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COMPLETE LEASING CONCEPTS, INC. EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
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TEXT OF PLAN
October 1, 1993
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COMPLETE LEASING CONCEPTS, INC.
6280 Manchester Boulevard
Buena Park, California 90621
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COMPLETE LEASING CONCEPTS, INC. EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
(TEXT OF PLAN)
TABLE OF CONTENTS
Page
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I. REFERENCES, CONSTRUCTION AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Authorized Leave of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Before-Tax Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Before-Tax Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 Deferral Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 Deferred Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 Disability Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 Early Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.21 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.22 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.23 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.24 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.25 Forfeiture Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.26 Hours of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.27 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.28 IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.29 Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.30 Matching Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.32 Normal Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.33 PAYSOP Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.34 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.35 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.36 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.37 Prior Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.38 Profit Sharing Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.39 Profit Sharing Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.40 Re-employment Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.41 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.42 Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.43 Rollover Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.44 Rollover Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.45 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.46 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.47 Supplemental Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . 8
1.48 Supplemental Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.49 Surviving Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.50 Termination of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.51 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.52 Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.53 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.54 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.55 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.56 Year of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II. PARTICIPATION IN THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Participation Upon Re-employment. . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3 Responsibility for Share Decisions . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Cessation of Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Union Employees Excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III. CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Before-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Supplemental Matching Contributions. . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 Profit Sharing Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.5 Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Reversion of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.7 Company Not Responsible for Adequacy of Trust Fund . . . . . . . . . . . . . . . . 15
ARTICLE IV. TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Establishment of Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Investment of PAYSOP Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Investment Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Transfers of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V. ALLOCATIONS AND ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Allocations and Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Corrections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI. VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Included Years of Service - Vesting . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Normal Retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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6.6 Distribution to Partially-Vested Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Restoration of Forfeited Account Balance Upon Re-employment. . . . . . . . . . . . . . . . . . . . 20
6.8 Zero Percent (0%) Vested Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Segregated Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Forfeiture Occurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Amendment to Vesting Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VII. PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Entitlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Method of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.3 Benefit Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4 Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5 Medium of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.6 Applicable Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.7 Distribution of PAYSOP Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.8 Limitation on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VIII. MAXIMUM ACCOUNT ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.3 General Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.4 Order of Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IX. SPECIAL DISCRIMINATION RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.2 Limit on Before-Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.3 ADP Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.4 Special Rules For Determining Average Actual Deferral Percentage . . . . . . . . . . . . . . . . . 33
9.5 Distribution of Excess ADP Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.6 ACP Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.8 Distribution of Excess ACP Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.9 Forfeiture of Excess ACP Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.10 Combined ACP and ADP Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.11 Order of Applying Certain Sections of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE X. IN-SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.1 Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.2 Withdrawals After Age 59-1/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.3 Withdrawals from Rollover Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XI. LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.1 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.2 Loan Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.3 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.4 Loan Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.5 Adequate Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.6 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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11.7 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.8 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.9 Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.10 Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.11 Loan Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE XII. TOP HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.1 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.3 Determination of Top Heavy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.4 Minimum Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.5 Limitations on Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
12.6 Other Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XIII. DESIGNATION OF BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.1 Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.2 Failure to Designate Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XIV. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
14.1 Powers and Duties of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
14.2 Powers and Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.3 Agents; Report of Committee to Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.4 Structure of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14.5 Adoption of Procedures of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14.6 Instructions for Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14.7 Claims for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
14.8 Hold Harmless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
14.9 Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
14.10 Investment Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XV. TRANSFER OF PLAN ASSETS TO SUCCESSOR PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XVI. AMENDMENT OR TERMINATION OF THE PLAN AND TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
16.1 Right to Amend, Suspend or Terminate Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
16.2 Retroactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
16.3 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
16.4 No Further Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
16.5 Partial Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE XVII. GENERAL LIMITATIONS AND PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
17.1 All Risks on Members and Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
17.2 Trust Fund is Sole Source of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
17.3 No Right to Continued Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
17.4 Payment on Behalf of Payee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
17.5 Nonalienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
17.6 Missing Payee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
17.7 Required Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
17.8 Subject to Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
17.9 Communications to Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
iv
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17.10 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
17.11 Communications from the Company or Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
17.12 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
17.13 Voting and Tender or Exchange Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
17.14 Exclusive Benefit of Members and Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 61
17.15 Additional Powers of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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COMPLETE LEASING CONCEPTS, INC. EMPLOYEE
SAVINGS AND PROFIT SHARING PLAN
EFFECTIVE OCTOBER 1, 1993
PREAMBLE
THE COMPLETE LEASING CONCEPTS, INC. EMPLOYEE SAVINGS AND PROFIT
SHARING PLAN is designed as an incentive to Employees to make and continue
careers with the Company. The Plan provides eligible Employees the opportunity
to regularly set aside a part of their before-tax Compensation and thereby
build additional financial security upon Retirement or in the event of
Disability, death or other Termination of Service. The Plan also allows the
Company to make Profit Sharing Contributions to the Plan. The Before-Tax
Contributions, Matching Contributions and Profit Sharing Contributions made on
behalf of each Member are invested and accumulated in the Trust Fund free of
taxation until distributed when the Member's employment ends.
The Plan, and the Trust Fund established and maintained as part
of the Plan, are intended to constitute a profit sharing plan and trust with a
"cash or deferred arrangement" which are qualified and exempt from taxation
under Code Sections 401(a), 401(k) and 501(a). The Plan and Trust are also
intended to comply with all applicable requirements of ERISA. All provisions
of the Plan, including the Trust Agreement, shall be interpreted to comply with
the applicable requirements of the Code, ERISA and the Regulations.
All Trust Fund assets, contributions, income and other additions
to the Trust Fund shall be administered, distributed, forfeited and otherwise
governed by the provisions of the Plan and Trust Agreement.
The Employer was formerly a Participating Company in the Carolina
Freight Corporation Employee Savings Plan (the "Prior Plan"). The Employer
withdrew from the Prior Plan effective September 30, 1993, and established this
Plan.
ARTICLE I. REFERENCES, CONSTRUCTION AND DEFINITIONS
Unless otherwise indicated, all references to articles, sections
and subsections shall be to the Plan as set forth herein. The Plan and all
rights thereunder shall be construed and enforced in accordance with ERISA and,
to the extent that state law is applicable, the laws of the State of North
Carolina. The article titles and the captions preceding sections and
subsections have been inserted solely as a matter of convenience and in no way
define or limit the scope or intent of any provisions. When the context so
requires, the singular includes the plural. Whenever used herein and
capitalized, the following terms shall have the respective meaning indicated
unless the context plainly requires otherwise.
8
1.1 ACCOUNT: The account (including a Before-Tax Subaccount,
PAYSOP Subaccount, Supplemental Subaccount, Rollover Subaccount, Profit Sharing
Subaccount, Matching Contribution and any other subaccount established from
time to time under such account) maintained to record the interest of a Member
or Beneficiary in the Trust Fund.
1.2 ACCRUED BENEFIT: With respect to each Member, the
balance in such Member's Account as of the applicable Valuation Date, following
adjustment thereof as of such Valuation Date as provided in Article V.
1.3 ADMINISTRATOR: The Employee appointed by the Committee
pursuant to Section 14.1 to perform such administrative duties as the Committee
designates.
1.4 AFFILIATE: Any entity affiliated with the Company within
the meaning of Sections 414(b), (c) or (m) of the Code or under Regulations
prescribed under Section 414(o) of the Code, except that, for purposes of
applying the provisions of Article VIII and Section 12.5 herein with respect to
limitations on contributions, Section 415(h) of the Code shall apply.
1.5 AUTHORIZED LEAVE OF ABSENCE: A leave of absence
authorized (pursuant to applicable procedures) by the Company or pertinent
Affiliate under the Company's or Affiliate's personnel practices, provided that
all persons under similar circumstances are treated alike in the granting of
such leaves of absence, and provided further that the Employee returns within
the period specified in the leave of absence, or (b) an absence required to be
considered an Authorized Leave of Absence by applicable law.
1.6 BEFORE-TAX CONTRIBUTION: A contribution made by the
Company to the Trust Fund pursuant to a Deferral Election.
1.7 BEFORE-TAX SUBACCOUNT: The subaccount kept as part of a
Member's Account (a) to account for amounts previously held in the Member's
"Salary Deferral Account" under the Prior Plan Provisions, (b) to account for
the Before-Tax Contributions, if any, made on behalf of the Member, and (c) to
account for all income, expenses, gains, losses and other adjustments allocable
to such subaccount.
1.8 BENEFICIARY: The beneficiary or beneficiaries designated
by a Member pursuant to Article XIII to receive the amount, if any, payable
under the Plan upon the death of such Member, or, where there has been no such
designation or an invalid designation, the individual or entity, or the
individuals or entities, who will receive such amount pursuant to Article XIII.
2
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1.9 BOARD: The Board of Directors of the Company.
1.10 BREAK IN SERVICE: An applicable computation period, as
set forth in Section 1.56, during which an individual has not completed more
than 500 Hours of Service, as determined by the Committee (or its delegate) in
accordance with the Regulations. Solely for purposes of determining whether a
Break in Service has occurred for eligibility purposes, an individual shall be
credited with the Hours of Service in accordance with Section 1.26 which such
individual would have completed but for either (a) an Authorized Leave of
Absence for which such individual is not paid or entitled to payment or (b) a
maternity or paternity absence, as defined in Section 1.26.
1.11 CODE: The Internal Revenue Code of 1986, as now in
effect or as hereafter amended. All citations to sections of the Code are to
such sections as they may from time to time be amended or renumbered.
1.12 COMMITTEE: The "Complete Leasing Concepts, Inc. Employee
Savings and Profit Sharing Plan Committee" appointed by the Board and as
provided for in Article XIV. For purposes of ERISA, the Committee shall be the
"plan administrator" and as such is a named fiduciary of the Plan.
1.13 COMPANY: Complete Leasing Concepts, Inc., a California
corporation, or any entity which succeeds to its rights and obligations with
respect to the Plan.
1.14 COMPENSATION: Cash remuneration actually paid by the
Company to an Employee for Service during the Plan Year which constitutes
"wages" within the meaning of Section 3401(a) of the Code plus such
remuneration which, but for the deferral thereof pursuant to Sections 125 and
401(k) of the Code, would have been reported on Form W-2.
An Employee's Compensation in excess of $200,000 (as adjusted
upwards from time to time pursuant to Code Section 415(d)(1)) shall be
disregarded. In determining the Compensation of a Member for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in applying
such rules, the term "family" shall include only the spouse of the Member and
any lineal descendants of the Member who have not attained age 19 before the
close of the year. If, as a result of the application of such rules the
adjusted $200,000 limitation is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the application of this
limitation.
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1.15 DEFERRAL ELECTION: A Member's written election filed
with the Administrator whereby the Member elects to forgo the receipt of a
specified percentage of Compensation on the condition that the Company make
Before-Tax Contributions in an amount equal to the amount of Compensation
forgone.
1.16 DEFERRED RETIREMENT: Termination of Service after the
Member's 65th birthday, other than on account of death.
1.17 DIRECT ROLLOVER: A payment by the Plan to the eligible
retirement plan specified by the distributee.
1.18 DISABILITY: A physical or mental condition which totally
and permanently prevents such Employee from performing the regular duties of
the Employee's job as the Committee in the exercise of its sole and absolute
discretion shall determine based upon competent medical evidence satisfactory
to the Committee.
1.19 DISABILITY RETIREMENT: Termination of Service which the
Committee determines, in the exercise of its sole discretion, to be on account
of Disability.
1.20 EARLY RETIREMENT: Termination of Service, other than on
account of death, on or after a Member's 55th birthday but before such Member's
65th birthday.
1.21 EFFECTIVE DATE: The "Effective Date of the Plan" is
October 1, 1993, except as otherwise provided with respect to a particular
provision.
1.22 EMPLOYEE: Except as otherwise provided herein, a person
who is a common law employee of the Company or an Affiliate. In determining
who is an Employee for purposes of this Plan, the following special provisions
shall apply to the extent applicable:
(a) Each leased employee, within the meaning of Code Section
414(n), shall be treated as an Employee. Notwithstanding the foregoing,
however, if all such leased Employees constitute less than 20 percent of the
non-highly compensated work force, as defined in Code Section 414(n)(5)(C)(ii),
of the Company and Affiliates, this Section 1.22 shall not apply to any leased
Employee covered by a retirement plan described in Code Section 414(n)(5).
(b) Each individual who is a nonresident alien and who
receives no income from the Company or an Affiliate which constitutes income
from sources within the United States shall not be treated as an Employee.
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1.23 ENTRY DATE: With respect to an Employee, the day on
which such Employee enters the membership of the Plan as provided in Section
2.1. Entry Dates are the January 1, April 1, July 1, and October 1 of each
Plan Year during which the Plan is in effect.
1.24 ERISA: The Employee Retirement Income Security Act of
1974, as now in effect or as hereafter amended. All citations to sections of
ERISA are to such sections as they may from time to time be amended or
renumbered.
1.25 FORFEITURE BREAK IN SERVICE: A Member incurs a
Forfeiture Break in Service when the Member incurs five consecutive Breaks in
Service.
1.26 HOURS OF SERVICE: Hours of Service shall include (a)
each hour for which an Employee is paid or entitled to payment by the Company
or an Affiliate for Service; (b) each hour for which an Employee is paid or
entitled to payment by the Company for reasons other than for Service (such as
vacation, holiday, illness, incapacity (including Disability), lay-off, jury
duty, military duty or leave of absence); (c) each hour (to the extent not
included in (a) or (b)) for which back pay (irrespective of mitigation of
damages) has been either awarded or agreed to by the Company or an Affiliate;
and (d) each hour for which an Employee is not actually in Service but is
required to be given credit for Service under any law of the United States;
provided, that in applying paragraph (b) for periods in which an Employee is
not actually in Service, the following special provisions shall apply:
(a) The number of hours to be credited with respect to any
single continuous period shall be the lesser of: (A) 501 hours, or (B) the
number of hours for which the Employee is paid with respect to such period;
(b) No hours shall be credited with respect to payments made
to the Employee for the purpose of complying with applicable workers'
compensation, unemployment compensation or disability insurance laws, or
payments solely to reimburse an Employee for medical or medically related
expenses incurred by the Employee; and
(c) An amount paid to an Employee by the Company or an
Affiliate indirectly, such as by a trust, fund or insurer to which the Company
or an Affiliate makes contributions or pays premiums, shall be deemed to be
paid by the Company or Affiliate.
Notwithstanding the foregoing provisions of this Section 1.26,
solely for the purpose of determining whether an Employee has incurred a Break
in Service, the following special provisions shall apply:
5
12
(A) In addition to hours for which an Employee is entitled to
credit under (a) through (d) above, such Employee shall also receive credit for
each hour with respect to the period that such Employee is on an Authorized
Leave of Absence for which such Employee is not paid or entitled to payment.
(B) An Employee 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 Employee but for such absence, or in any
case in which such hours cannot be determined, 8 Hours of Service per day of
such absence. For purposes of this paragraph (b), an absence from work for
maternity or paternity reasons means an absence (i) by reason of the pregnancy
of the Employee, (ii) by reason of a birth of a child of the Employee, (iii) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (iv) 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 (b) shall be
credited with respect to the Plan Year in which the absence begins, if the
crediting is necessary to prevent a Break in Service in that Plan Year; in all
other cases, such Hours of Service shall be credited in the following Plan
Year.
An Employee with respect to whom the Company or Affiliate
maintains records of hours for which payment is made or due shall be credited
with Hours of Service on the basis of such records. Any other Employee shall
be credited with Hours of Service on the basis of 45 hours for each week such
Employee is paid or entitled to payment for any part of such week. Subject to
the provisions of paragraph (b) of this Section 1.26, with respect to any
Employee who is entitled to receive credit for Service for a period such
Employee is not paid or entitled to payment, such Employee shall be credited
with 45 Hours of Service for each week or part thereof during such period. The
provisions of this Section 1.26 shall be applied in accordance with the
provisions of United States Department of Labor Regulations Sections
2530.200b-2(b) and (c), which provisions are incorporated herein by reference.
1.27 INVESTMENT FUNDS: The separate subfunds of the Trust
Fund maintained for investment purposes, as provided in Article IV.
1.28 IRS: The United States Internal Revenue Service.
1.29 MATCHING CONTRIBUTION: The contribution the Company
makes to the Trust Fund pursuant to Section 3.5.
1.30 MATCHING SUBACCOUNT: The subaccount kept as part of a
Member's Account (a) to account for Matching Contributions and (b)
6
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to account for income, expenses, gains, losses and other adjustments allocable
to this subaccount.
