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EXHIBIT NO 10.2
SIXTH AMENDMENT AND RESTATEMENT OF THE
TEAM, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
ORIGINAL EFFECTIVE DATE OF THE PLAN:
June 1, 1987
GENERAL EFFECTIVE DATE
OF THE
SIXTH AMENDMENT AND RESTATEMENT OF THE PLAN:
January 1, 1989
PLAN YEAR END:
May 31st
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SIXTH AMENDMENT AND RESTATEMENT OF THE
TEAM, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
TABLE OF CONTENTS
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ARTICLE I. Definitions................................................. 2
1.1 "Account"................................................... 2
1.2 "Act"....................................................... 2
1.3 "Administrative Committee".................................. 2
1.4 "Affiliated Company"........................................ 2
1.5 "Aggregate Account"......................................... 3
1.6 "Annual Addition"........................................... 3
1.7 "Authorized Leave of Absence"............................... 3
1.8 "Beneficiary"............................................... 4
1.9 "Break-in-Service".......................................... 4
1.10 "Code"...................................................... 5
1.11 "Considered Compensation"................................... 6
1.12 "Determination Date"........................................ 8
1.13 "Effective Date"............................................ 8
1.14 "Employee".................................................. 8
1.15 "Employee Stock Ownership Plan"............................. 8
1.16 "Employer".................................................. 9
1.17 "Employer Contribution"..................................... 9
1.18 "Employer Real Property".................................... 9
1.19 "Employer Stock"............................................ 9
1.20 "Entry Date"................................................ 9
1.21 "Family Member,"............................................ 9
1.22 "Forfeiture"................................................ 9
1.23 "Hour of Service"........................................... 9
1.24 "Key Employee".............................................. 10
1.25 "Marketable Obligation"..................................... 12
1.26 "Member".................................................... 13
1.27 "Non-Key Employee".......................................... 13
1.28 "Plan"...................................................... 13
1.29 "Plan Year"................................................. 13
1.30 "Qualifying Employer Real Property"......................... 14
1.31 "Qualifying Employer Security".............................. 14
1.32 "Retired Member"............................................ 14
1.33 "Signatory Company"......................................... 14
1.34 "Total Permanent Disability"................................ 14
1.35 "Transferred"............................................... 15
1.36 "Trust"..................................................... 15
1.37 "Trust Fund"................................................ 15
1.38 "Trustee"................................................... 15
1.39 "Year of Service"........................................... 15
ARTICLE II. Employees Entitled to Participate........................... 16
2.1 Eligibility to Participate.................................. 16
2.2 Inactive Status............................................. 17
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2.3 Participation and Service Upon Reemployment................ 17
2.4 Full Participation......................................... 18
2.5 Transferred Employee....................................... 20
2.6 Certification to Trustee................................... 20
2.7 Notice to Employees........................................ 21
ARTICLE III. Contributions.............................................. 21
3.1 Employer Contributions..................................... 21
3.2 Limitation on Amount....................................... 22
3.3 Form of Employer Contributions and
Time of Payment............................................ 22
3.4 Prohibition Against Reversion.............................. 23
ARTICLE IV. Allocation to Accounts..................................... 23
4.1 Certification by the Signatory Company..................... 23
4.2 Separate Account Maintained for Each Member................ 24
4.3 Allocation of Employer Contributions
and Forfeitures to Members' Accounts....................... 24
4.4 Annual Allocation of Trust Fund Income..................... 26
4.5 Annual Valuation of Trust Fund............................. 27
4.6 Special Allocation Upon Termination,
Partial Termination or Complete
Discontinuance of Employer Contributions................... 27
4.7 Entry of Adjustments to Each
Member's Account........................................... 28
4.8 Accounts for Transferred Members........................... 28
4.9 Rights in Trust Assets..................................... 29
ARTICLE V. Limitations on Annual Additions............................ 29
5.1 Limitation Under this Plan................................. 29
5.2 Limitation in Event of Member's
Participation in Defined Benefit Plan
and Defined Contribution Plan.............................. 29
5.3 Disposition of Excessive Annual Additions.................. 31
5.4 Combining of Plans......................................... 31
5.5 Transition Fraction........................................ 32
5.6 Right of Reversion......................................... 33
ARTICLE VI. Retirement and Designation of Beneficiary.................. 33
6.1 Normal Retirement Age...................................... 33
6.2 Designation of Beneficiary................................. 34
ARTICLE VII. Vesting of Members' Interests.............................. 36
7.1 Vesting.................................................... 36
7.2 Death...................................................... 37
7.3 Retirement................................................. 38
7.4 Disability................................................. 39
7.5 Termination of Employment.................................. 40
7.6 Disposition of Unvested Amounts............................ 42
7.7 Hardship Distribution...................................... 42
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7.8 Circumstances Rendering Vesting
Schedule Inapplicable..................................... 43
ARTICLE VIII. Claims for Plan Benefits.................................. 44
8.1 Application for Benefits.................................. 44
8.2 Processing of Claim....................................... 45
8.3 Notification to Claimant of Decision...................... 45
8.4 Review Procedure.......................................... 46
8.5 Decision on Review........................................ 47
8.6 Disputed Benefits......................................... 47
ARTICLE IX. Distributions from Trust Funds............................ 47
9.1 Occasions for Distributions............................... 47
9.2 Consent to Distribution; Special Rules
Upon Reemployment......................................... 48
9.3 Manner of Distributions................................... 49
9.4 Time of Distributions..................................... 51
9.5 Mandatory Distributions................................... 51
9.6 Distribution to Minors or Persons
under Disability.......................................... 53
9.7 Interest of Spouse of Member in the
Event of Divorce.......................................... 53
9.8 Form of Distributions..................................... 54
9.9 Restrictions on Distributed Stock of
Signatory Companies and Their Affiliated
Companies Which is not Publicly Traded.................... 55
9.10 Put Option................................................ 58
9.11 Direct Rollover of Distribution........................... 61
9.12 Missing Participant....................................... 62
ARTICLE X. Top Heavy Provisions...................................... 63
10.1 Determination of Top Heavy Plan Status.................... 63
10.2 Determination of Super Top Heavy
Plan Status............................................... 64
10.3 Aggregate Accounts........................................ 64
10.4 Aggregation Group......................................... 65
10.5 Top Heavy Plan Requirements............................... 66
10.6 Allocations to Non-Key Employees.......................... 66
ARTICLE XI. Other Qualified Plans..................................... 68
11.1 Transfers from Other Qualified Plans...................... 68
11.2 Transfers to Other Qualified Plans........................ 69
ARTICLE XII. Administrative Committee.................................. 70
12.1 Appointment, Resignation and Removal...................... 70
12.2 Rights, Powers and Authority.............................. 71
12.3 Administration............................................ 72
12.4 Annual Audit of Plan...................................... 73
12.5 Chairman and Secretary.................................... 74
12.6 Quorum and Voting Majority................................ 74
12.7 Limitation on Voting...................................... 74
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12.8 Delegation of Rights, Powers and Duties.............. 75
12.9 Liability............................................ 75
12.10 Compensation and Expense............................. 75
12.11 Bonds................................................ 76
12.12 Indemnity............................................ 76
12.13 Reporting and Disclosure............................. 77
12.14 Annual Statement to Members.......................... 78
12.15 Signatory Company to Supply Information.............. 78
12.16 Valuation of Employer Stock.......................... 78
ARTICLE XIII. Trustee.............................................. 79
13.1 Acceptance and Holding of Funds...................... 79
13.2 Responsibility for Actions........................... 79
13.3 Resolutions of Board of Directors.................... 81
13.4 Judicial Protection.................................. 81
13.5 Dealings with Third Parties.......................... 81
13.6 Annual Accounting by Trustee......................... 82
13.7 Preparation of Annual Statements to Members.......... 83
13.8 Resignation of Trustee............................... 83
13.9 Removal of Trustee................................... 83
13.10 Appointment of Successor Trustee..................... 84
13.11 Trustee's Compensation and Expenses.................. 84
13.12 Bonds................................................ 85
13.13 Indemnity............................................ 86
13.14 Voting of Employer Stock............................. 87
ARTICLE XIV. Investment Powers of Trustee......................... 88
14.1 Standards; Prudent Man Rule.......................... 88
14.2 The Investment Committee or Investment
Manager.............................................. 88
14.3 Powers of the Trustee................................ 90
14.4 Prohibited Transactions.............................. 95
ARTICLE XV. Loans to Members..................................... 97
15.1 No Plan Loans........................................ 97
ARTICLE XVI. Amendment and Termination............................ 97
16.1 Amendment General................................... 97
16.2 Amendments Necessary to Comply with
Intentions of Signatory Companies.................... 99
16.3 Termination with Respect to Signatory
Company.............................................. 99
16.4 Continuation of Plan and Trust by Successor.......... 101
ARTICLE XVII. Continuance of Plan by Successor..................... 101
17.1 Adoption of Plan by Successor........................ 101
ARTICLE XVIII. Merger of Plan or Transfer of Plan Assets............ 101
18.1 Transfer, Consolidation or Merger with
Another Plan......................................... 101
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[S] [C]
ARTICLE XIX. Adoption of Plan by a Signatory Company.................. 102
19.1 Method of Adoption....................................... 102
19.2 Withdrawal from the Plan................................. 103
ARTICLE XX. Recovery of Employer Contributions....................... 104
20.1 Initial Approval By Internal Revenue
Service.................................................. 104
20.2 Employer Contributions Conditioned Upon
Deductibility............................................ 105
20.3 Limitations.............................................. 105
ARTICLE XXI. Miscellaneous............................................ 106
21.1 Plan is a Voluntary Undertaking by the
Signatory Company........................................ 106
21.2 Benefit Provided Solely by the Trust Fund................ 106
21.3 Nonalienation............................................ 106
21.4 Applicable Law........................................... 108
21.5 Construction............................................. 108
21.6 Reference to Code or Act Sections........................ 108
21.7 Binding Agreement........................................ 109
21.8 No Joint Venture Implied................................. 109
21.9 Copies of Plan Available................................. 109
21.10 Titles and Headings...................................... 109
21.11 Counterparts............................................. 109
21.12 Severability............................................. 110
21.13 Agent for Service of Legal Process....................... 110
21.14 Withholding; Reports..................................... 110
21.15 Single Plan.............................................. 110
21.16 Acceptance............................................... 110
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SIXTH AMENDMENT AND RESTATEMENT OF THE
TEAM, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
THIS SIXTH AMENDMENT AND RESTATEMENT of the Team, Inc. Employee Stock
Ownership Plan and Trust (hereinafter sometimes called the "Plan" and "Trust")
is made this the 15th day of April, 1996, to be effective as of the 1st day of
June, 1989 unless otherwise indicated below, by and between Team, Inc.
(hereinafter sometimes called "Corporation"), of Houston, Texas and Texas
Commerce Bank, National Association (hereinafter sometimes called "Trustee"), of
Houston, Texas:
W I T N E S S E T H:
WHEREAS, on April 26, 1988 the Corporation previously adopted the Plan
and Trust for the sole and exclusive benefit of its Employees and their
Beneficiaries, effective June 1, 1987; and
WHEREAS, the Plan was previously amended on November 23, 1988, such
amendment to be effective as of June 1, 1987; and amended effective on June 1,
1987; and amended May 30, 1989, effective May 31, 1989; and amended on December
31, 1991, effective December 31, 1991; and amended and restated on November 18,
1994, effective generally June 1, 1989; and
WHEREAS, the Corporation, through the action of its Board of Directors,
wishes to amend and restate the Plan and Trust effective the date set forth
above so it may continue to qualify under Sections 401(a) and 501(a) of the
Internal Revenue Code of 1986, as amended (including UCA '92 and OBRA '93); and
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WHEREAS, the Corporation wishes to amend and restate the Plan in order
to make certain technical changes requested by the IRS for issuance of a
favorable determination letter;
NOW, THEREFORE, pursuant to the provisions of Article XVI, Section 16.1
of the Plan, the Plan is hereby amended and restated as follows:
ARTICLE I.
Definitions
Unless the context reasonably requires a broader, narrower or different
meaning, as used herein the following words and phrases shall have the meanings
set forth below:
1.1 "Account" means, with respect to a Member, the one of several
ledger accounts maintained by the Trustee showing such Member's interest in the
Trust Fund.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.3 "Administrative Committee" means the committee appointed by the
Corporation to administer the Plan hereby amended and restated.
1.4 "Affiliated Company" or "Affiliated Companies" means a corporation
or other organization which is a member of any controlled group of corporations,
trades or businesses (as defined in Sections 414(b) and 414(c) of the Code,
except that the phrase "fifty percent (50%) or more" shall be substituted for
the phrase "at least 80 percent" each place it appears in Section 1563(a)(1) of
the Code) or is a member of an affiliated service group (as defined in Section
414(m) of the Code).
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1.5 "Aggregate Account" means, with respect to each Member, the value
of the Account maintained on behalf of such Member, including all amounts
attributable to Employer Contributions and Member contributions.
1.6 "Annual Addition" means as to any Member the sum for any
"limitation year" of (a) Employer Contributions, (b) Forfeitures, (c) Employee
contributions as determined under Sections 415(c)(2), 415(l) and 419A(d)(2) of
the Code, (d) amounts allocated after March 31, 1984 to an individual medical
account as defined in Section 415(1)(2) of the Code which is part of a pension
or annuity plan maintained by the Employer and (e) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Section
419A(d)(3) of the Code) under a welfare benefit plan (as defined in Section
419(e) of the Code) maintained by the Employer. The percentage limitation
referred to in Article V, Section 5.1(b) shall not apply to: (1) any
contribution for medical benefits (within the meaning of Section 419A(f)(2) of
the Code) after separation from service which is otherwise treated as an "Annual
Addition", or (2) any amount otherwise treated as an "Annual Addition" under
Section 415(l)(1) of the Code.
1.7 "Authorized Leave of Absence" means the following periods
of absence:
(a) Absence due to accident, sickness or pregnancy as long as the
Employee is continued on the employment rolls of the Signatory Company
and remains eligible to return to work upon his recovery;
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(b) Absence due to membership in the Armed Forces of the
United States (but if such absence is not pursuant to orders issued by
the Armed Forces of the United States, only if with the consent of the
Signatory Company) provided that each such Employee shall apply for
reinstatement in the employment of the Signatory Company within ninety
(90) days after honorable discharge or after release to inactive duty,
as the case may be; or
(c) Absence due to an approved leave of absence granted by a
Signatory Company pursuant to established practices applied in a
consistent and nondiscriminatory manner, provided each such Employee
shall, prior to the expiration of such leave of absence, apply for
reinstatement in the employment of the Signatory Company.
1.8 "Beneficiary" or "Beneficiaries" means such natural person or
persons, or trustee of a trust for the benefit of a natural person or persons,
as may be determined pursuant to the provisions of Article VI, Section 6.2
hereof. For purposes of determining whether the Plan is a Top Heavy Plan, a
Beneficiary of a deceased member shall be considered as either a Key Employee or
a Non-Key Employee, depending upon whether such deceased Member was classified
as a Key Employee or Non-Key Employee.
1.9 "Break-in-Service" with respect to an Employee means any Plan Year
during which such Employee completes five hundred (500) or fewer Hours of
Service as defined in Section 1.23 hereof. Solely for the purpose of determining
whether a Member has incurred a one-year Break-in-Service, Hours of Service
shall be recognized for "maternity and paternity leaves of absence." A
"maternity or paternity leave of absence" shall mean, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring
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for such child for a period immediately following such birth or placement. For
this purpose, Hours of Service shall be credited for the computation period in
which the absence from work begins, only if credit therefore is necessary to
prevent the Employee from incurring a one-year Break-in-Service, or, in any
other case, in the immediately following computation period. The Hours of
Service credited for a "maternity or paternity leave of absence" shall be those
which would normally have been credited but for such absence, or, in any case in
which the Administrative Committee is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of Service
required to be credited for a "maternity or paternity leave of absence" shall
not exceed Five Hundred One (501). No Hours of Service will be credited for a
"maternity or paternity leave of absence" unless the Employee furnishes to the
Administrative Committee such timely information as it may reasonably require to
substantiate the length and nature of such absence.
Notwithstanding the above, for Plan Years beginning after December 31,
1984, the severance from service date of an employee who is absent from service
beyond the first anniversary of the first date of absence by reason of a
maternity or paternity absence described in Code Section 410(a)(5)(E)(i) or
Section 411(a)(6)(E)(i) is the second anniversary of the first date of such
absence. The period between the first date of absence from work is neither a
period of service nor a period of severance.
1.10 "Code" means the Internal Revenue Code of 1986, as amended.
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1.11 "Considered Compensation" means, as to each Member, all
compensation paid or accrued to him after he becomes eligible for the Plan by
the Signatory Company during the Plan Year, including regular salary, hourly
base pay, overtime pay, contractual bonuses, bonuses derived by formula, salary
deferrals under the Team, Inc. Salary Deferral Plan and Trust or an I.R.C.
Section 125 plan, and commissions and discretionary bonuses, but excluding
credits or benefits under this Plan and other contingent compensation.
Considered Compensation shall not include:
(a) Employer contributions to a plan of deferred compensation which
are not included in the Employee's gross income for the taxable year in
which contributed or employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the
Eligible Employee, or any distributions from a plan of deferred
compensation;
(b) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the Employee
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Section 403(b) of the Code (whether or not the amounts are actually
excludable from the gross income of the Employee).
Considered Compensation shall be limited to two hundred thousand dollars
($200,000) or such greater amount as may be determined pursuant to Section
415(d) and Section 401(a)(17) of the Code. There will be attributed to any five
percent (5%) owner or any of the ten (10) most Highly Compensated Employees any
compensation paid to, contributions made by or on behalf of, or benefits
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provided for any family member of such five percent (5%) owner or Highly
Compensated Employee, pursuant to Section 414(q)(6) of the Code and the
regulations thereunder. For this purpose in applying the $200,000 limit above,
such a Highly Compensated Employee and members of his family will be treated as
a single employee with one compensation and the $200,000 limit will be allocated
among the members of the family unit in proportion to each such family member's
compensation (except for the purpose of determining compensation below the
plan's integration level, if applicable). For this purpose the term "family
member" means with respect to the affected Member, such Member's spouse, such
Member's lineal descendants and ascendants and the spouses of such lineal
descendants and ascendants, as described in Section 414(q)(6)(B) of the Code.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
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fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitations under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current Plan Year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.12 "Determination Date" means, with respect to any Plan Year, (a) the
last day of the preceding Plan Year, or (b) in the case of the first Plan Year,
the last day of such Plan Year.
1.13 "Effective Date" of the Plan means June 1, 1987.
1.14 "Employee" means any person who is now or shall hereafter become
employed by a Signatory Company but excluding independent contractors,
self-employed persons or employees who are nonresident aliens deriving no earned
income (constituting income earned from sources within the United States) from a
Signatory Company.
1.15 "Employee Stock Ownership Plan" means a non-leveraged employee
stock ownership plan (i.e. other than one within the meaning of Section
4975(e)(7) of the Code). This Plan is designed to make distributions of Employer
Stock.
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1.16 "Employer" means the Corporation and any Signatory Company or
Affiliated Company, and includes all trades and businesses, whether or not
incorporated, which are either under common control as determined under Sections
414(b) and 414(c) of the Code (as modified in Section 1.4 above) or an
affiliated service group as determined under Section 414(m) of the Code, and any
other entity required to be aggregated pursuant to the regulations under Section
414(o) of the Code.
1.17 "Employer Contribution" means the total amount which the Signatory
Company pays to the Trustee under the terms of this Plan.
1.18 "Employer Real Property" means real property (and related personal
property) which is leased to a Signatory Company or to an Affiliated Company of
any such Signatory Company.
1.19 "Employer Stock" means an equity security (preferred or common,
voting or nonvoting) issued by a Signatory Company or by an Affiliated Company
of any such Signatory Company.
1.20 "Entry Date" means, for each Plan Year, June 1st and December 1st
of such Plan Year.
1.21 "Family Member," unless defined differently elsewhere in this
Plan, means with respect to an affected Member such Member's lineal descendants
and ascendants and their spouses, as described in Code Section 414(q)(6)(B).
1.22 "Forfeiture" means the portion of a Member's Account which is
forfeited because of termination of employment before full vesting.
