Exhibit (99e)
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN - (AUBURN)
As Amended and Restated Effective as of January 1, 2001
or as otherwise provided in Plan
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.................................................2
ARTICLE II ELIGIBILITY AND PARTICIPATION..............................11
ARTICLE III PARTICIPANTS' CONTRIBUTIONS................................13
ARTICLE IV COMPANY CONTRIBUTIONS......................................16
ARTICLE V INVESTMENT OF CONTRIBUTIONS................................19
ARTICLE VI VESTING OF CONTRIBUTIONS...................................22
ARTICLE VII SUSPENSION OF PARTICIPATION................................23
ARTICLE VIII APPLICATION OF COMPANY CONTRIBUTIONS FORFEITED.............24
ARTICLE IX WITHDRAWAL OF CONTRIBUTIONS................................25
ARTICLE X DESIGNATION OF BENEFICIARY.................................27
ARTICLE XI DISTRIBUTION OF CONTRIBUTIONS..............................28
ARTICLE XII MAXIMUM CONTRIBUTION LIMITATION............................35
ARTICLE XIII RESERVED...................................................40
ARTICLE XIV ADMINISTRATION OF THE PLAN.................................41
ARTICLE XV SECURITIES TRANSACTIONS BY TRUSTEE.........................51
ARTICLE XVI ASSIGNABILITY..............................................53
ARTICLE XVII AMENDMENT, MODIFICATION, SUSPENSION OR
TERMINATION OF THE PLAN....................................54
ARTICLE XVIII ESOP FEATURE...............................................55
-i-
AMENDED AND RESTATED
COOPER TIRE & RUBBER COMPANY
Pre-Tax Savings Plan
(Auburn)
AGREEMENT
Auburn Pension and Insurance Program Agreement
THIS AGREEMENT is made and entered into this 3rd day of July, 2000, by and
between Cooper Tire & Rubber Company hereinafter referred to as the "Company"
for its plant located in Auburn, Indiana and the United Steelworkers of America,
and Local Union No. 634 thereof executing this Agreement; the International
Union and the Local Union collectively being hereinafter referred to as the
"Union."
Effective January 1, 2002, an ESOP will be established under the Plan described
in this Agreement. The ESOP feature is described in Article XVIII of the Plan
and in other relevant Plan sections. The provisions of the Plan relating to the
ESOP feature shall not be effective until January 1, 2002.
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ARTICLE I
DEFINITIONS
For the purposes of this Plan, the following words and phrases shall have the
following meanings unless a different meaning is clearly required by the
context:
(1) "Account" of a Participant or "Participant's Account" - the then total
current market value of the account in the Participant's name as determined
by the Trustee representing the entire interest of a Participant in the
Plan. Effective January 1, 2002, each account shall consist of the Non-ESOP
Account and ESOP Account. Prior to January 1, 2002, each account shall
consist of a Pre-Tax Savings Plan Contribution subaccount which will
reflect the amount of Pre-Tax Savings Plan Contributions attributable to a
Participant and allocated earnings attributable thereto, a Transfer
Contributions subaccount which will reflect the amount of Transfer
Contributions attributable to a Participant and allocated earnings
attributable earnings attributable thereto and a Company Contribution
subaccount which will reflect the amount of Company Contributions made
pursuant to Article IV herein and allocated earnings attributable thereto.
(2) "Active Participation" - the making of Participant contributions to the
Plan and the right to share in the allocation of Company Contributions and
ESOP Contributions, if any.
(3) "Actual Deferral Percentage" - for each Plan Year, the ratios (expressed as
a percentage and calculated separately for each Eligible Employee in a
specified group) of
(a) the total amount of Company Wage Reduction Contributions to
(b) the Eligible Employee's aggregated Compensation for such Plan Year.
Effective until January 1, 1997, for purposes of determining the Actual Deferral
Percentage for any Eligible Employee who is a Highly Compensated Employee for
the Plan Year, any Compensation paid to a Family Member or any contribution made
by the Company on such Family Member's behalf under Section 1 of Article III
shall be treated as paid to or contributed on behalf of the Highly Compensated
Employee. Such Family Member shall be disregarded in determining the Actual
Deferral Percentage for Non-Highly Compensated Employees.
In addition, the Actual Deferral Percentage for any Highly Compensated Employee
for the Plan Year and who is a participant under two or more plans described in
Section 401(k) of the Code which are maintained by the Company, shall be the sum
of the Actual Deferral Percentages under each of such plans.
(4) "Adjusted Employment Date" - the date arrived at when the Employee's prior
Continuous Credited Service is subtracted, according to Section 2 of
Article II, from the date on which the Employee first renders service
entitling him/her to credit for an Hour of Service subsequent to a prior
period of Continuous Credited Service.
(5) "Affiliated Group" - means the Company and any and all other corporations,
trades and/or businesses, the employees of which together with Employees of
the Company are required, by the first sentence of Subsection (b) or
Subsection (c) of section 414 of the
2
Code to be treated as if they were employed by a single employer. Each
corporation or unincorporated trade or business that is or was a member of
the Affiliated Group shall be referred to herein as an "Affiliated Group
Member" or an "Affiliated Company" but only during such period as it is or
was such a member.
(6) "Code" - the Internal Revenue Code of 1986, as amended to date, and as it
may hereafter be amended, or any successor statute of similar purpose.
(7) "Committee" - the Defined Contribution Plan Committee established herein.
(8) "Common Stock" - common stock of Cooper Tire & Rubber Company, which is
intended to be 'employer securities' within the meaning of Section 409(l)
of the Code, and 'qualifying employer securities' within the meaning of
Section 407(d)(5) of ERISA. The Plan shall be permitted to acquire and hold
Common Stock, and shall be an eligible individual account plan, as that
term is defined in Section 407(d)(3)(A) of ERISA.
(9) "Company" - Cooper Tire & Rubber Company and any of its subsidiary
corporations which adopt this Plan.
(10) "Company Contributions" - contributions made by the Company pursuant to
Article IV of the Plan, other than Company Wage Reduction Contributions.
(11) "Company Wage Reduction Contributions" - amounts transferred to the Plan by
the Company pursuant to wage reduction arrangements between the Company and
Participants, also sometimes referred to herein as Pre-tax Savings Plan
Contributions.
(12) "Compensation" - includes all payments of wages, bonus, Company Wage
Reduction Contributions to this Plan and any taxable payments paid to the
Participant in a calendar year, except that there shall be excluded from
Compensation: supplemental unemployment benefits, supplemental worker's
compensation, accident and sickness benefits, and other amounts which
either are excludable or deductible from income in whole or in part for
federal income tax purposes or which represent payments pursuant to a
program of benefits or deferred compensation (other than Company Wage
Reduction Contributions), whether or not qualified under the Code.
Notwithstanding the above, the maximum amount of compensation taken into
account each year for all computations shall not exceed the amount
prescribed pursuant to Section 401(a)(17) of the Code, as amended, or such
amount as the Secretary of the Treasury shall prescribe from time to time.
Effective until January 1, 1997, in determining the compensation of a
Participant for purposes of the limitation, the rules of section 414(q)(6)
of the Code shall apply, except in applying such rules, the term family
shall include only the spouse of the Participant and any lineal descendants
of the Participant who have not attained age 19 before the close of the
year. If, as a result of the application of the rules described in the
preceding sentence the limitation of Section 401(a)(17) of the Code is
exceeded, then the limitation shall be prorated among the affected
individual's Compensation as determined under this section prior to the
application of this limitation.
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In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan
years beginning on or after January 1, 1994, the annual compensation of
each employee taken into account under the plan shall not exceed the
Omnibus Budget Reconciliation Act of 1993 (OBRA '93) annual compensation
limit. The OBRA '93 annual compensation limit is $150,000, as adjusted by
the Commissioner for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this
plan to the limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the first day
of the first plan year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
(13) "Continuous Credited Service" - the number of years aggregated under the
provisions of Article II, Section 2, except that Continuous Credited
Service prior to January 1, 1976, shall be calculated from the most recent
Employment Date.
(14) "Current Earnings" - net income before federal income taxes of the Company
for its current fiscal year and before deducting any Company Contributions
or ESOP Contributions to this Plan for such fiscal year determined on the
basis of generally accepted accounting principles.
(15) "Designated Beneficiary" - the beneficiary chosen by the Participant, in
accordance with the provisions of Article VIII herein, to receive, upon the
Participant's death, any benefit payable under this Plan by reason of the
Participant's death.
(16) "Eligible Employee" - any Employee who has satisfied the provisions of
Section 1 of Article II.
(17) "Employee" - any employee of the Auburn plant of the Company, whose terms
and conditions of employment are determined through collective bargaining
with the Union. To the extent required by Section 414(n) of the Code, the
term "Employee" includes any person who is a "leased employee" of the
Company or any other Controlled Group Member. For purposes of this
Subsection, a "leased employee" means any person who, pursuant to an
agreement between the Company or a Controlled Group Member and any other
person ("leasing organization"), has performed services for the Company or
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Controlled Group Member on a substantially full-time basis for a period of
at least one year, and, effective January 1, 1997, such services are
performed under the primary direction or control of the Company or
Controlled Group Member. Contributions or benefits provided to a leased
employee by the leasing organization that are attributable to services
performed for the Company or a Controlled Group Member will be treated as
provided by the Company or Controlled Group Member. A leased employee will
not be considered an Employee of the Company or a Controlled Group Member,
however, if (1) leased employees do not constitute more than 20% of the
Company's or Controlled Group Member's non- highly compensated work force
(within the meaning of Section 414(n)(5)(C)(ii) of the Code and (2) such
leased employee is covered by a money purchase pension plan maintained by
the leasing organization that provides (i) a non-integrated employer
contribution rate of at least 10% of compensation, (ii) immediate
participation and (iii) full and immediate vesting. All personal and
relative pronouns, singular or plural, and words "person", "Employee", and
"Employees" shall refer to both male and female Employees generally.
(18) "Employment Date" - the date on which the Employee first completes an Hour
of Service in the employ of the Company, whether or not that service is
performed as an Employee.
(19) "ESOP Account" - shall include all amounts in the Participant's Account
that are transferred to the ESOP Account pursuant to Section 3 and Section
5 of Article V. The ESOP Account shall be established under the ESOP
Feature of the Plan. The ESOP Account shall consist of a Pre-Tax Savings
Plan Contributions subaccount which will reflect the amount of Pre-Tax
Savings Plan Contributions in the ESOP Account attributable to a
Participant and allocated earnings attributable thereto, a Transfer
Contributions subaccount which will reflect the amount of Transfer
Contributions in the ESOP Account attributable to a Participant and
allocated earnings attributable thereto, a Company Contributions subaccount
which will reflect the amount of Company Contributions in the ESOP Account
made pursuant to Article IV herein and allocated earnings attributable
thereto, and an ESOP Contributions subaccount which will reflect the amount
of ESOP Contributions in the ESOP Account made pursuant to Article XVIII
herein and allocated earnings attributable thereto.
(20) "ESOP Contributions" - are the discretionary contributions made by the
Company pursuant to Section 3 of Article XVIII.
(21) "ESOP Feature" - is the portion of the Plan described in Article XVIII and
shall be effective January 1, 2002. The ESOP Feature consists of the ESOP
Account.
(22) "Family Member" - effective until January 1, 1997, with respect to any
Employee, such Employee's spouse and lineal ascendants and descendants and
the spouses of such lineal ascendants and descendants.
(23) "Highly Compensated Employee" - The term Highly Compensated Employee
includes highly compensated active Employees and highly compensated former
Employees.
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For a particular Plan Year, effective January 1, 1997, a highly compensated
active Employee means any Employee who: (i) was a 5-percent owner at any
time during the current or the preceding Plan Year or (ii) for the
preceding Plan Year received compensation from the Company in excess of the
amount in effect for such Plan Year under Section 414(q)(1)(B) of the Code
and was in the top-paid group of Employees for such preceding Plan Year.
For the purposes of this Subsection, (i) the term "compensation" shall mean
(A) for the period prior to January 1, 1998, the sum of an Employee's
compensation under Section 415(c)(3) of the Code and the Employee's Pre-Tax
Savings Plan Contributions (subject to the limitations of Section
401(a)(17) of the Code), and (B) for periods commencing on and after
January 1, 1998, an Employee's compensation under Section 415(c)(3) of the
Code (subject to the limitation of Section 401(a)(17) of the Code), and
(ii) the term "top-paid group" shall mean that group of Employees of the
Company consisting of the top 20 percent (20%) of such Employees when
ranked on the basis of compensation paid by the Company during the Plan
Year.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performs no service for the Company during the determination year,
and was a highly compensated active Employee for either the separation year
or any determination year ending on or after the Employee's 55th birthday.
This paragraph shall apply until January 1, 1997. If any Employee is,
during a determination year or look-back year, a family member of either a
5 percent owner who is any active or former Employee or a Highly
Compensated Employee who is one of the 10 most Highly Compensated Employees
ranked on the basis of Compensation paid by the Company during such year,
then the family member and 5 percent owner or top-ten Highly Compensated
Employee shall be aggregated. In such case, the family member and 5 percent
owner or top-ten Highly Compensated Employee shall be treated as a single
Employee receiving compensation and Plan contribution or benefits equal to
the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten Highly Compensated Employee. For
purposes of this section, family member includes the spouse, lineal
ascendants and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of Employees in the top-paid
group, and the compensation that is considered, will be made in accordance
with section 414(q) of the Code and the regulations thereunder.
(24) "Hour of Service" - each hour for which an employee is paid, or entitled to
payment, by the Company for the performance of duties or on account of a
period of time during which no duties are performed due to vacation,
holiday, jury duty, short-term military duty or funeral absence. Each hour
for which an employee is not paid, or not entitled to payment, on account
of a period of time during which the employee continues to accrue
6
Continuous Credited Service while under an approved leave of absence for
illness, incapacity or disability, long-term military duty or personal
reasons.
Each hour for which an employee is paid back pay, regardless of mitigation
of damages, except for hours previously credited for the same period, or
severance pay. Hours of Service shall not be credited due to payments
received by an employee from a plan maintained for the sole purpose of
complying with applicable worker's or unemployment compensation laws,
complying with disability insurance laws, or reimbursement of medical or
medically related expenses.
Such hours shall be credited as specified in Section 201 of the Employee
Retirement Income Security Act of 1974, as amended, and as specified at
Title 29, Code of Federal Regulations, 2530.2O0b.
Hours of Service performed at premium rates (such as holiday pay overtime
or shift differential) shall be credited as single Hours of Service,
regardless of the rate of compensation in effect for such service. If an
Employee is absent from work for any period which commences on or after the
Effective Date:
(a) by reason of the pregnancy of the Employee,
(b) by reason of the birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection
with the adoption of such child by the Employee, or
(d) for purposes of caring for any such child for a period beginning
immediately following such birth or placement, and the absence is
permitted under the Company-Union basic labor agreement, the Employee
shall not, solely by reason of such absence, be considered to have
incurred a Severance Date for purposes of participation and for
determining his/her vested interest until the expiration of the
consecutive twenty-four (24) month period commencing on the first day
of the absence.
If an Employee is absent from work for any period for any reasons
referred to in subparagraphs (a), (b), (c) and (d) of this subsection,
and such period includes the last day of the Plan Year, the Employee
shall be deemed to be employed on such date for purposes of Section 3
of Article II.
(25) "Investment Option" - one of those forms of investment which are available
to a Participant to invest Company Wage Reduction Contributions, vested
Company Contributions and related earnings under the Plan.
(26) "Leave of Absence" - leave of absence granted by the Company due to illness
or injury, required U.S. Military Service, or other special leave of
absence set forth in the Company-Union basic labor agreement, under which
all Participants in similar circumstances shall be treated alike.
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(27) "Non-ESOP Account" - shall include all Pre-Tax Savings Plan Contributions,
Company Contributions, and Transfer Contributions made to the Plan pursuant
to Articles III and IV of the Plan; except that the Non-ESOP Account shall
not include any portion of such contributions transferred to the
Participant's ESOP Account pursuant to Section 3 and Section 5 of Article
V. The Non-ESOP Account shall be established under the Non-ESOP Feature of
the Plan. The Non-ESOP Account shall consist of a Pre-Tax Savings Plan
Contributions subaccount which will reflect the amount of Pre-Tax Savings
Plan Contributions in the Non-ESOP Account attributable to a Participant
and allocated earnings attributable thereto, a Transfer Contributions
subaccount which will reflect the amount of Transfer Contributions in the
Non-ESOP Account attributable to a Participant and allocated earnings
attributable thereto, and a Company Contributions subaccount which will
reflect the amount of Company Contributions in the Non-ESOP Account made
pursuant to Article IV herein and allocated earnings attributable thereto.