1.31 MEMBER: With respect to a Plan Year, an Employee who is
enrolled in the Plan as provided in Article II and a former Employee who has an
Accrued Benefit for the Plan Year.
1.32 NORMAL RETIREMENT: Termination of Service, other than on
account of death, on the Member's 65th birthday (the "Normal Retirement Age").
1.33 PAYSOP SUBACCOUNT: The subaccount kept as part of a
Member's Account (a) to account for amounts previously held in the Member's
"PAYSOP Account" under the Prior Plan Provisions which were transferred from
the former Carolina Freight Corporation Payroll-Based Employee Stock Ownership
Plan to the Carolina Freight Corporation Employee Savings and Protection Plan
to this Plan and (b) to account for all income, expenses, gains, losses and
other adjustments allocable to such subaccount.
1.34 PLAN: Complete Leasing Concepts, Inc. Employee Savings
and Profit Sharing Plan, as now in effect or as hereafter amended.
1.35 PLAN ADMINISTRATOR: The Committee.
1.36 PLAN YEAR: The period beginning on October 1, 1993 and
ending on December 31, 1993. Thereafter, the period beginning on each January
1 and ending on the first December 31 thereafter.
1.37 PRIOR PLAN PROVISIONS: The text of the Carolina Freight
Corporation Employee Savings and Protection Plan document as amended and
restated effective January 1, 1987, as amended by amendments dated October 1,
1987, May 3, 1989, June 30, 1989 and October 1, 1992.
1.38 PROFIT SHARING CONTRIBUTION: The contribution the
Company makes to the Trust Fund pursuant to Section 3.4.
1.39 PROFIT SHARING SUBACCOUNT: The subaccount kept as part
of a Member's Account (a) to account for Profit Sharing Contributions, if any,
made by the Company and (b) to account for income, expenses, gains, losses and
other adjustments allocable to this subaccount.
1.40 RE-EMPLOYMENT COMMENCEMENT DATE: The date on which an
Employee first performs an Hour of Service after a Break in Service.
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1.41 REGULATIONS: The applicable regulations issued under the
Code, ERISA or other applicable law by the IRS, the Department of Labor or any
other governmental authority, and any temporary or other appropriate and
effective regulations or rules promulgated by such authorities pending the
issuance of such regulations.
1.42 RETIREMENT: The Member's Normal Retirement, Early
Retirement, Deferred Retirement or Disability Retirement. The term "Retire"
means the act of taking Retirement.
1.43 ROLLOVER CONTRIBUTION: The contribution an Employee
makes to the Trust Fund pursuant to Section 3.3, and in accordance with Code
Section 402(c)(5), of a distribution from a retirement plan qualified under
Code Section 401(a).
1.44 ROLLOVER SUBACCOUNT: The subaccount kept as part of a
Member's Account (a) to account for amounts previously held in the Member's
"Rollover Account" under the Prior Plan Provisions, (b) to account for Rollover
Contributions, if any, made by an Employee and (c) to account for income,
expenses, gains, losses and other adjustments allocable to such subaccount.
1.45 SERVICE: Employment with the Company or any Affiliate,
including periods of employment with an Affiliate rendered by an individual
prior to the date the Affiliate became an Affiliate. Service also includes
periods of employment with a predecessor employer as required by Code Section
414(a) and the Regulations thereunder. Service may also include any period of
a Member's prior employment by any organization upon such terms and conditions
as the Company may approve and subject to any required IRS approval.
1.46 SHARES: The common stock issued by Carolina Freight
Corporation or any successor corporation thereto which is held in the Trust
Fund.
1.47 SUPPLEMENTAL MATCHING CONTRIBUTION: A contribution made
by the Company to the Trust Fund to match Before-Tax Contributions at such rate
and in such amount as the Committee determines pursuant to Section 3.2 is
necessary to meet the ADP Test under Section 9.3.
1.48 SUPPLEMENTAL SUBACCOUNT: The subaccount kept as part of
a Member's Account (a) to account for the Supplemental Matching Contributions,
if any, made on behalf of the Member and (b) to account for all income,
expenses, gains, losses and other adjustments allocable to such subaccount.
8
15
1.49 SURVIVING SPOUSE: The survivor of a deceased Member to
whom such deceased Member had been legally married (as determined by the
Committee) immediately before the Member's death.
1.50 TERMINATION OF SERVICE: A termination of employment with
the Company or an Affiliate as determined by the Committee in accordance with
reasonable standards and policies adopted by the Committee; provided that a
Termination of Service shall occur on the earlier of (a) or (b) where:
(a) is the date as of which an Employee quits, is discharged,
Retires or dies, and
(b) is the first day of absence of an Employee who fails to
return to employment at the expiration of an Authorized Leave of Absence.
1.51 TRUST: The Complete Leasing Concepts, Inc. Employee
Savings and Profit Sharing Plan Trust, created by the Trust Agreement entered
into between the Company and the Trustee.
1.52 TRUST AGREEMENT: The agreement by and between the
Company and the Trustee, as it may from time to time be amended.
1.53 TRUST FUND: All cash and other assets deposited with or
acquired by the Trustee in its capacity as such hereunder, together with
accumulated income, subject to all liabilities incurred by the Trustee in its
capacity as such and less all disbursements made in respect thereof.
1.54 TRUSTEE: The entity serving as a trustee under the Trust
Agreement.
1.55 VALUATION DATE: The last day of each calendar month of
the Plan Year and any other date during the Plan Year specified by the
Committee, upon or as of which the assets and liabilities of the Trust Fund are
valued and Accounts are adjusted, as prescribed in Article V.
1.56 YEAR OF SERVICE: With respect to an individual, a Year
of Service shall accrue on the date on which such individual completes at least
1,000 Hours of Service during the applicable computation period of 12
consecutive months. The initial computation period shall begin with the date
the Employee first performs an Hour of Service. If an Employee incurs a Break
in Service before completing a Year of Service, such Employee's initial
computation period shall begin with the Employee's Re-employment Commencement
Date. If the Employee does not complete 1,000 Hours of Service during the
initial computation period, subsequent computation
9
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periods shall be each 12 month period beginning January 1 and ending December
31, beginning with the first January 1 following the date the Employee first
performed an Hour of Service or the Employee's Re-employment Commencement Date,
as the case may be.
ARTICLE II. PARTICIPATION IN THE PLAN
2.1 PARTICIPATION. Each individual who was a member of the
Carolina Freight Corporation Employee Savings and Protection Plan immediately
prior to the Effective Date of this Plan and who is an Employee as of the
Effective Date shall be enrolled as a Member of the Plan as of the Effective
Date. Each individual who is an Employee on the Effective Date and who has
attained the age of 21 and completed one Year of Service shall also be enrolled
as a Member of the Plan as of the Effective Date. Each other individual who is
an Employee on or after the Effective Date shall be enrolled as a Member of the
Plan as of the Entry Date next following such individual's attainment of age 21
and completion of one Year of Service, provided, such individual is an Employee
on such Entry Date. Notwithstanding anything hereinabove to the contrary, in
no event shall any individual become a Member if such individual (a) is a
leased employee as defined in Code Section 414(n)(2), (b) is an Employee of an
Affiliate, or (c) irrevocably elects not to become a Member.
2.2 PARTICIPATION UPON RE-EMPLOYMENT.
(A) If an Employee incurs a Termination of Service after
satisfying the age and service requirements in Section 2.1 above but before
becoming a Member and is subsequently reemployed by the Company, such Employee
may enroll in the Plan and become a member on the later of the date the
Employee again performs an Hour of Service or the Entry Date that was
applicable under Section 2.1 above.
(B) If a Member incurs a Termination of Service and is
subsequently reemployed by the Company, such individual shall be eligible to
participate in the Plan on the date such individual again performs an Hour of
Service.
2.3 RESPONSIBILITY FOR SHARE DECISIONS. By participating in
the Plan, each Member shall have accepted the responsibility for exercising the
voting, tender and exchange rights conferred in Section 17.13 with respect to
Shares allocated to the Member's PAYSOP Subaccount.
2.4 CESSATION OF MEMBERSHIP. The membership of a Member
shall end when no further benefits are payable to such Member or on such
10
17
Member's account under the Plan. No allocation of contributions shall be made
for the benefit of a Member in the Plan on or after the date on which such
Member has a Termination of Service or otherwise ceases to be an Employee of
the Company and before the day, if any, on which the individual next performs
an Hour of Service as an Employee of the Company, except that earnings and
losses shall be allocated to the Member's Account in the manner provided in
Article V; provided that a Member shall be entitled to receive an allocation of
contributions as if such Member were an Employee of the Company on the last day
of the Plan Year for the Plan Year during which the Member has a Termination of
Service due to Retirement, Disability or death.
2.5 UNION EMPLOYEES EXCLUDED. Employees covered by a
collective bargaining agreement wherein retirement benefits were made the
subject of good faith bargaining between the representative of the Employees
and the Company shall not be eligible for participation in the Plan unless the
collective bargaining agreement provides for the continued participation. An
employee shall not be ineligible during the period between the selection of the
union and the first collective bargaining agreement which covers him.
ARTICLE III. CONTRIBUTIONS
3.1 BEFORE-TAX CONTRIBUTIONS.
(a) Subject to the limitations of Articles VIII and IX, the
Company shall make Before-Tax Contributions for each Member in accordance with
the Member's Deferral Election, if any, and this Section 3.1. The Company
shall deliver such Before-Tax Contributions to the Trustee as soon as
practicable after the end of the payroll period to which they relate, but in no
event shall Before-Tax Contributions for a Plan Year be delivered to the
Trustee later than 60 days after the end of such Plan Year.
(b) An Employee may file an initial Deferral Election with
the Administrator at any time, and such Deferral Election shall take effect as
soon as practicable, but not before the Employee's Entry Date. Subject to
Section 10.1(c), a Deferral Election shall remain in effect until terminated.
A Deferral Election may be terminated by the Member by filing with the
Administrator the form provided for that purpose, and the termination shall
take effect as soon as practicable thereafter. After such a termination, a
Member may file a new Deferral Election with the Administrator at any time,
which election will take effect as soon as practicable after the first Entry
Date thereafter. A Deferral Election shall terminate automatically upon a
Member's Termination of Service. A Member may
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change the Deferral Election no more often than once a month and no more than
six times during a Plan Year by filing an amendment with the Administrator, and
such amendment shall become effective as soon as practicable after the filing
of the amendment. A Member's Deferral Election may be terminated at any time,
effective as soon as practicable following the filing with the Administrator of
notice of such termination on the form provided by the Administrator for that
purpose.
(c) Each Deferral Election shall state the percentage of
Compensation the Member wishes to forgo. A Member may elect to forgo a
percentage of the Member's Compensation, expressed as a whole percentage, not
to exceed 20 percent; provided, however, that any Member for whom 20 percent of
Compensation is greater than the limit specified in Section 9.2(a) and for whom
such limit falls between 2 whole percentages of the Member's Compensation, may
elect an allocation of such limit in lieu of an election of a whole percentage
of Compensation. The deferral percentage, or, if elected, the amount obtained
by dividing the limit by the number of pay periods in the Plan Year shall apply
to each paycheck paid while the Deferral Election is in effect.
3.2 SUPPLEMENTAL MATCHING CONTRIBUTIONS. If, as of the last
day of each Plan Year, the "Average Actual Deferral Percentage", as defined in
Section 9.1(b), for all "Highly Compensated Employees", as defined in Section
9.1(f), for the Plan Year ending on that date exceeds the maximum percentage
which will pass the "ADP Test" set forth in Section 9.3 for such Plan Year, the
Company may make a Supplemental Matching Contribution to the Plan to be
allocated to the Supplemental Subaccount of each Member who was a "Non-highly
Compensated Employee" on such day and for whom Before-Tax Contributions were
made for the Plan Year ending on that date and who was an Employee or on an
Authorized Leave of Absence on such date or who died or Retired during that
year. The Supplemental Matching Contribution shall equal such amount, which
may be a specified amount or a percentage of compensation, as the Committee
determines in its sole discretion to be necessary to raise the Average Actual
Deferral Percentage of Non-highly Compensated Employees to the lowest
percentage which will cause the Plan to pass the ADP Test for such Plan Year
and shall be allocated based on the Before-Tax Contributions made on the
Member's behalf and not withdrawn under Article X or refunded under Sections
8.4, 9.2 or 9.5 for the Plan Year. Such contributions shall be fully vested
and nonforfeitable and treated as Before-Tax Contributions for application of
the ADP Test under Section 9.3.
3.3 ROLLOVER CONTRIBUTIONS. An Employee of the Company,
other than a leased employee as defined in Code Section 414(n)(2), or an
Employee who irrevocably elects not to become a Member, shall be
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permitted to transfer to the Trust Fund, and the Trustee shall accept: (a) lump
sum distributions from another qualified plan which are eligible for tax-free
rollover to a qualified plan and which are directly transferred from the other
qualified plan to this Plan; (b) lump sum distributions received by an Employee
from another qualified plan which are eligible for tax-free rollover to a
qualified plan and which are transferred by the Employee to this Plan within 60
days following such Employee's receipt thereof; (c) amounts transferred to this
Plan from a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (1) were
previously distributed to the Employee by another qualified corporate (and,
after December 31, 1983, noncorporate) plan as a lump sum distribution, (2)
were eligible for tax-free rollover to a qualified corporate or noncorporate
plan and (3) were deposited in such conduit individual retirement account
within 60 days of receipt thereof and other than earnings on said assets; (d)
amounts distributed to the Employee from a conduit individual retirement
account meeting the requirements of clause (c) above and transferred by the
Employee to this Plan; and (e) amounts transferred from another plan in
accordance with Section 17.10. Such transfers shall be subject to the
following provisions: (A) prior to accepting any transfers to which this
Section applies, the Committee may require the Employee to establish that the
amounts to be transferred to this Plan meet the requirements of this Section
and may also require the Employee to provide an opinion of counsel satisfactory
to the Committee that the amounts to be transferred meet the requirements of
this Section; (B) such transfer must satisfy the requirements of Code Section
402(c); (C) permission shall be given only if, on advice of legal counsel for
the Company, the transfer will not jeopardize the status of the Trust Fund as
tax-exempt under Code Section 501(a) and the status of the Plan as qualified
under Code Section 401(a); (D) no transfer shall be accepted all or a part of
which consists of insurance contracts; and (E) no transfer of assets subject to
the survivor annuity rules of Code Section 401(a)(11) shall be accepted if the
transfer will cause this Plan to be considered a transferee plan required to
provide automatic survivor benefits. All contributions under this Section 3.3
shall be nonforfeitable.
The Committee must treat an Employee who has made a Rollover
Contribution to the Trust prior to satisfying the Plan's eligibility conditions
as a Member for all purposes of the Plan except the Employee is not treated as
a Member for purposes of sharing in Profit Sharing Contributions under the
Plan.
3.4 PROFIT SHARING CONTRIBUTIONS. The Company may, in its
sole discretion, elect to make a Profit Sharing Contribution to the Plan. The
Profit Sharing Contribution shall be allocated among all
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eligible Members for the Plan Year in proportion to Compensation. For purposes
of this Section only, an eligible Member shall be each Member who has completed
at least 1,000 Hours of Service for the Company and is an Employee of the
Company on the last day of the Plan Year or who incurred a Termination of
Service during the Plan Year due to Retirement, Disability or death. Such
Member shall be eligible to receive an allocation hereunder whether or not the
Member elects to defer a portion of the Member's income to this or any other
tax-qualified plans sponsored by the Company. Each Member's share of the
Profit Sharing Contribution shall be allocated to the Member's Profit Sharing
Subaccount.
3.5 MATCHING CONTRIBUTIONS. Subject to the limitations of
Articles VIII and IX, the Company shall make a Matching Contribution for each
Member who made Before-Tax Contributions. The Matching Contribution for the
Member shall be in an amount equal to 25% of the first 5 percent of
Compensation that the Member elects to defer pursuant to Section 3.1. The
Matching Contribution may be adjusted periodically by the Board.
3.6 REVERSION OF CONTRIBUTIONS.
(a) Qualification. Notwithstanding any other provisions
herein contained, this Plan is entered into on the conditions that the Plan and
the Trust Agreement shall be approved by the IRS as a qualified and exempt plan
and trust under the provisions of the Code and Regulations so that
contributions to the Trust may be deducted for Federal income tax purposes,
within the limits of the Code and Regulations, and be nontaxable to Members
when contributed. If such approval should be denied for any reason (including
failure to comply with any conditions for such approval imposed by the IRS),
contributions made after the execution of the Trust Agreement and prior to such
denial and all assets in the Trust Fund shall be returned to the Company,
without any liability to any person, within one year after the date of denial
of such approval.
