EXHIBIT 10.6
FIRST AMENDMENT TO
TEXAS PETROCHEMICALS CORPORATION
PROFIT SHARING PLAN
WHEREAS, TEXAS PETROCHEMICALS CORPORATION (the "COMPANY") has heretofore
adopted the TEXAS PETROCHEMICALS CORPORATION PROFIT SHARING PLAN (the "PLAN")
for the benefit of its employees; and
WHEREAS, in conjunction with its change of fiscal year, the Company desires
to amend the Plan to reflect such fiscal year.
NOW, THEREFORE, the Plan shall be amended as follows, effective as of July
1, 1996:
1. Section 1.1(38) of the Plan shall be deleted in its entirety and the
following shall be submitted therefor:
"(38) PLAN QUARTER: A three-consecutive month period commencing on
July 1, October 1, January 1, and April 1 of each year."
2. Section 1.1(39) of the Plan shall be deleted in its entirety and the
following shall be substituted therefor:
"(39) PLAN YEAR: The twelve-consecutive month period commencing July 1
of each year. As a result of the change in Plan Year effective July 1,
1996, the Plan shall have a short Plan Year, commencing June 1, 1996 and
ending June 30, 1996."
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed this 27 day of January, 1996.
TEXAS PETROCHEMICALS CORPORATION
By --------------------, President
TEXAS PETROCHEMICALS CORPORATION
PROFIT SHARING PLAN
As Amended and Restated
Effective Date: October 1, 1994
TABLE OF CONTENTS
ARTICLE PAGE
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I -- DEFINITIONS AND CONSTRUCTION........................ I-1
II -- PARTICIPATION....................................... II-1
III -- CONTRIBUTIONS....................................... III-1
IV -- ALLOCATIONS......................................... IV-1
V -- INVESTMENT OF FUNDS................................. V-1
VI -- RETIREMENT BENEFITS................................. VI-1
VII -- DISABILITY BENEFITS................................. VII-1
VIII -- SEVERANCE BENEFITS.................................. VIII-1
IX -- DEATH BENEFITS...................................... IX-1
X -- TIME AND MANNER OF PAYMENT OF BENEFITS.............. X-1
XI -- WITHDRAWALS AND LOANS............................... XI-1
XII -- ADMINISTRATION OF THE PLAN.......................... XII-1
XIII -- ADMINISTRATION OF FUNDS............................. XIII-1
XIV -- TRUSTEE AND ADMINISTRATION OF TRUST FUND............ XIV-1
XV -- FIDUCIARY PROVISIONS................................ XV-1
XVI -- AMENDMENTS.......................................... XVI-1
XVII -- DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
PARTIAL TERMINATION AND MERGER OR CONSOLIDATION.... XVII-1
XVIII -- ADOPTING EMPLOYERS.................................. XVIII-1
XIX -- MISCELLANEOUS PROVISIONS............................ XIX-1
XX -- TOP-HEAVY STATUS.................................... XX-1
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(40) ROLLOVER ACCOUNT: An individual account for an Eligible Employee which is
credited with the Rollover Contributions of such Employee and which is
credited (or debited) with such account's allocation of net income (or net
loss) of the Trust Fund.
(41) ROLLOVER CONTRIBUTIONS: Contributions made by an Eligible Employee
pursuant to Section 3.8.
(42) TRUST: The trust(s) established under the Trust Agreement(s) to hold and
invest contributions made under the Plan and income thereon, and from
which the Plan benefits are distributed.
(43) TRUST AGREEMENT: The agreement(s) entered into between the Company and the
Trustee establishing the Trust, as such agreement(s) may be amended from
time to time.
(44) TRUST FUND: The funds and properties held pursuant to the provisions of
the Trust Agreement for the use and benefit of the Members, together with
all income, profits, and increments thereto.
(45) TRUSTEE: The trustee or trustees qualified and acting under the Trust
Agreement at any time.
(46) VALUATION DATES: The last day of each month and any other interim
Valuation Date determined by the Committee on a nondiscriminatory basis.
(47) VESTED INTEREST: The portion of a Member's Accounts which, pursuant to the
Plan, is nonforfeitable.
(48) VESTING SERVICE: The measure of service used in determining a Member's
Vested Interest as determined pursuant to Section 8.3.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and the plural to include the
singular. The masculine gender, where appearing in this Plan, shall be deemed to
include the feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience and if there is any conflict between such headings and
the text of the Plan, the text shall control.
II.
PARTICIPATION
2.1 ELIGIBILITY. Any Eligible Employee shall become a Member upon the
first day of the month coincident with or next following the date on which such
Eligible Employee has completed one year of Participation Service.
Notwithstanding the foregoing:
(a) an Eligible Employee who was a Member of the Plan on the day
prior to the Effective Date shall remain a Member of this restatement
thereof as of the Effective Date;
(b) an Eligible Employee who was a Member of the Plan prior to a
termination of employment shall remain a Member upon his reemployment as an
Eligible Employee;
(c) an Employee who has completed one year of Participation Service
but who has not become a Member of the Plan because he was not an Eligible
Employee shall be eligible to become a Member of the Plan immediately upon
becoming an Eligible Employee as a result of a change in his employment
status;
(d) A Member who ceases to be an Eligible Employee but remains an
Employee shall continue to be a Member but, on and after the date he ceases
to be an Eligible Employee, he shall no longer be entitled to defer
Compensation hereunder or share in allocations of Employer Contributions
unless and until he shall again become an Eligible Employee; and
(e) an Eligible Employee may elect not to become a Member or a Member
may elect to cease participating in the Plan by written notice to the
Committee. Such election may be revoked at any time by written notice to
the Committee, effective as of the first day of the Plan Year next
following the
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Plan Year during which such revocation notice is given, provided such
notice is given at least thirty days before the first day of such Plan
Year.
2.2 PARTICIPATION SERVICE. The completion of 1,000 or more Hours of
Service during a Computation Period shall constitute one year of Participation
Service.
III.
CONTRIBUTIONS
3.1 CASH OR DEFERRED CONTRIBUTIONS.
(a) A Member may elect to defer an integral percentage of from 1% to 10%
(or, with respect to a Member who is a Highly Compensated Employee, such lesser
percentage as may be prescribed from time to time by the Committee) of his
Compensation for a Plan Year by having the Employer contribute the amount so
deferred to the Plan. Compensation for a Plan Year not so deferred by such
election shall be received by such Member in cash. A Member's election to defer
an amount of his Compensation pursuant to this Section shall be made by
executing a Compensation reduction agreement pursuant to which the Member
authorizes the Employer to reduce his Compensation in the elected amount and the
Employer, in consideration thereof, agrees to contribute an equal amount to the
Plan. The reduction in a Member's Compensation Plan for a Plan Year pursuant to
his election under a Compensation reduction agreement shall be effected by
Compensation reductions each month within such Plan Year following the effective
date of such agreement. The amount of Compensation elected to be deferred by a
Member for a Plan Year pursuant to this Section shall become a part of the
Employer's Cash or Deferred Contributions for such Plan Year.
(b) A Member's Compensation reduction agreement shall remain in force and
effect for all periods following the date of its execution until modified or
terminated or until such Member terminates his employment. A Member who has
elected to defer a portion of his Compensation may change his deferral election
percentage (within the percentage limits set forth in Paragraph (a) above),
effective as of the first day of any payroll period, by executing and delivering
to the Committee a new Compensation reduction agreement within the time period
prescribed by the Committee, but only two such changes may be made in a Plan
Year.
(c) A Member may cancel his Compensation reduction agreement, effective as
of the first day of any payroll period, by executing and delivering to the
Committee a Compensation reduction cancellation agreement in the form prescribed
by the Committee within the time period prescribed by the Committee. A Member
who so cancels his Compensation reduction agreement may resume Compensation
deferrals, effective as of the first day of a month following six months after
the date on which the cancellation is effective, by executing and delivering to
the Committee a new Compensation reduction agreement within the time period
prescribed by the Committee.
(d) In restriction of the Members' elections provided in Paragraphs (a),
(b) and (c) above, the Cash or Deferred Contributions and the elective deferrals
(within the meaning of section 402(g)(3) of the Code) under all other plans,
contracts and arrangements of the Employer on behalf of any Member for any
calendar year shall not exceed $7,000 (with such amount to be adjusted
automatically to reflect any cost-of-living adjustments authorized by section
402(g)(5) of the Code).
(e) In further restriction of the Members' elections provided in
Paragraphs (a), (b) and (c) above, it is specifically provided that one of the
"actual deferral percentage" tests set forth in section 401(k)(3) of the Code
and the Treasury Regulations thereunder must be met in each Plan Year. If
multiple use of the alternative limitation (within the meaning of section
401(m)(9) of the Code and Treasury Regulation Section 1.401(m)-2(b)) occurs
during a Plan Year such multiple use shall be corrected in accordance with the
provisions of Treasury Regulation Section 1.401(m)-2(c); provided, however, that
if such multiple use is not eliminated by making Employer Safe Harbor
Contributions, then the "actual contribution percentages"
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of all Highly Compensated Employees participating in the Plan shall be reduced,
and the excess contributions distributed, in accordance with the provisions of
Section 3.7(c) and applicable Treasury Regulations so that there is no such
multiple use.
(f) If the restrictions set forth in Paragraph (d) or (e) above would not
otherwise be met for any Plan Year, the Compensation deferral elections made
pursuant to Paragraphs (a), (b) and (c) above of Members who are Highly
Compensated Employees may be reduced by the Committee on a temporary and
prospective basis in such manner as the Committee shall determine.
(g) As soon as administratively feasible following the end of each month,
the Employer shall contribute, as Cash of Deferred Contributions with respect to
each Member, an amount equal to the amount of Compensation elected to be
deferred, pursuant to Paragraphs (a) and (b) above (as adjusted pursuant to
Paragraph (f) above), by such Member during such month. Such contributions, as
well as the contributions pursuant to Sections 3.2, 3.3 and 3.4, shall be made
without regard to current or accumulated profits of the Employer.
Notwithstanding the foregoing, the Plan is intended to qualify as a profit
sharing plan for purposes of sections 401(a), 402, 412 and 417 of the Code.
