EXHIBIT 10.12
AMGEN RETIREMENT
AND SAVINGS PLAN
(As Amended and Restated Effective October 23, 2000)
AMGEN RETIREMENT AND SAVINGS PLAN
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(As Amended and Restated Effective October 23, 2000)
ARTICLE 1. INTRODUCTION AND PLAN HISTORY
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The Plan was adopted effective as of April 1, 1985. The Plan was last amended
and restated as of April 1, 1996, to reflect previously adopted amendments and
to make other changes. Certain provisions may be effective at other times, as
specified. The Plan is intended to qualify under Sections 401(a) and 401(k) and
related sections of the Code, and under Section 407(d)(3)(A) of ERISA. The Plan
is subject to amendment or termination at any time, including (without
limitation) amendments required to meet regulations and rules issued by the
Secretary of the Treasury or his or her delegate or the Secretary of Labor.
Certain capitalized terms used in the text of the Plan are defined in Article 2
in alphabetical order.
ARTICLE 2. DEFINITIONS
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2.1 "Accounts" means the separate accounts maintained for each Participant as
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a part of the Trust Fund. Each Participant's Accounts are credited with
the Participant's Employee Contributions, his or her share of Company
Contributions and Forfeitures and any income, gains, expenses and losses
accruing on amounts previously credited to the Accounts.
2.2 "Affiliated Group" means the Company and any entity related to the Company
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under Sections 414(b), (c), (m) or (o) of the Code. In addition, the term
"Affiliated Group" includes any other entity that the Company has
designated in writing as a member of the Affiliated Group for purposes of
the Plan. An entity shall be considered a member of the Affiliated Group
only with respect to periods for which this designation is in effect or
during which the relationship described in the first sentence of this
Section exists. An "Affiliate" is a member of the Affiliated Group.
2.3 "Aggregate 401(k) Contributions" which is a term used in specifying
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certain limitations on Plan contributions, is defined in Section 13.9.
2.4 "Aggregate 401(m) Contributions" which is a term used in specifying
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certain limitations on Plan contributions, is defined in Section 14.7.
2.5 "Alternate Payee" means a spouse, former spouse, child or other dependent
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of a Participant who is recognized by a domestic relations order as having
a right to receive all or a portion of the Participant's Plan Benefit.
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2.6 "Annual Additions" which is a term used in specifying certain limitations
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on Plan contributions, is defined in Section 16.5.
2.7 "Annual Deferral Limit" which is a term used in specifying certain
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limitations on Plan contributions, is defined in Section 13.9.
2.8 "Beneficiary" means the person or persons entitled to receive a
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Participants Plan Benefit after the Participant's death, as provided in
Section 8.12.
2.9 "Board" means the Board of Directors of the Company, as constituted from
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time to time.
2.10 "Break in Service" means any Plan Year during which the Participant
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completes less than 501 Hours of Service. Solely for the purpose of
determining whether a Break in Service has occurred, an Employee who is
absent from work by virtue of (a) the Employee's pregnancy, (b) the birth
of the Employee's child, (c) the placement of a child with the employee by
adoption, (d) the change for any such child for a period of up to one year
immediately following such birth or placement, (e) Disability, (f) service
in the armed forces of the United States during a period (including a
post-discharge period) that entitles the Employee to reemployment rights
guaranteed by law or (g) a leave of absence taken under the terms of the
federal Family Medical Leave Act or applicable state family and medical
leave act, shall be credited with up to 501 additional Hours of Service.
Such additional Hours of Service in such period of absence shall be based
on his or her regular work schedule immediately prior to such period;
provided, however, that such additional Hours of Service shall be credited
during the Plan Year in which the absence from work begins only if they
would prevent a Break in Service from occurring for that year. In all
other cases, the additional Hours of Service shall be credited during the
immediately following Plan Year.
2.11 "Code" means the Internal Revenue Code of 1986, as amended from time to
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time.
2.12 "Company" means Amgen Inc., a Delaware corporation.
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2.13 "Company Contributions" means Matching Contributions, Nonelective
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Contributions, Qualified Nonelective Contributions and Qualified Matching
Contributions.
2.14 "Company Stock" means shares of common stock issued by the Company.
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2.15 "Company Stock Fund" means an Investment Fund primarily invested in
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Company Stock.
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2.16 "Compensation" is the term generally used under the Plan to describe the
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amount with respect to which Plan contributions are made and means an
Eligible Employee's wages, salaries, fees for professional services, and
other amounts received (without regard to whether or not an amount is paid
in cash) for personal services actually rendered in the course of
employment with any member of the Affiliated Group to the extent that the
amounts are includable in gross income (including, but not limited to,
commissions paid to salespersons, compensation for services on the basis
of a percentage of profits, commissions on reimbursements or other expense
allowances under a nonaccountable plan (as described in Treasury
Regulation Section 1.62-2(c)), but excluding any "goods and services
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allowance" provided to certain expatriate staff members. "Compensation"
shall be computed without regard to any election to reduce or defer salary
under this Plan or any cafeteria plan under Section 125 of the Code.
"Compensation" shall not include: (a) any Company Contributions to this
Plan or any other employee benefit plan for or on account of the Employee,
except as otherwise provided in the preceding sentence; (b) the items
described in Treasury Regulation Section 1.415-2(d)(3), which, among other
items, would exclude from compensation amounts realized from the exercise
of a nonqualified stock option (or when restricted stock (or property)
held by an Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture under Section 83 of the Code)
and amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; or (c) amounts in excess of the
Compensation Limitation.
2.17 "Compensation Limitation" means the limitation in effect under Section
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401(a)(17) of the Code for the Plan Year.
2.18 "Disability" means that the Participant is determined, under Title II or
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XVI of the Social Security Act, to have been disabled at the time of his
or her termination of employment. In order for a Participant's Accounts to
become fully vested on account of Disability pursuant to Sections 7.2 and
7.3 of the Plan, the Participant must submit evidence of the Social
Security Administration's determination of disability to the Company prior
to the distribution (or deemed distribution) of the Participant's
Accounts.
2.19 "Eligible Employee" means an Employee described in Section 3.3.
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2.20 "Employee" means an individual who (a) on the Payroll of a member of the
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Affiliated Group or (b) is a "leased employee" (within the meaning of
Section 414(n) of the Code) with respect to a member of the Affiliated
Group. "Employee" shall not include a nonresident alien who receives no
earned income (within the meaning of Section 911(b) of the Code) from a
member of the Affiliated Group that constitutes income from sources within
the United States (within the meaning of Section 861(a)(3) of the Code).
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2.21 "Employee Contributions" means Participant Elected Contributions and
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Rollover Contributions.
2.22 "ERISA" means the Employee Retirement Income Security Act of 1974 (P.L.
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93-406), as amended.
2.23 "Excess Aggregate Contributions" which is a term used in specifying
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certain limitations on Plan contributions, is defined in Section 14.7.
2.24 "Excess Contributions" which is a term used in specifying certain
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limitations on Plan contributions, is defined in Section 13.9.
2.25 "Excess Deferrals" which is a term used in specifying certain limitations
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on Plan contributions, is defined in Section 13.9.
2.26 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
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regulations promulgated thereunder.
2.27 "Five-Year Break in Service" means five or more consecutive one-year
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Breaks in Service.
2.28 "Forfeiture" is defined in Section 7.4.
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2.29 "Fund" or "Investment Fund" means a separate fund in which contributions
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to the Plan are invested in accordance with Article 6.
2.30 "Hardship Withdrawal" is a partial distribution of a Participant's
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Account made while he or she is an Employee and in the limited
circumstances described in Section 11.2.
2.31 "Highly Compensated Employee" is defined in Article 12.
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2.32 "Hour of Service" means:
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(a) Each hour for which an Employee is directly or indirectly paid, or
entitled to payment, by a member of the Affiliated Group for the
performance of services;
(b) Each hour for which an Employee is directly or indirectly paid, or
entitled to payment, by a member of the Affiliated Group on account of
a period of time during which no services are performed (without
regard to whether the employment relationship between the Employee and
the member of the Affiliated Group has terminated) due to vacation,
holiday, illness, incapacity, disability, layoff, jury duty, military
duty or leave of absence with pay; and
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(c) Each hour for which an Employee is directly or indirectly paid, or
entitled to payment of an amount as back pay (without regard to
mitigation of damages) either awarded or agreed to by a member of the
Affiliated Group.
The foregoing notwithstanding:
(1) No more than 501 Hours of Service shall be credited to an Employee
under Subsection (b) or (c) above on account of any single
continuous period of time during which no services are performed.
(2) An hour for which an Employee is directly or indirectly paid or
entitled to payment by a member of the Affiliated Group on account
of a period during which no services are performed shall not
constitute an Hour of Service hereunder if such payment is made or
due under a plan maintained solely for the purpose of complying
with applicable workers' compensation, unemployment compensation
or disability insurance laws.
(3) Hours of Service shall not be credited for payments that solely
reimburse an Employee for medical or medically related expenses.
(4) The same Hour of Service shall not be credited to an Employee both
under Subsection (a) or (b) and under Subsection (c).
(5) The computation period to which Hours of Service determined under
Subsection (b) or (c) are to be credited shall be determined under
applicable federal law and regulations, including, without
limitation, Department of Labor Regulation Section 2530.200b-2(b),
(c) and (d).
The Company shall determine the number of Hours of Service, if any, to
be credited to an Employee under the foregoing rules in a uniform and
nondiscriminatory manner and in accordance with applicable federal laws
and regulations, including, without limitation, Department of Labor
Regulation Section 2530.200b-3.
2.33 "Normal Retirement Age" means the date on which a Participant attains age
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65.
2.34 "Participant" means any person who elects to participate in the Plan as
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provided in Article 3.
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2.35 "Participating Company" means the Company, and any other member of the
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Affiliated Group that the Company has designated in writing as a
Participating Company, as set forth on Appendix A.
2.36 "Payroll" means the system used by an entity to pay those individuals it
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regards as its employees for their services and to withhold federal income
and employment taxes from the compensation it pays to such employees.
"Payroll" does not include any system the entity uses to pay individuals
whom it does not regard as its employees and for whom it does not actually
withhold federal income and employment taxes (including, but not limited
to, individuals it regards as independent contractors, consultants or
employees of temporary employment agencies).
2.37 "Plan" means the Amgen Retirement and Savings Plan, as amended from time
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to time.
2.38 "Plan Benefit" means the Participant's Accounts under the Plan, to the
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extent vested.
2.39 "Plan Year" means the calendar year.
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2.40 "QDRO" means a qualified domestic relations order (as defined in Section
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414(p) of the Code).
2.41 "Qualified Joint and Survivor Annuity" means an annuity for the life of
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the Participant with a survivor annuity for the life of his or her spouse
that is not less than fifty percent (50%) nor more than one hundred
percent (100%) of the amount of the annuity payable during the joint lives
of the Participant and his or her spouse. The value of the Qualified Joint
and Survivor Annuity shall be not less than the value of the Participant's
nonforfeitable interest in his or her Account.
2.42 "Rollover Contribution" means an amount contributed to the Plan by an
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Eligible Employee pursuant to Section 4.5.
2.43 "Salary Deferral Agreement" means the agreement between the Participating
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Company and an Employee to reduce the Employee's Compensation as provided
for in Article 4.
2.44 "Section 414(s) Compensation" which is a term used in specifying certain
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limitations on Plan contributions, is defined in Section 13.9.
2.45 "Section 415 Compensation" which is a term used in specifying certain
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limitations on Plan contributions, is defined in Section 16.5.
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2.46 "Section 415 Employer Group" which is a term used in specifying certain
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limitations on Plan contributions, is defined in Section 16.5.
2.47 "Single Life Annuity" means an annuity under which payments are made to a
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person for his or her life and cease upon his or her death.
2.48 "Top-Paid Group" which is used in the definition of the term "Highly
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Compensated Employee", is defined in Section 12.4(a).
2.49 "Total Compensation" which is used in the definition of the term "Highly
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Compensated Employee", is defined in Section 12.4(b).
2.50 "Trust Agreement" means the trust agreement entered into pursuant to the
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Plan by the Company and the Trustee, as amended from time to time.
2.51 "Trustee" means the trustee or trustees appointed by the Company pursuant
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to the Plan to hold the assets of the Plan in trust, and any successor
trustee(s) so appointed.
2.52 "Trust Fund" means the trust fund consisting of the assets of the Plan and
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maintained by the Trustee pursuant to the Plan and the Trust Agreement.
2.53 "Valuation Date" means the date on which the assets of the Plan are
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valued, determined in accordance with the Trust Agreement.
2.54 "Year of Service" means:
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(a) For purposes of vesting, each Plan Year or portion thereof during
which an Employee is credited with at least 1,000 Hours of Service.
(b) For purposes of determining eligibility, the first "computation
period" in which the Employee completes at least 1,000 Hours of
Service. An Employee's initial computation period is the 12-
consecutive-month period following the Employee's employment
commencement date. If the Employee does not complete at least 1,000
Hours of Service during the first computation period, subsequent
computation periods are each Plan Year, beginning with the Plan Year
in which the first anniversary of the Employee's employment
commencement date falls.
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
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3.1 Eligibility to Participate. An individual hired or rehired as an Employee
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shall be eligible to become a Participant on the date he or she becomes an
Eligible Employee or on any subsequent date.
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3.2 Commencement of Participation. An individual who has satisfied the
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requirements for Plan participation and wishes to become a Participant
shall follow the enrollment procedures prescribed by the Company and shall
begin participating in the Plan as soon as administratively practicable
after completion of the enrollment procedures.
3.3 Eligible Employee means an Employee of a Participating Company who is
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described in (a) or (b) of this Section 3.3 and is not excluded under (c)
of this Section 3.3. An individual's status as an Eligible Employee shall
be determined by the Company and its determination shall be conclusive and
binding on all persons.
(a) Regular Full-Time Employee. Unless excluded under (c) below, an
individual classified by a Participating Company as a "regular full-
time employee" is an Eligible Employee.
(b) Regular Part-Time Employee. Unless excluded under (c) below, an
individual classified by a Participating Company as a "regular part-
time employee" shall become an Eligible Employee upon completion of a
Year of Service.
(c) Excluded Individuals. An individual shall not be an Eligible Employee
for any period in which he or she is:
(1) Included in a unit of employees covered by a collective-
bargaining agreement that does not provide that such individual
shall be eligible to participate in the Plan;
(2) Not on the Payroll of a Participating Company, even though such
person may be deemed, for any reason, to be an employee;
(3) Subject to an oral or written agreement that provides that such
individual shall not be eligible to participate in the Plan;
(4) Employed by a non-U.S. subsidiary of the Company;
(5) Classified by a Participating Company as a "leased employee"
(within the meaning of Section 414(n) of the Code) with respect
to such Participating Company or would be so classified but for
the period-of-service requirement of Code Section 414(n)(2)(B);
or
(6) A temporary employee, independent contractor, consultant, or any
other person or entity for whom a Participating Company does not
withhold federal income and employment taxes from such person's
or entity's compensation.
