FX ENERGY, INC.
401(k) STOCK BONUS PLAN
RESTATED EFFECTIVE JANUARY 1, 2004
(Prepared by Callister Nebeker & McCullough)
TABLE OF CONTENTS
PAGE
ARTICLE TITLE NO.
ARTICLE I ESTABLISHMENT AND RESTATEMENT.......................................1
1.01 Establishment...............................................1
1.02 History.....................................................1
1.03 Intent......................................................1
1.04 EGTRRA Provisions...........................................1
1.05 Limitation on Applicability.................................1
ARTICLE II DEFINITIONS OF TERMS...............................................2
2.01 "Account"...................................................2
2.02 "Accrued Benefit"...........................................2
2.03 "Administrator" or "Plan Administrator".....................3
2.04 "Affiliated Group"..........................................3
2.05 "Age".......................................................3
2.06 "Anniversary Date"..........................................3
2.07 "Beneficiary"...............................................3
2.08 "Board of Directors"........................................3
2.09 "Code"......................................................3
2.10 "Compensation" or "Annual Compensation".....................3
2.11 "Contingent Beneficiary"....................................4
2.12 "Disability"................................................4
2.13 "Distribution Date".........................................4
2.14 "Effective Date"............................................4
2.15 "Elective Deferral".........................................4
2.16 "Eligible Employee".........................................4
2.17 "Employee"..................................................4
2.18 "Employer" or "FX Employer".................................4
2.19 "Employer Contribution".....................................5
2.20 "Employer Securities".......................................5
2.21 "Entry Date"................................................5
2.22 "ERISA".....................................................5
2.23 "Excluded Employee".........................................5
2.24 "Fiduciary".................................................6
2.25 "Highly Compensated Employee" or "HCE"......................6
2.26 "Inactive Participant"......................................7
2.27 "Investment Fund"...........................................7
2.28 "Investment Manager"........................................7
2.29 "K-Test Average Contribution Percentage"....................7
2.30 "K-Test Contribution Percentage"............................7
2.31 "K-Test Contributions"......................................7
2.32 "Leased Employee"...........................................8
2.33 "Limitation Year"...........................................8
2.34 "M-Test Average Contribution Percentage"....................8
2.35 "M-Test Contribution Percentage"............................8
2.36 "M-Test Contributions"......................................8
2.37 "Matching Contribution".....................................9
2.38 "Named Fiduciary"...........................................9
2.39 "Net Profit"................................................9
2.40 "Non-Highly Compensated Employee" or "NHCE".................9
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2.41 "Normal Retirement Age".....................................9
2.42 "Normal Retirement Date"....................................9
2.43 "Participant"...............................................9
2.44 "Plan"......................................................9
2.51 "Plan Sponsor"..............................................9
2.52 "Plan Year".................................................9
2.53 "Predecessor Plan".........................................10
2.54 "Prior Plan"...............................................10
2.55 "Qualified Matching Contribution"..........................10
2.56 "Qualified Non-Elective Contribution"......................10
2.57 "Transferred Benefits".....................................10
2.58 "Trust"....................................................10
2.59 "Trust Fund"...............................................10
2.60 "Trustee"..................................................10
2.61 "Valuation Date"...........................................10
2.62 "Vested Interest" or "Vested Accrued Benefit"..............10
ARTICLE III SERVICE DEFINITIONS AND RULES....................................11
3.01 "Eligibility Computation Period"...........................11
3.02 "Eligibility Service"......................................11
3.03 "Employment Commencement Date".............................11
3.04 "Hour of Service"..........................................11
3.05 "One Year Break in Service"................................13
3.06 "Re-employment Commencement Date"..........................13
3.07 "Termination of Employment"................................13
3.08 "Vesting Computation Period"...............................14
3.09 "Year of Service"..........................................14
3.10 "Year of Eligibility Service"..............................14
3.11 "Year of Vesting Service"..................................14
3.12 Special Rules for Crediting Service........................14
3.13 Qualified Military Service Rules...........................14
ARTICLE IV ELIGIBILITY AND PARTICIPATION.....................................16
4.01 Age and Service Requirements...............................16
4.02 Plan Administrator to Furnish Eligibility Information......16
4.03 Information to be Provided by Employee.....................16
4.04 Reclassification of an Eligible Employee or
Excluded Employee........................................16
4.05 Re-employment and Commencement of Participation............16
4.06 Election Not To Participate................................17
4.07 Effect of Participation....................................17
ARTICLE V PARTICIPANT AND EMPLOYER CONTRIBUTIONS.............................18
5.01 Elective Deferrals.........................................18
5.02 Payment to Trustee.........................................19
5.03 Suspension of Deferrals....................................19
5.04 No Voluntary Contributions by Participants.................19
5.05 Rollover Contributions by Participants.....................20
5.06 Employer Matching Contributions............................20
5.06A Safe Harbor Employer Matching Contributions................21
5.07 Employer Profit Sharing Contributions......................22
5.08 Time and Method of Payment.................................22
5.09 Employer Contribution Accounts.............................22
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5.10 Limitations on Contributions...............................23
5.11 Excess Contributions.......................................24
5.12 Correction of Excess Contributions.........................25
ARTICLE VI ALLOCATIONS TO ACCOUNTS...........................................27
6.01 Revaluation of Assets......................................27
6.02 Allocation of Contributions and Forfeitures................27
6.03 Adjustment of Accounts.....................................28
6.04 Eligibility for Allocation of Employer Matching and
Profit Sharing Contributions.............................29
6.05 Suspension of Accrual Requirements for Employer
Profit Sharing Contributions.............................30
6.06 New Comparability Formula for Allocation of Employer
Profit Sharing Contributions...............................30
ARTICLE VII LIMITATIONS ON ALLOCATIONS.......................................34
7.01 Special Definitions........................................34
7.02 Coordination With Other Plans..............................39
7.03 Order of Limitations.......................................39
7.04 Aggregation of Plans.......................................40
7.05 Suspense Account...........................................40
ARTICLE VIII IN-SERVICE AND HARDSHIP WITHDRAWALS.............................41
8.01 Withdrawals Due to Attainment of Age 59 1/2,
Completion of Service or Hardship........................41
8.02 Financial Hardship Distribution Rules......................41
8.03 Determination of Immediate and Heavy Financial Need........42
8.05 Withdrawal of Rollover Contributions.......................42
ARTICLE IX RETIREMENT BENEFITS...............................................43
9.01 Normal or Late Retirement..................................43
9.02 Disability Retirement......................................43
9.03 Method of Payment..........................................43
9.04 Time of Payment............................................44
9.05 Minimum Distribution Requirements..........................44
9.06 Qualified Joint and Survivor Annuity.......................47
9.07 Distribution of Employer Securities........................49
9.09 Distribution of Transferred Benefits.......................49
ARTICLE X DEATH BENEFITS.....................................................50
10.01 Death Benefits Payable.....................................50
10.02 Designation of Beneficiary.................................50
10.03 Death Benefit Payment Procedure............................50
10.04 Required Distributions Upon Death..........................51
10.05 Qualified Pre-retirement Survivor Annuity and
Related Matters..........................................53
10.06 Optional Forms of Benefit Guaranteed.......................56
ARTICLE XI BENEFITS UPON OTHER TERMINATION OF EMPLOYMENT.....................57
11.01 Vested Amounts.............................................57
11.02 Distribution of Vested Interest:...........................57
11.03 Eligible Rollover Distributions............................58
11.04 Breaks in Service and Vesting..............................60
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11.05 No Increase in Pre-break Vesting...........................60
11.06 Disposition of Forfeitures.................................60
11.07 Distribution to Participants Who Are Less Than
100% Vested..............................................61
11.08 Repayment of Distribution..................................61
11.09 Restoration of Accounts....................................61
11.10 Amendments to the Vesting Schedule.........................62
ARTICLE XII FIDUCIARY DUTIES.................................................63
12.01 General Fiduciary Duty.....................................63
12.02 Allocation of Responsibilities.............................63
12.03 Delegation of Responsibilities.............................63
12.04 Liability for Allocation or Delegation of
Responsibilities.........................................63
12.05 Liability for Co-Fiduciaries...............................63
12.06 Same Person May Serve in More than One Capacity............64
12.07 Indemnification............................................64
ARTICLE XIII THE PLAN ADMINISTRATOR..........................................65
13.01 Appointment of Plan Administrator..........................65
13.02 Acceptance by Plan Administrator...........................65
13.03 Signature of Plan Administrator............................65
13.04 Appointment of an Investment Manager.......................65
13.05 Duties of the Plan Administrator...........................65
13.06 Claims Procedure...........................................66
13.07 Claims Review Procedure....................................66
13.08 Limitations of Actions on Claims...........................67
13.09 Compensation and Expenses of Plan Administrator............67
13.10 Removal or Resignation.....................................67
13.11 Records of Plan Administrator..............................67
13.12 Other Responsibilities.....................................67
ARTICLE XIV THE TRUSTEE......................................................68
14.01 Appointment of Trustee.....................................68
14.02 Acceptance by Trustee......................................68
14.03 Provisions of Trust Agreement..............................68
14.04 Participant Voting Rights..................................68
14.05 Investment Committee.......................................68
14.06 Liability for Plan Expenses................................68
14.07 Payment From the Trust Fund................................69
ARTICLE XV THE EMPLOYER......................................................70
15.01 Notification...............................................70
15.02 Record Keeping.............................................70
15.03 Bonding....................................................70
15.04 Signature of Employer......................................70
15.05 Plan Counsel and Expenses..................................70
15.06 Other Responsibilities.....................................70
15.07 Affiliated Groups..........................................70
15.08 Employer Contributions.....................................71
ARTICLE XVI PLAN AMENDMENT OR MERGER.........................................72
16.01 Power to Amend.............................................72
16.02 Limitations on Amendments..................................72
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16.03 Method of Amendment........................................72
16.04 Notice of Amendment........................................72
16.05 Merger or Consolidation....................................72
ARTICLE XVII TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS..................74
17.01 Right to Terminate.........................................74
17.02 Effect of Termination......................................74
17.03 Manner of Distribution.....................................74
17.04 No Reversion...............................................74
17.05 Termination of an Employer.................................75
17.06 Partial Termination........................................75
ARTICLE XVIII FUNDING POLICY FOR PLAN BENEFITS...............................76
18.01 Funding Method.............................................76
18.02 Investment Policy..........................................76
18.03 No Purchase of Life Insurance Contracts....................76
18.04 Investment Fund............................................76
18.05 Non-transferability of Annuity Contracts...................76
18.06 Participant Directed Investments...........................77
18.07 Establishment of Separate Funds............................77
ARTICLE XIX TOP-HEAVY PROVISIONS.............................................79
19.01 Application................................................79
19.02 Special Definitions........................................79
19.03 Top-Heavy or Super Top-Heavy Minimum Required Allocation...83
19.04 Non-forfeitability of Minimum Top-Heavy Allocation.........84
19.05 Top Heavy Compensation Limitation..........................84
19.06 Minimum Vesting Provision..................................85
19.07 Adjustments to Limitations.................................85
19.08 Participant Elective Deferrals.............................85
19.09 EGTRRA Modification of Top-Heavy Rules.....................85
ARTICLE XX PROVISIONS AFFECTING BENEFITS.....................................87
20.01 Availability of Loans......................................87
20.02 Loan Administration........................................87
20.03 Amount of Loan.............................................87
20.04 Collateral Requirements....................................87
20.05 Loan Terms.................................................88
20.06 Accounting for Loans.......................................88
20.07 Effect of Termination of Employment or Plan................88
20.08 Spousal Consent............................................88
20.09 Anti-Alienation............................................88
20.10 Qualified Domestic Relations Orders........................89
20.11 QDRO Definitions...........................................89
ARTICLE XXI MULTIPLE EMPLOYER PROVISIONS.....................................90
21.01 Adoption by Other FX Employers.............................90
21.02 Requirements of Participating FX Employers.................90
21.03 Designation of Agent.......................................90
21.04 Employee Transfers.........................................90
21.05 Amendment..................................................90
21.06 Discontinuance of Participation............................90
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21.07 Administrator's Authority..................................91
21.08 Participating Employer Contributions.......................91
ARTICLE XXII REPURCHASE OF DISTRIBUTED EMPLOYER SECURITIES...................92
22.01 Put option.................................................92
22.02 Restriction on Employer Securities.........................92
22.03 Lifetime Transfer/Right of First Refusal...................92
22.04 Payment of Purchase Price..................................93
22.05 Notice.....................................................93
22.06 Terms and Definitions......................................93
ARTICLE XXIII MISCELLANEOUS..................................................94
23.01 Participant's Rights.......................................94
23.02 Actions Consistent with Terms of Plan......................94
23.03 Performance of Duties......................................94
23.04 Validity of Plan...........................................94
23.05 Legal Action...............................................94
23.06 Gender and Number..........................................94
23.07 Uniformity.................................................94
23.08 Headings...................................................94
23.09 Receipt and Release for Payments...........................94
23.10 Payments to Minors, Incompetents...........................95
23.11 Missing Persons............................................95
23.12 Transfer of Interest.......................................95
23.13 Prohibition Against Diversion of Funds.....................95
23.14 Period of the Trust........................................96
23.15 Applicability of Plan......................................96
23.16 Misstatement of Age........................................96
23.17 Return of Contributions to the Employer....................96
23.18 Counterparts...............................................96
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ARTICLE I
ESTABLISHMENT AND RESTATEMENT
1.01 Establishment: This Plan is an amendment and restatement of the FX
Energy, Inc. 401(k) Profit Sharing Plan ("Prior Plan") and is signed and
executed on the day set forth at the end of this Plan, effective for all
purposes (except as specifically set forth hereafter) as of January 1, 2004.
This Plan is established and maintained by FX Energy, Inc., a corporation
organized and existing under the laws of Nevada, with its principal offices
located at Salt Lake City, Utah, hereinafter referred to as the "Plan Sponsor."
With the consent of FX Energy, Inc., this Plan may be adopted by other Employers
affiliated with FX Energy, Inc.
1.02 History: Effective as of January 1, 1999, FX Energy, Inc.
established the FX Energy, Inc. 401(k) Profit Sharing Plan ("Prior Plan") and
executed as part of the Prior Plan a Trust Agreement to provide retirement
benefits for eligible Employees of FX Energy, Inc. and its affiliated companies.
The Prior Plan was subsequently restated and amended effective January 1, 2002,
to comply with all requirements of the legislation known collectively as "GUST,"
and to include amendments to reflect certain provisions of the Economic Growth
and Tax Relief Reconciliation Act of 2001 ("EGTRRA").
1.03 Intent: FX Energy, Inc. intends by this Plan to amend and restate
the Prior Plan to for the benefit of its Employees and those Employees of its
affiliated companies who shall meet the eligibility requirements hereinafter set
forth and for the benefit of the beneficiaries of such Employees, respectively,
as hereinafter provided. FX Energy, Inc., also intends that this Plan shall
permit FX Energy, Inc. to make contributions of Employer Securities and shall
permit Participants to invest in additional shares of Employer Securities. FX
Energy, Inc. further intends that this Plan shall meet all the requirements of
the Internal Revenue Code of 1986 ("Code") and the Employee Retirement Income
Security Act of 1974 ("ERISA"). In addition to the 401(k) provisions herein, FX
Energy, Inc., intends that this Plan be a stock bonus plan and hold Employer
Securities as contributed. The Plan shall be interpreted, wherever possible, to
comply with the terms of the Code and ERISA and all formal regulations and
rulings issued thereunder.
1.04 EGTRRA Provisions: This Plan incorporates certain provisions
intended to comply in good faith with of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). These provisions are to be construed in
accordance with EGTRRA and guidance issued thereunder. Unless otherwise
indicated provisions included in this Plan in compliance with EGTRRA shall be
effective as of the first day of the first plan year beginning after December
31, 2001. Provisions included in this Plan that conform to EGTRRA shall
supersede all other provisions of the Plan to the extent those provisions are
inconsistent therewith.
1.05 Limitation on Applicability: The provisions of this Plan shall
apply only to persons who are or who become Participants in this Plan on or
after the Effective Date. Except as specifically provided in this Plan, the
provisions of the Prior Plan will continue to apply to persons who are former
Employees on the Effective Date, unless and until such time as such persons may
again become Participants in this Plan.
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ARTICLE II
DEFINITIONS OF TERMS
As used in this Plan and Trust Agreement, the following words and
phrases shall have the meanings indicated, unless the context clearly requires
another meaning.
2.01 "Account" shall mean the Account established and maintained by the
Plan Administrator for a Participant with respect to any interest in the
Investment Fund. Each Participant's Account shall be credited or charged with
contributions, distributions, earnings and losses as provided herein. The
following separate sub-accounts shall be established for each Participant, as
applicable, and in the aggregate they shall constitute the Participant's
Account:
(a) "Participant Elective Deferral Account" shall mean the Account
that is attributable to the contributions made by the Employer
pursuant to an election by the Participant under Section 5.01.
(b) "Participant Rollover Account" shall mean the Account that is
attributable to contributions received pursuant to Section
5.05.
(c) "Employer Matching Contribution Account" shall mean the
Account that is attributable to matching contributions made by
the Employer pursuant to Sections 5.06 and 5.06A.
(d) "Employer Profit-Sharing Contribution Account" shall mean the
Account that is attributable to the Profit-Sharing
contributions made by the Employer pursuant to Section 5.07.
(e) "Employer Securities Account" shall mean the Account
maintained for each Participant to hold the Participant's
share of Employer Securities (including fractional shares)
contributed in kind by the Employer to the Trust, forfeitures
of Employer Securities, stock dividends on Employer Securities
and Employer Securities acquired by the Trust pursuant to
Participant investment direction.
(f) "General Investments Account" shall mean the Account that is
attributable to all contributions made to the Plan for the
benefit of the Participant that are not comprised of Employer
Securities, together with all forfeitures, earnings and
accruals thereon.
(g) "Predecessor Plan Account" shall mean the Account that is
attributable to assets transferred from a Predecessor Plan
("Transferred Benefits").
Certain sub-accounts may include or incorporate assets from other
sub-accounts. The maintenance of separate sub-accounts is for
accounting purposes only and segregation of the assets of the Plan
shall not be required.
2.02 "Accrued Benefit" shall mean, as of any date, the sum of the
values in each of a Participant's Accounts as of the most recent preceding
Valuation Date, plus any contributions to and minus any distributions from the
Accounts since the Valuation Date, plus the cash surrender value of all
Insurance Contracts and allocated annuity contracts purchased for a Participant.
2
2.03 "Administrator" or "Plan Administrator" shall mean the person,
persons, or corporation administering this Plan, as provided in Article XIII
hereof, and any successor or successors thereto.
2.04 "Affiliated Group" shall mean a group of corporations, trades or
businesses that constitute a controlled group of corporations, trades or
businesses as defined in Code ss.ss.414(b) and (c) and shall also include a
group of corporations, partnerships or other organizations that constitute an
affiliated service group as defined in Code ss.414(m) or is treated as a single
employer under Code ss.414(o) and the regulations thereunder.
2.05 "Age" shall mean a person's attained age in completed years and
months as of the date determined.
2.06 "Anniversary Date" shall be the first day of each Plan Year.
2.07 "Beneficiary" shall mean any person, persons, or trust designated
by a Participant on a form as the Plan Administrator may prescribe to receive
any death benefit that may be payable hereunder if such person or persons
survive the Participant. This designation may be revoked at any time in similar
manner and form. In the event of the death of the designated Beneficiary prior
to the death of the Participant, the Contingent Beneficiary shall be entitled to
receive any death benefit.
2.08 "Board of Directors" shall mean:
(a) In the case of a corporation, its Board of Directors; or
(b) In the case of a partnership or joint venture, its controlling
partners.
2.09 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.10 "Compensation" or "Annual Compensation" shall mean the amount of
all base salary payments and wages for personal services rendered that is paid
to an Employee during the Plan Year by an FX Employer, including overtime pay,
commissions, bonuses and lump sum severance payments, unless such amounts are
specifically excluded from consideration as Compensation under an employment
agreement between the Employee and the FX Employer. Compensation shall be
determined before deductions for federal income taxes, state income taxes and
Social Security (FICA) taxes, before deductions for contributions by salary
reduction to this Plan or any other plan that meets the requirements of Code
ss.ss.401(k) or 125 and are sponsored by an FX Employer, before deductions for
Participant contributions to any insurance program sponsored by an FX Employer
and before deferral pursuant to any written contract of deferred compensation
between the Participant and an FX Employer. Compensation shall not include
director's fees, allowances or reimbursements for expenses, relocation payments,
merchandise and service discounts, the value of insurance coverage, automobile
or mileage allowances, parking or public transportation payments not includable
in gross income by reason of Code ss.132(f)(4), amounts realized from the
exercise of a non-qualified stock option, or when restricted stock (or property)
held by a Participant either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture, amounts realized from the sale, exchange,
or other disposition of stock acquired under a qualified stock option, benefits
in the form of property or the use of property, or other fringe benefits and
amounts deferred pursuant to a written contract of deferred compensation between
the Participant and an FX Employer. Unless specifically included by this
Section, payments or contributions to or for the benefit of a Participant under
any deferred compensation plan, pension, profit sharing, group life or health
insurance, hospitalization or other employee benefit plan or any
3
payments from such a plan and any amounts paid at or after termination of
employment (on account of such termination), such as installment severance
payments, vacation and sick leave cash-outs, shall not be included in
Compensation. For purposes of a contribution or an allocation under the Plan
based on compensation, Annual Compensation shall only include amounts actually
paid an Employee during the period the Employee is a Participant in the Plan.
Effective for Plan Years commencing on and after January 1, 2002,
Annual Compensation of each Participant taken into account in determining
allocations for any Plan Year shall not exceed Two Hundred Thousand Dollars
($200,000), as adjusted for cost-of-living increases in accordance with Code
ss.401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to Annual Compensation for the Plan Year that begins with or within such
calendar year. Prior to January 1, 2002, the Participant's Annual Compensation
taken into account for any Plan Year shall not exceed One Hundred Fifty Thousand
Dollars ($150,000), or such greater or lesser amount, adjusted as provided in
Code ss.401(a)(17)(B). Aggregation of family members' compensation shall not be
required or allowed when determining Annual Compensation.
2.11 "Contingent Beneficiary" shall mean the person, persons, or trust
duly designated by the Participant to receive any death benefit from the Plan in
the event the designated Beneficiary does not survive the Participant.
2.12 "Disability" shall mean a mental or physical disease or condition
that can be expected to result in death or that can be expected to last for a
continuous period of at least six (6) months. In making this determination, the
Administrator may employ a doctor who is licensed and qualified to practice
medicine in any State to examine the Participant and then issue an opinion as to
the disability of the Participant involved. Notwithstanding the foregoing, a
Participant who is eligible to receive Social Security disability payments shall
be deemed to be disabled without further proof.
2.13 "Distribution Date" shall mean the first day of the first month
for which an amount is payable, or the date on which a benefit is actually paid
or begins to be paid.
2.14 "Effective Date" shall mean generally January 1, 2004, or such
alternate date with respect to any provision as may be specified herein. All
provisions of this Plan as restated and amended shall be effective as of that
date except to the extent this Plan provides for an alternate date. The original
effective date of the Prior Plan was January 1, 1999.
2.15 "Elective Deferral" shall mean a contribution to the Plan under a
cash or deferred arrangement as defined in Code ss.401(k) to the extent not
includable in gross income, which is made pursuant to an election and
authorization by a Participant through a Salary Reduction Agreement consistent
with the provisions of Section 5.01.
2.16 "Eligible Employee" shall mean any Employee who is not an Excluded
Employee.
2.17 "Employee" shall mean any person who is employed by an FX Employer
in any capacity other than solely as a director.
2.18 "Employer" or "FX Employer" shall mean the Plan Sponsor and any
other entity who, with the authorization of the Plan Sponsor, may adopt this
Plan. Solely for purposes of determining Eligibility Service, Years of Vesting
Service and One Year Breaks in Service, any entity not adopting this Plan that,
together with the Plan Sponsor, is a member of an Affiliated Group shall also be
treated as an Employer for the period of time during which such entity was a
member of such
4
group. FX Employers may, at the option of the Plan Sponsor, be identified by a
list attached as an addendum to this Plan, or through separate participation
agreements, that reflect adoption by the FX Employer of this Plan.
2.19 "Employer Contribution" shall mean any contribution made to this
Plan on behalf of an Employee by the Employer. For purposes of the investment
provisions in Section 18.07 Elective Deferrals shall not be considered to be
Employer Contributions, regardless of any other characterization of such
Deferrals under the Plan or the Code.
2.20 "Employer Securities" shall mean common stock issued by the
Employer (or by a corporation that is a member of an Affiliated Group of which
the Employer is a member) that is readily tradeable on an established securities
market. If there is no stock that meets this requirement, then "Employer
Securities" shall mean common stock issued by the Employer (or by a corporation
that is a member of an Affiliated Group of which the Employer is a member)
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 of 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.
Noncallable preferred stock shall be deemed "Employer Securities" if it
is convertible at any time into stock that constitutes "Employer Securities"
hereunder and if the conversion is at a price that is reasonable on its date of
acquisition by the Trust.
2.21 "Entry Date" shall mean, solely for purposes of participation
under Article IV, the date an Employee became or becomes a Participant in the
Plan. Entry Dates occur on each January 1, April 1, July 1 and October 1.
2.22 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
2.23 "Excluded Employee" shall mean a member of that class of Employees
who are not eligible to participate in the Plan or accrue any benefit under the
Plan, regardless of employment status or the number of hours worked by the
Employee. The class of such Employees includes:
(a) Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee
representatives and the Employer under which retirement
benefits were the subject of good faith bargaining between
said Employee representatives and the Employer.
(b) Employees who are designated by the Employer to be in any of
the following classifications:
(i) consultant,
(ii) independent contractor, or
(iii) Leased Employee.
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It is expressly intended that an individual identified or
determined by the Employer to be in one of the above
classifications shall be ineligible to participate in the Plan
without regard to whether a court, administrative agency or
other fact-finder subsequently determines that the individual
was not or is not in fact in that classification.
(c) Employees who are employed by an entity that is part of a
Affiliated Group with an FX Employer, but that entity has not
adopted and does not participate in this Plan.
2.24 "Fiduciary" shall mean and include the Trustee, Plan
Administrator, Plan Sponsor, Investment Manager, and any other person or
corporation who:
(a) Exercises any discretionary authority or discretionary control
respecting management of the Plan or exercises any authority
or control respecting management or disposition of its assets;
(b) Renders investment advice for a fee or other compensation,
direct or indirect, with respect to any moneys or other
property of the Plan, or has any authority or responsibility
to do so;
(c) Has any discretionary authority or discretionary
responsibility in the administration of the Plan; or
(d) Is described as a "fiduciary" in Sections 3(14) or (21) of
ERISA or is designated to carry out fiduciary responsibilities
pursuant to this agreement to the extent permitted by Section
405(c)(1)(B) of ERISA.
2.25 "Highly Compensated Employee" or "HCE" shall mean an Employee,
other than a non-resident alien receiving no earned income from the Employer
from sources within the United States, who:
(a) was at any time during the Plan Year or the Look-back Year a
Five Percent Owner (as defined in Section 19.02(c)); or
(b) received Compensation from the Employer in the Look-back Year
in excess of Ninety Thousand Dollars ($90,000) and was in the
Top Paid Group for the Look- back Year.
"Look-back Year" means the Plan Year immediately preceding the Plan
Year for which the determination is being made. An Employee is in the "Top Paid
Group" if the Employee is in the group consisting of the top twenty percent
(20%) of Employees when ranked on the basis of Compensation paid during the Look
Back Year. When calculating the number of Employees in the Top Paid Group the
following Employees shall be excluded: (i) Employees who have not completed 6
months of service; (ii) Employees who normally work less than 17 1/2 hours per
week; (iii) Employees who normally work not more than six months during any
year; (iv) Employees who have not attained Age 21; and (v) Employees who are
Excluded Employees by reason of Section 2.25(a). The Ninety Thousand Dollar
($90,000) amount in (b) above shall be adjusted for cost of living as provided
under Code ss.415(d), except that the base period shall be the calendar quarter
ending September 30, 1996.
6
A former Employee who was a Highly Compensated Employee upon
Termination of Employment or at any time after attaining Age fifty-five (55)
shall be treated as a Highly Compensated Employee. No family aggregation rules
shall apply when determining who is a Highly Compensated Employee and no
Employee who is a family member of any Highly Compensated Employee shall be
required or considered to be a single Employee with the Highly Compensated
Employee. For purposes of this Section Compensation is defined as in Section
7.01(b) of this Plan, but shall include contributions made by the Employer to a
plan of deferred compensation otherwise excluded in Section 7.01(b).
2.26 "Inactive Participant" shall mean an individual who retains and is
entitled to receive a distribution of an Accrued Benefit from the Plan, but who
is not currently eligible to make Elective Deferral Contributions or receive an
allocation of Employer Contributions or forfeitures, without regard to whether
the individual has incurred a Termination of Employment.
2.27 "Investment Fund" shall mean all assets of the Trust Fund.
2.28 "Investment Manager" shall mean any Fiduciary (other than a
Trustee or Named Fiduciary) who:
(a) Has the power to manage, acquire or dispose of any asset of
the Plan;
(b) Is (i) registered as an investment advisor under the
Investment Advisors Act of 1940; (ii) a bank as defined in
that Act; or (iii) is an insurance company qualified to
perform services described in subsection (a) above under the
laws of more than one state; and
(c) Has acknowledged in writing that he is a Fiduciary with
respect to the Plan.
2.29 "K-Test Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the K-Test Contribution Percentages of the
Participants in a group.
2.30 "K-Test Contribution Percentage" shall mean the ratio (expressed
as a percentage) of a Participant's K-Test Contributions for a Plan Year to the
Participant's Compensation for the Plan Year. The K-Test Contribution Percentage
for a Participant who is a Highly Compensated Employee shall be determined by
combining all cash or deferred arrangements under which the Highly Compensated
Employee is eligible to participate (other than those that may not be
permissively aggregated) with this Plan as though they were a single
arrangement. The K-Test Contribution Percentage for a Participant who has made
no Elective Deferral contributions and who is not credited with any K-Test
Contributions for the Plan Year shall be zero (0).
2.31 "K-Test Contributions" shall mean, for any Plan Year, a
Participant's Elective Deferrals, plus, if so elected by the Employer, part or
all of the Qualified Non-Elective Contributions and Qualified Matching
Contributions allocated to the Participant for such year, provided that, any
Qualified Non-Elective Contributions included as K-Test Contributions shall not
increase the difference between the K-Test Average Contribution Percentage for
Highly Compensated Employees and the K-Test Average Contribution Percentage for
Non-Highly Compensated Employees; and, further provided that, no Qualified
Non-Elective Contributions or Qualified Matching Contributions included as
K-Test Contributions shall be included as M-Test Contributions. In determining
the amount of a Participant's Elective Deferrals under this Section the Plan
Administrator shall take into account elective deferrals made by the Participant
under any other plan that is aggregated with this Plan for purposes of Code
ss.401(a)(4) or Code ss.410(b) (other than Code ss.410(b)(2)(A)(ii)) and any
7
other plan satisfying Code ss.401(k)(3) and Reg. ss.1.401(k)-1(b)(3) that the
Employer elects to permissively aggregate with this Plan, by treating all such
plans and this Plan as a single plan.