(28) "Non-ESOP Feature" - is the portion of the Plan, on and after January 1,
2002, (a) which is not included within the ESOP Feature, (b) which is
intended to qualify as a profit sharing plan under Code Section 401(a), and
(c) which includes a qualified cash or deferred arrangement within the
meaning of Code Section 401(k). The Non-ESOP Feature consists of the
Non-ESOP Account.
(29) "Non-Highly Compensated Employee - any Eligible Employee who is neither a
Highly Compensated Employee nor, effective until January 1, 1997, a Family
Member of a Highly Compensated Employee.
(30) "Normal Retirement Date" - the later of the day the Participant attains age
sixty-five (65) or the completion of five (5) years of participation in the
Company's Auburn Hourly Employees' Retirement Plan.
(31) "One-Year Break in Service" - a Plan Year during which a Participant has
five hundred (500) or fewer Hours of Service. Temporary excused absences,
including military leave, shall not constitute a One-Year Break in Service.
Further, solely for the purpose of determining whether a Participant has
incurred a One-Year Break in Service, Hours of Service shall be recognized
for "maternity and paternity leaves of absence." A "maternity or paternity
leave of absence" shall mean, for Plan Years beginning after December 31,
1984, an absence from work for any period by reason of the Employee's
pregnancy, birth of the Employee's child, placement of a child with the
Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following
such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins,
only if credit therefore is necessary to prevent the Employee from
incurring a One-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited for
a "maternity or paternity leave of absence" shall be those which would
normally have been credited but for such absence, or, in any case in which
the plan administrator is unable to determine such hours normally credited,
eight (8) Hours of Service per day. The total Hours of Service required to
be credited for a "maternity or paternity leave of absence" shall not
exceed five hundred one (501).
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(32) "Participant" - any person who has been admitted to participation in this
Plan pursuant to the provisions of Article II. The term "Participant" shall
include active Participants (those currently eligible to share in Company
Contributions and ESOP Contributions, if any), inactive Participants (those
individuals who are employed by the Company and have been active
Participants but are not eligible to share in Company Contributions or ESOP
Contributions), and any former Employee who has an Account under the Plan.
(33) "Plan" - the Pre-tax Savings Plan as set forth herein, and as it may be
modified or amended from time to time. Effective January 1, 2002, the Plan
consists of the ESOP Feature and the Non-ESOP Feature.
(34) "Plan Year" - except as otherwise provided herein, a Plan Year shall be the
calendar year beginning January 1 and ending December 31. With respect to
each person becoming employed by the Company or an Affiliated Company, for
purposes of eligibility to participate herein, the initial Plan Year shall
be the calendar year which commences coincident with or immediately
following the Employee's Employment Date.
(35) "Pre-tax Savings Plan Contribution" - the percentage of a Participant's
Compensation which the Company contributes to the Plan pursuant to a wage
reduction agreement, under which a Participant elects to forego a
percentage of such Compensation, reduced for purposes of the Plan, also
sometimes referred to as a Company Wage Reduction Contribution.
(36) "Severance Date" - the earliest of (a) the date on which the Employee
retires, dies, quits, or is discharged or (b) the date on which the
Employee ceases to accrue Continuous Credited Service in accordance with
the Company-Union basic labor agreement provisions for leave of absence;
but in no event shall the Severance Date, as defined in (a) and (b), be
earlier than the first anniversary of the first day of a period throughout
which the Employee remains absent, with or without pay, from the service of
the Company by reason of the absence.
(37) "Severance Period" - the period of time between the Employee's Severance
Date and the date on which he again performs an Hour of Service.
(38) "Total and Permanent Disability" - a condition of a Participant as the
result of bodily injury or disease from an unavoidable cause which prevents
such Participant from being physically able to meet his/her present job
requirements as the same existed at the time of the Participant's cessation
of service due to such condition and which disability will (in the opinion
of a qualified physician designated by the Committee) presumably be
permanent and continuous during the remainder of his/her life. Such
condition shall be deemed to have resulted from an unavoidable cause unless
it:
(a) was contracted, suffered or incurred while the Participant was engaged
in, or resulted from having engaged in, a felonious enterprise, or
(b) resulted from habitual drunkenness or addiction to hallucinogenic
and/or narcotic drugs not prescribed by a qualified physician for
treatment of a condition other than drug addiction, or
9
(c) resulted from an intentional self-inflicted injury or self-induced
sickness.
(39) "Transaction Period" - a period defined in Article XV herein during which
certain rules and regulations, as established by the Committee and the
Trustee, shall govern all transactions relating to securities.
(40) "Transactions" - all purchases, sales, redemptions or other dispositions of
securities by the Trustee under the Plan.
(41) "Transfer Contributions" - those amounts transferred to the Plan on behalf
of an Employee from another plan qualified under Section 401(a) of the Code
as described in Article III, Section 8.
(42) "Trustee" - the Trustee or Trustees designated by the Company as provided
herein.
(43) "Trust Fund" - assets of the Plan and Trust as the same shall exist from
time to time.
(44) "Unvested" - that portion of a Participant's Account balance which is not
vested pursuant to Article VI herein.
(45) "Vested" - that portion of a Participant's Account balance to which he/she
has a nonforfeitable right pursuant to Article VI herein.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
SECTION 1. ELIGIBILITY
Any Employee of the Company eligible for membership in the Union who has
completed thirty days of Continuous Credited Service is eligible to participate
in the Plan.
Notwithstanding the foregoing, no Employee who serves only as a leased employee
as defined in Section 414(n) of the Code shall be covered by the Plan or deemed
to be a Participant.
SECTION 2. CONTINUOUS CREDITED SERVICE
(a) Continuous Credited Service for purposes of computing eligibility
shall be defined as the period of time (as computed by completed
1/12ths of a year) between the Employee's Employment Date or Adjusted
Employment Date and the current date or the Employee's most recent
Severance Date.
(b) Any person who incurs a Severance Period after January 1, 1990, shall
have Continuous Credited Service restored on the following basis:
(1) A person who before the Severance Date had established a
nonforfeitable right to any vested benefit will for all purposes
have pre-Severance Period and post-Severance Period Continuous
Credited Service aggregated to create an Adjusted Employment
Date.
(2) A person who before the Severance Date had not established a
nonforfeitable right to any vested benefit will have Continuous
Credited Service restored on the following basis to create an
Adjusted Employment Date:
(i) If the Severance Period is less than the Continuous Credited
Service prior to the Severance Date, the Continuous Credited
Service prior to the Severance Date shall be aggregated with
any Continuous Credited Service after the Severance Period
to create an Adjusted Employment Date for all purposes. Such
aggregation of Continuous Credit Service shall not include
any period of time during the Severance Period.
(ii) If the Severance Period equals or exceeds the greater of
five (5) years or the Continuous Credited Service prior to
the Severance Date, the Continuous Credited Service prior to
the Severance Date shall not be aggregated and the Employee
shall become a Participant as specified in Section 3 of this
Article.
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SECTION 3. PARTICIPATION
An Employee described in Section 1 will become a Participant in the Plan upon
satisfaction of all the following requirements:
(a) completion of thirty days of Continuous Credited Service,
(b) receipt by the Committee of a completed application,
(c) agreement to an appropriate payroll deduction from his/her
Compensation,
(d) agreement to accept a reduction of his/her Compensation equal to the
whole percentage of his/her Compensation per payroll period he/she
elects to have contributed by the Company as a Pre-tax Savings Plan
Contribution.
A Participant shall cease to be eligible to make contributions to the Plan and
to share in Company Contributions or ESOP Contributions under the Plan when
he/she is no longer an Employee due to: resignation, termination, retirement,
death, Total and Permanent Disability, or otherwise ceasing to be an Employee or
the Participant's voluntary election to suspend participation pursuant to
Article VII hereof. Participation in the Plan will cease when the Employee or
former Employee no longer has an Account under the Plan. A Participant who
voluntarily ceases Active Participation from this Plan while still an Employee
accumulating Continuous Credited Service shall be ineligible to resume Active
Participation for a period of twelve (12) months from the date Active
Participation last ceased.
Notwithstanding the above paragraph, a Participant who retires under the
Company's Auburn Pension and Insurance Agreement may elect to continue to be a
Participant in the Plan and maintain an Account until the earlier of the date
he/she withdraws the balance in his/her Account or April 1 of the calendar year
following the calendar year in which he/she attains age 70-1/2. After the
effective date of such retirement, such a Participant shall not be entitled to
make contributions to the Plan or share in the allocation of Company
Contributions or ESOP Contributions.
Participation in the Plan by Eligible Employees shall be voluntary.
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ARTICLE III
PARTICIPANTS' CONTRIBUTIONS
SECTION 1. AMOUNT OF PARTICIPANT PRE-TAX SAVINGS PLAN CONTRIBUTION
To be an Active Participant, an eligible individual must have made on his/her
behalf or agree to make a Pre-tax Savings Plan Contribution in the following
manner:
(a) A Participant may agree to have contributed on his/her behalf as a
Pre-tax Savings Plan Contribution, an amount, at his/her election, not
to exceed the lesser of: (i) 15% of his/her Compensation or (ii)
$7,979 (or such greater amount as determined by the Secretary of
Treasury). In calculating the limit under Code Section 402(g) for
purposes of Code Section 401(k), the amounts to be deferred by an
eligible Employee under each plan for which he/she is eligible to make
wage deferrals will be aggregated by treating all cash or deferred
arrangements under which the Employee is eligible as a single
arrangement. If the limit set forth by Code Section 402(g) is
exceeded, then the deferrals in excess of the limits must be
distributed by April 15 of the following year. Such reduction in
Compensation must be made at the time the Participant would normally
receive his Compensation from the Company.
(b) A Participant, by agreeing to have contributed on his/her behalf a
Pre-tax Savings Plan Contribution, shall enter into a written wage
reduction agreement with the Company. The terms of such reduction
agreement shall provide that the Participant accepts a reduction in
his/her Compensation from the Company equal to any whole percentage of
his/her Compensation per pay period which he/she elects to have
contributed on his/her behalf as a Pre-tax Savings Plan Contribution.
(c) Pre-tax Savings Plan Contributions shall be fully vested and
nonforfeitable at all times.
(d) The Company may amend or revoke its wage reduction agreement with any
Participant at any time, if the Company determines that such
revocation or amendment is necessary to insure that contributions by
or on behalf of a Participant for any Plan Year will not exceed the
limitations of Section 415 or to insure that the discrimination tests
of section 401(k) of the Code are met for such Plan Year.
(e) If a Participant's Compensation for any Plan Year is such that he or
she is a Highly Compensated Employee for the Plan Year, the actual
deferral percentage test of Section 401(k)(3) of the Code will be met.
The Plan incorporates by reference the provisions of Sections
401(k)(3) of the Code and regulation Section 1.401(k) - 1(b)
thereunder.
13
SECTION 2. LIMITATIONS ON PARTICIPANT CONTRIBUTIONS
All contributions made by or on behalf of a Participant are subject to the
limitations imposed by section 401(k), and section 415 of the Code as further
set forth in Article XII hereof.
The maximum amount of such contributions is limited under Section 401(k)(3)
determined by reducing contributions made on behalf of Highly Compensated
employees in order of their contribution percentages beginning with the highest
of such percentages.
SECTION 3. CHANGING CONTRIBUTION PERCENTAGE
The contribution percentage(s) designated by a Participant shall continue in
effect, notwithstanding any change in his/her Compensation, until he/she shall
change such contribution percentage(s).
A Participant may elect, at any time, but not less than thirty (30) days from
the last change in contribution percentage(s) to increase or decrease the
contribution percentage(s) within the applicable limits to be effective as soon
as practicable after receipt of notice of change.
SECTION 4. CONTRIBUTIONS TO BE EXPRESSED IN WHOLE MULTIPLES
Each Participant's Pre-tax Savings Plan Contributions shall be in whole
multiples of 1% of Compensation, subject to adjustment pursuant to Section 5
hereof.
SECTION 5. METHOD OF PARTICIPANTS' CONTRIBUTIONS
(a) Each Pre-tax Savings Plan Contribution made by the Company on behalf
of a Participant shall be transferred to the Plan pursuant to the
terms of a written wage reduction agreement between such Participant
and the Company. A Participant's wage reduction agreement shall be
modified automatically to correspond to the change in the amount of
the Pre-tax Savings Plan Contributions made on his/her behalf as set
forth in Section 3 hereof.
(b) The tentative wage reduction amount set forth in any wage reduction
agreement shall be in any amount as the Participant shall elect, but
shall be not less than 1% and not more than 15% of Compensation of
such Participant. Tentative wage reductions shall become final, and
then shall constitute Pre-tax Savings Plan Contributions, only after
the Company or the Committee has made such adjustments thereto as they
(or either of them) deem necessary to maintain the qualified status of
this Plan or to maintain the status of any portion of this Plan as a
qualified cash or deferred arrangement under section 401(k) of the
Code.
(c) All amounts withheld pursuant to a wage reduction agreement and
thereafter contributed to the Plan as Pre-tax Savings Plan
Contributions shall be so delivered only if the Company in good faith
believes that such amounts do not exceed the amounts permissible
pursuant to the limitations hereinabove set forth. If any amount shall
be withheld from the Compensation of a Participant pursuant to a wage
reduction agreement which exceeds the maximum amount permissible
14
pursuant to Section 5(b) hereof, and if such amount is contributed to
the Plan as a Pre-tax Savings Plan Contribution by way of a mistake of
fact, it shall be refunded to the Company and shall thereafter be paid
as promptly as practicable (subject, however, to the withholding of
taxes and other amounts as though such amount were current
compensation) by the Company to the Employee from whose Compensation
such amount was obtained pursuant to a wage reduction agreement.
SECTION 6. CREDITING OF CONTRIBUTION AMOUNTS
Company Wage Reduction Contributions shall be transferred by the Company to the
Trustee as soon as practicable, but not less than monthly. All payments so made
by the Company shall be reported to the Committee.
All such contributions shall be appropriately credited to the Account of each
Participant by the Trustee.
SECTION 7. VETERANS
Notwithstanding any provision of this Plan to the contrary, effective December
12, 1994, contributions, benefits and Continuous Credited Service with respect
to qualified military service will be provided in accordance with Section 414(u)
of the Code. "Qualified military service" means any service in the uniformed
services (as defined in chapter 43 of title 38 of the United States Code) by any
individual if such individual is entitled to reemployment rights under such
chapter with respect to such service.
SECTION 8. TRANSFER CONTRIBUTIONS
The Trustee is authorized to accept on behalf of a Participant, and hold as part
of a Participant's Account, assets from a trustee of another plan qualified
under Section 401(a) of the Code, provided that such other plan permits such a
transfer and provided that the Committee approves such transfer from such other
plan. All amounts so transferred to a Participant's Account shall be referred to
herein as "Transfer Contributions."
SECTION 9. CONTRIBUTIONS MADE TO THE NON-ESOP FEATURE
Effective January 1, 2002, when transmitted to the Plan pursuant to this Article
III, the Pre-Tax Savings Plan Contributions shall be transmitted to and held
under the Non-ESOP Feature of the Plan. As provided in Section 3 and Section 5
of Article V, such contributions may be transferred later from the Non-ESOP
Feature to the ESOP Feature.
15
ARTICLE IV
COMPANY CONTRIBUTIONS
SECTION 1. AMOUNT OF COMPANY CONTRIBUTIONS
The Company shall contribute to the Trustee out of Current Earnings for that
fiscal year or, at its discretion as set forth below out of its accumulated
earnings, in cash or in its treasury or authorized but unissued Common Stock the
value of which shall be computed at the applicable fair market value on the date
of contribution by the Company, an amount equal to the lesser of:
(a) the aggregate of seventy-five percent (75%) of all Pre-Tax Savings
Plan Contributions which represent up to four percent (4%) of each
Participant's Compensation during such year, less any forfeitures (as
defined in Article VIII, Section 1), or
(b) an amount equal to fifteen percent (15%) of the Company's Current
Earnings for such year in excess of ten percent (10%) of the
stockholder's equity of the Company at the beginning of such year.
