EXHIBIT 4.7
ASHLAND INC.
LEVERAGED EMPLOYEE STOCK OWNERSHIP PLAN
AMENDED & RESTATED
GENERALLY EFFECTIVE OCTOBER 1, 1997
ASHLAND INC.
LEVERAGED EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Ashland Inc. (formerly known as Ashland Oil, Inc. prior
to January 28, 1995) first established the Ashland Inc. Leveraged Employee
Stock Ownership Plan (the "Plan"), effective October 1, 1985, for the
benefit of the employees of the Sponsoring Company and of the Participating
Companies eligible to participate therein;
WHEREAS, the Plan has reserved to Ashland Inc. the power and
authority to amend the Plan;
WHEREAS, since the Plan was first established, it has been amended
numerous times;
WHEREAS, a series of statutory and regulatory changes require the
Plan be amended; and
WHEREAS, Ashland Inc. desires to completely amend and restate the
Plan in a single document containing all the amendments which were made and
which are required;
NOW, THEREFORE, Ashland Inc. does hereby further amend and restate
the Plan, generally effective as of October 1, 1997, 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. The Plan is, effective after January 27, 1995,
designated the "Ashland Inc. Leveraged Employee Stock Ownership Plan".
Effective as of January 1, 1991, the portion of the Ashland Oil, Inc.
PAYSOP represented by the accounts of members thereunder who are also
Members under this Plan with Account balances hereunder on such date shall
be transferred to and be otherwise merged with this Plan and shall, from
and after the date of said merger be subject to the provisions hereof;
provided, however, that the Section 411(d)(6) protected benefits (as
defined under Treas. Reg. ss.1.411(d)-4) with respect to the benefits
identified hereinabove being merged herewith shall be preserved.
1.2 Purpose. The purpose of the Plan is to be an employee stock
ownership plan, qualified under Sections 401(a) and 4975(e)(7) of the Code,
whose assets may be invested, without limitation, in qualifying employer
securities, as defined in Section 407(d)(5) of ERISA, and provide benefits
for the Participating Companies' eligible employees and their beneficiaries
primarily through the distribution of Ashland Inc. Common Stock. To provide
such benefits, the Participating Companies propose to make contributions in
accordance with the provisions of the Plan. Such contributions and any
income derived therefrom shall be invested primarily in Ashland Inc. Common
Stock and shall, except as otherwise provided by this Plan and by law, be
for the exclusive benefit of Members and their Beneficiaries and to defray
the reasonable expenses of administering the Plan, and shall not be used
for, or diverted to, any other purpose.
1.3 Effective Date. Amendments that were made to the Plan since
its last restatement on October 1, 1989 shall be effective as of the date
or dates identified in those amendments, regardless of whether those dates
are specified in this amendment and restatement of the Plan. In all other
respects, except as otherwise indicated, this amendment and restatement is
effective as of October 1, 1997.
ARTICLE 2
Definitions
2.1 As used in the Plan:
(a) "Account" shall mean the separate account or
accounts maintained for each Member under the provisions
of Article 5 of the Plan, including:
(1) Common Stock Account--the Account of a Member
that is credited with shares of Common Stock;
(2) Investment Account--the Account of a Member that
is credited with assets other than Common Stock;
(3) Unallocated Loan Common Stock Account -- the
Account in the Trust that is credited with
shares of Common Stock unallocated by reason of
principal outstanding on a loan used to acquire
Common Stock and includes on December 1, 1986
the Common Stock held in the Unallocated Common
Stock Account under the provisions of the Plan
as in existence on November 30, 1986.
(4) Unallocated Investment Account--the Account in
the Trust that is credited with all Trust
assets, other than Common Stock, prior to their
allocation to the Investment Accounts of
Members, and which is debited with payments made
to purchase Common Stock and to discharge all
obligations of the Trust. Such Account shall
reflect all transactions of the Trust.
(5) Unallocated Transfer Common Stock Account -- The
Account in the Trust that is credited with
shares of Common Stock either transferred from
the Unallocated Loan Common Stock Account or
otherwise acquired by reason of a transfer of an
employer reversion described in Section
4980(c)(3) of the Code prior to their allocation
to the Common Stock Accounts of the Members.
(6) PAYSOP Account -- the portion of each Member's
Account consisting of the assets previously held
in an account for such Member's benefit under
the Ashland Oil, Inc. PAYSOP and which were
merged into this Plan, effective January 1,
1991, and which is credited (or debited) with
such amounts as provided under Section 4.6 of
the Plan and under Article 5. Each Member's
interest in his PAYSOP Account shall be
separately accounted for and be nonforfeitable
at all times. For purposes of Section 8.6 of the
Plan and Article 16 of the Plan, Common Stock
allocated to the PAYSOP Accounts shall be
treated in the same manner as Common Stock
allocated to the Common Stock Accounts.
Notwithstanding anything to the contrary which
may be contained in Article 6 of the Plan or in
Section 7.5 of the Plan, no share of Common
Stock allocated to a PAYSOP Account may be
distributed or otherwise disposed of before the
end of the 84th month beginning after the month
in which such share was allocated to the PAYSOP
Account when such Account was held under the
Ashland Oil, Inc. PAYSOP except upon:
(i) the death, disability, or
separation from service of a
Member (within the meaning of
Section 409(d) of the Code);
(ii) a transfer of a Member to the
employment of an acquiring
employer from the employment of
a Participating Company or an
Affiliated Company in the case
of (A) a sale to the acquiring
employer of substantially all
of the assets used by the
selling corporation in a trade
or business conducted by the
selling corporation, or (B) the
sale of substantially all of
the stock of a subsidiary of a
Participating Company or an
Affiliated Company; or
(iii) a disposition of a
Participating Company's or
Affiliated Company's interest
in a subsidiary when a Member
continues employment with such
subsidiary.
(7) Offset Account -- the portion of a Member's
Account initially consisting of one-half of the
Member's Common Stock Account determined as of
the later of March 31, 1991 or the September 30
or March 31 immediately following an
individual's commencement of participation
hereunder and which is thereafter credited (or
debited) with such amounts as provided under
Article 5.
(8) Non-Offset Account -- the portion of a Member's
Account initially consisting of one-half of the
Member's Common Stock Account determined as of
the later of March 31, 1991 or the September 30
or March 31 immediately following an
individual's commencement of participation
hereunder and which is thereafter credited (or
debited) with such amounts as provided under
Article 5.
(b) "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.
Notwithstanding anything to the contrary contained herein, effective July
1, 1997, for purposes of determining an Employee's eligibility to
participate hereunder and for purposes of determining a Member's vested
benefit hereunder, but not for purposes of determining whether an
individual is entitled to accrue a benefit hereunder for a particular Plan
Year, Arch Coal, Inc. and the entities with which it is aggregated and
considered as a single employer under Sections 414(b), (c), (m) and (o) of
the Code shall be included within the meaning of "Affiliated Company"
hereunder. Effective January 1, 1998, the Marathon Ashland Petroleum LLC
and its subsidiaries shall be included within the definition of Affiliated
Company hereunder for the purpose of applying the provisions of the Plan
relating to the determination of an individual's Period of Service and for
the purpose of applying the provisions of the Plan relating to the
determination of whether an individual has incurred a Termination of
Employment. Effective on and after March 29, 2000, however, Arch Coal, Inc.
(the successor to Ashland Coal, Inc.) and the entities with which it is
aggregated and considered a single employer under section 414(b), (c), (m)
and (o) of the Code shall not be included within the meaning of Affiliated
Company hereunder.
(c) "Beneficiary" shall mean the person or persons entitled
to receive the distributions, if any, payable under the
Plan pursuant to the applicable provisions of Article 6
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 (c).
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.
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(c) shall be his "designated beneficiary"
as defined under said Section and regulations.
(d) "Board" or "Board of Directors" shall mean the board of
directors of the Sponsoring Company.
(e) "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.
(f) "Common Stock" shall mean common stock issued by the
Sponsoring Company which is readily tradeable on an
established securities market.
(g) "Credited Compensation" shall mean the Member's wages,
salaries and other amounts paid by a Participating
Company during the Plan Year for personal services
rendered in the course of employment with a Participating
Company. Credited Compensation shall include (i) amounts
considered contributed by a Participating Company on
behalf of the Member and not includable in the Member's
federal gross income under Sections 401(k), 402(h),
403(b) or 125 of the Code; (ii) bonuses; (iii)
commissions; (iv) amounts paid for overtime; and (v)
other special pay. Excluded from Credited Compensation
are (i) awards paid under the Ashland Inc. Amended
Performance Unit Plan approved by the Sponsoring
Company's shareholders in September 1985 (including any
successor thereto); (ii) deferred compensation amounts
(other than described above) and amounts paid from any
such nonqualified deferred compensation plan; (iii)
allowances paid by reason of foreign assignment; (iv)
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; (v) amounts
realized from the sale or other disposition of stock
acquired under a qualified stock option; (vi) other
amounts which receive special tax benefits except for
amounts which receive special tax benefits and are
included among the items that are included in Credited
Compensation; (vii) severance pay which is paid on or
after November 1, 1992; and (viii) 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
October 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.
(h) "Current Obligations" means all debts and obligations for
which the Trust Fund is liable.
(i) "Employee" means any person who is an employee of one or
more Participating Companies and who is identified as
eligible to participate in this Plan on the records of
the applicable Participating Companies, except as
otherwise provided. Employee shall not include: (1) 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; (2) any leased employee as defined in Code
section 414(n)(2); (3) any person who is a non-resident
alien and who receives no earned income (within the
meaning of section 911(b) of the Code) which constitutes
income from sources within the United States (within the
meaning of section 861(a)(3) of the Code) from any
Participating Company; and (3) any person who is
compensated on an hourly or other rate basis if such
employee is not included in a designated eligible payroll
classification code so designated by the Sponsoring
Company. For purposes of this paragraph (i), a United
States citizen who is an employee (A) of a foreign
affiliate (as defined in Section 3121(1)(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(1) 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 affiliate, 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
paragraph (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 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) "Financed Common Stock" shall mean shares of Common Stock
acquired by the Trustee with borrowed funds.
(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) "Member" shall mean an eligible Employee who becomes a
Member of the Plan as provided in Article 3 of the Plan.
A Member ceases to be a Member when all funds in his
Account to which he is entitled under the Plan have been
distributed in accordance with the Plan.
(p) "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.
(q) "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.
(r) "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.
(s) "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 11 of the Plan.
(t) "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 (t), 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.
(u) "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.
(v) "Plan" shall mean, effective after January 27, 1995, the
Ashland Inc. Leveraged Employee Stock Ownership Plan
(formerly known as the Ashland Inc. Leveraged Employee
Stock Ownership Plan) as set forth herein, and as it may
be amended from time to time.
(w) "Plan Year" shall mean the 12-consecutive-month period
beginning on October 1 and ending on the following
September 30.
(x) "Qualified Election Period" shall, effective on and after
April 1, 1996, mean the period of Plan Years beginning
with the first Plan Year ending in the calendar year in
which an individual first becomes a Qualified Member and
ending when such an individual ceases to be a Qualified
Member. The earliest Plan Year which may be part of the
Qualified Election Period for any Qualified Member is the
Plan Year ending September 30, 1996.
