EXHIBIT 10.42
NGC
PROFIT SHARING/401(k)
SAVINGS PLAN
As Amended and Restated
Effective January 1, 1998
NGC PROFIT SHARING/401(k) SAVINGS PLAN
THIS AGREEMENT AND DECLARATION OF TRUST is by and between NGC CORPORATION,
a Delaware corporation, hereinafter referred to as the "COMPANY," and CG TRUST
COMPANY, a trust company organized under the laws of the State of Illinois with
its principal office and place of business in the city of Chicago, Illinois,
hereinafter referred to as "TRUSTEE."
W I T N E S S E T H :
WHEREAS, the Company has heretofore adopted the NGC PROFIT SHARING/401(k)
SAVINGS PLAN, hereinafter referred to as the "PLAN," for the benefit of its
employees; and
WHEREAS, the Company has heretofore entered into a trust agreement with the
Trustee establishing a trust to hold and invest contributions made under the
Plan and from which benefits have been distributed under the Plan;
WHEREAS, the Company desires to restate the Plan and to amend the Plan in
several respects, intending thereby to provide an uninterrupted and continuing
program of benefits and to incorporate the trust agreement into the Plan
document;
NOW THEREFORE, the Plan and the trust agreement are hereby restated in
their entirety as follows with no interruption in time, effective as of January
1, 1998, except as otherwise indicated herein:
(i)
TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS AND CONSTRUCTION....................... I-1
ARTICLE II PARTICIPATION...................................... II-1
ARTICLE III CONTRIBUTIONS...................................... III-1
ARTICLE IV ALLOCATIONS AND LIMITATIONS........................ IV-1
ARTICLE V INVESTMENT FUNDS................................... V-1
ARTICLE VI RETIREMENT BENEFITS................................ VI-1
ARTICLE VII DISABILITY BENEFITS................................ VII-1
ARTICLE VIII SEVERANCE BENEFITS AND DETERMINATION
OF VESTED INTEREST................................. VIII-1
ARTICLE IX DEATH BENEFITS..................................... IX-1
ARTICLE X TIME AND FORM OF PAYMENT OF BENEFITS............... X-1
ARTICLE XI IN-SERVICE WITHDRAWALS............................. XI-1
ARTICLE XII LOANS.............................................. XII-1
ARTICLE XIII ADMINISTRATION OF THE PLAN......................... XIII-1
ARTICLE XIV TRUSTEE AND ADMINISTRATION OF TRUST FUND........... XIV-1
ARTICLE XV FIDUCIARY PROVISIONS............................... XV-1
ARTICLE XVI AMENDMENTS......................................... XVI-1
ARTICLE XVII DISCONTINUANCE OF CONTRIBUTIONS,
TERMINATION, PARTIAL TERMINATION,
AND MERGER OR CONSOLIDATION........................ XVII-1
ARTICLE XVIII PARTICIPATING EMPLOYERS............................ XVIII-1
ARTICLE XIX MISCELLANEOUS PROVISIONS........................... XIX-1
ARTICLE XX TOP-HEAVY STATUS................................... XX-1
(ii)
I.
Definitions and Construction
I.1 Definitions. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) Account(s): A Member's After-Tax Account, Before-Tax Account, Dow ESOP
Account, Dow Transfer Account, Employer Contribution Account, and/or
Rollover Contribution Account, including the amounts credited thereto and
any subaccounts thereof.
(2) Act: The Employee Retirement Income Security Act of 1974, as amended.
(3) After-Tax Account: An individual account for each Member which is credited
with the balance, if any, of such Member's Prior Employee (Post-Tax)
Contribution Account as of December 31, 1997, and which is credited with
(or debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund.
(4) Annuity Starting Date: With respect to each Member or beneficiary, the
first day of the first period for which an amount is payable to the Member
or beneficiary from the Trust Fund as an annuity or in any other form.
(5) Before-Tax Account: An individual account for each Member, which
(A) is credited with
(i) the balance in such Member's Elective Deferral Contributions
Account (also known as the Pre-tax Contributions Account) under
the Plan as of December 31, 1997, and
(ii) the Before-Tax Contributions made by the Employer on such
Member's behalf and the Employer Safe Harbor Contributions, if
any, made on such Member's behalf pursuant to Section 3.5 to
satisfy the restrictions set forth in Section 3.1(e), and
(B) is credited with (or debited for) such account's allocation of net
income (or net loss) and changes in value of the Trust Fund.
(6) Before-Tax Contributions: Contributions made to the Plan by the Employer on
a Member's behalf in accordance with the Member's elections to defer
Compensation under the Plan's qualified cash or deferred arrangement as
described in Section 3.1.
(7) Code: The Internal Revenue Code of 1986, as amended.
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(8) Committee: The NGC Corporation Retirement/Benefit Plans Committee.
(9) Company: NGC Corporation.
(10) Company Stock: The common stock of NGC Corporation.
(11) Company Stock Fund: The Investment Fund established to invest
primarily in Company Stock.
(12) Compensation: The regular or base salary or wages (but excluding overtime
payments and bonuses) paid by the Employer to or for the benefit of a
Member for services rendered or labor performed for the Employer while a
Member and an Eligible Employee, subject to the following adjustments and
limitations:
(A) The following shall be included:
(i) elective contributions made on a Member's behalf by the Employer
that are not includable in income under section 125, section
402(e)(3), section 402(h), or section 403(b) of the Code;
(ii) compensation deferred under an eligible deferred compensation
plan within the meaning of section 457(b) of the Code; and
(iii) employee contributions described in section 414(h) of the Code
that are picked up by the employing unit and are treated as
employer contributions.
(B) The Compensation of any Member taken into account for purposes of the
Plan shall be limited to $150,000 for any Plan Year with such
limitation to be:
(i) adjusted automatically to reflect any amendments to section
401(a)(17) of the Code and any cost-of-living increases
authorized by section 401(a)(17) of the Code; and
(ii) prorated for a Plan Year of less than twelve months and to the
extent otherwise required by applicable law.
(13) Controlled Entity: Each corporation that is a member of a controlled group
of corporations, within the meaning of section 1563(a) (determined without
regard to sections 1563(a)(4) and 1563(e)(3)(C)) of the Code, of which the
Employer is a member, each trade or business (whether or not incorporated)
with which the Employer is under common control, and each member of an
affiliated service group, within the meaning of section 414(m) of the Code,
of which the Employer is a member.
(14) Destec Account(s): A Member's Destec Before-Tax Account, Destec After-Tax
Account, Destec Employer Contribution Account, and/or Destec Rollover
Contribution Account,
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including the amounts credited thereto. In addition to other provisions of
the Plan, a Member's Destec Account(s) shall be subject to the provisions
of Appendix B, and in the event of any conflict, Appendix B shall control.
(15) Destec After-Tax Account: A subaccount of the After-Tax Account which is
credited with the amount, if any, transferred from a Member's After-Tax
Account under the Destec Plan and which is credited with (or debited for)
such account's allocation of net income (or net loss) and changes in value
of the Trust Fund.
(16) Destec Before-Tax Account: A subaccount of the Before-Tax Account which is
credited with the amount, if any, transferred from a Member's Before-Tax
Contributions Account under the Destec Plan and which is credited with (or
debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund.
(17) Destec Employer Contribution Account: A subaccount of the Employer
Contribution Account which is credited with the amount, if any, transferred
from a Member's Employer Contribution Account under the Destec Plan and
which is credited with (or debited for) such account's allocation of net
income (or net loss) and changes in value of the Trust Fund.
(18) Destec Plan: The Destec Energy, Inc. Retirement and Savings Plan.
(19) Destec Rollover Contribution Account: A subaccount of the Rollover
Contribution Account which is credited with the amount, if any, transferred
from a Member's Rollover Account under the Destec Plan and which is
credited with (or debited for) such account's allocation of net income (or
net loss) and changes in value of the Trust Fund.
(20) Direct Rollover: A payment by the Plan to an Eligible Retirement Plan
designated by a Distributee.
(21) Directors: The Board of Directors of the Company.
(22) Distributee: Each (A) Member entitled to an Eligible Rollover Distribution,
(B) Member's surviving spouse with respect to the interest of such
surviving spouse in an Eligible Rollover Distribution, and (C) former
spouse of a Member who is an alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, with regard to
the interest of such former spouse in an Eligible Rollover Distribution.
(23) Dow ESOP Account: An individual account for each Member which is credited
with the amount, if any, transferred from the Member's Dow ESOP Account
under the Destec Plan and which is credited with (or debited for) such
account's allocation of net income (or net loss) and changes in value of
the Trust Fund. In addition to other provisions of the Plan, a Member's Dow
ESOP Account shall be subject to the provisions of Appendix C and, in the
event of any conflict, Appendix C shall control.
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(24) Dow Stock: The common stock of The Dow Chemical Company, or any
successor thereto.
(25) Dow Transfer Account: An individual account for each Member which is
credited with the sum of (A) the amount, if any, transferred from the
Member's Dow Transfer Account under the Destec Plan and, (B) amounts, if
any, transferred from the Member's Dow ESOP Account pursuant to Appendix C,
and which is credited with (or debited for) such account's allocation of
net income (or net loss) and changes in value of the Trust Fund. In
addition to the other provisions of the Plan, a Member's Dow Transfer
Account shall be subject to the provisions of Appendix C and, in the event
of any conflict, Appendix C shall control.
(26) Effective Date: January 1, 1998, as to this restatement of the Plan, except
(A) as otherwise indicated in specific provisions of the Plan, (B) that
provisions of the Plan required to have an earlier effective date by
applicable statute and/or regulation shall be effective as of the required
effective date in such statute and/or regulation, and (C) that provisions
hereof affecting the duties of the Trustee shall be effective as of the
date of execution of this restatement of the Plan by the Trustee. The
original effective date of the Plan was May 1, 1989.
(27) Eligible Employee: Each Employee other than (A) an Employee whose terms and
conditions of employment are governed by a collective bargaining agreement,
unless such agreement provides for his coverage under the Plan, (B) a
nonresident alien, and (C) an Employee who is a Leased Employee or who is
designated, compensated, or otherwise classified by the Employer as a
Leased Employee. Notwithstanding any provision of the Plan to the contrary,
no individual who is designated, compensated, or otherwise classified or
treated by the Employer as an independent contractor shall be eligible to
become a Member of the Plan.
(28) Eligible Retirement Plan: (A) With respect to a Distributee other than a
surviving spouse, 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 plan described in section 401(a) of the Code, which
under its provisions and applicable law may accept such Distributee's
Eligible Rollover Distribution and (B) with respect to a Distributee who is
a surviving spouse, an individual retirement account described in section
408(a) of the Code or an individual retirement annuity described in section
408(b) of the Code.
(29) Eligible Rollover Distribution: Any distribution of all or any portion of
the Accounts of a Distributee other than (A) a distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary or for a specified period of ten years
or more, (B) a distribution to the extent such distribution is required
under section 401(a)(9) of the Code, (C) the portion of a distribution that
is not includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities), (D) a loan treated as a distribution under section 72(p) of
the Code and not excepted by
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section 72(p)(2), (E) a loan in default that is a deemed distribution, (F)
any corrective distribution provided in Sections 3.8 and 4.5(b), and (G)
any other distribution so designated by the Internal Revenue Service in
revenue rulings, notices, and other guidance of general applicability.
(30) Eligible Surviving Spouse: (A) In the case of a Member who is living on his
Annuity Starting Date, the spouse to whom a deceased Member was married on
his Annuity Starting Date and (B) in the case of a Member who dies before
his Annuity Starting Date, the spouse to whom a deceased Member was married
on the date of his death.
(31) Employee: Each (A) individual employed by the Employer and (B) Leased
Employee.
(32) Employer: The Company, Destec Energy, Inc., Warren NGL, Inc., Warren
Energy, Inc., LPG Services Group, Inc., NGC Oil Trading and Transportation,
Inc., Natural Gas Clearinghouse, Inc., Warren Petroleum, and each entity
that has been designated to participate in the Plan pursuant to the
provisions of Article XVIII.
(33) Employer Contribution Account: An individual account for each Member, which
is credited with balance, if any, of the sum of (A) as of December 31,
1997, the balances in the Matching Contribution Account and the Nonelective
Contributions Account (also known as the Profit Sharing/Discretionary
Contribution Account), (B) the Employer Matching Contributions made on such
Member's behalf pursuant to Section 3.2, (C) the Employer Profit Sharing
Contributions made on such Member's behalf pursuant to Section 3.3, (D) the
Employer Discretionary Contributions, if any, made on such Member's behalf
pursuant to Section 3.4, and (E) the Employer Safe Harbor Contributions, if
any, made on such Member's behalf pursuant to Section 3.5 to satisfy the
restrictions set forth in Section 3.6 and which is credited with (or
debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund.
(34) Employer Contribution Account Subject to Vesting. The portion of a Member's
Employer Contribution Account which is subject to the vesting schedule set
forth in Section 8.3(e).
(35) Employer Contributions: The total of Employer Matching Contributions,
Employer Discretionary Contributions, Employer Profit Sharing
Contributions, and Employer Safe Harbor Contributions.
(36) Employer Discretionary Contributions: Contributions made to the Plan by the
Employer pursuant to Section 3.4.
(37) Employer Matching Contributions: Contributions made to the Plan by the
Employer pursuant to Section 3.2.
(38) Employer Profit Sharing Contributions: Contributions made to the Plan by
the Employer pursuant to Section 3.3.
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(39) Employer Safe Harbor Contributions: Contributions made to the Plan by the
Employer pursuant to Section 3.5.
(40) Employment Commencement Date: The date on which an individual first
performs an Hour of Service.
(41) Highly Compensated Employee: Each Employee who performs services during the
Plan Year for which the determination of who is highly compensated is being
made (the "Determination Year") and who:
(A) is a five-percent owner of the Employer (within the meaning of section
416(i)(1)(A)(iii) of the Code) at any time during the Determination
Year or the twelve-month period immediately preceding the Determination
Year (the "Look-Back Year"); or
(B) For the Look-Back Year
(i) receives compensation (within the meaning of section 414(q)(4)
of the Code; "compensation" for purposes of this Paragraph) in
excess of $80,000 (with such amount to be adjusted automatically
to reflect any cost-of-living adjust-adjustments authorized by
section 414(q)(1) of the Code) during the Look-Back Year; and
(ii) if the Committee elects the application of this clause in such
Look-Back Year, is a member of the top 20% of Employees for the
Look-Back Year (other than Employees described in section
414(q)(5) of the Code) ranked on the basis of compensation
received during the year.
For purposes of the preceding sentence, (i) all employers aggregated with
the Employer under section 414(b), (c), (m), or (o) of the Code shall be
treated as a single employer, (ii) a former Employee who had a separation
year (generally, the Determination Year such Employee separates from
service) prior to the Determination Year and who was an active Highly
Compensated Employee for either such separation year or any Determination
Year ending on or after such Employee's fifty-fifth birthday shall be
deemed to be a Highly Compensated Employee, and (iii) the Committee may
elect, in accordance with the provisions of applicable Treasury
regulations, rulings and notices, to make the Look-Back Year calculation
for a Determination Year on the basis of the calendar year ending with or
within the applicable Determination Year (or, in the case of a
Determination Year that is shorter than twelve months, the calendar year
ending with or within the twelve-month period ending with the end of the
applicable Determination Year). To the extent that the provisions of this
Paragraph are inconsistent or conflict with the definition of a "highly
compensated employee" set forth in section 414(q) of the Code and the
Treasury regulations thereunder, the relevant terms and provisions of
section 414(q) of the Code and the Treasury regulations thereunder shall
govern and control.
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(42) Hour of Service: Each hour for which an individual is directly or
indirectly paid, or entitled to payment, by the Employer or a Controlled
Entity for the performance of duties or for reasons other than the
performance of duties.
(43) Investment Fund: A portion of the Trust Fund that is invested in a
specified manner as described in Article V.
(44) Leased Employee: Each person who is not an employee of the Employer or a
Controlled Entity but who performs services for the Employer or a
Controlled Entity pursuant to an agreement (oral or written) between the
Employer or a Controlled Entity and any leasing organization, provided that
such person has performed such services for the Employer or a Controlled
Entity or for related persons (within the meaning of section 144(a)(3) of
the Code) on a substantially full-time basis for a period of at least one
year and such services are performed under primary direction or control by
the Employer or a Controlled Entity.
(45) Member: Each individual who (A) has met the eligibility requirements for
participation in the Plan pursuant to Article II, (B) has made a Rollover
Contribution in accordance with Section 3.9, or (C) had an account balance
under the Plan as of December 31, 1997.
(46) Normal Retirement Date: The date a Member attains the age of sixty-five.
(47) Period of Service: Each period of an individual's Service commencing on his
Employment Commencement Date or a Reemployment Commencement Date, if
applicable, and ending on a Severance from Service Date. Notwithstanding
the foregoing, a period during which an individual is absent from Service
by reason of the individual's pregnancy, the birth of a child of the
individual, the placement of a child with the individual in connection with
the adoption of such child by the individual, or for the purposes of caring
for such child for the period immediately following such birth or placement
shall not constitute a Period of Service between the first and second
anniversary of the first date of such absence. A Period of Service shall
also include any period required to be credited as a Period of Service by
federal law other than the Act or the Code, but only under the conditions
and to the extent so required by such federal law.
