EXHIBIT 10.1
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
OF
GIANT INDUSTRIES, INC.
AND
AFFILIATED COMPANIES
Original Profit Sharing Plan Effective Date: August 15, 1969
ESOP Effective Date: July 1, 1987
As Amended by Amendments Nos. 1-8
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
OF GIANT INDUSTRIES, INC. AND AFFILIATED COMPANIES
INDEX AFTER EIGHTH AMENDMENT
INTRODUCTION
I. DESIGNATION OF PLAN AND DEFINITIONS
1.1 Accounts
1.2 Alternate Payee
1.3 Asset Account
1.4 Beneficiary or Beneficiaries
1.5 Board of Directors
1.6 Break in Service
1.7 Ciniza
1.8 Code
1.9 Committee
1.10 Compensation
1.11 Disability
1.12 Effective Date
1.13 Employee
1.14 Employer
1.15 Employer Real Property
1.16 Employer Stock
1.17 ERISA
1.18 Exempt Loan
1.19 Fiduciary
1.20 Fiscal Year
1.21 Former Participant
1.22 Giant
1.23 Giant Arizona
1.24 Highly Compensated
1.25 Hixon
1.26 Hour of Service
1.27 Ineligible Participant
1.28 Investment Manager
1.29 Participant
1.30 Plan
1.31 Qualifying Employer Real Property
1.32 Section 1042 Employer Stock
1.33 Section 1042 Employer Stock Account
1.34 Suspense Account
1.35 Temporary Stock Account
1.36 Trust or Trust Fund
1.37 Trustee
1.38 Union Employee
1.39 Unrestricted Employer Stock
1.40 Unrestricted Employer Stock Account
1.41 Valuation Date
1.42 Year of Service
1.43 Year of Service
II. PARTICIPATION
2.1 Eligibility Requirements
(a) General Eligibility Rule
(b) Eligibility Upon Re-employment
2.2 Employee Participation
2.3 Retirement
(a) Normal Retirement
(b) Late Retirement
III. CONTRIBUTIONS
3.1 Employer Contributions and Limitations
on Annual Additions
(a) Employer Contributions
(b) Overall Limitation on Contributions
(1) Basic Limitations
(2) Special Limitations
(3) Adjustment for Excessive
Annual Additions
(4) Participation in Multiple Plans
(5) Special Rule for Defined
Contribution Plan Fraction
(6) Definitions
3.2 Time of Payment of Contribution
3.3 Voluntary Contributions
IV. ALLOCATIONS TO ACCOUNTS
4.1 Creation of Accounts
(a) Creation of Accounts for New
Participants
(b) Creation of Accounts for Alternate
Payees
4.2 Account Statements
4.3 Forfeitures
(a) Forfeitures from Asset Accounts
(b) Forfeitures from Employer
Stock Accounts
(c) Order of Allocations
4.4 Allocation of Purchased Unrestricted
Employer Stock and Section 1042 Employer
Stock Released with Certain Dividends
(a) Unrestricted Employer Stock
Purchased with Plan Assets
(b) Section 1042 Employer Stock Released
with Certain Dividends
(c) Order of Allocations
4.5 Valuation of Accounts
(a) Asset Accounts
(b) Employer Stock Accounts
(c) Order of Allocations
4.6 Annual Employer Contribution Allocation
4.7 Allocations of Employer Stock
(a) Allocation of Stock Contributed
by the Employer
(b) Allocation of Section 1042
Employer Stock
(c) Allocation of Unrestricted Employer
Stock from Suspense Account and
Purchased Unrestricted Employer Stock
(d) Order of Allocations
4.8 Voting Rights in Employer Stock
4.9 Right to Tender Employer Stock
4.10 Coverage Fail-Safe
V. BENEFITS
5.1 Vesting of Interests
(a) Upon Death, Disability or Retirement
(b) Termination for Other Reasons
(c) Calculation of Years of Service
(1) General Rules for Crediting
Years of Service
(2) Special Rules for Crediting
Years of Service Upon
Reemployment
(A) Delay in Crediting Years
of Service
(B) Rule of Parity
(C) Effect on Portion of
Accounts Earned Prior to
Break in Service
(3) Break in Service Rules for Pre-
January 1, 1985 Plan Years
(d) Transition Rule
5.2 Form of Distribution
(a) Distribution in Cash or in Stock
(b) Lifetime Distributions
(1) General Rule
(2) Additional Lifetime Installments
Distributions
(c) Distributions Upon Death
5.3 Distributions in Stock
5.4 Distributions in Cash
5.5 Distributions in Cash and Stock
5.6 Time of Distribution
(a) General Rule
(b) Consents and Notices
(1) Accounts of $3,500 or Less
(2) Accounts in Excess of $3,500
(c) Liquidity Limitations
5.7 Dividends
Unrestricted Employer Stock Accounts
and Section 1042 Employer Stock
Accounts
(b) Dividends on Stock Allocated to
the Unallocated Stock Account
(c) Dividends on Stock Allocated to
the Suspense Account
(d) Treatment of Distributed Dividends
5.8 Put Option and Right of First
Refusal
(a) Put Option
(b) Right of First Refusal
5.9 Non-Vested Interests
(a) Forfeitures
(b) Repayment of Prior Distribution
(c) Termination of Employment with
No Distribution
5.10 Participant Loans
VI. [RESERVED]
VII. THE COMMITTEE
7.1 Members
7.2 Committee Action
7.3 Rights and Duties
7.4 Procedure for Establishing Funding
Policy - Transmittal of Information
7.5 Delegation of Investment Responsibility
7.6 Delegation of Non-Investment Fiduciary
Responsibility
7.7 Duty of Care
7.8 Compensation, Indemnity and Liability
VIII. THE TRUSTEE
8.1 Appointment of Trustee
8.2 Resignation and Removal
8.3 Successor Trustee
8.4 General Duties of Trustee
8.5 Accounts and Records
8.6 Compensation and Expenses
8.7 Employment of Agents
8.8 Third Party May Rely
8.9 Notice Must be in Writing and Received
8.10 Valuation
IX. POWERS OF THE TRUSTEE
9.1 Investment of Trust Fund
9.2 Exempt Loans
9.3 Permitted Investment Acts
9.4 Prohibited Investment Acts
9.5 Diversification
X. PORTABILITY AND ROLL-OVER
10.1 Portability
(a) Direct Rollovers
(b) Definitions
10.2 Receipt of Direct Rollovers
XI. AMENDMENT AND TERMINATION
11.1 Amendments
11.2 Discontinuance of Plan
11.3 Merger or Consolidation
11.4 Failure to Contribute
XII. MISCELLANEOUS
12.1 Contributions Not Recoverable
12.2 Limitations on Participants' Rights
12.3 Receipt and Release
12.4 Assignment and Alienation
12.5 Qualified Domestic Relations Orders
12.6 Governing Law
12.7 Headings, Etc., Not Part of Agreement
12.8 Successors and Assigns
12.9 Agent Designated for Service of Process
12.10 Benefits Payable to Incompetents
12.11 Pronouns
12.12 Reference to Laws
XIII. EARLY WITHDRAWAL OF EMPLOYER CONTRIBUTIONS
XIV. TOP HEAVY PROVISIONS
14.1 Application of Top Heavy Provisions
14.2 Vesting Requirements
14.3 Compensation Limitation
14.4 Minimum Allocation
14.5 Limitations on Contributions and
Benefits for Key Employees
14.6 Rules for Determining Top Heavy Status
14.7 Definitions
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
Effective as of July 1, 1987, Giant Industries, Inc., an
Arizona corporation, and Ciniza Pipe Line Inc., a New Mexico
corporation, amended and restated the Joint Profit Sharing Plan
and Trust Agreement of Giant Industries, Inc., Giant Western
Service Stations, Inc. and Ciniza Pipe Line Inc., as the Employee
Stock Ownership Plan and Trust Agreement of Giant Industries,
Inc. and Affiliated Companies (the "Plan"). Effective as of July
1, 1987, the Plan was adopted by Ciniza Production Company, a New
Mexico corporation, (hereinafter referred to as "Ciniza") and by
J.E.A. Company, Inc., an Arizona corporation.
Effective as of September 28, 1989, Ciniza Pipe Line Inc.
was merged into Giant Industries, Inc., an Arizona corporation.
Effective as of October 12, 1989, J.E.A. Company, Inc. was merged
into Giant Industries, Inc., and Giant Industries, Inc. changed
its name to Giant Industries Arizona, Inc. (hereinafter referred
to as "Giant Arizona").
On October 15, 1989, Giant Arizona entered into an
Agreement and Plan of Reorganization with Hixon Development
Company, a Texas corporation, (hereinafter referred to as
"Hixon") contemplating a merger whereby Giant Arizona and Hixon
would become wholly owned subsidiaries of Giant Industries, Inc.,
a Delaware corporation (hereinafter referred to as "Giant"). The
stock of Giant became publicly traded on December 15, 1989, and
the merger was consummated on December 21, 1989.
Effective as of December 21, 1989, the Plan was adopted by
Giant and by Hixon. Giant, Giant Arizona, Hixon and Ciniza are
hereinafter collectively referred to as the "Employer".
WHEREAS, the Employer deems it desirable to maintain the
Plan as an Employee Stock Ownership Plan in order to permit the
Plan to invest primarily in the common stock of Giant Industries,
Inc., a Delaware corporation and thereby provide eligible
employees with the benefit of ownership of the common stock of
Giant Industries, Inc.; and
WHEREAS, the Plan is designed to comply with Public Law
93-406, the Employee Retirement Income Act of 1974, as amended,
and is intended to meet the requirements of a qualified stock
ownership plan under Sections 401(a) and 4975(e)(7) of the
Internal Revenue Code of 1986 and any amendments thereto (the
Code) and thereby maintain tax exempt status under Section 501(a)
of the Code with contributions thereto being deductible under
Section 404 of the Code; and
WHEREAS, the Employer wishes to reward its Employees for
loyal and faithful service, to aid Employees in the accumulation
of funds for their later years, and to provide funds for their
Beneficiaries in the event of death or disability;
NOW THEREFORE, the terms and conditions of the Plan are as
follows:
ARTICLE I.
DESIGNATION OF PLAN AND DEFINITIONS
This Employee Stock Ownership Plan shall be known as the
"Employee Stock Ownership Plan and Trust Agreement of Giant
Industries, Inc. and Affiliated Companies." For purposes of Plan
investments and other transactions, the Plan may be referred to
as the "Giant ESOP." The following terms shall have the
following meanings unless a different meaning is plainly required
by the context. Whenever in these definitions a word or phrase
not previously defined is used, such word shall have the meaning
thereafter given to it in Article I unless otherwise specified.
1.1 "Accounts" shall mean the Asset Account, Unrestricted
Employee Stock Account, and Section 1042 Employer Stock Account,
if any, established for any Participant, Former Participant,
Alternate Payee or Beneficiary.
1.2 "Alternate Payee" means any spouse, former spouse,
child or other dependent of a Participant who is entitled to
receive all or a portion of a Participant's Account pursuant to a
domestic relations order which is determined to be a qualified
domestic relations order in accordance with Section 12.5. An
Alternate Payee shall not be a Beneficiary for purposes of this
Plan unless such Alternate Payee is named as a Beneficiary
pursuant to Section 1.4. The Alternate Payee shall have only the
rights specified under the Plan and shall not be deemed to have
the rights of a Participant, Former Participant or Beneficiary
unless expressly stated.
1.3 "Asset Account" shall mean the account used to
reflect an interest in assets of the Plan other than Employer
Stock.
1.4 "Beneficiary" or "Beneficiaries" shall mean the
person or persons last selected by a Participant, Former
Participant, or Alternate Payee on a form provided by the Commit-
tee and by the terms of the Plan to receive any amounts payable
under the Plan following the death of the Participant or
Alternate Payee. The designation by a Participant or Former
Participant of a Beneficiary other than his spouse shall not be
effective unless the spouse of the Participant or Former
Participant gives written consent to the designation. A
Participant, Former Participant, or Alternate Payee may change
the Beneficiary from time to time on a form provided by the
Administrative Committee, however, unless a Participant's or
Former Participant's spouse's initial consent to the designation
of a Beneficiary other than the spouse expressly acknowledges
that the spouse has a right to limit her consent to a specific
Beneficiary and unless such spouse expressly relinquishes the
right to approve any change in Beneficiary, the spouse must also
give written consent to a change in a Participant's or Former
Participant's selection of a Beneficiary other than the spouse.
Any spousal consent shall acknowledge the effect of the
Participant's or Former Participant's selection and shall be
witnessed by a Notary Public. The consent of the spouse shall
not be required to the selection of a Beneficiary by a
Participant or Former Participant upon proof satisfactory to the
Committee that the Participant or Former Participant is not
married, the spouse of the Participant or Former Participant
cannot be located, or the consent of the spouse cannot be
obtained under such circumstances as may be prescribed in
regulations issued by the U.S. Secretary of the Treasury or his
delegate. If no Beneficiary is designated, or in the event no
Beneficiary or contingent Beneficiary is surviving at the time of
the Participant's, Former Participant's or Alternate Payee's
death, a Participant's, Former Participant's or Alternate Payee's
Beneficiary shall be deemed to be his spouse, if living, or if
there is no spouse living, the Participant's, Former
Participant's or Alternate Payee's issue, by right of
representation, or if neither the Participant's, Former
Participant's or Alternate Payee's spouse nor any issue are
living, the Participant's, Former Participant's or Alternate
Payee's estate. If a Participant or Alternate Payee completes a
form designating more than one Beneficiary, his Accounts will be
divided equally among the Beneficiaries who survive him, unless
he directs otherwise in writing.
1.5 "Board of Directors" shall mean the Board of
Directors of Giant Industries, Inc., a Delaware corporation,
unless otherwise specifically indicated.
1.6 "Break in Service" shall mean an Eligibility
Computation Period, as defined in Section 1.41, or a Vesting
Computation Period, as defined in Section 1.42, during which an
Employee or a Participant fails to complete at least five hundred
(500) Hours of Service.
1.7 "Ciniza" shall mean Ciniza Production Company, a New
Mexico corporation.
1.8 "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
1.9 "Committee" shall mean the Committee appointed by
Giant Industries, Inc., a Delaware corporation, pursuant to
Article VII of this Plan.
1.10 "Compensation" with respect to any Participant for
any Fiscal Year beginning on or after January 1, 1989, shall mean
and include the total compensation within the meaning of Treasury
Regulation Section 1.415-2(d)(11)(i), paid by the Employer during
that portion of the Fiscal Year in which the Employee is a
Participant under the Plan; provided that for any Fiscal Year
beginning on or after January 1, 1987, Compensation of an
Employee shall be limited to one hundred and fifty thousand
dollars ($150,000) per Fiscal Year, and further provided that for
any Fiscal Year beginning on or after January 1, 1993, the term
Compensation shall include elective contributions that are not
includible in gross income under Code Sections 125, 402(e)(3),
402(h) and 403(b) which are made by the Employer on behalf of a
Participant during that portion of the Fiscal Year in which the
Employee is a Participant under the Plan.
In determining Compensation under the Plan for any Fiscal
Year beginning on or after January 1, 1989, a Participant who is
either a more than five percent owner of the Employer as defined
in Code Section 414(q)(3) or one of the top ten (10) Highly
Compensated Employees as defined in Code Section 414(q)(6)
(hereinafter referred as a "Super Highly Compensated
Participant"), a Participant who is a spouse of a Super Highly
Compensated Participant on any day of the Fiscal Year and/or a
Participant who has not attained age nineteen (19) before the
close of the Fiscal Year and who is a lineal descendent of a
Super Highly Compensated Participant, shall be treated as a
"Family Group". Notwithstanding any other provision of the Plan
to the contrary, the total Compensation of a Family Group cannot
exceed $200,000 for any Fiscal Year beginning on or after January
1, 1989 and before January 1, 1994, $150,000 for any Fiscal Year
beginning on or after January 1, 1994, or such greater amounts as
determined by the Secretary of the Treasury in accordance with
Code Section 401(a)(17) (hereinafter referred to as the "Family
Group Limitation") for Fiscal Years beginning on or after January
1, 1989. If the total Compensation of a Family Group after
applying a $150,000 per individual limitation to each Family
Group member and before applying of the Family Group Limitation
for the Fiscal Year to the Family Group, exceeds the Family Group
Limitation for the Fiscal Year, the Compensation of any
individual member of a Family Group shall be determined based
upon the ratio that each Family Group member's Compensation after
applying the $150,000 limitation but before applying the Family
Group Limitation for the Fiscal Year, bears to the Compensation
of all Family Group members after applying the $150,000
limitation but before applying the Family Group Limitation for
the Fiscal Year, multiplied by the Family Group Limitation for
the Plan Year.
1.11 "Disability" shall mean a physical or mental
condition resulting from bodily injury, disease, or mental
disorder which can be expected to result in death or to last at
least 12 months, which totally and presumably permanently
prevents a Participant from continuing any gainful occupation,
and which condition is determined to be a disability under the
federal Social Security Acts by the appropriate Disability
Determination Services Office of the Social Security
Administration.
1.12 "Effective Date" shall mean July 1, 1987 for the
amendment and restatement of the Plan as an employee stock
ownership plan and a stock bonus plan within the meaning of Code
Sections 401(a) and 4975(e)(7). The Plan was originally adopted
as a profit sharing plan effective as of August 15, 1969.
1.13 "Employee" shall mean any person who is employed by
the Employer other than any person who serves only as a director
or any person who is a Union Employee. For any Fiscal Year
beginning on or after January 1, 1984, the term Employee shall
include any Leased Employee. For purposes of this Section, the
term Leased Employee includes an individual (who is not otherwise
employed by the Employer) who, pursuant to a leasing agreement
between the Employer and any other person, has performed services
for the Employer (or for the Employer and any persons related to
the Employer within the meaning of Code Section 144(a)(3)) on a
substantially full-time basis for at least one year and who
performs services historically performed by employees in the
Employer's business field, provided that for Fiscal Years between
January 1, 1984 and December 31, 1986, the term Leased Employee
excludes any such individual who is covered by a plan described
in Code Section 414(n)(5) and for purposes of services performed
by such individuals after December 31, 1986, the term Leased
Employee excludes any such individual who is covered by a plan
described in Code Section 414(n)(5) only if Leased Employees
constitute less than twenty percent (20%) of the Employer's
non-highly compensated work force (as determined under Code
Section 414(n)(5)). If by the terms of this Section any Leased
Employee is included in the term "Employee", all contributions or
benefits provided for or on behalf of such Leased Employee by a
leasing organization which are attributable to services performed
for the Employer shall be treated as provided by the Employer and
shall offset any benefit otherwise provided under the terms of
this Plan.
1.14 "Employer," effective as of December 21, 1989, shall
mean Giant Industries, Inc., a Delaware corporation, Giant
Industries Arizona, Inc., an Arizona corporation, Hixon
Development Company, a Texas corporation, and Ciniza Production
Company, a New Mexico Corporation. The term "Employer" shall
also include any other corporation which becomes a member of a
controlled group of corporations (within the meaning of Section
1563(a) of the Code, determined without regard to Sections
1563(a)(4) and (e)(3)(c) of the Code) in which Giant is a
component member and each entity (whether or not incorporated)
which comes under common control with Giant (as defined in
Section 414(c) of the Code and regulations issued thereunder)
effective as of the date the corporation or entity becomes a
member of a controlled group in which Giant is a member or comes
under common control with Giant, including Giant Stop-N-Go of New
Mexico, Inc., a New Mexico corporation, unless the Board of
Directors or the corporation or entity which becomes a member of
such controlled group affirmatively elects to exclude such
corporation or entity from the definition of Employer. In
addition, for purposes of determining Hours of Service and Years
of Service, (i) all service completed by a prior employee of
Shell Oil Company and Shell Pipe Line Corporation who became an
Employee on or about April 1, 1982 in connection with the
acquisition of the Ciniza Refinery and Pipeline by Giant
Industries, Inc., shall be included as service with the Employer,
and (ii) all service completed by an Employee of Hixon prior to
December 21, 1989 who was employed by Hixon on December 20, 1989
shall be included as service with the Employer under this Plan.
