EXHIBIT 10.12
AMGEN RETIREMENT
AND SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2003)
AMGEN RETIREMENT AND SAVINGS PLAN
(As Amended and Restated Effective as of January 1, 2003)
ARTICLE 1. INTRODUCTION AND PLAN HISTORY
The Plan was adopted effective as of April 1, 1985 and was last amended and
restated as of October 23, 2000. The following provisions constitute an
amendment and restatement of the Plan, effective as of January 1, 2003, to
reflect previously adopted amendments and to make other changes required by law.
Certain provisions may be effective at other times, as specified herein. The
Plan is intended to qualify under Sections 401(a) and 401(k) and related
sections of the Code, and under Section 407(d)(3)(A) of ERISA. The Plan is
subject to amendment or termination at any time, including (without limitation)
amendments required to meet regulations and rules issued by the Secretary of the
Treasury or his or her delegate or the Secretary of Labor. Certain capitalized
terms used in the text of the Plan are defined in Article 2 in alphabetical
order.
ARTICLE 2. DEFINITIONS
2.1 "Accounts" means the separate accounts maintained for each Participant
as a part of the Trust Fund. Each Participant's Accounts are credited
with the Participant's Employee Contributions, his or her share of
Company Contributions and Forfeitures and any income, gains, expenses
and losses accruing on amounts previously credited to the Accounts.
2.2 "Affiliated Group" means the Company and any entity related to the
Company under Sections 414(b), (c), (m) or (o) of the Code. In
addition, the term "Affiliated Group" includes any other entity that
the Company has designated in writing as a member of the Affiliated
Group for purposes of the Plan. An entity shall be considered a member
of the Affiliated Group only with respect to periods for which this
designation is in effect or during which the relationship described in
the first sentence of this Section exists. An "Affiliate" is a member
of the Affiliated Group.
2.3 "Aggregate 401(k) Contributions" which is a term used in specifying
certain limitations on Plan contributions, is defined in Section 13.9.
2.4 "Aggregate 401(m) Contributions" which is a term used in specifying
certain limitations on Plan contributions, is defined in Section 14.7.
2.5 "Alternate Payee" means a spouse, former spouse, child or other
dependent of a Participant who is recognized by a domestic relations
order as having a right to receive all or a portion of the
Participant's Plan Benefit.
2.6 "Annual Additions" which is a term used in specifying certain
limitations on Plan contributions, is defined in Section 15.5.
2.7 "Annual Deferral Limit" which is a term used in specifying certain
limitations on Plan contributions, is defined in Section 13.9.
2.8 "Beneficiary" means the person or persons entitled to receive a
Participants Plan Benefit after the Participant's death, as provided in
Section 8.10.
2.9 "Board" means the Board of Directors of the Company, as constituted
from time to time.
2.10 "Break in Service" means any Plan Year during which the Participant
completes less than 501 Hours of Service. Solely for the purpose of
determining whether a Break in Service has occurred, an Employee who is
absent from work by virtue of (a) the Employee's pregnancy, (b) the
birth of the Employee's child, (c) the placement of a child with the
employee by adoption, (d) the caring for any such child for a period of
up to one year immediately following such birth or placement, (e)
Disability, (f) service in the armed forces of the United States during
a period (including a post-discharge period) that entitles the Employee
to reemployment rights guaranteed by law or (g) a leave of absence
taken under the terms of the federal Family Medical Leave Act or
applicable state family and medical leave act, shall be credited with
up to 501 additional Hours of Service. Such additional Hours of Service
in such period of absence shall be based on his or her regular work
schedule immediately prior to such period; provided, however, that such
additional Hours of Service shall be credited during the Plan Year in
which the absence from work begins only if they would prevent a Break
in Service from occurring for that year. In all other cases, the
additional Hours of Service shall be credited during the immediately
following Plan Year.
2.11 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.12 "Company" means Amgen Inc., a Delaware corporation.
2.13 "Company Contributions" means Matching Contributions, Nonelective
Contributions, Qualified Nonelective Contributions and Qualified
Matching Contributions.
2.14 "Company Stock" means shares of common stock issued by the Company.
2.15 "Company Stock Fund" means an Investment Fund primarily invested in
Company Stock.
2.16 "Compensation" is the term generally used under the Plan to describe
the amount with respect to which Plan contributions are made and means
an Eligible Employee's wages, salaries, fees for professional services,
and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course
of employment with any member of the Affiliated Group to the extent
that the amounts are includable in gross income (including, but not
limited to, commissions paid to salespersons, compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums and reimbursements or other expense allowances under a
nonaccountable plan (as described in Treasury Regulation Section
1.62-2(c)), but
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excluding any "goods and services allowance" provided to certain
expatriate staff members. "Compensation" shall be computed without
regard to any election to reduce or defer salary under this Plan or any
cafeteria plan under Section 125 of the Code. "Compensation" shall not
include: (a) any Company Contributions to this Plan or any other
employee benefit plan for or on account of the Employee, except as
otherwise provided in the preceding sentence; (b) the items described
in Treasury Regulation Section 1.415-2(d)(3), which, among other items,
would exclude from compensation amounts realized from the exercise of a
nonqualified stock option (or when restricted stock (or property) held
by an Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture under Section 83 of the
Code) and amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; or (c) amounts in
excess of the Compensation Limitation.
2.17 "Compensation Limitation" means the limitation in effect under Section
401(a)(17) of the Code for the Plan Year.
2.18 "Disability" means that the Participant is determined, under Title II
or XVI of the Social Security Act, to have been disabled prior to his
or her termination of employment. The Participant must submit evidence
of the Social Security Administration's determination of disability to
the Company prior to any Disability distribution of the Participant's
Accounts.
2.19 "Eligible Employee" means an Employee described in Section 3.3.
2.20 "Employee" means an individual who (a) is on the Payroll of a member of
the Affiliated Group or (b) is a "leased employee" with respect to a
member of the Affiliated Group. "Employee" shall not include a
nonresident alien who receives no earned income (within the meaning of
Section 911(b) of the Code) from a member of the Affiliated Group that
constitutes income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code).
The term "leased employee" means any person (other than an employee of
the recipient) who pursuant to an agreement between the recipient and
any other person ("leasing organization") has performed services for
the recipient (or for the recipient and related persons determined in
accordance with section 414(n)(6) of the Internal Revenue Code) on a
substantially full time basis for a period of at least one year, and
such services are performed under primary direction or control by the
recipient. Contributions or benefits provided a leased employee by the
leasing organization which are attributable to services performed for
the recipient employer shall be treated as provided by the recipient
employer. A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase pension
plan providing: (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in section 415(c)(3) of
the Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross
income under section 125, section 402(e)(3), section 402(h)(1)(B) or
section 403(b) of the Code, (2) immediate participation, and (3) full
and immediate vesting; and (ii) leased employees
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do not constitute more than 20 percent of the recipient's nonhighly
compensated work force.
2.21 "Employee Contributions" means Participant Elected Contributions and
Rollover Contributions.
2.22 "ERISA" means the Employee Retirement Income Security Act of 1974 (P.L.
93-406), as amended.
2.23 "Excess Aggregate Contributions" which is a term used in specifying
certain limitations on Plan contributions, is defined in Section 14.7.
2.24 "Excess Contributions" which is a term used in specifying certain
limitations on Plan contributions, is defined in Section 13.9.
2.25 "Excess Deferrals" which is a term used in specifying certain
limitations on Plan contributions, is defined in Section 13.9.
2.26 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
2.27 "Five-Year Break in Service" means five or more consecutive one-year
Breaks in Service.
2.28 "Forfeiture" is defined in Section 7.2.
2.29 "Fund" or "Investment Fund" means a separate fund in which
contributions to the Plan are invested in accordance with Article 6.
2.30 "Hardship Withdrawal" is a partial distribution of a Participant's
Account made while he or she is an Employee and in the limited
circumstances described in Section 11.2.
2.31 "Highly Compensated Employee" is defined in Article 12.
2.32 "Hour of Service" means:
(a) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by a member of the Affiliated
Group for the performance of services;
(b) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by a member of the Affiliated
Group on account of a period of time during which no services
are performed (without regard to whether the employment
relationship between the Employee and the member of the
Affiliated Group has terminated) due to vacation, holiday,
illness, incapacity, disability, layoff, jury duty, military
duty or leave of absence with pay; and
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(c) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment of an amount as back pay (without
regard to mitigation of damages) either awarded or agreed to
by a member of the Affiliated Group.
The foregoing notwithstanding:
(1) No more than 501 Hours of Service shall be credited
to an Employee under Subsection (b) or (c) above on
account of any single continuous period of time
during which no services are performed.
(2) An hour for which an Employee is directly or
indirectly paid or entitled to payment by a member of
the Affiliated Group on account of a period during
which no services are performed shall not constitute
an Hour of Service hereunder if such payment is made
or due under a plan maintained solely for the purpose
of complying with applicable workers' compensation,
unemployment compensation or disability insurance
laws.
(3) Hours of Service shall not be credited for payments
that solely reimburse an Employee for medical or
medically related expenses.
(4) The same Hour of Service shall not be credited to an
Employee both under Subsection (a) or (b) and under
Subsection (c).
(5) The computation period to which Hours of Service
determined under Subsection (b) or (c) are to be
credited shall be determined under applicable federal
law and regulations, including, without limitation,
Department of Labor Regulation Section
2530.200b-2(b), (c) and (d).
The Company shall determine the number of Hours of Service, if
any, to be credited to an Employee under the foregoing rules
in a uniform and nondiscriminatory manner and in accordance
with applicable federal laws and regulations, including,
without limitation, Department of Labor Regulation Section
2530.200b-3.
2.33 "Normal Retirement Age" means the date on which a Participant attains
age 65.
2.34 "Participant" means any person who elects to participate in the Plan as
provided in Article 3.
2.35 "Participating Company" means the Company, and any other member of the
Affiliated Group that the Company has designated in writing as a
Participating Company, as set forth on Appendix A.
2.36 "Payroll" means the system used by an entity to pay those individuals
it regards as its employees for their services and to withhold federal
income and employment taxes from the compensation it pays to such
employees. "Payroll" does not include any system the entity uses to pay
individuals whom it does not regard as its employees and for whom it
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does not actually withhold federal income and employment taxes
(including, but not limited to, individuals it regards as independent
contractors, consultants or employees of temporary employment
agencies).
2.37 "Plan" means the Amgen Retirement and Savings Plan, as amended from
time to time.
2.38 "Plan Benefit" means the Participant's Accounts under the Plan, to the
extent vested.
2.39 "Plan Year" means the calendar year.
2.40 "QDRO" means a qualified domestic relations order (as defined in
Section 414(p) of the Code).
2.41 "Rollover Contribution" means an amount contributed to the Plan by an
Eligible Employee pursuant to Section 4.5.
2.42 "Salary Deferral Agreement" means the agreement between the
Participating Company and an Employee to reduce the Employee's
Compensation as provided for in Article 4.
2.43 "Section 414(s) Compensation" which is a term used in specifying
certain limitations on Plan contributions, is defined in Section 13.9.
2.44 "Section 415 Compensation" which is a term used in specifying certain
limitations on Plan contributions, is defined in Section 15.5.
2.45 "Section 415 Employer Group" which is a term used in specifying certain
limitations on Plan contributions, is defined in Section 15.5.
2.46 "Top-Paid Group" which is used in the definition of the term "Highly
Compensated Employee", is defined in Section 12.4.
2.47 "Trust Agreement" means the trust agreement entered into pursuant to
the Plan by the Company and the Trustee, as amended from time to time.
2.48 "Trustee" means the trustee or trustees appointed by the Company
pursuant to the Plan to hold the assets of the Plan in trust, and any
successor trustee(s) so appointed.
2.49 "Trust Fund" means the trust fund consisting of the assets of the Plan
and maintained by the Trustee pursuant to the Plan and the Trust
Agreement.
2.50 "Valuation Date" means the date on which the assets of the Plan are
valued, determined in accordance with the Trust Agreement.
2.51 "Year of Service" means:
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(a) For purposes of vesting prior to January 1, 2002, each Plan
Year or portion thereof during which an Employee was credited
with at least 1,000 Hours of Service.
(b) For purposes of determining eligibility, the first
"computation period" in which the Employee completes at least
1,000 Hours of Service. An Employee's initial computation
period is the 12-consecutive-month period following the
Employee's employment commencement date. If the Employee does
not complete at least 1,000 Hours of Service during the first
computation period, subsequent computation periods are each
Plan Year, beginning with the Plan Year in which the first
anniversary of the Employee's employment commencement date
falls.
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility to Participate. An individual hired or rehired as an
Employee shall be eligible to become a Participant on the date he or
she becomes an Eligible Employee or on any subsequent date.
3.2 Commencement of Participation. An individual who has satisfied the
requirements for Plan participation and wishes to become a Participant
shall follow the enrollment procedures prescribed by the Company and
shall begin participating in the Plan as soon as administratively
practicable after completion of the enrollment procedures.
3.3 Eligible Employee means an Employee of a Participating Company who is
described in (a) or (b) of this Section 3.3 and is not excluded under
(c) of this Section 3.3. An individual's status as an Eligible Employee
shall be determined by the Company and its determination shall be
conclusive and binding on all persons.
(a) Regular Full-Time Employee. Unless excluded under (c) below,
an individual classified by a Participating Company as a
"regular full-time employee" is an Eligible Employee.
(b) Regular Part-Time Employee. Unless excluded under (c) below,
an individual classified by a Participating Company as a
"regular part-time employee" shall become an Eligible Employee
upon completion of a Year of Service.