The Company's Board of Directors may, at its discretion, waive the limitations
in paragraph (b) above and contribute to the Trustee out of Current Earnings for
that fiscal year or its accumulated earnings an amount not to exceed the
limitations in paragraph (a) above.
The Company will not match, nor allocate its contributions to, any portion of
Pre-Tax Savings Plan Contributions which represent an amount in excess of four
percent (4%) of a Participant's Compensation during each Plan Year.
Company Contributions will be subject to the nondiscrimination test pursuant to
Section 401(m)(2) of the Code. For any Plan Year the contribution percentage for
eligible Highly Compensated Employees shall not exceed the greater of:
(a) 125 percent of such percentage for all other Eligible Employees, or
(b) the lesser of 200 percent of such percentage for all other Eligible
Employees, or such percentage for all other Eligible Employees plus 2
percentage points.
For nondiscrimination testing purposes, the multiple use rules pursuant to
Regulation Section 1.401(m)-2 shall apply. If a correction of multiple use is
required, Pre-Tax Savings Plan Contributions will be distributed as provided by
Regulation Section 1.401(m)-2)(c).
At any time corrections are required to either the nondiscrimination test or
multiple use rules by distributing Pre-Tax Savings Plan Contributions any
related Company Contributions will also be distributed or forfeited to avoid
discrimination.
SECTION 2. COMPANY WAGE REDUCTION CONTRIBUTIONS
The Company shall contribute with respect to each Plan Year the aggregate of the
Company Wage Reduction Contributions for such Plan Year, as determined pursuant
to wage reduction
16
agreements in force between the Company and Participants in the Plan. Company
Wage Reduction Contributions shall be fully Vested and nonforfeitable at all
times.
SECTION 3. ALLOCATION OF COMPANY CONTRIBUTIONS
The Company Contributions for each fiscal year shall be allocated by the Trustee
to each Participant's Account in proportion to seventy-five percent (75%) of
each Participant's Pre-Tax Savings Plan Contributions made on his/her behalf up
to an aggregate contribution thereof of four percent (4%) of a Participant's
Compensation for such year.
If a Participant or Designated Beneficiary becomes entitled to distribution of
his/her Account under the Plan as a result of the Participant either retiring
from the Company under one of its retirement programs (except a Deferred Vested
Pension), suffering a Total and Permanent Disability or dying and Pre-Tax
Savings Plan Contributions have been made on his/her behalf to which Company
Contributions, if any, are allocated in the year in which such event
(retirement, Total and Permanent Disability, or death) occurred, such
Participant shall be entitled to share in the Company Contribution which it may
make with respect to such year, as herein provided, as if such event had not
occurred.
There shall be directly and promptly allocated to the Pre-Tax Savings Plan
Contributions subaccount of each Participant the Company Wage Reduction
Contributions, as set forth in Section 2 hereof.
Company Contributions will be allocated to the Participant only if the
Participant is employed on the last day of the Plan Year, except in the case of
retirement, Total and Permanent Disability or death.
SECTION 4. REPORTING THE CONTRIBUTIONS
The Company Contributions and Company Wage Reduction Contributions shall be
reported to the Committee by the Company.
SECTION 5. CONTINGENT NATURE OF CONTRIBUTIONS
To the extent that the deductibility thereof is subsequently denied, each
Company Contribution and each Company Wage Reduction Contribution made by the
Company pursuant to the provisions of this Article IV hereof is hereby made
expressly contingent upon the deductibility thereof for federal income tax
purposes for the year with respect to which such contribution is made. Each such
contribution is further contingent upon the maintenance of qualified status by
the Plan for the year with respect to which such contribution is made, to the
extent that the loss of qualified status would deprive the Company of the
deduction taken for such contribution.
SECTION 6. EXCLUSIVE BENEFIT; REFUND OF CONTRIBUTIONS
All contributions made by the Company are made for the exclusive benefit of the
Participants and their beneficiaries, and such contributions shall not be used
for nor diverted to purposes other than for the exclusive benefit of the
Participants and their beneficiaries, including the costs of maintaining and
administering the Plan and Trust. Notwithstanding the foregoing, refunds of
17
Company Contributions shall be made to the Company under the following
circumstances and subject to the following limitations, to the extent that such
refunds do not, in themselves, deprive the Plan of its qualified status:
(a) To the extent that a Federal income tax deduction is disallowed for
any Company Contribution, the Trustee shall refund to the Company the
amount so disallowed within one (1) year of the date of such
disallowance.
(b) In the case of a contribution, or for any Company Wage Reduction
Contribution, which is made in whole or in part by reason of a mistake
of fact, so much of the Company Contribution as is attributable to the
mistake of fact shall be returnable to the Company upon demand, upon
presentation of evidence of the mistake of fact to the Trustee and of
calculations as to the impact of such mistake of fact. Demand and
repayment must be effected within one (1) year after the last
installment payment of the contribution to which the mistake applies.
In the event that any refund of amounts contributed under Section 1 hereof is
paid to the Company, such refund shall be made without interest and shall be
deducted from among the Company Contributions subaccount of Participants only to
the extent that the amount of the refund can be identified to specific
Participants (as in the case of certain mistakes of fact). Refunds of amounts
contributed pursuant to Section 2 hereof (relating to contributions attributable
to wage reduction) are treated at Section 6 of Article III.
Notwithstanding any other provision of this Section 6, no refund shall be made
to the Company which is specifically chargeable to the Account of any
Participant in excess of one hundred percent (100%) of the amount in such
Account, nor shall a refund be made by the Trustee of any funds, otherwise
subject to refund hereunder, which have been distributed to Participants and/or
beneficiaries. In the case that such distributions become refundable, the
Company shall have a claim directly against the distributee to the extent of the
refund to which it is entitled. All refunds pursuant to this Section 6 shall be
limited in amount, circumstance and timing to the provisions of Section 403(c)
of the Employee Retirement Income Security Act of 1974, as amended, and no such
refund shall be made if, solely on account of such refund, the Plan would cease
to be a qualified Plan pursuant to Section 401(a) of the Code.
SECTION 7. TRANSMITTING THE COMPANY CONTRIBUTIONS
Each Company Contribution shall be sent to the Trustee as promptly as
practicable following the determination of the amount thereof, and, in any
event, on or before the date established by law (including any extension
thereof) for the filing of the Company's federal income tax return for the
taxable year with respect to which such Company Contribution is made.
Contributions made pursuant to Section 2 hereof shall be made no later than the
date specified in the preceding sentence, and shall be made at such earlier
dates as may be practicable provided, however, that no wage reduction amount
shall be held by the Company without contributing same to the Plan for a period
longer than the longest period that is permissible under regulations published
under Section 401(k) of the Code, and, in any event, amounts contributed under
18
Section 2 hereof with respect to any Plan Year shall be deemed credited to the
Pre-Tax Savings Plan Contributions subaccount of the Participant not later than
the last day of such Year.
SECTION 8. CONTRIBUTIONS MADE TO THE NON-ESOP FEATURE
Effective January 1, 2002, when transmitted to the Plan pursuant to this Article
IV, the Company Contributions and Company Wage Reduction Contributions shall be
transmitted to and held under the Non-ESOP Feature of the Plan. As provided in
Section 3 and Section 5 of Article V, such contributions may be transferred
later from the Non-ESOP Feature and ESOP Feature.
ARTICLE V
INVESTMENT OF CONTRIBUTIONS
SECTION 1. INVESTMENT OF FUNDS
Except for Unvested Company Contributions and, subject to Section 4 of Article
XVIII, ESOP Contributions, the amounts in a Participant's Account may be
invested on behalf of such Participant in one or more of the following
Investment Options, at the Participant's discretion:
(a) Option A: Cash with Interest. - Cash will be invested in a fixed
income account with a bank, insurance company, or an investment
adviser registered under the Investment Advisers Act of 1940.
(b) Option B: Mutual Fund(s). - Cash will be invested in one or more
mutual funds approved by the Committee and made available to
Participants.
(c) Option C: A fund comprising a pooled account of Common Stock of the
Company.
The amounts credited to a Participant's Account from, subject to Section 4 of
Article XVIII, the ESOP Contributions and Unvested Company Contributions shall
be invested in the Common Stock fund.
SECTION 2. INSTRUCTIONS TO THE TRUSTEE
A Participant will instruct the Trustee in writing as to the manner in which
his/her contributions in his/her Account, other than Company Contributions and
ESOP Contributions, shall be invested in any one or more of the Investment
Options in such proportions as he/she sees fit, except that the amounts so
specified shall be in multiples of one percent (1%). A Participant may likewise
instruct the Trustee with respect to the retention or investment of the Vested
portion of the Company Contributions subaccount and, subject to Section 4 of
Article XVIII, the ESOP Contributions subaccount allocated to his/her Account,
subject to the same limitations as apply to the investment of the contributions
in his/her Account other than Company Contributions.
Investment instructions with respect to the contributions in his/her Account
other than Company Contributions and ESOP Contributions, and with respect to the
Vested portion of the Company Contributions and, subject to Section 4 of Article
XVIII, the ESOP Contributions subaccount
19
may be different, both as to the kind of investment and as to the relative
amounts to be invested in such investments. Subject to Section 4 of Article
XVIII, the ESOP Contributions subaccount and the Unvested portion of the Company
Contributions subaccount shall remain invested in the Common Stock fund.
SECTION 3. TRANSFER TO THE ESOP FEATURE
Effective January 1, 2002, any amount of the Participant's Non-ESOP Account
invested in the Common Stock fund shall transfer to the Participant's ESOP
Account as of the first day of the Plan Year immediately succeeding the Plan
Year in which the contributions comprising such amounts invested in the Common
Stock fund were made to the Plan. Notwithstanding the foregoing, any amount in a
Participant's Account that is attributable to contributions made to the Plan
prior to January 1, 2002 and that is invested in the Common Stock fund on
December 31, 2001 shall be transferred to the Participant's ESOP Account
effective as of January 1, 2002.
SECTION 4. TRUSTEE OPTIONS
The Trustee is authorized to purchase treasury or authorized but unissued Common
Stock of and from the Company, if offered by it, at the applicable fair market
value.
SECTION 5. CHANGING OF INVESTMENTS
As to the investment of future contributions with respect to which the
Participant has investment discretion, the Participant shall have the right, at
any time, but not more often than once daily, to instruct the Trustee to change
the amounts to be invested in any Investment Option(s) for all his/her
contributions. A Participant shall instruct the Trustee pursuant to this Section
5 with regard to the investment of any portion of the Participant's Account
attributable to Transfer Contributions.
Subject to Section 9 of Article III, Section 8 of Article IV and Section 3 of
this Article V, any amount that the Participant chooses to invest in the Common
Stock fund, pursuant to this Section 5, shall be held in the Participant's
Non-ESOP Account on and after January 1, 2002, subject to transfer to the
Participant's ESOP Account. Effective January 1, 2002, any such amount invested
in the Common Stock fund shall transfer to the Participant's ESOP Account as of
the first day of the Plan Year immediately succeeding the Plan Year in which the
investments were changed into the Common Stock fund. On and after January 1,
2002, any amount that the Participant chooses to invest in any Investment
Option(s) other than the Common Stock fund, pursuant to this Section 5, shall
beheld in the Participant's Non-ESOP Account.
All such directions to sell or to redeem securities held in the Participant's
Account or to reinvest the proceeds and all changed investment directions shall
become effective during the Transaction Period, as such term is defined in
Section 1 of Article XV. All such directions received and completed prior to
4:00 p.m. Eastern Time on a day when both the Trustee and the New York Stock
Exchange are open for business shall be effective as of the close of the
business day of receipt of such directions. All such directions received and
completed after 4:00 p.m. Eastern Time on a day when both the Trustee and the
New York Stock Exchange are open for business shall be effective as of the
following day when both the Trustee and the New York Stock Exchange are open for
business.
20
SECTION 6. EARNINGS FROM INVESTMENTS
Except as provided in Section 6 of Article XVIII, earnings from the Investment
Options shall be reinvested in the Investment Option producing such earnings.
SECTION 7. UNINVESTED FUNDS UNDER INVESTMENT OPTIONS
Any funds in the hands of the Trustee as to which the Participant has instructed
the Trustee to invest in any given Investment Option but which temporarily
remains uninvested may be held by the Trustee in cash. Shares of Common Stock
shall be in full shares only, with no fractional shares being purchased or held.
Amounts creditable to the Accounts of Participants which cannot be invested in
the Investment Option selected because such amounts are insufficient to purchase
a full share of Common Stock shall be temporarily held pursuant to this Section
6 as uninvested funds for the benefit of the Account to which such amount is
allocate.
SECTION 8. SELECTION OF INVESTMENT OPTION
The selection of an Investment Option by a Participant will be entirely the
responsibility of such Participant. Neither Trustee, the Committee, the Company,
nor any of its personnel shall be empowered to advise a Participant as to the
manner in which the amounts credited to any Account shall be invested. The fact
that a security is available to Participants for investment under this Plan
shall not be construed as a recommendation for the purchase of that security,
nor shall the designation of any Investment Option impose any liability on the
Trustee, the Committee, the Union, the Company, or any of its personnel.
21
ARTICLE VI
VESTING OF CONTRIBUTIONS
SECTION 1. VESTING OF PARTICIPANT CONTRIBUTIONS
A Participant shall have a nonforfeitable interest in his/her Account balance to
the extent that it is attributable to contributions made by him/her or on
his/her behalf including (but not limited to) Company Wage Reduction
Contributions (but not including Company Contributions), at all times (subject
to the terms and conditions of Articles IX and XI), and in all assets in his/her
Account attributable thereto.
SECTION 2. VESTING OF COMPANY CONTRIBUTIONS AND ESOP CONTRIBUTIONS
Company Contributions and ESOP Contributions, if any, shall become Vested to the
Participant on the date such Participant completes five (5) years of Continuous
Credited Service (Article II, Section 2). For Participants with five (5) or more
years of Continuous Credited Service, Company Contributions and ESOP
Contributions will become Vested immediately upon being placed in his/her
Account. Notwithstanding the foregoing, a Participant shall at all times be
Vested in any earnings and dividends paid on the investments of Unvested Company
Contributions and ESOP Contributions held in the Participant's Account. Full one
hundred percent (100%) vesting shall also occur upon attainment of the
Participant's Normal Retirement Date.
Should a Participant terminate participation in the Plan by reason of any of the
following, all Company Contributions and ESOP Contributions will become one
hundred percent (100%) Vested to the Participant:
(a) Total and Permanent Disability
(b) Death
(c) Termination of the Plan, (or partial termination of the Plan if the
Participant is affected thereby), or
(d) Complete and final discontinuance of Company Contributions.
If a Participant terminates employment at a time when his/her Company
Contributions and ESOP Contributions are Unvested, such Unvested contributions
shall be forfeited upon the earlier of (i) the distribution to the Participant
of the Vested portion of his/her Account or (ii) the close of five consecutive
Severance Periods after such termination of employment.
SECTION 3. VESTING OF RESTORED COMPANY CONTRIBUTIONS AND ESOP CONTRIBUTIONS
A Participant who has restored previously forfeited ESOP Contributions or
Company Contributions (as described in Section 7 of Article XI) shall have these
restored ESOP Contributions and Company Contributions vest provided restoration
is made prior to the attainment of five (5) years Continuous Credited Service by
the Participant.
22
ARTICLE VII
SUSPENSION OF PARTICIPATION
SECTION 1. SUSPENSION RESULTING FROM JOB TRANSFER
In the event that a Participant is transferred to a job with the Company which
renders such Participant ineligible to participate actively in this Plan, then,
in such event, such Participant's Active Participation shall be deemed to be
suspended. However, during the period of suspension the Participant's Account
shall continue to be vested as if no suspension had occurred.
Such suspension shall remain in effect until:
(a) the Participant is transferred to a job whereby he/she would be
re-eligible to be an active Participant in the Plan, or
(b) a termination occurs pursuant to Article XI of the Plan.
