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EXHIBIT 10(b)
UNITED STATES
LIME & MINERALS, INC.
EMPLOYEE STOCK
OWNERSHIP PLAN
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UNITED STATES LIME & MINERALS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
ARTICLE I INTRODUCTION 1
Section 1.01 Background and Effective Date 1
Section 1.02 Purpose 1
Section 1.03 Interpretation 2
ARTICLE II DEFINITIONS 2
ARTICLE III ELIGIBILITY AND PARTICIPATION 13
Section 3.01 Eligibility Requirements 13
Section 3.02 Excluded Employees 13
Section 3.03 Participation 13
Section 3.04 Special Provisions for Participants Who Enter the Armed Forces 14
ARTICLE IV CONTRIBUTIONS 14
Section 4.01 Employer Contributions 14
Section 4.02 Employee Contributions 15
Section 4.03 Rollover Contributions 15
Section 4.04 Trustee-to-Trustee Transfers 15
Section 4.05 Deduction Limitation 15
Section 4.06 Investment of Employer Contributions 15
Section 4.07 Diversification of Rights 16
Section 4.08 Acquisition Loans 18
Section 4.09 Accounting for Financed Shares 21
ARTICLE V ALLOCATIONS, VALUATION, AND VESTING 21
Section 5.01 Allocation of Employer Contributions and Forfeitures 21
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Section 5.02 Participants Eligible to Receive and Allocation 21
Section 5.03 Allocation Limitations 21
Section 5.04 Allocation of Financed Shares 27
Section 5.05 Allocation of Cash Dividends 28
Section 5.06 Allocation of Stock Dividends 28
Section 5.07 Allocation of Income 29
Section 5.08 Adjustments for Allocation Error 29
Section 5.09 Valuations 29
Section 5.10 Vesting 29
ARTICLE VI DISTRIBUTIONS 32
Section 6.01 Distributions While In-Service 32
Section 6.02 Distributions Upon Separation from Service - Small Account Balances 32
Section 6.03 Distributions Upon Separation from Service - Account Balances of $3,500 33
Section 6.04 Distributions Upon Retirement 33
Section 6.05 Distributions Upon Death 33
Section 6.06 Distributions Upon Disability 34
Section 6.07 Beneficiary Provisions 34
Section 6.08 Consent of the Participant Required for Distribution of Account Balances Greater than $3,500 35
Section 6.09 Commencement of Benefits 36
Section 6.10 Required Distributions 36
Section 6.11 Financed Shares 36
Section 6.12 Form of Distribution 36
Section 6.13 Method of Payment 37
Section 6.14 Trustee-to-Trustee Transfers 37
Section 6.15 Rollovers to Other Plans or IRAS 38
ARTICLE VII VOTING RIGHTS OF COMPANY STOCK 39
Section 7.01 Voting Rights 39
Section 7.02 Notice Required 39
ARTICLE VIII PLAN ADMINISTRATION 39
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Section 8.01 Duties of the Company 39
Section 8.02 The Committee 40
Section 8.03 Appointment of Advisor 40
Section 8.04 Powers and Duties of the Committee 40
Section 8.05 Organization and Operation 41
Section 8.06 Claims Procedure 41
Section 8.07 Records and Reports 42
Section 8.08 Liability 43
Section 8.09 Reliance and Statements 43
Section 8.10 Remuneration and Bonding 43
Section 8.11 Committee Decisions Final 44
ARTICLE IX TRUST AGREEMENT 44
Section 9.01 Establishment of Trust 44
Section 9.02 Contributions to Trustee 44
Section 9.03 Purpose of the Trust 44
Section 9.04 Distributions 45
Section 9.05 Exclusive Benefit 45
Section 9.06 Expenses of the Plan and Trust 46
Section 9.07 Duties and Responsibilities of Trustee 46
Section 9.08 Specific Powers and Duties of Trustee 47
Section 9.09 Investment Manager 50
Section 9.10 Compensation of Trustee and Agents 50
Section 9.11 Reports of Trustee 50
Section 9.12 Resignation, Removal, and Substitution of Trustee 51
Section 9.13 The Committee 51
Section 9.14 Amendment and Termination 51
Section 9.15 Irrevocability 52
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Section 9.16 Parties to the Trust Agreement 52
Section 9.17 Trustee Action 53
ARTICLE X AMENDMENT, TERMINATION, AND MERGER 53
Section 10.01 Amendment 53
Section 10.02 Termination 53
Section 10.03 Merger, Consolidation, Transfer 54
ARTICLE XI TOP-HEAVY PROVISIONS 54
Section 11.01 Applicability 54
Section 11.02 Top-Heavy Definitions 54
Section 11.03 Minimum Allocation 57
Section 11.04 Nonforfeitability of Minimum Allocation 58
Section 11.05 Allocation Limitations 58
Section 11.06 Top-Heavy Vesting 58
ARTICLE XII GENERAL PROVISIONS 59
Section 12.01 Governing Law 59
Section 12.02 Power to Enforce 59
Section 12.03 Alienation of Benefits 59
Section 12.04 Not an Employment Contract 59
Section 12.05 Discretionary Acts 60
Section 12.06 Interpretation 60
ARTICLE XIII PARTICIPATING EMPLOYERS 60
Section 13.01 Adoption by Other Employers 60
Section 13.02 Requirements of Participating Employers 60
Section 13.03 Designation of Agent 61
Section 13.04 Participating Employer's Contribution 61
Section 13.05 Discontinuance of Participation 61
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Section 13.06 Committee's Authority 62
ARTICLE XIV SIGNATURE PAGE 62
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ARTICLE I
INTRODUCTION
SECTION 1.01 BACKGROUND AND EFFECTIVE DATE.
The Company established the Rangaire Corporation Employee Stock Ownership Plan
(the "Plan") to enable Participants to share in the growth and prosperity of
the Company and to provide Participants with an opportunity to accumulate
capital for their future economic security effective as of August 1, 1975. The
Plan has been amended from time to time, with a total of five amendments
through 1984, and was restated and amended to comply with the Employee
Retirement Income Security Act of 1974, as amended, and the Internal Revenue
Code of 1954, as amended, effective August 1, 1985. The Company now desires to
restate and amend the Plan to reflect applicable changes in the law and to
change the name of the Plan to reflect the change in corporate name.Therefore,
the Company hereby amends and restates the Plan as the United States Lime &
Minerals, Inc. Employee Stock Ownership Plan, effective as of August 1, 1989
(except as otherwise provided herein).
The terms of this document set forth the controlling provisions of the Plan for
all persons who are eligible Employees on or after the Effective Date;
provided, however, that to the extent required under section 411(d)(6) of the
Code and related Regulations, the applicable provisions of the preceding Plan
documents are incorporated herein by reference.
Except as may be required by ERISA or the Code, the rights of any person whose
status as an Employee has terminated shall be determined pursuant to the Plan
as in effect on the date such employment terminated, unless a subsequently
adopted provision of the Plan is made specifically applicable to such person.
SECTION 1.02 PURPOSE.
The purpose of the Plan is to reward eligible Employees of the Employers for
their loyal and faithful service by providing them with an opportunity to
become stockholders of the Company. The Plan is designed to invest primarily
in Company Stock. The benefits provided by the Plan will be paid from the
Trust and will be in addition to the benefits eligible Employees are entitled
to receive under any other programs of the Employers and from the federal
Social Security Act. The Plan and the Trust are established and shall be
maintained for the exclusive benefit of the eligible Employees of the Employers
and their Beneficiaries. The Plan is intended to be qualified under section
401(a) of the Code and the Trust under the Plan is intended to be exempt from
tax under section 501(a) of the Code. The Plan also is intended to be a stock
bonus plan qualified under section 401(a) of the Code and an ESOP.
The Plan is permitted to borrow funds to finance the acquisition of Company
Stock. Any loans made to the Plan to finance the acquisition of Company Stock
must meet the requirements of an Acquisition Loan, as defined in Section 2.02
of the Plan.
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SECTION 1.03 INTERPRETATION.
Throughout the Plan, certain words and phrases have meanings which are
specifically defined for purposes of the Plan. These words and phrases can be
identified in that the first letter of the word or words in the phrase are
capitalized. The definitions of these words and phrases are principally set
forth in Article II of the Plan.
Wherever appropriate, pronouns of any gender shall be deemed synonymous as
shall singular and plural pronouns.
ARTICLE II
DEFINITIONS
When used herein the following words and phrases shall have the meaning set
forth below:
SECTION 2.01 ACCOUNTS.
"Accounts" or "Account" means the interest of a Participant in the assets of
the Trust.
Each Participant's interest shall be segregated into the following account(s)
which shall reflect, in addition to contributions allocated thereto, earnings,
gains, losses, and expenses:
a. Company Stock Account. The separate account maintained for a Participant
reflecting Company Stock allocated to the Participant and any earnings,
gains, losses, and expenses thereon.
b. Other Investments Account. The separate account maintained for a
Participant reflecting investments of the Plan other than Company Stock,
attributable to Employer Contributions contributed to the Plan after the
Effective Date which are not invested in Company Stock and any earnings,
gains, losses, and expenses thereon.
c. Special Stock Account. The portion of the Company Stock Account
maintained for Participants to whom shares of Company Stock attributable
to specially designated Employer contributions were allocated. The
Special Stock Account was initially established and maintained to qualify
the Plan as a tax credit employee stock ownership plan. Contributions
are no longer allocated to the Special Stock Account, and the balance of
the Special Stock Account is 100% vested notwithstanding any provision of
this Plan to the contrary.
The Committee may in its discretion, establish additional accounts and
subaccounts within each separate account.
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SECTION 2.02 ACQUISITION LOAN.
"Acquisition Loan" means a loan (or other extension of credit) made to the
Trust to finance the acquisition of Company Stock, which satisfies the
requirements of section 2550.408b-3 of the Department of Labor regulations,
section 54.4975-7(b) of the Regulations and Section 4.08 of the Plan.
SECTION 2.03 AFFILIATE.
"Affiliate" means a member of a "controlled group of corporations," within the
meaning of section 414(b) of the Code which includes the Company; any
unincorporated trade or business which is in common control with the Company as
determined in accordance with section 414(c) of the Code; or any organization
which is a member of an affiliated service group with the Company within the
meaning of section 414(m) of the Code; and any other organization required to
be aggregated with the Company pursuant to section 414(o) of the Code.
SECTION 2.04 ALLOCATED SHARES.
"Allocated Shares" mean shares of Company Stock that have been allocated to and
are held in Participants' Company Stock Accounts.
SECTION 2.05 BENEFICIARY.
"Beneficiary" means the person or persons or a trust affirmatively designated
by the Participant to receive all or a portion of such Participant's benefits,
in accordance with the provisions of Article VI, in the event the Participant
dies.
SECTION 2.06 CODE.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
SECTION 2.07 COMMITTEE.
"Committee" means the person or persons described in Section 8.02 of the Plan.
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SECTION 2.08 COMPANY.
"Company" means United States Lime & Minerals, Inc., and any successor through
merger, consolidation, or purchase of substantially all of the assets of United
States Lime & Minerals, Inc. which, within ninety (90) days after such
succession, agrees to continue the Plan.
SECTION 2.09 COMPANY STOCK.
"Company Stock" means shares of common stock issued by the Company or by an
Affiliate which is readily tradable on an established securities market. If
there is no common stock which meets these requirements, "Company Stock" means
shares of common stock issued by the Company or by an Affiliate having the
greatest voting power and dividend rights and which constitute "employer
securities" under section 409(l) of the Code and "qualifying employer
securities" under section 4975(e)(8) of the Code and section 54.4975-12 of the
Regulations. Noncallable preferred stock shall also constitute "Company
Stock," if such stock is convertible at any time into stock which constitutes
"Company Stock" and, if such conversion is at a conversion price which (as of
the date of acquisition by the Plan) is reasonable.
SECTION 2.10 COMPENSATION.
"Compensation" means all remuneration paid to a Participant by the Employer
during the Plan Year as wages within the meaning of section 3401(a) and all
other payments of compensation to an Employee by the Employer during the Plan
Year for which the Employer is required to furnish a Form W-2. Compensation is
determined without regard to any rules under section 3401(a) of the Code that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed. Compensation shall include any amount
that, as a result of a salary reduction agreement, is not includible in a
Participant's gross income under sections 125, 402(e)(3), 402(h) or 403(b) of
the Code. Effective for Plan Years beginning on or after August 1, 1995,
Compensation shall not include the amount of any bonus paid to a Participant
during such Plan Year.
The annual Compensation of each Participant taken into account under the Plan
for any Plan Year beginning prior to January 1, 1994 shall not exceed $200,000,
as adjusted by the Secretary of the Treasury in accordance with section
401(a)(17) of the Code. For Plan Years beginning on or after January 1, 1994,
the Compensation Limit shall be $150,000 as adjusted by the Secretary of the
Treasury in accordance with section 401(a)(17) of the Code ("Compensation
Limit"). The Compensation Limit for a Plan Year shall be the Compensation
Limit in effect for the calendar year in which the Plan Year begins. If
Compensation is determined on the basis of a period of less than twelve (12)
calendar months, then the
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Compensation Limit is the Compensation Limit in effect for the calendar year in
which the period begins multiplied by the ratio obtained by dividing the number
of full months in the period by twelve (12). In determining the Compensation
of a Participant for purposes of the Compensation Limit, the rules of section
414(q)(6) of the Code shall apply, except in applying such rules, the term
"family" shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age nineteen (19) before
the close of the Plan Year. If as a result of the application of such rules
the Compensation Limit is exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such individual's Compensation
as determined prior to the application of this limitation.
SECTION 2.11 DEFINED BENEFIT PLAN.
"Defined Benefit Plan" means a defined benefit plan within the meaning of
section 3(35) of ERISA maintained by the Company or an Affiliate which is
intended to meet the requirements of section 401(a) of the Code.
SECTION 2.12 DEFINED CONTRIBUTION PLAN.
"Defined Contribution Plan" means a defined contribution plan within the
meaning of section 3(34) of ERISA maintained by the Company or an Affiliate
which is intended to meet the requirements of section 401(a) of the Code.
SECTION 2.13 DISABILITY.
"Disability" means a physical or mental condition which, in the opinion of the
Committee, totally and presumably permanently prevents a Participant from
performing substantially the same duties assigned to such Participant by the
Participant's Employer at the time such condition develops. A determination
that a Disability exists shall be based upon competent medical evidence
satisfactory to the Committee. The date any Participant's Disability occurs
shall be deemed to be the date such condition is determined to exist by the
Committee.
SECTION 2.14 EARLY RETIREMENT DATE.
"Early Retirement Date" means the first day of the month coinciding with or
following the date on which a Participant attains fifty-five and (55) years of
age and has completed at least ten (10) Years of Service with the Employer.
"Early Retirement" shall refer to a Participant's retirement after his Early
Retirement Date, but before attaining Normal Retirement Age.
SECTION 2.15 EFFECTIVE DATE.
Unless otherwise provided, "Effective Date" of this Plan means August 1, 1989.
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SECTION 2.16 EMPLOYEE.
"Employee" means any common law employee of the Employer. The term Employee
shall not include any individual who is a Leased Employee. A "Leased Employee"
means any person (other than an Employee of an Employer) who pursuant to an
agreement between an Employer and any other person ("Leasing Organization") has
performed services for such Employer (or for the recipient and related persons
determined in accordance with section 414(n)(6) of the Code) on a substantially
full-time basis for a period of at least one year, and such services are of a
type historically performed by employees in the business field of such
Employer.
SECTION 2.17 EMPLOYER.
"Employer" means the Company and any Affiliate which adopts the Plan pursuant
to Article XIV. The Company shall act as agent for each other participating
Affiliate for purposes of this Plan.