(c) Excluded Individuals. An individual shall not be an Eligible
Employee for any period in which he or she is:
(1) Included in a unit of employees covered by a
collective-bargaining agreement that does not provide
that such individual shall be eligible to participate
in the Plan;
(2) Not on the Payroll of a Participating Company, even
though such person may be deemed, for any reason, to
be an employee;
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(3) Subject to an oral or written agreement that provides
that such individual shall not be eligible to
participate in the Plan;
(4) Employed by a non-U.S. subsidiary of the Company;
(5) Classified by a Participating Company as a "leased
employee" (within the meaning of Section 414(n) of
the Code) with respect to such Participating Company
or would be so classified but for the
period-of-service requirement of Code Section
414(n)(2)(B); or
(6) A temporary employee, independent contractor,
consultant, or any other person or entity for whom a
Participating Company does not withhold federal
income and employment taxes from such person's or
entity's compensation.
If, during any period, a Participating Company has not
regarded an individual as an Employee and, for that reason,
has not withheld employment taxes with respect to that
individual, then that individual shall not be an Eligible
Employee for that period, even in the event that the
individual is determined, retroactively, to have been an
Employee during all or any portion of that period.
3.4 Eligibility After Break in Service. An Eligible Employee who has
incurred a Break in Service shall cease to be an Eligible Employee
until he or she has again satisfied the eligibility conditions
described in this Section after such Break in Service.
3.5 Suspension of Membership. A Participant's participation in the Plan
shall be suspended for any period of time during which the Participant:
(a) Neither receives nor is entitled to receive any Compensation,
including (without limitation) any leave of absence without
pay; or
(b) Does not qualify as an Eligible Employee but remains a
Participant.
In accordance with Section 10.8 and 11.4, participation is
also suspended for 12 months if a Participant defaults on a
Plan loan or 6 months if a Participant takes a Hardship
Withdrawal. A Participant shall not make Participant Elected
Contributions or receive any allocation of Company
Contributions with respect to a period of suspended
participation, but a suspended Participant's Accounts shall
remain invested as a part of the Trust Fund and shall continue
to share in the gains, income, losses and expenses of the
Trust Fund.
3.6 Termination of Membership. A Participant's participation in the Plan
shall terminate when his or her entire Plan Benefit has been
distributed or on the date of his or her death, whichever occurs first.
In the case of a Participant who is not entitled to a Plan Benefit,
membership in the Plan shall terminate when the Participant ceases to
be an Employee.
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3.7 Military Service. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code
Section 414(u).
ARTICLE 4. EMPLOYEE CONTRIBUTIONS.
4.1 Participant Elected Contributions. Each Participant whose participation
in the Plan is not suspended may make Participant Elected Contributions
to the Trust Fund pursuant to a Salary Deferral Agreement that
specifies the amount of the contribution. Subject to the limitations
set forth in Section 4.4 and Articles 13-15, the amount of the
Participant Elected Contributions shall be equal to any whole
percentage of his or her Compensation, as the Participant shall elect,
except that this whole percentage shall not exceed 30 percent of his or
her Compensation. Participant Elected Contributions shall be made
through payroll deductions from the Participant's Compensation. If a
Participant elects to make Participant Elected Contributions, the
contributions shall be deemed to be employer contributions to the Plan
for federal income tax purposes and, to the extent permitted, for
purposes of other federal, state and local taxes. A Participant's
election to make Participant Elected Contributions shall constitute an
election to have the Participant's taxable salary or wages from the
Participating Company reduced by the amount of the Participant Elected
Contributions.
Notwithstanding any provision of this Section 4.1 to the contrary, with
respect to any Eligible Employee who is hired or rehired by the Company
on or after January 1, 2004, the Company may establish uniform and
nondiscriminatory procedures pursuant to which a specified percentage
of such Eligible Employee's Compensation is automatically contributed
to the Plan as Participant Elected Contributions, unless such Eligible
Employee affirmatively elects to not to make Participant Elected
Contributions.
4.2 Suspension, Change and Resumption of Participant Elected Contributions.
A Participant may elect to suspend or change the rate of Participant
Elected Contributions and, having elected to suspend Participant
Elected Contributions, may elect to resume them. Any such election
shall be made by following the procedures prescribed by the Company,
which election shall be put into effect at the time prescribed by the
Company's procedures.
4.3 Contributions to the Trustee. The Participating Companies shall forward
all Employee Contributions to the Trustee, for investment in the Trust
Fund, as soon as administratively possible after they were withheld.
Employee Contributions shall be credited to each Participant's Accounts
as provided in Sections 6.3 and 6.4.
4.4 Limits on Participant Elected Contributions. This Section briefly
describes the rules that limit the amount of Participant Elected
Contributions that may be contributed to a Participant's Account for
the Plan Year or calendar year.
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(a) Compensation Limit. A Participant may not make further
Participant Elected Contributions for the Plan Year once his
or her Compensation reaches the Compensation Limitation.
(b) Annual Deferral Limit. As is described in detail in Article
13, a Participant's Participant Elected Contributions,
together with certain other elective deferrals, made during a
calendar year may not exceed the Annual Deferral Limit, as
defined in Section 13.9(b).
(c) Average Deferral Percentage Limit. As is described in detail
in Article 13, Participant Elected Contributions may be
returned to certain Participants who are Highly Compensated
Employees in the event that the average deferral percentage
test is not met for the Plan Year.
(d) Section 415 "Annual Additions" Limit. As is described in
detail in Article 15, if amounts credited to a Participant's
Accounts during the Plan Year, other than earnings and
Rollover Contributions, exceed the Section 415 "Annual
Additions" limit, then Participant Elected Contributions may
be returned to the Participant.
(e) Prospective Limitations. In order to ensure compliance with
the average deferral percentage test and the Annual Additions
limit, at any time during the Plan Year and at its sole
discretion, the Company may require any Participant to
discontinue or reduce the rate of his or her Participant
Elected Contributions. The Company may require the
discontinuance or reduction in the rate of Participant Elected
Contributions even if its actions may prevent a Participant
from making the maximum Participant Elected Contributions
allowed by law.
(f) Nondeductible and Mistaken Contributions. As is described in
detail in Section 5.6(e), Participant Elected Contributions
that are not deductible by the Company or that are made by
mistake are returned to the Company.
4.5 Rollover Contributions. The Plan may receive Rollover Contributions on
behalf of an Eligible Employee if the following conditions are
satisfied:
(a) The contribution is made entirely in the form of U.S. dollars;
and
(b) The Eligible Employee demonstrates to the Company's
satisfaction that the contribution is a qualifying rollover
contribution under Section 402(c)(4), 403(a)(4), 457(e)(16) or
408(d)(3) of the Code.
If an Eligible Employee who is not a Participant makes a Rollover
Contribution, then he or she shall be considered a Participant solely
with respect to his or her Rollover Contribution Account until he or
she becomes a Participant for all purposes pursuant to Article 3.
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A Rollover Contribution shall be paid to the Plan in a lump sum in cash
and shall be credited to the Participant's Rollover Account. The
Participant may direct the investment of his or her Rollover Account by
filing the specified investment election form in accordance with such
rules as may be established by the Company.
4.6 Catch-up Contributions. All Participants who are eligible to make
Participant Elected Contributions under this Plan and who have attained
age 50 before the close of the Plan Year shall be eligible to make
catch-up contributions in accordance with, and subject to the
limitations of, Section 414(v) of the Code. Catch-up contributions
shall be equal to any whole percentage of the Participant's
Compensation, except that this whole percentage shall not exceed 30%
(50% for Plan Years beginning on or after January 1, 2004) of his or
her Compensation. Catch-up contributions shall not be taken into
account for purposes of Matching Contributions under Section 5.1 of the
Plan. Such catch-up contributions shall not be taken into account for
purposes of the provisions of the Plan implementing the required
limitations of Sections 402(g) and 415 of the Code. The Plan shall not
be treated as failing to satisfy the provisions of the Plan
implementing the requirements of Section 401(k)(3), 401(k)(11),
401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the
making of such catch-up contributions.
ARTICLE 5. COMPANY CONTRIBUTIONS.
5.1 Matching Contributions. Subject to the limitations of Section 4.6,
Section 5.6 and Articles 13-15, each Participating Company may, in its
discretion, make Matching Contributions in an amount determined by the
Participating Company. A Matching Contributions formula may limit the
amount of Participant Elected Contributions that are taken into account
for purposes of allocating Matching Contributions or may limit
allocations of Matching Contributions to a specified group of
Participants; provided, however, that the Matching Contribution
formula(s) shall not discriminate in favor of Highly Compensated
Employees. A Matching Contribution shall be paid to the Trustee as soon
as reasonably practicable after the pay period to which it relates and
shall be allocated to the Accounts of Participants as provided in
Section 6.5.
5.2 Nonelective Contributions. Subject to the limitations in Section 5.6
and Articles 13-15, each Participating Company may, in its discretion,
make Nonelective Contributions in an amount determined by the
Participating Company. Such Nonelective Contributions shall be
allocated to each Participant in the ratio that such Participant's
Compensation bears to the Compensation of all Participants. The
Company, in its sole discretion, may determine that the allocation of
part or all of the Nonelective Contribution for a Plan Year shall be
limited to the Nonelective Contribution Accounts of Participants who
remain Eligible Employees on the last day of the relevant Plan Year.
The Company may limit the amount of Compensation that is taken into
account for purposes of allocating Nonelective Contributions, and it
may determine that allocations of Nonelective Contributions shall be
limited to a specified group of Eligible Employees; provided, however,
that the Nonelective Contribution formula(s) shall not discriminate in
favor of Highly Compensated Employees. For purposes of allocating such
Nonelective Contributions for any Plan Year or other allocation period
based on an Employee's Compensation, only
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Compensation attributable to periods in such Plan Year or other
allocation period during which such Employee was an Eligible Employee
shall be taken into account. Nonelective Contributions shall be paid to
the Trustee as soon as reasonably practicable following the close of
the pay period to which it relates and shall be allocated to the
Accounts of Participants as provided in Section 6.6.
Notwithstanding the foregoing and subject to the limitations in Section
5.6 and Articles 13-15, each Participating Company may, in its
discretion, make a special Nonelective Contribution to each Participant
who in his or her initial year of employment with the Participating
Company may not make the maximum Participant Elected Contributions
permitted under the Plan because in the same Plan Year he or she
previously made pre-tax salary deferrals under a prior, unrelated
employer's qualified plan. The amount of the special Nonelective
Contribution shall be determined by the Participating Company. Such
Nonelective Contributions shall be allocated as a percent of each
eligible Participant's Compensation. The special Nonelective
Contribution shall only be made on behalf of Participants that are
Nonhighly Compensated Employees (as defined in Section 12.3).
Nonelective Contributions may include a core contribution equal to a
specified percentage of Compensation to be made by the Company for each
payroll period during the Plan Year.
5.3 Qualified Nonelective Contributions. The Participating Companies may
make Qualified Nonelective Contributions pursuant to Article 13.6.
5.4 Qualified Matching Contributions. The Participating Companies may make
Qualified Matching Contributions in an amount determined by the
Participating Company. The Participating Company may, in its sole
discretion, limit the amount of Participant Elected Contributions that
are taken into account for purposes of allocating Qualified Matching
Contributions, or it may determine that allocations of Qualified
Matching Contributions shall be limited to a specified group of
Eligible Employees; provided, however, that the Qualified Matching
Contribution formula(s) shall not discriminate in favor of Highly
Compensated Employees. Qualified Matching Contributions shall be paid
to the Trustee as soon as reasonably practicable following the date as
of which they are allocated.
5.5 Investment of Company Contributions. The Trustee shall invest the
Company Contributions it receives in accordance with Section 6.2.
5.6 Limits on Company Contributions. This Section briefly describes the
rules that limit the amount of Company Contributions that may be
contributed to a Participant's Account for the Plan Year.
(a) Compensation Limit. A Company Contribution that is expressed
as a percentage of a Participant's Compensation may not be
based on Compensation in excess of the Compensation Limit in
effect for the Plan Year.
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(b) Average Contribution Percentage Limit. As is described in
detail in Article 14, Matching Contributions, Qualified
Matching Contributions or Qualified Nonelective Contributions
may be returned to certain Participants who are Highly
Compensated Employees in the event that the average
contribution percentage test is not met for the Plan Year.
(c) Section 415 "Annual Additions" Limit. As is described in
detail in Article 15, if amounts credited to a Participant's
Accounts during the Plan Year, other than earnings and
Rollover Contributions, exceed the limitation on Annual
Additions, then Company Contributions may be returned to the
Participant.
(d) Prospective Limitations. In order to ensure compliance with
the average contribution percentage test and the Annual
Additions limit, at any time during the Plan Year and at its
sole discretion the Company may reduce or discontinue
allocations of Company Contributions to any Participant's
Account. The Company may implement this reduction or
discontinuance of allocations of Company Contributions even if
its action may prevent a Participant from receiving the
maximum allocations to his or her Account allowed by law.
(e) Nondeductible or Mistaken Contributions. Any other provision
of the Plan notwithstanding, Company Contributions and
Participant Elected Contributions are conditioned upon their
deductibility under Section 404 of the Code and the
qualification of the Plan under Section 401(a) of the Code. If
the deductibility of a Company Contribution or Participant
Elected Contribution is denied, the amount for which a
deduction is disallowed (reduced by any losses incurred with
respect to such amount) shall be returned to the Participating
Companies within one year after the disallowance of the
deduction. If a Company Contribution or Participant Elected
Contribution is made to the Plan by reason of a mistake of
fact, the amount contributed by reason of such mistake
(reduced by any losses incurred with respect to such amount)
shall be returned to the Participating Companies within one
year after the date such contribution was made.
ARTICLE 6. INVESTMENTS AND PARTICIPANTS' ACCOUNTS.
6.1 Investment Funds. All contributions to the Plan made pursuant to
Articles 4 and 5 shall be paid to the Trust Fund established under the
Plan. All such contributions shall be invested as provided under the
terms of the Trust Agreement, which may include provision for the
separation of assets into separate Investment Funds, including a
Company Stock Fund.