2.32 "Leased Employee" shall mean any person who, pursuant to an
agreement between the FX Employer and any other person or organization (leasing
organization), performs services for the Employer (or for the FX Employer and
related persons determined in accordance with Code ss.414(n)(6)), and the
services are performed under the primary direction or control of the FX
Employer.
Contributions or benefits provided by the leasing organization that are
attributable to services performed for the Employer shall be treated as provided
by the Employer. If the Leased Employees constitute not more than twenty percent
(20%) of the FX Employer's non-highly compensated work force, the preceding
sentence shall not apply to any Leased Employee who is covered by a money
purchase pension plan providing:
(a) A non-integrated employer contribution rate of at least ten
percent (10%) of compensation; and
(b) Immediate participation with respect to any person who has
received compensation from the leasing organization of at
least One Thousand Dollars ($1,000) in any one of the four
most recent plan years of such plan; and
(c) Full and immediate vesting.
2.33 "Limitation Year" shall mean the Plan Year, unless the Employer
elects a different twelve (12) month period.
2.34 "M-Test Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the M-Test Contribution Percentages of the
Participants in a group.
2.35 "M-Test Contribution Percentage" shall mean the ratio (expressed
as a percentage) of a Participant's M-Test Contributions for a Plan Year to the
Participant's Compensation for the Plan Year. The M-Test Contribution Percentage
for a Participant who is a Highly Compensated Employee shall be determined by
combining all plans subject to Code ss.401(m) under which the Highly Compensated
Employee is eligible to participate (other than those that may not be
permissively aggregated) with this Plan as though they were a single plan. For
this purpose, Compensation is defined as in Section 7.01(b) of the Plan. The
M-Test Contribution Percentage for a Participant who has made no Elective
Deferral contributions and who is not credited with any M- Test Contributions
for the Plan Year shall be zero (0).
2.36 "M-Test Contributions" shall mean for any Plan Year Matching
Contributions made pursuant to Section 5.05 less any of the Participant's
Qualified Matching Contributions included as K-Test Contributions. If so elected
by the Employer, part or all of the Qualified Non-Elective Contributions
allocated to the Participant for such year shall be included as an M-Test
Contribution, provided that, any Qualified Non-Elective Contributions included
as M-Test Contributions shall not increase the difference between the M-Test
Average Contribution Percentage for Highly Compensated Employees and the M-Test
Average Contribution Percentage for Non-Highly Compensated Employees; and,
further provided that, no Qualified Non-Elective Contributions included as
M-Test Contributions shall be included as K-Test Contributions. In determining
the amount of M-Test Contributions under this Section the Plan Administrator
shall take into account all employee contributions made by the Participant and
all matching contributions made by the
8
Employer under any other plan that is aggregated with this Plan for purposes of
Code ss.401(a)(4) or Code ss.410(b) (other than Code ss.410(b)(2)(A)(ii)) and
any other plan satisfying Code ss.401(k)(3) and Reg. ss.1.401(k)-1(b)(3) that
the Employer elects to permissively aggregate with this Plan, by treating all
such plans and this Plan as a single plan.
2.37 "Matching Contribution" shall mean any Employer contribution made
to the Plan on behalf of an Employee on account of an Employee's Elective
Deferral, but excluding, for Plan Years beginning after December 31, 1988, any
contribution used to meet the minimum required allocation under Section 19.03.
For Plan Years commencing after December 31, 2001, Matching Contributions may be
used to satisfy the minimum required contribution requirements of Section 19.03
to the extent provided in Section 19.09.
2.38 "Named Fiduciary" shall mean the Plan Administrator and any
Committee appointed and so designated by the Plan Administrator.
2.39 "Net Profit" for any year shall mean the current and accumulated
earnings of the Employer as reflected by its books of account for the particular
fiscal year prior to the provision for Federal and state income tax, without
increase or decrease due to corrections or adjustments subsequently made, but
excluding the cost of contributions made under this Plan or any other qualified
plan.
2.40 "Non-Highly Compensated Employee" or "NHCE" shall mean an Employee
who is not a Highly Compensated Employee.
2.41 "Normal Retirement Age" shall mean age 65.
2.42 "Normal Retirement Date" shall mean the first day of the calendar
month coincid ing with or next following a Participant's Normal Retirement Age.
2.43 "Participant" shall mean any Eligible Employee who has satisfied
all of the age and service requirements of Section 4.01. Such an Eligible
Employee shall be deemed to be a Participant in the Plan for purposes of any
applicable non-discrimination test, including the K-Test and M-Test defined in
this Plan, without regard to whether he has executed a Salary Reduction
Agreement and agreed to have contributions made to this Plan through Elective
Deferrals. A Participant may nevertheless be considered "active" or "inactive"
depending on whether he is eligible to make Elective Deferral Contributions or
receive an allocation of Employer Contributions. A Participant who has an
Account in the Plan but is an Inactive Participant because he or she has
incurred a Termination of Employment shall not be treated as a Participant in
the Plan for purposes of any applicable non-discrimination test, including the
K-Test and M-Test defined in this Plan in any Plan Year following the Plan Year
in which the Participant's Termination of Employment has occurred.
2.44 "Plan" shall mean the Plan as stated herein and as may be amended
from time to time, denominated as the "FX Energy, Inc. 401(k) Stock Bonus Plan."
The Employer intends the Plan to satisfy the requirements of Code Section 401(k)
and to include provisions permitting the contribution of Employer Securities.
2.51 "Plan Sponsor" shall mean FX Energy, Inc.
2.52 "Plan Year" shall mean the one year period commencing January 1,
and ending December 31.
9
2.53 "Predecessor Plan" shall mean any Plan that has been previously
amended or restated for GUST and whose assets have been transferred to this Plan
pursuant to a merger or trust to trust transfer. The benefits that are funded by
the transferred assets shall be protected benefits within the meaning of Code
ss.411(d)(6) and the regulations thereunder and prior to their transfer to this
Plan shall be subject to all provisions of the Predecessor Plan, including any
transitional rules required by prior legislation such as GUST and applicable IRS
regulations.
2.54 "Prior Plan" shall mean this Plan as it existed prior to the
Effective Date.
2.55 "Qualified Matching Contribution" shall mean a Matching
Contribution with respect to which the requirements of Reg. ss.1.401(k)-1(b)(5)
and Code ss.ss.401(k)(2)(B) and (C) are met.
2.56 "Qualified Non-Elective Contribution" shall mean any Employer
contribution to the Plan other than a Matching Contribution with respect to
which the Employee may not elect to have the contribution paid to the Employee
in cash instead of being contributed to the Plan and (if treated as K-test
Contributions) the requirements of Reg. ss.1.401(k)-1(b)(5) and Code
ss.ss.401(k)(2)(B) and (C) are met or (if treated as M-Test Contributions) the
requirements of Reg. ss.1.401(m)-1(b)(5) are met.
2.57 "Transferred Benefits" shall mean those benefits funded by assets
transferred to the Plan from a Predecessor Plan. Transferred Benefits shall
include all optional forms of benefits available under the Predecessor Plan(s)
from which the Transferred Benefits were received, unless unavailable under this
Plan.
2.58 "Trust" shall mean the Trust created under the Prior Plan,
designated as the FX Energy, Inc. 401(k) Profit Sharing Plan Trust, and
continued through the restated and amended Trust Agreement, effective January 1,
2004, and renamed the FX Energy, Inc. 401(k) Stock Bonus Plan Trust.
2.59 "Trust Fund" shall mean all cash, Employer Securities, securities,
annuity contracts, Insurance Contracts, real estate and any other property held
by the Trustee pursuant to the terms of this Agreement, together with investment
earnings or losses thereon, less any applicable expenses of the Plan and Trust.
2.60 "Trustee" shall mean the bank, trust company or other corporation
possessing trust powers under applicable State or Federal law, or one or more
individuals, or any combination thereof named as parties hereto, or any
successor Trustee or Trustees hereunder.
2.61 "Valuation Date" shall mean the date on which the Trust Fund and
Accounts are valued, as provided in this Plan. The following shall be Valuation
Dates:
(a) the last day of each Plan Year (the "Annual Valuation Date");
(b) any other day designated by the Plan Administrator and set
forth in a written notice to the Trustee as the Plan
Administrator may consider necessary or advisable to provide
for the orderly and equitable administration of the Plan.
2.62 "Vested Interest" or "Vested Accrued Benefit" shall mean the
portion of a Participant's Accrued Benefit that is non-forfeitable.
10
ARTICLE III
SERVICE DEFINITIONS AND RULES
3.01 "Eligibility Computation Period" shall mean the period used to
measure Eligibility Service and Breaks in Service for purposes of eligibility to
begin and maintain participation in the Plan.
(a) "Initial Eligibility Computation Period" shall mean, for any
Employee in any Plan Year in which a Year of Eligibility
Service is required, the twelve (12) consecutive month period
which begins on the Employee's Employment Commencement Date or
Re-employment Commencement Date.
(b) "Subsequent Eligibility Computation Period" shall mean, for
any Employee in any Plan Year in which a Year of Eligibility
Service is required, the Plan Year beginning with or within
the Initial Eligibility Computation Period and succeeding Plan
Years.
(c) For any Plan Year in which less than a Year of Eligibility
Service is required for participation, the Eligibility
Computation Period shall be the number of months or days of
Eligibility Service required.
3.02 "Eligibility Service" shall mean service for any period during
which an Employee receives credit for Hours of Service for an FX Employer.
3.03 "Employment Commencement Date" shall mean the date on which the
Employee first performs an Hour of Service for an FX Employer.
3.04 "Hour of Service" shall mean and be determined as follows:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the year or years
in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer 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 Leave of Absence. Notwithstanding
the preceding sentence:
(1) No more than five hundred and one (501) Hours of
Service are required to be credited under this
paragraph during which the Employee performs no
duties (whether or not such period occurs in a single
computation period);
(2) An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account
of a period during which no duties are performed is
not required to be credited to the Employee if such
payment is made or due under a plan maintained solely
for the purpose of complying with applicable
workmen's compensation or unemployment compensation
or disability insurance laws; and
11
(3) Hours of Service are not required to be credited for
a payment that solely reimburses an Employee for
medical or medically related expenses incurred by the
Employee.
For purposes of this paragraph (b), a payment shall be deemed
to be made by or due from an Employer regardless of whether
such payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund or insurer to
which Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer
or other entity are for the benefit of particular Employees or
are on behalf of a group of Employees in the aggregate. Hours
under this paragraph (b) shall be calculated and credited
pursuant to DOL Reg. ss.2530.200b-2, paragraphs (b) and (c),
which are incorporated herein by this reference.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service shall not be credited both under
paragraph (a) or paragraph (b), as the case may be, and under
this paragraph (c). These hours shall be credited to the
Employee for the year or years to which the award or agreement
pertains rather than the year in which the award, agreement or
payment is made.
(d) Hours of Service shall be determined on the basis of actual
hours for which an Employee is paid, entitled to payment or
for which back pay is awarded or agreed to.
(e) For Plan Years beginning after December 31, 1984, in the case
of an Employee who is absent from work for any period:
(1) By reason of the pregnancy of the Employee;
(2) By reason of the birth of a child of the Employee;
(3) By reason of the placement of a child with the
Employee in connection with the adoption of such
child by such Employee; or
(4) For purposes of caring for such child for a period
beginning immediately following such birth or
placement.
Hours of Service shall include the Hours of Service
that otherwise would normally have been credited to
such Employee but for such absence; or in any case in
which the Plan is unable to determine the Hours of
Service to be credited, eight (8) Hours of Service
for each regularly scheduled work day of such
absence. The total number of hours treated as Hours
of Service under this Section by reason of any
pregnancy or placement shall not exceed five hundred
one (501) hours less the number of Hours of Service
credited to an Employee pursuant to subsections (a)
through (e) above, for an absence described in this
subsection (f). The hours described in this
subsection (f) shall be treated as Hours of Service
only in the computation period in which the absence
from work begins, if an Employee would be prevented
from incurring a One-Year Break in Service in such
computation period solely because the period of
absence is treated as Hours of Service as provided
herein; or in any other case, in the immediately
following computation period. Notwithstanding the
foregoing, no credit will be given pursuant to
12
this subsection (f) unless the Employee furnishes to
the Plan Administrator such timely information as the
Plan Administrator may reasonably require to
establish that the absence from work is for reasons
referred to herein, and the number of days for which
there was such an absence.
(f) Hours of Service shall be aggregated for service with all FX
Employers, however, in no event shall duplicate credit be
given for the same Hours of Service.
(g) The Plan Administrator may use any records to determine Hours
of Service that it considers an accurate reflection of the
facts.
(h) When crediting Hours of Service for Employees who are paid on
an hourly basis the Plan Administrator shall use the "actual"
method. For purposes of the Plan, "actual" method shall mean
the determination of Hours of Service from records of hours
worked and hours for which the Employer makes payment or for
which payment is due from the Employer. When crediting Hours
of Service for Employees who are not paid on an hourly basis,
the Plan Administrator shall use the "salaried earnings"
method. With respect to an Employee whose Compensation
consists primarily of periodic salary payments, "salaried
earnings" method shall mean the determination of Hours of
Service from records showing payments made to the Employee or
payments due to the Employee from the Employer. In applying
the "salaried earnings" method, an Employee who receives
credit for four hundred thirty-five (435) hours and for eight
hundred seventy (870) hours shall be deemed to have received
credit for the equivalent of five hundred (500) Hours of
Service and one thousand (1,000) Hours of Service
respectively.
3.05 "One Year Break in Service" shall mean a twelve (12) consecutive
month period during which an Employee has not completed more than five hundred
(500) Hours of Service, regardless of whether the Employee has incurred a
Termination of Employment. For purposes of vesting, such twelve (12) consecutive
month periods shall be measured on the same basis as Years of Vesting Service.
For purposes of eligibility to participate, the Plan shall not apply any break
in service rule. The following types of absence shall not constitute a One-Year
Break in Service:
(a) Temporary leave of absence granted by the Employer for
sickness, or extended vacation, provided that persons under
similar circumstances shall be treated alike;
(b) Absence due to illness or accident while regular remuneration
is paid;
(c) Absence for military service or significant civilian service
for the United States, provided the absent Employee returns to
service with the Employer within thirty (30) days of his/her
release from such active military duty or service or any
longer period during which his/her right to re-employment is
protected by law.
3.06 "Re-employment Commencement Date" shall mean the date on which an
Employee, who has both incurred a Termination of Employment from the Employer
and has had a One Year Break in Service as a result of that termination, first
performs an Hour of Service for the Employer following such Break in Service.
3.07 "Termination of Employment" with respect to any Employee or
Participant shall occur upon the separation from service (effective January 1,
2002, severance from employment) of the Employee or Participant due to
resignation, discharge, death, retirement, failure to return to
13
active work at the end of an authorized leave of absence or the authorized
extension(s) thereof, failure to return to active work when duly called
following a temporary layoff, or upon the happening of any other event or
circumstance which, under the then current policy of the FX Employer, results in
the termination of the employer-employee relationship. Termination of Employment
shall not be deemed to occur merely because of a transfer between FX Employers.
3.08 "Vesting Computation Period" shall mean the twelve (12)
consecutive month period used to measure Years of Vesting Service and Breaks in
Service for purposes of vesting. The twelve (12) consecutive month period used
for the Vesting Computation Period shall be the Plan Year.
3.09 "Year of Service" shall mean a twelve (12) consecutive month
period during which an Employee has completed at least one thousand (1000) Hours
of Service.
3.10 "Year of Eligibility Service" shall mean an Eligibility
Computation Period during which an Employee has completed at least one thousand
(1000) Hours of Service.
3.11 "Year of Vesting Service" shall mean a Vesting Computation Period
during which an Employee has completed at least one thousand (1000) Hours of
Service. A Participant's Years of Vesting Service shall be determined based on
all Vesting Computation Periods containing or beginning after his/her Employment
Commencement Date or Re-employment Commencement Date.
3.12 Special Rules for Crediting Service: In crediting Service under
the Plan for any Employee who is or was employed by a Participating Employer the
rules for crediting Service as set forth in each respective Participation
Agreement shall apply.
3.13 Qualified Military Service Rules: The following rules shall apply
to an Employee who has Qualified Military Service while employed by an FX
Employer.
(a) "Qualified Military Service" shall mean service by an Employee
in the uniformed services of the United States (as defined in
chapter 43 title 38 of the United States Code), provided:
(1) the employee provides advance notice of the service
to the FX Employer, when such notice is practical;
(2) the employee is not dishonorably discharged;
(3) the employee is re-employed by the FX Employer within
thirty (30) days following the completion of the
service or any longer period during which his/her
right to re-employment is protected by law; and
(4) the cumulative length of the Employee's absence from
employment due to the service does not exceed five
(5) years.
(b) An Employee's Qualified Military Service shall be treated as
service for the FX Employer for all purposes under the Plan.
An Employee's imputed Hours of Service during Qualified
Military Service shall be:
(1) the Hours of Service the Employee would have worked
but for his/her Qualified Military Service; and
14
(2) if the Hours of Service cannot reasonably be
determined, the Hours of Service the Employee would
have worked had he or she worked during his/her
Qualified Military Service at his/her average rate
during the twelve (12) month period immediately
preceding his/her Qualified Military Service or, if
shorter, his/her entire period of employment
preceding the Qualified Military Service.
(c) Compensation (as defined in Section 2.10) shall include
imputed compensation during an Employee's Qualified Military
Service. Imputed compensation shall be:
(1) the compensation the Employee would have received but
for his/her Qualified Military Service; or
(2) if the compensation is not reasonably certain, the
compensation the Employee would have received had he
or she received compensation during his/her qualified
Military Leave at his/her average rate during the
twelve (12) month period immediately preceding
his/her Qualified Military Service, or, if shorter,
his/her entire period of employment preceding his/her
Qualified Military Service.
(d) A Participant who returns to employment after any Qualified
Military Service shall be entitled to make additional Elective
Deferrals to the Plan up to the maximum amount of the Elective
Deferrals the Participant would have been permitted to make
based upon his/her imputed compensation during the Qualified
Military Service, taking into account any other Elective
Deferrals made by the Participant during the Qualified
Military Service. The period during which the additional
Elective Deferrals may be made shall commence on the date the
Participant returns to employment and shall extend until the
expiration of the lesser of (i) the period that is three (3)
times the length of the Participant's Qualified Military
Service or (ii) five (5) years. Payment of Matching
Contributions attributable to Elective Deferrals of imputed
compensation during Qualified Military Service shall be made
at the same time as other Matching Contributions, based on the
time the Elective Deferrals are actually paid to the Plan. The
Matching Contributions need not include earnings that would
have accrued had the Participant continued performing his/her
duties for the Employer during Qualified Military Service.
(e) Elective Deferrals of a Participant's imputed compensation
during his/her Qualified Military Service shall be treated as
Elective Deferrals and as K-Test Contributions with respect to
the Plan Year to which the imputed compensation relates, if
this Plan Year is not the same Plan Year in which the Elective
Deferrals are received by the Plan. Any Matching Contributions
based on Elective Deferrals of a Participant's imputed
compensation during his/her Qualified Military Service shall
be treated as M-Test Contributions with respect to the Plan
Year to which the Elective Deferrals relate, if this Plan Year
is not the same Plan Year in which the Elective Deferrals are
received by the Plan.
(f) Repayment of any Participant loan from the Plan shall be
suspended during Qualified Military Service and the loan
repayment period shall be extended by the length of the
Qualified Military Service.
15
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
4.01 Age and Service Requirements: An Eligible Employee shall become a
Participant in this Plan on the first Entry Date coincident with or next
following the date on which he satisfies all of the following requirements:
(a) attains the Age of twenty-one (21) years;
(b) completes 90 days of Eligibility Service following his
Employment Commencement Date; and
(c) is employed on the Entry Date.
An Eligible Employee who becomes a Participant and who also executes a
written Salary Reduction Agreement in the manner set forth in procedures issued
by the Plan Administrator shall be considered to be an active Participant. An
Eligible Employee shall not be required to execute a Salary Reduction Agreement
in order to become an active Participant in the Plan, however, as a condition to
participation in Salary Reduction Contributions the Eligible Employee shall
first execute a written Salary Reduction Agreement in the manner set forth in
procedures issued by the Plan Administrator. An Employee who was a Participant
in the Prior Plan on the day before the Effective Date shall continue as a
Participant in this Plan on that date.
4.02 Plan Administrator to Furnish Eligibility Information: As soon as
practicable after each Employee's Employment Commencement Date, the Plan
Administrator shall determine the Entry Date when the Employee shall first
become eligible to participate in the Plan and shall notify each Employee of
his/her eligibility, and of any application or other requirements for
participation.
4.03 Information to be Provided by Employee: At the request of the Plan
Administrator, each Eligible Employee shall furnish such information as is not
available from the Employer. As a condition to participation in the Plan, the
Employee shall first complete, execute and deliver a written Salary Reduction
Agreement as reasonably required by the Plan Administrator.
4.04 Reclassification of an Eligible Employee or Excluded Employee: Any
Eligible Employee, whether or not he has previously participated in the Plan,
who was previously classified as an Excluded Employee and is reclassified as an
Eligible Employee shall be eligible to enter the Plan as an active Participant
on the later of the date of his/her reclassification or the Entry Date he would
otherwise join if he had not been classified as an Excluded Employee, provided
he has otherwise satisfied the requirements of Section 4.01.
Any Participant who is reclassified as an Excluded Employee during the
Plan Year shall immediately cease Elective Deferrals to the Plan and shall no
longer be eligible for Employer Contributions as of the date the
reclassification occurs.
4.05 Re-employment and Commencement of Participation: An Eligible
Employee who had met the requirements of Section 4.01(a), (b) or (c) but
terminated employment prior to his/her Entry Date shall become a Participant on
the date he is re-employed by the Employer, but in no event earlier than the
Entry Date he would have joined had he not ceased employment. An Employee who
was a Participant shall again become a Participant on the date he is re-employed
by the Employer. The Employee who becomes a Participant may immediately elect to
execute a Salary Reduction
16
Agreement and commence Elective Deferrals, if it is executed within the time
period specified by the Plan Administrator pursuant to a uniform and
non-discriminatory policy. If not so executed, the Participant may elect to
execute a Salary Reduction Agreement and commence Elective Deferrals as of the
first day of any subsequent calendar quarter thereafter.
4.06 Election Not To Participate: At any time after the Plan
Administrator notifies an Employee of his eligibility to participate in this
Plan, the eligible Employee may elect not to become an active Participant by not
executing a Salary Reduction Agreement or by indicating on the enrollment form
his election not to participate. The electing Employee may later become an
active Participant effective as of any subsequent Entry Date, if the Employee
then meets the requirements for participation under this Article IV and properly
executes a Salary Reduction Agreement.
4.07 Effect of Participation: A Participant who has executed a Salary
Reduction Agreement shall be conclusively deemed to have assented to this Plan
and to any subsequent amendments, and shall be bound thereby with the same force
and effect as if he had formally executed this Plan.
17
ARTICLE V
PARTICIPANT AND EMPLOYER CONTRIBUTIONS
5.01 Elective Deferrals:
(a) Each Participant may elect to defer any whole percentage of
the Participant's Annual Compensation, subject to a minimum of
one percent (1%) and to a maximum of one hundred percent
(100%). The amount of the deferral shall be contingent on the
Participant electing and authorizing the Elective Deferral
amount through a Salary Reduction Agreement. The Salary
Reduction Agreement and the Participant's authorization
thereunder may be evidenced by a written document executed by
the Participant and filed with the Administrator on a form
prescribed for this purpose or by oral instructions directly
from the Participant to the Administrator and confirmed to the
Participant in writing. The Salary Reduction Agreement may
also be completed and executed by the Participant through any
electronic means or method approved by the Plan Administrator.
The Salary Reduction Agreement shall be subject to the
following rules:
(1) The Salary Reduction Agreement shall apply to each
payroll period during which an effective Salary
Reduction Agreement is on file with the
Administrator. The Salary Reduction Agreement shall
be applicable only to the following forms of
Compensation: wages, salary, overtime pay and
commissions. With the approval of the Administrator a
Participant may identify different components of his
Compensation (such as wages, overtime pay, etc.) and
specify different percentage deferral rates to apply
to each component. A Participant may also elect and
authorize through a separate Salary Reduction
Agreement an Elective Deferral amount (subject to the
same rules in (a) above) from any bonus or lump sum
severance payment component of the Participant's
Compensation.
(2) The amount by which the Participant's Compensation is
reduced under the Salary Reduction Agreement may be
changed by a Participant no more than quarterly
during the Plan Year. A change shall be evidenced by
a written document, by oral instructions directly
from the Participant with written confirmation in
accordance with rules and procedures established by
the Administrator or through any electronic means or
method approved by the Plan Administrator.
(3) Salary Reduction Agreements and Amendments to Salary
Reduction Agreements shall be effective as of the
first payroll period commencing with or immediately
following the first day of the calendar quarter
following the date the Salary Reduction Agreement or
the Amendment is executed orally authorized or
electronically completed by the Participant and
received and confirmed by the Administrator.
(4) The Administrator may amend or revoke a Salary
Reduction Agreement with any Participant at any time
if the Administrator determines that a revocation or
amendment is necessary to ensure that the
Participant's Elective Deferral for any Plan Year
will not exceed any Plan limitations.
18
(b) The Elective Deferral amounts designated by the Participant in
the Salary Reduction Agreement shall be withheld and
contributed to the Plan by the Employer without regard to Net
Profits to the Participant's Elective Deferral Account. Unless
otherwise authorized by the Plan Administrator, contributions
made through payroll deductions shall be pursuant to the
Salary Reduction Agreement executed by the Participant or
orally authorized by the Participant and confirmed by the Plan
Administrator or authorized by any other electronic means or
method approved by the Plan Administrator.
(c) Commencing January 1, 2002, and for all Plan Years thereafter,
an Employee who is eligible to make Elective Deferrals under
this Plan and who attains Age 50 before the close of the Plan
Year shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Code
ss.414(v). Catch-up contributions shall not be taken into
account for purposes of the provisions of the Plan
implementing the required limitations of Code ss.ss.402(g) and
415. The Plan Administrator shall not treat catch up
contributions as failing to satisfy any provisions of the Plan
implementing the requirements of Code ss.ss.401(k)(3),
401(k)(11), 401(k)(12), 410(b), or 416, as applicable.
(e) Each Eligible Employee (whether or not an active Participant
in the Plan) shall receive from the Plan Administrator no
later than one (1) month prior to January 1, 2005, and
thereafter, at least one month before the commencement of each
subsequent Plan Year, a written notice describing the Eligible
Employee's rights and obligations under the Plan, including
the Eligible Employee's right to receive a fully vested
Matching Contribution if the Eligible Employee executes a
Salary Reduction Agreement and makes Elective Deferral
Contributions to the Plan. The notice shall be sufficiently
accurate and comprehensive to inform the Eligible Employee of
the his rights and obligations, and shall be written in a
manner calculated to be understood by the Eligible Employee.
5.02 Payment to Trustee: The Employer shall transmit to the Trustee the
amounts withheld by it pursuant to Section 5.01 above as soon as
administratively feasible, but in no event later than the fifteenth (15th)
business day of the month following the month in which the amounts are withheld
or received by the Employer. However, the Employer shall not transmit to the
Trustee any amounts withheld by it during the Plan Year pursuant to a deferral
election under Section 5.01 that, in the Plan Administrator's opinion, would
cause the Plan to fail to meet the limitations described in Section 5.10 for
that Plan Year. Such amounts withheld and not transmitted to the Trustee shall
be returned by the Employer to the respective Participants.
5.03 Suspension of Deferrals: A Participant may notify the Plan
Administrator electronically, orally or in writing of his/her intention to
suspend his/her election to have a portion of his/her Annual Compensation
deferred. The suspension shall be effective for the payroll period commencing
thirty (30) days after the date the notice of suspension is received (unless an
earlier effective date is administratively feasible) and for each payroll period
thereafter, until a new Salary Reduction Agreement is entered into by the
Participant. The Participant shall be considered a Participant hereunder for all
other purposes if his/her employment continues, however, he shall not be
considered to be an active Participant.
5.04 No Voluntary Contributions by Participants: A Participant shall
not be required nor permitted to make voluntary after-tax contributions to the
Plan.
19
5.05 Rollover Contributions by Participants: A Participant (or an
Employee who is expected to become a Participant) may rollover directly to this
Plan (or indirectly through an individual retirement account, annuity or bond)
the cash or cash proceeds from the sale of property distributed to the Employee
in the form of an "eligible rollover distribution" as that term is defined in
Section 11.03(a)) from another plan qualified under Code ss.401(a). For this
purpose this Plan shall be an "eligible retirement plan" as that term is defined
in Section 11.03(b). The amount shall be credited to his Participant Rollover
Contribution Account, provided:
(a) The Participant provides adequate evidence to the Plan
Administrator that the amount satisfies the requirements of
Code ss.402(c) regarding amounts that may be rolled over;
(b) If the amount is rolled over indirectly to this Plan through
an individual retirement account, annuity, or bond, the amount
does not include life insurance policies, amounts contributed
(or deemed to have been contributed) by the Participant or
amounts distributed from a Plan not qualified under Code
ss.401(a); and
(c) If the amount to be rolled over to this Plan is received as a
direct transfer pursuant to Code ss.402(e)(6) or rolled over
after distribution to the Participant within sixty (60) days
following its distribution.
The Plan will accept participant rollover contributions and/or direct
rollovers of distributions made after December 31, 2001, from any qualified plan
described in Code ss.401(a) or Code ss.403(a), an annuity contract described in
Code ss.403(b) or an eligible plan under Code ss.457(b) that is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state. The plan will also accept a
participant rollover contribution of the portion of a distribution from an
individual retirement account or annuity described in Code ss.408(a) or (b) that
is eligible to be rolled over and would otherwise be includable in gross income.
The Plan will accept rollovers from other plans described in this paragraph that
also include after-tax employee contributions, provided that the after tax
contributions are received in a direct rollover as described in Code
ss.401(a)(31)(A).
5.06 Employer Matching Contributions: For each Plan Year the Employer
may contribute Employer Securities to the Plan in an amount, determined without
regard to Net Profits, that will be sufficient to credit the Employer Matching
Contribution Account of each Participant who satisfies the requirements of
Section 6.04, with amounts that satisfy the Employer's Matching Contribution
percentage as determined by the Employer on a discretionary basis for the Plan
Year.