3.2 EMPLOYER MATCHING CONTRIBUTIONS. For each month in the Plan Year, the
Employer shall contribute to the Trust, as Employer Matching Contributions, an
amount which equals 25% of the Cash or Deferred Contributions which were made
pursuant to Section 3.1 on behalf of each of the Members during such month and
which were not in excess of 6% of each such Member's Compensation for such
month.
3.3 EMPLOYER DISCRETIONARY CONTRIBUTIONS. For each Plan Year, the
Employer may contribute to the Trust, as an Employer Discretionary Contribution,
an additional amount as determined in the discretion of the Directors. At the
time that the Directors authorize an Employer Discretionary Contribution, the
Directors shall designate the date during the Plan Year as of which such
contribution is to be allocated and the portion of such Plan Year for which the
contribution is being made.
3.4 EMPLOYER SAFE HARBOR CONTRIBUTIONS. In addition to the Employer
Matching Contributions made pursuant to Section 3.2 and the Employer
Discretionary Contribution made pursuant to Section 3.3 for each Plan Year, the
Employer, upon the authorization of the Directors in their discretion, may
contribute to the Trust, as a "safe harbor contribution" for such Plan Year,
the amounts necessary to cause the Plan to satisfy the restrictions set forth in
Section 3.1(e) and Section 3.5, respectively. Amounts contributed in order to
satisfy the restrictions set forth in Section 3.1(e) shall be considered
"qualified matching contributions" (within the meaning of Treasury Regulation
Section 1.401(k)-1(g)(13)) for purposes of such Section, and amounts contributed
in order to satisfy the restrictions set forth in Section 3.5 shall be
considered Employer Matching Contributions for purposes of such Section. Any
amounts contributed pursuant to this Paragraph shall be allocated in accordance
with the provisions of Sections 4.2(d) and (e).
3.5 RESTRICTIONS ON EMPLOYER CONTRIBUTIONS. In restriction of the
Employer Contributions hereunder, it is specifically provided that one of the
"actual contribution percentage" tests set forth in section 401(m) of the Code
and the Treasury Regulations thereunder must be met in each Plan Year. The
Committee may elect, in accordance with applicable Treasury Regulations, to
treat Cash or Deferred Contributions to the Plan as Employer Matching
Contributions for purposes of meeting this requirement.
3.6 RETURN OF CONTRIBUTIONS. Anything to the contrary herein
notwithstanding, the Employer's contributions to the Plan are contingent upon
the deductibility of such contributions under Section 404 of the Code. To the
extent that a deduction for contributions is disallowed, such contributions
shall, upon the written demand of the Employer, be returned to the Employer by
the Trustee within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any net
earning of the Trust Fund attributable thereto. Moreover, if Employer
contributions are made under a mistake of fact, such contributions shall, upon
the written demand of the Employer, be returned to the Employer by the Trustee
within one year after the payment thereof, reduced by any net
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losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto.
3.7 DISPOSITION OF EXCESS DEFERRALS AND EXCESS CONTRIBUTIONS.
(a) Anything to the contrary herein notwithstanding, any Cash or Deferred
Contributions to the Plan for a calendar year on behalf of a Member in excess of
the limitations set forth in Section 3.1(d) and any "excess deferrals" from
other plans allocated to the Plan by such Member no later than March 1 of the
next following calendar year within the meaning of, and pursuant to the
provisions of, section 402(g)(2) of the Code, shall be distributed to such
Member not later than April 15 of the next following calendar year.
(b) Anything to the contrary herein notwithstanding, if, for any Plan
Year, the aggregate Cash or Deferred Contributions made by the Employer on
behalf of Highly Compensated Employees exceeds the maximum amount of Cash or
Deferred Contributions permitted on behalf of such Highly Compensated Employees
pursuant to Section 3.1(e) (determined by reducing Cash or Deferred
Contributions on behalf of Highly Compensated Employees in order of the "actual
deferral percentages" (as that term is defined in section 401(k)(3)(B) of the
Code and the Treasury Regulations thereunder) beginning with the highest of such
percentages), such excess shall be distributed to the Highly Compensated
Employees on whose behalf such excess was contributed before the end of the next
following Plan Year. For purposes of this Paragraph, the determination and
correction of excess Cash or Deferred Contributions of a Member whose actual
deferral percentage is determined under the family aggregation rules of sections
401(k) and 414(q) of the Code shall be made in accordance with the provisions of
such sections and the Treasury Regulations thereunder.
(c) Anything to the contrary herein notwithstanding, if, for any Plan
Year, the aggregate Employer Contributions allocated to the Accounts of Highly
Compensated Employees exceeds the maximum amount of such Employer Contributions
permitted on behalf of such Highly Compensated Employees pursuant to Section 3.5
(determined by reducing Employer Contributions made on behalf of Highly
Compensated Employees in order of the "contribution percentages" (as that term
is defined in section 401(m)(3) of the Code and Treasury Regulations thereunder)
beginning with the highest of such percentages), such excess shall be
distributed to the Highly Compensated Employees on whose behalf such excess
contributions were made (or, if such excess contributions are forfeitable, they
shall be forfeited) before the end of the next following Plan Year. For purposes
of this Paragraph, the determination and correction of excess Employer
Contributions allocated to the Account of a Member whose contribution percentage
is determined under the family aggregation rules of sections 401(m) and 414(q)
of the Code shall be made in accordance with the provisions of such sections and
the Treasury Regulations thereunder. Employer Contributions shall be forfeited
pursuant to this Paragraph only if distribution of all vested Employer
Contributions is insufficient to meet the requirements of this Paragraph. If
vested Employer Contributions are distributed to a Member and nonvested Employer
Contributions remain credited to such Member's Accounts, such nonvested Employer
Contributions shall vest at the same rate as if such distribution had not been
made.
(d) In coordinating the disposition of such excess deferrals and excess
contributions pursuant to this Section, such excess deferrals and excess
contributions shall be treated in the following order:
(1) first, excess deferrals described in Paragraph (a) above shall be
distributed;
(2) second, excess Cash or Deferred Contributions described in
Paragraph (b) above which are not considered in determining the amount of
Employer Matching Contributions pursuant to Section 3.2 shall be
distributed;
(3) third, excess Cash or Deferred Contributions described in
Paragraph (b) above which are considered in determining the amount of
Employer Matching Contributions pursuant to Section 3.2 shall be
distributed, and the Employer Matching Contributions with respect to such
Cash or Deferred Contributions shall be forfeited; and
(4) fourth, excess Employer Contributions described in Paragraph (c)
above shall be distributed (or, if forfeitable, forfeited).
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(e) Any distribution or forfeiture of excess deferrals or excess
contributions pursuant to the provisions of this Section shall be adjusted for
income or loss allocated thereto in accordance with the provisions of Section
4.4 through the Valuation Date next preceding the date of the distribution or
forfeiture. Any forfeiture pursuant to the provisions of this Section shall be
considered to have occurred on the date which is 2-1/2 months after the end of
the Plan Year.
3.8 ROLLOVER CONTRIBUTIONS.
(a) Qualified Rollover Contributions may be made to the Plan by any
Eligible Employee of amounts that are "eligible rollover distributions" within
the meaning of section 402(f)(2)(A) of the Code from an employee's trust
described in section 401(a) of the Code, which is exempt from tax under section
501(a) of the Code. A Rollover Contribution may be made to the Plan irrespective
of whether such eligible rollover distribution was paid to the Eligible Employee
or paid to the Plan as a "direct" Rollover Contribution, but only if any such
Rollover Contribution is made pursuant to and in accordance with applicable
provisions of the Code and Treasury Regulations promulgated thereunder. A direct
Rollover Contribution to the Plan may be effectuated only by wire transfer
directed to the Trustee or by issuance of a check made payable to the Trustee,
which is negotiable only by the Trustee and which identifies the Eligible
Employee for whose benefit the Rollover Contribution is being made. Any Eligible
Employee desiring to effect a Rollover Contribution to the Plan must execute and
file with the Committee the form prescribed by the Committee for such purpose.
The Committee may require as a condition to accepting any Rollover Contribution
that such Eligible Employee furnish any evidence that the Committee in its
discretion deems satisfactory to establish that the proposed Rollover
Contribution is in fact such an eligible rollover distribution and is made
pursuant to and in accordance with applicable provisions of the Code and
Treasury Regulations. All Rollover Contributions to the Plan must be made in
cash. A Rollover Contribution shall be credited to the Rollover Account of the
Eligible Employee for whose benefit such Rollover Contribution is being made as
of the last day of the month in which such Rollover Contribution is made;
provided, however, that for purposes of Section 4.4 only, such Rollover
Contribution shall be allocated to the Rollover Account of such Member as soon
as administratively feasible after such Rollover Contribution is received by the
Trustee.
(b) An Eligible Employee who has made a Rollover Contribution in
accordance with this Section who has not otherwise become a Member of the Plan
in accordance with Article II shall become a Member coincident with such
Rollover Contribution; provided, however, that such Member shall not have a
right to defer Compensation or have Employer Contributions made on his behalf
until he has otherwise satisfied the requirements imposed by Article II.
IV.
ALLOCATIONS
4.1 SUSPENSE ACCOUNT. All contributions, forfeitures and the net income
(or net loss) of the Trust Fund shall be held in suspense until allocated to the
Accounts of the Members or applied as provided herein.
4.2 ALLOCATION OF CONTRIBUTIONS.
(a) Cash or Deferred Contributions made by the Employer on a Member's
behalf pursuant to Section 3.1 shall be allocated to such Member's Cash or
Deferred Account as of the last day of the month for which they were made.
(b) The 25% Employer Matching Contributions for each month pursuant to
Section 3.2 shall be allocated as of the last day of the month for which they
were made to the Employer Matching Contribution Accounts of the Members for whom
such contributions were made.
(c) The Employer Discretionary Contribution, if any, made pursuant to
Section 3.3 for a Plan Year shall be allocated as of the allocation date during
such Plan Year specified by the Directors at the time such Employee
Discretionary Contribution is authorized to the Employer Contribution Accounts
of the Members who (1) were Eligible Employees on such allocation date or (2)
terminated employment during such Plan
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Year on or after Normal Retirement Date or by reason of total and permanent
disability (as defined in Section 7.2) or death. The allocation to each such
eligible Member's Employer Contribution Account shall be that portion of such
Employer Discretionary Contribution which is in the same proportion that such
Member's Compensation for the portion of the Plan Year for which such
contribution is made (as specified by the Employer) bears to the total of all
such Members' Compensation for such portion of the Plan Year.