1.15 "Employer Real Property" shall mean real property
(and related personal property) which is leased to an Employer or
to an affiliate of such Employer as defined under Section
407(d)(7) of ERISA. Employer Real Property shall be deemed to be
acquired by the Plan on the date on which the Plan acquires the
property or on the date on which a lease from the Plan to the
Employer (or affiliate) is entered into, whichever is later.
1.16 "Employer Stock" prior to December 21, 1989, shall
mean shares of common stock of Giant Industries Arizona, Inc., an
Arizona corporation, having a combination of voting power and
dividend rights equal to or in excess of that class of common
stock having the greatest voting power and that class of common
stock having the greatest dividend rights, and on or after
December 21, 1989 shall mean shares of common stock issued by
Giant Industries, Inc., a Delaware corporation. Any valuation of
Employer Stock prior to December 21, 1989, and any valuation in
the event shares of common stock of Giant Industries, Inc. cease
to be readily tradeable on an established securities market after
December 21, 1989, shall be performed by an independent appraiser
who meets the requirements of Code Section 410(a)(28)(c).
1.17 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.18 "Exempt Loan" shall mean an exempt loan within the
meaning of Code Section 4975(d)(3) and Treasury Regulations
S.S. 54.4975-7(b)(iii), the requirements of which are more fully
set forth in Section 9.2.
1.19 "Fiduciary" shall mean, in accordance with Section
3(21) of ERISA, any person who exercises any discretionary
authority or discretionary control respecting management of the
Plan or any authority or control respecting management or
disposition of Plan assets, who renders investment advice for a
fee or other compensation (direct or indirect) with respect to
Plan assets or who has any authority or responsibility to do so,
and any person who has any discretionary authority or
discretionary responsibility in the administration of the Plan.
The term Fiduciary shall be construed as including the term
"Named Fiduciary" as defined in Section 402(a)(2) of ERISA with
respect to those Fiduciaries who are identified in the Plan as
"Named Fiduciaries".
1.20 "Fiscal Year" shall mean the year beginning on
January 1 and ending on December 31, and such Fiscal Year shall
be the plan year for all purposes under ERISA and the Code.
1.21 "Former Participant" shall mean a Participant whose
employment with the Employer has terminated but who has vested
Accounts under the Plan which have not been paid in full and
which continue to participate in the increase or decrease in Plan
assets including, for any Former Participant on or after December
21, 1989, any increase or decrease in Employer Stock.
1.22 "Giant" means Giant Industries, Inc., a Delaware
corporation.
1.23 "Giant Arizona" means Giant Industries Arizona, Inc.,
an Arizona corporation.
1.24 "Highly Compensated Employee" means, effective for
any Fiscal Year beginning on or after January 1, 1987, any
Employee who is a highly compensated employee as defined in Code
Section 414(q) and the applicable Treasury regulations.
Generally, any Employee is considered a Highly Compensated
Employee if during the Determination Year or the Look-Back Year
such Employee:
(a) was a "5% owner" as defined in Code Section
416(i)(B)(i) (i.e. who owns (or is treated as
owning) more than five percent (5%) of the
outstanding stock of the Employer or stock
possessing more than five percent (5%) of the
total combined voting power of all stock of the
Employer or, in the case of an unincorporated
business, any person who owns more than five
percent (5%) of the capital or profits interest
in the Employer.) In determining percentage
ownership hereunder, employers that would
otherwise be aggregated under Code Sections
414(b), (c) and (m) shall be treated as
separate employers;
(b) received Section 415 Compensation from the
Employer in excess of $75,000;
(c) received Section 415 Compensation from the
Employer in excess of $50,000 and was in the
"Top-Paid Group." An Employee is in the
Top-Paid Group if such Employee is in the group
consisting of the top twenty percent (20%) of
Employees when ranked on the basis of Section
415 Compensation (as adjusted below); or
(d) was an officer of the Employer whose Section
415 Compensation (as adjusted below) is greater
than $45,000 (or such other amount which is
equal to fifty percent (50%) of the amount
specified in Code Section 415(b)(1)(A) for the
calendar year in which the Determination Year
or the Look-Back Year begins.
For purposes of this Section, the Determination Year
shall be the Plan Year in which testing is being performed. The
Employer has elected to treat the calendar year ending with or
within the Determination Year as the Look-Back Year as provided
for in Treasury regulations. Solely for purposes of identifying
Highly Compensated Employees under the terms of this Section and
Code Section 414(q), Section 415 Compensation means Section 415
Compensation as defined in Section 3.1(b) plus amounts described
under Code Sections 125, 402(e)(3) (formerly 402(a)(8)) or
402(h)(1)(B) that are otherwise excluded from Section 415
Compensation; and the dollar threshold amount specified in
subsections (b) and (c) of this Section shall be adjusted at such
time and in such manner as is provided in the Code.
The term "Highly Compensated Employee" also includes
a former Employee who separated from service (or has a deemed
separation from service as determined under Treasury regulations)
prior to the Determination Year, performs no services for the
Employer during the Determination Year, and was a Highly
Compensated Employee either for the Look-Back Year or any
Determination Year ending on or after his 55th birthday.
The Committee shall make the determination of who is
a Highly Compensated Employee, including the determination of the
number and identity of the Top-Paid Group, the number of officers
includible in subsection (d), the number and identity of former
Employees considered to be Highly Compensated Employees, the
identity of "Excluded Employees," and Section 415 Compensation,
in a manner consistent with Code Section 414(q).
For purposes of this Section, an "Excluded Employee"
is defined under Code Section 414(q)(8) and generally includes
(i) Employees who have not completed six (6) months of service;
(ii) Employees who normally work less than 17 1/2 hours per week;
(iii) Employees who normally work during not more than six (6)
months during any Determination Year; (iv) Employees who have not
attained age 21; and (v) employees who are included in a unit of
employees covered by a collective bargaining agreement. The
number of officers taken into account under subsection (d) will
not exceed the greater of 3 or 10% of the total number of
Employees (after subtracting Excluded Employees) but will not
exceed 50 officers. If no Employee satisfies the dollar
threshold amount in subsection (d) for the relevant Fiscal Year,
the Committee will treat the highest paid officer as satisfying
subsection (d) for that Fiscal Year.
For purposes of applying any nondiscrimination test
in a manner consistent with the applicable Treasury regulations,
the Committee will treat as a single Highly Compensated Employee
any Highly Compensated Employee, who is a 5% owner or is one of
the 10 Highly Compensated Employees with the greatest Section 415
Compensation for the Determination Year, and his spouse, lineal
ascendants or descendants or spouses of lineal ascendants or
descendants even if such family members are Highly Compensated
Employees in their own right.
1.25 "Hixon" shall mean Hixon Development Company, a Texas
corporation.
1.26 "Hour of Service" shall mean each hour for which the
Employee is directly or indirectly paid or entitled to payment by
the Employer for performance of duties for the Employer including
each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer,
and including each hour for which payment is made or payable to
the Employee for periods during which the Employee is on an
Employer approved leave of absence for vacation, jury, sick, or
disability leave, or military service. Hours of Service shall
also include hours during such additional periods of service as
may be required pursuant to Department of Labor regulations.
Hours for nonperformance of duties shall be credited in
accordance with DOL Regulations Section 2530.200b-2(b). Hours
shall be credited to the applicable computation period in
accordance with DOL Regulations Section 2530.200b-2(c).
1.27 "Ineligible Participant" shall mean, for purposes of
allocating Section 1042 Employer Stock, (a) a Participant who is
a more than twenty-five percent (25%) owner (or a Participant who
is treated under Code Section 409(n) as a more than twenty-five
percent (25%) owner) of any class of outstanding stock of Giant
Industries, Inc. (or prior to December 21, 1989, of Giant
Industries Arizona, Inc.) or of the total value of any class of
outstanding stock of Giant Industries, Inc. (or prior to December
21, 1989, of Giant Industries Arizona, Inc.) whether he has
elected nonrecognition of gain under Section 1042 of the Code or
not, or (b) a Participant (or a Participant who is related within
the meaning of Code Section 409(n) to a Participant) who has
elected nonrecognition of gain under Section 1042 of the Code in
connection with the sale of Employer Stock to the Plan. A
Participant who is described in Section 1.27(b) but not in
Section 1.27(a) shall be an "Ineligible Participant" only for the
period beginning on the date on which the Employee Stock for
which he elected Code Section 1042 treatment was sold to the Plan
and ending on the later of (1) the date which is ten (10) years
after the date of such sale or (2) the date on which any
allocation under the Plan is made which is attributable to the
final payment of any indebtedness incurred by the Plan in
connection with such sale.
1.28 "Investment Manager" shall mean a fiduciary (other
than a Trustee or Named Fiduciary) designated by the Committee
under this Plan to whom has been delegated the power to manage,
acquire or dispose of all or any of the assets of the Plan, who
is registered as an investment advisor under the Investment
Advisers Act of 1940, is a bank as defined under the Investment
Advisers Act of 1940 or is an insurance company qualified to
manage, acquire, or dispose of assets under the laws of more than
one State, and who has acknowledged in writing that he is a
fiduciary with respect to the management, acquisition and control
of Plan assets.
1.29 "Participant" shall mean any Employee of the Employer
who becomes eligible for participation in accordance with the
provisions of this Plan.
1.30 "Plan" shall mean the qualified stock bonus plan and
trust set forth in this Agreement, which is intended to be a
qualified employee stock ownership plan and trust.
1.31 "Qualifying Employer Real Property" shall mean
Employer Real Property:
(a) if a substantial number of the parcels are
dispersed geographically;
(b) if each parcel of real property and the
improvements thereon are suitable (or adaptable without excessive
cost) for more than one use;
(c) even if all such real property is leased to one
lessee (which may be an employer, or an affiliate of an
employer); and
(d) if the acquisition and retention of such
property comply with the provisions of this part of ERISA (other
than section 404(a)(1)(B) to the extent it requires
diversification, and sections 404(a)(1)(C), 406, and subsection
(a) of this section).
1.32 "Section 1042 Employer Stock" shall mean Employer
Stock acquired by the Plan prior to December 21, 1989 in a
transaction which qualified for nonrecognition of gain under Code
Section 1042.
1.33 "Section 1042 Employer Stock Account" shall mean the
account used to reflect an interest in Section 1042 Employer
Stock.
1.34 "Suspense Account" shall mean the account used to
hold Employer Stock purchased pursuant to Article IX of the Plan
with the proceeds of an Exempt Loan, prior to allocation of such
stock to the Accounts of Participants under the Plan.
1.35 "Temporary Stock Account" shall mean the interim
account used to hold Employer Stock purchased by the Trustee,
other than Employer Stock purchased pursuant to Article IX of the
Plan with the proceeds of an Exempt Loan, and to hold Employer
Stock contributed to the Plan by the Employer, prior to the
allocation of such stock to the Accounts of Participants each
Fiscal Year in accordance with Sections 4.4(a), 4.7(a) and
4.7(c).
1.36 "Trust" or "Trust Fund" shall mean the trust which is
established herein to hold and invest contributions made under
this Plan.
1.37 "Trustee" shall mean the one or more individuals,
banks, trust companies or other financial institutions, which are
appointed in accordance with Article VIII to hold and manage the
assets of the Trust.
1.38 "Union Employee" shall mean any person employed by
Employer who is a member of a unit of employees covered by any
collective bargaining agreement between employee representatives
and the Employer, wherein retirement benefits were the subject of
good faith bargaining between the parties thereto, unless said
agreement provides for participation in this Plan.
1.39 "Unrestricted Employer Stock" shall mean Employer
Stock which was not acquired in a transaction qualifying for
nonrecognition of gain under Section 1042 of the Code.
1.40 "Unrestricted Employer Stock Account" shall mean the
account used to reflect an interest in Unrestricted Employer
Stock.
1.41 "Valuation Date" shall mean the last day of each
Fiscal Year unless otherwise specifically indicated.
1.42 "Year of Service" shall mean, for purposes of
eligibility under the Plan, the twelve (12) consecutive month
period commencing on
(a) the first day the Employee completes an Hour of
Service, or
(b) if the Employee incurs a Break in Service, the
first day the Employee completes an Hour of Service after such
Break in Service, and, each succeeding twelve (12) consecutive
month period beginning on anniversaries of that date during which
the Employee completes at least one thousand (1,000) Hours of
Service. The twelve (12) consecutive month period determined
under this Section for the calculation of a Year of Service for
eligibility shall be the Eligibility Computation Period.
1.43 "Year of Service" shall mean, for purposes of vesting
under the Plan, the Fiscal Year
(a) during which a Participant first completed an
Hour of Service either as an Employee or as a Union Employee; or
(b) if an Employee or a Union Employee incurs a
Break in Service, the Fiscal Year during which the Employee or
Union Employee completes an Hour of Service after such Break in
Service, and each succeeding Fiscal Year during which an Employee
or a Union Employee completes at least one thousand (1,000) Hours
of Service; provided, however, that any Employee or a Union
Employee hired on or before June 30, 1993 who becomes a
Participant under the terms of Section 2.1 prior to the Seventh
Amendment shall be credited in all events with one Year of
Service for the Fiscal Year in which such Employee or Union
Employee becomes a Participant. The Fiscal Year shall be the
Vesting Computation Period.
ARTICLE II.
PARTICIPATION
2.1 Eligibility Requirements.
(a) General Eligibility Rule.
(1) Each Employee hired on or after July 1, 1993,
shall become a Participant on his or her Participation Date.
Participation Date for purposes of this Section 2.1(a)(1) is
defined as the January 1 or July 1 coincident with or next
following the date on which the Employee shall have completed one
(1) Year of Service.
(2) The Participation Date of any Employee hired
prior to July 1, 1993 shall be determined in accordance with the
terms of Section 2.1 prior to the Seventh Amendment to the Plan;
provided that the Participation Date of any such Employee who
terminated his employment prior to July 1, 1993 and returns to
the employ of the Employer on or after July 1, 1993 shall be
governed by the terms of Section 2.1 after the Seventh Amendment.
(b) Eligibility Upon Re-employment.
(1) Any former Employee who had not met the
eligibility requirements of Section 2.1(a) and who is rehired on
or after July 1, 1993 shall be required to satisfy the provisions
of Section 2.1(a) upon re-employment with the Employer. Any
former Employee who terminates his employment and who is rehired
on or after July 1, 1993 who had no vested interest under the
Plan at the time he terminated his employment, shall be eligible
to participate in the Plan as of his re-employment date, unless
he has incurred six (6) or more consecutive one (1) year Breaks
in Service during his absence from employment, in which case he
shall be considered a new Employee for purposes of determining
his eligibility to participate under Section 2.1(a)(1). Any
former Employee who terminates his employment and who is rehired
on or after July 1, 1993 who had a vested interest under the Plan
at the time he terminated employment, shall be eligible to
participate in the Plan as of his re-employment date.
(2) The eligibility of any former Employee who is
rehired before July 1, 1993 shall be determined in accordance
with the terms of Section 2.1(b) prior to the Seventh Amendment
to the Plan.
2.2 Employee Participation.
Participation of a Participant shall commence as of
the date specified in Section 2.1(a), shall continue during the
Participant's subsequent employment with the Employer, and,
except for continuing participation in the increase or decrease
in Plan assets, including for any Former Participant on or after
December 21, 1989 any increase or decrease in Employer stock,
shall cease as of the date on which he terminates for any reason
including death, disability or retirement.
2.3 Retirement.
(a) Normal Retirement.
A Participant may retire on any date following the
date on which such Participant attains Normal Retirement Age.
Normal Retirement Age shall be the date the Participant attains
age sixty-five (65).
(b) Late Retirement.
(1) A Participant may continue employment and
corresponding participation after attaining Normal Retirement
Age.
(2) Effective for Plan Years beginning on or
after January 1, 1989 and unless otherwise provided in Section
2.3(b)(3) or 2.3(b)(4) or by announcement of the Internal Revenue
Service, distribution of the Accounts of any Participant or
Former Participant must begin no later than the first day of
April of the calendar year following the calendar year in which
the Participant or Former Participant attains age 70-1/2, even if
the Participant has not terminated employment with the Employer.
(3) For Plan Years beginning on or after
January 1, 1989 but solely for a Participant who attained age
70-1/2 before January 1, 1988 and continued employment after
January 1, 1988, distribution of such a Participant's benefits
must nevertheless begin not later than the first day of April of
the calendar year following the later of:
(A) the calendar year in which
the Participant attains age 70 1/2, or
(B) the calendar year in which
the Participant retires,
provided that the payment of benefits to a Participant who was a
more than five percent (5%) owner (as defined in Code Section
416(i)(1)(B)) at any time during the five (5) Fiscal Years ending
with the calendar year in which the Participant attained age
70-1/2 must begin not later than the first day of April following
the calendar year in which such Participant attained age 70-1/2.
In addition, if in any Fiscal Year a Participant who is still
employed, who has attained age 70 1/2, and who was not a more
than five percent (5%) owner during the five (5) Fiscal Years
ending with the calendar year in which he attained age 70 1/2,
becomes a more than five percent (5%) owner, payment of benefits
to such Participant must begin no later than the first day of
April following the calendar year in which the Fiscal Year in
which he becomes a more than five percent (5%) owner ends.
(4) The requirements imposed upon the
commencement of benefits under Sections 2.3(b)(2) and 2.3(b)(3)
shall not apply if a Participant (including a more than five
percent (5%) owner) has made a written designation prior to
January 1, 1984 to have his Account distributed at a later time
or in an alternative method which satisfies the distribution
rules under Section 401(a)(9) of the Code as in effect prior to
the enactment of the Tax Equity and Fiscal Responsibility Act of
1982 and the distribution rules under the Plan as in effect prior
to its amendment and restatement as of January 1, 1984. The
required beginning date for distribution under Sections 2.3(b)(2)
and 2.3(b)(3) shall be determined for an Alternate Payee by using
the birthdate of the Participant or Former Participant from whose
Accounts the Alternate Payee's Accounts were established under
Section 4.1(b).
(5) Unless a Former Participant receives
distribution of his Accounts in a lump sum prior to his required
beginning date under Section 2.3(b)(2) or Section 2.3(b)(3)
(whichever is applicable) ("Required Beginning Date") in
accordance with Section 5.2(b)(1), his Account shall be
distributed in installments commencing prior to his Required
Beginning Date and calculated in accordance with Section
5.2(b)(2). If a Participant is still employed on his Required
Beginning Date, the amount distributable to the Participant shall
be paid in installments calculated in accordance with Section
5.2(b)(2), or the Participant may elect to receive distribution
of the entire balance of his vested Accounts first determined as
of the Valuation Date immediately preceding his Required
Beginning Date and payable no later than his Required Beginning
Date, and thereafter determined as of the Valuation Date
immediately preceding the year of distribution, and payable no
later than the last day of each Fiscal Year in which he continues
to be employed. The amount distributable to any Alternate Payee
by his required beginning date under Section 2.3(b)(4) shall
equal the balance of his Accounts as of the Valuation Date
immediately preceding the his required beginning date.
ARTICLE III.
CONTRIBUTIONS
3.1 Employer Contributions and Limitations on Annual Additions.
(a) Employer Contributions.
Each Fiscal Year, each Employer may contribute in
cash or Employer Stock such amount as shall be determined by
resolution of each Employer's Board of Directors in their sole
discretion on or before the due date of the Employer's federal
income tax return for the Fiscal Year, including any extensions
thereof. Subject to the limitations set forth in Section 3.1(b),
any contribution made in cash shall be allocated to Participants'
Asset Accounts as provided in Section 4.6, except the amount of
any such cash contributions which are used pursuant to Section
9.2 to pay interest due on any Exempt Loan used to purchase
Employer Stock. Employer contributions made during or for any
Fiscal Year in which an Exempt Loan used to purchase Employer
Stock is outstanding, shall be accounted for as provided in
Section 9.2(c). Any Employer contribution made in shares of
Employer Stock shall be valued, in accordance with Section 1.16,
as of the Valuation Date for the Fiscal Year for which the
contribution is made and shall be held in the Temporary Employer
Stock Account for allocation pursuant to Section 4.7(a)(1),
subject to the limitations set forth in Section 3.1(b).