1.23 "Hour of Service" means a time of service determined under
regulations prescribed by the Secretary of Labor. For
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purposes of this determination, "Hours of Service" shall include each hour for
which an Employee is directly or indirectly paid by the Signatory Company for
performance of duties and for reasons other than performance of duties such as
vacation, holidays, sickness, disability, layoff, Authorized Leaves of Absence,
and similar paid periods; and each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by a Signatory
Company. All "Hours of Service" shall be credited to the Employee for the
computation period or periods in which the duties were performed or, in cases
where the Employee is paid for reasons other than the performance of duties,
pursuant to the procedures outlined in Department of Labor Regulations
2530.200b2(b) and (c); provided, however, where back pay has been either awarded
or agreed to by the Signatory Company, such hours shall be credited to the
Employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement or
payment is made.
If in a Plan Year a Signatory Company elects to credit hours by using
an equivalency thereof found in Department of Labor Regulation Section
2530.200b3(e), then "Hour of Service" shall mean, on the basis of days of
employment, ten (10) hours for each day for which the employee would be required
to be credited with at least one (1) Hour of Service under Department of Labor
Regulation Section 2530.200b2.
1.24 "Key Employee" means any Employee or former Employee (and any
Beneficiary of a Employee or former Employee) who, at any time
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during the Plan Year or any of the preceding four (4) Plan Years, is:
(a) an officer of the employer (as defined in Section 416 of the
Code and the regulations issued thereunder) having annual compensation
greater than one fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A) of the Code for any such Plan Year. Only
incorporated employers will be considered as having officers;
(b) one of the ten Employees owning (or considered as owning
within the meaning of Section 318 of the Code) the largest interests in
all employers required to be aggregated under Code Sections 414(b),
414(c), and 414(m). However, an Employee shall not be considered a top
ten owner for a Plan Year under the preceding sentence if the Employee
earns no more than $30,000 in annual compensation (or such other amount
adjusted in accordance with Section 415(c)(1)(A) of the Code) as in
effect for the calendar year in which the Determination Date falls. For
this purpose, if two Employees have the same such interest, the
Employee having the greater Considered Compensation shall be treated as
having the larger interest;
(c) a "five percent owner" of the employer. "Five percent owner"
means any person who owns (or is con- sidered as owning within the
meaning of Section 318 of the Code) more than five percent (5%) of the
outstanding stock of the employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
employer. In determining the ownership percentage, employers which
would otherwise be aggregated under Sections 414(b), 414(c) and 414(m)
of the Code shall be treated as separate employers;
(d) a "one percent owner" of the employer having an annual
compensation from the employer of more than $150,000. "One percent
owner" means any person who owns (or is considered owning within the
meaning of Section 318 of the Code) more than one percent (1%) of the
outstanding stock of the employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
employer. In determining the ownership percentage, the employers which
would otherwise be aggregated under Sections 414(b), 414(c), and 414(m)
of the Code shall be treated as separate employers. However, in
determining whether an individual has compensation of more than
$150,000, compensation from each employer required to be aggregated
under Sections 414(b), 414(c) and 414(m) of the Code shall be
aggregated.
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In addition for Plan Years beginning after December 31, 1984, if a
Member or Former Member has not performed services for the Employer maintaining
the Plan at any time during the five (5) year period ending on the Determination
Date, the Aggregate Account for such Member or Former Member shall not be taken
into account for the purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan under Article X, Section 10.1 or Section 10.2.
1.25 "Marketable Obligation" means a bond, debenture, note,
certificate, or other evidence of indebtedness, referred to as an "obligation",
if:
(a) Such obligation is acquired:
(1) On the market
(A) At the price of the obligation prevailing on a
national securities exchange which is registered with the
Securities and Exchange Commission; or
(B) If the obligation is not traded on such a national
securities exchange, at a price not less favorable to the Plan
than the offering price for the obligation as established by
current bid and asked prices quoted by persons independent of
the issuer;
(2) From an underwriter, at a price
(A) Not in excess of the public offering price for the
obligation as set forth in a prospectus or offering circular
filed with the Securities and Exchange Commission; and
(B) At which a substantial portion of the same issue is
acquired by persons independent of the issuer; or
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(3) Directly from the issuer, at a price not less favorable to
the Plan than the price paid currently for a substantial portion
of the same issue by persons independent of the issuer;
(b) Immediately following acquisition of such obligation:
(1) Not more than twenty-five percent (25%) of the aggregate
amount of obligations issued in such issue and outstanding at the
time of acquisition is held by the Plan; and
(2) At least fifty percent (50%) of the aggregate amount
referred to in subparagraph (1) is held by persons independent of
the issuer; and
(c) Immediately following acquisition of the obligation, not more
than twenty-five percent (25%) of the assets of the Plan is invested in
obligations of the Signatory Company or an Affiliated Company of the
Signatory Company.
1.26 "Member" or "Members" means the person or persons employed by the
Signatory Company during the Plan Year and participating in this Plan.
1.27 "Non-Key Employee" is an Employee who is not a Key Employee at any
time during the Plan Year or any of the preceding four (4) Plan Years and the
Beneficiaries of such Employee.
1.28 "Plan" means the Team, Inc. Employee Stock Ownership Plan herein
set forth and all subsequent amendments thereto.
1.29 "Plan Year" corresponds to the fiscal year of the Corporation.
Accordingly, the Plan Year means the twelvemonth period which begins on June 1st
and ends on May 31st.
For purposes of the foregoing definition, "employer real property"
means real property (and related personal property) which is leased to a
Signatory Company or to an Affiliated Company of any such Signatory Company.
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1.30 "Qualifying Employer Real Property" means parcels of Employer Real
Property:
(a) If a substantial number of the parcels are dispersed
geographically;
(b) If each parcel of real property and the improvements thereon
are suitable (or adaptable without excessive cost) for more than one
use;
(c) Even if all of such real property is leased to one lessee
(which may be a Signatory Company or an Affiliated Company of a
Signatory Company); and
(d) If such acquisition and retention complies with the provisions
of the Act to the extent it requires diversification.
1.31 "Qualifying Employer Security" means a security issued by a
Signatory Company or by an Affiliated Company of any such Signatory Company
which is Employer Stock or a Marketable Obligation.
1.32 "Retired Member" means a person who was at one time a Member and
who has retired in accordance with the provisions of this Plan.
1.33 "Signatory Company" or "Signatory Companies" means the
Corporation, any of the Corporation's Affiliated Companies and any other
business organization which adopts this Plan.
1.34 "Total Permanent Disability" means a mental or physical disability
which, in the opinion of a physician selected by the Administrative Committee,
will prevent a Member from earning a reasonable livelihood and which:
(a) Was neither contracted, suffered or incurred while such Member
was engaged in, nor resulted from his having engaged in, a felonious
criminal enterprise;
(b) Did not result from the use of alcohol or narcotics by such
Member;
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(c) Did not result from an intentionally self-inflicted injury;
and
(d) Did not result from an injury incurred while a member of the
Armed Forces of the United States after the Effective Date of this Plan
and for which such Member receives a military pension.
1.35 "Transferred" as used with respect to an Employee and "Transfer of
an Employee" means the termination of the employment of an Employee by one
Signatory Company and the contemporaneous commencement of the employment of such
Employee by another Signatory Company.
1.36 "Trust" means the trust estate created herein as forming part of
the Plan.
1.37 "Trust Fund" means the cash, bonds, stocks and other properties
held by the Trustee pursuant to the Trust created under the Plan.
1.38 "Trustee" or "Trustees" means Texas Commerce Bank, National
Association (and its successors) and any individual(s) or corporation(s)
appointed by the Corporation as successor Trustee(s).
1.39 "Year of Service" means a period of twelve (12) consecutive months
during which an Employee has not less than one thousand (1,000) Hours of Service
with a Signatory Company or is on an Authorized Leave of Absence. For purposes
of determining eligibility under Article II, an Employee's initial twelve (12)
months of service with the Signatory Company, beginning with the day he first
performs an Hour of Service, shall be the computation period used initially to
determine whether he has a Year of Service. However, if an Employee does not
have at least one
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thousand (1,000) Hours of Service during his initial twelve (12) months of
service, the one thousand (1,000) Hours of Service requirement shall be measured
with respect to the Plan Year which includes the first anniversary of his
employment commencement date and, where necessary, subsequent Plan Years. The
computation of Years of Service before a Break-in-Service includes Years of
Service required for eligibility plus all vesting computation periods based on
one thousand (1,000) Hours of Service during a Plan Year. For all other purposes
the computation of such period shall be made with reference to the Plan Year.
Years of Service for eligibility and vesting purposes shall also include Hours
of Service with an Affiliated Company to the extent designated by the
Administrative Committee or otherwise required by law.
ARTICLE II.
Employees Entitled to Participate
2.1 Eligibility to Participate. Every Employee shall automatically
become a Member of the Plan on the Entry Date coincident with or next following
the completion of one (1) Year of Service. It shall not be necessary for the
Employee to make written application for membership to the Administrative
Committee in order to be entitled to benefits hereunder. In accepting such
benefits, however, the Employee shall be deemed for all purposes to have agreed
to participate, to conform to the requirements of the Plan and to furnish to the
Administrative Committee such information as is necessary to enable it to
fulfill its duties and responsibilities under the terms and provisions of the
Plan.
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2.2 Inactive Status. In the event that any Member shall fail, in any
Plan Year of his employment after the Effective Date, to accumulate one thousand
(1,000) Hours of Service but does not incur a one-year Break-in-Service, his
Account shall be placed on inactive status. In such case, such Plan Year shall
not be considered as a Year of Service for the purpose of determining the
Member's vested interest in accordance with Article VII, Section 7.1 hereof and
the Member shall not share in the Employer Contributions or Forfeitures for any
such Plan Year, but he shall continue to receive income allocations and
valuation adjustments in accordance with Article IV, Sections 4.4 and 4.5. In
the event such Member accumulates one thousand (1,000) Hours of Service in a
subsequent Plan Year, his Account shall revert to active status with full rights
and benefits under this Plan restored.
2.3 Participation and Service Upon Reemployment. Participation in the
Plan shall cease upon termination of employment with the Signatory Company.
Termination of employment may result from retirement, death, disability,
voluntary or involuntary termination of employment, unauthorized absence or
failure to return to active employment with the Signatory Company by the date on
which an Authorized Leave of Absence expires.
Upon the reemployment of any person after the Effective Date who had
previously been employed by the Signatory Company on or after the Effective
Date, the following rules shall apply in determining his participation in the
Plan:
(a) If the reemployed Employee was not a Member in the Plan during
his prior period of employment, he must meet the requirement of Section
2.1 for participation in the Plan as if he were a new Employee;
provided, however,
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that if the reemployment commencement date of such Employee occurs
within the twelve (12) consecutive month period beginning with the
Employee's employment commencement date, the eligibility computation
period for such reemployed Employee must be the twelve (12) consecutive
month period beginning with the Employee's employment commencement date
and not the date of his reemployment;
(b) If the reemployed Employee had previously satisfied the
requirement of Section 2.1 and had been a Member of the Plan prior to
his termination of employment, he shall become a Member on his
reemployment commencement date provided a one-year Break-in-Service has
not occurred prior to his resumption of employment;
(c) If the reemployed Employee had been a Member of the Plan prior
to his termination of employment but suffered a one-year
Break-in-Service prior to his resumption of employment, he shall not be
eligible to reparticipate in the Plan until he has completed a Year of
Service after his return. Upon completion of such Year of Service, the
reemployed Employee shall be considered to be a Member of the Plan for
purposes of determining eligibility and Years of Service for vesting
(but not for allocations) as of his reemployment commencement date.
For purposes of this Section, an Employee's employment commencement date shall
be the date he first performs an Hour of Service for the Signatory Company and
his reemployment commencement date shall be the date he first performs an Hour
of Service upon reemployment with the Signatory Company.
2.4 Full Participation. For Plan Years commencing on or after June 1,
1994 a Member who completes a Year of Service and who is employed on the last
day of the Plan Year shall participate fully in the Plan for such Plan Year. For
Plan Years commencing prior to June 1, 1994, a Member shall fully participate in
the Plan for the Plan Year if he completes one thousand (1,000) Hours of
Service. A Member who fully participates is eligible to share in the Employer
Contributions, Forfeitures, income allocations and valuation adjustments for
such Plan Year.
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Any Member who fails to complete a Year of Service during the Plan Year
in which he dies, retires, is determined to be suffering from a Total Permanent
Disability or otherwise terminates his employment with a Signatory Company shall
to the extent previously eligible:
(a) share in any Employer Contributions through the end of the Plan
Year preceding his termination of employment,
(b) continue to receive income allocations and valuation
adjustments to the amount in his Account pursuant to Article IV,
Sections 4.4 and 4.5 after his termination of employment through the
valuation date preceding the date his Account is completely
distributed, and
(c) share in any Forfeitures through the end of the Plan Year
preceding his termination of employment.
Conversely, if a Member completes a Year of Service during a Plan Year
in which such a terminating event occurs, he shall be eligible to participate
fully in Employer Contributions and Forfeitures for the Plan Year in which such
terminating event occurs; subject, however, to any additional requirements set
forth in Article III, Section 3.1 or Article IV, Section 4.3.
Notwithstanding any provision in the Plan to the contrary, if this Plan
would otherwise fail to meet the requirements of Code Sections 401(a)(26),
410(b)(1), or 410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or percentage of
Members for a Plan Year, then the following rules shall apply:
(d) The group of Members eligible to share in the Employer
Contribution and Forfeitures for the Plan Year shall be expanded to
include the minimum number of Members who would not otherwise be
eligible as are necessary to satisfy the applicable test specified
above. The specific Members who shall become eligible under the
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terms of this paragraph shall be those who are actively employed on the
last day of the Plan Year and, when compared to similarly situated
Members, have completed the greatest number of Hours of Service in the
Plan Year.
(e) If after application of paragraph (d) above, the applicable
test is still not satisfied, then the group of Members eligible to
share in the Employer Contribution and Forfeitures for the Plan Year
shall be further expanded to include the minimum number of Members who
are not actively employed on the last day of the Plan Year as are
necessary to satisfy the applicable test. The specific Members who
shall become eligible to share shall be those Members, when compared to
similarly situated Members, who have completed the greatest number of
Hours of Service in the Plan Year before terminating employment.
Nothing in the preceding three paragraphs shall permit the reduction of
a Member's accrued benefit, expressed as his Account balance. Therefore any
amounts that have previously been allocated to Members may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an additional
contribution equal to the amount such affected Members would have received had
they been included in the allocations, even if it exceeds the amount which would
be deductible under Code Section 404. Any adjustment to the allocations pursuant
to this paragraph shall be considered a retroactive amendment adopted by the
last day of the Plan Year.
2.5 Transferred Employee. An Employee's status as either an Employee or
a Member shall not be deemed to be interrupted or severed by the fact that he is
transferred from the employ of one Signatory Company to that of any other
Signatory Company or performs services for more than one Signatory Company.
2.6 Certification to Trustee. Eligibility shall be deter- mined and
certified to the Trustee by the Administrative Committee,
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based upon information furnished by the Signatory Company, as soon as
practicable after the end of each Plan Year.
2.7 Notice to Employees. The Administrative Committee shall notify each
Employee of his eligibility to participate as soon as practicable after he has
satisfied the service requirement provided for in Section 2.1 hereof, and each
such notice shall be accompanied by a description of the Plan written in a
manner reasonably calculated to be understood by the Employee if the Employee
has not previously received such notice. The Administrative Committee shall
notify each Member whose Account is placed on inactive status or restored to
active status pursuant to Section 2.2 hereof, as soon as practicable after such
action has been taken.
ARTICLE III.
Contributions
3.1 Employer Contributions. For each Plan Year beginning with the first
Plan Year with respect to which this Plan is adopted by a Signatory Company,
such Signatory Company shall, subject to the discretion of the Board of
Directors of the Corporation and pursuant to the limitations contained in
Section 3.2 hereof, contribute to the Trust a sum which the Board of Directors
of each such Signatory Company determines to be a proper Employer Contribution.
The amount of the Employer Contribution for each Plan Year may be established by
a resolution adopted by such Board of Directors and communicated to the Members
by the Signatory Company. No Member shall be required or permitted to make
contributions to the Plan or Trust.
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Notwithstanding any other provision of this Plan, pursuant to Article
IV, Section 4.3 a Member shall share in the Employer Contribution for any Plan
Year only if such Member is employed by a Signatory Company on the last day of
such Plan Year.
3.2 Limitation on Amount. In no event shall the Signatory Company's
Employer Contribution exceed a sum equal to fifteen percent (15%) of the total
Considered Compensation otherwise paid or accrued during such Plan Year to all
Members employed by such Signatory Company plus the maximum amount deductible
under the "carryover" provisions of the Code relating to Employer Contributions
in previous years of less than the maximum amount permissible. In addition, in
no event shall the aggregate of such Employer Contribution and the Signatory
Company's contributions to all other pension, profit sharing or stock bonus
plans for such Plan Year exceed the amount deductible from the Signatory
Company's income for such Plan Year under Section 404(a)(7) of the Code or any
statute of similar import. In the event the aggregate of the Signatory Company's
contributions under all plans would exceed such maximum deductible amount, and
the Employer Contribution has not yet been paid into the Trust, the Employer
Contribution under this Plan shall be reduced by the amount necessary to reduce
the Signatory Company's aggregate contribution under all such plans to the
maximum amount deductible under said section of the Code.
3.3 Form of Employer Contributions and Time of Payment. Employer
Contributions will be paid in cash or Qualifying Employer Securities as the
Signatory Company's Board of Directors may from
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time to time determine. Qualifying Employer Securities will be valued at their
then fair market value.
The Employer Contribution of each Signatory Company for each Plan Year
shall be paid to the Trustee in one or more installments as the Signatory
Company (subject to the consent of the Corporation) may from time to time
determine; provided, however, that all such installments shall be paid no later
than the time prescribed by law for filing such Signatory Company's federal
income tax return for such taxable year (including extensions thereof).
3.4 Prohibition Against Reversion. In no event, except as expressly
provided in Article XX, Sections 20.1 and 20.2 and in Article V, Section 5.6
hereof, shall the principal or income of the Trust herein created be paid to or
revert to the Signatory Company, or be used for any purpose other than for the
exclusive benefit of the Members or their Beneficiaries.
ARTICLE IV.
Allocation to Accounts
4.1 Certification by the Signatory Company. As soon as practicable
after the end of the Plan Year, the Signatory Company shall certify to the
Administrative Committee the amount of its Employer Contribution for the Plan
Year then ended, the names of the Members entitled to share therein, the amount
of Considered Compensation paid to each Member for such Plan Year and the amount
of Considered Compensation paid to all Members for such Plan Year. Such
certification shall be conclusive evidence of such facts.
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4.2 Separate Account Maintained for Each Member. The Administrative
Committee shall create and maintain adequate records to disclose the interest in
the Trust Fund of each Member, Retired Member and Beneficiary. Such records
shall be in the form of individual Accounts, and credits and charges shall be
made to such Accounts in the manner herein described. The maintenance of
individual Accounts is only for accounting purposes and a segregation of the
assets of the Trust Fund to each Account shall not be required.
4.3 Allocation of Employer Contributions and Forfeitures to Members'
Accounts.
(a) The Administrative Committee shall allocate the aggregate of
Employer Contributions made by all the Signatory Companies for each
Plan Year among each Member employed by any such Signatory Company and
entitled under Section 2.4 above to receive an allocation for such Plan
Year in the proportion that the Considered Compensation of each Member
bears to the total Considered Compensation of all such Members for such
Plan Year. This allocation shall be a single allocation of the
aggregate annual Employer Contribution among all such eligible Members
for such Plan Year.
If a Member has been transferred or performs services for more than
one (1) Signatory Company during the Plan Year, such Member shall be
entitled to have allocated to his Account a portion of the Employer
Contribution made by each Signatory Company by whom such Member was
employed during such Plan Year and the amount
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allocated to the Member's Account shall be computed with respect to
each Signatory Company in the manner hereinabove provided based upon
the Considered Compensation earned from each Signatory Company during
the Plan Year. A Member shall not receive a lesser allocation to his
Account, by reason of having been transferred or having performed
services for more than one (1) Signatory Company during the Plan Year,
than such Member would have received had he received all of his
Considered Compensation during such Plan Year from one Signatory
Company. If an adjustment of the allocation to such Member's Account is
necessary in order to achieve this result, it shall be made by the
Signatory Company with whom such Member was employed for the greatest
portion of the Plan Year.
