Exhibit 10.10.1
KANSAS CITY SOUTHERN
401(k) AND PROFIT SHARING PLAN
(Amended and Restated Effective April 1, 2002)
KANSAS CITY SOUTHERN
401(k) AND PROFIT SHARING PLAN
TABLE OF CONTENTS
Article I. DEFINITIONS........................................................................................... 2
1.01 "Plan".............................................................................................. 2
1.02 "Employer".......................................................................................... 2
1.03 "Trustee"........................................................................................... 2
1.04 "Plan Administrator"................................................................................ 2
1.05 "Advisory Committee"................................................................................ 2
1.06 "Employee".......................................................................................... 3
1.07 "Highly Compensated Employee"....................................................................... 3
1.08 "Participant"....................................................................................... 4
1.09 "Beneficiary"....................................................................................... 4
1.10 "Compensation"...................................................................................... 4
1.11 "Account"........................................................................................... 5
1.12 "Accrued Benefit"................................................................................... 5
1.13 "Nonforfeitable".................................................................................... 5
1.14 "Plan Year"......................................................................................... 5
1.15 "Effective Date".................................................................................... 5
1.16 "Plan Entry Date"................................................................................... 5
1.17 "Accounting Date"................................................................................... 6
1.18 "Trust"............................................................................................. 6
1.19 "Trust Fund"........................................................................................ 6
1.20 "Nontransferable Annuity"........................................................................... 6
1.21 "ERISA"............................................................................................. 6
1.22 "Code".............................................................................................. 6
1.23 "Service"........................................................................................... 6
1.24 "Hour of Service"................................................................................... 6
1.25 "Disability"........................................................................................ 7
1.26 SERVICE FOR PREDECESSOR EMPLOYER.................................................................... 8
1.27 RELATED EMPLOYERS................................................................................... 8
1.28 LEASED EMPLOYEES.................................................................................... 8
1.29 DETERMINATION OF TOP HEAVY STATUS................................................................... 8
1.30 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER........................................................... 10
Article II. EMPLOYEE PARTICIPANTS................................................................................ 11
2.01 ELIGIBILITY......................................................................................... 11
2.02 YEAR OF SERVICE - PARTICIPATION..................................................................... 12
2.03 BREAK IN SERVICE - PARTICIPATION.................................................................... 12
2.04 PARTICIPATION UPON REEMPLOYMENT..................................................................... 12
Article III. EMPLOYER CONTRIBUTIONS AND FORFEITURES.............................................................. 12
3.01 AMOUNT.............................................................................................. 12
3.02 DETERMINATION OF CONTRIBUTION....................................................................... 13
3.03 TIME OF PAYMENT OF CONTRIBUTION..................................................................... 13
3.04 CONTRIBUTION ALLOCATION............................................................................. 14
3.05 FORFEITURE ALLOCATION............................................................................... 16
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3.06 ACCRUAL OF BENEFIT.................................................................................. 16
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS................................................ 17
3.08 DEFINITIONS - ARTICLE III........................................................................... 18
Article IV. PARTICIPANT CONTRIBUTIONS............................................................................ 20
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS................................................................. 20
4.02 PARTICIPANT VOLUNTARY CONTRIBUTIONS - SPECIAL DISCRIMINATION TEST. (Reserved)....................... 20
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS.................................................................. 20
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY........................................................... 20
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION.................................................. 21
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT.......................................................... 21
Article V. TERMINATION OF SERVICE - PARTICIPANT VESTING.......................................................... 21
5.01 NORMAL RETIREMENT AGE............................................................................... 21
5.02 PARTICIPANT DISABILITY OR DEATH..................................................................... 21
5.03 VESTING SCHEDULE.................................................................................... 21
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT.... 22
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT................................................................ 23
5.06 YEAR OF SERVICE - VESTING........................................................................... 23
5.07 BREAK IN SERVICE - VESTING.......................................................................... 23
5.08 INCLUDED YEARS OF SERVICE - VESTING................................................................. 24
5.09 FORFEITURE OCCURS................................................................................... 24
Article VI. TIME AND METHOD OF PAYMENT OF BENEFITS............................................................... 24
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.................................................................. 24
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT................................................................ 26
6.03 BENEFIT PAYMENT ELECTIONS........................................................................... 28
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING
SPOUSES............................................................................................. 31
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY [Reserved]................................... 32
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY [Reserved]......................................... 32
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS....................................................... 32
6.08 ROLLOVER DISTRIBUTIONS.............................................................................. 33
Article VII. EMPLOYER ADMINISTRATIVE PROVISIONS.................................................................. 34
7.01 INFORMATION TO COMMITTEE............................................................................ 34
7.02 NO LIABILITY........................................................................................ 34
7.03 INDEMNITY OF COMMITTEE.............................................................................. 34
7.04 EMPLOYER DIRECTION OF INVESTMENT.................................................................... 34
7.05 AMENDMENT TO VESTING SCHEDULE....................................................................... 34
Article VIII. PARTICIPANT ADMINISTRATIVE PROVISIONS.............................................................. 35
8.01 BENEFICIARY DESIGNATION............................................................................. 35
8.02 NO BENEFICIARY DESIGNATION.......................................................................... 35
8.03 PERSONAL DATA TO COMMITTEE.......................................................................... 36
8.04 ADDRESS FOR NOTIFICATION............................................................................ 36
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8.05 ASSIGNMENT OR ALIENATION............................................................................ 36
8.06 NOTICE OF CHANGE IN TERMS........................................................................... 36
8.07 LITIGATION AGAINST THE TRUST........................................................................ 36
8.08 INFORMATION AVAILABLE............................................................................... 37
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS............................................................. 37
Article IX. ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANT'S ACCOUNTS................................... 38
9.01 MEMBERS' COMPENSATION, EXPENSES..................................................................... 38
9.02 TERM................................................................................................ 38
9.03 POWERS.............................................................................................. 38
9.04 GENERAL............................................................................................. 38
9.05 FUNDING POLICY...................................................................................... 39
9.06 MANNER OF ACTION.................................................................................... 39
9.07 AUTHORIZED REPRESENTATIVE........................................................................... 39
9.08 INTERESTED MEMBER................................................................................... 39
9.09 INDIVIDUAL ACCOUNTS................................................................................. 39
9.10 INDIVIDUAL STATEMENT................................................................................ 39
9.11 ACCOUNT CHARGED..................................................................................... 39
9.12 UNCLAIMED ACCOUNT PROCEDURE......................................................................... 40
9.13 INVESTMENT MANAGER.................................................................................. 40
9.14 BLACK-OUT PERIOD.................................................................................... 41
9.15 ELECTRONIC ELECTIONS................................................................................ 41
Article X. [RESERVED]............................................................................................ 41
Article XI. EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION............................................................ 41
11.01 EXCLUSIVE BENEFIT................................................................................... 41
11.02 AMENDMENT BY EMPLOYER............................................................................... 41
11.03 DISCONTINUANCE...................................................................................... 42
11.04 FULL VESTING ON TERMINATION......................................................................... 42
11.05 MERGER/DIRECT TRANSFER.............................................................................. 42
11.06 TERMINATION......................................................................................... 43
Article XII. PROVISIONS RELATING TO THE CODE Section 401(k) ARRANGEMENT.......................................... 44
12.01 CODE Section 401(k) ARRANGEMENT..................................................................... 44
12.02 DEFINITIONS......................................................................................... 45
12.03 ANNUAL ELECTIVE DEFERRAL LIMITATION................................................................. 47
12.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST............................................................. 48
12.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS.................. 52
12.06 CATCH-UP CONTRIBUTIONS.............................................................................. 55
Article XIII. MISCELLANEOUS...................................................................................... 55
13.01 EVIDENCE............................................................................................ 55
13.02 NO RESPONSIBILITY FOR EMPLOYER ACTION............................................................... 56
13.03 FIDUCIARIES NOT INSURERS............................................................................ 56
13.04 WAIVER OF NOTICE.................................................................................... 56
13.05 SUCCESSORS.......................................................................................... 56
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13.06 WORD USAGE.......................................................................................... 56
13.07 STATE LAW........................................................................................... 56
13.08 EMPLOYMENT NOT GUARANTEED........................................................................... 56
Article XIV. [RESERVED].......................................................................................... 57
Article XV. PARTICIPANT'S ACCOUNTS AND THEIR INVESTMENT.......................................................... 57
15.01 INDIVIDUAL ACCOUNTS................................................................................. 57
15.02 INVESTMENT OF ACCOUNTS.............................................................................. 57
15.03 PARTICIPANT ACCOUNTS - INVESTMENT PERCENTAGES....................................................... 57
15.04 VALUATION OF PARTICIPANTS' ACCRUED BENEFITS......................................................... 58
15.05 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS.............................................. 58
15.06 PARTICIPANT VOTING RIGHTS - EMPLOYER STOCK.......................................................... 59
Article XVI. PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL OF KCS.................................................. 60
16.01 DEFINITIONS OF "CHANGE IN CONTROL OF KCS":.......................................................... 60
16.02 PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL......................................................... 60
16.03 RIGHT TO AMEND ARTICLE XVI PRIOR TO CHANGE IN CONTROL OF KCS........................................ 61
Article XVII. PROVISIONS APPLICABLE TO ACCOUNTS TRANSFERRED FROM FORMER MIDSOUTH PLAN............................ 61
17.01 MIDSOUTH ACCOUNTS................................................................................... 61
17.02 MIDSOUTH PARTICIPANT CONTRIBUTION ACCOUNTS.......................................................... 62
17.03 METHOD OF PAYMENT OF ACCRUED BENEFIT................................................................ 62
17.04 TIME OF PAYMENT AND ACCRUED BENEFIT................................................................. 63
17.05 BENEFIT PAYMENT ELECTIONS........................................................................... 65
17.06 ANNUITY DISTRIBUTIONS TO MIDSOUTH PARTICIPANTS AND SURVIVING SPOUSES............................... 66
17.07 WAIVER ELECTION-QUALIFIED JOINT AND SURVIVOR ANNUITY................................................ 68
17.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY.................................................... 69
17.09 COORDINATION WITH SURVIVOR REQUIREMENTS............................................................. 70
17.10 PARTICIPANT LOANS................................................................................... 70
17.10 VESTING SCHEDULE FOR REPAID AMOUNTS................................................................. 70
Article XVIII. PROVISIONS APPLICABLE TO ACCOUNTS TRANSFERRED FROM FORMER GATEWAY PLAN............................ 70
18.01 GATEWAY ACCOUNTS.................................................................................... 70
18.02 SPECIAL WITHDRAWAL RIGHTS........................................................................... 71
18.03 METHOD OF PAYMENT OF ACCRUED BENEFIT................................................................ 71
18.04 TIME OF PAYMENT AND ACCRUED BENEFIT................................................................. 72
18.05 BENEFIT PAYMENT ELECTIONS........................................................................... 74
18.06 ANNUITY DISTRIBUTIONS TO GATEWAY PARTICIPANTS AND SURVIVING SPOUSES................................. 75
18.07 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.............................................. 77
18.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY.................................................... 78
18.09 COORDINATION WITH SURVIVOR REQUIREMENTS............................................................. 78
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ALPHABETICAL LISTING OF DEFINITIONS
Plan Definition Reference
(Page Number)
Account.................................................................................................... 1.11(5)
Accounting Date............................................................................................ 1.17(6)
Accrued Benefit............................................................................................ 1.12(5)
Advisory Committee......................................................................................... 1.05(2)
Annual Addition ....................................................................................... 3.08(a)(18)
Annuity Starting Date .................................................................................... 6.01(24)
Beneficiary ............................................................................................... 1.09(4)
Break in Service for Vesting Purposes .................................................................... 5 07(23)
Cash-Out Distribution .................................................................................... 5 04(22)
Catch-up Contributions Subaccount ..................................................................... 3.04(A)(14)
Code ...................................................................................................... 1.22(6)
Code Section 411 (d)(6) Protected Benefits .............................................................. 11.02(42)
Compensation .............................................................................................. 1.10(4)
Compensation for Code Section 415 Purposes ............................................................ 3.08(b)(19)
Compensation for Top Heavy Purposes ................................................................... 1.29(c)(10)
Deemed Cash-Out Rule .................................................................................. 5.04(C)(23)
Deferral Contributions .................................................................................. 12.01(44)
Deferral Contributions Account ........................................................................ 3.04(A)(14)
Defined Contribution Plan ............................................................................. 3.08(g)(19)
Defined Benefit Plan .................................................................................. 3.08(h)(20)
Determination Date .................................................................................... 1.29(g)(10)
Disability ................................................................................................ 1.25(7)
Effective Date............................................................................................. 1.15(5)
Elective Contributions..................................................................................... 1.10(4)
Elective Transfer........................................................................................ 11.05(43)
Employee................................................................................................... 1.06(3)
Employer................................................................................................... 1.02(2)
Employer for Code Section 415 Purposes................................................................. 3.08(d)(19)
Employer for Top Heavy Purposes........................................................................ 1.29(f)(10)
Employment Commencement Date.............................................................................. 2.01(11)
Employer Contributions Account............................................................................ 3.04(14)
ERISA...................................................................................................... 1.21(6)
Excess Amount.......................................................................................... 3.08(e)(19)
Forfeiture Break In Service............................................................................... 5.08(24)
Former Gateway Plan...................................................................................... 18.01(70)
Former MidSouth Plan..................................................................................... 17.01(61)
Gateway Accounts......................................................................................... 18.01(70)
Gateway Participant...................................................................................... 18.01(70)
Hardship............................................................................................... 6.03(E)(30)
Highly Compensated Employee................................................................................ 1.07(3)
Hour of Service............................................................................................ 1.24(6)
Investment Manager........................................................................... 9.04(i)(39); 9.13(40)
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KCS........................................................................................................ 1.02(2)
Key Employee............................................................................................ 1.29(a)(9)
Leased Employees........................................................................................... 1.28(8)
Limitation Year ....................................................................................... 3.08(f)(19)
Maximum Permissible Amount............................................................................. 3.08(c)(19)
MidSouth Accounts........................................................................................ 17.01(61)
MidSouth Participant..................................................................................... 17.01(61)
Minimum Distribution Incidental Benefit (MDIB)......................................................... 6.02(A)(27)
Non-Key Employee....................................................................................... 1.29(b)(10)
Nonforfeitable............................................................................................. 1.13(5)
Nontransferable Annuity.................................................................................... 1.20(6)
Normal Retirement Age..................................................................................... 5.01(21)
Participant................................................................................................ 1.08(4)
Participating Employer..................................................................................... 1.02(2)
Permissive Aggregation Group........................................................................... 1.29(e)(10)
Plan....................................................................................................... 1.01(2)
Plan Entry Date............................................................................................ 1.16(5)
Plan Administrator......................................................................................... 1.04(2)
Plan Year.................................................................................................. 1.14(5)
Qualified Domestic Relations Order........................................................................ 6.07(32)
Qualified Matching Contributions Account.................................................................. 3.04(14)
Qualified Nonelective Contributions Account............................................................... 3.04(15)
Regular Matching Contributions Account.................................................................... 3.04(14)
Related Employers.......................................................................................... 1.27(8)
Required Aggregation Group............................................................................. 1.29(d)(10)
Required Beginning Date................................................................................ 6.01(B)(25)
Rollover Account.......................................................................................... 4.03(20)
Rollover Contributions.................................................................................... 4.03(20)
Separation from Service.................................................................................... 1.23(6)
Service.................................................................................................... 1.23(6)
Sponsor.................................................................................................... 1.02(2)
Top Heavy Minimum Allocation........................................................................... 3.04(B)(15)
Top Heavy Ratio............................................................................................ 1.29(8)
Trust Fund................................................................................................. 1.19(6)
Trust...................................................................................................... 1.18(6)
Trustee.................................................................................................... 1.03(2)
Year of Service for Eligibility Purposes.................................................................. 2.02(12)
Year of Service for Vesting Purposes...................................................................... 5.06(23)
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Exhibit 10.10.1
KANSAS CITY SOUTHERN
401(k) AND PROFIT SHARING PLAN
(Amended and Restated Effective April 1, 2002)
INTRODUCTION
Kansas City Southern ("KCS") (known as Kansas City Southern Industries,
Inc. prior to May 2, 2002) originally established, effective as of January 1,
1996, the Kansas City Southern Industries, Inc. 401(k) Plan (the "401 (k)
Plan"), for the administration and distribution of contributions made by the
Employers for the purpose of providing retirement benefits for eligible
Employees.
Immediately prior to July 12, 2000 (the "Spinoff Date"), Stilwell
Financial Inc. ("Stilwell") and its subsidiaries (collectively, the "Stilwell
Group") were members of the controlled group of corporations (within the meaning
of Code Section 414(b)) that includes KCS. As of the Spinoff Date, all of the
shares of Stilwell held by KCS were distributed to the shareholders of KCS as a
spinoff dividend (such transaction being referred to herein as the "Spinoff")
and the members of the Stilwell Group thereby ceased to be members of the
controlled group of corporations that includes KCS.
As of the Spinoff Date, the 401(k) Plan was split into two separate
plans: (1) an amended and restated 401(k) plan providing benefits to eligible
employees of KCS and certain of its affiliates (exclusive of the Stilwell
Group), which continued to hold the assets of the 401(k) Plan allocable to
employees and former employees of KCS and certain of its affiliates other than
the Stilwell Group, and which continued to be known as the Kansas City Southern
Industries, Inc. 401(k) Plan (the "401(k) Plan"); and (2) a newly established
401(k) plan with a profit sharing plan component providing benefits to eligible
employees of the Stilwell Group, to which were transferred the assets of the
401(k) Plan allocable to employees and former employees of the Stilwell Group,
and which is known as the Stilwell Financial, Inc. 401(k) and Profit Sharing
Plan ("Stilwell Plan").
KCS originally established, effective as of January 1, 1990, the Kansas
City Southern Industries, Inc. Profit Sharing Plan (the "Profit Sharing Plan")
for the administration and distribution of contributions made by the Employers
for the purpose of providing retirement benefits for eligible Employees.
Effective as of the Spinoff Date the Profit Sharing Plan was amended and
restated, participants in the Profit Sharing Plan who were employees or former
employees of the Stilwell Group ceased to actively participate in the Profit
Sharing Plan, and the assets of the Profit Sharing Plan allocable to employees
and former employees of the Stilwell Group were transferred to the profit
sharing component of the Stilwell Plan.
Effective as of January 1, 2001 (the "Merger Date") the Profit Sharing
Plan was merged with the 401(k) Plan, which was amended, restated and renamed
the Kansas City Southern Industries, Inc. 401(k) and Profit Sharing Plan, and
which was subsequently renamed the Kansas City Southern 401(k) and Profit
Sharing Plan effective as of May 2, 2002 (the "Plan").
The provisions of this Plan, as amended and restated effective as of
the Merger Date, applied to each Employee who was employed by an Employer on or
after the Merger Date, and to any other Employee who was employed by an Employer
before the Merger Date and whose
Account under the Profit Sharing Plan was transferred to the Plan as of the
Merger Date. If a Participant in the 401(k) Plan or the Profit Sharing Plan
terminated employment from his last Employer prior to the Merger Date, the
benefits to which he is entitled shall be determined under the terms of the
401(k) Plan or the Profit Sharing Plan, as applicable, as in effect on the date
of the Employee's termination of employment, unless otherwise indicated.
Effective as of January 1, 2002, the Plan was amended and restated to
reflect certain provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 ("EGTRRA"). The amendment and restatement is intended as good faith
compliance with the requirements of EGTRRA and plan provisions should be
construed in accordance with EGTRRA and guidance issued thereunder.
The Plan is hereby further amended and restated effective as of April
1, 2002 (the "Effective Date"). Effective as of April 1, 2002, KCS appointed a
new Trustee and entered into a service agreement with a new recordkeeper. In
order to facilitate the change to the new recordkeeper and Trustee, the Advisory
Committee imposed a black-out period, as defined in Section 9.14, effective as
of March 15, 2002 and continuing until the Advisory Committee, in its sole
discretion, deems it no longer necessary to impose such a black-out period.
Except as otherwise provided, the provisions of this Plan, as hereby amended and
restated, shall be effective as of April 1, 2002. The provisions of this amended
and restated Plan shall apply to an Employee who is employed by an Employer on
or after the Effective Date. If a Participant terminated employment from his
last Employer prior to the Effective Date, the benefits to which he is entitled
shall be determined under the terms of the Plan as in effect on the date of the
Employee's termination of employment, unless otherwise indicated.
ARTICLE I.
DEFINITIONS
1.01 "Plan" means the retirement plan established and continued by
KCS as set forth herein, designated as the "Kansas City Southern 401(k) and
Profit Sharing Plan" and known as the "Kansas City Southern Industries, Inc.
401(k) and Profit Sharing Plan" prior to May 2, 2002.
1.02 "Employer" means Kansas City Southern ("KCS" or the "Sponsor")
(known as Kansas City Southern Industries, Inc. ("KCSI") prior to May 2, 2002),
or any other employer (a "Participating Employer") who with the written consent
of KCS adopts this Plan.
1.03 "Trustee" means Nationwide Trust Company, FSB, or any
successor in office who in writing accepts the position of Trustee.
1.04 "Plan Administrator" is Kansas City Southern unless KCS
designates another person to hold the position of Plan Administrator. In
addition to its other duties, the Plan Administrator has full responsibility for
compliance with the reporting and disclosure rules under ERISA as respects this
Plan.
1.05 "Advisory Committee" means the Sponsor's Advisory Committee as
from time to time constituted.
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1.06 "Employee" means any employee of an Employer, excluding any
Leased Employee, and excluding any individual who performs services for an
Employer and (i) is working in a classification described as an independent
contractor (even if such person is subsequently determined to be a common-law
employee of the Employer), (ii) is paid, directly or indirectly, through an
Employer's accounts payable system, or (iii) performs such services pursuant to
a contract or agreement which provides that the person is an independent
contractor or consultant (even if such person is subsequently determined to be a
common-law employee of the Employer).
1.07 "Highly Compensated Employee" means, for any Plan Year
commencing on or after January 1, 1997, any individual who (i) is an Employee
described in subsection (a) or (b) below, or (ii) is a former Employee described
in subsection (c), below:
(a) An Employee who at any time during the current Plan
Year or the preceding Plan Year is a more than five percent (5%) owner
(or is considered as owning more than five percent (5%) within the
meaning of Section 318 of the Code) ("5% Owner") of the Employer;
(b) An Employee who (i) received Compensation during the
preceding Plan Year in excess of $80,000 (in 1996, as adjusted in
accordance with regulations and rulings under Section 414(q) of the
Code), and (ii) if the Advisory Committee elects by amendment of the
Plan to apply this clause (ii) to determine the Highly Compensated
Employees for a Plan Year, for this Plan and, except as otherwise
permitted, consistently for all plans of the Employer whose plan years
begin in the same calendar year as such preceding Plan Year, is in the
group consisting of the top twenty percent (20%) of the total number of
persons employed by the Employer when ranked on the basis of
Compensation paid during the preceding Plan Year, provided that, for
purposes of determining the total number of persons employed by the
Employer, the following Employees shall be excluded:
(1) Employees who have not completed an aggregate of six
(6) months of service during the preceding Plan Year,
(2) Employees who work less than seventeen and one-half
(17-1/2) hours per week for 50% or more of the total weeks worked by
such employees during the preceding Plan Year,
(3) Employees who normally work during not more than six
(6) months during any year,
(4) Employees who have not attained age 21 by the end of
the preceding Plan Year,
(5) Employees who are nonresident aliens and who receive
no earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer which constitutes income during the preceding Plan
Year from sources within the United States (within the meaning of
Section 861(a)(3) of the Code), and
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(6) Except to the extent provided in regulations
prescribed by the Secretary of the Treasury, Employees who are members
of a collective bargaining unit represented by a collective bargaining
agent with which an Employer has or has had a bargaining agreement.
For purposes of this Section 1.07, "Compensation" means
Compensation as defined in Section 1.10 and Compensation must include
Elective Contributions.
The Advisory Committee must make the determination of who is a
Highly Compensated Employee, including the determinations of the number
and identity of the top paid 20% group and the relevant Compensation,
consistent with Code Section 414(q) and regulations issued under that
Code section. The Employer may make a calendar year election to
determine the Highly Compensated Employees for the Plan Year, as
prescribed by Treasury regulations. Except as otherwise permitted, a
calendar year election must apply to all plans and arrangements of the
Employer.
(c) The term "Highly Compensated Employee" also includes
any former Employee who separated from Service (or has a deemed
Separation from Service, as determined under Treasury regulations)
prior to the Plan Year, performs no Service for the Employer during the
Plan Year, and was a Highly Compensated Employee either for the
separation year or any Plan Year ending on or after his 55th birthday.