The total Employer contribution for any Fiscal Year
beginning after December 31, 1986 shall not exceed an amount
equal to fifteen percent (15%) of the Compensation of all
Participants employed on the last day of such Fiscal Year. If,
however, in any Fiscal Year which ended before January 1, 1987
the Employer contribution was less than fifteen percent (15%) of
the total Compensation otherwise paid to all Participants
employed by the Employer on the last day of such Fiscal Year, the
difference between the amount contributed and said fifteen
percent (15%) may be carried forward and contributed in a
succeeding Fiscal Year in order of time; provided, however, in no
event shall the amount carried forward and contributed in a
succeeding Fiscal Year exceed an additional ten percent (10%) of
the total Compensation paid to all Participants employed on the
last day of such succeeding Fiscal Year nor shall contributions
be made which would cause Annual Additions, as defined in Section
3.1(b)(1), to exceed the limitation provided in Section 3.1(b) of
the Plan.
Notwithstanding the foregoing provisions to the
contrary, for any Fiscal Year in which Employer contributions are
made to the Plan and used to repay principal or interest on an
Exempt Loan on or before the due date of the Employer's federal
income tax return for the Fiscal Year, including extensions, the
amount of such Employer contributions used to pay principal on an
exempt loan which are deductible shall not exceed twenty-five
(25%) of the Compensation of all Participants employed on the
last day of the Fiscal Year, and the amount of such Employer
Contributions used to pay interest on an Exempt Loan which are
deductible shall be unlimited. In the event the Employer has
adopted any other qualified employee plan described in Section
401 of the Code covering the same Employees covered by this Plan,
the total contributions made in any Fiscal Year under all plans
shall not exceed amounts deductible by the Employer under the
Code.
(b) Overall Limitation on Contributions.
(1) Basic Limitations.
Except as otherwise provided in the Special
Limits under Section 3.1(b)(2), for any Limitation Year beginning
after December 31, 1986, the total Annual Additions for each
Participant may not exceed the lesser of (A) $30,000 (or if
greater, one-quarter (1/4) of the dollar limitation in effect
under Code Section 415(b)(1)(A) for that Limitation Year, or (B)
twenty-five percent (25%) of the Participant's Section 415
Compensation from the Employer for that Limitation Year.
The term "Annual Additions" means the sum of:
(A) Employer contributions in cash or in
Employer stock;
(B) Forfeitures;
(C) Employee contributions as determined
under Code Section 415(c)(2);
(D) Contributions allocated to an individual
medical account as defined under Code
Section 401(h) and as limited under Code
Section 415(l); and
(E) Contributions allocated to a qualified
asset account as defined under Code
Section 419A and limited under Code
Section 419A(d).
In addition, in applying the limitations
contained in this Section 3.1(b), the term Employer is modified
for purposes of determining any parent-subsidiary controlled
group under Code Sections 414(b) and 414(c) by substituting the
phrase "more than 50%" for "at least 80%" in applying Code
Section 1563(a)(1), and all defined contribution plans of an
Employer as so defined, terminated or not, shall, for purposes of
these limitations, be considered as one plan; provided that in
the event a Participant is covered under any other qualified
defined contribution plan maintained by the Employer and in the
event that the total Annual Additions under all such defined
contributions plans for any such Participant exceeds the
limitations of this Section 3.1(b) in any Limitation Year, any
adjustment for excessive Annual Additions shall be determined in
accordance with the provisions of such other defined contribution
plans unless such plans are silent or direct adjustments in
accordance with the terms of this Plan, in which case the
provisions of Section 3.1(b)(3) shall govern.
(2) Special Limitations.
For any Limitation Year ending before January
1, 1990, if no more than one-third of the total Employer
contributions for a Fiscal Year are allocated to the Accounts of
Highly Compensated Employees, then the Annual Additions for each
Participant may not exceed the lesser of (A)(i) $30,000 (or if
greater, such other dollar amount which results from
cost-of-living adjustments under Section 415(d) of the Code) plus
(ii) the lesser of the amount calculated under clause (i) or the
amount of Employer Stock contributed or purchased with cash
contributed to the Plan, or (B) 25% of the Participant's Section
415 Compensation from the Employer for that Limitation Year.
For any Limitation Year beginning after
December 31, 1986, if no more than one-third of the total
Employer contributions which are deductible under Code Section
404(a)(9) for a Fiscal Year are allocated to the Accounts of
Highly Compensated Employees, then the term Annual Additions
shall not include forfeitures of Employer Stock (if such stock
was acquired with the proceeds of an Exempt Loan) or
Employer contributions used to pay interest on any Exempt Loan.
(3) Adjustment for Excessive Annual Additions.
Any amount which would otherwise have been
allocated to a Participant's Account but for the limitations of
this Section 3.1(b) shall be reallocated among the Accounts of
the remaining Participants for whom such limitations are not
exceeded on the same basis as Employer contributions and
forfeitures are allocated. To the extent that allocations to
Participants' Accounts would exceed these limitations for all
Participants' Accounts, such amount shall be held in a suspense
account and shall be reallocated among the Accounts of
Participants on the same basis as Employer contributions and
forfeitures in the next Limitation Year and for each succeeding
Limitation Year, as necessary to reduce the suspense account to
zero so long as the limitations under this Section 3.1(b) of the
Plan are not exceeded. Such suspense account shall not
participate in net income or gains (or be charged with losses)
under Section 4.5 or any other provision of this Agreement. No
further contributions shall be made until the suspense account is
allocated in such next succeeding Limitation Years.
(4) Participation in Multiple Plans.
In any case in which an individual is a
Participant in both a defined benefit plan and a defined
contribution plan maintained by the same Employer, the sum of the
defined benefit plan fraction and the defined contribution plan
fraction for any Limitation Year may not exceed 1.0.
(A) The defined benefit plan fraction
for any Limitation Year is a fraction the
numerator of which is the projected annual
pension benefit of the Participant under the
Plan (determined as of the close of the
Limitation Year), and the denominator of which
is the lesser of:
(i) the product of 1.25
multiplied by the maximum dollar
limitation in effect under Section
415(v)(1)(A) of the Code for such
Limitation Year; or
(ii) the product of 1.4 multiplied
by the amount which may be taken into
account under Section 415(b)(1)(B) of the
Code for such Limitation Year.
(B) the defined contribution plan
fraction for any Limitation Year is a fraction
the numerator of which is the sum of the Annual
Additions to the Participant's Account as of
the close of the Limitation Year and the
denominator of which is the sum of the lesser
of the following amounts determined for such
Limitation year and for each prior Year of
Service with the Employer:
(i) the product of 1.25
multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the
Code for such Limitation Year (determined
without regard to Section 415(c)(6) of
the Code); or
(ii) the product of 1.4 multiplied
by the amount which may be taken into
account under Section 415(c)(1)(B) of the
Code for such Limitation Year.
For purposes of applying the provisions of this
Section 3.1(b), all defined benefit plans
(whether or not terminated) of the Employer are
to be treated as one defined benefit plan, and
all defined contribution plans (whether or not
terminated) of the Employer are to be treated
as one defined contribution plan.
(5) Special Rule for Defined
Contribution Plan Fraction.
(A) If the Plan was in existence on
July 1, 1982, in applying the provisions of
Section 3.1(b)(4) with respect to the defined
contribution plan fraction for any Limitation
Year ending after December 31, 1982, at the
election of the Administrative Committee the
amount taken into account for the denominator
for each Participant for all Limitation Years
ending before January 1, 1983 shall be an
amount equal to the product of the amount of
the denominator determined under Section
3.1(b)(4) multiplied by a fraction (1) the
numerator of which is the lesser of $51,875 or
1.4 multiplied by twenty-five percent (25%) of
the Participant's Section 415 Compensation for
the Limitation Year ending in 1981, and (2) the
denominator of which is the lesser of $41,500
or twenty-five percent (25%) of the
Participant's Section 415 Compensation for the
Limitation Year ending in 1981.
(B) If the Plan satisfied the
applicable requirements of Code Section 415 as
in effect for all Limitation Years beginning
before January 1, 1987, an amount shall be
subtracted from the numerator of the defined
contribution plan fraction (not exceeding such
numerator) as prescribed by the U. S. Secretary
of the Treasury so that the sum of the defined
benefit plan fraction and defined contribution
plan fraction computed under Code Section
415(e)(1) (as revised by this Article III) does
not exceed 1.0 for such Limitation Year.
(6) Definitions.
For purposes of this Section 3.1, the
following terms shall have the following definitions:
(A) "Limitation Year" means the Fiscal Year.
(B) "Section 415 Compensation" means
compensation within the meaning of Treasury
Regulation Section 1.415-2(d)(11)(i), effective
for any Fiscal Year beginning on or after
January 1, 1987.
3.2 Time of Payment of Contribution.
All payments of contributions shall be made directly to the
Trustee and may be made on any date or dates selected by the
Employer; provided, however, that the total annual contribution
for each Fiscal Year shall be paid on or before the date on which
the Employer's federal income tax return is due, including any
extensions of time obtained for filing the return.
3.3 Voluntary Contributions.
Voluntary contributions by Participants are not
permitted under the Plan.
ARTICLE IV.
ALLOCATIONS TO ACCOUNTS
4.1 Creation of Accounts.
(a) Creation of Accounts for New Participants.
An Asset Account, an Unrestricted Employer Stock
Account and a Section 1042 Stock Account shall be established for
each Employee who becomes a Participant in the Plan after
December 31, 1986. The Asset Account, the Unrestricted Employer
Stock Account, and the Section 1042 Employer Stock Account of
each Participant shall be credited annually with the amounts, if
any, allocated to each such Participant as set forth in the
following Sections.
(b) Creation of Accounts for Alternate Payees.
Upon the Committee's determination in accordance with
Section 12.5 that a domestic relations order is a QDRO under Code
Section 414(p), the Committee shall open and maintain an Asset
Account, an Unrestricted Stock Account, and a Section 1042 Stock
Account to receive the interest of the Alternate Payee in the
corresponding Accounts of a Participant or Former Participant
which are subject to the QDRO. The affected Participant's or
Former Participant's Accounts shall be reduced by the amounts
transferred to any corresponding Accounts created hereunder for
an Alternate Payee. The Alternate Payee's Account shall then be
valued as set forth in the following Sections and shall be
nonforfeitable. Notwithstanding any other provisions of the Plan
to the contrary, the Committee shall not qualify any domestic
relations order which at any time requires a transfer or
distribution to an Alternate Payee in excess of the Participant's
or Former Participant's vested and nonforfeitable interest in his
Accounts.
4.2 Accounts Statements.
As soon as the Committee has made the annual
allocations to each Participant's Accounts, it shall notify each
Participant in writing with respect to the status of his Accounts
as of the Valuation Date. Such notification shall be made within
a reasonable period after the end of each Fiscal Year. The total
amounts so credited to each Participant's Accounts shall
represent each Participant's share of the Plan as of the
Valuation Date. Such allocation and notification shall not vest
in any Participant any right, title or interest in the Plan,
except to the extent, at the time or times, and upon the terms
and conditions set forth herein. Neither the Employer, the
Trustee, nor the Committee to any extent warrant, guarantee or
represent that the value of any Participant's Accounts at any
time will equal or exceed the amount previously allocated or
contributed thereto. For purposes of this Section 4.2, a Former
Participant, an Alternate Payee and a Beneficiary shall be
treated as a Participant.
4.3 Forfeitures.
(a) Forfeitures from Asset Accounts.
As of each Valuation Date, the Committee shall next
cause any amount credited to a Participant's Asset Account as of
the preceding Valuation Date which has been forfeited under
Section 5.9 as of the current Valuation Date, to be allocated
according to the following priority:
(1) To the Asset Accounts of any Participant who
terminated employment with the Employer having taken a
distribution under Article V who has returned to the employ of
the Employer before incurring six (6) consecutive one (1) year
Breaks in Service and repaid an amount in cash equal to the
dollar value of his prior distribution pursuant to Section 5.9,
in an amount equal to the dollar value of the prior Forfeiture
(provided, however, that if current Forfeitures are insufficient
to fully credit an amount equal to the dollar value of the prior
Forfeiture, the balance necessary to fully credit his Asset
Account shall come from current Employer contributions in cash
which are available for allocation in accordance with Section
3.1(a), and then
(2) To the Asset Accounts of the Participants who
are employed on the current Valuation Date, in the proportion
that each such Participant's Compensation during the Fiscal Year
ending on the current Valuation Date bears to the Compensation of
all such Participants during such Fiscal Year.
(b) Forfeitures from Employer Stock Accounts.
As of each Valuation Date, any shares of Employer
Stock credited to a Participant's Unrestricted Employer Stock
Account or Section 1042 Stock Account which have been forfeited
under Section 5.9 as of the current Valuation Date, shall be
allocated according to the following priority:
(1) Shares of Unrestricted Employer Stock shall be
allocated to the Unrestricted Employer Stock Accounts of
Participants who are employed on the current Valuation Date, in
the ratio that each such Participant's Compensation during the
Fiscal Year ending on the current Valuation Date bears to the
Compensation of all such Participants during such Fiscal Year.
(2) Shares of Section 1042 Employer Stock shall be
allocated to the Section 1042 Employer Stock Account of
Participants (1) who are employed on the current Valuation Date
and, (2) who are not Ineligible Participants, in the ratio that
each such Participant's Compensation during the Fiscal Year
ending on the current Valuation Date bears to the Compensation of
all such Participants during such Fiscal Year.
(c) Order of Allocations.
The Accounts of any Former Participant, Alternate
Payee, or Beneficiary shall be excluded for purposes of the
allocations required by this Section 4.3. The allocations
required by this Section 4.3 shall be the first allocations made
by the Committee at the end of each Fiscal Year.
4.4 Allocation of Purchased Unrestricted Employer Stock and
Section 1042 Employer Stock Released with Certain
Dividends.
(a) Unrestricted Employer Stock Purchased With Plan
Assets.
The Committee shall next cause any whole or
fractional shares of Unrestricted Employer Stock purchased during
the Plan Year ending on the current Valuation Date (other than
Unrestricted Employer Stock purchased with Employer
contributions) and held in the Temporary Stock Account to be
allocated to the Unrestricted Employer Stock Accounts of
Participants in the ratio that the value of the Asset Account of
each Participant as of the prior Valuation Date (after the
allocation of forfeitures under Section 4.3 for the current
Valuation Date, and reduced by any distributions since
the prior Valuation Date, and adjusted for any negative balances)
bears to the value of the Asset Accounts as of the prior
Valuation Date of all Participants as of the prior Valuation Date
(after the allocation of forfeitures under Section 4.3 for the
current Valuation Date, and reduced by any distributions since
the prior Valuation Date, and adjusted for any negative
balances).
The Asset Account (after the adjustments set forth in
the foregoing paragraph) of each Participant who receives
an allocation of Unrestricted Employer Stock under this Section
4.4(a) shall be reduced by a dollar amount equal to the purchase
price of the Unrestricted Employer Stock allocated to his
Unrestricted Employer Stock Account under this Section 4.4(a).
(b) Section 1042 Employer Stock Released With
Certain Dividends.
The Committee shall next cause any whole or
fractional shares of Section 1042 Employer Stock released from
the Suspense Account during the current Fiscal year as a result
of the payment of principal on an Exempt Loan with dividends
payable during the prior Fiscal Year on Section 1042 Employer
Stock then held in the Suspense Account which dividends were
allocated as of the prior Valuation Date in accordance with
Section 4.5(a)(2)(B) to the Asset Accounts of Participants who
were not Ineligible Participants, to be allocated to the Section
1042 Employer Stock Accounts of Participants who are not
Ineligible Participants in the ratio that the value of the Asset
Account as of the prior Valuation Date of each such Participant
(after the allocations and adjustments provided in Sections 4.3
and 4.4(a), and reduced by any distributions since the prior
Valuation Date, and adjusted for any negative balances) bears to
the value of the Asset Accounts as of the prior Valuation Date of
all Participants who are not Ineligible Participants (after the
allocations and adjustments provided in Sections 4.3 and 4.4(a),
and reduced by any distributions since the prior Valuation Date,
and adjusted for any negative balances).
The Asset Account (after the adjustments set forth in
the foregoing paragraph) of each Participant who receives an
allocation of Section 1042 Employer Stock under this Section
4.4(b) shall be reduced by a dollar amount equal to the ratio
that each such Participant's Account (after the adjustments set
forth in the foregoing paragraph) bears to the Asset Accounts of
all such Participants (after the adjustments set forth in the
foregoing paragraph) multiplied by the total dollar amount of
principal paid for the Fiscal Year from dividends payable on
shares of Section 1042 Employer Stock for the release from the
Suspense Account, pursuant to Section 9.2(b), of any whole or
fractional shares of Section 1042 Employer Stock allocable under
this Section 4.4(b).
(c) Order of Allocations.
The Accounts of any Former Participant, Alternate
Payee or Beneficiary shall be included for the purposes of the
allocations required by this Section 4.4. The allocations
required by this Section 4.4 shall be made immediately following
the allocations made under Section 4.3.
4.5 Valuation of Accounts.
(a) Asset Accounts.
(1) As of each Valuation Date, the Committee shall
next determine the fair market value of the Plan assets excluding
Employer Stock and excluding any dividend declared during the
Fiscal Year on Employer Stock (hereinafter referred to as the
"Plan Assets").
To determine any increase or decrease in the fair
market value of the Plan Assets, the amount of the Employer's
annual contribution for the Fiscal Year which has been paid prior
to the current Valuation Date and which remains after payments
prior to the current Valuation Date on any Exempt Loan is
subtracted from the fair market value of such Plan Assets. The
fair market value of the Plan Assets shall then be compared to
the fair market value of the Plan Assets as of the prior
Valuation Date. The difference shall constitute the increase or
decrease in net fair market value to be allocated under Section
4.5(a)(2).
(2) After completing the determinations provided
for in Section 4.5(a)(1), the Committee shall next cause the
following allocations:
(A) First, the amount of any dividend
declared during the Fiscal Year on Employer Stock allocated to
Participants' Unrestricted Employer Stock Accounts or Section
1042 Employer Stock Accounts as of the preceding Valuation Date
(except any portion of such dividend which was distributed under
Section 5.7(a) on or before the current Valuation Date and except
the portion of such dividend declared on Employer Stock allocated
to Unrestricted Employer Stock Accounts or Section 1042 Employer
Stock Accounts which was distributed to, or sold to allow a
distribution in cash to, Participants on or before the current
Valuation Date) shall be allocated to Participants' Asset
Accounts in accordance with Section 5.7(a);
(B) Second, (i) the amount of any dividend
declared during the Fiscal Year on Employer Stock held in the
Temporary Stock Account or the Suspense Account and (ii) the
amount of any dividend declared during the Fiscal Year on
Employer Stock allocated to Participants' Unrestricted Employer
Stock Accounts or Section 1042 Employer Stock Accounts as of the
beginning of the Fiscal Year which was distributed to, or sold to
allow a distribution in cash to, Participants on or before the
current Valuation Date (except any portion of such dividend which
was distributed or used to make payments on an Exempt Loan in
accordance with Section 5.7 on or before the current Valuation
Date), shall be allocated to the Asset Accounts of Participants
in the ratio that the value of each Participant's Asset Account
(after the allocations and adjustments provided in Sections 4.3
and 4.4, including a reduction for any distributions since the
prior Valuation Date) bears to the value of all such
Participants' Asset Accounts (after the allocations and
adjustments provided in Sections 4.3 and 4.4, including a
reduction for any distributions since the prior Valuation Date),
provided that the Asset Accounts of any Ineligible Participants
may not share in an allocation under this Section 4.5(a)(2)(B) of
any dividends declared during the Fiscal Year on any Section 1042
Employer Stock;
(C) Third, any whole or fractional shares of
Section 1042 Employer Stock released from the Suspense Account by
payment of principal with dividends declared on Section 1042
Employer Stock held in the Suspense Account during the Fiscal
Year in accordance with Section 5.7 shall be allocated to the
Section 1042 Employer Stock Accounts of Participants who are not
Ineligible Participants in the same ratio as dividends are
allocated under Section 4.5(a)(2)(B); and
(D) Fourth, the increase or decrease in the
net fair market value of the Remaining Plan Assets shall be
allocated to the Asset Accounts of Participants who had Asset
Accounts as of the prior Valuation Date in the same ratio as
dividends on Unrestricted Employer Stock are allocated under
Section 4.5(a)(2)(B).