(d) The Employer's Safe Harbor Contribution, if any, made pursuant to
Section 3.4 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.1(e) shall be allocated in the following priority as of the last day
of such Plan Year to the Cash or Deferred Accounts of Members who (1) received
an allocation of Cash or Deferred Contributions for such Plan Year and (2) were
not Highly Compensated Employees for such Plan Year (each such Member
individually referred to as an "ELIGIBLE MEMBER" for purposes of this
Paragraph):
(A) first, subject to the limitations set forth in Section 4.5, to
the Cash or Deferred Account of the Eligible Member who received the least
amount of Compensation for such Plan Year, then to the Cash or Deferred
Account of the Eligible Member who received the next smallest amount of
Compensation for such Plan Year and continuing in such manner until the
restrictions set forth in Section 3.1(e) have been satisfied; and
(B) next, the remaining portion, if any, of such Employer Safe Harbor
Contribution shall be allocated to the Cash or Deferred Accounts of the
Eligible Members who did not receive an allocation pursuant to clause (A)
above based on the ratio of each such Eligible Member's Cash or Deferred
Contributions for such Plan Year to the total of all such Eligible Members'
Cash or Deferred Contributions for such Plan Year.
(e) The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.4 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.5 shall be allocated in the following priority as of the last day of
such Plan Year to the Employer Matching Contribution Accounts of Members who (1)
received an allocation of Employer Matching Contributions for such Plan Year and
(2) were not Highly Compensated Employees for such Plan Year (each such Member
individually referred to as an "ELIGIBLE MEMBER" for purposes of this
Paragraph):
(A) first, subject to the limitations set forth in Section 4.5, to
the Employer Matching Contribution Account of the Eligible Member who
received the least amount of Compensation for such Plan Year, then to the
Employer Matching Contribution Account of the Eligible Member who received
the next smallest amount of Compensation for such Plan Year and continuing
in such manner until the restrictions set forth in Section 3.5 have been
satisfied; and
(B) next, the remaining portion, if any, of such Employer Safe Harbor
Contribution shall be allocated to the Employer Matching Contribution
Accounts of the Eligible Members who did not receive an allocation pursuant
to clause (A) above based on the ratio of each such Eligible Member's share
of Employer Matching Contributions for such Plan Year to the total of all
such Eligible Members' share of Employer Matching Contributions for such
Plan Year.
(f) If an Employer Safe Harbor Contribution is made in order to satisfy
the restrictions set forth in both Section 3.1(e) and Section 3.5 for the same
Plan Year, the Employer Safe Harbor Contribution made in order to satisfy the
restrictions set forth in Section 3.1(e) shall be allocated pursuant to
Paragraph (d) above prior to allocating the Employer Safe Harbor Contribution
made in order to satisfy the restrictions set forth in Section 3.5.
(g) Contrary Plan provisions notwithstanding, for purposes of Section 4.4
only, contributions pursuant this Section shall be allocated to the applicable
Accounts of Members as soon as administratively feasible after such
contributions are received by the Trustee.
4.3 APPLICATION OF FORFEITURES. Effective June 1, 1994, any amounts that
are forfeited under any provision hereof other than Section 4.5 during a Plan
Year shall be applied to the payment of administrative expenses of the Plan and
Trust in accordance with Section 13.1. Effective June 1, 1994, any
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amounts that are forfeited under Section 4.5 during a Plan Year shall be applied
to reduce Employer Matching Contributions next coming due.
4.4 ALLOCATION OF NET INCOME OR LOSS AND CHANGES IN VALUE AMONG ACCOUNTS.
As of each Valuation Date, the Trustee shall determine the fair market value of
the assets of each Fund and the net income (or net loss) of each Fund since the
next preceding Valuation Date. Any net increase (or net decrease) in fair market
value and any net income (or net loss) of each Fund since the next preceding
Valuation Date shall be allocated among the Accounts invested in such Fund in
proportion to the value of such Accounts on the next preceding Valuation Date.
4.5 LIMITATIONS.
(a) For purposes of this Section, the following terms and phrases shall
have these respective meanings:
(1) "ANNUAL ADDITIONS" of a Member for any Limitation Year shall
mean the total of (A) the Employer Contributions, Cash or Deferred
Contributions and forfeitures, if any, allocated to such Member's Accounts
for such year, (B) Member's contributions, if any, (excluding any Rollover
Contributions) for such year and (C) amounts referred to in sections
415(l)(1) and 419A(d)(2) of the Code.
(2) "LIMITATION YEAR" shall mean the Plan Year.
(3) "MAXIMUM ANNUAL ADDITIONS" of a Member for any Limitation Year
shall mean the lesser of (A) $30,000 (or, if greater, one-fourth of the
dollar limitation in effect under section 415(b)(1)(A) of the Code for such
Limitation Year) or (B) 25% of such Member's compensation, within the
meaning of section 415(c)(3) of the Code and applicable Treasury
Regulations thereunder and as limited by section 401(a)(17) of the Code for
Limitation Years beginning after December, 31, 1988, during such year
except that the limitation in this Clause (B) shall not apply to any
contribution for medical benefits (within the meaning of section 419(f)(2)
of the Code) after separation from service with the Employer or a
Controlled Entity which is otherwise treated as an Annual Addition or to
any amount otherwise treated as an Annual Addition under section 415(l)(1)
of the Code.
(b) Contrary Plan provisions notwithstanding, in no event shall the Annual
Additions credited to a Member's Accounts for any Limitation Year exceed the
Maximum Annual Additions for such Member for such year. If as a result of a
reasonable error in estimating a Member's Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of section
402(g)(3) of the Code) that may be made with respect to any individual under the
limits of section 415 of the Code, or because of other limited facts and
circumstances, the Annual Additions which would be credited to a Member's
Accounts for a Limitation Year would nonetheless exceed the Maximum Annual
Additions for such Member for such year, the excess Annual Additions which, but
for this Section, would have been allocated to such Member's Accounts shall be
disposed of as follows:
(1) first, any such excess Annual Additions in the form of Cash or
Deferred Contributions on behalf of such Member which would not have been
considered in determining the amount of Employer Contributions allocated to
such Member's Accounts pursuant to Section 4.2 shall be distributed to such
Member, adjusted for income or loss allocated thereto;
(2) next, any such excess Annual Additions in the form of Cash or
Deferred Contributions on behalf of such Member which would have been
considered in determining the amount of Employer Contributions allocated to
such Member's Accounts pursuant to Section 4.2 shall be distributed to such
Member, adjusted for income or loss allocated thereto, and the Employer
Contributions which would have been allocated to such Member's Accounts
based upon such distributed Cash or Deferred Contributions shall, to the
extent such amounts would have otherwise been allocated to such Member's
Accounts, be allocated to a suspense account and shall be held there until
used to reduce future Employer Matching Contributions.
(5) finally, any such excess Annual Additions in the form of Employer
Discretionary Contributions shall, to the extent such amounts would
otherwise have been allocated to such Member's
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Accounts, be allocated to a suspense account and shall be held therein
until used to reduce future Employer Matching Contributions.
(c) If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, it will not participate in allocations of the net
income (or net loss) of the Trust Fund.
(d) For purposes of determining whether the Annual Additions under this
Plan exceed the limitations herein provided, all defined contribution plans of
the Employer are to be treated as one defined contribution plan. In addition,
all defined contribution plans of Controlled Entities shall be aggregated for
this purpose. For purposes of this Section only, a "CONTROLLED ENTITY" (other
than an affiliated service group member within the meaning of section 414(m) of
the Code) shall be determined by application of a more than 50% control standard
in lieu of an 80% control standard. If the Annual Additions credited to a
Member's Accounts for any Limitation Year under this Plan plus the additions
credited on his behalf under other defined contribution plans required to be
aggregated pursuant to this Paragraph would exceed the Maximum Annual Additions
to such Member for such Limitation Year, the Annual Additions under this Plan
and the additions under such other plans shall be reduced on a pro rata basis
and allocated, reallocated or returned in accordance with applicable plan
provisions regarding Annual Additions in excess of Maximum Annual Additions.
(e) In the case of a Member who also participated in a defined benefit plan
of the Employer or a Controlled Entity (as defined in Paragraph (d) above), the
Employer shall reduce the Annual Additions credited to the Accounts of such
Member under this Plan pursuant to the provisions of Paragraph (b) to the extent
necessary to prevent the limitation set forth in section 415(e) of the Code from
being exceeded. Notwithstanding the foregoing, the provisions of this Paragraph
shall only apply if such defined benefit plan does not provide for a reduction
of benefits thereunder to ensure that the limitation set forth in section 415(e)
of the Code is not exceeded.
(f) If the limitations set forth in this Section would not otherwise be met
for any Limitation Year, the Compensation deferral elections pursuant to Section
3.1 of affected Members may be reduced by the Committee on a temporary and
prospective basis in such manner as the Committee shall determine.
V.
INVESTMENT OF FUNDS
5.1 EMPLOYER CONTRIBUTION ACCOUNTS. The Employer Contribution Accounts of
the Members shall be invested as one Fund in such general investments as the
Committee may determine.
5.2 INVESTMENT OPTIONS FOR CASH OR DEFERRED, EMPLOYER MATCHING AND ROLLOVER
ACCOUNTS.
(a) Each member shall designate, in accordance with the procedures
established from time to time by the Committee, the manner in which the amounts
allocated to his Cash or Deferred, Employer Matching and Rollover Accounts shall
be invested from among the Funds made available from time to time by the
Committee. With respect to each of such Accounts, such Member may designate one
of such Funds for all the amounts allocated to such Account or he may split the
investment of the amounts allocated to such Account between such Funds in such
increments as the Committee may prescribe. If a Member fails to make a proper
designation, then such Accounts shall be invested in the Fund or Funds
designated by the Committee from time to time in a uniform and nondiscriminatory
manner.
(a) A Member may change his investment designation for future contributions
to be allocated to his Cash or Deferred, Employer Matching or Rollover Accounts.