(b) The Administrative Committee shall, as soon as practicable
after the end of each Plan Year, determine the Members from the
Signatory Company who have forfeited all or part of their respective
interests in their Accounts pursuant to the provisions of Article VII,
Sections 7.1 and 7.6 hereof during such Plan Year. The Administrative
Committee shall then allocate among those Members employed by such
Signatory Company who are eligible to share in Employer Contributions
under Article II, Section 2.4 for such Plan Year, the total amount of
Forfeitures in the proportion that the Considered Compensation of each
Member bears to the total Considered
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Compensation of all Members employed by the Signatory
Company for such Plan Year. The allocation in this
Section 4.3(b) shall be made in the same manner, on a
single uniform aggregate basis, as in Section 4.3(a)
above.
4.4 Annual Allocation of Trust Fund Income. As soon as practicable
after the end of each Plan Year, the Administrative Committee shall determine
the amount of income (or loss) earned by the Trust for the Plan Year then ended.
The Administrative Committee shall allocate such remaining income (or loss)
among the Members' Accounts in the proportion that the total amount in each
Member's Account at the beginning of the Plan Year bears to the aggregate
combined total in all Members' Accounts at the beginning of such Plan Year.
However, in the event that a Member receives a distribution from his
Account during a Plan Year, the allocation of income to such Member's Accounts
for such Plan Year shall be based upon the balance in such Members' Accounts at
the beginning of the Plan Year minus all distributions paid during that Plan
Year. If a Member receives the total balance in his Accounts during a Plan Year,
he shall not be entitled to an income allocation for such Plan Year.
In the event an allocation of income under this Section 4.4 results in
an inequitable distortion of a Member's Account, the Administrative Committee in
its discretion (exercised pursuant to a uniform and nondiscriminatory policy)
may make an interim allocation of income at any time during the Plan Year.
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4.5 Annual Valuation of Trust Fund. As of the end of each Plan Year the
Trustee shall revalue the Trust Fund at its then fair market value. For purposes
of this Section 4.5, the Trust Fund shall not include any Employer Contributions
made to the Trust during such Plan Year. The Administrative Committee shall
allocate any appreciation or depreciation in the Trust Fund among the Members in
the proportion that the amount in each Member's Account at the beginning of the
Plan Year bears to the aggregate of all Members' Accounts at the beginning of
such Plan Year.
However, in the event that a Member receives a distribution from his
Account during a Plan Year, the valuation adjustment allocated to such Member's
Account for such Plan Year shall be based upon his Account balance at the
beginning of the Plan Year minus all distributions paid during that Plan Year.
If a Member receives the total balance in his Account during a Plan Year, he
shall not be entitled to a valuation adjustment for such Plan Year.
In the event an allocation of income under this Section 4.5 would
result in an inequitable distortion of a Member's Account, the Administrative
Committee in its discretion may make an interim valuation and allocation at any
time during the Plan Year. Such Administrative Committee's discretion shall be
exercised pursuant to a uniform, nondiscriminatory policy adopted by it.
4.6 Special Allocation Upon Termination, Partial Termination or
Complete Discontinuance of Employer Contributions. Notwithstanding any other
provision of this instrument to the contrary, if:
(a) the Plan is terminated pursuant to Article XVI, Section 16.3
hereof; or
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(b) the Plan is terminated with respect to a group of Members
resulting in a partial termination of the Plan; or
(c) there occurs a complete discontinuance of Employer
Contributions under the Plan,
all previously unallocated funds shall be allocated to the Accounts of the
Members at the time of such termination, partial termination or complete
discontinuance of Employer Contributions under the Plan using the allocation
methods prescribed by Sections 4.3 through 4.5 hereof as appropriate depending
on the nature and source of such unallocated funds.
4.7 Entry of Adjustments to Each Member's Account. The Administrative
Committee shall credit to each Member's Account such Member's portion of the
adjustments and allocations required by Sections 4.3 through 4.5 of this Plan,
so that all such adjustments and allocations become effective and shall be
entered into each Member's Account as of the end of the Plan Year to which they
are attributable unless required more frequently by the Trustee or the
Administrative Committee pursuant to Sections 4.4 and 4.5.
4.8 Accounts for Transferred Members. In the case of a Member who has
transferred or performs services for more than one Signatory Company during a
Plan Year, the Administrative Committee shall maintain on its books such
Member's Accounts and open or reopen Accounts for such Member with respect to
each Signatory Company to which the Member has transferred. In this fashion, the
Administrative Committee may maintain several different Accounts with respect to
each Transferred Member. However, the foregoing provisions of this Section 4.8
are for administrative convenience only.
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4.9 Rights in Trust Assets. No such allocations, adjustments, credits
or transfers shall ever vest in any Member any right, title or interest in the
Trust Fund except at the times and upon the terms or conditions below set forth.
Such Trust Fund shall, as to all Accounts of Members, be a commingled fund, and
all securities purchased or otherwise acquired by the Trustee under the Plan
shall be issued in the name of the Trustee for the Plan, or in such other name
or names as the Trustee shall designate pursuant to the power granted the
Trustee in Article XIV, Section 14.3(b) hereof.
ARTICLE V.
Limitations on Annual Additions
5.1 Limitation Under this Plan. Notwithstanding any provisions herein
to the contrary, the Annual Addition to the Accounts of any Member under all
defined contribution plans of his Employer (as that term is defined in Section
5.4 hereof) for any Plan Year cannot exceed the lesser of:
(a) Thirty thousand dollars ($30,000) or such greater amount as may
be determined pursuant to Section 415(c)(1)(A) of the Code, as adjusted
under Section 415(d) of the Code; or
(b) Twenty-five percent (25%) of the Member's total compensation
from his Employer for such Plan Year, as determined under Section
415(c)(3) of the Code and the regulations thereunder.
5.2 Limitation in Event of Member's Participation in Defined Benefit
Plan and Defined Contribution Plan. In any case in which an Employee is a
participant in both a defined benefit plan and this Plan, the sum of the defined
benefit plan fraction and the defined contribution plan fraction for any year
may not exceed 1.0 except as may be permitted by Section 2004(a)(3) or otherwise
under
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the Act. The defined benefit plan fraction for any year is a fraction (a) the
numerator of which is the projected annual benefit of the Member under the plan
(determined as of the close of the Plan Year); and (b) the denominator of which
is the lesser of: (i) the product of 1.25, multiplied by the dollar limitation
in effect for such Plan Year under Section 415(b)(1)(A) of the Code, or (ii) the
product of 1.4, multiplied by the amount which may be taken into account under
Section 415(b)(1)(B) of the Code with respect to such Member for such Plan Year.
The defined contribution plan fraction for any year is a fraction (a) the
numerator of which is the sum of the Annual Additions to the Member's Accounts
as of the close of the Plan Year; and (b) the denominator of which is the sum of
the lesser of the following amounts determined for such Plan Year and for each
prior Year of Service: (i) the product of 1.25, multiplied by the dollar
limitation in effect for such Plan Year as may be determined pursuant to Section
415(c)(1)(A) of the Code, or (ii) the product of 1.4, multiplied by the amount
which may be taken into account under Section 415(c)(1)(B) of the Code for such
Plan Year. The Administrative Committee shall reduce the numerator of the
defined contribution plan fraction in order that their sum shall not exceed 1.0
for any Plan Year in accordance with Section 5.3 hereof.
However, 1.0 shall be substituted for 1.25 for any Top Heavy Plan Year
unless an extra minimum Employer Contribution equal to one percent (1%) of the
Considered Compensation of all Members who are Non-Key Employees is allocated
among such Members pursuant to Article IV, Section 4.4. Notwithstanding the
foregoing, 1.0 shall
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37
be substituted for 1.25 for any Plan Year in which the Plan is a Super Top Heavy
Plan.
5.3 Disposition of Excessive Annual Additions. If as a result of either
the allocation of Forfeitures or a reasonable error in estimating a Member's
Considered Compensation, the Annual Additions under the terms of the Plan for a
particular Member would cause the limitations of Section 415 of the Code which
are applicable to that Member for that Plan Year to be exceeded, the excess
amounts shall not be deemed Annual Additions to such Member's Accounts in that
Plan Year, but shall be treated as follows:
(a) The excess amounts in the Member's Account must be held
unallocated in a suspense account for the Plan Year, and allocated and
reallocated in the following Plan Year to all Plan Members pursuant to
the provisions of Section 5.3(b) below. The excess amounts must be used
to reduce Employer Contributions for such following Plan Year (and
succeeding Plan Years, as necessary) for all Plan Members. Excess
amounts shall not be distributed to Members or former Members.
(b) The excess amounts in the Member's Account must be allocated
and reallocated to the Accounts of the other Members in the Plan
pursuant to the provisions of Article IV, Section 4.3. However, if the
allocation or reallocation of the excess amounts further causes the
limitations of Section 415 of the Code to be exceeded with respect to
each Plan Member for the Plan Year for which such allocation or
reallocation is made, then these amounts must be held unallocated in a
suspense account. If a suspense account is in existence at any time
during a particular Plan Year (other than the Plan Year described in
the preceding sentence), all amounts in the suspense account must first
be allocated and reallocated to Members' Accounts (subject to the
limitations of Section 415 of the Code) before any Employer
Contributions may be made to the Plan for that Plan Year.
5.4 Combining of Plans. For purposes of applying the limitations
contained in this Article, all defined contribution plans, terminated or not, of
an Employer shall be treated as one defined contribution plan and all defined
benefit plans, terminated or not,
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38
of an Employer shall be treated as one defined benefit plan. For purposes of
this Article, Employer shall mean all trades or businesses, whether or not
incorporated, which are either under common control as determined under Sections
414(b) or 414(c) of the Code or are an affiliated service group as determined
under Section 414(m) of the Code. For the purpose of applying the limitations
set forth above, as imposed by Section 415 of the Code, a Member's compensation
or annual benefit payable by the Signatory Company or any Affiliated Company of
the Signatory Company shall be treated as being from a single employer. For
purposes of the limitations of this section and of applying Sections 414(b) and
414(c) of the Code as they relate to Sections 415 and 1563(a)(1) of the Code,
the phrase "more than fifty percent (50%)" shall be substituted for the phrase
"at least eighty percent (80%)".
5.5 Transition Fraction. At the election of the Administrative
Committee, in applying the provision of Section 5.3 with respect to the defined
contribution fraction for any Plan Year ending after December 31, 1982, the
amount taken into account for the denominator for each Member for all Plan Years
ending before January 1, 1983 shall be an amount equal to the product of (a) the
amount of the denominator determined under Section 5.3 (as in effect for the
Plan Year ending in 1982) for Plan Years ending in 1982, multiplied by (b) the
"transition fraction".
For purposes of the preceding paragraph, the term "transition fraction"
shall mean a fraction (a) the numerator of which is the lesser of (1) $51,875 or
(2) 1.4 multiplied by twenty-five percent (25%) of the Member's compensation for
the Plan Year ending in
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1981, and (b) the denominator of which is the lesser of (1) $41,500 or (2)
twenty-five percent (25%) of the Member's compensation for the Plan Year ending
in 1981.
Notwithstanding the foregoing, for any Plan Year in which the Plan is a
Top Heavy Plan, $41,500 shall be substituted for $51,875 in determining the
transition fraction.
5.6 Right of Reversion. Notwithstanding Article III, Section 3.4, in
the event of termination of the Plan as provided in Article XVI, Section 16.3
any amounts held in the suspense account shall revert to the Signatory Company.
ARTICLE VI.
Retirement and Designation of Beneficiary
6.1 Normal Retirement Age. "Normal Retirement Age" means the date on
which an Employee attains age sixty-five (65). Each Employee shall retire from
employment on the date he reaches his Normal Retirement Age; provided, however,
that an Employee may continue employment thereafter subject to the condition
that, in the event the Signatory Company has nineteen (19) or fewer employees,
such Employee must obtain the approval of the Board of Directors of the
Signatory Company to continue employment after attaining his Normal Retirement
Age. Each Employee who is employed by the Signatory Company on the date it
adopts the Plan shall be deemed for purposes of this Section 6.1 to have secured
the approval of the Board of Directors of the Signatory Company and shall
continue to be so deemed until such approval is affirmatively withdrawn. This
Section 6.1 shall be applied in a uniform, nondiscriminatory manner to all
Employees, present and future.
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6.2 Designation of Beneficiary. Each Member and each Retired Member
shall have the unrestricted right at any time, and from time to time, to
designate and to rescind or change any designation of a primary and contingent
Beneficiary or Beneficiaries to receive benefits in the event of his death,
except as hereinafter provided. A Member who is married at the time of his death
shall have the ability to designate a Beneficiary only with his spouse's written
consent. Such consent must designate a specific Beneficiary, must acknowledge
the effect of the Member's designation and must be witnessed either by a member
of the Administrative Committee or by a Notary Public. Otherwise the death
benefits of the Member shall be paid to the Member's spouse except as
hereinafter provided. A Member's designation of a Beneficiary other than such
Member's spouse, which is consented to by such Member's spouse as provided
above, may not be changed without subsequent spousal consent (unless the
spouse's consent to the original Beneficiary designation expressly permits
designations by the Member without further spousal consent). Any such
designation, change or rescission of designation shall be made in writing by
filling out and furnishing to the Administrative Committee the appropriate form
prescribed by it. A contingent Beneficiary or Beneficiaries shall be entitled to
receive any unpaid death benefits only if no primary Beneficiary is alive or
legally entitled to receive it on the date of payment of the benefit. Any
estate, assignee or appointee of either a primary or a contingent Beneficiary
shall have no interest in or right to receive any death benefit payment not
actually made before the death of such Beneficiary. The last such designation
received by
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the Administrative Committee shall be controlling over any testamentary or other
disposition; provided, however, that no designation, rescission or change
thereof shall be effective unless received by the Administrative Committee prior
to the death of the Member. Upon the divorce of a Member or a retired Member,
any designation of his divorced spouse as a primary Beneficiary or as a
contingent Beneficiary hereunder shall automatically terminate and become
ineffective, and such divorced spouse shall have no interest in or right to
receive any death benefit hereunder unless such Member shall file with the
Administrative Committee, after the date of such divorce decree, a new
designation of Beneficiary naming his divorced spouse as a Beneficiary
hereunder. If there is no designated Beneficiary alive at the time of any
payment of the death benefit, then the death benefit or balance thereof shall be
paid to the surviving spouse of the deceased Member or, if there is no surviving
spouse, to the estate of the deceased Member. The Signatory Company employing a
Member shall not be named as his Beneficiary. If the Administrative Committee
shall be in doubt as to the right of any Beneficiary designated by a deceased
Member to receive any unpaid death benefit, the Administrative Committee may
direct the Trustee to pay the amount in question to the estate of such Member,
in which event the Trustee, the Signatory Company, the Administrative Committee
and any other person in any manner connected with the Plan shall have no further
liability in respect to the payment so made.
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ARTICLE VII.
Vesting of Members' Interests
7.1 Vesting. Each Member's interest in the amount credited to his
Accounts attributable to Employer Contributions shall vest as provided in the
schedule set forth below and, once vested, shall not be forfeitable for any
reason.
Years of Service Vested Percentage
---------------- -----------------
Less than 3 0%
3, but less than 4 20%
4, but less than 5 40%
5, but less than 6 60%
6, but less than 7 80%
7 or more 100%
The amount credited to a Member's Account which is not vested as of the
date such Member terminates employment shall be disposed of as provided in
Section 7.6 hereof.
Years of Service Computation. For purposes of determining the
Member's vested interest in the assets in his Account, all Years of
Service with the Signatory Company (including Years of Service prior to
the adoption of the Plan), or any Affiliated Company as of the date of
severance shall be taken into account except the following:
(i) Service during any period prior to the Effective Date of
the Plan or the effective date of participation in the Plan for the
Signatory Company which employs the Member;
(ii) With respect to Breaks-in-Service:
(A) If a Member does not have a vested interest in his
Account at the time he incurs a Break-in-Service, Years of
Service completed by such Member prior to such Break shall
not be taken into account if at such time the number of
consecutive one-year Breaks-in-Service included in his most
recent Break-in-Service equals or exceeds the aggregate
number of his Years of Service (whether or not consecutive)
completed before such Break, and for
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Plan Years beginning after December 31, 1984, or five (5), if
greater. In computing the aggregate number of Years of
Service prior to such Break, Years of Service which could
have been disregarded under this subsection by reason of a
prior Break-in-Service may be disregarded. Pre-Break and
post-Break Years of Service will not be aggregated until the
Member has completed one (1) Year of Service after his return
to employment;
(B) If a Member has a one-year Break-in-Service (five
(5) consecutive years of Break-in-Service for Plan Years
beginning after December 31, 1984), then any service after
such Break will not increase the Member's vested interest in
his Account before such Break; and
(C) If a Member has a vested interest in his Account and
his separation from employment and his subsequent
reemployment do not result in a one-year Break-in-Service
(five (5) consecutive years of Break-in-Service for Plan
Years beginning after December 31, 1984), his Account will
continue to vest, starting at the point on the vesting
schedule the Member had achieved prior to the date he left
employment.
7.2 Death. On the death of a Member (or a Retired Member prior to the
complete distribution of such Retired Member's Accounts) his death benefit shall
be one hundred percent (100%) of the amount credited to his Accounts at the end
of the Plan Year in which he dies. Payment of such death benefit to the Member's
designated Beneficiary or Beneficiaries shall commence within one hundred twenty
(120) days after the end of the Plan Year in which the Member dies or as soon
thereafter as administratively practicable. However, in the event that the
payment of his death
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benefit under this Section would violate Article IX, Section 9.4, then such
benefit shall commence no later than sixty (60) days after the end of the Plan
Year in which the Member dies. Notwithstanding any other provision of this Plan,
in the case of a Member who is married at the time of his death, the death
benefit under this Section (reduced by any security interest held by the Plan by
reason of a loan outstanding to such Member) shall be payable in full to such
Member's spouse, or, in the event there is no surviving spouse or such surviving
spouse has consented in the manner provided in Article VI, Section 6.2, to a
designated Beneficiary.
7.3 Retirement. Upon attaining his Normal Retirement Age as provided in
Article VI, Section 6.1, a Member shall have a nonforfeitable right to his
Accounts. Such retirement benefit shall be paid to the Member in the form of
benefit determined pursuant to Article IX, Section 9.3. The payment of his
retirement benefit shall commence within one hundred twenty (120) days after the
end of the Plan Year in which he retires after attaining his Normal Retirement
Age, or as soon thereafter as administratively practicable, unless the Member
requests otherwise in writing. However, in the event that the payment of his
retirement benefit under this Section would violate Article IX, Section 9.4,
then such benefit shall commence no later than sixty (60) days after the end of
the Plan Year in which such Member retires. The Administrative Committee may, in
its discretion (exercised pursuant to a uniform and nondiscriminatory policy),
make distribution(s) in accordance with Article IX, Section 9.3 to a Member who
remains in employment
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with a Signatory Company after attaining Normal Retirement Age and who requests
such distribution(s).
7.4 Disability. In the event the Administrative Committee determines
that a Member is suffering from a Total Permanent Disability, his disability
benefit shall be one hundred percent (100%) of the amount credited to his
Account at the end of the Plan Year following such determination. Such
disability benefit shall be paid to the Member in the form of benefit determined
by the Administrative Committee pursuant to Article IX, Section 9.3. Payments
shall commence within one hundred twenty (120) days after the end of the Plan
Year in which the Member is determined to be totally, permanently disabled, or
as soon thereafter as administratively practicable, unless the Member requests
otherwise in writing. However, in the event that the payment of his disability
benefit under this Section would violate Article IX, Section 9.4, then such
benefit shall commence no later than sixty (60) days after the end of the Plan
Year in which such Member terminates employment, but in no event later than the
time prescribed in Section 9.4 below.
If a Member who had previously been determined to be totally disabled
returns to the employment of the Signatory Company prior to receiving the entire
balance in his Account, a separate ledger account shall be created for such
Member and the remaining portion of his Accounts shall be transferred to the
separate ledger account. Such separate ledger account shall share in income
allocations and valuation adjustments pursuant to Article IV, Sections 4.4 and
4.5 until the amount is distributed in full upon
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his subsequent death, retirement, determination of Total Permanent Disability or
severance of employment. Another, separate Plan Account shall be established for
the returning Member as if he were a new Member, and this Account shall vest
pursuant to Section 7.1 starting at the point on the vesting schedule the Member
had achieved prior to the determination of his Total Permanent Disability.
