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Exhibit No. 10.3
NINTH AMENDMENT AND RESTATEMENT OF THE
TEAM, INC.
SALARY DEFERRAL PLAN AND TRUST
ORIGINAL EFFECTIVE DATE OF THE PLAN:
October 1, 1984
GENERAL EFFECTIVE DATE
OF THE
NINTH AMENDMENT AND RESTATEMENT OF THE PLAN:
January 1, 1989
PLAN YEAR END:
December 31st
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NINTH AMENDMENT AND RESTATEMENT OF THE
TEAM, INC.
SALARY DEFERRAL PLAN AND TRUST
TABLE OF CONTENTS
ARTICLE I. Definitions......................................... 2
1.1 "Account"........................................... 2
1.2 "Act"............................................... 2
1.3 "Actual Contribution Percentage".................... 2
1.4 "Actual Deferral Percentage"........................ 3
1.5 "Administrative Committee".......................... 5
1.6 "Affiliated Company" or "Affiliated
Companies".......................................... 6
1.7 "Aggregate Account"................................. 6
1.8 "Annual Additions".................................. 6
1.9 "Authorized Leave of Absence"....................... 7
1.10 "Beneficiary" or "Beneficiaries".................... 7
1.11 "Break-in-Service".................................. 7
1.12 "Code".............................................. 9
1.13 "Considered Compensation"........................... 9
1.14 "Deferral Contribution"............................. 12
1.15 "Determination Date"................................ 12
1.16 "Effective Date".................................... 12
1.17 "Eligible Employee"................................. 12
1.18 "Employee".......................................... 12
1.19 "Employer".......................................... 12
1.20 "Employer Matching Contribution" and
"Employer Contribution"............................. 13
1.21 "Employer Real Property"............................ 13
1.22 "Employer Stock".................................... 13
1.23 "Entry Dates"....................................... 13
1.24 "Excess Aggregate Contributions".................... 13
1.25 "Excess Contributions".............................. 14
1.26 "Family Member,".................................... 14
1.27 "Forfeiture"........................................ 14
1.28 "Highly Compensated Eligible Employee".............. 14
1.29 "Hour of Service"................................... 17
1.30 "Key Employee"...................................... 18
1.31 "Marketable Obligation"............................. 19
1.32 "Member" or "Members"............................... 20
1.33 "Net Income"........................................ 20
1.34 "Non-Key Employee".................................. 20
1.35 "Plan".............................................. 21
1.36 "Plan Year"......................................... 21
1.37 "Qualified Nonelective Contributions"............... 21
1.38 "Qualifying Employer Security"...................... 21
1.39 "Retired Member".................................... 21
1.40 "Signatory Company" or "Signatory
Companies".......................................... 21
1.41 "Total Permanent Disability"........................ 21
1.42 "Transferred"....................................... 22
1.43 "Trust"............................................. 22
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1.44 "Trust Fund"........................................ 22
1.45 "Trustee" or "Trustees"............................. 22
1.46 "Year of Service"................................... 22
ARTICLE II. Employees Entitled to Participate................... 23
2.1 Eligibility to Participate.......................... 23
2.2 Participation Status................................ 24
2.3 Participation and Service Upon Reemployment......... 25
2.4 Full Participation.................................. 26
2.5 Transferred Employee................................ 26
2.6 Certification....................................... 27
2.7 Notice to Employees................................. 27
ARTICLE III. Contributions....................................... 27
3.1 Deferral Contributions.............................. 27
3.2 Employer Matching Contributions and Employer
Contributions....................................... 29
3.3 Actual Deferral Percentage Test..................... 31
3.4 Time of Payment..................................... 35
3.5 Administrative Committee to Prescribe Rules
Governing Deferral Contributions.................... 36
3.6 Prohibition Against Reversion....................... 36
3.7 Excess Deferral Contributions....................... 36
3.8 Actual Contribution Percentage Test................. 38
3.9 Affiliated Companies................................ 40
ARTICLE IV. Allocation to Accounts.............................. 42
4.1 Certification by the Signatory Company.............. 42
4.2 Separate Account Maintained for Each Member......... 42
4.3 Allocation of Deferral Contribution to
Members' Accounts................................... 42
4.4 Allocation of Employer Matching
Contributions, Employer Contributions to
Members' Accounts................................... 43
4.5 Daily Allocation of Trust Fund Income............... 44
4.6 Daily Valuation of Trust Fund....................... 45
4.7 Special Allocation Upon Termination, Partial
Termination, or Complete Discontinuance of
Employer Matching Contributions or Employer
Contributions....................................... 45
4.8 Entry of Adjustments to Each Member's
Account............................................. 46
4.9 Accounts for Transferred Members.................... 46
4.10 Rights in Trust Assets.............................. 47
4.11 Application of Forfeitures.......................... 47
ARTICLE V. Limitations on Annual Additions..................... 47
5.1 Limitation Under this Plan.......................... 47
5.2 Limitation in Event of Member's Participation
in Defined Benefit Plan and Defined
Contribution Plan................................... 48
5.3 Disposition of Excessive Annual Additions........... 49
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5.4 Combining of Plans.................................. 50
5.5 Transition Fraction................................. 51
5.6 Right of Reversion.................................. 51
ARTICLE VI. Retirement and Designation of Beneficiary........... 52
6.1 Normal Retirement Date.............................. 52
6.2 Designation of Beneficiary.......................... 52
ARTICLE VII. Vesting of Members' Interests....................... 54
7.1 Vesting............................................. 54
7.2 Death............................................... 55
7.3 Retirement.......................................... 55
7.4 Disability.......................................... 56
7.5 Termination of Employment........................... 57
7.6 Disposition of Unvested Amounts..................... 59
7.7 Hardship Distribution............................... 60
ARTICLE VIII. Claims for Plan Benefits............................ 61
8.1 Application for Benefits............................ 61
8.2 Processing of Claim................................. 62
8.3 Notification to Claimant of Decision................ 63
8.4 Review Procedure.................................... 63
8.5 Decision on Review.................................. 64
8.6 Disputed Benefits................................... 64
ARTICLE IX. Distributions from Trust Funds...................... 65
9.1 Occasions for Distributions......................... 65
9.2 Consent to Distribution; Special Rules Upon
Reemployment........................................ 65
9.3 Manner of Distributions............................. 67
9.4 Time of Distributions............................... 68
9.5 Mandatory Distributions............................. 68
9.6 Distribution to Minors or Persons under
Disability.......................................... 69
9.7 Community Property Interests - Interest of
Spouse of Member in the Event of Divorce............ 70
9.8 Incorporation of Revenue Procedure 93-12
Model Amendment..................................... 71
ARTICLE X. Top Heavy Provisions................................ 73
10.1 Determination of Top Heavy Plan Status.............. 73
10.2 Determination of Super Top Heavy Plan Status........ 73
10.3 Aggregate Accounts.................................. 74
10.4 Aggregation Group................................... 74
10.5 Top Heavy Plan Requirements......................... 75
10.6 Allocations to Non-Key Employees.................... 76
ARTICLE XI. Other Qualified Plans............................... 78
11.1 Transfers from Other Qualified Plans................ 78
11.2 Transfers to Other Qualified Plans.................. 78
ARTICLE XII. Administrative Committee............................ 79
12.1 Appointment, Resignation and Removal................ 79
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12.2 Rights, Powers and Authority........................ 79
12.3 Administration...................................... 80
12.4 Annual Audit of Plan................................ 81
12.5 Chairman and Secretary.............................. 82
12.6 Quorum and Voting Majority.......................... 82
12.7 Limitation on Voting................................ 83
12.8 Delegation of Rights, Powers and Duties............. 83
12.9 Liability........................................... 83
12.10 Compensation and Expense............................ 84
12.11 Bonds............................................... 84
12.12 Indemnity........................................... 85
12.13 Reporting and Disclosure............................ 85
12.14 Quarterly Statement to Members...................... 86
12.15 Signatory Company to Supply Information............. 86
ARTICLE XIII. Trustee............................................. 87
13.1 Acceptance and Holding of Funds..................... 87
13.2 Responsibility for Actions.......................... 87
13.3 Resolutions of Board of Directors................... 88
13.4 Judicial Protection................................. 89
13.5 Dealings with Third Parties......................... 89
13.6 Annual Accounting by Trustee........................ 90
13.7 Preparation of Quarterly Statement to
Members............................................. 91
13.8 Resignation of Trustee.............................. 91
13.9 Removal of Trustee.................................. 91
13.10 Appointment of Successor Trustee.................... 91
13.11 Trustee's Compensation and Expenses................. 92
13.12 Bonds............................................... 93
13.13 Indemnity........................................... 94
ARTICLE XIV. Investment Powers of Trustee........................ 94
14.1 Standards; Prudent Man Rule......................... 94
14.2 Powers of Trustee................................... 95
14.3 Prohibited Transactions............................. 98
14.4 Investment of Contributions......................... 99
14.5 Investment Manager.................................. 100
ARTICLE XV. Loans to Members.................................... 101
15.1 Application and Limitation.......................... 101
15.2 Purposes of Loans................................... 103
15.3 Terms............................................... 103
15.4 Home Loans.......................................... 105
15.5 Recourse; Prohibition Against Distributions
While Loan Outstanding.............................. 105
15.6 Treatment of Loan Proceeds.......................... 106
15.7 Effect on Right to Participate in Plan.............. 106
15.8 Minimum Loan Amounts................................ 106
ARTICLE XVI. Amendment and Termination........................... 106
16.1 Amendment - General................................. 106
16.2 Amendments Necessary to Comply with
Intentions of Signatory Companies................... 108
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16.3 Termination with Respect to Signatory Company
Without Establishment of a Successor Plan........... 108
16.4 Continuation of Plan and Trust by Successor......... 110
ARTICLE XVII. Continuance of Plan by Successor.................... 110
17.1 Adoption of Plan by Successor....................... 110
ARTICLE XVIII. Merger of Plan or Transfer of Plan Assets........... 111
18.1 Transfer, Consolidation or Merger with
Another Plan................................... 111
ARTICLE XIX. Adoption of Plan by a Signatory Company............. 111
19.1 Method of Adoption.................................. 111
19.2 Withdrawal from the Plan............................ 112
ARTICLE XX. Recovery of Employer Contributions.................. 113
20.1 Initial Approval By Internal Revenue Service........ 113
20.2 Conditioned on Deductibility........................ 114
20.3 Limitations......................................... 115
ARTICLE XXI. Miscellaneous....................................... 115
21.1 Plan is a Voluntary Undertaking by the
Signatory Company................................... 115
21.2 Benefit Provided Solely by the Trust Fund........... 115
21.3 Nonalienation....................................... 115
21.4 Applicable Law...................................... 117
21.5 Construction........................................ 117
21.6 Reference to Code or Act Sections................... 117
21.7 Binding Agreement................................... 118
21.8 No Joint Venture Implied............................ 118
21.9 Copies of Plan Available............................ 118
21.10 Titles and Headings................................. 118
21.11 Counterparts........................................ 118
21.13 Agent for Service of Legal Process.................. 119
21.14 Withholding; Reports................................ 119
21.15 Single Plan......................................... 120
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NINTH AMENDMENT AND RESTATEMENT OF THE
TEAM, INC.
SALARY DEFERRAL PLAN AND TRUST
THIS NINTH AMENDMENT AND RESTATEMENT of the Salary Deferral Plan and
Trust (hereinafter sometimes called the "Plan" and "Trust") is made this 15th
day of April, 1996, to be effective (except as otherwise indicated) as of
the 1st day of January 1989, by and between Team, Inc., (hereinafter sometimes
called the "Corporation") of Alvin, Texas and Clark A. Ingram (hereinafter
sometimes collectively called "Trustee") of Houston, Texas.