Any such change shall be made in accordance with the procedures established by
the Committee, and the frequency of such changes may be limited by the
Committee.
(b) A Member may elect to convert his investment designation with respect
to the amounts already allocated to his Cash or Deferred, Employer Matching or
Rollover Accounts. Any such conversion shall be
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made in accordance with the procedures established by the Committee, and the
frequency of such conversions may be limited by the Committee.
VI.
RETIREMENT BENEFITS
A Member who terminates his employment on or after his Normal Retirement
Date shall be entitled to an Article X benefit equal in value to the sum of:
(a) the amount in his Accounts as of the Valuation Date next preceding
his Benefit Commencement Date: and
(b) if the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during which
his termination of employment occurred, the amount of such Member's
allocation of Employer Discretionary Contributions and Employer Safe Harbor
Contributions for such Plan Year.
VII.
DISABILITY BENEFITS
7.1 DISABILITY BENEFITS. In the event a Member's employment is terminated
due to total and permanent disability, as of the Committee's certification
thereof as provided in Section 7.2, such Member shall be entitled to an Article
X benefit equal in value to the sum of:
(a) the amount in his Accounts as of the Valuation Date next preceding
his Benefit Commencement Date; and
(b) if the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during which
such disability was determined, the amount of such Member's allocation of
Employer Discretionary Contributions and Employer Safe Harbor Contributions
for such Plan Year.
7.2 TOTAL AND PERMANENT DISABILITY DETERMINED. The Committee shall
determine whether a Member has become totally and permanently disabled and shall
so notify such Member within sixty days thereafter. A Member shall be considered
totally and permanently disabled if such disability is so certified by the
Committee and, unless waived by the Committee as unnecessary, supported by a
written medical opinion that such Member will be permanently incapable of
performing his job for physical or mental reasons.
VIII.
SEVERANCE BENEFITS
8.1 NO BENEFITS UNLESS HEREIN SET FORTH. Except as set forth in this
Article, upon termination of employment of a Member prior to his Normal
Retirement Date for any reason other than total and permanent disability or
death, such Member shall acquire no right to any benefit from the Plan or the
Trust Fund.
8.2 SEVERANCE BENEFIT.
(a) Each Member whose employment is terminated prior to his Normal
Retirement Date for any reason other than total and permanen disability or death
shall be entitled to an Article X benefit equal in value to the sum of:
(1) his Vested Interest in the amount in his Accounts as of the
Valuation Date next preceding his Benefit Commencement Date: and
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(2) if the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during which
his termination of employment occurred, the amount of such Member's Vested
Interest in his allocation of Employer Safe Harbor Contributions for such
Plan Year.
(b) For purposes of this Section, a Member's Vested Interest in his
Employer Accounts shall be determined by such Member's years of Vesting Service
in accordance with the following schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
---------------------------------------- ---------------
1 year............................. 20%
2 years............................ 40%
3 years............................ 60%
4 years............................ 80%
5 years or more.................... 100%
(c) Paragraph (b) above notwithstanding, a Member shall have a 100% Vested
Interest in his Employer Accounts upon attainment of his Normal Retirement Date.
(d) A Member shall have a 100% Vested Interest in his Cash or Deferred
Account and Rollover Account at all times.
8.3 VESTING SERVICE.
(a) For the period preceding the Effective Date, subject to the provisions
of Paragraph (c) below, an individual shall be credited with Vesting Service in
an amount equal to all service credited to him for vesting purposes under the
Plan as it existed on the day prior to the Effective Date.
(b) For the Plan Year beginning with the Effective Date and all Plan Years
thereafter, subject to the provisions of Paragraph (c) below, 1,000 or more
Hours of Service during any Computation Period shall constitute one year of
Vesting Service.
(c) In the case of a Member who incurs five consecutive One-Year
Breaks-in-Service, such Member's years of Vesting Service completed after such
One-Year Breaks-in-Service shall be disregarded in determining such Member's
Vested Interest in any Plan benefits derived from Employer Contributions on his
behalf prior to such One-Year Breaks-in-Service.
8.4 FORFEITURES.
(a) With respect to a Member who terminates employment with the Employer
with a Vested Interest in his Employer Accounts which is less than 100% and
receives a distribution from the Plan of the balance of his Vested Interest in
his Accounts in the form of a lump sum distribution by the close of the second
Plan Year following the Plan Year in which his employment is terminated, the
forfeitable amounts credited to the terminated Member's Employer Accounts as of
the Valuation Date next preceding his Benefit Commencement Date shall become a
forfeiture as of his Benefit Commencement Date.
(b) In the event that amounts credited to a terminated Member's Employer
Accounts become a forfeiture pursuant to Paragraph (a) above, the terminated
Member shall, upon subsequent reemployment with the Employer prior to incurring
five consecutive One-Year Breaks-in-Service, have the forfeited amounts restored
to such Member's Employer Accounts, unadjusted by any subsequent gains or losses
of the Trust Fund; provided, however, that such restoration shall be made only
if such Member repays in cash an amount equal to the amount so distributed to
him pursuant to Paragraph (a) above within five years from the date the Member
is reemployed; provided, further, that such Member's repayment of amounts
distributed to him from his Cash or Deferred Account shall be limited to the
portion thereof which was attributable to contributions with respect to which
the Employer made Employer Matching Contributions. Any such restoration shall be
made as of the Valuation Date coincident with or next succeeding the date of
repayment. Notwithstanding anything to the contrary in the Plan, forfeited
amounts to be restored by the Employer pursuant to this Paragraph shall be
charged against and deducted from forfeitures for the Plan Year in which such
amounts are restored which would otherwise be available to pay administrative
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expenses of the Plan and Trust. If such forfeitures otherwise available are not
sufficient to provide such restoration, the portion of such restoration not
provided by forfeitures shall be charged against and deducted from Employer
Discretionary Contributions otherwise available for allocation to other Member's
in accordance with Section 4.2(c), and any additional amount needed to restore
such forfeited amounts shall be provided by an additional Employer Discretionary
Contribution (which shall be made without regard to current or accumulated
earnings and profits).
(c) With respect to a Member whose Vested Interest in his Employer Accounts
is less than 100% and who makes a withdrawal from or receives a termination
distribution from his Employer Accounts other than a lump sum distribution by
the close of the second Plan Year following the Plan Year in which his
employment is terminated, any amounts remaining in his Employer Accounts shall
continue to be maintained as separate accounts. At any relevant time, such
Member's nonforfeitable portion of his separate accounts shall be determined in
accordance with the following formula:
X=P(AB + (R x D)) - (R x D)
For purposes of applying the formula: X is the nonforfeitable portion of
such separate account at the relevant time; P is the Member's Vested Interest in
his Employer Contribution Account or Employer Matching Contribution Account at
the relevant time; AB is the balance of such separate account at the relevant
time; R is the ratio of the balance of such separate account at the relevant
time to the balance of such separate account after the withdrawal or
distribution; and D is the amount of the withdrawal or distribution. For all
other purposes of the Plan, a Member's separate accounts shall be treated as an
Employer Contribution Account or an Employer Matching Contribution Account. Upon
his incurring five consecutive One-Year Breaks-in-Service, the forfeitable
portion of a terminated Member's separate accounts and Employer Accounts shall
be forfeited as of the end of the Plan Year during which the terminated Member
incurred his fifth such consecutive One-Year Break-in-Service.
(d) With respect to a Member who terminates employment with the Employer
with a Vested Interest in his Employer Accounts greater than 0% but less than
100% and who is not otherwise subject to the forfeiture provisions of Paragraph
(a) or Paragraph (c) above, the forfeitable portion of his Employer Accounts
shall be forfeited as of the end of the Plan Year during which the terminated
Member incurs his fifth consecutive One-Year Break-in-Service.
(e) Any forfeitures occurring pursuant to Paragraphs (a), (c) or (d) above
shall be held in a suspense account and shall be applied to the payment of
administrative expenses of the Plan and Trust in accordance with Section 13.1.
For all Valuation Dates prior to such application, forfeited amounts held in the
suspense account shall not receive allocations of net income (or net loss)
pursuant to Section 4.4
(f) Distributions of benefits described in this Section shall be subject to
the time of payment requirements of Section 10.1
IX.
DEATH BENEFITS
9.1 DEATH BENEFITS. Upon the death of a Member while an Employee, the
Member's designated beneficiary shall be entitled to an Article X benefit equal
in value to the sum of:
(a) the amount in his Accounts as of the Valuation Date next
preceding his Benefit Commencement Date; and
(b) if the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during which
his death occurred, the amount of such Member's allocation of Employer
Discretionary Contributions and Employer Safe Harbor Contributions for such
Plan Year.
9.2 DESIGNATION OF BENEFICIARIES.
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(a) Each Member shall have the right to designate the beneficiary or
beneficiaries to receive payment of his Article X benefit in the event of his
death. Each such designation shall be made by executing the beneficiary
designation form prescribed by the Committee and filing same with the Committee.
Any such designation may be changed at any time by execution of a new
designation in accordance with this Section. Notwithstanding the foregoing, if a
Member who is married on the date of his death designates other than his
surviving spouse as his beneficiary, such designation shall not be effective
unless (1) such spouse has consented thereto in writing and such consent (A)
acknowledges the effect of such specific designation, (B) either consents to the
specific designated beneficiary (which designation may not subsequently be
changed by the Member without spousal consent) or expressly permits such
designation by the Member without the requirement of further consent by the
spouse and (C) is witnessed by a Plan representative (other than the Member) or
a notary public or (2) such consent may not be obtained because such spouse
cannot be located or because of other circumstances described by applicable
Treasury Regulations. Any such consent by such surviving spouse shall be
irrevocable.
(b) If no such designation is on file with the Committee at the time of the
death of the Member or such designation is not effective for any reason as
determined by the Committee, the designated beneficiary or beneficiaries to
receive such Article X benefit shall be as follows:
(1) If a Member leaves a surviving spouse, his Article X benefit shall
be paid to such surviving spouse;
(2) If a Member leaves no surviving spouse, his Article X benefit
shall be paid to such Member's executor or administrator or to his heirs at
law if there is no administration of such Member's estate.