(y) "Qualified Member" shall, effective on and after April 1,
1996, mean a Member who is at least age 55 by the end of
a calendar year within which ends a Plan Year that is in
the Qualified Election Period, who is an Employee when he
makes a diversification election under Section 7.5 of the
Plan and who is still an Employee on the date that the
amount subject to such a diversification election is
transferred from this Plan. For Plan Years ending on and
after September 30, 1996, an Employee may be a Qualified
Member regardless of the number of One-Year Periods of
Service credited to such Employee.
(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) "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; (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; and (iii) effective
as of October 1, 1986, if an employee is absent from
service with such Participating Company or Affiliated
Company during a period of time which such employee
received long term disability benefits under the Ashland
Inc. Long Term Disability Plan, 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 is receiving or is determined to be
eligible to receive benefits under such Long Term
Disability Plan or in the event benefits under such Long
Term Disability Plan are terminated such employee shall
be deemed to have quit or been discharged on the date
such benefits are terminated. Notwithstanding anything to
the contrary contained hereinabove, effective April 14,
1991, an employee receiving benefits under such Long Term
Disability Plan shall be deemed to have quit on the
earlier of the date as of which benefit payments under a
tax qualified defined benefit pension plan maintained by
the Sponsoring Company or an Affiliated Company commence
to such employee pursuant to such employee's election or
the date as of which benefits under such Long Term
Disability Plan are terminated.
(ab) "Sponsoring Company" shall mean Ashland Inc. including
any successor by merger, purchase or otherwise.
(ac) "Termination of Employment" shall mean the death or
separation from service of a Member from each
Participating Company and Affiliated Company. In the case
of a Member who is absent from service and receives
benefits under the Ashland Inc. Long Term Disability
Plan, such disabled Member shall incur a Termination of
Employment upon the termination of such disability
benefits if such Member is not reemployed by an
Affiliated Company or a Participating Company and is
thereafter separated from service in accordance with
employment policies and practices as in effect from time
to time; provided, however, that effective April 14,
1991, a disabled Member shall be deemed to have incurred
a Termination of Employment upon the earlier of the date
as of which benefit payments to such Member under a tax
qualified defined benefit pension plan maintained by the
Sponsoring Company or an Affiliated Company commence
pursuant to such Member's election or the date as of
which disability benefits to such Member are terminated,
if such Member is not reemployed by an Affiliated Company
or a Participating Company and is thereafter separated
from service in accordance with the employment policies
and practices as in effect from time to time.
(ad) "Trust" shall mean the legal entity resulting from the
trust agreement (as it may be amended from time to time)
between the Sponsoring Company, on its own behalf and as
agent for all other Participating Companies, and the
Trustee who receives the Participating Companies'
contributions, and holds, invests and disburses funds
(including the PAYSOP Accounts that were transferred
hereto as provided in Section 1.1 of the Plan) to or for
the benefit of Members and their Beneficiaries.
(ae) "Trust Fund" shall mean the PAYSOP Accounts and total
contributions made by the Participating Companies 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.
(af) "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.
(ag) "Valuation Date" shall mean the last business day of each
calendar month.
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
Participation in the Plan
3.1 Age and Service. An Employee shall automatically become a
Member of the Plan as of the October 1 or April 1 coinciding with or next
following the day after the date on which such Employee (a) has attained
age 21 and (b) has completed a One-Year Period of Service, provided such
Employee is an Employee of a Participating Company on such October 1 or
April 1. Notwithstanding the foregoing provisions of this section 3.1, any
Member who incurs a Termination of Employment and who is subsequently
re-employed as an Employee of a Participating Company shall commence
participation in the Plan effective as of the date he again becomes an
Employee. Notwithstanding anything contained herein to the contrary, no new
Members shall be admitted to the Plan after March 31, 1996 under any
provision in this Article 3 or under any other provision of this Plan.
3.2 Service with 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
Contributions
4.1 Amount of Participating Company Contributions. The Plan is
designed to invest primarily in Common Stock. Subject to the right of the
Board of Directors of the Sponsoring Company to modify, amend or terminate
the Plan, a Participating Company shall contribute to the Plan for each
Plan Year in Common Stock, cash or other property acceptable to the Trustee
such amount as the Board shall determine. Notwithstanding anything
contained herein the contrary, no additional contributions may be made to
or allocated under the Plan as of any date after March 31, 1996.
4.2 Time of Participating Company Contributions. Each
Participating Company and group of Participating Companies making a
contribution under Section 4.1 of the Plan for a Plan Year shall make such
contribution not earlier than the first day of such Plan Year and not later
than either (i) the due date (including extensions) for filing the return
for the taxable year with which or within which such Plan Year began, or
(ii) the latest date otherwise allowed by law.
4.3 Form of Contributions. Each Participating Company's
contributions to the Plan under Section 4.1 of the Plan shall be made in
cash or in treasury or authorized but unissued Common Stock. Cash
contributed to the Plan shall be used first to satisfy any Current
Obligations of the Trust Fund and, thereafter, it may be used to acquire
Common Stock; provided, however, the Trustee in its discretion, after
satisfying Current Obligations, may hold all or any portion of the
remainder of such cash contribution as cash, consistent with its
obligations as Trustee, as it deems advisable in accordance with the
provisions of the trust agreement. The Trustee may purchase Common Stock
(i) on the open market; (ii) by the exercise of stock rights; or (iii) from
the Sponsoring Company, whether in treasury stock or authorized but
unissued stock; provided, however, in no event shall a commission be
charged with respect to a purchase pursuant to clause (iii) of this
sentence. Common Stock contributed by the Sponsoring Company under this
Section 4.3 shall be valued at the closing market price for Common Stock on
the New York Stock Exchange composite tape on the date of the contribution.
Common Stock purchased from the Sponsoring Company shall be valued
at the lowest of the following prices for shares of Common Stock on the New
York Stock Exchange composite tape (i) the mean of the high and low trading
prices on the Pricing Date (as defined in the trust agreement between the
Sponsoring Company and the Trustee), (ii) the closing price on such date or
(iii) the average of the means of the high and low trading prices for the
date of the purchase and the 15 trading days immediately before and the 15
trading days immediately succeeding such date. For any such purchase, the
Trustee shall pay the lower of the prices determined under subsections (i)
and (ii) and, if the price determined pursuant to subsection (iii) should
be lower, the Sponsoring Company in its sole discretion shall either refund
any excess amounts received from the Trustee in connection with such
purchase or transfer to the Trustee the additional number of shares of
Common Stock required so as to make the average price per share in the
transaction equal to the price determined pursuant to subsection (iii).
4.4 Member Contributions. No contributions are required or
permitted to be made by any Member.
4.5 Dividends on Common Stock. Dividends, whether cash or in-kind,
paid to the Trust on Common Stock allocated to Members' Common Stock
Accounts may be used to acquire Common Stock or, at the direction of the
Sponsoring Company, may be distributed to Members; provided, however, the
Trustee may hold such amounts in cash, consistent with its obligation as
Trustee, as it deems advisable in accordance with the provisions of the
trust agreement. Cash dividends paid on any in-kind dividends which consist
of stock may be used in any manner consistent with the terms of the Plan
and Trust, but they may not be passed-through to Members or beneficiaries.
This includes retaining them as a cash component of Members' and
Beneficiaries' Accounts (excluding the Offset Accounts). A proportionate
share of the cash component of such remaining Accounts may be exchanged for
the in-kind dividend portion of an Account or Accounts that are being
distributed with the Accounts from which such cash is exchanged being
credited with their proportionate share of such in-kind dividend, with such
exchange valued using the previous day's closing price of the in-kind
dividend property amount so exchanged. The Trustee may hold in cash,
consistent with its obligations as Trustee, amounts from dividends paid on
Common Stock held in the Unallocated Loan Common Stock Account and the
Unallocated Transfer Common Stock Account which are not used to satisfy
Current Obligations then due. At the direction of the Sponsoring Company,
such cash as is not used to satisfy Current Obligations shall be held in
the Unallocated Investment Account and may be accumulated to pay future
obligations of the Trust as they come due. The Trustee may purchase Common
Stock with cash or in-kind (which may first be converted to cash) dividends
(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. Common
Stock purchased by the Trustee pursuant to clause (iii) of this Section 4.5
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. If any in-kind dividend of stock is converted to cash, some or all
of said cash may be retained as a cash component of Members' and
Beneficiaries' Accounts (excluding the Offset Accounts) pending its
ultimate use for any permitted purpose under the Plan. Common Stock
purchased from the Sponsoring Company under clause (iv) of this Section 4.5
shall be valued as provided in Section 4.3 for sales of Common Stock to the
Trustee. In no event shall a commission be charged to the Plan with respect
to a purchase pursuant to clause (iv).
4.6 Dividends on PAYSOP Account Common Stock. Dividends paid to
the Trust on Common Stock allocated to the PAYSOP Accounts held by it and
other income, if any, received by the Trustee with respect to such Accounts
shall, to the extent directed by the Sponsoring Company, be used first to
pay fees and expenses of the Plan, and, to the extent not so used,
dividends paid on Common Stock allocated to Members' PAYSOP Accounts shall
be distributed to such Members; provided, however, that in-kind dividends
paid to the Trust on Common Stock allocated to the PAYSOP accounts may, if
directed by the Sponsoring Company, be used to acquire Common Stock to be
held in such accounts under the same rules and procedures prescribed for
such transactions in Section 4.5. Cash dividends paid on any in-kind
dividends which consist of stock may be used in any manner consistent with
the terms of the Plan and Trust, but they may not be passed-through to
Members or beneficiaries.
ARTICLE 5
Allocations to Members' Accounts
5.1 Semi-annual Allocations. Contributions and Common Stock
available for allocation for a Plan Year shall be allocated as of the last
day of March and September of each such Plan Year to the Account of each
Member who on such last day was
(a) actively employed by a Participating Company;
(b) disabled from active employment with a Participating
Company and actually receiving benefits under the Ashland
Inc. Long Term Disability Plan; or
(c) on an approved leave of absence from employment with a
Participating Company, in the ratio that the Credited
Compensation of each such Member for the six-month period
ending on the last day of the applicable month bears to
the Credited Compensation of all such Members for such
six-month period.
5.2 Allocations to Common Stock Accounts. As of the last day of
each March and September, the Common Stock Account of each Member eligible
for an allocation under Section 5.1 shall be credited with its allocable
share of Common Stock (including fractional shares) (a) purchased and paid
for by the Trust or contributed in kind for the six month period ending on
the last day of the applicable month; (b) released for allocation to
Members from the Unallocated Common Stock Account for such period pursuant
to Section 5.4 hereof; (c) released for allocation to Members from the
Unallocated Transfer Common Stock Account for such period pursuant to
Section 5.4 hereof; (d) declared as stock dividends on Common Stock held in
each Member's Common Stock Account and (e) available for allocations as a
result of forfeitures for the applicable six-month period pursuant to
Section 6.1 and Section 6.5(c), provided, however, that forfeitures that
occurred during March of 1996 shall be applied towards the costs associated
with administering the Plan, consistent with Sections 7.4 and 8.5 of the
Plan. There shall be deducted from each Member's Non-Offset Account and
PAYSOP Account the number of shares (including fractional shares) of Common
Stock subject to a diversification election under the terms of Section 7.5
of the Plan as of the Valuation Date upon which such election is effective.
