Exhibit 4.8
OCEAN RETIREMENT SAVINGS
PLAN
As Amended and Restated
Effective January 1, 2001
OCEAN RETIREMENT SAVINGS
PLAN
W I T N E S S E T H :
WHEREAS, the Company has heretofore adopted the OCEAN ENERGY, INC.
THRIFT PLAN, hereinafter referred to as the "Plan," for the benefit of its
employees; and
WHEREAS, the Ocean Energy, Inc. Employee Stock Ownership Plan was
merged with and into the Plan, effective as of the close of business on December
31, 2000; and
WHEREAS, the Company has appointed Fidelity Management Trust Company as
Trustee of the Plan, effective as of January 1, 2001, and will enter into a
separate Trust Agreement with respect to the Plan, thereby necessitating the
removal of the Trust provisions from the Plan document; and
WHEREAS, as a result of such plan merger and Trustee appointment, the
Company desires to restate the Plan and to amend the Plan in several respects,
intending thereby to provide an uninterrupted and continuing program of
benefits; and
WHEREAS, the Company desires to rename the Plan as the "Ocean
Retirement Savings Plan;"
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 2001, except as
otherwise indicated herein:
(ii)
TABLE OF CONTENTS
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I. DEFINITIONS AND CONSTRUCTION..................................................... 1
1.1 DEFINITIONS............................................................... 1
(1) ACCOUNT(s).......................................................... 1
(2) ACT................................................................. 1
(3) AFTER-TAX ACCOUNT................................................... 1
(4) BEFORE-TAX ACCOUNT.................................................. 1
(5) BEFORE-TAX CONTRIBUTIONS............................................ 1
(6) BENEFIT COMMENCEMENT DATE........................................... 1
(7) CODE................................................................ 1
(8) COMMITTEE........................................................... 1
(9) COMPANY............................................................. 1
(10) COMPANY STOCK....................................................... 1
(11) COMPENSATION........................................................ 2
(12) CONTROLLED ENTITY................................................... 3
(13) DIRECT ROLLOVER..................................................... 3
(14) DIRECTORS........................................................... 3
(15) DISTRIBUTEE......................................................... 3
(16) EFFECTIVE DATE...................................................... 3
(17) ELIGIBLE EMPLOYEE................................................... 3
(18) ELIGIBLE RETIREMENT PLAN............................................ 4
(19) ELIGIBLE ROLLOVER DISTRIBUTION...................................... 4
(20) ELIGIBLE SURVIVING SPOUSE........................................... 4
(21) EMPLOYEE............................................................ 4
(22) EMPLOYER............................................................ 4
(23) EMPLOYER CONTRIBUTION ACCOUNTS...................................... 4
(24) EMPLOYER CONTRIBUTIONS.............................................. 4
(25) EMPLOYER DISCRETIONARY CONTRIBUTION ACCOUNT......................... 4
(26) EMPLOYER DISCRETIONARY CONTRIBUTIONS................................ 5
(27) EMPLOYER MATCHING CONTRIBUTION ACCOUNT.............................. 5
(28) EMPLOYER MATCHING CONTRIBUTIONS..................................... 5
(29) EMPLOYER SAFE HARBOR CONTRIBUTIONS.................................. 5
(30) ENTRY DATE.......................................................... 5
(31) HIGHLY COMPENSATED EMPLOYEE......................................... 5
(32) HOUR OF SERVICE..................................................... 6
(33) INVESTMENT FUND..................................................... 6
(34) LEASED EMPLOYEE..................................................... 6
(35) MERGED PLAN......................................................... 6
(36) NON-ESOP ACCOUNTS................................................... 7
(37) NORMAL RETIREMENT DATE.............................................. 7
(38) ONE-YEAR BREAK-IN-SERVICE........................................... 7
(39) PARTICIPANT......................................................... 7
(40) PLAN................................................................ 7
(iii)
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(41) PLAN MERGER DOCUMENT................................................ 7
(42) PLAN YEAR........................................................... 7
(43) ROLLOVER CONTRIBUTION ACCOUNT....................................... 7
(44) ROLLOVER CONTRIBUTIONS.............................................. 7
(45) TRUST............................................................... 8
(46) TRUST AGREEMENT..................................................... 8
(47) TRUST FUND.......................................................... 8
(48) TRUSTEE............................................................. 8
(49) VESTED INTEREST..................................................... 8
(50) VESTING SERVICE..................................................... 8
1.2 NUMBER AND GENDER......................................................... 8
1.3 HEADINGS 8
1.4 CONSTRUCTION.............................................................. 8
II. PARTICIPATION.................................................................... 1
III. CONTRIBUTIONS.................................................................... 1
3.1 BEFORE-TAX CONTRIBUTIONS.................................................. 1
3.2 EMPLOYER MATCHING CONTRIBUTIONS........................................... 2
3.3 EMPLOYER DISCRETIONARY CONTRIBUTIONS...................................... 2
3.4 EMPLOYER SAFE HARBOR CONTRIBUTIONS........................................ 3
3.5 RESTRICTIONS ON EMPLOYER MATCHING CONTRIBUTIONS........................... 3
3.6 RETURN OF CONTRIBUTIONS................................................... 3
3.7 DISPOSITION OF EXCESS DEFERRALS AND EXCESS CONTRIBUTIONS.................. 3
3.8 ROLLOVER CONTRIBUTIONS.................................................... 5
IV. ALLOCATIONS AND LIMITATIONS...................................................... 1
4.1 SUSPENDED AMOUNTS......................................................... 1
4.2 ALLOCATION OF CONTRIBUTIONS TO ACCOUNTS................................... 1
4.3 APPLICATION/ALLOCATION OF FORFEITURES..................................... 2
4.4 VALUATION OF ACCOUNTS..................................................... 3
4.5 LIMITATIONS AND CORRECTIONS............................................... 3
V. INVESTMENT OF NON-ESOP ACCOUNTS.................................................. 1
5.1 INVESTMENT OF NON-ESOP ACCOUNTS........................................... 1
5.2 PASS-THROUGH VOTING OF COMPANY STOCK...................................... 1
5.3 STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS........................... 1
VI. RETIREMENT BENEFITS.............................................................. 1
6.1 RETIREMENT BENEFITS....................................................... 1
VII. DISABILITY BENEFITS.............................................................. 1
7.1 DISABILITY BENEFITS....................................................... 1
7.2 TOTAL AND PERMANENT DISABILITY DETERMINED................................. 1
VIII. PRE-RETIREMENT TERMINATION BENEFITS AND DETERMINATION OF VESTED INTEREST......... 1
8.1 NO BENEFITS UNLESS HEREIN SET FORTH....................................... 1
(iv)
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8.2 PRE-RETIREMENT TERMINATION BENEFIT........................................ 1
8.3 DETERMINATION OF VESTED INTEREST.......................................... 1
8.4 CREDITING OF VESTING SERVICE.............................................. 2
8.5 FORFEITURE OF VESTING SERVICE............................................. 2
8.6 FORFEITURES OF NONVESTED ACCOUNT BALANCE.................................. 3
8.7 RESTORATION OF FORFEITED ACCOUNT BALANCE.................................. 3
8.8 SPECIAL FORMULA FOR DETERMINING VESTED INTEREST FOR PARTIAL ACCOUNTS...... 3
IX. DEATH BENEFITS................................................................... 1
9.1 DEATH BENEFITS.......................................................... 1
9.2 DESIGNATION OF BENEFICIARIES............................................ 1
X. TIME AND FORM OF PAYMENT OF BENEFITS............................................. 1
10.1 DETERMINATION OF BENEFIT COMMENCEMENT DATE................................ 1
10.2 STANDARD AND ALTERNATIVE FORMS OF NON-ESOP BENEFIT FOR PARTICIPANTS....... 2
10.3 STANDARD AND ALTERNATIVE FORMS OF NON-ESOP DEATH BENEFIT.................. 5
10.4 CASH-OUT OF BENEFIT....................................................... 6
10.5 DIRECT ROLLOVER ELECTION.................................................. 6
10.6 BENEFITS FROM ACCOUNT BALANCES............................................ 7
10.7 COMMERCIAL ANNUITIES...................................................... 7
10.8 UNCLAIMED BENEFITS........................................................ 7
10.9 CLAIMS REVIEW............................................................. 7
XI. IN-SERVICE WITHDRAWALS........................................................... 1
11.1 IN-SERVICE WITHDRAWALS.................................................... 1
11.2 RESTRICTION ON IN-SERVICE WITHDRAWALS..................................... 2
XII. LOANS............................................................................ 1
12.1 ELIGIBILITY FOR LOAN...................................................... 1
12.2 MAXIMUM LOAN.............................................................. 1
XIII. ADMINISTRATION OF THE PLAN....................................................... 1
13.1 APPOINTMENT OF COMMITTEE................................................. 1
13.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL................................. 1
13.3 OFFICERS, RECORDS, AND PROCEDURES......................................... 1
13.4 MEETINGS 1
13.5 SELF-INTEREST OF MEMBERS.................................................. 1
13.6 COMPENSATION AND BONDING.................................................. 2
13.7 COMMITTEE POWERS AND DUTIES............................................... 2
13.8 EMPLOYER TO SUPPLY INFORMATION............................................ 3
13.9 INDEMNIFICATION........................................................... 3
13.10 TEMPORARY RESTRICTIONS.................................................... 3
XIV. TRUSTEE AND ADMINISTRATION OF TRUST FUND......................................... 1
14.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT OF TRUSTEE............. 1
14.2 TRUST AGREEMENT........................................................... 1
14.3 PAYMENT OF EXPENSES....................................................... 1
(v)
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14.4 TRUST FUND PROPERTY....................................................... 1
14.5 DISTRIBUTIONS FROM PARTICIPANTS' ACCOUNTS................................. 1
14.6 PAYMENTS SOLELY FROM TRUST FUND........................................... 2
14.7 NO BENEFITS TO THE EMPLOYER............................................... 2
XV. FIDUCIARY PROVISIONS............................................................. 1
15.1 ARTICLE CONTROLS.......................................................... 1
15.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES.................................... 1
15.3 FIDUCIARY DUTY............................................................ 1
15.4 DELEGATION OF FIDUCIARY DUTIES............................................ 1
15.5 INVESTMENT MANAGER........................................................ 2
XVI. AMENDMENTS....................................................................... 1
16.1 RIGHT TO AMEND............................................................ 1
16.2 LIMITATION ON AMENDMENTS.................................................. 1
XVII. DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,.................................... 1
17.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY TERMINATE..... 1
17.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
OR PARTIAL TERMINATION.................................................... 1
17.3 MERGER, CONSOLIDATION, OR TRANSFER........................................ 1
XVIII. PARTICIPATING EMPLOYERS.......................................................... 1
18.1 DESIGNATION OF OTHER EMPLOYERS............................................ 1
18.2 SINGLE PLAN............................................................... 2
XIX. MISCELLANEOUS PROVISIONS......................................................... 1
19.1 NOT CONTRACT OF EMPLOYMENT................................................ 1
19.2 ALIENATION OF INTEREST FORBIDDEN.......................................... 1
19.3 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT REQUIREMENTS.... 1
19.4 PAYMENTS TO MINORS AND INCOMPETENTS....................................... 1
19.5 PARTICIPANT'S AND BENEFICIARY'S ADDRESSES................................. 1
19.6 INCORRECT INFORMATION, FRAUD, CONCEALMENT, OR ERROR....................... 2
19.7 SEVERABILITY.............................................................. 2
19.8 JURISDICTION.............................................................. 2
19.9 ACQUISITION AND HOLDING OF COMPANY STOCK.................................. 2
XX. TOP-HEAVY STATUS................................................................. 1
20.1 ARTICLE CONTROLS.......................................................... 1
20.2 DEFINITIONS............................................................... 1
(a) ACCOUNT BALANCE..................................................... 1
(b) ACCRUED BENEFIT..................................................... 1
(c) AGGREGATION GROUP................................................... 1
(d) ASSUMPTIONS......................................................... 2
(e) DETERMINATION DATE.................................................. 2
(f) KEY EMPLOYEE........................................................ 2
(vi)
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(g) PLAN YEAR........................................................... 2
(h) REMUNERATION........................................................ 2
(i) VALUATION DATE...................................................... 2
20.3 TOP-HEAVY STATUS.......................................................... 2
20.4 TOP-HEAVY CONTRIBUTION.................................................... 3
20.5 TERMINATION OF TOP-HEAVY STATUS........................................... 3
20.6 EFFECT OF ARTICLE......................................................... 4
XXI. ESOP AND ESOP ALLOCATIONS........................................................ 1
21.1 EFFECTIVE DATE............................................................ 1
21.2 ARTICLE CONTROLS.......................................................... 1
21.3 DEFINITIONS............................................................... 1
21.4 PURPOSE OF ESOP........................................................... 2
21.5 NATURE OF THE ESOP........................................................ 2
21.6 CONTRIBUTIONS AND ALLOCATIONS............................................. 2
21.7 CASH DIVIDENDS ON ESOP STOCK.............................................. 2
21.8 DIVIDEND ACCOUNTING AND ALLOCATIONS....................................... 2
21.9 INVESTMENT OF ACCOUNTS.................................................... 3
21.10 FORFEITURE OF FINANCED STOCK.............................................. 3
21.11 FORM OF ESOP BENEFIT AND PAYEE............................................ 3
21.12 VOTING AND OTHER RIGHTS................................................... 3
21.13 RIGHT OF FIRST REFUSAL.................................................... 3
21.14 "PUT" OPTION.............................................................. 4
21.15 DIVERSIFICATION DISTRIBUTIONS AND TRANSFERS............................... 6
21.16 ESOP STOCK VALUATION...................................................... 6
21.17 SPECIAL PROVISIONS REGARDING CHANGE OF CONTROL............................ 7
(vii)
I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) ACCOUNT(s): A Participant's Before-Tax Account, Employer Discretionary
Contribution Account, Employer Matching Contribution Account, ESOP
Account (as defined in Section 21.3(b)), After-Tax Account and/or
Rollover Contribution Account, including the amounts credited thereto.
(2) ACT: The Employee Retirement Income Security Act of 1974, as amended.
(3) AFTER-TAX ACCOUNT: An individual account for each Participant, which is
credited with the balance, if any, credited to such Participant's
After-Tax Account immediately prior to the Effective Date, and which is
credited with (or debited for) such Account's allocation of net income
(or net loss) and changes in value of the Trust Fund.
(4) BEFORE-TAX ACCOUNT: An individual account for each Participant, which
is credited with the sum of (A) the balance, if any, credited to such
Participant's Before-Tax Account immediately prior to the Effective
Date and (B) the Before-Tax Contributions made by the Employer on such
Participant's behalf and the Employer Safe Harbor Contributions, if
any, made on such Participant's behalf pursuant to Section 3.4 to
satisfy the restrictions set forth in Section 3.1(e), and which is
credited with (or debited for) such Account's allocation of net income
(or net loss) and changes in value of the Trust Fund.
(5) BEFORE-TAX CONTRIBUTIONS: Contributions made to the Plan by the
Employer on a Participant's behalf in accordance with the Participant's
elections to defer Compensation under the Plan's qualified cash or
deferred arrangement as described in Section 3.1.
(6) BENEFIT COMMENCEMENT DATE: With respect to each Participant or
beneficiary, the first day of the first period for which such
Participant's or beneficiary's benefit is payable to him from the Trust
Fund as an annuity or in any other form.
(7) CODE: The Internal Revenue Code of 1986, as amended.
(8) COMMITTEE: The administrative committee appointed by the Directors to
administer the Plan.
(9) COMPANY: Ocean Energy, Inc., a Texas corporation.
(10) COMPANY STOCK: The common stock of Ocean Energy, Inc.
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(11) COMPENSATION: The total of all wages, salaries, fees for professional
service and other amounts received in cash or in kind by a Participant
for services actually rendered or labor performed for the Employer
while a Participant to the extent such amounts are includable in gross
income, subject to the following adjustments and limitations:
(A) The following shall be excluded:
(i) Bonuses and incentive or other supplemental pay;
(ii) Reimbursements and other expense allowances;
(iii) Cash and noncash fringe benefits;
(iv) Moving expenses;
(v) Employer contributions to or payments from this or any
other deferred compensation program, whether such program
is qualified under section 401(a) of the Code or
nonqualified;
(vi) Welfare benefits;
(vii) Amounts realized from the receipt or exercise of a stock
option that is not an incentive stock option within the
meaning of section 422 of the Code;
(viii) Amounts realized at the time property described in section
83 of the Code is freely transferable or no longer subject
to a substantial risk of forfeiture;
(ix) Amounts realized as a result of an election described in
section 83(b) of the Code;
(x) Any amount realized as a result of a disqualifying
disposition within the meaning of section 421(a) of the
Code; and
(xi) Any other amounts that receive special tax benefits under
the Code but are not hereinafter included.
(B) The following shall be included:
(i) Elective contributions made on a Participant's behalf by
the Employer that are not includable in income under
section 125, section 402(e)(3), section 402(h), or section
403(b) of the Code and any amounts that are not includable
in the gross income of a Participant under a salary
reduction agreement by reason of the application of
section 132(f) of the Code;
(ii) Compensation deferred under an eligible deferred
compensation plan within the meaning of section 457(b) of
the Code; and
(iii) Employee contributions described in section 414(h) of the
Code that are picked up by the employing unit and are
treated as employer contributions.
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(C) The Compensation of any Participant taken into account for
purposes of the Plan shall be limited to $170,000 for any Plan
Year with such limitation to be:
(i) Adjusted automatically to reflect any amendments to section
401(a)(17) of the Code and any cost-of-living increases
authorized by section 401(a)(17) of the Code; and
(ii) Prorated for a Plan Year of less than twelve months and to
the extent otherwise required by applicable law.
(12) CONTROLLED ENTITY: Each corporation that is a member of a controlled
group of corporations, within the meaning of section 1563(a)
(determined without regard to sections 1563(a)(4) and 1563(e)(3)(C)) of
the Code, of which the Employer is a member, each trade or business
(whether or not incorporated) with which the Employer is under common
control, and each member of an affiliated service group, within the
meaning of section 414(m) of the Code, of which the Employer is a
member.
(13) DIRECT ROLLOVER: A payment by the Plan to an Eligible Retirement Plan
designated by a Distributee.
(14) DIRECTORS: The Board of Directors of the Company.
(15) DISTRIBUTEE: Each (A) Participant entitled to an Eligible Rollover
Distribution, (B) Participant's surviving spouse with respect to the
interest of such surviving spouse in an Eligible Rollover Distribution,
and (C) former spouse of a Participant who is an alternate payee under
a qualified domestic relations order, as defined in section 414(p) of
the Code, with regard to the interest of such former spouse in an
Eligible Rollover Distribution.
(16) EFFECTIVE DATE: January 1, 2001, as to this restatement of the Plan,
except (A) as otherwise indicated in specific provisions of the Plan
and (B) that provisions of the Plan required to have an earlier
effective date by applicable statute and/or regulation shall be
effective as of the required effective date in such statute and/or
regulation and shall apply, as of such required effective date, to any
plan merged into this Plan. The original effective date of the Plan was
January 1, 1973.
(17) ELIGIBLE EMPLOYEE: Each Employee other than (A) an Employee whose terms
and conditions of employment are governed by a collective bargaining
agreement, unless such agreement provides for his coverage under the
Plan, (B) a nonresident alien who receives no earned income from the
Employer that constitutes income from sources within the United States
or (C) a Leased Employee. Notwithstanding any provision of the Plan to
the contrary, no individual who is designated, compensated, or
otherwise classified or treated by the Employer as an independent
contractor or other non-common law employee shall be eligible to become
a Participant in the Plan. It is expressly intended that individuals
not treated as common law employees by the Employer are to be excluded
from the Plan participation even if a court or administrative agency
determines that such individuals are common law employees.
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(18) ELIGIBLE RETIREMENT PLAN: (A) With respect to a Distributee other than
a surviving spouse, an individual retirement account described in
section 408(a) of the Code, an individual retirement annuity described
in section 408(b) of the Code, an annuity plan described in section
403(a) of the Code, or a qualified plan described in section 401(a) of
the Code, which under its provisions does, and under applicable law
may, accept such Distributee's Eligible Rollover Distribution, and (B)
with respect to a Distributee who is a surviving spouse, an individual
retirement account described in section 408(a) of the Code or an
individual retirement annuity described in section 408(b) of the Code.