SECTION 2.18 EMPLOYER CONTRIBUTIONS.
"Employer Contributions" means the contributions by the Employer as described
in Section 4.01.
SECTION 2.19 EMPLOYMENT COMMENCEMENT DATE.
"Employment Commencement Date" means the date an Employee first performs an
Hour of Service for an Employer.
SECTION 2.20 ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
SECTION 2.21 ESOP.
"ESOP" means an employee stock ownership plan that meets the requirements of
section 4975(e)(7) of the Code and section 54.4975-11 of the Regulations.
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SECTION 2.22 FINANCED SHARES.
"Financed Shares" means shares of Company Stock acquired by the Trust with the
proceeds of an Acquisition Loan.
SECTION 2.23 FORFEITURES.
"Forfeitures" means the non-Vested portion of a Participant's Account which is
allocated to other Participants on account of a termination of employment by
the Participant prior to the time such Participant becomes one hundred percent
(100%) Vested in the Account. A Forfeiture occurs on the earlier of the last
day of the Plan Year following the distribution of the entire Vested portion of
a Participant's Account, or the last day of the Plan Year in which the fifth
(5th) consecutive One-Year Break in Service occurs.
SECTION 2.24 HIGHLY COMPENSATED EMPLOYEE.
For purposes of this definition, Employer includes Affiliates that have not
adopted the Plan.
a. For Plan Years beginning prior to August 1, 1994, the term "Highly
Compensated Employee" means any Employee who performs service for the
Employer during the determination year (defined herein) and who, during
the look-back year (defined herein): (1) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to section 415(d) of
the Code); (2) received Compensation from the Employer in excess of
$50,000 (as adjusted pursuant to section 415(d) of the Code) and was a
member of the "top-paid group" as defined in section 414(q)(4) of the
Code, for such year; or (3) was an officer of the Employer and received
Compensation during such year that is greater than fifty percent (50%) of
the dollar limitation in effect under section 415(b)(1)(A) of the Code.
The term "Highly Compensated Employee" also includes: (1) Employees who
are both described in the preceding sentence, if the term "determination
year" is substituted for the term "look-back year" and the Employee is
one of the one hundred (100) Employees who received the most Compensation
from the Employer during the determination year; and (2) Employees who
are five percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation requirement of (3) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the "determination year" shall be the calendar year
ending within the Plan Year. The "look-back year" shall be the
twelve-month period immediately preceding the determination year.
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The term "Highly Compensated Employee" also means any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or after
the Employee's fifty-fifth (55th) birthday.
If any Employee is, during a determination year or look-back year, a
family member of either a five percent (5%) owner who is an active or
former Employee or a Highly Compensated Employee who is one of the ten
most Highly Compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the family member and the
five-percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and five percent owner or
top-ten Highly Compensated Employee shall be treated as a single Employee
receiving Compensation and Plan contributions or benefits equal to the
sum of such Compensation and contributions or benefits of the family
member and five percent owner or top-ten Highly Compensated Employee.
For purposes of this Section 2.24, family member includes the Spouse,
lineal ascendants and descendants of the Employee or former Employee, and
the Spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of Employees in the top-paid
group, the top one hundred (100) Employees, the number of Employees
treated as officers and the Compensation that is considered, will be made
in accordance with section 414(q) of the Code and the Regulations
thereunder.
b. For Plan Years beginning on August 1, 1994 and after, the term "Highly
Compensated Employee" means any Employee who performs service for the
Employer as of each July 31 who: (1) was a five percent owner of the
Employer; (2) received Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to section 415(d) of the Code); (3)
received Compensation from the Employer in excess of $50,000 (as adjusted
pursuant to section 415(d) of the Code) and was a member of the "top-paid
group" as defined in section 414(q)(4) of the Code, for such year; or (4)
was an officer of the Employer and received Compensation during such year
that is greater than fifty percent (50%) of the dollar limitation in
effect under section 415(b)(1)(A) of the Code.
If any Employee is a family member of either a five percent (5%) owner
who is an active or former Employee or a Highly Compensated Employee who
is one of the ten most Highly Compensated Employees ranked on the basis
of Compensation paid by the Employer during such year, then the family
member and the five-percent owner or top- ten Highly Compensated Employee
shall be aggregated. In such case, the family member and five percent
owner or top-ten Highly Compensated Employee shall be treated as a single
Employee receiving Compensation and Plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the
family member and five percent owner or top-ten Highly Compensated
Employee. For
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purposes of this Section 2.24, family member includes the Spouse, lineal
ascendants and descendants of the Employee or former Employee, and the
Spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of Employees in the top-paid
group, the top one hundred (100) Employees, the number of Employees
treated as officers and the Compensation that is considered, will be made
in accordance with section 414(q) of the Code and the Regulations
thereunder.
SECTION 2.25 HOUR OF SERVICE.
For purposes of this definition, Employer includes Affiliates which have not
adopted the Plan. "Hour of Service" means:
a. Each hour for which an Employee is paid or entitled to payment for the
performance of duties for the Employer. However, for Plan Years ending
on or prior to July 31, 1995, salaried Employees shall be credited with
forty-five (45) Hours of Service for each week that such Employees are
entitled to be credited with one Hour of Service under this Section 2.25.
Beginning August 1, 1995, salaried Employees shall be credited with an
Hour of Service for each hour such Employee is paid or entitled to
payment for the performance of services. These hours will be credited to
the Employee for the computation period in which the duties are
performed.
b. Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty, or leave of absence. No
more than five hundred one (501) Hours of Service will be credited under
this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours under this
paragraph will be calculated and credited pursuant to section 2530.200b-2
of the Department of Labor regulations which is incorporated herein by
this reference; and
c. Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service
will not be credited both under paragraph (a) or paragraph (b), as the
case may be, and under this paragraph (c). These hours will be credited
to the Employee for the computation period or periods to which the award
or agreement pertains rather than the computation period in which the
award, agreement, or payment is made.
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SECTION 2.26 LOAN SUSPENSE ACCOUNT.
"Loan Suspense Account" means the Account to which the Company Stock acquired
with the proceeds of an Acquisition Loan are initially allocated, as described
in Section 5.04.
SECTION 2.27 NON-HIGHLY COMPENSATED EMPLOYEE.
The term "Non-Highly Compensated Employee" means an Employee who is not a
Highly Compensated Employee.
SECTION 2.28 NORMAL RETIREMENT AGE.
"Normal Retirement Age" means age sixty-five (65). "Normal Retirement Date"
shall mean the first day of the month which coincides with or, if none, next
follows the sixty-fifth (65th) birthday of a Participant. "Normal Retirement"
shall refer to a Participant's retirement after his Normal Retirement Date.
SECTION 2.29 ONE-YEAR BREAK IN SERVICE.
"One-Year Break in Service" means a twelve-consecutive-month period during
which the Participant does not complete more than five hundred (500) Hours of
Service. For purposes of this definition, Employer includes Affiliates which
have not adopted the Plan.
Solely for purposes of determining whether a break in service for participation
and vesting purposes has occurred in a computation period, an individual who is
absent from work for maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such hours cannot be
determined, eight (8) Hours of Service per day of such absence. For purposes
of this paragraph, an absence from work for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the individual, (2) by
reason of a birth of a child of the individual, (3) by reason of the placement
of a child with the individual in connection with the adoption of such child by
such individual, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited (1) in the computation period
in which the absence begins, if the crediting is necessary to prevent a break
in service in that period, or (2) in all other cases, in the following
computation period.
However, no credit will be given for such absences from work, unless the
Employee furnishes to the Committee such timely information as it may
reasonably require to establish that the absence from work is for the reason(s)
referred to above, and the number of days for which there was such an absence.
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SECTION 2.30 PARTICIPANT.
"Participant" means an Employee of the Employer who participates in the Plan
under Article III; a former Employee who had participated in the Plan under
Article III, and who continues to be entitled to a Vested benefit under the
Plan; or a former Employee who has participated in the Plan under Article III,
and who has not yet incurred a One-Year Break in Service.
SECTION 2.31 PLAN.
"Plan" means the United States Lime & Minerals, Inc. Employee Stock Ownership
Plan and Trust, as set forth herein, and as may be amended from time to time.
SECTION 2.32 PLAN YEAR.
"Plan Year" means the twelve-consecutive-month period which begins on August 1,
and each anniversary thereof.
SECTION 2.33 REGULATIONS.
"Regulations" means the regulations promulgated by the Secretary of the
Treasury that pertain to the Code.
SECTION 2.34 REQUIRED DISTRIBUTIONS.
"Required Distribution" means the minimum required distribution to a
Participant upon attaining age 70 1/2, as required under section 401(a)(9) of
the Code and set forth in Section 6.10.
SECTION 2.35 SPOUSE.
"Spouse" means the Spouse or surviving Spouse of the Participant, provided that
a former Spouse shall be treated as the Spouse or Surviving Spouse to the
extent provided under a qualified domestic relations order as defined in
section 414(p) of the Code.
SECTION 2.36 TOP-HEAVY.
For the definition of Top-Heavy and related terms, see Article XI.
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SECTION 2.37 TRUST.
"Trust" means the Trust as established in Article IXand maintained for purposes
of the Plan which is administered by the Trustee in accordance with the
provisions of the Trust agreement between the Company and the Trustee.
SECTION 2.38 TRUSTEE.
"Trustee" means the party or parties named under the Trust who shall have
exclusive authority and discretion to manage and control the assets of the
Plan, except to the extent the Plan expressly provides that the Trustee is
subject to the direction of the Committee in accordance with a comprehensive
basis of accounting determined by the Committee.
SECTION 2.39 TRUST FUND.
"Trust Fund" means all money and other property received or held by the
Trustee, plus all income and gains and minus all losses, expenses, and
distributions chargeable to the Trust.
SECTION 2.40 UNALLOCATED SHARES.
"Unallocated Shares" means shares of Company Stock that are being held in the
Loan Suspense Account.
SECTION 2.41 VALUATION DATE.
"Valuation Date" means the last day of the Plan Year, and any other date
specifically designated by the Committee, in its sole discretion, which is
deemed appropriate or necessary in order to establish the current value of the
Trust Fund under ERISA section 3(26) to value Trust assets, on which date the
fair market value of Trust assets shall be determined. The designation of a
special date by the Committee for valuation purposes shall not change the
Valuation Date from the last day of the Plan Year and shall be in addition to
such date, unless otherwise determined by the Employer or Committee.
SECTION 2.42 VESTED.
"Vested" means the nonforfeitable portion of any Account maintained on behalf
of a Participant.
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SECTION 2.43 YEAR OF SERVICE.
For purposes of vesting, "Year of Service" means a Plan Year during which an
Employee is credited with at least 1,000 Hours of Service.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
SECTION 3.01 ELIGIBILITY REQUIREMENTS.
Except for Employees described in Section 3.02, all Employees shall be eligible
to participate in the Plan.
SECTION 3.02 EXCLUDED EMPLOYEES.
Employees in a unit of Employees covered by a collective bargaining agreement
between the Employer and Employee representatives, if retirement benefits were
the subject of good faith bargaining, shall be excluded from the Plan. For
this purpose, the term "employee representatives" does not include any
organization more than half of whose members are Employees who are owners,
officers, or executives of the Employer.
SECTION 3.03 PARTICIPATION.
a. An Employee shall become a Participant in the Plan on the first day of
the Plan Year coinciding with or next following the Employee's Employment
Commencement Date.
b. In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will
participate immediately.
c. In the case of a Participant who terminates employment with the Employer
and is subsequently reemployed by the Employer before a One-Year Break in
Service occurs, such Participant shall continue to participate in the
Plan in the same manner as if such termination had not occurred.
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d. In the case of a Participant who terminates employment with the Employer
and is subsequently reemployed by the Employer after incurring a One-Year
Break in Service, such Participant shall begin participating in the Plan
immediately upon such Participant's Employment Commencement Date. If the
former Participant received a distribution of such Participant's entire
Vested interest (including where the Participant had no Vested amount in
such Participant's account) prior to reemployment, such Participant's
forfeited Accounts shall be restored only if the Participant repays the
full amount distributed before the earlier of five (5) years after the
first date on which the Participant is subsequently reemployed by the
Employer or the close of the first period of five (5) consecutive
One-Year Breaks in Service commencing after the distribution. If a
distribution occurs for any reason other than a separation from service,
the time for repayment may not end earlier than five (5) years after the
date of the distribution. In the event the former Participant repays the
full amount distributed, the undistributed portion of the Participant's
Accounts must be restored in full, unadjusted by gains or losses
occurring after the Valuation Date preceding the distribution.
SECTION 3.04 SPECIAL PROVISIONS FOR PARTICIPANTS WHO ENTER THE ARMED FORCES.
If a Participant is absent from employment for voluntary or involuntary
military service with the armed forces of the United States and returns to
employment as an Employee within the period required under the law pertaining
to veterans' reemployment rights, the Participant shall receive service credit
for the period of absence from employment.
ARTICLE IV
CONTRIBUTIONS
SECTION 4.01 EMPLOYER CONTRIBUTIONS.
Each Plan Year the Employer, in its discretion, may make an Employer
Contribution to the Trust, as the Board of Directors of such Employer shall
determine. At the time of determining and authorizing any contribution
hereunder, the Board of Directors of the Employer shall determine what portion,
of such contribution is to be allocated between the other Investments Accounts
and the Company Stock Account. Notwithstanding the ability of the Employer to
make discretionary contributions to the Plan, the Employer shall be required to
make cash contributions to the Plan in such amounts and at such times as may be
needed to provide the Trustee with cash to pay any currently maturing
obligations under an Acquisition Loan.
Employer Contributions will be paid in cash, Company Stock, or other property
as the Employer may, from time to time, determine. Company Stock and other
property will be valued at their then fair market value. Notwithstanding the
Employer's discretion with respect to the form of Employer Contribution, an
Employer Contribution shall not be paid in any form which would make such
contribution a prohibited transaction under section 406 of ERISA or section
4975 of the Code.
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Notwithstanding any other Employer Contributions for any Plan Year, the
Employer shall make such additional contributions as necessary to reinstate
former Participant's Accounts pursuant to Section 3.03(d), and to meet the
special dividend allocation requirement on Company Stock under Section 5.05(b).
The Employer shall pay to the Trustee any discretionary contributions to the
Plan for each Plan Year no later than the time prescribed for filing the
Employer's federal income tax return, including extensions, for the tax year
ending with or within such Plan Year.
SECTION 4.02 EMPLOYEE CONTRIBUTIONS.
Employee contributions are neither required nor permitted under the Plan.
SECTION 4.03 ROLLOVER CONTRIBUTIONS.
The Committee may in its discretion accept rollover contributions of assets
from another plan, if the Participant demonstrates to the satisfaction of the
Committee that such Plan satisfies the applicable requirements of section
401(a) of the Code.
SECTION 4.04 TRUSTEE-TO-TRUSTEE TRANSFERS.
The Committee may in its discretion accept a transfer of assets from another
plan if the Participant demonstrates to the satisfaction of the Committee that
such plan satisfies the applicable requirements of section 401(a) of the Code.
However, transfers of funds to this Plan shall not be permitted, if such
transfer is from a defined benefit plan, or from a defined contribution plan
that is either subject to the funding standards of Code section 412 or other
wise subject to the requirements of Code section 401(a)(11).
SECTION 4.05 DEDUCTION LIMITATION.
Employer Contributions for any Plan Year under this Article IV are conditioned
on such contributions being deductible for such Plan Year under section 404 of
the Code.
SECTION 4.06 INVESTMENT OF EMPLOYER CONTRIBUTIONS.
a. The Plan is designed to invest primarily in Company Stock.
b. Employer contributions in cash and other cash received by the Trust Fund
shall first be applied to pay any current obligations of the Trust.