The amount of Employer Securities to be contributed as an Employer
Matching Contribution and the manner of allocation shall be determined annually
by the Employer no later than the time prescribed by law (including any
extensions thereof) for filing the Employer's Federal income tax return for the
Plan Year for which the Matching Contribution is made. If more than one FX
Employer participates in this Plan, then each FX Employer may set its own
Matching Contribution level or formula to be applicable to its own Employees,
without regard to that determined by other sponsoring FX Employers. The Matching
Contribution shall be made in the form of cash or Employer Securities only. If
the contribution is in the form of cash, the Plan Administrator, in its
discretion, may direct the Trustee to apply the cash immediately toward the
purchase of Employer Securities. The Employer Matching Contribution for
Employees of the Sponsoring Employer and each Participating FX Employer shall be
determined each Plan Year by the Sponsoring Employer and each Participating FX
Employer respectively, or shall be as set forth in the Supplemental
Participation Agreement executed by the Participating FX Employer. The
allocation of the Employer
20
Matching Contribution amount shall be determined solely by reference to the
ratio percentage of the Participant's Elective Deferral compared to the
aggregate of the forms of the Participant's Compensation that are subject to the
Salary Reduction Agreement as specified in Section 5.01(a)(1).
If the Employer or Participating FX Employer makes a Matching
Contribution to the Plan at any time during the Plan Year (such as on a calendar
quarter basis), any limit on the amount of Employer Matching Contribution shall
not be determined by reference to Annual Compensation for the Plan Year, but by
reference to Compensation paid only during the period to which the Matching
Contribution relates. Notwithstanding the previous sentence, no contribution in
excess of the maximum amount that would constitute an allowable deduction for
Federal income tax purposes under the applicable provisions of the Code, as now
in force or hereafter amended, shall be required to be made by the Employer
under this Section. If the Employer makes Matching Contributions for any Plan
Year as provided in the first sentence of this paragraph, the Employer may also
elect to make an additional Matching Contribution for the Plan Year in an amount
that would have been made by the Employer had Matching Contributions been
calculated on an annual, rather than periodic, basis. Such additional Matching
Contributions must be made by the Employer on a uniform non-discriminatory
basis.
5.06A Safe Harbor Employer Matching Contributions: Effective January 1,
2005, and for each Plan Year commencing thereon or thereafter, the Employer may
contribute to the Plan an amount, determined without regard to Net Profits,
which will be sufficient to credit the Employer Matching Contribution Account of
each Participant who is a Non-Highly Compensated Employee and who satisfies the
requirements of Section 6.04, with amounts which satisfy the Employer's Matching
Contribution percentage as determined by the Employer on a discretionary basis
for the Plan Year. In no event however, shall the Employer Matching Contribution
for any Participant who is a Non-Highly Compensated Employee in a Plan Year,
when determined as a percentage of the Participant's Compensation for the Plan
Year, ever be less than the percentage amounts shown in the following table:
Participant's Elective Percentage of Employer
Deferral percentage: Matching Contribution:
-------------------- ----------------------
0% 0.0%
1% 1.0%
2% 2.0%
3% 3.0%
4% 3.5%
5% 4.0%
The Employer may also contribute to the Plan an amount, determined
without regard to Net Profits, which will be sufficient to credit the Employer
Matching Contribution Account of each Participant who is a Highly Compensated
Employee and who satisfies the requirements of Section 6.04, with amounts which
satisfy the Employer's Matching Contribution percentage as determined by the
Employer on a discretionary basis for the Plan Year. In no event however, shall
the rate of Matching Contributions with respect to Elective Deferrals made by
any Highly Compensated Employee exceed the rate of Matching Contributions with
respect to Elective Deferrals made by any Participant who is a Non-Highly
Compensated Employee. Excess Matching Contributions for Employees of the
Sponsoring Employer or a Participating FX Employer shall be determined each Plan
Year by the Sponsoring Employer and each Participating FX Employer respectively,
or shall be as set forth in the Supplemental Participation Agreement executed by
the Participating FX Employer. If the Employer or Participating FX Employer
makes a Matching Contribution in excess of that set forth in the table in this
Section, in no event shall the rate of
21
Matching Contributions increase as the rate of the Participant's Elective
Deferrals increase. The Matching Contribution shall be made in the form of cash
or Employer Securities only. If the contribution is in the form of cash, the
Plan Administrator, in its discretion, may direct the Trustee to apply the cash
immediately toward the purchase of Employer Securities.
If the Employer or Participating FX Employer makes a Matching
Contribution to the Plan at any time during the Plan Year (such as on a calendar
quarter basis), any limit on the amount of Employer Matching Contribution shall
not be determined by reference to Annual Compensation for the Plan Year, but by
reference to Compensation paid only during the period to which the Matching
Contribution relates. Notwithstanding the previous sentence, no contribution in
excess of the maximum amount which would constitute an allowable deduction for
federal income tax purposes under the applicable provisions of the Code, as now
in force or hereafter amended, shall be required to be made by the Employer
under this Section.
5.07 Employer Profit Sharing Contributions: In addition to (or in lieu
of) Employer Matching Contributions made pursuant to Section 5.06 for each Plan
Year and effective January 1, 2005, in addition to Employer Safe Harbor Matching
Contributions made pursuant to Section 5.06A for each Plan Year, each FX
Employer may contribute, without regard to Net Profits, an amount determined by
its Board of Directors as an Employer Profit Sharing Contribution. The Employer
may make the Profit Sharing Contribution in cash or in kind, provided however,
that if the Profit Sharing Contribution is made in cash the Plan shall
immediately acquire Employer Securities with the entire amount of the
contribution and if the Profit Sharing Contribution is made in kind, it shall be
made in the form of Employer Securities only. The Employer Profit Sharing
Contribution for the Plan Year shall be allocated as provided in Section 6.02(c)
to the Accounts of those Participants who satisfy the requirements of Section
6.04. An Employer may reserve the right to increase or decrease the amount from
year to year, as determined by the Board of Directors. Notwithstanding the
previous sentence, no contribution in excess of the maximum amount that would
constitute an allowable deduction for Federal income tax purposes under the
applicable provisions of the Code, as now in force or hereafter amended, shall
be required to be made by the Employer under this Section.
The amount of the contribution to be credited to the Employer Profit
Sharing Contribution Accounts of the Participants shall be in addition to any
non-vested forfeitures from Employer Profit- Sharing Contribution Accounts of
the Participants to be allocated during the Plan Year pursuant to Section 11.06.
The amount of each FX Employer's Profit Sharing Contribution shall be allocated
only to the Accounts of those Participants who are Employees of that FX
Employer.
5.08 Time and Method of Payment: All payments of Employer Matching and
Profit Sharing Contributions shall be made directly to the Trustee and shall be
paid no later than the time prescribed by law (including any extensions thereof)
for filing the Employer's Federal income tax return for the Plan Year for which
they are made. All such Contributions shall be in the form of Employer
Securities only. The Employer may in its sole discretion, at any time during the
Plan Year, make one or more partial contributions of Employer Securities to the
Trustee on an estimated basis. Any amount so contributed in advance shall be
applied against the amount thereafter determined to be contributable by the
Employer and shall be credited by the Plan Administrator to the Participants'
Employer Contribution Accounts as of the end of the calendar quarter for which
the contribution is made.
5.09 Employer Contribution Accounts: The Plan Administrator shall
establish and maintain an Employer Matching Contribution Account, as defined in
Section 2.01(c) and an Employer Profit Sharing Account as defined in Section
2.01(d) for each Participant eligible to receive an Employer Matching
Contribution or Employer Profit Sharing Contribution. Contributions
22
of Employer Securities to a Participant's Employer Matching Contribution Account
and Employer Profit Sharing Contribution Account after the Effective Date shall
also be allocated and credited to the Participant's Employer Securities Account.
The establishment of the accounts is for record keeping purposes only, and a
physical segregation of assets shall not be required.
5.10 Limitations on Contributions: Notwithstanding any other provisions
of this Plan, all contributions shall be subject to the following limitations:
(a) The total amount of a Participant's Elective Deferrals during
any calendar year shall not exceed Eleven Thousand Dollars
($11,000), which amount shall be indexed at the same time and
in the same manner as the dollar limitation for defined
benefit plans in Code ss.415(b)(1)(A). For this purpose a
Participant's Elective Deferrals to this Plan plus the
Participant's elective deferrals pursuant to any other Code
ss.401(k) arrangement, elective deferrals under a simplified
employee pension plan and salary reduction contributions to a
tax-sheltered annuity, irrespective of whether the Employer or
any member of an Affiliated Group to which the Employer
belongs maintains the arrangement, plan or annuity, shall be
aggregated
(b) The K-Test Average Contribution Percentage for Participants
who are Highly Compensated Employees shall not exceed in any
Plan Year the greater of:
(1) The K-Test Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees multiplied by 1.25; or
(2) The lesser of the K-Test Average Contribution
Percentage for Participants who are Non-Highly
Compensated Employees multiplied by two (2) or the
K-Test Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees plus two (2).
(c) The M-Test Average Contribution Percentage for Participants
who are Highly Compensated Employees shall not exceed in any
Plan Year the greater of:
(1) The M-Test Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees multiplied by 1.25; or
(2) The lesser of the M-Test Average Contribution
Percentage for Participants who are Non-Highly
Compensated Employees multiplied by two (2) or the
M-Test Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees plus two (2).
(d) In any Plan Year in which the requirements of both (b)(1) and
(c)(1) above are not met, the sum of the K-Test Average
Contribution Percentage and the M-Test Average Contribution
Percentage for Participants who are Highly Compensated
Employees shall not exceed the greater of:
(1) The sum of:
(i) The greater of the K-Test Average
Contribution Percentage or the M- Test
Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees multiplied by 1.25; and
23
(ii) The lesser of the K-Test Average
Contribution Percentage or the M- Test
Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees plus two (2), but in no event
greater than the lesser of the K-Test
Average Contribution Percentage or the
M-Test Average Contribution Percentage for
Participants who are Non-Highly Compensated
Employees multiplied by two (2); or
(2) The sum of:
(i) The lesser of the K-Test Average
Contribution Percentage or the M- Test
Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees multiplied by 1.25; and
(ii) The greater of the K-Test Average
Contribution Percentage or the M- Test
Average Contribution Percentage for
Participants who are Non- Highly Compensated
Employees plus two (2), but in no event
greater than the lesser of the K-Test
Average Contribution Percentage or the
M-Test Average Contribution Percentage for
Participants who are Non-Highly Compensated
Employees multiplied by two (2).
For this purpose, the K-Test Average Contribution Percentage
and M-Test Average Contribution Percentage for Participants
who are Highly Compensated Employees shall be determined after
any distributions or re-characterizations pursuant to Section
5.12(a), (b) and (c). The test described in this subsection
5.10(d) shall not apply for Plan Years commencing after
December 31, 2001.
For purposes of applying the tests in (b), (c) and (d) above
in any Plan Year, the K- Test Average Contribution Percentage
and the M-Test Average Contribution Percentage for
Participants who are Non-Highly Compensated Employees shall be
based on the prior Plan Year.
The Employer may aggregate this Plan with one or more other
plans for purposes of applying the tests in (b), (c) and (d)
above, in which case all K-Test Contributions and M-Test
Contributions to all such plans shall be treated as made under
this Plan, provided that, the aggregated plans may not include
an Employee Stock Ownership Plan, and all such aggregated
plans must have the same plan year.
5.11 Excess Contributions: In accordance with the limitations on
contributions described in Section 5.10, the following amounts shall be treated
as excess contributions under this Plan:
(a) Excess Deferrals: With respect to any calendar year, amounts
designated by Participants in writing as Excess Deferrals not
later than the first March 1 following the end of the calendar
year, in accordance with such procedures as the Plan
Administrator shall specify, less any Excess K-Test
Contributions previously distributed or recharacterized for
the Plan Year beginning in the calendar year in which the
Excess Deferral is made, pursuant to Section 5.12(b).
(b) Excess K-Test Contributions: With respect to any Plan Year,
the excess of the aggregate amount of K-Test Contributions
actually made on behalf of Highly Compensated Employees for
the Plan Year over the maximum amount of such contributions
permitted under Section 5.10(b). The Excess K-Test
Contributions of
24
an individual Highly Compensated Employee shall be determined
(i) by calculating the total dollar amount resulting from a
reduction of the K-Test Contributions made on behalf of Highly
Compensated Employees in order of the K-Test Contribution
Percentages, beginning with the highest percentage, until the
limitations of Section 5.10(b) are met, and (ii) by reducing
the K-Test Contributions made on behalf of Highly Compensated
Employees in order of the dollar amount of K-Test
Contributions for each Highly Compensated Employee, beginning
with the highest dollar amount, and subtracting such amounts
from the total dollar amount determined in (i) above until the
total dollar amount is exhausted. The Excess K-Test
Contributions allocated to a Participant shall be reduced by
any excess deferrals previously distributed for the calendar
year ending with or within the Plan Year in which the Excess
K-Test Contributions arose, pursuant to Section 5.12(a).
(c) Excess M-Test Contributions: With respect to any Plan Year,
the excess of the aggregate amount of M-Test Contributions
actually made on behalf of Highly Compensated Employees for
such Plan Year over the maximum amount of such contributions
permitted under Section 5.10(c). The Excess M-Test
Contributions of an individual Highly Compensated Employee
shall be determined (i) by calculating the total dollar amount
resulting from a reduction of the M-Test Contributions made on
behalf of Highly Compensated Employees in order of the M-Test
Contribution Percentages, beginning with the highest
percentage, until the limitations of Section 5.10(c) are met,
and (ii) by reducing the M-Test Contributions made on behalf
of Highly Compensated Employees in order of the dollar amount
of M-Test Contributions for each Highly Compensated Employee,
beginning with the highest dollar amount, and subtracting such
amounts from the total dollar amount determined in (i) above
until the total dollar amount is exhausted. The determination
of the amount of Excess M-Test Contributions for the Plan Year
shall be made after first determining the Excess Deferrals and
Excess K-Test Contributions for the Plan Year.
(d) Excess Combined-Test Contributions: With respect to any Plan
Year, the excess of the aggregate amount of the K-Test
Contributions actually made on behalf of Highly Compensated
Employees for such Plan Year over the maximum amount of such
contributions permitted under Section 5.10(d), provided that
M-Test Contributions are not reduced. The Excess Combined-Test
Contributions of an individual Highly Compensated Employee
shall be determined in the same manner as Excess K-Test
Contributions under (b) above, except disregarding the
provision for taking into account distributions of Excess
Deferrals.
(e) Excess Combined-Test Contributions: With respect to any Plan
Year, the excess of the aggregate amount of the M-Test
Contributions actually made on behalf of Highly Compensated
Employees for such Plan Year over the maximum amount of such
contributions permitted under Section 5.10(d), provided that
K-Test Contributions are not reduced. The Excess Combined-Test
Contributions of an individual Highly Compensated Employee
shall be determined in the same manner as Excess M-Test
Contributions under (c) above.
(f) Subsections 5.11(d) and (e) shall not apply for Plan Years
commencing after December 31, 2001.
5.12 Correction of Excess Contributions: The Plan provides the
following methods for correcting excess contributions as described in Section
5.11:
25
(a) Excess Deferrals: The Plan Administrator shall direct the
Trustee to distribute to a Participant from his/her
Participant Elective Deferral Account an amount equal to the
Participant's Excess Deferral plus income, if any, allocable
thereto. Such distribution shall be designated by the Plan
Administrator as a distribution of an Excess Deferral and
shall be made not earlier than the date on which the Trustee
receives the Excess Deferral and not later than the first
April 15 following the end of the calendar year in which the
Excess Deferral is made.
(b) Excess K-Test Contributions: The Plan Administrator shall
direct the Trustee to distribute to a Participant his/her
Excess K-Test Contribution plus income, if any, allocable
thereto. Such distribution shall be designated by the Plan
Administrator as a distribution of an excess contribution and
shall be made after the end of the Plan Year in which the
excess contribution arose and within twelve (12) months after
the end of such Plan Year.
If the Employer has made a Matching Contribution attributable
to any portion of the Participant's Excess K-Test Contribution
distributed to the Participant pursuant to the above, the Plan
Administrator shall treat such Matching Contribution as a
forfeiture. The forfeited amount shall be used to reduce the
Employer's Matching Contribution otherwise required for the
Plan Year or for any subsequent Plan Year.
(c) Excess M-Test Contributions: The Plan Administrator shall
direct the Trustee to distribute to a Participant any portion
of the Participant's Excess M-Test Contribution, plus income,
if any, allocable thereto. Such distribution shall be
designated by the Plan Administrator as a distribution of
excess contributions and shall be made after the end of the
Plan Year in which the excess contribution arose and within
twelve (12) months after the end of such Plan Year.
(d) Excess Combined-Test Contributions: The Plan Administrator
shall correct the Excess Combined-Test Contributions in the
same manner as for Excess K-Test and M-Test Contributions in
(b) and (c) above, provided however, that the Plan
Administrator shall direct the Trustee to distribute the
portion of the Excess K-Test Contribution or Excess M-Test
Contribution or a combination of both which results in the
least amount distributed from the Plan. The provisions of this
subsection 5.12(d) shall not apply for Plan Years commencing
after December 31, 2001.
For purposes of the above, income shall include realized and
unrealized gains and losses for the Plan Year and for the
period from the end of the Plan Year to the date of
distribution (the "gap period") and shall be allocated to
excess contributions in accordance with all appropriate Code
and Regulation provisions. Distributions of excess
contributions pursuant to the above shall be made without
regard to any consent by the Participant otherwise required
under this Plan.
26
ARTICLE VI
ALLOCATIONS TO ACCOUNTS
6.01 Revaluation of Assets: Not less frequently than as of the Annual
Valuation Date each year, the Plan Administrator shall re-value the net assets
of all Participants' General Investments Accounts and Employer Securities
Accounts in the Investment Fund. The valuation shall determine the current fair
market value. At the Plan Administrator's discretion, applied on a consistent
basis, the Plan Administrator may similarly re-value the net assets of the
Investment Fund at the end of a semi-annual, quarterly, monthly or more frequent
period; the last day of such period shall be referred to as an Interim Valuation
Date. The net investment income or loss on the Investment Fund since the
previous Annual or Interim Valuation Date shall then be determined. An
independent appraiser shall perform all valuations of Employer Securities that
are not readily tradeable on an established securities market. The valuation
requirement of the immediately preced ing sentence applies to all Employer
Securities acquired by the Plan.
6.02 Allocation of Contributions and Forfeitures: Contributions and
forfeitures for any period shall be credited to the Accounts of Participants in
the following manner:
(a) With respect to Elective Deferral contributions made pursuant
to Section 5.01, an amount equal to the Participant's Elective
Deferral since the previous Annual or Interim Valuation Date
shall be allocated and credited to his/her Participant
Elective Deferral Account.
(b) Matching Contributions made pursuant to Section 5.06 shall be
allocated on each Annual Valuation Date (or if the Employer
makes Matching Contributions on a calendar quarter or other
periodic basis, on the last day of each calendar quarter or
other period) to each Participant's Account who satisfies the
requirements of Section 6.04(a), in an amount equal to the
Employer Matching Contribution percentage determined by the
Employer for the Plan Year. If the Employer makes a Matching
Contribution to the Plan at any time during the Plan Year, any
limit on the percentage amount shall not be determined by
reference to Annual Compensation for the Plan Year, but by
reference to Compensation (subject to the limitations on
Compensation imposed under Section 2.10) paid only during the
period to which the Matching Contribution relates.
Nevertheless, if the Employer makes an additional Matching
Contribution for the Plan Year as provided in the last
paragraph of Section 5.06, the additional Matching
Contribution shall be allocated on an annual, rather than
periodic, basis.
(c) Employer Profit-Sharing Contributions made pursuant to Section
5.07, shall be allocated as of each Annual Valuation Date to
each Participant who satisfies the requirements of Section
6.04(b). The Employer Profit-Sharing Contribution shall be
credited to the Employer Profit-Sharing Contribution Accounts
of each such Participant in an amount equal to the percentage
determined according to the allocation formula set forth in
Section 6.06. At the time the Employer makes its
Profit-Sharing Contribution, the Employer shall designate to
the Administrator the Plan Year for which the Profit-Sharing
Contribution shall be deemed to have been made (which may be
the current Plan Year or the immediately prior or subsequent
Plan Year, as the Employer deems appropriate). If the Employer
makes no designation, the Employer Profit-Sharing Contribution
shall be deemed to have been made for the Plan Year that
begins concurrent with or within the taxable year of the
Employer for which the Employer claims a deduction under Code
ss.404.
27
(d) Forfeitures from Employer Matching Contribution Accounts that
are reallocated pursuant to Section 11.06 shall be used to
reduce the amount of the Employer's Matching Contributions for
the Plan Year. They shall be allocated as of each Annual
Valuation Date to each Participant's Matching Contribution
Account who satisfies the requirements of Section 6.04 in the
same manner as Employer Matching Contributions in (b) above.
(e) Forfeitures from Employer Profit-Sharing Contribution Accounts
that are reallocated pursuant to Section 11.06 shall be
allocated in addition to the amount of the Employer's Profit
Sharing Contributions for the Plan Year. They shall be
allocated as of each Annual Valuation Date to each
Participant's Profit Sharing Contribution Account who
satisfies the requirements of Section 6.04 in the same manner
as Employer Profit Sharing Contributions in (c) above.
(f) With respect to contributions made pursuant to Section 5.05,
an amount equal to the Participant's Rollover Contributions
since the previous Annual or Interim Valuation Date shall be
credited to the Participant's Rollover Contribution Account.
(g) Contributions by the Employer of Employer Securities shall be
allocated solely to the Employer Securities Account. All other
contributions, whether by the Employer or any Participant,
shall be allocated solely to the General Investments Account.
6.03 Adjustment of Accounts: As of each Annual or Interim Valuation
Date all Partici pants' and Inactive Participants' Accounts shall be adjusted to
reflect the contributions and income received, profits and losses, and
distributions and expenses of the Trust Fund since the previous Annual or
Interim Valuation Date. The adjustments shall be made in the following manner
and order:
(a) Each Account shall be charged with all forfeitures,
withdrawals and distributions from the Account since the
previous Annual or Interim Valuation Date. In making a
forfeiture reduction under this Section, the Plan
Administrator, to the extent possible, first must forfeit from
a Participant's General Investments Account before making a
forfeiture from his/her Employer Securities Account.
(b) Each Account shall be charged with any administrative costs or
expenses incurred and paid by the Plan that are allocable to
the Account since the previous Annual or Interim Valuation
Date. All administrative costs and expenses, to the extent
possible, shall be paid from a Participant's General
Investments Account before being paid from his/her Employer
Securities Account
(c) Each Participant's General Investment Account that has a
non-zero balance after the application of (a) and (b) above,
shall be credited (or charged) with its proportionate share of
the net investment income (or loss) and expenses since the
previous Annual or Interim Valuation Date. The amount to be
credited or charged to each Account shall be determined based
on the ratio that: (i) the balance in the Account on the
previous Annual or Interim Valuation Date less any
forfeitures, withdrawals or distributions from the Account
since that date bears to (ii) the total of such amounts
determined for all Accounts. Notwithstanding the previous
sentence, in the sole discretion of the Plan Administrator,
the method of allocating the net investment income (or loss)
of the General Investment Account may be adjusted to reflect
the effect of cash flows into and out of such Accounts (such
as contributions, payments
28
on Participant loans, distributions, etc.) based on the length
of time between the date of such cash flow and the current
Annual or Interim Valuation Date. Any such adjustment pursuant
to the previous sentence shall be made in a uniform and non-
discriminatory manner among Participants and/or the types of
Accounts.
(d) Each Account shall be credited with the contributions
allocated to it since the previous Annual or Interim Valuation
Date, subject to the following rules:
(1) The Employer Securities Account maintained for each
Participant shall be credited with the Participant's
allocable share of Employer Securities (including
fractional shares) contributed in kind to the Trust,
with any forfeitures of Employer Securities and with
any stock dividends on Employer Securities allocated
to his/her Employer Securities Account. The Plan
Administrator will base allocations to the
Participant's Employer Securities Account on dollar
values expressed as shares of Employer Securities or
on the basis of actual shares, assuming there is only
a single class of Employer Securities.
(2) The General Investments Account maintained for each
Participant shall be credited with the Participant's
allocable share of Elective Deferrals and any
Employer Contribution not attributable to Employer
Securities, according to the provisions of Section
6.02.
(e) Cash dividends the Employer pays with respect to Employer
Securities shall be allocated to the General Investments
Accounts of Participants in the same ratio, determined on the
dividend declaration date, that Employer Securities allocated
to a Participant's Employer Securities Account bear to the
Employer Securities allocated to all Employer Securities
Accounts.
6.04 Eligibility for Allocation of Employer Matching and Profit Sharing
Contributions:
(a) In allocating Matching Contributions to a Participant's
Account, the Administrator shall take into account only the
Compensation paid the Employee during the period to which the
allocation applies and he is an eligible Participant in the
Plan with a valid, executed Salary Reduction Agreement in
effect and on file with the Administrator. A Participant need
not complete any minimum Hours of Service during the Plan Year
or be employed on any particular day of the Plan Year in order
to receive an allocation of Employer Matching Contributions.
(b) The Administrator shall determine allocations of Employer
Profit Sharing Contribu tions on the basis of the Plan Year.
In allocating Profit Sharing Contributions to a Participant's
Account, the Administrator shall take into account only the
Compensa tion paid to the Participant after he has satisfied
the eligibility requirements of Section 4.01 and to which the
allocation applies. A Participant must complete at least one
thousand (1000) Hours of Service during the Plan Year and must
be employed on the last day of the Plan Year in order to
receive an allocation of Employer Profit Sharing
Contributions, unless the Participant has incurred a
Termination of Employment during the Plan Year on account of
death, Disability or retirement. It shall not be necessary for
the Participant to have a Salary Reduction
29
Agreement in effect in order to receive an allocation of
Employer Profit Sharing Contributions.
6.05 Suspension of Accrual Requirements for Employer Profit Sharing
Contributions: The Plan suspends the accrual requirements under Section 6.04(b)
for Employer Profit Sharing Contributions if for any Plan Year the Plan fails to
satisfy the Coverage Test. The Plan satisfies the Coverage Test for the Plan
Year if the number of Nonhighly Compensated Employees who benefit under the Plan
is at least equal to 70% of the total number of Includible Nonhighly Compensated
Employees for the Plan Year. "Includible" Employees are all Employees other
than: (1) those Employees excluded from participating in the Plan for the entire
Plan Year by reason of the collective bargaining unit exclusion or the
nonresident alien exclusion described in the Code or by reason of the age and
service requirements of Section 4.01; and (2) any Employee who incurs a
Termination of Employment during the Plan Year and fails to complete at least
501 Hours of Service for the Plan Year. A "Nonhighly Compensated Employee" is an
Employee who is not a Highly Compensated Employee. For purposes of the Coverage
Test an Employee is benefitting under the Plan for a Plan Year if, under Section
6.04, he is entitled to an allocation of Employer Non- Elective Contributions
for the Plan Year.
If this Section 6.05 applies for a Plan Year, the Plan Administrator
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Termination of Employment during the Plan Year, and continuing
to suspend the accrual requirements for each Includible Employee who incurred an
earlier Termination of Employment, from the latest to the earliest date of
Termination of Employment, until the Plan satisfies the Coverage Test for the
Plan Year. If two or more Includible Employees have a Termination of Employment
on the same day, the Plan Administrator will suspend the accrual requirements
for all such Includible Employees, irrespective of whether the Plan can satisfy
the Coverage Test by accruing benefits for fewer than all such Includible
Employees. If the Plan suspends the accrual requirements for an Includible
Employee, that Employee will share in the allocation of Employer Contributions
and Participant forfeitures, if any, without regard to the number of Hours of
Service he has earned for the Plan Year and without regard to whether he is
employed by the Employer on the last day of the Plan Year.
6.06 New Comparability Formula for Allocation of Employer Profit
Sharing Contributions: Subject to the Top Heavy allocation requirements of
Article XIX and the Code ss.415 limitations of Article VII, each Participant's
share of Employer Profit Sharing Contributions contributed by the Employer under
Section 5.07 on behalf of each Allocation Group will be allocated on the last
day of the Plan Year (and on such other date or dates as determined by the Plan
Administrator on a nondiscriminatory basis) to each Allocation Group. For
purposes of this Section 6.06 each Participant who is not an Inactive
Participant (an "Eligible Participant") will constitute a separate Allocation
Group. The amount allocated to each Allocation Group will be subject to the
following provisions:
(a) Failsafe Allocation: For each Plan Year beginning on or after
January 1, 2002, in which it is necessary for the Plan to pass
nondiscrimination testing on the basis of equivalent benefit
rates as provided under regulation ss.1.401(a)(4), the
allocations made under this Section must satisfy either the
"broadly available test" described in subparagraph (1) or one
of the "gateway tests" described in subparagraph (2) or
subparagraph (3) below.
30
(1) Broadly Available Test If Employer Does Not Maintain
A Defined Benefit Plan: To satisfy the "broadly
available test", each Allocation Rate applicable to
any Eligible Participant must be currently available
within the meaning of regulation
ss.1.401(a)(4)-4(b)(2) to a group of Employees and,
were such group to be treated as a group of Employees
covered under a separate plan, such group of
Employees must satisfy the requirements of Code
ss.410(b) without regard to the average benefit
percentage test in regulation ss.1.410(b)-5. For this
purpose, if two allocation rates could be
permissively aggregated under regulation
ss.1.401(a)(4)-4(d)(4), assuming the allocation rates
were treated as benefits, rights or features, then
such allocation rates may be aggregated and treated
as a single allocation rate. In addition, the
disregard of age and service conditions described in
regulation ss.1.401(a)(4)-4(b)(2)(ii)(A) does not
apply for purposes of this subparagraph (1).
(2) Gateway Test If The Employer Does Not Maintain A
Defined Benefit Plan: In order to satisfy the
"gateway test" for any Plan Year in which the
Employer does not maintain a defined benefit plan
that also covers Participants covered in this Plan
for any portion of the Plan Year, the Allocation Rate
for each Eligible Participant who is an NHCE for the
Plan Year must be equal to either (A) 5% of each
Eligible Participant's Compensation; or (B) 33.33% of
the highest Allocation Rate for any Participant who
is an HCE for the Plan Year.
(3) If The Employer Does Maintain One Or More Defined
Benefit Plans: If the Employer maintains one or more
defined benefit plans that cover Participants in this
Plan for any portion of a Plan Year, the Plan
Administrator may elect to apply for that Plan Year
either the procedure set forth in subparagraph (A) or
the procedure in subparagraph (B), as follows:
(A) Election To Not Permissively Aggregate: The
Plan Administrator may elect not to
permissively aggregate this Plan and such
defined benefit plan or plans for purposes
of satisfying the coverage tests of Code
ss.410(b) and the nondiscrimination tests of
Code ss.401(a)(4), and instead may elect to
separately test each plan for such purposes.
In that event, either the "gateway test" in
subparagraph (2) above or the "broadly
available test" of subparagraph (1) above
will apply for this Plan.