7.5 Termination of Employment. A Member whose employment is terminated
for any reason other than death, retirement at Normal Retirement Age or Total
Permanent Disability shall be entitled to elect commencement of a distribution
no later than one year after the close of the fifth Plan Year following the Plan
Year in which the Member terminated employment equal to the vested amount in
such Member's Accounts determined under Section 7.1 as of the date such Member's
employment terminates. In the event the Member dies or is determined by the
Administrative Committee to be totally disabled prior to attaining his Normal
Retirement Age, then such Member or his Beneficiary shall be entitled to elect
commencement of his severance benefit within one hundred twenty (120) days after
the end of the Plan Year in which he dies or is determined to be totally
disabled, or as soon thereafter as administratively practicable. However, in the
event that the payment of his severance benefit under this Section would violate
Article IX, Section 9.4, then such benefit shall commence no later than sixty
(60) days after the latest date determined under that section.
In the event that the Plan is amended to change the vesting schedule,
the Member's vested interest in the amount credited to
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his Account shall not be less than his nonforfeitable vested interest as
computed under this Section 7.5. If a Member has at least three (3) Years of
Service, he shall have the right during the election period to elect to have the
nonforfeitable percentage of his benefit derived from Employer Contributions
computed under Section 7.1 and this Section 7.5 without regard to such
amendment. Notwithstanding the preceding sentence, no election need be provided
for any Member whose nonforfeitable percentage under the Plan, as amended, at
any time cannot be less than such percentage determined without regard to such
amendment. The election period shall begin the date the amendment is adopted and
end no earlier than the latest of (a) sixty (60) days after the date the
amendment is adopted, (b) sixty (60) days after the amendment becomes effective,
or (c) sixty (60) days after the Member is issued written notice of the Plan
amendment by the Employer, Signatory Company or Administrative Committee. Such
election must be made in writing and given to the Administrative Committee
within the election period. A Member shall be considered to have completed three
(3) Years of Service for purposes of this paragraph if such Member has completed
three (3) Years of Service as defined in Article I, whether or not consecutive,
without regard to the exceptions of Code Section 411(a)(4) prior to the
expiration of the election period.
For Plan Years commencing after May 31, 1994, a Member who is zero
percent (0%) vested upon termination of employment is deemed to have received a
distribution of his full entitlement under the
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Plan within one hundred twenty (120) days after the Member incurs a one-year
Break-in-Service.
7.6 Disposition of Unvested Amounts. After termination of employment,
the unvested amount in the Member's Account shall be maintained until forfeited
as provided in the next two sentences. The unvested portion of the Account
balance attributable to Employer Contributions shall be forfeited upon the
earlier of (a) the last day of the Plan Year in which the Member incurs five (5)
consecutive one-year Breaks-in-Service, or (b) the last day of the Plan Year in
which a Member who has terminated employment receives a distribution of his
vested Account balance. Notwithstanding the preceding sentence a Member who
terminates employment with a zero vested Account balance shall be deemed to have
received a zero distribution of such Account balance on the last day of the Plan
Year in which termination of employment occurred and on such last day the
Forfeiture of such Account balance will occur. As of the last day of the Plan
Year in which the Forfeiture occurs, the Forfeiture shall be applied as provided
in Article IV, Section 4.3 above.
7.7 Hardship Distribution. In the event that a Member or his
Beneficiary is entitled to the payment of benefits as a result of death,
retirement or Total Permanent Disability and such Member or Beneficiary
demonstrates an immediate urgent need for such benefits, the Administrative
Committee may authorize the commencement of benefit payments prior to the time
set forth in Sections 7.2, 7.3 or 7.4. However, any accelerated distribution
made pursuant to this Section 7.7 shall be based upon the Member's
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Account balance as of the end of the Plan Year preceding the date of such
distribution, in accordance with Article IV, Sections 4.5 and 4.6. The
Administrative Committee shall exercise the authority granted hereunder in a
uniform, nondiscriminatory manner.
7.8 Circumstances Rendering Vesting Schedule Inapplicable.
Notwithstanding any other provisions of this instrument to the contrary, if:
(a) the Plan is terminated pursuant to Article XVI, Section 16.3
hereof; or
(b) the Plan is terminated with respect to a group of Members
resulting in a partial termination of the Plan; or
(c) there occurs a complete discontinuance of Employer
Contributions under the Plan,
the vesting schedule contained in Section 7.1 of this Article shall be
inapplicable and each Member affected by such termination, partial termination
or complete discontinuance of Employer Contributions shall thereupon have a full
one hundred percent (100%) vested interest in the amount standing to his credit
in his Accounts at such time and in any amounts thereafter credited or allocated
to his Accounts; provided, however, that if the Signatory Company shall
thereafter resume making Employer Contributions hereunder, all amounts credited
or allocated to a Member's Accounts with respect to the Plan Year for which such
Employer Contributions are resumed and the Plan Years for which they are
continued, shall vest only in accordance with the vesting schedule contained in
Section 7.1 of this Article. For purposes of this Section 7.8, a complete
discontinuance of Employer Contributions under the Plan is contrasted with a
suspension of Employer Contributions under the
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Plan which is merely a temporary cessation of Employer Contributions by the
Signatory Company. During any such period of termination, partial termination or
complete discontinuance of Employer Contributions under the Plan, all other
provisions of this Plan shall nevertheless continue in full force and effect
other than provisions for Employer Contributions and allocations thereof to
Members' Accounts. The Signatory Company shall notify the District Director of
the Internal Revenue Service in the event it has completely discontinued making
Employer Contributions to the Plan or in the event of termination or partial
termination of the Plan.
ARTICLE VIII.
Claims for Plan Benefits
8.1 Application for Benefits. Each Member or designated Beneficiary
claiming benefits under this Plan must make written application therefor within
fifteen (15) days preceding or following (whichever is applicable) the actual
retirement, termination of employment (or incurrence of a one-year
Break-in-Service), death prior to retirement, determination of Total Permanent
Disability, or the happening of any other occurrence believed by the claimant to
entitle him to benefits hereunder. The date the claim shall be considered as
filed shall be the date a properly completed application is received by the
Administrative Committee. Each such application (a) shall be in writing on a
form to be provided by the Administrative Committee, (b) shall be signed by the
claimant or his personal representative, (c) shall be made to the Administrative
Committee, and (d) shall be filed in such a
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manner and with such persons as the Administrative Committee may specify. The
Administrative Committee may require that there be furnished to it in connection
with such application all relevant information. Failure to timely file such
application or to supply all relevant information shall not result in the
forfeiting of any rights claimed but shall excuse postponement of the orderly
processing of such claim and the time of commencing payment thereof.
8.2 Processing of Claim. Upon receipt by the Administrative Committee
of a properly completed application for benefits form, it shall be the duty and
responsibility of the Administrative Committee to verify the facts and claims
made therein with the appropriate Signatory Company and to determine whether the
claim is valid. In arriving at a decision, the Administrative Committee may
require additional relevant information from the claimant. In any event, within
one hundred twenty (120) days of receipt of the application, or as soon
thereafter as administratively practicable, the Administrative Committee shall
determine whether, when and in what amount distributions are to be paid from the
Plan to the claimant. If the Administrative Committee fails to act on the claim
within said one hundred twenty (120) day (or later) period, the claimant may
proceed to the review stage described in Section 8.4 hereof as if the claim had
been denied.
8.3 Notification to Claimant of Decision. If distributions are to be
made, the Administrative Committee shall immediately notify the claimant and the
Trustee of the amount and method of payment. It shall then be the responsibility
of the Trustee to
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arrange the distribution. If the claim is denied, in whole or in part, the
Administrative Committee shall send written notice of the denial to the
claimant. A notice that a claim has been denied shall set forth, in a manner
calculated to be understood by the claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to the pertinent Plan provisions on which
the denial was based;
(c) A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why such material is necessary; and
(d) An explanation of the Plan's claim review procedure.
8.4 Review Procedure. A claimant shall be entitled to a full and fair
review of a denial of claim for benefits. To avail himself of this right, the
claimant, or his duly authorized representative, must timely file an application
for review with the Administrative Committee. Such application must be in
writing and must be filed within ninety (90) days of receipt of the notice of
denial of benefits. If the claimant desires a personal appearance or hearing
before the Administrative Committee to present his case, he shall so state in
his application for review. An appeal shall be considered as filed on the date
it is received by the Administrative Committee. Subsequent to the filing of an
appeal and prior to the rendering of a decision thereon, the claimant, or his
duly authorized representative, may review pertinent documents and may submit
issues and comments in writing. If a hearing is held, the claimant may be
represented thereat by legal counsel or other duly authorized representative.
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8.5 Decision on Review. The Administrative Committee shall render a
decision promptly, within one hundred twenty (120) days after its receipt of a
request for review unless special circumstances, such as the need to hold a
hearing, require an extension of time for processing, in which case a decision
shall be rendered as soon as possible thereafter. The decision for review shall
be in writing and shall include the specific reasons for the decision, written
in a manner calculated to be understood by the claimant, with specific reference
to the pertinent Plan provisions on which the decision is based. The review
decision by the Administrative Committee shall be considered final.
8.6 Disputed Benefits. If any dispute shall arise between a Member,
or other person claiming under a Member, and the Administrative Committee after
the review of the claim for benefits, or if any dispute shall develop as to the
person to whom the payment of any benefit under the Plan shall be made, the
Trustee may withhold payment of all or any part of the benefits payable
hereunder to the Member, or other person claiming under the Member, until such
dispute has been resolved by a court of competent jurisdiction or settled by the
parties involved.
ARTICLE IX.
Distributions from Trust Funds
9.1 Occasions for Distributions. Distributions from the Trust shall
be made to Members or Beneficiaries only upon the death, retirement, Total
Permanent Disability or termination of employment of the Member as provided in
Article VII, Sections 7.2, 7.3, 7.4 and 7.5 hereof, respectively, or upon
termination of the
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Plan and Trust as provided in Article XVI hereof, and then only to the extent of
the Member's vested interest in his Account and subject to the conditions and
specifications hereinafter following.
Notwithstanding any other provision of this Plan, unless the Member
otherwise elects, the distribution to the Member shall commence no later than
one year after the end of the Plan Year --
(a) in which the Member terminates employment for any of
the events described in Section 7.2, 7.3 or 7.4 in Article VII of this
Plan,
(b) which is the fifth Plan Year following the Plan Year
in which the Member terminates employment for any other reason,
except in cases where the Member becomes reemployed by a Signatory Company
during this period.
9.2 Consent to Distribution; Special Rules Upon Reemployment.
(a) In those instances where a Member terminates his
employment with the Signatory Company for any reason other than death
or retirement and, as a result thereof, would otherwise be entitled to
a distribution of his vested interest in his Account, no such
distribution shall, under any circumstances, be authorized by the
Administrative Committee nor effected by the Trustee prior to the death
or retirement of such Member unless (i) the gross amount to be
distributed is $3,500 or less, or (ii) the gross amount is in excess of
$3,500 and the Member consents to the distribution and executes a
distribution form supplied by the Administrative Committee signifying
such consent. A certified copy of such distribution form shall be
transmitted to the Trustee for its records along with written
directions as to the amount, time and manner of distribution.
(b) In the event that a Member does not consent to a
distribution as required under this Section 9.2, a separate ledger
account shall be created for such Member. His Account shall be
transferred to the separate ledger account. Such separate ledger
account shall share in income and valuation adjustments pursuant to
Article IV, Sections 4.5 and 4.6 until the vested Account Balance is
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distributed in full upon the Member's subsequent death, attainment of
Normal Retirement Age or Total Permanent Disability.
(c) If an Employee returns to the employment of a
Signatory Company after incurring a Forfeiture under Article VII,
Section 7.6 and again becomes a Member under the Plan, a new Account
shall be established for him as if he were a new Member. The new
Account shall be maintained independently of the separate ledger
account. Such account shall share in Employer Contributions,
Forfeitures, income and valuation adjustments pursuant to Article IV
and shall vest as determined under Article VII, Section 7.1. Upon
subsequent termination of employment, the vested portion of the Account
shall be distributed upon the Member's entitlement to a distribution
under Article VII hereof or, if the Member again does not give the
necessary consent to a distribution, such vested amount shall be added
to the separate ledger account.
(d) If any reemployed Employee is reemployed before
incurring five (5) consecutive years of Break-in-Service, and such
Employee had received prior to his reemployment an entire distribution
of the vested portion of his Account which was less than fully vested,
the forfeited portion of his Account shall be reinstated only if he
repays the full amount distributed to him before the end of the earlier
of the following periods: (i) five (5) consecutive Years of
Break-in-Service, or (ii) the period ending on the fifth (5th)
anniversary of the Member's reemployment. If such Employee repays such
full amount distributed to him, the undistributed portion of his
Account must be restored in full, unadjusted by any gains or losses
occurring subsequent to the valuation date preceding his termination.
Such restoration shall be paid from Employer Contributions, Forfeitures
and income or gain to the Plan for the Plan Year of such restoration,
as determined by the Administrative Committee. A reemployed Member who
previously had a zero vested Account balance and thus received a deemed
zero distribution under Article VII, Section 7.6 above, shall be deemed
to have repaid his prior deemed zero distribution on the day of his
reemployment. This provision shall be interpreted in a manner
consistent with the transitional rules of Section 303(a)(2) of the
Retirement Equity Act as to service prior to Plan Years beginning
before January 1, 1985.
9.3 Manner of Distributions. The Administrative Committee shall
direct the Trustee, in writing, when to distribute the
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amounts referred to in Article VII, Sections 7.2, 7.3, 7.4 and 7.5, in
accordance with the election of the Member:
(a) Distribution of such Member's benefit in a single
payment; or
(b) Distributions in the manner provided in either
subdivision (i) or (ii) below; provided, that the monies in the
terminated Member's Account will be credited with their portion of the
gains or losses of the Trust pursuant to Article IV, Sections 4.4 and
4.5.
(i) Distribution of a portion of his Plan benefit
in a single distribution with the remainder distributed in
substantially equal annual, quarterly or monthly installments
plus income allocations and valuation adjustments pursuant to
Article IV, Sections 4.4 and 4.5, over a period equal to 5
years (or in the case of a Member with a Plan benefit in
excess of $500,000, 5 years plus one additional year (but not
to exceed 5 additional years) for each $100,000 or fraction
thereof by which the Member's Plan benefits exceed $500,000).
However, the Member may consent to a longer period in which
case the period will be any time period which does not exceed
the Member's life expectancy (or life expectancies of such
Member and his designated Beneficiary); provided that the
present value of the benefits to be distributed to the Member
shall exceed fifty percent (50%) of the present value of the
total benefit to be distributed to the Member and his
designated Beneficiary, or
(ii) Distribution of his entire Plan benefit in
substantially equal annual, quarterly or monthly installments
plus income allocations and valuation adjustments pursuant to
Article IV, Sections 4.4 and 4.5, over a period equal to 5
years (or in the case of a Member with a Plan benefit in
excess of $500,000, 5 years plus one additional year (but not
to exceed 5 additional years) for each $100,000 or fraction
thereof by which the Member's Plan benefits exceed $500,000).
However, the Member may consent to a longer period which does
not exceed the Member's life expectancy (or the life
expectancies of such Member and his designated Beneficiary);
provided that the present value of the benefits to be
distributed to the Member shall
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exceed fifty percent (50%) of the present value of the total
benefit to be distributed to the Member and his designated
Beneficiary.
Except as provided in Article VII, Section 7.5 amounts shall not be distributed
until the terminated Member incurs five consecutive years of Breaks-in-Service.
In the event of the Member's death, the benefit shall be paid according to the
method either set forth on the beneficiary designation on file with the
Administrative Committee or elected by the Beneficiary or Beneficiaries.
9.4 Time of Distributions. Distributions required by Section 9.3
hereof shall commence as soon as administratively feasible. Unless the Member
executes an election form consented to by the Administrative Committee which
states how and when benefits are to commence, payment of benefits to the Member
shall in no event begin later than the sixtieth (60th) day after the latest of
the close of the Plan Year in which:
(a) the Member attains age 65,
(b) the Member has his tenth (10th) anniversary of the
year in which he commenced participation in the Plan, and
(c) the Member's employment with a Signatory Company
terminates.
9.5 Mandatory Distributions. Notwithstanding any other provision
in the Plan to the contrary, benefits shall be distributed to the Member or his
Beneficiary no later than set forth in this Section.
(a) Mandatory Age Distribution. A Member's benefits shall
be distributed to him no later than the April 1st of the calendar year
following the calendar year in which the Member attains age 70 1/2. In
the alternative, distributions to a Member may commence in such
calendar year as set forth above, but the balance of his benefits must
be distributed over the life of such
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Member (or lives of such Member and his designated Beneficiary) or over
a time period not exceeding the Member's life expectancy (or the life
expectancies of the Member and his designated Beneficiary).
(b) Mandatory Death Distribution. If the distribution of
the member's benefits had commenced pursuant to Section 9.5(a) and the
Member dies before his entire benefit is distributed to him, the
remaining portion of his benefit will be distributed at least as
rapidly as under the method of distribution being used pursuant to
Section 9.5(a) as of the date of such Member's death. If a Member dies
prior to the commencement of his benefit distribution pursuant to
Section 9.5(a), the entire benefit of such Member will be distributed
within five (5) years after the death of such Member. However, such
five (5) year rule shall be disregarded for any portion of the Member's
benefit which is payable to (or for the benefit of) a designated
Beneficiary, such portion to be distributed (in accordance with
regulations issued by the Secretary) over the life of such designated
Beneficiary (or over a period not exceeding beyond the life expectancy
of such Beneficiary), and such distributions commence not later than
one (1) year after the date of the Member's death or such later date as
the Secretary may prescribe by regulations. In such a situation, the
benefit portion distributed to such Beneficiary shall be treated as
distributed on the date on which such distribution begins.
In the event that the designated Beneficiary is the deceased
Member's surviving spouse, the date on which the benefit distribution
is required to commence shall be no earlier than the date on which the
Member would have attained age 70 1/2. If the surviving spouse dies
before the distributions to such spouse commence, this subsection shall
be applied as if the surviving spouse were the Member. For purposes of
this subsection, any amount paid to a child shall be treated as if it
had been paid to the surviving spouse if such amount shall become
payable to the surviving spouse upon such child reaching majority (or
other designated event permitted under Treasury regulations).
(c) Recalculation of Life Expectancies. For purposes of
this Section, the life expectancy of a Member and a Member's spouse
may, in the discretion of the Administrative Committee, be redetermined
but no more frequently than annually and in accordance with such rules
as may be prescribed by Treasury regulations.
(d) Prior Irrevocable Election. If the Member made an
irrevocable election prior to December 31, 1983 to defer the
distribution of benefits beyond the dates set
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forth in Section 9.5(a) and (b), such election shall govern the
distribution so long as said election was pursuant to the terms of the
Plan at the time of the election.
To the extent the Administrative Committee has previously adopted a policy of
not distributing benefits (as required under this Section) in accordance with
any of the provisions of Prop. Reg. Section 1.401(a)(9)1 A4(c), then such
distributions under this document shall be administered in a manner consistent
with such previously-established policy.
9.6 Distribution to Minors or Persons under Disability. Should any
distribution hereunder become payable to a minor or to a person who, in the
opinion of the Administrative Committee, is incapable of taking care of his
affairs, the Administrative Committee may direct the Trustee to make such
distribution in any one or combination of the following ways: (1) directly to
such minor or person; (2) to the legal guardian of the person or estate of such
minor or person; or (3) to a person or financial institution serving as
Custodian for such Beneficiary under the Uniform Gifts to Minors Act of any
state. Any distribution so made shall constitute full and complete discharge of
any liability under the Plan with respect to the amount so distributed.
