agreement.
8.2 Investment of Trust Fund. The Trust Fund shall be
invested primarily in Company Stock; provided that the Trustee
may also invest the Trust Fund in cash, cash equivalents,
certificates of deposit, money market funds, guaranteed
investment contracts, short term securities, bonds, and other
investments at the direction of, or in accordance with the
investment policy established by, the Committee or an authorized
Investment Manager.
Neither the Employer nor the Committee nor the Trustee shall
have any responsibility or duty to time any transaction involving
Company Stock in order to anticipate market conditions or changes
in stock value, nor shall the Employer, the Committee or the
Trustee have any responsibility or duty to sell shares of Company
Stock held in the Trust Fund (or otherwise to provide investment
management for Company Stock held in the Trust Fund) in order to
maximize return or minimize loss. Company contributions made in
cash, and other cash received by the Trustee, may be used to
acquire Shares from shareholders of the Company or directly from
the Company.
8.3 Company Not Responsible For Adequacy Of Trust Fund.
Except as required by applicable law, neither the Board of
Directors, the Company, the Participating Employers, the
Committee, nor the Trustee shall be responsible for the adequacy
of the Trust Fund to meet and discharge Plan liabilities. Each
Participant or Beneficiary shall assume all risk in connection
with any decrease in the value of the assets of the Trust Fund
and the Participants' Accounts and neither the Participating
Employers nor the Committee shall be liable or responsible
therefor.
8.4 Legal Limitation. The Committee shall not be required
to engage in any transaction, including, without limitation,
directing the purchase or sale of Company Stock which it
determines in its sole discretion might tend to subject itself,
its members, the Plan, the Employer, or any Participant to
liability under federal or state law.
8.5 Exempt Loans. The Committee may direct the Trustee to
have the Plan enter into one or more Exempt Loans to finance the
acquisition of Company Stock. The terms of any Exempt Loan shall
comply with each of the following requirements:
(a) The terms shall be as favorable to the Plan as the
terms of a comparable loan from arms-length
negotiations between independent parties;
(b) The interest rate shall be no more than a
reasonable interest rate considering all relevant
factors including the amount and duration of the
Exempt Loan, the security and guarantee involved,
the credit standing of the Plan and the guarantor
of the Exempt Loan and the interest rate
prevailing for comparable loans;
(c) The Exempt Loan shall be without recourse against
the Plan;
(d) The Exempt Loan must be for a specific term;
(e) The Exempt Loan may not be payable at the demand
of any person except in the case of default;
(f) The only assets of the Plan that may be given as
collateral on the Exempt Loan are shares of
Company Stock acquired with the proceeds of the
same Exempt Loan or shares of Company Stock used
as collateral on a prior Exempt Loan and repaid
with the proceeds of the same Exempt Loan;
(g) No person entitled to payment under the Exempt
Loan shall have any right to assets of the Plan
other than collateral given for that Exempt Loan,
contributions made to the Plan to enable it to
meet its obligations under that Exempt Loan and
earnings attributable to such collateral and such
contributions;
(h) The value of Plan assets transferred in
satisfaction of the Exempt Loan upon an event of
default shall not exceed the amount of the
default;
(i) If the lender is a "disqualified person" (as such
term is defined in Section 4975(e) of the Code),
Plan assets may only be transferred upon default
only upon and to the extent of the failure of the
Plan to meet the payment schedule of the Exempt
Loan;
(j) Upon payment of any portion of the balance due on
the Exempt Loan, the assets pledged as collateral
for such portion shall be released from
encumbrance, in accordance with Section 5.10;
(k) The Exempt Loan shall be repaid only from (i)
amounts contributed to the Plan by the Employer in
the form of cash to meet its obligations under the
loan and from amounts earned on Trust investments
and (ii) the proceeds of an Exempt Loan, and (iii)
from collateral given for the Exempt Loan,
including earnings on such collateral, such as
Dividends on Company Stock. Such contributions
and earnings shall be accounted for separately in
the books of accounts of the Plan maintained by
the Committee. The payments made with respect to
an Exempt Loan by the Plan during a Plan Year must
not exceed an amount equal to the sum of such
contributions and earnings received during or
prior to the year less any payments in prior
years.
Any Exempt Loan must be primarily for the benefit of
Participants and their Beneficiaries.
Notwithstanding any other provision of the Plan, all
proceeds of an Exempt Loan shall be used, within a reasonable
time after receipt by the Trust Fund, for the following purposes:
(a) To acquire Company Stock;
(b) To repay the same Exempt Loan; or
(c) To repay any previous Exempt Loan.
TAX\3271.2
ARTICLE IX
ADMINISTRATION
9.1 Board of Directors. The Board of Directors shall have
the following duties and responsibilities in connection with the
administration of the Plan:
(a) making decisions with respect to contributions to
the Plan;
(b) making decisions with respect to amending or
terminating the Plan;
(c) making decisions with respect to the selection,
retention and removal of the Trustee and the
members of the Committee;
(d) periodically reviewing the performance of the
Trustee and the members of the Committee; and
(e) performing such additional duties as are imposed
by law.
The Board of Directors will have all powers and authority
necessary or appropriate to carry out its duties and
responsibilities with respect to the administration of the Plan.
The Board of Directors may by written resolution allocate its
duties and responsibilities to one or more of its members or
delegate such duties and responsibilities to any other persons,
provided, however, that any such allocation or delegation shall
be terminable upon such notice as the Board of Directors deems
reasonable and prudent under the circumstances.
9.2 ESOP Administrative Committee. The ESOP Administrative
Committee (the "Committee") shall administer the Plan and is
designated as the "administrator" within the meaning of Section
3(16) of ERISA. The members of the Committee shall be comprised
of not less than three persons who shall be appointed by the
Board of Directors and who may be removed by the Board of
Directors at any time with or without cause. A Committee member
may resign at any time by filing his written resignation with the
Board of Directors.
All members of the Committee are designated as agents of the
Plan for the service of legal process.
The Company will notify the Trustee in writing of each
Committee member's appointment, and the Trustee may assume such
appointment continues in effect until written notice to the
contrary is given by the Company.
9.3 Committee's Duties and Responsibilities. The Committee
shall have the following duties and responsibilities in
connection with the administration of the Plan:
(a) interpreting and construing the provisions of the
Plan;
(b) determining all questions of eligibility to
participate, eligibility for benefits, the
allocation of contributions, and the status and
rights of Participants and Beneficiaries;
(c) complying with the reporting and disclosure
requirements established by ERISA;
(d) determining and deciding any dispute arising under
the Plan and administering the Plan's claims
procedures;
(e) directing the Trustee concerning all payments to
be made out of the Trust in accordance with the
provisions of the Plan;
(f) establishing procedures for withholding of federal
income tax from distributions;
(g) establishing procedures to prevent the Plan from
engaging in transactions described in Section 406
of ERISA and transactions described in Section
4975(c) of the Code;
(h) establishing equitable accounting methods and
designating additional Valuation Dates;
(i) communicating with Participants and Beneficiaries;
(j) providing a procedure whereby the Participants may
direct the manner in which the Company Stock
allocated to their Company Stock Accounts is to be
voted, and exercising the voting rights in
accordance with such directions;
(k) reviewing the investment performance of the
Trustee, or any designated Investment Manager;
(l) reviewing the performance of any advisors
appointed by the Committee;
(m) making recommendations to the Board of Directors
with respect to the amendment or termination of
the Plan; and
(n) keeping minutes to record its proceedings, acts
and decisions pertaining to the administration of
the Plan.
9.4 Committee's Powers. The Committee will have all powers
and authority necessary or appropriate to carry out its duties
and responsibilities with respect to the operation and
administration of the Plan. It will interpret and apply all
provisions of the Plan and may supply any omission or reconcile
any inconsistency or ambiguity in such manner as it deems
advisable, including the adoption of interpretative memoranda.
All determinations and any actions of the Committee will be
conclusive and binding upon all persons, except as otherwise
provided herein or by law; provided, however, that the Committee
may revoke or modify a determination or action previously made in
error. The Committee will exercise all powers and authority
given to it in a nondiscriminatory manner, and will apply uniform
administrative rules of general application in order to assure
similar treatment to persons in similar circumstances.
The Committee may delegate to any such agent or any sub-
committee or member of the Committee its authority to perform any
duty or responsibility specified in Section 9.3, including those
matters involving the exercise of discretion, provided that such
delegation shall be subject to revocation at any time at the
discretion of the Committee. Any member of the Committee, any
sub-committee or agent to whom the Committee delegates any
authority, and any other person or group of persons, may serve in
more than one fiduciary capacity (including service as both
Committee member and Trustee) with respect to the Plan.
Any action or decision concurred in by a majority of the
Committee members, either at a meeting or in writing without a
meeting, will constitute an action or decision of the Committee.
The Committee may adopt and amend such rules for the conduct of
its business and administration of the Plan as it deems
advisable.
9.5 Chairman of the Committee. The Committee shall elect
any Committee member to serve as Chairman, and may remove him at
any time. The Chairman, or a majority of the Committee members
then in office, will have the authority to execute all
instruments or memoranda necessary or appropriate to carry out
the actions and decisions of the Committee; and any person may
rely upon any instrument or memoranda so executed as evidence of
the Committee's action or decision indicated thereby.
9.6 Claims Review Procedure. If a Participant (or
Beneficiary) believes a benefit or distribution is due under the
Plan, he or she may request the distribution of such benefit, in
writing, on forms acceptable to the Committee. At such time, the
Participant (or Beneficiary) will be given the information and
materials necessary to complete any request for the distribution
of a benefit.
If the request for distribution is disputed or denied, the
following action shall be taken:
(a) First, the Participant (or Beneficiary) will be
notified, in writing, of the dispute or denial as
soon as possible (but no later than 90 days) after
receipt of the request for a distribution. The
notice will set forth the specific reasons for the
denial, including any relevant provisions of the
Plan. The notice will also explain the claims
review procedure of the Plan.
(b) Second, the Participant (or Beneficiary) shall be
entitled to a full review of his or her request
for a distribution. A Participant (or
Beneficiary) desiring a review of the dispute or
denial must request such a review, in writing, no
later than 60 days after notification of the
dispute or denial is received. During the review,
the Participant (or Beneficiary) may be
represented and will have the right to inspect all
documents pertaining to the dispute or denial. Any
such review may include a hearing for the
Participant or his or her designated
representative.