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If, during any period, a Participating Company has not regarded an
individual as an Employee and, for that reason, has not withheld
employment taxes with respect to that individual, then that individual
shall not be an Eligible Employee for that period, even in the event
that the individual is determined, retroactively, to have been an
Employee during all or any portion of that period.
3.4 Eligibility After Break in Service. An Eligible Employee who has incurred
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a Break in Service shall cease to be an Eligible Employee until he or she
has again satisfied the eligibility conditions described in this Section
after such Break in Service.
3.5 Suspension of Membership. A Participant's participation in the Plan shall
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be suspended for any period of time during which the Participant:
(a) Neither receives nor is entitled to receive any Compensation,
including (without limitation) any leave of absence without pay; or
(b) Does not qualify as an Eligible Employee but remains a Participant.
In accordance with Section 10.8 and 11.4, participation is also
suspended for 12 months if a Participant defaults on a Plan loan or
takes a Hardship Withdrawal. A Participant shall not make Participant
Elected Contributions or receive any allocation of Company
Contributions with respect to a period of suspended participation, but
a suspended Participant's Accounts shall remain invested as a part of
the Trust Fund and shall continue to share in the gains, income,
losses and expenses of the Trust Fund.
3.6 Termination of Membership. A Participant's participation in the Plan shall
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terminate when his or her entire Plan Benefit has been distributed or on
the date of his or her death, whichever occurs first. In the case of a
Participant who is not entitled to a Plan Benefit, membership in the Plan
shall terminate when the Participant ceases to be an Employee.
3.7 Military Service. Notwithstanding any provision of the Plan to the
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contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u).
ARTICLE 4. EMPLOYEE CONTRIBUTIONS.
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4.1 Participant Elected Contributions. Each Participant whose participation in
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the Plan is not suspended may make Participant Elected Contributions to the
Trust Fund pursuant to a Salary Deferral Agreement that specifies the
amount of the
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contribution. Subject to the limitations set forth in Section 4.4 and
Articles 13-16, the amount of the Participant Elected Contributions shall
be equal to any whole percentage of his or her Compensation, as the
Participant shall elect, except that this whole percentage shall not exceed
15 percent of his or her Compensation. Participant Elected Contributions
shall be made through payroll deductions from the Participant's
Compensation. If a Participant elects to make Participant Elected
Contributions, the contributions shall be deemed to be employer
contributions to the Plan for federal income tax purposes and, to the
extent permitted, for purposes of other federal, state and local taxes. A
Participant's election to make Participant Elected Contributions shall
constitute an election to have the Participant's taxable salary or wages
from the Participating Company reduced by the amount of the Participant
Elected Contributions.
4.2 Suspension, Change and Resumption of Participant Elected Contributions. A
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Participant may elect to suspend or change the rate of Participant Elected
Contributions and, having elected to suspend Participant Elected
Contributions, may elect to resume them. Any such election shall be made by
following the procedures prescribed by the Company, which election shall be
put into effect at the time prescribed by the Company's procedures.
4.3 Contributions to the Trustee. The Participating Companies shall forward
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all Employee Contributions to the Trustee, for investment in the Trust
Fund, as soon as administratively possible after they were withheld.
Employee Contributions shall be credited to each Participant's Accounts as
provided in Sections 6.3 and 6.4.
4.4 Limits on Participant Elected Contributions. This Section briefly
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describes the rules that limit the amount of Participant Elected
Contributions that may be contributed to a Participant's Account for the
Plan Year or calendar year.
(a) Compensation Limit. A Participant may not make further Participant
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Elected Contributions for the Plan Year once his or her Compensation
reaches the Compensation Limitation.
(b) Annual Deferral Limit. As is described in detail in Article 13, a
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Participant's Participant Elected Contributions, together with certain
other elective deferrals, made during a calendar year may not exceed
the Annual Deferral Limit, as defined in Section 13.9(b).
(c) Average Deferral Percentage Limit. As is described in detail in
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Article 13 and Article 15, Participant Elected Contributions may be
returned to certain Participants who are Highly Compensated Employees
in the event that the average deferral percentage test or multiple-use
test is not met for the Plan Year.
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(d) Section 415 "Annual Additions" Limit. As is described in detail in
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Article 16, if amounts credited to a Participant's Accounts during the
Plan Year, other than earnings and Rollover Contributions, exceed the
lesser of $30,000 or 25% of the Participant's Section 415
Compensation, then Participant Elected Contributions may be returned
to the Participant.
(e) Prospective Limitations. In order to ensure compliance with the
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average deferral percentage test, the multiple-use test and the annual
additions limit, at any time during the Plan Year and at its sole
discretion, the Company may require any Participant to discontinue or
reduce the rate of his or her Participant Elected Contributions. The
Company may require the discontinuance or reduction in the rate of
Participant Elected Contributions even if its actions may prevent a
Participant from making the maximum Participant Elected Contributions
allowed by law.
(f) Nondeductible and Mistaken Contributions. As is described in detail in
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Section 5.6(e), Participant Elected Contributions that are not
deductible by the Company or that are made by mistake are returned to
the Company.
4.5 Rollover Contributions. The Plan may receive Rollover Contributions on
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behalf of an Eligible Employee if the following conditions are satisfied:
(a) The contribution is made entirely in the form of U.S. dollars; and
(b) The Eligible Employee demonstrates to the Company's satisfaction that
the contribution is a qualifying rollover contribution under Section
402(c)(4), 403(a)(4) or 408(d)(3) of the Code.
If an Eligible Employee who is not a Participant makes a Rollover
Contribution, then he or she shall be considered a Participant solely with
respect to his or her Rollover Contribution Account until he or she becomes
a Participant for all purposes pursuant to Article 3.
A Rollover Contribution shall be paid to the Company in a lump sum in cash
and shall be credited to the Participant's Rollover Account. The
Participant may direct the investment of his or her Rollover Account by
filing the specified investment election form in accordance with such rules
as may be established by the Company.
ARTICLE 5. COMPANY CONTRIBUTIONS.
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5.1 Matching Contributions. Subject to the limitations of Section 5.6 and
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Articles 13-16, each Participating Company may, in its discretion, make
Matching Contributions in an amount determined by the Participating
Company. A
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Matching Contributions formula may limit the amount of Participant Elected
Contributions that are taken into account for purposes of allocating
Matching Contributions or may limit allocations of Matching Contributions
to a specified group of Participants; provided, however, that the Matching
Contribution formula(s) shall not discriminate in favor of Highly
Compensated Employees. A Matching Contribution shall be paid to the Trustee
as soon as reasonably practicable after the pay period to which it relates
and shall be allocated to the Accounts of Participants as provided in
Section 6.5.
5.2 Nonelective Contributions. Subject to the limitations Section 5.6 and
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Articles 13-16, each Participating Company may, in its discretion, make
Nonelective Contributions in an amount determined by the Participating
Company. The Company, in its sole discretion, may determine that the
allocation of part or all of the Nonelective Contribution for a Plan Year
shall be limited to the Nonelective Contribution Accounts of Participants
who remain Eligible Employees on the last day of the relevant Plan Year.
The Company may limit the amount of Compensation that is taken into account
for purposes of allocating Nonelective Contributions, and it may determine
that allocations of Nonelective Contributions shall be limited to a
specified group of Eligible Employees; provided, however, that the
Nonelective Contribution formula(s) shall not discriminate in favor of
Highly Compensated Employees. For purposes of allocating such Nonelective
Contributions for any Plan Year or other allocation period based on an
Employee's Compensation, only Compensation attributable to periods in such
Plan Year or other allocation period during which such Employee was an
Eligible Employee shall be taken into account. Nonelective Contributions
shall be paid to the Trustee as soon as reasonably practicable following
the close of the pay period to which it relates and shall be allocated to
the Accounts of Participants as provided in Section 6.6.
Nonelective Contributions may include a core contribution equal to a
specified percentage of Compensation to be made by the Company for each
payroll period during the Plan Year.
5.3 Qualified Nonelective Contributions. The Participating Companies may make
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Qualified Nonelective Contributions pursuant to Article 13.6.
5.4 Qualified Matching Contributions. The Participating Companies may make
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Qualified Matching Contributions in an amount determined by the
Participating Company. The Participating Company may, in its sole
discretion, limit the amount of Participant Elected Contributions that are
taken into account for purposes of allocating Qualified Matching
Contributions, or it may determine that allocations of Qualified Matching
Contributions shall be limited to a specified group of Eligible Employees;
provided, however, that the Qualified Matching Contribution formula(s)
shall not discriminate in favor of Highly Compensated
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Employees. Qualified Matching Contributions shall be paid to the Trustee as
soon as reasonably practicable following the date as of which they are
allocated.
5.5 Investment of Company Contributions. The Trustee shall invest the Company
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Contributions it receives in accordance with Section 6.2.
5.6 Limits on Company Contributions. This Section briefly describes the rules
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that limit the amount of Company Contributions that may be contributed to a
Participant's Account for the Plan Year.
(a) Compensation Limit. A Company Contribution that is expressed as a
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percentage of a Participant's Compensation may not be based on
Compensation in excess of the Compensation Limit in effect for the
Plan Year.
(b) Average Contribution Percentage Limit. As is described in detail in
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Article 14 and Article 15, Matching Contributions, Qualified Matching
Contributions or Qualified Nonelective Contributions may be returned
to certain Participants who are Highly Compensated Employees in the
event that the average contribution percentage test or multiple-use
test is not met for the Plan Year.
(c) Section 415 "Annual Additions" Limit. As is described in detail in
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Article 16, if amounts credited to a Participant's Accounts during the
Plan Year, other than earnings and Rollover Contributions, exceed the
lesser of $30,000 or 25% of the Participant's Section 415
Compensation, then Company Contributions may be returned to the
Participant.
(d) Prospective Limitations. In order to ensure compliance with the
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average contribution percentage test, the multiple-use test and the
annual additions limit, at any time during the Plan Year and at its
sole discretion the Company may reduce or discontinue allocations of
Company Contributions to any Participant's Account. The Company may
implement this reduction or discontinuance of allocations of Company
Contributions even if its action may prevent a Participant from
receiving the maximum allocations to his or her Account allowed by
law.
(e) Nondeductible or Mistaken Contributions. Any other provision of the
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Plan notwithstanding, Company Contributions and Participant Elected
Contributions are conditioned upon their deductibility under Section
404 of the Code and the qualification of the Plan under Section 401(a)
of the Code. If the deductibility of a Company Contribution or
Participant Elected Contribution is denied, the amount for which a
deduction is disallowed (reduced by any losses incurred with respect
to such amount) shall be returned to the Participating Companies
within one year after the
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disallowance of the deduction. If a Company Contribution or
Participant Elected Contribution is made to the Plan by reason of a
mistake of fact, the amount contributed by reason of such mistake
(reduced by any losses incurred with respect to such amount) shall be
returned to the Participating Companies within one year after the date
such contribution was made.
ARTICLE 6. INVESTMENTS AND PARTICIPANTS' ACCOUNTS.
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6.1 Investment Funds. All contributions to the Plan made pursuant to Articles
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4 and 5 shall be paid to the Trust Fund established under the Plan. All
such contributions shall be invested as provided under the terms of the
Trust Agreement, which may include provision for the separation of assets
into separate Investment Funds, including a Company Stock Fund.
6.2 Investment of Contributions. Employee Contributions and Company
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Contributions shall be apportioned among one or more of the Investment
Funds as the Participant may specify according to the procedures prescribed
by the Company; provided, however, that a Participant may direct a maximum
of 50 percent of Employee Contributions, Rollover Contributions and Company
Contributions to be invested in the Company Stock Fund. In the event that a
Participant fails to make an investment election, contributions allocated
to his or her Accounts shall be invested in accordance with procedures
prescribed by the Company. A Participant may elect to change the investment
instructions with respect to future contributions according to the
procedures prescribed by the Company.
6.3 Participant Elected Contributions Account. A Participant's Participant
-----------------------------------------
Elected Contribution Account shall consist of his or her Participant
Elected Contributions, adjusted to reflect transfers and withdrawals from
such Participant Elected Contributions Account and earnings, gains,
expenses and losses attributable to the Investment Fund(s) in which the
contributions are invested.
6.4 Rollover Contributions Account. A Participant's Rollover Contributions
------------------------------
Account shall consist of his or her Rollover Contributions, adjusted to
reflect transfers and withdrawals from such Rollover Contributions Account
and earnings, gains, expenses and losses attributable to the Investment
Fund(s) in which the contributions are invested.
6.5 Matching Contributions Account. A Participant's Matching Contributions
------------------------------
Account shall consist of his or her Matching Contributions, adjusted to
reflect transfers and withdrawals from such Matching Contributions Account
and earnings, gains, expenses and losses attributable to the Investment
Fund(s) in which the contributions are invested. Matching Contributions,
determined under Section 5.1, shall be allocated to the Matching
Contributions Account of each
14
Participant who is entitled to a Matching Contribution pursuant to Section
5.1. Matching Contributions shall be allocated as of the last day of the
period for which the Participant received Compensation with respect to
which the Matching Contribution is made.
6.6 Nonelective Contributions Account. A Participant's Nonelective
---------------------------------
Contributions Account shall consist of his or her Nonelective
Contributions, adjusted to reflect transfers and withdrawals from such
Nonelective Contributions Account and earnings, gains, expenses and losses
attributable to the Investment Fund(s) in which the contributions are
invested. The Nonelective Contribution of a Participating Company,
determined under Section 5.2, shall be allocated to the Nonelective
Contribution Accounts of each Participant who is an Eligible Employee of
the Participating Company on the date as of which the Nonelective
Contribution is allocated. The Nonelective Contribution of a Participating
Company shall be allocated to each Participant entitled to an allocation of
such Nonelective Contribution in the proportion that such Participant's
Compensation, while he or she was an Eligible Employee, bears to the
Compensation of all Participants entitled to an allocation of the
Participating Company's Nonelective Contribution. Allocations of
Nonelective Contributions shall be made as of each payroll period.
6.7 Qualified Nonelective Contributions Account. A Participant's Qualified
-------------------------------------------
Nonelective Contributions Account shall consist of his or her Qualified
Nonelective Contributions, adjusted to reflect transfers and withdrawals
from such Qualified Nonelective Contributions Account and earnings, gains,
expenses and losses attributable to the Investment Fund(s) in which the
contributions are invested.
6.8 Qualified Matching Contributions Account. A Participant's Qualified
----------------------------------------
Matching Contributions Account shall consist of his or her Qualified
Matching Contributions, adjusted to reflect transfers and withdrawals from
such Qualified Matching Contributions Account and earnings, gains, expenses
and losses attributable to the Investment Fund(s) in which the
contributions are invested.
