EXHIBIT 4.7
EMPLOYEE SAVINGS PLAN
AMENDED & RESTATED
GENERALLY EFFECTIVE JANUARY 1, 2003
Amendments No. 1-5
ASHLAND INC.
EMPLOYEE SAVINGS PLAN
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WHEREAS, Ashland Inc. established the Ashland Inc.
Employee Savings Plan (which was known as the Ashland Inc. Employee Thrift
Plan before October 1 1995) originally effective June 1, 1964 for the
benefit of employees eligible to participate therein;
WHEREAS, the aforesaid Plan was amended from time to time
and, as so amended, was completely amended and restated effective October
1, 1976 to comply with the provisions of the Employee Retirement Income
Security Act of 1974;
WHEREAS, the aforesaid amended and restated Plan was
further amended from time to time and was completely amended and restated
effective October 1, 1980, and again restated effective October 1, 1983,
and again restated effective October 1, 1985, and again restated effective
October 1, 1989 and again restated effective October 1, 1995; and again
restated effective January 1, 1997;
WHEREAS, Article 20 of the aforesaid amended and restated
Plan, reserves to Ashland Inc. the right to further amend the Plan; and
WHEREAS, Ashland Inc. desires to make further amendments
to the Plan and to incorporate such amendments into a completely restated
Plan;
NOW, THEREFORE, Ashland Inc. does hereby further amend
and restate the Ashland Inc. Employee Savings Plan, generally effective as
of January 1, 2003, except as otherwise indicated, and provided that
amendments which were made hereto from and after the Plan's last effective
date of restatement through the date on which this restatement was executed
shall be effective as of the dates that were specified under each such
amendment, whether or not such effective dates are specified hereinafter,
in accordance with the following terms and conditions:
ARTICLE 1
PURPOSE OF PLAN
1.1 Designation.
(a) General. The Plan is designated the "Ashland Inc.
Employee Savings Plan." The Plan is also designated as a
discretionary contribution plan under Section 401(a) of
the Code to which contributions may be made without
regard to the current or accumulated earnings and profits
of the respective Participating Companies for the taxable
years thereof ending with or within the Plan Year, and
whose assets may be invested, without limitation, in
qualifying employer securities as defined in Section
407(d)(5) of ERISA.
(b) ERISA 404(c). It is intended that the Plan be a plan
described in Section 404(c) of ERISA, to the extent that
the terms and operation of the Plan comply with those
provisions; therefore, fiduciaries of the Plan may be
relieved of any liability for any losses which are the
direct and necessary result of investment instructions
given by a Member or Beneficiary.
(c) Testing Method. The Plan is designated as an ADP test
safe-harbor plan, as described in Notice 98-52, as
modified in Notice 2000-3, and as allowed in Section
401(k)(12)(B) of the Code. As a result of such
designation, Members may only make salary reduction
elections, as described in Article 6, that are allocated
to the Members' Tax Deferred Accounts. Also as a result
of such designation, amounts attributable to
Participating Company contributions allocated to Members'
Accounts after December 31, 1998, and for distributions
after December 31, 1998, of amounts from or attributable
to what had been Members' Restricted Company Match
Accounts shall, in addition to any other applicable
restrictions on distributions, not be distributable to a
Member before the occurrence of an event described in
Section 401(k)(2)(B) of the Code, except that the same
may not be distributed on account of the hardship of a
Member. Finally, as a result of such designation, Members
that are eligible to make salary reduction contributions
under Article 6 shall receive the notice required by
Section 401(k)(12)(D) of the Code. Such notice will be
provided at or around the time of eligibility to
participate and annually thereafter. The annual notice
will be provided at least 30 days but not more than 90
days before the start of the next Plan Year.
(1) Top-Heavy. Effective January 1, 2002, so
long as the Plan consists solely of a Plan that
meets the applicable requirements of Code
sections 401(k)(12) and 401(m)(11), the
top-heavy requirements of Code section 416 and
the provisions of Article 24 shall not apply.
(d) ESOP. Effective January 1, 2003, the Restricted
Company Match Account shall no longer be designated as an
employee stock ownership plan, qualified under sections
401(a) and 4975(e)(7) of the Code. Therefore, each
Member's Restricted Company Match Account will become
part of the Member's Account and the amounts attributable
to the Restricted Company Match Account shall become part
of the investment in Fund A - Ashland Common Stock Fund.
.
1.2 Purpose. The purpose of the Plan is to provide retirement and
other benefits for the Members and their respective beneficiaries. To
provide such benefits, the Participating Companies propose to make such
contributions as directed and determined by the Sponsoring Company in
accordance with the provisions of the Plan. Except as otherwise provided by
the Plan and by law, the assets of the Plan shall be held for the exclusive
benefit of Members and their beneficiaries and defraying reasonable
expenses of administering the Plan, and it shall be impossible for any part
of the assets or income of the Plan to be used for, or diverted to,
purposes other than such exclusive purposes.
1.3 Plan Mergers.
(a) Ballenger and SuperAmerica. Effective as of December 31,
1995, with respect to accounts formerly held under the
Ballenger Paving Company, Inc. 401(k) Employee Savings
Plan (the "Ballenger Plan") and effective as of April 1,
1996, with respect to accounts formerly held under the
SuperAmercia Hourly Associates Savings Plan (the
"SuperAmerica Plan"), the Ballenger Plan and SuperAmerica
Plan shall, as of their respective effective dates, be
merged with and become a part of this Plan. The actual
transfer of accounts from each of these plans to this
Plan shall be made as part of the said plan mergers on
such date as shall be determined and agreed to by and
between the Sponsoring Company and the Trustee and the
trustee of the applicable plan being merged herein. After
each such account is transferred to the Plan, each such
account shall be held and administered pursuant to the
terms of this Plan; provided, however, notwithstanding
anything contained herein to the contrary, the Section
411(d)(6) protected benefits (as defined under Treas.
Reg. ss.1.411 (d) - 4) associated with each such account
shall be preserved under this Plan. The accounts which
are so transferred and merged into this Plan shall be
placed in and shall be a part of the applicable Member's
Account hereunder, and for purposes of determining
service hereunder, the Member's prior service under the
plan being merged herein shall count hereunder to
determine such Member's Period of Service, and, for
purposes of applying the withdrawal rules under this
Plan, this Plan shall refer to the applicable date of
allocation of employer contributions under such plan.
(b) Superfos Related Plans. Effective on or after August 31,
2000, the accounts formerly held under the Shears
Construction, LP 401(k) Retirement Savings Plan that are
designated by the Plan Administrator or its delegate and
effective on or after September 18, 2000, the accounts
formerly held under the Superfos and Affiliates 401(k)
Plan, the JB Coxwell Contracting, Inc. 401(k) Plan and
the Harper Brothers Construction, Inc. 401(k) Profit
Sharing Plan that are designated by the Plan
Administrator or its delegate, shall, as of their
respective effective dates, be merged with and become a
part of this Plan. The actual transfer of accounts from
each of these plans to this Plan shall be made as part of
the said plan mergers on such date as shall be determined
and agreed to by and between the Sponsoring Company and
the Trustee and the trustee of the applicable plan being
merged herein. After each such account is transferred to
the Plan, each such account shall be held and
administered pursuant to the terms of this Plan. The
investment options into which the transferred assets are
initially placed shall be similar to those in which they
were invested prior to the merger, as determined by the
Plan Administrator or its delegate. To accomplish the
said merger, the Plan Administrator shall implement such
procedures, as it deems appropriate or convenient. These
may include but not be limited to suspending account
transactions for a period of time following the merger.
The Section 411(d)(6) protected benefits as defined under
applicable Treasury regulations and other pronouncements
shall be preserved; provided, however, that changes may
be made to them after the merger allowed under law and
Treasury or Internal Revenue Service interpretations. The
accounts that are so transferred and merged into this
Plan shall be placed in and shall be a part of the
applicable Member's existing Account hereunder, if the
Member has one. For purposes of applying the withdrawal
rules under this Plan to the merged assets, this Plan
shall refer to the applicable date of allocation of
employer contributions under the plan from which the
assets were transferred. Nevertheless, if that is not
administratively convenient, then the transferred assets
shall be deemed contributed on the date of transfer
hereto for purposes of applying the withdrawal rules of
the Plan. Effective for distributions on or after
September 6, 2000, the assets of the accounts formerly
held under the Shears Construction, LP 401(k) Retirement
Savings Plan may only be distributed to Members in a form
allowed by Section 13.3(a). Any optional form of benefit
that would have otherwise applied to such assets before
the effective date of Treas. Reg. ss.1.411(d)-4, Q&A-2(e)
shall no longer apply. Notwithstanding anything in the
foregoing to the contrary, the change to the optional
forms of distribution available for the assets that were
transferred from the Shears Construction, LP 401(k)
Retirement Savings Plan and merged herewith shall not
apply to a Member whose benefit consists in whole or in
part of assets transferred from the said Shears Plan and
whose benefit is distributed before the earlier of (i)
the 90th day after the Member is furnished a summary of
material modifications that describes the deletion of the
otherwise preserved optional forms of distribution;
or;(ii) January 1, 2002.
(c) Conforming Distribution Options. Effective January 1,
2002, except to the extent already accomplished by
Section 13.3(b) as in effect on January 1, 2001, the
distribution options available for any amounts
transferred, merged, consolidated or otherwise
contributed to the Plan from a source outside of the Plan
shall only be those distribution options otherwise
available under the Plan to the extent allowed by Code
sections 411(d)(6)(D) and (E).
ARTICLE 2
DEFINITIONS
2.1 As used in the Plan:
(a) "Account" shall mean all of the separate accounts
maintained for each Member under the provisions of
Article 10 of the Plan (excepting, however, the accounts
which comprise such Members' Tax Deferred Account)
reflecting such Member's contributions to the Trust under
the provisions of Article 5 of the Plan and reflecting
Participating Company contributions to the Trust
allocated on behalf of such Member under the provisions
of Article 7 of the Plan, as adjusted in accordance with
the provisions of Section 10.3 of the Plan. Effective
January 1, 2003, each Member's Restricted Company Match
Account shall become part of the Member's Account.
(b) "Actual Contribution Percentage" shall mean, for the
Highly Compensated Eligible Employees and the Non-Highly
Compensated Eligible Employees for a Plan Year, the
average of the ratios, calculated separately for each
person in each such group, of the amount, if any, of -
(1) such person's Member contributions allocated to such
person's Account under Article 5; and
(2) such person's Participating Company contributions
allocated to such person's Account under Article 7, to
the extent such contributions are not treated as Member
contributions allocated to such person's Tax Deferred
Account under Article 6 pursuant to the terms of Section
2.1 (c) of the Plan for such Plan Year to the person's
Actual Deferral Percentage Compensation for such Plan
Year.
For purposes of computing the Actual Contribution
Percentage of any Highly Compensated Eligible Employee,
the amount of contributions, if any, allocated to such
individual's Account (to the extent such contributions
are considered in calculating the Actual Contribution
Percentage under this paragraph (b) of Section 2.1 of the
Plan) for such Plan Year shall be combined with any other
contributions by or on behalf of such individual intended
to be made under Section 401(m) of the Code to any other
plan (if any) which allows such contributions, maintained
by the Sponsoring Company or maintained by an Affiliated
Company, which are made by or on behalf of such
individual from and after the time any such plan was so
maintained, except to the extent that such other plan (if
any) cannot be aggregated with this Plan under Treas.
Reg. Section 1.410(b)-7(c), or any successor thereto.
(c) "Actual Deferral Percentage" shall mean, for the Highly
Compensated Eligible Employees and the Non-Highly
Compensated Eligible Employees for a Plan Year, the
average of the ratios, calculated separately for each
person in each such group, of the amount of -
(1) contributions, if any, allocated to such person's Tax
Deferred Account under Article 6; and
(2) such person's Participating Company contributions
allocated to such person's Account under Article 7, to
the extent the Sponsoring Company decides to treat such
contributions for purposes of this paragraph (c) as
Member contributions allocated to such person's Tax
Deferred Account under Article 6 for such Plan Year to
the person's Actual Deferral Percentage Compensation for
such Plan Year.
For purposes of computing the Actual Deferral Percentage
of any Highly Compensated Eligible Employee, the amount
of contributions, if any, allocated to such individual's
Tax Deferred Account and Restricted Company Match Account
(to the extent such contributions are considered in
calculating the Actual Deferral Percentage under this
paragraph (c) of Section 2.1 of the Plan) for such Plan
Year shall be combined with any other contributions of
such individual intended to be made under Section 401(k)
of the Code to any other plan (if any) which allows such
contributions maintained by the Sponsoring Company or
maintained by an Affiliated Company, which are made by
such individual from and after the time any such plan was
so maintained, except to the extent that such other plan
(if any) cannot be aggregated with this Plan under Treas.
Reg. Section 1.410(b)-7(c), or any successor thereto.
(d) "Actual Deferral Percentage Compensation" shall mean the
Compensation received during the Plan Year by an
Employee.
(e) "Affiliated Company" shall mean each of the following for
such a period of time as is applicable under Section 414
of the Code:
(1) a corporation which, together with a Participating
Company is a member of a controlled group of
corporations within the meaning of Section 414(b)
of the Code (as modified by Section 415(h) thereof
for the purposes of Article 5, and the applicable
regulations thereunder);
(2) a trade or business (whether or not incorporated)
with which a Participating Company is under common
control within the meaning of Section 414(c) of the
Code (as modified by Section 415(h) thereof for the
purposes of Article 5, and the applicable
regulations thereunder);
(3) an organization which, together with a
Participating Company, is a member of an affiliated
service group (as defined in Section 414(m) of the
Code); and
(4) and any other entity required to be aggregated with
a Participating Company pursuant to regulations
under Section 414(o) of the Code.
(f) "Beneficiary" shall mean the person or persons entitled
to receive the distributions, if any, payable under the
Plan pursuant to the applicable provisions of Articles 11
and 13 of the Plan, upon or after a Member's death, as
such Member's Beneficiary. Each Member may designate a
Beneficiary by filing a written designation thereof over
his signature with the Sponsoring Company in such form
and manner as the Sponsoring Company may prescribe from
time to time. A designation shall be effective upon its
receipt by the Sponsoring Company, retroactive to the
date such Member signed such designation, provided that
it is so filed during such Member's lifetime. The last
effective designation received by the Sponsoring Company
shall supersede all prior designations, provided that any
designation shall only be effective if the Beneficiary
survives the Member. A Member may designate one or more
contingent Beneficiaries to receive any distributions in
the event the primary Beneficiary (or Beneficiaries) does
not survive the Member and may change his Beneficiary
designation from time to time as provided above; provided
however, the spouse to whom the Member was married on his
date of death shall be such Member's Beneficiary, unless
the spouse waives the right to be the Beneficiary and
consents to the designation of another as follows:
(1) the spouse's consent and waiver is in writing and it
is witnessed by either a notary public or Plan
representative;
(2) the waiver and consent specify the alternate
Beneficiary including any class of Beneficiaries, which
may not be changed without spousal consent, except that
if a trust is named as the Beneficiary, the beneficiaries
under such trust may be changed without additional
spousal consent;
(3) the waiver and consent specify the form of benefit
payment (if applicable) which may not be changed without
spousal consent; and
(4) the spouse's consent acknowledges the effect of the
consent and waiver. Notwithstanding anything to the
contrary contained in (2) and (3) immediately above, a
spouse may execute a general consent and waiver which
permits the Member to change alternate Beneficiaries
and/or forms of benefit payment (if applicable) without
spousal consent if, in such general consent and waiver,
the spouse acknowledges his right to limit consent to a
specific beneficiary and/or specific form of benefit,
where applicable, and the spouse voluntarily elects to
relinquish either or both of such rights. Any consent and
waiver is only effective with respect to the spouse who
signed such consent and is not effective with respect to
any subsequent spouse. However, if it is established to
the satisfaction of the Sponsoring Company that a written
consent and waiver cannot be obtained because there is no
spouse or the spouse cannot be located or because of such
other circumstances as may be provided in Treasury
regulations, then a Member's designation will be deemed
effective without the need to comply with (1) through (4)
above of this paragraph (f).
If a Member fails to designate a Beneficiary, or
if no designated Beneficiary survives the Member or dies
simultaneously with the Member or under circumstances
making it impossible to determine whether such
Beneficiary survived such Member, the Member shall be
deemed to have designated one of the following as
Beneficiary (if living at the time of the Member's death)
in the following order of priority: (i) the surviving
spouse, and (ii) the Member's estate. If the Sponsoring
Company shall be in doubt as to the right of any person
as a Beneficiary, payment may be made to the Member's
estate and such payment shall be in full satisfaction of
any and all liability of the Plan (or any other person or
entity) to any person claiming under or through such
Member. Whenever the rights of a Member are stated or
limited in the Plan, his Beneficiaries shall be bound
thereby.
To the extent consistent with the provisions of
Section 401(a)(9) of the Code and the regulations
thereunder, the Member's Beneficiary as determined under
this Section 2.1(f) shall be his "designated beneficiary"
as defined under said Section and regulations.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. References to any Section of
the Code shall include any successor provision thereto.
(h) "Compensation" shall mean the salary and wages (or, if an
Employee is not paid a fixed salary or wages, such other
compensation as determined by the Sponsoring Company)
paid by a Participating Company to an Employee during the
Plan Year, including commissions, payroll continuation
for sickness, overtime pay, shift premium, and vacation
pay, if any, any amounts contributed to the Member's Tax
Deferred Account, and any amounts excluded from the
Member's income under Sections 401(k), 402(h), 403(b) or
125 of the Code; provided, however, Compensation shall
not include (i) incentive compensation bonuses, but,
effective October 1, 1999, Compensation shall include
variable pay and bonus amounts paid to Members who are
not eligible for the Sponsoring Company's incentive
compensation bonus program, (ii) amounts contributed by a
Participating Company or Affiliated Company under any
employee benefit plan (other than amounts contributed to
a Member's Tax Deferred Account under this Plan and any
amounts excluded from the Member's income under Sections
401(k), 402(h), 403(b) or 125 of the Code), (iii) amounts
paid to a Member under the Ashland Inc. ERISA Forfeiture
Plan or any successor plan thereto, (iv) amounts paid to
a Member as stock appreciation rights through the Ashland
Inc. Long Term Incentive Plan or the Amended Stock
Incentive Plan for Key Employees of Ashland Inc. and its
Subsidiaries or any successor or similar plans thereto,
(v) allowances paid by reason of foreign assignment,
which are not a part of such Member's base United States
salary as determined by the Sponsoring Company; and (vi)
remuneration determined to be disregarded under this
paragraph (h) by the Sponsoring Company under rules
uniformly applicable to all employees similarly situated;
(vii) severance pay paid on or after November 1, 1992;
(viii) amounts deferred under and amounts paid from any
nonqualified salary deferral plan; and (ix) effective
January 1, 2000, amounts paid for waiving benefits under
the Sponsoring Company's flexible benefits program.
Notwithstanding anything in the foregoing to the
contrary, the Compensation of each Member taken into
account under the Plan for any Plan Year shall not exceed
$150,000 as adjusted at the same time and manner as the
adjustments under Section 415(d) of the Code, and any
such adjustment for a calendar year shall apply to the
Plan Year which begins with or within such calendar year
and such adjustments shall only be made in increments of
$10,000, rounded down to the next lowest multiple of
$10,000, with the base period for determining this annual
adjustment being the calendar quarter beginning October
1, 1993. Effective for Plan Years beginning on and after
January 1, 2002, the Compensation of each Member taken
into account under the Plan for any Plan Year shall not
exceed $200,000. This amount shall be adjusted at the
same time and manner as the adjustments under Section
415(d) of the Code. Any such adjustment for a calendar
year shall apply to the Plan Year that begins with or
within such calendar year. These adjustments shall only
be made in increments of $5,000, rounded down to the next
lowest multiple of $5,000, with the base period for
determining this annual adjustment being the calendar
quarter beginning July 1, 2001.