(c) The Committee shall render its decision within 60
days after receipt of the request for the review.
In the event special circumstances require an
extension of time, the Committee shall notify the
Participant (or Beneficiary), and the decision
will be rendered no later than 120 days after the
receipt of the request. The decision of the
Committee shall be in writing. The decision shall
include specific reasons for the action taken and
specific references to the Plan provisions on
which the decision is based.
9.7 Information from Participants and Beneficiaries. Each
Participant and Beneficiary shall be required to furnish to the
Committee, in the form prescribed by it, such personal data,
affidavits, authorization to obtain information, and other
information as the Committee may deem appropriate for the proper
administration of the Plan.
9.8 Actions. Any action taken by the Committee on matters
within its discretion shall be final and binding on the parties
and on all Participants, Beneficiaries or other persons claiming
any right or benefit under the Plan, in the Trust, or in the
administration of the Plan.
All decisions of the Committee shall be uniform and made in
a nondiscriminatory manner.
9.9 Bond. The Employer shall purchase a bond for the
Committee and any other fiduciaries of the Plan in accordance
with the requirements of the Code and ERISA.
9.10 Indemnification. The Employer shall defend and
indemnify to the full extent permitted by law (including ERISA),
which indemnification shall include, but not be limited to,
attorney's fees and any tax imposed as a result of a claim
asserted by any person, persons or entity (including a
governmental entity), any individual serving as a member of the
Committee made or threatened to be made a part to any action,
suit or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that such individual is or
was a member of the Committee.
TAX\3271.2
ARTICLE X
RIGHTS AND OPTIONS
CONCERNING COMPANY STOCK
10.1 Restrictions on Company Stock. Except as provided in
this Article X, no Company Stock acquired with the proceeds of an
Exempt Loan shall be subject to a put, call or other option or
buy-sell or similar agreement while held by the Trustee or when
distributed from the Plan, whether or not the Plan is then an
employee stock ownership plan within the meaning of Code Section
4975(e)(7).
10.2 Right of First Refusal. During any period when Company
Stock is not publicly traded, a Participant (or other recipient
of a distribution from the Plan) shall not sell Company Stock
without first offering such stock to the Trust (and then to the
Employer) at a price equal to the greater of (a) the fair market
value of Company Stock determined as of the most recent Valuation
Date, or (b) the purchase price (or other terms of payment)
offered by a bona fide third party purchaser. A legend shall be
placed on shares of Company Stock to reflect this right of first
refusal.
The Participant or other distributee shall notify the
Committee in writing, of any bona fide third party offer to
purchase and the terms of such offer. The Participant (or
distributee) shall be free to sell to such third party if the
Trust (or the Company) fails to notify the Participant or
distributee, in writing, of its intention to purchase all or any
portion of the Company Stock within 14 days after the Plan
Administrator receives written notification of the offer.
Neither the Company nor the Trustee shall be required to
exercise the right of first refusal provided for in this Section
10.2.
10.3Put Option. If Company Stock is not readily tradable
on an established market (within the meaning of Code Section
409(h) of the Code) at the time of any distribution from the
Plan, a Participant (or other recipient of a distribution of
Company Stock) shall be entitled to put all or any portion of
such stock to the Company (or to the Trustee if the Trustee
elects to assume the obligations of the Company) by notifying the
Company (or Trustee), in writing. The following special rules
shall apply to the exercise of a put pursuant to this Section
10.3:
(a) The put may be exercised by the Participant or
Beneficiary (i) during the 60 day period following
the date on which the Company Stock is initially
distributed from the Plan, or (ii) in the Plan
Year immediately following the Plan Year in which
the initial distribution occurs during the 60 day
period which commences on the date following the
Participant's (or other distributee's) receipt of
a valuation notice in accordance with Section 5.8,
provided the put was not exercised during the 60
day period described in (i).
(b) The consideration paid on the exercise of the put
shall equal the fair market value of the Company
Stock determined as of the Annual Valuation Date
which immediately precedes or coincides with the
date on which the put is exercised.
(c) All or a portion of the consideration received by
a Participant or Beneficiary on the exercise of a
put may consist of a written installment obliga-
tion of the Company (or the Plan if the Trustee
elects to assume the obligations of the Company).
Such installment obligation shall consist of
substantially equal payments over a period not
exceeding 5 years and beginning not more than 30
days after the put option is exercised. The
installment obligation shall provide for the
payment of a reasonable rate of interest and shall
be adequately secured as required by Code Section
409(h)(5) of the Code. If distributions are made
in installments pursuant to Section 7.2(b) or
7.2(c), the amount to be paid for the Company
Stock will be paid no later than 30 days after the
exercise of the put option.
(d) If a Participant or Beneficiary fails to exercise
the put during the period described in paragraph
(a) by notifying the Committee, in writing,
neither the Trustee nor the Company shall have any
obligation to purchase Company Stock distributed
to such Participant or Beneficiary.
10.4 Exercise of Voting Rights. The Trustee shall vote all
Company Stock held in the Trust as directed by the Committee or,
in accordance with the following provisions, by the Participants:
If the Company has a registration-type class of securities
(as defined in Section 409(e)(4) of the Code), then with respect
to all corporate matters, all shares of Company Stock allocated
to the Accounts of Participants shall be voted in accordance with
the directions of such Participants as given to the Committee and
communicated in turn by the Committee to the Trustee. Each
Participant shall be entitled to direct the voting only of the
shares of Company Stock allocated to his Company Stock Account.
If Company Stock is not a registration-type class of
securities (as defined in Section 409(e)(4) of the Code), each
Participant shall be entitled to direct the Trustee as to the
exercise of voting rights attributable to Company Stock allocated
to his or her Accounts concerning any corporate matter which
involves the voting of Company Stock with respect to the approval
or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution,
sale of substantially all the assets of a trade or business, or
such similar transaction as may be prescribed in Regulations.
Prior to any meeting of the stockholders of the Company, the
Committee shall determine the number of shares of Company Stock
(including fractional shares) allocated to each Participant which
the Participant shall be entitled to vote. Within a reasonable
time (not less than 30 days) before any shareholder meeting, the
Committee shall provide the Participant with a form necessary to
indicate his vote as to any specific or general matter to be
considered by the stockholders at such meeting. In addition, the
Committee shall provide the Participants with all information
distributed to shareholders by the Committee for the exercise of
such voting rights. The Committee shall not make any
recommendations regarding the manner of exercising any voting
rights. If a Participant shall fail, or refuse, to give the
Committee timely and adequate instructions as to how to vote any
Company Stock, the Committee shall not exercise its power to vote
those shares of Company Stock. The Committee shall be entitled
to hire an independent third party to tabulate votes in order to
ensure the confidentiality of such vote.
With respect to Company Stock not allocated to Participants'
Accounts, the Committee shall instruct the Trustee, in writing,
how to vote such shares.
Each Participant or, in the event of the Participant's
death, the Participant's Beneficiary is, for purposes of voting
the Company Stock allocated to his Company Stock Account, hereby
designated as "named fiduciary" within the meaning of Section
403(a)(1) of ERISA.
10.5 Tender Offer. The Trustee shall notify each
Participant of a tender or exchange offer and utilize its best
efforts to distribute to Participants in a timely manner all
information distributed to shareholders of the Company in
connection with any such tender or exchange offer. Each
Participant shall have the right from time to time to instruct
the Trustee in writing as to the manner in which to respond to
any tender or exchange offer with respect to Company Stock
allocated to his Company Stock Account which shall be pending or
which may be made in the future for all Shares or any portion
thereof. A Participant's instructions shall remain in force
until superseded in writing by the Participant. The Participant
shall have the right to determine confidentially whether shares
allocated to a Participant's account are tendered or exchanged
and the Trustee and Committee shall establish procedures to
ensure such confidentiality.
Unless and until a Participant's Company Stock is tendered
or exchanged, the individual instructions received by the Trustee
from the Participant shall be held by the Trustee in strict
confidence and shall not be divulged or released to any person,
including officers of the Company; provided, however, that the
Trustee shall advise the Company, at any time, upon request, of
the total number of shares not subject to instructions to tender
or exchange.
With respect to (a) Company Stock not allocated to
Participants' Accounts or (b) Company Stock allocated to
Participants' Accounts for which proper directions have not been
received from Participants, such stock shall be tendered or
exchanged by the Trustee in accordance with directions received
from the Committee. The Committee shall instruct the Trustee in
response to the tender offer in accordance with ERISA's fiduciary
duties to act as a prudent person would act in a similar
situation and to act solely in the interests of the Participants
and their Beneficiaries. In exercising its fiduciary
responsibility, the Committee shall consider (to the extent
permitted by Department of Labor or Internal Revenue Service
Regulations or announcements) not only the potential increase in
value if any of the Participants' Accounts as a result of the
tender or exchange offer, but also the impact of any change in
the managerial control of the Company on the status of the
Participants as Employees in the long-run, including but not
limited to whether they will receive larger or smaller employee
benefits than at present under the Plan.
Each Participant or, in the event of the Participant's
death, the Participant's Beneficiary is, for purposes of
responding to any tender or exchange offer with respect to
Company Stock allocated to his Company Stock Account, hereby
designated as "named fiduciary" within the meaning of Section
403(a)(1) of ERISA.
10.6 Investment Diversification. A Participant who has both
attained age 55 and completed 10 years of participation in the
Plan shall have the right to elect to diversify up to 25% of any
Post-1986 Company Stock held in his Company Stock Account, less
any amount to which a prior election applies or which has been
previously diversified. The election must be made within the 90
day period after the close of the Plan Year to which the election
applies. The election shall apply to each Plan Year in the 6
year period beginning with the first Plan Year after the Plan
Year in which the Participant attains age 55 (or, if later, the
Plan Year after the Plan Year in which the Participant completes
10 years of participation under the Plan and has attained age
fifty-five (55)). For the last Plan Year in which the Participant
can make an election, the Participant shall be entitled to direct
the investment of 50% of the Post-1986 Company Stock, if any,
held in his Company Stock Account, less any amount to which a
prior election applies or which has been previously diversified.
