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EXHIBIT 10.25
WEATHERFORD INTERNATIONAL, INC.
401(k) SAVINGS PLAN
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TABLE OF CONTENTS
Section
ARTICLE I - DEFINITIONS
Account ............................................................ 1.1
Active Service ..................................................... 1.2
Actual Contribution Ratio .......................................... 1.3
Actual Deferral Percentage ......................................... 1.4
Actual Deferral Ratio .............................................. 1.5
Affiliated Employer ................................................ 1.6
Aggregate Accounts ................................................. 1.7
Aggregation Group .................................................. 1.8
Annual Additions ................................................... 1.9
Annual Compensation ................................................ 1.10
Beneficiary ........................................................ 1.11
Board of Directors ................................................. 1.12
Code ............................................................... 1.13
Committee .......................................................... 1.14
Considered Compensation ............................................ 1.15
Contribution ....................................................... 1.16
Contribution Percentage ............................................ 1.17
Determination Date ................................................. 1.18
Direct Rollover ......................................................... 1.19
Disability ......................................................... 1.20
Distributee ............................................................. 1.21
Eligible Retirement Plan ................................................ 1.22
Eligible Rollover Distribution .......................................... 1.23
Employee ........................................................... 1.24
Employer or Employers .............................................. 1.25
ERISA .............................................................. 1.26
Excess 401(k) Contributions ........................................ 1.27
Excess Aggregate 401(m) Contributions .............................. 1.28
Excess Deferral ......................................................... 1.29
Five Percent Owner ................................................. 1.30
Former Member ........................................................... 1.31
Highly Compensated Employee ........................................ 1.32
Hour of Service .................................................... 1.33
Key Employee ....................................................... 1.34
Limitation Year ......................................................... 1.35
Member ............................................................. 1.36
Non-Highly Compensated Employee .................................... 1.37
Non-Key Employee ................................................... 1.38
Period of Service .................................................. 1.39
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Period of Severance ................................................ 1.40
Plan ............................................................... 1.41
Plan Year .......................................................... 1.42
Qualified Nonelective Employer Contribution ........................ 1.43
Regulation ......................................................... 1.44
Retirement Age ..................................................... 1.45
Rollover Contribution .............................................. 1.46
Section 401(k) Contributions ....................................... 1.47
Section 401(m) Contributions ....................................... 1.48
Service ............................................................ 1.49
Severs Service ..................................................... 1.50
Sponsor ............................................................ 1.51
Top-Heavy Plan ..................................................... 1.52
Transferred ........................................................ 1.53
Trust .............................................................. 1.54
Trustee ............................................................ 1.55
Trust Fund ......................................................... 1.56
USERRA ............................................................. 1.57
Valuation Date ..................................................... 1.58
ARTICLE II - ACTIVE SERVICE
When Active Service Begins ......................................... 2.1
Aggregation of Service ............................................. 2.2
Eligibility Computation Periods .................................... 2.3
Periods of Service of Less Than One Year ........................... 2.4
Service Prior to Severance ......................................... 2.5
Service After Severance ............................................ 2.6
Periods of Severance Due to Child Birth or Adoption ................ 2.7
Transfers .......................................................... 2.8
Employment Records Conclusive ...................................... 2.9
Coverage of Certain Previously Excluded Employees .................. 2.10
Military Service ................................................... 2.11
ARTICLE III - ELIGIBILITY RULES
Eligibility Requirements ........................................... 3.1
Eligibility Upon Reemployment ...................................... 3.2
Frozen Participation ............................................... 3.3
ARTICLE IV - CONTRIBUTIONS AND THEIR LIMITATIONS
PART A. CONTRIBUTIONS
Employee After Tax Contributions ................................... 4.1
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Rollover Contributions and Direct Transfers ........................ 4.2
Salary Deferral Contributions ...................................... 4.3
Employer Matching Contributions .................................... 4.4
Employer Discretionary Contributions ............................... 4.5
Restoration Contributions .......................................... 4.6
Excluded Members ................................................... 4.7
Qualified Nonelective Employer Contribution ........................ 4.8
Top-Heavy Contribution ............................................. 4.9
Contributions Required on Return From Military Service ............. 4.10
Deadline for Payment of Contributions .............................. 4.11
PART B. LIMITATIONS APPLICABLE TO CONTRIBUTIONS
Limitations Based Upon Deductibility and the Maximum
Allocation Permitted to a Member's Account ......................... 4.11
Dollar Limitation on Salary Deferral Contributions ................. 4.12
Limitation Based Upon Actual Deferral Percentage ................... 4.13
Limitation Based Upon Contribution Percentage ...................... 4.14
Alternative Limitation Based Upon Actual Deferral
Percentage and Contribution Percentage ............................. 4.15
PART C. CORRECTION PROCEDURES FOR ERRONEOUS CONTRIBUTIONS
Excess Deferral Fail Safe .......................................... 4.16
Actual Deferral Percentage Fail Safe For Plan Years Beginning
After December 31, 1996 ........................................... 4.17
Contribution Percentage Fail Safe For Plan Years Beginning
After December 31, 1996 ........................................... 4.18
Alternative Limitation Fail Safe ................................... 4.19
Income Allocable to Excess 401(k) and Aggregate
401(m) Contributions ............................................... 4.20
Return of Contributions for Mistake, Disqualification or
Disallowance of Deduction .......................................... 4.21
ARTICLE V - PARTICIPATION
PART A. ALLOCATIONS
Allocation of Employee Contributions ............................... 5.1
Allocation of Rollover Contributions and Direct Transfers .......... 5.2
Allocation of Salary Deferral Contributions ........................ 5.3
Allocation of Employer Matching Contributions ...................... 5.4
Allocation of Employer Discretionary Contributions ................. 5.5
Allocation of Restoration Contributions ............................ 5.6
Allocation of Contribution to Excluded Members ..................... 5.7
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Allocation of Qualified Nonelective Employer Contributions ......... 5.8
Allocation of Top-Heavy Contributions .............................. 5.9
Effect of Transfers Upon Allocations ............................... 5.10
Application of Forfeitures ......................................... 5.11
Scheduled Allocation of Income or Losses and
Appreciation or Depreciation ....................................... 5.12
Interim Allocation of Income or Losses and
Appreciation or Depreciation ....................................... 5.13
PART B. LIMITATION ALLOCATIONS
PART C. INVESTMENT OF TRUST FUNDS
ARTICLE VI - DISTRIBUTIONS AND FORFEITURES
PART A. DISTRIBUTIONS
Valuation of Accounts for Distributions ............................ 6.1
Distribution on Death .............................................. 6.2
Distribution on Retirement ......................................... 6.3
Distribution on Disability ......................................... 6.4
Distribution on Severance From Service ............................. 6.5
Distributions on Issuance of a Qualified Domestic Relations Order .. 6.6
Forfeiture on Severing Service With All Affiliated Employers ....... 6.7
Forfeiture by Lost Members or Beneficiaries; Escheat ............... 6.8
PART B. FORM, ADJUSTMENTS AND TIME OF DISTRIBUTION
Form of Distributions .............................................. 6.9
Adjustment of Value of Distribution ................................ 6.10
Normal Time for Distribution ....................................... 6.11
Time Limit For Distribution ........................................ 6.12
Protected Benefits ................................................. 6.13
ARTICLE VII - WITHDRAWALS AND LOANS
Valuation of Accounts for Withdrawals and Loans ................... 7.1
Minimum Loan Amount ............................................... 7.2
Withdrawals of Employee After Tax and Rollover Accounts ........... 7.3
Withdrawal for Financial Hardship ................................. 7.4
Withdrawals On or After Age 59 1/2 ................................ 7.5
Loans ............................................................. 7.6
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ARTICLE VIII - GENERAL PROVISIONS APPLICABLE TO FILING A CLAIM, DISTRIBUTIONS
TO MINORS AND NO DUPLICATION OF BENEFITS
Claims Procedure ......................................... 8.1
No Duplication of Benefits ............................... 8.2
Distributions to Disabled or Minors ...................... 8.3
ARTICLE IX - TOP-HEAVY REQUIREMENTS
Application .............................................. 9.1
Top-Heavy Test ........................................... 9.2
Vesting Restrictions if Plan Becomes Top-Heavy ........... 9.3
Minimum Contribution if Plan Becomes Top-Heavy ........... 9.4
Coverage Under Multiple Top-Heavy Plans .................. 9.5
Restrictions if Plan Becomes Super-Top-Heavy ............. 9.6
ARTICLE X - ADMINISTRATION OF THE PLAN
Appointment, Term of Service & Removal ................... 10.1
Powers ................................................... 10.2
Organization ............................................. 10.3
Quorum and Majority Action ............................... 10.4
Signatures ............................................... 10.5
Disqualification of Committee Member ..................... 10.6
Disclosure to Members .................................... 10.7
Standard of Performance .................................. 10.8
Liability of Committee and Liability Insurance ........... 10.9
Exemption from Bond ...................................... 10.10
Compensation ............................................. 10.11
Persons Serving in Dual Fiduciary Roles .................. 10.12
Administrator ............................................ 10.13
Standard of Judicial Review of Committee Actions ......... 10.14
ARTICLE XI - TRUST FUND AND CONTRIBUTIONS
Funding of Plan .......................................... 11.1
Incorporation of Trust ................................... 11.2
Authority of Trustee ..................................... 11.3
Allocation of Responsibility ............................. 11.4
ARTICLE XII - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure ....................................... 12.1
No Joint Venture Implied ................................. 12.2
All Trust Assets Available to Pay All Benefits ........... 12.3
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Qualification a Condition Precedent to Adoption
and Continued Participation .............................. 12.4
ARTICLE XIII - AMENDMENT AND WITHDRAWAL OR TERMINATION
PART A. AMENDMENT
Right to Amend ........................................... 13.1
Limitation on Amendments ................................. 13.2
Each Employer Deemed to Adopt Amendment Unless Rejected .. 13.3
Amendment Applicable Only to Members Still Employed
Unless Amendment Specifically Provides Otherwise ......... 13.4
Mandatory Amendments ..................................... 13.5
PART B. WITHDRAWAL OR TERMINATION
Withdrawal of Employer ................................... 13.6
Termination of Plan ...................................... 13.7
100% Vesting Required on Partial or Complete Termination
or Complete Discontinuance ............................... 13.8
Distribution Upon Termination ............................ 13.9
ARTICLE XIV - SALE OF EMPLOYER OR SUBSTANTIALLY ALL OF ITS ASSETS
Continuance Permitted Upon Sale or Transfer of Assets ..... 14.1
Distributions Upon Disposition of Assets or a Subsidiary .. 14.2
ARTICLE XV - MISCELLANEOUS
Plan Not An Employment Contract ........................... 15.1
Benefits Provided Solely From Trust ....................... 15.2
Anti-Alienation Provision ................................. 15.3
Requirements Upon Merger or Consolidation of Plans ........ 15.4
Gender and Number ......................................... 15.5
Severability .............................................. 15.6
Governing Law; Parties to Legal Actions ................... 15.7
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WEATHERFORD INTERNATIONAL, INC.
401(K) SAVINGS PLAN
Weatherford International, Inc. has entered into the following Agreement:
WITNESSETH:
WHEREAS, Weatherford International, Inc. has heretofore adopted a
qualified profit sharing plan with a 401(k) feature and exempt trust for the
exclusive benefit of its employees and their beneficiaries; and
WHEREAS, it has been determined that the plan should now be completely
amended, restated and continued without a gap or lapse in coverage, time or
effect which would cause any Member to become fully vested or entitled to
distribution, in order to (a) effect numerous technical changes for the benefit
of eligible employees and beneficiaries, and (b) to ensure the plan's
qualification under the applicable provisions of the Internal Revenue Code of
1986, as amended, and the Employee Retirement Income Security Act of 1974, as
amended; and
WHEREAS, it is intended that other business organizations may adopt this
plan and its related trust for the exclusive benefit of their employees and
their employees' beneficiaries;
NOW, THEREFORE, this Agreement is entered into in order to set forth the
terms of that profit sharing plan with a 401(k) feature which are as follows:
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ARTICLE I.
DEFINITIONS
The words and phrases defined in this Article shall have the meaning set
out in the definition unless the context in which the word or phrase appears
reasonably requires a broader, narrower or different meaning.
1.1 "ACCOUNT" means all ledger accounts pertaining to a Member which are
maintained by the Committee to reflect the Member's interest in the Trust Fund.
The Committee shall establish the following Accounts and any additional
Accounts that the Committee considers necessary to reflect the entire interest
of the Member in the Trust Fund. Each of the Accounts listed below and any
additional Accounts established by the Committee shall reflect the
Contributions or amounts transferred to the Trust Fund, if any, and the
appreciation or depreciation of the assets in the Trust Fund and the income
earned or loss incurred on the assets in the Trust Fund attributable to the
Contributions and/or other amounts transferred to the Account.
(a) Employee After Tax Contribution Account - The Member's after tax
contributions, if any.
(b) Salary Deferral Contribution Account - The Member's before tax
contributions, if any.
(c) Employer Matching Contribution Account - The Employer's matching
contributions allocated to the Member, if any.
(d) Employer Discretionary Contribution Account - The Employer's
discretionary contributions, if any.
(e) Qualified Nonelective Employer Contribution Account - The
Employer's Qualified Nonelective Employer Contributions allocated to the
Member, if any.
(f) Rollover Account - Funds transferred from another qualified plan
or IRA Account for the benefit of a Member.
(g) Grant Plan Prior Plan Account
(h) Prideco Plan Prior Plan Account
(i) Enerpro Plan Prior Plan Account
(j) TCA Plan Prior Plan Account
(k) Tube-Alloy Plan Prior Plan Account
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(l) XL Systems Plan Prior Plan Account
(m) Weatherford Plan Prior Plan Account (this Prior Plan Account
refers to assets attributable to a merger into the Weatherford Enterra,
Inc. 401(k) Savings Plan by Total Energy Service Company).
1.2 "ACTIVE SERVICE" means the Periods of Service which are counted for
either eligibility or vesting purposes as calculated under Article II.
1.3 "ACTUAL CONTRIBUTION RATIO" means for an Employee the ratio of Section
401(m) Contributions actually paid into the Trust on behalf of the Employee for
a Plan Year to the Employee's Annual Compensation earned while the Employee was
a Member for the same Plan Year.
1.4 "ACTUAL DEFERRAL PERCENTAGE" means for a specified group of Employees
for a Plan Year the average of the ratios (calculated separately for each
Employee in the group) of the sum of Section 401(k) Contributions actually paid
into the Trust on behalf of each Employee for that Plan Year to the Employee's
Annual Compensation earned while the Employee was a Member for the same Plan
Year.
1.5 "ACTUAL DEFERRAL RATIO" means for an Employee the ratio of Section
401(k) Contributions actually paid into the Trust on behalf of the Employee for
a Plan Year to the Employee's Annual Compensation earned while the Employee was
a Member for the same Plan Year.
1.6 "AFFILIATED EMPLOYER" means the Employer and any employer which is a
member of the same controlled group of corporations within the meaning of
section 414(b) of the Code, which is a trade or business (whether or not
incorporated) which is under common control within the meaning of section
414(c) of the Code, which is a member of an affiliated service group within the
meaning of section 414(m) of the Code with the Employer, or which is required
to be aggregated with the Employer under section 414(o) of the Code. For
purposes of the limitation on allocations contained in Part B of Article V, the
definition of Affiliated Employer is modified by substituting the phrase "more
than 50 percent" in place of the phrase "at least 80 percent" each place the
latter phrase appears in section 1563(a)(1) of the Code.
1.7 "AGGREGATE ACCOUNTS" means the total of all Account balances derived
from Employer Contributions and Employee Contributions.
1.8 "AGGREGATION GROUP" means (a) each plan of the Employer or any
Affiliated Employer in which a Key Employee is a Member and (b) each other plan
of the Employer or any Affiliated Employer which enables any plan in (a) to
meet the requirements of either section 401(a)(4) or 410 of the Code. Any
Employer may treat a plan not required to be included in the Aggregation Group
as being a part of the group if the group would continue to meet the
requirements of sections 401(a)(4) and 410 of the Code with that plan being
taken into account.
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1.9 "ANNUAL ADDITIONS" means the sum of the following amounts credited on
behalf of a Member for the Limitation Year: (a) Employer Contributions, (b)
Employee After Tax Contributions, and (c) forfeitures. Excess 401(k)
Contributions and Excess Aggregate 401(m) Contributions for a Plan Year are
treated as Annual Additions for that Plan Year even if they are corrected
through distribution or recharacterization. Excess Deferrals that are timely
distributed as set forth in Section 4.12 shall not be treated as Annual
Additions.
