FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(K) SAVINGS PLAN
ARTICLE ONE
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PURPOSE
SECTION 1.1. INTRODUCTION. Frozen Food Express Industries, Inc., a Texas
corporation, (hereinafter referred to as "Employer") previously established the
Savings Plan for Employees of Frozen Food Express (the "Prior Plan") as a 401(k)
Profit Sharing Plan for the exclusive benefit of its eligible Employees and
their Beneficiaries. FFE Transportation Services, Inc. and Conwell Corporation
previously established the FFE Transportation Services, Inc. Employee Stock
Ownership Plan (the "FFE Transportation Services ESOP") and the Conwell
Corporation Employee Stock Ownership Plan (the "Conwell ESOP"), respectively,
for the exclusive benefit of their eligible Employees and their Beneficiaries.
Pursuant to that certain Plan Merger Agreement effective December 31, 1999, the
Prior Plan is hereby restated as the Frozen Food Express Industries, Inc. 401(k)
Savings Plan (the "Plan") and incorporates the FFE Transportation Services ESOP
and the Conwell ESOP accounts as ESOP Accounts. As restated, the Plan is
intended to be qualified under Sections 401(a), 401(k), and 4975(e)(7) of the
Internal Revenue Code of 1986, as amended (the "Code"), and Section 407(d)(6) of
the Employee Retirement Income Security Act ("ERISA") and applicable regulations
thereunder. The restated Plan is generally effective January 1, 2000, except as
otherwise provided herein. The Plan consists of the Plan document herein and the
separate Trust Agreement.
SECTION 1.2. PURPOSE. The purpose of the Plan is to reward eligible
Employees for their loyal and faithful service, to share with such Employees a
portion of the Employers' profits, to help such Employees accumulate funds for
their retirement, and to provide funds for such Employees or their Beneficiaries
in the event of death or disability. The benefits provided by the Plan will be
paid from the Trust and will be in addition to the benefits eligible Employees
are entitled to receive under any other programs of the Employer and/or from the
federal Social Security Act. The Plan and the Trust are established and shall be
maintained for the exclusive benefit of the eligible Employees and their
Beneficiaries.
SECTION 1.3. LIMITATION. The provisions of this Plan, as amended and
restated, shall apply solely to an Employee who terminates employment with the
Employer on or after the restated Effective Date of this Plan. If an Employee
terminates employment with the Employer prior to the restated Effective Date,
that Employee shall be entitled to benefits under the terms of the Prior Plan,
the FFE Transportation Services ESOP, or the Conwell ESOP, as applicable.
* * * * * * *
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ARTICLE TWO
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DEFINITIONS
When used herein, the following words and phrases shall have the respective
meanings set forth below, unless the context clearly indicates otherwise:
SECTION 2.1. ACCOUNTING DATE means the last business day of each calendar
quarter of any Plan Year.
SECTION 2.2. ACCOUNTS means the value of all of the accounts maintained by
the Committee for a particular Participant, including his Discretionary Employer
Contribution Account, Matching Employer Contribution Account, Rollover Account,
Savings Account, W & B Plan Rollover Account, ESOP Transfer Account, and ESOP
Rollover Account.
SECTION 2.3. ADMINISTRATOR means the Committee designated by the Employer
unless the Employer designates another person to hold the position of
Administrator by written Employer action.
SECTION 2.4. AFFILIATE means any company, other than an Employer, included
within a "controlled group of corporations" defined by Code Section 1563(a)
determined without regard to Code Sections 1563(a)(4) and (e)(3)(C) and Code
Section 409(l)(4), which contains an Employer.
SECTION 2.5. ALTERNATE PAYEE means any spouse, former spouse, child, or
other dependent of a Participant who is recognized by a domestic relations order
as having a right to receive all, or a portion of, the benefits payable under
the Plan with respect to such Participant.
SECTION 2.6. BENEFICIARY means a person or entity, either in an individual
or fiduciary capacity, designated by a Participant or Former Participant
pursuant to Article 8 to receive any benefit payable under this Plan upon the
death of such Participant or Former Participant.
SECTION 2.7. BREAK IN SERVICE.
(a) A Break in Service, for purposes of eligibility, means a Period of
Severance of at least twelve (12) consecutive months. A Period of Severance
means a continuous period of time during which an Employee is not employed
by the Employer. Such period shall begin on the date the Employee retires,
quits, is discharged, or dies, or, if earlier, the twelve (12) month
anniversary of the date on which the Employee was otherwise first absent
from work.
(b) A Break in Service, for purposes of vesting, means a Period of
Severance of at least twelve (12) consecutive months. A Period of Severance
means a continuous period of time during which an Employee is not employed
by the Employer. Such period shall begin on the date the Employee retires,
quits, is discharged, or dies, or, if earlier, the twelve (12) month
anniversary of the date on which the Employee was otherwise first absent
from work.
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(c) An Employee shall receive credit for purposes of determining
whether he has incurred a Break in Service under subsection (a) or (b)
above for the aggregate of all time period(s) commencing with the first day
such Employee completes an Hour of Service, the Employment Commencement
Date, (including such day following reemployment) and ending on the date a
Break in Service begins. An Employee shall also receive credit for any
Period of Severance of less than twelve (12) consecutive months. Fractional
periods of a year shall be expressed in terms of days.
(d) Further, solely for the purpose of determining whether a
Participant has incurred a Break in Service under (a) or (b) above, Hours
of Service shall be recognized for "authorized leaves of absence" and
"maternity and paternity leaves of absence."
(i) An "authorized leave of absence" means an unpaid temporary
cessation from active employment with the Employer pursuant to an
established nondiscriminatory policy, whether occasioned by illness,
military service or any other reason if:
(A) a person is absent on a leave of absence with the prior
consent of his Employer, which consent shall be granted under
uniform rules applied to all Employees on a nondiscriminatory
basis, but only if such person is an Employee immediately prior
to the commencement of such period of authorized absence and
resumes employment with an Employer not later than the first
working day following the expiration of such period of authorized
absence;
(B) a person is a member of the Armed Forces of the United
States and his reemployment rights are guaranteed by law, but
only if such person is an Employee immediately prior to becoming
a member of such Armed Forces and resumes employment with an
Employer within the period during which his reemployment rights
are guaranteed by law; or
(C) a person who is at any time an Employee who is employed
by an entity which is not an Employer but whose employees are
deemed, under Code Section 414, to be employed, together with all
Employees, by a common entity, including a period or periods of
such employment prior to or after any particular time such person
is an Employee.
(ii) A "maternity or paternity leave of absence" means an absence
from work for any period because of the Employee's pregnancy, birth of
the Employee's child, placement of a child with the Employee relating
to the adoption of the child, or any absence for the purpose of caring
for the child for a period immediately following the birth or
placement. For purposes of a maternity and paternity leave of absence,
Hours of Service shall be credited for the Computation Period in which
the absence from work begins, only if the credit is necessary to
prevent the Employee from incurring a Break in Service, or, in any
other case, in the immediately following Computation Period. The Hours
of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for the
absence, or, in any case in which the Administrator is unable to
determine the hours normally credited, eight (8) Hours of Service per
day. The total Hours of Service required to be credited for a
"maternity or paternity leave of absence" shall not exceed five
hundred one (501) hours.
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(e) Notwithstanding the foregoing, no credit will be given for such
absences from work unless the Employee furnishes to the Committee such
timely information as it may reasonably require to establish that the
absence from work is for the reason(s) referred to above and the number of
days for which there was such an absence.
SECTION 2.8. CODE means the Internal Revenue Code of 1986, as amended from
time to time.
SECTION 2.9. COMMITTEE means the Savings Plan Committee appointed pursuant
to Article 17 to administer the Plan.
SECTION 2.10. COMPANY means Frozen Food Express Industries, Inc., a
corporation organized under the laws of the State of Texas.
SECTION 2.11. COMPANY STOCK
(a) Company Stock means those unrestricted shares of voting common
stock issued by the Company and any common or preferred stock issued by the
Employer or by an Affiliate which constitute Employer Securities under Code
Sections 409(l) and 4975(e)(8).
(b) Qualifying Company Stock means:
(i) Common stock issued by the Employer (or by a corporation
which is a member of the same controlled group) which is readily
tradable on an established securities market; or
(ii) If there is no common stock which meets the requirements of
(i) above, then common stock issued by the Employer (or by a
corporation which is a member of the same controlled group) having a
combination of voting power and dividend rights equal to or in excess
of:
(A) that class of common stock of the Employer (or any other
such corporation) having the greatest voting power; and
(B) that class of common stock of the Employer (or of any
other such corporation) having the greatest dividend rights; or
(iii) Noncallable preferred stock, if such stock is convertible
at any time into stock which meets the requirements of (i) or (ii)
(whichever is applicable) and if such conversion is at a conversion
price that is reasonable. A preferred stock will be considered
noncallable if after the call there will be a reasonable opportunity
for a conversion which meets the requirements of the preceding
sentence in accordance with applicable Treasury regulations.
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Notwithstanding the foregoing, references in the Plan to Company Stock
shall mean Qualifying Company Stock as defined in this subsection (b).
SECTION 2.12. COMPENSATION.
(a) Compensation, pursuant to the safe harbor definition of Treasury
Regulation Section 1.415-2(d)(10), means wages, salaries, and fees for
professional services and other amounts received (without regard to whether
or not an amount is paid in cash) for personal services actually rendered
in the course of employment with the Employer maintaining the Plan to the
extent that the amounts are includable in gross income including, but not
limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or other expense allowances
under a nonaccountable plan described in Treasury Regulation Section
1.62-2(c), plus, effective for Plan Years beginning on or after January 1,
1998, any amounts excluded from income pursuant to Code Sections 125 and
401(k), and excluding the following:
(i) contributions by the Employer to any qualified deferred
compensation plan (to the extent not includable in the Participant's
gross income) or simplified employee pension defined in Code Section
408(k) (to the extent not includable in the Participant's gross
income) (other than, effective for Plan Years beginning on or after
January 1, 1998, amounts contributed pursuant to Code Section 401(k));
(ii) distributions from any plan of deferred compensation;
(iii) amounts realized from the exercise of any nonqualified
stock option, or, in the case of restricted stock, when such stock
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture;
(iv) amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option; and
(v) other amounts which receive special tax benefits such as
premiums paid by the Employer (to the extent not includable in the
Participant's gross income) under group term life insurance,
contributions by the Employer to an annuity under Code Section 403(b)
(to the extent not includable in the Participant's gross income), and
any other amounts received under any Employer sponsored fringe benefit
plan (to the extent not includable in the Participant's gross income).
(b) Compensation for any Limitation Year includes compensation
received by an Employee in that Limitation Year from an Employer prior to
the Employee becoming a Participant in the Plan.
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(c) Notwithstanding the foregoing, Compensation taken into account for
determining all benefits provided under the Plan for any determination
period shall not exceed $150,000, or such larger amount the Secretary of
the Treasury may prescribe for the relevant year. If the period for
determining compensation used in calculating an Employee's allocation for a
determination period is a short Plan Year, the Compensation limit is an
amount equal to the otherwise applicable Compensation limit multiplied by a
fraction, the numerator of which is the number of months in the short Plan
Year and the denominator of which is twelve (12). If Compensation for any
prior determination period is taken into account in determining an
Employee's allocations or benefits for the current determination period,
the Compensation for such prior year is subject to the applicable
Compensation limit in effect for that prior year.
(d) For purposes of determining whether the Plan discriminates in
favor of Highly Compensated Employees, Compensation means Compensation
defined in this Section 2.12, except any exclusions from Compensation other
than the exclusions described in clauses (a)(i), (ii), (iii), (iv), and (v)
do not apply. The Employer also may elect to use an alternate
nondiscriminatory definition, under Code Section 414(s) and the applicable
Treasury regulations. In determining Compensation under this paragraph, the
Employer may elect to include all Savings Contributions made by the
Employer on behalf of the Employees. The Employer's election to include
Savings Contributions must be consistent and uniform for Employees and all
plans of the Employer for any particular Plan Year. The Employer may make
this election to include Savings Contributions for nondiscrimination
testing purposes, whether or not this Section includes Savings
Contributions in the general Compensation definition of the Plan.
(e) Notwithstanding the foregoing, Compensation for any Self-Employed
Individual means earned income.
SECTION 2.13. CURRENT MARKET VALUE means the Current Market Value of each
asset included in the Trust Assets on any particular date, which shall be that
amount determined by the Trustee on a basis uniformly applied which, in the
Trustee's opinion, fairly reflects the fair market value of such asset on such
date.
SECTION 2.14. DISABILITY means a physical or mental condition which, in the
opinion of the Committee, totally and presumably permanently prevents a
Participant or Former Participant from satisfactorily performing substantially
the same duties assigned to him by his Employer (which includes for purposes of
this Section 2.14 an employing entity described in Section 2.42 at the time such
condition develops, or if such Participant or Former Participant is on an
authorized leave of absence (other than an authorized leave of absence referred
to in Section 2.7(d)(i)) or any other leave of absence approved by his Employer
when such condition develops, substantially the same duties assigned to him by
his Employer immediately prior to the commencement of such period of authorized
or approved absence or such other duties which the Employer makes available to
the Participant and for which the Participant is qualified by reason of his
training, education, or experience. A determination that Disability exists shall
be based upon competent medical evidence satisfactory to the Committee. The date
any person's Disability occurs shall be deemed to be the date such condition is
determined to exist by the Committee.
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SECTION 2.15. DISCRETIONARY EMPLOYER CONTRIBUTION means any contribution to
the Plan made by an Employer for the Plan Year and allocated to a Participant's
Discretionary Employer Contribution Account.
SECTION 2.16. DISCRETIONARY EMPLOYER CONTRIBUTION ACCOUNT means the account
or record maintained or caused to be maintained by the Trustee showing the
composition and value of the individual interest of a particular Participant,
Former Participant or Beneficiary in the Trust Assets attributable to
Discretionary Employer Contributions, if any.
SECTION 2.17. EARLY RETIREMENT means the date the Participant attains age
55 and completes ten (10) Years of Service
SECTION 2.18. EARLY RETIREMENT DATE means the first day next following the
date the Participant attains Early Retirement Age and which immediately follows
the last day on which the Participant is an Employee, or, if later, the last day
of the Participant's authorized leave of absence, if any.
SECTION 2.19. EFFECTIVE DATE. The original Effective Date of this Plan is
October 1, 1987. The Effective Date of this Plan as restated is January 1, 2000,
except as otherwise provided herein.
SECTION 2.20. EMPLOYEE.
(a) Employee means any individual currently employed by the Employer
maintaining the Plan or of any other Employer required to be aggregated
with the Employer under Code Sections 414(b), (c), (m) or (o).
(b) The Plan does not treat any Leased Employee as an Employee of the
Employer. A Leased Employee is an individual, who otherwise is not an
Employee of the Employer, who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning
of Code Section 144(a)(3)) on a substantially full time basis for at least
one (1) year and who performs services under the primary direction and
control of the Employer.
(c) Notwithstanding the preceding, the term "Employee" shall not
include any individual who is designated as an "Independent Contractor" by
the Employer, even if the status of such individual subsequently is changed
from that of an Independent Contractor to that of an employee as a result
of administrative or legal proceedings.
SECTION 2.21. EMPLOYER CONTRIBUTIONS means the Matching Employer
Contributions, Discretionary Employer Contributions and Incentive Contributions
made by the Employer pursuant to Section 4.2.
SECTION 2.22. EMPLOYER means FROZEN FOOD EXPRESS INDUSTRIES, INC., FFE
TRANSPORTATION SERVICES, INC., CONWELL CORPORATION, W & B REFRIGERATION SERVICE
COMPANY, INC., LISA MOTOR LINES, INC., GLOBAL REFRIGERANT MANAGEMENT, INC., or
any other Affiliate who, with the written consent of the Plan Sponsor, adopts
this Plan on the effective date of its election to participate.
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SECTION 2.23. EMPLOYMENT COMMENCEMENT DATE means the first day for which an
Employee is to be credited with an Hour of Service.
SECTION 2.24. ENTRANCE DATE means the first business day of the month
following an Employee's completion of ninety (90) days of employment.
SECTION 2.25. ERISA means the Employee Retirement Income Security Act of
1974, as amended from time to time.
SECTION 2.26. ESOP ACCOUNTS means the ESOP Transfer Accounts and ESOP
Rollover Accounts maintained under this Plan.
SECTION 2.27. ESOP ROLLOVER ACCOUNT means the account(s) or record(s)
maintained or caused to be maintained by the Plan Administrator showing the
composition and value of the individual interest of a particular Participant,
Former Participant, or Beneficiary in the Trust Assets attributable to Rollover
Contributions to the FFE Transportation Services ESOP and/or the Conwell ESOP
contributed to the Trust pursuant to that certain Plan Merger Agreement
effective December 31, 1999.
SECTION 2.28. ESOP TRANSFER ACCOUNT means the account(s) or record(s)
maintained or caused to be maintained by the Plan Administrator showing the
composition and value of the individual interest of a particular Participant,
Former Participant, or Beneficiary in the Trust Assets attributable to the
Participant's or Former Participant's Employer Securities Account and Employer
Investment Account under the FFE Transportation Services ESOP or Conwell ESOP
contributed to the Trust pursuant to that certain Plan Merger Agreement
effective December 31, 1999.
SECTION 2.29. FORMER PARTICIPANT means a Participant who is no longer
participating in the Plan but who has a vested account balance which has not
been paid in full.
SECTION 2.30. HIGHLY COMPENSATED EMPLOYEE means any Participant or Former
Participant who is a Highly Compensated Employee, defined in Code Section
414(q). Generally, any Participant or Former Participant is considered a Highly
Compensated Employee if the Participant or Former Participant:
(a) was at any time during the Plan Year or during the preceding Plan
Year a Five Percent Owner as defined in Section 12.2(g)(iii); or
(b) for the preceding Plan Year (i) had Compensation from the Employer
in excess of $80,000, as adjusted by the Secretary of the Treasury for the
relevant year and (ii) was in the top-paid group during the preceding Plan
Year.
(c) An Employee is in the top-paid group of Employees for any Plan
Year if such Employee is in the group consisting of the top twenty percent
(20%) of the Employees when ranked on the basis of Compensation paid during
the Plan Year. However, solely for determining the total number of active
Employees for a year, the following Employees are disregarded:
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(i) The Employees described in this subsection (i) are excluded
on the basis of age or Service:
(A) Employees who have not completed six (6) months of
Service by the end of the year. (An Employee's Service in the
immediately preceding year is added to the Employee's Service in
the current year to determine whether the exclusion applies in
the current year.);
(B) Employees who normally work less than 17 1/2 hours per
week. (This determination is made independently for each year.
Weeks during which the Employee did not work are not considered.
An Employee who works less than 17 1/2 hours a week for fifty
percent (50%) or more of the total weeks worked by the Employee
during the year is deemed to normally work less than 17 1/2 hours
per week under this rule.);
(ii) Employees who are included in a unit of employees covered by
an agreement that the Secretary of Labor finds to be a collective
bargaining agreement between Employee representatives and the Employer
which satisfies Code Section 7701(a)(46) and Temporary Treasury
Regulation Section 301.7701-17T are included in determining the number
of Employees in the top-paid group unless the following exception
applies. If ninety percent (90%) or more of the Employees of the
Employer are covered under collective bargaining agreements that the
Secretary of Labor finds to be collective bargaining agreements
between Employee representatives and the Employer, which agreements
satisfy Code Section 7701(a)(46) and Temporary Treasury Regulation
Section 301.7701-17T, and the Plan covers only Employees who are not
covered under the agreements, then the Employees who are covered under
the agreements are (A) not counted in determining the number of
noncollective bargaining employees who will be included in the
top-paid group in testing the Plan; and (B) not included in the
top-paid group in testing the Plan.
The Committee must make the determination of who is a Highly
Compensated Employee consistent with Code Section 414(q) and
regulations issued under that Code Section. The Employer may make a
calendar year election to determine the Highly Compensated Employees
for the preceding Plan Year, as prescribed by Treasury regulations. A
calendar year election must apply to all plans and arrangements of the
Employer.
For purposes of this Section, Compensation means Compensation defined
in Section 2.12, and including deferrals under (a) Code Section
402(a)(8) relating to a Code Section 401(k) arrangement; (b) Code
Section 125 relating to a cafeteria plan; (c) Code Section 403(b)
relating to a tax sheltered annuity plan; (d) Code Section 408(h)
relating to a simplified employee pension; and (e) effective January
1, 1998, Code Section 402(k) relating to a simple retirement account.
Compensation from each Related Employer shall be taken into account.
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SECTION 2.31. HOURS OF SERVICE.
(a) Hours of Service shall be credited for periods during which an
Employee is either:
(i) directly or indirectly paid, or entitled to payment, by an
Employer or an entity described in Section 2.42 for the performance of
duties in his capacity as an Employee of such Employer or entity;
(ii) directly or indirectly paid or entitled to payment, by an
Employer or an entity described in Section 2.42 on account of a period
of time during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or any other leave of absence approved by such Employer
or entity;
(iii) entitled to back pay, irrespective of mitigation of
damages, which is either awarded or agreed to by an Employer or an
entity described in Section 2.42; or
(iv) on an authorized leave of absence.
(b) An Employee shall not receive credit for the same Hours of Service
under more than one paragraph of this Section 2.31(a);
(c) An Employee shall also receive credit for any additional Hours of
Service required by applicable federal law (other than ERISA) to be
credited to him, the nature and extent of such credit to be determined
under such law.
(d) (i) (A) Except as provided in subparagraph (B) of this Subsection
2.31(d)(i), Hours of Service under Subsection 2.31(a)(i) shall be computed
by crediting an Employee with 190 Hours of Service for each month such
Employee is entitled to be credited with one Hour of Service under
Subsection 2.31(a)(i).
(B) If an Employee is a part-time Employee, such Employee
shall receive credit for Hours of Service equal to the actual
number of hours worked by such Employee, as determined from the
appropriate payroll records.
(ii) Hours of Service under Subsection 2.31(a)(ii) shall be
determined pursuant to the rules set forth in paragraphs (b) and (c)
of Section 2530.200b-2 of the United States Department of Labor
Regulations, which rules are hereby incorporated and made a part of
this Plan by reference.
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(iii) Except for part-time Employees, Hours of Service under
Subsection 2.31(a)(iv) shall be credited on the basis of 190 hours for
each complete calendar month of a person's authorized leave of
absence, but no such Hours of Service shall be credited for any month
for which an Employee receives credit for Hours of Service under
Subsection 2.31(a)(i) or (ii).
(iv) For purposes of this Section an Employee works "part-time"
if he normally is employed for less than twenty (20) hours per week or
less than six (6) months per Plan Year.
(e) The terms defined in this Section 2.31 shall include Hours of
Service rendered by an Employee prior to the Effective Date for an Employer
or a member of a controlled group of corporations including an Employer.
SECTION 2.32. INCENTIVE CONTRIBUTIONS means any contribution to the Plan
made by FFE Transportation Services, Inc. pursuant to the 1994 Incentive Bonus
Plan and allocated to a Participant's Savings Account. All Employer
Contributions under Section 4.2(b)(ii) are Incentive Contributions.
SECTION 2.33. MATCHING EMPLOYER CONTRIBUTION means any contribution to the
Plan made by an Employer for the Plan Year and allocated to a Participant's
Matching Employer Contribution Account by reason of the Participant's Savings
Contributions. All Employer Contributions under Section 4.2(a) are Matching
Employer Contributions.
SECTION 2.34. MATCHING EMPLOYER CONTRIBUTION ACCOUNT means the account or
record maintained or caused to be maintained by the Trustee showing the
composition and value of the individual interest of a particular Participant,
Former Participant or Beneficiary in the Trust Assets attributable to Matching
Employer Contributions and Special Employer Contributions, if any.
SECTION 2.35. NAMED FIDUCIARY means one or more fiduciaries named in this
Agreement who jointly and severally shall have authority to control or manage
the operation and administration of the Plan. Frozen Food Express Industries,
Inc. shall be the Named Fiduciary unless it designates another person by written
Employer action.
SECTION 2.36. NONFORFEITABLE means a vested interest attained by a
Participant or Beneficiary in that part of the Participant's benefit under the
Plan arising from the Participant's Service, which claim is unconditional and
legally enforceable against the Plan.
SECTION 2.37. NON-HIGHLY COMPENSATED EMPLOYEE. An Employee who is not a
Highly Compensated Employee.
SECTION 2.38. NORMAL RETIREMENT AGE. The 65th birthday of a Participant or
Former Participant.
SECTION 2.39. NORMAL RETIREMENT DATE means, for each Participant, the first
day next following the date the Participant attains Normal Retirement Age and
which immediately follows the last day on which the Participant is an Employee,
or, if later, the last day of the Participant's authorized leave of absence, if
any.
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SECTION 2.40. OWNER-EMPLOYEE means a sole proprietor or a partner who owns
more than ten percent (10%) of either the capital interest or profits interest
in an unincorporated Employer and who receives income from such unincorporated
Employer for personal services.
SECTION 2.41. PARTICIPANT means an Employee of the Employer who has met the
eligibility requirements of this Plan and who has been enrolled as a Participant
in this Plan pursuant to Article 3.
SECTION 2.42. PARTICIPATING EMPLOYER means any Related Employer that may
elect to adopt this Plan pursuant to Article 14.
SECTION 2.43. PARTICIPATION means any period commencing on the date the
Employee becomes a Participant and ending on the date on which the Employee
incurs a Severance from Service.
SECTION 2.44. PLAN means the Frozen Food Express Industries, Inc. 401(k)
Savings Plan, as restated herein.
SECTION 2.45. PLAN SPONSOR means Frozen Food Express Industries, Inc.
SECTION 2.46. PLAN YEAR. The annual period beginning on January 1 and
ending on December 31.
SECTION 2.47. PRIOR PLAN means the Savings Plan for the Employees of Frozen
Food Express, as in effect prior to the Effective Date.
SECTION 2.48. RE-EMPLOYMENT COMMENCEMENT DATE. The first date on which an
Employee is credited with an Hour of Service upon his return to employment with
an Employer after he has Separated from Service.
SECTION 2.49. RELATED EMPLOYER. A related group of employers is a
controlled group of corporations (defined in Code Section 414(b)), trades or
businesses (whether or not incorporated) which are under common control (defined
in Code Section 414(c)) or an affiliated service group (defined in Code Section
414(m) or in Code Section 414(o)). If the Employer is a member of a related
group, the term "Employer" includes the related group members for purposes of
crediting Hours of Service, determining Years of Service and Breaks in Service
under Articles 2 and 6, applying the participation test of Code Section
401(a)(26) and the coverage test of Code Section 410(b), applying the
limitations on allocations in Article 5, applying the top-heavy rules and the
minimum allocation requirements of Article 12, the definitions of Employee,
Highly Compensated Employee, Compensation and Leased Employee, and for any other
purpose required by the applicable Code Section or by a Plan provision. However,
an Employer may contribute to the Plan only by being a signatory to a
Participation Agreement to the Plan. If one or more of the Employer's related
group members become Participating Employers by executing a Participation
Agreement to the Plan, the term "Employer" includes the participating related
group members for all purposes of the Plan, and Administrator means the Employer
that is the signatory to the Plan. For Plan allocation purposes, Compensation
does not include Compensation received from a Related Employer that is not
participating in this Plan.