(48) Period of Severance: Each period of time commencing on an individual's
Severance from Service Date and ending on a Reemployment Commencement Date.
(49) Plan: The NGC Profit Sharing/401(k) Savings Plan, as amended from time to
time.
(50) Plan Year: The twelve-consecutive month period commencing January 1 of each
year.
(51) Reemployment Commencement Date: The first date upon which an individual
performs an Hour of Service following a Severance from Service Date.
(52) Rollover Contribution Account: An individual account for a Member, which is
credited with the sum of (A) the amount, if any, credited to such Member's
Rollover Contributions
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Account as of December 31, 1997, and (B) the Rollover Contributions of such
Member and which is credited with (or debited for) such account's
allocation of net income (or net loss) and changes in value of the Trust
Fund.
(53) Rollover Contributions: Contributions made by an Eligible Employee pursuant
to Section 3.9.
(54) Service: The period of an individual's employment with the Employer or a
Controlled Entity. In addition, the Committee may, in its discretion,
credit individuals with Service for employment with any other entity, but
only if and when such individual becomes an Eligible Employee and only if
such crediting of Service (i) has a legitimate business reason, (ii) does
not by design or operation discriminate significantly in favor of Highly
Compensated Employees, and (iii) is applied to all similarly-situated
Eligible Employees. Notwithstanding the foregoing, each Member shall be
credited with Service, as of December 31, 1997, in accordance with the
provisions of the Plan in effect at such time.
(55) Severance from Service Date: The earlier of (A) the first date on which an
individual terminates his Service following his Employment Commencement
Date or a Reemployment Commencement Date, if applicable, (B) the first
anniversary of the first date of a period in which an Employee remains
absent from Service (with or without pay) with the Employer for any reason
other than an authorized leave of absence, resignation, retirement,
discharge, or death, such as vacation, holiday, disability, or lay-off that
is not classified by the Employer as a termination of Service, or (C) the
second anniversary of the first date of an Employee's authorized leave of
absence (with or without pay). Notwithstanding the foregoing, the Severance
from Service Date of an individual who is absent from Service by reason of
the individual's pregnancy, the birth of a child of the individual, the
placement of a child with the individual in connection with the adoption of
such child by the individual, or for purposes of caring for such child for
the period immediately following such birth or placement shall be the
second anniversary of the first date of such absence.
(56) Single Plan Member: With respect to a Plan Year, an individual who (A) as
of the last day of such Plan Year, is an Eligible Employee and is not
currently accruing benefits or earning service credit under the Trident
NGL, Inc. Retirement Plan or (B) terminated employment during such Plan
Year on or after his Normal Retirement Date or by reason of death or
disability (as defined in Section 7.2) and, immediately prior to such
termination, was not currently accruing benefits or earning service credit
under the Trident NGL, Inc. Retirement Plan.
(57) Trident Before-Tax Account: A subaccount of the Before-Tax Account which is
credited with the amount, if any, transferred from a Trident Member's
Pretax Deferral Account under the Trident Plan and which is credited with
(or debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund. In addition to other provisions of the
Plan, a Member's Trident Before-Tax Account shall be subject to the
provisions of Appendix A, and in the event of any conflict, Appendix A
shall control.
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(58) Trident Matching Account: A subaccount of the Employer Contribution Account
which is credited with the amounts, if any, transferred from a Member's
Matching Account under the Trident Plan, and which is credited with (or
debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund. In addition to other provisions of the
Plan, a Member's Trident Matching Account shall be subject to the
provisions of Appendix A, and in the event of any conflict, Appendix A
shall control.
(59) Trident Member: A Member with a balance in the Trident NGL, Inc. Savings
Plan that was transferred to the Plan.
(60) Trident Plan: The Trident NGL, Inc. Savings Plan which was, effective
April 1, 1995, merged with and into the Plan.
(61) Trident Matching Stock Account: A subaccount of the Trident Matching
Account which is credited with the amounts, if any, transferred from a
Member's Matching Account under the Trident Plan and that were invested in
Company Stock, and which is credited with (or debited for) such account's
allocation of net income (or net loss) and changes in value of the Trust
Fund.
(62) Trident Profit Sharing Stock Account: A subaccount of the Employer
Contribution Account which is credited with the amounts, if any,
transferred from a Member's Profit Sharing Account under the Trident Plan
and that were invested in Company Stock, and which is credited with (or
debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund.
(63) Trident Rollover Account: A subaccount of the Rollover Account which is
credited with the amounts, if any, transferred from a Member's Rollover
Account under the Trident Plan and which is credited with (or debited for)
such account's allocation of net income (or net loss) and changes in value
of the Trust Fund. In addition to other provisions of the Plan, a Member's
Trident Rollover Account shall be subject to the provisions of Appendix A,
and in the event of any conflict, Appendix A shall control.
(64) Trust: The trust established herein to hold and invest contributions made
under the Plan, and income thereon, and from which the Plan benefits are
distributed.
(65) Trust Fund: The funds and properties held pursuant to the provisions hereof
for the use and benefit of the Members, together with all income, profits,
and increments thereto.
(66) Trustee: The trustee or trustees qualified and acting hereunder at any
time.
(67) Vested Interest: The portion of a Member's Accounts which, pursuant to the
Plan, is nonforfeitable.
(68) Vesting Service: The measure of service used in determining a Member's
Vested Interest as determined pursuant to Section 8.4.
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I.2 Number and Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
I.3 Headings. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
I.4 Construction. It is intended that the Plan be qualified within the
meaning of section 401(a) of the Code and that the Trust be tax exempt under
section 501(a) of the Code, and all provisions herein shall be construed in
accordance with such intent.
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II.
Participation
2.1 Eligibility. On or after the Effective Date, each Eligible Employee
shall be eligible to become a Member immediately upon his employment as an
Eligible Employee. Notwithstanding the foregoing:
(a) An individual who was a Member of the Plan on the day prior to the
Effective Date shall remain a Member of this restatement thereof as of the
Effective Date;
(b) An Employee who has not become a Member of the Plan because he was
not an Eligible Employee shall be eligible to become a Member of the Plan
immediately upon becoming an Eligible Employee as a result of a change in
his employment status; and
(c) A Member who ceases to be an Eligible Employee but remains an
Employee shall continue to be a Member but, on and after the date he ceases
to be an Eligible Employee, he shall no longer be entitled to defer
Compensation hereunder or share in allocations of Employer Contributions
unless and until he shall again become an Eligible Employee.
2.2 Participation. Membership in the Plan is voluntary. Any Eligible
Employee may become a Member upon the date he first become eligible pursuant to
Section 2.1 by following the procedures prescribed by the Committee within the
time limits prescribed by the Committee. Any Eligible Employee who does not
become a Member upon the date he first becomes eligible pursuant to Section 2.1
may become a Member on the first day of any subsequent calendar month by timely
following the procedures prescribed by the Committee. Notwithstanding the
foregoing, membership in the Plan is automatic for any individual who qualifies
as a Single Plan Member.
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III.
Contributions
III.1 Before-Tax Contributions.
(a) A Member who is an Eligible Employee may elect to defer an
integral percentage of from 2% to 12% (or such lesser percentage as may be
prescribed from time to time by the Committee) of his Compensation for a Plan
Year by having the Employer contribute the amount so deferred to the Plan.
Compensation for a Plan Year not so deferred by such election shall be received
by such Member in cash. A Member's election to defer an amount of his
Compensation pursuant to this Section shall be made by authorizing his Employer,
in the manner prescribed by the Committee, to reduce his Compensation in the
elected amount and the Employer, in consideration thereof, agrees to contribute
an equal amount to the Plan. The reduction in a Member's Compensation for a Plan
Year pursuant to his election hereunder shall be effected by Compensation
reductions as of each payroll period within such Plan Year following the
effective date of such election. The amount of Compensation elected to be
deferred by a Member for a Plan Year pursuant to this Section shall become a
part of the Employer's Before-Tax Contributions for such Plan Year.
(b) A Member's Compensation reduction election shall remain in force
and effect for all periods following its effective date until modified or
terminated or until such Member ceases to be an Eligible Employee. A Member who
has elected to defer a portion of his Compensation may change his deferral
election percentage (within the percentage limits set forth in Paragraph (a)
above), effective as of the first of any calendar month, by electing a new
Compensation reduction percentage in the manner and within the time period
prescribed by the Committee.
(c) A Member may cancel his Compensation reduction election,
effective as of the first day of any calendar month, in accordance with the
procedures and within the time period prescribed by the Committee. A Member who
so cancels his Compensation reduction election may resume Compensation
deferrals, effective as of the first day of any calendar month (provided such
Member is an Eligible Employee), by making a new Compensation reduction election
in the manner and within the time period prescribed by the Committee.
(d) In restriction of the Members' elections provided in Paragraphs
(a), (b), and (c) above, the Before-Tax Contributions and the elective deferrals
(within the meaning of section 402(g)(3) of the Code) under all other plans,
contracts, and arrangements of the Employer on behalf of any Member for any
calendar year shall not exceed $7,000 (with such amount to be adjusted
automatically to reflect any cost-of-living adjustments authorized by section
402(g)(5) of the Code).
(e) In further restriction of the Members' elections provided in
Paragraphs (a), (b), and (c) above, it is specifically provided that one of the
"actual deferral percentage" tests set forth in section 401(k)(3) of the Code
and the Treasury regulations thereunder must be met in each Plan Year. If
multiple use of the alternative limitation (within the meaning of section
401(m)(9) of the Code and Treasury regulation (S) 1.401(m)-2(b)) occurs during a
Plan Year, such multiple use shall
III-1
be corrected in accordance with the provisions of Treasury regulation (S) 1.401
(m)-2(c); provided, however, that if such multiple use is not eliminated by
making Employer Safe Harbor Contributions, then the "actual contribution
percentages" of all Highly Compensated Employees participating in the Plan shall
be reduced, and the excess contributions distributed, in accordance with the
provisions of Section 3.8(c) and applicable Treasury regulations, so that there
is no such multiple use.
(f) If the restrictions set forth in Paragraph (d) or (e) above
would not otherwise be met for any Plan Year, the Compensation deferral
elections made pursuant to Paragraphs (a), (b), and (c) above of affected
Members may be reduced by the Committee on a temporary and prospective basis in
such manner as the Committee shall determine.
(g) As soon as administratively feasible following the end of each
month, but no later than the time required by applicable law, the Employer shall
contribute to the Trust, as Before-Tax Contributions with respect to each
Member, an amount equal to the amount of Compensation elected to be deferred,
pursuant to Paragraphs (a) and (b) above (as adjusted pursuant to Paragraph (f)
above), by such Member during such month. Such contributions, as well as the
contributions made pursuant to Sections 3.2, 3.3, 3.4, and 3.5, shall be made
without regard to current or accumulated profits of the Employer.
Notwithstanding the foregoing, the Plan is intended to qualify as a profit
sharing plan for purposes of sections 401(a), 402, 412, and 417 of the Code.
III.2 Employer Matching Contributions. For each calendar month, the
Employer shall contribute to the Trust, as Employer Matching Contributions, an
amount that equals 100% of the Before-Tax Contributions that were made pursuant
to Section 3.1 on behalf of each of the Members during such month and that were
not in excess of 5% of each such Member's Compensation for such month. Employer
Matching Contributions shall be made in shares of Company Stock. The shares of
Company Stock that are so contributed shall be valued at the closing price of
such stock on the New York Stock Exchange, Inc. as reported by The Wall Street
Journal in the New York Stock Exchange Composite Transactions for the last day
of the month for which the contribution is made (or the next preceding regular
business date if the last day of such month is not a regular business date).
III.3 Employer Profit Sharing Contributions. For each Plan Year, the
Employer shall contribute to the Trust, as an Employer Profit Sharing
Contribution, an amount equal to 5% of the Compensation of all Single Plan
Members for such Plan Year.
III.4 Employer Discretionary Contributions. For each Plan Year, the
Employer may contribute to the Trust, as an Employer Discretionary Contribution,
an additional amount as determined in its discretion. Employer Discretionary
Contributions shall be made in shares of Company Stock. The shares of Company
Stock that are so contributed shall be valued at the closing price of such stock
on the New York Stock Exchange, Inc. as reported by The Wall Street Journal in
the New York Stock Exchange Composite Transactions for the last day of the Plan
Year for which the contribution is made (or the next preceding regular business
date if the last day of such Plan Year is not a regular business date).
III-2
III.5 Employer Safe Harbor Contributions. In addition to the Employer
Matching Contributions made pursuant to Section 3.2, the Employer Profit Sharing
Contributions made pursuant to Section 3.3, and the Employer Discretionary
Contributions made pursuant to Section 3.4, for each Plan Year, the Employer, in
its discretion, may contribute to the Trust as a "safe harbor contribution" for
such Plan Year the amounts necessary to cause the Plan to satisfy the
restrictions set forth in Section 3.1(e) (with respect to certain restrictions
on Before-Tax Contributions) and Section 3.6 (with respect to certain
restrictions on Employer Matching Contributions). Amounts contributed in order
to satisfy the restrictions set forth in Section 3.1(e) shall be considered
"qualified matching contributions" (within the meaning of Treasury regulation
(S) 1.401(k)-1(g)(13)) for purposes of such Section, and amounts contributed in
order to satisfy the restrictions set forth in Section 3.6 shall be considered
Employer Matching Contributions for purposes of such Section. Any amounts
contributed pursuant to this Paragraph shall be allocated in accordance with the
provisions of Sections 4.2(e), (f) and (g).
III.6 Restrictions on Employer Matching Contributions. In restriction of
the Employer Matching Contributions hereunder, it is specifically provided that
one of the "actual contribution percentage" tests set forth in section 401(m) of
the Code and the Treasury regulations thereunder must be met in each Plan Year.
The Committee may elect, in accordance with applicable Treasury regulations, to
treat Before-Tax Contributions to the Plan as Employer Matching Contributions
for purposes of meeting this requirement.
III.7 Return of Contributions. Anything to the contrary herein
notwithstanding, the Employer's contributions to the Plan are contingent upon
the deductibility of such contributions under section 404 of the Code. To the
extent that a deduction for contributions is disallowed, such contributions
shall, upon the written demand of the Employer, be returned to the Employer by
the Trustee within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto. Moreover, if Employer
contributions are made under a mistake of fact, such contributions shall, upon
the written demand of the Employer, be returned to the Employer by the Trustee
within one year after the payment thereof, reduced by any net losses of the
Trust Fund attributable thereto but not increased by any net earnings of the
Trust Fund attributable thereto.
III.8 Disposition of Excess Deferrals and Excess Contributions.
(a) Anything to the contrary herein notwithstanding, any Before-Tax
Contributions to the Plan for a calendar year on behalf of a Member in excess of
the limitations set forth in Section 3.1(d) and any "excess deferrals" from
other plans allocated to the Plan by such Member no later than March 1 of the
next following calendar year within the meaning of, and pursuant to the
provisions of, section 402(g)(2) of the Code, shall be distributed to such
Member not later than April 15 of the next following calendar year.
(b) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Before-Tax Contributions made by the Employer on behalf
of Highly Compensated Employees exceeds the maximum amount of Before-Tax
Contributions permitted on behalf of such Highly Compensated Employees pursuant
to Section 3.1(e) (determined by reducing Before-Tax
III-3
Contributions on behalf of Highly Compensated Employees in order of the highest
dollar amounts contributed on behalf of such Highly Compensated Employees in
accordance with section 401(k)(8)(C) of the Code and the Treasury regulations
thereunder), such excess shall be distributed to the Highly Compensated
Employees on whose behalf such excess was contributed before the end of the next
following Plan Year.
(c) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Employer Matching Contributions allocated to the
Accounts of Highly Compensated Employees exceeds the maximum amount of such
Employer Matching Contributions permitted on behalf of such Highly Compensated
Employees pursuant to Section 3.6 (determined by reducing Employer Matching
Contributions made on behalf of Highly Compensated Employees in order of the
highest dollar amounts contributed on behalf of such Highly Compensated
Employees in accordance with section 401(m)(6)(C) of the Code and Treasury
regulations thereunder), such excess shall be distributed to the Highly
Compensated Employees on whose behalf such excess contributions were made (or,
if such excess contributions are forfeitable, they shall be forfeited) before
the end of the next following Plan Year.
(d) In coordinating the disposition of excess deferrals and excess
contributions pursuant to this Section, such excess deferrals and excess
contributions shall be disposed of in the following order:
(1) First, Before-Tax Contributions that constitute excess
deferrals described in Paragraph (a) above that are not considered in
determining the amount of Employer Matching Contributions pursuant to
Section 3.2 shall be distributed;
(2) Next, excess Before-Tax Contributions that constitute excess
deferrals described in Paragraph (a) above that are considered in
determining the amount of Employer Matching Contributions pursuant to
Section 3.2 shall be distributed, and the Employer Matching Contributions
with respect to such Before-Tax Contributions shall be forfeited;
(3) Next, excess Before-Tax Contributions described in Paragraph
(b) above that are not considered in determining the amount of Employer
Matching Contributions pursuant to Section 3.3 shall be distributed;
(4) Next, excess Before-Tax Contributions described in Paragraph
(b) above that are considered in determining the amount of Employer
Matching Contributions pursuant to Section 3.3 shall be distributed, and
the Employer Matching Contributions with respect to such Before-Tax
Contributions shall be forfeited; and
(5) Finally, excess Employer Matching Contributions described in
Paragraph (c) above shall be distributed (or, if forfeitable, forfeited).