(B) Election To Permissively Aggregate: The Plan
Administrator may elect to permissively
aggregate this Plan and such defined benefit
plan(s) for purposes of satisfying both the
coverage tests of Code ss.410(b) and the
nondiscrimination tests of Code
ss.401(a)(4), in which event for the Plan
Year the aggregated plans will be known as a
"DB/DC Plan" and will be subject to the
requirements in subparagraphs (i) or (ii)
below. Unless elected otherwise by the Plan
Administrator, this Plan and the defined
benefit plan(s) will not necessarily be
considered a DB/DC Plan because the plans
are being aggregated solely to apply the
average benefit ratio test in regulation
ss.1.410(b)-5. If a DB/DC Plan applies,
nondiscrimination testing under Code
ss.401(a)(4) may be passed for this Plan and
all defined
31
benefit plans of the Employer and any other
FX Employer either on the basis of Aggregate
Normal Allocation Rates, or at the option of
the Plan Administrator and only if either of
the exceptions in subparagraph (i) are
satisfied or the "gateway test" conditions
in subparagraph (ii) are satisfied, on the
basis of equivalent benefit rates under
regulation ss.1.401(a)(4) (i.e. normal
accrual rates under the defined benefit
plans and equivalent benefit rates under the
defined contribution plans):
(i) "Broadly Available" Or "Primarily
Defined Benefit"Tests Are
Satisfied: The requirements of this
subparagraph (i) are deemed
satisfied if both the defined
contribution plan components and
the defined benefit plan components
of the DB/DC Plan are considered to
be "broadly available" as defined
in subparagraph (1) above, or the
DB/DC Plan is considered to be
"primarily defined benefit". A
DB/DC Plan is considered to be
"primarily defined benefit" if more
than 50% of the Eligible
Participants who are NHCEs for the
Plan Year have a normal accrual
rate under the defined benefit plan
or plans that exceeds their
equivalent benefit rates under the
defined contribution plans.
(ii) "Gateway Test" Is Satisfied: The
requirements of this subparagraph
(ii) are deemed satisfied if the
"gateway test" for a DB/DC Plan is
satisfied, in which the Allocation
Rate for each Eligible Participant
who is an NHCE for the Plan Year
must be at least equal to the
Aggregate Normal Allocation Rate.
(b) Determination Of Accrual And Allocation Rates: The normal
accrual rate and the equivalent normal allocation rate
attributable to defined benefit plans, the equivalent accrual
rate attributable to defined contribution plans, and the
Aggregate Normal Allocation Rate are determined under
regulation ss.1.401(a)(4)(b)(2)(ii), but without taking into
account the imputation of permitted disparity under regulation
ss.1.401(a)(4)-7, except as otherwise permitted under
regulation ss.1.401(a)(4)- 9(b)(2)(v)(C).
(c) Definitions: Solely for purposes of this Section 6.06, the
following listed terms shall have the meanings indicated.
(1) "Allocation Rate" shall mean the percentage obtained
by dividing (A) the total amount of Employer
contributions or reallocated Forfeitures that are
allocated on the Participant's behalf under all
defined contribution plans of the Employer or an FX
Employer that are aggregated for nondiscrimination
testing under Code ss.401(a)(4) (not including any
Matching Contributions if such plan or plans includes
Elective Deferrals), by (B) the Participant's
Compensation.
(2) "Aggregate Normal Allocation Rate" shall mean the sum
of the Allocation Rate in the defined contribution
plan(s) and the equivalent Allocation Rate in the
defined benefit plan(s) of the Employer or an
Affiliated Employer that
32
are permissively aggregated to pass the coverage
tests of Code ss.410(b) and the nondiscrimination
tests of Code ss.401(a)(4). The Aggregate Normal
Allocation Rate for each Eligible Participant who is
an NHCE for the Plan Year will equal the percentage
in subparagraphs (A), (B) or (C) below. At the
discretion of the Plan Administrator, the equivalent
Allocation Rate for any Plan Year under such defined
benefit plan(s) for each Eligible Participant who is
an NHCE and who benefits under the defined benefit
plan(s) for the Plan Year may be deemed to be equal
to the average of the equivalent Allocation Rates
under the defined benefit plan(s) for all such
Eligible Participants.
(A) 33.33% Rate: If the highest Aggregate Normal
Allocation Rate of any Eligible Participant
who is an HCE for the Plan Year is less than
15%, then the Aggregate Normal Allocation
Rate for each Eligible Participant who was
an NHCE for the Plan Year will be 33.33% of
such highest Aggregate Normal Allocation
Rate; or
(B) 5% Rate: If the highest Aggregate Normal
Allocation Rate of any Eligible Participant
who is an HCE for the Plan Year is at least
15% but is not greater than 25%, then the
Aggregate Normal Allocation Rate for each
Eligible Participant who was an NHCE during
the Plan Year will be 5% of each such
Eligible Participant's Compensation; or
(C) Rate Higher Than 5% To Maximum 7.5% Rate: If
the highest Aggregate Normal Allocation Rate
of any Eligible Participant who is an HCE
for the Plan Year is greater than 25%, then
the Aggregate Normal Allocation Rate for
each Eligible Participant who is an NHCE for
the Plan Year will be equal to the sum of
(A) 5% of each such Eligible Participant's
Compensation, plus (B) one percentage point
for each five percentage points (or portion
thereof) that the highest Aggregate Normal
Allocation Rate of any Eligible Participant
who is an HCE for the Plan Year exceeds 25%.
However, the maximum Aggregate Normal
Allocation Rate for each Eligible
Participant who is an NHCE for the Plan Year
will not exceed 7.5% of each such Eligible
Participant's Code ss.415 Compensation.
(3) "Compensation" shall have the meaning set forth in
Section 7.01(b).
33
ARTICLE VII
LIMITATIONS ON ALLOCATIONS
7.01 Special Definitions: For purposes of complying with Code ss.415
and as otherwise provided in this Article, the terms below shall be defined as
set forth. For Limitation Years commencing after December 31, 1999,
subparagraphs (c), (d), (f) and (l) shall not apply.
(a) "Annual Additions" shall mean the sum of the following amounts
allocated on behalf of a Participant for a Limitation Year:
(1) Employer contributions; and
(2) Employee contributions; and
(3) Forfeitures available for reallocation, if
applicable.
Amounts reapplied to reduce Employer contributions and amounts
reapplied from a suspense account (if any) under Section 7.02
as well as contributions allocated to any Individual Medical
Benefit Account that is part of a defined benefit plan shall
also be included as Annual Additions.
For purposes of this Article, an Annual Addition is credited
to the Account of a Participant for a particular Limitation
Year if it is allocated to the Participant's Account as of any
day within such Limitation Year. Employer contributions will
not be deemed credited to a Participant unless the
contributions are actually made to the Plan no later than
thirty (30) days after the end of the period described in Code
ss.404(a)(6) applicable to the taxable year with or within
which the particular Limitation Year ends.
(b) "Compensation" for purposes of this Article VII (compliance
with Code ss.415) and for purposes of compliance with any
applicable non-discrimination test, including the
determination of an Employee's status as a Highly Compensated
Employee, the K- Test and M-Test procedures described in
Section 5.10 and the New Comparability allocation formula set
forth in Section 6.06, shall be determined as follows:
(1) The term "Compensation" shall include:
(i) The Participant's wages, salaries, fees for
professional service and other amounts
received (whether or not paid in cash) for
personal services actually rendered in the
course of employment with an Employer
maintaining the plan (including, but not
limited to, commissions paid to
salespersons, compensation for services on
the basis of a percentage of profits,
commissions on insurance premiums, tips,
bonuses, fringe benefits, reimbursements and
expense allow ances).
(ii) In the case of a Participant who is an
employee within the meaning of Code
ss.401(c)(1), the Participant's earned
income as described in Code ss.401(c)(2).
34
(iii) Any amounts contributed by the Employer or
received by the Participant pursuant to an
unfunded, non-qualified plan of deferred
compensation to the extent such amounts are
includable in the gross income of the
Participant for the Limitation Year.
(iv) Any Elective Deferral and any amount
contributed or deferred by the Employer at
the election of the Participant and that is
not includable in the gross income of the
Participant by reason of Code ss.ss.125,
403(b) or 457.
(v) For Limitation Years beginning on and after
January 1, 2001, Compensation paid or made
available during such Limitation Years shall
include elective amounts that are not
includable in the gross income of the
Employee by reason of Code ss.132(f)(4).
(2) The term "Compensation" does not include items such as:
(i) Any Employer contributions to a qualified
retirement plan and any Employer
contributions to any other retirement plan
that receive special tax benefits to the
extent the contributions are not includable
in the gross income of the Participant for
the taxable year in which made; and any
distributions from any qualified retirement
plan, regardless of whether the
distributions are includable in the gross
income of the Participant.
(ii) Employer contributions made on behalf of a
Participant to a simplified employee pension
described in Code ss.408(k) to the extent
such contributions are deductible by the
Employer under Code ss.219(b)(7).
(iii) Except as provided in subparagraph (1)(iv)
above, other forms of compensation that
receive special tax benefits, such as
premiums for group health insurance and
group term life insurance (but only to the
extent that the compensation is not
includable in the gross income of the
Participant).
(iv) Amounts realized from the exercise of a
non-qualified stock option, or when
restricted stock (or property) held by a
Participant either becomes freely
transferable or is no longer subject to a
substantial risk of forfeiture (see Code
ss.83 and the regulations thereunder).
(v) Amounts realized from the sale, exchange, or
other disposition of stock acquired under a
qualified stock option.
(vi) Compensation in excess of One Hundred Fifty
Thousand Dollars ($150,000), or such greater
amount as adjusted by the Secretary of the
Treasury for increases in the cost of living
after 1994 in accordance with Code
ss.401(a)(17)(B).
(3) Compensation actually paid or made available to a
Participant within the Limitation Year shall be the
Compensation used for the purposes of applying the
limitations of this Article and Code ss.415. In the
case of a Affiliated
35
Group of which the FX Employer is a part, all
employers in the Affiliated Group shall apply this
same rule.
(4) Compensation (as defined in this subsection 7.01(b))
of each Participant taken into account in determining
allocations for any Limitation Year beginning after
December 31, 2001, shall not exceed $200,000, as
adjusted for cost-of-living increases in accordance
with Code ss.401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to
determine the Compensation limit for the Limitation
Year that begins with or within such calendar year.
(c) "Defined Benefit Dollar Limitation" shall mean $90,000,
adjusted annually for Limitation Years beginning after
December 31, 1987, for increases in the cost of living in
accordance with regulations prescribed by the Secretary of the
Treasury.
(d) "Defined Benefit Fraction" for a given Limitation Year shall
mean a fraction:
(1) The numerator of which is the sum of the Projected
Annual Benefits of the Participant under all the
defined benefit plans (whether or not terminated)
ever maintained by the Employer (determined as of the
close of the Limitation Year); and
(2) The denominator of which is the lesser of:
(i) The product of one hundred twenty-five
percent (125%) multiplied by the Defined
Benefit Dollar Limitation; or
(ii) The product of one hundred forty percent
(140%) multiplied by the percentage of a
Participant's average Compensation that may
be taken into account under Code
ss.415(b)(1)(B) with respect to such
Participant for such Limitation Year.
Notwithstanding the above, if the Participant was a
participant in one or more defined benefit plans
maintained by the Employer that were in existence on
May 6, 1986 and such plans, individually and in the
aggregate, satisfied the requirements of Code ss.415
for the last Limitation Year beginning before January
1, 1987, the denominator of this fraction will not be
less than the product of one hundred twenty-five
percent (125%) multiplied by the sum of the annual
benefits under such plans that the Participant had
accrued as of the close of the last Limitation Year
beginning before January 1, 1987.
(e) "Defined Contribution Dollar Limitation" shall mean the lesser
of Thirty Thousand Dollars ($30,000) or twenty-five percent
(25%) of the Participant's Compensation for the Limitation
Year. The $30,000 amount shall be adjusted annually for
increases in the cost of living in accordance with Code
ss.415(d) and IRS Regulations.
The Defined Contribution Dollar Limitation applicable to an
Annual Addition that may be contributed or allocated to a
Participant's Account under the Plan for any Limitation Year
commencing on or after January 1, 2002, shall not exceed the
lesser of:
36
(1) Forty Thousand Dollars ($40,000), as adjusted for
increases in the cost-of- living under Code
ss.415(d), or
(2) one hundred percent (100%) of the Participant's
Compensation, as defined in this Section 7.01 for the
Limitation Year. The Compensation limit referred to
in this subsection 7.01(e)(2) shall not apply to any
contribution for medical benefits after separation
from service (within the meaning of Code ss.401(h) or
Code ss.419A(f)(2)) that is otherwise treated as an
Annual Addition.
(f) "Defined Contribution Fraction" shall mean a fraction:
(1) The numerator of which is the sum of the Annual
Additions to the Participant's accounts under all
defined contribution plans (whether or not
terminated) ever maintained by the Employer for the
current and all prior Limitation Years; and
(2) The denominator of which is the sum of the
lesser of the following amounts determined
for such Limitation Year and for each prior
Year of Service with the Employer
(regardless of whether a defined
contribution plan was maintained by the
Employer):
(i) The product of one hundred
twenty-five percent (125%)
multiplied by the Defined
Contribution Dollar Limitation; or
(ii) Thirty-five percent (35%) of the
Participant's Compensation for such
Limitation Year.
If the Participant was a participant in one or more defined
contribution plans maintained by the Employer that were in
existence on May 6, 1986 and such plans, individually and in
the aggregate, satisfied the requirements of Code ss.415 for
the last Limitation Year beginning before January 1, 1987, the
numerator of this fraction shall be adjusted if the sum of
this fraction and the Defined Benefit Fraction would otherwise
exceed one hundred percent (100%) under the terms of this
Plan. Under the adjustment, an amount equal to the product of:
(1) The excess of the sum of the fractions over one
hundred percent (100%); times
(2) The denominator of this fraction shall be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they
would be computed as of the close of the last
Limitation Year beginning before January 1, 1987.
(g) "Employer" shall mean the Employer that adopts this Plan and,
in the case of a group of employers that constitutes an
Affiliated Group of corporations (as defined in Code ss.414(b)
as modified by Code ss.415(h)) or that constitutes trades or
businesses (whether or not incorporated) that are under common
control (as defined in Code ss.414(c) as modified by Code
ss.415(h)), or that constitutes an affiliated service group,
(as defined in Code ss.414(m)), all such employers shall be
considered a single Employer for purposes of applying the
limitations of this Article.
37
(h) "Excess Amount" shall mean the excess of the Participant's
Annual Additions for the Limitation Year over the Maximum
Permissible Amount for such Limitation Year.
(i) "Individual Medical Benefit Account" shall mean any separate
account that is established for a Participant under a defined
benefit plan and from which benefits described in Code
ss.401(h) are payable solely to such Participant, his/her
spouse or his/her dependents.
(j) "Limitation Year" shall mean the twelve (12) consecutive month
period specified in Article II.
The Limitation Year may be changed by amending the election
previously made by the Employer. Any change in the Limitation
Year must be a change to a twelve (12) month period commencing
with any day within the current Limitation Year. The
limitations of this Article (and Code ss.415) are to be
separately applied to a limitation period that begins with the
first day of the current Limitation Year and that ends on the
day before the first day of the first Limitation Year for
which the change is effective.
The dollar limitation on Annual Additions with respect to this
limitation period is determined by multiplying the applicable
dollar limitation for the calendar year in which the
limitation period ends by a fraction, the numerator of which
is the number of months (computed to the nearest whole month)
in the limitation period and the denominator of which is
twelve (12).
The Limitation Year for all years prior to the effective date
of Code ss.415 shall, as applied to this Plan, be the twelve
(12) consecutive month period selected as the Limitation Year
for the first Limitation Year after the effective date of Code
ss.415.
(k) "Maximum Permissible Amount" shall mean, for a given
Limitation Year, the lesser of:
(1) The Defined Contribution Dollar Limitation; or
(2) Twenty-five percent (25%) of the Participant's
Compensation for such Limitation Year.
The percentage limitation in (2) above shall not apply to any
contribution for medical benefits after separation from
service that is treated as an Annual Addition, or to any
amount allocated to an Individual Medical Benefit Account that
is treated as an Annual Addition.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different twelve (12)
consecutive month period, the Maximum Permissible Amount for
such short Limitation Year shall not exceed the amount in (1)
above multiplied by a fraction, the numerator of which is the
number of months in the short Limitation Year (computed to the
nearest whole month) and the denominator of which is twelve
(12).
38
(l) "Projected Annual Benefit" shall mean the annual retirement
benefit (adjusted to an actuarially equivalent life annuity if
such benefit is expressed in a form other than a straight life
annuity or qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of the defined
benefit plan assuming:
(1) The Participant will continue employment until normal
retirement age under the plan (or current age, if
later); and
(2) The Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the plan will remain
constant for all future Limitation Years.
7.02 Coordination With Other Plans:
(a) If the Employer maintains another qualified cash or deferred
arrangement ("Alternate 401(k) Plan") covering Participants in
this Plan and if the Annual Additions to a Participant's
Account in this Plan and the annual additions to the
Participant's account in the Alternate 401(k) Plan would
result in the allocation on an allocation date of this Plan
that coincides with an allocation date of the Alternate 401(k)
Plan of an Excess Amount, the Excess Amount attributed to this
Plan shall be determined by the Plan Administrator on a
uniform and non-discriminatory basis, considering the amount
of elective deferrals and Employer contributions made to each
Participant's account in the Alternate 401(k) Plan, and the
anticipated allocation of the Employer Contribution to this
Plan. The Plan Administrator shall coordinate its actions with
those of the plan administrator of the Alternate 401(k) Plan
to provide for the maximum possible allocation to all
Participants in both plans, taking into account the provisions
of the Alternate 401(k) Plan allowing for distribution of
elective deferrals to reduce an Excess Amount. In this regard,
the Plan Administrator, whenever possible, shall allow for the
allocation and distribution of elective deferrals from the
Alternate 401(k) Plan so as to eliminate or reduce the
possibility of creating a suspense account under this Plan or
under the Alternate 401(k) Plan. If, after distributing all
amounts that may be distributed from the Alternate 401(k)
Plan, there still remains an Excess Amount, the Plan
Administrator will attribute the total Excess Amount to the
Alternate 401(k) Plan.
(b) If the Employer maintains another qualified defined
contribution plan during any Limitation Year that covers
Participants in this Plan and as a consequence of the
requirements of Section 7.04 an Excess Amount is allocated to
a Participant's Account in this Plan on an allocation date
that coincides with an allocation date in the other plan, the
total Excess Amount shall be deemed allocated to the other
plan.
7.03 Order of Limitations: If, pursuant to this Article, it is
necessary to limit or reduce the amount of Contributions credited to a
Participant under this Plan during a Limitation Year, the limitation or
reduction shall be made in the following order:
(a) First, from the Participant's General Investment Account, in the
following order:
(1) Unmatched Participant Elective Deferrals;
(2) Employer Matching Contributions;
39
(3) Matched Participant Elective Deferrals;
(4) Employer Profit Sharing Contributions.
(b) Second, from Employer Profit Sharing Contributions to the
Participant's Employer Securities Account.
7.04 Aggregation of Plans: For purposes of applying the limitations of
this Article applicable to a Participant for a particular Limitation Year, all
qualified defined benefit plans ever maintained by the Employer shall be treated
as one defined benefit plan, all defined contribution plans ever maintained by
the Employer shall be treated as one defined contribution plan and any Employee
contributions to a defined benefit plan shall be treated as a defined
contribution plan.
7.05 Suspense Account: If, as a result of a reasonable error in
estimating a Participant's Compensation, determining the allocation of
forfeitures or determining the amount of elective deferrals under any cash or
deferred arrangement sponsored by an FX Employer for the Limitation Year or
under other limited facts and circumstances allowed under Reg. ss.1.415-6(b),
the Annual Additions to this Plan would cause an allocation to the Account of a
Participant in excess of the Maximum Permissible Amount for the Limitation Year,
the Plan Administrator shall deal with the Excess Amount as follows:
(a) First, the Plan Administrator shall distribute to the
Participant his/her Elective Deferrals for the Limitation Year
to the extent that the distribution reduces the Excess Amount,
provided that the Plan Administrator shall not distribute any
Elective Deferral to the Participant that would cause the Plan
to make a concurrent reduction in the amount of Employer
Matching Contributions allocated to the Participant's Account.
A distribution under this provision shall include earnings or
gains attributable to the returned Elective Deferrals. All
distributions shall be made no later than and in the manner
provided in Section 5.10(d).
(b) Second, to the extent there remains an Excess Amount after
application of Section 7.05(a), the Plan Administrator shall
hold the Excess Amount in a suspense account and allocate and
reallocate the amount in the suspense account in the following
Limitation Year (and in succeeding Limitation Years, if
necessary) to reduce Employer Profit Sharing Contributions,
Employer Matching Contributions and Elective Deferrals (in
that order) to the Account of that Participant if that
Participant is covered by the Plan as of the end of the
Limitation Year. If the Participant is not covered, the excess
amount shall be allocated and reallocated in the next
Limitation Year to all Participants' Accounts in the Plan
before any Employer Profit Sharing Contributions, Employer
Matching Contributions and Elective Deferrals (in that order)
that would constitute Annual Additions are made to the Plan
for the Limitation Year, or at the option of the FX Employer,
the Excess Amount shall be used to reduce Employer Profit
Sharing Contributions and Employer Matching Contributions to
the Plan for the Limitation Year by the amount in the suspense
account that is allocated and reallocated during the
Limitation Year. The suspense account shall be an unallocated
account equal to the sum of all Excess Amounts for all
Participants in the Plan during the Limitation Year. The
suspense account shall not share in any earnings or losses of
the Trust Fund. The Plan may not distribute any amounts in the
suspense account to any Participant whether before or after
termination of employment or termination of the Plan.
40
ARTICLE VIII
IN-SERVICE AND HARDSHIP WITHDRAWALS
8.01 Withdrawals Due to Attainment of Age 59 1/2, Completion of Service
or Hardship: Except as otherwise provided in this Section 8.01 and in Section
8.05, no amounts may be withdrawn by a Participant from any Account held for
his/her benefit prior to termination of employment with the Employer, unless the
Employee has attained his/her Normal Retirement Date.
(a) A Participant who has attained Age 59 1/2 may withdraw all or
any portion of his/her Elective Deferral Account. A
Participant who has been a Participant in the Plan for at
least five (5) Plan Years and who is 100% vested in his/her
Account may withdraw all or any portion of his/her Matching
Contribution and Profit Sharing Accounts, regardless of
attained Age, except that this withdrawal right shall not
apply to any portion of the participant's Matching
Contribution and Profit Sharing Accounts which is invested in
the Participant's Employer Securities Account. A Participant
may make a withdrawal (regardless of Account) no more than
once in each calendar quarter. In the event the Participant's
Account includes amounts subject to the rules in Section 9.06,
a withdrawal may only be made with respect to such amounts in
accordance Section 9.06.
(b) A Participant may elect to withdraw an amount credited to
his/her Participant Elective Deferral Account without regard
to the Participant's Age, but only if he obtains prior
approval from the Plan Administrator, which approval shall be
granted only upon a determination of Financial Hardship. In
the case of a withdrawal due to Financial Hardship, the amount
of the withdrawal shall be limited to the total amount of the
Participant's Elective Deferrals, without regard to income
allocable thereto. Upon granting approval, the Plan
Administrator shall direct the Trustee to distribute the
indicated portion of the Participant's Elective Deferral
Account to the Participant.
8.02 Financial Hardship Distribution Rules: The Plan adopts the deemed
hardship distribution standards set forth in Reg. ss.1.041(k)-1(d)(2)(iv). As a
consequence, the Plan Administrator shall not approve any distribution on
account of Financial Hardship unless the distribution is determined by the
Administrator to be necessary to meet an immediate and heavy financial need of
the Participant. The distribution will be deemed necessary if:
(a) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant,
including amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result
from the distribution; and
(b) Other resources of the Participant are not reasonably
available to meet this need.
The condition in (b) above is deemed to be met if the Participant has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under all plans maintained by the Employer.
If a Participant receives a distribution on account of Financial Hardship
his/her Elective Deferrals to this Plan and his/her employee contributions to
all other plans maintained by the Employer (including qualified and
non-qualified plans of deferred compensation, annuities under Code ss.403(b) and
any cash or deferred arrangement part of a cafeteria plan under Code ss.125),
shall be suspended for twelve (12) months after receipt of the hardship
distribution. Further, his/her Elective Deferrals to this Plan and his/her
employee deferral contributions to all other plans maintained by the Employer
for the calendar year immediately following the calendar
41
year of the distribution shall not exceed the applicable limit under Section
5.08(a) for that calendar year less the amount of his/her Elective Deferrals for
the calendar year of the hardship distribution.
Effective January 1, 2002, a participant who receives a distribution on
account of Financial Hardship shall be prohibited from making Elective Deferrals
under this and all other cash or deferred plans of the Employer until the later
of six (6) months after receipt of the distribution or January 1, 2002.
8.03 Determination of Immediate and Heavy Financial Need: For purposes
of Section 8.02, a distribution shall be deemed to be on account of an immediate
and heavy financial need if the distribution is for:
(a) Expenses for medical care described in Code ss.213(d) incurred
by the Participant, the Participant's spouse or any dependent
of the Participant or expenses necessary for these persons to
obtain such medical care;
(b) Payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, the Participant's spouse or any dependent of the
Participant;
(c) Costs directly related to purchase (excluding mortgage
payments) a principal residence for the Participant; or
(d) Payments necessary to prevent the eviction of the Participant
from his/her principal residence or foreclosure of the
mortgage on that residence.
8.05 Withdrawal of Rollover Contributions: Effective for Plan Years
commencing on or after January 1, 2004, in the event a Participant has a
Rollover Contribution Account in the Plan, the Participant shall, upon written
notice to the Plan Administrator, be entitled to withdraw at any time, subject
to the restrictions described below, any amount up to the balance of the
Rollover Contribution Account. Withdrawals shall have no effect upon any
benefits provided under any other provisions of this Plan. The Plan
Administrator and Trustee may establish a reasonable policy regarding the
minimum amount that may be withdrawn and the frequency with which withdrawals
may be made. The policy shall be in writing and shall be administered in a
uniform and non- discriminatory manner.
If the Participant's Accrued Benefit at the time he requests a
withdrawal from the Rollover Contribution Account or at any prior time has been
greater than $5,000, no such withdrawal may be made prior to the Participant's
Normal Retirement Age unless the Participant first consents in writing. The
amount withdrawn shall be distributed to the Participant in the manner and form
provided in Section 11.02 as if the amount were distributed on account of the
Participant's Termination of Employment or, if the Participant is eligible for
Normal Retirement, in the manner and form provided in Article IX as if the
amount were distributed on account of the Participant's Retirement. If the
spousal consent rules of Section 9.06 apply to any amount in the Participant's
Account, then no amount shall be withdrawn unless prior to the withdrawal the
Participant's spouse, if any, consents to each separate withdrawal.
42
ARTICLE IX
RETIREMENT BENEFITS
9.01 Normal or Late Retirement: A Participant shall be eligible for
Normal Retirement on reaching his/her Normal Retirement Date. A Participant who
has not become an Excluded Employee may continue in the service of the Employer
as a Participant hereunder beyond his/her Normal Retirement Date. In the event
such a Participant continues in the service of the Employer, he shall continue
to be treated in all respects as a Participant until his/her actual retirement.
When any Participant has a Termination of Employment following his/her Normal
Retirement Date he shall be considered a retired Participant and he shall be
entitled to receive the entire amount of his/her Accrued Benefit, distributed as
set forth below.
9.02 Disability Retirement: Upon any Participant incurring a
Disability, regardless of whether he is also treated as having a Termination of
Employment, he shall be considered a disabled Participant and entitled to begin
receiving his/her Accrued Benefit. Such amount shall be distributed as provided
in Section 9.03, or deferred until such later date as elected by the disabled
Participant and then distributed as provided in Section 9.03.
9.03 Method of Payment: Subject to the provisions of Section 9.06 and
Article XXII, upon receipt of a claim for benefits a retired or disabled
Participant's Accrued Benefit shall be payable as elected by the Participant, in
a single lump sum payment. The amount of the lump sum payment shall be equal to
the Participant's Accrued Benefit on the date payment is made. Payment shall be
made in cash only, to the extent the Participant's Accrued Benefit is
attributable to the balance in the Participant's General Investments Account and
in Employer Securities only, to the extent the Participant's Accrued Benefit is
attributable to the balance in the Participant's Employer Securities Account.
Except as provided in Section 9.04, no payment shall be made to a
Participant prior to his/her Normal Retirement Age unless the Participant
consents in writing to the payment not more than ninety (90) days prior to
his/her Distribution Date.
Not less than thirty (30) days nor more than ninety (90) days before
the Distribution Date, the Plan Administrator shall notify the Participant of
the terms, conditions and forms of payment available from the Plan, including a
description of the election procedures under this Section and a general
explanation of the financial effect on a Participant's Accrued Benefit of the
election. The minimum thirty (30) day waiting period after the notification is
provided until the Distribution Date may be disregarded if the Plan
Administrator informs the Participant of his/her right to the full minimum
thirty (30) day waiting period, and the Participant elects in writing (or by
other electronic means acceptable to the Plan Administrator) to waive the
minimum thirty (30) day waiting period.
If the amount of the Vested Accrued Benefit in the Participant's
Account that would be payable to a disabled or retired Participant in a lump sum
is not more than Five Thousand Dollars ($5,000), without regard to whether the
Vested Accrued Benefit in the Participant's Account has ever exceeded that
amount at the time of any prior distribution, the benefit shall be paid as a
single lump sum payment in cash as soon as administratively feasible following
the end of the calendar month in which his/her Termination of Employment occurs
without regard to any Participant consent requirement or the requirements of
Section 9.06. The Accrued Benefit held in the Participant's Employer Securities
Account shall be valued as of the most recent preceding Valuation Date.
43
If the Participant dies prior to the complete distribution of the
Participant's Accrued Benefit to him, then the Plan Administrator, upon notice
of the Participant's death, shall direct the Trustee to make payment in
accordance with the provisions of Article X.
9.04 Time of Payment: Payment of the portion of the retired or disabled
Participant's Accrued Benefit held in his/her General Investments Account shall
commence as soon as administratively feasible following the end of the calendar
month in which a claim for benefits is submitted to the Plan Administrator.
Payment of the portion of the Accrued Benefit held in the Participant's Employer
Securities Account shall commence as soon as administratively feasible after the
next Valuation Date that follows the date the claim for benefits is submitted to
the Plan Administrator. A Participant may elect to delay distribution of his/her
Accrued Benefit held in his/her General Investments Account until distribution
of the amounts in his/her Employer Securities Account. Unless a Participant
elects otherwise (and failure to submit a claim for benefits shall be deemed
such an election) payment of benefits under this Plan will commence not later
than sixty (60) days after the close of the Plan Year in which the latest of the
following events occurs:
(a) The attainment by the Participant of Age sixty-five (65) or,
if earlier, his/her Normal Retirement Age; or
(b) The tenth (10th) anniversary of the Participant's Entry Date;
or
(c) The date the Participant terminates employment with the
Employer.