12
SECTION 2.50. RETIREMENT. A Participant's or Former Participant's being
Separated from Service on or after his Normal Retirement Date. Retirement shall
be considered as commencing on that day which occurs on or after a Participant
or Former Participant had reached Normal Retirement Date and which immediately
follows (i) the last day of which such Participant or Former Participant is an
Employee or, if later, (ii) the last day of an authorized leave of absence or
any other leave of absence approved by such Participant's or Former
Participant's Employer.
SECTION 2.51. ROLLOVER ACCOUNT. The account(s) or record(s) maintained or
caused to be maintained by the Trustee showing the composition and value of the
individual interest of a particular Participant, Former Participant or
Beneficiary in the Trust Assets attributable to each contribution of a Rollover
Amount (as defined in Section 4.5) or a direct trustee-to-trustee transfer of
assets to the Trust from a qualified plan or Code Section 403(b) annuity on
behalf of a Participant.
SECTION 2.52. SAVINGS ACCOUNT. The account or record maintained or caused
to be maintained by the Trustee showing the composition and value of the
individual interest of a particular Participant, Former Participant or
Beneficiary in the Trust Assets attributable to Savings Contributions elected by
Participants, Incentive Contributions, Qualified Non-Elective Contributions and
Qualified Matching Contributions.
SECTION 2.53. SAVINGS CONTRIBUTIONS means Employer contributions to the
Plan made pursuant to Participants' elections under Section 4.1.
SECTION 2.54. SELF-EMPLOYED INDIVIDUAL means, regarding an unincorporated
business, an individual described in Code Section 401(c)(1). A Self-Employed
Individual shall be treated as an Employee if the individual has an ownership
interest in either the capital or profits interest of an unincorporated Employer
and receives income from the Employer for personal services.
SECTION 2.55. SEPARATION FROM SERVICE occurs whenever a person ceases to be
an Employee of the Employer and is no longer being credited with Hours of
Service.
SECTION 2.56. SERVICE means any period of time the Employee is in the
employ of the Employer. Service in all cases includes periods during which the
Employee is on an "authorized leave of absence" or a "maternity or paternity
leave of absence" defined in Section 2.7(d) relating to a Break in Service.
Leaves of absence also shall include periods of absence in connection with
military service during which the Employee's re-employment rights are legally
protected. Except for absence by reason of military service, leaves of absence
shall be for a maximum period of two (2) years. Leaves of absence shall be
granted on a uniform and nondiscriminatory basis.
If the Employer maintains the plan of a Predecessor Employer, Service shall
include service for the Predecessor Employer. To the extent it may be required
under applicable Treasury regulations under Code Section 414, Service shall
include all service for any Predecessor Employer.
13
For purposes of determining vesting of a Participant's ESOP Transfer
Account, the Participant will be credited with the greater of (i) his service as
determined in accordance with the elapsed time method described in the Plan, or
(ii) the Years of Service credited to such Participant as of December 31, 1999,
under the FFE Transportation Services ESOP and/or the Conwell ESOP, plus the
number of Years of Service credited under this Plan from and after January 1,
2000 (using the elapsed time method from such date forward).
SECTION 2.57. SHAREHOLDER-EMPLOYEE means a Participant who owns more than
five percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation under
Code Section 1362(a) and who receives income from the Employer for personal
services.
SECTION 2.58. SEPARATED FROM SERVICE. A person is Separated from Service
when he is no longer an Employee.
SECTION 2.59. SPECIAL EMPLOYER CONTRIBUTIONS means the Special Employer
Contributions made by the Employers pursuant to the terms of the Prior Plan.
SECTION 2.60. SPOUSE means the spouse to whom a Participant or Former
Participant is married on the date the Participant or Former Participant becomes
entitled to benefit payments under the Plan, or if such entitlement has not
occurred, the spouse to whom the Participant or Former Participant was married
on the date of his death; provided, however, that the Participant or Former
Participant had been married to such spouse for at least one year ending on the
date the Participant becomes entitled to benefit payments or the date of the
Participant's or Former Participant's death.
SECTION 2.61. TRUST means the trust created by the Trust Agreement between
Frozen Food Express Industries, Inc. and the Trustee.
SECTION 2.62. TRUST AGREEMENT means the agreement, entered into by Frozen
Food Express Industries, Inc. and the Trustee, or any successor Trustee,
establishing the Trust and specifying the duties of the Trustee.
SECTION 2.63. TRUST FUND means all assets of any kind and nature from time
to time held by the Trustee or its agent under the Trust Agreement without
distinction between income and principal. This Plan contemplates a single Trust
for all Employers participating under the Frozen Food Express Industries, Inc.
401(k) Savings Plan. However, the Trustee will maintain separate records of
account to reflect properly each Participant's Account Balance from each
Participating Employer.
SECTION 2.64. TRUSTEE means at any particular time, the then acting Trustee
or, collectively, if there is more than one, the then acting Trustees of the
Trust.
SECTION 2.65. VALUATION DATE means any business day on which the Nasdaq
National Market is open.
14
SECTION 2.66. VESTED PERCENTAGE means that percentage of a Participant's
Discretionary Employer Contribution Account, Matching Employer Contribution
Account, W & B Plan Rollover Account, and ESOP Transfer Account, if any, in
which the Participant's rights are nonforfeitable and fully vested, which
percentage is determined by reference to the vesting schedule set forth in
Section 6.2.
SECTION 2.67. W & B PLAN ROLLOVER ACCOUNT means the account(s) or record(s)
maintained or caused to be maintained by the Plan Administrator showing the
composition and value of the individual interest of a particular Participant,
Former Participant, or Beneficiary in the Trust assets attributable to the
direct trustee-to-trustee transfers of assets to the Trust from the W & B
Refrigeration Service Co., Inc. Employees' Profit Sharing Plan and Trust.
SECTION 2.68. YEAR OF SERVICE.
(a) For purposes of eligibility, a Year of Service means the twelve
(12) consecutive month period commencing on an Employee's Employment
Commencement Date and ending on the anniversary of the Employee's
Employment Commencement Date. If an Employee fails to complete a Year of
Service on the first anniversary of the Employment Commencement Date, the
Employee shall be deemed to complete a Year of Service upon the completion
of twelve (12) months of Service. An Employee shall receive credit for the
aggregate of all time periods commencing with the first day the Employee is
entitled to credit for an Hour of Service, including the Re-Employment
Commencement Date, and ending on the date a Break in Service begins. An
Employee also shall receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year shall be
expressed in terms of months, with credit for a month of service being
given for each thirty (30) days of Elapsed Time.
(b) For purposes of vesting, and subject to Section 6.3, a Year of
Service means twelve (12) months of Service. For purposes of determining an
Employee's Years of Service for vesting purposes, an Employee shall receive
credit for the aggregate of all time periods commencing on an Employee's
Employment Commencement Date, including the Re-Employment Commencement
Date, and ending on the date a Break in Service begins. An Employee also
shall receive credit for any Period of Severance of less than twelve (12)
consecutive months. Fractional periods of a year shall be expressed in
terms of months, with credit for a month of service being given for each
thirty (30) days of Elapsed Time. In computing an Employee's Years of
Service, the following rules shall apply:
(i) For an Employee who terminates employment and is subsequently
re-employed after incurring a Break in Service, Service prior to the
Break in Service shall not be taken into account until the Employee
has completed a Year of Service after re-employment.
(ii) For a Participant who terminates employment and who
subsequently is re-employed after incurring five (5) consecutive
Breaks in Service, Years of Service after the Break in Service shall
not be taken into account for purposes of determining the
Nonforfeitable percentage of an Employee's Account Balance derived
from Employer Contributions which accrued before the Break in Service.
15
(iii) For a Participant who terminates employment without any
vested right to his Discretionary Employer Contribution Account or
Matching Employer Contribution Account and who is re-employed after a
Break in Service, Service before the Break in Service shall not be
taken into account if the number of consecutive Breaks in Service
equals or exceeds the greater of (A) five (5), or (B) the aggregate
number of Years of Service before the Break in Service.
(iv) Years of Service, for purposes of vesting, shall include all
Years of Service of the Employee with any Predecessor Employer.
(v) Years of Service with the Employer before a Participant
enters the Plan shall be considered for purposes of vesting.
(vi) If the Employer is a member of a group of Related Employers,
then Year of Service for purposes of vesting shall include Service
with any Related Employer.
(vii) For purposes of determining Years of Service for vesting,
the following definitions shall apply:
(A) Employment Commencement Date means the date on which an
Employee is first entitled to credit for an Hour of Service.
(B) Period of Severance means the period of time commencing
on the Severance from Service Date and ending on the date on
which the Employee again performs an Hour of Service for the
Employer.
(C) Re-Employment Commencement Date means the first date,
following a Period of Severance which is not required to be
considered under the Service rules, on which the Employee
performs an Hour of Service for the Employer.
(D) Severance from Service Date means the date on which
occurs the earlier of: (i) the date on which an Employee quits,
retires, is discharged or dies; or (ii) the first anniversary of
the first date of a period in which an Employee remains absent
from Service, with or without pay, with the Employer for any
other reason, such as vacation, holiday, sickness, disability,
leave of absence or layoff.
(c) For purposes of vesting, an Employee's years of service with W & B
Refrigeration Service Co., Inc. shall be counted as Years of Service under
this Plan to the extent that such service was counted as years of service
under the W & B Refrigeration Service Co., Inc. Employees' Profit Sharing
Plan and Trust.
(d) For purposes of determining vesting of a Participant's ESOP
Transfer Account, the Service crediting provisions of Section 2.56 of the
Plan shall apply.
16
(e) The terms defined in this Section 2.68 shall include Years of
Service performed by an Employee prior to the Effective Date.
* * * * * *
17
ARTICLE THREE
-------------
ELIGIBILITY AND PARTICIPATION
SECTION 3.1. ELIGIBILITY.
(a) Any Employee included under the provisions of the Prior Plan, the
FFE Transportation Services ESOP, or the Conwell ESOP as of December 31,
1999 shall continue to participate in accordance with the provisions of
this Plan.
(b) Any other Employee shall become a Participant as of the Entrance
Date following the date on which he completes ninety (90) days of
employment.
(c) An Employee who has not satisfied the requirements of Section
3.1(b) above and is entitled to receive an allocation of Incentive
Contributions under the FFE Transportation Services, Inc. 1994 Incentive
Bonus Plan shall become a Participant in the Plan as of the Entrance Date
immediately following his completion of one day of employment; provided,
however, that such participation shall be limited to his ability to receive
an allocation of Incentive Contributions under Section 4.2(b)(ii) and shall
not cause him to be eligible to receive an allocation of any other
contributions to the Plan.
SECTION 3.2. ELIGIBILITY FOLLOWING SEPARATION FROM SERVICE. If an Employee
who has satisfied the eligibility requirements of Section 3.1 has Separated from
Service and later returns to Service with an Employer, he shall become a
Participant on his Re-Employment Commencement Date; provided, however, that any
Employee who Separated from Service at a time when he had no Vested Percentage
and who has incurred five consecutive Breaks-in-Service before his Re-Employment
Commencement Date, must meet the eligibility requirements of Section 3.1 anew
before he will become or again become a Participant.
SECTION 3.3. PARTICIPATION DURING LEAVE OF ABSENCE. During an authorized
leave of absence or any other leave of absence approved by a Participant's or
Former Participant's Employer:
(a) The Participant's Accounts shall share in the allocation of net
earnings, net losses, taxes (if any) and expenses of the Trust during such
period; and
(b) In the case of an authorized leave of absence under Section 2.7,
the Participant's interest in his Discretionary Employer Contribution
Account, Matching Employer Contribution Account, and ESOP Transfer Account
shall continue to vest, as provided in Article 6, until he is Separated
from Service. In the case of any other authorized leave of absence or any
other leave of absence approved by his Employer, his interest in his
Discretionary Employer Contribution Account, Matching Employer Contribution
Account and ESOP Transfer Account shall continue to vest, as provided in
Article 6, but only if he resumes employment with an Employer not later
than the first working day following the expiration of the period of such
leave. If such employment is not so resumed, the date he is Separated from
Service for purposes of such vesting shall be deemed to be the last day of
employment prior to the commencement of such authorized or approved absence
and such Participant or Former Participant shall not receive credit for any
Hours of Service under Section 2.31(a)(ii) after such last day.
18
SECTION 3.4. NOTIFICATION OF ELIGIBILITY AND COMMENCEMENT OF
PARTICIPATION. As soon as administratively feasible prior to each Entrance
Date, the Employers shall furnish the Committee with a list of all
Employees who become eligible or re-eligible to participate in the Plan as
of that Entrance Date. The Committee shall promptly notify each such
Employee of his prospective participation and provide each such Employee
with such explanation of the Plan as the Committee may provide for that
purpose, together with such forms as the Committee may prescribe for
elections to participate in the Plan. Such forms shall include elections
for (1) Savings Contributions (via payroll deduction); (2) investment
direction of a Participant's accounts and (3) Beneficiary designation. Each
Employee shall be eligible to have Savings Contributions made on his behalf
as of the Entrance Date concurrent with or next following the date on which
he (1) becomes a Participant in accordance with Plan Section 3.1, and (2)
has signed and returned all election forms as required by the Employer. If
the Employee has not submitted all election forms as of the Entrance Date
concurrent with or next following the date on which he becomes a
Participant, the Employee shall be eligible to have Savings Contributions
made on his behalf as of the payroll period concurrent with or next
following the date the Employee submits such election forms.
* * * * * * *
19
ARTICLE FOUR
------------
CONTRIBUTIONS
SECTION 4.1. SAVINGS CONTRIBUTIONS
(a) Subject to the provisions of Sections 4.1(d) and (f), each
Participant may elect that an amount, in any whole percentage of his
Compensation, not to exceed twenty percent (20%) of his Compensation, be
withheld from his Compensation and contributed by his Employer to the
Trust. The Plan Administrator may permit a Participant to make an election
under this Section through any written, electronic or telephonic means
authorized by the Committee. Such contributions shall be known as Savings
Contributions.
(b) A Participant who does not have an election to have Savings
Contributions made on his behalf in effect, or any Participant who would
like to amend his election, may make such election or amend such election,
effective as of the next following payroll period by filing an election
with the Plan Administrator within a reasonable time prior to commencement
of such payroll period. The Plan Administrator may permit a participant to
make an election under this Section through any written, electronic or
telephonic means authorized by the Committee. Any such election or
amendment of an election shall be effective only with respect to
Compensation payable after the Plan Administrator receives such election.
(c) Savings Contributions shall be effected by payroll deductions for
each pay period of the electing Participant commencing after the effective
date of his election and shall be paid over to the Trustee no later than
the fifteenth (15th) business day of the month following the month of such
payroll deduction.
(d) No Employee shall be permitted to have Savings Contributions made
under this Plan during any Plan Year which exceed the statutory dollar
limitation under Code Section 402(g) for the taxable year of the
Participant, as adjusted annually by the Secretary of the Treasury ($10,000
for 1999). In computing this limitation, a Participant shall include any
Elective Deferrals under other retirement arrangements. For this purpose,
"Elective Deferrals" means, for any taxable year, the sum of:
(i) any Employer contribution under a qualified cash or deferred
arrangement defined in Code Section 401(k), to the extent not
includable in gross income for the taxable year under Code Section
402(e)(3), determined without regard to the dollar limitation under
Code Section 402(g);
(ii) any Employer contribution under a simplified employee
pension as defined in Code Section 408(k)(6), pursuant to a salary
reduction agreement;
(iii) any Employer contribution toward the purchase of a tax
sheltered annuity contract as defined in Code Section 403(b), pursuant
to a salary reduction agreement; and
20
(iv) effective January 1, 1998, any Employer contribution under a
SIMPLE Plan pursuant to Code Section 408(p)(2)
If the statutory dollar limitation under Code Section 402(g) is
exceeded, the Committee shall direct the Trustee to distribute the Excess
Elective Deferrals (defined below), and any income or loss allocable to
such Excess Elective Deferrals, to the Participant not later than the first
April 15 following the close of the Participant's taxable year. The amount
of Excess Elective Deferrals to be distributed to an Employee for a taxable
year will be reduced by Excess Contributions previously distributed or
recharacterized for the Plan Year beginning in the taxable year of the
Employee. The term "Excess Elective Deferrals" means those Elective
Deferrals that are includable in a Participant's gross income under Code
Section 402(g) to the extent the Participant's Elective Deferrals for a
taxable year exceed the dollar limitation under Code Section 402(g). Excess
Elective Deferrals under this Plan shall be treated as Annual Additions
under the Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
If a Participant is also a Participant in (i) another qualified cash
or deferred arrangement defined in Code Section 401(k); (ii) a simplified
employee pension defined in Code Section 408(k); (iii) a salary reduction
arrangement pursuant to which an employer purchases a tax sheltered annuity
contract defined in Code Section 403(b) or (iv) a SIMPLE Plan defined in
Code Section 408(p), and the Elective Deferrals made under the other
arrangement(s) and this Plan cumulatively exceed the amount of the dollar
limitation under Code Section 402(g) in effect on January 1 of each
calendar year, as adjusted annually by the Secretary of the Treasury
($10,000 for 1999), then the Participant may, not later than March 1
following the close of the Participant's taxable year, notify the
Administrator in writing of the excess and request that the Participant's
Savings Contributions under this Plan be reduced by an amount specified by
the Participant. The specified amount then shall be distributed in the same
manner as provided in the preceding paragraph. A Participant is deemed to
notify the Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferrals made to this Plan and any
other plans of this Employer.
(e) LIMITATIONS ON SAVINGS CONTRIBUTIONS.
(i) ACTUAL DEFERRAL PERCENTAGE TEST. The annual allocation
derived from Savings Contributions to a Participant's Savings Account
shall satisfy one of the following tests:
(A) The Average Actual Deferral Percentage for Participants
who are Eligible Highly Compensated Employees for the Plan Year
shall not exceed the Average Actual Deferral Percentage for
Participants who are Eligible Non-Highly Compensated Employees
for the current Plan Year multiplied by 1.25; or
21
(B) The Average Actual Deferral Percentage for Participants
who are Eligible Highly Compensated Employees for the Plan Year
shall not exceed the Average Actual Deferral Percentage for
Participants who are Eligible Non-Highly Compensated Employees
for the current Plan Year multiplied by two (2); provided that
the Average Actual Deferral Percentage for Participants who are
Eligible Highly Compensated Employees for the Plan Year does not
exceed the Average Actual Deferral Percentage for Participants
who are Eligible Non-Highly Compensated Employees for the current
Plan Year by more than two (2) percentage points or the amount as
may be prescribed in applicable Treasury regulations to prevent
the multiple use of this alternative limitation for any Highly
Compensated Employee.
(ii) DEFINITIONS. For the purposes of this Section, the following
definitions shall apply:
(A) ACTUAL DEFERRAL PERCENTAGE means the ratio, expressed as
a percentage, of (i) the amount of Savings Contributions actually
paid to the Trust Fund on behalf of the Eligible Participant for
the Plan Year to (ii) the Eligible Participant's Compensation for
the Plan Year, whether or not the Employee was a Participant for
the entire Plan Year. Savings Contributions on behalf of any
Participant shall include: (i) any Savings Contributions,
(including Excess Elective Deferrals of Highly Compensated
Employees), but excluding (1) Excess Elective Deferrals of
Non-Highly Compensated Employees that arise solely from Savings
Contributions made under this plan or plans of this Employer, and
(2) Savings Contributions that are taken into account in the
Contribution Percentage Test (provided the Actual Deferral
Percentage Test is satisfied both with and without exclusion of
these Savings Contributions); and (ii) at the election of the
Employer, Qualified Non-Elective Contributions and Qualified
Matching Contributions. A Savings Contribution will be taken into
account under the Actual Deferral Percentage Test for a Plan Year
only if it relates to compensation that either would have been
received by the Employee in the Plan Year, but for the deferral
election, or is attributable to services performed by the
Employee in the Plan Year and would have been received by the
Employee within two and one-half (2-1/2) months after the close
of the Plan Year, but for the deferral election. To compute
Actual Deferral Percentages, an Employee who would be a
Participant but for the failure to make Savings Contributions
shall be treated as a Participant on whose behalf no Savings
Contributions are made.
(B) AVERAGE ACTUAL DEFERRAL PERCENTAGE means the average,
expressed as a percentage, of the Actual Deferral Percentages of
the Eligible Participants in a group.
(C) Eligible Participant means any Employee of the Employer
who is directly or indirectly eligible under the Plan to have
Savings Contributions (or Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as Savings
Contributions for the Actual Deferral Percentage Test) allocated
22
to his or her Savings Account for all or any portion of the Plan
Year. Eligible Participant includes an Employee whose eligibility
to make Savings Contributions has been suspended because of an
election (other than certain one-time elections) not to
participate, a distribution, or a loan; and an Employee who
cannot defer because of Code Section 415 limitations.
(D) QUALIFIED NON-ELECTIVE CONTRIBUTIONS means Employer
Contributions, other than Savings Contributions and Matching
Contributions, allocated to Participants' accounts which are 100%
Nonforfeitable at all times and which are subject to the
distribution restrictions described in Section 4.1(g). Employer
Contributions are not 100% nonforfeitable at all times if the
Employee has a 100% nonforfeitable interest because of Years of
Service taken into account under a vesting schedule. Any Employer
Contributions allocated to a Participant's Savings Account under
the Plan automatically satisfy the definition of Qualified
Non-Elective Contributions.
(E) QUALIFIED MATCHING CONTRIBUTIONS means Matching Employer
Contributions allocated to Participants' accounts which are 100%
nonforfeitable at all times and which are subject to the
distribution restrictions described in Section 4.1(g). Matching
Contributions are not 100% nonforfeitable at all times if the
Employee has a 100% nonforfeitable interest because of Years of
Service taken into account under a vesting schedule. Any Matching
Contributions allocated to a Participant's Savings Account under
the Plan automatically satisfy the definition of Qualified
Matching Contributions.
(iii) SPECIAL RULES.
(A) For purposes of this Section, the Actual Deferral
Percentage for any Participant who is a Highly Compensated
Employee for the Plan Year who is eligible to have Savings
Contributions (or Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as Savings
Contributions for the Actual Deferral Percentage Test) allocated
to his or her account under two (2) or more plans or arrangements
described in Code Section 401(k) that are maintained by the
Employer or a Related Employer shall be determined as if all
Savings Contributions (and, if applicable, Qualified Non-Elective
Contributions or Qualified Matching Contribution, or both) were
made under a single arrangement. If a Highly Compensated Employee
participates in two (2) or more cash or deferred arrangements
that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as
a single arrangement. Notwithstanding the foregoing, certain
plans shall be treated as separate if mandatorily disaggregated
under applicable Treasury regulations pursuant to Code Section
401(k).
23
(B) If this Plan satisfies the requirements of Code Sections
401(k), 401(a)(4) or 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the
requirements of the Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the
Actual Deferral Percentage of Employees as if all such plans were
a single plan. Plans may be aggregated to satisfy Code Section
401(k) only if they have the same Plan Year.
(C) To determine the Actual Deferral Percentage Test,
Savings Contributions, Qualified Non-Elective Contributions, and
Qualified Matching Contributions must be made before the last day
of the twelve (12) month period immediately following the Plan
Year to which contributions relate.
(D) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage Test
and the amount of Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, used in the test.
(E) The determination and treatment of the Actual Deferral
Percentage amounts of any Participant shall satisfy other
requirements prescribed by applicable Treasury regulations.
(iv) FAIL-SAFE PROVISIONS. If the initial allocations of the
Savings Contributions do not satisfy one of the tests set forth in
paragraph (i) of this Subsection, the Administrator shall adjust the
accounts of the Participants pursuant to one (1) or more of the
following options:
(A) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Committee
determines that the initial allocations of the Savings
Contributions do not satisfy one of the Actual Deferral
Percentage Tests set forth in paragraph (i) of this Subsection,
the Administrator must distribute the Excess Contributions, as
adjusted for allocable income, during the next Plan Year.
However, the Employer will incur an excise tax equal to 10% of
the amount of Excess Contributions for a Plan Year not
distributed to the appropriate Highly Compensated Employees
during the first 2-1/2 months of the next Plan Year. The Excess
Contributions are the amount of Savings Contributions made at the
election of the Highly Compensated Employees which causes the
Plan to fail to satisfy the Actual Deferral Percentage Test. The
Administrator shall make distributions to each Highly Compensated
Employee of his or her respective share of the Excess
Contributions pursuant to the following steps:
(1) The Administrator shall calculate total Excess
Contributions for the Highly Compensated Employees.
(2) The Administrator shall calculate the total dollar
amount by which the Excess Contributions for the Highly
Compensated Employees must be reduced in order to satisfy
the Average Deferral Percentage Test.
24
(3) The Administrator shall calculate the total dollar
amount of the Excess Contributions for each Highly
Compensated Employee.
(4) The Administrator shall reduce the Excess
Contributions of the Highly Compensated Employee(s) with the
highest dollar amount of Excess Contributions by refunding
such contributions to such Highly Compensated Employee(s) in
the amount required to cause the dollar amount of such
Highly Compensated Employee(s)' Savings Contributions to
equal the dollar amount of the Savings Contributions of the
Highly Compensated Employee(s) with the next highest dollar
amount of Savings Contributions.
(5) If the total dollar amount distributed pursuant to
Step (4) above is less than the total dollar amount of
Excess Contributions, Step (4) shall be applied to the
Highly Compensated Employee(s) with the next highest dollar
amount of Excess Contributions until the total amount of
distributed Excess Contributions equals the total dollar
amount calculated in Step (2).
(6) When calculating the amount of a distribution under
Step (4), if a lesser reduction, when added to any amounts
already distributed under this Section, would equal the
total amount of distributions necessary to permit the Plan
to satisfy the requirements of paragraph (i) of this
Subsection, the lesser amount shall be distributed from the
Plan.
(B) ALLOCABLE INCOME. To determine the amount of the
corrective distribution required under this Section, the
Administrator must calculate the allocable income for the Plan
Year in which the Excess Contributions arose. The income
allocable to Excess Contributions is equal to the sum of the
allocable gain or loss for the Plan Year.
(1) METHOD OF ALLOCATING INCOME. The Administrator may
use any reasonable method for computing the income allocable
to Excess Contributions, provided that the method does not
violate Code Section 401(a)(4), is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for
allocating income to Participants' Accounts.
25
(2) ALTERNATIVE METHOD OF ALLOCATING INCOME. A Plan may
allocate income to Excess Contributions by multiplying the
income for the Plan Year allocable to Savings Contributions
and amounts treated as Savings Contributions by a fraction.