(c) Notwithstanding the preceding provisions of this Section and to
the extent not prohibited by state or federal law, if a Member is divorced
from his spouse and at the time of his death is not remarried to the person
from whom he was divorced, and any designation of such divorced spouse as
his beneficiary under the Plan filed prior to the divorce shall be null and
void unless the contrary is expressly stated in writing filed with the
Committee by the Member. In the event the designation of a divorced spouse
as a Member's beneficiary is null and void pursuant to the provisions of
this Paragraph, such Member's designated beneficiary shall be determined in
accordance with the provisions of Paragraph (b) above as if such divorced
spouse did not survive the Member.
X.
TIME AND MANNER OF PAYMENT OF BENEFITS
10.1 TIME AND MANNER OF PAYMENT.
(a) Subject to the provisions of the remaining Paragraphs of this Section,
payment of a Member's benefit hereunder shall be made as soon as
administratively feasible after the Valuation Date coincident with or next
succeeding the date the Member or his beneficiary becomes entitled to a benefit
pursuant to Article VI, VII, VIII or IX.
(b) Unless (1) the Member has attained age sixty-five or died, (2) the
Member consents to a distribution pursuant to Paragraph (a) within the
ninety-day period ending on the date payment of his benefit hereunder is to
commence pursuant to Paragraph (a) or (3) the Member's Vested Interest in his
Accounts is not in excess of $3,500, the Member's Benefit Commencement Date
shall be deferred to the date which is as soon as administratively feasible
after the Valuation Date coincident with or next succeeding the earlier of the
date the Member attains age sixty-five or the Member's date of death, or such
earlier Valuation Date as the Member may elect by written notice to the
Committee prior to such Valuation Date. No less than thirty days and no more
than ninety days before his Benefit Commencement Date, the Committee shall
inform the Member of his right to defer his Benefit Commencement Date and shall
describe the Member's Direct Rollover election rights pursuant to Paragraph (g)
below. If a distribution is one to which sections 401(a)(11) and 417 of the Code
do not apply, such distribution may commence less than thirty days after the
notice required under section 1.411(a)-11(c) of the Treasury Regulations is
given,
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provided that (i) the plan administrator clearly informs the Member that the
Member has a right to a period of at least thirty days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (ii) the Member, after
receiving the notice, affirmatively elects a distribution.
(c) A Member's Benefit Commencement Date shall in no event be later than
the sixtieth day following the close of the Plan Year during which such Member
attains, or would have attained, his Normal Retirement Date or, if later,
terminates his employment with the Employer or a Controlled Entity.
(d) A Member's Benefit Commencement Date shall be in compliance with the
provisions of section 4091(a)(9) of the Code and applicable Treasury Regulations
thereunder and shall in no event be later than:
(1) In the case of a Member who attains the age of seventy and
one-half prior to January 1, 1988 and is not a "five-percent owner"
(within the meaning of section 416(i) of the Code) at any time during the
five Plan Year period ending in the calendar year in which such Member
attains the age of seventy and one-half, April 1st following the later of
(A) the calendar year in which such Member attains the age of seventy and
one-half, or (B) the calendar year in which such Member terminates his
employment with the Employer, or if such Member becomes a "five-percent
owner" following the end of such five Plan Year period, April 1st of the
calendar year following the calendar year in which such Member becomes a
"five-percent owner;"
(2) In the case of a Member who does not attain the age of seventy and
one-half prior to January 1, 1988 or is a "five-percent owner" (within
the meaning of section 416(i) of the Code) at any time during the five Plan
Year period ending in the calendar year in which such Member attains the
age of seventy and one-half, April 1st of the calendar year following the
calendar year in which such Member attains the age of seventy and one-half;
and
(3) In the case of a benefit payable pursuant to Article IX, the last
day of the five-year period following the death of such Member.
For purposes of Paragraph (d)(2) above, a Member who attains the age of
seventy and one-half in 1988, is not a "five-percent owner" (within the
meaning of section 416(i) of the Code) at any time during the five Plan Year
period ending in 1988 and does not terminate employment with the Employer prior
to January 1, 1989, shall be considered to attain the age of seventy and
one-half in 1989. Further, the preceding provisions of this Section
notwithstanding, a Member may not elect to defer the receipt of his benefit
hereunder to the extent that such deferral creates a death benefit that is more
than incidental within the meaning of section 401(a)(9)(G) of the Code and
applicable Treasury Regulations thereunder.
(e) Subject to the provisions of Paragraphs (c) and (d) above, a Member's
Benefit Commencement Date shall not occur before the expiration of the latest to
end of the following periods:
(1) a period during which the Member is employed by the Employer or
any Controlled Entity; or
(2) a period during which the Member is employed by a purchaser of
assets from the Employer or a Controlled Entity if such Member transfers to
employment with such purchaser in connection with such purchase.
(f) Subject to the provisions of Paragraph (g) below, a Member's benefit
shall be provided from the Member's Account balance(s) under the Plan and shall
be paid in one lump sum on the Member's Benefit Commencement Date. The Member's
benefit shall be paid to the Member unless the Member has died prior to his
Benefit Commencement Date, in which case the Member's benefit shall be paid to
his beneficiary designated in accordance with the provisions of Section 9.2.
(g) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Paragraph, a Distributee may
elect, at the time and in the manner prescribed by the Committee, to have all or
any portion of an Eligible Rollover Distribution (other than any portion
attributable to the offset of an outstanding loan balance of such Member
pursuant to the Plan's loan procedure) paid directly to an Eligible Retirement
Plan specified by the Distributee in a Direct Rollover. The preceding sentence
notwithstanding, a Distributee may elect a Direct Rollover pursuant to this
Section
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only if such Distributee's Eligible Rollover Distribution is $200 or more.
Furthermore, if less than 100% of the Member's Eligible Rollover Distribution is
to be a Direct Rollover, the amount of the Direct Rollover must be $500 or more.
Prior to any Direct Rollover pursuant to this Paragraph, the Distributee shall
furnish the Committee with a statement from the plan, account or annuity to
which the benefit is to be transferred verifying that such plan, account or
annuity is, or is intended to be, an Eligible Retirement Plan.
10.2 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of a
Member, if the Committee is unable to locate the Member or beneficiary to whom
such benefit is payable, upon the Committee's determination thereof, such
benefit shall be forfeited, held in a suspense account and available for
allocation to the Accounts of the eligible Members pursuant to Section 4.2 as of
the end of the Plan Year in which the forfeiture occurred. For all Valuation
Dates prior to such allocation, forfeited amounts held in the suspense account
shall not participate in allocations of the net income (or net loss) of the
Trust Fund. Notwithstanding the foregoing, if subsequent to any such forfeiture
the Member or beneficiary to whom such benefit is payable makes a valid claim
for such benefit, such forfeited benefit shall be restored to the Plan in the
manner provided in Section 8.4(b).
10.3 CLAIMS REVIEW. In any case in which a claim for Plan benefits of a
Member or beneficiary is denied or modified, the Committee shall furnish written
notice to the claimant within ninety days (or within 180 days if additional
information requested by the Committee necessitates an extension of the
ninety-day period), which notice shall:
(a) state the specific reason or reasons for the denial or
modification:
(b) provide specific reference to pertinent Plan provisions on which
the denial or modification is based;
(c) provide a description of any additional material or information
necessary for the Member, his beneficiary or representative to perfect the
claim and an explanation of why such material or information is necessary;
and
(d) explain the Plan's claim review procedure as contained herein.
In the event a claim for Plan benefits is denied or modified, if the
Member, his beneficiary or representative desires to have such denial or
modification reviewed, he must, within sixty days following receipt of the
notice of such denial or modification, submit a written request for review by
the Committee of its initial decision. In connection with such request, the
Member, his beneficiary or representative may review any pertinent documents
upon which such denial or modification was based any may submit issues and
comments in writing. Within sixty days following such request for review the
Committee shall, after providing a full and fair review, render its final
decision in writing to the Member, his beneficiary or representative stating
specific reasons for such decision and making specific references to pertinent
Plan provisions upon which the decision is based. If special circumstances
require an extension of such sixty-day period, the Committee's decision shall be
rendered as soon as possible, but not later than 120 days after receipt of the
request for review. If an extenstion of time for review is required, written
notice of the extension shall be furnished to the Member, beneficiary or
representative prior to the commencement of the extension period.
XI.
WITHDRAWALS AND LOANS
11.1 WITHDRAWALS.
(a) A Member who has a financial hardship, as determined by the Committee,
and who has made all available withdrawals pursuant to the provisions of any
other plans of the Employer and any Controlled Entities of which he is a member
and who has obtained all available loans pursuant to Section 11.2 and pursuant
to the provisions of any other plans of the Employer and any Controlled Entities
of which he is a member may withdraw from his Employer Accounts, his Rollover
Account and his Cash or Deferred Account amounts not to exceed the lesser of (1)
his Vested Interest in such Accounts or (2) the amount
I-21
determined by the Committee as being available for withdrawal pursuant to this
Paragraph. Such withdrawal shall come, first, from his Vested Interest in his
Employer Contribution Account, second, from his Vested Interest in his Employer
Matching Contribution Account, third, from his Rollover Account and, finally,
from his Cash or Deferred Account. For purposes of this Paragraph, financial
hardship means the immediate and heavy financial needs of the Member. A
withdrawal based upon financial hardship pursuant to this Paragraph shall not
exceed the amount required to meet the immediate financial need created by the
hardship and not reasonably available from other resources of the Member. The
amount required to meet the immediate financial need may include any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution. The determination of the
existence of a Member's financial hardship and the amount required to be
distributed to meet the need created by the hardship shall be made by the
Committee. A withdrawal shall be deemed to be made on account of an immediate
and heavy financial need of a Member if the withdrawal is for:
(1) expenses of medical care described in section 213(d) of the Code
previously incurred by the Member, the Member's spouse or any dependents of
the Member (as defined in section 152 of the Code) or necessary for those
persons to obtain medical care described in section 213(d) of the Code and
not reimbursed or reimbursable by insurance;
(2) costs directly related to the purchase of a principal residence of
the Member (excluding mortgage payments);
(3) payment of tuition and related educational fees for the next
twelve months of post-secondary education for the Member, or the Member's
spouse, children or dependents (as defined in section 152 of the Code);
(4) payments necessary to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's
principal residence; or
(5) such other financial needs which the Commissioner of Internal
Revenue may deem to be immediate and heavy financial needs through the
publication of revenue rulings, notices and other documents of general
applicability.