6.2 Investment of Contributions. Employee Contributions and Company
Contributions shall be apportioned among one or more of the Investment
Funds as the Participant may specify according to the procedures
prescribed by the Company; provided, however, that a Participant may
direct a maximum of 50 percent of Employee Contributions, Rollover
Contributions and Company Contributions to be invested in the Company
Stock Fund. In the event that a Participant fails to make an investment
election, contributions allocated to
13
his or her Accounts shall be invested in accordance with procedures
prescribed by the Company. A Participant may elect to change the
investment instructions with respect to future contributions according
to the procedures prescribed by the Company.
6.3 Participant Elected Contributions Account. A Participant's Participant
Elected Contribution Account shall consist of his or her Participant
Elected Contributions, adjusted to reflect transfers and withdrawals
from such Participant Elected Contributions Account and earnings,
gains, expenses and losses attributable to the Investment Fund(s) in
which the contributions are invested.
6.4 Rollover Contributions Account. A Participant's Rollover Contributions
Account shall consist of his or her Rollover Contributions, adjusted to
reflect transfers and withdrawals from such Rollover Contributions
Account and earnings, gains, expenses and losses attributable to the
Investment Fund(s) in which the contributions are invested.
6.5 Matching Contributions Account. A Participant's Matching Contributions
Account shall consist of his or her Matching Contributions, adjusted to
reflect transfers and withdrawals from such Matching Contributions
Account and earnings, gains, expenses and losses attributable to the
Investment Fund(s) in which the contributions are invested. Matching
Contributions, determined under Section 5.1, shall be allocated to the
Matching Contributions Account of each Participant who is entitled to a
Matching Contribution pursuant to Section 5.1. Matching Contributions
shall be allocated as of the last day of the period for which the
Participant received Compensation with respect to which the Matching
Contribution is made.
6.6 Nonelective Contributions Account. A Participant's Nonelective
Contributions Account shall consist of his or her Nonelective
Contributions, adjusted to reflect transfers and withdrawals from such
Nonelective Contributions Account and earnings, gains, expenses and
losses attributable to the Investment Fund(s) in which the
contributions are invested. The Nonelective Contribution of a
Participating Company, determined under Section 5.2, shall be allocated
to the Nonelective Contribution Accounts of each Participant who is an
Eligible Employee of the Participating Company on the date as of which
the Nonelective Contribution is allocated. The Nonelective Contribution
of a Participating Company shall be allocated to each Participant
entitled to an allocation of such Nonelective Contribution in the
proportion that such Participant's Compensation, while he or she was an
Eligible Employee, bears to the Compensation of all Participants
entitled to an allocation of the Participating Company's Nonelective
Contribution. Allocations of Nonelective Contributions shall be made as
of each payroll period.
6.7 Qualified Nonelective Contributions Account. A Participant's Qualified
Nonelective Contributions Account shall consist of his or her Qualified
Nonelective Contributions, adjusted to reflect transfers and
withdrawals from such Qualified Nonelective Contributions Account and
earnings, gains, expenses and losses attributable to the Investment
Fund(s) in which the contributions are invested.
14
6.8 Qualified Matching Contributions Account. A Participant's Qualified
Matching Contributions Account shall consist of his or her Qualified
Matching Contributions, adjusted to reflect transfers and withdrawals
from such Qualified Matching Contributions Account and earnings, gains,
expenses and losses attributable to the Investment Fund(s) in which the
contributions are invested.
6.9 Transfers Among Investment Funds. A Participant may elect to
reapportion the values of his or her Accounts among Investment Funds by
properly following procedures prescribed by the Company. The Company's
procedures by which a Participant may elect to transfer amounts into or
out of the Company Stock Fund shall be drafted to provide notice to
Participants if such an election would cause a Participant to have a
purchase or sale of Company Stock which is not exempt from potential
short-swing trading profits liability under Section 16(b) of the
Exchange Act by virtue of the application of Rule 16b-3 (promulgated
under Section 16 of the Exchange Act) as in effect from time to time.
As of the effective date of this amended and restated Plan, such
liability may arise if such election is made by a Participant (or
successor in interest) who is an officer, director, or greater than 10%
stockholder of the Company (within the meaning of Section 16 of the
Exchange Act and the rules promulgated thereunder) within six months
following the date of the most recent election made under any employee
benefit plan sponsored by the Company or an Affiliate if (a) both
elections involved either an intra-plan transfer involving a fund
invested in the Company's equity securities or a cash distribution from
the employee benefit plan to the Participant (or successor in interest)
funded by a volitional disposition of the Company's equity securities,
(b) the prior election involved an acquisition of the Company's equity
securities if the current election involves a disposition of the
Company's equity securities, or vice versa, and (c) both elections are
made at the volition of the Participant (or successor in interest) not
in connection with the Participant's death, disability, retirement,
termination of employment, or an election which is required to be made
available under a provision of the Code. Such a volitional election
(considering without regard as to whether or not any similar elections
have occurred within six months of such an election) shall be described
as a "Discretionary Transaction." On and after July 1, 1996, transfers
into the Company Stock Fund shall be limited so that, after any such
transfer, no more than 50% of the value of the Participant's aggregate
Account is invested in the Company Stock Fund. For purposes of carrying
out Investment Fund transfers, the value of the Accounts shall be
determined as of the Valuation Date immediately preceding the
Participant's transfer election.
6.10 Allocation of Investment Income. As soon as reasonably practicable
after each Valuation Date, and within 90 days after the removal or
resignation of the Trustee, the Trustee shall value the assets of the
Trust Fund on the basis of fair market value as of the Valuation Date
(or the day of resignation or removal of the Trustee if it is not a
Valuation Date). Where separate Investment Funds have been established
pursuant to Section 6.1, the Trustee shall value each such Investment
Fund separately.
6.11 Account Statements. As soon as practicable after the last day of each
Plan Year (and after such other dates as the Company may determine),
there shall be prepared and
15
delivered to each Participant a written statement showing the fair
market value of his or her Accounts as of the applicable date and such
other information as the Company may determine.
ARTICLE 7. VESTING OF PARTICIPANTS' ACCOUNTS.
7.1 100 Percent Vesting. Except for those Participants whose employment
with a member of the Affiliated Group was terminated on or prior to
December 31, 2001, a Participant's interest in all of his or her
Participant Elected Contributions Account, Qualified Matching
Contributions Account, Qualified Nonelective Contributions Account,
Rollover Contributions Account, Matching Contributions Account and
Nonelective Contributions Account shall be 100% vested and
nonforfeitable at all times.
7.2 Forfeitures. If a Participant ceased to be an Employee prior to January
1, 2002, at a time when he or she was not yet fully vested in his or
her Nonelective Contributions Account or Matching Contributions
Account, the unvested amount of his or her Nonelective Contributions
Account and Matching Contributions Account constituted a Forfeiture for
the Plan Year in which employment terminated, provided that the
Participant requested a distribution of the vested amount in his or her
Accounts. Such Forfeitures were applied to reduce Nonelective
Contributions and Matching Contributions for the Plan Year. If such a
Participant is rehired as an Employee prior to incurring a Five-Year
Break in Service, then the amount of the Forfeiture shall be restored,
without earnings, and such Participant shall have a fully vested
interest in the restored amount. If the Participant is rehired after
incurring a Five-Year Break in Service such reemployment shall have no
effect on the prior Forfeiture and such amount shall be permanently
forfeited. To the extent that Forfeitures for the Plan Year in which
the Participant is rehired are insufficient to reinstate the rehired
Participant's Forfeiture, then the appropriate Participating Company
shall make a special contribution in the amount required to reinstate
the Forfeiture.
In the event the Participant's service with the Affiliated Group
terminated prior to January 1, 2002 and no payment of the Participant's
nonforfeitable interest was made, the forfeitable amount of the
Participant's interest shall be permanently forfeited after the
Participant has incurred a Five-Year Break in Service, as of a
Valuation Date determined in a uniform and consistent manner by the
Company. In the event the Participant returns to the service of the
Affiliated Group before incurring a Five-Year Break in Service, the
Participant's Accounts shall become fully vested upon such return to
service.
7.3 Determination of Account Balance. Whenever a Participant or his or her
Beneficiary is entitled to receive the entire amount or a percentage of
his or her Account balance, the amount of such balance (including the
value of any Company Stock held in his or her Account) shall be the
amount in (or value of) such Account as of the Valuation Date
immediately preceding the date of distribution.
7.4 Lost Participant or Beneficiary. In the event that a Beneficiary or
Participant cannot be located at the time a benefit is payable from the
Plan to him or her, then at the close of
16
the 12-consecutive-month period following the date on which the amount
became payable, the amount shall be treated as a Forfeiture. Such a
Forfeiture shall nevertheless be reinstated, without interest, if the
Participant or Beneficiary subsequently is located and makes a valid
claim for the benefit.
ARTICLE 8. DISTRIBUTION OF PLAN BENEFIT.
8.1 General Rule. All distributions under the Plan shall be made in
accordance with Section 401(a)(9) of the Code, including the minimum
distribution incidental death benefit requirement of Code Section
401(a)(9)(G), and Treasury Regulation Sections 1.401(a)(9)-2 through
1.401(a)(9)-9. Such regulations are incorporated in the Plan by
reference and shall supersede any other provision of the Plan to the
contrary.
8.2 Events Permitting Distribution. No distribution may be made of any
amounts credited to a Participant's Accounts except:
(a) After the Participant's death, Disability or termination of
employment for any other reason;
(b) On or after termination of the Plan, provided that (i) neither
the Participating Company nor any Affiliate of the
Participating Company maintains a successor defined
contribution plan (other than an employee stock ownership
plan) and (ii) the Participant's distribution is made in the
form of a lump sum; or
(c) As required by applicable law or in connection with a QDRO, as
provided in Article 9, or an in-service withdrawal, as
provided in Article 11.
8.3 Time of Distribution.
(a) Except as provided in Sections 8.5, 8.7 and 8.8, and unless a
Participant elects otherwise, the distribution of a
Participant's Plan Benefit under Section 8.6 shall occur or
commence not later than sixty (60) days after the close of the
Plan Year in which occurs the later of (i) the Participant's
attainment of Normal Retirement Age or (ii) the Participant's
termination of employment.
(b) A Participant who terminates employment prior to Normal
Retirement Age may elect to receive or commence receipt of his
or her Plan Benefit at any reasonable time after termination
of employment, but in no event later than the Required
Beginning Date (as defined in Section 8.5). If the Participant
terminates employment on or after Normal Retirement Age,
distribution of his or her Plan Benefit shall commence not
later than one (1) year after the end of the Plan Year in
which such termination of employment occurs unless the
Participant elects to defer payment to a future date, but not
later than his or her Required Beginning Date. An election
under this Subsection must be made in writing during the
ninety (90) day period before the date the distribution is to
occur or commence. Such election must not be made before the
Participant receives a notice describing
17
the material features of the Plan, explaining the relative
values of the optional forms of benefit available, and
informing the Participant of his or her right (if applicable)
to defer receipt of his distribution until his Required
Beginning Date, in a manner that satisfies the notice
requirements of Section 417(a)(3) of the Code. Such notice
shall be provided by the Company not less than thirty (30)
days and not more than ninety (90) days before the
Participant's distribution is to occur or commence; provided,
however, such notice may be provided less than thirty (30)
days before distribution is to occur or commence provided that
the Participant is notified that he or she has at least thirty
(30) days to consider the distribution options and the
Participant elects to waive the thirty (30) day period. The
notice shall be furnished in writing or through electronic
medium reasonably accessible to the Participant.
8.4 Amount of Plan Benefit. A Participant's Plan Benefit shall consist of
the Participant's entire interest in his or her Accounts.
8.5 Latest Time of Distribution. In no event shall a Participant's Plan
Benefit be distributed later than his or her "Required Beginning Date,"
which is April 1 of the calendar year following the calendar year in
which occurs the later of (a) the Participant's attainment of age
seventy and one-half (70 1/2), or (b) the Participant's retirement
(within the meaning of Code Section 401(a)(9)); provided, however, if
the Participant is a five percent owner (as defined in Section 416(i)
of the Code) with respect to the Plan Year during which the Participant
attains age 70 1/2, clause (b) shall not apply.
8.6 Forms of Distribution.
(a) A Participant's Plan Benefit shall be distributed in any of
the following forms that he or she elects:
(1) A single sum cash distribution;
(2) A single sum distribution in full shares of Company
Stock (with the value of any fractional share paid in
cash);
(3) A single sum distribution paid in a combination of
cash and full shares of Company Stock; or
(4) Cash installments paid at least annually over a
period certain not exceeding the life expectancy of
the Participant or the joint life expectancy of the
Participant and his or her designated Beneficiary.
All life expectancies shall be determined not later
than the date when payments commence and shall not be
redetermined thereafter. The amount of each
installment payment shall be determined by dividing
the remaining years in the period certain by the
value of the Participant's Account.
18
(b) If, by the time for the distribution of a Participant's Plan
Benefit in accordance with the foregoing provisions of this
Article 8, the Participant has not made any election as to the
form of the distribution, payment of his or her Plan Benefit
shall be made in the form of a single sum cash distribution.
(c) To the extent that a distribution is to be made in a number of
shares of Company Stock that exceeds the number of shares in
the Participant's Account under the Company Stock Fund,
amounts in one or more other Investment Funds comprising the
Participant's Account shall be applied to purchase the
required additional shares of Company Stock at their fair
market value at the time of purchase.
(d) The Company shall establish procedures to notify a Participant
(or successor in interest) if any election regarding the form
or timing of distribution of benefits from the Plan involving
the Company Stock Fund constitutes a Discretionary Transaction
(as defined in Section 6.9) which may trigger short-swing
trading profits liability for the Participant (or successor in
interest) under Section 16(b) of the Exchange Act. In such an
event, the person making the election shall be provided with a
reasonable opportunity to modify, delay, or revoke such an
election.