(e) Any distribution or forfeiture of excess deferrals or excess
contributions pursuant to the provisions of this Section shall be adjusted for
income or loss allocated thereto in the manner determined by the Committee in
accordance with any method permissible under applicable
III-4
Treasury regulations. Any forfeiture pursuant to the provisions of this Section
shall be considered to have occurred on the date which is 22 months after the
end of the Plan Year.
III.9 Rollover Contributions.
(a) Qualified Rollover Contributions may be made to the Plan by any
Eligible Employee of amounts received by such Eligible Employee from an
individual retirement account or annuity or from an employees' trust described
in section 401(a) of the Code, which is exempt from tax under section 501(a) of
the Code, but only if any such Rollover Contribution is made pursuant to and in
accordance with applicable provisions of the Code and Treasury regulations
promulgated thereunder. A Rollover Contribution of amounts that are "eligible
rollover distributions" within the meaning of section 402(f)(2)(A) of the Code
may be made to the Plan irrespective of whether such eligible rollover
distribution was paid to the Eligible Employee or paid to the Plan as a "direct"
Rollover Contribution. A direct Rollover Contribution to the Plan may be
effectuated only by wire transfer directed to the Trustee or by issuance of a
check made payable to the Trustee, which is negotiable only by the Trustee and
which identifies the Eligible Employee for whose benefit the Rollover
Contribution is being made. Any Eligible Employee desiring to effect a Rollover
Contribution to the Plan must execute and file with the Committee the form
prescribed by the Committee for such purpose. The Committee may require as a
condition to accepting any Rollover Contribution that such Eligible Employee
furnish any evidence that the Committee in its discretion deems satisfactory to
establish that the proposed Rollover Contribution is in fact eligible for
rollover to the Plan and is made pursuant to and in accordance with applicable
provisions of the Code and Treasury regulations. All Rollover Contributions to
the Plan must be made in cash. A Rollover Contribution shall be credited to the
Rollover Contribution Account of the Eligible Employee for whose benefit such
Rollover Contribution is being made as of the last day of the month in which
such Rollover Contribution is made.
(b) An Eligible Employee who has made a Rollover Contribution in accordance
with this Section, but who has not otherwise become a Member of the Plan in
accordance with Section 2.2, shall become a Member coincident with such Rollover
Contribution; provided, however, that such Member shall not have a right to
defer Compensation or have Employer Contributions made on his behalf until he
has otherwise satisfied the requirements imposed by Section 2.2.
III-5
IV.
Allocations and Limitations
IV.1 Suspended Amounts. All contributions, forfeitures, and the net income
(or net loss) of the Trust Fund shall be held in suspense until allocated to the
Accounts of the Members as provided herein.
IV.2 Allocation of Contributions.
(a) Before-Tax Contributions made by the Employer on a Member's
behalf for each month pursuant to Section 3.1 shall be allocated to such
Member's Before-Tax Account.
(b) The Employer Matching Contributions for each calendar month
pursuant to Section 3.2 shall be allocated to the Employer Contribution Accounts
of the Members for whom such contributions were made.
(c) The Employer Profit Sharing Contribution made pursuant to Section
3.3 for a Plan Year shall be allocated to the Employer Contribution Accounts of
the Single Plan Members for whom such contributions were made.
(d) The Employer Discretionary Contribution, if any, made pursuant to
Section 3.4 for a Plan Year shall be allocated to the Employer Contribution
Accounts of the Single Plan Members who received Compensation for such Plan
Year. The allocation to each such eligible Single Plan Member's Employer
Contribution Account shall be that portion of such Employer Discretionary
Contribution which is in the same proportion that such Single Plan Member's
Compensation for such Plan Year bears to the total of all such Single Plan
Member's Compensation for such Plan Year.
(e) The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.5 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.1(e) shall be allocated to the Before-Tax Accounts of Members who (1)
received an allocation of Before-Tax Contributions for such Plan Year and (2)
were not Highly Compensated Employees for such Plan Year (each such Member
individually referred to as an "Eligible Member" for purposes of this
Paragraph). Such allocation shall be made, first, to the Before-Tax Account of
the Eligible Member who received the least amount of Compensation for such Plan
Year until the limitation set forth in Section 4.5 has been reached as to such
Eligible Member, then to the Before-Tax Account of the Eligible Member who
received the next smallest amount of Compensation for such Plan Year until the
limitation set forth in Section 4.5 has been reached as to such Eligible Member,
and continuing in such manner until the Employer Safe Harbor Contribution for
such Plan Year has been completely allocated or the limitation set forth in
Section 4.5 has been reached as to all Eligible Members. Any remaining Employer
Safe Harbor Contribution for such Plan Year shall be allocated among the Before-
Tax Accounts of all Members who were Eligible Employees during such Plan Year,
with the allocation to each such Member's Before-Tax Account being the portion
of such remaining Employer Safe
IV-1
Harbor Contribution which is in the same proportion that such Member's
Compensation for such Plan Year bears to the total of all such Members'
Compensation for such Plan Year.
(f) The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.5 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.6 shall be allocated to the Employer Contribution Accounts of Members
who (1) received an allocation of Employer Matching Contributions for such Plan
Year and (2) were not Highly Compensated Employees for such Plan Year (each such
Member individually referred to as an "Eligible Member" for purposes of this
Paragraph). Such allocation shall be made, first, to the Employer Contribution
Account of the Eligible Member who received the least amount of Compensation for
such Plan Year until the limitation set forth in Section 4.5 has been reached as
to such Eligible Member, then to the Employer Contribution Account of the
Eligible Member who received the next smallest amount of Compensation for such
Plan Year until the limitation set forth in Section 4.5 has been reached as to
such Eligible Member, and continuing in such manner until the Employer Safe
Harbor Contribution for such Plan Year has been completely allocated or the
limitation set forth in Section 4.5 has been reached as to all Eligible Members.
Any remaining Employer Safe Harbor Contribution for such Plan Year shall be
allocated among the Employer Contribution Accounts of all Members who were
Eligible Employees during such Plan Year, with the allocation to each such
Member's Employer Contribution Account being the portion of such remaining
Employer Safe Harbor Contribution which is in the same proportion that such
Member's Compensation for such Plan Year bears to the total of all such Members'
Compensation for such Plan Year.
(g) If an Employer Safe Harbor Contribution is made in order to
satisfy the restrictions set forth in both Section 3.1(e) and Section 3.6 for
the same Plan Year, the Employer Safe Harbor Contribution made in order to
satisfy the restrictions set forth in Section 3.1(e) shall be allocated pursuant
to Paragraph (e) above prior to allocating the Employer Safe Harbor Contribution
made in order to satisfy the restrictions set forth in Section 3.6. In
determining the application of the limitations set forth in Section 4.5 to the
allocations of Employer Safe Harbor Contributions, all Annual Additions (as such
term is defined in Section 4.5) to a Member's Accounts other than Employer Safe
Harbor Contributions shall be considered allocated prior to Employer Safe Harbor
Contributions.
(h) All contributions to the Plan shall be considered allocated to
Members' Accounts no later than the last day of the Plan Year for which they
were made, as determined pursuant to Article III, except that, for purposes of
Section 4.4, contributions shall be considered allocated to Members' Accounts
when received by the Trustee
IV.3 Application of Forfeitures. Any amounts that are forfeited under any
provision hereof during a Plan Year shall be applied to reduce Employer Matching
Contributions next coming due. Prior to such application, forfeited amounts
shall continue to be invested in the same Investment Fund(s) in which they were
invested immediately prior to their forfeiture.
IV.4 Valuation of Accounts. All amounts contributed to the Trust Fund
shall be invested at the time of their receipt by the Trustee, and the balance
of each Account shall reflect the result of
IV-2
daily pricing of the assets in which such Account is invested from the time of
receipt by the Trustee until the time of distribution.
IV.5 Limitations and Corrections.
(a) For purposes of this Section, the following terms and phrases
shall have these respective meanings:
(1) "Annual Additions" of a Member for any Limitation Year shall
mean the total of (A) the Employer Contributions, Before-Tax Contributions, and
forfeitures, if any, allocated to such Member's Accounts for such year, (B)
Member's contributions, if any, (excluding any Rollover Contributions) for such
year, and (C) amounts referred to in sections 415(l)(1) and 419A(d)(2) of the
Code.
(2) "Limitation Year" shall mean the Plan Year.
(3) "Maximum Annual Additions" of a Member for any Limitation
Year shall mean the lesser of (A) $30,000 (or, if greater, one-fourth of
the defined benefit dollar limitation in effect under section 415(b)(1)(A)
of the Code for such Limitation Year) or (B) 25% of such Member's 415
Compensation, within the meaning of section 415(c)(3) of the Code and
applicable Treasury regulations thereunder, during such year except that
the limitation in this Clause (B) shall not apply to any contribution for
medical benefits (within the meaning of section 419A(f)(2) of the Code)
after separation from service with the Employer or a Controlled Entity
which is otherwise treated as an Annual Addition or to any amount otherwise
treated as an Annual Addition under section 415(l)(1) of the Code.
(4) "415 Compensation" shall mean the total of all amounts paid
by the Employer to or for the benefit of a Member, for services rendered or
labor performed for the Employer while a Member, which are required to be
reported on the Member's federal income tax withholding statement or
statements (Form W-2 or its subsequent equivalent), limited to $150,000 for
any Plan Year with such limitation to be:
(A) adjusted automatically to reflect any amendments to
section 401(a)(17) of the Code and any cost-of-living increases
authorized by section 401(a)(17) of the Code; and
(B) prorated for a Plan Year of less than twelve months and
to the extent otherwise required by applicable law.
(b) Contrary Plan provisions notwithstanding, in no event shall the
Annual Additions credited to a Member's Accounts for any Limitation Year exceed
the Maximum Annual Additions for such Member for such year. If as a result of a
reasonable error in estimating a Member's compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of section
402(g)(3) of the Code) that may be made with respect to any individual under the
limits of section 415 of the Code, or because of other limited facts and
circumstances, the Annual
IV-3
Additions that would be credited to a Member's Accounts for a Limitation Year
would nonetheless exceed the Maximum Annual Additions for such Member for such
year, the excess Annual Additions which, but for this Section, would have been
allocated to such Member's Accounts shall be disposed of as follows:
(1) First, any such excess Annual Additions in the form of
Before-Tax Contributions on behalf of such Member that would not have been
considered in determining the amount of Employer Matching Contributions
allocated to such Member's Accounts pursuant to Section 4.2 shall be
distributed to such Member, adjusted for income or loss allocated thereto;
(2) Next, any such excess Annual Additions in the form of Before-
Tax Contributions on behalf of such Member that would have been considered
in determining the amount of Employer Matching Contributions allocated to
such Member's Accounts pursuant to Section 4.2 shall be distributed to such
Member, adjusted for income or loss allocated thereto, and the Employer
Matching Contributions that would have been allocated to such Member's
Accounts based upon such distributed Before-Tax Contributions shall, to the
extent such amounts would have otherwise been allocated to such Member's
Accounts, be treated as a forfeiture;
(3) Next, any such excess Annual Additions in the form of
Employer Profit Sharing Contributions shall, to the extent such amounts
would otherwise have been allocated to such Member's Accounts, be treated
as a forfeiture; and
(4) Finally, any such excess Annual Additions in the form of
Employer Discretionary Contributions shall, to the extent such amounts
would otherwise have been allocated to such Member's Accounts, be treated
as a forfeiture.
(c) For purposes of determining whether the Annual Additions under
this Plan exceed the limitations herein provided, all defined contribution plans
of the Employer are to be treated as one defined contribution plan. In addition,
all defined contribution plans of Controlled Entities shall be aggregated for
this purpose. For purposes of this Section only, a "Controlled Entity" (other
than an affiliated service group member within the meaning of section 414(m) of
the Code) shall be determined by application of a more than 50% control standard
in lieu of an 80% control standard. If the Annual Additions credited to a
Member's Accounts for any Limitation Year under this Plan plus the additions
credited on his behalf under other defined contribution plans required to be
aggregated pursuant to this Paragraph would exceed the Maximum Annual Additions
for such Member for such Limitation Year, the Annual Additions under this Plan
and the additions under such other plans shall be reduced on a pro rata basis
and allocated, reallocated, or returned in accordance with applicable plan
provisions regarding Annual Additions in excess of Maximum Annual Additions.
(d) In the case of a Member who also participated in a defined
benefit plan of the Employer or a Controlled Entity (as defined in Paragraph (d)
above), the Employer shall reduce the Annual Additions credited to the Accounts
of such Member under this Plan pursuant to
IV-4
the provisions of Paragraph (b) to the extent necessary to prevent the
limitation set forth in section 415(e) of the Code from being exceeded.
Notwithstanding the foregoing, the provisions of this Paragraph shall apply only
if such defined benefit plan does not provide for a reduction of benefits
thereunder to ensure that the limitation set forth in section 415(e) of the Code
is not exceeded. Further, this Paragraph shall not apply for Limitation Years
beginning after December 31, 1999.
(e) If the limitations set forth in this Section would not otherwise
be met for any Limitation Year, the Compensation deferral elections pursuant to
Section 3.1 of affected Members may be reduced by the Committee on a temporary
and prospective basis in such manner as the Committee shall determine.
IV-5
V.
Investment Funds
V.1 Investment of Certain Employer Contributions and Accounts.
Notwithstanding any provision of Section 5.2 to the contrary, (a) Employer
Matching Contributions made to the Plan after April 1, 1995, (b) Employer
Discretionary Contributions made to the Plan after April 1, 1995, (c) the
balance, if any of a Member's Trident Profit Sharing Stock Account, and (d) the
balance, if any, of a Member's Trident Matching Stock Account, and any earnings
thereon, shall be invested in the Company Stock Fund. Notwithstanding any
provision of Section 5.2 to the contrary, a Member's Dow ESOP Account shall be
invested in accordance with Appendix C. All Employer Contributions that were
made to the Plan on or before April 1, 1995, and all Employer Profit Sharing
Contributions made to the Plan after April 1, 1995, and any earnings thereon,
shall be invested pursuant to Section 5.2 of the Plan.
V.2 Investment of Accounts.
(a) Except as provided in Section 5.1, each Member shall designate, in
accordance with the procedures established from time to time by the Committee,
the manner in which the amounts allocated to each of his Accounts shall be
invested from among the Investment Funds made available from time to time by the
Committee. With respect to each portion of a Member's Account that is subject to
investment discretion, such Member may designate one of such Investment Funds
for all the amounts allocated to such portion of such Account or he may split
the investment of the amounts allocated to such portion of such Account between
such Investment Funds in such increments as the Committee may prescribe. If a
Member fails to make a designation, then such portions of his Accounts shall be
invested in the Investment Fund or Funds designated by the Committee from time
to time in a uniform and nondiscriminatory manner.
(b) Except as provided in Section 5.1, a Member may change his
investment designation for future contributions to be allocated to any one or
all of his Accounts. Any such change shall be made in accordance with the
procedures established by the Committee, and the frequency of such changes may
be limited by the Committee.
(c) A Member may elect to convert his investment designation with
respect to the amounts already allocated to one or more of his Accounts;
provided however, that a Member may not covert the investment designation of any
amounts allocated to the Company Stock Fund pursuant to Section 5.1. Any such
conversion shall be made in accordance with the procedures established by the
Committee, and the frequency of such conversions may be limited by the
Committee.
(d) Paragraphs (a), (b), and (c) above notwithstanding, in no event
may a Member direct that any portion of his Accounts which are subject to
investment discretion, be invested in the Company Stock Fund.
V-1
V.3 Restriction of Acquisition of Company Stock. Notwithstanding any other
provision hereof, it is specifically provided that the Trustee shall not
purchase Company Stock or other Company securities during any period in which
such purchase is, in the opinion of counsel for the Company or the Committee,
restricted by any law or regulation applicable thereto. During such period,
amounts that would otherwise be invested in Company Stock or other Company
securities pursuant to Section 5.1 or an investment designation shall be
invested in such other assets as the Trustee may in its discretion determine, or
the Trustee may hold such amounts uninvested for a reasonable period pending the
purchase of such stock or securities.
V.4 Voting of Company Stock. No Member or beneficiary shall have any right
to request, direct, or demand that the Committee or the Trustee exercise on his
behalf the voting of Company Stock. At each annual meeting and special meeting
of the shareholders of the Company, the Committee may, in its sole discretion,
direct the Trustee as to the manner in which such shares of Company Stock held
by the Plan are to be voted.
V.5 Stock Rights, Stock Splits, and Stock Dividends. No Member or
beneficiary shall have any right to request, direct, or demand that the
Committee or the Trustee exercise in his behalf rights or privileges to acquire,
convert, or exchange Company Stock or other securities. The Trustee, in its
discretion, may exercise or sell any such rights or privileges. Company Stock
received by the Trustee by reason of a stock split, stock dividend, or
recapitalization shall be appropriately allocated to the Accounts of each
affected Member or beneficiary.