W I T N E S S E T H:
WHEREAS, on August 21, 1984 the Corporation previously adopted the Plan
and Trust for the sole and exclusive benefit of its Employees and their
Beneficiaries, effective October 1, 1984; and
WHEREAS, the Plan was previously amended and restated on October 22,
1985, effective October 1, 1984 and subsequently amended on March 19, 1987,
effective October 1, 1984; and amended March 9, 1988 effective January 1, 1988;
and amended May 30, 1989 effective May 31, 1989; and amended March 26, 1991
effective January 1, 1989; and amended October 10, 1991 effective October 1,
1991; and amended January 2, 1994, effective January 1, 1993; and amended and
restated on November 18, 1994, effective January 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
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Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended
(including UCA '92 and OBRA '93); and
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 ledger account
showing such Member's interest in the Trust Fund.
1.2 "Act" means the Employee Retirement Income Security Act of 1974,
as amended.
1.3 "Actual Contribution Percentage" means, with respect to a specified
group of Eligible Employees, the average of the ratios (expressed as a
percentage, rounded to the nearest one-hundredth percent) calculated separately
for each Eligible Employee in such group of:
(a) the sum of the following contributions paid
under the Plan on behalf of each such Eligible Employee
for such Plan Year;
(i) Employer Matching Contributions or any
other matching contributions that are not Qualified
Nonelective Contributions;
(ii) any after-tax employee contributions
(including any Excess Contributions that are
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recharacterized pursuant to the provisions of
Article III, Section 3.3(2) of the Plan);
(iii) Qualified Nonelective Contributions
specifically designated for this purpose; and
(iv) Deferral Contributions specifically
designated for this purpose;
to
(b) the Eligible Employee's Considered Compensation
for such Plan Year.
For purposes of subsection (a)(i) above, "matching contribution" shall mean (I)
any Employer contribution made to the Plan on behalf of an Eligible Employee on
account of an after-tax employee contribution made by such employee, (II) any
Employer contribution made to the Plan on behalf of an Eligible Employee on
account of such Employee's Deferral Contribution, and (III) any forfeitures
allocated on the basis of after-tax employee contributions, Deferral
Contributions or matching contributions.
With respect to any Highly Compensated Eligible Employee who is
eligible to participate in two or more plans of the Corporation or an Affiliated
Company to which matching contributions, employee contributions or both are
made, all such contributions on behalf of such Highly Compensated Eligible
Employee must be aggregated for purposes of determining such Employee's Actual
Contribution Percentage.
1.4 "Actual Deferral Percentage" means, with respect to a specified
group of Eligible Employees for each Plan Year, the average of the ratios
(expressed as a percentage, rounded off to the nearest one-hundredth percent)
calculated separately for each Eligible Employee in such group of:
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(a) the amount of Deferral Contributions (including any Excess
Deferrals as defined in Article III, Section 3.7 of the Plan and paid
under the Plan), and any Qualified Nonelective Contributions on behalf
of each such Eligible Employee for such Plan Year;
to
(b) the Eligible Employee's Considered Compensation
for such Plan Year.
With respect to any Highly Compensated Eligible Employee who participates in two
or more cash or deferred arrangements of the Corporation or Affiliated Company,
this ratio shall be calculated by treating all such cash or deferred
arrangements as one cash or deferred arrangement. The actual deferral ratio of
an Eligible Employee, with respect to whom neither a Deferral Contribution nor a
Qualified Nonelective Contribution is made, is zero.
For the purpose of determining the Actual Deferral Percentage of a
Highly Compensated Eligible Employee who is subject to the family aggregation
rules of Code Section 414(q)(6) because such Member is either a "five percent
owner" of the Corporation or one of the ten (10) Highly Compensated Eligible
Employees paid the greatest amount of compensation (as defined under Code
Section 415) during the Plan Year, the following shall apply:
(1) The combined Actual Deferral Percentage for the family
group (which shall be treated as one Highly Compensated Eligible
Employee) shall be the Actual Deferral Percentage determined by
aggregating elective contributions, compensation (as defined in Code
Section 414(s)), and amounts treated as elective contributions of all
Family Members. However, in applying the $200,000 limit to compensation
(as defined in Code Section 414(s)) through the Plan Year ending
December 31, 1993, and $150,000 limit to compensation (as defined in
Code Section 414(s)) for the Plan Year beginning January 1, 1994,
Family Members shall include only the affected Employee's spouse and
any lineal descendants who have not attained age nineteen (19) before
the close of the Plan Year.
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(2) Elective contributions, compensation (as defined in Code
Section 414(s)), and amounts treated as elective contributions of all
Family Members shall be disregarded for purposes of determining the
Actual Deferral Percentage of the non-Highly Compensated Eligible
Employee group except to the extent taken into account in paragraph (1)
above.
(3) If an employee is required to be aggregated as a member of
more than one family group in a plan, all Eligible Employees who are
members of those family groups that include the employee are aggregated
as one family group in accordance with paragraphs (1) and (2) above.
(4) Except as provided in paragraph (1) above, "Family Member"
means, with respect to an affected Member, such Member's spouse, such
Member's lineal descendants and ascendants and their spouses, as
described in Code Section 414(q)(6)(B).
Paragraphs (1) through (4) above shall be administered in
accordance with Prop. Reg. Section 1.401(k)-1(g)(8)(iii) or its successor.
Qualified Nonelective Contributions and Employer Matching Contributions
may be treated as Deferral Contributions for purposes of determining a Member's
Actual Deferral Percentage only if such Qualified Nonelective Contributions and
Employer Matching Contributions (1) are nonforfeitable when made, and (2) are
subject to the same distribution restrictions that apply to Deferral
Contributions, without regard to whether they are actually taken into account as
Deferral Contributions for such purpose. Qualified Nonelective Contributions
and/or Employer Matching Contributions may be treated as Deferral Contributions
only if the conditions described in Prop. Reg. Section 1.401(k)-1(b)(3) or its
successor are satisfied.
1.5 "Administrative Committee" means the committee appointed
by the Corporation to administer the Plan.
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1.6 "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).
1.7 "Aggregate Account" means, with respect to each Member, the value
of the Account maintained on behalf of such Member, including all amounts
attributable to Deferral Contributions, Employer Contributions, Employer
Matching Contributions and any after-tax employee contributions.
1.8 "Annual Additions" means the sum credited to a Member's Account for
any "limitation year" of (1) Employer contributions, (2) employee contributions
as determined under Sections 415(c)(2), 415(1) and 419A(d)(2) of the Code, (3)
Forfeitures, if any, (4) amounts allocated, after March 31, 1984, to an
individual medical account as defined in Section 415(l)(1) of the Code which is
part of a pension or annuity plan maintained by the Employer and (5) 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)
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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.
1.9 "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;
(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 Com pany) 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 rein
statement in the employment of the Signatory Company.
1.10 "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.
1.11 "Break-in-Service" with respect to an Employee means any Plan Year
during which such Employee completes five hundred (500)
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or fewer Hours of Service. 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 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
therefor 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 foregoing, the severance from service date of an
employee who is absent from service beyond the first
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anniversary of the first date of absence by reason of a maternity or paternity
absence described in Section 410(a)(5)(E)(i) or Section 411(a)(6)(E)(i) of the
Code is the second anniversary of the first date of such absence. The period
between the first and second anniversaries of the first date of absence from
work is neither a period of service nor a period of severance.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
1.13 "Considered Compensation" means, as to each Eligible Employee, all
compensation paid or accrued to him after he has become 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,
commissions, discretionary bonuses and Deferral Contributions, but excluding any
Employer Contributions or any Employer Matching Contributions under this Plan
and other contingent compensation. For Plan Years beginning on or after January
1, 1990 (or a later date permitted by Treasury regulations) for purposes of
calculating the Actual Deferral Percentage and Actual Contribution Percentage,
Considered Compensation shall be taken into account for the entire Plan Year of
each Eligible Employee without regard to whether that Employee was eligible to
participate in the Plan for the entire Plan Year.
Considered Compensation shall not include the following:
(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;
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(b) Amounts realized from the exercise of a non qualified
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
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
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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 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
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Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.14 "Deferral Contribution" means the amount each Member elects to
have the Signatory Company pay to the Trustee on behalf of such Member pursuant
to Article III, Section 3.1 of this Plan.
1.15 "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.
1.16 "Effective Date" of this Plan means October 1, 1984. The effective
date of this Fifth Amendment and Restatement is January 1, 1989, except as
otherwise set forth in Appendix A hereto.
1.17 "Eligible Employee" means an Employee other than a laborer who has
satisfied the service requirement of Article II, Section 2.1 and attained his
Entry Date. Laborers shall not be eligible to participate in the Plan.
1.18 "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.
1.19 "Employer" means the Corporation and any Signatory Company or
Affiliated Company, and shall include 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 1.6 above) or an
affiliated service group as determined under Section 414(m) of the Code, and
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any other entity required to be aggregated pursuant to the regulations under
Section 414(o) of the Code.
1.20 "Employer Matching Contribution" and "Employer Contribution" means
the amount contributed (if any) by the respective Signatory Companies on behalf
of each Member which is equal to a percentage of such Member's Deferral
Contribution and Considered Compensation, respectively. Any Employer Matching
Contribution or Employer Contribution intended to qualify under Section 401(k)
of the Code and intended to be included in the calculation of the Actual
Deferral Percentage shall also be designated as a Qualified Nonelective
Contribution.
1.21 "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.
1.22 "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.
1.23 "Entry Dates" for each Plan Year are January 1, April 1, July 1,
and October 1 of such Plan Year.
1.24 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of:
(a) the aggregate amount of the after-tax employee
contributions and Employer Matching Contributions that are not
designated as Qualified Nonelective Contributions (and any qualified
nonelective contribution or elective contribution such as a Deferral
Contribution which are taken into account in computing the Actual
Contribution Percentage) actually made on behalf of Highly Compensated
Eligible Employees for such Plan Year, over
(b) the maximum amount of contributions permitted
under the Actual Contribution Percentage Test for such
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Plan Year, as determined under the provisions of Article III, Section
3.8 hereof.
1.25 "Excess Contributions" means, with respect to any Plan Year, the
excess of:
(a) the sum of the Deferral Contributions and Qualified
Nonelective Contributions made on behalf of Highly Compensated Eligible
Employees for such Plan year, over
(b) the maximum amount of contributions permitted under the
Actual Deferral Percentage test for such Plan Year, as determined under
the provisions of Article III, Section 3.3 hereof.
1.26 "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).
1.27 "Forfeiture" means the nonvested balance of an Employee's Account
which is forfeited in accordance with Article VII, Section 7.6 of the Plan
because of termination from employment prior to full vesting.
1.28 "Highly Compensated Eligible Employee" means an Eligible Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) during the "determination year" or "look- back year" was a
five-percent owner of the Employer, as defined in Section 416 of the
Code and the regulations issued thereunder;
(b) received compensation during the "look-back year" from the
Employer in excess of $75,000 (or such other amount in effect under
Section 414(q)(1)(B) of the Code);
(c) received compensation during the "look-back year" from the
Employer in excess of $50,000 (or such other amount in effect under
Section 414(q)(1)(C) of the Code) and was in the top-paid group of
employees for such Plan Year. An Employee is in the "top-paid group" of
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employees for any Plan Year if such Employee is in the group consisting
of the top twenty percent (20%) of Employees when ranked on the basis
of compensation paid during such Plan Year. For purposes of determining
the "top-paid group" of Employees for any Plan Year, Section 414(q)(8)
of the Code and Q & A 9(b) of Treas. Reg. Section 1.414(q)-IT shall
apply to exclude certain employees; or
(d) was during the "look-back year" an officer of the Employer
(as defined in Section 416 of the Code and the regulations issued
thereunder) and received compensation greater than fifty percent (50%)
of the amount in effect under Section 415(b)(1)(A) for such Plan Year.
