As Filed With the Securities and Exchange Commission on July 31, 1997
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------------
Houston Lighting & Power Company
(Exact name of issuer as specified in its charter)
-------------------------
TEXAS 74-0694415
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 LOUISIANA 77002
HOUSTON, TEXAS (Zip Code)
(Address of principal executive offices)
-------------------------
NORAM EMPLOYEE SAVINGS
AND INVESTMENT PLAN
(Full title of the plan)
-------------------------
Hugh Rice Kelly
Executive Vice President, General Counsel, and Corporate Secretary
1111 Louisiana
Houston, Texas 77002
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (713) 207-1111
-------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (2) PRICE (2) FEE (3)
- ---------------------------------------------------------------------------------
Common Stock, without
par value (1) 361,540 shares $20.97 $7,581,494 $2,297.42
- ---------------------------------------------------------------------------------
(1) Includes preference stock purchase rights of one Right per share
associated with the Common Stock.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee and based upon the average of the high and
low sales prices of the Common Stock of Houston Industries Incorporated
reported on the New York Stock Exchange Composite Tape on July 28, 1997.
(3) Because no separate consideration is payable for the Rights, the
registration fee for such securities is included in the fee for the Common
Stock.
IN ADDITION, PURSUANT TO RULE 416(c), THIS REGISTRATION STATEMENT ALSO COVERS AN
INDETERMINATE AMOUNT OF INTERESTS TO BE OFFERED OR SOLD PURSUANT TO THE EMPLOYEE
BENEFIT PLAN DESCRIBED HEREIN.
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INTRODUCTORY STATEMENT
Houston Lighting & Power Company (to be renamed Houston Industries
Incorporated) (the "Registrant" or the "Company") is filing this Registration
Statement on Form S-8 relating to its Common Stock, without par value, and
associated Rights to purchase its Series A Preference Stock, without par value
(such Common Stock and associated Rights collectively, the "Common Stock"),
issuable pursuant to the terms of the NorAm Employee Savings and Investment Plan
(the "Plan").
Pursuant to an Agreement and Plan of Merger dated as of August 11,
1996, as amended, by and among Houston Industries Incorporated, a Texas
corporation ("HII"), the Registrant (a wholly owned subsidiary of HII), HI
Merger, Inc., a Delaware corporation and a direct wholly owned subsidiary of HII
("Merger Sub"), and NorAm Energy Corp., a Delaware corporation ("NorAm"), among
other things, (a) HII will be merged into the Company, (b) each outstanding
share of Common Stock, without par value, of HII ("HII Common Stock") will be
converted into one share of Common Stock, without par value, of the Company, and
the Company will be renamed "Houston Industries Incorporated", (c) NorAm will be
merged into Merger Sub (the "NorAm Merger"), as a result of which NorAm will
become a wholly owned subsidiary of the Company, and (d) each share of common
stock, par value $0.625 per share, of NorAm ("NorAm Common Stock") outstanding
immediately prior to the effective time of the NorAm Merger will be converted
into either cash or Common Stock, in accordance with the elections of the
holders of NorAm Common Stock, subject to proration. As a result of the NorAm
Merger, the NorAm Energy Corp. Pooled Common Stock Fund (substantially all of
the assets of which have been invested in NorAm Common Stock) will no longer be
available as an investment alternative for contributions pursuant to the Plan.
Instead, there will be substituted as an investment alternative a similar fund
substantially all of the assets of which constitute Common Stock.
This Registration Statement relates only to the Common Stock
purchaseable after the NorAm Merger with contributions pursuant to the terms of
the Plan and related participation interests in the Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Note: The document(s) containing the plan information required by
Item 1 of Form S-8 and the statement of availability of registrant information
and any other information required by Item 2 of Form S-8 will be sent or given
to participants as specified by Rule 428 under the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with Rule 428 and the requirements
of Part I of Form S-8, such documents are not being filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424
under the Securities Act. The Registrant shall maintain a file of such
documents in accordance with the provisions of Rule 428. Upon request, the
Registrant shall furnish to the Commission or its staff a copy or copies of all
of the documents included in such file.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Company (File No. 1-3187), by HII (File No.
1-7629) or by the Plan pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or as otherwise indicated, are hereby incorporated
in this Registration Statement by reference:
(1) the combined Annual Report on Form 10-K of the Company and HII for
the year ended December 31, 1996;
(2) the combined Quarterly Report on Form 10-Q of the Company and HII
for the quarter ended March 31, 1997;
(3) the Current Report on Form 8-K of the Company dated February 4,
1997;
(4) the combined Current Report on Form 8-K of the Company and HII
dated February 5, 1997;
(5) the description of the Common Stock contained in Item 4 of the
Company's Registration Statement on Form 8-B, as filed with the Commission
on July 30, 1997; and
(6) the Annual Report on Form 11-K of the Plan for the year ended
December 31, 1996, filed as an exhibit to NorAm's Form 10-K/A for the year
ended December 31, 1996, dated June 12, 1997.
All documents filed with the Commission by the Company, HII and the
Plan pursuant to sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Registration Statement and prior to the filing of
a post-effective amendment to this Registration Statement which indicates that
all securities offered hereby have been sold, or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
Any statement contained herein or incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02.A.(16) and Article 2.02-1 of the Texas Business
Corporation Act and Article V of the Company's Amended and Restated Bylaws
provide the Company with broad powers and authority to indemnify its directors
and officers and to purchase and maintain insurance for such purposes. Pursuant
to such statutory and Bylaw
II-1
provisions, the Company has purchased insurance against certain costs of
indemnification that may be incurred by it and by its officers and directors.
Additionally, Article IX of the Company's Restated Articles of
Incorporation provides that a director of the Company is not liable to the
Company or its shareholders for monetary damages for any act or omission in the
director's capacity as director, except that Article IX does not eliminate or
limit the liability of a director for (i) breaches of such Director's duty of
loyalty to the Company and its shareholders, (ii) acts or omissions not in good
faith or which involve intentional misconduct or knowing violation of law, (iii)
transactions from which a director receives an improper benefit, irrespective of
whether the benefit resulted from an action taken within the scope of the
director's office, (iv) acts or omissions for which liability is specifically
provided by statute and (v) acts relating to unlawful stock repurchases or
payments of dividends.
Article IX also provides that any subsequent amendments to Texas
statutes that further limit the liability of directors will inure to the benefit
of the directors, without any further action by shareholders. Any repeal or
modification of Article IX shall not adversely affect any right of protection of
a director of the Company existing at the time of the repeal or modification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
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ITEM 8. EXHIBITS.