V-2
VI.
Retirement Benefits
A Member who terminates his employment on or after his Normal Retirement
Date shall be entitled to a retirement benefit, payable at the time and in the
form provided in Article X, equal in value to the aggregate amount in his
Accounts on his Annuity Starting Date. Any contribution allocable to a Member's
Accounts after his Annuity Starting Date shall be distributed, if his benefit
was paid in a lump sum, or used to increase his payments, if his benefit is
being paid on a periodic basis, as soon as administratively feasible after the
date that such contribution is paid to the Trust Fund.
VI-1
VII.
Disability Benefits
VII.1 Disability Benefits. In the event a Member's employment is
terminated, and such Member is totally and permanently disabled, as determined
pursuant to Section 7.2, such Member shall be entitled to a disability benefit,
payable at the time and in the form provided in Article X, equal in value to the
aggregate amount in his Accounts on his Annuity Starting Date. Any contribution
allocable to a Member's Accounts after his Annuity Starting Date shall be
distributed, if his benefit was paid in a lump sum, or used to increase his
payments, if his benefit is being paid on a periodic basis, as soon as
administratively feasible after the date that such contribution is paid to the
Trust Fund.
VII.2 Total and Permanent Disability Determined. A Member shall be
considered totally and permanently disabled if the Committee determines, based
on a written medical opinion (unless waived by the Committee as unnecessary),
that such Member is permanently incapable of performing his job for physical or
mental reasons.
VII-1
VIII.
Severance Benefits and Determination of Vested Interest
VIII.1 No Benefits Unless Herein Set Forth. Except as set forth in this
Article, upon termination of employment of a Member prior to his Normal
Retirement Date for any reason other than total and permanent disability (as
defined in Section 7.2) or death, such Member shall acquire no right to any
benefit from the Plan or the Trust Fund.
VIII.2 Severance Benefit. Each Member whose employment is terminated prior
to his Normal Retirement Date for any reason other than total and permanent
disability (as defined in Section 7.2) or death shall be entitled to a severance
benefit, payable at the time and in the form provided in Article X, equal in
value to his Vested Interest in the aggregate amount in his Accounts on his
Annuity Starting Date. A Member's Vested Interest in any contribution allocable
to such Member's Accounts after his Annuity Starting Date shall be distributed,
if his benefit was paid in a lump sum, or used to increase his payments, if his
benefit is being paid on a periodic basis, as soon as administratively feasible
after the date that such contribution is paid to the Trust Fund.
VIII.3 Determination of Vested Interest.
(a) A Member shall have a 100% Vested Interest in his Before-Tax
Account, Dow ESOP Account, Dow Transfer Account, After-Tax Account, and Rollover
Contribution Account at all times.
(b) A Member's Vested Interest in his Destec Employer Contribution
Account, Trident Matching Account, and Trident Profit Sharing Stock Account
shall be determined in accordance with the vesting schedule set forth in
paragraph (e) below; provided, however, each Member who, from June 27, 1997, to
December 31, 1997, dates inclusive, was involuntarily terminated from employment
with Destec Energy, Inc. in connection with the acquisition of Destec Energy,
Inc. by the Company and who did not accept employment with the Company or a
Controlled Entity on or before December 31, 1997, shall have a 100% Vested
Interest in his Destec Employer Contribution Account.
(c) A Member shall have a 100% Vested Interest in all Employer
Contributions allocated to his Employer Contribution Account (other than
contributions allocated to a Member's Destec Employer Contribution Account,
Trident Matching Account, or Trident Profit Sharing Stock Account, which shall
vest in accordance with paragraph (b) above) under the Plan on or before April
1, 1995, and all earnings thereon.
(d) A Member's Vested Interest in Employer Contributions allocated
to his Employer Contribution Account (other than contributions allocated to a
Member's Destec Employer Contribution Account, Trident Matching Account, or
Trident Profit Sharing Stock Account, which shall vest in accordance with
paragraph (b) above) under the Plan after April 1, 1995, and the earnings
thereon, shall be determined as follows:
VIII-1
(1) The Vested Interest in such contributions and earnings of
any Member with three or more years of Vesting Service under the Plan as of
April 1, 1995, shall be 100%.
(2) The Vested Interest in such contributions and earnings of
any Member with less than three years of Vesting Service as of April 1, 1995,
shall be determined by such Member's years of Vesting Service in accordance with
the vesting schedule set forth in paragraph (e) below.
(e) Except as provided in paragraphs (b), (c), and (d) above, a
Member's Vested Interest in his Employer Contribution Account shall be
determined in accordance with the following schedule:
Years of Vesting Service Vested Interest
------------------------ ---------------
Less than 1 year 0%
1 year 25%
2 years 50%
3 years 75%
4 years or more 100%
(f) Paragraphs (b), (d), and (e) above notwithstanding, a Member
shall have a 100% Vested Interest in his Employer Contribution Account upon (1)
the attainment of his Normal Retirement Date while employed by the Employer or a
Controlled Entity, (2) the termination of his employment with the Employer at a
time when he is totally and permanently disabled (as defined in Section 7.2),
(3) the death of such Member while an Employee, or (4) if such Member is an
affected Member, the occurrence of an event described in, under the conditions
set forth in, Section 17.2.
VIII.4 Crediting of Vesting Service.
(a) For the period preceding the Effective Date, subject to the
provisions of Paragraphs (e) and (f) below, an individual shall be credited with
Vesting Service in an amount equal to all service credited to him for vesting
purposes under the Plan as it existed on the day prior to the Effective Date.
(b) On or after the Effective Date, subject to the remaining
Paragraphs of this Section, an individual shall be credited with Vesting Service
in an amount equal to his aggregate Periods of Service whether or not such
Periods of Service are completed consecutively.
(c) Paragraph (b) above notwithstanding, if an individual terminates
his Service (at a time other than during a leave of absence) and subsequently
resumes his Service, if his Reemployment Commencement Date is within twelve
months of his Severance from Service Date, such Period of Severance shall be
treated as a Period of Service for purposes of Paragraph (b) above.
VIII-2
(d) Paragraph (b) above notwithstanding, if an individual terminates
his Service during a leave of absence and subsequently resumes his Service, if
his Reemployment Commencement Date is within twelve months of the beginning of
such leave of absence, such Period of Severance shall be treated as a Period of
Service for purposes of Paragraph (b) above.
VIII.5 Forfeitures of Vesting Service.
(a) In the case of an individual who terminates employment at a time
when he has a 0% Vested Interest in his Employer Contribution Account and who
then incurs a Period of Severance that equals or exceeds the greater of five
years or his aggregate Period of Service completed before such Period of
Severance, such individual's Period of Service completed before such Period of
Severance shall be forfeited and completely disregarded in determining his years
of Vesting Service.
(b) In the case of a Member who terminates employment with
the Employer at a time when he has a Vested Interest in his Employer
Contribution Account of more than 0% but less than 100% and then incurs a
Period of Severance of five consecutive years, such Member's years of Vesting
Service completed after such Period of Severance shall be disregarded for
purposes of determining such Member's Vested Interest in any Plan benefits
derived from Employer Contributions on his behalf before such Period of
Severance, but his years of Vesting Service completed before such Period of
Severance shall not be disregarded in determining any Plan benefits derived
from Employer Contributions on his behalf after such Period of Severance.
(c) A Member who terminates employment with the Employer at a time
when he has a 100% Vested Interest shall not forfeit any of his Vesting Service
for purposes of determining any Plan benefits.
VIII.6 Forfeitures of Nonvested Account Balance.
(a) With respect to a Member who terminates employment with the
Employer with a Vested Interest in his Employer Contribution Account that is
less than 100% and either is not entitled to a distribution from the Plan or
receives a distribution from the Plan of the balance of his Vested Interest in
his Accounts in the form of a lump sum distribution by the close of the second
Plan Year following the Plan Year in which his employment is terminated, the
nonvested portion of such terminated Member's Employer Contribution Account as
of his Annuity Starting Date shall become a forfeiture as of his Annuity
Starting Date (or as of his date of termination of employment if no amount is
payable from the Trust Fund on behalf of such Member with such Member being
considered to have received a distribution of zero dollars on his date of
termination of employment).
(b) With respect to a Member who terminates employment with the
Employer with a Vested Interest in his Employer Contribution Account greater
than 0% but less than 100% and who is not otherwise subject to the forfeiture
provisions of Paragraph (a) above (or Section 8.8 below), the nonvested portion
of his Employer Contribution Account shall be forfeited
VIII-3
as of the earlier of (1) the date the Member completes a Period of Severance of
five consecutive years or (2) the date of the terminated Member's death.
VIII.7 Restoration of Forfeited Account Balance. In the event that the
nonvested portion of a terminated Member's Employer Contribution Account becomes
a forfeiture pursuant to Section 8.6, the terminated Member shall, upon
subsequent reemployment with the Employer prior to incurring a Period of
Severance of five consecutive years, have the forfeited amount restored to such
Member's Employer Contribution Account, unadjusted by any subsequent gains or
losses of the Trust Fund; provided, however, that such restoration shall be made
only if such Member repays in cash an amount equal to the amount so distributed
to him pursuant to Section 8.6 within five years from the date the Member is
reemployed. A reemployed Member who was not entitled to a distribution from the
Plan on his date of termination of employment shall be considered to have repaid
a distribution of zero dollars on the date of his reemployment. Any such
restoration shall be made as soon as administratively feasible following the
date of repayment. Notwithstanding anything to the contrary in the Plan,
forfeited amounts to be restored by the Employer pursuant to this Section shall
be charged against and deducted from forfeitures for the Plan Year in which such
amounts are restored that would otherwise be available to reduce Employer
Matching Contributions. If such forfeitures otherwise available are not
sufficient to provide such restoration, the portion of such restoration not
provided by forfeitures shall be charged against and deducted from Employer
Discretionary Contributions otherwise available for allocation to other Members
in accordance with Section 4.2(d), and any additional amount needed to restore
such forfeited amounts shall be a minimum required Employer Discretionary
Contribution.
VIII.8 Special Formula for Determining Vested Interest for Partial
Accounts. With respect to a Member whose Vested Interest in his Employer
Contribution Account Subject to Vesting is less than 100% and who receives a
termination distribution from his Employer Contribution Account Subject to
Vesting other than a lump sum distribution by the close of the second Plan Year
following the Plan Year in which his employment is terminated, any amount
remaining in his Employer Contribution Account Subject to Vesting shall continue
to be maintained as a separate account. At any relevant time, such Member's
nonforfeitable portion of his separate account shall be determined in accordance
with the following formula:
X=P(AB + (R x D)) - (R x D)
For purposes of applying the formula: X is the nonforfeitable portion of such
separate account at the relevant time; P is the Member's Vested Interest in his
Employer Contribution Account Subject to Vesting at the relevant time; AB is the
balance of such separate account at the relevant time; R is the ratio of the
balance of such separate account at the relevant time to the balance of such
separate account after the distribution; and D is the amount of the
distribution. For all other purposes of the Plan, a Member's separate account
shall be treated as an Employer Contribution Account. Upon his incurring a
Period of Severance of five consecutive years, the forfeitable portion of a
terminated Member's separate account and Employer Contribution Account Subject
to Vesting shall be forfeited as of the end of the Plan Year during which the
terminated Member completes such Period of Severance.
VIII-4
IX.
Death Benefits
Upon the death of a Member while an Employee, the Member's Eligible
Surviving Spouse or designated beneficiary shall be entitled to a death benefit,
payable at the time and in the form provided in Article X, equal in value to the
aggregate amount in his Accounts on his Annuity Starting Date. Any contribution
allocable to a Member's Accounts after his Annuity Starting Date shall be
distributed, if his benefit was paid in a lump sum, or used to increase
payments, if his benefit is being paid on a periodic basis, as soon as
administratively feasible after the date that such contribution is paid to the
Trust Fund.
IX-1
X.
Time and Form of Payment of Benefits
X.1 Time of Payment.
(a) Subject to the provisions of the remaining Paragraphs of this
Section, a Member's Annuity Starting Date shall be the date that is as soon as
administratively feasible after the date the Member or his beneficiary becomes
entitled to a benefit pursuant to Article VI, VII, VIII, or IX but no earlier
than the expiration of the seven-day period that begins the day after the
information required to be furnished pursuant to Section 10.2(c) has been
furnished to the Member.
(b) Unless a Member (1) has attained age sixty-five, (2) has died (A)
without leaving an Eligible Surviving Spouse or (B) with an election in effect,
pursuant to Section 10.3(b), not to receive the standard death benefit set forth
in Section 10.3(a), or (3) consents to a distribution pursuant to Paragraph (a)
(and, if such Member has an Eligible Surviving Spouse, unless such Eligible
Surviving Spouse consents (with such consent being irrevocable) in accordance
with the requirements of section 417 of the Code and applicable Treasury
regulations thereunder) within the ninety-day period ending on the date payment
of his benefit hereunder is to commence pursuant to Paragraph (a), his Annuity
Starting Date shall be deferred to the date which is as soon as administratively
feasible after the date the Member attains (or would have attained) age sixty-
five, or such earlier date as the Member (with the consent of his Eligible
Surviving Spouse, if applicable) may elect by written notice to the Committee
prior to such date. Consent of the Member's Eligible Surviving Spouse under this
Paragraph shall not be required if the Member's benefit is to be paid in the
form of the standard benefit described in Section 10.2(a). The Committee shall
furnish information pertinent to his consent to each Member no less than thirty
days (unless such thirty-day period is waived by an affirmative election in
accordance with applicable Treasury regulations) and no more than ninety days
before his Annuity Starting Date, and the furnished information shall include a
general description of the material features of, and an explanation of the
relative values of, the alternative forms of benefit available under the Plan
and must inform the Member of his right to defer his Annuity Starting Date and
of his Direct Rollover right pursuant to Section 10.5 below, if applicable. In
the case of a married Member who dies before his Annuity Starting Date without
electing not to receive the standard death benefit set forth in Section 10.3(a),
the consent and election set forth in this Paragraph may be made by his Eligible
Surviving Spouse.
(c) A Member's Annuity Starting Date shall in no event be later than
the sixtieth day following the close of the Plan Year during which such Member
attains, or would have attained, his Normal Retirement Date or, if later,
terminates his employment with the Employer or a Controlled Entity.
(d) A Member's Annuity Starting Date shall be in compliance with the
provisions of section 401(a)(9) of the Code and applicable Treasury regulations
and shall in no event be later than:
X-1
(1) For Members attaining age seventy and one-half before January
1, 1999, April 1 of the calendar year following the calendar year in which
such Member attains the age of seventy and one-half;
(2) For Members attaining age seventy and one-half after December
31, 1998, April 1 of the calendar year following the later of (A) the
calendar year in which such Member attains the age of seventy and one-half
or (B) the calendar year in which such Member terminates his employment
with the Employer (provided, however, that clause (B) of this sentence
shall not apply in the case of a Member who is a "five-percent owner" (as
defined in section 416 of the Code) with respect to the Plan Year ending in
the calendar year in which such Member attains the age of seventy and one-
half); and
(3) In the case of a benefit payable pursuant to Article IX, (A)
if payable to other than the Member's spouse, the last day of the one-year
period following the death of such Member or (B) if payable to the Member's
spouse, after the date upon which such Member would have attained the age
of seventy and one-half, unless such surviving spouse dies before payments
commence, in which case the Annuity Starting Date may not be deferred
beyond the last day of the one-year period following the death of such
surviving spouse.
The preceding provisions of this Section notwithstanding, a Member may not elect
to defer the receipt of his benefit hereunder to the extent that such deferral
creates a death benefit that is more than incidental within the meaning of
section 401(a)(9)(G) of the Code and applicable Treasury regulations thereunder.
Further, in determining compliance with the provisions of section 401(a)(9) of
the Code, the life expectancies of a Member and the Member's spouse shall not be
recalculated after the Annuity Starting Date. Finally, a Member (other than a
Member who is a "five-percent owner" (as defined in section 416 of the Code)
with respect to the Plan Year ending in the calendar year in which such Member
attains the age of seventy and one-half) who attains age seventy and one-half in
calendar year 1996, 1997, or 1998 may elect to defer his Annuity Starting Date
until no later than April 1 of the calendar year following the later of (A) the
calendar year in which such Member attains the age of seventy and one-half or
(B) the calendar year in which such Member terminates his employment with the
Employer, provided, that such election is made by the later of the end of the
calendar year in which such Member attains age seventy and one-half or December
31, 1997.
(e) Subject to the provisions of Paragraph (d), a Member's Annuity
Starting Date shall not occur unless the Article VI, VII, VIII, or IX event
entitling the Member (or his beneficiary) to a benefit constitutes a
distributable event described in section 401(k)(2)(B) of the Code and shall not
occur while the Member is employed by the Employer or any Controlled Entity
(irrespective of whether the Member has become entitled to a distribution of his
benefit pursuant to Article VI, VII, VIII, or IX).