8.7 Time of Distribution of Death Benefit. If a Participant dies before
commencing his or her Plan Benefit, then the Participant's Beneficiary
shall be entitled to receive the Plan Benefit pursuant to this Section
8.7. (Section 8.10 provides that the surviving spouse of a married
Participant shall be his or her Beneficiary, unless the Participant,
with the spouse's consent, has otherwise elected prior to his or her
death.) The Participant's Plan Benefit shall be distributed to the
Participant's Beneficiary in a lump sum no later than December 31 of
the calendar year following the year of the Participant's death,
subject to the following:
(a) If the Beneficiary is the Participant's surviving spouse, then
such surviving spouse may elect to defer distribution of the
Participant's Plan Benefit until a later date, but in no event
later than the date that the Participant would have attained
age 70-1/2.
(b) If the Beneficiary is a child of the Participant who is under
the age of 18 at the time of the Participant's death, then
such Beneficiary may elect to defer distribution of the
Participant's Plan Benefit until a later date, but in no event
later than the later of the Beneficiary's attainment of age 18
or five (5) years after the Participant's death.
If the Participant dies after commencing benefits but before all
installments have been made, the Participant's remaining Account
balance shall be paid to his or her Beneficiary in a single lump sum as
soon as practicable after the Participant's death; provided, however,
if the Beneficiary is the Participant's surviving spouse, such
surviving spouse
19
may elect to continue to receive installments payable at the same times
and in the same amounts as would have been payable to the Participant.
Notwithstanding any provision of the Plan to the contrary, if a
Participant dies after commencing installments but before his or her
entire Account has been distribution, the remaining portion of such
Account will be distributed at least as rapidly as under the method of
distribution being used on the date of the Participant's death.
8.8 Small Benefits: Lump Sum. Any other provision of this Article
notwithstanding, if the value of a Participant's entire Plan Benefit
equals $5,000 or less (including a Plan Benefit of $0) before the first
payment of the Plan Benefit is made, then the Plan Benefit shall be
paid (or deemed paid if the Plan Benefit is $0) as soon as reasonably
practicable after the Participant's termination of employment to the
Participant (or to his or her Beneficiary in the case of the
Participant's death) in a single lump sum in cash. For purposes of this
section, the value of a Participant's Plan Benefit shall be determined
without regard to that portion of the Participant's Account that is
attributable to Rollover Contributions (and earnings allocable
thereto).
8.9 Direct Rollovers. A "Distributee" who is a Participant, an Alternate
Payee under a QDRO or a Beneficiary who is a deceased Participant's
surviving spouse may elect to have a distribution of a Plan Benefit
paid directly to the Eligible Retirement Plan (defined in Subsection
(a) below) specified by the Distributee in a Direct Rollover, except to
the extent that the distribution is not an Eligible Rollover
Distribution (defined below in Subsection (b)).
(a) Definition of Eligible Retirement Plan. An Eligible Retirement
Plan is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described
in Section 408(b) of the Code, an annuity contract described
in Section 403(b) of the Code, an eligible plan under Section
457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from
this Plan, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. The definition of Eligible Retirement Plan shall
also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the Alternate
Payee under a qualified domestic relations order, as defined
in Section 414(p) of the Code.
(b) Definition of Eligible Rollover Distribution. An Eligible
Rollover Distribution is any distribution of all or any
portion of the balance to the credit of the Distributee,
except that an Eligible Rollover Distribution does not
include: (1) any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's designated beneficiary,
or for a specified period of 10 years or more; (2) any
distribution to the extent the distribution is required under
Section 401(a)(9) of the Code; or (3) any amount that is
distributed on account of hardship
20
shall not be an eligible rollover distribution and the
Distributee may not elect to have any portion of such a
distribution paid directly to an eligible retirement plan. A
distribution shall not fail to be an Eligible Rollover
Distribution merely because a portion of it consists of
after-tax deposits; provided such portion may be rolled over
only to an individual retirement account or annuity described
in Section 408(a) or (b) of the Code, or to a qualified
defined contribution plan described in Section 401(a) or
403(a) of the Code that agrees to separately account for the
amounts so transferred, including separately accounting for
the portion of such distribution that is includible in gross
income and the portion which is not so includible.
8.10 Beneficiary. Subject to Section 8.11, a Participant's Beneficiary shall
be the person(s) so designated by the Participant. If the Participant
has not made an effective designation of a Beneficiary, or if the named
Beneficiary is not living when a distribution is to be made, then (a)
the then-living spouse of the deceased Participant shall be the
Beneficiary or (b) if none, the then-living children of the deceased
Participant shall be the Beneficiaries in equal shares or (c) if none,
the then-living parents of the deceased Participant shall be the
Beneficiaries in equal shares, or (d) if none, the then-living brothers
and/or sisters of the deceased Participant shall be the Beneficiaries
in equal shares, or (e) if none, the estate of the Participant shall be
the Beneficiary. The Participant may change his or her designation of a
Beneficiary from time to time. Any designation of a Beneficiary (or an
amendment or revocation thereof) shall be effective only if it is made
according to the procedures prescribed by the Company and is received
by the Participating Company prior to the Participant's death.
8.11 Spousal Consent Needed to Name a Nonspouse Beneficiary. Any other
provision of the Plan notwithstanding, in the case of a married
Participant, any designation of a person other than his or her spouse
as Beneficiary shall be effective only if the spouse consents in
writing to the designation. The spouse's consent shall be witnessed by
a notary public or, if permitted by the Company, by a representative of
the Plan. A consent to a designation of a particular Beneficiary, once
given by the spouse, shall not be revocable by that spouse. The
designation of a particular Beneficiary may not be changed without
further spousal consent (unless the consent or a prior consent
expressly permits designations by the Participant without any
requirement of further consent by the spouse). The spouse's consent
shall not be required if the Participant establishes to the Company's
satisfaction that the spouse's consent cannot be obtained because the
spouse cannot be located or because of other reasons deemed acceptable
under applicable regulations. The Company may require such evidence of
the right of any person to receive payment under this Section as the
Company may deem advisable. The Company's determination of the right
under this Section of any person to receive payment shall be
conclusive.
8.12 Determination of Marital Status. Whether a Participant is married shall
be determined by the Company as of the date when distribution is to be
made.
21
8.13 Incapacity. If, in the Company's opinion, a Participant or Beneficiary
for any reason is incompetent or becomes unable to handle properly any
property distributable to him or her under the Plan, then the Company
may make any arrangements that it determines to be beneficial to the
Participant or Beneficiary for the distribution of such property on his
or her behalf, including (without limitation) the distribution of such
property to the guardian, conservator, spouse or dependent(s) of the
Participant or Beneficiary.
ARTICLE 9. DISTRIBUTION TO AN ALTERNATE PAYEE UNDER A QDRO; FREEZING PARTICIPANT
ACCOUNTS
9.1 Immediate Distribution.
(a) Any distribution to an Alternate Payee of all or some portion
of a Participant's Accounts pursuant to a qualified domestic
relations order, shall be made as soon as reasonably
practicable after the order is determined to be a QDRO, if:
(1) The QDRO specifies such time of distribution; or
(2) The Alternate Payee has consented in writing to such
time of distribution.
(b) Notwithstanding the foregoing, in determining the award to an
Alternate Payee under a QDRO, the award to the Alternate Payee
shall be derived solely from a portion of the Participant's
vested Accounts in the Plan as of the Valuation Date provided
in the QDRO.
9.2 Alternate Payee Accounts. In all cases where Section 9.1 above is not
applicable, separate "Alternate Payee Accounts" shall be established
for the Alternate Payee at such time as the Company shall determine.
The portion of each of the Participant's Accounts that was assigned or
made payable to the Alternate Payee by the QDRO shall be transferred to
such Alternate Payee Accounts. Unless the QDRO otherwise provides, the
transfers to the Alternate Payee Accounts shall be made pro rata from
the Participant's Accounts. Alternate Payees may change the investment
of their Alternate Payee Accounts pursuant to Section 6.9. Alternate
Payees may not take loans or make withdrawals from their Alternate
Payee Accounts under Articles 10 and 11. Alternate Payees may not make
any contributions to their Alternate Payee Accounts.
9.3 Freezing Participant Accounts. As soon as practicable after the date
the Plan Administrator receives credible information that a qualified
domestic relations order, pursuant to Code Section 414(p) and ERISA
Section 206(d)(3), may be forthcoming, the Plan Administrator shall
freeze the relevant Participant's Accounts for a reasonable period of
time to permit the Participant and/or Alternate Payee to obtain a
domestic relations order. As soon as practicable after the date the
Plan Administrator receives a domestic relations order, the Plan
Administrator shall freeze the relevant Participant's Accounts for a
period of up to 18 months to allow for a determination of whether the
domestic relations order meets the requirements of a qualified domestic
relations order as defined in Code Section 414(p) and ERISA Section
206(d)(3). To the extent that a
22
Participant's Accounts are frozen, no loans, withdrawals or
distributions are permitted from such Accounts.
9.4 Death of Alternate Payee. In all cases, if an Alternate Payee dies
prior to the time that Alternate Payee has received all or any portion
of the benefits assigned to the Alternate Payee by a QDRO, the benefits
shall be paid to the Beneficiary(ies) designated by Alternate Payee on
forms provided by the Plan Administrator for this purpose. If Alternate
Payee has not made an effective designation of Beneficiary or if the
designated Beneficiary is not living when a distribution is to be made,
the entire balance in his or her Alternate Payee Accounts shall be
distributed to his or her estate (unless the QDRO otherwise provides).
9.5 Distributions From Alternate Payee Accounts. Distributions to Alternate
Payees from their Alternate Payee Accounts shall be made as soon as
reasonably practicable after the Plan Administrator's receipt of
completed distribution forms provided by the Plan Administrator for
this purpose.
9.6 Expenses Related to QDRO. The Plan Administrator may elect, on a
uniform and nondiscriminatory basis, to charge any expenses related to
a QDRO to Participant's Accounts.
ARTICLE 10. LOANS.
10.1 Amount of Loan. A Participant may obtain a cash loan from his or her
Accounts if he or she is an Employee who is not on a leave of absence
at the time of the loan and his or her Plan participation is not
suspended pursuant to Section 3.5. The minimum amount of any such loan
shall be $1,000 at the time the loan is elected. No loan shall be
granted under the Plan if such loan, when aggregated with the
Participant's outstanding loans under any other qualified plans
maintained by any member of the Affiliated Group, would exceed the
lesser of:
(a) $50,000, less the amount by which such aggregate balance has
been reduced through repayments during the period of 12 months
ending on the day before the new loan is made; or
(b) One-half of the balances in the Participant's Accounts.
10.2 Terms of Loans. A loan to a Participant shall be made on such terms and
conditions as the Company may determine, provided that the loan shall:
(a) Be evidenced by a promissory note signed by the Participant
and secured by one-half of the value of his or her Accounts,
to the extent vested (regardless of the amount of the loan or
the source of the loan funds);
(b) Effective as of July 1, 2003, bear a rate of interest equal to
the prime rate plus one percentage point as published in the
Wall Street Journal, determined as of the last
23
day of the preceding calendar quarter or such other rate as
may be required by law for a Participant on a leave of absence
due to qualified military service as defined in Code Section
414(u);
(c) Provide for level amortization over its term with payments at
monthly or more frequent intervals, as determined by the
Company;
(d) Provide for loan payments (1) to be withheld whenever possible
through periodic payroll deductions from the Participant's
compensation from any member of the Affiliated Group or (2) to
be paid by check or money order whenever payroll withholding
is not possible. Notwithstanding the foregoing, effective for
loans made on or after January 1, 2004, if a Participant
previously had a deemed distribution of a loan that has not
been repaid and such Participant subsequently obtains a loan
under the Plan, then such Participant must repay the
subsequent loan through payroll deduction;
(e) Provide for repayment in full on or before the earlier of (1)
the date when the Participant severs from all employment with
any member of the Affiliated Group or (2) the date (A) five
years after the loan is made or (B) 20 years after the loan is
made if the loan is used to acquire a dwelling unit which
within a reasonable time is to be used as the Participant's
principal residence. Notwithstanding the foregoing, effective
January 1, 2004, loan repayments may be suspended under the
Plan as permitted under Section 414(u) of the Code and,
effective for loans made on or after January 1, 2004, the term
of a Participant's loan may be extended by the length of the
Participant's leave of absence due to qualified military
service as defined in Code Section 414(u) in accordance with
the requirements of Code Section 72(p) and the regulations
thereunder;
(f) Provide that a Participant may not receive any distribution
from any of his or her Accounts under Article 8 or 11 until
the loan obligation is repaid, except to the extent that all
or any part of such distribution is used to repay the
outstanding balance of the loan; and
(g) Provide that a Participant's Accounts may not be applied to
the satisfaction of the Participant's loan obligations before
the Accounts become distributable under Article 8, unless the
Company determines that the loan obligations are in default
because a periodic payment is more than 90 days past due and
takes such actions as the Company deems necessary or
appropriate to cause the Plan to realize on its security for
the loan. Such actions may include (without limitation) an
involuntary withdrawal from the Participant's Accounts,
whether or not the withdrawal would be permitted under Article
11 on a voluntary basis; provided that an involuntary
withdrawal attributable to Company Contributions made with
respect to Plan Years that ended less than 24 months prior to
the date of the withdrawal (adjusted to reflect any earnings,
appreciation or losses attributable to Company Contributions)
or attributable to Participant Elected Contributions shall be
permitted only to the extent that the hardship requirements of
Code
24
Section 401(k)(2)(B)(I)(IV) and of Sections
1.401(k)-1(d)(2)(ii) and 1.401(k)1(d)(2)(iii)(A) of the
Treasury Regulations are met. The Company may take such other
action as it deems necessary to recover the balance of a loan
secured by the Participant's Accounts. If an involuntary
withdrawal occurs (or would have occurred if permitted under
this Section, the Participant shall not be permitted to obtain
a loan under the Plan thereafter.
10.3 Company Consent. The Company, in its sole discretion, may withhold its
consent to any loan under this Article or may consent only to the
borrowing of a part of the amount requested by the Participant. The
Company shall act upon requests for loans in a uniform and
nondiscriminatory manner, consistent with the requirements of Section
401(a), Section 401(k) and related provisions of the Code.