The following documents are filed as a part of this Registration
Statement or incorporated by reference herein:
Report or SEC File or
Exhibit Registration Registration Exhibit
Number Document Description Statement Number Reference
- ------- -------------------- --------------- ------------ ----------
4.1* - Restated Articles of Incorporation of the Combined Form 1-3187 3
Company (Restated as of May 1993) 10-Q for the 1-7629
quarter ended
June 30, 1993
4.2* - Articles of Amendment to Restated Registration 333-11329 3(b)
Articles of Incorporation of the Statement on Form
Company (dated August 9, 1996) S-4
4.3* - Articles of Amendment to Restated Combined Form 1-3187 3(c)
Articles of Incorporation of the 10-K for the year 1-7629
Company (dated December 3, 1996) ended
December 31,
1996
4.4* - Amendments to Restated Articles of
Incorporation of Houston Lighting &
Power Company to be effective as of the
effective time of the merger of HII with
and into the Company (included as
Exhibit A to Exhibit 4.7)
4.5* - Amended and Restated Bylaws of the Combined Form 1-3187 3
Company (as of June 5, 1996) 10-Q for the 1-7629
quarter ended
June 30, 1996
4.6* - Amended and Restated Bylaws of HII Combined Form 1-3187 3
(as of May 22, 1996), to become the 10-Q for the 1-7629
Bylaws of the Company as of the quarter ended
effective time of the merger of HII with June 30, 1996
and into the Company
4.7* - Agreement and Plan of Merger among Combined Form 8- 1-3187 2
HII, the Company, HI Merger, Inc. and K dated August 11, 1-7629
NorAm dated as of August 11, 1996 1996
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Report or SEC File or
Exhibit Registration Registration Exhibit
Number Document Description Statement Number Reference
- ------- -------------------- --------------- ------------ ----------
4.8* - Amendment to Agreement and Plan of Registration 333-11329 2(c)
Merger among HII, the Company, Statement on
Merger Sub and NorAm dated as of Form S-4
October 23, 1996
4.9* - Form of Amended and Restated Registration 333-11329 4(b)(1)
Rights Agreement between the Statement on
Company and Texas Commerce Bank Form S-4
National Association, as Rights Agent,
to be executed upon the closing of
the merger of HII with and into the
Company, including form of Statement
of Resolution Establishing Series of
Shares designated Series A Preference
Stock and Form of Rights Certificate
4.10 - NorAm Employee Savings and
Investment Plan
4.11 - First Amendment to NorAm Employee
Savings and Investment Plan
4.12 - Second Amendment to NorAm Employee
Savings and Investment Plan
4.13 - Third Amendment to NorAm Employee
Savings and Investment Plan
4.14 - Fourth Amendment to NorAm Employee
Savings and Investment Plan
4.15 - NorAm Employee Savings and
Investment Plan Trust Agreement
5 - The registrant undertakes that
(following the NorAm Merger) the Plan
and any amendment thereto has been or
will be submitted to the Internal
Revenue Service ("IRS") in a timely
manner and all changes required by the
IRS for the Plan to be qualified under
Section 401 of the Internal Revenue
Code have been or will be made.
23.1 - Consent of Deloitte & Touche LLP
23.2 - Consent of Coopers & Lybrand L.L.P.
________________
* Incorporated herein by reference as indicated.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement;
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(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement or Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, the State of Texas, on July 28, 1997.
HOUSTON LIGHTING & POWER COMPANY
(Registrant)
By: /s/ Don D. Jordan
----------------------------------
(Don D. Jordan, Chairman and Chief
Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
--------- ----- ----
/s/ Don D. Jordan Chairman, Chief Executive July 28, 1997
------------------------ Officer and Director
(Don D. Jordan) Principal Executive Officer
and Principal Financial Officer)
/s/ Mary P. Ricciardello Vice President and Comptroller July 28, 1997
------------------------ (Principal Accounting Officer)
(Mary P. Ricciardello)
Director July 28, 1997
------------------------
(William T. Cottle)
/s/ Charles R. Crisp Director July 28, 1997
------------------------
(Charles R. Crisp)
Director July 28, 1997
------------------------
(Jack D. Greenwade)
/s/ Lee W. Hogan Director July 28, 1997
------------------------
(Lee W. Hogan)
/s/ Hugh Rice Kelly Director July 28, 1997
------------------------
(Hugh Rice Kelly)
II-6
Signature Title Date
--------- ----- ----
Director July 28, 1997
----------------------
(R. Steve Letbetter)
Director July 28, 1997
-----------------------
(David M. McClanahan)
/s/ Stephen W. Naeve Director July 28, 1997
--------------------
(Stephen W. Naeve)
/s/ S. C. Schaeffer Director July 28, 1997
-------------------
(S. C. Schaeffer)
Director July 28, 1997
-----------------
(R. L. Waldrop)
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THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Benefits Committee has duly caused this Registration Statement or Amendment to
be signed on behalf of the NorAm Employee Savings and Investment Plan by the
undersigned, thereunto duly authorized, in the City of Houston, State of Texas,
on July 30, 1997.
NORAM EMPLOYEE SAVINGS AND INVESTMENT PLAN
By: /s/ Ricky L. Spurlock
----------------------
(Ricky L. Spurlock)
Benefits Administrative Committee
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INDEX TO EXHIBITS
Report or SEC File or
Exhibit Registration Registration Exhibit
Number Document Description Statement Number Reference
- -------- -------------------- --------------- -------------- ----------
4.1* - Restated Articles of Incorporation of the Combined Form 1-3187 3
Company (Restated as of May 1993) 10-Q for the 1-7629
quarter ended
June 30, 1993
4.2* - Articles of Amendment to Restated Registration 333-11329 3(b)
Articles of Incorporation of the Statement on Form
Company (dated August 9, 1996) S-4
4.3* - Articles of Amendment to Restated Combined Form 1-3187 3(c)
Articles of Incorporation of the 10-K for the year 1-7629
Company (dated December 3, 1996) ended
December 31, 1996
4.4* - Amendments to Restated Articles of
Incorporation of Houston Lighting &
Power Company to be effective as of the
effective time of the merger of HII with
and into the Company (included as
Exhibit A to Exhibit 4.7)
4.5* - Amended and Restated Bylaws of the Combined Form 1-3187 3
Company (as of June 5, 1996) 10-Q for the 1-7629
quarter ended
June 30, 1996
4.6* - Amended and Restated Bylaws of HII Combined Form 1-3187 3
(as of May 22, 1996), to become the 10-Q for the 1-7629
Bylaws of the Company as of the quarter ended
effective time of the merger of HII with June 30, 1996
and into the Company
4.7* - Agreement and Plan of Merger among Combined Form 8- 1-3187 2
HII, the Company, HI Merger, Inc. and K dated August 11, 1-7629
NorAm dated as of August 11, 1996 1996
4.8* - Amendment to Agreement and Plan of Registration 333-11329 2(c)
Merger among HII, the Company, Statement on
Merger Sub and NorAm dated as of Form S-4
October 23, 1996
4.9* - Form of Amended and Restated Registration 333-11329 4(b)(1)
Rights Agreement between the Statement on
Company and Texas Commerce Bank Form S-4
National Association, as Rights
Agent, to be executed upon the
closing of the merger of HII with
and into the Company, including
form of Statement of Resolution
Establishing Series of Shares designated
Series A Preference Stock and form of
Rights Certificate
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Report or SEC File or
Exhibit Registration Registration Exhibit
Number Document Description Statement Number Reference
- -------- -------------------- --------------- -------------- ----------
4.10 - NorAm Employee Savings and
Investment Plan
4.11 - First Amendment to NorAm
Employee Savings and
Investment Plan
4.12 - Second Amendment to NorAm
Employee Savings and
Investment Plan
4.13 - Third Amendment to NorAm
Employee Savings and
Investment Plan
4.14 - Fourth Amendment to NorAm
Employee Savings and
Investment Plan
4.15 - NorAm Employee Savings and
Investment Plan Trust Agreement
5 - The registrant undertakes that
(following the NorAm Merger) the Plan
and any amendment thereto has been or
will be submitted to the Internal
Revenue Service ("IRS") in a timely
manner and all changes required by the
IRS for the Plan to be qualified under
Section 401 of the Internal Revenue
Code have been or will be made.