(b) Employer Stock Accounts.
As of each Valuation Date, the Committee shall
determine the fair market value of Employer Stock held by the
Trust. This fair market value shall be determined in accordance
with Section 1.16 to provided to Participants with the
notification under Section 4.2.
(c) Order of Allocations.
The Accounts of any Former Participant, Alternate
Payee or Beneficiary shall be included for purposes of the
allocations required by this Section 4.5. The allocations
required by this Section 4.5 shall be made immediately following
the allocations made under Section 4.4.
4.6 Annual Employer Contribution Allocation.
As of each Valuation Date, the Committee shall next
cause the amount of any Employer contribution for the Fiscal Year
ending on the current Valuation Date which is made in cash, which
is not used to make principal payments on any Exempt Loan used to
purchase Employer Stock, which was not used to purchase
Unrestricted Employer Stock, which is available for allocation in
accordance with Section 3.1(a), and which remains after any
allocation required under Section 4.3(a)(1) (if any), to be
allocated to the Asset Account of Participants who are employed
on the current Valuation Date, in the ratio that each such
Participant's Compensation during the Fiscal Year ending on the
current Valuation Date bears to the Compensation of all such
Participants during such Fiscal Year. The allocation required by
this Section 4.6 is subject to the limitations set forth in
Section 3.1(b) and shall be made immediately following the
allocations made under Section 4.5.
4.7 Allocations of Employer Stock.
(a) Allocation of Stock Contributed by the
Employer.
As of each Valuation Date, the Committee shall next
cause any whole or fractional shares of Unrestricted Employer
Stock contributed by the Employer under Section 3.1(a) and held
in the Temporary Employer Stock Account as of the current
Valuation Date, to be allocated to the Unrestricted Employer
Stock Accounts of Participants who are employed on the current
Valuation Date, in the ratio that each such Participant's
Compensation during the Fiscal Year ending in the current
Valuation Date bears to the Compensation of all such Participants
during such Fiscal Year, subject to the limitations set forth in
Section 3.1(b).
(b) Allocation of Section 1042 Employer Stock.
As of each Valuation Date, the Committee shall
next cause any whole or fractional shares of Section 1042
Employer Stock released from the Suspense Account pursuant to
Section 9.2 as of the current Valuation Date (other than any
whole or fractional shares released through the payment of
principal with dividends on Section 1042 Employer Stock held in
the Suspense Account), to be allocated to the Section 1042
Employer Stock Account of Participants (1) who are employed on
the current Valuation Date and (2) who are not Ineligible
Participants in the ratio that each such Participant's
Compensation during the Fiscal Year ending on the Valuation Date
bears to the Compensation of all such Participants during such
Fiscal Year.
(c) Allocation of Unrestricted Employer Stock From
Suspense Account and Purchased Unrestricted
Employer Stock.
As of each Valuation Date, the Committee shall
next cause any whole or fractional shares of Unrestricted
Employer Stock released from the Suspense Account pursuant to
Section 9.2 or purchased by the Trustee with Employer
contributions in cash and held in the Temporary Employer Stock
Account as of the current Valuation Date, to be allocated to the
Unrestricted Employer Stock Accounts of Participants who are
employed on the current Valuation Date in the ratio that each
such Participant's Compensation during the Fiscal Year ending on
the current Valuation Date bears to the Compensation of all such
Participants during the Fiscal Year.
(d) Order of Allocations.
The allocations required by this Section 4.7
shall be the final allocations made by the Committee each Fiscal
Year and shall be made immediately following the allocations made
under Section 4.6.
4.8 Voting Rights in Employer Stock.
(a) Each Participant is, for purposes of this
Section 4.8, hereby designated a "named fiduciary," within the
meaning of Section 403(a)(1) of ERISA, with respect to the shares
of Employer Stock held in the Trust at the respective times such
fiduciary rights are exercisable, as set forth below.
(b) Each Participant shall have the right, to the
extent of his proportionate share (as determined below) of all
shares of Employer Stock held in the Trust (including shares held
in the Suspense Account and the Temporary Stock Account), to
direct the Trustee in writing as to the manner in which such
Employer Stock is to be voted on each matter brought before an
annual or special shareholders' meeting.
(c) Before each Shareholder's meeting, the
Committee shall notify each Participant (as determined below) of
each occasion for the exercise of voting rights within a
reasonable period before such rights are to be exercised. The
notice shall include all proxy solicitation and other materials
distributed by Giant to shareholders with regard to such exercise
of voting rights, together with a form requesting confidential
directions on how the shares of Employer Stock held by the
Trustee in the Trust shall be voted. Upon timely receipt of such
directions, the Trustee shall on each such matter vote as
directed the appropriate number of shares (including fractional
shares) of Employer Stock held by the Trustee in the Trust, and
the Trustee shall have no discretion in such matter. The Trustee
shall vote both allocated shares and unallocated shares for which
it has not received direction in the same proportion as directed
shares are voted, and the Trustee shall have no discretion in
such matter. The instructions received by the Trustee (or the
Trustee's designate) from Participants shall be held by the
Trustee (or the Trustee's designate) in confidence and shall not
be divulged or released to any person, including officers or
employees of the Employer; provided, however, that to the extent
necessary for the operation of the Plan, such instructions may be
relayed by the Trustee (or the Trustee's designate) to a record
keeper, auditor or other person providing services to the Plan if
such person (i) is not the Employer, and (ii) agrees not to
divulge such directions to any other person, including employees,
officers and directors of the Employer.
(d) Solely for purposes of directing the Trustee to
vote, the proportionate share of any Participant in the Employer
Stock held in the Trust shall be a fraction, the numerator of
which shall be the number of shares allocated to such
Participant's Accounts and the denominator of which shall be the
number of such shares allocated to all Participants' Accounts as
of the record date for the meeting at which shares are to be
voted.
For purposes of this Section 4.8, any shares of
Employer Stock which, as of the last Valuation Date, were
allocated to the Accounts of a Former Participant, an Alternate
Payee or a Beneficiary to whom a distribution of vested and
nonforfeitable benefits has been made pursuant to Article V prior
to the record date for the meeting at which shares are to be
voted which remain in the Trust of the record date, shall be
treated as unallocated shares, and no notice of the right to
direct the Trustee shall be required for any such Former
Participant, Alternate Payee or Beneficiary. For all other
purposes of this Section 4.8, a Former Participant, Alternate
Payee or Beneficiary shall be treated as a Participant.
4.9 Right to Tender Employer Stock.
(a) Each Participant is, for purposes of this
Section 4.9, hereby designated a "named fiduciary," within the
meaning of Section 403(a)(1) of ERISA, with respect to the shares
of Employer Stock held in the Trust at the respective times such
fiduciary rights are exercisable, as set forth below.
Notwithstanding any other provisions of this Plan to the
contrary, in the event of a tender or exchange offer for shares
of Employer Stock held by the Trustee in the Trust, the Trustee
shall have no discretion or authority to sell, convey or transfer
such shares except to the extent, and only to the extent, that
the Trustee is timely instructed to do so in writing by the
Participant with respect to his proportionate share (as
determined below), and upon timely receipt of such written
instructions, the Trustee shall so sell, convey or transfer such
shares of Employer Stock. Shares of Employer Stock for which the
Trustee has not received timely instructions shall not be
tendered. The instructions received by the Trustee from
Participants shall be held by the Trustee (or if the Trustee is
the Employer or an employee, officer or director of the Employer,
the Trustee's designate) in confidence and shall not be divulged
or released to any person, including officers or employees of the
Employer; provided, however, that to the extent necessary for the
operation of the plan, such instructions may be relayed by the
Trustee (or the Trustee's designate) to a record keeper, auditor
or other person providing services to the Plan if such person (i)
is not the Employer, and (ii) agrees not to divulge such
directions to any other person, including employees, officers and
directors of the Employer. Each Participant shall have the
right, to the extent of his proportionate share (as determined
below) of all shares of Employer Stock held in the
Trust (including shares held in the Suspense Account and the
Temporary Stock Account), to direct the Trustee in writing as to
the manner in which such Employer Stock is to be tendered or
exchanged.
(b) Solely for purpose of directing the Trustee in
the event of a tender or exchange offer for shares of Employer
Stock held by the Trustee in the Trust, the proportionate share
of any Participant in the Employer Stock held in the Trust shall
be a fraction, the numerator of which shall be the number of
shares allocated to such Participant's Accounts and the
denominator of which shall be the number of such shares allocated
to all Participants' Accounts as of the record date for the
tender or exchange offer.
For purposes of this Section 4.9, any shares of
Employer Stock which, as of the last Valuation Date, were
allocated to the Account of a Former Participant, an Alternate
Payee, or a Beneficiary to whom a distribution of vested and
nonforfeitable benefit has been made pursuant to Article V prior
to the record date for the tender or exchange offer which remain
in the Trust as of the record date, shall be treated as
unallocated shares, and no notice of the right to direct the
Trustee shall be required for any such Former Participant,
Alternate Payee or Beneficiary. For all other purposes of this
Section 4.9, a Former Participant, Alternate Payee or Beneficiary
shall be treated as a Participant.
(c) In the event of a tender or exchange offer for
shares of Employer Stock held by the Trustee in the Trust, (i)
the Employer and the Committee shall comply with applicable law
and regulations with regard to any such tender or exchange offer;
(ii) the Employer and the Committee shall adequately communicate
or cause to be communicated to the Participants the provisions of
this Plan relating to such tender or exchange offer and timely
distribute to Participants all communications directed generally
to the owners of the shares subject to the tender or exchange
offer, together with a form requesting confidential directions on
whether such shares of Employer Stock held by the Trustee in the
Trust for the account of such Participant shall be tendered or
exchanged, and (iii) the Trustee shall timely transmit to the
Committee for distribution to Participants, all communications
relating to such tender or exchange offer that the Trustee may
receive from the offeror of such tender or exchange offer, if
any. In no event shall the communications to Participants with
respect to such tender or exchange offer or public
communications, directed generally to the owners of the shares
subject to the tender or exchange offer, be deemed to be
interference in the exercise of the Participants' decision
regarding such tender or exchange offer; provided, however, that
Section 510 of ERISA shall apply to any communication to
Participants regarding such tender or exchange offer.
(d) Without limiting the generality of the
provisions of Section 7.8 hereof, the Employer agrees to
indemnify and hold the Trustee harmless from and against any
liability that it may incur in consequence of selling, conveying
or transferring shares of Employer Stock held by the Trustee in
the Trust when so directed by the Participant in a timely manner,
or in consequence of the treatment of such shares in the absence
of timely direction by the Participant to do so, or as a result
of the Employer's breach of Section 4.9(c) hereof.
4.10 Coverage Fail-Safe
For any Fiscal Year during which the Plan fails to
meet the coverage requirements of Code Section 410(b) because
certain Participants who completed more than 500 Hours of Service
but who were not employed on the current Valuation Date have
failed to receive an allocation of Employer contributions and
Forfeitures pursuant to this Article IV, then, effective only for
that Fiscal Year, the provisions of this Article IV requiring a
Participant to be employed ont he current Valuation Date to
receive an allocation of Employer contributions and Forfeitures
shall be deemed to be amended prior to the end of the Fiscal Year
and retroactively to the first day of such Fiscal Year to alter
the required employment date to the latest day in the Plan Year
which will allow the Plan to meet the coverage requirements of
Code Section 410(b) for such Plan Year.
ARTICLE V.
BENEFITS
5.1 Vesting of Interests.
(a) Upon Death, Disability or Retirement.
The interest of each Participant in his Accounts under the
Plan shall become one hundred percent vested and nonforfeitable
upon the Participant's attaining Normal Retirement Age (if the
Participant is still employed), or upon the Participant's death
or disability.
(b) Termination for Other Reasons.
If a Participant's employment is terminated prior to
attaining Normal Retirement Age for any reason other than death
or disability, his interest in his Accounts under the Plan shall
vest pursuant to the following vesting schedule (subject to the
provisions of Section 14.2):
Vesting Schedule
Years of Service Vested Percentage
Less than one 0%
At least one but less than two 10%
At least two but less than three 20%
At least three but less than four 30%
At least four but less than five 40%
At least five but less than six 60%
At least six but less than seven 80%
Seven or more 100%
(c) Calculation of Years of Service.
(1) General Rules for Crediting Years of Service.
For purposes of applying the vesting schedule in
Section 5.1(b), all Years of Service with the Employer, including
Years of Service during periods when the Employer did not
maintain this Plan or a predecessor plan (as defined by Treasury
regulations), shall be taken into account, except Years of
Service which are disregarded under Section 5.1(c)(2). A
Participant who terminates employment at any time during the
Fiscal Year for any reason other than retirement, death or
disability, shall be credited with a Year of Service for vesting
purposes if such Participant performs one thousand (1,000) or
more Hours of Service during the Fiscal Year in which his
employment terminates.
(2) Special Rules for Crediting Years of Service
Upon Reemployment.
(A) Delay in Crediting Years of Service. If
a Participant terminates employment and incurs a Break in
Service, Years of Service completed before the Break in Service,
which Years of Service are not otherwise disregarded under the
provisions under this Section 5.1(c), shall not be taken into
account for vesting purposes upon the Participant's reemployment
until the Participant completes a Year of Service after the Break
in Service. If a Participant terminates employment and does not
incur a Break in Service, Years of Service completed before his
termination of employment shall immediately be taken into account
upon his reemployment.
(B) Rule of Parity. Any Participant who
incurs a Break in Service before acquiring any vested interest in
his Accounts shall not be credited with any Years of Service
prior to the Break in Service, if the number of consecutive one
(1) year Breaks in Service after the first of the consecutive
Breaks in Service equals or exceeds the greater of five (5) or
the aggregate number of Years of Service earned prior to such
Breaks in Service.
(C) Effect on Portion of Accounts Earned
Prior to Break in Service. For a Participant who incurs a Break
in Service, Years of Service completed after such Break in
Service shall not be taken into account for purposes of
determining his vested interest in the portion of his Accounts
which accrued before such Break in Service, if the number of con-
secutive one (1) year Breaks in Service after the first of the
consecutive Breaks in Service equals or exceeds the greater of
five (5) or the aggregate number of Years of Service earned prior
to such Breaks in Service.
(3) Break in Service Rules for Pre-January 1, 1985
Plan Years. Notwithstanding Section 5.1(c)(2) to the contrary,
if under the terms of the Plan in effect on or before January 1,
1984, Years of Service of a Participant who incurs a Break in
Service would have been disregarded, such Years of Service shall
be disregarded as of January 1, 1985.
(d) Transition Rule.
The vested interest of a Participant who terminated his
employment and who received a distribution of his Profit Sharing
Account prior to July 1, 1987 shall be determined in accordance
with the provisions of Section 5.1 prior to its amendment and
restatement as of July 1, 1987.
5.2 Form of Distribution.
(a) Distribution in Cash or in Stock.
Each Former Participant, Alternate Payee, or Beneficiary
(and each Participant who is required to begin distributions
under Section 2.3) shall, subject to the requirements of Sections
5.2(b) and 5.6, have the right to receive distribution of his
vested Accounts in whole shares of Employer Stock in accordance
with Section 5.3, unless he elects to receive his distribution in
cash in accordance with Section 5.4 or in cash and Employer Stock
in accordance with Section 5.5. A Participant, Former
Participant, Alternate Payee, or Beneficiary who is entitled to
receive distribution of his vested Accounts in installments may
elect as to each such installment whether to receive a
distribution in Employer Stock or in cash, but not in Employer
Stock and cash. Such installment distributions shall be made in
a manner consistent with the provisions of Sections 5.3 and 5.4
and any procedures adopted by the Committee. Any election under
this Section 5.2 shall be made in writing on a form approved by
the Committee.
The Committee is expressly authorized and shall have full
discretion to adopt any written procedures necessary to implement
the elections under this Section 5.2 and the forms of
distribution under Sections 5.3, 5.4 and 5.5, including (but not
limited to) procedures providing for the timing of distributions
within the parameters of Section 5.6, the deduction from the
Accounts of the recipient of any distribution of any brokerage
fees or expenses incurred in making the distribution, and for any
cash adjustments required by fractional shares of Employer Stock.
Such procedures shall be binding upon all parties.
(b) Lifetime Distributions.
(1) General Rule.
If the value of the vested Accounts of a Former
Participant or an Alternate Payee is $3,500 or less, distribution
of the vested Accounts shall be made in a single lump sum. If
the value of the vested Accounts of a Former Participant or an
Alternate Payee exceeds $3,500 then except as otherwise provided
in Section 5.2(b)(2), the Former Participant or Alternate Payee
may elect to receive distribution in a single lump sum or in
substantially equal annual installments over a period not longer
than the greater of 5 years or, in the case of a Former
Participant or Alternate Payee whose vested Accounts exceed
$500,000, 5 years, plus 1 additional year (not to exceed an
additional 5 years) for each $100,000 or fraction thereof by
which the value of the vested Accounts immediately prior to the
commencement of distributions exceeds $500,000; provided that the
$100,000 and $500,000 shall be subject to cost-of-living
adjustments under Code Section 409(o) and further provided that a
Former Participant or Alternate Payee receiving installment
distributions under this Section 5.2(b)(1) may elect at any time
to receive the balance of his vested Accounts in a single lump
sum.
(2) Additional Lifetime Installments Distributions.
A Former Participant who has reached Normal
Retirement Age before commencing distributions whose vested
Accounts exceed $3,500, and a Participant who is required to
begin distributions under Section 2.3 while still employed, may
elect to receive distributions in annual installments calculated
in accordance with Code Section 401(a)(9), and any regulations
promulgated thereunder, payable over the Former Participant's or
Participant's life expectancy, without recalculation, as
determined in accordance with Table V under U.S. Treasury
Regulation Section 1.72-9. A Former Participant or Participant
receiving annual installment distributions under this Section
5.2(b)(2) may elect at any time to receive the balance of his
Accounts in a single lump sum. The installment distribution
option provided under this Section 5.2(b)(2) is not available to
any Alternate Payee.
(c) Distributions Upon Death.
If the value of the vested Accounts of a deceased
Participant is $3,500 or less, distribution of the Accounts shall
be made in a single lump sum. If the value of the vested
Accounts of a deceased Participant or Former Participant exceeds
$3,500 and (1) the deceased Participant or Former Participant
dies prior to his required beginning date as determined under
Section 2.3, distribution of the Accounts shall be made in a
single lump sum or in installments over a period ending no later
than the December 31 which falls in the Fiscal Year which
includes the fifth anniversary of the date of death, with the
first payment made no later than the last day of the Fiscal Year
immediately following the Fiscal Year which includes the date of
death and the last payment made no later than the last day of the
Fiscal Year which includes the fifth anniversary of the date of
death, or (2) the deceased Participant or Former Participant dies
after his required beginning date as determined under Section 2.3
having previously elected an installment distribution under
Section 5.2(b)(2), distribution of the remaining balance of the
Accounts shall be made in a single lump sum or installments over
a period not to exceed the lesser of the period provided under
Section 5.2(c)(1) or the remaining installment period provided
under Section 5.2(b)(2). The election of a form of distribution
upon death shall be made by the Participant or Former Participant
on a beneficiary designation form or by the Beneficiary after the
Participant or Former Participant's death. Distribution of the
Accounts of a deceased Alternate Payee shall be made in a single
lump sum.