(i) "Employee" shall, except as otherwise provided, mean any
person who is an employee of one or more Participating
Companies. The term Employee shall not include: (i) any
person included in a unit of employees covered by a
collective bargaining agreement between employee
representatives and one or more Participating Companies
unless such bargaining agreement specifically provides
otherwise; (ii) any leased employees as defined in
Section 414(n) of the Code; (iii) any person compensated
on an hourly rate or other rate basis if such employee is
not included in a designated eligible payroll
classification code so designated by the Sponsoring
Company; and (iv) any employee not included in a
designated eligible payroll classification code so
designated by the Sponsoring Company, which shall include
those employees acquired as part of the acquisition of
Superfos a/s and its US subsidiaries until the later of
the date such employees are transferred to a designated
eligible payroll classification code by the Sponsoring
Company or January 1, 2000. For purposes of this section
2.1(i), a United States citizen who is an employee (a) of
a foreign subsidiary (as defined in Section 3121(l)(8) of
the Code) of a domestic Participating Company which is
the subject of an agreement entered into by such domestic
Participating Company under Section 3121(l) of the Code
and as to whom contributions under a funded plan of
deferred compensation are not provided by any person
other than such domestic Participating Company with
respect to the remuneration paid to such United States
citizen by such foreign subsidiary, or (b) of a domestic
subsidiary (as defined in Section 407(a)(2)(A) of the
Code) of a domestic Participating Company and as to whom
contributions under a funded plan of deferred
compensation are not provided by any person other than
such domestic Participating Company with respect to the
remuneration paid to such United States citizen by such
domestic subsidiary, shall be deemed to be an employee of
such domestic Participating Company. For purposes of this
section 2.1(i), under rules of general application, a
former employee of a Participating Company who is
temporarily on leave of absence from employment with such
Participating Company in order to render services to an
Affiliated Company or other affiliate of a Participating
Company, may be deemed an Employee of such Participating
Company during such absence if such absence is determined
by the Sponsoring Company to be in the interest of a
Participating Company or an Affiliated Company; provided
that such status as a deemed employee will be equally
available to both Highly Compensated Employees and
Non-Highly Compensated Employees who satisfy the criteria
for such status; and provided further that such status
shall only be available under terms and conditions
satisfying Treas. Reg. ss.1.401(a)(4)-11(d) or any
successor to that regulation.
(j) "Employment Commencement Date" shall mean the date on
which an employee (whether or not such employee is an
Employee within the meaning of paragraph (i) of this
Section 2.1) first performs an Hour of Service for a
Participating Company or an Affiliated Company.
(k) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
References to any Section of ERISA shall include any
successor provision thereto.
(l) "Highly Compensated Eligible Employee" shall mean, with
respect to a Plan Year, any Employee from and after the
time he is eligible to participate in the Plan, pursuant
to the provisions of Article 3, and who is a Highly
Compensated Employee for such Plan Year.
(m) "Highly Compensated Employee" shall mean for a particular
Plan Year (1) an Employee who is a 5% owner (as defined
in Section 416(i)(1)(B) of the Code) at any time of a
Participating Company or an Affiliated Company during the
present Plan Year (the "determination year"); or (2) an
Employee who received compensation during the 12
consecutive month period prior to such Plan Year (the
"look-back year") from a Participating Company or an
Affiliated Company in excess of $80,000 (as adjusted at
the same time and in the same manner as the adjustments
under Section 415(d) of the Code, and any such adjustment
for a calendar year shall apply to the determination year
or look-back year (whichever is applicable) which begins
with or within such calendar year, except that the base
period is the calendar quarter ending September 30,
1996).
For these purposes, the compensation of an individual
refers to compensation as defined under Section 415(c)(3)
of the Code.
A former Employee shall be a Highly Compensated Employee
if he was (1) a Highly Compensated Employee at the time
he separated from service; or (2) a Highly Compensated
Employee at any time after attaining age 55. The
determination of the status under (1) or (2) in the
immediately preceding sentence shall be based on the
rules for determining whether an individual was a Highly
Compensated Employee as in effect in the particular
determination year, in accordance with Section
1.414(q)-1T,A-4 of the temporary Treasury regulations and
Notice 97-45.
When determining whether an Employee is a Highly
Compensated Employee in the Plan Year before the
generally effective date of this amendment and
restatement (January 1, 1997), the provisions of this
paragraph (m) shall be treated as being in effect in such
prior Plan Year.
(n) "Hour of Service" shall mean each hour for which an
employee is paid, or entitled to payment, by a
Participating Company or an Affiliated Company for the
performance of duties as an employee.
(o) "Investment Manager" shall mean any party that: (i) is
(A) registered as an investment advisor under the
Investment Advisors Act of 1940, or (B) a bank (as
defined in the Investment Advisors Act of 1940), or (C)
an insurance company qualified to manage, acquire and
dispose of Plan assets under the laws of more than one
state; (ii) acknowledges in writing that it is a
fiduciary with respect to the Plan; and (iii) is granted
the power to manage, acquire or dispose of any asset of
the Plan pursuant to Article 14 of the Plan.
(p) "Member" shall mean an eligible Employee who becomes a
Member of the Plan as provided in Article 4 of the Plan.
A Member ceases to be a Member when all funds in his
Account, Restricted Company Match Account and Tax
Deferred Account to which he is entitled under the Plan
have been distributed in accordance with the Plan.
(q) "Non-Highly Compensated Eligible Employee" shall mean,
with respect to a Plan Year, any Employee from and after
the time he is eligible to participate in the Plan,
pursuant to the provisions of Article 3, who is not a
Highly Compensated Eligible Employee for such Plan Year.
(r) "Non-Highly Compensated Employee" shall mean, with
respect to a Plan Year, any Employee, (or former
Employee, if applicable) who is not a Highly Compensated
Employee.
(s) "One-Year Period of Service" shall mean 12 months of a
Period of Service. For this purpose, nonsuccessive
Periods of Service shall be aggregated, and less than
whole year Periods of Service (whether or not
consecutive) shall be aggregated on the basis that 365
days of a Period of Service equal a whole One-Year Period
of Service.
(t) "One-Year Period of Severance" shall mean a
12-consecutive-month period beginning on an employee's
Severance from Service Date and ending on the first
anniversary of such date provided that the employee
during such 12-consecutive-month period does not perform
an Hour of Service for a Participating Company or
Affiliated Company.
(u) "Participating Company" shall mean (1) the Sponsoring
Company; (2) any division of the Sponsoring Company some
or all of whose employees are designated as eligible to
participate in this Plan; and (3) an affiliate of the
Sponsoring Company which adopts the Plan pursuant to
Article 18 of the Plan.
(v) "Period of Service" shall mean a period of employment
with a Participating Company or an Affiliated Company
commencing on an employee's Employment Commencement Date
or Reemployment Commencement Date, whichever is
applicable, and ending on such employee's Severance from
Service Date; provided, however, Period of Service shall
also include any Period of Severance immediately
following a Period of Service if the employee completes
an Hour of Service within 12 months of the date on which
the employee was first absent from service.
Notwithstanding the foregoing provisions of this
paragraph (v), Period of Service shall not include the
period between the first anniversary and the second
anniversary of the first date of absence from work (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.
In the case of any employee who has a One-Year Period of
Severance prior to becoming vested in any portion of his
Account, such employee's Periods of Service with a
Participating Company or an Affiliated Company before any
such One-Year Period of Severance shall not be taken into
account if such employee's latest Period of Severance
equals or exceeds the greater of (i) five years or (ii)
his prior aggregate Periods of Service completed before
the date on which such One-Year Period of Severance
began, and such prior aggregate Periods of Service shall
not include any Period of Service not required to be
taken into account by reason of any prior One-Year Period
of Severance. Any Period of Service, or part thereof,
with an Affiliated Company (other than a Participating
Company) during a period of time during which such
Affiliated Company was not an Affiliated Company shall be
disregarded except that the following shall not be
disregarded: (A) service as provided in Section 3.2 of
the Plan, (B) service with an Affiliated Company by an
Employee who was transferred from an Affiliated Company
to a Participating Company, and (C) service with an
Affiliated Company by an employee which is determined by
the Sponsoring Company under uniform, nondiscriminatory
rules not to be disregarded; provided that such service
will be equally available to both Highly Compensated
Employees and Non-Highly Compensated Employees who
satisfy the criteria for such service; and provided
further that such service shall only be available under
terms and conditions satisfying Treas. Reg.
ss.1.401(a)(4)-11(d) or any successor to that regulation.
(w) "Period of Severance" shall mean the period of time
commencing on an employee's Severance from Service Date
and ending on the date such employee again performs an
Hour of Service.
(x) "Plan" shall mean the Ashland Inc. Employee Savings Plan
(formerly known as the Ashland Inc. Employee Thrift
Plan).
(y) "Plan Year" shall mean the calendar year.
(z) "Reemployment Commencement Date" shall mean the first
date, following the Severance from Service Date, on which
an employee performs an Hour of Service.
(aa) "Restricted Company Match Account" shall no longer exist
after December 31, 2002.
(ab) "Severance from Service Date" shall mean the earliest to
occur of (1) the date on which an employee quits, retires
or is discharged from employment with a Participating
Company or an Affiliated Company, or dies; or (2) except
as otherwise provided in clause (3), the first
anniversary of the first date of a period during which an
employee remains absent from service (with or without
pay) with a Participating Company or an Affiliated
Company for any reason other than a quit, retirement,
discharge or death; or (3) the second anniversary (or
such shorter period as may be allowed by regulations) of
the first date of a period in which an employee remains
absent from service with a Participating Company or an
Affiliated Company by reason of the placement of a child
with the employee in connection with the adoption of such
child by such employee, or for purposes of caring for
such child for a period beginning immediately following
such birth or placement, if the employee furnishes to the
Sponsoring Company such information in such form and at
such time as it may from time to time require that such
absence was for one of the reasons specified in this
sentence and the number of days for which there was such
an absence. Notwithstanding the preceding sentence, (i)
if an employee is absent from service with a
Participating Company or an Affiliated Company solely by
reason of temporary leave of absence determined by the
Sponsoring Company under uniform, non-discriminatory
rules to be in the interest of a Participating Company or
an Affiliated Company, such employee shall be deemed not
to have quit or been absent from service with such
Participating Company or Affiliated Company so long as
such employee complies with the terms and conditions of
such temporary leave of absence; or (ii) if an employee
is absent from service with a Participating Company or an
Affiliated Company solely by reason of military service
under circumstances by which such employee is afforded
reemployment rights under any applicable Federal or State
statute or regulation, such employee shall be deemed not
to have quit or have been absent from service with such
Participating Company or Affiliated Company if such
employee returns to service with such Participating
Company or Affiliated Company before the expiration of
such reemployment rights; provided, however, in the event
that such employee fails to comply with the terms and
conditions of a temporary leave of absence or fails to
return to service with such Participating Company or
Affiliated Company before the expiration of such
reemployment rights, such employee shall be deemed to
have quit on the first day on which such employee was
first absent from service with such Participating Company
or Affiliated Company by reason of such temporary leave
of absence or such military service.
(ac) "Sponsoring Company" shall mean Ashland Inc. including
any successor by merger, purchase or otherwise.
(ad) "Tax Deferred Account" shall mean all the separate
accounts maintained under the provisions of Article 10 to
which are allocated, on behalf of a Member, contributions
to the Trust under the provisions of Section 6.1 of the
Plan as adjusted in accordance with the provisions of
Section 10.3 of the Plan.
(ae) "Termination of Employment" shall mean termination of
employment with any Participating Company or any
Affiliated Company, whether voluntarily or involuntarily,
for any reason other than by reason of a Member's
transfer to a Participating Company or an Affiliated
Company. With respect to amounts held in a Member's Tax
Deferred Account and Restricted Company match Account and
for distributions before December 31, 2001, a Member
shall be deemed to have incurred a Termination of
Employment upon the date of the sale by a Participating
Company or an Affiliated Company to a purchaser not
related to either such Company under Sections 414 (b),
(c), (m), or (o) of the Code of
(i) substantially all of the assets
(within the meaning of Section
409(d)(2) of the Code) used by
such Company in a trade or
business of such Company even
though such Member continues
employment with the purchaser
of such assets, or
(ii) the stock (within the meaning
of Section 409(d)(3) of the
Code) of a Participating
Company or an Affiliated
Company even though such Member
continues employment with such
Company;
provided, that such purchaser does not maintain the Plan
after the date of such sale.
Notwithstanding anything in the Plan to the contrary,
effective January 1, 2002 Termination of Employment shall
include both a separation from service and a severance
from employment for purposes of determining if a
distribution under the Plan is allowed.
(af) "Trust" shall mean the legal entity resulting from the
trust agreement between the Sponsoring Company, on its
own behalf and as agent for all other Participating
Companies, and the Trustee which receives the
Participating Companies' and Members' contributions, and
holds, invests, and disburses funds to or for the benefit
of Members and their Beneficiaries.
(ag) "Trust Fund" shall mean the total contributions made by
the Participating Companies and Members to the Trust
pursuant to the Plan, increased by profits, gains, income
and recoveries received, and decreased by losses,
depreciation, benefits paid and expenses incurred in the
administration of the Trust. Trust Fund includes all
assets acquired by investment and reinvestment which are
held in the Trust by the Trustee.
(ah) "Trustee" shall mean the party or parties, individual or
corporate, named in the trust agreement and any duly
appointed additional or successor Trustee or Trustees
acting thereunder.
(ai) "Valuation Date" shall mean each business day the New
York Stock Exchange is open.
2.2 Wherever appropriate, words used in the Plan in the singular
shall mean the plural, the plural shall mean the singular, and the
masculine shall mean the feminine.
ARTICLE 3
REQUIREMENTS FOR ELIGIBILITY
3.1 Eligibility Requirements.
(a)(1) General. Each Member of the Plan on January 1,
2003, shall continue to be a Member subject to the
provisions of the Plan. Subject to the provisions of
Article 4 of the Plan, an Employee who is a Member under
the provisions of sub-paragraph (2) of this paragraph (a)
shall be eligible for the contribution described in
Section 7.1(c) as soon as is administratively feasible
after completing a One-Year Period of Service, provided
that such Member is an Employee of a Participating
Company on such date.
(2) Less Than One Year. Subject to the provisions of
Article 4 of the Plan, each Employee of a Participating
Company in a payroll classification designated as
eligible for participation hereunder by the Sponsoring
Company who has not received credit for a One-Year Period
of Service shall be eligible to make the contributions
allowed under Article 6 of the Plan as soon as is
administratively feasible after the later of:
(i) January 1, 2001; or
(ii) the Employee's date of employment.
Employees who are eligible to make contributions under
this sub-paragraph (2) of this paragraph (a) shall be
considered to be Members of the Plan for all purposes
except they shall not be eligible to receive the
contributions described in Section 7.1(c) of the Plan
until completing a One-Year Period of Service.
(3) Reemployment. Notwithstanding anything to the
contrary herein contained, any Member who incurs a
Termination of Employment and who is subsequently
reemployed as an Employee of a Participating Company in a
payroll classification designated as eligible for
participation hereunder by the Sponsoring Company shall
be eligible to again become a Member, subject to the
provisions of Article 4, as of the first pay period for
such Employee beginning coincident with or next following
the day after the reemployment of such Employee.
(b) Special Rule for Deferred Compensation Eligible
Group. Effective January 1, 2002, Employees who are or
who become eligible to make non-qualified salary
deferrals under the Ashland Inc. Deferred Compensation
Plan shall be eligible to make contributions to this
Plan. The terms of the Plan shall be applied to these
Employees in the same manner as they are applied to other
eligible Employees, except as otherwise noted in this
paragraph (b) of Section 3.1. The Employees referred to
in this paragraph (b) shall only be allowed to make one
irrevocable election to make contributions to the Plan
for each Plan Year, subject only to suspension because of
a hardship distribution as provided under Sections 5.3
and 6.3. Such election shall be made at such time and
pursuant to such procedures as prescribed by the
Sponsoring Company from time to time. Such elections
shall, however, be collected prior to the Plan Year to
which they relate. In the event the Employee becomes
eligible to make non-qualified salary deferrals under the
Ashland Inc. Deferred Compensation Plan effective on a
day other than January 1, then the Employee's irrevocable
election under this Plan shall be collected before the
period of the Plan Year to which an election under the
Ashland Inc. Deferred Compensation Plan would relate.
Under these circumstances, the Employee's existing
election under this Plan would end and the Employee would
have to make a new irrevocable election hereunder to be
effective for the remainder of the Plan Year. Such
elections shall become irrevocable on the first day of
the Plan Year (or portion thereof) to which they relate
and shall be effective with respect to pay received after
such day (or as soon as is administratively feasible).
Notwithstanding anything in the foregoing to the
contrary, an Employee whose election is otherwise
irrevocable shall have an opportunity to increase such
election effective with respect to Compensation received
after June 30, 2003. To be eligible to increase the
election, the Employee must meet all of the following:
(1) The Employee elected to contribute 4% or less of
Compensation to the Plan for the 2003 Plan Year;
and
(2) The Employee does not elect to increase the
contribution above 5% of Compensation.
An election to increase an Employee's contribution to the
Plan described above will only be effective with respect
to Compensation received after June 30, 2003 and will be
irrevocable for the remainder of the Plan Year. Any such
election shall be made in the manner prescribed by the
Sponsoring Company, but it can be made no later than June
30, 2003.
3.2 Service With A Predecessor Employer. If the Plan had
previously been maintained by a predecessor of a Participating Company,
whether a corporation, partnership, sole proprietorship or other business
entity, any period of service with such predecessor shall be treated as a
period of service with a Participating Company. If the Plan had not been
previously maintained by a predecessor of a Participating Company, service
with such predecessor shall not be taken into account, except to the extent
required pursuant to regulations prescribed by the United States Secretary
of the Treasury or his delegate. Notwithstanding the foregoing, service by
a sole proprietor or partner shall not be counted as a period of service
with a Participating Company.
ARTICLE 4
PARTICIPATION IN THE PLAN
4.1 Participation. Any Employee eligible to participate in the
Plan in accordance with Article 3 of the Plan shall become a Member with
respect to the first paycheck for such Employee issued for the first pay
period beginning after the Sponsoring Company records such Employee's
enrollment as a Member. Such enrollments shall be accomplished by means of
such administrative procedures as may be prescribed by the Sponsoring
Company, from time to time. By enrolling in the Plan, each Member shall (i)
authorize the automatic deduction of such Member's contributions and any
contributions allocable to his Tax Deferred Account from such Member's
Compensation or authorize such other method of making contributions as may
be required by the Sponsoring Company, (ii) designate such Member's
investment election under the provisions of Section 8.2 of the Plan, (iii)
designate one or more Beneficiaries pursuant to the provisions of Section
2.1(f) of the Plan, and (iv) provide such other information, and agree to
such conditions, understandings, declarations or agreements as the
Sponsoring Company shall from time to time require.
ARTICLE 5
MEMBER CONTRIBUTIONS
5.1 Rate. Subject to Section 5.4, Section 6.1 and the limitations
of Article 7, each Member may elect to contribute to the Plan by means of
payroll deduction (or other method as may be required by the Sponsoring
Company) an amount not less than 1% nor more than 50% (in whole number
percentages) of Compensation, for each payment of Compensation received
after enrolling for participation under Section 4.1 of the Plan. The 50%
limit may be exceeded for a Member to the extent required to facilitate the
Member's catch-up contribution under Section 6.1(b). Contributions pursuant
to this Article 5 that are less than or equal to 4% (5% effective July 1,
2003) of a Member's Compensation, and with respect to which a Participating
Company contribution is made under the provisions of Article 7 of the Plan,
are designated as Basic Contributions. Contributions that are in excess of
4% (5% effective July 1, 2003) of a Member's Compensation, and with respect
to which no such Participating Company contribution is made, are designated
as Supplemental Contributions. All Member contributions shall be paid into
the Plan not less frequently than monthly and shall be allocated to such
Member's Account or Tax Deferred Account as provided in the Plan.
5.2 Change of Rate. Subject to Section 3.1(b), a Member may elect
to change his contribution rate (including changes to or from 0%) within
the limits set forth in Section 5.1 by following such administrative
procedures as may be prescribed by the Sponsoring Company, from time to
time. Any such change to his contribution rate shall be effective with
respect to the first paycheck for such Member issued for the first pay
period beginning after the Sponsoring Company records such change.
5.3 Automatic Discontinuance of Contributions. If a Member ceases
to be an Employee, or otherwise ceases to be eligible to participate
pursuant to the terms of Article 3 of the Plan, his Basic Contributions and
Supplemental Contributions, if any, shall be automatically discontinued.
If a Member elects to make a hardship withdrawal from his Account and Tax
Deferred Account, if any, pursuant to the provisions of Section 12.3 of the
Plan, such Member's Basic Contributions and Supplemental Contributions, if
any, shall be automatically discontinued effective for payments of
Compensation first occurring for the pay period of such Member after the
Sponsoring Company records such withdrawal. The automatic discontinuance of
contributions resulting from a hardship withdrawal shall last for a period
of 12 calendar months, starting with the first calendar month coincident
with or next following the automatic discontinuance of contributions. After
the expiration of this 12 calendar month period, the Member must
affirmatively elect to resume contributions pursuant to the provisions of
Section 5.2 of the Plan. The 12-month suspension period described in the
foregoing shall be changed to 6 months for hardship distributions made
after December 31, 2001.
In no event shall the Actual Contribution Percentage for the Highly
Compensated Eligible Employees exceed the greater of (i) the Actual
Contribution Percentage for the Non-Highly Compensated Eligible Employees
multiplied by 1.25; or (ii) the lesser of (A) the Actual Contribution
Percentage for the Non-Highly Compensated Eligible Employees plus 2.00, or
(B) the Actual Contribution Percentage for the Non-Highly Compensated
Eligible Employees multiplied by 2 (hereinafter called the "actual
contribution percentage test"). The Sponsoring Company may, without notice
to any Member, discontinue all or part of the contributions of any one or
more Highly Compensated Eligible Employees when such discontinuance is
deemed necessary or advisable to establish and/or preserve the Plan as
qualified under the provisions of Section 401(a) of the Code and related
provisions or to satisfy the actual contribution percentage test in the
immediately preceding sentence. To the extent permitted by regulations
issued by the Secretary of the Treasury of the United States or his
delegate, such discontinuance by the Sponsoring Company may be retroactive.