23.1 - Consent of Deloitte & Touche LLP
23.2 - Consent of Coopers & Lybrand L.L.P.
________________
* Incorporated herein by reference as indicated.
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EXHIBIT 4.10
ARKLA EMPLOYEE SAVINGS & INVESTMENT PLAN
(Generally effective January 1, 1989)
Conformed copy incorporating all
amendments through December 31, 1993
ARKLA EMPLOYEE SAVINGS & INVESTMENT PLAN
Arkla, Inc., a Delaware corporation, adopts the Arkla Employee Savings
& Investment Plan (the "Plan") as an amendment and restatement of the Thrift
Plan for Employees of Arkla, Inc., the Entex StockPlus Plan and of the Entex
Hourly Employees' StockPlus Plan, all of which will be merged into a single plan
as of April 1, 1993. The Plan is effective as of January 1, 1989, except as
otherwise expressly provided. As amended and restated, the Plan is a profit
sharing plan with a cash or deferred arrangement intended to qualify under Code
section 401(a) and to meet the requirements of Code section 401(k). The Trust
Agreement established pursuant to the Plan is an employees' trust intended to
constitute a tax-exempt organization under Code section 501(a).
Words and phrases with initial capital letters used throughout the
Plan are defined in Article 1.
(i)
TABLE OF CONTENTS
Page
----
Article 1 Definitions 1
Article 2 Participation 7
Article 3 Contributions 9
Article 4 Allocations to Participants' Accounts 12
Article 5 Vesting 14
Article 6 Distributions to Participants 16
Article 7 Distributions to Beneficiaries 21
Article 8 Provisions Regarding Company Stock and Other Securities 23
Article 9 Administration of the Plan and Trust Agreement 26
Article 10 Limitations on Contributions and Allocations to
Participants' Accounts 31
Article 11 Restrictions on Distributions to Participants
and Beneficiaries 41
Article 12 Top-Heavy Provisions 43
Article 13 Adoption of Plan by Controlled Group Members 48
Article 14 Amendment of the Plan 49
Article 15 Termination, Partial Termination and Complete
Discontinuance of Contributions 50
Article 16 Miscellaneous 51
Appendix A Participating Employers 54
(ii)
ARTICLE 1
DEFINITIONS
1.1 "Account" means the records, including subaccounts, maintained by
the Committee in the manner provided in Article 4 to determine the interest of
each Participant in the assets of the Plan and may refer to any or all of the
Participant's Deferral Contribution Account, After Tax Contribution Account,
Matching Contribution Account, Transfer Account and ESOP Account.
1.2 "After Tax Contribution Account" means the Account established
for each applicable Participant, the balance of which is attributable to the
balance in the Participant's after tax contribution account under the StockPlus
Plan or the Thrift Plan and earnings and losses of the Trust Fund with respect
to such amounts.
1.3 "Beneficiary" means the one or more persons or entities entitled
to receive a distribution of a Participant's interest in the Plan in the event
of his death as provided in Article 7.
1.4 "Board of Directors" or "Board" means the Board of Directors of
the Company.
1.5 "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to "regulations" are to regulations published by the
Secretary of the Treasury under applicable provisions of the Code, unless
otherwise expressly indicated.
1.6 "Committee" or "Employee Benefits Committee" means the Committee
appointed under Article 9.
1.7 "Company" means Arkla, Inc., a Delaware corporation.
1.8 "Company Stock" means the common stock, par value $.625 per
share, of the Company.
1.9 "Compensation" means the total payments (excluding expense
reimbursements) actually made to an Employee for personal services rendered to a
Participating Employer, including salary, wages, overtime, commissions,
incentive payments, shift differential payments, bonus payments, back payment
awards, and other compensation of a similar bonus nature, but excluding deferred
compensation paid, stock options, stock appreciation rights, stock awards and
cash bonus awards under the Company's long-term incentive plan, salary
continuation payments payable upon the death of an Employee, and all other
extraordinary compensation. For purposes of calculating the amount of a
Participant's Deferral Contributions, but not for purposes of calculating or
allocating the amount of any Matching Contribution, Compensation includes
severance pay. In addition, Compensation includes any contributions made by the
Participating Employers on behalf of an Employee pursuant to a deferral election
under the Plan or under any other employee benefit plan that are not includable
in income under Code section 402(a)(8) and any contributions made by the
Participating Employers on behalf of an Employee to a cafeteria plan that are
not includable in income under Code section 125. The Compensation of an
Employee taken into account for any purpose for any Plan Year ending before
January 1, 1994 will not exceed $200,000, and will not exceed $150,000 for any
Plan Year beginning after December 31, 1993, as such amounts may be adjusted by
the Secretary of the Treasury. For purposes of applying the applicable dollar
limit set forth in the preceding sentence, if an Employee is a Highly
Compensated Employee (as defined in Section 10.2(n)) who is either (i) a 5-
percent owner, determined in accordance with Code section 414(q) and the
Treasury Regulations promulgated thereunder, or (ii) one of the ten most highly
compensated Employees ranked on the basis of Compensation paid by the Controlled
Group during the year, such Highly Compensated Employee and the members of his
family (as hereafter defined) will be treated as a single employee and the
Compensation of each member of the family will be aggregated with the
Compensation of the Highly Compensated Employee. The limitation on Compensation
will be allocated among such Highly Compensated Employee and his family members
in proportion to each individual's Compensation. For purposes of this Section,
the term "family" means an Employee's spouse and any lineal descendants who are
under age 19 at the end of the Plan Year in question.
1.10 "Controlled Group" means the Company and all other corporations,
trades and businesses, the employees of which, together with employees of the
Company, are required by the first sentence of subsection (b), by subsection
(c), by subsection (m) or by subsection (o) of Code section 414 to be treated as
if they were employed by a single employer.
1.11 "Controlled Group Member" means each corporation or
unincorporated trade or business that is or was a member of the Controlled
Group, but only during such period as it is or was such a member.
1.12 "Deferral Contribution" means the amount of a Participant's
Compensation that he elects to have contributed to the Plan by the Participating
Employers rather than paid to him directly in cash.
1.13 "Deferral Contribution Account" means the Account established for
each Participant, the balance of which is attributable to (i) the Participant's
Deferral Contributions, (ii) salary deferral contributions made to the Thrift
Plan and (iii) pre tax contributions made to the StockPlus Plan, and earnings
and losses of the Trust Fund with respect to such contributions.
1.14 "Disability" or "Disabled" means a physical or mental condition
which, in the opinion of the Committee, causes a Participant to be both (a)
totally and presumably permanently disabled, due to sickness or injury, so as to
be unable to perform the usual duties pertaining to his occupation and (b)
eligible for disability benefits under any insured or uninsured long-term
disability program maintained by the Employer under which the Participant is
covered.
1.15 "Effective Date" means January 1, 1989, except as otherwise
expressly provided.
-2-
1.16 "Eligibility Computation Period" means the period of 12
consecutive months beginning on the date an Employee first performs an Hour of
Service and on each anniversary of that date.
1.17 "Employee" means any person who is: (i) employed by any
Controlled Group Member if their relationship is, for federal income tax
purposes, that of employer and employee, or (ii) a "leased employee" of a
Controlled Group Member within the meaning of Code section 414(n)(2) but only
for purposes of the requirements of Code section 414(n)(3).
1.18 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.19 "ESOP Account" means the Account established for each applicable
Participant, the balance of which is attributable to the balance of the
Participant's ESOP account under the StockPlus Plan and earnings and losses of
the Trust Fund with respect to such amounts.
