1
Exhibit 4.4(f)
THE FINANCIAL
SECURITY PLAN AND TRUST
PLAN AND TRUST AGREEMENT
AS AMENDED AND RESTATED
EFFECTIVE APRIL 1, 1995
2
The Financial Security Plan and Trust
As Amended and Restated Effective April 1,1995
Viking Freight System, Inc. previously established the Viking Financial Security
Plan effective January 1, 1985 for the benefit of eligible employees of Viking
Freight System, Inc. and its participating affiliates. Effective April 1, 1995,
Roadway Regional Group, Inc. became the sponsor of the Viking Financial Security
Plan at which time such plan is now restated and renamed The Financial Security
Plan for the benefit of Roadway Regional Group, Inc. and its participating
affiliates and concurrent with such actions the Cole Profit Sharing Plan,
originally effective December 29, 1958, is merged into the Plan.
The Plan is intended to constitute a qualified profit sharing plan, as described
in Code section 401(a), which includes a qualified cash or deferred arrangement,
as described in Code section 401(k).
The provisions of this Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between Roadway Regional Group,
Inc. and BZW Barclays Global Investors, National Association. The Trust is
intended to be tax exempt as described under Code section 501(a).
Date: ______________, 19 Viking Freight, Inc. as successor to
Roadway Regional Group, Inc.
By:
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Title:
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The trust agreement set forth in those provisions of this Plan and Trust which
relate to the Trustee is hereby executed.
Date: ______________, 19 BZW Barclays Global Investors,
National Association
By:
--------------------------------
Title:
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Date: ______________, 19 BZW Barclays Global Investors,
National Association
By:
--------------------------------
Title:
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TABLE OF CONTENTS
1 DEFINITIONS....................................................... 1
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2 ELIGIBILITY....................................................... 11
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2.1 Eligibility............................................. 11
2.2 Ineligible Employees.................................... 11
2.3 Ineligible or Former Participants....................... 11
3 PARTICIPANT CONTRIBUTIONS......................................... 12
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3.1 Before-Tax Contribution Election........................ 12
3.2 Changing a Contribution Election........................ 12
3.3 Revoking and Resuming a Contribution Election........... 12
3.4 Contribution Percentage Limits.......................... 12
3.5 Refunds When Contribution Dollar Limit Exceeded......... 13
3.6 Timing, Posting and Tax Considerations.................. 13
4 ROLLOVERS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS......... 14
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4.1 Rollovers............................................... 14
4.2 Transfers From and To Other Qualified Plans............. 14
5 EMPLOYER CONTRIBUTIONS............................................ 15
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5.1 Viking/RRG Match Contributions.......................... 15
5.2 RSI Stock Match Contributions........................... 15
5.3 Coles Match Contributions............................... 16
5.4 Profit Sharing Contributions............................ 17
6 ACCOUNTING........................................................ 18
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6.1 Individual Participant Accounting....................... 18
6.2 Sweep Account is Transaction Account.................... 18
6.3 Trade Date Accounting and Investment Cycle.............. 18
6.4 Accounting for Investment Funds......................... 18
6.5 Payment of Fees and Expenses............................ 18
6.6 Accounting for Participant Loans........................ 19
6.7 Error Correction........................................ 19
6.8 Participant Statements.................................. 20
6.9 Special Accounting During Conversion Period............. 20
6.10 QDROs................................................... 20
7 INVESTMENT FUNDS AND ELECTIONS.................................... 22
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7.1 Investment Funds........................................ 22
7.2 Investment Fund Elections............................... 22
7.3 Responsibility for Investment Choice.................... 22
7.4 Default if No Election.................................. 22
7.5 Timing.................................................. 23
7.6 Investment Fund Election Change Fees.................... 23
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8 VESTING & FORFEITURES............................................. 24
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8.1 Fully Vested Accounts................................... 24
8.2 Full Vesting Upon Certain Events........................ 24
8.3 Vesting Schedule........................................ 24
8.4 Forfeitures............................................. 25
8.5 Rehired Employees....................................... 25
9 PARTICIPANT LOANS................................................. 26
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9.1 Participant Loans Permitted............................. 26
9.2 Loan Application, Note and Security..................... 26
9.3 Spousal Consent......................................... 26
9.4 Loan Approval........................................... 26
9.5 Loan Funding Limits, Account Sources and Funding Order.. 26
9.6 Maximum Number of Loans................................. 27
9.7 Source and Timing of Loan Funding....................... 27
9.8 Interest Rate........................................... 27
9.9 Loan Payment............................................ 28
9.10 Loan Payment Hierarchy.................................. 28
9.11 Repayment Suspension.................................... 28
9.12 Loan Default............................................ 28
9.13 Call Feature............................................ 28
10 IN-SERVICE WITHDRAWALS............................................ 29
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10.1 In-Service Withdrawals Permitted........................ 29
10.2 In-Service Withdrawal Application and Notice............ 29
10.3 Spousal Consent......................................... 29
10.4 In-Service Withdrawal Approval.......................... 29
10.5 Minimum Amount, Payment Form and Medium................. 30
10.6 Source and Timing of In-Service Withdrawal Funding...... 30
10.7 Hardship Withdrawals.................................... 30
10.8 After-Tax Account Withdrawals........................... 32
10.9 Over Age 59 1/2 Withdrawals............................. 32
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS, UPON DISABILITY OR
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AS REQUIRED BY LAW ............................................... 34
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11.1 Benefit Information, Notices and Election............... 34
11.2 Spousal Consent......................................... 34
11.3 Payment Form and Medium................................. 35
11.4 Source and Timing of Distribution Funding............... 36
11.5 Deemed Distribution..................................... 36
11.6 Latest Commencement Permitted........................... 36
11.7 Payment Within Life Expectancy.......................... 37
11.8 Incidental Benefit Rule................................. 37
11.9 Payment to Beneficiary.................................. 37
11.10 Beneficiary Designation................................. 38
11.11 QJSA and QPSA Annuity Information and Elections ........ 38
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12 ADP AND ACP TESTS................................................. 41
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12.1 Contribution Limitation Definitions..................... 41
12.2 ADP and ACP Tests....................................... 44
12.3 Correction of ADP and ACP Tests......................... 44
12.4 Multiple Use Test....................................... 45
12.5 Correction of Multiple Use Test......................... 46
12.6 Adjustment for Investment Gain or Loss.................. 46
12.7 Testing Responsibilities and Required Records........... 46
12.8 Separate Testing........................................ 46
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS...................... 47
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13.1 "Annual Addition" Defined............................... 47
13.2 Maximum Annual Addition................................. 47
13.3 Avoiding an Excess Annual Addition...................... 47
13.4 Correcting an Excess Annual Addition.................... 47
13.5 Correcting a Multiple Plan Excess....................... 48
13.6 "Defined Benefit Fraction" Defined...................... 48
13.7 "Defined Contribution Fraction" Defined................. 48
13.8 Combined Plan Limits and Correction..................... 48
14 TOP HEAVY RULES................................................... 49
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14.1 Top Heavy Definitions................................... 49
14.2 Special Contributions................................... 50
14.3 Special Vesting......................................... 51
14.4 Adjustment to Combined Limits for Different Plans....... 51
15 PLAN ADMINISTRATION............................................... 52
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15.1 Plan Delineates Authority and Responsibility............ 52
15.2 Fiduciary Standards..................................... 52
15.3 Plan Sponsor is ERISA Plan Administrator................ 52
15.4 Administrator Duties.................................... 53
15.5 Advisors May be Retained................................ 53
15.6 Delegation of Administrator Duties...................... 54
15.7 Committee Operating Rules............................... 54
16 MANAGEMENT OF INVESTMENTS......................................... 55
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16.1 Trust Agreement......................................... 55
16.2 Investment Funds........................................ 55
16.3 Authority to Hold Cash.................................. 56
16.4 Trustee to Act Upon Instructions........................ 56
16.5 Administrator Has Right
to Vote Registered Investment Company Shares............ 56
16.6 Custom Fund Investment Management ...................... 56
16.7 Authority to Segregate Assets........................... 57
16.8 Maximum Permitted Investment in Roadway Stock........... 57
16.9 Participants Have Right to Vote and Tender Roadway Stock 57
16.10 Participants Have Right to Vote and Tender REX Stock.... 58
16.11 Registration and Disclosure for Roadway Stock........... 58
16.12 Registration and Disclosure for REX Stock............... 58
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17 TRUST ADMINISTRATION.............................................. 59
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17.1 Trustee to Construe Trust............................... 59
17.2 Trustee To Act As Owner of Trust Assets................. 59
17.3 United States Indicia of Ownership...................... 59
17.4 Tax Withholding and Payment............................. 60
17.5 Trust Accounting........................................ 60
17.6 Valuation of Certain Assets............................. 60
17.7 Legal Counsel........................................... 61
17.8 Fees and Expenses....................................... 61
17.9 Trustee Duties and Limitations.......................... 61
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION................. 62
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18.1 Plan Does Not Affect Employment Rights.................. 62
18.2 Limited Return of Contributions......................... 62
18.3 Assignment and Alienation............................... 62
18.4 Facility of Payment..................................... 63
18.5 Reallocation of Lost Participant's Accounts............. 63
18.6 Claims Procedure........................................ 63
18.7 Construction............................................ 64
18.8 Jurisdiction and Severability........................... 64
18.9 Indemnification by Employer............................. 64
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION................... 65
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19.1 Amendment............................................... 65
19.2 Merger.................................................. 65
19.3 Divestitures............................................ 65
19.4 Plan Termination........................................ 66
19.5 Amendment and Termination Procedures.................... 66
19.6 Termination of Employer's Participation................. 67
19.7 Replacement of the Trustee.............................. 67
19.8 Final Settlement and Accounting of Trustee.............. 67
APPENDIX A - INVESTMENT FUNDS.............................................. 69
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES............................. 71
APPENDIX C - LOAN INTEREST RATE............................................ 72
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1 DEFINITIONS
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When capitalized, the words and phrases below have the following
meanings unless different meanings are clearly required by the context:
1.1 "Account". The records maintained for purposes of accounting
for a Participant's interest in the Plan. "Account" may refer
to one or all of the following accounts which have been
created on behalf of a Participant to hold specific types of
Contributions under the Plan or amounts transferred from the
Predecessor Plan:
(a) "Before-Tax Account". An account created to hold
Before-Tax Contributions.
(b) "Prior Before-Tax Account". An account created to
hold amounts transferred from the Predecessor Plan
designated as "Deferred Match Contributions"
thereunder.
(c) "After-Tax Account". An account created to hold
amounts previously contributed by an eligible
Participant on an after-tax basis under former Plan
provisions and amounts transferred from the
Predecessor Plan designated as "Employee Voluntary
Contributions" thereunder.
(d) "Rollover Account". An account created to hold
Rollover Contributions and amounts transferred from
the Predecessor Plan designated as "Rollover
Contributions" thereunder.
(e) "Viking/RRG Match Account". An account created to
hold Viking/RRG Match Contributions which amounts
prior to April 1, 1995 were designated as "Company
Match Contributions".
(f) "RSI Stock Match". An account created to hold RSI
Stock Match Contributions.
(g) "Coles Match Account". An account created to hold
Coles Match Contributions.
(h) "Profit Sharing Account". An account created to hold
Profit Sharing Contributions.
(i) "Prior Profit Sharing Account". An account created to
hold amounts transferred from the Predecessor Plan
designated as "Regular Employer Contributions" and
"Discretionary Employer Contributions" thereunder.
1.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
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1.3 "Administrator". The Plan Sponsor, which may delegate all or
a portion of the duties of the Administrator under the Plan
to a Committee in accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage
calculated in accordance with Section 12.1.
1.5 "Beneficiary". The person or persons who is to receive
benefits after the death of the Participant pursuant to the
"Beneficiary Designation" paragraph in Section 11.
1.6 "Break in Service". The end of five consecutive Plan Years
(or six consecutive Plan Years if absence from employment was
due to a Parental Leave) for which a Participant is credited
with no Hours of Service.
1.7 "Code". The Internal Revenue Code of 1986, as amended.
Reference to any specific Code section shall include such
section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending,
supplementing or superseding such section.
1.8 "Coles Employee". A Participant during any period he or she
is an Eligible Employee and employed by Coles Express, Inc.
1.9 "Committee". The administrative committee appointed by the
Plan Sponsor and charged with the general administration of
the Plan in accordance with Section 15.6.
1.10 "Compensation". The sum of a Participant's Taxable Income and
salary reductions, if any, pursuant to Code sections 125,
402(e)(3), 402(h), 403(b), 414(h)(2) or 457.
For purposes of determining benefits under this Plan,
Compensation is limited to $150,000, (as adjusted for the
cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year. For purposes of the preceding
sentence, in the case of a HCE who is a 5% Owner or one of
the 10 most highly compensated Employees, (i) such HCE and
such HCE's family group (as defined below) shall be treated
as a single employee and the Compensation of each family
group member shall be aggregated with the Compensation of
such HCE, and (ii) the limitation on Compensation shall be
allocated among such HCE and his or her family group members
in proportion to each individual's Compensation before the
application of this sentence. For purposes of this Section,
the term "family group" shall mean an Employee's spouse and
lineal descendants who have not attained age 19 before the
close of the year in question.
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For purposes of determining HCEs and key employees,
Compensation for the entire Plan Year shall be used. For
purposes of determining ADP and ACP, Compensation shall be
limited to amounts paid to an Eligible Employee while a
Participant.
1.11 "Contribution". An amount contributed to the Plan by the
Employer or an Eligible Employee, and allocated by
contribution type to Participants' Accounts, as described in
Section 1.1. Specific types of contribution include:
(a) "Before-Tax Contribution". An amount contributed by
an eligible Participant in conjunction with his or
her Code section 401(k) salary deferral election
which shall be treated as made by the Employer on an
eligible Participant's behalf.
(b) "Rollover Contribution". An amount contributed by an
Eligible Employee which originated from another
employer's or an Employer's qualified plan.
(c) "Viking/RRG Match Contribution". An amount
contributed by the Employer on an eligible
Participant's behalf based upon the amount
contributed by the eligible Participant.
(d) "RSI Stock Match Contribution". An amount
contributed by the Employer on an eligible
Participant's behalf based upon the amount
contributed by the eligible Participant.
(e) "Coles Match Contribution". An amount contributed by
the Employer on an eligible Participant's behalf
based upon the amount contributed by the eligible
Participant.
(f) "Profit Sharing Contribution". An amount contributed
by the Employer on an eligible Participant's behalf
and allocated on a pay based formula.
Solely for purposes of the Plan Year ending December 31,
1995, references to Before-Tax Contributions in Sections 3.5,
12 and 13.4 shall include "Deferred Match Contributions" for
the period January 1, 1995 through March 31, 1995 made under
the Predecessor Plan as merged herein effective April 1,1995.
Solely for purposes of Sections 3.5, 12 and 13.4 Viking/RRG
Match Contributions, RSI Stock Match Contributions and Coles
Match Contributions shall be collectively referred to as
"Matching Contributions" and solely for purposes of the Plan
Year ending December 31, 1995 "Matching Contributions" as
referenced therein shall also include "Regular Employer
Contributions" for the period January 1, 1995 through March
31, 1995 made under the Predecessor Plan as merged herein
effective April 1, 1995.
