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EXHIBIT 4(d)
PCI-PR PROFIT SHARING AND
RETIREMENT SAVINGS PLAN
Effective as of July 1, 1998
(6/99)
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TABLE OF CONTENTS
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ARTICLE I.....................................................................2
DEFINITIONS................................................................2
Section 1.01. Account..................................................2
Section 1.02. Accounting Date..........................................2
Section 1.03. Beneficiary..............................................2
Section 1.04. Board....................................................2
Section 1.05. Code.....................................................2
Section 1.06. Committee................................................2
Section 1.07. Company..................................................2
Section 1.08. Compensation.............................................3
Section 1.09. Disability...............................................4
Section 1.10. Effective Date...........................................4
Section 1.11. Eligible Employee........................................4
Section 1.12. Employee.................................................4
Section 1.13. Employer.................................................4
Section 1.14. Entry Date...............................................5
Section 1.15. ERISA....................................................5
Section 1.16. Former Participant.......................................5
Section 1.17. Income...................................................5
Section 1.18. Investment Manager.......................................5
Section 1.19. Leased Employee..........................................5
Section 1.20. Nonforfeitable...........................................6
Section 1.21. Nonforfeitable Account Balance...........................6
Section 1.22. Normal Retirement Age....................................6
Section 1.23. Participant..............................................6
Section 1.24. Part-time Employee.......................................6
Section 1.25. Plan.....................................................6
Section 1.26. Plan Administrator.......................................6
Section 1.27. Plan Year................................................7
Section 1.28. Profit Sharing Account...................................7
Section 1.29. Related Employers........................................7
Section 1.30. Rollover Account.........................................7
Section 1.31. Service and Break in Service Definitions.................7
Section 1.32. Transfer Account........................................13
Section 1.33. Treasury Regulations....................................13
Section 1.34. Trust...................................................13
Section 1.35. Trust Fund..............................................13
Section 1.36. Trustee.................................................13
Section 1.37. Valuation Date..........................................13
Section 1.38. Terms Defined Elsewhere.................................13
ARTICLE II...................................................................15
ELIGIBILITY AND PARTICIPATION.............................................15
Section 2.01. Eligibility.............................................15
Section 2.02. Participation upon Re-employment........................15
Section 2.03. Enrollment..............................................15
Section 2.04. Transfer Between Classes of Employees...................15
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ARTICLE III..................................................................17
CONTRIBUTIONS.............................................................17
Section 3.01. Individual Accounts.....................................17
Section 3.02. Profit Sharing Contributions............................17
Section 3.03. Profit Sharing Contribution Allocation and
Accrual of Benefit......................................17
Section 3.04. Voluntary Employee Nondeductible Contributions..........18
Section 3.05. Time of Payment of Contribution.........................18
Section 3.06. Allocation of Forfeitures...............................18
Section 3.07. Rollover and Transfer Contributions.....................18
Section 3.08. Return of Contributions.................................19
ARTICLE IV...................................................................21
TERMINATION OF SERVICE; PARTICIPANT VESTING...............................21
Section 4.01. Vesting.................................................21
Section 4.02. Included Years of Service - Vesting.....................21
Section 4.03. Forfeiture Occurs.......................................21
Section 4.04. Cash-out Distributions to Partially-vested
Participants............................................22
Section 4.05. Restoration of Forfeited Portion of Account.............23
Section 4.06. Transfer Between Classes of Employees...................24
ARTICLE V....................................................................26
TIME AND METHOD OF PAYMENT OF BENEFITS....................................26
Section 5.01. Retirement..............................................26
Section 5.02. Distribution upon Separation from Service
Prior to Normal Retirement Age..........................26
Section 5.03. Method of Payment of Benefits upon Normal
Retirement or Separation from Service (Other
than Due to Death) - Annuity Distributions to
Certain Participants....................................29
Section 5.04. Waiver Election - Qualified Joint and Survivor
Annuity.................................................29
Section 5.05. Optional Forms of Benefit Payments......................31
Section 5.06. Distributions upon Death................................31
Section 5.07. Designation of Beneficiary..............................35
Section 5.08. Failure of Beneficiary Designation......................36
Section 5.09. Special Rules for Transfer Accounts.....................36
Section 5.10. Distributions under Domestic Relations Orders...........36
Section 5.11. Re-employment of Participants Receiving Payments........38
Section 5.12. Form of Payments........................................38
Section 5.13. Lost Participant or Beneficiary.........................38
Section 5.14. Facility of Payment.....................................38
Section 5.15. Distribution of Assets Transferred from Money
Purchase Pension Plan...................................39
Section 5.16. Written Instruction Not Required........................39
ARTICLE VI...................................................................40
WITHDRAWALS...............................................................40
Section 6.01. Special Withdrawal Rules Applicable to Transfer
Accounts................................................40
Section 6.02. Withdrawals upon Attainment of Age 59 1/2...............40
ARTICLE VII..................................................................41
EMPLOYER ADMINISTRATIVE PROVISIONS........................................41
Section 7.01. Establishment of Trust..................................41
Section 7.02. Information to Committee................................41
Section 7.03. No Liability............................................41
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Section 7.04. Indemnity of Committee..................................41
Section 7.05. Investment Funds........................................42
ARTICLE VIII.................................................................43
PARTICIPANT ADMINISTRATIVE PROVISIONS.....................................43
Section 8.01. Personal Data to Committee..............................43
Section 8.02. Address for Notification................................43
Section 8.03. Assignment or Alienation................................43
Section 8.04. Notice of Change in Terms...............................43
Section 8.05. Participant Direction of Investment.....................43
Section 8.06. Change of Investment Designations.......................44
Section 8.07. Litigation Against the Trust............................45
Section 8.08. Information Available...................................45
Section 8.09. Appeal Procedure for Denial of Benefits.................45
ARTICLE IX...................................................................47
ADMINISTRATION OF THE PLAN................................................47
Section 9.01. Allocation of Responsibility among Fiduciaries for
Plan and Trust Administration...........................47
Section 9.02. Appointment of Committee................................47
Section 9.03. Committee Procedures....................................48
Section 9.04. Records and Reports.....................................48
Section 9.05. Other Committee Powers and Duties.......................48
Section 9.07. Application and Forms for Benefits......................49
Section 9.08. Authorization of Benefit Payments.......................49
Section 9.09. Funding Policy..........................................49
Section 9.10. Fiduciary Duties........................................50
Section 9.11. Allocation or Delegation of Duties and
Responsibilities........................................50
Section 9.12. Procedure for the Allocation or Delegation of
Fiduciary Duties........................................51
Section 9.13. Separate Accounting.....................................51
Section 9.14. Value of Participant's Account..........................52
Section 9.15. Individual Statement....................................52
Section 9.16. Fees and Expenses from Fund.............................52
ARTICLE X....................................................................53
MISCELLANEOUS.............................................................53
Section 10.01. Evidence................................................53
Section 10.02. No Responsibility for Employer Action...................53
Section 10.03. Fiduciaries Not Insurers................................53
Section 10.04. Waiver of Notice........................................53
Section 10.05. Successors..............................................53
Section 10.06. Word Usage..............................................54
Section 10.07. Headings................................................54
Section 10.08. State Law...............................................54
Section 10.09. Employment Not Guaranteed...............................54
ARTICLE XI...................................................................55
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION.................................55
Section 11.01. Exclusive Benefit.......................................55
Section 11.02. Amendment by Employer...................................55
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Section 11.03. Amendment to Vesting Provisions.........................56
Section 11.04. Discontinuance..........................................56
Section 11.05. Full Vesting on Termination.............................57
Section 11.06. Merger, Direct Transfer and Elective Transfer...........57
Section 11.07. Termination.............................................58
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PCI-PR PROFIT SHARING AND RETIREMENT SAVINGS PLAN
Packaging Coordinators, Inc. hereby establishes, effective as of July
1, 1998, the PCI-PR Profit Sharing and Retirement Savings Plan (the "Plan") for
the purpose of helping its eligible employees, and those of its subsidiaries and
affiliated companies that adopt the Plan, to provide additional security for
their retirement by providing employer contributions as an incentive to enhance
their individual performance and the performance of Packaging Coordinators, Inc.
The Plan is a profit sharing plan intended to qualify under Sections
1165(a) of the Puerto Rico Internal Revenue Code of 1994 (the "Code") and the
trust forming a part thereof is intended to be exempt from taxation under Code
Section 1165(a) and Section 501(a) of the United States Internal Revenue Code of
1986, as amended.
Following the establishment of the Plan, employees of Packaging
Coordinators Incorporated, Caribe and Tri-Line Co., Inc. who were participating
in the Packaging Coordinators, Inc. Money Purchase Pension Plan and the
Packaging Coordinators, Inc. Profit Sharing Plan will have their accounts in
such plans transferred to the Plan. To the extent the accounts of employees who
were participating in the Packaging Coordinators, Inc. Money Purchase Pension
Plan and the Packaging Coordinators, Inc. Profit Sharing Plan are transferred to
or merged into the Plan, any beneficiary designation or any other applicable
agreement, elections or consents that participants, spouses, or beneficiaries
validly executed under such plans shall be honored by this Plan, to the extent
not inconsistent with this Plan and unless otherwise required by law. An
Employee whose employment with the Employer terminates prior to the Effective
Date shall be entitled to a benefit, if any, as determined under the provisions
of the Packaging Coordinators, Inc. Money Purchase Pension Plan and/or the
Packaging Coordinators, Inc. Profit Sharing Plan, as applicable, in effect on
the date his employment terminated.
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ARTICLE I
DEFINITIONS
Each word and phrase defined in this Article I shall have the following
meaning whenever such word or phrase is capitalized and used herein unless a
different meaning is clearly required by the context of this agreement.
Section 1.01. ACCOUNT . The separate bookkeeping account that the
Committee or the Trustee shall maintain for a Participant pursuant to Section
9.13 of this Plan.
Section 1.02. ACCOUNTING DATE . The last day of the Plan Year. Except
as otherwise provided herein, the Committee shall make allocations of Profit
Sharing Contributions for a particular Plan Year as of the Accounting Date of
that Plan Year.
Section 1.03. BENEFICIARY . A person, including any individual, legal
representative, estate or other entity, designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan shall remain a Beneficiary under the Plan
until the Trustee has fully distributed his benefit to him. A Beneficiary's
right to (and the Plan Administrator's, the Committee's, or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan shall not
arise until he first becomes entitled to receive a benefit under the Plan.
Section 1.04. BOARD . The board of directors of Packaging Coordinators,
Inc. or a committee thereof acting on its behalf.
Section 1.05. CODE . The Puerto Rico Internal Revenue Code of 1994, as
it may be amended from time to time.
Section 1.06. COMMITTEE . The person or persons appointed pursuant to
Article IX as the PCI-PR Profit Sharing and Retirement Savings Plan Committee,
as from time to time constituted, to assist the Employer in the administration
of the Plan in accordance with said Article.
Section 1.07. COMPANY . Packaging Coordinators, Inc., a Pennsylvania
corporation.
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Section 1.08. COMPENSATION . The Participant's wages, salaries, fees
for professional service and other amounts received for personal services
actually rendered in the course of employment with the Employer maintaining the
Plan (including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). Compensation also includes "ELECTIVE CONTRIBUTIONS"
made by the Employer on the Employee's behalf. Elective Contributions are
amounts excludible from the Employee's gross income under Code Section 1165(e).
The term "Compensation" does not include:
(i) Employer contributions (other than Elective
Contributions) to a plan of deferred compensation to
the extent the contributions are not included in the
gross income of the Employee for the taxable year in
which contributed, and any distributions from a plan
of deferred compensation, regardless of whether such
amounts are includible in the gross income of the
Employee when distributed.
(ii) Amounts realized from the exercise of a non-qualified
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.
(iii) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock
option.
(iv) Moving allowances, automobile allowances, tuition
reimbursement, financial/tax planning reimbursement,
other extraordinary compensation, including tax
"gross-up" payments, and imputed income from other
employer-provided benefits.
(v) Other amounts that receive special tax benefits, such
as premiums for group term life insurance or
contributions made by an Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract (whether or not the
contributions are excludible from the gross income of
the Employee), other than Elective Contributions.
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Any reference in this Plan to Compensation is a reference to
the definition in this Section 1.08, unless the Plan reference
specifies a modification to this definition. The Committee will take
into account only Compensation actually paid for the relevant period.
Section 1.09. DISABILITY . Means that the Employee has applied and
qualifies for disability under the Social Security Act, as amended.
Section 1.10. EFFECTIVE DATE . July 1, 1998, the date on which the
provisions of this Plan become effective, except as otherwise provided herein.
Section 1.11. ELIGIBLE EMPLOYEE . Any Employee other than an Employee
who may be excluded from participation pursuant to Code Section
1165(a)(3)(C)(ii) as a nonresident alien or as an Employee covered by a
collective bargaining agreement recognized as such under applicable Puerto Rico
law and which does not expressly provide for participation in this Plan by
Employees covered thereunder, or an Employee who is a nonresident of Puerto
Rico. An Eligible Employee may become a Participant in the Plan pursuant to the
requirements of Article II.
Section 1.12. EMPLOYEE . Any person who, on or after the Effective
Date, is receiving remuneration for personal services rendered to the Employer
as a common law employee (or who would be receiving such remuneration except for
an authorized leave of absence). The term shall not include any consultant,
independent contractor or any Leased Employee deemed to be an employee of the
Employer, nor any person employed by the Employer solely as a Director. Any
individual excluded from participation by reason of independent contractor or
Leased Employee status, if determined by the Company or in accordance with law
to be a common law employee, shall be recharacterized as an Employee under the
Plan as of the date of such determination, unless an earlier date is necessary
to preserve the tax qualified status of the Plan. Notwithstanding such general
recharacterization, such person shall not be considered an Eligible Employee for
purposes of Plan participation, except and to the extent necessary to preserve
the tax qualified status of the Plan.
Section 1.13. EMPLOYER . The Company and any Related Employer which
shall ratify and adopt this Plan in a manner satisfactory to, and with the
consent of, Packaging Coordinators, Inc., and which have adopted this Plan as
listed on the attached Appendix A. Whenever the terms of this Plan authorize the
Employer or the Company to take any action, such action shall be considered
properly authorized if taken by the Board, the Chairman of the Board, any
committee
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of the Board, or by the Committee for the Plan in accordance with its procedures
under Section 9.03 hereof.
Section 1.14. ENTRY DATE . The date as of which an Eligible Employee
satisfies the eligibility requirements of Article II. In the case of an eligible
Part-time Employee, the Entry Date occurs as of the last day of the Eligibility
Computation Period in which such Part-time Employee completes the required 1,000
Hours of Service.
Section 1.15. ERISA . The Employee Retirement Income Security Act of
1974, as amended, or as it may be amended from time to time.
Section 1.16. FORMER PARTICIPANT . A Participant who has transferred to
a classification of Employees ineligible to participate in the Plan, or a
Participant whose employment with the Employer has terminated but who has a
vested Account balance under the Plan that has not been paid in full and,
therefore, is continuing to participate in the allocation of Trust Fund Income.
Section 1.17. INCOME . The net gain or loss of the Trust Fund from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities, other investment transactions and
expenses paid from the Trust Fund. In determining the Income of the Trust Fund
as of any date, assets shall be valued on the basis of their then fair market
value.
Section 1.18. INVESTMENT MANAGER . A person or organization who is
appointed under Section 9.05 to direct the investment of all or part of the
Trust Fund, and who is either (a) registered in good standing as an Investment
Adviser under the Investment Advisers Act of 1940, (b) a bank, as defined in
that Act, or (c) an insurance company qualified to perform investment management
services under the laws of more than one state of the United States, and who has
acknowledged in writing that he is a fiduciary with respect to the Plan.
Section 1.19. LEASED EMPLOYEE . Any person (other than an Employee of
the Employer) who, pursuant to an agreement between the Employer and any other
person ("LEASING ORGANIZATION"), has performed services for the Employer (or for
the Employer and related persons) on a substantially full time basis for a
period of at least one year, which services are performed under the primary
direction or control of the Employer. Contributions or benefits provided to a
Leased Employee by the Leasing Organization that are attributable to services
performed for the Employer shall be treated as provided by the Employer. If
applicable,
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Compensation under Section 1.08 includes compensation from the Leasing
Organization which is attributable to services performed for the Employer.
A Leased Employee shall not be considered an Employee of the Employer
if: (a) such employee is covered by a money purchase pension plan providing: (i)
a nonintegrated employer contribution rate of at least ten percent of
compensation, (ii) immediate participation, and (iii) full and immediate
vesting; and (b) leased employees do not constitute more than 20% of the
Employer's nonhighly compensated workforce.