The decision of the Committee shall be final and binding, provided that all
Members similarly situated shall be treated in a uniform and nondiscriminatory
manner. The above notwithstanding, (1) withdrawals under this Paragraph from a
Member's Cash or Deferred Account shall be limited to the sum of the Member's
Cash or Deferred Contributions to the Plan, plus income allocable thereto and
credited to the Member's Cash or Deferred Account as of December 31, 1988, less
any previous withdrawals of such amounts, and (2) amounts allocated to a
Member's Cash or Deferred Account pursuant to the provisions of Section 4.2(d)
and Employer Matching Contributions used to satisfy the restrictions set forth
in Section 3.1(e) shall not be subject to withdrawal. A Member who makes a
withdrawal from his Cash or Deferred Account under this Paragraph may not again
make elective contributions or employee contributions to the Plan or any other
qualified or nonqualified plan of the Employer or any Controlled Entity for a
period of twelve months following such withdrawal. Further, such Member may not
make elective contributions under the Plan or any other plan maintained by the
Employer or any Controlled Entity for such Member's taxable year immediately
following the taxable year of the withdrawal in excess of the applicable limit
set forth in Section 3.1(d) for such next taxable year less the amount of such
Member's elective contributions for the taxable year of the withdrawal.
(b) All withdrawals pursuant to this Section shall be made by executing and
filing with the Committee the form prescribed by the Committee for such purpose.
Notwithstanding the provisions of this Section, not more than one withdrawal
pursuant to the Paragraphs above may be made in any one Plan Year and no
withdrawal shall be made from an Account to the extent such Account has been
pledged to secure a loan under Section 11.2. If a Member's Account from which a
withdrawal is made is invested in more than one Fund, the Member shall designate
which Fund, or combination of Funds, from which the withdrawal shall be made. In
the absence of such designation, the withdrawal shall be made pro rata from each
Fund in which such Account is invested. All withdrawals under this Section shall
be paid in cash. Any withdrawal
I-22
hereunder on or after January 1, 1993 shall be subject to the Direct Rollover
election described in Section 10.1(g).
(c) This Section shall not be applicable to a Member following termination
of employment and the amounts in such Member's Accounts shall be distributable
in accordance with the provisions of Article X.
11.2 LOANS.
(a) Upon application by (1) any Member who is an Employee or (2) any Member
no longer employed by the Employer, a beneficiary of a deceased Member or an
alternate payee under a qualified domestic relations order, as that term is
defined in section 414(p)(8) of the Code, who retains an Account balance under
the Plan and who is a party-in-interest, as that term is defined in section
3(14) of the Act, as to the Plan (an individual who is eligible to apply for a
loan under this Section being hereinafter referred to as a "MEMBER" for
purposes of this Section), the Committee may in its discretion direct the
Trustee to make a loan or loans to such Member, not to exceed 50% of the then
value of the Member's Vested Interest in his Accounts. Such loans shall be made
pursuant to the provisions of the Committee's written loan procedure, which
procedure is hereby incorporated by reference as a part of the Plan.
(b) A loan to a Member may not exceed 50% of the then value of such
Member's Vested Interest in his Accounts.
(c) Paragraph (b) above to the contrary notwithstanding, the amount of a
loan made to a Member under this Section shall not exceed an amount equal to the
difference between:
(1) the lesser of $50,000 (reduced by the excess, if any, of (A) the
highest outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which the loan is made, over
(B) the outstanding balance of loans from the Plan on the date on which the
loan is made) or one-half of the present value of the Member's total
nonforfeitable accrued benefit under all qualified plans of the Employer or
a Controlled Entity; minus
(2) the total outstanding loan balance of the Member under all other
loans from all qualified plans of the Employer or a Controlled Entity.
XII.
ADMINISTRATION OF THE PLAN
12.1 APPOINTMENT OF COMMITTEE. The general administration of the Plan
shall be vested in the Committee which shall be appointed by the Directors and
shall consist of one or more persons. Any individual, whether or not an
Employee, is eligible to become a member of the Committee. Each member of the
Committee shall, before entering upon the performance of his duties, qualify by
signing a consent to serve as a member of the Committee under and pursuant to
the Plan and by filing such consent with the records of the Committee.
12.2 TERM, VACANCIES, RESIGNATION AND REMOVAL. Each member of the
Committee shall serve until he resigns, dies or is removed by the Directors. At
any time during his term of office, a member of the Committee may resign by
giving written notice to the Directors and the Committee, such resignation to
become effective upon the appointment of a substitute member or, if earlier, the
lapse of thirty days after such notice is given as herein provided. At any time
during his term of office, and for any reason, a member of the Committee may be
removed by the Directors with or without cause, and the Directors may in their
discretion fill any vacancy that may result therefrom. Any member of the
Committee who is an Employee shall automatically cease to be a member of the
Committee as of the date he ceases to be employed by the Employer or a
Controlled Entity.
12.3 OFFICERS, RECORDS AND PROCEDURES. The Committee may select officers
and may appoint a secretary who need not be a member of the Committee. The
Committee shall keep appropriate records of its proceedings and the
administration of the Plan and shall make available for examination during
business hours to any Member or beneficiary such records as pertain to that
individual's interest in
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the Plan. The Committee shall designate the person or persons who shall be
authorized to sign for the Committee and, upon such designation, the signature
of such person or persons shall bind the Committee.
12.4 MEETINGS. The Committee shall hold meetings upon such notice and at
such time and places as it may from time to time determine. Notice to a member
shall not be required if waived in writing by that member. A majority of the
members of the Committee duly appointed shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other or other action taken without a meeting upon which written consent signed
by all of the members of the Committee.
12.5 SELF-INTEREST OF MEMBERS. No member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee member
is so disqualified to act and the remaining members cannot agree, the Directors
shall appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.
12.6 COMPENSATION AND BONDING. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
12.7 COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority and duty:
(a) to make rules, regulations and bylaws for the administration of
the Plan which are not inconsistent with the terms and provisions hereof,
provided such rules, regulations and bylaws are evidenced in writing and
copies thereof are delivered to the Trustee and to the Company, and to
enforce the terms of the Plan and the rules and regulation is promulgated
thereunder by the Committee;
(b) to construe in its discretion all terms, provisions, conditions
and limitations of the Plan. In all cases, the construction, necessary for
the Plan to qualify under the applicable provisions of the Code shall
control;
(c) to correct any defect or supply any omission or reconcile any
inconsistency that may appear in the Plan, in such manner and to such
extent as it shall deem in its discretion expedient to effectuate the
purposes of the Plan;
(d) to employ and compensate such accountants, attorneys, investment
advisors and other agents, employees, and independent contractors as the
Committee may deem necessary or advisable in the proper and efficient
administration of the Plan;
(e) to determine in its discretion all questions relating to
eligibility;
(f) to prescribe procedures to be followed by distributees in
obtaining benefits hereunder;
(g) to prepare, file and distribute, in such manner as the Committee
determines to be appropriate, such information and material as is required
by the reporting and disclosure requirements of the Act;
(h) to make a determination in its discretion as to the right of any
person to a benefit under the Plan;
(i) to receive and review reports from the Trustee and the Investment
Managers as to the financial condition of the Trust Fund, including its
receipts and disbursements.
(j) to instruct the Trustee as to the loans to Members pursuant to the
provision of Section 11.2;
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(k) to furnish the Employer any information necessary for the
preparation of such Employer's tax return or other information that the
Committee determines in its discretion is necessary for a legitimate
purpose;
(l) to require and obtain from the Employer and the Members any
information or data that the Committee determines is necessary for the
proper administration of the Plan;
(m) to review periodically the Plan's short-term and long-term
investment needs and goals and to communicate such needs and goals to the
Trustee and any investment manager as frequently as the Committee, in its
discretion, deems necessary for the proper administration of the Plan and
Trust; and
(n) to instruct the Trustee as to the management, investment, and
reinvestment of the Trust Fund.
12.8 EMPLOYER TO SUPPLY INFORMATION. The Employer shall supply full and
timely information to the Committee relating to the Compensation of all Members,
their ages, their retirement, death or other cause for termination of employment
and such other pertinent facts as the Committee may require. The Employer shall
advise the Trustee of such of the foregoing facts as are deemed necessary for
the Trustee to carry out the Trustee's duties under the Plan. When making a
determination in connection with the Plan, the Committee shall be entitled to
rely upon the aforesaid information furnished by the Employer.
12.9 INDEMNIFICATION. The Company shall indemnify and hold harmless each
member of the Committee against any and all expenses and liabilities arising out
of his or her administrative functions or fiduciary responsibilities, including
any expenses and liabilities which are caused by or result from an act or
omission constituting the negligence of such member in the performance of such
functions or responsibilities, but excluding expenses and liabilities that are
caused by or result from such member's own gross negligence or willful
misconduct. Expenses against which such member shall be indemnified hereunder
shall include, without limitation, the amounts of any settlement or judgment,
costs, counsel fees and related charges reasonably incurred in connection with a
claim asserted or a proceeding brought or settlement thereof.
12.10 PLAN ADMINISTRATOR AND NAMED FIDUCIARY. For purposes of the Act,
Texas Petrochemicals Corporation shall be the Plan "administrator" and shall
be the "named fiduciary" with respect to the general administration of the
Plan (except as to the investment of the assets of the Trust Fund).
XIII.
ADMINISTRATION OF FUNDS
13.1 PAYMENT OF EXPENSES. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, expenses of the Committee and the cost of furnishing any bond or security
required of the Committee, shall be paid by the Trustee from the Trust Fund and,
until paid, shall constitute a claim against the Trust Fund which is paramount
to the claims of Members and beneficiaries; provided, however, that (a) the
obligation of the Trustee to pay such expenses from the Trust Fund shall cease
to exist to the extent such expenses are paid by the Employer and (b) in the
event the Trustee's compensation is to be paid, pursuant to this Section, from
the Trust Fund, any individual serving as Trustee who already receives full-time
pay from an employer or an association of employers whose employees are
participants in the Plan, or from an employee organization whose members are
participants in the Plan, shall not receive any additional compensation for
serving as Trustee. This Section shall be deemed a part of any contract to
provide for expenses of Plan and Trust administration, whether or not the
signatory to such contract is, as a matter of convenience, the Employer.