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1.12 "Contribution Dollar Limit". The annual limit placed on each
Participant's Before-Tax Contributions, which shall be $7,000
per calendar year (as adjusted for the cost of living
pursuant to Code sections 402(g)(5) and 415(d)). For purposes
of this Section, a Participant's Before-Tax Contributions
shall include (i) any employer contribution made under any
qualified cash or deferred arrangement as defined in Code
section 401(k) to the extent not includible in gross income
for the taxable year under Code section 402(e)(3); (ii) any
employer contribution to the extent not includible in gross
income for the taxable year under Code section 402(h)(1)(B)
(determined without regard to Code section 402(g)); and (iii)
any employer contribution to purchase an annuity contract
under Code section 403(b) under a salary reduction agreement
(within the meaning of Code section 3121(a)(5)(D)).
1.13 "Conversion Period". The period of converting the prior
accounting system of any plan and trust which is merged into
this Plan and Trust subsequent to the Effective Date, to the
accounting system described in Section 6.
1.14 "Direct Rollover". An Eligible Rollover Distribution that is
paid directly to an Eligible Retirement Plan for the benefit
of a Distributee.
1.15 "Disability". The inability of a Participant to perform the
duties assigned to him or her by his or her Employer for an
extended period by reason of a mental or physical condition,
as determined by the Committee.
1.16 "Distributee". An Employee or former Employee, the surviving
spouse of an Employee or former Employee and a spouse or
former spouse of an Employee or former Employee determined to
be an alternate payee under a QDRO.
1.17 "Effective Date". The date upon which the provisions of this
document become effective. This date is April 1,1995, unless
stated otherwise. In general, the provisions of this document
only apply to Participants who are Employees on or after the
Effective Date. However, investment and distribution
provisions apply to all Participants with Account balances to
be invested or distributed after the Effective Date.
1.18 "Eligible Employee". An Employee of an Employer, except any
Employee:
(a) whose compensation and conditions of employment are
covered by a collective bargaining agreement to
which an Employer is a party unless the agreement
calls for the Employee's participation in the Plan;
(b) who is treated as an Employee because he or she is a
Leased Employee;
(c) who is a nonresident alien who (i) either receives
no earned income (within the meaning of Code section
911(d)(2)), from sources within the United States
under Code section 861(a)(3); or (ii) receives such
earned income from such sources within the United
States but such income is
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exempt from United States income tax under an
applicable income tax convention; or
(d) who is classified by the Employer as a supplemental
Employee or a temporary Employee.
Notwithstanding an Employee who was classified as a
supplemental Employee and a Participant on July 1, 1992 shall
be included as an Eligible Employee.
1.19 "Eligible Retirement Plan". An individual retirement account
described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust
described in Code section 401(a), that accepts a
Distributee's Eligible Rollover Distribution, except that
with regard to an Eligible Rollover Distribution to a
surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
1.20 "Eligible Rollover Distribution". A distribution of all or
any portion of the balance to the credit of a Distributee,
excluding a distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of a
Distributee or the joint lives (or joint life expectancies)
of a Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten years or more;
a distribution to the extent such distribution is required
under Code section 401(a)(9); and the portion of a
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).
1.21 "Employee". An individual who is:
(a) directly employed by any Related Company and for
whom any income for such employment is subject to
withholding of income or social security taxes, or
(b) a Leased Employee.
1.22 "Employer". The Plan Sponsor and any Subsidiary or other
Related Company of either the Plan Sponsor or a Subsidiary
which adopts this Plan with the approval of the Plan Sponsor.
As of the Effective Date the Employers under the Plan are the
Plan Sponsor, Viking Freight System, Inc. and Coles Express,
Inc.
1.23 "ERISA". The Employee Retirement Income Security Act of 1974,
as amended. Reference to any specific ERISA section shall
include such section, any valid regulation promulgated
thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding such
section.
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1.24 "Forfeiture Account". An account holding amounts forfeited by
Participants who have terminated employment with all Related
Companies, invested in interest bearing deposits of the
Trustee, pending disposition as provided in this Plan and
Trust and as directed by the Administrator.
1.25 "HCE" or "Highly Compensated Employee". An Employee described
as a Highly Compensated Employee in Section 12.
1.26 "Hour of Service". Each hour for which an Employee is
entitled to:
(a) payment for the performance of duties for any
Related Company;
(b) payment from any Related Company for any period
during which no duties are performed (irrespective
of whether the employment relationship has
terminated) due to vacation, holiday, sickness,
incapacity (including disability), layoff, leave of
absence, jury duty or military service;
(c) back pay, irrespective of mitigation of damages, by
award or agreement with any Related Company (and
these hours shall be credited to the period to which
the agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these
hours shall be based upon his or her normally
scheduled hours per week or a 40 hour week if there
is no regular schedule).
The crediting of hours for which no duties are performed
shall be in accordance with Department of Labor regulation
sections 2530.200b-2(b) and (c). Actual hours shall be used
whenever an accurate record of hours are maintained for an
Employee. Otherwise, an equivalent number of hours shall be
credited for each payroll period in which the Employee would
be credited with at least 1 hour. The payroll period
equivalencies are 45 hours weekly, 90 hours biweekly, 95
hours semimonthly and 190 hours monthly.
Hours credited prior to a Break in Service are included.
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her
Hours of Service for eligibility and/or vesting purposes if
(1) the Plan Sponsor directs that credit for such service be
granted, or (2) a qualified plan of the predecessor or
acquired company is subsequently maintained by any Employer
or Related Company.
1.27 "Ineligible". The Plan status of an individual during the
period in which he or she is (1) an Employee of a Related
Company which is not then an Employer, (2) an Employee, but
not an Eligible Employee, or (3) not an Employee.
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1.28 "Investment Fund" or "Fund". An investment fund as described
in Section 16.2. The Investment Funds authorized by the
Administrator to be offered under the Plan as of the
Effective Date or such other date as stated are set forth in
Appendix A.
1.29 "Leased Employee". An individual who is deemed to be an
employee of any Related Company as provided in Code section
414(n) or (o).
1.30 "Leave of Absence". A period during which an individual is
deemed to be an Employee, but is absent from active
employment, provided that the absence:
(a) was approved by the Employer in keeping with its
established uniform policies as to sick or personal
leave;
(b) was due to layoff followed by a return to work
within the requirements of the Employer's uniform
policies; or
(c) was due to military service in the United States
armed forces and the individual returns to active
employment within the period during which he or she
retains employment rights under federal law.
1.31 "Loan Account". The record maintained for purposes of
accounting for a Participant's loan and payments of principal
and interest thereon.
1.32 "NHCE" or "Non-Highly Compensated Employee". An Employee
described as a Non-Highly Compensated Employee in Section 12.
1.33 "Normal Retirement Date". The date of a Participant's 59
1/2th birthday.
1.34 "Owner". A person with an ownership interest in the capital,
profits, outstanding stock or voting power of a Related
Company within the meaning of Code section 318 or 416 (which
exclude indirect ownership through a qualified plan).
1.35 "Parental Leave". The period of absence from work by reason
of pregnancy, the birth of an Employee's child, the placement
of a child with the Employee in connection with the child's
adoption, or caring for such child immediately after birth or
placement as described in Code section 410(a)(5)(E).
1.36 "Participant". An Eligible Employee who begins to participate
in the Plan after completing the eligibility requirements as
described in Section 2.1. An Eligible Employee who makes a
Rollover Contribution prior to completing the eligibility
requirements as described in Section 2.1 shall also be
considered a Participant, except that he or she shall not be
considered a Participant for purposes of provisions related
to Contributions, other than a Rollover Contribution, until
he or she completes the eligibility requirements as described
in Section 2.1. A Participant's participation continues until
his or her employment with all Related Companies ends and his
or her Account is distributed or forfeited.
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1.37 "Pay". All cash compensation paid to an Eligible Employee by
an Employer while a Participant during the current period.
Pay excludes reimbursements or other expense allowances, cash
and non-cash fringe benefits, moving expenses, deferred
compensation and welfare benefits.
Pay is neither increased by any salary credit or decreased by
any salary reduction pursuant to Code sections 125 or
402(e)(3). Pay is limited to $150,000 (as adjusted for the
cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year.
For purposes of the Contributions described in Section 5.4,
the limitations as described in the second paragraph of
Section 1.10 shall also apply.
1.38 "Plan". The Financial Security Plan set forth in this
document, as from time to time amended.
1.39 "Plan Sponsor". Roadway Regional Group, Inc., a California
corporation or any successor by merger or consolidation or
any successor that otherwise assumes the obligations of the
Plan Sponsor under the Plan.
1.40 "Plan Year". The annual accounting period of the Plan and
Trust which ends on each December 31.
1.41 "Predecessor Plan". Cole Profit Sharing Plan as originally
established effective December 29, 1958 as merged herein
effective April 1, 1995.
1.42 "Predecessor Plan Amounts". With regard to a Participant who
immediately prior to April 1, 1995 was a participant in the
Predecessor Plan, the sum of his or her Prior Before-Tax
Account, After-Tax Account and Prior Profit Sharing Account,
which Accounts hold only amounts transferred from the
Predecessor Plan and earnings thereon plus the portion of his
or her Rollover Account attributable to amounts transferred
from the Predecessor Plan and earnings thereon.
1.43 "QDRO". A domestic relations order which the Administrator
has determined to be a qualified domestic relations order
within the meaning of Code section 414(p).
1.44 "Related Company". With respect to any Employer, that
Employer and any corporation, trade or business which is,
together with Roadway and that Employer, a member of the same
controlled group of corporations, a trade or business under
common control, or an affiliated service group within the
meaning of Code sections 414(b), (c), (m) or (o) and except
that for purposes of Section 13 "within the meaning of Code
sections 414(b), (c), (m) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to
"within the meaning of Code section 414(b), (c), (m) or (o)".
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1.45 "REX". Roadway Express, Inc.
1.46 "REX Stock". Shares of voting common stock of Roadway
Express, Inc.
1.47 "Roadway". Roadway Services, Inc., (or as may later be
renamed) the parent corporation of the Plan Sponsor.
1.48 "Roadway Stock". Shares of common stock of Roadway Services,
Inc., its successors or assigns, or any corporation with or
into which said corporation may be merged, consolidated or
reorganized, or to which a majority of its assets may be
sold.
1.49 "RRG Employee". A Participant during any period he or she is
an Eligible Employee and employed by Roadway Regional Group,
Inc.
1.50 "Settlement Date". For each Trade Date, the Trustee's next
business day.
1.51 "Spousal Consent". The written consent given by a spouse to a
Participant's election or waiver of a specified form of
benefit, including a loan or an in- service withdrawal, or
Beneficiary designation. The spouse's consent must
acknowledge the effect on the spouse of the Participant's
election, waiver or designation, and be duly witnessed by a
Plan representative or notary public. Spousal Consent shall
be valid only with respect to the spouse who signs the
Spousal Consent and only for the particular choice made by
the Participant which requires Spousal Consent. A Participant
may revoke (without Spousal Consent) a prior election, waiver
or designation that required Spousal Consent at any time
before payments begin. Spousal Consent also means a
determination by the Administrator that there is no spouse,
the spouse cannot be located, or such other circumstances as
may be established by applicable law.
1.52 "Subsidiary". A company which is 50% or more owned, directly
or indirectly, by the Plan Sponsor.
1.53 "Sweep Account". The subsidiary Account for each Participant
through which all transactions are processed, which is
invested in interest bearing deposits of the Trustee.
1.54 "Sweep Date". The cut off date and time for receiving
instructions for transactions to be processed on the next
Trade Date.
1.55 "Taxable Income". Compensation in the amount reported by the
Employer or a Related Company as "Wages, tips, other
compensation" on Form W-2, or any successor method of
reporting under Code section 6041(d).
Taxable Income is limited to $150,000 (as adjusted for the
cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year. For purpose
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16
of the preceding sentences, in the case of a HCE who is a 5%
Owner or one of the 10 most highly compensated Employees, (i)
such HCE and such HCE's family group (as defined below) shall
be treated as a single employee and the Taxable Income of
each family group member shall be aggregated with the Taxable
Income of such HCE, and (ii) the limitation on Taxable Income
shall be allocated among such HCE and his or her family group
members in proportion to each individual's Taxable Income
before the application of this sentence. For purposes of this
Section, the term "family group" shall mean an Employee's
spouse and lineal descendants who have not attained age 19
before the close of the year in question.
1.56 "Trade Date". Each day the Investment Funds are valued, which
is normally every day the assets of such Funds are traded.
1.57 "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. The Trust is part of
the Plan and holds the Plan assets which are comprised of the
aggregate of Participants' Accounts, any unallocated funds
invested in deposit or money market type assets pending
allocation to Participants' Accounts or disbursement to pay
Plan fees and expenses and the Forfeiture Account.
1.58 "Trustee". Wells Fargo Bank, National Association for the
period prior to January 1, 1996. Effective January 1, 1996,
BZW Barclays Global Investors, National Association.
1.59 "Viking Employee". A Participant during any period he or she
is an Eligible Employee and employed by Viking Freight
System, Inc.
1.60 "Year of Vesting Service". A 12 consecutive month period
ending on the last day of a Plan Year in which an Employee is
credited with at least 1,000 Hours of Service.
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2 ELIGIBILITY
-----------
2.1 Eligibility
All Participants as of April 1,1995 shall continue their
eligibility to participate including participants as of March
31, 1995 under the Predecessor Plan. Each other Eligible
Employee shall become a Participant on the first day of the
next month after the date he or she attains age 21, and
completes a 12 month eligibility period in which he or she is
credited with at least 1,000 Hours of Service. The initial
eligibility period begins on the date an Employee first
performs an Hour of Service. Subsequent eligibility periods
begin with the start of each Plan Year beginning after the
first Hour of Service is performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements,
but is Ineligible at the time participation would otherwise
begin (if he or she were not Ineligible), he or she shall
become a Participant on the first subsequent date on which he
or she is an Eligible Employee.
2.3 Ineligible or Former Participants
A Participant may not make or share in Plan Contributions
during the period he or she is Ineligible, nor generally be
eligible for a new Plan loan, except if such Ineligible
Participant is an Employee, but he or she shall continue to
participate for all other purposes. An Ineligible Participant
or former Participant shall automatically become an active
Participant on the date he or she again becomes an Eligible
Employee.
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3 PARTICIPANT CONTRIBUTIONS
-------------------------
3.1 Before-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect
to reduce his or her Pay by an amount which does not exceed
the Contribution Dollar Limit, within the limits described in
the Contribution Percentage Limits paragraph of this Section
3, and have such amount contributed to the Plan by the
Employer as a Before-Tax Contribution. The election shall be
made as a whole percentage of Pay in such manner and with
such advance notice as prescribed by the Administrator. In no
event shall an Employee's Before-Tax Contributions under the
Plan and comparable contributions to all other plans,
contracts or arrangements of all Related Companies exceed the
Contribution Dollar Limit for the Employee's taxable year
beginning in the Plan Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or
her Before-Tax Contribution election at any time in such
manner and with such advance notice as prescribed by the
Administrator, and such election shall be effective with the
first payroll paid after such date. Participants'
Contribution election percentages shall automatically apply
to Pay increases or decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution election at
any time in such manner and with such advance notice as
prescribed by the Administrator, and such revocation shall be
effective with the first payroll paid after such date.
A Participant who is an Eligible Employee may resume
Contributions by making a new Contribution election at any
time in such manner and with such advance notice as
prescribed by the Administrator, and such election shall be
effective with the first payroll paid after such date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to time,
in writing, without the necessity of amending this Plan and
Trust, the minimum, if applicable, and maximum Before-Tax
Contribution percentages, prospectively or retrospectively
(for the current Plan Year), for all Participants. In
addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it
deems necessary to satisfy the tests described in Section 12.
As of the Effective Date, the Before-Tax Contribution maximum
percentage is 15%.
