AVONDALE INDUSTRIES, INC.
401(k)
SAVINGS PLAN
(Effective January 1, 1996)
PREAMBLE
Effective January 1, 1996, Avondale Industries, Inc. hereby
establishes a 401(k) (the "Plan") governed by the provisions of
this Plan document and any amendments hereto. The Plan and its
related Trust are intended to qualify as a profit-sharing plan
and a cash-or-deferred arrangement under Sections 401(a), 501(a),
401(k) and 401(m) of the Internal Revenue Code of 1986, as
amended. Any ambiguity shall be resolved by giving effect to
these intentions.
The purpose of this Plan is to encourage Employees to save
and invest systematically a portion of their current compensation
in order that they may have an additional source of income upon
their retirement or disability. The benefits provided by the
Plan are paid from the Trust Fund established by the Employer and
are in addition to the benefits Employees are entitled to receive
under any other programs of the Employer and the United States
Social Security Administration.
The Plan and the Trust forming a part hereof are maintained
for the exclusive benefit of the Participants and their
Beneficiaries.
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:
2 Accounts shall mean each of a Participant's Employee-
Deferral Account, Employer Contribution Account and Rollover
Contribution Account (including 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 Sections 1.15, 1.18 and 1.35.
2.1 Active Participant shall mean an Eligible Employee who
is employed by a Participating Employer through the last payroll
period ending within the Plan Year.
2.2 Affiliated Company means the Company and all other
entities required to be aggregated with the Company under
Sections 414(b), (c), (m) or (o) of the Code.
2.3 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 a 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, otherwise the Participant's estate.
2.4 Board of Directors shall mean the Board of Directors
of Avondale Industries, Inc.
2.5 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.
2.6 Committee shall mean the 401(k) Administrative
Committee designated by the Company to administer the Plan in
accordance with Section 12.2 or a person or entity designated by
the 401(k) Administrative Committee.
2.7 Company shall mean Avondale Industries, Inc. and any
successor company that may continue the Plan.
2.8 Compensation. The term "Compensation" as modified
below, has the following meaning for each respective purpose
under the Plan:
(a)Plan Compensation. For purposes of determining
contributions to the Plan, Plan Compensation means base pay plus
overtime, bonuses and short-term Disability payments, if any, and
shall exclude permanent Disability payments and any other extra
compensation in any form paid to the Employee by the Employer
during the Plan Year. Plan Compensation will include any amount
which is contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in the gross
income of an Employee under Sections 125 or 402(e)(3).
(a)Section 415 Compensation. For the purpose of
applying the limitations of Section 415 of the Code, Section 415
Compensation means the Participant's wages, within the meaning of
Section 3401(a) of the Code and all other payments of
compensation to the Participant by the Employer (in the course of
the Employer's trade or business) for which the Employer is
required to furnish the Participant a written statement under
Sections 6041(d) and 6051(a)(3) of the Code.
(a)Total Compensation means Section 415 Compensation
plus all amounts contributed by an Employer on behalf of the
Participant pursuant to a salary reduction agreement which are
not includible in the gross income of the Participant under
Sections 125, 402(e)(3), and 402(h)(1)(B) of the Code.
The amount of a Participant's annual Compensation that can
be taken into account under any of Subparagraphs (a) - (c) 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 limit is exceeded then the limit will be
prorated among the affected individuals determined under this
section before this limit is applied.
2.9 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.
2.10 Disability Retirement Date shall have the meaning set
forth in Section 9.2.
2.11 Eligible Employee is defined at Section 2.1.
2.12 Employee shall mean a person employed by an 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 leased
employee, as described in Section 414(n)(2) of the Code, shall
not be considered an Employee; provided, however, that any leased
employee who subsequently becomes an Employee shall have his
previous service as a leased employee used in calculating his
Years of Service under the Plan.
2.13 Employee-Deferral or Employee-Deferral Contribution
shall mean the amount contributed by the Employer on behalf of a
Participant in accordance with Article III.
2.14 Employee-Deferral Account shall mean the Account
maintained for a Participant to record the Employee-Deferrals
under Article III, and any contributions under Section 4.6,
contributed by the Employer on such Participant's behalf.
2.15 Employee-Deferral Agreement shall mean the agreement
described in Article III.
2.16 Employer shall mean a Participating Employer or a Non-
Participating Employer.
2.17 Employer Contribution means any (a) Matching
Contributions, (b) Employer Discretionary Contributions and (c)
contributions required on account of a Top-Heavy Plan Year.
2.18 Employer Contribution Account shall mean the account
established for a Participant which is funded by Employer
Contributions.
2.19 Employer Discretionary Contribution shall mean a
contribution by an Employer to the Trust Fund as described in
Article V.
2.20 Entry Date shall mean February 1, 1996 and the first
day of each month thereafter and any other date during the Plan
Year specified by the Committee.
2.21 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.
2.22 Highly Compensated Employee shall mean any highly
compensated active Employee and any highly compensated former
Employee as described in this Section 1.23.
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 Total
Compensation from the Employer in excess of $75,000 (as adjusted
pursuant to section 415(d) of the Code); (ii) received Total
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 Total 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 Total 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 1.23, 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 five percent (5%) owner who is
an active or former Employee or a Highly Compensated Employee who
is one of the ten (10) most Highly Compensated Employees ranked
on the basis of Total Compensation paid by the Employer during
such year, then the family member and the five percent (5%) owner
or top-ten Highly Compensated Employee shall be aggregated. In
such case, the family member and five percent (5%) owner or top-
ten (10) 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 five percent (5%) owner or
top-ten Highly Compensated Employee. For purposes of this
Section 1.23, 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 one hundred (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.
2.23 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 vacation, holiday, illness,
incapacity (including 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 this Section
1.24 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 Section
1.24 with respect to periods described in this Section 1.24 above
shall be subject to the limitation therein set forth; and
(d)Solely for purposes of determining whether a Break
in Service, as defined in Section 1.29, for participation and
vesting purposes has occurred in a computation period, if an
Employee is away from work on a Parental Absence, he shall
receive credit for the Hours of Service which would otherwise
have been credited to such individual but for such absence, or in
any case in which such hours cannot be determined, 8 Hours of
Service per day of such absence. The Hours of Service credited
under this Section 1.24(d) shall be credited (1) in the
computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period, or
(2) in all other cases, in the following computation period.
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.
The number of Hours of Service to be credited under this
Section 1.24 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 this Section 1.24 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.
2.24 Matching Contribution shall mean a contribution by an
Employer to the Trust Fund as described in Article IV.
2.25 Non-Highly Compensated Employee shall mean an Employee
who is not a Highly Compensated Employee.
2.26 Non-Participating Employer shall mean an Affiliated
Company which is not a Participating Employer.
2.27 Normal Retirement Date shall have the meaning set
forth in Section 9.1. Normal Retirement Age means the
Participant's sixty-fifth (65th) birthday.
2.28 One-Year Break-in-Service or Break in Service shall
mean a twelve-month consecutive period following an Employee's
Service Termination Date, as defined in Section 1.36, during
which the Employee fails to be credited with an Hour of Service.
2.29 Parental Absence shall mean an Employee's absence from
work 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.
2.30 Participant shall mean (i) any Eligible Employee for
whom Employee-Deferral Contributions have been made or (ii) any
former Eligible Employee on whose behalf an Account continues to
be maintained in the Plan pursuant to Article II. An Eligible
Employee remains a Participant as long as he has an Account
balance, as provided in Section 2.2.
2.31 Participating Employer shall mean the Company,
Avondale Services Corporation, and any Affiliated Company 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.
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.
2.32 Plan shall mean the Avondale Industries, Inc. 401(k)
Savings Plan, as set forth in this document and as amended from
time to time.
2.33 Plan Year shall mean the calendar year.
2.34 Rollover Contribution Account shall mean the Account
maintained for a Participant to record his rollover contribution
made pursuant to Section 3.8.
2.35 Service Termination Date shall mean the earlier of the
following:
(a)the date on which by reason of an Employee's
resignation, discharge, retirement or death the Employee is no
longer employed by any Employer; or
(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.
2.36 Trust or Trust Agreement shall mean the agreement and
any and all amendments and supplements thereto entered into
between the Company and the Trustee. The Trust Agreement shall
be deemed to be part of this Plan as if all the terms and
provisions were fully set forth herein.
2.37 Trustee shall mean the person or persons appointed by
the Board of Directors to be Trustee under the Trust Agreement.
2.38 Trust Fund shall mean all assets held by the Trustee
in accordance with the Trust Agreement.
2.39 Valuation Date shall mean the last day of each quarter
during the Plan Year or any other date or dates during the Plan
Year specified by the Committee upon which the assets of the
Trust Fund are valued as described in Article VIII. The Annual
Valuation Date shall mean the last day of the Plan Year.
2.40 Vested Interest shall mean the portion of a
Participant's Accounts which has become vested and
nonforfeitable, under Section 6.3.
2.41 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 commencing on such Employee's date of
rehire in the case of an Employee who has not previously become
an Eligible Employee and who has incurred five or more
consecutive One Year Breaks in Service) or anniversary thereof
during which he is continuously employed by an 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 an
Employer including paid holidays, paid vacations and sick leaves;
(v) any other period of absence provided the
Employee returns to work with an 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
1.42, 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. All of an Employee's
Years of Service with the Employer shall be taken into account
for purposes of satisfying the Plan's eligibility requirements
and for calculating a Participant's Vested Interest in his
Employer Contribution Account.
ARTICLE II
PARTICIPATION
2.1 Commencement of Participation. Each Employee shall
become an Eligible Employee as of the first Entry Date on which
he is employed by a Participating Employer and which coincides
with or immediately follows the date as of which such Employee
has both (a) attained age 21 and (b) completed one Year of
Service.
2.2 Termination of Participation. An Eligible Employee or
Participant who (i) has a Service Termination Date (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 an Eligible Employee 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 until his Vested Interest has been
distributed and the non-vested portion of his Accounts, if any,
has been forfeited pursuant to Section 6.4.
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 has a Service Termination Date but is
reemployed before a One Year Break in Service occurs, he shall be
treated as if his employment was not broken.
If an Employee who had not had a Year of Service incurs a
One Year Break in Service and is later reemployed by an Employer,
he shall be treated as a new Employee for purposes of determining
eligibility to participate in the Plan.
If an Eligible Employee experiences a One-Year Break in
Service and is later reemployed by a Participating Employer, he
shall automatically become an Eligible Employee again and the
Committee shall allow him to elect to make Employee-Deferrals,
pursuant to Section 3.1.
ARTICLE III
EMPLOYEE-DEFERRALS
3.1 Employee-Deferrals. An Eligible Employee may enter
into an Employee-Deferral Agreement with his Employer on such
form or forms as the Committee shall prescribe or through a voice
response system after such Participant has entered his personal
identification number. In the Employee-Deferral Agreement the
Eligible Employee shall agree to accept a deferral of his Plan
Compensation expressed as a whole percentage no less than 1% and
no more than 13%. The Employee-Deferral Agreement shall remain
in effect until changed or discontinued as provided in Section
3.3. An Employee's election under this Section 3.1 can be made
when the Employee becomes an Eligible Employee effective on the
next calendar month following the date on which such election is
received by the Committee.
No Employee-Deferral may be paid to the Plan by the Employer
on behalf of a Participant after he ceases to be an Employee or
during any period when such Participant is not receiving Plan
Compensation from the Employer.
3.2 Delivery of Employee-Deferral Contributions. The
Employee-Deferral made by the Employer on behalf of any
Participant shall be transmitted to the Trustee by the Employer
as soon as practicable after the close of the calendar month in
which the Employee-Deferral occurs; provided, however, that no
Employee-Deferral for any portion of a Plan Year shall be
delivered to the Trustee later than 90 days after the close of
the month in which the amount was deducted from Participant's
Plan Compensation.
3.3 Changes in and Discontinuance of Employee-Deferrals.
A Participant may change the rate of Employee-Deferrals or
discontinue Employee-Deferrals paid by his Employer to the Plan
on his behalf effective as of the next payroll period provided
the Participant has given the Committee advance notice of such
change in such form and within such time period preceding the
effective date of the change as the Committee may prescribe.
3.4 Dollar Limitation. In no event shall a Participant's
Employee-Deferral Contributions for a Participant's taxable year
exceed $9,500, or such larger amount as allowed under Code
Section 402(g) to reflect increases in the cost of living.
3.5 Return of Excess Deferral Amounts. If a Participant's
Employee-Deferral Contributions under the Plan should exceed the
dollar limitation under Section 3.4 for a Plan Year, the excess
amount and the earnings thereon shall be distributed to the
Participant no later than the April 15 following the calendar
year of the excess deferral. If a Participant notifies the
Committee in writing no later than March 1 following the calendar
year of the excess deferral that he was also a participant in a
plan of an unrelated employer governed by the Code Section 402(g)
dollar limitation described in Section 3.4, that the total
deferrals under the plans exceeded the dollar limitation
described in Section 3.4, and that he has allocated some or all
of the excess deferrals to this Plan, then the excess allocated
to this Plan (and the earnings thereon) shall be distributed to
the Participant no later than the following April 15.