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c. With due regard to subparagraph (a) above, the Committee may also direct
the Trustee to invest funds under the Plan in other property described in
the Trust or in life insurance policies to the extent permitted by
Article VII, or the Trustee may hold such funds in cash or cash
equivalents.
d. The Plan may not obligate itself to acquire Company Stock from a
particular holder thereof at an indefinite time determined upon the
happening of an event such as the death of the holder.
e. The Plan may not obligate itself to acquire Company Stock under a put
option binding upon the Plan. However, at the time a put option is
exercised, the Plan may be given an option to assume the rights and
obligations of the Employer under a put option binding upon the Employer
pursuant to Section 4.08(i).
f. The protections and rights set forth in Section 4.08(h) and 4.08(i) with
respect to Company Stock acquired with the proceeds of an Acquisition
Loan are nonterminable as set forth in section 54.4975-11(a)(3)(ii) of
the Regulations.
g. All purchases of Company Stock shall be made at a price which, in the
judgment of the Committee, does not exceed the fair market value thereof.
All sales of Company Stock shall be made at a price which, in the
judgment of the Committee, is not less than the fair market value
thereof. The valuation rule set forth in Section 5.09 shall be
applicable.
h. The Trustee may time the execution of purchases and sales of shares of
Company Stock, for the purpose of limiting or spreading daily volume, or
otherwise, as deemed in the best interests of the Participants and their
Beneficiaries.
SECTION 4.07 DIVERSIFICATION RIGHTS.
a. Each Qualified Participant, as defined below, shall be permitted to
direct the Plan as to the investment of up to twenty-five percent (25%)
of such Participant's Accounts within ninety (90) days after the last day
of each Plan Year during the Participant's Qualified Election Period, as
defined below. Within ninety (90) days after the close of the last Plan
Year in the Participant's Qualified Election Period, a Qualified
Participant may direct the Plan as to the investment of up to fifty
percent (50%) of the value of such Account balance. For the purposes of
this Section 4.07:
1. "Qualified Participant" means a Participant who has attained age
fifty-five (55) and who has completed at least ten (10) years of
participation in the Plan and.
2. "Qualified Election Period" means the Plan Year and the five
successive Plan Year periods following the Plan Year in which the
Participant becomes a Qualified Participant.
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b. The Qualified Participant's direction shall be provided to the Committee
in writing; shall be effective no later than one hundred eighty (180)
days after the close of the Plan Year to which the direction applies; and
shall specify which, if any, of the options set forth in this Section
4.07 the Participant selects and the portion of his Vested Account
balance to be invested in accordance with direction.
c. The Qualified Participant, making the election provided in this Section
4.07 may select any of the following options:
1. At the election of the Qualified Participant, the Plan shall
distribute (notwithstanding section 409(d) of the Code) the
portion of the Participants Vested Account that is covered by the
election made within ninety (90) days after the last day of the
period during which the election can be made. Such distributions
shall be subject to such requirements of the Plan concerning put
options as would otherwise apply to a distribution of Company
Stock from the Plan. This subsection (c)(1) shall apply
notwithstanding any other provisions of the Plan other than such
provisions as require the consent of the Participant to a
distribution with a present value in excess of $3,500. If the
Participant does not consent, such amount shall be retained in
this Plan.
2. In lieu of a distribution under subsection (c)(1), the Qualified
Participant who has the right to receive a cash distribution
under subsection (c)(1) above may direct the Plan to transfer the
portion of the Participant's Account that is covered by the
election to any qualified plan of the Company which accepts such
transfers, provided that such plan permits employee directed
investment, such plan offers at least three (3) investment
options other than Company Stock consistent with regulations to
be issued by the Secretary of the Department of Labor and such
plan does not invest in Company Stock to a substantial degree.
Such transfer shall be made no later than ninety days after the
last day of the period during which the election can be made.
d. Pursuant to this Section 4.07, each Participant is authorized and
empowered, in such Participant's sole and absolute discretion, to give
directions to the Trustee in such form as the Trustee may require
concerning the investment of the Participant's Account, which directions
must be followed by the Trustee. Neither the Trustee nor any other
persons including Committee or otherwise shall be under any duty to
question any such direction of the Participant or to make any suggestions
to the Participant in connection therewith, and the Trustee shall comply
as promptly as practicable with directions given by the Participant
hereunder. Any such direction may be of a continuing nature or otherwise
and may be revoked by the Participant at any time in such form as the
Trustee may require. The Trustee may refuse to comply with any direction
from the Participant in the event the Trustee, in its sole and absolute
discretion, deems such direction improper by virtue of applicable law.
The Trustee shall not be responsible or liable for any loss or expense
which may result from the Trustee's refusal or failure to
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comply with any directions from the Participant. Any costs and expenses
related to compliance with the Participant's directions shall be borne by
the Participant's Account.
SECTION 4.08 ACQUISITION LOANS.
The Company may direct the Trustee to incur Acquisition Loans from time to time
to finance the acquisition of Company Stock for the Trust or to repay a prior
Acquisition Loan, provided such loan is primarily for the benefit of
Participants and their Beneficiaries and such Acquisition Loan meets the
following requirements:
a. The terms of an Acquisition Loan, at the time the Acquisition Loan is
made, must be at least as favorable to the Plan as the terms of a
comparable loan resulting from arm's-length negotiations between
independent parties.
b. The Acquisition Loan shall be for a specific term, shall bear a
reasonable rate of interest, and, except in the event of default, shall
not be payable on demand. In determining what is a reasonable rate of
interest, all relevant factors will be considered, including the amount
and duration of the loan, the security and guarantee (if any) involved,
the credit standing of the Plan and Trust and the guarantor (if any) and
the interest rate prevailing for comparable loans. A variable rate of
interest is permissible if determined to be reasonable.
c. In the event of a default on the Acquisition Loan, the value of Trust
Funds transferred in satisfaction of the loan shall not exceed the amount
of the default. If the lender is a "disqualified person" (within the
meaning of Code section 4975(e)(2)), or a party in interest (within the
meaning of ERISA section 3(14)), the Acquisition Loan must provide for a
transfer of Trust Funds, or plan assets upon default only upon and to the
extent of the failure of the Plan to meet the payment schedule of the
Acquisition Loan.
d. The Acquisition Loan may require that the Company or an Affiliate
guarantee repayment, and the Acquisition Loan may be secured by a
collateral pledge of the Financed Shares so acquired (or Financed Shares
acquired with a previous Acquisition Loan now repaid with the current
Acquisition Loan proceeds). No other Trust Funds, or any assets of the
Plan, may be pledged as collateral for an Acquisition Loan, and no lender
shall have recourse against Trust Funds, or any assets of the plan, other
than Financed Shares remaining subject to a pledge, other collateral
given for the Acquisition Loan, Employer Contributions (other than
contributions of Company Stock) made for the purpose of satisfying the
Acquisition Loan, and earnings on such Financed Shares, Employer
Contributions, and such other assets of the Plan, if any, as permitted
recourse under Code section 4975. Any pledge of Financed Shares must
specifically provide for the release of shares so pledged in accordance
with Section 5.04. Such Financed Shares shall be allocated to
Participants' Accounts, as provided in Article V.
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e. Repayments of principal and interest on any Acquisition Loan shall be
made by the Trustee (as directed by the Company or Committee) only from
(1) Employer Contributions, paid in cash to enable the repayment of such
Acquisition Loan; (2) Financed Shares or other collateral given for the
loan; (3) earnings on such Employer Contributions and any cash dividends
or other earnings received by the Trust on such Financed Shares; (4)
earnings attributable to such permissible collateral other than Financed
Shares; and (5) the proceeds of a subsequent Acquisition Loan incurred to
repay an existing Acquisition Loan. The Committee shall instruct the
Trustee as to the priority and source of Acquisition Loan repayments.
f. The repayments made with respect to an Acquisition Loan during a Plan
Year must not exceed an amount equal to the sum of Employer Contributions
and earnings received during or prior to such Plan Year, less such
payments in prior Plan Years. Such Employer Contributions and earnings
must be accounted for separately in the books of account of the Plan
until the Acquisition Loan is repaid.
g. All proceeds of an Acquisition Loan shall be used within a reasonable
time after receipt by the Trustee only to purchase Company Stock, or to
repay amounts under any Acquisition Loan.
h. Except as provided herein or in Section 4.08(i) below, no Company Stock
acquired with the proceeds of a loan described herein may be subject to a
put, call, or other option, or buy-sell or similar arrangement while held
by and when distributed from the Plan or its related Trust, whether or
not the Plan is then an "ESOP" within the ambit of section
54.4975-7(b)(4) of the Regulations, unless specifically required or
permitted by such Regulations. A holder ("Shareholder") of shares of
Company Stock which have been distributed by the Trustee, may not, for
valuable consideration, sell, assign, pledge, convey in trust, or
otherwise transfer or encumber in any manner or by any means whatever
("Transfer") any interest in all or any part of Company Stock held by
him, except in accordance with the terms and conditions of this Section
4.08(h), if at the time of such Transfer the Company Stock is not
publicly traded. Provided, however, "Transfer" shall not include any
transfer of such shares by reason of a Participant's death, any transfer
to an alternate payee, or the transfer by a Participant or his surviving
Spouse of the shares to an individual retirement account described in
Code section 408(a) in a transaction described in Code section 402(a)(5).
Upon the receipt of the Notice described below, the Company shall have
the first option to purchase the shares to be Transferred by the
Shareholder, and, if that option is not exercised in full by the Company,
then Trustee shall have the option to purchase shares not purchased by
the Company. Prior to any proposed Transfer, the Shareholder must first
give written notice ("Notice") to the Committee that he intends to
Transfer his shares of Company Stock or any interest therein, which
Notice shall state the number of shares to be Transferred, the name of
the proposed transferee, the consideration for the proposed Transfer and
the terms and conditions of the Transfer. The Shareholder shall also
submit with the Notice copies of all papers and other documents to be
used in
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connection with the proposed Transfer. Any deviation in the terms of
such Transfer, however slight, shall require a new Notice thereby
effecting a new option under this Section 4.08(h).
i. Any Company Stock acquired with the proceeds of an Acquisition Loan, if
it is not publicly traded when distributed or is subject to a trading
limitation when distributed, must be subject to a put option. The put
option is to be exercisable only by the Participant, the Participant's
donees, an alternate payee, a person (including an estate or its
distributee) to whom the Company Stock passes by reason of a
Participant's death, or the custodian or trustee of an individual
retirement account described in Code section 408(a) established by the
Participant or such Participant's surviving Spouse. The put option must
permit the Participant to put the Company Stock to the Company. The put
option must be exercisable during the sixty (60) consecutive days
beginning on the date that the Company Stock subject to the put option is
distributed by the Plan, and for another sixty (60) consecutive days
during the Plan Year next following the Plan Year in which the shares
were distributed. The put option may be exercised by the holder
notifying the Company in writing that the put option is being exercised.
The period during which a put option is exercisable does not include any
period when a distributee is unable to exercise it because the party
bound by the put option is prohibited from honoring it by applicable
federal or state law. The price at which the put option is exercisable
is the fair market value of the Company Stock determined in good faith
based on all relevant factors, determined as of the most recent Valuation
Date. The fair market value of each share shall, for this purpose, be
determined on an enterprise basis without minority discount.
Payment pursuant to the put option shall be made: (1) in the case of
distribution of the Participant's entire Account within one taxable year
of the recipient, no less rapidly than in substantially equal
installments at least annually over a period beginning no later than
thirty (30) days after the exercise of the put option and not exceeding
five (5) years in all; adequate security shall be provided and reasonable
interest shall be paid on any installments outstanding after thirty (30)
days after exercise of the put option; and (2) in the case of any other
form of distribution not described in (1), within thirty (30) days of the
exercise of the put option. Payment pursuant to the put option shall be
made no less rapidly than in substantially equal installments at least
annually over a period beginning no later than thirty (30) days after the
put option and not exceeding five (5) years in all, except that the
repayment period may be extended to a date no later than ten (10) years
after the earlier of the date the put option is exercised or the date of
final repayment of any debt incurred in connection with the acquisition
of the Company Stock. The provisions described in this Section 4.08(i)
are nonterminable, even if the Acquisition Loan is repaid or the Plan
ceases to be an employee stock ownership plan.
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SECTION 4.09 ACCOUNTING FOR FINANCED SHARES.
If Financed Shares are acquired by the Trustee with the proceeds of an
Acquisition Loan, such Financed Shares shall be credited to the Loan Suspense
Account and accounted for separately both before and after their release from
the Loan Suspense Account.
ARTICLE V
ALLOCATIONS, VALUATION, AND VESTING
SECTION 5.01 ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURES.
As of the Valuation Date, Employer Contributions and Forfeitures for the Plan
Year shall be allocated to the Accounts of each Participant described in
Section 5.02 in the ratio that each Participant's Compensation bears to the sum
of the Compensation of all Participants eligible to receive an allocation for
that Plan Year in accordance with Section 5.02 of the Plan.
SECTION 5.02 PARTICIPANTS ELIGIBLE TO RECEIVE AN ALLOCATION.
Each Plan Year, Employer Contributions made pursuant to Section 4.01 shall be
allocated to the Accounts of those Participants who either (i) are employed on
the last day of the Plan Year (including those Participants who are on a
temporary seasonal lay-off) or (ii) ceased to be an Employee during the year
because of death, Disability or attainment of Early or Normal Retirement Age.
SECTION 5.03 ALLOCATION LIMITATIONS.
The following sets forth limitations as to amounts which may be allocated to a
Participant's Accounts for a given Plan Year.
a. This subsection (a) applies if the Participant does not participate in,
and has never participated in another qualified plan maintained by the
Employer, or a welfare benefit fund, as defined in section 419(e) of the
Code maintained by the Employer, or an individual medical account, as
defined in section 415(l)(2) of the Code, maintained by the Employer,
which provides an Annual Addition as defined in Subsection (d)(1).
1. The amount of Annual Additions which may be credited to the
Participant's Accounts for any Limitation Year, as defined in
Subsection (d)(8), shall not exceed the lesser of the Maximum
Permissible Amount, as defined in Subsection (d)(9), or any other
limitation contained in this Plan. If the contributions that
would otherwise be contributed or allocated to the Participant's
Accounts would cause the Annual Additions for the Limitation
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Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced, so that the Annual
Additions for the Limitation Year shall equal the Maximum
Permissible Amount.
2. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation, as defined in Subsection
(d)(2), for the Limitation Year.
3. If there is an excess Annual Addition due to a calculation error,
Employee contributions, the allocation of Forfeitures, or other
facts and circumstances, as determined by the Committee, the
Excess Amount will be corrected as follows:
A. The Excess Amount in the Participant's Accounts must
be allocated and reallocated to other Participants'
Accounts, to the extent permitted under this Section
5.03;
B. Remaining Excess Amounts will be held unallocated in
a suspense account. The suspense account will be
allocated and reallocated to all Participants in the
next Limitation Year, and each succeeding Limitation
Year if necessary;
C. If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section
5.03, it will not participate in the allocation of
the Trust's investment gains and losses. If a
suspense account is in existence at any time during a
particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to
Participants' Accounts before any Employer or any
Employee contributions may be made to the Plan for
that Limitation Year. Excess amounts may not be
distributed to Participants or former Participants.
b. This subsection (b) applies if, in addition to this Plan, the Participant
is covered under another qualified Defined Contribution Plan maintained
by the Employer, a welfare benefit fund, as defined in section 419(e) of
the Code maintained by the Employer, or an individual medical account, as
defined in section 415(l)(2) of the Code, maintained by the Employer,
which provides an Annual Addition, during any Limitation Year.