If a Participant elects to diversify the investment of his
Post-1986 Company Stock, the Committee shall direct the Trustee
to distribute, within 90 days after the election period, the
portion of the Participant's Post-1986 Company Stock covered by
the election. Alternatively, the Plan may offer, in the sole
discretion of the Committee, at least 3 investment options (not
inconsistent with applicable Treasury Department Regulations) to
Participants making an election to diversify their investment
under this Section 10.6.
TAX\3271.2
ARTICLE XI
AMENDMENT OF THE PLAN
11.1 Right to Amend or Suspend Contributions. Subject to
the provisions of Section 11.3 and any applicable contribution or
loan agreement, the Board of Directors reserves the right to
amend the Plan or Trust or suspend contributions to the Plan, in
whole or in part, at any time and for any reason without the
consent of any Participating Employer, Participant or
Beneficiary. Each amendment of the Plan shall be in writing, and
shall be effective on the date specified therein. Notice of any
amendment, executed by order of the Board of Directors,
modification or suspension of contributions to the Plan shall be
given by the Board of Directors to the Committee, the Trustee,
and to all Participating Employers.
11.2 Amendment by Committee. Notwithstanding Section 12.1,
the Committee may adopt any amendment which may be necessary or
appropriate to facilitate the administration, management and
interpretation of the Plan or to conform the Plan thereto, or to
qualify or maintain the Plan and Trust as a plan and trust
meeting the requirements of Sections 401(a), 501(a) and
4975(e)(7) of the Code or any other applicable section of law and
the Regulations issued thereunder, provided said amendment does
not have any material effect on the currently estimated cost to
the Employer maintaining the Plan. Such amendment shall be in
writing, executed by a majority of the Committee members and
shall be effective on the date specified therein. Notice of any
such amendment by the Committee shall be given to the Board of
Directors, the Trustee and to all Participating Employers.
11.3 Restriction on Amendment. No amendment of the Plan may
be made which shall either (i) deprive any Participant or
Beneficiary of any part of his Accounts as constituted at the
time of such amendment, or (ii) make it possible for any part of
the Plan assets (other than such part as is required to pay
taxes, if any, and administrative expenses as provided in Section
14.12) to be used for or diverted to any purposes other than for
the exclusive benefit of Participants and Beneficiaries under the
Plan prior to the satisfaction of all liabilities of the Plan.
11.4 Retroactivity. Any amendment or modification of any
provisions of the Plan may be made retroactively if necessary or
appropriate to qualify or maintain the Plan or the Trust as a
plan and trust meeting the requirements of Section 401(a), 501(a)
or 4975 of the Code or any other applicable section of law
(including ERISA) and the Regulations issued thereunder.
TAX\3271.2
ARTICLE XII
TERMINATION OF THE PLAN
12.1 Events Constituting Termination. It is expressly
declared to be the desire and intention of each Participating
Employer to continue the Plan in existence for an indefinite
period of time. However, circumstances not now anticipated or
foreseeable may arise in the future, as a result of which a
Participating Employer may deem it impractical or unwise to
continue the Plan established hereunder, and each Participating
Employer therefore reserves the right to terminate the Plan at
any time insofar as it affects its Employees. Any Participating
Employer may terminate its participation in the Plan by action of
its board of directors. Such termination shall be evidenced by
an instrument of termination executed by an officer of the
Participating Employer pursuant to authorization by its board of
directors specifying a withdrawal date which shall be the last
day such notice is received by the Committee or the Trustee,
whichever receives such notice the latest. The notice shall also
be delivered to the Board of Directors and to each other
Participating Employer. To the maximum extent permitted by
ERISA, the termination of the Plan as to any Participating
Employer shall not in any way affect any other Participating
Employer's participation in the Plan.
With respect to any Participating Employer which has adopted
the Plan, its adjudication of bankruptcy or insolvency by any
court of competent jurisdiction, its making of a general
assignment for the benefit of creditors, its dissolution, merger,
consolidation, other reorganization or discontinuance of
business, unless coverage for its Employees under the Plan is
continued by a successor company, or its complete discontinuance
of contributions, shall operate to terminate the Plan with
respect to such Participating Employer.
The Committee may require any Participating Employer to
withdraw from the Plan for failure of the Participating Employer
to make proper contributions or to comply with any other
provision of the Plan. In the event of any such withdrawal, the
Committee shall promptly notify the Internal Revenue Service and
request such determination as counsel to the Plan may recommend
and as the Committee may deem desirable.
12.2 Partial Termination. Upon the withdrawal of one or
more Participating Employers or upon the termination of active
participation of a group of Employees, the Committee shall
determine, upon the advice of counsel to the Plan and under
applicable law, whether a partial termination has occurred with
respect to a group of Participants.
12.3 Liquidation of the Trust Fund. Upon termination or
partial termination of the Plan or upon complete discontinuance
of contributions, the Accounts of all affected Participants shall
become fully vested and nonforfeitable. Upon the termination or
partial termination, the Committee shall continue to administer
the Plan and the Trustee shall continue to administer the Trust
Fund and all payments to Participants shall continue in
accordance with the provisions of Article VII; provided, however,
that in the event of a partial termination the Committee may
direct the Trustee to segregate the assets attributable to the
Accounts of the affected Participants and apply such segregated
assets for the benefit of such Participants.
Notwithstanding the foregoing paragraph, upon or after the
termination of the Plan, if the Board of Directors shall
determine that the continuance of the Trust is not in the best
interests of Participants and Beneficiaries, the Board of
Directors shall terminate the Trust.
To the extent that no discrimination results, any
distribution after termination of the Plan may be made, in whole
or in part, in cash, securities or other assets in kind (based on
their fair market value as of the date of distribution), as the
Committee in its sole discretion shall determine, subject to the
provision of any applicable law or regulations.
12.4 Internal Revenue Service Approval for Distribution. In
the event that the Committee applies to the Internal Revenue
Service for determination on the qualification of the Plan upon
termination, no person shall have any right or claim to any
assets of the Trust Fund before the Internal Revenue Service
shall determine that the proposed distribution of assets under
this Article XII does not result in a discrimination prohibited
by Section 401(a) of the Code.
TAX\3271.2
ARTICLE XIII
TOP HEAVY PROVISIONS
13.1 Top Heavy Plan. The Plan will be considered a Top
Heavy Plan for any Plan Year if it is determined to be a Top
Heavy Plan as of the last day of the preceding Plan Year.
Notwithstanding any other provisions in the Plan, the provisions
of this Article XIII shall apply and supersede all other
provisions in the Plan with respect to a Plan Year for which the
Plan is a Top Heavy Plan.
13.2 Definitions for Article XIII. For purposes of this
Article XIII and as otherwise used in this Plan, the following
terms shall have the meanings set forth below:
(a) "Aggregation Group" shall mean the group composed
of each qualified retirement plan of a
Participating Employer or an Affiliated Company in
which a Key Employee is a Participant and each
other qualified retirement plan of a Participating
Employer or an Affiliated Company which enables a
plan of a Participating Employer or an Affiliated
Company in which a Key Employee is a Participant
to satisfy Sections 401(a)(4) or 410 of the Code.
In addition, the Company may choose to treat any
other qualified retirement plan as a member of the
Aggregation Group if such Aggregation Group will
continue to satisfy Sections 401(a)(4) and 410 of
the Code with such plan being taken into account.
(b) "Key Employee" shall mean a "Key Employee" as
defined in Section 416(i)(1) and (5) of the Code
or Regulations. For purposes of determining which
employee is a Key Employee, compensation shall
mean "compensation" as defined in Section 1.415-
2(d) of the Regulations but including employer
contributions made pursuant to a salary reduction
arrangement.
(c) This Plan shall be a "Top Heavy Plan" for any Plan
Year if, as of the Determination Date (as defined
in paragraph (d) below), the aggregate of the
Accounts under the Plan for Participants who are
Key Employees (as defined in paragraph (b), above)
exceeds 60% of the aggregate of the Accounts of
all Participants or if this Plan is required to be
in an Aggregation Group (as defined in paragraph
(a), above) which for such Plan Year is a top-
heavy group.
(d) "Determination Date" means for any Plan Year the
last day of the immediately preceding Plan Year.
13.3 Vesting. If the Plan is a Top Heavy Plan with respect
to any Plan Year, the Vested Interest of each Participant who has
performed one Hour of Service on or after the date the Plan
becomes a Top Heavy Plan shall not be less than the percentage
determined in accordance with the following vesting schedule:
---------------------------------------------
Years of Service Vested Interest
Less than 2 years 0%
2 years but less than 3 20%
3 years but less than 4 40%
4 years but less than 5 60%
5 years but less than 6 80%
6 years or more 100%
13.4 Minimum Contribution. For each Plan Year that the Plan
is a Top Heavy Plan, the Employer Contribution (including
forfeitures but excluding rollovers and transfers pursuant to
Section 14.9) allocable to the Accounts of each Participant who
has performed an Hour of Service at the end of the Plan Year and
who is not a Key Employee, shall not be less than the lesser of
(i) 3% of such Participant's compensation, within the meaning of
Section 415 of the Code, or (ii) the percentage at which
contributions and forfeitures for such Plan Year are made and
allocated on behalf of the Key Employee for whom such percentage
is the highest. Such allocation shall be made for each
Participant who is not a Key Employee and who is employed by the
Employer through the last payroll period ending within the Plan
Year. For the purpose of determining the appropriate percentage
under clause (i), all defined contribution plans required to be
included in an Aggregation Group shall be treated as one plan.
Clause (ii) shall not be applicable if the Plan is required to be
included in an Aggregation Group which enables a defined benefit
plan also required to be included in said Aggregation Group to
satisfy Sections 401(a)(4) or 410 of the Code. Compensation, for
purposes of determining a minimum contribution, is defined in
Section 5.12(d).