5.3 Distributions in Stock.
(a) If a Participant elects a distribution in stock under
Section 5.2(a), he shall receive a distribution of the number of
whole shares of Employer Stock allocated to his Unrestricted
Employer Stock Account and his Section 1042 Stock Account, if
any, as of the Valuation Date coincident with or immediately
preceding the date of distribution multiplied by the percentage
of his vested interest under Section 5.1, plus a dollar amount
equal to the number of fractional shares of Employer Stock in
which he has a vested interest, if any, multiplied by the value
of the Employer Stock as of the date of any purchase of shares of
Employer Stock as provided in Section 5.3(b).
(b) In addition, the Participant shall receive a
distribution of the number of whole shares of Employer Stock
which may be purchased by the Trustee in the open market on the
date of distribution with the balance of his Asset Account
calculated as follows:
(1) The dollar amount credited to his Asset Account
as of the Valuation Date coincident with or immediately preceding
the date of distribution; less
(2) The amount of any dividends on Employer Stock
allocated to the Participant's Asset Account in accordance with
Sections 4.5 and 5.7 which has been distributed to the
Participant since the preceding Valuation Date in accordance with
Section 5.7; less
(3) The amount of any brokerage fees or expenses
incurred by the Trustee in purchasing the Employer Stock to be
distributed to him, calculated in accordance with any procedures
adopted by the Committee under Section 5.2; multiplied by
(4) The percentage of his vested interest
determined under the applicable provisions of Section 5.1; less
(5) The balance remaining unpaid on any Participant
Loan under Section 5.10 secured by the Participant's vested
interest at the time distribution of benefits commences (if the
distribution is to a Former Participant); divided by
(6) The value of Employer stock as of the date of
distribution. The Participant shall receive any balance
remaining in his Asset Account after the foregoing calculation
and purchase of whole shares in cash.
(c) Any distributions in installments shall be made first
from the Participant's Stock Accounts and the amount of each
installment shall be determined by dividing the total value of
the Participant's Accounts by the number of annual installments
yet to be paid. A Former Participant, Alternate Payee or
Beneficiary shall be treated as a Former Participant for purposes
of this Section 5.3 except that the vested interest of an
Alternate Payee or Beneficiary shall always be 100% in accordance
with Sections 4.1(b) and 5.1(a), respectively.
5.4 Distributions in Cash.
If a Participant elects a distribution in cash under
Section 5.2(a), he shall receive a distribution equal to the sum
of:
(a) The dollar amount credited to his Asset Account as of
the Valuation Date coincident with or immediately preceding the
date of distribution; less
(b) The amount of any dividends on Employer Stock
allocated to the Participant's Asset Account in accordance with
Sections 4.5 and 5.7 which has been distributed to the
Participant since the preceding Valuation Date in accordance with
Section 5.7; multiplied by
(c) The percentage of his vested interest determined
under the applicable provisions of Section 5.1; plus
(d) The dollar amount equal to the proceeds from the sale
of the number of whole shares of Employer Stock in which he has a
vested interest, if any, on the open market; plus
(e) The dollar amount equal to the number of fractional
shares of Employer Stock in which he has a vested interest, if
any, multiplied by the value of the Employer Stock as of the date
of the sale of shares of Employer Stock as provided in Section
5.4(e); less
(f) The balance remaining unpaid on any Participant Loan
under Section 5.10 secured by his vested interest at the time
distribution of benefits commences; less
(g) The amount of any brokerage fees or expenses incurred
by the Trustee in selling Employer Stock in accordance with
Section 5.4(d), calculated in accordance with any procedures
adopted by the Committee under Section 5.2.
(h) Any distributions in installments shall be made first
from the Participant's Asset Account and the amount of each
installment shall be determined by dividing the total value of
the Participant's Accounts by the number of annual installments
yet to be paid. A Former Participant, Alternate Payee or
Beneficiary shall be treated as a Participant for purposes of
this Section 5.4 except that the vested interest of an Alternate
Payee or Beneficiary shall always be 100% in accordance with
Sections 4.1(b) and 5.1(a) respectively.
5.5 Distributions in Cash and Stock
(a) If a Participant elects a distribution in cash and in
stock under Section 5.2(a), he shall receive a distribution of
the number of whole shares of Employer Stock allocated to his
Unrestricted Employer Stock Account and his Section 1042 Stock
Account, if any, as of the Valuation Date coincident with or
immediately preceding the date of distribution multiplied by the
percentage of his vested interest under Section 5.1, plus a
dollar amount equal to the number of fractional shares of
Employer Stock in which he has a vested interest, if any,
multiplied by the value of the Employer Stock as of the date of
distribution.
(b) In addition, he will receive a distribution equal to
the sum of:
(1) The dollar amount credited to his Asset Account
as of the Valuation Date coincident with or immediately preceding
the date of distribution; less
(2) The amount of any dividends on Employer Stock
allocated to the Participant's Asset Account in accordance with
Sections 4.5 and 5.7 which has been distributed to the
Participant since the preceding Valuation Date in accordance with
Section 5.7; multiplied by
(3) The percentage of his vested interest
determined under the applicable provisions of Section 5.1; less
(4) The balance remaining unpaid on any Participant
Loan under Section 5.10 secured by his vested interest at the
time distribution of benefits commences. A Former Participant,
Alternate Payee, or Beneficiary shall be treated as a Participant
for purposes of this Section 5.5 except that the vested interest
of an Alternate Payee or Beneficiary shall always be 100% in
accordance with Sections 4.1(b) and 5.1(a), respectively.
5.6 Time of Distribution.
(a) General Rule.
Unless a Former Participant or Alternate Payee is permitted
to delay the distribution under Section 5.6(b), distribution of
the vested Accounts of a Participant who has terminated
employment shall begin as soon as practicable after the end of
the Fiscal Year in which he terminates employment, and
distribution of the Accounts of an Alternate Payee shall begin as
soon as practicable after the establishment of the Alternate
Payee's Accounts, but in no event later than the earliest of
(1) sixty (60) days following the close of the later of the
Fiscal Year in which the Participant attains Normal Retirement
Age, in which the tenth anniversary of the date the Participant
commenced participation in the Plan occurs or in which the
Participant terminates employment for any reason, (2) the date
required in Section 2.3(b), (3) one year after the close of the
Fiscal Year in which the Participant terminates employment after
attaining Normal Retirement Age, becomes disabled, or dies, or
(4) 5 years after the close of the Fiscal Year in which a
Participant terminates employment for any other reason, so long
as he is not reemployed. For purposes of this Section 5.6, no
distribution of Employer Stock acquired in a transaction to which
Code Section 1042 applies will be "practicable" until November 1,
1990 or such earlier date as the application of the excise tax
imposed under Code Section 4978 expires.
(b) Consents and Notices.
(1) Accounts of $3,500 or Less.
If the vested and nonforfeitable value of a Former
Participant's or an Alternate Payee's Accounts is $3,500 or less,
distribution shall be made as soon as practicable after the end
of the Fiscal Year in which the Former Participant terminated
employment or as soon as practicable after a determination under
Section 12.5 that a domestic relations order is a QDRO, but,
beginning on or after January 1, 1993, in no event sooner than 30
days after the Former Participant, Alternate Payee, or
Beneficiary receives written notice of the elections permitted
(A) under Article X for a direct rollover distribution, if any,
and (B) under Section 5.2(a) of the right to choose distribution
in the form of Employer Stock, cash, or Employer Stock and cash.
If a Former Participant, Alternate Payee, or Beneficiary fails to
provide written election within 45 days after the date of the
notice, distribution shall be made in the form of cash payable
directly to the Former Participant, Alternate Payee, or
Beneficiary, without his consent. If the Former Participant,
Alternate Payee, or Beneficiary wishes to waive the 30 day
waiting period after receipt of such written notice, he must make
an affirmative election to do so in writing.
(2) Accounts in Excess of $3,500.
If the vested and nonforfeitable value of a Former
Participant's vested Accounts is more than $3,500, more, the
Former Participant must consent in writing to any distribution
prior to the date on which he attains Normal Retirement Age. If
the value of an Alternate Payee's Accounts is more than $3,500,
the Alternate Payee must consent in writing to any distribution
prior to the date on which the Participant or Former Participant
from whose Accounts the Alternate Payee's Accounts were
established, attains Normal Retirement Age. No consent is
required from a Beneficiary. Beginning on or after January 1,
1993, no distribution shall be made sooner than 30 days after the
Former Participant, Alternate Payee, or Beneficiary, receives
written notice of the elections permitted (A) under Article X for
a direct rollover distribution, if any, and (B) under Section
5.2(a) of the right to choose distribution in the form of
Employer Stock, cash, or Employer Stock and cash. If a Former
Participant or Alternate Payee fails to provide a written
election within 45 days after the date of the notice, no
distribution shall be made unless distribution is required under
Section 2.3 and any such required distribution shall be made in
cash directly to the Former Participant or Alternate Payee. If a
Beneficiary fails to provide a written election within 45 days
after the date of the notice, distribution shall be made in the
form of cash payable directly to the Beneficiary. If the Former
Participant, Alternate Payee, or Beneficiary wishes to waive the
30 day waiting period after receipt of such written notice, he
must make an affirmative election to do so in writing.
(c) Liquidity Limitations.
The time of any distribution of any benefit in cash under
Sections 5.4 or 5.5 shall also be subject to the following
guidelines, but in no event shall distribution be delayed under
the terms of this Section 5.6(c) beyond the required commencement
dates described in Section 5.6(a):
(1) If a distribution in cash would cause a
liquidation or distribution of greater than fifteen percent (15%)
of the fair market value of the Plan assets other than Employer
Stock, then the distribution shall be delayed for up to three
years in order to permit sufficient liquidation of assets, but in
no event shall distribution be delayed beyond the required
commencement dates described in Section 5.6(a).
(2) Even if a distribution in cash would not cause
a liquidation or distribution of greater than fifteen percent
(15%) of the fair market value of the Plan assets other than
Employer Stock, if the distribution is in excess of One Hundred
Thousand Dollars ($100,000.00), then the distribution shall be
delayed until thirty (30) days after the next annual Employer
Contribution; and
(3) Notwithstanding (1) and (2) to the contrary, if
a distribution in cash, when aggregated with all other
distributions prior to such distribution for the Fiscal Year,
exceeds fifteen percent (15%) of the fair market value of the
Plan assets other than Employer Stock, then the distribution
shall be delayed for up to three years in order to permit
sufficient liquidation of assets.
5.7 Dividends.
(a) Dividends on Stock Allocated to Unrestricted
Employer Stock Accounts and Section 1042
Employer Stock Accounts.
Any dividend declared during the Fiscal Year on
Employer Stock allocated to a Participant's, Former
Participant's, Alternate Payee's, or Beneficiary's Unrestricted
Employer Stock Account or Section 1042 Employer Stock Account
shall be allocated to the Asset Account of the Participant,
Former Participant, Alternate Payee, or Beneficiary for whose
benefit the Employer Stock was held as of the record date for
payment of such dividend (provided that any dividend declared
during the Fiscal Year on Employer Stock allocated to a
Participant's, Former Participant's, Alternate Payee's, or
Beneficiary's Unrestricted Employer Stock Account or Section 1042
Employer Stock Account as of the beginning of the Fiscal Year
which is distributed to, or sold to allow a distribution in cash
to, a Participant, Former Participant, Alternate Payee, or
Beneficiary on or before the end of the Fiscal Year, shall
instead be allocated in accordance with the terms of Section
4.5(a)(2)(B)), and may, in the sole discretion of the
Administrative Committee, be distributed in cash within ninety
(90) days after the close of the Fiscal Year in which the
dividend is paid to the Plan to those Participants, Former
Participants, Alternate Payees, or Beneficiaries to whose Asset
Accounts such dividends were allocated.
(b) Dividends on Stock Held in the Temporary Stock
Account.
Any dividends declared during the Fiscal Year on
Employer Stock held in the Temporary Stock Account as of the
record date for payment of such dividend shall be allocable to
the Asset Accounts of Participants, Former Participants,
Alternate Payees and Beneficiaries in accordance with Section 4.5
and may, in the sole discretion of the Administrative Committee,
be distributed in cash within ninety (90) days after the close of
the Fiscal Year in which the dividend is paid to the Plan to the
Participants, Former Participants, Alternate Payees, or
Beneficiaries to whose Asset Accounts the dividends were
allocated pursuant to Section 4.5.
(c) Dividends on Stock Allocated to the Suspense Account.
Any dividends declared during the Fiscal Year on
Employer Stock held in the Suspense Account as of the record date
for payment of such dividend, may, in the sole discretion of the
Administrative Committee, be used to make payments on an Exempt
Loan as of the end of the Fiscal Year in which they are paid to
the Plan, or if all or any portion of such dividends are not so
used to make Exempt Loan payments as of the end of such Fiscal
Year, the remainder of such dividends shall be allocated to the
Asset Accounts of Participants, Former Participants, Alternate
Payees and Beneficiaries in accordance with Section 4.5 and may,
in the sole discretion of the Administrative Committee, be
distributed in cash within ninety (90) days after the close of
the Fiscal Year in which such dividends are paid to the Plan to
the Participants, Former Participants, Alternate Payees or
Beneficiaries to whose Asset Accounts the dividends were
allocated under Section 4.5.
(d) Treatment of Distributed Dividends.
Any distribution of dividends under this Section 5.7
shall be made without regard to any other restrictions or
limitations under this Article V, including whether a Participant
or Former Participant is 100% vested in his Accounts. Any
distribution of dividends or use of dividends to make Exempt Loan
payments provided for under this Section 5.7 is intended to
comply with Code Section 404(k).
5.8 Put Option and Right of First Refusal.
(a) Put Option.
(1) If Employer Stock is distributed and it is or
becomes not readily tradable on an established market, then any
Participant, who receives a distribution in Employer Stock shall
have the right (hereinafter referred to as "Put Option") to
require that Giant repurchase the Employer Stock so distributed
at the then value of the Employer Stock as determined in
accordance with Treasury Regulation Section 54.4975-11(d)(5).
The Put Option does not bind the Plan; however, the Trustee may,
in its sole discretion, assume the right and obligations of Giant
under the Put Option at the time such Put Option is exercised.
The Put Option shall only be exercisable during the fifteen (15)
month period immediately following the date of distribution;
provided that if Employer Stock is publicly traded without
restriction when distributed but ceases to be so traded within
fifteen (15) months after distribution, Giant shall inform each
affected distributee of the existence of the put option and of
any additional time to exercise the put option, all as provided
in Treasury Regulation 54.4975-7(b)(11(ii). This Put Option
shall be nonterminable within the meaning of Treasury Regulation
Section 54.4975-(11)(a)(3)(ii).
(2) The amount paid for Employer Stock under the
Put Option shall be paid in substantially equal periodic payments
(not less frequently than annually) over a period beginning not
later than thirty (30) days after the exercise of the Put Option
and not exceeding five (5) years. There shall be adequate
security provided and reasonable interest paid on the unpaid
balance due under this Section 5.8(a)(1).
(b) Right of First Refusal.
(1) If Employer Stock is distributed and it is or
becomes not readily tradable on an established market, and the
Participant elects not to put the Employer Stock pursuant to
Section 5.8(a) such Employer Stock shall then be subject to a
right of first refusal. The right of first refusal shall provide
that, prior to any subsequent transfer, the Employer Stock must
first be offered for purchase in writing to Giant. The right of
first refusal shall lapse fourteen (14) days after the
Participant, or the Participant's Beneficiary, gives written
notice to Giant that an offer by a third party to purchase
Employer Stock has been received. If Giant rejects the offer, or
if the offer lapses, the offer shall then be automatically
extended to the Trustee who will have a period of fourteen (14)
days from the date of Giant rejection or lapse to accept the
offer.
(2) The purchase price of the Employer Stock under
this right of first refusal shall be no less favorable to the
Participant or Participant's Beneficiary than the greater of (A)
the value of the Employer Stock as determined under Treasury
Regulation Section 54.4975-11(d)(5), or (B) the purchase price
and other terms offered by a buyer (which is not Giant or the
Plan) making a good faith offer to purchase the Employer Stock.
5.9 Non-Vested Interests.
(a) Forfeitures.
When a Participant ceases to participate as a result of
termination of employment for any reason other than retirement,
death or disability and receives a distribution of the vested
portion of his or her Accounts under this Article V, such portion
of his Accounts as is not vested shall be forfeited and allocated
in the manner provided in Section 4.3 as of the Valuation Date
which falls in the Fiscal Year in which the distribution occurs,
provided that the distribution occurs no later than the last day
of the second Fiscal Year following the Fiscal Year in which the
Participant terminated employment. A Participant who terminates
employment with no vested interest in his Accounts will be deemed
to have received a distribution in the Fiscal Year in which he
terminated employment for purposes of this Section 5.9(a).
Forfeitures taken later than the last day of the second
Fiscal Year following the Fiscal Year in which the Participant
terminated employment shall be charged first to the Participant's
Asset Account, with any balance of Forfeitures applied next to
the portion of a Participant's Unrestricted Employer Stock
Account and Section 1042 Employer Stock Account (both valued as
of the Valuation Date coincident with or immediately preceding
the date of distribution to the Participant) which holds Employer
Stock which was not purchased with the proceeds of an Exempt
Loan, and last to the portion of the Participant's Unrestricted
Employer Stock Account and the Participant's Section 1042
Employer Stock Account (both valued as of the Valuation Date
coincident with or immediately preceding the date of distribution
to the Participant) which hold Employer Stock which was purchased
with the proceeds of an Exempt Loan; provided that if shares in
more than one class of Employer Stock have been purchased with an
Exempt Loan and allocated to either Stock Account, any Forfeiture
shall be charged against such shares in the same proportion that
such shares are allocated to such Accounts.
(b) Repayment of Prior Distribution.
If a Participant who has terminated employment with the
Employer (l) receives a distribution under this Article V which
is equal to the entire vested and nonforfeitable portion of his
accounts, (2) later returns to the employ of the Employer and,
(3) repays a dollar amount equal to the value of the previous
distribution to him, then upon such repayment a dollar amount
equal to the value previously forfeited from his Accounts under
Section 5.9(a) (unadjusted for any increase or decrease in the
value of the net assets of the Plan since the Valuation Date on
which the forfeiture occurred) shall be restored to the
Participant's Asset Account in full pursuant to Section 4.3,
provided the Participant both resumes employment covered under
the Plan and repays a dollar amount equal to the value of the
distribution he received under this Article V before the earlier
of (A) five (5) years after the date on which the Participant
resumes employment covered under the Plan, or (B) the end of the
Fiscal Year in which the Participant incurs his sixth (6th)
consecutive one (1) year Break in Service.
No repayment is required of any Participant who is deemed
to have received a distribution of his Accounts because he had no
vested interest in his Accounts as of the date he terminated
employment.
(c) Termination of Employment With No Distribution.
If a Participant terminates employment with the Employer
without taking a distribution of the vested portion of his
Accounts before the last day of the second Fiscal Year following
the Fiscal Year in which the Participant terminated employment,
the then vested portion of each of his Accounts shall be treated
as a Special Account for the benefit of the Participant (the
Participant's "Special Account"). Each Special Account shall
continue to share in the gains and losses of the trust in
accordance with the provisions of Article IV, and shall be
distributable to the Participant in accordance with the
provisions of Article V. The Participant's interest in each
Special Account shall at all times be fully vested and
nonforfeitable.