9.7 Interest of Spouse of Member in the Event of Divorce. In the
event of a divorce between a Member and his spouse and in the event that the
Divorce Decree entered by the Court having jurisdiction in the matter gives such
divorced spouse a portion of the Member's vested interest in his Account, the
Trustee shall, pursuant to the direction of the Administrative Committee,
segregate such amount in a separate account for the benefit of such
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spouse. Such account shall thereafter be held and administered as a part of the
Trust Fund (but such account shall only share in income allocations and
valuation adjustments of the Trust Fund). In the event the spouse is also
awarded a portion of the future Employer Contributions which normally would be
allocated to the Member's Account, the Administrative Committee, after it
receives a certified copy of such Divorce Decree, shall instruct the Trustee to
allocate such portion to the spouse's account. Within the period of time
specified therein after the entry of the final Qualified Domestic Relations
Order which complies with Section 414(p) of the Code (even if earlier than the
"earliest retirement age" as defined in Section 414(p)(4)(B) of the Code) or, if
no period of time is specified therein, at the time the Member or his
Beneficiary becomes entitled to a distribution hereunder, the amounts held by
the Trustee for the spouse shall be distributed to such spouse in a lump sum
unless elected otherwise by such spouse. If such spouse should die prior to the
time of distribution to such spouse hereunder, the amounts then held by the
Trustee shall be paid over to the estate of such spouse within six (6) months
after notification to the Trustee of the death of such spouse. All rights and
benefits, including elections, provided to a Member in this Plan shall be
subject to the rights afforded to any "alternate payee" under a "qualified
domestic relations order" as those terms are defined in Section 414(p) of the
Code.
9.8 Form of Distributions. Distributions from Accounts under this
Plan will be made entirely in whole shares of Employer Stock.
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The balance resulting from the value of any fractional shares will be
distributed in cash.
However, the Administrative Committee may distribute all of the
benefits in cash, unless the Member exercises his right to make a written demand
for Employer Stock on the form and in the manner prescribed by the
Administrative Committee for this purpose. In the event that a distribution of
cash is made, the Administrative Committee shall arrange for the sale of
Employer Stock in the account at a reasonable time prior to the date of
distribution and the net cash proceeds of the sale shall be the amount
distributed to the Member in lieu of such Employer Stock.
9.9 Restrictions on Distributed Stock of Signatory Companies and
Their Affiliated Companies Which is not Publicly Traded. Employer Stock
distributed to the Member from the Plan, to the extent such stock is not then
publicly traded, shall be restricted as to sale or transfer according to the
provisions of this Section 9.9, such other restrictions as provided in the
ByLaws or Articles of Incorporation of the Signatory Company or Affiliated
Company issuing the stock (hereinafter sometimes called "Issuing Corporation"),
and as required by applicable Federal or State Securities Laws.
(a) Right of First Refusal. In the event a shareholder receives an
offer (hereinafter referred to as the "Proposed Offer") for the purchase of all
or a portion of his shares of Employer Stock received from the Trust
(hereinafter referred to as "Offered Shares"), or any rights or interest therein
which the shareholder would like to accept, such shareholder (hereinafter
referred to as
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"Offering Shareholder") shall obtain from his offeror the Proposed Offer (which
by its terms must be open for a period of not less than thirty (30) days) in
writing, and shall transmit it along with a notice of his intention to accept
the Proposed Offer to the Trustee, said notice being made in the manner set
forth in subsection (c) below. Concurrent with the notice to the Trustee, the
Offering Shareholder shall also give notice to the Issuing Corporation in the
manner and at the address set forth in subsection (c) below.
(i) Upon receipt of the notice with respect to the Proposed
Offer, the Trustee shall have the exclusive right and option,
exercisable at any time during a period of fourteen (14) days from the
date of said notice, to elect to purchase any or all of the Offered
Shares at a price no less than the price in the Proposed Offer (unless
the price offered by the bona fide third party offeree is less than the
fair market value of the Offered Shares, in which case the price at
which the Trustee may acquire the stock shall be its fair market value)
and on the same terms and conditions as set out in such notice of
Proposed Offer. During such fourteen (14) day period, the Trustee shall
give written notification to the Offering Shareholder and the Issuing
Corporation specifying the number of shares which it shall purchase
from the Offering Shareholder.
(ii) In the event that the Trustee elects to purchase fewer
than all of the shares offered to it, the Issuing Corporation shall be
entitled during the remainder of such fourteen (14) day period to elect
to purchase the Offered Shares not purchased by the Trustee at a price
no less than the price in the Proposed Offer (unless the price offered
by the bona fide third party offeree is less than the fair market value
of the Offered Shares, in which case the price at which the Issuing
Corporation may acquire the stock shall be its fair market value) and
on the same terms and conditions as set out in such notice of Proposed
Offer. During such remainder of the fourteen (14) day period, the
Issuing Corporation shall give written notification to the Offering
Shareholder and the Trustee specifying the number of shares which it
shall purchase from the Offering Shareholder.
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At the time when all options are either exercised or have lapsed, the Offering
Shareholder shall have the right to transfer the Offered Shares not to be
purchased by either the Trustee or the Issuing Corporation to the prospective
purchaser at a price equal to or in excess of that price specified in the
Proposed Offer for a period of sixty (60) days following the date when all
options are either exercised or have lapsed, free and clear of any restrictions
against transfer that might otherwise have been created hereby. If a sale to the
prospective purchaser is not made within the sixty (60) day period herein, the
restrictions contained herein shall continue in effect. The right of the Issuing
Corporation to exercise its option to purchase shall be subject to the laws of
the State of Texas governing the rights of the Corporation to purchase its own
shares, and provided further, that the right of the Issuing Corporation or any
other person to purchase shares shall be subject to compliance with applicable
Federal and State Securities laws.
(b) Closing. Sales and purchases involving the Trustee or the
Issuing Corporation shall be consummated within thirty (30) days of the
expiration of the option period provided in subparagraphs (i) and (ii) of
subsection (a) hereof, at the time and place specified by the Issuing
Corporation by notice to all concerned parties.
(c) Notices. All notices required to be given hereunder shall be
deemed to be duly given by personally delivering such notice or by mailing it
via registered mail as follows:
(i) If to the Trustee, addressed to the Trustee at the
address provided by the Corporation creating this Plan and Trust; and
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(ii) If to the Issuing Corporation, addressed to the
Secretary at the Issuing Corporation's principal address.
(d) Restriction Legend. All certificates representing shares of
Employer Stock distributed as benefits from the Trust which are issued while
this Section 9.9 is in effect shall have endorsed upon them the following
legend:
The shares represented by this certificate are subject to
restrictions against transfer under the terms of Article IX, Section
9.9 of the Fifth Amendment and Restatement of the Team, Inc. Employee
Stock Ownership Plan and Trust to which the Corporation issuing these
shares is a signatory, which Fifth Amendment and Restatement requires,
among other things, that the holder hereof offer to sell his shares to
the Trustee and the Issuing Corporation prior to making any transfer of
his shares. The Corporation will furnish, without charge, to the holder
of this certificate, upon written request to it at its principal place
of business or registered office, a copy of Article IX, Section 9.9 of
the Fifth Amendment and Restatement.
The Trustee shall be responsible for seeing that all certificates issued as a
result of a distribution of benefits from the Trust contain the foregoing
legend.
9.10 Put Option.
(a) Grant of Option. Any Employer Stock either purchased by the
Trust or contributed by the Signatory Company shall be subject to a put option
if it is not publicly traded when distributed or if it is subject to a trading
limitation when distributed. For purposes of this Section 9.10, a trading
limitation shall be deemed to be any restriction under any federal or state
securities law, any regulation thereunder, or any agreement affecting the
Employer Stock which would make such Employer Stock not as freely tradable as
would be the case were it not subject to such restrictions. Under such option,
the holder of such Employer Stock shall be
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entitled to require that the Signatory Company purchase such Employer Stock
under the terms and conditions set forth herein. The holder of the Employer
Stock shall include not only a Member or former Member in that Plan, but also a
donee of such Member or former Member or a person to whom the Employer Stock
passes by reason of death of such Member or former Member.
(b) Duration of Option. The option described in this Section 9.10
shall be exercisable at any time during the sixty (60) day period beginning on
the date the Employer Stock subject to the option is distributed from the Plan.
If the Holder does not exercise this option, the option shall be exercisable for
an additional sixty (60) day period beginning on the first day of the Plan Year
immediately following the Plan Year in which the first sixty (60) day period
expired. In the event that the Employer Stock is publicly traded without
restrictions when distributed but ceases to be so traded before the expiration
of both option periods, the Signatory Company shall notify each holder of such
Employer Stock, in writing, that the Employer Stock has ceased to be so traded
and that the Employer Stock shall be subject to the option described herein for
a period of sixty (60) days from the date of such notice. The notice shall also
inform the holders of such Employer Stock of the terms of the option described
herein.
(c) Exercise. The put option described herein shall be exercised by
the holder of the Employer Stock by notifying the Signatory Company, in writing,
that the option is being exercised.
(d) Price. The price which the Signatory Company shall pay for the
Employer Stock upon exercise of the option described herein
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shall be the fair market value of the Employer Stock on the date the option is
exercised. The fair market value shall be determined in good faith and based
upon all relevant factors, including the latest annual valuation.
(e) Payment Terms. Within thirty (30) days following the exercise of
an option as described herein, the Signatory Company, in its discretion, shall
pay to the holder of the Employer Stock either (i) the total purchase price, or
(ii) an amount equal to one-sixth of the purchase price and shall execute a note
in the principal amount equal to the balance of the purchase price, payable to
the Holder of the Employer Stock. Such note shall bear a reasonable rate of
interest and shall be secured by adequate security. The term of such note shall
be for a period determined by the Signatory Company, but in no event for a term
in excess of five (5) years after the date the option is exercised. The
principal of such note shall be payable in accordance with its terms, but in no
event shall such principal amount be payable in more than five (5) equal annual
installments. The Signatory Company's discretion in determining the method of
payment shall be applied in a uniform, consistent and nondiscriminatory manner.
Notwithstanding the preceding provisions of this Section 9.10(e), payment shall
be in the form of the total purchase under clause (i) above and not deferred as
in clause (ii) above, if distribution is made in annual installments under
Article IX, Section 9.3(b)(i) and if such distribution is attributable to
Employer Stock acquired by the Plan after December 31, 1986.
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(f) Option Nonterminable. The option described herein shall apply to
all Employer Stock purchased by the Plan. Such put option shall be nonterminable
irrespective of whether the Plan continues to be a non-leveraged employee stock
ownership plan (i.e., other than one within the meaning of Section 4975(e)(7) of
the Code) which is a stock bonus plan. Notwithstanding any provision in this
Plan to the contrary, the Plan may not be amended in any fashion which would
have the effect of terminating such option, as long as required pursuant to
Section 401(a)(23) of the Code.
9.11 Direct Rollover of Distribution. This Section 9.11 applies to
all distributions made on or after January 1, 1993. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a distributee's
election under this Section 9.11, a distributee may elect at the time and in the
manner prescribed by the Administrative Committee, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
a) Eligible rollover distribution: For purposes of this Section
9.11, an eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does
not include: 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 401(a)(9)
of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
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b) Eligible retirement plan: For purposes of this Section 9.11, an
eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
c) Distributee: For purposes of this Section 9.11, a distributee
includes an employee or former employee. In addition, the
employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
d) Direct rollover: For purposes of this Section 9.11, a direct
rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than thirty (30) days
after the notice required under Treasury Regulation Section 1.411(a)11(c) is
given, provided that:
(1) the Administrative Committee clearly informs the
Member that the Member has a right to a period of at least
thirty (30) days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(2) the Member, after receiving the notice,
affirmatively elects a distribution.
9.12 Missing Participant. If at the time a distribution is due to be
made to a Member or Beneficiary under this Plan such Member or Beneficiary is
missing, unavailable, or whose whereabouts
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are otherwise unknown, after reasonable inquiries are made to locate such Member
or Beneficiary by the Administrative Committee including mailing a notice of
such distribution to the last known address, the total amount of such benefit
may be forfeited in or after the Plan Year (and such forfeiture will be applied
to defray administration costs of the Plan) in accordance with the provisions of
Reg. Section 1.411(a)4(b)(6) pursuant to which such benefit will be reinstated
if a claim is later made by such Member or Beneficiary therefor. Notwithstanding
the preceding sentence, in the event of the complete termination of the Plan,
amounts of Accounts and benefits under this Plan due to be distributed to
missing Members or Beneficiaries shall be preserved and protected outside the
Plan by purchase of annuity or other acceptable method including the
establishment of a individual retirement account or other bank or financial
institution interest bearing or fixed income account in the name of or for the
benefit of such missing Member or Beneficiary.
ARTICLE X.
Top Heavy Provisions
10.1 Determination of Top Heavy Plan Status. The Plan shall be
considered a Top Heavy Plan for any Plan Year commencing after December 31,
1983, in which, as of the Determination Date, the sum of the Aggregate Accounts
of Key Employees under this Plan and any plan of an Aggregation Group exceeds
sixty percent (60%) of the Aggregate Accounts of all Members under this Plan and
any plan of an Aggregation Group. If a Member, who was a Key Employee for any
prior Plan Year, is a Non-Key Employee for any Plan Year, such
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Member's Aggregate Account balance shall not be taken into account for purposes
of determining whether the Plan is a Top Heavy Plan (or whether any Aggregation
Group which includes the Plan is a Top Heavy Group). In addition, the Account
balance of any Member who has not within the past five (5) years performed any
services for the Signatory Company shall not be taken into account for purposes
of determining whether the Plan is a Top Heavy Plan (or whether any Aggregation
Group which includes the Plan is a Top Heavy Group).
10.2 Determination of Super Top Heavy Plan Status. The Plan shall be
considered a Super Top Heavy Plan for any Plan Year commencing after December
31, 1983, in which, as of the Determination Date, the sum of the Aggregate
Accounts of Key Employees under this Plan and any plan of an Aggregation Group
exceeds ninety percent (90%) of the Aggregate Accounts of all Members under this
Plan and any plan of an Aggregation Group. For purposes of determining if the
Plan is a Super Top Heavy Plan, a Member's inclusion in the Key Employee
grouping shall be determined in the manner set forth in Section 10.1.
10.3 Aggregate Accounts. A Member's Aggregate Account as of the
Determination Date shall be the sum of:
(a) his Account balance as of the most recent valuation
date occurring within a twelve (12) month period ending on the
Determination Date;
(b) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the valuation date but before the
Determination Date, except for the first Plan Year when such adjustment
shall also reflect the amount of any contributions made after the
Determination Date that are allocated as of a date in that first Plan
Year;
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(c) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding Plan
Years. However, in the case of distributions made after the valuation
date and prior to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the extent that
such distributions are already included in the Member's Aggregate
Account balance as of the valuation date. Notwithstanding anything
herein to the contrary, all distributions, including distributions made
prior to January 1, 1984, will be counted, and distributions under a
terminated plan which if it had not been terminated would have been
required to be included in an Aggregation Group will be counted; and
(d) any Employee contributions whether voluntary or
mandatory. However, amounts attributable to tax deductible qualified
Employee contributions shall not be considered to be a part of the
Member's Aggregate Account balance.
10.4 Aggregation Group. An Aggregation Group for purposes of this
Article is either a Required Aggregation Group or a Permissive Aggregation Group
as hereinafter determined. In determining Aggregation Groups, "Employer" means
an employer as defined in Section 416 of the Code and the regulations issued
thereunder.
(a) Required Aggregation Group. In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key
Employee is a participant, and each other plan of the Employer which
enables any plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation Group
is a Top Heavy Group. No plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required Aggregation Group is not a
Top Heavy Group.
(b) Permissive Aggregation Group. The Employer may also
include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Sections 401(a)(4) and
410. Such group shall be known as a Permissive Aggregation Group. In
the case of a Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top Heavy Plan if
the Permissive
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Aggregation Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(c) Aggregation of Multiple Plans. When more than one
plan is aggregated, the Aggregate Accounts (including distributions for
Key Employees and all Employees) are determined separately for each
plan as of each plan's Determination Date. The plans are then
aggregated by adding the results of each plan as of the Determination
Dates for such plans that fall within the same calendar year.
10.5 Top Heavy Plan Requirements. For any Plan Year in which the
Plan is considered to be a Top Heavy Plan, the Plan shall:
(a) require minimum allocations to Non-Key Employees
pursuant to Section 10.6; and
(b) use the following vesting schedule in determining the
"vested interest" of an Employee pursuant to Article VII, Section 7.1
for any Employee whose Account will vest faster in such Plan Year under
the following schedule:
Percentage of
Participating Employee's
Years of Service Account that Becomes Vested
---------------- ---------------------------
Less than two years. . . . . . . . . . . 0%
Two years, but
less than three years. . . . . . . . . . 20%
Three years, but
less than four years . . . . . . . . . . 40%
Four years, but
less than five years . . . . . . . . . . 60%
Five years, but
less than six years. . . . . . . . . . . 80%
Six years or more. . . . . . . . . . . . 100%
10.6 Allocations to Non-Key Employees. For any Plan Year in which
the plan is determined to be a Top Heavy Plan, the following allocation
provisions shall be operational and supplement Article IV, Section 4.3.
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(a) Minimum Allocations Required for Top Heavy Plan Years.
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of
the total of the Employer Contributions and reallocated Forfeitures
allocated to the Member's Account of each Non-Key Employee shall be
equal to at least three percent (3%) of such Non-Key Employee's
Considered Compensation. However, should the sum of the total of the
Employer Contributions and reallocated Forfeitures allocated to the
Member's Account of each Key Employee for such Top Heavy Plan Year be
less than three percent (3%) of each Key Employee's Considered
Compensation, the sum of the total of the Employer Contributions and
reallocated Forfeitures allocated to the Member's Account of each
Non-Key Employee shall be equal to the largest percentage allocated to
the Member's Account of each Key Employee. For allocation purposes
where contributions to Key Employees are less than three percent (3%)
of Considered Compensation, amounts contributed by Key Employees to a
salary deferral plan must be included as part of such Key Employee's
Considered Compensation for purposes of determining contributions made
on behalf of Key Employees.
(b) Extra Minimum Allocation Permitted for Top Heavy Plans
other than Super Top Heavy Plans. If a Key Employee is a Member in both
a defined contribution plan and a defined benefit pension plan that are
both part of a Top Heavy Group (but neither of such plans is a Super
Top Heavy Plan), the defined contribution and the defined benefit
fractions set forth in Article V, Section 5.2 shall remain unchanged,
provided the Member's Account of each Non-Key Employee who is a Member
receives an extra allocation (in addition to the minimum allocation set
forth above) equal to not less than one percent (1%) of such Non-Key
Employee's Considered Compensation.
(c) Computation of the Minimum Contribution. For purposes
of the minimum allocations set forth above, the percentage allocated to
the Member's Account of any Key Employee shall be equal to the ratio of
the sum of the total of the Employer Contribution and reallocated
Forfeitures allocated on behalf of such Key Employee divided by the
Considered Compensation for such Key Employee.
(d) Eligibility for the Minimum Contribution. For any Plan
Year in which the Plan is a Top Heavy Plan, the minimum allocations set
forth above shall be allocated to the Members' Accounts of all Non-Key
Employees who are Members and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who are Members
but have failed to complete a Year of Service regardless of
compensation.
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(e) Alternative Methods of Complying with the Minimum
Benefit Requirement. Notwithstanding anything herein to the contrary,
in any Plan Year in which a Non- Key Employee is a Member in both this
Plan and a defined benefit pension plan, and both such plans are Top
Heavy Plans, the Employer shall not be required to provide a Non-Key
Employee with both the full separate minimum defined benefit plan
benefit and the full separate defined contribution plan allocations.
Therefore, for Non-Key Employees who are participating in a defined
benefit plan maintained by the Employer and the minimum benefits under
Section 416(c)(2) of the Code are accruing to a Non-Key Employee under
such Plan, the minimum allocations provided for above shall not be
applicable, and no minimum contribution shall be made to the Plan on
behalf of the Non-Key Employee. Alternatively, the Employer may satisfy
the minimum benefit requirement of Section 416(c)(1)(E) of the Code for
the Non-Key Employee by providing any combination of benefits and/or
contributions that satisfies the safe harbor rules contained in
Treasury Regulation Section 1.4161(M-12).
(f) Accounting. The Administrative Committee may establish
a second Account for each Member to which allocations are credited for
Plan Years in which the Plan is a Top Heavy Plan or a Super Top Heavy
Plan. Such separate Accounts shall be credited with income allocations
and earning adjustments pursuant to Article IV, Section 4.4 and 4.5.
ARTICLE XI.