Notwithstanding anything to the contrary contained herein, the following
actions may be taken by the Sponsoring Company, without notice to any
Member, in the event that the actual contribution percentage test is not
satisfied for the Plan Year:
(a) If the actual deferral percentage test of Section 6.3 is
satisfied for such Plan Year, then the Sponsoring Company may
recharacterize such amount of the salary reduction contributions
allocated to the Tax Deferred Accounts of the Non-Highly
Compensated Eligible Employees for such Plan Year as Participating
Company contributions for such Plan Year to the extent that such
recharacterization would allow the Plan to satisfy the actual
contribution percentage test for such Plan Year; provided that the
actual deferral percentage test was still met for such Plan Year,
both with and without the amounts so recharacterized. Any
contributions that are so recharacterized shall not otherwise be
considered to be Participating Company contributions and shall
remain allocated to the Tax Deferred Accounts of the affected
Non-Highly Compensated Eligible Employees.
(b) If the actual contribution percentage test for the Plan Year
cannot be satisfied under (a) of this Section 5.3, then the amount
by which the Participating Company contributions and Member
contributions for such Plan Year which are allocated to the
Accounts of Highly Compensated Eligible Employees exceeds the
maximum amount of such contributions that could have been made for
such Plan Year to satisfy the actual contribution percentage test
(hereinafter "excess aggregate contributions") shall be
distributed, with their allocable share of income or loss, to the
Highly Compensated Eligible Employees by the end of the following
Plan Year, as determined for each such Employee in the following
described manner. The total amount of the excess aggregate
contributions for the year is first determined. To determine the
total excess aggregate contributions, the actual contribution
ratios (which is for each Highly Compensated Eligible Employee the
ratio of Member and Participating Company contributions allocated
to his Account for the Plan Year to his Actual Deferral Percentage
Compensation for the Plan Year) of the Highly Compensated Eligible
Employees for such Plan Year are reduced, beginning with the
Highly Compensated Eligible Employee(s) having the highest actual
contribution ratio, in succession, until each such actual
contribution ratio is reduced to no more than the greater of the
following --
(1) the particular actual contribution ratio
resulting in the Actual Contribution Percentage
for the Highly Compensated Eligible Employees
that satisfies the actual contribution
percentage test, calculated under the formula of
[ (M x T) - S ] / N, where M is the maximum
allowable Actual Contribution Percentage for the
Highly Compensated Eligible Employees , based
upon the Actual Contribution Percentage of the
Non-Highly Compensated Eligible Employees for
such Plan Year, T is the total number of Highly
Compensated Eligible Employees for the Plan
Year, S is the sum of the actual contribution
ratios of the Highly Compensated Eligible
Employees who do not have the highest actual
contribution ratio for the Plan Year, and N is
the number of Highly Compensated Eligible
Employees who do have the highest actual
contribution ratio for the Plan Year; or
(2) the actual contribution ratio of the Highly
Compensated Eligible Employee(s) with the next
highest actual contribution ratio;
until no such Highly Compensated Eligible Employee's actual contribution
ratio for the Plan Year exceeds the highest permitted such ratio for such
Plan Year. The amount of the total excess aggregate contributions to be
distributed to a particular Highly Compensated Eligible Employee for the
Plan Year is determined by starting with the Highly Compensated Eligible
Employee with the greatest amount of Member and Participating Company
contributions allocated to his Account for such Plan Year and reducing the
amount of such contributions to the next highest amount of such
contributions for a Highly Compensated Eligible Employee and continuing in
descending order until all the excess aggregate contributions have been so
allocated and distributed. For this purpose, the highest amount of such
contributions is determined after the distribution of any excess aggregate
contributions. However, the excess aggregate contributions so allocated to
a Highly Compensated Eligible Employee cannot exceed the sum of the
Participating Company contributions and Member contributions actually
allocated to such Highly Compensated Eligible Employee's Account for the
Plan Year. Excess aggregate contributions distributed to a Highly
Compensated Eligible Employee for a Plan Year shall first come from any
Supplemental Contributions made by such Employee under Section 5.1 for such
Plan Year and, if there are still excess aggregate contributions to be
distributed after exhausting such Employee's Supplemental Contributions,
then the remaining portion of the distribution shall come from such
Employee's Basic Contributions under Section 5.1 and Participating Company
contributions allocated to his Account for the Plan Year in the proportion
that such Basic Contributions bears to such Participating Company
contributions for such Employee for such Plan Year. The amount of allocable
income or loss that is added to a Highly Compensated Eligible Employee's
distribution of excess aggregate contributions is equal to the income or
loss allocable to the Member contributions under this Article 5 and the
Participating Company contributions for the Plan Year multiplied by a
fraction whose numerator is the excess aggregate contributions allocated to
the Highly Compensated Eligible Employee for the Plan Year and whose
denominator is the sum of such Employee's Account on the first day of such
Plan Year and the Member contributions under this Article 5 and
Participating Company contributions allocated to his Account for such Plan
Year. Notwithstanding anything to the contrary, if, during the Plan Year
for which an excess aggregate contribution is made, a Highly Compensated
Eligible Employee who would otherwise be allocated a share of such excess
aggregate contribution with its allocable share of income or loss receives
a distribution of all of his Account, such distribution shall be deemed to
have been a distribution of such Employee's share of the excess aggregate
contribution and its allocable share of income or loss.
5.4 Rollover Contributions. Subject to the provisions of this
Section 5.4, effective after December 31, 1997, a Member may contribute to
the Plan, for allocation to the Member's Account, an amount consisting of a
Direct Rollover, a Regular Rollover or a Conduit IRA Rollover. Amounts
contributed by a Member pursuant to this Section 5.4, and any earnings and
any income allocable thereto, shall be fully vested and nonforfeitable at
all times.
(a) Eligibility. Effective for rollover contributions to the Plan
after December 31, 2002, Employees who meet the eligibility
requirements of Section 3.1 of the Plan and former Employees who
still have an Account or Tax Deferred Account in the Plan are
eligible to make contributions under this Section 5.4.
(b) Direct Rollover. A Direct Rollover is a contribution that
satisfies all of the following:
(1) The contribution is made in cash (including a check) or by
such other means as may be prescribed by the Sponsoring
Company, in consultation with the Trustee.
(2) The contribution consists of all or a portion of the taxable
part of the Member's benefit under another qualified trust or
annuity (as defined in Code section 402(c)(8)). For this
purpose, such a contribution may include an eligible rollover
distribution to a Member that is a former Employee from
another qualified trust sponsored by the Sponsoring Company,
a Participating Company or an Affiliated Company. Effective
for rollover contributions made after December 31, 2001, such
contributions that are received from a qualified trust may
also include amounts that were not taxable to the Member upon
distribution. The Plan must, however, separately account for
the rollover contributions that consist of amounts that were
both taxable and non-taxable to the Member on distribution
from the qualified trust. The non-taxable portion of such
distribution will be treated as after-tax contributions made
after 1986 under clause (ii) of Section 10.1. Additionally,
after December 31, 2001, the Plan will accept (i) rollover
contributions from an annuity contract described in section
403(b) of the Code, excluding after-tax employee
contributions, and (ii) rollover contributions from an
eligible plan under section 457(b) of the Code 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.
(3) The contribution constitutes an eligible rollover
distribution (as defined in Code Section 402(c)(4)).
(4) The contribution is being transferred directly to the Plan
pursuant to the provisions of Code Section 401(a)(31).
Effective for rollover contributions after December 31, 2001,
the contribution is being transferred directly to the Plan
pursuant to the provisions of Code section 401(a)(31),
403(b)(10) or 457(d)(1)(C), as applicable.
(c) Regular Rollover. A Regular Rollover is a contribution that
satisfies all the requirements enumerated for a Direct
Rollover in paragraph (b) of this Section 5.4, except the
requirement of paragraph (b)(4) of this Section 5.4, and
which is delivered by the Member to the Plan not later than
the 60th day after the day of the Member's receipt of the
amount being contributed as a Regular Rollover. Effective for
rollover contributions after December 31, 2001, the time
limit of the preceding sentence may be extended as allowed in
Code section 402(c)(3)(B).
(d) Conduit IRA Rollover. A Conduit IRA Rollover is a
contribution that satisfies all of the following:
(1) The contribution is made in cash (including a check) or
by such other means as may be prescribed by the
Sponsoring Company, in consultation with the Trustee.
(2) The contribution consists of all or a portion of a
Member's benefit under an individual retirement account
or individual retirement annuity, the assets of which
consist solely of amounts attributable to a qualified
trust as defined in Code Section 402(c)(8), as required
under Code Section 408(d)(3)(A)(ii). The source of the
distribution for rollover contributions after December
31, 2001 is not relevant so long as the amount of the
rollover contribution was properly in the account from
which it was distributed and so long as the rollover
contribution to the Plan does not exceed the amount the
Member received from such account that would have been
included in gross income.
(3) The contribution is delivered by the Member to the Plan
not later than the 60th day after the day of the Member's
receipt of the amount being contributed as a Conduit IRA
Rollover. Effective for rollover contributions after
December 31, 2001, the time limit of the preceding
sentence may be extended as allowed in Code section
408(d)(3)(i).
(e) Information Provided by Member. Before the Plan will accept a
Direct Rollover, a Regular Rollover or a Conduit IRA
Rollover, the Sponsoring Company may require the Member to
provide such information and documentation as the Sponsoring
Company deems to be convenient and appropriate to demonstrate
that the amount submitted as a Direct Rollover, Regular
Rollover or Conduit IRA Rollover satisfies the requirements
applicable to such a rollover. If, after accepting a
contribution from a Member as a Direct Rollover, Regular
Rollover or Conduit IRA Rollover, the Sponsoring Company
becomes aware such contribution did not satisfy the
applicable rollover requirements in paragraph (b), (c) or (d)
of this Section 5.4, then the amount of such contribution and
any earnings attributable to it will be automatically
distributed within a reasonable time to the Member, without
the Member's consent.
(f) Investment. Coincident with or prior to the Plan's acceptance
of a contribution under this Section 5.4, the Member shall
direct the Plan and the Trustee regarding the investment of
the contribution among the investment alternatives provided
in Article 8 of the Plan. The Member's investment of
contributions under this Section 5.4 shall be subject to all
the relevant provisions of Article 8 of the Plan and shall be
subject to such administrative procedures as prescribed, from
time to time, by the Sponsoring Company, in consultation with
the Trustee.
(g) Amounts Received as Surviving Spouse or Alternate.
Distributions received by an Employee in the capacity of a
surviving spouse or an alternate payee under a qualified
domestic relations order that satisfies the requirements of
paragraph (a) hereof shall be eligible to be contributed to
the Plan as a rollover contribution if the relevant
provisions of this Section 5.4 are met with respect to the
same as though the Employee were an employee with respect to
such distribution.
ARTICLE 6
SALARY REDUCTION CONTRIBUTIONS
6.1 Salary Reduction Election.
(a) General. Subject to the provisions of Section 6.3 and the
limitations of Article 7, each Member may elect to reduce his remuneration
from a Participating Company by having an amount of his contribution under
Article 5 of the Plan, determined in whole number percentages of his
Compensation, allocated to his Tax Deferred Account. Such election shall be
made pursuant to such administrative procedures as may be prescribed by the
Sponsoring Company, from time to time. Member contributions under this
Section 6.1, when combined with any other contributions of such Member
intended to be made under Section 401(k) of the Code to any other plan (if
any) which allows such contributions maintained by the Sponsoring Company
or maintained by an Affiliated Company, which are made by such Member from
and after the time any such plan was so maintained, shall not exceed the
dollar limitation as determined by the United States Secretary of the
Treasury or his delegate pursuant to Section 402(g) of the Code to reflect
increases in the cost of living and to be adjusted no more than annually.
Notwithstanding anything in the foregoing to the contrary, effective for
contributions after December 31, 2001, the applicable limit of Code section
402(g) may be exceeded as allowed in paragraph (b) of this Section 6.1.
Notwithstanding anything in the foregoing to the contrary, if a Member's
contributions under this Section 6.1 made during a calendar year exceed the
maximum dollar limitation described above (hereinafter called "excess
deferral"), then such Member may notify the Sponsoring Company by March 1
of the calendar year following the calendar year for which such excess
deferral was made, in writing, under such procedures as may be prescribed
by the Sponsoring Company, from time to time, of the amount of such excess
deferral in the Plan. If the Sponsoring Company has actual knowledge of
such an excess deferral for a Member, then such written notice from such
Member shall be deemed to have been given. After such actual notice or
deemed notice occurs, the amount of such excess deferral, reduced by any
prior distributions of excess contributions under Section 6.3, shall be
distributed to the Member, with its allocable share of income or loss, by
April 15 of the calendar year following the calendar year for which the
excess deferral occurred; provided, however, that such distribution may be
made earlier, including within the calendar year for which the excess
deferral occurred. The amount of income or loss allocable to the
distribution of the excess deferral is determined by multiplying the amount
of income or loss allocable to the contributions made to the Plan for the
calendar year during which the excess occurred (or if earlier, the income
or loss for such contributions as of the Valuation Date immediately prior
to the distribution) by a fraction whose numerator is the excess deferral
for such Member and whose denominator is the sum of such Member's Tax
Deferred Account balance as of the beginning of the calendar year for which
the excess deferral occurred and the amount of such Member's contributions
under this Section 6.1 for that calendar year (or if earlier, the amount of
such contributions as of the Valuation Date immediately prior to the
distribution). Excess deferrals distributed shall first come from any
Supplemental Contributions made under this Section 6.1 during the calendar
year for which the excess deferral occurred and, if there are still excess
deferrals to be distributed after exhausting such Supplemental
Contributions, then the remaining portion of the distribution shall come
from the Member's Basic Contributions under this Section 6.1 made during
such calendar year, provided, that notwithstanding any other provision of
the Plan to the contrary, the amount of any Participating Company
contributions related to any such Basic Contributions shall be forfeited
and used to reduce the amount of Participating Company contributions that
would otherwise be required. Notwithstanding anything to the contrary, if,
during the calendar year for which an excess deferral is made, a Member who
would otherwise receive a distribution of such an excess deferral with its
allocable share of income or loss receives a distribution of all of his Tax
Deferred Account, such distribution shall be deemed to have been a
distribution of such Member's excess deferral and its allocable share of
income or loss.
(b) Catch-Up Contributions. Effective for contributions made after
December 31, 2001, Members who will be at least age 50 before the close of
the applicable Plan Year shall be able to make catch-up contributions in
accordance with, and subject to the limitations of, Code section 414(v).
Such catch-up contributions shall not be taken into account for purposes of
the provisions of the Plan implementing the required limitations of
sections 402(g) and 415 of the Code. The Plan shall not be treated as
failing to satisfy the provisions of the Plan implementing the requirements
of section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of the Code, as
applicable, by reason of the making of such catch-up contributions. The
Sponsoring Company shall prescribe administrative procedures that it
considers to be convenient to facilitate catch-up contributions. These
procedures may be changed from time to time.
6.2 Change or Suspension/Resumption of Salary Reduction Rate.
Subject to Sections 3.1(b), 5.1 and 6.1 of the Plan, a Member may elect to
change the amount of his contributions being allocated to his Tax Deferred
Account, in amounts equal to one or more whole percentage points of his
Compensation (including changes to or from 0%), by following such
administrative procedures as may be prescribed by the Sponsoring Company,
from time to time, and any such change shall be effective with respect to
the first paycheck for such Member issued for the first pay period
beginning after the Sponsoring Company records such change.
6.3 Automatic Suspension or Discontinuance of Salary Reduction. If
a Member ceases to be an Employee, or otherwise ceases to be eligible to
participate pursuant to the terms of Article 3 of the Plan, his Basic
Contributions and Supplemental Contributions, that were being made and
allocated pursuant to the terms of this Article 6, if any, shall be
automatically discontinued.
If a Member elects to make a hardship withdrawal from his Account and Tax
Deferred Account, if any, pursuant to the provisions of Section 12.3 of the
Plan, such Member's Basic Contributions and Supplemental Contributions,
that were being made and allocated pursuant to the terms of this Article 6,
if any, shall be automatically discontinued effective for payments of
Compensation first occurring for the pay period of such Member after the
Sponsoring Company records such withdrawal. The automatic discontinuance of
contributions resulting from a hardship withdrawal shall last for a period
of 12 calendar months, starting with the first calendar month coincident
with or next following the automatic discontinuance of contributions. After
the expiration of this 12 calendar month period, the Member must
affirmatively elect to resume contributions pursuant to the provisions of
Section 5.2 and/or Section 6.2 of the Plan. The 12-month suspension period
described in the foregoing shall be changed to 6 months for hardship
distributions made after December 31, 2001.
In no event shall the Actual Deferral Percentage for the Highly Compensated
Eligible Employees exceed the greater of (i) the Actual Deferral Percentage
for the Non-Highly Compensated Eligible Employees multiplied by 1.25; or
(ii) the lesser of (A) the Actual Deferral Percentage for the Non-Highly
Compensated Eligible Employees plus 2.00, or (B) the Actual Deferral
Percentage for the Non-Highly Compensated Eligible Employees multiplied by
2 (hereinafter called the "actual deferral percentage test"). However, the
amount of any excess deferrals under Section 6.1 for a calendar year
attributable to Non-Highly Compensated Eligible Employees shall be
disregarded and excluded from the computation of the actual deferral
percentage test for the Plan Year in which such excess deferrals occurred,
and, for this purpose, such excess deferrals shall be deemed to be the last
contributions made during the calendar year in which such excess deferrals
occurred, going backwards, until the contributions so determined equal the
amount of the excess deferral for any such Employee. The Sponsoring Company
may, without notice to any Member, discontinue the salary reduction
contributions of any one or more Highly Compensated Employees when such
discontinuance is deemed necessary or advisable to establish and/or
preserve the Plan as qualified under the provisions of Section 401(a) and
Section 401(k) of the Code. To the extent permitted by regulations issued
by the Secretary of the Treasury of the United States or his delegate, such
discontinuance by the Sponsoring Company may be retroactive and/or be by
way of reclassification of Member contributions and/or by way of
distributions to Members. If salary reduction contributions are
discontinued pursuant to the terms of this Section 6.3, the payroll
deductions which were related to such contributions shall continue at the
same rate for each affected Member, and such contributions, from and after
the date of such discontinuance, shall be deemed to be contributions made
under and subject to the provisions of Article 5, including, but not
limited to, the limitations applicable to such contributions under Section
5.4 of the Plan. If the Sponsoring Company determines to allow salary
reduction contributions to resume for any or all of the Highly Compensated
Eligible Employees, the rate of the contributions being made as of the day
prior to such resumption which related to the original discontinuance of
the salary reduction contributions shall cease to be made under the
provisions of Article 5 and shall, from and after the date of such
resumption, be made under the terms of this Article 6 at a rate for each
Member equal to the lesser of the rate at which such contributions were
being made prior to their prior discontinuance or such rate as is
prescribed by the Sponsoring Company, pursuant to the terms of this Section
6.3. Notwithstanding anything to the contrary contained herein, the
following actions may be taken by the Sponsoring Company, without notice to
any Member, in the event that the actual deferral percentage test is not
satisfied for the Plan Year. In such event, the amount by which the salary
reduction contributions for such Plan Year which are allocated to the Tax
Deferred Accounts of Highly Compensated Eligible Employees exceeds the
maximum amount of such contributions that could have been made for such
Plan Year to satisfy the actual deferral percentage test (hereinafter
"excess contributions") shall be distributed, with their allocable share of
income or loss, to the Highly Compensated Eligible Employees by the end of
the following Plan Year, as determined for each such Employee in the
following described manner. To determine the total excess contributions,
the actual deferral ratios (which is for each Highly Compensated Eligible
Employee the ratio of salary reduction contributions allocated to his Tax
Deferred Account for the Plan Year to his Actual Deferral Percentage
Compensation for the Plan Year) of the Highly Compensated Eligible
Employees for such Plan Year are reduced, beginning with the Highly
Compensated Eligible Employee(s) having the highest actual deferral ratio,
in succession, until each such actual deferral ratio is reduced to no more
than the greater of the following --
(1) the particular actual deferral ratio resulting
in the Actual Deferral Percentage for the Highly
Compensated Eligible Employees that satisfies
the actual deferral percentage test, calculated
under the formula of [ (M x T) - S ] / N, where
M is the maximum allowable Actual Deferral
Percentage for the Highly Compensated Eligible
Employees , based upon the Actual Deferral
Percentage of the Non-Highly Compensated
Eligible Employees for such Plan Year, T is the
total number of Highly Compensated Eligible
Employees for the Plan Year, S is the sum of the
actual deferral ratios of the Highly Compensated
Eligible Employees who do not have the highest
actual deferral ratio for the Plan Year, and N
is the number of Highly Compensated Eligible
Employees who do have the highest actual
deferral ratio for the Plan Year; or
(2) the actual deferral ratio of the Highly
Compensated Eligible Employee(s) with the next
highest actual deferral ratio; until no such
Highly Compensated Eligible Employee's actual
deferral ratio for the Plan Year exceeds the
highest permitted such ratio for such Plan Year.