The numerator of the fraction is the Excess Contributions
for the Employee for the Plan Year. The denominator of the
fraction is equal to the sum of:
(a) The total account balance of the Employee
attributable to Savings Contributions and amounts
treated as Savings Contributions as of the beginning of
the Plan Year; plus
(b) The Employee's Savings Contributions, and
amounts treated as Savings Contributions for the Plan
Year.
(C) RECHARACTERIZATION OF MATCHING CONTRIBUTIONS. A
portion of the Employer's Matching Contribution shall be
deemed a Savings Contribution for purposes of paragraph (i)
of this Subsection and for vesting and withdrawal purposes.
The portion shall be equal to an amount necessary to satisfy
one of the tests set forth in paragraph (i) of this
Subsection, taking into account the Administrator's action
under any option herein and shall be reallocated to the
Savings Account. Reallocation of the Employer's Matching
Contribution shall be made on behalf of Participants who are
Non-Highly Compensated Employees.
(D) QUALIFIED NON-ELECTIVE AND QUALIFIED MATCHING
CONTRIBUTIONS. The Employer shall make Qualified
Non-Elective Contributions or Qualified Matching
Contributions on behalf of Participants who are Non-Highly
Compensated Employees in an amount sufficient to satisfy one
of the tests set forth in paragraph (i) of this Subsection,
taking into account the Administrator's action under any
option herein. These contributions shall be made in the
minimum amount of dollars required to satisfy the
requirements of paragraph (i) of this Subsection and shall
be allocated first to the lowest-paid such Participant,
subject to Section 5.6, and then to the next lowest-paid
Participant, subject to Section 5.6, and thereafter in like
manner in ascending order until the limitations of paragraph
(i) are met. Such additional contributions shall be fully
vested and subject to the distribution restrictions of
Section 4.1(g) hereof, and must be made prior to the last
day of the twelve month period immediately following the
Year to which they relate.
The Qualified Non-Elective and Qualified Matching
Contributions may be treated as Savings Contributions
provided that each of the following requirements, to the
extent applicable, is satisfied:
(1) The amount of Employer Contributions,
including those Qualified Non-Elective Contributions
treated as Savings Contributions for purposes of the
Actual Deferral Percentage Test, satisfies the
requirements of Code Section 401(a)(4).
26
(2) The amount of Employer Contributions,
excluding those Qualified Non-Elective Contributions
treated as Savings Contributions for purposes of the
Actual Deferral Percentage Test and those Qualified
Non-Elective Contributions treated as Matching
Contributions under Treasury Regulations Section
1.401(m)-1(b)(5) for purposes of the Average
Contribution Percentage Test, satisfies the
requirements of Code Section 401(a)(4).
(3) The Matching Contributions, including those
Qualified Matching Contributions treated as Savings
Contributions for purposes of the Actual Deferral
Percentage Test, satisfy the requirements of Code
Section 401(a)(4).
(4) The Matching Contributions, excluding those
Qualified Matching Contributions treated as Savings
Contributions for purposes of the Actual Deferral
Percentage Test, satisfy the requirements of Code
Section 401(a)(4).
(5) The Qualified Non-Elective Contributions and
Qualified Matching Contributions satisfy the
requirements of Treasury Regulations Section
1.401(k)-1(b)(4)(i) for the Plan Year as if the
contributions were Savings Contributions.
(6) The plan that includes the cash or deferred
arrangement and the plan or plans to which the
Qualified Non-Elective Contributions and Qualified
Matching Contributions are made could be aggregated for
purposes of Code Section 410(b).
(f) WRAP-PLAN PROVISIONS. Savings Contributions elected by
Participants who are Highly Compensated Employees may be prospectively
limited by the Committee without the Participant's consent if necessary to
meet the limits of Section 4.1(e). Any Participant in this Plan who is both
a Highly Compensated Employee and a Participant for the Plan Year in the
FFE Transportation Services, Inc. 401(k) Wrap Plan ("Highly Compensated
Wrap Plan Participant") may not elect to have Savings Contributions made on
his behalf by payroll deductions under this Plan during such Plan Year. In
lieu of Savings Contributions effected by payroll deductions on behalf of
any Highly Compensated Wrap Plan Participant, as soon as administratively
feasible after the end of a Plan Year, but in no event later than 2-1/2
months following the end of that Plan Year, the Committee shall permit the
transfer to the Plan of all the Nonqualified Savings Contributions credited
to the Nonqualified Savings Account of each Highly Compensated Wrap Plan
Participant in the FFE Transportation Services Inc, 401(k) Wrap Plan, but
in no event shall an amount be transferred that would cause this Plan to
exceed the limitations of Code Section 401(k)(3) set forth in Plan Section
4.1(e) for such Plan Year. In determining the permitted transfer amounts,
the Employers may authorize a Qualified Non-Elective Contribution or
Qualified Matching Contribution to be made for such year, and allocated as
provided in Section 4.1(e)(iv)(C).
27
(g) RESTRICTIONS ON DISTRIBUTIONS. Subject to the following
limitations, amounts held in the Participant's Savings Account may not be
distributable prior to the earliest of:
(i) separation from Service, total and permanent disability or
death;
(ii) attainment of age fifty-nine and one-half (59-1/2) years;
(iii) Plan termination without establishment of another defined
contribution plan, other than an employee stock ownership plan (as
defined in Code Sections 4975(e) or 409) or a simplified employee
pension plan as defined in Code Section 408(k);
(iv) disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Code Section
409(d)(2)) used in a trade or business of the corporation, if the
corporation continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment with the
corporation acquiring the assets;
(v) disposition by a corporation to an unrelated entity of the
corporation's interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) if the corporation continues to maintain this Plan,
but only with respect to Employees who continue employment with the
subsidiary; or
(vi) proven financial hardship, subject to the limitations set
forth in Article 10.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and
Participant consent requirements, if applicable, of Code Sections
401(a)(11) and 417. In addition, distributions that are triggered by
one of the preceding events enumerated as (iii), (iv), (v), or (vi)
must be made in a lump sum distribution.
SECTION 4.2. EMPLOYER CONTRIBUTIONS.
(a) MATCHING EMPLOYER CONTRIBUTIONS. In addition to the total amount
of Savings Contributions elected for each month pursuant to Section 4.1,
but subject to the limits of Section 4.2(c), each Employer shall, as a
Matching Employer Contribution to the Plan, pay to the Trustee for each
calendar quarter an amount equal to 100% of each Participant's Savings
Contributions for each payroll period pursuant to Section 4.1 hereof which
does not exceed four percent (4%) of his Compensation for such payroll
period.
(b) QUALIFIED NON-ELECTIVE CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS.
28
(i) GENERAL. The Employer may, in its discretion, make Qualified
Non-Elective Contributions and/or Qualified Matching Contributions to
the Plan from time to time. Any Qualified Non-Elective Contributions
made pursuant to this Section 4.2(b)(i) shall be treated as a Savings
Contribution for purposes of Section 4.1(e)(i) and shall be allocated
as provided in Section 4.1(e)(iv)(C). Any Qualified Matching
Contributions made pursuant to this Section shall be treated as a
Matching Employer Contribution for purposes of Section 4.2(c)(i) and
shall be allocated as provided in Section 4.2(c)(iv)(C).
(ii) INCENTIVE CONTRIBUTIONS. FFE Transportation Services, Inc.
shall make Qualified Non-Elective Contributions to the Plan as
provided pursuant to the terms of the FFE Transportation Services,
Inc. 1994 Incentive Bonus Plan. Contributions under this Section
4.2(b)(ii) shall be treated as Savings Contributions for purposes of
Plan Section 4.1(e)(i) and shall be contributed to the Plan on an
annual basis.
(c) LIMITATIONS ON MATCHING EMPLOYER CONTRIBUTIONS.
(i) AVERAGE CONTRIBUTION PERCENTAGE TEST. The annual allocation
derived from Matching Contributions and Qualified Matching
Contributions to a Participant's Individual Account shall satisfy one
of the following tests:
(A) The Average Contribution Percentage for Participants who
are Eligible Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for Participants
who are Eligible Non-Highly Compensated Employees for the current
Plan Year multiplied by 1.25; or
(B) The Average Contribution Percentage for Participants who
are Eligible Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for Participants
who are Eligible Non-Highly Compensated Employees for the current
Plan Year multiplied by two (2); provided that the Average
Contribution Percentage for Participants who are Eligible Highly
Compensated Employees for the Plan Year does not exceed the
Average Contribution Percentage for Participants who are Eligible
Non-Highly Compensated Employees for the current Plan Year by
more than two (2) percentage points or the amount prescribed in
applicable Treasury regulations to prevent the multiple use of
this alternative limitation for any Highly Compensated Employee.
(ii) DEFINITIONS.
(A) AGGREGATE LIMIT means the greater of (1) or (2),
described as follows:
(1) The sum of:
(a) 1.25 multiplied by the greater of the Actual
Deferral Percentage or the Average Contribution
Percentage for Participants who are Eligible Non-Highly
Compensated Employees, and
29
(b) Two (2) percentage points plus the lesser of
Actual Deferral Percentage or the Average Contribution
Percentage of Participants who are Eligible Non-Highly
Compensated Employees. (In no event shall this amount
exceed twice the lesser of the Actual Deferral
Percentage or Average Contribution Percentage of
Participants who are Eligible Non-Highly Compensated
Employees).
(2) The sum of:
(a) 1.25 multiplied by the lesser of the Actual
Deferral Percentage or the Average Contribution
Percentage of Participants who are Eligible Non-Highly
Compensated Employees, and
(b) Two (2) percentage points plus the greater of
Actual Deferral Percentage or the Average Contribution
Percentage of Participants who are Eligible Non-Highly
Compensated Employees. (In no event shall this amount
exceed twice the greater of the Actual Deferral
Percentage or Average Contribution Percentage of
Participants who are Eligible Non-Highly Compensated
Employees).
(B) AVERAGE CONTRIBUTION PERCENTAGE means the average,
expressed as a percentage, of the Contribution Percentages of the
Eligible Participants in a group.
(C) CONTRIBUTION PERCENTAGE means the ratio, expressed as a
percentage, of the sum of the Matching Contributions and
Qualified Matching Contributions, if any, under the Plan on
behalf of the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation for the Plan Year.
(D) CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the
Matching Contributions and Qualified Matching Contributions, to
the extent not taken into account for purposes of the Actual
Deferral Percentage Test, made under the Plan on behalf of the
Participant for the Plan Year. Contribution Percentage Amounts
shall include Forfeitures of Excess Aggregate Contributions or
Matching Contributions allocated to the Participant's Account
that shall be taken into account in the year in which the
Forfeiture is allocated. Notwithstanding the foregoing,
Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which
they relate are Excess Deferrals, Excess Contributions, or Excess
Aggregate Contributions. The Employer may include Qualified
Non-Elective Contributions in the Contribution Percentage
Amounts. The Employer also may elect to use Savings Contributions
in the Contribution Percentage Amount if the Actual Deferral
Percentage Test is met before the Savings Contributions are used
in the Average Contribution Percentage Test and continues to be
met following the exclusion of those Savings Contributions that
are used to meet the Average Contribution Percentage Test. In the
case of an Eligible Participant who makes no Savings
Contributions and receives no Matching Contributions, the
Contribution Percentage Amount shall be zero.
30
(E) ELIGIBLE PARTICIPANT means any Employee who is eligible
to make a Savings Contribution, if the Employer takes the
contributions into account in calculating the Contribution
Percentage, or to receive a Matching Contribution, including
Forfeitures, or a Qualified Matching Contribution.
(F) MATCHING CONTRIBUTION means an Employer Contribution
made to this or any other defined contribution plan on behalf of
a Participant on account of a Savings Contribution made by the
Participant, or on account of a Participant's election to defer a
portion of his or her Compensation under a plan maintained by the
Employer.
(G) QUALIFIED NON-ELECTIVE CONTRIBUTIONS means Employer
Contributions, other than Savings Contributions and Matching
Contributions, allocated to Participants' accounts which are 100%
nonforfeitable at all times and which are subject to the
distribution restrictions described in Section 4.1(g). Employer
Contributions are not 100% nonforfeitable at all times if the
Employee has a 100% nonforfeitable interest because of Years of
Service taken into account under a vesting schedule. Any Employer
Contributions allocated to a Participant's Savings Account under
the Plan automatically satisfy the definition of Qualified
Non-Elective Contributions.
(H) QUALIFIED MATCHING CONTRIBUTIONS means Matching Employer
Contributions allocated to Participants' accounts which are 100%
nonforfeitable at all times and which are subject to the
distribution restrictions described in Section 4.1(g). Matching
Contributions are not 100% nonforfeitable at all times if the
Employee has a 100% nonforfeitable interest because of Years of
Service taken into account under a vesting schedule. Any Matching
Contributions allocated to a Participant's Savings Account under
the Plan automatically satisfy the definition of Qualified
Matching Contributions.
(iii) SPECIAL RULES
(A) MULTIPLE USE. If one or more Highly Compensated
Employees participate in both a cash or deferred arrangement
subject to Code Section 401(k) and a plan maintained by the
Employer subject to Code Section 401(m) and the sum of the Actual
Deferral Percentage and Average Contribution Percentage of those
31
Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the Average Contribution
Percentage of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced in
the manner described in Section 4.1(e) so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amount is reduced shall be treated as an
Excess Aggregate Contribution. The Actual Deferral Percentage and
Average Contribution Percentage of the Highly Compensated
Employees are determined after:
(1) use of Qualified Non-Elective Contributions and
Qualified Matching Contributions to meet the Actual Deferral
Percentage Test;
(2) use of Qualified Non-Elective Contributions and
Elective Contributions to meet the Actual Deferral
Percentage Test;
(3) any corrective distribution or forfeiture of Excess
Deferrals, Excess Contributions or Excess Aggregate
Contributions; and
(4) after any recharacterization of Excess
Contributions required without regard to multiple use of the
alternative limitation;
and are deemed to be the maximum permitted under such tests for
the Plan Year.
Multiple use occurs if the Actual Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees
exceeds the Aggregate Limit. For purposes of this Section, the
"Aggregate Limit" is the greater of:
(1) the sum of (i) 1.25 times the greater of the
relevant actual deferral percentage or the relevant actual
contribution percentage, and (ii) two percentage points plus
the lesser of the relevant actual deferral percentage or the
relevant actual contribution percentage; provided, however,
that this amount may not exceed twice the lesser of the
relevant actual deferral percentage or the relevant actual
contribution percentage; or
(2) the sum of (i) 1.25 times the lesser of the
relevant actual deferral percentage or the relevant actual
contribution percentage, and (ii) two percentage points plus
the greater of the relevant actual deferral percentage or
the relevant actual contribution percentage; provided,
however, that this amount may not exceed twice the greater
of the relevant actual deferral percentage or the relevant
actual contribution percentage.
32
For purposes of the preceding sentence, the "relevant" actual
deferral percentage and actual contribution percentage is the
actual deferral percentage and actual contribution percentage of
the Non-Highly Compensated Employees.
(B) For purposes of this Section, the Contribution
Percentage for any Participant who is an Eligible Highly
Compensated Employee for the Plan Year who is eligible to have
Contribution Percentage Amounts allocated under two (2) or more
plans described in Code Section 401(a) or arrangements described
in Code Section 401(k) that are maintained by the Employer or a
Related Employer shall be determined as if the total of the
Contribution Percentage Amounts were made under each plan. If a
Highly Compensated Employee participates in two (2) or more cash
or deferred arrangements that have different plan years, all cash
or deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations pursuant to Code
Section 401(m).
(C) If this Plan satisfies the requirements of Code Sections
401(m), 401(a)(4) or 410(b) only if aggregated with one (1) or
more other plans, or if one (1) or more other plans satisfy the
requirements of the Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the
Contribution Percentages of Eligible Participants as if all such
plans were a single plan.
(D) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Average Contribution Percentage
Test.
(E) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy other requirements
prescribed by applicable Treasury regulations.
(iv) FAIL SAFE PROVISIONS. If the initial allocations of the
Matching Employer Contributions do not satisfy one of the tests set
forth in paragraph (i) of this Section, the Administrator shall adjust
the accounts of the Participants pursuant to one (1) or more of the
following options:
(A) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The
Administrator will determine Excess Aggregate Contributions after
determining Excess Elective Deferrals under Section 4.1(d) and
Excess Contributions under Section 4.1(e). If the Administrator
determines that the Plan fails to satisfy the Average
Contribution Percentage Test for a Plan Year, it must distribute
the Excess Aggregate Contributions, as adjusted for allocable
income, during the next Plan Year. However, the Employer will
33
incur an excise tax equal to 10% of the amount of Excess
Aggregate Contributions for a Plan Year not distributed to the
appropriate Highly Compensated Employees during the first 2-1/2
months of the next Plan Year. The Excess Aggregate Contributions
are the amount of aggregate contributions allocated on behalf of
the Highly Compensated Employees which causes the Plan to fail to
satisfy the Average Contribution Percentage Test. The
Administrator shall make distributions to each Highly Compensated
Employee of his or her respective share of the Excess Aggregate
Contributions in accordance with the following steps:
(1) The Administrator shall calculate total Excess
Aggregate Contributions for the Highly Compensated
Employees.
(2) The Administrator shall calculate the total dollar
amount by which the Excess Aggregate Contributions for the
Highly Compensated Employees must be reduced in order to
satisfy the Average Contribution Percentage Test.
(3) The Administrator shall calculate the total dollar
amount of the Excess Aggregate Contributions for each Highly
Compensated Employee.
(4) The Administrator shall reduce the Excess Aggregate
Contributions of the Highly Compensated Employee(s) with the
highest dollar amount of Excess Aggregate Contributions by
refunding such contributions to such Highly Compensated
Employee(s) in the amount required to cause the dollar
amount of such Highly Compensated Employee(s)' Matching
Employer Contributions to equal the dollar amount of the
Matching Employer Contributions of the Highly Compensated
Employee(s) with the next highest dollar amount of such
contributions.
(5) If the total dollar amount distributed pursuant to
Step (4) above is less than the total dollar amount of
Excess Aggregate Contributions, Step (4) shall be applied to
the Highly Compensated Employee(s) with the next highest
dollar amount of Excess Aggregate Contributions until the
total amount of distributed Excess Aggregate Contributions
equals the total dollar amount calculated in Step (2).
(6) When calculating the amount of a distribution under
Step (4), if a lesser reduction, when added to any amounts
already distributed under this Section, would equal the
total amount of distributions necessary to permit the Plan
to satisfy the requirements of Section 4.2(c)(i), the lesser
amount shall be distributed from the Plan.
34
(B) ALLOCABLE INCOME. To determine the amount of the
corrective distribution required under this Section, the
Administrator must calculate the allocable income for the Plan
Year in which the Excess Aggregate Contributions arose. The
income allocable to Excess Aggregate Contributions is equal to
the sum of the allocable gain or loss for the Plan Year.
(1) METHOD OF ALLOCATING INCOME. The Administrator may
use any reasonable method for computing the income allocable
to Excess Aggregate Contributions, provided that the method
does not violate Code Section 401(a)(4), is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used
by the Plan for allocating income to Participants' Accounts.
(2) ALTERNATIVE METHOD OF ALLOCATING INCOME. A Plan may
allocate income to Excess Aggregate Contributions by
multiplying the income for the Plan Year allocable to
Matching Contributions and amounts treated as Matching
Contributions by a fraction. The numerator of the fraction
is the Excess Aggregate Contributions for the Employee for
the Plan Year. The denominator of the fraction is equal to
the sum of:
(a) The total account balance of the Employee
attributable to Matching Contributions and amounts
treated as Matching Contributions as of the beginning
of the Plan Year; plus
(b) The Matching Contributions and amounts treated
as Matching Contributions for the Plan Year.
(C) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The
Administrator will treat a Highly Compensated Employee's
allocable share of Excess Aggregate Contributions in the
following priority: (i) first as attributable to his or her
Matching Contributions allocable with respect to Excess
Contributions determined under the Actual Deferral Percentage
Test described in Section 4.1(e); (ii) then on a pro rata basis
to Matching Contributions and to the Savings Contributions
relating to those Matching Contributions which the Administrator
has included in the Average Contribution Percentage Test; (iii)
then on a pro rata basis to Savings Contributions which are
mandatory contributions, if any, and to the Matching
Contributions allocated on the basis of those mandatory
contributions; and (iv) last to Qualified Non-Elective
Contributions used in the Average Contribution Percentage Test.
To the extent the Highly Compensated Employee's Excess Aggregate
Contributions are attributable to Matching Contributions, and he
or she is not 100% vested in the Account Balance attributable to
Matching Contributions, the Administrator will distribute only
the vested portion and forfeit the nonvested portion. The vested
portion of the Highly Compensated Employee's Excess Aggregate
Contributions attributable to Matching Employer Contributions is
the total amount of the Excess Aggregate Contributions (as
adjusted for allocable income) multiplied by his or her vested
percentage (determined as of the last day of the Plan Year for
which the Employer made the Matching Contribution).
35
(D) QUALIFIED NON-ELECTIVE AND QUALIFIED MATCHING
CONTRIBUTIONS. The Employer shall make Qualified Non-Elective
Contributions or Qualified Matching Contributions that, in
combination with Matching Contributions, satisfy one of the tests
set forth in paragraph (i) of this Subsection, taking into
account the Administrator's action under any option herein. Any
such contribution shall be treated as a Participant Savings
Contribution and shall be allocated to the Account of each
Participant. The total of these contributions shall be at least
equal to the amount necessary to satisfy the requirements of
paragraph (i) of this Subsection and shall be allocated first to
the lowest-paid such Participant, subject to Section 5.6, and
then to the next lowest-paid Participant, subject to Section 5.6,
and thereafter in like manner in ascending order until the
limitations of paragraph (i) are met. Such additional
contributions shall be fully vested and subject to the
distribution restrictions of Section 4.1(g) hereof, and must be
made prior to the last day of the twelve month period immediately
following the Year to which they relate. The Qualified
Non-Elective and Qualified Matching Contributions may be treated
as Matching Contributions provided that each of the following
requirements, to the extent applicable, is satisfied:
(1) The amount of Employer Contributions, including
those Qualified Non-Elective and Qualified Matching
Contributions treated as Matching Contributions for purposes
of the Average Contribution Percentage Test, satisfies the
requirements of Code Section 401(a)(4).
(2) The amount of Employer Contributions, excluding
those Qualified Non-Elective Contributions and Qualified
Matching treated as Matching Contributions for purposes of
the Average Contribution Percentage Test and those Qualified
Non-Elective Contributions treated as Elective and Qualified
Matching Contributions under Treasury Regulations Section
1.401(k)-1(b)(5) for purposes of the Actual Deferral
Percentage Test, satisfies the requirements of Code Section
401(a)(4).
(3) The Savings Contributions, including those treated
as Qualified Matching Contributions for purposes of the
Average Contribution Percentage Test, satisfy the
requirements of Code Section 401(k)(3) for the Plan Year.
36
(4) The Qualified Non-Elective and Qualified Matching
Contributions are allocated to the Employee under the Plan
as of a date within the Plan Year, and the Savings
Contributions satisfy the requirements of Treasury
Regulations Section 1.401(k)-1(b)(4)(i) for the Plan Year.
(5) The plan that takes Qualified Non-Elective
Contributions and Qualified Matching Contributions into
account in determining whether Savings and Matching
Contributions satisfy the requirements of Code Section
401(m)(2)(A), and the plans to which the Qualified
Non-Elective Contributions and Qualified Matching
Contributions are made, are or could be aggregated for
purposes of Code Section 410(b).
(E) FORFEITURE OF NON-VESTED MATCHING EMPLOYER
CONTRIBUTIONS. Matching Employer Contributions that are not
vested may be forfeited to correct Excess Aggregate
Contributions. Notwithstanding the foregoing sentence, Excess
Aggregate Contributions for a Plan Year may not remain
unallocated or be allocated to a suspense account for allocation
to one or more Employees in any future year. Forfeitures of
Matching Contributions to correct Excess Aggregate Contributions
shall be applied to reduce the Employers' Matching Employer
Contributions for the Plan Year in which the excess arose.
(d) Notwithstanding the foregoing provisions of this Section 4.2 the
Employer Contribution specified therein shall be limited by and in no event
shall exceed the following limits:
(i) The total amount deductible by such Employer under Code
Section 404; or
(ii) The maximum amount that may be allocated to a particular
Participant's Accounts under the annual additions limit of Section 5.6
(and, if applicable, Article 12).
SECTION 4.3. DISCRETIONARY EMPLOYER CONTRIBUTIONS. For each Plan Year, the
amount of the Discretionary Employer Contribution to the Trust Fund will equal
the amount, if any, the Employer may from time to time determine and authorize.
Although the Employer may contribute to this Plan whether or not it has net
profits, the Employer intends the Plan to be a profit sharing plan, including a
qualified cash or deferred arrangement, and an employee stock ownership plan,
for all purposes of the Code. The Employer shall not authorize contributions at
such times or in such amounts that the Plan in operation discriminates in favor
of Highly Compensated Employees. Notwithstanding the foregoing, the
Discretionary Employer Contribution for any Plan Year shall not exceed the
maximum amount allowable as a deduction to the Employer under Code Section 404.
The Discretionary Employer Contributions shall be allocated to the Participants'
Discretionary Employer Contribution Accounts under the formula provided in
Section 5.4.
SECTION 4.4. PAYMENT OF EMPLOYER CONTRIBUTIONS.
37
(a) Matching Employer Contributions shall be paid to the Trustee as
soon as administratively feasible following the payroll period to which
they relate. Notwithstanding the preceding sentence, Employer Contributions
shall be paid to the Trustee no later than the date prescribed by law for
filing such Employer's federal income tax return for its taxable year
ending with or within the Plan Year for which such contribution is made,
including extensions which have been granted for the filing of such tax
return. The Trustee shall hold all such Employer Contributions subject to
the provisions of the Plan and Trust Agreement, and no part of such
contributions shall be used for, or diverted to, any purpose other than
those specified in the Plan and Trust Agreement.
(b) Notwithstanding anything to the contrary contained herein, an
Employer Contribution for a Plan Year may be returned to the Employer to
the extent that the amount of such contribution exceeds the amount that
such Employer would have contributed for such Plan Year but for (i) a good
faith mistake of fact made in determining the amount of such contribution
or (ii) a good faith mistake in determining that the contribution made
would be deductible under Code Section 404.
The return of a portion of an Employer Contribution shall be subject
to the following conditions: (i) earnings attributable to the amount to be
returned may not be distributed to the Employer but losses attributable
thereto must reduce the amount to be returned; (ii) the amount to be
returned shall be limited so as to avoid reducing the balance in the
Participant's Discretionary Employer Contribution Account and Matching
Employer Contribution Account to less than the balance which would have
been in such account if the amount attributable to such mistake had not
been contributed; (iii) the return of an amount attributable to a mistake
of fact may only be made within one year after such amount was paid to the
Trustee; and (iv) the return of an amount attributable to a mistake in
determining such deductibility may only be made within one year after the
disallowance of such deduction. Except as provided in the preceding
sentence, an appropriate adjustment shall be made in the Participant's
Discretionary Employer Contribution Account and Matching Employer
Contribution Account, if any, to reflect the return of a portion of an
Employer Contribution.