Any returned excess deferrals must include income or loss
for the calendar year of the excess deferral, and must include
income or loss for the "gap period" between the end of that year
and the date of distribution. The gain or loss allocable to the
Excess Deferral Amount for the preceding calendar year shall be
determined by any reasonable method, provided that such method
does not violate Section 401(a)(4) of the Code, is consistently
applied, and is used for allocating income to Participants'
Accounts.
Any Matching Contributions attributable to returned
Employee-Deferrals shall be forfeited unless they can be deemed
to match previously unmatched Employee-Deferrals as provided in
Section 4.1. The amount of excess deferrals to be distributed
shall be reduced by Excess Contributions previously distributed
for the taxable year ending in the same Plan Year, as provided in
Section 3.7.
3.6 Non-Discrimination Rules
(a)Definition. The term "Actual Deferral Percentage"
(hereinafter "ADP") as used in this Section 3.6 shall mean, for
each specified group of Eligible Employees for a Plan Year, the
average of the ratios (calculated separately for each Eligible
Employee in such group) of (1) the amount of Employee-Deferrals
actually delivered to the Trustee for the Eligible Employee for
the Plan Year to (2) the Eligible Employee's Total Compensation
for the portion of such Plan Year (during which) the Employee was
an Eligible Employee. The ADP shall be calculated separately for
the group consisting of Highly Compensated Employees and the
group consisting of Non-Highly Compensated Employees.
(b)An Eligible Employee who fails to make Employee-
Deferrals shall be included in the testing with a ratio of zero.
(c)The Tests. In each Plan Year the Plan must satisfy
one of the following tests:
(i)The ADP for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall not exceed the ADP
for Eligible Employees who are Non-Highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
(ii)The ADP for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall not exceed the ADP
for Eligible Employees who are Non-Highly Compensated Employees
for the same Plan Year multiplied by 2.0, provided that the ADP
for Eligible Employees who are Highly Compensated Employees does
not exceed the ADP for Eligible Employees who are Non-Highly
Compensated Employees by more than two (2) percentage points.
(d)Special Rules in Connection with ADP Testing:
(i)The ADP for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year and who is eligible
to have Employee-Deferrals allocated to his accounts under two or
more arrangements described in Code Section 401(k), that are
maintained by one or more Employers, shall be determined as if
such contributions were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(ii)In the event that this Plan satisfies the
requirements of Code Sections 401(k), 401(a)(4), or 410(b) only
if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Code Sections only
if aggregated with this Plan, then this Section 3.6 shall be
applied by determining the ADP of Employees as if all such plans
were a single plan.
(iii)For purposes of determining the ADP of an
Eligible Employee who is a five (5%) owner or one of the ten (10)
most highly-paid Highly Compensated Employees, the Employee-
Deferrals and Total Compensation of such Eligible Employee shall
include the Employee-Deferrals and Total Compensation for the
Plan Year of members of the Eligible Employee's Family (as
defined at Section 1.9). Family members with respect to such
Highly Compensated Employees shall be disregarded as separate
Employees in determining the ADP both for Eligible Employees who
are Non-Highly Compensated Employees and for Eligible Employees
who are Highly Compensated Employees.
(iv)For purposes of determining the ADP test,
Employee-Deferrals shall be taken into account only if: paid to
the Trust before the last day of the twelve (12) month period
immediately following the Plan Year to which the contributions
relate; and which relate to Total Compensation which would have
been received by the Eligible Employee in the Plan Year (but for
the deferral election) or which is attributable to services
performed by the Eligible Employee in the Plan Year and would
have been received by the Eligible Employee within 2 1/2 months
after the close of the Plan Year (but for the deferral election).
(v)The determination and treatment of the ADP
amounts of any Eligible Employee shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(vi)In the event that the ADP of the Highly
Compensated Employees for the Plan Year determined as a date
prior to the last day of the Plan Year indicates that the Plan
for the year will not otherwise comply with either ADP test, the
Committee has the authority to reduce the Employee-Deferral rate
for the remainder of the Plan Year for all or a portion of the
Highly Compensated Employees in an equitable manner to increase
the likelihood that one of the ADP tests will be satisfied.
3.7 Return of Excess Contributions
(a)Definition. "Excess Contributions" shall mean,
with respect to any Plan Year, the excess of:
(i)The aggregate amount of Employee-Deferrals
actually taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
(ii)The maximum amount of such Deferrals permitted
by the ADP test (determined by reducing Deferrals made on behalf
of Highly Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
(b)Determination of Income or Loss. The income or
loss allocable to Excess Contributions shall be determined using
any reasonable method, provided that such method does not violate
Section 401(a)(4) of the Code, is consistently applied, and is
used for allocating income to Participants' Accounts. Earnings
must include income or loss for the "gap period" between the end
of the taxable year and the date of distribution.
(c)Distribution of Excess Contributions.
Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of the
Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees. With respect to
Participants who are subject to the family member aggregation
rules of Code Section 414(q)(6), the ADP of such Participants
shall be reduced in accordance with the "leveling" method
described in the regulations and the Excess Contributions of such
Participants shall be allocated in the manner prescribed by the
regulations. Excess Contributions shall be treated as Annual
Additions under the Plan. The amount of Excess Contributions to
be distributed shall be reduced by excess deferrals previously
distributed for the same year pursuant to Section 3.5 and any
Matching Contributions with respect to such distributed Excess
Contributions (and the earnings thereon) shall be forfeited.
3.8 Rollover Contributions. A Participant who has entered
into an Employee-Deferral Agreement may contribute to the Plan
any amount distributed from the Participant's individual
retirement account, individual retirement annuity, or qualified
plan which qualifies under either of Code Sections 402(c) or
408(d)(3)(A)(ii), which is transferred within the required time,
and which meets all other requirements of law for a rollover to
the Plan. The Employer, the Committee, and the Trustee shall
rely upon the Participant's written certification that the
transfer is a permitted rollover meeting all the above
requirements. Such a contribution shall be held in a separate
Rollover Contribution Account for the Participant. If the
Committee should learn that the rollover did not meet all the
aforesaid requirements, the value of the Participant's Rollover
Contribution Account as of the preceding Valuation Date (or the
date of the rollover, if later) shall be returned to him.
ARTICLE IV
MATCHING CONTRIBUTIONS
4.1 Matching Contributions. The Board of Directors shall
annually determine the amount of a Matching Contribution, if any,
to be contributed for the Plan Year. The Matching Contribution
shall be allocated based on the ratio of each Active
Participant's Employee-Deferrals for the Plan Year to the total
of Employee-Deferrals made by all Active Participants for the
year. For purposes of this allocation, Participant Employee-
Deferrals in excess of 6% of each Participant's Plan Compensation
shall be disregarded.
4.2 Forfeitures. Forfeitures shall be allocated in the
same manner as Matching Contributions under Section 4.1.
4.3 Delivery of Contributions. An Employer's Matching
Contributions shall be delivered to the Trustee at such time as
the Employer determines, but in no event shall any contribution
for a Plan Year be made later than the deadline, including
extensions, for the filing of the Company's tax return for that
year.
4.4 Adjustments if Employee-Deferral Contributions
Adjusted. If under Section 3.5 or Section 3.7 a Participant's
Employee-Deferral Contributions are returned to him, and as a
result the net Employee-Deferral Contributions for the Plan Year
are a smaller percentage of Plan Compensation than the amount
taken into account in making Matching Contributions, the amount
of the Matching Contributions shall be reduced accordingly. The
reduction in the Matching Contribution (and any earnings
attributable to the reduction) shall be treated as a Forfeiture
under the provisions of Section 4.2.
4.5 Discrimination Test - Matching Contributions.
(a)Definitions:
(i)"Average Contribution Percentage" or "ACP"
shall mean the average of the Contribution Percentages of the
Eligible Employees in a group.
(ii)"Contribution Percentage" shall mean the ratio
(expressed as a percentage) of an Eligible Employee's
Contribution Percentage Amounts to the Eligible Employee's Total
Compensation for the portion of the Plan Year in which he was
eligible to make Employee-Deferrals.
(iii)"Contribution Percentage Amounts" shall mean
the Matching Contributions under the Plan on behalf of the
Eligible Employee for the Plan Year. The Employer may elect to
use Employee-Deferrals in the Contribution Percentage Amounts so
long as the ADP test is met before the Employee-Deferrals are
used in the ACP test and continues to be met following the
exclusion of those Employee-Deferrals that are used to meet the
ACP test.
(b)The Tests. In each Plan Year the Plan must satisfy
one of the following tests:
(i)The ACP for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall not exceed the ACP
for Eligible Employees who are Non-Highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
(ii)The ACP for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall not exceed the ACP
for Eligible Employees who are Non-Highly Compensated Employees
for the same Plan Year multiplied by two (2), provided that the
ACP for Eligible Employees who are Highly Compensated Employees
does not exceed the ACP for Eligible Employees who are Non-Highly
Compensated Employees by more than two (2) percentage points.
(c)Special Rules:
(i)(A)"Aggregate Limit" shall mean the greater of
(A) or (B) below:
(1)The sum of
a)one hundred twenty-five percent
(125%) of the greater of the ADP or the ACP of the Non-Highly
Compensated Employees in the same Plan Year, plus
b)Two (2) percentage points plus
the lesser of such ADP or ACP of Non-Highly Compensated Employees
in the same Plan Year, provided, however, that in no event shall
this amount exceed two hundred percent (200%) of the lesser of
the ADP or the ACP of Non-Highly Compensated Employees, and
(2)The sum of
a)one hundred twenty-five percent
(125%) of the lesser of the ADP or the ACP of the Non-Highly
Compensated Employees in the same Plan Year, plus
b)Two (2) percentage points plus
the greater of the ADP or the ACP of Non-Highly Compensated
Employees in the same Plan Year, provided, however, that in no
event shall this amount exceed two hundred percent (200%) of the
greater of the ADP or the ACP of Non-Highly Compensated
Employees.
(B)Multiple Use: If the sum of the ADP and
ACP of the Highly Compensated Employees exceeds the Aggregate
Limit, then the ACP of the Highly Compensated Employees will be
reduced (beginning with the Highly Compensated Employee whose ACP
is the highest) so that the limit is not exceeded. If the
Employer elects to reduce the ACP of the Highly Compensated
Employee, the required reduction shall be treated as an Excess
Aggregate Contribution described below. If the Employer elects
to reduce the ADP of the Highly Compensated Employees, the
required reduction shall be treated as an Excess Contribution as
described in Section 3.7. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not
occur if both the ADP and ACP of the Highly Compensated Employees
does not exceed 1.25 multiplied by the ADP and ACP of the Non-
Highly Compensated Employees.
(ii)For purposes of this section, the Contribution
Percentage for any Eligible Employee who is a Highly Compensated
Employee and who is eligible to have Contribution Percentage
Amounts allocated to his account under two (2) or more plans
described in Code Section 401(a), or arrangements described in
Code Section 401(k) that are maintained by one or more Employers,
shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two (2) or more cash or
deferred arrangements under Code Section 401(k) ("CODA"), that
have different plan years, all CODAs ending with or within the
same calendar year shall be treated as a single arrangement.
(iii)In the event that this Plan satisfies the
requirements of Code Sections 401(m), 401(a)(4) or 410(b) only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such Code Sections only if
aggregated with this Plan, then this section shall be applied by
determining the Contribution Percentages of Eligible Employees as
if all such plans were a single plan.
(iv)For purposes of determining the Contribution
Percentage of an Eligible Employee who is a five percent (5%)
owner or one of the ten (10) most highly-paid Highly Compensated
Employees, the Contribution Percentage Amounts and Total
Compensation of such Eligible Employee shall include the
Contribution Percentage Amounts and Total Compensation for the
Plan Year of Family members. Family members, with respect to
Highly Compensated Employees, shall be disregarded as separate
Employees in determining the Contribution Percentage both for
Eligible Employees who are Non-Highly Compensated Employees and
for Eligible Employees who are Highly Compensated Employees.
(v)For purposes of determining the Average
Contributions Percentage test, Employer Matching Contributions
will be considered made for a Plan Year only if (i) paid to the
trust no later than the end of the twelve (12) month period
beginning on the day after the close of the Plan Year and (ii)
made on account of the Employee's Employee-Deferral for the Plan
Year.
(d)Excess Aggregate Contributions. If the Plan fails
to satisfy the ACP Test, Excess Aggregate Contributions (the
excess of the aggregate amount of Matching Contributions actually
made on behalf of Highly Compensated Employees for such Plan
Year, over the maximum amount of such contributions permitted
under the limitations of Section 401(m)(2)(A) of the Code) and
income or loss allocable thereto for the Plan Year in which the
ACP Test is failed, shall be treated as follows:
(i)Disposition of Excess Aggregate Contributions.
Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be distributed, no later than the last
day of each Plan Year, to Highly Compensated Employees or
forfeited, where otherwise appropriate, from the accounts of
Participants in which such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate
Contributions shall be allocated to Participants who are subject
to the family member aggregation rules of Code Section 414(q)(6),
the ACP of such Participants shall be reduced in accordance with
the "leveling" method described in the regulations and the Excess
Contributions of such Participants shall be allocated in the
manner prescribed by the regulations.
(ii)Determination of Income or Loss. Excess
Aggregate Contributions shall be adjusted for any income or loss
attributable thereto in the year in which the contribution was
made. The income or loss allocable to Excess Aggregate
Contributions shall be determined using any reasonable method,
provided that such method does not violate Section 401(a)(4) of
the Code, is consistently applied, and is used for allocating
income to Participants' Accounts.
(iii)Accounting for Excess Aggregate Contributions.
Excess Aggregate Contributions shall be distributed on a pro-rata
basis from the Participant's Employer Contribution Account (and,
if applicable, the Participant's Employee-Deferral Account).
4.6 Qualified Matching Contributions, Qualified
Nonelective Contributions. The Company may, in its sole
discretion, use the following contributions to enable the Plan to
satisfy the nondiscrimination requirements of Section 3.6 and/or
Section 4.5:
(a)Qualified Matching Contributions. A Qualified
Matching Contribution may be made by the Employers with respect
to Employee-Deferrals made on behalf of the Employee. Such
Qualified Matching Contributions shall be nonforfeitable when
made and shall be subject to the same restrictions on
distribution that apply to Employee-Deferrals.
(b)Qualified Nonelective Contributions. A Qualified
Nonelective Contribution may be made by the Employer on the basis
of either a specified dollar amount or a specified percentage of
Plan Compensation. Such Qualified Nonelective Contributions
shall be nonforfeitable and shall be subject to the same
restrictions on distribution that apply to Employee-Deferrals.
(c)The use of contributions described above shall be
as provided in regulations under Section 401(k) and Section
401(m) of the Code.
ARTICLE V
EMPLOYER DISCRETIONARY CONTRIBUTIONS
5.1 Employer Discretionary Contributions. The Board of
Directors shall annually determine the amount of Employer
Discretionary Contributions, if any, to be contributed for the
Plan Year. 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 Employers
responsible therefor.
In no event shall the contribution, when added to the other
contributions under the Plan, exceed the maximum amount which may
be claimed as a deduction by the Company for federal income tax
purposes under Code Section 404(a)(3).
The contribution, if any, shall be delivered in one or more
installments to the Trustee no later than the due date (including
extensions) of the Company's federal income tax return for its
fiscal year ending with or during the Plan Year for which the
contribution is made.
5.2 Allocation of Employer Discretionary Contributions.
As of each Annual Valuation Date, the Employer Discretionary
Contribution, if any, shall be allocated to the Employer
Contribution Accounts of all Active Participants in the
proportion that each such Active Participant's Plan Compensation
bears to the Plan Compensation for all Active Participants for
such year.
5.3 Top-Heavy Contributions. As of the end of any Plan
Year in which the Plan is Top-Heavy, the Employer shall
contribute to the Employer Contribution Account of each
Participant who is a Non-Key Employee the amount required under
Article XV.
ARTICLE VI
VESTING
6.1 Employee-Deferral Account. The interest of a
Participant in his Employee-Deferral Account shall be fully
vested and nonforfeitable at all times.
6.2 Rollover Contribution Account. The interest of a
Participant in his Rollover Contribution Account shall be fully
vested and nonforfeitable at all times.
6.3 Employer Contribution Account. The interest of a
Participant in his Employer Contribution Account shall be fully
vested and nonforfeitable upon such Participant's death prior to
termination of employment, attainment of the Normal Retirement
Age while still employed, or termination of employment by reason
of Disability. When a Participant's employment is terminated for
any other reason, the vested and nonforfeitable interest of such
Participant shall be determined in accordance with the following
schedule:
---------------------------------------------
Years Vested %
of Service
Less than 5 years 0
5 years or more 100
6.4 Forfeitures.
(a)For purposes of this Section 6.4, if a
Participant's account is 0% vested upon his Service Termination
Date, he shall be deemed to have received a distribution of his
account balance (and therefore a forfeiture results) as of the
end of the Plan Year in which the Service Termination Date
occurred.
(b)The forfeitures shall be applied in accordance with
Section 4.2.
(c)A Participant can have a forfeiture restored after
reemployment, but only under the circumstances described in
Section 6.6.
6.5 Reemployment Before Break in Service. If an Employee
has a Service Termination Date and is reemployed before a One-
Year Break in Service occurs, he will be treated for vesting
purposes as if the termination had not occurred.
6.6 Reemployment After Break in Service. The following
special rules apply if an Employee has a One-Year Break in
Service and is later reemployed by an Employer.
(a)His 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 Employer Contribution
Account funded after reemployment (i) if any portion of the
Participant's Employer Contribution Account is vested at the time
of the Break in Service, or (ii) if he incurs fewer than five
consecutive one-year Breaks in Service.
(b)His 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 Employer
Contribution Account funded prior to the Break in Service,
provided such Participant is reemployed by the Employer before he
receives a distribution or incurs five (5) consecutive one-year
Breaks in Service.
(c)(i)If a Participant has a Service Termination Date
and receives a distribution of the balance of his Employer
Contribution Account, he will be credited with the full value of
his forfeited account balance, determined as of the date of the
distribution, provided the Participant repays the amount of the
distribution before the earlier of (1) five (5) years after the
first day on which an Employee is subsequently reemployed by the
Employer, or (2) the close of the first period of five (5)
consecutive Breaks in Service. Any Participant who terminates
employment with zero vesting shall be credited with the full
value of his Employer Contribution Account determined as of the
date of the deemed distribution under Paragraph 6.4(a) if the
Participant is reemployed before he incurs five (5) consecutive
One-Year Breaks in Service.
(ii)If any credit is required under this Paragraph
(c), the credit shall be made at the close of the Plan Year in
which occurs the later of the reemployment or the repayment. The
credit shall be satisfied first from Forfeitures, second from
Employer Discretionary Contributions.
ARTICLE VII
ALLOCATIONS
7.1 Allocation of Contributions. Contributions to the
Plan shall be allocated in the following manner:
(a)Employee-Deferral Contributions shall be allocated
to the Employee-Deferral Account of each Participant in
accordance with the provisions of Article III.
(b)Employer Discretionary Contributions shall be
allocated to the Employer Contribution Account of each
Participant in accordance with the provisions of Article V.
(c)Matching Contributions shall be allocated to the
Employer Contribution Account of each Participant in accordance
with the provisions of Article IV.
(d)Qualified Matching Contributions and Qualified
Nonelective Contributions shall be allocated to the Employee-
Deferral Account of each Participant in accordance with the
provisions of Section 4.6.
7.2 Definitions. For purposes of this Article VII, the
term Accounts shall mean a Participant's Employee-Deferral
Account and Employer Contribution Account.
The term Annual Addition shall mean, for any Limitation
Year, the sum of (a) Matching Contributions, (b) Employee-
Deferral Contributions, (c) Employer Discretionary Contributions,
Qualified Matching Contributions, Qualified Non-elective
Contributions and (d) forfeitures.
The term Defined Benefit Plan Fraction shall mean, for any
year, a fraction (a) the numerator of which is the projected
annual benefit of the Participant under any defined benefit plan
maintained by the Employer (determined as of the close of the
Plan Year), and (b) the denominator of which is the lesser of
(i) the product of 1.25 multiplied by the maximum dollar
limitation in effect under Code Section 415(b)(1)(A) for such
year, or (ii) the product of 1.4 multiplied by the amount which
may be taken into account under Code Section 415(b)(1)(B) for
such year.
The term Defined Contribution Plan Fraction shall mean, for
any year, a fraction (a) the numerator of which is the sum of the
Annual Additions to the Participant's Accounts as of the close of
the Plan 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 a Employer: (i) the product of 1.25
multiplied by the dollar limitation in effect under Code Section
415(c)(1)(A) for such year (determined without regard to Code
Section 415(c)(6)), or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under Code Section
415(c)(1)(B) for such year.
The term Employer includes the group of Employers, if any,
which constitute a controlled group of corporations, trades or
businesses under common control (within the meaning of Code
Sections 1563(a) or 414(b) as modified by 415(h) and 414(c)), or
an affiliated service group (within the meaning of Code Sections
414(m) and 318) with an Employer. All such Employers shall be
treated as a single Employer for purposes of applying the Code
Section 415 limitations.
The term Limitation Year shall mean the Plan Year or any
other twelve-month period designated by the Board of Directors.
7.3 Annual Additions. No contribution or forfeiture shall
be allocated to the Accounts of an Employee for a Limitation Year
in excess of an amount which, when expressed as an Annual
Addition to such Employee's Accounts, is equal to the lesser of
(a) $30,000 or such larger amount equal to 1/4 of the defined
benefit dollar limitation as adjusted for cost-of-living
increases pursuant to Code Sections 415(c)(1), 415(d)(1) and
415(d)(3), or (b) twenty-five percent of such Employee's Section
415 Compensation for such limitation.
7.4 Limitation for Other Defined Contribution Plans. In
the event that the Annual Addition which would otherwise be made
to an Employee's accounts under all defined contribution plans
maintained by the Employer for any Limitation Year exceeds the
limitations set forth in this Article VII, the excess Annual
Addition shall be attributed first to the Plan, and the Employer
shall treat such excess as follows:
(a)First, the Employee-Deferral Contributions in
excess of six percent of Plan Compensation shall be returned to
the Employee to the extent necessary.
(b)Second, the portion of the excess consisting of
Matching Contributions shall be allocated and reallocated to the
Employer Contribution Accounts of other Participants in
accordance with Section 4.1 to the extent such allocations would
not cause Annual Additions to each Participant's Accounts to
exceed the limitations of this Section 7.4
(c)Third, the portion of the excess consisting of
Employer Discretionary Contributions shall be allocated and
reallocated to the Employer Contribution Accounts of other
Participants in accordance with Section 5.2 to the extent such
allocations would not cause Annual Additions to each
Participant's Accounts to exceed the limitation of this Section
7.4.
(d)If treated in accordance with subparagraphs (a)
through (c) above, the excess amounts shall not be deemed Annual
Additions in that limitation year if the excess amounts are a
result of the allocation of forfeitures, a reasonable error in
estimating a Participant's annual Plan 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
subparagraph.
(e)To the extent excess Annual Additions exist after
the distributions described in subparagraphs (a) through (c),
such excess amounts shall be allocated to a Section 415 Suspense
Account. All amounts in the Section 415 Suspense Account must be
used to reduce Matching Contributions, contributions required on
account of a Top-Heavy Plan Year, or Employer Discretionary
Contributions in succeeding Limitation Years. 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.
7.5 Limitation for Defined Benefit Plan. If an Employee is
also a Participant in one or more defined benefit plans
maintained by the Employer (or an Employee was a Participant in
any defined benefit plan previously maintained by an Employer),
the sum of such Employee's Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction (as determined pursuant to
Code Section 415(e)) for any Limitation Year may not exceed 1.0.
In the event that the sum of an Employee's Defined
Contribution Plan and Defined Benefit Plan Fractions would
otherwise exceed 1.0 for any Limitation Year, the benefit accrual
which would otherwise be made under all applicable defined
benefit plans for such Employee shall be considered not to have
accrued, to the extent necessary, so that the sum of such
fractions does not exceed 1.0. If after all such adjustments the
sum of the fractions would still exceed 1.0, then the annual
addition which would otherwise be made with respect to such
Employee shall be reduced in this Plan pursuant to Section 7.4
and finally under any applicable defined contribution plan to the
extent necessary so that the sum does not exceed 1.0.
ARTICLE VIII
TRUST FUND
8.1 Plan Assets. Avondale Industries, Inc. and the
Trustee have entered into a Trust Agreement, which agreement
provides for the establishment of a single Trust for the purpose
of holding and administering all amounts contributed to Accounts
under the Plan. All contributions, and the earnings on such
amounts, shall be delivered to the Trustee and held and
administered pursuant to the provisions of the Plan and the Trust
Agreement.
8.2 Separate Accounts. A separate Employee-Deferral
Account and Employer Contribution Account and Rollover
Contribution Account shall be maintained by the Trustee or a
recordkeeping agent appointed by the Plan Administrator for each
Participant.
8.3 Valuation. The fair market value of the assets
comprising the Trust shall be determined as of each Valuation
Date, in accordance with generally-accepted valuation methods and
accounting practices.
As of each Valuation Date, the value of each Account shall
be adjusted to reflect the effect on each sub-account of any
change in the value of each Investment Fund since the preceding
Valuation Date, as well as the effect of any deposits,
withdrawals, distributions, or other transactions occurring since
the last Valuation Date. The Committee shall provide to each
Participant, Beneficiary and alternate payee as of the end of
each calendar quarter a statement of the value of each Account in
which such person has an interest.