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19
Irrespective of the limits that may be established by the
Administrator in accordance with this paragraph, in no event
shall the contributions made by or on behalf of a Participant
for a Plan Year exceed the maximum allowable under Code
section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Before-Tax Contributions for a
calendar year to this Plan and comparable contributions to
any other qualified defined contribution plan in excess of
the Contribution Dollar Limit may notify the Administrator in
writing by the following March 1 (or as late as April 14 if
allowed by the Administrator) that an excess has occurred. In
this event, the amount of the excess specified by the
Participant, adjusted for investment gain or loss, shall be
refunded to him or her by April 15 and shall not be included
as an Annual Addition under Code section 415 for the year
contributed.
Excess amounts shall first be taken from unmatched Before-Tax
Contributions and then from matched Before-Tax Contributions.
Any Matching Contributions attributable to refunded excess
Before-Tax Contributions as described in this Section,
adjusted for investment gain or loss, shall be forfeited and
used to reduce Contributions made by an Employer as soon as
administratively feasible. Refunds or forfeitures shall not
include investment gain or loss for the period between the
end of the applicable calendar year and the date of
distribution or forfeiture.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover
Contributions, may only be made through payroll deduction.
Such amounts shall be paid to the Trustee in cash and posted
to each Participant's Account(s) as soon as such amounts can
reasonably be separated from the Employer's general assets
and balanced against the specific amount made on behalf of
each Participant. In no event, however, shall such amounts be
paid to the Trustee more than 90 days after the date amounts
are deducted from a Participant's Pay. Before-Tax
Contributions shall be treated as Contributions made by an
Employer in determining tax deductions under Code section
404(a).
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4 ROLLOVERS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
---------------------------------------------------------
4.1 Rollovers
The Administrator may authorize the Trustee to accept a
rollover contribution, within the meaning of Code section
402(c), 403(a)(4) or 408(d)(3)(A)(ii), in cash (or its
equivalent), directly from an Eligible Employee or as a
Direct Rollover from another qualified plan on behalf of the
Eligible Employee, even if he or she is not yet a
Participant. The Employee shall be responsible for furnishing
satisfactory evidence, in such manner as prescribed by the
Administrator, that the amount is eligible for rollover
treatment. A rollover contribution received directly from an
Eligible Employee must be paid to the Trustee in cash (or its
equivalent) within 60 days after the date received by the
Eligible Employee from a qualified plan or conduit individual
retirement account. Contributions described in this paragraph
shall be posted to the applicable Employee's Rollover Account
as of the date received by the Trustee.
If it is later determined that an amount contributed pursuant
to the above paragraph did not in fact qualify as a rollover
contribution under Code section 402(c), 403(a)(4) or
408(d)(3)(A)(ii), the balance credited to the Employee's
Rollover Account shall immediately be (1) segregated from all
other Plan assets, (2) treated as a nonqualified trust
established by and for the benefit of the Employee, and (3)
distributed to the Employee. Any such nonqualifying rollover
shall be deemed never to have been a part of the Plan.
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets
in cash or in kind directly from another qualified plan or
transfer assets in cash or in kind directly to another
qualified plan; provided that a transfer should not be
directed if:
(a) any amounts are not exempted by Code section
401(a)(11)(B) from the annuity requirements of Code
section 417 unless, in the event of a receipt of
assets, the Plan complies with such requirements or,
in the event of a transfer of assets, the receiving
Plan complies with such requirements; or
(b) any amounts include benefits protected by Code
section 411(d)(6) which would not be preserved under
applicable Plan provisions, in the event of a
receipt of assets or, under the applicable
provisions of the receiving plan, in the event of a
transfer of assets.
The Trustee may refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable;
or
(b) instructions for posting amounts to Participants'
Accounts are incomplete.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee.
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21
5 EMPLOYER CONTRIBUTIONS
----------------------
For purposes of Section 5.1, the Employer shall mean Roadway Regional
Group, Inc. or Viking Freight System, Inc. For purposes of Section 5.2,
5.3 and 5.4, the Employer shall mean Coles Express, Inc.
5.1 Viking/RRG Match Contributions
(a) Frequency and Eligibility. For each Plan Year, the
Employer shall make Viking/RRG Match Contributions,
as described in the following Allocation Method
paragraph, on behalf of each Participant who
contributed during the Plan Year while he or she was
a RRG Employee or a Viking Employee and was an
Employee on the last day of the Plan Year.
(b) Allocation Method. The Viking/RRG Match
Contributions for each Plan Year shall total 50% of
each eligible Participant's Before-Tax Contributions
for the Plan Year, made while he or she was a RRG
Employee or a Viking Employee, provided that no
Viking/RRG Match Contributions shall be made based
upon a Participant's Contributions in excess of 6%
of his or her Pay while a RRG Employee or a Viking
Employee. The Employer may change the 50% matching
rate or the 6% of considered Pay to any other
percentages, including 0%, generally by notifying
eligible Participants no later than the due date,
including extensions, for filing the Employer's
federal income tax return for the applicable year.
(c) Timing, Medium and Posting. The Employer shall make
each Plan Year's Viking/RRG Match Contribution in
cash as soon as administratively feasible, and for
purposes of deducting such Contribution, not later
than the Employer's federal tax filing date,
including extensions. The Trustee shall post such
amount to each Participant's Viking/RRG Match
Account once the total Contribution received has
been balanced against the specific amount to be
credited to each Participant's Viking/RRG Match
Account.
5.2 RSI Stock Match Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer
shall make RSI Stock Match Contributions, as
described in the following Allocation Method
paragraph, on behalf of each Participant who
contributed during the period while he or she was a
Coles Employee.
(b) Allocation Method. The RSI Stock Match Contributions
for each period shall total 25% of each eligible
Participant's Before-Tax Contributions for the
period, made while he or she was a Coles Employee,
provided that no RSI Stock Match Contributions
shall be made based upon a
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15
22
Participant's Contributions in excess of 6% of his
or her Pay while a Coles Employee. The Employer may
change the 25% matching rate or the 6% of
considered Pay to any other percentages, including
0%, generally by notifying eligible Participants in
sufficient time to adjust their Contribution
elections prior to the start of the period for
which the new percentages apply.
(c) Timing, Medium and Posting. The Employer shall make
each period's RSI Stock Match Contribution in cash
as soon as administratively feasible, and for
purposes of deducting such Contribution, not later
than the Employer's federal tax filing date,
including extensions. The Trustee shall post such
amount to each Participant's RSI Stock Match Account
once the total Contribution received has been
balanced against the specific amount to be credited
to each Participant's RSI Stock Match Account.
5.3 Coles Match Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer
shall make Coles Match Contributions, as described
in the following Allocation Method paragraph, on
behalf of each Participant who contributed during
the period while he or she was a Coles Employee.
(b) Allocation Method. The Coles Match Contributions for
each period shall total 25% of each eligible
Participant's Before-Tax Contributions for the
period, made while he or she was a Coles Employee,
provided that no Coles Match Contributions shall be
made based upon a Participant's Contributions in
excess of 6% of his or her Pay while a Coles
Employee. The Employer may change the 25% matching
rate or the 6% of considered Pay to any other
percentages, including 0%, generally by notifying
eligible Participants in sufficient time to adjust
their Contribution elections prior to the start of
the period for which the new percentages apply.
(c) Timing, Medium and Posting. The Employer shall make
each period's Coles Match Contribution in cash as
soon as administratively feasible, and for purposes
of deducting such Contribution, not later than the
Employer's federal tax filing date, including
extensions. The Trustee shall post such amount to
each Participant's Coles Match Account once the
total Contribution received has been balanced
against the specific amount to be credited to each
Participant's Coles Match Account.
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23
5.4 Profit Sharing Contributions
(a) Frequency and Eligibility. Effective January 1,
1995, for each Plan Year, the Employer may make
Profit Sharing Contributions on behalf of each
Participant who was a Coles Employee at any time
during the Plan Year and was an Employee on the last
day of the Plan Year.
If such Contributions are made, such Contributions
shall also be made on behalf of each Participant who
was a Coles Employee at any time during the Plan
Year but who ceased being an Employee during the
period after having attained age 59 1/2, or by
reason of his or her Disability or death.
(b) Allocation Method. The Profit Sharing Contribution
(including any Forfeiture Account amounts applied as
Profit Sharing Contributions in accordance with
Section 8.4) for each Plan Year, shall be in an
amount determined by the Employer and allocated
among eligible Participants in direct proportion to
their Pay while a Coles Employee.
(c) Timing, Medium and Posting. The Employer shall make
each Plan Year's Profit Sharing Contribution in cash
as soon as administratively feasible, and for
purposes of deducting such Contribution, not later
than the Employer's federal tax filing date,
including extensions. The Trustee shall post such
amount to each Participant's Profit Sharing Account
once the total Contribution received has been
balanced against the specific amount to be credited
to each Participant's Profit Sharing Account.
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6 ACCOUNTING
----------
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of
Accounts for each Participant in order to reflect
transactions both by type of Contribution and investment
medium. Financial transactions shall be accounted for at the
individual Account level by posting each transaction to the
appropriate Account of each affected Participant. Participant
Account values shall be maintained in shares for the
Investment Funds and in dollars for the Sweep and Loan
Accounts. At any point in time, the Account value shall be
determined using the most recent Trade Date values provided
by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep
Account shall be credited with interest up until the date on
which it is removed from the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each
Trade Date. For any transaction to be processed as of a Trade
Date, the Trustee must receive instructions for the
transaction by the Sweep Date. Such instructions shall apply
to amounts held in the Account on that Sweep Date. Financial
transactions of the Investment Funds shall be posted to
Participants' Accounts as of the Trade Date, based upon the
Trade Date values provided by the Trustee, and settled on the
Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in
shares. The Trustee is responsible for determining the share
values of each Investment Fund as of each Trade Date. To the
extent an Investment Fund is comprised of collective
investment funds of the Trustee, or any other fiduciary to
the Plan, the share values shall be determined in accordance
with the rules governing such collective investment funds,
which are incorporated herein by reference. All other share
values shall be determined by the Trustee. The share value of
each Investment Fund shall be based on the fair market value
of its underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to
Account maintenance, transaction and Investment Fund
management and maintenance, as set forth below, are paid by
the Employer directly, or indirectly, through the Forfeiture
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18
25
Account as directed by the Administrator, such fees and
expenses shall be paid as set forth below.
(a) Account Maintenance: Account maintenance fees and
expenses, may include but are not limited to,
administrative, Trustee, government annual report
preparation, audit, legal, nondiscrimination testing
and fees for any other special services. Account
maintenance fees shall be charged to Participants on
a per Participant basis provided that no fee shall
reduce a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may
include but are not limited to, periodic installment
payment, Investment Fund election change and loan
fees. Transaction fees shall be charged to the
Participant's Account involved in the transaction
provided that no fee shall reduce a Participant's
Account balance below zero.
(c) Investment Fund Management and Maintenance:
Management and maintenance fees and expenses related
to the Investment Funds shall be charged at the
Investment Fund level and reflected in the net gain
or loss of each Fund.
As of the Effective Date, a breakdown of which Plan fees and
expenses shall generally be borne by the Trust (and charged
to individual Participants' Accounts or charged at the
Investment Fund level and reflected in the net gain or loss
of each Fund) and those that shall be paid by the Employer is
set forth in Appendix B and may be changed from time to time
by the Administrator, in writing, without the necessity of
amending this Plan and Trust.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days,
from the Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account of
the Participant and accounted for in dollars as an earmarked
asset of the borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's
Account balance with the amount that would be credited to the
Account had no error or omission been made. Funds necessary
for any such restoration shall be provided through payment
made by the Employer, or by the Trustee to the extent the
error or omission is attributable to actions or inactions of
the Trustee, or if the restoration involves an Account
holding amounts contributed by an Employer, the Administrator
may direct the Trustee to use amounts from the Forfeiture
Account.
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26
6.8 Participant Statements
The Administrator shall provide Participants with statements
of their Accounts as soon after the end of each quarter of
the Plan Year as administratively feasible.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable
accounting methods in performing their respective duties
during any Conversion Period. This includes, but is not
limited to, the method for allocating net investment gains or
losses and the extent, if any, to which contributions
received by and distributions paid from the Trust during this
period share in such allocation.
6.10 QDROs
(a) Period of QDRO Determination. During any period of
time the Administrator, a court of competent
jurisdiction or other appropriate person, is
determining whether a domestic relations order
qualifies as a QDRO, the Administrator shall
separately account for the amounts which would be
payable to the alternate payee (as defined in Code
section 414(p)) if the order is determined to be a
QDRO. The Administrator may do so by establishing a
separate Account for the alternate payee.
If the domestic relations order is determined
to be a QDRO, if not already established as
described above, a separate Account shall be
established for the amounts which are payable to
the alternate payee. A determination that a
domestic relations order is a QDRO made after the
close of the 18 month period beginning with the
date payments are specified to begin shall be
applied prospectively only.
Any such separate Account established shall be
valued and accounted for in the same manner as any
other Account.
(b) Distributions Pursuant to QDROs. If a QDRO so
provides, the portion of a Participant's Account
payable to an alternate payee and credited to his or
her separate Account may be distributed, in a form
as permissible under Section 11 and Code section
414(p), to the alternate payee at the time specified
in the QDRO, regardless of whether the Participant
is entitled to a distribution from the Plan at such
time.
(c) Participant Loans. Except to the extent required by
law, an alternate payee, on whose behalf a separate
Account has been established, shall not be entitled
to borrow from such Account. If a QDRO specifies
that the alternate payee is entitled to any portion
of the Account of a Participant who has an
outstanding loan balance, all outstanding loans
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20
27
shall generally continue to be held in the
Participant's Account and shall not be divided
between the Participant's and alternate payee's
Accounts.
(d) Investment Direction. Where a separate Account has
been established on behalf of an alternate payee and
has not yet been distributed, the alternate payee
may direct the investment of such Account in the
same manner as if he or she were a Participant.
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28
7 INVESTMENT FUNDS AND ELECTIONS
------------------------------
7.1 Investment Funds
Except for Participants' Sweep and Loan Accounts, the Trust
shall be maintained in various Investment Funds. The
Administrator shall select the Investment Funds offered to
Participants and may change the number or composition of the
Investment Funds, subject to the terms and conditions agreed
to with the Trustee. As of the Effective Date or such other
date as stated, a list of the Investment Funds offered under
the Plan is set forth in Appendix A, and may be changed from
time to time by the Administrator, in writing, and as agreed
to by the Trustee, without the necessity of amending this
Plan and Trust.
7.2 Investment Fund Elections
Each Participant shall direct the investment of all of his or
her Accounts except for his or her RSI Stock Match Account
which shall be entirely invested in the Investment Fund
specified by the Administrator, which Investment Fund as of
the Effective Date is set forth in Appendix A.
A Participant shall make his or her investment election in
any combination of one or any number of the Investment Funds
offered in accordance with the procedures established by the
Administrator and Trustee. However, during any Conversion
Period, Trust assets may be held in any investment vehicle
permitted by the Plan, as directed by the Administrator,
irrespective of Participant investment elections.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific
Investment Fund, which maximum, if any, as of the Effective
Date is set forth in Appendix A, and may be changed from time
to time by the Administrator, in writing, without the
necessity of amending this Plan and Trust.
7.3 Responsibility for Investment Choice
Each Participant shall be solely responsible for the
selection of his or her Investment Fund choices. No fiduciary
with respect to the Plan is empowered to advise a Participant
as to the manner in which his or her Accounts are to be
invested, and the fact that an Investment Fund is offered
shall not be construed to be a recommendation for investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which
is not yet held in an Investment Fund and for which no valid
investment election is on file. The Investment Fund
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29
specified as of the Effective Date is set forth in Appendix
A, and may be changed from time to time by the Administrator,
in writing, without the necessity of amending this Plan and
Trust.