Section 1.20. NONFORFEITABLE . A Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to all or a portion
of the Participant's Account.
Section 1.21. NONFORFEITABLE ACCOUNT BALANCE . The aggregate value of
the Participant's vested Account balances whether vested before or upon death.
Section 1.22. NORMAL RETIREMENT AGE . The later of 65 years of age or
the attained age of the Participant on the fifth anniversary of the date the
Participant commenced participation in the Plan. "NORMAL RETIREMENT" means a
Participant's Separation from Service following his attainment of Normal
Retirement Age.
Section 1.23. PARTICIPANT . An Employee who is eligible to be and
becomes a Participant in accordance with the provisions of Section 2.01. An
Employee who becomes a Participant shall remain a Participant or Former
Participant under the Plan until the Trustee has fully distributed the vested
amount standing in his Account to him.
Section 1.24. PART-TIME EMPLOYEE . An Eligible Employee who is
regularly scheduled to work fewer than 20 Hours of Service per week.
Section 1.25. PLAN . The plan designated as the PCI-PR Profit Sharing
and Retirement Savings Plan as set forth herein or in any amendments hereto.
Section 1.26. PLAN ADMINISTRATOR . Cardinal Health, Inc., or the
person(s) or entity appointed by Packaging Coordinators, Inc. to serve as Plan
Administrator.
Section 1.27. PLAN YEAR . The fiscal year of the Plan, a 12 consecutive
month period commencing on July 1 and ending on June 30.
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Section 1.28. PROFIT SHARING ACCOUNT . That portion of a Participant's
Account credited with Profit Sharing Contributions under Sections 3.02 and 3.03,
and adjustments relating thereto.
Section 1.29. RELATED EMPLOYERS . A controlled group of corporations
(as defined in ERISA Section 210(c)), trades or business (whether or not
incorporated) which are under common control (as defined in ERISA Section
210(d)), or an affiliated service group. If the Employer is a member of a group
of Related Employers, the term "Employer" includes the Related Employers for
purposes of crediting Hours of Service, determining Years of Service and Breaks
in Service under Article IV, the definitions of Employee, Compensation, Leased
Employee, and Service contained in this Article I, and for any other purpose as
required by the Code or by the Plan. However, only an Employer described in
Section 1.14 may contribute to the Plan, and only an Employee employed by an
Employer described in Section 1.14 is eligible to participate in this Plan.
Section 1.30. ROLLOVER ACCOUNT . That portion of a Participant's
Account credited with Rollover Contributions under Section 3.07, and adjustments
relating thereto.
Section 1.31. SERVICE AND BREAK IN SERVICE DEFINITIONS .
A. ABSENCE FROM SERVICE. A severance or absence from service for
any reason other than a quit, discharge, retirement or death,
such as vacation, holiday, sickness, or layoff.
Notwithstanding the foregoing, an absence due to an
"AUTHORIZED LEAVE OF ABSENCE," or qualified military service
in accordance with Puerto Rico and federal law shall not
constitute an Absence from Service.
B. AUTHORIZED LEAVE OF ABSENCE. An Authorized Leave of Absence
shall mean:
(i) a leave of absence, with or without pay, granted by
the Employer in writing under a uniform,
nondiscriminatory policy applicable to all Employees;
however, such absence shall constitute an Authorized
Leave of Absence only to the extent that applicable
Puerto Rico and federal laws and regulations permit
service credit to be given for such leave of absence;
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(ii) a leave of absence due to service in the Armed Forces
of the United States to the extent required by
applicable Puerto Rico and/or federal laws; or
(iii) a leave of absence authorized under the Family and
Medical Leave Act, but only to the extent that such
Act requires that service credit be given for such
period.
C. BREAK IN SERVICE. Each 12 consecutive months in the period (i)
commencing on the earlier of (a) the date on which the
Employee quits, is discharged, retires or dies, or (b) the
first anniversary of the first day of any Absence from
Service, and (ii) ending on the date the Employee is again
credited with an Hour of Service for the performance of duties
for the Employer. If an Employee is on maternity or paternity
leave, and the absence continues beyond the first anniversary
of such absence, the Employee's Break in Service will commence
no earlier than the second anniversary of such absence. The
period between the first and second anniversaries of the first
date of a maternity or paternity leave is not part of either a
Period of Service or a Break in Service. The Committee shall
consider an Employee on maternity or paternity leave if the
Employee's absence is due to the Employee's pregnancy, the
birth of the Employee's child, the placement with the Employee
of an adopted child, or the care of the Employee's child
immediately following the child's birth or placement.
Notwithstanding the foregoing, if such maternity or paternity
leave constitutes an Authorized Leave of Absence, such leave
shall not be considered part of a Break in Service.
In the case of a Part-time Employee, however, a Break in
Service shall mean a Plan Year during which such Part-time
Employee completed fewer than 501 Hours of Service.
D. ELIGIBILITY COMPUTATION PERIOD. With respect to those Eligible
Employees who are Part-time Employees, the 12 consecutive
month period used to measure Hours of Service for purposes of
eligibility to begin and maintain participation in the Plan.
(i) "INITIAL ELIGIBILITY COMPUTATION PERIOD" shall
mean, for any such Employee, the Plan Year that
begins on or within the Initial Eligibility
Computation Period and succeeding Plan Years.
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(ii) "SUBSEQUENT ELIGIBILITY COMPUTATION PERIOD"
shall mean, for any such Employee, the Plan Year that
begins on or within the Initial Eligibility
Computation Period, and succeeding Plan Years.
E. EMPLOYMENT COMMENCEMENT DATE. The date upon which an Employee
first performs an Hour of Service for the Employer.
F. HOUR OF SERVICE. Hour of Service shall mean:
(i) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for
which the Employee is entitled to payment, for the
performance of duties during the Plan Year. The
Committee shall credit Hours of Service under this
subparagraph (i) to the Employee for the Plan Year in
which the Employee performs the duties, irrespective
of when paid;
(ii) Each Hour of Service for back pay, irrespective of
mitigation of damages, to which the Employer has
agreed or for which the Employee has received an
award. The Committee shall credit Hours of Service
under this subparagraph (ii) to the Employee for the
Plan Year(s) to which the award or the agreement
pertains rather than for the Plan Year in which the
award, agreement or payment is made; and
(iii) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for
which the Employee is entitled to payment
(irrespective of whether the employment relationship
is terminated), for reasons other than for the
performance of duties during a Plan Year, such as
leave of absence, vacation, holiday, sick leave,
illness, incapacity (including disability), layoff,
jury duty or military duty. The Committee shall not
credit more than 501 Hours of Service under this
subparagraph (iii) to an Employee on account of any
single continuous period during which the Employee
does not perform any duties (whether or not such
period occurs during a single Plan Year). The
Committee shall credit Hours of Service under this
subparagraph (iii) in accordance with the rules
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of paragraphs (b) and (c) of Labor Reg. Section
2530.200b-2, which the Plan by this reference
specifically incorporates in full within this
subparagraph (iii).
The Committee shall not credit an Hour of Service under more
than one of the subparagraphs. Furthermore, if the Committee
is to credit Hours of Service to an Employee for the 12-month
period beginning with the Employee's Employment Commencement
Date or with an anniversary of such date, then the 12-month
period shall be substituted for the term "Plan Year" wherever
the latter term appears in this section. The Committee shall
resolve any ambiguity with respect to the crediting of an Hour
of Service in favor of the Employee.
The Committee shall credit Part-time Employees with Hours of
Service on the basis of the "actual" method. For purposes of
the Plan, "actual" method means the determination of Hours of
Service from records of hours worked and hours for which the
Employer makes payment or for which payment is due from the
Employer.
Hours of Service will be credited for employment with other
members of an affiliated service group (under ERISA Section
210(c)), a controlled group of corporations (under ERISA
Section 210(c)), or a group of trades or businesses under
common control (under ERISA Section 210(d)) of which the
adopting Employer is a member.
Solely for purposes of determining whether a Part-time
Employee incurs a Break in Service under any provision of this
Plan, the Committee shall credit Hours of Service during an
Employee's unpaid absence period due to maternity or paternity
leave. The Committee shall consider an Employee on maternity
or paternity leave if the Employee's absence is due to the
Employee's pregnancy, the birth of the Employee's child, the
placement with the Employee of an adopted child, or the care
of the Employee's child immediately following the child's
birth or placement. The Committee shall credit Hours of
Service that the Part-time Employee would receive if he were
paid during the absence period, or if the Committee cannot
determine the number of Hours of Service the Part-time
Employee would receive, on the basis of eight hours per day
during the absence period. The Committee
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shall credit only the number of Hours of Service (up to 501
Hours of Service) necessary to prevent a Part-time Employee's
Break in Service. The Committee shall credit all Hours of
Service described in this paragraph to the computation period
in which the absence period begins or, if the Part-time
Employee does not need these Hours of Service to prevent a
Break in Service in the computation period in which his or her
absence period begins, the Committee shall credit these Hours
of Service to the immediately following computation period.
G. PERIOD OF SERVICE. The period of Service commencing on an
Employee's Employment Commencement Date or Re-employment
Commencement Date, whichever is applicable, and ending on the
Employee's Severance from Service Date. Notwithstanding
anything else to the contrary, a Period of Service will
include (a) any Period of Severance resulting from a quit,
discharge, or retirement if within 12 months of his Severance
from Service Date, the Employee is credited with an Hour of
Service for the performance of duties for the Employer, and
(b) any Period of Severance if the Employee quits, is
discharged, or retires during an Absence from Service of less
than 12 months and is then credited with an Hour of Service
within 12 months of the date on which the Absence from Service
began, and any other period of Service as defined in
subsection K below.
H. PERIOD OF SEVERANCE. The period commencing on any Severance
from Service Date and ending on the date an Employee is again
credited with an Hour of Service for the performance of duties
for the Employer.
I. RE-EMPLOYMENT COMMENCEMENT DATE. The date upon which an
Employee first performs an Hour of Service for the Employer
following a Break in Service.
J. SEPARATION FROM SERVICE. A separation from Service with the
Employer maintaining this Plan and any Related Employers such
that the Employee no longer has an employment relationship
with the Employer or Related Employers.
K. SERVICE. Any period of time the Employee is in the employ of
the Employer, whether before or after adoption of the Plan,
determined in accordance with reasonable and uniform standards
and policies adopted by the Plan Administrator, which
standards and policies shall be consistently observed. For
purposes of
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counting an Employee's Service, the Plan shall treat an
Employee's Service with employers who are part of a group of
Related Employers of which the Employer is a member as Service
with the Employer for the period during which the employers
are Related Employers. Service for purposes of determining
eligibility to participate and vesting may also be granted for
an Employee's Period of Service prior to the date his employer
became a Related Employer if such Service is granted in
accordance with the Code and applicable regulations. For all
Plan purposes, the Plan shall treat the following periods as
Service:
(i) any Authorized Leave of Absence, subject to the
service crediting limitations set forth in Section
1.30B;
(ii) any qualified military service in accordance with
Puerto Rico and federal law; and
(iii) any other absence during which the Participant
continues to receive his regular Compensation.
L. SEVERANCE FROM SERVICE DATE. The earlier of (i) the date on
which an Employee quits, is discharged, retires, or dies, or
(ii) the first anniversary of the first date of any Absence
from Service.
M. YEAR OF SERVICE. Each one-year Period of Service. Unless
otherwise provided in this Plan, Periods of Service which are
less than a year shall be aggregated on the basis that 12
months (30 days are deemed to be a month in the case of
aggregation of fractional months) or 365 days equal a whole
year. Notwithstanding the foregoing, a Participant (other than
a Part-time Employee) who has incurred a Separation from
Service and who has completed five or more months of Service
following the most recent anniversary of his Employment
Commencement Date (or Reemployment Commencement Date, as
applicable) shall, as of such termination of employment,
receive credit for a full Year of Service for vesting purposes
for such Period of Service.
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In the case of Part-time Employees, a Year of Service means a
12-month computation period during which the Part-time
Employee completes 1,000 or more Hours of Service.
Section 1.32. TRANSFER ACCOUNT . That portion of a Participant's
Account credited with Rollover and/or Transfer Contributions under Section 3.07,
and adjustments relating thereto.
Section 1.33. TREASURY REGULATIONS . Regulations promulgated under the
Puerto Rico Internal Revenue Code by the Secretary of the Treasury.
Section 1.34. TRUST . The Trust known as the PCI-PR Profit Sharing and
Retirement Savings Plan Trust and maintained in accordance with the terms of the
trust agreement, as from time to time amended, between Packaging Coordinators,
Inc. and the Trustee.
Section 1.35. TRUST FUND . All property of every kind held or acquired
by the Trustee under the Trust agreement other than incidental benefit insurance
contracts.
Section 1.36. TRUSTEE . Banco Santander Puerto Rico, or such other
entity or person(s) that subsequently may be appointed by Packaging
Coordinators, Inc.
Section 1.37. VALUATION DATE . Each day on which the New York Stock
Exchange is open for trading.
Section 1.38. TERMS DEFINED ELSEWHERE .
Annuity Starting Date Sections 5.02 (B) and 5.04
Cash-out Distribution Sections 4.04 and 5.02(A)
Claimant Section 8.09
Forfeiture Break in Service Section 4.04
Investment Funds Section 7.05
Preretirement Survivor Annuity Section 5.08(C)
Profit Sharing Contributions Section 3.02
Qualified Joint and Survivor Annuity Section 5.04
Rollover Contributions Section 3.07
Transfer Contributions Section 3.07
Vesting Computation Period Section 4.03
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
Section 2.01. ELIGIBILITY . Each Eligible Employee shall be eligible to
become a Participant in the Plan. Each Eligible Employee who was a Participant
in the Packaging Coordinators, Inc. Profit Sharing Plan and/or in the Packaging
Coordinators, Inc. Money Purchase Pension Plan on the day before the Effective
Date of this Plan shall continue as a Participant in this Plan. Any other
Eligible Employee who is employed by the Employer shall become a Participant
upon completion of six months of Service. Notwithstanding the foregoing, with
respect to any Eligible Employee who is a Part-time Employee, such eligible
Part-time Employee must complete a Year of Service within a single Eligibility
Computation Period in order to participate in the Plan. Each Eligible Employee
shall become a Participant in the Plan as of the Entry Date coincident with his
satisfaction of these requirements.
Section 2.02. PARTICIPATION UPON RE-EMPLOYMENT . An Eligible Employee
who had met all the requirements of Section 2.01, but terminated employment
prior to his Entry Date, shall become a Participant on the date he is
re-employed by the Employer, or his original Entry Date, if later. An Eligible
Employee who was a Participant shall again become a Participant on the date he
is re-employed by the Employer. Any Eligible Employee who terminates employment
with the Employer prior to satisfying the eligibility conditions of Section 2.01
must, upon becoming re-employed, satisfy the eligibility conditions of Section
2.01.
Section 2.03. ENROLLMENT . Prior to each Entry Date, the Committee
shall notify each Employee who is eligible to participate in the Plan and shall
explain the rights, privileges and duties of a Participant in the Plan. Each
Eligible Employee must complete a Beneficiary Designation Form on the forms
provided by the Committee prior to the applicable Entry Date, or by following
such other reasonable procedures as the Committee may implement.
Section 2.04. TRANSFER BETWEEN CLASSES OF EMPLOYEES . For purposes of
eligibility, in the case of an Eligible Employee who transfers from a Part-time
Employee classification to a class of Employees whose Service is determined on
an elapsed time basis, the Eligible Employee shall receive credit for a Period
of Service computed from his Employment or Re-employment Commencement Date, as
applicable.
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In the case of an Eligible Employee who transfers from a class of
Employees whose Service is determined on an elapsed time basis to a Part-time
Employee classification, the Eligible Employee shall receive credit for
eligibility purposes, as of the date of transfer, for a number of Hours of
Service determined by applying the equivalency set forth in Labor Reg. Section
2530.200b-3(e)(1)(i) (which credits ten Hours of Service for each day on which
the Eligible Employee would be required to be credited with one Hour of Service)
to any fractional part of a year credited to the Eligible Employee under this
Section as of the date of the transfer. Such equivalency shall apply to all
similarly situated Employees.