23
ARTICLE VIII
APPLICATION OF COMPANY CONTRIBUTIONS FORFEITED
SECTION 1. APPLICATION OF FORFEITURES
All Company Contributions and ESOP Contributions forfeited in accordance with
Article VI, Section 2 shall be used to reduce the Company's subsequent
contributions to the Plan. However, such forfeited Company Contributions and
ESOP Contributions will be restored to the Participant's Account should the
Participant exercise restoration rights as defined in Section 7 of Article XI.
In the event that the Plan is terminated, any forfeitures not previously applied
to reduce Company Contributions shall be credited (on the basis of each
individual Participant's current year Compensation as a ratio to the total
current year Compensation of all Participants) to the Accounts of all
Participants entitled to share in the allocation of Company Contributions at the
time of such termination.
SECTION 2. TREATMENT OF FORFEITED SECURITIES
Forfeited securities shall be converted to cash and be invested by the Trustee;
such cash shall be applied to the reduction of the next contribution by the
Company.
Upon forfeiture of a portion of the Company Contributions or ESOP Contributions,
the Trustee shall sell such amount of the securities allocated to the
Participant's Account as may be necessary to effect the forfeiture.
24
ARTICLE IX
WITHDRAWAL OF CONTRIBUTIONS
SECTION 1. WITHDRAWAL EVENTS
No amount may be withdrawn by a Participant from Company Wage Reduction
Contributions, Company Contributions, or ESOP Contributions earlier than the
occurrence of hardship (see Section 2 below) or one of the following events:
(a) the Participant's retirement, death, Total and Permanent Disability,
or termination of Employee status;
(b) termination of the Plan without establishment of a successor plan;
(c) the Participant's attainment of age 59 1/2;
(d) the sale or other disposition by the Company to an unrelated
corporation, which does not maintain the Plan, of substantially all of
the assets used in a trade or business, but only with respect to
employees who continue employment with the acquiring corporation;
(e) the sale or other disposition by the Company of its interest in a
subsidiary to an unrelated entity which does not maintain the Plan,
but only with respect to employees who continue employment with the
subsidiary.
(f) An Eligible Rollover Distribution by a Distributee to an Eligible
Retirement Plan in accordance with the provisions of Article XI,
Section 6.
SECTION 2. HARDSHIP WITHDRAWALS
If a Participant requests a hardship withdrawal prior to the occurrence of an
event in Section 1 above, such request will require the consent of the Committee
and such consent shall be given only if, under uniform rules, the Committee
determines that
(a) the purpose of the withdrawal is to meet immediate and heavy financial
needs of the Participant,
(b) the amount does not exceed such financial need, and
(c) the amount of the withdrawal is not immediately available from the
resources of the Participant.
A withdrawal made on account of hardship must be made first, from Company
Contributions and earnings (if Vested) and then only from Company Wage Reduction
Contributions of the Participant, and not from earnings credited thereto.
25
Employees who make a hardship withdrawal may not make elective contributions for
the tax year following the tax year of distribution, greater than the Code
Section 402(g) limit minus the elective contributions for the year of
distribution.
SECTION 3. FREQUENCY OF WITHDRAWALS
Except for distribution at retirement, disability, or death, [Article XI,
Section 2(b)], withdrawals may not be made more frequently than once in any
twelve (12) month period.
26
ARTICLE X
DESIGNATION OF BENEFICIARY
Each Participant must file with the Committee a written designation of a
Designated Beneficiary or Beneficiaries in the form prescribed by the Committee
with respect to all or part of the securities and cash held for the account of
such Participant. Such Designated Beneficiary shall be a Participant's spouse
or, if he/she has no spouse or his/her spouse consents (in the manner
hereinafter described in this Article) to the designation hereinafter provided
for in this Article, such person or persons other than, or in addition to,
his/her spouse as may be designated by a Participant as his/her death
beneficiary under the Plan. Such a designation may be made, revoked or changed
only by an instrument (in form acceptable to the Committee) which is signed by
the Participant, which includes his/her spouse's written consent to the action
to be taken pursuant to such instrument (unless such action results in the
spouse being named as the Participant's sole Beneficiary), and which is filed
with the Committee before the Participant's death. A spouse's consent required
by this Article shall be signed by the spouse, shall acknowledge the effect of
such consent, shall be witnessed by a member of the Committee or by a notary
public and shall be effective only with respect to such spouse. At any time when
all the persons designated by the Participant as his/her Designated Beneficiary
have ceased to exist, his/her Designated Beneficiary shall be his/her spouse or,
if he/she does not then have a spouse, the Participant's estate. If a
Participant has no spouse and he/she has not made an effective Beneficiary
designation pursuant to this Article, his/her Designated Beneficiary shall be
his/her estate.
27
ARTICLE XI
DISTRIBUTION OF CONTRIBUTIONS
SECTION 1. DISTRIBUTION UPON OCCURRENCE OF EVENTS
Subject to the provisions of Section 3 of this Article, distributions may be
made to a Participant or the Designated Beneficiary, as the case may be, upon
the occurrence of the following stated events:
(a) Termination of a Participant's participation in the Plan, or cessation
of the Participant's right to share in the allocation of the Company
Contributions or ESOP Contributions made to the Plan (other than a
temporary cessation on account of a temporary suspension of
Participant contributions), or
(b) Termination of the Plan without establishment of a successor plan, or
(c) The sale or other disposition by the Company to an unrelated
corporation, which does not maintain the Plan, of substantially all of
the assets used in a trade or business, but only with respect to
employees who continue employment with the acquiring corporation, or
(d) The sale or other disposition by the Company of its interest in a
subsidiary to an unrelated entity which does not maintain the Plan,
but only with respect to employees who continue employment with the
subsidiary.
Effective as of January 1, 1998, if the present value of any nonforfeitable
accrued benefit, at the time of distribution or at the time of any subsequent
distribution, exceeds $5,000 such benefit may not be immediately distributed
without the consent of the Participant.
SECTION 2. TERMINATION OF A PARTICIPANT'S ACTIVE PARTICIPATION IN THE PLAN
A Participant's Active Participation in the Plan will be terminated if he/she:
(a) Voluntarily elects to cease contributions to the Plan,
(b) Terminates employment from the Company voluntarily or involuntarily,
(c) Retires from the Company under one of its retirement programs,
(d) Suffers a Total and Permanent Disability,
(e) Dies.
(f) Becomes Vested in all Company Contributions and ESOP Contributions in
his/her Account and remains in a job whereby he/she is ineligible to
be an active Participant in the Plan.
28
SECTION 3. DISTRIBUTION PRIOR TO VESTING OF COMPANY CONTRIBUTIONS AND ESOP
CONTRIBUTIONS
If a Participant terminates employment with the Company, either voluntarily or
involuntarily, before the Company Contributions or ESOP Contributions are
Vested, the Participant will receive the then current market value of the larger
of:
(a) the Participant's Pre-Tax Savings Plan Contributions, plus all
earnings (not to exceed the current market value of the entire
Account), or
(b) the current market value of the entire Account less the Unvested
Company Contributions and Unvested ESOP Contributions.
If a Participant, who remains an employee of the Company but is not at least age
59 1/2, voluntarily elects to withdraw from the Plan before any of the Company
Contributions or ESOP Contributions are Vested, he/she will receive the amount
described above in this Section 3, less the then current market value of his/her
Pre-Tax Savings Plan Contributions subaccount. Such Participant shall, upon
attainment of age 59 1/2, receive the then current market value of his/her
Pre-Tax Savings Plan Contributions subaccount.
SECTION 4. DISTRIBUTION AFTER VESTING OF COMPANY CONTRIBUTIONS AND ESOP
CONTRIBUTIONS
Subject to Article XI, Section 1, if a Participant terminates employment with
the Company after Company Contributions and ESOP Contributions are Vested, the
Participant will receive the then current market value of the entire Account
when he/she elects to make a voluntary withdrawal.
If a Participant, who remains an Employee of the Company but is not at least age
59 1/2, voluntarily elects to withdraw from the Plan after Company Contributions
and ESOP Contributions are Vested, or remains in a job whereby he/she is
ineligible to be an active Participant in the Plan, he/she will receive the
amount described above in this Section 4, less the then current market value of
his/her Pre-Tax Savings Plan Contributions subaccount. Such Participant shall,
upon attainment of age 59 1/2, receive the then current market value of his/her
Pre-Tax Savings Plan Contributions subaccount. If a Participant who remains
employed by the Company and who has attained age 59 1/2, voluntarily elects to
withdraw from the Plan after he/she becomes Vested in Company Contributions and
ESOP Contributions credited to his/her Account, he/she will receive the entire
amount described in this Section 4 as if he/she had terminated employment with
the Company.
SECTION 5. DISTRIBUTION UPON RETIREMENT, DEATH OR DISABILITY
If a Participant dies, retires or suffers a Total and Permanent Disability, the
Participant or Designated Beneficiary will receive the then current market value
of his/her Account. Distribution will not occur upon retirement or Total and
Permanent Disability in the event a Participant elects to defer the commencement
of distribution in accordance with Section 6 of this Article.
SECTION 6. DISTRIBUTION OF ACCOUNTS
29
(a) Form of Distribution of Accounts to a Participant During His/Her
Lifetime:
If a Participant terminates participation in the Plan, due to a
separation from service or, if earlier, age 59 1/2, distribution shall
be made, subject to other limitations of this Plan, by one of the
following methods as he/she shall elect:
(1) Payment in cash, or
(2) If the Participant has selected one or more of the Investment
Options:
(i) payment in cash,
(ii) payment in securities held for the Participant's Account,
or
(iii) a combination of (i) and (ii) above at the option of the
Participant.
(b) Distribution of Cash and/or Securities
Distribution of cash and/or securities to a Participant who either (i)
retires from the Company under one of its retirement programs, (ii) suffers
a Total and Permanent Disability, or (iii) dies, or (iv) becomes Vested in
all Company Contributions and ESOP Contributions in his/her Account and
remains in a job whereby he/she is ineligible to be an active Participant
in the Plan, shall be made, at the Participant's or Designated
Beneficiary's option, in one of the following forms:
(1) A single distribution to be received within ninety (90) days from
the date the Participant terminated participation in the Plan,
(2) Two (2) installment distributions, with the first installment to
be at least fifty percent (50%) of the Participant's Account
balance (as determined in Section 3, 4 or 5 of this Article) and
to begin within ninety (90) days from the date the Participant
terminated participation in this Plan, and the second and final
installment to include the remainder of the Account balance and
to be received within twenty-four (24) months after the date the
Participant terminated participation in this Plan.
(3) For events described in Section 1(c) or 1(d) of this Article,
distribution will be made in a lump sum as provided by Section
401(k)(10) of the Code.
Distribution of cash and/or securities to a Participant who voluntarily
elects to withdraw from the Plan or terminates employment from the Company,
voluntarily or involuntarily, shall be made in a single distribution to be
received within ninety (90) days from the date the Participant terminated
participation in the Plan.
Notwithstanding the foregoing, a Participant who retires from the Company
under one of its retirement programs (except a deferred vested pension) may
elect to defer the commencement of distribution and remain a Participant in
this Plan until no later than
30
April 1 of the calendar year following the calendar year in which he/she
attains age 70-1/2.
Should the Participant fail to select a form of distribution as previously
described, the final distribution will be made in a single distribution as
described in Section 6(b) (1) of this Article, in the form of the
Investment Option(s) then in the Account.
If a Participant should die before (all) distribution(s) has (have) been
made, such distribution(s) shall be made to the Designated Beneficiary.
(c) Distribution in Case of the Death of a Participant While an Employee
In the event of the death of a Participant while an Employee, distribution
shall be made in accordance with Article X. Each Designated Beneficiary
shall make an appropriate election as provided in Section 6(b) of this
Article.
If the Designated Beneficiary should die before the final distribution has
been made then such final distribution shall be made to the legally
appointed representative(s) of the Designated Beneficiary.
(d) Direct Rollover of Eligible Rollover Distributions
This subsection applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this subsection, a
Distributee, as defined under paragraph (1)(iii) of this subsection, may
elect, at the time and in the manner prescribed by the plan administrator,
to have any portion of an Eligible Rollover Distribution, as defined under
paragraph (1)(i) of this subsection, paid directly to an Eligible
Retirement Plan, as defined under paragraph (1)(ii) of this subsection,
specified by the Distributee in a Direct Rollover, as defined under
paragraph (1)(iv) of this subsection.
(1) Definitions
(i) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of
the balance to the credit of the Distributee except that an
Eligible Rollover Distribution does not include any
distribution to the extent such distribution is required
under section 401(a)(9) of the Code, any distribution that
is one of a series of substantially equal periodic payments
(paid not less frequently than annually) over the life (or
life expectancy) of the distributee or the joint lives (or
life expectancies) of the distributee and a designated
beneficiary or for a specified period of ten years or more,
the portion of any distribution that is not includible in
gross income, such other amounts specified in Treasury
regulations and rulings, notices or announcements issued
under Section 402(c) of the Code, and, effective January 1,
1999, any "hardship" distribution (as defined in Code
Section 401(k)).
31
(ii) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
(iii) Distributee: A Distributee includes a Participant or the
Participant's surviving spouse or Participant's former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code.
(iv) Direct Rollover: A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the
Distributee.
(e) Miscellaneous Provisions Relating to Distributions
Any distribution to which a Participant or the Designated Beneficiary
may be entitled shall have deducted therefrom all incident expenses
and/or taxes.
The Committee shall be notified upon forms prescribed by it as to all
actions which are to be taken under this Section by a Participant or
Designated Beneficiary.
The Trustee shall be notified in writing by the Committee concerning
any action required by the Trustee to be taken under this Section.
Unless the Participant elects otherwise, in no event shall any
retirement, death, or disability benefit commence later than the
sixtieth (60th) day after the latest of the close of the Plan Year in
which (1) occurs the date on which the Participant attains the earlier
of age 65 or the normal retirement age specified hereunder (if other
than 65) (whether or not by reason of reference to the Company's
retirement programs), (2) occurs the tenth anniversary of the year in
which the Participant commenced participation in the Plan, or (3) the
Participant terminates service with the Company.
(f) Provision Pursuant to Code Section 401(a)(9)
All distributions required under this Article XI shall be determined
and made in accordance with the proposed regulations under Code
Section 401(a)(9) including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed
regulations, as may be amended or promulgated from time to time.
(1) Notwithstanding any other provision of the Plan, for individuals
who are five percent (5%) owners (as defined in Section 416 of
the Code) or who
32
attain age seventy and one-half (70 1/2) in Plan Years prior to
2003, the entire interest of each such Participant under the Plan
shall be distributed, commencing not later than April 1 of the
calendar year following the calendar year in which he/she attains
age seventy and one-half (70 1/2).
For individuals who are not five percent (5%) owners (as defined
in Section 416 of the Code) and who attain age seventy and
one-half (70 1/2) in Plan Years after 2002, the entire interest
of each such Participant in the Plan shall be distributed to
him/her by April 1 of the calendar year following the later of
either:
(i) the calendar year in which the Employee attains age seventy
and one-half (70-1/2), or
(ii) the calendar year in which the Employee retires.
Such distribution shall be (1) in accordance with regulations
prescribed by the Secretary of the Treasury, over the life of
such Participant and his/her Designated Beneficiary, or (2) in
accordance with such regulations, over a period not extending
beyond the life expectancy of such Participant or the life
expectancy of such Participant and his/her Designated
Beneficiary.
(2) If distribution of a Participant's interest under the Plan has
begun in accordance with paragraph (1) of this subsection and
such Participant dies before his/her entire interest has been
distributed to him/her, the remaining portion of such interest
shall be distributed to his/her Designated Beneficiary at least
as rapidly as under the method of distribution being used under
such paragraph (1) as of the date of his/her death.
(3) If a Participant dies before the distribution of his/her interest
under the Plan has begun in accordance with paragraph (1) of this
subsection, the entire interest of the Participant shall be
distributed to his/her Designated Beneficiary within five (5)
years after such Participant's death; provided, however, that
such five-year rule shall not be applicable to any portion of the
Participant's interest under the Plan which is payable to any
individual designated by the Participant as his/her Designated
Beneficiary if:
(i) such portion will be distributed (in accordance with
regulations prescribed by the Secretary of the Treasury)
over the life of such Designated Beneficiary, and
(ii) such distributions to such Designated Beneficiary begin not
later than one year after the date of the Participant's
death or such later date as the Secretary of the Treasury
may by regulations prescribe or, if such Designated
Beneficiary is the Participant's surviving spouse, not later
than the date on which the Participant would have attained
age 70-1/2.