If the amount of the payment required to commence on the date
determined above cannot be ascertained by such date, or if it is not possible to
make such payment on such date because the Plan Administrator has been unable to
locate the Participant after making reasonable efforts to do so, a payment
retroactive to such date may be made no later than sixty (60) days after the
earliest date on which the amount of such payment can be ascertained or the date
the Participant is located, whichever is applicable.
9.05 Minimum Distribution Requirements: This Section 9.05 and Section
10.04 shall take precedence over any inconsistent provisions of this Plan. All
distributions required to be made under this Section 9.05 (life distributions)
or under Section 10.04 (death distributions) will be determined and made in
accordance with the Treasury regulations under Code ss.401(a)(9).
(a) Effective Date. This Section and Section 10.04 (as amended
herein) will apply for purposes of determining required
minimum distributions for all calendar years beginning with
the 2003 calendar year. Required minimum distributions for the
2002 calendar year under this Section and Section 10.04 will
be determined as follows. If the total amount of 2002 required
minimum distributions under the Plan made to a Participant or
Beneficiary prior to the effective date of this Section equals
or exceeds the required minimum distributions determined under
this Section, then no additional distributions will be
required to be made for the 2002 calendar year on or after
such date to the Participant or Beneficiary. If the total
amount of the 2002 calendar year required minimum
distributions under the Plan made to the Participant or
Beneficiary prior to the effective date of this Section is
less than the amount determined under this Section, then
required minimum distributions for the 2002 calendar year on
and after such date will be determined so that the total
amount of required minimum distributions for the 2002 calendar
year made to the Participant or Beneficiary will be the amount
determined under this Section.
44
(b) Time and Manner of Distribution.
(1) Required Beginning Date. The Participant's entire
Vested Accrued Benefit will be distributed, or begin
to be distributed, to the Participant no later than
the participant's Required Beginning Date.
(2) Death of Participant Before Distributions Begin. If
the Participant dies before distributions begin, the
Participant's entire Vested Accrued Benefit will be
distributed, or begin to be distributed, as provided
in Section 10.04.
(3) Forms of Distribution. Unless the participant's
interest has been distributed in the form of a single
sum on or before the Required Beginning Date, as of
the first Distribution Calendar Year distributions
will be made in accordance with Section 9.05(c).
(c) Required Minimum Distributions During Participant's Lifetime
(1) Amount of Required Minimum Distribution For Each
Distribution Calendar Year. During the participant's
lifetime, the minimum amount that will be distributed
for each Distribution Calendar Year is the lesser of:
(i) the quotient obtained by dividing the
Participant's Account Balance by the
distribution period in the Uniform Lifetime
Table set forth in Treas. Reg. Section
1.401(a)(9)-9, using the Participant's Age
as of the Participant's birthday in the
Distribution Calendar Year; or
(ii) if the Participant's sole Designated
Beneficiary for the Distribution Calendar
Year is the Participant's spouse, the
quotient obtained by dividing the
Participant's Account Balance by the number
in the Joint and Last Survivor Table set
forth in Treas. Reg. Section 1.401(a)(9)- 9,
using the Participant's and spouse's
attained ages as of the participant's and
spouse's birthdays in the Distribution
Calendar Year.
(2) Lifetime Required Minimum Distributions Continue
Through Year of Participant's Death. Required minimum
distributions will be determined under this Section
9.05(c) beginning with the first Distribution
Calendar Year and up to and including the
Distribution Calendar Year that includes the
Participant's date of death.
(d) Definitions. For purposes of this Section 9.05 and Article X
the following definitions shall apply.
(1) "Designated Beneficiary" shall mean the individual
who is designated as the Beneficiary under Section
10.02 of the Plan and is the Designated Beneficiary
under Code ss.401(a)(9) Treas. Reg. Section
1.401(a)(9)-1, Q&A-4.
(2) "Distribution Calendar Year" shall mean 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
that 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
45
distributions are required to begin under Section
10.04. The required minimum distribution for the
Participant's first Distribution Calendar Year will
be made on or before the Participant's Required
Beginning Date. The required minimum distribution for
other Distribution Calendar Years, including the
required minimum distribution for the Distribution
Calendar Year in which the Participant's Required
Beginning Date occurs, will be made on or before
December 31 of that Distribution Calendar Year.
(3) "Life Expectancy" shall mean Life Expectancy as
computed by use of the Single Life Table in Treas.
Reg.ss.1.401(a)(9)-9.
(4) "Participant's Account Balance" shall mean the
balance in the Participant's Account 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 made and allocated or forfeitures
allocated to the account balance as of dates in the
valuation calendar year after the valuation date and
decreased by distributions made in the valuation
calendar year after the valuation date. The account
balance for the valuation calendar year includes any
amounts rolled over or transferred to the plan either
in the valuation calendar year or in the Distribution
Calendar Year if distributed or transferred in the
valuation calendar year.
(5) "Required Beginning Date" shall mean, if a
Participant is a more than five percent (5%) owner in
the Plan Year ending in or with the calendar year in
which the Participant attains Age 70 1/2, April 1st
following that calendar year. For any other
Participant the Required Beginning Date is April 1st
following the close of the calendar year in which the
Participant attains Age 70 1/2, or, if later, April
1st following the close of the calendar year in which
the Participant has a Termination of Employment.
(6) "Five percent (5%) owner" shall have the meaning set
forth in Reg. ss.1.401(a)(9)-1, Q&A-2(c).
(e) Form of Benefit Payment. If payment of the Participant's
Accrued Benefit commences under this Section 9.05, it shall be
distributed to the Participant (consistent with the
Participant's election and the requirements of Section 9.03):
(1) In the form of a cash lump sum payment of the
Participant's entire Accrued Benefit; or
(2) In the form of minimum annual cash installment
payments over a period not extending beyond the life
expectancy of the Participant, or the joint life
expectancy of the Participant and his/her Designated
Beneficiary.
If the Participant fails to elect a form of payment, the Plan
shall distribute the Participant's benefit in annual
installments, commencing no later than the Required Beginning
Date, with each subsequent installment payment to be made not
later than each December 31 thereafter.
(f) Redetermination of Life Expectancy. For purposes of
determining the amount of any minimum annual cash installment
payments whenever the Participant's Designated Beneficiary is
his/her spouse, the life expectancy of the Participant and
his/her
46
Designated Beneficiary spouse shall be redetermined annually,
unless otherwise elected by the Participant. If the
Participant's Designated beneficiary is not his/her spouse,
redetermination of life expectancy shall not apply.
Notwithstanding the above, any distribution required under the
incidental death benefit requirements of Code ss.401(a) shall
be treated as a required distribution.
9.06 Qualified Joint and Survivor Annuity: Effective for all
distributions commencing after December 31, 2001, (provided notice has been
delivered to all Participants as required in DOL Reg. ss.2520.104b-3), this
Section shall apply only to a Participant or Inactive Participant with respect
to whom this Plan holds Transferred Benefits that were directly or indirectly
transferred from a defined benefit pension plan, money purchase pension plan, or
other qualified plan to which Code ss.401(a)(11)(B)(iii) applies. Furthermore,
this Section shall only apply to that portion of the Participant's Transferred
Benefits attributable to such transfer (the "Annuity Eligible Accrued
Benefits"). Prior to January 1, 2004, this Section shall apply as provided in
the Prior Plan.
(a) Qualified Joint and Survivor Annuity: A Participant or Former
Participant shall receive his/her Annuity Eligible Accrued
Benefits in the form of an Qualified Joint and Survivor
Annuity, unless he elects otherwise as provided in subsection
(b) below. The Qualified Joint and Survivor Annuity is an
immediate annuity providing monthly payments for the life of
the Participant with, if the Participant is married on the
Distribution Date, a survivor annuity providing monthly
payments for the life of the Participant's surviving spouse
(terminating with the last payment due prior to her death)
equal to fifty percent (50%) of the monthly payment amount
during the joint lives of the Participant and his/her spouse.
The monthly payment amount of the Qualified Joint and Survivor
Annuity shall be that amount that can be purchased from an
Insurer with the Annuity Eligible Accrued Benefits of the
Participant as of the Distribution Date.
The Qualified Joint and Survivor Annuity for a Participant or
Former Participant who is not married on his/her Distribution
Date shall be a life annuity that provides monthly payments
for the life of the Participant and terminates with the last
payment due prior to his/her death. The annuity shall be
purchased from an Insurer in an amount that can be provided by
the Participant's Annuity Eligible Accrued Benefits.
(b) Notice and Election of Form of Retirement Benefit: Each
Participant or Inactive Participant with an Annuity Eligible
Accrued Benefit shall be provided a written notification by
the Plan Administrator. The notification shall be in
non-technical language and shall include:
(1) A general description or explanation of the terms and
conditions of the Qualified Joint and Survivor
Annuity;
(2) The circumstances in which it will be provided unless
the Participant elects otherwise;
(3) The Participant's right to make, and the effect of,
an election to waive the Qualified Joint and Survivor
Annuity form of benefit;
(4) The rights of the Participant's spouse under
subsection (c);
47
(5) The right to make, and the effect of, a revocation of
an election to waive the Qualified Joint and Survivor
Annuity form of benefit;
(6) A general explanation of the relative financial
effect of the election on a Participant's benefits;
and
(7) A general explanation of the eligibility conditions
and other material features of the optional forms of
retirement benefit and sufficient additional
information to explain the relative values of the
optional forms of retirement benefit.
The notification shall also inform the Participant that a
specific written explanation in non-technical language of the
terms and conditions of the Qualified Joint and Survivor
Annuity and the financial effect upon the particular
Participant's benefits of making an election against the
Qualified Joint and Survivor Annuity is available upon written
request by the Participant. The notification shall be provided
not less than thirty (30) days nor more than ninety (90) days
before the Distribution Date. If the Participant requests a
specific written explanation, the explanation shall be
provided within thirty (30) days of the Participant's request.
The Plan Administrator need not comply with more than one such
request made by a particular Participant.
During the Joint and Survivor Election Period, as hereinafter
defined, a Participant eligible to make the election to waive
the Qualified Joint and Survivor Annuity of subsection (a)
shall be eligible to elect to receive his/her benefits as
provided in Section 9.03. The election shall be in writing and
may be revoked at any time during the Joint and Survivor
Election Period. New elections and revocations may be made any
number of times during the Joint and Survivor Election Period
after a previous election or revocation. For purposes of this
paragraph, the term "Joint and Survivor Election Period" shall
mean the ninety (90) day period ending on the Distribution
Date.
(c) Consent of Spouse: Notwithstanding any other provision of this
Article, any election by a Participant or Inactive Participant
to waive the Qualified Joint and Survivor Annuity pursuant to
subsection (b) shall not be given effect unless:
(1) The spouse of the Participant consents in writing to
such election;
(2) The spouse acknowledges the form of benefit payment
elected by the Participant and, if applicable, the
Beneficiary designated by the Participant, or the
spouse relinquishes the right to specify the form of
benefit payment and name the Beneficiary; and the
spouse's consent acknowledges the effect of such
election and is witnessed by the Plan Administrator
(or representative thereof) or a notary public;
(3) It is established to the satisfaction of the Plan
Administrator that the consent required under (1)
above may not be obtained because there is no spouse,
because the spouse cannot be located, or because of
such other circumstances as the Secretary of the
Treasury may by Regulation prescribe; or
48
(4) The lump sum benefit otherwise payable to the
Participant is less than Three Thousand Five Hundred
Dollars ($3,500) and a lump sum payment will be made
pursuant to Section 9.03.
A waiver of the Qualified Joint and Survivor Annuity made
pursuant to subsection (b) shall be automatically revoked upon
the marriage of the Participant, prior to his/her Distribution
Date, to a person who has not consented to the waiver pursuant
to subsection (1) above or from whom consent was not required
by reason of subsection (2) above; or upon a change in the
form of benefit payment or in the Beneficiary designated by
the Participant pursuant to subsection (1)(ii) above, unless
the spouse has relinquished the right to specify the form of
benefit payment and to name the Beneficiary.
If the requirements of the preceding paragraphs are not
satisfied, the Participant shall receive his/her Annuity
Eligible Accrued Benefit in the form of the Qualified Joint
and Survivor Annuity.
9.07 Distribution of Employer Securities:
(a) So long as the Plan holds Employer Securities that are not
issued by an FX Employer that is an electing corporation under
sub-chapter S of the Code, then to the extent the
Participant's Account is invested in such Employer Securities
distributions of benefits from the Plan shall be made in those
Employer Securities, valued at fair market value at the time
of distribution. Any fractional security share to which a
Participant or his/her Beneficiary is entitled shall be paid
in cash.
(b) If the Employer's charter or bylaws restrict ownership of
substantially all shares of Employer Securities to Employees
or to the Trust, then distribution of the Participant's
Accrued Benefit attributable to his/her Employer Securities
Account shall be made entirely in cash.
9.09 Distribution of Transferred Benefits: To the extent not already
provided under the terms of this Plan, and notwithstanding any other provisions
to the contrary, this Plan guarantees to each Participant whose Account includes
Transferred Benefits the right to receive all Transferred Benefits in any
optional form of benefit (including time, manner and method of distribution)
protected under IRC ss.411(d)(6). The extent and nature of the optional forms of
benefits so protected shall be determined by reference to the Predecessor
Plan(s). Effective for Plan Years commencing after December 31, 2002, (or if
sooner, ninety (90) days after notice is given to all Plan Participants that
satisfies DOL Reg. ss.2520.104b-3) no optional forms of benefit, except those
required under Section 9.06 and those set forth in Section 9.03 shall be
available under the Plan.
49
ARTICLE X
DEATH BENEFITS
10.01 Death Benefits Payable: If a Participant who has not received a
distribution of his/her entire Vested Interest dies, whether before or after
his/her Distribution Date, the death benefit payable to the Beneficiary,
Contingent Beneficiary or estate (as the case may be) of the Participant shall
be all amounts credited (or to be credited) to his/her Accounts then held by the
Trustee for the Participant's benefit, without regard to the Participant's
Vested Percentage and that have yet to be distributed. If an Inactive
Participant who has not received a distribution of his/her entire Vested
Interest dies, whether before or after his/her Distribution Date, the death
benefit payable to the Beneficiary, Contingent Beneficiary or estate (as the
case may be) of the Inactive Participant shall be the remaining Vested Interest
in the Inactive Participant's Accounts then held by the Trustee for the Inactive
Participant's benefit.
10.02 Designation of Beneficiary: Each Participant or Inactive
Participant shall be given the opportunity to designate a Beneficiary and
Contingent Beneficiary and from time to time the Participant or Inactive
Participant may file with the Plan Administrator a new or revised designation,
provided that his/her spouse shall be his/her Beneficiary unless his/her spouse
has consented in writing to the designation of a Beneficiary other than his/her
spouse or it is established to the satisfaction of the Plan Administrator that
the consent of the spouse may not be obtained because there is no spouse, the
spouse cannot be located or because of such other circumstances as may be set
forth in Regulations issued pursuant to Code ss.417(a)(2)(B). The change in
marital status of a Participant from married to unmarried or vice versa shall
void any outstanding beneficiary designation and require the completion and
execution of a new beneficiary designation consistent with the provisions of
this Section. Each Participant or Inactive Participant may also designate any
form of payment available under Section 9.03 to the Beneficiary or Contingent
Beneficiary. A Participant shall not be permitted to designate the form of
payment on any beneficiary designation amended or executed after the Effective
Date. Beneficiary designations shall be completed in the manner approved by the
Plan Administrator or set forth in writing on a form provided by the Plan
Administrator.
If upon the Participant's death his/her designated Beneficiary does not
survive him, the Contingent Beneficiary shall become the Beneficiary and any
death benefits shall be paid to him or her. If a deceased Participant is not
survived by a designated Beneficiary or Contingent Beneficiary, or if no
Beneficiary was designated, the benefits shall be paid to the Participant's
surviving spouse or if there is no surviving spouse, then to the executor or
administrator of the Participant's estate. For purposes of determining the right
of a Beneficiary, Contingent Beneficiary or surviving spouse to receive a
benefit on account of the death of a Participant, he or she shall not be deemed
to have survived the Participant unless he or she shall survive the Participant
by at least thirty (30) days.
If the Beneficiary, Contingent Beneficiary or surviving spouse survives
the Participant and is entitled to receive benefits under this Section 10.02,
but dies prior to receiving the entire death benefit payable to him or her, the
remaining portion of the death benefit shall be paid to the person's named
beneficiary or, if none, to the person's estate subject to the right of
commutation.
10.03 Death Benefit Payment Procedure: Upon receipt of a claim for
benefits, the Participant's death benefit shall be paid by the Trustee to the
Beneficiary designated by the Participant pursuant to Section 10.02. The
Beneficiary of a Participant may elect to receive any death benefits payable
hereunder in any Optional Form of Payment provided in Article IX other than a
Joint and Survivor Annuity. Until such time as distribution is made to the
Beneficiary the
50
Participant's Account shall be held in the Plan, subject to all investment
directions of the Beneficiary as though he or she were the Participant. The
Beneficiary's election to receive distribution shall be made in the same manner
provided under Articles IX and XI for distribution to Participants. If the
Beneficiary fails to elect a form of payment, then subject to the small benefit
distribution rules in the next paragraph, the Plan shall distribute the death
benefit in annual installments, commencing no later than December 31 of the Plan
Year following the Plan Year of the Participant's death, with each subsequent
installment payment to be made no later than each December 31 thereafter.
If the lump sum benefit otherwise payable to the Beneficiary is not
more than Five Thousand Dollars ($5,000.00), and payment of benefits to the
deceased Participant has not previously commenced, the benefit shall be paid as
a single lump sum payment. Payment of any death benefits under this paragraph
shall commence, unless otherwise designated by the Participant or elected by the
Beneficiary, as soon as administratively feasible following the Participant's
date of death and the end of the calendar month in which the Plan Administrator
receives a claim for benefits. However, if the amount of the benefit required to
paid on the date determined above cannot be ascertained by that date, or if it
is not possible to make the payment on that date because the Plan Administrator
has been unable to ascertain or locate the Beneficiary after making reasonable
efforts to do so, a payment retroactive to that date may be made as soon as
administratively feasible after the earliest date on which the Beneficiary or
amount of the payment can be ascertained or the date the Beneficiary is located,
whichever is applicable
10.04 Required Distributions Upon Death: Notwithstanding any other
provisions of this Plan, payment of death benefits shall be subject to the
following rules:
(a) Death of Participant Before Distributions Begin. If the
Participant dies before distributions begin, the Participant's
entire Vested Accrued Benefit will be distributed, or begin to
be distributed no later than as follows:
(1) If the Participant's surviving spouse is the
Participant's sole Designated Beneficiary, then
unless otherwise provided herein, distributions to
the surviving spouse will begin by December 31 of the
calendar year immediately following the calendar year
in which the Participant died, or by December 31 of
the calendar year in which the Participant would have
attained Age 70 1/2, if later.
(2) If the Participant's surviving spouse is not the
Participant's sole Designated Beneficiary, then
except as otherwise provided herein, distributions to
the Designated Beneficiary will begin by December 31
of the calendar year immediately following the
calendar year in which the Participant died.
(3) If there is no Designated Beneficiary as of September
30 of the year following the year of the
Participant's death, the Participant's entire Vested
Accrued Benefit will be distributed by December 31 of
the calendar year containing the fifth anniversary of
the Participant's death.
(4) If the Participant's surviving spouse is the
Participant's sole Designated Beneficiary and the
surviving spouse dies after the Participant but
before distributions to the surviving spouse begin,
this Section 10.04(a), other than subsection (a)(1),
will apply as if the surviving spouse were the
Participant.
51
For purposes of this Section 10.04(a) and Sections 10.04(e)and
(f), unless Section 10.04(a)(4) applies, distributions are
considered to begin on the participant's Required Beginning
Date. If Section 10.04(a)(4) applies, distributions are
considered to begin on the date distributions are required to
begin to the surviving spouse under Section 10.04(a)(1).
(b) Forms of Distribution. Unless the participant's interest has
been distributed in the form of a single sum on or before the
Required Beginning Date, as of the first Distribution Calendar
Year distributions will be made in accordance with Sections
10.04(e) and (f).
(c) Beneficiaries' Election of Five Year Rule. Beneficiaries may
elect on an individual basis whether the five year rule or the
Life Expectancy rule in Sections 10.04(a) and (f) applies to
distributions after the death of a Participant who has a
Designated Beneficiary. The election must be made no later
than the earlier of September 30 of the calendar year in which
distribution would be required to begin under Section 10.04(a)
or by September 30 of the calendar year that contains the
fifth anniversary of the Participant's (or, if applicable,
surviving spouse's) death. If neither the Participant nor
Beneficiary makes an election under this subsection,
distributions will be made in accordance with Sections
10.04(a) and (f).
(d) Transition Rule for Designated Beneficiary Receiving
Distributions Under Five Year Rule to Elect Life Expectancy
Distributions. A Designated Beneficiary who is receiving
payments under the five year rule may make a new election to
receive payments under the Life Expectancy rule until December
31, 2003, provided that all amounts that would have been
required to be distributed under the Life Expectancy rule for
all Distribution Calendar Years before 2004 are distributed by
the earlier of December 31, 2003, or the end of the five year
period.
(e) Death On or After Date Distributions Begin.
(1) Participant Survived by Designated Beneficiary. If
the Participant dies on or after the date
distributions begin and there is a Designated
Beneficiary, the minimum amount that will be
distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient
obtained by dividing the Participant's Account
Balance by the longer of the remaining Life
Expectancy of the Participant or the remaining Life
Expectancy of the Participant's Designated
Beneficiary, determined as follows:
(i) The Participant's remaining Life Expectancy
is calculated using the Age of the
Participant in the year of death, reduced by
one for each subsequent year.
(ii) If the Participant's surviving spouse is the
Participant's sole Designated Beneficiary,
the remaining Life Expectancy of the
surviving spouse is calculated for each
Distribution Calendar Year after the year of
the Participant's death using the surviving
spouse's Age as of the spouse's birthday in
that year. For Distribution Calendar Years
after the year of the surviving spouse's
death, the remaining Life Expectancy of the
surviving spouse is calculated using the Age
of the surviving spouse as of the spouse's
birthday in the calendar year
52
of the spouse's death, reduced by one for
each subsequent calendar year.
(iii) If the Participant's surviving spouse is not
the Participant's sole Designated
Beneficiary, the Designated Beneficiary's
remaining Life Expectancy is calculated
using the Age of the Beneficiary in the year
following the year of the Participant's
death, reduced by one for each subsequent
year.
(2) No Designated Beneficiary. If the Participant dies on
or after the date distributions begin and there is no
Designated Beneficiary as of September 30 of the year
after the year of the Participant's death, the
minimum amount that will be distributed for each
Distribution Calendar Year after the year of the
Participant's death is the quotient obtained by
dividing the Participant's Account Balance by the
Participant's remaining Life Expectancy calculated
using the Age of the Participant in the year of
death, reduced by one for each subsequent year.
(f) Death Before Date Distributions Begin.
(1) Participant Survived by Designated Beneficiary. If
the Participant dies before the date distributions
begin and there is a Designated Beneficiary, the
minimum amount that will be distributed for each
Distribution Calendar Year after the year of the
Participant's death is the quotient obtained by
dividing the Participant's Account Balance by the
remaining Life Expectancy of the Participant's
Designated Beneficiary, determined as provided in
Section 10.04(e).
(2) No Designated Beneficiary. If the Participant dies
before the date distributions begin and there is no
Designated Beneficiary as of September 30 of the year
following the year of the Participant's death,
distribution of the Participant's entire interest
will be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death.
(3) Death of Surviving Spouse Before Distributions to
Surviving Spouse Are Required to Begin. If the
Participant dies before the date distributions begin,
the Participant's surviving spouse is the
Participant's sole Designated Beneficiary, and the
surviving spouse dies before distributions are
required to begin to the surviving spouse under
Section 10.04 (a)(1), this Section 10.04(f) will
apply as if the surviving spouse were the
Participant.
10.05 Qualified Pre-retirement Survivor Annuity and Related Matters:
Effective for all distributions commencing after December 31, 2001, (provided
notice has been delivered to all Participants and Beneficiaries as required in
DOL Reg. ss.2520.104b-3) this Section shall apply only to a Participant or
Inactive Participant with respect to whom this Plan holds Transferred Benefits
that were directly or indirectly transferred from a defined benefit pension
plan, money purchase pension plan, or other qualified plan to which Code
ss.401(a)(11)(B)(iii) applies. Furthermore, this Section shall only apply to
that portion of the Participant's Transferred Benefits attributable to such
transfer ("Annuity Eligible Accrued Benefits"). Prior to January 1, 2004, this
Section shall apply as provided in the prior Plan.
53
If a Participant or Inactive Participant dies prior to his/her
Distribution Date and is survived by a spouse, a Qualified Pre-retirement
Survivor Annuity shall be paid to the surviving spouse except as otherwise
provided by the following provisions. A Qualified Pre-retirement Survivor
Annuity is an immediate annuity payable to the Participant for the life of the
spouse in monthly amounts equal to the monthly amount that can be purchased from
an insurer with fifty percent (50%) of the Annuity Eligible Accrued Benefits of
the Participant as of the date of his/her death.
(a) A Participant may elect to waive the Qualified Pre-retirement
Survivor Annuity provided under this Section during the
election period described in subsection (d). The waiver may be
revoked by the Participant during the election period by
filing with the Plan Administrator on a form approved by the
Plan Administrator an executed revocation of such waiver.
Following revocation a Participant may again waive the
Qualified Pre-retirement Survivor Annuity and subsequently
revoke the waiver any number of times during the election
period.
(b) A waiver pursuant to subsection (a) shall not be effective
unless:
(1) The spouse, to whom the Participant is married at the
time such waiver is executed, consents in writing to
such waiver;
(2) The spouse acknowledges the form of the death benefit
payable in lieu of the Qualified Pre-retirement
Survivor Annuity and the Beneficiary designated by
the Participant, or the spouse relinquishes the right
to specify the form of the death benefit and name the
Beneficiary; and
(3) The consent acknowledges the effect of the waiver and
is witnessed by the Plan Administrator (or
representative thereof) or a notary public; or
(4) It is established to the satisfaction of the Plan
Administrator that the consent of the spouse required
by this Section may not be obtained because there is
no spouse, the spouse cannot be located or because of
such other circumstances as may be set forth in
Regulations issued pursuant to Section 417(a)(2)(B)
of the Code; and
(3) The waiver is made on a form approved by the Plan
Administrator and executed by the Participant and, if
required, the spouse of the Participant.
(c) A waiver made pursuant to subsection (a) shall be automatically
revoked:
(1) Upon the marriage of the Participant to a person who
has not consented to the waiver pursuant to
subsection (b)(1) or from whom consent was not
required by reason of subsection (b)(2); or
(2) Upon a change in the form of the death benefit or in
the Beneficiary designated by the Participant, unless
the spouse has relinquished the right to specify the
form of the death benefit and to name the
Beneficiary.
(d) The election period shall begin on the first day of the Plan
Year in which the Participant attains Age thirty-five (35) and
shall end on the date such Participant dies. Notwithstanding
the foregoing, in the case of a Participant who incurs a
Termination of Employment before the Participant attains Age
thirty-five (35), the election period
54
shall begin on the date of Termination of Employment and shall
end on the date the Participant dies.
(e) Notwithstanding anything in this Section to the contrary, an
election to waive the Qualified Pre-retirement Survivor
Annuity made by a Participant before the first day of the Plan
Year in which he attains Age thirty-five (35) shall only be
effective until the first day of the Plan Year in which he
attains Age thirty-five (35), at which time such election
shall be automatically revoked.
(f) The Plan Administrator shall provide to each Participant
within the period beginning on the first day of the Plan Year
in which the Participant attains Age thirty-two (32), but not
earlier than the first day of the one-year period ending on
the date he becomes a Participant, and ending on the last day
of the Plan Year preceding the Plan Year in which the
Participant attains Age thirty-five (35), but not earlier than
the last day of the one-year period beginning on the date he
becomes a Participant, a written explanation of the Qualified
Pre-retirement Survivor Annuity containing the following:
(1) The terms and conditions of the Qualified
Pre-retirement Survivor Annuity;
(2) The Participant's right to make, and the effect of,
an election to waive the Qualified Pre-retirement
Survivor Annuity;
(3) The rights of the Participant's spouse under
subsection (b)(1); and
(4) The right of the Participant to make, and the effect
of, a revocation of an election pursuant to
subsection (a).
The Plan Administrator shall also provide an explanation to
each Participant who incurs a separation from service prior to
receiving the explanation no later than the earlier of the end
of the one-year period beginning on the date of his/her
separation from service or the end of the period described
above.
(g) Notwithstanding anything herein to the contrary, a surviving
spouse entitled to a benefit under this Section, may elect to
receive payment of the Qualified Pre- retirement Survivor
Annuity in a lump sum or any other form of payment permitted
under Section 10.04. Upon request, the Plan Administrator
shall furnish the spouse with an explanation of the Qualified
Pre-retirement Survivor Annuity and with information
concerning the financial effect of receiving benefits in any
form selected. An election under this subsection must be filed
with the Plan Administrator before benefit payments commence,
unless the Plan Administrator determines otherwise.
(h) Notwithstanding anything herein to the contrary, a surviving
spouse may delay the commencement of benefit payments pursuant
hereto, provided such delay satisfies the requirement of
Article IX by deeming the surviving spouse to be the
Participant.
(i) If the lump sum amount of the Qualified Pre-retirement
Survivor Annuity otherwise payable to the surviving spouse is
less than Three Thousand Five Hundred Dollars ($3,500), such
benefit shall be paid as a single lump sum payment.
55
10.06 Optional Forms of Benefit Guaranteed: To the extent not already
provided under the terms of this Plan, and notwithstanding any other provisions
to the contrary, this Plan guarantees to the Beneficiaries of each Participant
whose Account includes Transferred Benefits the right to receive all Transferred
Benefits in any optional form of benefit (including time, manner and method of
distribution) protected under IRC S 411(d)(6). The extent and nature of the
optional forms of benefits so protected shall be determined by reference to the
Predecessor Plan(s). Effective for Plan Years commencing after December 31,
2002, (or if sooner, ninety (90) days after notice is given to all Plan
Participants that satisfies DOL Reg. ss.2520.104b-3) no optional forms of
benefit, except those required under Section 9.06 and those set forth in Section
9.03 shall be available under the Plan.
