Exhibit 10.25
CHICAGO BRIDGE & IRON SAVINGS PLAN
As amended and restated as of January 1, 1997
and including the First, Second, Third, Fourth and Fifth Amendments
TABLE OF CONTENTS
ARTICLE I Adoption................................................... 1
1.01 Adoption, Amendment and Restatement....................... 1
ARTICLE II Definitions............................................... 1
2.01 "Account"................................................. 1
2.02 "Accrued Benefit"......................................... 1
2.03 "Active Account".......................................... 1
2.04 "Active Participant"...................................... 2
2.05 "Authorized Leave of Absence"............................. 2
2.06 "Beneficiary"............................................. 2
2.07 "Board"................................................... 2
2.08 "Code".................................................... 2
2.09 "Company"................................................. 3
2.10 "Company Contributions"................................... 3
2.11 "Company Stock"........................................... 3
2.12 "Company Stock Fund"...................................... 3
2.13 "Compensation"............................................ 3
2.14 "Compensation Limit"...................................... 4
2.15 "Disability" or "Disabled"................................ 5
2.16 "Dollar Limit"............................................ 5
2.17 "Effective Date".......................................... 5
2.18 "Elective Deferrals"...................................... 5
2.19 "Eligible Employee"....................................... 5
2.20 "Employee"................................................ 6
2.21 "Employer" or "Employers"................................. 6
2.22 "Employer Stock".......................................... 6
2.23 "ERISA"................................................... 6
2.24 "Field Employee".......................................... 6
2.25 "Forfeiture".............................................. 6
2.26 "Former Plan"............................................. 6
2.27 "Hardship"................................................ 6
2.28 "Highly Compensated Employee"............................. 7
2.29 "Hour of Service"......................................... 8
2.30 "Hourly Plan"............................................. 9
2.31 "Inactive Account"........................................ 9
2.32 "Investment Committee".................................... 9
2.33 "Investment Fund"......................................... 9
2.34 "Investment Manager"...................................... 9
2.35 "Matching Contributions".................................. 9
2.36 "Maternity or Paternity Leave"............................ 10
2.37 "Normal Retirement Date".................................. 10
2.38 "Participant"............................................. 10
2.39 "Period of Severance"..................................... 10
2.40 "Plan".................................................... 10
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2.41 "Plan Administrator"...................................... 10
2.42 "Plan Year"............................................... 10
2.43 "QMAC".................................................... 10
2.44 "Qualified Military Leave"................................ 10
2.45 "QNEC".................................................... 10
2.46 "Reduction-in-Force Termination".......................... 10
2.47 "Related Company"......................................... 11
2.48 "Related Plan"............................................ 11
2.49 "Required Distribution Date".............................. 11
2.50 "Restricted Account"...................................... 12
2.51 "Retirement".............................................. 11
2.52 "Rollover Contribution"................................... 11
2.53 "Salary Reduction Agreement".............................. 12
2.54 "Service"................................................. 12
2.55 "Termination of Employment"............................... 12
2.56 "Transferor Plan"......................................... 13
2.57 "Traveler"................................................ 13
2.58 "Traveler Contributions".................................. 13
2.59 "True-Up Contributions"................................... 13
2.60 "Trust"................................................... 13
2.61 "Trust Agreement"......................................... 13
2.62 "Trust Fund".............................................. 13
2.63 "Trustee"................................................. 14
2.64 "Valuation Date".......................................... 13
ARTICLE III Participation............................................ 13
3.01 Participation............................................. 13
3.02 Duration of Participation................................. 14
3.03 Participation Upon Re-Employment.......................... 14
3.04 Participation Forms....................................... 14
ARTICLE IV Contributions and Vesting................................. 14
4.01 Elective Deferrals........................................ 14
4.02 Matching Contributions.................................... 16
4.03 Company Contributions..................................... 17
4.04 Traveler Contributions.................................... 17
4.05 Rollover Contributions into the Plan...................... 18
4.05 Eligible Employee......................................... 18
4.06 Special Contributions; QNECs and QMACs.................... 18
4.07 Crediting of Contributions................................ 20
4.08 Determination and Amount of Employer Contributions........ 20
4.09 Condition on Company Contributions........................ 20
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TABLE OF CONTENTS
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4.10 Form of Company Contributions............................. 20
4.11 Vesting................................................... 21
4.12 Catch-Up Deferrals........................................ 22
ARTICLE V Limitations on Contributions............................... 23
5.01 Excess Deferrals.......................................... 23
5.02 Excess Contributions...................................... 24
5.03 Excess Aggregate Contributions............................ 27
5.04 Multiple Use of Sections 5.02 and 5.03.................... 29
5.05 Order of Application of Limitations....................... 32
5.06 Allocation of Income or Loss.............................. 32
5.07 Section 415 Limitation on Contributions................... 32
ARTICLE VI Trustee and Trust Fund.................................... 35
6.01 Trust Agreement........................................... 35
6.02 Selection of Trustee...................................... 35
6.03 Plan and Trust Expenses................................... 35
6.04 Trust Fund................................................ 35
6.05 Separate Accounts......................................... 35
6.06 Investment Committee...................................... 36
6.07 Investment Funds.......................................... 36
6.08 Investment of Participants' Accounts...................... 37
6.09 Shareholder Rights in Company Stock....................... 38
6.10 Trust Income.............................................. 39
6.11 Correction of Error....................................... 39
6.12 Right of the Employers to Trust Assets.................... 39
ARTICLE VII Loans and Withdrawals.................................... 40
7.01 Participant Withdrawals................................... 40
7.02 Participant Loans......................................... 41
7.03 Request for Distribution.................................. 44
ARTICLE VIII Benefits................................................ 44
8.01 Payment of Benefits in General............................ 44
8.02 Payment on Termination of Employment...................... 44
8.03 Time of Payment........................................... 45
8.04 Lump Sum Payment Without Election......................... 45
8.05 Payment Upon Death........................................ 46
8.06 Minimum Distribution Requirements......................... 48
8.07 Facility of Payment....................................... 49
8.08 Form of Payment........................................... 49
8.09 Direct Rollover to Another Plan........................... 49
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TABLE OF CONTENTS
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8.10 Deduction of Taxes from Amounts Payable................... 50
ARTICLE IX Administration............................................ 51
9.01 Sponsor Rights and Duties................................. 51
9.02 Plan Administrator Rights and Duties...................... 51
9.03 Plan Administrator Bonding and Expenses................... 52
9.04 Information To Be Supplied by Participants................ 52
9.05 Information To Be Supplied by Employers................... 52
9.06 Records................................................... 52
9.07 Electronic Media.......................................... 52
9.08 Plan Administrator Decisions Final........................ 53
ARTICLE X Claims Procedure........................................... 53
10.01 Initial Claim for Benefits................................ 53
10.02 Review of Claim Denial.................................... 53
ARTICLE XI Amendment, Merger and Termination of the Plan............. 54
11.01 Amendments................................................ 54
11.02 Plan Merger............................................... 55
11.03 Plan Termination.......................................... 55
11.04 Payment Upon Termination.................................. 55
11.05 Withdrawal from the Plan by an Employer................... 56
ARTICLE XII Top Heavy Provisions..................................... 56
12.01 Application............................................... 56
12.02 Special Top Heavy Definitions............................. 56
12.03 Special Top Heavy Provisions.............................. 62
ARTICLE XIII Miscellaneous Provisions................................ 65
13.01 Employer Joinder.......................................... 65
13.02 Non-Alienation of Benefits................................ 65
13.03 Qualified Domestic Relations Order........................ 65
13.04 Unclaimed Amounts......................................... 67
13.05 No Contract of Employment................................. 67
13.06 Recoupment of or Reduction for Overpayment................ 67
13.07 Employees' Trust.......................................... 67
13.08 Source of Benefits........................................ 67
13.09 Interest of Participants.................................. 68
13.10 Indemnification........................................... 68
13.11 Company Action............................................ 68
13.12 Company Merger............................................ 68
13.13 Multiple Capacity......................................... 68
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TABLE OF CONTENTS
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13.14 Gender and Number........................................... 68
13.15 Headings.................................................... 68
13.16 Uniform and Non-Discriminatory Application of Provisions.... 68
13.17 Invalidity of Certain Provisions............................ 68
13.18 Application to Merged Plans................................. 69
13.19 Law Governing............................................... 69
APPENDIX A
SCHEDULE 1
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Exhibit 10.25
CHICAGO BRIDGE & IRON SAVINGS PLAN
Article I
Adoption
1.01 Adoption, Amendment and Restatement. The Chicago Bridge & Iron
Savings Plan was originally established by the Company's corporate predecessor
effective June 16, 1964. Chicago Bridge & Iron Company, a Delaware corporation,
became the sponsor of the Plan effective March 18, 1997. The Company merges the
CBI Hourly Employees' Saving Plan into this Plan and amends and restates the
Plan effective January 1, 1997 (except as otherwise provided in this document)
to read as set forth in this document. The Company merges the Howe-Baker
Engineers, Inc. Employees' Profit-Sharing 401(k) Plan, the Matrix Engineering,
Inc. Savings Plan, the A&B Builders, Inc. Savings Plan, and the Callidus
Technologies 401(k) Savings Plan, into this Plan effective December 31, 2000.
The Plan is intended to be a qualified profit sharing plan described in Section
401(a) of the Code with a qualified cash or deferred arrangement described in
Section 401(k) of the Code.
Article II
Definitions
The following terms, whenever used in the following capitalized form,
shall have the meaning set forth below, unless the context clearly indicates
otherwise:
2.01 "Account" means an Active Account or an Inactive Account, each
comprising a record of a Participant's undivided share in the Trust plus income
and gains thereon, and less expenses, losses and distributions therefrom: The
Plan Administrator may maintain (or cause the Trustee to maintain) such
subaccounts within any Account as the Plan Administrator deems necessary or
desirable for purposes of this Plan. If assets and liabilities of a Transferor
Plan or portion thereof are transferred to this Plan pursuant to Section 11.02,
the Plan Administrator may establish additional Inactive Accounts for such
assets and liabilities, or may allocate such assets and liabilities to an
existing Active or Inactive Account, all as the Plan Administrator in its
discretion determines is necessary or desirable for the purposes of this Plan.
2.02 "Accrued Benefit" means a Participant's total interest in the Trust
composed of the aggregate balance of all such Participant's Accounts. The value
of an Accrued Benefit at any time during any Plan Year shall be its value as
adjusted on the coinciding or immediately preceding Valuation Date.
2.03 "Active Account" means any one or more of the following five (5)
separate Accounts to which Elective Deferrals, Company Matching Contributions,
Company Contributions, Travelers Contributions, and Rollover Contributions, if
any, may currently be allocated:
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Exhibit 10.25
(a) "Employee 401(k) Account" credited with Elective Deferrals made
in accordance with Section 4.01.
(b) "Company Matching Account" credited with Matching Contributions
made in accordance with Section 4.02.
(c) "Company Contribution Account" credited with Company
Contributions, if any, made in accordance with Section 4.03. Effective
January 1, 2001, Company Matching Accounts for pre-2001 Matching
Contributions shall become Inactive Accounts, and new Company Matching
Accounts shall be established as of January 1, 2001.
(d) "Travelers Benefit Account" credited for Plan Years ending on or
before December 30, 2000, with Traveler Contributions, if any, made in
accordance with Section 4.04. Effective January 1, 2001, Travelers Benefit
Accounts shall be maintained as Inactive Accounts.
(e) "Prior Plan and Rollovers Account" credited with Rollover
Contributions, if any, made in accordance with Section 4.05.
2.04 "Active Participant" for a Plan Year means a Participant who is
employed by an Employer as an Eligible Employee for any portion of the Plan
Year; provided, however that (i) for purposes of making Elective Deferrals under
Section 4.01, a Participant will not be an Active Participant for a Plan Year
unless he or she has Compensation in the Plan Year; (ii) for purposes of Company
Contributions under Section 4.03, Traveler Contributions under Section
4.04(a)(ii), and any minimum contributions required under Article XII, a
Participant will not be an Active Participant for the Plan Year unless he or she
is an Employee on the last day of the Plan Year or had a Termination of
Employment during the Plan Year by reason of Retirement, Disability, death, a
Reduction-in-Force Termination or lay-off; and (iii) for purposes of Company
Contributions under Section 4.03, a Participant will not be Active Participant
for the Plan Year unless he or she has completed 1,000 or more Hours of Service
during the Plan Year, or had a Termination of Employment during the Plan Year by
reason of Retirement, Disability, death, or a Reduction-in-Force Termination.
2.05 "Authorized Leave of Absence" means an absence with or without pay,
authorized by an Employer on a non-discriminatory basis, for Disability,
accident, jury duty, military duty, or other reasons.
2.06 "Beneficiary" means any person affirmatively designated by a
Participant pursuant to Section 8.05(c) to receive death benefits under the Plan
(a "Designated Beneficiary") or if there is no Designated Beneficiary or the
designation is ineffective under Section 8.05, the person or persons entitled to
receive death benefits under the Plan by default under Section 8.05.
2.07 "Board" means the board of directors of the Company.
2.08 "Code" means the Internal Revenue Code of 1986, as amended, or any
succeeding Internal Revenue Code. References to sections of the Code shall be
include any such sections as amended, modified or renumbered.
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2.09 "Company" means (a) before March 18, 1997, Chi Bridge Holdings, Inc.,
a Delaware corporation, and (b) on and after March 18, 1997, Chicago Bridge &
Iron Company, a Delaware corporation, a wholly-owned subsidiary of Chicago
Bridge & Iron Company N.V., a Netherlands corporation; or any successor
corporation, by merger, consolidation, purchase or otherwise, which elects to
adopt the Plan and the Trust.
2.10 "Company Contributions" means the contributions made from time to
time by an Employer to the Trustee in accordance with Section 4.03.
2.11 "Company Stock" means the publicly traded common shares of the
Company's parent corporation, Chicago Bridge & Iron Company N.V., a Netherlands
corporation.
2.12 "Company Stock Fund" means an Investment Fund designated for
investment in Company Stock. Up to 100% of the assets of the Company Stock Fund
may be invested in Company Stock.
2.13 "Compensation" means the amounts below:
(a) Compensation. Except as provided in subsection (b), Compensation
means the total cash salary and wages paid by an Employer through the U.S.
payroll system of an Employer to a Participant while an Eligible Employee,
(i) including short-term disability payments made directly from the assets
of the Employer, overtime, and cash bonuses under any annual or other
short term incentive pay or bonus plan, (ii) excluding long-term
incentives, stock options, restricted stock, similar non-cash benefits,
and contributions or benefits under any employee benefit plan, (iii)
increased by the amount of any Elective Deferrals under this Plan and any
other elective contributions or deferrals made by an Employer on behalf of
an Employee that are excluded from the Participant's income by Section
125, Section 132(f), Section 402(e)(3), Section 402(h)(1)(B), Section
403(b), Section 408(p)(2)(A)(i) or Section 457 of the Code; and (iv)
excluding all compensation in excess of the Compensation Limit.
(b) Statutory Compensation. For purposes of applying the limitations
of Article V (including the identification of Highly Compensated
Employees), and applying the requirements of Article XII (including the
identification of Key Employees), subject to the exceptions below,
Statutory Compensation means compensation as defined for purposes of
Section 415(c)(3) and Treasury Regulations Sections 1.415-2(d)(11)(i)
thereunder, including wages within the meaning of Section 3401(a) of the
Code and all other payments of compensation to an employee by his employer
(in the course of the employer's trade or business) for which the employer
is required to furnish the employee a written statement under sections
6041(d), 6051(a)(3), and 6052 of the Code, determined without regard to
any rules under section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in section
3401(a)(2). Notwithstanding the foregoing:
(1) For purposes of the identification of Highly Compensated
Employees under Section 2.28 for Plan Years beginning before January
1, 1998,
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Statutory Compensation means compensation as defined for purposes of
Section 415(c)(3) of the Code and Treasury Regulations Sections
1.415-2(d)(2), (3) and (10) thereunder, (i) including wages,
salaries, fees for professional services, and other amounts received
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with
the Employer or any Related Company to the extent that the amounts
are included in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan), but (ii) excluding
contributions of the Employer or a Related Company to (unless
includible in the gross income of the Employee for the taxable year
when contributed), or distributions from, a plan of deferred
compensation (other than an unfunded nonqualified plan), amounts
realized from the exercise of a non-qualified stock option or when
restricted stock (or property) held by an Employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture (as determined under Section 83 of the Code), amounts
realized from the sale, exchange or other disposition of stock
acquired under an incentive stock option, and other amounts which
receive special tax benefits.
(2) In applying Statutory Compensation for purposes of
determining whether an Employee is a Highly Compensated Employee
under Section 2.28 or a Key Employee under Section 12.02(d), for
purposes of determining the Actual Deferral Percentage under Section
5.02 and the Actual Contribution Percentage under Section 5.03, and
for purposes of determining for Plan Years beginning on or after
January 1, 1998 the limitations under Section 5.07 and Minimum
Employer Contributions under Section 12.03(a), Statutory
Compensation under this subsection shall be increased by the amount
of Elective Deferrals under this Plan and any other elective
contributions or deferrals made by an Employer or Related Company on
behalf of an Employee that excluded from the Participant's income by
Section 125, Section 132(f), Section 402(e)(3), Section
402(h)(1)(B), Section 403(b), Section 408(p)(2)(A)(i) or Section 457
of the Code.
(3) Except for purposes of determining Highly Compensated
Employees under Section 2.28, Key Employees under Section 12.02(d),
and the limitations under Section 5.07, Statutory Compensation will
not exceed the Compensation Limit.
2.14 "Compensation Limit" means $200,000 (for 2002), as adjusted for
increases in the cost-of-living in accordance with Section 401(a)(17)(B) of the
Code. The cost-of-living adjustment in effect for a calendar year applies to any
determination period beginning in such calendar year. If a determination period
consists of fewer than 12 months, the annual Compensation Limit is an amount
equal to the otherwise applicable annual Compensation Limit multiplied by a
fraction, the numerator of which is the number of months in the short
determination period, and the denominator of which is 12.
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2.15 "Disability" or "Disabled" means a Participant's inability to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or to last
for a continuous or indefinite period of at least twelve (12) months, and which
is substantiated by proof of disability satisfactory to the Plan Administrator
(which proof shall include a written statement of licensed physician or other
appropriate medical care provider appointed or approved by the Employer).
2.16 "Dollar Limit" has the meaning defined for such term in Section 5.01.
2.17 "Effective Date" means January 1, 1997, the effective date of this
amendment and restatement. The original effective date of the Plan was June 16,
1964.
2.18 "Elective Deferrals" means the contributions made by an Employer to
the Trustee on behalf of an Active Participant attributable to reductions in the
Participant's Compensation pursuant to a Salary Reduction Agreement in
accordance with Section 4.01.
2.19 "Eligible Employee" means any Employee who is employed by an Employer
and paid through the U.S. payroll system of the Employer, including an Employee
transferred from the United States to work outside the United States but
retained on the U.S. payroll system of the Employer, but excluding:
(a) Union Employees. Any Employee who is a member of a collective
bargaining unit of employees represented by a collective bargaining agent
with which an Employer or a Related Company has a bargaining agreement,
unless that agreement requires inclusion of the Employee in this Plan.
(b) Nonresident Aliens. Any Employee who (i) is neither a citizen
nor resident of the United States or is first employed by an Employer or
Related Company outside the United States, and (ii) receives no earned
income (within the meaning at Section 911(d)(2) of the Code) from the
Employer or a Related Company from sources within the United States
(within the meaning of Section 861(a)(3) of the Code).
(c) Leased Employees. Any individual who is classified by the
Employer at the relevant time as a Leased Employee (defined below), even
if such person is subsequently determined to be, or to have been, a
common-law employee of an Employer. For this purpose "Leased Employee"
means a person who is not an employee of a recipient and who provides
services to the recipient if:
(1) such services are provided pursuant to an agreement
between the recipient and any other person,
(2) such person has performed such services for the recipient
(or for the recipient and related persons) on a substantially
full-time basis for a period of a least 1 year, and
(3) such services are performed under the primary direction
and control of the recipient.
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(d) Independent Contractors. Any individual who is classified by the
Employer at the relevant time as an independent contractor, even if such
person is subsequently determined to be, or to have been, a common-law
employee of an Employer.
(e) Field Employees. For Plan Years ending on or before December 31,
2000, any Field Employee who at the relevant time has not yet qualified as
a Traveler.
(f) Part-Time and Temporary Workers. Any Employee who is not
classified by the Employer at the relevant time as either a regular
full-time or regular part-time employee. For this purpose an eligible
"regular part-time employee" must have a normal scheduled work week of at
least 20 Hours of Service or actually perform more than 1,000 Hours of
Service in the 12-month period measured from the date he or she first
performs an Hour of Service or in any Plan Year ending after that date. A
temporary or summer employee shall not be an Eligible Employee.
2.20 "Employee" means any common law employee of an Employer or a Related
Company, and any leased employee (within the meaning of Section 414(n)(2) of the
Code) of an Employer or any Related Company.
2.21 "Employer" or "Employers" means the Company and any Related Company
which has adopted the Plan pursuant to Section 13.01.
2.22 "Employer Stock" means Company Stock, and stock of a Participant's
former employer accumulated in an account for the Participant under a Transferor
Plan that is maintained as an Inactive Account under this Plan.
2.23 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
2.24 "Field Employee" means an employee of an Employer or a Related
Company, who is paid on an hourly basis from the "field payroll", and whose
duties consist of transient construction or related services performed on-site
in the field and not at a permanent office, manufacturing or warehouse facility
of the Employer or a Related Company.
2.25 "Forfeiture" means the portion of a Participant's Accrued Benefit
that is forfeited as provided in Sections 4.10, 5.01, 5.02(c), or 13.04.
2.26 "Former Plan" means this Plan, then known as the CBI 401(k) Pay
Deferral Plan, as in effect immediately before the Effective Date of this
amendment and restatement, and including, to the extent relevant for
administering this Plan, the Hourly Plan.
2.27 "Hardship" means an immediate and heavy financial need of the
Participant on account of:
(a) Medical Expenses. Expenses for medical care described in Section
213(d) of the Code previously incurred by the Participant, the
Participant's spouse or any dependents of the Participant (as defined in
Section 152 of the Code) or amounts
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necessary for these persons to obtain medical care described in Section
213(d) of the Code.
(b) Home Purchase. Costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments).
(c) Educational Expenses. Payment of tuition, related educational
fees and room and board expenses for the next 12 months of post-secondary
education for the Participant, his or her spouse, children or dependents
(as defined in Section 152 of the Code).
(d) Prevention of Eviction or Foreclosure. Payments necessary to
prevent the eviction of the Participant from his or her principal
residence or foreclosure on the mortgage of the Participant's principal
residence.
(e) Other Deemed Hardship Events Designated by the Internal Revenue
Service. Such other events, if any, that are designated by the Internal
Revenue Service as constituting deemed immediate and heavy financial needs
in regulations, revenue rulings, notices, or other documents of general
applicability.
2.28 "Highly Compensated Employee" means, for any Plan Year, any
individual who is an Employee described in subsection (a) or (b) below, or who
is a former Employee described in subsection (c) below:
(a) An Employee who at any time during the current Plan Year or the
preceding Plan Year is a more than five percent (5%) owner (or is
considered as owning more than five percent (5%) within the meaning of
Section 318 of the Code) of the Employer or a Related Company ("5%
Owner").
(b) An Employee who received Statutory Compensation during the
preceding Plan Year in excess of $80,000 (as adjusted in accordance with
regulations and rulings under Section 414(q) of the Code), and is in the
group consisting of the top twenty percent (20%) of the total number of
persons employed by the Employer and Related Companies when ranked on the
basis of Statutory Compensation paid during the preceding Plan Year,
provided, however, that, for purposes of determining the total number of
persons employed by the Employer and Related Companies, the following
Employees shall be excluded:
(i) Employees who have not completed an aggregate of six (6)
months of service during the preceding Plan Year,
(ii) Employees who work less than seventeen and one-half
(17-1/2) hours per week for 50% or more of the total weeks worked by
such employees during the preceding Plan Year,
(iii) Employees who normally work during not more than six (6)
months during any year,
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(iv) Employees who have not attained age twenty-one (21) by
the end of the preceding Plan Year,
(v) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer or Related Companies which constitutes income
during the preceding Plan Year from sources within the United States
(within the meaning of Section 861(a)(3) of the Code), and
(vi) Except to the extent provided in regulations prescribed
by the Secretary of the Treasury, Employees who are members of a
collective bargaining unit represented by a collective bargaining
agent with which an Employer or Related Company has or has had a
bargaining agreement.