7.5 Timing
A Participant shall make his or her initial investment
election upon becoming a Participant and may change his or
her investment election at any time in accordance with the
procedures established by the Administrator and Trustee.
Investment elections received by the Trustee by the Sweep
Date shall be effective on the following Trade Date.
7.6 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes in
excess of a specified number per year as determined by the
Administrator.
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30
8 VESTING & FORFEITURES
---------------------
8.1 Fully Vested Accounts
A Participant shall be fully vested in these Accounts at all
times:
Before-Tax Account
Prior Before-Tax Account
After-Tax Account
Rollover Account
Viking/RRG Match Account
RSI Stock Match Account
Coles Match Account
Prior Profit Sharing Account
Notwithstanding, prior to the Effective Date the portion of a
Participant's Prior Profit Sharing Account attributable to
amounts designated as "Discretionary Employer Contributions"
under the Predecessor Plan became vested in accordance with a
vesting schedule then in effect.
8.2 Full Vesting Upon Certain Events
A Participant's entire Account shall become fully vested,
without regard to his or her Years of Vesting Service, once
he or she has attained his or her Normal Retirement Date as
an Employee or upon his or her incurring a Disability or
terminating employment with all Related Companies due to his
or her death.
8.3 Vesting Schedule
In addition to the vesting provided above, a Participant's
Profit Sharing Account shall become vested in accordance with
the following schedule:
YEARS OF VESTING VESTED
SERVICE PERCENTAGE
------- ----------
Less than 5 0%
5 or more 100%
If this vesting schedule is changed, the vested percentage
for each Participant shall not be less than his or her vested
percentage determined as of the last day prior to this
change, and for any Participant with at least three Years of
Vesting Service when the schedule is changed, vesting shall
be determined using the more favorable vesting schedule.
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31
8.4 Forfeitures
A Participant's non-vested Account balance shall be forfeited
as of the Settlement Date following the Sweep Date on which
the Administrator has reported to the Trustee that the
Participant's employment has terminated with all Related
Companies. Forfeitures from all Employer Contribution
Accounts shall be transferred to and maintained in a single
Forfeiture Account, which shall be invested in interest
bearing deposits of the Trustee. Forfeitures from all
Employer Contribution Accounts shall be accounted for
separately by Account type and further accounted for
separately by each Employer.
An Employer's Forfeiture Account amounts shall be utilized to
restore Accounts for amounts attributable to the Employer
that were previously forfeited, to pay the Employer's Plan
fees and expenses or may increase the amount allocated by the
Employer as Profit Sharing Contributions, as directed by the
Administrator.
8.5 Rehired Employees
(a) Service. If a former Employee is rehired, all Years
of Vesting Service credited when his or her
employment last terminated shall be counted in
determining his or her vested interest.
(b) Account Restoration. If a former Employee is rehired
before he or she has a Break in Service, the amount
forfeited when his or her employment last terminated
shall be restored to his or her Account. The
restoration shall include the interest which would
have been credited had such forfeiture been invested
in the Sweep Account from the date forfeited until
the date the restoration amount is restored. The
amount shall come from the Forfeiture Account to the
extent possible, and any additional amount needed
shall be contributed by the Employer. The vested
interest in his or her restored Account shall then
be equal to:
V% times (AB + D) - D
where:
V% = current vested percentage
AB = current account balance
D = amount previously distributed
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9 PARTICIPANT LOANS
-----------------
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms and
conditions set forth in this Section.
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and
with such advance notice as prescribed by the Administrator.
All loans shall be evidenced by a promissory note, secured
only by the portion of the Participant's Account from which
the loan is made, and the Plan shall have a lien on this
portion of his or her Account.
9.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to take out a loan under the Plan, except that Spousal
Consent shall be required if any portion of such loan shall
include Predecessor Plan Amounts or amounts attributable to
the Participant's participation in the Plan while a Coles
Employee.
9.4 Loan Approval
The Administrator, or the Trustee, if otherwise authorized by
the Administrator and agreed to by the Trustee, is
responsible for determining that a loan request conforms to
the requirements described in this Section and granting such
request.
9.5 Loan Funding Limits, Account Sources and Funding Order
The loan amount must meet all of the following limits as
determined as of the Sweep Date the loan is processed and
shall be funded from the Participant's Accounts as follows:
(a) Plan Minimum Limit. The minimum amount for any loan
is $1,000.
(b) Plan Maximum Limit, Account Sources and Funding
Order. Subject to the legal limit described in (c)
below, the maximum a Participant may borrow,
including the outstanding balance of existing Plan
loans, is 100% of the following of the Participant's
Accounts which are fully vested in the priority
order as follows and except that for the period
prior to July 1, 1995 a Participant's Viking/RRG
Match Account shall not be included as an Account
source for funding and "50%" shall be substituted
for the preceding reference to "100%" with regard to
a Participant who is a RRG Employee or a Viking
Employee:
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26
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Before-Tax Account
RSI Stock Match Account
Viking/RRG Match Account
Coles Match Account
Prior Before-Tax Account
Rollover Account
After-Tax Account
(c) Legal Maximum Limit. The maximum a Participant may
borrow, including the outstanding balance of
existing Plan loans, is 50% of his or her vested
Account balance, not to exceed $50,000. However, the
$50,000 maximum is reduced by the Participant's
highest outstanding balance of loans under the Plan
during the 12 month period ending on the day before
the Sweep Date as of which the loan is made over the
outstanding balance of such loans on the date on
which the loan is made. For purposes of this
paragraph, the loans of all the qualified plans of
the Related Companies shall be treated as loans
under this Plan.
9.6 Maximum Number of Loans
A Participant may have only one loan outstanding at any given
time regardless of his or her Employer.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets
of his or her own Account. The available assets shall be
determined first by Account type and then within each Account
used for funding a loan, amounts shall first be taken from
the Sweep Account and then taken by Investment Fund in direct
proportion to the market value of the Participant's interest
in each Investment Fund as of the Trade Date on which the
loan is processed.
The loan shall be funded on the Settlement Date following the
Trade Date as of which the loan is processed. The Trustee
shall make payment to the Participant as soon thereafter as
administratively feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall be a
fixed reasonable rate of interest, determined by the
Administrator, which provides the Plan with a return
commensurate with the prevailing interest rate charged by
persons in the business of lending money for loans which
would be made under similar circumstances. As of the
Effective Date or such other date as stated, the interest
rate is determined as set forth in Appendix C, and may be
changed from time to time by the Administrator, in writing,
without the necessity of amending this Plan and Trust.
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27
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9.9 Loan Payment
Substantially level amortization shall be required of each
loan with payments made at least monthly, generally through
payroll deduction. Loans may be prepaid in full or in part at
any time. The Participant may choose the loan repayment
period, not to exceed 5 years, except that the repayment
period may be for any period not to exceed 10 years if the
purpose of the loan is to acquire the Participant's principal
residence.
9.10 Loan Payment Hierarchy
Loan principal payments shall be credited to the
Participant's Accounts in the inverse of the order used to
fund the loan. Loan interest shall be credited to the
Participant's Accounts in direct proportion to the principal
payment. Loan payments credited to Accounts for which the
Participant directs investment as described in Section 7 are
credited to the Investment Funds based upon the Participant's
current investment election for new Contributions. Loan
payments credited to Accounts for which the Participant does
not direct investment as described in Section 7 are credited
to the Investment Funds specified by the Administrator for
such Accounts.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan payments
for up to 12 months for a Participant who is on a Leave of
Absence without pay. During the suspension period interest
shall continue to accrue on the outstanding loan balance. At
the expiration of the suspension period all outstanding loan
payments and accrued interest thereon shall be due unless
otherwise agreed upon by the Administrator.
9.12 Loan Default
A loan is treated as a default if scheduled loan payments are
more than 90 days late. A Participant shall then have 30 days
from the time he or she receives written notice of the
default and a demand for past due amounts to cure the default
before it becomes final.
In the event of default, the Administrator may direct the
Trustee to report the outstanding principal balance of the
loan and accrued interest thereon as a taxable distribution.
As soon as a Plan withdrawal or distribution to such
Participant would otherwise be permitted, the Administrator
may instruct the Trustee to execute upon its security
interest in the Participant's Account by distributing the
note to the Participant.
9.13 Call Feature
The Administrator shall have the right to call any
Participant loan once a Participant's employment with all
Related Companies has terminated or if the Plan is
terminated.
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10 IN-SERVICE WITHDRAWALS
----------------------
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee
are permitted pursuant to the terms and conditions set forth
in this Section and as required by law pursuant to the terms
and conditions set forth in Section 11.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in
such manner and with such advance notice as prescribed by the
Administrator. The Participant shall be provided the notice
prescribed by Code section 402(f).
Code sections 401(a)(11) and 417 do not apply to in-service
withdrawals under the Plan as described in this Section. An
in-service withdrawal may therefore commence less than 30
days after the aforementioned notice is provided, if:
(a) the Participant is clearly informed that he or she
has the right to a period of at least 30 days after
receipt of such notice to consider his or her option
to elect or not elect a Direct Rollover for all or a
portion, if any, of his or her in-service withdrawal
which shall constitute an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a Direct Rollover for all or a
portion, if any, of his or her in-service withdrawal
which shall constitute an Eligible Rollover
Distribution or alternatively elects to have all or
a portion made payable directly to him or her,
thereby not electing a Direct Rollover for all or a
portion thereof.
10.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to make an in-service withdrawal under the Plan,
except that Spousal Consent shall be required if any portion
of such in-service withdrawal shall include Predecessor Plan
Amounts or amounts attributable to the Participant's
participation in the Plan while a Coles Employee.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee, if otherwise authorized by
the Administrator and agreed to by the Trustee, is
responsible for determining that an in-service withdrawal
request conforms to the requirements described in this
Section and granting such request.
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29
36
10.5 Minimum Amount, Payment Form and Medium
There is no minimum amount for any type of in-service
withdrawal.
The form of payment for an in-service withdrawal shall be a
single lump sum and payment shall be made in cash. With
regard to the portion of an in-service withdrawal
representing an Eligible Rollover Distribution, a Participant
may elect a Direct Rollover for all or a portion of such
amount.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made
solely from the assets of his or her own Account and shall be
based on the Account values as of the Trade Date the
in-service withdrawal is processed. The available assets
shall be determined first by Account type and then within
each Account used for funding an in-service withdrawal,
amounts shall first be taken from the Sweep Account and then
taken by Investment Fund in direct proportion to the market
value of the Participant's interest in each Investment Fund
(which excludes his or her Loan Account balance) as of the
Trade Date on which the in-service withdrawal is processed.
The in-service withdrawal shall be funded on the Settlement
Date following the Trade Date as of which the in-service
withdrawal is processed. The Trustee shall make payment as
soon thereafter as administratively feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may
request the withdrawal of up to the amount necessary
to satisfy a financial need including amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the withdrawal. Only requests for withdrawals
(1) on account of a Participant's "Deemed Financial
Need", and (2) which are "Deemed Necessary" to
satisfy the financial need shall be approved.
(b) "Deemed Financial Need". An immediate and heavy
financial need relating to:
(1) the payment of unreimbursable medical
expenses described under Code section
213(d) incurred (or to be incurred) by the
Employee, his or her spouse or dependents;
(2) the purchase (excluding mortgage payments)
of the Employee's principal residence;
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30
37
(3) the payment of unreimbursable tuition and
related educational fees (which effective
January 1, 1995 shall include room and
board) for up to the next 12 months of
post-secondary education for the Employee,
his or her spouse or dependents;
(4) the payment of amounts necessary for the
Employee to prevent losing his or her
principal residence through eviction or
foreclosure on the mortgage; or
(5) any other circumstance specifically
permitted under Code section
401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "deemed
necessary" to satisfy the financial need only if the
withdrawal amount does not exceed the financial need
and all of these conditions are met:
(1) the Employee has obtained all possible
withdrawals (other than hardship
withdrawals) and nontaxable loans available
from this Plan and all other plans
maintained by Related Companies;
(2) the Administrator shall suspend the
Employee from making any contributions to
this Plan and all other qualified and
nonqualified plans of deferred compensation
and all stock option or stock purchase
plans maintained by Related Companies for
12 months from the date the withdrawal
payment is made; and
(3) the Administrator shall reduce the
Contribution Dollar Limit for the Employee
with regard to this Plan and all other
plans maintained by Related Companies, for
the calendar year next following the
calendar year of the withdrawal by the
amount of the Employee's Before-Tax
Contributions for the calendar year of the
withdrawal.
(d) Account Sources and Funding Order. All available
amounts must first be withdrawn from a Participant's
After-Tax Account. The remaining withdrawal amount
shall come from the following of the Participant's
fully vested Accounts, in the priority order as
follows and except that for the period prior to July
1, 1995 a Participant's Viking/RRG Match Account
shall not be included as an Account source for
funding:
Rollover Account
RSI Stock Match Account
Viking/RRG Match Account
Coles Match Account
Prior Before-Tax Account
Before-Tax Account
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38
The amount that may be withdrawn from a
Participant's Prior Before- Tax Account shall not
include any earnings credited to his or her Prior
Before-Tax Account. The amount that may be withdrawn
from a Participant's Before-Tax Account shall not
include any earnings credited to his or her
Before-Tax Account after the start of the first Plan
Year beginning after December 31, 1988.
(e) Permitted Frequency. There is no restriction on the
number of Hardship withdrawals permitted to a
Participant.
(f) Suspension from Further Contributions. Upon making a
Hardship withdrawal, a Participant may not make
additional Before-Tax Contributions (or additional
contributions to all other qualified and
nonqualified plans of deferred compensation and all
stock option or stock purchase plans maintained by
Related Companies) for a period of 12 months from
the date the withdrawal payment is made.
10.8 After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may
withdraw from the Accounts listed in paragraph (b)
below.
(b) Account Sources and Funding Order. The withdrawal
amount shall come from a Participant's After-Tax
Account.
(c) Permitted Frequency. There is no restriction on the
number of After- Tax Account withdrawals permitted
to a Participant.
(d) Suspension from Further Contributions. An After-Tax
Account withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
10.9 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and
over age 59 1/2 may withdraw from the Accounts
listed in paragraph (b) below.
(b) Account Sources and Funding Order. The withdrawal
amount shall come from the following of the
Participant's fully vested Accounts, in the priority
order as follows, except that the Participant may
instead choose to have amounts taken from his or her
After-Tax Account first:
Rollover Account
Before-Tax Account
RSI Stock Match Account
Viking/RRG Match Account
Profit Sharing Account
Coles Match Account
Prior Profit Sharing Account
Prior Before-Tax Account
After-Tax Account
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32
39
(c) Permitted Frequency. There is no restriction on the
number of Over Age 59 1/2 withdrawals permitted to a
Participant.
(d) Suspension from Further Contributions. An Over Age
59 1/2 withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
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40
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS, UPON DISABILITY OR
------------------------------------------------------
AS REQUIRED BY LAW
------------------
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his
or her death, shall be provided with information regarding
all optional times and forms of distribution available, to
include the notices prescribed by Code section 402(f) and
Code section 411(a)(11). Subject to the other requirements of
this Section, a Participant, or his or her Beneficiary in the
case of his or her death, may elect, in such manner and with
such advance notice as prescribed by the Administrator, to
have his or her vested Account balance paid to him or her
beginning upon any Settlement Date following the
Participant's termination of employment with all Related
Companies, upon his or her Disability or, if earlier, or at
the time required by law as set forth in Section 11.6.