33
(4) If the Participant's surviving spouse is his/her Designated
Beneficiary and such spouse dies before the distributions to such
spouse begin, paragraph (3) shall be applied as if the surviving
spouse were the Participant.
(5) Under regulations prescribed by the Secretary of the Treasury,
for purposes of this subsection, any amount paid to a child shall
be treated as if it had been paid to the surviving spouse if such
amount will become payable to the surviving spouse upon such
child reaching majority (or other designated event permitted
under such regulations).
SECTION 7. RESTORATION OF FORFEITED COMPANY CONTRIBUTIONS AND ESOP CONTRIBUTIONS
Each Participant who has forfeited any Company Contributions or ESOP
Contributions has the right to gain restoration of the forfeited Company
Contributions and ESOP Contributions. A Participant who (i) terminates
participation in this Plan pursuant to Sections 2(a), (b) or (c) of this Article
XI, (ii) ceases to be an Employee of the Controlled Group, (iii) forfeits his
Unvested Company Contributions and ESOP Contributions pursuant to clause (i) of
the third paragraph of Section 2 of Article VI and (iv) subsequently becomes
rehired by the Controlled Group, will have the right within the earlier of (1)
five (5) years after re-employment or (2) the close of five (5) consecutive
Severance Periods commencing after the date of distribution, to restore to the
Account the dollar value of the previously forfeited Company Contributions and
ESOP Contributions by contributing back to the Account the total lump sum amount
(dollar value as of the date of distribution) of the distribution which caused
the forfeiture.
SECTION 8. DETERMINATION OF VALUE
Determinations of value hereunder shall be made pursuant to an annual valuation
by the Trustee at the fair market value as of the close of business on the
annual valuation date to be established by the Trustee. If no such date is
established, the annual valuation date shall be the last day of the Plan Year.
Interim valuations, or partial valuations of one or more of the investment
funds, may occur upon the direction of the Committee. The then current value of
a Participant's Account, or any part thereof, as of any date, shall be
determined by reference to the valuation (whether or not the annual valuation)
coincident with or last preceding the date as of which such Account is to be
valued.
34
ARTICLE XII
MAXIMUM CONTRIBUTION LIMITATION
SECTION 1. PROVISION PURSUANT TO CODE SECTION 415(c)
(a) MAXIMUM ANNUAL ADDITION: The "annual addition" to a Participant's
Account shall not exceed the lesser of (i) $30,000 (as adjusted,
effective January 1, 1995, pursuant to Section 415(d) of the Code) or
(ii) twenty-five percent (25%) of the Participant's Compensation (as
defined in paragraph (d) below) for that Plan Year. The Compensation
limitation in (a)(ii) above shall not apply to amounts treated as
Annual Additions under Sections 415(l)(1) or 419A(f)(2) of the Code.
The term "annual addition" means the amount allocated to a
Participant's Account during the limitation year (as hereinafter
defined) that constitutes:
1. Forfeitures;
2. all Employee contributions;
3. amounts allocated to an individual medical account, as defined in
section 415(1)(2) of the Code, which is part of a pension or
annuity plan maintained by the Company are treated as annual
additions to a defined contribution plan. Also amounts derived
from contributions paid or accrued which are attributable to
post-retirement medical benefits, allocated to the separate
account of a key employee, as defined in section 419A(d)(3) of
the Code, under a welfare benefit fund, as defined in section
419(e) of the Code, maintained by the Company are treated as
annual additions to a defined contribution plan; and
4. all Company Contributions
Any amount which may be excluded from the computation of annual
additions under Treas. Reg. 1.415-6 shall be excluded from such
computation.
In addition, all defined contribution plans of the Company, terminated
or not, shall, for purposes of these limitations, be considered as one
Plan.
(b) LIMITATION YEAR: For purposes of determining "annual additions", the
Limitation Year shall be the Plan Year.
(c) In the case of a group of Companies which constitutes a controlled
group of corporations (as defined in Section 1563(a) of the Code), all
such Companies shall be considered a single Company or employer for
purposes of applying the limitation of Section 415 of the Code.
(d) COMPENSATION. For purposes of this Section 1, Compensation shall mean
compensation within the meaning of Section 415(c)(3) of the Code and
the regulations thereunder. For limitation years beginning on and
after January 1,
35
2001, for purposes of applying the limitations described in this
section, compensation paid or made available during such limitation
years shall include elective amounts that are not includible in the
gross income of the employee by reason of Section 132(f)(4) of the
Code.
(e) ADJUSTMENT FOR EXCESSIVE CONTRIBUTION. If, as a result of the
allocation of forfeitures, a reasonable error in estimating a
Participant's Compensation, or under other facts and circumstances
provided for under Treasury Regulation 1.415- 6(b)(6), the annual
addition to a Participant would exceed the maximum provided in this
Section 1, the administrator shall return any voluntary Participant
contributions credited for the Limitation Year to the extent the
return would reduce the excess amounts in the Participant's Accounts;
to the extent excess amounts continue to exist, the excess amounts
shall be allocated and reallocated to other Participants in the Plan.
However, if such allocation or reallocation of the excess amounts
causes the limitations of Section 415 to be exceeded with respect to
each Plan Participant for the Limitation Year, then such amounts shall
be held unallocated in a suspense account (the "Section 415 Suspense
Account"). If a Section 415 Suspense Account is in existence at any
time during a particular Limitation Year, other than the Limitation
Year described in the preceding sentence, all amounts in the Section
415 Suspense Account shall be allocated and reallocated (subject to
the limitations of Section 415) before any contributions by the
Company which would constitute annual additions may be made to the
Plan for that Limitation Year. The Section 415 Suspense Account shall
not share in any earnings or losses of the Trust Fund.
SECTION 2. PROVISION PURSUANT TO SECTION 415(e) OF THE CODE
This Section 2 shall not apply after December 31, 1999.
(a) Except as otherwise provided in Section 415(e) of the Code, in any
case in which an individual is a participant in both a defined benefit
plan and a defined contribution plan maintained by the Affiliated
Group, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Plan Year commencing on or after
the Effective Date shall not exceed 1. For purposes of the preceding
sentence,
(1) the defined benefit plan fraction for any Plan Year is a fraction
(i) the numerator of which is the projected annual benefit of the
participant under the plan (determined as of the close of the
Plan Year), and (ii) the denominator of which is the lesser of
(A) the product of 1.25, multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for such Year, or
(B) the product of 1.4, multiplied by the amount which may be
taken into account under Section 415(b)(l)(B) of the Code with
respect to such participant under the plan for such Year; and
(2) the defined contribution plan fraction for any Plan Year is a
fraction (i) the numerator of which is the sum of the annual
additions to the participant's
36
account as of the close of the Plan Year and for all prior Plan
Years, and (ii) the denominator of which is the sum of the lesser
of the following amounts determined for such Plan Year and for
each prior Plan Year of service with the Affiliated Group;
(A) the product of 1.25, multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for such Plan
Year, or
(B) the product of 1.4, multiplied by the amount which may be
taken into account under Section-415(c)(1)(B) of the Code
with respect to such participant under such plan for such
Plan Year.
(b) Such reductions as are necessary to comply with the limitations of
this Section with respect to a Participant in this Plan shall be made
in his/her accrued benefit in accordance with applicable law;
provided, however, that reductions shall first be made in accrued
benefits in accordance with the provisions of any defined contribution
plan of a controlled group member in which the Participant also
participates prior to reduction in annual additions pursuant to a
defined benefit plan, and to that end the Company shall reduce such
accrued benefits to the extent necessary so that the defined
contribution fraction set forth in Subsection (a) (1) of this Section
is reduced so that such limitations are not exceeded, and reduction of
annual additions shall then be made in accordance with the provisions
of this Plan as are necessary to comply with the limitations of this
Section.
SECTION 3. ANTI-DISCRIMINATION TEST
Notwithstanding the terms of the Plan, the Pre-tax Savings Plan Contributions of
a Participant shall be limited, to the extent necessary to satisfy the
anti-discrimination tests set forth in Code Section 401(k)(3). For each Plan
Year the Average Actual Deferral Percentage for the Highly Compensated Employees
with respect to any Plan Year shall not exceed the greater of (a) or (b):
(a) The average Actual Deferral Percentage for the Eligible Employees who
are Non-Highly Compensated Employees for the Plan Year multiplied by
1.25, or
(b) The Actual Deferral Percentage for the Eligible Employees who are
Non-Highly Compensated Employees multiplied by 2; provided, however,
that the Average Actual Deferral Percentage for the Highly Compensated
Employees may not exceed the Actual Deferral Percentage for the
Eligible Employees who are Non-Highly Compensated Employees by more
than two (2) percentage points (or such lesser amount as determined by
the Secretary of Treasury).
If, at any time during a Plan Year, the Actual Deferral Percentage for the
Highly Compensated Employees exceeds or is reasonably expected by the Committee
to exceed the greater of (a) or (b) above, then the Committee, in its sole and
absolute discretion, shall distribute the Excess Contributions (as hereinafter
defined) and income allocable to the contributions to the Highly Compensated
Employees on whose behalf such Excess Contributions were made. For purposes of
this Section 3, Excess Contributions shall mean the amount determined pursuant
to Section 401(k)(8)(B) of the Code. A Participant's Excess Contribution shall
be reduced, as determined
37
by Secretary of the Treasury, by the amount of any Excess Deferrals which are
distributed to the Participant pursuant to Section 1 of Article III. Any
distribution of the Excess Contributions shall be made to each Highly
Compensated Employee based on his respective portion of the Excess Contributions
by reducing the amount of Pre-Tax Savings Plan Contributions actually paid over
to the Trust on behalf of the Employee whose Pre-Tax Savings Plan Contribution
is the greatest of the Highly Compensated Employees until such Participant's
Pre-Tax Savings Plan Contribution is equal to the Pre-Tax Savings Plan
Contribution of the Highly Compensated Employees whose Pre-Tax Savings Plan
Contribution is the second greatest and continuing to prospectively reduce the
amount of Company Contributions to be paid over to the Trust on behalf of the
Highly Compensated Employees in a like manner until the Actual Deferral
Percentage of the Highly Compensated Employees equals (by rounding up) for the
Plan Year the greater of (a) or (b) above.
The income allocable to a Participant's Excess Contributions shall be determined
by multiplying the income allocable to the Participant's Pre-tax Savings Plan
Contribution by a fraction, the numerator of which is the Participant's Excess
Contribution and the denominator of which is the Participant's balance in his
Company Wage Reduction Contribution Account as of the last day of the Plan Year.
The Excess Contributions which would otherwise be distributed to the Participant
shall be adjusted for income; shall be reduced, in accordance with regulations,
by the amount of Excess Deferrals distributed to the Participant; shall, if
there is a loss allocable to the Excess Contributions, in no event be less than
the lesser of the Participant's Accounts under the Plan or the Participant's
Company Wage Reduction Contribution for the Plan Year.
Amounts distributed under this Section 3 shall be treated as a reduction in the
amount of Compensation to be reduced pursuant to Section 1 of Article III by
each Participant.
In calculating the actual deferral percentage for purposes of section 401(k),
the actual deferral ratio of a Highly Compensated Employee will be determined by
treating all cash or deferred arrangements under which the Highly Compensated
Employee is eligible (other than those that may not be permissively aggregated)
as a single arrangement.
This paragraph shall apply until January 1, 1997. In the case of a Highly
Compensated Employee who is one of the ten most Highly Compensated Employees and
is thereby subject to the family aggregation rules of Section 414(q)(6), the
actual deferral ratio (ADR) for the family group (which is treated as one Highly
Compensated Employee) is the ADR determined by combining the elective
contributions, compensation and amounts treated as elective contributions of all
eligible family members. Except to the extent taken into account in the
preceding sentence, the elective contributions, compensation, and amounts
treated as elective contributions of all family members are disregarded in
determining the Actual Deferral Percentages for the groups of Highly Compensated
Employees and nonhighly compensated employees.
This paragraph shall apply until January 1, 1997. In the case of a Highly
Compensated Employee whose ADR is determined under the family aggregation rules,
the determination of the amount of excess contributions shall be made as
follows: The ADR is reduced in accordance with the "leveling" method described
in section 1.401(k)-1(f)(2) of the regulations and the excess
38
contributions are allocated among the family members in proportion to the
contributions of each family member that have been combined.
Failure to correct Excess Contributions by the close of the Plan Year following
the Plan Year for which they were made will cause the Plan to fail to satisfy
the requirements of Code Section 401(k)(3) for the Plan Year for which the
Excess Contributions were made and for all subsequent years they remain in the
Trust Fund. The Company will be liable for a ten percent (10%) excise tax on the
amount of Excess Contributions unless they are corrected within two and one-half
(2 1/2) months after the close of the Plan Year for which they were made.
To the extent required by the Code and Treasury Regulations, the limitations set
forth in Section 2 shall be applied separately to each of the Non-ESOP Feature
and the ESOP Feature. Notwithstanding the foregoing, for purposes of applying
this Section 3 for any Plan Year in which
(a) the ESOP Feature is maintained, and
(b) the requirements of Sections 401(k)(12) and 401(m)(11) of the Code are
not satisfied
a single Actual Deferral Percentage will be calculated for the group of eligible
Employees who are Highly Compensated Employees and a single Actual Deferral
Percentage will be calculated for the group of Eligible Employees who are
Non-Highly Compensated Employees for the Plan Year, notwithstanding the
existence of the ESOP portion of the Plan and the disaggregation rules of
Treasury Regulation Sections 1.401(k)-1(g)(11) and 1.410(b)-7(c)(2), by reason
of the fact that, notwithstanding the ESOP, all Pre-Tax Savings Plan
Contributions made in such Plan Year are allocated to the Pre-Tax Savings Plan
Contribution subaccount of the Participant's Non-ESOP Account in such Plan Year
(including any Pre-Tax Savings Plan Contributions that are invested in Common
Stock) and such account is not part of the ESOP, and all Company Contributions
made in such Plan Year are allocated to the Company Contribution subaccount of
the Participant's Non-ESOP Account in such Plan Year (including any Company
Contributions that are invested in Common Stock) and such account is not part of
the ESOP.
39
ARTICLE XIII
RESERVED
40
ARTICLE XIV
ADMINISTRATION OF THE PLAN
SECTION 1. SAVINGS PLAN COMMITTEE
The Plan shall be administered by the Defined Contribution Plan Committee which
shall be appointed by the Board of Directors of the Company.
The Committee shall consist of at least three (3) members who shall be
designated from time to time by the Board of Directors of the Company, and shall
act by at least a majority of members.
The Committee, by a majority vote of its members, shall appoint a plan
administrator, chairman and secretary. The plan administrator as appointed by
the Committee shall be the "Named Fiduciary" of the Plan with respect to
administrative matters, and the Trustee shall be the "Named Fiduciary" with
respect to the handling of Plan assets.
The Board of Directors shall, from time to time, notify the Trustee of the
number and the identity of the members of the Committee and the Trustee shall be
entitled to rely upon such notices.
SECTION 2. ADMINISTRATION OF THE PLAN BY THE COMMITTEE
The Committee shall adopt such uniform and nondiscriminatory administrative
regulations under the Plan as it shall deem to be necessary or appropriate for
the efficient administration of the Plan.
The Committee shall have sole and absolute discretion to interpret the
provisions of the Plan or Trust Agreement (including, without limitation, by
supplying omissions from, correcting deficiencies in, or resolving
inconsistencies or ambiguities in, the language of the Plan or Trust Agreement),
to make factual findings with respect to any issue arising under the Plan, to
determine the rights and status under the Plan of Participants and other
persons, to decide disputes arising under the Plan and to make any
determinations and factual and other findings with respect to the benefits
payable thereunder and the persons entitled thereto as may be required for the
purposes of the Plan. In furtherance of, but without limiting, the foregoing,
the Committee is hereby granted the following specific authorities, which it
shall discharge in its sole and absolute discretion in accordance with the terms
of the Plan (as interpreted, to the extent necessary, by the Committee):
(a) to resolve questions (including factual questions) arising under the
provisions of the Plan as to any individual's entitlement to become a
Participant;
(b) to determine the amount of benefits, if any, payable to any person
under the Plan (including, to the extent necessary, making any factual
findings with respect thereto); and
(c) to conduct the review procedure specified in Section 3(g) of this
Article.