SECTION 4.5. ROLLOVER CONTRIBUTIONS.
(a) Upon approval by the Committee, an Employee who has received an
eligible rollover distribution, as defined in Code Section 402(c)(4) may
contribute such eligible rollover distribution to a Rollover Account under
the Plan. An Employee may also transfer to a Rollover Account under the
Plan (upon Committee approval) an eligible rollover distribution from an
individual retirement account or from an individual retirement annuity, but
only if such distribution or proceeds qualify for tax-free rollovers under
Code Section 408(d)(3)(A)(ii). In addition, the Plan will accept (upon
Committee approval) direct trustee-to-trustee transfers from another
qualified plan or a Code Section 403(b) annuity and will account for such
transfers separately from any other Rollover Account. Notwithstanding the
foregoing, in no event shall an eligible rollover distribution be
contributed to an ESOP Account under the Plan.
38
(b) Any contribution under this Section 4.5 shall be treated as the
contribution of a "Rollover Amount" and, except in the case of
trustee-to-trustee transfers, shall be subject to the following
requirements and conditions:
(i) The Employee must transfer the Rollover Amount or cause to be
transferred such amount to the Committee for delivery to the Trustee
or, if the Committee directs, to the Trustee, in time for the Trustee
to receive such amount on or before the 60th day after the day on
which such amount was received by the Employee.
(ii) The Employee must furnish such evidence as the Committee may
require that such Rollover Amount includes all of (and does not
include anything other than) the amount required to be transferred by
Code Section 402(c)(4) or 408(d)(3)(A)(ii), as appropriate.
(c) The Committee shall not deliver or cause the delivery of any
Rollover Amount to the Trustee prior to its receipt of such evidence as may
be required by it pursuant to Section 4.5(b) and, except in the case of
trustee-to-trustee transfers, shall not deliver or cause the delivery of
any Rollover Amount to the Trustee if such Rollover Amount would not be
received by the Trustee on or before the 60th day after the day on which
such amount was received by the Employee who wishes to transfer such amount
to the Plan.
(d) An Employee shall be eligible to transfer amounts to a Rollover
Account pursuant to this Section 4.5 notwithstanding the provisions of
Article 3 hereof.
(e) An Employee who establishes and maintains a Rollover Account or
Accounts shall be deemed to be a Participant under the Plan notwithstanding
the provisions of Article 3, but no such Employee shall be entitled to
share in any Employer Contributions or elect Savings Contributions unless
he is otherwise participating under Article 3.
(f) Fees and expenses of the Trustee attributable to the maintenance
of Rollover Accounts shall be paid as provided in Section 16.7.
(g) Articles 6, 8, and 11 shall govern the time and method of payment
from an Employee's Rollover Accounts.
SECTION 4.6. SPECIAL RULES UNDER USERRA. Effective as of December 12, 1994,
notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
* * * * * * *
39
ARTICLE FIVE
------------
ALLOCATIONS
SECTION 5.1. ACCOUNTS. The Committee shall maintain or cause to be
maintained adequate records to disclose the interest in the Trust of each
Participant, Former Participant, and Beneficiary. Such records shall be in the
form of individual accounts, and credits and charges shall be made to such
accounts in the manner herein described. When appropriate, a Participant shall
have, as separate accounts, a Matching Employer Contribution Account, a
Discretionary Employer Contribution Account, a Rollover Account, a Savings
Account, a W & B Plan Rollover Account, an ESOP Transfer Account, and an ESOP
Rollover Account. The maintenance of separate accounts is only for accounting
purposes, and a segregation of the Trust Assets to each account shall not be
required. Each Account shall reflect its allocable share of income, loss,
appreciation, and depreciation of the Trust Assets. Distributions made from an
Account shall be charged to such Account as of the Valuation Date on which the
distribution is made.
SECTION 5.2. ALLOCATION OF INCOME AND EXPENSE.
(a) Except as otherwise provided in Section 7.3(a), income of the
Trust Assets shall be allocated as of each Valuation Date to the Accounts
that generated such income.
(b) Except as otherwise provided by Sections 7.3(b) and 16.7, expenses
paid from the Trust Assets and not reimbursed by an Employer shall be
allocated as of each Valuation Date to the Accounts of Participants, Former
Participants and Beneficiaries who had undistributed balances in their
Accounts on such last preceding Valuation Date in proportion to the
balances in such Accounts on such date, but after first reducing each such
account balance by any distributions from the account since such last
preceding Valuation Date.
(c) Dividends Credited to ESOP Accounts. Upon instruction from the
Committee, the Trustee shall distribute to each Participant with an ESOP
Account, in cash, all or a portion of the dividends paid to the Plan with
respect to Company Stock held by the Plan and allocated to ESOP Accounts,
within ninety (90) days after the close of the Plan Year in which such
dividends are paid. The dividends, if distributed in accordance with this
Section, shall be paid out as if each Participant directly owned the
numbers of shares of Company Stock allocated to the Participant's ESOP
Accounts (including fractional shares so allocated), as of the Accounting
Date corresponding with, or if none, next following the record date for
such dividend declaration. Such dividend payments shall not be considered
to be distributions under the Plan.
SECTION 5.3. ALLOCATION OF SAVINGS CONTRIBUTIONS. Savings Contributions
elected by a Participant during any calendar month shall be credited and
allocated to his Savings Account no later than the last day of the following
calendar month.
40
SECTION 5.4. ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(a) MATCHING EMPLOYER CONTRIBUTIONS. Each Participant who is a
Participant during a payroll period is entitled to share in the Matching
Employer Contribution for such payroll period. Subject to Section 5.6, the
Committee shall instruct the Trustee to allocate the portion of the
Matching Employer Contribution for each payroll period to the Matching
Employer Contribution Account of each Participant or Former Participant for
whom Savings Contributions were made during such payroll period pursuant to
Section 4.2(a).
(b) DISCRETIONARY EMPLOYER CONTRIBUTIONS. Each Participant who is
employed on the last business day of the Plan Year is entitled to share in
the allocation of Discretionary Employer Contributions, if any, for such
Plan Year. The Committee shall allocate the Discretionary Employer
Contributions, if any, to each eligible Participant's Discretionary
Employer Contribution Account in the same ratio that each Participant's
Annual Compensation for the Plan Year bears to the total Annual
Compensation of all Participants for such Plan Year. Notwithstanding the
preceding, a Former Participant who would have been a Participant on the
last business day of the Plan Year but for his death, Disability, Early
Retirement, or Retirement during the Plan Year shall be entitled to share
in the allocation of the Discretionary Contributions, if any, for such Plan
Year.
(c) QUALIFIED NON-ELECTIVE CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS. Each Participant who is a Non-Highly Compensated Employee
and who is a Participant on the last business day of the Plan Year and each
Former Participant who is a Non-Highly Compensated Employee and who would
have been a Participant on the last business day of the Plan Year but for
his death, Disability, Early Retirement, or Retirement during the Plan
Year, is entitled to share in the allocation of Qualified Non-Elective
Contributions and/or Qualified Matching Contributions, if any, for such
Plan Year. Such contributions shall be allocated pursuant to the provisions
of Section 4.2(b)(i).
(d) INCENTIVE CONTRIBUTIONS. Each Participant who is entitled to
receive an allocation of Incentive Contributions under the terms of the FFE
Transportation Services, Inc. 1994 Incentive Bonus Plan (the "Incentive
Plan") shall receive an allocation of such amounts under this Plan. The
Committee shall allocate the Incentive Contributions, if any, to each
eligible Participant's Savings Account in the manner provided by the terms
of the Incentive Plan.
SECTION 5.5. FORFEITURES. Amounts forfeited pursuant to Sections 5.6 or 6.3
shall be used to pay Plan expenses in the Plan Year in which they are forfeited.
To the extent such Forfeitures exceed Plan expenses in such Plan Year, they
shall be used to reduce the Matching Employer Contributions to the Plan under
Section 4.2(a) during the subsequent Plan Year, unless the Employer directs that
such Forfeitures are to be used to reduce the Matching Employer Contributions to
the Plan under Section 4.2(a) during the Plan Year in which they are forfeited.
41
SECTION 5.6. MAXIMUM ADDITIONS.
(a) DEFINED CONTRIBUTION PLAN LIMITS. The amount of Annual Additions
that the Committee may allocate under this Plan on a Participant's behalf
for a Limitation Year may not exceed the Maximum Permissible Amount. If the
amount the Employer otherwise would contribute to the Participant's Account
would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the Employer will reduce the amount of its
contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer Contributions
pursuant to Section 5.4 would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 5.6(c))
to the Participant's Account, the Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer Contributions for the Plan Year in which the Limitation Year ends.
The Committee will make this reallocation on the basis of the allocation
method under the Plan as if the Participant whose Individual Account
otherwise would receive the Excess Amount is not eligible for an allocation
of Employer Contributions.
(b) ESTIMATION. Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated Compensation
defined in Section 5.6(e) for the Limitation Year. The Committee must make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Committee must reduce any Employer Contributions
(including any allocation of Forfeitures) based on estimated Compensation
by any Excess Amounts carried over from prior years. As soon as
administratively feasible after the end of the Limitation Year, the
Committee will determine the Maximum Permissible Amount for the Limitation
Year based on the Participant's actual Compensation for the Limitation
Year.
(c) DISPOSITION OF EXCESS AMOUNT. If, pursuant to Section 5.6(b) or
because of an allocation of Forfeitures, there is an Excess Amount
attributable to a Participant for a Limitation Year, then the Committee
will dispose of the Excess Amount as follows:
(i) The Committee shall return any nondeductible Participant
voluntary after tax contributions to the Participant to the extent
that the return would reduce the Excess Amount.
(ii) If, after the application of clause (i) an Excess Amount
still exists, and the Plan covers the Participant at the end of the
Limitation Year, then the Committee will use the Excess Amounts to
reduce future Employer Contributions (including any allocation of
Forfeitures) under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the Participant. The
Participant may elect to limit Compensation for allocation purposes to
the extent necessary to reduce the allocation for the Limitation Year
to the Maximum Permissible Amount and eliminate the Excess Amount.
42
(iii) If, after the application of clause (i) an Excess Amount
still exists and the Plan does not cover the Participant at the end of
the Limitation Year, then the Committee shall hold the Excess Amount
in a suspense account and use the Excess Amount to reduce Employer
Contributions on behalf of remaining Participants and shall allocate
and reallocate to the Individual Accounts of remaining Participants in
succeeding Limitation Years to the extent permissible under the
foregoing limitations, prior to any further Annual Additions to the
Plan. If the Plan should be terminated or contributions should be
completely discontinued, the funds in the suspense account will be
allocated to the extent not prohibited by Code Section 415. Any
suspense account shall not be adjusted for investment gains or losses
of the Trust Fund.
(iv) The Committee will not distribute any Excess Amount(s) to
Participants or to Former Participants.
(v) Notwithstanding the first sentence and the foregoing
paragraphs (i), (ii), (iii), and (iv), the Committee may distribute
Elective Deferrals (within the meaning of Code Section 402(g)(3)) or
return voluntary or mandatory Employee Contributions, to the extent
the distribution or return would reduce the excess amounts in the
Participant's account.
(d) MULTIPLE DEFINED CONTRIBUTION PLAN LIMITS. If the Employer
maintains any other qualified defined contribution plan, the amount of the
Annual Addition which may be allocated to a Participant's Individual
Account in this Plan shall not exceed the Maximum Permissible Amount,
reduced by the amount of Annual Additions to such Participant's accounts
for the same Limitation Year in the other plan(s). The Excess Amount
attributed to this Plan equals the product of:
(i) the total Excess Amount allocated as of such date (including
any amount the Committee would have allocated but for the limitations
of Code Section 415), multiplied by
(ii) the ratio of:
(A) the amount allocated to the Participant as of such date
under this Plan, divided by
(B) the total amount allocated as of such date under all
qualified defined contribution plans (determined without regard
to the limitations of Code Section 415).
(e) DEFINITIONS. For purposes of the limitations of Code Section 415
set forth in this Section, the following definitions shall apply:
(i) ANNUAL ADDITIONS means the sum of the following amounts
allocated on behalf of a Participant for a Limitation Year:
(A) all Employer Contributions;
43
(B) all Forfeitures;
(C) all Employee Contributions;
(D) excess contributions described in Code Section 401(k)
and excess aggregate contributions described in Code Section
401(m), irrespective of whether the Plan distributes or forfeits
such Excess Amounts, and excess deferrals described in Code
Section 402(g), unless the excess deferrals are distributed no
later than the first April 15 following the close of the
Participant's taxable year;
(E) Excess Amounts reapplied to reduce Employer
Contributions under this Section 5.6;
(F) amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code Section 415(l)(2), included
as part of a pension or annuity plan maintained by the Employer;
(G) contributions paid or accrued after December 31, 1985,
in taxable years ending after that date, which are attributable
to post-retirement medical benefits allocated to the separate
account of a Key Employee as defined in Code Section 419A(d)(3),
under a welfare benefit fund, as described in Code Section
419(e), maintained by the Employer; and
(H) allocations under a simplified employee pension plan.
(ii) COMPENSATION means the total amount of salary, wages,
commissions, bonuses and overtime, paid or otherwise includable in the
gross income of a Participant during the Limitation Year plus,
effective January 1, 1998, any amounts excluded from income pursuant
to Code Sections 125 and 401(k), but excluding:
(A) Employer contributions to any deferred compensation plan
(to the extent the contributions are not included in the
Participant's gross income for the taxable year in which
contributed) or simplified employee pension under Code Section
408(k) (to the extent the contributions are excludable from the
Participant's gross income) (effective January 1, 1998, other
than any amounts excluded from income pursuant to Code Section
401(k));
(B) distributions from any plan of deferred compensation,
whether or not such amounts are includable in the gross income of
the Employees when distributed;
(C) amounts realized from the exercise of any nonqualified
stock option, or when restricted stock becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
44
(D) amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option
described in Part II, Subchapter D, Chapter 1 of the Code;
(E) premiums paid by the Employer for group term life
insurance (to the extent the premiums are not includable in the
Participant's gross income); contributions by the Employer to an
annuity under Code Section 403(b) (to the extent not includable
in the Participant's gross income); and any other amounts
received under any Employer sponsored fringe benefit plan (to the
extent not includable in the Participant's gross income);
(F) any contribution for medical benefits, within the
meaning of Code Section 419A(f)(2), after separation from Service
which is otherwise treated as an Annual Addition; and
(G) any amount otherwise treated as an Annual Addition under
Code Section 415(l)(1).
(iii) AVERAGE COMPENSATION means the average compensation during
a Participant's highest three (3) consecutive Years of Service, which
period is the three (3) consecutive calendar years (or the actual
number of consecutive years of employment for those Employees who are
employed for less than three (3) consecutive years with the Employer)
during which the Participant had the greatest aggregate compensation
from the Employer
(iv) Notwithstanding the foregoing, in the case of a Participant
(i) who is permanently and totally disabled (as provided in Code
Section 415(c)(3)(C)), (ii) who is not a Highly Compensated Employee,
and (iii) with respect to whom the Employer elects to have this
subparagraph apply, the term Compensation shall mean the Compensation
the Participant would have received for the Plan Year if the
Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled. This subparagraph
(iv) shall apply only if contributions made with respect to amounts
treated as Compensation under this subparagraph (iv) are
nonforfeitable when made.
(v) EMPLOYER means the Employer that adopts this Plan. All
Related Employers shall be considered a single Employer for purposes
of applying the limitations of this Section.
(vi) EXCESS AMOUNT means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount,
less administrative charges allocable to such Excess Amount.
(vii) LIMITATION YEAR means the Limitation Year specified in the
Plan or, if none is specified, the calendar year.
(viii) MAXIMUM PERMISSIBLE AMOUNT means the lesser of:
45
(A) the Defined Contribution Dollar Limitation, or
(B) twenty-five percent (25%) of the Participant's
Compensation, within the meaning of Code Section 415(c)(3)
for a Limitation Year with respect to any Participant. For
purposes of this subsection the term "Defined Contribution Dollar
Limitation" means $30,000 or, if greater, twenty-five percent
(25%) of the Defined Benefit Dollar Limitation set forth in Code
Section 415(b)(1)(A) as in effect for the Limitation Year.
(ix) PROJECTED ANNUAL BENEFIT means the benefit of the
Participant payable annually in the form of a straight life annuity
(with no ancillary benefits) under the terms of a defined benefit plan
to which employees do not contribute and under which no rollover
contributions are made, assuming that the Participant continues
employment until Normal Retirement Age (or current age, if later),
compensation continues at the same rate as in effect in the Limitation
Year under consideration until the date of Normal Retirement Age, and
all other relevant factors used to determine benefits under the
defined benefit plan remain constant as of the current Limitation Year
for all future Limitation Years.
SECTION 5.7. NOTIFICATION TO PARTICIPANTS. At least once annually the
Committee shall advise each Participant or Former Participant of the then
composition and value of his Accounts.
* * * * * * *
46
ARTICLE SIX
-----------
VESTING
SECTION 6.1. RETIREMENT, DEATH, OR DISABILITY. If a Participant ceases to
be an Employee due to the Participant's Retirement, Early Retirement, death, or
Disability, such Participant, Former Participant, or the Beneficiary, as the
case may be, shall be fully vested in and entitled to the total amount credited
to each of his Accounts.
SECTION 6.2. SEPARATED FROM SERVICE If a Participant or Former Participant
is Separated from Service for any reason other than Retirement, Early
Retirement, death, or Disability, such Participant or Former Participant, or the
Beneficiary, as the case may be, shall be entitled to the sum of the following:
(a) The total amount credited to the Participant's Savings Account,
Rollover Account, and ESOP Rollover Account , if any; and
(b) The Vested Percentage at the date he is Separated from Service, of
the total amount credited to the Participant's Matching Employer
Contribution Account, Discretionary Employer Contribution Account, W & B
Plan Rollover Account, and ESOP Transfer Account, if any. The Vested
Percentage shall be determined in accordance with the following schedule:
Nonforfeitable
Years of Service Percentage
Less than 3 years 0%
At least 3 but less than 4 years 20%
At least 4 but less than 5 years 40%
At least 5 but less than 6 years 60%
At least 6 but less than 7 years 80%
At least 7 or more years 100%
(c) Notwithstanding the foregoing vesting schedule, for any Plan Year
in which the Plan is a Top-Heavy Plan, the following vesting schedule shall
apply:
Nonforfeitable
Years of Service Percentage
Less than 2 years 0%
At least 2 but less than 3 years 20%
At least 3 but less than 4 years 40%
At least 4 but less than 5 years 60%
At least 5 but less than 6 years 80%
At least 6 or more years 100%
47
(d) If, in any subsequent Plan Year, the Plan ceases to be a Top-Heavy
Plan, the vesting schedule in paragraph (c) shall continue to apply unless
the Employer elects, in writing, to revert to the vesting schedule set
forth in paragraph (b). Any reversion shall be treated as a plan amendment
and shall be subject to the restrictions of Section 15.1 and this
paragraph. No such amendment shall be effective unless, in the event it
changes the Plan's applicable vesting schedule (determined in accordance
with regulations under Code Section 411), each Participant's nonforfeitable
percentage of his accounts (determined as of the later of the date such
amendment is adopted or becomes effective) is not less than such percentage
computed under this Section 6.2 without regard to such amendment and
unless, in such event, each Participant having not less than 3 Years of
Service, is permitted to elect (pursuant to regulations under Code Section
411) to have his nonforfeitable percentage computed under the Plan without
regard to such amendment.
(e) If the Trustee pays any amount outstanding to the credit of a
Participant in the Participant's Discretionary Employer Account, Matching
Employer Account, or W & B Plan Rollover Account while the Participant is
not fully vested in such account(s), other than a Cashout Distribution
defined in Section 6.3(c), and prior to the date on which the Participant
shall incur five (5) consecutive one year Breaks in Service, his or her
vested and undistributed Discretionary Employer Account, Matching Employer
Account, and W & B Plan Rollover Account shall be determined at any time
prior to and including the date on which the Participant shall incur five
(5) consecutive one year Breaks in Service under the following formula:
X = P(AB + (RxD)) - (RxD).
For this formula, the variables represent the following factors:
X is the value of the vested portion of the Participant's account;
P is the Participant's Nonforfeitable percentage at the relevant time;
AB is the account balance of the Participant's account at the relevant
time;
D is the amount of the distribution; and
R is the ratio of the Participant's account balance at the relevant
time to the Participant's account balance after the distribution.
(f) Notwithstanding the foregoing, a Participant's Vested Percentage
in his W & B Plan Rollover Account and ESOP Accounts, if any, shall never
be less than his vested percentage in the assets transferred to such
Account at the time such assets were transferred to the Plan from the W & B
Refrigeration Service Co., Inc. Employees' Profit-Sharing Plan and Trust,
the FFE Transportation Services ESOP, or the Conwell ESOP, respectively.
SECTION 6.3. COMPUTATION OF YEARS OF SERVICE FOR VESTING.
48
(a) GENERAL. For purposes of computing a Participant's or Former
Participant's Vested Percentage of his Discretionary Employer Contribution
Account, Matching Employer Contribution Account, and ESOP Transfer Account,
each Participant or Former Participant shall be credited with all Years of
Service to which he is entitled pursuant to Section 2.68, other than Years
of Service not counted under Sections 6.3(b) and (c) below.
(b) RE-EMPLOYMENT AFTER A BREAK IN SERVICE. In determining a
Participant's Years of Service for vesting purposes upon a Participant's
re-employment with an Employer after a Break in Service, the following
rules shall apply:
(i) If the Participant was not entitled to any Vested Percentage
prior to his Break-in-Service, he shall be credited with pre-break
Years of Service only if the number of consecutive years of
Break-in-Service are less than five.
If any Years of Service are not required to be taken into account by
reason of the above sentence, such Years of Service shall not be taken
into account in applying this paragraph (i) to a subsequent period of
Break-in-Service.
(ii) If the Participant was entitled to a Vested Percentage prior
to his Break-in-Service, or if he meets the requirements of paragraph
(i) above, then his pre-break Years of Service shall be taken into
account in determining his Vested Percentage of his Discretionary
Employer Contribution Account and his Matching Employer Contribution
Account immediately upon his re-employment commencement date.
(c) FORFEITURES. When a Participant has Separated from Service, his
Matching Employer Contribution, Discretionary Employer Contribution, and
ESOP Transfer Accounts shall be divided into two portions, one representing
the vested portion, and the other representing the forfeiture portion, of
such accounts. Such accounts shall continue to receive income allocations
pursuant to Section 5.2 until distributed in full. A Participant shall
forfeit the forfeiture portion of his Matching Employer Contribution,
Discretionary Employer Contribution, and ESOP Transfer Accounts on the
earlier of the date on which the Participant incurs five (5) consecutive
one year Breaks-in-Service or the date on which the Participant receives a
Cashout Distribution. A "Cashout Distribution" means a lump sum
distribution pursuant to Article 11 that occurs concurrently with or at any
time subsequent to the date on which the Participant separates from
Service. For purposes of this Section, a Participant who separates from
Service without a nonforfeitable percentage in the Participant's Matching
Employer Contribution, Discretionary Employer Contribution, and ESOP
Transfer Accounts shall be deemed to have received a distribution of such
Accounts on the date of separation from Service, or if the Participant is
entitled to an allocation of Matching Employer Contributions for the Plan
Year in which he separates from Service, on the last day of that Plan Year.
The amount forfeited under this Section shall remain in the Trust Fund and
shall be allocated as provided in Section 5.5.
(d) BENEFIT ACCRUALS AND REPAYMENTS:
49
(i) Notwithstanding Subsection (b) above, for purposes of
determining a Participant's Vested Percentage under the Plan, the Plan
will disregard service performed by the Participant with respect to
which he has received a distribution if the present value of his
entire Vested Percentage of such distribution was not more than
$5,000. This paragraph (i) shall apply, however, only if such
distribution was made on termination of the Participant's
participation in the Plan.
(ii) For purposes of determining a Participant's Vested
Percentage under the Plan, the Plan will not disregard service as
provided in paragraph (d)(i) above if the Participant repays the full
amount of the distribution described in such paragraph (d)(i). Upon
such repayment, the Participant's account balance prior to the
distribution will be restored (unadjusted by any gains or losses
between the time of distribution and the time of repayment) and his
Vested Percentage will be recomputed by taking into account service so
disregarded. This paragraph (ii) shall apply, however, only in the
case of a Participant who --
(A) resumes employment before the date on which he would
have incurred five (5) consecutive Breaks-in-Service; and
(B) repays the full amount of such distribution before the
date on which he would have incurred five (5) consecutive
Breaks-in-Service.
The Employer will make a special restoration contribution to the Plan
in order to restore any account balances hereunder.
For purposes of Plan Section 5.6 and Code Section 415(c), the
repayment by the Participant and the restoration will not be treated
as "annual additions."
SECTION 6.4. DETERMINATION OF AMOUNT.
(a) For purposes of Sections 6.1, 6.2 and 6.3, the amount credited to
the Accounts of a Participant or Former Participant shall be determined as
of the Valuation Date next preceding the date such Accounts are
distributed, and the distribution from the Plan of such amount shall be
made or shall commence as soon thereafter as practicable in the manner
determined under Article 11.
(b) If, on the Valuation Date referred to in Section 6.4(a), the
amount credited to the Account in question does not include the allocation,
if any, to which such Account is entitled under Article 5 for the months
which include and/or follow such Valuation Date, then the particular
Participant's or Former Participant's vested portion, determined under
Section 6.1, 6.2 and 6.3, as appropriate, of such allocation shall be
distributed in the manner provided under Section 11.1(d) as soon as
practicable after such allocation is made.
* * * * * * *
50
ARTICLE SEVEN
-------------
INVESTMENT OF TRUST ASSETS
SECTION 7.1. APPOINTMENT OF TRUSTEE. The Board of Directors of the Company
shall determine the number of Trustees, shall appoint such Trustees, and may at
any time and from time to time increase or decrease the number of Trustees. The
Board of Directors of the Company may remove any Trustee at any time and appoint
a successor Trustee or Trustees or reduce the number of Trustees (but not to
less than one). The Trustee or Trustees shall have such rights, powers and
duties as shall from time to time be specified in or determined pursuant to the
Trust Agreement. The Trust Agreement shall form a part of the Plan, and the
Trust Assets shall be administered in accordance with the terms of the Plan and
the Trust Agreement.
SECTION 7.2. INVESTMENT OF ACCOUNTS.
(a) PARTICIPANT DIRECTION OF INVESTMENT. Except as provided in Section
7.2(c)(i) (regarding the Restricted Company Stock Fund), the following
Accounts shall be known as Participant-Directed Accounts and shall be
invested and reinvested by the Trustee in accordance with Participant
direction, as provided herein: Discretionary Employer Contribution
Accounts, Matching Employer Contribution Accounts, Savings Accounts, and W
& B Plan Rollover Accounts.