The then nonvested and forfeitable portion of such
Participant's Accounts shall be treated as a Post-Termination
Account for the benefit of the Participant (the Participant's
"Post-Termination Account"). If the Participant is reemployed
prior to the Valuation Date coincident or next following the date
on which the Participant incurs six (6) consecutive one (l) year
Breaks in Service, then his vested interest in each Post-
Termination Account shall be determined in accordance with the
following method. At any relevant time, the Participant's vested
portion of each Post-Termination Account shall equal an amount
("X") determined by the formula:
x = P[AB + (R x D)] - (R x D)
For purposes of applying the formula: P is the vested
percentage at the relevant time; AB is the Post-Termination
Account balance at the relevant time; D is the amount of the
distribution plus the initial value of the Special Account; R is
the ratio of the value of the Post-Termination Account at the
relevant time to the initial value of the Post-Termination
Account; and the relevant time is the time at which, under the
Plan, the vested percentage in the Post-Termination Account
cannot increase. Each Post-Termination Account shall be credited
with (i) earnings and losses of the Trust and (ii) with any
Employer contributions or Forfeitures allocable to the
Participant after his reemployment in accordance with Article IV.
If a Participant should return to employment after the
establishment of his Post-Termination Accounts, the vesting
provisions of this Article V shall apply to each Post-Termination
Account in exactly the same manner as those provisions apply to
the Participant's "Accounts" as described in this Article V.
If the Participant is not reemployed, his Post-Termination
Account shall constitute a Forfeiture as of the Valuation Date
coincident with or next following the date on which the
Participant incurs six (6) consecutive one (1) year Breaks in
Service and shall be allocated among the Accounts of Participants
in accordance with Article IV.
5.10 Participant Loans.
The Committee may authorize a loan to be made by the
Trustee to any Participant based upon the security of a portion
of the balance credited to the Participant's vested Accounts
provided that effective for loans made on or after July 1, 1993,
no loans shall be made until the Participant has been a
Participant in the Plan for at least five (5) years (measured
from the date he first became a Participant), and has
demonstrated that the loan is necessary to enable him to meet any
extraordinary expenses incurred on account of accident, sickness
or disability affecting him or any of his dependents, for the
purpose of providing education for his family or himself, for the
purchase of a residence for, or improvement or addition to the
residence of, the Participant and his family, and that he is
creditworthy based on relevant factors normally considered in any
commercial setting by entities in the business of making loans.
Any loan shall be made against collateral being the
assignment of no more than one-half of the Participant's
nonforfeitable right, title and interest in vested portion of his
Accounts, and such additional collateral as the Committee shall
deem necessary, if any, supported by the Participant's promissory
note payable to the Trustee for a fixed term bearing interest at
a rate comparable to the rate being charged by lenders in the
area of the Employer's place of business for other loans of this
type. Any loan shall be repaid by substantially equal periodic
payments not less frequently than monthly, by payroll deduction
if the Participant is employed by the Employer, for a period of
time not to exceed five (5) years unless the loan is used to
acquire any dwelling unit which within a reasonable period of
time is to be used (determined at the time the loan is made) as a
principal residence of the Participant. In the event the
Participant shall fail to make a monthly payment on the due date
under the repayment period agreed upon, or within a thirty (30)
day grace period thereafter, the entire balance of the loan shall
be immediately due and payable, and the Committee may, in its
sole discretion, direct the Trustee to pursue collection of the
loan by any means generally available to a creditor where a
promissory note is in default, including cancellation of the
promissory note evidencing the loan and debiting the amount of
the outstanding debt against the vested portion of the
Participant's Accounts.
If a Participant is eligible to receive a distribution of
the vested portion of his Accounts prior to the conclusion of the
agreed upon repayment period, he may elect either to repay the
outstanding balance of the loan in full, including accrued
interest prior to such distribution, or to have the full amount
of the outstanding loan and accrued interest debited against the
vested portion of his Asset Account before such distribution
commences.
The aggregate amount of principal at any time outstanding
on a loan to a Participant may be established by the Committee,
but shall not exceed the lesser of:
(a) $50,000, reduced by the excess (if any) of
(i) the highest outstanding balance of loans from
the Plan during the one (1) year period ending
on the day before the date on which the loan is
made, over
(ii) the outstanding balance of loans from the Plan
on the date on which such loan was made, or
(b) fifty percent (50%) of the amount of the then vested
percentage of the Participant's Asset Account as of the date of
the loan.
The Committee shall make loans under uniform and
non-discriminatory loan guidelines which shall be retained with
the Plan document and which establish the terms and conditions on
which loans may be made, including the rate of interest. In
determining the interest rate, the Committee shall take into
consideration interest rates currently being charged in the
communities in which the Employer is located. The Committee
shall not discriminate among Participants in the matter of
interest rates; but loans granted at different times may bear
different interest if, in the opinion of the Committee, the
difference in rates is justified by a change in general economic
conditions. Any such loans must be available to all Participants
who have completed at least five (5) Years of Service for vesting
purposes on a reasonably equivalent basis. No loans shall be
available to any Former Participant, Alternate Payee or
Beneficiary, who is not a party in interest as defined in Section
3(14) of ERISA. The provisions of this Section 5.10 as amended
by the Third Amendment to the Plan shall be effective for any
participant loan made or renewed after October 18, 1989.
ARTICLE VI.
[RESERVED]
[Prior to January 1, 1993 the Plan allowed
Participants to direct the purchase of life insurance in their
Asset Accounts. As of December 31, 1992, no life insurance was
allocated to any Participant's Asset Account. Effective as of
January 1, 1993, Participants are no longer allowed to direct the
purchase of life insurance.]
ARTICLE VII.
THE COMMITTEE
7.1 Members.
Giant shall create a committee (herein referred to as
the "Committee"), which shall consist of two (2) or more members
who shall be appointed by, and shall serve at the pleasure of,
the Board of Directors. A member of the Committee may resign at
any time by delivering a written notice of resignation to the
Board of Directors. The Board of Directors may remove any member
without cause by delivering a certified copy of its resolution of
removal to such member. A resignation or removal shall be
effective on the date specified. The Trustee shall be promptly
notified in writing of the original membership and of any change
in the membership of the Committee, and the Trustee shall be
supplied with specimen signatures of each Committee member.
Vacancies in the membership of the Committee shall be filled
promptly by the Board of Directors.
7.2 Committee Action.
The Committee shall keep minutes of the Committee's
proceedings and all records and documents pertaining to the
Committee's administration of the Plan. Any action of the
Committee shall be taken pursuant to a majority vote, or to the
written consent of a majority, of its members and such action
shall constitute the action of the Committee and be binding the
same as if all members had joined therein. A quorum of the
Committee shall consist of a majority of the members. All
directions by the Committee to the Trustee shall be in writing
signed by a member of the Committee. The Trustee or third
persons dealing with the Committee may conclusively rely upon any
certificate or other written direction signed by a Committee
member which purports to have been duly authorized by the
Committee.
A member of the Committee shall not vote or act upon
any matter which relates solely to such member as a Participant.
If a matter arises affecting one of the members of the Committee
as a Participant and the other members of the Committee are
unable to agree as to the disposition of such matter, the Board
of Directors shall appoint a substitute member of the Committee
in the place and stead of the affected member, for the sole and
only purpose of passing upon and deciding the particular matter.
7.3 Rights and Duties.
The Committee, on behalf of the Participants and
their Beneficiaries, shall be the "Administrator" as defined in
Section 3(16)(A) of ERISA and the "Named Fiduciary" with respect
to control, management and operation of the Plan as defined
Section 402(a)(2) of ERISA. The Committee shall enforce the Plan
on a nondiscriminatory basis in accordance with its terms, and
shall be charged with the general administration of the Plan.
The Committee shall have full discretion to construe and
interpret the terms and provisions of this Plan, which
interpretation or construction shall be final and binding on all
parties.
All powers of investment, management and control of
Plan assets are retained solely by the Trustee pursuant to the
Trust unless such powers are assigned to one or more Investment
Managers pursuant to Section 7.5, to the Committee pursuant to
Section 7.5, or to another "Named Fiduciary." Unless and until
the Board of Directors has delegated investment authority to the
Committee in accordance with Section 7.5, or the Committee has
designated an Investment Manager, the Trustee shall be the "Named
Fiduciary" with respect to investment, management and control of
Plan assets, except as otherwise expressly provided in this Plan
document. Notwithstanding anything in Plan to the contrary, the
Board of Directors shall at all times retain the right and
authority to direct by resolution, as it deems advisable, the
actions of any Plan fiduciary (other than a registered Investment
Manager appointed by the Committee and other than a Plan
participant acting as a Named Fiduciary under Sections 4.8 and
4.9) with respect to the investment, management, and control of
the assets of the Trust. The Committee shall have all powers and
duties necessary to accomplish those purposes, including, but not
by way of limitation, the following:
(a) To determine all questions relating to the
eligibility of Employees to participate;
(b) To determine, compute and certify to the
Trustee the amount and kind of benefits payable to Participants
and their Beneficiaries;
(c) To authorize all disbursements by the Trustee
from the Plan;
(d) If the delegation of investment authority is
made to the Committee by the Board of Directors pursuant to
Section 7.5, and unless an Investment Manager is appointed
pursuant to Section 7.5, the Committee shall direct the Trustee
with respect to any investments of the Plan for which the Board
of Directors has delegated investment authority and with respect
to other matters concerning the Plan corpus, provided, however,
that the Committee's authority to direct investments of Plan
assets shall not be deemed to include the authority or power to
direct investment of the assets of any common or collective trust
fund maintained by the Trustee in which Plan assets are invested;
(e) To make any adjustments in any allocations to
Accounts under the Plan necessary to comply with any provision of
law;
(f) To maintain all the necessary records for the
administration of the Plan other than those maintained by the
Trustee;
(g) To provide for disclosure of all information
and filing or provision of all reports and statements to
Participants, Beneficiaries or governmental bodies as shall be
required by ERISA or the Code, and to submit to the Board of
Directors, at least annually, such information as is necessary to
fully inform the Board of Directors of the discharge by the
Committee or its delegates of responsibilities under the Plan;
(h) To make and publish such rules for the
regulation of the Plan as are not inconsistent with the terms
hereof; and
(i) To establish claims procedures consistent with
regulations of the Secretary of Labor for presentation of claims
by Participants and Beneficiaries for Plan benefits,
consideration of such claims, review of claim denials and
issuance of decisions on review. Such claims procedures at a
minimum shall consist of the following:
(1) The Committee shall notify Employees and,
where appropriate, Beneficiaries of their right to claim benefits
under the claims procedures, shall make forms available for
filing of such claims, and shall provide the name of the person
or persons with whom such claims should be filed.
(2) The Committee shall establish procedures
for action upon claims initially made and the communication of a
decision to the claimant promptly and, in any event, not later
than ninety (90) days after the date of the claim, unless special
circumstances require an extension of time for processing the
claim. If an extension of time is required, written notice of
the extension shall be furnished to the claimant prior to the
expiration of ninety (90) days after the date of the claim and
shall indicate the special circumstances requiring the extension
of time and the date by which the Committee expects to render a
final decision. In no event may the extension exceed a period of
ninety (90) days from the end of the initial ninety (90) day
review period. The claim may be deemed by the claimant to have
been denied for purposes of further review described below in the
event a decision is not furnished to the claimant before the
expiration of the review period, including any extensions. Every
claim for benefits which is denied shall be denied by written
notice setting forth in a manner calculated to be understood by
the claimant (A) the specific reason or reasons for the denial,
(B) specific reference to any provisions of this Plan on which
denial is based, (C) description of any additional material or
information necessary for the claimant to perfect the claim with
an explanation of why such material or information is necessary,
and (D) an explanation of the procedure for further reviewing the
denial of the claim under the Plan.
(3) The Committee shall establish a procedure
for review of claim denials, such review to be undertaken by the
Committee. The review given after denial of any claim shall be a
full and fair review with the claimant or the claimant's duly
authorized representative having sixty (60) days after receipt of
denial of the claim to request such review, having the right to
review all pertinent documents and the right to submit issues and
comments in writing.
(4) The Committee shall establish a procedure
for issuance of a decision by the Committee not later than sixty
(60) days after receipt of a request for review from a claimant
unless special circumstances, such as the need to hold a hearing,
require a longer period of time, in which case a decision shall
be rendered as soon as possible but not later than one hundred
twenty (120) days after receipt of the claimant's request for
review. The decision on review shall be in writing and shall
include specific reasons for the decision written in a manner
calculated to be understood by the claimant with specific
reference to any provisions of this Plan on which the decision is
based.
7.4 Procedure for Establishing Funding Policy - Transmittal of
Information.
In order to enable the Committee to establish a
funding policy and to perform its other functions under the Plan,
the Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of all
Participants, their employment, their retirement, death, or the
cause for termination of employment and such other pertinent
facts as may be required. The Committee shall advise the Trustee
and Investment Manager, as appropriate, of such of the foregoing
facts as may be pertinent to the duties of the Trustee and any
Investment Manager under the Plan, including the short- and
long-run financial needs of the Plan (e.g., the short-run need to
have liquidity to pay benefits and debt service under the Plan).
7.5 Delegation of Investment Responsibility.
The Board of Directors by resolution, may delegate
investment authority to the Committee or any individual member or
members of the Committee. The Committee (regardless of whether
investment authority has been delegated to it) may delegate to
one or more Investment Managers the responsibility and authority
to invest the assets of the Trust. Such delegation by the
Committee to an Investment Manager shall be in writing. If an
Investment Manager is designated pursuant to this Section 7.5, or
if the Board of Directors delegates investment authority to the
Committee or any individual member or members of the Committee,
the named Investment Manager, the Committee or member(s) of the
Committee shall accept the fiduciary responsibility in writing
and shall acknowledge in writing that it is a fiduciary with
respect to investment of Trust assets. A copy of the delegation,
acceptance and resolution, shall be provided to the Trustee by
the Committee and the Trustee is authorized and entitled to rely
upon this information so provided. Until the receipt of such
delegation, acceptance and resolution, the Trustee shall remain
the "Named Fiduciary" with respect to investment, management and
control of the Trust assets, except as otherwise expressly
provided in this Plan document. If an Investment Manager is
designated pursuant to this Section 7.5, or if the Board of
Directors delegates investment authority to the Committee or any
individual member or members of the Committee, the Investment
Manager, the Committee, or the Committee member(s), as the case
may be, and not the Trustee, shall be the "Named Fiduciary" with
respect to investment, management and control of the Trust
assets.
7.6 Delegation of Non-Investment Fiduciary Responsibility.
The Committee may, with respect to the Plan, delegate
its administrative responsibilities other than those described in
Section 7.5, including its responsibility as administrator to any
other person. Such delegation shall be accomplished by a written
instrument executed by a member of the Committee specifying
responsibilities delegated and the fiduciary responsibilities
allocated to such delegate. The allocation of such
responsibilities shall be effective upon the date specified in
the delegation, subject to written acceptance by the delegate.
Any such delegation shall be communicated to participants under
such Plan or to beneficiaries where required by ERISA in the same
manner used for transmission to such persons of the summary plan
description described in Section 102(a)(1) of ERISA with respect
to the Plan. Any delegation of responsibilities under this
Section 7.6 shall provide for reports, no less often than
annually, by such delegate to the Committee of such information
necessary to fully inform the Committee of the status and
operation of the Plan and of the delegate's discharge of
responsibilities delegated.
7.7 Duty of Care.
In the exercise of its powers and duties as
administrator and fiduciary with respect to the control and
management of the Plan, the Committee shall exercise such powers
and duties solely in the interest of the Participants and
Beneficiaries of the Plan for the exclusive purpose of providing
benefits to Participants and their Beneficiaries and shall use
the care, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
7.8 Compensation, Indemnity and Liability.
The members of the Committee shall serve without
compensation for their services hereunder. The Committee and any
delegates appointed pursuant to Sections 7.5 or 7.6 shall be
bonded to the extent required by regulations promulgated by the
Secretary of Labor. The expense of any such bond and all
expenses of the Committee or such delegates shall be paid by the
Employer and the Employer shall furnish the Committee or such
delegates with all clerical or other assistance necessary in the
performance of their duties. The Committee is authorized at the
expense of the Employer to employ such legal counsel (which may
be counsel to the Employer) and advisers as it may deem advisable
to assist in the performance of its duties hereunder. No
expenses or fees of the Committee, its delegates appointed
pursuant to Section 7.6, the Board of Directors, or the Employer
for the administration of the Plan and services in relation
thereto shall be paid from Trust assets.
Each entity which is or has been encompassed within
the meaning of the term "Employer" as defined in Article I shall
provide a defense, indemnify and hold harmless the Board of
Directors, the Trustees, the Committee, and each current or
former member thereof, and any delegate appointed by the
Committee pursuant to Sections 7.5 or 7.6, against any and all
claims, actions, causes of action, expenses, liabilities or
penalties, (including, without limitation, claims, actions,
causes of action, expenses, liabilities or penalties arising out
of their alleged negligence) and including legal fees and costs
incurred to defend against such matter, arising out of their
discharge of responsibilities under or incident to the Plan,
excepting only claims, actions, causes of action, expenses,
liabilities or penalties arising out of willful misconduct,
arising during a period when an entity which is or has been
encompassed within the meaning of the term "Employer" as defined
in Article I was not encompassed within the meaning of the term
"Employer," and claims, actions, causes of action, expenses,
liabilities or penalties asserted against them by the Employer.
This indemnity shall not preclude such further indemnities as may
be available under insurance purchased by the Employer or
provided by the Employer under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. Payments
with respect to any indemnity and payment of expenses or fees
under this Section 7.8 shall be made only from assets of the
Employer and shall not be made directly or indirectly from Trust
assets.
ARTICLE VIII
THE TRUSTEE
8.1 Appointment of Trustee.
The Trustee or Trustees shall be appointed by the Board of
Directors. If there shall be more than one Trustee, the Trustees
shall jointly manage and control the assets of the Plan unless
the Board of Directors shall allocate specific responsibilities,
obligations and duties among the Trustees. If there shall be
more than one Trustee, the term "the Trustee" shall collectively
refer to all trustees. The initial Trustee shall be the trustee
executing this Agreement.
8.2 Resignation and Removal.
The Trustee may be removed by the Board of Directors by
delivery of written notice of such action to the Trustee. The
Trustee may resign by delivery of written notice to the Board of
Directors. Such resignation or removal shall be effective upon
the earlier of thirty (30) days after delivery or upon thirty
(30) days after acceptance by a successor trustee of its
appointment. Within sixty (60) days after such removal or
resignation, the retiring Trustee shall file with the Board of
Directors and the Committee a written account of its acts from
the date of its last previous annual account to the date of the
Trustee's removal or resignation. The Trustee shall have the
right to a settlement of its account, which may be made at the
option of the Trustee, either (1) by judicial settlement in an
action instituted by the Trustee in a court of competent
jurisdiction or (2) by agreement of settlement between the
Trustee, the Committee and the Board of Directors.
8.3 Successor Trustee.
Upon removal or resignation of the Trustee, the Board of
Directors shall designate a successor trustee to act hereunder,
which shall have the same powers and duties as those conferred
upon the Trustee. Upon such designation, and upon the written
acceptance of the successor trustee, the Trustee shall assign,
transfer and pay over to such successor trustee the assets then
constituting the Plan, provided, however, that the Trustee is
authorized to reserve such sum of money (and for that purpose to
liquidate such property as may be necessary to produce such sum)
as may seem advisable for payment of all proper charges against
the Plan including expenses in connection with such resignation
or removal, and any balance of such reserve remaining after the
payment of such charges shall be paid over to the successor
trustee. No successor Trustee shall be required to inquire into
the trusteeship of its predecessor and may conclusively presume
that the assets turned over to it by the predecessor constitute
the entire Plan. No successor Trustee shall be liable to any
person for any action, or failure to act, of any predecessor
trustee.
Should the Board of Directors fail to appoint a successor
trustee or should a successor trustee appointed by the Board of
Directors fail to accept such appointment within thirty (30) days
after delivery of notice of a Trustee's resignation or removal,
the Trustee may, at the expense of the Trust, apply to a court of
competent jurisdiction for the appointment of a successor
trustee. In the alternative, any member of the Committee who
executes a written acceptance of appointment as a successor
trustee may become a successor trustee.