1.08 "Participant" is an Employee who is eligible to be and becomes
a Participant in accordance with the provisions of Section 2.01.
1.09 "Beneficiary" is a person designated by a Participant who is
or may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a beneficiary under the Plan until
the Trustee has fully distributed his benefit to him. A Beneficiary's right to
(and the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.10 "Compensation" means, effective as of January 1, 1997, the
Participant's wages, salaries, fees for professional service and other amounts
received for personal services actually rendered in the course of employment
with the Employer maintaining the Plan as defined in Code Section 3401(a) for
purposes of income tax withholding at the source but determined without regard
to any rules that limit remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)). Compensation includes Elective
Contributions made by the Employer on the Employee's behalf. "Elective
Contributions" are amounts excludible from the Employee's gross income under
Code Sections 125, Section 402(a)(8), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k) arrangement, a
simplified employee pension, cafeteria plan or tax-sheltered annuity. A
Compensation payment includes Compensation paid by the Employer to an Employee
through another person under the common paymaster provisions of Code
Sections 3121(s) and 3306(p).
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Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.10, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the EGTRRA annual compensation limit. The EGTRRA annual compensation limit is
$200,000, as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
EGTRRA annual compensation limit will be multiplied by a fraction, the numerator
of which is the number of months in the determination period, and the
denominator of which is 12.
Any reference in this Plan to the limitation under Code
Section 401(a)(17) shall mean the EGTRRA annual compensation limit set forth in
this provision.
Nondiscrimination. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.10, unless KCS elects to use an
alternate nondiscriminatory definition, in accordance with the requirements of
Code Section 414(s) and the regulations issued under that Code section. KCS may
elect to include all Elective Contributions made by the Employer on behalf of
the Employees. KCS's election to include Elective Contributions must be
consistent and uniform with respect to Employees and all plans of the Employer
for any particular Plan Year. KCS may make this election to include Elective
Contributions for nondiscrimination testing purposes, irrespective of whether
this Section 1.10 includes Elective Contributions in the general Compensation
definition applicable to the Plan.
1.11 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Plan.
1.12 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.13 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.14 "Plan Year" means the fiscal year of the Plan, a 12
consecutive month period ending every December 31.
1.15 "Effective Date" of this amended and restated Plan is April 1,
2002.
1.16 "Plan Entry Date" means July 1, 2002 and every October 1,
January 1, April 1 and July 1 thereafter.
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1.17 "Accounting Date" is the last day of the Plan Year. Unless
otherwise specified in the Plan, the Advisory Committee will make all the Plan
allocations for a particular Plan Year as of the Accounting Date of that Plan
Year.
1.18 "Trust" means the Master Trust established pursuant to the
Directed Trust Agreement between KCS and Nationwide Trust Company, FSB and/or
any other trust that may be established under this Plan.
1.19 "Trust Fund" means all property of every kind held or acquired
by the Trustee under the Plan, other than incidental benefit insurance
contracts.
1.20 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Trustee distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.21 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.22 "Code" means the Internal Revenue Code of 1986, as amended.
1.23 "Service" means any period of time the Employee is in the
employ of the Employer, including any period the Employee is on an unpaid leave
of absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service shall be provided in accordance with Section 414(u) of the
Code. "Separation from Service" means a severance from employment with the
Employer maintaining this Plan and all Related Employers.
1.24 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties. The Advisory
Committee credits Hours of Service under this paragraph (a) to the
Employee for the computation period in which the Employee performs the
duties, irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of
mitigation of damages, to which the Employer has agreed or for which
the Employee has received an award. The Advisory Committee credits
Hours of Service under this paragraph (b) to the Employee for the
computation period(s) to which the award or the agreement pertains
rather than for the computation period in which the award, agreement or
payment is made; and
(c) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the performance
of duties during a computation period, such as leave of absence,
vacation,
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holiday, sick leave, illness, incapacity (including disability),
layoff, jury duty or military duty. The Advisory Committee will credit
no more than 501 Hours of Service under this paragraph (c) to an
Employee on account of any single continuous period during which the
Employee does not perform any duties (whether or not such period occurs
during a single computation period). The Advisory Committee credits
Hours of Service under this paragraph (c) in accordance with the rules
of paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2, which the
Plan, by this reference, specifically incorporates in full within this
paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.24 is the Plan Year, Year of Service period, Break in Service period
or other period, as determined under the Plan provision for which the Advisory
Committee is measuring an Employee's Hours of Service.
The Employer will credit every Employee with Hours of Service on the
basis of the "actual" method. For purposes of the Plan, "actual" method means
the determination of Hours of Service from records of hours worked and hours for
which the Employer makes payment or for which payment is due from the Employer.
However, for an Employee who is paid on other than an hourly basis, Hours of
Service shall be credited according to the following schedule, based on the
payroll period of the Employee, for each payroll period with respect to which he
or she is paid or is entitled to payment of compensation:
Payroll Period Hours of Service
-------------- ----------------
Daily 10
Weekly 45
Bi-Monthly 95
Monthly 190
Solely for purposes of determining whether the Employee incurs a Break
in Service under any provision of this Plan, the Advisory Committee must credit
Hours of Service during an Employee's unpaid absence period due to maternity or
paternity leave. The Advisory Committee considers an Employee on maternity or
paternity leave if the Employee's absence is due to the Employee's pregnancy,
the birth of the Employee's child, the placement with the Employee of an adopted
child, or the care of the Employee's child immediately following the child's
birth or placement. The Advisory Committee credits Hours of Service under this
paragraph on the basis of the number of Hours of Service the Employee would
receive if he were paid during the absence period or, if the Advisory Committee
cannot determine the number of Hours of Service the Employee would receive, on
the basis of 8 hours per day during the absence period. The Advisory Committee
will credit only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Advisory Committee credits all Hours
of Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Advisory Committee credits these Hours of Service to the
immediately following computation period.
1.25 "Disability" means that the Participant has been determined to
be disabled by the Railroad Retirement Board or the Social Security
Administration.
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1.26 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains
the plan of a predecessor employer, the Plan treats service of the Employee with
the predecessor employer as service with the Employer.
1.27 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code
Section 414(c)) or an affiliated service group (as defined in Code Section
414(m) or in Code Section 414(o)). If the Employer is a member of a related
group, the term "Employer" includes, for the time period during which the
relation exists, the related group members for purposes of crediting Hours of
Service, determining Years of Service and Breaks in Service under Articles II
and V, applying the limitations on allocations in Part 2 of Article III,
applying the top heavy rules and the minimum allocation requirements of Article
III, the definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable Code
section or by a Plan provision. In addition, (i) the Plan shall treat all
service prior to the Effective Date that is credited with respect to an Employee
under the terms of the Plan in effect prior to the Effective Date as service
with the Employer, and (ii) the Plan shall treat service of an Employee on or
after the Effective Date with an "affiliate" of KCS during the time it is an
"affiliate" as service with the Employer. For purposes of the immediately
preceding sentence, the term "affiliate" means any corporation, partnership,
joint venture or other business entity with respect to which twenty-five percent
(25%) or more of the equity interests therein are owned, directly or indirectly,
by KCS, or by any entity at least 80% of the equity interests of which are owned
by KCS. However, only a Participating Employer described in Section 1.02 may
contribute to the Plan and only an Employee employed by a Participating Employer
described in Section 1.02 is eligible to participate in this Plan. For Plan
allocation purposes, "Compensation" does not include compensation received from
a related employer that is not participating in this Plan.
1.28 LEASED EMPLOYEES. The Plan does not treat a Leased Employee as
an Employee of the Employer. A Leased Employee is an individual (who otherwise
is not an Employee of the Employer) who, pursuant to a leasing agreement between
the Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning of
Code Section 144(a)(3)) on a substantially full time basis for at least one year
and who performs services under the primary direction or control of the
Employer. A Leased Employee who performs services for the Employer pursuant to a
contract or agreement which provides that the person is a Leased Employee will
not become eligible to participate in this Plan merely by reason of a
determination that the person is a common-law employee of the Employer, unless
and until the Employer changes the employment classification of such person.
1.29 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a Plan Year
if the top heavy ratio as of the Determination Date exceeds 60%. The top heavy
ratio is a fraction, the numerator of which is the sum of the present value of
Accrued Benefits of all Key Employees as of the Determination Date and the
denominator of which is a similar sum determined for all Employees. The Advisory
Committee must include in the top heavy ratio, as part of the present value of
Accrued Benefits, any contribution not made as of the Determination Date but
includible under Code Section 416 and the applicable Treasury regulations,
distributions on account of
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Separation from Service, death or disability made within the Determination
Period and any other distributions made within the 5-year period ending on the
Determination Date. The Advisory Committee must calculate the top heavy ratio by
disregarding the Accrued Benefit (and distributions, if any, of the Accrued
Benefit) of any Non-Key Employee who was formerly a Key Employee, and by
disregarding the Accrued Benefit (including distributions, if any, of the
Accrued Benefit) of an individual who has not received credit for at least one
Hour of Service with the Employer during the Determination Period. The Advisory
Committee must calculate the top heavy ratio, including the extent to which it
must take into account distributions, rollovers and transfers, in accordance
with Code Section 416 and the regulations under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the permissive
Aggregation Group, if any, each exceeds 60%. The Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory Committee must include
distributions from a terminated plan which would have been part of the Required
Aggregation Group if it were in existence on the Determination Date. The
Advisory Committee will calculate the present value of Accrued Benefits under
defined benefit plans or simplified employee pension plans included within the
group in accordance with the terms of those plans, Code Section 416 and the
regulations under that Code section. If a Participant in a defined benefit plan
is a Non-Key Employee, the Advisory Committee will determine his Accrued Benefit
under the accrual method, if any, which is applicable uniformly to all defined
benefit plans maintained by the Employer or, if there is no uniform method, in
accordance with the slowest accrual rate permitted under the fractional rule
accrual method described in Code Section 411(b)(1)(C). To calculate the present
value of benefits from a defined benefit plan, the Advisory Committee will use
the actuarial assumptions (interest and mortality only) prescribed by the
defined benefit plan(s) to value benefits for top heavy purposes. If an
aggregated plan does not have a valuation date coinciding with the Determination
Date, the Advisory Committee must value the Accrued Benefits in the aggregated
plan as of the most recent valuation date falling within the twelve-month period
ending on the Determination Date, except as Code Section 416 and applicable
Treasury regulations require for the first and second plan year of a defined
benefit plan. The Advisory Committee will calculate the top heavy ratio with
reference to the Determination Dates that fall within the same calendar year.
Definitions. For purposes of applying the provisions of this
Section 1.29:
(a) "Key Employee" means, as of any Determination Date,
any Employee or former Employee (or Beneficiary of such Employee), who,
for the Plan Year that includes the Determination Date: (i) has
Compensation in excess of $130,000 (as adjusted under Code Section
416(i)(1) for Plan Years beginning after December 31, 2002) and is an
officer of the Employer; (ii) is a more than 5% owner of the Employer;
or (iii) is a more than 1% owner of the Employer and has Compensation
of more than $150,000. The constructive ownership rules of Code
Section 318 (or the principles of that section, in the case of an
unincorporated Employer) will apply to determine ownership in the
Employer.
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The number of officers taken into account under clause (i) will not
exceed the greater of 3 or 10% of the total number (after application
of the Code Section 414(q)(8) exclusions) of Employees, but no more
than 50 officers. The Advisory Committee will make the determination of
who is a Key Employee in accordance with Code Section 416(i)(1) and the
regulations under that Code section.
(b) "Non-Key Employee" is an Employee who does not meet
the definition of Key Employee.
(c) "Compensation" means Compensation as determined under
Section 1.07 (relating to the Highly Compensated Employee definition).
(d) "Required Aggregation Group" means: (1) each qualified
plan of the Employer in which at least one Key Employee participates at
any time during the Determination Period; and (2) any other qualified
plan of the Employer which enables a plan described in clause (1) to
meet the requirements of Code Section 401(a)(4) or Code Section 410.
(e) "Permissive Aggregation Group" is the Required
Aggregation Group plus any other qualified plans maintained by the
Employer, but only if such group would satisfy in the aggregate the
requirements of Code Section 401(a)(4) and Code Section410. The
Advisory Committee will determine the Permissive Aggregative Group.
(f) "Employer" means the Employer that adopts this Plan
and any related employers described in Section 1.27.
(g) "Determination Date" for any Plan Year is the
Accounting Date of the preceding Plan Year or, in the case of the first
Plan Year of the Plan, the Accounting Date of that Plan Year. The
"Determination Period" is the 1-year period ending on the Determination
Date.
1.30 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER. If more than one
Employer maintains this Plan, then for purposes of determining Service and Hours
of Service, the Advisory Committee will treat all Employers maintaining this
Plan as a single employer.
Plan Allocations. The Advisory Committee and the Trustee will account
separately for each Employer's contributions under the Plan. In this respect,
the Advisory Committee will allocate each Employer's contributions to the
Trustee for a Plan Year, in accordance with Article III, to the Accounts of
those Participants actually employed by that Employer during the Plan Year. The
Advisory Committee will attribute Participant forfeitures to the Employer or
Employers that actually employed the forfeited Participant in the year of the
forfeiture. For this purpose, Compensation will mean Compensation paid during
the Plan Year to those Participants actually employed by that Employer during
the Plan Year.
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ARTICLE II.
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee (other than an Excluded Employee)
becomes a Participant in the Plan on the Plan Entry Date (if employed on that
date) coincident with or immediately following the later of his Employment
Commencement Date or the date he attains age 18. Each Employee who was a
Participant in the 401(k) Plan or the Profit Sharing Plan on the day before the
Merger Date and who continued as an Employee on the Merger Date continued as a
Participant in the Plan on the Merger Date. Each Employee who was a Participant
in the Plan on the day before the Effective Date and who continues as an
Employee on the Effective Date continues as a Participant in the Plan on the
Effective Date. The term "Employment Commencement Date" means the date on which
the Employee first performs an Hour of Service for an Employer.
An Employee is an Excluded Employee if he is (a) a nonresident alien
who receives no earned income (within the meaning of Code Section 911(d)(2))
from an Employer which constitutes income from sources within the United States
(within the meaning of Code Section 861(a)(3)), or (b) a member of a collective
bargaining unit, unless the collective bargaining agreement provides otherwise.
An Employee is a member of a collective bargaining unit if he is included in a
unit of employees covered by an agreement which the Secretary of Labor finds to
be a collective bargaining agreement between employee representatives and one or
more Employers if there is evidence that retirement benefits were the subject of
good faith bargaining between such employee representatives and such Employer or
Employers. The term "employee representatives" does not include an organization
more than one half the members of which are owners, officers or executives of
the Employer.
If a Participant has not incurred a Separation from Service but becomes
an Excluded Employee, then during the period such a Participant is an Excluded
Employee, the Advisory Committee will limit that Participant's sharing in the
allocation of Employer contributions and Participant forfeitures, if any, under
the Plan by disregarding his Compensation paid by the Employer for services
rendered in his capacity as an Excluded Employee. However, during such period of
exclusion, the Participant, without regard to employment classification,
continues to receive credit for vesting under Article V for each included Year
of Service and the Participant's Account continues to share fully in Trust Fund
allocations under Section 15.05.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes into
account all of the Participant's included Years of Service with the Employer as
an Excluded Employee for purposes of vesting credit under Article V.
A Leased Employee who performs services for the Employer pursuant to a
contract or agreement which provides that the person is a Leased Employee will
not become eligible to participate in this Plan merely by reason of a
determination that the person is a common-law employee of the Employer, unless
and until the Employer changes the employment classification of such person. If
a Leased Employee who is not a Participant becomes eligible to participate in
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the Plan by reason of a change in employment classification, he will participate
in the Plan immediately if he has satisfied the eligibility conditions of
Section 2.01 and would have been a Participant had he not been a Leased Employee
during his period of Service. Furthermore, the Plan takes into account all of
the Participant's included Years of Service with the Employer as a Leased
Employee for purposes of vesting credit under Article V.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Section 2.01, the Plan does not apply any
minimum Hour of Service requirement. The Plan does not require an Employee who
terminates employment to establish a new Employment Commencement Date if
re-employed by the Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of
participation in the Plan, the Plan does not apply any Break in Service rule.
2.04 PARTICIPATION UPON REEMPLOYMENT. A Participant whose
employment terminates reenters the Plan as a Participant on the date of his
reemployment. An Employee who satisfies the Plan's eligibility conditions but
who terminates employment prior to becoming a Participant becomes a Participant
in the Plan on the later of the Plan Entry Date on which he would have entered
the Plan had he not terminated employment or the date of his reemployment. Any
Employee who terminates employment prior to satisfying the Plan's eligibility
conditions becomes a Participant in accordance with the provisions of Section
2.01.
ARTICLE III.
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS:
SECTIONS 3.01 THROUGH 3.06.
3.01 AMOUNT.
(A) Contribution Formula. For each Plan Year, the Employer shall
contribute to the Trust the following amounts:
Deferral Contributions. The amount by which the
Participants have elected to have their Compensation (as
defined in Section 1.10 after modification by Section 12.01)
for the Plan Year reduced and contributed to the Trust as
deferral contributions pursuant to their salary reduction
agreements on file with the Advisory Committee.
Catch-up Contributions. The amount of deferral
contributions determined to be catch-up contributions in
accordance with Section 3.04.
Employer Matching Contributions. An amount equal to
100% of each Participant's eligible contributions. The
Employer will determine the amount of its matching
contributions by disregarding Participants not entitled to an
allocation of matching contributions. The Employer, in its
sole discretion, may designate all or any portion of its
matching contribution as a qualified matching contribution at
the time it makes the contribution.
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Discretionary Profit Sharing Contribution. The
additional amount the Employer may from time to time deem
advisable and designates as a discretionary profit sharing
contribution. The Employer, in its sole discretion, may
designate all or any portion of its discretionary profit
sharing contribution as a qualified nonelective contribution
at the time it makes the contribution.
The Employer shall make its contribution under the Plan irrespective of
whether it has net profits. Although the Employer may contribute to this Plan
irrespective of whether it has net profits, the Employer intends this plan to be
a profit sharing plan for all purposes under the Code. The Employer shall not
make a contribution to the Trust for any Plan Year to the extent the
contribution would exceed the Participants' "Maximum Permissible Amount" under
Section 3.08.
Eligible Contributions. Under the matching contribution formula, a
Participant's "eligible contributions" are the deferral contributions allocated
to the Participant not in excess of 3% of the Participant's Compensation (as
defined in Section 1.10 after modification by Section 12.01) for the Plan Year.
Eligible contributions do not include deferral contributions that are excess
deferrals under Section 12.03. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (b) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last deferrals made for a calendar
year.
(B) Return of Contributions. The Employer contributes to this Plan
on the condition its contribution is not due to a mistake of fact and the
Internal Revenue Service will not disallow the deduction for its contribution.
The Trustee, upon written request from the Employer, must return to the Employer
the amount of the Employer's contribution made by the Employer by mistake of
fact or the amount of the Employer's contribution disallowed as a deduction
under Code Section 404. The Trustee will not return any portion of the
Employer's contribution under the provisions of this paragraph more than one
year after:
(a) The Employer made the contribution by mistake of fact;
or
(b) The disallowance of the contribution as a deduction,
and then only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must
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make its contribution to the Trust within the time prescribed by the Code or
applicable Treasury regulations. The Employer must make deferral contributions
to the Trust, to the extent made pursuant to salary reduction agreements, within
an administratively reasonable period of time after withholding the
corresponding Compensation from the Participant. The Employer also must make
deferral contributions and qualified nonelective contributions no later than the
time prescribed by the Code or by Treasury regulations. Deferral contributions
are Employer contributions for all purposes under this Plan, except to the
extent the Code or Treasury regulations prohibit the use of these contributions
to satisfy the qualification requirements of the Code.
3.04 CONTRIBUTION ALLOCATION.
(A) Method of Allocation. To make allocations under the Plan, the
Advisory Committee must establish a Deferral Contributions Account, a Regular
Matching Contributions Account, a Qualified Matching Contributions Account, a
Qualified Nonelective Contributions Account and a Profit Sharing Contributions
Account for each Participant.
Deferral Contributions. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the deferral contributions the
Employer makes to the Trust on behalf of the Participant. Deferral contributions
shall be made to the Trust by the Employer as of the earliest date on which such
contributions can reasonably be segregated from the Employer's general assets.
Catch-up Contributions. The amount of a Participant's catch-up
contributions for a calendar year shall not be determinable until the last day
of the year. Catch-up contributions will be treated as such only if, and to the
extent that, the Participant's deferral contributions for the year exceed the
Plan limits described in Section 12.01, the 402(g) limitations set forth in
Section 12.03, the limitations described in Section 3.07, or the
nondiscrimination limits described in Section 12.04. To the extent the Advisory
Committee deems it advisable, amounts deemed to be catch-up contributions may be
accounted for in a separate subaccount ("Catch-up Contributions Subaccount")
under the Deferral Contributions Account.
Matching Contributions. The Employer, at the time of contribution, must
designate which portion, if any, of its matching contribution is allocable to
the Qualified Matching Contributions Accounts and which part, if any, is
allocable to the Regular Matching Contributions Accounts. The Advisory Committee
will allocate the matching contributions to the Regular Matching Contributions
Account of the Participant on whose behalf the Employer makes that contribution
as of the last day of the Plan Year; provided, however, that the Advisory
Committee will make tentative interim allocations of matching contributions to
the Regular Matching Contributions Account of the Participant on whose behalf
the Employer makes the contribution as of each date during the Plan Year on
which such Participant is paid, and shall make a final allocation upon the
earlier of the Participant's termination of employment with the Employer or the
last day of the Plan Year equal to the amount of matching contribution required
under Section 3.01(A) less any interim allocations made to such Participant's
Regular Matching Contributions Account during the Plan Year.
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To the extent the Employer makes qualified matching contributions, the
Advisory Committee will allocate the qualified matching contributions to the
Qualified Matching Contributions Account of the Participant on whose behalf the
Employer makes the contribution.
Qualified Nonelective Contributions. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant in the same ratio that the Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
Discretionary Profit Sharing Contributions. Subject to Section 3.04(B)
and any restoration allocation required under Section 5.04, the Advisory
Committee will allocate and credit each annual Employer discretionary profit
sharing contribution, if any, other than discretionary profit sharing
contributions which, at the time of contribution, the Employer designates as
qualified nonelective contributions, to the Profit Sharing Contributions Account
of each Participant who satisfies the conditions of Section 3.06 in the same
ratio that each Participant's Compensation for the Plan Year bears to the total
Compensation of all such Participants for the Plan Year.
(B) Top Heavy Minimum Allocation.
(1) Minimum Allocation. If the Plan is top heavy in any
Plan Year:
(a) Each Non-Key Employee (as defined in Section 1.29) who
is a Participant and is employed by the Employer on the last day of the
Plan Year will receive a top heavy minimum allocation for that Plan
Year and
(b) The top heavy minimum allocation is the lesser of 3%
of the Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key Employee
(as defined in section 1.29). However, if a defined benefit plan
maintained by the Employer which benefits a Key Employee depends on
this Plan to satisfy the antidiscrimination rules of Code
Section 401(a)(4) or the coverage rules of Code Section410 (or another
plan benefiting the Key Employee so depends on such defined benefit
plan), the top heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key Employees.
(c) For purposes of this Section 3.04(B), the term
"Participant" includes any employee otherwise eligible to participate
in the Plan but who is not a Participant because of his failure to make
elective deferrals under a Code Section 401(k) arrangement or because
of his failure to make mandatory employee contributions. For purposes
of clause (b), "Compensation" means Compensation as defined in Section
1.10. For purposes of this Section 3.04(B), a Participant's
contribution rate is the sum of Employer contributions (including
Employer matching contributions but not including Employer
contributions to Social Security) and forfeitures allocated to the
Participant's Account for the Plan Year divided by his Compensation for
the entire Plan Year. However, a Non-Key Employee's contribution rate
does not include any Elective Contributions under a Code Section 401(k)
arrangement. To determine a Participant's contribution rate, the
Advisory Committee
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must treat all qualified top heavy defined contribution plans
maintained by the Employer (or by any related Employers described in
Section 1.27) as a single Plan.
(2) Method of Compliance. The Plan will satisfy the top
heavy minimum allocation in accordance with this Section 3.04(B)(2).