The Committee shall have full power and authority to administer the Plan and to
interpret its provisions, and its interpretations shall be final and binding
upon the Company, its personnel, the
41
Union, the Trustee and all other parties in interest, subject to the provisions
of Section 3 of this Article.
SECTION 3. FIDUCIARY PROVISIONS
(a) Named Fiduciaries
Among the named fiduciaries under the Plan shall be the Company, and
the Trustee, investment advisors or insurance companies, each of which
shall have such powers, duties, responsibilities and authority as
shall be specified in the Plan or trust agreement entered into for the
purpose of managing the Trust Fund, subject to any delegation thereof
as provided in the Plan or such trust agreement. Any other person,
entity, committee, board, department, office, or identifiable part of
any legal entity may be designated by the Company as a named fiduciary
by an instrument signed by the Company, delivered to such designated
named fiduciary and to the Trustee and accepted in writing by the
designated named fiduciary. Any such designation may be terminated at
any time by the Company or by such named fiduciary by written notice
delivered to the other of them and to the Trustee.
(b) Liability of Fiduciaries
To the extent permitted by law, (1) neither the Company nor any
director, officer, or Employee shall be personally liable upon any
contract or other instrument made or executed by him/her or it or in
his/her or its behalf in the administration of the Plan or the Trust
Fund; (2) neither the Company nor any director, officer, or Employee
who is a fiduciary shall be liable for the neglect, omission or
wrongdoing of any other fiduciary; (3) the Company, person, committee
or board and each member thereof to whom the Company delegates (or the
Plan or trust agreement assigns) any duty with respect to the Plan or
Trust Fund, may rely and shall be fully entitled to act upon the
advice of counsel, who may be of counsel for the Company, and upon the
opinion, certificate, valuation, report, recommendation or
determination of an actuary appointed by the Company to assist in the
operation of the Plan; (4) the Company and each director, officer, or
Employee who is a fiduciary shall be solely responsible for his/her
own acts or omissions; and (5) if any responsibility of the Company or
of a director, officer, or Employee who is a fiduciary is allocated to
any other person or if a person is designated to carry out any
responsibility in accordance with the provisions of the Plan or trust
agreement, then such fiduciary shall not be responsible for any act or
omission of such person in carrying out such responsibility.
(c) Delegation of Fiduciary Duties
The Company may delegate to any person, entity, committee, board,
department, office, or identifiable part of any legal entity any one
or more powers, functions, duties or responsibilities with respect to
the Plan or the Trust Fund, provided that no such power, function,
duty or responsibility which is assigned to a fiduciary
42
(other than the Company) pursuant to some other Section of the Plan or
the trust agreement shall be so delegated without the written consent
of such fiduciary.
Any delegation pursuant to the preceding provisions: (1) shall be
signed by the Company and be delivered to and accepted in writing by
the delegate, (2) shall contain such provisions and conditions
relating to such delegation as the Company deems appropriate, (3) may
be amended from time to time by written agreement signed on behalf of
the Company and the delegate and (4) may be revoked (in whole or in
part) at any time by written notice from the Company delivered to the
delegate or from the delegate to the Company.
(d) Personal Liability of Non-Fiduciaries
Except for gross neglect or malfeasance, no non-fiduciary officers,
directors or Employees of the Company shall be personally liable for
acts done hereunder or related hereto, or for the making, retention or
sale of any contract or contracts made as herein provided, or for the
failure to invest or reinvest any funds or for any loss to or
diminution of the Trust Fund, nor shall any of them be personally
liable for or answerable to any Participant or any other person in
connection with any exercise of discretion under the terms of this
instrument relating to the payment or non-payment of benefits.
(e) Defense of Fiduciaries and Non-Fiduciaries
The Company shall, at its expense, defend or provide for the defense
of any or all fiduciary or non-fiduciary officers, directors or
employees of the Company against any such claims, allegations, suits,
or charges relating to or incidental to the above matter, and shall
continue to do so in any given cases, unless and until it shall
clearly appear that gross neglect or malfeasance is involved in any
such particular case.
(f) Claims for Benefits
Claims for benefits from this Plan shall be submitted to the
designated representative of the Committee on such forms as may be
designated by the Committee.
(g) Appeals Procedure
Upon the denial of any form of benefit, either partial or total, the
Participant or Designated Beneficiary shall have the right to receive
from the Committee a written notice stating:
(1) The specific reason for denial,
(2) The pertinent Section of the Plan on which the denial was based,
43
(3) Other information the Committee may feel necessary to explain the
denial, and
(4) An explanation of the claims review procedure.
The Participant, Designated Beneficiary or a duly authorized
representative, may, within ninety (90) days of such denial, file with the
Plan Administrator an appeal for review of denial of benefits. In
considering any appeal pursuant to this Section 3(g), the Plan
Administrator shall have the same powers to interpret the Plan and make
factual findings with respect thereto as are granted to the Committee under
Section 2 hereof. The Participant, Designated Beneficiary or duly
authorized representative shall have the right to examine all pertinent
documents relating to the original denial within sixty (60) days of the
filing date of such appeal, the Committee shall review such appeal and
provide the Participant a decision as to denial or approval. Such decision
shall be in writing and shall cover all pertinent facts considered in
making the decision.
SECTION 4. ACTION BY THE COMPANY
Any action by the Company under this Plan shall be made pursuant to
authorization of its Board of Directors.
SECTION 5. DELEGATION OF TRUSTEE'S FUNCTIONS
The Trustee and the Committee may, by agreement in writing, arrange for the
delegation by the Trustee to the Company of any of the functions of the Trustee,
except the custody and distribution of assets, the voting of Common Stock held
by the Trustee, and the purchase and sale or redemption of securities.
SECTION 6. DUTIES OF THE TRUSTEE
The Trustee shall keep accurate and detailed accounts of all investments,
receipts and disbursements and other transactions.
The Trustee shall annually, following the close of each Plan Year, revalue and
adjust each Participant's Account at its current market value at the end of the
Plan Year.
The Trustee shall furnish at least annually to each Participant a statement
showing the status of his/her Account under the Plan. This statement shall be
deemed to have been accepted as correct unless written notice to the contrary is
received by the Trustee within thirty (30) days after its mailing or delivery
(if distribution is other than by mail) to a Participant.
SECTION 7. ACCOUNTS OF THE TRUSTEE
The annual financial statement of the Plan shall be audited annually by auditors
selected by the Company.
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SECTION 8. RECORDS
The records of the Trustee, Committee and the Company shall be conclusive with
respect to all matters involved in the administration of this Plan.
SECTION 9. VOTING OF COMMON STOCK
(a) Each Participant shall have the right to direct the Trustee as to the
manner in which voting rights with respect to shares of Common Stock
held in the Participant's Account shall be exercised.
(b) In order to implement the voting rights granted in this Section, the
Company shall furnish to the Trustee such information as will be
distributed to shareholders of the Company in connection with each
such vote and a form for the use by Participants in directing the
Trustee as to the manner in which voting rights shall be exercised
(the "Documents"), in quantities approximately equal to the number of
Participants holding shares of Common Stock in Accounts at the time of
such distribution. The Trustee shall use its best efforts to
distribute or cause to be distributed to each Participant the
Documents as soon as practicable following the furnishing of the
Documents to the Trustee. The Trustee will follow the written
directions of each Participant with respect to the voting of the
shares of Common Stock held in such Participant's Account, provided
that such written directions are received by the Trustee by the close
of business two (2) days prior to the time such shares must be voted.
Any such written direction by a Participant to the Trustee shall be
effective as of the date such direction is received by the Trustee.
Each Participant shall be permitted to revoke or change such
direction, provided such revocation or change is received in writing
by the Trustee by the close of business two (2) days prior to the time
such shares of Common Stock must be voted.
(c) In the absence of written direction from a Participant in accordance
with Section 9(b) of this Article, the Trustee shall vote all shares
of Common Stock held in such Participant's Account in the same manner
in which the Trustee is directed by Participants, pursuant to Section
9(b) of this Article, to vote the majority of the aggregate shares of
Common Stock held in such Participants' Accounts unless the Trustee is
required, by ERISA, to vote the stock in a different manner.
(d) The right granted to each Participant pursuant to this Section 9 to
direct the manner in which shares of Common Stock allocated to such
Participant's Account are voted, and the provisions instructing the
Trustee regarding the manner in which voting rights with respect to
such shares shall be exercised in the absence of written directions
from a Participant, shall include the manner in which the rights with
respect to corporate action by shareholder consent is exercised.
(e) The Designated Beneficiary of each Participant shall be entitled to
receive all distributions of Documents and to exercise all of the
rights granted to each such Participant pursuant to this Section 9 in
the event of the death of such Participant.
45
SECTION 10. NOTICES
All notices, reports and statements given, made, delivered or transmitted to a
Participant shall be duly given, made, delivered or transmitted as the Committee
may deem appropriate.
All directions, notices and other communications from Participants to the
Committee shall be in such form as may be prescribed by the Committee.
Such written directions, notices and other communications shall be mailed by
first class mail or delivered to the secretary of the Committee and shall be
deemed to have been given when received by the secretary or his/her duly
authorized representative.
SECTION 11. COSTS AND EXPENSES
Except as provided in Article XV Section 3 with respect to transaction expenses,
all costs and expenses incurred in the administration of the Plan shall be paid
by the Company; provided, however, that any taxes which may be imposed on the
income or the assets of the trust shall be paid out of the assets in the hands
of the Trustee and shall be charged ratably against the Accounts of the
Participants. Notwithstanding the foregoing, any taxes incurred by reason of
specific investments or transactions shall be charged against those Accounts of
the Participants which were involved in such investments or transactions on the
basis of the respective interests of such Accounts in the investments or
transactions generating such tax liability.
SECTION 12. MISCELLANEOUS
(a) Construction of Agreement
The Plan shall be governed by and construed in accordance with the
laws of the State of Ohio, to the extent those laws have not been
superseded by Federal law (which shall otherwise apply).
(b) Participant's Rights
Participation in the Plan by a Participant shall in no way affect any
of the Company's rights as contained in the Basic Labor Agreement
between the Company and the Union.
(c) Headings
The headings and captions contained in this document are for
convenience of reference only, and are not deemed to constitute a part
of the Plan.
(d) Against Public Policy
Should any provision (or part of any provision) of this Plan be
determined by a court of competent jurisdiction to be contrary to law
or unenforceable as a matter of public policy, such provision shall be
considered severable, and this Plan shall be considered not to include
the provision in issue. The Plan shall be construed
46
by the Committee, by the Plan Administrator, and all other persons
relying on this document as though such provision (or part thereof)
did not exist, and the Plan shall be applied and enforced in the
manner determined by the Plan Administrator to be most nearly
consistent with the deleted provision as is permissible under law and
public policy.
(e) Certain Reversions to the Company Permitted
Reversions of contributions to the Company will be permitted to the
extent provided by Section 403(c) of ERISA.
Any contribution made by the Company because of a mistake of fact must
be returned to the Company within one year of the contribution.
In the event the deduction of a contribution made by the Company is
disallowed under section 404 of the Code, such contribution (to the
extent disallowed) must be returned to the Company within one year of
the disallowance of the deduction.
In the event that the Commissioner of Internal Revenue determines that
the plan is not initially qualified under the Internal Revenue Code,
any contribution made incident to that initial qualification by the
Company must be returned to the Company within one year after the date
the initial qualification is denied, but only if the application for
the qualification is made by the time prescribed by law for filing the
Company's return for the taxable year in which the plan is adopted, or
such later date as the Secretary of the Treasury may prescribe.
(f) Payment to Minor or Incompetent Person
In the event that any benefit payable under this Plan is payable to or
for the benefit of a minor, an incompetent person, or other person
incapable of receipting therefor, such benefit shall be deemed paid
when paid to such person's guardian or to the party providing or
reasonably appearing to provide for the care of such person, and such
payment shall fully discharge the Trustee, the Plan Administrator, the
Company and all other parties with respect thereto.
(g) Forfeiture if Participant or Designated Beneficiary Cannot Be Located
In the event that any benefit payable under this Plan to any
Participant or Designated Beneficiary cannot be paid because the
proper payee cannot be located or identified by the Trustee, such
benefit shall be deemed forfeited thirty-six (36) months from the date
on which the Trustee or Plan Administrator first attempted to locate
such payee, provided, however, that upon presentation by such proper
payee of a subsequent claim for such forfeited benefit, the full
amount of the forfeited benefit shall be restored.
47
(h) Merger or Consolidation
In the event of the merger or consolidation of this Plan (or any part
thereof) into any other plan, or the transfer to or from this Plan of
any of the assets held for the benefit of Participants and Designated
Beneficiaries, each Participant and Designated Beneficiary affected by
such merger, consolidation or transfer shall have an accrued benefit
in the surviving or transferee plan (determined as if such plan were
then terminated immediately after such merger, consolidation or
transfer) that is equal to or greater than his/her accrued benefit to
which he/she would have been entitled, had the Plan been terminated
immediately prior to the occurrence of such merger, consolidation or
transfer.
(i) Electronic Media
Notwithstanding any provision of the Plan to the contrary, including
any provision which requires the use of a written instrument, to the
extent permitted by applicable law, the Committee may establish
procedures for the use of electronic media in communications and
transactions between the Plan or the Committee and Participants and
Beneficiaries. Electronic media may include, but are not limited to,
e-mail, the Internet, intranet systems and automated telephonic
response systems.
(j) Plan Conversions
Notwithstanding any provision of the Plan to the contrary, during any
conversion period, in accordance with procedures established by the
Committee, the Committee may temporarily suspend, in whole or in part,
certain provisions of the Plan, which may include, but are not limited
to, a Participant's right to change his contribution election, a
Participant's right to change his investment election and a
Participant's right to borrow or withdraw from his Account or obtain a
distribution for his Account.
SECTION 13. DESIGNATION OF TRUSTEE
In order to implement the Plan, the Company will enter into a trust
agreement with the Trustee to the end that contributions of the
Participants and the contributions of the Company shall be invested in
accordance with the provisions of this Plan and shall be held in Trust
for the exclusive benefit of the Participants or their Designated
Beneficiaries.
The Company may, without further reference to or action by any
Participant, from time to time, enter into such further agreements
with the Trustee or other parties and make such amendments to said
trust agreements or said further agreements as it may be necessary or
desirable to carry out the Plan, may from time to time designate a
successor Trustee or successor Trustees, or may take such other steps
to execute such other instruments as it may deem necessary or
desirable to put the Plan into effect or to carry out the provisions
thereof.
48
SECTION 14. TENDER AND EXCHANGE OFFERS
Notwithstanding any othaer provision contained herein to the contrary
(including, without limitation, the provisions of ARTICLE XIII), in
the event the Trustee receives (i) any tender offer which is subject
to Section 14(d)(1) of the Securities Exchange Act of 1934, as amended
from time to time, and to regulations promulgated thereunder, or (ii)
any other offer or option to buy or exchange more than thirty (30)
percent of the outstanding shares of Common Stock, the provisions of
this Section 14 of ARTICLE XIV shall apply.
(a) Each Participant shall have the right to direct the Trustee as to
whether to tender and sell or exchange pursuant to such offer any
whole and fractional shares of Common Stock held in the Participant's
Account.