1.10 "ANNUAL COMPENSATION" means the Employee's wages from the Affiliated
Employers as defined in section 3401(a) of the Code for purposes of federal
income tax withholding at the source (but determined without regard to any
rules that limit the remuneration included in wages based on the nature or
location of the employment or the services performed) modified by including
elective contributions under a cafeteria plan described in section 125 of the
Code and elective contributions to any plan qualified under section 401(k),
408(k), or 403(b) of the Code. However, for purposes of Part B of Article V of
the Plan, effective for Limitation Years beginning before January 1, 1998,
"Annual Compensation" does not include any salary deferral contributions to a
plan qualified under section 401(k) of the Code or any amount that is deferred
at the election of the Employee and is not includable in the gross income of
the Employee by reason of section 125 of the Code. Except for purposes of Part
B of Article V of the Plan, Annual Compensation in excess of $150,000.00 (as
adjusted by the Secretary of Treasury) shall be disregarded. If the Plan Year
is ever less than 12 months the $150,000.00 limitation (as adjusted by the
Secretary of Treasury) will be prorated by multiplying the limitation by a
fraction, the numerator of which is the number of months in the Plan Year, and
the denominator of which is 12. For purposes of determining an Employee's
Actual Contribution Ratio or Actual Deferral Ratio, Annual Compensation shall
include only compensation earned during the portion of the Plan Year that the
Employee was eligible to participate in the Plan.
1.11 "BENEFICIARY" or Beneficiaries means the person or persons, or the
trust or trusts created for the benefit of a natural person or persons or the
Member's or Former Member's estate, designated by the Member or Former Member
to receive the benefits payable under this Plan upon his death.
1.12 "BOARD OF DIRECTORS" means the board of directors, the executive
committee or other body given management responsibility for the Sponsor.
1.13 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
1.14 "COMMITTEE" means the committee appointed by the Sponsor to
administer the Plan.
1.15 "CONSIDERED COMPENSATION" means as to each Employee, that Employee's
Annual Compensation (wages subject to withholding modified by including
elective contributions under a cafeteria plan described in section 125 of the
Code and elective contributions to any plan qualified under section 401(k),
408(k) or 403(b) of the Code). For purposes of any Employer Matching
Contribution, and any Employer Discretionary Contribution, Considered
Compensation shall exclude the following items (even if includable in gross
income): overtime pay, foreign service premiums, position allowances or
location coefficient payments, call-in premiums, bonuses, sales commissions,
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reimbursements or other expense allowances, fringe benefits (cash and
non-cash), moving expenses, deferred compensation, welfare benefits, amounts
includable in gross income as a result of an exercise of a stock option or a
stock appreciation right, and other items not part of the Employee's base pay.
Considered Compensation in excess of $150,000.00 (as adjusted by the Secretary
of Treasury) shall be disregarded. If the Plan Year is ever less than 12
months the $150,000.00 limitation (as adjusted by the Secretary of Treasury)
will be prorated by multiplying the limitation by a fraction, the numerator of
which is the number of months in the Plan Year, and the denominator of which is
12.
1.16 "CONTRIBUTION" means the total amount of contributions made under the
terms of this Plan. Each specific type of Contribution shall be designated by
the type of contribution made as follows:
(a) Employee After Tax Contribution - After tax contributions made
by the Employee.
(b) Salary Deferral Contribution - Contributions made by the
Employer under the Employee's salary deferral agreement.
(c) Employer Matching Contribution - Matching contributions made by
the Employer.
(d) Employer Discretionary Contribution - Contributions made by the
Employer on a discretionary basis.
(e) Qualified Nonelective Employer Contribution - Qualified
Nonelective Employer Contributions made by the Employer as a means of
passing the actual deferral percentage test of section 401(k) of the Code
or the actual contribution percentage test of section 401(m) of the Code.
(f) Rollover Contribution - Contributions made by a Member which
consist of any part of an Eligible Rollover Distribution (as defined in
section 402 of the Code) from a qualified employee trust described in
section 401(a) of the Code or an IRA Rollover Account.
1.17 "CONTRIBUTION PERCENTAGE" means for a specified group of Employees
for a Plan Year the average of the ratios (calculated separately for each
Employee in the group) of the sum of Section 401(m) Contributions actually paid
into the Trust on behalf of each Employee for that Plan Year to the Employee's
Annual Compensation earned while the Employee was a Member for that Plan Year.
1.18 "DETERMINATION DATE" means for a given Plan Year the last day of the
preceding Plan Year or in the case of the first Plan Year the last day of that
Plan Year.
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1.19 "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.20 "DISABILITY" means a mental or physical disability which, in the
opinion of a physician selected by the Committee, will prevent the Member from
earning a reasonable livelihood with any Affiliated Employer and which can be
expected to result in death or which has lasted or can be expected to last for
a continuous period of not less than 12 months and which: (a) was not
contracted, suffered or incurred while the Member was engaged in, or did not
result from having engaged in, a felonious criminal enterprise; (b) did not
result from alcoholism or addiction to narcotics; and (c) did not result from
an injury incurred while a member of the Armed Forces of the United States for
which the Member receives a military pension.
1.21 "DISTRIBUTEE" means an Employee or former Employee, and in addition,
the Employee's or former Employee's surviving spouse or 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,
with regard to the interest of the spouse or former spouse.
1.22 "ELIGIBLE RETIREMENT PLAN" means an individual retirement account
described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in section
403(a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the Distributee's Eligible Rollover 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.
1.23 "ELIGIBLE ROLLOVER DISTRIBUTION" as defined in section 402 of the
Code means any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution does not
include: (a) 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 Beneficiary, or for a
specified period of ten years or more; (b) any distribution to the extent the
distribution is required under section 401(a)(9) of the Code; and (c) the
portion of any distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities). For any distribution after December 31, 1999, an
Eligible Rollover Distribution also does not include any hardship distribution
described in section 401(k)(2)(B)(i)(IV) of the Code.
If the Plan accepts a Rollover Contribution which the Trustee reasonably
concludes is qualified under this Section of the Plan, and subsequently it is
determined that such distribution was not qualified, the Trustee shall
distribute the amount of such rollover distribution, plus earnings thereon, to
the Member in compliance with applicable Regulations.
1.24 "EMPLOYEE" means all common law employees of each Employer exclusive
of the following classifications: (a) employees working outside of the United
States unless the Committee elects to cover or continue to cover them in this
Plan and (b) all leased employees who are required to be treated as common law
employees under section 414(n) of the Code unless the Plan's qualified
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status is dependent upon coverage of the leased employees. Independent
contractors are not common law employees and are therefore not within the
defined term "Employee" as used in this Plan. The determination of whether a
person is within an excluded class or is an independent contractor shall be
made by the Committee in its sole discretion as granted in Article X. However,
if either one or more individuals who are classified as leased employees or
independent contractors are later determined to be in fact common law employees
of an Employer, they are nevertheless to be excluded as a classification unless
the Plan's qualified status is dependent upon the coverage of that
classification of persons.
1.25 "EMPLOYER" or "EMPLOYERS" means the Sponsor and any other business
organization which has adopted this Plan.
1.26 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.27 "EXCESS 401(K) CONTRIBUTIONS" means, with respect to any Plan Year,
the excess of (a) the aggregate amount of Section 401(k) Contributions actually
paid into the Trust on behalf of Highly Compensated Employees for the Plan Year
over (b) the maximum amount of those contributions permitted under the
limitations set out in the first sentence of Section 4.13 of the Plan.
1.28 "EXCESS AGGREGATE 401(M) CONTRIBUTIONS" means, with respect to any
Plan Year, the excess of (a) the aggregate amount of Section 401(m)
Contributions actually paid into the Trust on behalf of Highly Compensated
Employees for the Plan Year over (b) the maximum amount of those contributions
permitted under the limitations set out in the first sentence of Section 4.14
of the Plan.
1.29 "EXCESS DEFERRAL" means that part, if any, of the Salary Deferral
Contribution of a Member for his taxable year which, when added to the amounts
he deferred under other plans or arrangements described in sections 401(k),
408(k) and 403(b) of the Code, exceeds the deferral dollar limitation permitted
by section 402(g) of the Code.
1.30 "FIVE PERCENT OWNER" means an Employee who is a 5-percent owner as
defined in section 416(i) of the Code.
1.31 "FORMER MEMBER" means a person who was at one time a Member who
received allocations of Contributions and who is no longer a Member under the
Plan, but still has an Account balance in the Plan.
1.32 "HIGHLY COMPENSATED EMPLOYEE" means, effective for Plan Years
beginning after December 31, 1996, an Employee or an employee of an Affiliated
Employer who: (a) during the Plan Year or the preceding Plan Year was at any
time a Five Percent Owner or (b) for the preceding year had Annual Compensation
in excess of $80,000.00 (as adjusted from time to time by the Secretary of the
Treasury) and was in the group consisting of the top 20 percent of the
Employees when ranked on the basis of Annual Compensation paid during the
preceding year. A former Member will be treated as a Highly Compensated
Employee if he was a Highly Compensated
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Employee when he Severed Service or he was a Highly Compensated Employee at any
time after attaining age 55. Non-resident aliens who receive no earned income
from the employer which constitutes income from sources within the United
States are excluded.
1.33 "HOUR OF SERVICE" means each hour for which an Employee is paid or
entitled to payment for the performance of duties with an Affiliated Employer.
1.34 "KEY EMPLOYEE" means an Employee or former or deceased Employee or
Beneficiary of an Employee who at any time during the Plan Year or any of the
four preceding Plan Years is (a) an officer of an Employer or any Affiliated
Employer having an Annual Compensation greater than 50% of the annual addition
limitation of section 415(b)(1)(A) of the Code for the Plan Year, (b) one of
the 10 employees having an Annual Compensation from an Employer or any
Affiliated Employer of greater than 100% of the annual addition limitation of
section 415(c)(1)(A) of the Code for the Plan Year and owning or considered as
owning (within the meaning of section 318 of the Code) the largest interest in
an Employer or any Affiliated Employer, treated separately, (c) a Five Percent
Owner of an Employer or any Affiliated Employer, treated separately, or (d) a
1% owner of an Employer or any Affiliated Employer, treated separately, having
Annual Compensation from an Employer or any Affiliated Employer of more than
$150,000.00, as adjusted. For this purpose no more than 50 employees or, if
lesser, the greater of three employees or 10% of the employees shall be treated
as officers. Section 416(i) of the Code shall be used to determine percentage
of ownership. For the purpose of the test set out in (b) above, if two or more
employees have the same interest in an Employer, the employee with the greater
Annual Compensation from the Employer shall be treated as having the larger
interest.
1.35 LIMITATION YEAR" means the year used for purposes of applying the
limitations under section 415 of the Code. The Limitation Year shall be the
Plan Year unless the Employer affirmatively, by resolution, designates another
limitation year.
1.36 "MEMBER" means the person or persons employed by an Employer who are
eligible to participate in this Plan.
1.37 "NON-HIGHLY COMPENSATED EMPLOYEE" means any Employee who is not a
Highly Compensated Employee.
1.38 "NON-KEY EMPLOYEE" means any Employee who is not a Key Employee.
1.39 "PERIOD OF SERVICE" means a period of employment with an Affiliated
Employer which commences on the day on which an Employee performs his initial
Hour of Service or performs his initial Hour of Service upon returning to the
employ of an Affiliated Employer, whichever is applicable, and ends on the date
the Employee Severs Service.
1.40 "PERIOD OF SEVERANCE" means the period of time which commences on the
date an Employee Severs Service and ends on the date the Employee again
performs an Hour of Service.
1.41 "PLAN" means this Plan, including all subsequent amendments.
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1.42 "PLAN YEAR" means the calendar year. The Plan Year shall be the
fiscal year of this Plan.
1.43 "QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTION" means the Employer's
Contribution, if any, made as a means of passing the Actual Deferral Percentage
test or the Contribution Percentage test.
1.44 "REGULATION" means the Internal Revenue Service regulation specified,
as it may be changed from time to time.
1.45 "RETIREMENT AGE" means normally 65 years of age. Once a Member has
attained his Retirement Age he shall be 100% vested at all times.
1.46 "ROLLOVER CONTRIBUTION" means the amount contributed by a Member to
his Account in this Plan which consists of any part or all of an Eligible
Rollover Distribution.
1.47 "SECTION 401(K) CONTRIBUTIONS" means the sum of Salary Deferral
Contributions made on behalf of the Member during the Plan Year and Qualified
Nonelective Employer Contributions that the Employer elects to have treated as
Section 401(k) Contributions pursuant to section 401(k)(3)(D)(ii) of the Code
to the extent that those contributions are not used to enable the Plan to
satisfy the minimum contribution requirements of section 416 of the Code.
1.48 "SECTION 401(M) CONTRIBUTIONS" means the sum of Employer Matching
Contributions and Employee After Tax Contributions made on behalf of the Member
during the Plan Year and Qualified Nonelective Employer Contributions that the
Employer elects to have treated as Section 401(m) Contributions pursuant to
section 401(m)(3)(B) of the Code to the extent that those contributions are not
used to enable the Plan to satisfy the minimum contribution requirements of
section 416 of the Code.
1.49 "SERVICE" means the period or periods that a person is paid or is
entitled to payment for performance of duties with an Affiliated Employer.
1.50 "SEVERS SERVICE" means the earlier of the following events: (a) the
Employee's quitting, retiring, dying or being discharged, (b) the completion of
a period of 365 continuous days in which the Employee remains absent from
Service (with or without pay) for any reason other than quitting, retiring,
dying or being discharged, such as vacation, holiday, sickness, disability,
leave of absence, layoff or any other absence or (c) the second anniversary of
the commencement of a continuous period of absence occasioned by the reason of
the pregnancy of the Employee, the birth of a child of the Employee, the
placement of a child with the Employee in connection with the adoption of the
child by the Employee or the caring for the child for a period commencing
immediately after the child's birth or placement.
1.51 "SPONSOR" means Weatherford International, Inc. or any other
organization which assumes the primary responsibility for maintaining this Plan
with the consent of the last preceding Sponsor.
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1.52 "TOP-HEAVY PLAN" means any plan which has been determined to be
top-heavy under the test described in Article IX of this Plan.
1.53 "TRANSFERRED" means an Employee's termination of employment with one
Employer and his contemporaneous commencement of employment with another
Employer.
1.54 "TRUST" means the one or more trust estates created to fund this
Plan.
1.55 "TRUSTEE" means collectively one or more persons or entities with
trust powers which have been appointed by the initial Sponsor and have accepted
the duties of Trustee and any and all successor or successors appointed by the
Sponsor or successor Sponsor.
1.56 "TRUST FUND" means all of the trust estates established under the
terms of this Plan to fund this Plan, whether held to fund a particular group
of Accounts or held to fund all of the Accounts of Members, collectively.
1.57 USERRA: means the Uniformed Services Employment And Reemployment
Rights Act of 1994 which was enacted on October 13, 1994 as Public Law 103-353
and which amended Chapter 43 of Title 38 of the United States Code.
1.58 "VALUATION DATE" means the day or days each Plan Year selected by the
Committee on which the Trust Fund is to be valued which cannot be less frequent
than annual. One or more Accounts may have different Valuation Dates from
other Accounts. The Valuation Date must be announced to all Members and Former
Members who have Account Balances and shall remain the same until changed by
the Committee and announced to the Members.
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ARTICLE II.
ACTIVE SERVICE
2.1 WHEN ACTIVE SERVICE BEGINS. For purposes of eligibility and vesting,
Active Service begins when an Employee first performs an Hour of Service for an
Affiliated Employer or an employer the stock or assets of which were or are
acquired by an Employer or Affiliated Employer without regard to whether a
predecessor plan was maintained, limited to five years of past service credit.
Once an Employee has begun Active Service for purposes of eligibility or
vesting and Severs Service he shall recommence Active Service for those
purposes when he again performs an Hour of Service for an Affiliated Employer.
2.2 AGGREGATION OF SERVICE. When determining an Employee's Active
Service, all Periods of Service, whether or not completed consecutively, shall
be aggregated on a per day basis. Thirty days shall be counted as one month
and 12 months shall be counted as one year. For purposes of eligibility and
vesting, only full years of Active Service shall be counted, any fractional
year shall be dropped.
2.3 ELIGIBILITY COMPUTATION PERIODS. For the purpose of determining
eligibility and vesting, the initial period shall begin on the day the Employee
first performs an Hour of Service and each future year shall begin on the
anniversary of that date.
2.4 PERIODS OF SERVICE OF LESS THAN ONE YEAR. If an Employee performs an
Hour of Service within 12 months after he Severs Service, the intervening
Period of Severance shall be counted as a Period of Service.
2.5 SERVICE PRIOR TO SEVERANCE. If the Employee was covered by the Plan
or a predecessor qualified plan on December 31, 1984, any Period of Service
occurring before the first Plan Year beginning after that date shall be
disregarded if that Service would have been disregarded under the rules
applicable to breaks in service at that time under the Plan or a predecessor
qualified plan prior to that date. Any Period of Service occurring during or
after the first Plan Year beginning after December 31, 1984 shall be governed
by the following rules. If an Employee Severs Service at a time when he does
not have any vested right to amounts credited to his Employer Matching
Contribution Account or Employer Discretionary Contribution Account and the
Period of Severance continues for a continuous period of five years or more,
the Period of Service completed by the Employee before the Period of Severance
shall not be taken into account if his Period of Severance equals or exceeds
his Period of Service, whether or not consecutive, completed before the Period
of Severance. In addition if a Member incurs a Period of Severance of five
consecutive years, the Members years of Credited Service for vesting completed
after that Period of Severance shall be disregarded in determining the Member's
vested interest in that portion of his Accounts derived from Employer
Contributions on his behalf prior to the Period of Severance.