The Advisory Committee first will allocate the Employer contributions
(and Participant forfeitures, if any) for the Plan Year in accordance
with the allocation formula under Section 3.04(A). The Employer then
will contribute an additional amount for the Account of any Participant
who is entitled under this Section 3.04(B) to a top heavy minimum
allocation and whose contribution rate for the Plan Year is less than
the top heavy minimum allocation. The additional amount is the amount
necessary to increase the Participant's contribution rate to the top
heavy minimum allocation. The Advisory Committee will allocate the
additional contribution to the Account of the Participant on whose
behalf the Employer makes the contribution.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. Subject to any
restoration allocation required under Section 5.04 or 9.12 and the special
forfeiture allocation for certain excess aggregate contributions described in
Section 12.05, the Advisory Committee will allocate the amount of a
Participant's Accrued Benefit forfeited under the Plan in accordance with
Section 3.04 to reduce the Employer matching contributions or profit sharing
contributions for the Plan Year in which the forfeiture occurs and, if
necessary, to reduce Employer matching contributions or profit sharing
contributions in subsequent Plan Years. The Advisory Committee will continue to
hold the undistributed, non-vested portion of a terminated Participant's Accrued
Benefit in his Account solely for his benefit until a forfeiture occurs at the
time specified in Section 5.09 or, if applicable, until the time specified in
Section 9.12. Except as provided under Section 5.04, a Participant will not
share in the allocation of a forfeiture of any portion of his Accrued Benefit.
Forfeiture of certain matching contributions. A Participant will
forfeit any matching contributions allocated with respect to excess deferrals,
excess contributions or excess aggregate contributions, as determined under
Article XII. The Advisory Committee will allocate these forfeited amounts in
accordance with this Section 3.05.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year, except as provided in Section 3.04.
Compensation Taken Into Account. In allocating an Employer qualified
nonelective contribution or an Employer discretionary profit sharing
contribution to a Participant's Account, the Advisory Committee, except for
purposes of determining the top heavy minimum contribution under Section
3.04(B), will take into account only the Compensation determined for the portion
of the Plan Year in which the Employee is actually a Participant.
Hours of Service Requirement. A Participant will share in the
allocation of Employer deferral contributions, matching contributions and
qualified nonelective contributions for a Plan Year without regard to any Hours
of Service requirement for that Plan Year. Subject to the top-heavy minimum
allocation requirement of Section 3.04(B), a Participant will not share in the
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allocation of Employer discretionary profit sharing contributions for a Plan
Year if the Participant does not complete a minimum of 1,000 Hours of Service
during the Plan Year, unless the Participant terminates employment during the
Plan Year because of death or Disability or because of the attainment of Normal
Retirement Age in the current Plan Year or in a prior Plan Year.
Employment Requirement. A Participant will share in the allocation of
Employer contributions for a Plan Year without regard to whether he is employed
by the Employer on the Accounting Date of that Plan Year.
PART 2. LIMITATIONS ON ALLOCATION: SECTIONS 3.07 AND 3.08.
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. Except
to the extent permitted under Section 12.06 and Code Section 414(v), if
applicable, the amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may not
exceed the Maximum Permissible Amount. If the amount the Employer otherwise
would contribute to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the Employer
will reduce the amount of its contribution so the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. If an allocation of
Employer contributions, pursuant to Section 3.04, would result in an Excess
Amount (other than an Excess Amount resulting from the circumstances described
in Section 3.07(B)) to the Participant's Account, the Advisory Committee will
reallocate the Excess Amount to the remaining Participants who are eligible for
an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Advisory Committee will make this reallocation on the
basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
(A) Estimation of Compensation. Prior to the determination of the
Participant's actual Compensation for a Limitation Year, the Advisory Committee
may determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Advisory Committee
must make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Advisory Committee must reduce any Employer
contributions (including any allocation of forfeitures) based on estimated
annual Compensation by any Excess Amount carried over from prior years. As soon
as is administratively feasible after the end of the Limitation Year, the
Advisory Committee will determine the Maximum Permissible Amount for such
Limitation Year on the basis of the Participant's actual Compensation for such
Limitation Year.
(B) Disposition of Excess Amount. If, as a result of a reasonable
error in determining the amount of elective deferrals an Employee may make
without violating the limitations of Part 2 of Article III, an Excess Amount
results, the Advisory Committee will return the Excess Amount (as adjusted for
allocable income) attributable to the elective deferrals. The Advisory Committee
will make this distribution before making any of the corrective distributions in
the remaining paragraphs of this Section 3.07(B). The Advisory Committee will
disregard any elective deferrals returned under this paragraph for purposes of
Article XII.
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If, because of a reasonable error in estimating Compensation, or
because of the allocation of forfeitures, there is an Excess Amount with respect
to a Participant for a Limitation Year, the Advisory Committee will dispose of
such Excess Amount as follows:
(a) The Advisory Committee will return any nondeductible
voluntary Employee contributions to the Participant to the extent that
the return would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess
Amount still exists, and the Plan covers the Participant at the end of
the Limitation Year, then the Advisory Committee will use the Excess
Amount(s) to reduce future Employer contributions (including any
allocation of forfeitures) under the Plan for the next Limitation Year
and for each succeeding Limitation Year, as is necessary, for the
Participant.
(c) If, after the application of paragraph (a), an Excess
Amount still exists, and the Plan does not cover the Participant at the
end of the Limitation Year, then the Advisory Committee will hold the
Excess Amount unallocated in a suspense account. The Advisory Committee
will apply the suspense account to reduce Employer Contributions
(including allocation of forfeitures) for all remaining Participants in
the next Limitation Year, and in each succeeding Limitation Year if
necessary.
(d) Except as provided in paragraph (a), the Advisory
Committee will not distribute any Excess Amount(s) to Participants or
to former Participants.
(C) More Than One Plan. If the Advisory Committee allocated an
Excess Amount to a Participant's Account on an allocation date of this Plan
which coincides with an allocation date of another defined contribution plan
maintained by the Employer, the Advisory Committee will attribute the Excess
Amount allocated as of such date to the profit sharing component of this Plan.
If an Excess Amount remains, it will then be attributed to the Kansas City
Southern Employee Stock Ownership Plan, and then, if necessary, to the 401(k)
plan component of this Plan.
3.08 DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts
allocated on behalf of a Participant for a Limitation Year: (i) all
Employer contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury Regulations,
Annual Additions include excess contributions described in Code
Section 401(k), excess aggregate contributions described in Code
Section 401(m) and excess deferrals described in Code Section 402(g),
irrespective of whether the Plan distributes or forfeits such excess
amounts. Annual Additions also include Excess Amounts re-applied to
reduce Employer contributions under Section 3.07. Amounts allocated
after March 31, 1984, to an individual medical account (as defined in
Code
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Section 415(1)(2)) included as part of a defined benefit plan
maintained by the Employer are Annual Additions. Furthermore, Annual
Additions include contributions paid or accrued after December 31,
1985, for taxable years ending after December 31, 1985, attributable to
post-retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, but only for purposes of the dollar limitation applicable to
the Maximum Permissible Amount.
(b) "Compensation" - For purposes of applying the
limitations of Part 2 of this Article III, "Compensation" means
Compensation as defined in Section 1.10, disregarding any exclusions
from Compensation and disregarding Elective Contributions with respect
to Plan Years commencing before January 1, 1998, but including Elective
Contributions for Plan Years commencing after December 31, 1997.
(c) "Maximum Permissible Amount" - The lesser of (i)
$40,000 (as adjusted for increases in the cost-of-living under Code
Section 415(d)), or (ii) 100% of the Participant's Compensation for the
Limitation Year. If there is a short Limitation Year because of a
change in Limitation Year, the Advisory Committee will multiply the
$40,000 (or adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
12
(d) "Employer" - The Employer that adopts this Plan and
any related employers described in Section 1.27. Solely for purposes of
applying the limitations of Part 2 of this Article III, the Advisory
Committee will determine related employers described in Section 1.27 by
modifying Code Section 414(b) and (c) in accordance with Code
Section 415(h).
(e) "Excess Amount" - The excess of the Participant's
Annual Additions for the Limitation Year over the Maximum Permissible
Amount.
(f) "Limitation Year" - The Plan Year. If the Employer
amends the Limitation Year to a different 12 consecutive month period,
the new Limitation Year must begin on a date within the Limitation Year
for which the Employer makes the amendment, creating a short Limitation
Year.
(g) "Defined contribution plan" - A retirement plan which
provides for an individual account for each participant and for
benefits based solely on the amount contributed to the participant's
account, and any income, expenses, gains and losses, and any
forfeitures of accounts of other participants which the plan may
allocate to such participant's account. The Advisory Committee must
treat all defined contribution plans (whether or not terminated)
maintained by the Employer as a single plan. For purposes of the
limitations of part 2 of this Article III, the Advisory Committee will
treat employee contributions made to a defined benefit plan maintained
by the Employer as a separate defined contribution plan. The Advisory
Committee also will treat as a defined contribution plan an individual
medical account (as defined in Code Section 415(l)(2)) included as part
of a defined benefit plan maintained by the Employer and, for taxable
years ending after December 31, 1985, a welfare benefit fund under Code
Section 419(e) maintained by the Employer to the extent there are
post-retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)).
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(h) "Defined benefit plan" - A retirement plan which does
not provide for individual accounts for Employer contributions. The
Advisory Committee must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
ARTICLE IV.
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit
or require Participant nondeductible contributions.
4.02 PARTICIPANT VOLUNTARY CONTRIBUTIONS - SPECIAL DISCRIMINATION
TEST. (Reserved)
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form prescribed
by the Advisory Committee, may contribute cash or other property to the Trust
other than as a voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer either directly or
indirectly from one of the following types of plans to this Plan: (1) a
qualified plan described in Code Section 401(a) or Code Section 403(a),
excluding after-tax employee contributions; (2) an annuity contract described in
Code Section 403(b), excluding after-tax employee contributions; or (3) an
eligible plan under Code Section 457(b) which is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state. Before accepting a rollover contribution, the
Trustee may require an Employee to furnish satisfactory evidence that the
proposed transfer is in fact a "rollover contribution" which the Code permits an
employee to make to a qualified plan. A rollover contribution is not an Annual
Addition under Part 2 of Article III.
The Advisory Committee must establish a Rollover Account for each
Participant making a rollover contribution, and allocate the rollover
contribution to the Rollover Account as of the date the rollover contribution is
received. The Trustee will invest the rollover contribution as a part of the
Trust Fund.
The Advisory Committee may accept a rollover contribution on behalf of
an Employee who is otherwise eligible to become a Participant in the Plan prior
to the Plan Entry Date on which such Employee would become a Participant. If the
Advisory Committee accepts such a rollover contribution, the Advisory Committee
must treat the Employee as a Participant for all purposes of the Plan except the
Employee is not a Participant for purposes of sharing in Employer contributions
or Participant forfeitures under the Plan until he actually becomes a
Participant in the Plan.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's
Accrued Benefit is, at all times, one hundred percent (100%) Nonforfeitable to
the extent the value of his Accrued Benefit is derived from Participant rollover
contributions made by him to the Trust for his own benefit.
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4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A
Participant may not withdraw any part of his Rollover Account attributable to a
Participant rollover contribution made by him to the Trust except as provided in
Section 6.03(E). The Trustee, in accordance with the direction of the Advisory
Committee, will distribute a Participant's unwithdrawn Accrued Benefit
attributable to his Participant rollover contributions in accordance with the
provisions of Article VI applicable to the distribution of the Participant's
Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory
Committee must maintain, or must direct the Trustee to maintain, a separate
Account(s) in the name of each Participant to reflect the Participant's Accrued
Benefit under the Plan derived from his Participant rollover contributions. A
Participant's Accrued Benefit derived from his Participant rollover
contributions as of any applicable date is the balance of his separate
Participant rollover contribution Account(s).
ARTICLE V.
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age
is 65 years of age. A Participant who remains in the employ of the Employer
after attainment of Normal Retirement Age will continue to participate in
Employer contributions. A Participant's Accrued Benefit derived from Employer
contributions is 100% Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment
with the Employer terminates as a result of death or disability, the
Participant's Accrued Benefit derived from Employer contributions will be 100%
Nonforfeitable.
5.03 VESTING SCHEDULE. A Participant's Deferral Contributions
Account (including any Catch-up Contributions Subaccount), Qualified Matching
Contributions Account, Qualified Nonelective Contributions Account, Profit
Sharing Contributions Account and Rollover Account will be one hundred percent
(100%) Nonforfeitable at all times. Except as provided in Sections 5.01 and
5.02, for each Year of Service, a Participant's Nonforfeitable percentage of his
Regular Matching Contributions Account equals the percentage in the following
vesting schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
----------------- ---------------
Less than 2 None
2 20%
3 40%
4 60%
5 100%
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Notwithstanding anything in this Section 5.03 or Article XVIII to the
contrary, each Gateway Participant (as defined in Section 18.01) shall be 100%
vested in his Accrued Benefit.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED
PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article
VI, a partially-vested Participant receives a cash-out distribution before he
incurs a Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the non-vested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
(A) Restoration and Conditions upon Restoration. A partially-
vested Participant who is reemployed by the Employer after receiving a cash-out
distribution of the Nonforfeitable percentage of his Accrued Benefit may repay
the Trustee the amount of the cash-out distribution attributable to Employer
contributions, unless the Participant no longer has a right to restoration under
the requirements of this Section 5.04. If a partially-vested Participant makes
the cash-out distribution repayment, the Advisory Committee, subject to the
conditions of this paragraph (A), must restore his Accrued Benefit attributable
to Employer contributions to the same dollar amount as the dollar amount of his
Accrued Benefit on the Accounting Date, or other valuation date, immediately
preceding the date of the cash-out distribution, unadjusted for any gains or
losses occurring subsequent to that Accounting Date, or other valuation date.
Restoration of the Participant's Accrued Benefit includes restoration of all
Code Section 411(d)(6) protected benefits with respect to that restored Accrued
Benefit, in accordance with applicable Treasury regulations. The Advisory
Committee will not restore a reemployed Participant's Accrued Benefit under this
paragraph if:
(1) Five (5) years have elapsed since the Participant's
first reemployment date following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service
(as defined in Section 5.08). This condition also applies if the
Participant makes repayment within the Plan Year in which he incurs the
Forfeiture Break in Service and that Forfeiture Break in Service would
result in a complete forfeiture of the amount the Advisory Committee
otherwise would restore.
(B) Time and Method of Restoration. If neither of the two
conditions preventing restoration of the Participant's Accrued Benefit applies,
the Advisory Committee will restore the Participant's Accrued Benefit as of the
Plan Year Accounting Date coincident with or immediately following the
repayment. To restore the Participant's Accrued Benefit, the Advisory Committee,
to the extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures
the Advisory Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net
income or gain for the Plan Year; and
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(3) Third, the Employer contribution for the Plan Year to
the extent made under a discretionary formula.
To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make the required restoration,
the Employer must contribute, without regard to any requirement or condition of
Section 3.01, the additional amount necessary to enable the Advisory Committee
to make the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one reemployed
Participant, then the Advisory Committee will make the restoration allocation(s)
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan Year
of all reemployed Participants. The Advisory Committee will not take into
account the allocation under this Section 5.04 in applying the limitation on
allocations under Part 2 of Article III.
(C) 0% Vested Participant. The deemed cash-out rule applies to a
0% vested Participant. A 0% vested Participant is a Participant whose Accrued
Benefit derived from Employer contributions is entirely forfeitable at the time
of his Separation from Service. Under the deemed cash-out rule, the Advisory
Committee will treat the 0% vested Participant as having received a cash-out
distribution on the date of the Participant's Separation from Service or, if the
Participant's Account is entitled to an allocation of Employer contributions for
the Plan Year in which he separates from Service, on the last day of that Plan
Year.
For purposes of applying the restoration provisions of this Section
5.04, the Advisory Committee will treat the 0% vested Participant as repaying
his cash-out "distribution" on the first date of his reemployment with the
Employer.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory
Committee restores the Participant's Accrued Benefit, as described in Section
5.04, the Trustee will invest the cash-out amount the Participant has repaid in
a segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Advisory Committee restores the Participant's
Accrued Benefit, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any expense
or loss it incurs. Unless the repayment qualifies as a rollover contribution,
the Advisory Committee will direct the Trustee to repay to the Participant as
soon as is administratively practicable the full amount of the Participant's
segregated Account if the Advisory Committee determines either of the conditions
of Sections 5.04(A) prevents restoration as of the applicable Accounting Date,
notwithstanding the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under
Section 5.03, Year of Service means any Plan Year during which an Employee
completes not less than 1,000 Hours of Service with the Employer.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service with the Employer.
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5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of
determining "Years of Service" under Section 5.06, the Plan takes into account
all Years of Service an Employee completes with the Employer. For the sole
purpose of determining a Participant's Nonforfeitable percentage of his Accrued
Benefit derived from Employer contributions which accrued for his benefit prior
to a Forfeiture Break in Service, the Plan disregards any Year of Service after
the Participant first incurs a Forfeiture Break in Service. The Participant
incurs a Forfeiture Break in Service when he incurs 5 consecutive Breaks in
Service.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on the
earlier of:
(a) The last day of the Plan Year in which the Participant
first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out
distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant will not forfeit any
portion of his Accrued Benefit for any other reason or cause except as expressly
provided by this Section 5.09 or as provided under Section 9.12.
ARTICLE VI.
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to
Section 6.03, the Participant or the Beneficiary elects in writing to a
different time or method of payment, the Advisory Committee will direct the
Trustee to commence distribution of a Participant's Nonforfeitable Accrued
Benefit in accordance with this Section 6.01. A Participant must consent, in
writing, to any distribution required under this Section 6.01 if the present
value of the Participant's Nonrollover Nonforfeitable Accrued Benefit, at the
time of the distribution to the Participant, exceeds $5,000 and the Participant
has not attained Normal Retirement Age. A Participant's Nonrollover
Nonforfeitable Accrued Benefit is such Participant's Nonforfeitable Accrued
Benefit excluding that portion of the Participant's Accrued Benefit that is
attributable to rollover contributions (and earnings allocable thereto) within
the meaning of Code Sections 402(c), 403(a)(4), (403(b)(8), 408(d)(3)(A)(ii),
and 457(e)(16). For all purposes of this Article VI, the term "annuity starting
date" means the first day of the first period for which the Plan pays an amount
as an annuity or in any other form. Requests for distributions under this
Article VI (and under Articles XVII and XVIII) may be made at such times, on
such forms and in accordance with such procedures as the Advisory Committee may
from time to time prescribe. The distribution of a Participant's Account shall
be made or commenced as soon as administratively practicable following receipt
by the Advisory Committee of a properly completed request for distribution (or,
if the Participant's Nonrollover Nonforfeitable Accrued Benefit does not exceed
$5,000, following the Participant's Separation from Service).
(A) Termination of Employment For a Reason Other Than Death. For a
Participant who terminates employment with the Employer for a reason other than
death, the
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Advisory Committee will direct the Trustee to commence distribution of the
Participant's Accrued Benefit, as follows:
(1) Participant's Nonrollover Nonforfeitable Accrued
Benefit Not Exceeding $5,000. In a lump sum, as soon as
administratively practicable following the Participant's Separation
from Service, but in no event later than the 60th day following the
close of the Plan Year in which the Participant attains Normal
Retirement Age.
(2) Participant's Nonrollover Nonforfeitable Accrued
Benefit Exceeds $5,000 In a form and at the time elected by the
Participant, pursuant to Section 6.03. Unless the Participant has
elected otherwise, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump
sum, on the 60th day following the close of the Plan Year in which the
later of the following events occurs: (a) the Participant attains
Normal Retirement Age; or (b) the Participant's Separation from
Service; provided however, that a Participant's failure to make an
election pursuant to Section 6.03 shall be deemed to be an election to
defer commencement of distribution for purposes of this Section 6.01.
Notwithstanding any other provision herein, or any elections made by
the Participant, benefit payments shall be made or shall commence not
later than the Required Beginning Date.
(B) Required Beginning Date. If any distribution commencement date
described under Paragraph (A) of this Section 6.01, either by Plan provision or
by Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Advisory Committee instead must direct the Trustee
to make distribution under this Section 6.01 on the Participant's Required
Beginning Date. A Participant's Required Beginning Date is the April 1 of the
calendar year following the later of (i) the calendar year in which the
Participant attains age 70 1/2, or (ii) the calendar year in which the
Participant separates from Service. However, clause (ii) of the preceding
sentence shall not apply if the Participant is a 5% owner (as defined in Section
1.07(a)) with respect to the Plan Year ending in the calendar year in which he
attains age 70 1/2. Mandatory distributions commencing at the Participant's
Required Beginning Date will be made in an amount equal to the Participant's
required minimum distribution for the calendar year determined in accordance
with Section 6.02(A), unless the Participant, pursuant to the provisions of this
Article VI, makes a valid election to receive an alternative form of payment.
(C) Death of the Participant. The Advisory Committee will direct
the Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued Benefit
remaining in the Trust at the time of the Participant's death. The Advisory
Committee will determine the death benefit by reducing the Participant's
Nonforfeitable Accrued Benefit by any security interest the Plan has against
that Nonforfeitable Accrued Benefit by reason of an outstanding Participant
loan.
(1) Deceased Participant's Nonrollover Nonforfeitable
Accrued Benefit Does Not Exceed $5,000. The Advisory Committee must
direct the Trustee to pay the deceased Participant's Nonforfeitable
Accrued Benefit in a single cash sum, as soon as administratively
practicable following the Participant's death or, if later, the date on
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which the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
(2) Deceased Participant's Nonrollover Nonforfeitable
Accrued Benefit Exceeds $5,000. The Advisory Committee will direct the
Trustee to pay the deceased Participant's Nonforfeitable Accrued
Benefit at the time and in the form elected by the Participant or, if
applicable by the Beneficiary, as permitted under this Article VI. In
the absence of an election, the Advisory Committee will direct the
Trustee to distribute the Participant's undistributed Nonforfeitable
Accrued Benefit in a lump sum as soon as administratively practicable
following the Participant's death or, if later, the date on which the
Advisory Committee receives notification of or otherwise confirms the
Participant's death.
If the death benefit is payable to the Participant's surviving spouse
in full, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form this
Article VI would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution from the Participant's Accounts under one or any combination of the
following methods: (a) by payment in a lump sum; or (b) by payment in monthly,
quarterly or annual installments 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.
In the absence of contrary Participant elections, the Trustee shall
make all distributions of benefits to Participants under the Plan in cash. A
Participant may, however, elect to receive distributions of benefits under the
Plan in whole shares of common stock of KCS, or in a combination of cash and
whole shares of common stock of KCS, to the extent of whole shares of common
stock of KCS allocated to such Participant's Accounts.
The installment distribution options permitted under this Section 6.02
are available only if the present value of the Participant's Nonrollover
Nonforfeitable Accrued Benefit, at the time of the distribution to the
Participant, exceeds $5,000. To facilitate installment payments under this
Article VI, the Advisory Committee may direct the Trustee to segregate all or
any part of the Participant's Accrued Benefit in a separate Account. The Trustee
will invest the Participant's segregated Account in Federally insured interest
bearing savings account(s) or time deposit(s) (or a combination of both), or in
other fixed income investments. A segregated Account remains a part of the
Trust, but it alone shares in any income it earns, and it alone bears any
expense or loss it incurs. A Participant or Beneficiary may elect to receive an
installment distribution in the form of a Nontransferable Annuity Contract. The
Nontransferable Annuity Contract option will be eliminated with respect to
distributions commencing on or after the earlier of ninety (90) days after a
Participant receives a summary of material modification of the elimination of
such option or two (2) years after the date of the adoption of this amendment
and restatement of the Plan if such Participant does not receive a summary of
material modification. Under an installment distribution, the Participant or
Beneficiary, at any time, may elect to accelerate the payment of all, or any
portion, of the Participant's unpaid Nonforfeitable Accrued Benefit.
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(A) Minimum Distribution Requirements for Participants. The
Advisory Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of payment
which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the applicable
Treasury regulations. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code Section 401(a)(9) regulations). The
Advisory Committee will increase the Participant's Nonforfeitable Accrued
Benefit, as determined on the relevant valuation date, for contributions or
forfeitures allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by distributions made
after the valuation date and by December 31 of the valuation calendar year. For
purposes of this valuation, the Advisory Committee will treat any portion of the
minimum distribution for the first distribution calendar year made after the
close of that year as a distribution occurring in that first distribution
calendar year. In computing a minimum distribution, the Advisory Committee must
use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9. The
Advisory Committee, only upon the Participant's written request, will compute
the minimum distribution for a calendar year subsequent to the first calendar
year for which the Plan requires a minimum distribution by redetermining the
applicable life expectancy. However, the Advisory Committee may not redetermine
the joint life and last survivor expectancy of the Participant and a non-spouse
designated Beneficiary in a manner which takes into account any adjustment to a
life expectancy other than the Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant may not provide more than incidental benefits to
the Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code Section 401(a)(9) for distributions made
on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Advisory Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable life expectancy
factor and will disregard the MDIB factor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries. The Advisory Committee must determine whether
benefits to the Beneficiary are incidental as of the date the Trustee is to
commence payment of the retirement benefits to the Participant, or as of any
date the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is
due by the Participant's Required Beginning Date. The minimum distribution for
each subsequent distribution calendar year, including the calendar year in which
the Participant's Required
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Beginning Date falls, is due by December 31 of that year. If the Participant
receives distribution in the form of a Nontransferable Annuity Contract, the
distribution satisfies this Section 6.02(A) if the contract complies with the
requirements of Code Section 401(a)(9) and the applicable Treasury regulations.