1.20 "Hour of Service" means each hour credited in accordance with the
following rules:
(a) Credit for Services Performed. An Employee will be credited
with one Hour of Service for each hour for which he is paid, or entitled to
payment, by one or more Controlled Group Members for the performance of duties.
(b) Credit for Periods in Which No Services Are Performed. An
Employee will be credited with one Hour of Service for each hour for which he is
paid, or entitled to payment, by one or more Controlled Group Members on account
of a period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated); except that (i) no more
than 501 Hours of Service will be credited under this subsection (b) to an
Employee on account of any single continuous period during which he performs no
duties (whether or not such period occurs in a single Plan Year), (ii) an hour
for which an Employee is directly or indirectly paid, or entitled to payment, on
account of a period during which no duties are performed will not be credited to
the Employee if the payment is made or due under a plan maintained solely for
the purpose of complying with applicable workers' compensation or unemployment
compensation or disability insurance laws, and (iii) Hours of Service will not
be credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee. For purposes of this
subsection (b), an Employee will be credited with Hours of Service on the basis
of his regularly scheduled working hours per week (or per day if he is paid on a
daily basis) or, in the case of an Employee without a regular work schedule, on
the basis of 40 Hours of Service per week (or 8 Hours of Service per day if he
is paid on a daily basis) for each week (or day) during the period of time
during which no duties are performed; except that an Employee will not be
credited with a greater number of Hours of Service for a period during which no
duties are performed than the number of hours for which he is regularly
scheduled for the performance of duties during the period or, in the case of an
Employee without a regular work schedule, on the basis of 40 Hours of Service
per week (or 8 Hours of Service per day if he is paid on a daily basis).
-3-
(c) Credit for Back Pay. An Employee will be credited with one
Hour of Service for each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by one or more Controlled Group
Members; except that an hour will not be credited under both subsection (a) or
(b), as the case may be, and this subsection (c), and Hours of Service credited
under this subsection (c) with respect to periods described in subsection (b)
will be subject to the limitations and provisions under subsection (b).
(d) Credit for Certain Absences. If an Employee is absent from
work on or after the Effective Date for any period by reason of the pregnancy of
the Employee, by reason of the birth of a child of the Employee, by reason of
the placement of a child with the Employee, or for purposes of caring for a
child for a period beginning immediately following the birth or placement of
that child, the Employee will be credited with Hours of Service (solely for the
purpose of determining whether he has a One Year Break in Service under the
Plan) equal to (i) the number of Hours of Service which otherwise would normally
have been credited to him but for his absence, or (ii) if the number of Hours of
Service under clause (i) is not determinable, 8 Hours of Service per normal
workday of the absence, provided, however, that the total number of Hours of
Service credited to an Employee under this subsection (d) by reason of any
pregnancy, birth or placement will not exceed 501 Hours of Service. Hours of
Service will not be credited to an Employee under this subsection (d) unless the
Employee furnishes to the Committee such timely information as the Committee may
reasonably require to establish that the Employee's absence from work is for a
reason specified in this subsection (d) and the number of days for which there
was such an absence.
(e) Manner of Counting Hours. No hour will be counted more than
once or be counted as more than one Hour of Service even though the Employee may
receive more than straight-time pay for it. With respect to Employees whose
compensation is not determined on the basis of certain amounts for each hour
worked during a given period and for whom hours are not required to be counted
and recorded by any federal law (other than ERISA), Hours of Service will be
credited on the basis of 10 Hours of Service daily, 45 Hours of Service weekly,
95 Hours of Service semi-monthly, or 190 Hours of Service monthly, if the
Employee's compensation is determined on a daily, weekly, semi-monthly or
monthly basis, respectively, for each period in which the Employee would be
credited with at least one Hour of Service under this Section. Except as
otherwise provided in subsection (d), Hours of Service will be credited to
Eligibility Computation Periods and Plan Years in accordance with the provisions
of 29 C.F.R. (S) 2530.200b-2, which provisions are incorporated in this Plan by
reference.
1.21 "Matching Contribution" means the Participating Employer Matching
Contribution made to the Plan on behalf of a Participant pursuant to Article 3.
1.22 "Matching Contribution Account" means the Account established for
each Participant, the balance of which is attributable to (i) Matching
Contributions made pursuant to Article 3, (ii) employer's contributions made to
the Thrift Plan and (iii) employer matching contributions made to the StockPlus
Plan, and earnings and losses of the Trust Fund with respect to such
contributions.
-4-
1.23 "Merger Date" means April 1, 1993, the effective date of the
merger of the StockPlus Plan into the Thrift Plan.
1.24 "One Year Break in Service" means an absence from service
determined in accordance with the following rules:
(a) Participation. For purposes of determining an Employee's
eligibility to participate under Section 2.1, a One Year Break in Service is an
Eligibility Computation Period in which the Employee fails to complete more than
500 Hours of Service.
(b) Vesting. For purposes of determining the forfeiture of
nonvested amounts in a Participant's Matching Contribution Account under Article
5, a One Year Break in Service is a period of at least 12 consecutive months in
which an Employee is absent from service. A One Year Break in Service will begin
on the Employee's termination date (as defined in Section 1.37) and will end on
the day on which the Employee again performs an Hour of Service for a Controlled
Group Member. If, however, an Employee who is absent from work with a Controlled
Group Member because of (i) the Employee's pregnancy, (ii) the birth of the
Employee's child, (iii) the placement of a child with the Employee in connection
with the Employee's adoption of the child, or (iv) caring for such child
immediately following such birth or placement, will be absent for such reason
beyond the first anniversary of the first date of his absence, his period of
absence, solely for purposes of preventing a One Year Break in Service, will
commence on the second anniversary of the first day of his absence from work.
The period of absence from work between the first and second anniversaries of
the first date of his absence from work will not be taken into account in
determining whether the Employee has completed a Year of Service. The provisions
of this paragraph will not apply to an Employee unless the Employee furnishes to
the Committee such timely information that the Committee may reasonably require
to establish (i) that the absence from work is for one of the reasons specified
in this paragraph and (ii) the number of days for which there was such an
absence.
1.25 "Participant" means an Employee or former Employee who has met
the applicable eligibility requirements of Article 2 and who has not yet
received a distribution of the entire amount of his vested interest in the Plan.
1.26 "Participating Employer" means the Company (excluding, however,
the Minnegasco Division of the Company) and each other Controlled Group Member
set forth on Appendix A and any other Controlled Group Member or organizational
unit of the Company or a Controlled Group Member which is designated as a
Participating Employer under the Plan by the Board of Directors.
1.27 "Plan" means the plan set forth herein, as amended from time to
time.
1.28 "Plan Year" means the period with respect to which the records of
the Plan are maintained, which will be the 12-month period beginning on
January 1 and ending on December 31.
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1.29 "Qualified Plan" means an employee benefit plan that is qualified
under Code section 401(a).
1.30 "StockPlus Plan" means the Entex StockPlus Plan or the Entex
Hourly Employees' StockPlus Plan, as the case may be, as is in effect
immediately prior to the adoption of this Plan.
1.31 "Thrift Plan" means the Thrift Plan for Employees of Arkla, Inc.,
as in effect immediately prior to the adoption of this Plan.
1.32 "Transfer Account" means the Account established for each
Participant, the balance of which is attributable to (i) amounts transferred to
the Trust Fund pursuant to Section 3.5 and (ii) rollover contributions made to
the Thrift Plan, and the earnings and losses of the Trust Fund with respect to
such amounts.