2.6 SERVICE AFTER SEVERANCE. If an Employee's Period of Severance
continues for a continuous period of five years or more, the Period of Service
completed by the Employee after that
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Period of Severance shall not be taken into account in determining the
Employee's vested interest in amounts contributed to his Employer Matching
Contribution Account, and earnings thereon, attributable to Service before that
Period of Severance.
2.7 PERIODS OF SEVERANCE DUE TO CHILD BIRTH OR ADOPTION. If the period of
time between the first anniversary of the first day of an absence from Service
by reason of the pregnancy of the Employee, the birth of a child of the
Employee, the placement of a child with the Employee in connection with the
adoption of the child by the Employee or for purposes for caring for the child
for a period beginning immediately after the birth or placement and the second
anniversary of the first day of the absence occurs during or after the first
Plan Year beginning after December 31, 1984, it shall neither be counted as a
Period of Service nor of Severance.
2.8 TRANSFERS. If an Employee is Transferred from one Employer to
another, his Active Service shall not be interrupted and he shall continue to
be in Active Service for purposes of eligibility, vesting and allocation of
Contributions and/or forfeitures. If an Employee is transferred to the service
of an Affiliated Employer that has not adopted the Plan he shall not have
Severed Service; however, even though he shall continue to be in Active Service
for eligibility and vesting purposes he shall not receive any allocation of
Contributions or forfeitures.
2.9 EMPLOYMENT RECORDS CONCLUSIVE. The employment records of the Employer
shall be conclusive for all determinations of Active Service.
2.10 COVERAGE OF CERTAIN PREVIOUSLY EXCLUDED EMPLOYEES. Any Employee who
is no longer excludable because he or she is no longer included in a unit of
Employees covered by a collective bargaining agreement between the Employees'
representative and the Employer where retirement benefits were the subject of
good faith bargaining shall immediately become eligible for membership if he
meets the eligibility requirements. All his Service with any Affiliated
Employer that would have been counted had he not been previously excluded shall
now be counted as Active Service for eligibility and vesting purposes.
2.11 MILITARY SERVICE. A Member who leaves the employ of an Employer to
enter the armed services of the United States and is covered by USERRA shall
not be deemed to have broken his continuous employment if he is reemployed
under USERRA. And, the Member shall be awarded Active Service upon
reemployment for each period served by him in the uniformed services for
eligibility, vesting and benefit accrual purposes.
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ARTICLE III.
ELIGIBILITY RULES
3.1 ELIGIBILITY REQUIREMENTS. Except as otherwise provided for in this
Plan, each Employee shall be eligible to participate in this Plan beginning on
the first day the Employee completes an Hour of Service. However, no Employee
shall be eligible to participate in this Plan for purposes of sharing in
Employer Matching Contributions or Employer Discretionary Contributions until
the first day he completes one year of Active Service. An Employee employed as
a temporary or part-time employee shall not be eligible to commence
participation in the Plan until the first day the temporary or part-time
employee completes one year of Active Service. A "temporary" or "part-time"
Employee (as defined by the Committee) is an Employee who is not expected to be
credited with one year of Active Service commencing on his first day of
employment. Employees who are included in a unit of Employees covered by a
collective bargaining agreement between the Employees' representative and the
Employer, shall be excluded, even if they have met the requirements for
eligibility, if there has been good faith bargaining between the Employer and
the Employees' representative pertaining to retirement benefits and the
agreement does not require the Employer to include such Employees in this Plan.
In addition, any Employee who is a non-resident alien with no United States
source income or an individual participating in a retirement plan maintained by
the Employer or an Affiliated Employer outside the United States shall likewise
be ineligible to participate in the Plan.
3.2 ELIGIBILITY UPON REEMPLOYMENT. If an Employee Severs Service with the
Employer for any reason after fulfilling the eligibility requirements but prior
to the date he initially begins participating in the Plan, the Employee shall
be eligible to begin participation in this Plan on the day he first completes
an Hour of Service upon his return to employment with an Employer. Once an
Employee has become eligible to be a Member, his eligibility shall continue
until he Severs Service. A former Member shall be eligible to recommence
participation in this Plan on the first day he completes an Hour of Service
upon his return to employment with an Employer.
3.3 FROZEN PARTICIPATION. An employee employed by an Affiliated Employer,
which has not adopted this Plan, cannot actively participate in this Plan even
though he accrues Active Service. Likewise, if an Employee: (a) is
transferred from an Employer to an Affiliated Employer which has not adopted
this Plan, (b) is a Member of this Plan when he is excluded from this Plan
because he becomes excluded under the provisions of a collective bargaining
agreement or because he becomes a leased employee or an independent contractor
and he has not had a complete termination of his contractual relationship with
all Affiliated Employers, (c) is a non-resident alien with no United States
source income, (d) participates in a retirement plan maintained by the Employer
or an Affiliated Employer outside the United States, or (e) is a Member of the
Plan when he is employed outside the United States and is not designated by the
Committee to continue to be eligible to participate, his participation becomes
inactive. Under these circumstances, the Member's Account becomes frozen: he
cannot contribute to the Plan nor can he share in the allocation of any
Employer Contribution or forfeitures for the frozen period. However, his
Accounts shall continue to share in any appreciation or depreciation of the
Trust Fund and in any income earned or losses incurred by
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the Trust Fund during the frozen period of time. Once the contract or
contracts of an independent contractor, who has a frozen Account, have expired
with all Affiliated Employers in a good-faith and complete termination of the
contractual relationship and no renewal is expected or once an employee who has
a frozen Account terminates his employment with all Affiliated Employers, he
shall have Severed Service for purposes of distribution of benefits.
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ARTICLE IV.
CONTRIBUTIONS AND THEIR LIMITATIONS
PART A. CONTRIBUTIONS
4.1 EMPLOYEE AFTER TAX CONTRIBUTIONS. The Committee may permit Employee
After Tax Contributions to be made by Members from time to time. If the
Committee permits Contributions by Members, the opportunity must be made
available to all Members on a nondiscriminatory basis. If the Committee
decides to stop all Contributions by Members, the Contributions to the
effective date of the announcement shall be retained in the Trust Fund subject
to the right of withdrawal described under this Plan.
Employee After Tax Contributions are limited to an amount which, when
added to the other amounts required to be taken into consideration, will not
exceed the limit set by section 415 of the Code and will meet the Contribution
Percentage test described in section 401(m) of the Code.
Changes in the rate of Employee After Tax Contributions and suspension of
those Contributions shall be permitted under any uniform method determined from
time to time by the Committee.
4.2 ROLLOVER CONTRIBUTIONS AND DIRECT TRANSFERS. The Committee may permit
Rollover Contributions by Members and/or direct transfers to or from another
qualified plan on behalf of Members from time to time. If Rollover
Contributions and/or direct transfers to or from another qualified plan are
permitted, the opportunity to make those Contributions must be made available
to all Members on a nondiscriminatory basis. For this purpose, all Employees
of an Employer who are in a classification which may participate in this Plan
shall be considered to be Members of the Plan even though they may not have met
the eligibility requirements. However, they shall not be entitled to elect to
have Salary Deferral Contributions or Employee After Tax Contributions or share
in any Employer Contribution unless and until they have met the requirements
for eligibility and allocation.
A Rollover Contribution shall not be accepted unless it is directly rolled
over to this Plan in a roll over described in section 401(a)(31) of the Code
and the property is acceptable to the Trustee. A direct transfer of assets
from another qualified plan in a transfer subject to the requirements of
section 414(l) of the Code shall not be accepted if it was at any time part of
the plan which contained a right, feature or benefit not contained in this Plan
unless the Committee, in its sole discretion, agrees to continue to provide
that right, feature or benefit to that portion of the Member's Account.
Rollover Contributions shall have no effect upon the amount permitted to
be allocated to a Member's Account under section 415 of the Code, or the amount
contributed to the Plan by a Member under Section 4.1.
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4.3 SALARY DEFERRAL CONTRIBUTIONS. Each Employer shall contribute for
each Plan Year the amount by which the Member's Considered Compensation is
reduced as a result of a salary deferral agreement, not to exceed 16% of the
amount of the Member's Considered Compensation for the Plan Year less the
amount of the Member's Employee After Tax Contribution, if any, as set by the
Committee from time to time in a nondiscriminatory manner and announced to the
Members.
The election to have Salary Deferral Contributions made, the ability to
change the rate of Salary Deferral Contributions, the right to suspend Salary
Deferral Contributions, and the manner of commencing new Salary Deferral
Contributions shall be permitted under any uniform method determined from time
to time by the Committee.
4.4 EMPLOYER MATCHING CONTRIBUTIONS. Each Employer shall contribute for
each Plan Year an amount, in cash or in common stock of the Sponsor (the number
of shares to be determined using the closing sales price on the business day
preceding the day of the contribution), at the sole discretion of the Board of
Directors, equal to 50% of the Salary Deferral Contribution (modified to
exclude those items in the second sentence of Section 1.15 of the Plan) made by
each Member after the date he completes one year of Active Service, but not
more than 6% of the Member's Considered Compensation.
4.5 EMPLOYER DISCRETIONARY CONTRIBUTIONS. Each Employer shall contribute
for each Plan Year an amount, if any, in cash or in common stock of the Sponsor
(the number of shares to be determined using the closing sales price on the
business day preceding the day of the contribution), at the sole discretion of
the Board of Directors, which is designated by the Board of Directors to be the
Employer Discretionary Contribution for the Plan Year.
4.6 RESTORATION CONTRIBUTIONS. Each Employer shall contribute for each
Plan Year an amount, which when added to previously unapplied and unallocated
forfeitures, shall equal the amounts which were not vested and therefore
forfeited by Members who have previously terminated but who have now become
entitled to have their forfeited amounts restored plus an amount equal to the
value of all forfeited benefits for Members who formerly could not be located,
but have now filed a claim.
4.7 EXCLUDED MEMBERS. The Sponsor shall contribute an amount determined
by the Sponsor if at any time it discovers one or more Employees have been
erroneously excluded from participation or a clerical error has caused one or
more Members to not be credited with his or their proper allocation of Employer
Contributions. The amount of the contribution will equal (i) the average
deferral percentage for the employee's compensation group (either highly
compensated or nonhighly compensated), (ii) an amount that would have been
allocated to such excluded Employee or Member as a matching contribution based
on the amount contributed in (i) above if such contribution was otherwise made,
and (iii) an amount that would have been allocated to such excluded Employee or
Member as an Employer Discretionary Contribution, if such a contribution was
otherwise made. Any amount contributed under (i) of this provision will be
deemed a "qualified nonelective contribution" under Section 1.401(k)-1(g)(7) of
the Regulations and is subject to all conditions required by the Regulations in
order for them to be used in the Actual Deferral Percentage
IV-2
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test. Amounts contributed under (ii) and (iii) of this provision are subject
to the vesting schedule set forth in Section 6.5.
4.8 QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTION. Each Employer concerned
shall contribute for a given Plan Year an amount, if any, which is designated
by the Board of Directors to be the Qualified Nonelective Employer Contribution
for the Plan Year.
A Member's right to benefits derived from Qualified Nonelective Employer
Contributions made to the Plan on his behalf shall be nonforfeitable. In no
event will Qualified Nonelective Employer Contributions be distributed before
Salary Deferral Contributions may be distributed.
4.9 TOP-HEAVY CONTRIBUTION. Each Employer concerned shall contribute for
a given Plan Year an amount which is equal to the amount, if any, necessary to
fulfill the Top-Heavy Plan requirements found in Article IX if the Plan is
determined to be a Top-Heavy Plan.
4.10 CONTRIBUTIONS REQUIRED ON RETURN FROM MILITARY SERVICE. If a Member
leaves the employ of an Employer to enter the armed services of the United
States and is covered by USERRA and is reemployed under USERRA, the Employer
shall make a contribution equal to the amount of the Employer Discretionary
Contributions which would have been allocated to the Member's Account if he had
remained in the employ of the Employer for the period of time he was covered by
USERRA. In addition, the Member may make additional "catch up" Salary Deferral
Contributions during a period beginning on his date of reemployment and ending
on the earlier of (a) three times the period of his qualified military service
and (b) five years equal to the maximum amount he could have made and the
Employer must make the appropriate Employer Matching Contributions. The
Employer shall not make any contribution for lost earnings or failure to share
in forfeitures.
4.11 DEADLINE FOR PAYMENT OF CONTRIBUTIONS. The Employee After Tax
Contributions and the Salary Deferral Contributions are to be paid to the
Trustee in installments. The installment for each payroll period is to be paid
as of the end of the payroll period and shall be paid as soon as
administratively feasible but in any event not later than the time prescribed
by law for filing the Employer's federal income tax return (including
extensions) for its taxable year which ends with or next follows the end of the
Plan Year for which the Contribution is to be made. The Employer's
Contribution for a Plan Year must be paid into the Trust Fund in one or more
installments not later than the time prescribed by law for filing the
Employer's federal income tax return (including extensions) for its taxable
year for which it is to take the deduction. If the Contribution is paid after
the last day of the Employer's taxable year but prior to the date it files its
tax return (including extensions), it shall be treated as being received by the
Trustee on the last day of the taxable year if (a) the Employer notifies the
Trustee in writing that the payment is being made for that taxable year or (b)
the Employer claims the Contribution as a deduction on its federal income tax
return for the taxable year.
PART B. LIMITATIONS APPLICABLE TO CONTRIBUTIONS
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4.12 LIMITATIONS BASED UPON DEDUCTIBILITY AND THE MAXIMUM ALLOCATION
PERMITTED TO A MEMBER'S ACCOUNT. Notwithstanding any other provision of this
Plan, no Employer shall make any contribution that would be a nondeductible
contribution within the meaning of section 4972 of the Code or that would cause
the limitation on allocations to each Member's Account within the meaning of
section 415 of the Code to be exceeded. For a further description of the
limitation on allocations and the corrections permitted, see Part B of Article
V.
4.13 DOLLAR LIMITATION ON SALARY DEFERRAL CONTRIBUTIONS. The maximum
Salary Deferral Contribution that a Member may elect to have made on his behalf
during the Member's taxable year may not, when added to the amounts deferred
under other plans or arrangements described in sections 401(k), 408(k) and
403(b) of the Code exceed $10,000 (as adjusted by the Secretary of Treasury).
For purposes of applying the requirements of Section 4.13 and Article IX,
Excess Deferrals shall not be disregarded merely because they are Excess
Deferrals or because they are distributed in accordance with this Section.
However, Excess Deferrals made to the Plan on behalf of Non-Highly Compensated
Employees are not to be taken into account under Section 4.13.
4.14 LIMITATION BASED UPON ACTUAL DEFERRAL PERCENTAGE. The Actual
Deferral Percentage for eligible Highly Compensated Employees for any Plan Year
must bear a relationship to the Actual Deferral Percentage for all other
eligible Employees for the preceding Plan Year which meets either of the
following tests:
(a) the Actual Deferral Percentage of the eligible Highly
Compensated Employees is not more than the Actual Deferral Percentage of
all other eligible Employees multiplied by 1.25; or
(b) the excess of the Actual Deferral Percentage of the eligible
Highly Compensated Employees over that of all other eligible Employees is
not more than two percentage points, and the Actual Deferral Percentage
of the eligible Highly Compensated Employees is not more than the Actual
Deferral Percentage of all other eligible Employees multiplied by two.
For the initial Plan Year of this Plan and for the initial Plan Year of
any Employer which adopts this Plan as its separate plan, the amount taken into
account as the Actual Deferral Percentage of Non-highly Compensated Employees
for the preceding Plan Year shall be (a) three percent or (b) if the Employer
makes an election under this subclause (b), the Actual Deferral Percentage of
Non-highly Compensated Employees for the first Plan year.
For purposes of this test an eligible Employee is an Employee who is
directly or indirectly eligible to make Salary Deferral Contributions for all
or part of the Plan Year. A person who is suspended from making Salary
Deferral Contributions because he has made a withdrawal is an eligible
Employee. If no Salary Deferral Contributions are made for an eligible
Employee, the Actual Deferral Ratio that shall be included for him in
determining the Actual Deferral Percentage is zero.
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If this Plan and any other plan or plans which include cash or deferred
arrangements are considered as one plan for purposes of section 401(a)(4) or
410(b) of the Code, the cash or deferred arrangements included in this Plan and
the other plans shall be treated as one plan for these tests. If any Highly
Compensated Employee is a Member of this Plan and any other cash or deferred
arrangements of the Employer, when determining the deferral percentage of the
Employee, all of the cash or deferred arrangements are treated as one. If the
Employer elects to apply section 410(b)(4)(B) of the Code in determining
whether the Plan meets the requirements of section 401(k)(3)(A)(i) of the Code,
the Employer may, in determining whether the arrangement meets the requirements
of section 401(k)(3)(A)(ii), exclude from consideration all eligible Employees
(other than Highly Compensated Employees) who are not 21 years of age or have
not completed one year of Active Service by the end of the Plan Year.
The Actual Deferral Percentages are to be calculated and the provisions of
this Section are to be applied, separately, for each Employer which constitutes
a separate controlled group or affiliated service group.