(B) Minimum Distribution Requirements for Beneficiaries. The
method of distribution to the Participant's Beneficiary must satisfy Code
Section 401(a)(9) and the applicable Treasury regulations. If the Participant's
death occurs after his Required Beginning Date, the method of payment to the
Beneficiary must provide for completion of payment over a period which does not
exceed the payment period which had commenced for the Participant. If the
Participant's death occurs prior to his Required Beginning Date, the method of
payment to the Beneficiary, must provide for completion of payment to the
Beneficiary over a period not exceeding: (i) 5 years after the date of the
Participant's death; or (ii) if the Beneficiary is a designated Beneficiary, the
designated Beneficiary's life expectancy. The Advisory Committee may not direct
payment of the Participant's Nonforfeitable Accrued Benefit over a period
described in clause (ii) unless the Trustee will commence payment to the
designated Beneficiary no later than the December 31 following the close of the
calendar year in which the Participant's death occurred or, if later, and the
designated Beneficiary is the Participant's surviving spouse, December 31 of the
calendar year in which the Participant would have attained age 70 1/2. If the
Trustee will make distribution in accordance with clause (ii), the minimum
distribution for a calendar year equals the Participant's Nonforfeitable Accrued
Benefit as of the latest valuation date preceding the beginning of the calendar
year divided by the designated Beneficiary's life expectancy. The Advisory
Committee must use the unisex life expectancy multiples under Treas. Reg.
Section 1.72-9 for purposes of applying this paragraph. The Advisory Committee,
only upon the written request of the Participant or of the Participant's
surviving spouse, will recalculate the life expectancy of the Participant's
surviving spouse not more frequently than annually but may not recalculate the
life expectancy of a non-spouse designated Beneficiary after the Trustee
commences payment to the designated Beneficiary. The Advisory Committee will
apply this paragraph by treating any amount paid to the Participant's child,
which becomes payable to the Participant's surviving spouse upon the child's
attaining the age of majority, as paid to the Participant's surviving spouse.
Upon the Beneficiary's written request, the Advisory Committee must direct the
Trustee to accelerate payment of all, or any portion, of the Participant's
unpaid Accrued Benefit, as soon as administratively practicable following the
effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days before nor
later than 30 days before the Participant's annuity starting date, the Plan
Administrator must provide a benefit notice to a Participant who is eligible to
make an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains Normal Retirement Age.
A distribution may commence less than 30 days after the benefit notice
is given, provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the
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decision of whether or not to elect a distribution (and, if applicable,
a particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02. The Participant or Beneficiary must make an election under this Section
6.03 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a Participant's Accrued Benefit in
accordance with the requirements of Article VI.
(A) Participant Elections After Termination of Employment. If the
present value of a Participant's Nonrollover Nonforfeitable Accrued Benefit
exceeds $5,000, he may elect to have the Trustee commence distribution as soon
as administratively practicable following the Participant's Separation from
Service. The Participant may reconsider an election at any time prior to the
annuity starting date and elect to commence distribution as of any other
distribution date, but not earlier than the date described in the first sentence
of this Paragraph (A). A Participant who has separated from Service may elect
distribution as of any distribution date following his attainment of Normal
Retirement Age, irrespective of the restrictions otherwise applicable under this
Section 6.03(A). If the Participant is partially-vested in his Accrued Benefit,
an election under this Paragraph (A) to distribute prior to the Participant's
incurring a Forfeiture Break in Service (as defined in Section 5.08), must be in
the form of a cash-out distribution (as defined in Article V). A Participant may
not receive a cash-out distribution if, prior to the time the Trustee actually
makes the cash out distribution, the Participant returns to employment with the
Employer.
(B) Participant Elections Prior to Termination of Employment.
(1) Distribution. After a Participant (1) attains Normal
Retirement Age or (2) attains age 59-1/2 and has at least five Years of
Service, or is otherwise 100% vested, the Participant, until he
retires, has a continuing election to receive all or any portion of his
Accrued Benefit attributable to his Regular Matching Contributions
Account and Profit Sharing Contributions Account. A Participant must
make an election under this Section 6.03(B) on a form prescribed by the
Advisory Committee at any time during the Plan Year for which his
election is to be effective. In his written election, the Participant
must specify the percentage or dollar amount he wishes the Trustee to
distribute to him. The Participant's election relates solely to the
percentage or dollar amount specified in his election form and his
right to elect to receive an amount, if any, for a particular Plan Year
greater than the dollar amount or percentage specified in his election
form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under
this Section 6.03(B) within the 90-day period (or as soon as
administratively practicable) after the Participant files his written
election with the Trustee.
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The Trustee will distribute the balance of the Participant's Accrued Benefit not
distributed under this Section 6.03(B) in accordance with the other distribution
provisions of this Plan.
(C) Death Benefit Elections. If the present value of the deceased
Participant's Nonrollover Nonforfeitable Accrued Benefit exceeds $5,000, the
Participant's Beneficiary may elect to have the Trustee distribute the
Participant's Nonforfeitable Accrued Benefit in a form and within a period
permitted under Section 6.02. The Beneficiary's election is subject to any
restrictions designated in writing by the Participant and not revoked as of his
date of death.
(D) Transitional Elections. Notwithstanding the provisions of
Section 6.01 and 6.02, if the Participant (or Beneficiary) signed a written
distribution designation prior to January 1, 1984, the Advisory Committee must
distribute the Participant's Nonforfeitable Accrued Benefit in accordance with
that designation. This Section 6.03(D) does not apply to a pre-1984 distribution
designation, and the Advisory Committee will not comply with that designation if
any of the following applies: the method of distribution would have disqualified
the Plan under Code Section 401(a)(9) as in effect on December 31, 1983; (2) the
Participant did not have an Accrued Benefit as of December 31, 1983; (3) the
distribution designation does not specify the timing and form of the
distribution and the death Beneficiaries (in order of priority); (4) the
substitution of a Beneficiary modifies the payment period of the distribution;
or (5) the Participant (or Beneficiary) modifies or revokes the distribution
designation. In the event of a revocation, the Plan must distribute, no later
than December 31 of the calendar year following the year of revocation, the
amount which the Participant would have received under Section 6.02(A) if the
election had not been in effect or, if the Beneficiary revokes the election, the
amount which the Beneficiary would have received under Section 6.02(B) if the
election had not been in effect. The Advisory Committee will apply this Section
6.03(D) to rollovers and transfers in accordance with Part J of the Code
Section 401(a)(9) regulations.
(E) Special Distributions Rules for Deferral Contributions
Account, Rollover Account and Qualified Accounts. The in-service distribution
provisions in Section 6.03(B) will not apply to the Deferral Contributions
Account (including any Catch-up Contributions Subaccount), Rollover Account,
Qualified Nonelective Contributions Account, and Qualified Matching
Contributions Account. Instead, the distribution provisions in this Section
6.03(E) will apply to withdrawals from these Accounts by a Participant prior to
his Separation from Service. After the Participant's Separation from Service,
the provisions of this Article VI other than this Section 6.03(E) will apply to
the distribution of the Participant's entire Accrued Benefit.
The Participant, until he retires, has a continuing election to receive
a distribution from his Deferral Contributions Account (including any Catch-up
Contributions Subaccount), Rollover Account, Qualified Nonelective Contributions
Account, and Qualified Matching Contributions Account if: (I) he has attained
age 59-1/2; or (II) he incurs an immediate and heavy financial hardship. The
distribution event under clause (I) applies to all or any portion of these
Accounts. The distribution event under clause (II) applies only to the elective
deferrals allocated to the Participant's Deferral Contributions Account
(excluding earnings) and the Participant's Rollover Account.
A hardship distribution, as described in clause (II), must be on
account of one or more of the following immediate and heavy financial needs: (1)
medical expenses described in Code
-30-
Section 213(d) incurred by the Participant, by the Participant's spouse, or by
any of the Participant's dependents, or necessary to obtain such medical care;
(2) the purchase (excluding mortgage payments) of a principal residence for the
Participant; (3) the payment of post-secondary education tuition, related
educational fees, and room and board expenses, for the next 12 months for the
Participant, for the Participant's spouse, or for any of the Participant's
dependents; or (4) to prevent the eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's principal
residence. The Participant may make application for a hardship distribution at
any time.
Restrictions on hardship distribution. The following restrictions apply
to a Participant's hardship distribution under this Section 6.03(E) that is made
from the Participant's Deferral Contributions Account (including any Catch-up
Contributions Subaccount): (a) the Participant may not make elective deferrals
or employee contributions to the Plan for the 12-month period following the date
of his hardship distribution; (b) the distribution may not exceed the amount of
the immediate and heavy financial need (including any amounts necessary to pay
any federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution); and (c) the Participant must have obtained all
distributions, other than hardship distributions, and all nontaxable loans
currently available under this Plan and all other qualified plans maintained by
the Employer. The suspension of elective deferrals and employee contributions
described in clause (a) also must apply to all other qualified plans and to all
nonqualified plans of deferred compensation maintained by the Employer (other
than any mandatory employee contribution portion of a defined benefit plan),
including stock option, stock purchase and other similar plans. Notwithstanding
the previous sentence, the suspension of employee contributions shall not
include employee contributions for health or welfare benefit plans (other than
the cash or deferred arrangement portion of a cafeteria plan). In order to make
elective deferrals or employee contributions to the Plan following the 12-month
suspension period, the Participant must file a new salary reduction agreement
with the Advisory Committee. A salary reduction agreement executed by an
eligible Employee shall be effective in accordance with Sections 12.01 and
12.06.
Procedure. A Participant must make an election under this Section
6.03(E) on a form prescribed by the Advisory Committee at any time during the
Plan Year for which his election is to be effective. In his written election,
the Participant must specify the percentage or dollar amount he wishes the
Trustee to distribute to him. The Participant's election relates solely to the
percentage or dollar amount specified in his election form and his right to
elect to receive an amount, if any, for a particular Plan Year greater than the
dollar amount or percentage specified in his election form terminates on the
Accounting Date. The minimum amount a Participant may elect for purposes of a
hardship distribution is $1,000. A hardship distribution shall be withdrawn
first from the Participant's Rollover Account and second from the Participant's
Deferral Contributions Account (including any Catch-up Contributions
Subaccount). The Trustee must make a distribution to a Participant in accordance
with his election under this Section 6.03(E) within the 90-day period (or as
soon as administratively practicable) after the Participant files his written
election with the Trustee.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
The joint and survivor annuity requirements do not apply to this Plan. The Plan
does not provide any annuity distributions to Participants nor to surviving
spouses. A transfer
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agreement described in Section 11.05 may not permit a plan which is subject to
the provisions of Code Section417 to transfer assets to this Plan, unless the
transfer is an elective transfer, as described in Section 11.05.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.
[Reserved]
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. [Reserved]
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing
contained in this Plan prevents the Trustee, in accordance with the direction of
the Advisory Committee, from complying with the provisions of a qualified
domestic relations order (as defined in Code Section 414(p)). This Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order as soon as administratively practicable irrespective of
whether the Participant has attained his earliest retirement age (as defined
under Code Section 414(p)) under the Plan. A distribution to an alternate payee
prior to the Participant's attainment of earliest retirement age is available
only if: (1) the order specifies distribution at that time or permits an
agreement between the Plan and the alternate payee to authorize an earlier
distribution; and (2) if the present value of the alternate payee's benefits
under the Plan exceeds $5,000, and the order requires, the alternate payee
consents to any distribution occurring prior to the Participant's attainment of
earliest retirement age. Nothing in this Section 6.07 gives a Participant a
right to receive distribution at a time otherwise not permitted under the Plan
nor does it permit the alternate payee to receive a form of payment not
permitted under the Plan.
The Plan Administrator must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Plan Administrator must determine the qualified
status of the order and must notify the Participant and each alternate payee, in
writing, of its determination. The Plan Administrator must provide notice under
this paragraph by mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of Labor regulations.
A qualified domestic relations order that, prior to the Effective Date, had been
determined to be qualified under the Profit Sharing Plan with respect to the
Accrued Benefit of a Participant under the Profit Sharing Plan, shall continue
to be treated as a qualified domestic relations order under this Plan with
respect to the Accounts of the Participant that were transferred to this Plan
from the Profit Sharing Plan.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Plan Administrator is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Plan
Administrator determines the order is a qualified domestic relations order
within 18 months of the date amounts first are payable following receipt of the
order, the Advisory Committee will direct the Trustee to distribute the payable
amounts in accordance with the order. If the Plan Administrator does not make
its determination of the qualified status of the
-32-
order within the 18 month determination period, the Advisory Committee will
direct the Trustee to distribute the payable amounts in the manner the Plan
would distribute if the order did not exist and will apply the order
prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee at the election of an
alternate payee may direct the Trustee to invest any partitioned amount in a
segregated subaccount or separate account and to invest the account in Federally
insured, interest-bearing savings account(s) or time deposit(s) (or a
combination of both), or in other fixed income investments. A segregated
subaccount remains a part of the Trust, but it alone shares in any income it
earns, and it alone bears any expense or loss it incurs. The Trustee will make
any payments or distributions required under this Section 6.07 by separate
benefit checks or other separate distribution to the alternate payee(s).
6.08 ROLLOVER DISTRIBUTIONS. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For purposes of this Section 6.08, the
following definitions shall apply.
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee and
the distributee's designated beneficiary, or for a specified period of
ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and any hardship
distributions made pursuant to Section 6.03(E).
(b) Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in 403(a) of the Code, an annuity
contract described in section 403(b) of the Code, an eligible plan
under section 457(b) of the Code which is maintained by a state,
political subdivison of a state, or any agency or instrumentality of a
state or political subdivision of a state, or a qualified trust
described in section 401(a) of the Code, that accepts and agrees to
separately account for the distributee's eligible rollover
distribution.
(c) Distributee: A distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(d) Direct rollover: A direct rollover is a payment by the
Plan to an eligible retirement plan specified by the distributee.
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ARTICLE VII.
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date of
termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan, together with any other information which
the Advisory Committee considers necessary. The Employer's records as to the
current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act, on the part of its Advisory Committee (unless the
Employer is the Advisory Committee), the Trustee or the Plan Administrator
(unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF COMMITTEE. The Employer indemnifies and saves
harmless the Plan Administrator and the members of the Advisory Committee, and
each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Advisory Committee, or the members of the
Advisory Committee, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in their defense, in case the Employer fails to provide such defense.
The indemnification provisions of this Section 7.03 do not relieve the Plan
Administrator or any Advisory Committee member from any liability he may have
under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator
and the Advisory Committee members and the Employer may execute a letter
agreement further delineating the indemnification agreement of this Section
7.03, provided the letter agreement must be consistent with and must not violate
ERISA. The indemnification provisions of this Section 7.03 extend to the Trustee
solely to the extent provided by a letter agreement executed by the Trustee and
the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right
to direct the Trustee with respect to the investment and reinvestment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Employer direction of investment, the
Trustee and the Employer must execute a letter agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or reinvestment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves
the right to amend the vesting schedule at any time, the Advisory Committee will
not apply the amended vesting schedule to reduce the Nonforfeitable percentage
of any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment.
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If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. The Participant must file his election
with the Plan Administrator within 60 days of the latest of (a) the Employer's
adoption of the amendment; (b) the effective date of the amendment; or (c) his
receipt of a copy of the amendment. The Plan Administrator, as soon as
practicable, must forward a true copy of any amendment to the vesting schedule
to each affected Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. For purposes of this
Section 7.05, an amendment to the vesting schedule includes any Plan amendment
which directly or indirectly affects the computation of the Nonforfeitable
percentage of an Employee's rights to his Employer derived Accrued Benefit.
ARTICLE VIII.
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Accrued Benefit (including any life insurance
proceeds payable to the Participant's Account) in the event of his death and the
Participant may designate the form and method of payment. The Advisory Committee
will prescribe the form for the written designation of Beneficiary and, upon the
Participant's filing the form with the Advisory Committee, the form effectively
revokes all designations filed prior to that date by the same Participant. A
Beneficiary designation by a Participant that was valid under the Profit Sharing
Plan immediately prior to the Merger Date shall continue to be valid under this
Plan as to the Participant's Accounts transferred to the Plan from the Profit
Sharing Plan until revoked by the Participant in accordance with this Section
8.01.
A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent and a notary public
or the Plan Administrator (or his representative) must witness that consent. The
spousal consent requirements of this paragraph do not apply if: (1) the
Participant and his spouse are not married through the one-year period ending on
the date of the Participant's death; (2) the Participant's spouse is the
Participant's sole primary beneficiary; (3) the Plan Administrator is not able
to locate the Participant's spouse; (4) the Participant is legally separated or
has been abandoned (within the meaning of State law) and the Participant has a
court order to that effect; or (5) other circumstances exist under which the
Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
8.02 NO BENEFICIARY DESIGNATION. If a Participant fails to name a
Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a
Participant predeceased him, then the Trustee will pay the Participant's Accrued
Benefit in accordance with Section 6.02 in the following order of priority to:
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(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including
adopted children, in equal shares;
(c) The Participant's surviving parents, in equal shares;
or
(d) The legal representative of the estate of the
Participant.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise. The Advisory Committee will direct the Trustee as to the method and
to whom the Trustee will make the payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each
Beneficiary of a deceased Participant must furnish to the Advisory Committee
such evidence, data or information as the Advisory Committee considers necessary
or desirable for the purpose of administering the Plan. The provisions of this
Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete
evidence, data and information when requested by the Advisory Committee,
provided the Advisory Committee advises each Participant of the effect of his
failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each
Beneficiary of a deceased Participant must file with the Advisory Committee from
time to time, in writing, his post office address and any change of post office
address. Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Advisory Committee,
or as shown on the records of the Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section414(p)
relating to qualified domestic relations orders, neither a Participant nor a
Beneficiary may anticipate, assign or alienate (either at law or in equity) any
benefit provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan is
not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the
time prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent
jurisdiction may authorize any appropriate equitable relief to redress
violations of ERISA or to enforce any provisions of ERISA or the terms of the
Plan. A fiduciary may receive reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan.
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8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 8.08 in his office, or in such
other place or places as he may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary the
Plan Administrator will furnish him with a copy of any item listed in this
Section 8.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. The Plan
Administrator will provide adequate notice in writing to any Participant or to
any Beneficiary ("Claimant") whose claim for benefits under the Plan the
Advisory Committee has denied. The Plan Administrator's notice to the Claimant
must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on
which the Advisory Committee based its denial;
(c) A description of any additional material and
information needed for the Claimant to perfect his claim and an
explanation of why the material or information is needed; and
(d) That any appeal the Claimant wishes to make of the
adverse determination must be in writing to the Advisory Committee
within 75 days after receipt of the Plan Administrator's notice of
denial of benefits. The Plan Administrator's notice must further advise
the Claimant that his failure to appeal the action to the Advisory
Committee in writing within the 75 day period will render the Advisory
Committee's determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent plan
documents. The Advisory Committee will reexamine all facts related to the appeal
and make a final determination as to whether the denial of benefits is justified
under the circumstances. The Advisory Committee must advise the Claimant of its
decision within 60 days of the Claimant's written request for review, unless
special circumstances (such as a hearing) would make the rendering of a decision
within the 60 day limit unfeasible, but in no event may the Advisory Committee
render a decision respecting a denial for a claim for benefits later than 120
days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
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ARTICLE IX.
ADVISORY COMMITTEE - DUTIES WITH RESPECT
TO PARTICIPANT'S ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Sponsor must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. The members of the Advisory Committee will serve without compensation for
services as such. All expenses of the Plan and Trust (including Trustee fees)
will be paid out of the assets of the Plan except to the extent paid by the
Employer.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee, in its sole and absolute
discretion, shall have all powers necessary to discharge its duties under this
Plan including, without limitation, the following:
(a) To select a Secretary, who need not be a member of the
Advisory Committee;
(b) To determine the rights of eligibility of an Employee
to participate in the Plan, the value of a Participant's Accrued
Benefit and the Nonforfeitable percentage of each Participant's Accrued
Benefit;
(c) To adopt rules of procedure and regulations necessary
for the proper and efficient administration of the Plan provided the
rules are not inconsistent with the terms of this Plan;
(d) To construe and enforce the terms of the Plan and the
rules and regulations it adopts, including interpretation of the Plan
documents and documents related to the Plan's operation, and its
decisions shall be final and binding on all interested persons;
(e) To direct the Trustee as respects the crediting and
distribution of the Trust;
(f) To review and render decisions respecting a claim for
(or denial of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the
Employer may require for tax or other purposes;
(h) To engage the service of agents whom it may deem
advisable to assist it with the performance of its duties; and
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(i) To engage the services of an Investment Manager or
Managers (as defined in ERISA Section 3(38)), each of whom will have
full power and authority to manage, acquire or dispose (or direct the
Trustee with respect to acquisition or disposition) of any Plan asset
under its control.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.05 FUNDING POLICY. The Advisory Committee will review, not less
often than annually, all pertinent Employee information and Plan data in order
to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may
authorize any person, whether or not such person is a member of the Advisory
Committee, to sign on its behalf any notices, directions, applications,
certificates, consents, approvals, waivers, letters or other documents. The
Advisory Committee must evidence this authority by an instrument signed by all
members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may
decide or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in the
name of each Participant to reflect the Participant's Accrued Benefit in
accordance with the provisions of Article XV hereof and shall give the Trustee
directions with respect to the investment of the Accounts of Participants in
accordance with the provisions of Article XV.
9.10 INDIVIDUAL STATEMENT. As soon as practicable after the
Accounting Date of each Plan Year, but within the time prescribed by ERISA and
the regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect the records
reflecting the Account of any other Participant.
9.11 ACCOUNT CHARGED. The Advisory Committee will charge all
distributions made to a Participant or to his Beneficiary from his Account
against the Account of the Participant when made.
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9.12 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either
the Trustee or the Advisory Committee to search for, or ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify the
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.12 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Advisory Committee within 6 months from the date of mailing of
the notice, the Advisory Committee will treat the Participant's or Beneficiary's
unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed
payable Accrued Benefit in accordance with Section 3.05. Where the benefit is
distributable to the Participant, the forfeiture under this paragraph occurs as
of the last day of the notice period, if the Participant's Nonrollover
Nonforfeitable Accrued Benefit does not exceed $5,000, or as of the first day
the benefit is distributable without the Participant's consent, if the present
value of the Participant's Nonrollover Nonforfeitable Accrued Benefit exceeds
$5,000. Where the benefit is distributable to a Beneficiary, the forfeiture
occurs on the date the notice period ends except, if the Beneficiary is the
Participant's spouse and the Nonrollover Nonforfeitable Accrued Benefit payable
to the spouse exceeds $5,000, the forfeiture occurs as of the first day the
benefit is distributable without the spouse's consent. Pending forfeiture, the
Advisory Committee, following the expiration of the notice period, may direct
the Trustee to segregate the Nonforfeitable Accrued Benefit in a segregated
Account and to invest that segregated Account in Federally insured interest
bearing savings accounts or time deposits (or in a combination of both), or in
other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.12
makes a claim, at any time, for his forfeited Accrued Benefit, the Advisory
Committee must restore the Participant's or Beneficiary's forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the Accrued Benefit
forfeited, unadjusted for any gains or losses occurring subsequent to the date
of the forfeiture. The Advisory Committee will make the restoration during the
Plan Year in which the Participant or Beneficiary makes the claim, first from
the amount, if any, of Participant forfeitures the Advisory Committee otherwise
would allocate for the Plan Year, then from the amount, if any, of the Trust
Fund net income or gain for the Plan Year and then from the amount, or
additional amount, the Employer contributes to enable the Advisory Committee to
make the required restoration. The Advisory Committee will direct the Trustee to
distribute the Participant's or Beneficiary's restored Accrued Benefit to him no
later than 60 days after the close of the Plan Year in which the Advisory
Committee restores the forfeited Accrued Benefit. The forfeiture provisions of
this Section 9.12 apply solely to the Participant's or to the Beneficiary's
Accrued Benefit derived from Employer contributions.
9.13 INVESTMENT MANAGER. The Advisory Committee shall have the
right, as provided in Section 9.04(i), to appoint an Investment Manager for all
or any part of the assets of the Trust Fund as the Advisory Committee shall
designate, provided that any firm so appointed shall be and continue qualified
to act as such in accordance with ERISA. The Advisory Committee may remove any
Investment Manager at any time, and need not specify any cause for such removal.