(f) Paragraphs (a), (b) and (c) notwithstanding, a Member whose Vested
Interest in his Accounts is $5,000 or more may elect to defer his Annuity
Starting Date beyond the date specified in such Paragraphs, subject to the
provisions of Paragraph (d), by submitting to the
X-2
Committee a written statement, signed by the Member, which describes the benefit
and designates the date on which the payment of such benefit shall commence.
X.2 Standard and Alternative Forms of Benefit for Members.
(a) For purposes of Article VI, VII, or VIII, the standard benefit for
any Member who is married on his Annuity Starting Date shall be a joint and
survivor annuity. Such joint and survivor annuity shall be a commercial annuity
which is payable for the life of the Member with a survivor annuity for the life
of the Member's Eligible Surviving Spouse which shall be one-half of the amount
of the annuity payable during the joint lives of the Member and the Member's
Eligible Surviving Spouse. The standard benefit for any Member who is not
married on his Annuity Starting Date shall be a commercial annuity which is
payable for the life of the Member.
(b) Any Member who would otherwise receive the standard benefit may
elect not to take his benefit in such form by executing the form prescribed by
the Committee for such election during the election period described in
Paragraph (c) below. Any election may be revoked and subsequent elections may be
made or revoked at any time during such election period. Notwithstanding the
foregoing, an election by a married Member not to receive the standard benefit
as provided in Paragraph (a) above shall not be effective unless (1) the
Eligible Surviving Spouse has consented thereto in writing (including consent to
the specific designated beneficiary to receive payments following the Member's
death or to the specific benefit form elected, which designation or election may
not subsequently be changed by the Member without spousal consent) and such
consent acknowledges the effect of such election and is witnessed by a Plan
representative (other than the Member) or a notary public or (2) the consent of
such spouse cannot be obtained because the Eligible Surviving Spouse cannot be
located or because of other circumstances described by applicable Treasury
regulations. Any such consent by such Eligible Surviving Spouse shall be
irrevocable.
(c) The Committee shall furnish certain information, pertinent to the
Paragraph (b) election, to each Member no less than thirty days (unless such
thirty-day period is waived by an affirmative election in accordance with
applicable Treasury regulations) and no more than ninety days before his Annuity
Starting Date. The furnished information shall include an explanation of (1) the
terms and conditions of the standard benefit, (2) the Member's right to elect to
waive the standard benefit and the effect of such election, (3) the rights of
the Member's Eligible Surviving Spouse, if any, (4) the right to revoke such
election and the effect of such revocation, (5) a general description of the
eligibility conditions and other material features of the alternative forms of
benefit available pursuant to Paragraph (d) below, and (6) sufficient additional
information to explain the relative values of such alternative forms of benefit.
The period of time during which a Member may make or revoke such election shall
be the ninety-day period ending on such Member's Annuity Starting Date provided
that such election may also be revoked at any time prior to the expiration of
the seven-day period that begins the day after the information required to be
furnished pursuant to this Paragraph has been furnished to the Member.
(d) For purposes of Article VI, VII, or VIII, the benefit for any
Member who has elected not to receive the standard benefit shall be paid in one
of the following alternative forms to
X-3
be selected by the Member or, in the absence of such election, by the Committee;
provided, however, that the period and method of payment of any such form shall
be in compliance with the provisions of section 401(a)(9) of the Code and
applicable Treasury regulations thereunder:
(1) A commercial annuity in the form of a single life annuity for
the life of such Member.
(2) A commercial annuity (A) for the joint lives of the Member and
any person designated by the Member, (B) for a term certain (of 5, 10, or
15 years) and continuous for the life of the Member if he survives such
term certain, or (C) for a term certain to the Member and any designated
beneficiary of the Member if the Member does not survive such term certain.
(3) A lump sum.
(4) Periodic installment payments to such Member for a term
certain or, in the event of such Member's death before the end of such term
certain, to his designated beneficiary; provided, however, that such term
certain shall not exceed the lesser of (i) ten years or (ii) the life
expectancy of the Member or the joint and last survivor expectancy of the
Member and his designated beneficiary. Upon the death of a beneficiary who
is receiving installment payments under this Paragraph, the remaining
balance in the Member's Accounts shall be paid as soon as administratively
feasible, in one lump sum cash payment, to the beneficiary's executor or
administrator or to his heirs at law if there is no administration of such
beneficiary's estate.
(e) If a Member, who terminated his employment under circumstances
such that he was entitled to a benefit pursuant to Article VI, VII, or VIII,
dies prior to his Annuity Starting Date, the amount of the benefit to which he
was entitled shall be paid pursuant to Section 10.3 just as if such Member had
died while employed by the Employer except that his Vested Interest shall be
determined pursuant to Article VI, VII, or VIII, whichever is applicable.
X.3 Standard and Alternative Forms of Death Benefit.
(a) For purposes of Article IX, the standard death benefit for a
deceased Member who leaves an Eligible Surviving Spouse shall be a survivor
annuity. Such survivor annuity shall be a commercial annuity which is payable
for the life of such Eligible Surviving Spouse.
(b) Any Member who would otherwise have his death benefit paid in the
standard survivor annuity form may elect not to have his benefit paid in such
form by executing the beneficiary designation form prescribed by the Committee
and filing same with the Committee, designating a primary beneficiary other than
his Eligible Surviving Spouse or electing some form of payment other than a
survivor annuity. Any election may be revoked and subsequent elections may be
made or revoked at any time prior to a Member's date of death.
X-4
(c) Paragraph (b) above to the contrary notwithstanding:
(1) An election not to have the death benefit paid in the standard
survivor annuity form as provided in Paragraph (a) above shall not be
effective unless (A) the Eligible Surviving Spouse has consented thereto in
writing and such consent (i) acknowledges the effect of such election, (ii)
either consents to the specific designated beneficiary (which designation
may not subsequently be changed by the Member without spousal consent) or
expressly permits such designation by the Member without the requirement of
further consent by the spouse, and (iii) is witnessed by a Plan
representative (other than the Member) or a notary public or (B) the
consent of such spouse cannot be obtained because the Eligible Surviving
Spouse cannot be located or because of other circumstances described by
applicable Treasury regulations. Any such consent by such Eligible
Surviving Spouse shall be irrevocable.
(2) An election not to have the death benefit paid in the standard
survivor annuity form may be made before the first day of the Plan Year in
which a Member attains the age of thirty-five only (A) after the Member
separates from service and only with respect to benefits accrued under the
Plan before the date of such separation and (B) in the case of a Member who
has not separated from service, if the Member has been furnished the
information described in Paragraph (d), with such election to become
invalid upon the first day of the Plan Year in which the Member attains the
age of thirty-five, whereupon a new election may be made by such Member.
(d) The Committee shall furnish certain information pertinent to the
Paragraph (b) election to each Member within the period beginning with the first
day of the Plan Year in which he attains the age of thirty-two (but no earlier
than the date such Member begins participation in the Plan) and ending with the
later of (1) the last day of the Plan Year preceding the Plan Year in which the
Member attains the age of thirty-five or (2) a reasonable time after the
Employee becomes a Member. If a Member separates from service before attaining
age thirty-five, such information shall be furnished to such Member within the
period beginning one year before the Member separates from service and ending
one year after such separation. Such information shall also be furnished to a
Member who has not attained the age of thirty-five or terminated employment,
within a reasonable time after written request by such Member. The furnished
information shall include an explanation of (1) the terms and conditions of the
survivor annuity, (2) the Member's right to elect to waive the survivor annuity
and the effect of such election, (3) the rights of the Member's Eligible
Surviving Spouse, (4) the right to revoke such election and the effect of such
revocation, (5) a general description of the eligibility conditions and other
material features of the alternative forms of benefit available pursuant to
Paragraph (f) below, and (6) sufficient additional information to explain the
relative value of such alternative forms of benefit.
(e) In the event a survivor annuity is to be paid to a Member's
Eligible Surviving Spouse, such Eligible Surviving Spouse may elect to receive
the benefit in one of the alternative forms set forth in Section 10.3(f). Within
a reasonable time after written request by such Eligible Surviving Spouse, the
Committee shall provide to such Eligible Surviving Spouse a written
X-5
explanation of such survivor annuity form and the alternative forms of payment
which may be selected along with the financial effect of each such form.
(f) For purposes of Article IX, the death benefit of a deceased Member
who is not survived by an Eligible Surviving Spouse or who has elected not to
have his death benefit paid in the standard survivor annuity form set forth in
Section 10.3(a) shall be paid to his designated beneficiary in one of the
following alternative forms to be selected by such beneficiary or, in the
absence of such selection, by the Committee; provided, however, that the period
and method of payment of any such form shall be in compliance with the
provisions of section 401(a)(9) of the Code and applicable Treasury regulations
thereunder:
(1) A commercial annuity in the form of a single life annuity for
the life of the designated beneficiary.
(2) A lump sum.
(g) If a deceased Member who either is not survived by an Eligible
Surviving Spouse or has elected (with spousal consent) not to have his standard
death benefit paid in the standard survivor annuity form set forth in Section
10.3(a) does not have a valid beneficiary designation on file with the Committee
at the time of his death, the designated beneficiary or beneficiaries to receive
such Member's death benefit shall be as follows:
(1) If a Member leaves an Eligible Surviving Spouse, his
designated beneficiary shall be such Eligible Surviving Spouse;
(2) If a Member leaves no Eligible Surviving Spouse, his
designated beneficiary shall be (A) such Member's executor or administrator
or (B) his heirs at law if there is no administration of such Member's
estate.
X.4 Cash-Out of Benefit. If a Member terminates his employment and his
Vested Interest in his Accounts is not in excess of $5,000, such Member's
benefit shall be paid in one lump sum payment in lieu of any other form of
benefit herein provided. Any such payment shall be made at the time specified in
Section 10.1(a) without regard to the consent restrictions of Section 10.1(b)
and the election and spousal consent requirements of Sections 10.2 and 10.3
except that a married Member's death benefit shall be paid to his Eligible
Surviving Spouse unless another beneficiary has been designated pursuant to the
provisions of Section 10.3(b). The provisions of this Section shall not be
applicable to a Member following his Annuity Starting Date.
X.5 Direct Rollover Election. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have all or any portion of an Eligible Rollover Distribution
(other than any portion attributable to the offset of an outstanding loan
balance of such Member pursuant to the Plan's loan procedure) paid directly to
an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.
The preceding sentence notwithstanding, a Distributee may elect a Direct
Rollover pursuant to this Section only if such Distributee's Eligible
X-6
Rollover Distributions during the Plan Year are reasonably expected to total
$200 or more. Furthermore, if less than 100% of the Member's Eligible Rollover
Distribution is to be a Direct Rollover, the amount of the Direct Rollover must
be $500 or more. Prior to any Direct Rollover pursuant to this Section, the
Committee may require the Distributee to furnish the Committee with a statement
from the plan, account, or annuity to which the benefit is to be transferred
verifying that such plan, account, or annuity is, or is intended to be, an
Eligible Retirement Plan.
X.6 Benefits from Account Balances. With respect to any benefit payable in
any form pursuant to the Plan, such benefit shall be provided from the Account
balance(s) to which the particular Member or beneficiary is entitled.
X.7 Distributions of Company Stock and Dow Stock. Benefits shall be paid
(or transferred pursuant to Section 10.5) in cash except that (A) a Member (or
his designated beneficiary or legal representative in the case of a deceased
Member) may elect to have the portion of his Accounts invested in the Company
Stock Fund distributed (or transferred pursuant to Section 10.5) in full shares
of Company Stock to the extent of the Member's pro rata portion of the shares of
Company Stock held in the Company Stock Fund with any balance of the Member's
interest in the Company Stock Fund (including fractional shares) to be paid or
transferred in cash; (B) the portion of a Member's Dow ESOP Account invested in
whole shares of Dow Stock shall be distributed (or transferred pursuant to
Section 10.5) in shares of Dow Stock unless such Member (or his designated
beneficiary or legal representative in the case of a deceased Member) elects to
have such portion paid or transferred in cash; and (C) to the extent possible, a
Member (or his designated beneficiary or legal representative in the case of a
deceased Member) may elect to have his Destec Accounts, if any, paid (or
transferred pursuant to Section 10.5) in kind.
X.8 Commercial Annuities. At the direction of the Committee, the Trustee
may pay any form of benefit provided hereunder other than a lump sum payment or
a Direct Rollover pursuant to Section 10.5 by the purchase of a commercial
annuity contract and the distribution of such contract to the Member or
beneficiary. Thereupon, the Plan shall have no further liability with respect to
the amount used to purchase the annuity contract and such Member or beneficiary
shall look solely to the company issuing such contract for such annuity
payments. All certificates for commercial annuity benefits shall be
nontransferable, except for surrender to the issuing company, and no benefit
thereunder may be sold, assigned, discounted, or pledged (other than as
collateral for a loan from the company issuing same). Notwithstanding the
foregoing, the terms of any such commercial annuity contract shall conform with
the time of payment, form of payment, and consent provisions of Sections 10.1,
10.2, and 10.3.
X.9 Unclaimed Benefits. In the case of a benefit payable on behalf of a
Member, if the Committee is unable to locate the Member or beneficiary to whom
such benefit is payable, upon the Committee's determination thereof, such
benefit shall be forfeited. Notwithstanding the foregoing, if subsequent to any
such forfeiture the Member or beneficiary to whom such benefit is payable makes
a valid claim for such benefit, such forfeited benefit shall be restored to the
Plan in the manner provided in Section 8.7.
X-7
X.10 Claims Review.
(a) In any case in which a claim for Plan benefits of a Member or
beneficiary is denied or modified, the Committee shall furnish written notice to
the claimant within ninety days (or within 180 days if additional information
requested by the Committee necessitates an extension of the ninety-day period
and the claimant is informed of such extension in writing within the original
ninety-day period), which notice shall:
(1) State the specific reason or reasons for the denial or
modification;
(2) Provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
(3) Provide a description of any additional material or
information necessary for the Member, his beneficiary, or representative to
perfect the claim and an explanation of why such material or information is
necessary; and
(4) Explain the Plan's claim review procedure as described in
Paragraph (b) below.
(b) In the event a claim for Plan benefits is denied or modified, if
the Member, his beneficiary, or a representative of such Member or beneficiary
desires to have such denial or modification reviewed, he must, within sixty days
following receipt of the notice of such denial or modification, submit a written
request for review by the Committee of its initial decision. In connection with
such request, the Member, his beneficiary, or the representative of such Member
or beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within
sixty days following such request for review the Committee shall, after
providing a full and fair review, render its final decision in writing to the
Member, his beneficiary, or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific references to
pertinent Plan provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period, the Committee's
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. If an extension of time for review is
required, written notice of the extension shall be furnished to the Member,
beneficiary, or the representative of such Member or beneficiary prior to the
commencement of the extension period.
X-8
XI.
In-Service Withdrawals
XI.1 In-Service Withdrawals.
(a) A Member may withdraw any or all amounts held in his After-Tax
Account.
(b) A Member who has a financial hardship, as determined by the
Committee, and who has made all available withdrawals pursuant to Paragraph (a)
above and Appendices A, B, and/or C hereunder, as applicable, and pursuant to
the provisions of any other plans of the Employer and any Controlled Entities of
which he is a member and who has obtained all available loans pursuant to
Article XII and pursuant to the provisions of any other plans of the Employer
and any Controlled Entities of which he is a member may withdraw from his
Rollover Contribution Account and his Before-Tax Account amounts not to exceed
the amount determined by the Committee as being available for withdrawal
pursuant to this Paragraph. Such withdrawal shall come, first, from the Member's
Rollover Contribution Account and, second, from his Before-Tax Account. For
purposes of this Paragraph, financial hardship shall mean the immediate and
heavy financial needs of the Member. A withdrawal based upon financial hardship
pursuant to this Paragraph shall not exceed the amount required to meet the
immediate financial need created by the hardship and not reasonably available
from other resources of the Member. The amount required to meet the immediate
financial need may include any amounts necessary to pay any federal, state, or
local income taxes or penalties reasonably anticipated to result from the
distribution. The determination of the existence of a Member's financial
hardship and the amount required to be distributed to meet the need created by
the hardship shall be made by the Committee. The decision of the Committee shall
be final and binding, provided that all Members similarly situated shall be
treated in a uniform and nondiscriminatory manner. A withdrawal shall be deemed
to be made on account of an immediate and heavy financial need of a Member if
the withdrawal is for:
(1) Expenses for medical care described in section 213(d) of the
Code previously incurred by the Member, the Member's spouse, or any
dependents of the Member (as defined in section 152 of the Code) or
necessary for those persons to obtain medical care described in section
213(d) of the Code and not reimbursed or reimbursable by insurance;
(2) Costs directly related to the purchase of a principal
residence of the Member (excluding mortgage payments);
(3) Payment of tuition and related educational fees, and room and
board expenses, for the next twelve months of post-secondary education for
the Member or the Member's spouse, children, or dependents (as defined in
section 152 of the Code);
(4) Payments necessary to prevent the eviction of the Member from
his principal residence or foreclosure on the mortgage of the Member's
principal residence; or
XI-1
(5) Such other financial needs that the Commissioner of Internal
Revenue may deem to be immediate and heavy financial needs through the
publication of revenue rulings, notices, and other documents of general
applicability.