Notwithstanding the preceding sentence, for purposes of this subsection
(d) the following rules shall apply:
(1) the number of officers taken into account for
any year shall not exceed the lesser of
(A) fifty (50) employees; or
(B) the greater of three (3)
employees or ten percent (10%) of
employees; and
(2) if no officer of the Employer received
compensation greater than one hundred fifty percent (150%) of
the amount in effect under Section 415(c)(1)(A) of the Code
for such Plan Year, then the highest paid officer of the
Employer shall be treated as having received such amount of
compensation.
(e) were in the group consisting of the one hundred (100)
Eligible Employees paid the greatest compensation during the
"determination year" and were also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look- back year" as discussed below.
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding
twelve-month period or (if the Employer elects pursuant to Q & A 14 of Treas.
Reg. Section 1.414(q)-IT) the calendar ending with or within the determination
year. For
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purposes of this Section 1.28, "compensation" shall be defined under Section
414(q)(7) of the Code and the regulations thereunder.
There will be attributed to any five percent (5%) owner or any of the
ten (10) most highly compensated Eligible Employees any compensation paid to,
contributions made by or on behalf of, or benefits provided for any family
member of such five percent (5%) owner or highly compensated Eligible Employee,
pursuant to Section 414(q)(6) of the Code and the regulations thereunder.
"Family Member" for purposes of the preceding sentence means the spouse and the
lineal ascendants and descendants (and spouses of such ascendants and
descendants) of any employee or former employee. A former employee shall be
treated as a Highly Compensated Eligible Employee if such former employee was a
Highly Compensated Eligible Employee as defined herein at the time he separated
from service or at any time after attaining age fifty-five (55). Except as
provided by Section 416(i) of the Code, an Employee's status as a Highly
Compensated Eligible Employee is to be determined by reference to the controlled
group of corporations as provided in Section 414(b) of the Code, and employers
aggregated under Sections 414(b), (c), (m) or (o) are treated as a single
employer.
Notwithstanding the preceding paragraph, an Employee who was not a
Highly Compensated Eligible Employee, as defined in sub sections (b), (c) or
(d), for the immediately preceding Plan Year shall not be treated as a Highly
Compensated Eligible Employee, as defined in subsections (b), (c) or (d), for
the current Plan Year unless such Employee is a member of the group consisting
of the one
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hundred (100) Employees paid the highest Considered Compensation during the
current Plan Year.
1.29 "Hour of Service" means a time of service determined under
regulations prescribed by the Secretary of Labor. For 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, lay-off, Authorized Leaves of Absence, and
similar paid periods; and each hour for which back pay, irrespec tive 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 Regulation Section
2530.200b-2(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
Regulations Section 2530.200(b)-3(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
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least (1) Hour of Service under Department of Labor Regulation 2530.200(b)-2.
1.30 "Key Employee" means any Employee or former Employee (and any
Beneficiary of a Employee or former Employee) who, at any time 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 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 less 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. For this purpose
"five percent owner" means any person who owns (or is considered 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; or
(d) a "one percent owner" of the employer having an annual
compensation from the employer of more than $150,000. For this
purpose "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
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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.
In addition, for Plan Years beginning after December 31, 1984, if a
Member or Former Member has not performed any services for any 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 10.2.
1.31 "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
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(B) At which a substantial portion of the
same issue is acquired by persons independent of
the issuer; or
(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.
1.32 "Member" or "Members" means an Eligible Employee or Eligible
Employees who elects or elect to participate in the Plan during the Plan Year.
1.33 "Net Income" means, as to each Signatory Company, such Signatory
Company's taxable income as reflected on its federal income tax return for such
year before provision for federal or state taxes based upon income and before
Provision for the Signatory Company's Employer Matching Contribution or Employer
Contribution under this Plan, but excluding all capital gains and income
entitled to capital gains treatment included in such taxable income.
1.34 "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.
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1.35 "Plan" means the Team, Inc. Salary Deferral Plan herein set forth
and all subsequent amendments thereto.
1.36 "Plan Year" begins on January 1 and ends on December 31.
1.37 "Qualified Nonelective Contributions" means any Employer
Contribution or Employer Matching Contribution (other than a Deferral
Contribution) that satisfies the same vesting and distribution provisions
applicable to Deferral Contributions as provided in Article VII of the Plan and
is designated by the Administrative Committee as such.
1.38 "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.
1.39 "Retired Member" means a person who was at one time a Member and
who has retired in accordance with the provisions of this Plan.
1.40 "Signatory Company" or "Signatory Companies" means the
Corporation, any of the Corporation's Affiliated Companies (and any other
business organization) which adopts this Plan.
1.41 "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 an intentionally self
inflicted injury;
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(c) 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; and
(d) Did not result (directly or indirectly) from the Member's
engaging in substance abuse as determined by the Administrative
Committee under standards set forth in the substance abuse policy
adopted by the Signatory Company which employs the Member.
1.42 "Transferred" as used with respect to an Employee and "Transfer of
an Employee" means the termination of employment of an Employee by one Signatory
Company and the contemporaneous commencement of the employment of such Employee
by another Signatory Company.
1.43 "Trust" means the trust estate created herein or by the separate
agreement of the Corporation and the Trustee.
1.44 "Trust Fund" means the cash, bonds, stocks and other properties
held by the Trustee pursuant to the Trust created under the Plan.
1.45 "Trustee" or "Trustees" means Clark A. Ingram and any
individual(s), corporation(s) or institution(s) appointed by the Corporation
as successor Trustee(s).
1.46 "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
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Service. However, if an Employee does not have at least one 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 and Years of Service for vesting purposes
shall also include Hours of Service with an Affiliated Company to the extent
designated by the Administrative Committee or as otherwise required by law.
ARTICLE II.
Employees Entitled to Participate
2.1 Eligibility to Participate. Every Employee except a laborer shall
become a Member of the Plan on the Entry Date coincident with or next following
the completion of one (1) Year of Service with a Signatory Company and the
filing of a written application for membership with the Administrative Committee
in which he authorizes payroll deductions, agrees to conform to the requirements
of the Plan and furnishes 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. If an Eligible Employee does not elect to
participate in
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the Plan, he may become a Member on a subsequent Entry Date by submitting the
required written application to the Administrative Committee prior to that Entry
Date. A Member's election to make Deferral Contributions under this Plan shall
in no way be made a direct or indirect condition of any other benefit provided
by the Employer to such Member under this or any other plan or arrangement. The
preceding sentence shall not apply to any Employer Matching Contribution made by
reason of such election.
2.2 Participation 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 (1) 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, 7.1
hereof and the Member shall not share in any Employer Contributions for any such
Plan Year, but he shall continue to receive Employer Matching Contributions and
income allocations and valuation adjustments in accordance with Article IV,
Sections 4.5 and 4.6 and shall continue to have the right to elect to make
Deferral Contributions in accordance with Article III, Section 3.1 until his
employment terminates as described in the following paragraph. 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. In the event a Member terminates employment for any
reason, such Member shall (to the extent previously eligible):
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31
(a) share in any Employer Matching Contributions
and Employer Contributions through the date of his
termination of employment,
(b) continue to receive income allocations and valuation
adjustments on the amount in his Account pursuant to Article IV,
Sections 4.5 and 4.6 after his termination of employment until the
complete distribution of his Account pursuant to Article IX, and
(c) continue to have the right to elect to make Deferral
Contributions in accordance with Article III, Section 3.1 until the
date of his termination of employment.
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 by
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 did not during his prior period
of employment satisfy the service requirement of Section 2.1 for
participation in the Plan, his service during reemployment will be
added to and counted with his service during the earlier employment in
satisfying the service requirement of Section 2.1, except if such
Employee incurred a one-year Break-in-Service prior to his reemployment
commencement date, the earlier service prior to such Break-in-Service
will not be counted and the eligibility computation period for such
reemployed Employee shall begin with the Employee's reemployment
commencement date and not his original date of employment; and
(b) If the reemployed Employee had previously satisfied the
requirements of Section 2.1 and had been a Member of the Plan prior to
his termination of employ-
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ment, he shall become an Eligible Employee on 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. A Member who completes a Year of Service shall
participate fully in the Plan for such Plan Year. A Member who fails to complete
a Year of Service in a Plan Year shall still be eligible to receive Employer
Matching Contributions for such Plan Year. Employment for the full Plan Year
shall not be required in order for a Member to be eligible to participate fully
in the Plan for such Plan Year for purposes of sharing in Employer Matching
Contributions and Employer Contributions. The number of Hours of Service
completed by a Member during a particular Plan Year shall be the sole
determinant as to whether a Member shall be credited with a Year of Service and
thereby be entitled to participate fully in the Plan for such Plan Year. A
Member shall be eligible for Employer Matching Contributions based upon his
Considered Compensation earned during the portion of the Plan Year for which he
makes Deferral Contributions into the Plan. There shall be no condition to
participation in a Plan Year other than meeting the eligibility requirements of
Section 2.1 and attaining an Entry Date.
2.5 Transferred Employee. An Employee's status as either an Employee,
Eligible Employee or a Member shall not be deemed to be interrupted or severed
by the fact that he is transferred from the
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33
employ of one Signatory Company to that of any other Signatory Company or
performs services for more than one Signatory Company.
2.6 Certification. Eligibility shall be determined and certified to the
Trustee by the Administrative Committee, based upon information furnished by the
Signatory Company, not later than thirty (30) days after each Entry Date.
2.7 Notice to Employees. The Administrative Committee shall notify each
Employee of his eligibility to participate within sixty (60) days before the
Entry Date on which he will become an Eligible Employee under Section 2.1
hereof, and each such notice shall be accompanied by an enrollment form and a
description of the Plan written in a manner reasonably calculated to be
understood by the Employee. 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, within a reasonable time after such action has
been taken.
ARTICLE III.
Contributions
3.1 Deferral Contributions. For each Plan Year beginning with the first
Plan Year with respect to which this Plan is adopted by a Signatory Company,
each Member employed by such Signatory Company may elect to have allocated to
his Account as a Deferral Contribution any percentage (or dollar amount if
authorized by the Administrative Committee in its sole discretion), not to
exceed sixteen percent (16%) of his Considered Compensation for the Plan Year;
provided, however, that the Administrative Committee in its discretion may (1)
limit the percentage (or dollar amount) deferred
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34
by any Member who is a Highly Compensated Eligible Employee. The Deferral
Contribution shall be paid through payroll deductions of the applicable
percentage (or dollar amount) by the Signatory Company, and the compensation
otherwise paid to the Member shall be reduced to the extent of such Deferral
Contribution.
The Member may change his Deferral Contribution percentage (or dollar
amount) by filing the required form with the Administrative Committee before any
Entry Date. The new Deferral Contribution shall become effective as of the Entry
Date coincident with or next following the day after the Administrative
Committee receives the form.
The Member shall have the right to suspend his Deferral Contribution at
any time by giving a written notification to the Administrative Committee. Such
suspension shall become effective for the payroll period next following the
payroll period during which such notification is received by the Administrative
Committee. If the Member suspends his Deferral Contribution, he shall forfeit
his right to elect to make additional Deferral Contributions until the next
Entry Date. As of this next or any subsequent Entry Date, the Member may resume
Deferral Contributions to his Account by filing the required form prior to an
Entry Date, to take effect for the next payroll period following such Entry
Date.
Elections to make Deferral Contributions, increase or decrease Deferral
Contributions, suspend Deferral Contributions or resume Deferral Contributions
shall be in writing, signed by the Member, on such form or forms as the
Administrative Committee shall
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35
provide. Upon termination of employment, the amount attributable to the Deferral
Contribution allocated to the Member's Account shall be distributed pursuant to
Article VII of this Plan.