Other Qualified Plans
11.1 Transfers from Other Qualified Plans. With the consent of the
Administrative Committee, assets compatible with the investment objectives of
this Plan may be transferred to this Plan and Trust from any other qualified
plan meeting the requirements of Section 401(a) of the Code which is maintained
by a Signatory Company or by a predecessor employer of the Member for the
benefit of the Member if he is one hundred percent (100%) vested in such assets,
or from an Individual Retirement Account ("IRA") to the extent that the assets
from such IRA had been previously rolled over from another qualified plan and
that such rollover into the
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Plan is permitted under the Code. However, in the event the Member rolls over
assets from his IRA to the Plan, he shall first certify to the Administrative
Committee the amount he rolled over into the IRA and both the name and
classification of the previous qualified plan. In no instance may assets be
transferred directly or indirectly from any other qualified plan meeting the
requirements of Section 401(a) of the Code which is not exempt from the joint
and survivor annuity requirements of Section 401(a)(11) of the Code; provided,
however, that if by mistake or otherwise any such benefits are transferred to
the Plan on behalf of a Member from (a) a defined benefit plan, (b) a defined
contribution plan subject to Section 412 of the Code, or (c) a defined
contribution plan which is subject to Sections 401(a)(11) and 417 of the Code
with respect to that Member, such benefits shall be subject to the requirements
of Prop. Reg. Section 1.401(a)11T Q & A 7 and 8, including the separate
accounting requirement for such benefits. The assets so transferred shall be
accompanied by written instructions from the Administrative Committee to the
Trustee identifying the other plan, the Member's IRA (if applicable), this Plan,
the name of the Member, his one hundred percent (100%) vested interest therein,
the actual contributions of the Member and the Signatory Company or predecessor
employer, as the case may be, and the current value of the assets attributable
thereto. Such transferred assets shall be credited to such Member's Account as a
fully vested portion thereof.
11.2 Transfers to Other Qualified Plans. The Administrative
Committee may, upon written request of a Member otherwise entitled
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to receive a distribution of benefits under Article IX, direct the Trustee to
transfer the vested amount of such Member's Account hereunder to another
qualified plan meeting the requirements of Section 401(a) of the Code which is
maintained by the Signatory Company or a successor employer of the Member and
which makes provision for receiving such transferred assets. The assets so
transferred shall be accompanied by written instructions from the Administrative
Committee identifying this Plan, the other plan, the name of the Member, his one
hundred percent (100%) vested interest, the actual Employer Contributions of the
Signatory Company and the current value of the assets attributable thereto.
Prior to the transfer of any assets, the Trustee must be satisfied that the
holding of such assets is permitted in the transferee trust. Upon receipt of
such written instructions, the Trustee shall effect the transfer of the Member's
Account. Such transferred assets shall be credited to such Member's Account in
the transferee plan and trust as a fully vested portion thereof.
ARTICLE XII.
Administrative Committee
12.1 Appointment, Resignation and Removal. The Board of Directors
of the Corporation shall appoint an Administrative Committee of one or more
persons, the members of which shall serve until resignation, death or removal.
Any member of the Administrative Committee may resign at any time by mailing
written notice of such resignation to the Board of Directors of the Corporation
thirty (30) days before the effective date of such resignation. Such notice may
be waived by written consent of the
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Corporation. Any member of the Administrative Committee may be removed by the
Board of Directors of the Corporation with or without cause. Vacancies in the
Administrative Committee arising by resignation, death, removal or otherwise
shall be filled by such persons as may be appointed by the Board of Directors of
the Corporation. Each member of the Administrative Committee shall, before
entering upon the performance of his duties, qualify by signing a consent to
serve as a member of the Administrative Committee under and pursuant to this
Plan and by filing such consent with the Corporation.
12.2 Rights, Powers and Authority. The Administrative Committee
shall have general supervision of the administration of the Plan and Trust
according to the terms and provisions of this document and shall have all powers
necessary to accomplish such purposes, including, but not limited to, the right,
power and authority:
(a) To make rules and regulations for the administration of
the Plan and Trust which are not inconsistent with the terms and
provisions hereof; provided, that such rules and regulations are
evidenced in writing and copies thereof are delivered to the Trustee
and to each Signatory Company;
(b) To construe all terms, provisions, conditions and
limitations of the Plan and Trust; and its construction thereof, made
in good faith and without discrimination in favor of or against any
Member, shall be final and conclusive on all parties at interest;
(c) To correct any defect or supply any omission or
reconcile any inconsistency which may appear in the Plan and Trust, in
such manner and to such extent as it shall deem expedient to carry the
Plan and Trust into effect for the greatest benefit of all parties at
interest, and its judgment of such expediency shall be final and
conclusive on all parties at interest;
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(d) To select, employ and compensate from time to time such
consultants, actuaries, accountants, attorneys and other agents and
employees as the Administrative Committee may deem necessary or
advisable for the proper and efficient administration of the Plan or
Trust; and any agent or employee so selected by the Administrative
Committee may be a person or firm then, theretofore, or thereafter
serving any Signatory Company in any capacity;
(e) To determine all questions relating to the eligibility
of Employees to become Members and to determine the Years of Service
and the amount of Considered Compensation upon which the benefits of
each Member shall be calculated;
(f) To determine all questions relating to the
administration of the Plan and Trust, including, but not limited to,
differences of opinion which may arise between a Signatory Company, the
Trustee, a Member or any of them; and, whenever it is deemed advisable,
to determine such questions in order to promote the uniform and
nondiscriminatory administration of the Plan and Trust for the benefit
of all parties at interest;
(g) To direct and instruct the Trustee in all matters
relating to the payment of Plan benefits;
(h) To direct and instruct the Trustee, in writing, how to
vote all shares of Employer Stock which the Trustee is authorized to
vote pursuant to Article XIV, Section 14.3; and
(i) To direct and instruct the Trustee in all matters
relating to the purchase of Qualifying Employer Securities.
12.3 Administration. Whenever, in the administration of the Plan,
any action is taken by the Administrative Committee, such action shall be
uniform in nature as applied to all persons similarly situated and no such
action shall be taken which will discriminate in favor of Members who are
officers, shareholders, partners or highly compensated. The Administrative
Committee shall keep records containing all relevant data pertaining to
individual Members and their rights under the Plan and is charged with the duty
of seeing that each Member receives the benefits to which he
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is entitled. Any Employee may consult with the Administrative Committee on any
matter or matters relating to the Plan. The Administrative Committee shall
supply each Member with a designation of beneficiary form which may be completed
and signed by the Member pursuant to Article VI, Section 6.2 and filed with the
Administrative Committee, with any other forms it shall require in connection
with the administration of the Plan.
12.4 Annual Audit of Plan. Unless otherwise relieved of the
responsibility to file audited financial statements with the Department of
Labor, if the Plan has one hundred (100) or more Members, it shall be the duty
and responsibility of the Administrative Committee to engage, on behalf of all
Members, an independent Certified Public Accountant who shall conduct an annual
examination of any financial statements of the Plan and Trust and of other books
and records of the Plan and Trust as the Certified Public Accountant may deem
necessary to enable him to form and provide a written opinion as to whether the
financial statements and related schedules required to be filed with the
Department of Labor or furnished to each Member are presented fairly and in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding Plan Year. Such examination shall be
conducted in accordance with generally accepted auditing standards and shall
involve such tests of the books and records of the Plan and Trust as the
Certified Public Accountant considers necessary. However, if the statements
required to be submitted as part of the reports to the Department of Labor are
prepared by a bank or similar institution or insurance
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carrier regulated and supervised and subject to periodic examination by a state
or federal agency and if such statements are certified by the preparer as
accurate and if such statements are, in fact, made a part of the annual report
to the Department of Labor, then the examination required by the foregoing
provisions of this Section shall be optional with the Administrative Committee.
12.5 Chairman and Secretary. The Administrative Committee may
select a Chairman from among its members who shall preside at all meetings of
the Administrative Committee and who shall be authorized to execute all
documents in the name of the Administrative Committee. In addition, it shall
select a Secretary who may or may not be a member of the Administrative
Committee and who shall keep the minutes of the Administrative Committee's
proceedings and all records, documents and data pertaining to the Administrative
Committee's supervision of the administration of the Plan and Trust.
12.6 Quorum and Voting Majority. A majority of the members of the
Administrative Committee shall constitute a quorum for the transaction of
business, and the vote of a majority of the members present and voting at any
meeting shall decide any question brought before such meeting. The
Administrative Committee may decide any question by the vote, taken without a
meeting, of a majority of its members.
12.7 Limitation on Voting. A member of the Administrative
Committee who is also a Member hereunder shall not vote or act upon any matter
relating solely to himself.
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12.8 Delegation of Rights, Powers and Duties. The Chairman or the
Secretary of the Administrative Committee may execute any certificate or other
written evidence of the action of the Administrative Committee. The
Administrative Committee may delegate any of its rights, powers, and duties to
any one or more of its members, including the power to execute any document on
behalf of the Administrative Committee, in which event the Administrative
Committee shall notify the Trustee, in writing, of such action and the name or
names of its members so designated. The Trustee thereafter shall accept and may
rely upon any document executed by such member or members as representing action
by the Administrative Committee until the Administrative Committee shall file
with the Trustee a written revocation of such designation.
12.9 Liability. Except to the extent that such liability is created
by Section 405 of the Act, no member of the Administrative Committee shall be
liable for any act or omission of any other member of the Administrative
Committee, nor for any act or omission on his own part, except for his own gross
negligence or willful misconduct, nor for the exercise of any power or
discretion in the performance of any duty assumed by him hereunder.
12.10 Compensation and Expense. The members of the Administrative
Committee shall serve without compensation for their services, but all expenses
of the Administrative Committee, including premiums for bonds for each member
thereof as required by Section 12.11 hereof, shall be paid by each Signatory
Company in the proportion that the total amount in the Accounts of the Members
of such Signatory Company bears to the total amount in the Accounts
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of the Members of all Signatory Companies; provided, however, that at the
election of all of the Signatory Companies, such expenses (except the premiums
for the required bonds under Section 12.11) may be paid from the Trust Fund.
12.11 Bonds. Each and every member of the Administrative
Committee shall be required to give bond for the faithful performance of his
duties, the amount of which shall be fixed at the beginning of each Plan Year.
The amount of each bond shall be determined annually by the Board of Directors
of the Corporation but shall not be less than ten percent (10%) of the amount of
funds handled. Unless otherwise required by the Secretary of Labor, however, no
bond shall be less than one thousand dollars ($1,000) nor more than five hundred
thousand dollars ($500,000). For purposes of fixing the amount of the bond, the
amount of funds handled shall be determined by the funds handled by the
Administrative Committee during the preceding Plan Year, or, if the Plan had no
preceding Plan Year, the amount of funds to be handled during the current Plan
Year by the Administrative Committee. The bond shall provide protection to the
Plan against loss by reason of acts of fraud or dishonesty on the part of the
members of the Administrative Committee, directly or through connivance with
others.
12.12 Indemnity. The Signatory Companies shall indemnify and save
the members of the Administrative Committee, and each of them, harmless from any
and all claims, losses, damages, expenses (including counsel fees approved by
the Administrative Committee) and liabilities (including any amounts paid in
settlement with the
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Administrative Committee's approval) or other effects and consequences arising
from any act, omission or conduct in their official capacity, except when the
same is judicially determined to be due to the gross negligence or willful
misconduct of such member. Any amounts paid or owing under this Section 12.12
shall be considered as an expense of the Administrative Committee to be paid by
the respective Signatory Companies as provided in Section 12.10 hereof. It is
expressly provided, however, that any excise tax assessed against any member or
members of the Administrative Committee pursuant to the provisions of Section
4975 of the Code shall not, for the purposes of this Plan and Trust, be
considered an expense of the Administrative Committee to be paid by the
Signatory Companies as hereinabove provided.
12.13 Reporting and Disclosure. The Administrative Committee shall
file or cause to be filed with the appropriate office of the Internal Revenue
Service and the Department of Labor all reports, returns, notices and other
information required under the Act or Code, including, but not limited to, the
plan description, summary plan description, annual reports and amendments
thereto, requests for determination letters, annual reports and registration
statements required by Section 6057(a) of the Code, returns and reports required
by Section 6047(c) of the Code, and shall provide the Members and their
Beneficiaries with such information as may be required by the Act or Code.
Nothing contained in this document shall give any Member or Beneficiary the
right to examine any data or records reflecting the compensation paid to any
other Member or Beneficiary.
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12.14 Annual Statement to Members. Within one hundred twenty (120)
days after the end of each Plan Year, or as soon thereafter as administratively
feasible, the Administrative Committee shall transmit to each Member or
Beneficiary a written statement showing, as of the end of such Plan Year:
(a) The balance in his Account as of the last day of the
preceding Plan Year;
(b) The amount of Employer Contributions and Forfeitures
allocated to his Account for the Plan Year;
(c) The adjustment of his Account to reflect his share of
the income, valuation adjustments and expenses of the Trust for the
Plan Year;
(d) The new balance in his Account; and
(e) Such other information as may be required under the
Code and regulations thereunder.
12.15 Signatory Company to Supply Information. To enable the
Administrative Committee to perform its functions, the Signatory Company shall
supply full and timely information to the Administrative Committee on all
matters relating to the compensation of all Members, their Hours of Service,
their Years of Service, their retirement, death, disability, or termination of
employment and such other pertinent facts as the Administrative Committee may
require; and the Administrative Committee shall advise the Trustee of such of
the foregoing facts as may be pertinent to the Trustee's duties under the Plan.
The Administrative Committee may rely upon such information as is supplied by
the Signatory Company and shall have no duty or responsibility to verify such
information.
12.16 Valuation of Employer Stock. The Administrative Committee
shall annually, as of the last day of each Plan Year, and
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at such other times as the Trustee shall request, determine the fair market
value of the Employer Stock held by the Trust Fund. If the Employer Stock is not
traded on a national securities exchange or over-the-counter, the Administrative
Committee shall engage a "qualified independent appraiser" to determine the fair
market value of such securities. For this purpose the term "qualified
independent appraiser" shall satisfy the requirements set forth under Sections
401(a)(28)(C) and 170(a)(1) of the Code and the regulations thereunder. In each
instance the Administrative Committee shall have the appraiser prepare adequate
written documentation showing the scope of the evaluation and the valuation
method or methods used in arriving at the fair market value of the securities.
The expense incurred by the Administrative Committee with respect to such
valuation shall be considered an administrative expense of the Trust to be paid
by the Signatory Company as heretofore provided.
ARTICLE XIII.
Trustee
13.1 Acceptance and Holding of Funds. The Trustee shall retain,
manage, administer and hold the Trust Fund in accordance with the terms of this
Plan. The Trustee shall receive any securities or other property that are
tendered to the Trustee and that the Trustee deems acceptable. The Trustee shall
have no duty to compel any Employer Contribution to the Trust Fund by a
Signatory Company.
13.2 Responsibility for Actions. The Trustee shall not be
responsible for any acts or omissions of the Administrative
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Committee and may assume that the Administrative Committee is discharging its
duties under this Plan until and unless it is notified to the contrary, in
writing, by any person known to be a Member of the Plan or by a Signatory
Company. If the Trustee receives such notice, the Trustee may exercise its own
discretion and may apply to a court of competent jurisdiction for guidance with
respect to the disposition of the Trust Fund or any other matter. Any powers
granted to the Trustee that are to be exercised according to the direction of
the Administrative Committee shall be exercised by the Trustee exactly as
directed by the Administrative Committee in a written instrument signed by the
person or persons authorized to sign for the Administrative Committee and
delivered to the Trustee. The Trustee shall have absolutely no liability for any
loss or breach of trust of any kind which may result from any action or failure
of action due to its compliance with written direction from the Administrative
Committee (whether or not such action is to be taken solely at the direction of
the Administrative Committee) or for a failure on the part of the Administrative
Committee to give a written direction properly or within a required period of
time. The Trustee may accept as true all papers, certificates, statements and
representations of fact that are presented to it without investigation or
verification if the Trustee believes them to be genuine, to have been signed by
the Administrative Committee and to be the act of the Administrative Committee,
and may rely solely on the written advice of the Administrative Committee on any
question of fact. If at any time the Administrative Committee shall fail to give
directions or
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instructions to the Trustee or to express its consent and approval to proposed
action within a reasonable time after consent and approval is requested by the
Trustee, the Trustee, although being under no obligation to do so, may act (and
shall be protected in so acting) without such directions, instructions, consent
or approval and may exercise its own discretion and judgment as seems
appropriate and advisable under the circumstances in order to effectuate the
purposes of this document.
13.3 Resolutions of Board of Directors. The Trustee shall be fully
protected in relying upon a resolution of the Board of Directors of the
Corporation, which may be certified by the Corporation's secretary or assistant
secretary, as to the membership of the Administrative Committee until a
subsequent resolution is filed with the Trustee by the Board of Directors.
13.4 Judicial Protection. The Trustee may seek judicial protection
for any action or proceeding it deems necessary to settle the accounts of the
Trustee; a judicial determination or a declaratory judgment as to a question of
construction of the Plan or Trust; or judicial instruction as to action under
this Plan or Trust. The Trustee need join only the Administrative Committee and
the Signatory Company as parties defendant although the Trustee may join other
parties. The district court of Harris County, Texas shall have jurisdiction and
venue in all such matters. However, the Trustee may choose to bring suit in
either federal or state court.
13.5 Dealings with Third Parties. No person dealing with the
Trustee shall be required to verify the application by the Trustee for Trust
purposes of any money paid or other property delivered to
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the Trustee. All persons dealing with the Trustee shall be entitled to rely upon
the representations of the Trustee as to its authority and are released from any
duty of inquiry with respect thereto. Any action of the Trustee hereunder shall
be conclusively evidenced for all purposes of this document by a certificate
duly signed by the Trustee, and such certificate shall be conclusive evidence of
the facts recited therein and shall fully protect all persons relying upon the
truth thereof. Any person dealing with the Trustee in good faith shall not be
required to inquire whether the Administrative Committee has instructed the
Trustee or whether the Trustee is otherwise authorized to take or omit any
action. Any such person shall be fully protected in acting upon any notice,
resolution, instruction, direction, order, certificate, opinion, letter,
telegram or other document believed by such person to be genuine, to have been
signed by the Trustee and to be the act of the Trustee.
13.6 Annual Accounting by Trustee. Within one hundred twenty (120)
days after the end of each Plan Year, or as soon thereafter as administratively
feasible, the Trustee shall render to the Administrative Committee a written
accounting of its administration of the Trust Fund showing all receipts and
disbursements during the preceding Plan Year and the market value of the assets
of the Trust Fund as of the end of such Plan Year. The written approval of any
accounting by the Administrative Committee as to all matters and transactions
stated or shown therein relating to the Trust shall be final and binding upon
the Administrative Committee, each Signatory Company and upon all persons who
shall then be or shall thereafter
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become interested in such Trust, and the Trustee shall be released and
discharged as to all items, matters and things set forth in such accounting as
if such accounting had been settled by decree of a court of competent
jurisdiction. The failure of the Administrative Committee to notify the Trustee
of its disapproval of such accounting within sixty (60) days after receipt of
any such accounting shall be equivalent to written approval. The Trustee shall
have, nevertheless, the right to have its accounts settled by judicial
proceeding. The records of the Trustee as to the Trust Fund may be inspected by
the Administrative Committee or Signatory Company during normal business hours
of the Trustee.
13.7 Preparation of Annual Statements to Members. The Trustee shall
provide any assistance and information requested by the Administrative Committee
in conjunction with the preparation of the annual statements to Members in
accordance with Section 12.14.
13.8 Resignation of Trustee. The Trustee may resign at any time by
giving ninety (90) days' written notice to the Corporation. Such notice may be
waived by written consent of the Corporation. Upon such resignation, the Trustee
shall within a reasonable time after the effective date of such resignation
render to the Administrative Committee a written account of its administration
of the Trust for the period following that which was covered by the last annual
accounting, through the effective date of resignation.
13.9 Removal of Trustee. The Corporation may remove any Trustee at
any time by giving thirty (30) days' written notice. Such notice may be waived
by written consent of the Trustee being
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removed. In the event of removal, the Trustee shall be under the same duty to
settle its accounts as provided in Section 13.6 above.
13.10 Appointment of Successor Trustee. The resignation or removal
of a Trustee shall not terminate the Trust. In the event of a vacancy in the
position of Trustee at any time, the Corporation shall designate and appoint a
successor Trustee. Any successor Trustee, upon executing an acknowledged
acceptance of the trusteeship and upon settlement of the accounts and discharge
of the retiring Trustee, shall be vested, without further act on the part of
anyone, with all the estates, titles, rights, powers, duties and discretions
granted to the retiring Trustee. The retiring Trustee shall execute and deliver
such assignments or other instruments as may be deemed advisable by the
successor Trustee.