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9.14 BLACK-OUT PERIOD. Notwithstanding any other provisions in the
Plan to the contrary, in the event of a change in recordkeepers, trustees,
investment vehicles or other similar change or event, the Advisory Committee
shall have the power and authority to impose such temporary restrictions and
limitations on loans, withdrawals, distributions and Participant investment
elections as necessary to facilitate such a change or event (a "black-out
period"). In the event of a change in investment funds, the Advisory Committee
shall have the authority to direct the investment of each Participant's Accounts
and contributions in investment vehicles having investment objectives and risks
similar to those investment vehicles being eliminated or replaced.
9.15 ELECTRONIC ELECTIONS. Anything in the Plan to the contrary
notwithstanding, the Advisory Committee, in its discretion, may make disclosure
or give information to Participants and Beneficiaries and permit Participants or
their Beneficiaries to make electronic or telephonic elections in lieu of
written disclosure, information or elections provided in the Plan. In making
such a determination, the Advisory Committee shall consider the availability of
electronic and telephonic disclosure of information and elections to
Participants and Beneficiaries, the protection of the rights of Participants and
their Beneficiaries, the appropriateness of the standards for authentication of
identity and other security considerations involved in the electronic or
telephonic election system and any guidance issued by the Internal Revenue
Service and the Department of Labor. Notwithstanding the foregoing, any election
requiring spousal consent shall be made only on such written forms as approved
by the Advisory Committee.
ARTICLE X.
[RESERVED]
ARTICLE XI.
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
11.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of any
asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any part
of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any
time) used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries.
11.02 AMENDMENT BY EMPLOYER. Kansas City Southern, by duly adopted
resolution of its Board of Directors, or of the Compensation and Organization
Committee of its Board of Directors, has the right at any time and from time to
time:
(a) To amend this Plan in any manner it deems necessary or
advisable in order to qualify (or maintain qualification of) this Plan
and the Trust created under it under the appropriate provisions of Code
Section 401(a); or
(b) To amend this Plan in any other manner.
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No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or permit
any portion of the Trust Fund to revert to or become a property of the Employer.
No amendment may be made which affects the rights, duties or responsibilities of
the Trustee, the Plan Administrator or the Advisory Committee without the
written consent of the affected Trustee, the Plan Administrator or the affected
member of the Advisory Committee.
Code Section 411(d)(6) Protected Benefits. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
Section 412(c)(8), and may not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the adoption date (or, if
later, the effective date) of the amendment. An amendment reduces or eliminates
Code Section 411(d)(6) protected benefits if the amendment has the effect of
either (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy (as defined in Treasury regulations), or (2) except as
provided by Treasury regulations, eliminating an optional form of benefit. The
Advisory Committee must disregard an amendment to the extent application of the
amendment would fail to satisfy this paragraph. If the Advisory Committee must
disregard an amendment because the amendment would violate clause (1) or clause
(2), the Advisory Committee must maintain a schedule of the early retirement
option or other optional forms of benefit the Plan must continue for the
affected Participants.
All amendments must be made in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective.
11.03 DISCONTINUANCE. Each Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan. The Board of Directors
of Kansas City Southern, or the Compensation and Organization Committee thereof,
or any other duly authorized committee thereof, has the right to terminate, at
any time, this Plan and the Trust created under it. The Plan will terminate upon
the first to occur of the following:
(a) The date terminated by action of the Board of
Directors of Kansas City Southern, or the Compensation and Organization
Committee thereof, or any other duly authorized committee thereof; or
(b) The date Kansas City Southern is judicially declared
bankrupt or insolvent, unless the proceeding authorized continued
maintenance of the Plan.
11.04 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article V.
11.05 MERGER/DIRECT TRANSFER. The Plan may not be a party to any
merger or consolidation with another plan, or to a transfer of assets or
liabilities to another plan, unless immediately after the merger, consolidation
or transfer, the surviving Plan provides each Participant a benefit equal to or
greater than the benefit each Participant would have received had the Plan
terminated immediately before the merger or consolidation or transfer. The
Advisory
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Committee possesses the specific authority to enter into merger agreements or
direct transfer of assets agreements with the trustees of other retirement plans
described in Code Section 401(a), including an elective transfer, and to accept
the direct transfer of plan assets, or to transfer plan assets, as a party to
any such agreement.
The Advisory Committee may accept a direct transfer of plan assets on
behalf of an Employee prior to the date the Employee satisfies the Plan's
eligibility conditions. If the Advisory Committee accepts a direct transfer of
plan assets, the Advisory Committee must treat the Employee as a Participant for
all purposes of the Plan except the Employee is not a Participant for purposes
of sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
The Advisory Committee may not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan, except with
respect to an elective transfer. The Trustee will hold, administer and
distribute the transferred assets as a part of the Trust Fund and the Trustee
must maintain a separate Employer contribution Account for the benefit of the
Employee on whose behalf the Advisory Committee accepted the transfer in order
to reflect the value of the transferred assets. Unless a transfer of assets to
this Plan is an elective transfer, the Plan will preserve all Code
Section 411(d)(6) protected benefits with respect to those transferred assets,
in the manner described in Section 11.02. A transfer is an elective transfer if:
(1) the transfer satisfies the first paragraph of this Section 11.05; (2) the
transfer is voluntary, under a fully informed election by the Participant; (3)
the Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the transferor
plan, if that plan is not terminating); (4) the transfer satisfies the
applicable spousal consent requirements of the Code; (5) the transferor plan
satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (6) the
Participant has a right to immediate distribution from the transferor plan, in
lieu of the elective transfer; (7) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor plan payable
at that plan's normal retirement age; (8) the Participant has a 100%
Nonforfeitable interest in the transferred benefit; and (9) the transfer
otherwise satisfies applicable Treasury regulations. An elective transfer may
occur between qualified plans of any type.
Distribution restrictions under Code Section 401(k). If the Plan
receives a direct transfer (by merger or otherwise) of elective contributions
(or amounts treated as elective contributions) under a plan with a Code
Section 401(k) arrangement, the distribution restrictions of Code
Sections 401(k)(2) and (10) continue to apply to those transferred elective
contributions.
11.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonrollover
Nonforfeitable Accrued Benefit does not exceed $5,000, the Advisory
Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit to him in lump sum as soon as
administratively practicable after the Plan terminates; and
(2) if the present value of the Participant's Nonrollover
Nonforfeitable Accrued Benefit exceeds $5,000, the Participant or the
Beneficiary, in addition to the
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distribution events permitted under Article VI, may elect to have the
Trustee commence distribution of his Nonforfeitable Accrued Benefit as
soon as administratively practicable after the Plan terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonrollover
Nonforfeitable Accrued Benefit exceeds $5,000 and the Participant does not elect
an immediate distribution pursuant to Paragraph (2). The Trust will continue
until the Trustee in accordance with the direction of the Advisory Committee has
distributed all of the benefits under the Plan.
On each valuation date, the Advisory Committee will credit any part of
a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the conditions
of the Treasury regulations permitting such a reversion. A resolution or
amendment to freeze all future benefit accrual but otherwise to continue
maintenance of this Plan, is not a termination for purposes of this Section
11.06.
Special Rule for Deferral Contributions Account. Notwithstanding the
provisions of this Section 11.06, the Participant may not receive a distribution
of the portion of his Nonforfeitable Accrued Benefit attributable to elective
contributions under a Code Section 401(k) arrangement (or to amounts treated
under the Code Section 401(k) arrangement as elective contributions) pursuant to
the termination of the Plan unless: (a) the Participant otherwise is entitled to
a distribution of that portion of his Nonforfeitable Accrued Benefit; or (b) the
Plan termination occurs without the establishment of a successor plan. A plan is
a successor plan under clause (b) if (i) the plan is a defined contribution plan
(other than an ESOP) maintained by the Employer (or by a related employer); (ii)
at least 2% of the Employees who were eligible under the Plan are or were
eligible under the successor plan at any time within the 24-month period ending
after the time of termination; and (iii) the successor plan is in existence at
the time of the termination of the Plan or within the period ending twelve (12)
months after the final distribution of assets of the Plan. A distribution
pursuant to clause (b), must be part of a lump sum distribution to the
Participant of his Nonforfeitable Accrued Benefit.
ARTICLE XII.
PROVISIONS RELATING TO THE CODE Section 401(k) ARRANGEMENT
12.01 CODE Section 401(k) ARRANGEMENT. The deferral contributions
and related Employer contributions described in Section 3.01(A) comprise a Code
Section 401(k) arrangement. An Employee who is eligible to participate in the
401(k) arrangement may file a salary reduction agreement with the Advisory
Committee. A salary reduction agreement must specify the amount of Compensation
or percentage of Compensation the Employee wishes to defer; for which purpose
"Compensation" shall be as defined in Section 1.10 but modified to exclude
income attributable to the grant or exercise of employee stock options, the
vesting of restricted property, and such similar items of extraordinary or
non-cash compensation as the Advisory Committee shall prescribe. Any reference
in this Section to "Compensation" is a reference to such definition of
"Compensation" as so modified.
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A salary reduction agreement executed by an eligible Employee shall be
effective with respect to Compensation received on or after the first day of the
calendar quarter specified by the Employee in such agreement provided that the
Advisory Committee receives the salary reduction agreement by the 15th day of
the month immediately preceding such calendar quarter and provided that the
agreement may not be effective earlier than the Employee's Plan Entry Date (or,
in the case of a reemployed Employee, his reparticipation date under Article
II). The salary reduction agreement will apply only to Compensation which is
currently available to the Employee after the effective date of the salary
reduction agreement.
If the salary reduction agreement specifies the reduction amount as a
percentage of Compensation, the percentage may not be less than one percent (1%)
of Compensation and shall specify a reduction percentage equal to an increment
of one percent (1%). If the salary reduction agreement specifies the reduction
amount as a dollar amount of Compensation, the dollar amount must equal an
increment of $5. An Employee's deferral contributions for the Plan Year may not
exceed seventy-five percent (75%) of his Compensation for the portion of the
Plan Year in which the Employee is actually a Participant. Further, each
individual deferral contribution of an Employee may not exceed seventy-five
percent (75%) of Compensation for the pay period for which such deferral
contribution is calculated, unless such Participant elects catch-up
contributions in accordance with Section 12.06. The Advisory Committee may from
time to time specify a maximum deferral percentage for Highly Compensated
Employees that is less than seventy-five percent (75%). Notwithstanding the
foregoing provisions, the maximum deferral percentage that may be elected by any
Participant with respect to Compensation paid prior to July 1, 2002 is ten
percent (10%) of Compensation, unless such Participant elects catch-up
contributions in accordance with Section 12.06. An Employee may modify his
salary reduction agreement, either to reduce or to increase the amount of
deferral contributions, effective with respect to Compensation received on or
after the first day of the next calendar quarter provided that the Advisory
Committee receives the new salary reduction agreement by the 15th day of the
month immediately preceding such calendar quarter. The Employee shall make this
modification by filing a new salary reduction agreement with the Advisory
Committee. An Employee may revoke a salary reduction agreement at any time and
such revocation shall be effective as soon as administratively feasible after
the Advisory Committee receives such revocation. An Employee who revokes his
salary reduction agreement may file a new salary reduction agreement effective
with respect to Compensation received on or after the first day of the next
calendar quarter, provided the Advisory Committee receives the new salary
reduction agreement by the 15th day of the month immediately preceding such
calendar quarter.
12.02 DEFINITIONS.
(a) "Highly Compensated Employee" means an Eligible
Employee who satisfies the definition in Section 1.07 of the Plan.
(b) "Nonhighly Compensated Employee" means an eligible
Employee who is not a Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP
test described in Section 12.04, an Employee who is eligible to make
elective deferrals for the Plan Year, irrespective of whether the
Employer actually makes deferral contributions on behalf of
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the Employee. For purposes of the ACP test described in Section 12.05,
an "Eligible Employee" means a Participant who is eligible to receive
an allocation of Employer matching contributions (or would be eligible
if he made the type of contributions necessary to receive an allocation
of matching contributions) and a Participant who is eligible to make
employee contributions, irrespective of whether he actually makes
employee contributions. An Employee continues to be an Eligible
Employee during a period the Plan suspends the Employee's right to make
elective deferrals or nondeductible contributions following a hardship
distribution.
(d) "Highly Compensated Group" means the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of
Eligible Employees who are Nonhighly Compensated Employees for the Plan
Year.
(f) "Compensation" means, for purposes of any
nondiscrimination test required under this Article XII, Compensation as
defined for nondiscrimination purposes in the last paragraph of Section
1.10 of the Plan. Compensation must include Compensation for the entire
Plan Year, irrespective of whether the Code Section 401(k) arrangement
was in effect for the entire Plan Year or whether the Employee begins,
resumes or ceases to be an Eligible Employee during the Plan Year.
(g) "Deferral contributions" means the sum of the deferral
contributions the Employer contributes to the Trust on behalf of an
Eligible Employee, pursuant to Section 3.01.
(h) "Elective deferrals" are the deferral contributions
the Employer contributes to the Trust at the election of an Eligible
Employee. If the Code Section 401(k) arrangement includes a cash or
deferred feature, any portion of a cash or deferred contribution
contributed to the Trust because of the Employee's failure to make a
cash election is an elective deferral, but any portion of a cash or
deferred contribution over which the Employee does not have a cash
election is not an elective deferral. Elective deferrals do not include
amounts which have become currently available to the Employee prior to
the election nor amounts designated as nondeductible employee
contributions at the time of deferral or contribution.
(i) "Matching contributions" are contributions made by the
Employer on account of elective deferrals under a Code Section 401(k)
arrangement or on account of employee contributions. Matching
contributions also include Participant forfeitures allocated on account
of such elective deferrals or employee contributions.
(j) "Nonelective contributions" are contributions made by
the Employer which are not subject to a deferral election by an
Employee and which are not matching contributions.
(k) "Qualified matching contributions" are matching
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m).
For purposes of this definition, matching contributions are
-46-
not 100% Nonforfeitable at all times if the Employee has a 100%
Nonforfeitable interest because of his Years of Service taken into
account under a vesting schedule.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m).
For purposes of this definition, nonelective contributions are not 100%
Nonforfeitable at all times if the Employee has a 100% Nonforfeitable
interest because of his Years of Service taken into account under a
vesting schedule. Any nonelective contributions allocated to a
Participant's Qualified Nonelective Contributions Account under the
Plan automatically satisfy the definition of qualified nonelective
contributions.
(m) "Distribution restrictions" means the Employee may not
receive a distribution of the specified contributions (nor earnings on
those contributions) except in the event of (1) the Participant's
death, disability, termination of employment, attainment of age 59 1/2,
(2) financial hardship satisfying the requirements of Code
Section 401(k) and the applicable Treasury regulations, or (3) plan
termination, without establishment of a successor defined contribution
plan (other than an ESOP). A distribution on account of financial
hardship, as described in clause (2), may not include earnings on
elective deferrals credited as of a date later than December 31, 1988,
and may not include qualified matching contributions and qualified
nonelective contributions, nor any earnings on such contributions,
irrespective of when credited. A distribution described in clause (3)
must be a lump sum distribution, as required under Code
Section 401(k)(10).
(n) "Employee contributions" are contributions made by a
Participant on an after-tax basis, whether voluntary or mandatory, and
designated, at the time of contribution, as an employee (or
nondeductible) contribution. Elective deferrals and deferral
contributions are not employee contributions. Participant nondeductible
contributions, made pursuant to Section 4.01 of the Plan, are employee
contributions.
12.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.
Annual Elective Deferral Limitation. Except to the extent permitted
under Section 12.06 and Code Section 414(v), if applicable, an Employee's
elective deferrals may not exceed the 402(g) limitation. The 402(g) limitation
is: (1) for calendar year 2002, $11,000; (2) for calendar year 2003, $12,000;
(3) for calendar year 2004, $13,000; (4) for calendar year 2005, $14,000; and
(5) for calendar year 2006 and thereafter, $15,000 or such increased amount as
determined by the Secretary of the Treasury in accordance with Code Section
402(g)(4). If the Employer determines the Employee's elective deferrals to the
Plan for a calendar year would exceed the 402(g) limitation for the calendar
year, the Employer will not make any additional elective deferrals with respect
to that Employee for the remainder of that calendar year, paying in cash to the
Employee any amounts which would result in the Employee's elective deferrals for
the calendar year exceeding the 402(g) limitation. If the Advisory Committee
determines an Employee's elective deferrals already contributed to the Plan for
a calendar year exceed the 402(g) limitation, the Advisory Committee will
distribute the amount in excess of the 402(g) limitation (the "excess
deferral"), as adjusted for allocable income, no later than April 15 of the
following calendar year. If the Advisory Committee distributes the excess
deferral by the
-47-
appropriate April 15, it may make the distribution irrespective of any other
provision under this Plan or under the Code. The Advisory Committee will reduce
the amount of excess deferrals for a calendar year distributable to the Employee
by the amount of excess contributions (as determined in Section 12.04), if any,
previously distributed to the Employee for the Plan Year beginning in that
calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction contributions
to a tax-sheltered annuity, irrespective of whether the Employer maintains the
other plan, he may provide the Advisory Committee a written claim for excess
deferrals made for a calendar year. The Employee must submit the claim no later
than the March 1 following the close of the particular calendar year and the
claim must specify the amount of the Employee's elective deferrals under this
Plan which are excess deferrals. If the Advisory Committee receives a timely
claim, it will distribute the excess deferral (as adjusted for allocable income)
the Employee has assigned to this Plan, in accordance with the distribution
procedure described in the immediately preceding paragraph.
Allocable income. For purposes of making a distribution of excess
deferrals pursuant to this Section 12.03, allocable income means net income or
net loss allocable to the excess deferrals for the calendar year in which the
Employee made the excess deferral and for the "gap period" measured from the
beginning of the next calendar year to the date of the distribution. If the
distribution of the excess deferral occurs during the calendar year in which the
Employee made the excess deferral, the Advisory Committee will treat as a "gap
period" the period from the first day of that calendar year to the date of the
distribution. The Advisory Committee will determine allocable income in the same
manner as described in Section 12.04 for excess contributions, except the
numerator of the allocation fraction will be the amount of the Employee's excess
deferrals and the denominator of the allocation fraction will be the Employee's
Accrued Benefit attributable to his elective deferrals.
12.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year,
the Advisory Committee must determine whether the Plan's Code Section401(k)
arrangement satisfies one of the following ADP tests:
(i) The average ADP for the Highly Compensated Group for
such Plan Year does not exceed 1.25 times the average ADP of the
Nonhighly Compensated Group for the preceding Plan Year; or
(ii) The average ADP for the Highly Compensated Group for
such Plan Year does not exceed the average ADP for the Nonhighly
Compensated Group for the preceding Plan Year by more than two
percentage points and the average ADP for the Highly Compensated Group
for such Plan Year is not more than twice the average ADP for the
Nonhighly Compensated Group for the preceding Plan Year.
If the Advisory Committee so elects, it may apply the limits set forth
in paragraphs (i) and (ii) of this Section by using the Average ADP of the
Nonhighly Compensated Group for the Plan Year for which the determination is
made rather than for the preceding Plan Year; provided that such election may
not be changed except as provided by the Secretary of the Treasury.
-48-
Calculation of ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. A Nonhighly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the Section 402(g)
limitation described in Section 12.03.
The Advisory Committee may determine (in a manner consistent with
Treasury regulations) the ADPs of the Eligible Employees by taking into account
qualified nonelective contributions or qualified matching contributions, or
both, made to this Plan or to any other qualified Plan maintained by the
Employer, if any such contributions are made. The Advisory Committee may not
include qualified nonelective contributions in the ADP test unless the
allocation of nonelective contributions is nondiscriminatory when the Advisory
Committee takes into account all nonelective contributions (including the
qualified nonelective contributions) and also when the Advisory Committee takes
into account only the nonelective contributions not used in either the ADP test
described in this Section 12.04 or the ACP test described in Section 12.05. The
Advisory Committee may not include in the ADP test any qualified nonelective
contributions or qualified matching contributions under another qualified plan
unless that plan has the same plan year as this Plan. The Advisory Committee
must maintain records to demonstrate compliance with the ADP test, including the
extent to which the Plan used qualified nonelective contributions or qualified
matching contributions to satisfy the test.
Special aggregation rule for Highly Compensated Employees. To determine
the ADP of any Highly Compensated Employee, the deferral contributions taken
into account must include any elective deferrals made by the Highly Compensated
Employee under any other Code Section 401(k) arrangement maintained by the
Employer, unless the elective deferrals are to an ESOP. If the plans containing
the Code Section 401(k) arrangements have different plan years, the Advisory
Committee will determine the combined deferral contributions on the basis of the
plan years ending in the same calendar year.
Aggregation of certain Code Section 401(k) arrangements. If the
Employer treats two plans as a unit for coverage or nondiscrimination purposes,
the Employer must combine the Code Section 401(k) arrangements under such plans
to determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. An aggregation of Code Section 401(k) arrangements under
this paragraph does not apply to plans which have different plan years and the
Advisory Committee may not aggregate an ESOP (or the ESOP portion of a plan)
with a non-ESOP plan (or non-ESOP portion of a plan).
Characterization of excess contributions. If, pursuant to this Section
12.04, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan
-49-
Year, the Advisory Committee will treat the remaining portion of his excess
contributions as attributable to qualified nonelective contributions. The
Advisory Committee will reduce the amount of excess contributions for a Plan
Year distributable to a Highly Compensated Employee by the amount of excess
deferrals (as defined in Section 12.03), if any, previously distributed to that
Employee for the Employee's taxable year ending in that Plan Year.
Distribution of excess contributions. If the Advisory Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, it must
distribute the excess contributions, as adjusted for allocable income, during
the next Plan Year. However, the Employer will incur an excise tax equal to 10%
of the amount of excess contributions for a Plan Year not distributed to the
appropriate Highly Compensated Employees during the first 2 1/2 months of that
next Plan Year. The excess contributions are the amount of deferral
contributions made by the Highly Compensated Employees which causes the Plan to
fail to satisfy the ADP test. The Advisory Committee will distribute to each
Highly Compensated Employee his respective share of the excess contributions.
The Advisory Committee will determine the respective shares of excess
contributions as follows:
Step 1: The Advisory Committee shall first determine the
dollar amount of the reductions which would have to be made to the
elective deferrals of each Highly Compensated Employee who is a
Participant for the Plan Year in order for the average ADP of the
Highly Compensated Group for the Plan Year to satisfy Section 401(k)(3)
of the Code. Such amount shall be calculated by first determining the
dollar amount by which the deferred contributions of Highly Compensated
Employees who have the highest ADPs would have to be reduced until the
first to occur of: (i) such Employees' ADPs would equal the ADPs of the
Highly Compensated Employee or group of Highly Compensated Employees
with the next highest ADPs; or (ii) the average ADP of the Highly
Compensated Group, as recalculated after the reductions made under this
Step 1, satisfies the requirements of Section 401(k)(3) of the Code and
this Section.
Then, unless the recalculated average ADP of the Highly
Compensated Group satisfies Section 401(k)(3) of the Code, the
reduction process shall be repeated by determining the amount of
reductions which would have to be made to the elective deferrals of the
Highly Compensated Employees who, after all prior reductions, would
have the highest ADP until the first to occur of: (iii) the ADP, after
all prior reductions under this Step 1, of each person in such group
would equal the ADP of the Highly Compensated Employee or group of
Highly Compensated Employees with the next highest ADP; or (iv) the
average ADP of the Highly Compensated Group, after the prior
reductions, satisfies the requirements of Code Section 401(k)(3) and
this Section. This process is repeated until the average ADP of the
Highly Compensated Group, after all reductions, satisfies the
requirements of Code Section 401(k)(3) and this Section.
Step 2: Determine the total dollar amount of reductions to the
elective deferrals calculated under Step 1 ("Total Excess Deferrals").
Step 3: Reduce the elective deferrals of the Highly
Compensated Employees with the highest dollar amount of elective
deferrals by the lesser of the dollar amount which either (i) causes
each such Highly Compensated Employee's elective deferrals to equal
-50-
the dollar amount of the elective deferrals of the Highly Compensated
Employee or group of Highly Compensated Employees with the next highest
dollar amount of elective deferrals; or (ii) reduces the Highly
Compensated Employees' elective deferrals by the Total Excess
Deferrals.