1.33 "Trust Agreement" means the agreement or agreements executed by
the Company and the Trustee which establishes a trust fund to provide for the
investment, reinvestment, administration and distribution of contributions made
under the Plan and the earnings thereon, as amended from time to time.
1.34 "Trust Fund" means the assets of the Plan held by the Trustee
pursuant to the Trust Agreement.
1.35 "Trustee" means the one or more individuals or organizations who
have entered into the Trust Agreement as Trustee, and any duly appointed
successor.
1.36 "Valuation Date" means the date with respect to which the Trustee
determines the fair market value of the assets comprising the Trust Fund or any
portion thereof. The regular Valuation Date will be each business day during the
Plan Year.
1.37 "Year of Service" means each period of 365 days of service
(determined by aggregating days of service that are not consecutive) beginning
on the later of the date an Employee is first credited with an Hour of Service
or is again credited with an Hour of Service following his reemployment and
ending on the earlier of (i) the date on which the Employee quits, retires, is
discharged or dies or (ii) the first anniversary of the date on which the
Employee is absent from service with a Controlled Group Member for any other
reason, such as vacation, holiday, sickness, disability, leave of absence or
layoff (the earlier of such dates is hereafter referred to as the Employee's
"termination date"). An Employee's period of service for purposes of
determining a Year of Service will include each period in which the Employee is
absent from service for less than 12 months (measured from the Employee's
termination date) and any periods during which he is in the service of the armed
forces of the United States and his reemployment rights are guaranteed by law,
provided he returns to employment with a Controlled Group Member within the time
such rights are guaranteed.
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ARTICLE 2
PARTICIPATION
2.1 Eligibility to Participate. Each Employee who was a Participant
in the Thrift Plan or the StockPlus Plan immediately prior to the Merger Date
will be a Participant on the Merger Date. Each Employee not referred to in the
preceding sentence will become a Participant on the first day of the calendar
quarter coinciding with or immediately following the date that is one month and
one day after he completes an Hour of Service. Notwithstanding the foregoing,
if an Employee is classified as a temporary or part-time Employee in accordance
with standard personnel practices of his Participating Employer and was not
eligible to participate in the Thrift Plan or the StockPlus Plan on the Merger
Date, such Employee will become a Participant upon completion of at least 1,000
Hours of Service during an Eligibility Computation Period.
2.2 Exclusions from Participation.
(a) Ineligible Employees. An Employee who is otherwise eligible
to participate in the Plan will not become or continue as an active Participant
if (i) he is a nonresident alien who receives no earned income (within the
meaning of Code section 911(d)(2)) from a Participating Employer which
constitutes income from sources within the United States (within the meaning of
Code section 861(a)(3)); (ii) he is an Employee (other than an hourly paid
Employee of the Entex Division of the Company) who is covered by a collective
bargaining agreement that does not expressly provide for participation in the
Plan, provided that the representative of the Employees with whom the collective
bargaining agreement is executed has had an opportunity to bargain concerning
retirement benefits for those Employees; (iii) he is employed by a Controlled
Group Member or an organizational unit thereof that has not been designated as a
Participating Employer by the Board; (iv) he is a leased employee required to be
treated as an Employee under Code section 414(n); or (v) he is then on an
approved leave of absence without pay or in the service of the armed forces of
the United States.
(b) Exclusion after Participation. A Participant who becomes
ineligible under subsection (a) may not elect to have Deferral Contributions
made or continued to the Plan.
(c) Participation after Exclusion. An Employee or Participant who
is excluded from active participation is eligible to participate in the Plan and
will become a Participant on the first day he is no longer described in
subsection (a) and is credited with one or more Hours of Service by a
Participating Employer, provided that he has otherwise met the requirements of
Section 2.1. This subsection will apply to an Employee who returns from an
approved leave of absence or from military leave and who would otherwise be
treated as a new Employee under Section 2.3 only if he returns to employment
with a Controlled Group Member immediately following the expiration of the leave
of absence or, in the case of an Employee on military leave, during the period
in which reemployment rights are guaranteed by law.
-7-
2.3 Reemployment Provisions. All service and Hours of Service are
counted in determining eligibility to participate, except as otherwise provided
in this Section.
(a) Termination of Employment before Participation. If an
Employee terminates employment before becoming a Participant and is reemployed
by a Controlled Group Member before incurring a number of consecutive One Year
Breaks in Service at least equal to the greater of five or his aggregate Years
of Service, he will receive credit for his service and Hours of Service
completed before his termination of employment and will become a Participant on
the later of the date initially determined under Section 2.1 or the date of his
reemployment by a Participating Employer; but if he is reemployed by a
Controlled Group Member after incurring a number of consecutive One Year Breaks
in Service at least equal to the greater of five or his aggregate Years of
Service, he will be treated as a new Employee for purposes of the Plan, in which
case his service and Hours of Service completed before his reemployment will be
disregarded in determining when he will become a Participant.
(b) Termination of Employment after Participation. A Participant
who terminates employment will again become a Participant immediately upon his
reemployment by a Participating Employer.
2.4 Special Effective Date. The provisions of this Article are
effective as of the Merger Date with respect to each Employee who completes an
Hour of Service on or after such date. Prior to the Merger Date, eligibility
was determined under the respective provisions of the Thrift Plan and StockPlus
Plan.
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ARTICLE 3
CONTRIBUTIONS
3.1 Participant Deferral Contributions.
(a) Amount of Deferral Contributions. A Participant may elect, in
accordance with procedures established by the Committee from time to time, to
defer from 1% to 12% (in whole percent increments) of his Compensation for each
payroll period and to have the amount deferred contributed to the Plan by the
Participating Employers as a Deferral Contribution.
(b) Modification and Suspension of Deferral Contributions. A
Participant may increase or decrease the amount of his Deferral Contributions
during the Plan Year, not more frequently than once each calendar month,
effective as soon as practicable. A Participant may suspend his Deferral
Contributions at any time, effective as soon as practicable, and a suspension of
his Deferral Contributions will not be considered a modification for purposes of
this subsection (b). A Participant who suspends his Deferral Contributions may
resume Deferral Contributions to the Plan at any time following the calendar
month in which the suspension occurred, effective as soon as practicable. The
Committee will adopt from time to time procedures for administering the rules
contained in this subsection, which will apply in a uniform and
nondiscriminatory manner to all Participants.
(c) Limitations on Deferral Contributions. The sum of a
Participant's Deferral Contributions and his elective deferrals (within the
meaning of Code section 402(g)(3)) under any other plans, contracts or
arrangements of any Controlled Group Member will not exceed $7,000 (as adjusted
for cost of living increases in the manner described in Code section 415(d)) for
any taxable year of the Participant. A Participant's Deferral Contributions also
will be subject to the deferral percentage limitation set forth in Section 10.6.
In the event a Participant's Deferral Contributions and other elective deferrals
(whether or not under a plan, contract or arrangement of a Controlled Group
Member) for any taxable year exceed the foregoing $7,000 limitation, the excess
allocated by the Participant to Deferral Contributions (adjusted for Trust Fund
earnings and losses in the manner described in Section 10.6(d)) may, in the
discretion of the Committee, be distributed to the Participant no later than
April 15 following the close of such taxable year. The amount of Deferral
Contributions distributed pursuant to this Section with respect to a Participant
for a Plan Year will be reduced by any excess Deferral Contributions previously
distributed to the Participant pursuant to Section 10.6(c) for the same Plan
Year.