The above notwithstanding, (1) withdrawals under this Paragraph from a Member's
Before-Tax Account shall be limited to the sum of the Member's Before-Tax
Contributions to the Plan, plus income allocable thereto and credited to the
Member's Before-Tax Account as of December 31, 1988, less any previous
withdrawals of such amounts, and (2) amounts allocated to a Member's Before-Tax
Account pursuant to the provisions of Section 4.2(e) shall not be subject to
withdrawal. A Member who makes a withdrawal from his Before-Tax Account under
this Paragraph may not make elective contributions or employee contributions to
the Plan or any other qualified or nonqualified plan of the Employer or any
Controlled Entity for a period of twelve months following the date of such
withdrawal. Further, such Member may not make elective contributions under the
Plan or any other plan maintained by the Employer or any Controlled Entity for
such Member's taxable year immediately following the taxable year of the
withdrawal in excess of the applicable limit set forth in Section 3.1(d) for
such next taxable year less the amount of such Member's elective contributions
for the taxable year of the withdrawal.
XI.2 Restriction on In-Service Withdrawals.
(a) All withdrawals pursuant to this Article shall be made in
accordance with the provisions and within the time period prescribed by the
Committee prior to the proposed date of withdrawal.
(b) Notwithstanding the provisions of this Article, (i) not more than
one withdrawal pursuant to Section 11.1(a) shall be made in any one calendar
quarter, and (ii) no withdrawal shall be made from an Account to the extent such
Account has been pledged to secure a loan from the Plan.
(c) If a Member's Account from which a withdrawal is made is invested
in more than one Investment Fund, the withdrawal shall be made pro rata from
each Investment Fund in which such Account is invested.
(d) All withdrawals under this Article shall be paid in cash.
(e) Any withdrawal hereunder shall be subject to the Direct Rollover
election described in Section 10.5.
(f) Except as provided in Appendix A and Appendix B, this Article
shall not be applicable to a Member following termination of employment and the
amounts in such Member's Accounts shall be distributable only in accordance with
the provisions of Article X.
XI-2
XII.
Loans
XII.1 Eligibility for Loan.
(a) Upon application by (1) any Member who is an Employee or (2) any
Member no longer employed by the Employer, a beneficiary of a deceased Member,
or an alternate payee under a qualified domestic relations order, as that term
is defined in section 414(p)(8) of the Code, who retains an Account balance
under the Plan and who is a party-in-interest, as that term is defined in
section 3(14) of the Act, as to the Plan (an individual who is eligible to apply
for a loan under this Article being hereinafter referred to as a "Member" for
purposes of this Article) and subject to such uniform and nondiscriminatory
rules and regulations as the Committee may establish, the Committee may in its
discretion direct the Trustee to make a loan or loans to such Member.
(b) No loan shall be made to a Member who owes any amount on an
outstanding loan previously made to him from the Plan.
XII.2 Maximum Loan.
(a) A loan to a Member may not exceed 50% of the then value of such
Member's Vested Interest in his Accounts and no loan may be made for an amount
which would require the liquidation of a Member's Dow ESOP Account or the
portion of a Member's Employer Contribution Account which is invested in the
Company Stock Fund.
(b) Paragraph (a) above to the contrary notwithstanding, the amount
of a loan made to a Member under this Article shall not exceed an amount equal
to the difference between:
(1) The lesser of $50,000 (reduced by the excess, if any, of (A)
the highest outstanding balance of loans from the Plan during the one-year
period ending on the day before the date on which the loan is made over (B)
the outstanding balance of loans from the Plan on the date on which the
loan is made) or one-half of the present value of the Member's total
nonforfeitable accrued benefit under all qualified plans of the Employer or
a Controlled Entity; minus
(2) The total outstanding loan balance of the Member under all
other loans from all qualified plans of the Employer or a Controlled
Entity.
XII.3 Minimum Loan. A loan to a Member may not be for an amount less
than $1,000.00.
XII.4 Interest and Security.
XII-1
(a) Any loan made pursuant to this Article shall bear interest at a
rate established by the Committee from time to time and communicated to the
Members, which rate shall provide the Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for loans
which would be made under similar circumstances.
(b) Any loan shall be made as an investment of a segregated loan
fund to be established in the Trust Fund for the Member to whom the loan is
made. Any loan shall be considered to come, first, from the Member's After-Tax
Account, second, from the Member's Rollover Contribution Account, third, from
the Member's Vested Interest in the portion of his Employer Contribution Account
that is not invested in the Company Stock Fund, fourth, from the Member's Dow
Transfer Account, and, finally, from the Member's Before-Tax Account. The
Trustee shall fund a Member's segregated loan fund by liquidating such portion
of the assets of the Accounts from which the Member's loan is to be made as is
necessary to fund the loan and transferring the proceeds to such segregated loan
fund. If a Member's Accounts are invested in more than one Investment Fund, the
transfer shall be made pro rata from each such Investment Fund; provided
however, that no loan shall be funded from the portion of a Member's Employer
Contribution Account that is invested in the Company Stock Fund. The loan shall
be secured by a pledge of the Member's segregated loan fund.
XII.5 Repayment Terms of Loan.
(a) The Member shall be required, as a condition to receiving a
loan, to enter into an irrevocable agreement authorizing the Employer to make
payroll deductions from his Compensation so long as the Member is an Employee
and to transfer such payroll deduction amounts to the Trustee in payment of such
loan plus interest.
(b) The terms of the loan shall (1) require level amortization with
payments not less frequently than quarterly, (2) require that the loan be repaid
within five years unless the Member certifies in writing to the Committee that
the loan is to be used to acquire any dwelling unit which within a reasonable
time is to be used (determined at the time the loan is made) as a principal
residence of the Member, (3) allow prepayment without penalty, provided that any
prepayment must be for the full outstanding loan balance (including interest),
and (4) require that the balance of the loan (including interest) shall become
due and payable (to the extent not otherwise due and payable) on the date the
Member or, if applicable, the Member's beneficiary, is first entitled to a
distribution pursuant to Article VI, VII, VIII, or IX, irrespective of whether
such Member or beneficiary elects or consents to such distribution and that such
Member's outstanding loan balance (including interest) shall be repaid by
offsetting such balance against the amount in the Member's segregated loan fund
pledged as security for the loan. By agreeing to the pledge of the segregated
loan fund as security for the loan, a Member shall be deemed to have consented
to the distribution of such segregated loan fund prior to the time specified in
section 411(a)(11) of the Code and the applicable Treasury regulations
thereunder.
(c) If the Member fails in any way to comply with the repayment
terms of a loan, such loan shall be repaid by offsetting the Member's
outstanding loan balance (including interest) against the amount in the Member's
segregated loan fund pledged as security for the loan. Any such
XII-2
outstanding loan balance (including interest) shall be so offset and repaid as
soon as administratively feasible after such failure to comply, and such
repayment shall be prior to any withdrawal or distribution of benefits from the
pledged portion of the Member's Accounts pursuant to the provisions of the Plan.
Notwithstanding the foregoing, amounts in a Member's Before-Tax Account may not
be used to satisfy the payment of such loan (including interest) prior to the
time such amounts are otherwise distributable from the Plan, and amounts in a
Member's Employer Contribution Account may not be offset and used to satisfy the
payment of such loan (including interest) prior to the earliest time such
amounts are otherwise permitted to be distributed under applicable law.
(d) The above notwithstanding, a Member who is on an unpaid leave of
absence from the Employer may elect to suspend payments on his loan during such
leave of absence for a period of up to one year. Upon such Member's return to
active employment with the Employer at the conclusion of such leave of absence
or upon the expiration of such one-year period, if earlier, such Member shall be
permitted to refinance his loan, including all accrued and unpaid interest, over
a term that does not extend beyond the expiration of the original term of the
loan.
(e) Amounts tendered to the Trustee by a Member in repayment of a
loan made pursuant to this Article (1) shall initially be credited to the
Member's segregated loan fund, (2) then shall be transferred as soon as
practicable following receipt thereof to the Account or Accounts from which the
Member's loan was made, and (3) invested in accordance with the Member's current
designation as to the investment of contributions pursuant to Section 5.2.
XII.6 Operation of Article. The provisions of this Article shall be
applicable to loans granted or renewed after January 1, 1998. Loans granted or
renewed on or prior to such date shall be governed by the provisions of the Plan
as in effect prior to this amendment and restatement of the Plan.
XII-3
XIII.
Administration of the Plan
XIII.1 General Administration of the Plan. The general administration of
the Plan shall be vested in the Committee. For purposes of the Act, the
Committee shall be the Plan "administrator" and shall be the "named fiduciary"
with respect to the general administration of the Plan (except as to the
investment of the assets of the Trust Fund).
XIII.2 Records and Procedures. The Committee shall keep appropriate records
of its proceedings and the administration of the Plan and shall make available
for examination during business hours to any Member or beneficiary such records
as pertain to that individual's interest in the Plan. The Committee shall
designate the person or persons who shall be authorized to sign for the
Committee and, upon such designation, the signature of such person or persons
shall bind the Committee.
XIII.3 Meetings. The Committee shall hold meetings upon such notice and at
such time and place as it may from time to time determine. Notice to a member
shall not be required if waived in writing by that member. A majority of the
members of the Committee duly appointed shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
members of the Committee.
XIII.4 Self-Interest of Members. No member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee member
is so disqualified to act and the remaining members cannot agree, the Directors
shall appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.
XIII.5 Compensation and Bonding. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
XIII.6 Committee Powers and Duties. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority, and duty:
(a) To make rules, regulations, and bylaws for the administration of
the Plan that are not inconsistent with the terms and provisions hereof,
provided such rules, regulations, and bylaws are evidenced in writing and copies
thereof are delivered to the Trustee and to
XIII-1
the Company, and to enforce the terms of the Plan and the rules and regulations
promulgated thereunder by the Committee;
(b) To construe in its discretion all terms, provisions, conditions,
and limitations of the Plan, and, in all cases, the construction necessary for
the Plan to qualify under the applicable provisions of the Code shall control;
(c) To correct any defect or to supply any omission or to reconcile
any inconsistency that may appear in the Plan in such manner and to such extent
as it shall deem expedient in its discretion to effectuate the purposes of the
Plan;
(d) To employ and compensate such accountants, attorneys, investment
advisors, and other agents, employees, and independent contractors as the
Committee may deem necessary or advisable for the proper and efficient
administration of the Plan;
(e) To determine in its discretion all questions relating to
eligibility;
(f) To make a determination in its discretion as to the right of any
person to a benefit under the Plan and to prescribe procedures to be followed by
distributees in obtaining benefits hereunder;
(g) To prepare, file, and distribute, in such manner as the
Committee determines to be appropriate, such information and material as is
required by the reporting and disclosure requirements of the Act;
(h) To furnish the Employer any information necessary for the
preparation of such Employer's tax return or other information that the
Committee determines in its discretion is necessary for a legitimate purpose;
(i) To require and obtain from the Employer and the Members any
information or data that the Committee determines is necessary for the proper
administration of the Plan;
(j) To instruct the Trustee as to the loans to Members pursuant to
the provisions of Article XII;
(k) To direct the Trustee as to voting of Company Stock pursuant to
the provisions of Section 5.4;
(l) To appoint investment managers pursuant to Section 15.5;
(m) To receive and review reports from the Trustee and from
investment managers as to the financial condition of the Trust Fund, including
its receipts and disbursements; and
XIII-2
(n) To establish or designate Investment Funds as investment options
as provided in Article V.
XIII.7 Employer to Supply Information. The Employer shall supply full and
timely information to the Committee, including, but not limited to, information
relating to each Member's Compensation, age, retirement, death, or other cause
of termination of employment and such other pertinent facts as the Committee may
require. The Employer shall advise the Trustee of such of the foregoing facts as
are deemed necessary for the Trustee to carry out the Trustee's duties under the
Plan. When making a determination in connection with the Plan, the Committee
shall be entitled to rely upon the aforesaid information furnished by the
Employer.
XIII.8 Indemnification. The Company shall indemnify and hold harmless each
member of the Committee and each Employee who is a delegate of the Committee
against any and all expenses and liabilities arising out of his administrative
functions or fiduciary responsibilities, including any expenses and liabilities
that are caused by or result from an act or omission constituting the negligence
of such individual in the performance of such functions or responsibilities, but
excluding expenses and liabilities that are caused by or result from such
individual's own gross negligence or willful misconduct. Expenses against which
such individual shall be indemnified hereunder shall include, without
limitation, the amounts of any settlement or judgment, costs, counsel fees, and
related charges reasonably incurred in connection with a claim asserted or a
proceeding brought or settlement thereof.
XIII-3
XIV.
Trustee and Administration of Trust Fund
XIV.1 Appointment, Resignation, Removal, and Replacement of Trustee.
(a) The Trustee shall be appointed, removed, and replaced by and in
the sole discretion of the Directors. The Trustee shall be the "named fiduciary"
with respect to investment of the Trust Fund's assets.
(b) Any Trustee may resign at any time by giving at least thirty
days' written notice of such resignation to the Directors. Any Trustee may be
removed, with or without cause, by the Directors on written notice of such
removal to such Trustee. The Directors may appoint a successor Trustee by
written designation, a copy of which shall be delivered to the Committee and the
former Trustee. If there would be no other Trustee then acting, the actual
appointment and qualification of a successor Trustee to whom the Trust Fund may
be transferred are conditions which must be fulfilled before the resignation or
removal of a Trustee shall become effective. The Directors may by resolution
increase or decrease the number of Trustees at any time acting hereunder.
XIV.2 Acceptance of Fund. The Trustee accepts the Trust Fund hereunder and
agrees to accept and retain, manage, administer and hold the Trust Fund in
accordance with the terms and provisions of this Plan. The Trustee shall receive
any securities or other properties that are tendered to the Trustee pursuant to
the Plan that are acceptable to the Trustee.
XIV.3 Committee Discharging Duty. The Trustee may assume that the
Committee is discharging its duties under the Plan until and unless the Trustee
is notified to the contrary in writing by any person known to be a member of the
Committee or by the Employer. Upon receipt of such notice, the Trustee may, if
the Trustee so desires, apply to a court of competent jurisdiction for guidance
with respect to the disposition of the Trust Fund.
XIV.4 Taxes. If, pursuant to the provisions of any law now or hereafter
enacted, any tax shall be imposed upon the Trustee with respect to the assets or
income of the Trust Fund, the Trustee (without the necessity of any direction or
approval by the Committee) may pay such tax from the Trust Fund, provided such
payment is not otherwise prohibited by law. The Trustee, however, shall not be
obligated to pay any such tax as long as the validity thereof is contested in
good faith. In determining whether or not to pay any such tax, the Trustee may
obtain the advice of counsel (including, but not limited to, counsel for the
Employer or the Committee).
XIV.5 Investment of the Trust Fund. The Committee shall have the exclusive
authority and discretion to select the Investment Funds available for investment
under the Plan. The Committee shall notify the Trustee in writing of any changes
in the selection of Investment Funds available for investment under the Plan.
Each Member shall have the exclusive right, in accordance with Section 5.2 and
subject to the limitations of Section 5.1, to direct the investment by the
Trustee
XIV-1
of all amounts allocated to such Member's Accounts among one or more of the
available Investment Funds. All investment directions by Members shall be timely
furnished to the Trustee by the Committee, except to the extent such directions
are transmitted telephonically or otherwise by Members directly to the Trustee
or its delegate in accordance with the procedures established by the Committee
and communicated to the Trustee. In making any investment of the assets of the
Trust, except as provided in Section 5.3, the Trustee shall be fully entitled to
rely on such directions furnished by the Committee or by Members in accordance
with the procedures established by the Committee, and shall be under no duty to
make any inquiry or investigation with respect thereto. If the Trustee receives
any contribution under the Plan that is not accompanied by instructions
directing its investment, the Trustee shall promptly notify the Committee of
that fact, and the Trustee shall invest such contribution in such assets as the
Trustee may in its discretion determine, or the Trustee may hold such amounts
uninvested for a reasonable period pending the receipt of directions from the
Committee.
XIV.6 Powers of the Trustee. Subject to any limitations stated elsewhere
herein, in addition to the authority, rights, privileges, powers, and duties
elsewhere herein vested in the Trustee and those now or hereafter conferred by
law, the Trustee shall also have the following authority, rights, privileges,
powers, and duties:
(a) To hold, manage, control, collect, and use the Trust Fund in
accordance with the terms of this instrument;
(b) To sell (for cash or on credit, or both), exchange, or otherwise
dispose of, the whole or any part of the Trust Fund, at public or private sale;
to lease (including, but not limited to, oil, gas, or mineral leases), rent,
mortgage (including purchase money mortgages), pledge, or otherwise encumber the
whole or any part of the Trust Fund; and to loan or borrow money in any manner,
including by joint and several obligations, all upon such terms, regardless of
the duration of the Trust, as the Trustee may deem advisable (provided that
neither the Employer nor any Member may borrow from the Trust Fund except as
otherwise permitted herein);
(c) To invest or reinvest the Trust Fund in property of any
description whatsoever (including, but not limited to, oil, gas, or mineral
interests; common or preferred stock; shares of investment trusts or companies;
bills, notes, and other evidences of indebtedness; non-income producing
property; and property outside of Texas);
(d) To make or hold investments of any part of the Trust Fund in
common or undivided interest with other persons or entities, including an
undivided interest in any property in which any Trustee, individually or
otherwise, may hold an undivided interest; to buy from or sell to any person or
entity to the extent not otherwise prohibited herein;
(e) To make commingled, collective, or common investments and to
invest and reinvest all or any portion of the Trust Fund collectively with funds
of other pension and profit sharing trusts exempt from tax under section 501(a)
of the Code by reason of qualifying under section 401(a) of said Code,
including, without limitation, power to invest
XIV-2
collectively with such other funds through the medium of one or more of the
common, collective, or commingled trust funds, which has been or may hereafter
be established and maintained by the Trustee or its affiliates. To the extent of
the interest of the Trust Fund in any such collective trust, the agreement or
declaration of trust establishing such collective trust shall be deemed to be
adopted and made a part of the Plan and Trust as if set forth in full herein;
(f) To deposit or invest all or a part of the Trust Fund in savings
accounts, certificates of deposit, or other deposits that bear a reasonable rate
of interest in a bank or similar financial institution, including the commercial
department of the Trustee, if such bank or other institution is supervised by
any agency of a state or the federal government.