A Salary Deferral Contribution will be taken into account under the Actual
Deferral Percentage test of Code section 401(k) and this Section for a Plan
Year only if it relates to Annual Compensation that either would have been
received by the Employee in the Plan Year (but for the deferral election) or is
attributable to services performed by the employee in the Plan Year and would
have been received by the Employee within 2 1/2 months after the close of the
Plan Year (but for the deferral election). In addition, a Section 401(k)
Contribution will be taken into account under the Actual Deferral Percentage
test of Code section 401(k) and this Section for a Plan Year only if it is
allocated to an Employee as of a date within that Plan Year. For this purpose
of a Section 401(k) 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 that date and the Section 401(k) Contribution is actually
paid to the Trust no later than 12 months after the Plan Year to which the
Section 401(k) Contribution relates.
Failure to correct Excess 401(k) Contributions by the close of the Plan
Year following the Plan Year for which they were made will cause the Plan's
cash or deferred arrangement to be disqualified for the Plan Year for which the
Excess 401(k) Contributions were made and for all subsequent years during which
they remain in the Trust. Also, the Employer will be liable for a 10% excise
tax on the amount of Excess 401(k) Contributions unless they are corrected
within 2 1/2 months after the close of the Plan Year for which they were made.
4.15 LIMITATION BASED UPON CONTRIBUTION PERCENTAGE. The Contribution
Percentage for eligible Highly Compensated Employees for any Plan Year must not
exceed the greater of the following:
(a) the Contribution Percentage for all other eligible Employees for
the preceding Plan Year multiplied by 1.25; or
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(b) the lesser of the Contribution Percentage for all other eligible
Employees for the preceding Plan Year multiplied by two, or the
Contribution Percentage for all other eligible Employees for the
preceding Plan Year plus two percentage points.
For the initial Plan Year of this Plan and for the initial Plan Year of
any Employer which adopts this Plan as its separate plan, the amount taken into
account as the Contribution Percentage of Non-highly Compensated Employees for
the preceding Plan Year shall be (a) three percent or (b) if the Employer makes
an election under this subclause (b), the Contribution Percentage of Non-highly
Compensated Employees for the first Plan Year.
For purposes of this test an eligible Employee is an Employee who is
directly or indirectly eligible to make Employee After Tax Contributions or to
receive an allocation of Employer Matching Contributions under the Plan for all
or part of the Plan Year. A person who is suspended from making Employee After
Tax Contributions because he has made a withdrawal, a person who would be
eligible to receive an allocation of Employer Matching Contributions but for
his election not to participate, and a person who would be eligible to receive
an allocation of Employer Matching Contributions but for the limitation on his
Annual Additions imposed by section 415 of the Code, are all eligible
Employees.
If no Section 401(m) Contributions are made on behalf of an eligible
Employee, the Actual Contribution Ratio that shall be included for him in
determining the Contribution Percentage is zero. If this Plan and any other
plan or plans to which Section 401(m) Contributions are made are considered as
one plan for purposes of section 401(a)(4) or 410(b) of the Code, this Plan and
those plans are to be treated as one. The Actual Contribution Ratio of a
Highly Compensated Employee who is eligible to participate in more than one
plan of an Affiliated Employer to which employee or matching contributions are
made is calculated by treating all the plans in which the Employee is eligible
to participate as one plan. However, plans that are not permitted to be
aggregated under Regulation section 1.410(m)-1(b)(3)(ii) are not aggregated for
this purpose.
A Matching Employer Contribution will be taken into account under this
Section for a Plan Year only if (a) it is allocated to the Employee's Account
as of a date within the Plan Year, (b) it is paid to the Trust no later than
the end of the 12 month period beginning after the close of the Plan Year, and
(c) it is made on behalf of an Employee on account of his Salary Deferral
Contributions for the Plan Year.
If the Employer elects to apply section 410(b)(4)(B) of the Code in
determining whether the Plan meets the requirements of section 410(b) of the
Code, the Employer may, in determining whether the arrangement meets the
requirements of section 401(m)(2) of the Code exclude from consideration all
eligible Employees (other than Highly Compensated Employees) who are not 21
years of age or have not completed one year of Active Service by the end of the
Plan Year.
The Contribution Percentage shall be calculated and the provisions of this
Section applied, separately, for each Employer which constitutes a separate
controlled group or affiliated service group.
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At the election of the Employer, a Member's Salary Deferral Contributions,
and Qualified Nonelective Employer Contributions made on behalf of the Member
during the Plan Year shall be treated as Section 401(m) Contributions that are
Employer Matching Contributions provided that the conditions set forth in
Regulation section 1.401(m)-1(b)(5) are satisfied. Salary Deferral
Contributions may not be treated as Employer Matching Contributions for
purposes of the Contribution Percentage test unless the contributions,
including those taken into account for purposes of the test, satisfy the Actual
Deferral Percentage test set forth in Section 4.13. Salary Deferral
Contributions and Qualified Nonelective Employer Contributions may not be taken
into account for purposes of the test to the extent that those contributions
are taken into account in determining whether any other contributions satisfy
the Actual Deferral Percentage test set forth in Section 4.13. Finally, Salary
Deferral Contributions and Qualified Nonelective Employer Contributions may be
taken into account for purposes of the test only if they are allocated to the
Employee's Account as of a date within the Plan Year being tested within the
meaning of Regulation section 1.401(k)-1(b)(4).
Failure to correct Excess Aggregate 401(m) Contributions by the close of
the Plan Year following the Plan Year for which they were made will cause the
Plan to fail to be qualified for the Plan Year for which the Excess Aggregate
401(m) Contributions were made and for all subsequent years during which they
remain in the Trust. Also, the Employer will be liable for a 10% excise tax on
the amount of Excess Aggregate 401(m) Contributions unless they are corrected
within 2 1/2 months after the close of the Plan Year for which they were made.
4.16 ALTERNATIVE LIMITATION BASED UPON ACTUAL DEFERRAL PERCENTAGE AND
CONTRIBUTION PERCENTAGE. If the second alternative permitted in Sections 4.13
and 4.14 is used for both the Actual Deferral Percentage test and the
Contribution Percentage test the following additional limitation on Salary
Deferral Contributions shall apply. The Actual Deferral Percentage plus the
Contribution Percentage of the eligible Highly Compensated Employees cannot
exceed the greater of (a) or (b), where:
(a) is the sum of:
(i) 1.25 times the greater of the Actual Deferral Percentage
or the Contribution Percentage of the eligible Non-Highly
Compensated Employees for the preceding Plan Year, and
(ii) the lesser of (x) two percentage points plus the lesser
of the Actual Deferral Percentage or the Contribution Percentage of
the eligible Non-Highly Compensated Employees for the preceding
Plan Year or (y) two times the lesser of the Actual Deferral
Percentage or the Contribution Percentage of the group of eligible
Non-Highly Compensated Employees for the preceding Plan Year, and
(b) is the sum of:
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(i) 1.25 times the lesser of the Actual Deferral Percentage or
the Contribution Percentage of the eligible Non-Highly Compensated
Employees for the preceding Plan Year, and
(ii) the lesser of (x) two percentage points plus the greater
of the Actual Deferral Percentage or the Contribution Percentage of
the eligible Non-Highly Compensated Employees for the preceding
Plan Year or (y) two times the greater of the Actual Deferral
Percentage or the Contribution Percentage of the group of eligible
Non-Highly Compensated Employees for the preceding Plan Year.
PART C. CORRECTION PROCEDURES FOR ERRONEOUS CONTRIBUTIONS
4.17 EXCESS DEFERRAL FAIL SAFE. As soon as practical after the close of
each Plan Year, the Committee shall determine if there would be any Excess
Deferrals. If there would be an Excess Deferral by a Member, the Excess
Deferral as adjusted by any earnings or losses, will be distributed to the
Member no later than April 15 following the Member's taxable year in which the
Excess Deferral was made. The income allocable to the Excess Deferrals for the
taxable year of the Member shall be determined by any reasonable method for
computing the income allocable to Excess Deferrals, provided that the method
does not violate section 401(a)(4) of the Code, is used consistently for all
Members and for all corrective distributions under the Plan for the Plan Year,
and is used by the Plan for allocating income to Members' accounts.
4.18 ACTUAL DEFERRAL PERCENTAGE FAIL SAFE FOR PLAN YEARS BEGINNING AFTER
DECEMBER 31, 1996. As soon as practicable after the close of each Plan Year,
the Committee shall determine whether the Actual Deferral Percentage for the
Highly Compensated Employees would exceed the limitation. If the limitation
would be exceeded for a Plan Year, before the close of the following Plan Year
(a) the amount of Excess 401(k) Contributions for that Plan Year (and any
income allocable to those Contributions as calculated in the specific manner
required by Section 4.20) shall be distributed, or (b) to the extent provided
in regulations issued by the Secretary of the Treasury, and permitted by the
Committee, the Employee may elect to treat the amount of the Excess 401(k)
Contributions as an amount distributed to the Employee and then contributed by
the Employee to the Plan as an Employee After Tax Contribution, provided the
recharacterized amounts shall remain subject to the same rules and restrictions
to which the Salary Deferral Contributions are subjected, or (c) the Employer
may make a Qualified Nonelective Employer Contribution which it elects to have
treated as a Section 401(k) Contribution.
The amount of Excess 401(k) Contributions to be distributed shall be that
amount of the Salary Deferral Contributions by or on behalf of those Highly
Compensated Employees with the largest Salary Deferral Contributions as is
equal to the Excess 401(k) Contributions, taken ratably from each Account,
based solely on those Salary Deferral Contributions for the Plan Year. This
initial distribution shall not reduce those Accounts affected below the next
highest level of Salary Deferral Contributions. If any further reduction is
necessary the same process is to be repeated at the next highest level of
Salary Deferral Contributions by or on behalf of the Highly Compensated
Employees, and if necessary repeated in successively lower levels of Salary
Deferral Contributions until the cash or deferred arrangement satisfies the
Actual Deferral Percentage test.
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Qualified Nonelective Employer Contributions shall be treated as Section
401(k) Contributions only if: (a) the conditions described in Regulation
section 1.401(k)-1(b)(5) are satisfied and (b) they are allocated to Members'
Accounts as of a date within that Plan Year and are actually paid to the Trust
no later than the end of the 12 month period immediately following the Plan
Year to which the contributions relate. If the Employer makes a Qualified
Nonelective Employer Contribution that it elects to have treated as a Section
401(k) Contribution, the Contribution will be in an amount necessary to satisfy
the Actual Deferral Percentage test and will be allocated first to those
Non-Highly Compensated Employees who had the lowest Actual Deferral Ratio. The
Excess 401(k) Contributions of Highly Compensated Employees will not be
recharacterized to the extent that the recharacterized amounts would exceed the
Contribution Percentage as determined prior to applying the Contribution
Percentage limitations.
Excess 401(k) Contributions may not be recharacterized after 2 1/2 months
after the close of the Plan Year to which the recharacterization relates. The
amount of recharacterized Excess 401(k) Contributions, in combination with
Employee After Tax Contributions actually made by the Member, may not exceed
the maximum amount of Employee After Tax Contributions (determined without
regard to Section 4.14) that the Member could have made under the provisions of
the Plan in effect on the first day of the Plan Year in the absence of
recharacterization. Any distributions of the Excess 401(k) Contributions for
any Plan Year are to be made to Highly Compensated Employees on the basis of
the amount of contributions by, or on behalf of, each Highly Compensated
Employee. The amount of Excess 401(k) Contributions to be distributed or
recharacterized for any Plan Year must be reduced by any excess Salary Deferral
Contributions previously distributed for the taxable year ending in the same
Plan Year.
4.19 CONTRIBUTION PERCENTAGE FAIL SAFE FOR PLAN YEARS BEGINNING AFTER
DECEMBER 31, 1996. If the limitation would be exceeded for any Plan Year,
before the close of the following Plan Year any one or more of the following
corrective actions shall be taken, as determined by the Committee in its sole
discretion: (a) the amount of the Excess Aggregate 401(m) Contributions for
that Plan Year (and any income allocable to those Contributions as calculated
in the specific manner required by Section 4.20) shall be distributed or
forfeited (to the extent not vested), or (b) the Employer may make a Qualified
Nonelective Employer Contribution which it elects to have treated as a Section
401(m) Contribution. Any distributions of the Excess Aggregate 401(m)
Contributions for any Plan Year are to be made to Highly Compensated Employees
on the basis of the respective portions of the amounts attributable to each of
them. Forfeitures of Excess Aggregate 401(m) Contributions may not be
allocated to Members whose contributions are reduced under this Section.
4.20 ALTERNATIVE LIMITATION FAIL SAFE. As soon as practicable after the
close of each Plan Year, the Committee shall determine whether the alternative
limitation would be exceeded. If the limitation would be exceeded for any Plan
Year, before the close of the following Plan Year the Actual Deferral
Percentage or Contribution Percentage of the eligible Highly Compensated
Employees, or a combination of both, shall be reduced by distributions made in
the manner described in the Regulations. These distributions shall be in
addition to and not in lieu of distributions required for Excess 401(k)
Contributions and Excess Aggregate 401(m) Contributions.
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4.21 INCOME ALLOCABLE TO EXCESS 401(K) AND AGGREGATE 401(M) CONTRIBUTIONS.
The income allocable to Excess 401(k) Contributions and Excess Aggregate
401(m) Contributions for the Plan Year shall be determined by any reasonable
method for computing the income allocable to Excess 401(k) Contributions and
Excess Aggregate 401(m) Contributions, provided that the method does not
violate section 401(a)(4) of the Code, is used consistently for all Members and
for all corrective distributions under the Plan.
4.22 RETURN OF CONTRIBUTIONS FOR MISTAKE, DISQUALIFICATION OR DISALLOWANCE
OF DEDUCTION. Subject to the limitations of section 415 of the Code, the
assets of the Trust shall not revert to any Employer or be used for any purpose
other than the exclusive benefit of the Members and their Beneficiaries and the
reasonable expenses of administering the Plan except:
(a) any Contribution made because of a mistake of fact shall be
repaid to the Employer within one year after the payment of the
Contribution;
(b) any Contribution conditioned upon the Plan's initial
qualification under section 401 of the Code or the initial qualification
of an Employer's adoption of the Plan, if later, shall be repaid to the
Employer within one year after the date of denial of the initial
qualification of the Plan or of its adoption by the Employer; and
(c) any and all Employer Contributions are conditioned upon their
deductibility under section 404 of the Code; therefore, to the extent the
deduction is disallowed, the Contributions shall be repaid to the
Employer within one year after the disallowance.
The Employer has the exclusive right to determine if a Contribution or any
part of it is to be repaid or is to remain as a part of the Trust Fund except
that the amount to be repaid is limited, if the Contribution is made by mistake
of fact or if the deduction for the Contribution is disallowed, to the excess
of the amount contributed over the amount that would have been contributed had
there been no mistake or over the amount disallowed. Earnings which are
attributable to any excess contribution cannot be repaid. Losses attributable
to an excess contribution must reduce the amount that may be repaid. All
repayments of mistaken Contributions or Contributions which are disallowed are
limited so that the balance in a Member's Account cannot be reduced to less
than the balance that would have been in the Member's Account had the mistaken
amount or the amount disallowed never been contributed.
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ARTICLE V.
PARTICIPATION
PART A. ALLOCATIONS
5.1 ALLOCATION OF EMPLOYEE CONTRIBUTIONS. The Committee shall allocate
each Member's Employee After Tax Contributions made on his behalf to his
Employee After Tax Contribution Account as of the date they are contributed.
5.2 ALLOCATION OF ROLLOVER CONTRIBUTIONS AND DIRECT TRANSFERS. If
Rollover Contributions and/or direct transfers are permitted, the Committee
shall allocate each Member's Rollover Contribution and/or direct transfers to
his Rollover Account as of the date it is contributed or transferred.
5.3 ALLOCATION OF SALARY DEFERRAL CONTRIBUTIONS. The Committee shall
allocate the Salary Deferral Contributions, if any, made on behalf of each
Member to his Salary Deferral Contribution Account, as of the date they are
contributed.
5.4 ALLOCATION OF EMPLOYER MATCHING CONTRIBUTIONS. The Committee shall,
as of the end of each month, allocate the Employer Matching Contributions made
on behalf of each Member to his Employer Matching Contribution Account if the
Member has completed one year of Active Service credit.
5.5 ALLOCATION OF EMPLOYER DISCRETIONARY CONTRIBUTIONS. The Committee
shall, as of the end of each Plan Year, allocate the Employer Discretionary
Contribution, if any, among the Members who have completed one year of Active
Service and who are employed by one of the Employers or Affiliated Employers at
the end of the Plan Year and are employed at the time that the Contribution is
made based upon each Member's Considered Compensation paid by the Employer as
compared to the Considered Compensation of all Members employed by the Employer
or Affiliated Employer and eligible for the allocation; provided, however, for
this purpose, Considered Compensation shall be each Member's annualized
Considered Compensation as determined on the date for which the Employer
Discretionary Contribution is actually contributed to the Plan.
5.6 ALLOCATION OF RESTORATION CONTRIBUTIONS. The Committee shall, as of
the end of each Plan Year, allocate the previously unapplied and unallocated
forfeitures and the Employer Contribution, if any, which are required to
restore the nonvested portion of the Employer Accounts of Members who had
previously forfeited that nonvested portion on the date they terminated
employment but who qualified for the restoration of that amount during the Plan
Year and allocate the previously unapplied and unallocated forfeitures and the
Employer Contribution, if any, which are required to restore the Accounts of
those Members whose distributions were forfeited because of the Committee's
inability to contact the Members previously but who have filed a claim for
their Accounts during the Plan Year. The Committee shall establish and
maintain a separate subaccount for the amount allocated to an Account in order
to restore a previously forfeited amount.