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ARTICLE III
CONTRIBUTIONS
Section 3.01. INDIVIDUAL ACCOUNTS . The Committee, or, if the Committee
so determines, the Trustee, shall maintain an Account for each Participant and
Former Participant having an amount to his credit in the Trust Fund. Each
Account shall be divided into separate subaccounts for "Profit Sharing
Contributions," "Rollover Contributions," if any, and "Transfer Contributions,"
if any, as defined below. If a Participant re-enters the Plan subsequent to
having a "Forfeiture Break in Service" (as defined in Section 4.02), the
Committee, or the Trustee, shall maintain a separate Account for the
Participant's pre-Forfeiture Break in Service Account and a separate Account for
his post-Forfeiture Break in Service Account, unless the Participant's entire
Account under the Plan is 100% Nonforfeitable. The Committee will make its
allocations, or request the Trustee to make its allocations, to the Accounts of
the Participants in accordance with the provisions of Section 9.13. The
Committee may direct the Trustee to maintain a temporary segregated investment
Account in the name of a Participant to prevent a distortion of income, gain, or
loss allocations under Section 9.13. The Committee shall maintain records of its
activities.
Section 3.02. PROFIT SHARING CONTRIBUTIONS . For each Plan Year, the
Employer may contribute to the Trust an amount determined by the Board from time
to time in its discretion. Such contributions will be in the form of "PROFIT
SHARING CONTRIBUTIONS." The Employer shall not make a contribution to the Trust
for any Plan Year to the extent the contribution would exceed the maximum
deduction limitations under Code Section 1023(n) and/or United States Internal
Revenue Code Section 404. All contributions are conditioned on their
deductibility under the Code.
Section 3.03. PROFIT SHARING CONTRIBUTION ALLOCATION AND ACCRUAL OF
BENEFIT .
A. METHOD OF ALLOCATION. Subject to any restoration allocation
required under Section 4.05, the Committee shall allocate and
credit to the Account of each Participant who satisfies the
conditions of Section 3.03B that percentage of each annual
Employer Profit Sharing Contribution made pursuant to Section
3.02 that is in the same proportion that each Participant's
Compensation for the Plan Year for which the Employer makes
the contribution bears to the total Compensation of all
Participants for the Plan Year.
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B. ACCRUAL OF BENEFIT. The Committee shall determine the accrual
of a Participant's benefit on the basis of the Plan Year.
While contributions may be made at other times (and therefore
credited to Accounts at such other times), the Participant's
status as of the end of the Plan Year for which the
contribution is made shall determine his entitlement to share
in an allocation of such contribution, regardless of when
credited to his Account. In allocating a Profit Sharing
Contribution to a Participant's Account, the Committee, shall
take into account only Compensation paid to the Employee
during the portion of the Plan Year during which the Employee
was a Participant. However, the Committee shall not allocate
any portion of a Profit Sharing Contribution for a Plan Year
to the Account of any Participant, if such Participant is not
employed by the Employer on the last day of that Plan Year
(for a reason other than retirement, Disability, or death).
The Plan shall suspend the accrual requirement described
herein, if the Plan fails to satisfy the requirements of Code
Section 1165(a)(3).
Section 3.04. VOLUNTARY EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS .
Participants shall not be permitted to make voluntary employee nondeductible
contributions.
Section 3.05. TIME OF PAYMENT OF CONTRIBUTION . The Employer may pay
its contribution for each Plan Year in one or more installments of cash, without
interest. The Employer must make the contribution, if any, to the Trustee within
the time prescribed (including extensions) for filing its tax return for the
taxable year for which it claims a deduction for its contribution, in accordance
with Code Section 1023(n) and/or United States Internal Revenue Code Section
404(a)(6).
Section 3.06. ALLOCATION OF FORFEITURES . Subject to any restoration
allocation required under Section 4.05, the Committee shall allocate and use the
amount of a Participant's benefit forfeited under the Plan to reduce its Profit
Sharing Contributions for the Plan Year in which the forfeiture occurs. The
Committee shall continue to hold the undistributed, nonvested portion of a
terminated Participant's benefit in his Account solely for his benefit until a
forfeiture occurs at the time specified in Section 4.03.
Section 3.07. ROLLOVER AND TRANSFER CONTRIBUTIONS . The Trustee is
authorized to accept on behalf of an Employee, and hold as part of the Trust
Fund, assets from another plan qualified
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under Code Section 1165(a), provided that such transfer satisfies any procedures
or other requirements established by the Committee. The Trustee shall also
accept and hold as part of the Trust Fund assets transferred from any other plan
qualified under Code Section 1165(a) in connection with a merger or
consolidation of such plan with or into the Plan pursuant to Section 11.06
hereof and as may be approved by the Committee. In addition, the Trustee shall
also accept "rollover" amounts contributed directly by or on behalf of an
Employee in accordance with the procedures and rules established by the
Committee in respect of a distribution made to, or on behalf of, such Employee
from another plan qualified under Code Section 1165(a) pursuant to Section 11.06
hereof. All amounts so transferred to the Trust Fund shall be held in segregated
subaccounts and shall be referred to as "TRANSFER CONTRIBUTIONS" if such amounts
are subject to the special distribution rules described in Section 5.11 and as
"ROLLOVER CONTRIBUTIONS" if not subject to such rules.
Rollover Contributions must conform to rules and procedures established
by the Committee, including rules designed to assure the Committee that the
funds so transferred qualify as a Rollover Contribution under the Code. An
Employee, prior to satisfying the Plan's eligibility conditions, may make a
Rollover Contribution to the Trust to the same extent and in the same manner as
a Participant. If an Employee makes a Rollover Contribution to the Trust prior
to satisfying the Plan's eligibility conditions, the Committee and Trustee must
treat the Employee as a Participant for all purposes of the Plan, except that
the Employee is not a Participant for purposes of sharing in Employer
contributions or Participant forfeitures under the Plan until he actually
becomes a Participant in the Plan. If the Employee has a Separation from Service
prior to becoming a Participant, the Trustee will distribute his Rollover
Contribution Account to him as if it were an Employer contribution Account.
Section 3.08. RETURN OF CONTRIBUTIONS . All contributions to the Plan
are conditioned upon their deductibility under the Code. The Trustee, upon
written request from the Employer, shall return to the Employer the amount of
the Employer's contribution made by the Employer by mistake of fact or the
amount of the Employer's contribution disallowed as a deduction under Code
Section 1023(n) and/or United States Internal Revenue Code Section 404. The
Trustee shall not return any portion of the Employer's contribution under this
provision more than one year after:
A. The Employer made the contribution by mistake of fact;
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B. Initial qualification of the Plan is denied, but only if the
application for qualification is made within the time
prescribed by law for filing the Employer's tax return for the
taxable year in which the Plan is adopted, or such later date
as the Secretary of the Treasury may prescribe; or
C. The disallowance of the contribution as a deduction, and then,
only to the extent of the disallowance.
The Trustee shall not increase the amount of the Employer contribution
returnable under this Section 3.08 for any earnings attributable to the
contribution, but the Trustee shall decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to enable
the Trustee to confirm the amount the Employer has requested be returned is
properly returnable under ERISA.
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ARTICLE IV
TERMINATION OF SERVICE; PARTICIPANT VESTING
Section 4.01. VESTING .
A. VESTING - IN GENERAL. A Participant's interest in his Rollover
Account and Transfer Account, if any, shall at all times be
fully vested and Nonforfeitable. A Participant's interest in
his Profit Sharing Account shall be fully vested and
Nonforfeitable upon and after his attaining Normal Retirement
Age (if employed by the Employer on or after that date), or if
his employment terminates as a result of death or Disability.
If a Participant's employment terminates prior to Normal
Retirement Age for any reason other than death or Disability,
then for each Year of Service, he shall receive a
Nonforfeitable percentage of his Profit Sharing Account
(forfeiting the balance) equal to the following:
Profit Sharing Account
Years of Service Percent Nonforfeitable
---------------- ----------------------
Less than three (3) 0%
At least three (3) but less than four (4) 20%
At least four (4) but less than five (5) 40%
At least five (5) but less than six (6) 60%
At least six (6) but less than seven (7) 80%
At least seven (7) or more 100%
Section 4.02. INCLUDED YEARS OF SERVICE - VESTING . For purposes of
determining Years of Service under Section 4.01, the Plan shall take into
account all Years of Service an Employee completes except any Year of Service
after the Participant first incurs a "FORFEITURE BREAK IN SERVICE." The
Participant incurs a Forfeiture Break in Service when he incurs five consecutive
Breaks in Service. This exception excluding Years of Service after a Forfeiture
Break in Service shall apply for the sole purpose of determining the
Nonforfeitable percentage of a Participant's Profit Sharing Account which
accrued for his benefit prior to the Forfeiture Break in Service. For Part-time
Employees, a Year of Service for vesting purposes shall be earned for each Plan
Year during which such Part-time Employee earns a Year of Service.
Section 4.03. FORFEITURE OCCURS . A Participant's forfeiture, if any,
of his Profit Sharing Account shall occur under the Plan:
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A. As of the Accounting Date of the Plan Year in which the
Participant first incurs a Forfeiture Break in Service, or, if
earlier and if applicable,
B. On the date the Participant receives (or is deemed to receive)
a "Cash-out Distribution," as defined in Section 4.04, of the
Nonforfeitable percentage of his Profit Sharing Account as a
result of his termination of participation in the Plan in
accordance with Section 4.04 below.
The Committee shall determine the percentage of a Participant's Profit
Sharing Account forfeiture, if any, under this Section 4.03 solely by reference
to the vesting schedule of Section 4.01. A Participant shall not forfeit any
portion of his Profit Sharing Account for any other reason or cause except as
expressly provided by this Section 4.03.
Section 4.04. CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS .
If, pursuant to Article V, a partially-vested Participant receives a "CASH-OUT
DISTRIBUTION" before he incurs a Forfeiture Break in Service, the Cash-out
Distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Account Balance derived from Employer contributions. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 4.01 is less than 100%. A Cash-out Distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Account Balance.
A "deemed" Cash-out Distribution rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Account Balance
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. If the Participant's Account is not entitled to an
allocation of Employer contributions or Participant forfeitures for the Plan
Year in which he has a Separation from Service, the Committee will apply the
deemed Cash-out Distribution rules as if the 0% vested Participant received a
Cash-out Distribution on the date of the Participant's Separation from Service.
If the Participant's Account is entitled to an allocation of Employer
contributions or Participant forfeitures for the Plan Year in which he has a
Separation from Service, the Committee will apply the deemed Cash-out
Distribution rule as if the 0% vested Participant received a Cash-out
Distribution on the first day of the first Plan Year beginning after his
Separation from Service. For purposes of applying the restoration provisions of
Section 4.05, the Committee will treat the 0% vested Participant as repaying his
Cash-out Distribution on the first date of his re-employment with the Employer.
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Section 4.05. RESTORATION OF FORFEITED PORTION OF ACCOUNT . A
Participant who is reemployed after receiving a Cash-out Distribution (or deemed
Cash-out Distribution) of the Nonforfeitable percentage of his Account shall
have the right to repay the Trustee in cash the entire amount of the Cash-out
Distribution he received, if the Committee must restore his Account under the
requirements of this Section 4.05.
A. RESTORATION AND CONDITIONS UPON RESTORATION. Subject to the
conditions of this paragraph, if the Participant makes the
Cash-out Distribution repayment, the Committee shall restore
his Account attributable to Employer contributions to the same
dollar amount as the dollar amount of such portion of his
Account on the Accounting Date, or other Valuation Date,
immediately preceding the date of the Cash-out Distribution
(or deemed Cash-out Distribution), unadjusted for any gains or
losses occurring subsequent to that Accounting Date, or other
Valuation Date. Notwithstanding such repayment, the Committee
shall not restore a re-employed Participant's Account under
the immediately preceding sentence if:
(i) The Participant's Account was 100% Nonforfeitable at
the time of the Cash-out Distribution; or
(ii) The Participant incurred a Forfeiture Break in
Service. This condition shall apply only if repayment
is not made before the earlier of five years after
the first date on which the Participant is
re-employed by the Employer, or the close of the
first period of five consecutive Breaks in Service
commencing after the Cash-out Distribution.
B. TIME AND METHOD OF RESTORATION. If neither of the two
conditions preventing restoration of the Participant's Account
applies, the Committee shall restore the Participant's Account
as of the Plan Year Accounting Date coincident with or
immediately following the repayment. To restore the
Participant's Account, the Committee, to the extent necessary,
shall allocate to the Participant's Account:
(i) First, the amount, if any, of Participant forfeitures
the Committee would otherwise allocate under Section
3.06; and
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(ii) Second, the Employer contribution for the Plan Year
to the extent made under a discretionary formula.
To the extent the amount(s) available for restoration for a
particular Plan Year are insufficient to enable the Committee
to make the required restoration, the Employer shall
contribute, without regard to any requirement or condition of
Section 3.03, such additional amount as is necessary to enable
the Committee to make the required restoration. If, for a
particular Plan Year, the Committee must restore the Account
of more than one re-employed Participant, then the Committee
shall make the restoration allocation(s) to each such
Participant's Account in the same proportion that a
Participant's restored amount for the Plan Year bears to the
restored amount for the Plan Year of all re-employed
Participants.
C. SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Committee
restores the Participant's Account, the Trustee shall, at the
direction of the Company or the Committee, invest the amount
the Participant has repaid in a segregated Account maintained
solely for that Participant. The Trustee shall invest the
amount in the Participant's segregated Account in federally
insured interest-bearing savings account(s), time deposit(s),
or similar investments, including a money market or similar
fund currently offered as an investment option under the
Trust. Until commingled with the balance of the Trust Fund on
the date the Committee restores the Participant's Account, the
Participant's segregated Account shall remain a part of the
Trust, but it alone shall share in any income it earns and it
alone shall bear any expense or loss it incurs. The Company or
the Committee shall direct the Trustee to repay to the
Participant as soon as is administratively practicable the
full amount of the Participant's segregated Account if the
Committee determines one or more of the conditions of
subparagraph A of this Section 4.05 prevents restoration as of
the applicable Accounting Date, notwithstanding the
Participant's repayment.
Section 4.06. TRANSFER BETWEEN CLASSES OF EMPLOYEES . For purposes of
vesting, in the case of an Employee who transfers from a Part-time Employee
classification to a class of Employees whose Service is determined on an elapsed
time basis, the Employee shall receive credit for a Period of Service consisting
of (a) a number of years equal to the number of Years of
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Service credited to the Employee before the Plan Year during which the transfer
occurs, and (b) the greater of (i) the Period of Service that would be credited
to the Employee under the elapsed time method for his Service during the entire
Plan Year in which the transfer occurs or (ii) the Service taken into account
under the hours counting method as of the date of the transfer. In addition, the
Employee shall receive credit for Service subsequent to the transfer commencing
on the day after the last day of the Plan Year in which the transfer occurs.
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ARTICLE V
TIME AND METHOD OF PAYMENT OF BENEFITS
Section 5.01. RETIREMENT . Upon termination of a Participant's
employment for any reason after attaining Normal Retirement Age, the Company or
the Committee shall direct the Trustee to commence payment of the Participant's
Account to him (or to his Beneficiary if the Participant is deceased), in
accordance with the provisions of this Article V, as soon as administratively
practicable but not later than 60 days after the close of the Plan Year in which
the Participant's employment terminates. The form of payment shall be the same
as for other Separation from Service distributions, as set forth in Section 5.02
and Sections 5.03, 5.04 and 5.05. A Participant who remains in the employ of the
Employer after attaining Normal Retirement Age shall continue to participate in
Employer contributions.
Section 5.02. DISTRIBUTION UPON SEPARATION FROM SERVICE PRIOR TO NORMAL
RETIREMENT AGE . Upon a Participant's Separation from Service prior to attaining
Normal Retirement Age (for any reason other than death), the Committee, subject
to the requirements of this Section 5.02, shall direct the Trustee to commence
payment to the Participant of the value of his Nonforfeitable Account Balance as
provided in this Section 5.02. The following rules and definitions shall apply
to any such distribution:
A. "CASH-OUT DISTRIBUTION." A Cash-out Distribution is a lump sum
distribution of the Participant's Nonforfeitable Account
Balance.
B. CONSENT. The Participant must consent in writing to the
Committee's direction to the Trustee to make a distribution to
the Participant and to the form of the distribution if: (i)
the Participant's Nonforfeitable Account Balance on the date
the distribution commences exceeds $5,000, and (ii) the
Committee directs the Trustee to make a distribution to the
Participant prior to his attaining the later of Normal
Retirement Age or age 62. Furthermore, the Participant's
spouse must consent in writing to the distribution if: (i) the
Committee must obtain the Participant's consent; and (ii) the
qualified joint and survivor annuity provisions of ERISA
Section 205 apply to the distribution.