(c) A former Employee of an Employer or any Related Company if such
former Employee was a Highly Compensated Employee at the time he or she
had a Termination of Employment, or at any time after he or she attains
age 55. For purposes of this subsection, (i) an Employee who performs no
services for the Employer or a Related Company during a Plan Year (for
example, an Employee who is on an Authorized Leave of Absence throughout
the Plan Year) shall be treated as having had a Termination of Employment
in the Plan Year in which he last performed services for the Employer or a
Related Company and (ii) an Employee who performs services for the
Employer or a Related Company during a Plan Year shall nevertheless be
deemed to have had a Termination of Employment (solely for purposes of
determining whether such Employee is a Highly Compensated Employee for any
period after he or she has an actual Termination of Employment) if (1) in
a Plan Year prior to his or her attainment of age 55, the Employee
receives Statutory Compensation in an amount less than 50% of his or her
average annual Statutory Compensation for the three consecutive calendar
years preceding such Plan Year during which his or her Statutory
Compensation was the greatest (or the total period of the Employee's
service with the Employer and Related Companies, if less), and (2) after
such Plan Year in which the Employee is deemed to have had a Termination
of Employment and before the Plan Year in which the Employee has an actual
Termination of Employment, the Employee's services for and Compensation
from the Employer and Related Companies do not increase significantly.
2.29 "Hour of Service" means each hour for which an Employee is paid, or
entitled to payment, by an Employer or a Related Company:
(a) for the performance of duties;
(b) on account of a period of time during which no duties were
performed; provided, however, that (i) no more than 501 Hours of Service
shall be credited for any single continuous period during which an
Employee performs no duties, and (ii) no Hours of Service shall be
credited for payments made or due under a plan maintained solely for the
purpose of complying with applicable workers' compensation, unemployment
compensation or disability insurance laws, or for reimbursement of medical
expenses; and
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(c) for which back pay, irrespective of mitigation of damages, is
awarded or agreed to by the Employer or Related Company; provided,
however, that (i) no more than 501 Hours of Service shall be credited for
any single continuous period of time during which the Employee did not or
would not have performed duties, and (ii) Hours of Service credited under
(a) or (b) shall not also be credited under (c).
The determination of Hours of Service for reasons other than the performance of
duties shall be determined in accordance with the provisions of Labor Department
Regulations Section 2530.200b-2(b), and Hours of Service shall be credited to
computation periods in accordance with the provisions of Labor Department
Regulations Section 2530.200b-2(c).
2.30 "Hourly Plan" means the CBI Hourly Employees' Savings Plan as in
effect immediately prior to the Effective Date.
2.31 "Inactive Account" means an separate Account maintained under this
Plan (including any account transferred from a Transferor Plan) to which no
further Elective Deferrals, Matching Contributions, Company Contributions,
Travelers Contributions or Rollover Contributions are currently allocated, but
which the Plan Administrator in its discretion maintains as a separate Account
to reflect any special vesting schedule applicable to the Account, any special
distribution options required or permitted for such Account, and any other
special benefits, rights or features pertaining to such Account. Schedule 1 sets
forth the Accounts, including Inactive Accounts (and their vesting schedules,
special distribution options, and other salient benefits, rights and features)
maintained under this Plan from time to time.
2.32 "Investment Committee" means the committee appointed by the Company
pursuant to Section 6.06 to act on behalf of the Company with respect to the
investment of Plan assets.
2.33 "Investment Fund" means each pooled or commingled investment fund or
investment arrangement designated or authorized by the Investment Committee
pursuant to Section 6.07 from among (i) regulated investment companies
registered under the Investment Company Act of 1940; (ii) common trust funds or
collective investment funds qualified under Sections 401 and 501 of the Code;
(iii) a discount brokerage account provided by a brokerage firm that is a member
of NASD/SIPC designated or authorized by the Investment Committee to provide
individually directed accounts for purposes of this Plan; (iv) any other funding
vehicle (including, but not limited to, a limited partnership); (v) the Company
Stock Fund; (vi) any other fund for the holding of other Employer Stock
maintained in connection with an Inactive Account transferred from a Transferor
Plan, and (vii) for former participants in the Hourly Plan, guaranteed
investment contracts issued by Principal Mutual Life Insurance Company. Solely
for the purpose of segregating notes representing loans to a Participant under
Section 7.02, the Trustee and Plan Administrator shall hold such notes as a
separate Investment Fund pursuant to Section 7.02(f).
2.34 "Investment Manager" means a person who has acknowledged in writing
that he, she or it is a fiduciary with respect to this Plan and who (i) is
registered as an investment adviser under the Investment Advisers Act of 1940
(the "Act"), or (ii) is not registered as an investment adviser under such Act
by reason of paragraph (1) of Section 203(A) of such Act but is
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registered as an investment adviser under the laws of the state in which such
person maintains his, her or its principal office and place of business, and
who, at the time such person last filed with such state the most recent the
registration form required to maintain such person's registration under the laws
of such state also filed a copy of such form with the Secretary of Labor, or
(iii) is a bank as defined in the Act, or (iv) is an insurance company qualified
to perform investment management or investment advisory services under the laws
of more than one state.
2.35 "Matching Contributions" means the contributions made from time to
time by an Employer to the Trustee in accordance with Section 4.02.
2.36 "Maternity or Paternity Leave" means an absence from work (i) by
reason of pregnancy of the individual; (ii) by reason of a birth of a child of
the individual; (iii) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual; or (iv) for
purposes of caring for such child for a period beginning immediately following
such birth or placement. The Participant shall give the Plan Administrator such
timely information as the Plan Administrator may reasonably require to establish
that the absence from work is for one of the foregoing reasons and to establish
the number of days for which there was such an absence.
2.37 "Normal Retirement Date" means the date on which the Participant
attains age 65.
2.38 "Participant" means a current or former Eligible Employee
participating in the Plan as provided in Article III.
2.39 "Period of Severance" means the period of time from the earliest of
(i) an Employee's Termination of Employment, or (ii) the first anniversary of an
Employee's first absence from work for any reason other than a Termination of
Employment, until the date the Employee is credited with an Hour of Service upon
reemployment by or return to service with an Employer or a Related Company.
However if one of the reasons for an Employee's Termination of Employment or
other absence was Maternity or Paternity Leave, the Period of Severance shall
not include the first year that would otherwise be included in that Period of
Severance.
2.40 "Plan" means this Chicago Bridge & Iron Savings Plan as set forth in
this document and as from time to time amended; including, for periods prior to
the Effective Date, the Former Plan.
2.41 "Plan Administrator" means the person appointed by the Company in
accordance with Section 9.01 to serve as the plan administrator within the
meaning of Section 414(g) of the Code and as the administrator within the
meaning of Section 3(16)(A) of ERISA.
2.42 "Plan Year" means the calendar year.
2.43 "QMAC" means the qualified matching contribution made from time to
time by an Employer to the Trustee in accordance with Section 4.06
2.44 "Qualified Military Leave" means an absence due to service in the
uniformed services (as defined in chapter 43 of the United States Code) by any
Employee provided the
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Employee returns to employment with the Company or Related Employer with
re-employment rights provided by law.
2.45 "QNEC" means the qualified non-elective contribution made from time
to time by an Employer to the Trustee in accordance with Section 4.06.
2.46 "Reduction-in-Force Termination" means any permanent Termination of
Employment of an Employee initiated by the Company or any Related Company,
including any Termination of Employment caused by the sale by the Company or a
Related Company of an ownership interest in a Related Company or the assets of a
business or business segment, causing the sold Related Company, business or
business segment to cease being (or being part of) a Related Company, but
excluding:
(a) any Termination of Employment by Retirement, or by early
retirement under any retirement arrangement of an Employer applying to
that Employee, elected by the Employee before being given notice of any
impending Termination of Employment, or pursuant to an election under any
special program of retirement incentive offered by the Company or Related
Employer prior to any notice of impending Termination of Employment;
(b) any Termination of Employment by reason of Disability or death;
(c) any Authorized Leave of Absence;
(d) any Termination of Employment for or after "Cause," as "Cause"
is defined in the Chicago Bridge & Iron Salaried Employee Severance Pay
Plan as from time to time in effect (the "Severance Plan"), whether or not
the Severance Plan applies to the Employee;
(e) any voluntary resignation by the Employee; or
(f) any event that is not a Termination of Employment as defined in
Section 2.55.
2.47 "Related Company" means a corporation, trade, or business however
organized (including any limited liability company) during the time that it and
an Employer are (i) members of a controlled group of corporations as defined in
Section 414(b) of the Code; (ii) under common control as defined in Section
414(c) of the Code, (iii) members of an affiliated service group as defined in
Section 414(m) of the Code, or (iv) members of a group the members of which are
required to be aggregated pursuant to regulations under Section 414(o) of the
Code; provided, however, that for purposes of determining applying Section 5.07,
the standard of control under Sections 414(b) and 414(c) of the Code (and thus
also Company and Related Plans) shall be determined as provided in Section
5.07(e).
2.48 "Related Plan" means any other defined contribution plan or any
defined benefit plan (as defined in Sections 414(i), (j) and (k) of the Code)
maintained by an Employer or a Related Company and intended to qualify under
Section 401(a) of the Code, respectively called a "Related Defined Contribution
Plan" and "Related Defined Benefit Plan."
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2.49 "Required Distribution Date" means April 1 of the calendar year
following the later of (i) the calendar year in which the Participant attains
age 70-1/2, or (ii) the calendar year in which the Participant has a Termination
of Employment; provided, however, that this clause (ii) shall not apply (A) if
the Participant is a five percent (5%) owner (as determined under Code Section
416(i)) of the Employer or a Related Company at any time during the Plan Year
ending with or within the calendar year in which he or she attains age 70-1/2,
or (B) to a Participant who attained age 70-1/2 before January 1, 1999.
2.50 "Restricted Account" means an Inactive Account that is subject to the
survivor annuity requirements of Section 417 of the Code.
2.51 "Retirement" means a Termination of Employment on or after the date a
Participant (i) has attained age 55 and has completed 10 years of Service, (ii)
has completed 30 years of Service, or (iii) has attained his or her Normal
Retirement Date.
2.52 "Rollover Contribution" means a contribution made from time to time
by an Eligible Employee to the Trustee in accordance with Section 4.05 of the
Plan (i) from a qualified trust as described in Section 402(c) of the Code, or
(ii) from an individual retirement account or individual retirement annuity
("IRA") as described in Section 408(d)(3) of the Code if the sole source of
contributions to such IRA was one or more rollover contributions from a
qualified trust described in Section 402(c) of the Code. A Rollover Contribution
shall include any direct transfer of an eligible rollover distribution described
in Section 401(a)(31) of the Code from a qualified trust or from an IRA
described in the preceding sentence.
2.53 "Salary Reduction Agreement" means the properly completed and
executed form provided by the Plan Administrator which has been filed by the
Participant with the Plan Administrator as provided in Section 4.01.
2.54 "Service" means the aggregate of all periods of employment of an
Employee by an Employer or Related Company (including periods of Authorized
Leave of Absence) measured from the date an Employee first performs an Hour of
Service upon employment or reemployment to the date of the Employee's
Termination of Employment, but excluding any Period of Severance other than an
Authorized Leave of Absence; provided, however, that (i) an Employee shall not
be credited with more than 12 months of Service with respect to any single
period of Authorized Leave of Absence; and (ii) if an Employee who has a
Termination of Employment is reemployed by an Employer or a Related Company and
performs an Hour of Service before he or she incurs a one-year Period of
Severance, such Termination of Employment shall be disregarded and his or her
Service shall be treated as continuous through the date he or she resumes
employment as an Employee. An Employee shall receive credit for 1/12 of a year
of Service for each full or partial calendar month of Service. Service once
credited under this Section shall not be disregarded by reason of any subsequent
Period of Severance; except that if a Participant has five consecutive one-year
Periods of Severance, Service after such five-year period shall not be taken
into account for purposes of Section 4.10 in determining the nonforfeitable
percentage of his or her Accrued Benefit derived from Employer contributions
which accrued before such five-year period. For purposes of determining whether
or to what extent a Participant's Accounts transferred from a Transferor Plan
are vested and nonforfeitable under Section 4.11, Service of a Participant who
was a participant in a Transferor Plan shall
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include service with the predecessor employer credited for vesting purposes
under the Transferor Plan. Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to Qualified
Military Leave shall be provided in accordance with Section 414(u) of the Code,
effective as of December 12, 1994.
2.55 "Termination of Employment" occurs when for any reason ( other than a
layoff for lack of work with recall rights) an individual is no longer an
Employee of an Employer or any Related Company, except that
(a) If an individual incurs a layoff for lack of work with recall
rights, a Termination of Employment shall occur on the first anniversary
of the date of layoff, unless the individual has in the interim been
recalled to employment with the Employer or a Related Company.
(b) A Participant's Elective Deferrals, QNECs, QMACs, and earnings
attributable to these contributions shall be distributed on account of the
Participant's severance from employment satisfying the requirements of
Section 401(k)(10) of the Code and Treasury Regulations and rulings
thereunder, all as in effect at the time of such severance from
employment, as determined in the sole discretion of the Plan
Administrator. However, such a distribution shall be subject to the other
provisions of the Plan regarding distributions, other than provisions that
require a separation from service before such amounts may be distributed.
2.56 "Transferor Plan" means an employee benefit plan that is qualified
under Section 401(a) of the Code and that transfers part or all of its assets
and liabilities to, or merges or consolidates into, this Plan in a
trust-to-trust transfer described in Section 414 (l) of the Code.
2.57 "Traveler" means a Field Employee who (i) has worked, within a
twenty-six week period, for the Employer or Related Company, in at least two
separate physical locations, one of which is no less than 50 miles from either
the other or from such Field Employee's permanent residence; (ii) has worked
during a minimum of twenty weeks within a twelve-month period at least two
separate physical locations no less than 50 miles apart on projects consisting
of significant manufacturing, refining or processing plan repairs or renovations
(commonly known in the industry as "turnaround contracts") or (iii) has worked
as a field superintendent, weld supervisor, safety supervisor, pusher or
non-destructive examination supervisor continuously for at least thirty calendar
days.
2.58 "Traveler Contributions" means the contributions for Plan Year's
ending on or before December 31, 2000 made from time to time by an Employer to
the Trustee in accordance with Section 4.04.
2.59 "True-Up" Contributions" has the meaning defined for such term in
Section 4.02(d).
2.60 "Trust" means the trust established under the Trust Agreement by
which contributions shall be received, held, invested and distributed to or for
the benefit of Participants and Beneficiaries.
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2.61 "Trust Agreement" means the trust agreement dated December 31, 1996,
by and between the Company and T. Rowe Price Trust Company, a Maryland limited
trust company, as Trustee, and any amendments thereto or successor or
supplemental agreements
2.62 "Trust Fund" means any property, real or personal, received by the
Trustee, plus all income and gains and less losses, expenses and distributions
chargeable thereto.
2.63 "Trustee" means the corporation, bank, trust company, individual or
individuals who accept appointment as trustee to execute the duties of the
Trustee set forth in the Trust Agreement.
2.64 "Valuation Date" means the last business day of each calendar year
and such additional dates as the Plan Administrator shall deem appropriate. The
Plan Administrator may designate different additional Valuation Dates for
different Investment Funds and for different purposes under the Plan.
Article III
Participation
3.01 Participation. Each Eligible Employee who was a Participant in the
Former Plan immediately before the Effective Date shall continue as a
Participant in the Plan from and after the Effective Date. Each other Eligible
Employee shall become a Participant on the first day on which he or she is an
Eligible Employee.
3.02 Duration of Participation. An Eligible Employee who becomes a
Participant shall continue to be a Participant until the later of (i) his or her
Termination of Employment, or (ii) the distribution of his or her entire vested
Accrued Benefit from the Plan.
3.03 Participation Upon Re-Employment. An Employee who has a Termination
of Employment, and thereafter resumes employment with an Employer as an Eligible
Employee shall again become a Participant immediately upon becoming an Eligible
Employee.
3.04 Participation Forms. A Participant shall not be eligible to make
Elective Deferrals (or to receive an allocation of Matching Contributions) until
the effective date of his or her Salary Reduction Agreement as determined under
Section 4.01(c). A Participant shall execute and deliver to the Plan
Administrator a Beneficiary designation and an investment election, on such form
or forms provided or permitted by the Plan Administrator, and in such manner, as
the Plan Administrator may prescribe.
Article IV
Contributions and Vesting
4.01 Elective Deferrals.
(a) General. Each Active Participant may elect to make Elective
Deferrals from his or her Compensation by executing and filing an
appropriately completed Salary
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Reduction Agreement with the Plan Administrator on such form or forms
provided or permitted by the Plan Administrator and in such manner as the
Plan Administrator may prescribe. The Salary Reduction Agreement shall
specify the percentage of Compensation to be contributed to the Plan as
Elective Deferrals. That percentage shall not be more than the maximum
percentage for Elective Deferrals prescribed by the Plan Administrator
from time to time uniformly applicable to all Participants and effective
from and after the date prescribed. The Employer shall reduce each
Participant's Compensation by, and contribute to the Trust as Elective
Deferrals on behalf of such Participant, the amount (if any) by which such
Participant's Compensation has been reduced under such Participant's
Salary Reduction Agreement. A Participant's Salary Reduction Agreement
shall continue in effect, subject to subsection (e) below, notwithstanding
any change in his or her Compensation, until he or she changes or revokes
his or her Salary Reduction Agreement.
(b) Changes of Salary Reduction Agreements. A Participant may change
his or her rate of Elective Deferrals by executing and filing a new Salary
Reduction Agreement with the Plan Administrator on such form provided or
permitted by the Plan Administrator and in such manner as the Plan
Administrator may prescribe.
(c) Effective Date of Salary Reduction Agreement. A Salary Reduction
Agreement or a change thereof shall apply solely to Compensation not yet
paid or payable as of the date such new or changed Salary Reduction
Agreement is filed with the Plan Administrator. Subject to the foregoing
requirement, a Salary Reduction Agreement or change thereof shall take
effect on the first day of the payroll period as of which the start or
change of the Participant's Elective Deferrals is administratively
practicable (determined under procedures established by the Plan
Administrator) after the Participant has executed and filed an initial or
changed Salary Reduction Agreement with the Plan Administrator as provided
in subsection (a) or (b) of this Section 4.01.
(d) Revocations of Salary Reduction Agreements. A Participant may
revoke a Salary Reduction Agreement with respect to Compensation not paid
or payable as of the date of such revocation by executing and filing a
revocation of such Salary Reduction Agreement on such form provided or
permitted by the Plan Administrator and in such manner as the Plan
Administrator may prescribe. Revocation of a Salary Reduction Agreement
shall take effect on the first day of the payroll period as of which
implementing the revocation is administratively practicable (determined
under procedures established by the Plan Administrator) after the
Participant has executed and filed such revocation with the Plan
Administrator. A Participant's Salary Reduction Agreement shall become
ineffective upon his or her ceasing to be an Active Participant. But the
Participant may make a new Salary Reduction Agreement in accordance with
subsection (a) upon again becoming an Active Participant.
(e) Other Reductions and Limitations. Elective Deferrals shall not
exceed the lowest maximum amount permitted by Article V. Notwithstanding
anything in a Salary Reduction Agreement, the Plan Administrator may
reduce the Elective Deferrals and amend the Salary Reduction Agreement of
any Participant to prevent a reasonably anticipated violation of the
limitations of Section 5.07, and may reduce the Elective
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Deferrals and Salary Reduction Agreement of any Participant who is a
Highly Compensated Employee to prevent a reasonably anticipated violation
of the limitations of Sections 5.01 or 5.02. If a Participant receives a
Hardship distribution pursuant to Section 7.01, his or her Salary
Reduction Agreement shall be suspended in accordance with Section
7.01(b)(4). The Plan Administrator may, in its discretion, impose such
additional rules, regulations and limitations on the amount of Elective
Deferrals that may be elected, including limitations on the amount of
Elective Deferrals that an Active Participant may elect for each payroll
period to a pro-rata portion of the Dollar Limit, and limitations on the
amount of Elective Deferrals that a Highly Compensated Employee may elect,
to ensure that the limitations of Article V are not exceeded.
(f) Time for Contributing Elective Deferrals. For each payroll
period during a Plan Year, each Employer shall pay the Elective Deferrals
of Participants who are its Employees over to the Trustee as of, or as
soon as reasonably possible after, the date such amount would otherwise
have been paid to the Participant in cash, but not later than the 15th
business day of the month following the month in which such amount would
otherwise have been paid to the Participant in cash.
(g) Allocation of Elective Deferrals. Elective Deferrals shall be
allocated to the Employee 401(k) Account of each Participant on whose
behalf such Elective Deferrals were made.
4.02 Matching Contributions.
(a) General. Subject to Sections 11.01, 11.02 and 11.04, for each
Plan Year, each Employer shall contribute on behalf of each Participant
employed by the Employer on whose behalf Elective Deferrals are made, an
amount equal to one hundred percent (100%) of so much of the Participant's
Elective Deferrals for the Plan Year as do not exceed three percent (3%)
of the Participant's Compensation for the Plan Year, or such larger or
smaller percentages as each Employer may determine uniformly for the
Participants who are its Employees. An Employer may change such
percentages from time to time during the Plan Year, provided that the
Employer may not retroactively decrease the percentages of its Matching
Contributions or the percentage of Elective Deferrals subject to Matching
Contributions.
(b) Time for Contributing Matching Contributions. Matching
contributions shall be determined and made, on the basis of Elective
Deferrals, for each payroll period, subject to the subsection (d) below.
However the Employer may pay its Matching Contributions over to the
Trustee at any time not later than the due date for the filing of the
federal income tax return (including any extensions) of the Employer for
the tax year during which occurs the last day of the Plan Year containing
the last day of such payroll period.
(c) Allocation of Matching Contributions. Matching Contributions
shall be allocated to the Company Matching Account of each Participant on
whose behalf such Matching Contributions were made; provided, however,
that effective January 1, 2001, a Participant's Company Matching Account
as of December 31, 2000 shall become an
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Inactive Account for pre-2001 Matching Contributions (including
accumulated and future earnings thereon), as indicated in Schedule 1, and
a new Company Matching Account shall be established for each such
Participant as of January 1, 2001.
(d) True-Up Contributions. As of the last day of each Plan Year, the
applicable Matching Contributions formula under subsection (a) shall be
applied to the total of the Participant's Elective Deferrals for the Plan
Year then ending, and each Employer shall contribute (within the time
specified by subsection (b)), on behalf of each Participant on whose
behalf Elective Deferrals are made, the amount, if any (the "True-Up
Contribution"), by which the total Matching Contributions so required
exceed the actual Matching Contributions previously determined on the
basis of payroll periods for such Active Participant during the course of
the Plan Year. If an Employer has changed its determination of percentages
for its matching contribution formula during the Plan Year, the amount of
the True-Up Contribution shall be determined separately for each portion
of a Plan Year during which a given matching contribution formula was in
effect.
4.03 Company Contributions.
(a) General. Subject to Sections 11.01, 11.02 and 11.04, for each
Plan Year for which the Company elects in its sole discretion for
Employers to make a Company Contribution, each Employer shall make a
Company Contribution for each Active Participant employed by the Employer
(other than, for Plan Years ending on or before December 31, 2000, a
Traveler entitled to an allocation of Traveler Contributions pursuant to
Section 4.04) who is an Employee on the last day of the Plan Year or had a
Termination of Employment during the Plan Year by reason of Retirement,
Disability, death or a Reduction-in-Force Termination. The Amount of the
Company Contribution shall be (i) a percentage, determined by the Company
in its discretion and uniformly applicable to all such Active Participants
that is not less than five percent (5%), and not more than twelve percent
(12%), or such larger or smaller percentage as each Employer may determine
in its discretion and make uniformly applicable to all Active Participants
employed by it, of (ii) the Compensation of each Active Participant for
the portion of the Plan Year during which the Participant is an Active
Participant (other than such a Traveler). If an Employer has changed its
determination of the percentage of its Company Contribution during the
Plan Year, the amount of the Company Contribution shall be determined
separately for each portion of a Plan Year during which a given percentage
was in effect.
(b) Time for Company Contributions. For each Plan Year, each
Employer shall pay its Company Contributions over to the Trustee not later
than the due date for the filing of the federal income tax return
(including any extensions) of the Employer for the tax year during which
the last day of such Plan Year occurs.
(c) Allocation of Company Contributions. Company Contributions shall
be allocated to the Company Contribution Account of each Active
Participant eligible for such allocation under subsection (a) in the same
ratio that the eligible Compensation of such Active Participant bears to
the total eligible Compensation of all Active Participants.
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4.04 Traveler Contributions.
(a) Traveler Contributions. Subject to Sections 11.01, 11.02 and
11.04, for each Plan Year ending on or before December 31, 2000, for which
the Company elects to make a Company Contribution, each Employer shall
contribute for each Active Employee employed by the Employer who is a
Traveler an amount equal to (i) one dollar ($1.00) for each Hour of
Service performed by a Traveler (as a Traveler) described in clauses (i)
or (ii) of Section 2.57, during the Plan Year, and (ii) five percent (5%)
of the Compensation of a Traveler (as a Traveler) described in clause
(iii) of Section 2.57 for the Plan Year.
(b) Time for Traveler Contributions. Each Employee shall pay over to
the Trustee the Traveler Contribution for each Plan Year not later than
the due date for the filing of the federal income tax return (including
extensions) of the Employer for the tax year during which the last day of
such Plan Year occurs.