If a distribution is one to which Code sections 401(a)(11)
and 417 do not apply, such distribution may commence less
than 30 days after the aforementioned notices are provided,
if:
(a) the Participant is clearly informed that he or she
has the right to a period of at least 30 days after
receipt of such notices to consider the decision as
to whether to elect a distribution and if so to
elect a particular form of distribution and to elect
or not elect a Direct Rollover for all or a portion,
if any, of his or her distribution which shall
constitute an Eligible Rollover Distribution; and
(b) the Participant after receiving such notices,
affirmatively elects a distribution and a Direct
Rollover for all or a portion, if any, of his or her
distribution which shall constitute an Eligible
Rollover Distribution or alternatively elects to
have all or a portion made payable directly to him
or her, thereby not electing a Direct Rollover for
all or a portion thereof.
Effective January 1, 1996, if a distribution is one to which
Code sections 401(a)(11) and 417 do apply, such distribution
may commence less than 30 days, but more than 7 days, after
the aforementioned notices are provided, if the provisions of
(a) and (b) above are satisfied and the Participant's
election includes Spousal Consent.
11.2 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to receive a distribution under the Plan, except that
Spousal Consent shall be required if any portion of such
distribution shall include Predecessor Plan Amounts or
amounts attributable to the Participant's participation in
the Plan while a Coles Employee.
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34
41
11.3 Payment Form and Medium
(a) Benefit Attributable to Participation in the Plan
While a RRG Employee or a Viking Employee: With
regard to a Participant's benefit attributable to
his or her participation in the Plan while a RRG
Employee or a Viking Employee, a Participant shall
be paid such benefit in the form of a single lump
sum. Notwithstanding, if he or she is an Employee at
the time he or she is required by law to commence
distribution, or anytime thereafter, he or she may
instead elect to be paid annually in a lump sum an
amount sufficient to comply with Code section
401(a)(9).
(b) Benefit Attributable to Predecessor Plan Amounts or
Participation in the Plan While a Coles Employee:
With regard to a Participant's benefit attributable
to Predecessor Plan Amounts or his or her
participation in the Plan while a Coles Employee, a
Participant may elect to have such benefit be paid
in (1) a single lump sum or (2) periodic
installments over a period not to exceed the life
expectancy of the Participant and his or her
Beneficiary.
To preserve benefits protected by Code section
411(d)(6), a Participant whose Account includes
Predecessor Plan Amounts, may elect to have his or
her benefit attributable to such Predecessor Plan
Amounts be paid in one of the following forms:
(1) a single life annuity, or
(2) a joint and 50%, 75% or 100% survivor annuity.
Any annuity option permitted shall be provided
through the purchase of a non-transferable single
premium contract from an insurance company which
must conform to the terms of the Plan and which
shall be distributed to the Participant or
Beneficiary in complete satisfaction of the benefit
due.
Notwithstanding the above, with regard to Participant who is
an Employee at the time he or she elects payment of his or
her vested Account balance by reason of his or her
Disability, his or her vested Account balance shall be paid
in the form of a single lump sum.
Distributions other than annuity contracts shall be made in
cash, except to the extent a distribution consists of a loan
call as described in Section 9. With regard to the portion of
a distribution representing an Eligible Rollover
Distribution, a Distributee may elect a Direct Rollover for
all or a portion of such amount.
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11.4 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from the
assets of his or her own Accounts and shall be based on the
Account values as of the Trade Date the distribution is
processed. The available assets shall be determined first by
Account type and then within each Account used for funding a
distribution, amounts shall first be taken from the Sweep
Account and then taken by Investment Fund in direct
proportion to the market value of the Participant's interest
in each Investment Fund as of the Trade Date on which the
distribution is processed.
The distribution shall be funded on the Settlement Date
following the Trade Date as of which the distribution is
processed. The Trustee shall make payment as soon thereafter
as administratively feasible.
11.5 Deemed Distribution
For purposes of Section 8.4, if at the time a Participant's
employment with all Related Companies has terminated, the
Participant's vested Account balance attributable to Accounts
subject to vesting as described in Section 8, is zero, his or
her vested Account balance shall be deemed distributed as of
the Settlement Date following the Sweep Date on which the
Administrator has reported to the Trustee that the
Participant's employment with all Related Companies has
terminated.
11.6 Latest Commencement Permitted
In addition to any other Plan requirements and unless a
Participant elects otherwise, his or her benefit payments
shall begin not later than 60 days after the end of the Plan
Year in which the Participant's employment with all Related
Companies ends (other than by reason of death) or the
Participant attains his or her Normal Retirement Date,
whichever is later. However, if the amount of the payment or
the location of the Participant or his or her Beneficiary
(after a reasonable search) cannot be ascertained by that
deadline, payment shall be made no later than 60 days after
the earliest date on which such amount or location is
ascertained but in no event later than as described below. A
Participant's failure to elect in such manner as prescribed
by the Administrator to have his or her vested Account
balance paid to him or her, shall be deemed an election by
the Participant to defer his or her distribution.
Benefit payments shall begin by the April 1 immediately
following the end of the calendar year in which the
Participant attains age 70 1/2, whether or not he or she is
an Employee, and except that distribution for an Employee who
was born before July 1, 1917 and who is not a 5% owner does
not need to begin until his or her employment with all
Related Companies ends.
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43
If benefit payments cannot begin at the time required because
the location of the Participant cannot be ascertained (after
a reasonable search), the Administrator may, at any time
thereafter, treat such person's Account as forfeited subject
to the provisions of Section 18.5.
11.7 Payment Within Life Expectancy
The Participant's payment election must be consistent with
the requirement of Code section 401(a)(9)and Treasury
regulations issued thereunder, including Treasury regulation
section 1.401(a)(9)-2, which provisions are incorporated by
reference, provided that such provisions shall override the
other distribution provisions of the Plan only to the extent
that they are inconsistent with such other Plan provisions.
All payments are to be completed within a period not to
exceed the lives or the joint and last survivor life
expectancy of the Participant and his or her Beneficiary. The
life expectancies of a Participant and his or her
Beneficiary, if such Beneficiary is his or her spouse, may be
recomputed annually.
11.8 Incidental Benefit Rule
The Participant's payment election must be consistent with
the requirement that, if the Participant's spouse is not his
or her sole primary Beneficiary, the minimum annual
distribution for each calendar year, beginning with the year
in which he or she attains age 70 1/2 (or such later date as
provided otherwise in Section 11), shall not be less than the
quotient obtained by dividing (a) the Participant's vested
Account balance as of the last Trade Date of the preceding
year by (b) the applicable divisor as determined under the
incidental benefit requirements of Code section 401(a)(9) and
the Treasury regulations incorporated herein pursuant to
Section 11.7.
11.9 Payment to Beneficiary
With regard to a Participant's benefit attributable to his or
her participation in the Plan while a RRG Employee or a
Viking Employee, payment to a Beneficiary must be completed
by the end of the calendar year that contains the fifth
anniversary of the Participant's death.
With regard to a Participant's benefit attributable to
Predecessor Plan Amounts or his or her participation in the
Plan while a Coles Employee, payment to a Beneficiary must
either: (1) be completed by the end of the calendar year that
contains the fifth anniversary of the Participant's death or
(2) begin by the end of the calendar year that contains the
first anniversary of the Participant's death and be completed
within the period of the Beneficiary's life or life
expectancy, except that:
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37
44
(a) If the Participant dies after the April 1
immediately following the end of the calendar year
in which he or she attains age 70 1/2, payment to
his or her Beneficiary must be made at least as
rapidly as provided in the Participant's
distribution election;
(b) If the surviving spouse is the Beneficiary, payments
need not begin until the end of the calendar year in
which the Participant would have attained age 70 1/2
and must be completed within the spouse's life or
life expectancy; and
(c) If the Participant and the surviving spouse who is
the Beneficiary die (1) before the April 1
immediately following the end of the calendar year
in which the Participant would have attained age 70
1/2 and (2) before payments have begun to the
spouse, the spouse shall be treated as the
Participant in applying these rules.
11.10 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the
Participant's remaining Plan interest at the time of his or
her death. The designation may be changed at any time.
However, a Participant's spouse shall be the sole primary
Beneficiary unless the designation includes Spousal Consent
for another Beneficiary. If no proper designation is in
effect at the time of a Participant's death or if the
Beneficiary does not survive the Participant, the Beneficiary
shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, (or if a
child does not survive the Participant, and that
child leaves issue, the issue shall be entitled to
that child's share, by right of representation) or
(c) Participant's estate.
11.11 QJSA and QPSA Annuity Information and Elections
The following definitions, information and election rules
shall apply to any Participant who is eligible for an annuity
option and who elects an annuity option and only with regard
to the Participant's Predecessor Plan Amounts:
(a) Annuity Starting Date. The first day of the first
period for which an amount is payable as an annuity,
or, in the case of a benefit not payable in the form
of an annuity, the first day on which all events
have occurred which entitle the Participant to such
benefit. Such date shall be a date no earlier than
the expiration of the 30-day period commencing the
day after the information described in the QJSA
Information to a Participant paragraph below is
provided to the
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45
Participant, except that effective January 1, 1996,
"7-day period" shall be substituted for the
preceding reference to "30-day period".
(b) "QJSA". A qualified joint and survivor annuity,
meaning for a married Participant, a form of benefit
payment which is the actuarial equivalent of the
Participant's vested Account balance at the Annuity
Starting Date, payable to the Participant in monthly
payments for life and providing that, if the
Participant's spouse survives him or her, monthly
payments equal to 50% of the amount payable to the
Participant during his or her lifetime shall be paid
to the spouse for the remainder of such person's
lifetime and for a single Participant, a form of
benefit payment which is the actuarial equivalent of
the Participant's vested Account balance at the
Annuity Starting Date, payable to the Participant in
monthly payments for life.
(c) "QPSA". A qualified pre-retirement survivor annuity,
meaning that upon the death of a Participant before
the Annuity Starting Date, the vested portion of the
Participant's Account becomes payable to the
surviving spouse as a life annuity, except to the
extent of any Loan Account balance, unless Spousal
Consent has been given to a different Beneficiary or
the surviving spouse chooses a different form of
payment.
(d) QJSA Information to a Participant. No more than 90
days before the Annuity Starting Date, each
Participant shall be given a written explanation of
(1) the terms and conditions of the QJSA, (2) the
right to a period of at least 30 days after receipt
of the written explanation to make an election to
waive this form of payment and choose an optional
form of payment and the effect of this election, (3)
the right to revoke this election and the effect of
this revocation, and (4) the need for Spousal
Consent.
(e) QJSA Election. A Participant may elect, and such
election shall include Spousal Consent if married,
at any time within the 90 day period ending on the
Annuity Starting Date, to (1) waive the right to
receive the QJSA and elect an optional form of
payment, or (2) revoke or change any such election.
(f) QPSA Beneficiary Information to Participant. Upon
becoming a Participant, and with updates as needed
to insure such information is accurate and readily
available to each Participant who is between the
ages of 32 and 35, each married Participant shall be
given written information stating that (1) his or
her death benefit is payable to his or her surviving
spouse, (2) he or she may choose that the benefit be
paid to a different Beneficiary, (3) he or she has
the right to revoke or change a prior designation
and the effects of such revocation or change, and
(4) the need for Spousal Consent.
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46
(g) QPSA Beneficiary Designation by Participant. A
married Participant may designate, with Spousal
Consent, a non-spouse Beneficiary at any time after
the Participant has been given the information in
the QPSA Beneficiary Information to Participant
paragraph above and upon the earlier of (1) the date
the Participant has terminated employment, or (2)
the beginning of the Plan Year in which the
Participant attains age 35.
(h) QPSA Information to a Surviving Spouse. Each
surviving spouse shall be given a written
explanation of (1) the terms and conditions of being
paid his or her Account balance in the form of a
single life annuity, (2) the right to make an
election to waive this form of payment and choose an
optional form of payment and the effect of this
election, and (3) the right to revoke this election
and the effect of this revocation.
(i) QPSA Election by Surviving Spouse. A surviving
spouse may elect, at any time up to the Annuity
Starting Date, to (1) waive the right to receive a
single life annuity and elect an optional form of
payment, or (2) revoke or change any such election.
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12 ADP AND ACP TESTS
-----------------
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12
(where a definition is contained in both Sections 1 and 12,
for purposes of Section 12 the Section 12 definition shall be
controlling):
(a) "ACP" or "Average Contribution Percentage". The
Average Percentage calculated using Contributions
allocated to Participants as of a date within the
Plan Year.
(b) "ACP Test". The determination of whether the ACP is
in compliance with the Basic or Alternative
Limitation for a Plan Year (as defined in Section
12.2).
(c) "ADP" or "Average Deferral Percentage". The Average
Percentage calculated using Deferrals allocated to
Participants as of a date within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is
in compliance with the Basic or Alternative
Limitation for a Plan Year (as defined in Section
12.2).
(e) "Average Percentage". The average of the calculated
percentages for Participants within the specified
group. The calculated percentage refers to either
the "Deferrals" or "Contributions" (as defined in
this Section) actually paid on each such
Participant's behalf for the Plan Year, divided by
his or her Compensation for the portion of the Plan
Year in which he or she was an Eligible Employee
while a Participant. (Before-Tax Contributions to
this Plan or comparable contributions to plans of
Related Companies which shall be refunded solely
because they exceed the Contribution Dollar Limit
are included in the percentage for the HCE Group but
not for the NHCE Group.)
(f) "Contributions" shall include Matching Contributions
and for the Plan Year ending December 31, 1995
"Employee Voluntary Contributions" for the period
January 1, 1995 through March 31,1995 made under the
Predecessor Plan. In addition, Contributions may
include Before-Tax Contributions, only to the extent
that (1) the Employer elects to use them, (2) they
are not used or counted in the ADP Test and (3) they
otherwise satisfy the requirements as prescribed
under Code section 401(m) permitting treatment as
Contributions for purposes of the ACP Test.
(g) "Deferrals" shall include Before-Tax Contributions.
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48
(h) "Family Member". An Employee who is, at any time
during the Plan Year or Lookback Year, a spouse,
lineal ascendant or descendant, or spouse of a
lineal ascendant or descendant of (1) an active or
former Employee who at any time during the Plan Year
or Lookback Year is a more than 5% Owner (within the
meaning of Code section 414(q)(3)), or (2) a HCE who
is among the 10 Employees with the highest
Compensation for such Year.
(i) "HCE" or "Highly Compensated Employee". With respect
to each Employer and its Related Companies, an
Employee during the Plan Year or Lookback Year who
(in accordance with Code section 414(q)):
(1) Was a more than 5% Owner at any time during
the Lookback Year or Plan Year;
(2) Received Compensation during the Lookback
Year (or in the Plan Year if among the 100
Employees with the highest Compensation for
such Year) in excess of (i) $75,000 (as
adjusted for such Year pursuant to Code
sections 414(q)(1) and 415(d)), or (ii)
$50,000 (as adjusted for such Year pursuant
to Code sections 414(q)(1) and 415(d)) in
the case of a member of the "top-paid
group" (within the meaning of Code section
414(q)(4)) for such Year), provided,
however, that if the conditions of Code
section 414(q)(12)(B)(ii) are met, the Plan
Sponsor may elect for any Plan Year to
apply clause (i) by substituting $50,000
for $75,000 and not to apply clause (ii);
(3) Was an officer of a Related Company and
received Compensation during the Lookback
Year (or in the Plan Year if among the 100
Employees with the highest Compensation for
such Year) that is greater than 50% of the
dollar limitation in effect under Code
section 415(b)(1)(A) and (d) for such Year
(or if no officer has Compensation in
excess of the threshold, the officer with
the highest Compensation), provided that
the number of officers shall be limited to
50 Employees (or, if less, the greater of
three Employees or 10% of the Employees);
or
(4) Was a Family Member at any time during the
Lookback Year or Plan Year, in which case
the Deferrals, Contributions and
Compensation of the HCE and his or her
Family Members shall be aggregated and they
shall be treated as a single HCE.