Each Member's Deferral Contribution for a Plan Year under this Plan
shall be limited to $7,000 (as adjusted for the cost of living, or such other
amount provided in Section 402(g)(5) of the Code). If a Member's total personal
deferral contributions exceed $7,000 (as adjusted for the cost of living, or
such other amount provided in Section 402(g)(5) of the Code) in any Plan Year,
the provisions of Article III, Section 3.7 hereof shall become applicable. The
term "total personal deferral contributions" means the sum of all Deferral
Contributions and any other "elective deferrals" by an Eligible Employee under
any other cash or deferred arrangements or (qualified plan type) elective
deferral vehicle of the Employer or any other employer, subject to any offset
rules provided under the Code or regulations.
No Deferral Contribution may be taken into account for purposes of
determining whether any other contributions under this Plan or any other plan
meet the requirements of Section 401(a) or Section 410(b) of the Code, or for
purposes of satisfying the ("top heavy") minimum allocation rules of Article X,
Section 10.6 of this Plan. The preceding sentence shall not apply for purposes
of determining whether a plan meets the percentage portion or average benefit
requirement of Section 410(b)(2)(A)(ii) of the Code.
3.2 Employer Matching Contributions and Employer Contributions. For
each Plan Year beginning with the first Plan Year with respect to which this
Plan is adopted by a Signatory
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36
Company, such Signatory Company shall, subject to the limitations contained in
Section 3.3 hereof, contribute to the Trust an Employer Matching Contribution
equal to a percentage of each Member's Deferral Contribution for such Plan Year,
such Employer Matching Contribution to be determined by the Board of Directors
of the Corporation, acting in its sole discretion. Effective October 1, 1991,
unless otherwise so determined for a Plan Year, the Employer Matching
Contribution shall be equal to an amount which is equal to fifty percent (50%)
of each Member's Deferral Contribution but not in excess of three percent (3%)
of such Member's Considered Compensation in such Plan Year (so that the annual
amount of such Employer Matching Contribution does not exceed one and one-half
percent (1.5%) of such Member's Considered Compensation in such Plan Year). The
Corporation's Board of Directors shall have the right to make a larger or
additional Employer Matching Contribution on behalf of Members who are not
Highly Compensated Members for the purpose of assuring the Plan's compliance
with the Actual Deferral Percentage Test of Section 3.3 of this Article and the
Actual Contribution Test of Section 3.8 of this Article, and such additional
Employer Matching Contribution for non-Highly Compensated Members shall be
immediately and fully nonforfeitable and shall not be subject to the vesting
schedule in Article VII, Section 7.1.
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 may,
subject to the limitations contained in Section 3.3 of this Article, contribute
to the Trust from the
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37
Signatory Company's current or accumulated Net Income, but only to the extent
thereof, an Employer Contribution equal to a percentage of an Eligible
Employee's Considered Compensation, such sum to be determined by the
Corporation's Board of Directors, acting in its sole discretion. Such Employer
Contribution for any Plan Year will be allocated to an Eligible Employee
pursuant to Article IV, regardless of whether the Eligible Employee makes
Deferral Contributions for all or any part of such Plan Year.
The aggregate of the Deferral Contributions, Employer Contribution and
Matching Contribution for any Plan Year may not (subject to the provisions of
this Article III, Section 3.2) exceed the Signatory Company's current or
accumulated Net Income.
The amount of the Employer Matching Contribution and Employer
Contribution for each Plan Year shall be established by a resolution adopted by
the Corporation's Board of Directors. Such resolution will be communicated to
the Signatory Companies by the Corporation and to the Members by their
respective Signatory Companies.
3.3 Actual Deferral Percentage Test. If for the Plan Year the Actual
Deferral Percentage for the group of Highly Compensated Eligible Employees
(based upon Eligible Employee participation elections) would be more than the
greater of:
(a) the Actual Deferral Percentage of all other
Eligible Employees multiplied by 1.25; or
(b) the lesser of (i) two percentage (2%) points plus the
Actual Deferral Percentage of all other Eligible Employees, or (ii) the
Actual Deferral Percentage of all other Eligible Employees multiplied
by two (2),
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38
such Excess Contribution shall be corrected in the manner set forth below. The
calculation described in the preceding sentence is referred to herein as the
"Actual Deferral Percentage Test." The Administrative Committee may, in its
discretion, select either of the following methods of correction or any
combination thereof in any Plan Year:
(1) The Excess Contributions (and income allocable thereto)
may, if such Excess Contributions are designated by the Administrative
Committee as distributions of Excess Contributions (and income), be
distributed to the appropriate Highly Compensated Eligible Employees
after the close of such Plan Year and within 12 months of the close of
such Plan Year. The income allocable to Excess Contributions includes
both income for the Plan Year for which the Excess Contributions were
made and income for the period between the end of the Plan Year and the
date of distribution, and will be calculated pursuant to Prop. Reg.
Section 1.401(k)-1(f)(4). If feasible, the Administrative Committee
shall in its sole discretion determine and distribute the amount of
Excess Contributions within two and one-half (2 1/2) months after the
end of the Plan Year. The Administrative Committee may distribute
Excess Contributions without regard to any notice or consent otherwise
required under the Plan or Section 411(a)(11) and Section 417 of the
Code limiting distributions. The amount of Excess Contributions for a
Highly Compensated Eligible Employee for a Plan Year is to be
determined by the following leveling method, under which the actual
deferral ratio of the Highly Compensated Eligible Employee with the
highest actual deferral ratio is reduced to the extent required to
satisfy the Actual Deferral Percentage Test set forth above or cause
such Highly Compensated Eligible Employee's actual deferral ratio to
equal the ratio of the Highly Compensated Eligible Employee with the
next highest actual deferral ratio. This process must be repeated until
the Actual Deferral Percentage Test is satisfied for such Plan Year.
Except to the extent otherwise provided in regulations, both refunded
Excess Deferrals and retained Excess Deferrals under Section 3.7 of
this Article are taken into account in determining a Member's Actual
Deferral Percentage for purposes of the above calculation.
(2) Any Employer Matching Contributions attributable or
related to any Excess Contribution distributed pursuant to the
provisions of the preceding paragraph (1) shall be forfeited and
applied in the manner provided for other Forfeitures under Sections
4.11 and 7.6 below.
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(3) Within 2 1/2 months after the last day of the Plan Year,
the Excess Contributions for such Plan Year may be recharacterized as
after-tax employee contributions in accordance with the provisions of
Treas. Reg. Section 1.401(k)-1(f)(3). The preceding sentence shall only
be implemented if the Plan is amended to provide for the making of
after-tax employee contributions for such Plan Year. Recharacterized
Excess Contributions remain subject to the non-forfeitability
requirements and distribution limitations that apply to Deferral
Contributions. Excess Contributions will not be recharacterized with
respect to a Highly Compensated Eligible Employee to the extent that
the recharacterized amounts, in combination with employee contributions
actually made by such Highly Compensated Eligible Employee, exceed the
maximum amount of employee contributions (determined prior to the
application of Code Section 401(m)(2)(A)) that such Highly Compensated
Eligible Employee is permitted to make under the Plan in the absence of
recharacterization.
In no event shall the sum of the Deferral Contributions (including
recharacterized Excess Contributions), and the Signatory Company's Employer
Matching Contribution, and the Signatory Company's Employer Contribution exceed
an amount equal to fifteen percent (15%) of the total Considered Compensation
otherwise paid or accrued during such Plan Year of such Signatory Company plus
the maximum amount deductible under the "carry-over" provisions of the Code
relating to Employer Matching Contributions and Employer Contributions in
previous years of less than the maximum amount permissible. In addition, in no
event shall the aggregate of such Deferral Contribution, Employer Matching
Contribution, Employer Contribution and the Signatory Company's contributions to
all other qualified 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. In the event the aggregate of the
Signatory Company's contributions under all plans would exceed such maximum
deductible amount, the
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Employer Matching Contribution and Employer Contribution to the Plans 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.
Deferral Contributions will be taken into account under the Actual
Deferral Percentage Test for a Plan Year only if such Deferral Contributions are
allocated to the Eligible Employee as of a date within such Plan Year. For this
purpose, a Deferral Contribution is considered allocated as of a date within a
Plan Year if the allocation is not contingent on participation or performance of
services after such date and the Deferral Contribution is actually paid to the
Trust no later than twelve (12) months after the Plan Year to which the
contribution relates.
In the case of a Highly Compensated Eligible Employee whose Actual
Deferral Percentage is determined under the family aggregation rules of Code
Section 414(q)(6), the determination of the amount of Excess Contributions shall
be made as follows:
(3) If the Highly Compensated Eligible Employee's Actual
Deferral Percentage is determined under Article I, Section 1.4(l)(ii),
then the Actual Deferral Percentage is reduced in accordance with the
leveling method described in Treas. Reg. Section 1.401(k)-1(f)(2) and
the Excess Contributions for the family unit are allocated among the
Family Members in proportion to the elective contributions of each
Family Member that have been combined to determine the Actual Deferral
Percentage.
(4) If the Highly Compensated Eligible Employee's Actual
Deferral Percentage is determined under Article I, Section 1.4(1)(i),
then the Actual Deferral Percentage is reduced in accordance with the
leveling method described in Treas. Reg. Section 1.401(k)-1(f)(2) but
not below the Actual Deferral Percentage of Family Members who are
Non-Highly Compensated Eligible Employees without regard to family
aggregation. Excess Contributions are determined by taking into account
the contributions of the eligible Family Members who are Highly
Compensated Eligible
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Employees without regard to family aggregation, and are allocated among
such Family Members in proportion to each such Family Member's elective
contributions. If further reduction of the Actual Deferral Percentage
is required, Excess Contributions resulting from this reduction are
determined by taking into account the contributions of all eligible
Family Members and are allocated among such Family Members in
proportion to the elective contribu tions of each Family Member.
Paragraphs (3) and (4) above shall be administered in accordance with Reg.
Section 1.401(k)-1(f)(5)(ii). Excess Contributions will be corrected in
accordance with this Section 3.3 in a timely fashion to avoid disqualification
of the Plan or other sanction imposed under the Code (including the imposition
of tax under Code Section 4979).
Excess Contributions will be corrected in accordance with this Section
3.3 in a timely fashion to avoid disqualification of the Plan or other sanction
imposed under the Code (including the imposition of tax under Code Section
4979).
3.4 Time of Payment. The Employer Matching Contribution and 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) and, if earlier with respect to the
Employer Matching Contribution, no later than 12 months after the close of the
Plan Year (or other period prescribed by final regulations).
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3.5 Administrative Committee to Prescribe Rules Governing Deferral
Contributions. Deferral Contributions may be made only in accordance with such
uniform rules and regulations as may be prescribed from time to time by the
Administrative Committee. Such uniform rules and regulations of the
Administrative Committee may, among other things and subject to the provisions
set forth in the Plan, restrict Deferral Contributions to those made through
authorized payroll deductions, require payroll deductions to be authorized on a
specified periodic basis and suspend, for a specified period, the right to
Deferral Contributions on the part of a Member who has discontinued his Deferral
Contributions.
3.6 Prohibition Against Reversion. In no event, except as expressly
provided in Article XX and 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.
3.7 Excess Deferral Contributions. The amount by which an Eligible
Employee's Deferral Contribution (including for this purpose any other total
personal deferral contributions within the meaning of Section 3.1 above) in any
Plan Year exceeds the limitation in effect under Section 402(g)(1) of the Code
and referred to in Section 3.1 above for such Plan Year shall be known as the
Eligible Employee's Excess Deferral for such Plan Year. An Eligible Employee's
Excess Deferral for any Plan Year shall not be considered as reducing such
Eligible Employee's compensation under Article III, Section 3.1 to the extent of
such Excess Deferral.