56
ARTICLE XI
BENEFITS UPON OTHER TERMINATION OF EMPLOYMENT
11.01 Vested Amounts: Upon attainment of his/her Normal Retirement Age
or the occurrence of death or Disability while employed by an FX Employer, a
Participant shall be one hundred percent (100%) vested in his/her Accrued
Benefit. Prior to the occurrence of any of the events described above a
Participant shall have a Vested Interest in his/her Accrued Benefit equal to the
sum of the following:
(a) One hundred percent (100%) of the balances in his/her
Participant Elective Deferral Account and Participant Rollover
Account, if any, as adjusted for any contributions or
distributions since the preceding Valuation Date; and
(b) his/her vested percentage of the balance in his/her Employer
Matching Contribution Account and Employer Profit-Sharing
Contribution Account, as adjusted for any contributions or
distributions since the preceding Valuation Date, according to
the Participant's Years of Vesting Service, and consistent
with the following schedule:
Percent of Vested
Years of Vesting Service Accrued Benefit
------------------------ ---------------
Less than three (3) years none
At least three (3) or more years 100%
(c) A Participant's Predecessor Plan Account (if any) shall be
vested pursuant to the vesting rules set forth in the
Predecessor Plan Account.
Effective January 1, 2005, a Participant shall be one hundred percent
(100%) vested in the balance in his/her Matching Contribution Account which has
been allocated to his/her Matching Contribution Account on account of
Participant Elective Deferrals made after December 31, 2004, and shall be vested
in a percentage of the balance in his/her Profit-Sharing Contribution Account
attributable to Profit Sharing Contributions made to the Plan after January 1,
2004, according to the Participant's Years of Vesting Service, and consistent
with the following schedule:
Percent of Vested
Years of Vesting Service Accrued Benefit
------------------------ ---------------
Less than one (1) year none
At least one (1) year 33 1/3%
At least two (2) years 66 2/3%
At least three (3) or more years 100%
The percentage of his/her Accrued Benefit attributable to the
Participant's Employer Contribution Accounts in which he is not vested shall be
forfeited by him as provided in Section 11.06.
11.02 Distribution of Vested Interest: Subject to the provisions of
Section 9.06 and Article XXII, a Participant who incurs a Termination of
Employment for any reason other than retirement or death shall receive a single
lump sum payment equal to the Participant's Vested Interest as of the date
payment is made. The amount of the lump sum payment shall be equal to the
57
Participant's Vested Interest on the date payment is made. Payment shall be made
in cash only, to the extent the Participant's Vested Interest is attributable to
the balance in the Participant's General Investments Account and in Employer
Securities to the extent the Participant's Vested Interest is attributable to
the balance in the Participant's Employer Securities Account.
If a Participant elects a deferred payment, then payment of the
Participant's Vested Accrued Benefit shall be deferred to the subsequent date
elected by the Participant, which may be no later than the latest date permitted
under Section 9.05, or (if no election is made) to the earliest date permitted
under Section 9.04, as though the Participant had then retired. Distribution
shall be in accordance with the provisions of Section 9.03.
If the lump sum amount that would be payable to the terminated
Participant is not more than Five Thousand Dollars ($5,000), without regard to
whether the Vested Accrued Benefit in the Participant's Account has ever
exceeded that amount at the time of any prior distribution, the benefit shall be
paid as a single lump sum payment in cash as soon as administratively feasible
following the end of the calendar month in which his/her Termination of
Employment occurs without regard to any Participant consent requirement or the
requirements of Section 9.06. For this purpose the Vested Accrued Benefit held
in the Participant's Employer Securities Account shall be valued as of the most
recent preceding Valuation Date.
If the Participant elects distribution following Termination of
Employment, payment shall commence after the later of the date on which the
Participant makes the distribution request (by filing a claim for benefits) or
terminates employment, according to the following rules:
(a) Payment of the portion of the Participant's Vested Interest
held in his/her General Investments Account shall commence as
soon as administratively feasible following the end of the
calendar month in which the claim for benefits is submitted or
the termination occurs.
(b) Payment of the portion of the Participant's Vested Interest
held in the Participant's Employer Securities Account shall
commence as soon as administratively feasible after the next
Valuation Date that follows the date the claim for benefits is
submitted or the termination occurs.
(c) A Participant may elect to delay distribution of his/her
Vested Interest held in his/her General Investments Account
until distribution of the amounts in his/her Employer
Securities Account.
If an Inactive Participant dies or incurs a Disability before his/her
Normal Retirement Date, the Plan Administrator, upon notice of the death or
Disability, shall direct the Trustee to make payment of the Participant's Vested
Interest to him (or to his/her Beneficiary if the Participant is deceased) in
accordance with the provisions of Article X in the case of death, or Section
9.02 in the case of Disability.
Notwithstanding the above, if a terminated Participant is re-employed
by the Employer prior to distribution of his/her Vested Interest, then no
distribution shall be made until his/her employment is again terminated or until
the occurrence of another event permitting distribution under the terms of the
Plan.
11.03 Eligible Rollover Distributions: Notwithstanding any provision of
this Plan to the contrary, a Distributee may elect, at the time and in the
manner prescribed by the Plan Administrator,
58
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover. For
purposes of this Section 11.03 the following definitions shall apply:
(a) "Eligible Rollover Distribution" shall mean any distribution
of all or any portion of the balance to the credit in the
Account 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 ss.401(a)(9), and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to Employer Securities). Effective
January 1, 2000, an Eligible Rollover Distribution shall not
include any hardship withdrawal as defined in Code
ss.401(k)(2)(B)(i)(IV) or permitted under Section 8.01(c) that
is attributable to the Participant's Elective Deferrals as
defined under Reg. ss.1.401(k)-1(d)(2)(ii).
Effective for distributions made after December 31, 2001, any
amount that is distributed on account of hardship (without
regard to whether the hardship withdrawal is attributable to
Elective Deferrals) shall not be an eligible rollover
distribution and the Distributee may not elect to have any
portion of such a distribution paid directly to an eligible
retirement plan. A portion of a distribution shall not fail to
be an eligible rollover distribution merely because the
portion consists of Employee Voluntary Contributions that are
not includable in gross income. However, such portion may be
transferred only to an individual retirement account or
annuity described in Code ss.ss.408(a) or (b), or to a
qualified defined contribution plan described in Code
ss.ss.401(a) or 403(a) that agrees to account separately for
amounts so transferred, including separately accounting for
the portion of the distribution that is includable in gross
income and the portion of the distribution that is not so
includable.
(b) "Eligible Retirement Plan" shall mean an individual retirement
account described in Code ss.408(a), an individual retirement
annuity described in Code ss.408(b), an annuity plan described
in Code ss.403(a), or a qualified trust described in Code
ss.401(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.
Effective for distributions made after December 31, 2001, an
eligible retirement plan shall also mean an annuity contract
described in Code ss.403(b) and an eligible plan under Code
ss.457(b) that is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or
political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from
this Plan. The definition of eligible retirement plan shall
also apply in the case of a distribution to a surviving
spouse, or to a spouse or former spouse who is the alternate
payee under a qualified domestic relation order, as defined in
Code ss.414(p).
(c) "Distributee" shall mean 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
59
domestic relations order, as defined in Code ss.414(p), are
Distributees with regard to the interest of the spouse or
former spouse.
(d) "Direct Rollover" shall mean a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
11.04 Breaks in Service and Vesting: If a Participant has a One Year
Break in Service, the Participant's Years of Vesting Service before the One Year
Break in Service shall not be included in computing Years of Vesting Service
until the Participant shall have completed one Year of Vesting Service after the
One Year Break in Service. If an Employee terminated employment prior to
becoming a Participant and incurred a One Year Break in Service, or if a
Participant did not have any Vested Interest derived from Employer contributions
prior to a One Year Break in Service, Years of Vesting Service before a One Year
Break in Service shall not be included in Years of Vesting Service calculated
after the Participant's One Year Break in Service if the number of consecutive
One Year Breaks in Service equals or exceeds the greater of five (5) or the
aggregate number of such Years of Vesting Service before the One Year Break in
Service.
Solely for the purpose of determining the vested percentage of a
Participant's Accrued Benefit derived from Employer contributions that accrued
prior to a five (5) consecutive one (1) year Break in Service period, the Plan
shall disregard any Year of Service subsequent to such five (5) consecutive one
(1) year Breaks in Service period.
If a Participant has a One Year Break in Service, and the break does
not arise on account of Termination of Employment, the Participant shall not be
credited with a Year of Vesting Service for that Plan Year. However, no amounts
in the Participant's Accounts shall be forfeited.
11.05 No Increase in Pre-break Vesting: For purposes of Section 11.01,
Years of Vesting Service after a Termination of Employment that resulted in five
(5) consecutive One Year Breaks in Service shall not increase the vested
percentage of a Participant's Account that was earned before such five (5)
consecutive One Year Breaks in Service.
11.06 Disposition of Forfeitures: Amounts forfeited by terminated
Participants from their Employer Matching Contribution Accounts shall be used to
reduce the Employer's contribution otherwise required pursuant to Section 5.06
and shall be allocated in the same manner as Employer Matching Contributions in
accordance with Section 6.02(c). Amounts forfeited by terminated Participants
from their Employer Profit Sharing Contribution Accounts shall be allocated as
though additional contributions the same manner as the Employer's Profit Sharing
Contribution made pursuant to Section 5.07 to Participants' Accounts as provided
in Section 6.02(d). To the extent possible, the Plan Administrator must forfeit
from a Participant's General Investments Account before making a forfeiture from
his/her Employer Securities Account.
Forfeiture of any non-vested interest with respect to any Participant
shall occur:
(a) In the case of a Participant who receives a lump sum
distribution of his/her Vested Interest on account of
Termination of Employment, on the day the Participant receives
the distribution.
(b) In the case of a Participant who has a Vested Interest derived
from Employer Contributions and does not receive a
distribution of such Vested Interest, on the last day of the
Plan Year in which the Participant incurs five (5) consecutive
One Year Breaks in Service.
60
(c) In the case of a Participant who has no Vested Interest
derived from Employer Contributions, on the last day of the
Plan Year in which the Participant terminates employment.
Non-vested interests of terminated Participants shall be held by the
Trustee in the respective Accounts of the Participant until the date determined
above and shall then be forfeited by the Participant and allocated in accordance
with this Section.
11.07 Distribution to Participants Who Are Less Than 100% Vested: In
the event a Participant who is less than one hundred percent (100%) vested in
his entire Account hereunder incurs a Termination of Employment and returns to
the employ of the Employer after a forfeiture of his/her non-vested interest but
prior to incurring five (5) consecutive One Year Breaks in Service, and prior to
his/her re-employment was paid his/her Vested Interest, the non-vested portion
of his/her Accrued Benefit that was forfeited by the Participant shall be
disregarded in computing his/her Accrued Benefit after re-entry into the Plan,
unless the Participant repays, pursuant to Section 11.08, the amounts
distributed from his/her Account from which an amount was forfeited. If a
Participant does repay the distribution, the balance in such Account shall be
restored as provided in Section 11.09.
In the event a Participant who had no Vested Interest in any Employer
Contribution Account separated from service and returns to the employ of the
Employer after a forfeiture of his/her non- vested interest but prior to
incurring five (5) consecutive One Year Breaks in Service, any non-vested
amounts forfeited by the Participant shall be restored, as provided in Section
11.09, to the Account from which an amount was forfeited.
11.08 Repayment of Distribution: A Participant described in Section
11.07 who received a lump sum distribution of less than one hundred percent
(100%) of his/her Accrued Benefit shall be entitled to repay the amounts
distributed from all Employer Contribution Accounts. The repayment must be for
the full amount distributed from all Employer Contribution Accounts and must be
made not later than the earlier of:
(a) The date on which the Participant incurs five (5) consecutive
One Year Breaks in Service after the date of distribution.
(b) The end of the five (5) year period beginning with the date
the Participant is re- employed by the Employer.
Any repayment shall not be included in applying the limitations of
Article V or Article VIII hereunder.
11.09 Restoration of Accounts: Any amount repaid pursuant to Section
11.08 shall be credited to the Participant's Accounts for which it is repaid,
with credit to be made as of the date of repayment. The Account shall also be
credited with the amount previously forfeited from the Account, with credit to
be made as of the last day of the Plan Year in which repayment is made.
In the case of a Participant to whom the second paragraph of Section
11.07 applies, the Participant's Accounts from which amounts were previously
forfeited shall be credited with the amount so forfeited, with credit to be made
as of the last day of the Plan Year in which the Participant resumes
participation in the Plan.
61
Any previously forfeited amounts that are credited to Participants'
Accounts pursuant to this Section shall be derived from the following sources in
the following order of priority:
(a) First, the amount, if any, to be credited to such types of
Accounts for the Plan Year pursuant to Section 11.05;
(b) Second, Employer contributions for the Plan Year, if any, that
are not required to be credited to such types of Accounts for
other Participants; and
(c) Third, an additional Employer contribution for the Plan Year,
regardless of whether the Employer has any Net Profits for the
year.
If for any Plan Year, the Accounts of more than one Participant are
required to be restored, then restorations shall be derived from the above
sources in the same proportion that the amount to be restored to each
Participant bears to the total amount to be restored to all such Participants
for the Plan Year. Any such amounts credited to a Participant's Accounts shall
not be included in applying the limitations of Article V or Article VIII
hereunder.
11.10 Amendments to the Vesting Schedule: No amendment to the vesting
schedule or provisions of Section 11.01, or to this Plan that directly or
indirectly affects the computation of a Participant's Accrued Benefit, shall
deprive a Participant of a vested right to the benefits accrued to the effective
date of the amendment. Furthermore, if the vesting schedule or provisions of
Section 11.01 are amended, each Participant with at least three (3) Years of
Vesting Service (determined as of the later of the date the amendment is adopted
or the date the amendment is effective) may elect to have his/her vesting
percentage computed under the Plan without regard to the amendment. The period
during which the election may be made shall commence with the date the amendment
is adopted and shall end on the latest of:
(a) Sixty (60) days after the amendment is adopted;
(b) Sixty (60) days after the amendment becomes effective; or
(c) Sixty (60) days after the Participant is issued written notice
of the amendment by the Employer or Plan Administrator.
In the absence of any written notice under (c) above, any Participant who has at
least three (3) Years of Vesting Service (as determined above) shall at all
times receive a Vested Interest under whichever vesting schedule provides the
greatest Vested Interest.
62
ARTICLE XII
FIDUCIARY DUTIES
12.01 General Fiduciary Duty: A Fiduciary, whether or not a Named
Fiduciary, shall discharge his/her duties solely in the interest of the
Participants and their Beneficiaries hereunder. All assets of this Plan shall be
devoted to the exclusive purpose of providing benefits to Participants and their
Beneficiaries and defraying the reasonable expenses of administering the Plan.
Each Fiduciary, whether or not a Named Fiduciary, shall discharge his/her duties
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims. Each Fiduciary shall also discharge his/her duties in a manner
consistent with the documents and instruments governing the Plan to the extent
such documents and instruments are consistent with law. No Fiduciary, whether or
not a Named Fiduciary, shall engage in any of the prohibited transactions with
disqualified persons or parties-in-interest as those terms and transactions are
defined by the Code and ERISA, as passed and as it may be amended, and
regulations thereunder.
12.02 Allocation of Responsibilities: Each Named Fiduciary shall have
only those duties and responsibilities expressly allocated under the terms of
this Plan. No other duties or responsibilities shall be implied.
12.03 Delegation of Responsibilities: Each Named Fiduciary may delegate
the fiduciary responsibilities other than Trustee responsibilities allocated to
such Fiduciary under this Plan to any person other than a Named Fiduciary. If
any duties or responsibilities are delegated under this section, the person to
whom the duties or responsibilities are delegated shall acknowledge the fact in
writing and shall specify in writing the duties and responsibilities so
delegated. All other duties and responsibilities shall be deemed not to have
been delegated.
12.04 Liability for Allocation or Delegation of Responsibilities: A
Named Fiduciary shall not be liable for the acts or omissions of a person to
whom responsibilities or duties are allocated or delegated in accordance with
Section 12.02 or Section 12.03 except to the extent such Named Fiduciary
breaches his/her obligation under Section 12.01:
(a) With respect to the allocation or delegation;
(b) With respect to establishing or implementing a procedure for
allocation or delegation; or
(c) By continuing the allocation or delegation.
Nothing in this section shall relieve a Fiduciary from liability
incurred under Section 12.05.
12.05 Liability for Co-Fiduciaries: In addition to the liability a
Fiduciary may incur for the breach of his/her duty under Section 12.01 or 12.04,
a Fiduciary shall be liable for a breach of Fiduciary duty committed by another
Fiduciary in the following circumstances:
(a) If he participates knowingly in, or knowingly undertakes to
conceal, an act or omission of such other Fiduciary knowing
such act or omission is a breach;
(b) If, by his/her failure to comply with Section 12.01 he has
enabled such other Fiduciary to commit a breach;
63
(c) If he has knowledge of a breach by such other Fiduciary,
unless he makes reasonable efforts under the circumstances to
remedy the breach.
12.06 Same Person May Serve in More than One Capacity: Nothing herein
shall prevent any person from serving in more than one Fiduciary capacity.
12.07 Indemnification: The Employer shall hold harmless and indemnify
to the fullest extent permitted by ERISA each non-Trustee Fiduciary of the Plan
with respect to the consequences of all actions or failures to act of the
Fiduciary while carrying out his/her responsibilities under the Plan. The
Employer shall further hold harmless and indemnify each Fiduciary who is
subjected to any claim or action or who is made a party in any threatened,
pending or completed proceeding, including, without limitation, any proceeding
brought by or in the name of the Plan or by any participant thereof or by any
governmental agency. The Employer's indemnification shall include any and all
expenses (including attorney's and/or consultant's fees), costs, damages,
judgments, fines, interest, penalties (including any that may be imposed under
ERISA ss.502(l)) and/or amounts paid in settlement and that are actually and
reasonably incurred by a Fiduciary in connection with the investigation,
defense, settlement, preparation for trial, trial, or appeal of any proceeding,
claim or action. Notwithstanding the foregoing, the Employer shall not be
obligated to hold harmless or indemnify a Fiduciary of the Plan if
indemnification is inconsistent with applicable law or if the act(s) or
omission(s) of the Fiduciary to be indemnified are determined to have involved
intentional misconduct, gross negligence or a knowing violation of ERISA or
other applicable law by the Fiduciary.
To the extent a Fiduciary is a named insured under any policy of
liability insurance maintained by the Plan or the Employer, the policy and the
payment obligations of the insurance company under the policy shall be deemed
primary and in lieu of the Employer's obligations under this Section 12.07, but
only to the extent of the coverage provided in the policy. No insurer under any
policy shall claim any right to reimbursement or refund from the Employer and no
obligation of the Employer hereunder shall be deemed to inure to the benefit of
any third party.
64
ARTICLE XIII
THE PLAN ADMINISTRATOR
13.01 Appointment of Plan Administrator: The Board of Directors of the
Plan Sponsor shall appoint the Plan Administrator, which may be the Plan
Sponsor. If the Plan Sponsor is appointed as Plan Administrator, the Plan
Sponsor may appoint one or more Committees to carry out the duties of the Plan
Administrator under this Plan. In that event all references in the Plan to the
Plan Administrator shall be deemed to refer to the appointed Committee. The
duties of the Committees shall be divided as the Plan Administrator deems
appropriate and may be designated by separate instrument. The Committees shall
act by majority vote except that they shall act by unanimous vote at any time
when there are only two members comprising the Committee.
13.02 Acceptance by Plan Administrator: The Plan Administrator shall
accept its appointment by joining with the Employer in the execution of this
Agreement.
13.03 Signature of Plan Administrator: All persons dealing with the
Plan Administrator may rely on any document executed by the Plan Administrator;
or, in the event of appointment of a Committee or Committees, such persons may
rely on any document executed by at least one member of the appropriate
Committee as being the act of the Plan Administrator.
13.04 Appointment of an Investment Manager: The Plan Administrator may
appoint an Investment Manager or Managers to manage, acquire and dispose of any
assets of the Plan. In the event responsibility for appointment of Investment
Managers is delegated by the Plan Administrator to a named Committee, that
delegation shall carry with it the authority of the Committee to act as a Named
Fiduciary for purposes of ERISA in appointing an Investment Manager. The
Investment Manager shall accept his/her appointment by written agreement
executed by the Plan Administrator and Investment Manager. This written
agreement shall specify the Plan assets for which the Investment Manager is
responsible and such written instrument shall be kept with the other documents
governing the operation of the Plan. The Trustee shall be entitled to rely on
written instructions from the Investment Manager and shall be under no
obligation to invest or otherwise manage any asset of the Plan subject to the
management of the Investment Manager.
13.05 Duties of the Plan Administrator: The Plan Administrator shall be
responsible for the general administration of the Plan including, but not
limited to, the following:
(a) To prepare an annual report, summary plan description and
modifications thereto, and summary annual report;
(b) To complete and file the various reports and tax forms with
the appropriate government agencies as required by law;
(c) To distribute to Plan Participants and/or their Beneficiaries
the summary plan description and reports sufficient to inform
such Participants or Beneficiaries of their Accrued Benefit
and their Vested Accrued Benefit as required by law;
(d) To determine annually, or more frequently if necessary, which
Employees are eligible to participate in the Plan;
(e) To determine the benefits to which Participants and their
Beneficiaries are entitled and to approve or deny claims for
benefits;
65
(f) To provide Plan Participants with a written explanation of the
effect of electing an optional form of benefit payment;
(g) To retain copies of all documents or instruments under which
the Plan operates in its own office, the principal place of
business of the Plan Sponsor and such other place as the
Secretary of Labor or his/her delegate may by regulation
prescribe; to make all such documents and instruments
governing the operation of the Plan available for inspection
by Plan Participants and/or their Beneficiaries; and to
furnish copies of such documents or instruments to Plan
Participants and/or their Beneficiaries on request, charging
only the cost thereof as prescribed by regulation of the
Secretary of Labor or his/her delegate;
(h) To interpret Plan provisions as needed and in this regard to
have complete and total discretion in the interpretation of
the Plan; and
(i) To act as the Plan's agent for the service of legal process,
unless another agent is designated by the Plan Sponsor and to
act on behalf of the Plan in all matters in which the Plan is
or may be a party.
13.06 Claims Procedure: Claims for benefits under the Plan shall be
presented to the Plan Administrator or its designated representative pursuant to
procedures established and approved by the Plan Administrator, which may include
electronic means. Notice of the disposition of a claim shall be furnished to the
claimant no later than ninety (90) days after the application is submitted. In
the event the claim is denied, the reasons for the denial shall be specifically
set forth in a notice in language calculated to be understood by the claimant.
Pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant may perfect the claim shall be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claim review procedure.
13.07 Claims Review Procedure: Any Employee, former Employee, or
Beneficiary of either, whose benefit claim submitted pursuant to Section 13.06
has been denied (whether in full or in part) shall be entitled to request
further consideration to his/her claim by filing an appeal with the Plan
Administrator, which may be in the form of a request for reconsideration. The
request, together with a written statement of the reasons why the claimant
believes his/her appeal should be allowed, shall be filed with the Plan
Administrator no later than sixty (60) days after receipt of the written
notification provided for in Section 13.06. The Plan Administrator shall conduct
the review of the appeal. The Plan Administrator, in its sole discretion, may
order a hearing at which the claimant may be represented by an attorney or any
other representative of his/her choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of
his/her claim. During the appeal review period or at the hearing (upon five (5)
business days prior written notice to the Plan Administrator) the claimant or
his/her representative shall have an opportunity to review all documents in the
possession of the Plan that are pertinent to the claim at issue and its
disallowance. A final decision on the claim shall be made by the Plan
Administrator within sixty (60) days of receipt of the appeal unless (i) because
of special circumstances there has been an extension of sixty (60) days that has
been communicated in writing to the claimant, or (ii) a hearing is held, in
which event the final decision shall be made within one hundred twenty (120)
days of receipt of the appeal. The communication containing the Plan
Administrator's decision shall be in writing and shall be written in a manner
calculated to be understood by the claimant. The communication shall include
specific reasons for the Plan Administrator's decision and specific references
to the pertinent Plan provisions on which the decision is based. The
communication shall
66
also inform the claimant of the limitation on any further action by the claimant
set forth in Section 13.08.
13.08 Limitations of Actions on Claims: The delivery to the claimant of
the final decision of the Plan Administrator with respect to a claim for
benefits under Section 13.06 that has been reviewed and considered under the
appeal procedures of Section 13.07 shall commence the period during which the
claimant may bring legal action under ERISA for judicial review of the Plan
Administrator's decision. No civil action with respect to the claim for benefits
or the subject matter thereof may be commenced by the claimant, whether such
action is pursued through litigation, arbitration or otherwise, prior to the
completion of the claims and claims review process set forth in Sections 13.06
and 13.07, nor following the expiration of two (2) years from the date of
delivery of the final decision of the Plan Administrator to the claimant under
Section 13.07.
13.09 Compensation and Expenses of Plan Administrator: The Plan
Administrator may engage the services of any person, including counsel, whose
services, in the opinion of the Plan Administrator, are necessary to assist it
in carrying out its responsibilities under the Plan. The Employer may direct the
Trustee to pay any expenses properly and actually incurred for such services
from the Trust Fund, including such reasonable compensation for services
provided by the Plan Administrator as shall have been agreed upon between them,
or, alternatively, the Employer may pay such expenses or compensation directly;
provided, however, that no individual acting as Plan Administrator shall receive
any compensation if he already receives full-time pay from the Employer.
13.10 Removal or Resignation: A Plan Administrator may be removed by
the Board of Directors of the Plan Sponsor upon thirty (30) days written notice,
and may resign upon thirty (30) days written notice to the Board of Directors.
Upon such removal or resignation, or the inability of the Plan Administrator for
any other reason to act as Plan Administrator, the Board of Directors shall
appoint a successor Plan Administrator. The successor Plan Administrator, upon
written acceptance, shall have all the duties and responsibilities of a Plan
Administrator herein. The former Plan Administrator shall deliver to the
successor Plan Administrator all records and documents that it holds relating to
the Plan upon removal or resignation.
13.11 Records of Plan Administrator: The Plan Sponsor shall have
access, upon request, to all the records of the Plan Administrator that relate
to the Plan.
13.12 Other Responsibilities: Nothing in this Article shall be
construed to limit the responsibilities and duties allocated to the Plan
Administrator in other Articles of this Plan.
67
ARTICLE XIV
THE TRUSTEE
14.01 Appointment of Trustee: The Board of Directors of the Plan
Sponsor shall appoint the Trustee. Nothing in this Plan shall prevent the Plan
Sponsor from appointing multiple Trustees or creating multiple Trust Funds, each
with separate Trustees. If more than one person is appointed as Trustee of a
single Trust Fund, they shall act by majority vote; provided, however, that they
shall act by unanimous vote at any time when there are only two Trustees. In the
event there is more than one Trustee, the reference to Trustee shall be deemed
to refer to all the Trustees.
14.02 Acceptance by Trustee: The Trustee shall accept its appointment
by executing a separate trust agreement in a form acceptable to the Trustee and
Employer. The provisions of the separate Trust Agreement shall control over
those in this Plan, to the extent such provisions define the duties of the
Trustee with respect to the Plan and Trust Fund. Prior to the effective date of
the Trust Agreement the provisions of the Prior Plan concerning the Trustee and
its duties shall apply.
14.03 Provisions of Trust Agreement: The separate Trust Agreement shall
authorize and empower the Trustee to invest up to one hundred percent (100%) of
the Trust Fund allocated to the Employer Matching Contribution and Profit
Sharing Contribution Accounts in Employer Securities.
14.04 Participant Voting Rights: The separate Trust Agreement shall
provide for voting Employer Securities by the Trustee only. The Trust Agreement
may permit voting direction from a committee established by the Plan Sponsor for
that purpose.
14.05 Investment Committee: In the event of appointment of an
Investment Committee by the Plan Administrator, then except to the extent
responsibility for certain Plan assets has been allocated to an Investment
Manager as provided in Section 13.04, the Investment Committee is authorized and
empowered to direct investment of the Trust Fund, consistent with the terms of
the separate Trust Agreement. The Investment Committee shall direct investment
and reinvestment of the Trust Fund to keep the Trust Fund invested without
distinction between principal and income and in such securities or property,
real or personal, wherever situated, as the Committee shall deem advisable
consistent with the investment policy of the Plan established under Article
XVIII. The Committee shall give due regard to any limitations imposed by the
Code or ERISA so that at all times this Plan may qualify as a qualified Plan and
Trust.
14.06 Liability for Plan Expenses: The Plan specifically permits the
payment of Plan administration and operation expenses from the Plan's Trust
Fund. Moreover, the Plan also permits the allocation of certain administration
expenses to an individual Participant's Account whenever an expense can be
specifically determined and the Participant's Account identified which gives
rise to the expense. Expenses not attributable to particular Participant
Accounts but nevertheless payable from the Trust Fund may be allocated among all
Participant Accounts pro rata, or by any other appropriate method. The Plan
Sponsor shall determine in its sole discretion the extent to which Plan
administration and operation expenses shall be paid from the Trust Fund or from
individual Participant Accounts, provided that all such payments and charges
shall comply with ERISA and all regulations and other guidance issued by the
Department of Labor. The Plan Sponsor shall be entitled to reimbursement from
the Plan for payment of all Plan expenses advanced by the Plan Sponsor (whether
charged to an individual Participant's Account or the Trust Fund as a whole)
that are reasonably subject to reimbursement pursuant to ERISA and DOL
regulations and other guidance, provided that no reimbursement to the Plan
Sponsor shall be made with respect to any charge applicable to an individual
Participant's Account unless the Participant has been previously
68
informed through a summary plan description or similar document that his or her
Account may be subject to such charges.
14.07 Payment From the Trust Fund: At the direction of the Plan
Administrator, the Trustee shall, from time to time, in accordance with the
terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be
responsible in any way for the application of such payments.
69
ARTICLE XV
THE EMPLOYER
15.01 Notification: The Plan Sponsor shall notify the Plan
Administrator and the Trustee in writing if a new Plan Administrator or Trustee
has been appointed hereunder.
15.02 Record Keeping: Each participating FX Employer shall maintain
records with respect to each Employee sufficient to enable the Plan
Administrator and Trustee to fulfill their duties and responsibilities under the
Plan.
15.03 Bonding: The Plan Administrator shall procure bonding to insure
the Plan against risk of loss. The persons to be bonded and the amount necessary
shall be determined in accordance with ERISA and regulations thereunder. No
bonding shall be required pursuant to state law.
15.04 Signature of Employer: All persons dealing with the Plan may rely
on any document executed in the name of the Plan Sponsor by its general partner
or by any other individual duly authorized by its Board of Directors, whether
retroactive or prospective.
15.05 Plan Counsel and Expenses: The Plan Sponsor may engage the
service of any person or organization, including counsel, whose services, in the
opinion of the Plan Sponsor are necessary for the establishment or maintenance
of this Plan. The expenses incurred or charged by a person or organization
engaged by the Plan Sponsor pursuant to the previous sentence shall be paid by
the Plan Sponsor, or alternatively, the Plan Sponsor may direct the Trustee to
pay such expenses from the Trust Fund.
15.06 Other Responsibilities: Nothing in this Article shall be
construed to limit the responsibilities or duties allocated to the Plan Sponsor
and FX Employers in other Articles of the Plan.