8.4 Investment Funds.
(a)The Committee shall determine what investment funds
to offer under the Plan and may, from time to time, change the
investment funds offered hereunder. As of the Effective Date of
this Plan, the investment funds are Merrill Lynch Retirement
Preservation Trust, Merrill Lynch Capital Fund, Merrill Lynch
Corporate Bond Fund Investment Grade, AIM Constellation Fund, AIM
Value Fund, and Templeton Growth Fund.
(b)As of each Valuation Date, the Trustee shall
perform a valuation of each Investment Fund in order to determine
the value of each Investment Fund and to reconcile the Investment
Funds from the prior Valuation Date. Such valuation shall
recognize any appreciation or depreciation in the fair market
value of all securities or other property held by each respective
Investment Fund, any cash and accrued earnings and shall take
into account any accrued expenses and proper charges against the
Investment Fund as of such Valuation Date.
8.5 Investment of Contributions.
(a)A Participant may direct that his Employee-Deferral
Contributions, Employer Contributions and Rollover Contributions,
if any, be allocated to one or more of the Investment Funds then
available, in multiples of one percent (1%), by providing voice
consent after such Participant has accessed a voice response
system by entering his personal identification number in
accordance with limitations reasonably determined by the
Committee, or in writing on a form acceptable to the Committee.
The total of all such allocations shall equal one hundred percent
of the Participant's interest in his Accounts. The Committee
will provide, upon Participant's request, a written confirmation
of his written investment instructions.
(b)If no investment direction exists the Participant's
affected interest shall automatically be invested in a short term
income fund until adequate instructions are received through a
voice response system or in writing on an acceptable form;
provided that such investment will not result in violation of
ERISA.
(c)Each Participant must consent to the allocation of
his contributions among the Investment Funds. Such direction
shall continue in effect until such time as the Participant
consents to a different allocation. The investment of future
contributions may be changed daily, provided such change is
received by the Committee within such time period preceding the
effective date as shall be prescribed by the Committee.
8.6 Transfer of Amounts Among Investment Funds
(a)A Participant may elect to transfer amounts from
one Investment Fund to another in increments of one percent (1%).
Any such change shall be by providing voice consent after the
Participant has accessed a voice response system by entering his
personal identification number, or in writing on a form
acceptable to the Committee. Such election shall be effective on
the business day transacted if requested via the voice response
system before 3 p.m. Eastern Standard Time or as soon as
administratively feasible if requested on a written form.
Transfers out of an investment fund can be processed in terms of
dollars, shares, or percentages. Dollar and percent transfers
will be converted into shares, traded based on the previous
night's price, and processed based on the current night's price.
(b)In the event an acceptable form is not received by
the Committee for all or any portion of a Participant's Accounts,
the current investment direction shall continue in effect until
adequate instructions are received through a voice response
system or in writing on an acceptable form.
(c)The timing and frequency of transfers among
investment options may be further restricted if such restrictions
are required by the institution handling or providing the
investment fund.
8.7 Liability for Investment Decisions. This Plan is
intended to constitute a plan described in Section 404(c) of
ERISA, and Title 29 of the Code of Federal Regulations Section
2550.404c-1. Fiduciaries of the Plan may be relieved of
liability for any losses which are the direct and necessary
result of investment instructions given by each Participant or
Beneficiary. Neither the Employer, the Trustee nor the Committee
shall be responsible for any loss which may result from a
Participant's exercise of control over the investment of his
Accounts.
Each Participant shall have exclusive responsibility for and
control over the investment of amounts allocated to his Accounts.
Neither the Employers, the Trustee nor the Committee shall have
any duty, responsibility or right to question a Participant's
investment directions or to advise a Participant with respect to
the investment of his accounts.
The Committee will be obligated to follow the Participant's
investment directions except when the instructions:
(a)are not in accordance with this Plan document and
instruments governing this Plan insofar as such documents and
instruments are consistent with the provisions of Title I of
ERISA;
(b)would result in a prohibited transaction described
in ERISA section 406 or Code section 4975 that is not otherwise
exempted by statute or regulation;
(c)would generate income that would be taxable to this
Plan;
(d)would cause a fiduciary to maintain the indicia of
ownership of any assets of the Plan outside the jurisdiction of
the district courts of the United States other than as permitted
by section 404(b) of ERISA and related regulations;
(e)would jeopardize the Plan's tax qualified status
under the Code; or
(f)could result in a loss in excess of the Account
balance.
8.8 Accounting Procedures. The Committee shall establish
such equitable accounting procedures as may be required to make
(a) allocations, (b) valuations, and (c) adjustments to Partici-
pants' accounts in accordance with the provisions of the Plan.
The Plan Administrator may modify its accounting procedures, from
time to time, for the purpose of achieving equitable and non-
discriminatory allocations.
ARTICLE IX
BENEFITS
9.1 Normal Retirement Date. The Normal Retirement Date
shall be the later of (a) the Participant's Normal Retirement Age
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 Normal Retirement Date, 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.
9.2 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 12.6
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.
9.3 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 9.4.
9.4 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.
Payment to an "alternate payee" pursuant to a "qualified
domestic relations order" shall be made at such time as
determined pursuant to the qualified domestic relations order,
based on the value of the alternate payee's interest in the
account as of the Valuation Date preceding the date the payment
is made. No payment to an alternate payee can be made later than
when the Participant's benefit is paid to him as a result of his
termination of employment. If the Participant has a loan as an
investment of his account, such Participant will continue to be
responsible for the entire loan. The Plan Administrator is
authorized to establish any additional rules necessary to
determine the rights of alternate payees under qualified domestic
relations orders.
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.
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 person identified in the
document as an alternate payee of the receipt of such judgment,
decree order and shall notify the affected Participant and any
such designated 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.
In the event that the Committee is informed in writing of a
claim by a person (a "Claimant") that may result in the rendering
of a qualified domestic relations order with respect to a
Participant's Accounts in the Plan, the Committee is authorized
to suspend any payments from those Accounts until receipt of a
judgment, decree or order setting forth the rights of Claimant as
an alternate payee, or upon receipt of an order or written
release by the Claimant evidencing that the Claimant has no
further claim to the Participant's interest in the Plan.
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.
ARTICLE X
PAYMENT OF BENEFITS
10.1 Time of Payment. A Participant shall be eligible to
receive a distribution of his Vested Interest when he has had a
Service Termination Date.
Such a Participant shall be entitled to receive his Vested
Interest at any time, provided that payment cannot be made sooner
than 30 days following his Service Termination Date and no later
than the later of the Participant's Normal Retirement Age or his
Service Termination Date. A distribution is based upon the value
of the Participant's Vested Interest as of the Valuation Date
coincident with or immediately preceding the date of
distribution.
The foregoing notwithstanding:
(a)If the value of a Participant's Vested Interest is
less than $3,500, the Vested Interest will be distributed as soon
as administratively practicable following the Service Termination
Date;
(b)If the value of a Participant's Vested Interest is
greater than $3,500, the Participant must consent to the
distribution;
(c)Notwithstanding (b) above, if an Employee is
employed on the March 31 following the year in which he attains
age 70 1/2, the payment of his Vested Interest shall be made no
later than that date.
In no event shall a distribution occur while a Participant
remains in the employ of an Employer, except in the event of a
withdrawal by reason of Financial Hardship or after age 59 1/2, as
described in Sections 11.1 and 11.2, below.
The distribution rules that apply to an "alternate payee"
pursuant to a "qualified domestic relations order" are stated in
Section 9.4 herein.
10.2 Death Benefit. If a Participant dies with a balance
in his Accounts, the interest of such Participant shall be
distributed to the Participant's Beneficiary in a single-sum
payment as soon as administratively practicable after 90 days
from the Participant's death.
10.3 Form of Distribution. Distributions shall be made in
a single-sum payment.
10.4 Temporary Non-Payment of Benefits.
(a)Unless the Participant elects otherwise in writing,
the payment of his Vested Interest shall commence no later than
the sixtieth (60th) day after the close of the Plan Year in which
the last of the following occurs:
(i)the Participant achieves Normal Retirement
Age, or
(ii)the Participant terminates his service with
the Employer, whichever is the latest.
(b)If a Participant or Beneficiary 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.
10.5 Direct Rollover Rules. Notwithstanding any provision
of the Plan to the contrary that would otherwise limit a
Distributee's election under this Article, the 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.
10.6 Notice. The notice required by section 1.411(a)-11(c)
of the Income Tax Regulations must be provided to a Participant
no less than 30 days and no more than 90 days before the date of
distribution. The notice explains a Participant's right to defer
receipt of the distribution if his Vested Interest exceeds
$3,500. A Participant will also receive an explanation of his
distribution options no less than 30 days and no more than 90
days before the date of distribution. The distribution 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,
provided that:
(a)the Committee 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
(b)the Participant, after receiving the notice,
affirmatively elects a distribution.
ARTICLE XI
IN-SERVICE DISTRIBUTION AND LOANS
11.1 Distribution after Attaining Age 59 1/2. A
Participant who is still an Employee and has attained age 59 1/2
shall be entitled to make withdrawal(s) from his Employee-
Deferral Account, Rollover Account and the vested portion of the
Participant's Employer Contribution Account by notifying the
Committee.
11.2 Financial Hardship. Prior to a Participant's
termination of employment or age 59 1/2 he may apply to the
Committee for a withdrawal of funds held in his Rollover
Contribution Account and Employee-Deferral Account on account of
a Financial Hardship. The total of such withdrawals from a
Participant's Employee-Deferral Account shall not exceed the
total of his Employee-Deferral Contributions. The withdrawal
shall be made only under the following conditions:
(a)The withdrawal may be made only to meet one of the
following needs:
(i)Medical expenses described in Code Section
213(d), incurred by the Participant, the Participant's spouse, or
any dependent (as defined in Code Section 152) of the
Participant;
(ii)Purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii)Payment for all or a portion of the next
twelve (12) months of post-secondary education for the
Participant, his spouse, children, or dependents;
(iv)To prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of
the Participant's principal residence; or
(v)Any other need permitted under Code Section
401(k) and the regulations issued thereunder and authorized by
the Committee.
(b)The Participant provides to the Committee a letter
containing the following:
(i)A statement of the amount needed and the
purpose for which it is needed;
(ii)A representation that the expense will not be
paid for by insurance or other source specific to the expense,
that the Participant and his spouse (and the Participant's minor
child, if the expense is for the child's benefit) have no assets
he can liquidate to pay for the expense without creating a new
hardship, and that ceasing Employee Deferrals will not suffice to
satisfy the needs;
(iii)A representation that the Participant has not
been able to borrow from commercial sources on reasonable
commercial terms in an amount sufficient to satisfy the need; and
(iv)A promise that the funds will be used only for
the specified purpose.
(c)The withdrawal cannot exceed the amount necessary
to satisfy the need described at paragraph (a), plus any amounts
necessary to pay federal or state income taxes or penalties
reasonably anticipated to result from the distribution.
(d)The Participant has obtained all distributions,
other than hardship distributions, and all non-taxable loans
currently available under all "plans" (as contemplated by U.S.
Treasury Regulation Section 1.401(k)-1(d)(2)(iii)), maintained by
the Employer.
(e)The Participant shall not be allowed to make
Employee-Deferral Contributions until the Entry Date next
following the 12-month anniversary of the withdrawal.
(f)The Participant's limit on Employee-Deferral
Contributions in the year immediately following the year of the
withdrawal shall be the limit under Section 3.4 for that year,
less the amount of the Participant's Employee-Deferral
Contributions made in the year of the hardship withdrawal.
11.3 Loans to Participant. A Participant who is an
Employee may make a loan from the Plan, subject to the following
rules and limitations:
(a)The total amount of a Participant's loan when added
to the outstanding balance of all the Participant's prior loans
from the Plan during the one year period ending the day before
the loan is made shall not exceed $50,000, nor shall the total
amount of the loan when added to the outstanding balance of the
Participant's loans under the Plan exceed one-half the
Participant's Vested Interest under the Plan. Amounts set aside
for an alternate payee shall not be included. The Plan
Administrator can establish uniform nondiscriminatory policies
further limiting the amount or frequency of Employee loans.
(b)Each loan shall be deemed an investment of the
account of the Participant receiving the loan. Loan
disbursements shall be pro rated across all funds.
(c)Each loan shall bear a reasonable rate of interest
as determined by the Trustee.
(d)A Participant can have no more than two (2) loans
outstanding at anytime if a Participant makes a final payment on
one of two outstanding loans, a new loan can be obtained after a
30-day delay following that final payment.
(e)Each loan may not be less than $1,000.
(f)The Plan Administrator shall provide each loan
applicant with a clear statement of the charges with respect to
each loan transaction. Such statement shall include the dollar
amount and annual interest rate or the finance charge.
(g)The term of a loan shall be determined by the
Participant but shall not be less than 12 months or exceed five
years.
(h)A loan made pursuant to this Article XI shall be
repaid in accordance with a schedule established by the Committee
which schedule shall call for payments of interest and amortized
payments of principal over the term of the loan.
(i)Each loan shall be evidenced by the Participant's
promissory note for the amount of the loan, including interest,
payable to the order of the Trust, and each loan shall be secured
by collateral. The collateral shall consist of the assignment of
the Participant's right, title and interest in the Participant's
Vested Interest in the Trust.