(19) ELIGIBLE ROLLOVER DISTRIBUTION: With respect to a Distributee, any
distribution of all or any portion of the Accounts of a Participant
other than (A) a distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's
designated beneficiary or for a specified period of ten years or more,
(B) a distribution to the extent such distribution is required under
section 401(a)(9) of the Code, (C) the portion of a distribution that
is not includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities), (D) a loan treated as a distribution under section 72(p)
of the Code and not excepted by section 72(p)(2), (E) a loan in default
that is a deemed distribution, (F) any corrective distribution provided
in Sections 3.7 and 4.5(b), and (G) any other distribution so
designated by the Internal Revenue Service in revenue rulings, notices,
and other guidance of general applicability. Further, a distribution
pursuant to Section 11.1(d) from the Before-Tax Account of a
Participant who has not attained age 59 1/2 shall not constitute an
Eligible Rollover Distribution.
(20) ELIGIBLE SURVIVING SPOUSE: (A) In the case of a Participant who is
living on his Benefit Commencement Date, the spouse to whom a deceased
Participant was married on his Benefit Commencement Date and (B) in the
case of a Participant who dies before his Benefit Commencement Date,
the spouse to whom a deceased Participant was married on the date of
his death.
(21) EMPLOYEE: Each (A) individual employed by the Employer and (B) Leased
Employee.
(22) EMPLOYER: The Company, Ocean Energy, Inc., a Louisiana corporation, and
each other entity that has been designated to participate in the Plan
pursuant to the provisions of Article XVIII.
(23) EMPLOYER CONTRIBUTION ACCOUNTS: A Participant's Employer Discretionary
Contribution Account, Employer Matching Contribution Account and/or
ESOP Account (as such term is defined in Section 21.3(b)), including
the amounts credited thereto.
(24) EMPLOYER CONTRIBUTIONS: The total of ESOP Contributions (as such term
is defined in Section 21.3(c)), Employer Matching Contributions,
Employer Discretionary Contributions, and Employer Safe Harbor
Contributions.
(25) EMPLOYER DISCRETIONARY CONTRIBUTION ACCOUNT: An individual account for
each Participant, which is credited with the sum of (A) the balance, if
any, credited to such
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Participant's Employer Discretionary Contribution Account immediately
prior to the Effective Date and (B) the Employer Discretionary
Contributions, if any, made on such Participant's behalf, and which is
credited with (or debited for) such Account's allocation of net income
(or net loss) and changes in value of the Trust Fund.
(26) EMPLOYER DISCRETIONARY CONTRIBUTIONS: Contributions made to the Plan by
the Employer pursuant to Section 3.3.
(27) EMPLOYER MATCHING CONTRIBUTION ACCOUNT: An individual account for each
Participant, which is credited with the sum of (A) the balance, if any,
credited to such Participant's Employer Matching Contribution Account
immediately prior to the Effective Date, (B) the Employer Matching
Contributions made on such Participant's behalf and (C) the Employer
Safe Harbor Contributions, if any, made on such Participant's behalf
pursuant to Section 3.4 to satisfy the restrictions set forth in
Section 3.5, and which is credited with (or debited for) such Account's
allocation of net income (or net loss) and changes in value of the
Trust Fund.
(28) EMPLOYER MATCHING CONTRIBUTIONS: Contributions made to the Plan by the
Employer pursuant to Section 3.2.
(29) EMPLOYER SAFE HARBOR CONTRIBUTIONS: Contributions made to the Plan by
the Employer pursuant to Section 3.4.
(30) ENTRY DATE: The first day of each month.
(31) HIGHLY COMPENSATED EMPLOYEE: Each Employee who performs services during
the Plan Year for which the determination of who is highly compensated
is being made (the "Determination Year") and who:
(A) Is a five-percent owner of the Employer (within the meaning of
section 416(i)(1)(A)(iii) of the Code) at any time during the
Determination Year or the twelve-month period immediately
preceding the Determination Year (the "Look-Back Year"); or
(B) Receives compensation (within the meaning of section 414(q)(4) of
the Code; "compensation" for purposes of this Paragraph) in
excess of $80,000 (with such amount to be adjusted automatically
to reflect any cost-of-living adjustments authorized by section
414(q)(1) of the Code) during the Look-Back Year.
For purposes of the preceding sentence, (I) all employers aggregated
with the Employer under section 414(b), (c), (m), or (o) of the Code
shall be treated as a single employer and (II) a former Employee who
had a separation year (generally, the Determination Year such Employee
separates from service) prior to the Determination Year and who was an
active Highly Compensated Employee for either such separation year or
any Determination Year ending on or after such Employee's fifty-fifth
birthday shall be deemed to be a Highly Compensated Employee. To the
extent that the provisions of this Paragraph are inconsistent or
conflict with the definition of a "highly compensated employee" set
forth in section 414(q) of the Code and the Treasury regulations
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thereunder, the relevant terms and provisions of section 414(q) of the
Code and the Treasury regulations thereunder shall govern and control.
(32) HOUR OF SERVICE: Each hour for which an individual is directly or
indirectly paid, or entitled to payment, by the Employer or a
Controlled Entity for the performance of duties or for reasons other
than the performance of duties; provided, however, that no more than
501 Hours of Service shall be credited to an individual on account of
any continuous period during which he performs no duties. Such Hours of
Service shall be credited to the individual for the computation period
in which such duties were performed or in which occurred the period
during which no duties were performed. An Hour of Service also includes
each hour, not credited above, for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by the
Employer or a Controlled Entity. These Hours of Service shall be
credited to the individual for the computation period to which the
award or agreement pertains rather than the computation period in which
the award, agreement, or payment is made. The number of Hours of
Service to be credited to an individual for any computation period
shall be governed by 29 CFR Sections 2530.200b-2(b) and (c). Hours of
Service shall also include any hours required to be credited by federal
law other than the Act or the Code, but only under the conditions and
to the extent so required by such federal law. In no event shall Hours
of Service include any period of service with a corporation or other
entity prior to the date it became a Controlled Entity or after it
ceases to be a Controlled Entity except to the extent required by law,
or to the extent determined by the Committee. The Committee, in its
discretion, may credit individuals with Hours of Service based on
employment with an entity other than the Employer, but only if and when
such individual becomes an Eligible Employee and only if such crediting
of Hours of Service (A) has a legitimate business reason, (B) does not
by design or operation discriminate significantly in favor of Highly
Compensated Employees, and (C) is applied to all similarly-situated
Eligible Employees. Finally, Hours of Service shall include Hours of
Service credited pursuant to the Plan Merger Document and/or the ESOP
Merger Document (as such term in defined in Section 21.3(d)).
(33) INVESTMENT FUND: Investment funds made available from time to time for
the investment of plan assets as described in Article V.
(34) LEASED EMPLOYEE: Each person who is not an employee of the Employer or
a Controlled Entity but who performs services for the Employer or a
Controlled Entity pursuant to an agreement (oral or written) between
the Employer or a Controlled Entity and any leasing organization,
provided that such person has performed such services for the Employer
or a Controlled Entity or for related persons (within the meaning of
section 144(a)(3) of the Code) on a substantially full-time basis for a
period of at least one year and such services are performed under
primary direction or control by the Employer or a Controlled Entity.
(35) MERGED PLAN: The Global Natural Resources Inc. Employees 401(k) Savings
Plan, the Ocean Energy, Inc. 401(K) Savings Plan, the UMC Petroleum
Savings Plan and the OEI ESOP (as such term is defined in Section
21.3(i)).
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(36) NON-ESOP ACCOUNTS: A Participant's Before-Tax Account, Employer
Discretionary Contribution Account, Employer Matching Contribution
Account, After-Tax Account and/or Rollover Contribution Account,
including the amounts credited thereto.
(37) NORMAL RETIREMENT DATE: The date a Participant attains the age of
sixty-five.
(38) ONE-YEAR BREAK-IN-SERVICE: Any Plan Year during which an individual has
less than 501 Hours of Service. Solely for purposes of determining
whether a One-Year Break-in-Service has occurred, an Hour of Service
shall include each normal work hour, not otherwise credited in Section
1.1(32), during which an individual is absent from work by reason of
the individual's pregnancy, the birth of a child of the individual, the
placement of a child with the individual in connection with the
adoption of such child by the individual, or for purposes of caring for
such child for the period immediately following such birth or
placement. The Committee may in its discretion require, as a condition
to the crediting of Hours of Service under the preceding sentence, that
the individual furnish appropriate and timely information to the
Committee establishing the reason for any such absence. Such Hours of
Service shall be credited to the individual for the computation period
in which the absence from work begins if such crediting is necessary to
prevent the occurrence of a One-Year Break-in-Service in such
computation period; otherwise such Hours of Service shall be credited
to the individual in the next following computation period.
(39) PARTICIPANT: Each individual who (A) has met the eligibility
requirements for participation in the Plan pursuant to Article II or
(B) has made a Rollover Contribution in accordance with Section 3.8,
but only to the extent provided in Section 3.8. For purposes of Article
V only, the beneficiary of a deceased Participant and any alternate
payee under a qualified domestic relations order (as defined in Section
19.2) shall have the rights of a Participant.
(40) PLAN: The Ocean Retirement Savings Plan, as amended from time to time.
(41) PLAN MERGER DOCUMENT: The document entitled "Merger of the Global
Natural Resources Inc. Employees 401(k) Savings Plan, the Ocean Energy,
Inc. 401(K) Savings Plan and the UMC Petroleum Savings Plan with and
into the Ocean Energy, Inc. Thrift Plan," a copy of which is attached
hereto as Appendix A.
(42) PLAN YEAR: The twelve-consecutive month period commencing January 1 of
each year.
(43) ROLLOVER CONTRIBUTION ACCOUNT: An individual account for an Eligible
Employee, which is credited with the sum of (A) the balance, if any,
credited to such Participant's Rollover Contribution Account
immediately prior to the Effective Date, (B) Rollover Contributions of
such Employee and (C) the amounts, if any, credited to such Account in
accordance with Section 21.15, and which is credited with (or debited
for) such Account's allocation of net income (or net loss) and changes
in value of the Trust Fund.
(44) ROLLOVER CONTRIBUTIONS: Contributions made by an Eligible Employee
pursuant to Section 3.8.
I-7
(45) TRUST: The trust(s) established under the Trust Agreement(s) to hold
and invest contributions made under the Plan, and income thereon, and
from which the Plan benefits are distributed.
(46) TRUST AGREEMENT: The agreement(s) entered into between the Company and
the Trustee establishing the Trust, as such agreement(s) may be amended
from time to time.
(47) TRUST FUND: The funds and properties held pursuant to the provisions of
the Trust Agreement for the use and benefit of the Participants,
together with all income, profits, and increments thereto.
(48) TRUSTEE: The trustee or trustees qualified and acting under the Trust
Agreement at any time.
(49) VESTED INTEREST: The percentage of a Participant's Accounts which,
pursuant to the Plan, is nonforfeitable.
(50) VESTING SERVICE: The measure of service used in determining a
Participant's Vested Interest as determined in accordance with Sections
8.4 and 8.5.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural, and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
1.4 CONSTRUCTION. It is intended that the Plan be qualified within the
meaning of section 401(a) of the Code and that the Trust be tax exempt under
section 501(a) of the Code, and all provisions herein shall be construed in
accordance with such intent.
I-8
II.
PARTICIPATION
Each Eligible Employee shall become a Participant upon the Entry Date
coincident with or next following the date on which such Eligible Employee
completes an Hour of Service. Notwithstanding the foregoing:
(a) An Eligible Employee who was a Participant in the Plan on the
day prior to the Effective Date or who became a Participant in the
Plan on the day prior to the Effective Date as a result of the merger
of a Merged Plan with and into the Plan shall remain a Participant in
this restatement thereof as of the Effective Date;
(b) An Eligible Employee who was a Participant in the Plan prior
to a termination of employment shall remain a Participant immediately
upon his reemployment as an Eligible Employee;
(c) An Employee who has completed an Hour of Service but who has
not become a Participant in the Plan because he was not an Eligible
Employee shall become a Participant in the Plan upon the date he
becomes an Eligible Employee as a result of a change in his employment
status;
(d) An Eligible Employee who had met requirements of this Article
to become a Participant in the Plan but who terminated employment
prior to the Entry Date upon which he would have become a Participant
shall become a Participant upon the date of his reemployment; and
(e) A Participant who ceases to be an Eligible Employee but
remains an Employee shall continue to be a Participant but, on and
after the date he ceases to be an Eligible Employee, he shall no
longer be entitled to defer Compensation hereunder or share in
allocations of Employer Contributions and forfeitures unless and until
he shall again become an Eligible Employee.
II-1
III.
CONTRIBUTIONS
3.1 BEFORE-TAX CONTRIBUTIONS.
(a) A Participant may elect to defer an integral percentage of
from 1% to 14% (or such lesser percentage as may be prescribed from time to time
by the Committee) of his Compensation for a Plan Year by having the Employer
contribute the amount so deferred to the Plan. Compensation for a Plan Year not
so deferred by such election shall be received by such Participant in cash. A
Participant's election to defer an amount of his Compensation pursuant to this
Section shall be made by authorizing his Employer, in the manner prescribed by
the Committee, to reduce his Compensation in the elected amount and the
Employer, in consideration thereof, agrees to contribute an equal amount to the
Plan. The Compensation elected to be deferred by a Participant pursuant to this
Section shall become a part of the Employer's Before-Tax Contributions and shall
be allocated in accordance with Section 4.2(a). Compensation for a Plan Year not
so deferred by a Participant shall be received by such Participant in cash.
(b) A Participant's deferral election shall remain in force and
effect for all periods following the effective date of such election (which
shall be as soon as administratively feasible after the election is made) its
effective date until modified or terminated or until such Participant terminates
his employment or ceases to be an Eligible Employee. A Participant who has
elected to defer a portion of his Compensation may change his deferral election
percentage (within the percentage limits set forth in Paragraph (a) above),
effective as of the first day of any month by communicating such new deferral
election percentage to his Employer in the manner and within the time period
prescribed by the Committee.
(c) A Participant may cancel his deferral election, effective as
of the first day of any payroll period by communicating such cancellation to his
Employer in the manner and within the time period prescribed by the Committee. A
Participant who so cancels his deferral election may resume deferrals, effective
as of the first day of any payroll period beginning at least six months after
such cancellation by communicating his new deferral election to his Employer in
the manner and within the time period prescribed by the Committee.
(d) In restriction of the Participants' elections provided in
Paragraphs (a), (b), and (c) above, the Before-Tax Contributions and the
elective deferrals (within the meaning of section 402(g)(3) of the Code) under
all other plans, contracts, and arrangements of the Employer on behalf of any
Participant for any calendar year shall not exceed $10,500 (with such amount to
be adjusted automatically to reflect any cost-of-living adjustments authorized
by section 402(g)(5) of the Code).
(e) In further restriction of the Participants' elections
provided in Paragraphs (a), (b), and (c) above, it is specifically provided that
one of the "actual deferral percentage" tests set forth in section 401(k)(3) of
the Code and the Treasury regulations thereunder must be met in each Plan Year.
Such testing shall utilize the current year testing method as such term is
defined
III-1
in Internal Revenue Service Notice 98-1. If multiple use of the alternative
limitation (within the meaning of section 401(m)(9) of the Code and Treasury
regulation Section 1.401(m)-2(b)) occurs during a Plan Year, such multiple use
shall be corrected in accordance with the provisions of Treasury regulation
Section 1.401(m)-2(c); provided, however, that if such multiple use is not
eliminated by making Employer Safe Harbor Contributions, then the "actual
contribution percentages" of all Highly Compensated Employees participating in
the Plan shall be reduced, and the excess contributions distributed, in
accordance with the provisions of Section 3.8(c) and applicable Treasury
regulations, so that there is no such multiple use.
(f) If the Committee determines that a reduction of Compensation
deferral elections made pursuant to Paragraphs (a), (b) and (c) above is
necessary to insure that the restrictions set forth in Paragraph (d) or (e)
above are met for any Plan Year, the Committee may reduce the elections of
affected Participants on a temporary and prospective basis in such manner as the
Committee shall determine.
(g) As soon as administratively feasible following the end of
each month, but no later than the time required by applicable law, the Employer
shall contribute to the Trust, as Before-Tax Contributions with respect to each
Participant, an amount equal to the amount of Compensation elected to be
deferred, pursuant to Paragraphs (a) and (b) above (as adjusted pursuant to
Paragraph (f) above), by such Participant during such month. Such contributions,
as well as the contributions made pursuant to Sections 3.2, 3.3, and 3.4 and
Section 21.6, shall be made without regard to current or accumulated profits of
the Employer. Notwithstanding the foregoing, the non-ESOP part of the Plan is
intended to qualify as a profit sharing plan for purposes of sections 401(a),
402, 412, and 417 of the Code.
3.2 EMPLOYER MATCHING CONTRIBUTIONS.
(a) For each calendar month, the Employer shall contribute to the
Trust, as Employer Matching Contributions, an amount that equals 100% of the
Before-Tax Contributions that were made pursuant to Section 3.1 on behalf of
each of the Participants during such month and that were not in excess of 6% of
each such Participant's Compensation for such month.
(b) In addition to the Employer Matching Contributions made
pursuant to Paragraph (a) above, for each Plan Year the Employer shall
contribute to the Trust, as Employer Matching Contributions, an amount equal to
the difference, if any, between (1) 100% of the Before-Tax Contributions that
were made pursuant to Section 3.1 on behalf of each of the Eligible Participants
during such Plan Year and that were not in excess of 6% of each such Eligible
Participant's Compensation for such Plan Year and (2) the Employer Matching
Contributions made pursuant to Paragraph (a) above for each such Eligible
Participant for such Plan Year. For purposes of this Paragraph, the term
"Eligible Participant" shall mean each Participant who was an Eligible Employee
on the last day of the applicable Plan Year.
3.3 EMPLOYER DISCRETIONARY CONTRIBUTIONS. For each Plan Year, the
Employer may contribute to the Trust, as an Employer Discretionary Contribution,
an additional amount as determined in its discretion.
III-2
3.4 EMPLOYER SAFE HARBOR CONTRIBUTIONS. In addition to the Employer
Matching Contributions made pursuant to Section 3.2 and the Employer
Discretionary Contribution made pursuant to Section 3.3, for each Plan Year, the
Employer, in its discretion, may contribute to the Trust as a "safe harbor
contribution" for such Plan Year the amounts necessary to cause the Plan to
satisfy the restrictions set forth in Section 3.1(e) (with respect to certain
restrictions on Before-Tax Contributions) and Section 3.5 (with respect to
certain restrictions on Employer Matching Contributions). Amounts contributed in
order to satisfy the restrictions set forth in Section 3.1(e) shall be
considered "qualified matching contributions" (within the meaning of Treasury
regulation Section 1.401(k)-1(g)(13)) for purposes of such Section, and amounts
contributed in order to satisfy the restrictions set forth in Section 3.5 shall
be considered Employer Matching Contributions for purposes of such Section. Any
amounts contributed pursuant to this Section shall be allocated in accordance
with Sections 4.2(e) and (f).
3.5 RESTRICTIONS ON EMPLOYER MATCHING CONTRIBUTIONS. In restriction of
the Employer Matching Contributions hereunder, it is specifically provided that
one of the "actual contribution percentage" tests set forth in section 401(m) of
the Code and the Treasury regulations thereunder must be met in each Plan Year.
Such testing shall utilize the current year testing method as such term is
defined in Internal Revenue Service Notice 98-1. The Committee may elect, in
accordance with applicable Treasury regulations, to treat Before-Tax
Contributions to the Plan as Employer Matching Contributions for purposes of
meeting this requirement.
3.6 RETURN OF CONTRIBUTIONS. Anything to the contrary herein
notwithstanding, the Employer's contributions to the Plan are contingent upon
the deductibility of such contributions under section 404 of the Code. To the
extent that a deduction for contributions is disallowed, such contributions
shall, upon the written demand of the Employer, be returned to the Employer by
the Trustee within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto, which net earnings shall be
treated as a forfeiture in accordance with Section 4.3. Moreover, if Employer
contributions are made under a mistake of fact, such contributions shall, upon
the written demand of the Employer, be returned to the Employer by the Trustee
within one year after the payment thereof, reduced by any net losses of the
Trust Fund attributable thereto but not increased by any net earnings of the
Trust Fund attributable thereto, which net earnings shall be treated as a
forfeiture in accordance with Section 4.3.
3.7 DISPOSITION OF EXCESS DEFERRALS AND EXCESS CONTRIBUTIONS.
(a) Anything to the contrary herein notwithstanding, any
Before-Tax Contributions to the Plan for a calendar year on behalf of a
Participant in excess of the limitations set forth in Section 3.1(d) and any
"excess deferrals" from other plans allocated to the Plan by such Participant no
later than March 1 of the next following calendar year within the meaning of,
and pursuant to the provisions of, section 402(g)(2) of the Code, shall be
distributed to such Participant not later than April 15 of the next following
calendar year.