13.5 Limitations on Contributions. For each Plan Year that
the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25
as the multiplicand of the dollar limitation in determining the
denominator of the defined benefit plan fraction and of the
defined contribution plan fraction for purposes of Section 415(e)
of the Code. If, after substituting 90 percent for 60 percent
wherever the latter appears in Section 416(g) of the Code, the
Plan is not determined to be a Top Heavy Plan, the provisions of
this Section 13.5 shall not be applicable if the minimum Employer
Contribution (including forfeitures) allocable to the Accounts of
any Participant who is not a Key Employee is determined by
substituting "4" for "3". If the Participant is a participant in
both a defined contribution plan and a defined benefit plan, the
benefit from the defined contribution plan minimum shall be
comparable to a 3% defined benefit plan benefit.
13.6 Other Plans. The Committee shall, to the extent
permitted by the Code and in accordance with the Regulations,
apply the provisions of this Article XIII by taking into account
the benefits payable and the contributions made under any other
plans maintained by a Participating Employer or Affiliated
Company which are qualified under Section 401(a) of the Code to
prevent inappropriate omissions or required duplication of
minimum benefits or contributions by making a comparability
analysis to prove that the defined contribution plan is providing
a benefit at least equal to the minimum benefit under the defined
benefit plan.
TAX\3271.2
ARTICLE XIV
GENERAL PROVISIONS
14.1 Plan Voluntary. Although it is intended that the Plan
shall be continued and a contribution shall be made as provided
herein, this Plan is entirely voluntary on the part of the
Participating Employers and the continuance of this Plan and the
payment of contributions hereunder are not to be regarded as
contractual obligations of the Participating Employers. The Plan
shall not be deemed to constitute a contract between a
Participating Employer and any Employee or to be a consideration
for, or an inducement for, the employment of a Employee by a
Participating Employer. Nothing contained in the Plan shall be
deemed to give any Employee the right to be retained in the
service of a Participating Employer or to interfere with the
right of a Participating Employer to discharge or to terminate
the service of any Employee at any time without regard to the
effects such discharge or termination may have on any rights
under the Plan.
14.2 Payments to Minors and Incompetents. If a Participant
or Beneficiary entitled to receive any benefits hereunder is a
minor or is deemed by the Committee, or is adjudged, to be
legally incapable of giving valid receipt and discharge for such
benefits, such benefits will be paid to such person or
institution as the Committee may designate or to the duly
appointed guardian. Such payment shall, to the extent made, be
deemed a complete discharge of any liability for such payment
under the Plan.
14.3 Missing Payee. If the Committee cannot ascertain the
whereabouts of any person to whom a payment is due under the
Plan, and if, after 1 year from the date such payment is due, a
notice of such payment due is mailed to the last known address of
such person, as shown on the records of the Committee or the
Company, and within 3 months after such mailing such person has
not made written claim therefore, the Committee, if it so elects,
may direct that such payment and all remaining payments otherwise
due to such person, be canceled on the records of the Plan and
the amount thereof treated as a forfeiture after 5 consecutive
One Year Breaks in Service. Upon such cancellation, the Plan and
the Trust shall have no further liability therefor, except that,
in the event such person later notifies the Committee of his
whereabouts and requests the payment or payments due to him under
the Plan and notifies the Committee of the desired form of
payment, the amount forfeited shall be paid to him as provided
herein.
The provisions of 14.3 shall not be instituted until a
Participant or Beneficiary has been provided with no less than
three written notices requesting the Participant or Beneficiary
to complete and return the application form. The final notice
will specifically advise the Participant or Beneficiary that his
benefit shall not be paid unless he provides the required
information concerning his benefit election and that his benefit
may be forfeited pursuant to Section 14.3.
14.4 Required Information. Each Participant shall file with
the Committee such pertinent information concerning himself, his
spouse and his Beneficiary as the Committee may specify, and no
Participant, or Beneficiary, or other person shall have any
rights or be entitled to any benefits under the Plan unless and
until such information is filed by or with respect to him.
The terms "pertinent information" includes a Participant's
or Beneficiary's selection of his desired form of benefit
following his termination of employment.
14.5 Subject to Trust Agreement. Any and all rights or
benefits accruing to any persons under the Plan shall be subject
to the terms of the Trust Agreement.
14.6 Subject to Contract. If the payment of any benefit
under the Plan is provided for by a contract with an insurance
company the payment of such benefit shall also be subject to all
the provisions of such contract.
14.7 Communications to Committee. All elections,
designations, requests, notices, instructions, and other
communications from a Participating Employer, a Participant,
Beneficiary, or other person to the Committee required or
permitted under the Plan (i) shall be in such form as is
prescribed from time to time by the Committee, (ii) shall be
mailed by first-class mail or delivered to such location as shall
be specified by the Committee, and (iii) shall be deemed to have
been given and delivered only upon actual receipt thereof by the
Committee at such location.
14.8 Communications from Employer or Committee. All
notices, statements, reports and other communications from the
Company, a Participating Employer or the Committee to any
Employee, Participant or Beneficiary shall be deemed to have been
duly given when delivered to, or when mailed by first-class mail,
postage prepaid and addressed to, such Employee, Participant or
Beneficiary at his address last appearing on the records of the
Committee or Company, or when posted by the Company or the
Committee as permitted by law.
14.9 Transfers and Rollovers. Upon such terms and
conditions as the Committee may approve, and subject to any
required approval by the Internal Revenue Service, benefits may
be provided under the Plan to a Participant with respect to any
period of his prior employment by any organization, and such
benefits (and any Hours of Service credited with respect to such
period of employment under Section 1.20) may be provided for, in
whole or in part, by funds transferred, directly or indirectly
(including a rollover from a conduit individual retirement
account, an individual retirement annuity or a retirement bond as
described under the Code), to the Trust from an employee benefit
plan of such organization which qualified under Section 401(a) of
the Code. Such amounts shall be credited to the Participant's
"Rollover Contribution Account." A Participant shall be fully
vested in his Rollover Contribution Account.
14.10Action. Except as may be specifically provided herein,
any action required or permitted to be taken by the Employer may
be taken on behalf of the Employer by any authorized officer of
the Employer.
14.11Liability for Benefits. Neither the Trustee, the
Employer, the Committee nor the Plan Administrator guarantee the
Trust from loss or depreciation, nor do they guarantee any
payment to any person. The liability of the Trustee, the
Employer, the Committee and the Plan Administrator to make any
payment is limited to the available assets of the Trust.
14.12Named Fiduciary. The Participating Employer, the
Trustee, the Committee and any Investment Manager will be the
"Named Fiduciaries" under the Plan within the meaning of ERISA
Section 403.
14.13Gender. Whenever used in the Plan the masculine gender
includes the feminine.
14.14Captions. The captions preceding the sections of the
Plan have been inserted solely as a matter of convenience and in
no way define or limit the scope or intent of any provisions of
the Plan.
14.15Applicable Law. The Plan and all rights thereunder
shall be governed by and construed in accordance with ERISA and
the laws of the State of Louisiana.
14.16Expenses. The expenses of administering the Plan
including (i) the fees and expenses of the Trustee for the
performance of its duties under the Trust, (ii) the expenses
incurred by the members of the Committee in the performance of
their duties under the Plan (including reasonable compensation
for services rendered in respect of the Plan by legal counsel,
certified public accountants, appraisers or other agents employed
by the Committee), and (iii) all other proper charges and
disbursements of the Company, Trustee or the members of the
Committee (including settlements of claims or legal actions
approved by counsel to the Plan) are to be paid out of the Trust
unless the Company pays such expenses directly. In estimating
costs under the Plan, administrative costs may be anticipated.
However, no person serving as a Trustee or member of the
Committee who already received full-time pay from the Employer
shall receive compensation from the Trust, except for
reimbursement of expenses properly and actually incurred.
EXECUTED in multiple originals in New Orleans, Louisiana,
effective as of the 28 day of December, 1994.
WITNESSES: AVONDALE INDUSTRIES, INC
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President & Chief
Financial Officer
AVONDALE GULFPORT MARINE INC.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President & Chief
Financial Officer
AVONDALE INDUSTRIES OF
NEW YORK, INC.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President, Treasurer
& Secretary
AVONDALE SERVICES CORP.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President & Secretary
AVONDALE SHIPYARDS OF TEXAS, INC.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President & Secretary
AVONDALE TRANSPORTATION
COMPANY, INC.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President & Secretary
AVONDALE ENTERPRISES, INC.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President, Secretary &
Treasurer
AVONDALE CONSTRUCTION MANAGEMENT,
INC.
\s\ B. L. Hicks BY: \s\ Thomas M. Kitchen
\s\ Jan T. White Vice President & Secretary
TAX\3271.2
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Industries, Inc. for the purposes
therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President & Chief
Financial Officer &
Secretary
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Gulfport Marine, Inc. for the purposes
therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President, Secretary
& Treasurer
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Industries of New York, Inc. for the
purposes therein set forth.
BY:\s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President, Treasurer
& Secretary
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Services Corporation for the purposes
therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President & Secretary
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Shipyards of Texas, Inc. for the
purposes therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President & Secretary
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Transportation Company, Inc. for the
purposes therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President & Secretary
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGEMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the Foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Enterprises, Inc. for the purposes
therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President, Secretary
& Treasurer
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28th DAY
OF DECEMBER. 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
ACKNOWLEDGEMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared Thomas M. Kitchen, who being by me sworn did
depose and state that he signed the Foregoing Avondale
Industries, Inc. Employee Stock Ownership Plan as a free act and
deed on behalf of Avondale Construction Management, Inc. for the
purpose therein set forth.
BY: \s\ Thomas M. Kitchen
Print Name: Thomas M. Kitchen
Title: Vice President & Secretary
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 28TH DAY
OF DECEMBER, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC
TAX\3271.2
APPENDIX "A"
Participating Employers
The following Participating Employers have entered under
this Plan as of the following dates. Such dates of participation
shall be used for purposes of determining such Participating
Employer's Employees' eligibility to participate under the Plan.
Such dates shall also be used for determining Years of Service
for both vesting and benefit accrual purposes under the Plan, if
later than the dates in Section 1.40 of the Plan.