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An Eligible Employee's Excess Deferral is not required to be refunded
to such Eligible Employee. However, notwithstanding any other provision of law
or of this Plan limiting distributions, the Administrative Committee in its sole
discretion may refund any Eligible Employee's Excess Deferral (plus any
allocable income) to such Eligible Employee in accordance with the provisions
set forth below. If a Member has made an Excess Deferral for his taxable year,
the Member must notify the Administrative Committee in writing no later than the
March 15th following the end of such taxable year, on the form prescribed by the
Administrative Committee for this purpose, of the amount the Member requests to
be distributed. The distribution to the Member shall be made after such taxable
year but no later than the first April 15 following the close of such taxable
year. Alternatively, the Administrative Committee may also provide for a
distribution of the Excess Deferral during such taxable year, provided the
following conditions are satisfied:
(a) The Member designates the distribution as an
Excess Deferral;
(b) The distribution of the Excess Deferral is made
after the date in which the Plan received the Excess
Deferral; and
(c) The Administrative Committee designates the
distribution as a distribution of an Excess Deferral.
The amount of Excess Deferral to be distributed to a Member for the Member's
taxable year shall be reduced by any Excess Contribution previously distributed
or recharacterized as an after-tax employee contribution under Section 3.3 of
the Plan for the Plan Year beginning with or within such taxable year.
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44
3.8 Actual Contribution Percentage Test. If for the Plan Year the
Actual Contribution percentage for the group of Highly Compensated Eligible
Employees would be more than the greater of:
(a) the Actual Contribution Percentage for all other
Eligible Employees multiplied by 1.25; or
(b) the lesser of (i) the Actual Contribution Percentage for
all other Eligible Employees plus two percentage (2%) points, or (ii)
the Actual Contribution Percentage for all other Eligible Employees
multiplied by two (2),
such Excess Aggregate Contributions, shall be corrected in the manner set forth
below. The calculation described in the preceding sentence is referred to herein
as the "Actual Contribution Percentage Test." The Excess Aggregate Contributions
(and income allocable thereto) shall be distributed to (or, if forfeitable, in
the discretion of the Administrative Committee uniformly applied, forfeited by)
Highly Compensated Eligible Employees after the close of the Plan Year in which
such Excess Aggregate Contributions arose and within 12 months after the close
of the following Plan Year. If feasible, the Administrative Committee shall in
its sole discretion determine and distribute the amount of Excess Aggregate
Contributions within two and one-half (2 1/2) months after the end of the Plan
Year. In the event of the complete termination of the Plan during such Plan
Year, the distributions described in the preceding sentence shall be made after
termination of the Plan and within the 12 months following such termination.
The amount of Excess Aggregate Contributions for a Highly Compensated
Eligible Employee for a Plan Year is to be determined by the following
contribution leveling method, under which the actual contribution ratio of the
Highly Compensated Eligible
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Employee with the highest actual contribution ratio is reduced to the extent
required to satisfy the Actual Contribution Percentage Test set forth above or
to cause such Highly Compensated Eligible Employee's actual contribution ratio
to equal the ratio of the Highly Compensated Eligible Employee with the next
highest actual contribution ratio. This process must be repeated until the
Actual Contribution Percentage Test is satisfied for such Plan Year.
In determining the amount of Excess Aggregate Contributions under the
leveling method set forth above, actual contribution ratios must be rounded to
the nearest one-hundredth percent of the Eligible Employee's Considered
Compensation. In no case shall the amount of Excess Aggregate Contributions with
respect to any Highly Compensated Eligible Employee exceed the amount of the
after-tax employee contributions and Employer Matching Contributions on behalf
of such Highly Compensated Eligible Employee for such Plan Year. Excess
Aggregate Contributions for a Plan Year shall be distributed or forfeited in
accordance with the provisions set forth above and shall not remain unallocated
or allocated to a suspense account for allocation to one or more Employees in
any future year. The determination of the amount of Excess Aggregate
Contributions with respect to a Plan Year shall be made after the determination
and correction of Excess Deferrals under Article III, Section 3.7, and the
determination and correction of Excess Contributions under Article III, Section
3.3, respectively, have been made.
In the case of a Highly Compensated Eligible Employee whose Actual
Contribution Percentage is determined under the family
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aggregation rules of Code Section 414(q), the determination of the amount of
Excess Aggregate Contributions shall be made as follows:
(1) If the Highly Compensated Eligible Employee's Actual
Contribution Percentage is determined by combining the contributions
and compensation of all Family Members, then the Actual Contribution
Percentage is reduced in accordance with the leveling method described
in Reg. Section 1.401(m)-1(e)(2) and the Excess Aggregate Contributions
for the family unit are allocated among the Family Members in
proportion to the contributions of each Family Member that have been
combined to determine the Actual Contribution Percentage.
(2) If the Highly Compensated Eligible Employee's Actual
Contribution Percentage is determined by combining the contributions of
only those Family Members who are Highly Compensated Eligible Employees
without regard to family aggregation, then the Actual Contribution
Percentage is reduced in accordance with the leveling method described
in Reg. Section1.401(m)- 1(e)(2) but not below the Actual Contribution
Percentage of Family Members who are Non-Highly Compensated Eligible
Employees without regard to family aggregation. Excess Aggregate
Contributions are determined by taking into account the contributions
of the eligible Family Members who are Highly Compensated Eligible
Employees without regard to family aggregation and are allocated among
such Family Members in proportion to each such Family Member's employee
contributions and Employer Matching Contributions. If further reduction
of the Actual Contribution Percentage is required, Excess Aggregate
Contributions resulting from this reduction are deter mined by taking
into account the contributions of all eligible Family Members and are
allocated among such Family Members in proportion to the employee
contribu tions and Employer Matching Contributions of each Family
Member.
Paragraphs (1) and (2) above shall be administered in accordance
with Reg. Section 1.401(m)-1(e)(2)(iii).
3.9 Affiliated Companies. If any Signatory Company is prevented in
whole or in part from making an Employer Matching Contribution or Employer
Contribution to the Trust, which it would otherwise have made under the Plan by
reason of having no current or accumulated Net Income or because such Net Income
is less than
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the Employer Matching Contribution and Employer Contribution which it would
otherwise have made, then so much of the Employer Matching Contribution and
Employer Contribution which such Signatory Company was so prevented from making
may be made for the benefit of the Members employed by such Signatory Company by
the other Signatory Companies (subject to the approval of the Corporation) to
the extent of the current or accumulated Net Income of such other Signatory
Companies; except that the portion of the total prevented Employer Matching
Contribution and Employer Contribution which may be contributed by each such
other Signatory Company shall be limited to the proportion that its total
current Net Income remaining after adjustments for its own Employer Matching
Contribution and Employer Contribution to the Plan made without regard to this
Section 3.9 bears to the total current Net Income of all the Signatory Companies
remaining after adjustment for all Employer Matching Contributions and Employer
Contributions made to the Plan without regard to this Section. The foregoing,
however, shall apply only to those Signatory Companies which constitute an
"affiliated group" within the meaning of the provisions of the Code relating to
employer deductions for contributions to profit sharing plans. A Signatory
Company on behalf of whose Members an Employer Matching Contribution and
Employer Contribution is made under this Section 3.9 shall not unless otherwise
required by law or the Corporation reimburse the contributing Signatory Company.
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ARTICLE IV.
Allocation to Accounts
4.1 Certification by the Signatory Company. As soon as practicable
after the end of the first Plan Year and the end of each succeeding Plan Year
thereafter, the Signatory Company shall certify to the Administrative Committee
the amount of its Employer Matching Contribution and Employer Contribution (if
any) for the Plan Year then ended and 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.
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 Deferral Contribution to Members' Accounts. At the
end of each payroll period under procedures adopted by the Administrative
Committee, the Signatory Company shall transfer the Deferral Contributions to
the Trustee and shall certify to the Administrative Committee the names of the
Eligible Employees, the names of the Members, and the Deferral Contribution
amount for each
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Member. The Administrative Committee shall allocate the Deferral Contribution
made on behalf of a Member directly to such Member's Account.
4.4 Allocation of Employer Matching Contributions, Employer
Contributions to Members' Accounts. The Administrative Committee shall determine
the Deferral Contribution amount for each Member of the Plan. The Administrative
Committee shall then, under procedures adopted by it, allocate an amount from
the Signatory Company's Employer Matching Contribution (if any) to the Member's
Account which is equal to the matching percentage, as determined by the
Corporation's Board of Directors under Article III, Section 3.2 hereof, of the
Member's Deferral Contribution for the Plan Year.
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 who has completed a Year of
Service for such Plan Year in the pro portion 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 Matching Contribution
and Employer Contribution made by each Signatory Company by whom such Member was
employed during such Plan Year and the amount allocated to the Member's Account
shall be
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computed with respect to each Signatory Company in the manner hereinabove
provided based (in the case of Employer Matching Contributions) upon the
Deferral Contribution made on his behalf by each Signatory Company during the
Plan Year and (in the case of Employer Contributions) upon the Considered
Compensation earned by the Member 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
his Deferral Contribution or Considered Compensation for the Plan Year been paid
by 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.
4.5 Daily Allocation of Trust Fund Income. The Administrative Committee
shall determine the amount of income earned by each class of investment on a
daily basis. The Administrative Committee shall allocate such income among the
Members in the proportion that the amount in each Member's Account invested in
each class of investment at the end of each day bears to the aggregate amount of
all Members' Accounts invested in such class of investments at the end of each
day.
However, in the event that a Member receives a distribution from his
Account during any day, the allocation of income to such Member's Account for
each day shall be based upon his reduced Account balance at the end of the day
and the amount invested in
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each class of investment as of the end of each day. If a Member receives the
total balance in his Account during each day, he shall not be entitled to an
income allocation for each day.
4.6 Daily Valuation of Trust Fund. The Trustee shall revalue the Trust
Fund at its then fair market value on a daily basis and allocate any
appreciation or depreciation in the Trust Fund among the Members in the
proportion that the amount in each Member's Account invested in such class of
investments bears to the aggregate amount of all Member's Accounts at the end of
each day after the allocation of income under Section 4.5.
However, in the event that a Member receives a distribution from his
Account during a day, the valuations adjustment allocated to such Member's
Account for the day shall be based upon his reduced Account balance at the end
of the day. If a Member receives the total balance in his Account during a day,
he shall not be entitled to a valuation adjustment for the day. However, the
Administrative Committee shall have the authority to change the number of times
the Trust Fund is revalued during the Plan Year, provided that such authority is
exercised in a non-discriminatory manner.
4.7 Special Allocation Upon Termination, Partial Termination, or
Complete Discontinuance of Employer Matching Contributions or 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
(b) the Plan is terminated with respect to a group
of Members resulting in a partial termination of the
Plan,
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all previously unallocated funds shall be allocated to the Accounts of the
Members at the time of such termination, partial termination or 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.
4.8 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 Administrative Committee
pursuant to Sections 4.4 and 4.5.
4.9 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 Account and open or reopen an Account 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 4.9
are for administrative convenience only. For all other purposes under this Plan,
all Accounts of each Transferred Member shall be regarded as one Account, which
shall be attributable to the Signatory Company by whom such Transferred Member
is then employed.
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4.10 Rights in Trust Assets. No such allocations, adjust ments, 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 Team, Inc. Salary Deferral
Plan, or in such other name or names as the Trustee shall designate.