(j)During paid employment each loan shall be repaid by
withholding from the Participant's pay. Upon termination of
employment, the Participant has 90 days to pay the loan in full.
If the Participant terminates employment and receives an
immediate lump sum distribution, any promissory note held by the
Plan for his account shall be distributed to him. While on an
unpaid leave, the Participant shall pay to the Trustee all
amounts due on the repayment frequency on which the loan is
amortized. Payments must be made by certified or bank check.
Except as provided in this Paragraph, the failure to make timely
payment of any one payment causes the full amount of the note to
become due, and if permitted by law the note shall be distributed
to the Participant.
(k)Repayments shall be credited to the Participant's
accounts out of which the loan was made, and allocated among the
Investment Funds pursuant to the Participant's most recent
allocation election.
ARTICLE XII
ADMINISTRATION
12.1 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.
12.2 401(k) Administrative Committee. The 401(k)
Administrative Committee (the "Committee") shall administer the
Plan and is designated as the "administrator" within the meaning
of Section 3(16) of ERISA. The Committee shall have not less
than three nor more than five members, 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.
12.3 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,
Beneficiaries and alternate payees;
(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, Beneficiaries and
alternate payee;
(j)reviewing the investment performance of the
Trustee;
(k)reviewing the performance of any advisors appointed
by the Committee;
(l)selecting and reviewing selected investment funds;
(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.
12.4 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 shall 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 shall 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 12.3, 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.
12.5 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.
12.6 Claims Review Procedure. If a Participant
(Beneficiary or alternate payee) believes a benefit or
distribution is due under the Plan, he 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 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 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.
12.7 Information from Participants, Beneficiaries and
Alternate Payees. Each Participant, Beneficiary and alternate
payee 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.
12.8 Actions. Any action taken by the Plan Administrator
or 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 Plan Administrator or Committee shall
be uniform and made in a nondiscriminatory manner.
12.9 Bond. The Company shall purchase a bond for the Plan
Administrator or Committee and any other fiduciaries of the Plan
in accordance with the requirements of the Code and ERISA.
12.10 Indemnification. 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), 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.
ARTICLE XIII
AMENDMENT OF THE PLAN
13.1 Right to Amend or Suspend Contributions. Subject to
the provisions of Section 13.3, 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,
Beneficiary, or alternate payee. Each amendment of the Plan
shall be in writing, executed by order of the Board of Directors
and shall be effective on the date specified therein. Notice of
any amendment, 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.
13.2 Amendment by Committee. Notwithstanding Section 13.1
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), 401(k) and
401(m) 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
amendment by the Committee shall be given to the Board of
Directors, the Trustee and to all Participating Employers within
a reasonable time.
13.3 Restriction on Amendment. No amendment under Sections
13.1 or 13.2 shall:
(a)authorize or permit 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 16.16) to be used
for or diverted to purposes other than for the exclusive benefit
of the Participants and that Beneficiaries and alternate payees
under the Plan prior to the satisfaction of all liabilities of
the Plan; and
(b)deprive a Participant of his nonforfeitable right
to benefits accrued as of the date of such amendment. If the
vesting schedule of the Plan is amended in such a way that an
Employee might in any Plan Year have less vesting credit under
the new schedule than under the schedule prior to the amendment,
each Employee with at least three Years of Service may elect to
have his nonforfeitable percentage computed without regard to
such amendment. The period during which such election may be
made shall commence with the date the amendment is adopted and
shall end on the later of (i) sixty days after the amendment is
adopted, (ii) sixty days after the amendment becomes effective,
or (iii) sixty days after the Employee or Participant is provided
with written notice of the amendment.
13.4 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), 401(k), or 401(m) of the Code or any other applicable
section of law (including ERISA) and the Regulations issued
thereunder.
13.5 Merger. The Plan may be merged or consolidated with,
or its assets and liabilities may be transferred to any other
plan only if the benefits which would be received by a
Participant in the event of a termination of the Plan immediately
after such transfer, merger or consolidation are at least equal
to the benefit such Participant would have received if the Plan
had terminated immediately prior to the transfer, merger or
consolidation.
ARTICLE XIV
TERMINATION OF THE PLAN
14.1 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 and shall be delivered to the Board of Directors, the
Committee 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.
14.2 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.
14.3 Disposition of Accounts After a Termination. 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 or upon complete
discontinuance of contributions, the Committee shall continue to
administer the Plan, the Trustee shall continue to administer the
Trust Fund, and all payments to Participants shall continue in
accordance with the provisions of Article X; 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.
After a Plan termination, the assets of the Plan shall be
distributed to the Participants (and others for whose benefits
accounts are then maintained) at such time as the Committee
determines. No distribution shall be made of Employee-Deferral
Account balances as a result of a termination of the Plan unless
the Plan is terminated without the establishment or maintenance
of another defined contribution plan, as provided in Code
Sections 401(k)(2)(B)(i)(II) and 401(k)(10)(A)(i).
Notwithstanding the foregoing paragraph, upon or after the
termination of the Plan, the Board of Directors shall have the
power to terminate the Trust.
14.4 Internal Revenue Service Approval for Distribution.
In the event that the Committee applies to the Internal Revenue
Service for a determination that the termination of the Plan does
not disqualify it, no person shall have any right or claim to any
assets of the Trust Fund before the Internal Revenue Service
shall determine that the Plan is qualified through the proposed
distribution of assets under this Article XIV.
ARTICLE XV
STAND-BY TOP-HEAVY PROVISIONS
15.1 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 XV 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.
15.2 Definitions. For purposes of this Article XV 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.
15.3 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%
15.4 Minimum Contribution. For each Plan Year that the
Plan is a Top Heavy Plan, the Employer Contribution (including
forfeitures but excluding rollovers pursuant to Section 3.8)
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 Section 415
Compensation.
15.5 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 15.5 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.
15.6 Other Plans. The Committee shall, to the extent
permitted by the Code and in accordance with the Regulations,
apply the provisions of this Article XV 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.
ARTICLE XVI
GENERAL PROVISIONS
16.1 Plan Voluntary. Although it is intended that the Plan
shall be continued indefinitely, 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 an
Employee by an Employer. Nothing contained in the Plan shall be
deemed to give any Employee the right to be retained in the
service of an Employer or to interfere with the right of an
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.
16.2 Payments to Minors and Incompetents. If a
Participant, Beneficiary or alternate payee 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.
16.3 Missing Payee. The Committee shall retain the address
of each Participant, Beneficiary or alternate payee. Any notice
sent to the last address filed with the Plan Administrator or for
the last address indicated on an Employer's records will be
binding upon a Participant or Beneficiary.
16.4 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.
16.5 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.
16.6 Communications to Committee. All elections,
designations, requests, notices, instructions, and other
communications from an Employee, a Participant, Beneficiary, or
alternate payee 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.
16.7 Communications from Employer or Committee. All
notices, statements, reports and other communications from an
Employer or the Committee to any Employee, Participant,
Beneficiary or alternate payee 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,
Beneficiary or alternate payee 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.
16.8 Action. Except as may be specifically provided
herein, any action required or permitted to be taken by an
Employer may be taken on behalf of the Employer by any authorized
officer of the Employer.
16.9 Liability for Benefits. Neither the Trustee, the
Employers, 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
Employers, the Committee and the Plan Administrator to make any
payment is limited to the available assets of the Trust.
16.10 Named Fiduciary. The "named fiduciaries" of the Plan
within the meaning of ERISA Section 403 shall be (a) the
Employer, (b) the Plan Administrator, (c) the Trustee, and
(d) the Committee.
16.11 Gender. Whenever used in the Plan the masculine
gender includes the feminine.
16.12 Captions. 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.
16.13 Applicable 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.
16.14 Reversion of Employer Contributions. In no event
shall the assets of the Plan revert to the benefit of the
Employer. Notwithstanding any provision of the Plan to the
contrary, however, all contributions by Employers are conditioned
upon the deductibility of such contribution under Code Section
404. To the extent that a deduction is disallowed for an
Employer's contribution, the Trustee shall return the principal
amount of such contribution upon the demand of the Employee. Any
such demand shall be made within one year following the final
determination of the disallowance.
Further, notwithstanding any provision of the Plan to the
contrary, any contribution which is made by the Employer on
account of a good faith mistake of fact may be returned to the
Employer. The Employer shall notify the Trustee, in writing, of
such mistake within one year of the contribution. The Trustee
shall return the principal amount of the Employer Contribution as
soon as possible, but in any event within 60 days after written
notification by the Employer.
The maximum amount that may be returned to an Employer in
the case of a mistake of fact or the disallowance of a deduction
is the excess of (a) the amount contributed, over, as relevant,
(b)(i) the amount that would have been contributed had no mistake
of fact occurred, or (ii) 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.
16.15 Expenses. All expenses of administration shall be
paid from the Trust unless paid directly by the Employer. The
Employer may reimburse the Trust for any administrative expense
paid by the Trust; such reimbursement shall not be treated as an
Employer Contribution under the terms of the Plan.
EXECUTED in multiple originals in New Orleans, Louisiana,
effective as of the 20th day of December, 1995.
---- --------
WITNESSES: AVONDALE INDUSTRIES, INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE GULFPORT MARINE INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE INDUSTRIES OF
NEW YORK, INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE SERVICES CORP.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE SHIPYARDS OF TEXAS,
INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE TRANSPORTATION
COMPANY, INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE ENTERPRISES, INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
AVONDALE CONSTRUCTION MANAGEMENT,INC.
/s/ JACKIE H. WALKER BY: /s/ THOMAS M. KITCHEN
-------------------- ----------------------
/s/ BRUCE L. HICKS
------------------
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. 401(k) Savings 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 & CFO
--------------------
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
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. 401(k) Savings Plan as a free act and deed on
behalf of Avondale Construction Management, 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 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTARY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
AVONDALE INDUSTRIES, INC.
401(k)
SAVINGS PLAN
TABLE OF CONTENTS
Article Contents Section
I. DEFINITIONS
Accounts 1.1
Active Participant 1.2
Affiliated Company 1.3
Beneficiary 1.4
Board of Directors 1.5
Code 1.6
Committee 1.7
Company 1.8
Compensation 1.9
Plan Compensation
Section 415 Compensation
Total Compensation
Disability 1.10
Disability Retirement Date 1.11
Eligible Employee 1.12
Employee 1.13
Employee-Deferral or Employee-Deferral
Contribution 1.14
Employee-Deferral Account 1.15
Employee-Deferral Agreement 1.16
Employer 1.17
Employer Contribution 1.18
Employer Contribution Account 1.19
Employer Discretionary Contribution 1.20
Entry Date 1.21
ERISA 1.22
Highly Compensated Employee 1.23
Hour of Service 1.24
Matching Contribution 1.25
Non-Highly Compensated Employee 1.26
Non-Participating Employer 1.27
Normal Retirement Date
and Normal Retirement Age 1.28
One-Year Break-in-Service 1.29
Parental Absence 1.30
Participant 1.31
Participating Employer 1.32
Plan 1.33
Plan Year 1.34
Rollover Contribution Account 1.35
Service Termination Date 1.36
Trust or Trust Agreement 1.37
Trustee 1.38
Trust Fund 1.39
Valuation Date 1.40
Vested Interest 1.41
Year of Service 1.42
II. PARTICIPATION
Commencement of Participation 2.1
Termination of Participation 2.2
Participation Following Reemployment 2.3
III. EMPLOYEE-DEFERRALS
Employee-Deferrals 3.1
Delivery of Employee-Deferral
Contributions 3.2
Changes in and Discontinuance of
Employee-Deferrals 3.3
Dollar Limitation 3.4
Return of Excess Deferral Amounts 3.5
Non-Discrimination Rules 3.6
Return of Excess Contributions 3.7
Rollover Contributions 3.8
IV. MATCHING CONTRIBUTIONS
Matching Contributions 4.1
Forfeitures 4.2
Delivery of Contributions 4.3
Adjustments if Employee-Deferral
Contributions Adjusted 4.4
Discrimination
Test-Matching Contributions 4.5
Qualified Matching Contributions, Qualified
Nonelective Contributions 4.6
V. EMPLOYER DISCRETIONARY CONTRIBUTIONS
Employer Discretionary Contributions 5.1
Allocation of Employer Discretionary
Contributions 5.2
Top-Heavy Contributions 5.3
VI. VESTING
Employee-Deferral Account 6.1
Rollover Contribution Account 6.2
Employer Contribution Account 6.3
Forfeitures 6.4
Reemployment Before Break in Service 6.5
Reemployment After Break in Service 6.6
VII. ALLOCATIONS
Allocation of Contributions 7.1
Definitions 7.2
Annual Additions 7.3
Limitation for Other Defined
Contribution Plans 7.4
Limitation for Defined Benefit Plan 7.5
VIII. TRUST FUND
Plan Assets 8.1
Separate Accounts 8.2
Valuation 8.3
Investment Funds 8.4
Investment of Contributions 8.5
Transfer of Amounts Among
Investment Funds 8.6
Liability for Investment Decisions 8.7
Accounting Procedures 8.8
IX. BENEFITS
Normal Retirement Date 9.1
Disability Retirement Date 9.2
Nonalienation of Benefits 9.3
Qualified Domestic Relations Order 9.4
X. PAYMENT OF BENEFITS
Time of Payment 10.1
Death Benefit 10.2
Form of Distribution 10.3
Temporary Non-Payment of Benefits 10.4
Direct Rollover Rules 10.5
Notice 10.6
XI. IN-SERVICE DISTRIBUTION AND LOANS
Distribution after Attaining
Age 59 1/2 11.1
Financial Hardship 11.2
Loans to Participant 11.3
XII. ADMINISTRATION
Board of Directors 12.1
401(k) Administrative Committee 12.2
Committee's Duties and Responsibilities 12.3
Committee's Powers 12.4
Chairman of the Committee 12.5
Claims Review Procedure 12.6
Information from Participants
Beneficiaries and Alternate Payees 12.7
Actions 12.8
Bond 12.9
Indemnification 12.10
XIII. AMENDMENT OF THE PLAN
Right to Amend or Suspend Contributions 13.1
Amendment by Committee 13.2
Restriction on Amendment 13.3
Retroactivity 13.4
Merger 13.5
XIV. TERMINATION OF THE PLAN
Events Constituting Termination 14.1
Partial Termination 14.2
Disposition of Accounts After a
Termination 14.3
Internal Revenue Service Approval
for Distribution 14.4
XV. STAND-BY TOP-HEAVY PROVISIONS
Top Heavy Plan 15.1
Definitions 15.2
Vesting 15.3
Minimum Contribution 15.4
Limitation on Contributions 15.5
Other Plans 15.6
XVI. GENERAL PROVISIONS
Plan Voluntary 16.1
Payments to Minors and Incompetents 16.2
Missing Payee 16.3
Required Information 16.4
Subject to Trust Agreement 16.5
Communications to Committee 16.6
Communications from Employer or
Committee 16.7
Action 16.8
Liability for Benefits 16.9
Named Fiduciary 16.10
Gender 16.11
Captions 16.12
Applicable Law 16.13
Reversion of Employer Contributions 16.14
Expenses 16.15
TRUST AGREEMENT
between
MERRILL LYNCH TRUST COMPANY (s/CR) as the Trustee
----------------
and
Avondale Industries, Inc., as the Employer
-------------------------
Trust Agreement entered into as of January l, 1996 by and between
the above-named employer (the "Employer") and Merrill Lynch Trust
Company (s/CR), a (s/CR) corporation (the "Trustee"), with
------------ -------------
respect to a trust ("Trust") forming part of the Avondale Industries,
Inc. 401(k) Savings Plan (the "Plan").