13.11 Trustee's Compensation and Expenses. The Trustee may receive
reasonable compensation as may be agreed upon from time to time; provided,
however, that no person serving as Trustee who receives full-time compensation
from a Signatory Company or group of Signatory Companies shall receive
compensation from the Trust Fund except for reimbursement of expenses properly
and actually paid. All brokerage costs, transfer taxes and expenses incurred in
connection with the investment and reinvestment of the Trust Fund, all income
taxes or other taxes of any kind whatsoever which may be levied or assessed
under existing or future laws upon or with respect to the Trust Fund, and any
interest which may be payable on money borrowed by the Trustee for the purposes
of the Trust, shall be paid from the Trust Fund, and, until paid, shall
constitute a
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charge upon the Trust Fund. All other administrative expenses incurred by the
Trustee in the performance of its duties, including fees for legal, appraisal
and accounting services rendered to the Trustee, such compensation to the
Trustee as may be agreed upon in writing from time to time between the
Corporation and the Trustee, all premiums for bonds required under Section 13.12
hereof and all other proper charges and disbursements of the Trustee, shall be
paid by each Signatory Company in the proportion that the total amount in the
Accounts of the Members of such Signatory Company bears to the total amount in
the Accounts of the Members of all Signatory Companies; provided, however, that
at the election of all of the Signatory Companies, such expenses (except
premiums for required bonds under Section 13.12 hereof) may be paid from the
Trust Fund. It is expressly provided, however, that any excise tax assessed
against any Trustee pursuant to the provisions of Section 4975 of the Code shall
not, for purposes of this Plan and Trust, be considered an expense of the Trust
to be paid by the Signatory Companies as hereinabove provided. In the instance
where Trustee's fees have been billed, but no payment has been received within
thirty days of invoicing, the Trustee may charge such outstanding fees to the
Trust balance.
13.12 Bonds. Unless otherwise specifically exempted by federal
statute or regulations promulgated thereunder, each and every Trustee shall be
required to give bond for the faithful performance of its duties, the amount of
which shall be fixed at the beginning of each Plan Year. The amount of each bond
shall be determined annually by the Board of Directors of the Corporation but
shall not
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be less than ten percent (10%) of the amount of funds handled. Unless otherwise
required by the Secretary of Labor, however, no bond shall be less than one
thousand dollars ($1,000) nor more than five hundred thousand dollars
($500,000). For purposes of fixing the amount of the bond, the amount of funds
handled by the Trustee shall be determined by the funds handled by the Trustee
during the preceding Plan Year, or, if the Plan had no preceding Plan Year, the
amount of funds to be handled during the current Plan Year by the Trustee. The
bond shall provide protection to the Plan against loss by reason of acts of
fraud or dishonesty on the part of the Trustee, directly or through connivance
with others. However, this Section 13.12 shall not apply as to any Trustee who
is also a member of the Administrative Committee and who has given bond as
required by Article XII, Section 12.11 hereof.
13.13 Indemnity. The Signatory Companies shall indemnify and save
the Trustee harmless from any and all claims, losses, damages, expenses
(including counsel fees approved by the Trustee) and liabilities (including any
amounts paid in settlement with the Trustee's approval) or other effects and
consequences arising from any act, omission or conduct in its official capacity,
except when the same is judicially determined to be due to the gross negligence
or willful misconduct of the Trustee. Any amounts paid or owing under this
Section 13.13 shall be considered as an expense of the Trustee to be paid by the
respective Signatory Companies as provided in Section 13.11 hereof. It is
expressly provided, however, that any excise tax assessed against the Trustee
pursuant to the provisions of Section 4975 of the Code shall not, for purposes
of
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this Plan and Trust, be considered an expense of the Trustee to be paid by the
Signatory Companies as hereinabove provided.
13.14 Voting of Employer Stock. If the Employer Stock is not
publicly traded, each Member shall have the right to direct the Trustee as to
the manner in which the shares of Employer Stock acquired by the Plan after
December 31, 1979 and allocated to the Account of such Member are to be voted,
to the extent required by Section 401(a)(22) of the Code; provided that if such
Employer Stock is not a "registration-type class of security" then for Plan
Years beginning after December 31, 1986 in which more than ten percent (10%) of
total assets are securities of the Employer, such right shall be limited to
corporate matters which involve the approval or disapproval of any corporate
merger or consolidation, recapitalization, reclassification, liquidation,
dissolution, sale of substantially all assets of a trade or business, or such
similar transaction as the Secretary may prescribe in regulations. A
"registration-type class of securities" means (A) a class of securities required
to be registered under section 12 of the Securities Exchange Act of 1934, and
(B) a class of securities which would be required to be so registered except for
the exemption from registration provided in subsection (g)(2)(H) of such section
12.
The Members shall receive all notices and information statements with
respect to those matters to which their voting rights apply from the Signatory
Company (or other person required to issue such notice or information under law)
directly (or indirectly through the Trustee if the Trustee so requests) in the
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same manner as other shareholders as required by the Signatory Company's
articles of incorporation and bylaws and other applicable law. This notice and
information shall be in writing and shall include the number of shares as to
which each Member may direct the Trustee. The Trustee shall vote Employer Stock
allocated to the Account of each Member in accordance with the written
instructions received from such Member on the form prescribed by the
Administrative Committee for this purpose. The Administrative Committee shall
have the right to direct the Trustee as to the voting of Employer Stock in all
cases where the Members' pass-through voting rights pursuant to this Section
13.14 do not apply. In the absence of any such instruction or direction, the
Trustee shall not vote such Employer Stock. Such voting rights shall apply only
to the extent required by Section 401(a)(22) of the Code.
ARTICLE XIV.
Investment Powers of Trustee
14.1 Standards; Prudent Man Rule. The Trustee shall, in discharging
its duties, act solely in the interest of the Members and Beneficiaries of the
Plan. It must act exclusively for the purpose of providing benefits to Members
and Beneficiaries and for defraying the reasonable expenses of the Plan. The
Trustee shall carry out its duties with the same care, skill, prudence and
diligence that a prudent man acting in a like capacity would use under
conditions prevailing at that time.
14.2 The Investment Committee or Investment Manager.
(a) Membership. The Corporation's Board of Directors may
appoint an Investment Committee or Investment Manager to establish an
investment policy and to recommend to the Trustee the investment of the
Trust
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Fund. The Investment Manager or the members of the Investment Committee
shall serve at the will of the Directors, and the number of members of
such Investment Committee may be changed at any time by the Directors.
Vacancies due to resignation, death, removal or other causes shall be
filled by the Directors.
(b) Organization and Procedure. The Investment Committee
may choose appropriate officers or appoint a Secretary who need not be
a member of such Investment Committee, and shall keep records of its
proceedings and determinations. The Investment Committee shall act by
majority vote of its members either at a meeting or in writing. By such
action it may authorize one or more of its officers or members to
execute documents on its behalf, and the Trustee, upon written
notification of such authorization, shall accept and rely upon such
documents until notified in writing that the authorization has been
revoked by the Investment Committee.
(c) Compensation and Expenses. Members of the Investment
Committee shall not receive compensation for the performance of their
duties, but all reasonable and necessary costs and expenses incurred by
such Investment Committee in the administration of the Plan and Trust
shall, if not paid directly by the Signatory Company, be paid by the
Trustee from the Trust Fund. Payment of expenses of a duly-appointed
Investment Manager shall be made from the Trust pursuant to the fee
schedule agreed upon by the Investment Manager and Corporation.
(d) Bonds. Unless otherwise specifically exempted by
federal statute or regulations promulgated thereunder, or if the
Investment Committee is a banking institution or similar institution
already bonded under federal regulations, the Investment Manager or
each and every member of the Investment Committee shall be required to
give bond for the faithful performance of his or her duties, the amount
of which shall be fixed at the beginning of each Plan Year. The amount
of each bond shall be determined annually by the Corporation's Board of
Directors but shall not be less than ten percent (10%) of the amount of
funds handled. Unless otherwise required by the Secretary of Labor,
however, no bond shall be less than one thousand dollars ($1,000) nor
more than five hundred thousand dollars ($500,000). For purposes of
fixing the amount of the bond, the amount of funds handled by the
Investment Manager or the Investment Committee shall be determined by
the funds handled by the Investment Manager or the Investment Committee
during the preceding Plan Year, or, if the Plan had no preceding Plan
Year, the amount of funds to be handled during the current Plan Year by
the Investment Manager or the Investment Committee. The bond shall
provide protection to the
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Plan against loss by reason of acts of fraud or dishonesty on the part
of the Investment Manager or the Investment Committee, directly or
through connivance with others. However, this subsection (d) shall not
apply as to any Investment Manager or member of the Investment
Committee who is also a member of the Administrative Committee or a
Trustee and has given bond as required by Article XII, Section 12.11 or
Article XIII, Section 13.12 hereof.
(e) Named Fiduciary Status. By appointment of an
Investment Manager under this Section 14.2, the Corporation intends
that such Investment Manager be an "investment manager" as defined
under Section 3(38) of the Act, and to transfer fiduciary
responsibility and liability under the Act and/or the Code for the
investment of Trust assets from the Trustee to the Investment Manager
so as to remove responsibility for co-fiduciary breaches of duty as set
forth in Section 405(c)(3) of the Act.
14.3 Powers of the Trustee. The Trustee shall have full discretion
and authority with regard to the investment of the Trust Fund, except with
respect to a Plan asset under the control or direction of the Investment
Committee or a properly appointed Investment Manager. The Trustee shall
coordinate its investment policy with the Plan's financial needs as communicated
to it by the Investment Committee. The Trustee shall have the following
authority, rights, privileges and powers in addition to the authority, rights,
privileges and powers elsewhere vested in the Trustee and those now or hereafter
conferred by law, subject to the limitations stated in this Plan:
(a) To hold, manage, control, collect, use (including the
power to hold any property unproductive of income) and dispose of the
Trust Fund in accordance with the terms of this instrument as if it
were the fee simple owner of such Trust Fund; and
(b) To keep any or all securities or other property in
bearer or Federal Reserve Book Entry form or in the name of some other
person, partnership including the name of any nominee used by any
system for the centralized handling of securities or corporation with a
power of
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attorney for transfer attached, or in its name without
disclosing its fiduciary capacity; and
(c) To invest and reinvest the Trust assets, as
instructed pursuant to Section 14.2 or otherwise, except to the extent
such power is placed with an Investment Manager or the Investment
Committee; and
(d) To join in and become a party to, to dissent from or
oppose, any reorganization, consolidation, sale or merger or other
capital readjustment of any corporation, the stocks or securities of
which may at any time be held in the Trust or any plan or agreement for
the protection of the interest of the holders of any such stock or
securities; to participate in any such protective plan, agreement,
reorganization, consolidation, sale, merger, or readjustment to the
same extent and as fully as though it were the absolute and individual
owner of such stock or securities; to deposit with any committee or
depository, pursuant to any plan or agreement of protection,
reorganization, consolidation, sale, merger, or readjustment, any
property held in the Trust; to make payment from the Trust of any
charges or assessments imposed by the terms of any plan or agreement of
protection, reorganization, consolidation, sale, merger or
readjustment; and to receive and continue to hold in the Trust any
property allotted to the Trust by reason of its participation therein;
and
(e) To invest, reinvest and hold up to one hundred
percent (100%) of the Trust assets in Qualifying Employer Securities.
Such securities may be purchased on the open market or in private
transactions, including, without limitation, the purchase of such
securities from current shareholders or the purchase, from time to
time, of authorized but unissued common stock or treasury shares
directly from the employer or by exercise of subscription, conversion
or other rights, in such amounts, at such prices and at such times, as,
in its sole and absolute discretion, it deems necessary or desirable to
most effectively accomplish the purpose of the Trust; provided,
however, that the purchase price of any Qualifying Employer Security
shall not exceed the fair market value of such security at the time of
its purchase. The determination of the fair market value shall be made
in good faith by the Administrative Committee in accordance with this
Section 14.3(e) and in accordance with any regulations which may be
promulgated by the Secretary of Labor pursuant to Section 3(18) of the
Act. In addition, the Trustee may acquire and hold as an asset of the
Trust any shares of stock of any corporation which may be acquired: (i)
in exchange for all or part of the stock held in the Trust pursuant to
the merger, reorganization or recapitalization of the
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corporation; (ii) as a dividend on stock held in the Trust; or (iii) by
the exercise of subscription, conversion, or other rights offered to
the Trustee as a holder of any stock held in the Trust; and
(f) To invest in Qualifying Employer Real Property;
provided that immediately following the acquisition of such Qualifying
Employer Real Property, not more than one hundred percent (100%) of the
aggregate fair market value of the Trust Fund is invested in Qualifying
Employer Real Property; and
(g) To invest, to the extent funds are thereafter
available, in savings accounts, certificates of deposit, high-grade
short-term securities, stocks, bonds, or other investments deemed by
the Trustee to be desirable for the Trust, or such funds may be held in
cash or cash equivalents; and
(h) To sell any assets of the Trust estate which are not
permitted to be distributed in kind to Beneficiaries under the United
States Internal Revenue laws and regulations dealing with qualified
employee stock ownership trusts, and to use the proceeds of the sale to
acquire assets which are permitted to be so distributed; and
(i) Except as provided in Article XIII, Section 13.14
with regard to Employer Stock, to vote, either in person or by proxy,
with or without power of substitution, any stocks, bonds or other
securities held by it; to exercise any options appurtenant to any
stocks, bonds or other securities for the conversion thereof into other
stocks, bonds or securities; to exercise any rights to subscribe for
additional stocks, bonds or other securities and to make any and all
necessary payments thereof; and
(j) To collect the principal and income of the Trust as
the same may become due and payable and to give binding receipt
therefor; and
(k) To institute, join in, maintain, defend, compromise,
submit to arbitration or settle any litigation, claim, obligation or
controversy in favor of or against the Trust Fund, all in the name of
the Trustee and without the joinder of any Member; and
(l) To invest all or any part of the Trust Fund in any
single, collective, or common trust fund permitted for employee benefit
plans qualified under Section 401(a) of the Code, maintained by the
Trustee or its affiliates and investment in any single, collective or
common trust fund which may hold securities issued by the Signatory
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Company or its affiliates. Specifically, the Trustee may invest and
reinvest the assets transferred to it in an interest in any group trust
fund that has been or shall be created and maintained by it as trustee
for the collective investment of funds of trusts for employee benefit
plans qualified under Section 401(a) of the Code, and to the extent
required by Revenue Ruling 81100 and further to the extent consistent
with this Trust Agreement, the instrument creating such trust fund,
together with any amendments thereto, is hereby incorporated and made a
part of this Trust Agreement; and
(m) To partition any property or interest held as part of
the Trust Fund and to pay or receive such money or property necessary
or advisable to equalize differences; to make any distribution from the
Trust Fund in cash or in kind, or both (including an undivided interest
in any property) or in any other manner (including composing shares
differently) and to value any property belonging to the Trust Fund,
which valuation at all times shall be binding upon the Signatory
Company and all Members; and
(n) To loan or borrow money in any manner (including
joint and several obligations) with or without security, upon such
terms as the Trustee may deem advisable regardless of the duration of
the Trust created by this instrument and to mortgage (including the
making of purchase money mortgages), pledge or in any other manner
encumber all or any part of the Trust Fund as the Trustee may deem
advisable. However, this Section 14.3(n) shall not apply to purchases
of Qualifying Employer Securities or Employer Stock; and
(o) To select, employ and compensate such lawyers,
brokers, banks, investment counsel or other agents or employees and to
delegate to them such of the duties, rights and powers of the Trustee
(including the power to vote shares of stock) as the Trustee deems
advisable in administering the Trust Fund; and
(p) To appoint any person or corporation in any state of
the United States to act as ancillary Trustee with respect to any
portion of the Trust Fund. Any ancillary Trustee shall have such
rights, powers, duties and discretions as are delegated to it by the
Trustee but shall exercise the same, subject to such limitations or
further directions of the Trustee as shall be specified in the
instrument evidencing its appointment. Any ancillary Trustee shall be
accountable solely to the Trustee and shall be entitled to reasonable
compensation; and
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(q) To exercise all the rights, powers, options and
privileges now or hereafter granted to trustees under the Texas Trust
Code, except such as conflict with the terms of this instrument. So far
as possible, no subsequent legislation or regulation shall limit the
rights, powers or privileges granted in this Plan or in the Texas Trust
Code, as it now exists. The Trustee shall have, hold, manage, control,
use, invest and reinvest, disburse and dispose of the Trust Fund as if
the Trustee were the owner thereof in fee simple instead of in trust,
subject only to such limitations as are contained herein or such of the
laws of the State of Texas as cannot be waived. The instrument shall
always be construed in favor of the validity of any act or omission of
the Trustee; and
(r) To keep such portion of the Trust Fund in cash or
cash balances as the Trustee may, from time to time, deem to be in the
best interests of the Plan, without liability for interest thereon; and
(s) To invest Trust funds in time deposits or savings
accounts, bearing a reasonable rate of interest, with itself as a bank
or its bank holding affiliate; and
(t) To deposit monies in federally insured savings
accounts or certificates of deposit maintained by
commercial banks or savings and loan associations; and
(u) To make a loan or loans to Members under such
terms and conditions as provided in Article XV hereof;
and
(v) To engage in any transaction with:
(i) a common or collective trust fund or pooled
investment fund which is authorized and permitted to receive
investments from the Trust and which is maintained by any
"party-in-interest", within the meaning of Section 3(14) of
ERISA, which is a bank or trust company supervised by a State
or Federal agency including, where otherwise permissible under
the applicable laws and regulations, any such fund as
maintained by the Trustee, its affiliates, any Investment
Manger appointed hereunder or another fiduciary hereunder
(provided such other fiduciary qualified as an Investment
Manger under Section 3(38) of ERISA, the provisions of which
as they may now or hereafter exist are hereby incorporated by
reference, or
(ii) a pooled investment fund of any insurance
company qualified to do business in
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a State, provided such fund is authorized and
permitted to receive investments from the
Trust,
if (A) the transaction is a sale or purchase of an interest in such
fund, and (B) the bank, trust company or insurance company receives not
more than reasonable compensation. This provision constitutes the
express permission required by Section 401(b)(8) of ERISA.
(w) From time to time, to transfer to a common or pooled
trust fund maintained by any corporate Trustee hereunder, all or such
part of the Trust Fund as the Trustee may deem advisable and such part
of all of the Trust Fund so transferred shall be subject to all terms
and provisions of the common or pooled trust fund which contemplate the
commingling for investment purposes of such trust assets with trust
assets of other employees' profit sharing and pension plans established
by other public institutions and organizations. The Trustee, may from
time to time, withdraw such common or pooled trust fund all or such
part of the Trust Fund as the Trustee may deem advisable; and
(x) To invest and reinvest the Trust assets, or any part
thereof, in any property of any kind or nature whatsoever (or in any
rights or interests therein or in any evidence or indicia thereof),
whether real, personal or mixed or whether tangible or intangible,
including, but not limited to, the following or anything of similar
kind, character or class: common or preferred stock, including
evidences of ownership in so-called Massachusetts Trusts; fees;
beneficiary interests; lease holds; bonds; mortgages; leases; notes or
obligations; oil and gas payments; oil and gas contracts and other
securities; instruments; commodities or property within or outside the
State of Texas; and hold cash uninvested at any time and in any amount.
The Trustee may make or hold investments of any part of the Trust Fund
in common or undivided interest with other persons or entities.
14.4 Prohibited Transactions. Except as elsewhere permitted in the
Act:
(a) The Trustee, Investment Manager or Investment
Committee shall not cause the Plan to engage in a transaction if he
knows, or should know, that such transaction constitutes a direct or
indirect:
(1) Sale, exchange or leasing of any property
between the Plan and a party in interest, except the sale of
Qualifying
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Employer Securities as provided in Section 14.3(e);
(2) Lending of money or other extension of
credit between the Plan and a party in interest, except as
provided in Section 14.3(u);
(3) Furnishing of goods, services or facilities
between the Plan and a party in interest;
(4) Transfer to, or use by or for the benefit
of, a party in interest of any assets of the Plan; or
(5) Acquisition on behalf of the Plan of any
Employer Security or Employer Real Property in violation of
Section 407(a) of said Act.