6.9 Transfers Among Investment Funds. A Participant may elect to reapportion
--------------------------------
the values of his or her Accounts among Investment Funds by properly
following procedures prescribed by the Company. The Company's procedures by
which a Participant may elect to transfer amounts into or out of the
Company Stock Fund shall be drafted to provide notice to Participants if
such an election would cause a Participant to have a purchase or sale of
Company Stock which is not exempt from potential short-swing trading
profits liability under Section 16(b) of the Exchange Act by virtue of the
application of Rule 16b-3 (promulgated under Section 16 of the Exchange
Act) as in effect from time to time. As of the effective date of this
amended and restated Plan, such liability may arise if such
15
election is made by a Participant (or successor in interest) who is an
officer, director, or greater than 10% stockholder of the Company (within
the meaning of Section 16 of the Exchange Act and the rules promulgated
thereunder) within six months following the date of the most recent
election made under any employee benefit plan sponsored by the Company or
an Affiliate if (a) both elections involved either an intra-plan transfer
involving a fund invested in the Company's equity securities or a cash
distribution from the employee benefit plan to the Participant (or
successor in interest) funded by a volitional disposition of the Company's
equity securities, (b) the prior election involved an acquisition of the
Company's equity securities if the current election involves a disposition
of the Company's equity securities, or vice versa, and (c) both elections
are made at the volition of the Participant (or successor in interest) not
in connection with the Participant's death, disability, retirement,
termination of employment, or an election which is required to be made
available under a provision of the Code. Such a volitional election
(considering without regard as to whether or not any similar elections have
occurred within six months of such an election) shall be described as a
"Discretionary Transaction." On and after July 1, 1996, transfers into the
Company Stock Fund shall be limited so that, after any such transfer, no
more than 50% of the value of the Participant's aggregate Account is
invested in the Company Stock Fund. For purposes of carrying out Investment
Fund transfers, the value of the Accounts shall be determined as of the
Valuation Date immediately preceding the Participant's transfer election.
6.10 Allocation of Investment Income. As soon as reasonably practicable after
-------------------------------
each Valuation Date, and within 90 days after the removal or resignation of
the Trustee, the Trustee shall value the assets of the Trust Fund on the
basis of fair market value as of the Valuation Date (or the day of
resignation or removal of the Trustee if it is not a Valuation Date). Where
separate Investment Funds have been established pursuant to Section 6.1,
the Trustee shall value each such Investment Fund separately.
6.11 Account Statements. As soon as practicable after the last day of each Plan
------------------
Year (and after such other dates as the Company may determine), there shall
be prepared and delivered to each Participant a written statement showing
the fair market value of his or her Accounts as of the applicable date and
such other information as the Company may determine.
ARTICLE 7. VESTING OF PARTICIPANTS' ACCOUNTS.
- ----------
7.1 100 Percent Vesting. A Participant's interest in all of his or her
-------------------
Participant Elected Contributions Account, Qualified Matching Contributions
Account, Qualified Nonelective Contributions Account and Rollover
Contributions Account shall be 100% vested and nonforfeitable at all times.
16
7.2 Vesting of Matching Contributions Accounts.
------------------------------------------
(a) If a Participant's employment with a member of the Affiliated Group is
terminated after December 31, 1989 and before his or her Normal
Retirement Age for any reason other than Disability or death, in
addition to the amounts credited to the Accounts identified in Section
7.1, the Participant shall be entitled to an amount equal to the
"vested percentage" of his Matching Contributions Account. Such vested
percentage shall be determined in accordance with the following
schedule.
Years of Service Vested
---------------- Percentage
----------
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
(b) In all events, a Participant's Matching Contributions Account shall be
fully vested upon termination of his or her employment with the
Company on or after attainment of his or her Normal Retirement Age or
by reason of Disability or death.
7.3 Vesting of Nonelective Contributions Accounts. In the case of any
---------------------------------------------
individual who becomes an Employee on or after April 1, 1991 (other than a
temporary employee described in clause (ii) of Section 7.3(a)), he or she
shall become fully vested in his or her Nonelective Contributions Account
upon the earlier of his or her completion of five (5) Years of Service or
his or her termination of employment on or after attainment of his or her
Normal Retirement Age or by reason of Disability or death. If the
employment of such a Participant terminates prior to his or her completion
of five (5) Years of Service, attainment of Normal Retirement Age,
Disability or death, he or she shall have no vested interest in his or her
Nonelective Contributions Account.
7.4 Forfeitures. If a Participant ceases to be an Employee at a time when he
-----------
or she is not yet fully vested in his or her Nonelective Contributions
Account or Matching Contributions Account, the invested amount of his or
her Nonelective Contributions Account and Matching Contributions Account
shall constitute a Forfeiture for the Plan Year in which employment
terminated. Forfeitures shall be applied to reduce Nonelective
Contributions and Matching Contributions for the Plan Year. If the
Participant is rehired as an Employee, then the portion of his or her
Nonelective Contributions Account or Matching Contributions Account that
constituted a Forfeiture shall be reinstated to the Nonelective
Contributions
17
Account or Matching Contributions Account, as applicable, as of the close
of the Plan Year in which the rehire occurs, but only if the Participant
returns to the service of a Participating Company before incurring a Five-
Year Break in Service. To the extent that Forfeitures for the Plan Year in
which the Participant is rehired are insufficient to reinstate the rehired
Participant's Forfeiture, then the appropriate Participating Company shall
make a special contribution in the amount required to reinstate the
Forfeiture.
If a Participant who was not fully vested at the time of his or her
termination of employment receives a distribution out of his or her vested
Account balance and subsequently returns to a Participating Company's
service before incurring a Five-Year Break in Service, a separate account
for the Participant's remaining interest in the Plan as of the time of the
distribution shall be maintained. At any time, the Participant's vested
interest in such account shall be an amount "X" determined in accordance
with the following formula:
= P(AB + D) - D
For purposes of such formula, "P" is the vested percentage at the relevant
time; "AB" is the account balance at the relevant time and "D" is the
amount of the prior distribution.
In the event a Participant's service with a Participating Company
terminates and no payment of the Participant's nonforfeitable interest is
made, the forfeitable amount of the Participant's interest shall be
forfeited after the Participant has incurred a Five-Year Break in Service,
as of a Valuation Date determined in a uniform and consistent manner by the
Company. In the event the Participant returns to the service of a
Participating Company before incurring a Five-Year Break in Service, the
Participant's Account shall exist as though no forfeiture had taken place.
7.5 Vesting on Reemployment.
-----------------------
(a) Years of Service completed prior to any Break in Service shall not be
counted in determining a Participant's nonforfeitable interest under
the Plan if, at the time of the earlier termination of employment, the
Participant did not have any nonforfeitable interest under the Plan to
an accrued benefit derived from Nonelective Contributions or Matching
Contributions and the number of the Participant's consecutive one-year
Breaks in Service equals or exceeds the greater of five (5) or the
aggregate number of his or her Years of Service prior to such Break in
Service.
(b) In the case of a Participant who incurs a Five-Year Break in Service,
Years of Service completed by such Participant after the Five-Year
Break in Service shall not be counted to increase the Participant's
nonforfeitable
18
interest in his or her Account as determined prior to the Five-Year
Break in Service.
7.6 Determination of Account Balance. Whenever a Participant or his or her
--------------------------------
Beneficiary is entitled to receive the entire amount or a percentage of his
or her Account balance, the amount of such balance (including the value of
any Company Stock held in his or her Account) shall be the amount in (or
value of) such Account as of the Valuation Date immediately preceding the
date of distribution.
7.7 Lost Participant or Beneficiary. In the event that a Beneficiary or
-------------------------------
Participant cannot be located at the time a benefit is payable from the
Plan to him or her, then at the close of the 12-consecutive-month period
following the date on which the amount became payable, the amount shall be
treated as a Forfeiture. Such a Forfeiture shall nevertheless be
reinstated, without interest, if the Participant or Beneficiary
subsequently is located and makes a valid claim for the benefit.
ARTICLE 8. DISTRIBUTION OF PLAN BENEFIT.
- ----------------------------------------
8.1 General Rule. All distributions under the Plan shall be made in accordance
------------
with the Treasury Regulations under Section 401(a)(9) of the Code,
including Treasury Regulation Section 1.401(a)(9)-2 or its successor. Such
regulations are incorporated in the Plan by reference and shall override
any inconsistent provisions of the Plan.
8.2 Events Permitting Distribution. No distribution may be made of any amounts
------------------------------
credited to a Participant's Account except:
(a) After the Participant's death, Disability or termination of employment
for any other reason;
(b) On or after termination of the Plan, provided that (i) neither the
Participating Company nor any Affiliate of the Participating Company
maintains a successor defined contribution plan (other than an
employee stock ownership plan) and (ii) the Participant's distribution
is made in the form of a lump sum;
(c) On or after the disposition, to an entity that is not an Affiliate of
the Participating Company, of substantially all of the assets used by
the Participating Company in a trade or business, but only with
respect to a Participant who continues employment with the entity
acquiring such assets, and provided that (i) the Participant's
distribution is made in the form of a lump sum and (ii) the
Participating Company continues to maintain the Plan following such
disposition;
19
(d) On or after the disposition, to an entity that is not an Affiliate of
the Participating Company, of the interest of the Participating
Company or an Affiliate of the Participating Company in a subsidiary,
but only with respect to a Participant who continues employment with
such subsidiary, and provided that (i) the Participant's distribution
is made in the form of a lump sum and (ii) the Participating Company
continues to maintain the Plan following such disposition; or
(e) As required by applicable law or in connection with a QDRO, as
provided in Article 9, or an in-service withdrawal, as provided in
Article 11.
8.3 Time of Distribution.
--------------------
(a) Except as provided in Sections 8.5, 8.8 and 8.10, and unless a
Participant elects otherwise, the distribution of a Participant's Plan
Benefit under Section 8.6 shall occur or commence not later than sixty
(60) days after the close of the Plan Year in which occurs the later
of (i) the Participant's attainment of Normal Retirement Age or (ii)
the Participant's termination of employment. If distribution of a
Participant's Plan Benefit has not yet occurred, on or about nine (9)
months before the Participant's Normal Retirement Date, the Company
shall furnish the Participant with a written explanation of the terms,
conditions and forms of distributions available from the Plan
including, where applicable, a general description of the Lifetime
Annuity (as defined in Section 8.7), and with a description of the
procedures for electing a form of distribution.
(b) A Participant may elect to receive or commence receipt of his or her
Plan Benefit at any reasonable time after termination of employment.
If the Participant elects to receive his or her Plan Benefit,
distribution shall in any event commence not later than one (1) year
after the end of the Plan Year (i) in which he or she terminates
employment after attaining Normal Retirement Age or due to Disability,
or (ii) which is the fifth Plan Year following the Plan Year in which
he or she otherwise terminates employment (except by reason of his or
her death). An election under this Subsection must be made in writing,
must be made not more than ninety (90) days before the date the
distribution is to occur or commence and must not be made before the
Participant receives a written notice describing the material features
and explaining the relative values of the optional forms of benefit
available under the Plan, in a manner that would satisfy the notice
requirements of Section 417(a)(3) of the Code. Not less than thirty
(30) days and not more than ninety (90) days before the Participant's
distribution is to occur or commence, the Company shall provide the
Participant with such a written notice, which also shall inform
20
the Participant of his or her right (if applicable) to defer receipt
of his distribution until Normal Retirement Age.
8.4 Amount of Plan Benefit. A Participant's Plan Benefit shall consist of the
----------------------
Participant's entire interest in his or her Accounts, to the extent vested.
8.5 Latest Time of Distribution. In no event shall a Participant's Plan Benefit
---------------------------
be distributed later than the April 1 next following the calendar year in
which the Participant attained age 70 1/2 if the Participant is not then an
Employee.
8.6 Forms of Distribution.
---------------------
(a) A Participant's Plan Benefit shall be distributed in any of the
following forms that he or she elects; provided, however, that only a
Participant who has an Hour of Service prior to April 1, 1996 may
elect a Lifetime Annuity described in Paragraph (5):
(1) A single sum cash distribution;
(2) A single sum distribution in full shares of Company Stock (with
the value of any fractional share paid in cash);
(3) A single sum distribution paid in a combination of cash and full
shares of Company Stock;
(4) Cash installments paid at least annually over a period certain
not exceeding the life expectancy of the Participant or the joint
life expectancy of the Participant and his or her designated
Beneficiary. All life expectancies shall be determined not later
than the date when payments commence and shall not be
redetermined thereafter. The amount of each installment payment
shall be determined by dividing the remaining years in the period
certain by the value of the Participant's Account; or
(5) Subject to the provisions of Section 8.7, a nontransferable
annuity contract that provides for annuity payments at least
annually over the lifetime of the Participant or the joint
lifetimes of the Participant and his or her designated
Beneficiary, and that may provide for a "period certain" feature
(a "Lifetime Annuity").
(b) If, by the time for the distribution of a Participant's Plan Benefit
in accordance with the foregoing provisions of this Article 8, the
Participant has not made any election as to the form of the
distribution, payment of his or her Plan Benefit shall be made in the
form of a single sum cash distribution.
21
(c) To the extent that a distribution is to be made in a number of shares
of Company Stock that exceeds the number of shares in the
Participant's Account under the Company Stock fund, amounts in one or
more other Investment Funds comprising the Participant's Account shall
be applied to purchase the required additional shares of Company Stock
at their fair market value at the time of purchase.
(d) The Company shall establish procedures to notify a Participant (or
successor in interest) if any election regarding the form or timing of
distribution of benefits from the Plan involving the Company Stock
Fund constitutes a Discretionary Transaction (as defined in Section
6.9) which may trigger short-swing trading profits liability for the
Participant (or successor in interest) under Section 16(b) of the
Exchange Act. In such an event, the person making the election shall
be provided with a reasonable opportunity to modify, delay, or revoke
such an election.
8.7 Lifetime Annuities. This Section shall apply to any Participant with an
------------------
Hour of Service prior to April 1, 1996, who elects a Lifetime Annuity. The
Plan Benefit of a Participant who elects to receive a Lifetime Annuity, as
provided in Section 8.6(a)(5) above, shall be distributed to the
Participant in the applicable form of annuity described in Subsection (a)
below, unless, prior to the Annuity Starting Date (as defined in Subsection
(d) below) with respect to such Lifetime Annuity distribution, the
Participant elects to waive such Lifetime Annuity, in which case he or she
may elect any other form of distribution provided under Section 8.6. A
married Participant may waive the Qualified Joint and Survivor Annuity once
he or she elects a Lifetime Annuity only as provided in Subsection (b)
below. If the Participant dies before his or her Annuity Starting Date, the
provisions of Section 8.9 shall apply.