1. The Annual Additions which may be credited to a Participant's
Accounts under this Plan for any such Limitation Year will not
exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's account under the other
plans and welfare benefit funds for the same Limitation Year. If
the Annual Additions with respect to the Participant under other
Defined Contribution Plans and welfare benefit funds maintained
by the Employer are less than the Maximum Permissible Amount and
the Employer contribution that would otherwise be contributed or
allocated to the Participant's
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Accounts under the other Defined Contribution Plans would cause
the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and funds for
the limitation year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under
this Plan are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the
Participant's Account under other Defined Contribution Plans and
welfare benefit funds for the Limitation Year.
2. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
3. If, as a result of a calculation error, Employee contributions,
the allocation of Forfeitures, or other facts and circumstances
as determined by the Committee, a Participant's Annual Additions
under this Plan and such other plans would result in an Excess
Amount for a Limitation Year, the Excess Amount will be disposed
of as follows:
A. The Excess Amount shall be reduced or eliminated by
refunding any contributions made by the Participant
under the other plan, together with earnings thereon;
B. The remaining Excess Amount will be deemed to consist
of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit
fund or individual medical account will be deemed to
have been allocated first, regardless of the actual
allocation date;
C. If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with
an allocation date of another plan, the excess amount
attributed to the Plan will be the product of,
i. the total excess amount allocated as of such
date, times
ii. the ratio of (a) the Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
Plan to (b) the total Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
and all other qualified Defined Contributions
Plans;
D. Any Excess Amount attributed to this Plan will be
disposed in the manner described in Subsection
(a)(3).
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4. If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the excess amount attributed to this Plan
will be the product of,
A. the total excess amount allocated as of such date,
times
B. the ratio of (i) the annual additions allocated to
the Participant for the Limitation Year as of such
date under this Plan to (ii) the total Annual
Additions allocated to the Participant for the
Limitation Year as of such date under this and all
other qualified Defined Contribution Plans.
5. Any excess amount attributed to this Plan will be disposed in the
manner described in Subsection (a)(3).
c. If the Employer maintains, or at any time maintained, a qualified Defined
Benefit Plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit Plan fraction and Defined Contribution Plan
fraction will not exceed 1.0 in any limitation year. If the sum of the
fractions exceeds 1.0, the annual benefit provided under the Defined
Benefit Plan will be reduced until the sum of the fractions equals 1.0.
d. Throughout this Section 5.03, certain words and phrases have meanings
which are specifically defined for purposes of Section 5.03 of the Plan.
These words and phrases can be identified in that the first letter of the
word or words in the phrase are capitalized. The definitions of these
words and phrases are set forth below and, to the extent inconsistent,
supersede the definitions of any such words and phrases which are set
forth in Article II or any other Article of the Plan:
1. "Annual Additions" means the sum of the following amounts
credited to a Participant's Account for the Limitation Year:
A. Employer Contributions;
B. Employee after-tax contributions;
C. Forfeitures;
D. amounts allocated, to an individual medical account,
as defined in section 415(l)(2) of the Code, which is
part of a pension or annuity plan maintained by the
Employer; and
E. amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending
after such date, which are attributable to
post-retirement medical benefits, allocated to the
separate account of a key employee, as defined in
section 416(i)(1) of the Code, under a
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welfare benefit fund, as defined in section 419(e) of
the Code, maintained by the Employer.
For this purpose, any excess amount applied under
Subsections (a)(3) or (b)(3) in the Limitation Year
to reduce Employer Contributions will be considered
Annual Additions for such Limitation Year.
Notwithstanding the above, if no more than one-third of the
Employer Contributions which are used to repay the principal of
Acquisition Loans are allocated to Highly Compensated Employees,
Forfeitures of Company Stock acquired with the proceeds of an
Acquisition Loan and Employer Contributions used to pay interest
on an Acquisition Loan shall not be considered Annual Additions
for the purpose of this Section 5.03.
2. "Compensation" means all amounts paid or made available to a
Participant during a Plan Year which amounts are treated as
compensation under Treasury Regulation section 1.415-2(d)(10) and
which amounts are not excluded from compensation under Treasury
Regulation section 1.415-2(d)(3). Compensation for a Limitation
Year is the Compensation actually paid or includible in gross
income during such Limitation Year.
3. "Defined Benefit Fraction" means a fraction, the numerator of
which is the sum of the Participant's Projected Annual Benefits
under all the Defined Benefit Plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the
lesser of (i) one hundred twenty-five percent (125%) of the
dollar limitation determined for the limitation year under
sections 415(b)(1)(A) and (d) of the Code or (ii) one hundred
forty percent (140%) of the Highest Average Compensation,
including any adjustments under section 415(b) of the Code.
4. "Defined Contribution Dollar Limitation" means $30,000 or if
greater, one-fourth (1/4) of the defined benefit dollar
limitation set forth in section 415(b)(1)(A) of the Code as
indexed as in effect for the Limitation Year.
5. "Defined Contribution Fraction" means a fraction, the numerator
of which is the sum of the Annual Additions to the Participant's
Account under all the Defined Contribution Plans (whether or not
terminated) maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible Employee
contributions to all Defined Benefit Plans, whether or not
terminated, maintained by the Employer, and the Annual Additions
attributable to all welfare benefit funds, as defined in section
419(e) of the Code, and individual medical accounts, as defined
in section 415(1)(2) of the Code, maintained by the Employer),
and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior Limitation Years with the
Employer (regardless of whether
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a Defined Contribution Plan was maintained by the Employer). The
maximum aggregate amount in any Limitation Year is the lesser of
(i) one hundred twenty-five percent (125%) of the dollar
limitation in effect under section 415(c)(1)(A) of the Code,
without regard to section 415(c)(6), or (ii) one hundred forty
percent (140%) times twenty-five percent (25%) of the
Participant's Compensation for such year.
6. "Employer" means the Company and all Affiliates that adopt this
Plan, and all members of a controlled group of corporations (as
defined in section 414(b) of the Code as modified by section
415(h)), all commonly controlled trades or businesses (as defined
in section 414(c) as modified by section 415(h)) or affiliated
service groups (as defined in section 414(m)) of which the
Company is part, and any other entity required to be aggregated
with the Company pursuant to Regulations under section 414(o) of
the Code.
7. "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
8. "Limitation Year" means the Plan Year. If the limitation year is
amended to a different twelve-consecutive-month period, the new
limitation year must begin on a date within the limitation year
in which the amendment is made.
9. "Maximum Permissible Amount" means the maximum Annual Addition
that may be contributed or allocated to a Participant's Accounts
under the Plan for any Limitation Year which shall not exceed the
lesser of:
A. the Defined Contribution Dollar Limitation (i.e.,
$30,000, or if greater, twenty-five percent (25%) of
the Code section 415(b)(1)(A) amount), or
B. twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year.
The Compensation limitation referred to in (B) shall not apply to
any contribution for medical benefits (within the meaning of
section 401(h) or section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under sections 415(l)(1)
or 419A(d)(2) of the Code.
If a short limitation year is created because of an amendment
changing the limitation year to a different
twelve-consecutive-month period, the Maximum Permissible Amount
shall not exceed the defined contribution dollar limitation
multiplied by the following fraction:
Number of months in the short limitation year
---------------------------------------------
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10. "Projected Annual Benefit" means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity, if
such benefit is expressed in a form other than a straight life
annuity or qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of the Plan
assuming:
A. The Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if
later); and
B. The Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the Plan will remain
constant for all future Limitation Years.
SECTION 5.04 ALLOCATION OF FINANCED SHARES.
All Company Stock acquired by the Trust with the proceeds of an Acquisition
Loan must be added to and maintained in the Loan Suspense Account. Such
Company Stock shall be released and withdrawn from that account as if all
Company Stock in that account were encumbered. For each Plan Year during the
duration of the Acquisition Loan, the number of shares of Company Stock
released from the Loan Suspense Account for allocation to Participant Accounts
as set forth in writing in the pledge of the Financed Shares shall equal the
number of Financed Shares in the Loan Suspense Account immediately before
release for that Plan Year multiplied by the ratio that the payments of
principal and interest on the Acquisition Loan for that Plan Year bear to the
total projected payments of principal and interest over the duration of the
Acquisition Loan repayment period (including the principal and interest on the
Acquisition Loan for that Plan Year). If interest under any loan is variable,
then for purposes of this paragraph, interest to be paid in future periods
shall be determined by using the rate thereof applicable at the end of the Plan
Year.
Notwithstanding the preceding paragraph, in the sole discretion of the
Committee, the number of shares of Company Stock released from the Loan
Suspense Account for any Acquisition Loan, as set forth in writing in the
pledge of the Financed Shares, may be determined using the principal-only
method set forth in section 54.4975-7(b)(8)(ii) of the Regulations.
The shares released pursuant to the repayment of an Acquisition Loan with funds
from Employer Contributions shall be allocated to the Participants' Company
Stock Accounts in the same manner as Employer Contributions are allocated under
Section 5.02. The shares released pursuant to the repayment of an Acquisition
Loan with funds from cash dividends on Company Stock shall be allocated in the
manner set forth in Section 5.05. The shares released pursuant to the
repayment of an Acquisition Loan with funds from Participants' Other
Investments Accounts or net income from such Accounts shall be allocated in the
manner set forth in Section 5.07.
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SECTION 5.05 ALLOCATION OF CASH DIVIDENDS.
Allocation of cash dividends paid with respect to Company Stock held in the
Trust shall be made as follows:
a. Except as provided in Section 5.05(b), pursuant to the Committee's
direction to the Trustee, all or a portion of the cash dividends on
Allocated Shares shall be paid to the Plan and distributed in cash to the
Participants and Beneficiaries no later than ninety (90) days after the
close of the Plan Year in which paid. To the extent not distributed,
cash dividends shall be credited as earnings to the Company Stock Account
holding the Company Stock to which they relate, or used to repay the
Acquisition Loan with respect to such shares of Company Stock.
b. For any Plan Year during which repayment of an Acquisition Loan is made
in whole or in part with dividends paid on shares of Company Stock that
have been allocated to Participants' Accounts, a special dividend
allocation shall be determined for each Participant and such Employer
Contribution shall be in addition to any other contribution or allocation
required under the Plan. The special dividend allocation shall be in the
form of Company Stock with a fair market value of not less than the
amount of such dividends.
c. Pursuant to the Committee's direction to the Trustee, cash dividends paid
on Unallocated Shares shall be used to make payments on an Acquisition
Loan. Shares released due to cash dividends paid on Unallocated Shares
used to make payments on an Acquisition Loan shall be allocated as
follows:
1. first, to the Participant's Company Stock Accounts to the extent
necessary to satisfy subparagraph (b) of this Section 5.05; and
2. then, to the Participants' Accounts in the same manner as
Employer Contributions are allocated pursuant to Section 5.02.
SECTION 5.06 ALLOCATION OF STOCK DIVIDENDS.
Except as provided in section 5.05(b), any Company Stock received by the
Trustee as a result of a stock split, dividend, conversion, or as a result of a
reorganization or other recapitalization of a Company shall be allocated as
Trust Fund earnings as of the day on which the Company Stock is received by the
Trustee to each Participant's Company Stock Account and to the Loan Suspense
Account in the ratio that each such Account bears to the sum of all such
Accounts.
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SECTION 5.07 ALLOCATION OF INCOME.
The assets of the Trust shall be valued on the Valuation Date at fair market
value. On such date, the earnings, gains, losses, and expenses attributable to
the assets in all of the Participants' Accounts shall be allocated to each
Participant's Other Investment Account in the ratio that such Participant's
Other Investment Account bears to all Other Investment Account balances.
SECTION 5.08 ADJUSTMENTS FOR ALLOCATION ERROR.
If, in any Plan Year, any Employee who should be considered a Participant is
omitted from receiving an allocation or receives less than such Participant is
entitled, and such omission is determined to be erroneous, the Employer shall
then make a subsequent contribution with respect to the omitted Employee in the
amount which the Employer would have contributed with respect to such Employee
had the omission not occurred.
SECTION 5.09 VALUATIONS.
The Committee shall direct the Trustee, as of the Valuation Date, and at such
other date or dates deemed necessary by the Committee, to determine the net
worth of the assets comprising the Trust Fund, as it exists on such date prior
to taking into consideration any contribution to be allocated for that Plan
Year. In determining such net worth, the Trustee shall value the assets
comprising each Trust Fund at their fair market value as of the such date and
shall deduct all expenses for which the Trustee has not yet obtained
reimbursement from the Employer or the Trust Fund.
Valuations must be made in good faith and based on all relevant factors for
determining the fair market value of securities. In the case of a transaction
between a Plan and a disqualified person as defined in section 4975(e)(2) of
the Code, value must be determined as of the date of the transaction. For all
other Plan purposes, value must be determined as of the most recent Valuation
Date under the Plan. An independent appraisal will not in itself be a good
faith determination of value in the case of a transaction between the Plan and
a disqualified person. However, in other cases, a determination of fair market
value based on at least an annual appraisal independently arrived at by a
person who customarily makes such appraisals and who is independent of any
party to the transaction will be deemed to be a good faith determination of
value. Company Stock not readily tradable on an established securities market
shall be valued by an independent appraiser meeting requirements similar to the
requirements of the Regulations prescribed under section 170(a)(1) of the Code.
SECTION 5.10 VESTING.
This Section 5.10 sets forth rules for determining a Participant's Vested
interest in his or her Accounts.
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a. The Vested percentage of a Participant's Accounts is determined as
follows:
Vested
Years of Service: Percentage:
----------------- -----------
Less than 3 years 0%
At least 3, but less than 4 years 20%
At least 4, but less than 5 years 40%
At least 5, but less than 6 years 60%
At least 6, but less than 7 years 80%
7 or more years 100%
b. Notwithstanding the Vesting specified above, each Participant shall be
one hundred percent (100%) Vested in the full balance of such
Participant's Accounts upon Normal Retirement, Early Retirement, death,
and Disability.
c. For purposes of computing a Participant's Vested right to such
Participant's Accounts, Years of Service and breaks in service will be
measured by the Plan Year. All of a Participant's Years of Service with
the Company or an Affiliate are counted to determine the nonforfeitable
percentage of the Participant's Accounts.
d. A Participant's Years of Service before a Break in Service shall be
treated as follows:
1. In the case of a Participant who has incurred a One-Year Break in
Service, Years of Service before such break will not be taken
into account until the Participant has completed a Year of
Service after such break in service.
2. In the case of any Participant who has five (5) or more One-Year
Breaks in Service, all service after such Breaks in Service will
be disregarded for the purposes of vesting the portion of his
Account balance that accrued before such breaks in service.
3. In the case of a Participant who has any Vested interest in his
Accounts (i.e., whose Vested percentage under Section 5.10(a)
exceeds 0%), all service prior to such Breaks in Service will be
taken into account for the purposes of vesting the portion of his
Account balance that accrues after any such breaks in service.
4. In the case of a non-Vested (i.e., a 0%-Vested) Participant who
has five (5) or more consecutive One-Year Breaks in Service, all
service prior to such Breaks in Service will be disregarded for
the purposes of vesting the portion of his Account balance that
accrues after such Breaks in Service unless upon returning to
service the number of consecutive One-Year Breaks in Service is
less than the number of Years of Service.