Except with respect to (d) above, the amounts described in this Section 5.2
as being credited to the Common Stock Account of each eligible Member shall
be divided equally between the Offset Account and Non-Offset Account
portions of each such eligible Member's Common Stock Account. The amounts
referred to in (d) above shall be allocated between each Member's
Non-Offset Account and Offset Account portions of his Common Stock Account
in the manner provided under Section 5.6 of the Plan.
5.3 Allocation of Earnings.
(a) Valuation Date Adjustments. As of each Valuation Date,
the Investment Account of each Member shall be credited
(or debited) with its share of the following:
(1) the net income (or loss) of the Trust;
(2) cash dividends, if any, on Common Stock in the
Member's Common Stock Account or cash dividends, if any,
on any in-kind stock dividends in the Member's Common
Stock Account;
(3) cash dividends, if any, paid to a Member or
Beneficiary on Common Stock in the Member's Common Stock
Account;
(4) forfeitures (other than of Common Stock) from an
Account, except as may otherwise be provided in clause
(e) of Section 5.2 for forfeitures which occurred during
March of 1996;
(5) the repayment of debt (including principal and
interest) incurred to purchase Common Stock;
(6) amounts released from the Unallocated Investment
Account during the calendar quarter; and
(7) any payments on purchases of Common Stock.
(b) Other Adjustments. As of the last day of each March and
September, the Investment Account of each Member eligible
for an allocation under Section 5.1 shall be credited
with its allocable share of contributions of cash or
property other than Common Stock and as of the last day
of each September, the Investment Account of each such
Member shall be credited with its allocable share of
forfeitures (other than of Common Stock).
(c) PAYSOP Account Adjustments. The PAYSOP Account of such
Member shall be credited (or debited) as of each
Valuation Date with such Member's share of the net income
(or loss) of the Trust allocable to the PAYSOP Accounts
and debited for any payments of fees, expenses or
dividends under Section 4.6 of the Plan.
5.4 Financed Common Stock.
(a) Order Credited. Financed Common Stock shall first be
credited to the Unallocated Loan Common Stock Account.
From the Unallocated Loan Common Stock Account, Financed
Common Stock shall be allocated to the Common Stock
Accounts of Members pursuant to Section 5.2 and paragraph
(d) of this Section 5.4 or transferred to the Unallocated
Transfer Common Stock Account pursuant to paragraph (b)
of this Section 5.4.
(b) Unallocated Transfer Common Stock Account. Financed
Common Stock credited to the Unallocated Loan Common
Stock Account shall be transferred to the Unallocated
Transfer Common Stock Account upon the transfer of an
employer reversion from a qualified plan that terminated
before January 1, 1989, but after March 31, 1985, to the
Plan under section 4980(c)(3) of the Code and any such
transferred amount shall be used to repay a loan used to
acquire such Financed Common Stock or a loan used to
refinance such a loan within 90 days after such transfer.
The number of shares so transferred shall be determined
by multiplying the total number of shares remaining in
the Unallocated Loan Common Stock Account on the date
such transferred employer reversion is used to repay the
loan by a fraction, the numerator of which is the amount
of such transfer used to repay principal on such loan and
the denominator of which is the principal balance of such
loan at the time such transfer is used to repay such
loan.
(c) Allocations from Unallocated Transfer Common Stock
Account. Financed Common Stock credited to the
Unallocated Transfer Common Stock Account shall be
allocated semi-annually from that account to the Common
Stock Account of each Member in accordance with Sections
5.1 and 5.2 beginning with the allocation date coincident
with or next following the date on which a transfer
occurs under section 4980(c)(3) of the Code and ending at
the end of the seventh Plan Year after the Plan Year in
which the transfer occurs. The number of shares to be
allocated as of each such allocation date shall be
determined by multiplying the total remaining number of
shares in the Unallocated Transfer Common Stock Account
by a fraction the numerator of which is one and the
denominator of which is the total number of allocation
dates (including the date as of which the allocation is
being made) then remaining in the period of time
beginning with the date of the allocation and ending with
the end of the seventh Plan Year after the Plan Year in
which the transfer is made. In no event shall the total
shares allocated in the Plan Year of transfer be less
than one-eighth of the amount of the shares transferred
to the Unallocated Transfer Common Stock Account.
Notwithstanding anything to the contrary in the
foregoing, any Common Stock acquired with the proceeds of
a transfer to the Plan under section 4980(c)(3) of the
Code may be added to the amount otherwise due to be
allocated under the foregoing provisions of this Section
5.4(c) as of an allocation date, provided that (i) all
the Common Stock otherwise scheduled for allocation under
this Section 5.4(c) may be allocated as originally
scheduled; and (ii) the proceeds so transferred are used
to acquire Common Stock within 90 days after such
transfer and such Common Stock is allocated to the
Accounts of Members for the Plan Year during which such
transfer occurred, to the extent permissible under the
Plan and under applicable law; and (iii) to the extent
the Common Stock acquired cannot be allocated as provided
in (ii) immediately above, it shall be held in the
Unallocated Transfer Common Stock Account for semi-annual
allocation as otherwise provided under this Section
5.4(c) not less rapidly than ratably over seven years and
the amount so allocated for the Plan Year of the transfer
shall equal the lesser of 1/8 of the amount attributable
to the Common Stock acquired or the maximum amount
permissible under the section 415 limitations of the
Code, with the amount allocated for each succeeding year
to be equal to the maximum amount which may be
permissibly allocated under the terms of the Plan and
applicable law until such amount is exhausted.
(d) Unallocated Loan Common Stock Account. Financed Common
Stock held in the Unallocated Loan Common Stock Account
shall be allocated semi-annually from that Account to the
Common Stock Account of each Member in accordance with
Sections 5.1 and 5.2, as the payments of principal under
the loan agreement are made. The number of shares to be
allocated as of each date from the Unallocated Loan
Common Stock Account shall be determined by multiplying
the total number of shares then remaining in that Account
by a fraction the numerator of which shall be the total
amount of principal paid under such loan agreement since
the date of the last allocation of such stock from the
Unallocated Loan Common Stock Account to the Common Stock
Accounts of Members and the denominator of which is the
sum of the amount in the numerator and the total
remaining principal amount of the loan to be paid.
(e) Other Acquisitions. Financed Common Stock acquired at
different times or at different prices shall be
separately allocated to Members' Common Stock Accounts in
accordance with this Section 5.4 and Sections 5.1 and 5.2
of the Plan.
5.5 Unallocated Investment Account. The Unallocated Investment
Account shall be credited with all Trust assets other than Common Stock
prior to their allocation to the Investment Accounts of Members and shall
be debited with all payments made to purchase Common Stock and all expenses
of the Trust not payable by the Company. Such Account shall reflect all
transactions of the Trust involving Trust assets other the Common Stock.
5.6 Dividends. Stock dividends on shares of Common Stock in the
Offset Accounts, Non-Offset Accounts and PAYSOP Accounts of Members shall
be credited to each such Member's Offset Account, Non-Offset Account and
PAYSOP Account which holds the Common Stock on which such stock dividends
were paid and the proceeds, whether such proceeds be cash or Common Stock
acquired upon the disposition of any such stock dividends, shall be
credited in like fashion, with the crediting of all such amounts described
in this sentence to occur as of each Valuation Date. To the extent
available after payment of Current Obligations of the Trust and other
expenses of the Trust, cash dividends on shares of Common Stock in the
Unallocated Loan Common Stock Account and the Unallocated Transfer Common
Stock Account shall, at the direction of the Sponsoring Company, be
accumulated in the Unallocated Investment Account to be used to pay future
obligations of the Trust and, to the extent not so accumulated and used,
when released from the Unallocated Investment Account shall be credited to
the Members' Investment Accounts in proportion to the relative balances in
their Common Stock Accounts as of the Valuation Date next succeeding such
release. To the extent that cash dividends paid on Common Stock in the
Unallocated Loan Common Stock Account and the Unallocated Transfer Common
Stock Account are allocated among the Members' Investment Accounts and are
used to purchase Common Stock, such Common Stock shall be allocated to the
Common Stock Account of each Member entitled thereto and such Common Stock
shall be divided between the Offset Account and Non-Offset Account portion
of each such Member's Common Stock Account and allocated thereto in the
proportion that each such portion bears to the total at the particular time
applicable. To the extent that cash dividends paid on in-kind stock
dividends in the Common Stock Account are allocated among the Members'
Investment Accounts and are used to purchase Common Stock, such Common
Stock shall be allocated to the Common Stock Account of each such Member
entitled thereto solely to the Non-Offset Account portion thereof.
5.7 Limitation on Annual Additions.
(a) Limitation. Notwithstanding any other provision of the
Plan, but except as otherwise provided in this paragraph
(a), (i) the sum of the Annual Additions (as hereinafter
defined) to a Member's Account for a Limitation Year (as
defined in Section 5.9) shall not exceed the lesser of
(A) $30,000 (as adjusted under Section 415(d) of the
Code), determined as of the last day of the applicable
Limitation Year, or (B) 25% of such Member's Limitation
Year Compensation (as defined in Section 5.9) and, (ii)
for each Limitation Year beginning before October 1, 1989
no more than one-third of the total Participating Company
contributions shall be allocated to Members: (A) who are
officers of a Participating Company on the date such
Limitation Year ends, (B) who are shareholders owning
(within the meaning of Section 1563(e) of Code) more than
10 per cent of the Common Stock outstanding on the date
such Limitation Year ends, or (C) whose Limitation Year
Compensation exceeds twice the dollar amount described in
phrase (A) of clause (i) of this sentence (adjusted for
cost-of-living increases as provided under such phrase
(A) of clause (i)). In applying the limitations of clause
(i) of the preceding sentence to a Limitation Year which
began before October 1, 1989 for which the requirements
of clause (ii) are met, the applicable dollar limitation
for any such Limitation Year shall equal the sum of: (i)
the dollar amount described in phrase (A) of clause (i)
of the preceding sentence (as adjusted for such
Limitation Year as described in said phrase (A) to
reflect changes in the cost of living), and (ii) the
lesser of (A) the amount determined under clause (i) of
this sentence or (B) the total Participating Company
contributions to the Plan for such Limitation Year.
Effective October 1, 2002, the sum of the said Annual
Additions shall not exceed (except as may otherwise be
permitted under this paragraph (a)) 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 5.9). Notwithstanding anything to the
contrary contained herein, for Limitation Years beginning
on or after October 1, 1989, the limitations of this
paragraph (a) shall not apply to forfeitures of employer
securities, within the meaning of Section 409 of the
Code, under the Plan, if such employer securities were
acquired with the proceeds of a loan described in Section
404(a)(9)(A) of the Code or to employer contributions to
the Plan deductible under Section 404(a)(9)(B) of the
Code and which are charged against the Member's Account,
if not more than one-third of the employer contributions
to the Plan for the Limitation Year which are deductible
under Section 404(a)(9) of the Code are allocated to
Highly Compensated Employees. Additionally, the
limitation in (B) of clause (i) 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.