(i) Each Participant, in his written application for
participation or through such other means as may be authorized by the
Plan Administrator, if any, shall direct the Committee and the Trustee
as to which Investment Fund(s) he wishes to utilize and the percentage
of his Participant-Directed Accounts he wishes to have invested in
each fund. The Participant shall make a separate investment election
for his Rollover Account, if any, and his W & B Plan Rollover Account,
if any. The Participant's direction shall include the percentage of
his Accounts to be invested in each such Investment Fund; provided,
however, that all investments shall be made in whole percentages. Such
election shall be expressed in terms of the percentage amount of the
Accounts, other than amounts invested in the Restricted Company Stock
Fund, to be allocated to each Investment Fund.
(ii) A Participant may change his designation of the manner for
investment of such Participant's Participant-Directed Accounts, other
than amounts held in the Restricted Company Stock Fund, or current
contributions made on behalf of or by the Participant, or both, to any
other manner permitted hereunder. This change may be made in writing
to the Committee or through such other means as may be authorized by
the Plan Administrator, if any. A change shall be applicable as soon
as administratively feasible following its delivery to the Committee.
In order to comply with applicable federal or state securities laws,
the Committee may establish such rules with respect to the change of
investment designation by participants as it shall deem necessary or
advisable to prevent possible violations of such laws.
51
(iii) To the extent a Participant fails to direct the investment
of all or any portion of his Participant-Directed Accounts, the
Committee shall direct the Trustee to invest such Participant-Directed
Accounts in one of the Investment Funds available for the Participants
to choose among consisting of money market short-term investments with
a high level of liquidity.
(iv) The Plan Administrator may permit a Participant to make an
election under this Section 7.2 through any electronic or telephonic
means authorized by the Committee.
(b) INVESTMENT FUNDS. The Plan Committee will select the "Investment
Funds" available under the Plan in accordance with a separate written
Investment Policy. The Committee shall select and maintain such Investment
Funds in accordance with the Committee's written Investment Policy. Such
Investment Funds shall be communicated to Participants in writing. All
Participant-Directed Accounts shall be allocated by the Committee to the
Investment Funds specified in the separate written Investment Policy.
Dividends, interest and other distributions shall be reinvested in the same
Investment Fund from which they are received.
Except as provided in paragraph (c) and (d) below, the assets of each
Investment Fund shall be invested exclusively in shares of the registered
investment company designated by the Committee, provided that such shares
constitute securities described in ERISA Section 401(b)(1). Amounts in any
such Investment Fund in amounts estimated by the Trustee to be needed for
cash withdrawals, or in amounts too small to be reasonably invested, or in
amounts which the Trustee deems to be in the best interest of the
Participants, may be retained by the Trustee in cash or invested
temporarily.
There shall be at least five Investment Funds for the Participants to
choose between, not including the Unrestricted Company Stock Fund and the
Restricted Company Stock Fund. The Committee may, from time to time and in
its sole discretion, increase or decrease the number and type of the
Investment Fund(s) available for the Participants to choose among;
provided, however, that the Committee shall not decrease the number of
Investment Funds to fewer than five.
(c) COMPANY STOCK FUNDS. The Trustee shall maintain a Restricted
Company Stock Fund and an Unrestricted Company Stock Fund (collectively,
the "Company Stock Funds") under this Plan. The Company Stock Funds shall
be invested solely in Company Stock. The Trustee is explicitly authorized
to acquire and hold shares of Company Stock in the Company Stock Funds. Any
and all investments, reinvestments, or purchases shall be made at prices
not in excess of the fair market value of the Company Stock prevailing at
the time of such purchase or investment.
(i) RESTRICTED COMPANY STOCK FUND. All amounts invested in
Company Stock that were subject to investment restrictions pursuant to
the terms of the Prior Plan shall be invested and reinvested by the
Trustee in the Restricted Company Stock Fund. Each Participant's
investment in the Restricted Company Stock Fund shall be equal to the
portion of his Participant-Directed Accounts that were invested in the
Company Stock Fund under the Prior Plan. Participants shall have no
right to direct investment of any amounts held in the Restricted
Company Stock Fund.
52
During each Diversification Period, the Trustee shall transfer a
portion of each Participant's investment in the Restricted Company
Stock Fund to the Unrestricted Company Stock Fund as follows:
(A) The transfer shall be made as of the first day of the
calendar month immediately following the calendar month that
includes the anniversary of a Participant's Employment
Commencement Date.
(B) The amount transferred shall be equal to the
Participant's investment in the Unrestricted Company Stock Fund
times a fraction, the numerator of which shall be one and the
denominator of which shall be equal to (i) for the
Diversification Period beginning July 1, 1999, four, (ii) for the
Diversification Period beginning July 1, 2000, three, (iii) for
the Diversification Period beginning July 1, 2001, two, and (iv)
for the Diversification Period beginning July 1, 2002, one.
For purposes of this Section, the term "Diversification Period"
shall mean the twelve month period beginning each July 1st and
ending each June 30th.
(ii) UNRESTRICTED COMPANY STOCK FUND. Any amounts invested in
shares of Company Stock on or after the Effective Date, any amounts
invested in Company Stock that were not subject to investment
restrictions pursuant to the terms of the Prior Plan, and any amounts
transferred from the Restricted Company Stock Fund, shall be invested
and reinvested by the Trustee in the Unrestricted Company Stock Fund.
Each Participant shall be permitted to direct the Trustee to cause his
Participant-Directed Accounts to purchase or sell shares of Company
Stock held in the Unrestricted Company Stock Fund at any time.
Any transfer of funds within a Participant-Directed Account from
the Unrestricted Company Stock Fund to any other Investment Fund, will
require that the Company Stock allocated to such Account be sold for
its then market value and the sales proceeds transferred to the other
Investment Fund (which will remain allocated to that same Account).
The Trustee may sell shares of Company Stock to private purchasers
(including an Employer) or in the open market; provided, however, that
a sale to a private purchaser shall be made for no less than the
market price then prevailing. Any transfer of funds within a
Participant-Directed Account from another Investment Fund to the
Unrestricted Company Stock Fund will require that the transferred
funds be used to purchase shares of Company Stock (such stock to be
allocated to the same Account from which the fund transfer was made).
(d) ESOP ACCOUNTS. The ESOP Accounts shall be invested and reinvested
by the Trustee in accordance with Article 13.
SECTION 7.3. INCOME AND EXPENSES.
53
(a) Except as provided in Section 5.2, the dividends, capital gains
distributions, and other earnings received on any share of Company Stock or
an Investment Fund that is specifically credited to a Participant's or
Former Participant's separate Account under the Plan shall be allocated to
such separate Account and immediately reinvested, to the extent
practicable, in additional shares of Company Stock or shares of such
Investment Fund.
(b) Except as otherwise provided in Sections 5.5 and 16.7, fees
charged by the Trustee and other expenses of operating the Trust shall be
paid by the Employers or, in the absence of such payments (which are not
obligatory), out of the general Trust assets and charged to the separate
Accounts of all Participants and Former Participants under the Plan in the
ratio that the fair market value of each such Account bears to the total
fair market value of all separate Accounts; provided, however, that such
amounts shall be adjusted to reflect any revenue sharing payments received
from an Investment Fund. However, notwithstanding the above, any brokerage
fees, commissions, taxes and other costs incurred by the Trust (and not
reimbursed by the Employers) with respect to the purchase, sale, or
distribution of Company Stock pursuant to an inter-fund transfer in
connection with an in-service withdrawal or a distribution made at the
direction of a Participant, Former Participant, or Beneficiary pursuant to
Section 10.1 or 11.1(a) or (b), shall be charged to and paid by such
Participant's, Former Participant's, or Beneficiary's separate Accounts.
SECTION 7.4. COMPANY STOCK.
(a) ACQUISITION OF STOCK BY TRUSTEE. The Trustee shall acquire shares
of Company Stock pursuant to Participants' elections under Section 7.2 from
private sources (including an Employer) or the open market, at not more
than the market price then prevailing. All shares of Company Stock shall be
carried by the Trustee at the actual cost thereof, including taxes,
brokerage fees and commissions, if any, incident to the purchase, if the
shares of Company Stock were purchased, or shall be carried by the Trustee
at their value at the time of contribution to the Plan, if contributed in
kind to the Plan by the Employer, determined by the average of the closing
prices of such stock for the twenty (20) consecutive trading days
immediately preceding their contribution to the Plan.
(b) STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS. No Participant,
Former Participant or Beneficiary shall have any right of request,
direction, or demand upon the Committee or the Trustee to exercise in his
behalf rights or privileges to acquire, convert into, or exchange for
Company Stock or other securities. The Trustee, in its sole discretion, may
exercise or sell any such rights or privileges. The separate Accounts shall
be appropriately credited if such rights are exercised or sold. Company
Stock received by the Trustee by reason of a stock split, stock dividend or
recapitalization shall be appropriately allocated to the separate Accounts
of the affected Participant, Former Participant, or Beneficiary.
54
(c) VOTING OF COMPANY STOCK. At each annual meeting and special
meeting of the stockholders of the Company, the Committee shall direct the
Trustee how to vote the shares of Company Stock held in
Participant-Directed Accounts. Company Stock held in ESOP Accounts shall be
voted in accordance with Section 13.6(c).
SECTION 7.5. EXCLUSIVE BENEFIT. The Plan and the Trust are established and
shall be maintained for the exclusive benefit of the Participants, Former
Participants and their Beneficiaries. Subject to the exceptions expressly set
forth in the Plan or the Trust Agreement, no part of the Trust Assets may ever
revert to an Employer or be used for or diverted to purposes other than the
exclusive benefit of the Participants, Former Participants and Beneficiaries.
SECTION 7.6. VALUATION. The value of each Account shall be determined as of
each Valuation Date, on the basis of the fair market value of the assets
allocated to each such Account, as appraised by the Trustee.
(a) As of each Valuation Date, the Committee shall determine the fair
market value of each Investment Fund being administered by the Trustee.
With respect to each such Investment Fund, the Committee shall determine
(a) the change in value between the current Valuation Date and the then
last preceding Valuation Date, (b) the net gain or loss resulting from
expenses paid (including fees and expenses, if any, which are to be charged
to such Investment Fund) and (c) realized and unrealized gains and losses.
Contributions and rollovers received by the Plan shall be credited to a
Participant's Accounts as of the Valuation Date that such amounts are
invested in an Investment Fund and shall not be considered in allocating
gains and losses to the Participant's Accounts on such Valuation Date.
The transfer of funds to or from an Investment Fund pursuant to
Section 7.2 and 7.3 and payments, distributions and withdrawals from an
Investment Fund to provide benefits under the Plan for Participants or
Beneficiaries shall not be deemed to be gains, expenses or losses of an
Investment Fund.
As of each Valuation Date, the Committee shall allocate the net gain
or loss of each Investment Fund on the Valuation Date to the Accounts of
Participants participating in such Investment Fund on such Valuation Date.
(b) The reasonable and equitable decision of the Committee as to the
value of each Investment Fund, and of any Account as of each Valuation Date
shall be conclusive and binding upon all persons having any interest,
direct or indirect, in the Investment Funds or in any Account.
* * * * * * *
55
ARTICLE EIGHT
-------------
BENEFICIARY
SECTION 8.1. DESIGNATION OF BENEFICIARY. Each Participant or Former
Participant may, from time to time, designate any person or persons (who may be
designated contingently or successively and who may be an entity or a natural
person), either individually or in a fiduciary capacity, the Beneficiary or
Beneficiaries to whom his Plan benefits are to be paid if he dies before receipt
of all such benefits. However, a married Participant or a married Former
Participant may not select a Beneficiary other than his Spouse unless the Spouse
consents to such selection in writing, and the Spouse's consent acknowledges the
effect of such selection and is witnessed by a Plan representative or a notary
public. Each Beneficiary designation shall be in the form prescribed by the
Committee and will be effective only when filed with the Committee during the
Participant's or Former Participant's lifetime. Each Beneficiary designation
filed with the Committee will cancel all Beneficiary designations previously
filed with the Committee.
SECTION 8.2. NO BENEFICIARY. If any Participant or Former Participant fails
to designate a Beneficiary in the manner provided above, or if the Beneficiary
designated by a Participant, or Former Participant dies before him and the
Participant or Former Participant fails to designate a new Beneficiary, or if
the Beneficiary designated by a deceased Participant or Former Participant dies
before complete distribution of the deceased Participant's or Former
Participant's benefit, the Committee shall direct the Trustee to distribute such
Participant's or Former Participant's benefits (or the balance thereof) to one
or more of the following, as determined by the Committee in its sole discretion:
(a) To the surviving spouse of such Participant or Former Participant;
(b) To any one or more or all of the next of kin of such Participant
or Former Participant, and in such proportions, as the Committee shall
determine; or
(c) To the estate of the last to die of such Participant or Former
Participant and his Beneficiary or Beneficiaries; or
(d) To such recipient as may be required by applicable law.
SECTION 8.3. MANDATORY DISTRIBUTION OF DEATH BENEFITS. The Committee may
not direct the Trustee to distribute the Participant's Nonforfeitable Account
Balance to the Beneficiary or Designated Beneficiary, under a method of payment
which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the applicable
Treasury regulations.
(a) LIMITS ON DISTRIBUTION PERIODS.
(i) If the Participant or Former Participant dies after
distribution has commenced, the Trustee shall continue to distribute
the remaining portion of the Participant's or Former Participant's
Nonforfeitable Account Balance at least as rapidly as under the method
of distribution used prior to the Participant's death.
56
(ii) If the Participant or Former Participant dies before
distribution commences, the Trustee shall complete distribution of the
Participant's or Former Participant's Nonforfeitable Account Balance
by December 31 of the calendar year containing the fifth (5th)
anniversary of the Participant's or Former Participant's death, except
to the extent that the Designated Beneficiary elects to receive
distributions under paragraphs (A) or (B) below:
(A) If any portion of the Participant's or Former
Participant's Nonforfeitable Account Balance is payable to a
Designated Beneficiary, the Designated Beneficiary may elect
distributions over the life or over a period certain not greater
than the life expectancy of the Designated Beneficiary commencing
on or before December 31 of the calendar year immediately
following the calendar year in which the Participant or Former
Participant died;
(B) If the Designated Beneficiary is the Participant's
Surviving Spouse, the date distributions must begin under
paragraph (A) above shall not be earlier than the later of: (1)
December 31 of the calendar year immediately following the
calendar year in which the Participant or Former Participant
died; and (2) December 31 of the calendar year in which the
Participant or Former Participant would have attained age seventy
and one-half (70-1/2) years. If the Participant has not made an
election pursuant to this Section by the time of death, the
Designated Beneficiary must elect the method of distribution no
later than the earlier of: (1) December 31 of the calendar year
in which distributions must begin under this Section; or (2)
December 31 of the calendar year which contains the fifth (5th)
anniversary of the date of death of the Participant or Former
Participant. If the Participant has no Designated Beneficiary, or
if the Designated Beneficiary does not elect a method of
distribution, distribution of the Nonforfeitable Account Balance
of the Participant or Former Participant must be completed by
December 31 of the calendar year containing the fifth (5th)
anniversary of death.
(C) If the Surviving Spouse is the Beneficiary of any
portion of a deceased Participant's or Former Participant's
benefits under the Plan, the Surviving Spouse shall be permitted
to direct that this distribution of benefits commence at a
reasonable time following the death of the Participant or Former
Participant under applicable Treasury regulations.
(D) If the Surviving Spouse dies after the Participant or
Former Participant, but before payments to the Spouse begin, the
preceding provisions of this Section, with the exception of
paragraph (B), shall be applied as if the Surviving Spouse had
been the Participant.
(b) MINIMUM DISTRIBUTION AMOUNTS. If the Trustee will distribute a
Participant's or Former Participant's Nonforfeitable Account Balance in
accordance with the Designated Beneficiary's life expectancy, the minimum
distribution for a calendar year equals the Participant's Nonforfeitable
Account Balance as of the latest Valuation Date preceding the beginning of
the calendar year divided by the Designated Beneficiary's life expectancy.
57
For purposes of this Section, payments will be calculated by using the
expected return multiples specified in Tables V and VI of Treasury
Regulations Section 1.72-9. Except as the Surviving Spouse may otherwise
elect in Section 8.3(d)(i) below, the life expectancy of a Surviving Spouse
shall be recalculated annually; however, in the case of any other
Designated Beneficiary, life expectancy will be calculated when the first
payment commences without further recalculation. For purposes of this
Section, any amount paid to a child of the Participant or Former
Participant will be treated as if it had been paid to the Surviving Spouse,
if the amount becomes payable to the Surviving Spouse when the child
reaches the age of majority.
(c) COMMENCEMENT OF BENEFITS.
(i) GENERAL RULE. For the purposes of this Section, distribution
of a Participant's or Former Participant's Nonforfeitable Account
Balance is considered to begin on the Participant's or Former
Participant's Required Beginning Date or, if Section 8.3(a)(ii)(D)
applies, the date distribution is required to begin to the Surviving
Spouse pursuant to Section 8.3(a)(ii)(A). If distribution in the form
of an annuity irrevocably commences before the Required Beginning
Date, the date distribution is considered to begin is the date
distribution actually commences.
(ii) REQUIRED BEGINNING DATE. A Participant's (or Former
Participant's) "Required Beginning Date" shall be as follows:
(A) For a Participant who is a Five Percent Owner, the
Required Beginning Date shall commence on the first day of April
following the later of:
(1) the calendar year in which the Participant attains
age seventy and one-half (70-1/2) years; or
(2) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant becomes a
Five Percent Owner, or the calendar year in which the
Participant retires.
(B) For a Participant who is not a Five Percent Owner, the
Required Beginning Date is the first day of April of the calendar
year immediately following the later of:
(1) the calendar year in which the Participant attains
age seventy and one-half (70-1/2); or
(2) the calendar year in which the Participant
terminates employment with the Employer.
58
A Participant is treated as a "Five Percent Owner" for purposes of this
Section if the Participant is a Five Percent Owner as defined in Section
12.2(g)(iii) and Code Section 416(i) (determined under Code Section 416 but
without regard to whether the Plan is Top-Heavy) at any time during the
Plan Year ending with or within the calendar year in which the owner
attains age sixty-six and one-half (66-1/2) years or any subsequent Plan
Year. Once distributions have begun to a Five Percent Owner under this
Section, they must continue to be distributed, even if the Participant
ceases to be a Five Percent Owner in a subsequent year.
(d) DEFINITIONS.
(i) APPLICABLE LIFE EXPECTANCY means the life expectancy
calculated using the attained age of the Participant (or the
Designated Beneficiary) as of the Participant's (or the Designated
Beneficiary's) birthday in the applicable calendar year reduced by one
for each calendar year which has elapsed since the date life
expectancy was first calculated. If the Designated Beneficiary is the
Spouse of the Participant, such Spouse may make an irrevocable
election to recalculate his or her life expectancy, prior to the
Participant's Required Beginning Date. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life
expectancy as recalculated. The applicable calendar year shall be the
first Distribution Calendar Year and, if life expectancy is being
recalculated, the succeeding calendar year.
(ii) DESIGNATED BENEFICIARY means the individual who is
designated as the Beneficiary under the Plan under Code Section
401(a)(9) and the applicable Treasury regulations.
(iii) DISTRIBUTION CALENDAR YEAR means a calendar year for which
a minimum distribution is required. For distributions beginning before
the Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For distributions beginning
after the Participant's death, the first Distribution Calendar Year is
the calendar year in which distributions are required to begin
pursuant to this Section.
(iv) PARTICIPANT'S NONFORFEITABLE ACCOUNT BALANCE means the
Account Balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (Valuation
Calendar Year), increased by the amount of any Contributions or
Forfeitures allocated to the Account Balance as of the dates in the
Valuation Calendar Year after the Valuation Date and decreased by
distributions made in the Valuation Calendar Year after the Valuation
Date. If any portion of the minimum distribution for the first
Distribution Calendar Year is made in the second Distribution Calendar
Year on or before the Required Beginning Date, the amount of the
minimum distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately preceding
Distribution Calendar Year.
59
ARTICLE NINE
------------
NOTICES
SECTION 9.1. NOTICE TO TRUSTEE. As soon as practicable after a Participant,
Former Participant or Beneficiary becomes entitled to benefits in accordance
with Article 6, the Committee shall give written notice to the Trustee, which
notice shall include the following information and directions:
(a) The name and address of the Participant, Former Participant, or
Beneficiary.
(b) The percentage or amount to which the Participant, Former
Participant, or Beneficiary is entitled under Article 6.
(c) The time, manner and amount of payments to be made pursuant to
Article 11.
SECTION 9.2. SUBSEQUENT NOTICES. At any time and from time to time after
giving the notice provided for in Section 9.1, the Committee may modify such
original notice or any subsequent notice by means of a further written notice or
notices to the Trustee, but any action taken or payments made by the Trustee
pursuant to the original notice and prior to the receipt of a subsequent notice
shall not be affected by such subsequent notice.
SECTION 9.3. COPY TO PARTICIPANT. A copy of each notice provided for in
Sections 9.1 and 9.2 shall be mailed by the Committee to the Participant or
Former Participant or to each Beneficiary involved, as the case may be, but if,
for any reason, such copy is not sent or received, that fact shall not affect
the validity of any notice to the Trustee nor the validity of any action taken
or payment made pursuant thereto.
SECTION 9.4. RELIANCE UPON NOTICE. Upon receipt of any notice as provided
in this Article 9, the Trustee shall promptly take whatever action and make
whatever payments are called for therein.
* * * * * * *
60
ARTICLE TEN
-----------
IN-SERVICE WITHDRAWALS AND LOANS TO PARTICIPANTS
SECTION 10.1. WITHDRAWALS FROM ACCOUNTS.
(a) SAVINGS ACCOUNTS.
(i) HARDSHIP DISTRIBUTIONS. Distribution of Savings Contributions
(and any earnings credited to a Participant's Account as of the end of
the last Plan Year ending before July 1, 1989), Incentive
Contributions, Qualified Non-Elective Contributions, and Qualified
Matching Contributions made pursuant to a Participant's Savings
Contributions, including any shares of Company Stock held in the
Restricted Company Stock Fund, may be made to a Participant in the
event of hardship. For the purposes of this Section, a hardship
distribution is defined pursuant to the safe harbor definition of
Treasury Regulation Section 1.401(k)-1(d)(2)(iv) and means a
distribution necessary to satisfy an immediate and heavy financial
need of an Employee who lacks other available resources.
(A) A distribution will be considered to satisfy an
immediate and heavy need of an Employee if the distribution is
for:
(1) expenses incurred for or necessary to obtain
medical care, described in Code Section 213(d), of the
Employee, the Employee's spouse, children, or dependents;
(2) costs directly related to the purchase, excluding
mortgage payments, of a principal residence for the
Employee;
(3) payment of tuition and related educational fees for
the next twelve (12) months of post-secondary education for
the Employee, the Employee's Spouse, children or dependents;
or
(4) payment necessary to prevent the eviction of the
Employee from, or a foreclosure on the mortgage of, the
Employee's principal residence.
(B) A distribution will be considered necessary to satisfy
an immediate and heavy financial need of an Employee who lacks
other available resources only if:
(1) the Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans under
all plans maintained by the Employer; and
(2) the distribution is not in excess of the amount of
an immediate and heavy financial need, including amounts
necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the
distribution.
61
(C) In addition to the conditions above:
(1) each plan maintained by the Employer or a legally
enforceable arrangement provides that the Savings
Contributions will be suspended for twelve (12) months after
the receipt of the hardship distribution; and
(2) each plan maintained by the Employer or a legally
enforceable arrangement prohibits the Employee from making
Elective Deferrals for the Employee's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code
Section 402(g) for such taxable year less the amount of such
Employee's Elective Deferrals for the taxable year of the
hardship distribution.
(3) any hardship withdrawal to a Participant made
pursuant to this Section shall be increased by an amount
equal to the lesser of:
(a) all federal, state, and local income taxes and
associated penalties (including, if applicable, the
additional income tax described in Code Section 72(t)
imposed with respect to such hardship withdrawal); or
(b) the amount, if any, in such Participant's
Savings Account in excess of such hardship withdrawal.
(ii) UPON ATTAINMENT OF AGE 59-1/2. A Participant may elect to
receive a lump-sum distribution of the amount in his Savings Account
at any time after such Participant attains age fifty-nine and one-half
(59-1/2); provided, however, that such distribution shall not include
any shares of Company Stock held in the Restricted Company Stock Fund.
(b) MATCHING EMPLOYER CONTRIBUTION ACCOUNTS AND DISCRETIONARY EMPLOYER
CONTRIBUTION ACCOUNTS.
(i) PRIOR TO ATTAINMENT OF AGE 59-1/2. A Participant may not
receive a distribution from his Matching Employer Contribution Account
or his Discretionary Employer Contribution Account prior to his
attainment of age fifty-nine and one-half (59-1/2).
(ii) AFTER ATTAINMENT OF AGE 59-1/2. A Participant may elect to
receive a lump-sum distribution of the vested amount in his Matching
Employer Contribution Account and/or his Discretionary Employer
Contribution Account at any time after such Participant attains age
fifty-nine and one-half (59-1/2); provided, however, that such
distribution shall not include any shares of Company Stock held in the
Restricted Company Stock Fund.
62
(c) ROLLOVER ACCOUNTS. A Participant may receive an in-service
distribution from his Rollover Account at any time. A Participant may not
receive an in-service distribution from his W & B Plan Rollover Account.
(d) ESOP ACCOUNTS.
(i) HARDSHIP DISTRIBUTIONS. A Participant may not receive a
hardship distribution from his ESOP Accounts.
(ii) IN-SERVICE DISTRIBUTIONS. A Participant may not receive an
in-service distribution from his ESOP Accounts.
(e) SECTION 16 INSIDERS. Notwithstanding the preceding, if the
Participant requesting a withdrawal from the Company Stock Funds is an
executive officer, director or 10% shareholder of the Company (a "Section
16 Insider"), then any such withdrawal from the Company Stock Funds shall
be paid by a distribution in kind of Company Stock, and cash may be
distributed only to the extent that the distribution is made pursuant to an
election made at least six (6) months following the date of the most recent
election, with respect to any employee benefit plan of the Company, that
effected an opposite way "discretionary transaction," qualifying for
exemption under the requirements for an exempt "discretionary transaction,"
as that term is defined in Rule 16b-3, issued by the Securities and
Exchange Commission under Section 16 of the Securities Exchange Act of
1934. The Committee shall give such directions to the Trustee as shall be
appropriate to effectuate the distribution in accordance with the terms
hereof of the amount being withdrawn. Such withdrawals described in Section
10.2(b) below shall be debited to the Participant's Savings Account, and
the Committee shall charge the sum of such debits to the Company Stock
Funds and/or other investment fund(s) within such Savings Account in such
manner as the Participant designates in writing; provided, however, if the
Participant fails to make such a written designation, the Committee shall
charge the sum of such debits to the investment fund to be determined by
the Committee.