The Empioyer and the Trustee hereby agree as follows:
ARTICLE I
STATUS OF TRUST AND APPOINTMENT
AND ACCEPTANCE OF TRUSTEE
1.01 Status of Trust. The Trust is intended to be a qualified
trust under section 401(a) of the Intemal Revenue Code of 1986, as
amended from time to time (the "Code"), and exempt from taxation
pursuant to section 501 (a) of the Code.
1.02 Appointment of Trustee. The Employer represents that all
necessary action has been taken for the appointment of the Trustee as
trustee of the Trust and that the Trust Agreement constitutes a legal,
valid and binding obligation of the Employer.
1.03 Acceptance of Appointment. The Trustee accepts its
appointment as trustee of the Trust.
1.04 Title of Trust. The Trust shall be known as the Avondale
Industries, Inc 401(k) Savinqs Plan Trust.
1.05 Effectiveness. This Trust Agreement shall not become
effective until executed and delivered by both the Employer and the
Trustee.
ARTICLE II
ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
2.01 Named Administrative and Investment Fiduciaries For
purposes of this Trust Agreement, the term "Named Administrative
Fiduciary" refers to the person named or provided for in the Plan as
responsible for the administration and operation of the Plan, and the
term "Named Investment Fiduciary" refers to the person provided for in
the Plan as responsible for the investment and management of Plan
assets to the extent provided for in this Trust Agreement. The Named
Administrative Fiduciary and the Named Investment Fiduciary may be the
same person. If any such person is not named or provided for in the
Plan or if so named or provided for, is not then serving, the Employer
shall be the Named Administrative Fiduciary or the Named Investment
Fiduciary or both, as the case may be.
2.02 Identification of Named Fiduciaries and Designees. The Named
Administrative Fiduciary and the Named Investment Fiduciary under the
Plan shall each be identified to the Trustee in writing by the
Employer, and specimen signatures of each, or of each member thereof,
as appropnate, shall be provided to the Trustee by the Employer. The
Employer shall promptly give written notice to the Trustee of a change
in the identity either of the Named Administrative Fiduciary or the
Named Investment Fiduciary, or any member thereof, as appropnate, and
until such notice is received by the Trustee, the Trustee shall be
fully protected in assuming that the identity of the Named
Administrative Fiduciary or Named Investment Fiduciary, and the
members thereof, as appropnate, is unchanged. Each person authorized
in accordance with the Plan to give a direction to the Trustee on
behalf of the Named Administrative Fiduciary or the Named Investment
Fiduciary shall be identified to the Trustee by written notice from
the Employer or the Named Administrative Fiduciary or the Named
Investment Fiduciary, as the case may be, and such notice shall
contain a specimen of the signature. The Trustee shall be entitled to
rely upon each such written notice as evidence of the identity and
authority of the persons appointed until a written cancellation of the
appointment, or the written appointment of a successor, is received by
the Trustee from the Employer, the Named Administrative Fiduciary or
the Named Investment Fiduciary, as the case may be.
ARTICLE III
RECEIPTS AND TRUST FUND
3.01 Receipt by Trustee. The Trustee shall receive in cash or
other assets acceptable to the Trustee all contnbutions paid or
delivered to it which are allocable under the Plan and to the Trust
and all transfers paid or delivered under the Plan to the Trust from a
predecessor trustee or another trust (including a trust forming part
of another plan qualified under section 401(a) of the Code), provided
that the Trustee shall not be obligated to receive any such
contribution or transfer unless prior thereto or coincident therewith,
as the Trustee may specify, the Trustee has received such
reconciliation, allocation, investment or other information concerning,
or such direction, contribution or representation with respect to, the
contribution or transfer or the source thereof as the Trustee may
require. The Trustee shall have no duty or authority to (a) require any
contributions or transfers to be made under the Plan or to the Trustee,
(b) compute any amount to be contributed or transferred under the Plan
to the Trustee, or (c) determine whether amounts received by the
Trustee comply with the Plan.
3.02 Trust Fund. For purposes of this Trust Agreement, the "Trust
Fund" consists of all money and other property received by the Trustee
pursuant to Section 3.01 hereof, increased by any income or gains on or
increment in such assets and decreased by any investment loss or
expense, benefit or disbursement paid pursuant to this Trust Agreement.
The Trustee shall hold the Trust Fund, without distinction between
principal and income, as a nondiscretionary trustee pursuant to the
terms of this Trust Agreement. Assets of the Trust may, in the
Trustee's discretion, be held in an account with an affiliate of the
Trustee.
ARTICLE IV
PAYMENTS, ADMINISTRATIVE DIRECTIONS
AND EXPENSES
4.01 Payments by Trustee. Payments of money or property from the
Trust Fund shall be made by the Trustee upon direction from the Named
Administrative Fiduciary or its designee. Payments by the Trustee shall
be transmitted to the Named Administrative Fiduciary or its designee
for delivery to the proper payees or to payee addresses supplied by the
Named Administrative Fiduciary or its designee, and the Trustee's
obligation to make such payments shall be satisfied upon such
transmittal. The Trustee shall have no obligation to determine the
identity of persons entitled to payments under the Plan or their
addresses.
4.02 Named Administrative Fiduciary's Directions. Directions from
or on behalf of the Named Administrative Fiduciary or its designee
shall be communicated to the Trustee or the Trustee's designee only in
a manner and in accordance with procedures acceptable to the Trustee.
The Trustee's designee shall not, however, be empowered to implement
any such directions except in accordance with procedures acceptable to
the Trustee. The Trustee shall have no liability for following any such
directions or failing to act in the absence of any such directions. The
Trustee shall have no liability for the acts or omissions of any person
making or failing to make any direction under the Plan or this Trust
Agreement nor any duty or obligation to review any such direction, act
or omission.
4.03 Disputed Payments. If a dispute arises over the propriety of
the Trustee making any payment from the Trust Fund, the Trustee may
withhold the payment until the dispute has been resolved by a court of
competent jurisdiction or settled by the parties to the dispute. The
Trustee may consult legal counsel and shall be fully protected in
acting upon the advice of counsel.
4.04 Trustee's Compensation and Expenses. If the Employer so
elects in a manner satisfactory to the Trustee, the Employer shall
(a) pay the Trustee compensation for its services under this Trust
Agreement in accordance with the Trustee's fee schedule in effect and
applicable at the time such compensation becomes payable, and (b) pay
or reimburse the Trustee for all expenses incurred by the Trustee in
connection with or relating to the performance of its duties under this
Trust Agreement or its status as Trustee, including reasonable
attorneys fees. If the Employer does not so elect, such compensation
and expenses shall be charged against and withdrawn from the Trust Fund
as provided below.
Until paid by the Employer or charged against and
withdrawn from the Trust Fund, as the case may be, the Trustee's
compensation and expenses shall be a lien upon the Trust Fund. The
Trustee is authorized to charge the Trust Fund for and withdraw from
the Trust Fund, without direction from the Named Administrative
Fiduciary or any other person, the amount of any such fees or expenses
which the Employer has not elected to pay and the amount of any such
fees or expenses which the Employer has so elected to pay but which
remain unpaid for a period of 60 days after presentation of a statement
for such amount to the Employer. Trust Fund assets shall be applied to
pay such fees and expenses in the following priority by asset category
to the extent thereof held at the time of withdrawal in the Trust Fund
subfund or account to which the fee or expense is allocated:
(i) uninvested cash balances: (ii) shares of any money market fund or
funds held in the Trust Fund; and (iii) any other Trust Fund assets.
The Trustee is authorized to allocate its fees and expenses among these
subfunds or accounts to which the fees or expenses pertains in such
manner as the Trustee deems appropnate under the circumstances unless
prior to such allocation the Employer or the Named Administrative
Fiduciary specifies the manner in which the allocation is to be made.
The Trustee is also authorized but not required to sell any shares or
other assets referred to above to the extent necessary for the purpose.
4.05 Taxes. The Trustee is authorized, with or without direction
from the Named Administrative Fiduciary or any other person, to
withdraw from the Trust Fund and pay any federal, state or local taxes,
charges or assessments of any kind levied or assessed against the Trust
or assets thereof. Until paid, such taxes shall be a lien against the
Trust Fund. The Trustee shall give notice to the Named Administrative
Fiduciary of its receipt of a demand for any such taxes, charges or
assessments. The Trustee shall not be personally liable for any such
taxes, charges or assessments.
4.06 Expenses of Administration. Expenses incurred by the
Employer, the Named Administrative Fiduciary, the Named Investment
Fiduciary, any Investment Manager designated pursuant to Section 5.02
or any other persons designated to act on behalf of the Employer, the
Named Administrative Fiduciary or the Named Investment Fiduciary,
including reimbursement for expenses incurred in the performance of
their respective duties, shall be the obligation of the Employer or
other person specified in the Plan. Such expenses, however, may be paid
from the Trust Fund upon the written direction to the Trustee of the
Named Administrative Fiduciary.
4.07 Restriction on Alienation. Except as provided in Section
4.08 or under section 401(a)(13) of the Code, the interest of any Plan
participant or beneficiary in the Trust Fund shall not be subject to
the claims of such person's creditors and may not be assigned, sold,
transferred, alienated or encumbered. Any attempt to do so shall be
void; and the Trustee shall disregard any attempt. Trust assets shall
not in any manner be liable for or subject to debts, contracts,
liabilities, engagement or torts of any Plan participant or
beneficiary, and benefits shall not be considered an asset of any such
a person in the event of the person's insolvency or bankruptcy.
4.08 Payment on Court Order. The Trustee is authorized to make
any payments directed by court order in any action in which the Trustee
is a party or pursuant to a "qualified domestic relations order" under
section 414(p) of the Code; provlded that the Trustee shall not make
such payment if the Trustee is indemnified and held harmless by the
Employer in a manner satisfactory to the Trustee against all
consequences of such failure to pay. The Trustee is not obligated to
defend actions in which the Trustee is named but shall notify the
Employer or Named Administrative Fiduciary of any such action and may
tender defense of the action to the Employer, the Named Administrative
Fiduciary or the participant or beneficiary whose interest is affected.
The Trustee may in its discretion defend any action in which the
Trustee is named and any expenses, including reasonable attorneys fees,
incurred by the Trustee in that connection shall be paid or reimbursed
in accordance with Section 4.04 hereof.