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If such service is disregarded, separate accounts will be
maintained for the Participant's pre-break and post-break
Employer-derived Account. Both Accounts shall share in the
earnings and losses of the fund.
e. If any previous Participant shall be reemployed by the Employer before a
One-Year Break in Service occurs, such Participant shall continue to
participate in the Plan in the same manner as if such termination had not
occurred. If any previous Participant shall be reemployed by the
Employer after incurring a One-Year Break in Service, and such previous
Participant received a distribution of such Participant's entire Vested
interest (including where the Participant had no Vested amount in his
account) prior to reemployment, such Participant's forfeited Account
shall be restored only if the Participant repays the full amount
distributed before the earlier of five (5) years after the first date on
which the Participant is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive One-Year Breaks in
Service commencing after the distribution. If a distribution occurs for
any reason other than a separation from service, the time for repayment
may not end earlier than five (5) years after the date of the
distribution. In the event the former Participant repays the full amount
distributed, the undistributed portion of the Participant's Account must
be restored in full, unadjusted by gains or losses occurring after the
Valuation Date preceding the distribution.
f. If the Plan's vesting schedule is changed or amended, or the Plan is
amended in any way that directly or indirectly affects the computation of
the Participant's nonforfeitable percentage, each Participant with at
least three Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to have
the Vested percentage computed under the Plan without regard to such
amendment or change. The period during which the election may be made
shall commence with the date the amendment is adopted or deemed to be
made and shall end on the latest of:
1. sixty (60) days after the amendment is adopted;
2. sixty (60) days after the amendment becomes effective; or
3. sixty (60) days after the Participant is issued written notice of
amendment by the Employer or Plan Committee.
If the vesting schedule of the Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment
is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's right to such
Participant's Employer-derived Account shall not be less than such
Participant's percentage computed under the Plan without regard to such
amendment.
g. If any previous Participant shall be reemployed by the Employer before a
One-Year Break in Service occurs, and if a distribution is made to such
Participant at a time when
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the Participant has a Vested right to less than one hundred percent
(100%) of such Participant's Accounts, such Participant's Accounts shall
have their Vested percentage increased as follows:
1. A separate Account shall be established for the Participant's
interest in the Plan as of the time of the distribution, and
2. At any relevant time, the Participant's nonforfeitable portion of
the separate Account will be equal to an amount ("X") determined
by the formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested percentage
at the relevant time, AB is the Account balance at the relevant
time, D is the amount of the distribution, and R is the ratio of
the Account balance at the relevant time to the Account balance
after distribution.
ARTICLE VI
DISTRIBUTIONS
The Participant or Participant's Beneficiary, where applicable, may elect the
form or the time of the distribution where more than one type of distribution
is available.
SECTION 6.01 DISTRIBUTIONS WHILE IN-SERVICE.
Except as provided in Section 6.10, this Plan does not provide for in-service
distributions.
SECTION 6.02 DISTRIBUTIONS UPON SEPARATION FROM SERVICE - SMALL ACCOUNT
BALANCES.
If a Participant separates from service with the Employer prior to attaining
Normal Retirement Age for reasons other than death or Disability, and the value
of the Participant's Vested Account as determined pursuant to Section 5.09 as
of the immediately preceding Valuation Date adjusted for dividends on Company
Stock allocated under Section 5.05 or 5.06, is not greater than $3,500, the
Committee shall direct the Trustee to distribute the entire Vested portion of
such Account to the Participant as soon as administratively feasible in
accordance with this Article VI. The nonvested portion shall be treated as a
Forfeiture. If the value of a Participant's Vested Account is zero, the
Participant shall be deemed to have received a distribution of such Vested
Account.
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SECTION 6.03 DISTRIBUTIONS UPON SEPARATION FROM SERVICE - ACCOUNT BALANCES
OVER $3,500.
If a Participant separates from service with the Employer prior to attaining
Normal Retirement Age for reasons other than death or Disability and the value
of the Participant's Vested Account as determined pursuant to Section 5.09 as
of the immediately preceding Valuation Date adjusted for dividends on Company
Stock allocated under Section 5.05 or 5.06, exceeds $3,500, the Committee shall
direct the Trustee to distribute to the Participant the Vested portion of such
Participant's Account not later than the close of the Plan Year which is the
sixth Plan Year following the Plan Year in which the Participant separated from
service, if the Participant so elects. The non-Vested portion of a
Participant's Account shall be treated as a Forfeiture.
With respect to a Participant's Account which is subject to this Section 6.03,
the Committee may direct the Trustee to segregate the value of such Account,
and invest the segregated amount thereof in a separate, federally insured
savings account, a certificate of deposit, common or collective trust fund of a
bank, or deferred annuity or any other investment deemed prudent by the
Committee until such time as the Account is distributed. In the event the
value of such Vested Account is not segregated, the amounts shall remain in
separate accounts for the terminated Participant.
SECTION 6.04 DISTRIBUTIONS UPON RETIREMENT.
In the event that a Participant attains Early or Normal Retirement Age, all
Vested amounts credited to such Participant's Accounts shall become
distributable. The Participant may continue employment with the Employer after
attaining Early or Normal Retirement Age, and shall continue to share in
Employer Contributions in accordance with Section 5.02. Upon a Participant's
separation from service of the Employer following attainment of Early or Normal
Retirement Age, the Committee shall direct the Trustee to distribute to the
Participant the Vested portion of such Participant's Account balance, as
determined pursuant to Section 5.09 as of the immediately preceding Valuation
Date, adjusted for any dividends on Company Stock allocated under Section 5.05
or 5.06 not later than one year after the close of the Plan Year in which the
Participant separated from service, if the Participant so elects.
SECTION 6.05 DISTRIBUTIONS UPON DEATH.
Upon a Participant's death, the Committee shall direct the Trustee to
distribute the Participant's Vested Account balance, as determined pursuant to
Section 5.09 as of the immediately preceding Valuation Date, adjusted for any
dividends on Company Stock allocated under Section 5.05 or 5.06 to that
Participant's Beneficiary not later than one (1) year after the close of the
Plan Year in which the Participant died. Notwithstanding the immediately
preceding sentence, in the case of a Beneficiary who is the Participant's
spouse, such Beneficiary may elect to defer commencement of benefits to a date
no later than the date
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the Participant would have attained age seventy and one half (70 1/2). The
Participant shall not name as a Beneficiary someone other than such
Participant's Spouse, unless and until the Participant and Spouse designate, in
writing on a valid waiver form provided by the Committee for such purpose, an
alternate Beneficiary, which designation shall be witnessed by a notary public.
In addition, the Participant may designate a Beneficiary other than such
Participant's Spouse if: (1) the Participant is legally separated or has been
abandoned and the Participant has a court order to such effect (and there is no
"qualified domestic relations order" as defined in section 414(p) of the Code);
(2) the Participant has no Spouse; or (3) the Spouse cannot be located.
Where the Participant makes no designation, the Beneficiary shall be the
Spouse, and if there is no Spouse, the Beneficiary shall be the Participant's
estate. The Committee may require such proof of death and such evidence of the
right of other persons to be Beneficiaries as it shall deem proper under the
circumstances. The Committee's determination of death and of the right of any
Beneficiary to receive payments shall be conclusive. The designation of a
Beneficiary shall be made pursuant to a form approved by the Committee. A
Participant may revoke or change a Beneficiary designation with the Committee
by filing same with the Committee. In the event that no valid designation
exists at the time of the Participant's death, the death benefit shall be
payable to the estate. If the Participant was eligible for any distribution or
distributions, but had not yet received all such distributions prior to death,
the Trustee will distribute any remaining amounts credited to the Accounts of
such Participant to the Beneficiary.
SECTION 6.06 DISTRIBUTIONS UPON DISABILITY.
Upon a Participant's Disability, the Committee shall direct the Trustee to
distribute to the Participant, the value of the Participant's Vested Account
balance, as determined pursuant to Section 5.09 as of the immediately preceding
Valuation Date, adjusted for any dividends on Company Stock allocated under
Section 5.05 or 5.06 not later than one year after the close of the Plan Year
in which the Disability arose, unless the Participant elects to defer
commencement of his benefits to a later date.
SECTION 6.07 SPECIAL BENEFICIARY PROVISIONS.
This Section 6.07 sets forth special distribution rules.
a. If, after five (5) years have expired following reasonable efforts of the
Committee to locate a Participant or Beneficiary, including sending a
registered letter, return receipt requested to the last known address,
the Committee is unable to locate the Participant or Beneficiary, then
the amounts distributable to such Participant or Beneficiary shall,
pursuant to applicable state and Federal laws, be treated as a Forfeiture
under the Plan. Where a Participant or Beneficiary is located subsequent
to the Forfeiture, such benefits shall be reinstated by the Committee,
and shall not count as an annual addition under section 415 of the Code.
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b. The Committee may instruct the Trustee to distribute a sum payable to a
minor instead to his or her legal guardian, or if there is no guardian,
to a parent or other responsible adult who maintains the residence of the
minor. In the alternative, such distribution could be made to the
appropriate custodian under the Uniform Gifts to Minors Act or Gift to
Minors Act, if applicable under the state laws of the state in which the
minor resides. Any payment in this method shall discharge all
fiduciaries involved in the distribution including the Trustee, Employer,
and Plan from liability regarding the transaction.
c. A Participant's rights and benefits shall be subject to the rights
afforded to an alternate payee under a qualified domestic relations
order. In connection with a proper qualified domestic relations order
under section 414(p) of the Code, a distribution shall be permitted if
such distribution is authorized by the qualified domestic relations
order, even if the Participant has not achieved a distributable event
under the Plan.
SECTION 6.08 CONSENT OF THE PARTICIPANT REQUIRED FOR DISTRIBUTION IF ACCOUNT
BALANCES GREATER THAN $3,500.
If the value of a Participant's Vested Account balance exceeds (or at the time
of any prior distribution exceeded) $3,500, and the Account balance is
immediately distributable, the Participant (or where the Participant has died,
such Participant's Beneficiary) must consent to any distribution of such
Account balance. An Account is immediately distributable if any part of the
Account could be distributed to the Participant (or Surviving Spouse) before
the Participant attains, or would have attained, if not deceased, the later of
Normal Retirement Age or age sixty-two (62). If a Participant fails to consent
to a distribution of his Accounts, such failure shall be deemed to be an
election to defer the commencement of benefits. A Participant shall be given
notice of such Participant's rights under this Section 6.08 no less than thirty
(30) days and no more than ninety (90) days before the first day on which all
events have occurred which entitle the Participant to such benefits, provided
that the Participant may waive the thirty (30) day period in the manner
permitted under section 411(a)(11) of the Code.
The consent of the Participant shall not be required to the extent that a
distribution is required to satisfy sections 401(a)(9) or 415 of the Code. In
addition, upon termination of the Plan, if the Plan does not offer an annuity
option (purchased from a commercial provider) and if the Company or any
Affiliate does not maintain another Defined Contribution Plan (other than an
ESOP), the Participant's Accounts may, without the Participant's consent, be
distributed to the Participant. However, if the Company or an Affiliate
maintains another Defined Contribution Plan (other than an ESOP), then the
Participant's Accounts shall be transferred, without the Participant's consent,
to such other plan, if the Participant does not consent to an immediate
distribution.
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SECTION 6.09 COMMENCEMENT OF BENEFITS.
Notwithstanding any provision to the contrary, unless the Participant elects
otherwise, distribution of benefits shall begin no later than the sixtieth
(60th) day after the latest of the close of the Plan Year in which:
a. the Participant attains age sixty-five (65) (or Normal Retirement Age, if
earlier);
b. occurs the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan; or
c. the Participant terminates employment with the Employer.
Notwithstanding the foregoing, the failure of a Participant or Beneficiary to
consent to a distribution while a benefit is immediately distributable shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section 6.09.
SECTION 6.10 REQUIRED DISTRIBUTIONS.
Notwithstanding any provision to the contrary, Participants who participate in
the Plan after age seventy and one half (70 1/2) must receive Required
Distributions in accordance with section 401(a)(9) of the Code the Regulations
thereunder.
SECTION 6.11 FINANCED SHARES.
Except as required under Section 6.10 and section 401(a)(9) of the Code, the
Trustee shall not distribute the portion of a Participant's Account
attributable to the shares of Company Stock acquired with the proceeds of an
Acquisition Loan until the close of the Plan Year in which such loan is repaid
in full.
SECTION 6.12 FORM OF DISTRIBUTION.
The Participant may elect to receive a distribution of such Participant's
Accounts in the form of a lump sum payment. Unless the Participant elects
otherwise, distribution of the Participant's Accounts shall be in the form of
substantially equal annual payments, for a period not to exceed five (5) years;
provided, however, that in the case of a Participant with Accounts in excess of
$500,000, the five (5) year distribution period shall be increased by (1)
additional year (but not more than five (5) additional years) for each
$100,000, or fraction thereof, that the Participant's Account balances exceed
$500,000. For purposes of this Section 6.12, the dollar amounts shall be
adjusted annually in the same manner as section 415(d) of the Code.
Participant election shall be made in a manner and using such forms as may be
prescribed by the Committee.
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SECTION 6.13 METHOD OF PAYMENT.
At the time a Participant's Vested Account is to be distributed whether by
reason of death, Disability, retirement or separation from service prior to
Normal Retirement Age, the Committee shall determine the fair market value of
the Participant's Vested Account and the number of whole and fractional shares
of Company Stock allocated to such Participant's Company Stock Account
consistent with the valuation pursuant to Section 5.09 as of the most recent
Valuation Date. The Committee shall direct the Trustee to distribute the
Participant's Vested Account balance within the time specified for distribution
in this Article VI by (1) delivery of Company Stock in the number of whole
shares to which the Participant or Beneficiary is entitled from his Company
Stock Account and (2) cash in an amount equal to the Vested balance of the
Participant's Other Investments Account. Notwithstanding the preceding
sentence, a Participant or Beneficiary may elect to receive the value of such
Participant's Vested Other Investment Account entirely in whole shares of
Company Stock. Any balance in the Participant's Other Investment Account shall
be applied to acquire for distribution the maximum number of whole shares of
Company Stock at the then fair market value. If Company Stock is not available
for purchase by the Trustee, it shall hold such balance until Company Stock is
acquired and then make such distribution. Prior to making any distribution,
the Committee must notify the Participant in writing of this right to demand
that the value of such Participant's Vested Other Investment Accounts be
distributed solely in Company Stock. The fair market value of fractional
shares in a Company Stock Account or Other Investment Account shall be
distributed in cash.
Notwithstanding any provision to the contrary, a Participant or Beneficiary
shall have no right to demand that the Accounts be distributed in the form of
Company Stock with respect to the portion of such Accounts which the
Participant elected to have diversified pursuant to Section 4.07 of the Plan.
If the Participant is entitled to a contribution or dividend for the last Plan
Year of participation in the Plan and such contribution or dividend is
allocated to such Participant's Account subsequent to the distribution of such
Participant's Vested Account, such amount shall be distributed as soon as
practicable after such amount is allocated to the Participant's Account.
SECTION 6.14 TRUSTEE-TO-TRUSTEE TRANSFERS.
The Trustee may make transfers directly to the trustee of another plan
qualified under section 401(a) of the Code.
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SECTION 6.15 ROLLOVERS TO OTHER PLANS OR IRAS.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section 6.15, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. A
distributee may divide an eligible rollover distribution between a direct
rollover and payment to the distributee only if the total distribution is at
least five hundred dollars ($500). Prior to making any election under this
Section 6.15, the distributee will receive notification in accordance with
section 402(f) of the Code provided that he may waive the thirty (30) day
period in the manner permitted thereunder.
DEFINITIONS:
a. Eligible rollover distribution. An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include:
1. any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's beneficiary, or for a specified period of ten (10)
years or more;
2. any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and
3. the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
Notwithstanding any provision of this Section 6.15 to the contrary, the
distribution of amounts totaling less than two hundred dollars ($200) in
any one year shall not be considered eligible rollover distribution(s).
b. Eligible retirement plan. An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an annuity
plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts that distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement
annuity.
c. Distributee. A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified
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domestic relations orders as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former spouse.
d. Direct rollover. A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
ARTICLE VII
VOTING RIGHTS OF COMPANY STOCK
SECTION 7.01 VOTING RIGHTS.