SECTION 10.2. LOANS TO PARTICIPANTS. The Committee may authorize a loan to
the Participants and to any Former Participant who is a "party-in-interest" (as
defined in ERISA Section 3(14)) who makes application therefor, of amounts
credited to the Participant's Accounts, including any shares of Company Stock
held in the Restricted Company Stock Fund. Provided, however, that no portion of
the Annuity-Restricted Account (as defined in Section 11.2) or the ESOP Accounts
shall be available for a loan. Loans shall not be available to any person who is
not a party-in-interest as defined in ERISA Section 3(14).
Each such loan shall be subject to the following provisions:
(a) A Participant must apply for each loan either in writing on an
application form provided by the Committee or through such other means as
may be authorized by the Committee. As a condition to the making of the
loan, the Participant shall agree to pay the loan set-up and annual loan
administration fees associated with the extension of the loan from his
Account (unless paid directly by the Participant).
63
(b) The amount of any loan, when added to the outstanding balance of
all other loans to the Participant or Former Participant under this Plan
shall not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of (i) the highest
outstanding balance of loans to the Participant or Former Participant
from the Plan and all related plans during the one year period ending
on the day before the date the loan is made, over (ii) the outstanding
balance of loans to the Participant or Former Participant from the
Plan and all related plans on the date the loan is made; and
(ii) 50% of the amount in which the Participant would have a
vested interest in the event his Separation from Service was to occur
on the date the loan is made.
For purposes of this Section, a related plan is any "qualified employer
plan", as defined in Code Section 72(p)(3), sponsored by the Employers
or any related employer, determined according to Code Section
72(p)(2)(C).
(c) Each loan shall be evidenced by a promissory note payable to the
order of the Plan. Each loan shall be adequately secured as determined by
the Committee. A loan shall be considered adequately secured if the amount
of the loan at the date the loan is granted does not exceed one-half of the
amount in which the Participant would have a vested interest in the event
of his Separation from Service.
(d) Each loan shall bear an interest rate equal to the "prime lending
rate" published in the Wall Street Journal plus one percent (1%) at the
time such loan is requested.
(e) Each such loan shall provide for the repayment of principal and
accrued interest in substantially level amortized payments payable not less
frequently than quarterly through payroll deduction payments.
(f) Each loan shall extend for a stated period determined by agreement
of the Participant and the Committee, not exceeding five years. The
limitation in the preceding sentence shall not apply to any loan designated
by the Committee as a home loan. For purposes of this Section 10.2, a "home
loan" is a loan used to acquire any dwelling unit that within a reasonable
time is to be used as the principal residence of the Participant. A home
loan shall not exceed ten (10) years.
(g) If a loan to a Participant is outstanding on the date a
distribution is to be made from the Plan with respect to a portion of the
Participant's Accounts represented by the loan, the balance of the loan, or
a portion thereof equal to the amount to be distributed, if less, shall on
such date become due and payable; provided that if the Participant is a
party-in-interest (as defined in ERISA Section 3(14)), such loan shall not
64
become due and payable if renegotiated on terms acceptable to the
Committee. The portion of the loan due and payable shall be satisfied by
offsetting such amount against the amount to be distributed to the
Participant. Alternatively, the Committee may in its discretion direct that
the portion of the Participant's Accounts equal to the outstanding loan
balance be distributed in kind by distribution of the Participant's note.
(h) If a loan to a Participant is outstanding at the time of the
Participant's death, and if the Participant's executor or administrator
does not repay the loan, the note shall be distributed in kind to the
Participant's Beneficiary. Effective for all loans made after January 1,
1999, a loan shall be accelerated and immediately due in full upon a
Participant's termination of employment.
(i) If a Participant fails to pay interest or principal on an
outstanding loan when due, his Account from which the loan was made shall,
at the direction of the Committee, be reduced by the unpaid amount if a
withdrawal would be permitted from said Account pursuant to Article 6. The
Participant shall be treated as having received such a distribution and
shall receive credit under the promissory note for the delinquent payment
accordingly. If the Committee does not take such action, the Committee
shall take whatever steps (including legal action) it deems necessary to
collect the unpaid amount.
(j) In accordance with the foregoing standards and requirements, loans
shall be available to all Participants on a reasonably equivalent basis. A
Participant shall only be entitled to have two (2) loans in effect at the
same time. Each loan must be in a minimum amount of $1,000.
(k) All loans shall be governed by such rules and regulations as the
Committee may adopt which rules and regulations are hereby incorporated by
reference. The Committee shall cause to be furnished to any Participant
receiving a loan any information required to be furnished pursuant to the
Federal Truth in Lending Act, if applicable, or pursuant to any other
applicable law.
(l) The portion of a Participant's Accounts represented by the
outstanding loan principal shall be segregated and shall not share in the
income or losses of the Plan. In lieu of sharing in such income or losses,
the Participant's Accounts shall be credited with all interest paid by the
Participant on the loan. The Trustee may charge to the Participant's
Accounts any expenses attributable to the loan.
(m) The investment funds held for a Participant's Accounts shall be
liquidated to provide cash equal to the loan principal on a pro rata basis.
(n) Effective as of December 12, 1994, loan repayments will be
suspended under this Plan, as permitted under Code Section 414(u)(4), on
behalf of those Participants who are on an authorized leave of absence
pursuant to qualified military service.
* * * * * * *
65
ARTICLE ELEVEN
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METHODS OF PAYMENT
SECTION 11.1. PARTICIPANT ELECTION
(a) TIMING OF DISTRIBUTIONS.
(i) Subject to the provisions of this Article 11, upon the
Retirement or Disability of a Participant, or the death of a
Participant or Former Participant, distribution of amounts to which a
Participant, Former Participant or Beneficiary became entitled
pursuant to Section 6.1 of the Plan shall commence as soon as
administratively practicable following the event which caused
entitlement to a distribution, and shall be completed as soon as
administratively practicable following the end of the Plan Year in
which the Participant or Former Participant Retired, became Disabled
or died.
(ii) Subject to the provisions of this Article 11, upon the
Separation from Service of a Participant, distribution of amounts to
which a Participant becomes entitled pursuant to Sections 6.2 and
6.3(c) of the Plan shall be completed as soon as administratively
practicable following the event which caused entitlement to a
distribution.
(b) ESOP ACCOUNT DISTRIBUTIONS.
(i) Notwithstanding the provisions of Section 11.1(a)(ii), if the
Participant Separates from Service for any reason other than
Retirement, Death or Disability and is not reemployed by the Employer
at the end of the first Plan Year following the Plan Year of the
Separation from Service, the Participant may elect to have
distribution of the vested percentage of his ESOP Accounts made on or
after the date that is one year after the close of the first Plan Year
following the Plan Year in which the Participant Separated from
Service by completing a distribution request form and submitting it to
the Committee; in the absence of such an election, distribution of the
vested percentage of the Participant's ESOP Accounts will begin during
the sixty (60) day period following the end of the Plan Year in which
the Participant reaches Normal Retirement Age. If the Participant is
reemployed by the Employer by the end of the first Plan Year,
distribution under the Plan will be governed by whichever part of this
Article thereafter becomes applicable. The Committee shall combine the
Nonforfeitable percentage of the ESOP Transfer Account of a
Participant determined under Section 6.2 with the Participant's ESOP
Rollover Account into one Account, and the Trustee shall make payments
to the Participant pursuant to Article 11.
(ii) Notwithstanding any contrary provision, unless other Plan
distribution provisions require earlier distribution of the
Participant's ESOP Accounts, if the Participant and, if applicable
pursuant to Code Sections 401(a)(11) and 417, with the consent of the
66
Participant's spouse, elects, the Committee shall direct the Trustee
to commence distribution of the Participant's Account Balance
attributable to Company Stock acquired after December 31, 1986 in the
Participant's ESOP Accounts no later than one (1) year after the close
of the Plan Year in which the Participant Separates from Service
because of attainment of Normal Retirement Age, Disability, or death.
This distribution requirement is subject to the form of distribution
requirements of this Article 11.
(iii) Notwithstanding any contrary provision, unless other Plan
distribution provisions require earlier distribution of the
Participant's ESOP Accounts, if the Participant and, if applicable
pursuant to Code Sections 401(a)(11) and 417, with the consent of the
Participant's spouse, elects, the Committee shall direct the Trustee
to commence distribution of the Participant's Account Balance
attributable to Company Stock acquired after December 31, 1986 in the
Participant's ESOP Accounts no later than one (1) year after the close
of the Plan Year which is the fifth (5th) Plan Year following the Plan
Year in which the Participant Separates from Service for any reason
other than attainment of Normal Retirement Age, death or disability.
This distribution requirement is subject to the form of distribution
requirements of this Article. If the Participant resumes employment
with the Employer on or before the last day of the fifth (5th) Plan
Year following the Plan Year of the Participant's Separation from
Service, the distribution provisions of this paragraph will not apply
until the Participant again may separate from Service for any reason
other than attainment of Normal Retirement Age, death or disability.
(c) FORM OF DISTRIBUTION.
(i) PARTICIPANT-DIRECTED ACCOUNTS. Except as provided in Section
11.2, distributions under this Plan shall be made in a lump sum. A
Participant shall elect whether his lump sum distribution shall be
made in cash or as a combination of Company Stock (and cash in lieu of
fractional shares) from any Account balances invested in the Company
Stock Funds and cash from any Account balances invested in the other
Investment Fund(s).
(ii) ESOP ACCOUNTS. Distributions from a Participant's ESOP
Accounts shall be made in a lump sum and shall be in the form of whole
shares of Company Stock. The value of any fractional shares shall be
distributed in cash. If Company Stock is not readily tradable on an
established market, the recipient shall receive a put option as
described in Section 13.2. A Participant entitled to a distribution
from his ESOP Accounts shall have the right to demand that all such
distributions be made in Qualifying Company Stock or in cash for
fractional shares.
(d) An amount to which a Participant, Former Participant or
Beneficiary is entitled pursuant to Section 6.4(b) shall be paid in cash to
such Participant, Former Participant or Beneficiary as soon as
administratively practicable after the determination of such amount or, if
later, the date a payment is made to such Participant, Former Participant
or Beneficiary under Section 11.1(a) or (b); provided, however, that if the
total value of his vested interest in his Accounts is less than or equals
$5,000 he shall be entitled to receive a distribution of the portion of
such Accounts which was invested in Company Stock at the time the
Participant became entitled thereto, in cash or shares of Company Stock,
with the value of any fractional shares to be paid in cash.
67
(e) Notwithstanding anything to the contrary herein contained, unless
a Participant or Former Participant has attained age sixty-five (65), if
the value of the vested interest in his Accounts exceeds $5,000, no
distribution may be made to such Participant or Former Participant without
his express written consent.
(f) Notwithstanding anything to the contrary herein contained, a
Participant's benefits will in all events be paid in a lump sum as soon as
practicable following the end of the Plan Year in which such Participant
terminates employment if the total value of his vested interest in all
Accounts is less than or equals $5,000. Unless affirmatively elected
otherwise, such distribution shall be made in cash and in whole shares of
Company Stock for all ESOP Accounts and any other account balances invested
in the Company Stock Funds.
SECTION 11.2. JOINT AND SURVIVOR ANNUITY.
(a) Notwithstanding any provision of the Plan to the contrary, if any
portion of a Participant's Rollover Account, W & B Plan Rollover Account,
or ESOP Rollover Account represents a transfer of assets, directly or
indirectly, from a defined benefit plan, or from a defined contribution
plan that is either subject to the funding standards of Code Section 412 or
otherwise subject to the requirements of Code Section 401(a)(11)(A), such
portion (referred to in this Article 11 as the "Annuity-Restricted
Account") shall, if the Participant does not die before the Annuity
Starting Date, be distributed in the form of a qualified joint and survivor
annuity in the absence of a qualified waiver under Section 11.3, or except
as otherwise provided in Section 6.3(c). For purposes of this paragraph,
Annuity Starting Date means the first day of the first period for which an
amount is payable as an annuity, or, in the case of the benefit not payable
in the form of an annuity, the first day on which all events have occurred
which entitled the Participant to such benefit. The qualified joint and
survivor annuity shall be purchased with the total amount (as determined
under Article 11) credited to the Participant's Annuity-Restricted Account
subject to this Section 11.2.
(b) Notwithstanding any provision of the Plan to the contrary, in the
case of any Participant who dies before distribution of his benefits under
the Plan has commenced, a qualified preretirement survivor annuity shall be
payable from the Annuity-Restricted Account (as determined under Article
11) to the Spouse of the Participant in the absence of a qualified waiver
under Section 11.3, or except as otherwise provided in Section 6.3(c).
SECTION 11.3. JOINT AND SURVIVOR ANNUITY REQUIREMENTS.
(a) This Plan is a profit sharing plan and the provisions of this
Section 11.3 apply only to a Participant described in Section 11.2 and this
Section. The provisions of this Section 11.3 do not apply to any
Participant in the Plan except:
68
(i) a Participant described in Section 11.2;
(ii) a Participant for whom the Plan is a direct or indirect
transferee from a plan subject to the survivor annuity requirements of
Code Sections 401(a)(11) and 417 and the Plan received the transfer
after December 31, 1984, unless the transfer is an Elective Transfer;
(iii) a Participant who elects a life annuity distribution (if
the Plan is required to provide a life annuity distribution option);
or
(iv) a Participant whose benefits under a defined benefit plan
maintained by the Employer are offset by benefits provided under this
Plan.
If the provisions of this Section apply to any Participant, the
provisions of this Section shall apply to all vested benefits of the
Participant, whether the Participant became vested in the benefit
before or after death, which are payable under the Plan, including any
proceeds from Contracts owned by the Plan.
(b) QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the ninety (90)
day period ending on the Annuity Starting Date, a married Participant's
Nonforfeitable Account Balance will be paid in the normal form of a
Qualified Joint and Survivor Annuity, defined in Section 11.3(d)(vi), and
an unmarried Participant's Nonforfeitable Account Balance will be paid in
the normal form of an immediate life annuity. The Participant may elect to
have the annuity distributed upon attainment of the Earliest Retirement Age
under the Plan. A Participant shall be considered vested even if the
Participant is only vested in Employee Contributions. For purposes of
satisfying the Qualified Joint and Survivor Annuity requirements, Account
Balances shall mean benefits derived from both Employee and Employer
Contributions.
(c) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form
of benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting Date,
then the Participant's Nonforfeitable Account Balance shall be applied
toward the purchase of a Qualified Preretirement Survivor Annuity, defined
in Section 11.3(d)(vii). The Surviving Spouse may elect to commence payment
of the Qualified Preretirement Survivor Annuity within a reasonable period
after the Participant's death. For purposes of this Section 11.3(c), the
amount of the Qualified Preretirement Survivor Annuity attributable to
Employee Contributions shall not be an amount in excess of the ratio of
Employee and Employer Contributions. In determining the value of the
Qualified Preretirement Survivor Annuity, any portion of a Participant's
Individual Account which is pledged as collateral to secure payment of a
Plan Participant loan shall be included in the Nonforfeitable Account
Balance.
(d) DEFINITIONS.
(i) ANNUITY STARTING DATE means the first day of the first period
for which an amount is paid as an annuity or any other form.
69
(ii) ELECTION PERIOD means the period that begins on the first
day of the Plan Year in which the Participant attains age thirty-five
(35) years and ends on the date of the Participant's death. If a
Participant separates from Service prior to the first day of the Plan
Year in which the Participant attains age thirty-five (35) years, for
the Account Balance as of the date of separation, the Election Period
shall begin on the date of separation. A Participant who will not yet
attain age thirty-five (35) years as of the end of any current Plan
Year may make a Special Qualified Election to waive the Qualified
Preretirement Survivor Annuity for the period beginning on the date of
the election and ending on the first day of the Plan Year in which the
Participant will attain age thirty-five (35) years. The election shall
not be valid unless the Participant receives a written explanation of
the Qualified Preretirement Survivor Annuity in such terms as are
comparable to the explanation required under Section 11.3(e)(i).
Qualified Preretirement Survivor Annuity coverage will be
automatically reinstated as of the first day of the Plan Year in which
the Participant attains age thirty-five (35) years. Any new waiver on
or after the date shall be subject to the full requirements of this
Article.
(iii) EARLIEST RETIREMENT AGE means the earliest date on which,
under the Plan, the Participant could elect to receive retirement
benefits.
(iv) NONFORFEITABLE ACCOUNT BALANCE means the aggregate value of
the Participant's Nonforfeitable Account Balance derived from Employer
and Employee Contributions, including rollovers, whether vested before
or upon death, including the proceeds of Contracts, if any, on the
Participant's life. The provisions of this Article shall apply to a
Participant who is vested in amounts attributable to Employer
Contributions, Employee Contributions, or both, at the time of death
or distribution.
(v) QUALIFIED ELECTION means a waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(A) the Participant's Spouse to whom the Survivor Annuity or
Preretirement Survivor Annuity is payable consents in writing to
the waiver election;
(B) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent
Beneficiaries;
(C) the Spouse is the Participant's sole primary
Beneficiary, the Spouse consents to the Participant's Beneficiary
designation or consents to any change in the Participant's
Beneficiary designation without any further spousal consent;
(D) the Spouse's consent acknowledges the effect of the
election; and
70
(E) the Spouse's consent is witnessed by a Plan
representative or notary public.
(F) Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective unless the
election designates a form of benefit payment and the Spouse
consents to the form of payment designated by the Participant or
consents to any change in that designated form of payment without
any further spousal consent.
Notwithstanding this consent requirement, if the Participant
establishes to the satisfaction of a Plan representative that
written consent may not be obtained because there is no Spouse,
or the Spouse cannot be located, a waiver will be deemed a
Qualified Election. If the Spouse is legally incompetent to give
consent, the Spouse's legal guardian, even if the guardian is the
Participant, may give consent. Also, if the Participant is
legally separated or the Participant has been abandoned (within
the meaning of local law) and the Participant has a court order
to such effect, spousal consent is not required unless a
Qualified Domestic Relations Order described in Code Section
414(p) provides otherwise. Any consent obtained under this
provision, or establishment that the consent of a Spouse may not
be obtained, shall be effective only with respect to the Spouse
who signs the consent, or in the event of a deemed Qualified
Election, the designated spouse. A consent that permits
designations by the Participant without any requirement of
further consent by the Spouse must acknowledge that the Spouse
has the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the Spouse
voluntarily elects to relinquish either or both of the rights. A
revocation of a prior waiver may be made by a Participant without
the consent of the Spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 11.3(e).
After the Participant's death, a Beneficiary may change the
optional form of survivor benefit as permitted by the Plan.
(vi) QUALIFIED JOINT AND SURVIVOR ANNUITY means, in the case of a
married Participant who does not die before the Annuity Starting Date,
an immediate annuity for the life of the Participant with a Survivor
Annuity for the life of the Spouse which is equal to fifty percent
(50%) of the amount of the annuity which is payable during the joint
lives of the Participant and the Spouse and which is the amount of
benefit which can be purchased with the Participant's Nonforfeitable
Account Balance. In the case of an unmarried Participant who does not
die before the Annuity Starting Date, the Qualified Joint and Survivor
Annuity requirement means an annuity for the life of the Participant
which is the amount of benefit which can be purchased with the
Participant's Nonforfeitable Account Balance.
71
(vii) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means an annuity
for the life of the Participant's Spouse, the payments under which
shall be equal to the amount of benefit which can be purchased with
the Nonforfeitable Account Balance of the Participant. The
Participant's Surviving Spouse will receive the same benefit that
would be payable if the Participant had retired with an immediate
Qualified Joint and Survivor Annuity on the day before the
Participant's date of death.
(viii) SPOUSE, SURVIVING SPOUSE means the Spouse or Surviving
Spouse of the Participant, provided that a former spouse will be
treated as the Spouse or Surviving Spouse and a current spouse will
not be treated as the Spouse or Surviving Spouse to the extent
provided under a Qualified Domestic Relations Order described in Code
Section 414(p).
(e) NOTICE REQUIREMENTS.
(i) For a Qualified Joint and Survivor Annuity described in
Section 11.3(d)(vi), the Administrator shall provide, no less than
thirty (30) days and no more than ninety (90) days prior to the
Annuity Starting Date, to each Participant a written explanation of:
(A) the terms and conditions of a Qualified Joint and
Survivor Annuity;
(B) the Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor Annuity form
of benefit;
(C) the rights of a Participant's Spouse; and
(D) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
(ii) For a Qualified Preretirement Survivor Annuity described in
Section 11.3(d)(vii), the Administrator shall provide, within the
applicable notice period for the Participant, to each Participant a
written explanation of the Qualified Preretirement Survivor Annuity in
such terms and in such manner comparable to the explanation provided
for meeting the requirements of Section 11.3(e)(i) applicable to a
Qualified Joint and Survivor Annuity.
The applicable notice period for the waiver of the Qualified
Preretirement Survivor Annuity is whichever of the following periods
ends last:
(A) the period beginning with the first day of the Plan Year
in which the Participant attains age thirty-two (32) years and
ending with the close of the Plan Year preceding the Plan Year in
which the Participant attains age thirty-five (35) years;
(B) a reasonable period ending after the individual becomes
a Participant;
72
(C) a reasonable period ending after Section 11.3(e)(iii)
ceases to apply to the Participant; or
(D) a reasonable period ending after this Article first
applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from Service in the
case of a Participant who separates from Service before attaining
age thirty-five (35) years.
For purposes of applying the preceding paragraph, a reasonable
period ending after the events described in (B), (C) and (D) is
the end of the two (2) year period beginning one (1) year prior
to the date the applicable event occurs and ending one (1) year
after that date. In the case of a Participant who separates from
Service before the Plan Year in which the Participant attains age
thirty-five (35) years, notice shall be provided within the two
(2) year period beginning one (1) year prior to separation and
ending one (1) year after separation. If the Participant
thereafter returns to employment with the Employer, the
applicable period for the Participant shall be redetermined.
If a Participant enters the Plan after the first day of the Plan
Year in which the Participant attained age thirty-two (32) years,
the Administrator shall provide notice no later than the close of
the second Plan Year succeeding the entry of the Participant in
the Plan.
(iii) Notwithstanding the other requirements of this Section
11.3(e), the respective notices prescribed by this Section shall be
given to a Participant even if the Plan fully subsidizes the costs of
a Qualified Joint and Survivor Annuity or Qualified Preretirement
Survivor Annuity. For purposes of this Section 11.3(e), a plan fully
subsidizes the costs of a benefit if under the plan the failure to
waive the benefit by a Participant would not result in a decrease in
any plan benefit with respect to the Participant and would not result
in increased contributions from the Participant. Notwithstanding the
foregoing, the Committee may provide the written explanation described
above to the Participant after his benefit commencement date. The
Participant (and his Spouse, if applicable) may waive the 30-day
election period if the distribution of the elected form of benefit
commences more than seven (7) days after the Committee provides the
Participant (and his Spouse, if applicable) the written explanation.
SECTION 11.4. NOTICE AND EXPLANATION TO PARTICIPANTS. The Committee shall
provide each Participant who has an Annuity-Restricted Account within a
reasonable period of time prior to the commencement of benefits under the Plan a
written explanation setting forth the provisions of Section 11.3.
73
SECTION 11.5. DIRECT ROLLOVER OPTIONAL FORM OF BENEFIT.
(a) DIRECT ROLLOVER. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) DEFINITIONS.
(i) ELIGIBLE ROLLOVER DISTRIBUTION. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); and the
portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to Employer Securities).
(ii) ELIGIBLE RETIREMENT PLAN. An eligible retirement plan is 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 501(a), that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement
annuity.
(iii) DISTRIBUTEE. A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
Spouse and the Employee's or former Employee's Spouse or former Spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Code Section 414(p), are distributees with regard to the
interest of the Spouse or former Spouse.
(iv) DIRECT ROLLOVER. A direct rollover is a payment by the plan
to the eligible retirement plan specified by the distributee.
SECTION 11.6. ELECTION TO DEFER RECEIPT OF BENEFITS. Notwithstanding the
foregoing, a Participant who leaves the employment of the Employer before his or
her Normal Retirement Date or Early Retirement Date may elect to leave his or
her Nonforfeitable Account Balance under the management of the Trustee until
Normal Retirement Date or Early Retirement Date. The Trustee shall invest and
reinvest and shall credit and charge the Individual Account with its
proportionate share of gains and losses of the Trust Fund pursuant to Article 5
until the Nonforfeitable Account Balance is paid out to the Former Participant
under this Article. Any election made under this Section shall be irrevocable
and shall be made no later than fourteen (14) days before the electing
Participant becomes entitled to receive his or her Nonforfeitable Account
Balance in the Plan. Notwithstanding the foregoing, a Participant who has
elected to leave his or her Nonforfeitable Account Balance under the management
of the Trustee may later elect to have the Account Balance transferred to any
pension or profit sharing plan maintained by another Employer in which the
Participant has, at the time of the later election, become a Participant under
the transferee plan.
74
SECTION 11.7. ELECTION OF FORM OF PAYMENT OF BENEFITS.
(a) The Participant, Former Participant, or Beneficiary shall elect
the form or forms of payment of benefits permitted in Sections 11.1 and
11.5 which the Committee and Trustee shall implement. Not earlier than
ninety (90) days, but not later than thirty (30) days, before the
Participant's Annuity Starting Date, the Committee must provide a benefit
notice to a Participant who is eligible to make an election under this
Section. The Participant's Annuity Starting Date means the first day of the
first period for which an amount is paid as an annuity or any other form.
The benefit notice must explain the optional forms of benefit in the Plan,
including the material features and relative values of those options, and
the Participant's right to defer distribution until he or she attains the
later of Normal Retirement Age or age 62.
(b) If a distribution is one to which Code Sections 401(a)(11) and 417
do not apply, such distribution may commence less than thirty (30) days
after the notice required under Treasury Regulations Section 1.411(a)-11(c)
given, provided that:
(i) the Plan Administrator clearly informs the Participant that
he or she has a right to a period of at least thirty (30) days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
(c) If a Participant, Former Participant, or Beneficiary makes an
election prescribed by this Section, the Committee will direct the Trustee
to distribute the Participant's Nonforfeitable Account Balance pursuant to
that election. Any election under this Section is subject to the mandatory
distribution requirements of Sections 11.8 and 8.3 and the survivor annuity
requirements of Sections 11.2 and 11.3, if applicable. The Participant,
Former Participant or Beneficiary must make an election under this Section
by filing an election form with the Committee at any time before the
Trustee otherwise would commence to pay a Participant's Account Balance
under the applicable requirements of Articles 6, 8 and 11.
SECTION 11.8. LIMIT ON COMMENCEMENT OF DISTRIBUTION.
(a) Unless both the Employer and the Participant or Former Participant
agree otherwise, the payment of benefits to which a Participant, Former
Participant or Beneficiary is entitled shall in no event commence later
than the latest of the following dates:
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(i) the 60th day after the close of the Plan Year in which such
Participant or Former Participant attains his Normal Retirement Date;
(ii) the 60th day after the close of the Plan Year in which
occurs the date 10 years after the date such Participant or Former
Participant first commenced participation in the Plan; or
(iii) the 60th day after the close of the Plan Year in which such
Participant or Former Participant terminates his employment with all
Employers.