(b) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Before-Tax Contributions made by the Employer on behalf
of Highly Compensated Employees exceeds the maximum amount of Before-Tax
Contributions permitted on behalf of such Highly Compensated Employees pursuant
to Section 3.1(e), an excess amount shall be
III-3
determined by reducing Before-Tax Contributions made on behalf of Highly
Compensated Employees in order of their highest actual deferral percentages in
accordance with section 401(k)(8)(B)(ii) of the Code and the Treasury
regulations thereunder. Once determined, such excess shall be distributed to
Highly Compensated Employees in order of the highest dollar amounts contributed
on behalf of such Highly Compensated Employees in accordance with section
401(k)(8)(C) of the Code and the Treasury regulations thereunder before the end
of the next following Plan Year.
(c) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Employer Matching Contributions allocated to the
Accounts of Highly Compensated Employees exceeds the maximum amount of such
Employer Matching Contributions permitted on behalf of such Highly Compensated
Employees pursuant to Section 3.5, an excess amount shall be determined by
reducing Employer Matching Contributions made on behalf of Highly Compensated
Employees in order of their highest contribution percentages in accordance with
section 401(m)(6)(B)(ii) of the Code and Treasury regulations thereunder. Once
determined, such excess shall be distributed to Highly Compensated Employees in
order of the highest dollar amounts contributed on behalf of such Highly
Compensated Employees in accordance with section 401(m)(6)(C) of the Code and
the Treasury regulations thereunder (or, if such excess contributions are
forfeitable, they shall be forfeited) before the end of the next following Plan
Year. Employer Matching Contributions shall be forfeited pursuant to this
Paragraph only if distribution of all vested Employer Matching Contributions is
insufficient to meet the requirements of this Paragraph. If vested Employer
Matching Contributions are distributed to a Participant and nonvested Employer
Matching Contributions remain credited to such Participant's Accounts, such
nonvested Employer Matching Contributions shall vest at the same rate as if such
distribution had not been made.
(d) In coordinating the disposition of excess deferrals and
excess contributions pursuant to this Section, such excess deferrals and excess
contributions shall be disposed of in the following order:
(1) First, excess Before-Tax Contributions that constitute
excess deferrals described in Paragraph (a) above that are not considered
in determining the amount of Employer Matching Contributions pursuant to
Section 3.2 shall be distributed;
(2) Next, excess Before-Tax Contributions that constitute
excess deferrals described in Paragraph (a) above that are considered in
determining the amount of Employer Matching Contributions pursuant to
Section 3.2 shall be distributed, and the Employer Matching Contributions
with respect to such Before-Tax Contributions shall be forfeited;
(3) Next, excess Before-Tax Contributions described in
Paragraph (b) above that are not considered in determining the amount of
Employer Matching Contributions pursuant to Section 3.2 shall be
distributed;
(4) Next, excess Before-Tax Contributions described in
Paragraph (b) above that are considered in determining the amount of
Employer Matching
III-4
Contributions pursuant to Section 3.2 shall be distributed, and the
Employer Matching Contributions with respect to such Before-Tax
Contributions shall be forfeited;
(5) Finally, excess Employer Matching Contributions
described in Paragraph (c) above shall be distributed (or, if forfeitable,
forfeited).
(e) Any distribution or forfeiture of excess deferrals or excess
contributions pursuant to the provisions of this Section shall be adjusted for
income or loss allocated thereto in the manner determined by the Committee in
accordance with any method permissible under applicable Treasury regulations.
Any forfeiture pursuant to the provisions of this Section shall be considered to
have occurred on the date which is 2 1/2 months after the end of the Plan Year.
3.8 ROLLOVER CONTRIBUTIONS.
(a) Qualified Rollover Contributions may be made to the Plan by
any Eligible Employee of amounts received by such Eligible Employee from certain
individual retirement accounts or annuities or from an employees' trust
described in section 401(a) of the Code, which is exempt from tax under section
501(a) of the Code, but only if any such Rollover Contribution is made pursuant
to and in accordance with applicable provisions of the Code and Treasury
regulations promulgated thereunder. A Rollover Contribution of amounts that are
"eligible rollover distributions" within the meaning of section 402(f)(2)(A) of
the Code may be made to the Plan irrespective of whether such eligible rollover
distribution was paid to the Eligible Employee or paid to the Plan as a "direct"
Rollover Contribution. A direct Rollover Contribution to the Plan may be
effectuated only by wire transfer directed to the Trustee or by issuance of a
check made payable to the Trustee, which is negotiable only by the Trustee and
which identifies the Eligible Employee for whose benefit the Rollover
Contribution is being made. Any Eligible Employee desiring to effect a Rollover
Contribution to the Plan must execute and file with the Committee the form
prescribed by the Committee for such purpose. The Committee may require as a
condition to accepting any Rollover Contribution that such Eligible Employee
furnish any evidence that the Committee in its discretion deems satisfactory to
establish that the proposed Rollover Contribution is in fact eligible for
rollover to the Plan and is made pursuant to and in accordance with applicable
provisions of the Code and Treasury regulations. All Rollover Contributions to
the Plan must be made in cash. A Rollover Contribution shall be credited to the
Rollover Contribution Account of the Eligible Employee for whose benefit such
Rollover Contribution is being made.
(b) An Eligible Employee who has made a Rollover Contribution in
accordance with this Section, but who has not otherwise become a Participant in
the Plan in accordance with Article II, shall become a Participant coincident
with such Rollover Contribution; provided, however, that such Participant shall
not have a right to defer Compensation or have Employer Contributions made on
his behalf until he has otherwise satisfied the requirements imposed by Article
II.
III-5
IV.
ALLOCATIONS AND LIMITATIONS
4.1 SUSPENDED AMOUNTS. All contributions, forfeitures, and the net
income (or net loss) of the Trust Fund shall be held in suspense until allocated
or applied as provided herein.
4.2 ALLOCATION OF CONTRIBUTIONS TO ACCOUNTS.
(a) Before-Tax Contributions made by the Employer on a
Participant's behalf for each month pursuant to Section 3.1 shall be allocated
to such Participant's Before-Tax Account.
(b) The Employer Matching Contributions pursuant to Section 3.2
shall be allocated to the Employer Matching Contribution Accounts of the
Participants for whom such contributions were made.
(c) The Employer Discretionary Contribution, if any, made
pursuant to Section 3.3 for a Plan Year shall be allocated to the Employer
Discretionary Contribution Accounts of the Participants who (1) were Eligible
Employees on the last day of such Plan Year or (2) terminated employment during
such Plan Year on or after Normal Retirement Date or by reason of total and
permanent disability (as defined in Section 7.2) or death. The allocation to
each such eligible Participant's Employer Discretionary Contribution Account
shall be that portion of such Employer Discretionary Contribution which is in
the same proportion that such Participant's Compensation for such Plan Year
bears to the total of all such Participants' Compensation for such Plan Year.
(d) The Employer's ESOP Contribution, if any, made pursuant to
Section 21.6 for a Plan Year shall be allocated to Participants' ESOP Accounts
in accordance with Section 21.6.
(e) The Employer Safe Harbor Contribution, if any, made pursuant
to Section 3.4 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.1(e) shall be allocated to the Before-Tax Accounts of Participants who
(1) received an allocation of Before-Tax Contributions for such Plan Year and
(2) were not Highly Compensated Employees for such Plan Year (each such
Participant individually referred to as an "Eligible Participant" for purposes
of this Paragraph). Such allocation shall be made, first, to the Before-Tax
Account of the Eligible Participant who received the least amount of
Compensation for such Plan Year until the limitation set forth in Section 4.5
has been reached as to such Eligible Participant, then to the Before-Tax Account
of the Eligible Participant who received the next smallest amount of
Compensation for such Plan Year until the limitation set forth in Section 4.5
has been reached as to such Eligible Participant, and continuing in such manner
until the Employer Safe Harbor Contribution for such Plan Year has been
completely allocated or the limitation set forth in Section 4.5 has been reached
as to all Eligible Participants. Any remaining Employer Safe Harbor Contribution
for such Plan Year shall be allocated among the Before-Tax Accounts of all
Participants who were Eligible Employees during such Plan Year, with the
allocation to each
IV-1
such Participant's Before-Tax Account being the portion of such remaining
Employer Safe Harbor Contribution which is in the same proportion that such
Participant's Compensation for such Plan Year bears to the total of all such
Participants' Compensation for such Plan Year.
(f) The Employer Safe Harbor Contribution, if any, made pursuant
to Section 3.4 for a Plan Year in order to satisfy the restrictions set forth in
Section 3.5 shall be allocated to the Employer Matching Contribution Accounts of
Participants who (1) received an allocation of Employer Matching Contributions
for such Plan Year and (2) were not Highly Compensated Employees for such Plan
Year (each such Participant individually referred to as an "Eligible
Participant" for purposes of this Paragraph). Such allocation shall be made,
first, to the Employer Matching Contribution Account of the Eligible Participant
who received the least amount of Compensation for such Plan Year until the
limitation set forth in Section 4.5 has been reached as to such Eligible
Participant, then to the Employer Matching Contribution Account of the Eligible
Participant who received the next smallest amount of Compensation for such Plan
Year until the limitation set forth in Section 4.5 has been reached as to such
Eligible Participant, and continuing in such manner until the Employer Safe
Harbor Contribution for such Plan Year has been completely allocated or the
limitation set forth in Section 4.5 has been reached as to all Eligible
Participants. Any remaining Employer Safe Harbor Contribution for such Plan Year
shall be allocated among the Employer Matching Contribution Accounts of all
Participants who were Eligible Employees during such Plan Year, with the
allocation to each such Participant's Employer Matching Contribution Account
being the portion of such remaining Employer Safe Harbor Contribution which is
in the same proportion that such Participant's Compensation for such Plan Year
bears to the total of all such Participants' Compensation for such Plan Year.
(g) If an Employer Safe Harbor Contribution is made in order to
satisfy the restrictions set forth in both Section 3.1(e) and Section 3.5 for
the same Plan Year, the Employer Safe Harbor Contribution made in order to
satisfy the restrictions set forth in Section 3.1(e) shall be allocated
(pursuant to Paragraph (e) above) prior to allocating the Employer Safe Harbor
Contribution made in order to satisfy the restrictions set forth in Section 3.5
(pursuant to Paragraph (f) above). In determining the application of the
limitations set forth in Section 4.5 to the allocations of Employer Safe Harbor
Contributions, all Annual Additions (as such term is defined in Section 4.5) to
a Participant's Accounts other than Employer Safe Harbor Contributions shall be
considered allocated prior to Employer Safe Harbor Contributions.
(h) All contributions to the Plan shall be considered allocated
to Participants' Accounts no later than the last day of the Plan Year for which
they were made, as determined pursuant to Article III and Article XXI, except
that, for purposes of Section 4.4, contributions shall be considered allocated
to Participants' Accounts when received by the Trustee.
4.3 APPLICATION/ALLOCATION OF FORFEITURES. Any amounts that are
forfeited from Participants' Non-ESOP Accounts under any provision hereof during
a Plan Year shall be applied in the manner determined by the Committee to reduce
Employer Matching Contributions and/or to pay expenses incident to the
administration of the Plan and Trust. Prior to such application, forfeited
amounts shall be invested in the Investment Fund or Funds designated from time
to time by the Committee. Any amounts that are forfeited from Participants' ESOP
Accounts under any provision hereof during a Plan Year shall be allocated as of
the last day of such Plan Year in accordance with Section 21.6. Prior to such
allocation, such forfeited amounts
IV-2
held in the suspense account shall receive allocations of net income (or net
loss) pursuant to Section 4.4.
4.4 VALUATION OF ACCOUNTS. All amounts contributed to the Trust Fund
shall be invested as soon as administratively feasible following their receipt
by the Trustee, and the balance of each Account shall reflect the result of
daily pricing of the assets in which such Account is invested from the time of
receipt by the Trustee until the time of distribution.
4.5 LIMITATIONS AND CORRECTIONS.
(a) For purposes of this Section, the following terms and phrases
shall have these respective meanings:
(1) "Annual Additions" of a Participant for any Limitation
Year shall mean the total of (A) the Employer Contributions, Before-Tax
Contributions, and forfeitures (excluding forfeitures of Financed Stock (as
such term is defined in Section 21.3(g)) to the extent permitted under
section 415(c)(6) of the Code), if any, allocated to such Participant's
Accounts for such year, (B) Participant's contributions, if any, (excluding
any Rollover Contributions) for such year, and (C) amounts referred to in
sections 415(l)(1) and 419A(d)(2) of the Code.
(2) "415 Compensation" shall mean the total of all amounts
paid by the Employer to or for the benefit of a Participant for services
rendered or labor performed for the Employer which are required to be
reported on the Participant's federal income tax withholding statement or
statements (Form W-2 or its subsequent equivalent), subject to the
following adjustments and limitations:
(A) The following shall be included:
(i) Elective deferrals (as defined in section
402(g) (3) of the Code) from compensation to be paid by the
Employer to the Participant;
(ii) Any amount which is contributed or deferred by
the Employer at the election of the Participant and which is not
includable in the gross income of the Participant by reason of
section 125 or 457 of the Code; and
(iii) Any amounts that are not includable in the
gross income of a Participant under a salary reduction agreement
by reason of the application of section 132(f) of the Code.
(B) The 415 Compensation of any Participant taken into
account for purposes of the Plan shall be limited to $170,000 for any
Plan Year with such limitation to be:
IV-3
(i) Adjusted automatically to reflect any
amendments to section 401(a)(17) of the Code and any
cost-of-living increases authorized by section 401(a)(17) of the
Code; and
(ii) Prorated for a Plan Year of less than twelve
months and to the extent otherwise required by applicable law.
(3) "Limitation Year" shall mean the Plan Year.
(4) "Maximum Annual Additions" of a Participant for any
Limitation Year shall mean the lesser of (A) $35,000 (with such amount to
be adjusted automatically to reflect any cost-of-living adjustment
authorized by section 415(d) of the Code) or (B) 25% of such Participant's
415 Compensation during such Limitation Year, except that the limitation in
this Clause (B) shall not apply to any contribution for medical benefits
(within the meaning of section 419A(f)(2) of the Code) after separation
from service with the Employer or a Controlled Entity that is otherwise
treated as an Annual Addition or to any amount otherwise treated as an
Annual Addition under section 415(l)(1) of the Code.
(b) Contrary Plan provisions notwithstanding, in no event shall
the Annual Additions credited to a Participant's Accounts for any Limitation
Year exceed the Maximum Annual Additions for such Participant for such year. If
as a result of a reasonable error in estimating a Participant's compensation, a
reasonable error in determining the amount of elective deferrals (within the
meaning of section 402(g)(3) of the Code) that may be made with respect to any
individual under the limits of section 415 of the Code, or because of other
limited facts and circumstances, the Annual Additions that would be credited to
a Participant's Accounts for a Limitation Year would nonetheless exceed the
Maximum Annual Additions for such Participant for such year, the excess Annual
Additions which, but for this Section, would have been allocated to such
Participant's Accounts shall be disposed of as follows:
(1) First, any such excess Annual Additions in the form of
Employer Discretionary Contributions shall, to the extent such amounts
would otherwise have been allocated to such Participant's Accounts, be
treated as a forfeiture;
(2) Next, any such excess Annual Additions in the form of
ESOP Contributions shall, to the extent such amounts would otherwise have
been allocated to such Participant's Accounts, be treated as a forfeiture;
(3) Next, any such excess Annual Additions in the form of
Before-Tax Contributions on behalf of such Participant that would not have
been considered in determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be distributed to such
Participant, adjusted for income or loss allocated thereto;
(4) Finally, any such excess Annual Additions in the form of
Before-Tax Contributions on behalf of such Participant that would have been
considered in determining the amount of Employer Matching Contributions
pursuant to Section 3.2 shall be distributed to such Participant, adjusted
for income or loss allocated thereto, and the Employer Matching
Contributions that would have been allocated to such
IV-4
Participant's Accounts based upon such distributed Before-Tax Contributions
shall be treated as a forfeiture.
(c) For purposes of determining whether the Annual Additions
under this Plan exceed the limitations herein provided, all defined contribution
plans of the Employer are to be treated as one defined contribution plan. In
addition, all defined contribution plans of Controlled Entities shall be
aggregated for this purpose. For purposes of this Section only, a "Controlled
Entity" (other than an affiliated service group member within the meaning of
section 414(m) of the Code) shall be determined by application of a more than
50% control standard in lieu of an 80% control standard. If the Annual Additions
credited to a Participant's Accounts for any Limitation Year under this Plan
plus the additions credited on his behalf under other defined contribution plans
required to be aggregated pursuant to this Paragraph would exceed the Maximum
Annual Additions for such Participant for such Limitation Year, the Annual
Additions under this Plan shall be reduced to the extent possible prior to any
reductions of additions under such other plan or plans.
(d) If the Committee determines that a reduction of Compensation
deferral elections pursuant to Section 3.1 is necessary to insure that the
limitations set forth in this Section are met for any Plan Year, the Committee
may reduce the elections of affected Participants on a temporary and prospective
basis in such manner as the Committee shall determine.
IV-5
V.
INVESTMENT OF NON-ESOP ACCOUNTS
5.1 INVESTMENT OF NON-ESOP ACCOUNTS.
(a) Each Participant shall designate, in accordance with the
procedures established from time to time by the Committee, the manner in which
the amounts allocated to his Non-ESOP Accounts shall be invested from among the
Investment Funds made available from time to time by the Committee. A
Participant may designate one of such Investment Funds for all the amounts
allocated to his Non-ESOP Accounts or he may split the investment of the amounts
allocated to his Non-ESOP Accounts between such Investment Funds in such
increments as the Committee may prescribe. If a Participant fails to make a
designation, then his Non-ESOP Accounts shall be invested in the Investment Fund
or Funds designated by the Committee from time to time in a uniform and
nondiscriminatory manner.
(b) A Participant may change his investment designation for
future contributions to be allocated to his Non-ESOP Accounts. Any such change
shall be made in accordance with the procedures established by the Committee,
and the frequency of such changes may be limited by the Committee.
(c) A Participant may elect to convert his investment designation
with respect to the amounts already allocated to his Non-ESOP Accounts. Any such
conversion shall be made in accordance with the procedures established by the
Committee, and the frequency of such conversions may be limited by the
Committee.
5.2 PASS-THROUGH VOTING OF COMPANY STOCK.
(a) To the extent permitted by section 404(a) of the Act, a
Participant may direct the voting of the shares of Company Stock attributable to
his Non-ESOP Accounts in accordance with the provisions of the Trust Agreement.
(b) To the extent permitted by section 404(a) of the Act, if a
"cash tender offer" or "exchange offer" for shares of Company Stock is made, a
Participant may direct the shares of Company Stock attributable to his Non-ESOP
Accounts to be tendered or exchanged by the Trustee pursuant to such "cash
tender offer" or "exchange offer" in accordance with the provisions of the Trust
Agreement.
5.3 STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS. No Participant
shall have any right to request, direct, or demand that the Committee or the
Trustee exercise in his behalf rights or privileges to acquire, convert, or
exchange Company Stock or other securities. The Trustee shall exercise or sell
any such rights or privileges as directed by the Committee. Company Stock
received by the Trustee by reason of a stock split, stock dividend, or
recapitalization shall be appropriately allocated to the Accounts of each
affected Participant.
V-1
VI.
RETIREMENT BENEFITS
6.1 RETIREMENT BENEFITS. A Participant who terminates his employment on or
after his Normal Retirement Date shall be entitled to a retirement benefit,
payable at the time and in the form provided in Article X, equal to the value of
his Accounts on his Benefit Commencement Date. Any contribution or forfeitures
allocable to a Participant's Accounts after his Benefit Commencement Date shall
be distributed, if his benefit was paid in a lump sum, or used to increase his
payments, if his benefit is being paid on a periodic basis, as soon as
administratively feasible after the date that such contribution is paid to the
Trust Fund.
VI-1
VII.
DISABILITY BENEFITS
7.1 DISABILITY BENEFITS. In the event a Participant's employment is
terminated, and such Participant is totally and permanently disabled, as
determined pursuant to Section 7.2, such Participant shall be entitled to a
disability benefit, payable at the time and in the form provided in Article X,
equal to the value of his Accounts on his Benefit Commencement Date. Any
contribution or forfeitures allocable to a Participant's Accounts after his
Benefit Commencement Date shall be distributed, if his benefit was paid in a
lump sum, or used to increase his payments, if his benefit is being paid on a
periodic basis, as soon as administratively feasible after the date that such
contribution is paid to the Trust Fund.
7.2 TOTAL AND PERMANENT DISABILITY DETERMINED. A Participant shall be
considered totally and permanently disabled if the Committee determines, based
on a written medical opinion (unless waived by the Committee as unnecessary),
that such Participant is permanently incapable of performing his job for
physical or mental reasons.