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5.7 ALLOCATION OF CONTRIBUTION TO EXCLUDED MEMBERS. The Sponsor shall
allocate the Employer Contribution, if any, made on behalf of any one or more
Members to correct an error as to qualification for participation or in
Contributions, allocations or distributions to the persons concerned and in the
amount necessary to correct the error.
5.8 ALLOCATION OF QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTIONS. The
Committee shall, as of the end of the Plan Year, allocate the Qualified
Nonelective Employer Contribution, if any, among the Non-Highly Compensated
Employees as set forth in Section 4.17 or 4.18, whichever is applicable.
5.9 ALLOCATION OF TOP-HEAVY CONTRIBUTIONS. The Committee shall, as of the
end of the Plan Year, allocate the Employer Contribution, if any, which is
necessary to fulfill the Top-Heavy Plan requirements found in Article IX if the
Plan is determined to be a Top-Heavy Plan.
5.10 EFFECT OF TRANSFERS UPON ALLOCATIONS. If a Member has been
Transferred during the Plan Year, the Member shall be entitled to have
allocated to him a portion of the Employer Matching Contribution based upon his
Salary Deferral Contributions made while he was an Employee of each Employer
and the Employer Discretionary Contribution based upon his Considered
Compensation for the Plan Year earned from all of the Employers for which an
Employer Discretionary Contribution was made.
5.11 APPLICATION OF FORFEITURES. Amounts forfeited for any reason shall
first be allocated under Section 5.6 to restore previously forfeited Accounts
which are to be restored under the terms of this Plan and if any amount remains
after that allocation, it shall be used to reduce the future Employer Matching
Contributions.
5.12 SCHEDULED ALLOCATION OF INCOME OR LOSSES AND APPRECIATION OR
DEPRECIATION. The Trustee shall value the Trust Fund on its Valuation Date at
its then fair market value, but without regard to any Contributions made to the
Plan after the preceding Valuation Date, shall determine the amount of income
earned or losses suffered by the Trust Fund and shall determine the
appreciation or depreciation of the Trust Fund since the preceding Valuation
Date. The Committee shall then allocate as of the Valuation Date the income
earned or losses suffered and the appreciation or depreciation in the assets of
the Trust Fund for the period since the last preceding Valuation Date. The
allocation shall be among the Members and former Members who have undistributed
Account balances based upon their Account balances in each of the various
investment funds or accounts, if more than one, as of the last Valuation Date
reduced, as appropriate, by amounts used from the investment fund or account to
make a withdrawal or distribution or any other transaction which is properly
chargeable to the Member's Account during the period since the last Valuation
Date. The Committee, by resolution, may elect in lieu of the allocation method
described above to use a unit allocation method, a separate account method or
any other equitable method if it announces the method of allocation to the
Members prior to the beginning of the period during which it is first used.
5.13 INTERIM ALLOCATION OF INCOME OR LOSSES AND APPRECIATION OR
DEPRECIATION. If at any time in the interval between Valuation Dates, one or
more withdrawals or one or more distributions are to be made and the Committee
determines that an interim allocation is necessary
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to prevent discrimination against those Members and former Members who are not
receiving funds, the Trustee is to perform a valuation of a portion or all of
the Trust Fund as of a date selected by the Committee which is administratively
practical and near the date of withdrawals or distributions in the same manner
as it would if it were a scheduled Valuation Date. That date may be before or
after any particular distribution or withdrawal. The Committee shall then
allocate as of that date any income or loss and any appreciation or
depreciation to the various Accounts of each of the Members in the same manner
as it would if it were a scheduled Valuation Date. Then without regard to the
language in Section 6.1, all withdrawals or distributions made after that date
and prior to the next Valuation Date, even though the event causing it occurred
earlier, shall be based upon the Accounts as adjusted by the interim valuation.
PART B. LIMITATION ALLOCATIONS
The Annual Additions that may be credited to an individual Member's
Accounts under this Plan and any other qualified defined contribution plan
maintained by an Affiliated Employer for a Limitation Year shall not exceed the
lesser of (a) $30,000.00 (as adjusted by the Secretary of Treasury), or (b) 25%
of the Member's Annual Compensation for the Limitation Year. The Plan will be
operated in compliance with section 415 of the Code and its Regulations, the
terms of which are incorporated in this Plan. Thus, if the Employer maintains
a defined benefit plan in which the Member participates, the combined limits
provided in section 415(e) apply through December 31, 1999.
If Annual Additions are made in excess of the limitations contained in
this Part B, to the maximum extent permitted by law, those excess Annual
Additions shall be attributed to this Plan.
If an excess Annual Addition attributed to this Plan is held or
contributed as a result of the application of forfeitures, reasonable error in
estimating a Member's Annual Compensation, reasonable error in calculating the
maximum Salary Deferral Contribution that may be made for a Member under
section 415 of the Code or because of other facts and circumstances which the
Commissioner of Internal Revenue finds to be justified, the excess Annual
Addition shall be corrected as follows:
(a) first, the excess Annual Addition shall be reduced to the extent
necessary by distributing to the Member all Employee After Tax
Contributions, if any, and then Salary Deferral Contributions together
with their earnings. These distributed amounts are disregarded for
purposes of the testing and limitations contained in Article IV;
(b) second, if the Member is still employed by the Employer at the
end of the Plan Year, any remaining excess funds shall be placed in an
unallocated suspense account to be applied to reduce future Employer
Contributions for that Member for as many Plan Years as are necessary to
exhaust the suspense account in keeping with the amounts which would
otherwise be allocated to that Member's Account; and
(c) third, if the Member is not employed by the Employer at the end
of the Plan Year, the remaining excess funds shall be placed in an
unallocated suspense account to
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reduce future Employer Contributions for all remaining Members for as
many Plan Years as are necessary to exhaust the suspense account.
If the Plan terminates prior to the exhaustion of the suspense account,
the remaining amount shall revert to the Employer.
PART C. INVESTMENT OF TRUST FUNDS
The Committee may: (a) maintain commingled and/or separate Trusts, (b)
establish separate investment funds and/or (c) permit individual investments,
some or all of which are directed by the Committee or selected by the Members
or former Members for any portion or all of their Accounts. Once the Committee
has selected or changed the mode of investments, it shall establish rules
pertaining to its administration, including but not limited to: selection of
forms, rules for making selections effective, establishing the frequency of
permitted changes, the minimum percentage in any investment, and all other
necessary or appropriate regulations.
The Committee may direct the Trustee to hold funds in cash or near money
awaiting investment or to sell assets and hold the proceeds in cash or near
money awaiting reinvestment when establishing, using or changing investment
modes. For this purpose the funds may be held in cash or invested in short
term investments such as certificates of deposit, U.S. Treasury bills, savings
accounts, commercial paper, demand notes, money market funds, any common,
pooled or collective funds which the Trustee or any other corporation may now
have or in the future may adopt for short term investments and any other
similar assets which may be offered by the federal government, national or
state banks (whether or not serving as Trustee) or any savings and loan
association.
No Plan funds attributable to Employee after Tax Contributions, or Salary
Deferred Contributions shall be invested in securities (other than interests in
the Plan) of any Employer or any company directly or indirectly controlling,
controlled by or under common control with an Employer (within the meaning of
the Securities Act of 1933, as amended), until an appropriate registration
statement under the Securities Act of 1933, as amended, has become effective
covering the interests in the Plan and the securities issued by one of the
entities described above or counsel for the Sponsor or the Committee gives an
opinion that such an investment can be made without the described registration
process.
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ARTICLE VI.
DISTRIBUTIONS AND FORFEITURES
PART A. DISTRIBUTIONS
6.1 VALUATION OF ACCOUNTS FOR DISTRIBUTIONS. For the purpose of making a
distribution, a Member's Accounts shall be his Accounts as valued as of the
Valuation Date which is coincident with or next preceding the event which
caused the distribution, adjusted only for Contributions, distributions and
withdrawals, if any, made between the Valuation Date and that event.
6.2 DISTRIBUTION ON DEATH. If a Member dies, the Member's spouse or
designated Beneficiary or Beneficiaries is entitled to receive 100% of the
remaining amount in all of his Accounts as of the day he dies. Each Member has
the right to designate and to revoke the designation of his Beneficiary or
Beneficiaries. Each designation or revocation must be evidenced by a written
document in the form required by the Committee, signed by the Member and filed
with the Committee. If no designation is on file at the time of a Member's
death or if the Committee determines that the designation is ineffective, the
designated Beneficiary shall be the Member's spouse, if living, or if not, the
executor, administrator or other personal representative for administration and
distribution as part of the Member's estate.
If a Member is considered to be married under local law, the Member's
designation of any Beneficiary, other than the Member's spouse, shall not be
valid unless the spouse acknowledges in writing that he or she understands the
effect of the Member's beneficiary designation and consents to it. The consent
must be to a specific Beneficiary. The written acknowledgment and consent must
be filed with the Committee, signed by the spouse, and witnessed by a Plan
representative or a notary public. However, if the spouse cannot be located or
there exist other circumstances as described in sections 401(a)(11) and
417(a)(2) of the Code, the requirement of the Member's spouse's acknowledgment
and consent may be waived.
6.3 DISTRIBUTION ON RETIREMENT. A Member may retire at any time on or
after he attains his Retirement Age. If a Member retires, he is entitled to
receive 100% of all of his Accounts as of the day he retires.
6.4 DISTRIBUTION ON DISABILITY. If a Member's employment with an Employer
is terminated (which for this purpose, shall include the Member's receipt of
long term disability payments from the Employer) and the Committee determines
he is suffering from a Disability, he is entitled to receive 100% of all of his
Accounts as of the day he terminated because of his Disability.
6.5 DISTRIBUTION ON SEVERANCE FROM SERVICE. If a Member Severs Service
with all Affiliated Employers for any reason other than death, retirement or
disability, he is entitled to receive (a) 100% of all of his Accounts, except
his Employer Matching Contribution Account, if any, and
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(b) that percentage of his Employer Matching Contribution Account, if any, as
shown in the vesting schedule below, as of the day he severs employment.
PERCENTAGE OF AMOUNT VESTED IN ACCOUNTS
CONTAINING EMPLOYER MATCHING
COMPLETED YEARS OF ACTIVE SERVICE AND DISCRETIONARY CONTRIBUTIONS
Less than one years .................................... 0%
One years but less than two years ...................... 20%
Two years but less than three years .................... 40%
Three years but less than four years.................... 60%
Four years but less than five years .................... 80%
Five years or more ..................................... 100%
Notwithstanding the above vesting schedule, any plan that merges into this Plan
shall retain its prior vesting schedule solely with respect to the assets
merged into this Plan unless the merger agreement sets forth otherwise.
6.6 DISTRIBUTION ON ISSUANCE OF A QUALIFIED DOMESTIC RELATIONS ORDER. If
the Committee determines that a judgment, decree or order relating to child
support, alimony payments or marital property rights of the spouse, former
spouse, child or other dependent of the Member is a qualified domestic
relations order which complies with a state's domestic relations law or
community property law and section 414(p) of the Code or is a domestic
relations order entered before January 1, 1985, the Committee may direct the
Trustee to distribute the awarded property to the person named in the award but
only in the manner permitted under this Plan. To be a qualified domestic
relations order, the order must clearly specify: (a) the name and last known
mailing address of the Member and each alternate payee under the order, (b) the
amount or percentage of the Member's benefits to be paid from the Plan to each
alternate payee or the manner in which the amount or percentage can be
determined, (c) the number of payments or periods for which the order applies,
(d) the plan to which the order applies, and (e) all other requirements set
forth in section 414(p) of the Code. If a distribution is made at a time when
the Member is not fully vested, a separate subaccount shall be created for the
remaining portion of each Account which was not fully vested. That subaccount
shall then remain frozen: that is, no further contributions nor any
forfeitures shall be allocated to the subaccount; however, it shall receive its
proportionate share of trust appreciation or depreciation and income earned on
or losses incurred by the Trust Fund. To determine the Member's vested
interest in each subaccount at any future time, the Committee shall add back to
the subaccount at that time the amount that was previously distributed under
the qualified domestic relations order, shall multiply the reconstituted
subaccount by the vesting percentage, and shall then subtract the amount that
was previously distributed. The remaining amount is the Member's vested
interest in the subaccount at that time.
6.7 FORFEITURE ON SEVERING SERVICE WITH ALL AFFILIATED EMPLOYERS. If as a
result of Severing Service with all Affiliated Employers a former Member
receives a distribution of his entire vested interest in his Account, the
nonvested amount in his Account is immediately forfeited. However, if the
Member is reemployed, all of his Accounts containing Employer Contributions
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(unadjusted for subsequent gains or losses) shall be restored if he repays to
the Trustee that portion of the distribution which was derived from Employer
Contributions within five years of the date of distribution. A former Member
who received no distribution upon his Severing Service with all Affiliated
Employers because he had no vested interest shall be treated as if he received
a distribution of his entire vested interest and that interest was less than
$5,000.00.
If a former Member who has a vested interest in his Account received no
distribution or a distribution of less than the full amount of his entire
vested interest as a result of his Severing Service with all Affiliated
Employers the nonvested amount in his Account is immediately forfeited
following five consecutive one-year Periods of Severance.
A distribution shall be treated as if it were made as a result of Severing
Service with all Affiliated Employers if it is made not later than the end of
the second Plan Year following the Plan Year in which the former Member Severs
Service.
6.8 FORFEITURE BY LOST MEMBERS OR BENEFICIARIES; ESCHEAT. If a person who
is entitled to a distribution cannot be located during a search period of 60
days after the Trustee has initially attempted making payment, that person's
Account shall be forfeited. However, if at any time prior to the termination
of this Plan and the complete distribution of the Trust Fund, the Former Member
or Beneficiary files a claim with the Committee for the forfeited benefit, that
benefit shall be reinstated (without adjustment for trust income or losses
during the forfeited period) effective as of the date of the receipt of the
claim. As soon as appropriate following the Employer's Contribution of the
reinstated amount, it shall be paid to the former Member or Beneficiary in a
single sum.
PART B. FORM, ADJUSTMENTS AND TIME OF DISTRIBUTION
6.9 FORM OF DISTRIBUTIONS. Distributions shall be made only in cash
unless an asset held in the Trust cannot be sold by distribution date or can
only be sold at less than its appraised value, in which event part or all of
the distribution may be made in kind. Also, a Member (or his designated
beneficiary or legal representative, in the case of a deceased Member) may
elect to have those portions of his Accounts that are invested in shares of
common stock of the Sponsor distributed in full shares with any remaining
balance (including factional shares) distributed in cash. Except with respect
to Plan mergers or Plan transfers from other qualified plans that require
optional forms of payment, all distributions shall be made in one lump sum
payment or, as a Direct Rollover if the Distributee elects, at the time and in
the manner prescribed by the Committee, to have any portion or all of the
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan
named by the Distributee.
All protected Section 411(d)(6) benefits attributable to any plan merger
or plan to plan transfer are hereby incorporated into this Plan by reference.
Specifically, but not by way of limitation, the following reflect certain plan
mergers and/or plan transfers whose Section 411(d)(6) protected benefits are
hereby incorporated into the Plan:
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(a) GRANT PLAN PRIOR PLAN ACCOUNT
A Member who has a Grant Plan Prior Plan Account may elect in writing
to have his Grant Plan Prior Plan Account distributed in periodic
installments (no more frequently than monthly) over the life expectancy of
the Participant, the life expectancy of the Participant's spouse or
designated Beneficiary, a period certain not extending beyond the life
expectancy of the Participant, or a period certain not extending beyond the
life expectancy of the Participant and his spouse or designated
Beneficiary.
(b) PRIDECO PLAN PRIOR PLAN ACCOUNT
A Member may elect in writing to have his Prideco Plan Prior Plan
Account distributed in periodic installments either monthly, quarterly or
annually over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor
expectancy of the Participant and his Beneficiary.
(c) ENERPRO PLAN PRIOR PLAN ACCOUNT
A Member may elect in writing to have his Enerpro Plan Prior Plan
Account distributed as follows:
i. periodic installments either monthly, quarterly,
semiannually or annually over a fixed period, not
exceeding the life expectancy of the Member, or the joint
life and last survivor expectancy of the Member and his
Beneficiary, and
ii. a qualified joint and survivor annuity, if the Member is
married, and a life annuity if single, at the time the
benefit is payable. The spousal consent requirements, as
provided in the Enerpro Plan or as hereafter amended by
law, shall be applicable for distributions from an
Enerpro Plan Prior Plan Account. In order for a Member to
elect a distribution from the Enerpro Plan Prior Plan
Account other than the qualified joint survivor annuity
(if married) or the single life annuity (if single), the
Member must waive the applicable annuity (with spousal
consent, if married). The Member shall be allowed to
waive the 30-day notice provision (in accordance with
applicable Treasury regulations), which would otherwise
be required by the Enerpro Plan.