(b) If payment does not commence earlier under Section 11.7(a), the
payment of benefits to which a Participant, Former Participant or
Beneficiary is entitled will be distributed or commence to be distributed
to him not later than his Required Beginning Date.
(c) The Committee may not direct the Trustee to distribute the
Participant's Nonforfeitable Account Balance, nor may the Participant elect
to make the Trustee distribute the Nonforfeitable Account Balance, under a
method of payment which, as of the Required Beginning Date, does not
satisfy the minimum distribution requirements under Code Section 401(a)(9)
and the applicable Treasury Regulations. All distributions required under
this Article shall be determined and made under Code Section 401(a)(9) and
applicable Treasury Regulations, including the minimum distribution
incidental benefit requirements of Treasury Regulation Section
1.401(a)(9)-2. A mandatory distribution at the Participant's Required
Beginning Date will be in one lump sum unless the provisions of Section
11.2 or Section 8.3 apply. As of the first Distribution Calendar Year,
distributions may only be made in one of the optional forms of benefit
permitted by Sections 11.1, 11.2, and 11.5 hereof.
(d) Defined terms used in this Section 11.8 and not defined in this
Article or in Article 2 are defined in Section 8.3(c)(ii) and (d).
SECTION 11.9. MINORITY OR DISABILITY. During the minority or disability of
any person entitled to receive benefits hereunder, the Committee may direct the
Trustee to make payments thereof to the guardian or other legal representative
authorized under applicable law to receive property on behalf of such person. If
permitted under applicable law, the Committee may direct such payments to be
made directly to such person, to such person's spouse, to a relative of such
person or to any individual or institution having custody of such person. If
such applicable law does not permit payment of benefits to be made as provided
above in this Section 11.9, then such payments shall be made in such manner, at
such time, and to such person or entity as may be required or permitted under
such applicable law. Except as may otherwise be provided by applicable law: (i)
neither the Committee nor the Trustee shall be required to see to the
application of any payments made under this Section 11.9; and (ii) the receipt
of the payee shall be conclusive as to all interested parties.
SECTION 11.10. UNCLAIMED BENEFIT. If at, after, or during the time when a
benefit hereunder is payable to any Participant, Former Participant or
Beneficiary, the Committee, upon request of the Trustee, or at its own instance,
mails by registered or certified mail to such Participant, Former Participant or
76
Beneficiary at his last known address, a written demand for his then address, or
for satisfactory evidence of his continued life, or both, and if such
Participant, Former Participant, or Beneficiary shall fail to furnish the same
to the Committee within two years from the mailing of such demand, then, unless
otherwise required by applicable law, the Committee may, in its sole discretion,
determine that such Participant, Former Participant or Beneficiary has forfeited
his right to such benefit and may declare such benefit, or any unpaid portion
thereof, terminated as if the death of the Participant, Former Participant or
Beneficiary (with no surviving Beneficiary) had occurred on the date of the last
payment made thereon or on the date such Participant, Former Participant or
Beneficiary first became entitled to receive benefit payments, whichever is
later. All such forfeitures shall be used to reduce future Employer
Contributions, shall at all times remain Trust Assets, and in no event shall
they escheat to any governmental unit under any escheat law. If such applicable
law does not permit this disposition of unclaimed benefits then such unclaimed
benefits shall be administered in such manner as may be required or permitted
under such applicable law.
* * * * * * *
77
ARTICLE TWELVE
--------------
TOP HEAVY PROVISIONS
SECTION 12.1. APPLICATION. This Article shall apply for any Plan Year
beginning with the first Plan Year in which the Plan is determined to be
top-heavy.
SECTION 12.2. TOP-HEAVY PLAN STATUS/SUPER TOP-HEAVY PLAN STATUS. This Plan
shall be a Top-Heavy Plan in any Plan Year in which, as of the Determination
Date, (a) the Present Value of Accrued Benefits of Key Employees, or (b) the sum
of the Aggregate Accounts of Key Employees of any plan of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued Benefits or
Aggregate Accounts of all Participants under this Plan and any plan of an
Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but the
Participant was a Key Employee for any prior Plan Year, the Participant's
Aggregate Account balance shall not be taken into account in determining whether
this Plan is a Top-Heavy Plan (or whether any Aggregation Group which includes
this Plan is a Top-Heavy Group) as further defined in Code Section 416(g) and
the applicable Treasury regulations.
This Plan shall be a Super Top-Heavy Plan for any Plan Year in which, as of
the Determination Date, (a) the Present Value of Accrued Benefits of Key
Employees, or (b) the sum of the Aggregate Accounts of Key Employees of any plan
of an Aggregation Group, exceeds ninety percent (90%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Participants under this Plan
and any plan of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but the
Participant was a Key Employee for any prior Plan Year, the Participant's
Aggregate Account balance shall not be taken into account in determining whether
this Plan is a Super Top-Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top-Heavy Group) as further defined in Code Section
416(g) and the applicable Treasury regulations.
For purposes of determining Top-Heavy and Super Top-Heavy status, the
following definitions shall apply:
(a) AGGREGATE ACCOUNT means, as of the Determination Date, the sum of:
(i) the account balances of the Savings Account, Discretionary
Employer Contribution Account, Matching Employer Contribution Account
and ESOP Transfer Account as of the most recent Valuation Date
occurring within a twelve (12) month period ending on the
Determination Date;
(ii) the contributions that would be allocated as of a date not
later than the Determination Date, even though those amounts are not
yet made or required to be made;
78
(iii) any plan distributions made during the Determination Period
(However, in the case of distributions made after the Valuation Date
and prior to the Determination Date, such distributions are not
included as distributions for Top-Heavy purposes to the extent that
the distributions are already included in the Participant's Aggregate
Account balance as of the Valuation Date.); and
(iv) any Employee contributions, whether voluntary or mandatory
(However, amounts attributable to Participant Deductible Voluntary
Contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.).
(v) Regarding unrelated rollovers and plan-to-plan transfers
(those which are (A) initiated by the Employee and (B) made from a
plan maintained by one employer to a plan maintained by another
employer), if this Plan provides for rollovers or plan-to-plan
transfers, an unrelated rollover or plan-to-plan transfer shall be
considered as a distribution for purposes of this Section. If this
Plan is the plan accepting an unrelated rollover or plan-to-plan
transfer, an unrelated rollover or plan-to-plan transfer accepted
after December 31, 1983 shall not be considered as part of the
Participant's Aggregate Account balance. However, unrelated rollovers
or plan-to-plan transfers accepted prior to January 1, 1984 shall be
considered as part of the Participant's Aggregate Account balance.
(vi) Regarding related rollovers and plan-to-plan transfers
(those either (A) not initiated by the Employee or (B) made to a plan
maintained by the same Employer), if this Plan provides for rollovers
or plan-to-plan transfers, a related rollover or plan-to-plan transfer
shall be considered as a distribution for purposes of this Section. If
this Plan is the plan accepting a related rollover or plan-to-plan
transfer, a related rollover or plan-to-plan transfer shall be
considered as part of the Participant's Aggregate Account balance,
irrespective of the date on which the related rollover or plan-to-plan
transfer is accepted.
(b) AGGREGATION GROUP means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(i) Required Aggregation Group means the group of plans composed
of (A) each plan of the Employer in which a Key Employee is a
Participant or participated at any time during the Determination
Period, regardless of whether the plan has terminated; and (B) each
other plan of the Employer which enables any plan in which a Key
Employee participates to meet the requirements of Code Sections
401(a)(4) or 410, which shall be aggregated.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top-Heavy Plan if the Required Aggregation
Group is a Top-Heavy Group. No plan in the Required Aggregation Group
will be considered a Top-Heavy Plan if the Required Aggregation Group
is not a Top-Heavy Group.
(ii) Permissive Aggregation Group means the Required Aggregation
Group plus any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy Code Sections 401(a)(4) and 410.
79
In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top-Heavy Plan if the Permissive Aggregation Group is a Top-Heavy
Group. No plan in the Permissive Aggregation Group will be considered
a Top-Heavy Plan if the Permissive Aggregation Group is not a
Top-Heavy Group.
(iii) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated to
determine whether the plans are Top-Heavy Plans.
(c) DETERMINATION DATE means for any Plan Year (i) the last day of the
preceding Plan Year, or (ii) in the case of the first Plan Year of the
Plan, the last day of the first Plan Year.
(d) DETERMINATION PERIOD means the five (5) year period ending on the
Determination Date.
(e) EMPLOYER means the Employer that adopts this Plan. Related
Employers shall be considered a single Employer for purposes of applying
the limitations of these top-heavy rules.
(f) EXCLUDED EMPLOYEES means any Employee who has not performed any
Service for the Employer during the five (5) year period ending on the
Determination Date. Excluded Employees shall be excluded for purposes of a
Top-Heavy determination.
(g) KEY EMPLOYEE means any Employee or Former Employee, or Beneficiary
of the Employee, who, for any Plan Year in the Determination Period is:
(i) An officer of the Employer having Compensation from the
Employer and any Related Employer greater than fifty percent (50%) of
the amount in effect under Code Section 415(b)(1)(A);
(ii) One of the ten (10) Employees having Compensation from the
Employer and any Related Employer of more than the limitation in
effect under Code Section 415(c)(1)(A) and owning (or considered as
owning within the meaning of Code Section 318) the largest interests
in the Employer;
(iii) A Five Percent Owner of the Employer (Five Percent Owner
means any person owning, or considered as owning within the meaning of
Code Section 318, more than five percent (5%) of the outstanding stock
of the Employer or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer; or in the
case of an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the Employer.); or
80
(iv) A One Percent Owner of the Employer having Compensation from
the Employer of more than $150,000 (One Percent Owner means any person
having Compensation from the Employer and any Related Employer in
excess of $150,000 and owning, or considered as owning within the
meaning of Code Section 318, more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer; or in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer.).
(v) Notwithstanding the foregoing, Key Employee shall have the
meaning set forth in Code Section 416(i), as amended.
(vi) For purposes of determining whether an Employee or Former
Employee is an officer under this subsection (g), an officer of the
Employer shall have the meaning set forth in the regulations under
Code Section 416(i).
(vii) For purposes of this Section, Compensation means
Compensation determined under Section 2.30 for the definition of a
Highly Compensated Employee.
(viii) For purposes of determining ownership hereunder, employers
that would otherwise be aggregated as Related Employers shall be
treated as separate employers.
(h) NON-KEY EMPLOYEE means any Employee or Former Employee, or
Beneficiary of the Employee, who is not a Key Employee.
(i) PRESENT VALUE OF ACCRUED BENEFIT. Solely for the purpose of
determining if the Plan, or any other plan included in a Required
Aggregation Group of which this Plan is a part, is a Top-Heavy Plan, the
Accrued Benefit of a Non-Key Employee shall be determined under (i) the
method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Related Employers, or (ii) if there is no uniform method,
in accordance with the slowest accrual rate permitted under the fractional
accrual method described in Code Section 411(b)(1)(C). To calculate the
Present Value of Accrued Benefits from a defined benefit plan, the
Committee will use the actuarial assumptions for interest and mortality
only, prescribed by the defined benefit plan(s) to value benefits for
Top-Heavy purposes. If an aggregated plan does not have a Valuation Date
coinciding with the Determination Date, the Committee must value the
Accrued Benefits in the aggregated plan as of the most recent Valuation
Date falling within the twelve (12) month period ending on the
Determination Date, except as Code Section 416 and applicable Treasury
regulations require for the first and second plan year of a defined benefit
plan. The Committee will determine whether a plan is Top-Heavy by referring
to Determination Dates that fall within the same calendar year.
(j) TOP-HEAVY GROUP means an Aggregation Group in which, as of the
Determination Date, the sum of:
(i) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group; and
81
(ii) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
(k) Valuation Date means the Determination Date defined above.
SECTION 12.3. TOP-HEAVY MINIMUM ALLOCATION.
(a) MINIMUM ALLOCATION. Notwithstanding the foregoing, for any Plan
Year in which the Plan is determined to be Top-Heavy, the amount of
Employer Non-Elective Contributions and Forfeitures allocated to the
Individual Account of each Non-Key Employee shall be equal to the lesser of
three percent (3%) of each Non-Key Employee's Compensation or the highest
contribution rate for the Plan Year made on behalf of any Key Employee.
However, if a defined benefit plan maintained by the Employer which
benefits a Key Employee depends on this Plan to satisfy the
nondiscrimination rules of Code Section 401(a)(4) or the coverage rules of
Code Section 410 (or another plan benefiting the Key Employee so depends on
the defined benefit plan), the top heavy minimum allocation is three
percent (3%) of the Non-Key Employee's Compensation regardless of the
contribution rate for the Key Employee.
(b) COMPENSATION. For purposes of this Section, Compensation means
Compensation defined in Section 2.12 except (i) Compensation does not
include Elective Contributions, and (ii) any exclusions from Compensation
(other than the exclusion of Elective Contributions and the exclusions
described in clauses (i) through (v) of Section 2.12(a)) do not apply.
Notwithstanding the definition of Compensation in Section 2.12, the period
preceding a Participant's Entry Date shall be included in determining the
minimum top-heavy allocation provided by this Section.
(c) CONTRIBUTION RATE. For purposes of this Section, a Participant's
contribution rate is the sum of Employer Contributions (not including
Employer Contributions to Social Security) and Forfeitures allocated to the
Participant's Account for the Plan Year divided by his or her Compensation
for the entire Plan Year. To determine a Participant's contribution rate,
the Committee must treat all qualified top-heavy defined contribution plans
maintained by the Employer (or by any Related Employers described in
Section 2.49) as a single plan. For purposes of this Section, the following
rules apply:
(i) Savings Contributions on behalf of Key Employees are taken
into account in determining the minimum required contribution under
Code Section 416(c)(2). However, Savings Contributions on behalf of
Employees other than Key Employees may not be treated as Employer
Contributions for the minimum contribution or benefit requirement of
Code Section 416.
82
(ii) Matching Employer Contributions allocated to Key Employees
are treated as Employer Contributions for determining the minimum
contribution or benefit under Code Section 416. However, if a plan
utilizes Matching Contributions allocated to Employees other than Key
Employees as Employee Contributions or Elective Contributions to
satisfy the minimum contribution requirement, the Matching
Contributions are not treated as Matching Contributions for applying
the requirements of Code Section 401(k) and 401(m).
(iii) Qualified Non-Elective Contributions described in Code
Section 401(m)(4)(C) may be treated as Employer Contributions for the
minimum contribution or benefit requirement of Code Section 416.
(d) PARTICIPANT ENTITLED TO TOP-HEAVY MINIMUM ALLOCATION. The minimum
allocation under this Section shall be provided to each Non-Key Employee
who is a Participant and is employed by the Employer on the last day of the
Plan Year, whether or not the Participant has been credited with one
thousand (1,000) Hours of Service for the Plan Year. The minimum allocation
under this Section shall not be provided to any Participant who was not
employed by the Employer on the last day of the Plan Year. The provisions
of this Section shall not apply to any Participant to the extent the
Participant is covered under any other plan or plans of the Employer under
which the minimum allocation or benefit requirements under Code Section
416(c)(1) or (c)(2) are met for the Participant.
(e) COMPLIANCE. The Plan will satisfy the top-heavy minimum allocation
under this Section. The Committee first will allocate the Employer
Contributions (and Participant Forfeitures, if any) for the Plan Year
pursuant to the allocation formula under Sections 5.4 and 5.6. The Employer
then will contribute an additional amount for the Individual Account of any
Participant entitled under this Section to a top-heavy minimum allocation
and whose contribution rate for the Plan Year, under this Plan and any
other plan aggregated under this Section, is less than the top-heavy
minimum allocation. The additional amount is the amount necessary to
increase the Participant's contribution rate to the top-heavy minimum
allocation. The Committee will allocate the additional contribution to the
Account of the Participant on whose behalf the Employer makes the
contribution.
SECTION 12.4. AMENDMENTS. If the Plan is determined to be top-heavy, the
vesting schedule in Section 6.2(c) shall continue to apply notwithstanding a
determination in a later Plan Year that the Plan is no longer top-heavy unless
the Company shall amend the Plan to provide otherwise. No such amendment shall
be effective unless, in the event it changes the Plan's applicable vesting
schedule (determined in accordance with regulations under Code Section 411),
each Participant's nonforfeitable percentage of his Accounts (determined as of
the later of the date such amendment is adopted or becomes effective) is not
less than such percentage computed under Section 6.2(c) without regard to such
amendment and unless, in such event, each Participant having not less than three
(3) Years of Service is permitted to elect (pursuant to regulations under Code
Section 411) to have his nonforfeitable percentage computed under the Plan
without regard to such amendment
* * * * * * *
83
ARTICLE THIRTEEN
----------------
REPURCHASE OF COMPANY STOCK;
NONTERMINABLE PROTECTIONS AND RIGHTS
SECTION 13.1. EMPLOYEE STOCK OWNERSHIP PLAN. The ESOP Accounts in the Plan
are specifically designated an "employee stock ownership plan" within the
meaning of Code Section 4975(e)(7), ERISA Section 407(d)(6), and applicable
regulations thereunder. This Article applies solely to the Company Stock held in
ESOP Accounts.
SECTION 13.2. PUT OPTION. A share of Company Stock shall be subject to a
put option if it is not publicly traded, or if it is subject to a trading
limitation, when distributed. The Employer shall issue a put option to each
Participant or Former Participant receiving a distribution of Company Stock from
the Plan required under the conditions described in the foregoing sentence, in
accordance with the terms set forth in this Section:
(a) EXERCISE OF OPTION. The put option shall be exercisable only by a
Participant or Beneficiary; by a donee of the Participant or Beneficiary;
or by a person, including an estate or its distributees, to whom such
Company Stock has passed because of the death of the Participant.
(b) RIGHTS UNDER PUT OPTION. The put option shall give to the eligible
holder the right to put such shares to the Employer. Under no circumstances
may it bind the Plan or Trust, but it may grant the Plan or Trust an option
to assume the rights and obligations of the Employer at the time it is
exercised; if it is known, at the time such stock is acquired, that Federal
or state law will be violated if the Employer honors such put option, it
must permit the stock subject thereto to be put, in a manner consistent
with such law, to a third party (e.g., an affiliate or a shareholder of the
Employer other than the Plan or the Trust) that has substantial net worth
at the time such debt is incurred and whose net worth is reasonably
expected to remain substantial.
(c) PERIOD OF OPTION.
(i) The put option must be exercisable at least during a sixty
(60) day period following the date of distribution from the Trust to
the Participant or Beneficiary and for an additional sixty (60) day
period during the Plan Year immediately following the Plan Year in
which the first option period ends;
(ii) In the case of Company Stock that is publicly traded without
limitation when distributed by the Trust but ceases to be so traded
within the same Plan Year as the distribution, the Employer shall
notify each holder of such stock in writing on or before the tenth day
after such stock ceased to be so traded that for at least a sixty (60)
day period during such Plan Year, and for an additional sixty (60) day
period during the following Plan Year, such stock is subject to a put
option. Such notice must inform such holders of the terms of such put
option, which shall satisfy the requirements of this Section;
84
(iii) The period during which it is exercisable shall not include
any time when a distributee is unable to exercise it because the party
bound by it is prohibited from honoring it by applicable Federal or
state law;
(iv) The put option shall be exercisable by the holder notifying
the Employer in writing that it is being exercised; and
(v) The price at which it is exercisable shall be the fair market
value of the stock then prevailing, determined as of the most recent
Accounting Date; provided, however, that such value shall be
determined as of the date the put is honored if the holder of such put
is a "disqualified person" (as defined under Section 4975 of the
Code).
(d) OPTION RIGHTS NOT AFFECTED BY AMENDMENT. The rights provided to
Participants under this Article shall be non-terminable and no amendment to
this Plan shall affect these rights except such amendments to this Article
as may be required to assure the continuing qualification of the Plan under
the Code.
SECTION 13.3. PAYMENT OF PURCHASE PRICE. If a Participant or Former
Participant exercises a put option pursuant to Section 13.2, the purchaser may
make payment by delivery of a note with payments commencing not more than thirty
(30) days after the exercise of the put option. The payment obligation will be
satisfied by the delivery of said note, which must meet the following
requirements:
(a) the note must bear a reasonable rate of interest determined at
Closing;
(b) the purchaser must provide adequate security for the note;
(c) the note must provide for equal annual installments not to exceed
five (5) years, with interest payable with each installment, the first
installment due and payable thirty (30) days after the exercise of the Put
Option;
(d) the note must provide for acceleration upon thirty (30) days'
default of the payment on interest or principal; and
(e) the note must grant to the maker the right to prepay the note in
whole or in part at any time or times without penalty; provided, however,
the purchaser must not have the right to make any prepayment during the
calendar year or fiscal year of the Participant (Beneficiary) in which
Closing occurs.
Payment under a put option may not be restricted by the provisions of
a loan or any other arrangement, including the terms of the Company's
articles of incorporation, unless so required by applicable state law.
SECTION 13.4. NOTICE. A person has given notice under this Section when the
person deposits the notice in the United States mail, first class, postage
prepaid, addressed to the person entitled to the Notice at the address currently
listed for the person in the Committee records. Any person affected by this
Section has the obligation to inform the Committee of any change of address.
85
SECTION 13.5. NONTERMINABLE PROTECTIONS AND RIGHTS. Except as provided in
this Article, no Company Stock may be subject to a put, call, or other option,
or buy-sell or similar arrangement when held by and when distributed from an
ESOP Account, whether or not the Plan then qualifies as an employee stock
ownership plan. The protections and rights granted in this Article and in
Section 11.1 pursuant to Code Section 409(o) attributable to stock acquired
after December 31, 1986, are nonterminable and shall continue to exist under the
terms of this Plan with regard to Company Stock that is held in an ESOP Account
or by any Participant or other person for whose benefit such protections and
rights have been created. Neither the failure of the Plan to qualify as an
employee stock ownership plan, nor an amendment of the Plan shall cause a
termination of such protections and rights.
SECTION 13.6. INVESTMENT IN COMPANY STOCK.
(a) TYPE OF COMPANY STOCK. The Trustee shall invest ESOP Accounts
primarily in Qualifying Company Stock to the extent practicable and may
invest one hundred percent (100%) of the ESOP Accounts in Company Stock.
The Company Stock may be Treasury Stock which has been purchased by the
Employer; stock which has been authorized, but never issued by the
Employer; Company Stock traded on a public market; or Company Stock owned
by shareholders of the Employer.
(b) PURCHASE PRICE. For the purchase of Company Stock, from the Parent
or any Employer or from a shareholder of the Parent or any Employer, the
Trustee shall not pay more than fair market value as determined by the
current market price of the Company Stock, if there is a market, and if
there is not a market for the stock, then as determined by an independent
appraisal. All valuations of Company Stock which is not readily tradable on
an established securities market, with respect to activities carried on by
the Plan, must be made by an independent appraiser meeting requirements
similar to requirements of the Regulations prescribed under Code Section
170A-1. For the purchase of Company Stock from a Disqualified Person, the
value of the Company Stock must be determined as of the date of the
transaction. For any other purchase, the value shall be based on a current
valuation. Notwithstanding the preceding provisions of this Section, the
Trustee may purchase Company Stock at a price lower than that determined in
accordance with the preceding provisions of this Section 13.6(b) from any
source whatsoever. If a public market is made for the Company Stock, the
purchase price shall be the average of the closing prices on the OTC for
the last three days for which such prices are quoted in the Wall Street
Journal preceding the purchase.
(c) VOTING RIGHTS.
(i) Each Participant shall be entitled to direct the Trustee as
to the manner in which voting rights with respect to shares of Company
Stock allocated to such Participant's ESOP Accounts shall be
exercised.
86
(ii) In order to implement the voting rights granted in this
Section, the Plan Administrator shall furnish the Trustee and
Participants who have an ESOP Account with a notice or information
statement which complies with both the law and the Plan Sponsor's
charter and bylaws applicable to security holders in general.
Allocated shares of Company Stock with respect to which timely voting
instructions have not been received shall be voted by the Trustee on
each matter in the same proportion as shares with respect to which
such instructions have been received on such matter.
(d) TENDER OFFER
(i) Notwithstanding any other provisions of the Plan or Trust,
the provisions of this Section shall govern the tendering of shares of
Company Stock held in ESOP Accounts. Upon commencement of a tender
offer for any securities held in ESOP Accounts that are Company Stock,
the Plan Administrator shall notify each Participant of such tender
offer, utilize its best efforts to timely distribute or cause to be
distributed to the Participants such information as is distributed to
shareholders of the Employer in connection with such tender offer, and
shall provide a means by which the Participant can instruct the
Trustee whether or not to tender the Company Stock allocated to such
Participant's ESOP Accounts. The Plan Administrator shall provide the
Trustee with a copy of any materials provided to Participants. Each
Participant shall have the right to instruct the Trustee as to the
manner in which the Trustee is to respond to the tender offer for any
or all of the Company Stock allocated to such Participant's ESOP
Accounts. The Trustee shall respond to the tender offer with respect
to the Company Stock as instructed by the Participant. Allocated
shares of Company Stock with respect to which timely tender
instructions have not been received shall be tendered by the Trustee
in the same proportion as shares with respect to which such
instructions have been received.
(ii) A Participant who has directed the Trustee to tender shares
of Company Stock allocated to such Participant's ESOP Accounts may, at
any time, prior to the tender offer withdrawal date, instruct the
Trustee to withdraw, and the Trustee shall withdraw such shares of
Company Stock from the tender offer prior to the withdrawal deadline.
A Participant shall not be limited as to the number of instructions to
tender or withdraw which he may give to the Trustee.
(iii) The Trustee shall credit the proceeds, received in exchange
for the tendered Company Stock allocated to the ESOP Account of each
Participant who instructed the Trustee to so tender, to that
Participant's respective ESOP Account. The Trustee shall exercise its
best efforts to invest the proceeds from such tender, whether cash or
securities, in conformity with the requirements of Code Section 4975.
(e) SHAREHOLDER AGREEMENTS. The Trustee may enter into agreements with
shareholders to purchase shares of Company Stock under which the Trustee is
granted an option to purchase all or a portion of the shares of Company
Stock owned by the shareholders on the death of the shareholder or
shareholders. To provide for the funding of the purchase of shares of
Company Stock, the Trustee may apply for and pay premiums on contracts of
life insurance on the life of such shareholder for the benefit of the Trust
Fund as a whole, provided, however, that the Trustee may not enter into any
agreement which would obligate the Plan and Trust to purchase Company Stock
from a particular shareholder at an indefinite time determined upon the
happening of an event such as death of the shareholder.
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SECTION 13.7. PARTIAL DIVERSIFICATION OF INVESTMENT.