Then, unless the total amount of reductions made to Highly
Compensated Employees' elective deferrals under this Step 3 equals the
amount of the Total Excess Deferrals, the reduction process shall be
repeated by reducing the elective deferrals of the group of Highly
Compensated Employees with the highest dollar amount of elective
deferrals, after the prior reductions made in this Step 3, by the
lesser of the amount which either: (iii) causes such Highly Compensated
Employees' elective deferrals after prior reductions made in this Step
3 to equal the dollar amount of the elective deferrals of the Highly
Compensated Employees with the next highest dollar amount of elective
deferrals; or (iv) causes total reductions to equal the Total Excess
Deferrals. This process is repeated with each successive group of
Highly Compensated Employees with the highest dollar amount, after the
prior reductions, of elective deferrals until the total reductions made
under this Step 3 equal the Total Excess Deferrals.
A Participant's elective deferrals required to be reduced under this
Section shall be reduced in the following order: the Participant's unmatched
elective deferrals will be reduced first, and then, if necessary, matched
elective deferrals. Matching contributions made with respect to elective
deferrals so reduced (other than qualified matching contributions treated as
elective deferrals for purposes of this Section) shall be forfeited.
Allocable income. To determine the amount of the corrective
distribution required under this Section 12.04, the Advisory Committee must
calculate the allocable income for the Plan Year in which the excess
contributions arose and for the "gap period" measured from the beginning of the
next Plan Year to the date of the distribution. "Allocable income" means net
income or net loss. To calculate allocable income for the Plan Year, the
Advisory Committee: (1) first will determine the net income or net loss for the
Plan Year on the Highly Compensated Employee's Accrued Benefit attributable to
deferral contributions; and (2) then will multiply this net income or net loss
by the following fraction:
Amount of the Highly Compensated Employee's excess contributions
Accrued Benefit attributable to deferral contributions
The Accrued Benefit attributable to deferral contributions includes the Accrued
Benefit attributable to qualified matching contributions and qualified
nonelective contributions, if any are made, taken into account in the ADP test
for the Plan Year or for any prior Plan Year. For purposes of the denominator of
the fraction, the Advisory Committee will calculate the Accrued Benefit
attributable to deferral contributions as of the last day of the Plan Year
(without regard to the net income or net loss for the Plan Year on that Accrued
Benefit).
To calculate allocable income for the "gap period," the Advisory
Committee will perform the same calculation as described in the preceding
paragraph, except in clause (1) the Advisory Committee will determine, as of the
last day of the month preceding the date of distribution, the net income or net
loss for the "gap period" and in clause (2) will calculate the Accrued Benefit
attributable to deferral contributions as of the day before the distribution. If
the Plan does not
-51-
perform a valuation on the last day of the month preceding the date of
distribution, the Advisory Committee, in lieu of the calculation described in
this paragraph, will calculate allocable income for each month in the "gap
period" as equal to 10% of the allocable income for the Plan Year. Under this
alternate calculation, the Advisory Committee will disregard the month in which
the distribution occurs, if the Plan makes the distribution no later than the
15th day of that month.
12.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Advisory Committee must determine
whether the annual Employer matching contributions (other than qualified
matching contributions used in the ADP test), if any, and the Employee
contributions, if any, satisfy one of the following average contribution
percentage ("ACP") test:
(i) The ACP for the Highly Compensated Group for such Plan
Year does not exceed 1.25 times the ACP of the Nonhighly Compensated
Group for the prior Plan Year; or
(ii) The ACP for the High Compensated Group for such Plan
Year does not exceed the ACP for the Nonhighly Compensated Group for
the prior Plan Year by more than two percentage points and the ACP for
the Highly Compensated Group for such Plan Year is not more than twice
the ACP for the Nonhighly Compensated Group for the prior Plan Year.
If the Advisory Committee so elects, it may apply the limits set forth
in paragraphs (i) and (ii) of this Section by using the Average ACP of the
Nonhighly Compensated Group for the Plan Year for which the determination is
made rather than for the preceding Plan Year; provided that such election may
not be changed except as provided by the Secretary of the Treasury.
(A) Calculation of ACP. The average contribution percentage for a
group is the average of the separate contribution percentages calculated for
each Eligible Employee who is a member of that group. An Eligible Employee's
contribution percentage for a Plan Year is the ratio of the Eligible Employee's
aggregate contributions for the Plan Year to the Employee's Compensation for the
Plan Year. "Aggregate contributions" are matching contributions (other than
qualified matching contributions used in the ADP test) and employee
contributions.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other than
qualified nonelective contributions used in the ADP test under Section 12.04) or
elective deferrals, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include qualified
nonelective contributions in the ACP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory Committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in Section
12.04 or the ACP test described in Section 12.05 The Advisory Committee may not
include elective deferrals in the ACP test, unless the Plan which includes the
elective deferrals satisfies the ADP test both with and without the elective
deferrals included in this ACP test. For Plan Years beginning after December 31,
1989, the Advisory Committee may not include in the ACP test any qualified
nonelective contributions or elective deferrals under another qualified
-52-
plan unless that plan has the same plan year as this Plan. The Advisory
Committee must maintain records to demonstrate compliance with the ACP Test,
including the extent to which the Plan used qualified nonelective contributions
or elective deferrals to satisfy the test.
(B) Special aggregation rule for Highly Compensated Employees. To
determine the contribution percentage of any Highly Compensated Employee, the
aggregate contributions taken into account must include any matching
contributions (other than qualified matching contributions used in the ADP test)
and any employee contributions made on his behalf to any other plan maintained
by the Employer, unless the other plan is an ESOP. If the plans have
different plan years, the Advisory Committee will determine the combined
aggregate contributions on the basis of the plan years ending in the same
calendar year.
(C) Aggregation of certain plans. If the Employer treats two plans
a unit for coverage or nondiscrimination purposes, the Employer must combine the
plans to determine whether either plan satisfies the ACP test. This aggregation
rule applies to the contribution percentage determination for all Eligible
Employees, irrespective of whether an Eligible Employee is a Highly Compensated
Employee or a Nonhighly Compensated Employee. For Plan Years beginning after
December 31, 1989, an aggregation of plans under this paragraph does not apply
to plans which have different plan years and the Advisory Committee may not
aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or
non-ESOP portion of plan).
(D) Distribution of excess aggregate contributions. The Advisory
Committee will determine excess aggregate contributions after determining excess
deferrals under Section 12.03 and excess contributions under Section 12.04. If
the Advisory Committee determines the Plan fails to satisfy the ACP test for a
Plan Year, it must distribute the excess aggregate contributions, as adjusted
for allocable income, during the next Plan Year. However, the Employer will
incur an excise tax equal to 10% of the amount of excess aggregate contributions
for a Plan Year not distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess aggregate
contributions are the amount of aggregate contributions made by the Highly
Compensated Employees which causes the Plan to fail to satisfy the ACP test. The
Advisory Committee will distribute to each Highly Compensated Employee his
respective share of the excess aggregate contributions. The Advisory Committee
will determine the respective shares of excess aggregate contributions as
follows:
Step 1: The Advisory Committee shall first determine the
dollar amount of the reductions which would have to be made to the
aggregate contributions of each Highly Compensated Employee who is a
Participant for the Plan Year in order for the average ACP of the
Highly Compensated Group for the Plan Year to satisfy Section 401(m) of
the Code. Such amount shall be calculated by first determining the
dollar amount by which the aggregate contributions of Highly
Compensated Employees who have the highest ACPs would have to be
reduced until the first to occur of: (i) such Employees' ACPs would
equal the ACPs of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest ACPs; or (ii) the average
ACP of the Highly Compensated Group, as recalculated after the
reductions made under this Step 1, satisfies the requirements of
Section 401(m) of the Code and this Section.
-53-
Then, unless the recalculated average ACP of the Highly
Compensated Group satisfies Section 401(m) of the Code, the reduction
process shall be repeated by determining the amount of reductions which
would have to be made to the aggregate contributions of the Highly
Compensated Employees who, after all prior reductions, would have the
highest ACP until the first to occur of: (iii) the ACP, after all prior
reductions under this Step 1, of each person in such group would equal
the ACP of the Highly Compensated Employee or group of Highly
Compensated Employees with the next highest ACP; or (iv) the average
ACP of the Highly Compensated Group, after the prior reductions,
satisfies the requirements of Code Section 401(m) and this Section.
This process is repeated until the average ACP of the Highly
Compensated Group, after all reductions, satisfies the requirements of
Code Section 401(m) and this Section.
Step 2: Determine the total dollar amount of reductions to the
aggregate contributions calculated under Step 1 ("Total Excess
Contributions").
Step 3: Reduce the aggregate contributions of the Highly
Compensated Employees with the highest dollar amount of aggregate
contributions by the lesser of the dollar amount which either (i)
causes each such Highly Compensated Employee's aggregate contributions
to equal the dollar amount of the aggregate contributions of the Highly
Compensated Employee or group of Highly Compensated Employees with the
next highest dollar amount of aggregate contributions; or (ii) reduces
the Highly Compensated Employees' aggregate contributions by the Total
Excess Contributions.
Then, unless the total amount of reductions made to Highly
Compensated Employees' aggregate contributions under this Step 3 equals
the amount of the Total Excess Contributions, the reduction process
shall be repeated by reducing the aggregate contributions of the group
of Highly Compensated Employees with the highest dollar amount of
aggregate contributions, after the prior reductions made in this Step
3, by the lesser of the amount which either: (iii) causes such Highly
Compensated Employees' aggregate contributions after prior reductions
made in this Step 3 to equal the dollar amount of the aggregate
contributions of the Highly Compensated Employees with the next highest
dollar amount of aggregate contributions; or (iv) causes total
reductions to equal the Total Excess Deferrals. This process is
repeated with each successive group of Highly Compensated Employees
with the highest dollar amount, after the prior reductions, of
aggregate contributions until the total reductions made under this Step
3 equal the Total Excess Contributions.
(E) Allocable income. To determine the amount of the corrective
distribution required under this Section 12.05, the Advisory Committee must
calculate the allocable income for the Plan Year in which the excess aggregate
contributions arose. "Allocable income" means net income or net loss. The
Advisory Committee will determine allocable income in the same manner as
described in Senior 12.04(F) for excess contributions.
(F) Characterization of excess aggregate contributions. The
Advisory Committee will treat a Highly Compensated Employee's allocable share of
excess aggregate contributions in the following priority: (1) first as
attributable to his employee contributions which are voluntary contributions, it
any; (2) then as matching contributions allocable with respect to excess
-54-
contributions determined under the ADP test; (3) then on a pro rata basis to
matching contributions and to the deferral contributions relating to those
matching contributions which the Advisory Committee has included in the ACP
test; (4) then on a pro rata basis to employee contributions which are mandatory
contributions; and (5) last to qualified nonelective contributions used in the
ACP test. To the extent the Highly Compensated Employee's excess aggregate
contributions are attributable to matching contributions and he is not 100%
vested in his Accrued Benefit attributable to matching contributions, the
Advisory Committee will distribute only the vested portion and forfeit the
nonvested portion. The vested portion of the Highly Compensated Employee's
excess aggregate contributions attributable to Employer matching contributions
is the total amount of such excess aggregate contributions (as adjusted for
allocable income) multiplied by his vested percentage (determined as of the last
day of the Plan Year for which the Employer made the matching contribution). The
Plan will allocate forfeited excess aggregate contributions to reduce Employer
matching contributions for the Plan Year in which the forfeiture occurs.
12.06 CATCH-UP CONTRIBUTIONS. Effective as of January 1, 2002, all
Participants who are eligible to make deferral contributions under the Plan and
who have attained age 50 before the close of the Plan Year shall be eligible to
have a portion of such deferral contributions treated as catch-up contributions
in accordance with, and subject to the limitations of, Code Section 414(v). Such
catch-up contributions shall not be taken into account for purposes of Section
12.01 or 12.03, which implements the provisions of Code Section 402(g), nor for
purposes of Part 2 of Article III, which implements the provisions of Code
Section 415. The Plan shall not be treated as failing to satisfy the
requirements of Section 12.04 (implementing the requirements of Code Section
401(k)(3)), Section 3.04(B) (implementing the requirements of Code Section 416),
or Code Section 410(b)) by reason of the making of such catch-up contributions.
The catch-up contributions limit is: (1) for calendar year 2002,
$1,000; (2) for calendar year 2003, $2,000; (3) for calendar year 2004, $3,000;
(4) for calendar year 2005, $4,000; and (5) for calendar year 2006 and
thereafter, $5,000 or such increased amount as determined by the Secretary of
the Treasury to reflect changes in the cost of living index.
In no event shall the amount of a Participant's deferral contributions
(including catch-up contributions) under the Plan and under any other 401(k)
plans maintained by the Employer for the calendar year exceed the Participant's
Compensation for such calendar year. In addition, the maximum amount of deferral
contributions (including catch-up contributions) shall not exceed the total
amount of cash remuneration otherwise payable to such Participant, after giving
effect to all applicable deductions and withholdings, including, without
limitation, FICA and any other applicable tax withholding (determined after
giving effect to the Participant's deferral contribution election), garnishment
of wages and any applicable employee premiums or contributions for welfare
benefits.
ARTICLE XIII.
MISCELLANEOUS
13.01 EVIDENCE. Anyone required to give evidence under the terms of
the Plan may do so by certificate, affidavit, document or other information
which the person to act in reliance
-55-
may consider pertinent, reliable and genuine, and to have been signed, made or
presented by the proper party or parties. Both the Advisory Committee and the
Trustee are fully protected in acting and relying upon any evidence described
under the immediately preceding sentence.
13.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
the Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the Plan, or to
determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Advisory Committee need inquire into or be responsible for
any action or failure to act on the part of the others. Any action required of
Kansas City Southern must be by its Board of Directors, the Compensation and
Organization Committee of such Board, or the designees of such Board or
Committee. Any action required of any other corporate Employer must be by its
Board of Directors or its designees.
13.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee,
the Plan Administrator and the Employer in no way guarantee the Trust Fund from
loss or depreciation. The Employer does not guarantee the payment of any money
which may be or becomes due to any person from the Trust Fund. The liability of
the Advisory Committee and the Trustee to make any payment from the Trust Fund
at any time and all times is limited to the then available assets of the Trust.
13.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the notice.
13.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee and the Advisory
Committee and their successors.
13.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Plan dictates, the
plural includes the singular and the singular includes the plural.
13.07 STATE LAW. Missouri law will determine all questions arising
with respect to the provisions of this Plan except to the extent Federal law
supersedes Missouri law.
13.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or amendment
to the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
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ARTICLE XIV.
[RESERVED]
ARTICLE XV.
PARTICIPANT'S ACCOUNTS AND THEIR INVESTMENT
15.01 INDIVIDUAL ACCOUNTS. The Advisory Committee shall maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in the
name of each Participant to reflect the Participant's Accrued Benefit under the
Plan. Such Accounts shall include, but not be limited to, a Deferral
Contributions Account, a Qualified Nonelective Contributions Account, a Regular
Matching Contributions Account, a Qualified Matching Contributions Account, and
a Profit Sharing Contributions Account. Furthermore, if a Participant reenters
the Plan subsequent to his having a Forfeiture Break in Service, the Advisory
Committee, or the Trustee, shall maintain a separate Account for the
Participant's pre-Forfeiture Break in Service Accrued Benefit and a separate
Account for his post-Forfeiture Break in Service Accrued Benefit unless the
Participant's entire Accrued Benefit under the Plan is one hundred percent
(100%) Nonforfeitable. The Advisory Committee will make its allocations, or
request the Trustee to make its allocations, to the Accounts of the Participants
in accordance with the provisions of Section 15.05. The Advisory Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 15.05. The Advisory Committee shall maintain records
of its activities.
A Participant's Accrued Benefit shall be segregated for separate
investment when and as so expressly provided under the Plan. Except where the
Plan expressly provides for such segregation, Participants' Accrued Benefits
shall be invested collectively.
15.02 INVESTMENT OF ACCOUNTS. Each Participant's Accounts shall be
invested, in accordance with the individual election of the Participant, in one
or more investment vehicles designated by the Advisory Committee, including
designated pooled investment funds. Effective as of January 1, 2001, such
investment vehicles shall include an employer stock fund consisting of shares of
common stock of KCS. Up to 100% of a Participant's Accounts may be invested in
shares of common stock of KCS.
Each Participant whose Account includes shares of common stock of
Stilwell Financial Inc. ("Stilwell Shares") may elect, at such times, in such
manner and subject to such restrictions regarding minimum share dispositions or
holdings as the Advisory Committee shall prescribe, (1) to continue to hold in
such Account whole (but no fractional) Stilwell Shares, or (2) to have all or
any portion of such whole Stilwell Shares sold and the sale proceeds reinvested
in one or more investment vehicles designated by the Advisory Committee. Cash
dividends received by the Plan with respect to Stilwell Shares held in a
Participant's Account shall be reinvested in one or more investment vehicles, as
elected by the Participant.
15.03 PARTICIPANT ACCOUNTS - INVESTMENT PERCENTAGES. The Advisory
Committee from time to time shall establish procedures by which each Participant
may specify the percentage of his Accounts, and the percentage of future
contributions to be made on his behalf, to be invested in each of the available
investment vehicles for Accounts. The
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investment percentage for each investment vehicle selected by the Participant
must be a multiple of 1%. The Participant's investment direction shall remain in
effect unless and until the Participant replaces the direction in accordance
with the established procedures. Contributions and Accounts with respect to
which no affirmative Participant investment direction has been made shall be
invested in an investment vehicle selected by the Advisory Committee. The
Trustee shall be responsible for carrying out Participant investment direction.
15.04 VALUATION OF PARTICIPANTS' ACCRUED BENEFITS. The value of each
Participant's Accrued Benefit shall consist of the value of such Participant's
Account(s), including any segregated account hereunder. For purposes of a
distribution under the Plan, the value of a Participant's Accrued Benefit shall
be its value as of the valuation date immediately preceding the date of the
distribution.
15.05 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is the last day of each calendar month and each
interim valuation date designated by the Advisory Committee which is a business
day on which the New York Stock Exchange is open for business. As of each
valuation date the Advisory Committee must adjust Accounts to reflect net
income, gain or loss since the last valuation date. The valuation period is the
period beginning the day after the last valuation date and ending on the current
valuation date.
Trust Fund Accounts. The allocation provisions of this paragraph apply
to all Participant's Accounts other than segregated investment Accounts. The
Advisory Committee first will adjust the Participant Accounts, as those Accounts
stood at the beginning of the current valuation period, by reducing the Accounts
for any forfeitures arising under Section 5.09 or under Section 9.12, for
amounts charged during the valuation period to the Accounts in accordance with
Section 9.11 (relating to distributions) and for the amount of any Account which
the Trustee has fully distributed since the immediately preceding valuation
date. The Advisory Committee then, subject to the restoration allocation
requirements of Section 5.04 or of Section 9.12, will allocate the net income,
gain or loss for the current valuation period for each of the Plan's investment
vehicles (as specified by the Advisory Committee pursuant to Section 15.02) pro
rata to the Participants having accounts in each respective investment vehicle
as the accounts stood at the beginning of the valuation period. Separate
allocations and adjustments shall be made with respect to each investment
vehicle. For each investment vehicle the allocable net income, gain or loss is
the net income (or net loss), including the increase or decrease in the fair
market value of assets, since the last valuation date.
Segregated investment accounts. A segregated investment Account
receives all income it earns and bears all expenses or loss it incurs. As of the
valuation date, the Advisory Committee must reduce a segregated Account for any
forfeiture arising under Section 5.09 after the Advisory Committee has made all
other allocations, changes or adjustments to the Account for the Plan Year.
Additional rules. An Excess Amount or suspense account described in
Part 2 of Article III does not share in the allocation of net income, gain or
loss described in this Section 15.05. This Section 15.05 applies solely to the
allocation of net income, gain or loss of the Trust. The
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Advisory Committee will allocate the Employer contributions and Participant
forfeitures, if any, in accordance with Article III.
15.06 PARTICIPANT VOTING RIGHTS - EMPLOYER STOCK. Each Participant
(or the Beneficiary thereof) acting as a named fiduciary shall have the right to
direct the Trustee as to the manner in which (a) to vote any shares of stock of
KCS allocated to his Accounts as of the applicable record date of any
shareholder meeting in any matter put to a shareholder vote; and (b) to respond
to a tender offer, exchange offer or any other offer to purchase shares of KCS
stock allocated to the Participant's Accounts.
Before any meeting in which a shareholder vote is to be taken, the
Employer will deliver to the Trustee or its designee such quantities of proxy
soliciting materials as are necessary to solicit voting instructions from the
Participants. The Trustee or its designee will mail the proxy solicitation
materials (and any additional material made available to other shareholders or
otherwise deemed appropriate by the Trustee) to the Participants within a
reasonable time before the meeting. A reasonable deadline for the return of such
materials may be specified.
Shares will be voted as instructed by the Participants on each matter
brought before the meeting. Such participants are appointed as named fiduciaries
to direct the Trustee as to the voting of shares allocated to the accounts of
Participants who have not timely instructed the Trustee how to vote them and any
unallocated shares. Such shares will be voted in the same proportions as the
shares for which the Trustee has received timely instructions. The Trustee may
submit to the Employer one summary proxy for the aggregate number of shares.
With regard to any tender offer, exchange offer or any other offer to
purchase shares of KCS stock, the Trustee or its designee will solicit such
instructions from Participants by distributing to each Participant such
information as is distributed to shareholders of the Employer, generally in
connection with any such offer, and any additional information the trustee deems
appropriate in order for each Participant to give instructions. A reasonable
deadline for the return of such materials may be specified.
Shares will, in response to a tender offer, exchange offer or other
offer to purchase, be tendered, exchanged or sold as instructed by the
Participants. Fractional shares will be aggregated for purposes of tendering,
exchanging or selling shares, to the extent possible, to reflect the
instructions of the Participants. Such participants are appointed as named
fiduciaries to direct the Trustee as to the tender, exchange or sale of shares
allocated to an Account of a Participant who has not timely instructed the
Trustee how to respond to such offer and any unallocated shares. Such shares
will be tendered, exchanged or sold in the same proportion as shares for which
the Trustee has received timely instructions.
For purposes of receiving, tabulating and transmitting instructions,
the Trustee will establish a procedure to insure that instructions received from
individual Participants regarding voting or responding to a tender offer,
exchange offer, or any other offer are held in confidence, and are not divulged,
released or otherwise utilized in a manner that, in the Trustee's reasonable
judgment, might influence the Participant's free exercise of the rights set
forth in this Section 15.06.
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ARTICLE XVI.
PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL OF KCS
16.01 DEFINITIONS OF "CHANGE IN CONTROL OF KCS". For purposes of
this Plan, a "Change in Control of KCS" shall be deemed to have occurred if:
(a) for any reason at any time less than seventy-five
percent (75%) of the members of the Board of Directors of Kansas City
Southern, a Delaware corporation, shall be individuals who fall into
any of the following categories: (A) individuals who were members of
such Board on September 1, 1995; (B) individuals whose election, or
nomination for election by KCS's stockholders, was approved by a vote
of at least seventy-five percent (75%) of the members of the Board then
still in office who were members of such Board on September 1, 1995; or
(C) individuals whose election, or nomination for election, by KCS's
stockholders, was approved by a vote of at least seventy-five percent
(75%) of the members of the Board then still in office who were elected
in the manner described in (A) or (B) above, or
(b) any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act")) shall have become after September 1, 1995, according to a public
announcement or filing, without the prior approval of the Board of
Directors of KCS, the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of KCS
representing forty percent (40%) or more (calculated in accordance with
Rule 13d-3) of the combined voting power of KCS's, then outstanding
voting securities (such "person" hereinafter referred to as a "Major
Stockholder of KCS"); or
(c) the stockholders of KCS shall have approved a merger,
consolidation or dissolution of KCS or a sale, lease, exchange or
disposition of all or substantially all of KCS's assets, or a Major
Stockholder of KCS shall have proposed any such transaction, unless
such merger, consolidation, dissolution, sale, lease, exchange or
disposition shall have been approved by at least seventy-five percent
(75%) of the members of the Board of Directors of KCS who are
individuals falling into any combination of the following categories:
(i) individuals who were members of such Board of Directors on
September 1, 1995, (ii) individuals whose election, or nomination for
election by KCS's stockholders, was approved by at least seventy-five
percent (75%) of the members of the Board of Directors then still in
office who are members of the Board of Directors on September 1, 1995,
or (iii) individuals whose election or nomination for election by KCS's
stockholders was approved by a vote of at least seventy-five percent
(75%) of the members of the Board then still in office who were elected
in the manner described in (i) or (ii) above.
16.02 PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL. Upon a Change in
Control of KCS as defined in Section 16.01, notwithstanding what is otherwise
provided in this Plan, the following provisions will supersede the indicated
sections and otherwise govern the operation of the Plan from that point forward:
(a) "Section 5.03, Vesting Schedule" shall provide as
follows:
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5.03 VESTING SCHEDULE. A Participant's Accrued
Benefit derived from Employer contributions shall be one
hundred percent (100%) Nonforfeitable at all times.