13.2 TRUST FUND PROPERTY. All income, profits, recoveries, contributions,
forfeitures and any and all moneys, securities and properties of any kind at any
time received or held by the Trustee hereunder shall be held for investment
purposes as a commingled Trust Fund. The Committee shall maintain Accounts in
the name of each Member, but the maintenance of an Account designated as the
Account of a Member shall not mean that such Member shall have a greater or
lesser interest than due him by operation of the
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Plan and shall not be considered as segregating any funds or property from any
other funds or property contained in the commingled fund. No Member shall have
any title to any specific asset in the Trust Fund.
13.3 DISTRIBUTIONS FROM MEMBERS' ACCOUNTS. Distributions from a Member's
Accounts shall be made by the Trustee only if, when, and in the amount and
manner directed in writing by the Committee. Any distribution made to a Member
or for his benefit shall be debited to such Member's Account or Accounts. All
distributions hereunder shall be made in cash except as otherwise specifically
provided herein.
XIV.
TRUSTEE AND ADMINISTRATION OF TRUST FUND
As a means of administering the assets of the Plan, the Company has entered
into a Trust Agreement with CG Trust Company as Trustee. The administration of
the assets of the Plan and the duties, obligations, and responsibilities of the
Trustee shall be governed by the Trust Agreement. The Trust Agreement may be
amended from time to time as the Company deems advisable in order to effectuate
the purposes of the Plan. The Trust Agreement is incorporated herein by
reference and thereby made a part of the Plan hereof.
XV.
FIDUCIARY PROVISIONS
15.1 ARTICLE CONTROLS. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
15.2 GENERAL ALLOCATION OF DUTIES. Each fiduciary with respect to the Plan
shall have only those specific powers, duties, responsibilities and obligations
as are specifically given him under the Plan. The Directors shall have the sole
authority to appoint and remove the Trustee or members of the Committee. Except
as otherwise specifically provided, the Committee shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described herein. Except as otherwise specifically provided, the
Trustee shall have the sole responsibility for the administration, investment
and management of the assets held under the Plan. However, if the Committee, as
a co-fiduciary, shall exercise its power given hereunder at any time, and from
time to time, by written notice to the Trustee, to direct the Trustee in the
management, investment, and reinvestment of the Trust Fund, then in such event
the Trustee shall be subject to all proper directions of the Committee that are
made in accordance with the terms of the Plan and the Act. It is intended under
the Plan that each fiduciary shall be responsible for the proper exercise of his
own powers, duties, responsibilities and obligations hereunder and shall not be
responsible for any act or failure to act of another fiduciary except to the
extent provided by law or as specifically provided herein.
15.3 FIDUCIARY DUTY. Each fiduciary under the Plan, including but not
limited to the Committee and the Trustee as "named fiduciaries," shall
discharge his duties and responsibilities with respect to the Plan:
(a) solely in the interest of the Members, for the exclusive purpose
of providing benefits to Members, and their beneficiaries, and defraying
reasonable expenses of administering the Plan;
(b) 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;
(c) by diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is prudent not to
do so; and
(d) in accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with
applicable law.
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No fiduciary shall cause the Plan or Trust Fund to enter into a
"prohibited transaction" as provided in section 4975 of the Code or section
406 of the Act.
15.4 DELEGATION AND ALLOCATION. The Committee may appoint subcommittees,
individuals or any other agents as it deems advisable and may delegate to any of
such appointees any or all of the powers and duties of the Committee. Such
appointment and delegation must be in writing, specifying the powers or duties
being delegated, and must be accepted in writing by the delegate. Upon such
appointment, delegation and acceptance, the delegating Committee members shall
have no liability for the acts or omissions of any such delegatee, as long as
the delegating Committee members do not violate their fiduciary responsibility
in making or continuing such delegation.
15.5 INVESTMENT MANAGER. The Directors may, in their sole discretion,
appoint an "investment manager," with power to manage, acquire or dispose of
any asset of the Plan and to direct the Trustee in this regard, so long as:
(a) the investment manager is (1) registered as an investment adviser
under the Investment Advisers Act of 1940, (2) a bank, as defined in the
Investment Advisers Act of 1940, or (3) an insurance company qualified to
do business under the laws of more than one state; and
(b) such investment manager acknowledges in writing that he is a
fiduciary with respect to the Plan.
Upon such appointment, the Directors shall not be liable for the acts of
the investment manager, as long as the Directors do not violate their fiduciary
responsibility in making or continuing such appointment. The Trustee shall
follow the directions of such investment manager and shall not be liable for the
acts or omissions of such investment manager. The investment manager may be
removed by the Directors at any time and within their sole discretion.
XVI.
AMENDMENTS
16.1 RIGHT TO AMEND. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Company may from time to time amend, in
whole or in part, any or all of the provisions of the Plan on behalf of the
Company and all Employers. Specifically, but not by way of limitation, the
Company may make any amendment necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive.
16.2 LIMITATION ON AMENDMENTS. No amendment of the Plan may be made which
would vest in the Employer, directly or indirectly, any interest in or control
of the Trust Fund. No amendment may be made which would vary the Plan's
exclusive purpose of providing benefits to Members, and their beneficiaries, and
defraying reasonable expenses of administering the Plan or which would permit
the diversion of any part of the Trust Fund from that exclusive purpose. No
amendment shall be made which would reduce any then nonforfeitable interest of a
Member. No amendment shall increase the duties or responsibilities of the
Trustee unless the Trustee consents thereto in writing.
XVII.
DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
PARTIAL TERMINATION AND MERGER OR CONSOLIDATION
17.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY TERMINATE.
The Employer has established the Plan with the bona fide intention and
expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the Directors
realize that circumstances not now foreseen, or circumstances beyond its
control, may make it either impossible or inadvisable to continue to make its
contributions to the Plan. Therefore, the Directors shall have the power to
discontinue contributions to the Plan, terminate the Plan or partially terminate
the
I-27
Plan at any time hereafter. Each member of the Committee and the Trustee shall
be notified of such discontinuance, termination or partial termination.
17.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION
OR PARTIAL TERMINATION.
(a) If the Plan is amended so as to permanently discontinue Employer
contributions, or if Employer contributions are in fact permanently
discontinued, the Vested Interest of each affected Member shall be 100%,
effective as of the date of discontinuance. In case of discontinuance, the
Committee shall remain in existence and all other provisions of the Plan which
are necessary, in the opinion of the Committee, for equitable operation of the
Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the Vested Interest
of each affected Member shall be 100%, effective as of the termination date or
partial termination date, as applicable. Unless the Plan is otherwise amended
prior to dissolution of the Company, the Plan shall terminate as of the date of
dissolution of the Company.
(c) Upon discontinuance, termination or partial termination, any previously
unallocated contributions, forfeitures and net income (or net loss) shall be
allocated among the Accounts of the Members on such date of discontinuance,
termination or partial termination according to the provisions of Article IV, as
if such date of discontinuance or termination were a Valuation Date. Thereafter,
the net income (or net loss) shall continue to be allocated to the Accounts of
the Members until the balances are distributed. In the event of termination, the
date of the final distribution shall be treated as a Valuation Date.
(d) In the case of a termination or partial termination of the Plan, and in
the absence of a Plan amendment to the contrary, the Trustee shall pay the
balance of the Accounts of a Member for whom the Plan is so terminated, or who
is affected by such partial termination, to such Member, subject to the time of
payment, manner of payment and consent provisions of Article X.
17.3 MERGER, CONSOLIDATION OR TRANSFER. This Plan and Trust Fund may not
merge or consolidate with, or transfer its assets or liabilities to, any other
plan, unless immediately thereafter each Member would, in the event such other
plan terminated, be entitled to a benefit which is equal to or greater than the
benefit to which he would have been entitled if the Plan were terminated
immediately before the merger, consolidation or transfer.
XVIII.
ADOPTING EMPLOYERS
18.1 ADOPTION BY OTHER EMPLOYERS. It is contemplated that other
corporations, associations, partnerships or proprietorships may adopt this Plan
and thereby become Employers. Any such entity, whether or not presently
existing, may become, upon approval of the Company, a party hereto by
appropriate action of its Board of Directors or noncorporate counterpart. The
provisions of the Plan shall apply separately and equally to each Employer and
its employees in the same manner as is expressly provided for the Company and
its Employees, except that the power to appoint or otherwise affect the
Committee or the Trustee and the power to amend or terminate the Plan and Trust
Agreement shall be exercised by the Company alone. Nevertheless, any Employer
may, with the consent of the Company, incorporate in its adoption agreement or
in an amendment document specific provisions relating to the operation of the
Plan, and such provisions shall become a part of the Plan as to such employer
only. Transfer of employment among Employers shall not be considered a
termination of employment hereunder, and an Hour of Service with one shall be
considered as an Hour of Service with all others. Any Employer may, by
appropriate action of its Board of Directors or noncorporate counterpart,
terminate its participation in the Plan. Moreover, the Company may, in its
discretion, terminate an Employer's Plan participation at any time.
18.2 SINGLE PLAN. For purposes of the Code and the Act, the Plan as adopted
by the Employers shall constitute a single plan rather than a separate plan of
each Employer. All assets in the Trust Fund shall be available to pay benefits
to all Members and their beneficiaries.
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XIX.
MISCELLANEOUS PROVISIONS
19.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of this Plan
shall not be deemed to be a contract between the Employer and any person or to
be consideration for the employment of any person. Nothing herein contained
shall be deemed to give any person the right to be retained in the employ of the
Employer or to restrict the right of the Employer to discharge any person at any
time nor shall the Plan be deemed to give the Employer the right to require any
person to remain in the employ of the Employer or to restrict any person's right
to terminate his employment at any time.
19.2 PAYMENTS SOLELY FROM TRUST FUND. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund and neither the
Employer nor the Trustee assumes any liability or responsibility for the
adequacy thereof. The Committee or the Trustee may require execution and
delivery of such instruments as are deemed necessary to assure proper payment of
any benefits.