VII-1
VIII.
PRE-RETIREMENT TERMINATION BENEFITS AND DETERMINATION OF VESTED INTEREST
8.1 NO BENEFITS UNLESS HEREIN SET FORTH. Except as set forth in this
Article, upon termination of employment of a Participant prior to his Normal
Retirement Date for any reason other than total and permanent disability (as
defined in Section 7.2) or death, such Participant shall acquire no right to any
benefit from the Plan or the Trust Fund.
8.2 PRE-RETIREMENT TERMINATION BENEFIT. Each Participant whose employment
is terminated prior to his Normal Retirement Date for any reason other than
total and permanent disability (as defined in Section 7.2) or death shall be
entitled to a termination benefit, payable at the time and in the form provided
in Article X, equal to his Vested Interest in the value of his Accounts on his
Benefit Commencement Date. A Participant's Vested Interest in any contribution
or forfeitures allocable to his Accounts after his Benefit Commencement Date
shall be distributed, if his benefit was paid in a lump sum, or used to increase
his payments, if his benefit is being paid on a periodic basis, as soon as
administratively feasible after the date that such contribution is paid to the
Trust Fund.
8.3 DETERMINATION OF VESTED INTEREST.
(a) A Participant shall have a 100% Vested Interest in his Before-Tax
Account, After-Tax Account, and Rollover Contribution Account at all times.
(b) A Participant's Vested Interest in his Employer Contribution
Accounts shall be determined by such Participant's years of Vesting Service in
accordance with the following schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
------------------------ ---------------
Less than 1 year 0%
1 year 34%
2 years 67%
3 years or more 100%
(c) Paragraph (b) above notwithstanding, a Participant who was a Member
(as such term was defined in the Plan) as of March 30, 1999, or a Participant
who was a participant in a Merged Plan as of March 30, 1999, shall have a 100%
Vested Interest in his Employer Contribution Accounts.
(d) Paragraph (b) above notwithstanding, a Participant shall have a 100%
Vested Interest in his Employer Contribution Accounts (1) upon the attainment of
his Normal Retirement Date while employed by the Employer or a Controlled
Entity, (2) upon a determination by the Committee pursuant to Section 7.2 that
such Participant is totally and permanently disabled (as defined in Section
7.2), (3) upon the death of such Participant while an
VIII-1
Employee, or (4) if such Participant is an affected Participant, the occurrence
of an event described in, under the conditions set forth in, Section 17.2.
(e) Paragraph (b) above notwithstanding, if a Participant shall cease to
be employed by reason of a reduction in force, as hereinafter described, such
Participant shall then have a 100% Vested Interest in his Employer Contribution
Accounts. The employment of a Participant shall be considered as having been
terminated because of a "reduction in force" if such termination is the result
of a manpower reduction or reorganization by the Employer.
8.4 CREDITING OF VESTING SERVICE.
(a) For the period preceding the Effective Date, subject to the
provisions of Section 8.5, an individual shall be credited with Vesting Service
in an amount equal to all service credited to him for vesting purposes under the
Plan as it existed on the day prior to the Effective Date.
(b) For the Plan Year including the Effective Date and all Plan Years
thereafter, subject to the provisions of Section 8.5, the completion of 1,000 or
more Hours of Service during any Plan Year shall constitute one year of Vesting
Service.
8.5 FORFEITURE OF VESTING SERVICE.
(a) In the case of an individual who terminates employment at a time
when he has a 0% Vested Interest in his Employer Contribution Accounts and who
then incurs a number of consecutive One-Year Breaks-in-Service that equals or
exceeds the greater of five years or his aggregate number of years of Vesting
Service completed before such One-Year Breaks-in-Service, such individual's
years of Vesting Service completed before such One-Year Breaks-in-Service shall
be forfeited and completely disregarded in determining his years of Vesting
Service.
(b) In the case of a Participant who terminates employment with the
Employer at a time when he has a Vested Interest of more than 0% but less than
100% and who then incurs five or more consecutive One-Year Breaks-in-Service,
such Participant's years of Vesting Service completed after such One-Year
Breaks-in-Service shall be disregarded for purposes of determining such
Participant's Vested Interest in any Plan benefits derived from Employer
Contributions made on his behalf before such One-Year Breaks-in-Service, but his
years of Vesting Service completed before such One-Year Breaks-in-Service shall
not be disregarded in determining his Vested Interest in any Plan benefits
derived from Employer Contributions made on his behalf after such One-Year
Breaks-in-Service.
(c) A Participant who terminates employment with the Employer at a time
when he has a 100% Vested Interest in his Employer Contribution Accounts shall
not forfeit any of his Vesting Service for purposes of determining such
Participant's Vested Interest in any Plan benefits derived from Employer
Contributions made on his behalf.
VIII-2
8.6 FORFEITURES OF NONVESTED ACCOUNT BALANCE.
(a) With respect to a Participant who terminates employment with the
Employer with a Vested Interest in his Employer Contribution Accounts that is
less than 100% and either is not entitled to a distribution from the Plan or
receives a distribution from the Plan of the balance of his Vested Interest in
his Accounts in the form of a lump sum distribution by the close of the second
Plan Year following the Plan Year in which his employment is terminated, the
nonvested portion of such terminated Participant's Employer Contribution
Accounts as of his Benefit Commencement Date shall become a forfeiture as of his
Benefit Commencement Date (or as of his date of termination of employment if no
amount is payable from the Trust Fund on behalf of such Participant with such
Participant being considered to have received a distribution of zero dollars on
his date of termination of employment).
(b) With respect to a Participant who terminates employment with the
Employer with a Vested Interest in his Employer Contribution Accounts less than
100% and who is not otherwise subject to the forfeiture provisions of Paragraph
(a) above (or Section 8.8 below), the nonvested portion of his Employer
Contribution Accounts shall be forfeited as of the earlier of (1) the last day
of the Plan Year during which the terminated Participant incurs his fifth
consecutive One-Year Break-in-Service or (2) the date of the terminated
Participant's death.
8.7 RESTORATION OF FORFEITED ACCOUNT BALANCE. In the event that the
nonvested portion of a terminated Participant's Employer Contribution Accounts
becomes a forfeiture pursuant to Section 8.6, the terminated Participant shall,
upon subsequent reemployment with the Employer prior to incurring five
consecutive One-Year Breaks-in-Service, have the forfeited amount restored to
such Participant's Employer Contribution Accounts, unadjusted by any subsequent
gains or losses of the Trust Fund; provided, however, that such restoration
shall be made only if such Participant repays in cash an amount equal to the
amount so distributed to him pursuant to Section 8.6 within five years from the
date the Participant is reemployed; provided, further, that such Participant's
repayment of amounts distributed to him from his Before-Tax Account and his
After-Tax Account shall be limited to the portion thereof that was attributable
to contributions with respect to which the Employer made Employer Matching
Contributions. A reemployed Participant who was not entitled to a distribution
from the Plan on his date of termination of employment shall be considered to
have repaid a distribution of zero dollars on the date of his reemployment. Any
such restoration shall be made as soon as administratively feasible following
the date of repayment. Notwithstanding anything to the contrary in the Plan,
forfeited amounts to be restored by the Employer pursuant to this Section shall
be charged against and deducted from forfeitures for the Plan Year in which such
amounts are restored that would otherwise be available to be applied pursuant to
Section 4.3 or for allocation to other Participants in accordance with Section
21.6, as applicable. If such forfeitures otherwise available are not sufficient
to provide such restoration, the portion of such restoration not provided by
forfeitures shall be charged against and deducted from Employer Discretionary
Contributions otherwise available for allocation to other Participants in
accordance with Section 4.2(c), and any additional amount needed to restore such
forfeited amounts shall be a minimum required Employer Discretionary
Contribution.
8.8 SPECIAL FORMULA FOR DETERMINING VESTED INTEREST FOR PARTIAL ACCOUNTS.
With respect to a Participant whose Vested Interest in his Employer Contribution
Accounts is less than
VIII-3
100% and who makes a withdrawal from or receives a termination distribution from
his Employer Contribution Accounts other than a lump sum distribution by the
close of the second Plan Year following the Plan Year in which his employment is
terminated, any amount remaining in his Employer Contribution Accounts shall
continue to be maintained as a separate account. At any relevant time, such
Participant's nonforfeitable portion of his separate account shall be determined
in accordance with the following formula:
X=P(AB + D) - D
For purposes of applying the formula: X is the nonforfeitable portion of such
separate account at the relevant time; P is the Participant's Vested Interest in
his Employer Contribution Accounts at the relevant time; AB is the balance of
such separate account at the relevant time; and D is the amount of the
withdrawal or distribution. For all other purposes of the Plan, a Participant's
separate account shall be treated as an Employer Contribution Accounts. Upon his
incurring five consecutive One-Year Breaks-in-Service, the forfeitable portion
of a Participant's separate account and Employer Contribution Accounts shall be
forfeited as of the end of the Plan Year during which the Participant incurred
his fifth such consecutive One-Year Break-in-Service if not forfeited earlier
pursuant to the provisions of Section 8.6.
VIII-4
IX.
DEATH BENEFITS
9.1 DEATH BENEFITS. Upon the death of a Participant while an Employee, the
Participant's designated beneficiary shall be entitled to a death benefit,
payable at the time and in the form provided in Article X, equal to the value of
the Participant's Accounts on his Benefit Commencement Date. Any contribution
allocable or forfeitures to a Participant's Accounts after his Benefit
Commencement Date shall be distributed, if the death benefit was paid in a lump
sum, or used to increase payments, if the death benefit is being paid on a
periodic basis, as soon as administratively feasible after the date that such
contribution is paid to the Trust Fund.
9.2 DESIGNATION OF BENEFICIARIES.
(a) Each Participant shall have the right to designate the beneficiary
or beneficiaries to receive payment of his benefit in the event of his death.
Each such designation shall be made by executing the beneficiary designation
form prescribed by the Committee and filing such form with the Committee. Any
such designation may be changed at any time by such Participant by execution and
filing of a new designation in accordance with this Section. Notwithstanding the
foregoing, if a Participant who is married on the date of his death has
designated an individual or entity other than his surviving spouse as his
beneficiary, such designation shall not be effective unless (1) such surviving
spouse has consented thereto in writing and such consent (A) acknowledges the
effect of such specific designation, (B) either consents to the specific
designated beneficiary (which designation may not subsequently be changed by the
Participant without spousal consent) or expressly permits such designation by
the Participant without the requirement of further consent by such spouse, and
(C) is witnessed by a Plan representative (other than the Participant) or a
notary public or (2) the consent of such spouse cannot be obtained because such
spouse cannot be located or because of other circumstances described by
applicable Treasury regulations. Any such consent by such surviving spouse shall
be irrevocable.
(b) If no beneficiary designation is on file with the Committee at the
time of the death of the Participant or if such designation is not effective for
any reason as determined by the Committee, the designated beneficiary or
beneficiaries to receive such death benefit shall be as follows:
(1) If a Participant leaves a surviving spouse, his designated
beneficiary shall be such surviving spouse; and
(2) If a Participant leaves no surviving spouse, his designated
beneficiary shall be (A) such Participant's executor or administrator or
(B) his heirs at law if there is no administration of such Participant's
estate.
(c) Notwithstanding the preceding provisions of this Section and to the
extent not prohibited by state or federal law, if a Participant is divorced from
his spouse and at the time of his death is not remarried to the person from whom
he was divorced, any designation of such
IX-1
divorced spouse as his beneficiary under the Plan filed prior to the divorce
shall be null and void unless the contrary is expressly stated in writing filed
with the Committee by the Participant. The interest of such divorced spouse
failing hereunder shall vest in the persons specified in Paragraph (b) above as
if such divorced spouse did not survive the Participant.
IX-2
X.
TIME AND FORM OF PAYMENT OF BENEFITS
10.1 DETERMINATION OF BENEFIT COMMENCEMENT DATE.
(a) Subject to the provisions of the remaining Paragraphs of this
Section, a Participant's Benefit Commencement Date shall be the date that is as
soon as administratively feasible after the date the Participant or his
beneficiary becomes entitled to a benefit pursuant to Article VI, VII, VIII, or
IX, unless the Participant has been reemployed by the Employer or a Controlled
Entity before such potential Benefit Commencement Date, but a Participant's
Benefit Commencement Date shall be, if applicable, no earlier than the
expiration of the seven-day period that begins the day after the information
required to be furnished pursuant to Section 10.2(d) has been furnished to the
Participant.
(b) Unless (1) the Participant has attained age sixty-five or died or
(2) the Participant consents to a distribution pursuant to Paragraph (a) within
the ninety-day period ending on the date payment of his benefit hereunder is to
commence pursuant to Paragraph (a), the Participant's Benefit Commencement Date
shall be deferred to the date which is as soon as administratively feasible
after the earlier of the date the Participant attains age sixty-five or the
Participant's date of death, or such earlier date as the Participant may elect
by written notice to the Committee prior to such date. The Committee shall
furnish information pertinent to his consent to each Participant no less than
thirty days (unless such thirty-day period is waived by an affirmative election
in accordance with applicable Treasury regulations) and no more than ninety days
before his Benefit Commencement Date, and the furnished information shall
include a general description of the material features of, and an explanation of
the relative values of, the alternative forms of benefit available under the
Plan and must inform the Participant of his right to defer his Benefit
Commencement Date and of his Direct Rollover right pursuant to Section 10.5
below, if applicable.
(c) A Participant's Benefit Commencement Date shall in no event be later
than the sixtieth day following the close of the Plan Year during which such
Participant attains, or would have attained, his Normal Retirement Date or, if
later, terminates his employment with the Employer and all Controlled Entities.
(d) A Participant's Benefit Commencement Date shall be in compliance
with the provisions of section 401(a)(9) of the Code and applicable Treasury
regulations thereunder and shall in no event be later than:
(1) April 1 of the calendar year following the later of (A) the
calendar year in which such Participant attains the age of seventy and
one-half or (B) the calendar year in which such Participant terminates
his employment with the Employer and all Controlled Entities (provided,
however, that clause (B) of this sentence shall not apply in the case of
a Participant who is a "five-percent owner" (as defined in section 416
of the Code) with respect to the Plan Year ending in the calendar year
in which such Participant attains the age of seventy and one-half); and
X-1
(2) In the case of a benefit payable pursuant to Article IX, (A)
if payable to other than the Participant's spouse, the last day of the
one-year period following the death of such Participant or (B) if
payable to the Participant's spouse, after the date upon which such
Participant would have attained the age of seventy and one-half, unless
such surviving spouse dies before payments commence, in which case the
Benefit Commencement Date may not be deferred beyond the last day of the
one-year period following the death of such surviving spouse.
The provisions of this Section notwithstanding, a Participant may not elect to
defer the receipt of his benefit hereunder to the extent that such deferral
creates a death benefit that is more than incidental within the meaning of
section 401(a)(9)(G) of the Code and applicable Treasury regulations thereunder.
(e) Subject to the provisions of Paragraph (d), a Participant's Benefit
Commencement Date shall not occur unless the Article VI, VII, VIII, or IX event
entitling the Participant (or his beneficiary) to a benefit constitutes a
distributable event described in section 401(k)(2)(B) of the Code and shall not
occur while the Participant is employed by the Employer or any Controlled Entity
(irrespective of whether the Participant has become entitled to a distribution
of his benefit pursuant to Article VI, VII, VIII, or IX).
(f) Paragraphs (a), (b), and (c) above notwithstanding, but subject to
the provisions of Paragraph (d) above, a Participant and the beneficiary of a
Participant who dies prior to his Benefit Commencement Date, other than a
Participant whose Vested Interest in his Accounts is not in excess of $5,000,
must file a claim for benefits in the manner prescribed by the Committee before
payment of his benefits will be made.
10.2 STANDARD AND ALTERNATIVE FORMS OF NON-ESOP BENEFIT FOR PARTICIPANTS.
(a) For purposes of Article VI, VII, or VIII, the non-ESOP benefit of
any Participant shall be paid in one lump sum payment. Prior to April 1, 2001 a
Participant may, however, elect to have his non-ESOP benefit paid in any
alternative form described in Paragraph (e) below. On and after April 1, 2001,
the standard form of non-ESOP benefit described in Paragraph (b) below and the
alternative forms of benefit described in Paragraph (e) below shall not be
available under the Plan. If a Participant desires to choose an annuity form of
distribution pursuant to Paragraph (e) below, then the following provisions of
this Section shall be applicable to such Participant (including, without
limitation, the standard forms of benefit provided for in Paragraph (b) below
and the election and spousal consent requirements of this Section).
(b) If a Participant desires to choose an annuity form of distribution
pursuant to Paragraph (e) below, then for purposes of Article VI, VII, or VIII,
the standard non-ESOP benefit for any such Participant who is married on his
Benefit Commencement Date shall be a joint and survivor annuity. Such joint and
survivor annuity shall be a commercial annuity which is payable for the life of
the Participant with a survivor annuity for the life of the Participant's
Eligible Surviving Spouse which shall be one-half of the amount of the annuity
payable during the joint lives of the Participant and the Participant's Eligible
Surviving Spouse. The standard non-ESOP benefit for any such Participant who is
not married on his Benefit Commencement Date shall be a commercial annuity which
is payable for the life of the Participant.
X-2
(c) Any Participant who would otherwise receive the standard non-ESOP
benefit may elect not to take his benefit in such form by executing the form
prescribed by the Committee for such election during the election period
described in Paragraph (d) below. Any election may be revoked and subsequent
elections may be made or revoked at any time during such election period.
Notwithstanding the foregoing, an election by a married Participant not to
receive the standard non-ESOP benefit as provided in Paragraph (b) above shall
not be effective unless (1) the Eligible Surviving Spouse has consented thereto
in writing (including consent to the specific designated beneficiary to receive
payments following the Participant's death or to the specific benefit form
elected, which designation or election may not subsequently be changed by the
Participant without spousal consent) and such consent acknowledges the effect of
such election and is witnessed by a Plan representative (other than the
Participant) or a notary public or (2) the consent of such spouse cannot be
obtained because the Eligible Surviving Spouse cannot be located or because of
other circumstances described by applicable Treasury regulations. Any such
consent by such Eligible Surviving Spouse shall be irrevocable.
(d) The Committee shall furnish certain information, pertinent to the
Paragraph (c) election, to each Participant no less than thirty days (unless
such thirty-day period is waived by an affirmative election in accordance with
applicable Treasury regulations) and no more than ninety days before his Benefit
Commencement Date. The furnished information shall include an explanation of (1)
the terms and conditions of the standard non-ESOP benefit, (2) the Participant's
right to elect to waive the standard non-ESOP benefit and the effect of such
election, (3) the rights of the Participant's Eligible Surviving Spouse, if any,
(4) the right to revoke such election and the effect of such revocation, (5) a
general description of the eligibility conditions and other material features of
the alternative forms of benefit available pursuant to Paragraph (d) below, and
(6) sufficient additional information to explain the relative values of such
alternative forms of benefit. The period of time during which a Participant may
make or revoke such election shall be the ninety-day period ending on such
Participant's Benefit Commencement Date provided that such election may also be
revoked at any time prior to the expiration of the seven-day period that begins
the day after the information required to be furnished pursuant to this
Paragraph has been furnished to the Participant.
(e) For purposes of Article VI, VII, or VIII, the non-ESOP benefit for
any Participant who has elected not to receive the standard non-ESOP benefit
provided for in Paragraph (b) above shall be paid in one of the following
alternative forms to be selected by the Participant or, in the absence of such
election, by the Committee; provided, however, that the period and method of
payment of any such form shall be in compliance with the provisions of section
401(a)(9) of the Code and applicable Treasury regulations thereunder:
(1) A single life annuity for the life of the Participant.
(2) An annuity for the life of the Participant with a survivor
annuity for the life of any person designated by the Participant which
shall be 50% of the amount of the annuity payable during the joint lives
of the Participant and such person.
(3) An annuity for a term certain of either 5, 10 or 15 years
and continuous for the life of the Participant if he survives such term
certain. In the event of such Participant's death prior to the end of
such term certain, the payments for the
X-3
remaining period of such term certain shall be made to such Participant's
designated beneficiary.
(4) A single life annuity for the life of the Participant and,
in the event of such Participant's death before the total annuity
payments equal the Participant's Vested Interest in his Non-ESOP
Accounts as of his Benefit Commencement Date, continuing payments to
such Participant's designated beneficiary until an amount equal to such
Vested Interest is paid.