10.4 Source of Loans. If a Participant requests and is granted a loan, a
Loan Account shall be established for the Participant. The Loan Account
shall be held by the Trustee as part of the Loan Fund. The amount of
the loan shall be transferred to the Participant's Loan Account from
the Participant's other Accounts and shall be disbursed from the Loan
Account. Transfers from the Company Stock Fund shall be made in
accordance with the requirements for exemption under Section 16(b) of
the Exchange Act if such a transfer would cause the Participant to
incur short-swing trading profits liability under Section 16(b) of the
Exchange Act. The promissory note executed by the Participant shall be
held by the Trustee (or by the Company as agent of the Trustee) and the
promissory note shall be treated as an investment of the Participant's
Loan Account.
10.5 Disbursement of Loans. A Participant may request a loan by completing
the loan request procedures prescribed by the Company. A loan shall be
disbursed as soon as reasonably practicable after the date on which the
Company (or its agent) receives the loan request (subject to the
Company's consent).
10.6 Loan Fees. A Participant who obtains a loan under this Article shall be
required to pay such fees as the Company may impose in order to defray
the cost of administering loans from the Plan.
10.7 Valuation Date. For purposes of this Article, the value of a
Participant's Accounts shall be determined as of a Valuation Date
within a reasonable period, not generally to exceed 30 days, on or
after the date on which the Company (or its agent) receives the
prescribed loan request.
10.8 Loan Payments and Defaults. Principal and interest payments on a
Participant's loan shall be credited initially to the Participant's
Loan Account and shall be transferred as soon as reasonably practicable
thereafter to the Participant's other Accounts in the ratio specified
by the Participant under Section 6.2 for the investment of future
contributions. Any loss caused by nonpayment or other default on a
Participant's loan obligations shall be satisfied solely by that
Participant's Accounts. If a Participant defaults on a Plan loan, both
his or her participation and ability to obtain a Plan loan shall be
suspended for 12
25
months. The consequences of suspension from participation in the Plan
are described in Section 3.5.
ARTICLE 11. WITHDRAWALS WHILE EMPLOYED.
11.1 Age 59 1/2 and Disability Withdrawals
(a) A Participant who is an Employee and who has attained age
59 1/2 may withdraw up to the full amount of his or her
Accounts.
(b) A Participant who is an Employee and who is Disabled may
withdraw up to the full amount of his or her Accounts.
11.2 Hardship Withdrawals. A Participant who is an Employee may take a
Hardship Withdrawal of all or any portion of his or her previously
unwithdrawn Employee Contributions and earnings thereon accrued prior
to January 1, 1988. A Hardship Withdrawal may be made only if the
Company determines that it is required on account of one or more of the
following Hardships:
(a) The construction or purchase (excluding mortgage payments) of
a principal residence of the Participant;
(b) The payment of tuition and related educational fees for up to
12 months of post-secondary education for the Participant or
his or her spouse, children or dependents;
(c) The payment of medical expenses described in Section 213(d) of
the Code incurred by the Participant or the Participant's
spouse or dependents, or to obtain medical care giving rise to
such expenses;
(d) The payment of expenses incurred by the Participant for the
funeral of a family member;
(e) The prevention of the eviction of the Participant from his or
her principal residence or foreclosure on a mortgage on the
Participant's principal residence; or
(f) A financial need that has been identified as a deemed
immediate and heavy financial need in a ruling, notice or
other document of general applicability issued under the
authority of the Commissioner of Internal Revenue.
For purposes of this Section, the term "dependent" shall be defined as
set forth in Section 152 of the Code.
11.3 Amount of a Hardship Withdrawal. The maximum amount of a Hardship
Withdrawal is the amount necessary to satisfy the immediate and heavy
financial need caused by the Hardship, including amounts necessary to
pay taxes or penalties that the Company determines may be reasonably
anticipated to result from the Hardship Withdrawal. The
26
determination of the amount of a permitted Hardship Withdrawal is made
by the Company only after the Participant has obtained all withdrawals
and distributions, other than hardship withdrawals, and all nontaxable
loans under all plans maintained by the Affiliated Group.
11.4 Consequences of a Hardship Withdrawal. Plan participation and all
employee before- and after-tax contributions to the Plan and other
qualified and nonqualified deferred compensation plans sponsored by
members of the Affiliated Group shall be suspended for a period of 6
months following a Hardship Withdrawal. The consequences of suspension
from the Plan are described in Section 3.5.
11.5 Valuation Date. For purposes of this Article, the value of a
Participant's Accounts shall be determined as of the Valuation Date
preceding the date on which the withdrawal is to be paid.
11.6 Source of Withdrawals. Withdrawals shall be paid from the affected
Accounts. If more than one Account is available to pay the withdrawal
because the Participant elected to invest in more than one Investment
Fund, the withdrawal shall be made from the subaccount(s) designated by
the Participant, subject to such ordering and timing restrictions as
the Company may adopt. Reasonable costs of processing the withdrawal
shall also be charged to the Participant's Accounts.
11.7 Payment of Withdrawals. A Participant may request a withdrawal by
following the procedures prescribed by the Company. A withdrawal shall
be paid as soon as reasonably practicable after the date on which the
Company receives the prescribed withdrawal request. Withdrawals shall
be paid only in cash.
11.8 Limitations on Withdrawals. A Participant shall not be permitted to
make more than one withdrawal under this Article in any period of six
consecutive months; provided, however, that withdrawals made at the
same time shall be considered a single withdrawal. The timing of
withdrawals from the Company Stock Fund shall be limited when necessary
to avoid liability from the short-swing trading profits provisions of
Section 16(b) of the Exchange Act.
ARTICLE 12. HIGHLY COMPENSATED EMPLOYEE DEFINITION.
12.1 Determining the Highly Compensated Employee Group. An individual is
deemed to be a Highly Compensated Employee for any Plan Year if the
individual is an active Employee who, during the look-back year,
received Section 415 Compensation of more than $80,000 (or such larger
amount as may be adopted by the Commissioner of Internal Revenue to
reflect a cost-of-living adjustment) and was a member of the Top-Paid
Group; or was a five-percent owner at any time during the Plan Year or
the look-back year. The look-back year shall be the 12-month period
immediately preceding the Plan Year. The determination of who is a
Highly Compensated Employee, including the determinations of the number
and identity of Employees in the Top Paid Group and the
27
Section 415 Compensation that is considered, will be made in accordance
with Section 414(q) of the Code and the regulations thereunder.
12.2 "Highly Compensated Former Employee" means a former Employee who
separated from service (or is deemed to have separated) prior to the
determination year, performs no service for any member of the
Affiliated Group during the determination year, and was a Highly
Compensated Employee as an active Employee for either the separation
year or any determination year ending on or after the Employee's 55th
birthday. The determination of who is a Highly Compensated Former
Employee will be made in accordance with Section 414(q) of the Code and
regulations thereunder.
12.3 "Nonhighly Compensated Employee" for any Plan Year means any active
Employee who is not a Highly Compensated Employee.
12.4 "Top-Paid Group" for any Plan Year means the top 20 percent (in terms
of Section 415 Compensation) of all Employees of the Affiliated Group,
where the number that is 20 percent of all Employees of the Affiliated
Group is determined by excluding:
(a) Any Employee covered by a collective bargaining agreement;
(b) Any Employee who is a nonresident alien with respect to the
United States and who receives no income with a source within
the United States from a member of the Affiliated Group;
(c) Any Employee who has not completed six months of service at
the end of the Plan Year;
(d) Any Employee who normally works less than 17 1/2 hours per
week;
(e) Any Employee who normally works no more than six months during
any year; and
(f) Any Employee who has not attained the age of 21 at the end of
the Plan Year.
The Company may elect, in a consistent and uniform manner, to apply one
or more of the age- and service-based exclusions above by substituting
a younger age or shorter period of service, or by not excluding
individuals on the basis of age or service.
ARTICLE 13. CONTRIBUTION LIMITATIONS: ANNUAL DEFERRAL LIMITATIONS AND AVERAGE
DEFERRAL PERCENTAGE LIMITATIONS.
13.1 Return of Excess Deferrals. The aggregate Participant Elected
Contributions of any Participant for any calendar year, together with
his or her elective deferrals under any other plan or arrangement to
which Section 402(g) of the Code applies and that is maintained by a
member of the Affiliated Group, shall not exceed the Annual Deferral
Limit. In the event that the aggregate Participant Elected
Contributions of any Participant for any calendar year, together with
any other elective deferrals (within the meaning of
28
Section 402(g)(3) of the Code) under all plans, contracts or
arrangements of the Affiliated Group and any other employers, exceed
the Annual Deferral Limit, then the Participant may designate all or a
portion of such Excess Deferrals as attributable to this Plan and may
request a refund of such portion by notifying the Company in writing on
or before the March 1 next following the close of such calendar year.
If timely notice is received by the Company, then such portion of the
Excess Deferrals, and any income or loss allocable to such portion,
shall be refunded to the Participant not later than the April 15 next
following the close of such calendar year.
If the Participant fails properly to request a distribution of all such
Excess Deferrals, and such Excess Deferrals are attributable solely to
plans, contracts or arrangements of the Affiliated Group, then the
Company shall be deemed to have notice of such Excess Deferrals and
shall designate one or more plans maintained by a member of the
Affiliated Group from which the refund of Excess Deferrals and
allocable income or loss shall be made no later than April 15 next
following the close of such calendar year.
Any Participant Elected Contributions distributed pursuant to this
Section 13.1 shall not be included in the Participant Elected
Contributions to which a Matching Contribution under Section 5.1 or a
Qualified Matching Contribution under Section 5.4 of the Plan attaches.
13.2 Actual Deferral Percentage Limitation. The Plan shall satisfy the
actual deferral percentage test, as provided in Section 401(k)(3) of
the Code and the regulations issued thereunder. Subject to the special
rules described in Section 13.7, the Aggregate 401(k) Contributions of
Highly Compensated Employees shall not exceed the limits described
below:
(a) An Actual Deferral Percentage shall be determined for each
individual who, at any time during the Plan Year, is a
Participant (including a suspended Participant) or is eligible
to participate in the Plan, which Actual Deferral Percentage
shall be the ratio, computed to the nearest one-hundredth of
one percent, of the individual's Aggregate 401(k)
Contributions for the Plan Year to the individual's Section
414(s) Compensation for the Plan Year;
(b) The Actual Deferral Percentages (including zero percentages)
of Highly Compensated Employees and Nonhighly Compensated
Employees shall be separately averaged to determine each
group's Average Deferral Percentage; and
(c) The Aggregate 401(k) Contributions of Highly Compensated
Employees shall constitute Excess Contributions and shall be
reduced, pursuant to Sections 13.3 and 13.4, to the extent
that the Average Deferral Percentage of Highly Compensated
Employees exceeds the greater of (1) 125 percent of the
Average Deferral Percentage of Nonhighly Compensated Employees
for the preceding Plan Year or (2) the lesser of (A) 200
percent of the Average Deferral Percentage of Nonhighly
Compensated Employees for the preceding Plan Year or (B) the
29
Average Deferral Percentage of Nonhighly Compensated Employees
for the preceding Plan Year plus two percentage points.
13.3 Allocation of Excess Contributions to Highly Compensated Employees. Any
Excess Contributions for a Plan Year shall be allocated to Highly
Compensated Employees by use of a leveling process, whereby the amount
of Aggregate 401(k) Contributions of the Highly Compensated Employee
with the highest amount of Aggregate 401(k) Contributions is reduced to
the extent required to (a) eliminate all Excess Contributions or (b)
cause such Highly Compensated Employee's amount of Aggregate 401(k)
Contributions to equal the amount of Aggregate 401(k) Contributions of
the Highly Compensated Employee with the next highest amount of
Aggregate 401(k) Contributions. The leveling process shall be repeated
until all Excess Contributions for the Plan Year are allocated to
Highly Compensated Employees. Notwithstanding the foregoing, for Plan
Years beginning after December 31, 1996, any determination of Excess
Contributions of a Highly Compensated Employee shall be made on the
basis of the Highly Compensated Employee's actual deferral ratio in
accordance with Code Section 401(k)(8)(C) and the Regulations
promulgated thereunder.
13.4 Distribution of Excess Contributions. Excess Contributions allocated to
Highly Compensated Employees for the Plan Year pursuant to Section
13.3, together with any income or loss allocable to such Excess
Contributions, shall be distributed to such Highly Compensated
Employees not later than two-and-one-half months following the close of
such Plan Year, if possible, and in any event no later than 12 months
following the close of such Plan Year. Any Participant Elected
Contributions distributed pursuant to this Section 13.4 shall not be
included in the Participant Elected Contributions to which a Matching
Contribution under Section 5.1 or a Qualified Matching Contribution
under Section 5.4 of the Plan attaches. Notwithstanding the foregoing,
for Plan Years beginning after December 31, 1996, any distribution of
Excess Contributions for a Plan Year to Highly Compensated Eligible
Employees shall be made on the basis of the dollar amount of
Participant Elected Contributions made by, or on behalf of, each such
Highly Compensated Eligible Employee in accordance with Code Section
401(k)(8)(C).
13.5 Qualified Matching Contributions. The Company, in its sole discretion,
may include all or a portion of the Qualified Matching Contributions
for a Plan Year in Aggregate 401(k) Contributions taken into account in
applying the Average Deferral Percentage limitation described in
Section 13.2 for the Plan Year; provided that such Qualified Matching
Contributions for the Plan Year are fully and immediately vested, may
not be withdrawn while the Participant is an Employee or may be
withdrawn only in circumstances that would permit a Hardship
Withdrawal, and the additional requirements of Treasury Regulation
Section 1.401(k)-1(b)(5) are satisfied.