(b) Mistake of Fact. Notwithstanding any other provisions
herein contained, if any contribution is made due to a mistake of fact, such
contribution shall upon the direction of the Company, which shall be given in
conformity with the provisions of ERISA, be returned to the Company or the
parties who made it, as directed by the Company, without liability to any
person.
(c) Deduction. Notwithstanding any other provisions herein
contained, all contributions are hereby expressly conditioned upon their
deductibility under Section 404 of the Code and Regulations, as amended from
time to time, and if the deduction for any contribution is disallowed in whole
or in part, then such
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contribution (to the extent the deduction is disallowed) shall upon direction
of the Committee, which shall be given in conformity with the provisions of
ERISA, be returned, without liability to any person, within one year after such
disallowance.
3.7 COMPANY NOT RESPONSIBLE FOR ADEQUACY OF TRUST FUND.
Except as and if required by applicable law, neither the Board, the Company,
the Committee, any member of the Committee nor the Trustee shall be responsible
for the adequacy of the Trust Fund to meet and discharge Plan liabilities.
ARTICLE IV. TRUST FUND
4.1 ESTABLISHMENT OF INVESTMENT FUNDS. All monies, securities
or other property received as contributions under the Plan shall be delivered
to the Trustee under the Trust, to be managed, invested, reinvested and
distributed for the exclusive benefit of the Members and their Beneficiaries in
accordance with the Plan, the Trust Agreement and any agreement with an
insurance company or other financial institution constituting a part of the Plan
and Trust. By written notice to the Trustee, the Committee may delegate to
itself the authority to exercise investment management responsibilities over
all or any portion of the Trust Fund. The Trustee, at the direction of the
Committee, shall cause to be established or maintain one or more of the
following types of Investment Funds for the investment of the Trust Fund,
provided that the Committee shall have the sole discretion to direct the Trustee
to change, add or eliminate any such funds from time to time.
(a) Income Fund. A low risk investment fund, the assets of
which consist primarily of one or more guaranteed income contracts issued by an
insurance company, one or more certificates of deposit issued by a national
bank or savings and loan association, one or more direct obligations of the
United States government or any agency thereof, or one or more obligations
guaranteed as to principal and interest by the United States government or an
agency thereof. It may also include contracts purchased from a financial
institution intended to limit the volatility of the Plan investment results.
(b) Equity Fund. An investment fund with a
higher-than-average risk that consists primarily of such capital, common or
other forms of equity stocks, or securities convertible into common or capital
stock as may be purchased pursuant to the Trust Agreement.
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(c) Balanced Fund. An investment fund with below average
risk that invests primarily in common stocks and fixed income securities.
(d) Bond Fund. An investment fund that consists primarily of
fixed income securities.
(e) GIC Fund. An investment fund that consists primarily of
investments in guaranteed income contracts.
(f) Stock Fund. Prior to December 31, 1990, Members could
elect to invest contributions in this fund pursuant to Prior Plan Provisions.
This fund is maintained by the Trustee and consists primarily of shares of
Carolina Freight Corporation as well as such amount of cash and cash
equivalents as is necessary to manage the fund.
4.2 INVESTMENT OF PAYSOP SUBACCOUNT. A Member's PAYSOP
Subaccount shall at all times be invested in the Stock Fund.
4.3 INVESTMENT DIRECTION. A Member may elect, in such
manner and form as the Administrator prescribes, to direct the investment of
contributions allocated to such Member's Before-Tax, Supplemental, Matching,
Profit Sharing and Rollover Subaccounts, in the various Investment Funds
established by the Trustee; provided, however, that a Member may not direct the
investment of contributions in the Stock Fund. In the event an effective
investment direction is not made by the Member pursuant to this Section 4.3,
all such contributions shall be invested in the Income Fund. A Member may
direct the investment of such contributions in multiples of 10 percent of the
amount of the contribution. All investment directions given by a Member shall
be deemed to be a continuing direction until changed. A Member may change such
Member's investment direction, in such manner and form as prescribed by the
Administrator, no more often than once a month and no more than six times
during a Plan Year, and such new investment direction shall become effective as
soon as practicable following the receipt by the Administrator of such
direction.
4.4 TRANSFERS OF INVESTMENTS. A Member may elect in such
manner and form as the Administrator prescribes, to transfer amounts in such
Member's Before-Tax, Supplemental, Matching, Profit Sharing and Rollover
Subaccounts (but not PAYSOP Subaccount) into and out of the various Investment
Funds; provided, however, that no amounts may be transferred into the Stock
Fund. The minimum amount that can be transferred out of any one Investment
Fund is 10 percent of the value of the Member's Account, or if less, the entire
amount invested in such Investment Fund.
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4.5 LOANS. A loan to a Member under Article XI shall be from
such Member's Account and shall be considered an earmarked investment of the
Member's Account. A loan to a Member shall reduce the amounts invested in the
Investment Funds on a pro rata basis and shall be charged against each
subaccount invested in each Fund on a pro rata basis. Loan repayments shall
reduce the amount of the loan to the extent it represents principal and shall
be invested in the Investment Funds in accordance with the Member's then
existing investment direction. Repayments shall be credited to the Member's
Subaccounts on a pro rata basis.
ARTICLE V. ALLOCATIONS AND ADJUSTMENTS
5.1 ALLOCATIONS AND ADJUSTMENTS.
(a) Forfeiture Allocation. Subject to any restoration
allocation required under Article VI, the Committee will allocate Member
forfeitures which occur pursuant to Section 6.10 or 17.6 to first reduce the
Company's Matching Contributions for the Plan Year in which the forfeiture
occurs and then to reduce the Company's Profit Sharing Contributions for the
Plan Year in which the forfeiture occurs.
(b) Revaluation of Trust Fund. The assets of the Trust Fund
shall be revalued by the Trustee monthly on the last day of each calendar
month, and in making such revaluation the Trustee shall take into account
earnings or losses of the Trust Fund net of reasonable expenses and capital
appreciation or depreciation in such assets whether or not realized. The
method of revaluation shall be determined by the Trustee, and shall be followed
with reasonable consistency from month to month. The aggregate amount credited
to the Accounts of all Members having Accounts in the Trust Fund shall be
adjusted monthly as of each Valuation Date so as to be equal to the value of
such assets on such date. Before making the monthly adjustments, the Accounts
of Members shall be reduced by any payments made therefrom during the previous
month.
(c) Adjustment of Accounts. The amounts in a Member's Before
Tax Subaccount, PAYSOP Subaccount, Rollover Subaccount, Matching Subaccount,
Profit Sharing Subaccount and Supplemental Subaccount shall at all times be
separately accounted for by allocating investment gains and losses,
withdrawals, distributions, and loans separately among such subaccounts pro
rata on a reasonable and consistent basis.
5.2 REPORTS. After completing the allocations provided for
in Section 5.1, the Committee shall prepare a statement which shows the value
of each Account then maintained by the Trustee for a
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Member, or where appropriate, for a Beneficiary. The Committee also shall
prepare quarterly an Account statement for each Member and, where appropriate,
each Beneficiary, which may be forwarded to that person and which shows the
contributions to the Account of a Member for the relevant period of the Plan
Year and the then value of that Account.
5.3 CORRECTIONS. If an error or omission is discovered in
any Account, the Committee shall make such adjustment as it deems necessary to
remedy in an equitable manner such error or omission in such Account not later
than the last day of the Plan Year in which the error or omission is
discovered.
ARTICLE VI. VESTING
6.1 VESTING.
(a) A Member shall at all times be fully vested in the
Member's Before-Tax Subaccount, Supplemental Subaccount and Rollover
Subaccount.
(b) Except as otherwise provided in Sections 6.3 through 6.6,
a Member's nonforfeitable percentage of the Member's Matching Subaccount and
Profit Sharing Subaccount shall be determined in accordance with the following
vesting schedule:
Years of Service Percent Vested
---------------- --------------
Less than 3 years 0%
At least 3 years 20%
At least 4 years 40%
At least 5 years 60%
At least 6 years 80%
At least 7 years or more 100%
(c) For each year that the Plan is a Top-Heavy Plan (as that
term is defined in Section 12.3), the following vesting schedule shall apply
and shall be treated as a Plan amendment to this Plan:
Years of Service Percent Vested
---------------- --------------
Less than 1 year 0%
At least 2 years 20%
At least 3 years 40%
At least 4 years 60%
At least 5 years 80%
At least 6 years or more 100%
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The vesting provisions of Section 6.1(b), rather than the top-heavy vesting
provisions of this Section, will apply to any Member who does not perform an
Hour of Service after the Plan becomes Top-Heavy.
6.2 INCLUDED YEARS OF SERVICE - VESTING. For purposes of
determining "Years of Service" with respect to vesting, the Plan takes into
account all Years of Service an Employee completes with the Company or an
Affiliate except:
(a) For the sole purpose of determining a Member's
nonforfeitable percentage of the Member's Account which accrued for the
Member's benefit prior to a Forfeiture Break in Service, the Plan disregards
any Year of Service after the Member first incurs a Forfeiture Break of
Service.
(b) Any Year of Service before the Member attained the age of
18.
(c) Any Year of Service during the period the Company did not
maintain this Plan or a predecessor plan.
(d) In the case of a Member who is 0% vested in the Member's
Account at the time the Member has a Break in Service, any Year of Service
before a Break in Service if the number of consecutive Breaks in Service equals
or exceeds the greater of 5 or the aggregate number of the Years of Service
prior to the Break in Service.
(e) In the case of any Member who has a 1 year Break in
Service, no Year of Service before such break shall be taken into account until
the Member completes a Year of Service after the Member's re-employment.
6.3 NORMAL RETIREMENT. Notwithstanding the vesting schedule
in Section 6.01, a Member's Account is one hundred percent (100%)
nonforfeitable upon and after attaining the Normal Retirement Age if the Member
is an Employee on or after that date. An Employee may terminate the Member's
employment and retire for the purposes hereof upon the Member's Normal
Retirement Date, and all amounts credited to such Member's Account shall be
paid to him as set forth in Article 7. If a Member continues as an Employee
after the Member's Normal Retirement Date, the Member shall continue to be
treated in all respects as a Member until the Member's actual retirement.
6.4 DISABILITY. A Member's Account will be one hundred
percent (100%) nonforfeitable if the Member's Termination of Service is a
result of the Member's Disability.
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6.5 DEATH. A Member's Account will be one hundred percent
(100%) nonforfeitable upon the Member's death.
6.6 DISTRIBUTION TO PARTIALLY-VESTED MEMBER. If pursuant to
Article 7, a partially-vested Member receives a distribution of the entire
amount of the Member's vested Account before the Member incurs a Forfeiture
Break in Service, the distribution will result in an immediate forfeiture of
the nonvested portion of the Member's Account.
6.7 RESTORATION OF FORFEITED ACCOUNT BALANCE UPON
RE-EMPLOYMENT.
(a) A partially-vested Member who is re-employed as an
Employee after receiving a distribution of the entire amount of the Member's
vested Account may repay to the Trustee the amount of the distribution
attributable to the Member's Profit Sharing and Matching Subaccounts unless the
Member no longer has a right to restoration because:
(1) Five (5) years have elapsed since the Member's first
re-employment date as an Employee following the cash-out
distribution; or
(2) The Member incurred a Forfeiture Break in Service.
If a partially-vested Member makes the distribution repayment, the Committee
must restore the Member's Profit Sharing and Matching Subaccounts to the same
dollar amount as the dollar amount of the Member's Profit Sharing and Matching
Subaccounts on the Valuation Date immediately preceding the date of the
cash-out distribution, unadjusted for any gains or losses occurring subsequent
to that Valuation Date. Restoration of the Member's Profit Sharing and
Matching Subaccounts includes restoration of all Code Section 411(d)(6)
protected benefits with respect to the restored Profit Sharing and
Matching Subaccounts in accordance with applicable Regulations.
(b) The Committee will restore the Profit Sharing and
Matching Subaccounts as of the Valuation Date coinciding with or immediately
following the repayment. To restore the Member's subaccounts, the Committee,
to the extent necessary, will allocate to the Member's subaccounts:
(1) The amount, if any, of Member forfeitures the
Committee would otherwise allocate under Section 5.1(a);
(2) The amount, if any, of the Trust Fund net income or
gain for the Plan Year; and
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(3) The Company Profit Sharing Contributions and special
contributions from the Company for the purpose of restoration.
6.8 ZERO PERCENT (0%) VESTED MEMBER. A Member who is zero
percent vested in the Member's Profit Sharing and Matching Subaccounts on the
date of such Member's Termination of Service shall be deemed to have received a
distribution of the entire non-forfeitable balance in such Subaccounts on the
date of such Termination of Service. For purposes of applying the restoration
provisions of Section 6.7, the Committee will treat the zero percent vested
Member as repaying the Member's deemed distribution on the first date of the
Member's re-employment as an Employee.
6.9 SEGREGATED ACCOUNTS.
(a) Segregated Accounts for Repaid Amount. Until the
Committee restores the Member's Profit Sharing and Matching Subaccounts, as
described in Section 6.7, the Trustee will invest the cash-out amount the
Member has repaid in segregated subaccounts maintained solely for that Member.
The Trustee must invest the amount in the Member's segregated subaccounts in
Federally insured interest bearing savings account(s) or time deposit(s) (or a
combination of both), or in other fixed income investments. Until commingled
with the balance of the Trust Fund on the date the Committee restores the
Member's Profit Sharing and Matching Subaccounts, the Member's segregated
subaccounts remain a part of the Trust, but it alone shares in any income it
earns and it alone bears any expense or loss it incurs. Unless the repayment
qualifies as a Rollover Contribution, the Committee will direct the Trustee to
repay to the Member as soon as is administratively practicable the full amount
of the Member's segregated subaccounts if the Committee determines the Member
does not have the right to have the Members accounts restored pursuant to
Section 6.7.
(b) Segregated Accounts for Pre-Forfeiture Break in Service
Accounts. If a Member re-enters the Plan subsequent to incurring a Forfeiture
Break in Service, the Trustee must maintain separate subaccounts for the
Member's pre-Forfeiture Break in Service Profit Sharing and Matching
Subaccounts, unless the Member is 100% vested in the Member's pre-Forfeiture
Profit Sharing and Matching Subaccounts.
6.10 FORFEITURE OCCURS. A Member's forfeiture, if any, of the
Member's Profit Sharing and Matching Subaccounts occurs under the Plan on the
earlier of:
(a) The last day of the Plan Year in which the Member first
incurs a Forfeiture Break in Service; or
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(b) The last day of the Plan Year in which the entire vested
portion of the Member's Profit Sharing and Matching Subaccounts is distributed
or deemed to be distributed as provided in Section 6.8.
A Member does not forfeit any portion of the Member's Profit Sharing or
Matching Subaccounts for any other reason or cause except as expressly provided
by this Section 6.10 or as provided under Section 17.6.
6.11 AMENDMENT TO VESTING SCHEDULE. Though the Company
reserves the right to amend the vesting schedule at any time, the Committee
will not apply the amended vesting schedule to reduce the nonforfeitable
percentage of any Member's Profit Sharing and Matching Subaccounts as of the
later of the date the Company adopts the amendment, or the date the amendment
becomes effective) to a percentage less than the nonforfeitable percentage
computed under the Plan without regard to the amendment. An amended vesting
schedule will apply to a Member only if the Member receives credit for at least
one Hour of Service after the new schedule becomes effective. If the Company
makes a permissible amendment to the vesting schedule, each Member having at
least three (3) Years of Service with the Employer may elect to have the
percentage of the Member's nonforfeitable Profit Sharing and Matching
Subaccounts computed under the Plan without regard to the amendment. The
Member must file the Member's election with the Administrator within sixty (60)
days of the latest of (a) the Company's adoption of the amendment; (b) the
effective date of the amendment; or (c) the Member's receipt of a copy of the
amendment. The Administrator, as soon as practicable, must forward a true copy
of any amendment to the vesting schedule to each affected Member, together with
an explanation of the effect of the amendment, the appropriate form upon which
the Member may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Member must make an election to remain under the prior vesting schedule. The
election described in this Section 6.11 does not apply to a Member if the
amended vesting schedule provides for vesting at least as rapid at all times as
the vesting schedule in effect prior to the amendment. For purposes of this
Section 6.11, an amendment to the vesting schedule includes any Plan amendment
which directly or indirectly affects the computation of the nonforfeitable
percentage of an Employee's rights to the Member's Profit Sharing and Matching
Subaccounts. Furthermore, the Committee must treat any shift in the vesting
schedule, due to a change in the Plan's top-heavy status, as an amendment to
the vesting schedule for purposes of this Section 6.11.