(d) TCA PLAN ACCUMULATION
A Member may elect in writing to have his TCA Plan Prior Plan
Account distributed in the following form:
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If the Member is married, a qualified joint and 50% survivor annuity
("QJSA"), unless a 75% or 100% survivor annuity is elected, and a life
annuity if single, at the time the benefit is payable. The QJSA shall be
equal in value to the single life annuity. The spousal consent
requirements, as provided in the TCA Plan or as hereafter amended by law or
this Plan, shall be applicable for distributions from the TCA Plan Prior
Plan Account. In order for a Member to elect a distribution from the TCA
Plan Prior Plan Account other than the qualified joint survivor annuity (if
married) or the single life annuity (if single), the Member must waive the
applicable annuity (with spousal consent, if married). With the required
spousal consent, the Member may elect a different form of annuity or a
single lump sum distribution. The Member shall be allowed to waive the
30-day notice provision (in accordance with applicable Treasury
regulations), which would otherwise be required by the TCA Plan. Subject to
the spousal consent requirements, a Participant may withdraw funds from his
Voluntary Contribution account while employed, but may not make more than
one withdrawal in each six-month period.
(e) TUBE ALLOY PLAN ACCUMULATION
A Member may elect in writing to have his Tube-Alloy Plan Prior Plan
Account distributed in as follows: payments over a period certain either
monthly, quarterly, semiannually, or annually in cash installments. In
order to provide such installments, the Committee may direct that the
Member's interest in the Plan be segregated and invested separately, and
that the funds in the segregated account be used for the payment of the
installments. The period over which such payment is to be made shall not
extend beyond the Member's life expectancy (or the life expectancy of the
Member and his designated Beneficiary.
(f) XL SYSTEMS PLAN PRIOR PLAN ACCOUNT
A Member may elect in writing to have his XL Systems Plan Prior Plan
Account distributed in a form other than described in previous Sections of
this Article. If he so elects, his XL Systems Plan Prior Plan Account may
be distributed in accordance with the methods described below, and any
portion of his account exceeding his XL Systems Plan Prior Plan Account
shall be payable in accordance with the other provisions of this Article
VI. The forms of distribution for a Participant's XL Systems Plan Prior
Plan Account are:
If the Member is married, a qualified joint and 50% survivor annuity
("QJSA"), unless a 75% or 100% survivor annuity is elected, and a life
annuity if single, at the time the benefit is payable as provided in the XL
Systems Plan at the time of merger into this Plan. The spousal consent
requirements, as provided in the XL Systems Plan or as hereafter amended by
law or this Plan, shall be applicable for distributions from the XL Systems
Plan Prior Plan Account. In order for a Member to elect a distribution
from the XL Systems Plan Prior Plan Account other than the qualified joint
survivor annuity (if married) or the single life annuity (if single), the
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41
Member must waive the applicable annuity (with spousal consent, if
married). With the required spousal consent, the Member may elect a
different form of annuity, periodic installment payments, or a single lump
sum distribution. The Member shall be allowed to waive the 30-day notice
provision (in accordance with applicable Treasury regulations), which would
otherwise be required by the XL Systems Plan.
Upon the death of Member prior to retirement, his account balance shall be
100% vested and the spouses's death benefit shall equal 50% of such
account, and shall be distributed as provided in the XL Systems Plan at the
time of merger into this Plan, subject to the revisions thereto.
(g) WEATHERFORD PLAN PRIOR PLAN ACCOUNT
A Member may elect in writing to have his Weatherford Plan Prior Plan
Account distributed as follows:
If the Member is married, a qualified joint and 50% survivor annuity
("QJSA"), and a life annuity if single, at the time the benefit is payable.
The QJSA shall be equal in value to the single life annuity. The spousal
consent requirements, as provided in the Weatherford Plan or as hereafter
amended by law or this Plan, shall be applicable for distributions from the
Weatherford Plan Prior Plan Account. In order for a Member to elect a
distribution from the Weatherford Plan Prior Plan Account other than the
QJSA (if married) or the single life annuity (if single), the Member must
waive the applicable annuity (with spousal consent, if married). With the
required spousal consent, the Member may elect a single lump sum
distribution. The Member shall be allowed to waive the 30-day notice
provision (in accordance with applicable Treasury regulations), which would
otherwise be required by the Weatherford Plan.
6.10 ADJUSTMENT OF VALUE OF DISTRIBUTION. Any Account held for
distribution past one or more Valuation Dates shall continue to share in the
appreciation or depreciation of the Trust Fund and in the income earned or
losses incurred by the Trust Fund until the last Valuation Date which occurs
with or next precedes the date distribution is made.
6.11 NORMAL TIME FOR DISTRIBUTION. The following rules shall normally
govern the time for distribution unless Section 6.12 requires an earlier
distribution. Prior to making a distribution, the Committee (or its designated
representative) must furnish such Member with a benefit notice. The benefit
notice must explain the optional forms of benefit in the Plan, including the
material features and relative values of those options, the Member's right to
defer distribution until he attains Retirement Age, and relevant information
concerning the direct rollover option described in Section 6.9. The notice
must also inform the Member of his right to consider whether or not to elect a
distribution for 30 days after receiving the notice. Notwithstanding any other
provision of this Section 6.11, or of this Plan, a Member and his or her spouse
may waive the 30-day waiting period provided in this Section for making an
election of benefits by affirmatively electing a form of distribution in a
manner that satisfies the applicable Regulation, but that waiver shall not
affect the
VI-6
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requirement that the information required by this Section be provided the
Member no more than 90 days before his annuity starting date. If the benefit
to be distributed to the Member is or is deemed to be $5,000.00 or less, the
benefit should be distributed within one year after the Member becomes entitled
to the benefit. Also, if it is or is deemed to be greater than $5,000.00 and
the Member consents to the distribution, the benefit should be distributed or
begin to be distributed within one year after the Member becomes entitled to
the benefit. If, however, the benefit to be distributed is or is deemed to be
greater than $5,000.00 and the Member fails to consent to the distribution, the
distribution shall not be made without the Member's consent until he attains
normal Retirement Age or age 62, whichever is later. In any event, if the
Member dies, the surviving spouse may require payments to begin within a
reasonable time.
6.12 TIME LIMIT FOR DISTRIBUTION. All distributions must comply with
sections 401(a)(9) and 401(a)(14) of the Code and their regulations. Thus, the
distribution must be made no later than the EARLIER of the date required by
subsection (a) or (b) if the Member has not died.
(a) Section 401(a)(9): Commencing January 1, 1999, each Member must
begin receiving a distribution under the Plan on or before April 1st of
the calendar year following the later of the calendar year in which the
Member retires or attains age 70 1/2 in the amount required by section
401(a)(9) of the Code and its Regulations. Until that date, a Member may
elect to begin receiving distributions or receive his distribution on the
April 1st of the calendar year following the calendar year in which he
attains age 70 1/2 even though he has not retired, in the amount required
by section 401(a)(9) of the Code and its Regulations. However, if the
Member is a Five Percent Owner in the Plan Year ending in the calendar
year in which he attains 70 1/2, distribution must begin April 1st of the
following calendar year regardless of whether he remains employed by the
Employer or an Affiliated Employer. Without regard to the above rules,
if a Member made a designation before January 1, 1984, which complied
with section 401(a)(9) of the Code before its amendment by the Tax Reform
Act of 1984, the distribution does not have to be made until the time
described in the designation, if later.
(b) Section 401(a)(14): The distribution must be made to the Member
on or before the 60th day after the latest of the end of the Plan Year in
which the Member attains his Retirement Age, attains the 10th anniversary
of the year in which he began participation or terminates employment with
all Affiliated Employers unless the Member consents to a later time.
If the Member has died and a portion of the Member's Account is payable to
a designated Beneficiary the payment must be made not later than one year after
the Member's death. If the surviving spouse is the Beneficiary, the payment
may be delayed so as to be made on the date on which the Member would have
attained age 70 1/2. If payment is postponed and the surviving spouse dies
before payment is made, the surviving spouse shall be treated as the Member for
purposes of this paragraph.
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6.13 PROTECTED BENEFITS. No provision of this Plan shall reduce or
eliminate any benefit protected by section 411(d)(6)of the Code.
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ARTICLE VII
WITHDRAWALS AND LOANS
7.1 VALUATION OF ACCOUNTS FOR WITHDRAWALS AND LOANS. For the purpose of
withdrawals and loans, a Member's Account shall be his Accounts as valued as of
the Valuation Date which is coincident with or next preceding the request for
the withdrawal or loan adjusted only for Contributions, distributions,
withdrawals and loans, if any, made between the Valuation Date and that event.
7.2 MINIMUM WITHDRAWAL AMOUNT. Each withdrawal must be in an amount equal
to or in excess of $500.
7.3 WITHDRAWALS OF EMPLOYEE AFTER TAX AND ROLLOVER ACCOUNTS. A Member is
entitled at any time to receive a withdrawal from his Employee After Tax
Contribution and/or Rollover Account after giving 15 days written notice to the
Committee. The withdrawal cannot be more than the balance of the Account.
Each withdrawal of Employee After Tax Contributions contributed after December
31, 1986 shall include a pro rata share of income earned on those
Contributions. Pre-1987 Employee After Tax Contributions shall be withdrawn
first until they are exhausted.
7.4 WITHDRAWAL FOR FINANCIAL HARDSHIP. A Member is entitled to receive a
withdrawal from his Salary Deferral Contribution Account (exclusive of income
earned after December 31, 1988), Employer Matching Contribution Account,
Employer Discretionary Contribution Account, Rollover Account, or his Qualified
Nonelective Contribution Account in the event of an immediate and heavy
financial need incurred by the Member and the Committee's determination that
the withdrawal is necessary to alleviate that hardship. A Member, however must
first take a hardship withdrawal from his Employer Matching Contribution
Account, Employer Discretionary Account, Rollover Account or his Qualified
Nonelective Contribution Account prior to receiving a hardship withdrawal from
his Salary Deferral Contribution Account.
(a) Approval Reasons for Hardship: A distribution shall be made on
account of financial hardship only if the distribution is for: (i)
expenses for medical care described in section 213(d) of the Code
previously incurred by the Member, the Member's spouse, or any
dependents of the Member (as defined in section 152 of the Code) or
necessary for these persons to obtain medical care described in section
213(d) of the Code, (ii) costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the Member,
(iii) payment of tuition, related educational fees and room and board
expenses, for the next 12 months of post-secondary education for the
Member, his or her spouse, children, or dependents (as defined in
section 152 of the Code), (iv) payments necessary to prevent the
eviction of the Member from his principal residence or foreclosure on
the mortgage of the Member's principal residence, or (v) any other event
added to this list by the Commissioner of Internal Revenue.
VII-1
45
(b) Maximum Distribution Permitted: A distribution to satisfy an
immediate and heavy financial need shall not be made in excess of the
amount of the immediate and heavy financial need of the Member and the
Member must have obtained all distributions, other than hardship
distributions, and all nontaxable (at the time of the loan) loans
currently available under all plans maintained by the Employer. The
amount of a Member's immediate and heavy financial need includes any
amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the financial hardship
distribution.
(c) Conditions Placed on Participation in Plan and other Fringe
Benefits:. The Member's hardship distribution shall terminate his or
her right to make any Employee After Tax Contributions or to have the
Employer make any Salary Deferral Contributions on his or her behalf
until the next time Employee After Tax Contributions and Salary Deferral
Contributions are permitted after the lapse of 12 months following the
hardship distribution and his or her timely filing of a written request
to resume his or her Employee After Tax Contributions or Salary Deferral
Contributions. Even then, if the Member resumes Contributions in his
next taxable year he cannot have the Employer make any Salary Deferral
Contributions in excess of the limit in section 402(g) of the Code for
that taxable year reduced by the amount of Salary Deferral Contributions
made by the Employer on the Member's behalf during the taxable year of
the Member in which he received the hardship distribution.
In addition, for 12 months after he receives a hardship
distribution from this Plan the Member is prohibited from making
elective contributions and employee contributions to all other qualified
and nonqualified plans of deferred compensation maintained by the
Employer, including stock option plans, stock purchase plans and cash or
deferred arrangements that are part of cafeteria plans described in
section 125 of the Code. However, the Member is not prohibited from
making mandatory employee contributions to a defined benefit plan, or
contributions to a health or welfare benefit plan, including one that is
part of a cafeteria plan within the meaning of section 125 of the Code.
7.5 WITHDRAWALS ON OR AFTER AGE 59 1/2. A Member who is at least age 59
1/2 is entitled to withdraw his vested interest in all of his Accounts.
7.6 LOANS. The Committee may direct the Trustee to make loans to Members
(and Beneficiaries who are "parties in interest" within the meaning of ERISA)
who have a vested interest in the Plan. Loans may not be made to any
shareholder-employee (as defined in section 1379 of the Code as in effect
before the enactment of the Subchapter S Revision Act of 1982) or any
owner-employee (as defined in section 401(c)(3) of the Code or a member of the
family of either (as defined in section 267(c)(4) of the Code. The Loan
Committee established by the Committee will be responsible for administering
the Plan loan program. All loans will comply with the following requirements:
(a) All loans will be made solely from the Member's or
Beneficiary's Account.
VII-2
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(b) Loans will be available on a nondiscriminatory basis to all
Beneficiaries who are "parties in interest" within the meaning of ERISA,
and to all Members.
(c) Loans will not be made for less than $1,000.
(d) The maximum amount of a loan may not exceed the lesser of (i)
$50,000 reduced by the person's highest outstanding loan balance from
the Plan during the preceding one year period, or (ii) one-half of the
present value of the person's vested Account balance under the Plan
determined as of the date on which the loan is approved by the Loan
Committee. If determining whether a loan would exceed these limits, all
loans under all plans of the Employer and all Affiliated Employers which
are outstanding or which have not been repaid at least one year before
must be taken into consideration.
(e) Any loan from the Plan will be evidenced by a note or notes
(signed by the person applying for the loan) having such maturity,
bearing such rate of interest, and containing such other terms as the
Loan Committee will require by uniform and nondiscriminatory rules
consistent with this Section and proper lending practices. When
required by law, the borrowing person must be supplied with all
documents required by the truth-in-lending laws and any other applicable
federal or state statute.
(f) All loans will bear a reasonable rate of interest which will be
established by the Loan Committee. In determining the proper rate of
interest to be charged, at the time any loan is made or renewed, the
Loan Committee may contact one or more of the banks in the geographic
location in which the Member or Beneficiary resides to determine what
interest rate the banks would charge for a similar loan taking into
account the collateral offered.
(g) Each loan will be fully secured by a pledge of the borrowing
person's vested Account balance. No more than 50% of the person's
vested Account balance (determined immediately after the origination of
the loan) will be considered as security for any loan.
(h) Generally, the term of the loan will not be more than five
years. The Loan Committee may agree to a longer term only if the term
is otherwise reasonable and the proceeds of the loan are to be used to
acquire a dwelling which will be used within a reasonable time
(determined at the time the loan is made) as the principal residence of
the borrowing person.
(i) The loan agreement will require level amortization over the
term of the loan and repayment through salary withholding except in the
case of a loan to a person who is not employed by the Employer.
(j) A Member may not make a withdrawal if the remaining balance of
the Member's Account would be less than the outstanding loan balance or
the withdrawal would violate any security requirements of the loan. No
distribution may be made to a Member until all loans to him have been
paid in full. If a Member has an outstanding loan
VII-3
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from the Plan at the time he terminates employment with all Affiliated
Employers, the outstanding loan principal balance and any accrued but
unpaid interest will become immediately due in full. The Member will
have the right to immediately pay the Trustee that amount. If the
Member fails to repay the loan, the Trustee will foreclose on the loan
and the Member will be deemed to have received a Plan distribution of
the amount foreclosed upon. The Trustee will not foreclose upon a
Member's Salary Deferral Contributions Account or Qualified Nonelective
Employer Contributions Account until the Member has terminated
employment with all Affiliated Employers.
(k) If a Beneficiary defaults on his loan, the Trustee will
foreclose on the loan and the Beneficiary will be deemed to have
received a Plan distribution of the amount foreclosed upon.
(l) No amount that is pledged as collateral for a Plan loan to a
Participant will be available for withdrawal before he has fully repaid
his loan.
(m) All interest payments made pursuant to the terms of the loan
agreement will be credited to the borrowing person's Account and will
not be considered as general earnings of the Trust Fund to be allocated
to other Members. All expenses or losses incurred because of the loan
shall be charged to the borrowing person's Account.
(n) Payment of any loan made by a Member shall be suspended while a
Member is in qualified military service and is covered by USERRA.
(o) The Committee is authorized to establish written guidelines
which, if and when adopted, shall become part of this Plan and shall
establish a procedure for applying for loans, the basis on which loans
will be approved or denied, limitations (if any) on the types and
amounts of loans offered, and any other matters necessary or appropriate
to administering this Section.
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ARTICLE VIII
GENERAL PROVISIONS APPLICABLE TO
FILING A CLAIM, DISTRIBUTIONS TO MINORS AND
NO DUPLICATION OF BENEFITS
8.1 CLAIMS PROCEDURE. When a benefit is due, the Member or Beneficiary
should submit his claim to the person or office designated by the Committee to
receive claims. Under normal circumstances, a final decision shall be made as
to a claim within 90 days after receipt of the claim. If the Committee
notifies the claimant in writing during the initial 90 day period, it may
extend the period up to 180 days after the initial receipt of the claim. The
written notice must contain the circumstances necessitating the extension and
the anticipated date for the final decision. If a claim is denied during the
claims period, the Committee must notify the claimant in writing. The denial
must include the specific reasons for it, the Plan provisions upon which the
denial is based, and the claims review procedure. If no action is taken during
the claims period, the claim is treated as if it were denied on the last day of
the claims period.