(b) The term Annual Additions to a Member's Account for any
Limitation Year shall mean the sum of:
(1) the value of such Member's shares allocated
during the Limitation Year from the Unallocated
Transfer Common Stock Account determined using
the lower of (A) the price at which such Common
Stock was purchased by the Plan or (B) the
closing price of Common Stock on the New York
Stock Exchange Composite Tape for the trading
date coinciding with the date as of which such
Common Stock is credited to the Unallocated
Transfer Common Stock Account (or the trading
day next preceding such crediting date if such
date is not a trading day);
(2) such Member's allocable share of the total
Participating Company contributions for such
Limitation Year (other than amounts restored in
accordance with Section 411(a)(3)(D) or
411(a)(7)(C) of the Code), except that, for
Limitation Years beginning before October 1,
1989, allocations of Common Stock attributable
to the payment of interest on Financed Common
Stock in accordance with Section 5.4 shall not
be considered Annual Additions if the
requirements of clause (ii) of paragraph (a) of
this Section 5.7 are met;
(3) for Limitation Years beginning before October 1,
1987, the lesser of (A) the amount of such
Member's employee contributions credited to his
account in excess of 6% of such Member's
Limitation Year Compensation for the Limitation
Year, or (B) one-half (1/2) of such Member's
employee contributions credited to his account
for the Limitation Year and for Limitation Years
beginning after September 30, 1987, all of a
Member's own contributions (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) such Member's share of forfeitures under Section
6.1 and paragraph (c) of Section 6.5 allocated
to his Account for the Limitation Year, provided
that, for Limitation Years beginning before
October 1, 1989, forfeitures of Financed Common
Stock allocated to a Member's Account shall not
be considered Annual Additions if the
requirements of clause (ii) of paragraph (a) of
this Section 5.7 are met;
(5) 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
(6) 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.
(c) In the event that it is determined that, but for the
limitations contained in paragraph (a) of this Section
5.7, the Annual Additions to a Member's 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 limitations contained in paragraph (a) of this
Section 5.7 in the following order:
(1) For Limitation Years beginning before October 1,
1989, if Common Stock cannot be allocated to one
or more Member's Common Stock Accounts because
of the limitation contained in clause (ii) of
the first sentence of paragraph (a) of this
Section 5.7, such Common Stock shall be
allocated to the Common Stock Accounts of
Members of the Plan who are otherwise entitled
to receive an allocation under the Plan for the
Limitation Year and who are not (A) officers of
a Participating Company on the date such
Limitation Year ends, (B) shareholders owning
(within the meaning of Section 1563(e) of Code)
more than 10 percent of the Common Stock of the
Sponsoring Company outstanding on the date such
Limitation Year ends or (C) individuals whose
Limitation Year Compensation exceeds twice the
dollar amount described in phrase (A) of clause
(i) of the first sentence of paragraph (a) of
this Section 5.7 (adjusted for cost-of-living
increases as provided under said phrase (A)), in
the proportion that the Credited Compensation of
each such other Member bears to the total
Credited Compensation of all such other Members
for such Plan Year; subject, however, to the
limitations contained in paragraph (a) of this
Section 5.7.
(2) If Common Stock could not be allocated to a
Member's Account because of the limitation
contained in clause (i) of the first sentence of
paragraph (a) of this Section 5.7 (determined
without regard to any other portion of such
paragraph (a)), the allocable share of
allocations from the Unallocated Transfer Common
Stock Account, the Unallocated Loan Common Stock
Account, and/or of Participating Company
contributions and forfeitures under Section 6.1
and paragraph (c) of Section 6.5 of a Member
described in this subparagraph (2) for such
Limitation Year shall be reduced in such order
as the Sponsoring Company shall determine. The
annual additions under any other defined
contribution plan required to be aggregated with
this Plan for purposes of section 415(c) of the
Code shall not be reduced, but rather the
allocations under this Plan shall be reduced,
first, to the extent necessary to comply with
the requirements of section 415(c) of the Code.
If and to the extent that the amount of any
Member's allocable share of allocations from the
Unallocated Transfer Common Stock Account, the
Unallocated Loan Common Stock Account and/or of
Participating Company contributions and
forfeitures is reduced in accordance with the
provisions of this subparagraph (2), the amount
of any such reduction shall be held in an
unallocated suspense account under the Plan. Any
income produced by the Common Stock held in such
suspense account shall also be held in the
suspense account to the extent not used for
Current Obligations or distributed to Members
pursuant to Section 4.5. In each successive Plan
Year the Common Stock held in the unallocated
suspense account described in this subparagraph
(2) shall be released from such account for
allocation to Members' Accounts in accordance
with the provisions of this Article 5 of the
Plan on a first-in-first-out basis until no
Common Stock remains unallocated. Value for
purposes of allocations made under this
subparagraph (2) shall be determined under the
provisions of the first paragraph of Section 4.3
of the Plan by treating the date as of which
such allocation occurs as the date of
contribution. In the event no allocation from
such suspense account is possible because the
Plan is terminated and the maximum possible
allocations from the suspense account for the
Plan Year in which termination occurred have
been made, the remaining unallocated amounts
shall be returned to the Participating Companies
except as provided in Section 14.4 of the Plan.
(3) The allocable share of Participating Company
contributions and forfeitures under Section 6.1
and paragraph (c) of Section 6.5 of a Member
described in (2) above for such Limitation Year
shall be reduced and reallocated to the other
Members of the Plan who are employed by either
the Participating Company employing such Member
or another Participating Company which was a
component member of the consolidated tax return
of the Participating Company employing such
Member, in the proportion that the Credited
Compensation of each such other Member bears to
the total Credited Compensation for all such
other Members for such Plan Year; subject,
however, to the limitations contained in
paragraph (a) of this Section 5.7 and except
that such allocation and reallocation shall
exclude Members who are Highly Compensated
Employees if the Common Stock being allocated
and reallocated were acquired with the proceeds
of a loan satisfying the requirements of Treas.
Reg. Section 54.4975-7(b) and if allocations or
reallocations to such Members' Common Stock
Accounts would cause more than one-third of the
Participating Companies' contributions to such
Accounts for the Limitation Year to be allocated
to those of Highly Compensated Employees.
(d) If and to the extent that the amount of any Member's
allocable share of Participating Company contributions
and forfeitures is reduced in accordance with the
provisions of paragraph (c) of this Section 5.7 and not
reallocated to other Members; the amount of any such
reduction which is not reallocated to other Members shall
be held in an unallocated suspense account under the
Plan. Any income produced by the Common Stock held in
such suspense account shall be held in the Unallocated
Investment Account. In each successive Plan Year the
Common Stock held in the unallocated suspense account
shall be released from such account for allocation to
Members' Accounts in accordance with the provisions of
this Article 5 of the Plan on a first-in-first-out basis
until no Common Stock remains unallocated, except that
such allocation and reallocation shall exclude Members
who are Highly Compensated Employees if the Common Stock
being allocated and reallocated were acquired with the
proceeds of a loan satisfying the requirements of Treas.
Reg. Section 54.4975-7(b) and if allocations or
reallocations to such Members' Common Stock Accounts
would cause more than one-third of the Participating
Companies' contributions to such Accounts for the
Limitation Year to be allocated to those of Highly
Compensated Employees. Value for purposes of allocations
made under this paragraph (d) shall be determined under
the provisions of the first paragraph of Section 4.3 of
the Plan by treating the date as of which such allocation
occurs as the date of contribution. In the event no
allocation from such suspense account is possible because
the Plan is terminated and the maximum possible
allocations from the suspense account for the Plan Year
in which termination occurred has been made, the
remaining unallocated amounts shall be returned to the
Participating Companies.
5.8 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 maintained by a Participating Company or an Affiliated
Company (whether or not terminated), the total amount of Annual Additions
to such Member's accounts from all such Defined Contribution Plans shall
not exceed the limitations set forth in Section 5.7. If it is determined
that as a result of the limitations set forth in this Section 5.8 the
Annual Additions to a Member's Account in this Plan must be reduced, such
reduction shall be accomplished in accordance with the provisions of
Section 5.7.
5.9 Definitions Relating to Annual Additions Limitations. For
purposes of Sections 5.7, 5.8, this Section 5.9 and Article 17, 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) or 403(b) of the Code, (ii) any annuity plan
or annuity contract described in Section 403(a) of the
Code, (iii) any individual retirement account or
individual retirement annuity described in Section 408(a)
or 408(b) of the Code and (iv) 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 therein 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 services 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); 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 September 30, 1998, elective
deferrals pursuant to Code sections 125 or 457 shall be
included as Limitation Year Compensation. Effective for
Limitation Years beginning after September 30, 2001,
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.
5.10 Accounts of Members Transferred to an Affiliated Company or
Non-Employee Status. If a Member is transferred to an Affiliated Company
which is not a Participating Company, or is transferred to employment
status with a Participating Company whereby he is no longer an Employee,
the amount credited to his Account shall continue to share in the earnings
or losses of the Trust and such Member's rights and obligations with
respect to such Account shall be governed by the provisions of the Plan and
Trust.
5.11 Amendment to Stock Allocations. Effective on and after June 30, 1994
and notwithstanding anything to the contrary contained in this Article 5 or
in Article 13, no provision of the Plan which determines the amount of
Common Stock to be allocated to an eligible Member or the timing of such
allocation may be subject to an amendment whose effective date is within
six months of the effective date of the last such amendment; provided,
however, that this limitation on the frequency of amendments shall not
apply to amendments to comply with changes in the Code, ERISA or the rules
thereunder.
ARTICLE 6
Vesting and Distributions
6.1 Termination of Employment.
(a) Vesting. If a Member with at least one Hour of Service
after September 30, 1989 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 sum of (i) the total amount in the
Member's Common Stock Account and Investment Account
determined in accordance with the provisions of Section
6.3 of the Plan multiplied by the appropriate percentage
from the following table, unless such Member again
becomes an Employee prior to the date such amount is
distributed, and (ii) the total amount in such Member's
PAYSOP Account, which shall be nonforfeitable at all
times. Such benefit shall be paid at the applicable time
or times and in the applicable form provided under this
Article 6.
Length of Member's
Period of Service Vested Percentage
Less than 5 years 0
5 years or more 100
Members who did not have at least one Hour of Service after
September 30, 1989 shall have their vested benefits (if any)
hereunder determined under the vesting schedule as it existed
under the Plan before October 1, 1989. Notwithstanding anything
herein to the contrary, a Member's Accounts shall be fully vested
and nonforfeitable upon his death or his attainment of age 55 or
upon his disability (for this purpose only those who are eligible
for and have actually received a benefit under the Ashland Inc.
Long Term Disability Plan shall be deemed to have incurred a
disability); provided, however, that any Member with an Account
under the Plan on March 31, 1996 shall be fully vested and have a
nonforfeitable interest in such Account.
(b) Forfeiture Provisions.
(1) Forfeiture for Break in Service. If a Member
incurs five consecutive One-Year Periods of
Severance, then his forfeitable interest (as of
such incurrence) in his Accounts shall be
forfeited and reallocated as provided in Article
5 as of the end of the Plan Year in which such
Member receives the distribution.