13.6 Corrective Qualified Nonelective Contributions. In order to satisfy (or
partially satisfy) the Average Deferral Percentage limitation described
in Section 13.2 or the Average Contribution Percentage limitation
described in Section 14.1 (or both of such limitations), the Company,
in its sole discretion, may cause one or more Participating Companies
to make a Qualified Nonelective Contribution to the Plan. Any such
Qualified Nonelective
30
Contribution shall be allocated to the Accounts of those Participants
who are eligible to receive an allocation of Matching Contributions
under Section 5.1 of the Plan or Nonelective Contributions under
Section 5.2, as the Company designates, and who are Nonhighly
Compensated Employees for the Plan Year with respect to which the
Qualified Nonelective Contribution is made, beginning with the
Participant with the lowest Section 414(s) Compensation for the Plan
Year and allocating the maximum amount permissible under Article 15
before allocating any portion of the Qualified Nonelective Contribution
to the Participant with the next lowest Section 414(s) Compensation.
These allocations shall continue until the Plan satisfies the Average
Deferral Percentage limitation described in Section 13.2 or the Average
Contribution Percentage limitation described in Section 14.1 (or both
of such limitations), or until the amount of the Qualified Nonelective
Contribution is exhausted.
The Company, in its sole discretion, may include all or a portion of
the Qualified Nonelective Contributions for a Plan Year in Aggregate
401(k) Contributions taken into account in applying the Average
Deferral Percentage limitation described in Section 13.2 for such Plan
Year, provided that the requirements of Treasury Regulation Section
1.401(k)1-(b)(5) are satisfied.
Qualified Nonelective Contributions shall be paid to the Trustee as
soon as reasonably practicable following the close of the Plan Year,
shall be allocated to the Accounts of Nonhighly Compensated Employees
as of the last day of the Plan Year and shall be fully and immediately
vested. In all other respects, the contribution, allocation, investment
and distribution of Qualified Nonelective Contributions shall be
governed by the provisions of the Plan concerning Matching
Contributions.
13.7 Special Rules. The following special rules shall apply for purposes of
this Article 13:
(a) The amount of Excess Deferrals to be distributed to a
Participant for a calendar year pursuant to Section 13.1 shall
be reduced by the amount of any Excess Contributions
previously distributed to such Participant for the Plan Year
beginning within such calendar year;
(b) The amount of Excess Contributions to be distributed to a
Participant for a Plan Year pursuant to Section 13.4 shall be
reduced by the amount of any Excess Deferrals previously
distributed to such Participant for the calendar year ending
within such Plan Year;
(c) For purposes of applying the limitation described in Section
13.2, the Actual Deferral Percentage of any Highly Compensated
Employee who is eligible to make Participant Elected
Contributions and to make elective deferrals (within the
meaning of Section 402(g)(3) of the Code) under any other
plans, contracts or arrangements of the Affiliated Group shall
be determined as if all such Participant Elected Contributions
and elective deferrals were made under a single arrangement;
provided, however, that plans, contracts and arrangements
shall not
31
be treated as a single arrangement to the extent that Treasury
Regulation Section 1.401(k)1-(b)(3)(ii)(B) prohibits
aggregation;
(d) In the event that this Plan is aggregated with one or more
other plans in order to satisfy the requirements of Code
Section 401(a)(4), 401(k) or 410(b), then all such aggregated
plans, including the Plan, shall be treated as a single plan
for all purposes under all such Code sections (except for
purposes of the average benefit percentage provisions of Code
Section 410(b)(2)(A)(ii));
(e) In the event that the mandatory disaggregation rules of
Treasury Regulation Section 1.401(k)-1(b)(3)(ii)(B) apply to
the Plan, or to the Plan and other plans with which it is
aggregated as described in Subsection (d) above, then the
limitation described in Section 13.2 shall be applied as if
each mandatorily disaggregated portion of the Plan (or
aggregated plans) were a single arrangement; and
(f) Income (and loss) allocable to Excess Contributions for the
Plan Year shall be determined pursuant to the provisions for
allocating income (and loss) to a Participant's Accounts under
Section 6.10 of the Plan. Notwithstanding the foregoing, such
income and loss shall be calculated including the period
between the end of the Plan Year and the date on which the
Excess Contributions are distributed. The income and loss
allocable to the Excess Contributions shall bear the same
proportion to the total income and loss allocable to a
Participant's Account as the Excess Contributions bear to the
Participant's Account.
13.8 Prospective Limitations on Participant Elected Contributions. At any
time, the Company (at its sole discretion) may reduce the maximum rate
at which any Participant may make Participant Elected Contributions to
the Plan, or the Company may require that any Participant discontinue
all Participant Elected Contributions, in order to ensure that the
limitations described in this Article 13 are met. Any reduction or
discontinuance of Participant Elected Contributions may be applied
selectively to individual Participants or to particular classes of
Participants, as the Company may determine. Upon such date as the
Company may determine, this Section shall automatically cease to apply
until the Company again determines that a reduction or discontinuance
of Participant Elected Contributions is required for any Participant.
13.9 Special Definitions Used in Article 13. The following definitions shall
apply for purposes of this Article 13, and some may also apply for
Articles 14 and 15.
(a) "Aggregate 401(k) Contributions" means, for any Plan Year, the
sum of the following: (a) the Participant's Participant
Elected Contributions for the Plan Year; (b) the Qualified
Matching Contributions allocated to the Participant's Accounts
as of a date within the Plan Year, but only to the extent that
such Qualified Matching Contributions are aggregated with
Participant Elected Contributions pursuant to Section 13.5;
and (c) the Qualified Nonelective Contributions allocated to
the Participant's Accounts as of a date within the Plan
32
Year, but only to the extent that such Qualified Nonelective
Contributions are aggregated with Participant Elected
Contributions pursuant to Section 13.6.
(b) "Annual Deferral Limit" means the dollar limit in effect for
any calendar year under Section 402(g) of the Code.
(c) "Excess Contributions" means the amount by which the Aggregate
401(k) Contributions of Highly Compensated Employees is
reduced pursuant to Section 13.3.
(d) "Excess Deferrals" means the amount of a Participant's
Participant Elected Contributions and elective deferrals
(within the meaning of Section 402(g)(3) of the Code) that
exceed the Annual Deferral Limit set forth in Section 13.1.
(e) "Section 414(s) Compensation" means any one of the following
definitions of compensation received by an Employee from
members of the Affiliated Group:
(1) Compensation as defined in Treasury Regulation
Section 1.415-2(d) or any successor thereto;
(2) "Wages" as defined in Section 3401(a) of the Code for
purposes of income tax withholding at the source, but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or
location of the employment or the services performed
(such as the exception for agricultural labor in
Section 3401(a)(23) of the Code);
(3) "Wages" as defined in Section 3401(a) of the Code for
purposes of income tax withholding at the source,
plus all other payments of compensation reportable
under Code Sections 6041(d) and 6051(a)(3) and the
regulations thereunder, determined without regard to
any rules that limit such Wages or reportable
compensation based on the nature or location of the
employment or the services performed (such as the
exception for agricultural labor in Section
3401(a)(23) of the Code), and modified, at the
election of the Company, to exclude amounts paid or
reimbursed for the Employee's moving expenses, to the
extent it is reasonable to believe that these amounts
are deductible by the Employee under Section 217 of
the Code;
(4) Any of the definitions of Section 414(s) Compensation
set forth in Subsections (1), (2) and (3) above,
reduced by all of the following items (even if
includable in gross income): reimbursements or other
expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation and
welfare benefits;
(5) Any of the definitions of Section 414(s) Compensation
set forth in Subsections (1), (2), (3) and (4) above,
modified to include the following:
33
(a) any elective contributions made by a member of
the Affiliated Group on behalf of the Employee that
are not includable in gross income under Section 125,
132(f)(4), 402(e)(3), 402(h) or 403(b) of the Code;
(b) compensation deferred under an eligible deferred
compensation plan within the meaning of Section
457(b) of the Code; and (c) employee contributions
described in Section 414(h)(2) of the Code that are
picked up by the employing unit and thus are treated
as employer contributions; or
(6) Any reasonable definition of compensation that does
not by design favor Highly Compensated Employees and
that satisfies the nondiscrimination requirement set
forth in Treasury Regulation Section
1.414(s)-1T(d)(2) or the successor thereto.
Any definition of Section 414(s) Compensation shall be used
consistently to define the compensation of all Employees taken
into account in satisfying the requirements of an applicable
provision of Articles 13, 14 and 15 for the relevant
determination period. For purposes of applying the limitations
set forth in Articles 13 and 14 for a Plan Year, Section
414(s) Compensation shall not exceed the Compensation
Limitation.
ARTICLE 14. CONTRIBUTION LIMITATIONS: AVERAGE CONTRIBUTION PERCENTAGE
LIMITATIONS.
14.1 Average Contribution Percentage Limitation. The Plan shall satisfy the
actual contribution percentage test, as provided in Section 401(m)(2)
of the Code and Section 1.401(m)-1 of the regulations issued
thereunder. Subject to the special rules described in Section 14.6, the
Aggregate 401(m) Contributions of Highly Compensated Employees shall
not exceed the limits described below:
(a) An Actual Contribution Percentage shall be determined for each
individual who, at any time during the Plan Year, is a
Participant (including a suspended Participant) or is eligible
to participate in the Plan, which Actual Contribution
Percentage shall be the ratio, computed to the nearest
one-hundredth of one percent, of the individual's Aggregate
401(m) Contributions for the Plan Year to the individual's
Section 414(s) Compensation for the Plan Year;
(b) The Actual Contribution Percentages (including zero
percentages) of Highly Compensated Employees and Nonhighly
Compensated Employees shall be separately averaged to
determine each group's Average Contribution Percentage; and
(c) The Aggregate 401(m) Contributions of Highly Compensated
Employees shall constitute Excess Aggregate Contributions and
shall be reduced, pursuant to Sections 14.2 and 14.3, to the
extent that the Average Contribution Percentage of Highly
Compensated Employees exceeds the greater of (1) 125 percent
of the
34
Average Contribution Percentage of Nonhighly Compensated
Employees for the preceding Plan Year or (2) the lesser of (A)
200 percent of the Average Contribution Percentage of
Nonhighly Compensated Employees for the preceding Plan Year or
(B) the Average Contribution Percentage of Nonhighly
Compensated Employees for the preceding Plan Year plus two
percentage points.
14.2 Allocation of Excess Aggregate contributions to Highly Compensated
Employees. Any Excess Aggregate Contributions for a Plan Year shall be
allocated to Highly Compensated Employees by use of a leveling process,
whereby the Aggregate 401(m) Contributions of the Highly Compensated
Employee with the highest amount of Aggregate 401(m) Contributions is
reduced to the extent required to (a) eliminate all Excess Aggregate
Contributions or (b) cause the amount of such Highly Compensated
Employee's Aggregate 401(m) Contributions to equal the amount of
Aggregate 401(m) Contributions of the Highly Compensated Employee with
the next-highest amount of Aggregate 401(m) Contributions. The leveling
process shall be repeated until all Excess Aggregate Contributions for
the Plan Year are allocated to Highly Compensated Employees.
Notwithstanding the foregoing, for Plan Years beginning after December
31, 1996, any determination of Excess Aggregate Contributions of a
Highly Compensated Employee shall be made on the basis of the Highly
Compensated Employee's actual contribution ratio in accordance with
Code Section 401(m)(6)(C) and the Regulations promulgated thereunder.
14.3 Distribution of Excess Aggregate Contributions. Excess Aggregate
Contributions allocated to Highly Compensated Employees for the Plan
Year pursuant to Section 14.2, together with any income or loss
allocable to such Excess Aggregate Contributions (calculated to include
income and loss for the period between the end of the Plan Year and the
date on which the Excess Aggregate Contributions are distributed),
shall be distributed to such Highly Compensated Employees not later
than two-and-one-half months following the close of such Plan Year, if
possible, and in any event no later than 12 months following the close
of such Plan Year, but only to the extent the Highly Compensated
Employee has a nonforfeitable interest in the Excess Aggregate
Contributions. Excess Aggregate Contributions (for Participants who are
Highly Compensated Employees), to the extent not vested, may be
forfeited and allocated, after all other Forfeitures under the Plan, to
other Participants (but in no event to any Highly Compensated Employee)
in the proportion that such Participant's Elected Contributions, if
any, for that Plan Year bears to the total Elected Contributions of all
such Participants for the Plan Year. Any such amounts shall be included
in the calculation of the Actual Contribution Percentage and in the
calculation of the limits set forth in Article 15. The income and loss
allocable to the Excess Aggregate Contributions shall bear the same
proportion to the total income and loss allocable to a Participant's
Accounts as the Excess Aggregate Contributions bear to the
Participant's Accounts. Notwithstanding the foregoing, for Plan Years
beginning after December 31, 1996, any distribution of Excess Aggregate
Contributions for a Plan Year to Highly Compensated Eligible Employees
shall be made on the basis of the dollar amount of Aggregate 401(m)
Contributions made
35
by, or on behalf of, each such Highly Compensated Eligible Employee in
accordance with Code Section 401(m)(6)(C).
14.4 Use of Participant Elected Contributions. The Company, in its sole
discretion, may include all or a portion of the Participant Elected
Contributions for a Plan Year in Aggregate 401(m) Contributions taken
into account in applying the Average Contribution Percentage limitation
described in Section 14.1 for the Plan Year, provided that all
Participant Elected Contributions satisfy the average deferral
percentage test, as described in Section 13.2, and that the additional
requirements of Treasury Regulation Section 1.401(m)-1(b)(5) are
satisfied.
14.5 Corrective Qualified Nonelective Contributions. The Company, in its
sole discretion, may include all or a portion of the Qualified
Nonelective Contributions made pursuant to Section 13.6 for a Plan Year
in Aggregate 401(m) Contributions taken into account in applying the
Average Contribution Percentage limitation described in Section 14.1
for the Plan Year, provided that the requirements of Treasury
Regulation Section 1.401(m)-1(b)(5) are satisfied.