(c) Allocation of Traveler Contributions. Traveler Contributions
shall be allocated to the Travelers Benefit Account of each Traveler
eligible for such allocation under subsection (a) in the amount specified
for such Traveler in subsection (a).
4.05 Rollover Contributions into the Plan. At the request of any Eligible
Employee the Plan Administrator shall direct the Trustee to accept a Rollover
Contribution on behalf of the Eligible Employee. A Rollover Contribution shall
be held in the Prior Plan and Rollovers Account for the Eligible Employee. Each
Rollover Contribution shall be made in cash, in notes representing a loan to the
Participant from a qualified trust under provisions of such qualified trust
similar to Section 7.02, or in property (which may be stock or securities issued
by the former employer) acceptable to the Trustee in its sole discretion for
purposes of this Plan. Prior to accepting a Rollover Contribution, the Plan
Administrator may require that the Eligible Employee who wants to make the
Rollover Contribution shall provide evidence reasonably satisfactory to the Plan
Administrator that such Contribution qualifies as a Rollover Contribution.
Acceptance of a Rollover Contribution shall not in any manner guarantee the
result of such contribution under any tax laws; and neither the Company, the
Investment Committee, any Employer, the Plan Administrator, the Trustee nor any
Investment Manager, shall be responsible for such tax results. If the Plan
Administrator determines after any Rollover Contribution that such contribution
did not in fact qualify as a Rollover Contribution, the amount of the Rollover
Contribution, increased by income and gains and reduced (but not below zero) by
losses and expenses, shall be returned to the Eligible Employee.
4.06 Special Contributions; QNECs and QMACs.
(a) QNECs and QMACs. For each Plan Year, the Company may elect to
have the Company and the other Employers make a special contribution in
such amount (if any) as the Company may determine as QNECs and/or QMACs.
In any Plan Year in which the Company elects to have such a QNEC or QMAC
made, each Employer shall contribute a fractional portion of the QNEC or
QMAC in such amount as the Company shall determine to be appropriate in
the circumstances.
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(b) Time for QNECs or QMACs. Each Employer shall pay its QNECs or
QMACs for a Plan Year over to the Trustee not later than the last day of
the following Plan Year; provided, however, that if the Employer intends
to deduct such QNEC or QMAC in the tax year in which the last day of the
Plan Year for which such QNEC or QMAC was made occurs, the Employer shall
pay its QNEC or QMAC over to the Trustee on or before the due date for the
filing of the federal income tax return (including any extensions) of the
Employer for such tax year.
(c) Allocation of QNECs or QMACs. As of the last day of each Plan
Year, any QNECs or QMACs made to the Plan for the Plan Year shall be
allocated to the Employee 401(k) Account of each Designated Participant
(as defined below) who is an Active Participant, as determined by the
Company in its discretion, in whichever one or more of the following
methods as the Company shall determine:
(i) Compensation-Based QNEC.
(A) Compensation-based QNECs may be allocated to the
Employee 401(k) Account of each Designated Participant who has
Compensation not in excess of an amount specified by the
Company in the ratio that such Participant's Compensation for
the Plan Year bears to the total Compensation of all such
Participants for the Plan Year.
(B) Compensation-based QNECs may be allocated to the
Employee 401(k) Account of each Designated Participant who has
Compensation not in excess of an amount specified by the
Company in the ratio that such Participant's Compensation for
the Plan Year bears to the total Compensation of all such
Participants for the Plan Year.
(C) A Section 415-based QNEC may be allocated to the
Employee 401(k) Account of each Designated Participant in an
amount that maximizes each such Participant's annual additions
under Code Section 415(c) of the code.
(ii) Per Capita-Based QNEC. A per capita-based QNEC may be
allocated to the Employee 401(k) Account of each Designated
Participant in an amount equal to the total per capita-based QNEC
divided by the total number of such Participants for the Plan Year.
(iii) Section 401(k)-Based QMAC. A Section 401(k)-based QMAC
may be allocated to the Employee 401(k) Account of each Designated
Participant in the ratio that the amount of Elective Deferrals made
to the Plan for such Plan Year on behalf of such Participant bears
to the total amount of Elective Deferrals made to the Plan for such
Plan Year on behalf of all such Participants, based on Elective
Deferrals up to a specified percentage or dollar amount of
Compensation, as determined by the Plan Administration.
(d) Definition of Designated Participant. With respect to any QNEC
or QMAC, a Designated Participant is a Participant who is not a Highly
Compensated
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Employee for the Plan Year and who is designated by the Plan Administrator
on the basis of any one or more of the following:
(i) such Participant's level of Compensation;
(ii) such Participant's employment on the last day of the Plan
Year;
(iii) such Participant's completion of a Year of Vesting
Service;
(iv) such Participant's making of a Salary Reduction Agreement
Election; or
(v) such Participant's job classification that satisfies the
nondiscriminatory classification test.
4.07 Crediting of Contributions. Contributions to be allocated to a
Participant's Account shall be credited to such Account (and available for
Participant direction of investment pursuant to Section 6.08(a) and loans,
withdrawals and benefits pursuant to Articles VII and VIII) on or as soon as
reasonably practicable (under procedures established or approved by the Plan
Administrator) after the contributions (and a reconciliation of the
contributions to Participants' Accounts) are actually received by the Trustee
from time to time during or after the Plan Year. However, for purposes of
determining the Accrued Benefit to which a Participant is entitled,
contributions made or to be made for a particular Plan Year but credited under
this Section after the last day of such Plan Year shall nevertheless be deemed
made and allocated on such last day of such Plan Year.
4.08 Determination and Amount of Employer Contributions. Subject to the
Company's determination of the rate (if any) of Company Contributions pursuant
to Section 4.03, the Plan Administrator shall determine the amount of any
contribution to be made by the Company and each Employer hereunder. In making
such determination, the Plan Administrator shall be entitled to rely upon the
estimates of Compensation made by the accounting officers of each respective
Employer with respect to the Employees of that Employer. Such determination
shall be binding on all Participants, all Employers, and the Trustee. Under no
circumstances shall any Participant or Beneficiary have any right to examine the
books and records of any Employer.
4.09 Condition on Company Contributions. All contributions of Elective
Deferrals, Matching Contributions, Company Contributions, Traveler
Contributions, QNECs or QMACs by the Company or any other Employer under this
Plan are hereby expressly conditioned upon their being deductible for federal
income tax purposes under Section 404 of the Code; and notwithstanding anything
else in the Plan shall not exceed the amount so deductible.
4.10 Form of Company Contributions. Contributions of the Company or any
other Employer under this Plan shall be in the form of cash if they are (i)
Elective Deferrals, (ii) Company Contributions to the extent not in excess of 5%
of the Compensation of Participants entitled to an allocation of such Company
Contributions, or (iii) Traveler Contributions. All other contributions of the
Company or any other Employer under this Plan (including that portion of any
Company Contributions in excess of 5% of the Compensation of
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Participants entitled to an allocation of such Company Contributions) may in the
discretion of the Company be made in cash, in Company Stock that is a qualifying
employer security (as defined in Section 407(d)(5) of ERISA), or in other
property acceptable to the Trustee in its sole discretion.
4.11 Vesting.
(a) Vesting Upon Normal Retirement Date, Death or Disability. A
Participant's Accrued Benefit shall be fully vested and nonforfeitable if
and when the Participant attains his or her Normal Retirement Date, dies
or becomes Disabled on or before the date he or she has a Termination of
Employment, or incurs a Termination of Employment by reason of a
Reduction-In-Force Termination.
(b) Fully Vested Accounts. A Participant's Accrued Benefit shall be
fully vested and nonforfeitable at all times to the extent represented by
the balance of his or her Employee 401(k) Account, Travelers Benefit
Account, and Rollover Account.
(c) Other Termination. Except as provided in subsection (a):
(1) The vested and nonforfeitable portion of a Participant's
Accrued Benefit attributable to his or her Company Contribution
Account shall be the percentage of such Account determined in
accordance with the vesting schedule specified below:
Years of Vested
Service Percentage
- -------------------- ----------
Less than five years 0%
Five years or more 100%
(2) The vested and nonforfeitable portion of a Participant's
Accrued Benefit attributable to his or her Company Matching Account
(excluding his or her Inactive Account for pre-2001 Matching
Contributions) shall be the percentage of such Account determined in
accordance with the vesting schedule specified below:
Years of Vested
Service Percentage
- --------------------- ----------
Less than three years 0%
Three years or more 100%,
(d) Inactive Accounts. A Participant's Accrued Benefit shall be
fully vested and nonforfeitable at all times to the extent represented by
an Inactive Account (including the Participant's Inactive Account for
pre-2001 Matching Contributions, if any), other than an Inactive Account
that comprises contributions (including matching contributions) made
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by an employer under a Transferor Plan. The nonforfeitable percentage of
an Inactive Account that comprises contributions (including matching
contributions) made by an employer under a Transferor Plan shall be
determined under the vesting schedule specified in the applicable
Transferor Plan for accounts containing such contributions, as shown on
Schedule 1, taking into account (without duplication) all of the
Participant's Years of Service including service with the predecessor
employer credited for vesting purposes under the Transferor Plan.
(e) Forfeitures. If a Participant has a Termination of Employment,
then that portion of the Participant's Accrued Benefit which is not vested
as of his or her Termination of Employment shall become a Forfeiture as
soon as administratively practicable after the earliest of (i) the date on
which the balance of the Participant's Accounts is distributed, (ii) the
last day of the Plan Year in which the Participant incurs a one year
Period of Severance, or (iii) the date of Termination of Employment;
provided, however, if the Participant has no vested interest in any
Accounts, such portion shall become a Forfeiture on the date of
Termination of Employment.
(f) Return to Employment. If a Participant or a former Participant
resumes service with an Employer as an Employee before incurring a Period
of Severance lasting five or more years, the amount forfeited under
subsection (e) (without adjustment for interest, gains or losses) shall be
reinstated to the Participant's or former Participant's Account(s) from
which the Forfeiture arose, as soon as administratively practicable after
the Participant resumes service with an Employer as an Employee, first out
of Forfeitures for the Plan Year in which reemployment occurs, and to the
extent that Forfeitures for such Plan Year are not sufficient, out of the
Trust Fund as an administrative expense of the Trust. If a former
Participant does not resume employment with an Employer before the end of
a Period of Severance lasting at least five years, the amounts forfeited
under subsection (e) shall not be reinstated.
(g) Application of Forfeitures. Forfeitures arising pursuant to
Sections 4.10(e), 5.01, 5.02(c), or 13.04 during a Plan Year shall be
applied first to restore any Forfeitures that are reinstated during the
Plan Year pursuant to Sections 4.10(f) or 13.04; second, to correct in
such Plan Year any errors in the adjustment of Participants' Accounts
pursuant to Section 6.11, third, to the payment of expenses of
administering the Plan and the Trust pursuant to Section 6.03, and fourth,
toward the payment of Company Contributions. Forfeitures that are applied
toward payment of Company Contributions shall be considered to be Company
Contributions, shall reduce the amount of Company Contributions otherwise
required to be made to the Trust, and shall be allocated in accordance
with Section 4.03(c).
4.12 Catch-Up Deferrals. Effective for Plan Years beginning on or after
January 1, 2002, each Participant who is an "Eligible Active Participant" (as
defined in subsection (a)) may elect to make Catch-Up Deferrals from his or her
Compensation by written election on a Salary Reduction Form filed with the Plan
Administrator in such manner as the Plan Administrator may prescribe. The
Employer shall reduce each Eligible Active Participant's Compensation by, and
contribute to the Trust as Catch-Up Deferrals on behalf of such Participant, the
amount (if any) of the Participant's Catch-Up Deferrals. For purposes of this
Section 4.12:
(a) An "Eligible Active Participant" is a Participant who:
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(1) will have attained age 50 on or before the last day of the
Plan Year; and
(2) has made Elective Deferrals for the Plan Year that are the
maximum Elective Deferrals allowed under the Plan, taking into
account the provisions of Article V.
(b) For each Plan Year, the amount of the Catch-Up Deferrals made on
behalf of a Participant who is an Eligible Active Participant shall be
equal to the dollar amount or percentage (in increments of 1%) of the
Participant's Compensation specified by the Participant for Catch-Up
Deferrals on his or her Salary Reduction Form, provided that such Catch-Up
Deferrals may not exceed the lesser of the following for a Plan Year:
(1) $1,000 for 2002, $2,000 for 2003, $3,000 for 2004, $4,000
for 2005, $5,000 for 2006, and $5,000 for Plan Years after 2006 as
adjusted for cost-of-living increases by the Secretary of the
Treasury or his delegate pursuant to the provisions of Section
414(v)(2)(C) of the Code; or
(2) The excess of (i) the Participant's Statutory Compensation
for the Plan Year as determined under Section 2.13(b) (as applied
for purposes of Sections 5.02 and 5.03), over (ii) the Participant's
Elective Deferrals for the Plan Year.
(c) A Participant's initial Catch-Up Deferral election shall be
effective for Compensation payable on or after the date on which such
election is made and shall remain in effect until changed or revoked.
Thereafter, changes in the percentage (solely in increments or decrements
of 1%) or dollar amount of Compensation to be deferred or revocation of
any such election, may be made by written election on a Salary Reduction
Form filed with the Plan Administrator in such manner as the Plan
Administrator may prescribe.
(d) The Catch-Up Deferrals for the Plan Year shall be credited to
the Participants' Employee 401(k) Accounts in the amounts of their
respective Catch-Up Deferral elections for such Plan Year and shall be
fully vested and nonforfeitable.
(e) Catch-Up Deferrals shall not be subject to any of the
limitations under Article V.
(f) The Plan Administrator may specify rules from time to time
governing Catch-Up Deferrals, including, but not limited to, rules
regarding the timing, method, and implementation dates of Catch-Up
Deferral elections and the return or recharacterization of Catch-Up
Deferrals as Elective Deferrals. Such rules shall be in compliance with
any applicable guidance issued by the Secretary of the Treasury, and, to
the extent deemed advisable by the Plan Administrator in order to comply
with such guidance, such rules may override any of the preceding
provisions of this Section 4.12.
(g) Catch-Up Deferrals will be treated as Elective Deferrals for all
purposes of this Plan; other than Section 4.02 (relating to Matching
Contributions) and Article V
-23-
(relating to Limitations on Contributions); provided, however, that
Catch-Up Deferrals recharacterized under subsection (f) as Elective
Deferrals will be eligible for Matching Contributions to the extent
provided for Elective Deferrals in Section 4.02
ARTICLE V
Limitations on Contributions
5.01 Excess Deferrals. Notwithstanding Section 4.01 or anything in a
Participant's Salary Reduction Agreement, the sum for any calendar year of (i)
Elective Deferrals of any Participant under this Plan, (ii) any elective
deferrals excluded from the Participant's gross income made under a Related
Plan, and (iii) the amount of elective deferrals under any other plan if the
Participant notifies the Plan Administrator in writing by March 1 of the
following calendar year that such other plan exists under which elective
deferrals were excluded from the Participant's gross income and the amount of
such elective deferrals (excluding in every case Catch-Up Deferrals made under
Section 4.12 of this Plan or corresponding provisions authorized by Section
414(v) of the Code of any Related Plan or other plan), shall not exceed the
applicable Dollar Limit. The "Dollar Limit" is $11,000 for 2002, $12,000 for
2003, $13,000 for 2004, $14,000 for 2005, $15,000 for 2006, and for years after
2006 is $15,000 as adjusted for cost-of-living increases by the Secretary of the
Treasury or his or her delegate pursuant to Sections 402(g)(4) and 415(d) of the
Code; increased in each year to the extent applicable in accordance with
applicable regulations and rulings under Section 402(g)(7) of the Code. If the
sum of such amounts exceeds the Dollar Limit for a calendar year, the Plan
Administrator shall, not later than the April 15 following the close of such
calendar year, distribute to the Participant all or such portion of the
Participant's Elective Deferrals in excess of the Dollar Limit (by first
distributing unmatched Elective Deferrals and then matched Elective Deferrals)
for such calendar year in an amount equal to the greater of (i) the amount the
Plan Administrator determines is necessary to eliminate the excess of the sum of
the amount described in clauses (i) and (ii) above over the, including net
income and minus any loss allocable to such amount determined in accordance with
Section 5.06, or (ii) the amount requested in writing by the Participant on or
before the March 1 following the close of such calendar year. Any Matching
Contributions (including any net income and minus any loss allocable thereto
determined in accordance with Section 5.06) made with respect to such
distributed Elective Deferrals matched Plan Administrator shall be forfeited and
allocated in accordance with Section 4.10(f).
5.02 Excess Contributions: The ADP Test. Notwithstanding Section 4.01 or
anything in a Participant's Salary Reduction Agreement, a Participant's Elective
Deferrals shall not exceed the amounts permitted under the non-discrimination
rules of Section 401(k) of the Code as set forth in this Section.
(a) Imposition of Limit. Elective Deferrals made with respect to a
Highly Compensated Employee for a Plan Year shall not exceed such amount
as the Plan Administrator determines is necessary to cause the Average ADP
(as defined in subsection (d) below) of Active Participants who are Highly
Compensated Employees to not exceed the greater of the following limits
(the "Required ADP Test"):
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(1) General Limit. The Average ADP of the Highly Compensated
Employees for such Plan Year shall not be more than the Average ADP
of all other Active Participants for such Plan Year multiplied by
1.25; or
(2) Alternative Limit. The excess of the Average ADP of Highly
Compensated Employees for such Plan Year over the Average ADP of all
other Active Participants for such Plan Year shall not be more than
two percentage points, and the Average ADP of the Highly Compensated
Employees for such Plan Year shall be not more than the Average ADP
of all other Active Participants for such Plan Year multiplied by
two.
If the Plan Administrator so elects by amendment to this Plan, it may
apply the limits set forth in paragraphs (1) and (2) of this subsection
(a) by using the Average ADP of Active Participants (other than Highly
Compensated Employees) for the Plan Year preceding the Plan Year for which
the determination is made rather than for the current Plan Year; provided
that such election may not be changed except as provided by the Secretary
of the Treasury.
(b) Manner of Reduction to Satisfy Limit. To the extent the Plan
Administrator determines is necessary to pass the Required ADP Test,
Elective Deferrals (and Matching Contributions allocated with respect to
Elective Deferrals that are reduced) shall be reduced for Highly
Compensated Employees in the following steps:
STEP 1: The Plan Administrator shall first determine the dollar
amount of the reductions which would have to be made to the Elective
Deferrals of each Highly Compensated Employee who is an Active Participant
for the Plan Year in order for the Average ADP of the Highly Compensated
Employees for the Plan Year to satisfy the Required ADP Test. Such amount
shall be calculated by first determining the dollar amount by which the
Elective Deferrals of Highly Compensated Employees who have the highest
Actual Deferral Percentage (as defined in subsection (d)) would have to be
reduced until the first to occur of: (i) such Employees' Actual Deferral
Percentage would equal the Actual Deferral Percentage of the Highly
Compensated Employee or group of Highly Compensated Employees with the
next highest Actual Deferral Percentage; or (ii) the Average ADP of all of
the Highly Compensated Employees, as recalculated after the reductions
made under this Step 1, satisfies the Required ADP Test. Then, unless the
recalculated Average ADP of the Highly Compensated Employees satisfies the
Required ADP Test, the reduction process shall be repeated by determining
the dollar amount of reductions which would have to be made to the
Elective Deferrals of the Highly Compensated Employees who, after the
prior reductions made in this step 1, would have the highest Actual
Deferral Percentage until the first to occur of: (iii) such Employees'
Actual Deferral Percentage, after the current and all prior reductions
under this Step 1, would equal the Actual Deferral Percentage of the
Highly Compensated Employee or group of Highly Compensated Employees with
the next highest Actual Deferral Percentage; or (iv) the Average ADP of
all of the Highly Compensated Employees, as recalculated after the current
and all prior reductions made under this Step 1, satisfies the Required
ADP Test. This process is repeated until the Average ADP of all of the
Highly Compensated Employees, after all reductions, satisfies the Required
ADP Test.
-25-
STEP 2. Next, the Plan Administrator shall determine the total
dollar amount of reductions to the Elective Deferrals calculated under
Step 1 ("Total Excess Contributions").
STEP 3. Finally, the Plan Administrator shall reduce the Elective
Deferrals of the Highly Compensated Employees with the highest dollar
amount of Elective Deferrals by the lesser of the dollar amount which: (i)
causes each such Highly Compensated Employee's Elective Deferrals to equal
the dollar amount of the Elective Deferrals of the Highly Compensated
Employee or group of Highly Compensated Employees with the next highest
dollar amount of Elective Deferrals; or (ii) reduces the Highly
Compensated Employees' Elective Deferrals by the Total Excess
Contributions. Then, unless the total amount of reductions made to Highly
Compensated Employees' Elective Deferrals under this Step 3 equals the
amount of the Total Excess Contributions, the reduction process shall be
repeated by reducing the Elective Deferrals of the group of Highly
Compensated Employees with the highest dollar amount of Elective
Deferrals, after the prior reductions made in this Step 3, by the lesser
of the dollar amount which: (iii) causes each such Highly Compensated
Employees' Elective Deferrals, after the current and all prior reductions
under this Step 3 to equal the dollar amount of the Elective Deferrals of
the Highly Compensated Employees with the next highest dollar amount of
Elective Deferrals; or (iv) causes total reductions to equal the Total
Excess Contributions. This process is repeated with each successive group
of Highly Compensated Employees with the highest dollar amount, after all
reductions, of the Elective Deferrals until the total reductions made
under this Step 3 is equal to the Total Excess Contributions.
(c) Distribution of Excess Deferrals. The Plan Administrator shall,
not later than the last day of the Plan Year next following the Plan Year
in which such amounts are contributed, distribute the Total Excess
Contributions (including any income earned and minus any loss allocable to
such amounts determined in accordance with Section 5.6) to the Highly
Compensated Employees on whose behalf such Elective Deferrals were made.
Any Matching Contributions (including any income earned and minus any loss
allocable thereto determined in accordance with Section 5.6) made with
respect to such distributed Elective Deferrals shall be forfeited and
allocated in accordance with Section 4.10(f).
(d) Average ADP; Actual Deferral Percentage. The "Average ADP" for a
specified group of Active Participants for a Plan Year shall be the
average of the Actual Deferral Percentages (as defined below) of the
members of such group. The "Actual Deferral Percentage" of an Active
Participant is the ratio of the amount of Elective Deferrals actually paid
over to the Plan on behalf of such Active Participant for such Plan Year
divided by the Active Participant's Statutory Compensation for the Plan
Year, or, at the discretion of the Plan Administrator to the extent not
prohibited by regulations prescribed by the Secretary of the Treasury or
his or her delegate, the sum of (i) Elective Deferrals (to the extent not
included in the Actual Contribution Percentage under Section 5.03(d)), and
(ii) any portion on all of the QNECS and QMACS actually paid over to the
Plan on behalf of such Active Participant for the Plan Year, divided by
the Active Participant's Compensation for the Plan Year.
-26-
(e) Aggregation Rules. The Actual Deferral Percentage for any Active
Participant who is a Highly Compensated Employee for the Plan Year and who
is eligible to have Elective Deferrals allocated under this Plan and is
also eligible to have elective deferrals (within the meaning of Section
401(m)(4)(B) of the Code), qualified matching contributions (within the
meaning of Treasury Regulation Section 1.401(k)-1(g)(13)(i)) or qualified
nonelective contributions (within the meaning of Treasury Regulation
Section 1.401(k)-1(g)(13)(ii)), allocated pursuant to a cash or deferred
arrangement under one or more Related Plans shall be determined as if such
elective deferrals, qualified matching contributions and qualified
nonelective contributions were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated
as a single arrangement.
In the event this Plan satisfies the requirements of Section 401(k),
401(a)(4) or 410(b) of the Code only if aggregated with one or more
Related Plans, or if one or more Related Plans satisfy the requirements of
such sections of the Code only if aggregated with this Plan, then this
Section shall be applied by determining the Actual Deferral Percentages of
Participants as if this Plan and all such Related Plans were a single
plan; provided, however, that the Plan and one or more Related Plans may
be aggregated in order to satisfy the non-discrimination rules of Section
401(k) of the Code only if such plans have the same plan year.
5.03 Excess Aggregate Contributions: The ACP Test. Notwithstanding Section
4.2, Matching Contributions shall not exceed the amounts permitted under the
non-discrimination rules of Section 401(m) of the Code as set forth in this
Section.
(a) Imposition of Limit. Matching Contributions made on behalf of
Highly Compensated Employees for a Plan Year shall not exceed such amount
as the Plan Administrator determines is necessary to cause the Average ACP
(as defined in subsection (d) below) of Active Participants who are Highly
Compensated Employees not to exceed the greater of the following limits
(the "Required ACP Test"):
(1) General Limit. The Average ACP of the Highly Compensated
Employees for such Plan Year shall not be more than the Average ACP
of all other Active Participants for such Plan Year Multiplied by
1.25; or
(2) Alternative Limit. The excess of the Average ACP for
Highly Compensated Employees for such Plan Year over the Average ACP
of all other Active Participants for such Plan Year shall not be
more than two percentage points, and the Average ACP of the Highly
Compensated Employees for such Plan Year shall not be more than the
Average ACP of all other Active Participants for such Plan Year
multiplied by two.