(g) To employ and compensate such attorneys, counsel, brokers,
banks, investment advisors, or other agents, employees, or independent
contractors and to delegate to them such of the duties, rights, and powers of
the Trustee as may be deemed advisable in handling and administering the Plan;
(h) To partition any property or interest held as a part of the
Trust Fund and, in any and all such partitions, to pay or receive such money or
property as may be necessary or advisable to equalize differences and to
evaluate any property belonging to the Trust Fund;
(i) To institute, join in, maintain, defend, compromise, submit to
arbitration, or settle any litigation, claim, obligation, or controversy with
respect to any matter affecting the Trust Fund, regardless of the manner in
which such matter may have arisen, all in the name of the Trustee and without
the joinder of any Member; and
(j) To hold uninvested for a reasonable period of time any moneys
received by it until the same shall be invested or disbursed pursuant to the
provisions of the Plan.
The Trustee is also authorized to exercise all the rights, powers, options, and
privileges now or hereafter granted to, provided for, or vested in trustees
under the laws of the State of Illinois, except as such may conflict with the
terms of this instrument or applicable law. As far as possible, no subsequent
legislation or regulation shall be in limitation of the rights, powers, or
privileges granted the Trustee hereunder or set forth under the laws of the
State of Illinois as such laws exist at the time of the execution hereof.
Generally, the Trustee shall have, hold, manage, control, use, invest and
reinvest, disburse, and dispose of the Trust Fund under all circumstances to the
same extent as if the Trustee were the owner thereof in fee simple, subject only
to such limitations as are contained herein and such applicable laws as cannot
be waived. This instrument shall always be construed in favor of the validity of
any act or omission by or of the Trustee. Notwithstanding the foregoing, the
Trustee may not invest the Trust Fund assets in any Company security that is not
a "qualifying Company security" or in any Company real property that is not
"qualifying Company real property." The Trustee may, however, acquire
"qualifying Company securities" or "qualifying Company real property" as an
investment, provided that any such acquisition or investment will not result in
the Trust Fund's holding more than 100% of the then fair market value of the
assets of the Trust Fund in "qualifying Company securities" and "qualifying
Company real property." The term "qualifying
XIV-3
Company securities" means stock or marketable obligations of the Company or an
affiliate. The term "qualifying Company real property" means parcels of real
property leased to the Company or an affiliate if a substantial number of the
parcels are dispersed geographically and if each such parcel is suitable for, or
adaptable to, more than one use.
XIV.7 Compensation, Expenses, and Bond of Trustee. Unless prohibited by
Section 14.11, the Trustee shall receive such compensation for services as
Trustee hereunder as may be agreed upon from time to time by the Company and the
Trustee. The Trustee shall be reimbursed for all reasonable expenses incurred
while acting as Trustee as provided in Section 14.11. No bond or other security
shall be required of the Trustee unless otherwise required by law or by the
Company.
XIV.8 Reliance. The Trustee shall be fully protected in relying upon a
resolution of the Directors as to the membership of the Committee as it then
exists and in continuing to rely upon such resolution until a subsequent
resolution is filed with the Trustee by the Directors. The Trustee may accept as
true all papers, certificates, statements, and representations of fact that are
presented to the Trustee by the Committee without investigation, questioning, or
verification if the Trustee believes same to be true and authentic, and the
Trustee may rely solely on the written advice of the Committee with respect to
any question of fact.
XIV.9 Accounting. As soon as practicable after the end of each Plan Year,
the Trustee shall render a written accounting of the administration of the Trust
Fund showing all receipts and disbursements during the year and the then value
of the assets of the Trust Fund. This accounting shall be transmitted to the
Committee and to the Company.
XIV.10 Judicial Protection. The Trustee may seek judicial protection by any
action or proceeding deemed necessary to settle the accounts of the Trustee or
may obtain a judicial determination or a declaratory judgment as to a question
of construction of the Plan. The Trustee must join as parties defendant in any
such action only the Committee and the Company, although the Trustee may join
other parties if the Trustee deems it advisable to do so.
XIV.11 Payment of Expenses. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, expenses of the Committee, and the cost of furnishing any bond or security
required of the Committee shall be paid by the Trustee from the Trust Fund, and,
until paid, shall constitute a claim against the Trust Fund which is paramount
to the claims of Members and beneficiaries; provided, however, that (a) the
obligation of the Trustee to pay such expenses from the Trust Fund shall cease
to exist to the extent such expenses are paid by the Employer and (b) in the
event the Trustee's compensation is to be paid, pursuant to this Section, from
the Trust Fund, any individual serving as Trustee who already receives full-time
pay from an employer or an association of employers whose employees are
participants in the Plan, or from an employee organization whose members are
participants in the Plan, shall not receive any additional compensation for
serving as Trustee. This Section shall be deemed to be a part of any contract to
provide for expenses of Plan and Trust administration, whether or not the
signatory to such contract is, as a matter of convenience, the Employer.
XIV-4
XIV.12 Trust Fund Property. All income, profits, recoveries, contributions,
forfeitures, and any and all moneys, securities, and properties of any kind at
any time received or held by the Trustee hereunder shall be held for investment
purposes as a commingled Trust Fund. The Committee shall maintain Accounts in
the name of each Member, but the maintenance of an Account designated as the
Account of a Member shall not mean that such Member shall have a greater or
lesser interest than that due him by operation of the Plan and shall not be
considered as segregating any funds or property from any other funds or property
contained in the commingled fund. No Member shall have any title to any specific
asset in the Trust Fund.
XIV.13 Distributions from Members' Accounts. Distributions from a Member's
Accounts shall be made by the Trustee only if, when, and in the amount and
manner directed in writing by the Committee. Any distribution made to a Member
or for his benefit shall be debited to such Member's Account or Accounts. All
distributions hereunder shall be made in cash except as otherwise specifically
provided herein.
XIV.14 Payments Solely from Trust Fund. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund, and neither the
Employer nor the Trustee assumes any liability or responsibility for the
adequacy thereof. The Committee or the Trustee may require execution and
delivery of such instruments as are deemed necessary to assure proper payment of
any benefits.
XIV.15 No Benefits to the Employer. No part of the corpus or income of the
Trust Fund shall be used for any purpose other than the exclusive purpose of
providing benefits for the Members and their beneficiaries and of defraying
reasonable expenses of administering the Plan. Anything to the contrary herein
notwithstanding, the Plan shall not be construed to vest any rights in the
Employer other than those specifically given hereunder.
XIV.16 Indemnification. The Company shall indemnify the Trustee against any
and all claims, liabilities, costs or expenses, including reasonable attorneys'
fees, incurred by the Trustee resulting from the acts, omissions, or breach or
an alleged breach of a fiduciary duty owed to the Plan, by a party other than
the Trustee, including, but not limited to, any acts, omissions, or fiduciary
duty or responsibility owned to the Plan by an investment manager appointed
pursuant to Section 15.5, any predecessor trustee, or the Committee; provided,
however, that nothing herein shall be construed as an indemnification of the
Trustee for any claims, liabilities, costs, and expenses resulting from the
breach by the Trustee of the Trustee's own fiduciary duties with respect to the
Plan or the Trust or the Trustee's own negligence or willful misconduct.
XIV-5
XV.
Fiduciary Provisions
XV.1 Article Controls. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
XV.2 General Allocation of Fiduciary Duties. Each fiduciary with respect
to the Plan shall have only those specific powers, duties, responsibilities and
obligations as are specifically given him under the Plan. The Directors shall
have the sole authority to appoint and remove the Trustee. Except as otherwise
specifically provided herein, the Committee shall have the sole responsibility
for the administration of the Plan, which responsibility is specifically
described herein. Except as otherwise specifically provided herein, the Trustee
shall have the sole responsibility for the administration, investment, and
management of the assets held under the Plan. It is intended under the Plan that
each fiduciary shall be responsible for the proper exercise of his own powers,
duties, responsibilities, and obligations hereunder and shall not be responsible
for any act or failure to act of another fiduciary except to the extent provided
by law or as specifically provided herein.
XV.3 Fiduciary Duty. Each fiduciary under the Plan, including, but not
limited to, the Committee and the Trustee as "named fiduciaries," shall
discharge his duties and responsibilities with respect to the Plan:
(a) Solely in the interest of the Members, for the exclusive purpose
of providing benefits to Members and their beneficiaries and of defraying
reasonable expenses of administering the Plan;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims;
(c) By diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it is prudent not to do
so; and
(d) In accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with applicable
law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code or section 406 of the Act.
XV.4 Delegation and Allocation of Fiduciary Duties. The Committee may
appoint subcommittees, individuals, or any other agents as it deems advisable
and may delegate to any of such appointees any or all of the powers and duties
of the Committee. Such appointment and delegation must be in writing, specifying
the powers or duties being delegated, and must be accepted in writing by the
delegatee. Upon such appointment, delegation, and acceptance, the delegating
XV-1
Committee members shall have no liability for the acts or omissions of any such
delegatee, as long as the delegating Committee members do not violate any
fiduciary responsibility in making or continuing such delegation.
XV.5 Investment Manager. The Committee may, in its sole discretion,
appoint an "investment manager," with power to select any or all of the
Investment Funds available pursuant to Section 5.2 and/or with power to manage,
acquire, or dispose of any asset of the Plan and to direct the Trustee in this
regard, so long as:
(a) The investment manager is (1) registered as an investment
adviser under the Investment Advisers Act of 1940, (2) a bank, as defined in the
Investment Advisers Act of 1940, or (3) an insurance company qualified to do
business under the laws of more than one state; and
(b) Such investment manager acknowledges in writing that he is a
fiduciary with respect to the Plan.
Upon such appointment, the Committee shall not be liable for the acts of the
investment manager, as long as the Committee members do not violate any
fiduciary responsibility in making or continuing such appointment. The Trustee
shall follow the directions of such investment manager and shall not be liable
for the acts or omissions of such investment manager. The investment manager may
be removed by the Committee at any time and within its sole discretion.
XV-2
XVI.
Amendments
XVI.1 Right to Amend. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Directors may from time to time amend, in
whole or in part, any or all of the provisions of the Plan on behalf of the
Company and all Employers. Specifically, but not by way of limitation, the
Directors may make any amendment necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive.
XVI.2 Limitation on Amendments. No amendment of the Plan shall be made
that would vest in the Employer, directly or indirectly, any interest in or
control of the Trust Fund. No amendment shall be made that would vary the Plan's
exclusive purpose of providing benefits to Members and their beneficiaries and
of defraying reasonable expenses of administering the Plan or that would permit
the diversion of any part of the Trust Fund from that exclusive purpose. No
amendment shall be made that would reduce any then nonforfeitable interest of a
Member. No amendment shall increase the duties or responsibilities of the
Trustee unless the Trustee consents thereto in writing.
XVI-1
XVII.
Discontinuance of Contributions, Termination,
Partial Termination, and Merger or Consolidation
XVII.1 Right to Discontinue Contributions, Terminate, or Partially
Terminate. The Employer has established the Plan with the bona fide intention
and expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the Directors
realize that circumstances not now foreseen, or circumstances beyond its
control, may make it either impossible or inadvisable for the Employer to
continue to make its contributions to the Plan. Therefore, the Directors shall
have the power to discontinue contributions to the Plan, terminate the Plan, or
partially terminate the Plan at any time hereafter. Each member of the Committee
and the Trustee shall be notified of such discontinuance, termination, or
partial termination.
XVII.2 Procedure in the Event of Discontinuance of Contributions,
Termination, or Partial Termination.
(a) If the Plan is amended so as to permanently discontinue Employer
Contributions, or if Employer Contributions are in fact permanently
discontinued, the Vested Interest of each affected Member shall be 100%,
effective as of the date of discontinuance. In case of such discontinuance, the
Committee shall remain in existence and all other provisions of the Plan that
are necessary, in the opinion of the Committee, for equitable operation of the
Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the Vested
Interest of each affected Member shall be 100%, effective as of the termination
date or partial termination date, as applicable. Unless the Plan is otherwise
amended prior to dissolution of the Company, the Plan shall terminate as of the
date of dissolution of the Company.
(c) Upon discontinuance of contributions, termination, or partial
termination, any previously unallocated contributions, forfeitures, and net
income (or net loss) shall be allocated among the Accounts of the Members on
such date of discontinuance, termination, or partial termination according to
the provisions of Article IV. Thereafter, the net income (or net loss) shall
continue to be allocated to the Accounts of the Members until the balances of
the Accounts are distributed.
(d) In the case of a termination or partial termination of the Plan,
and in the absence of a Plan amendment to the contrary, the Trustee shall pay
the balance of the Accounts of a Member for whom the Plan is so terminated, or
who is affected by such partial termination, to such Member, subject to the time
of payment, form of payment, and consent provisions of Article X.
XVII.3 Merger, Consolidation, or Transfer. This Plan and Trust Fund may not
merge or consolidate with, or transfer its assets or liabilities to, any other
plan, unless immediately thereafter each Member would, in the event such other
plan terminated, be entitled to a benefit which is equal
XVII-1
to or greater than the benefit to which he would have been entitled if the Plan
were terminated immediately before the merger, consolidation, or transfer.
XVII-2
XVIII.
Participating Employers
XVIII.1 Participation and Designation of Other Employers.
(a) The Committee may designate any entity or organization
eligible by law to participate in the Plan and the Trust as an Employer by
written instrument delivered to the Secretary of the Company and the designated
Employer. Such written instrument shall specify the effective date of such
designated participation, may incorporate specific provisions relating to the
operation of the Plan which apply to the designated Employer only and shall
become, as to such designated Employer and its Employees, a part of the Plan.
(b) Each designated Employer and each Employer listed in Section
1.1(32) shall be conclusively presumed to have consented to its designation or
participation, as applicable, and to have agreed to be bound by the terms of the
Plan and any and all amendments thereto upon its submission of information to
the Committee required by the terms of or with respect to the Plan or upon
making a contribution to the Trust Fund pursuant to the terms of the Plan;
provided, however, that the terms of the Plan may be modified so as to increase
the obligations of an Employer only with the consent of such Employer, which
consent shall be conclusively presumed to have been given by such Employer upon
its submission of any information to the Committee required by the terms of or
with respect to the Plan or upon making a contribution to the Trust Fund
pursuant to the terms of the Plan following notice of such modification.
(c) The provisions of the Plan shall apply separately and equally
to each Employer and its Employees in the same manner as is expressly provided
for the Company and its Employees, except that the power to appoint or otherwise
affect the Committee or the Trustee and the power to amend or terminate the Plan
shall be exercised by the Directors alone.
(d) Transfer of employment among Employers shall not be considered
a termination of employment hereunder, and Service with one shall be considered
as Service with all others.
(e) Any Employer may, by appropriate action of its Board of
Directors or noncorporate counterpart that is communicated in writing to the
Secretary of the Company and to the Committee, terminate its participation in
the Plan and the Trust. Moreover, the Committee may, in its discretion,
terminate an Employer's Plan and Trust participation at any time by written
instrument delivered to the Secretary of the Company and the designated
Employer.
XVIII.2 Single Plan. For purposes of the Code and the Act, the Plan as
adopted by the Employers shall constitute a single plan rather than a separate
plan of each Employer. All assets in the Trust Fund shall be available to pay
benefits to all Members and their beneficiaries.
XVIII-1
XIX.
Miscellaneous Provisions
XIX.1 Not Contract of Employment. The adoption and maintenance of the Plan
shall not be deemed to be a contract between the Employer and any person or to
be consideration for the employment of any person. Nothing herein contained
shall be deemed to give any person the right to be retained in the employ of the
Employer or to restrict the right of the Employer to discharge any person at any
time nor shall the Plan be deemed to give the Employer the right to require any
person to remain in the employ of the Employer or to restrict any person's right
to terminate his employment at any time.