3.2 Matching Contributions.
(a) Amount of Matching Contributions. The Participating Employers
will pay to the Trustee as a Matching Contribution for each calendar month
during the Plan Year an amount equal to 100% of the Deferral Contributions made
in accordance with Section 3.1 by each Participant who was a Participant at any
time during the month, up to a maximum Matching
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Contribution for the month of 6% of the Participant's Compensation for the
month. If for any Plan Year the Deferral Contributions of a Participant who is
employed by a Participating Employer on the last day of the Plan Year are
limited by the dollar limitation of Section 3.1(c) and the aggregate amount of
Matching Contributions required to be made with respect to each calendar month
are less than 100% of the Participant's total Deferral Contributions for the
Plan Year not in excess of 6% of his Compensation, the Participating Employers
will pay to the Trustee, as an additional Matching Contribution, an amount equal
to the difference between (i) 100% of the Participant's Deferral Contributions
for the Plan Year not in excess of 6% of Compensation and (ii) the amount of
Matching Contributions required to be made with respect to each calendar month.
(b) Limitation on Matching Contributions. Matching Contributions
will be subject to the contribution percentage limitation set forth in Section
10.7. In addition, no Matching Contribution will be made with respect to
Deferral Contributions made from a Participant's severance pay.
3.3 Time of Payment. Deferral Contributions and Matching
Contributions will be paid to the Trustee as soon as practicable following the
close of each calendar month during the Plan Year, but may be paid more
frequently if administratively desirable.
3.4 Investment of Contributions. Each Participant may direct the
Trustee to invest the balance of his Accounts in the investment funds designated
by the Committee from time to time in accordance with the provisions of the
Trust Agreement. When a Participant terminates employment, any portion of the
Participant's Matching Contribution Account which was not vested upon his
termination of employment will be invested in the money market fund established
under the Trust Agreement, or as the Committee otherwise directs. if the
Participant is reemployed before the nonvested portion of his Matching
Contribution Account is forfeited, he will again be entitled to direct the
investment of the entire balance of his Accounts, subject to the terms of the
Trust Agreement. The Committee from time to time will establish rules and
procedures regarding Participant investment directions, including, without
limitation, rules and procedures with respect to the manner in which such
directions may be furnished, the frequency with which such directions may be
changed during the Plan Year and the minimum portion of a Participant's Accounts
that may be invested in any one investment fund.
3.5 Rollover and Transfer Contributions. The Committee, in its sole
discretion, may authorize the Trustee to accept (i) any part of the cash or
other assets distributed to a Participant from a Qualified Plan or from an
individual retirement account or annuity described in Code section 408 which
have been liquidated and reduced to cash, or (ii) a direct transfer of assets to
the Plan on behalf of a Participant from the trustee or other funding agent of a
Qualified Plan. The Participant will make application for the rollover or
transfer in writing according to rules and procedures prescribed by the
Committee with the concurrence of the Trustee. Any amounts contributed to the
Plan pursuant to this Section will be allocated to the Participant's Transfer
Account.
3.6 Special Effective Date. The provisions of this Article (other
than Section 3.1(c) and the first sentence of Section 3.2(b)) are effective as
of the first pay day on or
-10-
after the Merger Date with respect to each Employee who completes an Hour of
Service on or after the Merger Date. Prior to the Merger Date, contributions
were determined under the respective provisions of the Thrift Plan and StockPlus
Plan.
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ARTICLE 4
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
4.1 Establishment of Accounts. The Committee will establish a
Deferral Contribution Account, a Matching Contribution Account and a Transfer
Account for each Participant. The Committee will also establish an After Tax
Contribution Account and an ESOP Account for the applicable Participants. The
Committee may establish one or more subaccounts of a Participant's Accounts, if
the Committee determines that subaccounts are necessary or desirable in
administering the Plan.
4.2 Allocation of Contributions.
(a) Deferral Contributions and Matching Contributions. Deferral
Contributions made by a Participating Employer on behalf of a Participant will
be allocated by the Committee to the Participant's Deferral Contribution
Account. Matching Contributions made by a Participating Employer with respect
to a calendar month during the Plan Year will be allocated by the Committee to
the Matching Contribution Accounts of Participants who were Participants in the
Plan at any time during such month, in the ratio that the Deferral Contributions
made on behalf of each such Participant for the month bear to the total Deferral
Contributions made on behalf of all such Participants for the month, taking into
account for purposes of this ratio only Deferral Contributions that do not
exceed 6% of each Participant's Compensation for the month. Any additional
Matching Contribution required to be made by the last sentence of Section 3.2(a)
with respect to a Participant will also be allocated to the Participant's
Matching Contribution Account.
4.3 Limitation on Allocations. Article 10 sets forth certain rules
under Code sections 401(k), 401(m) and 415 that limit the amount of
contributions and forfeitures that may be allocated to a Participant's Accounts
for a Plan Year.
4.4 Allocation of Trust Fund Income and Loss.
(a) Accounting Records. The Committee, through its accounting
records, will clearly segregate each Account and subaccount and will maintain a
separate and distinct record of all income and losses of the Trust Fund
attributable to each Account or subaccount. Income or loss of the Trust Fund
will include any unrealized increase or decrease in the fair market value of
the assets of the Trust Fund.
(b) Method of Allocation. The share of net income or net loss of
the Trust Fund to be credited to, or deducted from, each Account will be
determined by applying the closing market price of each investment fund in which
each Account is invested on each Valuation Date to the share/unit balance of
each investment fund in the Account as of the close of business on the Valuation
Date. Each Account will be further adjusted for withdrawals, distributions and
other additions or subtractions that may be appropriate. The share of net income
or net loss to be credited to, or deducted from, any subaccount will be an
allocable
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portion of the net income or net loss credited to or deducted from the Account
under which the subaccount is established.
4.5 Valuation of Trust Fund. The fair market value of the total net
assets comprising the Trust Fund will be determined by the Trustee as of each
Valuation Date.
4.6 No Guarantee. The Participating Employers, the Committee and the
Trustee do not guarantee the Participants or their Beneficiaries against loss or
depreciation or fluctuation of the value of the assets of the Trust Fund.
4.7 Quarterly Statement of Accounts. The Committee will furnish each
Participant and each Beneficiary of a deceased Participant, at least quarterly,
a statement showing (i) the value of his Accounts at the end of each calendar
quarter, (ii) the allocations to and distributions from his Accounts during the
calendar quarter, and (iii) his vested and nonforfeitable interest in his
Accounts at the end of the calendar quarter. No statement will be provided to a
Participant or Beneficiary after the Participant's entire vested and
nonforfeitable interest in his Accounts has been distributed.
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ARTICLE 5
VESTING
5.1 Determination of Vested Interest.
(a) Deferral Contribution, ESOP, After Tax Contribution and
Transfer Accounts. Except as provided in Section 5.3, the interest of each
Participant in his Deferral Contribution Account, his ESOP Account, his After
Tax Contribution Account and his Transfer Account will be 100% vested and
nonforfeitable at all times.