(b) In order to implement the rights granted in this Section 14 of ARTICLE
XIV, the Company shall furnish to the Trustee such information as may
be distributed by it to shareholders of the Company in connection with
each such offer (the "Tender Document"), in quantities approximately
equal to the number of Participants holding shares of Common Stock in
Accounts at the time of such distribution. The Trustee shall use its
best efforts to distribute or cause to be distributed to each
Participant the Tender Documents together with all other materials
that the Trustee receives as a shareholder from any other party with
respect to such offer (the "Additional Tender Documents") and a form
prepared by the Trustee for the use by Participants in directing the
Trustee as to whether or not shares of Common Stock in the
Participants' Accounts shall be tendered and sold or exchanged as soon
as practicable following the furnishing of the Tender Documents and
Additional Tender Documents to the Trustee. The Trustee will follow
the written directions of each Participant with respect to the tender,
and sale or exchange if the tender is accepted, of the whole and
fractional shares of Common Stock held in such Participant's Account,
provided that such written directions are received by the Trustee by
the close of business two (2) days prior to the time such shares must
be tendered. Any such written direction by a Participant to the
Trustee shall be effective as of the date such direction is received
by the Trustee. Each Participant shall be permitted to revoke or
change such direction, provided such revocation or change is received
in writing by the Trustee by the close of business two (2) days prior
to the time such shares of Common Stock must be tendered. The Trustee
shall tender all shares of Common Stock as to which valid and timely
directions to do so have been received by it and have not been
subsequently timely revoked prior to the expiration date of the offer
to which the directions relate, and, to the extent the tender is
accepted, the shares so tendered shall be sold or exchanged as soon as
practical thereafter. Each Participant may direct the Trustee to
withdraw any shares of Common Stock in the Participant's Account which
were previously tendered, and the Trustee shall withdraw such shares
of Common Stock prior to the withdrawal date of the offer, provided
such direction is received in writing by the Trustee by the close of
business two (2) days prior to the withdrawal date of the offer. Any
and all
49
directions given to the Trustee by any Participant pursuant to this
Section 14 of ARTICLE XIV shall remain in the strict confidence of the
Trustee.
(c) In the absence of written direction from a Participant in accordance
with Section 14(b) of ARTICLE XIV, the Trustee shall tender, and sell
or exchange in the event the tender is accepted, at the times provided
in Section 14(b) of ARTICLE XIV, all whole and fractional shares of
Common Stock held in such Participant's Account only if the Trustee is
directed by Participant, pursuant to Section 14(b) of ARTICLE XIV, to
tender and sell or exchange the majority of the aggregate shares of
Common Stock held in such Participants' Accounts.
(d) The Designated Beneficiary of each Participant shall be entitled to
receive all distributions of Tender Documents and Additional Tender
Documents and to exercise all of the rights granted to each such
Participant pursuant to this Section 14 of ARTICLE XIV in the event of
the death of such Participant.
(e) The price at which sales of the Company's Common Stock in accordance
with this Section 14 of ARTICLE XIV pursuant to a tender or exchange
offer described herein shall be credited to the Participants' Accounts
shall be the price paid in connection with the tender or exchange
offer. Shares of Common Stock sold in accordance with this Section 14
of ARTICLE XIV pursuant to a tender of exchange offer described herein
shall not be considered in computing weighted average price under
Section 2 of ARTICLE XV. The cash proceeds from the sale or exchange
of any shares of Common Stock tendered and sold or exchanged pursuant
to this Section 14 of ARTICLE XIV shall be invested in accordance with
the terms of the Plan. If, as a result of a tender and sale or
exchange, the Trustee receives securities or other property, such
securities or property shall be held or reinvested in accordance with
the terms of the Plan. Any shares of Common Stock tendered or offered
but not purchased or exchanged shall be held or reinvested by the
Trustee in the trust created under this Plan in accordance with the
terms of the Plan.
(f) Transactions in the Company's Common Stock pursuant to a tender or
exchange offer in accordance with this Section 14 of ARTICLE XIV need
not be made through the facilities of the New York Stock Exchange.
(g) The Account of each Participant for whom the Trustee has sold or
exchanged shares of Common Stock in connection with any tender offer
or exchange offer described in this Section 14 of ARTICLE XIV shall be
charged with a pro rata share of all expenses incurred by the Trustee
in all sales or exchanges pursuant to such offer.
50
ARTICLE XV
SECURITIES TRANSACTIONS BY TRUSTEE
SECTION 1. TRANSACTION PERIOD
For convenience in administration, the Committee and the Trustee shall establish
a period for (a) the purchase and sale of Mutual Fund shares or the Company's
Common Stock or (b) the deposit and withdrawal of Cash With Interest, which
shall be known as a Transaction Period. The Transaction Period shall commence at
4:00 p.m. Eastern Time on a day when both the Trustee and the New York Stock
Exchange are open for business and shall end at 4:00 p.m. Eastern Time on the
next succeeding day when both the Trustee and the New York Stock Exchange are
open for business. All purchases and sales of the Company's Common Stock or
Mutual Fund shares or the deposit and withdrawal of Cash With Interest made by
the Trustee during the Transaction Period shall be in accordance with the
instructions and directions of the Participants (or of the Company as to
purchases of the Company's Common Stock with amounts to be credited to a
Participant's Account from Company Contributions attributable to Participant's
Contributions) which are received during a Transaction Period. The Trustee shall
not be required to respond to any subsequent instruction or direction received
during any Transaction Period until the next succeeding Transaction Period.
SECTION 2. POOLED ACCOUNT FOR SECURITIES TRANSACTIONS
The transaction price for purchases and sales of Company's Common Stock shall be
determined based upon the closing price of the Company's Common Stock on the New
York Stock Exchange on a day when both the Trustee and the New York Stock
Exchange are open for business, times the total number of shares of the
Company's Common Stock in the Common Stock pooled account, plus uninvested cash
and accrued income, divided by the number of shares in the Common Stock pooled
account.
The transaction price for purchases and sales in each of the Mutual Funds shall
be determined based upon the closing price of each such Mutual Funds on a day
when both the Trustee and the New York Stock Exchange are open for business,
times the total number of shares in each such Mutual Funds pooled account, plus
uninvested cash and accrued income; divided by the total number of shares of
each such Mutual Funds pooled account.
Purchases and sales of the Cash With Interest Investment Option shall be charged
or credited on the basis of actual purchase and sale prices for the particular
transaction.
SECTION 3. ALLOCATING TRANSACTION EXPENSE
Each Participant for whom the Trustee has sold and/or purchased shares in one or
more of the Investment Options available in the Plan pursuant to the
Participant's specific investment directions shall be charged for the expenses
incurred by the Plan in the exercise of the Participant's specific investment
option direction.
SECTION 4. REGISTRATION OF SECURITIES
Securities held by the Trustee may be registered in the name of the Trustee or
its nominee.
51
SECTION 5. MISCELLANEOUS
The Trustee shall invest in the Company's Common Stock Investment Option, the
Cash With Interest Investment Option, or Mutual Fund Investment Option as
promptly as practicable after the receipt of Employee contributions.
Contributions temporarily held for investment in one of the Investment Options
shall be invested by the Trustee in a short term fund approved by the Committee.
All Transactions in the Company's Common Stock shall be made through the
facilities of the New York Stock Exchange except for the purchase of stock from
the Company as provided in Section 4 of Article V.
52
ARTICLE XVI
ASSIGNABILITY
It is a condition of the Plan, and all rights of each Participant shall be
subject thereto, that, except as provided in a qualified domestic relations
order as defined in Section 414(p) of the Code, no right or interest of any
Participant in the Plan or in the Account shall be assignable or transferable in
whole or in part, either directly or by operation of law or otherwise,
including, but not by the way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, but excluding the
consequence of death, or mental incompetency, and no right of interest of any
Participant of the Plan or in the Account shall be liable for, or subject to,
any obligation or liability of such Participant. Notwithstanding any provision
of the Plan to the contrary, effective for judgments, orders, decrees or
settlements issued on or after August 5, 1997, the Plan shall honor a judgment,
order, decree or settlement providing for the offset of all or a part of a
Participant's benefit under the Plan, to the extent permitted under Code Section
401(a)(13)(C); provided that the requirements of Code Section 401(a)(13)(C)(iii)
relating to the protection of the Participant's spouse (if any) are satisfied.
53
ARTICLE XVII
AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN
SECTION 1. AMENDMENT
Subject to Section 2 of this Article XVII, the Company may at any time and from
time to time, amend the Plan if in the opinion of the Company such amendment is
necessary to enable the Plan to meet the requirements of the Code (including the
regulations and rulings issued thereunder) or the requirements of any
governmental authority.
SECTION 2. LIMITATION ON AMENDMENT
The Company shall make no amendment to the Plan which shall result in the
forfeiture or reduction of the interest of any Employee, Participant, former
Participant or person claiming under or through any one or more of them pursuant
to the Plan, except that nothing herein contained shall restrict the right to
amend the provisions hereof relating to the administration of the Plan.
Moreover, no such amendment shall be made hereunder which shall permit any part
of Participants' contributions to revert to any Company or be used or be
diverted to purposes other than the exclusive benefit of Employees,
Participants, former Participants, and beneficiaries.
SECTION 3. TERMINATION
This Plan shall continue in effect until and including the 1st day of July,
2005. Thereafter it shall renew itself for yearly periods unless written notice
is given by either party to the other not less than sixty (60) days, but not
more than seventy-five (75) days, prior to the expiration date or any extension
thereof, that it is desired to terminate or amend the Plan. In the event such
notice is given, the parties shall begin negotiations not less than forty-two
(42) days prior to the termination date, unless otherwise mutually agreed to. If
negotiations are not completed prior to the expiration date, this Plan shall
terminate unless extended by mutual agreement of the parties. Upon termination,
this Plan shall terminate in all respects, except that no distributions shall be
made from the Plan until ninety (90) days following such termination, and any
distributions made upon termination of the Plan shall be subject to the terms of
Article XI Section 3. Except as herein otherwise provided, no provision of this
Plan shall be subject to change prior to the expiration date as determined
above.
Upon any termination or partial termination of the Plan, the rights of each
Participant to the assets then held in his/her Account under the Plan shall be
non-forfeitable.
54
ARTICLE XVIII
ESOP FEATURE
SECTION 1. ESTABLISHMENT OF ESOP
(a) The provisions of this Article XVIII shall become effective January 1,
2002.
(b) The Plan shall consist of two components, the ESOP Feature and the
Non-ESOP Feature. The ESOP Feature shall consist of the ESOP Account.
The ESOP Feature is intended to qualify as a stock bonus plan under
Code Section 401(a) and as an employee stock ownership plan under Code
Section 4975(e)(7). The ESOP Feature is designed to invest primarily
in "qualifying employer securities," as defined in Code Sections
4975(e)(8) and 409(l) and ERISA Section 407(d)(5). The ESOP Feature is
described in this Article XVIII. The provisions of this Article XVIII
shall supercede any contrary provisions of the Plan.
SECTION 2. ESOP ACCOUNT
(a) The Committee shall establish an ESOP Account in the name of each
Participant and shall thereafter maintain a record thereof.
(b) The ESOP Account of each Participant shall be credited and debited
periodically during each Plan Year in which the ESOP is maintained
with any additions or reductions in the number of shares of Common
Stock held for such Participant in the Plan due to the reallocation of
the investment of the Participant's Non-ESOP Account and ESOP Account,
and with any stock and cash dividends paid on Common Stock
attributable to units of the Common Stock fund.
(c) In the event that a Participant elects a partial liquidation of the
investment of his Account in Common Stock pursuant to Section 5 of
Article V, Common Stock shall be liquidated pro-rata from the
Participant's Non-ESOP Account and ESOP Account.
SECTION 3. ESOP CONTRIBUTIONS
The Company, in its discretion, may make ESOP Contributions from time to time in
such amounts as are determined by the Company. All ESOP Contributions shall be
made in Common Stock. ESOP Contributions for a Plan Year shall be allocated
among active Participants for the Plan Year. The amount allocated to each active
Participant shall be determined by multiplying each active Participant's
Compensation for such Plan Year by a fraction, the numerator of which is the
ESOP Contribution for such Plan Year, and the denominator of which is the total
Compensation of all active Participants for such Plan Year. ESOP Contributions
shall be treated as Company Contributions for purposes of distributions and
withdrawals from the Plan. The ESOP Contribution subaccount of a Participant
shall be invested in Common Stock, subject to the diversification rules provided
in Section 4 of this Article.
55
SECTION 4. DIVERSIFICATION OF INVESTMENT
Participants who are at least age 55 may diversify the investment of amounts,
including amounts not Vested, held in their ESOP Accounts by transferring
amounts out of the Common Stock fund to one of the other Investment Options in
accordance with the provisions of Section 5 of Article V. Any transfer of such
amounts out of the Common Stock fund to another Investment Option shall be
deemed to be a transfer from the ESOP Feature to the Non-ESOP Feature.
SECTION 5. PUT OPTION
(a) If shares of Common Stock distributable to a Participant or his
Beneficiary are at the time of the distribution not readily tradable
on an established market, the Participant or Beneficiary will have an
option (the "Put") to require the Company to purchase all of the
shares actually distributed to him. The Put may be exercised at any
time during the Option Period (as defined below) by giving the Company
written notice of the election to exercise the Put. The Put may be
exercised by a former Participant or the Beneficiary only during the
Option Period in which the former Participant or Beneficiary receives
a distribution of shares of Common Stock.
(b) The "Option Period" is the 60-day period following the day on which a
Participant or his Beneficiary receives a distribution. If the former
Participant or Beneficiary does not exercise the Put during that
60-day period, the Option Period will also be the 60-day period
beginning after the new determination of the fair market value of
Common Stock by the Committee (and notice to the Participant) in the
following Plan Year. The Option Period will be extended by the amount
of time during which the Company is unable to honor the Put by reason
of applicable federal or state law.
(c) The "Option Price" will be the fair market value of each share of
Common Stock as of the valuation date immediately preceding the date
the Put is exercised, multiplied by the number of shares to be sold
under the Put, with appropriate adjustments to reflect intervening
stock dividends, stock splits, stock redemptions, or similar changes
to the number of outstanding shares.
(d) The terms of payment for the sale of Common Stock pursuant to the Put
shall be as provided in the Put and may be either paid in a lump sum
or in installments as provided by the Committee. An agreement to pay
through installments shall be permissible only if the Common Stock
subject to the put option is part of a 'total distribution', as
defined in Code Section 409(h)(5), and--
(i) the agreement is adequately secured, as determined by the
Committee,
(ii) a reasonable rate of interest is charged, as determined by the
Committee,
(iii) annual payments are equal,
56
(iv) installment payments must begin not later than 30 days after the
date the Put option is exercised, and
(v) the term of the payment does not extend beyond five years from
the date the Put option is exercised.
(e) The Put will not be assignable, except that the former Participant's
donees or, in the event of a Participant's death, his personal
representative, will be entitled to exercise the Put during the Option
Period for which it is applicable.
(f) The Trustee in its discretion may, with the Company's consent, assume
the Company's obligation under this Section at the time a former
Participant or Beneficiary exercises the Put. If the Trustee does
assume the Company's obligations, the provisions of this Section that
apply to the Company will also apply to the Trustee.
(g) The Put will also apply to shares of Common Stock that are publicly
traded without restriction when distributed but which cease to be
publicly traded or which become subject to a trading limitation during
the Option Period. In that event, the Committee will notify in writing
each former Participant or Beneficiary to whom the Put becomes
applicable that the shares of Common Stock held by the former
Participant or Beneficiary are subject to the Put for the remainder of
the applicable Option Period and will inform the Participant or
Beneficiary of the terms of the Put. If the written notice is given
later than ten days after the shares of Common Stock cease to be
publicly traded or become subject to a trading limitation, the period
during which the Put may be exercised will be extended by the number
of days between the tenth day and the date the notice is actually
given.
(h) The Committee will notify each former Participant or Beneficiary who
is eligible to exercise the Put of the fair market value of each share
of Common Stock as soon as practicable following its determination.
The Committee and the Company will send all notices required under
this Subsection to the last known address of a former Participant or
Beneficiary, and it will be the duty of those persons to inform the
Committee of any changes in address.
SECTION 6. PAYMENT OF DIVIDENDS
(a) The Committee, in its sole discretion, may provide that any dividends
paid in cash during the Plan Year on shares of Common Stock in which
Participants' ESOP Accounts are invested shall be (i) paid in cash
directly to the Participant, (ii) paid to the Plan and subsequently
distributed to the Participant in cash no later than 90 days after the
close of the Plan Year in which the dividends are paid to the Plan, or
(iii) at the election of the Participant, either (A) paid to the
Participant as provided in Clause (i) or (ii) (as determined by the
Committee) or (B) paid to the Participant's ESOP Account to be
reinvested in the Common Stock. Such dividends shall be paid in
accordance with procedures established by the Committee.
57
(b) If an election pursuant to Paragraph (a)(iii) is provided by the
Committee, each Participant may make the election, in the manner and
at the time specified by the Committee, with respect to dividends
received on shares of Common Stock comprising the portion of the
Common Stock fund allocated to the Participant's ESOP Account. If an
election pursuant to Paragraph (a)(iii) is provided by the Committee
and a Participant does not make such an election, such dividends shall
be paid to the Participant's ESOP Account to be reinvested in Common
Stock.