(b) The Trustee, Investment Manger or Investment
Committee who has authority or discretion to control or manage the
assets of a Plan shall not permit the Plan to hold any Employer
Security or Employer Real Property if he knows, or should know, that
holding such security or real property violates Section 407(a) of said
Act.
(c) The Trustee, Investment Manager or Investment
Committee shall not:
(1) Deal with the assets of the Plan in his own
interest or for his own account;
(2) In his individual capacity or any other
capacity act in any transaction involving the Plan on behalf
of a party (or represent a party) whose interests are adverse
to the interests of the Plan or the interests of its Members
or Beneficiaries; or
(3) Receive any consideration for his own
personal account from any party dealing with the Plan in
connection with a transaction involving the assets of the
Plan.
(d) A transfer of real or personal property by a party
in interest to the Plan shall be treated as a sale or exchange if the
property is subject to a mortgage or similar lien which the Plan
assumes, or if it is subject to a mortgage or similar lien which a
party in interest placed on the property within the ten-year period
ending on the date of the transfer.
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(e) Except as otherwise permitted in the Act:
(1) The Plan shall not acquire or hold:
(A) Any Employer Security which is not a
Qualifying Employer Security, or
(B) Any Employer Real Property which is
not Qualifying Employer Real Property.
(2) The Plan shall not acquire any Qualifying
Employer Security or Qualifying Employer Real Property if
immediately after such acquisition the aggregate fair market
value of Employer Securities and Employer Real Property held
by the Plan exceeds one hundred percent (100%) of the fair
market value of the assets of the Trust Fund.
(f) For purposes of determining the time at which a Plan
acquires Employer Real Property for purposes of this Section, such
property shall be deemed to be acquired by the Plan on the date on
which the Plan acquires the property or on the date on which the lease
to the Signatory Company (or Affiliated Company) is entered into,
whichever is later.
(g) The Trustee, Investment Manager or Investment
Committee shall not acquire any collectibles to the extent prescribed
by law. For purposes of this subsection, "collectibles" means any work
of art, any rug or antique, any metal or gem, any stamp or coin, any
alcoholic beverage, or any other tangible personal property specified
by the Secretary of Labor or Secretary of the Treasury.
ARTICLE XV.
Loans to Members
15.1 No Plan Loans. Loans to Members are not available under the
Plan.
ARTICLE XVI.
Amendment and Termination
16.1 Amendment General. The Corporation shall have the sole right
to amend this Plan. In the event of any such amendment, each
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other Signatory Company shall be deemed to have consented to the amendment
unless it notifies the Corporation, in writing, that it refuses to ratify the
amendment. In the event that a Signatory Company refuses to ratify any such
amendment, such refusal to ratify shall constitute a withdrawal from this Plan
by such Signatory Company. Upon the delivery by the Corporation to the Trustee
of a certified copy of the resolution authorizing an amendment to this Plan,
this Plan shall be deemed to have been so amended and all Members and other
persons claiming any interest hereunder shall be bound thereby; provided, that
no amendment:
(a) Shall have the effect of vesting in any Signatory
Company any interest in any property held subject to the terms of the
Trust; or
(b) Shall cause or permit any property held subject to
the terms of the Trust to be diverted to purposes other than the
exclusive benefit of the present or future Members and Beneficiaries;
(c) Shall increase the duties or liabilities of the
Trustee without its written consent; or
(d) Shall reduce benefits of a Member.
For purposes of this Section, a plan amendment which has the effect of
(1) eliminating or reducing an early retirement benefit or a retirement-type
subsidy, or (2) eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment shall be treated as
reducing benefits. In the case of a retirement-type subsidy, the preceding
sentence shall apply only with respect to a Member who satisfies (either before
or after the amendment) the preamendment conditions for the subsidy. In general,
a retirement-type subsidy is a subsidy that continues after retirement, but does
not include a qualified disability
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benefit, a medical benefit, a social security supplement, a death benefit
(including life insurance), or a plant shutdown benefit (that does not continue
after retirement age). Furthermore, no amendment to the Plan shall have the
effect of decreasing a Member's vested interest determined without regard to
such amendment as of the later of the date such amendment is adopted, or becomes
effective.
16.2 Amendments Necessary to Comply with Intentions of Signatory
Companies. It is the intention of each Signatory Company that its Employer
Contributions to this Plan be deductible under the applicable provisions of the
Code, that such Employer Contributions not be subject to withholding under the
Code or the Federal Insurance Contributions Act, and that such Employer
Contributions not be subject to the Fair Labor Standards Act of 1938, as
amended, as part of the "regular rate". The Corporation shall make such
amendments to this Plan as may be necessary to carry out these intentions. All
amendments to this Plan which may be required for the purpose of realizing the
intentions above stated may be made retroactively.
16.3 Termination with Respect to Signatory Company. A termination
of this Plan by any Signatory Company, as provided below in this Section 16.3,
without establishment of a successor plan, shall constitute a termination only
with respect to such Signatory Company and such termination shall not constitute
a termination of this Plan with respect to any other Signatory Company. This
Plan shall terminate as to a Signatory Company upon the happening of any of the
following events:
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(a) The approval of the Administrative Committee of
a written request by such Signatory Company to terminate
the Plan;
(b) Adjudication of the Signatory Company as a "debtor"
under the Bankruptcy Act of 1978 or general assignment by the Signatory
Company to or for the benefit of creditors or dissolution of the
Signatory Company; and/or
(c) Twenty-one (21) years following the death of the last
surviving original Member living at the time this Plan was adopted by
the Signatory Company; provided, however, that this Section 16.3(c)
shall be effective only in the event that the Rule Against Perpetuities
is applicable to the Trust established under this Plan.
Upon termination of this Plan by any Signatory Company without establishment of
a successor plan, the Administrative Committee and the Trust will continue until
the Plan benefit of each Member has been distributed in accordance with the
provisions of this Plan, which shall remain in effect notwithstanding the
termination of the Plan. Plan benefits shall be computed and, if necessary, the
Trust Fund shall be partially or totally converted to a liquid posture to permit
an efficient and equitable distribution. The Signatory Company may give written
notice to the District Director of the Internal Revenue Service of the fact that
the Signatory Company has terminated or partially terminated the Plan.
Upon termination of the Plan, a Member who is partially vested in his
Account as of such Plan termination shall immediately be fully vested in
accordance with the provisions of Article VII, Section 7.8 of the Plan.
Distributions made on account of Plan termination shall be in accordance with
the provisions of Article IX of the Plan and in compliance with any applicable
requirements of the Code or other statutory or regulatory agency.
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16.4 Continuation of Plan and Trust by Successor. This Trust shall
not be considered terminated upon the dissolution or liquidation of a Signatory
Company in the event that a successor to the Signatory Company, by operation of
law or by the acquisition of its business interests, shall elect to continue
this Plan and Trust as provided in Article XVII hereof.
ARTICLE XVII.
Continuance of Plan by Successor
17.1 Adoption of Plan by Successor. In the event of the
consolidation or merger of any Signatory Company or the sale by any Signatory
Company of its assets, the resulting successor person or persons, firm,
partnership or corporation may continue the Plan by direction from such person,
persons, firm or partnership (if not a corporation); or (if a corporation) by
adopting the same by resolution of its Board of Directors and by executing a
proper supplemental Trust Agreement with the Trustee. If, within ninety (90)
days from the effective date of such consolidation, merger or sale of assets,
such successor neither adopts this Plan as provided herein nor adopts a
successor plan for the benefit of the employees of the Signatory Company, then
the Plan automatically shall be terminated and the Trust Fund shall be
distributed exclusively to the Members or their Beneficiaries in the manner
provided in Article XVI, Section 16.3.
ARTICLE XVIII.
Merger of Plan or Transfer of Plan Assets
18.1 Transfer, Consolidation or Merger with Another Plan. In the
event of (1) a merger or consolidation of the Plan with any
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other plan or (2) a transfer of assets and liabilities of the Plan to any other
plan, then, if the Plan was then terminated, (a) each Member of the Plan will be
entitled to receive a benefit immediately after such merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before such merger, consolidation or transfer
had the Plan then terminated and (b) the provisions comparable to the sections
set forth in Article XVI, Section 16.1 of this Plan shall continue to remain in
effect as to the assets from this Plan.
This Section 18.1 is intended to comply with the requirements of
Section 401(a)(12) of the Code and does not entitle any Member to a distribution
prior to the time set forth in Article VII.
ARTICLE XIX.
Adoption of Plan by a Signatory Company
19.1 Method of Adoption. Any Affiliated Company (or other business
organization) except those with a manual or other payroll system which is
incompatible with the Corporation's or otherwise (in the determination of the
Administrative Committee) incapable of making the computations and accountings
necessary to administer the Plan may, with the approval of the Corporation,
adopt this Plan for all or any classification of its Employees, as permitted by
Section 401(a) of the Code, in the manner set forth under procedures established
by the Administrative Committee and approved by the Trustee and the Employer.
This Plan may be so adopted on or before the end of any Plan Year and any
adoption instrument executed by any such Signatory Company shall become, as to
it and its Employees, a part of this Plan.
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19.2 Withdrawal from the Plan. Subject to the consent of the
Corporation, any Signatory Company may at any time withdraw from or discontinue
its participation in this Plan either by failure to ratify an amendment as
provided in Article XVI, Section 16.1 or by giving written notice of such
withdrawal to the Trustee, and may cause to be segregated from the Trust Fund
that part of the assets held in the Trust Fund for the Accounts of the Members
employed by such Signatory Company at the date of such discontinuance. A
withdrawal, whether or not voluntary, from this Plan by a Signatory Company
shall not of itself constitute a termination of the Plan with respect to such
Signatory Company. A Signatory Company which withdraws, voluntarily or
involuntarily, from this Plan shall, as soon as may be practicable, adopt a
comparable employee benefit plan and trust which shall qualify under Section
401(a) of the Code. The withdrawing Signatory Company shall then file with the
Trustee a written instrument evidencing its discontinuance in this Plan and
shall likewise file with the Trustee a certification by the Administrative
Committee authorizing the segregation from the Trust Fund of the assets
attributable to the Members employed by such Signatory Company. In the event of
segregation as hereinabove provided, the Trustee shall deliver to the successor
Trustee such part of the Trust Fund as may be determined by the Administrative
Committee to constitute the appropriate share of the Trust Fund then held with
respect to the Members employed by such Signatory Company. Such former Signatory
Company will thereafter exercise with respect to such Plan and Trust all of the
rights and powers which may be reserved to such Signatory Company under the
terms of
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the written instruments providing for such segregation as aforesaid. Such
segregating Signatory Company shall likewise file with the successor Trustee
such other written instruments as may be necessary in order to make effective
the continuance as a separate trust (as though such Signatory Company were the
sole creator thereof) of the assets so segregated in accordance with the
provisions of this Plan or in accordance with such other plan as may be mutually
agreed upon between such Signatory Company and a successor Trustee.
ARTICLE XX.
Recovery of Employer Contributions
20.1 Initial Approval By Internal Revenue Service. Notwithstanding
any other provision of this Plan and Trust document, it is specifically
understood that this Plan and Trust document is adopted and executed by the
Signatory Company upon the condition precedent that the Plan and Trust shall be
approved and qualified by the Internal Revenue Service as meeting the
requirements of the Code and the regulations and rulings issued thereunder with
respect to employee stock ownership plans and trusts so that the Signatory
Company will be permitted to deduct for federal income tax purposes the amount
of its Employer Contributions to the Trust under the Plan, that such Employer
Contributions will not be taxable to the Members as income when made and that
the Trust will be exempt from federal income tax. In the event the Internal
Revenue Service shall rule that the Plan and Trust are not so approved and
qualified, all Employer Contributions made to the Trust under the Plan by a
Signatory Company prior to the initial determination by
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the Internal Revenue Service as to the qualification of the Plan and Trust shall
revert and be repaid by the Trustee to the Signatory Company. No Member,
Employee or other person shall have any right to the Employer Contributions. If
the Corporation shall determine, however, in consultation with the
Commissioner's representatives, that such failure of qualification may be cured
by steps that the Corporation deems will be in the interest of it and its
Employees, the Corporation may elect to amend the Plan and/or Trust in order to
achieve such qualification rather than cause the reversion of Employer
Contributions as herein provided.
20.2 Employer Contributions Conditioned Upon Deductibility. In
the event that the Corporation, its attorneys, accountants, or other
professionals, or the Internal Revenue Service determines that all or part of
the Employer Contributions made by a Signatory Company for any Plan Year (after
initial approval from the Internal Revenue Service is obtained) are not
deductible under the Code and regulations then applicable, then, to the extent
such Employer Contribution is determined to be nondeductible it shall revert and
be repaid by the Trustee to the Signatory Company by which paid. No Member,
Employee or other person shall have any right to such nondeductible Employer
Contribution.
20.3 Limitations. In the event of the return of any Employer
Contributions to the contributing Employer for any reason permitted under law as
authorized by this Plan, the amount to be so returned shall not include any
income or other earnings while held in the Trust, and such amount to be so
returned shall not be reduced by any losses attributable to such amount while
held in the Trust.
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ARTICLE XXI.
Miscellaneous
21.1 Plan is a Voluntary Undertaking by the Signatory Company. The
adoption and maintenance of this Plan and Trust are strictly voluntary
undertakings on the part of the Signatory Company and shall not be deemed to be
a contract between the Signatory Company and any Employee. Nothing contained
herein shall be deemed to give any Employee the right to be retained in the
employment of the Signatory Company, to interfere with the rights of the
Signatory Company to discharge any Employee at any time or to interfere with an
Employee's right to terminate his employment at any time.
21.2 Benefit Provided Solely by the Trust Fund. All benefits
payable under this Plan shall be paid or provided for solely from the Trust and
the Signatory Company assumes no liability or responsibility therefor.
21.3 Nonalienation. No benefit payable or to become payable under
the Plan will, except as otherwise specifically provided by law, be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt so to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same by a Member or Beneficiary
prior to distribution as herein provided shall be absolutely and wholly void,
whether such conveyance, transfer, assignment, mortgage, pledge or encumbrance
be intended to take place or become effective before or after the expiration of
the period herein fixed for the continuance of the said Trust estate; nor will
any benefit be in any manner liable for or subject to the debts, contracts,
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liabilities, engagements or torts of the person entitled thereto. The Trustee
shall never under any circumstances be required to recognize any conveyance,
transfer, assignment, mortgage or pledge by a Member or Beneficiary hereunder of
any part of the Trust estate or any interest therein, and shall never be
required to pay any money or thing of value thereon or therefor, to any creditor
of a Member or Beneficiary or upon any debt created by a Member or Beneficiary
for any cause whatsoever. Pursuant to the Texas Trust Statute (as cited in
Article XIV, Section 14.3(q)), it is hereby declared that the interest of any
Member or Beneficiary of the Plan and the Trust shall be held subject to a
"spendthrift trust" and, as such, shall be deemed to be and shall be treated as
a spendthrift trust under Texas law. The Trustee shall not make any transfer
which would result in the disqualification of the Plan for income tax purposes
under Section 401(a)(13) of the Code. Any such transfer or attempt of such
transfer shall be void.
For purposes of this Section 21.3, a loan made to a Member or
Beneficiary pursuant to Article XV hereof shall not be treated as an assignment
or alienation if such loan is secured by the Member's vested interest in the
amount standing as a credit to his Account and is exempt from the tax imposed by
Section 4975 (relating to tax on prohibited transactions) of the Code, as
amended by the Act. This provision shall not apply to a "qualified domestic
relations order" defined in Section 414(p) of the Code, and those other domestic
relations orders permitted to be so treated by the Administrative Committee
under the provisions of the Retirement Equity Act of 1984. The Administrative
Committee shall establish
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a written procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders. Further, to
the extent provided under a "qualified domestic relations order," a former
spouse of a Member shall be treated as the spouse or surviving spouse for all
purposes under the Plan.
21.4 Applicable Law. The provisions of this Plan shall be
construed, administered and enforced according to the Code, as amended, the Act,
and, to the extent applicable, the laws of the State of Texas. All contributions
to and distributions from the Trust shall be deemed to take place in the State
of Texas. The Trustee or Signatory Company may at any time initiate any legal
action or proceeding for the settlement of the accounts of the Trustee, for the
determination of any questions (including questions of construction which may
arise) or for instruction, and the only necessary parties to such action or
proceeding shall be the Trustee and the Signatory Company, except that any other
person or persons may be included as parties defendant at the elections of the
Trustee and the Signatory Company.
21.5 Construction. Unless the context clearly indicates to the
contrary, the masculine gender shall include the feminine and neuter, and the
singular shall include the plural. The words "hereof", "herein", hereunder" and
other similar compounds of the word "here" shall mean and refer to the entire
Plan and not to any particular provision or section.
21.6 Reference to Code or Act Sections. Reference to the
provisions of any particular Section of the Code or Act shall be
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deemed reference to any Section of the Code or Act which may hereafter contain
the same or similar provisions.
21.7 Binding Agreement. This Plan shall be binding upon the
adopting Signatory Companies, the Trustee and their respective successors and
assigns, and upon the Members, their Beneficiaries and their respective heirs
and legal representatives.
21.8 No Joint Venture Implied. The adoption of this Plan by any
Signatory Company shall not create a joint venture or partnership relationship
between it and any other party hereto, nor shall such action ever be construed
as having that effect. Any rights, duties, liabilities or obligations assumed
hereunder by each participating Signatory Company, or imposed upon it as a
result of the terms and provisions of this Plan, shall relate to and affect such
Signatory Company alone.
21.9 Copies of Plan Available. Copies of this Plan and any and all
amendments thereto shall be made available for inspection at all reasonable
times at the principal office of the Signatory Company to all Employees, and any
Employee may obtain a copy of them upon request and the payment of a reasonable
reproduction fee.
21.10 Titles and Headings. The titles to and headings of paragraphs
in this Plan are for convenience and reference only and, in the event of any
conflict, the text of this Plan and Trust, rather than such titles or headings,
shall control.
21.11 Counterparts. This Plan and all amendments thereto may be
executed in any number of counterparts, each of which shall be deemed an
original, and said counterparts shall constitute but one
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and the same instrument which may be sufficiently evidenced by any
one counterpart.
21.12 Severability. If any provision of this Plan and Trust shall
be held illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining provisions hereof, but each provision shall be fully
severable and the Plan and Trust shall be construed and enforced as if said
illegal or invalid provision had never been inserted herein.
21.13 Agent for Service of Legal Process. The President of the
Corporation is hereby designated as agent of the Plan for the service of legal
process. Such designated agent may be changed from time to time by action of
the Board of Directors of the Corporation in writing, and such changes shall
become effective upon notification of the U.S. Secretary of Labor.
21.14 Withholding; Reports. Notwithstanding any provision of the
Plan to the contrary, the Administrative Committee shall withhold Federal income
tax from all distributions from the Trust Fund to any Distributee in accordance
with Section 3405 of the Code unless such Distributee elects to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the Distributee in a direct rollover as provided for in
Article IX, Section 9.11.
21.15 Single Plan. The Plan shall be administered, accounted for
and otherwise treated as a single plan with respect to all the Signatory
Companies that adopt this Plan.
21.16 Acceptance. The Trustee hereby accepts this Trust, and
agrees to hold the Trust assets existing on the date of this
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document and all additions and accretions thereto, subject to all the terms and
conditions of this document.
IN WITNESS WHEREOF, the Corporation and the Trustee have caused this
Sixth Amendment and Restatement to be executed on this 15th day of April, 1996,
to be effective as of the 1st day of June, 1989.
TEAM, INC.
By: /s/ WILLIAM A. RYAN
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William A. Ryan, President
TRUSTEE:
Texas Commerce Bank,
National Association
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Vice President and Trust Officer
THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared
William A. Ryan, known to me to be the person whose name is subscribed to the
foregoing instrument as President of Team, Inc., and acknowledged to me that he
executed the same for the purposes and consideration therein expressed and in
the capacity therein stated, as the act and deed of said Corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 15th day of April,
1996.
/s/ RENEE PIERCE
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NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
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THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared
____________________, known to me to be the person whose name is subscribed to
the foregoing instrument as Vice President and Trust Officer of Texas Commerce
Bank, National Association, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of
_______________, 1996.
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NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
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