(2) Cash-Out Distributions and Restorations.
(i) Forfeiture. A Member who incurs a
Termination of Employment (for a reason
other than death) at a time when he has
no vested interest in his Accounts
shall be treated as immediately
receiving a distribution of the present
value of his entire nonforfeitable
interest which is less than or equal to
$5,000 and his forfeitable interest
therein shall be forfeited and
reallocated as provided in Article 5 as
of the end of the Plan Year in which
such Member is deemed to receive the
distribution, provided such Member is
not employed with a Participating
Company or an Affiliated Company at
such time.
(ii) Restoration. Effective March 31, 1996,
any amount that a Member forfeited
under (i) above shall be automatically
restored, unadjusted for any gains or
losses, if such Member resumes
employment before April 1, 1996 with a
Participating Company or an Affiliated
Company covered by the Plan before he
incurs five consecutive One-Year
Periods of Severance.
(iii) Source of Restoration. Any restoration
under (ii) above shall be made from
available forfeitures before any other
allocation thereof, and, if such
forfeitures are insufficient, then such
shall be made from such source within
the Plan as the Trustee determines is
available for the same, and, if there
is none, then the applicable
Participating Company shall contribute
the difference.
(3) Distributions of Less Than 100%. If a Member who
receives a distribution of less than 100% of his
Accounts is rehired, such Member may repay the
amount of the distribution received by him
provided that such repayment is made before the
earlier of:
(A) the Member's incurrence of 5
consecutive One-Year Periods of
Severance after such distribution , or
(B) 5 years after the first date on which
the Member is reemployed by a
Participating Company.
As of the date of such repayment, his Account will be credited
with the amount of his repayment plus the amount forfeited
pursuant to the preceding paragraph. In the event a rehired Member
fails to make a repayment by the time prescribed above, his Period
of Service after his date of rehire shall not be taken into
account in determining the vested percentage of his Account that
accrued prior to his Termination of Employment. Notwithstanding
anything to the contrary contained herein, repayments to the Plan
under this sub-paragraph (3) will not be allowed after March 31,
1996, due the discontinuance of contributions to the Plan from and
after that time, as provided under Section 4.1.
(4) Vesting Upon Termination or Partial Termination
of the Plan or Discontinuance of Contributions.
Notwithstanding any provisions to the contrary
contained herein, upon the termination or
partial termination of the Plan or the complete
discontinuance of contributions under the Plan,
the amounts then credited to all affected
Members' Accounts shall be nonforfeitable.
Effective March 31, 1996, for purposes of this
sub-paragraph (4) and for purposes of Section
14.3, the "affected Members" shall be only those
Members who had Accounts under the Plan as of
March 31, 1996.
6.2 Payment of Benefits--General Rules.
(a) Incorporation. Notwithstanding anything to the contrary
contained in the Plan, all distributions under the Plan
shall be determined and made in accordance with Section
401(a)(9) of the Code and the regulations thereunder,
including the minimum distribution incidental benefit
requirement of Treasury Regulation Section 1.401(a)(9)-2.
The requirements of Section 401(a)(9) of the Code and the
regulations thereunder, as they now exist or may be
hereafter amended, are hereby incorporated herein by
reference and made a part hereof to the extent that such
requirements are not otherwise specifically set forth in
the Plan and to the extent that such requirements are not
in conflict with any legally permissible provision of the
Plan. Notwithstanding any provision of the Plan to the
contrary, distributions made on or after December 1, 2001
for calendar years beginning on or after January 1, 2001
shall comply with the minimum distribution requirements
of section 401(a)(9) of the Internal Revenue Code that
are prescribed in the section 401(a)(9) regulations
proposed on January 17, 2001 (the 2001 Proposed
Regulations). If the total amount of required minimum
distributions to an individual for 2001 prior to December
1, 2001 are equal to or greater than the amount of
required minimum distributions determined under the 2001
Proposed Regulations, then no additional distributions
are required for such individual for 2001 on or after
such date. If the total amount of required minimum
distributions made to an individual for 2001 prior to
December 1, 2001 are less than the amount determined
under the 2001 Proposed Regulations, then the amount of
required minimum distributions for 2001 on or after such
date will be determined so that the total amount of
required minimum distributions for 2001 is the amount
determined under the 2001 Proposed Regulations. This
provision shall continue in effect until the last
calendar year beginning before the effective date of the
final regulations under section 401(a)(9) or such other
date as may be published by the Internal Revenue Service.
(b) Lifetime Distribution Periods. Distributions to a Member
during his life shall commence no later than the time
specified in (c)(2) of this Section 6.2. Such
distributions shall, as of the first distribution
calendar year, if not made in a single sum to a Member,
be made over any of the following periods (or any
combination thereof):
(1) the life of the Member;
(2) the lives of the Member and his designated
beneficiary;
(3) a period certain not extending beyond the life
expectancy of the Member;
(4) a period certain not extending beyond the joint
life and last survivor expectancy of the Member
and his designated beneficiary.
For purposes of this Section 6.2, a Member's designated
beneficiary shall be his Beneficiary.
(c) 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 the
date on which he commenced
participation in the Plan, or
(C) terminates his service with the
Participating Company and all
Affiliated Companies; or
(2) the April 1 of the calendar year following the
calendar year in which the Member attains age 70
1/2. For Members that attain age 70 1/2 in 2000,
sub-paragraph (2) above is changed. It is
changed to 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.
(d) Life Expectancy. For purposes of this Section 6.2, the
life expectancy of any individual to whom a distribution
is payable shall not be recalculated once such
distribution commences with respect to such individual or
with respect to another individual through whom or after
whom such individual may become entitled to the
distribution. Notwithstanding anything to the contrary,
minimum distributions made after December 31, 2001 will
have the life expectancy recalculated.
(e) Death Distribution Periods.
(1) Commencement. In the event a Member dies prior
to the commencement of his distribution under
Section 6.3 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, 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 the designated beneficiary's life
or a period certain not greater than
such beneficiary's life expectancy;
(B) if there is no designated beneficiary,
a period ending on December 31 of the
calendar year containing the fifth
anniversary of the Participant'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.
(f) Death of Spouse. For purposes of (e) above, if the
surviving spouse dies before payments to such spouse
begin, then the provisions of (e)(1)(B) and (e)(2)(A)
above shall apply as if such spouse were the Member.
(g) Method of Compliance. To comply with the provisions of
this Section 6.2, distributions to a Member who remains
employed with a Participating Company beyond the calendar
year during which such Member attains age 69 1/2 (70 1/2
for Members who attain 70 1/2 in 2000) shall be made as
soon as reasonably practicable after January 1 of each
calendar year following the calendar year during which
such Member attained age 69 1/2 (70 1/2 for Members who
attain 70 1/2 in 2000) in an amount based upon the value
of the Member's Accounts as of the last Valuation Date in
the immediately preceding calendar year and the amount of
such payment shall be equal to the amount determined by
dividing the value of such Member's Accounts, determined
as of the said Valuation Date, by 15, reduced by one for
each calendar year which follows the calendar year in
which distributions first commenced under this paragraph
(g). The portion of any amount so determined which is
distributed from a Member's Common Stock Account (and
PAYSOP Account, if applicable) shall be distributed as
Common Stock, rounded to the nearest whole number of
shares, and such Common Stock which is attributable to a
Member's Common Stock Account shall be divided equally
between such Member's Offset Account and Non-Offset
Account. Distributions after December 1, 2001 shall be
determined using a different quotient than the one
identified in the immediately preceding sentence. The
amount of these distributions shall be determined by the
quotient obtained by dividing the Accounts so determined
by the applicable distribution period in the table
prescribed in Prop. Reg ss.1.401(a)(9)-5, Q&A-4, with one
exception. If the Member's sole designated beneficiary is
the Member's spouse, then the applicable distribution
period is the longer of the one derived from the table in
the cited proposed regulation or the one derived from the
applicable table prescribed by the Internal Revenue
Service for the joint life expectancy of the Member and
the Member's spouse using the attained ages for the same
in the distribution calendar year. Distributions of death
benefits shall comply with the provisions of this Section
6.2 by being distributed under the other relevant
provisions this Article 6, provided that such
distributions are not made at a later time or over a
longer period of time than is allowed under this Section
6.2.
6.2 Required Distributions.
(a) Effective Date. The provisions of this Section 6.2 are
effective for distributions after December 31, 2002.
These provisions replace the prior provisions of Section
6.2 effective January 1, 2003.
(b) Precedence. The requirements of this Section 6.2 will
take precedence over any inconsistent provisions of the
Plan.
(c) Incorporation. Distributions that are required by this
Section 6.2 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 6.2. 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 6.2, 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 (d) do not apply if a distribution is
made pursuant to Section 6.3 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
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 6.2, 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 6.2 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 6.2 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 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
payments in Section 6.3 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 6.2, distributions to a Member shall begin
no later than the Member's required beginning date under
Section 6.2(e)(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 Accounts 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 (i) of this
Section 6.2. Distributions of death benefits shall comply
with the provisions of this Section 6.2 by being
distributed under the other relevant provisions this
Article 6, provided that such distributions are not made
at a later time or over a longer period of time than is
allowed under this Section 6.2.
6.3 Payment of Benefit.
(a) General. Except as otherwise provided in Sections 6.2 and
6.4 of the Plan, and subject to paragraph (b) of this
Section 6.3, the Sponsoring Company shall cause the
distribution of benefits in a single lump sum to be paid
to a Member or his Beneficiary as soon as reasonably
practicable after such Member's Termination of Employment
(or death, in the case of a payment to a Beneficiary),
based upon the value of such Member's Common Stock
Account, Investment Account and PAYSOP Account as of the
Valuation Date coincident with or immediately following
the date on which such Member incurs a Termination of
Employment (or death).
(b) Consent. If the value of a Member's nonforfeitable
Accounts exceeds or at the time of any prior distribution
exceeded $5,000 at the time when such Member is entitled
to a distribution under paragraph (a) of this Section 6.3
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. For
distributions on or after January 1, 2002, the phrase "or
at the time of any prior distribution exceeded" is
deleted. 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 6.3 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.
6.4 Form of Distribution. Subject to a Member's election under
this Section 6.4, distributions of Members' Common Stock Accounts,
Investment Accounts and PAYSOP Accounts shall be made in Common Stock,
except for fractional shares which shall be distributed in cash. When
fractional shares are sold to effect distributions to Members and
Beneficiaries, the proceeds of such sale shall be apportioned among those
receiving such distributions in accordance with their respective interests
in the total of the fractional shares sold. Full shares being distributed
in Common Stock shall be valued at the price used by the Trustee to value
such Common Stock on the Valuation Date as of which distributions are being
made. In lieu of the foregoing, a Member entitled to a distribution may
elect, in such form and manner, and at such time (not later than 60 days
after such Member's Termination of Employment) as the Sponsoring Company
may from time to time prescribe, one of the following methods of
distribution:
(a) Cash. Benefits may be distributed in cash in lieu of full
and fractional shares. When full and fractional shares
are sold to effect distributions to Members and
Beneficiaries, the proceeds of such sale shall be
apportioned among those receiving such distributions in
accordance with their respective interests in the total
of the full and fractional shares sold. A Member's
election of a cash distribution under this paragraph (a)
must be made within 60 days of his Termination of
Employment, or within such other period of time as may be
prescribed by the Sponsoring Company, from time to time.