(a) Lifetime Annuity Forms.
----------------------
(1) In the case of a Participant who is legally married on his or her
Annuity Starting Date, the normal form of Lifetime Annuity that
applies shall be a Qualified Joint and Survivor Annuity.
(2) In the case of a Participant who is not married on his or her
Annuity Starting Date, the normal form of Lifetime Annuity that
applies shall be a Single Life Annuity.
(b) Waiver of Lifetime Annuity.
--------------------------
(1) Not more than ninety (90) days before the Annuity Starting Date,
a married Participant who elects to receive a Lifetime Annuity
may elect to waive the Qualified Joint and Survivor Annuity form
of benefit and to receive payment instead in one of the other
forms
22
specified in Section 8.6(a)(l)-(4) or as a Single Life Annuity.
If the Participant elects the form of benefit in Section
8.6(a)(4), he or she also may designate a Beneficiary other than
his or her spouse to receive any benefits payable following his
or her death. A Participant may revoke any election previously
made under this Subsection and may make a new election hereunder
any number of times before his or her Annuity Starting Date. A
Participant's election or revocation under this Subsection shall
be in writing.
(2) An election by a Participant who elects to receive a Lifetime
Annuity to waive the Qualified Joint and Survivor Annuity shall
not be valid unless the Participant has received the notice and
explanation described in Subsection (c) below and the spouse of
the Participant consents in writing to such election in a manner
that satisfies the spousal consent requirements set forth in
Section 8.13, provided that the Participant's election also must
designate a specific alternative form of benefit (as well as a
Beneficiary) that may not be changed without further spousal
consent (unless expressly permitted by the spouse's consent or a
prior consent). Spousal consent is not required in order for a
Participant to reinstate an election to receive a Qualified Joint
and Survivor Annuity, but is required for any subsequent
revocation of the election.
(c) Notice and Explanation Requirements. Not more than ninety (90) and not
-----------------------------------
less than thirty (30) days before the Annuity Starting Date, the
Company shall notify the Participant in writing of his or her right to
elect to waive the normal form of Lifetime Annuity. Such written
notification shall include:
(1) An explanation of the terms and conditions of the normal form of
Lifetime Annuity, including the circumstances under which it will
be provided if no election is made to waive such form of benefit;
(2) A statement of the Participant's right to make an election to
waive the normal form of Lifetime Annuity and an explanation of
the effect of such an election;
(3) A statement of the Participant's right to revoke an election to
waive the normal form of Lifetime Annuity and an explanation of
the effect of such a revocation;
(4) A statement of the right, if any, of the Participant's spouse to
consent to the Participant's election to waive the normal form of
23
Lifetime Annuity and to the Participant's designation of an
alternative form of benefit or Beneficiary;
(5) A general explanation of the relative financial impact of an
election to waive the normal form of Lifetime Annuity;
(6) A general description of the material features (including
eligibility conditions) and an explanation of the relative values
of the alternative forms of benefit available under the Plan; and
(7) A statement regarding the availability of the additional
information described below in this Subsection (c).
Within thirty (30) days after receipt of a timely written request from
the Participant for additional information, the Company shall provide
the Participant with a written explanation, in nontechnical language,
of the terms and conditions of the alternative forms of benefit
available under the Plan and the financial effect (in terms of dollars
per monthly payment) upon the Participant's monthly benefit in case of
an election to waive the normal form of Lifetime Annuity and receive
an alternative form of benefit.
(d) Definition of Annuity Starting Date. For purposes of this Article, the
-----------------------------------
term "Annuity Starting Date" shall mean the first day of the first
period for which an amount is paid as an annuity or, in the case of a
benefit not payable as an annuity, the first day on which all events
have occurred that entitle the Participant (or, if applicable, a
Beneficiary) to receive or commence receipt of the benefit.
8.8 Time of Distribution of Death Benefit. If a Participant dies before
-------------------------------------
receiving his or her Plan Benefit, then the Participant's Beneficiary shall
be entitled to receive the Plan Benefit pursuant to this Section 8.8.
(Section 8.12 provides that the surviving spouse of a married Participant
shall be his or her Beneficiary, unless the Participant, with the spouse's
consent, has otherwise elected prior to his or her death.) The
Participant's Plan Benefit shall be distributed to the Participant's
Beneficiary no later than 12 months after the Participant's death. If,
however, a married Participant has elected to receive his or her Plan
Benefit in the form of a Lifetime Annuity in accordance with Section
8.6(a)(5) and Section 8.7 (and has not subsequently waived such Lifetime
Annuity) and then dies before the Annuity Starting Date (as defined in
Section 8.7(d)) with his or her spouse surviving him or her, and if the
value of the Participant's entire vested Plan Benefit exceeds $5,000, the
distribution shall not occur or commence until the Participant would have
attained Normal Retirement Age (had he or she not died), unless an earlier
distribution is elected by the surviving spouse. In this event, the
Participant's surviving spouse may elect to receive or commence receipt of
the Participant's
24
death benefit at any reasonable time after the Participant's death. Such an
election must be made in writing not more than ninety (90) days before the
date the distribution is to occur or commence. For this purpose, if the
Participant's vested Plan Benefit at the time a distribution commences
under an installment option pursuant to Section 8.6(a)(4) or a lifetime
annuity pursuant to Section 8.7 exceeds $5,000, the value of his or her
vested Plan Benefit at all times thereafter will be deemed to exceed
$5,000.
8.9 Distribution of Death Benefit.
-----------------------------
(a) Notwithstanding any Beneficiary designation that may be to the
contrary, if a Participant who has elected to receive a Lifetime
Annuity (and who has not subsequently waived such Lifetime Annuity in
accordance with Section 8.7(b)) dies before the Annuity Starting Date
with respect to such Lifetime Annuity, and if he or she is married at
the time of his or her death, the vested balance in his or her Account
shall be applied toward the purchase of a Single Life Annuity for the
Participant's surviving spouse.
(b) Except as provided in Subsection (a) above, if a Participant dies
before the Annuity Starting Date (i.e., with respect to any form of
distribution specified in Section 8.6(a)(l)-(4)), the vested balance
in his or her Account shall be distributed to his or her Beneficiary
in such form as such Beneficiary may elect from among the alternatives
specified in Section 8.6(a)(l)-(3). In the absence of an election by
the Beneficiary, payment shall be made in the form designated by the
Participant, or, if none, in a single sum cash distribution.
(c) If a Participant dies after the Annuity Starting Date with respect to
the form of distribution in effect under Section 8.6, the remaining
amounts that had not yet been distributed under such form of
distribution, if any, shall be paid to the Participant's Beneficiary
in accordance with the applicable terms of such distribution method.
In the case of a distribution in the form of an annuity contract
(including a Lifetime Annuity) under Section 8.6(a)(4) or (5), the
amount and timing of death or survivor benefit payments, if any, shall
be as determined under such annuity contract.
8.10 Small Benefits: Lump Sum. Any other provision of this Article
------------------------
notwithstanding, if the value of a Participant's entire Plan Benefit equals
$5,000 or less (including a Plan Benefit of $0) before the first payment of
the Plan Benefit is made, then the Plan Benefit shall be paid (or deemed
paid if the Plan Benefit is $0) as soon as reasonably practicable after the
Participant's termination of employment to the Participant (or to his or
her Beneficiary in the case of the Participant's death) in a single lump
sum in cash.
25
8.11 Direct Rollovers. A "Distributee" who is a Participant, an Alternate
----------------
Payee under a QDRO or a Beneficiary who is a deceased Participant's
surviving spouse may elect to have a distribution of a Plan Benefit paid
directly to the Eligible Retirement Plan (defined in Subsection (a) below)
specified by the Distributee in a Direct Rollover, except to the extent
that the distribution is not an Eligible Rollover Distribution (defined
below in Subsection (b)).
(a) Definition of Eligible Retirement Plan. An Eligible Retirement Plan
--------------------------------------
is an individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or
a qualified trust described in Section 401(a) of the Code, that
accepts the Distributee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to a Beneficiary who is
the Participant's surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
(b) Definition of Eligible Rollover Distribution. An Eligible Rollover
--------------------------------------------
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: (1) any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated beneficiary, or for a
specified period of 10 years or more; (2) any distribution to the
extent the distribution is required under Section 401(a)(9) of the
Code; and (3) the portion of any distribution that is not includable
in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
8.12 Beneficiary. Subject to Section 8.13, a Participant's Beneficiary shall
-----------
be the person(s) so designated by the Participant. If the Participant has
not made an effective designation of a Beneficiary, or if the named
Beneficiary is not living when a distribution is to be made, then (a) the
then-living spouse of the deceased Participant shall be the Beneficiary or
(b) if none, the then-living children of the deceased Participant shall be
the Beneficiaries in equal shares or (c) if none, the then-living parents
of the deceased Participant shall be the Beneficiaries in equal shares, or
(d) if none, the then-living brothers and/or sisters of the deceased
Participant shall be the Beneficiaries in equal shares, or (e) if none, the
estate of the Participant shall be the Beneficiary. The Participant may
change his or her designation of a Beneficiary from time to time. Any
designation of a Beneficiary (or an amendment or revocation thereof) shall
be effective only if it is made according to the procedures prescribed by
the Company and is received by the Participating Company prior to the
Participant's death.
26
8.13 Spousal Consent Needed to Name a Nonspouse Beneficiary. Any other
------------------------------------------------------
provision of the Plan notwithstanding, in the case of a married
Participant, any designation of a person other than his or her spouse as
Beneficiary shall be effective only if the spouse consents in writing to
the designation. The spouse's consent shall be witnessed by a notary public
or, if permitted by the Company, by a representative of the Plan. A consent
to a designation of a particular Beneficiary, once given by the spouse,
shall not be revocable by that spouse. The designation of a particular
Beneficiary may not be changed without further spousal consent (unless the
consent or a prior consent expressly permits designations by the
Participant without any requirement of further consent by the spouse).
However, a designation of Beneficiary made by a Participant and consented
to by the spouse may be revoked by the Participant in writing without the
consent of the spouse at any time prior to the Annuity Starting Date. Any
new election must comply with the requirements of this section. The
spouse's consent shall not be required if the Participant establishes to
the Company's satisfaction that the spouse's consent cannot be obtained
because the spouse cannot be located or because of other reasons deemed
acceptable under applicable regulations. The Company may require such
evidence of the right of any person to receive payment under this Section
as the Company may deem advisable. The Company's determination of the right
under this Section of any person to receive payment shall be conclusive.
8.14 Determination of Marital Status. Whether a Participant is married shall
-------------------------------
be determined by the Company as of the date when distribution is to be
made.
8.15 Incapacity. If, in the Company's opinion, a Participant or Beneficiary
----------
for any reason is incompetent or becomes unable to handle properly any
property distributable to him or her under the Plan, then the Company may
make any arrangements that it determines to be beneficial to the
Participant or Beneficiary for the distribution of such property on his or
her behalf, including (without limitation) the distribution of such
property to the guardian, conservator, spouse or dependent(s) of the
Participant or Beneficiary.
ARTICLE 9. DISTRIBUTION TO AN ALTERNATE PAYEE UNDER A QDRO; FREEZING
- ---------------------------------------------------------------------
PARTICIPANT ACCOUNTS
--------------------
9.1 Immediate Distribution.
(a) Any distribution to an Alternate Payee of all or some portion of a
Participant's Accounts pursuant to a qualified domestic relations
order, shall be made as soon as reasonably practicable after the order
is determined to be a QDRO, if:
(1) The QDRO specifies such time of distribution; or
27
(2) The Alternate Payee has consented in writing to such time of
distribution.
(b) Notwithstanding the foregoing, in determining the award to an
Alternate Payee under a QDRO, the award to the Alternate Payee shall
be derived solely from a portion of the Participant's vested Accounts
in the Plan as of the Valuation Date provided in the QDRO.
9.2 Alternate Payee Accounts. In all cases where Section 9.1 above is not
------------------------
applicable, separate "Alternate Payee Accounts" shall be established for
the Alternate Payee at such time as the Company shall determine. The
portion of each of the Participant's Accounts that was assigned or made
payable to the Alternate Payee by the QDRO shall be transferred to such
Alternate Payee Accounts. Unless the QDRO otherwise provides, the transfers
to the Alternate Payee Accounts shall be made pro rata from the
Participant's Accounts. Alternate Payees may change the investment of their
Alternate Payee Accounts pursuant to Section 6.9. Alternate Payees may not
take loans or make withdrawals from their Alternate Payee Accounts under
Articles 10 and 11. Alternate Payees may not make any contributions to
their Alternate Payee Accounts.
9.3 Freezing Participant Accounts. As soon as practicable after the date the
-----------------------------
Plan Administrator receives credible information that a qualified domestic
relations order, pursuant to Code Section 401(a)(13) and ERISA Section
206(d)(3), may be forthcoming, the Plan Administrator shall freeze the
relevant Participant's Accounts for a reasonable period of time to permit
the Participant and/or Alternate Payee to obtain a domestic relations
order. As soon as practicable after the date the Plan Administrator
receives a domestic relations order, the Plan Administrator shall freeze
the relevant Participant's Accounts for a period of up to 18 months to
allow for a determination of whether the domestic relations order meets the
requirements of a qualified domestic relations order as defined in Code
Section 414(p) and ERISA Section 206(d)(3). To the extent that a
Participant's Accounts are frozen, no loans, withdrawals or distributions
are permitted from such Accounts.
9.4 Death of Alternate Payee. In all cases, if Alternate Payee dies prior to
------------------------
the time that Alternate Payee has received all or any portion of the
benefits assigned Alternate Payee by a QDRO, the benefits shall be paid to
the Beneficiary(ies) designated by Alternate Payee on forms provided by the
Plan Administrator for this purpose. If Alternate Payee has not made an
effective designation of Beneficiary or if the designated Beneficiary is
not living when a distribution is to be made, the entire balance in his or
her Alternate Payee Accounts shall be distributed to his or her estate
(unless the QDRO otherwise provides).
9.5 Distributions From Alternate Payee Accounts. Distributions to Alternate
-------------------------------------------
Payees from their Alternate Payee Accounts shall be made as soon as
reasonably
28
practicable after the Plan Administrator's receipt of completed
distribution forms provided by the Plan Administrator for this purpose.
ARTICLE 10. LOANS.
- ------------------
10.1 Amount of Loan. A Participant may obtain a cash loan from his or her
--------------
Accounts if he or she is an Employee who is not on a leave of absence at
the time of the loan and his or her Plan participation is not suspended
pursuant to Section 3.5. The minimum amount of any such loan shall be
$1,000 at the time the loan is elected. No loan shall be granted under the
Plan if such loan, when aggregated with the Participant's outstanding
loans under any other qualified plans maintained by any member of the
Affiliated Group, would exceed the lesser of:
(a) $50,000, less the amount by which such aggregate balance has been
reduced through repayments during the period of 12 months ending on
the day before the new loan is made; or
(b) One-half of the Participant's vested interest in his or her Accounts.