The consent of the Participant, and the Participant's spouse,
if applicable, shall be obtained in writing within the 90-day
period ending on the "ANNUITY STARTING
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DATE." The Annuity Starting Date is the first day of the first
period for which an amount is paid as an annuity or in any
other form. The Plan Administrator shall notify the
Participant and the Participant's spouse of the right to defer
any distribution until the Participant's Nonforfeitable
Account Balance is no longer immediately distributable. Such
notification shall include a general description of the
material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in
a manner that would satisfy the notice requirements of ERISA
Section 205(c), and shall be provided no less than 30 days and
no more than 90 days prior to the Annuity Starting Date.
However, if the Participant, after having received this
notice, affirmatively elects a distribution, such distribution
may commence less than 30 days after the notice was provided.
Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a
qualified joint and survivor annuity while the Account balance
is immediately distributable. (Furthermore, if payment in the
form of a qualified joint and survivor annuity is not required
with respect to the Participant pursuant to ERISA Section 205,
only the Participant need consent to the distribution of an
Account balance that is immediately distributable.) An Account
balance is immediately distributable if any part of the
Account balance could be distributed to the Participant (or
the surviving spouse) before the Participant attains, or would
have attained if not deceased, the later of Normal Retirement
Age or age 62.
C. TIME OF DISTRIBUTION OF ACCOUNT BALANCE. Upon Separation from
Service, other than for death, before Normal Retirement Age,
the Trustee shall, subject to the foregoing consent
requirements, distribute the Participant's Account balance as
follows:
(i) If the Participant's Nonforfeitable Account Balance
on the date the distribution commences is $5,000 or
less, the Trustee shall pay such Nonforfeitable
Account Balance to the Participant in the form of a
single, lump sum Cash-out Distribution as soon as
administratively practicable after the Participant's
Separation from Service.
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(ii) If the Participant's Nonforfeitable Account Balance
on the date the distribution commences is greater
than $5,000, the Trustee shall pay such
Nonforfeitable Account Balance in the form of a
qualified joint and survivor annuity in accordance
with Section 5.03, unless the Participant makes a
valid waiver election under Section 5.04 and elects
an alternative form of distribution. The distribution
shall be made as soon as administratively practicable
after the close of the Plan Year within which the
Participant's Separation from Service occurred,
unless the Participant (and his spouse, if
applicable) do not consent to such immediate
distribution. Notwithstanding the foregoing,
distributions in the form of a qualified joint and
survivor annuity shall not apply to any Employee who
becomes a Participant on or after July 1, 1998.
Distributions in the form of a qualified joint and
survivor annuity will only apply to those
Participants who previously participated in the
Packaging Coordinators, Inc. Money Purchase Pension
Plan or the Packaging Coordinators, Inc. Profit
Sharing Plan, and whose Account under such plan was
merged into the Plan effective July 1, 1998.
D. DEFERRAL OF DISTRIBUTION OF ACCOUNT BALANCE UNTIL NORMAL
RETIREMENT AGE. If the Participant (and, if applicable, the
Participant's spouse) does not file his written consent (if
required) with the Trustee within the reasonable period of
time stated in the consent form, the Trustee shall continue to
hold the Participant's Account in trust until the close of the
Plan Year in which the Participant attains Normal Retirement
Age. At that time, the Trustee shall commence payment of the
Participant's Nonforfeitable value of his Account in
accordance with the provisions of this Article V; provided,
however, if the Participant dies after terminating employment
but prior to attaining Normal Retirement Age, the Committee,
upon notice of the death, shall direct the Trustee to commence
payment of the Participant's Nonforfeitable value of his
Account to his Beneficiary in accordance with the provisions
of Section 5.06.
A Participant who has elected to delay receiving a
distribution of his Account may elect to receive a
distribution of his Nonforfeitable Account Balance as soon as
administratively practicable following any subsequent
Valuation Date by properly completing the appropriate
distribution forms or procedures. If no such election is
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made, the Participant's Nonforfeitable Account Balance shall
be paid as provided in Section 5.01.
Section 5.03. METHOD OF PAYMENT OF BENEFITS UPON NORMAL RETIREMENT OR
SEPARATION FROM SERVICE (OTHER THAN DUE TO DEATH) - ANNUITY DISTRIBUTIONS TO
CERTAIN PARTICIPANTS . The provisions of this Section and Section 5.04 shall
apply only to those Employees who participated in the Packaging Coordinators,
Inc. Money Purchase Pension Plan or the Packaging Coordinators, Inc. Profit
Sharing Plan prior to July 1, 1998, the Company or the Committee shall direct
the Trustee to distribute the Nonforfeitable Account Balance of a Participant to
whom this Section applies in the form of a "QUALIFIED JOINT AND SURVIVOR
ANNUITY," unless the Participant makes a valid waiver election (described in
Section 5.04) within the 90-day period ending on the "ANNUITY STARTING DATE."
The Annuity Starting Date means the first day of the first period for which an
amount is payable as an annuity or, in the case of a benefit not payable in the
form of an annuity, the first day on which all events have occurred that entitle
the Participant to such benefit. A Qualified Joint and Survivor Annuity is an
immediate annuity that is purchasable from a commercial insurer with the
Participant's Nonforfeitable Account Balance and which is payable for the life
of the Participant with, if the Participant is married on the Annuity Starting
Date, a survivor annuity for the life of the Participant's surviving spouse
equal to 50% of the amount of the annuity payable during the joint lives of the
Participant and his spouse. The Company or the Committee shall direct the
Trustee to pay the Participant's Nonforfeitable Account Balance in a lump sum,
in lieu of a Qualified Joint and Survivor Annuity, if the Participant's
Nonforfeitable Account Balance at the time the distribution commences is not
greater than $5,000.
If the Participant has in effect a valid waiver election regarding the
Qualified Joint and Survivor Annuity, the Company or the Committee shall direct
the Trustee to distribute the Participant's Nonforfeitable Account Balance in
accordance with Section 5.05. For purposes of applying this Article V, the
Committee shall treat a former spouse as the Participant's spouse or surviving
spouse to the extent provided under a qualified domestic relations order (as
defined in ERISA Section 206(d)).
Section 5.04. WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY .
With respect only to those Employees subject to Section 5.03, the Committee
shall, no less than 30 days (or seven days, if the 30-day period is waived by
the Participant and the Participant's spouse, if applicable), nor more than 90
days before the Participant's Annuity Starting Date, provide the Participant a
written explanation of the terms and conditions of the Qualified Joint and
Survivor Annuity, the
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Participant's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Annuity form of benefit, the rights of the
Participant's spouse regarding the waiver election, and the Participant's right
to make, and the effect of, a revocation of a waiver election.
A married Participant's waiver election is not valid unless:
A. The Participant's spouse (to whom the survivor annuity is
payable under the Qualified Joint and Survivor Annuity) has
consented in writing to the waiver election, the spouse's
consent acknowledges the effect of the election, and a notary
public or a member of the Committee (or its representative)
witnesses the spouse's consent; and
B. If the spouse is not the Participant's sole primary
Beneficiary, the spouse consents to the Participant's
Beneficiary designation or to any change in the Participant's
Beneficiary designation, or the spouse expressly permits
designations by the Participant without any further spousal
consent.
A Participant's waiver of the Qualified Joint and Survivor Annuity form
of benefit shall not be effective unless the election designates a form of
benefit payment that may not be changed without spousal consent (or the spouse
expressly permits designations by the Participant without any further spousal
consent). Any consent by a spouse obtained under this provision or establishment
that the consent of a spouse may not be obtained shall be effective only with
respect to such spouse. A consent that permits designations by the Participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse at any
time before the commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid unless the
Participant has received notice as provided in this Section 5.04. The spouse's
consent to a waiver of the Qualified Joint and Survivor Annuity is irrevocable
unless the Participant revokes the waiver election.
The Committee may accept as valid a waiver election that does not
satisfy the spousal consent requirements if the Committee establishes the
Participant does not have a spouse, the
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Committee is not able to locate the Participant's spouse, or other circumstances
exist under ERISA which will excuse the consent requirement.
Section 5.05. OPTIONAL FORMS OF BENEFIT PAYMENTS . Subject to Sections
5.03 and 5.04, if applicable, a Participant may elect to receive payment of the
Participant's Nonforfeitable Account Balance under one of the following methods:
A. By payment in a single lump sum in cash based upon the value
of the Account on the Valuation Date coinciding with or
immediately preceding the date the distribution is requested.
B. By payment in substantially equal monthly or quarterly
installments over a fixed reasonable period of time, not
exceeding (i) the life expectancy of the Participant, or (ii)
the joint life and last survivor expectancy of the Participant
and an individual the Participant designates as his
Beneficiary.
To facilitate installment payments under this Section 5.05, the
Committee, in its sole discretion, may direct the Trustee to segregate all or
any part of the Participant's Account in a separate account. A segregated
account shall remain a part of the Trust, but it alone shall share in any income
it earns, and it alone shall bear any expense or loss it incurs.
Section 5.06. DISTRIBUTIONS UPON DEATH . Upon the death of the
Participant, the Company or the Committee shall direct the Trustee to pay the
Participant's Nonforfeitable Account Balance in accordance with this Section
5.06.
A. DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant's
death occurs after the Trustee has commenced payment of the
Participant's Nonforfeitable Account Balance, the Company or
the Committee shall direct the Trustee to complete payment
over a period that does not exceed the payment period that had
commenced.
B. DISTRIBUTION BEGINNING AFTER DEATH OF EMPLOYEES WHO BECOME
PARTICIPANTS ON OR AFTER JULY 1, 1998. With respect to those
Employees who begin participating in the Plan on or after July
1, 1998, if the Participant's death occurs prior to his
Annuity Starting Date, the distribution of the Participant's
entire Nonforfeitable
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Account Balance shall be made to the Participant's Beneficiary
in a single lump sum payment or in installments over no more
than five years, as elected by the Beneficiary.
The Company or the Committee shall direct the Trustee to
distribute the Participant's Nonforfeitable Account Balance to
the Participant's Beneficiary as soon as practicable after
notification of the Participant's death. However, if the
Participant's Nonforfeitable Account Balance at the time of
distribution exceeds $5,000, neither the Company nor the
Committee shall direct the Trustee to distribute the Account
to the Participant's Beneficiary prior to the date the
Participant would have attained the later of Normal Retirement
Age or age 62, without written consent of the Beneficiary if
the Beneficiary is the Participant's surviving spouse. If the
Beneficiary is not the Participant's surviving spouse, the
Beneficiary must elect to have distribution of the entire
amount payable completed on or before the last day of the
calendar year which contains the fifth anniversary of the date
of the Participant's death.
C. DISTRIBUTION BEGINNING AFTER DEATH OF CERTAIN EMPLOYEES
PARTICIPATING IN THE PACKAGING COORDINATORS, INC. MONEY
PURCHASE PENSION AND PROFIT SHARING PLANS PRIOR TO JULY 1,
1998. This subsection C and the following subsections D, E and
F, shall apply only to those Employees who participated in the
Packaging Coordinators, Inc. Money Purchase Pension Plan or
the Packaging Coordinators, Inc. Profit Sharing Plan prior to
July 1, 1998. If a married Participant dies prior to his
Annuity Starting Date, the Company or the Committee shall
direct the Trustee to distribute the married Participant's
Nonforfeitable Account Balance to the Participant's surviving
spouse as a "PRERETIREMENT SURVIVOR ANNUITY," unless the
Participant has made a valid waiver election pursuant to
subsection D. An unmarried Participant's Nonforfeitable
Account Balance shall be payable to his designated
Beneficiary.
The Preretirement Survivor Annuity is an annuity payable to
the Participant's surviving spouse for life. The Participant's
Nonforfeitable Account Balance shall be applied to the
purchase of an annuity for the surviving spouse's life. The
surviving spouse may elect to have such annuity distributed
within a reasonable period after the Participant's death.
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Notwithstanding the foregoing, if the Participant's
Nonforfeitable Account Balance at the time the distribution
commences is not greater than $5,000, the Participant's
Nonforfeitable Account Balance shall be paid in a single lump
sum to the Participant's surviving spouse or other Beneficiary
in lieu of a Preretirement Survivor Annuity as soon as
administratively practicable after his death.
If the Participant is unmarried or has waived the
Preretirement Survivor Annuity in accordance with subsection
D, and dies before distribution of his Nonforfeitable Account
Balance begins, distribution of the Participant's entire
Nonforfeitable Account Balance shall be made in a single lump
sum payment in cash or in equal or nearly equal quarterly
installments over a fixed period not exceeding (i) if the
Beneficiary is the deceased Participant's surviving spouse,
the Beneficiary's remaining life expectancy at the time
installment payments begin, or (ii) if the Beneficiary is
other than the deceased Participant's surviving spouse, five
years from the Participant's death.
If the designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin shall not
be earlier than December 31 of the calendar year immediately
following the calendar year in which the Participant died. If
the Beneficiary is not the Participant's surviving spouse,
distribution of the entire amount payable must be completed on
or before the last day of the calendar year which contains the
fifth anniversary of the date of the Participant's death.
A Participant also may elect the form and timing of payment of
his Nonforfeitable Account Balance to his Beneficiaries. If
the Participant has not made an election concerning the manner
of payment to his Beneficiary by the time of his death, the
Participant's surviving spouse or designated Beneficiary must
elect the method of distribution no later than the time when
distributions would be required to begin under this subsection
C. If the Participant has no surviving spouse or designated
Beneficiary, or if the designated Beneficiary does not elect a
method of distribution, distribution of the Participant's
entire Nonforfeitable Account Balance must be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
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D. WAIVER ELECTION FOR MARRIED PARTICIPANTS. The Committee shall
provide a written explanation of the Preretirement Survivor
Annuity to each married Participant to whom this subsection
applies, within whichever of the following periods ends last:
(i) the period beginning on the first day of the Plan Year in
which the Participant attains age 32 and ending on the last
day of the Plan Year in which the Participant attains age 34;
(ii) a reasonable period after an Employee becomes a
Participant; (iii) a reasonable period after the joint and
survivor rules become applicable to the Participant; or (iv) a
reasonable period after a fully subsidized Preretirement
Survivor Annuity no longer satisfies the requirements for a
fully subsidized benefit. A reasonable period described in
clauses (ii), (iii) and (iv) is the period beginning one year
before and ending one year after the applicable event. If the
Participant separates from Service before attaining age 35,
clauses (i), (ii), (iii) and (iv) do not apply and the
Committee shall provide the written explanation within the
period beginning one year before and ending one year after the
Separation from Service. The written explanation shall
describe, in a manner consistent with Treasury Regulations,
the terms and conditions of the Preretirement Survivor Annuity
in a manner which is comparable to the explanation of the
Qualified Joint and Survivor Annuity required under Section
5.04. The Plan does not limit the number of times the
Participant may revoke a waiver of the Preretirement Survivor
Annuity or make a new waiver during the election period.
A Participant's waiver election of the Preretirement Survivor
Annuity is not valid unless (a) the Participant makes the
waiver election no earlier than the first day of the Plan Year
in which he attains age 35, and (b) the Participant's spouse
(to whom the Preretirement Survivor Annuity is payable)
satisfies the consent requirements described in this Article
V, except the spouse need not consent to the form of benefit
payable to the designated Beneficiary. The spouse's consent to
the waiver of the Preretirement Survivor Annuity is
irrevocable, unless the Participant revokes the waiver
election.
Notwithstanding the time of election requirement of clause (a)
above, a Participant who will not yet attain age 35 as of the
end of any current Plan Year may make a special qualified
election to waive the Preretirement Survivor Annuity for the
period beginning on the date of such election and ending on
the first day of the Plan Year in which the Participant will
attain age 35. Such election will not be
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valid unless the Participant receives a written explanation of
the Preretirement Survivor Annuity in a manner which is
comparable to the explanation required under Section 5.04.
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after such
date shall be subject to the full requirements of this Section
5.06.
E. For purposes of this Section 5.06, any amount paid to a child
of the Participant will be treated as if it had been paid to
the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
F. The Committee shall use the life expectancy multiples under
United States Internal Revenue Code Regulation Section 1.72-9
for purposes of applying this Section. The Committee may
recalculate the life expectancy of the Participant's surviving
spouse not more frequently than annually, but may not
recalculate the life expectancy of a nonspouse designated
Beneficiary after the Trustee commences payment to the
designated Beneficiary.