(b) Matching Contribution Account. The interest of each
Participant in his Matching Contribution Account will become vested and
nonforfeitable in accordance with the following schedule:
Percent Vested
Years of Service and Nonforfeitable
---------------- ------------------
Less than 2 0
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
(c) Accelerated Vesting. A Participant's interest in his
Matching Contribution Account will become 100% vested and nonforfeitable without
regard to his Years of Service (i) on his 65th birthday if he is then an
Employee, (ii) upon his death while he is an Employee, (iii) upon his Disability
while he is an Employee or (iv) he is part of a group of Participants that the
Committee determines, in its sole discretion, will become 100% vested in
connection with a disposition, sale, merger, reorganization or similar
transaction which causes such Participants to cease to participate in the Plan.
5.2 Forfeiture of Nonvested Amounts. Any nonvested portion of a
Participant's Matching Contribution Account will be forfeited on the last day of
the Plan Year in which the Participant incurs five consecutive One Year Breaks
in Service. If a distribution is made to a Participant when the Participant's
vested interest in his Matching Contribution Account is less than 100% and he is
reemployed prior to incurring a forfeiture, the portion of his Matching
Contribution Account which was not vested will be maintained in a separate
subaccount until he becomes 100% vested. His vested interest in such
subaccount, at any relevant time prior to the time he is fully vested in his
Matching Contribution Account, will be equal to an amount determined by the
formula X = P(AB&D) - D, where P is the vested percentage at the relevant time,
AB is the subaccount balance at the relevant time and D is the amount of the
distribution.
-14-
5.3 Unclaimed Distribution. If the Committee cannot locate a person
entitled to receive a benefit under the Plan within a reasonable period (as
determined by the Committee in its discretion), the amount of the benefit will
be treated as a forfeiture during the Plan Year in which the period ends. If,
before final distributions are made from the Trust Fund following termination of
the Plan, a person who was entitled to a benefit which has been forfeited under
this Section makes a claim to the Committee or the Trustee for his benefit, he
will be entitled to receive, as soon as administratively feasible, a benefit in
an amount equal to the value of the forfeited benefit on the date of forfeiture.
This benefit will be reinstated from Participating Employer contributions made
to the Plan for this purpose.
5.4 Application of Forfeited Amounts. The amount of a Participant's
Matching Contribution Account which is forfeited will be applied as soon as
practicable after the close of each Plan Year to reduce Participating Employer
contributions pursuant to Article 3.
5.5 Reemployment Provisions. If a Participant terminates employment
and again becomes an Employee, his Years of Service completed before his
reemployment will be included in determining his vested and nonforfeitable
interest after he again becomes an Employee.
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ARTICLE 6
DISTRIBUTIONS TO PARTICIPANTS
6.1 Basic Rules Governing Distributions.
(a) Timing of Distributions. Except as set forth in Sections 6.2
and 6.3, distribution of a Participant's vested Account balances will be made as
soon as practicable following the Participant's termination of employment. If a
loan is outstanding from the Trust Fund to the Participant on the date of a
distribution, the amount distributed will be reduced by any security interest in
the Participant's Accounts held by the Plan by reason of the loan.
(b) Form of Distributions. Distributions will be made, at the
Participant's election, in the form of either a single lump sum payment or, in
the case of distributions upon termination of employment, by payments in a
series of equal cash installments spread over a fixed period of years. Shares
of Company Stock allocated to a Participant's Accounts will be distributed in
cash or in the form of whole shares plus cash for any fractional share,
according to a Participant's election.
(c) Participant's Consent to Certain Payments. If the amount of a
Participant's vested Account balances exceeds $3,500, the Committee will not
distribute the Participant's vested Account balances to him prior to his
attainment of age 70-1/2 unless he consents to the distribution. The foregoing
provision will not apply to any distributions required under Sections 10.6 and
10.7.
(d) Source of Installment Distributions. Installment
distributions will be made first from a Participant's After Tax Contribution
Account, if any, next from his Deferral Contribution Account, next from his
Matching Contribution Account, next from his Transfer Account, and last from his
ESOP Account.
6.2 Hardship Distributions.
(a) General Rule. A Participant who has not terminated employment
may request a distribution from his Deferral Contribution Account in the event
of the Participant's hardship. A distribution will be on account of hardship
only if the distribution is necessary to satisfy an immediate and heavy
financial need of the Participant, as defined below, and satisfies all other
requirements of this Section.
(b) Deemed Financial Need. For purposes of this subsection, a
distribution is made on account of an immediate and heavy financial need of the
Participant only if the distribution is for (i) the payment of medical expenses
described in Code section 213(d) previously incurred by the Participant, the
Participant's spouse or any dependents of the Participant (as defined in Code
section 152) or necessary for those persons to obtain medical care described in
section 213(d); (ii) the purchase (excluding mortgage payments) of a principal
residence for the Participant; (iii) the payment of tuition and related
educational fees for the next
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12 months of post-secondary education for the Participant, his or her spouse,
children, or dependents; (iv) the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of the
Participant's principal residence; or (v) the payment of funeral expenses of a
family member.
(c) Reliance on Participant Representation. A distribution will
be considered necessary to satisfy an immediate and heavy financial need of the
Participant only if (i) the Participant represents in writing, on forms provided
by the Committee, (A) that the distribution is not in excess of the amount
required to relieve the immediate and heavy financial need of the Participant
(which may include federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution), and (B) that the need cannot be
relieved through reimbursement or compensation by insurance or otherwise, by
reasonable liquidation of the Participant's assets, to the extent such
liquidation would not itself cause an immediate and heavy financial need, by
cessation of Deferral Contributions under the Plan, or by distributions other
than hardship distributions or nontaxable (at the time of the loan) loans from
plans maintained by any Controlled Group Member or any other entity by which the
Participant is employed, or by borrowing from commercial sources on reasonable
commercial terms, and (ii) the Committee does not have actual knowledge contrary
to the Participant's representation.
(d) Source of Hardship Distributions. The cumulative amount
distributed to a Participant on account of hardship will not exceed the balance
of the Participant's Deferral Contribution Account (or similar account under the
Thrift Plan or StockPlus Plan) as of December 31, 1988, plus the amount of
Deferral Contributions (or elective deferrals under the Thrift Plan or StockPlus
Plan) made after that date (but not earnings on such contributions).
6.3 Other Withdrawals.
(a) ESOP Accounts. A Participant may elect to withdraw all or any
part of his interest in his ESOP Account at any time, and the full shares of
Company Stock withdrawn, together with the cash value of any fractional share of
Company Stock withdrawn, will be delivered to the Participant as soon as
practicable.
(b) Withdrawal Before Age 59-1/2. A Participant who has not
attained age 59-1/2 may apply to the Committee for a withdrawal from his
Accounts, other than his Deferral Contribution Account, without regard to
whether the Participant has suffered a hardship as described in section 6.2;
provided, however, that a Participant must be fully vested to make such a
withdrawal from his Matching Contribution Account. A Participant may not make
more than one withdrawal under this subsection (b) in any Plan Year.
(c) After Age 59-1/2. A Participant who has attained age 59-1/2
may apply to the Committee for a withdrawal from the vested portion of his
Accounts without regard to whether the Participant has suffered a hardship as
described in Section 6.2. A Participant may not make more than one application
for a withdrawal under this subsection (c) in any Plan Year.
6.4 Distribution Procedures. Distributions pursuant to Sections 6.2
and 6.3 will be made as soon as practicable following the Committee's approval
of the Participant's
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written request for withdrawal and will be made in the form described in Section
6.1(b). No distribution under this Section will be made in an amount that is
greater than the excess of the Participant's vested interest in the Accounts
from which the distributions are made over the aggregate amount of outstanding
loans, plus accrued interest, secured by such Accounts.