If the Plan Administrator so elects, it may apply the limits set forth in
paragraphs (1) and (2) of this subsection (a) by using the Average ACP of
all other Active Participants (other than Highly Compensated Employees)
for the Plan Year preceding the Plan Year for
-27-
which the determination is made rather than for the current Plan Year;
provided that such election may not be changed except as provided by the
Secretary of the Treasury.
(b) Manner of Reduction to Satisfy Limit. To the extent that the
Plan Administrator, after giving effect to any reduction in the amount of
Matching Contributions pursuant to Section 5.02(c), determines is
necessary to pass the Required ACP Test, Matching Employer Contributions
shall be reduced for Highly Compensated Employees in the following steps:
STEP 1: The Plan Administrator shall first determine the dollar
amount of the reductions which would have to be made to the Matching
Contributions of each Highly Compensated Employee who is an Active
Participant for the Plan Year in order for the Average ACP of the Highly
Compensated Employees to satisfy the Required ACP Test. Such amount shall
be calculated by first determining the dollar amount by which the Matching
Contributions of the Highly Compensated Employees who have the highest
Actual Contribution Percentage (as defined in subsection (d)) would have
to be reduced until the first to occur of: (i) such Employees' Actual
Contribution Percentage would equal the Actual Contribution Percentage of
the Highly Compensated Employee or group of Highly Compensated Employees
with the next highest Actual Contribution Percentage; or (ii) the Average
ACP of all of the Highly Compensated Employees, as recalculated after the
reductions made under this Step 1, satisfies the Required ACP Test. Then,
unless the recalculated Average ACP of the Highly Compensated Employees
satisfies the Required ACP Test, the reduction process shall be repeated
by determining the dollar amount of reductions which would have to be made
to the Matching Contributions of the Highly Compensated Employees who,
after the prior reductions made in this Step 1 would have the highest
Actual Contribution Percentage until the first to occur of: (iii) such
Employees Actual Contribution Percentage, after all the current and prior
reductions under this Step 1 would equal the Actual Contribution
Percentage of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest Actual Contribution
Percentage; or (iv) the Average ACP of all of the Highly Compensated
Employees, as recalculated after the current and all prior reductions
under this Step 1, satisfies the Required ACP Test. This process is
repeated until the Average ACP of all of the Highly Compensated Employees,
as recalculated after all reductions made under this Step 1, satisfies the
Required ACP Test.
STEP 2. Next, the Plan Administrator shall determine the total
dollar amount of reductions to the Matching Employer Contributions
calculated under Step 1 ("Total Excess Aggregate Contributions").
STEP 3. Finally, the Plan Administrator shall reduce the Matching
Employer Contributions of the Highly Compensated Employees with the
highest dollar amount of Matching Employer Contributions by the lesser of
the dollar amount which: (i) causes each such Highly Compensated
Employee's Matching Contributions to equal the dollar amount of the
Matching Employer Contributions of the Highly Compensated Employee or
group of Highly Compensated Employees with the next highest dollar amount
of Matching Contributions; or (ii) reduces the Highly Compensated
Employees' Matching Contributions by the Total Excess Aggregate
Contributions. Then, unless the total
-28-
amount of reductions made to Highly Compensated Employees' Matching
Employer Contributions under this Step 3 equals the amount of Total Excess
Aggregate Contributions, the reduction process shall be repeated by
reducing the Matching Contributions of the group of Highly Compensated
Employees with the highest dollar amount of Matching Employer
Contributions, after the prior reductions made in this Step 3, by the
lesser of the dollar amount which: (iii) causes each such Highly
Compensated Employee's Matching Contributions, after the current and cell
prior reductions under this Step 3, to equal the dollar amount of the
Matching Contributions of Highly Compensated Employees with the next
highest dollar amount of Matching Contributions; or (iv) causes total
reductions to equal the Total Excess Aggregate Contributions. This process
is repeated with each successive group of Highly Compensated Employees
with the highest dollar amount, after all reductions, of the Matching
Contributions until the total reductions made under this Step 3 is equal
to the Total Excess Aggregate Contributions.
(c) Distribution of Excess Contributions. The Plan Administrator
shall, not later than the last day of the Plan Year next following the
Plan Year in which such amounts are contributed, distribute the Total
Excess Aggregate Contributions (including any income earned and minus any
loss allocable to such amounts determined in accordance with Section
5.06), to the Highly Compensated Employees on whose behalf such Matching
Contributions were made.
(d) Average ACP; Actual Contribution Percentage. The "Average ACP"
for a specified group of Active Participants for a Plan Year shall be the
average of the Actual Contribution Percentages (as defined below) of the
members of such group. The "Actual Contribution Percentage" of an Active
Participant is the ratio of the amount of Matching Employer Contributions
actually paid over to the Plan on behalf of such Active Participant for
such Plan Year divided by the Active Participant's Statutory Compensation
for the Plan Year, or at the discretion of the Plan Administrator to the
extent not prohibited by regulations prescribed by the Secretary of
Treasury or his or her delegate, the sum of (i) Matching Contributions
(and QMACs to the extent not included in the Actual Deferral Percentage
under Section 5.02(d)), and (ii) any portion or all of the Elective
Deferrals or QNECs (to the extent not included in the Actual Deferral
Percentage under Section 5.02(d)) actually paid over to the Plan on behalf
of such Active Participant for the Plan Year, divided by the Active
Participant's Statutory Compensation during the Plan Year.
(e) Aggregation Rules. The Actual Contribution Percentage for any
Active Participant who is a Highly Compensated Employee for the Plan Year
and who is eligible to have Matching Contributions allocated under this
Plan and is also eligible to make employee nondeductible contributions or
to have matching contributions (within the meaning of Section 401(m)(4)(A)
of the Code) allocated under one or more Related Plans shall be determined
as if the total of such Matching Employer Contributions, employee
nondeductible contributions, and matching contributions were made under a
single arrangement.
In the event that this Plan satisfies the requirements of Section
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more Related Plans, or if one or
-29-
more Related Plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section shall be applied by
determining the Actual Contribution Percentages of Participants as if this
Plan and all such Related Plans were a single plan; provided, however,
that the Plan and one or more Related Plans may be aggregated in order to
satisfy the non-discrimination requirements of Section 401(m) of the Code
only if such plans have the same plan year.
5.04 [RESERVED]
5.05 Order of Application of Limitations. Section 5.01 shall be first
applied to contributions under the Plan; second, Section 5.02 shall be applied
to contributions under the Plan; third, Section 5.03 shall be applied to
contributions under the Plan; and last, Section 5.04 shall be applied to
contributions under the Plan. Section 5.07 shall be applied to contributions
under the Plan without regard to Sections 5.01, 5.02 or 5.03.
5.06 Allocation of Income or Loss. Any income or loss attributable to
contributions distributed pursuant to Sections 5.01, 5.02 or 5.03 shall be
distributed or forfeited, as applicable. Such distributable income or loss shall
be determined as follows:
(a) Income or Loss for Plan Year. The Plan Administrator shall
compute income or loss attributable to distributed contributions for a
completed Plan Year using any reasonable method permitted under Treasury
Regulations Sections 1.401(k)-1(f)(4)(ii), 1.401(m)-1(e)(3)(ii) and
1.402(g)-1(e)(5), as applicable; provided that the method does not violate
Section 401(a)(4) of the Code, is used consistently for all Participants
and for all corrective distributions under the Plan for the Plan Year, and
is used by the Plan for allocating income to Participants' Accounts.
(b) Income or Loss for Period Between End of Plan Year and
Distribution. The Plan Administrator shall compute income or loss
attributable to distributed contributions for the period between the end
of the Plan Year and the date of distribution (the "Gap Period") using any
reasonable method permitted under Treasury Regulations Sections
1.401(k)-1(f)(4)(ii), 1.401(m)-1(e)(3)(ii) and 1.402(g)-1(e)(5), as
applicable; provided that the method does not violate Section 401(a)(4) of
the Code, is used consistently for all Participants and for all corrective
distributions under the Plan for the Gap Period, and is used by the Plan
for allocating income to Participants' Accounts.
5.07 Section 415 Limitation on Contributions.
(a) Limitations on Contributions. Notwithstanding any provisions of
this Plan to the contrary, a Participant's Annual Additions (as defined in
subsection (b)(1) below) for any Plan Year shall not exceed his or her
Maximum Annual Additions (as defined in subsection (b)(2) below) for the
Plan Year. If a Participant's Annual Additions exceed his or her Maximum
Annual Additions, the Participant's Annual Additions for the Plan Year
shall be reduced according to subsection (c) below by the amount necessary
to eliminate such excess (the "Annual Excess").
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(b) Definitions.
(1) "Annual Additions" of a Participant for a Plan Year means
the sum of the following:
(A) Elective Deferrals, Matching Contributions, Company
Contributions, Travelers Benefits, QNECs, QMACs, and Minimum
Top Heavy Employer Contributions (if any, as determined under
Article XII) and any Forfeitures thereof, allocated for the
Plan Year.
(B) All employer contributions, non-deductible employee
contributions and forfeitures for such Plan Year allocated to
such Participant's accounts for such Plan Year under any
Related Defined Contribution Plan,
(C) contributions allocated to any individual medical
account (as defined in Code Section 401(h)) established for
the Participant which is part of a Related Defined Benefit
Plan as provided in Code Section 415(l) and any amount
attributable to post-retirement medical benefits allocated to
an account established under Code Section 419A(d)(1) for the
Participant; provided, however, that the limitation in Section
(b)(2)(A) below shall not apply to any amounts treated as an
Annual Addition under this subsection (b)(1)(C).
A Participant's Annual Additions shall include amounts described in
this subsection (b)(1) that are determined to be excess
contributions as defined in Section 401(k)(8)(B) of the Code, excess
aggregate contributions as defined in Section 401(m)(6)(B) of the
Code, and excess deferrals as described in Section 402(g) of the
Code, regardless of whether such amounts are distributed or
forfeited. Rollover Contributions and trust-to-trust transfers shall
not be included as part of a Participant's Annual Additions. The
Annual Additions for any Plan Year beginning before January 1, 1987
shall not be recomputed to treat all non-deductible employee
contributions as Annual Additions.
(2) "Maximum Annual Additions" of a Participant for a Plan
Year means the lesser of (A) or (B) below:
(A) Percentage Limitation. 100% of the Participant's
Statutory Compensation during the Plan Year; or
(B) Dollar Limitation. $40,000 (in 2002, as adjusted for
cost-of-living increases in accordance with regulations
prescribed by the Secretary of the Treasury or his or her
delegate pursuant to the provisions of Section 415(d) of the
Code).
(c) Elimination of Annual Excess. If a Participant has an Annual
Excess for a Plan Year, such excess shall not be allocated to the
Participant's Accounts but shall be eliminated as follows:
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(1) Unmatched Elective Deferrals Participant Contributions.
The Participant's unmatched Elective Deferrals for the Plan Year
shall be reduced to the extent necessary to eliminate the Annual
Excess.
(2) Matched Elective Deferrals and Related Matching
Contributions. If any Annual Excess remains, the Participant's
matched Elective Deferrals and the related Matching Contributions
for the Plan Year shall be reduced in proportionate amounts to the
extent necessary to eliminate the Annual Excess.
(3) Company Contributions. If any Annual Excess remains, the
Company Contributions for the Plan Year shall be reduced to the
extent necessary to eliminate the Annual Excess.
(4) QNECs or QMACs. If any Annual Excess remains, the
Participant's QNECs or QMACs for the Plan Year shall be reduced to
the extent necessary to eliminate the Annual Excess.
Any Elective Deferrals reduced or eliminated under this Section
shall be distributed to the Participant. Any allocations of Matching
Contributions, Company Contributions, QNECs or QMACs reduced or eliminated
under this Section shall be held, subject to the limits of this Section,
in a suspense account and applied to reduce the Matching Contributions,
Company Contributions, QNECs and QMACs for the next succeeding Plan Year
of the Employer of the Participant with respect to which such reductions
have occurred. On Plan termination any amounts held in a suspense account
which may not be allocated to Participants in the Plan Year of the
termination under this Section shall be returned to the Employers in such
proportions as shall be determined by the Plan Administrator.
(d) Combined Limitations. Effective for Plan Years beginning before
January 1, 2000, if a Participant participates or has participated in any
Related Defined Benefit Plan, the sum of the Defined Benefit Plan Fraction
(as defined in Section 415(e)(2) of the Code) and the Defined Contribution
Plan Fraction (as defined in Section 415(e)(3) of the Code) for such
Participant shall not exceed 1.0 (called the "Combined Fraction"). If the
Combined Fraction of such Participant exceeds 1.0 for any Plan Year
commencing prior to January 1, 2000, the Participant's Defined Benefit
Plan Fraction shall be reduced (a) first, by limiting the Participant's
annual benefits payable from the Related Defined Benefit Plan in which he
participates to the extent provided therein and (b) second, by reducing
the Participant's Annual Additions to the extent necessary to reduce the
Combined Fraction of such Participant to 1.0.
(e) Standard of Control. For purposes of this Section 5.07, the
standard of control for determining a Related Company under Sections
414(b) and 414(c) of the Code (and thus also Related Plans) shall be
deemed to be "more than 50%" rather than "at least 80%."
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ARTICLE VI
Trustee and Trust Fund
6.01 Trust Agreement. The Company and the Trustee have entered into a
Trust Agreement which provides for the investment of the assets of the Plan and
administration of the Trust Fund. The Trust Agreement, as from time to time
amended, shall continue in force and shall be deemed to form a part of the Plan
and any and all rights or benefits which may accrue to any person under the Plan
are subject to all the terms and provisions of the Trust Agreement.
6.02 Selection of Trustee. The Company shall select and may remove the
Trustee and the Trustee may resign in accordance with the Trust Agreement. The
resignation or removal of a Trustee and the appointment of a successor Trustee
and the approval of his, her or its accounts shall be accomplished in the manner
provided in the Trust Agreement.
6.03 Plan and Trust Expenses. All expenses incurred by the Trustee or the
Plan Administrator in the administration of the Plan and the Trust (including
compensation of the Trustee, accountants, attorneys and other persons who render
advice or services to the Plan or Trust, if any) shall be paid by the Trust
except to the extent paid by the Company. Expenses uniquely attributable to the
Accounts of a particular Participant (and not paid by the Company), including
but not limited to expenses of a discount brokerage account, shall, to the
extent permitted by law, be charged to such Account and shall not be treated as
a general Trust expense chargeable to the Accounts of all Participants. Expenses
uniquely attributable to a particular Investment Fund (and not paid by the
Company) shall be charged to such Investment Fund and shall not be treated as a
general expense chargeable to the Accounts of all Participants.
6.04 Trust Fund. The Trust under this Plan shall be a separate entity
aside and apart from Employers or their assets. All Elective Deferrals, Matching
Contributions, Company Contributions, Traveler Contributions and Rollover
Contributions to the Plan shall be paid into the Trust, and all benefits payable
under the Plan shall be paid from the Trust. An Employer shall have no rights or
claims of any nature in or to the assets of the Trust Fund except (1) the right
of the Company to require the Trustee to hold, use, apply and pay such assets
held by the Trustee, in accordance with the directions of the Plan
Administrator, for the exclusive benefit of the Participants and their
Beneficiaries, and (2) the Employers' rights of reversion as provided in
Sections 5.07 and 6.11. The Trust, and the corpus and income thereof, shall in
no event and in no manner whatsoever be subject to the rights or claims of any
creditor of any Employer.
6.05 Separate Accounts. The Plan Administrator shall maintain separate
Accounts for each Participant as described in Section 2.01 hereof. Contributions
shall be credited to Participant's Accounts in accordance with Section 4.06.
Withdrawals and distributions shall be charged to a Participant's Accounts on
the Valuation Date coinciding with or next preceding the date such withdrawal or
distribution is made from the Participant's Accounts. Earnings, gains and losses
shall be credited or charged to a Participant's Accounts on the Valuation Date
coinciding with or next following the date such amounts are actually credited or
charged by the Investment Fund in which such Participant's Accounts are
invested. Expenses shall be charged to a Participant's Accounts on the Valuation
Date coinciding with or next preceding the date
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such expenses are actually paid by the Investment Fund in which such
Participant's Accounts are invested.
6.06 Investment Committee. The Company shall appoint an Investment
Committee composed of one (1) or more persons who are officers, directors or
employees of the Company or a Related Company to select Investment Funds, to
appoint and remove any Investment Manager, to engage consultants, to formulate
an investment policy, to monitor the performance of Investment Funds and
Investment Managers, and to perform such other functions with respect to the
investment of the assets of the Plan as the Company may direct. Each member of
the Committee shall serve until death, resignation, removal, or until he or she
ceases to be an officer, director or employee of any of the Company and any
Related Company. Any member of the Committee may resign upon fifteen (15) days
written notice to the Company. The Company may remove any member of the
Committee upon fifteen (15) days written notice to such member and all other
members of the Committee. If a vacancy occurs in the membership of the Committee
the Company may (and if there would otherwise be no members of the Committee,
shall) appoint a successor member of the Committee who shall have the same
powers and duties as those conferred upon his or her predecessor(s). The Company
shall advise the Trustee, any Investment Manager and the Plan Administrator of
the membership of the Committee and of any change therein; and the Trustee, any
Investment Manager and the Plan Administrator shall be protected in reliance on
any such notice. The Committee shall act at a meeting, or in writing without a
meeting, by the vote or concurrence of a majority of its members; provided,
however, that no member of the Committee who is a Participant shall take part in
any action having particular reference to his or her own benefits hereunder. All
written directions by the Committee may be made over the signatures of a
majority or its members and all persons shall be protected in relying on such
written directions.
6.07 Investment Funds. The assets of the Trust Fund shall be invested in
the Investment Funds authorized by the Investment Committee for the investment
of Participants' Accounts. The Investment Committee may, from time to time,
authorize additional Investment Funds with such investment characteristics, as
it deems appropriate. The Investment Committee may also terminate the use of any
Investment Fund by this Plan as it deems appropriate. The Trustee, Investment
Manager, or the manager of any Investment Fund, may modify the investment
characteristics of any Investment Fund as it deems appropriate. The designation,
modification or termination of any Investment Fund shall be reflected in the
records of the Plan and shall be communicated promptly to the Plan
Administrator. Subject to the provisions of Section 6.08, up to 100% of a
Participant's Accounts may be invested in the Company Stock Fund.
In order to maintain appropriate or adequate liquidity and pending or
pursuant to investment directions, the Trustee, Investment Manager or the
manager of any Investment Fund is authorized to hold such portions of each of
the Investment Funds as it deems necessary in cash or liquid short-term cash
equivalent investments or securities (including, but not limited to, United
States government treasury bills, commercial paper, and savings accounts and
certificates of deposit, and common or commingled trust funds invested in such
securities).
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6.08 Investment of Participants' Accounts.
(a) In General. Except as provided in subsections (b) or (c) below,
a Participant may direct the investment of his or her Accounts among the
Investment Funds in accordance with such rules and procedures as the Plan
Administrator may establish or adopt. A Participant's investment election
made pursuant to this Section shall continue in effect, notwithstanding
any change in the amount of contributions to the Plan, until such
Participant shall change his or her investment election in accordance with
such rules and procedures. If for any reason contributions are allocated
to an Account of a Participant who has not given such direction, such
Account shall be invested in the T. Rowe Price Prime Reserve Fund (or if
that is not an available Investment Fund, then in such available
Investment Fund as has the most similar investment characteristics).
Notwithstanding any provision in this Section to this contrary, the Plan
Administrator, the Trustee or the manager of any Investment Fund may issue
rules and regulations imposing such restrictions and limitations on the
investment of contributions in, and transfers of Account balances among,
the Investment Funds as it deems appropriate from time to time, consistent
with the investment objectives of the respective Investment Funds.
(b) Company Stock. Notwithstanding the foregoing, if the Company in
its sole discretion makes Company Contributions or Matching Contributions
in part or in whole in the form of Company Stock, such Company Stock shall
be held in the Company Stock Fund and shall not be subject to a
Participant's or Beneficiary's direction of investment. A Participant may,
in accordance with such rules and procedures as the Plan Administrator may
establish or adopt, direct the investment of Elective Deferrals, Matching
Contributions, Company Contributions and Rollover Contributions into the
Company Stock Fund. A Participant may not elect to transfer into the
Company Stock Fund any portion of his or her Accounts that are invested in
another investment Fund. Moreover, a Participant may elect to transfer all
or a portion of his or her Accounts that are invested in the Company Stock
Fund (other than the portion that is restricted under this subsection)
into another Investment Fund in accordance with such rules and procedures
as the Plan Administrator may establish or adopt. The Plan Administrator
shall maintain appropriate accounts or subaccounts to reflect the portion
of any Participants' or Beneficiary's Accounts' investment in the Company
Stock Fund which is restricted under this subsection and the portion which
is unrestricted. Cash dividends and other cash distributions received with
respect to the portion of a Participant's or Beneficiary's Accounts
invested in the Company Stock Fund shall be retained in the Company Stock
Fund and reinvested in Company Stock.
(c) Other Employer Stock. If a Participant has an Inactive Account
invested in Employer Stock other than Company Stock, he or she may, in
accordance with such procedures as the Plan Administrator may establish or
adopt, elect to transfer all or a portion of such Account into another
Investment Fund. A Participant may not elect to transfer into Employer
Stock any portion of his or her Accounts that are invested in another
Investment Fund, nor to direct the investment of Elective Deferrals,
Matching Contributions, Company Contributions or Rollover Contributions
into Employer Stock, other than Company Stock as provided by subsection
(c).
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(d) GICs. Accounts of former participants in the Hourly Plan
invested in guaranteed investment contracts ("GICs") issued by the
Principal Mutual Life Insurance Company as of the Effective Date shall
remain invested in such GICs until the GIC matures or the Participant (or
Beneficiary) elects to transfer part or all of his or her Account balance
from such GIC to another Investment Fund. No funds may be transferred into
a GIC. Unless otherwise elected by the Participant (or Beneficiary) in
accordance with such rules and procedures as the Plan Administrator may
establish or adopt, amounts becoming available from maturing GICs will be
invested in the T. Rowe Price Prime Reserve Fund (or if that is not an
available Investment Fund, then in such available Investment Fund as has
the most similar investment characteristics).
(e) Fiduciary Responsibility. Except as expressly limited by
subsections (b) and (c) above, the Participant has sole authority and
discretion, fully and completely, to select the Investment Fund(s) for the
investment of his or her Accounts. The Participant accepts full and sole
responsibility for the success or failure of any selection he or she
makes. To the maximum extent permitted by Section 404(c) of ERISA, neither
the Trustee, the Company, the Investment Committee, any Investment
Manager, the Plan Administrator, any Employer, nor any other person shall
be responsible for losses that are the direct and necessary result of
investment instructions given by any Participant.
6.09 Shareholder Rights in Company Stock.
(a) Participant Directions. Each Participant as a named fiduciary,
shall have the right to direct the Trustee as to the manner of voting and
the exercise of all other rights which a shareholder of record has
(including, but not limited to, the right to sell or retain shares in a
public or private tender offer) with respect to shares (and fractional
shares) of Company Stock which have been allocated to the Participant's
Accounts in the Company Stock Fund and not yet become a Forfeiture under
Section 4.10(d). Subject to subsection (c) below, the Trustee shall vote
or exercise shareholder rights with respect to all shares (and fractional
shares) of Company Stock in the Company Stock Fund for which the Trustee
received timely directions from Participants in accordance with such
Participants' directions. The Trustee shall vote all shares (and
fractional shares) of Company Stock in the Company Stock Fund for which
the Trustee has not received timely voting instructions in the Trustee's
sole discretion. In the event of a tender offer for Company Stock, the
Trustee shall determine in its sole discretion whether to tender any
shares (or fractional shares) of Company Stock in the Company Stock Fund
for which the Trustee does not receive a timely direction from the
Participant or Beneficiary as to whether to tender such shares (and
fractional shares).
(b) Confidentiality. The Trustee shall solicit the directions of
Participants in accordance with Section 6.09(a) and shall follow such
directions by delivering aggregate votes to the Company or otherwise
implementing such directions in any convenient manner that preserves the
confidentiality of the votes or other directions of individual
Participants, except to the extent necessary to comply with applicable
federal laws or state laws that are not preempted by ERISA. Any designee
of the Trustee who assists in the solicitation or tabulation of the
directions of Participants shall certify in writing that he, she or it
will maintain the confidentiality of all directions given.
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(c) Fiduciary Override. Notwithstanding the foregoing, in the event
that the Trustee determines that the manner of voting and the exercise of
other shareholder rights with respect to shares of Company Stock held in
the Company Stock Fund is not proper or is contrary to the provisions of
ERISA (including, without limitation, the fiduciary responsibility
requirements of Section 404 of ERISA), the Trustee shall disregard such
direction and assume responsibility for the voting or exercise of other
shareholder rights with respect to such shares of Company Stock held in
the Company Stock Fund.