The amount of the total excess contributions to be
distributed to a particular Highly Compensated Eligible
Employee for the Plan Year is determined by starting with
the Highly Compensated Eligible Employee with the
greatest amount of salary reduction contributions
allocated to his Tax Deferred Account for such Plan Year
and reducing the amount of such contributions to the next
highest amount of such contributions for a Highly
Compensated Eligible Employee and continuing in
descending order until all the excess contributions have
been so allocated and distributed. For this purpose, the
highest amount of such contributions is determined after
the distribution of any excess contributions. However,
the excess contributions so allocated to a Highly
Compensated Eligible Employee cannot exceed the amount of
salary reduction contributions actually allocated to such
Highly Compensated Eligible Employee's Tax Deferred
Account for the Plan Year, and are reduced by the amount
of any previously distributed excess deferrals under
Section 6.1 attributable to such Plan Year. Excess
contributions distributed to a Highly Compensated
Eligible Employee for a Plan Year shall first come from
any Supplemental Contributions made by such Employee and
allocated to his Tax Deferred Account for such Plan Year
and, if there are still excess contributions to be
distributed after exhausting such Employee's Supplemental
Contributions, then the remaining portion of the
distribution shall come from such Employee's Basic
Contributions that were allocated to his Tax Deferred
Account for such Plan Year, provided, that
notwithstanding any other provision of the Plan to the
contrary, the amount of any Participating Company
contributions related to any such Basic Contributions
shall be forfeited and used to reduce the amount of
Participating Company contributions that would otherwise
be required. The amount of allocable income or loss that
is added to a Highly Compensated Eligible Employee's
distribution of excess contributions is equal to the
income or loss allocable to the salary reduction
contributions for the Plan Year multiplied by a fraction
whose numerator is the excess contributions allocated to
the Highly Compensated Eligible Employee for the Plan
Year and whose denominator is the sum of such Employee's
Tax Deferred Account on the first day of such Plan Year
and the salary reduction contributions under allocated to
his Tax Deferred Account for such Plan Year.
Notwithstanding anything to the contrary, if, during the
Plan Year for which an excess contribution is made, a
Highly Compensated Eligible Employee who would otherwise
be allocated a share of such excess contribution with its
allocable share of income or loss receives a distribution
of all of his Tax Deferred Account, such distribution
shall be deemed to have been a distribution of such
Employee's share of the excess contribution and its
allocable share of income or loss.
ARTICLE 7
PARTICIPATING COMPANY CONTRIBUTIONS
7.1 Participating Company Contributions.
(a) Prior to July 1, 2003. The Participating Companies shall
contribute to the Trust, in cash or in kind, on behalf of each
Member for whom there are Member Basic Contributions, the amount
derived from the following table:
- --------------------------------------------------------------- -------------------------------------------------------------
Column 1 Column 2
Successive Levels of Member Basic Contributions, as a Participating Company Contributions as a Percentage of each
Percentage of Compensation, to which Levels of Level of Member Basic Contributions in Column 1
Participating Company Contributions Relate
- --------------------------------------------------------------- -------------------------------------------------------------
1. at least 1% and not greater than 2% 1. 110%
- --------------------------------------------------------------- -------------------------------------------------------------
2. at least 3% and not greater than 4% 2. 100%
- --------------------------------------------------------------- -------------------------------------------------------------
Any forfeitures under the Plan shall be used to reduce the amount
of the Participating Companies' contributions that would otherwise
be contributed under this Section 7.1. The determination of the
amount of the aggregate Participating Company contributions, and
the payment thereof, for each payment of Compensation for which a
contribution is to be made shall be made as soon as practicable
after the payment of such Compensation, as arranged, from time to
time, between the Sponsoring Company and the Trustee. Subject to
the limitations of Section 7.2 and Section 7.3 of the Plan, the
Participating Company contributions made with regard to each
Member's Basic Contributions shall be allocated between the
Account and Restricted Company Match Account of each such Member
for the period for which such allocation is being made as
determined under the following table:
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
Column 1 Column 2 Column 3 Column 4
Member Basic Contributions in Participating Company Portion of Participating Portion of Participating
1 Percentage Point Increments Contributions for each $1 of Company Contributions in Company Contributions in
Member Basic Contributions Column 2 Allocated to the Column 2 Allocated to the
in Column 1 Member's Account Member's Restricted Company
Match Account
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
1. first 1% of 1. $1.10 1. $ .30 1. $ .80
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
2. second 1% of 2. $1.10 2. $ .30 2. $ .80
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
3. third 1% of 3. $1.00 3. $ .30 3. $ .70
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
4. fourth 1% of 4. $1.00 4. $ .30 4. $ .70
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
Each Participating Company's share of the aggregate Participating
Company contributions for any period for which an allocation is
made shall equal the sum of the allocations pursuant to this
Section 7.1 of such aggregate Participating Company contributions
to the Accounts of the Members employed by such Participating
Company during such period.
(b) After June 30, 2003. Effective with respect to an eligible
Member's Basic Contributions made to the Plan from Compensation
received after June 30, 2003, the Participating Companies shall
contribute to the Trust, in cash or in kind, on behalf of each
Member for whom there are Member Basic Contributions, the amount
derived from the following table:
- --------------------------------------------------------------- -------------------------------------------------------------
Column 1 Column 2
Successive Levels of Member Basic Contributions, as a Participating Company Contributions as a Percentage of each
Percentage of Compensation, to which Levels of Level of Member Basic Contributions in Column 1
Participating Company Contributions Relate
- --------------------------------------------------------------- -------------------------------------------------------------
1. at least 1% and not greater than 5% 1. 100%
- --------------------------------------------------------------- -------------------------------------------------------------
Any forfeitures under the Plan shall be used to reduce the amount
of the Participating Companies' contributions that would otherwise
be contributed under this Section 7.1. The determination of the
amount of the aggregate Participating Company contributions, and
the payment thereof, for each payment of Compensation for which a
contribution is to be made shall be made as soon as practicable
after the payment of such Compensation, as arranged, from time to
time, between the Sponsoring Company and the Trustee. Subject to
the limitations of Section 7.2 and Section 7.3 of the Plan, the
Participating Company contributions made with regard to each
Member's Basic Contributions shall be allocated to the Account of
each such Member for the period for which such allocation is being
made with a portion of such contribution invested in Fund A -
Ashland Common Stock Fund and the remainder invested pursuant to
the Member's investment election for contributions of the Member
under Articles 5 and 6 as determined under the following table:
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
Column 1 Column 2 Column 3 Column 4
Member Basic Contributions in Participating Company Portion of Participating Portion of Participating
1 Percentage Point Increments Contributions for each $1 of Company Contributions in Company Contributions in
Member Basic Contributions Column 2 Allocated to the Column 2 Invested on behalf
in Column 1 Member's Account of the Member in Fund A -
Ashland Common Stock Fund
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
1. first 1% of 1. $1.0 0 1. $ .40 1. $ .60
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
2. second 1% of 2. $1.00 2. $ .40 2. $ .60
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
3. third 1% of 3. $1.00 3. $ .40 3. $ .60
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
4. fourth 1% of 4. $1.00 4. $ .40 4. $ .60
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
5. fifth 1% of 4. $1.00 4. $ .40 4. $ .60
Compensation
- -------------------------------- ------------------------------ ------------------------------ ------------------------------
Each Participating Company's share of the aggregate Participating
Company contributions for any period for which an allocation is
made shall equal the sum of the allocations pursuant to this
Section 7.1 of such aggregate Participating Company contributions
to the Accounts of the Members employed by such Participating
Company during such period.
7.2 Limitation on Annual Additions.
(a) Notwithstanding any other provision of the Plan, the sum
of the Annual Additions (as hereinafter defined) to a
Member's Account and Tax Deferred Account for a
Limitation Year (as defined in Section 7.4) ending after
January 1, 1984 shall not exceed the lesser of: (i)
$30,000 as adjusted under Section 415(d) of the Code,
determined as of the applicable Limitation Year; or (ii)
25% of such Member's Limitation Year Compensation (as
defined in Section 7.4). Effective for Limitation Years
beginning after December 31, 2001, the sum of the said
Annual Additions shall not exceed (except as otherwise
allowed under Code section 414(v)) the lesser of: (i)
$40,000 as adjusted under Section 415(d) of the Code,
determined as of the applicable Limitation Year; or (ii)
100% of such Member's Limitation Year Compensation (as
defined in Section 7.4). The limitation in each clause
(ii) above shall not apply with respect to any
contributions for medical benefits (within the meaning of
Section 419A(f)(2) of the Code) after separation from
service which are otherwise treated as an Annual Addition
or to any amount otherwise treated as an Annual Addition
under Section 415(l) of the Code. The term Annual
Additions to a Member's Account for any Limitation Year
shall mean the sum of:
(1) such Member's allocable share of the total
aggregate Participating Company contributions
for the Plan Year ending within such Limitation
Year;
(2) amounts allocated under Section 6.1 to such
Member's Tax Deferred Account for the Plan Year
ending within such Limitation Year (other than
excess deferrals distributed to the Member by
April 15 of the calendar year following the
calendar year during which such excess deferral
arose);
(3) the amount of such Member's total Basic
Contributions and Supplemental Contributions to
his account for the Plan Year ending within such
Limitation Year (other than rollover
contributions, repayments of loans or of amounts
described in Section 411(a)(7)(B) of the Code in
accordance with the provisions of Section
411(a)(7)(C) of the Code, repayments of amounts
described in Section 411(a)(3)(D) of the Code,
direct transfers between qualified plans,
deductible employee contributions within the
meaning of Section 72(o)(5) of the Code; and
salary reduction contributions to a simplified
employee pension plan which are excludable from
gross income under Section 408(k)(6) of the
Code);
(4) amounts allocated, in years beginning after
March 31, 1984, to an individual medical benefit
account, as defined in Section 415(l)(2) of the
Code, which is part of a defined benefit plan;
and
(5) amounts derived from contributions paid or
accrued after December 31, 1985, in taxable
years ending after such date, which are
attributable to post-retirement medical benefits
allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of
the Code, under a welfare benefits fund, as
defined in Section 419(e) of the Code,
maintained by a Participating Company or an
Affiliated Company.
Except as provided in (2) of this paragraph (a), excess deferrals,
excess contributions and excess aggregate contributions are
included as Annual Additions for the Limitation Year for which
they are allocated to an account.
(b) In the event that it is determined that, but for the
limitations contained in paragraph (a) of this Section
7.2, the Annual Additions to a Member's Account and Tax
Deferred Account for any Limitation Year would be in
excess of the limitations contained herein, such Annual
Additions shall be reduced to the extent necessary to
bring such Annual Additions within the limitation
contained in paragraph (a) of this Section 7.2 in the
following order:
(1) Any employee contributions by a Member to his
Account which are included in such Annual
Additions shall be returned to such Member
together with any gain attributable to such
returned employee contributions unless the
return of employee contributions under this
sub-paragraph (1) results in discrimination in
favor of employees of the Sponsoring Company, or
other Participating Company which is not an
Affiliated Company of the Sponsoring Company,
who are officers or highly compensated;
(2) If there are no such employee contributions, or,
if such employee contributions cannot be
returned or are not sufficient to reduce such
Annual Additions to the limitations contained
herein, to the extent permitted by the Code and/
or regulations issued thereunder, contributions
allocated to a Member's Tax Deferred Account
which are included in such Annual Additions
shall be paid to such Member together with any
gain attributable to such contributions;
(3) If there are no such allocations, or, if such
allocations cannot be paid to such Member or are
not sufficient to reduce such Annual Additions
to the limitations contained herein, such
Member's allocable share of the aggregate
Participating Company contributions for the Plan
Year ending within such Limitation Year shall be
reduced.
(c) To the extent that the amount of any Member's allocable
share of the aggregate Participating Company
contributions is reduced in accordance with the
provisions of paragraph (b) of this Section 7.2, the
amount of such reductions shall be treated as a
forfeiture under the Plan and shall be applied to reduce
Participating Company contributions made or to be made
after the date on which such reduction arose or, if there
are no such contributions made, shall be returned to the
Participating Companies.
7.3 Limitation on Annual Additions for Participating Companies or
Affiliated Companies Maintaining Other Defined Contribution Plans. In the
event that any Member of this Plan is a participant under any other Defined
Contribution Plan (as defined in Section 7.4) maintained by a Participating
Company or an Affiliated Company (whether or not terminated), the total
amount of Annual Additions to such Member's accounts under all such Defined
Contribution Plans shall not exceed the limitations set forth in Section
7.2; provided, however, if any such Defined Contribution Plan is subject to
a special limitation in addition to, or instead of, the regular limitations
described in Sections 415(b) and 415(c) of the Code: (i) the total amount
of Annual Additions to such Member's Account, Tax Deferred Account and
Restricted Company Match Account in this Plan (only) shall not exceed the
limitations set forth in Section 7.2, (ii) the combined limitations for all
such Defined Contribution Plans (including this Plan) shall be the larger
of such special limitation or the limitations set forth in Section 7.2 and
(iii) if any such other Defined Contribution Plan is a tax credit employee
stock ownership plan under which the amount allocated to such Member for a
Limitation Year is equal to the limitation set forth in Section 7.2, no
part of the total aggregate Participating Company contributions for such
Limitation Year may be allocated to such Member under this Plan. If it is
determined that as a result of the limitations set forth in this Section
7.3 the Annual Additions to a Member's Account, Tax Deferred Account and
Restricted Company Match Account in this Plan must be reduced, such
reduction shall be accomplished in accordance with the provisions of
Section 7.2.
7.4 Definitions Relating to Annual Additions Limitations. For
purposes of Section 7.2, Section 7.3 and this Section 7.4, the following
definitions shall apply:
(a) "Retirement Plan" shall mean (i) any profit sharing,
pension or stock bonus plan described in Sections 401(a)
and 501(a) of the Code, (ii) any annuity plan or annuity
contract described in Sections 403(a) or 403(b) of the
Code, (iii) any qualified bond purchase plan described in
Section 405(a) of the Code, (iv) any individual
retirement account, individual retirement annuity or
retirement bond described in Sections 408(a), 408(b) or
409(a) of the Code and (v) any simplified employee
pension.
(b) "Defined Contribution Plan" shall mean (i) a Retirement
Plan which provides for an individual account for each
participant therein and for benefits based solely on the
amount contributed to the participant's account, and any
income, expenses, gains and losses, and any forfeitures
of accounts of other participants which may be allocated
to such participant's account and (ii) mandatory and/or
voluntary employee contributions to a defined benefit
plan to the extent of such employee contributions.
(c) "Limitation Year" shall mean the Plan Year.
(d) "Limitation Year Compensation" shall mean the Member's
wages, salaries, fees for professional service and other
amounts received for personal services actually rendered
in the course of employment with the Participating
Companies and Affiliated Companies during a Limitation
Year including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, and bonuses. Limitation Year
Compensation shall not include deferred compensation
amounts (other than amounts received by a Member pursuant
to an unfunded non-qualified plan in the year such
amounts are includable in the gross income of the Member
for federal income tax purposes); amounts allocated to a
Member's Tax Deferred Account, provided, however, that
such amounts shall be included as Limitation Year
Compensation in Limitation Years beginning after December
31, 1997; allowances paid by reason of foreign
assignment; amounts realized from the exercise of
non-qualified stock options or when restricted stock (or
property) held by a Member 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; and other amounts which receive special tax
benefits. Notwithstanding anything in the foregoing to
the contrary, effective for Limitation Years beginning
after December 31, 1997, elective deferrals pursuant to
Code sections 125 or 457 shall be included as Limitation
Year Compensation. Effective for Limitation Years
beginning after December 31, 2000, elective deferrals
pursuant to Code section 132(f)(4) shall also be included
in Limitation Year Compensation. Effective for Limitation
Years beginning on and after October 1, 1994, the
applicable annual compensation limit becomes $150,000 and
adjustments thereto shall only be made in increments of
$10,000, rounded down to the next lowest multiple of
$10,000, in such manner as determined by Code section
415(d) from time to time. Effective for Limitation Years
beginning on and after January 1, 2002, the applicable
annual compensation limit becomes $200,000 and
adjustments thereto shall only be made in increments of
$5,000 rounded down to the next lowest multiple of
$5,000, in such manner as determined by Code section
415(d) from time to time.
ARTICLE 8
INVESTMENT OF CONTRIBUTIONS
8.1 Investment Funds. The Trust Fund shall be invested by the
Trustee in such investment funds as may be agreed upon, from time to time,
between the Trustee and the Sponsoring Company, as provided in Section 4 of
the trust agreement between the Sponsoring Company and the Trustee, dated
as of October 1, 1995 and as it may be amended thereafter, including all
attachments and exhibits appended thereto, all of which are incorporated
herein by reference and made a part hereof., Any provision of the trust
agreement so incorporated that is in conflict with a provision regarding
the investment funds contained herein shall supercede and control over the
conflicting provision contained herein. Among the investment funds that the
Trustee and the Sponsoring Company may agree to make available for Members'
investment elections is the following:
(a) Fund A - Ashland Common Stock Fund shall be a fund
consisting of common stock of the Sponsoring Company
contributed by one or more Participating Companies or
purchased by the Trustee (i) on the open market; (ii) by
the exercise of stock rights; (iii) through participation
in any dividend reinvestment program of the Sponsoring
Company, including any such program which involves the
direct issuance or sale of common stock by the Sponsoring
Company (if no commission is charged with respect to such
direct issuance or sale); or (iv) from the Sponsoring
Company whether in treasury stock or authorized but
unissued stock. Stock purchased by the Trustee pursuant
to clause (iii) of this paragraph (a) shall be valued
pursuant to such dividend reinvestment program and shall
be purchased in accordance with all of the terms and
conditions of such program. Stock contributed by a
Participating Company or purchased by the Trustee
pursuant to clause (iv) of this paragraph (a) shall be
valued at the closing price of such stock on the New York
Stock Exchange composite tape for the trading day
immediately preceding the date on which such stock is
contributed or sold to the Plan; provided, however, that
effective on and after April 1, 1996, stock acquired
pursuant to clause (iv) of this paragraph (a) shall be
valued at the closing price of such stock on the New York
Stock Exchange at 4:00 PM for the date as of which such
stock is contributed or sold to the Plan and provided
further, that any such stock so contributed shall be in
whole shares only. In no event shall a commission be
charged with respect to a purchase pursuant to clause
(iv). The Trustee may, to the extent it is mutually
agreed upon by the Trustee and the Sponsoring Company,
maintain a portion of the investment in Fund A in cash
and/or cash equivalents, in accordance with the terms of
the trust agreement, for the purpose of fund liquidity
and to accommodate distributions. Notwithstanding
anything in the Plan to the contrary, effective January
1, 2000, if there is a stock dividend of shares of Arch
Coal, Inc. paid with respect to amounts held in Fund A,
the Ashland Common Stock Fund, and on amounts held in the
Restricted Company Match Accounts, such stock dividend
shall be allocated to an investment fund maintained in
the Plan, which may be a separately accounted for
subdivision of Fund A, hereinafter referred to as the
Arch Coal Investment Fund, to hold each Member's and
Beneficiary's allocable share of such stock dividend. The
terms of the Arch Coal Investment Fund shall not allow
any Member or Beneficiary to transfer additional amounts
thereto, but, nevertheless, shall provide that any cash
dividends paid on such stock dividend allocated thereto
be used to acquire additional amounts of such stock.
Additionally, Members and Beneficiaries having interests
invested in the Arch Coal Investment Fund shall be able
to direct the Trustee regarding the voting of the shares
of stock represented by the said investment therein in
the same manner as prescribed in Section 15.6 and in
Article 23 of the Plan. Effective January 1, 2003, the
investments in the Restricted Company Match Accounts
shall be merged into and become a part of this Fund A.