Section 5.07. DESIGNATION OF BENEFICIARY . A Participant may from time
to time designate, in writing, a Beneficiary or Beneficiaries, contingently or
successively, to whom the Trustee shall pay his Account in the event of his
death. A Participant's Beneficiary designation shall not be valid unless the
Participant's spouse consents (in accordance with the requirements of ERISA
Section 205) to the Beneficiary designation. A Participant's Beneficiary
designation does not require spousal consent if the Participant's spouse is the
Participant's designated Beneficiary. The Committee shall prescribe the form for
the written designation of Beneficiary and, upon the Participant's filing the
form with the Committee, the Participant shall effectively revoke all
designations filed prior to that date by the same Participant.
Section 5.08. FAILURE OF BENEFICIARY DESIGNATION . If a Participant
fails to name a Beneficiary in accordance with Section 5.07, or if the
Beneficiary named by a Participant predeceases him, then the Trustee shall pay
the Participant's Account in a single lump sum to the Participant's surviving
spouse, if any, and if there is no surviving spouse, to the Participant's
estate.
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If the Beneficiary survives the Participant but dies before complete
distribution of the Participant's Account, the remaining portion of the
Participant's Account shall be paid in a lump sum to any contingent
Beneficiaries named by the Participant or, if there are none, to the legal
representative of the estate of such deceased Beneficiary. The Company or the
Committee shall direct the Trustee as to the method and to whom the Trustee
shall make payment under this Section 5.08.
Section 5.09. SPECIAL RULES FOR TRANSFER ACCOUNTS . Notwithstanding any
provision of this Article V to the contrary, with respect to any Participant who
has one or more Transfer Accounts consisting in whole or in part of Transfer
Contributions which, by operation of relevant law and regulation (including, but
not limited to, ERISA and the Code), must be distributed or made available under
the same terms and conditions under which amounts held thereunder were
previously held (prior to their becoming Transfer Contributions), the Committee
shall, upon the written request of the Participant (in the case of optional
forms of benefit), cause the Trustee to distribute or make available such
Transfer Contributions at such times and in such manner as may be so required.
Section 5.10. DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS . Nothing
contained in this Plan shall prevent the Trustee, in accordance with the
direction of the Committee, from complying with the provisions of a qualified
domestic relations order (as defined in ERISA Section 206(d)). This Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age (as defined under ERISA Section 206(d))
under the Plan. A distribution to an alternate payee prior to the Participant's
attainment of the earliest retirement age is available only if the order
specifies distribution at that time or permits an agreement between the Plan and
the alternate payee to authorize such an earlier distribution. In addition, if
the present value of the alternate payee's benefits under the Plan exceeds
$5,000, and the order requires, the alternate payee must consent to any
distribution occurring prior to the Participant's attainment of the earliest
retirement age. Nothing in this Section 5.10 gives a Participant the right to
receive a distribution at a time not permitted under the Plan, nor does this
Section 5.10 give the alternate payee the right to receive a form of payment not
permitted under the Plan.
The Committee shall establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Committee promptly shall notify the Participant and any
alternate payee named in the order, in writing, of the receipt of
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the order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Committee shall determine the qualified status of the order and shall
notify the Participant and each alternate payee, in writing, of its
determination. The Committee shall provide notice under this paragraph by
mailing to the individual's address specified in the domestic relations order,
or in a manner consistent with Labor Regulations.
If any portion of the Participant's Nonforfeitable Account Balance is
payable during the period the Committee is making its determination of the
qualified status of the domestic relations order, the Company or the Committee
shall direct the Trustee to segregate the amounts payable in a separate account
and to invest the segregated account solely in fixed income investments or to
maintain a separate bookkeeping account of said amounts. If the Committee
determines the order is a qualified domestic relations order within 18 months of
the first date on which payments were due under the terms of the order, the
Company or the Committee shall direct the Trustee to distribute the separate
account in accordance with the order. If the Committee does not make its
determination of the qualified status of the order within the above-described
18-month period, the Company or the Committee shall direct the Trustee to
distribute the segregated account in the manner the Plan would distribute it if
the order did not exist, and shall apply the order prospectively if the
Committee later determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Committee may direct the Trustee to
invest any partitioned amount in a segregated subaccount or separate account and
to invest the account in the money market investment option, or in other fixed
income investments. A segregated subaccount shall remain a part of the Trust,
but it alone shall share in any income it earns, and it alone shall bear any
expense or loss it incurs.
The Trustee shall make any payment or distributions required under this
Section 5.10 by separate benefit checks or other separate distribution to the
alternate payee(s).
Section 5.11. RE-EMPLOYMENT OF PARTICIPANTS RECEIVING PAYMENTS . In the
event that a Participant who is receiving installment payments is re-employed by
the Company, such Participant shall continue to receive payments from his
Account in accordance with the method of payment in effect prior to his
re-employment unless such method is changed. Payments shall be drawn from his
entire Account, including any contributions allocated to his Account after his
re-employment.
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Section 5.12. FORM OF PAYMENTS . Lump-sum and installment payments will
be made in cash. If a Participant or Beneficiary elects an annuity form of
distribution, a nontransferable annuity contract shall be purchased from a
commercial insurer with the Participant's Nonforfeitable Account Balance and
distributed to the Participant or Beneficiary.
Section 5.13. LOST PARTICIPANT OR BENEFICIARY . The Account of a
Participant shall be forfeited if the Committee, after reasonable effort, is
unable to locate the Participant or his Beneficiary to whom payment is due. The
amount of the forfeiture shall reduce the Employer's Profit Sharing
Contributions under Section 3.02. However, any such forfeited Account will be
reinstated and become payable if a claim is made by the Participant or
Beneficiary for such Account. The Committee shall prescribe uniform and
non-discriminatory rules for carrying out this provision.
Section 5.14. FACILITY OF PAYMENT . If the Committee deems any person
entitled to receive any amount under the provisions of this Plan incapable of
receiving or disbursing the same by reason of minority, illness or infirmity,
mental incompetency, or incapacity of any kind, the Committee may, in its
discretion, direct the Trustee to take any one or more of the following actions:
A. To apply such amount directly for the comfort, support and
maintenance of such person;
B. To reimburse any person for any such support theretofore
supplied to the person entitled to receive any such payment;
C. To pay such amount to any person selected by the Committee to
disburse it for such comfort, support and maintenance,
including without limitation, any relative who has undertaken,
wholly or partially, the expense of such person's comfort,
care and maintenance, or any institution in whose care or
custody the person entitled to the amount may be. The
Committee may, in its discretion, deposit any amount due to a
minor to his credit in any savings or commercial bank of the
Committee's choice.
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Section 5.15. DISTRIBUTION OF ASSETS TRANSFERRED FROM MONEY PURCHASE
PENSION PLAN . Notwithstanding any provision of the Plan to the contrary, to the
extent that any optional form of benefit under the Plan permits a distribution
prior to the employee's retirement, death, Disability, or severance from
employment, and prior to Plan termination, the optional form of benefit is not
available with respect to benefits attributable to assets (including the
post-transfer earnings thereon) and liabilities that are transferred to this
Plan from a money purchase pension plan qualified under Section 1165(a) of the
Code (other than any portion of those assets and liabilities attributable to
voluntary employee contributions). The conversion of a plan from a money
purchase plan to a profit sharing plan shall be treated as a transfer for the
purpose of this Section.
Section 5.16. WRITTEN INSTRUCTION NOT REQUIRED . Any elections made or
distributions processed under this Article V may be accomplished through
telephonic or similar instructions in accordance with the rules and procedures
established by the Committee, to the extent they are consistent with the
requirements of the Code and ERISA. Notwithstanding the foregoing, however,
spousal consents and waivers, to the extent required, may only be granted in
writing.
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ARTICLE VI
WITHDRAWALS
Section 6.01. SPECIAL WITHDRAWAL RULES APPLICABLE TO TRANSFER ACCOUNTS.
Notwithstanding any other Plan provision to the contrary, if the Puerto Rico
Treasury Department requires distribution to be made (or offered) with respect
to any or all amounts held on behalf of a Participant with respect to a
predecessor or transferor plan, as a condition of preserving the tax-qualified
status of this Plan or of said predecessor or transferor plan, or if a court of
competent jurisdiction issues an order or decree in respect of the Plan or its
fiduciaries which is determined under relevant Puerto Rico and/or federal law to
be enforceable, and which compels the distribution of a Participant's Plan
interest, the Committee will be entitled to direct the prompt distribution (or
offer of distribution) of such amounts.
Section 6.02. WITHDRAWALS UPON ATTAINMENT OF AGE 59 1/2 . Subject to
the consent requirements of Article V, if applicable, a Participant who has
attained age 59 1/2 may elect to make withdrawals from the Nonforfeitable
portion of his Account in the Plan that is not subject to the restrictions set
forth in Section 5.15. Any election to begin, change or cease withdrawals shall
be made in accordance with procedures established by the Committee or in such
other manner as permitted by the Committee. Payment of amounts so requested
shall be made within an administratively reasonable time after the withdrawal
has been requested. The Committee may establish other rules of uniform
applicability regarding the timing of and procedures for such withdrawals.
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ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
Section 7.01. ESTABLISHMENT OF TRUST . The Company shall execute a
Trust Agreement with one or more persons or parties who shall serve as the
Trustee. The Trustee so selected shall serve as the Trustee until otherwise
replaced or said Trust Agreement is terminated. The Company may from time to
time enter into such further agreements with the Trustee or other parties and
make such amendments to said Trust Agreement as it may deem necessary or
desirable to carry out this Plan. Any and all rights or benefits which may
accrue to a person under this Plan shall be subject to all the terms and
provisions of the Trust Agreement.
Section 7.02. INFORMATION TO COMMITTEE . Each Employer shall supply
current information to the Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service, and date
of termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan, together with any other information that
the Committee considers necessary. The Employer's records as to the current
information the Employer furnishes to the Committee shall be conclusive as to
all persons.
Section 7.03. NO LIABILITY . The Employer assumes no obligation or
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act, on the part of its Committee or the Trustee.
Section 7.04. INDEMNITY OF COMMITTEE . Each Employer indemnifies and
saves harmless the members of the Committee, and each of them, from and against
any and all loss (including reasonable attorneys' fees and costs of defense)
resulting from liability to which the Committee, or the members of the
Committee, may be subjected by reason of any act or conduct (except willful
misconduct or gross negligence) in their official capacities in the
administration of the Trust or this Plan or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide such
defense. The indemnification provisions of this Section 7.04 shall not relieve
any Committee member from any liability he may have under ERISA for breach of a
fiduciary duty to the extent such indemnification is prohibited by ERISA.
Furthermore, the Committee members and the Employer may execute a letter
agreement further delineating the indemnification agreement of this Section
7.04, provided the letter agreement must be consistent with and shall not
violate ERISA.
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Section 7.05. INVESTMENT FUNDS . The Committee and the Trustee shall
establish certain investment funds (the "INVESTMENT FUNDS"), rules governing the
administration of the Investment Funds, and procedures for directing the
investment of Participant Accounts among the Investment Funds. The Trustee shall
invest and reinvest the principal and income of each Account in the Trust Fund
as required by ERISA and as directed by Participants. The Committee and the
Employer reserve the right to change the investment options available under the
Plan and the rules governing investment designations at any time and from time
to time.
Each Investment Fund shall be established by the Trustee at the
direction or with the concurrence of the Committee. Investment Funds may, as so
determined, consist of preferred and common stocks, bonds, debentures,
negotiable instruments and evidences of indebtedness of every kind and form, or
in securities and units of participation issued by companies registered under
the Investment Companies Act of 1940, master limited partnerships or real estate
investment trusts, or in any common or collective fund established or maintained
for the collective investment and reinvestment of assets of pension and profit
sharing trusts which are exempt from federal income taxation under the Code, or
any combination of the foregoing. The Trustee shall hold, manage, administer,
invest, reinvest, account for and otherwise deal with the Trust Fund and each
separate Investment Fund as provided in the Trust Agreement.
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ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
Section 8.01. PERSONAL DATA TO COMMITTEE . Each Participant and each
Beneficiary of a deceased Participant must furnish to the Committee such
evidence, data or information as the Committee considers necessary or desirable
for the purpose of administering the Plan. The provisions of this Plan are
effective for the benefit of each Participant upon the condition precedent that
each Participant will furnish promptly full, true and complete evidence, data
and information when requested by the Committee, provided the Committee shall
advise each Participant of the effect of his failure to comply with its request.
Section 8.02. ADDRESS FOR NOTIFICATION . Each Participant and each
Beneficiary of a deceased Participant shall file with the Committee from time to
time in writing, or otherwise notify the Committee (in accordance with its rules
and procedures) of, his post office address and any change of post office
address. Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Committee, or as
shown on the records of the Employer, shall bind the Participant, or
Beneficiary, for all purposes of this Plan.
Section 8.03. ASSIGNMENT OR ALIENATION . Subject to ERISA Section
206(d) relating to qualified domestic relations orders, neither a Participant
nor a Beneficiary shall anticipate, assign or alienate (either at law or in
equity) any benefit provided under the Plan, and the Trustee shall not recognize
any such anticipation, assignment or alienation. Furthermore, a benefit under
the Plan is not subject to attachment, garnishment, levy, execution or other
legal or equitable process.
Section 8.04. NOTICE OF CHANGE IN TERMS . The Employer, within the time
prescribed by ERISA and the applicable regulations, shall furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
Section 8.05. PARTICIPANT DIRECTION OF INVESTMENT . The Committee and
the Trustee shall establish rules governing the administration of Investment
Funds and procedures for Participant direction of investment, including rules
governing the timing, frequency and manner of making investment elections. The
Committee and the Employer reserve the right to change the investment options
available under the Plan and rules governing investment designations from
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time to time. Nothing in this or any provision of the Plan shall require the
Trustee, the Employer, or the Committee to implement Participant investment
directions or changes in such directions, or to establish any procedures other
than on an administratively practicable basis, as determined by the Employer in
its discretion.
Each Participant shall, in accordance with procedures established by
the Committee and the Trustee, direct that his Account and contributions thereto
be invested and reinvested in any one or more of the Investment Funds. The
investment of any such monies shall be subject to such restrictions as the
Committee may determine, in its sole discretion, to be advisable or necessary
under the circumstances. Moreover, in accordance with procedures established by
the Trustee and agreed to by the Plan Administrator, Participants may, when
administratively practicable, be permitted to change their current and
prospective investment designations through telephone, "on-line" or similar
instructions to the Trustee or its authorized agent on a frequency established
under such procedures, as in effect from time to time.
The exercise of investment direction by a Participant will not cause
the Participant to be a fiduciary solely by reason of such exercise, and neither
the Trustee nor any other fiduciary of this Plan will be liable for any loss or
any breach that results from the exercise of investment direction by the
Participant. The investment designation procedures established under the Plan
shall be and are intended to be in compliance with the requirements of ERISA
Section 404(c) and the regulations thereunder.
Section 8.06. CHANGE OF INVESTMENT DESIGNATIONS . Each Participant who
is entitled to direct the investment of additional contributions to be allocated
to his Account in accordance with Section 8.05 hereof may select how such
additional contributions are to be invested. Such investment directions shall be
made in accordance with applicable rules or procedures established by the
Trustee and the Plan Administrator.
Each Participant may prospectively re-elect how those amounts then held
in his Account are to be reinvested in the various Investment Funds until
otherwise changed or modified. Such investment directions shall be made in
accordance with applicable rules or procedures established by the Trustee and
the Plan Administrator.
Notwithstanding the foregoing to the contrary, the Committee may, in
its sole discretion and where the terms of any relevant investment contracts,
regulated investment companies or
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pooled or group trusts so require, impose special terms, conditions and
restrictions upon a Participant's right to direct the investment in, or transfer
into or out of, such contracts, companies or trusts.
Section 8.07. LITIGATION AGAINST THE TRUST . If any legal action filed
against the Trustee, the Employer as Plan Administrator, or the Committee, or
against any member or members of the Committee, by or on behalf of any
Participant or Beneficiary, results adversely to the Participant or to the
Beneficiary, the Trustee shall reimburse itself, the Employer or the Committee,
or any member or members of the Committee, all costs and fees expended by it or
them by surcharging all costs and fees against the sums payable under the Plan
to the Participant or to the Beneficiary, but only to the extent a court of
competent jurisdiction specifically authorizes and directs any such surcharges
and only to the extent ERISA Section 206(d) does not prohibit any such
surcharges.