-----------------------------------------------------------------
Participating Employer Date of Participation
Avondale Industries, Inc. September 1, 1985
Avondale Services, Corporation September 1, 1985
Avondale Gulfport Marine, Inc. July 2, 1988
Avondale Construction Management, Inc.* September 1, 1985
Avondale Industries of New York, Inc. October 11, 1988
Avondale Shipyards of Texas, Inc.* September 1, 1985
Avondale Transportation Company, Inc. September 1, 1985
Avondale Enterprises, Inc. November 21, 1989
*inactive companies
AVONDALE INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP TRUST
(Amended and Restated January 1, 1994)
AVONDALE INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP TRUST
Avondale Industries, Inc. (the "Company"), a corporation
organized and existing under the laws of the State of Louisiana,
originally adopted the Avondale Industries, Inc. Employee Stock
Ownership Trust (the "Trust") effective September 1, 1985. The
Trust as amended and restated effective January 1, 1994 is
entered into by and between the Company and Blanche S. Barlotta,
R. Dean Church and Rodney J. Duhon (collectively the Trustee).
WHEREAS, effective as of September 1, 1985 an employee stock
ownership plan called the Avondale Industries, Inc. Employee
Stock Ownership Plan, which plan, has been amended from time to
time, and most recently amended effective January 1, 1989 is
hereinafter referred to as the "Plan";
WHEREAS, the Plan was established by Avondale Industries,
Inc. to encourage Employees to make and continue careers with
Avondale Industries, Inc., and other Participating Companies, by
allowing Participants to obtain beneficial interests in the stock
of Avondale Industries, Inc., all as set forth in the Plan;
WHEREAS, the Plan provides for the establishment of a trust
to which contributions to the Plan are to be made by the Company
and Participating Companies, and under which such contributions
are to be held by the Trustee and invested primarily in the stock
of the Company, all in accordance with the provisions of the Plan
and such trust;
WHEREAS, the Plan and the Trust are intended to qualify as a
stock bonus plan and trust under Section 401(a) of the Code and
as an employee stock ownership plan, as defined by Section
4975(e)(7) of the Code, designed to invest primarily in the stock
of the Company, and the Trust is intended to be exempt from
taxation under Section 501(a) of the Code;
WHEREAS, the ESOP Administrative Committee (the
"Committee"), the members of which are "named fiduciaries" as
defined in the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") has general responsibility for the
administration and interpretation of the Plan and shall establish
investment standards and policies and communicate the same to the
Trustee;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company, the Trustee and the Committee
declare and agree as follows:
ARTICLE I
Title and Definitions
1.1 Title. The Trust shall be known as the Avondale
Industries, Inc. Employee Stock Ownership Trust
1.2 Incorporation of Plan Definitions. Definitions set
forth in the Plan shall have the same meaning wherever used in
the Trust unless the context clearly indicates otherwise.
1.3 Named Fiduciary. The Committee shall be the named
fiduciary of the Trust for purposes of Section 402 of ERISA,
except that each Participant shall be a named fiduciary with
respect to the exercise of voting and tender offer rights for
Company Stock held as part of the Trust Fund to the extent that
such Participant exercises such rights pursuant to Sections 10.4
and 10.5 of the Plan and Article XI of the Trust. The Committee
shall, upon request of the Trustee, furnish the Trustee with
whatever information is reasonably necessary for the Trustee to
carry out their fiduciary responsibilities under ERISA.
1.4 Custodian. "Custodian" shall mean the entity, if any,
appointed from time to time by the Committee to hold, but not
invest or otherwise manage or control, some or all of the assets
of the Trust. The terms and provisions of any agreement with a
Custodian are hereby incorporated by reference.
ARTICLE II
Trust Fund
2.1 Contributions to and Investment of the Trust Fund. All
Participating Company contributions shall be paid to the Trustee
from time to time in accordance with the Plan. All such
contributions and all investments thereof, together with all
accumulations, accruals, earnings and income with respect
thereto, shall be held by the Trustee in Trust hereunder or by
one or more Custodians or both by the Trustee and by one or more
Custodians. Notwithstanding the foregoing, the Trust shall
constitute a single trust for purposes of investment and
administration. All Trust assets shall be invested, reinvested,
managed, administered and distributed by the Trustees upon the
written instructions of the Committee pursuant to the provisions
of the Plan and Trust. Except as may otherwise be required under
Sections 5.2 and 5.3, the Trustee shall not be responsible for
the administration of the Plan, for maintaining any records of
Participants' Accounts under the Plan, or for computation or
collection of Participating company contributions. The Trustee
shall hold, invest, reinvest, manage, administer and distribute
the Trust Assets, solely as directed by the Committee and as
provided herein, for the exclusive benefit of Participants and
their Beneficiaries.
2.2 Claims against the Trust Fund. Subject to the claims
procedure provided under the Plan (or the grievance procedure
provided in any applicable collective bargaining agreement), the
Committee shall have complete control and authority to determine
the existence, nonexistence, nature and amount of the rights and
interests of all persons in or to the Trust or under the Plan.
Except as otherwise required by ERISA, the Trustee shall have no
duty to question or to examine any determination made by the
Committee or direction given by the Committee to the Trustee in
respect of such matters.
ARTICLE III
Investment of Trust Assets
3.1 General Powers. Upon the written instructions of the
Committee, the Trustee shall invest and reinvest the assets of
the Trust Fund primarily in Company Stock, except for cash or
cash equivalent investments held
a. for the limited purpose of making Plan
distributions to Participants,
b. pending the investment of contributions or other
cash receipts in Company Stock, or
c. pending use to repay an Exempt Loan.
Upon the direction of the Committee, the Trustee may cause the
Plan to enter into one or more Exempt Loans to finance the
acquisition of Company Stock.
3.2 Other Investments. Upon the written instructions of
the Committee, the Trustee may also invest and reinvest the
assets of the Trust Fund; in interest-bearing accounts or
certificates of deposit offered by any bank (including the
Trustee or the Custodian) or savings and loan association; real
estate, stocks, notes, debentures, shares or obligations of
corporations or of unincorporated associations or trusts or
investment companies; any kind of investment fund (including any
pooled investment fund maintained by the Trustee or the
Custodian); or in such other property, real, personal or mixed,
without regard to whether such investment is an authorized or
appropriate investment for trustees under any state laws; or the
assets of the Trust may be held in cash for a reasonable period
of time.
3.3 Restricted Securities. In the event the Trustee
invests any Trust assets in Company Stock, and the Trustee
thereafter disposes of such Company Stock or any part thereof,
under circumstances which require registration of the Company
Stock under the Securities Act of 1933 or qualification of the
securities under the Blue Sky laws of any state, or both, then
the Company at its own expense, will take or cause to be taken
any and all such action as may be necessary or appropriate to
effect such registration or qualification, or both.
3.4 Liability of Trustee. To the maximum extent permitted
by law, the Trustee shall not be liable for the acquisition,
retention or disposition of any assets of the Trust or for any
loss to or diminution of such assets unless due to their own
willful misconduct or failure to act in good faith.
ARTICLE IV
Trustee's Powers
4.1 Trustee's Powers. The Trustee shall have the authority
and power to:
a. Contract or otherwise enter into transactions
between themselves as Trustee and the Company, its
subsidiaries and affiliates, or any shareholders
of the Company upon the written instructions of
the Committee for the acquisition or sale of
Company Stock, subject to paragraph (l) below;
b. Sell, transfer, mortgage, pledge, lease or
otherwise dispose of, or grant options with
respect to, any Trust assets, including Company
Stock, at public or private sale;
c. Borrow from any lender (including the Company or
any shareholder of the Company) pursuant to an
Exempt Loan (as defined in Section 4.2) to acquire
Company Stock as authorized by the Trust upon the
written instructions of the Committee by entering
into lending agreements upon any terms (including
reasonable interest and security for the loan) as
may be necessary or appropriate;
d. Borrow money from any lender other than pursuant
to an Exempt Loan upon the written instructions of
the Committee, to the extent and upon such terms
and conditions as the Committee deems advisable or
proper to carry out the purposes of the Trust and
as are permitted by the Regulations;
e. Vote any stocks, bonds or other securities held in
the Trust, including Company Stock which shall be
voted in accordance with Article XI of the Trust;
f. Purchase or offer to purchase any security,
including Company Stock, from any individual or
entity either on an established market or directly
from such individual or entity, without regard to
any prevailing market price upon the written
instruction of the Committee;
g. Give general or specific proxies or powers of
attorney with or without powers of substitution;
h. Except as provided in Article XI, participate in,
oppose, or consent to, reorganizations,
recapitalizations, consolidations, mergers,
liquidations and similar transactions with respect
to any corporation, company or association, or to
the sale or pledge of the property of any
corporation, company or association any of the
securities of which may at any time be held in the
Trust Fund, and to do any act with reference
thereto, including the exercise of options, the
making of agreements or subscriptions which may be
deemed necessary or advisable in connection
therewith, and to hold and retain any securities
or other property which it may so acquire;
provided, however, that the Trustee may exercise
this power and authority only to the extent not
inconsistent with the provisions of the Plan and
Trust and further provided that the Trustee shall
make demand upon the Participating Companies, and
the Participating Companies shall pay its
proportionate share of any expenses or assessments
in connection with the exercise of such power by
the Trustee;
i. Deposit such Company Stock or other securities in
any voting trust, or with any protective,
reorganization or like committee, or with a
trustee or with depositories designated thereby
and delegate discretionary power to any such
committee upon the written instructions of the
Committee; provided, however, that the Trustee
shall make demand upon the Participating
Companies, and each Participating Company shall
pay its proportionate share of the expenses and
compensation of any such committee and any
assessments levied with respect to any property so
deposited;
j. Exercise any conversion privilege or subscription
right available in connection with any property
held by the Trust upon the written instructions of
the Committee;
k. Commence or defend suits or legal proceedings and
to represent the Trust in all suits or legal
proceedings; to settle, compromise or submit to
arbitration any claims, debts or damages due or
owing to or from the Trust; provided, however,
that the Trustee except in the case of a suit,
legal proceeding or claim involving solely the
Trustee's actions or omissions to act, shall
obtain the written consent of the Company before
settling, compromising or submitting to binding
arbitration any claim, suit or legal proceeding of
any nature whatsoever arising under ERISA;
l. Perform all acts which the Trustee deems necessary
or appropriate and exercise any and all powers and
authority of the Trustee under the Trust;
provided, however, that the Trustee shall not
engage in any "prohibited transaction," as that
term is used in ERISA, the Code or the
Regulations;
m. Exercise any of the powers of an owner, with
respect to such Company Stock and other securities
or other property comprising the Trust, pursuant
to the written instructions of the Committee and
to the extent consistent with the Plan and
paragraphs (a), (d) and (g) of this Article IV;
n. Form or incorporate and own or maintain any entity
including but not limited to a partnership,
corporation or trust;
o. Transfer assets of the Trust Fund to a successor
trustee as provided for in Section 5.7;
p. Make, execute and deliver, as Trustee, any and all
notes, bonds, guarantees, conveyances, contracts,
waivers, releases or other instruments in writing
necessary or proper for the accomplishment of any
of the foregoing powers; and
q. Exercise, generally, any of the powers which an
individual owner might exercise in connection with
property either real, personal or mixed held by
the Trust Fund, and to do all other acts that the
Trustee may deem necessary or proper to carry out
any of the powers set forth in this Article IV or
otherwise in the best interests of the Trust.