4.11 Application of Forfeitures. The Administrative Committee shall,
within thirty (30) days 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
7.5(a) and 7.6 hereof, during such Plan Year and shall certify such information
to the Trustee. The total amount of all Forfeitures shall then be used to reduce
such Signatory Company's current and future Employer Matching Contributions and
Employer Contributions under Article III, Section 3.2 of the Plan.
ARTICLE V.
Limitations on Annual Additions
5.1 Limitation Under this Plan. Notwithstanding any provi sions 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
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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 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 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 Account 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
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55
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 Matching 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 4.3.
Notwithstanding the foregoing, 1.0 shall 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 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 Account in that Plan Year, but shall be treated as
follows:
(a) The excess amounts attributable to Employer Matching
Contributions or Employer Contributions 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 that Plan Year, 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
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(subject to the limitations of Section 415 of the Code) before any
Employer Matching Contributions or Employer Contributions may be made
to the Plan for that Plan Year.
(b) Notwithstanding the provisions of paragraph (a) above, to
the extent that Annual Additions in excess of the permissible limit of
Code Section 415 result from a reasonable error in determining total
elective deferrals as defined in Treas. Reg. Section 1.415-6(b)(6),
then such excess Annual Additions may be corrected by distributing
elective deferrals to the Member to the extent necessary to eliminate
the amount in excess of the Code Section 415 limitation. The amount
distributed is includible in the Member's income for the taxable year
in which it is distributed, and is characterized for tax and reporting
purposes as a corrective distribution rather than a distribution of
benefits. This paragraph (b) shall be administered in accordance with
the provisions of Treas. Reg. Section 1.415-b(b)(6)(iv) and Revenue
Procedure 92-93, 1992-2 C.B. 505.
5.4 Combining of Plans. For purposes of applying the limi tations
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, 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
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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 Adminis trative
Committee, in applying the provisions 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 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 3.6, 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.
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ARTICLE VI.
Retirement and Designation of Beneficiary
6.1 Normal Retirement Date. "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, such date to be his
Normal Retirement Date; provided, however, that an Employee may continue
employment there after 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 his Normal Retirement Date. Each Employee who is employed by
the Signatory Company on the date it adopts the Plan shall be deemed for the
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.
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. The designation by a Member who was married at
the time of his death of a Beneficiary other than the Member's spouse shall only
be permitted with such spouse's written consent. Such consent must designate a
specific beneficiary, must acknowledge the effect of
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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 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
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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 con nected with the
Plan shall have no further liability in respect to the payment so paid.
ARTICLE VII.
Vesting of Members' Interests
7.1 Vesting. Each Member who had completed at least 3 Years of Service
as of November 30, 1991, shall have a one hundred percent (100%) vested interest
in the amount credited to his Account attributable to Deferral Contributions,
Employer Matching Contributions and Employer Contributions. As to each other
Member
(a) there shall be a one hundred percent (100%) vested
interest in the amount credited to his Account attributable to
Deferral Contributions;
(b) there shall be a one hundred percent (100%)
vested interest in the amount credited to his Account
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attributable to Employer Matching Contributions and
Employer Contributions as of September 30, 1991; and
(c) the amount credited to his Account after September 30,
1991 attributable to Employer Matching Contributions and Employer
Contributions shall vest in accordance with the provision of Section
7.5 below.
7.2 Death. On the death of a Member (or a Retired Member prior to the
complete distribution of such Retired Member's Account) his death benefit shall
be one hundred percent (100%) of the amount credited to his Account at the end
of the calendar quarter in which he dies. Payment of such death benefit to the
Member's designated Beneficiary or Beneficiaries shall commence no later than
ninety (90) days after the end of the calendar quarter in which the Member dies.
However, in the event that the payment of his death 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 Date as provided
in Article VI, Section 6.1 and upon reaching his Normal Retirement Age, a Member
shall have a nonforfeitable right to his Account balance. Such retirement
benefit shall be paid to the
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Member in the form of benefit determined by the Administrative Committee
pursuant to Article IX, Section 9.3. The payment of his retirement benefit shall
commence no later than ninety (90) days after the end of the calendar quarter in
which he retires after attaining his Normal Retirement Date 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 payment of such benefit shall commence no later than sixty (60) days after
the end of the Plan Year in which such Member retires.
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 calendar quarter 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 no later than ninety (90) days after the end of the calendar
quarter in which the Member is determined to be totally, permanently disabled
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 the Member is determined to be totally,
permanently disabled.
If a Member who had previously been determined to be totally,
permanently disabled returns to the employment of the Signatory
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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
Account shall be transferred to such new Account, which shall share in income
allocations and valuation adjustments pursuant to Article IV, Sections 4.5 and
4.6 until the amount is distributed in full upon his subsequent death,
retirement, determination of Total Permanent Disability or severance of
employment. A new Account shall be established for the returning Member as if he
were a new Member, and said Account shall vest pursuant to Section 7.5 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) Vesting Schedule. A Member whose employment is terminated
for any reason other than death, retirement under Section 7.3 above or
Total Permanent Disability shall be entitled to a severance benefit no
later than ninety (90) days after the end of the calendar quarter in
which he terminates employment equal to the vested interest
attributable to Deferral Contributions, Employer Matching Contributions
and Employer Contributions in such Member's Account at the end of the
Plan Year. 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. For the purpose of this
Section 7.5(a), a Member's "vested interest" shall be determined using
the following schedule and shall be an amount equal to the percentage
of the balance of such Member's Account attributable to Employer
Matching Contributions and Employer Contributions for the number of
Years of Service as of the end of the Plan Year. As provided in Section
7.1, a Member's vested interest in his Account attributable to Deferral
Contributions shall at all times be one hundred percent (100%).
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Percentage of
Participating Employee's
Years of Service Account that Becomes Vested
---------------- ---------------------------
Less than one year . . . . . . . . . . . . 0%
One year . . . . . . . . . . . . . . . . . 20%
Two years . . . . . . . . . . . . . . . . 40%
Three years . . . . . . . . . . . . . . . 60%
Four years . . . . . . . . . . . . . . . . 80%
Five years or more . . . . . . . . . . . . 100%
In the event that the vesting schedule contained in this
Section 7.5(a) is amended, and 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
Matching Contributions and Employer Contributions computed under this
Section 7.5(a) 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 on the date the amendment is
adopted and shall end no earlier than the latest of (a) sixty (60) days
after the date the amendment is adopted, (b) sixty (60) days after the
date 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. 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, Section 1.46, whether or not consecutive,
without regard to the exceptions of Code Section 411(a)(4) prior to the
expiration of the election period. For any Employee who does not have
an Hour of Service in any Plan Year beginning after December 31, 1988,
"five (5) Years of Service" shall be substituted for "three (3) Years
of Service" in applying Section 7.5 and Section 7.1.
The amount credited to such Member's Account which is not
vested when he terminates employment shall be disposed of as provided
in Section 7.6 hereof.
(b) 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, or any Affiliated Company, or any
Predecessor Employer as of the date of severance shall be taken into
account except the following with respect to Breaks-in-Service:
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(i) 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, 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;
(ii) If a Member has five consecutive years of
Breaks-in-Service for Plan Years, then any service after such
Break will not increase the Member's vested interest in his
Account before such Break; and
(iii) If a Member has a vested interest in his Account
and his separation from employment and his subsequent
reemployment do not incur five consecutive years of
Breaks-in-Service, his Account will continue to vest, starting
at the point in the vesting schedule where he left employment.
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
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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 a Forfeiture occurs,
the Forfeiture shall be applied as provided in Article IV, Section 4.11 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 and heavy financial 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, 7.4 and 7.5. The
Administrative Committee shall exercise this authority 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 7.5(a) hereof 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
Account at such time and in any amounts thereafter credited or allocated to his
Account; provided, however, that if the Signatory Company shall
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thereafter resume making Employer Contributions hereunder, all amounts credited
or allocated to a Member's Account 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 7.5(a) hereof. For purposes of this Section, a complete discontinuance
of Employer Contributions under the Plan is contrasted with a suspension of
Employer Contributions under the 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 to make 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, 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
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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 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
thirty (30) days of receipt of the application, 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 thirty (30) day period, the claimant may proceed to the
review
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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 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 sixty (60) 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
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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.
8.5 Decision on Review. The Administrative Committee shall render a
decision no later than sixty (60) 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 pro cessing, in which case a decision shall be rendered as
soon as possible, but not later than one hundred twenty (120) days after receipt
of a request for review. 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.
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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 occurrence of one of the
following events:
(1) the Member's death, retirement at Normal Retirement Age, or
Total Permanent Disability as provided in Article VII,
Sections 7.2, 7.3 and 7.4 hereof, respectively;
(2) termination of employment as provided in Article
VII, Section 7.5 hereof;
(3) termination of the Plan and Trust as provided in
Article XVI;
(4) the sale or other disposition by a Signatory Company to an
unrelated corporation which does not maintain the Plan, of
substantially all of the Signatory company's assets (but only
with respect to Members who continue employment with the
acquiring corporation); or
(5) the sale or other disposition by a Signatory Company of its
interest in a subsidiary to an unrelated entity which does not
maintain the Plan (but only with respect to Members who
continue employment with the subsidiary).
A distribution pursuant to paragraphs (3), (4) or (5) above shall only be made
in the method provided under Section 9.3(a) below. All distribution events set
forth above are subject to the conditions and specifications set forth hereafter
in this Article IX.
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
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(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
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
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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 amounts referred to in Article
VII, Sections 7.2, 7.3, 7.4 and 7.5, in accordance with the Member's election,
with either of the following methods:
(a) A lump sum payment in cash or in kind or both (payable in
a form which is not an annuity);
(b) Distributions in the manner provided in the next sentence,
after having segregated the aggregate amount thereof in a special
account; provided, that the monies in such special account will earn
the going rate of interest paid by local banks on savings accounts
placed in insured depositories at interest, or, at the option of the
Member or Beneficiary (or Beneficiaries), be credited with their
portion of the gains or losses of the Trust pursuant to Article IV,
Sections 4.5 and 4.6. 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 4.5 and 4.6, over any time period not exceeding the Member's
life expectancy (or the life expectancies of such Member and his
designated Beneficiary); provided further, 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.
In the event of the Member's death, the benefit shall be paid in a lump sum
payment in cash or in kind or both (payable in a form which is not an annuity)
to the Beneficiary designated pursuant to Article VI, Section 6.2 according to
the method either set forth on the beneficiary designation on file with the
Administrative Committee or elected by the Beneficiary or Beneficiaries.
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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 bene fits 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, but
the balance of his benefits must be distributed over the life of such
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
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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 substantiation
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) 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 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.
(d) Recalculation of Life Expectancies. For purposes of this
Section, the life expectancy of a Member and 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.
Notwithstanding any other provision of this Plan, the Plan shall in all
respects comply with the provisions of Prop. Reg. Section1.401(a)(9)-1 and the
minimum incidental death benefit limits of Prop. Reg Section1.401(a)(9)-2, which
are specifically incorporated herein by reference.
9.6 Distribution to Minors or Persons under Disability. Should any
distribution hereunder become payable to a minor or to
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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 a 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 Community Property Interests - 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 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) until such time as the
Member or his Beneficiary becomes entitled to a distribution hereunder. In the
event the spouse is also awarded a portion of the future Deferral Contributions,
and/or future Employer Matching Contributions and/or 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
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Decree, shall instruct the Trustee to allocate such portion to the spouse's
account. 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. If such spouse should die prior to the
time of distribution to such spouse hereunder, such 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 any "alternate payee" under a "qualified domestic
relations order" as those terms are defined in Section 414(p) of the Code.
9.8 Incorporation of Revenue Procedure 93-12 Model Amendment. This
Section 9.8 applies to 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 9.8, 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 9.8, 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
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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).
b) Eligible retirement plan: For purposes of this
Section 9.8, 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 9.8, 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 9.8,
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.