Section 8.08. INFORMATION AVAILABLE . Any Participant in the Plan or
any Beneficiary may examine copies of the Plan, the Trust, the Plan description,
the latest annual report, any bargaining agreement, contract or any other
instrument under which the Plan was established or is operated. The Company will
maintain all of the items listed in this Section 8.08 in its offices, or in such
other place or places as it may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary, the
Employer shall furnish him with a copy of any item listed in this Section 8.08.
The Employer may make a reasonable charge to the requesting person for the copy
so furnished.
Section 8.09. APPEAL PROCEDURE FOR DENIAL OF BENEFITS . The Employer
shall provide adequate notice in writing to any Participant or to any
Beneficiary (the "Claimant") whose claim for benefits under the Plan the
Committee has denied. The Employer's notice to the Claimant shall set forth:
A. The specific reason for the denial;
B. Specific references to pertinent Plan provisions on which the
Committee based its denial;
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C. A description of any additional material and information
needed for the Claimant to perfect his claim and an
explanation of why the material or information is needed; and
D. That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Committee within 90
days after receipt of the Employer's notice of denial of
benefits. The Employer's notice must further advise the
Claimant that his failure to appeal the action to the
Committee in writing within the 90-day period will render the
Committee's determination final, binding and conclusive.
If the Claimant should appeal to the Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments
he, or his duly authorized representative, feels are pertinent. The Claimant, or
his duly authorized representative, may review pertinent Plan documents. The
Committee shall re-examine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Committee shall advise the Claimant of its decision within 60
days of the Claimant's written request for review, unless special circumstances
(such as a hearing) would make the rendering of a decision within the 60-day
limit unfeasible, but in no event shall the Committee render a decision
respecting a denial for a claim for benefits later than 120 days after its
receipt of a request for review.
The Employer's notice of denial of benefits shall identify the name of
each member of the Committee and the name and address of the Committee member to
whom the Claimant may forward his appeal.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
Section 9.01. ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN
AND TRUST ADMINISTRATION . The fiduciaries shall have only those powers, duties,
responsibilities and obligations as are specifically given them under this Plan
and the Trust. The Employer shall have the sole responsibility for making the
contributions provided for under Article III. The Company shall have the sole
authority to appoint and remove the Trustee and members of the Committee, and to
amend or terminate, in whole or in part, the Plan or the Trust. The Company
shall have the final responsibility for administration of the Plan, which
responsibility is specifically described in this Plan and the Trust, and shall
be the "Plan Administrator" and the named fiduciary. The Committee shall have
the specific delegated powers and duties described in the further provisions of
this Article IX and such further powers and duties as hereinafter may be
delegated to it by the Employer. The Trustee shall have the sole responsibility
for the administration of the Trust and the management of the assets held under
the Trust, all as specifically provided in the Trust. Each fiduciary warrants
that any directions given, information furnished, or action taken by it shall be
in accordance with the provisions of this Plan and the Trust, authorizing or
providing for such direction, information or action. Furthermore, each fiduciary
may rely upon any such direction, information or action of another fiduciary as
being proper under this Plan and the Trust, and is not required under this Plan
or the Trust to inquire into the propriety of any such direction, information or
action. It is intended under this Plan and the Trust that each fiduciary shall
be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under this Plan and the Trust and shall not be
responsible for any act or failure to act of another fiduciary. No fiduciary
guarantees the Trust Fund in any manner against investment loss or depreciation
in asset value.
Section 9.02. APPOINTMENT OF COMMITTEE . A Committee consisting of
three or more persons shall be appointed by and serve at the pleasure of the
Board to assist in the administration of the Plan. In the event of any vacancies
on the Committee, the remaining Committee member(s) then in office shall
constitute the Committee and shall have full power to act and exercise all
powers of the Committee as described in this Article IX. All usual and
reasonable expenses of the Committee may be paid in whole or in part by the
Employer, and any expenses not paid by the Employer shall be paid by the Trustee
out of the principal or income of the Trust Fund. Any members of the Committee
who are Employees shall not receive compensation with respect to their services
for the Committee.
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Section 9.03. COMMITTEE PROCEDURES . The Committee may act at a meeting
or in writing without a meeting. The Committee may elect one of its members as
chairperson, appoint a secretary, who may or may not be a Committee member, and
advise the Trustee of all relevant actions. The secretary shall keep a record of
all meetings and forward all necessary communications to the Employer, or the
Trustee, as appropriate. The Committee may adopt such bylaws and regulations as
it deems desirable for the conduct of its affairs. All decisions of the
Committee shall be made by the vote of the majority then in office, including
actions in writing taken without a meeting. A dissenting Committee member who,
within a reasonable time after he has knowledge of any action or failure to act
by the majority, registers his dissent in writing delivered to the other
Committee members, the Employer and the Trustee, shall not be responsible for
any such action or failure to act.
Section 9.04. RECORDS AND REPORTS . The Employer (or the Committee if
so designated by the Employer) shall exercise such authority and responsibility
as it deems appropriate in order to comply with ERISA and governmental
regulations issued thereunder relating to records of Participant's Service,
Account balances and the percentage of such Account balances that are
Nonforfeitable under the Plan; notifications to Participants; annual filings
with the Puerto Rico Treasury Department; and annual reports to the Department
of Labor.
Section 9.05. OTHER COMMITTEE POWERS AND DUTIES . The Committee shall
have the following powers and duties:
A. To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Account,
and the Nonforfeitable percentage of each Participant's
Account;
B. To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan, provided the
rules are not inconsistent with the terms of this Plan and the
Trust;
C. To construe and enforce the terms of the Plan and the rules
and regulations it adopts, including the discretionary
authority to interpret the Plan documents and documents
related to the Plan's operation;
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D. To direct the Trustee with respect to the crediting and
distribution of the Trust;
E. To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
F. To furnish the Employer with information that the Employer may
require for tax or other purposes;
G. To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties; and
H. To engage the services of an Investment Manager or Investment
Managers (as defined in ERISA Section 3(38)), each of whom
shall have full power and authority to manage, acquire or
dispose (or direct the Trustee with respect to acquisition or
disposition) of any Plan asset under its control.
Section 9.06. RULES AND DECISIONS. The Committee may adopt such rules
as it deems necessary, desirable or appropriate. All rules and decisions of the
Committee shall be uniformly and consistently applied to all Participants in
similar circumstances. When making a determination or calculation, the Committee
shall be entitled to rely upon information furnished by a Participant or
Beneficiary, the Employer, the legal counsel of the Employer, or the Trustee.
Section 9.07. APPLICATION AND FORMS FOR BENEFITS . The Committee may
require a Participant or Beneficiary to complete and file with the Committee an
application for a benefit and all other forms approved by the Committee, and to
furnish all pertinent information requested by the Committee. The Committee may
rely upon all such information so furnished to it, including the Participant's
or Beneficiary's current mailing address.
Section 9.08. AUTHORIZATION OF BENEFIT PAYMENTS . The Committee shall
issue directions to the Trustee concerning all benefits that are to be paid from
the Trust Fund pursuant to the provisions of the Plan, or establish other
procedures on which the Trustee may act, and warrants that all such directions
are in accordance with this Plan.
Section 9.09. FUNDING POLICY . The Committee shall from time to time
review all pertinent Employee information and Plan data in order to establish
the funding policy of the Plan
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and to determine the appropriate methods of carrying out the Plan's objectives.
The Committee shall communicate periodically, as it deems appropriate, to the
Trustee and to any Plan Investment Manager, the Plan's short-term and long-term
financial needs so that investment policy can be coordinated with Plan financial
requirements.
Section 9.10. FIDUCIARY DUTIES . In performing their duties, all
fiduciaries with respect to the Plan shall act solely in the interest of the
Participants and their Beneficiaries, and:
A. For the exclusive purpose of providing benefits to the
Participants and their Beneficiaries;
B. With the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in
like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims;
C. To the extent a fiduciary possesses and exercises investment
responsibilities, by diversifying the investments of the Trust
Fund so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so; and
D. In accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent
with the provisions of Title I of ERISA.
Section 9.11. ALLOCATION OR DELEGATION OF DUTIES AND RESPONSIBILITIES .
In furtherance of their duties and responsibilities under the Plan, the
Committee and the Board may, subject always to the requirements of Section 9.10:
A. Employ agents to carry out nonfiduciary responsibilities;
B. Employ agents to carry out fiduciary responsibilities (other
than trustee responsibilities as defined in Section 405(c)(3)
of ERISA);
C. Consult with counsel, who may be of counsel to the Company;
and
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D. Provide for the allocation of fiduciary responsibilities
(other than trustee responsibilities as defined in Section
405(c)(3) of ERISA) between the members of the Board, in the
case of the Board, and among the members of the Committee, in
the case of the Committee.
Section 9.12. PROCEDURE FOR THE ALLOCATION OR DELEGATION OF FIDUCIARY
DUTIES . Any action described in subsections B or D of Section 9.11 may be taken
by the Committee or the Board only in accordance with the following procedure:
A. Such action shall be taken by a majority of the Committee or
by the Board, as the case may be, in a resolution approved by
a majority of such Committee or by a majority of the Board.
B. The vote cast by each member of the Committee or the Board for
or against the adoption of such resolution shall be recorded
and made a part of the written record of the Committee's or
the Board proceedings.
C. Any delegation of fiduciary responsibilities or any allocation
of fiduciary responsibilities among members of the Committee
or the Board may be modified or rescinded by the Committee or
the Board according to the procedure set forth in subsections
A and B of this Section 9.12.
Section 9.13. SEPARATE ACCOUNTING . The amounts in a Participant's
Profit Sharing Account, Rollover Account and Transfer Account(s), if any, shall
be separately accounted for. Amounts credited to such subaccounts shall be
allocated among the Participant's designated investments on a reasonable pro
rata basis, in accordance with the valuation procedures of the Trustee and the
Investment Funds. The Trustee and the Committee shall also establish uniform
procedures which they may change from time to time, for the purpose of adjusting
the subaccounts of a Participant's Account for withdrawals, distributions and
contributions. Gains, losses, withdrawals, distributions, forfeitures and other
credits or charges may be separately allocated among such subaccounts on a
reasonable and consistent basis in accordance with such procedures.
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Section 9.14. VALUE OF PARTICIPANT'S ACCOUNT . The value of each
Participant's Account shall be based on its fair market value on the appropriate
Valuation Date. A valuation shall occur at least once every Plan Year, and
otherwise in accordance with the terms of the Trust and administratively
practicable procedures approved by the Committee. Periodically, on a frequency
determined by the Committee and the Trustee, the Participant will receive a
statement showing the transaction activity and value of his Account as of a date
set forth in the statement.
Section 9.15. INDIVIDUAL STATEMENT . As soon as practicable after the
Accounting Date of each Plan Year, but within the time prescribed by ERISA and
the regulations under ERISA, and at such other times as determined by the
Committee in its discretion, the Committee will deliver to each Participant (and
to each Beneficiary of a deceased Participant) a statement reflecting the
condition of his Account in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Committee and its designees, shall have the right to
inspect the records reflecting the Account of any other Participant.
Section 9.16. FEES AND EXPENSES FROM FUND . The Trustee shall receive
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee. The Trustee shall pay all expenses reasonably
incurred by it or by the Employer, the Committee, or other professional advisers
or administrators in the administration of the Plan from the Trust Fund unless
the Employer pays the expenses. The Committee shall not treat any fee or expense
paid, directly or indirectly, by the Employer as an Employer contribution. No
person who is receiving full pay from the Employer shall receive compensation
for services from the Trust Fund. Brokerage commissions, transfer taxes, and
other charges and expenses in connection with the purchase and sale of
securities shall be charged to each Investment Fund and/or Participant's
Account, as applicable. Fees related to investments subject to Participant
direction, and other fees resulting from or attributable to expenses incurred in
relation to a Participant or Beneficiary or his Account may be charged to his
Account to the extent permitted under the Code and ERISA.
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ARTICLE X
MISCELLANEOUS
Section 10.01. EVIDENCE . Anyone required to give evidence under the
terms of the Plan may do so by certificate, affidavit, document or other
information that the person to act in reliance may consider pertinent, reliable
and genuine, and to have been signed, made or presented by the proper party or
parties. Both the Committee and the Trustee shall be fully protected in acting
and relying upon any evidence described under the immediately preceding
sentence.
Section 10.02. NO RESPONSIBILITY FOR EMPLOYER ACTION . Neither the
Trustee nor the Committee shall have any obligation or responsibility with
respect to any action required by the Plan to be taken by the Employer, any
Participant or eligible Employee, nor for the failure of any of the above
persons to act or make any payment or contribution, or to otherwise provide any
benefit contemplated under this Plan, nor shall the Trustee or the Committee be
required to collect any contribution required under the Plan, or determine the
correctness of the amount of any Employer contribution. Neither the Trustee nor
the Committee need inquire into or be responsible for any action or failure to
act on the part of the others. Any action required of a corporate Employer shall
be by its Board or its designee.
Section 10.03. FIDUCIARIES NOT INSURERS . The Trustee, the Committee,
the Plan Administrator and the Employer in no way guarantee the Trust Fund from
loss or depreciation. The Employer does not guarantee the payment of any money
that may be or becomes due to any person from the Trust Fund. The liability of
the Committee and the Trustee to make any payment from the Trust Fund at any
time and all times is limited to the then available assets of the Trust.
Section 10.04. WAIVER OF NOTICE . Any person entitled to notice under
the Plan may waive the notice, unless the Code or Treasury Regulations require
the notice, or ERISA specifically or impliedly prohibits such a waiver.
Section 10.05. SUCCESSORS . The Plan shall be binding upon all persons
entitled to benefits under the Plan, their respective heirs and legal
representatives, upon the Employer, its successors and assigns, and upon the
Trustee, the Committee, the Plan Administrator and their successors.
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Section 10.06. WORD USAGE . Words used in the masculine shall apply to
the feminine where applicable, and wherever the context of the Plan dictates,
the plural shall be read as singular and the singular as the plural.
Section 10.07. HEADINGS . The headings are for reference only. In the
event of a conflict between a heading and the content of a section, the content
of the section shall control.
Section 10.08. STATE LAW . Ohio law shall determine all questions
arising with respect to the provisions of this agreement, except to the extent a
federal statute supersedes Ohio law.
Section 10.09. EMPLOYMENT NOT GUARANTEED . Nothing contained in this
Plan, and nothing with respect to the establishment of the Trust, any
modification or amendment to the Plan or the Trust, the creation of any Account,
or the payment of any benefit, shall give any Employee, Employee-Participant or
Beneficiary any right to continue employment, or any legal or equitable right
against the Employer, or an Employee of the Employer, the Trustee or its agents
or employees, or the Plan Administrator. Nothing in the Plan shall be deemed or
construed to impair or affect in any manner the right of the Employer, in its
discretion, to hire Employees and, with or without cause, to discharge or
terminate the service of Employees.
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ARTICLE XI
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
Section 11.01. EXCLUSIVE BENEFIT . Except as provided under Article
III, the Employer shall have no beneficial interest in any asset of the Trust
and no part of any asset in the Trust shall ever revert to or be repaid to the
Employer, either directly or indirectly; nor prior to the satisfaction of all
liabilities with respect to the Participants and their Beneficiaries under the
Plan, shall any part of the corpus or income of the Trust Fund, or any asset of
the Trust, be (at any time) used for, or diverted to, purposes other than the
exclusive benefit of the Participants or their Beneficiaries.
Section 11.02. AMENDMENT BY EMPLOYER . The Company shall have the right
at any time and from time to time:
A. To amend this agreement in any manner it deems necessary or
advisable in order to qualify (or maintain qualification of)
this Plan and the Trust created under it under the appropriate
provisions of the Code; and
B. To amend this agreement in any other manner.
However, no amendment shall authorize or permit any part of
the Trust Fund (other than the part required to pay taxes and administration
expenses) to be used for or diverted to purposes other than for the exclusive
benefit of the Participants or their Beneficiaries or estates. No amendment
shall cause or permit any portion of the Trust Fund to revert to or become a
property of the Employer; and the Company shall not make any amendment that
affects the rights, duties or responsibilities of the Plan Administrator or the
Committee without the written consent of the affected Plan Administrator or the
affected member of the Committee. Furthermore, no amendment shall decrease a
Participant's Account balance or accrued benefit or reduce or eliminate any
benefits protected under United States Internal Revenue Code Section 411(d)(6),
including an optional form of distribution, with respect to a Participant with
an Account balance or accrued benefit at the date of the amendment, except to
the extent otherwise permitted by applicable law.