6.10 Trust Income. As of each Valuation Date, the fair market value of the
Trust and of each Investment Fund shall be determined (other than the value of
GICs, which shall be as determined by Principal Mutual Life Insurance Company)
and recorded by the Trustee. The Trustee's (or Principal Mutual Life Insurance
Company's) determination of fair market value shall be final and conclusive on
all persons. As of each Valuation Date, the Trustee shall determine the net
income, gains or losses of the Trust Fund and of each separate Investment Fund
since the preceding Valuation Date. The net income, gains or losses thus derived
from the Trust shall be accumulated and shall from time to time be invested as a
part of the Trust Fund. The Trustee shall proportionately allocate the net
income, gains or losses of each Investment Fund among (a) the Participants'
Accounts and (b) the suspense account maintained under Section 5.07(c) for
unallocated Employer contributions, all as valued as of the preceding Valuation
Date (reduced by any distributions therefrom since the preceding Valuation Date)
by crediting (or charging) each such Account by an amount equal to the net
income, gains or losses of each Investment Fund multiplied by a fraction, the
numerator of which is the balance of such Account invested in such Investment
Fund as of the preceding Valuation Date (reduced by any distributions therefrom
since the preceding Valuation Date) and the denominator of which is the total
value of all Accounts invested in such Investment Fund as of the preceding
Valuation Date (reduced by any distributions therefrom since the preceding
Valuation Date). Not later than 90 days after the last day of the Plan Year (or
after such additional date or dates as the Plan Administrator in its discretion
may request), the Trustee shall provide the Plan Administrator and the
Investment Committee with a written report detailing the fair market value of
the Trust and of each Investment Fund as of the last day of the Plan Year (or as
of such other date or dates as the Plan Administrator in its discretion may
request).
6.11 Correction of Error. In the event of an error in the administration
or the Plan or otherwise in maintaining a Participant's Accounts that is not
otherwise corrected in accordance with Sections 5.01, 5.02(c), 5.03(c) or
5.07(c), the Company may in its sole discretion elect for one or more Employers
to contribute such amount as it shall determine is necessary and appropriate to
correct the error. Unless the Company so elects, the Plan Administrator, in its
sole discretion, may correct such error by either (i) in the case of an error
resulting in reducing a Participant's Account balance, allocating Forfeitures
for the Plan Year to such Participant's Accounts in such amount as he shall
determine to be needed to correct the error, or (ii) crediting or charging the
adjustment required to make such correction to or against income or as an
expense of the Trust for the Plan Year in which the correction is made. Except
as provided in this Section, the Accounts of other Participants shall not be
readjusted on account of such error.
6.12 Right of the Employers to Trust Assets. Except as provided in Section
5.07(c) and subject to (a) and (b) below, the Employers shall have no right or
claims to the Trust Fund except the right to require the Trustee to hold, use,
apply, and pay such assets in its possession in
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accordance with the Plan for the exclusive benefit of the Participants or their
Beneficiaries and for defraying the reasonable expenses of administering the
Plan and Trust.
(a) Return of Contributions Where Deduction is Disallowed. If, and
to the extent that, a deduction for Elective Deferrals, Matching
Contributions, Company Contributions, Traveler Contributions, QNECs or
QMACs is disallowed under Section 404 of the Code, Elective Deferrals
conditioned on deductibility will be distributed to the appropriate
Participant and Matching Contributions, Company Contributions, Traveler
Contributions, QNECs and QMACs conditioned upon deductibility will be
returned to the appropriate Employer (as determined by the Plan
Administrator) within one year after the disallowance of the deduction.
(b) Return of Contributions Made Through Mistake of Fact. If, and to
the extent that, a contribution of Elective Deferrals, Matching
Contributions, Company Contributions Traveler Contributions, QNECs or
QMACs is made through mistake of fact, Elective Deferrals will be
distributed to the appropriate Participant and Matching Contributions,
Company Contributions, Travelers Contributions, QNECs and QMACs will be
returned to the appropriate Employer (as determined by the Plan
Administrator) within one year of the payment of the contribution.
ARTICLE VII
Loans and Withdrawals
7.01 Participant Withdrawals. A Participant may, in accordance with this
Section, withdraw all or a portion of his or her Accounts pursuant to Subsection
(a), (b) or (c); provided, however, that the amount withdrawn pursuant to this
Section 7.01 shall not be greater than the amount of the Participant's vested
Accrued Benefit available for withdrawal under this Section. Withdrawals shall
be made pro rata from each Investment Fund in which the Account or Accounts from
which the withdrawal is paid are invested.
(a) In-Service Withdrawals from Rollover Account and Certain Prior
Plan Accounts. A Participant may withdraw, in accordance with Section
7.03, for any reason, all or any portion of his or her Rollover Account
and, subject to the restrictions imposed by Appendix A and Schedule 1, any
other Inactive Account comprising Rollover Contributions or after-tax
employee contributions made under this Plan or a Transferor Plan.
(b) Age 59-1/2 Withdrawals. A Participant who has attained age
59-1/2 may withdraw, in accordance with Section 7.03, for any reason, all
or any part of all of his or her Vested Accrued Benefits in any or all of
his or her Accounts, other than an Account arising under a Transferor Plan
that was subject to Section 412 of the Code.
(c) Hardship Withdrawal. A Participant may withdraw, in accordance
with Section 7.03, for reasons of Hardship, that portion of his or her
Employee 401(k) Account excluding any income or gain credited to his or
her Employee 401(k) Account for any period after December 31, 1988;
subject to the following requirements:
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(1) Maximum Amount. The maximum amount available for a
Hardship withdrawal is 50% of the sum of (i) the balance of the
Participant's Employee 401(k) Account as of December 31, 1988, plus
(ii) the dollar amount of Elective Deferrals made after December 31,
1988, minus (iii) previous Hardship withdrawals of Elective
Deferrals or of income or gain thereon.
(2) Necessary to Satisfy Immediate and Heavy Financial Need.
The amount of the withdrawal on account of Hardship shall not exceed
the amount necessary to satisfy the Participant's immediate and
heavy financial need arising by reason of a Hardship, including the
amount needed to pay any federal, state and local income taxes and
penalties reasonably expected to be incurred by reason of the
withdrawal;
(3) Exhaustion of Other Sources of Funds. The Participant must
have obtained all distributions and withdrawals other than Hardship
distributions or withdrawals, and all non-taxable loans currently
available under the Plan and all Related Plans and the Participant
must have exercised all options to acquire Company Stock granted
under an equity incentive or any similar plan maintained by an
Employer or any Related Company if such options are currently
exercisable and if the fair market value of Company Stock exceeds
the exercise price of the option;
(4) Twelve Month Suspension of Elective Deferrals. The
Participant's Elective Deferrals under the Plan, and voluntary
participant contribution and elective deferrals under all other
qualified and nonqualified plans of deferred compensation (including
equity incentive or any similar plans, and cash or deferred
arrangements which are part of a cafeteria plan within the meaning
of Section 125 of the Code but excluding health or welfare benefits
and flexible spending arrangements that are part of a cafeteria
plan) maintained by an Employer or a Related Company, shall be
suspended for a period of six (6) months following the receipt of
the Hardship withdrawal; and
(5) Limitation on Elective Deferrals in the Year Following the
Hardship Withdrawal. The Elective Deferrals under the Plan and
elective deferrals (as defined in Section 402(g) of the Code) under
any Related Plan for the Participant's taxable years immediately
following the taxable year of the Hardship withdrawal shall not
exceed the maximum amount described in Section 5.01 for such next
taxable year less the amount of such Participant's Elective
Deferrals under the Plan and elective deferrals under any Related
Plan for the taxable year of the Hardship withdrawal.
7.02 Participant Loans. Upon proper application of a Participant for any
reason, the Plan Administrator shall grant a loan to such Participant on such
terms and conditions, consistent with this Section, as the Plan Administrator
shall determine.
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(a) Loan Amount. The maximum loan amount, when added to all
outstanding amounts loaned to the Participant from the Plan and all
Related Plans shall not exceed the least of:
(1) $50,000, reduced by the excess (if any) of:
(A) the Participant's highest outstanding balance of
loans from the Plan and all Related Plans during the one-year
period ending on the day before the date on which such loan is
made, over
(B) the Participant's outstanding balance of loans from
the Plan and all Related Plans on the date on which such loan
is made;
(2) 50% of the Participant's vested Accrued Benefit valued as
of the most recent Valuation Date for which a valuation has been
completed preceding the date of disbursement of the loan.
The minimum loan amount shall be one thousand dollars ($1,000). No loan shall be
available to a Participant unless the maximum loan available under this
subsection (a) exceeds one thousand dollars ($1,000). A Participant may not have
more than one loan from the Plan outstanding at any time.
(b) Loan Terms. Any loan made under this Section 7.02 shall, by its terms,
be required to be repaid within five (5) years, unless the loan is used to
acquire a 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 Participant, in
which case the loan shall, by its terms, be required to be repaid within fifteen
(15) years.
(c) Level Amortization. All loans, except as provided in the regulations
prescribed by the Secretary of the Treasury, shall be amortized over the term of
the loan in substantially level payments not less frequently than quarterly. A
Participant's loan shall be repaid by means of payroll deduction.
(1) Authorized Leave of Absence. Notwithstanding the foregoing
provisions of this Section, a Participant's loan payments shall be
suspended for a period of up to one year while the Participant is on
an unpaid Authorized Leave of Absence (other than a military leave
described in clause (2) below); provided that the loan must be
repaid within the term specified in subsection (b) and the
installments due after the earlier of the Participant's resumption
of active service or the first anniversary of the commencement of
the Authorized Leave of Absence may not be less than the
installments payable immediately prior to the commencement of the
Authorized Leave of Absence.
(2) Military Leave. Notwithstanding the provisions of
subsection (b) and (a), a Participant's loan repayments shall be
suspended as permitted under Section 414(u)(4) of the Code during
periods of absence from employment due to Qualified Military Leave
effective as of December 12, 1994.
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(d) Loans Granted on a Reasonably Equivalent Basis. The Plan
Administrator may grant such loans and may direct the Trustee to lend
Trust Fund assets to such Participant, provided that such loans are
available to all Participants on a reasonably equivalent basis, are not
made available to Highly Compensated Employees in amounts greater than the
amounts made available to other Employees, bear a reasonable rate of
interest, and are adequately secured.
(e) Pledge of Accounts. Any loan made pursuant to this Section 7.02
shall be made pro rata from the Participant's Accounts. If a Participant's
Account is invested in more than one Investment Fund at the time of the
loan, the loan shall be made pro rata from each Investment Fund (other
than the Company Stock Fund) in which the Accounts from which the loan is
disbursed are invested, except to the extent an Inactive Account is not
available for loans as set forth in Schedule 1. Such loan and any accrued
but unpaid interest with respect thereto, shall constitute a first lien
upon the interest of such Participant in the Accounts from and to the
extent to which the loan is made and, to the extent that the loan may be
unpaid at the time the Participant's Accounts become payable, shall be
deducted from the amount payable to such Participant or his Beneficiary at
the time of distribution of any portion of his or her Accounts. In the
event that a Participant fails to repay a loan according to its terms and
foreclosure occurs, the Plan may foreclose on the portion of the
Participant's Accounts which secure the loan and which would be
distributable to the Participant as of the earliest date on which the
Participant could elect a distribution or withdrawal pursuant to this
Article or Article VII. Such foreclosed amount shall be deemed to be a
distribution.
(f) Loan Earmarked as a Separate Investment for Participant's
Accounts. The note representing the loan shall be segregated as a separate
Investment Fund held by the Trustee as a separate earmarked investment
solely for the account of the Participant. Interest and principal payments
on a Participant's loan shall be credited to each of the Participant's
Accounts in the ratio that the amount of the loan borrowed from the
Account bears to the total amount of the loan borrowed from all of the
Participant's Accounts. Interest and principal payments shall be invested
in accordance with the Participant's investment election under Section
6.08 in effect at the time such interest and principal payment is made.
(g) Spousal Consent. If any part of the loan will be disbursed from
a Restricted Account, the Participant must obtain the consent of his or
her spouse, if any, to use of his or her Accounts as security for the
loan. Spousal consent shall be obtained no earlier than the beginning of
the 90-day period that ends on the date on which the loan is to be so
secured. The consent must be in writing, must acknowledged the effect of
the loan and must be witnessed by a notary public. Such consent shall
thereafter be binding with respect to the consenting spouse or any
subsequent spouse with respect to that loan. A new consent shall be
required if the Accounts are used as security for the renegotiation,
extension, renewal or other revision of the loan.
(h) Loans Subject to Terms and Conditions Imposed by Plan
Administration. Any loan made pursuant to this Section, subject to the
foregoing requirements, shall be subject to such origination fee and other
terms and conditions as the Plan Administrator
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may in its discretion impose. The Plan Administrator may adopt such
non-discriminatory rules and regulations relating to loans to Participants
as it may deem appropriate.
7.03 Request for Distribution. A withdrawal or loan shall be paid only if
the Participant or Beneficiary files a written request for a withdrawal with the
Plan Administrator on such form as the Plan Administrator shall provide or
permit and in accordance with such rules and regulations as the Plan
Administrator may prescribe. A withdrawal or loan disbursed to a married
participant from a Restricted Account shall require the consent of the
participant's spouse in accordance with Appendix A. A withdrawal or loan shall
be paid as soon as administratively feasible after the first Valuation Date that
after the Plan Administrator receives a valid written request for a withdrawal
or loan.
ARTICLE VIII
Benefits
8.01 Payment of Benefits in General. Subject to the special rules
applicable to a Restricted Accounts set forth in Appendix A, a Participant's
benefits under this Plan shall be payable in accordance with the provisions of
this Article. Except as otherwise specifically provided, the provisions of this
Article shall apply to all distributions occurring on or after the Effective
Date including distributions to Participants (or to the Beneficiaries of
deceased Participants) who had a Termination of Employment prior to the
Effective Date.
8.02 Payment on Termination of Employment. If a Participant has a
Termination of Employment, the Participant (or if the Participant has died, his
or her Beneficiary) shall be entitled to a distribution of the vested portion of
the Participant's Accrued Benefit in such one of the following methods as the
Participant (or if the Participant has died and has not elected a form of
distribution which precludes his or her Beneficiary from making a subsequent
election, the Participant's Beneficiary), may elect by written notice to the
Plan Administrator in a form acceptable to the Plan Administrator:
(a) a single lump sum;
(b) installments at monthly, quarterly or annual intervals over a
period certain not exceeding the life expectancy (as defined in Section
8.06(e)) of the Participant, or if the Participant's Beneficiary is an
individual the joint and last survivor life expectancy (as defined in
Section 8.06(e)) of the Participant and his or her Beneficiary or the life
expectancy of the Beneficiary (if the Beneficiary is receiving the
installments) and in compliance with the requirements of Section 8.06.
Notwithstanding the foregoing, if for any reason no election of a form of
benefit is on file with the Plan Administrator when payment of the Participant's
Accrued Benefit is required under Section 8.03, or if the Participant's vested
Accrued Benefit does not exceed $5,000 ($3,500 for the Plan Year 1997), at the
time of the Participant's Termination of Employment the Trustee will pay the
Participant's vested Accrued Benefit in a single lump sum.
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8.03 Time of Payment.
(a) General. Distribution of a Participant's benefits upon
Termination of Employment will normally be available as soon as reasonably
practicable after the Valuation Date coinciding or with or next following
the Participant's Termination of Employment, but not more than 60 days
following the end of the Plan Year in which his or her Termination of
Employment occurred. However, except as otherwise provided in this
Section, a distribution shall be paid only if and after the Participant or
Beneficiary files a written request for a distribution with the Plan
Administrator on such form as the Plan Administrator shall provide or
permit and in accordance with such rules and regulations as the Plan
Administrator may prescribe. The time of any distribution is subject to
subsection (b), (c) and (d).
(b) Consent Requirement. If the Participant's distributable Account
balance is more than $5,000 ($3,500 for the Plan Year 1997), and if the
Participant is living but has not attained age 65, distribution will not
be made before the Participant attains age 65 or dies without the
Participant's prior written consent. The Plan Administrator will notify
each such terminated Participant of his or her right to give or withhold
such consent at least 30 days, but no more than 90 days, before the date
distribution is made (if in a lump sum) or begins (if in installments).
Such distribution may be made less than 30 days after such notice is given
if the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision whether to elect a distribution, and
the Participant, after receiving the notice, affirmatively elects a
distribution.
(c) Limitation on Mandatory Deferral. The making (if in a lump sum)
or commencement (if in installments) of any distribution shall not be
delayed without the consent of the Participant (or Beneficiary) beyond
sixty (60) days after the close of the Plan Year in which occurs the
latest of (i) the Participant's Termination of Employment, or (ii) the
Participant's Normal Retirement Date. The failure of a Participant or
Beneficiary to otherwise elect payment in accordance with the provisions
of the Plan shall be deemed to be an election to defer the making or
commencement of payment of benefits until such Participant files a request
in accordance with subsection (a) and (if applicable) a consent in
accordance with subsection (b), or until the Required Distribution Date as
provided in subsection (d) below.
(d) Required Distribution Date. Notwithstanding any other provision
of this Plan or any Participant election, payment of benefits shall be
made (if in a lump sum) or shall commence (if in installments) not later
than the Participant's Required Distribution Date, or such later date as
the Secretary of the Treasury or his or her delegate shall by applicable
regulation, ruling or notice permit. If the payment is made in
installments, the installment schedule shall comply with Section 8.06. If
the payment is made by reason of the death of the Participant, the
schedule shall comply with Section 8.05(d).
8.04 Lump Sum Payment Without Election. Notwithstanding any other
provision of this Article VIII, if a Participant (or the Beneficiary of a
deceased Participant) is entitled to a distribution (including distributions
with respect to Participants who had a Termination of
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Employment prior to January 1, 1997) and if the value of a Participant's vested
Accrued Benefit does not exceed $5,000 ($3,500 for the Plan Year 1997), the Plan
Administrator shall direct the immediate distribution of such benefit in a
single lump sum regardless of any election or consent of the Participant, his or
her spouse or other Beneficiary; provided, however, that no cash-out payment
under this subsection shall be made after distribution of benefits has begun
without the consent of the Participant or (if the Participant has died and his
or her surviving spouse is his or her Beneficiary) his or her surviving spouse.
8.05 Payment Upon Death.
(a) Designated Beneficiary. Each Participant shall designate a
Beneficiary to receive payment of that portion, which may be all, of his
or her Accrued Benefit that is payable after the Participant's death, on
such form as the Plan Administrator shall provide or permit and in
accordance with such rules and regulations as the Plan Administrator may
prescribe. The Participant may change his or her Beneficiary from time to
time by filing a Beneficiary designation in writing with the Plan
Administrator. No designation of Beneficiary or change of Beneficiary
shall be effective unless and until it is received by the Plan
Administrator during the Participant's lifetime and, if applicable, unless
and until the consent of the Participant's spouse (in accordance with
subsection) is received by the Plan Administrator.
(b) Default Beneficiary. If a Participant shall fail to file a valid
Beneficiary designation, or if all persons designated as the Beneficiary
shall have died, (or, in the case of a Beneficiary other than an
individual, ceased to exist), or if, after a reasonable search, the Plan
Administrator is unable to locate the Participant's Beneficiary within a
period of two years following the Participant's death, the Participant's
Beneficiary shall be the first of the following in order of precedence:
(1) the Participant's surviving spouse;
(2) the Participants then-living descendants, if any, per
stirpes;
(3) the Participant's then-living parent or parents,
equally;
(4) the estate of the last to die of the Participant and any
designated Beneficiary.
(c) Spousal Consent. If the Participant is married, his or her
designation of a Beneficiary other than his or her surviving spouse will
not be valid unless the spouse has consented to such designation of
Beneficiary. Such consent shall be:
(1) in a writing acknowledging the effect of the consent;
(2) signed by the Participant's spouse and witnessed by a
notary public or (if the Plan Administrator is an individual
employed by the Company or a Related Employer) the Plan
Administrator or an employee of the Company or a Related Employer
working under the organizational supervision of the Plan
Administrator;
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(3) effective only for the spouse who gives the consent;
(4) effective only with respect to the specific beneficiary
named in the consent unless the spouse voluntarily in such consent
expressly permits subsequent elections of Beneficiaries without
further spousal consent and acknowledges the spouse's right to limit
the consent to a specific Beneficiary; and
(5) irrevocable unless and until the Participant revokes his
or her designation of Beneficiary.
However, the consent of a Participant's spouse shall not be required
if (i) it is established to the satisfaction of a Plan representative that
such consent may not be obtained because there is no spouse, or because
the spouse cannot be located, (ii) the Participant is legally separated or
the Participant has been abandoned (within the meaning of local law) and
the Participant has a court order to such effect, or (iii) because of such
other circumstances as the Secretary of the Treasury may by regulations
prescribe. If the spouse is legally incompetent to give consent, the
spouse's legal guardian, even if the guardian is the Participant, may give
consent. To the extent provided in any Qualified Domestic Relations Order
(as defined in Section 13.03), the former spouse of a Participant shall be
treated as the surviving spouse of such Participant for purposes of
providing consent in accordance with this Section 8.05.
(d) Period of Distribution. Notwithstanding the foregoing Sections
of this Article VIII, if a Participant dies and if at the time of his or
her death such Participant has not attained his or her Required
Distribution Date and installment payments to the Participant have not yet
begun under Section 8.02(b) and 8.06, such Participant's vested Accrued
Benefit shall be distributed no later than December 31 of the calendar
year which contains the fifth anniversary of the Participant's death;
except that if the Beneficiary is the Participant's surviving spouse, the
Participant's vested Accrued Benefit shall be distributed no later than
December 31 of the calendar year in which the Participant would have
attained age 70-1/2.
If the surviving spouse of a Participant who is the Participant's
Beneficiary dies before distributions have begun to the surviving spouse
under this Section 8.05(d), distributions shall be made in accordance with
this Section 8.05(d) as if the surviving spouse were the Participant.
Notwithstanding the foregoing Sections of this Article VIII, if for
any reason any portion of a Participant's vested Accrued Benefit is to be
paid after his or her death to a trust or to an estate, the Plan
Administrator shall direct the immediate distribution of such benefit in a
single lump sum.
(e) Rights of Beneficiary. The Beneficiary of a Participant who has
died shall have the same rights and obligations as the Participant with
respect to the portion of the interest of the Participant as to which he
or she is the Beneficiary, to direct the investment of Accounts pursuant
to Section 6.08 and to direct the Trustee with respect to exercise of
rights in Company Stock pursuant to Section 6.09.
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8.06 Minimum Distribution Requirements.
(a) If a Participant's vested Accrued Benefit is to be distributed
in installments, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar
year (as defined in subsection (e)), shall at least equal the quotient
obtained by dividing the Participant's benefit by the applicable life
expectancy (as defined in subsection (e)).
(b) The amount to be distributed each year, beginning with
distributions for the first distribution calendar year, shall not be less
than the quotient obtained by dividing the Participant's vested Accrued
Benefit by the lesser of (i) the applicable life expectancy (as defined in
subsection (e) below) as of the distribution calendar year or (ii) if the
Participant's spouse is not the Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Prop. Treas. Reg. Section
1.401(a)(9)-2. Distributions after the death of the Participant shall be
distributed using the applicable life expectancy as the relevant divisor
without regard to Prop. Treas. Reg. Section 1.401(a)(9)-2.
(c) The minimum distribution required for the Participant's first
distribution calendar year shall be made on or before the Participant's
Required Distribution Date. The minimum distribution for other calendar
years, including the minimum distribution for the distribution calendar
year in which the Participant's Required Distribution Date occurs, shall
be made on or before the December 31 of that distribution calendar year.
(d) For purposes of this Section, the Participant's vested Accrued
Benefit shall be the Participant's vested Account balances as of the last
Valuation Date in the calendar year immediately preceding the distribution
calendar year (the "valuation calendar year") increased by the amount of
any vested contributions or Forfeitures allocated to the Participant's
Accounts in the valuation calendar year after the relevant Valuation Date
and decreased by distributions made in the valuation calendar year after
the relevant Valuation Date; provided, however, that, if any portion of
the minimum distribution for the first distribution calendar year is made
in the second distribution calendar year on or before the Required
Distribution Date, the amount of the minimum distribution made in the
second distribution calendar year shall be treated as if it had been made
in the immediately preceding distribution calendar year.
(e) For purposes of this Section:
(1) "Life expectancy" and "joint and last survivor life
expectancy" means the life expectancy computed using the expected
return multiples in Tables V and VI of Treas. Reg. Section 1.72-9.
For the purposes of this Article, the life expectancy of a
Participant and of his or her spouse and the joint and last survivor
life expectancy of the Participant and his or her spouse shall, if
so elected by the Participant or his spouse, be redetermined in
accordance with such uniform and non-discriminatory rules as the
Plan Administration shall establish, but may not be redetermined
more frequently than annually. Such election shall be irrevocable as
to the Participant or spouse and shall apply to all subsequent
years. In the absence of such an election, such life expectancies
shall not be
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redetermined. For purposes of this Article, the life expectancy of a
nonspouse Beneficiary shall not be redetermined.