Voting rights with respect to shares of Company Stock held in the Trust which
have been allocated to Participants' Accounts are passed-through to the
Participants. Each Participant shall have the right to give written directions
to the Trustees on forms provided by the Trustee or Committee with respect to
all voting rights in the shares of Company Stock allocated to such
Participants' Accounts. The Trustee shall vote fractional shares of Company
Stock allocated to Participant's Accounts in the aggregate to the greatest
extent possible to reflect the voting direction of the Participant to whose
Account fractional shares of Stock have been allocated. If a Participant does
not direct the Trustee as to voting of all or any portion of the shares of
Company Stock allocated to such Participant's Accounts, such voting rights
shall be exercised by the Trustee only to the extent directed by the
Participant. The Trustee shall vote all of the Unallocated Shares as directed
by the Committee. Notwithstanding any provision of this Section 7.01 to the
contrary, the Trustee shall vote all Company Stock in accordance with its
fiduciary obligations under ERISA.
SECTION 7.02 NOTICE REQUIRED.
The Committee shall cause the Participants to be notified, not later than ten
days prior to the date such voting rights are to be exercised, of all questions
requiring a vote of the holders of shares of Company Stock. The Committee
shall also cause to be included with such notice any materials and information
ordinarily supplied to other holders of Company Stock in connection with any
such vote.
ARTICLE VIII
PLAN ADMINISTRATION
SECTION 8.01 DUTIES OF THE COMPANY.
The Company shall have overall responsibility for the establishment, amendment,
termination, administration, and operation of the Plan.
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SECTION 8.02 THE COMMITTEE.
The Committee shall be the "named fiduciary" (as defined in section 402(a)(2)
of ERISA), the "Plan Administrator" (as defined in section 3(16) of ERISA and
section 414(g) of the Code), and the agent for service of process of the Plan.
The Committee shall consist of officers or other Employees of the Company, or
any other persons who shall serve at the request of the Company. The Committee
shall consist of at least two members, who shall be appointed (and removed with
or without cause) by the Board of Directors of the Company. In the absence of
such appointment, the Board of Directors of the Company shall serve as the
Committee.
The members of the Committee shall serve at the will of the Company, and the
Board of Directors may from time to time remove any Committee member with or
without cause and appoint their successors. Any member of the Committee may
resign by delivering a written resignation to the Company and to the Committee,
and this resignation shall become effective upon the date specified therein.
In the event of a vacancy in membership, the president of the Company may
appoint a person to fill the vacancy until the Board of Directors appoints a
new Committee member.
SECTION 8.03 APPOINTMENT OF ADVISOR.
The Committee may employ such person as it deems necessary to assist in the
administration of the Plan including but not limited to tax advice; amendment,
termination, and operation of the Plan; and advice concerning reports filed
with the Internal Revenue Service. Such advisor shall not be the Plan
Administrator (as defined in section 3(16) of ERISA and section 414(g) of the
Code).
SECTION 8.04 POWERS AND DUTIES OF THE COMMITTEE.
The Committee on behalf of the Participants and Beneficiaries of the Plan shall
enforce the Plan and Trust in accordance with their terms, and shall have all
powers necessary to carry out such provisions. The Committee shall interpret
the Plan and Trust and shall determine all questions arising in the
administration and application of the Plan and Trust. Any such interpretation
or determination by the Committee shall be conclusive and binding on all
persons.
The Committee shall establish rules and regulations necessary for the proper
conduct and administration of the Plan, and from time to time, shall change or
amend these rules and regulations. The Committee shall also have the power to
authorize all disbursements by the Trustee from the Trust in accordance with
the Plan's terms.
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SECTION 8.05 ORGANIZATION AND OPERATION.
The Committee shall act by a majority of its members at the time in office, and
such action may be taken either by a vote at a meeting or by written consent
without a meeting. The Committee may authorize any one or more of its members
to execute any document or documents on behalf of the Committee, in which event
the Committee shall notify the Employer, in writing, of such authorization and
the name or names of its member or members so designated. The Employer
thereafter shall accept and rely on any documents executed by said member of
the Committee or members as representing action by the Committee until the
Committee shall file with the Employer a written revocation of such
designation.
The Committee may adopt such bylaws and regulations as it deems desirable for
the conduct of its affairs and may employ and appropriately compensate such
accountants, counsel, specialists, actuaries, and other persons as it deems
necessary or desirable in connection with the administration and maintenance of
the Plan. The Committee shall have the authority to control and manage the
operation and administration of the Plan.
SECTION 8.06 CLAIMS PROCEDURE.
a. A claim for benefits under the Trust shall be filed on an application
form supplied by the Committee. Written notice of the disposition of the
claim shall be furnished to the claimant within ninety (90) days after an
application form is received by the Committee, unless special
circumstances (as determined by the Committee) require an extension for
processing the claim. If such an extension is required, the Committee
shall render a decision as soon as possible subsequent to the ninety (90)
day period, but such decision shall not be rendered later than one
hundred eighty (180) days after the application form is received by the
Committee. Written notice of such extension shall be furnished to the
claimant prior to the commencement of the extension indicating the
special circumstances requiring such extension and the date by which the
Committee expects to render the decision on the claim. In the event the
claim is denied, the Committee shall set forth in writing the reasons for
the denial and shall cite pertinent provisions of the Plan and Trust upon
which the decision is based. In addition, the Committee shall provide a
description of any additional material or information necessary for the
claimant to perfect the claim, an explanation of why such information is
necessary, and appropriate information as to the steps to be taken if the
Participant or Beneficiary wish to submit such claim for review as
provided in (b) below.
b. A Participant or Beneficiary whose claim described in (a) above has been
denied in whole or in part shall be entitled to the following rights if
exercised within sixty (60) days after written denial of a claim is
received:
1. to request a review of the claim upon written application to the
Committee;
2. to review documents associated with the claim; and
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3. to submit issues and comments in writing to the Committee.
c. If a Participant or a Beneficiary requests a review of the claim under
(b) above, the Committee shall conduct a full review (including a formal
hearing, if desired) of such request, and a decision on such request
shall be made within sixty (60) days after the Committee has received the
written request for review from the Participant or the Beneficiary.
Special circumstances (such as a need for full hearing on request) may
allow the Committee to extend the decision on such request, but the
decision shall be rendered no later than one hundred twenty (120) days
after receipt of the request for review. Written notice of such an
extension shall be furnished to the Participant or the Beneficiary prior
to the commencement of the extension. The decision of the Committee on
review shall be set forth in writing and shall include specific reasons
for the decision as well as specific references to the pertinent
provisions of the Plan or Trust on which the decision is based.
SECTION 8.07 RECORDS AND REPORTS.
a. The Committee shall be entitled to rely upon certificates, reports, and
opinions provided by an accountant, tax or pension advisor, actuary or
legal counsel employed by the Employer or Committee. The Committee shall
keep a record of all its proceedings and acts, and shall keep all such
books of account, records, and other data as may be necessary for the
proper administration of the Plan. The regularly kept records of the
Committee, the Employer, and the Trustee shall be conclusive evidence of
the service of a Participant, such Participant's Compensation, age,
marital status, status as an Employee, and all other matters contained
therein and relevant to this Plan; provided, however, that a Participant
may request a correction in the record of such Participant's age at any
time prior to his retirement and such correction shall be made if within
ninety (90) days after such request if the Participant furnishes a birth
certificate, baptismal certificate, or other documentary proof of age
satisfactory to the Committee in support of this correction.
b. Each Participant and each Participant's designated Beneficiary must file
with the Committee from time to time in writing a correct mailing address
and each change of mailing address. Any communication, statement, or
notice addressed to a Participant or Beneficiary at the last mailing
address filed with the Committee, or if no address is filed with the
Committee, the last mailing address as shown on the Employer's records,
will be binding on the Participant and Beneficiary for all purposes of
the Plan. Neither the Committee nor the Trustee shall be required to
search for or locate a Participant or Beneficiary.
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SECTION 8.08 LIABILITY.
a. A member of the Committee shall not be liable for any act, or failure to
act, of any other member of the Committee, except to the extent that such
member:
1. knowingly participates in, or undertakes to conceal, an act or
omission of another Committee member, knowing that such act or
omission is a breach of fiduciary duty to the Plan;
2. fails to comply with the specific responsibilities required as a
member of the Committee, and such failure enables another member
of the Committee to commit a breach of fiduciary duty to the
Plan; or
3. has knowledge of a breach of fiduciary duty to the Plan by
another member of the Committee, unless such member makes
reasonable effort under the circumstances to remedy such breach.
b. Each member of the Committee shall be liable with respect to his own acts
of willful misconduct or gross negligence concerning the Plan. The
Employer shall indemnify the Committee or each of its members for part or
all expenses, costs, or liabilities arising out of the performance of
duties required by the terms of the Plan or Trust, except for those
expenses, costs, or liabilities arising out of a member's willful
misconduct or gross negligence.
SECTION 8.09 RELIANCE AND STATEMENTS.
The Committee, in any of its dealings with Participants hereunder, may
conclusively rely on any written statement, representation, or documents made
or provided by such Participants.
SECTION 8.10 REMUNERATION AND BONDING.
Unless otherwise determined by the Company, the members of the Committee shall
serve without remuneration for services to the Plan and Trust. However, all
expenses of the Committee shall be paid by the Trust except to the extent paid
by the Employer. Such expenses shall include any expenses incidental to the
functioning of the Committee, including but not limited to fees of accountants,
legal counsel, and other specialists, or any other costs entailed in
administering the Plan. Title I of ERISA requires certain persons with
discretion over Plan assets to be bonded. Except as required by ERISA or other
federal law, the members of the Committee shall serve without bond.
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SECTION 8.11 COMMITTEE DECISIONS FINAL.
The decision of the Committee in matters within its jurisdiction shall be
final, binding, and conclusive upon the Employer and the Trustee and upon each
Employee, Participant, former Participant, Beneficiary, and every other person
or party interested or concerned.
ARTICLE IX
TRUST AGREEMENT
SECTION 9.01 ESTABLISHMENT OF TRUST.
The Company and the Trustee hereby enter into a Trust Agreement which, except
to the extent such trust agreement is set forth in a valid separate and
distinct document, is incorporated herein and which establishes a trust
consisting of such sums of money and other property as may from time to time be
contributed or transferred to the Trustee under the terms of the Plan, along
with any property to which the Plan may from time to time convert, and which
provides for the investment of Plan assets and the operation of the Trust.
This Trust agreement, as amended from time to time, shall be deemed part of the
Plan, and all rights and benefits provided to persons under the Plan shall be
subject to the terms of the Trust agreement. If the trust agreement between
the Company and the Trustee is set forth in a valid separate and distinct
document, the amendment and restatement of this Plan shall be executed only by
the Company and shall amend the terms of the Plan, but not any terms of the
existing trust agreement.
SECTION 9.02 CONTRIBUTIONS TO TRUSTEE.
The Trustee shall accept any cash, and may accept any other property tendered
to it as contributions hereunder, but shall not be under any duty to require
the Employer or any other person to contribute to the Trust Fund or to
determine whether the amount of any contribution has been correctly computed
under the terms of the Plan.
SECTION 9.03 PURPOSE OF THE TRUST.
The purpose of this Trust is to invest primarily in and hold Company Stock for
the benefit of Participants and the Beneficiaries of Participants.
Accordingly, the Committee shall direct the Trustee as to the portion of the
Trust Fund that shall be invested in Company Stock at any particular time. As
directed by the Committee, the Trustee may also invest the Trust Fund in
property other than Company Stock.
Notwithstanding the foregoing, the Trustee shall keep sufficient liquid assets
on hand to pay the amounts attributable to fractional shares in accordance with
Article VI, and to pay cash distributions to those Participants who receive
cash distributions. The Trust shall be a separate
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entity from the Employer and its assets. In no event shall the Trust Fund ever
be subject to the rights or claims of any creditor of the Employer. Except as
provided in Section 9.01, it is expressly understood that the duties and
obligations of the Trustee shall be only those expressly stated in this Article
IX.
SECTION 9.04 DISTRIBUTIONS.
The Trustee shall from time to time make distributions from the Trust Fund to
such persons, in such amounts, and in such manner as the Committee may direct.
Instructions to the Trustee from the Committee need not specify the purpose of
the distributions so ordered, and the Trustee shall not be responsible in any
way for the propriety of such distributions or for the administration of the
Plan. Any such instructions shall constitute a certification that each
distribution directed is one which the Committee is authorized to direct. The
Trustee shall not be responsible for the adequacy of the Trust Fund to meet and
discharge any liabilities under the Plan. If a dispute arises regarding who is
entitled to or should receive any distribution from the Trust Fund, the Trustee
may withhold, or cause the withholding of, such distribution until the dispute
has been resolved.
SECTION 9.05 EXCLUSIVE BENEFIT.
Except as the Committee may authorize the Trustee to return contributions to
the Employer pursuant to the terms of the Plan, no part of the Trust Fund shall
be used for or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries and for defraying expenses of the Plan and
Trust.
The Employer shall have no beneficial interest in the assets of the Trust, and
no part of the Trust shall ever revert to or be repaid to the Employer,
directly or indirectly, except that upon written request, the Employer shall
have a right to recover:
a. a contribution to the Plan made by mistake of fact, if such contribution
(to the extent made by mistake of fact) is returned to the Employer
within one year after payment of such contribution;
b. any contributions to the Plan conditioned upon initial qualification of
the Plan under section 401(a) of the Code, if the Plan does not so
qualify and such contributions are returned to the Employer within one
year after the denial of qualification of the Plan and only, if a
determination letter request is filed by the terms prescribed by law for
filing the Employer's tax return for the taxable year in which the Plan
is adopted;
c. a contribution to the Plan, conditional on deductibility, which is
disallowed as a deduction under section 404 of the Code, if such
contribution (to the extent disallowed) is returned to the Employer
within one year after the deduction is disallowed; and
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d. any residual assets due to a section 415 excess contribution upon
termination of the Plan, if all liabilities of the Plan to Participants
and their Beneficiaries have been satisfied and the reversion does not
contravene any provision of law.
SECTION 9.06 EXPENSES OF THE PLAN AND TRUST.
All legal, administrative, taxes, and other expenses of the Plan and Trust and
the Trustee's fees (if any) shall be paid by the Trust, except to the extent
paid by the Employer.
SECTION 9.07 DUTIES AND RESPONSIBILITIES OF TRUSTEE.
It shall be the duty of the Trustee to hold, in trust, Company Stock, cash, and
other property from time to time received by it, and the Trustee shall have
authority to manage and control the assets of the Plan pursuant to the terms of
the Plan and this Trust, and subject to Section 4.07 of the Plan which permits
certain Participants to diversify the investment of certain of their Accounts.
The Trustee is to discharge such powers and duties solely in the interest of
the Participants and Beneficiaries for the exclusive purpose of providing
benefits to them, defraying reasonable expenses of administering the Plan, and
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. Except as otherwise provided herein, the Trustee shall invest the
assets of the Trust Fund as directed by the Committee. Since the Trustee is
directed by the Committee to invest the Trust Fund primarily in Company Stock,
the Trustee shall not have a duty to diversify the investments of such Accounts
to the extent such Accounts are invested in Company Stock. To the extent the
Committee has not directed the Trustee as to the investment of the Trust Fund,
the Trustee shall diversify such investments so as to minimize the risk of
large losses, unless, under the circumstances, it is clearly prudent not to do
so, or to the extent the Trustee is directed as to the investment of the Trust
Fund by a Participant in accordance with Section 4.07 of the Plan. Further,
the Trustee shall not make any investments or maintain the indicia of ownership
of any assets of the Plan outside the jurisdiction of the District Courts of
the United States.