14.6 Special Rules. The following special rules shall apply for purposes of
this Article 14:
(a) For purposes of applying the limitation described in Section
14.1, the Actual Contribution Percentage of any Highly
Compensated Employee who is eligible to participate in the
Plan and to make employee contributions or receive an
allocation of matching contributions (within the meaning of
Section 401(m)(4)(A) of the Code) under any other plans,
contracts or arrangements of the Affiliated Group shall be
determined as if Matching Contributions and Qualified Matching
Contributions allocated to the Highly Compensated Employee's
Accounts and all such employee contributions and matching
contributions were made under a single arrangement;
(b) In the event that this Plan is aggregated with one or more
other plans in order to satisfy the requirements of Code
Section 401(a)(4), 401(m) or 410(b), then all such aggregated
plans, including the Plan, shall be treated as a single plan
for all purposes under all such Code sections (except for
purposes of the average benefit percentage provisions of Code
Section 410(b)(2)(A)(ii));
(c) In the event that the mandatory disaggregation rules of
Treasury Regulation Section 1.401(m)-1(b)(3)(ii) apply to the
Plan, or to the Plan and other plans with which it is
aggregated as described in Subsection (b) above, then the
limitation described in Section 14.1 shall be applied as if
each mandatorily disaggregated portion of the Plan (or
aggregated plans) were a single arrangement; and
(d) Income (and loss) allocable to Excess Aggregate Contributions
for the Plan Year shall be determined pursuant to the
provisions for allocating income (and loss) to a Participant's
Accounts under Section 6.10.
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14.7 Special Definitions Used in Article 14. The following definitions shall
apply for purposes of this Article 14:
(a) "Aggregate 401(m) Contributions" means, for any Plan Year, the
sum of the following: (a) the Matching Contributions and
Qualified Matching Contributions allocated to the
Participant's Accounts as of a date within the Plan Year; (b)
the Participant's Participant Elected Contributions for the
Plan Year, but only to the extent that such Participant
Elected Contributions are aggregated with Matching
Contributions and Qualified Matching Contributions pursuant to
Section 14.4; and (c) the Qualified Nonelective Contributions
allocated to the Participant's Accounts as of a date within
the Plan Year, but only to the extent that such Qualified
Nonelective Contributions are aggregated with Matching
Contributions and Qualified Matching Contributions pursuant to
Section 14.5.
(b) "Excess Aggregate Contributions" means the amount by which the
Aggregate 401(m) Contributions of Highly Compensated Employees
are reduced pursuant to Section 14.2.
ARTICLE 15. CONTRIBUTION LIMITATIONS: SECTION 415 "ANNUAL ADDITIONS"
LIMITATIONS.
15.1 Limitation on Contributions. Except to the extent permitted under
Section 4.6 of the Plan and Section 414(v) of the Code, if applicable,
the Annual Additions that may be contributed or allocated to a
Participant for any Plan Year shall not exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under
Section 415(d) of the Code, or
(b) 100% of the Participant's Section 415 Compensation for such
year.
15.2 If a Participant's Annual Additions would exceed the foregoing
limitation, then such Annual Additions shall be reduced by reducing the
components thereof as necessary in the order in which they are listed
in Section 15.5(a). Any amounts so reduced shall not be included in a
Participant's Aggregate 401(k) Contributions or Aggregate 401(m)
Contributions. The limitation in Section 15.1(b) shall not apply to any
amount that otherwise is an Annual Addition under Section 415(l)(1) or
419A(d)(2) of the Code.
15.3 Return of Employee Contributions. If the amount of any Participant's
Participant Elected Contributions is determined to be an excess Annual
Addition under this Article, then the amount of such excess (adjusted
to reflect any earnings, appreciation or losses attributable to such
excess) shall be refunded by the Trustee in cash to the Participant.
15.4 Excess Company Contributions. If the amount of the Company
Contributions allocated to a Participant for any Plan Year must be
reduced to meet the limitation described in Section 15.1, then the
amount of the reduction shall be applied to reduce the total amount
that the Participating Companies otherwise would contribute for such
year pursuant to
37
Article 5 of the Plan. If the amount that the Participating Companies
may contribute is thereby reduced to zero and if there are Company
Contributions that still cannot be allocated to any Participant because
of the limitation described in Section 15.1, then the excess shall be
transferred to a suspense account. Any gains, income or losses
attributable to the suspense account shall be allocated to such
account. All amounts credited to the suspense account shall be applied
to reduce the total amount that the Participating Companies otherwise
would contribute to the Plan for the next Plan Year, and for succeeding
Plan Years if necessary. Such amounts shall be allocated among
Participants pursuant to Article 5 of the Plan until the suspense
account is exhausted (subject to this Article). No Participant Elected
Contributions or Company Contributions shall be made as long as any
amount remains in the suspense account. However, this method of
addressing Excess Company Contributions will only be permitted in the
event the excess Annual Additions result from the allocation of
forfeitures or result from a reasonable error in determining the amount
of elective deferrals under section 401(g)(3).
15.5 Special Definitions Used in this Article 15. The following definitions
shall apply for purposes of this Article 15.
(a) "Annual Additions" means, for any Plan Year, the sum of the
following:
(1) The amount of after-tax contributions that the
Participant contributes during such year to all
qualified retirement plans, other than this Plan,
maintained by the Section 415 Employer Group;
(2) The amount of elective contributions that the
Participant contributes during such year to all
qualified retirement plans, other than this Plan,
maintained by the Section 415 Employer Group;
(3) The amount of Participant Elected Contributions that
the Participant contributes during such year;
(4) The amount of employer contributions and forfeitures
allocated to the Participant under any qualified
defined contribution plan that may be maintained by
the Section 415 Employer Group, other than this Plan,
as of any date within such year; and
(5) The amount of Company Contributions and Forfeitures
allocated to the Participant as of any date within
such year.
(b) "Section 415 Compensation" means any one of the definitions of
Section 414(s) Compensation described in Paragraphs (1), (2),
(3) or (4) of Section 13.9(e) received by an Employee from
members of the Section 415 Employer Group, including amounts
deferred but not refunded under Section 403(b) of the Code,
under a cafeteria plan, as such term is defined in Section
125(c) of the Code, under a simplified employee pension, as
such term is defined in Section 408(k) of the Code, under a
plan, including this Plan, qualified under Section 401(k) of
the
38
Code, and under a qualified transportation fringe program
under Section 132(f)(4) of the Code. Any definition of Section
415 Compensation shall be used consistently to define the
compensation of all Employees taken into account in satisfying
the requirements of an applicable provision of the Plan for
the relevant determination period.
(c) "Section 415 Employer Group" means the Affiliated Group,
except that "more than 50 percent" shall be substituted for
"at least 80 percent" wherever the phrase occurs in Section
1563(a) of the Code (as incorporated by reference in Sections
414(b) and (c) of the Code).
ARTICLE 16. THE TRUST FUND AND PLAN INVESTMENTS.
16.1 Control and Management of Plan Assets. The Company shall have the
control over and management of the assets of the Plan, but only to the
extent of having the authority (a) to appoint one or more trustees to
hold assets of the Plan in trust and to enter into a trust agreement
with each trustee it appoints, (b) to appoint one or more insurance
companies that are qualified to do business in at least one state to
hold assets of the Plan and to enter into a contract with each
insurance company it appoints (or to direct the Trustee to enter into
such contract), (c) to appoint one or more Investment Managers for any
assets of the Plan and to enter into an investment management agreement
with each Investment Manager it appoints, and (d) to direct the
investment of any Plan assets not assigned to an Investment Manager.
16.2 Trustee Duties. The Trustee shall have the exclusive authority and
discretion to control and manage assets of the Plan it holds in trust,
except to the extent that (a) the Plan prescribes how such assets shall
be invested, (b) the Company directs how such assets shall be invested
or (c) the Company allocates the authority to manage such assets to one
or more Investment Managers. Each Investment Manager shall have the
exclusive authority to manage, including the authority to acquire and
dispose of, the assets of the Plan assigned to it by the Company,
except to the extent that the Plan prescribes or the Company directs
how such assets shall be invested. Each Trustee and Investment Manager
shall be solely responsible for diversifying, in accordance with
Section 404(a)(1)(C) of ERISA, the investment of the assets of the Plan
assigned to it by the Committee, except to the extent that the Plan
prescribes or the Committee directs how such assets shall be invested.
16.3 Independent Qualified Public Accountant. The Company shall engage an
independent qualified public accountant to conduct such examinations
and to express such opinions as may be required by Section 103(a)(3) of
ERISA. The Company in its discretion may remove and discharge the
person so engaged, in which event it shall appoint a successor
independent qualified public accountant to perform such examinations
and express such opinions.
16.4 Administrative Expenses. All expenses of the Plan and the Trust Fund
shall be paid by the Participating Companies or the Trust Fund. Except
as otherwise explicitly stated in
39
the Plan (including Sections 9.6, 10.6 and 11.6 hereof) and the Trust
Agreement, the Participating Companies shall pay the administrative
expenses of the Plan and Trust Fund.
16.5 Benefit Payments. All benefits payable pursuant to the Plan shall be
paid by the Trustee out of the Trust Fund pursuant to the directions of
the Company and the terms of the Trust Agreement.
ARTICLE 17. ADMINISTRATION AND OPERATION OF THE PLAN.
17.1 Plan Administration. The Company is the "named fiduciary,"
"administrator" and "plan sponsor" of the Plan (as such terms are used
in ERISA). Except as otherwise specified in the Plan, the following
parties shall have the following rights, powers and authority with
respect to the administration of the Plan. To the extent that the Plan
requires an action under the Plan to be taken by the Company, the party
specified in this Section 17.1 shall be authorized to act on behalf of
the Company.
(a) Rights, Powers and Duties of Global Benefits Committee. The
Global Benefits Committee (as defined below) shall have the
following rights, powers and authority under the Plan:
(1) to amend the Plan, to the extent that such amendment
is either (i) required under applicable law, or (ii)
does not materially increase the benefits provided
under the Plan;
(2) to appoint and remove Trustees and Investment
Managers and otherwise control and manage the Plan's
assets in accordance with Section 16.1;
(3) to appoint and remove members of the Fiduciary
Committee;
(4) to maintain and keep adequate records concerning the
Plan and its proceedings and acts in such form and
detail as the Global Benefits Committee may decide
(5) to adopt such rules, regulations and procedures as it
may deem reasonably necessary for the proper and
efficient administration of the Plan and consistent
with its purpose; and
(6) to make such rules, interpretations, computations and
take such other actions to carry out the foregoing
responsibilities under the Plan as it may deem
appropriate, in its sole discretion. Such rules,
interpretations, computations and actions shall be
conclusive and binding on all persons
(b) Rights, Powers and Duties of Fiduciary Committee. The
Fiduciary Committee (as defined below) shall have the
following rights, powers and authority under the Plan:
40
(1) to conclusively determine all questions arising under
the Plan (other than those specifically reserved to
the Global Benefits Committee), including questions
relating to eligibility, amount of benefits and other
Plan rights of Participants and other persons
entitled to benefits under the Plan;
(2) to review the performance of the Investment Funds on
a periodic basis and to report and make
recommendations with respect to such Investment Funds
to the Global Benefits Committee; provided, however,
if at any time the Board or one of its duly appoint
delegates has not appointed a Global Benefits
Committee, the Fiduciary Committee shall have the
right to appoint and remove Trustees and Investment
Managers and otherwise control and manage the Plan's
assets in accordance with Section 16.1;
(3) to direct all benefit payments under the Plan;
(4) to maintain and keep adequate records concerning the
Plan and its proceedings and acts in such form and
detail as the Fiduciary Committee may decide
(5) to adopt such rules, regulations and procedures as it
may deem reasonably necessary for the proper and
efficient administration of the Plan and consistent
with its purpose; and
(6) to make such rules, interpretations, computations and
take such other actions to carry out the foregoing
responsibilities under the Plan as it may deem
appropriate, in its sole discretion. Such rules,
interpretations, computations and actions shall be
conclusive and binding on all persons.
(c) In administering the Plan, the Global Benefits Committee and
Fiduciary Committee (a) shall act in a nondiscriminatory
manner to the extent required by Section 401(a) and related
sections of the Code and (b) shall at all times discharge
their duties in accordance with the standards set forth in
Section 404(a)(1) of ERISA.
(d) Definitions. The following terms shall have the meanings set
forth below:
(1) "Fiduciary Committee" means the committee appointed
by the Global Benefits Committee (or the Board or one
of its duly appointed delegates, for periods prior to
January 1, 2004) for purposes of performing certain
administrative functions with respect to the Plan, as
specified herein. If at any time the Global Benefits
Committee has not appointed a Fiduciary Committee,
the Global Benefits Committee (or the Board or one of
its duly appointed delegates if no Global Benefits
Committee then exists) shall act as the Fiduciary
Committee.
41
(2) "Global Benefits Committee" means the committee
appointed by the Board or one of its duly appointed
delegates for purposes of performing certain
investment and administrative functions with respect
to the Plan, as specified herein. For periods prior
to January 1, 2004, and at any time thereafter that
the Board or one of its duly appointed delegates has
not appointed a Global Benefits Committee, the Board
or one of its duly appointed delegates shall act as
the Global Benefits Committee.
17.2 Employment of Advisers. The Company, Global Benefits Committee and
Fiduciary Committee may retain such attorneys, accountants, consultants
or other persons to render advice or to perform services with regard to
their responsibilities under the Plan as they shall determine to be
necessary or desirable. The Company, Global Benefits Committee and
Fiduciary Committee may designate by written instrument (signed by both
parties) one or more persons to carry out, where appropriate, their
respective fiduciary responsibilities under the Plan. Duties and
responsibilities under the Plan that have not been delegated to other
fiduciaries pursuant to the preceding sentence shall be carried out by
its directors, officers and employees, acting on behalf and in the name
of the Company or applicable Committee in their capacities as
directors, officers and employees, and not as individual fiduciaries.
17.3 Service in Several Fiduciary Capacities. Nothing herein shall prohibit
any person or group of persons from serving in more than one fiduciary
capacity with respect to the Plan.
ARTICLE 18. CLAIMS AND REVIEW PROCEDURES.