(5) An annuity for the life of the Participant with a survivor
annuity for the life of any person designated by the Participant which
shall be either 50%, 66-2/3%, or 100% of the amount of the annuity
payable during the joint lives of the Participant and such designated
person and, in the event of the death of such Participant and such
designated person before the total annuity payments equal the
Participant's Vested Interest in his Non-ESOP Accounts as of his Benefit
Commencement Date, continuing payments to another beneficiary designated
by such Participant until an amount equal to such Vested Interest is
paid.
(6) An annuity for the joint lives of the Participant and any
person designated by the Participant.
(7) An annuity providing for monthly payments for any term
certain of a number of months that is not less than sixty months or more
than the life expectancy of the Participant and the designated
beneficiary as of the Participant's Benefit Commencement Date to
Participant or, in the event of such Participant's death before the end
of such term certain, to his designated beneficiary.
(8) A series of flexible installments in amounts chosen by the
Participant each year, with the Participant's remaining Vested Interest
in the balance of his Non-ESOP Accounts at the time of his death, if
any, paid to his designated beneficiary paid in one lump sum payment. In
the event a Participant elects this form of benefit and a minimum
distribution is required in accordance with the provisions of section
401(a)(9) of the Code and applicable Treasury regulations for any
calendar year, such minimum distribution shall be determined and
distributed in accordance with such provisions and, for purposes of such
determination, life expectancies shall be recalculated. A Participant
who elects this form of benefit may elect an alternative form of benefit
(subject to the provisions of this Section) at any time.
(9) A portion paid in a lump sum payment at the time determined
by such Participant, with the remainder paid in a lump sum payment at a
later time determined by such Participant or, in the event of such
Participant's death, to his designated beneficiary.
(f) If a Participant, who terminated his employment under circumstances
such that he was entitled to a benefit pursuant to Article VI, VII, or VIII,
dies prior to his Benefit Commencement Date, the amount of the benefit to which
he was entitled shall be paid pursuant to Section 10.3 just as if such
Participant had died while employed by the Employer except that
X-4
his Vested Interest shall be determined pursuant to Article VI, VII, or VIII,
whichever is applicable. Notwithstanding the foregoing, if a Participant who is
married and who has elected an annuity form of distribution pursuant to Section
10.2(e) above dies prior to the purchase of any annuity contract, his benefit
shall be distributed to his Eligible Surviving Spouse (and any beneficiary
designation or other election to the contrary shall be null and void) in the
form of a commercial annuity contract providing for payments for the life of
such Eligible Surviving Spouse unless such Eligible Surviving Spouse elects an
alternative form of benefit pursuant to Section 10.3.
10.3 STANDARD AND ALTERNATIVE FORMS OF NON-ESOP DEATH BENEFIT. Prior to
April 1, 2001, and subject to the provisions of Section 10.2(f), for purposes of
Article IX, the non-ESOP death benefit of a deceased Participant shall be paid
to his beneficiary designated in accordance with Section 9.2 in one of the
following alternative forms to be selected by such beneficiary or, in the
absence of such selection, by the Committee; provided, however, that the period
and method of payment of any such form shall be in compliance with the
provisions of section 401(a)(9) of the Code and applicable Treasury regulations
thereunder:
(a) A single life annuity for the life of the designated beneficiary.
(b) An annuity for the life of the designated beneficiary with a
survivor annuity for the life of any other person designated by such beneficiary
which shall be 50% of the annuity payable during the joint lives of the
designated beneficiary and such other person.
(c) An annuity for a term certain of either 5, 10 or 15 years and
continuous for the life of the designated beneficiary if such beneficiary
survives such term certain. In the event of such beneficiary's death prior to
the end of such term certain, the payments for the remaining period of such term
certain shall be made to any other person designated by such beneficiary.
(d) A single life annuity for the life of the designated beneficiary
and, in the event of such beneficiary's death before the total annuity payments
equal the Participant's Vested Interest in his Non-ESOP Accounts as of his
Benefit Commencement Date, continuing payments to any other person designated by
such beneficiary until an amount equal to such Vested Interest is paid.
(e) An annuity for the life of the designated beneficiary with a
survivor annuity for the life of any other person designated by such beneficiary
which shall be either 50%, 66-2/3%, or 100% of the amount of the annuity payable
during the joint lives of the designated beneficiary and such other person and,
in the event of the death of such beneficiary and such other person before the
total annuity payments equal the Participant's Vested Interest in his Non-ESOP
Accounts as of his Benefit Commencement Date, continuing payments to another
person designated by such beneficiary until an amount equal to such Vested
Interest is paid.
(f) An annuity for the joint lives of the designated beneficiary and any
other person designated by such beneficiary.
(g) An annuity providing for monthly payments for any term certain of a
number of months that is not less than sixty months or more than the life
expectancy of the designated beneficiary and any other person designated by such
beneficiary as of the Benefit
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Commencement Date to the beneficiary, in the event of such beneficiary's death
before the end of such term certain, to such other person.
(h) If the designated beneficiary is the Participant's spouse, a series
of flexible installments in amounts chosen by such beneficiary each year, with
the Participant's remaining Vested Interest in the balance of his Non-ESOP
Accounts at the time of such beneficiary's death, if any, paid any other person
designated by such beneficiary paid in one lump sum payment. In the event a
beneficiary elects this form of benefit and a minimum distribution is required
in accordance with the provisions of section 401(a)(9) of the Code and
applicable Treasury regulations for any calendar year, such minimum distribution
shall be determined and distributed in accordance with such provisions and, for
purposes of such determination, life expectancies shall be recalculated. A
beneficiary who elects this form of benefit may elect an alternative form of
benefit (subject to the provisions of this Section) at any time.
(i) A portion paid in a lump sum payment at the time determined by such
designated beneficiary, with the remainder paid in a lump sum payment at a later
time determined by such designated beneficiary or, in the event of such
beneficiary's death, to any other person designated by such beneficiary.
(j) A lump sum.
On and after April 1, 2001, the alternative forms of benefit described in (a)
through (i) above shall not be available and the non-ESOP death benefit of a
deceased Participant shall be paid to his beneficiary designated in accordance
with Section 9.2 in one lump sum payment.
10.4 CASH-OUT OF BENEFIT. If a Participant terminates his employment and
his Vested Interest in his Accounts is not in excess of $5,000, such
Participant's benefit shall be paid in one lump sum payment in lieu of any other
form of benefit herein provided. Any such payment shall be made (1) at the time
specified in Section 10.1(a), (2) without regard to the consent restrictions of
Section 10.1(b) and (3) if applicable, without regard to the election and
spousal consent requirements of Section 10.2. The provisions of this Section
shall not be applicable to a Participant following his Benefit Commencement
Date.
10.5 DIRECT ROLLOVER ELECTION. 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 Committee, to have all or any portion of an Eligible Rollover Distribution
(other than any portion attributable to the offset of an outstanding loan
balance of such Participant pursuant to the Plan's loan procedure) paid directly
to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. The preceding sentence notwithstanding, a Distributee may elect a
Direct Rollover pursuant to this Section only if such Distributee's Eligible
Rollover Distributions during the Plan Year are reasonably expected to total
$200 or more. Furthermore, if less than 100% of the Participant's Eligible
Rollover Distribution is to be a Direct Rollover, the amount of the Direct
Rollover must be $500 or more. Prior to any Direct Rollover pursuant to this
Section, the Committee may require the Distributee to furnish the Committee with
a statement from the plan, account, or annuity to which the benefit is to be
transferred verifying that such plan, account, or annuity is, or is intended to
be, an Eligible Retirement Plan.
X-6
10.6 BENEFITS FROM ACCOUNT BALANCES.
(a) With respect to any benefit payable in any form pursuant to the
Plan, such benefit shall be provided from the Account balance(s) to which the
particular Participant or beneficiary is entitled.
(b) Except as provided in Section 10.7, non-ESOP benefits shall be paid
(or transferred pursuant to Section 10.5) in cash except that a Participant (or
his designated beneficiary or legal representative in the case of a deceased
Participant) may elect to have the portion of his Non-ESOP Accounts invested in
Company Stock distributed (or transferred pursuant to Section 10.5) in full
shares of Company Stock to the extent of such Participant's pro rata portion of
the shares of Company Stock held in the Company Stock fund, with any balance of
the Participant's interest in the Company Stock fund (including fractional
shares) to be paid or transferred in cash.
10.7 COMMERCIAL ANNUITIES. At the direction of the Committee, the Trustee
may pay any form of benefit provided hereunder other than a lump sum payment or
a Direct Rollover pursuant to Section 10.5 by the purchase of a commercial
annuity contract and the distribution of such contract to the Participant or
beneficiary. Thereupon, the Plan shall have no further liability with respect to
the amount used to purchase the annuity contract and such Participant or
beneficiary shall look solely to the company issuing such contract for such
annuity payments. All certificates for commercial annuity benefits shall be
nontransferable, except for surrender to the issuing company, and no benefit
thereunder may be sold, assigned, discounted, or pledged (other than as
collateral for a loan from the company issuing same). Notwithstanding the
foregoing, the terms of any such commercial annuity contract shall conform with
the time of payment, form of payment, and consent provisions of Sections 10.1
and 10.2 (to the extent applicable).
10.8 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of a
Participant, if the Committee is unable to locate the Participant or beneficiary
to whom such benefit is payable, upon the Committee's determination thereof,
such benefit shall be forfeited. Notwithstanding the foregoing, if subsequent to
any such forfeiture the Participant or beneficiary to whom such benefit is
payable makes a valid claim for such benefit, such forfeited benefit shall be
restored to the Plan in the manner provided in Section 8.7.
10.9 CLAIMS REVIEW.
(a) In any case in which a claim for Plan benefits of a Participant or
beneficiary is denied or modified, the Committee shall furnish written notice to
the claimant within ninety days after receipt of such claim for Plan benefits
(or within 180 days if additional information requested by the Committee
necessitates an extension of the ninety-day period and the claimant is informed
of such extension in writing within the original ninety-day period), which
notice shall:
(1) State the specific reason or reasons for the denial or
modification;
(2) Provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
X-7
(3) Provide a description of any additional material or
information necessary for the Participant, his beneficiary, or
representative to perfect the claim and an explanation of why such
material or information is necessary; and
(4) Explain the Plan's claim review procedure described in
Paragraph (b) below.
(b) In the event a claim for Plan benefits is denied or modified, if the
Participant, his beneficiary, or a representative of such Participant or
beneficiary desires to have such denial or modification reviewed, he must,
within sixty days following receipt of the notice of such denial or
modification, submit a written request for review by the Committee of its
initial decision. In connection with such request, the Participant, his
beneficiary, or the representative of such Participant or beneficiary may review
any pertinent documents upon which such denial or modification was based and may
submit issues and comments in writing. Within sixty days following such request
for review the Committee shall, after providing a full and fair review, render
its final decision in writing to the Participant, his beneficiary or the
representative of such Participant or beneficiary stating specific reasons for
such decision and making specific references to pertinent Plan provisions upon
which the decision is based. If special circumstances require an extension of
such sixty-day period, the Committee's decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for review.
If an extension of time for review is required, written notice of the extension
shall be furnished to the Participant, beneficiary, or the representative of
such Participant or beneficiary prior to the commencement of the extension
period.
(c) Any legal action with respect to a claim for Plan benefits must be
filed no later than one year after the later of (1) the date the claim is denied
by the Committee or (2) if a review of such denial is requested pursuant to the
provisions of Paragraph (b) above, the date of the final decision by the
Committee with respect to such request.
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XI.
In-Service Withdrawals
11.1 IN-SERVICE WITHDRAWALS.
(a) A Participant may withdraw from his After-Tax Account and/or
Rollover Contribution Account any or all amounts held in such Accounts.
(b) A Participant who has withdrawn all amounts in his After-Tax Account
and Rollover Contribution Account may withdraw from his Employer Matching
Contribution Account any or all amounts held in such Account that have been so
held for twenty-four months or more, but not in excess of such Participant's
Vested Interest in such Account.
(c) A Participant who has attained age fifty-nine and one-half may
withdraw from his Before-Tax Account, his Employer Matching Contribution Account
and his Rollover Contribution Account an amount not exceeding such Participant's
Vested Interest in the then value of such Accounts. Such withdrawal shall come
first, from the Participant's Before-Tax Account, second, from the Participant's
Vested Interest in his Employer Matching Contribution Account and, finally, from
his Rollover Contribution Account.
(d) A Participant who has a financial hardship, as determined by the
Committee, and who has made all available withdrawals pursuant to the Paragraphs
above and pursuant to the provisions of any other plans of the Employer and any
Controlled Entities of which he is a member and who has obtained all available
loans pursuant to Article XII and pursuant to the provisions of any other plans
of the Employer and any Controlled Entities of which he is a member may withdraw
from his Employer Matching Contribution Account and his Before-Tax Account
amounts not to exceed the lesser of (1) such Participant's Vested Interest in
such Accounts or (2) the amount determined by the Committee as being available
for withdrawal pursuant to this Paragraph. Such withdrawal shall come, first,
from the Participant's Vested Interest in his Employer Matching Contribution
Account and, then, from his Before-Tax Account. For purposes of this Paragraph,
financial hardship shall mean the immediate and heavy financial needs of the
Participant. A withdrawal based upon financial hardship pursuant to this
Paragraph shall not exceed the amount required to meet the immediate financial
need created by the hardship and not reasonably available from other resources
of the Participant. The amount required to meet the immediate financial need may
include any amounts necessary to pay any federal, state, or local income taxes
or penalties reasonably anticipated to result from the distribution. The
determination of the existence of a Participant's financial hardship and the
amount required to be distributed to meet the need created by the hardship shall
be made by the Committee. The decision of the Committee shall be final and
binding, provided that all Participants similarly situated shall be treated in a
uniform and nondiscriminatory manner. A withdrawal shall be deemed to be made on
account of an immediate and heavy financial need of a Participant if the
withdrawal is for:
(1) Expenses for medical care described in section 213(d) of the
Code previously incurred by the
XI-1
Participant, the Participant's spouse, or any dependents of the
Participant (as defined in section 152 of the Code) or necessary for
those persons to obtain medical care described in section 213(d) of the
Code and not reimbursed or reimbursable by insurance;
(2) Costs directly related to the purchase of a principal
residence of the Participant (excluding mortgage payments);
(3) Payment of tuition and related educational fees, and room
and board expenses, for the next twelve months of post-secondary
education for the Participant or the Participant's spouse, children, or
dependents (as defined in section 152 of the Code);
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage
of the Participant's principal residence; or
(5) Such other financial needs that the Commissioner of Internal
Revenue may deem to be immediate and heavy financial needs through the
publication of revenue rulings, notices, and other documents of general
applicability.
The above notwithstanding, (1) withdrawals under this Paragraph from a
Participant's Before-Tax Account shall be limited to the sum of the
Participant's Before-Tax Contributions to the Plan, plus income allocable
thereto and credited to the Participant's Before-Tax Account as of December 31,
1988, less any previous withdrawals of such amounts, and (2) Employer
Contributions after December 31, 1988, utilized to satisfy the restrictions set
forth in Section 3.1(e), and income allocable thereto, shall not be subject to
withdrawal. A Participant who makes a withdrawal from his Before-Tax Account
under this Paragraph may not make elective contributions or employee
contributions to the Plan or any other qualified or nonqualified plan of the
Employer or any Controlled Entity for a period of twelve months following the
date of such withdrawal. Further, such Participant may not make elective
contributions under the Plan or any other plan maintained by the Employer or any
Controlled Entity for such Participant's taxable year immediately following the
taxable year of the withdrawal in excess of the applicable limit set forth in
Section 3.1(d) for such next taxable year less the amount of such Participant's
elective contributions for the taxable year of the withdrawal.
11.2 RESTRICTION ON IN-SERVICE WITHDRAWALS.
(a) All withdrawals pursuant to this Article shall be made in accordance
with the procedures established by the Committee.
(b) Notwithstanding the provisions of this Article, not more than one
withdrawal pursuant to Section 11.1(b) or two withdrawals pursuant to Section
11.1(c) may be made in any one Plan Year, and no withdrawal shall be made from
an Account to the extent such Account has been pledged to secure a loan from the
Plan.
(c) If a Participant's Account from which a withdrawal is made is
invested in more than one Investment Fund, the withdrawal shall be made pro rata
from each Investment Fund in which such Account is invested.
XI-2
(d) All withdrawals under this Article shall be paid in cash.
(e) Any withdrawal hereunder that constitutes an Eligible Rollover
Distribution shall be subject to the Direct Rollover election described in
Section 10.5 and to the election and spousal consent requirements of Section
10.2.
(f) This Article shall not be applicable to a Participant following
termination of employment and the amounts in such Participant's Accounts shall
be distributable only in accordance with the provisions of Article X.
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XII.
LOANS
12.1 ELIGIBILITY FOR LOAN. Upon application by (1) any Participant who is
an Employee or (2) any Participant (A) who is a party-in-interest as that term
is defined in section 3(14) of the Act, as to the Plan, (B) who is no longer
employed by the Employer, who is a beneficiary of a deceased Participant, or who
is an alternate payee under a qualified domestic relations order, as defined in
section 414(p)(8) of the Code, and (C) who retains an Account balance under the
Plan (an individual who is eligible to apply for a loan under this Article being
hereinafter referred to as a "Participant" for purposes of this Article), the
Committee may in its discretion direct the Trustee to make a loan or loans to
such Participant. Such loans shall be made pursuant to the provisions of the
Committee's written loan procedure, which procedure is hereby incorporated by
reference as a part of the Plan.
12.2 MAXIMUM LOAN.
(a) A loan to a Participant may not exceed 50% of the sum of the then
value of such Participant's Before-Tax Account, his Vested Interest in his
Employer Matching Contribution Account, his After-Tax Account, and his Rollover
Contribution Account.
(b) Paragraph (a) above to the contrary notwithstanding, no loan shall
be made from the Plan to the extent that such loan would cause the total of all
loans made to a Participant from all qualified plans of the Employer or a
Controlled Entity ("Outstanding Loans") to exceed the lesser of:
(1) $50,000 (reduced by the excess, if any, of (A) the highest
outstanding balance of Outstanding Loans during the one-year period
ending on the day before the date on which the loan is to be made over
(B) the outstanding balance of Outstanding Loans on the date on which
the loan is to be made); or
(2) one-half of the present value of the Participant's
nonforfeitable accrued benefit under all qualified plans of the Employer
or a Controlled Entity.
XII-1
XIII.
ADMINISTRATION OF THE PLAN
13.1 APPOINTMENT OF COMMITTEE. The general administration of the Plan shall
be vested in the Committee which shall be appointed by the Directors and shall
consist of one or more persons. Any individual, whether or not an Employee, is
eligible to become a member of the Committee. Each member of the Committee
shall, before entering upon the performance of his duties, qualify by signing a
consent to serve as a member of the Committee under and pursuant to the Plan and
by filing such consent with the records of the Committee. For purposes of the
Act, the Committee shall be the Plan "administrator" and shall be the "named
fiduciary" with respect to the general administration of the Plan (except as to
the investment of the assets of the Trust Fund).
13.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL. Each member of the
Committee shall serve until he resigns, dies, or is removed by the Directors. At
any time during his term of office, a member of the Committee may resign by
giving written notice to the Directors and the Committee, such resignation to
become effective upon the appointment of a substitute member or, if earlier, the
lapse of thirty days after such notice is given as herein provided. At any time
during his term of office, and for any reason, a member of the Committee may be
removed by the Directors with or without cause, and the Directors may in their
discretion fill any vacancy that may result therefrom. Any member of the
Committee who is an Employee shall automatically cease to be a member of the
Committee as of the date he ceases to be employed by the Employer or a
Controlled Entity.
13.3 OFFICERS, RECORDS, AND PROCEDURES. The Committee may select officers
and may appoint a secretary who need not be a member of the Committee. The
Committee shall keep appropriate records of its proceedings and the
administration of the Plan and shall make available for examination during
business hours to any Participant or beneficiary such records as pertain to that
individual's interest in the Plan. The Committee shall designate the person or
persons who shall be authorized to sign for the Committee and, upon such
designation, the signature of such person or persons shall bind the Committee.
13.4 MEETINGS. The Committee shall hold meetings upon such notice and at
such time and place as it may from time to time determine. Notice to a member
shall not be required if waived in writing by that member. A majority of the
members of the Committee duly appointed shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the Committee
at any meeting where a quorum is present shall be by vote of a majority of those
present at such meeting and entitled to vote. Resolutions may be adopted or
other action taken without a meeting upon written consent signed by all of the
members of the Committee.
13.5 SELF-INTEREST OF MEMBERS. No member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee member
is so disqualified to act and the remaining members cannot
XIII-1
agree, the Directors shall appoint a temporary substitute member to exercise all
the powers of the disqualified member concerning the matter in which he is
disqualified.