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ARTICLE VII. PAYMENT OF BENEFITS
7.1 ENTITLEMENT. Upon a Member's Termination of Service,
such Member, or in the event of such Member's death, such Member's Beneficiary,
shall become entitled to such Member's Accrued Benefit. In the event the
Member dies after Termination of Service but prior to payment of such Member's
benefit, such Member's Accrued Benefit shall be paid to such Member's
Beneficiary.
7.2 METHOD OF DISTRIBUTION. Subject to Section 7.3(a),
distribution of a Member's Accrued Benefit shall be made in one single sum from
the Trust Fund.
7.3 BENEFIT COMMENCEMENT. The payment of the Accrued Benefit
to which a Member, or, in the event of the Member's death, such Member's
Beneficiary, is entitled shall be made as soon as practicable after such Member
incurs a Termination of Service; provided, however, in no event shall the
payment be made more than 60 days after the end of the calendar month in which
the Member incurs the later of the Member's Termination of Service or the date
the Administrator receives satisfactory evidence of the Member's death or
Disability, if applicable. Notwithstanding the foregoing, the following
special rules shall apply:
(a) If such Member has not reached age 65 and such Member's
Accrued Benefit is more than $3,500, accelerated distribution may not be made
without such Member's consent. If the Member does not consent to distribution
prior to attaining age 65, then distribution shall be made as soon as
practicable after the close of the Plan Year in which such Member attains age
65, but in no event later than 60 days following the close of such Plan Year.
(b) In no event shall distribution of a Member's Accrued
Benefit be made later than the April 1 next following the calendar year in
which the Member attains age 70 1/2.
7.4 ROLLOVERS.
(a) For purposes of this Article VII and as otherwise used in
this Plan, the following terms shall have the meaning set forth below.
(1) "Distributee" shall mean a Member, former
Employee, the Member's or former Employee's spouse or former
spouse who is the alternate payee under a Qualified Domestic
Relations Order, as defined in section 414(p)(8) of the Code, and
the surviving spouse of a Member or former Employee.
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(2) "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance of the
Distributee's Account, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of 10 years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities pursuant to Section
402(e)(4)).
(3) "Eligible Retirement Plan" shall mean an
Individual Retirement Account described in section 408(a) of the
Code, an Annuity Plan described in section 403(a) of the Code, an
Individual Retirement Annuity described in Section 408(b) (other
than an endowment contract), or a Qualified Trust, described in
section 401(a) of the Code. 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.
(b) Notwithstanding any provision of the Plan to the
contrary, a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan.
(c) The Committee may prescribe reasonable procedures for a
distributee to elect a Direct Rollover pursuant to this Section, and may
require that the Distributee provide such information and documentation as may
be reasonably necessary to accomplish a Direct Rollover. The Administrator
shall not be required to execute a Direct Rollover of a portion of the balance
to the credit of the Distributee if such portion is not equal to at least $500.
The Administrator shall not be required to execute a Direct Rollover with
respect to Eligible Rollover Distributions of a Distributee during a year that
are reasonably expected to total less than $200. Furthermore, the
Administrator shall not be required to divide an Eligible Rollover Distribution
with respect to a Distributee into separate distributions to be paid to two or
more Eligible Retirement Plans in Direct Rollovers.
(d) A Distributee who fails to make an affirmative election
under this Section shall be treated as having not made an election for a Direct
Rollover, provided the Distributee has received a
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written explanation of the Direct Rollover option within a reasonable time
before the Eligible Rollover Distribution. In such event, the Committee shall
make distributions in accordance with the provisions of Article VII.
7.5 MEDIUM OF PAYMENT. Distribution of a Member's Accrued
Benefit shall be made entirely in cash; provided, however, that distribution of
a Member's PAYSOP Subaccount shall be made entirely in whole Shares, with the
value of any fractional interest in Shares paid in cash, unless the Member
elects to receive such amounts in cash, in which case the Shares allocated to
the Member's PAYSOP Subaccount immediately prior to the date of distribution
shall be converted to cash and the amount that the Member shall receive is the
fair market value of the Shares as of the date the Shares are converted to
cash.
7.6 APPLICABLE VALUATION DATE. The Accrued Benefit to be
distributed pursuant to this Article VII, excluding any Shares specifically
allocated to the Member's Account which the Member does not elect to receive in
cash, shall be based upon the value of the Member's Account as of the Valuation
Date immediately following the Member's Termination of Service, adjusted for
contributions to and distributions from the Member's Account after that date
and before the date of distribution. Distributions required in connection with
contributions allocated after the distribution of a Member's Account shall be
made as soon as administratively practicable.
7.7 DISTRIBUTION OF PAYSOP SUBACCOUNT. Notwithstanding any
provision of the Plan to the contrary, in no event shall any distribution of a
Member's PAYSOP Subaccount be made before the end of the 84th month beginning
after the month in which the Shares were originally allocated to the Member's
account, except in accordance with Code Section 409(d).
7.8 LIMITATION ON DISTRIBUTIONS. Notwithstanding any
other provisions of this Plan, any distribution from this Plan shall be
made in accordance with the requirements of Code Section 401(a)(9) and
Regulations promulgated under that Section, and such requirements shall take
precedence over any contrary provisions in this Plan.
ARTICLE VIII. MAXIMUM ACCOUNT ADDITIONS
8.1 APPLICATION. The provisions of this Article VIII shall
govern notwithstanding any other provisions of the Plan.
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8.2 DEFINITIONS. For purposes of this Article and as
otherwise used in this Plan, the following terms shall have the meaning set
forth below.
(a) "Annual Addition" shall mean the following amounts which,
without regard to this Article, are to be credited to the Member's Account for
any Limitation Year: (1) Company contributions, including Before-Tax
Contributions, Matching Contributions and Profit Sharing Contributions and (2)
such other amounts as may be required to be included under the Code Section 415
and the Regulations thereunder. "Annual Addition" shall not include, without
limitation, Rollover Contributions.
(b) "Limitation Year" shall mean the 12-month period
beginning January 1 and ending the next following December 31.
(c) "415 Compensation" shall mean, as to each Employee, the
total compensation from the Company, including overtime and bonuses, which is
paid to an Employee. For purposes of applying the limitations under Code
Section 404(a), 415 and 416, "415 Compensation" shall include: wages,
salaries, fees for professional services and other amounts received for
services actually rendered in the course of employment with the Company
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses) paid during the Limitation Year and shall exclude:
(1)(A) Company contributions to a deferred compensation plan which are not
includable in the Employee's gross income for the taxable year in which
contributed, (B) Company contributions made on behalf of the Employee to a
simplified employee pension plan to the extent such contributions are
deductible from the Employee's gross income, (C) any distribution from a plan
of deferred compensation, regardless of whether such amounts are includable in
the gross income of the Employee when distributed, except however, any amounts
received by an Employee pursuant to an unfunded nonqualified plan to the extent
such amounts are includable in the gross income of the Employee; (2) amounts
realized from the exercise of a nonqualified stock option, or amounts realized
when restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture; (3)
amounts realized from the sale, exchange, or other disposition of stock
acquired under a qualified stock option; and (4) other amounts which receive
special tax benefits, such as premiums for group term life insurance (but only
to the extent that the premiums are not includable in the gross income of the
Employee), or contributions made by the Company (whether or not under a salary
reduction agreement) towards the purchase of any annuity contract described in
Code Section 403(b) (whether or not
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the contributions are excludable from the Employee's gross income); provided,
however, 415 Compensation in excess of $200,000 (as such amount may be adjusted
for inflation from time to time for a Limitation Year under Code Sections
401(a)(17) and 415(d)) in any Limitation Year shall be disregarded.
(d) "Defined Benefit Plan Fraction" shall mean, as to any
Member in any Limitation Year, a fraction (1) the numerator of which is such
Member's projected annual benefit under a defined benefit plan maintained by
the Company and any other defined benefit plan required to be aggregated with
such plan under Code Section 415(f) (determined as of the end of the Limitation
Year), and (2) the denominator of which is the lesser of (A) the product of
1.25 times $90,000 (as adjusted upward from time to time pursuant to Code
Section 415(d)), or (B) the product of 1.4 times 100 percent of such Member's
highest average 415 Compensation for the consecutive Limitation Years during
which such person has been a Member of this Plan or a participant in any other
defined benefit plan sponsored by the Company or for any 3 such consecutive
Limitation Years, whichever period is less.
(e) "Defined Contribution Plan Fraction" shall mean, as to
any Member in any Limitation Year, a fraction (1) the numerator of which is the
sum of all Annual Additions to such Member's Account, and all annual additions
(as defined in Code Section 415(c)(2)) to any account of such Member in any
other defined contribution plan required to be aggregated with this Plan under
Code Section 415(f), as of the close of such Limitation Year, and (2) the
denominator of which is the sum of the lesser of the following amounts
determined for such Limitation Year and for each prior Limitation Year during
which the Member was an Employee: (A) the product of 1.25 times $30,000 (or,
if greater, one-fourth of the $90,000 limit under Code Section 415(b)(1)(A) as
adjusted upward from time to time for a Limitation Year under Code Section
415(d)); or (B) the product of 1.4 times 25 percent of the Member's 415
Compensation for each such Limitation Year.
8.3 GENERAL RULES.
(a) The Annual Addition credited to a Member's Account for
any Limitation Year may not exceed the lesser of (1) $30,000 (or, if greater,
25 percent of the dollar limitation in effect under Section 415(b)(1)(A) of the
Code), or (2) 25 percent of the Member's 415 Compensation for the Limitation
Year.
(b) If a Member is also a participant or was a participant in
one or more defined benefit plans, the sum of such Member's Defined Benefit
Plan Fraction and Defined Contribution Plan Fraction shall not exceed 1.0 for
each Limitation Year.
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(c) For purposes of this Article VIII, all defined
contribution plans maintained by the Company and any Affiliate shall be treated
as one plan and all defined benefit plans maintained by the Company and any
Affiliate shall be treated as one plan, as provided in Code Section 415(f).
8.4 ORDER OF REDUCTION.
(a) Any adjustment required to satisfy the limitations set
forth in Code Section 415 as a result of a Member's participation in another
defined contribution plan or defined benefit plan, shall be made first to this
Plan and then to annual additions under any defined benefit plan maintained by
the Company.
(b) If the Committee determines that the allocation of
contributions, if any, to the Account of a Member will cause the Annual
Addition for that Member to exceed the limitations set forth in Section 8.3 and
that an adjustment under this Plan is required to satisfy Section 8.3, the
excess amounts shall be held unallocated in a suspense account for the
Limitation Year and allocated and reallocated in the next Limitation Year to
all of the Members of the Plan. The excess amounts must be used to reduce
Company contributions for the next Limitation Year (and succeeding Limitation
Years, as necessary) for all of the Members in the Plan. For purposes of this
Section, excess amounts may not be distributed to a Member or former Member.
If the allocation or reallocation of the excess amounts in a later Limitation
Year causes the limitations of Code Section 415 to be exceeded with respect to
each Plan Member for the Limitation Year, then these amounts must be held
unallocated in the suspense account. If the suspense account is in existence
at any time during a particular Limitation Year other than the Limitation Year
described in the preceding sentence, all amounts in the suspense account must
be allocated and reallocated to the Members' Accounts (subject to the
limitations of Code Section 415) before any Company contributions which would
constitute annual additions may be made to the Plan for that Limitation Year.
ARTICLE IX. SPECIAL DISCRIMINATION RULES
9.1 DEFINITIONS. For purposes of this Article and as
otherwise used in this Plan, the following terms shall have the meanings set
forth below.
(a) "Actual Contribution Percentage" or "ACP" shall mean the
ratio (expressed as a percentage) of (1) the sum of the Matching Contributions
made on behalf of a Member for the Plan Year and, to the extent permitted in
Treasury Regulations and elected by the
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Company, the Member's Qualified Elective Deferrals, to (2) the Member's 415
Compensation, as defined in Section 8.2(c), for that period of the Plan Year
for which such person is a Member. The Company, on an annual basis, may elect
to include or not to include Qualified Elective Deferrals in computing the ACP
for a Plan Year. Furthermore, for any Plan Year in which the Plan is a Top
Heavy Plan, the Company may elect on an annual basis to count a Member's
Matching Contributions toward satisfying the required minimum contribution
under Section 12.4(a) (minimum contribution for non-key employees in a
top-heavy plan) in lieu of including such contributions in the ACP.
(b) "Actual Deferral Percentage" or "ADP" shall mean the
ratio (expressed as a percentage) of the sum of Before-Tax Contributions and
Supplemental Matching Contributions made for the Plan Year on behalf of an
Employee eligible to enroll in the Plan pursuant to Article II (excluding any
"Excess $7,000 Deferrals" by a "Non-highly Compensated Employee") to the
Member's 415 Compensation for that period of the Plan Year for which such
person is a Member.
(c) "Average Actual Contribution Percentage" shall mean the
average (expressed as a percentage) of the Actual Contribution Percentages of
the Members in a group. The percentage shall be rounded to the nearest
one-hundredth of one percent.
(d) "Average Actual Deferral Percentage" shall mean the
average (expressed as a percentage) of the Actual Deferral Percentages of such
Employees in a group. The percentage shall be rounded to the nearest
one-hundredth of one percent.
(e) "Combined ADP and ACP Test" shall have the meaning set
forth in Section 9.10.
(f) "Excess $7,000 Deferrals" shall have the meaning set
forth in Section 9.2.
(g) "Excess ACP Contributions" shall have the meaning set
fort in Section 9.8.
(h) "Excess ADP Deferrals" shall have the meaning set forth
in Section 9.5.
(i) "Family Member" shall mean, with respect to any "Highly
Compensated Employee" who was a 5 percent or more owner of the Company or one
of the 10 highest paid Highly Compensated Employees during the current Plan
Year, the Employee's spouse, a lineal ascendant or descendant, or a spouse of a
lineal ascendant or descendant.
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(j) "Highly Compensated Employee" shall mean any Employee
eligible to participate in the Plan pursuant to Article II who, during the
current or prior Plan Year:
(1) was a 5 percent or more owner of the Company;
(2) received 415 Compensation from the Company or an
Affiliate in excess of $75,000 for the Plan Year;
(3) received 415 Compensation from the Company or
an Affiliate in excess of $50,000 for the Plan Year and was among
the "top paid group" (as defined in Code Section 414(q)) of
Employees during the Plan Year; or
(4) was an officer receiving 415 Compensation in
excess of 50 percent of the amount specified in Code
Section 415(b)(1)(A) for the Plan Year. For this purpose no more
than 50 Employees shall be deemed officers.
For purposes of the definition of "Highly Compensated Employee,"
the $50,000 and $75,000 limitations referred to in this Section shall be
adjusted in the same manner as the limitations specified in Code Section
415(b)(1)(A). Finally, the term "Highly Compensated Employee" shall be
determined in accordance with Section 414(q) of the Code and Regulations
thereunder.
(k) "Maximum Combined Percentage" shall have the meaning set
forth in Section 9.10(b).
(l) "Non-highly Compensated Employee" shall mean an Employee
eligible to participate in the Plan pursuant to Article II who is neither a
Highly Compensated Employee nor a Family Member of a Highly Compensated
Employee.
(m) "Qualified Elective Deferrals" shall mean the Before-Tax
Contributions and Supplemental Matching Contributions made on behalf of a
Member and designated by the Committee as Qualified Elective Deferrals, which
satisfy the following requirements:
(1) the aggregate of all Before-Tax Contributions
and Supplemental Matching Contributions for the Plan Year,
including the Qualified Elective Deferrals, must satisfy the
requirements of Section 9.3(a);
(2) the Before-Tax Contributions and Supplemental
Matching Contributions for the Plan Year, excluding the Qualified
Elective deferrals, must satisfy the requirements of Section
9.3(a);
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(3) if the Company elects to aggregate Qualified
Elective Deferrals with Matching Contributions in order to avoid
Excess ACP Contributions, such Qualified Elective Deferrals shall
only be taken into account to the extent necessary to satisfy the
provisions of Section 9.6(a)(2); and,
(4) Qualified Elective Deferrals must satisfy all
other provisions of this Plan applicable to Before-Tax
Contributions and Supplemental Matching Contributions,
respectively, and shall remain part of the Member's Before-Tax
Subaccount and Supplemental Subaccount, respectively.