(b) A new section numbered "8.10" and entitled
"Participant Direction of Investment" shall be added to provide as
follows:
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A
Participant shall have the right to direct the Trustee with
respect to the investment of reinvestment of the assets
comprising the Participant's individual Account only if the
Trustee consents in writing to permit such direction. If the
Trustee does consent to Participant direction of investment,
the Trustee and each Participant shall execute a letter
agreement as a part of this Plan containing such conditions,
limitations and other provisions they deem appropriate before
the Trustee shall follow any Participant direction as respects
the investment or reinvestment of any part of the
Participant's individual Account. The Trustee shall not be
liable for any loss, or by reason of any breach, resulting
from a Participant's direction of the investment of any part
of his individual Account.
(c) Except for the right to amend the Plan pursuant to
Section 11.02(a), the Employer shall not exercise its right to amend
pursuant to Section 11.02(b), discontinue or terminate pursuant to
Section 11.03, or transfer assets of or merge, pursuant to Section
11.05, the Plan without the prior written consent to such aforesaid
action by seventy-five percent (75%) of the Participants on a per
capita basis.
16.03 RIGHT TO AMEND ARTICLE XVI PRIOR TO CHANGE IN CONTROL OF KCS.
The Board of Directors of KCS, or any duly authorized committee thereof,
reserves the right to amend or eliminate this Article XVI prior to the date of a
Change in Control of KCS.
ARTICLE XVII.
PROVISIONS APPLICABLE TO ACCOUNTS
TRANSFERRED FROM FORMER MIDSOUTH PLAN
17.01 MIDSOUTH ACCOUNTS. The Advisory Committee shall maintain, in
order to reflect each Participant's Accrued Benefit under the Plan derived from
contributions to the MidSouth Rail Corporation Thrift and Savings Plan ("Former
MidSouth Plan"), a separate MidSouth Deferral Contributions Account, a separate
MidSouth Other Contributions Account and a separate MidSouth Participant
Contributions Account ("MidSouth Accounts") for each Participant ("MidSouth
Participant") in the Former MidSouth Plan who had an account under the Former
MidSouth Plan which was transferred to the Former Plan and thereafter
transferred to this Plan, except that a MidSouth Participant's Contribution
Account shall be maintained only for a MidSouth Participant who had such an
account under the Former MidSouth Plan. The MidSouth Deferral Contributions
Account shall reflect a Participant's Accrued Benefit derived from his deferral
contributions to the MidSouth Plan, the MidSouth Participant Contributions
Account shall reflect a Participant's Accrued Benefit derived from his
participant contributions to the Former MidSouth Plan, and the MidSouth Other
Contributions Account shall reflect a Participant's Accrued Benefit derived from
all other contributions to the Former MidSouth Plan
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on his behalf. The provisions of this Article XVII shall govern the separate
MidSouth Accounts, and with respect to such Accounts, the provisions of this
Article XVII shall supersede any other provisions in the Plan to the contrary.
Except as provided under this Article XVII, the Trustee shall hold, administer
and distribute the MidSouth Accounts in the same manner under the Plan as the
similar Account derived from contributions to this Plan.
The provisions of this Article XVII shall not apply to any Accounts
other than the MidSouth Accounts.
A MidSouth Participant's Accrued Benefit is, at all times, one hundred
percent (100%) Nonforfeitable to the extent the value of his Accrued Benefit is
derived from the transfer to the Trust of his Account(s) in the Former MidSouth
Plan.
17.02 MIDSOUTH PARTICIPANT CONTRIBUTION ACCOUNTS. The Advisory
Committee must maintain a separate MidSouth Participant Contributions Account
for each MidSouth Participant who had a Participant Contributions Account under
the Former MidSouth Plan to reflect the MidSouth Participant's Accrued Benefit
under the Plan derived from his participant contributions to the Former MidSouth
Plan. A MidSouth Participant's Accrued Benefit derived from his Participant
contributions as of any applicable date is the balance of his separate MidSouth
Participant Contribution Account(s).
A MidSouth Participant, by giving prior written notice to the Trustee,
may withdraw all or any part of his MidSouth Participant Contributions Account
described in this Section 17.02. A distribution of Participant contributions
must comply with the joint and survivor annuity requirements described in this
Article XVII, if those requirements apply to the MidSouth Participant. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn MidSouth Participant Contributions
Account in accordance with the provisions of this Article XVII applicable to the
distribution of the MidSouth Participant's Nonforfeitable Accrued Benefit
derived from his MidSouth Accounts.
17.03 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 17.06, and any
restrictions prescribed by Section 17.05, a MidSouth Participant or beneficiary
of a MidSouth Participant ("MidSouth Beneficiary") may elect distribution of his
MidSouth Accounts under one, or any combination, of the following methods:
(a) by payment in a lump sum;
(b) by payment in the form of a qualified joint and
survivor annuity, as defined in Section 17.06(A). If, as of the annuity
starting date, the MidSouth Participant is married, the MidSouth
Participant may elect to receive a smaller annuity benefit, having an
actuarial value equivalent to the actuarial value of the qualified
joint and survivor annuity, with continuation of payments to the
surviving spouse at a rate of seventy-five (75%) or one hundred percent
(100%) of the rate payable to the MidSouth Participant during his
lifetime.
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The distribution options permitted under this Section 17.03 are
available only if the present value of the MidSouth Participant's entire
Nonrollover Nonforfeitable Accrued Benefit under the Plan, at the time of the
distribution to the MidSouth Participant, exceeds $5,000.
The provisions of Section 6.02(A) shall apply in determining the
minimum distribution requirements under Code Section 401(a)(9) for MidSouth
Participants, and the provisions of Section 6.02(B) shall apply in determining
the minimum distribution requirements under Code Section 401(a)(9) for MidSouth
Beneficiaries.
17.04 TIME OF PAYMENT AND ACCRUED BENEFIT. Unless, pursuant to
Section 6.03 or 17.05, the MidSouth Participant or the MidSouth Beneficiary
elects in writing a different time or method of payment, the Advisory Committee
will direct the Trustee to commence distribution of a MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts in accordance
with this Section 17.04. A MidSouth Participant must consent, in writing, to any
distribution required under this Section 17.04 if the present value of the
MidSouth Participant's Nonrollover Nonforfeitable Accrued Benefit, at the time
of the distribution to the MidSouth Participant, exceeds $5,000 and the MidSouth
Participant has not attained the later of Normal Retirement Age or age 62.
Furthermore, the MidSouth Participant's spouse also must consent, in writing, to
any distribution for which Section 17.06 requires the spouse's consent. For all
purposes of Article VI and this Article XVII, the term "annuity starting date"
means the first day of the first period for which the Plan pays an amount as an
annuity or in any other form. For purposes of the consent requirements under
this Article XVII, if the present value of the MidSouth Participant's
Nonrollover Nonforfeitable Accrued Benefit derived from his MidSouth Accounts,
at the time of any distribution, exceeds $5,000 the Advisory Committee must
treat that present value as exceeding $5,000 for purposes of all subsequent Plan
distributions to the MidSouth Participant.
(A) Separation from Service for a Reason Other Than Death.
(1) MidSouth Participant's Nonrollover Nonforfeitable
Accrued Benefit Not Exceeding $5,000. If the MidSouth Participant's
Separation from Service is for any reason other than death, the
Advisory Committee will direct the Trustee to distribute the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts in a lump sum as soon as administratively practicable
following the MidSouth Participant's Separation from Service, but in no
event later than the 60th day following the close of the Plan Year in
which the MidSouth Participant attains Normal Retirement Age. If the
MidSouth Participant has attained Normal Retirement Age when he
separates from Service, the distribution under this paragraph will
occur no later than the 60th day following the close of the Plan Year
in which the MidSouth Participant's Separation from Service occurs.
(2) MidSouth Participant's Nonrollover Nonforfeitable
Accrued Benefit Exceeds $5,000. If the MidSouth Participant's
Separation from Service is for any reason other than death, the
Advisory Committee will direct the Trustee to distribute the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts in a form and at the time elected by the MidSouth Participant,
pursuant to Section 17.05. In the absence of an election by the
MidSouth Participant, the Advisory
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Committee will direct the Trustee to distribute the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts in a lump sum (or, if applicable, the normal annuity form of
distribution required under Section 17.06), on the 60th day following
the close of the Plan Year in which the latest of the following events
occurs: (a) the MidSouth Participant attains Normal Retirement Age; (b)
the MidSouth Participant attains age 62; or (c) the MidSouth
Participant's Separation from Service.
(B) Required Beginning Date. The provisions of Section 6.01(B)
shall determine a MidSouth Participant's Required Beginning Date.
(C) Death of the MidSouth Participant. The Advisory Committee will
direct the Trustee, in accordance with this Section 17.04(C), to distribute to
the MidSouth Participant's Beneficiary the MidSouth Participant's Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts remaining in the Trust at the
time of the MidSouth Participant's death. Subject to the requirements of Section
17.06, the Advisory Committee will determine the death benefit by reducing the
MidSouth Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts by any security interest the Plan has against that Nonforfeitable
Accrued Benefit derived from his MidSouth Accounts by reason of an outstanding
MidSouth Participant loan.
(1) Deceased MidSouth Participant's Nonrollover
Nonforfeitable Accrued Benefit Does Not Exceed $5,000. The Advisory
Committee, subject to the requirements of Section 17.06, must direct
the Trustee to distribute the deceased MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts in a
single cash sum, as soon as administratively practicable following the
MidSouth Participant's death or, if later, the date on which the
Advisory Committee receives notification of or otherwise confirms the
MidSouth Participant's death.
(2) Deceased MidSouth Participant's Nonrollover
Nonforfeitable Accrued Benefit Exceeds $5,000. The Advisory Committee
will direct the Trustee to distribute the deceased MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts at the time and in the form elected by the MidSouth
Participant or, if applicable, by the MidSouth Beneficiary, as
permitted under this Article XVII. In the absence of an election,
subject to the requirements of Section 17.06, the Advisory Committee
will direct the Trustee to distribute the MidSouth Participant's
undistributed Nonforfeitable Accrued Benefit derived from his MidSouth
Accounts in a lump sum as soon as administratively practicable
following the MidSouth Participant's death or, if later, the date on
which the Advisory Committee receives notification of or otherwise
confirms the MidSouth Participant's death.
If the death benefit is payable in full to the MidSouth
Participant's surviving spouse, the surviving spouse, in addition to
the distribution options provided in this Section 17.04(C), may elect
distribution at any time or in any form (other than the joint and
survivor annuity) this Article XVII would permit for a MidSouth
Participant.
(D) Rollovers. The provisions of Section 6.08 shall apply to the
MidSouth Accounts.
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17.05 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days before nor
later than 30 days before the MidSouth Participant's annuity starting date, the
Plan Administrator must provide a benefit notice to a MidSouth Participant who
is eligible to make an election under this Section 17.05. The benefit notice
must explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the MidSouth Participant's
right to defer distribution until he attains the later of Normal Retirement Age
or age 62.
Such distribution may commence less than 30 days after the benefit
notice is given, provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, of applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
If a MidSouth Participant or MidSouth Beneficiary makes an election
prescribed by this Section 17.05, the Advisory Committee will direct the Trustee
to distribute the MidSouth Participant's Nonforfeitable Accrued Benefit derived
from his MidSouth Accounts in accordance with that election. Any election under
this Section is subject to the requirements of Section 17.06. The MidSouth
Participant or MidSouth Beneficiary must make an election under this Section
17.05 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a MidSouth Participant's Accrued
Benefit derived from his MidSouth Accounts in accordance with the requirements
of Articles VI and XVII.
(A) MidSouth Participant Elections After Separation from Service.
If the present value of a MidSouth Participant's Nonrollover
Nonforfeitable Accrued Benefit exceeds $5,000, he may elect to have the Trustee
commence distribution as soon as administratively practicable following the
MidSouth Participant's Separation from Service. The MidSouth Participant may
reconsider an election at any time prior to the annuity starting date and elect
to commence distribution as of any other distribution date, but not earlier than
the date described in the first sentence of this Paragraph (A). Following his
attainment of Normal Retirement Age, a MidSouth Participant who has separated
from Service may elect distribution as of any distribution date, irrespective of
the restrictions otherwise applicable under this Section 17.05(A). If the
MidSouth Participant is partially vested in his Accrued Benefit, an election
under this Paragraph (A) to distribute prior to the MidSouth Participant's
incurring a Forfeiture Break in Service (as defined in Section 5.08) must be in
the form of a cash-out distribution (as defined in Article V). A MidSouth
Participant may not receive a cash-out distribution if, prior to the time the
Trustee actually makes the cash-out distribution, the MidSouth Participant
returns to employment with the Employer.
(B) MidSouth Participant Elections Prior to Separation from
Service.
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In addition to the distribution options provided in Section 6.03, a
MidSouth Participant, until he retires, has a continuing election to receive all
or any portion of his MidSouth Deferral Contributions Account and his MidSouth
Other Contributions Accounts if: (a) he has attained age 59 1/2 and (b) he is
100% vested in the Account. The procedures set forth in Section 6.03(B) shall
apply.
(C) Death Benefit Elections.
If the present value of the deceased MidSouth Participant's Nonrollover
Nonforfeitable Accrued Benefit exceeds $5,000, the MidSouth Participant's
Beneficiary may elect to have the Trustee distribute the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts in a form and
within a period permitted under Section 17.04. The MidSouth Beneficiary's
election is subject to any restrictions designated in writing by the MidSouth
Participant and not revoked as of his date of death.
(D) Transitional Elections.
Notwithstanding the provisions of Sections 17.03 and 17.04, if the
MidSouth Participant (or MidSouth Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute the
MidSouth Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject, however, to the survivor requirements, if applicable, of
Sections 17.06, 17.07 and 17.08. This Section 17.05(D) does not apply to a
pre-1984 distribution designation, and the Advisory Committee will not comply
with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code Section 401(a)(9) as in
effect on December 31, 1983; (2) the MidSouth Participant did not have an
Accrued Benefit as of December 31, 1983; (3) the distribution designation does
not specify the timing and form of the distribution and the death Beneficiaries
(in order of priority); (4) the substitution of a MidSouth Beneficiary modifies
the payment period of the distribution; or (5) the MidSouth Participant (or
MidSouth Beneficiary) modifies or revokes the distribution designation. In the
event of a revocation, the Plan must distribute, no later than December 31 of
the calendar year following the year of revocation, the amount which the
MidSouth Participant would have received under Section 17.04(A) if the
distribution designation had not been in effect or, if the MidSouth Beneficiary
revokes the distribution designation, the amount which the MidSouth Beneficiary
would have received under Section 17.04(C) if the distribution designation had
not been in effect. The Advisory Committee will apply this Section 17.05(D) to
rollovers and transfers in accordance with Part J of the Code Section 401(a)(9)
Treasury regulations.
17.06 ANNUITY DISTRIBUTIONS TO MIDSOUTH PARTICIPANTS AND SURVIVING
SPOUSES.
(A) Joint and Survivor Annuity. The Advisory Committee must direct
the Trustee to distribute a MidSouth Participant's Nonforfeitable Accrued
Benefit derived from his MidSouth Accounts in the form of a qualified joint and
survivor annuity, unless the MidSouth Participant makes a valid waiver election
(described in Section 17.07) within the 90-day period ending on the annuity
starting date. If, as of the annuity starting date, the MidSouth Participant is
married, a qualified joint and survivor annuity is an immediate annuity which is
purchasable with the MidSouth Participant's Nonforfeitable Accrued Benefit
derived from his MidSouth Account and which provides a life annuity for the
MidSouth Participant and a survivor annuity
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payable for the remaining life of the MidSouth Participant's surviving spouse
equal to 50% of the amount of the annuity payable during the life of the
MidSouth Participant. If, as of the annuity starting date, the MidSouth
Participant is not married, a qualified joint and survivor annuity is an
immediate life annuity for the MidSouth Participant which is purchasable with
the MidSouth Participant's Nonforfeitable Accrued Benefit derived from his
MidSouth Accounts. On or before the annuity starting date, the Advisory
Committee, without MidSouth Participant or spousal consent, must direct the
Trustee to pay the MidSouth Participant's Nonforfeitable Accrued Benefit derived
from his MidSouth Accounts, in a lump sum, in lieu of a qualified joint and
survivor annuity in accordance with Section 17.04, if the MidSouth Participant's
Nonrollover Nonforfeitable Accrued Benefit is not greater than $5,000.
(B) Preretirement Survivor Annuity. If a married MidSouth
Participant dies prior to his annuity starting date the Advisory Committee will
direct the Trustee to distribute a portion of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts to the
MidSouth Participant's surviving spouse in the form of a preretirement survivor
annuity, unless the MidSouth Participant has a valid waiver election (as
described in Section 17.08) in effect, or unless the MidSouth Participant and
his spouse were not married throughout the one year period ending on the date of
his death. A preretirement survivor annuity is an annuity which is purchasable
with 50% of the MidSouth Participant's Nonforfeitable Accrued Benefit derived
from his MidSouth Accounts (determined as of the date of the MidSouth
Participant's death) and which is payable for the life of the MidSouth
Participant's surviving spouse. The value of the preretirement survivor annuity
is attributable to Employer contributions and to Employee contributions in the
same proportion as the MidSouth Participant's Nonforfeitable Accrued Benefit
derived from his MidSouth Accounts is attributable to those contributions. The
portion of the MidSouth Participant's Nonforfeitable Accrued Benefit derived
from his MidSouth Accounts not payable under this paragraph is payable to the
MidSouth Participant's Beneficiary, in accordance with the other provisions of
this Article XVII. If the present value of the preretirement survivor annuity
does not exceed $5,000, the Advisory Committee, on or before the annuity
starting date, must direct the Trustee to make a lump sum distribution to the
MidSouth Participant's surviving spouse, in lieu of a preretirement survivor
annuity.
(C) Surviving Spouse Elections. If the present value of the
preretirement survivor annuity exceeds $5,000, the MidSouth Participant's
surviving spouse may elect to have the Trustee commence payment of the
preretirement survivor annuity at any time following the date of the MidSouth
Participant's death, but not later than the mandatory distribution periods
described in Section 17.04, and may elect any form of payment described in
Section 17.03, in lieu of the preretirement survivor annuity. In the absence of
an election by the surviving spouse, the Advisory Committee must direct the
Trustee to distribute the preretirement survivor annuity on the first
distribution date following the close of the Plan Year in which the latest of
the following events occurs: (i) the MidSouth Participant's death; (ii) the date
the Advisory Committee receives notification of or otherwise confirms the
MidSouth Participant's death, (iii) the date the MidSouth Participant would have
attained Normal Retirement Age; or (iv) the date the MidSouth Participant would
have attained age 62.
(D) Special Rules. If the MidSouth Participant has in effect a
valid waiver election regarding the qualified joint and survivor annuity or the
preretirement survivor annuity, the
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Advisory Committee must direct the Trustee to distribute the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth Accounts
in accordance with Sections 17.03, 17.04 and 17.05. The Advisory Committee will
reduce the MidSouth Participant's Nonforfeitable Accrued Benefit derived from
his MidSouth Accounts by any security interest (pursuant to any offset rights
authorized by Section 17.10) held by the Plan by reason of a MidSouth
Participant loan to determine the value of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts distributable
in the form of a qualified joint and survivor annuity or preretirement survivor
annuity, provided any post-August 18, 1985, loan satisfied the spousal consent
requirement described in Section 17.10 of the Plan. For purposes of applying
this Article XVII, the Advisory Committee treats a former spouse as the MidSouth
Participant's spouse or the surviving spouse to the extent provided under a
qualified domestic relations order described in Section 6.07. The provisions of
this Article XVII apply separately to the portion of the MidSouth Participant's
Nonforfeitable Accrued Benefit derived from his MidSouth Accounts subject to the
qualified domestic relations order and to the portion of the MidSouth
Participant's Nonforfeitable Accrued Benefit derived from his MidSouth Accounts
not subject to that order.
(E) Limited Application of Section. The preceding provisions of
this Section 17.06 apply only to (1) a MidSouth Participant as respects whom the
Plan is a direct or indirect transferee from a plan subject to the Code
Section 417 requirements and the Plan received the transfer after December 31,
1984, unless the transfer is an elective transfer described in Section 11.05;
(2) a MidSouth Participant who is eligible to and who elects a life annuity
distribution; and (3) a MidSouth Participant whose benefits under a defined
benefit plan are offset by benefits provided under this Plan. Sections 17.07 and
17.08 only apply to MidSouth Participants to whom the preceding provisions of
this Section 17.06 apply.
17.07 WAIVER ELECTION-QUALIFIED JOINT AND SURVIVOR ANNUITY. Within
90 days, but not later than 30 days, before the MidSouth Participant's annuity
starting date, the Advisory Committee must provide the MidSouth Participant a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the MidSouth Participant's right to make, and the effect of,
an election to waive the joint and survivor form of benefit, the rights of the
MidSouth Participant's spouse regarding the waiver election, and the MidSouth
Participant's right to make, and the effect of, a revocation of a waiver
election. The Plan does not limit the number of times the MidSouth Participant
may revoke a waiver of the qualified joint and survivor annuity or make a new
waiver during the election period.
A married MidSouth Participant's waiver election is not valid unless
(a) the MidSouth Participant's spouse (to whom the survivor annuity is payable
under the qualified joint and survivor annuity), after the MidSouth Participant
has received the written explanation described in this Section 17.07, has
consented in writing to the waiver election, the spouse's consent acknowledges
the effect of the election, and a notary public or the Plan Administrator (or
his representative) witnesses the spouse's consent, (b) the spouse consents to
the alternate form of payment designated by the MidSouth Participant or to any
change in that designated form of payment, and (c) unless the spouse is the
MidSouth Participant's sole primary MidSouth Beneficiary, the spouse consents to
the MidSouth Participant's Beneficiary designation or to any change in the
MidSouth Participant's Beneficiary designation. The spouse's consent to a waiver
of the qualified joint and survivor annuity is irrevocable, unless the MidSouth
Participant
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revokes the waiver election. The spouse may execute a blanket consent to any
form of payment designation or to any Beneficiary designation made by the
MidSouth Participant, if the spouse acknowledges the right to limit that consent
to a specific designation but, in writing, waives that right. The consent
requirements of this Section 17.07 apply to a former spouse of a MidSouth
Participant, to the extent required under a qualified domestic relations order
described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Advisory Committee
establishes the MidSouth Participant does not have a spouse, the Advisory
Committee is not able to locate the MidSouth Participant's spouse, the MidSouth
Participant is legally separated or has been abandoned (within the meaning of
State law) and the MidSouth Participant has a court order to that effect, or
other circumstances exist under which the Secretary of the Treasury will excuse
the consent requirement. If the MidSouth Participant's spouse is legally
incompetent to give consent, the spouse's legal guardian (even if the guardian
is the MidSouth Participant) may give consent.
17.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married MidSouth Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the MidSouth Participant attains age 32 and ending on the last day of the Plan
Year in which the MidSouth Participant attains age 34; (2) a reasonable period
after an Employee becomes a MidSouth Participant; (3) a reasonable period after
the joint and survivor rules become applicable to the MidSouth Participant; or
(4) a reasonable time after a fully subsidized preretirement survivor annuity no
longer satisfies the requirements of a fully subsidized benefit. A reasonable
period described in clauses (2), (3) and (4) is the period beginning one year
before and ending one year after the applicable event. If the MidSouth
Participant separates from Service before attaining age 35, clauses (1), (2),
(3) and (4) do not apply and the Advisory Committee must provide the written
explanation within the period beginning one year before and ending one year
after the Separation from Service. The written explanation must describe, in a
manner consistent with Treasury Regulations, the terms and conditions of the
preretirement survivor annuity comparable to the explanation of the qualified
joint and survivor annuity required under Section 17.06. The Plan does not limit
the number of times the MidSouth Participant may revoke a waiver of the
preretirement survivor annuity or make a new waiver during the election period.
A MidSouth Participant's waiver election of the preretirement survivor
annuity is not valid unless (a) the MidSouth Participant makes the waiver
election no later than the first day of the Plan Year in which he attains age 35
and (b) the MidSouth Participant's spouse (to whom the preretirement survivor
annuity is payable) satisfies the consent requirements described in Section
17.06, except the spouse need not consent to the form of benefit payable to the
designated MidSouth Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the MidSouth Participant
revokes the waiver election. Irrespective of the time of election requirement
described in clause (a), if the MidSouth Participant separates from Service
prior to the first day of the Plan Year in which he attains age 35, the Advisory
Committee will accept a waiver election as respects the MidSouth Participant's
Accrued Benefit attributable to his Service prior to this Separation from
Service. Furthermore, if a MidSouth Participant who has separated from Service
makes a valid waiver election, except for the timing
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requirement of clause (a), the Plan Administrator will accept that election as
valid, but only until the first day of the Plan Year in which the MidSouth
Participant attains age 35. A waiver election described in this paragraph is not
valid unless made after the MidSouth Participant has received the written
explanation described in this Section 17.08.