A former Employee shall be treated as a HCE if (1)
such former Employee was a HCE when he separated
from service, or (2) such former Employee was a HCE
in service at any time after attaining age 55.
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The determination of who is a HCE, including the
determinations of the number and identity of
Employees in the top-paid group, the top 100
Employees and the number of Employees treated as
officers shall be made in accordance with Code
section 414(q).
(j) "HCE Group" and "NHCE Group". With respect to each
Employer and its Related Companies, the respective
group of HCEs and NHCEs who are eligible to have
amounts contributed on their behalf for the Plan
Year, including Employees who would be eligible but
for their election not to participate or to
contribute, or because their Pay is greater than
zero but does not exceed a stated minimum.
(1) If the Related Companies maintain two or
more plans which are subject to (i) the ADP
Test and are considered as one plan for
purposes of Code sections 401(a)(4) or
410(b), or (ii) the ACP Test and are
considered as one plan for purposes of Code
section 410(b), all such plans shall be
aggregated and treated as one plan for
purposes of meeting the ADP and ACP Tests,
provided that the plans may only be
aggregated if they have the same Plan Year.
(2) If a HCE, who is one of the top 10 paid
Employees or a more than 5% Owner, has any
Family Members, the Deferrals,
Contributions and Compensation of such HCE
and his or her Family Members shall be
combined and treated as a single HCE. Such
amounts for all other Family Members shall
be removed from the NHCE Group percentage
calculation and be combined with the HCE's.
(3) If a HCE is covered by more than one cash
or deferred arrangement, or more than one
arrangement permitting employee or matching
contributions, maintained by the Related
Companies, all such plans shall be
aggregated and treated as one plan (other
than those plans that may not be
permissively aggregated) for purposes of
calculating the separate percentage for the
HCE which is used in the determination of
the Average Percentage.
(k) "Lookback Year". Pursuant to Code section 414(q),
the Plan Sponsor elects as the Lookback Year the 12
months ending immediately prior to the start of the
Plan Year.
(l) "Multiple Use Test". The test described in Section
12.4 which a Plan must meet where the Alternative
Limitation (described in Section 12.2(b)) is used to
meet both the ADP and ACP Tests.
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(m) "NHCE" or "Non-Highly Compensated Employee". An
Employee who is not a HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must
meet either the Basic or Alternative Limitation when compared
to the respective ADP and ACP for the NHCE Group, defined as
follows:
(a) Basic Limitation. The HCE Group Average Percentage
may not exceed 1.25 times the NHCE Group Average
Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE Group
Average Percentage as follows:
IF THE NHCE GROUP THEN THE MAXIMUM HCE
AVERAGE PERCENTAGE IS: GROUP AVERAGE PERCENTAGE IS:
---------------------- ----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a
maximum percentage to be used in place of the calculated
percentage for all HCEs that would reduce the ADP and/or ACP
for the HCE group by a sufficient amount to meet the ADP and
ACP Tests. ADP and/or ACP corrections shall be made in
accordance with the leveling method as described below.
(a) ADP Correction. The HCE with the highest Deferral
percentage shall have his or her Deferral percentage
reduced to the lesser of the extent required to meet
the ADP Test or to cause his or her Deferral
percentage to equal that of the HCE with the next
highest Deferral percentage. The process shall be
repeated until the ADP Test is met.
To the extent a HCE's Deferrals were determined to
be reduced as described in the paragraph above,
Before-Tax Contributions shall, by the end of the
next Plan Year, be refunded to the HCE in an amount
equal to the actual Deferrals minus the product of
the maximum percentage and the HCE's Compensation,
except that such amount to be refunded shall be
reduced by Before-Tax Contributions previously
refunded because they exceeded the Contribution
Dollar Limit. Excess amounts shall first be taken
from unmatched Before-Tax Contributions and then
from matched Before-Tax Contributions. Any Matching
Contributions attributable to refunded excess
Before-Tax Contributions
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51
as described in this Section, adjusted for investment gain or loss, shall be
forfeited and used to reduce Contributions made by an Employer as soon as
administratively feasible.
(b) ACP Correction. The HCE with the highest
Contribution percentage shall have his or her
Contribution percentage reduced to the lesser of the
extent required to meet the ACP Test or to cause his
or her Contribution percentage to equal that of the
HCE with the next highest Contribution percentage.
The process shall be repeated until the ACP Test is
met.
To the extent a HCE's Contributions were determined
to be reduced as described in the paragraph above,
Matching Contributions shall, by the end of the next
Plan Year, be refunded to the HCE in an amount equal
to the actual Contributions minus the product of the
maximum percentage and the HCE's Compensation,
except that for the Plan Year ending December 31,
1995, excess amounts shall first be taken from
"Employee Voluntary Contributions" for the period
January 1, 1995 through March 31,1995 made under the
Predecessor Plan, which amounts were not matched.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined and
with regard to excess Contributions allocated by
type of Contribution, amounts shall first be taken
from the Sweep Account and then taken by Investment
Fund in direct proportion to the market value of the
Participant's interest in each Investment Fund
(which excludes his or her Loan Account balance) as
of the Trade Date on which the correction is
processed.
(d) Family Member Correction. To the extent any
reduction is necessary with respect to a HCE and his
or her Family Members that have been combined and
treated for testing purposes as a single Employee,
the excess Deferrals and Contributions from the ADP
and/or ACP Test shall be prorated among each such
Participant in direct proportion to his or her
Deferrals or Contributions included in each Test.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is
used to meet both the ADP and ACP Tests, the ADP and ACP for
the HCE Group must also comply with the requirements of Code
section 401(m)(9). Such Code section requires that the sum of
the ADP and ACP for the HCE Group (as determined after any
corrections needed to meet the ADP and ACP Tests have been
made) not exceed the sum (which produces the most favorable
result) of:
(a) the Basic Limitation (defined in Section 12.2)
applied to either the ADP or ACP for the NHCE Group,
and
(b) the Alternative Limitation applied to the other NHCE
Group percentage.
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12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator
shall determine a maximum percentage to be used in place of
the calculated percentage for all HCEs that would reduce
either or both the ADP or ACP for the HCE Group by a
sufficient amount to meet the multiple use limit. Any excess
shall be handled in the same manner that the distribution of
excess Deferrals or Contributions are handled.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a
Participant or forfeited in accordance with Section 12.3 or
12.5 shall be adjusted for investment gain or loss. Refunds
or forfeitures shall not include investment gain or loss for
the period between the end of the applicable Plan Year and
the date of distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the
Plan meets the ADP Test, the ACP Test and the Multiple Use
Test, and that the Contribution Dollar Limit is not exceeded.
In carrying out its responsibilities, the Administrator shall
have sole discretion to limit or reduce Deferrals or
Contributions at any time. The Administrator shall maintain
records which are sufficient to demonstrate that the ADP
Test, the ACP Test and the Multiple Use Test, have been met
for each Plan Year for at least as long as the Employer's
corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs,
NHCEs, and the performance of the ADP Test, the ACP
Test and Multiple Use Test, and any corrective
action resulting therefrom, shall be made separately
with regard to the Employees of each Employer (and
its Related Companies) that is not a Related Company
with the other Employer(s).
(b) Collective Bargaining Units: The performance of the
ADP Test, and if applicable, the ACP Test and
Multiple Use Test, and any corrective action
resulting therefrom, shall be applied separately to
Employees who are eligible to participate in the
Plan as a result of a collective bargaining
agreement.
In addition, separate testing may be applied, at the
discretion of the Administrator and to the extent permitted
under Treasury regulations, to any group of Employees for
whom separate testing is permissible.
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53
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
--------------------------------------------
13.1 "Annual Addition" Defined
The sum of all amounts allocated to the Participant's Account
for a Plan Year which are contributions (except for rollovers
or transfers from another qualified plan), forfeitures and,
if the Participant is a Key Employee (pursuant to Section 14)
for the applicable or any prior Plan Year, medical benefits
provided pursuant to Code section 419A(d)(1). For purposes of
this Section 13.1, "Account" also includes a Participant's
account in all other defined contribution plans currently or
previously maintained by any Related Company. The Plan Year
refers to the year to which the allocation pertains,
regardless of when it was allocated. The Plan Year shall be
the Code section 415 limitation year.
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this
Plan and any other defined contribution plan maintained by
any Related Company for any Plan Year shall not exceed the
lesser of (1) 25% of his or her Taxable Income or (2) $30,000
(as adjusted for the cost of living pursuant to Code section
415(d)).
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual
Addition for such year, Contributions to be made for the
remainder of the Plan Year shall be limited to the amount
needed for each affected Participant to receive the maximum
Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a
Participant's Account (resulting from forfeitures,
allocations, reasonable error in determining Participant
compensation or the amount of elective contributions, or
other facts and circumstances acceptable to the Internal
Revenue Service) the excess amount (adjusted to reflect
investment gains) shall first be returned to the Participant
to the extent of his or her Before-Tax Contributions for the
Plan Year (or for the Plan Year ending December 31, 1995
"Employee Voluntary Contributions" for the period January 1,
1995 through March 31, 1995 made under the Predecessor Plan),
(however to the extent such Contributions were matched, the
applicable Matching Contributions shall be forfeited in
proportion to the returned matched Contributions) and the
remaining excess, if any, shall be forfeited by the
Participant and together with forfeited Matching
Contributions used to reduce Contributions made by an
Employer as soon as administratively feasible.
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47
54
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess
Annual Addition, received allocations to more than one
defined contribution plan, the excess shall be corrected by
reducing the Annual Addition to this Plan only after all
possible reductions have been made to the other defined
contribution plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the greater
of 125% of the "protected current accrued benefit" or the
normal limit which is the lesser of (1) 125% of the maximum
dollar limitation provided under Code section 415(b)(1)(A)
for the Plan Year or (2) 140% of the amount which may be
taken into account under Code section 415(b)(1)(B) for the
Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit
provided by the Plan determined pursuant to Code
section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined
benefit plan in existence (1) on July 1, 1982, shall
be the accrued annual benefit provided for under
Public Law 97-248, section 235(g)(4), as amended, or
(2) on May 6, 1986, shall be the accrued annual
benefit provided for under Public Law 99-514,
section 1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the
Participant's Annual Addition for each Plan Year to date and
the denominator is the sum of the "annual amounts" for each
year in which the Participant has performed service with a
Related Company. The "annual amount" for any Plan Year is the
lesser of (1) 125% of the Code section 415(c)(1)(A) dollar
limitation (determined without regard to subsection (c)(6))
in effect for the Plan Year and (2) 140% of the Code section
415(c)(1)(B) amount in effect for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the
Code section 415(c) rules in effect for such Plan
Year, and
(b) the numerator is adjusted pursuant to Public Law
97-248, section 235(g)(3), as amended, or Public Law
99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
If a Participant has also participated in a defined benefit
plan maintained by a Related Company, the sum of the Defined
Benefit Fraction and the Defined Contribution Fraction for
any Plan Year may not exceed 1.0. If the combined fraction
exceeds 1.0 for any Plan Year, the Participant's benefit
under any defined benefit plan (to the extent it has not been
distributed or used to purchase an annuity contract) shall be
limited so that the combined fraction does not exceed 1.0
before any defined contribution limits shall be enforced.
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55
14 TOP HEAVY RULES
---------------
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each
qualified plan of an Employer (and its Related
Companies) (1) in which a Key Employee is a
participant or was a participant during the
determination period (regardless of whether such
plan has terminated), or (2) which enables another
plan in the group to meet the requirements of Code
sections 401(a)(4) or 410(b). The Employer may also
treat any other qualified plan as part of the group
if the group would continue to meet the requirements
of Code sections 401(a)(4) and 410(b) with such plan
being taken into account.
(b) "Determination Date". The last Trade Date of the
preceding Plan Year or, in the case of the Plan's
first year, the last Trade Date of the first Plan
Year.
(c) "Key Employee". A current or former Employee (or his
or her Beneficiary) who at any time during the five
year period ending on the Determination Date was:
(1) an officer of a Related Company whose
Compensation (i) exceeds 50% of the amount
in effect under Code section 415(b)(1)(A)
and (ii) places him within the following
highest paid group of officers:
NUMBER OF EMPLOYEES NUMBER OF
NOT EXCLUDED UNDER CODE HIGHEST PAID
SECTION 414(q)(8) OFFICERS INCLUDED
----------------- -----------------
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation
exceeds $150,000, or
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56
(4) a more than 0.5% Owner who is among the 10
Employees owning the largest interest in a
Related Company and whose Compensation
exceeds the amount in effect under Code
section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date
of (1) an Employee's Account, (2) the present value
of his or her other accrued benefits provided by all
qualified plans within the Aggregation Group, and
(3) the aggregate distributions made within the five
year period ending on such date. Plan Benefits shall
exclude Rollover Contributions and plan to plan
transfers made after December 31, 1983 which are
both employee initiated and from a plan maintained
by a non-related employer.
(e) "Top Heavy". The Plan's status when the Plan
Benefits of Key Employees account for more than 60%
of the Plan Benefits of all Employees who have
performed services at any time during the five year
period ending on the Determination Date. The Plan
Benefits of Employees who were, but are no longer,
Key Employees (because they have not been an officer
or Owner during the five year period), are excluded
in the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year
in which the Plan is Top Heavy, the Employer shall
not allow any contributions (other than a Rollover
Contribution from a plan maintained by a non-
related employer) to be made by or on behalf of any
Key Employee unless the Employer makes a
contribution (other than contributions made by an
Employer in accordance with a Participant's salary
deferral election or contributions made by an
Employer based upon the amount contributed by a
Participant) on behalf of all Participants who were
Eligible Employees as of the last day of the Plan
Year in an amount equal to at least 3% of each such
Participant's Taxable Income. The Administrator
shall remove any such contributions (including
applicable investment gain or loss) credited to a
Key Employee's Account in violation of the foregoing
rule and return them to the Employer or Employee to
the extent permitted by the Limited Return of
Contributions paragraph of Section 18.
(b) Overriding Minimum Benefit. Notwithstanding,
contributions shall be permitted on behalf of Key
Employees if the Employer also maintains a defined
benefit plan which automatically provides a benefit
which satisfies the Code section 416(c)(1) minimum
benefit requirements, including the adjustment
provided in Code section 416(h)(2)(A), if
applicable. If this Plan is part of an aggregation
group in which a Key Employee is receiving a benefit
and no minimum is provided in any other
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50
57
plan, a minimum contribution of at least 3% of
Taxable Income shall be provided to the Participants
specified in the preceding paragraph. In addition,
the Employer may offset a defined benefit minimum by
contributions (other than contributions made by an
Employer in accordance with a Participant's salary
deferral election or contributions made by an
Employer based upon the amount contributed by a
Participant) made to this Plan.
14.3 Special Vesting
If the Plan becomes Top Heavy after the Effective Date, all
Employees shall thereafter be vested in all Accounts.
14.4 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall
be substituted for 125% in determining the Defined Benefit
Fraction and the Defined Contribution Fraction.