Nevertheless, except as provided in this Section 9.1(m),
Qualified Elective Deferrals shall be excluded in determining
whether any other contribution or benefit satisfies the
nondiscrimination requirements of Code Section 401(a)(4) and
401(k)(3).
9.2 LIMIT ON BEFORE-TAX CONTRIBUTIONS.
(a) Notwithstanding any other provision of the Plan to the
contrary, the aggregate of a Member's Before-Tax Contributions during a
calendar year may not exceed $7,000 (as adjusted upwards from time to time
pursuant to Code Section 415(d)). Any Before-Tax Contribution in excess of the
foregoing limits ("Excess $7,000 Deferral"), plus any income and minus any loss
allocable thereto, may be distributed to the applicable Member no later than
April 15 following the Plan Year in which the Before-Tax Contributions were
made.
(b) Any Member who has an Excess $7,000 Deferral during a
calendar year may receive a distribution of the Excess $7,000 Deferral plus any
income or minus any loss allocable thereto, provided (1) the Member requests
the distribution of the Excess $7,000 Deferral, (2) the distribution occurs
after the date the Excess $7,000 Deferral arose, and (3) the Committee
designates the distribution as a distribution of an Excess $7,000 Deferral. A
Member shall be deemed to have notified the Committee of the Excess $7,000
Deferral if such Member has Excess $7,000 Deferrals for the Plan Year, taking
into account Excess $7,000 Deferrals under plans maintained by the Company or
any Affiliates.
(c) If a Member makes a Before-Tax Contribution under this
Plan and in the same calendar year makes a contribution to any other Code
Section 401(k) plan containing a cash or deferred arrangement, or a Code
Section 408(k) plan (simplified employee pension plan) or Code Section 403(b)
plan (tax-sheltered annuity) and, after the return of any Excess $7,000
Deferral pursuant to Section 9.2(a) and (b), the aggregate of all such
Before-Tax Contributions and other such contributions exceeds the limitations
contained in Code Section 402(g), then such Member may request that
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the Committee return all or a portion of the Member's Before-Tax Contributions
for the calendar year plus any income and minus any loss allocable thereto.
The amount by which such Before-Tax Contributions and other such contributions
exceed the Code Section 402(g) limitations will also be known as an Excess
$7,000 Deferral. A Member shall be deemed to have notified the Committee of
the Excess $7,000 Deferral if such Member has Excess $7,000 Deferrals for the
Plan Year, taking into account Excess $7,000 Deferrals under plans maintained
by the Company or any Affiliates.
(d) Any request for a return of Excess $7,000 Deferrals
pursuant to Section 9.2(c) must (1) be made in writing, (2) be submitted to the
Committee not later than the March 1 following the Plan Year in which the
Excess $7,000 Deferral arose, (3) specify the amount of the Excess $7,000
Deferral, and (4) contain a statement that if the Excess $7,000 Deferral is not
distributed, it will, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k), or 403(b) of the Code,
exceed the limit imposed on the Member by Section 402(g) of the Code for the
year in which the Excess $7,000 Deferral occurred.
(e) Before-Tax Contributions may only be returned to the
extent necessary to eliminate a Member's Excess $7,000 Deferral. Excess $7,000
Deferrals shall be treated as Annual Additions under Article VIII of the Plan.
In no event shall the returned Excess $7,000 Deferrals for a particular
calendar year exceed the Member's aggregate Before-Tax Contributions for such
calendar year.
(f) The income or loss allocable to a Before-Tax Contribution
that is returned to a Member pursuant to Section 9.2(a) or (c) shall be
determined in the same manner as provided in Section 5.1.
(g) See Section 10.1(c) for circumstances under which a
Member's maximum annual Before-Tax Contribution could be reduced as a result of
such Member's receiving a hardship distribution.
9.3 ADP TEST.
(a) The Average Actual Deferral Percentage for Highly
Compensated Employees for each Plan Year and the Average Actual Deferral
Percentage for Non-highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(1) The Average Actual Deferral Percentage for
Members who are Highly Compensated Employees for the Plan Year
shall not exceed the Average Actual Deferral Percentage for
Members who are Non-highly Compensated Employees for the Plan
Year multiplied by 1.25; or
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(2) The excess of the Average Actual Deferral
Percentage for Members who are Highly Compensated Employees for
the Plan Year over the Average Actual Deferral Percentage for
Members who are Non-highly Compensated Employees for the Plan
Year is not more than 2 percentage points, and the Average Actual
Deferral Percentage for Members who are Highly Compensated
Employees is not more than the Average Actual Deferral Percentage
for Members who are Non-highly Compensated Employees multiplied
by 2.
(b) The permitted disparity between the Average Actual
Deferral Percentage for Highly Compensated Employees and the Average Actual
Deferral Percentage for Non-highly Compensated Employees may be further reduced
as required by Section 9.10.
(c) If at any time during a Plan Year the Committee, as a
result of periodic testing for compliance with the provisions of Section
9.3(a), determines that the Plan may not comply with such provisions as of the
end of such Plan Year, the Committee, in its discretion, may temporarily
suspend a Highly Compensated Employee's Deferral Election for all or a portion
of such remaining Plan Year and shall promptly notify the Member of the
suspension. If at the end of the Plan Year, the Plan does not comply with the
provisions of Section 9.3(a), the Company shall distribute Before-Tax
Contributions to certain Highly Compensated Employees as provided in Section
9.5, except as otherwise provided in the Code or in Treasury Regulations.
9.4 SPECIAL RULES FOR DETERMINING AVERAGE ACTUAL DEFERRAL
PERCENTAGE.
(a) The Actual Deferral Percentage for any Highly Compensated
Employee for the Plan Year who is eligible to have before-tax contributions
allocated to such person's account under 2 or more arrangements described in
Section 401(k) of the Code that are maintained by the Company or an Affiliate
shall be determined as if such before-tax contributions were made under a
single arrangement.
(b) If 2 or more plans maintained by the Company or an
Affiliate are treated as one plan for purposes of the nondiscrimination
requirements of Code Section 401(a)(4) or the coverage requirements of Code
Section 410(b) (other than for purposes of the average benefits test), all
before-tax contributions that are made pursuant to those plans (other than an
employee stock ownership plan within the meaning of Code Section 4975(e)(7))
shall be treated as having been made pursuant to one plan.
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(c) For purposes of determining the ADP of a Highly
Compensated Employee who is either a 5 percent or more owner of the Company or
one of the 10 highest paid Highly Compensated Employees during the Plan Year,
the Before-Tax Contributions and 415 Compensation of such Member shall include
the Before-Tax Contributions and 415 Compensation of such person's Family
Members. Any person who is a Family Member shall not be treated as a separate
Employee in determining the Average Actual Deferral Percentage for either
Non-highly Compensated Employees or for Highly Compensated Employees.
(d) The determination and treatment of Before-Tax
Contributions and the Actual Deferral Percentage of any Member shall be in
accordance with such other requirements as may be prescribed from time to time
in Treasury Regulations.
9.5 DISTRIBUTION OF EXCESS ADP DEFERRALS.
(a) Before-Tax Contributions exceeding the limitations of
Section 9.3(a) ("Excess ADP Deferrals") and any income or loss allocable to
such Excess ADP Deferral shall be designated by the Committee as Excess ADP
Deferrals and shall be distributed to Highly Compensated Employees whose
Accounts were credited with Excess ADP Deferrals in the preceding Plan Year.
In determining the amount of Excess ADP Deferrals for each Highly Compensated
Employee, the Committee shall reduce the ADP for each Highly Compensated
Employee as follows:
(1) The ADP for the Highly Compensated Employee(s)
with the highest ADP will be reduced until equal to the second
highest ADPs under the Plan; then
(2) The ADP for the 2 (or more) Highly Compensated
Employees with the highest ADPs under the Plan will be reduced
until equal to the third highest ADP level under the Plan; then
(3) The steps described in (1) and (2) shall be
repeated with respect to the third and successive highest ADP
levels under the Plan until the Plan complies with one or both of
the ADP tests described in Section 9.3(a).
(b) To the extent administratively possible, the Committee
shall distribute all Excess ADP Deferrals and any income or loss allocable
thereto prior to March 15 following the end of the Plan Year in which the
Excess ADP Deferrals arose. In any event, however, the Excess ADP Deferrals
and any income or loss allocable thereto shall be distributed prior to the end
of the Plan Year following the Plan Year in which the Excess ADP Deferrals
arose.
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Excess ADP Deferrals shall be treated as Annual Additions under Article VIII of
the Plan.
(c) The income or loss allocable to Excess ADP Deferrals
shall be determined in the same manner as provided in Section 5.1.
(d) If an Excess $7,000 Deferral has been distributed to the
Member pursuant to Section 9.2(a) or (b), then any Excess ADP Deferral
allocable to such Member for the same Plan Year shall be reduced by the amount
of such Excess $7,000 Deferral.
(e) Distribution of Excess ADP Deferrals to Members described
in Section 9.4(c) shall be made in accordance with the provisions of Treasury
Regulation Section 1.401(k)-1(f)(4) or any successor Treasury Regulation
thereto.
9.6 ACP TEST.
(a) The Average Actual Contribution Percentage for Highly
Compensated Employees for each Plan Year and the Average Actual Contribution
Percentage for Non-highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(1) The Average Actual Contribution Percentage for
Members who are High Compensated Employees for the Plan Year
shall not exceed the Average Actual Contribution Percentage for
Members who are Non-highly Compensated Employees for the Plan
Year multiplied by 1.25; or
(2) The excess of the Average Actual Contribution
Percentage for Members who are Highly Compensated Employees for
the Plan Year over the Average Actual Contribution Percentage for
Members who are Non-highly Compensated Employees for the Plan
Year is not more than 2 percentage points, and the Average Actual
Contribution Percentage for Members who are Highly Compensated
Employees is not more than the Average Actual Contribution
Percentage for Members who are Non-highly Compensated Employees
multiplied by 2.
(b) If at the end of the Plan Year, the Plan does not comply
with the provisions of Section 9.6(a), the Company may do any or all of the
following, except as otherwise provided in the Code Section or in Treasury
Regulations, in order to comply with such provision:
(1) The Company may aggregate Qualified Elective
Deferrals of Non-highly Compensated Employees with Matching
Contributions of such Members as provided in Section 9.1(a).
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(2) In the case of a Matching Subaccount which
does not comply with Section 9.6(a), the Company may:
(A) Distribute vested Matching Contributions
allocated to the Matching Subaccounts of certain
Highly Compensated Employees as provided in
Section 9.8;
(B) Forfeit nonvested Matching Contributions
allocated to the Matching Subaccounts of certain
Highly Compensated Employees as provided in
Section 9.9.
9.7 SPECIAL RULES FOR DETERMINING AVERAGE ACTUAL CONTRIBUTION
PERCENTAGES.
(a) The Actual Contribution Percentage for any Highly
Compensated Employee for the Plan Year who is eligible to have matching
contributions or before-tax contributions allocated to such person's account
under 2 or more arrangements described in Section 401(a) or 401(k) of the Code
that are maintained by a Company or an Affiliate shall be determined as if such
contributions were made under a single arrangement.
(b) If 2 or more plans maintained by the Company or an
Affiliate are treated as one plan for purposes of the nondiscrimination
requirements of Code Section 401(a)(4) or the coverage requirements of Code
Section 410(b) (other than for purposes of the average benefits test), all
matching contributions that are made pursuant to those plans (other than an
employee stock ownership plan within the meaning of Code Section 4975(e)(7))
shall be treated as having been made pursuant to one plan.
(c) For purposes of determining the Actual Contribution
Percentage of a Highly Compensated Employee who is a 5 percent or more owner of
a Company or one of the 10 highest paid Highly Compensated Employees during the
Plan Year, the Matching Contributions and 415 Compensation of such Member shall
include all Matching contributions and 415 Compensation of Family Members.
Family Members shall not be treated as separate Employees for purposes of
determining the Average Actual Contribution Percentage for either Non-highly
Compensated Employees or for Highly Compensated Employees.
(d) The determination and treatment of Matching Contributions
and the Actual Contribution Percentage of any Member shall be in accordance
with such other requirements as may be prescribed from time to time in Treasury
Regulations.
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9.8 DISTRIBUTION OF EXCESS ACP CONTRIBUTIONS.
(a) Matching Contributions allocated to a Matching Subaccount
which exceed the limitations of Section 9.6(a) ("Excess ACP Contributions") and
any income or loss allocable to such Excess ACP Contribution may be designated
by the Committee as "Excess ACP Contributions" and may be distributed in the
Plan Year following the Plan Year in which the Excess ACP Contributions arose
to those Highly Compensated Employees whose Matching Subaccounts were credited
with Excess ACP Contributions in the preceding Plan Year. The amount of Excess
ACP Contributions to be distributed to a Highly Compensated Employee shall be
determined using the procedure described in Section 9.5(a).
(b) To the extent administratively possible, the Committee
shall distribute all Excess ACP Contributions and any income or loss allocable
thereto prior to March 15 following the end of the Plan Year in which the
Excess ACP Contributions arose. In any event, however, the Excess ACP
Contributions and any income or loss allocable thereto shall be distributed
prior to the end of the Plan Year following the Plan Year in which the Excess
ACP Contributions arose.
(c) Income or loss allocable to Excess ACP Contributions
shall be determined in the same manner that Net Investment Income (Loss) is
allocated as provided in Section 5.1(c).
(d) Amounts distributed to Highly Compensated Employees under
this Section 9.8 shall be treated as Annual Additions under Article VIII with
respect to the Employee who received such amount.
(e) Distribution of Excess ACP Contributions to Members
described in Section 9.7(c) shall be made in accordance with the provisions of
Treasury Regulation Section 1.401(m)(2)(iii) or any successor Treasury
Regulations thereto.
9.9 FORFEITURE OF EXCESS ACP CONTRIBUTIONS.
(a) Excess ACP Contributions and any income or loss allocable
to such Excess ACP Contribution may be forfeited and used to reduce future
Matching Contributions as provided in Section 9.6(b)(3).
(b) The amount of any Excess ACP Contributions to be
forfeited by a particular Highly Compensated Employee shall be determined
pursuant to the procedure described in Section 9.5(a).
(c) The income or loss allocable to Excess ACP Contributions
allocated to a Member's Matching Subaccount shall be determined in
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the same manner that Net Investment Income (Loss) is allocated as provided in
Section 5.1(c).
(d) Members described in Section 9.7(c) shall forfeit their
Excess Contributions in accordance with Treasury Regulation Section
1.401(m)-1(e)(2)(iii) or any successor Treasury Regulation thereto.
(e) Amounts forfeited by Highly Compensated Employees under
this Section shall not be treated as Annual Additions under Article VIII with
respect to the Employee who forfeited such amount.
(f) Notwithstanding anything to the contrary contained
herein, vested Matching Contributions may not be forfeited to correct an Excess
ACP Contribution.
9.10 COMBINED ACP AND ADP TEST.
(a) The Plan must satisfy the "Combined ACP and ADP Test"
described in this Section 9.10 if (1) the Average Actual Deferral Percentage of
the Highly Compensated Employees exceeds 125 percent of the Average Actual
Deferral Percentage of the Non-highly Compensated Employees and (2) the
Average Actual Contribution Percentage of the Highly Compensated Employees
exceeds 125 percent of the Average Actual Contribution Percentage of the
Non-highly Compensated Employees.
(b) The Combined ACP and ADP Test is satisfied if the sum of
the Highly Compensated Employees' Average Actual Deferral Percentage and
Average Actual Contribution Percentage is equal to or less than the "Maximum
Combined Percentage" defined in paragraph (c) below.
(c) The "Maximum Combined Percentage" shall be determined by
adjusting the Non-highly Compensated Employees' Average Actual Deferral
Percentage and Average Actual Contribution Percentage in the following manner:
(1) the greater of the two percentages shall be
multiplied by 1.25, and
(2) the lesser of the two percentages shall be
increased by 2 percentage points; however, in no event shall such
adjusted percentage exceed twice the original percentage.
The sum of (1) and (2) shall be the Maximum Combined Percentage.
(d) In the event the Plan does not satisfy the Combined ADP
and ACP Test, the Highly Compensated Employees' Average Actual Deferral
Percentage shall be decreased by distributing Before-Tax
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Contributions to certain Highly Compensated Employees using the procedures
described in Section 9.5 until the sum of such percentage and the Highly
Compensated Employees' Average Actual Contribution Percentage equals the
Maximum Combined Percentage.