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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 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 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 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
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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;
(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
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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 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 Date 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) limit the Considered Compensation maximum dollar amount
pursuant to Article I, Section 1.13; and
(b) require minimum allocations to Non-Key Employees pursuant
to Section 10.6; and
(c) replace the vesting schedule in Article VII, Section
7.5(a) of this Plan with the following:
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Percentage of
Participating Employee's
Years of Service Account that Becomes Vested
---------------- ---------------------------
Less than two years . . . . . . . . . . 0%
Two years . . . . . . . . . . . . . . . 20%
Three years . . . . . . . . . . . . . . 40%
Four years . . . . . . . . . . . . . . 60%
Five 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 shall supplement Article IV, Section 4.3.
(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, Employer Matching
Contributions, any reallocated Forfeitures and Deferral Contributions
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, Employer Matching Contributions, any
reallocated Forfeitures and Deferral Contributions 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
Employer Matching Contributions, any 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 any 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 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
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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,
Employer Matching Contribution, any reallocated Forfeitures and
Deferral Contribution 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 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.
(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 satisfy the safe harbor rules contained in Treasury
Regulation Section 1.416-1(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 4.5 and 4.6.
Contributions to each Member's top heavy Account shall be invested
pursuant to such
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Member's instruction regarding the investment of his Deferral
Contributions, Employer Matching Contributions (if any), Employer
Contributions (if any) and his non-top heavy Account.
ARTICLE XI.
Other Qualified Plans
11.1 Transfers from Other Qualified Plans. No transfers of any type
are allowed into this Plan from any other plan or from an Individual Retirement
Account.
11.2 Transfers to Other Qualified Plans. The Administrative Committee
may, upon written request of a Member otherwise entitled 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 and 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.
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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 or
delivering 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 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
rising 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 Amendment and Restatement and shall have all
powers necessary to accomplish such purposes, including, but not limited to, the
right, power, discretion and authority:
(a) To make rules and regulations for the administration of
the Plan and Trust which are not
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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 in its sole and absolute discretion in a
manner that is not arbitrary or capricious 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 in
interest, and its judgment of such expediency shall be final and
conclusive on all parties at interest;
(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 sufficient 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 in its sole and absolute discretion in a
manner that is not arbitrary or capricious 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 in its sole and absolute
discretion in a manner that is not arbitrary or capricious 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; and
(g) To direct and instruct the Trustee in all matters
relating to the payment of Plan benefits.
12.3 Administration. Whenever, in the administration of the
Plan, any action is taken action by the Administrative Committee,
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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 Member receives the benefits to which he 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, and 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 Adminis trative 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
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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 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 shall 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 Adminis trative 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
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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.
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 Admin istrative 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 he 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.
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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, includ ing 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 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
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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 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
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reports and registration statement 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 Plan shall give any Member or
Beneficiary the right to examine any data or records reflecting the compensation
paid to any other Member or Beneficiary.
12.14 Quarterly Statement to Members. Within one hundred twenty (120)
days after the end of each calendar quarter, the Administrative Committee shall
transmit to each Member or Beneficiary a written statement showing, as of such
calendar quarter:
(a) The balance in his Account as of the last day of the
preceding calendar quarter;
(b) The amount of Deferral Contributions, and Employer
Matching Contributions (if any) and Employer Contributions (if any)
allocated to his Account for such calendar quarter;
(c) The adjustment of his Account to reflect his share of the
income, valuation adjustments and expenses of the Trust for such
calendar quarter;
(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
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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.
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 and
Trust. 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 Matching Contribution or 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 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
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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 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 Plan.
13.3 Resolutions of Board of Directors. The Trustee shall be fully
protected in relying upon a resolution of the Board of
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Directors of the Corporation, duly 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 declaration 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.
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 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 or all purposes of this Agreement 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
Trust is otherwise authorized to take or omit any action. Any
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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 sixty (60) days after the end
of each Plan Year, the Trustee shall render to the Administrative Committee and
to each Signatory Company 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 herein 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 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 ninety (90) 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.
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13.7 Preparation of Quarterly Statement to Members. The Trustee shall
provide any assistance and information requested by the Administrative Committee
in conjunction with the preparation of the quarterly statements to Members in
accordance with Section 12.14.
13.8 Resignation of Trustee. The Trustee may resign at any time by
giving sixty (60) 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 render to the Administrative Committee and to
each Signatory Company 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 sixty (60) days' written notice. Such notice may be waived by
written consent of the Trustee being removed. In the event of removal, the
Trustee shall be under the same duty to settle it 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
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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 such
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 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
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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 the
purposes of this Plan and Trust, be considered an expense of the Trust to be
paid by the Signatory Companies as hereinabove provided.
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 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
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Committee and has given bond as required by Article XI, 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 the
purposes of this Plan and Trust, be considered an expense of the Trustee to be
paid by the Signatory Companies as hereinabove provided.
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
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diligence that a prudent man acting in a like capacity would use under
conditions prevailing at that time.
14.2 Powers of Trustee. 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 any limitations stated in this Plan:
(a) To hold, manage, control, collect, use (includ ing 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 the
name of some other person, partnership or corpora tion with a power of
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 14.4, in a Money Market Fund primarily consisting
of high quality money market instruments; and
(d) To invest and reinvest the Trust assets, as instructed
pursuant to Section 14.4, in a U. S. Government Securities Fund
consisting of securities issued or guaranteed by the United States
Government and/or its agencies, including, but not limited to, Ginnie
Mae certificates, and other government securities and related
repurchase agreements; and
(e) To invest and reinvest the Trust assets, as instructed
pursuant to Section 14.4, in a Total Return Fund consisting of a
diversified portfolio of common stocks, preferred stocks, convertible
and non-convertible bonds and money market instruments; and
(f) To invest and reinvest the Trust assets, as instructed
pursuant to Section 14.4, in a Blue Chip Fund primarily consisting of
common stocks of large, well-established companies with market
capitalizations of at least $1 billion; and
(g) To invest and reinvest the Trust assets, as instructed
pursuant to Section 14.4, in a Growth Fund primarily consisting of
common stocks issued by Companies
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with consistent sales and earnings which are expected to show high
potential for long-term capital growth; and
(h) To invest and reinvest the Trust assets, as instructed
pursuant to Section 14.4, in a Company Stock Fund in which all amounts
are invested in Team, Inc. Common Stock; and
(i) To invest and reinvest the Trust assets, as instructed
pursuant to Section 14.4, in a Participant Loan Fund in which all
amounts are invested in Participant loans with each Participant's
contribution allocated to this fund equal to his or her loan from the
fund and with earnings based on interest earned by the fund on these
loans; and
(j) 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 appurte nant to any stocks, bonds or other
securities for the conversion thereof into other stocks, bonds or secu
rities; to exercise any rights to subscribe for additional stocks,
bonds or other securities and to make any and all necessary payments
thereof; and
(k) To collect the principal and income of the Trust as the
same may become due and payable and to give binding receipt therefor;
and
(l) To institute, join in, maintain, defend, compromise,
submit to arbitration or settle any liti gation, 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
(m) From time to time transfer to a common or pooled trust
fund maintained by any corporate Trustee hereunder or any affiliate of
such Trustee, all or such part of the Trust Fund as the Trustee may
deem advisable and such part or all of the Trust Fund so transferred
shall be subject to all the 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 from such common or pooled trust fund all or such part of the
Trust Fund as the Trustee may deem advisable; and
(n) 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 differ ences; to make any distribution from the
Trust Fund in
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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
(o) To loan or borrow money in any manner (includ ing joint
and several obligations) with or without security, upon such terms as
the Trustee may deem advis able 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 shall not apply to purchases of Qualifying
Employer Securities or Employer Stock; and
(p) 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
(q) 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
(r) 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
(s) To make a loan or loans to Members under such terms and
conditions as provided in Article XV hereof.
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14.3 Prohibited Transactions. Except as elsewhere permitted
in the Act:
(a) The Trustee shall not cause the Plan to engage in a
transaction if it 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;
(2) Lending of money or other extension of credit
between the Plan and a party in interest, except for exempt
and authorized transactions;
(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 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 it knows, or should
know, that holding such security or real property violates Section
407(a) of said Act.
(c) The Trustee shall not:
(1) Deal with the assets of the Plan in its own
interest or for its 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 its own personal
account from any party dealing with the Plan in connection
with a transaction involving the assets of the Plan.
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(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.
(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
or Qualifying Employer Real Property.
(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 shall not acquire any collectibles. For
purposes for 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.
14.4 Investment of Contributions. Each Member shall have the right to
elect, in writing, on a form provided by the Administrative Committee to have
the Deferral Contributions and Employer Matching Contributions which are
allocated to his Account invested in such classes of investments as are selected
by the Administrative Committee and offered for Members' investment on a
uniform, nondiscriminatory basis. The Administrative Committee shall then
instruct the Trustee to invest the Deferral Contributions and Employer Matching
Contributions in the manner and proportions instructed by the Member. The Member
may elect any
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combination of investments in these Funds in increments of five percent (5%).
A Member may elect to change the investment of his present Kemper Fund
Account once each day by contacting Kemper. Such changes will be limited by the
rules governing each fund. The investment of future contributions and investment
in Team, Inc. stock to be made on his behalf may be changed by notifying the
Administrative Committee in writing. All investment election changes must be in
increments of five percent (5%). Investment election changes to a Member's
present Account or Kemper Fund shall be effective immediately. Investment
election changes to the investment of future contributions in Team, Inc. stock
shall be effective on the Entry Date coincident with or next following fifteen
days after the election change is received by the Administrative Committee.
As to any other contributions and amounts, including amounts
attributable to any Employer Contributions, the Administrative Committee shall
have the right to direct the Trustee as to the investment of these amounts in
any of the classes of investments made available to the Members under this Plan
including the fund containing Team, Inc. Stock. In addition, the Administrative
Committee shall retain this right of direction with respect to any other
contributions or funds in the Account of a Member for which the Administrative
Committee has not received a direction from such Member.
14.5 Investment Manager. The Corporation's Board of Directors may
appoint an Investment Manager as the named fiduciary to
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establish an investment policy and to recommend to the Trustee the investment of
the Trust Fund. The Investment Manager shall serve at the will of the Directors.
By appointment of an Investment Manager under this Section 14.5, the Corporation
intends that such Investment Manager be an "investment manager" as defined under
Section 3(38) of the Act and that such Investment Manager has acknowledged in
writing that he is a fiduciary with respect to this Plan.
ARTICLE XV.
Loans to Members
15.1 Application and Limitation. Upon the written application of any
Member, the Administrative Committee, in accordance with its uniform,
nondiscriminatory policy, may make a loan or loans to such Member. The Trustee
shall have no power or responsibility to administer or make interpretations
under this Article XV and shall be directed by the Administrative Committee in
any action it takes under this Article. If the Member is married at the time of
the application, written spousal consent regarding the amount of the loan and
the possible reduction of the Member's Account balance as a result of default
shall be obtained within the 90-day period ending on the date the loan is made,
and such consent shall meet requirements comparable to those set forth in
Section 417(a)(2) of the Code. The preceding sentence shall not apply if the
Administrative Committee does not have actual knowledge of such marriage or the
Member reasonably demonstrates that the whereabouts of his spouse is unknown.