(c) The Beneficiary of a deceased participant shall have the same rights
as a Participant has under this Section 6.
(d) The provisions of this Section 6 are intended to comply with Section
404(k) of the Code, and shall be interpreted and construed
accordingly.
SECTION 7. INDEPENDENT APPRAISER
Common Stock held in Participants' ESOP Accounts shall be valued as of each
valuation date, or at the discretion of the Committee, more frequently. All
valuations of Common Stock held in Participants' ESOP Accounts which is not
readily tradable on an established securities market shall be made by an
independent appraiser meeting requirements similar to those contained in
Treasury Regulations under Code Section 170(a)(1).
SECTION 8. SHARE LEGEND
Shares of Common Stock in the ESOP Feature held or distributed by the Trustee
may include such legend restrictions on transferability as the Company may
reasonably require in order to assure compliance with applicable federal and
state securities laws.
58
WHEREAS, the Cooper Tire & Rubber Company has caused this Restated Plan to
be executed and adopted this 26th day of February, 2002.
COOPER TIRE & RUBBER COMPANY
By:/s/ Stephen O. Schroeder
------------------------------------
Treasurer
By:/s/ Richard N. Jacobson
------------------------------------
Assistant Secretary
59
AMENDMENT NO. 1 TO THE
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (AUBURN)
(AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2001)
The Cooper Tire & Rubber Company (the "Company") hereby
adopts this Amendment No. 1 to the Cooper Tire & Rubber Company Pre-Tax Savings
Plan (Auburn) (As Amended and Restated Effective as of January 1, 2001) (the
"Plan"). The provisions of this Amendment shall be effective as of January 1,
2002, unless otherwise indicated. Words and phrases used herein with initial
capital letters which are defined in the Plan are used herein as so defined.
One of the purposes of this Amendment is to reflect the
adoption of various provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). The Company intends for this Amendment to
satisfy the "good faith" compliance requirements of EGTRRA and to be construed
in accordance with EGTRRA and guidance issued thereunder.
SECTION 1
Section (12) of Article I of the Plan is hereby amended
in its entirety to read as follows:
"(12) 'Compensation' - includes all payments of wages, bonus,
Company Wage Reduction Contributions to this Plan and any taxable
payments paid to the Participant in a calendar year, except that
there shall be excluded from Compensation: supplemental
unemployment benefits, supplemental worker's compensation,
accident and sickness benefits, and other amounts which either
are excludable or deductible from income in whole or in part for
federal income tax purposes or which represent payments pursuant
to a program of benefits or deferred compensation (other than
Company Wage Reduction Contributions), whether or not qualified
under the Code.
Notwithstanding the above, the maximum amount of compensation
taken into account each year for all computations shall not
exceed the amount prescribed pursuant to Section 401(a)(17) of
the Code, as amended, or such amount as the Secretary of the
Treasury shall prescribe from time to time."
SECTION 2
Section 1(a)(ii) of Article III of the Plan is hereby amended in
it entirety to read as follows:
"(ii) the dollar limitation contained in Section 402(g) of the
Code in effect for such taxable year."
SECTION 3
60
Section 1 of Article IV of the Plan is hereby amended by (i)
deleting the fifth paragraph therein and (ii) deleting the word "either" and the
phrase "or multiple use rules" in the sixth paragraph where they occur therein.
SECTION 4
Section 1(a) of Article IX of the Plan is hereby amended in its
entirety to read as follows:
"the Participant's retirement, death, Total and Permanent
Disability, or severance from employment;"
SECTION 5
Section 1 of Article IX of the Plan is hereby amended by (i)
deleting subsections (d) and (e) and (ii) renumbering subsection (f) as
subsection (d).
SECTION 6
The last paragraph of Section 2 of Article IX of the Plan is
hereby amended in its entirety to read as follows:
"Employees who make a hardship withdrawal may not make
elective deferrals and employee after-tax contributions under
this Plan and all other plans of the Company for 6 months after
receipt of the distribution."
SECTION 7
Section 6(d)(1)(i) of Article XI of the Plan is hereby amended in
its entirety to read as follows:
"(i) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee except that an Eligible
Rollover Distribution does not include any distribution to the
extent such distribution is required under section 401(a)(9) of
the Code, any distribution that is one of a series of
substantially equal periodic payments (paid not less frequently
than annually) over the life (or life expectancy) of the
distributee or the joint lives (or life expectancies) of the
distributee and a designated beneficiary or for a specified
period of ten years or more, the portion of any distribution that
is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities), such other amounts specified in Treasury
regulations and rulings, notices or announcements issued under
Section 402(c) of the Code, and any distribution which is made
upon hardship of the distributee. Notwithstanding the foregoing,
a portion of a distribution shall not fail to be an Eligible
Rollover
61
Distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income.
However, such portion may be transferred only to an individual
retirement account or annuity described in Section 408(a) or (b)
of the Code, or to a qualified defined contribution plan
described in Sections 401(a) or 403(a) of the Code that agrees to
separately account for amounts so transferred, including
separately accounting for the portion of such distribution which
is includible in gross income and the portion of such
distribution which is not so includible."
SECTION 8
Section 6(d)(1)(ii) of Article XI of the Plan is hereby amended
in its entirety to read as follows:
"(ii) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, a qualified trust described in Section 401(a) of the
Code, an annuity contract described in Section 403(b) of the
Code, or an eligible plan under Section 457(b) of the Code which
is maintained by a state, political subdivision of a state, or
any agency or instrumentality of a state or political subdivision
of a state that accepts the Distributee's Eligible Rollover
Distribution."
SECTION 9
The first two sentences of Section 1(a) of Article XII of the
Plan are hereby amended in their entirety to read as follows:
"(a) MAXIMUM ANNUAL ADDITION: The "annual addition" to a
Participant's Account shall not exceed the lesser of (i) $40,000,
as adjusted for increases in the cost-of-living under Section
415(d) of the Code or (ii) 100% of the Participant's Compensation
(as defined in paragraph (d) below) for that Plan Year. The
Compensation limit referred to in (ii) shall not apply to any
contribution for medical benefits after separation from service
(within the meaning of Section 401(h) or Section 419A(f)(2) of
the Code) which is otherwise treated as an annual addition."
62
SECTION 10
Section 3(f) of Article XIV of the Plan is hereby amended in its
entirety to read as follows:
"(f) Claims for Benefits (other than disability benefits)
Any Participant or Designated Beneficiary who believes that
he or she is entitled to receive a benefit under the Plan
which he or she has not received may file with the
designated representative of the Committee, on such forms as
may be designated by the Committee, a written claim
specifying the basis for his or her claim and the facts upon
which he or she relies in making such claim. Such a claim
must be signed by the claimant or his or her authorized
representative and shall be deemed filed when delivered to
the designated representative of the Committee.
Unless such claim is allowed in full by the Committee, the
Committee shall (within 90 days after such claim was filed,
plus an additional period of 90 days if required for
processing and if notice of the 90-day extension of time
indicating the specific circumstances requiring the
extension and the date by which a decision shall be rendered
is given to the claimant within the first 90-day period)
cause written notice to be mailed to the claimant of the
total or partial denial of such claim. Such notice shall be
written in a manner calculated to be understood by the
claimant and shall state
(1) the specific reason(s) for the denial of the claim,
(2) specific reference(s) to pertinent provisions of the
Plan and/or Trust Fund on which the denial of the claim
was based,
(3) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary, and
(4) an explanation of the review procedure specified in
Section 3(g) of this Article XIV."
63
SECTION 11
Section 3(g) of Article XIV of the Plan is hereby amended in its
entirety to read as follows:
"(g) Appeals Procedure
Within 90 days after the denial of his or her claim, the
claimant may appeal such denial by filing with the Plan
Administrator his or her written request for a review of the
claim. Such request for review must be signed by the
claimant or his or her authorized representative and shall
be deemed filed when delivered to the Plan Administrator or
its designee. If the claimant does not file a request for
review of his or her claim within such 90-day period, the
claimant shall be conclusively presumed to have accepted as
final and binding the initial decision of the Plan
Administrator on his or her claim. In considering any appeal
pursuant to this Section 3(g), the Plan Administrator shall
have the same powers to interpret the Plan and make factual
findings with respect thereto as are granted to the
Committee under Section 2 hereof.
If such an appeal is so filed within such 90-day period then
the Plan Administrator, or a named fiduciary designated by
the Administrator, shall conduct a full and fair review of
such claim. During such full review, the claimant shall be
provided with the opportunity to submit written comments,
documents, records, and other information relating to the
claim for benefits, and with reasonable access to and copies
of, upon request and free of charge, all documents, records,
and other information relevant to the claimant's claim for
benefits. In addition, such full and fair review shall take
into account all comments, documents, records, and other
information submitted by the claimant relating to the claim,
without regard to whether such information was submitted or
considered in the initial benefit determination.
After the completion of such full review, the reviewer shall
mail or deliver to the claimant a written decision on the
matter based on the facts and pertinent provisions of the
Plan and/or Trust Fund and/or applicable law. Such decision
shall be mailed or delivered to the claimant within a period
of 60 days after the Administrator's receipt of the request
for review unless special circumstances require an extension
of time, in which case such decision shall be rendered not
later than 120 days after receipt of such request. (If an
extension of time for review is required, written notice of
the extension shall be furnished to the claimant prior to
the commencement of the extension.) Such decision (1) shall
be written in a manner calculated to be understood by the
claimant, (2) shall state the specific reason(s) for the
decision, (3) shall make specific reference(s) to pertinent
provisions of the Plan and/or Trust Fund on which the
decision is
64
based and (4) shall, to the extent permitted by applicable
law, be final and binding on all interested persons. The
notice of the adverse determination shall also include a
statement that the claimant is entitled to receive, upon
request, and free of charge, reasonable access to, and
copies of, all documents, records, and other information
relevant to the claimant's claim for benefits, and contain a
statement describing any voluntary appeal procedures offered
by the Plan and the claimant's right to obtain information
about such procedures and a statement of the claimant's
right to bring an action under Section 502(a) of ERISA."
SECTION 12
Section 3 of Article XIV of the Plan is hereby amended by adding
a new subsection (h) to the end thereof, immediately following subsection (g),
to read as follows:
"(h) Claims for Benefits Upon Total and Permanent
Disability:
(1) Notwithstanding the foregoing provisions of this
Article, in the case of a claim for benefits upon Total and
Permanent Disability, unless such claim is allowed in full
by the Committee, the Committee shall (within a reasonable
period of time, but not later than 45 days, unless such
period is extended as provided in Section 3(h)(2), below,
after receipt of the claim) cause written notice to be
mailed or delivered to the claimant of the total or partial
denial if his claim. Such notice shall be written in a
manner calculated to be understood by the claimant and shall
include
(i) the specific reason(s) for the denial of the
claim,
(ii) specific reference(s) to the provisions of the
Plan and/or Trust Fund on which the denial of
the claim was based,
(iii) a description of any additional material or
information necessary for the claimant to perfect
the claim and an explanation of why such material
or information is necessary,
65
(iv) an explanation of the review procedures specified in
Section 3(h)(3) of this Article XIV and the time limits
applicable to such procedures, and
(v) a specific reference to the internal rule, guideline,
protocol or other similar criterion, if any, that was
relied upon in making the adverse determination or a
statement that such rule, guideline, protocol, or other
similar criterion, if any, was relied upon in making
the adverse determination and that a copy of such rule,
guideline, protocol, or other similar criterion will be
provided free of charge to the claimant upon request.
(2) The 45-day period set forth in Section 3(h)(1), above,
may be extended by the Committee for up to 30 days, provided that
the Committee determines that such an extension is necessary due
to matters beyond the control of the Committee and notifies the
claimant, prior to the expiration of the initial 45-day period,
of the circumstances requiring the extension of time and the date
by which the Committee expects to render a decision.
Additionally, if, prior to the end of the first 30-day extension
period, the Committee determines that, due to matters beyond the
control of the Committee, a decision cannot be rendered within
that extension period, the period for making the determination
may be extended for up to an additional 30 days, provided that
the Committee notifies the claimant, prior to the expiration of
the first 30-day extension period, of the circumstances requiring
the extension and the date as of which the Committee expects to
render a decision. In the event of any extension under this
Section 3(h)(2), the notice of extension shall specifically
explain the standards on which entitlement to a benefit is based,
the unresolved issues that prevent a decision on the claim, and
the additional information needed to resolve the issues. The
claimant shall be afforded at least 45 days within which to
provide the specified information. Additionally, in the event
that a period of time is extended due to a claimant's failure to
submit information necessary to decide a claim, the period for
making the benefit determination shall be tolled from the date on
which the notification of the extension is sent to the claimant
until the date on which the claimant responds to the request for
additional information.
(3) Within 180 days after receipt of a notification of a
denial of a claim, the claimant or his duly authorized
representative may appeal such denial
66
by filing with the Committee his written request for a review of
his claim. If such an appeal is so filed within 180 days, a Named
Fiduciary designated by the Committee shall conduct a full and
fair review of such claim. During such full and fair review, the
claimant shall be provided with the opportunity to submit written
comments, documents, records, and other information relating to
the claim for benefits and reasonable access to and copies of,
upon request and free of charge, all documents, records, and
other information relevant to the claimant's claim for benefits.
In addition, such full and fair review shall (i) take into
account all comments, documents, records, and other information
submitted by the claimant relating to the claim, without regard
to whether such information was submitted or considered in the
initial benefit determination, (ii) not afford deference to the
initial adverse benefit determination, (iii) be conducted by a
Named Fiduciary who is neither the individual who made the
adverse benefit determination that is the subject of the appeal,
nor the subordinate of such individual, (iv) provide that, in
deciding any appeal of any adverse benefit determination that is
based in whole or in part on a medical judgment, the Named
Fiduciary shall consult with a health care professional who has
appropriate training and experience in the field of medicine
involved in the medical judgment and who is neither the
individual who was consulted in connection with the adverse
benefit determination that is the subject of the appeal, nor the
subordinate of any such individual, and (v) provide for the
identification of medical or vocational experts whose advice was
obtained on behalf of the Plan in connection with the claimant's
adverse benefit determination, without regard to whether the
advice was relied upon in making the initial benefit
determination.
The decision of the Named Fiduciary shall be made in a writing
delivered to the claimant within a reasonable time, but in no
event later than 45 days after the receipt of the request for
review unless special circumstances require an extension of time
for processing. If the Named Fiduciary determines that an
extension of time for processing is required, written notice of
the extension shall be furnished to the claimant setting forth
the special circumstances requiring an extension of time and the
date by which the Named Fiduciary expects to render a decision on
review, and shall be furnished prior to the termination of the
initial 45-day period. In no event shall such extension exceed a
period of 45 days from the end of the initial 45-day period.
In the case of an adverse benefit determination on review, the
notice of the determination shall be written in a manner
calculated to be understood by the claimant and shall include (i)
the specific reasons for the determination, (ii) specific
reference(s) to specific provisions of the Plan and/or Trust Fund
on which the determination is based, (iii) a statement that the
claimant is entitled to receive, upon request, and free of
charge,
67
reasonable access to, and copies of all documents, records, and
other information relevant to the claimant's claim for benefits,
(iv) a statement describing any voluntary appeal procedures
offered by the Plan and the claimant's right to obtain
information about such procedures, including a statement of the
claimant's right to bring a civil action under section 502(a) of
ERISA and (v) if an internal rule, guideline, protocol or other
similar criterion was relied upon in making the adverse
determination, either the specific rule, guideline, protocol, or
other similar criterion, or a statement that such rule,
guideline, protocol, or other similar criterion was relied upon
in making the adverse determination and that a copy of the rule,
guideline, protocol or other similar criterion will be provided
free of charge to the claimant upon request. To the extent
permitted by applicable law, the determination on review shall be
final and binding on all interested persons. In performing the
duties under this Section 3(h)(3), the Named Fiduciary shall have
the same powers to interpret the Plan and make factual findings
with respect thereto as are granted to the Committee under
Section 2 hereof."
EXECUTED this 27th day of December 2002.
THE COOPER TIRE & RUBBER COMPANY
By:/s/ Stephen O. Schroeder
---------------------------------------------------
Treasurer
By:/s/ Charles F. Nagy
---------------------------------------------------
Assistant Treasurer
68