8.2 Allocation of Contributions to Funds. A Member's contributions
made under Articles 5 and 6 of the Plan and the Member's allocable share of
the aggregate Participating Company contributions that are not allocated to
initial investment in Fund A - Ashland Common Stock Fund under Section 7.1
of the Plan shall be invested in one of more of the investment Funds
provided from time to time in the trust agreement, as elected by the Member
pursuant to Article 4 or as subsequently changed in accordance with Section
8.3. The amount so elected to be invested by a Member in a particular Fund
cannot be less than 5% of the total of the contributions to be invested and
must otherwise be expressed in whole percentage point increments, unless
otherwise specified under administrative rules promulgated by the
Sponsoring Company. An account shall be established for each Member under
each Fund to which contributions on behalf of such Member have been
allocated and a separate account shall be established under each such Fund
in respect of any salary reduction contributions under Article 6 of the
Plan. Additionally, each Member's contributions allocated to his Account
before 1987 which consisted of after-tax contributions of such Member shall
be separately accounted for. Effective January 1, 2000, the income, gains,
losses and dividends payable on any stock dividends paid in shares of Arch
Coal, Inc. with respect to Members' and Beneficiaries' holdings in Fund A
and in the Restricted Company Match Accounts which are allocated to the
Arch Coal Investment Fund interests of such Members and Beneficiaries, as
described in Section 8.1(a) of the Plan, shall automatically be allocated
to the Arch Coal Investment Fund interests of all such Members and
Beneficiaries, with the amount of any such dividends reinvested in
additional shares of Arch Coal, Inc. stock. The reinvestment of such
dividends payable on the Arch Coal, Inc. stock investments shall occur at
such time and in such manner as determined by the Trustee.
8.3 Change in Investment Options. A Member may elect to change his
investment option or options for future contributions by following such
administrative procedures as may be prescribed by the Sponsoring Company,
from time to time, and any such change shall be effective with respect to
the first paycheck for such Member issued for the first pay period
beginning after the Sponsoring Company records such change. While a portion
of the Participating Company contribution made with respect to a Member is
initially invested in Fund A - Ashland Common Stock Fund as prescribed in
Section 7.1 of the Plan, the Member may elect to change the investment of
such contribution at any time after the allocation of it to the Fund A -
Ashland Common Stock Fund. Notwithstanding anything in the Plan to the
contrary, no Member may elect to have any portion of such Member's
contributions or the Participating Company contributions made on behalf of
such Member allocated to the Member's investment (if any) in the Arch Coal
Investment Fund.
8.4 Transfer Between Investment Funds. Subject to such
administrative procedures as may be prescribed by the Sponsoring Company,
from time to time, and subject to any requirements regarding the minimum
amount that a Member may be able to direct to be transferred from one
investment Fund to another as may be prescribed, from time to time, by the
Sponsoring Company and the Trustee, a Member may elect to transfer all or a
portion of his Account and Tax Deferred Account invested in any Fund
available under the trust agreement to or among any one or more of the
other such Funds by following such administrative procedures for the same
as may be prescribed by the Sponsoring Company, from time to time,
generally to be effective no later than the end of the next day following
the day on which such investment transfer is recorded on the records of the
Trustee and on which the New York Stock Exchange is open. Notwithstanding
anything in the Plan to the contrary, no Member or Beneficiary may elect to
have any portion of such person's other investments in the Plan transferred
to such person's investment (if any) in the Arch Coal Investment Fund.
Nevertheless, Members and Beneficiaries may elect to have their interests
in the Arch Coal Investment Fund transferred to other available investment
options under the Plan on the same terms and conditions that such
investment transfers may be made among other investment options in the
Plan.
8.5 Trustee to Trustee Transfers.
(a) PAYSOP Termination. In connection with the termination of
the portion of the Ashland Inc. PAYSOP, effective January
31, 1991, the Plan shall accept direct transfers of
shares of common stock of the Sponsoring Company for
investment in Fund A hereunder, valued as of the date of
such transfer under the rules applicable under such
PAYSOP, with respect to Employees who are eligible to
participate in the Plan. Except for purposes of the rules
for determining the amount of and the limitations on
Participating Company contributions under Articles 7 and
24 of the Plan, such direct transfers of shares shall be
treated in the same manner as Participating Company
contributions made to the Plan with respect to an
Employee.
(b) LESOP Diversification. In connection with the making of
investment directions under Section 7.5 of the Ashland
Inc. Leveraged Employee Stock Ownership Plan, the Plan
shall accept direct transfers of shares of common stock
of the Sponsoring Company for investment in Fund A
hereunder, and for allocation to the Account of the
Member who directed that such transfer be made, valued as
of the date of such transfer under the rules applicable
under such plan. Except for purposes of the rules for
determining the amount of and the limitations on
Participating Company contributions under Articles 7 and
24 of the Plan, such direct transfers of shares shall be
treated in the same manner as Participating Company
contributions made to the Plan with respect to a Member
and allocated to such Member's Account.
(c) Subject to the satisfaction of the following
requirements, a Member may make a voluntary and informed
election directing that his entire vested Account and Tax
Deferred Account be transferred directly from the Trustee
of this Plan to the trustee of another plan ("transferee
plan") which is qualified under Section 401(a) of the
Code. The requirements which must be satisfied are as
follows:
(i) The Member shall have the
option to allow his Account and
Tax Deferred Account to remain
in this Plan for the maximum
period of time allowed under
Sections 13.1 and 16.1 of the
Plan.
(ii) The Account and Tax Deferred
Account, when transferred to
the transferee plan, must be
fully vested thereunder and,
immediately after such
transfer, the Member would
receive from the transferee
plan, on a termination basis, a
benefit therefrom which is at
least equal to the benefit to
which he would have been
entitled, on a termination
basis, from this Plan
immediately before such
transfer, within the meaning of
the provisions of Section
414(1) of the Code.
(iii) The transfer of the Member's
Account and Tax Deferred
Account shall be in cash,
except to the extent the Member
would be entitled to receive a
distribution in kind. To the
extent that a Member is so
entitled to receive a
distribution in kind, the
Member may direct that the
transfer be made in kind,
except to the extent the
transferee plan will not accept
the transfer in kind. The
amount of cash or in kind
assets transferred shall be
determined in the same manner
as any other distribution under
the Plan.
(iv) The Member shall otherwise be
entitled to a distribution
pursuant to the provisions of
Article 11 and Article 13.
(v) The Member provides such
evidence from the transferee
plan to the Plan Administrator,
as prescribed by the Plan
Administrator, which is
sufficient to demonstrate that
the transferee plan is
qualified under Section 401(a)
of the Code, that the terms of
the transferee plan allow it to
accept such a transfer in the
form in which it will be made
as prescribed under (iii)
above, and that the transferee
plan meets the applicable
provisions of (ii) above.
8.6 Loans.
(a) Eligibility. Any Member who is an Employee paid on the
payroll system of the Sponsoring Company or, effective
January 1, 2001, any Member whether or not paid on the
payroll system of the Sponsoring Company (including,
among others, former Employees, but excluding alternate
payees under approved qualified domestic relations orders
and beneficiaries of deceased Members) may apply for a
loan from his Tax Deferred Account and his Account,
subject to the terms, conditions and limitations
prescribed in this Section 8.6 of the Plan and those on
any loan agreement or promissory note signed by such
Member. Any such Member who is eligible for a loan may
apply for a loan by contacting the Trustee in the manner
prescribed by the Sponsoring Company, from time to time.
A Member to whom a loan is made automatically agrees to
be bound by all the terms and conditions associated with
such loan by receiving, accepting, cashing and/or
depositing the check representing the loan amount,
including any loan agreement and/or promissory note, the
provisions of which were on or sent in association with
such check.
(b) Conditions. Loans under (a) above shall meet all of the
following requirements:
(1) such loans shall be available to Members who are
parties in interest (as defined in ERISA Section
3(14)(H)) on a reasonably equivalent basis,
provided, however, any such Member to whom a
loan is made must satisfy the eligibility
requirements identified in paragraph (a) of this
Section 8.6;
(2) such loans shall not be made available to
Members who are highly compensated employees (as
defined in Code Section 414(q)) in an amount
greater than the amount made available to other
Members; provided, however, that the Plan may
lend the same percentage of a person's vested
benefits to Members with both large and small
amounts of vested benefits;
(3) such loans shall be made in accordance with
definite plans for repayment;
(4) such loans shall bear a reasonable rate of
interest which shall be equal to the prime rate
of interest, as determined by the Sponsoring
Company or the Trustee, for the calendar month
preceding the calendar month during which the
loan is made plus one percentage point and such
rate of interest shall be compounded monthly;
(5) such loans shall not be made in an amount of
less than $1,000 and no more than two loans for
an eligible Member may be outstanding at one
time;
(6) such loans shall be subject to an initiation fee
upon approval and an annual processing fee
charged against the Tax Deferred Account and/or
Account of the Member as an expense,
additionally, for loans made after January 1,
1998, if determined by the Sponsoring Company to
be reasonably required, such loans shall be
subject to any applicable tax, fee, collection
or other pecuniary charge imposed by any
federal, state or local government or division
thereof and it shall be collected from either
the amount of the loan or from the Member's
Account or Tax Deferred Account;
(7) Members to whom such loans are made shall agree
to repay such loans by means of payroll
deductions; and
(8) such loans shall be adequately secured by an
assignment of 50% of a borrowing Member's
nonforfeitable benefits in his Tax Deferred
Account and Account under the Plan; provided,
however, in the event of default, foreclosure on
the note and attachment of security will not
occur until a distributable event occurs under
the Plan.
(c) Limitation on Amount. A loan under the Plan (when added
to other loans outstanding under the Plan and any other
plans taken into account under Section 72(p)(2)(C) of the
Code) to a Member shall not exceed the lesser of:
(1) $50,000 reduced by the difference between the
Member's highest outstanding loan balance under
the Plan during the one-year period ending on
the date the loan is made and the Member's
outstanding loan balance under the Plan on the
date the loan is made; or
(2) 50% of the nonforfeitable portion of the
Member's Tax Deferred Account and Account.
(d) Repayments.
(1) Period to Repay. Each loan under this Section
8.6 must be repaid within five years of the date
it is made.
(2) Method of Repayment. Except as otherwise
allowed, a Member's repayment of a loan shall be
made by means of payroll deductions providing
for substantially level amortization with
payments not less than quarterly.
Notwithstanding the foregoing, a Member may
pre-pay the total outstanding balance of a loan
by delivering a money order, cashier's check or
certified check in the amount of such balance in
such manner as may be prescribed, from time to
time, by the Sponsoring Company. A Member with
one or more loans outstanding who, after
December 31, 1997, ceases to be paid through the
payroll system of the Sponsoring Company shall
be permitted to continue to repay such loan or
loans by personal check or by such other means
as may be authorized by the Sponsoring Company,
from time to time. The Sponsoring Company shall,
in consultation with the Trustee, from time to
time, prescribe such procedures to accommodate
repayments of outstanding loans by Members who
cease to be covered by the Sponsoring Company's
payroll and by such Members who subsequently
again become covered by the Sponsoring Company's
payroll, as may be deemed convenient or
appropriate. Effective January 1, 2001, any
Member eligible to obtain a loan under paragraph
(a) of this Section 8.6 and who is not paid on
the payroll system or the Sponsoring Company
shall repay any loan hereunder by personal check
or by such other means as may be authorized by
the Sponsoring Company, from time to time. If
such a Member later becomes covered by the
payroll system of the Sponsoring Company, the
Sponsoring Company shall, in consultation with
the Trustee, from time to time, prescribe
procedures to accommodate repayments under these
circumstances.
(3) Grace Period. In the event that an installment
to repay the loan is missed, the Sponsoring
Company may apply a grace period to allow Member
to repay the outstanding loan by the last day of
the calendar quarter after the calendar quarter
in which the required installment was due.
(4) Suspensions.
i. Leaves. Notwithstanding anything
contained herein to the contrary, and
subject to the discretion of the
Sponsoring Company, in the event a
Member to whom a loan has been made
goes on an approved leave of absence
without pay, the installment payments
otherwise due to repay such loan may be
suspended for a period of up to one
year; provided, however, that such
suspension shall not extend the
five-year period within which such loan
must otherwise be repaid and provided
further, that any remaining
installments upon such Member's return
to active, paid employment on the
payroll system of the Sponsoring
Company shall be appropriately adjusted
to take into account the period during
which installment payments were missed.
ii. Military Leaves. Notwithstanding
anything contained herein to the
contrary, in the event a Member to whom
a loan has been made goes on a military
leave of absence of the kind described
in Code section 414(u) for more than
two weeks, the installment payments
otherwise due to repay such loan may be
suspended for the period of such leave.
Interest shall continue to accrue
during the time such loan repayments
are suspended at the lesser of 6% or
the rate that otherwise applied to the
loan. Upon return to employment within
the time required to preserve
reemployment rights under Federal law
the loan will be re-amortized over an
extended period. The extended period
shall equal the term of the original
loan and the period of the military
leave. The amount of the re-amortized
periodic loan repayments shall not be
less than the amount of the periodic
payments that were due before the
military leave.
(e) Default. Unless otherwise provided under this Section 8.6
or under law, a Member to whom a loan is made under this
Section 8.6 shall be considered to be in default with
regard to the repayment of such loan if, at any time
while the loan is outstanding, the Member ceases to meet
the eligibility requirements for a loan under paragraph
(a) of this Section 8.6. Except to the extent that
sub-paragraphs (3) and (4) of paragraph (d) of this
Section 8.6 may apply to such Member, upon a default, the
outstanding balance of the loan will become due and
payable which may result in a deemed distribution or a
distribution of an offset amount with respect to the
Member under applicable Department of Treasury
regulations.
ARTICLE 9
VALUATION OF TRUST FUND
The Trustee shall value each investment Fund under the trust
agreement at fair market value as of the close of business on each
Valuation Date. In making such valuation, the Trustee shall deduct all
charges, expenses and other liabilities, if any, contingent or otherwise,
then chargeable against each such Fund, in order to give effect to income
realized and expenses paid or incurred, losses sustained and unrealized
gains or losses constituting appreciation or depreciation in the value of
Trust investments in each such Fund since the last previous valuation. The
Trustee shall deliver to the Sponsoring Company a certified valuation of
each such investment Fund together with a statement of the amount of net
income or loss (including appreciation or depreciation in the value of
Trust investments in each such Fund) in such manner and at such time or
times as may be prescribed in the trust agreement between the Sponsoring
Company and the Trustee.
ARTICLE 10
SEPARATE ACCOUNTS
10.1 Separate Accounts. Separate accounts under each investment
Fund shall be maintained under the Plan for each Member. The amount
contributed by or on behalf of a Member or allocated to such Member shall
be credited to his Account or his Tax Deferred Account in the manner set
forth in Articles 5, 6, 7 and 8 of the Plan. No amounts allocated to a
Member's Account shall be reallocated to such Member's Tax Deferred
Account, and, except as otherwise allowed by Section 6.3 of the Plan and/or
law, regulation or ruling, no amount allocated to a Member's Tax Deferred
Account shall be reallocated to such Member's Account. All payments from
the Plan to a Member or his Beneficiary shall be charged (i) first against
the Account of such Member, starting with any after-tax contributions the
Member made prior to 1987, exclusive of earnings allocable thereto, to the
extent such contributions still remain in the Member's Account, until
exhausted, and then (ii) against the remainder of the Account, consisting
first of any other Member after-tax contributions and second of the
Participating Company contributions, and then charged against his Tax
Deferred Account, including all allocable earnings. Except as otherwise
provided in the Plan, each Member has a nonforfeitable right to amounts in
his Account and Tax Deferred Account.
10.2 Accounts of Members Transferred to an Affiliated Company. If
a Member is transferred to an Affiliated Company which is not a
Participating Company, the amount credited to his Account and Tax Deferred
Account shall continue to share in the earnings or losses of each
investment Fund for which such Member has an account(s) and such Member's
rights and obligations with respect to his Account and Tax Deferred Account
shall continue to be governed by the provisions of the Plan and Trust.
10.3 Adjustment of Members' Accounts. Pursuant to and consistent
with the trust agreement between the Sponsoring Company and the Trustee,
the Account and Tax Deferred Account of each Member shall be adjusted so
that the amount of net income, loss, appreciation or depreciation in the
value of each investment Fund for which such Member has an account(s) for
the period (hereinafter referred to as the "Valuation Period") from the
last previous Valuation Date to the Valuation Date as of which the
valuation is being conducted shall be credited to or charged against the
Member's Fund accounts in the ratio that (i) the balance in each Fund
account of each Member as of the first day of such Valuation Period minus
the amount distributable to such Member from such Fund account during such
Valuation Period bears to (ii) the balance in all such Members' accounts as
of the first day of such Valuation Period minus the total amounts
distributable to all such Members from all such Fund accounts during such
Valuation Period.
ARTICLE 11
TERMINATION OF EMPLOYMENT BENEFITS
If a Member incurs a Termination of Employment, such Member (or
Beneficiary in the case of the death of a Member) shall be entitled to
receive a benefit equal to the total amount in the Member's Account and Tax
Deferred Account as determined in accordance with the provisions of Section
13.2 of the Plan. Such benefit shall be paid in a single lump sum or
otherwise in accordance with one of the forms of payment available to such
Member or Beneficiary as set forth in Section 13.3 of the Plan. Such
benefit may also be payable in kind, to the extent that Section 13.4
applies. Notwithstanding anything in the Plan to the contrary and for
distributions before January 1, 2002, if the Member's Termination of
Employment is due to a substantial sale of assets or stock, as described in
Section 2.1 (ae)(i) and (ii) of the Plan, and if such Member has a Tax
Deferred Account at the time of such Termination of Employment, then such
distribution must be made as a lump sum distribution, as defined in Code
Section 401(k)(10)(B), or any successor thereto.
ARTICLE 12
WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
12.1 In-Service Withdrawals. As of any Valuation Date prior to a
Member's Termination of Employment, such Member shall be entitled to
withdraw all or any part of his Account, reduced by the amount of
Participating Company contributions and earnings on such contributions
allocated to such Member's Account during the 24-month period preceding
such Member's withdrawal. Withdrawal by a Member under this Section 12.1
shall only be allowed once during any 12-month period. Withdrawals paid to
Members shall first consist of such Member's after-tax contributions made
before 1987 and still remaining in his Account, exclusive of earnings
allocable thereto. After such amounts are completely exhausted, withdrawals
shall come from after-tax contributions made after 1986, Participating
Company contributions and the earnings allocable to both such
contributions. A Member may elect a withdrawal under this Section 12.1 by
contacting the Trustee in such manner as may be prescribed by the
Sponsoring Company, from time to time. Withdrawals made under this Section
12.1 are payable as a single sum, in cash or in kind, as allowed under
Section 13.4 of the Plan. Notwithstanding anything to the contrary,
consistent with Section 1.1(c), amounts attributable to Participating
Company contributions under Article 7 and allocated to a Member's Account
after December 31,1998 and amounts attributable to what had been the
Member's Restricted Company Match Account shall be distributable to a
Member upon such Member's proper election before Termination of Employment
on or after such Member attains age 59 1/2, reduced by the amount of
Participating Company contributions and earnings on such contributions
allocated to such Member's Account during the 24-month period preceding
such Member's withdrawal.
12.2 In-Service Withdrawals of the Tax Deferred Account. As of any
Valuation Date on or after a Member attains age 59 1/2 and prior to such
Member's Termination of Employment, such Member shall be entitled to
withdraw all or any part of his Tax Deferred Account; provided, however,
that in connection with such withdrawal, such Member also withdraws all of
his Account, reduced by the amount of Participating Company contributions
and earnings on such contributions allocated to such Member's Account
during the 24-month period preceding such Member's withdrawal. Withdrawals
by a Member under this Section 12.2 shall only be allowed once during any
12-month period. Withdrawals paid to Members shall first consist of such
Member's after-tax contributions made before 1987 and still remaining in
his Account, exclusive of earnings allocable thereto, and, after such
amounts are completely exhausted, withdrawals under this Section 12.2 shall
come from after-tax contributions made after 1986, Participating Company
contributions and, finally, Member contributions allocated to such Member's
Tax Deferred Account, including the earnings allocable to all such
contributions. A Member may elect a withdrawal under this Section 12.2 by
contacting the Trustee in such manner as may be prescribed by the
Sponsoring Company, from time to time. Withdrawals under this Section 12.2
are payable as a single sum, in cash or in kind, as allowed under Section
13.4 of the Plan..
12.3 Hardship Withdrawal.
(a) A Member may apply for a withdrawal as of any Valuation
Date on account of hardship (as hereinafter defined in
this Section 12.3) of all or a part of the value of his
Tax Deferred Account that is equal to the amount of his
Tax Deferred Account as of December 31, 1988 plus salary
reduction contributions allocated to such Account after
such date, less the amount of previous hardship
withdrawals hereunder by filing such application in such
form and manner and at such time (prior to the Valuation
Date as of which such hardship withdrawal is to be
effective) as the Sponsoring Company may from time to
time prescribe. An application for a hardship withdrawal
under this Section 12.3 may be submitted only by a Member
who has no balance in his Account or is withdrawing the
entire amount which he is eligible to withdraw under the
provisions of Section 12.1 in conjunction with his
application for a hardship withdrawal. Payment of an
amount withdrawn under this Section 12.3 shall be made in
a lump sum, in cash, as soon as reasonably practicable
after the date on which such withdrawal is approved by
the Sponsoring Company. That portion of such Member's Tax
Deferred Account not withdrawn pursuant to this Section
12.3 shall remain in the Trust Fund in such Member's
investment Fund accounts allocated to his Tax Deferred
Account.