13.6 COMPENSATION AND BONDING. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
13.7 COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, authority, and duty:
(a) To make rules, regulations, and bylaws for the administration of
the Plan that are not inconsistent with the terms and provisions hereof,
provided such rules, regulations, and bylaws are evidenced in writing and
copies thereof are delivered to the Trustee and to the Company, and to
enforce the terms of the Plan and the rules and regulations promulgated
thereunder by the Committee;
(b) To construe in its discretion all terms, provisions, conditions,
and limitations of the Plan, and, in all cases, the construction necessary
for the Plan to qualify under the applicable provisions of the Code shall
control;
(c) To correct any defect or to supply any omission or to reconcile
any inconsistency that may appear in the Plan in such manner and to such
extent as it shall deem expedient in its discretion to effectuate the
purposes of the Plan;
(d) To employ and compensate such accountants, attorneys, investment
advisors, and other agents, employees, and independent contractors as the
Committee may deem necessary or advisable for the proper and efficient
administration of the Plan;
(e) To determine in its discretion all questions relating to
eligibility;
(f) To make a determination in its discretion as to the right of any
person to a benefit under the Plan and to prescribe procedures to be
followed by distributees in obtaining benefits hereunder;
(g) To prepare, file, and distribute, in such manner as the Committee
determines to be appropriate, such information and material as is required
by the reporting and disclosure requirements of the Act;
(h) To furnish the Employer any information necessary for the
preparation of such Employer's tax return or other information that the
Committee determines in its discretion is necessary for a legitimate
purpose;
(i) To require and obtain from the Employer and the Participants and
their beneficiaries any information or data that the Committee determines
is necessary for the proper administration of the Plan;
XIII-2
(j) To instruct the Trustee as to the loans to Participants pursuant
to the provisions of Article XII;
(k) To instruct the Trustee as to the management, investment, and
reinvestment of the Trust Fund;
(l) To appoint investment managers pursuant to Section 15.5;
(m) To receive and review reports from the Trustee and from investment
managers as to the financial condition of the Trust Fund, including its
receipts and disbursements;
(n) To establish or designate Investment Funds as investment options
as provided in Article V;
(o) To amend the Plan in accordance with and to the extent provided in
Article XVI; and
(p) To direct the Trustee as to the exercise of rights or privileges
to acquire, convert, or exchange Company Stock pursuant to Section 5.3.
13.8 EMPLOYER TO SUPPLY INFORMATION. The Employer shall supply full and
timely information to the Committee, including, but not limited to, information
relating to each Participant's Compensation, age, retirement, death, or other
cause of termination of employment and such other pertinent facts as the
Committee may require. The Employer shall advise the Trustee of such of the
foregoing facts as are deemed necessary for the Trustee to carry out the
Trustee's duties under the Plan. When making a determination in connection with
the Plan, the Committee shall be entitled to rely upon the aforesaid information
furnished by the Employer.
13.9 INDEMNIFICATION. The Company shall indemnify and hold harmless each
member of the Committee and each Employee who is a delegate of the Committee
against any and all expenses and liabilities arising out of his administrative
functions or fiduciary responsibilities, including any expenses and liabilities
that are caused by or result from an act or omission constituting the negligence
of such individual in the performance of such functions or responsibilities, but
excluding expenses and liabilities that are caused by or result from such
individual's own gross negligence or willful misconduct. Expenses against which
such individual shall be indemnified hereunder shall include, without
limitation, the amounts of any settlement or judgment, costs, counsel fees, and
related charges reasonably incurred in connection with a claim asserted or a
proceeding brought or settlement thereof.
13.10 TEMPORARY RESTRICTIONS. In order to ensure an orderly transition in
the transfer of assets to the Trust Fund from another trust fund maintained
under the Plan or from the trust fund of a plan that is merging into the Plan or
transferring assets to the Plan, the Committee may, in its discretion,
temporarily prohibit or restrict withdrawals, loans, changes to contribution
elections, changes of investment designation of future contributions, transfers
of amounts from one Investment Fund to another Investment Fund, or such other
activity as the Committee deems appropriate; provided that any such temporary
cessation or restriction of such activity shall be in compliance with all
applicable law.
XIII-3
XIV.
TRUSTEE AND ADMINISTRATION OF TRUST FUND
14.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT OF TRUSTEE. The
Trustee shall be appointed, removed, and replaced by and in the sole discretion
of the Directors. The Trustee shall be the "named fiduciary" with respect to
investment of the Trust Fund's assets.
14.2 TRUST AGREEMENT. As a means of administering the assets of the Plan,
the Company has entered into a Trust Agreement with Fidelity Management Trust
Company as Trustee. The administration of the assets of the Plan and the duties,
obligations, and responsibilities of the Trustee shall be governed by the Trust
Agreement. The Trust Agreement may be amended from time to time as the Company
deems advisable in order to effectuate the purposes of the Plan. The Trust
Agreement is incorporated herein by reference and thereby made a part of the
Plan.
14.3 PAYMENT OF EXPENSES. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, direct expenses of the Employer and the Committee in the administration of
the Plan, and the cost of furnishing any bond or security required of the
Committee shall be paid by the Trustee from the Trust Fund, and, until paid,
shall constitute a claim against the Trust Fund which is paramount to the claims
of Participants and beneficiaries; provided, however, that (a) the obligation of
the Trustee to pay such expenses from the Trust Fund shall cease to exist to the
extent such expenses are paid by the Employer and (b) in the event the Trustee's
compensation is to be paid, pursuant to this Section, from the Trust Fund, any
individual serving as Trustee who already receives full-time pay from an
Employer or an association of Employers whose employees are Participants, or
from an employee organization whose members are Participants, shall not receive
any additional compensation for serving as Trustee. This Section shall be deemed
to be a part of any contract to provide for expenses of Plan and Trust
administration, whether or not the signatory to such contract is, as a matter of
convenience, the Employer.
14.4 TRUST FUND PROPERTY. All income, profits, recoveries, contributions,
forfeitures, and any and all moneys, securities, and properties of any kind at
any time received or held by the Trustee hereunder shall be held for investment
purposes as a commingled Trust Fund. The Committee shall maintain Accounts in
the name of each Participant, but the maintenance of an Account designated as
the Account of a Participant shall not mean that such Participant shall have a
greater or lesser interest than that due him by operation of the Plan and shall
not be considered as segregating any funds or property from any other funds or
property contained in the commingled fund. No Participant shall have any title
to any specific asset in the Trust Fund.
14.5 DISTRIBUTIONS FROM PARTICIPANTS' ACCOUNTS. Distributions from a
Participant's Accounts shall be made by the Trustee only if, when, and in the
amount and manner directed in writing by the Committee. Any distribution made to
a Participant or for his benefit shall be debited to such Participant's Account
or Accounts. All distributions hereunder shall be made in cash except as
otherwise specifically provided herein.
XIV-1
14.6 PAYMENTS SOLELY FROM TRUST FUND. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund, and neither the
Employer nor the Trustee assumes any liability or responsibility for the
adequacy thereof. The Committee or the Trustee may require execution and
delivery of such instruments as are deemed necessary to assure proper payment of
any benefits.
14.7 NO BENEFITS TO THE EMPLOYER. No part of the corpus or income of the
Trust Fund shall be used for any purpose other than the exclusive purpose of
providing benefits for the Participants and their beneficiaries and of defraying
reasonable expenses of administering the Plan and Trust. Anything to the
contrary herein notwithstanding, the Plan shall not be construed to vest any
rights in the Employer other than those specifically given hereunder.
XIV-2
XV.
FIDUCIARY PROVISIONS
15.1 ARTICLE CONTROLS. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
15.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES. Each fiduciary with respect to
the Plan shall have only those specific powers, duties, responsibilities and
obligations as are specifically given him under the Plan. The Directors shall
have the sole authority to appoint and remove the Trustee and members of the
Committee. Except as otherwise specifically provided herein, the Committee shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described herein. Except as otherwise
specifically provided herein, the Trustee shall have the sole responsibility for
the administration, investment, and management of the assets held under the
Plan. However, because the Committee, as a co-fiduciary, has chosen to exercise
its power given hereunder to direct the Trustee in the management, investment,
and reinvestment of the Trust Fund in accordance with the provisions of the
Plan, the Trustee shall be subject to all proper directions of the Committee
that are made in accordance with the terms of the Plan and the Act. It is
intended under the Plan that each fiduciary shall be responsible for the proper
exercise of his own powers, duties, responsibilities, and obligations hereunder
and shall not be responsible for any act or failure to act of another fiduciary
except to the extent provided by law or as specifically provided herein.
15.3 FIDUCIARY DUTY. Each fiduciary under the Plan, including, but not
limited to, the Committee and the Trustee as "named fiduciaries," shall
discharge his duties and responsibilities with respect to the Plan:
(a) Solely in the interest of the Participants, for the exclusive
purpose of providing benefits to Participants and their beneficiaries and
of defraying reasonable expenses of administering the Plan and Trust;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of
a like character and with like aims;
(c) By diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is prudent not to
do so; and
(d) In accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with
applicable law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code or section 406 of the Act.
15.4 DELEGATION OF FIDUCIARY DUTIES. The Committee may appoint
subcommittees, individuals, or any other agents as it deems advisable and may
delegate to any of such appointees
XV-1
any or all of the powers and duties of the Committee. Such appointment and
delegation must specify in writing the powers or duties being delegated, and
must be accepted in writing by the delegatee. Upon such appointment, delegation,
and acceptance, the delegating Committee members shall have no liability for the
acts or omissions of any such delegatee, as long as the delegating Committee
members do not violate any fiduciary responsibility in making or continuing such
delegation.
15.5 INVESTMENT MANAGER. The Committee may, in its sole discretion, appoint
an "investment manager," with power to manage, acquire or dispose of any asset
of the Plan and to direct the Trustee in this regard, so long as:
(a) The investment manager is (1) registered as an investment adviser
under the Investment Advisers Act of 1940, (2) not registered as an
investment adviser under such act by reason of paragraph (1) of section
203A(a) of such act, is registered as an investment adviser under the laws
of the state (referred to in such paragraph (1)) in which it maintains its
principal office and place of business, and, at the time it last filed the
registration form most recently filed by it with such state in order to
maintain its registration under the laws of such state, also filed a copy
of such form with the Secretary of Labor, (3) a bank, as defined in the
Investment Advisers Act of 1940, or (4) an insurance company qualified to
do business under the laws of more than one state; and
(b) Such investment manager acknowledges in writing that he is a
fiduciary with respect to the Plan.
Upon such appointment, the Committee shall not be liable for the acts of the
investment manager, as long as the Committee members do not violate any
fiduciary responsibility in making or continuing such appointment. The Trustee
shall follow the directions of such investment manager and shall not be liable
for the acts or omissions of such investment manager. The investment manager may
be removed by the Committee at any time and within the Committee's sole
discretion.
XV-2
XVI.
AMENDMENTS
16.1 RIGHT TO AMEND. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Directors may from time to time amend, in
whole or in part, any or all of the provisions of the Plan on behalf of the
Company and all Employers. Notwithstanding the foregoing, the Committee, without
the need for approval of the Directors, may amend the Plan on behalf of the
Company and all Employers in order to (a) comply with applicable statutory or
regulatory requirements, including any amendment necessary to maintain a
qualified status for the Plan under the Code, whether or not retroactive and (b)
make any administrative modifications deemed necessary or advisable by the
Committee to facilitate the efficient administration of the Plan.
16.2 LIMITATION ON AMENDMENTS. No amendment of the Plan shall be made that
would vest in the Employer, directly or indirectly, any interest in or control
of the Trust Fund. No amendment shall be made that would vary the Plan's
exclusive purpose of providing benefits to Participants and their beneficiaries
and of defraying reasonable expenses of administering the Plan or that would
permit the diversion of any part of the Trust Fund from that exclusive purpose.
No amendment shall be made that would reduce any then nonforfeitable interest of
a Participant. No amendment shall increase the duties or responsibilities of the
Trustee unless the Trustee consents thereto in writing.
XVI-1
XVII.
DISCONTINUANCE OF CONTRIBUTIONS, TERMINATION,
PARTIAL TERMINATION, AND MERGER OR CONSOLIDATION
17.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY TERMINATE.
The Employer has established the Plan with the bona fide intention and
expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the Directors
realize that circumstances not now foreseen, or circumstances beyond its
control, may make it either impossible or inadvisable for the Employer to
continue to make its contributions to the Plan. Therefore, the Directors shall
have the right and the power to discontinue contributions to the Plan, terminate
the Plan, or partially terminate the Plan at any time hereafter. Each member of
the Committee and the Trustee shall be notified of such discontinuance,
termination, or partial termination.
17.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTIONS,
TERMINATION, OR PARTIAL TERMINATION.
(a) If the Plan is amended so as to permanently discontinue Employer
Contributions, or if Employer Contributions are in fact permanently
discontinued, the Vested Interest of each affected Participant shall be 100%,
effective as of the date of discontinuance. In case of such discontinuance, the
Committee shall remain in existence and all other provisions of the Plan that
are necessary, in the opinion of the Committee, for equitable operation of the
Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the Vested
Interest of each affected Participant shall be 100%, effective as of the
termination date or partial termination date, as applicable. Unless the Plan is
otherwise amended prior to dissolution of the Company, the Plan shall terminate
as of the date of dissolution of the Company.
(c) Upon discontinuance of contributions, termination, or partial
termination, any previously unallocated contributions, forfeitures, and net
income (or net loss) shall be allocated among the Accounts of the Participants
on such date of discontinuance, termination, or partial termination according to
the provisions of Article IV. Thereafter, the net income (or net loss) shall
continue to be allocated to the Accounts of the Participants until the balances
of the Accounts are distributed.
(d) In the case of a termination or partial termination of the Plan, and
in the absence of a Plan amendment to the contrary, the Trustee shall pay the
balance of the Accounts of a Participant for whom the Plan is so terminated, or
who is affected by such partial termination, to such Participant, subject to the
time of payment, form of payment, and consent provisions of Article X.
17.3 MERGER, CONSOLIDATION, OR TRANSFER. This Plan and Trust Fund may not
merge or consolidate with, or transfer its assets or liabilities to, any other
plan, unless immediately thereafter each Participant would, in the event such
other plan terminated, be entitled to a benefit
XVII-1
which is equal to or greater than the benefit to which he would have been
entitled if the Plan were terminated immediately before the merger,
consolidation, or transfer.
XVII-2
XVIII.
PARTICIPATING EMPLOYERS
18.1 DESIGNATION OF OTHER EMPLOYERS.
(a) The Committee may designate any entity or organization eligible by law
to participate in the Plan and the Trust as an Employer by written instrument
delivered to the Secretary of the Company, the Trustee, and the designated
Employer. Such written instrument shall specify the effective date of such
designated participation, may incorporate specific provisions relating to the
operation of the Plan that apply to the designated Employer only and shall
become, as to such designated Employer and its Employees, a part of the Plan.
(b) Each designated Employer shall be conclusively presumed to have
consented to its designation and to have agreed to be bound by the terms of the
Plan and Trust Agreement and any and all amendments thereto upon its submission
of information to the Committee required by the terms of or with respect to the
Plan or upon making a contribution to the Trust Fund pursuant to the terms of
the Plan; provided, however, that the terms of the Plan may be modified so as to
increase the obligations of an Employer only with the consent of such Employer,
which consent shall be conclusively presumed to have been given by such Employer
upon its submission of any information to the Committee required by the terms of
or with respect to the Plan or upon making a contribution to the Trust Fund
pursuant to the terms of the Plan following notice of such modification.
(c) The provisions of the Plan and the Trust Agreement shall apply
separately and equally to each Employer and its Employees in the same manner as
is expressly provided for the Company and its Employees, except that the power
to appoint or otherwise affect the Committee or the Trustee and the power to
amend or terminate the Plan and Trust Agreement shall be exercised by the
Directors, or by the Committee, if applicable, alone and, in the case of
Employers which are Controlled Entities, Employer Discretionary Contributions to
be allocated pursuant to Section 4.2(c) shall be allocated on an aggregate basis
among the Participants employed by all Employers; provided, however, that each
Employer shall contribute to the Trust Fund its share of the total Employer
Discretionary Contribution for a Plan Year based on the Participants in its
employ during such Plan Year.
(d) Transfer of employment among Employers shall not be considered a
termination of employment hereunder, and an Hour of Service with one shall be
considered as an Hour of Service with all others.
(e) Any Employer may, by appropriate action of its Board of Directors or
noncorporate counterpart communicated in writing to the Secretary of the
Company, the Trustee, and to the Committee, terminate its participation in the
Plan and the Trust. Moreover, the Committee may, in its discretion, terminate an
Employer's Plan and Trust participation at any time by written instrument
delivered to the Secretary of the Company, the Trustee, and the designated
Employer.
XVIII-1
18.2 SINGLE PLAN. For purposes of the Code and the Act, the Plan as adopted
by the Employers shall constitute a single plan rather than a separate plan of
each Employer. All assets in the Trust Fund shall be available to pay benefits
to all Participants and their beneficiaries.
XVIII-2
XIX.
MISCELLANEOUS PROVISIONS
19.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the Plan
shall not be deemed to be either a contract between the Employer and any person
or consideration for the employment of any person. Nothing herein contained
shall be deemed to give any person the right to be retained in the employ of the
Employer or to restrict the right of the Employer to discharge any person at any
time nor shall the Plan be deemed to give the Employer the right to require any
person to remain in the employ of the Employer or to restrict any person's right
to terminate his employment at any time.
19.2 ALIENATION OF INTEREST FORBIDDEN. Except as otherwise provided with
respect to "qualified domestic relations orders" and certain judgments and
settlements pursuant to section 206(d) of the Act and sections 401(a)(13) and
414(p) of the Code, and, except as otherwise provided under other applicable
law, no right or interest of any kind in any benefit shall be transferable or
assignable by any Participant or any beneficiary or be subject to anticipation,
adjustment, alienation, encumbrance, garnishment, attachment, execution, or levy
of any kind. Plan provisions to the contrary notwithstanding, the Committee
shall comply with the terms and provisions of any "qualified domestic relations
order," including an order that requires distributions to an alternate payee
prior to a Participant's "earliest retirement age" as such term is defined in
section 206(d)(3)(E)(ii) of the Act and section 414(p)(4)(B) of the Code, and
shall establish appropriate procedures to effect the same.
19.3 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
REQUIREMENTS. Notwithstanding any provision of the Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.
19.4 PAYMENTS TO MINORS AND INCOMPETENTS. If a Participant or beneficiary
entitled to receive a benefit under the Plan is a minor or is determined by the
Committee in its discretion to be incompetent or is adjudged by a court of
competent jurisdiction to be legally incapable of giving valid receipt and
discharge for a benefit provided under the Plan, the Committee may pay such
benefit to the duly appointed guardian or conservator of such Participant or
beneficiary for the account of such Participant or beneficiary. If no guardian
or conservator has been appointed for such Participant or beneficiary, the
Committee may pay such benefit to any third party who is determined by the
Committee, in its sole discretion, to be authorized to receive such benefit for
the account of such Participant or beneficiary. Such payment shall operate as a
full discharge of all liabilities and obligations of the Committee, the Trustee,
the Employer, and any fiduciary of the Plan with respect to such benefit.
19.5 PARTICIPANT'S AND BENEFICIARY'S ADDRESSES. It shall be the affirmative
duty of each Participant to inform the Committee of, and to keep on file with
the Committee, his current mailing address and the current mailing address of
his designated beneficiary. If a Participant fails to keep the Committee
informed of his current mailing address and the current mailing
XIX-1
address of his designated beneficiary, neither the Committee, the Trustee, the
Employer, nor any fiduciary under the Plan shall be responsible for any late or
lost payment of a benefit or for failure of any notice to be provided timely
under the terms of the Plan.
19.6 INCORRECT INFORMATION, FRAUD, CONCEALMENT, OR ERROR. Any contrary
provisions of the Plan notwithstanding, if, because of a human or systems error,
or because of incorrect information provided by or correct information failed to
be provided by, fraud, misrepresentation, or concealment of any relevant fact
(as determined by the Committee) by any person the Plan enrolls any individual,
pays benefits under the Plan, incurs a liability or makes any overpayment or
erroneous payment, the Plan shall be entitled to recover from such person the
benefit paid or the liability incurred, together with all expenses incidental to
or necessary for such recovery.
19.7 SEVERABILITY. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof. In such case, each provision shall be fully
severable and the Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.
19.8 JURISDICTION. The situs of the Plan is Texas. All provisions of the
Plan shall be construed in accordance with the laws of Texas except to the
extent preempted by federal law.
19.9 ACQUISITION AND HOLDING OF COMPANY STOCK. The Plan is specifically
authorized to acquire and hold up to 100% of its assets in Company Stock so long
as Company Stock is a "qualifying employer security," as such term is defined in
Section 407(d)(5) of the Act.