The Company shall make all amendments in writing. Amendments shall be
considered properly authorized by the Company, if approved or ratified by the
Board, any committee of the Board, or by the Committee unless the subject of the
amendment has been reserved to the Board.
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Each amendment shall state the date to which it is either retroactively or
prospectively effective, and may be executed by any authorized officer of the
Company.
Section 11.03. AMENDMENT TO VESTING PROVISIONS . Although the Company
reserves the right to amend the vesting provisions at any time, the Committee
shall not apply an amended vesting schedule to reduce the Nonforfeitable
percentage of any Participant's Account derived from Employer contributions
(determined as of the later of the date the Company adopts the amendment, or the
date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Company makes a permissible amendment to the vesting provisions,
each Participant having at least three Years of Service for vesting purposes
with the Employer may elect to have the percentage of his Nonforfeitable Account
Balance computed under the Plan without regard to the amendment. The Participant
must file his election with the Employer within 60 days of the latest of (a) the
Company's adoption of the amendment; (b) the effective date of the amendment; or
(c) his receipt of a copy of the amendment. The Committee, as soon as
practicable, shall forward a true copy of any amendment to the vesting schedule
to each affected Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. The election described in
this Section 11.03 does not apply to a Participant if the amended vesting
schedule provides for vesting that is at least as rapid at all times as the
vesting schedule in effect prior to the amendment. For purposes of this Section
11.03, an amendment to the vesting schedule includes any amendment that directly
or indirectly affects the computation of the Nonforfeitable percentage of an
Employee's rights to his Employer-derived Account.
Section 11.04. DISCONTINUANCE . The Employer shall have the right, at
any time, to suspend or discontinue its contributions under the Plan, and the
Company shall have the right to terminate, at any time, this Plan and the Trust
created under this agreement. The Plan shall terminate upon the first to occur
of the following:
A. The date terminated by action of the Company.
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B. The date the Employer shall be judicially declared bankrupt or
insolvent.
C. The dissolution, merger, consolidation or reorganization of
the Employer or the sale by the Employer of all or
substantially all of its assets, unless the successor or
purchaser makes provision to continue the Plan, in which event
the successor or purchaser shall substitute itself as the
Employer under this Plan.
Section 11.05. FULL VESTING ON TERMINATION . Notwithstanding any other
provision of this Plan to the contrary, upon either full or partial termination
of the Plan, or, if applicable, upon the date of complete discontinuance of
contributions to the Plan, an affected Participant's right to his Account shall
be 100% Nonforfeitable.
Section 11.06. MERGER, DIRECT TRANSFER AND ELECTIVE TRANSFER . The
Trustee shall not consent to, or be a party to, any merger or consolidation with
another plan, or to a transfer of assets or liabilities to another plan, unless
immediately after the merger, consolidation or transfer, the surviving plan
provides each Participant a benefit equal to or greater than the benefit each
Participant would have received had the Plan terminated immediately before the
merger or consolidation or transfer. The Trustee possesses the specific
authority to enter into merger agreements or direct transfer of assets
agreements with the trustees of other retirement plans described in Code Section
1165(a) and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement, only upon the consent or direction of
the Employer or the Committee.
If permitted by the Employer or the Committee in its discretion, the
Trustee may accept a direct transfer of plan assets on behalf of an Employee
prior to the date the Employee satisfies the Plan's eligibility condition(s). If
the Trustee accepts such a direct transfer of plan assets, the Committee and the
Trustee shall treat the Employee as a Participant for all purposes of the Plan
except that the Employee shall not share in Employer contributions or
Participant forfeitures under the Plan until he actually becomes a Participant
in the Plan. The Trustee shall hold, administer and distribute the transferred
assets as a part of the Trust Fund, and the Trustee shall maintain a separate
Transfer Account for the benefit of the Employee on whose behalf the Trustee
accepted the transfer in order to reflect the value of the transferred assets.
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The Trustee may not consent to, or be a party to, a merger,
consolidation or transfer of assets with a defined benefit plan, except with
respect to an elective transfer, unless the Committee consents and so directs,
and the transfer is consistent with the Code and with ERISA. The Trustee will
hold, administer and distribute the transferred assets as a part of the Trust
Fund and the Trustee shall maintain a separate Transfer Account for the benefit
of the Employee on whose behalf the Trustee accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to this
Plan is an elective transfer, the Plan will preserve all United States Internal
Revenue Code Section 411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 11.02.
A transfer is an elective transfer if: (a) the transfer satisfies the
first paragraph of this Section 11.06; (b) the transfer is voluntary, under a
fully informed election by the Participant; (c) the Participant has an
alternative that retains his United States Internal Revenue Code Section
411(d)(6) protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (d) the transfer satisfies
the applicable spousal consent requirements of the Code; (e) the transferor plan
satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (f) the
Participant has a right to immediate distribution from the transferor plan, in
lieu of the elective transfer; (g) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor plan for which
the Participant is eligible or the present value of the Participant's accrued
benefit under the transferor plan payable at that plan's normal retirement age;
(h) the Participant has a 100% Nonforfeitable interest in the transferred
benefit; and (i) the transfer otherwise satisfies applicable Treasury
Regulations. An elective transfer may occur between qualified plans of any type.
If the Plan receives a direct transfer (by merger or otherwise) of
elective contributions (or amounts treated as elective contributions) under a
plan with a Code Section 1165(e) arrangement, the distribution restrictions of
Code Section 1165(e)(2) continue to apply to those transferred elective
contributions.
Section 11.07. TERMINATION . Upon termination of the Plan, the
distribution provisions of Article IV and Article V shall remain operative,
except that:
A. If the present value of the Participant's Nonforfeitable
Account does not exceed $5,000, the Committee will direct the
Trustee to distribute the Participant's
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Nonforfeitable Account to him in a lump sum as soon as
administratively practicable after the Plan terminates; and
B. If the present value of the Participant's Nonforfeitable
Account exceeds $5,000, the Participant or the Beneficiary, in
addition to the distribution events permitted under Articles
IV and V, may elect to have the Trustee commence distribution
of his Nonforfeitable Account as soon as administratively
practicable after the Plan terminates.
The Trust shall continue until the Trustee, after written direction
from the Committee, has distributed all of the benefits under the Plan. To
liquidate the Trust, the Committee will, to the extent required, purchase a
deferred annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Account
exceeds $5,000 and the Participant does not elect an immediate distribution
pursuant to this Section 11.07.
The Employer has executed this Plan in Dublin, Ohio on the date set
forth below.
PACKAGING COORDINATORS, INC.
BY: /s/ CAROLE TOMKO
-------------------------
ITS: CORPORATE VICE PRESIDENT
------------------------
DATE: JUNE 30, 1999
-----------------------
58
64
PAGE
APPENDIX A
----------
PARTICIPATING EMPLOYERS
Packaging Coordinators, Inc.
Packaging Coordinators Incorporated, Caribe
Tri-Line Co., Inc.
59
65
FIRST AMENDMENT
TO THE
PCI-PR PROFIT SHARING AND RETIREMENT
SAVINGS PLAN
(EFFECTIVE AS OF JULY 1, 1998)
BACKGROUND INFORMATION
A. The Corporation maintains a profit sharing plan known as the PCI-PR
Profit Sharing Retirement Savings Plan (the "Plan") for the benefit of
its employees and their beneficiaries.
B. Pursuant to Section 11.02 of the Plan, the Corporation may amend the
Plan at any time.
C. The Corporation desires to amend the Plan to revise the eligibility
requirements for employees of the Corporation who are hired on and
after July 1, 1999.
D. The sole director of the Corporation has authorized this amendment to
the Plan pursuant to an Action in Writing by the Sole Director of
Packaging Coordinators, Inc.
AMENDMENT TO THE PLAN
1. Effective as of July 1, 1999, Section 2.01 of the Plan shall
be amended in its entirety to read as follows:
Section 2.01. ELIGIBILITY. Each Eligible Employee shall be
eligible to become a Participant in the Plan. Each Eligible
Employee who was a Participant in the Packaging Coordinators,
Inc. Profit Sharing Plan and/or in the Packaging Coordinators,
Inc. Money Purchase Pension Plan on the day before the
Effective Date of this Plan shall continue as a Participant in
this Plan. Any other Eligible Employee who is employed by the
Employer on and after July 1, 1999, shall become a Participant
upon completion of 180 days of Service; provided, however,
that an Eligible Employee who is employed by the Employer
prior to July 1, 1999, shall become a Participant upon
completion of six months of Service. Notwithstanding the
foregoing, with respect to any Eligible Employee who is
Part-time Employee, such eligible Part-time Employee must
complete a Year of Service within a single Eligibility
Computation Period in order to participate in the Plan. Each
Eligible Employee shall become a Participant in the Plan as of
the entry date coinciding with his satisfaction of these
requirements.
2. All other provisions of the Plan shall remain in full force
and effect.
66
SECOND AMENDMENT
TO THE
PCI-PR PROFIT SHARING AND RETIREMENT SAVINGS PLAN
(EFFECTIVE AS OF JULY 1, 1998)
BACKGROUND INFORMATION
A. Packaging Coordinators, Inc. (the "Company") maintains a profit sharing
plan known as the PCI-PR Profit Sharing and Retirement Savings Plan
(the "Plan") for the benefit of its employees and their beneficiaries
who are residents of Puerto Rico.
B. Pursuant to Section 11.02 of the Plan, the Company may amend the Plan
at any time.
C. The Company desires to amend the Plan to add a cash or deferred
arrangement to the Plan in accordance with Section 1165(e) of the
Puerto Rico Internal Revenue Code of 1994, as amended, (the "Code") and
a provision for discretionary matching contributions.
D. The Company desires to change the name of the Plan to reflect the
coverage of employees at additional Puerto Rican entities and include
Allegiance PRO Inc. as a Participating Employer in the Plan.
E. The sole director of the Company has authorized this amendment to the
Plan pursuant to an Action in Writing by the Sole Director of Packaging
Coordinators, Inc.
F. All provisions in this Second Amendment shall be effective as of
January 1, 2000, unless another date is specified herein.
AMENDMENT TO THE PLAN
1. The name of the Plan shall be changed to "Cardinal Health, Inc. Profit
Sharing & Retirement Savings Plan for Employees of Puerto Rico."
2. A new Section is hereby added to Article I of the Plan immediately
following the definition of "Compensation" and immediately preceding
the definition of "Disability," with all sections thereafter
sequentially renumbered, to read as follows:
Section 1.09. COMPENSATION DEFERRAL ACCOUNT. The portion of a
Participant's Account credited with Compensation Deferral Contributions under
Section 3.09 of the Plan, and adjustments relating thereto.
67
3. A new Section is hereby added to Article I of the Plan immediately
following the definition of "Former Participant" and immediately
preceding the definition of "Income," with all section thereafter
sequentially renumbered, to read as follows:
Section 1.18. HIGHLY COMPENSATED EMPLOYEE. For purpose of the
limitations on Compensation Deferral Contributions set forth in Section 3.14 of
the Plan, an Employee who is more highly compensated than two-thirds (2/3rds) of
all Employees eligible to make Compensation Deferral Contributions under the
Plan.
4. A new Section is hereby added to Article I of the Plan immediately
following the definition of "Leased Employee" and immediately preceding
the definition of "Nonforfeitable," to read as follows:
Section 1.22. MATCHING ACCOUNT. The portion of a Participant's Account
credited with Matching Contributions pursuant to Section 3.11, and adjustments
relating thereto.
5. A new Section is hereby added to Article I of the Plan immediately
following the definition of "Nonforfeitable Account Balance" and
immediately preceding the definition of "Normal Retirement Age," to
read as follows:
Section 1.25. NON-HIGHLY COMPENSATED EMPLOYEE. Any Eligible Employee
who has reached his Entry Date and who is not a Highly Compensated Employee.
6. Section 1.38 of the Plan entitled "Terms Defined Elsewhere" is hereby
amended by the addition of the following terms and corresponding Plan
sections inserted in their proper alphabetical order:
Actual Deferral Percentage Section 3.14A
Compensation Deferral Contribution Section 3.09
7. Section 2.01 of the Plan is hereby amended in its entirety to read as
follows:
Section 2.01. ELIGIBILITY. Each Eligible Employee shall be eligible to
become a Participant in the Plan. Each Eligible Employee who was a Participant
in the Packaging Coordinators, Inc. Profit Sharing Plan and/or in the Packaging
Coordinators, Inc. Money Purchase Pension Plan on the day before the Effective
Date of this Plan shall continue as a Participant in this Plan. Eligible
Employees of a Participating Employer identified in Appendix A shall become
Participants in the Plan as of the date of participation specified therein, or,
if no date is specified, in accordance with the general provisions of this
Section. Any other Eligible Employee who is employed by the Employer on and
after July 1, 1999, shall become a Participant upon completion of 180 days of
Service; provided, however, that an Eligible Employee who is employed by the
Employer prior to July 1, 1999, shall become a Participant upon completion of
six months of Service. Notwithstanding the foregoing, with respect to any
Eligible Employee who is Part-time Employee, such eligible Part-time Employee
must complete a Year of Service within a single Eligibility Computation Period
in order to participate in the
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68
Plan. Each Eligible Employee shall become a Participant in the Plan as of the
entry date coinciding with his satisfaction of these requirements.
8. Section 2.03 of the Plan is hereby amended in its entirety to read as
follows:
Section 2.03. ENROLLMENT. Prior to each Entry Date, the Committee shall
notify each Employee who is eligible to open a Compensation Deferral Account and
shall explain the rights, privileges and duties of a Participant in the Plan.
Each Eligible Employee may enroll as a Participant in the Compensation Deferral
portion of the Plan at any time on or after his Entry Date, by properly
completing the enrollment procedures established at the time by the Committee,
or by following such other reasonable procedures as the Committee may implement.
The Committee may establish rules and procedures governing the time and manner
in which enrollments shall be processed. Eligible Employees shall participate in
the profit sharing portion of the Plan upon their eligibility to share in Profit
Sharing Contributions or Special Contributions in accordance with reasonable
enrollment procedures established by the Committee. Each Eligible Employee must
complete a Beneficiary Designation Form on the forms provided by the Committee
prior to the applicable Entry Date, or by following such other reasonable
procedures as the Committee may implement.
9. Section 3.02 is hereby amended in its entirety to read as follows:
Section 3.02. PROFIT SHARING CONTRIBUTIONS. For each Plan Year, the
Employer may contribute to the Trust an amount determined by the Board from time
to time in its discretion. Such contributions will be in the form of "PROFIT
SHARING CONTRIBUTIONS." The amount contributed in any year may vary, in the
Employer's discretion, among the Participating Employers, and the discretionary
amounts so contributed shall be allocated only among the eligible Participants
of the Participating Employer for which the contribution was made. Whenever the
Employer elects to contribute different amounts for a Plan Year on behalf of
different Participating Employers, the Committee shall notify the Trustee, in
writing, of the amount of the contribution allocable to each group for
allocation to the eligible Participants employed within each group.
10. The first sentence of Section 3.06 of the Plan is hereby deleted in its
entirety and replaced with the following:
Subject to any restoration allocation required under Section 4.05, the
Committee shall allocate and use the amount of a Participant's benefit forfeited
under the Plan to reduce its Profit Sharing Contribution and/or Matching
Contribution for the Plan Year in which the forfeiture occurs.
11. The first two sentences of Section 3.01 of the Plan are hereby deleted
in their entirety and replaced with the following:
The Committee, or, if the Committee so determines, the Trustee, shall
maintain an Account for each Participant and Former Participant having an amount
to his credit in the Trust Fund. Each Account shall be divided into separate
subaccounts for "Compensation Deferral
-3-
69
Contributions," "Matching Contributions" and "Profit Sharing Contributions," as
defined below. If a Participant has made a "Rollover Contribution" or "Transfer
Contribution," as defined below, separate subaccounts shall be established for
such contributions as well.
12. A new Section 3.09 is hereby added to the end of Article III of the
Plan immediately following Section 3.08 to read as follows:
Section 3.09. COMPENSATION DEFERRAL CONTRIBUTIONS. For any Plan Year,
each Participant may elect to have allocated to his Account an amount of his
Compensation for such Plan Year, which amount shall be a whole percentage,
rounded to the nearest dollar, of not less than one percent but not more than
the lesser of $8,000 or 10% of his Compensation for such Plan Year. Such amount
shall be known as the Participant's "COMPENSATION DEFERRAL CONTRIBUTION." A
Participant's Compensation for the Plan Year shall be reduced by the amount of
the allocation he elects for such Plan Year. All elections shall be made at the
time, in the manner, and subject to the conditions specified by the Committee,
which shall prescribe uniform and nondiscriminatory rules for such elections,
and shall become effective as of the first pay period as is administratively
practicable after the election is properly made.