(a) For purposes of this Section, the following definitions apply:
(i) "Qualified Participant" means any Employee who has completed
at least ten (10) years of participation under the Plan and has
attained age fifty-five (55) years.
(ii) "Qualified Election Period" means the six (6) Plan Year
Period beginning with the Plan Year in which the Participant becomes a
Qualified Participant.
(iii) "Diversification Election Interval" means the span of
ninety (90) days after the close of each Plan Year within a Qualified
Participant's Qualified Election Period.
(b) A Qualified Participant may elect within the Diversification
Election Interval during his Qualified Election Period to direct the
Trustee on the investment of: (a) not more than twenty-five percent (25%)
of the Qualified Participant's ESOP Account Balance (excluding accumulated
employee contributions) at the end of the Plan Year, reduced by amounts
previously diversified, during the first five (5) years of his Qualified
Election Period; and (b) not more than fifty percent (50%) of the Qualified
Participant's ESOP Account Balance (excluding accumulated employee
contributions) at the end of the Plan Year, reduced by amounts previously
diversified, during the sixth (6th) year of his Qualified Election Period.
The Trustee shall complete diversification of a Qualified Participant's
investment in accordance with a Qualified Participant's Election no later than
ninety (90) days after the close of the Diversification Election Interval. The
Trustee shall satisfy this requirement: (a) by distributing to the Participant
an amount equal to the amount for which the Participant elected diversification;
or (b) by substituting for the amount of the Company Stock for which the
Participant elected diversification an equivalent amount of participant-directed
investments in other Investment Funds offered in the Plan pursuant to Article
Seven.
* * * * * * *
88
ARTICLE FOURTEEN
----------------
ADOPTION BY OTHER ORGANIZATIONS
SECTION 14.1. PROCEDURE FOR ADOPTION. Any corporation or other organization with
employees, now in existence or hereafter formed or acquired, which is not
already an Employer under the Plan and which is otherwise legally eligible, may,
in the future, with the consent and approval of the Company and the Trustee by
resolution or decision of its own board or governing authority, adopt the Plan
and the Trust, for all or any classification of persons in its employment, and
thereby, from and after the effective date specified in such resolution or
decision, become an Employer. The adoption resolution or decision may contain
such specified changes and variations in the terms and provisions of the Plan or
the Trust Agreement as may be acceptable to the Company and the Trustee. The
adoption resolution or decision shall become, as to such adopting organization
and its Employees, a part of the Plan and the Trust Agreement. It shall not be
necessary for the adopting organization to sign or execute the Plan or the Trust
Agreement. The effective date of the Plan for any such adopting organization
shall be that stated in the resolution or decision of adoption, and from and
after such effective date such adopting organization shall assume all the
rights, obligations, and liabilities of an Employer under the Plan and the Trust
Agreement, and shall be included within the meaning of the term Employer. The
administrative powers and control of the Company, as provided in the Plan and
the Trust Agreement, including the right of amendment and of appointment and
removal of the Committee, the Trustee, and their successors, shall be the sole
right of the Company and shall not be diminished by reason of the participation
of any such adopting organization. Any participating Employer may withdraw from
the Plan and the Trust at any time without affecting other Employers not
withdrawing, by complying with the provisions of the Plan and the Trust
Agreement. Separate records shall be kept as to each Employer and its Employees.
* * * * * * *
89
ARTICLE FIFTEEN
---------------
AMENDMENT AND TERMINATION OF PLAN
SECTION 15.1. AMENDMENT OF THE PLAN. The Company may, without the consent
of any other party, make from time to time any amendment or amendments to the
Plan which do not operate retroactively to reduce or divest the then vested
interest in any Discretionary Employer Contribution Account, Matching Employer
Contribution Account, W & B Plan Rollover Account, or ESOP Transfer Account or
to reduce or divest any benefit then payable hereunder. Each such amendment
shall be in writing, signed by a duly authorized officer of the Company and
shall become effective as of the date specified therein. In addition, no such
amendment shall (i) reduce the vested percentage of any Participant with respect
to Employer contributions made either before or after the effective date of the
amendment; (ii) eliminate or reduce an early retirement benefit or a
retirement-type subsidy or eliminate an optional form of benefit with respect to
benefits attributable to service before the amendment; or (iii) restrict the
availability of an "alternative form of benefit" to a certain select group or
classification of Participants or Beneficiaries which favor the "prohibited
group," or restrict or deny a Participant through the withholding of consent or
the exercise of discretion by some person or persons other than the Participant
(and, where relevant, his Spouse) of an alternative form of benefit. For
purposes of this Section 15.1, Plan provisions will be considered to favor the
prohibited group if the group of Employees to whom the benefit is available does
not satisfy either the 70% test of Code Section 410(b)(1)(A) or the
nondiscriminatory classification test of Code Section 410(b)(1)(B). For purposes
of this Section 15.1, an alternative form of benefit encompasses the different
forms of benefit payment available under the Plan which provide that (a) a
Participant's benefits under the Plan may be paid in more than one form, or (b)
payment of a particular form of benefits may commence at some time earlier or
later than the normal date for the commencement of such benefit.
Whenever Participating Employers have elected to adopt this Plan, amendment
of this Plan by the Plan Sponsor shall be effective upon the written action of
the Plan Sponsor. Each Participating Employer shall be deemed to have authorized
irrevocably the Plan Sponsor or any person(s) duly authorized by resolution of
the Board of Directors of the Plan Sponsor, to amend and modify this Plan in any
manner it deems necessary or desirable, retroactively or prospectively, subject
to the provisions of this Article.
SECTION 15.2. RIGHT TO TERMINATE. An Employer may at any time terminate the
Plan with respect to its Employees, pursuant to resolution or decision of the
Board of Directors or other governing authority of such terminating Employer.
Upon termination with respect to an Employer, the Committee shall direct the
Trustee to distribute the share of the Trust Assets allocable to the Employees
of such Employer, as provided in Section 15.4. If the Plan is terminated with
respect to fewer than all Employers, the Plan shall continue in effect for
Employees of the remaining Employers.
SECTION 15.3. CONSOLIDATION OR MERGER. Upon an Employer's liquidation,
dissolution, bankruptcy, or insolvency, or upon its sale, consolidation or
merger to or with another organization that is not an employer hereunder, in
which such Employer is not the surviving company, the Plan will terminate
insofar as that Employer is concerned unless the successor to that Employer
90
assumes the duties and responsibilities of such Employer by adopting the Plan
and Trust, by combining the Plan and Trust with an existing plan and trust of
such successor with the consent and agreement of that Employer, or by the
establishment of a separate plan and trust to which the Trust Assets held on
behalf of the Employees of such Employer shall be transferred with the consent
and agreement of that Employer. If the successor to an Employer is itself an
Employer, such successor shall succeed to all the rights and duties under the
Plan and Trust of the Employers involved.
SECTION 15.4. LIQUIDATION OF TRUST FUND UPON TERMINATION.
(a) Upon a complete or partial termination of the Plan with respect to
any Employer, the Discretionary Employer Contribution Accounts, Matching
Employer Contribution Accounts, W & B Plan Rollover Accounts, and ESOP
Transfer Accounts, if any, of the Participants, Former Participants and
Beneficiaries affected thereby shall become fully vested and
nonforfeitable, and, subject to the restrictions of Section 15.4(b) below,
the proportionate interests of such Participants, Former Participants and
Beneficiaries in the Trust Assets, as determined by the Committee, shall be
distributed as soon as practicable after provision is made for the expenses
of administration, termination and liquidation. Distributions due to
termination of the Plan will be made in accordance with the methods of
distribution provided for in the Plan.
(b) However, notwithstanding anything to the contrary above, a
Participant's Accounts shall not be distributed before the first to occur
of the following events:
(i) Retirement;
(ii) Death;
(iii) Disability;
(iv) Separation from Service;
(v) attainment of age 59-1/2;
(vi) with respect to a Participant's Savings Account only,
incurring of a hardship (as defined in Section 10.1);
(vii) the termination of the Plan, provided that neither the
Employer nor an Affiliated Employer maintains a successor plan;
(viii) the sale, to an entity that is not an Affiliated Employer,
of substantially all of the assets used by the Employer in the trade
or business in which the Participant is employed; or
(ix) the sale, to an entity that is not an Affiliated Employer,
of an incorporated Affiliated Employer's interest in a subsidiary in
which the Participant is employed.
91
For purposes of this Section 15.4(b), the term "Affiliated Employer" shall mean
the Employers and any corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes an Employer; any
trade or business (whether or not incorporated) which is under common control
(as defined in Code Section 414(c)) with an Employer; any organization (whether
or not incorporated) which is a member of an affiliated service group (as
defined in Code Section 414(m)) which includes an Employer; and any other entity
required to be aggregated with an Employer pursuant to regulations under Code
Section 414(o).
SECTION 15.5. PERMANENT DISCONTINUANCE OF CONTRIBUTIONS. Upon a permanent
discontinuance of contributions with respect to any Employer, the Discretionary
Employer Contribution Accounts, Matching Employer Contribution Accounts, W & B
Plan Rollover Accounts, and ESOP Transfer Accounts shall become fully vested and
nonforfeitable and, unless such Employer provides by appropriate resolution that
the Plan and Trust will continue for the purpose of holding, investing, and
distributing Trust Assets pursuant to other provisions of the Plan and Trust
Agreement, the proportionate interest of the Participants, Former Participants
and Beneficiaries of such Employer in the Trust Assets, as determined by the
Committee, shall be distributed (subject to the restrictions of Section 15.4(b))
as soon as practicable after provision is made for the expenses of
administration, termination and liquidation.
SECTION 15.6. CONSOLIDATION OR MERGER OF PLAN. In the event that the Plan
is merged or consolidated with any other plan, or in the event that any assets
or liabilities of the Plan are transferred to any other plan, the benefit any
Participant, Former Participant or Beneficiary under the Plan would be entitled
to receive if such other plan were terminated immediately after such merger,
consolidation, or transfer shall be equal to or greater than the benefit such
Participant, Former Participant or Beneficiary would be entitled to receive if
the Plan terminated immediately before such merger, consolidation, or transfer.
* * * * * * *
92
ARTICLE SIXTEEN
---------------
GENERAL PROVISIONS
SECTION 16.1. NON-GUARANTEE OF EMPLOYMENT. Nothing contained in the Plan or
Trust Agreement shall be construed as a contract of employment between any
person and an Employer, as a right of any person to be continued in the
employment of an Employer (or such entity), or as a limitation of the right of
an Employer (or such entity) to discharge any person, with or without cause.
SECTION 16.2. MANNER OF PAYMENT. Subject to the provisions of Sections 11.7
and 11.8, wherever and whenever it is herein provided for payments or
distributions to be made, said payments or distributions shall be made directly
into the hands of the Participant, Former Participant, Beneficiary, or their
respective administrators, executors, or guardians, as the case may be. Deposit
to the credit of any such person in any bank or trust company selected by such
person shall be deemed to be payment into his hands.
SECTION 16.3. NONALIENATION OF BENEFITS. Except as otherwise provided below
in this Section 16.3, interests of Participants, Former Participants and
Beneficiaries under the Plan and benefits payable under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, disposition, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any liability for alimony or
other payments for property settlement or support of a Spouse or former Spouse,
or for any other relative of the Participant, Former Participant or Beneficiary,
but excluding devolution by death or mental incompetency, prior to actually
being received by the person entitled to the benefits under the terms of the
Plan; any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits payable hereunder
shall be void; the Trust Assets shall not in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements or torts of any
person entitled to benefits hereunder.
Notwithstanding anything to the contrary above, however, if the Committee
determines that a domestic relations order is a "qualified domestic relations
order" as defined in Section 206(d)(3) of ERISA, benefits shall be payable in
accordance with the applicable requirements of any such order and in accordance
with the requirements of Section 206(d)(3) of ERISA. To the extent of any
conflict between the terms of any such order and the terms of ERISA Section
206(d)(3), the latter shall control in all respects. To the extent provided in
an order, an "alternate payee," as described in Code Section 414(p), may elect
to receive an immediate distribution of such payee's benefits from this Plan.
Such a distribution may be received from any Account, as applicable.
Nothing contained in this Plan shall prevent the Trustee from complying
with a judgment or settlement entered into on or after August 3, 1997 which
requires the Trustee to reduce a Participant's benefits under the Plan by an
amount that the Participant is ordered or required to pay to the Plan if each of
the following criteria are satisfied:
(a) the order or requirement must arise:
(i) under a judgment or conviction for a crime involving the
Plan;
93
(ii) under a civil judgment (including a consent order or decree)
entered by a court in an action brought in connection with an actual
or alleged violation of Part 4 of Title I of ERISA; or
(iii) under a settlement agreement with either the Secretary of
Labor or the Pension Benefit Guaranty Corporation and the Participant
in connection with an actual or alleged violation of Part 4 of title I
of ERISA by a fiduciary or any other person.
(b) The decree, judgment, order or settlement must expressly provide
for the offset of all or part of the amount ordered or required to be paid
to the Plan against the Participant's benefits under the Plan.
(c) In addition, if the joint and survivor annuity requirements of
Code Section 401(a)(11) apply with respect to distributions from the Plan
to the Participant and the Participant has a spouse at the time at which
the offset is to be made, then one of the following three conditions must
be satisfied:
(i) Such spouse has consented in writing to such offset and such
consent is witnessed by a notary public or representative of the Plan
(or it is established to the satisfaction of a Plan representative
that such consent may not be obtained by reason of circumstances
described in Code Section 417(a)(2)(B)), or an election to waive the
right of the spouse to either a qualified joint and survivor annuity
or a qualified preretirement survivor annuity is in effect in
accordance with the requirements of Code Section 417(a);
(ii) Such spouse is ordered or required in such judgment, order,
decree, or settlement to pay an amount to the Plan in connection with
a violation of part 4 of subtitle B of title I of ERISA; or
(iii) In such judgment, order, decree, or settlement, such spouse
retains the right to receive the survivor annuity under a qualified
joint and survivor annuity provided pursuant to section
401(a)(11)(A)(i) and under a qualified preretirement survivor annuity
provided pursuant to Code Section 401(a)(11)(A)(ii), determined in
accordance with Code Section 401(a)(13)(D).
SECTION 16.4. TITLES FOR CONVENIENCE ONLY. Titles of the Articles, Sections
and Subsections hereof are for convenience only and shall not be considered in
construing the Plan.
SECTION 16.5. GOVERNING LAW. Except as may otherwise be required by
applicable federal law, the Plan and each of its provisions shall be construed
and their validity determined by the laws of the State of Texas.
SECTION 16.6. CONTRIBUTIONS CONTINGENT UPON APPROVAL. Any contribution to
the Trust Fund associated with this Plan is conditioned on initial qualification
of the Plan under Code Section 401(a) and of the exemption of the Trust created
under the Plan under Code Section 501(a). If the Commissioner of the Internal
Revenue Service, upon the Employer's request for initial approval of this Plan
94
and Trust, determines that the Plan is not qualified or the Trust is not exempt,
then the Trustee may return to each Employer, within one (1) year after the date
of final disposition of the request for initial approval, any contribution made
by the Employers, and any increment attributable to the contribution. The Plan
and Trust shall then terminate and all rights of Participants, Former
Participants and Beneficiaries with respect to such Employers' contributions
shall cease.
SECTION 16.7. PAYMENT OF EXPENSES. Except as otherwise specifically
provided herein, all expenses incident to the administration, termination, or
protection of the Plan and Trust, including but not limited to, actuarial,
legal, accounting, and Trustee fees, may be paid by the Company, which may
require reimbursement from the other Employers for their pro rata shares, or if
not paid by the Company (which payment is not obligatory), shall be paid by the
Trustee from the Trust Assets, but no amount paid pursuant to Section 17.9 or
Subsection 16.9(d) shall be paid, directly or indirectly, from the Trust Assets.
Notwithstanding the preceding, the expenses incident to maintaining an Account
for a Former Participant shall be charged to such Former Participant's Account.
SECTION 16.8. RIGHTS TO TRUST ASSETS. No Participant, Former Participant or
Beneficiary shall have any right to, or interest in, any Trust Assets upon
termination of his employment or otherwise, except as provided from time to time
under the Plan, and then only to the extent of the benefits payable to such
Participant, Former Participant or Beneficiary out of the Trust Assets. All
payments of benefits as provided for in the Plan shall be made solely out of the
Trust Assets and, except as may otherwise be provided by applicable law, neither
the boards of Directors of the Employers, the Employers, the Trustee, nor the
Committee shall be liable therefor in any manner.
SECTION 16.9. DISCLAIMER OF LIABILITY. Except as otherwise provided herein
or under Sections 404 through 409 of ERISA (to the extent applicable):
(a) Neither the Board of Directors of the Employers, the Employers,
the Trustee, nor the Committee guarantees the Trust Assets or other Assets
of the Plan in any manner against loss or depreciation, and they shall not
be liable for any act or failure to act which is made in good faith
pursuant to the provisions of the Plan and Trust Agreement.
(b) The Board of Directors of the Employers and the Employers shall
not be responsible for any act or failure to act of the Committee of the
Trustee.
(c) The Committee shall not be responsible for any act or failure to
act of the Board of Directors of the Employers, the Employers, or the
Trustee.
(d) Each Employer shall indemnify each member of its Board of
Directors against any liability or losses sustained by such member by
reason of any act or failure to act relating to the Plan or Trust in his
capacity as such member if such act or failure to act is in good faith and
does not constitute willful misconduct. Such indemnification shall include
attorney's fees and other costs and expenses reasonably incurred by such
member in defense of any action brought against him by reason of any such
act or failure to act.
95
SECTION 16.10. PERSONS MAY SERVE IN MORE THAN ONE CAPACITY. A person may
serve both as a member or secretary of the Committee and as a Trustee hereunder.
A person serving as a member of the Board of Directors or as an officer of an
Employer may serve as a member or secretary of the Committee or as a Trustee, or
both, hereunder.
SECTION 16.11. CONSTRUCTION. The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender, unless the context clearly
indicates to the contrary. The words "herein," "hereof," "hereunder" and other
similar compounds of the word "here" shall mean and refer to the entire Plan,
not to any particular provision, section, or subsection, and words used in the
singular or the plural may be construed as though in the plural or singular
where they would so apply.
SECTION 16.12. COUNTERPARTS. The Plan may be executed in any number of
counterparts, each of which shall be considered an original, and only one such
counterpart need be produced.
SECTION 16.13. NO INVOLUNTARY RETIREMENT BECAUSE OF AGE. Notwithstanding
the provisions hereof defining Normal Retirement Date and Retirement, nor any
other provision hereof, nothing contained in the Plan or Trust Agreement shall
be construed to require or permit the involuntary retirement of any Employee
solely because of age.
SECTION 16.14. MISTAKE OF FACT. Notwithstanding any contrary provision in
this Agreement, if a contribution is made by an Employer by a mistake of fact,
the contribution may be returned to the Employer within one (1) year after the
payment of the contribution. The amount of the mistaken contribution is equal to
the excess of (a) the amount contributed over (b) the amount that would have
been contributed had there not occurred a mistake of fact. Earnings attributable
to mistaken contributions may not be returned to the Employer, but losses
attributable thereto shall reduce the amount to be returned.
SECTION 16.15. DISALLOWANCE OF DEDUCTION. Notwithstanding any contrary
provision in this Agreement, any contributions by an Employer to the Plan and
Trust are conditioned on the deductibility of the contribution by the Employer
under the Code. To the extent any deduction is disallowed, the Employer, within
one (1) year following a final determination of the disallowance, whether by
agreement with the Internal Revenue Service or by final decision in a court of
competent jurisdiction, may demand repayment of the disallowed contribution, and
the Trustee shall return the contribution within one (1) year following the
disallowance. Earnings attributable to excess contributions may not be returned
to the Employer, but losses attributable thereto shall reduce the amount to be
returned.
* * * * * * *
96
ARTICLE SEVENTEEN
-----------------
PLAN ADMINISTRATION
SECTION 17.1. COMMITTEE. The Plan shall be administered by the Savings Plan
Committee. The Committee shall consist of not less than three nor more then
seven members. Each member shall be appointed, and may at any time be removed,
by the Board of Directors of the Company, and the Board of Directors of the
Company shall designate the chairman of the Committee. Any vacancy on the
Committee resulting from resignation, death, removal by the Board of Directors
of the Company, or otherwise, shall be filled by the Board of Directors of the
Company. The chief executive officer of the Company may appoint a person to fill
any vacancy during the period prior to action by the Board of Directors filling
such vacancy. All usual and reasonable expenses of the Committee shall be paid
as provided in Section 16.7. The members of the Committee shall not receive
compensation from the Plan or the Trust with respect to their services in
administering the Plan.
SECTION 17.2. CLAIMS PROCEDURE.
(a) The Committee shall make all determinations as to the right of any
person to a benefit. Any denial by the Committee of a claim for benefits
under the Plan by a Participant, Former Participant or Beneficiary shall be
stated in writing and delivered or mailed to the Participant, Former
Participant or Beneficiary. Such notice of denial shall to the best of the
Committee's ability, be written to be understood without legal or actuarial
counsel or other specialized knowledge or advice, and shall:
(i) set forth the reasons for such denial;
(ii) specify the pertinent provisions of the Plan on which such
denial is based;
(iii) describe any additional material or information necessary
for perfection of such claim and explain why such material or
information is necessary; and
(iv) explain the claims review procedure established by the
Committee under the Plan.
(b) In the case of any Participant, Former Participant or Beneficiary
whose claim for benefits under the Plan has been denied, such Participant,
Former Participant or Beneficiary, or his duly authorized representative,
may:
(i) request a review of such denial by written application mailed
or delivered to the Committee by the 60th day after receipt of such
denial; and
(ii) within such reasonable times as may be prescribed in the
claims review procedure established by the Committee,
(A) review pertinent documents; and
97
(B) submit issues and comments in writing.
(c) The Committee shall provide a full and fair review of
any request submitted under Section 17.2(b). In connection with
such review, the Committee may request an opinion from an
Employer's counsel and shall be fully protected by the Company
and such Employer from any liability resulting from good faith
reliance on such opinion.
SECTION 17.3. POWERS AND DUTIES OF THE COMMITTEE. The Committee shall have
such powers and duties as may be necessary to discharge its duties hereunder,
including, but not by way of limitation, the following powers and duties:
(a) To administer the Plan;
(b) To construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any
benefits hereunder;
(c) To review the performance of the Trustee and to report thereon to
the Board of Directors of the Company;
(d) To prescribe and establish (i) procedures to be followed and forms
to be used by Employees, Participants, Former Participants or Beneficiaries
for commencing or resuming participation in the Plan and for applying for
benefits from the Plan and (ii) such additional procedures and forms for
reviewing denials of claims for benefits as the Committee deems advisable
which are not inconsistent with the provisions of the Plan or applicable
law, but if any procedure or form is prescribed by the Plan or by
applicable law, such procedure or form shall be used for the purpose
prescribed;
(e) To receive from the Employers and from Employees, Participants,
Former Participants and Beneficiaries such information as shall be
necessary for the proper administration of the Plan;
(f) To prepare and distribute, in such manner as required by
applicable law, information explaining the Plan;
(g) To prepare such reports with respect to the Plan as are required
by applicable law and such other reports as are reasonable and appropriate
and requested by the Employers;
(h) To appoint or employ such agents or employees as it deems
advisable, including legal counsel, accountants, and actuaries, as needed
for the discharge of its duties;
(i) To allocate in writing any of its rights, powers, or duties
hereunder to a particular member or members of the Committee; in the event
of any such allocation, the exercise of right or power, or the discharge of
a duty has been allocated shall be deemed to be an act of the Committee;
and
98
(j) To designate persons who are not members of the Committee to exercise
any of the foregoing powers, to carry out any of the foregoing duties,
or to authorize benefit payments under Section 17.2.
SECTION 17.4. LIMITATION ON POWERS. The Committee shall have no power to
add to, subtract from, or modify any of the terms of the Plan, or to waive or
fail to apply any requirements of eligibility for benefits under the Plan.
SECTION 17.5. LIMITATION ON DUTIES. Except as elsewhere provided herein,
the Committee shall have no power to manage or responsibility for managing the
investing (including selection, acquiring, retaining, or disposing) of the Trust
Assets.
SECTION 17.6. RULES AND DECISIONS. The Committee may adopt such rules as it
deems necessary, desirable, or appropriate. All rules and decisions of the
Committee shall be uniformly and consistently applied to all Employees,
Participants, Former Participants, and Beneficiaries in similar circumstances.
Any rule or decision which is not inconsistent with the provisions of the Plan
shall be conclusive and binding upon all persons affected by it, and, except as
otherwise provided by applicable law or herein, there shall be no appeal from
any decision by the Committee which is within its authority. When making a
determination or calculation, the Committee shall be entitled to rely upon
information furnished by an Employer, the legal counsel of an Employer, or an
accountant or actuary of the Plan. When making any decision hereunder, the
Committee may consult with any Participant, Former Participant, or Beneficiary
affected thereby and may, if appropriate, take such Participant's, Former
Participant's, or Beneficiary's preference into account, but the Committee shall
not be required to consult with or follow the preference of any Participant,
Former Participant, or Beneficiary in the making of any decision hereunder
unless it is expressly required to do so by other provisions hereof or by
applicable law.
SECTION 17.7. COMMITTEE PROCEDURES. The Committee may act at a meeting or
in writing without a meeting. The Committee shall appoint a secretary, who may
or may not be a Committee member, and advise the Trustee of such action in
writing. The secretary shall keep a record of all meetings and forward all
necessary communications to the Employers or the Trustee. The Committee may
adopt such bylaws and regulations as it deems desirable for the conduct of its
affairs. All decisions of the Committee shall be made by the vote of a majority
of the total number of members at the time serving on the Committee including
actions in writing taken without a meeting.
SECTION 17.8. LIABILITY OF COMMITTEE. Except as may otherwise be required
by applicable law, no member of the Committee shall be liable for any act or
omission of his own or of any agent or employee appointed or employed by the
Committee, unless such act or omission is the result of his own willful
misconduct or bad faith. The Company shall indemnify each such member against
any liability or loss sustained by him by reason of any act or failure to act in
his capacity as such member if such act or failure to act is in good faith and
does not constitute willful misconduct. Such indemnification shall include
attorney's fees and other costs and expenses reasonably incurred by such member
in defense of any action brought against him by reason of any such act or
failure to act.
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SECTION 17.9. BONDING. The secretary and members of the Committee and any
persons designated under Subsection 17.3(j) shall serve without bond except as
otherwise required by applicable law or by the Company. The premium on any bond
required of the secretary or members of the Committee shall be paid as provided
in Section 16.7.
IN WITNESS WHEREOF, FROZEN FOOD EXPRESS INDUSTRIES, INC. has caused this
Plan to be executed by its duly appointed officers on this 24 day of March,
2000.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
By: /S/ STONEY M. STUBBS, JR.
-------------------------
Stoney M. Stubbs, Jr.
President
ATTEST:
/S/ LEONARD W. BARTHOLOMEW
Leonard W. Bartholomew
Secretary