(e) The Highly Compensated Employees' Average Actual
Contribution Percentage shall not be reduced in order to satisfy the Combined
ADP and ACP Test.
(f) In addition to returning Elective Deferrals to certain
Highly Compensated Employees in order to satisfy the Combined ADP and ACP Test,
income or loss allocable to such Before-Tax Contributions shall also be
distributed.
(g) To the extent administratively possible, the Committee
shall distribute the Before-Tax Contributions and allocable income or loss
prior to March 15 following the end of the Plan Year for which the Combined ADP
and ACP Test is computed. In any event, however, such Before-Tax Contributions
and allocable income or loss shall be distributed by the end of the Plan Year
following the Plan Year for which the Combined ADP and ACP Test is computed.
Before-Tax Contributions that are distributed pursuant to this Section 9.10
shall be treated as Annual Additions under Article VIII of the Plan.
(h) This income or loss allocable to returned Before-Tax
Contributions shall be determined using the same procedures described in
Section 9.5(c).
(i) To the extent the provisions of this Section 9.10
conflict with the requirements of Treasury Regulation Section 1.401(m)-2 or any
successor Regulation thereto, the provisions of such Treasury Regulation shall
prevail.
9.11 ORDER OF APPLYING CERTAIN SECTIONS OF ARTICLE.
In applying the provisions of this Article IX, the determination and
distribution of Excess $7,000 Deferrals shall be made first (to the extent
possible) and the determination, elimination of Excess ADP Deferrals shall be
made second, the determination and elimination of Excess ACP Contributions
shall be made third and finally the determination and any necessary adjustment
related to the combined ADP and ACP Test shall be made.
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ARTICLE X. IN-SERVICE WITHDRAWALS
10.1 HARDSHIP WITHDRAWALS.
(a) If a Member incurs a financial hardship, such Member may
withdraw, prior to attaining age 59 1/2, all or a portion of the amount of such
Member's vested: 1) Rollover Subaccount; 2) Before-Tax Subaccount, provided
that the earnings allocated to the Before-Tax Subaccount after December 31,
1988, shall not be distributed under this Section; and 3) all or a portion of
the nonforfeitable Matching and Profit Sharing Subaccounts; provided, however,
in no event may a Member withdraw any amount of such Member's Account which is
pledged as security for a loan pursuant to Section 11.5. In no event shall a
hardship distribution be made from a Member's PAYSOP Subaccount or Supplemental
Subaccount. A Member shall apply for a hardship withdrawal on the form
provided by the Administrator for such purpose, including the effective date of
the withdrawal which must be at least 15 days prior to the date the form is
filed with the Administrator. A request for withdrawal may not be made more
than 4 times during each Plan Year.
(b) For purposes of this Section 10.1, a financial hardship
shall mean an immediate and heavy financial need experienced by reason of (1)
medical expenses, as described in Code Section 213(d), previously incurred by
the Member, such Member's spouse or any of such Member's dependents, as defined
in Code Section 152; (2) purchase of the Member's principal residence (other
than to make mortgage payments, except as provided under Section 10.1(b)(4);
(3) payment of tuition for the next 12 months of post-secondary education for
the Member, such Member's spouse, children or other dependents, as defined in
Code Section 152; (4) preventing the eviction of the Member from such Member's
principal residence or foreclosure on the mortgage on such residence; or (5)
any other such needs identified by the Commissioner of the IRS and announced in
a publication generally applicable to all taxpayers.
(c) A withdrawal distribution based upon financial hardship
cannot exceed the amount required to meet the immediate financial need created
by the hardship, including the amount of any federal, state or local income
taxes or penalties applicable to the amount of the distribution, and not
reasonably available from other resources of the Member. In order to ensure
compliance with the provisions of this Section 10.1 and Code Section 401(k) and
the Regulations thereunder, the Committee may require the Member to satisfy any
or all of the provisions described in subsections (1)-(4) below as a condition
precedent to receiving a hardship distribution:
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(1) Certification by the Member on the form provided
by the Administrator for such purpose that the financial need
cannot be relieved (A) through reimbursement or compensation by
insurance or otherwise; (B) by reasonable liquidation of the
Member's assets; (C) by cessation of Before-Tax Contributions
under the Plan; (D) by other distributions or nontaxable loans
from the Plan or other plans maintained by the Company or any
Affiliate, or any other employer, or by borrowing from commercial
sources on reasonable commercial terms.
(2) Receipt by the Member of all distributions and
nontaxable loans that such Member is eligible to receive under
this Plan and under any other plan maintained by the Company or
an Affiliate.
(3) Automatic suspension of Before-Tax Contributions
beginning on the first payroll period that commences after the
date such Member receives the withdrawal. Before-Tax
Contributions on behalf of such Member may be resumed only after
the expiration of at least 12 months from the effective date of
the suspension and only after the Member files a new Deferral
Election with the Administrator. In addition, the maximum
Before-Tax Contributions under Section 9.2 that can be made on
behalf of a Member for the calendar year following a hardship
distribution shall be reduced by the amount of Before-Tax
Contributions made on behalf of the Member during the calendar
year in which the hardship distribution was made.
(4) Any other condition or method approved by the
IRS.
(d) Upon direction by the Committee, the Trustee shall pay
the amount withdrawn on the effective date specified by the Member. For
purposes of the withdrawal, the Member's Account shall be valued as of the
Valuation Date immediately preceding the effective date of the withdrawal,
adjusted for withdrawals and distributions after such date. Withdrawals shall
reduce the Member's investment in the Investment Funds on a pro rata basis and
shall be charged against a Member's subaccounts in the following sequence: (1)
Rollover Subaccount; (2) Before-Tax Subaccount, but excluding earnings accrued
thereon after December 31, 1988; (3) nonforfeitable portion of the Matching
Subaccount; and (4) nonforfeitable portion of the Profit Sharing Subaccount.
(e) The Committee shall be permitted to rely reasonably upon
the representations of the Member of such Member's financial affairs and shall
not be required to conduct an independent investigation of such
representations. Approval of any withdrawal shall be made in an objective and
nondiscriminatory manner by the
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Committee based only upon a determination that all relevant facts and
circumstances presented by the Member or discovered by the Committee satisfy
the requirements of both Section 10.1(b) and (c). No other method of approving
withdrawals shall be allowed.
10.2 WITHDRAWALS AFTER AGE 59-1/2. After reaching age 59 1/2,
a Member who has been enrolled in the Plan for at least 5 years may withdraw
all or a portion of the amount in such Member's Before-Tax Subaccount. In
addition, a Member who has attained age 59 1/2 but has been enrolled in the
Plan for less than 5 years may withdraw all or a portion of the amount in the
Member's Before-Tax Subaccount that has been deposited in the Trust Fund for at
least 2 years. In no event, however, may a Member withdraw any amount of such
Member's Before-Tax Subaccount which is pledged as security for a loan pursuant
to Section 11.5. Withdrawals may be made pursuant to this Section 10.2 without
regard to the restrictions of Section 10.1, except that a Member must meet the
notice requirements under Section 10.1(a). The withdrawal shall be taken on a
pro rata basis from each Investment Fund in which the Member's Before-Tax
Subaccount is invested.
10.3 WITHDRAWALS FROM ROLLOVER SUBACCOUNT. A Member may
withdraw all or a portion of the amount in such Member's Rollover Subaccount
that has been deposited in the Trust Fund for at least two years. In addition,
a Member who has completed 60 months of participation may withdraw all or a
portion of the amount in such Member's Rollover Subaccount. In no event,
however, may a Member withdraw any amount which is pledged as security for a
loan pursuant to Section 11.5. In order to make such withdrawal, a Member must
meet the notice requirements under Section 10.1(a). The withdrawal shall be
taken on a pro rata basis from each Investment Fund in which the Member's
Rollover Subaccount is invested.
ARTICLE XI. LOANS
11.1 AUTHORITY. The Committee shall have the discretion to
direct the Trustee to loan money to a Member who is an Employee, a Member
who is a former Employee (if such Member is a party in interest, as defined in
Section 3(14) of ERISA, with respect to the Plan), the Beneficiary of a deceased
Member or an alternate payee under a Qualified Domestic Relations Order as
defined in Section 17.5 (hereinafter referred to in this Article XI as the
"Applicant".) Each such loan shall be treated as an investment of the
Applicant's Account.
11.2 LOAN APPLICATION. An Applicant who wishes to borrow
money from the Plan shall file a written loan application with the
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Committee on the form provided by the Committee for such purpose. The
Committee, in the exercise of its sole discretion, shall approve the loan if
the Committee determines that the loan will not constitute a taxable
distribution from the Plan and, if the Applicant is an Employee, such Applicant
has agreed to repay the loan through payroll deduction. In exercising its
discretion to approve or deny loans, the Committee shall make loans to all
Applicants on a reasonably equivalent basis and shall not make loans to Highly
Compensated Employees, officers, or shareholders in an amount greater than the
amount made available to other Applicants.
11.3 CLAIMS PROCEDURE. Loans from the Plan that are denied,
except for the denial of a loan for less than $1,000 under Section 11.4(b),
shall be processed by the Loan Administrator in accordance with the claims
procedure in Section 14.7 of the Plan.
11.4 LOAN LIMITS.
(a) Loans made pursuant to this Article XI shall be limited to
the lesser of: (1) $50,000 reduced by the highest outstanding loan balance
during the one-year period ending on the day before the loan is made, or (2)
one-half of the Applicant's non-forfeitable Accrued Benefit as determined under
Article V as of the Valuation Date immediately preceding the filing of the
Applicant's loan application; provided, however, in no event shall a loan
exceed the value of the Applicant's non-forfeitable Accrued Benefit excluding
the Applicant's PAYSOP Subaccount. For purposes of this Section 11.4, all
loans from all plans of the Company or any Affiliate shall be aggregated. In
addition, the Committee may further limit the amount loaned to any Applicant in
order to maintain a reserve chargeable against the Applicant's Account for
income taxes which would have to be withheld by the Trustee if the loan becomes
a deemed distribution to the Applicant. Any such taxes required to be withheld
by the Trustee (whether or not such reserve has been created) shall be charged
to and reduce the Applicant's Account to the extent possible, and any excess
shall be treated as an administrative expense of the Plan which shall be
reimbursed by such Applicant.
(b) In no event shall a loan be made for less than $1,000.
(c) An Applicant shall not be granted more than one loan per
year, and an Applicant may not borrow from the Plan if such Applicant has
another outstanding loan from the Plan.
11.5 ADEQUATE SECURITY. Loans shall be adequately secured
by the Applicant's Account and supported by the Applicant's collateral
promissory note for the amount of the loan, made payable to the
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Trustee; provided, however, no more than 50 percent of the Applicant's Account,
determined immediately after the origination of the loan, may be pledged as
security for such loan.
11.6 INTEREST RATE. Loans shall bear interest at a rate
determined by the Committee which is commensurate with the interest rate
charged by persons in the business of lending money for loans made under
similar circumstances. In making such determination, the Committee shall
consider rates charged by commercial lenders in the region in which the
Applicant is located for similar loans, such as secured personal loans, car
loans or home equity loans.
11.7 REPAYMENT.
(a) Each loan shall be evidenced by a written note, payable to
the Trustee, providing for level amortization with not less than monthly
payments over a fixed period not to exceed 5 years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is to be used
(determined at the time the loan is made) as a principal residence of the
Applicant shall provide for periodic repayment over a reasonable period of time
that may exceed 5 years. Notwithstanding the foregoing, loans made prior to
January 1, 1987 which are used to acquire, construct, reconstruct or
substantially rehabilitate any dwelling unit which, within a reasonable period
of time is to be used (determined at the time the loan is made) as a principal
residence of the Applicant or a member of such Applicant's family (within the
meaning of Code Section 267(c)(4)) may provide for periodic repayment over a
reasonable period of time that may exceed 5 years. The repayment period for
each loan shall be determined by the Administrator in a uniform and
nondiscriminatory manner.
(b) Loans to an Applicant who is an Employee must be repaid by
payroll deduction. Payroll deductions will continue until the earlier of the
date the loan is repaid or the date the Applicant is entitled to distribution
under the terms of the Plan. If such an Applicant has a Termination of Service
and does not receive a distribution of such Applicant's Account, then the loan
shall be repaid in equal monthly installments for the remaining term of the
loan. If such deductions from an Applicant's paychecks cease for any reason,
then the loan shall be repaid in equal monthly installments for the remaining
term of the loan or until the Applicant begins to receive paychecks in an
amount sufficient to cover the loan. If such an Applicant's paycheck is ever
insufficient to cover the amount of a loan payment, then such Applicant shall
pay the deficiency from outside funds.
(c) If on the date an Applicant's Account becomes payable
pursuant to Article VII of the Plan the Applicant has an
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outstanding loan balance, then an amount equal to such loan amount together
with accrued interest shall be deemed immediately due and payable and if not
paid within 30 days, the unpaid balance of the loan will be reported to the IRS
as a distribution of the Account.
11.8 DEFAULT. An Applicant is not allowed to stop payroll
deductions for repayment of a loan prior to the Applicant's Termination of
Service. An Applicant who is not an Employee or who is no longer making loan
payments sufficient to cover the Applicant's loan payments through payroll
deduction or otherwise shall be in default on a loan if such Applicant fails to
make a loan payment, as determined by the Administrator, before the date the
next following loan payment becomes due and payable, and the entire balance of
the loan shall become immediately due and payable; provided, however that in no
event shall an Applicant's Account be applied to repay the loan until the
Applicant's Account is otherwise payable under the terms of the Plan.
11.9 FORECLOSURE. If the entire balance of an Applicant's
loan becomes immediately due and payable under Section 11.8, the Administrator
shall foreclose, to the extent necessary, on the collateral held as security
for the Applicant's loan as soon as the Applicant's Account becomes payable
under the Plan. The Administrator may, however, delay such foreclosure,
provided the delay
(a) will not cause the Plan to lose any principal or interest, and
(b) the criteria for such delay are applied by the Administrator
to all similar loans on a reasonably equivalent basis.
11.10 WITHDRAWALS. As provided in Sections 10.1, 10.2 and
10.3, no amount held as security for a loan may be withdrawn by an Applicant
from such Applicant's Account while a loan is outstanding, except that such
amounts which otherwise qualify for withdrawal other than on account of
hardship under Sections 10.2 and 10.3 may be withdrawn if immediately applied
to reduce such loan amount.
11.11 LOAN INVESTMENT. All loans under this Article XI shall
be treated as investments of the Trust. Loans shall be charged pro rata
against such Applicant's subaccounts (excluding the PAYSOP Subaccount).
Interest and principal repayment shall be added to such subaccounts as provided
in Section 4.5.
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ARTICLE XII. TOP HEAVY PROVISIONS
12.1 APPLICATION. The provisions of this Article shall
apply to each Plan Year in which the Plan is Top Heavy and shall supersede any
conflicting provision of this Plan.
12.2 DEFINITIONS. For purposes of this Article and as
otherwise used in this Plan, the following terms shall have the meanings set
forth below.
(a) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as determined below:
(1) Each plan of the Company or an Affiliate in
which a Key Employee is a member in the Plan Year containing the
Determination Date or any of the 4 preceding Plan Years, and each
other plan of the Company or an Affiliate which enables any plan
in which a Key Employee participates to meet the requirements of
Code Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required Aggregation
Group. In the case of a Required Aggregation Group, each plan in
the group will be considered Top Heavy if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered Top Heavy if the Required
Aggregation Group is not a Top Heavy Group.
(2) The Company may also include any other plan not
required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole, would continue to
satisfy the provisions of Code Sections 401(a)(4) and 410. Such
group shall be known as a Permissive Aggregation Group. In the
case of a Permissive Aggregation Group, only a plan that is part
of the Required Aggregation Group will be considered Top Heavy if
the Permissive Aggregation Group is a Top Heavy Group. No plan
in the Permissive Aggregation Group will be considered Top Heavy
if the Permissive Aggregation Group is not a Top Heavy Group.
An Aggregation Group shall include any terminated plan of the
Company or an Affiliate if it was maintained within the last 5 years ending on
the Determination Date.
(b) "Determination Date" shall mean the last day of the Plan
Year immediately preceding the Plan Year for which Top Heavy status is
determined.