15.07 Affiliated Groups:
(a) For purposes of crediting Hours of Service, all employees of
all members of an Affiliated Group of which an FX Employer is
also a member and all employees of any other entity required
to be aggregated with the FX Employer pursuant to regulations
under Code ss.414(o) shall be treated as employed by a single
Employer for purposes of Article III (Service), Article IV
(Eligibility), Article V (Contributions) and Article XI,
(Vesting). Except as provided in Section 7.01, all employees
of all members of an Affiliated Group and all employees of any
other entity required to be aggregated with the Employer
pursuant to regulations under Code ss.414(o) shall be treated
as employed by a single Employer.
(b) If the Employer is a member of an Affiliated Group and if the
Affiliated Group maintains more than one qualified retirement
plan that is integrated with Social Security, only a single
integration level shall be applicable to each Participant who
is a Participant in one or more integrated plans. The
integration level for each Participant shall be prorated in
each integrated plan in the ratio that the Annual Compensation
received by the Participant from the member of the Affiliated
Group maintaining the integrated plan bears to the Annual
Compensation received by the Participant from all members of
the Affiliated Group maintaining all such integrated plans.
70
(c) If more than one Employer has adopted this Plan and if all
such Employers are members of the same Affiliated Group the
"effective date" for any adopting Employer who adopts this
Plan on other than the Effective Date shall be the date
indicated in the adoption agreement by which the adopting
Employer shall first elect to be covered by this Plan.
15.08 Employer Contributions: Each participating FX Employer shall
contribute to the Plan that Employer's share of Elective Deferral and Employer
Matching Contributions according to the elections of the Participants employed
by that Employer, as well as that Employer's share of Employer Profit Sharing
Contributions.
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ARTICLE XVI
PLAN AMENDMENT OR MERGER
16.01 Power to Amend: The Plan Sponsor and the Plan Administrator shall
each have the power to amend, alter, or wholly revise the Plan, prospectively or
retrospectively, at any time, and the interest of every Participant is subject
to the power so reserved. The Plan Administrator shall not exercise its power to
amend without consent of the Plan Sponsor unless the Plan Sponsor has ceased to
operate as a viable business entity or has filed or is subject to a petition
under Chapter 7 of the U.S. Bankruptcy Code.
16.02 Limitations on Amendments: Upon execution of any amendment, the
Employer, Plan Administrator, Trustees, Participants and their Beneficiaries
shall be bound thereby; provided, however, that no amendment:
(a) Shall enlarge the duties or responsibilities of the Plan
Administrator or Trustee without its consent; or
(b) Shall cause any part of the assets contributed to the Plan to
be diverted to any use or purpose other than for the exclusive
benefit of the Participants and their Beneficiaries (including
the reasonable cost of administering the Plan) prior to the
satisfaction of all liabilities (fixed and contingent) under
the Plan to Participants and their Beneficiaries; or
(c) Shall reduce the vesting percentage of any Participant,
Inactive Participant, or Beneficiary; or
(d) Shall reduce or restrict the Account Balance of any
Participant, Inactive Participant or Beneficiary; or
(e) Shall eliminate an optional form of benefit, with respect to
benefits attributable to service before the amendment.
Notwithstanding the above, any amendment may be made that may be or
become necessary in order that the Plan will conform to the requirements of Code
ss.401(a), or of any generally similar successor provision, or in order that all
of the provisions of the Plan will conform to all valid requirements of
applicable federal and state laws.
16.03 Method of Amendment: If the Plan is amended by the Plan Sponsor,
the amendment shall be stated in an instrument in writing signed in the name of
the Plan Sponsor by a duly authorized corporate officer, or by any other
individual duly authorized by the Plan Sponsor, whether retroactive or
prospective. If the Plan is amended by the Plan Administrator, the amendment
shall be stated in an instrument in writing signed in the name of the Plan
Administrator by the individual duly authorized by the Plan Administrator for
that purpose, whether retroactive or prospective.
16.04 Notice of Amendment: Written notice of each amendment shall be
given promptly by the Plan Sponsor and the Plan Administrator to each other, to
any other Employers and the Trustee.
16.05 Merger or Consolidation: This Plan and Trust may be merged or
consolidated with, or its assets or liabilities may be transferred to, any other
plan only if the benefits that would be
72
received by each Participant of this Plan, in the event of a termination of the
Plan immediately after such merger, consolidation or transfer, are at least
equal to the benefits the Participant would have received if the Plan had
terminated immediately before the merger, consolidation or transfer. The Trustee
possesses the specific authority to enter into merger agreements or direct
transfer of assets agreements with the Trustees of other retirement plans
described in Code ss.401(a) and to accept the direct transfer of Plan assets, or
to transfer Plan assets, as a party to any such agreement.
The Trustee may accept a direct transfer of Plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
condition(s). If the Trustee accepts such a direct transfer of Plan assets, the
Plan Administrator and Trustee shall treat the Employee as a Participant for all
purposes of the Plan except the Employee may not make Elective Deferral
contributions under Article V nor shall the Employee share in Employer
contributions or Participant forfeitures under Article VI until he actually
becomes a Participant in the Plan and satisfies the Plan's benefit accrual
requirements.
The Trustee shall hold, administer and distribute the transferred
assets as a part of the Trust Fund and the Trustee shall maintain a separate
Predecessor Plan Account for the benefit of the Employee on whose behalf the
Trustee accepted the transfer in order to reflect the value of the transferred
assets.
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ARTICLE XVII
TERMINATION OR DISCONTINUANCE OF CONTRIBUTIONS
17.01 Right to Terminate: The Plan Sponsor may terminate the Plan at
any time by appropriate corporate action specifying the termination date. The
Plan Sponsor shall promptly notify the Plan Administrator, Trustee and any other
Employers of such action. Further, the Plan Sponsor shall notify all
Participants and Inactive Participants of such action, and shall file all
required reports with Federal agencies, in accordance with applicable
regulations.
17.02 Effect of Termination: In the event of a Plan termination or a
complete discontinuance of Employer Contributions, the rights of all affected
Participants to their Accrued Benefits as of the date of such termination shall
be fully vested and shall not thereafter be subject to forfeiture, except to the
extent that law or regulation may preclude such vesting in order to prohibit
discrimination in favor of officers, shareholders, or highly compensated
Employees. For purposes of the preceding sentence, a Participant who has
terminated employment with the Employer and incurred five consecutive One Year
Breaks in Service as of the termination date shall not be considered to be
affected by such Plan termination, and shall be vested in his/her Accrued
Benefit only to the extent provided in the other applicable Articles of this
Plan. All rights of Participants in this Plan affecting Employer Securities held
in trust for the benefit of Participants shall continue notwithstanding any Plan
termination.
17.03 Manner of Distribution: In the event of a Plan termination, the
Plan Administrator shall direct the Trustee to distribute the Accrued Benefits
of all Participants, Inactive Participants, and Beneficiaries in accordance with
Article IX or Article XI.
Notwithstanding the above, no payment shall be made to a Participant
from his/her Participant Elective Deferral Account (or any other Account the
contributions to which have been included in the Deferral Account for the
Participant) unless or until such time as the Participant:
(a) Is eligible for Retirement or Disability Benefits as provided
in Article IX;
(b) Dies;
(c) Separates from the service of the Employer (after December 31,
2001, incurs a severance from employment);
(d) Attains the Age of fifty-nine and one-half (59 1/2); or
(e) Incurs a Financial Hardship.
All Elective Deferral Accounts shall be maintained by the Trustee and
distributed at such time and in such manner as previously provided herein.
Alternatively, the balance in such Accounts may be transferred to another plan
maintained or established by the Employer that qualifies under Code ss.401(a) as
provided above, but only if such other plan contains the same restrictions on
the distribution of such transferred amounts as described in the preceding
paragraph.
17.04 No Reversion: No termination or amendment of this Plan and Trust
and no other action shall divert any part of the funds to any purpose other than
the exclusive benefit of Participants, Inactive Participants or their
Beneficiaries except, and notwithstanding any other provision of this Plan to
the contrary, any amount held in an unallocated suspense account that
74
cannot be allocated to any Participant due to the limitations of Article VII may
be returned to the Employer upon termination of the Plan.
17.05 Termination of an Employer: An Employer, other than the Plan
Sponsor, may terminate its participation in the Plan at any time by a written
resolution by the Board of Directors specifying the termination date. The
Employer shall promptly notify the Plan Sponsor, Plan Administrator and Trustee
of any such action or direction. The participation of an Employer in the Plan
shall also terminate in the event of a complete discontinuance of contributions
by such Employer.
17.06 Partial Termination: A partial termination of the Plan may be
deemed to have occurred if a significant percentage of Participants are excluded
from coverage by reason of amendment of the Plan, severance by an Employer or
termination of an Employer, or if the Plan is amended to adversely affect the
rights of employees to vest in benefits under the Plan or to reduce or eliminate
future benefit accruals under the Plan. The determination of whether a partial
termination has occurred shall be made on the basis of the facts and
circumstances in a particular case.
17.07 Effect of Partial Termination: In the event of a partial
termination of the Plan, the provisions of Section 17.02 shall apply to those
Participants affected by the partial termination.
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ARTICLE XVIII
FUNDING POLICY FOR PLAN BENEFITS
18.01 Funding Method: The benefits provided by this Plan shall be
funded by contributions of the Employer and Participants. Employer Matching
Contributions and Employer Profit Sharing Contributions may consist entirely of
Employer Securities. Elective Deferrals shall be made in cash only. The amount
of all Employer Contributions shall be determined as provided in this Plan. The
amount of all other contributions shall likewise be determined as provided in
this Plan.
18.02 Investment Policy: This Plan has been established for the sole
purpose of providing benefits to the Participants and their Beneficiaries. In
determining investment directions and investment options available hereunder,
the Plan Administrator shall establish a funding policy that considers the short
and long-range needs of the Plan based on the evident and probable requirements
of the Plan as to the time benefits shall be payable and the requirements
therefor. Benefits may be provided through any combination of investment media
designed to provide the requisite liquidity, growth and security appropriate to
this Plan.
Benefits for Participants, to the extent not funded through Employer
Securities, may be provided through any investment media offered by the Trustee
or through the purchase of shares in any investment company regulated under the
Investment Company Act of 1940, or through any investment proper and appropriate
to be made by the Trustee in accordance with Article XIV, or through any
combination of such investments.
The Plan may not obligate itself to acquire Employer Securities from a
particular holder thereof at any indefinite time determined upon the happening
of an event such as the death of the holder.
The Plan may not obligate itself to acquire Employer Securities under a
put option binding upon the Plan. However, at the time a put option is
exercised, the Plan may be given an option to assume the rights and obligations
of the Employer under a put option binding upon the Employer.
All purchases of Employer Securities shall be made at a price which, in
the judgment of the Plan Administrator, does not exceed the fair market value
thereof. All sales of Employer Securities shall be made at a price which, in the
judgment of the Plan Administrator, is not less than the fair market value
thereof.
18.03 No Purchase of Life Insurance Contracts: Unless authorized by the
Plan Sponsor pursuant to amendment to this Article XVIII, no insurance contracts
shall be purchased by the Trustee on the life of any Participant.
18.04 Investment Fund: The Employer shall contribute to an Investment
Fund that shall be established by the Trustee to provide such additional
benefits, in addition to the proceeds or surrender values of any allocated
annuity contracts, for Participants and their Beneficiaries provided by this
Plan.
18.05 Non-transferability of Annuity Contracts: In the event the assets
of the Trust Fund include allocated annuity contracts, all incidents of
ownership in such contracts may be exercised by the Trustee, as directed by the
Plan Administrator, except to the extent any death benefits payable thereunder
may be paid to the Beneficiary designated by the Participant. All such contracts
shall provide that the owner may not change the ownership of the contract, nor
may it be sold, assigned
76
or pledged as collateral for a loan, as security for the performance of an
obligation, or for any other purpose to anyone. No annuity contract may be
delivered to a Participant as a distribution from the Plan.
18.06 Participant Directed Investments: In the sole discretion of the
Plan Administrator a Participant, Inactive Participant or Beneficiary may be
allowed to direct the Trustee to invest all or part of the General Investments
Account hereunder in such specific assets as are permitted under the terms of
the Trust Agreement. However, the Participant may not direct the Trustee to use
any portion of his/her General Investments Account to acquire any property that
would be classified as a "collectible" and result in the investment being
considered a distribution to the Participant under Code ss.408(m) and
Regulations thereunder. That portion of the General Investments Account so
directed shall be credited (charged) solely with all investment earnings
(losses) and appreciation (depreciation) thereon, and charged with any fees or
expenses incurred by the Trustee in investing or administering that portion of
the Account. The portion so directed shall also be credited with any
contributions thereto and charged with any withdrawals or payments made
therefrom.
Any portion of the General Investments Account, the investment of which
is not directed by the Participant, shall be commingled and invested with other
Trust assets. That portion shall be credited (charged) with its proportionate
share of investment earnings (losses) and appreciation (depreciation) on the
total non-directed assets of the Trust Fund, and charged with any specific or
proportionate share of expenses incurred by the Trustee in investing or
administering that portion of the Account as provided in Section 6.03. The
non-directed portion shall also be credited with any contributions thereto and
charged with any withdrawals or payments therefrom.
For purposes of Section 6.03, any transfers from the non-directed
portion of the General Investments Account to the directed portion of the
General Investments Account shall be treated as a withdrawal from the
non-directed portion and a contribution to the directed portion, and vice versa
for transfers from the directed portion to the non-directed portion.
The Plan Administrator and Trustee may establish a reasonable policy
regarding the types of Accounts eligible, minimum balance required, and other
reasonable criteria that must be satisfied in determining whether this option of
directed investments shall be available to a Participant. The policy shall be in
writing and shall be administered in a uniform and non-discriminatory manner.
18.07 Establishment of Separate Funds: There is hereby reserved to the
Plan Administrator the right to direct the Trustee to establish separate
investment funds within the General Investments Account. The Plan Administrator
may follow different investment policies with respect to each investment fund so
established. In the sole discretion of the Sponsoring Employer a Participant,
Inactive Participant, Beneficiary or Alternate Payee shall be allowed to direct
the Trustee to invest the amounts in his/her General Investments Account,
consistent with the rules in this Section 18.07, in any or all of the investment
Funds. The following administrative rules shall apply if such Funds are
established:
(a) Income, gains and losses from each investment fund will be
reinvested in the same fund and credited only to the General
Investments Accounts of those Participants who have a balance
in such fund, in a manner consistent with Section 6.03.
(b) Each Participant shall be entitled to direct the portion of
the contributions made to his/her General Investments Account
that are to be invested in each of the investment funds
available. Upon the occurrence of any event or decision of the
Plan Administrator that results in the deletion of any of the
investment funds, that replaces
77
any such fund with another fund, or that adds a new investment
fund, the Plan Administrator shall designate a default
investment fund or funds into which contributions on behalf of
a Participant shall be invested in the event no specific
direction for investment is made by the Participant. The Plan
Administrator shall designate a default investment fund for
any Participant or Beneficiary (including any Beneficiary by
virtue of a Qualified Domestic Relations Order) who does not
provide for investment instructions with respect to his/her
General Investments Account into any investment fund under
this Section or Section 18.06.
(c) Each Participant shall have the right to change the portion of
succeeding contributions to be invested in each investment
fund and the right to direct that the asset balance or any
portion thereof in any investment funds in his/her General
Investments Account be liquidated and the proceeds thereof
transferred to any other investment fund. Changes in fund
investments pursuant to Participant direction shall be made
effective as provided under procedures negotiated between the
Plan and the Trustee, which procedures may include daily
movement of General Investments Account funds between
investment funds, provided valuation of the investment funds
is also conducted daily.
(d) The Plan Administrator may establish reasonable rules
regarding:
(1) The maximum number of investment funds that may be
utilized by an individual Participant or by an
individual Account.
(2) The minimum, maximum and incremental percentages of
contributions that may be invested in a particular
investment fund.
(3) The minimum, maximum and incremental percentages of
the current balance in the General Investments
Account in any investment fund that may be
transferred to another fund.
These rules shall be in writing and shall be administered in a
uniform and non- discriminatory manner.
(e) A Participant may not direct investment into or from the Employer
Securities Account nor may a Participant direct investment from his/her
General Investments Account into the Employer Securities Account or the
liquidation or sale of any Employer Securities in the Employer
Securities Account.
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ARTICLE XIX
TOP-HEAVY PROVISIONS
19.01 Application: If this Plan is or becomes Top-Heavy for any Plan
Year, the provisions of this Article shall supersede any conflicting provisions
contained in any other Article of this Plan.
19.02 Special Definitions: For purposes of this Article and related
Plan provisions, the following terms shall have the following meanings unless a
different meaning is plainly required by the context:
(a) "Determination Date" shall mean, for any plan year subsequent
to the first plan year, the last day of the preceding plan
year for such plan; for the first plan year of a plan, the
last day of that plan year.
(b) "Determination Period" shall mean the plan year containing the
Determination Date and the four (4) preceding plan years for
such plan.
(c) "Five Percent Owner" shall mean:
(1) If the Employer is a corporation, any person who owns
(or is considered as owning within the meaning of
Code ss.318) more than five percent (5%) of the
outstanding stock of the corporation or stock
possessing more than five percent (5%) of the total
combined voting power of all stock of the
corporation.
(2) If the Employer is not a corporation, any person who
owns more than five percent (5%) of the capital or
profits interest in the Employer.
(d) "Key Employee" shall mean any Employee or former Employee (and
any Beneficiary of such Employee) who at any time during the
Determination Period was:
(1) An officer of the Employer during a Plan Year in
which he received Top- Heavy Compensation greater
than fifty percent (50%) of the amount in effect
under Code ss.415(b)(1)(A) for such Plan Year. For
purposes of this Paragraph, no more than fifty (50)
Employees (or, if lesser, the greater of three (3) or
ten percent (10%) of the number of Employees) shall
be treated as officers; or
(2) One of the ten (10) Employees owning (or considered
as owning within the meaning of Code ss.318) both
more than one-half percent (1/2%) interest and the
largest interests in the Employer during a Plan Year
in which he received Top-Heavy Compensation greater
than the amount in effect under Code ss.415(c)(1)(A)
for such Plan Year; or
(3) A Five Percent Owner of the Employer; or
(4) A One Percent Owner of the Employer during a plan
year in which he received Top-Heavy Compensation
greater than one hundred fifty thousand One Hundred
Fifty Thousand Dollars ($150,000).
79
The determination of who is a Key Employee shall be made in
accordance with Code ss.416(i)(1) and the Regulations
thereunder. For purposes of determining who is a One Percent
Owner, Five Percent Owner, or ten largest owner, the rules of
Code ss.414(b), (c) and (m) shall not apply. Beneficiaries of
Employees shall be treated as a Key Employee or Non-Key
Employee based on the Key Employee status of such Employee;
inherited benefits shall retain the Key Employee or Non-Key
Employee status of the Employee.
The term "Non-Key Employee" shall mean any Employee or former
Employee (and any Beneficiary of such Employee) who is not a
Key Employee. Non-Key Employees include Employees who are
former Key Employees.
(e) "One Percent Owner" shall mean:
(1) If the Employer is a corporation, any person who owns
(or is considered as owning within the meaning of
Code ss.318) more than one percent (1%) of the
outstanding stock of the corporation or stock
possessing more than one percent (1%) of the total
combined voting power of all stock of the
corporation; or
(2) If the Employer is not a corporation, any person who
owns more than one percent (1%) of the capital or
profits interest in the Employer.
(f) "Permissive Aggregation Group" shall mean the Required
Aggregation Group of plans plus any other plan or plans of the
Employer that, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements
of Code ss.ss.401(a)(4) and 410.
(g) "Present Value" shall mean the actuarial present value of an
amount or series of amounts determined based on the Top-Heavy
determination provisions of a defined benefit plan that is
part of a Required Aggregation Group or Permissive Aggregation
Group with this Plan.
(h) "Required Aggregation Group" shall mean:
(1) Each qualified plan of the Employer including any
plan terminated within the last five years ending on
the determination date, in which at least one Key
Employee participates in the plan year containing the
determination date, or any of the four preceding plan
years; and
(2) Any other qualified plan of the Employer that enables
a plan described in Item (1) to meet the requirements
of Code ss.ss.401(a)(4) or 410.
(i) "Super Top-Heavy": This Plan is Super Top-Heavy if the Plan
would be Top- Heavy if "ninety percent (90%)" were substituted
for "sixty percent (60%)" each place it appears in subsection
(j) below.
(j) "Top-Heavy": This Plan is Top-Heavy if any of the following
conditions apply:
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(1) If the Top-Heavy Ratio for this Plan exceeds sixty
percent (60%) and this Plan is not part of any
Required Aggregation Group or Permissive Aggregation
Group of plans.
(2) If this Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive
Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group of plans exceeds sixty
percent (60%).
(3) If this Plan is a part of a Permissive Aggregation
Group of plans and the Top- Heavy Ratio for the
Permissive Aggregation Group exceeds sixty percent
(60%).
(k) "Top Heavy Average Monthly Compensation" shall mean
one-twelfth (1/12th) of the average of a Participant's
Top-Heavy Compensation during the five (5) consecutive Plan
Years (or the total number of such years of the Participant's
employment, if less than five (5)) that produces the highest
average, but taking into account only Top-Heavy Compensation
for years that this Plan was Top-Heavy and any years preceding
a year that this Plan was Top-Heavy.
(l) "Top-Heavy Compensation" shall have the same meaning as the
term "Compensation" defined in Section 7.01(b), but effective
for Plan Years commencing after December 31, 1997, shall
include contributions made by the Employer to a plan of
deferred compensation otherwise excluded in Section 7.01(b).
Top Heavy Compensation includes all Compensation paid for the
Limitation Year without regard to when the Participant
commenced participation in the Plan.
(m) "Top-Heavy Ratio" shall mean and be determined as follows:
(1) If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer has never maintained
any defined benefit plan that has covered or could
cover a Participant in this Plan, the Top-Heavy Ratio
is a fraction, the numerator of which is the sum of
the account balances of all Key Employees as of the
Determination Date and the denominator of which is
the sum of all account balances of all Participants
as of the Determination Date. Both the numerator and
denominator of the Top-Heavy Ratio shall be adjusted
to reflect any part of any account balance
distributed in the five (5) year period ending on the
Determination Date and any contribution that is due
but unpaid as of the Determination Date. In the case
of a defined contribution plan that is not subject to
Code ss.412, the adjustment for contributions due but
unpaid is generally the amount of any contributions
actually made after the Top-Heavy Valuation Date but
on or before the Determination Date; however, for the
first plan year of such a plan, the adjustment shall
also reflect the amount of any contributions made
after the Top-Heavy Valuation Date that are allocated
as of a date in that first plan year. In the case of
a defined contribution plan that is subject to Code
ss.412, the account balances shall include
contributions that would be allocated as of a date
not later than the Determination Date, even though
those amounts are not yet required to be contributed;
furthermore, the adjustment for contributions due but
unpaid shall reflect the amount of any contribution
actually made (or due to be made) after the Top-
Heavy Valuation Date but before the expiration date
of the extended payment period in Code ss.412(c)(10).
81
(2) If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer maintains or has
maintained one or more defined benefit plans that
have covered or could cover a Participant in this
Plan, the Top-Heavy Ratio is a fraction, the
numerator of which is the sum of account balances
under the defined contribution plans for all Key
Employees and the Present Value of accrued benefits
under the defined benefit plans for all Key
Employees, and the denominator of which is the sum of
the account balances under the defined contribution
plans for all Participants and the Present Value of
accrued benefits under the defined benefit plans for
all Participants. Both the numerator and denominator
of the Top-Heavy Ratio are adjusted for any part of
any account balance or accrued benefit distributed in
the five (5) year period ending on the Determination
Date and any contribution to a defined contribution
plan due but unpaid as of the Determination Date. In
the case of a defined contribution plan that is not
subject to Code ss.412, the adjustment for
contributions due but unpaid is generally the amount
of any contributions actually made after the
Top-Heavy Valuation Date but on or before the
Determination Date; however, for the first plan year
of such a plan, the adjustment shall also reflect the
amount of any contributions made after the Top-Heavy
Valuation Date that are allocated as of a date in
that first plan year. In the case of a defined
contribution plan that is subject to Code ss.412, the
account balances shall include contributions that
would be allocated as of a date not later than the
Determination Date, even though those amounts are not
yet required to be contributed; furthermore, the
adjustment for contributions due but unpaid shall
reflect the amount of any contribution actually made
(or due to be made) after the Top-Heavy Valuation
Date but before the expiration date of the extended
payment period in Code ss.412(c)(10).
(3) For purposes of (1) and (2) above, the value of
account balances and the Present Value of accrued
benefits shall be determined as of the most recent
Top-Heavy Valuation Date that falls within or ends
with the twelve month period ending on the
Determination Date. The account balances and accrued
benefits of a Participant who is not a Key Employee
but who was a Key Employee in a prior year shall be
disregarded. For Plan Years beginning after December
31, 1984, the account balances and accrued benefits
of any Participant who has not performed any service
for the Employer at any time during the five (5) year
period ending on the Determination Date shall be
disregarded. In the case of a defined benefit plan,
the Present Value of Accrued Benefits shall not
reflect any proportional subsidies and shall reflect
any non-proportional subsidies provided by the plan.
The calculations of the Top-Heavy Ratio, and the
extent to which distributions, rollovers and
transfers are taken into account shall be made in
accordance with Code ss.416 and the Regulations
thereunder. In the case of unrelated rollovers and
transfers: (1) the plan making the distribution or
transfer shall count the distribution as part of an
accrued benefit distributed; and (2) the plan
accepting the rollover or transfer shall not consider
the rollover or transfer as part of the accrued
benefit if such rollover or transfer was accepted
after December 31, 1983, and shall consider the
rollover or transfer as part of the
82
accrued benefit if such rollover or transfer was
accepted prior to January 1, 1984. In the case of
related rollovers and transfers, the plan making the
distribution or transfer shall not count the
distribution or transfer as part of an accrued
benefit distributed, and the plan accepting the
rollover or transfer shall count the rollover or
transfer as part of the accrued benefit. Deductible
employee contributions shall not be taken into
account for purposes of computing the Top-Heavy
Ratio. When aggregating plans, the value of account
balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within
the same calendar year.
For purposes of the above, a Participant's Accrued
Benefit in a defined benefit plan shall be determined
under a uniform accrual method that applies for all
defined benefit plans maintained by the Employer or,
if there is no such method, under the method
described in Code ss.411(b)(1)(C) that provides the
slowest rate of accrual.
(n) "Top-Heavy Valuation Date" shall mean the date as of which the
Present Value of accrued benefits under a defined benefit plan
or account balances under a defined contribution plan, that is
part of a Permissive Aggregation Group or Required Aggregation
Group, is determined for calculating the Top-Heavy Ratio. For
a defined benefit plan, such date shall be the same as the
actuarial valuation date used for computing plan costs under
Code ss.412, regardless of whether an actuarial valuation is
performed that year. For a defined contribution plan, such
date shall be the last day of the plan year.
19.03 Top-Heavy or Super Top-Heavy Minimum Required Allocation: For any
Plan Year in which the Plan is Top-Heavy or Super Top-Heavy:
(a) Except as otherwise provided below, the Employer contributions
and forfeitures allocated on behalf of any Participant who is
a Non-Key Employee shall not be less than the lesser of:
(1) three percent (3%) of such Participant's Top-Heavy
Compensation if the Plan is Top-Heavy and five
percent (5%) of such Participant's Top-Heavy
Compensation if the Plan is Super Top-Heavy; or
(2) In the case where the Employer has no defined benefit
plan that designates this Plan to satisfy Code
ss.ss.401 and 416(c), the largest percentage of
Employer contributions and forfeitures, as a
percentage of the first Two Hundred Thousand Dollars
($200,000), (or such larger amount as may be
prescribed by the Secretary of the Treasury or
his/her delegate) of the Key Employee's Top-Heavy
Compensation, allocated on behalf of any Key Employee
for that year. In calculating this percentage all
amounts contributed by the Employer to the Key
Employee's Elective Deferral Account pursuant to a
Salary Reduction Agreement shall be treated as
Employer contributions. For Plan Years beginning
after December 31, 1993, the Plan shall substitute
the amount "One Hundred Fifty Thousand Dollars
($150,000)" for the amount "Two Hundred Thousand
Dollars ($200,000)" wherever it appears in this
Section. The $150,000 amount shall be adjusted each
Plan Year as provided in Code ss.401(a)(17)(B).
83
(b) The minimum allocation shall be determined without regard to
any Social Security contribution by the Employer. This minimum
allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser
allocation for the Plan Year because of:
(1) The Participant's failure to complete one thousand
(1000) Hours of Service (or any equivalent provided
in the Plan);
(2) The Participant's failure to make mandatory employee
contributions to the Plan;
(3) Compensation less than a stated amount;
(4) The Employer having no Net Profits; or
(5) In the case of a plan qualified under Code ss.401(k),
the Participant's failure to make elective
contributions to such plan.
If a Participant is required to receive a minimum allocation
under this subsection and such amount exceeds the amount that
the Participant would receive under other Plan provisions, the
Employer shall make an additional contribution for such
Participant. Such additional contribution shall be allocated
to the Employer Contribution Account of such Participant in
the same manner as regular Employer contributions, pursuant to
Article VII.
(c) The provisions in subsections (a) and (b) above shall not
apply to any Participant who was not employed by the Employer
on the last day of the Plan Year.
(d) The provisions in subsections (a) and (b) above shall not
apply to a Participant if such Participant is covered under a
defined contribution plan designated by the Employer to
provide the Top-Heavy minimum benefits, and such Participant
receives an allocation of Employer contributions and
forfeitures under that plan during the subject Plan Year that
is at least as great as the amount otherwise required under
(a) and (b) above. If the amount of Employer contributions and
forfeitures allocated to such a Participant under that plan
during the subject Plan Year is less than the amount required
under (a) and (b) above, the amount otherwise required under
(a) and (b) above shall be reduced by the amount so allocated
under that plan.
19.04 Non-forfeitability of Minimum Top-Heavy Allocation: The minimum
allocation of Employer contributions or forfeitures required under Sections
19.03 or 19.04 (to the extent required to be non-forfeitable under Code
ss.416(b)) shall not be forfeited in the case of a suspension of benefits under
Code ss.411(a)(3)(B) or a withdrawal of mandatory employee contributions under
Code ss.411(a)(3)(D).
19.05 Top Heavy Compensation Limitation: For any Plan Year in which the
Plan is Top- Heavy, only the first One Hundred Fifty Thousand Dollars
($150,000), (or such larger amount as may be prescribed by the Secretary of the
Treasury or his/her delegate), of a Participant's Top-Heavy Compensation shall
be taken into account for purposes of this Plan. The one hundred fifty thousand
dollar amount shall be adjusted each Plan Year as provided in Code
ss.401(a)(17)(B).