4.2 Exempt Loans.
a. The terms of any Exempt Loan shall comply with
each of the following requirements:
i. The terms shall be as favorable to the Plan
as the terms of a comparable loan from arms-
length negotiations between independent
parties;
ii. The interest rate shall be no more than a
reasonable interest rate considering all
relevant factors including the amount and
duration of the Exempt Loan, the security and
guarantee involved, the credit standing of
the Plan and the guarantor of the Exempt Loan
and the interest rate prevailing for
comparable loans;
iii. The Exempt Loan shall be without recourse
against the Plan;
iv. The Exempt Loan must be for a specific term;
v. The Exempt Loan may not be payable at the
demand of any person except in the case of
default;
vi. The only assets of the Trust that may be
given as collateral on the Exempt Loan are
Company Stock acquired with the proceeds of
the same Exempt Loan or Company Stock used as
collateral on a prior Exempt Loan and repaid
with the proceeds of the same Exempt Loan;
vii. No person entitled to payment under the
Exempt Loan shall have any right to assets of
the Trust other than collateral given for
that Exempt Loan, contributions made to the
Plan to enable it to meet its obligations
under that Exempt Loan and earnings
attributable to such collateral and such
contributions;
viii.The value of Trust assets transferred in
satisfaction of the Exempt Loan upon an event
of default shall not exceed the amount of the
default;
ix. If the lender is a "disqualified person" (as
such term is defined in Section 4975(e) of
the Code), Trust assets may be transferred
upon default only upon and to the extent of
the failure of the Plan to meet the payment
schedule of the Exempt Loan;
x. Upon payment of any portion of the balance
due on the Exempt Loan, the assets pledged as
collateral for such portion shall be released
from encumbrance;
xi. The Exempt Loan shall be repaid only from (i)
amounts contributed to the Plan by the
Employer in the form of cash to meet its
obligations under the loan and from amounts
earned on Trust investments and (ii) the
proceeds of an Exempt Loan, and (iii) from
collateral given for the Exempt Loan,
including earnings on such collateral, such
as Dividends on Company Stock. Such
contributions and earnings shall be accounted
for separately in the books of accounts of
the Plan maintained by the Committee. The
payments made with respect to an Exempt Loan
by the Plan during a Plan Year must not
exceed an amount equal to the sum of such
contributions and earnings received during or
prior to the year less any payments in prior
years.
b. Any Exempt Loan must be primarily for the benefit
of Participants and their beneficiaries.
c. Notwithstanding any other provision of the Plan,
all proceeds of an Exempt Loan shall be used,
within a reasonable time after receipt by the
Trust, for the following purposes:
i. To acquire Company Stock;
ii. To repay the same Exempt Loan; or
iii. To repay any previous Exempt Loan.
ARTICLE V
The Trustee
5.1 Nominees. The Trustee may register any security or
other property held by them hereunder in their own name or in the
name of their nominees, including any Custodian and the nominee
of any system for the central handling of securities, with or
without the addition or words indicating that such securities are
held in a fiduciary capacity, and to deposit or arrange for the
deposit of any such securities with such a system. The Trustee,
if permitted by ERISA, may hold any securities in bearer form and
combine certificates representing investments with certificates
of the same issue held by the Trustee in other fiduciary
capacities, but the books and records of the Trustee shall at all
times show that all such investments are part of the Trust.
Notwithstanding the above, the Trustee shall at all times remain
responsible for the safe custody and disposition of the Trust.
5.2 Records. The Trustee shall keep accurate and detailed
accounts of all investments, receipts and disbursements and other
transactions hereunder, and all accounts, books and records
relating thereto shall be open to inspection by any person
designated by the Company at all reasonable times. The Trustee
shall maintain such records with respect to the Trust as may be
reasonably required in the administration of the Trust, but the
Trustee shall not be required to perform ministerial acts other
than those set forth in the Trust.
5.3 Reports. Within 60 days after each Valuation Date, or
the removal or resignation of the Trustee or the termination of
the Plan or the Trust, and as of any other date specified by the
Board of Directors or the Committee, the Trustee shall file a
report with the Board of Directors. This report shall show all
purchases, sales, receipts, disbursements, and other transactions
effected by the Trustee during the year or period for which the
report is filed, and shall contain an exact description, the cost
as shown on the Trustee's books, and the fair market value as of
the end of such period, of every item held in the Trust and the
amount and nature of every obligation owed by the Trust. For
purposes of this Section 5.3, the Trustee may rely on any
determination by the Committee of the fair market value of any
Trust assets, including the opinion of one or more independent
investment advisors or appraisers relied upon by the Committee.
Upon the expiration of 90 days from the date of filing such
annual or other account, the Trustee shall to the maximum extent
permitted by ERISA be forever released and discharged from all
liability and accountability with respect to the propriety of its
acts and transactions shown in such account except with respect
to any such acts or transactions as to which the Committee shall
within such 90-day period file with the Trustee written
objections.
5.4 Distributions. The Trustee shall make distributions of
a Participant's Vested Interest from the Trust to or for the
benefit of the person entitled thereto under the Plan and at such
times and in such form as may be required or permitted under the
Plan. Any undistributed part of a Participant's Vested Interest
shall be retained in the Trust until distribution. Where
distribution is required to be made in Company Stock, or where
the Committee directs such distribution, the Trustee shall cause
the Company to issue an appropriate stock certificate for the
person entitled thereto, and the Trustee shall deliver such
certificate to such person; provided, however, that the Trustee
shall comply with the provisions of the Plan relating to
repurchase of such Company Stock by the Company. Any portion of
a Participant's Vested Interest to be distributed in cash or
property other than Company Stock shall be paid by the Trustee to
the Participant or Beneficiary entitled thereto. Company Stock
distributed by the Trustee may include such legend restrictions
on transferability as the Company may reasonably require in order
to insure compliance with the Plan and with applicable Federal or
state securities laws.
5.5 Instructions. All communications required hereunder
from the Company or the Committee to the Trustee shall be in
writing signed by an officer of the Company or by a member of the
Committee authorized to sign on its behalf. The Committee shall
authorize one or more of its members to sign on its behalf all
communications required hereunder between the Committee and the
Trustee. At all times during which communications between the
Committee and the Trustee are required hereunder, the Company and
the Committee shall keep the Trustee advised of the names and
specimen signatures of all members of the Committee and the
individuals authorized to sign on behalf of the Committee. The
Trustee shall be fully protected in relying on any such
communication and any letter, notice, certificate, report,
statement, instrument or document and upon any telephone,
telegraph, cable, wireless, radio or other message from any
party, if believed to be genuine, and shall not be required to
verify the accuracy or validity thereof unless they have
reasonable grounds to doubt the authenticity of any signature.
If after request the Trustee does not receive instructions from
the Committee on any matter for which instructions are required
hereunder, the Trustee shall act or refrain from acting as it may
determine.
5.6 Hiring of Agents and Related Expenses. The Trustee and
the Committee may employ suitable agents and counsel who may be
counsel for the Company or an Affiliate. The reasonable expenses
incurred by the Trustee, any individual who is a trustee, and the
Committee in the performance of their duties hereunder and all
other proper charges, expenses and disbursements of the Trustee,
any individual who is a trustee, or the Committee (including the
Trustee's compensation) shall be paid out of the Trust unless the
Company pays such expenses directly. However, no person serving
as a Trustee or individual serving as a member of the Committee
who already receives full-time pay from the Company shall receive
compensation from this Trust, except for reimbursement of
expenses properly and actually incurred.
5.7 Resignation and Removal of Trustee. The Trustee, or
any individual who is a trustee, may resign at any time by
delivering to the Committee a written notice of resignation, to
take effect at a date specified therein, which shall not take
effect in less than 60 days after the delivery thereof, unless
such notice is be waived by the Committee.
The Board of Directors shall have the right to remove
the Trustee, or any individual who is a trustee, at any time with
or without cause, by delivering to the Trustee, or individual who
is a trustee, a written notice of removal, to take effect at a
date specified therein, which shall not take effect in less than
60 days after the delivery thereof, unless such notice is waived
by the Trustee.
In the event the Trustee, or any individual who is a
trustee, notifies the Committee of its intention to resign, or
the Committee removes the Trustee, or any individual who is a
trustee, in accordance with the foregoing provisions of this
Section 5.7, the Board of Directors shall appoint a successor
trustee, which successor trustee shall accept such appointment by
an instrument in writing delivered to the Committee and the
Trustee. The Trustee, or individual who is a trustee, resigning
or removed hereunder shall thereupon deliver to the successor
trustee all assets of the Trust held by such Trustee, or
individual who is a trustee, together with such records as may be
reasonably required to enable the successor trustee to properly
administer the Trust, and all rights and privileges under the
Plan and the Trust theretofore vested in the Trustee, or
individual who is a trustee, shall vest in the successor trustee
where applicable, and thereupon all future liability of such
Trustee, or individual who is a trustee, shall terminate;
provided, however, that the Trustee, or individual who is a
trustee, shall execute, acknowledge and deliver all documents and
written instruments which are necessary to transfer and convey
his right, title and interest in the Trust, and all rights and
privileges, to the successor trustee.