(2) "Distribution calendar year" means any calendar year for
which a minimum distribution is required. For distributions
beginning before the Participant's death, the first distribution
calendar year shall be the calendar year immediately preceding the
calendar year which contains the Participant's Required Distribution
Date. For distributions beginning after the Participant's death, the
first distribution calendar year shall be the calendar year in which
distributions are required to begin as described in Section 8.05(d).
(3) "Applicable life expectancy" means the life expectancy (or
joint and last survivor life expectancy) calculated using the
attained age of the Participant (or Beneficiary) as of the
Participant's (or Beneficiary's) birthday in the applicable calendar
year reduced by one for each calendar year which has elapsed since
the date life expectancy (or joint and last survivor life
expectancy) was first calculated. If life expectancy (or joint and
last survivor life expectancy) is being redetermined, the applicable
life expectancy shall be the life expectancy as so redetermined. The
applicable calendar year shall be the first distribution calendar
year, and, if life expectancy (or joint and last survivor life
expectancy) is being redetermined, such succeeding calendar year.
(f) With respect to distributions under the Plan made for calendar
years beginning on or after January 1, 2001 the Plan will apply the
minimum distribution requirements of section 401(a)(9) of the Internal
Revenue Code in accordance with the regulations under section 401(a)(9)
that were proposed on January 17, 2001, notwithstanding any provision of
the Plan to the contrary. The amendment contained in this subsection shall
continue in effect until the end of the last calendar year beginning
before the effective date of final regulations under section 401(a)(9) or
such other date as may be specified in guidance published by the Internal
Revenue Service.
8.07 Facility of Payment. If a Participant or Beneficiary is (i) declared
an incompetent or is a minor, (ii) a conservator, guardian, or other person
legally charged with his or her care has been appointed, and (iii) written
notice of such incompetency and appointment is filed with the Plan Administrator
before distribution of benefits, then any benefits to which such Participant or
Beneficiary is entitled shall be payable to such conservator, guardian, or other
person legally charged with his or her care. Neither the Company, any Related
Employer, the Trustee, the Investment Committee, any Investment Manager, nor the
Plan Administrator, shall be under any duty to see to the proper application of
such payments made to a Participant, conservator, guardian, or relatives of a
Participant.
8.08 Form of Payment. Each distribution shall be paid in cash (including
negotiable check or other cash equivalent), except that a Participant or
Beneficiary may elect in accordance with such procedures as the Plan
Administrator may establish or adopt to receive that portion of his or her
distributable Accounts invested in the Company Stock Fund or in other Employer
Stock in the form of whole shares (with cash in lieu of fractional shares) of
such Company Stock or other Employer Stock.
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8.09 Direct Rollover to Another Plan. Notwithstanding any provision of
this Plan to the contrary, a Participant or other Distributee (as defined
below), may elect, at such time and in such manner as prescribed by the Plan
Administrator, to have all or any portion of the benefits payable to such
Distributee which constitutes an Eligible Rollover Distribution (as defined
below) as paid by the Trustee directly to the Eligible Retirement Plan specified
by such Distributee. Such election shall be subject to such reasonable
administrative requirements as the Plan Administrator may from time to time
establish which may include, but shall not be limited to, requirements
consistent with Treasury Regulations and other guidance issued by the Internal
Revenue Service permitting de minimis requirements for amounts eligible to be
rolled over or paid partly to the Participant and partly rolled over. An
election may be made pursuant to this Section only after the Distributee has met
otherwise applicable requirements for receipt of a distribution under the Plan,
including any applicable requirements of Appendix A. As used in this Section,
the following terms shall have the following meanings:
(1) "Eligible Rollover Distribution" means any distribution of
all or any portion of the balance to the credit of the Distributee,
except that an Eligible Rollover Distribution does not include any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or
life expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required
under Section 8.06(b); any distribution by reason of Hardship
pursuant to Section 7.01(b); and except as provided in the following
sentence the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities). A
portion of a distribution shall not fail to be an Eligible Rollover
Distribution merely because the portion consists of after-tax
employee contributions which are not includable in gross income.
However, such portion may be transferred only to an individual
retirement account or annuity described in Section 408(a) or (b) of
the Code, or to a qualified defined contribution plan described in
Section 401(a) or 403(a) of the Code that agrees to separately
account for amounts so transferred, including separately accounting
for the portion of such distribution which is includable in gross
income and the portion of such distribution which is not so
includable.
(2) "Eligible Retirement Plan" means an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distributions. However, in the case
of an Eligible Rollover Distribution to a Participant's surviving
spouse or surviving former spouse who is a Distributee pursuant to a
Qualified Domestic Relations Order (as defined in Section 13.03), an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity. For purposes of this Section an
Eligible Retirement Plan shall also mean an annuity contract
described in section 403(b) of the Code and an eligible plan under
section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any
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agency or instrumentality of a state or political subdivision of a
state and which agrees to separately account for amounts transferred
into such plan from this plan. The definition of Eligible Retirement
Plan shall also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relation order, as defined in section
414(p) of the Code.
(3) "Distributee" means a Participant. In addition, a
Participant's surviving spouse and a former spouse who is the
alternate payee under a Qualified Domestic Relations Order are
Distributees with regard to the interest of such spouse or former
spouse.
(4) "Direct Rollover" means a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
8.10 Deduction of Taxes from Amounts Payable. The Trustee may deduct from
any amounts to be distributed under this Plan such amounts as the Trustee, in
his, her or its sole discretion, deems proper to protect the Trustee and the
Trust against liability for the payment of death, succession, inheritance,
income, or other federal, state or local taxes, and out of the money so
deducted, the Trustee may discharge any such liability and pay the amount
remaining to the Participant or his or her Beneficiary, as the case may be.
ARTICLE IX
Administration
9.01 Sponsor Rights and Duties. The Company shall have overall
responsibility for the administration and operation of the Plan, which the
Company shall discharge by the appointment and removal (with or without cause)
of the Trustee, the Investment Committee and the Plan Administrator.
9.02 Plan Administrator Rights and Duties. The Plan Administrator shall
administer and enforce the Plan and the Trust in accordance with the terms of
the Plan and the Trust Agreement and shall have all powers necessary to
accomplish that purpose, including but not by way of limitation, the following,
all to be exercised in the sole and absolute discretion of the Plan
Administrator:
(a) To issue rules, regulations and procedures and prescribe forms
necessary for the proper conduct and administration of the Plan and to
change, alter, or amend such rules, regulations and procedures and forms;
(b) To construe the Plan and Trust Agreement;
(c) To determine all questions arising in the administration of the
Plan, including those relating to the eligibility of persons to become
Participants; the rights of Participants, former Participants and their
Beneficiaries; and Employer contributions,
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(d) To determine and advise the Trustee of the amount and kind of
benefits payable to Participants or their Beneficiaries;
(e) To authorize the Trustee to disburse funds from the Trust Fund
in accordance with the provisions of the Plan;
(f) To employ and compensate such accountants and attorneys (who may
but need not be the accountants or attorneys of the Company) and other
persons to render advice, and such clerical employees as the Plan
Administrator may deem necessary to the performance of his, her or its
duties;
(g) To invest all or a portion of the Trust Fund in loans to
Participants and to segregate the notes representing such loan in a
separate fund in accordance with Section 7.2;
(h) To have prepared and furnished to Participants and Beneficiaries
all information required under federal law or provisions of this Plan to
be furnished to them;
(i) To have prepared and filed or published with the Department of
Labor and the Department of Treasury or other governmental agency all
reports and other information required under federal law;
(i) To make available to Participants upon request, for examination
during business hours, such records as pertain exclusively to the
examining Participant; and
(j) To hear, review and determine claims for benefits.
(k) To delegate his, her or its responsibilities under the Plan to
such person or persons as he, she or it may deem advisable;
(l) To do all other acts and things necessary he, she or it deems in
his, her or its sole discretion to be necessary or appropriate for the
administration of the Plan.
9.03 Plan Administrator Bonding and Expenses. The Plan Administrator shall
serve without bond (except as otherwise required by federal law) and without
compensation for his, her or its service as such; but all expenses incurred in
the administration of the Plan and the Trust shall be paid by the Trust pursuant
to Section 6.03 except to the extent paid by the Company.
9.04 Information To Be Supplied by Participants. Participants and
Beneficiaries shall provide the Plan Administrator and the Trustee or their
delegates with such information, as they shall from time to time determine to be
necessary in the discharge of their duties for the administration of the Plan
and the Trust. The Plan Administrator and the Trustee may rely conclusively on
the information certified to them by a Participant or Beneficiary.
9.05 Information To Be Supplied by Employers. Employers shall provide the
Plan Administrator and the Trustee or their delegates with such information, as
they shall from time to time determine to be necessary in the discharge of their
duties for the administration of the Plan
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and the Trust. The Plan Administrator and the Trustee may rely conclusively on
the information certified to them by an Employer.
9.06 Records. The regularly kept records of the Plan Administrator, the
Company and the other Employers shall be conclusive evidence of the Service of a
Participant, his or her Compensation, his or her age, marital status, status as
an Eligible Employee, and all other matters contained in such records applicable
to this Plan.
9.07 Electronic Media. Under procedures authorized or approved by the Plan
Administrator, any form for any notice, election, designation, or similar
communication required or permitted to be given to or received from a
Participant or Beneficiary under this Plan may be made available to such
Participant or Beneficiary in an electronic medium (including computer network,
e-mail or voice response system) and any such communication to or from a
Participant or Beneficiary through such electronic media shall be fully
effective under this Plan for such purposes as such procedures shall prescribe;
provided, however, that the consent of a spouse under Section 7.02(g), 8.05(c),
or Appendix A, shall be effective only if made in a written document. Any record
of such communication retrieved from such electronic medium under its normal
storage and retrieval parameters shall be effective as a fully authentic
executed writing for all purposes of this Plan absent manifest error in the
storage or retrieval process.
9.08 Plan Administrator Decisions Final. The Plan Administrator shall have
discretion to determine all matters within his, her or its jurisdictions. The
decisions of the Plan Administrator shall be final, binding and conclusive upon
the Employers, and the Trustee and upon each Employee, Participant, former
Participant, Beneficiary and every other person or party interested or
concerned.
ARTICLE X
Claims Procedure
10.01 Initial Claim for Benefits. Except as provided in Section 8.03 for
requests for and consents to distribution in certain circumstances, and in
Appendix A, no claim shall be required for benefits routinely due to be made or
begin under this Plan. Any Participant or Beneficiary (a "Claimant") may submit
to the Plan Administrator (or to such other person or persons as may be
designated by the Plan Administrator) a claim for benefits not received or
received in an improper amount. A claim shall be in writing in such form as is
provided or approved by the Plan Administrator. A Claimant shall have no right
to seek review of a denial of benefits, or to bring any action in any court to
enforce a claim for benefits, prior to his or her filing a claim for benefits
under this Section 10.01 and exhausting his or her rights to review under
Section 10.02.
When a claim for benefits has been filed properly, the Plan Administrator
shall evaluate such claim for benefits and notify the Claimant of its approval
or the denial within ninety (90) days after the receipt of such claim unless
special circumstances require an extension of time for processing the claim. If
such an extension of time for processing is required, the Plan administrator
shall furnish written notice of the extension to the Claimant prior to the
termination of the initial ninety (90) day period. The notice shall specify the
special circumstances requiring an extension and the date by which a final
decision will be reached (which date shall not be later
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than one hundred and eighty (180) days after the date on which the claim was
filed). The Plan Administrator shall give the Claimant written notice whether
the claim is granted or denied, in whole or in part. If a claim is denied, in
whole or in part, the Plan Administrator shall give the Claimant written notice
which shall contain (1) the specific reasons for the denial, (2) references to
pertinent plan provisions upon which the denial is based, (3) a description of
any additional material or information necessary to perfect the claim and an
explanation of why such material or information is necessary, and (4) the
Claimant's rights to seek review of the denial.
10.02 Review of Claim Denial. If a claim is denied, in whole or in part
(or if within the time periods presented in Section 10.01 the Claimant has not
received an approval or a denial and the claim is therefore deemed denied), the
Claimant shall have the right to request that the Plan Administrator (or such
other person or persons as may be designated by the Plan Administrator) review
the denial. The Plan Administrator may in the sole and absolute discretion of
the Plan Administrator appoint a third person other than the Plan Administrator,
with such person's consent but without the consent of any Claimant, to make any
decision on review of a claim under this Section 10.02, provided such person
acknowledges in writing that he, she or it is a fiduciary with respect to this
Plan for such purpose. A request for review shall be in writing and must be
filed with the Plan Administrator within sixty (60) days after the date on which
the Claimant received written notification of the denial. A Claimant (or his or
her duly authorized representative) may request and receive copies of pertinent
documents and submit issues and comments in writing to the Plan Administrator
(or other designated person). Within sixty (60) days after such request for
review is received, the Plan Administrator (or other designated person) shall
reconsider the decision and advise the Claimant in writing of the decision on
review, unless special circumstances require an extension of time for processing
the review, in which case the Plan Administrator (or other designated person)
shall give the Claimant a written notification within such initial sixty (60)
day period specifying the reasons for the extension and advising the Claimant
when such review shall be completed. Such review shall be completed within one
hundred and twenty (120) days after the date on which the request for review was
filed. The Plan Administrator (or other designated person) shall forward the
decision on review to the Claimant in writing and shall include specific reasons
for the decision and references to plan provisions upon which the decision is
based. A decision on review shall be final and binding on all persons for all
purposes. No action may be brought in any court respecting benefits, which were
the subject of a denial of a claim for benefits (other than an action by the
Plan Administrator to enforce such denial) more than one (1) year after the
denial of such claim. If a Claimant shall fail to file a request for review in
accordance with the procedures described in Sections 10.01 and 10.02, such
Claimant shall have no right to review and shall have no right to bring action
in any court and the denial of the claim shall become final and binding on all
persons for all purposes.
ARTICLE XI
Amendment, Merger and Termination of the Plan
11.01 Amendments. The Company may amend, modify, change, revise,
discontinue or terminate the Plan at any time prospectively or retroactively.
Such amendment, modification, change, revision, discontinuance or termination
shall be done by written resolution of the Board of Directors of the Company,
except that (i) an amendment or modification required (in the
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reasonable judgment of the Plan Administrator or the Company) to comply with
changes in applicable law or to permit the issuance of or conform to the
conditions of a favorable determination letter from the Internal Revenue Service
on the qualification of the Plan under Section 401(a) of the Code may be done by
written instrument signed on behalf of the Company by the Plan Administrator or
officer of the Company; and (ii) the Plan Administrator may revise Schedule 1
from time to time to reflect the Accounts maintained from time to time under the
Plan as long as such revision does not have an effect prohibited by this Section
or Section 11.02. However, except as authorized or permitted by provisions of
the Code, or any other statute relating to employees' trusts, or regulations or
ruling issued pursuant thereto, no amendment shall: (i) increase the duties or
liabilities of the Trustee or the Plan Administrator without the consent of the
person affected; (ii) have the effect of vesting in any Employer any interest in
any funds, securities or other property subject to the terms of this Plan and
the Trust Agreement; or authorizing or permitting at any time any part of the
corpus or income of the Trust Fund to be used or diverted to purposes other than
for the exclusive benefit of Participants and their Beneficiaries, except as
provided in Sections 5.07 and 6.11 or applicable law as in effect from time to
time, or (iii) divest any Participant of his or her vested Account Balance,
decrease the Accrued Benefit of any Participant, or eliminate or reduce any
early retirement benefit or retirement-type subsidy or eliminate an optional
form of benefit except as permitted by Section 411(d)(6) of the Code and
Treasury Regulations and rulings thereunder or other applicable law as in effect
from time to time.
11.02 Plan Merger. The Company may direct the merger or consolidation of
this Plan with, or transfer of assets from this Plan to, another employee
benefit plan qualified under Section 401(a) of the Code ("Other Plan"), or may
direct the Trustee to accept the merger or consolidation of a Transferor Plan
into, or a transfer of assets and liabilities, or portion thereof, from a
Transferor Plan to this Plan, on such terms and conditions as the Company in its
sole discretion deems desirable, in the same manner (and subject to the same
conditions) as an amendment to this Plan under Section 11.01. However, the Plan
shall not merge or consolidate with, or transfer to or receive from any
Transferor Plan or Other Plan any assets or liabilities, (i) unless each
Participant would receive a benefit immediately after the merger, consolidation
or transfer (if the Plan were then terminated) which is equal to or greater than
the benefit to which he would have been entitled immediately before the merger,
consolidation, or transfer (if the Plan were then terminated), and (ii) the
merger, consolidation or transfer of assets does not have an effect prohibited
by clause (iii) of Section 11.01 above. The portion of any assets and
liabilities received from a Transferor Plan that was attributable to elective
contributions, qualified non-elective contributions or qualified non-elective
contributions, or matching contributions (within the meaning of Treas. Reg.
Section 1.401(k)-1(g)(13) shall remain subject to the distribution restrictions
of Treas. Reg. Section 1.401(k)-1(d). The portion of any assets and liabilities
received from a Transferor Plan that was subject to Section 412 of the Code
shall not be distributable before the earlier of the Participant's Normal
Retirement Date or Termination of Employment except as otherwise required by
Section 401(a)(9) of the Code. No merger, consolidation, or transfer of assets
shall impose on the Company or any Related Company any liabilities or
obligations of the sponsor of a Transferor Plan respecting the Transferor Plan
or accounts transferred from the Transferor Plan (including but not limited to
the obligation to make contributions to such accounts) unless the Company or
Related Company expressly assumes such liabilities or obligations.
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11.03 Plan Termination. The Company, by resolution of the Board of
Directors, may reduce, suspend or discontinue Employer contributions hereunder,
and terminate the Plan at any time in whole or in part, provided, however, that
the termination of the Plan or the reduction, suspension or discontinuance of
contributions hereunder shall not have any retroactive effect as to deprive any
Participant or Beneficiary of any benefit already accrued.
11.04 Payment Upon Termination. Upon termination of the Plan or complete
discontinuance of Employer contributions, the unvested portion of each
Participant's Accrued Benefit that has not been forfeited pursuant to Section
4.10 prior to the termination of the Plan or complete discontinuance of Employer
contributions shall become fully vested and nonforfeitable. Upon a partial
termination of the Plan, the Accrued Benefit of each former Active Participant
who lost status as an Active Participant because of such partial termination
shall become fully vested and nonforfeitable. In the event of termination of the
Plan and after payment of all expenses, the Plan Administrator may direct that
either (1) each Participant and each Beneficiary of a deceased Participant
receive his or her entire Accrued Benefit as soon as reasonably possible or (2)
the Trust be continued and Participants' Accrued Benefits be distributed at such
times and in such manner as provided in Article VIII, in which case continued
allocations of net income, gains, losses and expenses of the Trust Fund as
provided in Article VI shall be made.
11.05 Withdrawal from the Plan by an Employer. Any Employer other than the
Company may withdraw from the Plan and Trust Agreement, under such terms and
conditions as the Board of Directors may prescribe, by delivery to the Trustee
and the Company of a resolution of its board of directors electing to so
withdraw. An Employer that ceases to be a Related Employer shall automatically
withdraw from the Plan effective as of the date such Employer ceases to be a
Related Employer unless then or thereafter such Employer affirmatively elects,
and the Board of Directors affirmatively consents, to such Employer continuing
to be an Employer under this Plan.
ARTICLE XII
Top Heavy Provisions
12.01 Application. The definitions in Section 12.02 shall apply under this
Article XII and the special rules in Section 12.03 shall apply, notwithstanding
any other provisions of the Plan, for any Plan Year in which the Plan is a Top
Heavy Plan and for such other Plan Years as may be specified herein. multiple
employer plan as described in Code Section 413(c), the provisions of this
Article XII shall be applied separately to each Employer and Related Company
taking account of benefits under the Plan provided to employees of the Employer
or Related Company because of service with that Employer or Related Company.
12.02 Special Top Heavy Definitions. The following special definitions
shall apply under this Article XI.
(a) "Aggregate Employer Contributions" means the sum of all Employer
contributions under this Plan allocated for a Participant to the Plan and
employer contributions and forfeitures allocated for the Participant to
all Related Defined
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Contribution Plans in the Aggregation Group. With respect to Non-Key
Employees, Elective Deferrals under the Plan and employer contributions
attributable to salary reduction or similar arrangement under any Related
Defined Contribution Plans shall not be included in Aggregate Employer
Contributions. Matching Contributions under the Plan and employer matching
contributions (within the meaning of Section 401(m)(4)(A) of the Code)
under any Related Defined Contribution Plans shall be included in
Aggregate Employer Contributions. Matching Contributions that are used to
satisfy the minimum contribution requirements of Section 12.03(a) shall be
treated as Matching Contributions for purposes of the actual contribution
percentage test of Section 5.03 of the Plan and other applicable
requirements of Section 401(m) of the Code.
(b) "Aggregation Group" means the group of plans in a Mandatory
Aggregation Group, if any, that includes the Plan, unless the inclusion of
Related Plans in the Permissive Aggregation Group would prevent the Plan
from being a Top Heavy Plan, in which case "Aggregation Group" means the
group of plans consisting of the Plan and each other Related Plan in a
Permissive Aggregation Group with the Plan.
(1) "Mandatory Aggregation Group" means each plan (considering
the Plan and Related Plans) that, during the Plan Year that contains
the Determination Date or any of the four preceding Plan Years,
(A) had a participant who was a Key Employee, or
(B) was necessary to be considered with a plan in which
a Key Employee participated in order to enable the plan in
which the Key Employee participated to meet the requirements
of Section 401(a)(4) or 410 of the Code.
If the Plan is not described in (A) or (B) above, it shall not be part of
a Mandatory Aggregation Group.
(2) "Permissive Aggregation Group" means the group of plans
consisting of (A) the plans, if any, in a Mandatory Aggregation Group with
the Plan, and (B) any other Related Plan, that, when considered as a part
of the Aggregation Group, does not cause the Aggregation Group to fail to
satisfy the requirements of Section 401(a)(4) and Section 410 of the Code.
A Related Plan in (B) of the preceding sentence may include a simplified
employee pension plan, as defined in Code Section 408(k), and a
collectively bargained plan, if when considered as a part of the
Aggregation Group such plan does not cause the Aggregation Group to fail
to satisfy the requirements of Section 401(a)(4) and Section 410 of the
Code considering, if the plan is a multiemployer plan as described in Code
Section 414(f) or a multiple employer plan as described in Code Section
413(c), benefits under the plan only to the extent provided to employees
of the employer because service with the employer and, if the plan is a
simplified employee pension plan, only the employer's contribution to the
plan.
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(c) "Determination Date" means, with respect to a plan year, the
last day of the preceding plan year or, in the case of the first plan
year, the last day of such plan year. If the Plan is aggregated with other
plans in the Aggregation Group, the Determination Date for each other plan
shall be, with respect to any plan year, the Determination Date for each
such other plan which falls in the same calendar year as the Determination
Date for the Plan.
(d) "Key Employee" means, for the Plan Year containing the
Determination Date, any Employee or former Employee (including any
deceased employee) who at any time during such Plan Year was:
(1) an officer (including administrative executives as
described in Treasury Regulations Section 1.416-1(T-13)) of the
Employer or a Related Company having annual Compensation for the
Plan Year greater than $130,000 (as adjusted under Section 416(i) of
the Code for Plan Years beginning after December 31, 2002);
(2) a more than five percent (5%) owner (or is considered as
owning more than five percent (5%) within the meaning of Code
Section 318) of the Employer or a Related Company; or
(3) a more than one percent (1%) owner (or is considered as
owning more than one percent (1%) within the meaning of Code Section
318) of the Employer or a Related Company and has an annual
Compensation for such Plan Year from the Employer and Related
Companies of more than $150,000.
No more than a total of fifty (50) persons (or, if lesser, the
greater of three (3) persons or ten percent (10%) of all persons or
beneficiaries of persons who are employees or former employees)
shall be treated as Key Employees under paragraph (1) above for any
Plan Year. If the number of persons who meet the requirements to be
treated as Key Employees under paragraph (1) exceeds such limitation
those persons with the highest annual Compensation in a Plan Year
for which the requirements are met and who are within the limitation
on the number of Key Employees will be treated as Key Employees. For
purposes of determining the number of officers taken into account
hereunder, employees described in Section 2.26(b)(1) through (6)
shall be excluded. The determination of who is a Key Employee will
be made in accordance with Section 416(i) of the Code and the
applicable regulations
(e) "Non-Key Employee" means a person with an accrued benefit or
account balance in the Plan or any Related Plan in the Aggregation Group
at any time during the Measurement Period who is not a Key Employee, and
any beneficiary of such a person.
(f) "Present Value of Accrued Benefits" means, for any Plan Year, an
amount equal to the sum of (1), (2) and (3), subject to (4), for each
person who, in the Plan Year containing the Determination Date, was a Key
Employee or a Non-Key Employee.