XIX-2
XX.
TOP-HEAVY STATUS
20.1 ARTICLE CONTROLS. Any Plan provisions to the contrary notwithstanding,
the provisions of this Article shall control to the extent required to cause the
Plan to comply with the requirements imposed under section 416 of the Code.
20.2 DEFINITIONS. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) ACCOUNT BALANCE: As of any Valuation Date, the aggregate amount
credited to an individual's account or accounts under a qualified defined
contribution plan maintained by the Employer or a Controlled Entity (excluding
employee contributions that were deductible within the meaning of section 219 of
the Code and rollover or transfer contributions made after December 31, 1983, by
or on behalf of such individual to such plan from another qualified plan
sponsored by an entity other than the Employer or a Controlled Entity),
increased by (1) the aggregate distributions made to such individual from such
plan during a five-year period ending on the Determination Date and (2) the
amount of any contributions due as of the Determination Date immediately
following such Valuation Date.
(b) ACCRUED BENEFIT: As of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative accrued benefit
(excluding the portion thereof that is attributable to employee contributions
that were deductible pursuant to section 219 of the Code, to rollover or
transfer contributions made after December 31, 1983, by or on behalf of such
individual to such plan from another qualified plan sponsored by an entity other
than the Employer or a Controlled Entity, to proportional subsidies or to
ancillary benefits) of an individual under a qualified defined benefit plan
maintained by the Employer or a Controlled Entity increased by (1) the aggregate
distributions made to such individual from such plan during a five-year period
ending on the Determination Date and (2) the estimated benefit accrued by such
individual between such Valuation Date and the Determination Date immediately
following such Valuation Date. Solely for the purpose of determining top-heavy
status, the Accrued Benefit of an individual shall be determined under (1) the
method, if any, that uniformly applies for accrual purposes under all qualified
defined benefit plans maintained by the Employer and the Controlled Entities or
(2) if there is no such method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under section 411(b)(1)(C) of the Code.
(c) AGGREGATION GROUP: The group of qualified plans maintained by the
Employer and each Controlled Entity consisting of (1) each plan in which a Key
Employee participates and each other plan that enables a plan in which a Key
Employee participates to meet the requirements of section 401(a)(4) or 410 of
the Code or (2) each plan in which a Key Employee participates, each other plan
that enables a plan in which a Key Employee participates to meet the
requirements of section 401(a)(4) or 410 of the Code and any other plan that the
Employer elects to include as a part of such group; provided, however, that the
Employer may
XX-1
elect to include a plan in such group only if the group will continue to meet
the requirements of sections 401(a)(4) and 410 of the Code with such plan being
taken into account.
(d) ASSUMPTIONS: The interest rate and mortality assumptions specified
for top-heavy status determination purposes in any defined benefit plan included
in the Aggregation Group that includes the Plan.
(e) DETERMINATION DATE: For the first Plan Year of any plan, the last
day of such Plan Year and for each subsequent Plan Year of such plan, the last
day of the preceding Plan Year.
(f) KEY EMPLOYEE: A "key employee" as defined in section 416(i) of the
Code and the Treasury regulations thereunder.
(g) PLAN YEAR: With respect to any plan, the annual accounting period
used by such plan for annual reporting purposes.
(h) REMUNERATION: 415 Compensation as defined in Section 4.5(a)(2).
(i) VALUATION DATE: With respect to any Plan Year of any defined
contribution plan, the most recent date within the twelve-month period ending on
a Determination Date as of which the trust fund established under such plan was
valued and the net income (or loss) thereof allocated to participants' accounts.
With respect to any Plan Year of any defined benefit plan, the most recent date
within a twelve-month period ending on a Determination Date as of which the plan
assets were valued for purposes of computing plan costs for purposes of the
requirements imposed under section 412 of the Code.
20.3 TOP-HEAVY STATUS. The Plan shall be deemed to be top-heavy for a Plan
Year if, as of the Determination Date for such Plan Year, (1) the sum of Account
Balances of Participants who are Key Employees exceeds 60% of the sum of Account
Balances of all Participants unless an Aggregation Group including the Plan is
not top-heavy or (2) an Aggregation Group including the Plan is top-heavy. An
Aggregation Group shall be deemed to be top-heavy as of a Determination Date if
the sum (computed in accordance with section 416(g)(2)(B) of the Code and the
Treasury regulations promulgated thereunder) of (1) the Account Balances of Key
Employees under all defined contribution plans included in the Aggregation Group
and (2) the Accrued Benefits of Key Employees under all defined benefit plans
included in the Aggregation Group exceeds 60% of the sum of the Account Balances
and the Accrued Benefits of all individuals under such plans. Notwithstanding
the foregoing, the Account Balances and Accrued Benefits of individuals who are
not Key Employees in any Plan Year but who were Key Employees in any prior Plan
Year shall not be considered in determining the top-heavy status of the Plan for
such Plan Year. Further, notwithstanding the foregoing, the Account Balances and
Accrued Benefits of individuals who have not performed services for the Employer
or any Controlled Entity at any time during the five-year period ending on the
applicable Determination Date shall not be considered.
XX-2
20.4 TOP-HEAVY CONTRIBUTION.
(a) If the Plan is determined to be top-heavy for a Plan Year, the
Employer shall contribute to the Plan for such Plan Year on behalf of each
Participant who is not a Key Employee and who has not terminated his employment
as of the last day of such Plan Year an amount equal to:
(1) The lesser of (A) 3% of such Participant's Remuneration for such
Plan Year or (B) a percent of such Participant's Remuneration for such Plan
Year equal to the greatest percent determined by dividing for each Key
Employee the amounts allocated to such Key Employee's Before-Tax Account
and Employer Contribution Accounts for such Plan Year by such Key
Employee's Remuneration; reduced by
(2) The amount of Employer Discretionary Contributions and ESOP
Contributions allocated to such Participant's Accounts for such Plan Year.
(b) The minimum contribution required to be made for a Plan Year
pursuant to this Section for a Participant employed on the last day of such Plan
Year shall be made regardless of whether such Participant is otherwise
ineligible to receive an allocation of the Employer's contributions for such
Plan Year.
(c) Notwithstanding the foregoing, if the Plan is deemed to be
top-heavy for a Plan Year, the Employer's contribution for such Plan Year
pursuant to this Section shall be increased by substituting "4%" in lieu of "3%"
in Clause (1) hereof to the extent that the Directors determine to so increase
such contribution to comply with the provisions of section 416(h)(2) of the
Code. Notwithstanding the foregoing, no contribution shall be made pursuant to
this Section for a Plan Year with respect to a Participant who is a participant
in another defined contribution plan sponsored by the Employer or a Controlled
Entity if such Participant receives under such other defined contribution plan
(for the plan year of such plan ending with or within the Plan Year of the Plan)
a contribution which is equal to or greater than the minimum contribution
required by section 416(c)(2) of the Code.
(d) Notwithstanding the foregoing, no contribution shall be made
pursuant to this Section for a Plan Year with respect to a Participant who is a
participant in a defined benefit plan sponsored by the Employer or a Controlled
Entity if such Participant accrues under such defined benefit plan (for the plan
year of such plan ending with or within the Plan Year of this Plan) a benefit
that is at least equal to the benefit described in section 416(c)(1) of the
Code. If the preceding sentence is not applicable, the requirements of this
Section shall be met by providing a minimum benefit under such defined benefit
plan which, when considered with the benefit provided under the Plan as an
offset, is at least equal to the benefit described in section 416(c)(1) of the
Code.
20.5 TERMINATION OF TOP-HEAVY STATUS. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article shall cease to apply to the Plan effective as of the
Determination Date on which it is determined no longer to be top-heavy.
Notwithstanding the foregoing, the Vested Interest of each Participant as of
such Determination Date shall not be reduced and, with respect to each
XX-3
Participant who has three or more years of Vesting Service on such Determination
Date, the Vested Interest of each such Participant shall continue to be
determined in accordance with the schedule set forth in Section 20.4.
20.6 EFFECT OF ARTICLE. Notwithstanding anything contained herein to the
contrary, the provisions of this Article shall automatically become inoperative
and of no effect to the extent not required by the Code or the Act.
XX-4
XXI.
ESOP AND ESOP ALLOCATIONS
21.1 EFFECTIVE DATE. This Article shall be effective as of the close of
business on December 31, 2000.
21.2 ARTICLE CONTROLS. Any Plan provisions to the contrary notwithstanding,
the provisions of this Article shall control.
21.3 DEFINITIONS. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) ESOP: The employee stock ownership plan established as a part of
the Plan pursuant to this Article XXI as a result of the merger of the OEI ESOP
with and into the Plan.
(b) ESOP ACCOUNT: An individual account for each Participant which is
credited with the sum of (1) ESOP Contributions, if any, made on such
Participant's behalf pursuant to Section 21.6 and (2) the amounts, if any,
credited to such Account in accordance with the ESOP Merger Document.
(c) ESOP CONTRIBUTIONS: Contributions made to the ESOP by the Employer
pursuant to Section 21.6.
(d) ESOP MERGER DOCUMENT: The document entitled "Merger of the Ocean
Energy, Inc. Employee Stock Ownership Plan with and into the Ocean Energy, Inc.
Thrift Plan," a copy of which is attached hereto as Appendix B.
(e) ESOP STOCK: Shares of Company Stock that meet the requirements of
section 409(l) of the Code which include: (A) common stock issued by the Company
or a Controlled Entity which is readily tradeable on an established securities
market or (B) if there is no common stock which meets the requirements of (A)
above, common stock issued by the Company or a Controlled Entity having a
combination of voting power and dividend rights equal to or in excess of (i)
that class of common stock of the Company (or of any other such corporation)
having the greatest voting power and (ii) that class of common stock of the
Company (or of any other such corporation) having the greatest dividend rights.
Noncallable preferred stock shall be treated as ESOP Stock, if such stock is
convertible at any time into stock that meets the requirements of (A) or (B)
above, and if such conversion is at a conversion price that is reasonable. For
purposes of the preceding sentence, preferred stock shall be treated as
noncallable if after the call there will be a reasonable opportunity for a
conversion which meets the requirements of the preceding sentence.
Notwithstanding the foregoing, the term "ESOP Stock" shall include any shares of
securities issued by the Company or a Controlled Entity that, at the time of its
acquisition by the Plan, satisfied the requirements of section 4975 of the Code
and the Treasury Regulations promulgated thereunder as in effect at the time of
such acquisition.
XXI-1
(f) EXEMPT LOAN: The loan from the Company to the OEI ESOP on November
15, 1989 that was used to finance the purchase of shares of ESOP Stock.
(g) FINANCED STOCK: ESOP Stock acquired with the proceeds of the
Exempt Loan.
(h) 1934 ACT: The Securities Exchange Act of 1934, as amended.
(i) OEI ESOP: The Ocean Energy, Inc. Employee Stock Ownership Plan, as
in effect on December 31, 2000.
21.4 PURPOSE OF ESOP. The purpose of the ESOP is to enable Participants to
acquire an ownership interest in the Company. As a means of accomplishing such
purpose, the ESOP will be invested primarily in ESOP Stock.
21.5 NATURE OF THE ESOP. The ESOP is intended to be a stock bonus plan
qualified under section 401(a) of the Code. The ESOP is also designed to meet
the requirements for an employee stock ownership plan within the meaning of
section 4975(e)(7) of the Code and section 407(d)(6) of the Act.
21.6 CONTRIBUTIONS AND ALLOCATIONS.
(a) For each Plan Year, the Employer shall contribute to the Trust, as its
ESOP Contribution for such Plan Year, the amount, if any, authorized by the
Directors. The Employer Contribution may be made in cash or in shares of Company
Stock, as determined by the Directors. The Employer's ESOP Contribution shall be
paid directly to the Trustee. On or about the date of any such payment, the
Committee shall be informed as to the amount of such payment.
(b) As of the last day of each Plan Year, the sum of the Employer's ESOP
Contributions (including contributions in kind) to the Plan for such Plan Year
plus any amounts which are forfeited from a Participant's ESOP Account under any
provision of the Plan hereof during such Plan Year (and which are not required
for restoration of amounts previously forfeited pursuant to the provisions of
Section 8.7) shall be allocated to the ESOP Accounts of the Participants who (1)
were Eligible Employees on the last day of such Plan Year or (2) terminated
employment during such Plan Year on or after their Normal Retirement Date or by
reason of total and permanent disability (as defined in Section 7.2) or death.
Such allocation shall be on the basis of the Compensation of such Participants
and each such Participant's ESOP Account shall receive that portion of such sum
which such Participant's Compensation for such Plan Year is of all such
Participant's Compensation for such Plan Year.
21.7 CASH DIVIDENDS ON ESOP STOCK. Any cash dividends attributable to ESOP
Stock held by the ESOP shall be paid by the Company directly to the Trustee.
21.8 DIVIDEND ACCOUNTING AND ALLOCATIONS.
(a) Any dividends received by the Trustee which are attributable to ESOP
Stock that has been credited to the Participants' ESOP Accounts shall be
allocated upon receipt by the
XXI-2
Trustee to the ESOP Account of each Participant to the same extent and in the
same proportion as such dividends would have been received by such Participant
had he been the direct owner of the ESOP Stock credited to his ESOP Account.
(b) With respect to each Participant whose employment is terminated for any
reason, so long as there are any shares of ESOP Stock in such Participant's ESOP
Account, his ESOP Account shall continue to receive dividend allocations
pursuant to this Section.
21.9 INVESTMENT OF ACCOUNTS. Participants' ESOP Accounts shall be invested
primarily in shares of ESOP Stock. The Committee shall determine the extent to
which the ESOP shall be invested in ESOP Stock and shall determine the price at
which ESOP Stock will be purchased or sold.
21.10 FORFEITURE OF FINANCED STOCK. Financed Stock allocated to a
Participant's ESOP Account may be forfeited pursuant to Sections 8.6(a), 8.6(b),
or 8.8 only after assets other than Financed Stock allocated to the
Participant's ESOP Account have been forfeited. Further, if Financed Stock
allocated to a Participant's ESOP Account is forfeited pursuant to Sections
8.6(a), 8.6(b), or 8.8, and if such Financed Stock includes more than one class
of Company Stock, such Participant must be treated as forfeiting the same
proportion of each class of Company Stock.
21.11 FORM OF ESOP BENEFIT AND PAYEE. A Participant's ESOP benefit shall be
provided from the balance of such Participant's ESOP Account under the ESOP and
shall be paid in one lump sum on the Participant's Benefit Commencement Date.
Except as provided in Section 19.4, the Participant's benefit shall be paid to
the Participant unless the Participant has died prior to his Benefit
Commencement Date, in which case the Participant's benefit shall be paid to his
beneficiary designated in accordance with the provisions of Section 9.2.
Distribution of a Participant's ESOP Account (other than distributions made
pursuant to Section 21.15) shall be made in whole shares of ESOP Stock (with the
value of any fractional shares being distributed in cash) or in cash, as elected
by the Participant or his designated beneficiary.
21.12 VOTING AND OTHER RIGHTS.
(a) Each Participant shall be entitled to direct the Trustee as to the
manner in which shares of ESOP Stock credited to the Participant's ESOP Account
shall be voted in accordance with the provisions of the Trust Agreement.
(b) If a "cash tender offer" or "exchange offer" for shares of ESOP Stock
is made, a Participant shall be entitled to direct ESOP Stock allocated to his
ESOP Account under the ESOP to be tendered or exchanged by the Trustee pursuant
to such "cash tender offer" or "exchange offer" in accordance with the
provisions of the Trust Agreement.
21.13 RIGHT OF FIRST REFUSAL.
(a) Any ESOP Stock distributed from the ESOP to a Participant or designated
beneficiary shall be subject to a "right of first refusal" in favor of the ESOP.
No such Participant or designated beneficiary may sell, assign, or, in any other
manner, transfer (except by gift, devise, or intestate succession in which case
such ESOP Stock shall continue to be subject to the
XXI-3
right of first refusal provided herein) such ESOP Stock prior to first giving
written notice to the Trustee which shall state the complete terms upon which
the Participant or designated beneficiary seeks to transfer the ESOP Stock. Upon
receipt of such written notice, the Trustee, on behalf of the ESOP, shall have
the right to purchase (a referential right to which is hereby granted in favor
of the Trustee) the ESOP Stock upon the terms set forth below. The purchase
price to the Trustee shall be the fair market value of the ESOP Stock and, in
determining the fair market value of the ESOP Stock, the Trustee shall give due
consideration to the purchase price offered to the selling Participant or
beneficiary by a third-party buyer. This "right of first refusal" in favor of
the ESOP shall lapse upon the earlier of (1) the fourteenth day after the seller
gives written notice to the Trustee that an offer by a third-party buyer to
purchase the ESOP Stock has been received, including the complete terms of the
proposed transfer or (2) the date the Trustee delivers written notice to the
seller that the ESOP does not desire to exercise its right to purchase the ESOP
Stock thereby consenting to the proposed transfer on the terms set forth in the
selling Participant's notice. If the Trustee, on behalf of the ESOP, desires to
exercise affirmatively the preferential purchase right set forth above, the
Trustee shall do so by giving the required written notice within the
fourteen-day period described herein. The consummation of any such purchase
shall be on mutually acceptable date as soon as practicable after giving such
written notice and the purchaser shall tender payment for any ESOP Stock
purchased pursuant to this Section 21.13(a) in the form of a single cash
payment.
(b) This Section shall become inoperative as to all shareholders in the
event that the ESOP Stock is listed on a national securities exchange registered
under section 6 of the 1934 Act or quoted on a system sponsored by a national
securities association registered under section 15A(b) of the 1934 Act.
(c) Each stock certificate representing shares of ESOP Stock distributed
from the ESOP subject to the "right of first refusal" provided by this Section
shall bear the following legend written conspicuously across the face, or
written across the back and conspicuously referred to on the face:
"The shares evidenced by this certificate are subject to the provisions of
Section 21.13 of the Ocean Retirement Savings Plan. No sale, assignment, or
transfer (other than by gift, devise, or intestate succession in which case
such stock shall continue to be subject to the right of first refusal
provided herein) of any or all of the shares evidenced by this certificate,
or any interest in such shares, shall be valid or effective unless the
terms and provisions of such Section 21.13 have been fulfilled. Ocean
Energy, Inc. will furnish without charge a copy of such Section containing
a full statement of the applicable restrictions on transfer or other
disposition of the shares evidenced by this certificate, or any interest in
such shares, to the recordholder of this certificate upon written request
to Ocean Energy, Inc. at its principal place of business or registered
office."
21.14 "PUT" OPTION.
A former Participant or designated beneficiary shall be granted, at the
time that shares of ESOP Stock are distributed to him, a put option to sell the
shares of ESOP Stock to the ESOP, and then, if refused by the ESOP, to the
Employer (or its delegate). The put option shall extend
XXI-4
for a period of sixty days following the date that shares of ESOP Stock are
distributed to the former Participant or designated beneficiary, at which time
the put option will temporarily lapse. After the end of the Plan Year in which
such put option lapses, and following notification to each former Participant or
beneficiary who continues to hold distributed ESOP Stock of the value of such
ESOP Stock as of the end of such Plan Year, each such former Participant or
beneficiary shall have an additional put option for the sixty-day period
immediately following the date such notification is given to such former
Participant or beneficiary. To exercise the put option provided under this
Section 21.14, a former Participant or designated beneficiary shall submit
written notice to the Committee of his desire to have the ESOP or Employer (or
its delegate) purchase all or a designated portion of the shares of ESOP Stock
which were distributed to him. Upon receipt of such written notice, the
Committee, on behalf of the ESOP shall have the right to direct the Trustee to
purchase all or a portion of the tendered ESOP Stock on the terms set forth
below. If the Committee, on behalf of the ESOP, declines to direct the Trustee
to purchase the tendered ESOP Stock or a portion thereof, it shall notify the
Employer of such determination and shall submit to the Company the former
Participant's or designated beneficiary's written notice of his desire to have
the ESOP or the Employer (or its delegate) purchase all or a designated portion
of the shares of ESOP Stock which were distributed to him. Upon receipt of such
written notice, the Company (or its delegate) shall purchase the tendered ESOP
Stock or such portion thereof as was not purchased by the ESOP on the terms set
forth below. It is specifically provided that the trustee or custodian of a
rollover individual retirement account of a former Participant shall have the
same put option as described herein with respect to such former Participant.