8.4 General Duties of Trustee.
The Trustee shall hold all property received by it
hereunder, which, together with the income and gains therefrom
and additions thereto, shall constitute the Plan assets. The
Trustee shall manage, invest, and reinvest the Plan assets,
collect the income thereof, and make payments of benefits to
Participant and of reasonable expenses incurred in administering
the Plan therefrom, all as herein provided, and subject to any
proper direction of the Board of Directors, the Committee, or any
other "Named Fiduciary" under the terms of the Plan. The Trustee
shall be responsible only for the property actually received by
it hereunder. It shall have no duty or authority to compute any
amount to be paid to it by the Employer or to bring any action or
proceeding to enforce the collection from the Employer of any
contribution to the Trust.
The Trustee shall discharge its duties solely in the
interest of the Participants, Former Participants, and
Beneficiaries and...
(1) for the exclusive purpose of providing benefits to
Participants, Former Participants, and their Beneficiaries and
defraying reasonable expenses of administering the Plan;
(2) with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims;
(3) except as to assets of the Plan under the investment
responsibility of an Investment Manager or the Committee and
except as to investments in Employer Stock, by diversifying the
investments of the Plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not
to do so; and
(4) in accordance with the documents and instruments
governing the Plan insofar as such documents and instruments are
consistent with the provisions of ERISA.
8.5 Accounts and Records.
(a) The Trustee shall keep a full, accurate and detailed
record of all transactions of the Plan which the Committee shall
have the right to examine at any time during the Trustee's
regular business hours.
The Committee shall promptly notify the Trustee in
writing of approval or disapproval of the account. The
Committee's failure to disapprove the account within ninety (90)
days after receipt shall be considered an approval.
(b) In the event of a tender or exchange offer subject to
Section 4.9 and in the event the Committee is composed of
individuals who are employees, officers or directors of the
Employer, the rights provided to the Committee pursuant to
Section 8.5(a) shall be delegated by Giant to an unrelated
nominee to the extent and for the time necessary to ensure, in
the Trustee's judgment, the confidentiality of Participants'
instructions made pursuant to Section 4.9; provided, however,
that, to the extent necessary for the operation of the Plan, such
instructions may be relayed by the Trustee to a recordkeeper,
auditor or other person (i) is not an employee, officer or
director of the Employer and (ii) agrees not to divulge such
directions to any other person, including employees, officers and
directors of the Employer.
8.6 Compensation and Expenses.
The Trustee shall receive each year as compensation for its
services, such amount as it and the Committee agree to be
reasonable; except that no compensation shall be paid to a
Trustee who is a full-time Employee of the Employer. In
addition, the Trustee shall be entitled to reimbursement for all
reasonable expenses incurred by it in the performance of its
duties hereunder, including reasonable fees for legal services
rendered to the Trustee (whether in connection with any
litigation or otherwise), reasonable fees for the employment of
agents, and all other proper charges and disbursements. Such
compensation and expenses shall be a charge upon the Trust and
shall be withdrawn from the Plan, unless the amount of any such
compensation and expenses shall be separately paid by the
Employer at the option of the Committee. In addition to the
provisions of this Article VIII, the Trustee shall be entitled
and subject to the same rights and obligations to which a member
of the Committee is entitled and subject under the provisions of
Section 7.8.
8.7 Employment of Agents.
The Trustee may employ such agents, including custodians
and counsel, as may be reasonable necessary to carry out the
terms of the Trust. The Trustee may from time to time consult
with counsel, who may be counsel to the Employer, and shall be
protected to the extent the law permits in acting upon such
advice of counsel as respects legal questions.
8.8 Third Party May Rely.
A third party dealing with the Trustee shall not be
required to make any inquiry as to whether the Trustee is
authorized to take or omit any action, or to follow the
application by the Trustee of any money or property which may be
paid or delivered to the Trustee.
8.9 Notice Must be in Writing and Received.
The Trustee shall not be bound by any certificate, notice,
resolution, order, information or other communication unless and
until it shall have been received in writing.
8.10 Valuation.
As of each Valuation Date, the assets of the Trust shall be
valued at their fair market values, as determined by the Trustee
based upon such sources of information as it may deem reliable.
The Committee shall instruct the Trustee as to the value of
assets for which fair market value is not readily obtainable by
the Trustee. If the Committee fails to provide such values, the
Trustee may take whatever action it deems reasonable, including
the employment of attorneys, appraisers or other professionals,
the expense of which will be an expense of the administration of
the Trust.
ARTICLE IX.
POWERS OF THE TRUSTEE
9.1 Investment of Trust Fund.
The Trustee shall invest the Trust Fund primarily in
Employer Stock. The Trustee may purchase Employer Stock. In the
case of a purchase of Employer Stock in a transaction between the
Plan and a disqualified person, as defined under Code Section
4975(e), the value of the Employer Stock purchased must be
determined as provided in Section 1.16 as of the date of the
transaction. The Trustee may also incur debt from time to time
to finance the acquisition of Employer Stock by the Trust Fund.
The Trustee may also invest the assets of the Plan other than
Employer Stock in cash, cash equivalents, certificates of
deposit, money market funds, guaranteed investment contracts,
short term securities, bonds and other investments desirable for
the Trust as provided in Section 9.3. The Trustee's investment
of the Trust Fund shall be subject to the direction of the Board
of Directors, the Committee or an Investment Manager as provided
in Section 7.5.
9.2 Exempt Loans.
(a) The Trustee, at the direction of the Committee, may
incur loans on behalf of the Trust including Exempt Loans. An
Exempt Loan must be used primarily for the benefit of
Participants and their Beneficiaries. The interest rate for any
Exempt Loan and the price of Employer Stock to be acquired with
the proceeds of the Exempt Loan should not be such that the Plan
assets might be drained off. An Exempt Loan must be for a
specific period and may not be payable at the demand of any
person, except in the case of default. In the event of default
upon an Exempt Loan, the value of plan assets transferred in
satisfaction of the Exempt Loan must not exceed the amount of
default; provided that if the lender is a disqualified person
within the meaning of Code Section 4975(e), an Exempt Loan must
provide for a transfer of plan assets upon default only upon and
to the extent of the failure of the Plan to meet the payment
schedule of the Exempt Loan.
The terms of the Exempt Loan must, at the time the Exempt
Loan is made, be at least as favorable to the Plan as the terms
of a comparable loan resulting from arms-length negotiations
between independent parties. The proceeds of each Exempt Loan
shall be used within a reasonable time after the Exempt Loan is
obtained only to purchase Employer Stock, to repay the Exempt
Loan, or to repay any prior Exempt Loan.
Any collateral provided by the Plan for any Exempt Loan
shall be limited to shares of Employer Stock acquired with the
proceeds of the Exempt Loan and shares of Employer Stock that
were used as collateral on a prior Exempt Loan which was repaid
with the proceeds of the current loan. No person entitled to
payment under an Exempt Loan made pursuant to this Section shall
have recourse against any Plan assets other than the Employer
Stock used as collateral for the Exempt Loan, employer
contributions (other than contributions of Employer Stock) that
are available to meet obligations under the loan and earnings
attributable to such collateral and the investment of
such Employer contributions. Employer contributions made with
respect to any Fiscal Year during which the Exempt Loan remains
unpaid, and earnings on such contributions, shall be deemed
available to meet obligations under the Exempt Loan.
(b) Any Employer Stock pledged as collateral for an
Exempt Loan shall be placed in a Suspense Account. The Committee
shall separately account for Employer Stock allocated to the
Suspense Account which is Unrestricted Employer Stock and for
Employer Stock allocated to the Suspense Account which is Section
1042 Employer Stock. Employer Stock shall be released from the
Suspense Account in the proportion that the principal paid on the
Exempt Loan for the Fiscal Year bears to the total principal
amount due prior to such principal payments, with any Section
1042 Employer Stock purchased from an Ineligible Participant who
is a more than twenty-five percent (25%) owner as defined in the
"Ineligible Participant" definition in Section 1.26 and then held
in the Suspense Account to be allocated first. Shares of
Employer Stock so released shall then be allocated to the
accounts of Participants in accordance with Article IV.
Notwithstanding the foregoing provision to the contrary, in
the event that any Exempt Loan provides for the payment of
principal and interest at a cumulative rate less rapid than ten
(10) years under standard loan amortization tables, or in the
event that any Exempt Loan is renewed or extended for a period in
excess of ten (10) years or replaced by an Exempt Loan the term
of which extends beyond ten (10) years from the date of the
original Exempt Loan, Employer Stock must be released from the
Suspense Account in the proportion that the principal and
interest paid on the Exempt Loan for the Fiscal Year bears to the
aggregate principal and interest paid for the current Fiscal Year
and each Fiscal Year thereafter, as provided in Treasury
Regulation 54.4975-7(b)(8)(i).
(c) Payments of principal and interest on any Exempt Loan
during any Fiscal Year may not exceed an amount equal to the sum
of (1) Employer contributions (other than contributions of
Employer Stock), (2) earnings from the investment of such
contributions, (3) earnings attributable to Employer Stock
purchased with the Exempt Loan, (4) the proceeds of a subsequent
Exempt Loan made to repay an Exempt Loan, and (5) the proceeds of
the sale of any Employer Stock pledged as collateral for the
Exempt Loan received during the current Fiscal Year or any Fiscal
Year after the Fiscal Year ending on December 31, 1986, less
payments of principal and interest made in any Fiscal Year after
the Fiscal Year ending on December 31, 1986; provided that the
proceeds from the sale of any Employer Stock pledged as
collateral for an Exempt Loan may be used to pay principal and
interest on an Exempt Loan only if such payment is for the
primary benefit of Participants within the meaning of Treasury
Regulation Section 54.4975-7(b)(i). The contributions and
earnings available to pay the Exempt Loan must be accounted for
separately by the Committee until the Exempt Loan is repaid.
(d) The Trustee, after consultation with and at the
direction of the Administrative Committee, is authorized and
empowered to execute and deliver any and all documents necessary
to obtain an Exempt Loan including, but not limited to loan
agreements, promissory notes, pledge agreements or security
agreements.
9.3 Permitted Investment Acts.
The Trustee shall be authorized and empowered, in its
discretion (except as limited by the provisions of Sections 4.8,
4.9, 7.5 and 9.1), to exercise any and all of the following
rights, powers and privileges with respect to any cash,
securities, or other properties held by the Trustee in the Plan
in addition to the rights, power and privileges enumerated under
Section 9.2:
(a) To purchase, hold, invest and reinvest any such
property, together with the income therefrom, in any property,
including investments in common or collective investment trust
then qualified for tax exemption under Code Section 401(a) or
amendments thereto, which is then maintained by the Trustee,
co-Trustee, agent for the Trustee, or by an investment manager
duly appointed under Section 7.5. The provisions of the document
governing such common or collective investment trusts, as amended
from time to time, shall govern any investment therein, and are
hereby made a part of this Trust. To sell any such property at
such time and upon such terms and conditions as the Trustee deems
appropriate. Such sales may be public or private, for cash or
credit, or partly for cash and partly for credit, and may be made
without notice or advertisement of any kind.
(b) To exchange, mortgage, or lease any such property and
to convey, transfer or dispose of any such property on such terms
and conditions as the Trustee deems appropriate.
(c) To grant options for the sale, transfer, exchange or
disposal of any such property.
(d) Subject to the requirements of Section 4.8, to
exercise all voting rights pertaining to any securities; and to
consent to or request any action on the part of the issuer of any
such securities; and to give general or special proxies or powers
of attorney with or without power of substitution.
(e) Subject to the requirements of Sections 4.8 and 4.9,
to consent to or participate in amalgamations, reorganizations,
recapitalizations, consolidations, mergers, liquidations, or
similar transactions with respect to any securities, and to
accept and to hold any other securities issued in connection
therewith.
(f) Subject to the requirements of Sections 4.8 and 4.9,
to exercise any subscription rights or conversion privileges with
respect to any securities held in the Plan.
(g) To collect and receive any and all money and other
property of whatsoever kind or nature due or owing or belonging
to the Plan and to give full discharge and acquittance therefor;
and to extend the time of payment of any obligations at any time
owing to the Plan, as long as such extension is for a reasonable
period, and continues reasonable interest.
(h) To cause any securities or other property to be
registered in, or transferred to, the individual name of the
Trustee or in the name of one or more of its nominees, or one or
more nominees of any system for the centralized handling of
securities, or it may retain them unregistered and in form
permitting transferability by delivery, but the books and records
of the Plan shall at all times show that all such investments are
part of the Plan.
(i) To organize under the laws of any State a corporation
for the purpose of acquiring and holding title to any property
which it is authorized to acquire under this Plan and to exercise
with respect thereto any or all of the powers set forth in this
Plan.
(j) To manage, operate, repair, improve, develop,
preserve, mortgage or lease for any period any real property or
any oil, mineral or gas properties, royalties, interest or rights
held by it directly or through any corporation, either alone or
by joining with others, using other Trust assets for any of such
purposes; to modify, extend, renew, waive or otherwise adjust any
or all of the provisions of any such mortgage or lease; and to
make provisions for amortization of the investment in or
depreciation of the value of such property.
(k) To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan; to
commence or defend suits or legal proceedings whenever, in its
judgement, any interest of the Trust requires it; and to
represent the Plan in all suits or legal proceedings in any court
of law or equity or before any other body or tribunal, insofar as
such suits or proceedings relate to any property; forming part of
the Plan or to the administration of the Plan.
(l) Subject to the requirements of Section 9.2, to borrow
money from others for the purposes of the Plan.
(m) To loan money to a Participant pursuant to Section
5.10.
(n) Generally to do all acts, whether or not expressly
authorized, which the Trustee deems necessary or desirable, but
acting at all times according to the principles of prudence
expressed in Section 8.4.
(o) To purchase and hold "Qualifying Employer Real
Property."
(p) To deposit or invest all or any part of the Trust
Fund in savings accounts or certificates of deposit which bear a
reasonable interest rate in a bank having a capital surplus and
accumulated profits of at least $500,000,000, including the
commercial department of the Trustee, if such bank is supervised
by the United States or any State.
9.4 Prohibited Investment Acts.
The Trustee shall not engage in any prohibited
transactions. No investment shall be made or directed which
would cause (a) a loss of qualification of the Plan or the Trust
under the provisions of the Code; (b) a loss of the deductibility
of the Employer's contribution to the Trust under the provisions
of the Code; (c) a Participant to become liable for income tax
under the provisions of the Code upon any contributions made by
the Employer prior to the distribution thereof to the
Participant; or (d) a loss of the income tax exemption of the
Trust under the provisions of the Code.
9.5 Diversification.
Any Participant or Former Participant who has attained age
55 and completed 10 years of participation in the Plan shall have
the right to make an election to direct the investment of the
Qualified Employer stock, if any, allocated to his Unrestricted
Employer Stock Account and his Section 1042 Employer Stock
Account, as provided in this Section 9.5. Such a Participant or
Former Participant may elect within ninety (90) days after the
close of each Fiscal Year which falls within his Qualified
Election Period to diversify 25% of the number of shares of
Qualified Employer Stock allocated to his Unrestricted Employer
Stock Account and Section 1042 Employer Account, if any, less the
number of shares of Qualified Employer Stock over which such
Participant or Former Participant has previously had an election
under this Section 9.5 (whether or not actually distributed)
rounded to the nearest whole integer, by directing the Committee
to distribute the portion of his Stock Accounts covered by the
election to him in a manner consistent with the provisions of
Section 5.2 (treating the Participant or Former Participant as
eligible for installment distributions) within one hundred and
eighty (180) days after the end of such Fiscal Year. In the case
of the last Fiscal Year of a Qualified Election Period, 50% shall
be substituted for 25%.
For purposes of this Section 9.5, the term "Qualified
Employer Stock" shall mean shares of Employer Stock acquired by
the Plan in any Fiscal Year beginning on or after January 1, 1987
and the term "Qualified Election Period" shall mean the six (6)
Fiscal Year period beginning with the first Fiscal Year after the
Participant or Former Participant has attained age 55 and
completed 10 years of participation in the Plan. No Alternate
Payee or Beneficiary shall be permitted to make the elections
provided under this Section 9.5.
ARTICLE X.
PORTABILITY AND ROLL-OVER
10.1 Portability.
(a) Direct Rollovers
If a Distributee shall be entitled to receive a
distribution under this Plan on or after January 1, 1993, the
Distributee may elect in accordance with the terms of Section, at
the time and in the manner prescribed by the Administrative
Committee in accordance with any regulations promulgated by the
Internal Revenue Service, to have an Eligible Rollover
Distribution as defined under this Section paid in a Direct
Rollover to a single Eligible Retirement Plan specified by the
Distributee. A Distributee may only elect one Eligible
Retirement Plan for any distribution.
(b) Definitions.
For purposes of this Section 10.1, the following
terms shall have the following meanings:
(1) "Distributee" shall mean any Participant, any
Former Participant, any Alternate Payee who was the spouse of a
Participant or Former Participant, and any Beneficiary who was
the spouse of a deceased Participant or Former Participant.
(2) "Direct Rollover" shall mean a payment by the
Plan directly to an Eligible Retirement Plan specified by a
Distributee.
(3) "Eligible Retirement Plan" shall mean an
individual retirement account as described under Code Section
408(a), an individual retirement annuity as described under Code
Section 408(b), an annuity plan as described under Code Section
403(a), or a qualified trust described in Code Section 401(a)
that accepts a Distributee's Eligible Rollover Distribution;
provided that if the Distributee was the surviving spouse of a
Participant or Former Participant only an individual retirement
account or an individual retirement annuity may constitute an
Eligible Retirement Plan.
(4) "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the credit
of the Distributee, except (a) any distribution that is one of a
series of substantially equal installment payments (not less
frequently than annually) made over the life expectancy of the
Distributee; (b) the portion of any distribution which is a
required minimum distribution under Code Section 401(a)(9); (c)
any distribution of less than $200 if such distribution
represents the total amount to be distributed to the Distributee
during the calendar year; (d) if a Distributee elects to receive
a portion of any distribution in cash or in Employer Stock or in
cash and Employer Stock and to request a Direct Rollover of the
balance of his distribution, any portion of the distribution
which is valued at $500 or less; (e) the portion of any
distribution which is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to Employer Stock); or (f) the portion of any
distribution which is a deemed distribution of a participant loan
under Section 5.10.
10.2 Receipt of Direct Rollovers.
The Plan will not accept assets in a direct or
indirect rollover from any plan qualified under Code Section
40l(a) or from any individual retirement account under Code
Section 408(a).
ARTICLE XI.
AMENDMENT AND TERMINATION
11.1 Amendments.
Giant shall have the right at any time and from time to
time to amend, in whole or in part, all or any of the provisions
of this Plan. Any amendment shall be effective in the manner and
at the time therein set forth and the Employer and the Trustee
shall be bound thereby; provided, however:
(a) No amendments shall be effective which shall attempt
to cause any of the assets of the Plan to be used for or diverted
to purposes other than for the exclusive benefit of Participants
or their Beneficiaries, except that such changes, if any, as may
be required to permit the Plan to meet the applicable
requirements of the Code or ERISA may be made;
(b) No amendment shall have any retroactive effect so as
to deprive any Participant of any benefit already vested or any
optional form of distribution of any benefit, except that such
changes, if any, as may be required to permit the Plan to meet
the applicable requirements of the Code or ERISA may be made;
(c) No amendment shall create or effect any
discrimination in favor of Participants who are officers,
shareholders, or highly compensated employees;
(d) No amendment shall increase the duties or liabilities
of the Trustee without its written consent;
(e) No amendment to the Vesting Schedule shall deprive a
Participant of his or her nonforfeitable rights to benefits
accrued to the date of the amendment. Further, effective for
Fiscal Years beginning on or after January 1, 1989, if the
Vesting Schedule of the Plan is amended each Participant with at
least three (3) Years of Service with the Employer may elect,
within a reasonable period after the adoption of the amendment,
to have his or her nonforfeitable percentage computed under the
Plan without regard to such amendment. The period during which
the election may be made shall commence with the date the
amendment is adopted and shall end on the later of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective;
or
(3) 60 days after the Participant is issued written
notice of the amendment by the Employer or plan
administrator; and
(f) Effective beginning on or after September 1, 1993, to
the extent necessary to comply with Rule 16b-3(c)(2)(ii)(B) as
promulgated under the Securities Exchange Act of 1934, as amended
from time to time, no amendment to the provisions of the Plan
governing the eligibility of a Participant to receive an
allocation of Employer Stock, the vested interest of a
Participant in Employer Stock, the allocation of Employer Stock
to a Participant, the timing or right of a Participant to receive
a distribution of Employer Stock, or any other provision of the
Plan included within the meaning of Rule 16b-3(c)(2)(ii)(B), may
be made more frequently than once every six (6) months, unless
such amendment is necessary to permit the Plan to meet the
applicable requirements of the Code or ERISA.