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(1) The value of a person's Accrued Benefit under the Plan and
each Related Defined Contribution Plan in the Aggregation Group,
determined as of the valuation date coincident with or immediately
preceding the Determination Date, adjusted for contributions due as
of the Determination Date, as follows:
(A) in the case of a plan not subject to the minimum
funding requirements of Section 412 of the Code, by including
the amount of any contributions actually made after the
valuation date but on or before the Determination Date, and,
in the first plan year of a plan, by including contributions
made after the Determination Date that are allocated as of a
date in that first plan year; and
(B) in the case of a plan that is subject to the minimum
funding requirements, by including the amount of any
contributions that would be allocated as of a date not later
than the Determination Date, plus adjustments to those amounts
as required under applicable rulings, even though those
amounts are not yet required to be contributed or allocated
(e.g., because they have been waived) and by including the
amount of any contributions actually made (or due to be made)
after the valuation date but before the expiration of the
extended payment period in Section 412(c)(10) of the Code.
(2) The sum of the actuarial present values of a
person's accrued benefits under each Related Defined Benefit
Plan in the Aggregation Group, expressed as a benefit
commencing at Normal Retirement Date (or the person's attained
age, if later) determined based on the following actuarial
assumptions:
(A) Interest rate: 5%; and
(B) Post Retirement Mortality: 1984 Unisex Pension
Table;
and determined in accordance with Code Section 416(g),
provided, however, that the accrued benefit of any Non-Key
Employee shall be determined under the method which is used
for accrual purposes for all Related Defined Benefit Plans or,
if no single accrual method is used in all such plans, such
accrued benefit shall be determined as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under
Code Section 411(b)(1)(C). The present value of an accrued
benefit for any person who is employed by an employer
maintaining a plan on the Determination Date is determined as
of the most recent valuation date which is within a 12-month
period ending on the Determination Date, provided however
that:
(C) for the first plan year of the plan, the
present value for an employee is determined as if the
employee had a Termination of Employment (i) on the
Determination Date or (ii) on such valuation date but
taking into account the estimated accrued benefit as of
the Determination Date; and
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(D) for the second and subsequent plan years of
the plan, the accrued benefit taken into account for an
employee is not less than the accrued benefit taken into
account for the first plan year unless the difference is
attributable to using an estimate of the accrued benefit
as of the Determination Date for the first plan year and
using the actual accrued benefit as of the Determination
Date for the second plan year.
For purposes of this paragraph (2), the valuation date is the
valuation date used by the plan for computing plan costs for
minimum funding, regardless of whether a valuation is
performed that year.
If the plan provides for a nonproportional subsidy as
described in Treasury Regulations Section 1.416-1(T-27), the
present value of accrued benefits shall be determined taking
into account the value of nonproportional subsidized early
retirement benefits and nonproportional subsidized benefit
options.
(3) Distributions made with respect to the Employee
under the Plan and any Related Plan within the Aggregation
Group during the one-year period ending on the determination
date. The preceding sentence shall also apply to distributions
under a terminated plan which, had it not been terminated,
would have been a Related Plan within the Aggregation Group.
In the case of a distribution for a reason other than
separation from service, death or disability, this provision
shall be applied by substituting "five-year period" for
"one-year period."
(4) The following rules shall apply in determining the
Present Value of Accrued Benefits:
(A) Amounts attributable to qualified voluntary
employee contributions, as defined in Section 219(e) of
the Code, shall be excluded.
(B) In computing the Present Value of Accrued
Benefits with respect to rollovers or plan-to-plan
transfers, the following rules shall be applied to
determine whether amounts which have been distributed
during the five (5) year period ending on the
Determination Date from or accepted into this Plan or
any plan in the Aggregation Group shall be included in
determining the Present Value of Accrued Benefits:
(i) Unrelated Transfers accepted into the
Plan or any plan in the Aggregation Group after
December 31, 1983 shall not be included.
(ii) Unrelated Transfers accepted on or
before December 31, 1983 and all Related Transfers
accepted at any time into the Plan or any plan in
the Aggregation Group shall be included.
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(iii) Unrelated Transfers made from the Plan
or any plan in the Aggregation Group shall be
included.
(iv) Related Transfers made from the Plan or
any plan in the Aggregation Group shall not be
included by the transferor plan (but shall be
counted by the accepting plan).
(C) The Accrued Benefit of any individual who has
not performed services for the Employer maintaining the
Plan at any time during the one (1) year period ending
on the Determination Date shall be excluded.
(g) "Related Transfer" means a rollover or a plan-to-plan transfer
which is either not initiated by the Employee or is made between plans
each of which is maintained by a Related Company.
(h) A "Top Heavy Aggregation Group" exists in any Plan Year for
which, as of the Determination Date, the sum of the Present Value of
Accrued Benefits for Key Employees under all plans in the Aggregation
Group exceeds sixty percent (60%) of the sum of the Present Value of
Accrued Benefits for all employees under all plans in the Aggregation
Group; provided that, for purposes of determining the sum of the Present
Value of Accrued Benefits for all employees, there shall be excluded the
Present Value of Accrued Benefits of any Non-Key Employee who was a Key
Employee for any Plan Year preceding the Plan Year that contains the
Determination Date. For purposes of applying the special rules herein with
respect to a Super Top Heavy Plan, a Top Heavy Aggregation Group will also
constitute a "Super Top Heavy Aggregation Group" if in any Plan Year as of
the Determination Date, the sum of the Present Value of Accrued Benefits
for Key Employees under all plans in the Aggregation Group exceeds ninety
percent (90%) of the sum of the Present Value of Accrued Benefits for all
employees under all plans in the Aggregation Group.
(i) "Top Heavy Plan" means the Plan in any Plan Year in which the
Plan is a member of a Top Heavy Aggregation Group, including a Top Heavy
Aggregation Group consisting solely of the Plan. For purposes of applying
the rules herein with respect to a Super Top Heavy Plan, a Top Heavy Plan
will also constitute a "Super Top Heavy Plan" if the Plan in any Plan Year
is a member of a Super Top Heavy Aggregation Group, including a Super Top
Heavy Aggregation Group consisting solely of the Plan.
(j) "Unrelated Transfer" means a rollover or a plan-to-plan transfer
which is both initiated by the Employee and (a) made from a plan
maintained by a Related Company to a plan maintained by an employer which
is not a Related Company or (b) made to a plan maintained by a Related
Company from a plan maintained by an employer which is not a Related
Company.
12.03 Special Top Heavy Provisions. For each Plan Year in which the Plan
is a Top Heavy Plan, the following rules shall apply, except that the special
provisions of this Section 12.03 shall not apply with respect to any employee
included in a unit of employees
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covered by an agreement which the Secretary of Labor finds to be a
collective-bargaining agreement between employee representatives and one or more
Employers if there is evidence that retirement benefits were the subject of good
faith bargaining between such employee representative and the Employer or
Employers:
(a) Minimum Employer Contributions. In any Plan Year in which the
Plan is a Top Heavy Plan, the Employers shall make additional Employer
Contributions to the Plan as necessary for each Participant who is
employed on the last day of the Plan Year and who is a Non-Key Employee to
bring the amount of his or her Aggregate Employer Contributions for the
Plan Year up to at least three percent (3%) of his or her Compensation, or
if the Plan is not required to be included in an Aggregation Group in
order to permit a Related Defined Benefit Plan in the Aggregation Group to
satisfy the requirements of Section 401(a)(4) or Section 410 of the Code,
such lesser amount as is equal to the largest percentage of a Key
Employee's Compensation allocated to the Key Employee as Aggregate
Employer Contributions, unless such Participant is a Participant in a
Related Defined Benefit Plan and receives a minimum benefit thereunder in
accordance with Section 416(c) of the Code in which case such Participant
shall not receive a minimum contribution under this Section 11.3(a).
For purposes of determining whether a Non-Key Employee is a
Participant entitled to have minimum Employer Contributions made on his or
her behalf, a Non-Key Employee will be treated as a Participant even if he
is not otherwise a Participant (or accrues no benefit) under the Plan
because:
(1) he has failed to complete the requisite number of hours of
service (if any) after becoming a Participant in the Plan,
(2) he is excluded from participation in the Plan (or accrues
no benefit) merely because his or her compensation is less than a
stated amount, or
(3) he is excluded from participation in the Plan (or accrues
no benefit) merely because of a failure to make mandatory employee
contributions or, if the Plan is a 401(k) plan, because of a failure
to make elective 401(k) contributions.
Contributions required by this subsection shall be allocated to the
Company Contribution Account (if the Non-Key Employee is not a Traveler)
or the Traveler Benefit Account (if the Non-Key Employee is a Traveler) of
the affected Non-Key Employee.
(b) Vesting. For each Plan Year in which the Plan is a Top Heavy
Plan and any Plan Year thereafter, the Employer Contribution Account of a
Participant who has at least one Hour of Service after the Plan becomes a
Top Heavy Plan and who has completed three (3) or more years of Vesting
Service shall become fully vested and nonforfeitable.
(c) Limitations. For Plan Years commencing prior to January 1, 2000,
in computing the limitations under Section 5.07 hereof for
years in which the Plan is a Top
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Heavy Plan, the special rules of Section 416(h) of the Code shall be
applied in accordance with applicable regulations and rulings so that, in
determining the denominator of the Defined Contribution Plan Fraction and
the Defined Benefit Plan Fraction, at each place at which "1.25" would
have been used, "1.00" shall be substituted, and by substituting $41,500
for $51,875 in the numerator of the transition fraction described in
Section 415(e)(6)(B) of the Code, unless the Plan is not a Super Top Heavy
Plan and the special requirements of Section 416(h)(2) of the Code have
been satisfied. This Section 12.3(c) shall not apply to any Plan Year
commencing after December 31, 1999.
(d) Transition Rule for a Top Heavy Plan. Notwithstanding the
provisions of Section 12.03(c), for each Plan Year commencing prior to
January 1, 2000 in which the Plan is a Top Heavy Plan and in which the
Plan does not meet the special requirements of Section 416(h)(2) of the
Code in order to use 1.25 in the denominator of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction, if an Employee was a
participant in one or more defined benefit plans and in one or more
defined contribution plans maintained by the employer before the plans
became Top Heavy Plans and if such Participant's Combined Fraction exceeds
1.00 because of accruals and additions that were made before the plans
became Top Heavy Plans, a factor equal to the lesser of 1.25 or such
lesser amount (but not less than 1.00) as shall be needed to make the
Employee's Combined Fraction equal to 1.00 shall be used in the
denominator of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction if there are no further accruals or annual
additions under any Top Heavy Plans until the Participant's Combined
Fraction is not greater than 1.00 when a factor of 1.00 is used in the
denominators of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction. Any provisions herein to the contrary
notwithstanding, for Plan Years commencing prior to January 1, 2000, if
the Plan is a Top Heavy Plan and the Plan does not meet the special
requirements of Section 416(h)(2) of the Code in order to use 1.25 in the
denominators of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction, there shall be no further Annual Additions for
a Participant whose Combined Fraction is greater than 1.00 when a factor
of 1.00 is used in the denominator of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction, until such time as the
Participant's Combined Fraction is not greater than 1.00. This Section
12.03(d) shall not apply to any Plan Year commencing after December 31,
1997.
(e) Transition Rule for a Super Top Heavy Plan. Notwithstanding the
provisions of Sections 12.03(c) and 12.03(d), for each Plan Year
commencing prior to January 1, 2000 in which the Plan is a Super Top Heavy
Plan, (1) if an Employee was a participant in one or more defined benefit
plans and in one or more defined contribution plans maintained by the
employer before the plans became Super Top Heavy Plans, and (2) if such
Participant's Combined Fraction exceeds 1.00 because of accruals and
additions that were made before the plans became Super Top Heavy Plans and
if immediately before the plans became Super Top Heavy Plans the Combined
Fraction as then computed did not exceed 1.00, then a factor equal to the
lesser of 1.25 or such lesser amount (but not less than 1.00) as shall be
needed to make the Employee's Combined Fraction equal to 1.00 shall be
used in the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction if there are no further accruals or
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annual additions under any Super Top Heavy Plans until the Participant's
Combined Fraction is not greater than 1.00 when a factor of 1.00 is used
in the denominators of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction. Any provisions herein to the contrary
notwithstanding, for Plan Years commencing prior to January 1, 2000, if
the Plan is a Super Top Heavy Plan, there shall be no further Annual
Additions for a Participant whose Combined Fraction is greater than 1.00
when a factor of 1.00 is used in the denominator of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction until the
Participant's Combined Fraction is not greater than 1.00. This Section
12.03(e) shall not apply to any Plan Year commencing after December 31,
1999.
(f) Terminated Plan. If the Plan becomes a Top Heavy Plan after it
has formally been terminated, has ceased contributions and has been or is
distributing all plan assets to participants and their beneficiaries as
soon as administratively feasible or if a terminated plan has distributed
all benefits of participants and their beneficiaries, the provisions of
Section 12.03 shall not apply to the Plan.
(g) Frozen Plans. If the Plan becomes a Top Heavy Plan after
contributions have ceased under the Plan but all assets have not been
distributed to Participants or their Beneficiaries, the provisions of
Section 12.03 shall apply to the Plan.
ARTICLE XIII
Miscellaneous Provisions
13.01 Employer Joinder. Any Employer immediately before the
Effective Date that continues to be a Related Company immediately after
the Effective Date shall continue as an Employer under this Plan. Any
entity that is a Related Company as of the Effective Date or which is
created by a transfer of assets from a Related Employer after the
Effective Date, and that employs Employees within the United States who
would be Eligible Employees if such Related Company were an Employer,
shall be an Employer and shall be deemed to have adopted this Plan and the
Trust unless such Related Company by resolution of its board of directors,
or the Company by resolution of the Board of Directors, affirmatively
provides that such Related Company shall not be an Employer. Any other
Related Company shall become an Employer as of the date (if any) as of
which such Related Company adopts the Plan by resolution of its board of
directors, or as of which the Company designates such entity as an
Employer under the Plan by resolution of the Board. Each Employer other
than the Company so adopting or deemed to have adopted the Plan thereby
irrevocably appoints the Company to as its agent to do on its behalf all
acts and things required of an Employer under this Plan and authorizes the
Plan Administrator to determine the Employer contributions required of
such Employer under this Plan, to the end that Participants,
Beneficiaries, the Trustee, the Plan Administrator, and all other persons
may deal with the Company as if it were the only Employer under this Plan.
13.02 Non-Alienation of Benefits. Except as provided in Section
13.03, no benefit payable at any time under this Plan shall be subject in
any manner to alienation, sale, transfer, assignment, pledge, attachment,
or other legal processes, or encumbrance of any kind, other than federal
tax levies and judgements which are enforceable under federal law. Any
attempt to
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alienate, sell, transfer, assign, pledge or otherwise encumber any such
benefits, whether currently or thereafter payable, shall be void. No benefit,
nor any fund which may be established for the payment of such benefits, shall,
in any manner, be liable for or subject to the debts or liabilities of any
person entitled to such benefits.
13.03 Qualified Domestic Relations Order. Notwithstanding Section 13.02,
the Plan will pay all or the designated portion of a Participant's Accounts to
an Alternate Payee (as defined below) pursuant to a Qualified Domestic Relations
Order (defined below). Payments to an Alternate Payee pursuant to a Qualified
Domestic Relations Order may not be made before the earlier of (i) the date on
which the Participant corresponding to the Qualified Domestic Relations Order is
entitled to a distribution under the Plan; or (ii) the later of (A) the date on
which such Participant attains age 50 or (B) the earliest date on which such
Participant could begin receiving benefits under the Plan if the Participant had
separated from service; provided, however, that clause (ii)(A) shall not apply
(and therefore the Plan will make distributions to an Alternate Payee under a
Qualified Domestic Relations Order regardless of whether the Participant has
attained age 50) if the Order specifies distributions at an earlier date than
otherwise permitted by clause (ii)(A) or permits the Alternate Payee to request
or consent to a distribution prior to the date specified by clause (ii)(A).
The term "Qualified Domestic Relations Order" means any judgment, decree
or order (including approval of a property settlement agreement) which:
(a) relates to the provision of child support, alimony payments, or
marital property rights to a spouse, child or other dependent of a
Participant,
(b) is made pursuant to a State domestic relations law (including a
community property law),
(c) creates or recognizes the existence of an Alternate Payee's
right to, or assigns to an Alternate Payee the right to, receive all or a
portion of the benefits payable with respect to the Participant,
(d) clearly specifies the name and last known mailing address, if
any, of the Participant and the name and mailing address of each Alternate
Payee covered by the order, the amount and percentage of the Participant's
benefits to be paid by the Plan to each Alternate Payee, or the manner in
which such amount or percentage is to be determined, the number of
payments or period to which such order applies and each plan to which such
order applies, and
(e) does not require the Plan to provide (i) any form or type of
benefit, or any option, not otherwise provided under the Plan, (ii)
increased benefits (determined on the basis of actuarial value), (iii)
benefits to a beneficiary inconsistent with the form of distribution
available under Article VIII (or, if applicable, Appendix A), (iv)
benefits to an Alternate Payee which are required to be paid to another
payee under another order previously determined by the Plan Administrator
to be a Qualified Domestic Relations Order; or (v) payments or other
benefits to a person other than an Alternate Payee.
-63-
The Plan Administrator shall establish reasonable procedures to determine the
qualified status of domestic relations order and to administer distributions
under such qualified orders, including the establishment of segregated accounts
for Alternate Payees. All expenses incurred by the Plan Administrator in
determining the qualified status of a domestic relations order shall be paid as
an administrative expense of the Plan as a whole.
The term "Alternate Payee" means any spouse, former spouse, child or other
dependent of a Participant who is recognized by a Qualified Domestic Relations
Order as having a right to receive all, or a portion of, the benefits payable
under the Plan with respect to the Participant. To the extent provided in any
Qualified Domestic Relations Order, the former spouse of a Participant shall be
treated as the surviving spouse of such Participant for purposes of consenting
to the naming of another Beneficiary to the extent provided in Sections 8.05 and
Appendix A. An Alternate Payee shall be considered a Beneficiary under the terms
of this Plan until the Alternate payee's benefits are distributed.
In the case of any domestic relations order received by the Plan, the Plan
Administrator shall separately account for the amounts payable under the
domestic relations order. If it is determined that the order is not a Qualified
Domestic Relations Order, the amounts separately accounted for during such
determination shall no longer be accounted for separately.
13.04 Unclaimed Amounts. Unclaimed amounts shall consist of the amounts of
the Accounts of a retired, deceased or terminated Participant which cannot be
distributed because of the Plan Administrator's inability, after a reasonable
search, to locate a Participant or his or her Beneficiary within a period of two
(2) years after the payment of benefits becomes due in accordance with Section
8.03. Unclaimed amounts for a Plan Year shall become a Forfeiture and shall be
applied in accordance with Section 4.10(f) as of the close of the Plan Year in
which such two-year period shall end. If an unclaimed amount is subsequently
properly claimed by the Participant or the Participant's Beneficiary, said
amount shall be paid to such Participant or Beneficiary out of Forfeitures for
the Plan Year in which such benefits are properly claimed and to the extent that
Forfeitures for such Plan Year are not sufficient, such payments shall be
charged ratably against income or gain of the Trust Fund unless paid by an
Employer.
13.05 No Contract of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between any Employer and any Employee or
as creating a right of any Employee to be continued in the employment of any
Employer.
13.06 Recoupment of or Reduction for Overpayment. If the Plan
Administrator determines that any payment previously made to a putative
Participant or Beneficiary was not properly payable, the person to whom such
payment was made shall promptly upon notice and demand from the Plan
Administrator repay such amount to the Trust, subject to the right of such payee
to request review of such determination in accordance with Section 10.02. If the
person to whom such payment was made does not, within a reasonable time, make
the requested repayment to the Plan, and if such person is entitled to other
benefits from the Plan, the Plan Administrator may in his, her or its discretion
treat the overpayment as an advance payment of benefits, and the Plan
Administrator shall direct the Trustee to reduce all future benefits payable to
that person, if any, by the amount of the overpayment.
-64-
13.07 Employees' Trust. The Plan and Trust are created for the exclusive
purpose of providing benefits to the Participants in the Plan and their
Beneficiaries and defraying reasonable expenses of administering the Plan and
Trust. The Plan and Trust shall be interpreted in a manner consistent with their
being a Plan described in Section 401(a) of the Code and a Trust exempt under
Section 501(a) of the Code.
13.08 Source of Benefits. All benefits payable under the Plan shall be
paid or provided solely from the Trust and the Employers assume no liability or
responsibility therefore.
13.09 Interest of Participants. No Participant or Beneficiary shall have
any interest in any specific assets of the Trust Fund (other than notes
representing a loan to the Participant pursuant to Section 7.02) but shall have
only an undivided interest in the Trust Funds as a whole.
13.10 Indemnification. The Company shall indemnify and hold harmless the
Plan Administrator the members of the Investment Committee, and, if the Trustees
are one or more individuals, the Trustees, and each officer and employee of an
Employer to whom are delegated duties, responsibilities, and authority with
respect to the Plan, from and against all claims, liabilities, fines and
penalties, and all expenses reasonably incurred by or imposed upon him or her
(including, but not limited to, reasonable attorney fees) which arise as a
result of his or her actions or failure to act in connection with the operation
and administration of the Plan to the extent lawfully allowable and to the
extent that such claim, liability, fine, penalty, or expense is not paid for by
liability insurance purchased or paid for by the Company. Notwithstanding the
foregoing, the Company shall not indemnify any person for any such amount
incurred through any settlement or compromise of any action unless the Company
consents in writing to such settlement or compromise.
13.11 Company Action. Any action this Plan requires or permits the Company
to do (including any action taken by the Company as agent for any other Employer
pursuant to Section 13.01) shall be properly done if done by resolution of its
Board of Directors, or, unless this Plan expressly requires action by such Board
of Directors, by any officer or employee of the Company authorized to take
actions of such type on behalf of the Company (i) under the by-laws of the
Company, (ii) by resolution of the Board of Directors), or (iii) by delegation
from a person authorized under clause (i) or (ii).
13.12 Company Merger. In the event that any successor corporation to the
Company, by merger, consolidation, purchase or otherwise, shall elect to adopt
the Plan, such successor corporation shall be substituted hereunder for the
Company upon filing in writing with the Trustee its election so to do.
13.13 Multiple Capacity. Any person or group of persons may serve in more
than one capacity (including more than one fiduciary or nonfiduciary capacity or
both a fiduciary and non-fiduciary capacity) with respect to the Plan.
13.14 Gender and Number. Except when the context indicates to the
contrary, when used herein, masculine terms shall be deemed to include the
feminine or neuter, and singular the plural.
-65-
13.15 Headings. The headings of articles and sections are included solely
for convenience of reference, and if there is any conflict between such headings
and the text of this Plan, the text shall control.
13.16 Uniform and Non-Discriminatory Application of Provisions. The
provisions of this Plan shall be interpreted and applied in a uniform and
non-discriminatory manner with respect to all similarly situated Participants,
former Participants, and Beneficiaries.
13.17 Invalidity of Certain Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof and the Plan shall be construed and
enforced as if such provisions, to the extent invalid or unenforceable, had not
been included.
13.18 Application to Merged Plans. The amendments to this Plan responding
to statutory changes enacted by the GUST Amendments (defined below), as
reflected in the Applicable Plan Sections (defined below), shall apply to each
of the Howe-Baker Engineers, Inc. Employees' Profit-Sharing 401(k) Plan, the
Matrix Engineering, Inc. Savings Plan, the A&B Builders, Inc. Savings Plan, and
the Callidus Technologies 401(k) Savings Plan (collectively, the "Merged
Plans"), for periods prior to the merger of Merged Plans into this Plan, to the
extent necessary to ensure the continued qualification of the Merged Plans under
Section 401(a) of the Code prior to and as of their merger into this Plan. For
this purpose the GUST Amendments are the Uniformed Services Employment and
Reemployment Rights Act of 1994, P.L. 103-353; the Uruguay Round Agreements Act,
P.L. 103-465; the Small Business Job Protection Act of 1996, P.L. 104-188; and
the Taxpayer Relief Act of 1997, P.L. 105-34; and the Applicable Plan Sections
are Section 2.13(b) (relating to the definition of Statutory Compensation);
Section 2.19(b) (relating to the definition of leased employees within the
meaning of Section 414(n)(2) of the Code); Section 2.28 (relating to the
definition of Highly Compensated Employee and repeal of family aggregation);
Section 2.49 (relating to the Required Distribution Date); Sections 2.44 and
2.54 (relating to Qualified Military Leave); Sections 5.02 and 5.03 (relating to
the computation and distribution of excess contributions, excess aggregate
contributions and satisfying the multiple use test); Section 5.07(d) (relating
to repeal of the combined limitation on certain benefits); and Sections 8.02,
8.03, 8.04, A-2, and A-3 (relating to the increase from $3,500 to $5,000 in the
threshold for certain mandatory distributions) of this Plan.