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The aggregate amount of all such loans to any Member shall not exceed
the lesser of:
(a) $50,000, reduced by the excess (if any) of
(i) the highest outstanding balance of loans
from the Plan during the one-year period
ending on the day before the date on which a
loan is made, over
(ii) the outstanding balance of loans
from the Plan on the date on which a
loan is made, or
(b) one-half (1/2) of the amount in the Member's
Account,
as further limited under Article XV, Section 15.2, unless the Member receiving a
loan which exceeds said limitations and the Administrative Committee agree to
make such a loan, and further agree that the Member shall be responsible for the
payment of any taxes incurred by virtue of such loan. For purposes of computing
(i) the aggregate amount of all loans to any Member, and (ii) the amount in the
Member's Account with respect to Section 72(p) of the Code, and or all other
purposes of this Article XV with respect to Section 72(p) of the Code, this Plan
and all other plans maintained by the Employer, any Affiliated Company, or any
other related organization described in Sections 414(b), 414(c) and 414(m) of
the Code shall be aggregated and treated as one plan. The amount in the Member's
Account will be computed by the Trustee at the time of any such loan. The term
loan includes any amount received as a loan under a contract purchased by the
Plan, such as a life insurance policy, and any assignment or pledge with respect
to such contract.
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15.2 Purposes of Loans. Loans shall be made under the provision of this
Article XV: (a) for the purpose of enabling a Member to meet an emergency
condition in his financial affairs, such as may result from illness, disability,
accident, death, dependent care, or educational needs of the Member or a member
of his family or (b) for the purpose of establishing, preserving or improving
the residence of the Member or a member of his family. In addition, loans may be
made under the provisions of this Article XV one time in a 5-year period for any
legal purpose except for the purposes of purchasing securities. In no event can
there be more than one loan outstanding at any time. The authority herein
granted to the Administrative Committee to approve such loans from the Trust
Fund is for the purpose of assisting a Member to meet situations such as those
described above and shall not be used as a means of distributing benefits before
they otherwise become due. The Administrative Committee shall review Members'
applications for loans on case-by-case basis in accordance with its uniform,
nondiscriminatory policy.
15.3 Terms. All loans to Plan Members granted under this provision
shall be treated as a segregated composite investment pool of the Trust Fund (as
provided in Section 15.6 below) and shall be evidenced by the Member's
promissory note payable to the order of the Trustee. The Administrative
Committee shall have the right to make any reasonable interpretations to
implement the rate of interest charged and shall have the right to modify such
interpretations upon proper notice with respect to all future loans. Such loans
shall bear simple interest at the prime rate
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being charged at that time for loans to commercial borrowers by a major bank in
Harris County, designated by the Administrative Committee, but in no case shall
the Member pay more than the maxi mum legal rate of interest. The terms of any
loan shall be arrived at by mutual agreement between the Administrative
Committee and the Member pursuant to a uniform, nondiscriminatory policy. The
specified maturity date, including extensions, renewals, renego tiations, or
revisions, shall not be later than the earlier of (a) the Member's Normal
Retirement Date (or date of termination of employment, if earlier), or (b)
either five (5) years measured from the date the loan is made by the Trustee,
or, in the event of a home loan as described in Section 15.4, ten (10) years
measured from the date such home loan is made or such other reasonable period of
time as determined under the Code. However, a Member may request a loan with a
maturity date later than the above dates provided he agrees, in writing, to be
responsible for the payment of any taxes incurred by virtue of such maturity
date. Any loan granted under the terms of this Article XV shall be repaid on an
installment basis, with substantially equal determinable periodic payments in
principal and interest, not less often than quarterly. The borrowing Member's
Account shall serve as security for any such loan and the same shall be provided
in the promissory note made by the Member. Every loan applicant shall receive a
clear statement of the charges involved in each loan transaction. This statement
shall include the dollar amount and annual interest rate of the finance charge.
Expenses incurred by the Plan in processing a Member's loan shall be charged
against the borrowing Member.
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15.4 Home Loans. A home loan is any loan used to acquire any dwelling
unit (including, but not limited to, a house, apartment, condominium, or mobile
home not used on a transient basis) which within a reasonable time is to be used
(determined at the time the loan is made) as the principal residence of the
Member.
15.5 Recourse; Prohibition Against Distributions While Loan
Outstanding. No payment out of the Trust Fund shall ever be made to any Member,
Beneficiary, or other individual or entity under this Plan unless and until all
unpaid loans to such Member, and interest hereon, shall have been satisfied in
full. In the event a note is not paid and when due, the Administrative Committee
(or Trustee) may, in addition and without resort to such other remedies as it
may have under the law, give written notice to the Member sent to his last known
address. If the note is not paid within the thirty (30) days from the date of
such notice, the amount standing of the credit of the Member's Account in the
Trust will be charged with, but not actually reduced by, the amount of the
unpaid balance of the loan, together with the interest thereon, and the Member's
indebtedness shall thereupon be discharged. The Administrative Committee shall
then send a written notice to the Member at his last known address which
confirms the amount the Member must include in his income as a distribution from
the Plan. At the time an event requiring a distribution from the Trust Fund
occurs, such as death, disability, retirement or termination of employment, such
amount charged to the Member's Account will be applied to reduce the Member's
interest in such Account. If an event normally requiring a distribution, as
described above, occurs before any
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loan is repaid in full, the unpaid balance thereof, together with the interest
thereon, shall become due and payable and the Trustee shall first satisfy the
indebtedness from the amount in the Member's Account before making any payments
to the Member, or to such other individual or entity as determined under this
Plan.
15.6 Treatment of Loan Proceeds. All Member loans under this Article
shall be segregated into a separate pooled fund. Each member shall be credited
with his share of the repayments of interest received by this fund in proportion
to the outstanding balance of his loan to the aggregate of such balances in the
fund.
15.7 Effect on Right to Participate in Plan. Unless such Member leaves
the employ of a Signatory Company or withdraws from the Plan temporarily or
permanently, such Member shall remain a Member in good standing and shall
continue to participate in the Plan.
15.8 Minimum Loan Amounts. Notwithstanding any other provision of this
Plan, no Member shall be eligible for a loan under the provisions of this
Article XV unless the amount such loan, considered separately without regard to
or adding back to any other outstanding loans of the Member from the Plan,
exceeds the minimum limit uniformly prescribed by the Administrative Committee.
Under current Department of Labor regulations this limit may not be greater than
$1,000.00.
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 to 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 of 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; or
(c) Shall substantially increase the duties or liabilities
of the Trustee without its written consent; or
(d) Shall (except as permitted by law) reduce benefits of a
Member.
For purposes of this paragraph, 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,
retirement-type subsidy is a subsidy that continues after
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retirement, but does not include a qualified disability 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 Account balance 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
Matching Contributions and Employer Contributions to this Plan be deductible
under the applicable provisions of the Code, that such Employer Matching
Contributions and Employer Contributions not be subject to withholding under the
Code or the Federal Insurance Contributions Act; and that such Employer Matching
Contributions and 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 amend ments to his Plan which may be required for the
purpose of real izing the intentions above stated may be made retroactively.
16.3 Termination with Respect to Signatory Company Without
Establishment of a Successor Plan. 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
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respect to any other Signatory Company. This Plan shall terminate as to a
Signatory Company upon the happening of any of the following events:
(a) The approval of the Administrative Committee of a written
request by such Signatory Company to terminate the Plan, effective as
of the last day of the Plan Year in which such consent is issued;
(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/:
(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. 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 will 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.
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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Upon termination of the Plan, a Member who is partially vested in
amounts in his Account attributable to Employer Matching Contributions and
Employer Contributions 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 on account of termination of the Plan shall be made in
accordance with the distribution alternatives set forth in Article IX, Section
9.3 of the Plan.
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 provide in Article XVI 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, persons, or corporation may continue the
Plan by direction from such person, (if not a corporation); or (if a
corporation) by adopting the same 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
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Plan automatically shall be terminated and the Trust Fund shall be distributed
exclusive to the Members or their Beneficiaries in the manner provided 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 other plan or (2) a
transfer of assets and liabilities of the Plan to any other plan, each Member of
the Plan will (if the Plan then terminated) 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 (if the Plan had then been
terminated).
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 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. The Plan should be adopted by the Affiliated Company in a manner
which indicates the following:
(a) The particular classification or classifications
of its Employees which are to be eligible for membership in
the Plan; and
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(b) Its agreement to be bound as a Signatory Company by all
the terms, provisions, conditions and limitations of this Plan with
respect to its Employees eligible for membership in this Plan; and
(c) Any other information required by the Administrative
Committee or the Trustee with reference to Employees or Members.
This Plan may be adopted by compliance with the foregoing conditions on or
before the end of any Plan Year.
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 consent to 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
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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 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
provision 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. Not withstanding any
other provision of this Plan and Trust Agreement, it is specifically understood
that this Plan and Trust Agreement 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 salary
deferral plans and trusts so that the Signatory Company will be permitted to
deduct for federal income tax purposes the amount of the Deferral Contributions,
Employer Contributions (if
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any) and its Employer Matching Contributions (if any) to the Trust under the
Plan, that such Deferral Contributions, Employer Contributions (if any) and
Employer Matching Contributions (if any) 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 Deferral Contributions, Employer
Contributions (if any) and all Employer Matching Contributions (if any) made to
the Trust under the Plan by a Signatory Company prior to the initial
determination by 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, Eligible Employee, Employee or other person shall have any
right to the Employer Matching Contributions (if any) or Employer Contributions
(if any). However, Deferral Contributions allocated to each Member's Account
shall be paid to such Member. 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 Deferral Contributions, Employer Contributions (if any) and
Employer Matching Contributions (if any) as herein provided.
20.2 Conditioned on Deductibility. All employer contributions of any
kind to this Plan are expressly made conditioned on being
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allowed a deduction to the Signatory Company for federal income tax purposes.
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.
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
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attempts 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, 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. 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 a written procedure to
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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 Participant shall
be treated as the spouse of a 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, or 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
Trust 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 provision 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 successor 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 the 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
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one 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. The Trustee shall withhold Federal income
tax from all distributions from the Trust Fund to any Distributee (or,
alternatively direct the Trustee to do so, providing the Trustee with such
information as may be required under Treasury Regulations), unless such
Distributee elects a direct rollover of the distribution. For purposes of this
Sec tion 21.14, Distributee means the Member or other individual or entity
entitled to a distribution under this Plan. The manner and amount of withholding
will be determined pursuant to Section 3405 of the Code and the regulations
thereunder. The Distributee shall be timely provided with notice of
Distributee's right to elect a direct rollover to any distribution, notice of
the method of making such election, and notice of any other information required
under
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Section 401(a)(31) or Section 3405 of the Code. Procedures with respect to such
notice requirements and the Distributee's election shall be determined pursuant
to Section 3405 of the Code and the regulations thereunder. The Trustee shall
maintain records, and make returns and reports with respect to distributions and
withholding thereof, if any, as required under Section 6047(e) of the Code and
the regulations thereunder. In addition, the Trustee shall make any reports
required under Sections 402(f) and 6652(j) pertaining to explanations to
recipients of lump sum distributions from the Plan.
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.
IN WITNESS WHEREOF, this Ninth Amendment and Restatement to the Team,
Inc. Salary Deferral Plan has been entered into and is effective on the dates
set forth above.
TEAM, INC.
By: /s/ WILLIAM A. RYAN
-------------------------------
William A. Ryan, President
/s/ CLARK A. INGRAM
-------------------------------
Clark A. Ingram, Trustee
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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 on this the 15th day of
April, 1996.
/s/ RENEE PIERCE
---------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF T E X A S
My Commission Expires:
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THE STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared
Clark A. Ingram, known to me to be the person whose name is subscribed to the
foregoing instrument as Trustee, and acknow ledged 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 on this the 15th day of
April, 1996.
/s/ RENEE PIERCE
----------------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires:
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APPENDIX A
The following provisions of the Plan are effective January 1, 1987:
Sections 1.3, 1.4, 1.14, 1.20, 1.24, 1.25, 1.26, 1.27 and 1.36.
Article III
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