84
Effective for Plan Years commencing on and after January 1, 2002,
Annual Compensation of each Participant taken into account under this Article
XIX shall not exceed Two Hundred Thousand Dollars ($200,000), as adjusted for
cost-of-living increases in accordance with Code ss.401(a)(17)(B). The
cost-of-living adjustment in effect for a calendar year applies to Annual
Compensation for the Plan Year that begins with or within such calendar year.
19.06 Minimum Vesting Provision: For any Plan Year in which this Plan
is Top-Heavy, the vesting schedule under Section 11.01 shall automatically apply
to each Participant in the Plan. This vesting schedule applies to all accrued
benefits within the meaning of Code ss.411(a)(7), except those attributable to
employee contributions, including benefits accrued before the effective date of
Code ss.416 and benefits accrued before the Plan became Top-Heavy. Further, no
reduction in vested benefits may occur in the event the Plan's status as
Top-Heavy changes for any Plan Year and any change in the Plan's vesting
schedule due to a change in Top-Heavy status shall be subject to the provision
of Section 11.10. However, this Section does not apply to the Accrued Benefit of
any Employee who does not have an Hour of Service after the Plan has initially
become Top Heavy; such Employee's Vested Interest attributable to Employer
contributions and forfeitures shall be determined without regard to this
Section.
19.07 Adjustments to Limitations: For any Plan Year in which the Plan
is Top-Heavy, the following adjustments shall be made to the denominators of the
Defined Benefit Fraction and Defined Contribution Fraction as defined in Section
7.01.
(a) Super Top-Heavy: In any Plan Year in which the Plan is Super
Top-Heavy the denominators shall be computed by substituting
"one hundred percent (100%)" for "one hundred twenty-five
percent (125%)" each place it appears in such definitions.
(b) Not Super Top-Heavy: In any Plan Year in which the Plan is
Top-Heavy but not Super Top-Heavy the denominators shall be
computed by substituting "one hundred percent (100%)" for "one
hundred twenty-five percent (125%)" each place it appears in
such definitions.
19.08 Participant Elective Deferrals: Elective Deferrals shall not be
taken into account in determining under Section 19.03(b) the amount of Employer
contributions to be allocated to a Participant who is a Non-key Employee.
19.09 EGTRRA Modification of Top-Heavy Rules: Notwithstanding any other
provision of this Article XIX, this section shall apply for purposes of
determining whether the Plan is a top- heavy plan under Code ss.416(g) for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies the
minimum benefits requirements of Code ss.416(c) for such years.
(a) Determination of top-heavy status/key employee. Key employee
means any Employee or Former Employee (including any deceased
Employee) who at any time during the Plan Year that includes
the determination date was an officer of the Employer having
Annual Compensation greater than $130,000 (as adjusted under
Code ss.416(i)(1)for Plan Years beginning after December 31,
2002), a 5-percent owner of the Employer, or a 1-percent owner
of the Employer having annual compensation of more than
$150,000. For this purpose, Annual Compensation means
Compensation within the meaning of Section 7.01(b). The
determination of who is a key employee will be made in
accordance with Code 416(i)(1) and the applicable regulations
and other guidance of general applicability issued thereunder.
85
(b) Determination of present values and amounts. This subsection
shall apply for purposes of determining the present values of
Accrued Benefits and the amounts of Account balances of
Employees as of the determination date.
(1) Distributions during year ending on the determination
date. The present values of Accrued Benefits and the
amounts of Account balances of an employee as of the
determination date shall be increased by the
distributions made with respect to the Employee under
the Plan and any plan aggregated with the Plan under
Code ss.416(g)(2) during the 1-year period ending on
the determination date. The preceding sentence shall
also apply to distributions under a terminated plan
which, had it not been terminated, would have been
aggregated with the Plan under Code
ss.416(g)(2)(A)(i). In the case of a distribution
made for a reason other than separation from service,
death, or disability, this provision shall be applied
by substituting "5-year period" for "1-year period."
(2) Employees not performing services during year ending
on the determination date. The Accrued Benefits and
Accounts of any individual who has not performed
services for the Employer during the 1-year period
ending on the determination date shall not be taken
into account.
(c) Minimum benefits.
(1) Matching contributions. Employer matching
contributions shall be taken into account for
purposes of satisfying the minimum contribution
requirements of Code ss.416(c)(2) and the Plan. The
preceding sentence shall apply with respect to
matching contributions under the Plan or, if the Plan
provides that the minimum contribution requirement
shall be met in another plan, such other plan.
Employer matching contributions that are used to
satisfy the minimum contribution requirements shall
be treated as matching contributions for purposes of
the actual contribution percentage test and other
requirements of Code ss.401(m).
(2) Contributions under other plans. The minimum benefit
requirement of this Section 19.10 shall be met
through contributions to this Plan regardless of
whether the Employer maintains any other plan
(including another plan that may consist solely of a
cash or deferred arrangement that meets the
requirements of Code ss.401(k)(12) and matching
contributions with respect to which the requirements
of Code ss.401(m)(11) are met).
86
ARTICLE XX
PROVISIONS AFFECTING BENEFITS
20.01 Availability of Loans: Upon acceptance of an application by a
Participant who is an active Employee, the Plan Administrator shall direct the
Trustee to make a loan to the Participant from his/her Plan Accounts (including
any Rollover Accounts but excluding his/her Employer Securities Account),
subject to the provisions of this Article. In considering a Participant's
application for a loan, the Plan Administrator shall base its decision whether
to grant a loan on a uniform and non-discriminatory policy, without regard to
the race, color, religion, sex, age or national origin of the applicant.
20.02 Loan Administration: The Plan Sponsor shall prepare and adopt a
written Participant Loan Administration Policy Statement, whose provisions shall
be made part of this Plan. The Policy Statement shall set forth:
(a) the identity of the person or persons authorized to administer
the loan program;
(b) the procedure for applying for a loan;
(c) the basis on which loans will be approved or denied;
(d) limitations, if any, on the types and amounts of loans
offered;
(e) the procedure for determining a reasonable rate of interest;
(f) the types of collateral that may secure a loan; and
(g) the events constituting default and the steps to be taken to
preserve plan assets in the event of a default.
20.03 Amount of Loan: The amount of any loan to a Participant when
added to the outstanding balance of any previous loans made to him pursuant to
this Article or under any other qualified plan maintained by the Employer, shall
not exceed the least of:
(a) Fifty percent (50%) of the Vested Interest in his/her Plan
Accounts (including, for calculation purposes, any Rollover
Accounts and Employer Securities Account); or
(b) $50,000, reduced by the excess (if any) of:
(1) the highest outstanding balance of loans from the
plan during the 1-year period ending on the day
before the date on which such loan was made, over
(2) the outstanding balance of loans from the plan on the
date on which such loan was made, or
(c) The total amount of the Vested Interest in his/her Plan
Accounts, exclusive of the Vested Interest in his/her Employer
Securities Account.
20.04 Collateral Requirements: Any loan to a Participant shall be
secured solely by the balance in his/her Plan Account (including any Rollover
Account, but excluding his/her Employer
87
Securities Account). In the event of default on the loan, however, foreclosure
and attachment of such security shall not occur until a distributable event
occurs under the Plan.
20.05 Loan Terms: Any loan made to a Participant by the Trustee shall
be evidenced by a promissory note of the Participant drawn in favor of the
Trust. Such note shall bear a reasonable rate of interest and shall be amortized
in level installments payable at least quarterly within a specified period of
time not to exceed five (5) years, unless such loan is used to acquire a
dwelling unit which, within a reasonable period of time (determined at the time
the loan is made), will be used as the principal residence of the Participant or
Beneficiary, in which case the specified period of time shall not exceed ten
(10) years.
20.06 Accounting for Loans: Any loan to a Participant pursuant to this
Article shall be treated as a directed investment of his/her Participant
Accounts (excluding his/her Rollover Account and his/her Employer Securities
Account). For purposes of allocating income in the General Investments Account
of the Trust Fund pursuant to Section 6.03, the balance in his/her General
Investments Account shall be treated as equal to the actual balance in the
Accounts minus the outstanding balance of any loans. Furthermore, for purposes
of Section 6.03, repayments of principal and interest on such loan shall be
treated as deposits to the adjusted balance (determined pursuant to the
preceding sentence) of his/her General Investments Account.
20.07 Effect of Termination of Employment or Plan: If a Participant
terminates employment with the Employer for any reason, the outstanding balance
of any loans made to him shall become fully payable no later than ninety (90)
days following his/her termination of employment or, if earlier, on his/her
Distribution Date. In the event of a termination of the Plan, any outstanding
loans shall be due and fully payable within ninety (90) days of the effective
date of such termination, or the date the Participant or Beneficiary is notified
of such termination. If the Participant or Beneficiary has not fully repaid any
loan as of the date full payment is due, any unpaid balance shall be deducted
from his/her Vested Accrued Benefit prior to determining the amount of any
immediate or deferred benefit payable to the Participant or Beneficiary, his/her
spouse or his/her Beneficiary and applied toward repayment of the loan.
20.08 Spousal Consent: No loan shall be made to a Participant unless
the Participant consents to the loan and acknowledges the possible reduction in
Plan benefits that would occur in the event of default on the loan. No spousal
consent shall be required for any loan as long as no portion of the
Participant's Accrued Benefit may be distributed from the Plan in the form of an
annuity. If any portion of the Participant's Accrued Benefit may be distributed
in the form of an annuity, then no loan shall be made to that Participant unless
the Participant and his/her spouse (if any) consent to such loan and acknowledge
the possible reduction in Plan benefits that would occur in the event of default
on the loan. Such consent and acknowledgment shall be provided in writing no
earlier than ninety (90) days prior to the making of the loan and witnessed by
the Plan Administrator (or representative thereof) or a notary public. In the
event of the renegotiation, extension, renewal or other revision of the loan, a
new spousal consent shall be required.
20.09 Anti-Alienation: Except as specifically provided in Sections
20.04 and 20.10, no benefit that shall be payable out of the Trust Fund to any
person (including a Participant, Inactive Participant or Beneficiary) shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void. No benefit
shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements, or torts of any person, nor shall it be subject to
attachment or legal process for or against person, and the same shall not be
recognized by the Trustee, except to such extent as may be required by law.
88
20.10 Qualified Domestic Relations Orders: Section 20.09 shall apply to
the creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant, Former Participant or Beneficiary pursuant to a
Domestic Relations Order, unless such Domestic Relations Order is determined to
be a Qualified Domestic Relations Order ("QDRO"). In the event the Plan, the
Trustee, or the Plan Administrator receives a Domestic Relations Order, the Plan
Administrator shall promptly notify the Participant, Former Participant or
Beneficiary whose benefit is the subject of such order and provide him with a
copy of the Plan's written procedures for administering QDROs. Unless and until
the order is set aside, the following provisions shall apply:
(a) The Plan Administrator shall establish reasonable procedures
to determine whether an order received by it or the Trustee is
a QDRO and to administer distributions pursuant to said order.
The procedures shall set forth all rules to be applied by the
Plan for notice to affected parties, suspension of Account
activity, including distributions, investment direction and
participant loans, and payment of benefits based upon the QDRO
or the failure of the Domestic Relations Order to be a QDRO.
(b) The Plan Administrator shall within a reasonable time
determine whether the order is a QDRO and shall notify the
Participant, Former Participant or Beneficiary whose benefit
is the subject of the order, of its determination. The Plan
Administrator may designate a representative to carry out its
duties under this Section 20.10.
(c) Nothing in this Section 20.10 shall be deemed to allow payment
under a QDRO to an Alternate Payee of any benefit prior to the
first day of the month following the date the Participant or
Former Participant whose benefits are subject to the QDRO
terminates employment or attains Age fifty (50), unless (i)
earlier distribution is specifically provided under the terms
of the QDRO and (ii) if the value of the Alternate Payee's
benefit exceeds $5,000, the Alternate Payee consents to any
distribution occurring prior to the Participant's attainment
of earliest retirement age.
20.11 QDRO Definitions: For purposes of Section 20.10 the following
definitions and rules shall apply:
(a) "Alternate Payee" shall mean any spouse, former spouse, child
or other dependent of a Participant or Former Participant who
is recognized by a QDRO as having a right to receive all, or a
portion of, the benefits payable under this Plan with respect
to the Participant or Former Participant.
(b) "Domestic Relations Order" shall mean any judgment, decree, or
order (including approval of a property settlement agreement)
which:
(1) relates to the provision of child support, alimony
payments, or marital property rights to a spouse,
child, or other dependent of a Participant or Former
Participant and
(2) is made pursuant to a state domestic relations law
(including a community property law).
(c) "Qualified Domestic Relations Order" shall mean any Domestic
Relations Order that satisfies the criteria set forth in the
QDRO procedures established by the Plan Administrator.
89
ARTICLE XXI
MULTIPLE EMPLOYER PROVISIONS
21.01 Adoption by Other FX Employers: With the consent of the Plan
Sponsor and by a properly executed document evidencing the intent and will of
the adopting FX Employer, any other FX Employer may adopt this Plan and all of
the provisions hereof and participate herein and be known as a Participating FX
Employer.
21.02 Requirements of Participating FX Employers:
(a) Each Participating FX Employer shall be required to use the
Trustee determined by the Plan Sponsor or Plan Administrator.
(b) The Trustee may, but shall not be required to, commingle, hold
and invest as one Trust Fund all contributions made by
Participating FX Employers, as well as all increments thereof.
The assets of the Plan shall, on an ongoing basis, be
available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the
Participating FX Employer who contributed such assets.
(c) The transfer of any Participant from or to an FX Employer
participating in this Plan, whether he is an Employee of the
Plan Sponsor or a Participating FX Employer, shall not affect
the Participant's rights under the Plan, and the Participant's
Accounts, as well as all accumulated service with the
transferor or predecessor, shall continue to his/her credit.
(d) Any expenses of the Trust and Plan that are to be paid by the
Employer or borne by the Trust Fund, including funding of
benefits, shall be paid by each Participating FX Employer in
the same proportion that the total amount of the Accounts
standing to the credit of all Participants employed by such FX
Employer bears to the total of the Accounts standing to the
credit of all Participants.
21.03 Designation of Agent: Each Participating FX Employer shall be
deemed to be a part of this Plan. With respect to all of its relations with the
Trustee and Plan Administrator for the purpose of this Plan, each Participating
FX Employer shall be deemed to have designated irrevocably the Plan Sponsor as
its agent. Unless the context of the Plan clearly indicates the contrary, the
word "Employer" shall be deemed to include each Participating FX Employer as
related to its adoption of the Plan.
21.04 Employee Transfers: It is anticipated that an Employee may be
transferred between Participating FX Employers, and in the event of any
transfer, the Employee involved shall carry with him all of his/her accumulated
service and eligibility. No transfer shall effect a termination of employment
hereunder, and the Participating FX Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating FX Employer from whom the
Employee was transferred.
21.05 Amendment: The Plan Sponsor may amend this Plan at any time
without regard to whether there are Participating FX Employers hereunder. No
written action of a Participating FX Employer shall be required to validate an
amendment.
21.06 Discontinuance of Participation: A Participating FX Employer
shall be permitted to discontinue or revoke its participation in the Plan. At
the time of any discontinuance or
90
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. If so directed by the Plan
Administrator, the Trustee shall transfer, deliver and assign Contracts and
other Fund assets allocable to the Participants of such Participating FX
Employer to the new Trustee as shall have been designated by the Participating
FX Employer, in the event that it has established a separate pension plan for
its Employees. No such transfer shall be made if the result is the elimination
or reduction of any Code ss.411(d)(6) protected benefits. If no successor is
designated, the Trustee shall retain the assets for the Employees of the
Participating FX Employer pursuant to the provisions of the Plan. In no event
shall any part of the corpus or income of the Trust as it relates to the
Participating FX Employer be used for or diverted for purposes other than for
the exclusive benefit of the Employees of the Participating FX Employer.
21.07 Administrator's Authority: The Plan Administrator shall have
authority to make any and all necessary rules or regulations, binding upon all
Participating FX Employers and all Participants, to effectuate the purposes of
this Article.
21.08 Participating Employer Contributions: All contributions made by a
Participating FX Employer, as provided for in this Plan, shall be determined
separately for each Participating FX Employer, and shall be allocated only among
Participants eligible to share who are Employees of the Participating FX
Employer making the contribution. The Administrator shall keep separate books
and records concerning the affairs of each Participating FX Employer hereunder
and as to the accounts and credits of the Employees of each Participating FX
Employer. The Trustee may, but need not, register participation agreements so as
to evidence that a particular Participating FX Employer is an interested
Employer hereunder. In the event of an Employee transfer from one Participating
FX Employer to another, the Employers shall immediately notify the
Administrator.
91
ARTICLE XXII
REPURCHASE OF DISTRIBUTED EMPLOYER SECURITIES
22.01 Put option: The Employer may, in its discretion, issue a "put
option" to a Participant in the event the Participant receives a distribution of
Employer Securities from the Trust that are not readily tradeable on an
established market. The put option will permit the Participant to sell the
Employer Securities to the Employer, at any time during two option periods, at a
price determined by the Employer under a fair valuation formula. The first put
option period runs for a period of at least 60 days commencing on the date of
distribution of Employer Securities to the Participant. The second put option
period runs for a period of at least 60 days commencing after the new
determination of the fair market value of Employer Securities by the Plan
Administrator and notice to the Participant of the new fair market value. If a
Participant (Beneficiary) exercises his/her put option, the Employer will
purchase the Employer Securities at fair market value upon the terms provided
under Section 22.04. The Employer may grant the Trust an option to assume the
Employer's rights and obligations at the time a Participant exercises an option
under this Section 22.01. No provision of this Section 22.01 (or of the Plan)
shall be interpreted to require the Plan or impose any obligation on the Plan to
acquire securities from a particular securities holder at an indefinite time
determined upon the happening of an event, such as the death of the holder.
22.02 Restriction on Employer Securities: Except upon the prior written
consent of the Employer, no Participant (or Beneficiary) may sell, assign, give,
pledge, encumber, transfer or otherwise dispose of any Employer Securities now
owned or subsequently acquired by him without complying with the terms of this
Article XXII. If a Participant (or Beneficiary) pledges or encumbers any
Employer Securities without the required prior written consent, any security
holder's rights with respect to such Employer Securities are subordinate and
subject to the rights of the Employer. All certificates for Employer Securities
distributed pursuant to this Plan shall bear the following legend:
The shares represented by this certificate are transferable
only upon compliance with the terms of the FX Energy, Inc.
401(k) Stock Bonus Plan, as amended effective January 1, 2004,
which grants to FX Energy, Inc., a right of first refusal. A
copy of the Plan is on file in the office of the Company.
22.03 Lifetime Transfer/Right of First Refusal: If any Participant (or
Beneficiary) who receives Employer Securities under this Plan desires to dispose
of any of his/her Employer Securities for any reason during his/her lifetime
(whether by sale, assignment, gift or any other method of transfer), he first
must offer the Employer Securities for sale to the Employer. The Plan
Administrator may require a Participant (or Beneficiary) entitled to a
distribution of Employer Securities to execute an appropriate stock transfer
agreement (evidencing the right of first refusal) prior to receiving a
certificate for Employer Securities.
In the case of an offer by a third party, the offer to the Employer is
subject to all the terms and conditions set forth in Section 22.04, based on the
price equal to the fair market value per share and payable in accordance with
the terms of Section 22.04, unless the selling price and terms offered to the
Participant by the third party are more favorable to the Participant than the
selling price and terms of Section 22.04, in which event, the selling price and
terms of the offer of the third party apply. The Employer must give written
notice to the offering Participant of its acceptance of the Participant's offer
within fourteen (14) days after the Participant has given written notice to the
Employer or the Employer's rights under this Section 22.03 will lapse. The
Employer may grant the Trust the option to assume the Employer's rights and
obligations with respect to all or any part of the Employer Securities offered
to the Employer under this Section 22.03. The Trust is not under any
92
obligation at any time to purchase Employer Securities from any holder of
Employer Securities upon the happening of any event.
22.04 Payment of Purchase Price: If the Employer (or the Trustee), at
the direction of the Plan Administrator exercises an option to purchase a
Participant's Employer Securities pursuant to an offer given under Section
22.03, the purchaser(s) must make payment in lump sum or, if the distribution to
the Participant (or to his/her Beneficiary) constitutes a Total Distribution, in
substantially equal installments over a period not exceeding five years, subject
to the Participant's election for a longer payment period than five years. A
"Total Distribution" to a Participant (or to a Beneficiary) is the distribution,
within one taxable year of the recipient, of the entire balance to the
Participant's credit under the Plan. In the case of a distribution that is not a
Total Distribution or that is a Total Distribution with respect to which the
purchaser(s) will make payment in lump sum, the purchaser(s) must pay the
Participant (or Beneficiary) the fair market value of the Employer Securities
repurchased no later than 30 days after the date the Participant (or
Beneficiary) exercises the put option. In the case of a Total Distribution with
respect to which the purchaser(s) will make installment payments, the
purchaser(s) must make the first installment payment no later than 30 days after
the Participant (or Beneficiary) exercises the put option. For installment
amounts not paid within 30 days of the exercise of the put option, the
purchaser(s) must evidence the balance of the purchase price by executing a
promissory note, delivered to the selling Participant at the Closing. The note
delivered at Closing must bear a reasonable rate of interest, determined as of
the Closing Date, and the purchaser(s) must provide adequate security. The note
must provide for equal annual installments with interest payable with each
installment, the first installment being due and payable one year after the
Closing Date. The note must further provide for acceleration in the event of 30
days' default of the payment on interest or principal and must grant to the
maker of the note the right to prepay the note in whole or in part at any time
or times without penalty; provided however, the purchaser(s) may not have the
right to make any prepayment during the calendar year or fiscal year of the
Participant (Beneficiary) in which the Closing Date occurs.
22.05 Notice: A person has given Notice permitted or required under
this Article XXII 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 him in the records of the Advisory Committee.
Any person affected by this Article XXII has the obligation of notifying the
Plan Administrator of any change of address.
22.06 Terms and Definitions: For purposes of this Article XXII:
(a) "Fair market value" means the value of the Employer Securities
(i) determined as of the date of the exercise of an option if
the exercise is by a disqualified person, or (ii) in all other
cases, determined as of the most recent Accounting Date. The
Plan Administrator must determine fair market value of
Employer Securities for all purposes of the Plan by engaging
the services of an independent appraiser.
(b) "Notice" means any offer, acceptance of an offer, payment or
any other communication.
(c) "Beneficiary" includes the legal representative of a deceased
Participant.
(d) "Closing" means the place, date and time ("Closing Date") to
which the selling Participant (or his/her Beneficiary) and
purchaser may agree for purposes of a sale and purchase under
this Article XI, provided Closing must take place not later
than 30 days after the exercise of an offer under Section
22.01.
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ARTICLE XXIII
MISCELLANEOUS
23.01 Participant's Rights: This Plan shall not be deemed to constitute
a contract between the Employer and any Participant or to be a consideration or
an inducement for the employment of any Participant or Employee. Nothing
contained in this Plan shall be deemed to give any Participant or Employee the
right to be retained in the service of the Employer or to interfere with the
right of the Employer to discharge any Participant or Employee at any time
regardless of the effect that such discharge shall have upon him as a
Participant of this Plan.
23.02 Actions Consistent with Terms of Plan: All actions taken by the
Employer, Plan Administrator or Trustee with respect to Trust assets shall be in
accordance with the terms of the Plan and Trust.
23.03 Performance of Duties: All parties to this Plan and Trust, or
those claiming any interest hereunder, agree to perform any and all acts and
execute any and all documents and papers that are necessary or desirable for
carrying out this Plan and Trust or any of its provisions.
23.04 Validity of Plan: This Plan shall be construed in a way that is
consistent with ERISA and regulations thereunder, the Internal Revenue Code and
regulations thereunder, and, to the extent state law has not been preempted by
federal law, the laws of the State in which the Plan Sponsor has its principal
office. In case any provision of this Plan shall be held illegal or invalid for
any reason, such determination shall not affect the remaining provisions of the
Plan; but the Plan shall be construed and enforced as if such provision had
never been included therein.
23.05 Legal Action: In the event any claim, suit, or proceeding is
brought regarding the Trust and/or Plan established hereunder to which the
Trustee or the Plan Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee or Plan Administrator, they shall
be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.
23.06 Gender and Number: Wherever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where
they would so apply.
23.07 Uniformity: All provisions of this Plan shall be interpreted and
applied in a uniform, nondiscriminatory manner.
23.08 Headings: The headings and subheadings of this Agreement have
been inserted for convenience of reference and are to be ignored in any
construction of the provisions hereof.
23.09 Receipt and Release for Payments: Any payment to any Participant,
his/her legal representative, Beneficiary, or to any guardian or committee
appointed for such Participant or Beneficiary in accordance with the provisions
of this Agreement, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Trustee and the Employer, either of whom may
require such Participant, legal representative, Beneficiary, guardian or
committee, as a condition precedent to such payment, to execute a receipt and
release thereof in such form as shall be determined by the Trustee or Employer.
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23.10 Payments to Minors, Incompetents: Effective for Plan Years
commencing on or after January 1, 1995, in the event the Plan Administrator must
direct a payment from the Plan to or for the benefit of any minor or incompetent
Participant or Beneficiary, the Plan Administrator, in its sole and absolute
discretion may, but need not, order the Trustee to make distribution to any of
the following: a legal or natural guardian of the minor or other relative or
adult with whom the minor temporarily or permanently resides, a court-appointed
conservator of any incompetent, a relative or adult with whom the incompetent
temporarily or permanently resides, a residential care facility, rest home,
sanitarium or similar entity with which the incompetent temporarily or
permanently resides, a person or entity that has applied for and been designated
by the United States Government as the recipient or custodian for Social
Security benefits for the minor or incompetent. The Plan Administrator may also
make payment as directed by the attorney-in-fact of an incompetent Participant
when such direction is pursuant to an unrevoked and valid durable power of
attorney. Any guardian, conservator, relative, attorney-in-fact, other person or
entity shall have full authority and discretion to expend the distribution for
the use and benefit of the minor or incompetent. The receipt of the distribution
by the guardian, conservator, relative, attorney-in-fact, other person or entity
shall be a complete discharge to the Plan, Plan Administrator and Trustee,
without any responsibility on the part of the Trustee or the Plan Administrator
to see to the application thereof. A Participant shall be deemed incompetent if
he or she is incapable of properly using, expending, investing, or otherwise
disposing of the distribution, and a court order or the written opinion of a
qualified physician, psychiatrist or psychologist setting forth facts consistent
with the standards outlined in this Section is presented to the Plan
Administrator.
23.11 Missing Persons: Notwithstanding any provision in this Plan and
Trust to the contrary, if the Plan Administrator is unable to locate any Former
Participant who is entitled to benefits under this Plan within three (3) years
of the date he becomes entitled to a distribution from the Trust Fund, any
amounts being held for his/her behalf shall be forfeited and used to reduce the
Employer's contributions to the Plan and Trust. The Plan Administrator shall
proceed with due diligence in attempting to locate any Former Participant. In
the Plan Administrator's sole discretion, due diligence may include inquiry of
any Beneficiary or Alternate Payee of the Former Participant whose names and
addresses are known to the Plan Administrator or use by the Plan Administrator
of a commercial locator service. Provided, however, no forfeiture shall occur
until the Plan Administrator has mailed the Former Participant a notice of the
benefits and the provisions of this section to his/her last known address, via
U.S. Mail postage prepaid, return receipt requested. And, provided further, if
the Former Participant is located subsequent to such forfeiture, the forfeited
amount shall be reinstated and the Former Participant shall receive a
distribution of his/her Vested Interest in accordance with the provisions of the
Plan.
23.12 Transfer of Interest: Notwithstanding any other provision
contained in this Plan, the Trustee at the direction of the Plan Administrator
shall transfer the lump sum amount otherwise payable to a Participant or
Inactive Participant to another trust forming part of a pension, profit sharing,
or stock bonus plan maintained by such Participant's new employer and
represented by said employer in writing as meeting the requirements of Code
ss.401(a) provided that the trust to which such transfers are made permits the
transfer to be made.
23.13 Prohibition Against Diversion of Funds: It shall be impossible by
operation of the Plan or of the Trust, by termination of either, by power of
revocation or amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or income of any
trust fund maintained pursuant to the Plan or any funds contributed thereto to
be used for, or diverted to, purposes other than the exclusive benefit of
Participants, Inactive Participants or their Beneficiaries, except as provided
in Sections 17.04 and 21.19.
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23.14 Period of the Trust: If it shall be determined that the
applicable State law requires a limitation on the period during which this Trust
shall continue, then such Trust shall not continue for a period longer than
twenty-one (21) years following the death of the last of those Participants,
including future Participants, who are living at the Effective Date hereof. At
least one hundred eighty (180) days prior to the end of the twenty-first (21st)
year as described in the first sentence of this Section, the Plan Sponsor, the
Plan Administrator and the Trustee shall provide for the establishment of a
successor Trust and transfer of Plan assets to the Trustee of such successor
Trust. If applicable State law places no such limitation, then this Section
shall not be operative.
23.15 Applicability of Plan: The provisions of this Plan shall apply
only to persons who are or who become Participants in this Plan on or after the
Effective Date or with respect to Plan provisions with alternate effective
dates, such alternate dates. Except as specifically provided in this Plan, the
provisions of the Prior Plan will continue to apply to persons who are Inactive
Participants or who are not employed by an FX Employer on the Effective Date or
as applicable, alternate effective dates, unless and until such time as such
persons may again become Participants in this Plan.
23.16 Misstatement of Age: If a Participant or Beneficiary misstates or
misrepresents his/her age, date of birth or any other material information to
the Employer, Plan Administrator or Trustee, the amount, terms and conditions of
any benefits payable from the Plan that are attributable to periods prior to the
discovery of such misstatement or misrepresentation shall be limited to the
lesser (or more restrictive) of: the amount, terms and conditions determined
based on the misstated information; or the amount, terms and conditions
determined based on the correct information. The Plan Administrator shall have
sole and absolute authority for applying the preceding sentence.
23.17 Return of Contributions to the Employer: Notwithstanding any
provision of this Plan to the contrary, if any contribution (or portion thereof)
by the Employer to the Trust is made as a result of a mistake of fact, or if any
contribution (or part thereof) by the Employer to the Trust Fund that is
conditioned upon the deductibility of the contribution by the Employer under the
Code is disallowed, whether by agreement within the Internal Revenue Service or
by final decision of a court of competent jurisdiction, the Employer may demand
repayment of the mistaken or disallowed amount. The Trustee shall return the
mistaken or disallowed contribution within one (1) year following the time the
mistaken contribution was made or the disallowed contribution was disallowed.
Investment earnings attributable to the mistaken or disallowed amount shall not
be returned, but any investment losses attributable thereto shall reduce the
amount so returned.
23.18 Counterparts: This Plan and Trust may be executed in any number
of counterparts, each of which shall be deemed to be an original, and the
counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Plan Sponsor has caused this Plan to be
executed by its duly authorized representative this 23rd day of December, 2004.
PLAN SPONSOR:
FX Energy, Inc.
By: /s/ Scott J. Duncan
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Its: Vice President/Secretary
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