13.19 Law Governing. The Plan shall be construed and enforced according to
the laws of Illinois other than its laws with respect to choice of law, to the
extent not preempted by ERISA.
Executed this_______day of__________ , 2002.
CHICAGO BRIDGE & IRON COMPANY
By:________________________
ATTEST:
__________________
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APPENDIX A
A-1. Distribution of Restricted Accounts. Notwithstanding any provisions
in the Plan to the contrary, the balance of a Participant's Restricted Accounts
may be distributed, in addition to the options specified in Section 8.02(a) and
(b), by purchase with the vested balance of his or her Restricted Accounts and
distribution to the Participant of a nontransferable annuity contract, providing
for payment in the form of a Qualified Joint and Survivor Annuity (as defined
below), and in any other form of distribution to which the participant would
have been entitled under Section 6.02(b) of the Hourly Plan as in effect on
December 31, 1996. The Participant shall select the method by which his or her
benefits shall be distributed in accordance with Section 8.03, except as
modified by this Appendix A. If no other election has been made under Section
8.03 and this Appendix A, the Participant's benefits attributable to his or her
Restricted Accounts will be distributed in the form of a Qualified Joint and
Survivor Annuity.
For purposes of this Appendix A, a "Qualified Joint and Survivor Annuity",
for a Participant who is legally married on his or her Annuity Starting Date, is
an immediate installment refund annuity for the life of the Participant with a
survivor annuity for the life of such spouse (if such spouse survives the
Participant) that is 50% of the amount of the annuity which is payable during
the joint lives of the Participant and the spouse, and which is the amount of
such benefit that can be purchased with the vested balance of the Participant's
Restricted Accounts. If the Participant is not married on his or her Annuity
Starting Date, a "Qualified Joint and Survivor Annuity" is an immediate
installment refund annuity for the life of such Participant, which is the amount
of such benefit that can be purchased with the vested balance of the
Participant's Restricted Accounts. The "Annuity Starting Date" is the first day
of the first period for which an amount is paid as an annuity or any other form.
A-2. Election and Revocation of Joint and Survivor Annuity Form. If a
Participant is married on his or her Annuity Starting Date, his or her
Restricted Account balances shall be paid in the form of a Qualified Joint and
Survivor Annuity, subject to the following provisions of this subsection. Within
the 90-day period preceding the Participant's Annuity Starting Date, the Plan
Administrator will provide, by a means reasonably calculated to reach the
Participant and his or her spouse, election information consisting of:
(a) a written description of the Qualified Joint and Survivor
Annuity and the relative financial effect of payment of his or her
Restricted Account balances in that form; and
(b) a notification of the right to waive payment in that form, the
rights of his or her spouse with respect to such waiver and the right to
revoke such waiver, and the effect of such revocation.
During an election period commencing on the date the Participant receives such
election information and ending on the later of the 90th day thereafter or the
Annuity Starting Date, a Participant may waive payment in the Qualified Joint
and Survivor Annuity form and elect payment in such another form permitted by
Section A-1; provided that, the Participant's surviving spouse, if any, has
consented in writing to such waiver and the spouse's consent acknowledges the
effect of such revocation and is witnessed by a notary public. A Participant
-1-
may, at any time during his or her election period, revoke any prior waiver of
the Qualified Joint and Survivor Annuity form. However, the consent of his or
her spouse once given shall be irrevocable unless and until the Participant
revokes his or her prior waiver of the Joint and Survivor Annuity form. A
Participant may request, by writing filed with the Plan Administrator during his
or her election period, an explanation, written in nontechnical language, of the
terms, conditions and financial effect (in terms of dollars per monthly benefit
payment) of payment in the Qualified Joint and Survivor Annuity form. If not
previously provided to the Participant, the Plan Administrator shall provide him
or her with such explanation within 30 days of his or her request by a method
reasonably calculated to reach the Participant and his or her spouse, and the
Participant's election period will be extended, if necessary, to include the
90th day next following the date on which he or she receives such explanation.
No distribution shall be made from a Participant's Restricted Accounts until his
or her election period has terminated. Notwithstanding the foregoing, if the
Participant's total distributable Account balances (not just Restricted Account
balances) are less than $5,000, ($3500 for the Plan Year 1997) as of his or her
date of Termination, the Trustee shall immediately distribute such benefits in a
lump sum without such Participant's consent pursuant to Section 8.03 of the
Plan.
A-3. Pre-Retirement Survivor Annuity. The term "Pre-Retirement Survivor
Annuity" means an installment refund annuity for the life of the Participant's
surviving spouse, the payments under which are equal to the amount of benefit
which can be purchased with the Participant's Restricted Accounts as of the date
of his or her death. Payment of such benefits will commence as soon as
practicable after the date of the Participant's death, unless the surviving
spouse elects a later date. Any election to waive the Pre-Retirement Survivor
Annuity must be made by the Participant in writing during the election period
described herein and shall require the spouse's consent in the same manner
provided for in Section A-2. The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's death. In
the event a Participant separates from service prior to the beginning of the
election period, the election period shall begin on the data of such separation
from service. In connection with the election, the Plan Administrator shall
provide each Participant within the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains age 35, a
written explanation of the Pre-Retirement Survivor Annuity containing comparable
information to that required pursuant to the provisions of subsections A-2(a)
and (b). If the Participant enters the Plan after the first day of the Plan Year
in which the Participant attained age 32, the Plan Administrator shall provide
notice no later than the close of the second Plan Year following the entry of
the Participant into the Plan. If the total distributable balance of the
Participant's Accounts (not just Restricted Accounts) is less than $5,000
($3,500) for the Plan Year 1997) as of his or her date of Termination, the
Trustees shall provide for the immediate distribution of such Accounts to the
Participant's spouse. If the value exceeds $3,500, an immediate distribution of
the entire amount may be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution.
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SCHEDULE 1
CHICAGO BRIDGE & IRON COMPANY
EMPLOYEE SAVINGS PLAN
PARTICIPANT ACCOUNTS
CB&I PLAN
CONTRIBUTION VESTING
SOURCE NAME EXCHANGES MIX CHANGES WITHDRAWALS SCHEDULE
- ----------------- -------------------- ------------ ----------- -----------
EMPLOYEE 401K permitted permitted Age 59-1/2 N/A
Hardship
Termination
Loans
PRIOR EMPLOYEE permitted N/A Age 59-1/2 N/A
Hardship
Termination
Loans
PRIOR EMPLOYER permitted (exchanges N/A Age 59-1/2 3 yr. cliff
into stock are not Hardship
permitted) Termination
Loans
PRIOR HOURLY permitted N/A Age 59-1/2 N/A
EMPLOYEE 401K Hardship
Termination
ANNUAL COMPANY permitted permitted Age 59-1/2 5 yr. cliff
CONTRIBUTION Termination
Loans
MPPP EMPLOYEE permitted N/A Age 59-1/2 N/A
CONTRIBUTION Termination
In-service
Loans
POST 86 AFTER-TAX permitted N/A In-service 100%
Loans
TRAVELERS BENEFIT permitted N/A Age 59-1/2 100%
Termination
ANNUITY
SOURCE NAME RESTRICTIONS COMMENTS
- ----------------- ------------------ -----------------------------------
EMPLOYEE 401K N/A Converted 12/31/96 from Towers
Perrin for 401(K) Plan
PRIOR EMPLOYEE Annuity provisions Contains pretax deferred money from
Spousal consent Callidus, Howe-Baker, A&B, and
Matrix Plans
PRIOR EMPLOYER Annuity provisions Contains match and stock sources
Spousal consent from Callidus Plan
PRIOR HOURLY Annuity provisions Converted 12/31/96 from Principal
EMPLOYEE 401K Spousal consent Financial for Hourly Employees Plan
ANNUAL COMPANY N/A
CONTRIBUTION
MPPP EMPLOYEE Annuity provisions Converted 12/31/96 from Principal
CONTRIBUTION Spousal consent Financial for Hourly Employees Plan
POST 86 AFTER-TAX N/A Contains Howe-Baker, Matrix, A&B
after-tax sources
TRAVELERS BENEFIT N/A
-1-
CONTRIBUTION
SOURCE NAME EXCHANGES MIX CHANGES WITHDRAWALS
- -------------------- --------------- --------------- -------------------------
PRIOR PLAN permitted N/A Age 59-1/2
Termination
In-service
Loans
MPPP COMPANY permitted N/A Termination
CONTRIBUTION Loans
PRE-2001 COMPANY permitted N/A Age 59-1/2
MATCH Termination
Loans
PRIOR QNEC permitted N/A Termination
Loans
PRIOR PROFIT SHARING none N/A Age 59-1/2
Termination
In-service (20%
available after 5 yrs. of
service)
Loans
COMPANY no exchange out no exchange out Age 59-1/2
CONTRIBUTION CB&I Termination
STOCK Loans
PRIOR EMPLOYER permitted N/A Age 59-1/2
MATCH Termination
Loans
COMPANY MATCH permitted permitted Age 59-1/2
Termination
Loans
PRIOR PLAN & permitted permitted Age 59-1/2
ROLLOVERS Termination
In-service
Loans
VESTING ANNUITY
SOURCE NAME SCHEDULE RESTRICTIONS COMMENTS
- -------------------- ------------ ------------------ ------------------------------------
PRIOR PLAN N/A Annuity provisions Converted 12/31/96 from Principal
Spousal consent Financial for Hourly Employees Plans
Contains rollover money from CB&I,
Callidus, Howe-Baker, A&B, and
Matrix Plans
MPPP COMPANY 100% Annuity provisions Converted 12/31/96 from Principal
CONTRIBUTION Spousal consent Financial for Hourly Employees Plans
PRE-2001 COMPANY 100% N/A
MATCH immediate
PRIOR QNEC 100% Annuity provisions Contains Howe-Baker QNEC
Spousal consent
PRIOR PROFIT SHARING 100% Annuity provisions Contains Howe-Baker, Matrix, A&B
Spousal consent PS sources
COMPANY 100% N/A
CONTRIBUTION CB&I
STOCK
PRIOR EMPLOYER 5 yr. graded Annuity provisions Contains match sources from Howe-
MATCH Spousal consent Baker, Matrix, and A&B Plans
COMPANY MATCH 5 yr. cliff N/A Will contain new company match for
2001 and forward
PRIOR PLAN & N/A N/A Converted 12/31/96 from Towers
ROLLOVERS Perrin for 401(K) Plan
-2-
Exhibit 10.25(a)
CHICAGO BRIDGE & IRON
SAVINGS PLAN
SIXTH AMENDMENT
Pursuant to resolution of the Board of Directors of Chicago Bridge & Iron
Company, a Delaware corporation ("Company) dated December 19, 2003, the Chicago
Bridge & Iron Savings Plan, as amended and restated effective January 1, 1997,
and previously amended ("Plan") is hereby further amended in this Sixth
Amendment as follows:
1. Section 2.13(a) of the Plan (defining "Compensation") is amended to
read as follows:
(a) Compensation. Except as provided in subsection (b), Compensation means
the total cash salary and wages paid by the Employer through the U.S. payroll
system of an Employer to a Participant while an Eligible Employee, or paid by
the Employer through its payroll system for U.S. Expatriate Employees (as
defined in Section 2.19) to a Participant while an Eligible Employee and a U.S.
Expatriate Employee, (i) including short-term disability payments made directly
from the assets of the Employer, overtime, and cash bonuses under any annual or
other short-term incentive pay or bonus plan, (ii) excluding long-term
incentives, stock options, restricted stock, similar non-cash benefits,
contributions or benefits under any employee benefit plan and special allowances
provided to U.S. Expatriate Employees for the purpose of equalizing their salary
and wages, (iii) increased by the amount of any Elective Deferrals under this
Plan and any other elective contributions or deferrals made by an Employer on
behalf of an Employee that are excluded from the Participant's income by Section
125, Section 132(f), Section 402(e)(3), Section 402(h)(1)(B), Section 403(b),
Section 408(p)(2)(A)(i) or Section 457 of the Code, and (iv) excluding all
compensation in excess of the Compensation Limit.
2. The introductory clause of Section 2.19 is amended to read as
follows:
2.19 "Eligible Employee" means (i) any Employee who is employed by an
Employer and paid through the U.S. payroll system of the Employer, including an
Employee transferred from the United States to work outside the United States
but retained on the U.S. payroll system of the Employer, and (ii) any Employee
who is employed by a non-U.S. Employer whose salary and wages are not paid
through the U.S. payroll system but who is considered to be a considered to be a
U.S. expatriate employee under such Employer's employment and personnel policies
(a "U.S. Expatriate Employee"), but excluding:
3. Subsection (b) of Section 2.19 is amended to read as follows:
(b) Nonresident Aliens. Any Employee who (i) (A) is neither a citizen nor
resident of the United States or (B) is first employed by an Employer or Related
Company outside the United States other than as a U.S. Expatriate Employee, and
(ii)
receives no earned income (within the meaning at Section 911(d)(2) of the
Code) from the Employer or a Related Company from sources within the United
States (within the meaning of Section 861(a)(3) of the Code).
Dated: December 19, 2003
By:
/s/ Richard E. Goodrich
---------------------------------------
Director, Chicago Bridge & Iron Company
Exhibit 10.25(b)
CHICAGO BRIDGE & IRON
SAVINGS PLAN
SEVENTH AMENDMENT
Pursuant to resolution of the Board of Directors of Chicago Bridge & Iron
Company, a Delaware corporation ("Company) dated December 19, 2003, the Chicago
Bridge & Iron Savings Plan, as amended and restated effective January 1, 1997,
and previously amended ("Plan"), is hereby further amended in this Seventh
Amendment as follows:
1. Section 2.52 of the Plan is amended to read as follows:
2.52 "Rollover Contribution" means a contribution made from time to time
by an Eligible Employee to the Trustee in accordance with Section 4.05 of the
Plan (i) from a qualified trust as described in Section 402(c) of the Code, an
annuity contract described in Section 403(b) of the Code or an eligible plan
under Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state; or (ii) from an individual retirement account or
individual retirement annuity ("IRA") as described in Section 408(d)(3) of the
Code if the sole source of contributions to such IRA was one or more rollover
contributions from a qualified trust described in Section 402(c) of the Code. A
Rollover Contribution shall include any direct transfer of an eligible rollover
distribution described in Section 401(a)(31) of the Code from a qualified trust,
annuity contract, eligible governmental plan or IRA described in the preceding
sentence.
2. Section 3.01 of the Plan is amended to read as follows:
3.01 Participation.
(a) Each Eligible Employee who was a Participant in the Former
Plan immediately before the Effective Date shall continue as a Participant
in the Plan from and after the Effective Date.
(b) Except as provided in subsection (c), each other Eligible
Employee shall become a Participant on the first day on which he or she is
an Eligible Employee.
(c) An Eligible Employee who is a shop employee at the Clive,
Provo or Warren Shops or whose participation in this Plan is governed by a
collective bargaining agreement that provides for an Eligibility Period of
Service (defined below) shall become a Participant on the date he or she
completes an Eligibility Period of Service, if he or she is then employed
by an Employer as an Eligible Employee. If he or she is not then employed
by an Employer as an Eligible Employee on such date he or she shall become
a Participant on the first day thereafter that he or she is an employed by
an Employer as an Eligible Employee, unless he or she had a Period of
Severance of at least five consecutive years before again becoming an
Eligible Employee; in which case he or she will not become a Participant
until the date he or she completes an new Eligibility Period of Service
under this subsection after the Period of Severance. For purposes of this
subsection an "Eligibility Period of Service" is a one-year period
beginning on the date the Employee first completes an Hour of Service
(determined without regard to whether the Employee is an Eligible Employee
on the first or last day of such period or the number of Hours of Service
in such Period).
3. Section 3.03 of the Plan is amended to read as follows:
3.03 Participation Upon Re-Employment. A Participant who has a
Termination of Employment, and thereafter resumes employment with an
Employer as an Eligible Employee shall again become a Participant
immediately upon becoming an Eligible Employee. An Eligible Employee
described in Section 3.01(c) who has a Termination of Employment before
becoming a Participant and thereafter resumes employment with an Employer
as an Eligible Employee shall again become a Participant in accordance
with Section 3.01.
4. Section 4.05 of the Plan is amended to read as follows:
4.05 Rollover Contributions into the Plan. At the request of any Eligible
Employee the Plan Administrator shall direct the Trustee to accept a Rollover
Contribution on behalf of the Eligible Employee. A Rollover Contribution shall
be held in the Prior Plan and Rollovers Account for the Eligible Employee. If
the Rollover Contribution includes amounts that would not be includible in gross
income (except as provided by Sections 402(c), 403(a)(4), 403(b)(8) and
457(e)(16) of the Code) if not transferred as an Rollover Contribution, the Plan
Administrator shall separately account for the portion of the Rollover
Contribution which is so includible in gross income and the portion of such
Rollover Contribution which is not so includible. Each Rollover Contribution
shall be made in cash, in notes representing a loan to the Participant from a
qualified trust under provisions of such qualified trust similar to Section
7.02, or in property (which may be stock or securities issued by the former
employer) acceptable to the Trustee in its sole discretion for purposes of this
Plan. Prior to accepting a Rollover Contribution, the Plan Administrator may
require that the Eligible Employee who wants to make the Rollover Contribution
shall provide evidence reasonably satisfactory to the Plan Administrator that
such Contribution qualifies as a Rollover Contribution. Acceptance of a Rollover
Contribution shall not in any manner guarantee the result of such contribution
under any tax laws; and neither the Company, the Investment Committee, any
Employer, the Plan Administrator, the Trustee nor any Investment Manager, shall
be responsible for such tax results. If the Plan Administrator determines after
any Rollover Contribution that such contribution did not in fact qualify as a
Rollover Contribution, the amount of the Rollover Contribution, increased by
income and gains and reduced (but not below zero) by losses and expenses, shall
be returned to the Eligible Employee.
5. Section 8.02(b) of the Plan is amended to read as follows:
(b) installments at monthly, quarterly or annual intervals over a
period certain not exceeding the period determined under Section 8.06(b)
and in compliance with the requirements of Section 8.06.
6. Section 8.05(d) of the Plan is amended to read as follows:
(d) Time and Period of Distribution. Notwithstanding the foregoing
provisions of this Section 8.05, if a Participant dies before
distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(i) If the Participant's surviving spouse is the
Participant's sole designated Beneficiary, then distributions to the
surviving spouse will begin no later than December 31 of the
calendar year immediately following the calendar year containing the
fifth anniversary of the Participant's death, or by December 31 of
the calendar year in which the Participant would have attained age
70 1/2, if later,
(ii) If the Participant's surviving spouse is not the
Participant's sole designated Beneficiary, or if there is no
designated Beneficiary, then the Participant's
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entire interest will be distributed to the Beneficiary no later than
December 31 of the calendar year containing the fifth anniversary of
the Participant's death. If the Participant's surviving spouse is
the Participant's sole designated Beneficiary and the surviving
spouse dies after the Participant but before distributions to either
the Participant or the surviving spouse begin, then this clause (ii)
shall apply as if the surviving spouse were the Participant.
(iii) Notwithstanding the foregoing provisions of this Article
VIII or Section 8.06, if for any reason any portion of a
Participant's vested Accrued Benefit is to be paid after his or her
death to a trust or to an estate, distribution shall be made in the
form of an immediate lump sum payment.
For purposes of this Section 805(d) and Section 8.06, distributions are
considered to begin on the Participant's Required Distribution Date. If
distributions under an annuity purchased from an insurance company
irrevocably commence to the Participant before the Participant's Required
Distribution Date (or to the Participant's surviving spouse before the
date distributions are required to begin to the surviving spouse under
clause (i)), the date distributions are considered to begin is the date
distributions actually commence. The minimum amount of distributions
beginning pursuant to this Section 8.05(d) shall be determined under
Section 8.06(e)
7. Section 8.06 of the Plan is amended to read as follows:
8.06 Minimum Distribution Requirements.
(a) A Participant's entire interest will be distributed, or begin
to be distributed, to the Participant no later than the Participant's
Required Distribution Date. Unless a Participant's interest is distributed
in a single sum on or before his or her Required Distribution Date, the
amount required to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year (as defined in
subsection (f)), will be made in accordance with this Section 8.06. If the
Participant's interest is distributed in the form of an annuity purchased
from an insurance company, distributions thereunder will be made in
accordance with the requirements of Section 401(a)(9) of the Code and
Treasury regulations
(b) During the Participant's lifetime, the minimum amount that
will be distributed for each distribution calendar year is the lesser of:
(i) the quotient obtained by dividing the Participant's account balance by
the distribution period in the Uniform Lifetime Table set forth in section
1.401(a)(9)-9 of the Treasury regulations, using the Participant's age as
of the Participant's birthday in the distribution calendar year; or (ii)
if the Participant's sole designated Beneficiary for the distribution
calendar year is the Participant's spouse, the quotient obtained by
dividing the Participant's account balance by the number in the Joint and
Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
regulations, using the Participant's and spouse's attained ages as of the
Participant's and spouse's birthdays in the distribution calendar year.
Required minimum distributions will be determined under this Section 8.06
beginning with the first distribution calendar year and up to and
including the distribution calendar year that includes the Participant's
date of death
(c) If a Participant dies on or after the date distributions begin
and there is a designated Beneficiary, the minimum amount that will be
distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's
account balance by the longer of the remaining life expectancy of the
Participant or the remaining life expectancy of the Participant's
designated Beneficiary, determined as follows:
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(i) The Participant's remaining life expectancy is
calculated using the age of the Participant in the year of death,
reduced by one for each subsequent year.
(ii) If the Participant's surviving spouse is the
Participant's sole designated Beneficiary, the remaining life
expectancy of the surviving spouse is calculated for each
distribution calendar year after the year of the Participant's death
using the surviving spouse's age as of the spouse's birthday in that
year. For distribution calendar years after the year of the
surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving spouse
as of the spouse's birthday in the calendar year of the spouse's
death, reduced by one for each subsequent calendar year.
(iii) If the Participant's surviving spouse is not the
Participant's sole designated Beneficiary, the designated
Beneficiary's remaining life expectancy is calculated using the age
of the Beneficiary in the year following the year of the
Participant's death, reduced by one for each subsequent year.
(d) If the Participant dies on or after the date distributions
begin and there is no designated Beneficiary, the minimum amount that will
be distributed for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the Participant's
account balance by the Participant's remaining life expectancy calculated
using the age of the Participant in the year of death, reduced by one for
each subsequent year.
(e) If the Participant dies before the date distributions begin
then, subject to Section 8.05(d):
(i) If there is a designated Beneficiary, the minimum amount
that will be distributed for each distribution calendar year after
the year of the Participant's death is the quotient obtained by
dividing the Participant's account balance by the remaining life
expectancy of the Participant's designated Beneficiary, determined
as provided in subsection (d).
(ii) If there is no designated Beneficiary, distribution of
the Participant's entire interest will be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death.
(iii) If the Participant's surviving spouse is the
Participant's sole designated Beneficiary, and the surviving spouse
dies before distributions are required to begin to the surviving
spouse under section 8.05(d), this section 8.06(e) will apply as if
the surviving spouse were the Participant.
(f) For purposes of this Section 8.05(d) and this Section 8.06:
(i) "Designated Beneficiary" means the individual who is
designated as the Beneficiary under Section 8.05(a) of the Plan and
is the designated Beneficiary under Section 401(a)(9) of the
Internal Revenue Code and Section 1.401(a)(9)-1, Q&A-4, of the
Treasury regulations.
(ii) "Distribution calendar year" means a calendar year for
which a minimum distribution is required. For distributions
beginning before the Participant's death, the first distribution
calendar year is the calendar year immediately preceding the
calendar year which contains the Participant's Required Distribution
Date. For distributions beginning after the Participant's death, the
first distribution calendar year is the calendar year in which
distributions are required to begin under Section 8.05(d). The
required minimum
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distribution for the Participant's first distribution calendar year
will be made on or before the Participant's Required Distribution
Date. The required minimum distribution for other distribution
calendar years, including the required minimum distribution for the
distribution calendar year in which the Participant's Required
Distribution Date occurs, will be made on or before December 31 of
that distribution calendar year.
(iii) "Life expectancy" means life expectancy as computed by
use of the Single Life Table in Section 1.401(a)(9)-9 of the
Treasury regulations.
(iv) "Participant's account balance" means the account
balance as of the last valuation date in the calendar year
immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of
dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after
the valuation date. The account balance for the valuation calendar
year includes any amounts rolled over or transferred to the plan
either in the valuation calendar year or in the distribution
calendar year if distributed or transferred in the valuation
calendar year.
(g) The requirements of Section 8.05(d) and this Section 8.06 will
take precedence over any inconsistent provisions of the Plan.
Distributions required under Section 8.05(d) and this Section 8.06 will be
determined and made in accordance with the Treasury Regulations under
Section 401(a)(9) of the Internal Revenue Code
6. The foregoing amendment shall be effective as of January 1, 2003,
and the amendments made by paragraphs 5, 6 and 7 shall be effective for
purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.
Dated: December 19, 2003
By:
Richard E. Goodrich
---------------------------------------
Director, Chicago Bridge & Iron Company
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