(b) For purposes of this Section 12.3, hardship shall be
determined in the sole discretion and judgment of the
Sponsoring Company in a uniform and nondiscriminatory
manner and shall be deemed to exist, on the basis of an
objective analysis of the relevant facts and
circumstances, only in the case of an immediate and heavy
financial need of the Member. An immediate and heavy
financial need of the Member will be deemed to exist if
the application for withdrawal is on account of:
(i) medical expenses described in Section
213(d) of the Code incurred by the
Member, the Member's Spouse, or any
dependents of the Member (as defined in
Code Section 152);
(ii) the purchase (excluding mortgage
payments) of a principal residence for
the Member;
(iii) the payment of tuition for the next 12
months of post-secondary education for
the Member, Member's spouse or Member's
children or dependents;
(iv) payments necessary to prevent eviction
from the Member's principal residence
or the foreclosure of the mortgage on
that residence;
(v) other events which are adopted by the
Sponsoring Company and which are deemed
immediate and heavy financial needs by
the Commissioner of Internal Revenue
through the publication of revenue
rulings, notices, and other documents
of general applicability; or
(vi) any other set of relevant facts and
circumstances which, in the sole
discretion of the Sponsoring Company,
based upon an objective analysis of the
particular facts and circumstances,
constitutes an immediate and heavy
financial need.
In no event shall an amount withdrawn under this Section
12.3 exceed the amount required to relieve the immediate financial
need created by the hardship or which would be reasonably
available (as determined by the Sponsoring Company) from other
resources of the Member. However, the amount withdrawn under this
Section 12.3 may include the amount reasonably anticipated to be
necessary to pay any local, state, or federal taxes or penalties
resulting from such distribution. To satisfy the Sponsoring
Company that the amount to be withdrawn under this Section 12.3 is
necessary to satisfy the immediate financial need, each Member
applying for a withdrawal under this Section 12.3 shall swear out
a statement before a notary public representing that such need
cannot be relieved:
(A) through reimbursement or compensation
by insurance or otherwise;
(B) by reasonable liquidation of the
Member's assets, to the extent such
liquidation would not itself cause an
immediate and heavy financial need;
(C) by cessation of elective contributions
or employee contributions under the
Plan; or
(D) by other distributions or nontaxable
(at the time of the loan) loans from
plans maintained by the Sponsoring
Company or by any other employer, or by
borrowing from commercial sources on
reasonable commercial terms.
So long as the person who reviews the sworn
representation of the Member applying for a
hardship distribution has no actual knowledge of
facts contrary to such Member's representation,
the Sponsoring Company shall be able to rely on
such representation in making the hardship
distribution under this Section 12.3.
12.4 Repayment of Withdrawn Amounts Prohibited. Repayment of
amounts withdrawn by a Member or Beneficiary pursuant to the provisions of
Article 11 or Article 12 of the Plan, are not permitted.
ARTICLE 13
PAYMENT OF BENEFITS
13.1 Required Distributions.
(a) Effective Date. The provisions of this Section 13.1 are effective
for distributions after December 31, 2002.
(b) Precedence. The requirements of this Section 13.1 will take
precedence over any inconsistent provisions of the Plan.
(c) Incorporation. Distributions that are required by this Section
13.1 are made in accordance with the requirements of section
401(a)(9) of the Code and the regulations thereunder. Those
regulations, as they now exist and as they may be amended, are
incorporated herein by reference and made a part hereof to the
extent such requirements are not otherwise specifically set forth
in the Plan and to the extent such requirements are not in
conflict with any legally permissible provision of the Plan.
Optional provisions allowed by those regulations that are
available under the Plan are specified herein.
(d) Lifetime Distribution Periods. Distributions to a Member during
the Member's life shall commence no later than the Member's
required beginning date specified in (e)(2) of this Section 13.1.
Such distributions shall, as of the first distribution calendar
year, if not made in a single sum to the Member, be made over any
of the following periods (or any combination thereof):
(1) a period certain not extending beyond the life expectancy
of the Member;
(2) a period certain not extending beyond the joint life and
last survivor expectancy of the Member and the Member's
designated beneficiary.
For purposes of this Section 13.1, a Member's designated
beneficiary shall be the Beneficiary designated by the Member
under the Plan. The distribution periods in (1) and (2) of this
paragraph (b) cannot exceed the period allowed for installment
payments in Section 13.3(a) of the Plan.
(e) Latest Date of Payment. Notwithstanding anything in the Plan to
the contrary, the payment of a Member's benefit shall begin not
later than the earlier of:
(1) The 60th day after the later of the close of the Plan
Year in which the Member -
(A) reaches age 65,
(B) completes the 10th anniversary of participation
in the Plan, or
(C) terminates service with the Participating
Company and all Affiliated Companies; or
(2) The Member's required beginning date, which is the later of
(i) April 1 of the calendar year following the calendar year in
which the Member attains age 70 1/2 or (ii) April 1 of the
calendar year after the Member terminates employment. Clause (ii)
shall not apply with respect to a Member that is a 5% owner (as
defined in Code section 416) for the Plan Year in which such
Member attains 70 1/2.
(f) Life Expectancy. For purposes of this Section 13.1, the life
expectancy of an individual shall be based upon the applicable
table in Treas. Reg. ss.1.401(a)(9)-9 using such individual's
birthday in the calendar year in which the determination of life
expectancy is being made. Minimum distributions under this Section
13.1 to a Member during the Member's life and to a Member's
surviving spouse will be based on a recalculation of Member's or
surviving spouse's life expectancy (whichever is applicable). In
all other events, the applicable life expectancy will be reduced
by one for each subsequent year in a distribution period.
(g) Death Distribution Periods.
(1) Commencement. In the event a Member dies before distributions
begin under Section 13.2 of the Plan, the death benefit (if any)
which is payable shall commence pursuant to whichever of the
following applies:
(A) In the event such benefit is payable to a designated
beneficiary who is not such Member's surviving spouse,
such distribution shall commence on or before December 31
of the calendar year following the calendar year in which
the Member died.
(B) In the event that such benefit is payable to a
designated beneficiary who is such Member's surviving
spouse, such distribution shall commence as of the later
of the date prescribed under (A) above or December 31 of
the calendar year in which the Member would have attained
age 70 1/2.
(C) In the event there is no designated beneficiary, or
if distributions will not be made over the life
expectancy of the designated beneficiary, then the
distribution of such benefit must be commenced and
completed by December 31 of the calendar year containing
the fifth anniversary of such Member's death.
(2) Periods. Death benefits (if any) under the Plan which are
distributable shall be distributed over whichever of the following
periods are applicable:
(A) over a period certain not greater than such
beneficiary's life expectancy;
(B) over a period ending on December 31 of the calendar
year containing the fifth anniversary of the Member's
death; or
(C) if there are death benefits distributable after
lifetime distributions to the Member commenced, such
benefits shall be distributed at least as rapidly as
under the method of distribution being used prior to the
Member's death.
The distribution periods in (A), (B) and (C) of this sub-paragraph
(2) cannot exceed the period allowed for installment payments in
Section 13.3(a) of the Plan.
(h) Death of Spouse. For purposes of (g) above, if the surviving
spouse dies before payments to such spouse begin, then the
provisions of (g)(1)(B) and (g)(2)(A) above shall apply as if such
spouse were the Member.
(i) Method of Compliance. To comply with the provisions of this
Section 13.1, distributions to a Member shall begin no later than
the Member's required beginning date under Section 13.1(c)(2). The
payment that is made by the required beginning date is on account
of the preceding calendar year, which is the first distribution
calendar year. Distributions that are made on account of
subsequent distribution calendar years shall be made no later than
December 31 of the applicable distribution calendar year. The
amount of each such distribution shall be based upon the value of
the Member's Account and Tax Deferred Account as of the last
Valuation Date in the calendar year immediately preceding each
distribution calendar year, increased by any allocations thereto
after such Valuation Date and decreased by any distributions made
after such Valuation Date that occurred in such year of valuation.
The amount of each such distribution shall be determined by the
quotient obtained by dividing the Accounts so determined by the
Member's life expectancy or the Member's and the Member's
designated beneficiary's (if any) life expectancy, as determined
under paragraph (f) of this Section 13.1. Distributions of death
benefits shall comply with the provisions of this Section 13.1 by
being distributed under the other relevant provisions this Article
13, provided that such distributions are not made at a later time
or over a longer period of time than is allowed under this Section
13.1. The distribution of any excess deferral, excess contribution
or excess aggregate contribution pursuant to the provisions of
Sections 6.1, 6.3 or 5.3 shall not act to reduce the amount of the
distribution otherwise required under this Section 13.1.
Distributions made under this paragraph (g) of Section 13.1 shall
be made first from the portion of a Member's Account consisting of
such Member's after-tax contributions made before 1987, exclusive
of any earnings allocable thereto, to the extent that such Member
has such contributions remaining in his Account, until exhausted,
with any additional distributions to come first from such Member's
remaining after-tax contributions in his Account, such Member's
contributions that were allocable to his Tax Deferred Account,
Participating Company contributions in such Member's Account, and
finally, the Participating Company contributions in such Member's
Restricted Company Match Account and the earning allocable to all
these types of contributions.
13.2 Termination of Employment Benefits.
(a) General. The Sponsoring Company shall cause to be made
distribution of the benefits payable to a Member or his
Beneficiary (in the event of the Member's death) upon
Termination of Employment, based upon the value of such
Member's Account and Tax Deferred Account as of the
Valuation Date coincident with or immediately following
the later of (i) the date on which such Member's
Termination of Employment occurs or (ii) the date on
which the Member files a claim for such benefits under
such administrative procedures as may be prescribed by
the Sponsoring Company, from time to time. Distributions
under this Article 13 shall first be charged against the
remaining after-tax contributions in the Member's Account
that were made prior to 1987, exclusive to any earnings
allocable thereto, and then charged against such sources
as prescribed under Section 10.1 of the Plan.
(b) Consent. If the value of a Member's Account, Tax Deferred
Account and Restricted Company Match Account exceeds
$5,000 at the time when such Member is entitled to a
distribution under paragraph (a) of this Section 13.2 of
the Plan, then no part of such benefit may be distributed
to him prior to his attainment of 65, unless he consents
to the distribution within the 90-day period prior to the
first day on which all events have occurred which entitle
such Member to such distribution. The filing by such
Member of a claim or other application for the
distribution of his benefit hereunder shall be deemed to
constitute such a consent for payment. However, if the
value of a benefit to be distributed under paragraph (a)
of this Section 13.2 is equal to or less than $5,000,
then such benefit shall be distributed to the individual
entitled thereto, in a single sum, as soon as is
reasonably practical. The distribution of any excess
deferral, excess contribution or excess aggregate
contribution pursuant to the provisions of Sections 6.1,
6.3 or 5.3 shall not be subject to the requirements of
this paragraph (b). For purposes of this paragraph (b),
any rollover contributions to the Plan and any direct
transfers of benefits to the Plan by or with respect to a
Member shall be included in determining if a benefit is
equal to, less than or greater than $5,000.
13.3 Methods of Payment of Termination of Employment Benefits. The
Sponsoring Company shall cause to be made a distribution of benefits
pursuant to Section 13.2 of the Plan in accordance with one of the
available methods of distribution set forth in this Section 13.3, as
elected by the Member (or Beneficiary in the case of the death of a Member)
in such form and manner and at such time (not later than 30 days after such
Member's Termination of Employment except as otherwise provided in
paragraph (b) of this Section 13.3 and in paragraph (b) of Section 13.2) as
the Sponsoring Company may from time to time prescribe. The available
methods of distribution are as follows:
(a) Installment Payments or Lump Sum Distribution.
(1) Subject to the limitations described in Section
13.1 of the Plan, benefits may be paid in the
form of one or more monthly, quarterly or annual
installments over a fixed number of calendar
years comprising not less than 1 calendar year,
as elected by the Member or Beneficiary.
Notwithstanding anything to the contrary
contained herein, a Beneficiary who is not the
surviving spouse of the deceased member cannot
elect installments for a period extending beyond
December 31 of the calendar year containing the
fifth anniversary of the Member's death. In the
event that an election of a stated number of
installments over a stated number of years is in
effect, each such installment shall equal the
value of the Member's Account and Tax Deferred
Account as of the Valuation Date as of which
such installment is paid multiplied by a
fraction whose numerator is one and whose
denominator is the number of specified
installments remaining in such specified number
of years. A Member (or Beneficiary) may also
elect to have a designated dollar amount or
percentage of the total of the Member's Account
and Tax Deferred Account distributed in each
elected installment, determined as of the
Valuation Date as of which such installment is
paid. In respect of all then unpaid amounts in
his Account and Tax Deferred Account, a Member
(or Beneficiary) may make an election to change
his prior election under this sub-paragraph (1)
by filing such change in such form and manner
and at such time as the Sponsoring Company may
from time to time prescribe.
(2) Death of a Member Before Receiving Complete
Payment of his Account. Subject to the
limitations described in Section 13.1 of the
Plan, in the event of the death of a Member
before receiving all installments under the
provisions of sub-paragraph (1) of this
paragraph (a) to which he would otherwise become
entitled, such Member's Beneficiary may elect,
at such time and in such manner as may be
prescribed, from time to time, by the Sponsoring
Company, to receive one or more payments in
respect of all then unpaid amounts in such
Member's Account and Tax Deferred Account
pursuant and subject to the provisions of
sub-paragraph (1) of this paragraph (a).
(b) Annuity and other Preserved Optional Benefits. Effective
January 1, 2001, the annuity optional form of benefit
that was preserved for certain Members under the
provisions of this Section 13.3(b) as in effect before
January 1, 2001, and any other optional form of benefit
that was preserved under the terms of the Plan before
January 1, 2001, that differs from those available under
13.3(a) shall be completely eliminated, consistent with
Treas. Reg. ss.1.411(d)-4, Q&A-2(e). The foregoing
described elimination of certain optional forms of
distribution shall not apply to an affected Member whose
benefit is distributed before the earlier of (i) the 90th
day after the Member is furnished a summary of material
modifications or summary plan description that describes
the deletion of the otherwise preserved optional forms of
distribution; or; (ii) January 1, 2002. An affected
Member for these purposes is a Member whose Account
balance, in part or in total, was subject to the terms of
the Plan as in effect prior to January 1, 2001,
addressing preserved optional forms of benefit.
Notwithstanding anything to the contrary, the provisions
of this paragraph (b) of Section 13.3 of the Plan shall
not act to eliminate any optional form that is needed to
comply with section 401(a)(9) of the Code, as reflected
in Section 13.1 of the Plan.
13.4 Distribution in Kind.
(a) General. A Member or Beneficiary who (i) receives a
distribution pursuant to the provisions of Article 11 and
Section 13.2 of the Plan, or (ii) elects to withdraw all
or a part of his interest in the Plan under Section 12.1
or Section 12.2 of the Plan, may elect, in such form and
manner and at such time as the Sponsoring Company may
from time to time prescribe, to receive (instead of cash)
all or a part of the distributable value of such Member's
accounts in Fund A whole shares and cash in lieu of any
fractional shares of the stock of the Sponsoring Company
to be distributed from the Plan. The number of whole
shares of such stock distributable hereunder shall be
determined based upon the unit value of such stock or
debentures used to determine the value of such Member's
accounts for purposes of distribution from the Plan.
13.5 Lost Member/Beneficiary. Notwithstanding any other provision
of the Plan, in the event the Sponsoring Company, after reasonable effort,
is unable to locate a Member or Beneficiary to whom a benefit is payable
under the Plan, such benefit shall be forfeited; provided, however, that
such benefit shall be reinstated (in an amount equal to the amount
forfeited) upon proper claim made by such Member or Beneficiary prior to
termination of the Plan. Benefits forfeited under this Section 13.5 shall
be used to reduce the Sponsoring Company contributions under Article 7 of
the Plan or, if there are no such contributions, shall be returned to the
Sponsoring Company. Restorations under this Section 13.5 shall be made by
way of special Sponsoring Company contribution or by way of offsetting
forfeitures then to be applied to reduce aggregate Sponsoring Company
contributions.
13.6 Direct Rollovers.
(a) General. Subject to the exceptions and limitations
contained in this Section 13.6, a Member, an alternate
payee under an approved qualified domestic relations
order (as defined in Code Section 414(p)) who is a
Member's former spouse or a deceased Member's surviving
spouse may elect to have all, or any portion (in
increments of 10%) of an Eligible Rollover Distribution
(as defined in (f) below) to which such individual is
entitled transferred from this Plan to an Eligible
Retirement Plan (as defined in (f) below).
(b) Exceptions and Limitations. Among the exceptions,
limitations and conditions applied to elections under
paragraph (a) of this Section 13.6 are the following:
(1) Such elections cannot direct that all or any
part of an Eligible Rollover distribution be
transferred to, among or between more than one
Eligible Retirement Plan.
(2) Such elections may be revoked, in writing,
except that such elections shall become
irrevocable at the point in time when it becomes
administratively impractical to stop the
transfer from being made in accordance with such
election, as determined by the Plan
Administrator.
(3) In the case of an involuntary cash-out
distribution of a benefit equal to or less than
$5,000 under Section 13.2(b) of the Plan, or in
any other case when the consent requirements of
Section 13.2(b) do not apply, the Member or
other applicable distributee (as identified in
paragraph (a) above) shall have 30 days within
which to make an election under paragraph (a)
after receiving the notice referred to in
paragraph (c). If such election is not made
within 30 days, the benefit shall be distributed
to the distributee as soon as administratively
practical. If such election is made within 30
days, then the transfer to the Eligible
Retirement Plan may be made as soon as
administratively practical. In the event that a
distribution is subject to the consent
requirements of Section 13.2(b), then the Member
may affirmatively elect to receive a
distribution or to have an election under
paragraph (a) implemented within 30 days of
receiving the notice referred to in paragraph
(c); provided that information is given
explaining that the Member has at least 30 days
to receive a distribution.
(c) Time and Method of Transfer. Within a reasonable period
of time before distributing an Eligible Rollover
Distribution, the Plan Administrator shall provide the
notice required under Code Section 402(f) in any manner
allowed by Treasury regulation and provide an opportunity
to make the election provided under paragraph (a).
Transfers made pursuant to such an election may be
accomplished in any reasonable manner, as determined by
the Plan Administrator, from time to time, in accordance
with applicable Treasury regulations.
(d) Series of Payments. In the event a series of payments may
otherwise be made under the terms of the Plan each of
which would be an Eligible Rollover Distribution, an
election (or failure to elect) under paragraph (a) with
regard to the first payment in such series shall control
and be applied to all remaining payments in such series,
unless the distributee revokes, changes or otherwise
modifies his or her prior decision regarding the options
available under paragraph (a) in such manner, at such
time and subject to such conditions as the Plan
Administrator may prescribe from time to time.
(e) Administration. The Plan Administrator shall, from time
to time, prescribe such rules as it deems convenient or
desirable to administer the provisions of this Section
13.6. This may include, but not be limited to, the
following:
(1) Prescribing forms for making the election
described in paragraph (a);
(2) Requiring the distributee to furnish information
regarding the identity, status and location of
the Eligible Retirement Plan;
(3) Requiring the Eligible Retirement Plan
designated by the distributee to provide certain
information about itself; and
(4) Requiring the distributee and/or the Eligible
Retirement Plan to represent and/or certify that
the Eligible Retirement Plan is authorized under
law and pursuant to its own terms to accept the
transfer of the Eligible Rollover Distribution.
(f) Definitions. For purposed of this Section 13.6, the
following terms shall have the following definitions:
(1) "Eligible Retirement Plan" shall mean an
individual retirement account described in Code
Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity
plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a)
that accepts Eligible Rollover Distributions;
provided, however, that, with respect to a
distributee who is a deceased Member's surviving
spouse, only an individual retirement account or
an individual retirement annuity may be an
Eligible Retirement Plan. For distributions
after December 31, 2001, an Eligible Retirement
Plan shall also mean an annuity contract
described in section 403(b) of the Code and an
eligible plan under section 457(b) of the Code
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 that agrees to
separately account for amounts transferred into
such plan from this Plan. Also for distributions
after December 31, 2001, the definition of an
Eligible Retirement Plan shall apply without
limitation 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 relations order, as defined in section
414(p) of the Code.
(2) "Eligible Rollover Distribution" shall mean any
distribution of all or part of a Member's
benefit under the Plan, except for the
following:
(A) Substantially equal periodic payments,
not less frequently than annually, made
over (i) the life or life expectancy of
the distributee, (ii) the joint lives
or joint life expectancies of the
distributee and a beneficiary, or (iii)
a period of 10 or more years;
(B) The portion of a distribution required
under Code Section 401(a)(9);
(C) The portion of any distribution
excluded from gross income, without
regard to any exclusion for net
unrealized appreciation on employer
securities;
(D) The distribution of excess deferrals,
excess contributions and excess
aggregate contributions, as well as the
income or loss allocable to such
distributions and the return of
elective deferrals that were made under
Section 401(k) of the Code with any
allocable income or loss in order to
satisfy the limits imposed by Section
415 of the Code;
(F) Other types or portions of
distributions identified under Treasury
regulations or in Internal Revenue
Service pronouncements.