13. A new Section 3.10 is hereby added to the end of Article III of the
Plan immediately following the new Section 3.09, above, to read as
follows:
Section 3.10. CHANGES AND SUSPENSIONS OF COMPENSATION DEFERRAL
CONTRIBUTIONS. A Participant may change the rate of Compensation Deferral
Contributions to his Account at any time during the Plan Year, effective for the
first payroll period for which it is administratively feasible to change the
rate of such Participant's Compensation Deferral Contributions, by communicating
such rate of change in accordance with uniform rules and procedures established
by the Committee regarding the timing and manner of making such elections. In
addition, a Participant may at any time elect to suspend all contributions to
his Account by giving advance notice in any manner specified by the Committee in
accordance with its uniform rules and procedures. An election to recommence
contributions shall be effective for the first payroll period in which it is
administratively feasible to begin deferral withholdings. All suspensions and
recommencements of Compensation Deferral Contributions shall be made in the
manner and at the times specified in uniform rules and procedures established by
the Committee, which rules and procedures may be changed from time to time.
14. A new Section 3.11 is hereby added to the end of Article III of the
Plan immediately following the new Section 3.10, above, to read as
follows:
Section 3.11 MATCHING CONTRIBUTIONS. For each Plan Year, the Employer
may contribute to each eligible Participant's Account a "Matching Contribution"
in an amount determined by the Employer from time to time in its discretion. The
amount or rate of the Matching Contribution shall be announced to Participants
and other Eligible Employees, and suspended or changed on a prospective basis
only. The discretionary Matching Contribution amounts or rates of contribution
to be allocated to among eligible Participants of each Participating Employer
may vary.
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70
If the Employer so elects, the Employer may also make Matching
Contributions to the Plan which are "QUALIFIED MATCHING CONTRIBUTIONS."
Qualified Matching Contributions shall mean Matching Contributions that are at
all times Nonforfeitable and subject to the distribution requirement imposed on
Compensation Deferral Contributions when made to the Plan. Additional
contributions subject to these rules may be made by the Employer, or some of all
of the existing Matching Contributions may be designated as fully vested and
subject to the distribution restrictions, in order to satisfy the
nondiscrimination provisions of the Plan.
15. A new Section 3.12 is hereby added to the end of Article III of the
Plan immediately following the new Section 3.11, above, to read as
follows:
Section 3.12 MATCHING CONTRIBUTION ALLOCATION AND ACCRUAL OF BENEFIT.
Only Participants who have made Compensation Deferral Contributions during the
Plan Year shall be eligible to share in the allocation of the Matching
Contribution as set forth in Section 3.11. The allocation of Matching
Contributions shall be based on the amount or rate established in advance for
such contributions relative to the Compensation Deferral Contributions being
matched. No Matching Contributions shall be made, however, with respect to
"Excess Compensation Deferrals" as defined in Section 3.14A(ii) of the Plan.
Matching Contributions shall become Nonforfeitable in accordance with
Section 4.01 of the Plan. In any event, Matching Contributions shall be fully
vested and Nonforfeitable at Normal Retirement Age, upon the complete or partial
termination of the Plan, or upon the complete discontinuance of Employer
contributions. Forfeitures of Matching Contributions shall be made in accordance
with Section 4.03 of the Plan.
16. A new Section 3.13 is hereby added to the end of Article III of the
Plan immediately following the new Section 3.12, above, to read as
follows:
Section 3.13. QUALIFIED NON-ELECTIVE CONTRIBUTIONS. If the Employer so
elects, the Employer may make "Qualified Non-elective Contributions" under the
Plan on behalf of all Participants or all Participants who are Non-highly
Compensated Employees in order to satisfy the Actual Deferral Percentage test.
For purposes of this Article III, Qualified Non-elective Contributions shall
mean contributions (other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to Participants' Accounts that
the Participant may not elect to receive in cash until distributed from the
Plan; that are Nonforfeitable when made; and that are distributable only in
accordance with the distributions provisions that are applicable to Compensation
Deferral Contributions and Qualified Matching Contributions. Qualified
Non-elective Contributions shall be allocated to Participants' Accounts in the
same proportion that each Participant's Compensation for the Plan Year for which
the Employer makes the contribution bears to the total Compensation for all
Participants for the Plan Year (or of all Non-highly Compensated Employees, as
applicable).
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71
17. A new Section 3.14 is hereby added to the end of Article III of the
Plan immediately following new Section 3.13, above, to read as follows:
Section 3.14 LIMITATIONS APPLICABLE TO COMPENSATION DEFERRAL
CONTRIBUTIONS.
A. DEFINITIONS. For purposes of this Section 3.14, the following
definitions shall apply:
(i) "ACTUAL DEFERRAL PERCENTAGE," for each Plan Year,
means the average of the ratios (calculated
separately for each Participant in the specified
group) of:
a. the amount of Compensation Deferral
Contributions actually paid over to the
Trust Fund on behalf of each such
Participant for such Plan Year, including
Excess Compensation Deferrals, to
b. the Participant's Compensation for such Plan
Year for the period during which he was a
Participant in the Plan.
(ii) "EXCESS COMPENSATION DEFERRALS," with respect to any
Plan Year, means the excess of:
a. The aggregate amount of Employer
contributions actually taken into account in
computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan
Year, over
b. The maximum amount of such contributions
permitted by the Actual Deferral Percentage
test (determined by reducing contributions
made on behalf of Highly Compensated
Employees in the order of their Actual
Deferral Percentages, beginning with the
highest of such percentages and continuing
until the Actual Deferral Percentage test is
satisfied).
B. ACTUAL DEFERRAL PERCENTAGE TEST. In any Plan Year in which the
Actual Deferral Percentage for the group of Highly Compensated
Employees, taking into account Employee elections, would be
more than the greater of:
(i) the Actual Deferral Percentage for the group of
Non-highly Compensated Employees for the current Plan
Year, multiplied by 1.25, or
(ii) the lesser of two percent plus the Actual Deferral
Percentage for the group of Non-highly Compensated
Employees for the current Plan Year or the Actual
Deferral Percentage for the group of Non-highly
Compensated Employees for the current Plan Year
multiplied by two,
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72
the deferral elections of the Highly Compensated Employees
shall be reduced to the extent necessary so that the Actual
Deferral Percentage for the group of Highly Compensated
Employees is not more than the greater of subparagraphs (i) or
(ii) of this subsection B. Alternatively, or in addition to
the reduction calculated above, if the Employer has made any
Qualified Matching or Qualified Non-elective Contributions for
the Plan Year in question, the Committee may elect to treat
all or any part of any such contributions as Compensation
Deferral Contributions to the extent necessary to satisfy the
Actual Deferral Percentage test of this section.
C. CORRECTION OF EXCESS COMPENSATION DEFERRALS. The amount of
Excess Compensation Deferrals to be distributed to a Highly
Compensated Employee (as described in Section 3.15) are
determined in accordance with the leveling method. Under the
leveling method, the actual deferral percentages of individual
Highly Compensated Employees are reduced, with the highest
actual deferral percentage being reduced until either the
Actual Deferral Percentage test is satisfied or it equals the
next highest actual deferral percentage. These actual deferral
percentages are then reduced until either the Actual Deferral
Percentage test is satisfied or the next highest level of
actual deferral percentages is reached. These reductions shall
continue until the Actual Deferral Percentage test is
satisfied.
18. A new Section 3.15 is hereby added to the end of Article III of the
Plan immediately following the new Section 3.14, above, to read as
follows:
Section 3.15. DISTRIBUTION OF EXCESS COMPENSATION DEFERRALS.
Notwithstanding any other provision of this Plan, Excess Compensation Deferrals,
plus any Income and minus any loss allocable thereto, shall be distributed no
later than the last day of each Plan Year to Participants to whose Accounts such
Excess Compensation Deferrals were allocated for the preceding Plan Year. Such
distributions shall be made to Highly Compensated Employees on the basis of the
respective portions of the Excess Compensation Deferrals attributable to each of
such Employees under the leveling methodology described in Section 3.14C.
Excess Compensation Deferrals shall be adjusted for any Income or loss.
The Plan Administrator shall determine whether such adjustments shall include
the period from the end of the Plan Year in which the excess arose up to the
date of corrective distribution (the "GAP PERIOD"). The income or loss allocable
to Excess Compensation Deferrals is the sum of: (i) income or loss allocable to
the Participant's Compensation Deferral Account (and, if applicable, the
Qualified Non-elective Contribution Account or the Qualified Matching
Contribution Account or both) for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Compensation Deferrals for the
year and the denominator of which is the Participant's Account balance
attributable to Compensation Deferrals (and Qualified Non-Elective Contributions
or Qualified Matching Contributions, or both, if any of such contributions are
included in the Actual Deferral Percentage test) without regard to any income or
loss occurring during such Plan Year; and (ii) if the corrective distribution is
to be adjusted for income or loss during the Gap Period, ten percent of the
amount determined under (i) multiplied
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73
by the number of whole calendar months between the end of the Plan Year and the
date of distribution, counting the month of distribution if distribution occurs
after the 15th day of such month. Alternatively, the Committee may determine the
income or loss allocable to Excess Compensation Deferrals under any reasonable
method which does not violate the general nondiscrimination rules, is used
consistently for all Participants and for all such corrective distributions
under the Plan for the Plan Year, and is used by the Plan for allocating income
to Participants' Accounts.
19. Section 4.01.A. of the Plan is hereby amended in its entirety to read
as follows:
A. VESTING - IN GENERAL. A Participant's interest in his
Compensation Deferral Account, Rollover Account and Transfer
Account, if any, shall at all times be fully vested and
Nonforfeitable. A Participant's interest in his Profit Sharing
Account and Matching Contributions Account shall be fully
vested and Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that
date), or if his employment terminates as a result of death or
Disability. Notwithstanding any provision in an applicable
Appendix to the Plan, if a Participant's employment terminates
prior to Normal Retirement Age for any reason other than death
or Disability, then for each Year of Service, he shall receive
a Nonforfeitable percentage of his Profit Sharing Account and
Matching Contributions Account (forfeiting the balance) equal
to the following:
Years of Service Nonforfeitable Percentage
---------------- -------------------------
Less than three (3) 0%
At least three (3) but less than four (4) 20%
At least four (4) but less than five (5) 40%
At least five (5) but less than six (6) 60%
At least six (6) but less than seven (7) 80%
At least seven (7) or more 100%
If an Appendix to the Plan provides for an alternate vesting schedule
applicable to certain Participating Employers, such alternate vesting schedule
will control.
20. A new Section 5.17 shall be added to the end of Article V of the Plan
to read as follows:
5.17. NO DISTRIBUTION PRIOR TO SEPARATION FROM SERVICE, DEATH OR
DISABILITY. Except as provided below, Compensation Deferrals, Qualified
Non-elective Contributions, and Qualified Matching Contributions, and income
allocable to each, are not distributable to a Participant or his Beneficiary or
Beneficiaries, in accordance with such Participant's or Beneficiary's election,
earlier than upon Separation from Service, death or Disability.
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74
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of a
successor plan.
B. The disposition by a corporation to an unrelated corporation
of substantially all of the assets used by such corporation in
its trade or business with respect to Employees who continue
employment with the corporation acquiring such assets.
C. The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary with respect to
Employees who continue employment with such subsidiary.
D. The attainment by the Participant of age 59 1/2, as described
in Section 6.02 herein.
21. Appendix A to the Plan is hereby amended and replaced by the Appendix A
attached hereto.
22. A new Appendix B is hereby added to the Plan in the form attached
hereto.
23. All other provisions of the Plan shall remain in full force and effect.
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75
APPENDIX A
PARTICIPATING EMPLOYERS
Packaging Coordinators, Inc.
Packaging Coordinators Incorporated, Caribe
Tri-Line Co., Inc.
Allegiance PRO Inc. (Effective as of January 1, 2000)
76
APPENDIX B
SPECIAL RULES REGARDING ELIGIBLE EMPLOYEES OF
ALLEGIANCE PRO INC.
Effective January 1, 2000, Eligible Employees of Allegiance PRO Inc. shall be
eligible to participate in the Plan. All provisions of the Plan shall be
effective with respect to such Eligible Employees; provided, however, that the
provisions of this Appendix B shall replace the general provisions of the Plan,
as indicated.
1. The vesting schedule set forth in Section 4.01.A. shall be replaced
with the following:
Years of Service Nonforfeitable Percentage
---------------- -------------------------
Less than one (1) 0%
At least one (1) but less than two (2) 20%
At least two (2) but less than three (3) 40%
At least three (3) but less than four (4) 60%
At least four (4) but less than five (5) 80%
At least five (5) or more 100%
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77
THIRD AMENDMENT
TO THE
CARDINAL HEALTH, INC.
PROFIT SHARING & RETIREMENT SAVINGS PLAN
FOR EMPLOYEES OF PUERTO RICO
(EFFECTIVE AS OF JULY 1, 1998)
BACKGROUND INFORMATION
A. Packaging Coordinators, Inc. (the "Company") maintains a profit sharing
plan known as the Cardinal Health, Inc. Profit Sharing & Retirement
Savings Plan for Employees of Puerto Rico (the "Plan") for the benefit
of its employees and their beneficiaries who are residents of Puerto
Rico.
B. Pursuant to Section 11.02 of the Plan, the Company may amend the Plan
at any time.
C. The Company desires to amend the Plan to permit the use of forfeitures
to offset some or all of the reasonable expenses of the Plan.
D. The sole director of the Company has authorized this amendment to the
Plan pursuant to an Action in Writing by the Sole Director of Packaging
Coordinators, Inc.
E. All provisions in this Third Amendment shall be effective as of July 1,
1999, unless another date is specified herein.
AMENDMENT TO THE PLAN
1. Section 3.06 of the Plan is amended in its entirety to read as follows:
Section 3.06. ALLOCATION OF FORFEITURES. Subject to any restoration
allocation required under Section 4.05, the Committee shall allocate
and use all or a portion of the amount of a Participant's benefit
forfeited under the Plan to either pay reasonable expenses of the Plan
(to the extent not paid by the Employer) or reduce its Profit Sharing
Contributions and/or Matching Contribution, as determined by the
Committee, for the Plan Year in which the forfeiture occurs. The
Committee shall continue to hold the undistributed, nonvested portion
of a terminated Participant's benefit in his Account solely for his
benefit until a forfeiture occurs at the time specified in Section
4.03.
2. All other provisions of the Plan shall remain in full force and effect.
78
EXHIBIT 1
THIRD AMENDMENT
TO THE
CARDINAL HEALTH, INC.
PROFIT SHARING & RETIREMENT SAVINGS PLAN
FOR EMPLOYEES OF PUERTO RICO
(EFFECTIVE AS OF JULY 1, 1998)
BACKGROUND INFORMATION
A. Packaging Coordinators, Inc. (the "Company") maintains a profit sharing
plan known as the Cardinal Health, Inc. Profit Sharing & Retirement
Savings Plan for Employees of Puerto Rico (the "Plan") for the benefit
of its employees and their beneficiaries who are residents of Puerto
Rico.
B. Pursuant to Section 11.02 of the Plan, the Company may amend the Plan
at any time.
C. The Company desires to amend the Plan to permit the use of forfeitures
to offset some or all of the reasonable expenses of the Plan.
D. The sole director of the Company has authorized this amendment to the
Plan pursuant to an Action in Writing by the Sole Director of Packaging
Coordinators, Inc.
E. All provisions in this Third Amendment shall be effective as of July 1,
1999, unless another date is specified herein.
AMENDMENT TO THE PLAN
1. Section 3.06 of the Plan is amended in its entirety to read as follows:
Section 3.06. ALLOCATION OF FORFEITURES. Subject to any restoration
allocation required under Section 4.05, the Committee shall allocate
and use all or a portion of the amount of a Participant's benefit
forfeited under the Plan to either pay reasonable expenses of the Plan
(to the extent not paid by the Employer) or reduce its Profit Sharing
Contributions and/or Matching Contribution, as determined by the
Committee, for the Plan Year in which the forfeiture occurs. The
Committee shall continue to hold the undistributed, nonvested portion
of a terminated Participant's benefit in his Account solely for his
benefit until a forfeiture occurs at the time specified in Section
4.03.
2. All other provisions of the Plan shall remain in full force and effect.