19.3 ALIENATION OF INTEREST FORBIDDEN. Except as otherwise provided with
respect to "qualified domestic relations orders" pursuant to section 206(d) of
the Act and sections 401(a)(13) and 414(p) of the Code and except as otherwise
provided under other applicable law, no right or interest of any kind in any
benefit shall be transferable or assignable by any Member or any beneficiary or
be subject to anticipation, adjustment, alienation, encumbrance, garnishment,
attachment, execution or levy of any kind. Plan provisions to the contrary
notwithstanding, the Committee shall comply with the terms and provisions of any
"qualified domestic relations orders," including orders which require
distributions to an alternate payee prior to a Member's "earliest retirement
age" as such term is defined in section 206(d)(3)(E)(ii) of the Act and section
414(p)(4)(B) of the Code, and shall establish appropriate procedures to effect
the same.
19.4 NO BENEFITS TO THE EMPLOYER. No part of the corpus or income of the
Trust Fund shall be used for any purpose other than the exclusive purpose of
providing benefits for the Members and their beneficiaries and defraying
reasonable expenses of administering the Plan. Anything to the contrary herein
notwithstanding, the Plan shall never be construed to vest any rights in the
Employer other than those specifically given hereunder.
19.5 PAYMENTS TO MINORS AND INCOMPETENTS. If a Member or beneficiary
entitled to receive a benefit under the Plan is a minor or is determined by the
Committee in its discretion to be incompetent or is adjudged by a court of
competent jurisdiction to be legally incapable of giving valid receipt and
discharge for a benefit provided under the Plan, the Committee may pay such
benefit to the duly appointed guardian or conservator of such Member or
beneficiary or to any third party who is eligible to receive such benefit for
the account of such Member or beneficiary. Such payment shall operate as a full
discharge of all liabilities and obligations of the Committee, the Trustee, the
Employer, and any fiduciary of the Plan with respect to such benefit.
19.6 MEMBER'S ADDRESS. It shall be the affirmative duty of each Member to
inform the Committee of, and to keep on file with the Committee, his current
mailing address and the current mailing address of his designated beneficiary.
If a Member fails to keep the Committee informed of his current mailing address
and the current mailing address of his designated beneficiary, neither the
Committee, the Trustee, the Employer, nor any fiduciary under the Plan shall be
responsible for any late or lost payment of a benefit or for failure of any
notice to be provided timely under the terms of the Plan.
19.7 SEVERABILITY. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
19.8 JURISDICTION. The situs of the Plan and the Trust hereby created is
Texas. All provisions of the Plan shall be construed in accordance with the laws
of Texas except to the extent preempted by federal law.
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XX.
TOP-HEAVY STATUS
20.1 ARTICLE CONTROLS. Any Plan provisions to the contrary
notwithstanding, the provisions of this Article shall control to the extent
required to cause the Plan to comply with the requirements imposed under section
416 of the Code.
20.2 DEFINITIONS. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) ACCOUNT BALANCE: As of any Valuation Date, the aggregate amount
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Employer or a Controlled Entity
(excluding employee contributions which were deductible within the meaning
of section 219 of the Code and rollover or transfer contributions made
after December 31, 1983, by or on behalf of such individual to such plan
from another qualified plan sponsored by an entity other than the Employer
or a Controlled Entity), increased by (1) the aggregate distributions made
to such individual from such plan during a five-year period ending on the
Determination Date and (2) the amount of any contributions due as of the
Determination Date immediately following such Valuation Date.
(b) ACCRUED BENEFIT: As of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative accrued
benefit (excluding the portion thereof which is attributable to employee
contributions which were deductible pursuant to section 219 of the Code, to
rollover or transfer contributions made after December 31, 1983 by or on
behalf of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or a Controlled Entity, to
proportional subsidies or to ancillary benefits) of an individual under a
qualified defined benefit plan maintained by the Employer or a Controlled
Entity increased by (1) the aggregate distributions made to such individual
from such plan during a five-year period ending on the Determination Date
and (2) the estimated benefit accrued by such individual between such
Valuation Date and the Determination Date immediately following such
Valuation Date. Solely for the purpose of determining top-heavy status, the
Accrued Benefit of an individual shall be determined under (1) the method,
if any, that uniformly applies for accrual purposes under all qualified
defined benefit plans maintained by the Employer and the Controlled
Entities or (2) if there is no such method, as if such benefit accrued not
more rapidly than under the slowest accrual rate permitted under section
411(b)(1)(C) of the Code.
(c) AGGREGATION GROUP: The group of qualified plans maintained by
the Employer and each Controlled Entity consisting of (1) each plan in
which a Key Employee participates and each other plan which enables a plan
in which a Key Employee participates to meet the requirements of sections
401(a)(4) or 410 of the Code or (2) each plan in which a Key Employee
participates, each other plan which enables a plan in which a Key Employee
participates to meet the requirements of sections 401(a)(4) or 410 of the
Code and any other plan which the Employer elects to include as a part of
such group; provided, however, that the Employer may elect to include a
plan in such group only if the group will continue to meet the requirements
of sections 401(a)(4) and 410 of the Code with such plan being taken into
account.
(d) ASSUMPTIONS: The interest rate and mortality assumptions specified
for top-heavy status determination purposes in any defined benefit plan
included in the Aggregation Group including the Plan.
(e) DETERMINATION DATE: For the first Plan Year of any plan, the last
day of such Plan Year and for each subsequent Plan Year of such plan, the
last day of the preceding Plan Year.
(f) KEY EMPLOYEE: A "key employee" as defined in section 416(i) of
the Code and the Treasury Regulations thereunder.
I-30
(g) PLAN YEAR: With respect to any plan, the annual accounting period
used by such plan for annual reporting purposes.
(h) REMUNERATION: Compensation withing the meaning of section
415(c)(3) of the Code, as limited by section 401(a)(17) of the Code.
(i) VALUATION DATE: With respect to any Plan Year of any defined
contribution plan, the most recent date within the twelve-month period
ending on a Determination Date as of which the trust fund established under
such plan was valued and the net income (or loss) thereof allocated to
participants' accounts. With respect to any Plan Year of any defined
benefit plan, the most recent date within a twelve-month period ending on a
Determination Date as of which the plan assets were valued for purposes of
computing plan costs for purposes of the requirements imposed under section
412 of the Code.
20.3 TOP-HEAVY STATUS.
(a) The Plan shall be deemed to be top-heavy for a Plan Year, if, as of the
Determination Date for such Plan Year, (1) the sum of Account Balances of
Members who are Key Employees exceeds 60% of the sum of Account Balances of all
Members unless an Aggregation Group including the Plan is not top-heavy or (2)
an Aggregation Group including the Plan is top-heavy. An Aggregation Group shall
be deemed to be top-heavy as of a Determination Date if the sum (computed in
accordance with section 416(g)(2)(B) of the Code and the Treasury Regulations
promulgated thereunder) of (1) the Account Balances of Key Employees under all
defined contribution plans included in the Aggregation Group and (2) the Accrued
Benefits of Key Employees under all defined benefit plans included in the
Aggregation Group exceeds 60% of the sum of the Account Balances and the Accrued
Benefits of all individuals under such plans. Notwithstanding the foregoing, the
Account Balances and Accrued Benefits of individuals who are not Key Employees
in any Plan Year but who were Key Employees in any prior Plan Year shall not be
considered in determining the top-heavy status of the Plan for such Plan Year.
Further, notwithstanding the foregoing, the Account Balances and Accrued
Benefits of individuals who have not performed services for the Employer or any
Controlled Entity at any time during the five-year period ending on the
applicable Determination Date shall not be considered.
(b) If the Plan is determined to be top-heavy for a Plan Year, the Employer
shall contribute to the Plan for such Plan Year on behalf of each Member who is
not a Key Employee and who has not terminated his employment as of the last day
of such Plan Year an amount equal to:
(1) the lesser of (A) 3% of such Member's Remuneration for such Plan
Year of (B) a percent of such Member's Remuneration for such Plan Year
equal to the greatest percent determined by dividing for each Key Employee
the amounts allocated to such Key Employee's Cash or Deferred Account and
Employer Accounts for such Plan Year by such Key Employee's Remuneration;
reduced by
(2) the amount of Employer Discretionary Contributions allocated to
such Member's Accounts for such Plan Year.
The minimum contribution required to be made for a Plan Year pursuant to this
Paragraph for a Member employed on the last day of such Plan Year shall be made
regardless of whether such Member is otherwise ineligible to receive an
allocation of the Employer's contributions for such Plan Year. Notwithstanding
the foregoing, if the Plan is deemed to be top-heavy for a Plan Year, the
Employer's contribution for such Plan Year pursuant to this Paragraph shall be
increased by substituting "4%" in lieu of "3%" in Clause (1) hereof to the
extent that the Directors determine to so increase such contribution to comply
with the provisions of section 416(h)(2) of the Code. Notwithstanding the
foregoing, no contribution shall be made pursuant to this Paragraph for a Plan
Year with respect to a Member who is a participant in another defined
contribution plan sponsored by the Employer or a Controlled Entity if such
Member receives under such other defined contribution plan (for the plan year of
such plan ending with or within the Plan Year of this Plan) a contribution which
is equal to or greater than the minimum contribution required by section
416(c)(2) of the Code. Notwithstanding the foregoing, no contribution shall be
made pursuant to this Paragraph for a Plan Year with respect to a Member who is
a participant in a defined benefit plan sponsored
I-31
by the Employer or a Controlled Entity if such Member accrues under such defined
benefit plan (for the plan year of such plan ending with or within the Plan Year
of this Plan) a benefit which is at least equal to the benefit described in
section 416(c)(1) of the Code. If the preceding sentence is not applicable, the
requirements of this Paragraph shall be met by providing a minimum benefit under
such defined benefit plan which, when considered with the benefit provided under
the Plan as an offset, is at least equal to the benefit described in section
416(c)(1) of the Code.
20.4 TERMINATION OF TOP-HEAVY STATUS. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined to no longer be top-heavy.
20.5 EFFECT OF ARTICLE. Notwithstanding anything contained herein to the
contrary, the provisions of this Article shall automatically become inoperative
and of no effect to the extent not required by the Code or the Act.
EXECUTED this 17th day of May, 1995.
TEXAS PETROCHEMICALS CORPORATION
By B. W. WAYCASTER
I-32