ARTICLE V
INVESTMENTS
5.01 Investment Management. The Named Investment Fiduciary shall
manage the investment of the Trust Fund except insofar as (a) a person
(an "Investment Manager") who meets the requirements of section 3(38)
of the Employee Retirement Income Security Act of 1974, as amended from
time to time ("ERISA"), has authority to manage Trust assets as
referred to in Section 5.02 hereof or (b) the Plan provides for
participant or beneficiary direction of the investment of assets
allocable under the Plan to the accounts of such participants and
beneficiaries and the Trustee notifies the Employer that such
directions will be acceptable. In the latter situation, a list of the
participants and beneficiaries and such information concerning them as
the Trustee may specify shall be provided by the Employer or the Named
Administrative Fiduciary to the Trustee and/or such person(s) as are
necessary for the implementation of the directions in accordance with
the procedure acceptable to the Trustee. Except as required by ERISA,
the Trustee shall invest the Trust Fund as directed by the Named
Investment Fiduciary, an Investment Manager or a Plan participant or
beneficiary, as the case may be, and the Trustee shall have no
discretionary control over, nor any other discretion regarding, the
investment or reinvestment of any asset of the Trust. The Trustee may
limit the categories of assets in which the Trust Fund may be invested.
It is understood that the Trustee may, from time to time, have on
hand funds which are received as contributions or transfers to the
Trust which are awaiting investment or funds from the sale of Trust
assets which are awaiting reinvestment. Absent receipt by the Trustee
of a direction from the proper person for the investment or
reinvestment of such funds or otherwise prior to the application of
funds in implementation of such a direction, the Trustee shall in
accordance with the Trustee's normal procedures in this regard cause
such funds to be invested in shares of the money market fund acceptable
to the Trustee as the Employer or Named Investment Fiduciary may in
writing to the Trustee specify for this purpose from time to time. Any
such fund may be sponsored, managed or distributed by an affiliate of
the Trustee. The Employer or the Named Investment Fiduciary, as the
case may be, hereby acknowledges that prior to any such specification
it has read or will have read the then current prospectus for the
specified fund.
5.02 Investment Managers. If so allowed pursuant to the Plan, the
Employer or the Named Investment Fiduciary may appoint one or more
Investment Managers who may be an affiliate of the Trustee, to direct
the Trustee in the investment of all or a specified portion of the
assets of the Trust. Any such Investment Manager shall be directed by
the Employer or the Named Investment Fiduciary, as the case may be, to
act in accordance with the procedures referred to in Section 5.04. The
Named Investment Fiduciary shall notify the Trustee in writing before
the effectiveness of the appointment or removal of any Investment
Manager.
If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon
written instructions from the Employer or the Named Investment
Fiduciary, establish separate funds for control by each such Investment
Manager. The funds shall consist of those Trust assets designated by
the Employer or the Named Investment Fiduciary.
5.03 Direction of Voting and Other Rights. The voting and other
rights in securities or other assets held in the Trust shall be
exercised by the Trustee as directed by the Named Investment Fiduciary
or other person who at the time has the right as referred to in Section
5.01 hereof to direct the investment or reinvestment of the security or
other asset involved, provided that notwithstanding any provision of
the Plan to the contrary, (a) except as provided in clause (b) of this
Section, such voting and other rights in any such security or other
asset selected by the Employer or the Named Investment Fiduciary shall
be exercised by the Named Investment Fiduciary and (b) such voting and
other rights in any "employer security" with respect to the Plan within
the meaning of Section 407(d)(1) of ERISA ("Employer Securities") which
is held in an account under the Plan over which a Plan participant or
beneficiary has control as to specific assets to be held therein or
which is held in an account which consists solely or primarily of
Employer Securities shall be exercised by the participants or
beneficiaries having interests in that account. Notwithstanding any
provision hereof or of the Plan to the contrary, (i) in the event a
Plan participant or beneficiary or an Investment Manager with the right
to direct a voting or other decision with respect to any security or
other asset held in the Trust does not communicate any decision on the
matter to the Trustee or the Trustee's designee by the time prescribed
by the Trustee or the Trustee's designee for that purpose or if the
Trustee notifies the Named Investment Fiduciary either that it does not
have precise information as to the secunties or other assets involved
allocated on the applicable record date to the accounts of all
participants and beneficiaries or that time constraints make it
unlikely that participant, beneficiary or Investment Manager direction,
as the case may be, can be received on a timely basis, the decision
shall be the responsibility of the Named Investment Fiduciary and shall
be communicated to the Trustee on a timely basis, and (ii) in the event
the Named Investment Fiduciary with any right under the Plan or
hereunder to direct a voting or other decision with respect to any
security or other asset held in the Trust, including any such right
under clause (a) or clause (i) of this Section, does not communicate
any decision on the matter to the Trustee or the Trustee's designee by
the time prescribed by the Trustee for that purpose, the Trustee may,
at the cost of the Employer, obtain advice from a bank, insurance
company, investment adviser or other investment professional
(including any affiliate of the Trustee) or retain an Investment
Manager with full discretion to make the decision. Except as required
by ERISA, the Trustee shall (a) follow all directions above-referred to
in this Section and (b) shall have no duty to exercise voting or other
rights relating to any such security or other asset.
5.04 Investment Directions. Directions for the investment or
reinvestment of Trust assets or of a type referred to in Section 5.03
from the Employer, the Named Investment Fiduciary, an Investment
Manager or a Plan participant or beneficiary, as the case may be,
shall, in a manner and in accordance with procedures acceptable to the
Trustee, be communicated to and implemented by, as the case may be, the
Trustee the Trustee's designee or, with the Trustee's consent, broker/
dealer designated for the purpose by the Employer or the Named
Investment Fiduciary. Communication of any such direction to such a
designee or broker/dealer shall conclusively be deemed an authorization
to the designee or broker/dealer to implement the direction even though
coming from a person other than the Trustee. The Trustee shall have no
liability for its or any other person's following such directions or
failing to act in the absence of any such directions. The Trustee shall
have no liability for the acts or omissions of any person directing the
investment or reinvestment of Trust Fund assets or making or failing to
make any direction referred to in Section 5.03. Neither shall the
Trustee have any duty or obligation to review any such investment or
other direction, act or omission or, except upon receipt of a proper
direction, to invest or otherwise manage any asset of the Trust which
is subject to the control of any such person or to exercise any voting
or other right referred to in Section 5.03.
5.05 Communication of Proxy and Other Materials. The Employer or
Named Administrative Fiduciary shall establish a procedure acceptable
to the Trustee for the timely dissemination to each person entitled to
direct the Trustee or its designee as to a voting or other decision
called for thereby or referred to therein of all proxy and other
materials bearing on the decision. In the case of Employer Securities,
at such time as proxy or other materials bearing thereon are
disseminated generally to owners of Employer Securities in accordance
with applicable law, the Employer shall cause a copy of such proxy or
other materials to be delivered directly to the Trustee and,
thereafter, shall promptly deliver to the Trustee such number of
additional copies of the proxy or other materials as the Trustee may
request.
5.06 Common and Collective Trust Funds. Any person authorized to
direct the investment of Trust assets may, if the Trustee and the Named
Investment Fiduciary so permit, direct the Trustee to invest such
assets in a common or collective trust maintained by the Trustee for
the investment of assets of qualified trusts under section 401(a) of
the Code, individual retirement accounts under section 408(a) of the
Code and plans or govemmental units described in section 818(a)(6) of
the Code. The documents governing any such common or collective trust
fund maintained by the Trustee, and in which Trust assets have been
invested, are hereby incorporated into this Trust Agreement by
reference.
ARTICLE VI
RESPONSIBILITIES AND INDEMNITY
6.01 Relationship of Fiduciaries. Each fiduciary of the Plan and
this Trust shall be solely responsible for its own acts or omissions.
The Trustee shall have no duty to question any other Plan fiduciary's
performance of fiduciary duties allocated to such other fiduciary
pursuant to the Plan. The Trustee shall not be responsible for the
breach of responsibility by any other Plan fiduciary except as provided
for in ERISA.
6.02 Benefit of Participants. Each fiduciary shall, within the
meaning of the Code and ERISA, discharge its duties with respect to the
Trust solely in the interest of participants in the Plan and their
beneficiaries and for the exclusive purpose of providing benefits to
such participants and beneficiaries and defraying reasonable expenses
of administering the Plan.
6.03 Status of Trustee. The Trustee acknowledges its status as a
"fiduciary" of the Plan within the meaning of ERISA.
6.04 Location of Indicia of Ownership. Except as pemmitted by
ERISA, the Trustee shall not maintain the indicia of ownership of any
assets of the Trust outside the jurisdiction of the district courts of
the United States.
6.05 Trustee's Reliance. The Trustee shall have no duty to
inquire whether directions by the Employer, the Named Administrative
Fiduciary, the Named Investment Fiduciary or any other person conform
to the Plan, and the Trustee shall be fully protected in relying on any
such direction communicated in accordance with procedures acceptable to
the Trustee from any person who the Trustee reasonably believes is a
proper person to give the direction. The Trustee shall have no
liability to any participant, any beneficiary or any other person for
payments made, any failure to make payments, or any discontinuance of
payments, on direction of the Named Administrative Fiduciary, the Named
Investment Fiduciary or any designee of either of them or for any
failure to make payments in the absence of directions from the Named
Administrative Fiduciary or any person responsible for or purporting
to be responsible for directing the investment of Trust assets. The
Trustee shall have no obligation to request proper directions from any
person. The Trustee may request instructions from the Named
Administrative Fiduciary or the Named Investment Fiduciary and shall
have no duty to act or liability for failure to act if such
instructions are not forthcoming. The Trustee shall have no
responsibility to determine whether the Trust Fund is sufficient to
meet the liabilities under the Plan, and shall not be liable for
payments or Plan liabilities in excess of the Trust Fund.
6.06 Indemnification. The Employer hereby indemnifies the Trustee
against, and shall hold the Trustee harmless from, any and all loss,
claims, liability, and expense, including reasonable attorneys fees,
imposed upon the Trustee or incurred by the Trustee as a result of any
acts taken, or any failure to act, in accordance with the directions
from the Named Administrative Fiduciary, Named Investment Fiduciary,
Investment Manager or any other person specified in Article IV or V
hereof, or any designee of any such person, or by reason of the
Trustee's good faith execution of its duties with respect to the Trust,
including, but not limited to. its holding of assets of the Trust as
provided for in Section 3.02, the Employer's obligations in the
foregoing regard to be satisfied promptly on request by the Trustee,
provided that in the event that the loss, claim, liability or expense
involved is determined by a no longer appealable final judgment entered
in a lawsuit or proceeding to have resulted from the gross negligence
or willful misconduct of the Trustee, the Trustee shall promptly
thereafter return to the Employer any amount previously received by the
Trustee under this Section with respect to such loss, claim, liability
or expense.
6.07 Protection of Designees. To the extent that any designee of
the Trustee is performing a function of the Trustee under this Trust
Agreement, the designee shall have the benefit of all of the applicable
limitations on the scope of the Trustee's duties and liabilities, all
applicable rights of indemnification granted hereunder to the Trustee
and all other applicable protections of any nature afforded to the
Trustee.
ARTICLE VII
POWERS OF TRUSTEE
7.01 Nondiscretionary Investment Powers. At the direction of the
person authorized to direct such action as referred to in Article V
hereof, but limited to those assets or categories of assets acceptable
to the Trustee as referred to in Section 5.01, the Trustee, or the
Trustee's designee or a broker/dealer as referred to in Section 5.04,
is authorized and empowered:
(a) To invest and reinvest the Trust Fund, together with the
income therefrom, in common stock, preferred stock, convertible
preferred stock, bonds, debentures, convertible debentures and bonds,
mortgages, notes, commercial paper and other evidences of indebtedness
(including those issued by the Trustee), shares of mutual funds (which
funds may be sponsored, managed or offered by an affiliate of the
Trustee), guaranteed investment contracts, bank investment contracts,
other securities, policies of life insurance, annuity contracts,
options, options to buy or sell securities or other assets, and all
other property of any type (personal, real or mixed, and tangible or
intangible);
(b) To deposit or invest all or any part of the assets of the
Trust in savings accounts or certificates of deposit or other deposits
in a bank or savings and loan association or other depository
institution, including the Trustee or any of its affiliates, provided
with respect to such deposits with the Trustee or an affiliate the
deposits bear a reasonable interest rate:
(c) To hold, manage, improve, repair and control all property,
real or personal, forming part of the Trust Fund; to sell, convey,
transfer, exchange, partition, lease for any term, even extending
beyond the duration of this Trust, and otherwise dispose of the same
from time to time:
(d) To have, respecting securities, all the rights, powers
and pnvileges of an owner, including the power to give proxies, pay
assessments and other sums deemed by the Trustee necessary for the
protection of the Trust Fund; to vote any corporate stock either in
person or by proxy, with or without power of substitution for any
purpose; to participate in voting trusts, pooling agreements,
foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with
or transfer title to any protective or other committee; to exercise or
sell stock subscriptions or conversion rights; and, regardless of any
limitation elsewhere in this instrument relative to investments by the
Trustee, to accept and retain as an investment any securities or other
property received through the exercise of any of the foregoing powers;
(e) Subject to Section 5.01 hereof, to hold in cash, without
liability for interest, such portion of the Trust Fund which it is
directed to so hold pending investments, or payment of expenses, or the
distribution of benefits;
(f) To take such actions as may be necessary or desirable to
protect the Trust from loss due to the default on mortgages held in the
Trust including the appointment of agents or trustees in such other
jurisdictions as may seem desirable, to transfer property to such
agents or trustees, to grant to such agents such powers as are
necessary or desirable to protect the Trust Fund, to direct such agent
or trustee, or to delegate such power to direct, and to remove such
agent or trustee;
(g) To settle, compromise or abandon all claims and demands in
favor of or against the Trust Fund;
(h) To invest in any common or collective trust fund of the type
referred to in Section 5.06 hereof maintained by the Trustee;
(i) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally under
the laws of the state in which the Trustee is incorporated as set forth
above, so that the powers conferred upon the Trustee herein shall not
be in limitation of any authority conferred by law, but shall be in
addition thereto;
(j) To borrow money from any source and to execute promissory
notes, mortgages or other obligations and to pledge or mortgage any
trust assets as security, subject to applicable requirements of the
Code and ERISA; and
(k) To maintain accounts at, execute transactions through, and
lend on an adequately secured basis stocks, bonds or other securities
to, any brokerage or other firm, including any firm which is an
affiliate of the Trustee.