17.09 COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and
survivor requirements of Article XVII apply to the MidSouth Participant, neither
Section 8.01 nor this Section 17.09 impose any special spousal consent
requirements on the MidSouth Participant's Beneficiary designation. However, in
the absence of spousal consent (as required by Articles VI and XVII) to the
MidSouth Participant's Beneficiary designation: (1) any waiver of the joint and
survivor annuity or of the preretirement survivor annuity is not valid; and (2)
if the MidSouth Participant dies prior to his annuity starting date, the
MidSouth Participant's Beneficiary designation will apply only to the portion of
the death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the MidSouth Participant's surviving spouse in a
primary Beneficiary under the MidSouth Participant's Beneficiary designation,
the Trustee will satisfy the spouse's interest in the MidSouth Participant's
death benefit first from the portion which is payable as a preretirement
survivor annuity.
17.10 PARTICIPANT LOANS. Effective for Plan Years beginning after
December 31, 1993, the Trustee shall not make any new loans to MidSouth
Participants or MidSouth Beneficiaries.
17.10 VESTING SCHEDULE FOR REPAID AMOUNTS. If a former MidSouth
Participant in the Former MidSouth Plan received a cash-out distribution when he
was less than 100% vested and repays his distribution pursuant to Section 5.04
of the Former MidSouth Plan, his Accrued Benefit shall be, at all times, one
hundred percent (100%) Nonforfeitable to the extent the value of his Accrued
Benefit is derived from his MidSouth Accounts.
ARTICLE XVIII.
PROVISIONS APPLICABLE TO ACCOUNTS
TRANSFERRED FROM FORMER GATEWAY PLAN
18.01 GATEWAY ACCOUNTS. The Advisory Committee shall maintain, in
order to reflect each Participant's Accrued Benefit under the Plan derived from
contributions to the Gateway Western 401(k) Plan ("Former Gateway Plan"), a
separate Gateway Deferral Contributions Account, a separate Gateway Rollover
Contributions Account, a separate Gateway Voluntary Contributions Account, and a
separate Gateway Matching Contributions Account ("Gateway Accounts") for each
Participant in the Former Gateway Plan ("Gateway Participant") who had an
account under the Former Gateway Plan, except that a Gateway Rollover
Contributions Account shall be maintained only for a Gateway Participant who had
such an account under the Former Gateway Plan, and a Gateway Voluntary
Contributions Account shall be maintained only for a Gateway Participant who had
such an account under the Former Gateway Plan. The Gateway Deferral
Contributions Account shall reflect a Participant's Accrued Benefit derived from
his deferral contributions to the Former Gateway Plan, the Gateway Rollover
Contributions Account shall reflect a Participant's Accrued Benefit derived
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from his rollover contributions to the Former Gateway Plan, the Gateway
Voluntary Contributions Account shall reflect a Participant's Accrued Benefit
derived from his voluntary after-tax contributions to the Former Gateway Plan
and the Gateway Matching Contributions Account shall reflect a Participant's
Accrued Benefit derived from all matching contributions to the Former Gateway
Plan on his behalf. The provisions of this Article XVIII shall govern the
separate Gateway Accounts, and with respect to such Accounts, the provisions of
this Article XVIII shall supersede any other provisions in the Plan to the
contrary. Except as provided under this Article XVIII, the Trustee shall hold,
administer and distribute the Gateway Accounts in the same manner under the Plan
as the similar Account derived from contributions to this Plan.
The provisions of this Article XVIII shall not apply to any Accounts
other than the Gateway Accounts.
A Gateway Participant's early retirement age under the Plan shall be
55.
18.02 SPECIAL WITHDRAWAL RIGHTS. A Gateway Participant, by giving
prior written notice to the Trustee, may withdraw all or any part of his Gateway
Voluntary Contributions Account described in this Section 18.02 at any time,
provided, however, that a Gateway Participant may make no more than two such
withdrawals in any 12-month period. A distribution of voluntary contributions
must comply with the joint and survivor annuity requirements described in this
Article XVIII, if those requirements apply to the Gateway Participant. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn Gateway Voluntary Contributions Account
in accordance with the provisions of this Article XVIII applicable to the
distribution of the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts.
18.03 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 18.06, and any
restrictions prescribed by Section 18.05, a Gateway Participant or the
beneficiary of a Gateway Participant ("Gateway Beneficiary") may elect
distribution of his Gateway Accounts under one, or any combination, of the
following methods:
(a) by payment in a lump sum;
(b) by payment in the form of a single life annuity;
(c) by payment in the form of a single life annuity with
certain periods of five, ten, or fifteen years;
(d) by payment in the form of a single life annuity with
installment refund;
(e) by payment in the form of a qualified joint and
survivor annuity, as defined in Section 18.06(A). As of the annuity
starting date, the Gateway Participant may elect to receive a smaller
annuity benefit, having an actuarial value equivalent to the actuarial
value of the qualified joint and survivor annuity, with continuation of
payments to the beneficiary at a rate of 100% of the rate payable to
the Gateway Participant during his lifetime;
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(f) fixed period annuities for any period of whole months
which is not less than 60 and does not exceed the life expectancy of
the Gateway Participant and named beneficiary where the life expectancy
is not recalculated;
(g) a series of installments chosen by the Participant.
The Participant may choose at any time to have the balance of his
account paid in a different form permitted under this Section 18.03.
If the Gateway Participant's Accrued Benefit is distributed in the form
of an annuity purchased from an insurance company, distributions thereunder
shall be made in accordance with the requirements of Code Section 401 (a)(9) and
the regulations thereunder. Any annuity contract distributed shall be
nontransferable.
A series of installment payments shall not be available as a death
benefit if the Gateway Beneficiary is riot the spouse of the deceased Gateway
Participant.
The distribution options permitted under this Section 18.03 are
available only if the present value of the Gateway Participant's entire
Nonrollover Nonforfeitable Accrued Benefit under the Plan, at the time of the
distribution to the Gateway Participant, exceeds $5,000.
The provisions of Section 6.02(A) shall apply in determining the
minimum distribution requirements under Code Section 401(a)(9) for Gateway
Participants, and the provisions of Section 6.02(B) shall apply in determining
the minimum distribution requirements under Code Section 401 (a)(9) for Gateway
Beneficiaries.
18.04 TIME OF PAYMENT AND ACCRUED BENEFIT. Unless, pursuant to
Section 18.05, the Gateway Participant or the Gateway Beneficiary elects in
writing a different time or method of payment, the Advisory Committee will
direct the Trustee to commence distribution of a Gateway Participant's
Nonforfeitable Accrued Benefit derived from his Gateway Accounts in accordance
with this Section 18.04. A Gateway Participant must consent, in writing, to any
distribution required under this Section 18.04 if the present value of the
Gateway Participants Nonforfeitable Accrued Benefit, at the time of the
distribution to the Gateway Participant, exceeds $5,000 and the Gateway
Participant has not attained the later of Normal Retirement Age or age 62.
Furthermore, the Gateway Participant's spouse also must consent, in writing, to
any distribution for which Section 18.06 requires the spouse's consent. For all
purposes of Article VI and this Article XVIII, the term "annuity starting date"
means the first day of the first period for which the Plan pays an amount as an
annuity or in any other form. For purposes of the consent requirements under
this Article XVIII, if the present value of the Gateway Participant's
Nonrollover Nonforfeitable Accrued Benefit derived from his Gateway Accounts, at
the time of any distribution, exceeds $5,000, the Advisory Committee must treat
that present value as exceeding $5,000 for purposes of all subsequent Plan
distributions to the Gateway Participant.
(A) Separation from Service for a Reason Other Than Death.
(1) Gateway Participant's Nonrollover Nonforfeitable
Accrued Benefit Not Exceeding $5,000. If the Gateway Participant's
Separation from Service is for any reason other than death, the
Advisory Committee will direct the Trustee to distribute the
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Gateway Participant's Nonforfeitable Accrued Benefit derived from his
Gateway Accounts in a lump sum as soon as administratively practicable
following the Gateway Participant's Separation from Service, but in no
event later than the 60th day following the close of the Plan Year in
which the Gateway Participant attains Normal Retirement Age. If the
Gateway Participant has attained Normal Retirement Age when he
separates from Service, the distribution under this paragraph will
occur no later than the 60th day following the close of the Plan Year
in which the Gateway Participant's Separation from Service occurs.
(2) Gateway Participant's Nonrollover Nonforfeitable
Accrued Benefit Exceeds $5,000. If the Gateway Participant's Separation
from Service is for any reason other than death, the Advisory Committee
will direct the Trustee to distribute the Gateway Participant's
Nonforfeitable Accrued Benefit derived from his Gateway Accounts in a
form and at the time elected by the Gateway Participant, pursuant to
Section 18.05. In the absence of an election by the Gateway
Participant, the Advisory Committee will direct the Trustee to
distribute the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts in a lump sum (or, if applicable, the
normal annuity form of distribution required under Section 19.06), on
the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Gateway Participant attains
Normal Retirement Age; (b) the Gateway Participant attains age 62; or
(c) the Gateway Participant's Separation from Service.
(B) Required Beginning Date. The provisions of Section 6.01(B)
shall determine a Gateway Participants Required Beginning Date.
(C) Death of the Gateway Participant. The Advisory Committee will
direct the Trustee, in accordance with this Section 18.04(C), to distribute to
the Gateway Beneficiary the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts remaining in the Trust at the time of the
Gateway Participant's death.
(1) Deceased Gateway Participant's Nonrollover
Nonforfeitable Accrued Benefit Does Not Exceed $5,000. The Advisory
Committee, subject to the requirements of Section 18.06, must direct
the Trustee to distribute the deceased Gateway Participant's
Nonforfeitable Accrued Benefit derived from his Gateway Accounts in a
single cash sum, as soon as administratively practicable following the
Gateway Participant's death or, if later, the date on which the
Advisory Committee receives notification of or otherwise confirms the
Gateway Participant's death.
(2) Deceased Gateway Participant's Nonrollover
Nonforfeitable Accrued Benefit Exceeds $5,000. The Advisory Committee
will direct the Trustee to distribute the deceased Gateway
Participant's Nonforfeitable Accrued Benefit derived from his Gateway
Accounts at the time and in the form elected by the Gateway Participant
or, if applicable, by the Gateway Beneficiary, as permitted under this
Article XVIII.
If the death benefit is payable in full to the Gateway Participant's
surviving spouse, the surviving spouse, in addition to the distribution options
provided in this Section 18.04(C), may elect distribution at any time or in any
form (other than the joint and survivor annuity) this Article XVIII would permit
for a Gateway Participant.
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(D) Rollovers. The provisions of Section 6.08 shall apply to the
Gateway Accounts.
18.05 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days before nor
later than 30 days before the Gateway Participant's annuity starting date, the
Plan Administrator must provide a benefit notice to a Gateway Participant who is
eligible to make an election under this Section 18.05. The benefit notice must
explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the Gateway Participant's
right to defer distribution until he attains the later of Normal Retirement Age
or age 62.
Such distribution may commence less than 30 days after the benefit
notice is given, provided that:
(1) The Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) The Participant, after receiving the notice,
affirmatively elects a distribution.
If a Gateway Participant or Gateway Beneficiary makes an election
prescribed by this Section 18.05, the Advisory Committee will direct the Trustee
to distribute the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts in accordance with that election. Any election under
this Section is subject to the requirements of Section 18.06. The Gateway
Participant or Gateway Beneficiary must make an election under this Section
18.05 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a Gateway Participant's Accrued
Benefit derived from his Gateway Accounts in accordance with the requirements of
Articles VI and XVIII.
(A) Gateway Participant Elections After Separation from Service.
If the present value of a Gateway Participant's Nonrollover
Nonforfeitable Accrued Benefit exceeds $5,000, he may elect to have the Trustee
commence distribution as soon as administratively practicable following the
Gateway Participant's Separation from Service. The Gateway Participant may
reconsider an election at any time prior to the annuity starting date and elect
to commence distribution as of any other distribution date, but not earlier than
the date described in the first sentence of this Paragraph (A). Following his
attainment of Normal Retirement Age, a Gateway Participant who has separated
from Service may elect distribution as of any distribution date, irrespective of
the restrictions otherwise applicable under this Section 18.05(A).
(B) Gateway Participant Elections Prior to Separation from
Service.
In addition to the distribution options provided in Section 6.03, a
Gateway Participant, until he retires, has a continuing election to receive all
or any portion of his Gateway Deferral Contributions Account if: (a) he has
attained age 59 1/2 and (b) he is 100% vested in the Account.
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The procedures set forth in Section 6.03(B) shall apply. Any distribution is
subject to the requirements of Section 19.06.
(C) Death Benefit Elections.
If the present value of the deceased Gateway Participant's Nonrollover
Nonforfeitable Accrued Benefit exceeds $5,000, the Gateway Beneficiary may elect
to have the Trustee distribute the Gateway Participant's Nonforfeitable Accrued
Benefit derived from his Gateway Accounts in a form and within a period
permitted under Section 18.04. The Gateway Beneficiary's election is subject to
any restrictions designated in writing by the Gateway Participant and not
revoked as of his date of death.
(D) Transitional Elections.
Notwithstanding the provisions of Section 18.03 and 18.04, if the
Gateway Participant (or Gateway Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute the
Gateway Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 18.06, 18.07 and 18.08. This Section 18.05(D) does not apply to a
pre-1984 distribution designation, and the Advisory Committee will not comply
with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code Section 401(a)(9) as in
effect on December 31, 1983; (2) the Gateway Participant did not have an Accrued
Benefit as of December 31, 1983; (3) the distribution designation does not
specify the timing and form of the distribution and the death Beneficiaries (in
order of priority); (4) the substitution of a Gateway Beneficiary modifies the
payment period of the distribution; or (5) the Gateway Participant (or Gateway
Beneficiary) modifies or revokes the distribution designation. In the event of a
revocation, the Plan must distribute, no later than December 31 of the calendar
year following the year of revocation, the amount which the Gateway Participant
would have received under Section 18.04(A) if the distribution designation had
not been in effect or, if the Gateway Beneficiary revokes the distribution
designation, the amount which the Gateway Beneficiary would have received under
Section 18.04(C) if the distribution designation had not been in effect. The
Advisory Committee will apply this Section 18.05(D) to rollovers and transfers
in accordance with Part J of the Code Section 401(a)(9) Treasury regulations.
18.06 ANNUITY DISTRIBUTIONS TO GATEWAY PARTICIPANTS AND SURVIVING
SPOUSES.
(A) Joint and Survivor Annuity. The Advisory Committee must direct
the Trustee to distribute a Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Accounts in the form of a qualified joint and survivor
annuity, unless the Gateway Participant makes a valid waiver election (described
in Section 18.07) within the 90-day period ending on the annuity starting date.
If, as of the annuity starting date, the Gateway Participant is married, a
qualified joint and survivor annuity is an immediate annuity which is
purchasable with the Gateway Participant's Nonforfeitable Accrued Benefit
derived from his Gateway Account and which provides a life annuity for the
Gateway Participant and a survivor annuity payable for the remaining life of the
Gateway Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Gateway Participant. If, as of the annuity
starting date, the Gateway Participant is not married, a qualified joint and
survivor annuity is an immediate life
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annuity for the Gateway Participant which is purchasable with the Gateway
Participant's Nonforfeitable Accrued Benefit derived from his Gateway Accounts.
On or before the annuity starting date, the Advisory Committee, without Gateway
Participant or spousal consent, must direct the Trustee to pay the Gateway
Participant's Nonforfeitable Accrued Benefit derived from his Gateway Accounts,
in a lump sum, in lieu of a qualified joint and survivor annuity in accordance
with Section 18.04, if the Gateway Participant's Nonrollover Nonforfeitable
Accrued Benefit is not greater than $5,000.
(B) Preretirement Survivor Annuity. If a married Gateway
Participant dies prior to his annuity starting date the Advisory Committee will
direct the Trustee to distribute a portion of the Gateway Participant's
Nonforfeitable Accrued Benefit derived from his Gateway Accounts to the Gateway
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Gateway Participant has a valid waiver election (as described in
Section 18.08) in effect, or unless the Gateway Participant and his spouse were
not married throughout the one year period ending on the date of his death. A
preretirement survivor annuity is an annuity which is purchasable with 50% of
the Gateway Participants Nonforfeitable Accrued Benefit derived from his Gateway
Accounts (determined as of the date of the Gateway Participant's death) and
which is payable for the life of the Gateway Participant's surviving spouse. The
value of the preretirement survivor annuity is attributable to Employer
contributions and to Employee contributions in the same proportion as the
Gateway Participant's Nonforfeitable Accrued Benefit derived from his Gateway
Accounts is attributable to those contributions. The portion of the Gateway
Participant's Nonforfeitable Accrued Benefit derived from his Gateway Accounts
not payable under this paragraph is payable to the Gateway Participant's
Beneficiary, in accordance with the other provisions of this Article XVIII. If
the present value of the preretirement survivor annuity does not exceed $5,000,
the Advisory Committee, on or before the annuity starting date, must direct the
Trustee to make a lump sum distribution to the Gateway Participant's surviving
spouse, in lieu of a preretirement survivor annuity.
(C) Surviving Spouse Elections. If the present value of the
preretirement survivor annuity exceeds $5,000, the Gateway Participant's
surviving spouse may elect to have the Trustee commence payment of the
preretirement survivor annuity at any time following the date of the Gateway
Participant's death, but not later than the mandatory distribution periods
described in Section 18.04, and may elect any form of payment described in
Section 18.03, in lieu of the preretirement survivor annuity. In the absence of
an election by the surviving spouse, the Advisory Committee must direct the
Trustee to distribute the preretirement survivor annuity on the first
distribution date following the close of the Plan Year in which the latest of
the following events occurs: (i) the Gateway Participant's death; (ii) the date
the Advisory Committee receives notification of or otherwise confirms the
Gateway Participant's death; (iii) the date the Gateway Participant would have
attained Normal Retirement Age; or (iv) the date the Gateway Participant would
have attained age 62.
(D) Special Rules. If the Gateway Participant has in effect a
valid waiver election regarding the qualified joint and survivor annuity or the
preretirement survivor annuity, the Advisory Committee must direct the Trustee
to distribute the Gateway Participant's Nonforfeitable Accrued Benefit derived
from his Gateway Accounts in accordance with Sections 18.03, 18.04 and 18.05.
For purposes of applying this Article XVIII, the Advisory Committee treats a
former spouse as the Gateway Participant's spouse or the surviving spouse to the
extent
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provided under a qualified domestic relations order described in Section 6.07.
The provisions of this Article XVIII apply separately to the portion of the
Gateway Participant's Nonforfeitable Accrued Benefit derived from his Gateway
Accounts subject to the qualified domestic relations order and to the portion of
the Gateway Participant's Nonforfeitable Accrued Benefit derived from his
Gateway Accounts not subject to that order.
Limited Application of Section. The preceding provisions of this
Section 18.06 apply only to (1) a Gateway Participant as respects whom the Plan
is a direct or indirect transferee from a plan subject to the Code Section 417
requirements and the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section 11.05; (2) a Gateway
Participant or Gateway Beneficiary who is eligible to and who elects a life
annuity distribution; and (3) a Gateway Participant whose benefits under a
defined benefit plan are offset by benefits provided under this Plan. Sections
18.07 and 18.08 only apply to a Gateway Participant or Gateway Beneficiary to
whom the preceding provisions of this Section 18.06 apply.
18.07 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Within
90 days, not later than 30 days, before the Gateway Participants annuity
starting date, the Advisory Committee must provide the Gateway Participant a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the Gateway Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
Gateway Participant's spouse regarding the waiver election, and the Gateway
Participant's right to make, and the effect of, a revocation of a waiver
election. The Plan does not limit the number of times the Gateway Participant
may revoke a waiver of the qualified joint and survivor annuity or make a new
waiver during the election period.
A married Gateway Participants waiver election is not valid unless (a)
the Gateway Participant's spouse (to whom the survivor annuity is payable under
the qualified joint and survivor annuity), after the Gateway Participant has
received the written explanation described in this Section 18.07, has consented
in writing to the waiver election, the spouse's consent acknowledges the effect
of the election, and a notary public as the Plan Administrator (or his
representative) witnesses the spouse's consent, (b) the spouse consents to the
alternate form of payment designated by the Gateway Participant or to any change
in that designated form of payment, and (c) unless the spouse is the Gateway
Participant's sole primary Beneficiary, the spouse consents to the Gateway
Participant's Beneficiary designation or to any change in the Gateway
Participant's Beneficiary designation. The spouse's consent to a waiver of the
qualified joint and survivor annuity is irrevocable, unless the Gateway
Participant revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary designation
made by the Gateway Participant, if the spouse acknowledges the right to limit
that consent to a specific designation but, in writing, waives that right. The
consent requirements of this Section 18.07 apply to a former spouse of a Gateway
Participant, to the extent required under a qualified domestic relations order
described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Advisory Committee
establishes the Gateway Participant does not have a spouse, the Advisory
Committee is not able to locate the Gateway Participant's spouse, the Gateway
Participant is legally separated or has been abandoned (within the meaning
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of State law) and the Gateway Participant has a court order to that effect, or
other circumstances exist under which the Secretary of the Treasury will excuse
the consent requirement. If the Gateway Participant's spouse is legally
incompetent to give consent, the spouse's legal guardian (even if the guardian
is the Gateway Participant) may give consent.
18.08 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married Gateway Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the Gateway Participant attains age 32 and ending on the last day of the Plan
Year in which the Gateway Participant attains age 34; (2) a reasonable period
after an Employee becomes a Gateway Participant; (3) a reasonable period after
the joint and survivor rules become applicable to the Gateway Participant; or
(4) a reasonable time after a fully subsidized preretirement survivor annuity no
longer satisfies the requirements of a fully subsidized benefit. A reasonable
period described in clauses (2), (3) and (4) is the period beginning one year
before and ending one year after the applicable event. If the Gateway
Participant separates from Service before attaining age 35, clauses (1), (2),
(3) and (4) do not apply and the Advisory Committee must provide the written
explanation within the period beginning one year before and ending one year
after the Separation from Service. The written explanation must describe, in a
manner consistent with Treasury Regulations, the terms and conditions of the
preretirement survivor annuity comparable to the explanation of the qualified
joint and survivor annuity required under Section 18.06. The Plan does not limit
the number of times the Gateway Participant may revoke a waiver of the
preretirement survivor annuity or make a new waiver during the election period.
A Gateway Participants waiver election of the preretirement survivor
annuity is not valid unless (a) the Gateway Participant makes the waiver
election no later than the first day of the Plan Year in which he attains age 35
and (b) the Gateway Participant's spouse (to whom the preretirement survivor
annuity is payable) satisfies the consent requirements described in Section
18.06, except the spouse need not consent to the form of benefit payable to the
designated Gateway Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the Gateway Participant
revokes the waiver election. Irrespective of the time of election requirement
described in clause (a), if the Gateway Participant separates from Service prior
to the first day of the Plan Year in which he attains age 35, the Advisory
Committee will accept a waiver election as respects the Gateway Participant's
Accrued Benefit attributable to his Service prior to this Separation from
Service. Furthermore, if a Gateway Participant who has separated from Service
makes a valid waiver election, except for the timing requirement of clause (a),
the Plan Administrator will accept that election as valid, but only until the
first day of the Plan Year in which the Gateway Participant attains age 35. A
waiver election described in this paragraph is not valid unless made after the
Gateway Participant has received the written explanation described in this
Section 18.08.
18.09 COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and
survivor requirements of Article XVIII apply to the Gateway Participant, neither
Section 8.01 nor this Section 18.09 impose any special spousal consent
requirements on the Gateway Participant's Beneficiary designation. However, in
the absence of spousal consent (as required by Articles VI and XVIII) to the
Gateway Participant's Beneficiary designation: (1) any waiver of the joint and
survivor annuity or of the preretirement survivor annuity is not valid; and (2)
if
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the Gateway Participant dies prior to his annuity starting date, the Gateway
Participant's Beneficiary designation will apply only to the portion of the
death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the Gateway Participant's surviving spouse is a primary
Beneficiary under the Gateway Participant's Beneficiary designation, the
18.10 Trustee will satisfy the spouse's interest in the Gateway
Participant's death benefit first from the portion which is payable as a
preretirement survivor annuity.
IN WITNESS WHEREOF, the Kansas City Southern has executed this amended
and restated Plan in Kansas City, Missouri as of this 30th day of May, 2002.
KANSAS CITY SOUTHERN
By: /s/ Eric Freestone/TLR
---------------------------------
WITNESS:
/s/ Tony L. Robertson
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