If a Member's or Beneficiary's claim is denied and he wants a review, he
must apply to the Committee in writing. That application may include any
comment or argument the claimant wishes to make. The claimant may either
represent himself or appoint a representative, either of whom has the right to
inspect all documents pertaining to the claim and its denial. The Committee
may schedule any meeting with the claimant or his representative that it finds
necessary or appropriate to complete its review.
The request for review must be filed within 60 days after the denial. If
it is not, the denial becomes final. If a timely request is made, the
Committee must make its decision, under normal circumstances, within 60 days of
the receipt of the request for review. However, if the Committee notifies the
claimant prior to the expiration of the initial review period, it may extend
the period of review up to 120 days following the initial receipt of the
request for a review. All decisions of the Committee must be in writing and
must include the specific reasons for their action and the Plan provisions on
which their decision is based. If a decision is not given to the claimant
within the review period, the claim is treated as if it were denied on the last
day of the review period.
8.2 NO DUPLICATION OF BENEFITS. There shall be no duplication of benefits
under this Plan. Without regard to any other language in this Plan, all
distributions and withdrawals are to be subtracted from a Member's Account as
of the date of the distribution or withdrawal. Thus, if the Member has
received one distribution or withdrawal and is ever entitled to another
distribution or withdrawal, the prior distribution or withdrawal is to be taken
into account.
8.3 DISTRIBUTIONS TO DISABLED OR MINORS. If the Committee determines that
any person to whom a payment is due is a minor or is unable to care for his
affairs because of a physical or mental disability, it shall have the authority
to cause the payments to be made to an ancestor, descendant, spouse, or other
person the Committee determines to have incurred, or to be expected
VIII-1
49
to incur, expenses for that person or to the institution which is maintaining
or has custody of the person unless a prior claim is made by a qualified
guardian or other legal representative. The Committee and the Trustee shall
not be responsible to oversee the application of those payments. Payments made
pursuant to this power shall be a complete discharge of all liability under the
Plan and Trust and the obligations of the Employer, the Trustee, the Trust Fund
and the Committee.
VIII-2
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ARTICLE IX.
TOP-HEAVY REQUIREMENTS
9.1 APPLICATION. The requirements described in this Article shall apply
to each Plan Year that this Plan is determined to be a Top-Heavy Plan under the
test set out in the following Section.
9.2 TOP-HEAVY TEST. If on the Determination Date the Aggregate Accounts
of Key Employees in the Plan exceeds 60% of the Aggregate Accounts of all
Employees in the Plan, this Plan shall be a Top-Heavy Plan for that Plan Year.
In addition, if this Plan is required to be included in an Aggregation Group
and that group is a top-heavy group, this Plan shall be treated as a Top-Heavy
Plan. An Aggregation Group is a top-heavy group if on the Determination Date
the sum of (a) the present value of the cumulative accrued benefits for Key
Employees under all defined benefit plans in the Aggregation Group which
contains this Plan plus (b) the total of all of the accounts of Key Employees
under all defined contribution plans included in the Aggregation Group (which
contains this Plan) is more than 60% of a similar sum determined for all
employees covered in the Aggregation Group which contains this Plan.
In applying the above tests, the following rules shall apply:
(a) In determining the present value of the accumulated accrued
benefits for any Employee or the amount in the account of any Employee,
the value or amount shall be increased by all distributions made to or
for the benefit of the Employee under the Plan during the five year
period ending on the Determination Date.
(b) All rollover contributions made after December 31, 1983 by the
Employee to the Plan shall not be considered by the Plan for either
test.
(c) If an Employee is a Non-Key Employee under the Plan for the
Plan Year but was a Key Employee under the Plan for another prior Plan
Year, his account shall not be considered.
(d) Benefits shall not be taken into account in determining the
top-heavy ratio for any Employee who has not performed services for the
Employer during the last five-year period ending upon the Determination
Date.
9.3 VESTING RESTRICTIONS IF PLAN BECOMES TOP-HEAVY. If a Member has at
least one Hour of Service during a Plan Year when the Plan is a Top-Heavy Plan
he shall either vest under each of the normal vesting provisions of the Plan or
under the following vesting schedule, whichever is more favorable:
IX-1
51
PERCENTAGE OF AMOUNT VESTED
IN ACCOUNTS CONTAINING
COMPLETED YEARS OF ACTIVE SERVICE EMPLOYER CONTRIBUTIONS
Less than two years ................................. 0%
Two years but less than three years ................ 20%
Three years but less than four years ............... 40%
Four years but less than five years ................ 60%
Five years but less than six years ................. 80%
Six years or more ................................. 100%
If the Plan ceases to be a Top-Heavy Plan, this requirement shall no longer
apply. After that date the normal vesting provisions of the Plan shall be
applicable to all subsequent Contributions by the Employer.
9.4 MINIMUM CONTRIBUTION IF PLAN BECOMES TOP-HEAVY. If this Plan is a
Top-Heavy Plan and the normal allocation of the Employer Contribution and
forfeitures is less than 3% of any Non-Key Employee Member's Annual
Compensation, the Committee, without regard to the normal allocation
procedures, shall allocate the Employer Contribution and the forfeitures among
the Members who are in the employ of the Employer at the end of the Plan Year
(even if the Member has less than 501 Hours of Service in the Plan Year), in
proportion to each Member's Annual Compensation as compared to the total Annual
Compensation of all Members for that Plan Year until each Non-Key Employee
Member has had an amount equal to the lesser of (i) the highest rate of
Contribution applicable to any Key Employee, or (ii) 3% of his Annual
Compensation allocated to his Account. At that time, any more Employer
Contributions or forfeitures shall be allocated under the normal allocation
procedures described earlier in this Plan. Salary Deferral Contributions and
Employer Matching Contributions made on behalf of Key Employees are included in
determining the highest rate of Employer Contributions. Salary Deferral
Contributions made on behalf of Non-Key Employees shall not be included in
determining the minimum contribution required under this Section. Employer
Matching Contributions and amounts that may be treated as Section 401(k)
Contributions or Section 401(m) Contributions, other than Qualified Nonelective
Employer Contributions, made on behalf of Non-Key Employees may not be included
in determining the minimum contribution required under this Section to the
extent that they are treated as Section 401(m) Contributions or Section 401(k)
Contributions for purposes of the Actual Deferral Percentage test or the
Contribution Percentage test.
In applying this restriction the following rules shall apply:
(a) Each Employee who is eligible for membership (without regard to
whether he has made mandatory contributions, if any are required, or
whether his compensation is less than a stated amount) shall be entitled
to receive an allocation under this Section.
(b) All defined contribution plans required to be included in the
Aggregation Group shall be treated as one plan for purposes of meeting
the 3% maximum. This required aggregation shall not apply if this Plan
is also required to be included in an Aggregation
IX-2
52
Group which includes a defined benefit plan and this Plan enables that
defined benefit plan to meet the requirements of sections 401(a)(4) or
410 of the Code.
9.5 COVERAGE UNDER MULTIPLE TOP-HEAVY PLANS. If this Plan is a Top-Heavy
Plan, it must meet the vesting and benefit requirements described in this
Article without taking into account contributions or benefits under Chapter 2
of the Code (relating to tax on self-employment income), Chapter 21 of the Code
(relating to Federal Insurance Contributions Act), Title II of the Social
Security Act or any other Federal or State law.
If a Non-Key Employee is covered by both a Top-Heavy defined contribution
plan and a defined benefit plan, he shall receive the defined benefit minimum,
offset by the benefits provided under the defined contribution plan.
9.6 RESTRICTIONS IF PLAN BECOMES SUPER-TOP-HEAVY. If the Plan is
determined to be a Top-Heavy Plan, the number "1.00" must be substituted for
the number "1.25" when applying the limitations of section 415 of the Code to
this Plan, unless the Plan would not be a Top-Heavy Plan if "90%" were
substituted for "60%" and the Employer Contribution for the Plan Year for each
Non-Key Employee, who is a Member, is not less than 4% of the Member's Annual
Compensation.
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ARTICLE X.
ADMINISTRATION OF THE PLAN
10.1 APPOINTMENT, TERM OF SERVICE & REMOVAL. The Board of Directors shall
appoint a Committee to administer this Plan. The members shall serve until
their resignation, death or removal. Any member may resign at any time by
mailing a written resignation to the Board of Directors. Any member may be
removed by the Board of Directors, with or without cause. Vacancies may be
filled by the Board of Directors from time to time.
10.2 POWERS. The Committee is a fiduciary. It has the exclusive
responsibility for the general administration of the Plan and Trust, and has
all powers necessary to accomplish that purpose, including but not limited to
the following rights, powers, and authorities:
(a) to make rules for administering the Plan and Trust so long as
they are not inconsistent with the terms of the Plan;
(b) to construe all provisions of the Plan and Trust;
(c) to correct any defect, supply any omission, or reconcile any
inconsistency which may appear in the Plan or Trust;
(d) to select, employ, and compensate at any time any consultants,
actuaries, accountants, attorneys, and other agents and employees the
Committee believes necessary or advisable for the proper administration
of the Plan and Trust; any firm or person selected may be a disqualified
person but only if the requirements of section 4975(d) of the Code have
been met;
(e) to determine all questions relating to eligibility, Active
Service, Compensation, allocations and all other matters relating to the
amount of benefits and any one or more Members' or Former Members'
entitlement to benefits and to determine when it is required under the
Plan to treat a Former Member as a Member;
(f) to determine all controversies relating to the administration of
the Plan and Trust, including but not limited to any differences of
opinion arising between an Employer and the Trustee or a Member or Former
Member, or any combination of them and any questions it believes
advisable for the proper administration of the Plan and Trust;
(g) to direct or to appoint an investment manager or managers who
can direct the Trustee in all matters relating to the investment,
reinvestment and management of the Trust Fund;
(h) to direct the Trustee in all matters relating to the payment of
Plan benefits;
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(i) to delegate any clerical or recordation duties of the Committee
as the Committee believes is advisable to properly administer the Plan
and Trust; and
(j) to make any other determination of any fact or any decision as
to any aspect of the administration of the Plan and Trust that is
appropriate in its general administration of the Plan and Trust.
10.3 ORGANIZATION. The Committee may select, from among its members, a
chairman, and may select a secretary. The secretary need not be a member of
the Committee. The secretary shall keep all records, documents and data
pertaining to its administration of the Plan and Trust.
10.4 QUORUM AND MAJORITY ACTION. A majority of the Committee constitutes
a quorum for the transaction of business. The vote of a majority of the
members present at any meeting shall decide any question brought before that
meeting. In addition, the Committee may decide any question by a vote, taken
without a meeting, of a majority of its members.
10.5 SIGNATURES. The chairman, the secretary and any one or more of the
members of the Committee to which the Committee has delegated the power shall
each, severally, have the power to execute any document on behalf of the
Committee, and to execute any certificate or other written evidence of the
action of the Committee. The Trustee, after it is notified of any delegation
of power in writing, shall accept and may rely upon any document executed by
the appropriate member or members as representing the action of the Committee
until the Committee files a written revocation of that delegation of power with
the Trustee.
10.6 DISQUALIFICATION OF COMMITTEE MEMBER. A member of the Committee who
is also a Member of this Plan shall not vote or act upon any matter relating
solely to himself.
10.7 DISCLOSURE TO MEMBERS. The Committee shall make available to each
Member and Beneficiary for his examination those records, documents and other
data required under ERISA, but only at reasonable times during business hours.
No Member or Beneficiary has the right to examine any data or records
reflecting the compensation paid to any other Member or Beneficiary. The
Committee is not required to make any other data or records available other
than those required by ERISA.
10.8 STANDARD OF PERFORMANCE. The Committee and each of its members: (a)
shall use the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man, acting in a like capacity and familiar with such
matters, would use in conducting his business as the administrator of the Plan,
(b) shall, when exercising its power to direct investments, diversify the
investments of the Plan so as to minimize the risk of large losses, unless
under the circumstances it is clearly prudent not to do so, and (c) shall
otherwise comply with the provisions of this Plan and ERISA.
10.9 LIABILITY OF COMMITTEE AND LIABILITY INSURANCE. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee, the Trustee, any investment manager appointed by the Committee
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or any other agent appointed by the Committee unless required by the terms of
ERISA or another applicable state or federal law under which liability cannot
be waived. No member of the Committee shall be liable for any act or omission
of his own unless required by ERISA or another applicable state or federal law
under which liability cannot be waived.
If the Committee directs the Trustee to do so, it may purchase out of the
Trust Fund insurance for the members of the Committee, for any other
fiduciaries appointed by the Committee and for the Trust Fund itself to cover
liability or losses occurring because of the act or omission of any one or more
of the members of the Committee or any other fiduciary appointed under this
Plan. But, that insurance must permit recourse by the insurer against the
members of the Committee or the other fiduciaries concerned if the loss is
caused by breach of a fiduciary obligation by one or more members of the
Committee or other fiduciary.
10.10 EXEMPTION FROM BOND. No member of the Committee is required to give
bond for the performance of his duties unless required by a law which cannot be
waived.
10.11 COMPENSATION. The Committee shall serve without compensation but
shall be reimbursed by the Employer for all expenses properly incurred in the
performance of their duties unless the Sponsor elects to have those expenses
paid from the Trust Fund. Each Employer shall pay that part of the expense as
determined by the Committee in its sole judgment.
10.12 PERSONS SERVING IN DUAL FIDUCIARY ROLES. Any person, group of
persons, corporations, firm or other entity, may serve in more than one
fiduciary capacity with respect to this Plan, including serving as both Trustee
and as a member of the Committee.
10.13 ADMINISTRATOR. For all purposes of ERISA, the administrator of the
Plan is the Sponsor. The administrator has the final responsibility for
compliance with all reporting and disclosure requirements imposed under all
applicable federal or state laws and regulations.
10.14 STANDARD OF JUDICIAL REVIEW OF COMMITTEE ACTIONS. The Committee has
full and absolute discretion in the exercise of each and every aspect of the
rights, power, authority and duties retained or granted it under the Plan,
including without limitation, the authority to determine all facts, to
interpret this Plan, to apply the terms of this Plan to the facts determined,
to make decisions based upon those facts and to make any and all other
decisions required of it by this Plan, such as the right to benefits, the
correct amount and form of benefits, the determination of any appeal, the
review and correction of the actions of any prior administrative committee, and
the other rights, powers, authority and duties specified in this Article and
elsewhere in this Plan. Notwithstanding any provision of law, or any explicit
or implicit provision of this document, any action taken, or finding,
interpretation, ruling or decision made by the Committee in the exercise of any
of its rights, powers, authority or duties under this Plan shall be final and
conclusive as to all parties, including without limitation all Members, Former
Members and Beneficiaries, regardless of whether the Committee or one or more
of its members may have an actual or potential conflict of interest with
respect to the subject matter of the action, finding, interpretation, ruling or
decision. No final action, finding, interpretation, ruling or decision of the
Committee shall be subject to de novo review in any judicial proceeding. No
final action, finding, interpretation, ruling or decision of the Committee may
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be set aside unless it is held to have been arbitrary and capricious by a final
judgment of a court having jurisdiction with respect to the issue.
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ARTICLE XI.
TRUST FUND AND CONTRIBUTIONS
11.1 FUNDING OF PLAN. This Plan shall be funded by one or more separate
Trusts. If more than one Trust is used, each Trust shall be designated by the
name of the Plan followed by a number assigned by the Committee at the time the
Trust is established.
11.2 INCORPORATION OF TRUST. Each Trust is a part of this Plan. All
rights or benefits which accrue to a person under this Plan shall be subject
also to the terms of the agreements creating the Trust or Trusts and any
amendments to them which are not in direct conflict with this Plan.
11.3 AUTHORITY OF TRUSTEE. Each Trustee shall have full title and legal
ownership of the assets in the separate Trust which, from time to time, is in
his separate possession. No other Trustee shall have joint title to or joint
legal ownership of any asset in one of the other Trusts held by another
Trustee. Each Trustee shall be governed separately by the trust agreement
entered into between the Employer and that Trustee and the terms of this Plan
without regard to any other agreement entered into between any other Trustee
and the Employer as a part of this Plan.
11.4 ALLOCATION OF RESPONSIBILITY. To the fullest extent permitted under
section 405 of ERISA, the agreements entered into between the Employer and each
of the Trustees shall be interpreted to allocate to each Trustee its specific
responsibilities, obligations and duties so as to relieve all other Trustees
from liability either through the agreement, Plan or ERISA, for any act of any
other Trustee which results in a loss to the Plan because of his act or failure
to act.
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ARTICLE XII.
ADOPTION OF PLAN BY OTHER EMPLOYERS
12.1 ADOPTION PROCEDURE. Any business organization may, with the approval
of the Board of Directors, adopt this Plan by:
(a) adopting a resolution or executing a consent of the board of
directors of the adopting Employer or executing an adoption instrument
(approved by the board of directors of the adopting Employer) agreeing to
be bound as an Employer by all the terms, conditions and limitations of
this Plan except those, if any, specifically described in the adoption
instrument; and
(b) providing all information required by the Committee and the
Trustee.