For purposes of (A) immediately above, the
determination of whether payments are
substantially equal for a specified period is
made when such payments first begin without
regard to contingencies or modifications that
have not yet occurred. Notwithstanding any other
provision, the following shall apply in
determining whether a distribution is an
Eligible Rollover Distribution:
(I) Effective for distributions
after December 31, 1998, the
portion of a distribution that
is a hardship distribution as
defined in Code section
401(k)(2)(B)(i)(IV) is not
part of an Eligible Rollover
Distribution.
(II) Effective for distributions
after December 31, 2001, any
amount that is distributed on
account of hardship shall not
be an Eligible Rollover
Distribution and the
distributee cannot elect to
have any portion of such a
distribution paid directly to
an Eligible Retirement Plan.
(III) Effective for distributions
after December 31, 2001, a
portion of a distribution
shall not fail to be an
Eligible Rollover Distribution
merely because the portion
consists of after tax employee
contribution that are not
includible in gross income.
However, such portion may be
transferred only to an
individual retirement account
or annuity described in
section 408(a) or (b) of the
Code, or to a qualified
defined contribution plan
described in section 401(a) or
403(a) of the Code that agrees
to separately account for
amounts so transferred,
including separately
accounting for the portion of
such distribution that is
includible in gross income and
the portion of such
distribution that is not so
includible.
ARTICLE 14
TRUST FUND
14.1 Trust Fund. All the funds of the Plan shall be held by the
Trustee appointed from time to time by the Sponsoring Company, in one or
more trusts under a trust agreement entered into between the Trustee and
the Sponsoring Company for use in providing the benefits of the Plan and
paying any expenses of the Plan not paid directly by the Participating
Companies. The fact that separate accounts are maintained for each Member
shall not be deemed to segregate for such Member, or to give such Member
any direct interest in, any specific asset or assets in the Trust Fund.
14.2 Administration of the Trust Fund and Funding Policy. Except
as otherwise provided in the Plan or the trust agreement and subject to the
direction and control of the Sponsoring Company (or other fiduciary
identified by the Sponsoring Company for such purpose), the Trustee shall
have exclusive authority and discretion to manage and control the assets of
the Trust Fund. The Sponsoring Company shall have the authority to appoint
an Investment Manager to manage (including the power to acquire and dispose
of) all or any part of the assets of the Trust Fund. The Sponsoring Company
shall be responsible for establishing a funding policy and method
consistent with the objectives of the Plan and the requirements of Title I
of ERISA.
14.3 Benefits Payable Solely by Trust. All benefits payable under
the Plan shall be paid or provided for solely from the Trust. The
Participating Companies assume no liability or responsibility therefor.
14.4 Exclusive Benefit of Trust Fund. Except as otherwise allowed
under Section 403(c)(2)(A) and (C) of ERISA, the assets of the Trust Fund
shall not inure to the benefit of any Participating Company and shall be
held for the exclusive purposes of providing benefits to Members and their
Beneficiaries and defraying reasonable expenses of administering the Plan.
ARTICLE 15
ADMINISTRATION OF THE PLAN
15.1 Plan Administrator and Administration of the Plan. The
Sponsoring Company shall be the "administrator" (as defined in Section
3(16) of ERISA) of the Plan and shall be a named fiduciary for the Plan.
Any reference to the Plan Administrator in the Plan shall be deemed to be a
reference to the Sponsoring Company, unless the context clearly indicates
otherwise. The Sponsoring Company shall, in its capacity as administrator,
be responsible for the performance of all reporting and disclosure
obligations under ERISA and all other obligations required or permitted to
be performed by the Plan administrator under ERISA. The Sponsoring Company
shall have all powers necessary and the discretion necessary and convenient
to administer the Plan in accordance with its terms, including, but not
limited to, all necessary, appropriate and convenient power and authority
to interpret, administer and apply the provisions of the Plan with respect
to all persons having or claiming to have any rights, benefits,
entitlements or obligations under the Plan. This includes, without
limitation, the ability to construe and interpret provisions of the Plan,
make determinations regarding law and fact, reconcile any inconsistencies
between provisions in the Plan or between provisions of the Plan and any
other statement concerning the Plan, whether oral or written, supply any
omissions to the Plan or any document associated with the Plan, and to
correct any defect in the Plan or in any document associated with the Plan.
All such interpretations of the Plan and documents associated with the Plan
and questions concerning its administration and application, as determined
by the Sponsoring Company, shall be binding on all persons having an
interest under the Plan. Such administrator of the Plan shall be the
designated agent for service of legal process.
15.2 Delegation of Responsibility. The Sponsoring Company may
delegate (and may give to its delegatees the authority to redelegate) to
any person or persons any responsibility, power, or duty whether
ministerial or fiduciary; provided, however, no responsibility in the Plan
or trust agreement to manage or control the assets of the Plan (other than
a power to appoint an Investment Manager) may be delegated to anyone other
than a fiduciary identified pursuant to Section 15.2 of the Plan. The
Sponsoring Company, the Trustee or any delegatee, redelegatee or designee
of either of them may employ one or more persons to render advice or
perform ministerial duties with regard to any responsibility such fiduciary
has under the Plan.
15.3 Liability. The board of directors of the Sponsoring Company
and any delegatee, redelegatee or designee (other than any Investment
Manager or Trustee), and any employee of a Participating Company or
Affiliated Company serving the Plan in any capacity within the scope of his
employment shall be free from all liability for their acts and conduct in
the administration of the Plan and Trust except for acts of willful
misconduct; provided, however, that the foregoing shall not relieve any of
them from any responsibility or liability for any responsibility,
obligation or duty that they may have pursuant to ERISA.
15.4 Indemnity by Participating Companies. In the event and to the
extent not insured against by any insurance company pursuant to provisions
of any applicable insurance policy, the Participating Companies shall
indemnify and hold harmless any person from any and all claims, demands,
suits or proceedings made or threatened by reason of the fact that he, his
testator or intestate (i) is or was a director or officer of a
Participating Company or an Affiliated Company or (ii) is or was an
employee of a Participating Company or an Affiliated Company who serves or
served the Plan or Trust in any capacity within the scope of his employment
and as a delegatee (or redelegatee) of the Sponsoring Company, provided
such person acted, in good faith, in what he reasonably believed to be the
best interest of the Plan. Expenses against which such person may be
indemnified hereunder include, without limitation, the amount of any
settlement or judgment, costs, counsel fees and related charges reasonably
incurred in connection with a claim asserted or proceeding brought or
settlement thereof. A Participating Company from which indemnification may
be sought hereunder may, at its expense, settle any such claim, demand,
suit or proceeding made or threatened when such settlement appears to be in
the best interest of such Participating Company. This Section 15.4 shall
not be construed to limit whatever rights of indemnity to which the persons
specified in this Section 15.4 and such other persons not described in the
foregoing provisions of this Section 15.4 who are or were (or claim under
or through) employees of a Participating Company or an Affiliated Company
may be entitled by law, corporate by-law or otherwise.
15.5 Payment of Fees and Expenses. The Trustee, the board of
directors of the Sponsoring Company and any delegatee, redelegatee or
designee shall be entitled to payment from the Trust Fund for all
reasonable fees, costs, charges and expenses incurred by them in the course
of performance of their duties under the Plan and the Trust, except to the
extent that such fees and costs are paid by any Participating Company or
Affiliated Company. Notwithstanding any other provision of the Plan or
Trust, no person who is a "disqualified person" within the meaning of
Section 4975(e)(2) of the Code, or a "party in interest" within the meaning
of Section 3(14) of ERISA and who receives full-time pay from any
Participating Company or Affiliated Company shall receive compensation from
the Trust Fund, except for reimbursement of expenses properly and actually
incurred.
15.6 Voting of Shares. All voting rights with respect to common
stock in Fund A under Section 8.1 held by the Trustee shall be exercised by
the Trustee only as directed by the Members (and by Beneficiaries of
deceased Members who have not received a distribution of their benefits,
and such Beneficiaries shall be treated as Members for purposes of applying
the provisions of this Section 15.6) having all or a part of their Accounts
and/or Tax Deferred Accounts invested in such Fund A, acting in their
capacity as named fiduciaries (within the meaning of ERISA Section 402) in
accordance with the provisions of this Section 15.6. Before each annual or
special meeting of shareholders of the Sponsoring Company (or such other
company which issued such securities, if applicable) there shall be sent to
each such Member a copy of the proxy solicitation material sent generally
to shareholders for such meeting, together with a form to be returned to
the Trustee, requesting instructions from the Member, acting in his
capacity as a named fiduciary, to the Trustee on how to separately vote (I)
the stock allocable to that part of such Member's Account and/or Tax
Deferred Account in Fund A , and on how to separately vote (II) a
proportionate share (based on the stock allocable to that part of such
Member's Account and/or Tax Deferred Account in Fund A) of the Non-Directed
Securities (defined below). For purposes of this Section 15.6, Non-Directed
Securities shall mean that common stock allocated to Fund A for which
instructions are not timely received by the Trustee. Upon receipt of such
instructions, the Trustee shall vote such shares as instructed. In lieu of
voting fractional shares as instructed by Members, the Trustee may vote the
combined fractional shares of such securities to the extent possible to
reflect the directions of Members with allocated fractional shares. The
number of votes to which a Member's direction under clause (II), above,
applies shall be the number of votes equal to the total number of votes
attributable to the sum of the votes related to the common stock referred
to in said clause (II) multiplied by a fraction, the numerator of which is
the number of shares of common stock allocable to that part of such
Member's Account and/or Tax Deferred Account in Fund A and the denominator
of which is the total number of shares of common stock allocable to that
part of all such Members' Accounts and/or Tax Deferred Accounts in Fund A
who have timely provided instructions to the Trustee with respect to the
common stock referred to in said clause (II). For purposes of this Section
15.6, fractional shares shall be rounded to the nearest 1/1,000th of a
share. Except to the extent required by law, the instructions received by
the Trustee from a Member under this Section 15.6 shall be held in
confidence by the Trustee and any contractor retained by the Trustee to
assist in tabulation of votes and shall not be divulged or released to the
Sponsoring Company, to any officer of the Sponsoring Company, to any
employee of the Sponsoring Company or to any other person, except in the
aggregate.
ARTICLE 16
BENEFIT CLAIMS PROCEDURE
16.1 Initial Claim - Notice of Denial. If any claim for benefits
(within the meaning of section 503 of ERISA) is denied in whole or in part,
the Sponsoring Company will provide written notification of the denied
claim to the Member or Beneficiary, as applicable, (hereinafter referred to
as the claimant) in a reasonable period, but not later than 90 days after
the claim is received. The 90-day period can be extended under special
circumstances. If special circumstances apply, the claimant will be
notified before the end of the 90-day period after the claim was received.
The notice will identify the special circumstances. It will also specify
the expected date of the decision. When special circumstances apply, the
claimant must be notified of the decision not later than 180 days after the
claim is received.
The written decision will include:
(a) The reasons for the denial.
(b) Reference to the Plan provisions on which the denial is
based. The reference need not be to page numbers or to
section headings or titles. The reference only needs to
sufficiently describe the provisions so that the
provisions could be identified based on that description.
(c) A description of additional materials or information
needed to process the claim. It will also explain why
those materials or information are needed.
(d) A description of the procedure to appeal the denial,
including the time limits applicable to those procedures.
It will also state that the claimant may file a civil
action under section 502 of ERISA (ERISA - ss.29 U.S.C.
1132). The claimant must complete the Plan's appeal
procedure before filing a civil action in court.
If the claimant does not receive notice of the decision on the claim within
the prescribed time periods, the claim is deemed denied. In that event the
claimant may proceed with the appeal procedure described below.
16.2 Appeal of Denied Claim. The claimant may file a written
appeal of a denied claim with the Sponsoring Company in such manner as
determined from time to time. The Sponsoring Company is the named fiduciary
under ERISA for purposes of the appeal of the denied claim. The Sponsoring
Company may delegate its authority to rule on appeals of denied claims and
any person or persons or entity to which such authority is delegated may
re-delegate that authority. The appeal must be sent at least 60 days after
the claimant received the denial of the initial claim. If the appeal is not
sent within this time, then the right to appeal the denial is waived.
The claimant may submit materials and other information relating to the
claim. The Sponsoring Company (or its delegate) will appropriately consider
these materials and other information, even if they were not part of the
initial claim submission. The claimant will also be given reasonable and
free access to or copies of documents, records and other information
relevant to the claim.
Written notification of the decision on the appeal will be delivered to the
claimant in a reasonable period, but not later than 60 days after the
appeal is received. The 60-day period can be extended under special
circumstances. If special circumstances apply, the claimant will be
notified before the end of the 60-day period after the appeal was received.
The notice will identify the special circumstances. It will also specify
the expected date of the decision. When special circumstances apply, the
claimant must be notified of the decision not later than 120 days after the
appeal is received.
Special rules apply if the Sponsoring Company designates a committee as the
appropriate named fiduciary for purposes of deciding appeals of denied
claims. For the special rules to apply, the committee must meet regularly
on at least a quarterly basis.
When the special rules for committee meetings apply the decision on the
appeal must be made not later than the date of the committee meeting
immediately following the receipt of the appeal. If the appeal is received
within 30 days of the next following meeting, then the decision must not be
made later than the date of the second committee meeting following the
receipt of the appeal.
The period for making the decision on the appeal can be extended under
special circumstances. If special circumstances apply, the claimant will be
notified by the committee or its delegate before the end of the otherwise
applicable period within which to make a decision. The notice will identify
the special circumstances. It will also specify the expected date of the
decision. When special circumstances apply, the claimant must be notified
of the decision not later than the date of the third committee meeting
after the appeal is received.
In any event, the claimant will be provided written notice of the decision
within a reasonable period after the meeting at which the decision is made.
The notification will not be later than 5 days after the meeting at which
the decision is made.
Whether the decision on the appeal is made by a committee or not, a denial
of the appeal will include:
(a) The reasons for the denial.
(b) Reference to the Plan provisions on which the denial is
based. The reference need not be to page numbers or to
section headings or titles. The reference only needs to
sufficiently describe the provisions so that the
provisions could be identified based on that description.
(c) A statement that the claimant may receive free of charge
reasonable access to or copies of documents, records and
other information relevant to the claim.
(d) A description of any voluntary procedure for an
additional appeal, if there is such a procedure. It will
also state that the claimant may file a civil action
under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132).
If the claimant does not receive notice of the decision on the appeal
within the prescribed time periods, the appeal is deemed denied. In that
event the claimant may file a civil action in court. The decision regarding
a denied claim is final and binding on all those who are affected by the
decision. No additional appeals regarding that claim are allowed.
ARTICLE 17
INALIENABILITY OF BENEFITS
The right of any Member or Beneficiary to any benefit or payment
under the Plan or Trust or to any separate account maintained as provided
by the Plan shall not, to the fullest extent permitted by law, be subject
to voluntary or involuntary anticipation, transfer, alienation or
assignment, attachment, execution, garnishment, levy, sequestration or
other legal or equitable process. The foregoing shall not apply to the
extent allowed under Code section 401(a)(13). In the event a Member or
Beneficiary who is receiving or is entitled to receive benefits under the
Plan attempts to assign, transfer or dispose of such right, or if an
attempt is made to subject said right to such process, such assignment,
transfer or disposition shall be null and void. Notwithstanding the
foregoing provisions hereof, expressly permitted are: (i) any arrangement
to which the Sponsoring Company consents for the direct deposit of benefit
payments to any account in a bank, savings and loan association or credit
union, provided such arrangement is not part of an arrangement constituting
an assignment or alienation; (ii) the recovery by the Plan of overpayment
of benefits previously made to a Member or Beneficiary; or (iii) effective
on and after January 1, 1985, the creation, assignment, or recognition of a
right to any benefit payable pursuant to a qualified domestic relations
court order as defined in ERISA. Effective December 1, 1995, and
notwithstanding anything contrary contained in the Plan, any Alternate
Payee who is assigned a Plan benefit pursuant to a qualified domestic
relations order shall, upon the approval of such assignment under such
order by the Plan Administrator or its delegate and after such assignment
is recorded on the records of the Plan maintained by the Trustee, be
entitled to receive a distribution of such assigned benefit as a lump sum,
regardless of whether the Member from whose benefit the assignment was made
is otherwise entitled to receive a distribution under the Plan.
ARTICLE 18
ADOPTION OF PLAN BY OTHER COMPANIES
Any company may, with the approval of the Sponsoring Company,
adopt this Plan pursuant to appropriate written resolutions of the board of
directors or other managing body or delegatee of such company and by
executing such documents with the Trustee as may be necessary to make such
company a party to the Trust as a Participating Company. A company which
adopts the Plan is thereafter a Participating Company with respect to its
Employees for purposes of the Plan. A company that adopted the Plan shall
cease to be a Participating Company when any of the following happens:
(a) Such company's managing body adopts actions designed to
end such company's participation in this Plan;
(b) Such company ceases active business or ceases to have
active employees that meet the requirements to be Members
of the Plan and the Sponsoring Company takes action to
memorialize the effective date such company ceased to be
a Participating Company; or
(c) Such other reasonable action taken by the Sponsoring
Company and the Participating Company intended to end
said Participating Company's status as a Participating
Company.
ARTICLE 19
WITHDRAWAL OF PARTICIPATING COMPANY FROM PLAN
19.1 Notice of Withdrawal. Subject to provisions of Section 19.4,
any Participating Company, with the consent of the Sponsoring Company, may
at any time withdraw from the Plan upon giving the Sponsoring Company and
the Trustee at least 30 days notice in writing of its intention to
withdraw.
19.2 Segregation of Trust Assets Upon Withdrawal. Upon the
withdrawal of a Participating Company pursuant to Section 19.1, the Trustee
shall segregate the allocable share of the assets in the Trust Fund, the
value of which shall equal the total credited to the accounts of Members
employed by the withdrawing Participating Company. Such segregation shall
occur upon a Valuation Date or such other date as may be specified by the
Sponsoring Company.
19.3 Exclusive Benefit of Members. Except as otherwise allowed by
law, neither the segregation and transfer of the Trust assets upon the
withdrawal of a Participating Company nor the execution of a new agreement
and declaration of trust by such withdrawing Participating Company shall
operate to permit any part of the Trust Fund to be used for or diverted to
purposes other than for the exclusive benefit of the Members and their
Beneficiaries.
19.4 Applicability of Withdrawal Provisions. The withdrawal
provisions contained in this Article 19 shall be applicable only if the
withdrawing Participating Company continues to cover its Members and
eligible Employees in another defined contribution plan and trust qualified
under Sections 401 and 501 of the Code. Otherwise, the termination
provisions of Article 21 of the Plan shall apply.
ARTICLE 20
AMENDMENT OF THE PLAN
The Sponsoring Company may, by and through actions of its board of
directors or any delegatee thereof, amend the Plan with respect to any or
all Participating Companies at any time, and from time to time, by action
of the Board of Directors of the Sponsoring Company or its delegatee;
provided, however, except as otherwise allowed by law, no such amendment
shall operate to permit any part of the Trust Fund to be used for or
diverted to purposes other than the exclusive benefit of the Members and
their Beneficiaries.
ARTICLE 21
PERMANENCY OF THE PLAN AND PLAN TERMINATION
21.1 Merger or Consolidation of Plan. The Plan may not be merged
or consolidated with, nor may its assets or liabilities be transferred to,
any other plan, unless each Member would (if the Plan then terminated)
receive a benefit immediately after the merger, consolidation, or transfer
which is equal to or greater than the benefit he would have been entitled
to receive immediately before the merger, consolidation, or transfer (if
the Plan had then terminated).
21.2 Right to Terminate Plan. The Sponsoring Company reserves the
right to terminate either the Plan or both the Plan and the Trust as to any
or all Participating Companies.
21.3 Discontinuance of Contributions. Whenever the Sponsoring
Company determines that it is impossible or inadvisable for any
Participating Company to make further contributions as provided in the
Plan, such Participating Company may, without terminating the Plan and/or
Trust, temporarily or permanently discontinue all further contributions by
such Participating Company. Thereafter, the Sponsoring Company and the
Trustee shall continue to administer all the provisions of the Plan which
are necessary and remain in force, other than the provisions relating to
contributions by such Participating Company. However, the Trust shall
remain in existence with respect to such Participating Company and all of
the provisions of the Trust Agreement shall remain in force.