XIX.2 Alienation of Interest Forbidden. Except as otherwise provided with
respect to "qualified domestic relations orders" pursuant to section 206(d) of
the Act and sections 401(a)(13) and 414(p) of the Code and except as otherwise
provided under other applicable law, no right or interest of any kind in any
benefit shall be transferable or assignable by any Member or any beneficiary or
be subject to anticipation, adjustment, alienation, encumbrance, garnishment,
attachment, execution, or levy of any kind. Plan provisions to the contrary
notwithstanding, the Committee shall comply with the terms and provisions of any
"qualified domestic relations order," including an order that requires
distributions to an alternate payee prior to a Member's "earliest retirement
age" as such term is defined in section 206(d)(3)(E)(ii) of the Act and section
414(p)(4)(B) of the Code, and shall establish appropriate procedures to effect
the same.
XIX.3 Uniformed Services Employment and Reemployment Rights Act
Requirements. Notwithstanding any provision of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.
XIX.4 Corrective Contributions and Distributions. The Employer shall be
permitted to make corrective contributions and or distributions to Members and
former Members (including former Members who are no longer Employees)
(collectively, the "Covered Members") in order to comply with the terms of any
compliance statement (a "Compliance Statement") issued by the Internal Revenue
Service under the Voluntary Compliance Resolution Program applicable to the Plan
as a means of correcting any operational or other defect subject to the
Compliance Statement. The amount of such contributions and the manner of their
allocation among Covered Members shall be determined in accordance with the
provisions of the Compliance Statement.
XIX.5 Payments to Minors and Incompetents. If a Member or beneficiary
entitled to receive a benefit under the Plan is a minor or is determined by the
Committee in its discretion to be incompetent or is adjudged by a court of
competent jurisdiction to be legally incapable of giving valid receipt and
discharge for a benefit provided under the Plan, the Committee may pay such
benefit to the duly appointed guardian or conservator of such Member or
beneficiary for the account of such Member or beneficiary. If no guardian or
conservator has been appointed for such Member or beneficiary, the Committee may
pay such benefit to any third party who is determined by the
XIX-1
Committee, in its sole discretion, to be authorized to receive such benefit for
the account of such Member or beneficiary. Such payment shall operate as a full
discharge of all liabilities and obligations of the Committee, the Trustee, the
Employer, and any fiduciary of the Plan with respect to such benefit.
XIX.6 Member's Address. It shall be the affirmative duty of each Member to
inform the Committee of, and to keep on file with the Committee, his current
mailing address and the current mailing address of his designated beneficiary.
If a Member fails to keep the Committee informed of his current mailing address
and the current mailing address of his designated beneficiary, neither the
Committee, the Trustee, the Employer, nor any fiduciary under the Plan shall be
responsible for any late or lost payment of a benefit or for failure of any
notice to be provided timely under the terms of the Plan.
XIX.7 Severability. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
XIX.8 Jurisdiction. The situs of the Plan is Texas. Except to the extent
preempted by federal law, (a) the provisions of Article XIV shall be construed
in accordance with the laws of Illinois and (b) all other provisions of the Plan
shall be construed in accordance with the laws of Texas.
XIX-2
XX.
Top-Heavy Status
XX.1 Article Controls. Any Plan provisions to the contrary notwithstanding,
the provisions of this Article shall control to the extent required to cause the
Plan to comply with the requirements imposed under section 416 of the Code.
XX.2 Definitions. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) Account Balance: As of any Valuation Date, the aggregate amount
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Employer or a Controlled Entity (excluding
employee contributions that were deductible within the meaning of section 219 of
the Code and rollover or transfer contributions made after December 31, 1983, by
or on behalf of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or a Controlled Entity),
increased by (1) the aggregate distributions made to such individual from such
plan during a five-year period ending on the Determination Date and (2) the
amount of any contributions due as of the Determination Date immediately
following such Valuation Date.
(b) Accrued Benefit: As of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative accrued benefit
(excluding the portion thereof that is attributable to employee contributions
that were deductible pursuant to section 219 of the Code, to rollover or
transfer contributions made after December 31, 1983, by or on behalf of such
individual to such plan from another qualified plan sponsored by an entity other
than the Employer or a Controlled Entity, to proportional subsidies or to
ancillary benefits) of an individual under a qualified defined benefit plan
maintained by the Employer or a Controlled Entity increased by (1) the aggregate
distributions made to such individual from such plan during a five-year period
ending on the Determination Date and (2) the estimated benefit accrued by such
individual between such Valuation Date and the Determination Date immediately
following such Valuation Date. Solely for the purpose of determining top-heavy
status, the Accrued Benefit of an individual shall be determined under (1) the
method, if any, that uniformly applies for accrual purposes under all qualified
defined benefit plans maintained by the Employer and the Controlled Entities or
(2) if there is no such method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under section 411(b)(1)(C) of the Code.
(c) Aggregation Group: The group of qualified plans maintained by the
Employer and each Controlled Entity consisting of (1) each plan in which a Key
Employee participates and each other plan that enables a plan in which a Key
Employee participates to meet the requirements of section 401(a)(4) or 410 of
the Code or (2) each plan in which a Key Employee participates, each other plan
that enables a plan in which a Key Employee participates to meet the
requirements of section 401(a)(4) or 410 of the Code and any other
XX-1
plan that the Employer elects to include as a part of such group; provided,
however, that the Employer may elect to include a plan in such group only if the
group will continue to meet the requirements of sections 401(a)(4) and 410 of
the Code with such plan being taken into account.
(d) Assumptions: The interest rate and mortality assumptions specified
for top-heavy status determination purposes in any defined benefit plan included
in the Aggregation Group which includes the Plan.
(e) Determination Date: For the first Plan Year of any plan, the last
day of such Plan Year and for each subsequent Plan Year of such plan, the last
day of the preceding Plan Year.
(f) Key Employee: A "key employee" as defined in section 416(i) of the
Code and the Treasury regulations thereunder.
(g) Plan Year: With respect to any plan, the annual accounting period
used by such plan for annual reporting purposes.
(h) Remuneration: Compensation within the meaning of section 415(c)(3)
of the Code, as limited by section 401(a)(17) of the Code.
(i) Valuation Date: With respect to any Plan Year of any defined
contribution plan, the most recent date within the twelve-month period ending on
a Determination Date as of which the trust fund established under such plan was
valued and the net income (or loss) thereof allocated to participants' accounts.
With respect to any Plan Year of any defined benefit plan, the most recent date
within a twelve-month period ending on a Determination Date as of which the plan
assets were valued for purposes of computing plan costs for purposes of the
requirements imposed under section 412 of the Code.
XX.3 Top-Heavy Status.
XX-2
(a) The Plan shall be deemed to be top-heavy for a Plan Year if, as of
the Determination Date for such Plan Year, (1) the sum of Account Balances of
Members who are Key Employees exceeds 60% of the sum of Account Balances of all
Members unless an Aggregation Group including the Plan is not top-heavy or (2)
an Aggregation Group including the Plan is top-heavy. An Aggregation Group shall
be deemed to be top-heavy as of a Determination Date if the sum (computed in
accordance with section 416(g)(2)(B) of the Code and the Treasury regulations
promulgated thereunder) of (1) the Account Balances of Key Employees under all
defined contribution plans included in the Aggregation Group and (2) the Accrued
Benefits of Key Employees under all defined benefit plans included in the
Aggregation Group exceeds 60% of the sum of the Account Balances and the Accrued
Benefits of all individuals under such plans. Notwithstanding the foregoing, the
Account Balances and Accrued Benefits of individuals who are not Key Employees
in any Plan Year but who were Key Employees in any prior Plan Year shall not be
considered in determining the top-heavy status of the Plan for such Plan Year.
Further, notwithstanding the foregoing, the Account Balances and Accrued
Benefits of individuals who have not performed services for the Employer or any
Controlled Entity at any time during the five-year period ending on the
applicable Determination Date shall not be considered.
(b) If the Plan is determined to be top-heavy for a Plan Year, the Employer
shall contribute to the Plan for such Plan Year on behalf of each Member who is
not a Key Employee and who has not terminated his employment as of the last day
of such Plan Year an amount equal to:
(1) The lesser of (A) 3% of such Member's Remuneration for such Plan
Year or (B) a percent of such Member's Remuneration for such Plan Year
equal to the greatest percent determined by dividing for each Key Employee
the amounts allocated to such Key Employee's Before-Tax Account and
Employer Contribution Account for such Plan Year by such Key Employee's
Remuneration; reduced by
(2) The amount of the sum of Employer Profit Sharing Contributions and
Employer Discretionary Contributions allocated to such Member's Accounts
for such Plan Year.
The minimum contribution required to be made for a Plan Year pursuant to this
Paragraph for a Member employed on the last day of such Plan Year shall be made
regardless of whether such Member is otherwise ineligible to receive an
allocation of the Employer's contributions for such Plan Year. The minimum
contribution required to be made pursuant to this Paragraph shall also be made
for an Eligible Employee who is not a Key Employee and who is excluded from
participation in the Plan solely because of failing to make Before-Tax
Contributions. Notwithstanding the foregoing, if the Plan is deemed to be top-
heavy for a Plan Year, the Employer's contribution for such Plan Year pursuant
to this Paragraph shall be increased by substituting "4%" in lieu of "3%" in
Clause (1) hereof to the extent that the Directors determine to so increase such
contribution to comply with the provisions of section 416(h)(2) of the Code.
Notwithstanding the foregoing, no contribution shall be made pursuant to this
Paragraph for a Plan Year with respect to a Member who is a participant in
another defined contribution plan sponsored by the Employer or a Controlled
Entity if such Member receives under such other defined contribution plan (for
the plan year of such plan ending with or within the Plan Year of the Plan) a
contribution which is equal to or greater than the
XX-3
minimum contribution required by section 416(c)(2) of the Code. Notwithstanding
the foregoing, no contribution shall be made pursuant to this Paragraph for a
Plan Year with respect to a Member who is a participant in a defined benefit
plan sponsored by the Employer or a Controlled Entity if such Member accrues
under such defined benefit plan (for the plan year of such plan ending with or
within the Plan Year of this Plan) a benefit that is at least equal to the
benefit described in section 416(c)(1) of the Code. If the preceding sentence is
not applicable, the requirements of this Paragraph shall be met by providing a
minimum benefit under such defined benefit plan which, when considered with the
benefit provided under the Plan as an offset, is at least equal to the benefit
described in section 416(c)(1) of the Code.
XX.4 Termination of Top-Heavy Status. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined no longer to be top-heavy.
XX.5 Effect of Article. Notwithstanding anything contained herein to the
contrary, the provisions of this Article shall automatically become inoperative
and of no effect to the extent not required by the Code or the Act.
XX-4
EXECUTED this ____ day of December, 1997.
NGC CORPORATION
By:
-----------------------------
CG TRUST COMPANY, TRUSTEE
By:
-----------------------------
NGC PROFIT SHARING/401(K)
SAVINGS PLAN
APPENDIX A
WITHDRAWALS FROM TRIDENT ACCOUNTS.
---------------------------------
(a) A Member who is an Employee and who has made all available
withdrawals under Section 11.1(a) of the Plan, may withdraw any or all amounts
in his Trident Rollover Account.
(b) A Member who has attained age fifty-nine and one-half and who has
made all available withdrawals pursuant to Section 11.1(a) of the Plan and
Paragraph (a) above may withdraw from his Trident Before-Tax Account an amount
not exceeding the then value of such Account.
(c) A Member who is an Employee and who has made all available
withdrawals under Section 11.1(a) of the Plan and Paragraphs (a) and (b) above
may above may withdraw from his Trident Matching Account any or all amounts held
in such Account that have been so held for twenty-four months or more. A Member
(other than a Member who has attained age 59 1/2 at the time the withdrawal is
requested and who withdraws the entire balance of his Trident Before-Tax Account
and his Trident Matching Account) who makes a withdrawal under this Paragraph
may not make Before-Tax Contributions to the Plan for a period of six months
following the date of such withdrawal.
(d) Not more than one withdrawal pursuant to the provisions of this
Appendix A shall be made in any twelve month period; provided, however, that
withdrawals may be made under Paragraphs (a), (b), and (c) above, in accordance
with the ordering rules therein, simultaneously.
(e) Except as provided in Paragraphs (b) and (d) above, all
withdrawals pursuant to the provisions of this Appendix A shall be subject to
the restrictions provided in Section 11.2 of the Plan.
A-1
NGC PROFIT SHARING/401(K)
SAVINGS PLAN
APPENDIX B
WITHDRAWALS FROM DESTEC ACCOUNTS.
--------------------------------
(a) A Member who has attained age fifty-nine and one-half may withdraw
from his Destec Before-Tax Account an amount not exceeding the then value of
such Account. A withdrawal by a Member pursuant to the provisions of this
Paragraph may not be for an amount less than $1,000.00.
(b) A Member may withdraw his entire Destec Before-Tax Account upon:
(1) the termination of the Plan without the establishment or
maintenance of another defined contribution plan (other than an employee
stock ownership plan as defined in section 4975(e)(7) of the Code);
(2) the disposition, to an entity which is not a Controlled
Entity, of substantially all of the assets used by the Employer in the
trade or business in which the Member continues employment, following which
the Employer continues to maintain the Plan; or
(3) the disposition, to an entity which is not a Controlled
Entity, of the Employer's interest in a subsidiary in which the Member
continues employment, following which the Employer continues to maintain
the Plan;
provided that any such withdrawal shall constitute a lump sum distribution of
the balance to the Member's credit in his Destec Before-Tax Account under
section 402(d)(4) of the Code (without regard to clauses (i), (ii), (iii), and
(iv) of section 402(d)(4)(A) of the Code or to sections 402(d)(4)(B) and (F) of
the Code).
(c) A Member who terminated employment with the Employer after
attaining age fifty, the occurrence of whose Annuity Starting Date is not
prohibited by Section 10.1(e) of the Plan, may withdraw from his Destec Accounts
an amount not exceeding the then value of such Accounts. An eligible Member may
make no more than one withdrawal pursuant to the provisions of this Paragraph in
any Plan Year.
(d) Except as provided in Paragraph (c) above, all withdrawals
pursuant to the provisions of this Appendix B shall be subject to the
restrictions provided in Section 11.2 of the Plan.
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NGC PROFIT SHARING/401(K)
SAVINGS PLAN
APPENDIX C
1. INVESTMENT OF DOW ESOP ACCOUNT.
(a) General Rule. Except as otherwise provided in subsection (b), the
Members' Dow ESOP Accounts shall be invested primarily in Dow Stock.
(b) Diversification of Investment. A Member may from time to time
designate that his existing Dow ESOP Account balance be reinvested, in the same
manner, and subject to the same restrictions, as applicable to the reinvestment
of other Accounts under Section 5.2; provided, however, that at least three (3)
Investment Funds, not inconsistent with the Treasury regulations under section
401(a)(28)(B)(ii)(II) of the Code, shall be available for such purpose; provided
further, that the amount so reinvested shall be transferred from the Member's
Dow ESOP Account to his Dow Transfer Account.
(c) Voting Rights. A Member or beneficiary shall be entitled to direct
the Trustee as to the manner in which any rights, including, but not limited to,
voting rights, are to be exercised with respect to the whole shares of Dow Stock
allocated to such Member's Dow ESOP Account, if such Dow Stock is part of a
registration-type class of securities as defined in section 409(e)(4) of the
Code. To the extent permitted by section 404(a) of the Act, fractional shares
from all such Accounts shall be combined and voted by the Trustee on each issue
in the same ratio as the allocated shares are voted. Unless otherwise required
by applicable law, the Trustee shall not exercise voting rights with respect to
Dow Stock allocated to a Member's Dow ESOP Account which such Member fails to
exercise. At the time of mailing the notice for each shareholder's meeting, the
Company shall furnish each such Member or beneficiary with proxy solicitation
material and any other information which the issuer of the Dow Stock distributes
to shareholders regarding the exercise of voting or other rights, together with
a voting instruction form to be returned by the Member or beneficiary to the
Trustee. If the Dow ESOP Accounts are not invested in a registration-type class
of securities as defined in section 409(e)(4) of the Code, a Member or
beneficiary shall be entitled to direct the Trustee as to the manner in which
voting rights will be exercised with respect to any corporate matter which
involves the voting of such shares allocated to the Member's Dow ESOP Account
with respect to the approval or disapproval or any corporate merger or
consolidation, recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business, or such similar
transaction as may be prescribed in Treasury regulations under section 409(e) of
the Code.
2. DIVIDENDS ON DOW STOCK. All dividends paid with respect to Dow Stock
held by the Trust shall be credited to Members' Dow ESOP Accounts and shall be
reinvested as soon as practicable in Dow Stock.
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3. DOW ESOP ACCOUNT VALUATION. If and to the extent that the Dow ESOP
Accounts are invested in securities which are not readily tradable on an
established securities market, the valuation thereof for purposes of the Plan
shall be made by an independent appraiser meeting requirements similar to those
contained in Treasury regulations under section 170(a)(1) of the Code.
4. WITHDRAWALS FROM DOW ESOP ACCOUNT. A Member who is an Employee may
withdraw all or a portion of his Dow ESOP Account, in integral multiples of 10%
of the value of such Account. All withdrawals pursuant to the provisions of this
paragraph shall be made in accordance with the procedures established from time
to time by the Committee. Payment of the withdrawal shall be made as soon as
administratively feasible after the date a Member completes such procedures and
shall be made in Dow Stock unless such Member elects to have all or a portion of
such payment made in cash.
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