10.2 Terms of Loans. A loan to a Participant shall be made on such terms and
--------------
conditions as the Company may determine, provided that the loan shall:
(a) Be evidenced by a promissory note signed by the Participant and
secured by one-half of the value of his or her Accounts, to the extent
vested (regardless of the amount of the loan or the source of the loan
funds);
(b) Bear interest at a fixed rate commensurate with the interest rates
charged by major financial institutions for similar loans;
(c) Provide for level amortization over its term with payments at monthly
or more frequent intervals, as determined by the Company;
(d) Provide for loan payments (1) to be withheld whenever possible through
periodic payroll deductions from the Participant's compensation from
any member of the Affiliated Group or (2) to be paid by check or money
order whenever payroll withholding is not possible;
(e) Provide for repayment in full on or before the earlier of (1) the date
when the Participant severs from all employment with any member of the
Affiliated Group or (2) the date (A) five years after the loan is made
or (B) 20 years after the loan is made if the loan is used to acquire
a dwelling unit which within a reasonable time is to be used as the
Participant's principal residence;
29
(f) Provide that a Participant may not receive any distribution from any
of his or her Accounts under Article 8 or 11 until the loan
obligation is repaid, except to the extent that all or any part of
such distribution is used to repay the outstanding balance of the
loan; and
(g) Provide that a Participant's Accounts may not be applied to the
satisfaction of the Participant's loan obligations before the
Accounts become distributable under Article 8, unless the Company
determines that the loan obligations are in default because a
periodic payment is more than 60 days past due and takes such actions
as the Company deems necessary or appropriate to cause the Plan to
realize on its security for the loan. Such actions may include
(without limitation) an involuntary withdrawal from the Participant's
Accounts, whether or not the withdrawal would be permitted under
Article 11 on a voluntary basis; provided that an involuntary
withdrawal attributable to Company Contributions made with respect to
Plan Years that ended less than 24 months prior to the date of the
withdrawal (adjusted to reflect any earnings, appreciation or losses
attributable to Company Contributions) or attributable to Participant
Elected Contributions shall be permitted only to the extent that the
hardship requirements of Code Section 401(k)(2)(B)(I)(IV) and of
Sections 1.401(k)-l(d)(2)(ii) and 1.401(k)1(d)(2)(iii)(A) of the
Treasury Regulations are met. The Company may take such other action
as it deems necessary to recover the balance of a loan secured by the
Participant's Accounts. If an involuntary withdrawal occurs (or would
have occurred if permitted under this Section, the Participant shall
not be permitted to obtain a loan under the Plan thereafter.
10.3 Company Consent. The Company, in its sole discretion, may withhold its
---------------
consent to any loan under this Article or may consent only to the
borrowing of a part of the amount requested by the Participant. The
Company shall act upon requests for loans in a uniform and
nondiscriminatory manner, consistent with the requirements of Section
401(a), Section 401(k) and related provisions of the Code.
10.4 Source of Loans. If a Participant requests and is granted a loan, a Loan
---------------
Account shall be established for the Participant. The Loan Account shall
be held by the Trustee as part of the Loan Fund. The amount of the loan
shall be transferred to the Participant's Loan Account from the
Participant's other Accounts and shall be disbursed from the Loan Account.
Transfers from the Company Stock Fund shall be made in accordance with the
requirements for exemption under Section 16(b) of the Exchange Act if such
a transfer would cause the Participant to incur short-swing trading
profits liability under Section 16(b) of the Exchange Act. The promissory
note executed by the Participant shall be held by the Trustee (or by the
30
Company as agent of the Trustee) and the promissory note shall be treated
as an investment of the Participant's Loan Account.
10.5 Disbursement of Loans. A Participant may request a loan by completing
---------------------
the loan request procedures prescribed by the Company. A loan shall be
disbursed as soon as reasonably practicable after the date on which the
Company (or its agent) receives the loan request (subject to the Company's
consent).
10.6 Loan Fees. A Participant who obtains a loan under this Article shall be
---------
required to pay such fees as the Company may impose in order to defray the
cost of administering loans from the Plan.
10.7 Valuation Date. For purposes of this Article, the value of a
--------------
Participant's Accounts shall be determined as of a Valuation Date within a
reasonable period, not generally to exceed 30 days, on or after the date
on which the Company (or its agent) receives the prescribed loan request.
10.8 Loan Payments and Defaults. Principal and interest payments on a
--------------------------
Participant's loan shall be credited initially to the Participant's Loan
Account and shall be transferred as soon as reasonably practicable
thereafter to the Participant's other Accounts in the ratio specified by
the Participant under Section 6.2 for the investment of future
contributions. Any loss caused by nonpayment or other default on a
Participant's loan obligations shall be satisfied solely by that
Participant's Accounts. If a Participant defaults on a Plan loan, both his
or her participation and ability to obtain a Plan loan shall be suspended
for 12 months. The consequences of suspension from participation in the
Plan are described in Section 3.5.
ARTICLE 11. WITHDRAWALS WHILE EMPLOYED.
- ---------------------------------------
11.1 Age 59 1/2 and Disability Withdrawals: Withdrawals from Rollover Account
------------------------------------------------------------------------
(a) A Participant who is an Employee may withdraw up to the full amount of
his or her Rollover Account.
(b) A Participant who is an Employee and who has attained age 59 1/2 may
withdraw up to the full amount of his or her vested Accounts.
(c) A Participant who is an Employee and who is Disabled may withdraw up
to the full amount of his or her vested Accounts.
11.2 Hardship Withdrawals. A Participant who is an Employee may take a
--------------------
Hardship Withdrawal of all or any portion of his or her previously
unwithdrawn Employee Contributions and earnings thereon accrued prior to
January 1, 1988. A Hardship
31
Withdrawal may be made only if the Company determines that it is required
on account of one or more of the following Hardships:
(a) The construction or purchase (excluding mortgage payments) of a
principal residence of the Participant;
(b) The payment of tuition and related educational fees for up to 12
months of post-secondary education for the Participant or his or her
spouse, children or dependents;
(c) The payment of medical expenses described in Section 213(d) of the
Code incurred by the Participant or the Participant's spouse or
dependents, or to obtain medical care giving rise to such expenses;
(d) The payment of expenses incurred by the Participant for the funeral of
a family member;
(e) The prevention of the eviction of the Participant from his or her
principal residence or foreclosure on a mortgage on the Participant's
principal residence; or
(f) A financial need that has been identified as a deemed immediate and
heavy financial need in a ruling, notice or other document of general
applicability issued under the authority of the Commissioner of
Internal Revenue.
For purposes of this Section, the term "dependent" shall be defined as set
forth in Section 152 of the Code.
11.3 Amount of a Hardship Withdrawal. The maximum amount of a Hardship
-------------------------------
Withdrawal is the amount necessary to satisfy the immediate and heavy
financial need caused by the Hardship, including amounts necessary to pay
taxes or penalties that the Company determines may be reasonably
anticipated to result from the Hardship Withdrawal. The determination of
the amount of a permitted Hardship Withdrawal is made by the Company only
after the Participant has obtained all withdrawals and distributions,
other than hardship withdrawals, and all nontaxable loans under all plans
maintained by the Affiliated Group.
11.4 Consequences of a Hardship Withdrawal. The following consequences shall
-------------------------------------
follow a Participant's Hardship Withdrawal:
(a) Plan participation and all employee before- and after-tax
contributions to the Plan and other qualified and nonqualified
deferred compensation plans sponsored by members of the Affiliated
Group shall be suspended for a
32
period of 12 months. The consequences of suspension from the Plan are
described in Section 3.5.
(b) For the calendar year following the Hardship Withdrawal, the maximum
amount of Participant Elected Contributions and all other before-tax
employee contributions to qualified retirement plans sponsored by
members of the Affiliated Group shall be limited to the Annual
Deferral Limit, as defined in Section 13.9(b), minus the amount of the
Participant's Participant Elected Contributions and all other before
tax employee contributions to qualified retirement plans sponsored by
members of the Affiliated Group for the calendar year of the Hardship
Withdrawal.
11.5 Valuation Date. For purposes of this Article, the value of a
--------------
Participant's Accounts shall be determined as of the Valuation Date
preceding the date on which the withdrawal is to be paid.
11.6 Source of Withdrawals. Withdrawals shall be paid from the affected
---------------------
Accounts. If more than one Account is available to pay the withdrawal
because the Participant elected to invest in more than one Investment
Fund, the withdrawal shall be made from the subaccount(s) designated by
the Participant, subject to such ordering and timing restrictions as the
Company may adopt.
11.7 Payment of Withdrawals. A Participant may request a withdrawal by
----------------------
following the procedures prescribed by the Company. A withdrawal shall be
paid as soon as reasonably practicable after the date on which the Company
receives the prescribed withdrawal request. Withdrawals shall be paid only
in cash.
11.8 Limitations on Withdrawals. A Participant shall not be permitted to make
--------------------------
more than one withdrawal under this Article in any period of six
consecutive months; provided, however, that withdrawals made at the same
time shall be considered a single withdrawal. The timing of withdrawals
from the Company Stock Fund shall be limited when necessary to avoid
liability from the short-swing trading profits provisions of Section 16(b)
of the Exchange Act.
ARTICLE 12. HIGHLY COMPENSATED EMPLOYEE DEFINITION.
- ---------------------------------------------------
12.1 Determining the Highly Compensated Employee Group. An individual is
-------------------------------------------------
deemed to be a Highly Compensated Employee for any Plan Year if the
individual is an active Employee who, during the look-back year, received
Total Compensation of more than $80,000 (or such larger amount as may be
adopted by the Commissioner of Internal Revenue to reflect a cost-of-
living adjustment) and was a member of the Top-Paid Group; or was a five-
percent owner at any time during the Plan Year or the look-back year. The
look-back year shall be the 12-month period immediately preceding the Plan
Year. The determination of who is a
33
Highly Compensated Employee, including the determinations of the number
and identity of Employees in the Top Paid Group and the Total Compensation
that is considered, will be made in accordance with Section 414(q) of the
Code and the regulations thereunder.
12.2 "Highly Compensated Former Employee" means a former Employee who
----------------------------------
separated from service (or is deemed to have separated) prior to the
determination year, performs no service for any member of the Affiliated
Group during the determination year, and was a Highly Compensated Employee
as an active Employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday. The determination of
who is a Highly Compensated Former Employee will be made in accordance
with Section 414(q) of the Code and regulations thereunder.
12.3 "Nonhighly Compensated Employee" for any Plan Year means any active
------------------------------
Employee who is not a Highly Compensated Employee.
12.4 Special Definitions Used in Article 12. The following definitions shall
--------------------------------------
apply for purposes of this Article 12:
(a) "Top-Paid Group" for any Plan Year means the top 20 percent (in
--------------
terms of Total Compensation) of all Employees of the Affiliated Group,
where the number that is 20 percent of all Employees of the Affiliated
Group is determined by excluding:
(1) Any Employee covered by a collective bargaining agreement;
(2) Any Employee who is a nonresident alien with respect to the
United States and who receives no income with a source within the
United States from a member of the Affiliated Group;
(3) Any Employee who has not completed six months of service at the
end of the Plan Year;
(4) Any Employee who normally works less than 17 1/2 hours per week;
(5) Any Employee who normally works no more than six months during
any year; and
(6) Any Employee who has not attained the age of 21 at the end of the
Plan Year.
The Company may elect, in a consistent and uniform manner, to apply one or
more of the age- and service-based exclusions above by substituting a
younger
34
age or shorter period of service, or by not excluding individuals on the
basis of age or service.
(b) "Total Compensation" means "Compensation," as defined in Section 2.16,
------------------
but determined by including amounts deferred but not refunded under
Section 403(b) of the Code, under a cafeteria plan, as such term is
defined in Section 125(c) of the Code, under a simplified employee
pension, as such term is defined in Section 408(k) of the Code and
under a plan, including this Plan, qualified under Section 401(k) of
the Code.
ARTICLE 13. CONTRIBUTION LIMITATIONS: ANNUAL DEFERRAL LIMITATIONS AND AVERAGE
- ------------------------------------------------------------------------------
DEFERRAL PERCENTAGE LIMITATIONS.
-------------------------------
13.1 Return of Excess Deferrals. The aggregate Participant Elected
--------------------------
Contributions of any Participant for any calendar year, together with his
or her elective deferrals under any other plan or arrangement to which
Section 402(g) of the Code applies and that is maintained by a member of
the Affiliated Group, shall not exceed the Annual Deferral Limit. In the
event that the aggregate Participant Elected Contributions of any
Participant for any calendar year, together with any other elective
deferrals (within the meaning of Section 402(g)(3) of the Code) under all
plans, contracts or arrangements of the Affiliated Group and any other
employers, exceed the Annual Deferral Limit, then the Participant may
designate all or a portion of such Excess Deferrals as attributable to
this Plan and may request a refund of such portion by notifying the
Company in writing on or before the March 1 next following the close of
such calendar year. If timely notice is received by the Company, then such
portion of the Excess Deferrals, and any income or loss allocable to such
portion, shall be refunded to the Participant not later than the April 15
next following the close of such calendar year.
If the Participant fails properly to request a distribution of all such
Excess Deferrals, and such Excess Deferrals are attributable solely to
plans, contracts or arrangements of the Affiliated Group, then the Company
shall be deemed to have notice of such Excess Deferrals and shall
designate one or more plans maintained by a member of the Affiliated Group
from which the refund of Excess Deferrals and allocable income or loss
shall be made no later than April 15 next following the close of such
calendar year.
Any Participant Elected Contributions distributed pursuant to this Section
13.1 shall not be included in the Participant Elected Contributions to
which a Matching Contribution under Section 5.1 or a Qualified Matching
Contribution under Section 5.4 of the Plan attaches.
35
13.2 Actual Deferral Percentage Limitation. The Plan shall satisfy the actual
-------------------------------------
deferral percentage test, as provided in Section 401(k)(3) of the Code and
the regulations issued thereunder. Subject to the special rules described
in Section 13.7, the Aggregate 401(k) Contributions of Highly Compensated
Employees shall not exceed the limits described below:
(a) An Actual Deferral Percentage shall be determined for each individual
who, at any time during the Plan Year, is a Participant (including a
suspended Participant) or is eligible to participate in the Plan,
which Actual Deferral Percentage shall be the ratio, computed to the
nearest one-hundredth of one percent, of the individual's Aggregate
401(k) Contributions for the Plan Year to the individual's Section
414(s) Compensation for the Plan Year;
(b) The Actual Deferral Percentages (including zero percentages) of Highly
Compensated Employees and Nonhighly Compensated Employees shall be
separately averaged to determine each group's Average Deferral
Percentage; and
(c) The Aggregate 401(k) Contributions of Highly Compensated Employees
shall constitute Excess Contributions and shall be reduced, pursuant
to Sections 13.3 and 13.4, to the extent that the Average Deferral
Percentage of Highly Compensated Employees exceeds the greater of (1)
125 percent of the Average Deferral Percentage of Nonhighly
Compensated Employees for the preceding Plan Year or (2) the lesser of
(A) 200 percent of the Average Deferral Percentage of Nonhighly
Compensated Employees for the preceding Plan Year or (B) the Average
Deferral Percentage of Nonhighly Compensated Employees for the
preceding Plan Year plus two percentage points.