18.1 Applications for Benefits. Any application for benefits under the Plan
shall be submitted to the Company at its principal office. Such
application shall be in writing on the prescribed form and shall be
signed by the applicant.
18.2 Denial of Applications. In the event that any application for benefits
is denied in whole or in part, the Company shall notify the applicant
in writing or electronically of the right to a review of the denial.
Such written notice shall set forth, in a manner calculated to be
understood by the applicant, specific reasons for the denial, specific
references to the Plan provisions on which the denial was based, a
description of any information or material necessary to perfect the
application, an explanation of why such material is necessary, an
explanation of the Plan's review procedure, and a statement of the
applicant's right to bring a civil action under section 502(a) of ERISA
following an adverse benefit determination on review. Such notice shall
be given to the applicant within 90 days after the Company receives the
application, unless special circumstances require an extension of time
for processing the application. In no event shall such an extension
exceed a period of 90 days from the end of the initial 90-day period.
If such an extension is required, written notice thereof shall be
furnished to the applicant before the end of the initial 90-day period.
Such notice shall indicate the special circumstances requiring an
extension of time and the date by which the Company expects to render a
decision. If notice is not given to the applicant within the period
prescribed by this
42
Section 18.2, the application shall be deemed to have been denied for
purposes of Section 18.3 upon the expiration of such period.
18.3 Requests for Review. Any person whose application for benefits is
denied in whole or in part (or such person's duly authorized
representative) may appeal the denial by submitting to the Fiduciary
Committee a request for a review of such application within 90 days
after receiving written notice of the denial. The Fiduciary Committee
shall give the applicant or such representative an opportunity to
review pertinent documents (except legally privileged materials) in
preparing such request for review and to submit issues and comments in
writing. The request for review shall be in writing and shall be
addressed to the Company's principal office. The request for review
shall set forth all of the grounds on which it is based, all facts in
support of the request, and any other matters which the applicant deems
pertinent. The Fiduciary Committee may require the applicant to submit
such additional facts, documents or other material as it may deem
necessary or appropriate in making its review.
18.4 Decisions on Review. The Fiduciary Committee shall act upon each
request for review within 60 days after receipt thereof, unless special
circumstances require an extension of time for processing, but in no
event shall the decision on review be rendered more than 120 days after
the Fiduciary Committee receives the request for review. If such an
extension is required, written notice thereof shall be furnished to the
applicant before the end of the initial 90-day period. The Fiduciary
Committee shall give prompt, written or electronic notice of its
decision to the applicant and to the Company. In the event that the
Fiduciary Committee confirms the denial of the application for benefits
in whole or in part, such notice shall set forth, in a manner
calculated to be understood by the applicant, the specific reasons for
such denial, specific references to the Plan provisions on which the
decision is based, and a statement of the applicant's right to bring a
civil action under section 502(a) of ERISA following an adverse benefit
determination on review. To the extent that the Fiduciary Committee
overrules the denial of the application for benefits, such benefits
shall be paid to the applicant.
18.5 Rules and Procedures. The Fiduciary Committee shall adopt such rules
and procedures, consistent with ERISA and the Plan, as it deems
necessary or appropriate in carrying out its responsibilities under
this Article 18.
18.6 Exhaustion of Administrative Remedies. No legal or equitable action for
benefits under the Plan shall be brought unless and until the claimant
(a) has submitted a written application for benefits in accordance with
Section 18.1, (b) has been notified that the application is denied, (c)
has filed a written request for a review of the application in
accordance with Section 18.3, and (d) has been notified in writing or
electronically that the Fiduciary Committee has affirmed the denial of
the application; provided, however, that an action may be brought after
the Company or the Fiduciary Committee has failed to act on the claim
within the time prescribed in Section 18.2 and Section 18.4,
respectively.
43
ARTICLE 19. AMENDMENT AND TERMINATION.
19.1 Right To Amend or Terminate. The Company expects to continue the Plan
indefinitely. However, future conditions cannot be foreseen, and the
Company reserves the right at any time and for any reason, by action of
the Board or by a person or persons acting pursuant to a valid
delegation of authority, (a) to amend the Plan, (b) to reduce or
discontinue Employee Contributions, Company Contributions or all
Contributions or (c) to terminate the Plan and the Trust Fund.
19.2 Protection of Participants. No amendment of the Plan shall reduce the
benefit of any Participant that accrued under the Plan prior to the
date when such amendment is adopted, except to the extent that a
reduction in accrued benefits may be permitted by the Code and ERISA.
No Plan amendment or other action by the Company shall divert any part
of the Plan's assets to purposes other than the exclusive purpose of
providing benefits to the Participants and Beneficiaries who have an
interest in the Plan and of defraying the reasonable expenses of
administering the Plan.
19.3 Effect of Termination. Upon termination of the Plan, no assets of the
Plan shall revert to any Participating Company or be used for, or
diverted to, purposes other than the exclusive purpose of providing
benefits to Participants and Beneficiaries and of defraying the
reasonable expenses of termination. If the Plan is terminated or
partially terminated, or if all contributions to the Plan are
completely discontinued, then each Participant who then is an Employee
and who is directly affected by such event shall have a 100 percent
vested interest in each of his or her Accounts, without regard to the
number of Years of Service he or she has completed.
19.4 Allocation of Trust Fund Upon Termination. Upon termination of the
Plan, the Trust Fund shall continue in existence until the Accounts of
each Participant have been distributed to such Participant (or to his
or her Beneficiary) pursuant to Article 8; provided, however, that the
assets of the Plan shall be allocated in accordance with any applicable
requirements under Section 403(d)(1) of ERISA.
19.5 Partial Termination. Upon a partial termination of the Plan, Sections
19.3 and 19.4 shall apply with respect to such Participants and
Beneficiaries as are affected by such partial termination.
ARTICLE 20. MISCELLANEOUS PROVISIONS.
20.1 Plan Mergers. The Plan shall not merge or consolidate with, or transfer
assets or liabilities to, any other plan unless each Participant would
receive a benefit immediately after such merger, consolidation or
transfer (if the Plan then terminated) that is equal to or greater than
the benefit that such Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan
had then terminated).
44
20.2 No Assignment of Property Rights. Except as otherwise provided in
Article 9 with respect to QDROs or as provided in the following
sentence, the interest or property rights of any Participant or
Beneficiary in the Plan, in the Trust Fund or in any distribution to be
made under the Plan shall not be subject to option nor be assignable,
either by voluntary or involuntary assignment or by operation of law,
including (without limitation) bankruptcy, garnishment, attachment or
other creditor's process, and any act in violation of this Section 20.2
shall be void. Notwithstanding any Plan provision to the contrary, a
Participant's Plan benefits shall be reduced by any amount such
Participant is ordered or required to pay to the Plan if the order or
requirement to pay arises (i) under a judgement or conviction for a
crime involving the Plan (ii) under a civil judgment (including a
consent order or decree) entered by a court in an action brought in
connection with a breach (or alleged breach) of fiduciary duty under
ERISA, or (iii) pursuant to a settlement agreement entered into by the
Participant and the Secretary of Labor in connection with a breach of
fiduciary duty under ERISA by a fiduciary or any other person;
provided, however, that the judgment, order, decree, or settlement
agreement expressly provides for the offset of all or part of the
amount ordered or required to be paid to the Plan against the
Participant's benefits under the Plan.
20.3 No Employment Rights. Nothing in the Plan shall be deemed to give any
individual a right to remain in the employ of an Affiliate or affect
the right of an Affiliate to terminate an individual's employment at
will with or without cause, at any time with or without notice, for any
reason or no reason, which right is hereby reserved.
20.4 Choice of Law. The Plan and all rights thereunder shall be interpreted
and construed in accordance with ERISA and, to the extent that state
law is not preempted by ERISA, the law of the State of California.
20.5 Voting of Company Stock. Before each annual or special meeting of the
Company's shareholders, the Company shall cause to be sent to each
Participant who has invested any part of his or her Account in the
Company Stock Fund the proxy statement and any related materials that
are sent to the Company's registered shareholders. Each Participant
shall have the right to instruct the Trustee confidentially (in writing
on the prescribed form) with respect to the voting at such meeting of
the number of shares of Company Stock that were allocated to the
Participant's Account as of the Valuation Date immediately preceding
the record date for such meeting or such later date, up to and
including the record date for such meeting, as the Plan Administrator
may deem practicable. Such instructions shall be submitted to the
Trustee by the date specified by the Company and, once received by the
Trustee, shall be irrevocable. Under no circumstances shall the Trustee
permit any Participating Company or any officer, employee or
representative thereof to see any voting instructions given by a
Participant to the Trustee. The Trustee shall vote any Company Stock
for which it has not received timely written instructions in the same
proportion as the Trustee votes the shares for which timely voting
instructions have been received from Participants.
20.6 Tender Offers. In the event that any person or group makes an offer
subject to Section 14(d) of the Exchange Act to acquire all or part of
the outstanding Company
45
Stock, including Company Stock held in the Plan ("Acquisition Offer"),
each Participant shall be entitled to direct the Trustee confidentially
(on a form prescribed by the Company) to tender all or part of those
shares of Company Stock that would then be subject to such
Participant's voting instructions under Section 20.5 above. If the
Trustee receives such an instruction by a date determined by the
Trustee and communicated to Participants, the Trustee shall tender such
Company Stock in accordance with such instruction. Any Company Stock as
to which the Trustee does not receive instructions within such period
shall not be tendered by the Trustee. The Trustee shall obtain and
distribute to each Participant all appropriate materials pertaining to
the Acquisition Offer, including the statement of the position of the
Company with respect to such offer issued pursuant to Regulation
14(e)-2 of the Exchange Act, as soon as practicable after such
materials are issued, provided, however, that if the Company fails to
issue such statement within five (5) business days after the
commencement of such offer, the Trustee shall distribute such materials
to each Participant without such statement by the Company and shall
separately distribute such statement by the Company as soon as
practicable after it is issued. The Trustee shall follow the procedures
regarding confidentiality and verification of compliance with voting
instructions described in Section 20.5 above.
ARTICLE 21. SPECIAL TOP-HEAVY PROVISIONS.
21.1 Determination of Top-Heavy Status. Any other provision of the Plan
notwithstanding, this Article shall apply to any Plan Year in which the
Plan is a Top-Heavy Plan. The Plan shall be considered a "Top-Heavy
Plan" for a Plan Year if, as of the Determination Date for such Plan
Year, the Top-Heavy Ratio for the Aggregation Group exceeds 60 percent.
The top-heavy requirements of Section 416 of the Code and this Article
21 of the Plan shall not apply in any year in which the Plan consists
solely of a cash or deferred arrangement which meets the requirements
of Section 401(k)(12) of the Code and matching contributions with
respect to which the requirements of Section 401(m)(11) of the Code are
met.
21.2 Minimum Allocations. For any Plan Year during which the Plan is a
Top-Heavy Plan, the Company Contributions (exclusive of Qualified
Nonelective Contributions and Qualified Matching Contributions)
allocated to the Account of each Participant who is not a Key Employee,
but who is an Employee on the last day of such Plan Year, shall not be
less than the lesser of the following amounts:
(a) Three percent of his or her Top-Heavy Compensation; or
(b) A percentage of his or her Top-Heavy Compensation equal to the
greatest allocation of Company Contributions and Participant
Elected Contributions, expressed as a percentage of Top-Heavy
Compensation, made on behalf of any Participant who is a Key
Employee.
21.3 Special Definitions. For purposes of this Article 21, the following
definitions shall apply:
46
(a) "Aggregation Group" means either the Required Aggregation
Group or any Permissive Aggregation Group, as the Company may
elect.
(b) "Determination Date" means the December 31 next preceding the
applicable Plan Year.
(c) "Key Employee" means a "key employee" (within the meaning of
Section 416(i) of the Code). In applying Section 416(i) of the
Code, "annual compensation" shall mean Top-Heavy Compensation
(d) "Permissive Aggregation Group" means a group of qualified
plans that includes (1) the Required Aggregation Group and (2)
one or more plans of the Affiliated Group that are not part of
the Required Aggregation Group. A Permissive Aggregation
Group, when viewed as a single plan, must satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
(e) "Required Aggregation Group" means a group of qualified plans
that includes (1) each plan of the Affiliated Group in which a
Key Employee is a participant and (2) each other plan of the
Affiliated Group that enables any plan in which a Key Employee
participates to meet the requirements to Section 401(a)(4) or
410 of the Code.
(f) "Top-Heavy Compensation" means Section 415 Compensation, as
defined in Section 15.5(b); provided, however, that Top-Heavy
Compensation shall not include any amount paid to a
Participant for the Plan Year in excess of the Compensation
Limitation.
(g) "Top-Heavy Ratio" means a percentage determined pursuant to
Section 416(g) of the Code.
21.4 Top-Heavy Vesting Rules. For periods after December 31, 2001, the
minimum vesting required under Code Section 416(b) for any Plan Year in
which the Plan is a Top-Heavy Plan is automatically satisfied pursuant
to Section 7.1 of the Plan, which provides that all Accounts are fully
vested at all times.
47
ARTICLE 22. EXECUTION.
To record the amendment and restatement of the Plan as set forth herein,
effective as of January 1, 2003, the Company has caused its authorized officer
to execute the same this 5th day of January , 2004.
AMGEN INC.
By /s/ Brian McNamee
------------------------------
Brian McNamee
Senior Vice President,
Human Resources
48
APPENDIX A
Amgen (Bermuda) Clinical Development, Limited
Amgen (Bermuda) Clinical Development 2, Limited
Amgen (Bermuda) Clinical Development 3, Limited
Amgen (Bermuda) Clinical Development 4, Limited
Amgen (Bermuda) Clinical Development 5, Limited
Amgen (Bermuda) Clinical Development 6, Limited
Amgen (Bermuda) Clinical Development 7, Limited
Amgen (Bermuda) Clinical Development 8, Limited
Amgen USA Inc.
Immunex Corporation
Immunex Manufacturing Corporation
Immunex Rhode Island Corporation
49