In the case of the resignation or removal of the
Trustee, or any individual who is a trustee, said Trustee, or
individual who is a trustee, shall duly file with the Committee a
written report as provided in Section 5.3 above for the period
since the last previous annual accounting, and if written
objections to such account are not filed as provided in Section
5.3, the Trustee's liability and accountability with respect to
the propriety of their acts and transactions shown in such
account shall be governed by the terms of this Trust.
5.8 Hold Harmless. The Company shall defend and indemnify
to the full extent permitted by law (including ERISA), which
indemnification shall include, but not be limited to, attorney's
fees and any tax imposed as a result of a claim asserted by any
person, persons or entity (including a governmental entity), the
Trustee, or any individual who is a trustee, made or threatened
to be made a part to any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of
the fact that such entity or individual is or was a Trustee. The
Trustee, or individual who is a trustee, shall be entitled to
collect on the Company's indemnity under this Section 5.8 only
from the Company and shall not be entitled to payment directly or
indirectly from the Trust.
5.9 Acceptance. The Trustee hereby accepts the Trust and
agrees to hold the Trust, and all additions and accretions
thereto, except to the extent such assets, additions and
accretions are held by a Custodian, subject to all the terms and
conditions of the Trust, which shall be interpreted and construed
under the laws of the State of Louisiana to the extent such laws
are not superseded by laws of the United States. In the event
any provisions of the Trust are held illegal or invalid for any
reason, the illegality or invalidity shall not affect the
remaining provisions of the Trust, but shall be fully severable
and the Trust shall be construed and enforced as if the illegal
or invalid provision had never been inserted herein.
5.10 Third Parties. A third party dealing with the Trustee,
or any individual who is a trustee, shall not be required to make
inquiry as to the authority of the Trustee, or any individual who
is a trustee, to take any action nor be under any obligation to
follow the proper application by the Trustee, or any individual
who is a trustee, of the proceeds of sale of any property sold by
the Trustee, or any individual who is a trustee, or to inquire
into the validity or propriety of any act of the Trustee, or any
individual who is a trustee, except as may be required of such
third party under ERISA.
5.11 Tax Returns. In addition to any returns required of
the Trustee by law, the Trustee shall prepare and file such tax
reports and other returns as they may from time to time deem
appropriate.
5.12 Judicial Accounting. To the maximum extent consistent
with ERISA, nothing contained in the Trust or in the Plan shall
be construed as depriving the Trustee or the Company of the right
to have a judicial settlement of the Trustee's accounts, and upon
any proceeding for a judicial settlement of the Trustee's
accounts or for instructions the only necessary parties thereto
shall be the Trustee and the Committee.
5.13 Legal Proceeding. Subject to Section 5.12, in any
action or proceeding affecting the Trust the only necessary
parties shall be the Company and the Trustee and, except as
otherwise required by ERISA, no other person shall be entitled to
any notice or service of process. Any judgment entered in such
an action or proceeding shall to the maximum extent permitted by
ERISA be binding and conclusive on all persons having or claiming
to have any interest in the Trust.
ARTICLE VI
Relationship of Fiduciaries
It is the intent of all fiduciaries under the Plan and Trust
that each fiduciary be solely responsible for their own acts or
omissions. Except to the extent such an obligation is imposed by
ERISA or the Code, no fiduciary shall have the duty to question
whether any other fiduciary is fulfilling the responsibilities
imposed upon such other fiduciary by the Plan and Trust or by
ERISA or by any regulations or rulings issued thereunder. To the
maximum extent permitted by law, no fiduciary shall have any
liability for a breach of fiduciary responsibility of another.
Except as provided in Article XIII, no fiduciary shall permit any
part of the Trust to be diverted for purposes other than for the
exclusive benefit of Participants and their Beneficiaries.
However, the Committee may, by written notice to the Trustee,
direct that all or part of the assets of the Trust be transferred
to a successor trustee under a trust instrument which is for the
exclusive benefit of such Participants and their beneficiaries,
and which satisfies the applicable requirements for qualification
and exemption from taxation under Sections 401(a) and 501(a) of
the Code, and thereupon the assets of the Trust or any part
thereof, subject to any outstanding debts of the Trust, shall be
paid over, transferred or assigned to said successor trustee free
from the Trust created hereunder.
ARTICLE VII
Termination
7.1 Procedures Upon Termination. The Trust shall continue
for such time as may be necessary to accomplish the purpose for
which it was created, but the Board of Directors may terminate
the Trust at any time upon 30 days' notice in writing to the
Trustee, subject to any applicable contribution or loan
agreement. Upon receipt by the Trustee of such notice of
termination of the Trust, the Trustee shall, with reasonable
promptness after receipt of any such notice, arrange for the
orderly distribution of the Trust property in accordance with the
written instructions of the Committee which shall be given in
conformity with the provisions of the Plan and ERISA. Such
instructions may, but need not, provide for the continued
payments from the Trust pursuant to Section 5.4 of this Trust to
provide the benefits under the Plan until the Trust is exhausted.
The Committee shall remain in existence and all of the provisions
of the Plan which in the opinion of the Committee are necessary
for the execution of the Plan and the administration,
distribution, transfer or other disposition of the assets of the
Trust shall remain in force. The Trust shall terminate when all
such payments are made.
7.2 Termination With Respect to Less Than All Participants.
If the Plan is terminated with respect to a group of persons
under the Plan, the portion of the Trust attributable to such
group shall be held and disposed of in accordance with the
written instructions of the Committee which shall be given in
conformity with the provisions of the Plan and ERISA.
ARTICLE VIII
Amendment
8.1 Right to Amend. The Board of Directors may any time
and from time to time amend or modify, in whole or in part and
without the consent of any Participating Company or any
Participant or beneficiary, any or all of the provisions of this
Trust by an instrument in writing delivered to the Trustee. No
such amendment shall be made which affects the duties or
responsibilities of the Trustee without their consent thereto in
writing.
8.2 Execution. The Committee and the Trustee shall execute
such supplements to, or amendments of, this Trust as shall be
necessary to give effect to any such amendment or modification.
8.3 Retroactivity. Any such amendment or modification of
this Trust may be retroactive if necessary or appropriate to
qualify or maintain the Trust as a part of a plan and trust
exempt from Federal income taxation under Sections 401(a) and
501(a) of the Code, the provisions of ERISA, or any other
applicable provisions of Federal or state law, as now in effect
or hereafter amended or adopted, and any Regulations issued
thereunder.
ARTICLE IX
Communications
9.1 Company's and Committee's Address. Communications to
the Company or the Committee shall be addressed to or in care of
the Company, at 5100 River Road, Avondale, Louisiana 70094;
provided, however, that upon the Company's or the Committee's
written request, such communications shall be sent to such other
address as the Company or the Committee, as the case may be, may
specify.
9.2 Trustee's Address. Communications to the Trustee shall
be addressed to them at Avondale Industries, Inc., 5100 River
Road, Avondale, Louisiana 70094; provided, however, that upon
the written request of the Trustee, such communications shall be
sent to such other address or addresses as the Trustee may
specify.
9.3 Binding Upon Receipt. No communication shall be
binding on the Trustee, Company or Committee until it is received
by such party.
9.4 Communications in Writing. Any action of the Company
or the Committee pursuant to this Trust, including all orders,
requests, directions, instructions, approvals and objections of
the Company or the Committee to the Trustee, shall be in writing
signed on behalf of the Company or the Committee by any duly
authorized officer of the Company or member of the Committee,
respectively. The Trustee shall be governed by such action and,
to the maximum extent permitted by ERISA, be fully protected in
relying thereon.
ARTICLE X
Non-Alienation
Except insofar as applicable law may otherwise require or
pursuant to a Qualified Domestic Relations Order (as defined in
Section 6.5 of the Plan), no economic interest, expectancy,
benefit, payment, claim or right of any Participant or
Beneficiary under the Plan and the Trust shall be subject in any
manner to any claims of any creditor of any Participant or
Beneficiary, nor to alienation by anticipation, sale, transfer,
assignment, bankruptcy, pledge, attachment, charge or encumbrance
of any kind. If any person attempts to take any action contrary
to this Article X, such action shall be null and void and of no
effect, and the Trustee shall disregard such action and shall not
in any manner be bound thereby and shall suffer no liability on
account of their disregard thereof.
ARTICLE XI
Voting Rights
9.5 Pass Through of Voting Rights. The Trustee shall vote
all Company Stock held in the Trust as directed by the Committee,
or, in accordance with the following provisions, by the
Participants:
a. If the Company has a registration-type class of
securities (as defined in Section 409(e)(4) of the
Code or any successor statute thereto), then with
respect to all corporate matters, all Company
Stock allocated to the Accounts of Participants
shall be voted in accordance with the directions
of such Participants as given to the Committee and
communicated in turn by the Committee to the
Trustee. Each Participant shall be entitled to
direct the voting only of the Company Stock
allocated to his Company Stock Account.
b. If Company Stock is not a registration-type class
of securities (as defined in Section 409(3)(4) of
the Code), each Participant shall be entitled to
direct Trustee as to the exercise of voting rights
attributable to Company Stock allocated to her or
her Accounts concerning any corporate matter which
involves the voting of Company Stock with respect
to the approval or disapproval of any corporate
merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale
of substantially all the assets of a trade or
business, or such similar transactions as may be
prescribed in Regulations.
9.6 Instructions on Voting. Prior to any meeting of the
stockholders of the Company, the Committee shall determine the
number of shares of Company Stock (including fractional shares)
allocated to each Participant which the Participant shall be
entitled to vote. Within a reasonable time (not less than 30
days) before any shareholder meeting, the Committee shall provide
the Participant with a form necessary to indicate his vote as to
any specific or general matter to be considered by the
stockholders at such meeting. In addition, the Committee shall
provide the Participants with all information distributed to
shareholders by the Committee for the exercise of such voting
rights. The Committee shall not make any recommendations
regarding the manner of exercising any voting rights. If a
Participant shall fail, or refuse, to give the Committee timely
and adequate instructions as to how to vote any Company Stock,
the Committee shall not exercise its power to vote those shares
of Company Stock. The Committee shall be entitled to hire an
independent third party to tabulate votes in order to ensure the
confidentiality of such vote.