Any ESOP Stock purchased by the ESOP or the Employer (or its delegate)
pursuant to the put option provided in Paragraph (a) above shall be purchased as
soon as practicable after the exercise of such put option, at a price equal to
the fair market value of ESOP Stock as of the most recent valuation of ESOP
Stock preceding the date of such purchase; provided, however, that in the case
of purchase from a "disqualified person," as defined in section 4975(e)(2) of
the Code, such fair market value shall not exceed the fair market value of ESOP
Stock at the date of such purchase. Payment by the ESOP or the Employer (or its
delegate) for shares of ESOP Stock purchased pursuant to this put option shall
be, as determined by the Trustee or the Employer (or its delegate), by (1) a
single lump sum cash payment made within thirty days of the date of exercise of
the put option by the former Participant or designated beneficiary, or (2) in
the case of ESOP Stock which was received by the former Participant or
designated beneficiary in a distribution constituting the distribution within a
single taxable year of the balance of the Participant's ESOP Account under the
ESOP, in substantially equal annual installments over a period beginning not
later than thirty days after the exercise of the put option by the former
Participant or designated beneficiary and not exceeding five years after the put
option is exercised provided that provisions are made for adequate security for
the purchaser's debt obligation and reasonable interest is paid with respect to
the unpaid portion of the purchase price.
This Section 21.14 shall be inoperative in the event that the ESOP Stock
which is distributed to a Participant or designated beneficiary is, at the time
of such distribution, listed on a national securities exchange registered under
section 6 of the 1934 Act or quoted on a system sponsored by a national
securities association registered under section 15A(b) of the 1934 Act.
XXI-5
21.15 DIVERSIFICATION DISTRIBUTIONS AND TRANSFERS.
A Participant who has both completed at least ten years of participation in
the ESOP and attained the age of fifty-five shall be entitled to elect (1) to
receive a cash distribution equal in value to a percentage of the shares of ESOP
Stock acquired by the ESOP after December 31, 1986, and allocated to his ESOP
Account for the Plan Year immediately following the first Plan Year in which he
has both completed ten years of participation in the ESOP and attained the age
of fifty-five and the five Plan Years immediately following such Plan Year or
(2) to have the amount which he could have received as a cash distribution
pursuant to this Paragraph (a) transferred to his Rollover Contribution Account
under the Plan and invested in the same manner as such Account is invested under
the Plan. The percentage of the shares of ESOP Stock acquired by the ESOP after
December 31, 1986, and allocated to a Participant's ESOP Account as to which he
may elect to receive a cash distribution or have transferred to the his Rollover
Contribution Account under the Plan shall be: 25% as to the first Plan Year for
which an election may be made pursuant to this Paragraph (a); 25% reduced by the
number of shares of ESOP Stock with respect to which cash distributions were
previously made pursuant to this Paragraph (a) as to each of the second, third,
fourth, and fifth Plan Years for which an election may be made pursuant to this
Paragraph (a); and 50% reduced by the number of shares of ESOP Stock with
respect to which cash distributions or transfers were previously made pursuant
to this Paragraph (a) as to the last Plan Year for which an election may be made
pursuant to this Paragraph (a).
Participant's election pursuant to Paragraph (a) above as to a Plan Year
may be made at any time during the ninety-day period immediately following the
close of such Plan Year by filing a written election with the Committee. The
Committee shall direct the Trustee to liquidate the shares of ESOP Stock as to
which a Participant has made a cash distribution or transfer election and to
distribute or transfer such cash proceeds in accordance with such Participant's
election as soon as administratively feasible and not later than the expiration
of the one-hundred-and-eighty-day period immediately following the close of the
Plan Year as to which the Participant's election is made.
Paragraphs (a) and (b) to the contrary notwithstanding, a Participant shall
not be eligible to elect cash distributions pursuant to this Section 21.15 if
the fair market value of the shares of ESOP Stock which were acquired by the
ESOP on or after December 31, 1986, and allocated to his ESOP Account is less
than $500 immediately preceding the first day of the first Plan Year as to which
he otherwise would have been eligible to elect a cash distribution or transfer
pursuant to Paragraph (a) above.
21.16 ESOP STOCK VALUATION. For purposes of determining the fair market
value of ESOP Stock, the Committee may direct that appraisals of the value of
ESOP Stock be made by an independent appraiser annually or at such more frequent
periodic intervals as the Committee deems appropriate and the Committee shall be
entitled to base its determination as to the fair market value of ESOP Stock
upon the most recent of such independent appraisals. During any period when ESOP
Stock is not readily tradeable on an established securities market, all plan
activities involving ESOP Stock shall be based on valuations of ESOP Stock
rendered by an independent appraiser in accordance with the requirements of
section 401(a)(28) of the Code and Treasury Regulations promulgated thereunder.
This Section shall be inoperative in the event that
XXI-6
the ESOP Stock is listed on a national securities exchange registered under
Section 6 of the 1934 Act or quoted on a system sponsored by a national
securities association registered under Section 15A(b) of the1934 Act.
21.17 SPECIAL PROVISIONS REGARDING CHANGE OF CONTROL.
(a) DEFINITIONS. For purposes of this Section, the following terms and
phrases shall have these respective meanings:
(1) CHANGE OF CONTROL: The occurrence of either of the following
events:
(A) A third person, including a "group" as determined in
accordance with section 13(d)(3) of the 1934 Act, becomes the
beneficial owner of shares of the Company having 40% or more of the
total number of votes that may be cast for the election of Directors;
or
(B) As the result of, or in connection with, any cash tender or
exchange offer, merger, or other business combination, sale of assets
or contested election, or any combination of the foregoing
transactions (a "Transaction"), the persons who were Directors before
the Transaction shall cease to constitute a majority of the Directors
or the Board of Directors of any successor to the Company.
Notwithstanding the foregoing provisions of this definition, any such event
in clause (A) shall not be deemed a "Change of Control" if the acquisition
of such shares by such third person was expressly approved by a majority of
the Directors prior to such acquisition. In addition, notwithstanding the
foregoing provisions of this definition, any such event in clause (B) shall
not be deemed a "Change of Control" if such event was expressly approved by
a majority of the Directors prior to the consummation of such cash tender
or exchange offer, merger, or business combination, sale of assets, or
contested election.
(2) EXCHANGE OFFER: A tender offer for, or request or invitation for
tenders of, shares of ESOP Stock in exchange for any consideration other
than for all cash, as made to the ESOP or to holders of shares of Company
Stock generally.
(3) TENDER OFFER: A tender offer for, or request or invitation for
tenders of, shares of ESOP Stock in exchange for cash, as made to the ESOP
or to holders of shares of Company Stock generally.
(b) VESTING ON CHANGE OF CONTROL. Effective as of the occurrence of a
Change of Control, each Participant shall have a 100% Vested Interest in his
ESOP Account.
(c) AMENDMENT RESTRICTION. Notwithstanding anything to the contrary in the
Plan, the provisions of Section 21.17(b) may be amended at any time except that
such provisions may not and shall not be amended or changed in any respect that
is adverse to the interests of Participants provided pursuant to such section
after the occurrence of a Change of Control unless and to the extent that such
amendments or changes are (1) required by the Internal Revenue Service in order
to maintain the qualified status of the Plan under applicable provisions of the
XXI-7
Code or (2) approved by the affirmative vote and approval of at least 75% of the
Participants affected by such amendments or changes, voting per capita.
XXI-8
EXECUTED this ____ day of ___________, 200__.
OCEAN ENERGY, INC.,
A TEXAS CORPORATION
By:_______________________________________________
APPENDIX A
PLAN MERGER DOCUMENT
APPENDIX B
ESOP MERGER DOCUMENT
FIRST AMENDMENT
TO THE
OCEAN RETIREMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
PREAMBLE
1. Adoption and effective date of amendment. This amendment of the Plan is
adopted primarily to reflect certain provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended as good
faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and guidance issued thereunder. Except as otherwise
provided, this amendment shall be effective as of the first day of the first
Plan Year beginning after December 31, 2001.
2. Supersession of inconsistent provisions. This amendment shall supersede
the provisions of the Plan to the extent those provisions are inconsistent with
the provisions of this amendment.
A. EGTRRA MODEL AMENDMENTS
SECTION 1. LIMITATIONS ON CONTRIBUTIONS
1. Effective Date. This section shall be effective for limitation years
beginning after December 31, 2001.
2. Maximum annual addition. Except to the extent permitted under section
A.9 of this amendment and section 414(v) of the Code, if applicable, the annual
addition that may be contributed or allocated to a Participant's account under
the Plan for any limitation year shall not exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under
section 415(d) of the Code, or
(b) 100 percent of the Participant's compensation, within the meaning
of section 415(c)(3) of the Code, for the limitation year. The compensation
limit referred to in (b) shall not apply to any contribution for medical
benefits after separation from service (within the meaning of section
401(h) or section 419(A)(f)(2) of the Code) which is otherwise treated as
an annual addition.
SECTION 2. INCREASE IN COMPENSATION LIMIT
The annual compensation for each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001, shall not
exceed $200,000, as adjusted for cost-of-living increases in accordance with
section 401(a)(17)(B) of the Code. Annual compensation means compensation during
the Plan Year or such other consecutive 12-month period over which compensation
is otherwise determined under the Plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such
calendar year.
SECTION 3. MODIFICATION OF TOP-HEAVY RULES
1. Effective date. This section shall apply for purposes of determining
whether the Plan is a top-heavy plan under section 416(g) of the Code for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies the
minimum benefits requirements of section 416(c) of the Code for such years. This
section amends Article XX of the Plan.
2. Determination of top-heavy status.
2.1 Key employee. Key employee means any employee or former employee
(including any deceased employee) who at any time during the Plan Year that
includes the determination date was an officer of the employer having
annual compensation greater than $130,000 (as adjusted under section
416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a
5-percent owner of the employer, or a 1-percent owner of the employer
having annual compensation of more than $150,000. For this purpose, annual
compensation means compensation within the meaning of section 415(c)(3) of
the Code. The determination of who is a key employee will be in accordance
with section 416(i)(1) of the Code and the applicable regulations and other
guidance of general applicability issued thereunder.
2.2 Determination of present values and amounts. This section 2.2
shall apply for purposes of determining the present values of accrued
benefits and the amounts of account balances of employees as of the
determination date.
2.2.1 Distributions during year ending on the determination date.
The present values of accrued benefits and the amounts of account
balances of an employee as of the determination date shall be
increased by the distributions made with respect to the employee under
the Plan and any Plan aggregated with the Plan under section 416(g)(2)
of the Code during the 1-year period ending on the determination date.
The preceding sentence shall also apply to distributions under a
terminated Plan which, had it not been terminated, would have been
aggregated with the Plan under section 416(g)(2)(A)(i) of the Code. In
the case of a distribution made for a reason other than separation
from service, death, or disability, this provision shall be applied by
substituting "5-year period" for "1-year period."
2.2.2 Employees not performing services during year ending on the
determination date. The accrued benefits and accounts of any
individual who has not performed services for the employer during the
1-year period ending on the determination date shall not be taken into
account.
3. Minimum benefits.
3.1 Matching contributions. Employer matching contributions shall be
taken into account for purposes of satisfying the minimum contribution
requirements of section 416(c)(2) of the Code and the Plan. The preceding
sentence shall apply with respect to matching contributions under the Plan
or, if the Plan provides that the minimum contribution requirement shall be
met in another Plan, such other Plan. Employer
-2-
matching contributions that are used to satisfy the minimum contribution
requirements shall be treated as matching contributions for purposes of the
actual contribution percentage test and other requirements of section
401(m) of the Code.
SECTION 4. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
1. Effective date. This section shall apply to distributions made after
December 31, 2001.
2. Modification of definition of eligible retirement plan. For purposes of
the direct rollover provisions in section 10.5 of the Plan, an eligible
retirement plan (as defined in section 1.1(10) of the Plan) shall also mean an
annuity contract described in section 403(b) of the Code and an eligible plan
under section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for amounts
transferred into such plan from this plan. The definition of eligible retirement
plan shall also apply in the case of a distribution to a surviving spouse, or to
a spouse or former spouse who is the alternate payee under a qualified domestic
relation order, as defined in section 414(p) of the Code.
3. Modification of definition of eligible rollover distribution to exclude
hardship distributions. For purposes of the direct rollover provisions in
section 10.6 of the Plan, any amount that is distributed on account of hardship
shall not be an eligible rollover distribution (as defined in section 1.1(18) of
the Plan) and the distributee may not elect to have any portion of such a
distribution paid directly to an eligible retirement plan.
4. Modification of definition of eligible rollover distribution to include
after-tax employee contributions. For purposes of the direct rollover provisions
in section 10.6 of the Plan, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such
portion may be transferred only to an individual retirement account or annuity
described in section 408(a) or (b) of the Code, or to a qualified defined
contribution plan described in section 401(a) or 403(a) of the Code that agrees
to separately account for amounts so transferred, including separately
accounting for the portion of such distribution which is includible in gross
income and the portion of such distribution which is not so includible.
SECTION 5. ROLLOVERS FROM OTHER PLANS
Effective January 1, 2002, the Plan will accept Participant rollover
contributions and/or direct rollovers of distributions made after December 31,
2001, as follows: a direct rollover of an eligible rollover distribution from a
qualified plan described in section 401(a) or 403(a) of the Code, excluding
after-tax employee contributions, and a Participant contribution of an eligible
rollover distribution from a qualified plan described in section 401(a) or
403(a) of the Code. The Plan will not accept a Participant rollover contribution
of the portion of a distribution from an individual retirement account or
annuity described in section 408(a) or 408(b) of the Code that is eligible to be
rolled over and would otherwise be includible in gross income.
-3-
SECTION 6. ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
Rollovers disregarded in determining value of account balance for
involuntary distributions. For purposes of section 10.4 of the Plan, with
respect to distributions made after December 31, 2001, the value of a
Participant's nonforfeitable account balance shall be determined without regard
to that portion of the account balance that is attributable to rollover
contributions (and earnings allocable thereto) within the meaning of sections
402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If
the value of the Participant's nonforfeitable account balance as so determined
is $5,000 or less, the Plan shall immediately distribute the Participant's
entire nonforfeitable account balance. This section 6 shall not apply to any
Participant to whom the qualified joint and survivor annuity requirements of
sections 401(a)(11) and 417 of the Code apply.
SECTION 7. REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation section 1.401(m)-2
and section 4.5 of the Plan shall not apply for Plan Years beginning after
December 31, 2001.
SECTION 8. ELECTIVE DEFERRALS -- CONTRIBUTION LIMITATION
No Participant shall be permitted to have elective deferrals made under
this Plan, or any other qualified Plan maintained by the employer during any
taxable year, in excess of the dollar limitation contained in section 402(g) of
the Code in effect for such taxable year, except to the extent permitted under
section 9 of this amendment and section 414(v) of the Code, if applicable.
SECTION 9. CATCH-UP CONTRIBUTIONS
All employees who are eligible to make elective deferrals under this Plan
and who have attained age 50 before the close of the Plan year shall be eligible
to make catch-up contributions in accordance with, and subject to the
limitations of, section 414(v) of the Code. Such catch-up contributions shall
not be taken into account for purposes of the provisions of the Plan
implementing the required limitations of sections 402(g) and 415 of the Code.
The Plan shall not be treated as failing to satisfy the provisions of the Plan
implementing the requirements of section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions. This section shall apply to contributions after December
31, 2001.
SECTION 10. SUSPENSION PERIIOD FOLLOWING HARDSHIP DISTRIBUTION
A Participant who receives a distribution of elective deferrals after
December 31, 2001, on account of hardship shall be prohibited from making
elective deferrals and employee contributions under this and all other Plans of
the employer for 6 months after receipt of the distribution. A Participant who
receives a distribution of elective deferrals in calendar year 2001 on account
of hardship shall be prohibited from making elective deferrals and employee
contributions under this and all other Plans of the employer for the period
specified in the provisions of the Plan relating to the suspension of elective
deferrals that were in effect prior to this amendment.
-4-
SECTION 11. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT
A Participant's elective deferrals, qualified nonelective contributions,
qualified matching contributions, and earnings attributable to these
contributions shall be distributed on account of the Participant's severance
from employment. However, such a distribution shall be subject to the other
provisions of the Plan regarding distributions, other than provisions that
require a separation from service before such amounts may be distributed. This
section shall apply for distributions after December 31, 2001, regardless of
when the severance from employment occurred.
B. GUST MODEL AMENDMENT
Section 10.1(d) is amended by adding thereto the following:
With respect to distributions under the Plan made for calendar years
beginning on or after January 1, 2002, the Plan will apply the minimum
distribution requirements of section 401(a)(9) of the Code in accordance
with the regulations under section 401(a)(9) of the Code that were proposed
on January 17, 2001, notwithstanding any provisions of the Plan to the
contrary. This amendment shall continue in effect until the end of the last
calendar year beginning before the effective date of final regulations
under section 401(a)(9) of the Code or such other date as may be specified
in guidance published by the Internal Revenue Service.
C. OTHER AMENDMENTS
1. Section 1(17)(B) is amended effective as of January 1, 2001 to read as
follows:
"a nonresident alien who receives no earned income from the Employer
that constitutes income from sources within the United States, other than a
third country national employee who is on the Employer's United States
payroll (a "TCN"), provided, however, for purposes of Section 3.1 such a
TCN shall not be an Eligible Employee prior to January 1, 2002, or"
2. The first sentence of Section 3.1(a) is amended to read as follows:
A Participant may elect to defer an integral percentage from 1% to 50%
(or such lesser percentage as may be prescribed from time to time by the
Committee) of his Compensation for a Plan Year by having the Employer
contribute the amount so deferred to the Plan.
3. Paragraphs (b) and (c) of Section 3.1 are amended effective as of
January 1, 2001 to read as follows:
(b) A Participant's deferral election shall remain in force and effect
for all periods following the effective date of such election (which shall
be as soon as administratively feasible after the election is made) until
modified or terminated or until such Participant terminates his employment
or ceases to be an Eligible Employee. A Participant who has elected to
defer a portion of his Compensation may change his
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deferral election percentage (within the percentage limits set forth in
Paragraph (a) above), effective as of the first day of any payroll period
by communicating such new deferral election percentage to his Employer in
the manner and within the time period prescribed by the Committee.
(c) A Participant may cancel his deferral election effective as of the
first day of any payroll period by communicating such cancellation to his
Employer in the manner and within the time period prescribed by the
Committee. A Participant who so cancels his deferral election may resume
deferrals effective as of the first day of any payroll period after such
cancellation by communicating his new deferral election to his Employer in
the manner and within the time period prescribed by the Committee.
4. Section 3.1 is further amended by adding a new paragraph (h) thereto to
read as follows:
(h) An eligible Participant may make a catch-up contribution, as
provided in Section A.9 of this Amendment, in an integral percentage from
1% to 15% (or such lesser percentage as may be prescribed from time to time
by the Committee) of his Compensation for a Plan Year by having the
Employer contribute the amount so deferred to the Plan.
5. Section 3.2(a) is amended to read as follows:
(a) For each payroll period, the Employer shall contribute to the
Trust, as Employer Matching Contributions, an amount that equals 100% of
the Before-Tax Contributions that were made pursuant to Section 3.1 on
behalf of each of the Participants during such payroll period and that were
not in excess of 6% of each such Participant's Compensation for such
payroll period.
6. Section 3.2 is further amended by adding a new paragraph (c) thereto to
read as follows:
Notwithstanding anything in this Section 3.2 or elsewhere in the Plan
to the contrary, in no event shall an Employer Matching Contribution be
made with respect to a "catch-up" contribution made pursuant to the Plan.
Executed this _________________, 2001.
OCEAN ENERGY, INC.,
A DELAWARE CORPORATION
By: __________________________________________
Name: ____________________________________
Title: ___________________________________
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SECOND AMENDMENT
TO THE
OCEAN RETIREMENT SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)
WHEREAS, Ocean Energy, Inc. (the "Company") maintains the Ocean Retirement
Savings Plan (the "Plan"); and
WHEREAS, the Company desires to amend the Plan as requested by the Internal
Revenue Service in connection with its review of the request for a favorable
determination letter for the Plan as amended and restated as of January 1, 2001;
NOW, THEREFORE, Clause (B) of Section 1.1(31) of the Plan is hereby amended
effective as of January 1, 1998 to read as follows:
Receives "compensation" in excess of $80,000 (as adjusted
automatically to reflect any cost-of-living adjustments provided
pursuant to section 415 of the Code) during the Look-Back Year. As
used herein, "compensation" means compensation as defined in section
415(c)(3) of the Code and, for Plan Years beginning on and after
January 1, 2001, shall include any elective amounts that are not
includible in the employee's gross income by reason of section
132(f)(4) of the Code.
As amended hereby, the Plan is specifically ratified and reaffirmed.
EXECUTED this _______________, 2003.
OCEAN ENERGY, INC.
By: ____________________________________________
Name: ______________________________________
Title:______________________________________