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51
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15 PLAN ADMINISTRATION
-------------------
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Plan Sponsor, the Administrator,
the Committee and/or the Trustee, as applicable, whose
specific duties are delineated in this Plan and Trust. In
addition, Plan fiduciaries also include any other person to
whom fiduciary duties or responsibility is delegated with
respect to the Plan. Any person or group may serve in more
than one fiduciary capacity with respect to the Plan. To the
extent permitted under ERISA section 405, no fiduciary shall
be liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with this
Plan and Trust to the extent they are consistent
with ERISA;
(b) use that degree of care, skill, prudence and
diligence that a prudent person acting in a like
capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and
with like aims;
(c) act with the exclusive purpose of providing benefits
to Participants and their Beneficiaries, and
defraying reasonable expenses of administering the
Plan;
(d) diversify Plan investments, to the extent such
fiduciary is responsible for directing the
investment of Plan assets, so as to minimize the
risk of large losses, unless under the circumstances
it is clearly prudent not to do so; and
(e) treat similarly situated Participants and
Beneficiaries in a uniform and nondiscriminatory
manner.
15.3 Plan Sponsor is ERISA Plan Administrator
The Plan Sponsor is the plan administrator, within the
meaning of ERISA section 3(16) and Code section 414(g), which
is responsible for compliance with all reporting and
disclosure requirements, except those that are explicitly the
responsibility of the Trustee under applicable law. The
Administrator and/or Committee shall have any necessary
authority to carry out such functions through the actions of
the Administrator, duly appointed officers of the Plan
Sponsor, and/or the Committee.
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52
59
15.4 Administrator Duties
The Administrator shall have the sole and absolute discretion
to interpret the provisions of the Plan and Trust, other than
the provisions which relate to the Trustee, (including,
without limitation, by supplying omissions from, correcting
deficiencies in, or resolving inconsistencies or ambiguities
in, the language of 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
determination or findings with respect to the benefits
payable thereunder and the person entitled thereto as may be
required for the purpose of the Plan. In furtherance thereof,
but without limiting the foregoing, the Administrator 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 Administrator):
(a) determine who is eligible to participate, if a
contribution qualifies as a rollover contribution,
the allocation of Contributions, and the eligibility
for loans, in-service withdrawals and distributions;
(b) determine the fact of a Participant's death and of
any Beneficiary's right to receive the deceased
Participant's interest based upon such proof and
evidence as it deems necessary;
(c) establish and review at least annually a funding
policy bearing in mind both the short-run and
long-run needs and goals of the Plan. To the extent
Participants may direct their own investments, the
funding policy shall focus on which Investment Funds
are available for Participants to use; and
(d) adjudicate claims pursuant to the claims procedure
described in Section 18.
Actions taken in good faith by the Administrator shall be
conclusive and binding on all interested parties, and shall
be given the maximum possible deference allowed by law.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors
(including attorneys, accountants, actuaries, consultants,
record keepers, investment counsel and administrative
assistants) as it considers necessary to assist it in the
performance of its duties. The Administrator shall also
comply with the bonding requirements of ERISA section 412.
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53
60
15.6 Delegation of Administrator Duties
The Plan Sponsor, as Administrator of the Plan, has appointed
a Committee to administer the Plan on its behalf. The Plan
Sponsor shall provide the Trustee with the names and specimen
signatures of any persons authorized to serve as Committee
members and act as or on its behalf. Any Committee member
appointed by the Plan Sponsor shall serve at the pleasure of
the Plan Sponsor, but may resign by written notice to the
Plan Sponsor. Committee members shall serve without
compensation from the Plan for such services. Except to the
extent that the Plan Sponsor otherwise provides, any
delegation of duties to a Committee shall carry with it the
full discretionary authority of the Administrator to complete
such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Plan
Sponsor to the Committee may be done by a majority
of its members. The majority may be expressed by a
vote at a meeting or in writing without a meeting,
and a majority action shall be equivalent to an
action of all Committee members.
(b) Meetings. The Committee shall hold meetings upon
such notice, place and times as it determines
necessary to conduct its functions properly.
(c) Reliance by Trustee. The Committee may authorize one
or more of its members to execute documents on its
behalf and may authorize one or more of its members
or other individuals who are not members to give
written direction to the Trustee in the performance
of its duties. The Committee shall provide such
authorization in writing to the Trustee with the
name and specimen signatures of any person
authorized to act on its behalf. The Trustee shall
accept such direction and rely upon it until
notified in writing that the Committee has revoked
the authorization to give such direction. The
Trustee shall not be deemed to be on notice of any
change in the membership of the Committee, parties
authorized to direct the Trustee in the performance
of its duties, or the duties delegated to and by the
Committee until notified in writing.
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61
16 MANAGEMENT OF INVESTMENTS
-------------------------
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of this Plan and Trust which
relate to the Trustee, for use in providing Plan benefits and
paying Plan fees and expenses not paid directly by the
Employer. Plan benefits shall be drawn solely from the Trust
and paid by the Trustee as directed by the Administrator.
Notwithstanding, the Administrator may appoint, with the
approval of the Trustee, another trustee to hold and
administer Plan assets which do not meet the requirements of
Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the
Trustee to invest Trust assets in one or more Investment
Funds. The number and composition of Investment Funds may be
changed from time to time, without the necessity of amending
this Plan and Trust. The Trustee may establish reasonable
limits on the number of Investment Funds as well as the
acceptable assets for any such Investment Fund. Each of the
Investment Funds may be comprised of any of the following:
(a) shares of a registered investment company, whether
or not the Trustee or any of its affiliates is an
advisor to, or other service provider to, such
company, provided an investment in such is exempt
from the prohibited transaction restrictions of the
Code and ERISA;
(b) collective investment funds maintained by the
Trustee, or any other fiduciary to the Plan, which
are available for investment by trusts which are
qualified under Code sections 401(a) and 501(a);
(c) individual equity and fixed income securities which
are readily tradeable on the open market;
(d) guaranteed investment contracts issued by a bank or
insurance company;
(e) interest bearing deposits of the Trustee;
(f) Roadway Stock; and
(g) REX Stock, subject to the limitations as set forth
in Section 16 and Appendix A.
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Any Investment Fund assets invested in a collective
investment fund, shall be subject to all the provisions of
the instruments establishing and governing such fund. These
instruments, including any subsequent amendments, are hereby
adopted by the Plan and are incorporated herein by reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient
deposit or money market type assets in each Investment Fund
to handle the Fund's liquidity and disbursement needs. Each
Participant's and Beneficiary's Sweep Account, which is used
to hold assets pending investment or disbursement, shall
consist of interest bearing deposits of the Trustee.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in
the Investment Funds as soon as practicable after such
instructions are received from the Administrator,
Participants, or Beneficiaries. Such instructions shall
remain in effect until changed by the Administrator,
Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company
Shares
The Administrator shall be entitled, but not required, to
vote proxies or exercise any shareholder rights relating to
shares held on behalf of the Plan in a registered investment
company. Notwithstanding, the authority to vote proxies and
exercise shareholder rights related to such shares held in a
Custom Fund is vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the
Trustee, an investment manager for any Investment Fund
established by the Trustee solely for Participants of this
Plan (a "Custom Fund"). The investment manager may be the
Administrator, Trustee or an investment manager pursuant to
ERISA section 3(38). The Administrator shall advise the
Trustee in writing of the appointment of an investment
manager and shall cause the investment manager to acknowledge
to the Trustee in writing that the investment manager is a
fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the
Trustee, shall be established for a Custom Fund. If
a Custom Fund consists solely of collective
investment funds or shares of a registered
investment company (and sufficient deposit or money
market type assets to handle the Fund's liquidity
and disbursement needs), its underlying instruments
shall constitute the guidelines.
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(b) Authority of Investment Manager. The investment
manager of a Custom Fund shall have the authority to
vote or execute proxies, exercise shareholder
rights, manage, acquire, and dispose of Trust
assets. Notwithstanding, the authority to vote
proxies and exercise shareholder rights related to
shares of Roadway Stock and REX Stock held in a
Custom Fund is vested as provided otherwise in
Section 16.
(c) Custody and Trade Settlement. Unless otherwise
agreed to by the Trustee, the Trustee shall maintain
custody of all Custom Fund assets and be responsible
for the settlement of all Custom Fund trades. For
purposes of this section, shares of a collective
investment fund, shares of a registered investment
company and guaranteed investment contracts issued
by a bank or insurance company, shall be regarded as
the Custom Fund assets instead of the underlying
assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated to
invest or otherwise manage any Custom Fund assets
for which the Trustee or Administrator is not the
investment manager nor shall the Administrator or
Trustee be liable for acts or omissions with regard
to the investment of such assets except to the
extent required by ERISA.
16.7 Authority to Segregate Assets
The Plan Sponsor may direct the Trustee to split an
Investment Fund into two or more funds in the event any
assets in the Fund are illiquid or the value is not readily
determinable. In the event of such segregation, the Plan
Sponsor shall give instructions to the Trustee on what value
to use for the split-off assets, and the Trustee shall not be
responsible for confirming such value.
16.8 Maximum Permitted Investment in Roadway Stock
If the Plan Sponsor provides for a Roadway Stock Fund the
Fund shall be comprised of Roadway Stock and sufficient
deposit or money market type assets to handle the Fund's
liquidity and disbursement needs. The Fund may be as large as
necessary to comply with Participants' and Beneficiaries'
investment elections as well as the total investment of
Participants' and Beneficiaries' RSI Stock Match Accounts. To
the extent described in Appendix A, the Rex Stock Fund may
also be comprised of Roadway Stock.
16.9 Participants Have Right to Vote and Tender Roadway Stock
Each Participant or Beneficiary shall be entitled to instruct
the Trustee as to the voting or tendering of any full or
partial shares of Roadway Stock held on his or her behalf in
the Roadway Stock Fund and the Rex Stock Fund. Prior to such
voting or tendering of Roadway Stock, each Participant or
Beneficiary shall
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receive a copy of the proxy solicitation or other
material relating to such vote or tender decision and a form
for the Participant or Beneficiary to complete which
confidentially instructs the Trustee to vote or tender such
shares in the manner indicated by the Participant or
Beneficiary. Upon receipt of such instructions, the Trustee
shall act with respect to such shares as instructed. The
Administrator shall instruct the Trustee with respect to how
to vote or tender any shares for which instructions are not
received from Participants or Beneficiaries.
16.10 Participants Have Right to Vote and Tender REX Stock
Each Participant or Beneficiary shall be entitled to instruct
the Trustee as to the voting or tendering of any full or
partial shares of REX Stock held on his or her behalf in the
REX Stock Fund. Prior to such voting or tendering of REX
Stock, each Participant or Beneficiary shall receive a copy
of the proxy solicitation or other material relating to such
vote or tender decision and a form for the Participant or
Beneficiary to complete which confidentially instructs the
Trustee to vote or tender such shares in the manner indicated
by the Participant or Beneficiary. Upon receipt of such
instructions, the Trustee shall act with respect to such
shares as instructed. The Administrator shall instruct the
Trustee with respect to how to vote or tender any shares for
which instructions are not received from Participants or
Beneficiaries.
16.11 Registration and Disclosure for Roadway Stock
The Administrator shall be responsible for determining the
applicability of (and, if applicable, complying with) the
requirements of the Securities Act of 1933, as amended, the
California Corporate Securities Law of 1968, as amended, and
any other applicable blue sky law. The Administrator shall
also specify what restrictive legend or transfer restriction,
if any, is required to be set forth on the certificates for
the securities and the procedure to be followed by the
Trustee to effectuate a resale of such securities.
16.12 Registration and Disclosure for REX Stock
The Administrator shall be responsible for determining the
applicability of (and, if applicable, complying with) the
requirements of the Securities Act of 1933, as amended, the
California Corporate Securities Law of 1968, as amended, and
any other applicable blue sky law. The Administrator shall
also specify what restrictive legend or transfer restriction,
if any, is required to be set forth on the certificates for
the securities and the procedure to be followed by the
Trustee to effectuate a resale of such securities.
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17 TRUST ADMINISTRATION
--------------------
17.1 Trustee to Construe Trust
Subject to the authority of the Administrator, the Trustee
shall have the discretionary authority to construe those
provisions of this Plan and Trust which relate to the Trustee
and to do all things necessary or convenient to the
administration of the Trust, whether or not such powers are
specifically set forth in this Plan and Trust. Actions taken
in good faith by the Trustee shall be conclusive and binding
on all interested parties, and shall be given the maximum
possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth
in this Plan and Trust, the Trustee shall have all the power,
authority, rights and privileges of an absolute owner of the
Trust assets and, not in limitation but in amplification of
the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell,
tender, exchange, dispose of, encumber, hypothecate,
pledge, mortgage, lease, grant options respecting,
repair, alter, insure, or distribute any and all
property in the Trust;
(b) borrow money, participate in reorganizations, pay
calls and assessments, vote or execute proxies,
exercise subscription or conversion privileges,
exercise options and register any securities in the
Trust in the name of the nominee, in federal book
entry form or in any other form as shall permit
title thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate,
adjust, settle, enforce or foreclose, by judicial
proceedings or otherwise, or defend against the
same, any obligations or claims in favor of or
against the Trust; and
(d) lend on behalf of the Trust, directly or, through a
collective investment fund, any securities,
including securities held in such collective
investment fund to brokers, dealers or other
borrowers and to permit such securities to be
transferred into the name and custody and be voted
by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of
any Trust assets outside the jurisdiction of the United
States, except as authorized by ERISA section 404(b).
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17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and
withhold federal and, if applicable, state income
taxes with regard to any Eligible Rollover
Distribution that is not paid as a Direct Rollover
in accordance with the Participant's withholding
election or as required by law if no election is
made or the election is less than the amount
required by law. With regard to any taxable
distribution that is not an Eligible Rollover
Distribution, the Trustee shall calculate and
withhold federal and, if applicable, state income
taxes in accordance with the Participant's
withholding election or as required by law if no
election is made.
(b) Taxes Due From Investment Funds. The Trustee shall
pay from the Investment Fund any taxes or
assessments imposed by any taxing or governmental
authority on such Fund or its income, including
related interest and penalties.
17.5 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable
period) following the close of the Plan Year, the
Trustee shall provide the Administrator with an
annual accounting of Trust assets and information to
assist the Administrator in meeting ERISA's annual
reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records
and provide sufficient reporting to allow the
Administrator to properly monitor the Trust's assets
and activity.
(c) Administrator Approval. Approval of any Trustee
accounting shall automatically occur 90 days after
such accounting has been received by the
Administrator, unless the Administrator files a
written objection with the Trustee within such time
period. Such approval shall be final as to all
matters and transactions stated or shown therein and
binding upon the Administrator.
17.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is
not readily tradeable and listed on a national securities
exchange registered under the Securities Exchange Act of
1934, as amended, the Trustee may engage a qualified
independent appraiser to determine the fair market value of
such property, and the appraisal fees shall be paid from the
Investment Fund containing the asset.
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17.7 Legal Counsel
The Trustee may consult with legal counsel of its choice,
including counsel for the Employer or counsel of the Trustee,
upon any question or matter arising under this Plan and
Trust. When relied upon by the Trustee, the opinion of such
counsel shall be evidence that the Trustee has acted in good
faith.
17.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such
as may be mutually agreed upon by the Plan Sponsor and the
Trustee. Trustee fees and all reasonable expenses of counsel
and advisors retained by the Trustee shall be paid in
accordance with Section 6.
17.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the
Trustee, shall be confined to construing, as provided herein,
the terms of the Plan and Trust as they relate to the
Trustee, receiving funds on behalf of and making payments
from the Trust, safeguarding and valuing Trust assets,
investing and reinvesting Trust assets in the Investment
Funds as directed by the Administrator, Participants or
Beneficiaries and those duties as described in this Section
17.