13.3 Allocation of Excess Contributions to Highly Compensated Employees. Any
------------------------------------------------------------------
Excess Contributions for a Plan Year shall be allocated to Highly
Compensated Employees by use of a leveling process, whereby the amount of
Aggregate 401(k) Contributions of the Highly Compensated Employee with the
highest amount of Aggregate 401(k) Contributions is reduced to the extent
required to (a) eliminate all Excess Contributions or (b) cause such
Highly Compensated Employee's amount of Aggregate 401(k) Contributions to
equal the amount of Aggregate 401(k) Contributions of the Highly
Compensated Employee with the next highest amount of Aggregate 401(k)
Contributions. The leveling process shall be repeated until all Excess
Contributions for the Plan Year are allocated to Highly Compensated
Employees.
13.4 Distribution of Excess Contributions. Excess Contributions allocated to
------------------------------------
Highly Compensated Employees for the Plan Year pursuant to Section 13.3,
together with any income or loss allocable to such Excess Contributions,
shall be
36
distributed to such Highly Compensated Employees not later than two-and-
one-half months following the close of such Plan Year, if possible, and in
any event no later than 12 months following the close of such Plan Year.
Any Participant Elected Contributions distributed pursuant to this Section
13.4 shall not be included in the Participant Elected Contributions to
which a Matching Contribution under Section 5.1 or a Qualified Matching
Contribution under Section 5.4 of the Plan attaches.
13.5 Qualified Matching Contributions. The Company, in its sole discretion,
--------------------------------
may include all or a portion of the Qualified Matching Contributions for a
Plan Year in Aggregate 401(k) Contributions taken into account in applying
the Average Deferral Percentage limitation described in Section 13.2 for
the Plan Year; provided that such Qualified Matching Contributions for the
Plan Year are fully and immediately vested, may not be withdrawn while the
Participant is an Employee or may be withdrawn only in circumstances that
would permit a Hardship Withdrawal, and the additional requirements of
Treasury Regulation Section 1.401(k)-l(b)(5) are satisfied.
13.6 Corrective Qualified Nonelective Contributions. In order to satisfy (or
----------------------------------------------
partially satisfy) the Average Deferral Percentage limitation described in
Section 13.2, the Average Contribution Percentage limitation described in
Section 14.1 or the multiple-use limitation described in Section 15.1 (or
more than one of such limitations), the Company, in its sole discretion,
may cause one or more Participating Companies to make a Qualified
Nonelective Contribution to the Plan. Any such Qualified Nonelective
Contribution shall be allocated to the Accounts of those Participants who
are eligible to receive an allocation of Matching Contributions under
Section 5.1 of the Plan or Nonelective Contributions under Section 5.2, as
the Company designates, and who are Nonhighly Compensated Employees for
the Plan Year with respect to which the Qualified Nonelective Contribution
is made, beginning with the Participant with the lowest Section 414(s)
Compensation for the Plan Year and allocating the maximum amount
permissible under Article 16 before allocating any portion of the
Qualified Nonelective Contribution to the Participant with the next lowest
Section 414(s) Compensation. These allocations shall continue until the
Plan satisfies the Average Deferral Percentage limitation described in
Section 13.2, the Average Contribution Percentage limitation described in
Section 14.1 or the multiple-use limitation described in Section 15.1 (or
more than one of such limitations), or until the amount of the Qualified
Nonelective Contribution is exhausted.
The Company, in its sole discretion, may include all or a portion of the
Qualified Nonelective Contributions for a Plan Year in Aggregate 401(k)
Contributions taken into account in applying the Average Deferral
Percentage limitation
37
described in Section 13.2 for such Plan Year, provided that the
requirements of Treasury Regulation Section 1.401(k)l(b)(5) are satisfied.
Qualified Nonelective Contributions shall be paid to the Trustee as soon
as reasonably practicable following the close of the Plan Year, shall be
allocated to the Accounts of Nonhighly Compensated Employees as of the
last day of the Plan Year and shall be fully and immediately vested. In
all other respects, the contribution, allocation, investment and
distribution of Qualified Nonelective Contributions shall be governed by
the provisions of the Plan concerning Matching Contributions.
13.7 Special Rules. The following special rules shall apply for purposes of
-------------
this Article 13:
(a) The amount of Excess Deferrals to be distributed to a Participant for
a calendar year pursuant to Section 13.1 shall be reduced by the
amount of any Excess Contributions previously distributed to such
Participant for the Plan Year beginning within such calendar year;
(b) The amount of Excess Contributions to be distributed to a Participant
for a Plan Year pursuant to Section 13.4 shall be reduced by the
amount of any Excess Deferrals previously distributed to such
Participant for the calendar year ending within such Plan Year;
(c) For purposes of applying the limitation described in Section 13.2, the
Actual Deferral Percentage of any Highly Compensated Employee who is
eligible to make Participant Elected Contributions and to make
elective deferrals (within the meaning of Section 402(g)(3) of the
Code) under any other plans, contracts or arrangements of the
Affiliated Group shall be determined as if all such Participant
Elected Contributions and elective deferrals were made under a single
arrangement; provided, however, that plans, contracts and arrangements
shall not be treated as a single arrangement to the extent that
Treasury Regulation Section 1.401(k)-l(b)(3)(ii)(B) prohibits
aggregation;
(d) In the event that this Plan is aggregated with one or more other plans
in order to satisfy the requirements of Code Section 401(a)(4), 401(k)
or 410(b), then all such aggregated plans, including the Plan, shall
be treated as a single plan for all purposes under all such Code
sections (except for purposes of the average benefit percentage
provisions of Code Section 410(b)(2)(A)(ii));
(e) In the event that the mandatory disaggregation rules of Treasury
Regulation Section 1.401(k)-l(b)(3)(ii)(B) apply to the Plan, or to
the Plan and other plans with which it is aggregated as described in
Subsection (d)
38
above, then the limitation described in Section 13.2 shall be applied
as if each mandatorily disaggregated portion of the Plan (or
aggregated plans) were a single arrangement; and
(f) Income (and loss) allocable to Excess Contributions for the Plan Year
shall be determined pursuant to the provisions for allocating income
(and loss) to a Participant's Accounts under Section 6.10 of the Plan.
13.8 Prospective Limitations on Participant Elected Contributions. At any
------------------------------------------------------------
time, the Company (at its sole discretion) may reduce the maximum rate at
which any Participant may make Participant Elected Contributions to the
Plan, or the Company may require that any Participant discontinue all
Participant Elected Contributions, in order to ensure that the limitations
described in this Article 13 are met. Any reduction or discontinuance of
Participant Elected Contributions may be applied selectively to individual
Participants or to particular classes of Participants, as the Company may
determine. Upon such date as the Company may determine, this Section shall
automatically cease to apply until the Company again determines that a
reduction or discontinuance of Participant Elected Contributions is
required for any Participant.
13.9 Special Definitions Used in Article 13. The following definitions shall
--------------------------------------
apply for purposes of this Article 13, and some may also apply for one or
more of Articles 14, 15 and 16.
(a) "Aggregate 401(k) Contributions" means, for any Plan Year, the sum
------------------------------
of the following: (a) the Participant's Participant Elected
Contributions for the Plan Year; (b) the Qualified Matching
Contributions allocated to the Participant's Accounts as of a date
within the Plan Year, but only to the extent that such Qualified
Matching Contributions are aggregated with Participant Elected
Contributions pursuant to Section 13.5; and (c) the Qualified
Nonelective Contributions allocated to the Participant's Accounts as
of a date within the Plan Year, but only to the extent that such
Qualified Nonelective Contributions are aggregated with Participant
Elected Contributions pursuant to Section 13.6.
(b) "Annual Deferral Limit" means the dollar limit in effect for any
---------------------
calendar year under Section 402(g) of the Code.
(c) "Excess Contributions" means the amount by which the Aggregate 401(k)
--------------------
Contributions of Highly Compensated Employees is reduced pursuant to
Section 13.3.
(d) "Excess Deferrals" means the amount of a Participant's Participant
----------------
Elected Contributions and elective deferrals (within the meaning of
39
Section 402(g)(3) of the Code) that exceed the Annual Deferral Limit
set forth in Section 13.1 (as defined in Section 13.9).
(e) "Section 414(s) Compensation" means any one of the following
---------------------------
definitions of compensation received by an Employee from members of
the Affiliated Group:
(1) Compensation as defined in Treasury Regulation Section 1.415-2(d)
or any successor thereto;
(2) "Wages" as defined in Section 3401(a) of the Code for purposes of
income tax withholding at the source, but determined without
regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in
Section 3401(a)(23) of the Code);
(3) "Wages" as defined in Section 3401(a) of the Code for purposes of
income tax withholding at the source, plus all other payments of
compensation reportable under Code Sections 6041(d) and
6051(a)(3) and the regulations thereunder, determined without
regard to any rules that limit such Wages or reportable
compensation based on the nature or location of the employment or
the services performed (such as the exception for agricultural
labor in Section 3401(a)(23) of the Code), and modified, at the
election of the Company, to exclude amounts paid or reimbursed
for the Employee's moving expenses, to the extent it is
reasonable to believe that these amounts are deductible by the
Employee under Section 217 of the Code;
(4) Any of the definitions of Section 414(s) Compensation set forth
in Subsections (1), (2) and (3) above, reduced by all of the
following items (even if includable in gross income):
reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation and welfare
benefits;
(5) Any of the definitions of Section 414(s) Compensation set forth
in Subsections (1), (2), (3) and (4) above, modified to include
the following: (a) any elective contributions made by a member of
the Affiliated Group on behalf of the Employee that are not
includable in gross income under Section 125, 402(e)(3), 402(h)
or 403(b) of the Code; (b) compensation deferred under an
eligible deferred compensation plan within the meaning of Section
457(b) of the Code; and (c) employee contributions described in
40
Section 414(h)(2) of the Code that are picked up by the employing
unit and thus are treated as employer contributions; or
(6) Any reasonable definition of compensation that does not by design
favor Highly Compensated Employees and that satisfies the
nondiscrimination requirement set forth in Treasury Regulation
Section 1.414(s)-lT(d)(2) or the successor thereto.
Any definition of Section 414(s) Compensation shall be used
consistently to define the compensation of all Employees taken into
account in satisfying the requirements of an applicable provision of
Articles 13, 14, 15 and 16 for the relevant determination period. For
purposes of applying the limitations set forth in Articles 13, 14 and
15 for a Plan Year, Section 414(s) Compensation shall not exceed the
Compensation Limitation.
ARTICLE 14. CONTRIBUTION LIMITATIONS: AVERAGE CONTRIBUTION PERCENTAGE
- ----------------------------------------------------------------------
LIMITATIONS.
-----------
14.1 Average Contribution Percentage Limitation. The Plan shall satisfy the
------------------------------------------
actual contribution percentage test, as provided in Section 401(m)(2) of
the Code and Section 1.401(m)-l of the regulations issued thereunder.
Subject to the special rules described in Section 14.6, the Aggregate
401(m) Contributions of Highly Compensated Employees shall not exceed the
limits described below:
(a) An Actual Contribution Percentage shall be determined for each
individual who, at any time during the Plan Year, is a Participant
(including a suspended Participant) or is eligible to participate in
the Plan, which Actual Contribution Percentage shall be the ratio,
computed to the nearest one-hundredth of one percent, of the
individual's Aggregate 401(m) Contributions for the Plan Year to the
individual's Section 414(s) Compensation for the Plan Year;
(b) The Actual Contribution Percentages (including zero percentages) of
Highly Compensated Employees and Nonhighly Compensated Employees shall
be separately averaged to determine each group's Average Contribution
Percentage; and
(c) The Aggregate 401(m) Contributions of Highly Compensated Employees
shall constitute Excess Aggregate Contributions and shall be reduced,
pursuant to Sections 14.2 and 14.3, to the extent that the Average
Contribution Percentage of Highly Compensated Employees exceeds the
greater of (1) 125 percent of the Average Contribution Percentage of
Nonhighly Compensated Employees for the preceding Plan Year or (2) the
lesser of (A) 200 percent of the Average Contribution Percentage of
41
Nonhighly Compensated Employees for the preceding Plan Year or (B) the
Average Contribution Percentage of Nonhighly Compensated Employees for
the preceding Plan Year plus two percentage points.
14.2 Allocation of Excess Aggregate Contributions to Highly Compensated
------------------------------------------------------------------
Employees. Any Excess Aggregate Contributions for a Plan Year shall be
---------
allocated to Highly Compensated Employees by use of a leveling process,
whereby the Aggregate 401(m) Contributions of the Highly Compensated
Employee with the highest amount of Aggregate 401(m) Contributions is
reduced to the extent required to (a) eliminate all Excess Aggregate
Contributions or (b) cause the amount of such Highly Compensated
Employee's Aggregate 401(m) Contributions to equal the amount of Aggregate
401(m) Contributions of the Highly Compensated Employee with the next-
highest amount of Aggregate 401(m) Contributions. The leveling process
shall be repeated until all Excess Aggregate Contributions for the Plan
Year are allocated to Highly Compensated Employees.
14.3 Distribution of Excess Aggregate Contributions. Excess Aggregate
----------------------------------------------
Contributions allocated to Highly Compensated Employees for the Plan Year
pursuant to Section 14.2, together with any income or loss allocable to
such Excess Aggregate Contributions, shall be distributed to such Highly
Compensated Employees not later than two-and-one-half months following the
close of such Plan Year, if possible, and in any event no later than 12
months following the close of such Plan Year, but only to the extent the
Highly Compensated Employee has a nonforfeitable interest in the Excess
Aggregate contributions. Excess Aggregate Contributions (for Participants
who are Highly Compensated Employees), to the extent not vested, may be
forfeited and allocated, after all other Forfeitures under the Plan, to
other Participants (but in no event to any Highly Compensated Employee) in
the proportion that such Participant's Participant Elected Contributions,
if any, for that Plan Year bears to the total Participant Elected
Contributions of all such Participants for the Plan Year. Any such amounts
shall be included in the calculation of the Actual Contribution Percentage
and in the calculation of the limits set forth in Article 16.