For Members who are married at the time of their election
of a distribution, such election under this paragraph (a)
is subject to the spousal consent requirements described
under paragraph (b) of this Section 6.4. Notwithstanding
anything in the foregoing to the contrary, effective on
or after June 30, 1994, a Member (or Beneficiary) may
elect to have all of his benefits distributed in cash as
described above, except that the whole shares of Common
Stock allocated to his Common Stock Account within six
months of the date of the distribution would be
distributed in Common Stock. For these purposes,
dispositions of whole shares of Common Stock to
facilitate cash distributions shall be deemed to consist
of the Common Stock which was allocated to the Member's
Account more than six months before the distribution, to
the extent there was Common Stock so allocated at that
time.
(b) Transfer to Pension Plan. Benefits may be paid by
transferring the value of such Member's nonforfeitable
percentage in his Offset Account to any defined benefit
plan in which the Member participates (if such defined
benefit plan is maintained as a floor plan with respect
to this Plan and if such arrangement was in effect before
December 18, 1987) with the actuarial equivalent of such
transferred value to be paid in such form and at such
time as may be elected by the Member under such defined
benefit plan. The remaining portion of the Member's
nonforfeitable benefit hereunder shall be distributed in
Common Stock as provided in this Section 6.4, unless,
effective October 1, 1998, or as soon thereafter as
administratively feasible, the Member elects to have such
remaining portion of the nonforfeitable benefit
distributed in cash. A Member can only elect to have the
remaining portion of the nonforfeitable benefit
distributed in cash if the sum of the whole and
fractional shares of Common Stock allocated to such
Member's Non-Offset Account and PAYSOP Account is less
than 100. When full and fractional shares are sold to
effect distributions to Members, the proceeds of such
sale shall be apportioned among those receiving such
distributions in accordance with their respective
interests in the total of the full and fractional shares
sold. Except as otherwise allowed under Section 6.2 and
unless a Member's spouse consents within 90 days of the
date as of which a distribution is to commence, in the
manner prescribed under Section 2.1(c) and complies with
such other requirements applicable to plans subject to
the survivor annuity requirements of Code Sections
401(a)(11) and 417, to a distribution made in the manner
allowed under paragraph (a) of this Section 6.4, the
benefit of a Member who is married at the time of an
election of a distribution hereunder shall be distributed
pursuant to the rules of this paragraph (b), unless the
benefit is valued at less than $5,000 (including the
amount of any prior distributions, for this purpose) at
the time of the distribution. Effective on and after June
30, 1994, the Common Stock allocated to the Member's
Offset Account shall be deemed to consist of the Common
Stock first allocated to such Member's Account on a
first-in-first-out basis. For purposes of this paragraph
(b), the nonforfeitable percentage of a Member's Common
Stock Account shall be deemed to be equally divided
between the Offset Account and Non-Offset portions
thereof. When fractional shares are sold to effect
distributions to Members, the proceeds of such sale shall
be apportioned among those receiving such distributions
in accordance with their respective interests in the
total of the fractional shares sold. Notwithstanding any
provisions of the Plan to the contrary, a Beneficiary may
not elect to receive a distribution under this paragraph
(b).
(c) Transfers. Subject to the satisfaction of the following
requirements, a Member may make a voluntary and informed
election directing that his entire vested 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 to
remain in this Plan for the
maximum period of time allowed
under Sections 6.2 and 6.3 of
the Plan.
(ii) If married, the Member's spouse
must execute a written consent,
witnessed by a notary public or
plan representative, to the
transfer within the 90-day
period ending on the Member's
annuity starting date which
specifies the identity of the
transferee plan and which
acknowledges the effect of such
consent. However, if it is
established to the satisfaction
of the Sponsoring Company that
a written consent 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 no spousal
consent, as described herein,
is required.
(iii) Any applicable notice
requirements prescribed under
section 417 of the Code must be
met with regard to the
transfer.
(iv) The 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(l) of the Code.
(v) Except as otherwise provided,
the transfer of the Member's
Account consisting of his
Common Stock Account,
Investment Account and PAYSOP
Account shall be made in Common
Stock, except that fractional
shares shall be sold with the
proceeds of such sale
apportioned among the Members
making direct transfers
hereunder and those receiving
other distributions hereunder
as otherwise provided in
accordance with their
respective interest in the
total of the fractional shares
so sold. A Member may elect, in
such form and manner, and at
such time (not later than 60
days from the date an election
form for this purpose is mailed
to the Member), as prescribed
by the Sponsoring Company, to
have the Common Stock allocated
to such Member sold with the
proceeds received therefrom
transferred to the transferee
plan. The cash proceeds of any
such sale to effect cash
transfers hereunder and other
cash distributions hereunder
shall be apportioned among the
Members making such transfers
and those receiving other such
distributions in accordance
with their respective interest
in the total of the full and
fractional shares sold, reduced
by the costs of such sale.
Notwithstanding anything to the
contrary contained herein, no
election to have a Member's
Account transferred in the form
of cash shall be effective
unless it is received by the
Sponsoring Company within 75
days of the date the election
form prescribed for this
purpose was mailed to the
Member.
(vi) 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 (v)
immediately above, and that the
transferee plan meets the
applicable provisions of (iv)
above.
(d) Distribution Exceptions. Notwithstanding anything in the
Plan to the contrary, and to the extent permissible under
law, if the Common Stock related to the Common Stock
Accounts portion of the Plan have been held by the Plan
for at least the prior five Plan Years (or throughout the
entire period of existence of the portion of the Plan
related to the Common Stock Accounts, if shorter), the
following distribution rules may apply to the Common
Stock Accounts:
(1) The Sponsoring Company retains the discretion to
eliminate the single sum optional form of
benefit in a nondiscriminatory manner.
(2) The Sponsoring Company retains the discretion to
eliminate distributions of Common Stock from
Common Stock Accounts and to substitute the same
with cash distributions, in a non-discriminatory
manner, under any one of the following
circumstances:
(A) the portion of the Plan relating to the
Common Stock Accounts ceases to be an
employee stock ownership plan and stock
bonus plan within the meaning of
Section 4975(e)(7) of the Code;
(B) substantially all of the Common Stock
held by or allocable to Common Stock
Accounts are sold in connection with a
sale of substantially all of a
Participating Company or the company
which issued such securities;
(C) the Common Stock cease to be readily
tradable; provided, however, that a
distributee shall have the right to
demand a distribution of Common Stock
in such form and manner, and at such
time (not later than 60 days after such
distributee's entitlement to such
distribution) as the Sponsoring Company
may from time to time prescribe;
(D) substantially all of the stock or
assets of a trade or business of a
Participating Company or the company
which issued the Common Stock are sold
and the purchasing employer continues
to maintain the Plan (in this case,
distributions in the form of employer
securities of the purchasing employer
may be made instead of or in addition
to cash); and
(E) any other circumstances permissible
under law.
6.5 Distributees.
(a) If the Sponsoring Company shall be in doubt as to the
right of any person as a Beneficiary under Section
2.1(c), 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 period or entity) to
any person claiming under or through such Member.
(b) If a Member or Beneficiary entitled to receive a
distribution under the Plan is physically or mentally
incapable or incompetent to receive such distribution and
no guardian, committee or other legal representative of
such Member or Beneficiary has been duly appointed,
payment of the distribution may be made to any person or
institution then maintaining or having custody of such
Member or Beneficiary. Such payment shall operate as a
complete discharge of the obligations under the Plan of
the Sponsoring Company, the Trustee and any delegatee or
redelegatee thereof.
(c) 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 paragraph (c)
shall be reallocated to the remaining Members in the Plan
in accordance with the provisions of Article 5 of the
Plan. Restorations under this paragraph (c) shall be made
in the following order of priority: (i) by way of
offsetting forfeitures then arising under this paragraph
(c); (ii) by way of allocation from any suspense account
maintained under Section 5.7 of the Plan; (iii) by way of
allocation from income of the Trust Fund to be allocated
to Members under Section 5.3 of the Plan as of the
Valuation Date next following the date of restoration is
determined to be made, and (iv) by way of allocation from
the Participating Company contributions next following
the date restoration is determined to be made.
6.6 Direct Rollovers.
(a) General. Subject to the exceptions and limitations
contained in this Section 6.6, 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 6.6 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 6.3(b) of the Plan, or in
any other case when the consent requirements of
Section 6.3(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 6.3(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) 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
8.8. 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 6.6, 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) Dividends paid on employer securities
as described in Code Section 404(k) and
as provided for in Section 8.1 of the
Plan; and
(E) 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, 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.
(II) 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 7
Trust Fund
7.1 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 a separate Account is 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.
7.2 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 be responsible for
establishing a funding policy and method consistent with the objectives of
the Plan and the requirements of Title I or ERISA.
7.3 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.
7.4 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.
7.5 Diversification Elections.
(a) Election by Qualified Member. Each Qualified Member shall
be permitted to direct the Plan (as prescribed under (b)
and (c) below) as to the investment of 25 percent of the
shares of Common Stock allocated to his Non-Offset
Account and 25 percent of the shares of Common Stock
allocated to his PAYSOP Account (as determined under (d)
below) during the period beginning on July 15 and ending
on the immediately following October 15 for the Plan Year
in which falls such July 15 and which is part of such
Qualified Member's Qualified Election Period; provided,
however, that "50 percent" shall be substituted for "25
percent" above for the Plan Year during such Qualified
Member's Qualified Election Period which ends in the
calendar year in which such Qualified Member attains age
60, and for each subsequent Plan Year in such Qualified
Member's Qualified Election Period. Notwithstanding
anything contained herein to the contrary, effective on
and after October 1, 1999, each Qualified Member shall,
in addition to the amounts identified above, also be
permitted to direct the Plan as to the investment of:
(i) 25% of the shares of Common Stock allocated to
his PAYSOP Account and 50% of the of the shares
of Common Stock allocated to his Non-Offset
Account attributable to in-kind stock dividends
that were used to acquire Common Stock; and
(ii) 25% of the shares of Common Stock allocated to
his PAYSOP Account and 50% of the of the shares
of Common Stock allocated to his Non-Offset
Account attributable to cash dividends paid on
in-kind stock dividends that were paid to his
Common Stock Account.
The references to "25%" and "50%" in (i) and (ii) hereinabove shall be
changed to "50%" and "100%," respectively, for the Plan Year during such
Qualified Member's Qualified Election Period which ends in the calendar
year in which such Qualified Member attains age 60, and for each subsequent
Plan Year in such Qualified Member's Qualified Election Period. Elections
hereunder can only be made for the percentage of shares of Common Stock
allocated to the particular Non-Offset Account and PAYSOP Account (as
determined under (d) below); such elections cannot be made for any lesser
or greater percentage of such Common Stock; and such elections shall,
subject to the applicable limits prescribed in (d) below, apply equally to
both such Accounts.