21.4 Termination of Plan and Trust. If the Sponsoring Company
determines to terminate (as to any Participating Company) the Plan and
Trust completely, they shall be terminated insofar as they are applicable
to such Participating Company as of the date of such termination. Upon such
termination of the Plan and Trust, after payment of all expenses and
proportional adjustment of accounts of Members employed by such
Participating Company to reflect such expenses, Trust Fund profits or
losses, and allocations of any previously unallocated funds to the date of
termination, such Participating Company's Members shall be entitled to
receive the amount then credited to their respective Accounts and Tax
Deferred Accounts in the Trust Fund. However, the occurrence of such a
termination shall not, in and of itself, entitle Members to receive a
distribution of their Tax Deferred Accounts. Such entitlement shall only
occur if neither the Sponsoring Company nor any Affiliated Company maintain
a successor plan, other than an ESOP satisfying the requirements of Section
4975(e)(7). For this purpose, a successor plan is any defined contribution
plan maintained by the Sponsoring Company or an Affiliated Company, except
that such a plan shall not be deemed to be a successor plan if at all times
during the 24 month period preceding the 12 month period before the
termination of this Plan fewer than 2% of the Employees who were eligible
to participate in this Plan are eligible for such other plan. If a Member
with a Tax Deferred Account is entitled to a distribution upon termination
of the Plan because of the satisfaction of the foregoing requirements, then
any distribution to such a Member must be made as a lump sum distribution,
as defined in Code Section 401(k)(10)(B), or any successor thereto. The
Sponsoring Company, in its sole discretion, may cause payment of such
amount to be made in cash, or in assets of the Trust Fund. Any amounts
unallocable to such Participating Company's Members shall be returned to
the Sponsoring Company.
ARTICLE 22
MISCELLANEOUS
22.1 Status of Employment Relations. Nothing herein contained
shall be deemed (i) to give to any employee the right to be retained in the
employ of a Participating Company; (ii) to affect the right of a
Participating Company to terminate or discharge any employee at any time;
(iii) to give a Participating Company the right to require any employee to
remain in its employ; or (iv) to affect any employee's right to terminate
his employment at any time.
22.2 Applicable Law. To the extent that State law shall not have
been preempted by ERISA or any other laws of the United States, the Plan
shall be construed, regulated, interpreted and administered according to
the laws of the Commonwealth of Kentucky.
22.3 Legal Effect. The Plan described herein shall amend and
supersede, as of January 1, 2003, and at such other individual dates as
indicated throughout, all provisions in the Plan as in effect on December
31, 2002, except as otherwise provided herein and further excepting that
the rights of former Members who terminated employment or retired prior to
January 1, 2003, or made a total withdrawal prior to January 1, 2003 while
employed, shall be governed by the terms of the Plan in effect at the time
of termination of employment or retirement, or in effect on December 31,
2002 in the case of total withdrawals while employed, as the case may be,
unless otherwise provided herein.
22.4 Military Leave. Notwithstanding any provisions of the Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code section
414(u) and all other applicable law. A Member who returns to work from
qualified military service may make up contributions missed while on
military leave. These contributions are in addition to other allowable
contributions under the Plan. The Member has until the earlier of (1) the
period equal to three times the period of qualified military service or (2)
five years. The Participating Company contributions that would have been
paid with respect to such Member contributions under the provisions of
Article 7 of the Plan at the particular time applicable will also be
contributed with respect to a Member's make-up contributions. These
Participating Company contributions are in addition to any other such
contributions made with respect to the Member's contributions for the
present Plan Year. While on a qualified military leave a Member is
considered to earn the rate of Compensation he would have received if he
had not been engaged in qualified military service. If this cannot be
determined with reasonable certainty, then the Member's deemed Compensation
would be the average of the Member's Compensation for the 12 months
preceding the qualified military service (or period of employment if
shorter than 12 months).
ARTICLE 23
TENDER OFFER
23.1 Applicability. The provisions of this Article 23 shall apply
in the event any person, either alone or in conjunction with others, makes
a tender offer, or exchange offer, or otherwise offers to purchase or
solicits an offer to sell to such person one percent or more of the
outstanding shares of common stock of the Sponsoring Company (herein
jointly and severally referred to as a "tender offer").
23.2 Instructions to Trustee. All decisions with respect to tender
offers with respect to the shares of common stock of the Sponsoring Company
held in Fund A under Section 8.1 of the Plan shall be exercised by the
Trustee only as directed by the Members (and by Beneficiaries of deceased
Members who have not received a distribution of their benefits, and such
Beneficiaries shall be treated as Members for purposes of applying the
provisions of this Article 23) who have all or a part of their Accounts
and/or Tax Deferred Accounts invested in Fund A, acting in their capacity
as named fiduciaries (within the meaning of ERISA Section 402) in
accordance with the provisions of this Article 23. In the event a tender
offer is received by the Trustee (including a tender offer for shares of
such common stock subject to Section 14 (d) (1) of the Securities Exchange
Act of 1934 or subject to Rule 13e-4 promulgated under such Act, as those
provisions may be amended from time to time), in accordance with Section
23.1, to purchase or exchange any such shares of common stock held by the
Trustee, the Trustee shall inform each Member who has all or a part of his
Account and/or Tax Deferred Account invested in Fund A, in writing, of the
terms of the tender offer as soon as practicable and shall furnish to each
such Member such documents as are prepared by any person and provided to
shareholders of the Sponsoring Company pursuant to the Securities Exchange
Act of 1934 and a form to each such Member to be returned to the Trustee
requesting instructions from such Member, acting in his capacity as a named
fiduciary, on whether or not to sell, offer to sell, exchange or otherwise
dispose of the common stock allocable to that part of such Member's Account
and/or Tax Deferred Account in Fund A (determined as of the most recent
Valuation Date for which information is readily available). Upon receipt of
such separate instructions, the Trustee shall act upon the tender offer as
instructed. For purposes of this Article 23, fractional shares shall be
rounded to the nearest 1/1,000th of a share. The instructions referred to
herein shall be in such form and shall be filed in such manner and at such
time as the Sponsoring Company and the Trustee may prescribe.
23.3 Trustee Action on Member Instructions. The Trustee shall
sell, offer to sell, exchange or otherwise dispose of the common stock held
in Fund A under the Trust as directed by Members through their
instructions, as provided in Section 23.2. The number of shares to be sold,
offered for sale, exchanged or otherwise disposed of by the Trustee under
this Section 23.3 pursuant to a Member's direction shall reflect the value
of such Member's Account and/or Tax Deferred Account invested in Fund A
(excluding all investments in Fund A other than the shares to be sold,
offered or exchanged) determined as of the latest Valuation Date for which
record processing has been completed at the time of the Trustee's
disposition of shares. Each Member directing the Trustee to dispose of his
allocable shares under this Article 23 shall also be deemed to have elected
a transfer of the total value of his Account and/or Tax Deferred Account in
Fund A to a new investment fund under the Plan. For purposes of this
Article 23, such deemed transfers shall be effective as of and shall use
values as of the Valuation Date used to determine the number of shares to
be sold, offered for sale, exchanged or otherwise disposed of by the
Trustee under this Section 23.3. Any gain or loss, whether realized or
unrealized, on the directed disposition of shares shall be allocated (in
accordance with the provisions of Section 10.3) among the Members who have
directed such a disposition under this Article 23. The proceeds derived
from dispositions directed under this Article 23 shall be invested by the
Trustee in accordance with Section 23.4. Except for the provisions of
Section 8.2 and Section 8.4 all the provisions of the Plan and trust
agreement shall apply to such new investment fund. Any shares becoming
allocable to a Member's Account and/or Tax Deferred Account in Fund A after
the latest Valuation Date for which record processing has been completed at
the time of the Trustee's disposition of shares shall remain a part of such
Member's Account and/or Tax Deferred Account in Fund A subject to all the
provisions of the Plan other than this Article 23.
23.4 Investment of Proceeds. Any securities received in connection
with a disposition directed under this Article 23 shall remain a part of
the new investment fund subject, however, to the Sponsoring Company's right
to amend the Plan in accordance with its provisions. Any cash proceeds of a
disposition directed under this Article 23 and any income from investments
under the new investment fund shall remain a part of the new investment
fund and shall be invested in such securities as the Sponsoring Company (or
other fiduciary identified by the Sponsoring Company for such purpose) may
from time to time direct; provided, however, in the absence of any
direction from the Sponsoring Company or other fiduciary the Trustee may in
its discretion, or pursuant to applicable provisions in the trust agreement
if any such provisions appear therein, invest the cash proceeds in Fund B
described in Section 8.1 of the Plan.
23.5 Action With Respect to Members Not Instructing the Trustee or
Not Issuing Valid Instructions. To the extent to which Members do not
instruct the Trustee or do not issue valid directions to the Trustee to
sell, offer to sell, exchange or otherwise dispose of the shares of stock
of the Sponsoring Company allocable to their Account and/or Tax Deferred
Accounts in Fund A, such Members shall be deemed to have directed the
Trustee that such shares remain invested in Fund A subject to all
provisions of the Plan other than this Article 23.
23.6 Withdrawal of Shares. In the event, under the terms of a
tender offer or otherwise, any shares of common stock held in Fund A and
tendered for sale, exchange or transfer pursuant to such offer may be
withdrawn from such offer, the Trustee shall follow such instructions
respecting the withdrawal of such shares from such offer in the same manner
and in the same proportion as shall be timely received by the Trustee from
Members entitled under this Article 23 to give instructions as to the sale,
exchange or transfer of shares of such common stock pursuant to such offer,
acting in their capacity as named fiduciaries.
23.7 Partial Offers. In the event that an offer for fewer than all
of the shares of common stock invested in Fund A and held by the Trustee
shall be received by the Trustee, the total number of shares of such common
stock that the Plan sells, exchanges or transfers pursuant to such offer
shall be allocated among Members' Accounts and/or Tax Deferred Accounts ,
to the extent that such accounts are invested in Fund A, on a pro rata
basis in accordance with the directions received from Members with respect
to the allocable share of each such Member's Account and/or Tax Deferred
Account invested in Fund A.
23.8 Multiple Offers. In the event an offer shall be received by
the Trustee and instructions shall be solicited from Members pursuant to
Sections 23.2 to 23.7 hereof regarding such offer, and, prior to the
termination of such offer, another offer is received by the Trustee for the
shares of common stock invested in Fund A subject to the first offer, the
Trustee shall use its best efforts under the circumstances to solicit
instructions from the Members in their capacity as named fiduciaries:
(a) with respect to shares of common stock tendered for sale,
exchange or transfer pursuant to the first offer, whether
to withdraw such tender, if possible, and, if withdrawn,
whether to tender any shares of common stock so withdrawn
for sale, exchange or transfer pursuant to the second
offer, and
(b) with respect to shares of common stock not tendered for
sale, exchange or transfer pursuant to the first offer,
whether to tender or not to tender such shares of common
stock for sale, exchange or transfer pursuant to the
second offer.
The Trustee shall follow all such instructions received in a timely manner
from Members in the same manner and in the same proportion as provided in
Sections 23.2 to 23.7 hereof. With respect to any further offer for any
such common stock received by the Trustee and subject to any earlier offer
(including successive offers from one or more existing offerors), the
Trustee shall act in the same manner as described above in this Section
23.8.
23.9 No Impact on Account. A Member's instructions to the Trustee
to tender or exchange shares of common stock shall not be deemed a
withdrawal or suspension from the Plan or a forfeiture of any portion of
the Member's benefit.
23.10 Confidentiality. The instructions received by the Trustee
from a Member under this Article 23 shall be held in confidence by the
Trustee and any contractor retained by the Trustee to assist in the
tabulation of tenders and shall not be divulged or released to the
Sponsoring Company, to any officer of the Sponsoring Company, to any
employee of the Sponsoring Company or to any other person, except in the
aggregate, unless otherwise required by law.
ARTICLE 24
SPECIAL RULES IN THE EVENT PLAN BECOMES TOP HEAVY
24.1 General. Notwithstanding any other provision of the Plan,
this Article 24 shall apply to each Plan Year as to which the Plan is
"Top-Heavy" (as hereinafter defined in this Article 24), hereinafter called
"Top-Heavy Year", and, to the extent provided in this Article 24, to each
Plan Year following a Plan Year as to which the Plan is Top-Heavy.
24.2 Minimum Benefits. The Participating Company contributions and
forfeitures allocated to the Account (for purposes of this Article 24,
references to a Member's "Account" shall include such Member's Account, Tax
Deferred Account and Restricted Company Match Account) of each Member who
is a Non-Key Employee and who is employed on the last day of the Plan Year,
shall not be less than three percent of such Member's Compensation.
Notwithstanding the preceding sentence, the foregoing percentage for any
Top-Heavy Year shall not exceed the percentage at which Participating
Company contributions and forfeitures are allocated to the Account of the
Key Employee for whom such percentage is the highest for such Top-Heavy
Year; provided, however, that all defined contribution plans within an
Aggregation Group shall be treated as one plan. The minimum benefit as
prescribed above is determined without regard to any Social Security
contribution and without regard to any salary deferral or cash or deferred
contributions made on behalf of such a Non-Key Employee under a plan
qualified under Section 401(k) of the Code.
24.3 Vesting. In any Top-Heavy Year, the Account of any Member
shall be fully vested and nonforfeitable, as it is in years when the Plan
is not Top-Heavy.
24.4 Definitions. For purposes of this Article 24, the following
definitions shall apply:
(a) "Aggregation Group" shall mean (i) each plan of a
Participating Company or an Affiliated Company in which
at least one Key Employee participates or participated at
any time during the Determination Period (regardless of
whether the plan has terminated); (ii) each other plan of
a Participating Company or an Affiliated Company which
enables any plan described in (i) above to meet the
requirements of Section 401(a)(4) or 410 or the Code; and
(iii) any other plan or plans which the Sponsoring
Company elects to include provided that the group would
continue to meet the requirements of Sections 401(a)(4)
and 410 of the Code with such plan or plans being taken
into account. For these purposes, the group of plans
included under (i) and (ii) above is considered to be a
"required aggregation group" and the group of plans
included under (i)-(iii) is considered to be a
"permissive aggregation group."
(b) "Determination Date" shall mean, with respect to the
first Plan Year, the last day of such Plan Year, and with
respect to any subsequent Plan Year, the last day of the
preceding Plan Year.
(c) "Determination Period" shall mean the Plan Year
containing the Determination Date and the four preceding
Plan Years.
(d) "Key Employee" shall mean, with respect to any Plan Year,
as determined under Section 416(i) of the Code, any
person (and the beneficiary under the plan of any person)
who, at any time during the Determination Period with
respect to such Plan Year, is:
(1) an officer of a Participating Company or an
Affiliated Company who:
(A) effective for Plan Years beginning
after December 31, 1986, has annual
compensation greater than 50 percent of
the dollar limitation in effect under
Section 415(b)(1)(A) of the Code for
any such Plan Year, and
(B) is taken into account under Section
416(i) of the Code;
(2) one of the ten employees who:
(A) owns (or is considered as owning within
the meaning of Sections 318 and 416(i)
of the Code) both more than a 1/2
percent ownership interest in value and
one of the ten largest percentage
ownership interests in value of his
employer; and
(B) has (during the Plan Year of ownership)
annual compensation from his employer
and any Affiliated Company of more than
the limitation in effect under Section
415(c)(1)(A) of the Code for the
calendar year in which such Plan Year
ends;
(3) a five percent owner (as defined in Section
416(i) of the Code) of his employer or
(4) a one percent owner (as defined in Section
416(i) of the Code) of his employer having
annual compensation from his employer and any
Affiliated Company of more than $150,000.
For purposes of this paragraph (d), "compensation" shall mean
compensation as defined in Section 7.4(d) (which defines
"Limitation Year Compensation" for purposes of applying the annual
addition limitations) of the Plan except that salary reduction
contributions that would otherwise be excluded from the definition
of compensation thereunder because of special tax benefits
applicable to such contributions under Section 125, 402(a)(8),
402(h)(1)(B) or 403(b) of the Code shall be included in such
compensation.
(e) "Non-Key Employee" shall mean any individual who, with
respect to any Plan Year during the Determination Period,
is not a Key Employee.
(f) "Top-Heavy" shall mean, with respect to any Plan Year,
that the Plan falls within a Top-Heavy Group or that, as
of the Determination Date, the Top Heavy Ratio exceeds
60%.
(g) "Top-Heavy Group" shall mean, with respect to any Plan
Year, any Aggregation Group if (as of the Determination
Date) the sum of the Top Heavy Ratios for each plan
falling within the Aggregation Group exceeds 60%.
(h) "Top Heavy Ratio" shall mean, with respect to any
Determination Date:
(1) For any defined benefit plan the ratio of the
present value of the cumulative accrued benefits
(including any benefits derived from employee
contributions) under the plan for all Key
Employees to the present value of the cumulative
accrued benefits (including any benefits derived
from employee contributions) under the plan for
all employees. Such present value shall be
consistently and uniformly determined under
regulations under Section 416 of the Code (i) by
using the actuarial assumptions used by the plan
for purposes of minimum funding standards under
Section 412 of the Code (modified as necessary
to conform with the requirements of Section 415
of the Code and regulations thereunder); (ii) as
of the most recent valuation date used for
computing plan costs for purposes of minimum
funding under Section 412 of the Code falling
within a 12-month period ending on the
Determination Date; (iii) by including
distributions made within the Plan Year in which
falls the Determination Date and the four
preceding Plan Years; and (iv) on the basis that
each employee terminated employment on the
valuation date.
(2) For any defined contribution plan (including any
simplified employee pension plan), the ratio of
the sum of the account balances under the plan
as of the Determination Date for Key Employees
to the sum of the account balances under the
plan as of the Determination Date for all
employees. For purposes of computing this ratio,
any distribution made within the Plan Year in
which falls the Determination Date and the four
preceding Plan Years shall be included and both
the numerator and denominator of the Top-Heavy
Ratio are increased to reflect any contribution
not actually made as of the Determination Date,
but which is required to be taken into account
on that date under Section 416 of the Code and
the regulations thereunder.
(3) For purposes of (1) and (2) above, the following
shall apply:
(A) The value of account balances and the
present value of accrued benefits will
be determined as of the most recent
valuation date that falls within or
ends with the 12-month period ending on
the applicable Determination Date,
except as provided in Section 416 of
the Code and the regulations thereunder
for the first and second plan years of
a defined benefit plan.
(B) There shall be disregarded the account
balances and accrued benefits of a
Member:
(i) who is a Non-Key Employee, but
who was a Key Employee in a
Prior Plan Year or
(ii) with respect to a Plan Year
beginning after 1984, who has
not performed services for the
employer maintaining the plan
at any time during the
five-year period ending on the
Determination Date.
(C) The calculation of the Top-Heavy Ratio,
and the extent to which distributions,
rollovers and transfers are taken into
account will be made in accordance with
Section 416 of the Code and the
regulations thereunder.
(D) Deductible voluntary contributions
shall not be included.
(E) The value of account balances and
accrued benefits under plans aggregated
with the Plan shall be calculated with
reference to the Determination Dates
under such plans that fall within the
same calendar year as the applicable
Determination Date under the Plan.
(F) The value of account balances under the
Plan will be determined as of the
Determination Date with respect to the
applicable Plan Year.
(G) The accrued benefit of a Non-Key
Employee shall be determined under (i)
the method, if any, that uniformly
applies for accrual purposes under all
de-fined benefit plans maintained by
the Participating Company and
Affiliated Companies, or (ii) if there
is no such method, as if such benefit
accrued not more rapidly than the
slowest accrual rate permitted under
the fractional rule of Section
411(b)(1)(C) of the Code.
SPECIAL SUPPLEMENT TO ARTICLE 24 - MODIFICATIONS TO TOP-HEAVY RULES
The following provisions replace the applicable provisions of Article 24
that precede these supplemental provisions.
1. Effective date. This section shall apply for purposes of determining
whether the Plan is a top-heavy plan under section 416(g) of the Code for
Plan Years beginning after December 31, 2001, and whether the Plan
satisfies the minimum benefits requirements of section 416(c) of the Code
for such years. This section amends the preceding provisions of Article 24.
2. Determination of top-heavy status.
2.1 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 section
416(i)(1) of the Code 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 415(c)(3) of
the Code. The determination of who is a key employee will be made in
accordance with section 416(i)(1) of the Code and the applicable
regulations and other guidance of general applicability issued thereunder.
2.2 Determination of present values and amounts. This section 2.2 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.
2.2.1 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 section 416(g)(2) of the Code 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 section
416(g)(2)(A)(i) of the Code. 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.
2.2.2 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.
3. Minimum benefits.
3.1 Matching contributions. Employer matching contributions shall be taken
into account for purposes of satisfying the minimum contribution
requirements of section 416(c)(2) of the Code 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 section 401(m) of the Code.
IN WITNESS WHEREOF, the Sponsoring Company has caused this Plan to
be executed this 21st day of November, 2002.
ATTEST: ASHLAND INC.
/s/ Richard Thomas By: /s/ David L. Hausrath
- ------------------------------ --------------------------------
Secretary Title: Vice President and General
Counsel