14.4 Use of Participant Elected Contributions. The Company, in its sole
----------------------------------------
discretion, may include all or a portion of the Participant Elected
Contributions for a Plan Year in Aggregate 401(m) Contributions taken into
account in applying the Average Contribution Percentage limitation
described in Section 14.1 for the Plan Year, provided that all Participant
Elected Contributions satisfy the average deferral percentage test, as
described in Section 13.2, and that the additional requirements of
Treasury Regulation Section 1.401(m)-l(b)(5) are satisfied.
14.5 Corrective Qualified Nonelective Contributions. The Company, in its sole
----------------------------------------------
discretion, may include all or a portion of the Qualified Nonelective
Contributions
42
made pursuant to Section 13.6 for a Plan Year in Aggregate 401(m)
Contributions taken into account in applying the Average Contribution
Percentage limitation described in Section 14.1 for the Plan Year,
provided that the requirements of Treasury Regulation Section 1.401(m)-
l(b)(5) are satisfied.
14.6 Special Rules. The following special rules shall apply for purposes of
-------------
this Article 14:
(a) For purposes of applying the limitation described in Section 14.1, the
Actual Contribution Percentage of any Highly Compensated Employee who
is eligible to participate in the Plan and to make employee
contributions or receive an allocation of matching contributions
(within the meaning of Section 401(m)(4)(A) of the Code) under any
other plans, contracts or arrangements of the Affiliated Group shall
be determined as if Matching Contributions and Qualified Matching
Contributions allocated to the Highly Compensated Employee's Accounts
and all such employee contributions and matching contributions were
made under a single arrangement;
(b) In the event that this Plan is aggregated with one or more other plans
in order to satisfy the requirements of Code Section 401(a)(4), 401(m)
or 410(b), then all such aggregated plans, including the Plan, shall
be treated as a single plan for all purposes under all such Code
sections (except for purposes of the average benefit percentage
provisions of Code Section 410(b)(2)(A)(ii));
(c) In the event that the mandatory disaggregation rules of Treasury
Regulation Section 1.401(m)-l(b)(3)(ii) apply to the Plan, or to the
Plan and other plans with which it is aggregated as described in
Subsection (b) above, then the limitation described in Section 14.1
shall be applied as if each mandatorily disaggregated portion of the
Plan (or aggregated plans) were a single arrangement; and
(d) Income (and loss) allocable to Excess Aggregate Contributions for the
Plan Year shall be determined pursuant to the provisions for
allocating income (and loss) to a Participant's Accounts under Section
6.10.
14.7 Special Definitions Used in Article 14. The following definitions shall
--------------------------------------
apply for purposes of this Article 14:
(a) "Aggregate 401(m) Contributions" means, for any Plan Year, the sum of
------------------------------
the following: (a) the Matching Contributions and Qualified Matching
Contributions allocated to the Participant's Accounts as of a date
within the Plan Year; (b) the Participant's Participant Elected
Contributions for the Plan Year, but only to the extent that such
Participant Elected
43
Contributions are aggregated with Matching Contributions and Qualified
Matching Contributions pursuant to Section 14.4; and (c) the Qualified
Nonelective Contributions allocated to the Participant's Accounts as
of a date within the Plan Year, but only to the extent that such
Qualified Nonelective Contributions are aggregated with Matching
Contributions and Qualified Matching Contributions pursuant to Section
14.5.
(b) "Excess Aggregate Contributions" means the amount by which the
------------------------------
Aggregate 401(m) Contributions of Highly Compensated Employees are
reduced pursuant to Section 14.2.
ARTICLE 15. CONTRIBUTION LIMITATIONS: MULTIPLE-USE LIMITATIONS.
- ---------------------------------------------------------------
15.1 Applicability of the Multiple-Use Limitation. The limitation described in
--------------------------------------------
this Article 15 shall apply only if, for a Plan Year, after the
limitations of Articles 13 and 14 are applied:
(a) The Average Deferral Percentage of Highly Compensated Employees (1)
exceeds 125 percent of the Average Deferral Percentage of Nonhighly
Compensated Employees, but (2) does not exceed the lesser of (A) 200
percent of the Average Deferral Percentage of Nonhighly Compensated
Employees or (B) the Average Deferral Percentage of Nonhighly
Compensated Employees plus two percentage points; and
(b) The Average Contribution Percentage of Highly Compensated Employees
(1) exceeds 125 percent of the Average Contribution Percentage of
Nonhighly Compensated Employees, but (2) does not exceed the lesser of
(A) 200 percent of the Average Contribution Percentage of Nonhighly
Compensated Employees or (B) the Average Contribution Percentage of
Nonhighly Compensated Employees plus two percentage points.
15.2 Multiple-Use Limitation. The sum of the Average Deferral Percentage and
-----------------------
Average Compensation Percentage of Highly Compensated Employees shall not
exceed the greater of (a) or (b) below.
(a) This limit equals the sum of:
(1) 1.25 times the greater of the Average Deferral Percentage or
Average Contribution Percentage of Nonhighly Compensated
Employees; and
(2) The lesser of (A) 200 percent of the lesser of the Average
Deferral Percentage or Average Contribution Percentage of
Nonhighly Compensated Employees, or (b) the lesser of the Average
Deferral
44
Percentage or Average Contribution Percentage of Nonhighly
Compensated Employees plus two percentage points.
(b) This limit equals the sum of:
(1) 1.25 times the lesser of the Average Deferral Percentage or
Average Contribution Percentage of Nonhighly Compensated
Employees; and
(2) The lesser of (A) 200 percent of the greater of the Average
Deferral Percentage or Average Contribution Percentage of
Nonhighly Compensated Employees, or (B) the greater of the
Average Deferral Percentage or Average Contribution Percentage of
Nonhighly Compensated Employees plus two percentage points.
15.3 Correction of Multiple-Use Limitation. To the extent necessary, the
-------------------------------------
limitation of Section 15.2 shall be satisfied by one or more of the
following methods: (a) the allocation of corrective Qualified Nonelective
Contributions in the manner set forth in Sections 13.6 or 14.5, or (b) the
distribution of Aggregate 401(m) Contributions (and income or loss
allocable thereto) to Highly Compensated Employees in the manner set forth
in Sections 14.2 and 14.3, followed by the distribution of Aggregate
401(k) Contributions (and income or loss allocable thereto) to Highly
Compensated Employees in the manner set forth in Sections 13.3 and 13.4.
ARTICLE 16. CONTRIBUTION LIMITATIONS: SECTION 415 "ANNUAL ADDITIONS"
- ----------------------------------------------------------------------
LIMITATIONS.
-----------
16.1 Limitation on Contributions. The Annual Additions allocated or attributed
---------------------------
to a Participant for any Plan Year shall not exceed the lesser of the
following:
(a) $30,000; or
(b) 25% of the Participant's Section 415 Compensation for such year.
If a Participant's Annual Additions would exceed the foregoing limitation,
then such Annual Additions shall be reduced by reducing the components
thereof as necessary in the order in which they are listed in Section
16.5(a). Any amounts so reduced shall not be included in a Participant's
Aggregate 401(k) Contributions or Aggregate 401(m) Contributions. The
limitation in Section 16.1(b) shall not apply to any amount that otherwise
is an Annual Addition under Section 415(l)(1) or 419A(d)(2) of the Code.
45
16.2 Combined Limitation on Benefits and Contributions. The sum of a
-------------------------------------------------
Participant's defined-benefit plan fraction and his or her defined
contribution plan fraction shall not exceed 1.0 with respect to any Plan
Year. For purposes of this Section, the terms "defined-benefit plan
fraction" and "defined-contribution plan fraction" shall have the meaning
given to such terms by Section 415(e) of the Code and the regulations
thereunder. If a Participant would exceed the foregoing limitation, then
the Participant's benefits under any qualified defined-benefit plan that
may be maintained by the Section 415 Employer Group shall be reduced as
necessary to allow his or her Annual Additions to equal the maximum
permitted by Section 16.l.
16.3 Return of Employee Contributions. If the amount of any Participant's
--------------------------------
Participant Elected Contributions is determined to be an excess Annual
Addition under this Article, then the amount of such excess (adjusted to
reflect any earnings, appreciation or losses attributable to such excess)
shall be refunded by the Trustee in cash to the Participant.
16.4 Excess Company Contributions. If the amount of the Company Contributions
----------------------------
allocated to a Participant for any Plan Year must be reduced to meet the
limitation described in Section 16.1, then the amount of the reduction
shall be applied to reduce the total amount that the Participating
Companies otherwise would contribute for such year pursuant to Article 5
of the Plan. If the amount that the Participating Companies may contribute
is thereby reduced to zero and if there are Company Contributions that
still cannot be allocated to any Participant because of the limitation
described in Section 16.1, then the excess shall be transferred to a
suspense account. Any gains, income or losses attributable to the suspense
account shall be allocated to such account. All amounts credited to the
suspense account shall be applied to reduce the total amount that the
Participating Companies otherwise would contribute to the Plan for the
next Plan Year, and for succeeding Plan Years if necessary. Such amounts
shall be allocated among Participants pursuant to Article 5 of the Plan
until the suspense account is exhausted (subject to this Article). No
Participant Elected Contributions or Company Contributions shall be made
as long as any amount remains in the suspense account.
16.5 Special Definitions Used in this Article 16. The following definitions
-------------------------------------------
shall apply for purposes of this Article 16.
(a) "Annual Additions" means, for any Plan Year, the sum of the following:
----------------
(1) The amount of after-tax contributions that the Participant
contributes during such year to all qualified retirement plans,
other than this Plan, maintained by the Section 415 Employer
Group;
46
(2) The amount of elective contributions that the Participant
contributes during such year to all qualified retirement plans,
other than this Plan, maintained by the Section 415 Employer
Group;
(3) The amount of Participant Elected Contributions that the
Participant contributes during such year;
(4) The amount of employer contributions and forfeitures allocated to
the Participant under any qualified defined contribution plan
that may be maintained by the Section 415 Employer Group, other
than this Plan, as of any date within such year; and
(5) The amount of Company Contributions and Forfeitures allocated to
the Participant as of any date within such year.
(b) "Section 415 Compensation" means any one of the definitions of Section
------------------------
414(s) Compensation described in Paragraphs (1), (2), (3) or (4) of
Section 13.9(e) received by an Employee from members of the Section
415 Employer Group. Any definition of Section 415 Compensation shall
be used consistently to define the compensation of all Employees taken
into account in satisfying the requirements of an applicable provision
of the Plan for the relevant determination period.
(c) "Section 415 Employer Group" means the Affiliated Group, except that
--------------------------
"more than 50 percent" shall be substituted for "at least 80 percent"
wherever the phrase occurs in Section 1563(a) of the Code (as
incorporated by reference in Sections 414(b) and (c) of the Code).
ARTICLE 17. THE TRUST FUND AND PLAN INVESTMENTS.
- ------------------------------------------------
17.1 Control and Management of Plan Assets. The Company is a named fiduciary
-------------------------------------
with respect to control over and management of the assets of the Plan, but
only to the extent of having the authority (a) to appoint one or more
trustees to hold assets of the Plan in trust and to enter into a trust
agreement with each trustee it appoints, (b) to appoint one or more
insurance companies that are qualified to do business in at least one
state to hold assets of the Plan and to enter into a contract with each
insurance company it appoints (or to direct the Trustee to enter into such
contract), (c) to appoint one or more Investment Managers for any assets
of the Plan and to enter into an investment management agreement with each
Investment Manager it appoints, and (d) to direct the investment of any
Plan assets not assigned to an Investment Manager.
47
17.2 Trustee Duties. The Trustee shall have the exclusive authority and
--------------
discretion to control and manage assets of the Plan it holds in trust,
except to the extent that (a) the Plan prescribes how such assets shall be
invested, (b) the Company directs how such assets shall be invested or (c)
the Company allocates the authority to manage such assets to one or more
Investment Managers. Each Investment Manager shall have the exclusive
authority to manage, including the authority to acquire and dispose of,
the assets of the Plan assigned to it by the Company, except to the extent
that the Plan prescribes or the Company directs how such assets shall be
invested. Each Trustee and Investment Manager shall be solely responsible
for diversifying, in accordance with Section 404(a)(1)(C) of ERISA, the
investment of the assets of the Plan assigned to it by the Company, except
to the extent that the Plan prescribes or the Company directs how such
assets shall be invested.
17.3 Independent Qualified Public Accountant. The Company shall engage an
---------------------------------------
independent qualified public accountant to conduct such examinations and
to express such opinions as may be required by Section 103(a)(3) of ERISA.
The Company in its discretion may remove and discharge the person so
engaged, in which event it shall appoint a successor independent qualified
public accountant to perform such examinations and express such opinions.
17.4 Administrative Expenses. All expenses of the Plan and the Trust Fund
-----------------------
shall be paid by the Participating Companies and by the Trust Fund. The
Company shall have complete and unfettered discretion to determine whether
an expense of the Plan shall be paid out of the Trust Fund or by the
Participating Companies, and the Company's discretion and authority to
direct the payment of expenses out of the Trust Fund shall not be limited
in any way by any prior decision or practice regarding the payment of Plan
expenses.
17.5 Benefit Payments. All benefits payable pursuant to the Plan shall be paid
----------------
by the Trustee out of the Trust Fund pursuant to the directions of the
Company and the terms of the Trust Agreement.
ARTICLE 18. ADMINISTRATION AND OPERATION OF THE PLAN.
- -----------------------------------------------------
18.1 Plan Administration. The Company is the named fiduciary that has the
-------------------
discretionary authority to control and manage the operation and
administration of the Plan, and the Company is the "administrator" and
"plan sponsor" of the Plan (as such terms are used in ERISA). The Company
in its sole discretion shall make such rules, interpretations and
computations and shall take such other actions to administer the Plan as
it may deem appropriate. Such rules, interpretations, computations and
actions shall be conclusive and binding on all persons. In administering
the Plan, the Company (a) shall act in a nondiscriminatory manner to the
extent required by Section 401(a) and related
48
sections of the Code and (b) shall at all times discharge its duties in
accordance with the standards set forth in Section 404(a)(1) of ERISA.
18.2 Employment of Advisers. The Company may retain such attorneys,
----------------------
accountants, consultants or other persons to render advice or to perform
services with regard to its responsibilities under the Plan as it shall
determine to be necessary or desirable. The Company may designate by
written instrument (signed by both parties) one or more persons to carry
out, where appropriate, fiduciary responsibilities under the Plan. The
Company's duties and responsibilities under the Plan that have not been
delegated to other fiduciaries pursuant to the preceding sentence shall be
carried out by its directors, officers and employees, acting on behalf and
in the name of the Company in their capacities as directors, officers and
employees, and not as individual fiduciaries.
18.3 Service in Several Fiduciary Capacities. Nothing herein shall prohibit
---------------------------------------
any person or group of persons from serving in more than one fiduciary
capacity with respect to the Plan.