(b) Method of Directing Investment. The Qualified Member's
investment direction under (a) above shall be provided to
the Sponsoring Company or to its delegate, which may
include the Trustee, in writing, or in or through such
other medium and in such format as may be prescribed by
the Sponsoring Company, from time to time, and such
investment direction shall be effective no later than 40
days after the close of the particular Plan Year of the
Qualified Election Period to which such investment
direction relates, provided that such investment
direction is received no later than the date specified by
the Sponsoring Company as the date by which such a
direction must be filed. The Sponsoring Company reserves
the right to prescribe administratively convenient rules
applicable to Member investment directions made
hereunder, including the right to change such rules, from
time to time.
(c) Investment Options.
(i) General. Except as otherwise provided in
sub-paragraph (ii) of this paragraph (c), the
amount of Common Stock subject to the Qualified
Member's investment direction shall be
transferred directly by the Trustee to the
trustee under the Ashland Inc. Employee Savings
Plan and placed in the Unrestricted Ashland
Common Stock Fund pending investment pursuant to
such Qualified Member's direction in and among
the particular investment funds or options then
available under such Savings Plan. The amount so
transferred to such Savings Plan shall
thereafter be subject to the applicable rules of
such Savings Plan. A Member described in
sub-paragraph (ii) of this paragraph (c) is not
eligible to have the amount of the Common Stock
subject to his or her investment direction
transferred to such Savings Plan.
(ii) Members Employed by Certain Affiliated
Companies. For purposes of this Section 7.5, a
Member employed with the Marathon Ashland
Petroleum LLC or any of its subsidiaries and who
is otherwise a Qualified Member shall,
notwithstanding any provisions hereof to the
contrary, have the amount subject to such
Member's election under paragraph (b) of this
Section 7.5 distributed to such Member. Such
distribution shall, unless elected otherwise by
the Member, be distributed in Common Stock, with
fractional shares distributed in cash. Such
Member shall be allowed to elect to have the
distribution made entirely in cash. The
Sponsoring Company may prescribe administrative
procedures to effectuate distributions under
this sub-paragraph (ii) of this paragraph (c),
from time to time, and such distributions shall
be subject to the provisions of Section 6.6 of
the Plan on direct rollovers.
(d) Determination of Amount Subject to Diversification
Requirements. The portion of a Qualified Member's
Non-Offset Account and PAYSOP Account subject to the
investment direction provided under (a) above for all
Plan Years in the Qualified Election Period shall be
equal to (1) 25 percent (50 percent for Plan Years ending
in and after the calendar year in which the Qualified
Member attains age 60) of the total number of shares of
Common Stock allocated to each such Qualified Member's
Non-Offset Account and PAYSOP Account as of September 30
of the Plan Year to which the investment direction
relates (determined separately for each such Account),
plus any shares of Common Stock that were subject to a
prior investment direction pursuant to the provisions of
this Section 7.5 (also determined separately for each
such Account), less, (2) the number of shares of Common
Stock previously subject to an investment direction under
this Section 7.5, determined separately for each such
Account. For purposes of determining the number of shares
of Common Stock subject to an investment direction, the
number of shares derived from the foregoing may be
rounded to the nearest whole integer. For these purposes,
shares of Common Stock allocated to a Member's Non-Offset
Account which are invested pursuant to an election
hereunder shall be deemed to first consist of shares of
Common Stock allocated to such Member's Common Stock
Account which were acquired by the Plan after December
31, 1986. Effective on and after October 1, 1999, the
portion of a Qualified Member's Non-Offset Account and
PAYSOP Account subject to the investment direction
provided under (a) above for all Plan Years in the
Qualified Election Period shall also include (1) for the
Non-Offset Account 50 percent (100 percent for Plan Years
ending in and after the calendar year in which the
Qualified Member attains age 60) and for the PAYSOP
Account 25 percent (50 percent for Plan Years ending in
and after the calendar year in which the Qualified Member
attains age 60) of the total number of shares of Common
Stock attributable to in-kind stock dividends or cash
dividends on in-kind stock dividends allocated to each
such Qualified Member's Non-Offset Account and PAYSOP
Account as of September 30 of the Plan Year to which the
investment direction relates (determined separately for
each such Account), plus any such shares of Common Stock
that were subject to a prior investment direction
pursuant to the provisions of this Section 7.5 (also
determined separately for each such Account), less, (2)
the number of such shares of Common Stock previously
subject to an investment direction under this Section
7.5, determined separately for each such Account. For
purposes of determining the number of shares of Common
Stock subject to an investment direction, the number of
shares derived from the foregoing may be rounded to the
nearest whole integer.
ARTICLE 8
Administration of the Plan
8.1 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.
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.
8.2 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 may be
delegated to anyone other than a fiduciary identified pursuant to Section
7.2 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.
8.3 Liability. The Board of Directors of the Sponsoring Company
and any delegatee, redelegatee, or designee (other than the Trustee), and
any employee of a Participating Company or Affiliated Company serving the
Plan an any capacity within the scope of this 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.
8.4 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 successor (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 of (or redelegatee) the Sponsoring Company, provided
such person acted, in good faith, in what he reasonably believed to be the
best interests 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 8.4 shall not
be construed to limit whatever rights of indemnity to which the persons
specified in this Section 8.4 and such other persons not described in the
foregoing provisions of this Section 8.4 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.
8.5 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 expense 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.
8.6 Voting of Shares. All voting rights with respect to Common
Stock (and qualifying employer securities as defined under Section
407(d)(5) of ERISA, if any) 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 8.6) acting in their capacity as named
fiduciaries (within the meaning of ERISA Section 402) in accordance with
the provisions of this Section 8.6. 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 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 such securities (I)
allocated to such Member's Common Stock Account (determined as of the most
recent Valuation Date for which information is readily available), and on
how to separately vote (II) a proportionate share (based on the amount of
Common Stock then allocated to his Common Stock Account) of (i)
Non-Directed Securities (defined below), (ii) any Common Stock then
allocated to the Unallocated Transfer Common Stock Account and to the
Unallocated Loan Common Stock Account, and (iii) any Common Stock then in
the suspense account under Section 5.7(c)(2). For purposes of this Section
8.6, Non-Directed Securities shall mean that Common Stock allocated to
Members' Common Stock Accounts for which instructions are not timely
received by the Trustee, as well as any Common Stock allocated to Members'
Common Stock Accounts after the time prescribed for returning the said
instructions to the Trustee. Upon receipt of such instructions, the Trustee
shall vote such shares as instructed. In lieu of voting Members' 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 (i), (ii) and
(iii) in said clause (II) multiplied by a fraction, the numerator of which
is the number of shares of Common Stock allocated to the Member's Common
Stock Account and the denominator of which is the total number of shares of
Common Stock allocated to the Common Stock Accounts of all such Members who
have timely provided instructions to the Trustee with respect to the Common
Stock referred to in (i), (ii) and (iii) in said clause (II). For purposes
of this Section 8.6, fractional shares shall be rounded to the nearest
1/1,000th of a share. The instructions received by the Trustee from a
Member under this Section 8.6 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, unless otherwise
required by law.
8.7 Effectiveness of Elections. An election, designation,
direction, request or revocation provided for in the Plan shall be made in
writing on a form an in such manner as prescribed by the Sponsoring Company
and shall not become effective until it has been properly filed with the
Sponsoring Company under such procedures as prescribed by the Sponsoring
Company, uniformly applicable to Members and Beneficiaries.
8.8 Service In More Than One Fiduciary Capacity. Any person or
entity may serve in more than one fiduciary capacity for the Plan,
including service as both administrator and as trustee.
ARTICLE 9
Benefit Claims Procedure
9.1 Claims for Benefits. If any claim (within the meaning of
Section 503 of ERISA) for benefits under the Plan is wholly or partially
denied, the Sponsoring Company shall, within 90 days after receipt of the
claim, notify the Member or Beneficiary of the denial of the claim. Such
notice of denial (i) shall be in writing, (ii) shall be written in a manner
calculated to be understood by the Member or Beneficiary, and (iii) shall
contain (A) the specific reason or reasons for denial of the claim, (B) a
specific reference to the pertinent Plan provisions upon which the denial
is based, (C) a description of any additional material or information
necessary to perfect the claim, along with an explanation of why such
material or information is necessary, and (D) an explanation of the claim
review procedure, in accordance with the provisions of this Article 9. If
the claim is not granted and if a response is not made to the Member or
Beneficiary within the time prescribed therefor under this Section 9.1,
then the Member or Beneficiary may deem such claim to be denied and proceed
under the provisions of Section 9.2 of the Plan.
9.2 Request for Review of Claim Denial. Within 60 days after the
receipt by the Member or Beneficiary of a written notice of denial of the
claim, or such later time as shall be deemed reasonable by the Sponsoring
Company taking into account the nature of the benefit subject to the claim
and any other attendant circumstances, the Member or Beneficiary may file a
written request with the Sponsoring Company that it conduct a full and fair
review of the denial of the claim for benefits. Such written request shall
be filed in such form and manner and at such time as the Sponsoring Company
may from time to time prescribe.
9.3 Decision on Review of Claim Denial. The Sponsoring Company
shall made its determination in accordance with the documents governing the
Plan insofar as such documents are consistent with the provisions of Title
I of ERISA. The Sponsoring Company shall deliver to the Member or
Beneficiary its written decision on the claim within 60 days after the
receipt of the aforesaid request for review, except that if there are
special circumstances (such as a conference with the Member or Beneficiary
or their representatives) which require an extension of time, the aforesaid
60 day period shall be extended to 120 days. Such decision shall (i) be
written in a manner calculated to be understood by the Member or
Beneficiary, (ii) include the specific reason or reasons for the decision,
and (iii) contain a specific reference to the pertinent Plan provisions
upon which the decision is based. If a response is not made to the Member
or Beneficiary within the time prescribed therefor under this Section 9.3,
then the Member or Beneficiary may deem such claim to be denied. Any
decision on the review of a claim denial under this Section 9.3 is final
and binding on all those affected.
Effective for claims incurred after December 31, 2001, the foregoing
provisions shall be replaced with the following new provisions of this
Article 9.
9.1 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.
9.2 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 10
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 an 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; and (ii) the recovery by the Plan of
overpayment of benefits previously made to a Member or Beneficiary or (iii)
the creation, assignment, or recognition of a right to any benefit payable
pursuant to a qualified domestic relations order as defined in ERISA or the
Code. Notwithstanding anything to the contrary contained herein, and to the
extent not otherwise prohibited under federal law, any alternate payee
under an approved qualified domestic relations order as defined in ERISA or
the Code shall not be entitled to make an election to diversify under
Section 7.5.