Any cash received by the Trustee as Employer Contributions or as earnings on
the Trust Fund attributable to Unallocated Shares which is not applied to repay
a current obligation under any Acquisition Loan shall be held in the Loan
Suspense Account and either invested pursuant to Section 9.08, or used to
satisfy another obligation of the Plan. Pending such investment or application
of cash, the Trustee may retain cash uninvested, without liability for interest
if it is prudent to do so.
The Trustee shall not knowingly cause the Plan to engage in any transaction
prohibited by section 4975 of the Code or by section 406 or 407(a) of ERISA in
the absence of an exception therefor. The Trustee may hold, acquire, or invest
in qualifying employer securities as defined in section 407(d)(5) of ERISA or
qualifying employer real estate as defined in section
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407(d)(4) of ERISA (or both) to the extent that the aggregate fair market value
of such securities and property does not exceed the limitations set forth in
section 407 of ERISA; provided, however, that all purchases of Company Stock
shall be for no more than, and for no less than, adequate consideration. For
this purpose, "adequate consideration" means the fair market value, determined
in good faith by the Trustee.
The Company and each Employer shall indemnify the Trustee for all expenses,
costs, or liabilities arising out of the performances of its duties under the
Plan or Trust, except to the extent it is judicially determined that any such
expense, cost, or liability is due to the willful misconduct or gross
negligence of the Trustee. The Trustee shall be protected in acting upon any
notice, direction, certificate, or other paper or document reasonably believed
by the Trustee to be genuine and to have been executed by a Participant, the
Plan Administrator, the Employer, a duly appointed Investment Manager or by a
duly authorized person or persons representing any of the foregoing. During
any period of time that there is more than one Trustee, a Trustee shall not be
liable for any act or failure to act of any other Trustee, except to the extent
a Trustee (a) knowingly participates in, or undertakes to conceal, an act or
omission of another Trustee, knowing that such act or omission is a breach of
fiduciary duty to the Plan; (b) fails to comply with the specific
responsibilities required as a Trustee, and such failure enables another
Trustee to commit a breach of fiduciary duty to the Plan; or (c) has knowledge
of a breach of fiduciary duty to the Plan by another Trustee and does not make
reasonable effort under the circumstances to remedy such breach.
SECTION 9.08 SPECIFIC POWERS AND DUTIES OF TRUSTEE.
In addition to the powers and duties conferred upon it by other provisions of
the Plan and except to the extent inconsistent with applicable law or with
provisions of the Plan and Trust, the Trustee shall have the following powers
regarding the Trust and Trust Fund:
a. to sell at public or private sale, exchange, convey, transfer, lease, or
otherwise dispose of, and also to grant options with respect to all or
any part of any property at any time held in the fund, for such
considerations, in cash or in credit, and upon such terms and conditions,
as it shall deem advisable. In connection with the purchase of
securities, margin accounts may be opened and maintained. If put or call
options are traded, they must be traded on and purchased through a
national securities exchange registered under the Securities Act of 1934,
as amended, or if the options are not traded on the national securities
exchange, they must be guaranteed by a member firm of the New York Stock
Exchange;
b. to compromise or settle any claim in respect of any debt or other
obligation due to it as Trustee hereunder, to institute and prosecute any
and all legal proceedings (including foreclosure proceedings) on behalf
of the Plan, or to take any other action for the purpose of enforcing any
such claim, and to change the rate of interest or extend the maturity
date of any such debt or obligation;
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c. to compromise or settle any claim with respect to any debt or other
obligation due to third persons from it as Trustee hereunder; to define
any and all legal proceedings in respect of any such claim; and to change
the rate of interest on, extend the maturity date of, or otherwise modify
the terms of any such debt or obligation;
d. to join in and become a party to, or to oppose any reorganization
(including any consolidation, merger, or other capital changes)
affecting any corporate securities which may at any time be held in the
Fund, or any plan or agreement for the protection of the interests of the
holders of any such securities; to participate in any such protective
plan or agreement or any such reorganization to the same extent and as
fully as though it was the absolute and individual owner of such
securities; to deposit with any Committee or depositories pursuant to any
such protective Plan or agreement or any such reorganization any
securities held in the Trust Fund; to make payments from the Trust Fund
of and charges or assessments imposed by the terms of any such protective
plan or agreement on any such reorganization; and to receive and continue
to hold in the Trust Fund any property allotted to the Trust Fund by
reason of the Trustee's participation therein;
e. to vote, in person or by general or limited proxy, on any securities at
any time held in the Trust Fund, at any meeting of security holders, with
respect to any business which may come before the meeting; to execute
general or limited proxies to one or more nominees; as holder of said
securities, to consent to, approve and authorize any corporate act or
proceeding, including any merger on consolidation, lease, mortgage or
sale of corporate property, or dissolution or liquidation, whether or not
proposed at any such meeting; to execute such instruments as may be
necessary or appropriate therefore; and generally to exercise the powers
of an owner with respect to stocks, bonds, securities, or other property;
f. to exercise any conversion or subscription rights appurtenant to any
securities at any time held in the Trust Fund or to sell any such rights;
g. to execute, acknowledge and deliver any and all deeds, leases,
assignments, and other instruments that it may deem necessary or proper
in the exercise of any of its powers under this agreement;
h. to cause any property at any time held in the Trust Fund to be registered
in the name of a nominee of the Trustee, without disclosure of the Trust,
or to hold in bearer form any securities at any time held in the Trust
Fund so that they will pass by delivery, but any such registration or
holding by the Trustee shall not release it from its responsibility for
the safe custody and disposition of the Trust Fund, in accordance with
the terms and provisions of this agreement;
i. to improve, develop, repair, maintain, preserve, and operate any property
held in the Trust Fund, or to invest and retain qualifying employer real
property and lease such
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property to the Employer as permitted under the appropriate sections of
ERISA and regulations promulgated thereunder;
j. to borrow from time to time money from persons or others (but not from a
party in interest) for the purposes of the Trust created hereby on such
terms and conditions as the Trustee may deem advisable;
k. to lend securities for such consideration and upon such terms and
conditions as the Trustee, in its discretion, deems appropriate;
l. pursuant to direction by the Company or Committee, to borrow money from a
party in interest or other persons where such borrowing constitutes an
Acquisition Loan;
m. to employ suitable agents and counsel, and to pay their reasonable
expenses and compensation;
n. to hold part or all of the Trust Fund uninvested in its own banking or
trust department, if any, and the Trustee is further authorized to
deposit, at interest, such funds of the Plans as it may from time to time
deem appropriate in time deposits or savings accounts bearing a
reasonable interest rate, including, specifically, deposits in the
commercial banking departments in a Trustee bank;
o. to invest and reinvest in Company Stock;
p. to invest and reinvest in bonds, notes, debentures, stocks, options,
mutual funds, life insurance policies, mortgages, and vendors' interest
in contracts for sale of real property or other property, real, personal
or mixed, in such manner and to such extent as is prudent under the
circumstances;
q. to transfer monies and assets of the Trust into common trust funds
established for the Plan, including common trust funds held by a
corporate Trustee (provided the Trustee is a national banking
association);
r. to pool all or any of the Trust, from time to time, with assets belonging
to any other qualified employee pension benefit trust created by the
Company or an Employer and to commingle such assets and make joint or
common investments and carry joint accounts or behalf of this Plan and
such other trust or trusts, allocating undivided shares or interests in
such investments or accounts or any pooled assets of the two or more
trusts in accordance with their respective interests;
s. to do all acts, whether or not expressly authorized herein, which it may
deem necessary and proper for the protection of the property held
hereunder, and to carry out the purposes of the Plan; and
t. to vote Company Stock in accordance with Article VII hereof.
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If there is more than one Trustee designated and acting under this Trust, all
actions by the Trustee must be adopted by a majority of the Trustees.
SECTION 9.09 INVESTMENT MANAGER.
Upon written notice to the Trustee and the Committee, the Company may appoint
one or more investment managers as described in section 3(38) of ERISA, which
shall have the power to manage, acquire, or dispose of all or part of the Trust
assets in accordance with the provisions of the Plan and Trust agreement. The
Committee and investment manager shall execute a written agreement specifying
the Trust assets to be managed and the investment manager's duties and
responsibilities with respect to such assets, and in such agreement the
investment manager shall acknowledge that it is a fiduciary with respect to the
Plan and Trust. The Committee may authorize the investment manager to give
written instructions to the Trustee with respect to acquiring, managing, and
disposing of assets managed by the investment manager, and the Trustee shall
follow such instructions and shall be under no duty to make an independent
determination regarding whether the instruction is proper. The fees and
expenses of an investment manager shall be paid by the Trust, except to the
extent paid by the Employer.
SECTION 9.10 COMPENSATION OF TRUSTEE AND AGENTS.
The Trustee shall be entitled to reasonable compensation for its services.
Compensation shall be comparable to charges for similar services made from time
to time by other Trustees in the geographic area in which the Trustee has its
principal business. Any Trustee shall be entitled to reimbursement for
expenses properly and actually incurred in the administration of the Trust. It
may employ such agents, attorneys, accountants, or assistants as it may from
time to time deem necessary or advisable and fix the compensation to be paid to
them. Such counsel or other agents may be counsel or other agents consulted or
employed by the Employer. The expenses of the Trustee and the compensation of
the persons so employed shall be paid by the Trust Fund or the Employer, as the
Committee shall determine, on at least an annual basis. An individual serving
as Trustee who already receives full-time pay from the Employer shall not
receive compensation from the Plan.
SECTION 9.11 REPORTS OF TRUSTEE.
The Trustee shall maintain records of receipts and disbursements and shall
render reports as of the close of each final year of the Trust and within
ninety (90) days following the resignation or removal of the Trustee shall file
with the Committee an account for such year such form and containing such
information as it deems necessary, provided that such information shall satisfy
all applicable requirements imposed by ERISA. The records and accounts of the
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Trustee may be audited annually by an independent firm of certified public
accountants selected by the Committee.
SECTION 9.12 RESIGNATION, REMOVAL, AND SUBSTITUTION OF TRUSTEE.
A Trustee may resign at any time upon sixty (60) days notice to the Employer.
A Trustee may be removed at any time by the Company upon sixty (60) days
written notice to the Trustee, with or without cause. Upon resignation or
removal of the Trustee, the Committee shall appoint a successor Trustee which
shall have the same powers and duties as are conferred upon the Trustee
hereunder. Upon the delivery by a predecessor Trustee to the successor Trustee
of all property of the Trust Fund, less such reasonable amount as it shall deem
necessary to provide for its expenses, compensation, and any taxes or advances
chargeable or payable out of the Trust Fund, the successor Trustee thereupon
shall have the same powers and duties as were conferred upon the predecessor
Trustee. No successor Trustee shall have any obligation or liability with
respect to the acts or omissions of its predecessors.
In the event that a corporate Trustee merged or consolidated with another
corporation or sells or transfers substantially all of its assets and business
to another corporation, or is in any manner reorganized or reincorporated, then
the resulting or acquiring corporation shall thereupon become the corporate
Trustee hereunder without the execution of any instrument and without the need
for any action by the Committee, any Participant or Beneficiary, or any other
person having or claiming to have an interest in the Trust Fund or the Plan.
The Trustee shall be appointed by the Committee. The appointment of a Trustee
shall become effective as of the date the Committee receives the Trust's
written acceptance of the appointment. The Trustees' signature on the Plan
constitutes acceptance of the appointment. The Committee shall appoint a new
Trustee, if the Trustee fails to accept its appointment in writing.
SECTION 9.13 THE COMMITTEE.
The Company shall certify to the Trustee from time to time the name(s) of the
person(s) constituting the Committee. All directions to the Trustee by the
Committee shall be in writing, properly certified by a Committee member. The
Trustee shall be entitled to rely, without further inquiry upon all such
written directions received from the Committee.
SECTION 9.14 AMENDMENT AND TERMINATION.
The Company shall have the right at any time, by an instrument in writing, duly
executed and acknowledged and delivered to the Trustee, to modify, alter or
amend this agreement, in whole or in part, and to terminate the Trust, in
accordance with the express provisions of the
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Plan. In no event, however, shall the duties, powers or liabilities of the
Trustee hereunder be changed without its written consent.
SECTION 9.15 IRREVOCABILITY.
Subject to the provisions of the Plan, the Trust is declared to be irrevocable,
and except as otherwise provided in Section 9.05, no part of the Trust Fund
shall revert to or be recoverable by the Employer or be used for or diverted to
any purposes other than for the exclusive benefit of Participants and
Beneficiaries.
The previous paragraph shall not apply to a "qualified domestic relations
order," as defined in section 414(p) of the Code, and any other domestic
relations order permitted to be so treated by the Trustee under the provisions
of the Retirement Equity Act of 1984. The Committee shall establish a written
procedure to determine the qualified status of domestic relations orders and to
administer distributions under any domestic relations orders it determines to
be qualified. To the extent provided under a "qualified domestic relations
order," a former Spouse of a Participant shall be treated as the Participant's
Spouse or Surviving Spouse for all purposes under the Plan.
SECTION 9.16 PARTIES TO THE TRUST AGREEMENT.
Any Employer which has adopted the Plan in accordance with the terms thereof
shall become a party to this agreement, by signing the Plan or upon delivering
a certified copy of a resolution to the effect that it agrees to adopt the
Plan, to become a party to this agreement, and to be bound by all terms and
conditions of the Plan and this agreement, as then in effect and as may
thereafter be amended. The Committee shall have the sole authority to enforce
this agreement and the Trustee shall in no event be required to deal with any
person, except the Committee. The Trustee shall in all respects invest and
administer the Trust Fund as a single fund for investment and accounting
purposes, without identification as to individual Participants, Beneficiaries,
or Employers.
An Employer shall cease to be a party to this agreement upon delivering to the
Trustee a certified copy of a resolution terminating its participation in the
Plan. In such event, or in the event of the merger, consolidation, sale of
property or stock, separation, reorganization, or liquidation of any
corporation that is a party to this agreement, the Trustee, until directed
otherwise by the Committee, shall continue to hold, in accordance with the
provisions of this agreement, that portion of the Trust Fund which, pursuant to
the determination of the Committee, is attributable to the participation in the
Plan of the Employees and their Beneficiaries affected by such termination or
by such transaction.
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SECTION 9.17 TRUSTEE ACTION.
If the Trustee consists of more than one person, the Trustees shall act by a
majority of their number. The Trustees may authorize one or more specific
Trustees to sign papers on their behalf.
ARTICLE X
AMENDMENT, TERMINATION, AND MERGER
SECTION 10.01 AMENDMENT.
The Company reserves the right to amend the Plan and Trust, by written
amendment and resolution of the Board of Directors of the Company, to the
extent permitted under the Code and ERISA. No amendment affecting the rights
or duties of the Trustee shall be effective without the written consent of the
Trustees. No amendment to the plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit. Notwithstanding
the preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under section 412(c)(8) of the Code. For purposes of this
paragraph, a plan amendment which has the effect of decreasing a Participant's
Account balance or eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment, shall be treated as
reducing an accrued benefit.