The Trustee shall have no duty or authority to ascertain
whether Contributions are in compliance with the Plan, to
enforce collection or to compute or verify the accuracy or
adequacy of any amount to be paid to it by the Employer. The
Trustee shall not be liable for the proper application of any
part of the Trust with respect to any disbursement made at
the direction of the Administrator.
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18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any
Employee. The Employer expressly reserves the right to
discharge an Employee at any time, with or without cause,
without regard to the effect such discharge would have upon
the Employee's interest in the Plan.
18.2 Limited Return of Contributions
Except as provided in this paragraph, (1) Plan assets shall
not revert to the Employer nor be diverted for any purpose
other than the exclusive benefit of Participants or their
Beneficiaries; and (2) a Participant's vested interest shall
not be subject to divestment. As provided in ERISA section
403(c)(2), the actual amount of a Contribution made by the
Employer (or the current value of the Contribution if a net
loss has occurred) may revert to the Employer if:
(a) such Contribution is made by reason of a mistake of
fact;
(b) initial qualification of the Plan under Code section
401(a) is not received and a request for such
qualification is made within the time prescribed
under Code section 401(b) (the existence of and
Contributions under the Plan are hereby conditioned
upon such qualification); or
(c) such Contribution is not deductible under Code
section 404 (such Contributions are hereby
conditioned upon such deductibility) in the taxable
year of the Employer for which the Contribution is
made.
The reversion to the Employer must be made (if at all) within
one year of the mistaken payment of the Contribution, the
date of denial of qualification, or the date of disallowance
of deduction, as the case may be. A Participant shall have no
rights under the Plan with respect to any such reversion.
18.3 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan
may be anticipated, assigned or alienated, except:
(a) to create, assign or recognize a right to any
benefit with respect to a Participant pursuant to a
QDRO, or
(b) to use a Participant's vested Account balance as
security for a loan from the Plan which is permitted
pursuant to Code section 4975.
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18.4 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the
Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any
payment due him or her, the Administrator shall have the
payment of the benefit, or any part thereof, made to the
person (or persons or institution) whom it reasonably
believes is caring for or supporting the payee, unless it has
received due notice of claim therefor from a duly appointed
guardian or conservator of the payee. Any payment shall to
the extent thereof, be a complete discharge of any liability
under the Plan to the payee.
18.5 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to
payment of a Plan benefit after a reasonable search, the
Administrator may at any time thereafter treat such person's
Account as forfeited and use such amount as described in
Section 8.4 or to reduce Contributions made by an Employer as
soon as administratively feasible. If such person
subsequently presents the Administrator with a valid claim
for the benefit, such person shall be paid the amount treated
as forfeited, plus the interest that would have been earned
in the Sweep Account to the date of determination. The
Administrator shall pay the amount through an additional
amount contributed by the Employer or direct the Trustee to
pay the amount from the Forfeiture Account.
18.6 Claims Procedure
(a) Right to Make Claim. An interested party who
disagrees with the Administrator's determination of
his or her right to Plan benefits must submit a
written claim and exhaust this claim procedure
before legal recourse of any type is sought. The
claim must include the important issues the
interested party believes support the claim. The
Administrator, pursuant to the authority provided in
this Plan, shall either approve or deny the claim.
(b) Process for Denying a Claim. The Administrator's
partial or complete denial of an initial claim must
include an understandable, written response covering
(1) the specific reasons why the claim is being
denied (with reference to the pertinent Plan
provisions) and (2) the steps necessary to perfect
the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested
party may make a written appeal of the
Administrator's initial decision, and the
Administrator shall respond in the same manner and
form as prescribed for denying a claim initially.
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(d) Time Frame. The initial claim, its review, appeal
and final review shall be made in a timely fashion,
subject to the following time table:
Days to Respond
Action From Last Action
------ ----------------
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the
maximum response time for its initial and final
review if it provides an explanation within the
normal period of why an extension is needed and when
its decision shall be forthcoming.
18.7 Construction
Headings are included for reading convenience. The text shall
control if any ambiguity or inconsistency exists between the
headings and the text. The singular and plural shall be
interchanged wherever appropriate. References to Participant
shall include Beneficiary when appropriate and even if not
otherwise already expressly stated.
18.8 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and
administered under ERISA and other applicable federal laws
and, where not otherwise preempted, by the laws of the State
of California. If any provision of this Plan and Trust shall
become invalid or unenforceable, that fact shall not affect
the validity or enforceability of any other provision of this
Plan and Trust. All provisions of this Plan and Trust shall
be so construed as to render them valid and enforceable in
accordance with their intent.
18.9 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or
inaction, (including a Plan termination in which the Plan
Sponsor fails to apply for a favorable determination from the
Internal Revenue Service with respect to the qualification of
the Plan upon its termination), in relation to the Plan or
Trust (1) including (without limitation) expenses reasonably
incurred in the defense of any claim relating to the Plan or
its assets, and amounts paid in any settlement relating to
the Plan or its assets, but (2) excluding liability resulting
from actions or inactions made in bad faith, or resulting
from the negligence or willful misconduct of the Trustee. The
Plan Sponsor shall have the right, but not the obligation, to
conduct the defense of any action to which this Section
applies. The Plan fiduciaries are not entitled to indemnity
from the Plan assets relating to any such action.
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19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
-----------------------------------------------
19.1 Amendment
The Plan Sponsor reserves the right to amend this Plan and
Trust at any time, to any extent and in any manner it may
deem necessary or appropriate. The Plan Sponsor (and not the
Trustee) shall be responsible for adopting any amendments
necessary to maintain the qualified status of this Plan and
Trust under Code sections 401(a) and 501(a). If the Committee
is acting as the Administrator in accordance with Section
15.6, it shall have the authority to adopt Plan and Trust
amendments which have no substantial adverse financial impact
upon any Employer or the Plan. All interested parties shall
be bound by any amendment, provided that no amendment shall:
(a) become effective unless it has been adopted in
accordance with the procedures set forth in Section
19.5;
(b) except to the extent permissible under ERISA and the
Code, make it possible for any portion of the Trust
assets to revert to an Employer or to be used for,
or diverted to, any purpose other than for the
exclusive benefit of Participants and Beneficiaries
entitled to Plan benefits and to defray reasonable
expenses of administering the Plan;
(c) decrease the rights of any Employee to benefits
accrued (including the elimination of optional forms
of benefits) to the date on which the amendment is
adopted, or if later, the date upon which the
amendment becomes effective, except to the extent
permitted under ERISA and the Code; nor
(d) permit an Employee to be paid the balance of his or
her Before-Tax or Prior Before-Tax Accounts unless
the payment would otherwise be permitted under Code
section 401(k).
19.2 Merger
This Plan and Trust may not be merged or consolidated with,
nor may its assets or liabilities be transferred to, another
plan unless each Participant and Beneficiary would, if the
resulting plan were then terminated, receive a benefit just
after the merger, consolidation or transfer which is at least
equal to the benefit which would be received if either plan
had terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation
of: (1) substantially all of the Employer's assets used in a
trade or business to an unrelated corporation, or (2) a sale
of such Employer's interest in a subsidiary
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to an unrelated entity or individual, lump sum distributions
shall be permitted from the Plan, except as provided below,
to Participants with respect to Employees who continue
employment with the corporation acquiring such assets or who
continue employment with such subsidiary, as applicable.
Notwithstanding, distributions shall not be permitted if the
purchaser agrees, in connection with the sale, to be
substituted as the Plan Sponsor or to accept a transfer of
the assets and liabilities representing the Participants'
benefits into a plan of the purchaser or a plan to be
established by the purchaser.
19.4 Plan Termination
The Plan Sponsor may, at any time and for any reason,
terminate the Plan in accordance with the procedures set
forth in Section 19.5, or completely discontinue
contributions. Upon either of these events, or in the event
of a partial termination of the Plan within the meaning of
Code section 411(d)(3), the Accounts of each affected
Employee who has not yet incurred a Break in Service shall be
fully vested. If no successor plan is established or
maintained, lump sum distributions shall be made in
accordance with the terms of the Plan as in effect at the
time of the Plan's termination or as thereafter amended
provided that a post-termination amendment shall not be
effective to the extent that it violates Section 19.1 unless
it is required in order to maintain the qualified status of
the Plan upon its termination. The Trustee's and Employer's
authority shall continue beyond the Plan's termination date
until all Trust assets have been liquidated and distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the
adoption of any amendment or termination (a "Change") of this
Plan and Trust:
(a) The Plan Sponsor may adopt any Change by action of
its board of directors in accordance with its normal
procedures.
(b) The Committee, if acting as Administrator in
accordance with Section 15.6, may adopt any
amendment within the scope of its authority provided
under Section 19.1 and in the manner specified in
Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and (2)
signed and dated by an executive officer of the Plan
Sponsor or, in the case of an amendment adopted by
the Committee, at least one of its members.
(d) If the effective date of any Change is not specified
in the document setting forth the Change, it shall
be effective as of the date it is signed by the last
person whose signature is required under clause (2)
above, except to the extent that another effective
date is necessary to maintain the qualified status
of this Plan and Trust under Code sections 401(a)
and 501(a).
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(e) A copy of any Change shall be provided to the
Trustee.
(f) No Change affecting the Trustee in its role as
Trustee under the Plan or in any other capacity
shall become effective until it is accepted and
signed by the Trustee (which acceptance shall not
unreasonably be withheld).
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate
its Plan participation by action of its board of directors in
accordance with its normal procedures. Written notice of such
action shall be signed and dated by an executive officer of
the Employer and delivered to the Plan Sponsor. If the
effective date of such action is not specified, it shall be
effective on, or as soon as reasonably practicable after, the
date of delivery. Upon the Employer's request, the Plan
Sponsor may instruct the Trustee and Administrator to spin
off all affected Accounts and underlying assets into a
separate qualified plan under which the Employer shall assume
the powers and duties of the Plan Sponsor. Alternatively, the
Plan Sponsor may treat the event as a partial termination
described above or continue to maintain the Accounts under
the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and Trust
or may be removed by the Plan Sponsor at any time upon at
least 90 days written notice (or less if agreed to by both
parties). In such event, the Plan Sponsor shall appoint a
successor trustee by the end of the notice period. The
successor trustee shall then succeed to all the powers and
duties of the Trustee under this Plan and Trust. If no
successor trustee has been named by the end of the notice
period, the Plan Sponsor's chief executive officer shall
become the trustee, or if he or she declines, the Trustee may
petition the court for the appointment of a successor
trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively
feasible after its resignation or removal as
Trustee, the Trustee shall transfer to the successor
trustee all property currently held by the Trust.
However, the Trustee is authorized to reserve such
sum of money as it may deem advisable for payment of
its accounts and expenses in connection with the
settlement of its accounts or other fees or expenses
payable by the Trust. Any balance remaining after
payment of such fees and expenses shall be paid to
the successor trustee.
(b) Final Accounting. The Trustee shall provide a final
accounting to the Administrator within 90 days of
the date Trust assets are transferred to the
successor trustee.
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(c) Administrator Approval. Approval of the final
accounting shall automatically occur 90 days after
such accounting has been received by the
Administrator, unless the Administrator files a
written objection with the Trustee within such time
period. Such approval shall be final as to all
matters and transactions stated or shown therein and
binding upon the Administrator.
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APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan as of the Effective Date
include this set of daily valued funds:
CATEGORY FUNDS
-------- -----
INCOME Income Accumulation
------
BALANCED Asset Allocation
--------
EQUITY Roadway Stock
------ S&P 500 Stock
AIM, Constellation
Templeton, Foreign
COMBINATION LifePath
-----------
The Plan's Investment Funds also include a Restricted GIC Fund and a
Rex Stock Fund.
In accordance with Section 16.7, the Restricted GIC Fund was
established in July 1991 for the purpose of segregating the Mutual
Benefit GIC which was immediately prior to the date of segregation held
in the Plan's Investment Fund then named the Viking Income Accumulation
Fund for the benefit of Participants and Beneficiaries who at that time
had an investment in the Viking Income Accumulation Fund. The
Restricted GIC Fund is not otherwise designated as available for
investment by Participants or Beneficiaries. A Participant or
Beneficiary's investment in the Restricted GIC Fund shall be restricted
from transfers, loans, in-service withdrawals and distributions until
such time or times as amounts are liquid and are made available for
such purposes in accordance with procedures prescribed by the
Administrator and agreed to by the Trustee.
As a result of the January 12, 1996 spin-off from Roadway of Roadway
Express, Inc., a REX Stock Fund was established under the Plan for the
benefit of Participants and Beneficiaries for whom shares of REX Stock
were received as a result of the Participant's or Beneficiary's
holdings in the Roadway Stock Fund. A Participant or Beneficiary's then
resulting investment in the REX Stock Fund may continue to be invested
in such Fund until such time as the Participant or Beneficiary
otherwise elects to invest such portion of his or her Account or the
Administrator directs liquidation of such Fund or consolidation of such
Fund into the Roadway Stock Fund if at such later time the Fund no
longer holds shares of Rex Stock.
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APPENDIX A - INVESTMENT FUNDS
(continued)
No additional shares of Rex Stock may be purchased. To the extent not
otherwise necessary to be maintained in deposit or money market type
assets to handle the Fund's liquidity, earnings in the Rex Stock Fund
shall be used to purchase shares of Roadway Stock to be held in the Rex
Stock Fund. The REX Stock Fund shall be comprised of REX Stock,
sufficient deposit or money market type assets to handle the Fund's
liquidity and disbursement needs and to the extent described in the
preceding sentence, Roadway Stock. The REX Stock Fund is not otherwise
designated as available for investment by Participants or
Beneficiaries. To the extent necessary from time to time to provide for
sufficient deposit or money market type assets to handle the Fund's
liquidity and disbursement needs, shares of Rex Stock shall be
liquidated to the extent necessary and then, as necessary, shares of
Roadway Stock.
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the Income
Accumulation Fund.
III. Accounts For Which Investment is Restricted
A Participant or Beneficiary may direct the investment of his or her
entire Account except for the following Contribution Accounts, which
shall be invested as of the Effective Date as follows:
RSI Stock Match Account Roadway Stock Fund
IV. Maximum Percentage Restrictions Applicable to Certain Investment Funds
As of the Effective Date, a Participant or Beneficiary may not elect to
invest more than the following percentages in these Investment Funds:
Roadway Stock Fund 50%
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APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
1) Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants.
2) Recordkeeping Fees: These are paid by the Employer on a quarterly
basis.
3) Loan Fees: A $3.50 per month fee is assessed and billed/collected
quarterly from the Account of each Participant who has an outstanding
loan balance for loans entered into on or after April 1,1991. For loans
entered into prior to April 1,1991, these are paid by the Employer on a
quarterly basis.
4) Investment Fund Election Changes: For each Investment Fund election
change by a Participant, in excess of 4 changes per year, a $10 fee
shall be assessed and billed/collected quarterly from the Participant's
Account.
5) Periodic Installment Payment Fees: A $3.00 per check fee shall be
assessed and billed/collected quarterly from the Participant's Account.
6) Additional Fees Paid by Employer: All other Plan related fees and
expenses shall be paid by the Employer. To the extent that the
Administrator later elects that any such fees shall be borne by
Participants, estimates of the fees shall be determined and reconciled,
at least annually, and the fees shall be assessed monthly and
billed/collected from Accounts quarterly.
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APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant loans shall
be equal to the Trustee's prime rate, plus 2%. Effective January 1, 1996, the
interest rate charged on Participant loans shall be equal to the prime rate
published in the Wall Street Journal at the time the loan is processed, plus 2%.
If multiple prime rates are published in the Wall Street Journal, the prime rate
selected shall be the rate closest to the last prime rate used for this purpose.
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