ARTICLE 11
Adoption of Plan By Affiliates
An affiliate of the Sponsoring Company described in this Article
11 may, with the approval of the Sponsoring Company, adopt this Plan
pursuant to appropriate written resolutions of the board of directors of
such affiliate and by executing such documents with Trustee as may be
necessary to made such affiliate a party to the Trust as a Participating
Company. Any affiliate which adopts the plan is thereafter a Participating
Company with respect to its Employees for purposes of the Plan and a part
to the Trust. This Article 11 shall apply only to:
(a) members of a controlled group of corporations (as defined
in Section 1563(a) of the Code determined without regard
to subsections (a) (4) and (e) (3) (C) of Section 1563 of
the Code) of which the Sponsoring Company is a member;
(b) if the Sponsoring Company owns directly stock possessing
at least 50 percent of the voting power of all classes of
stock and at least 50 percent of each class of nonvoting
stock in a first tier subsidiary, such first tier
subsidiary and all other corporations below it in the
chain which would meet the 80 percent test of Section
1563(a) of the Code if such first tier subsidiary were
the common parent; and
(c) if the Sponsoring Company owns directly stock possessing
all of the voting power of all classes of stock and all
of the nonvoting stock in a first tier subsidiary, and if
such first tier subsidiary owns directly stock possessing
at least 50 percent of the voting power of all classes of
stock and at least 50 percent of each class of nonvoting
stock in a second tier subsidiary of the Sponsoring
Company, such second tier subsidiary and all other
corporations below it in the chain which would meet the
80 percent test of Section 1563(a) of the Code if such
second tier subsidiary were the common parent.
ARTICLE 12
Withdrawal of Participating Company from Plan
12.1 Notice of Withdrawal. Any Participating Company, with the
consent of the Sponsoring Company, may withdraw from the Plan upon giving
the Sponsoring Company and the Trustee at least 30 days' notice in writing
of its intention to withdraw. Such consent shall not be given by the
Sponsoring Company unless adequate provision shall be made for the
satisfaction of any Current Obligations attributable to the Participating
Company.
12.2 Segregation of Trust Assets Upon Withdrawal. After the
withdrawal of a Participating Company pursuant to Section 12.1, the Trustee
shall segregate an 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.
12.3 Exclusive Benefit of Members. Except as otherwise allowed by
law, neither the segregation and transfer of the Trust assets after 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.
ARTICLE 13
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 14
Permanency of the Plan and Plan Termination
14.1 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).
14.2 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.
14.3 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 Trust,
permanently discontinue all further contributions by such Participating
Company. The Sponsoring Company shall ensure that any Current Obligations
attributable to such Participating Company are satisfied or allocated to
the other Participating Companies. 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. In the event
of the complete discontinuance of contributions by a Participating Company,
Accounts of affected Members shall be fully vested and nonforfeitable. For
purposes of this Section 14.3 and for purposes of Section 6.1 (b) (4), the
"affected Members" shall be only those Members who had Accounts under the
Plan as of March 31, 1996.
14.4 Termination of Plan and Trust. If the Sponsoring Company
determines to terminate (as to any or all Participating Companies) the Plan
and Trust completely, they shall be terminated insofar as they are
applicable to such Participating Companies 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 Companies' Members' Accounts shall be fully
vested and nonforfeitable and the Members shall be entitled to receive the
amounts then credited to their respective Accounts in the Trust Fund.
Distributions shall be made in Common Stock or in cash in the event it is
or becomes impossible or inadvisable for the Trustee to hold Common Stock
in the Trust Fund.
Notwithstanding anything in this Section 14.4 to the contrary, if
at the time of any termination of the Plan with respect to any or all
Participating Companies, shares of Common Stock remain in the Unallocated
Transfer Common Stock Account, or are held in an unallocated suspense
account as provided in Section 5.7(c)(2), the Trust shall not be terminated
with respect to any such affected Participating Company and the provisions
of Section 14.3 shall be deemed to apply to any such affected Participating
Company until all such shares of Common Stock have been allocated to
Members' Accounts in accordance with the provisions of the Plan.
ARTICLE 15
Miscellaneous
15.1 Status of Employment Relations. Nothing herein contained
shall be deemed (k) to give to any employee the right to be retained in the
employ of a Participating Company or an Affiliated Company; (ii) to affect
the right of a Participating Company or an Affiliated Company to terminate
or discharge any employee at any time; (iii) to give a Participating
Company or an Affiliated 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.
15.2 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.
15.3 Legal Effect. The Plan described herein shall amend and
supersede, as of October 1, 1997 and at such other individual effective
dates as indicated throughout, as applicable, all provisions in the Plan
effective October 1, 1989 and at such other individual effective dates as
indicated throughout, as amended.
15.4 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. 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 16
TENDER OFFER
16.1 Applicability. The provisions of this Article 16 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 (including for purposes of this Article
16 only, qualifying employer securities as defined under Section 407(d)(5)
of ERISA, to the extent applicable) (herein jointly and severally referred
to as a "tender offer").
16.2 Instructions to Trustee. All decisions with respect to tender
offers 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 16) acting
in their capacity as named fiduciaries (within the meaning of ERISA Section
402) in accordance with the provisions of this Article 16. In the event a
tender offer is received by the Trustee (including a tender offer for
shares of 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 16.1, to purchase or exchange any shares of Common Stock held by
the Trustee, the Trustee shall inform each Member, in writing, of the terms
of the tender offer as soon as practicable and shall furnish to each 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 Member to be returned to the Trustee requesting separate
instructions from the Member, acting in his capacity as a named fiduciary,
on whether or not to sell, offer to sell, exchange or otherwise dispose of
Common Stock (I) allocated to such Member's Common Stock Account
(determined as of the most recent Valuation Date for which information is
readily available), and (II) a proportionate share (based on the amount of
Common Stock then allocated to his Common Stock Account) of (i) any Common
Stock then allocated to the Unallocated Transfer Common Stock Account and
the Unallocated Loan Common Stock Account, and (ii) any Common Stock then
in the suspense account under Section 5.7(c)(2). Upon receipt of such
separate instructions, the Trustee shall act upon the tender offer as
instructed. The number of shares to which a Member's direction under clause
(II), above, applies shall be the number of shares equal to the total
number of shares attributable to the sum of the shares referred to in (i)
and (ii) in said clause (II) multiplied by a fraction, the numerator of
which is the number of shares of Common Stock allocated to the Member's
Common Stock Account and the denominator of which is the total number of
shares of Common Stock allocated to the Common Stock Accounts of all such
Members who have timely provided instructions to the Trustee with respect
to the Common Stock referred to in (i) and (ii) in said clause (II). For
purposes of this Article 16, 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.
16.3 Trustee Action on Member Instructions. The Trustee shall
sell, offer to sell, exchange or otherwise dispose of the Common Stock held
under the Trust as directed by Members through their instructions, as
provided in Section 16.2. The proceeds of a disposition directed by a
Member from his Common Stock Account under this Article 16 shall be
allocated to such Member's Common Stock Account and be governed by the
provisions of Section 16.5 and other applicable provisions of the Plan.
Such proceeds, even if allocated to a Member's Common Stock Account under
the Plan may, in the discretion of the Trustee, subject to the concurrence
of the Sponsoring Company, constitute one or more separate investment funds
under the Plan governed, nevertheless, by the provisions of Section 16.5
and other applicable provisions of the Plan.
16.4 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 Common Stock
allocated to their Common Stock Accounts, such Members shall be deemed to
have directed the Trustee that such shares remain invested in Common Stock
subject to all provisions of the Plan including Section 16.5.
16.5 Investment of Plan Assets After Tender Offer. The Sponsoring
Company may direct the substitution of new employer securities for Common
Stock or for the proceeds of any disposition of Common Stock to the extent
provided in the Plan. Pending the substitution of new employer securities
or the termination of the Plan and Trust, the Trust Fund may 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 invest the cash proceeds in
short-term securities issued by the United States of America or any agency
or instrumentality thereof or any other investments of a short-term nature,
including corporate obligations or participations therein and interim
collective or common investment funds.
16.6 Treatment of Unallocated Shares. In the case of shares of
Common Stock held in the Unallocated Transfer Common Stock Account and in
the Unallocated Loan Common Stock Account, the Trustee shall sell, offer to
sell, exchange or otherwise dispose of such shares in the manner and in the
amount that is prescribed for the same in Section 16.2 and in Section 16.3.
The proceeds of a disposition of stock in the Unallocated Transfer Common
Stock Account and in the Unallocated Loan Common Stock Account shall be
held by the Trustee subject to the provisions of the trust agreement, the
Plan and any applicable loan agreement.
16.7 Withdrawal of Shares. In the event, under the terms of a
tender offer or otherwise, any shares of Common Stock 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 16 to give instructions as to the sale, exchange or
transfer of shares of Common Stock pursuant to such offer, acting in their
capacity as named fiduciaries.
16.8 Partial Offers. In the event that an offer for fewer than all
of the shares of Common Stock held by the Trustee shall be received by the
Trustee, the total number of shares of Common Stock that the Plan sells,
exchanges or transfers pursuant to such offer shall be allocated among
Members' Common Stock Accounts and the Unallocated Transfer Common Stock
Account, the Unallocated Loan Common Stock Account and any Common Stock
then in the suspense account under Section 5.7(c)(2) on a pro rata basis in
accordance with the directions received from Members with respect to shares
of Common Stock allocated to their Common Stock Accounts and to the
Unallocated Transfer Common Stock Account, the Unallocated Loan Common
Stock Account and any Common Stock then in the suspense account under
Section 5.7(c)(2).
16.9 Multiple Offers. In the event an offer shall be received by
the Trustee and instructions shall be solicited from Members pursuant to
Sections 16.2 to 16.8 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 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 16.2 to 16.8 hereof. With respect to any further offer for any
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
16.9.
16.10 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 Common Stock Account. Funds received in exchange for tendered
shares of Common Stock shall be used by the Trustee to purchase Common
Stock (or other employer securities within the meaning of Section 407(d) of
ERISA) as soon as practicable, as provided for and consistent with Section
16.5. In the interim, the Trustee shall invest such funds in short-term
investments permitted under the trust agreement, as provided for and
consistent with Section 16.5.
16.11 Confidentiality. The instructions received by the Trustee
from a Member under this Article 16 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 17
Special Rules in the Event Plan Becomes Top-Heavy
17.1 General. Notwithstanding any other provision of the Plan,
this Article 17 shall apply to each Plan Year as to which the Plan is
"Top-Heavy" (as hereinafter defined in this Article 17), hereinafter called
"Top-Heavy Year", and, to the extent provided in this Article 17, to each
Plan Year following a Plan Year as to which the Plan is Top-Heavy.
17.2 Minimum Benefits. The Participating Company contributions and
forfeitures allocated to the 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.
17.3 Vesting. In any Top-Heavy Year, the Account of any Member
shall be fully vested and nonforfeitable if he has credit for three
One-Year Periods of Service. In the event the Plan ceases to be Top-Heavy,
the Account of any Member that has become fully vested shall remain fully
vested.
17.4 Definitions. For purposes of this Article 17, 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 5.9(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 17 - MODIFICATIONS TO TOP-HEAVY RULES
The following provisions replace the applicable provisions of Article 17
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 17.
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.
IN WITNESS WHEREOF, the Sponsoring Company has caused this Plan to
be executed this 27th day of August, 2002.
ASHLAND INC.,
ATTEST: SPONSORING COMPANY
BY:
/s/ Richard Thomas /s/ Susan B. Esler
- -------------------------------- --------------------------------
ITS: Secretary ITS: Vice President,
Human Resources