SECTION 10.02 TERMINATION.
a. The Employer intends to continue the Plan indefinitely and to fund the
Plan as required by law and its terms. However, the Company reserves the
right to terminate the Plan at any time. If the Plan is totally or
partially terminated, or in the event of a complete discontinuation of
contributions under the Plan, a Participant whose participation in the
Plan is terminated as a result of such total or partial termination or
who is affected by the complete discontinuation of contributions to the
Plan shall be one hundred percent (100%) Vested in such Participant's
Accounts, determined as of the date of such total or partial termination.
b. Upon termination of the Plan, the Employer shall allocate the assets of
the Plan, after the payment of or set aside for the payment of all
expenses, among the Participants and their Beneficiaries in accordance
with the Code and ERISA.
c. Upon termination of the Plan, and after all liabilities of the Plan to
Participants and Beneficiaries have been satisfied, any residual assets
of the Plan due to a section 415 excess contribution shall be distributed
to the Employer, provided such distribution does not contravene any
provision of the law or the Plan.
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d. The allocation of benefits under this Article X shall be accomplished
either through the continuance of the Trust, the creation of a new Trust,
the payment of the benefits to be provided to the Participants or
Beneficiaries, or the purchase of annuity contracts, as determined by the
Employer.
SECTION 10.03 MERGER, CONSOLIDATION, OR TRANSFER.
The Company shall have the right at any time to merge or consolidate the Plan
with any other Plan, or transfer the assets or liabilities of the Trust to any
other Plan provided each Participant would (if the Plan were then terminated)
receive a benefit immediately after such merger, consolidation or transfer
which would equal or exceed the benefit the Participant would have been
entitled to immediately before such merger, consolidation or transfer (if the
Plan were then terminated).
ARTICLE XI
TOP-HEAVY PROVISIONS
SECTION 11.01 APPLICABILITY.
If the Plan is or becomes Top-Heavy in any Plan Year, the provisions of this
Article XI shall supersede any conflicting provisions in the Plan.
SECTION 11.02 TOP-HEAVY DEFINITIONS.
Throughout this Section 11.02, certain words and phrases have meanings which
are specifically defined for purposes of this Article XI of the Plan. These
words and phrases can be identified in that the first letter of the word or
words in the phrase are capitalized. The definitions of these words and
phrases are set forth below and, to the extent inconsistent, supersede the
definitions of any such words and phrases which are set forth in Article II, or
any other Article of the Plan.
a. "Key Employee" means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the "determination
period" was (1) an officer of the Employer, if such individual's annual
Compensation exceeds fifty percent (50%) of the dollar limitation under
section 415(b)(1)(A) of the Code; (2) an owner (or considered an owner
under section 318 of the Code) of one of the ten largest interests in the
Employer if such individual's Compensation exceeds one hundred percent
(100%) of the dollar limitation under section 415(c)(1)(A) of the Code;
(3) a five percent (5%) owner of the Employer; or (4) a one percent (1%)
owner of the Employer who has an annual Compensation of more than
$150,000. Compensation means Compensation as defined in section
415(c)(3) of the Code, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are
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excludable from the Employee's gross income under sections 125,
402(e)(3), 402(h) or 403(b) of the Code. The "determination period" is
the Plan Year containing the Determination Date and the four preceding
Plan Years. The determination of who is a Key Employee will be made in
accordance with section 416(i)(1) of the Code and the Regulations
thereunder.
b. "Top-Heavy Plan" means, for the Plan Year, any of the following
conditions exists:
1. If the Top-Heavy Ratio for this Plan exceeds sixty percent (60%)
and this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
2. If this Plan is a part of a Required Aggregation Group of plans,
but not part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Required Aggregation Group exceeds sixty
percent (60%).
3. If this plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds sixty percent
(60%).
c. "Super-Top-Heavy Plan" means, for the Plan Year, the Plan would be
Top-Heavy when "ninety percent (90%)" is substituted for "sixty percent
(60%)" each place it appears in (b) above.
d. "Top-Heavy Ratio" means the following:
1. If the Employer maintains one or more Defined Contribution Plans
(including any simplified employee pension plan) and the Employer
has not maintained any Defined Benefit Plan which during the five
(5) year period ending on the Determination Date(s) has or has
had accrued benefits, the Top-Heavy ratio for this Plan alone or
for the required or Permissive Aggregation Group, as appropriate,
is a fraction, the numerator of which is the sum of the Account
balances of all Key Employees as of the Determination Date(s)
(including any part of any Account balance distributed in the
five (5) year period ending on the Determination Date(s)), and
the denominator of which is the sum of all Account balances
(including any part of any Account balance distributed in the
five (5) year period ending on the Determination Date(s)), both
computed in accordance with section 416 of the Code and the
Regulations thereunder. Both the numerator and denominator of
the Top-Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required
to be taken into account on that date under section 416 of the
Code and the Regulations thereunder.
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2. If the Employer maintains one or more Defined Contribution Plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more Defined Benefit Plans
which during the five (5) year period ending on the Determination
Date(s) has or has had any accrued benefits, the Top-Heavy Ratio
for any required or Permissive Aggregation Group, as appropriate,
is a fraction, the numerator of which is the sum of Account
balances under the aggregated Defined Contribution Plan or Plans
for all Key Employees, determined in accordance with (1) above,
and the Present Value of accrued benefits under the aggregated
Defined Benefit Plan or Plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of
the Account balances under the aggregated Defined Contribution
Plan or Plans for all Participants, determined in accordance with
(1) above, and the Present Value of accrued benefits under the
Defined Benefit Plan or Plans for all Participants as of the
Determination Date(s), as determined in accordance with section
416 of the Code and the Regulations thereunder. The accrued
benefits under a Defined Benefit Plan in both the numerator and
denominator of the Top-Heavy Ratio are increased for any
distribution of an accrued benefit made in the five (5) year
period ending on the Determination Date.
3. For purposes of (1) and (2) above, the value of Account balances
and the Present Value of accrued benefits shall be determined as
of the most recent Valuation Date that falls within or ends with
the twelve (12) month period ending on the Determination Date,
except as provided in section 416 of the Code and the Regulations
thereunder for the first and second Plan Years of a Defined
Benefit Plan. The Account balances and accrued benefits of a
Participant (a) who is not a Key Employee, but who was a Key
Employee in a prior year, or (b) who has not been credited with
at least one Hour of Service with any Employer maintaining the
Plan at any time during the five-year period ending on the
Determination Date will be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions, rollovers
and transfers are taken into account will be made in accordance
with section 416 of the Code and the Regulations thereunder.
Deductible Employee contributions will not be taken into account
for purposes of computing the Top-Heavy Ratio. When aggregating
plans the value of Account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall
within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under either; (a) the method, if any, that
uniformly applies for accrual purposes under all Defined Benefit
Plans maintained by the Employer; or (b) if there is no such
method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of
section 411(b)(1)(C) of the Code.
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e. "Permissive Aggregation Group" means the Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered
as a group with the Required Aggregation Group, would continue to satisfy
the requirements of sections 401(a)(4) and 410 of the Code.
f. "Required Aggregation Group" means: (1) each qualified plan of the
Employer in which at least one Key Employee participates or participated
at any time during the determination period (regardless of whether the
Plan has terminated); and (2) any other qualified plan of the Employer
which enables a plan described in (1) to meet the requirements of
sections 401(a)(4) or 410 of the Code.
g. "Determination Date" means for any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year
of the Plan, the last day of that year.
h. "Valuation Date" means the date as defined in Article II as of which
Account balances or accrued benefits are valued for purposes of
calculating the Top-Heavy Ratio.
i. "Present Value" means amounts determined by using the interest and
mortality rates specified in the applicable plans. Notwithstanding the
foregoing, all determinations shall be made in accordance with section
416 of the Code and the Regulations thereunder.
SECTION 11.03 MINIMUM ALLOCATION.
a. Except as otherwise provided in (c) and (d) below, the Employer
Contributions and Forfeitures allocated on behalf of any Participant who
is not a Key Employee shall not be less than the lesser of three percent
(3%) (four percent (4%), if the Plan is Super-Top-Heavy) of such
Participant's Compensation or in the case where the Employer has no
Defined Benefit Plan which designates this Plan to satisfy section 401 of
the Code, the largest percentage of Employer Contributions and
Forfeitures, as a percentage of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The minimum
allocation is determined without regard to any Social Security
contribution.
b. For purposes of computing the minimum allocation, Compensation means
Compensation as defined in Article II.
c. The provision in (a) above shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
d. The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Employer and the minimum
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allocation or benefit requirement applicable to Top-Heavy Plans will be
met in the other plan or plans.
SECTION 11.04 NONFORFEITABILITY OF MINIMUM ALLOCATION.
The minimum allocation required (to the extent required to be nonforfeitable
under section 416(b)) may not be forfeited pursuant to section 411(a)(3)(D) of
the Code.
SECTION 11.05 ALLOCATION LIMITATIONS.
In determining the Defined Contribution Fraction under section 415(e)(3)(B) of
the Code and pursuant to Section 5.03, "one hundred percent (100%)" shall be
substituted for "one hundred twenty-five percent (125%)," unless the minimum
allocation percentage under section 416(c)(2)(A) of the Code and Section
11.03(a) of the Plan is increased from "three percent (3%)" to "four percent
(4%)" and the Plan is a Super-Top-Heavy Plan.
SECTION 11.06 TOP-HEAVY VESTING.
a. For any Plan Year during which the Plan is Top-Heavy, the vesting
schedule below will automatically apply to all benefits within the
meaning of section 411(a)(7) of the Code, except those attributable to
Employee contributions, including benefits accrued before the effective
date of section 416 and benefits accrued before the Plan became
Top-Heavy. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as Top-Heavy changes
for any Plan Year. However, this Section 11.06 does not apply to the
Account balance(s) of any Employee who does not have an Hour of Service
after the Plan has initially become Top-Heavy. Such Employee's Account
balance attributable to Employer contributions and Forfeitures will be
determined without regard to the Section 11.06.
b. The nonforfeitable interest of each Employee in his or her Account
balance attributable to Employer contributions shall be as follows:
The nonforfeitable
Years of Service: percentage is:
Less than 2 years 0%
At least 2, but less than 3 years 20%
At least 3, but less than 4 years 40%
At least 4, but less than 5 years 60%
At least 5, but less than 6 years 80%
6 or more years 100%
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c. If the vesting schedule under the Plan becomes subject to or is no longer
subject to the above schedule for any Plan Year, because of the Plan's
Top-Heavy status, such shift is an amendment to the vesting schedule and
the election provided in Section 5.10(g) of the Plan shall be available.
ARTICLE XII
GENERAL PROVISIONS
SECTION 12.01 GOVERNING LAW.
The Plan and Trust are established under, and its validity, construction and
effect shall be governed by the laws of the State of Texas. The parties to the
Trust intend that the Trust be exempt from taxation under section 501(a) of the
Code, and any ambiguities in its construction shall be resolved in favor of an
interpretation which will affect such intention.
SECTION 12.02 POWER TO ENFORCE.
The Committee shall have authority to enforce the Plan on behalf of any and all
persons having or claiming any interest in the Trust or Plan.
SECTION 12.03 ALIENATION OF BENEFITS.
Benefits under the Plan shall not be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void, nor shall any such benefits be in any way liable for or
subject to the debts, contracts, liabilities, engagements, or torts of any
person entitled to such benefits. This Section 12.03 shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a "qualified domestic relations order" as defined in
section 414(p) of the Code, or any domestic relations order entered before
January 1, 1985.
SECTION 12.04 NOT AN EMPLOYMENT CONTRACT.
The Plan is not and shall not be deemed to constitute a contract between the
Employer and any Employees, or to be a consideration for, or an inducement to,
or a condition of, the employment of any Employee. Nothing contained in the
Plan shall give or be deemed to give an Employee the right to remain in the
employment of the Employer or to interfere with the right to be retained in the
employ of the Employer any legal or equitable right against the Employer, or to
interfere with the right of the Employer to discharge or retire any Employee at
any time.
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SECTION 12.05 DISCRETIONARY ACTS.
Any discretionary acts to be taken under the Plan with respect to the
classification of Employees, contributions, or benefits shall be
nondiscriminatory and uniform in nature and applicable to all persons similarly
situated.
SECTION 12.06 INTERPRETATION.
If any provision or provisions of the Plan shall for any reason be invalid or
unenforceable, the remaining provisions of the Plan shall be carried into
effect, unless the effect thereof would be to materially alter or defeat the
purposes of the Plan. All terms of the Plan and all discretion granted
hereunder shall be uniformly and consistently applied to all the Employees,
Participants, and Beneficiaries.
ARTICLE XIII
PARTICIPATING EMPLOYERS
SECTION 13.01 ADOPTION BY OTHER EMPLOYERS.
Notwithstanding anything herein to the contrary, with the consent of the
Company, any Affiliate may adopt this Plan and all of the provisions hereof,
and participate herein and be known as a participating Employer, by a properly
executed document evidencing said intent and will of such participating
Employer.
SECTION 13.02 REQUIREMENTS OF PARTICIPATING EMPLOYERS.
a. Each such participating Employer shall be required to use the same
Trustee as provided in the Plan.
b. The Trustee may, but shall not be required to, co-mingle, hold and invest
as one Trust Fund all contributions made by participating Employers, as
well as all increments thereof. However, the assets of the Plan shall,
on an ongoing basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or
participating Employer who contributed such assets.
c. The transfer of any Participant from or to an Employer participating in
the Plan, whether such Participant is an Employee of the Company or a
participating Employer, shall not affect such Participant's rights under
the Plan, and all amounts credited to such Participant's Account as well
as such Participant's accumulated service time with
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the transferor or predecessor, and length of participation in the Plan,
shall continue to accrue to such Participant's credit.
d. Any expenses of the Trust which are to be paid by the Employer or borne
by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the
credit of all Participants.
SECTION 13.03 DESIGNATION OF AGENT.
Each participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and the Committee for the purpose of this Plan, each participating Employer
shall be deemed to have designated irrevocably the Company as its agent.
Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each participating Employer as related to
its adoption of the Plan.
SECTION 13.04 PARTICIPATING EMPLOYER'S CONTRIBUTION.
Any contribution subject to allocation during each Plan Year shall be allocated
among all Participants of all participating Employers in accordance with the
provisions of this Plan. On the basis of the information furnished by the
Committee, the Trustee shall keep separate books and records concerning the
affairs of each Employer. In the event of an Employee transfer from one
participating Employer to another, the employing Employer shall immediately
notify the Trustee thereof.
SECTION 13.05 DISCONTINUANCE OF PARTICIPATION.
Any participating Employer shall be permitted to discontinue or revoke its
participation in the Plan, and the Committee may terminate the participation of
any participating Employer. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable condition
imposed shall be delivered to the Committee. Termination of a participating
Employer's participation by the Committee shall be effected by written notice
to the participating Employer when the Committee deems it appropriate, the
Committee shall direct the Trustee thereafter to transfer, deliver, and assign
Trust assets allocable to the Participants of such participating Employer to
such new Trustee as shall have been designated by such participating Employer,
in the event that it has established a separate plan for its Employees
provided, however, that no such transfer shall be made, if the result is the
elimination or reduction of any "accrued benefit" as described in Section
10.01. If no successor is designated, the Trustee shall retain such assets for
the Employees of said participating Employer pursuant to the provisions of
Article X. In no such event shall any part of the corpus or income of the
Trust, as it relates to such participating Employer be used or
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diverted for purposes other than for the exclusive benefit of the Employees of
such participating Employer.
SECTION 13.06 COMMITTEE'S AUTHORITY.
The Committee shall have authority to make any and all necessary rules or
regulations, binding upon all participating Employers and all Participants, to
effectuate the purpose of this Article XIV.
ARTICLE XIV
SIGNATURE PAGE
IN WITNESS WHEREOF, this Plan has been executed the day and year written below.
This Plan may be executed in any number or counterparts, each of which shall be
deemed an original and no other counterpart need be produced.
Signed, sealed, and delivered on this 31st day of July, 1995.
UNITED STATES LIME & MINERALS, INC.
By: [ILLEGIBLE]
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