7.02 Additional Powers of Trustee. To the extent necessary or
which it deems appropriate to implement its powers under Section 7.01
or otherwise to fulfill any of its duties and responsibilities as
trustee of the Trust Fund, the Trustee shall have the following
additional powers and authority:
(a) to register securities. or any other property, in its name or
in the name of any nominee, including the name of any affiliate or the
nominee name designated by any affiliate, with or without indication of
the capacity in which property shall be held, or to hold securities in
bearer form and to deposit any securities or other property in a
depository or clearing corporation;
(b) to designate and engage the services of, and to delegate
powers and responsibilities to, such agents, representatives, advisers,
counsel and accountants as the Trustee considers necessary or
appropriate, any of whom may be an affiliate of the Trustee or a person
who renders services to such an affiliate, and, as a part of its
expenses under this Trust Agreement, to pay their reasonable expenses
and compensation;
(c) to make, execute and deliver, as Trustee, any and all deeds,
leases, mortgages, conveyances, waivers, releases or other instruments
in writing necessary or appropriate for the accomplishment of any of
the powers listed in this Trust Agreement; and
(d) generally to do all other acts which the Trustee deems
necessary or appropnate for the protection of the Trust Fund.
ARTICLE VIII
RECORDS, ACCOUNTINGS AND VALUATIONS
8.01 Records. The Trustee shall maintain or cause to be
maintained accurate records and accounts of all Trust transactions and
assets. The records and accounts shall be available at reasonable times
during normal business hours for inspection or audit by the Named
Administrative Fiduciary and the Named Investment Fiduciary or any
person designated for the purpose by either of them.
8.02 Accountings. Within 90 days following the close of each
fiscal year of the Plan or the effective date of the removal or
resignation of the Trustee, the Trustee shall file with the Named
Administrative Fiduciary a written accounting setting forth all
transactions since the end of the period covered by the last previous
accounting. The accounting shall include a listing of the assets of the
Trust showing the value of such assets at the close of the period
covered by the accounting. On direction of the Named Administrative
Fiduciary, and if previously agreed to by the Trustee, the Trustee
shall submit to the Named Administrative Fiduciary interim valuations,
reports or other information pertaining to the Trust.
The Named Administrative Fiduciary may approve the accounting by
written approval delivered to the Trustee or by failure to deliver
written objections to the Trustee within 60 days after receipt of the
accounting. Any such approval shall be binding on the Employer, the
Named Administrative Fiduciary, the Named Investment Fiduciary and,
to the extent permitted by ERISA, all other persons.
8.03 Valuation. The assets of the Trust shall be valued as of
each valuation date under the Plan at fair market value as determined
by the Trustee based upon such sources of information as it may deem
reliable, including, but not limited to, stock market quotations,
statistical evaluation services, newspapers of general circulation,
financial publications, advice from investment counselors or brokerage
firms, or any combination of sources. The reasonable costs incurred in
establishing values of the Trust Fund shall be a charge against the
Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon
information from independent sources, it may rely upon information from
the Employer, Named Administrative Fiduciary, Named Investment
Fiduciary, appraisers, or other sources, and shall not incur any
liability for inaccurate valuation based in good faith upon such
information.
8.04 Loans. In the event that participant loans are available
under the Plan, the Trustee shall reflect one aggregate balance for
participant loans under the Plan and shall reflect changes thereto only
as directed by the Employer or Named Administrative Fiduciary. The
Trustee has no responsibility with respect to maintenance of promissory
notes or monitoring of loan amortization schedules.
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.01 Resignation. The Trustee may resign at any time upon at
least 30 days' written notice to the Employer.
9.02 Removal. The Employer may remove the Trustee upon at least
30 days' written notice to the Trustee.
9.03 Appointment of a Successor. Upon resignation or removal of
the Trustee, the Employer shall appoint a successor trustee. Upon
failure of the Employer to appoint, or the failure of the effectiveness
of the appointment by the Employer of, a successor trustee by the
effective date of the resignation or removal, the Trustee may apply to
any court of competent jurisdiction for the appointment of a successor.
Promptly after receipt by the Trustee of notice of the
effectiveness of the appointment of the successor trustee, the Trustee
shall deliver to the successor trustee such records as may be
reasonably requested to enable the successor trustee to properly
administer the Trust Fund and all property of the Trust after deducting
therefrom such amounts as the Trustee deems necessary to provide for
expenses, taxes, compensation or other amounts due to or by the Trustee
pursuant to Sections 4.04 or 5.03 hereof not paid by the Employer prior
to the delivery.
9.04 Settlement of Account. Upon resignation or removal of the
Trustee, the Trustee shall have the right to a settlement of its
account, which settlement shall be made, at the Trustee's option,
either by an agreement of settlement between the Trustee and the
Employer or by a judicial settlement in an action instituted by the
Trustee. The Employer shall bear the cost of any such judicial
settlement, including reasonable attorneys fees.
9.05 Expenses and Compensation. The Trustee shall not be
obligated to transfer Trust assets until the Trustee is provided
assurance by the Employer satisfactory to the Trustee that all fees and
expenses reasonably anticipated will be paid.
9.06 Termination of Responsibility and Liability. Upon settlement
of the account and transfer of the Trust Fund to the successor trustee,
all rights and privileges under this Trust Agreement shall vest in the
successor trustee and all responsibility and liability of the Trustee
with respect to the Trust and assets thereo shall, except as otherwise
required by ERISA, terminate subject only to the requirement that the
Trustee execute all necessary documents to transfer the Trust assets to
the successor trustee.
ARTICLE X
AMENDMENT AND TERMINATION
10.01 Amendment. The Employer reserves the right to amend this
Trust Agreement, provided that no amendment of this Trust Agreement or
the Plan shall be effective which would (a) cause any assets of the
Trust Fund to be used for, or diverted to, purposes other than the
exclusive benefit of Plan participants or their beneficiaries other
than an amendment permissible under the Code and ERISA, or (b) affect
the rights, duties, responsibilities, obligations or liabilities of
the Trustee without the Trustee's written consent. The Employer shall
amend this Trust Agreement as requested by the Trustee to reflect
changes in law which counsel for the Trustee advises the Trustee
require such changes. Amendments to the Trust Agreement or a certified
copy of the amendments shall be delivered to the Trustee promptly after
adoption and if practicable under the circumstances, any proposed
amendment under consideration by the Employer shall be communicated to
the Trustee to permit the Trustee to review and comment thereon in due
course before the Employer acts on the proposed amendment.
10.02 Termination. The Trust may be terminated by the Employer
upon at least 60 days' written notice to the Trustee. Upon such
termination, and subject to Section 11.01 hereof, the Trust Fund shall
be distributed as directed by the Named Administrative Fiduciary.
ARTICLE XI
MISCELLANEOUS
11.01 Exclusive Benefit Rule. Except as provided in Section
11.02, or as otherwise permitted as required by ERISA or the Code, no
asset of this Tnust shall be used for, or diverted to, purposes other
than the exclusive benefit of Plan participants or their beneficiaries
or for the reasonable expenses of administering the Plan and Trust
until all liabilities for benefits due Plan participants or their
beneficianes have been satisfied.
11.02 Refunds to Employer. The Trustee shall, upon the wntten
direction of the Named Administrative Fiduciary which shall include a
certification that such action is proper under the Plan, ERISA and the
Code specifying any relevant sections thereof, return to the Employer
any amount referred to in section 403(c)(2) of ERISA.
11.03 Authorized Action. Any action to be taken under this Trust
Agreement by an Employer or other person which is: (a) a corporation
shall be taken by the board of directors of the corporation or any
person or persons duly empowered by the board of directors to take the
action involved, (b) a partnership shall be taken by an authorized
general partner of the partnership, and (c) a sole propnetorship by
the sole proprietor.
11.04 Text of Plan. The Employer represents that prior to the
execution of this Trust Agreement by both parties it delivered to the
Trustee the text of the Plan as in effect as of the date of this Trust
Agreement. The Employer shall deliver to the Trustee promptly after
adoption thereof a certified copy of each other amendment of the Plan.
11.05 Conflict with Plan. The rights, duties, responsibilities,
obligations and liabilities of the Trustee are as set forth in this
Trust Agreement, and no provision of the Plan or any other document
shall be deemed to affect such rights, duties, responsibilities,
obligations and liabilities. If there is a conflict between provisions
of the Plan and this Trust Agreement with respect to any subject
involving the Trustee, including but not limited to the
responsibility, authority or powers of the Trustee, the provisions of
this Trust Agreement shall be controlling.
11.06 Failure to Maintain Qualification. If the Trust fails to
qualify as a qualified trust under section 401(a) of the Code, or loses
its status as such a qualified trust, the Employer shall immediately so
notify the Trustee, and the Trustee shall, without further notice or
direction, remove the Trust assets from any common or collective trust
fund maintained by the Trustee for investments by qualified trusts.
11.07 Governing Law and Construction. This Trust Agreement and
the Trust shall be construed, administered and governed under ERISA and
other pertinent federal law, and to the extent that federal law is
inapplicable, under the laws of the state in which the Trustee is
incorporated as set forth above. If any provision of this Trust
Agreement is susceptible to more than one interpretation, the
interpretation to be given is that which is consistent with the Trust
being a qualified trust under section 401(a) of the Code. If any
provision of this Trust Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions
shall continue to be fully effective to the extent possible under the
circumstances.
11.08 Successors and Assigns. This Trust Agreement shall inure to
the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
11.09 Gender. As used in this Trust Agreement, the masculine
gender shall include the feminine and the neuter genders and the
singular shall include the plural and the plural the singular as the
context requires.
11.10 Headings. Headings and subheadings in this Trust Agreement
are for convenience of reference only and are not to be considered in
the construction of the provisions of the Trust Agreement.
11.11 Counterparts. This Trust Agreement may be executed in
several counterparts, each of which shall be deemed an onginal, and
these counterparts shall constitute one and the same instrument which
may be sufficiently evidenced by any one counterpart.
IN WITNESS WHEREOF, the Employer and the Trustee have executed
this Trust Agreement each by action of a duly authorized person.
MERRILL LYNCH TRUST COMPANY [Employer]
By /s/ CHRIS ROSEN By /s/ THOMAS M. KITCHEN
---------------- ---------------------
Name: /s/ Chris Rosen Name /s/ Thomas M. Kitchen
--------------- ---------------------
Title: Vice President Title Vice President & CFO
-------------- --------------------
WITNESSES TO TRUSTEE'S SIGNATURE WITNESSES TO EMPLOYER'S SIGNATURE
/s/ B.L. HICKS
--------------
/s/ JACKIE. H WALKER
--------------------
e: \wolf\document\ges-ta95.doc 6/21/95
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 Trust Agreement between Merrill Lynch
Trust Company of Florida, as the Trustee, and Avondale Industries,
Inc., as the Employer, as a free act and deed on behalf of Merrill
Lynch Trust Company of Florida for the purposes therein set forth.
BY /s/ THOMAS M. KITCHEN
---------------------
Print Name: Thomas M. Kitchen
-----------------
Title: Vice President & CF0
--------------------
SWORN TO AND SUBSCRIBED
BEFORE ME THIS 20th DAY
----
OF December, 1995.
--------
/s/ RUDOLPH R. RAMELLI
----------------------
NOTAY PUBLIC
RUDOLPH R. RAMELLI
NOTARY PUBLIC
ORLEANS PARISH
LOUISIANA
MY COMMISSION IS FOR LIFE
TAX\33476. 1