Each Participant or, in the event of the Participant's
death, the Participant's Beneficiary is, for purposes of voting
the Company Stock allocated to his Company Stock Account, hereby
designated as "named fiduciary" within the meaning of Section
403(a)(1) of ERISA.
9.7 Voting of Unallocated Company Stock. With respect to
Company Stock not allocated to Participants' Accounts, the
Committee shall instruct the Trustee, in writing, how to vote
such shares.
9.8 Tender Offers. The Trustee shall notify each
Participant of a tender or exchange offer and utilize its best
efforts to distribute to Participants in a timely manner all
information distributed to shareholders of the Company in
connection with any such tender or exchange offer. Each
Participant shall have the right from time to time to instruct
the Trustee in writing as to the manner in which to respond to
any tender or exchange offer with respect to Company Stock
allocated to his Company Stock Account which shall be pending or
which may be made in the future for all Company Stock or any
portion thereof. A Participant's instructions shall remain in
force until superseded in writing by the Participant. The
Participant shall have the right to determine confidentially
whether shares allocated to a Participant's account are tendered
or exchanged and the Trustee and Committee shall establish
procedures to ensure such confidentiality.
Unless and until a Participant's Company Stock is
tendered or exchanged, the individual instructions received by
the Trustee from the Participant shall be held by the Trustee in
strict confidence and shall not be divulged or released to any
person, including officers of the Company; provided, however,
that the Trustee shall advise the Company, at any time, upon
request, of the total number of shares not subject to
instructions to tender or exchange.
With respect to (a) Company Stock not allocated to
Participants' Accounts or (b) Company Stock allocated to
Participants' Accounts for which proper directions have not been
received from Participants, such stock shall be tendered or
exchanged by the Trustee in accordance with directions received
from the Committee. The Committee shall instruct the Trustee in
response to the tender offer in accordance with ERISA's fiduciary
duties to act as a prudent person would act in a similar
situation and to act solely in the interests of the Participants
and their Beneficiaries. In exercising its fiduciary
responsibility, the Committee shall consider (to the extent
permitted by Department of Labor or Internal Revenue Service
Regulations or announcements) not only the potential increase in
value if any of the Participants' Accounts as a result of the
tender or exchange offer, but also the impact of any change in
the managerial control of the Company on the status of the
Participants as Employees in the long-run, including but not
limited to whether they will receive larger or smaller employee
benefits than at present under the Plan.
Each Participant or, in the event of the Participant's
death, the Participant's Beneficiary is, for purposes of
responding to any tender or exchange offer with respect to
Company Stock allocated to his Company Stock Account, hereby
designated as "named fiduciary" within the meaning of Section
403(a)(1) of ERISA.
ARTICLE XII
Participating Companies
12.1 Other Participating Companies. With the consent of the
Company, any entity designated a Participating Company under the
Plan may at any time join in the Trust. The Participating
Company shall file with the Company and the Trustee a duly
executed instrument approved by the Committee and the Trustee.
Any such action shall become effective upon the delivery to the
Trustee of such instrument duly executed by the Participating
Company and the Company, and upon receipt of such instrument the
Trustee shall be deemed to accept such Participating Company as a
party to this Trust without further action by the Trustee. Each
such Participating Company may then contribute under the Plan to
the Trust. The contributions which may be made by the Company or
any other Participating Company, and the income therefrom, shall
be held by the Trustee as part of a single Trust without
allocation to the Company or any other Participating Company
until the Company shall notify the Trustee of the withdrawal of
any Participating Company from the Plan pursuant to Section 12.5
12.2Committee Appointed Exclusive Agent. Any Participating
Company which joins in the Trust as provided in Section 12.1
shall be deemed to thereby appoint the Board of Directors and the
Committee its exclusive agent to exercise on its behalf all of
the powers and authority conferred upon the Board of Directors
and the Committee by the terms of the Trust including, but not by
way of limitation, the power to amend the Trust and to terminate
the Trust. The authority of the Board of Directors and the
Committee to act as such agent shall continue with respect to all
funds contributed by each Participating Company and the income
therefrom until and unless the amount of such funds and income
has been distributed by the Trustee as hereinafter provided in
this Article XII.
12.3 Withdrawal of Participating Company. The Committee
shall notify the Trustee in writing of the withdrawal of any
Participating Company from the Plan, and the Trustee shall not
accept any further contributions under the Plan from such
Participating Company and shall set aside in a separate account
such part of the Trust as the Committee shall, pursuant to
Section 12.4, determine to be held for the benefit of eligible
employees of the Participating Company and their beneficiaries as
of the last day of the Plan Year during which such Participating
Company's withdraw from the Plan.
12.4 Establishment of Segregated Fund. The Committee shall
give written directions to the Trustee with respect to the part
of the Trust segregated in a separate account pursuant to Section
12.3. Such directions shall specify the amount to be segregated
and shall be in accordance with generally accepted accounting
principles, the terms of the Plan and any applicable loan
agreement, and, to the maximum extent consistent with ERISA, the
determination of the fair market value of the assets in the Trust
in the manner provided in Section 5.3 shall be conclusive for the
purpose of such segregation. The Trustee shall follow such
directions of the Committee which shall constitute a conclusive
determination of the amounts which should be segregated for the
benefit of the eligible employees of such Participating Company
and their beneficiaries.
12.5 Distribution of Segregated Fund. The Trust shall
continue as to any Participating Company, despite receipt by the
Trustee of notice of withdrawal from the Plan as to such
Participating Company, for such time as may be necessary to
effect such withdrawal. Upon receipt by the Trustee from the
Committee of notice of withdrawal from the Plan as to such
Participating Company, the Trustee shall, with reasonable
promptness after receipt of such notice, arrange, in accordance
with the written instructions of the Committee which shall be
given in conformity with the provisions of the Plan and ERISA,
for the orderly distribution of the Trust properly segregated
with respect to such Participating Company pursuant to Sections
12.4 and 12.5.
ARTICLE XIII
Miscellaneous
13.1 Exclusive Benefit. In no event shall any part of the
funds of the Plan be used for or diverted to any purposes other
than for the exclusive benefit of Participants and their
Beneficiaries under the Plan except as permitted under Section
403(c) of ERISA. Upon the transfer by a Participating Company of
any money to the Trustee, all interest of the Participating
Company therein shall cease and terminate.
13.2 Mistake of Fact. Notwithstanding any other provisions
herein contained, if any contribution is made by a mistake of
fact, such contribution shall upon the direction of the Committee
be returned in conformity with Section 3.5 of the Plan,, without
liability to any person.
13.3 Qualification of Plan. Notwithstanding any other
provisions herein contained, the Trust is entered into on the
condition that the Plan and the Trust are by the IRS as a
qualified and exempt plan and trust under the provisions of the
Code and Regulations so that contributions to the Trust may be
deducted for Federal income tax purposes, within the limits of
the Code and Regulations, and to be non-taxable to Participants
when contributed. If such approval should be denied for any
reason (including failure to comply with any conditions for such
approval imposed by the IRS), contributions made after the
execution of the Trust and prior to such denial shall be returned
to the Company, without any liability to any person, within one
year after the date of denial of such approval and any assets
received by the Trust pursuant to a plan-to-plan transfer from a
qualified defined benefit plan maintained by the Company or
Company Stock purchased with such assets shall be directly
returned to the qualified defined benefit plan, to the extent
permissible by law, or to the Company, without any liability,
within one year after denial of such approval. All remaining
assets in the Trust shall be returned to the Company.
13.4 Deductibility of Contributions. Notwithstanding any
other provisions herein contained, all contributions are hereby
expressly conditioned upon their deductibility under Section 404
of the Code and Regulations, as amended from time to time, and if
the deduction for any contribution is disallowed in whole or in
part, then such contribution (to the extent the deduction is
disallowed) shall be returned upon direction of the Committee,
which shall be given in conformity with the provisions of ERISA,
without liability to any person.
13.5 Expenses. The expenses of administering the Plan
including (i) the fees and expenses of the Trustee for the
performance of its duties under the Trust, (ii) the expenses
incurred by the members of the Committee in the performance of
their duties under the Plan (including reasonable compensation
for services rendered in respect of the Plan by legal counsel,
certified public accountants, appraisers or others employed by
the Committee), and (iii) all other proper charges and
disbursements of the Company, Trustee or the members of the
Committee (including settlements of claims or legal actions
approved by counsel to the Plan) are to be paid out of the Trust
unless the Company pays such expenses directly. In estimating
costs under the Plan, administrative costs may be anticipated.
13.6 Titles for Convenience Only. Titles to the Sections of
the Trust are included for convenience only and shall not control
the meaning or interpretation of any provision of the Trust.
13.7 Executed Counterparts. The Trust may be executed in
any number of counterparts, each of which shall be deemed to be
the original although the others shall not be produced.
IN WITNESS WHEREOF, the Company and the Trustee have caused
the Trust to be executed this 28th day of December,
1994.
AVONDALE INDUSTRIES, INC
BY: \s\ Thomas M. Kitchen
Thomas M. Kitchen
Secretary
ATTEST
\s\ B. L. Hicks
(Corporate Seal) Assistant Secretary
ADMINISTRATIVE COMMITTEE OF TRUSTEES OF THE AVONDALE
THE AVONDALE INDUSTRIES, INC. INDUSTRIES, INC. EMPLOYEE
EMPLOYEE STOCK OWNERSHIP PLAN STOCK OWNERSHIP PLAN TRUST
\s\ Blanche S. Barlotta \s\ Blanche S. Barlotta
Blanche S. Barlotta, Member Blanche S. Barlotta, Trustee
\s\ Eugene E. Blanchard, Jr. \s\ R. D. Church
Eugene E. Blanchard, Member R. Dean Church, Trustee
\s\ R. D. Church \s\ Rodney J. Duhon
R. Dean Church, Member Rodney J. Duhon, Trustee
\s\ Rodney J. Duhon, Jr.
Rodney J. Duhon, Jr., Member
\s\ Ernest F. Griffin, Jr.
Ernest F. Griffin, Jr., Member
Sworn to and subscribed before me,
Notary Public, on this 28 day of
December, 1994.
\s\ Rudolph R. Ramelli
NOTARY PUBLIC