An adoption may be retroactive to the beginning of a Plan Year if these
conditions are complied with on or before the last day of that Plan Year.
12.2 NO JOINT VENTURE IMPLIED. The document which evidences the adoption
of the Plan by an Employer shall become a part of this Plan. However, neither
the adoption of this Plan and its related Trust Fund by an Employer nor any act
performed by it in relation to this Plan and its related Trust Fund shall ever
create a joint venture or partnership relation between it and any other
Employer.
12.3 ALL TRUST ASSETS AVAILABLE TO PAY ALL BENEFITS. The Accounts of
Members employed by the Employers which adopt this Plan shall be commingled for
investment purposes. All assets in the Trust Fund shall be available to pay
benefits to all Members employed by any Employer which is an Affiliated
Employer with the first Employer.
12.4 QUALIFICATION A CONDITION PRECEDENT TO ADOPTION AND CONTINUED
PARTICIPATION. The adoption of this Plan and the Trust or Trusts used to fund
this Plan by a business organization is contingent upon and subject to the
express condition precedent that the initial adoption meets all statutory and
regulatory requirements for qualification of the Plan and the exemption of the
Trust or Trusts and that the Plan and the Trust or Trusts that are applicable
to it continue in operation to maintain their qualified and exempt status. In
the event the adoption fails to initially qualify and be exempt, the adoption
shall fail retroactively for failure to meet the condition precedent and the
portion of the Trust Fund applicable to the adoption shall be immediately
returned to the adopting business organization and the adoption shall be void
ab initio. In the event the adoption as to a given business organization later
becomes disqualified and loses its exemption for any reason, the adoption shall
fail retroactively for failure to meet the condition precedent and the portion
of the Trust Fund allocable to the adoption by that business organization shall
be immediately spun off, retroactively as of the last date for which the Plan
qualified, to a separate Trust for its sole benefit and an identical but
separate Plan shall be created, retroactively effective as of the last date the
Plan as adopted by that business organization qualified, for the benefit of the
Members covered by that adoption.
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ARTICLE XIII.
AMENDMENT AND WITHDRAWAL OR TERMINATION
PART A. AMENDMENT
13.1 RIGHT TO AMEND. The Sponsor has the sole right to amend this Plan.
An amendment may be made by adopting a resolution or executing a consent of the
Board of Directors, or by the appropriate officer of the Sponsor executing an
amendment document.
13.2 LIMITATION ON AMENDMENTS. No amendment shall:
(a) vest in an Employer any interest in the Trust Fund;
(b) cause or permit the Trust Fund to be diverted to any purpose
other than the exclusive benefit of the present or future Members and
their Beneficiaries except under the circumstances described in Section
4.21;
(c) decrease the Account of any Member or eliminate an optional form
of payment as to amounts then accrued;
(d) increase substantially the duties or liabilities of the Trustee
without its written consent; or
(e) change the vesting schedule to one which would result in the
nonforfeitable percentage of the Account derived from Employer
Contributions (determined as of the later of the date of the adoption of
the amendment or of the effective date of the amendment) of any Member
being less than the nonforfeitable percentage computed under the Plan
without regard to the amendment. If the Plan's vesting schedule is
amended, if the Plan is amended in any other way that affects the
computation of the Member's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting
schedule, each Member with at least three years of Service may elect,
within a reasonable period after the adoption of the amendment or the
change, to have the nonforfeitable percentage computed under the Plan
without regard to the amendment or the change. The election period shall
begin no later than the date the amendment is adopted or deemed to be
made and shall end no later than the latest of the following dates: (1)
60 days after the date the amendment is adopted or deemed to be made, (2)
60 days after the date the amendment becomes effective, or (3) 60 days
after the day the Member is issued written notice of the amendment.
13.3 EACH EMPLOYER DEEMED TO ADOPT AMENDMENT UNLESS REJECTED. Each Employer
shall be deemed to have adopted any amendment made by the Sponsor unless the
Employer notifies the Committee of its rejection in writing within 30 days after
it is notified of the amendment. A
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rejection shall constitute a withdrawal from this Plan by that Employer
unless the Sponsor acquiesces in the rejection.
13.4 AMENDMENT APPLICABLE ONLY TO MEMBERS STILL EMPLOYED UNLESS AMENDMENT
SPECIFICALLY PROVIDES OTHERWISE. No benefit for any person who died, retired,
became disabled or separated shall be affected by a subsequent amendment unless
the amendment specifically provides otherwise and the person consents to its
application. Instead, those persons who died, retired, became disabled or
separated prior to the execution of an amendment shall be entitled to the
benefit as adjusted from time to time as was provided by the Plan at the time
the person first became entitled to his benefit.
13.5 MANDATORY AMENDMENTS. The Contributions of each Employer to this
Plan are intended to be:
(a) deductible under the applicable provisions of the Code;
(b) except as otherwise prescribed by applicable law, exempt from
the Federal Social Security Act;
(c) except as otherwise prescribed by applicable law, exempt from
withholding under the Code; and
(d) excludable from any Employee's regular rate of pay, as that term
is defined under the Fair Labor Standards Act of 1938, as amended.
The Sponsor shall make any amendment necessary to carry out this
intention, and it may be made retroactively.
PART B. WITHDRAWAL OR TERMINATION
13.6 WITHDRAWAL OF EMPLOYER. An Employer may withdraw from this Plan and
its related Trust Fund if the Sponsor does not acquiesce in its rejection of an
amendment or by giving written notice of its intent to withdraw to the
Committee. The Committee shall then determine the portion of the Trust Fund
that is attributable to the Members employed by the withdrawing Employer and
shall notify the Trustee to segregate and transfer those assets to the
successor Trustee or Trustees when it receives a designation of the successor
from the withdrawing Employer.
A withdrawal shall not terminate the Plan and its related Trust Fund with
respect to the withdrawing Employer, if the Employer either appoints a
successor Trustee or Trustees and reaffirms this Plan and its related Trust
Fund as its new and separate plan and trust intended to qualify under section
401(a) of the Code, or establishes another plan and trust intended to qualify
under section 401(a) of the Code.
The determination of the Committee, in its sole discretion, of the portion
of the Trust Fund that is attributable to the Members employed by the
withdrawing Employer shall be final and binding
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upon all parties. The Trustee's transfer of those assets to the designated
successor Trustee shall relieve the Trustee of any further obligation,
liability or duty to the withdrawing Employer, the Members employed by that
Employer and their Beneficiaries, and the successor Trustee or Trustees.
13.7 TERMINATION OF PLAN. The Sponsor may terminate this Plan and its
related Trust Fund with respect to all Employers by executing and delivering to
the Committee and the Trustee, a notice of termination, specifying the date of
termination. Any Employer may terminate this Plan and its related Trust Fund
with respect to itself by executing and delivering to the Trustee a notice of
termination, specifying the date of termination. Likewise, this Plan and its
related Trust Fund shall automatically terminate with respect to any Employer
if there is a general assignment by that Employer to or for the benefit of its
creditors, or a liquidation or dissolution of that Employer without a
successor. Upon the termination of this Plan as to an Employer, the Trustee
shall, subject to the provisions of Section 13.9, distribute to each Member
employed by the terminating Employer the amount certified by the Committee to
be due the Member.
The Employer should apply to the Internal Revenue Service for a
determination letter with respect to its termination, and the Trustee should
not distribute the Trust Funds until a determination is received. However,
should it decide that a distribution before receipt of the determination letter
is necessary or appropriate it should retain sufficient assets to cover any tax
that may become due upon that determination.
13.8 100% VESTING REQUIRED ON PARTIAL OR COMPLETE TERMINATION OR COMPLETE
DISCONTINUANCE. Without regard to any other provision of this Plan, if there
is a partial or total termination of this Plan or there is a complete
discontinuance of the Employer's Contributions, each of the affected Members
shall immediately become 100% vested in his Account as of the end of the last
Plan Year for which a substantial Employer Contribution was made and in any
amounts later allocated to his Account. If the Employer then resumes making
substantial Contributions at any time, the appropriate vesting schedule shall
again apply to all amounts allocated to each affected Member's Account
beginning with the Plan Year for which they were resumed.
13.9 DISTRIBUTION UPON TERMINATION. A Member may receive a distribution
on account of termination of this Plan if neither the Employer nor any
Affiliated Employer establishes or maintains a successor plan within the period
ending 12 months after all assets are distributed from the Plan. A successor
plan for this purpose is any other defined contribution plan except: (a) an
employee stock ownership plan as defined in sections 4975(e) or 409 of the
Code, (b) a simplified employee pension plan as defined in section 408(k) of
the Code, or (c) or a defined contribution plan in which fewer than 2% of the
Members of this Plan were eligible to participate during the 24 month period
beginning 12 months before the time of this Plan's termination. Any
distribution on account of the termination of this Plan, must be made only in
the form of a lump sum payment or a Direct Rollover, as elected by the Member.
If a Member is given the opportunity but fails to make an election as to the
form of distribution, he shall be deemed to have elected a lump sum
distribution.
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ARTICLE XIV
SALE OF EMPLOYER OR SUBSTANTIALLY ALL OF ITS ASSETS
14.1 CONTINUANCE PERMITTED UPON SALE OR TRANSFER OF ASSETS. An Employer's
participation in this Plan and its related Trust Fund shall not automatically
terminate if it consolidates or merges and is not the surviving corporation,
sells substantially all of its assets, is a party to a reorganization and its
Employees and substantially all of its assets are transferred to another
entity, liquidates, or dissolves, if there is a successor organization.
Instead, the successor may assume and continue this Plan and its related Trust
Fund by executing a direction, entering into a contractual commitment or
adopting a resolution providing for the continuance of the Plan and its related
Trust Fund. Only upon the successor's rejection of this Plan and its related
Trust Fund or its failure to respond to the Employer's, the Sponsor's or the
Trustee's request that it affirm its assumption of this Plan within 90 days of
the request shall this Plan automatically terminate. In that event the
appropriate portion of the Trust Fund shall be distributed exclusively to the
Members or their Beneficiaries as soon as administratively feasible. If there
is a disposition to an unrelated entity of substantially all of the assets used
by the Employer in a trade or business or a disposition by the Employer of its
interest in a subsidiary, the Employer may make a lump sum distribution from
the Plan if it continues the Plan after the disposition; but the distribution
can only be made for those Members who continue employment with the acquiring
entity.
14.2 DISTRIBUTIONS UPON DISPOSITION OF ASSETS OR A SUBSIDIARY. A Member
employed by an Employer that is a corporation is entitled to receive a lump sum
distribution of his interest in his Accounts in the event of the sale or other
disposition by the Employer of at least 85% of all of the assets used by the
Employer in a trade or business to an unrelated corporation if (a) the Employer
continues to maintain the Plan after the disposition and (b) in connection with
the disposition the Member is transferred to the employ of the corporation
acquiring the assets.
A Member employed by an Employer that is a corporation is entitled to
receive a lump sum distribution of his interest in his Accounts in the event of
the sale or other disposition by the Employer of its interest in a subsidiary
(within the meaning of section 409(d)(3) of the Code) to an unrelated entity or
individual if (a) the Employer continues to maintain the Plan after the
disposition and (b) in connection with the disposition the Member continues
employment with the subsidiary.
The selling Employer is treated as continuing to maintain the Plan after
the disposition only if the purchaser does not maintain the Plan after the
disposition. A purchaser is considered to maintain the Plan if it adopts the
Plan, becomes an employer whose employees accrue benefits under the Plan, or if
the Plan is merged or consolidated with, or any assets or liabilities are
transferred from the Plan to a plan maintained by the purchaser in a
transaction subject to section 414(l)(1) of the Code.
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An unrelated corporation, entity or individual is one that is not required
to be aggregated with the selling Employer under section 414(b), (c), (m), or
(o) of the Code after the sale or other disposition.
If a Member's Account balance is or is deemed to be $5,000.00 or less
determined under the rules set out in Section 6.11, the Committee will direct
the Trustee to pay to the Member a lump sum cash distribution of his Account
balance as soon as administratively practicable following the disposition and
any Internal Revenue Service approval of the distribution that the Committee
deems advisable to obtain.
If it is or is deemed to be more than $5,000.00 at the date of the
disposition, he may elect (a) to receive a lump sum cash distribution of his
Account balance as soon as administratively practicable following the
disposition and receipt of any Internal Revenue Service approval of the
distribution that the Committee deems advisable to obtain, or (b) he may elect
to defer receipt of his vested Account balance until the first day of the month
coincident with or next following the date that he attains age 65. In the
manner and at the time required under Department of Treasury regulations, the
Committee will provide the Member with a notice of his right to defer receipt
of his Account balance.
However, no distribution shall be made to a Member under this Section
after the end of the second calendar year following the calendar year in which
the disposition occurred. In addition, no distribution shall be made under
this Section unless it is a lump sum distribution within the meaning of section
402(d)(4) of the Code, without regard to subparagraphs (A)(i) through (iv),
(B), and (F) of that section.
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ARTICLE XV.
MISCELLANEOUS
15.1 PLAN NOT AN EMPLOYMENT CONTRACT. The adoption and maintenance of
this Plan and its related Trust Fund is not a contract between any Employer and
its Employees which gives any Employee the right to be retained in its
employment. Likewise, it is not intended to interfere with the rights of any
Employer to discharge any Employee at any time or to interfere with the
Employee's right to terminate his employment at any time.
15.2 BENEFITS PROVIDED SOLELY FROM TRUST. All benefits payable under this
Plan shall be paid or provided for solely from the Trust Fund. No Employer
assumes any liability or responsibility to pay any benefit provided by the
Plan.
15.3 ANTI-ALIENATION PROVISION. No principal or income payable or to
become payable from the Trust Fund shall be subject: to anticipation or
assignment by a Member or by a Beneficiary to attachment by, interference with,
or control of any creditor of a Member or Beneficiary, or to being taken or
reached by any legal or equitable process in satisfaction of any debt or
liability of a Member or Beneficiary prior to its actual receipt by the Member
or Beneficiary. An attempted conveyance, transfer, assignment, mortgage,
pledge, or encumbrance of the Trust Fund, any part of it, or any interest in it
by a Member or Beneficiary prior to distribution shall be void, whether that
conveyance, transfer, assignment, mortgage, pledge, or encumbrance is intended
to take place or become effective before or after any distribution of Trust
assets or the termination of this Trust Fund itself. The Trustee shall never
under any circumstances be required to recognize any conveyance, transfer,
assignment, mortgage, pledge or encumbrance by a Member or Beneficiary of the
Trust Fund, any part of it, or any interest in it, or to pay any money or thing
of value to any creditor or assignee of a Member or Beneficiary for any cause
whatsoever. The prohibitions against the alienation of a Member's Account shall
not apply to:
(a) qualified domestic relations orders or domestic relations
orders entered into prior to January 1, 1985, or
(b) any offset of a Member's Account under the Plan that the
Member is ordered to pay to the Plan if (i) the order arises under
a judgment of conviction of a crime involving the Plan, a civil
judgment (including a consent decree) is entered by a court in
connection with a violation (or alleged violation) of part 4 of
subtitle B of title I of ERISA, or is pursuant to a settlement
agreement between the Secretary of Labor and the Member, or
between the Pension Benefit Guaranty Corporation and the Member,
in connection with a violation (or alleged violation) of part 4 of
such subtitle by a fiduciary or any other person, (ii) the
judgment, order, decree or settlement agreement expressly provides
for the offset of all or a part of the amount ordered or required
to be paid to the Plan against the Member's Account balance under
the Plan, and (iii) in a case in which the survivor annuity
requirements of Section 401(a)(11) of the Code apply with respect
to distributions, the requirements of Section 401(a)(13)(C)(iii)
of the Code are satisfied.
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15.4 REQUIREMENTS UPON MERGER OR CONSOLIDATION OF PLANS. This Plan shall
not merge or consolidate with or transfer any assets or liabilities to any
other plan unless each Member would (if the Plan then terminated) receive a
benefit immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).
15.5 GENDER AND NUMBER. If the context requires it, words of one gender
when used in this Plan shall include the other genders, and words used in the
singular or plural shall include the other.
15.6 SEVERABILITY. Each provision of this Agreement may be severed. If
any provision is determined to be invalid or unenforceable, that determination
shall not affect the validity or enforceability of any other provision.
15.7 GOVERNING LAW; PARTIES TO LEGAL ACTIONS. The provisions of this Plan
shall be construed, administered, and governed under the laws of the State of
Texas and, to the extent applicable, by the laws of the United States. The
Trustee or any Employer may at any time initiate a legal action or proceeding
for the settlement of the account of the Trustee, or for the determination of
any question or for instructions. The only necessary parties to that action or
proceeding are the Trustee and the Employer concerned. However, any other
person or persons may be included as parties defendant at the election of the
Trustee and the Employer.
IN WITNESS WHEREOF, Weatherford International, Inc. has caused this
Agreement to be executed this 30th day of December, 1998, in multiple
counterparts, each of which shall be deemed to be an original, to be effective
the 1st day of January, 1999, except for those provisions which have an earlier
effective date provided by law, or as otherwise provided under applicable
provisions of this Plan.
WEATHERFORD INTERNATIONAL, INC.
By: /s/ Jon R. Nicholson
----------------------------------------
Vice President - Human Resources
-------------------------------------------
Title
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