11.2 Discontinuance of Plan.
It is the Employer's expectation that this Plan and the
payment of contributions hereunder will be continued
indefinitely, and the Trust related to this Plan is irrevocable,
but continuance of the Plan by the Employer is not assumed as a
contractual obligation, and the Employer reserves the right at
any time to reduce, temporarily suspend, or discontinue
contributions hereunder. In the event of the Employer's complete
discontinuance of contributions, the entire interest of each
Participant shall vest immediately and become non-forfeitable.
The Employer may terminate this Plan at any time upon
written notice to the Trustee. Upon termination or partial
termination of the Plan, the entire interest of each of the
Participants shall immediately vest and become non-forfeitable.
The Trustee shall thereafter, upon direction of the Committee,
distribute to the Participants the amount in such Participants'
accounts in the same manner as set forth in Article V, subject,
where appropriate, to Section 403(d)(1) of ERISA and regulations
of the Secretary of Labor thereunder as may affect allocation of
assets upon termination of the Plan.
Notwithstanding any provision of Article XI to the
contrary, upon the termination of the Plan, the Trustee shall not
be obligated to distribute assets from the Plan, until the Plan
has received a favorable determination from the Internal Revenue
Service that the Plan termination has not adversely affected the
qualification of the Plan under Section 401, or until the
Employer agrees to indemnify the Trustee against any income tax
liability incurred by the Trust as a consequence of an adverse
determination, provided the Trustee agrees to accept the
Employer's indemnification.
11.3 Merger or Consolidation.
This Plan shall not be merged or consolidated with, nor
shall its assets or liabilities be transferred to, any other plan
unless each Participant in this Plan (if the Plan then
terminated) would receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater
than the benefit such Participants, respectively, would have been
entitled to receive immediately before the merger, consolidation,
or transfer (if this Plan had been terminated). Where the
foregoing requirement is satisfied this Plan and its related
Trust may be merged or consolidated with another qualified plan
and trust.
11.4 Failure to Contribute.
Any failure by the Employer to contribute to the Trust in
any year when no contribution is required under this Plan shall
not of itself be a discontinuance of contributions under this
Plan.
ARTICLE XII.
MISCELLANEOUS
12.1 Contributions Not Recoverable.
Except where contributions are required to be
returned to the Employer by the provisions of this Plan as
permitted or required by ERISA or the Code, it shall be
impossible for any part of the contributions made under this Plan
or income thereon to be used for, or diverted to, purposes other
than the exclusive benefit of Participants or their
Beneficiaries; provided, however, that notwithstanding this or
any other provision of this Agreement each and every Employer
contribution to the Trust is expressly conditioned upon its
deductibility under Section 404 of the Code. Subject to the
requirements of Section 403(c) of ERISA, in the event the
Employer shall make an excessive contribution to the Trust under
a mistake of fact as that term is used in Section 403(c)(2)(A) of
ERISA, or in the event the deductibility of any Employer
contribution is disallowed, the Employer shall be entitled to
recover, and the Participants under the Plan shall have no
interest in (a) any contributions made under this Plan by mistake
of fact, so long as the contribution is returned within one (1)
year after payment, and (b) any contributions for which a
deduction is disallowed under Section 404 of the Code, so long as
the contributions are returned to the Employer within one (1)
year following such disallowance or as otherwise permitted or
required under the Code or ERISA; provided that the amounts to be
returned to the Employer shall not be increased by any gains
attributable to such contributions but shall be decreased by any
losses attributable thereto.
12.2 Limitations on Participants' Rights.
Participation in this Plan shall not give any Employee the
right to be retained as an Employee of the Employer or any right
or interest under the Plan and Trust other than as herein
provided. The Employer reserves the right to dismiss any
Employee without any liability for any claim either against the
Trustee, the Plan, except to the extent provided in the Plan, or
against the Employer. All benefits payable under the Plan shall
be provided solely from the assets of the Plan.
12.3 Receipt and Release.
Any payment to any Participant, Former Participant,
Alternate Payee, or Beneficiary in accordance with the provisions
of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Trustee, the Committee and the
Employer, and the Trustee may require such Participant, Former
Participant, Alternate Payee, or Beneficiary, as a condition
precedent to such payment, to execute a receipt and release to
such effect.
12.4 Assignment and Alienation.
Except with respect to unpaid loans owing to the Trust by a
Participant and except as provided in Section 12.5, none of the
benefits, payments, proceeds or claims of any Participant, Former
Participant, Alternate Payee, or Beneficiary shall be subject to
any claim of any creditor and, in particular, the same shall not
be subject to attachment or garnishment or other legal process by
any creditor, nor shall any such Participant, Former Participant,
Alternate Payee, or Beneficiary have any right to alienate,
anticipate, commute, pledge, encumber or assign any of
the benefits or payments or proceeds which such Participant,
Former Participant, Alternate Payee, or Beneficiary may expect to
receive, contingently or otherwise, under this Plan. The corpus
or income of the Plan may not be diverted for purposes other than
the exclusive benefit of Participants and their Beneficiaries.
12.5 Qualified Domestic Relations Orders.
The Committee shall from time to time adopt written
procedures for determining the qualified status, under Section
414(p) of the Internal Revenue Code, of any domestic relations
order served upon the Plan and for administering distributions
under any domestic relations order which the Committee determines
to be a qualified domestic relations order (a "QDRO") under Code
Section 414(p). The distribution of benefits to an Alternate
Payee pursuant to a qualified domestic relations order and in
accordance with the terms of the Plan shall not constitute a
prohibited alienation of benefits under the Plan.
12.6 Governing Law.
This Plan and its related Trust shall be construed,
administered, and governed in all respects under applicable
federal law, and to the extent that federal law is inapplicable,
under the laws of the State of Arizona; provided, however, that
any provisions of the Plan and its related Trust which pertain to
the rights of shareholders, such as voting, tender or exchange
rights, shall be construed, administered and governed under the
laws of the State of Delaware, and further provided that if any
provision is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with this
Plan being a qualified plan within the meaning of Section 401 of
the Code. If any provision of this instrument shall be held by a
court of competent jurisdiction to be invalid or unenforceable,
the remaining provisions hereof shall continue to be fully
effective.
12.7 Headings, Etc., Not Part of Agreement.
Headings and subheadings in this Plan are inserted for
convenience of reference only and are not to be considered in the
construction of the provisions hereof.
12.8 Successors and Assigns.
This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and
assigns.
12.9 Agent Designated for Service of Process.
The designated person upon whom service of process may be
made in any action involving the Plan, including any domestic
relations order, shall be C.T. Corporation.
12.10 Benefits Payable to Incompetents.
Each individual receiving benefit payments under the
Plan shall be conclusively presumed to have been legally
competent until the date upon which the Committee shall have
received written notice in the form and manner acceptable to it
that such individual is an incompetent for whom a guardian or
other person legally vested with his case shall have been
appointed. From and after the date of receipt of such notice by
the Committee, all future benefit payments to which such
individual is entitled under the Plan shall be payable to his
guardian or other person legally vested with his care, until such
time as the Committee shall be furnished with evidence
satisfactory to it that such individual is legally competent.
12.11 Pronouns.
When necessary to the meaning hereof, either the masculine
or the neuter pronoun shall be deemed to include the masculine,
the feminine, and the neuter, and the singular shall be deemed to
include the plural.
12.12 Reference to Laws.
Any reference to any section or regulation under the
Internal Revenue Code or ERISA or to any other statute or law
shall be deemed to include any successor law of similar import.
ARTICLE XIII.
EARLY WITHDRAWAL OF EMPLOYER CONTRIBVUTIONS
Effective July 1, 1987, in-service early withdrawals from a
Participant's accounts under the Plan will no longer be
permitted.
ARTICLE XIV.
TOP HEAVY PROVISIONS
14.1 Application of Top Heavy Provisions.
(a) The provisions of this Article XIV shall apply in any
Fiscal Year beginning after December 31, 1983 in which, on the
Determination Date as defined in Section 14.7(a):
(1) The sum of the portions of the Accounts
attributable to Employer contributions and to Non-Deductible
Voluntary Participant Contributions of Participants who are Key
Employees, as defined in Section 14.7(b), exceeds sixty percent
(60%) of the sum of the Accounts attributable to Employer
contributions and to Non-Deductible Voluntary Participant
Contributions of all Participants; or
(2) The Plan is part of a Top Heavy Group, as
defined in Section 14.7(c).
(b) For purposes of the determining the sum of the
portions of Accounts attributable to Employer contributions and
to Non-Deductible Voluntary Participant Contributions under this
Section 14.1, the rules set forth in Section 14.6 shall apply.
14.2 Vesting Requirements.
In any Fiscal Year the Plan is determined to be Top Heavy
under Section 14.6, if a Participant's vested interest in the
portion of his Account derived from Employer contributions under
the vesting schedule set forth in Section 5.1 is less than his
vested interest in such portion of his Account would be if
calculated under the vesting schedule set forth in this Section
14.2, each Participant shall acquire a fully vested and non-
forfeitable interest in the portion of his Account derived from
Employer contributions upon the attainment of Normal Retirement
Age or upon an earlier date in accordance with the following
schedule:
20% after two (2) Years of Service;
40% after three (3) Years of Service;
60% after four (4) Years of Service;
80% after five (5) Years of Service; and
100% after six (6) Years of Service.
Upon the initial application of the vesting schedule set
forth in this Section 14.2 to the portion of a Participant's
Account attributable to Employer contributions, said vesting
schedule shall continue to apply to such portion of a
Participant's Account regardless of whether the Plan is Top Heavy
under Section 14.1 in any subsequent Plan Year, so long as the
Participant remains a Participant under the Plan. If the vesting
schedule under the Plan shifts into the schedule in this Section
14.2 for any Fiscal Year, such shift shall be deemed to be a Plan
amendment and the election upon a change in vesting schedule, as
provided in Article XI, shall apply.
14.3 Compensation Limitation.
For any Fiscal Year in which the Plan is determined to be
Top Heavy under Section 14.1, only the first $150,000 (or such
larger amount as may be determined by the U.S. Secretary of the
Treasury or his delegate) of a Participant's Section 415
Compensation shall be taken into account for purposes of
determining any Employer contributions under the Plan. For
purposes of this Article XIV, the term "Section 415 Compensation"
shall have the same meaning as given to this term in Article III.
14.4 Minimum Allocation.
(a) Except as otherwise provided in Sections 14.4(c) and
14.4(d), the Minimum Allocation of Employer contributions and
forfeitures allocated on behalf of any Participant who is not a
Key Employee shall not be less than the lesser of (1) three
percent (3%) of such Participant's Section 415 Compensation or
(2) in the case where the Employer has no defined benefit plan
which designates this Plan to satisfy Code Section 401, the
largest percentage of Employer contributions and forfeitures, as
a percentage of the first $150,000 of the Key Employee's Section
415 Compensation, allocated on behalf of any Key Employee for
that year.
(b) The Minimum Allocation is determined without
regard to any Social Security contribution. The Minimum
Allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation
for the year because of (1) the Participant's failure to complete
one thousand (1,000) Hours of Service, or (2) compensation less
than a stated amount.
(c) Section 14.4(a) shall not apply to any Participant
who was not employed by the Employer on the last day of the
Fiscal Year.
(d) Section 14.4(a) shall not apply to any Participant to
the extent the Participant is covered under any other plan or
plans of the Employer and the Employer has provided that the
minimum allocation or benefit requirement applicable to top heavy
plans will be met in the other plan or plans.
14.5 Limitations on Contributions and Benefits for Key
Employees.
(a) In any Limitation Year in which the Plan is
determined to be Top Heavy under Section 14.1, the denominators
of the defined benefit fraction and the defined contribution
fraction, as defined in Section 3.1(b)(4) shall be calculated by
substituting "1.0" for "1.25" in each place that it appears in
Section 3.1(b)(4). If the special rule for defined contribution
fraction is included under Article III of the Plan, in any
Limitation Year to which this Section 14.5(a) applies the special
rule shall be applied by substituting "$41,500" for "$51,875."
(b) This Section 14.5 shall not apply if this Plan
would satisfy the Minimum Allocation required by Section 14.4 if
such allocation is increased by one percent (1%) and if the
ratios computed under Section 14.1 and Section 14.7(c) do not
exceed ninety percent (90%).
14.6 Rules for Determining Top Heavy Status.
For purposes of determining the sum of Accounts under
Section 14.1 and 14.7(c) and the present value of accrued
benefits under Section 14.7(c), the following rules shall apply:
(a) If an Employee ceases to be a Key Employee, such
Employee's Account and accrued benefit, if any, shall be
disregarded for any Fiscal Year following the last Fiscal Year in
which he was treated as a Key Employee.
(b) The sum of Accounts or the present value of accrued
benefits shall include any amounts distributed to a Participant
within the five (5) year period ending on the Determination Date.
(c) In accordance with Code Section 416(g)(4)(A) (and any
regulations promulgated thereunder by the U.S. Secretary of the
Treasury or his delegate), any rollover contribution made to the
Plan by an Employee after December 31, 1983 shall not be taken
into account.
(d) For Fiscal Years beginning after December 31, 1984,
if a Participant has not performed any services for any Employer
maintaining the Plan at any time during the five (5) year period
ending on the Determination Date, neither the Participant's
Account nor his accrued benefit, if any, shall be taken into
account.
(e) The sum of accounts as of the Determination Date
under any defined contribution plan, including this Plan, shall
be calculated using the value of Participants' accounts on the
valuation date, as defined under such plan, which is coincident
with or falls within the twelve (12) month period ending on the
Determination Date. The present value of accrued benefits as of
the Determination Date under any defined benefit plan shall be
calculated as of the valuation date used under such plan to
compute costs under Code Section 412 which is coincident with or
falls within the twelve (12) month period ending on the
Determination Date. Both the present value of accrued benefits
and the sum of the accounts shall be adjusted in accordance with
any rulings or regulations issued by the U.S. Secretary of the
Treasury or his delegate.
(f) For Plan Years beginning after December 31, 1986, the
accrued benefit of any Participant who is not a Key Employee
shall be determined under (1) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the
Employer, or (2) if there is no method under Section 14.6(f)(1)
as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Code Section 411(b)(1)(C).
14.7 Definitions.
For purposes of this Article XIV, the following terms shall
have the following definitions:
(a) "Determination Date" means the last day of the
preceding Fiscal Year; or in the case of the first Fiscal Year
beginning after December 31, 1983, the last day of such Fiscal
Year.
(b) "Key Employee" means any Employee or former Employee
(or their Beneficiaries) who at any time during the Fiscal Year
or any of the preceding four (4) Fiscal Years, is:
(1) An officer of the Employer whose Section 415
Compensation is greater than $45,000 (or such other amount which
is equal to fifty percent (50%) of the amount specified in Code
Section 415(c)(1)(A) as in effect for the calendar year in which
the Determination Date falls). For purposes of this Section
14.7(b)(1), no more than fifty (50) Employees (or if lesser, the
greater of three (3) Employees or ten percent (10%) of all
Employees) shall be treated as officers and unincorporated
businesses shall be deemed not to have officers;
(2) One of the ten Employees owning (or considered
as owning within the meaning of Code Section 318 as modified by
Code Section 416(i)(1)) both more than one-half percent (1/2%)
ownership interest in value and the largest interests in the
Employer determined without regard to Code Sections 414(b), (c),
and (m). However, an Employee will not be considered a top ten
owner for a Fiscal Year unless the Employee's Section 415
Compensation is greater than $30,000 (or such other amount as
provided in Code Section 415(c)(1)(A) as in effect for the
calendar year in which the Determination Date falls) and if two
(2) Employees own the same interest in the Employer, the Employee
having the greater Section 415 Compensation from the Employer
shall be treated as owning the greater interest;
(3) A "five percent owner" of the Employer
meaning any person who owns (or is considered as owning within
the meaning of Code Section 318 as modified by Code Section
416(i)(1)) more than five percent (5%) of the outstanding stock
of the Employer or stock possessing more than five percent (5%)
of the total combined voting power of all stock of the Employer
or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), and (m) shall be treated as separate
employers; or
(4) A "one percent owner" of the Employer having
Section 415 Compensation from the Employer of more than $150,000.
"One percent owner" means any person who owns (or is considered
as owning within the meaning of Code Section 318 as modified by
Code Section 416(i)(1)) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than
one percent (1%) of the total combined voting power of all stock
of the Employer or, in the case of an unincorporated business,
any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), and (m) shall be treated as
separate employers. However, in determining whether an
individual has Section 415 Compensation of more than $150,000,
Section 415 Compensation from each employer required to be
aggregated under Code Sections 414(b), (c), and (m) shall be
taken into account.
(c) "Top Heavy Group" means a Required or Permissive
Aggregation Group, as defined below, if, as of the Determination
Date, (1) the sum of the portions of the accounts attributable to
Employer contributions, Forfeitures and Non-Deductible Voluntary
Participant Contributions of Key Employees under all defined
contribution plans included in the Required or Permissive
Aggregation Group, including this Plan, exceeds sixty percent
(60%) of the sum of the portions of the accounts attributable to
Employer contributions, Forfeitures and Non-Deductible Voluntary
Participant Contributions of all participants under all such
plans in the Required or Permissive Aggregation Group, or (2) the
present value of the accrued benefits attributable to Employer
contributions and to Non-Deductible Voluntary Participant
Contributions for Key Employees under all defined benefit plans
in the Required or Permissive Aggregation Group exceeds sixty
percent (60%) of the present value of the accrued benefits
attributable to Employer contributions, Forfeitures and Non-
Deductible Voluntary Participant Contributions for all
participants under all such plans in the Required or Permissive
Aggregation Group.
(1) "Required Aggregation Group" means, for purposes
of this Section 14.7(c), all plans maintained by the Employer or
an affiliate which are aggregated, pursuant to Code Section
416(g), to determine whether the plans constitute a Top- Heavy
Group. The group shall include any plan which covers a Key
Employee and any other plan which enables a plan covering a Key
Employee to meet the requirements of Section 401(a)(4) or 410 of
the Code.
(2) "Permissive Aggregation Group" means, for
purposes of this Section 14.7(c), all plans maintained by the
Employer or an affiliate which are not required to be aggregated
but which may, in the discretion of the Employer, be aggregated
pursuant to Code Section 416(g) to determine whether the plans
constitute a Top-Heavy Group; provided that the group of plans
so aggregated would continue to meet the requirements of Code
Sections 401(a)(4) and 410.
For purposes of determining the present value
of accrued benefits under this Section 14.7(c), the actuarial
assumptions used shall be the same as the actuarial assumptions
set forth in the defined benefit plans of the Aggregation Group
for the definition of actuarial equivalence. For purposes of
determining the present value of accrued benefits and the sum of
accounts under this Section 14.7(c), the rules set forth under
Section 14.6 shall apply.