ARTICLE 19. CLAIMS AND REVIEW PROCEDURES.
- -----------------------------------------
19.1 Applications for Benefits. Any application for benefits under the Plan
-------------------------
shall be submitted to the Company at its principal office. Such
application shall be in writing on the prescribed form and shall be signed
by the applicant.
19.2 Denial of Applications. In the event that any application for benefits is
----------------------
denied in whole or in part, the Company shall notify the applicant in
writing of the right to a review of the denial. Such written notice shall
set forth, in a manner calculated to be understood by the applicant,
specific reasons for the denial, specific references to the Plan
provisions on which the denial was based, a description of any information
or material necessary to perfect the application, an explanation of why
such material is necessary, and an explanation of the Plan's review
procedure. Such written notice shall be given to the applicant within 90
days after the Company receives the application, unless special
circumstances require an extension of time for processing the application.
In no event shall such an extension exceed a period of 90 days from the
end of the initial 90-day period. If such an extension is required,
written notice thereof shall be furnished to the applicant before the end
of the initial 90-day period. Such notice shall indicate the special
circumstances requiring an extension of time and the date by which the
Company expects to render a decision. If written notice is not given to
the applicant within the period prescribed by this Section 19.2, the
application shall be deemed to have been denied for purposes of Section
19.4 upon the expiration of such period.
49
19.3 Review Panel. The Company from time to time shall appoint a Review Panel.
------------
The Review Panel shall consist of three or more individuals who may (but
need not) be employees of the Company and shall be the named fiduciary
with the authority to act on any employee benefit appeal.
19.4 Requests for Review. Any person whose application for benefits is denied
-------------------
in whole or in part (or such person's duly authorized representative) may
appeal the denial by submitting to the Review Panel a request for a review
of such application within 90 days after receiving written notice of the
denial. The Review Panel shall give the applicant or such representative
an opportunity to review pertinent documents (except legally privileged
materials) in preparing such request for review and to submit issues and
comments in writing. The request for review shall be in writing and shall
be addressed to the Company's principal office. The request for review
shall set forth all of the grounds on which it is based, all facts in
support of the request, and any other matters which the applicant deems
pertinent. The Review Panel may require the applicant to submit such
additional facts, documents or other material as it may deem necessary or
appropriate in making its review.
19.5 Decisions on Review. The Review Panel shall act upon each request for
-------------------
review within 60 days after receipt thereof, unless special circumstances
require an extension of time for processing, but in no event shall the
decision on review be rendered more than 120 days after the Review Panel
receives the request for review. If such an extension is required, written
notice thereof shall be furnished to the applicant before the end of the
initial 90-day period. The Review Panel shall give prompt, written notice
of its decision to the applicant and to the Company. In the event that the
Review Panel confirms the denial of the application for benefits in whole
or in part, such notice shall set forth, in a manner calculated to be
understood by the applicant, the specific reasons for such denial and
specific references to the Plan provisions on which the decision is based.
To the extent that the Review Panel overrules the denial of the
application for benefits, such benefits shall be paid to the applicant.
19.6 Rules and Procedures. The Review Panel shall adopt such rules and
--------------------
procedures, consistent with ERISA and the Plan, as it deems necessary or
appropriate in carrying out its responsibilities under this Article 19.
19.7 Exhaustion of Administrative Remedies. No legal or equitable action for
-------------------------------------
benefits under the Plan shall be brought unless and until the claimant (a)
has submitted a written application for benefits in accordance with
Section 19.1, (b) has been notified that the application is denied, (c)
has filed a written request for a review of the application in accordance
with Section 19.4, and (d) has been notified in writing that the Review
Panel has affirmed the denial of the application; provided, however, that
an action may be brought after the Company or the Review Panel
50
has failed to act on the claim within the time prescribed in Section 19.2
and Section 19.5, respectively.
ARTICLE 20. AMENDMENT AND TERMINATION.
- --------------------------------------
20.1 Right To Amend or Terminate. The Company expects to continue the Plan
---------------------------
indefinitely. However, future conditions cannot be foreseen, and the
Company reserves the right at any time and for any reason, by action of
its board of directors or by a person or persons acting pursuant to a
valid delegation of authority, (a) to amend the Plan, (b) to reduce or
discontinue Employee Contributions, Company Contributions or all
Contributions or (c) to terminate the Plan and the Trust Fund.
20.2 Protection of Participants. No amendment of the Plan shall reduce the
--------------------------
benefit of any Participant that accrued under the Plan prior to the date
when such amendment is adopted, except to the extent that a reduction in
accrued benefits may be permitted by the Code and ERISA. No Plan amendment
or other action by the Company shall divert any part of the Plan's assets
to purposes other than the exclusive purpose of providing benefits to the
Participants and Beneficiaries who have an interest in the Plan and of
defraying the reasonable expenses of administering the Plan.
20.3 Effect of Termination. Upon termination of the Plan, no assets of the
---------------------
Plan shall revert to any Participating Company or be used for, or diverted
to, purposes other than the exclusive purpose of providing benefits to
Participants and Beneficiaries and of defraying the reasonable expenses of
termination. If the Plan is terminated or partially terminated, or if all
contributions to the Plan are completely discontinued, then each
Participant who then is an Employee and who is directly affected by such
event shall have a 100 percent vested interest in each of his or her
Accounts, without regard to the number of Years of Service he or she has
completed.
20.4 Allocation of Trust Fund Upon Termination. Upon termination of the Plan,
-----------------------------------------
the Trust Fund shall continue in existence until the Accounts of each
Participant have been distributed to such Participant (or to his or her
Beneficiary) pursuant to Article 8; provided, however, that the assets of
the Plan shall be allocated in accordance with any applicable requirements
under Section 403(d)(1) of ERISA.
20.5 Partial Termination. Upon a partial termination of the Plan, Sections
-------------------
20.3 and 20.4 shall apply with respect to such Participants and
Beneficiaries as are affected by such partial termination.
51
ARTICLE 21. MISCELLANEOUS PROVISIONS.
- -------------------------------------
21.1 Plan Mergers. The Plan shall not merge or consolidate with, or transfer
------------
assets or liabilities to, any other plan unless each Participant would
receive a benefit immediately after such merger, consolidation or transfer
(if the Plan then terminated) that is equal to or greater than the benefit
that such Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then
terminated).
21.2 No Assignment of Property Rights. Except as otherwise provided in Article
--------------------------------
9 with respect to QDROs or as provided in the following sentence, the
interest or property rights of any Participant or Beneficiary in the Plan,
in the Trust Fund or in any distribution to be made under the Plan shall
not be subject to option nor be assignable, either by voluntary or
involuntary assignment or by operation of law, including (without
limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any act in violation of this Section 21.2 shall be void.
Notwithstanding any Plan provision to the contrary, a Participant's Plan
benefits shall be reduced by any amount such Participant is ordered or
required to pay to the Plan if the order or requirement to pay arises (i)
under a judgement or conviction for a crime involving the Plan (ii) under
a civil judgment (including a consent order or decree) entered by a court
in an action brought in connection with a breach (or alleged breach) of
fiduciary duty under ERISA, or (iii) pursuant to a settlement agreement
entered into by the Participant and the Secretary of Labor in connection
with a breach of fiduciary duty under ERISA by a fiduciary or any other
person; provided, however, that the judgment, order, decree, or settlement
agreement expressly provides for the offset of all or part of the amount
ordered or required to be paid to the Plan against the Participant's
benefits under the Plan.
21.3 No Employment Rights. Nothing in the Plan shall be deemed to give any
--------------------
individual a right to remain in the employ of an Affiliate or affect the
right of an Affiliate to terminate an individual's employment at will with
or without cause, at any time with or without notice, for any reason or no
reason, which right is hereby reserved.
21.4 Choice of Law. The Plan and all rights thereunder shall be interpreted
-------------
and construed in accordance with ERISA and, to the extent that state law
is not preempted by ERISA, the law of the State of California.
21.5 Voting of Company Stock. Before each annual or special meeting of the
-----------------------
Company's shareholders, the Company shall cause to be sent to each
Participant who has invested any part of his or her Account in the Company
Stock fund the proxy statement and any related materials that are sent to
the Company's registered shareholders. Each Participant shall have the
right to instruct the Trustee confidentially (in writing on the prescribed
form) with respect to the
52
voting at such meeting of the number of shares of Company Stock that were
allocated to the Participant's Account as of the Valuation Date
immediately preceding the record date for such meeting or such later date,
up to and including the record date for such meeting, as the Plan
Administrator may deem practicable. Such instructions shall be submitted
to the Trustee by the date specified by the Company and, once received by
the Trustee, shall be irrevocable. Under no circumstances shall the
Trustee permit any Participating Company or any officer, employee or
representative thereof to see any voting instructions given by a
Participant to the Trustee. The Trustee shall vote any Company Stock for
which it has not received timely written instructions in the same
proportion as the Trustee votes the shares for which timely voting
instructions have been received from Participants.
21.6 Tender Offers. In the event that any person or group makes an offer
-------------
subject to Section 14(d) of the Exchange Act to acquire all or part of the
outstanding Company Stock, including Company Stock held in the Plan
("Acquisition Offer"), each Participant shall be entitled to direct the
Trustee confidentially (on a form prescribed by the Company) to tender all
or part of those shares of Company Stock that would then be subject to
such Participant's voting instructions under Subsection 21.5 above. If the
Trustee receives such an instruction by a date determined by the Trustee
and communicated to Participants, the Trustee shall tender such Company
Stock in accordance with such instruction. Any Company Stock as to which
the Trustee does not receive instructions within such period shall not be
tendered by the Trustee. The Trustee shall obtain and distribute to each
Participant all appropriate materials pertaining to the Acquisition Offer,
including the statement of the position of the Company with respect to
such offer issued pursuant to Regulation 14(e)-2 of the Exchange Act, as
soon as practicable after such materials are issued, provided, however,
that if the Company fails to issue such statement within five (5) business
days after the commencement of such offer, the Trustee shall distribute
such materials to each Participant without such statement by the Company
and shall separately distribute such statement by the Company as soon as
practicable after it is issued. The Trustee shall follow the procedures
regarding confidentiality and verification of compliance with voting
instructions described in Section 21.5 above.
ARTICLE 22. SPECIAL TOP-HEAVY PROVISIONS.
- -----------------------------------------
22.1 Determination of Top-Heavy Status. Any other provision of the Plan
---------------------------------
notwithstanding, this Article shall apply to any Plan Year in which the
Plan is a Top-Heavy Plan. The Plan shall be considered a "Top-Heavy Plan"
for a Plan Year if, as of the Determination Date for such Plan Year, the
Top-Heavy Ratio for the Aggregation Group exceeds 60 percent.
53
22.2 Minimum Allocations. For any Plan Year during which the Plan is a Top-
-------------------
Heavy Plan, the Company Contributions (exclusive of Qualified Nonelective
Contributions and Qualified Matching Contributions) allocated to the
Account of each Participant who is not a Key Employee, but who is an
Employee on the last day of such Plan Year, shall not be less than the
lesser of the following amounts:
(a) Three percent of his or her Top-Heavy Compensation; or
(b) A percentage of his or her Top-Heavy Compensation equal to the
greatest allocation of Company Contributions and Participant Elected
Contributions, expressed as a percentage of Top-Heavy Compensation,
made on behalf of any Participant who is a Key Employee.
22.3 Impact on Maximum Benefits. For any Plan Year in which the Plan is a Top-
--------------------------
Heavy Plan, the number "1.00" shall be substituted for the number "1.25"
wherever it appears in Section 415(e)(2) and (3) of the Code.
22.4 Special Definitions. For purposes of this Article 22, the following
-------------------
definitions shall apply:
(a) "Aggregation Group" means either the Required Aggregation Group or any
-----------------
Permissive Aggregation Group, as the Company may elect.
(b) "Determination Date" means the December 31 next preceding the
------------------
applicable Plan Year.
(c) "Key Employee" means a "key employee" (within the meaning of Section
------------
416(i) of the Code). In applying Section 416(i) of the Code, "annual
compensation" shall mean Top-Heavy Compensation
(d) "Permissive Aggregation Group" means a group of qualified plans that
----------------------------
includes (1) the Required Aggregation Group and (2) one or more plans
of the Affiliated Group that are not part of the Required Aggregation
Group. A Permissive Aggregation Group, when viewed as a single plan,
must satisfy the requirements of Sections 401(a)(4) and 410 of the
Code.
(e) "Required Aggregation Group" means a group of qualified plans that
--------------------------
includes (1) each plan of the Affiliated Group in which a Key Employee
is a participant and (2) each other plan of the Affiliated Group that
enables any plan in which a Key Employee participates to meet the
requirements to Section 401(a)(4) or 410 of the Code.
(f) "Top-Heavy Compensation" means Section 415 Compensation, as defined in
----------------------
Section 16.5(b); provided, however, that Top-Heavy
54
Compensation shall not include any amount paid to a Participant for
the Plan Year in excess of the Compensation Limitation.
(g) "Top-Heavy Ratio" means a percentage determined pursuant to Section
---------------
416(g) of the Code.
22.5 Top-Heavy Vesting Rules.
----------------------
(a) The vested interest in the Nonelective Account of each Participant
with one or more Hours of Service in a Plan Year in which the Plan is
a Top-Heavy Plan shall be determined in accordance with the following
schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
The vested interest in the Matching Contributions Account of each
Participant with one or more Hours of Service in a Plan Year in which
the Plan is a Top-Heavy Plan shall be determined under Section 7.2.
(b) If the Plan ceases to be a Top-Heavy Plan, the vesting rules described
in Section 7.3 shall again apply to all Years of Service with respect
to the Participant's Nonelective Account; however, any Participant
described in Subsection (a) who has at least three (3) Years of
Service to his or her credit at the time the Plan ceases to be a Top-
Heavy Plan shall continue to have his or her vested percentage
computed under the Plan in accordance with Subsection (a).
ARTICLE 23. EXECUTION.
- ----------------------
To record the amendment and restatement of the Plan as set forth herein,
effective as of October 23, 2000, the Company has caused its authorized officer
to execute the same this 6th day of December, 2000.
55
AMGEN INC.
By: /s/ Steven M. Odre
----------------------------
Steven M. Odre, Senior Vice
President, General Counsel and
Secretary
56
Appendix A
----------
Amgen (Bermuda) Clinical Development, Limited
Amgen (Bermuda) Clinical Development 2, Limited
Amgen (Bermuda) Clinical Development 3, Limited
Amgen (Bermuda) Clinical Development 4, Limited
Amgen (Bermuda) Clinical Development 5, Limited
Amgen (Bermuda) Clinical Development 6, Limited
Amgen (Bermuda) Clinical Development 7, Limited
Amgen (Bermuda) Clinical Development 8, Limited