(c) "Key Employee" shall mean any Employee of the Company or
Beneficiary who, during the Plan Year or the 4 preceding Plan Years
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was (1) an officer receiving 415 Compensation for the Plan Year in excess of 50
percent of the limit described in Code Section 415(b)(1)(A), (2) one of the 10
Employees owning the largest interest in the Company or an Affiliate and
receiving 415 Compensation for the Plan Year equal to or greater than the
dollar limit described in Code Section 415(c)(1)(A), (3) a greater than 5
percent owner of the Company, or (4) a greater than one percent owner of the
Company receiving 415 Compensation for the Plan Year in excess of $150,000, or
the Beneficiary of a Key Employee. The Code Section 415(c)(1)(A) limits
referred to in the preceding sentence shall be the specified dollar limits plus
any increases reflecting the cost of living adjustments specified by the
Secretary of the Treasury.
(d) "415 Compensation" shall have the meaning given such term
in Section 8.2(c) of the Plan.
(e) "Non-key Employee" shall mean any Member who is not a Key
Employee.
(f) "Top Heavy Group" shall mean an Aggregation Group in
which, as of the Determination Date, the sum of the present value of the
cumulative accrued benefits of Key Employees under all defined benefit plans
included in the group and the aggregate of the accounts of Key Employees under
all defined contribution plans included in the group exceeds 60 percent of the
sum of the present value of the cumulative accrued benefits and the aggregate
of the accounts of all Key and Non-key Employees under all plans in the group.
12.3 DETERMINATION OF TOP HEAVY STATUS. The Plan shall be
"Top Heavy" for the Plan Year if, as of the Valuation Date which coincides with
or immediately precedes the Determination Date, the aggregate of the Accounts
of Key Employees under this Plan exceeds 60 percent of the aggregate of the
Accounts of all Key and Non-Key Employees under this Plan; provided, however,
if the Plan is a member of a Required Aggregation Group, the Plan shall be Top
Heavy for the Plan Year if the Required Aggregation Group is a Top Heavy Group,
unless the Plan is also a member of a Permissive Aggregation Group that is not
a Top Heavy Group.
In determining the present value of the cumulative accrued
benefit or the amount of an account for an Employee for purposes of this
Section 12.3 or Section 12.2(f), the following rules shall apply: All
distributions made during the 5-year period ending on the Determination Date
shall be included, as well as any distributions from any plan terminated within
the 5-year period ending on the Determination Date that would have been a
member of the Required Aggregation Group had it not been terminated. In
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addition, for purposes of determining the amount of an account for any
Employee, any unallocated Company contributions or forfeitures attributable to
the Plan Year in which the Determination Date falls shall also be included.
The accrued benefit or account of any Employee who was at one time a Key
Employee but who was not a Key Employee for any of the 5 Plan Years ending on
the Determination Date and any Employee who has not performed services for the
Company or an Affiliate maintaining a plan in the Aggregation Group for the 5
Plan Years ending on the Determination Date, shall be disregarded in
determining Top Heavy status. For the purposes of this subsection, the
rollover subaccount maintained under any plan in the Aggregation Group shall be
included in the value of such Employee's account, except to the extent that the
Rollover Subaccount balance was received in a transaction consummated after
December 31, 1983 which was initiated by the Employee and the amount received
is attributable to a distribution or transfer from the plan of an employer
which is unrelated to the Company or an Affiliate.
Solely for the purpose of determining if the Plan, or any other
plan included in the Required Aggregation Group, is Top Heavy, a Non-key
Employee's accrued benefit in a defined benefit plan shall be determined under
(A) the method, if any, that uniformly applies for accrual purposes under all
plans maintained by the Company and Affiliates, 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 accrual rate of Code Section 411(b)(1)(C).
12.4 MINIMUM CONTRIBUTION. Except as provided below, for any
Plan Year in which the Plan is Top Heavy, the contributions allocated on behalf
of any Non-key Employee who is an Employee on the Determination Date shall not
be less than the lesser of (a) 3 percent of such Non-key Employee's 415
Compensation for such Plan Year, or (b) the largest percentage of Matching,
Profit Sharing, Before-Tax and Supplemental Matching Contributions, as a
percentage of the Key Employee's 415 Compensation for the Plan Year, allocated
on behalf of any Key Employee for such Plan Year. The minimum allocation shall
be made even though, under other Plan provisions, the Non-key Employee would
not otherwise be entitled to receive an allocation, or would have received a
lesser allocation, for the Plan Year because of the Non-key Employee's failure
to complete a Year of Service. In determining whether a Non-key Employee has
received the required minimum allocation, such Non-key Employee's Before-Tax
and Supplemental Matching Contributions and any Matching Contributions used to
satisfy the ACP Test for such Plan Year shall not be taken into account. If a
Non-key Employee participates in this Plan and a defined benefit plan included
in the Required Aggregation Group, the minimum contribution and benefit
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requirements for both plans in a Top Heavy Plan Year may be satisfied by an
allocation of contributions to the Account of each Non-key Employee in the
amount of 5 percent of the Non-key Employee's 415 Compensation for the Plan
Year. No minimum allocation shall be required in this Plan for any Non-key
Employee who participates in this Plan and another defined contribution plan
that provides the minimum allocation and is included with this Plan in a
Required Aggregation Group. For the purpose of determining the appropriate
percentage under Section 12.4(b), all defined contribution plans included in
the Required Aggregation Group shall be treated as one plan.
12.5 LIMITATIONS ON CONTRIBUTIONS. In any Plan Year in
which the Plan would be Top Heavy if "90 percent" were substituted for "60
percent" where it appears in Sections 12.2(f) and 12.3, "1.0" shall be
substituted for "1.25" as the multiplicand of the dollar limitation in
determining the denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction set forth in Section 8.2(d) and (e) of this
Plan. In any Plan Year in which the Plan is Top Heavy but would not be Top
Heavy if "90 percent" were substituted for "60 percent" as provided above,
"1.0" shall be substituted for "1.25" as the multiplicand of the dollar
limitation in determining the denominator of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction set forth in Section 8.2(d) and (e)
of this Plan, unless the minimum allocation and minimum benefit requirements
are satisfied by substituting "4 percent" for "3 percent" and "7.5 percent"
for "5 percent" where such figures appear in Section 12.4(a).
12.6 OTHER PLANS. The Committee shall, to the extent
permitted by the Code and in accordance with the Regulations, apply the
provisions of this Article by taking into account the benefits payable and the
contributions made under any other plans maintained by the Company or any of
its Affiliates which are qualified under Section 401(a) of the Code to prevent
inappropriate omissions or duplication of minimum benefits or contributions.
ARTICLE XIII. DESIGNATION OF BENEFICIARIES
13.1 BENEFICIARY DESIGNATION. Every Member shall file with
the Administrator a written designation of one or more persons as the
Beneficiary who shall be entitled to receive the amount, if any, payable under
the Plan upon such Member's death. A Member may from time to time revoke or
change such Member's Beneficiary designation without the consent of any prior
Beneficiary by filing a new designation with the Administrator.
Notwithstanding the foregoing, no designation of a nonspousal Beneficiary by a
Member shall be given effect unless, in conformity with Section
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417(a)(2)(A) of the Code and the Regulations thereunder, such Member's
Surviving Spouse, if any, had consented in writing to such designation or
expressly consented to all future designations; provided that (a) spousal
consent shall not be required where the spouse cannot be located or on account
of such other circumstances, if any, as are set forth in the Regulations and
(b) spousal consent, if required, must acknowledge the effect of such
designation and be witnessed by a Plan representative or notary public. The
last such designation received by the Administrator shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall
be effective unless received by the Administrator prior to the Member's death,
and in no event shall it be effective as of a date prior to such receipt. All
decisions of the Administrator concerning the effectiveness of any Beneficiary
designation, and the identity of any Beneficiary, shall be final. If a
Beneficiary shall die after the death of the Member and prior to receiving the
distribution that would have been made to such Beneficiary had such
Beneficiary's death not occurred, and no alternate Beneficiary has been
designated, then for the purposes of the Plan the distribution that would have
been received by such Beneficiary shall be made to the Beneficiary's estate.
13.2 FAILURE TO DESIGNATE BENEFICIARY. Subject to Section
13.1, if no Beneficiary designation is in effect at the time of a Member's
death, the payment of the amount, if any, payable under the Plan upon such
Member's death shall be made to the Member's Surviving Spouse, if any, or if
the Member has no Surviving Spouse, to the Member's estate. If the
Administrator is in doubt as to the right of any person to receive such amount,
the Committee may direct the Trustee to retain such amount, without liability
for any interest thereon, until the rights thereto are determined, or the
Committee may direct the Trustee to pay such amount without liability for any
interest thereon, until the rights thereto are determined, or the Committee may
direct the Trustee to pay any such amount into any court of appropriate
jurisdiction, and such payment shall be a complete discharge of the liability
of the Plan and the Trust therefor.
ARTICLE XIV. ADMINISTRATION OF THE PLAN
14.1 POWERS AND DUTIES OF THE COMMITTEE. The Committee
which shall have general responsibility for the administration of the Plan
(including but not limited to complying with reporting and disclosure
requirements, and establishing and maintaining Plan records). In the exercise
of its sole and absolute discretion, the Committee shall interpret the Plan's
provisions and shall determine the eligibility of individuals for benefits.
The Committee shall appoint an Employee to act as Administrator and to perform
such
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duties as designated herein or by the Committee. The Committee shall also
engage such certified public accountants and other advisers and service
providers, who may be accountants, advisers or service providers for the
Company or an Affiliate, as it shall require or may deem advisable for purposes
of the Plan.
The Committee shall have the power to appoint or remove one or
more investment advisers and to delegate to such adviser authority and
discretion to manage (including the power to acquire and dispose of) the assets
for the Plan, provided that (a) each adviser with such authority and discretion
shall be either a bank, an insurance company or a registered investment adviser
under the Investment Advisers Act of 1940, and shall acknowledge in writing
that it is a fiduciary with respect to the Plan and (b) the Committee shall
periodically review the investment performance and methods of each adviser with
such authority and discretion.
14.2 POWERS AND DUTIES OF TRUSTEE. The Trustee shall have
responsibility under the Plan for the management and control of the assets of
the Trust Fund and shall have discretionary responsibility for the investment
and management of such assets, except to the extent that the Plan and Trust
expressly provide that the Trustee is subject to the direction of the Committee
with respect to all or a portion of the Trust Fund or the direction of a Member
with respect to the investment of the Member's Account in accordance with
Section 4.3, in which case the Trustee shall be subject to proper directions of
the Committee or Member which are made in accordance with the terms of the Plan
and are not contrary to ERISA, and except to the extent that the Trustee is
subject to the direction of an investment adviser pursuant to Section 14.10.
14.3 AGENTS; REPORT OF COMMITTEE TO BOARD. The Committee
may arrange for the engagement of such legal counsel, who may be counsel for
the Company or an Affiliate, and make use of such agents and clerical or other
personnel as it shall require or may deem advisable for purposes of the Plan.
The Committee may rely upon the written opinion of such counsel and the
accountants engaged by the Committee, and may delegate to any such agent, or
to any subcommittee or member of the Committee its authority to perform any act
hereunder, including, without limitation, those matters involving the exercise
of discretion, provided that such delegation shall be subject to revocation at
any time at the discretion of the Committee. The Committee shall report to the
Board, or to a committee of the Board designated for that purpose, as
frequently as shall be specified by the Board or such committee, with regard to
the matters for which it is responsible under the Plan.
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14.4 STRUCTURE OF COMMITTEE. The Committee shall consist of
3 or more members, each of whom shall be appointed by, shall remain in office
at the will of, and may be removed with or without cause by the Board. Any
member of the Committee may resign at any time. No member of the Committee
shall be entitled to act on or decide any matter relating solely to such member
or any of such member's rights or benefits under the Plan. In the event that
the Committee is unable to act in any matter by reason of the foregoing
restriction, the Board shall act on such matter. The members of the Committee
shall not receive any special compensation for serving in the capacities as
members of the Committee but shall be reimbursed for any reasonable expenses
incurred in connection therewith. Except as otherwise required by ERISA, no
bond or other security need be required of the Committee or any member thereof
in any jurisdiction. Any member of the Committee, any subcommittee or agent to
whom the Committee delegates any authority, and any other person or group of
persons, may serve in more than one fiduciary capacity (including service both
as a trustee and administrator) with respect to the Plan.
14.5 ADOPTION OF PROCEDURES OF COMMITTEE. The Committee
shall establish its own procedures and the time and place for its meetings, and
provide for the keeping of minutes of all meetings. A majority of the members
of the Committee shall constitute a quorum for the transaction of business at
a meeting of the Committee. Any action of the Committee may be taken upon the
affirmative vote of a majority of the members of the Committee at a meeting.
The Committee may also act without meeting by unanimous written consent.
14.6 INSTRUCTIONS FOR DISBURSEMENTS. All requests or
directions for payment, distribution or disbursement from the Plan shall be
signed by a member of the Committee or such other person or persons as the
Committee may from time to time designate in writing. This person shall cause
to be kept full and accurate accounts of receipts and disbursements of the
Plan, shall cause to be deposited all funds of the Plan to the name and credit
of the Plan in such depositories as may be designated by the Committee, shall
cause to be disbursed the monies and funds of the Plan when so authorized by
the Committee, and shall generally perform such other duties as may be assigned
to such person from time to time by the Committee.
14.7 CLAIMS FOR BENEFITS. All claims for benefits under the
Plan shall be submitted in writing to the Committee. Within a reasonable
period of time the Committee shall decide the claim by majority vote in the
exercise of its sole and absolute discretion. Written notice of the decision
on each such claim shall be furnished within 90 days after receipt of the
claim; provided that,
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if special circumstances require an extension of time for processing the claim,
an additional 90 days from the end of the initial period shall be allowed for
processing the claim, in which event the claimant shall be furnished with a
written notice of the extension prior to the termination of the initial 90-day
period indicating the special circumstance requiring an extension. If the
claim is wholly or partially denied, such written notice shall set forth an
explanation of the specific findings and conclusions on which such denial is
based. A claimant may review all pertinent documents and may request a review
by the Committee of such a decision denying the claim. Such a request shall be
made in writing and filed with the Committee within 60 days after delivery to
said claimant of written notice of said decision. Such written request for
review shall contain all additional information which the claimant wishes the
Committee to consider. The Committee may hold any hearing or conduct any
independent investigation which it deems necessary to render its decision, and
the decision on review shall be made as soon as possible after the Committee's
receipt of the request for review. Written notice of the decision on review
shall be furnished to the claimant within 60 days after receipt by the
Committee of a request for review, unless special circumstances require an
extension of time for processing, in which event an additional 60 days shall be
allowed for review and the claimant shall be so notified in writing. Written
notice of the decision on review shall include specific reasons for such
decision. For all purposes under the Plan, such decisions on claims (where no
review is requested) and decisions on review (where review is requested) shall
be final, binding and conclusive on all interested parties as to participation
and benefit eligibility, the Employee's amount of Compensation and as to any
other matter of fact or interpretation relating to the Plan.
14.8 HOLD HARMLESS. To the maximum extent permitted by law,
no member of the Committee shall be personally liable by reason of any contract
or other instrument executed by such member or on such member's behalf in such
member's capacity as a member of the Committee nor for any mistake of judgment
made in good faith, and the Company shall indemnify and hold harmless, directly
from its own assets (including the proceeds of any insurance policy the
premiums of which are paid from the Company's own assets), each member of the
Committee and each other officer, employee, or director of the Company or an
Affiliate to whom any duty or power relating to the administration or
interpretation of the Plan or to the management and control of the assets of
the Plan may be delegated or allocated, against any cost or expense (including
counsel fees) or liability (including any sum paid in settlement of a claim
with the approval of the Company) arising out of any act or omission to act in
connection with the Plan unless arising out of such person's own fraud or bad
faith.
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14.9 SERVICE OF PROCESS. The Secretary of the Company or
such other person designated by the Board shall be the agent for service of
process under the Plan.
14.10 INVESTMENT ADVISER. If the Committee appoints an
investment adviser pursuant to Section 14.1 with respect to all or a portion
of the Trust Fund, the Trustee shall invest and reinvest such portion of the
Trust Fund only to the extent and in the manner directed by the investment
adviser in writing. In performing its investment duties, the investment
adviser shall have, with respect to such portion of the Trust Fund, all of the
powers of the Trustee provided herein and in the Trust Agreement. If the
Trustee does not receive written instructions from an investment adviser with
respect to such portion of the Trust Fund, the Trustee shall, after providing
notice to the investment adviser, invest such amounts in short-term securities
of the United States or any instrumentality thereof or in one or more
investment companies commonly known as "money market" funds, and with the
consent of the Committee in a common fund maintained by the Trustee for
short-term investments. If the investment adviser resigns, or is removed, or
is no longer a qualified investment adviser as defined in ERISA, the Trustee
shall reassume complete investment responsibility for such portion of the Trust
Fund unless and until a new qualified investment adviser is appointed by the
Committee.
Unless the Trustee participates knowingly in, or knowingly
undertakes to conceal, an act or omission of the investment adviser, knowing
such act or omission to be a breach of the fiduciary responsibility of the
investment adviser with respect to the Plan, the Trustee shall not be liable
for any act or omission of the investment adviser and shall not be under any
obligation to invest or otherwise manage the assets of the Plan that are
subject to the management of the investment adviser and, to the maximum extent
permitted by ERISA, the Trustee shall have no liability or responsibility for
acting or not acting in accordance with, any written direction of the
investment adviser. The Company agrees, to the extent permitted by law, to
indemnify the Trustee and hold it harmless from and against any claim or
liability that may be asserted against it, otherwise than on account of the
Trustee's own negligence or willful misconduct, for reason of the Trustee's
taking or refraining from taking any action in accordance with this Section
14.10.
ARTICLE XV. TRANSFER OF PLAN ASSETS TO SUCCESSOR PLAN
No transfer of the Plan's assets and liabilities to a successor
employee benefit plan (whether by merger or consolidation with such successor
plan or otherwise) shall be made unless (a) the
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Committee authorizes such transfer and (b) each Member would, if either the
Plan or such successor plan then terminated, receive a benefit immediately
after such transfer which (after taking account of any distributions or
payments to them as part of the same transaction) is equal to or greater than
the benefit such Member would have been entitled to receive immediately before
such transfer if the Plan had then been terminated. The Committee may also
request appropriate indemnification (as permitted by law) from the employer or
employers maintaining such successor plan before making such a transfer.
ARTICLE XVI. AMENDMENT OR TERMINATION OF THE PLAN AND TRUST
16.1 RIGHT TO AMEND, SUSPEND OR TERMINATE PLAN.
(a) Subject to the provisions of Section 16.1(c), the Board
reserves the right at any time to amend, suspend or terminate the Plan, any
contributions thereunder, the Trust, or any contract issued by an insurance
carrier forming a part of the Plan, in whole or in part, and for any reason and
without the consent of any Member, Beneficiary, Surviving Spouse or other
eligible survivor. The Plan shall automatically be terminated upon complete
and final discontinuance of contributions thereunder.
(b) The Committee may adopt any ministerial and
nonsubstantive amendment which may be necessary or appropriate to facilitate
the administration, management and interpretation of the Plan or to conform the
Plan thereto, or to qualify or maintain the Plan and the Trust as a plan and
trust meeting the requirements of Sections 401(a), 401(k) and 501(a) of the
Code or any other applicable section of law and the Regulations issued
thereunder, provided said amendment does not have any material effect on the
currently estimated cost to the Company of maintaining the Plan.
(c) No amendment or modification shall be made which would
retroactively (1) reduce, in contravention of section 411(d)(6) of the Code,
any accrued benefits or (2) make it possible for any part of the funds of the
Plan (other than such part as is required to pay taxes, if any, and
administrative expenses as provided in Section 17.12) to be used for or
diverted to any purposes other than for the exclusive benefit of Member and the
Beneficiaries and Surviving Spouses and other eligible survivors under the Plan
prior to the satisfaction of all liabilities with respect thereto.
16.2 RETROACTIVITY. Subject to the provisions of
Section 16.1 (except Section 16.1(c)(1)), any amendment, modification,
suspension or termination of any provisions of the Plan may be made
retroactively if necessary or appropriate to qualify or maintain
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the Plan, the Trust and any contract with an insurance company which may form a
part of the Plan as a plan and trust meeting the requirements of Sections
401(a), 401(k) and 501(a) of the Code or any other applicable section of law
and the Regulations issued thereunder.
16.3 NOTICE. Notice of any amendment, modification,
suspension or termination of the Plan shall be given by the Board or the
Committee, whichever adopts the amendment, to the other and to the Trustee.
16.4 NO FURTHER CONTRIBUTIONS. Upon termination of the Plan
or a complete discontinuance of contributions, the Company shall not make any
further contributions under the Plan, and no amount shall thereafter be payable
under the Plan to or in respect of any Member except as provided in this
Article. To the maximum extent permitted by ERISA, transfers, distributions
or other dispositions of the assets of the Plan as provided in this Article
shall constitute a complete discharge of all liabilities under the Plan. The
Committee shall remain in existence and all of the provisions of the Plan which
in the opinion of the Committee are necessary for the execution of the Plan and
the administration, distribution, transfer or other disposition of the assets
of the Plan in accordance with this Section shall remain in force.
After adjustment for profits and losses of the Trust Fund to such
termination date in the manner described in Article V, each Account of a Member
who has not incurred a Break in Service which contains an Accrued Benefit
(determined without regard to this Section) as of the date of such termination
shall be fully vested as of such date.
Except as may be prohibited by Section 411(a)(11) of the Code and
the Regulations thereunder, upon or after the termination of the Plan, the
Board may terminate the Trust and upon such termination the Trustee shall pay
in a single sum to each Member the full amount credited to such Member's
individual Account. Without limiting the foregoing, any such distributions
may be made in cash, other property, or any combination, as the Committee in
its sole discretion may direct.
All determinations, approvals and notifications referred to above
shall be in form and substance and from a source satisfactory to counsel for
the Plan.
16.5 PARTIAL TERMINATION. In the event that a "partial
termination" (within the meaning of Section 411(d)(3) of the Code) of the Plan
has occurred then (a) the interest of each affected Member in such Member's
Account as to whom such termination
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occurred shall thereupon be nonforfeitable, but shall otherwise be payable as
though such termination has not occurred and (b) the provisions of Sections
16.2, 16.3 and 16.4 which in the opinion of the Committee are necessary for the
execution of the Plan and the allocation and distribution of the assets of the
Plan shall apply; provided, however, that the Board, in its discretion, subject
to any necessary governmental approval, may direct that the amounts held in the
Accounts of such Members as to whom such partial termination occurred be
segregated by the Trustee as a separate plan and applied for the benefit of
such Members in the manner described in Section 16.4 above.
ARTICLE XVII. GENERAL LIMITATIONS AND PROVISIONS
17.1 ALL RISKS ON MEMBERS AND BENEFICIARIES. Each Member
and Beneficiary shall assume all risk in connection with any decrease in the
value of the assets of the Trust Fund and the Members' Accounts. The Company
and the Committee shall not be liable or responsible for any decrease in the
value of the assets of the Trust and the Members' Accounts.
17.2 TRUST FUND IS SOLE SOURCE OF BENEFITS. The Trust Fund
shall be the sole source of benefits under the Plan and, except as otherwise
required by ERISA, the Company and the Committee assume no liability or
responsibility for payment of such benefits, and each Member, Beneficiary or
other person who shall claim the right to any payment under the Plan shall be
entitled to look only to the Trust Fund for such payment and shall not have any
right, claim or demand therefor against the Company, the Committee or any
member thereof, or any employee or director of the Company.
17.3 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained
in the Plan shall give any Employee the right to be retained in the employment
of the Company or any of its subsidiaries or affiliated or associated
corporations or affect the right of any such employer to dismiss any Employee.
The adoption and maintenance of the Plan shall not constitute a contract
between the Company and Employee or consideration for, or an inducement to or
condition of, the employment of any Employee.
17.4 PAYMENT ON BEHALF OF PAYEE. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for such Member's affairs because of illness or accident, or is a minor,
or has died, then any payment due such Member or such Member's estate (unless
a prior claim therefor has been made by a duly appointed legal representative)
may, if the Committee so elects, be paid to such Member's spouse, a child, a
relative, an institution maintaining or having custody of such
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person, or any other person deemed by the Committee to be a proper recipient on
behalf of such person otherwise entitled to payment. Any such payment shall be
a complete discharge of the liability of the Plan and the Trust therefor.
17.5 NONALIENATION. Except insofar as applicable law may
otherwise require or pursuant to a Qualified Domestic Relations Order, as
defined below, no economic interest, expectancy, benefit, payment, claim or
right of any Member or Beneficiary under the Plan and the Trust shall be
subject in any manner to any claims of any creditor of any Member or
Beneficiary, nor to alienation by anticipation, sale, transfer, assignment,
bankruptcy pledge, attachment, charge or encumbrance of any kind. If any
person shall attempt to take any action contrary to this Section, such action
shall be null and void and of no effect, and the Trustee shall disregard such
action and shall not in any manner be bound thereby and shall suffer no
liability on account of its disregard thereof.
For purposes of the Plan, a "Qualified Domestic Relation Order"
means any judgment, decree or order (including approval of a property
settlement agreement) which has been determined by the Committee in accordance
with procedures established under the Plan to constitute a qualified domestic
relations order within the meaning of Section 414(p)(1) of the Code.
17.6 MISSING PAYEE. If the Committee cannot ascertain the
whereabouts of any person to whom a payment is due under the Plan, and if,
after 5 years from the date such payment is due, a notice of such payment due
is mailed to the last known address of such person, as shown on the records of
the Committee or the Company, and within 3 months after such mailing such
person has not made written claim therefor, the Committee, if it so elects,
after receiving advice from counsel to the Plan, may direct that such payment
and all remaining payments otherwise due to such person be canceled on the
records of the Plan and the amount thereof forfeited and applied to reduce the
contributions of the Company and upon such cancellation, the Plan and Trust
shall have no further liability therefor, except that, in the event such person
later notifies the Committee of such person's whereabouts and requests the
payment or payments due to such persons under the Plan, the amounts so applied
shall be paid to such persons as provided herein.
17.7 REQUIRED INFORMATION. Each Member shall file with the
Committee such pertinent information concerning such Member, such Member's
spouse and such Member's Beneficiary, or such other person as the Committee
may specify, and no Member, or Beneficiary, or other person shall have any
rights or be entitled to any benefits
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under the Plan unless such information is filed by or with respect to such
Member.
17.8 SUBJECT TO TRUST AGREEMENT. Any and all rights or
benefits accruing to any persons under the Plan shall be subject to the terms
of the Trust Agreement which the Company shall enter into with the Trustee
providing for the administration of the Trust Fund.
17.9 COMMUNICATIONS TO COMMITTEE. All elections,
designations, requests, notices, instructions and other communications from the
Company, a Member, Beneficiary or other person to the Committee required or
permitted under the Plan shall be in such form as is prescribed from time to
time by the Committee, shall be mailed by first class mail or delivered to such
location as shall be specified by the Committee, and shall be deemed to have
been given and delivered only upon actual receipt thereof by the Committee at
such location.
17.10 TRANSFERS. The Plan and Trust may accept funds
transferred to the Plan or Trust from an employee benefit plan qualified under
Section 401(a) of the Code, except that the Plan and Trust may not accept any
amounts transferred from a defined benefit or money purchase pension plan or
any other defined contribution plan subject to the joint and survivor annuity
requirements of Code Section 401(a)(11) and may not accept, without the
approval of the Committee, any transfer that does not qualify as an elective
transfer under Treasury Regulation Section 1.411(d)-4(A-3(b)), as amended from
time to time. Any amounts so accepted on behalf of a Member shall be held in
such Member's Rollover Subaccount.
17.11 COMMUNICATIONS FROM THE COMPANY OR COMMITTEE. All
notices, statements, reports and other communications from the Company or the
Committee to any Employee, Member, Surviving Spouse, Beneficiary or other
person required or permitted under the Plan shall be deemed to have been duly
given when delivered to, or when mailed by first class mail, postage prepaid
and addressed to, such Employee, Member, Surviving Spouse, Beneficiary or other
person at such address last appearing on the records of the Committee, or when
posted by the Company or the Committee as permitted by law.
17.12 FEES AND EXPENSES. The expenses of administering the
Plan including (a) the fees and expenses of any Employee and of the Trustee
for the performance of their duties under the Trust, (b) the expenses incurred
by the members of the Committee in the performance of their duties under the
Plan (including reasonable compensation for any legal counsel, certified public
accountants and any agents and cost of services rendered in respect of the
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Plan), and (c) all other proper charges and disbursements of the Trustee or the
members of the Committee (including settlements of claims or legal actions
brought against any party, including the Trustee, approved by the Company and
the Committee, after consulting with counsel to the Plan), are to be paid by
the Plan unless paid in full by the Company. In estimating costs under the
Plan, administrative costs may be anticipated. The members of the Committee
shall not receive any special compensation for serving in their capacities as
members of the Committee.
17.13 VOTING AND TENDER OR EXCHANGE RIGHTS. Except as
otherwise required by ERISA, the Code and Regulations, all voting rights of
Shares shall be exercised by the Trustee and the Members or their Beneficiaries
in accordance with the following provisions of this Section:
(a) With respect to all corporate matters submitted to
shareholders, all Shares shall be voted only in accordance with the directions
of the Members as given to the Committee and communicated in turn by the
Committee to the Trustee. Each Member shall be entitled to direct the voting
of only the Shares (including fractional Shares to 1/100th of a Share)
allocated to such Member's Account, and if this subsection applies to Shares
allocated to the Account of a deceased Member, such Member's Beneficiary shall
be entitled to direct the voting with respect to such Shares as if such
Beneficiary were the Member.
(b) If Members are entitled under this Plan to direct the
vote of Shares with respect to a matter, then, before each annual or special
shareholders' meeting of Carolina Freight Corporation at which the matter is to
be voted, the Company shall furnish to each Member a copy of the proxy
solicitation material sent generally to shareholders, together with a form
requesting instructions on how the Shares with respect to which the Member has
voting rights and responsibility (including fractional Shares to 1/100th of a
Share) are to be voted. Upon timely receipt of such instructions, the Trustee
(after combining votes of fractional Shares to give effect to the greatest
extent possible to Members' instructions) shall vote the Shares as instructed.
Neither the Trustee nor the Committee shall make recommendations to Members on
whether to vote or how to vote. If voting instructions of any Member are not
timely received for a particular shareholders' meeting, the Shares for which
the Member is responsible shall not be voted.
(c) With respect to any matter as to which voting
instructions are not required to be solicited from Members under this Plan, the
Trustee shall vote all Shares held in the Trust Fund. Any vote by the Trustee
shall be made in its sole
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discretion, after it determines such action to be in the best interests of the
Members and their Beneficiaries.
(d) The Company shall notify each Member of each tender or
exchange offer for the Shares and utilize its best efforts to distribute or
cause to be distributed to each Member in a timely manner all information
distributed to shareholders of Carolina Freight Corporation in connection with
any such tender or exchange offer. Each Member shall have the right from time
to time with respect to the Shares allocated to such Member's Account
(including fractional Shares to 1/100th of a Share) to instruct the Trustee in
writing as to the manner in which to respond to any tender or exchange offer
which shall be pending or which may be made in the future for all such Shares
or any portion thereof. A Member's instructions shall remain in force until
superseded in writing by the Member. The Trustee shall tender or exchange
whole Shares only as and to the extent so instructed. If the Trustee shall not
receive instructions from a Member regarding any tender or exchange offer for
Shares, the Trustee shall tender or exchange any Shares allocated to such
Member's Account in the same proportion as the tendering of Shares for which
instructions were received.
(e) If Section 17.13(d) applies to Shares allocated to the
Account of a deceased Member, such Member's Beneficiary shall be entitled to
direct the manner in which to respond to any tender or exchange offer as if
such Beneficiary were the Member.
17.14 EXCLUSIVE BENEFIT OF MEMBERS AND BENEFICIARIES. In
no event shall any part of the funds of the Plan be used for or diverted to
any purposes other than for the exclusive benefit of Members and their
Beneficiaries under the Plan except as permitted under Section 403(c) of ERISA.
Upon the transfer by the Company of any money to the Trustee, all interest of
the Company therein shall cease and terminate.
17.15 ADDITIONAL POWERS OF THE COMMITTEE. Notwithstanding
any provision of the Plan to the contrary, the Committee shall have those
additional powers, rights and obligations provided under the Trust Agreement.
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IN WITNESS WHEREOF, the Company has caused this Plan to be
executed this _____ day of ________________, 1993, to be effective as specified
above.
COMPLETE LEASING CONCEPTS, INC.
By:
------------------------------
[Corporate Seal] __________ President
ATTEST:
- -------------------------
__________ Secretary
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