6.5 Loans to Participants.
(a) General Provisions. A Participant may, subject to the
provisions of this Section, borrow from the vested interest in his Accounts. All
such loans will be subject to the requirements of this Section and such other
rules as the Committee may from time to time prescribe, including without
limitation any rules restricting the purposes for which loans will be approved.
The Committee will have complete discretion as to approval of a loan hereunder
and as to the terms thereof, provided that its decisions will be made on a
uniform and nondiscriminatory basis and in accordance with this Section. If the
Committee approves a loan, the Committee will direct the Trustee to make the
loan and will advise the Participant and the Trustee of the terms and conditions
of the loan. Nothing in this Section will require the Committee to make loans
available to Participants.
(b) Terms and Conditions. Loans to Participants will be made
according to the following terms and conditions and such additional terms and
conditions as the Committee may from time to time establish: (i) no loan will
be for a term of longer than five years; (ii) all loans will become due and
payable in full upon termination (by death or otherwise) of the Participant's
employment with the Controlled Group and upon the occurrence of such other
events as the Committee may from time to time specify; (iii) all loans will bear
a reasonable rate of interest as determined by the Committee from time to time;
(iv) all loans will be made only upon receipt of adequate security (the security
for a loan will be the Participant's interest in the separate investment fund
established under subsection (f) for that loan in an amount that does not exceed
50% of the Participant's vested interest under the Plan); (v) payments of
principal and interest will be made through payroll deductions sufficient to
provide for substantially level amortization of principal and interest with
payments not less frequently than quarterly, which will be irrevocably
authorized by the Participant in writing on a form provided by the Committee at
the time the loan is made; (vi) the amount of any indebtedness (including
accrued and unpaid interest) under any loan will be deducted from a
Participant's interest in the Trust Fund if and only if such indebtedness or any
installment thereof is not paid when due (including amounts due by
acceleration); (vii) no more than one outstanding loan will be permitted with
respect to a Participant at any time; and (viii) all loans will be evidenced by
a note containing such additional terms and conditions as the Committee will
determine.
(c) Maximum Amount of Loans. The amount of any loan made pursuant
to this Section, when added to the outstanding balance of all other loans to the
Participant from all qualified employer plans (as defined in Code section
72(p)(4)) of the Controlled Group, will not exceed the lesser of (i) 50% of the
nonforfeitable interest in his Accounts, or (ii) $50,000 reduced by the excess,
if any, of (A) the highest outstanding balance of all other loans from qualified
employer plans of the Controlled Group to the Participant during the 1-year
period ending on the date on which such loan was made, over (B) the outstanding
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balance of all loans from qualified employer plans of the Controlled Group to
the Participant on the date on which such loan was made.
(d) Minimum Loan. The minimum loan permitted under this Section
is $1,000.00. If such minimum amount exceeds the limitations of subsection (c),
no loan will be made.
(e) Source of Loans. All loans will be made first from a
Participant's Deferral Contribution Account, next from his Matching Contribution
Account, next from his Transfer Account, next from his After Tax Contribution
Account, and last from his ESOP Account. Loans made from an Account will be
made pro rata from the investment funds within such Account unless the Committee
adopts a different ordering rule.
(f) Investment of Loan Payments. All loans will be treated as a
separate investment fund of the borrowing Participant. All payments with
respect to a loan will be credited to the borrowing Participant's Accounts and
will be invested in accordance with the Participant's investment directions in
effect under Section 3.4, or if none, as directed by the Committee.
6.6 Reemployment of Participant. If a Participant who terminated
employment again becomes an Employee before receiving a distribution of his
Account balances, no distribution from the Trust Fund will be made while he is
an Employee, and amounts distributable to him on account of his prior
termination will be held in the Trust Fund until he is again entitled to a
distribution under the Plan.
6.7 Valuation of Accounts. A Participant's distributable Account
balances will be valued as of the latest Valuation Date prior to distribution of
the Accounts.
6.8 Restrictions on Distributions. Article 11 sets forth certain
rules under various provisions of the Code
relating to restrictions on distributions to Participants, to which all
distributions under this Article 6 are subject.
6.9 Direct Rollovers.
(a) Direct Rollover Option. Notwithstanding any other provision
of the Plan, for distributions made on or after January 1, 1993 a Distributee
(as hereinafter defined) may elect, at any time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution (as
hereinafter defined) paid directly to an Eligible Retirement Plan (as
hereinafter defined) specified by the Distributee.
(b) Defined Terms. (i) An Eligible Rollover Distribution is any
distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include (A)
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life of life
expectancy of the
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Distributee or the joint lives or life expectancies of the Distributee and the
Distributee's designated beneficiary, or for a specified period of ten years or
more, (B) any distribution to the extent such distribution is required by Code
section 401(a)(9), and (C) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(ii) An Eligible Retirement Plan is an individual
retirement account described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan described in Code
section 403(a), or a qualified trust described in Code section 401(a) that is a
Defined Contribution Plan within the meaning of Section 10.2(l), that accepts
the Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to a Participant's surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
(iii) A Distributee includes a Participant, the
Participant's spouse, or a Participant's former spouse who is an alternate payee
under a qualified domestic relations order, as defined in Code section 414(p).
6.10 Special Effective Date. The provisions of this Article (other
than Sections 6.8 and 6.9) are effective with respect to distributions made on
or after the Merger Date. Prior to the Merger Date, distributions were governed
under the respective provisions of the Thrift Plan and StockPlus Plan.
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ARTICLE 7
DISTRIBUTIONS TO BENEFICIARIES
7.1 Designation of Beneficiary. Each Participant will have the right
to designate a Beneficiary or Beneficiaries to receive his vested Account
balances upon his death. The designation will be made on forms prescribed by the
Committee and will be effective upon receipt by the Committee. A Participant
will have the right to change or revoke any designation by filing a new
designation or notice of revocation with the Committee, but the revised
designation or revocation will be effective only upon receipt by the Committee.
7.2 Consent of Spouse Required. A Participant who is married may not
designate a Beneficiary other than, or in addition to, his spouse unless his
spouse consents to the designation by means of a written instrument that is
signed by the spouse, identifies the specific Beneficiary (including any class
of Beneficiaries or any contingent Beneficiaries) elected, contains an
acknowledgment by the spouse of the effect of the consent, and is witnessed by a
member of the Committee (other than the Participant) or by a notary public. The
designation will be effective only with respect to the consenting spouse, whose
consent will be irrevocable. A Beneficiary designation to which a spouse has
consented under this Section will be effective only if it states that it may not
be changed by the Participant, other than to designate the spouse as the
Beneficiary, without spousal consent, unless the spouse's prior consent
expressly permits Beneficiary designations by the Participant without any
further consent of the spouse, in which case the prior consent will be effective
as to subsequent changes only if it acknowledges that the spouse has the right
to limit consent to a specific Beneficiary, and states that the spouse
voluntarily elects to relinquish such right.
7.3 Failure to Designate Beneficiary. In the event a Participant has
not designated a Beneficiary, or in the event no Beneficiary survives a
Participant, the distribution of the Participant's vested Account balances upon
his death will be made (i) to the Participant's spouse, if living, (ii) if his
spouse is not then living, to his then living issue by right of representation,
(iii) if neither his spouse nor his issue are then living, to his then living
parents, and (iv) if none of the above are then living, to his estate.
7.4 Distributions to Beneficiaries. Distribution of a Participant's
vested Account balances to the Participant's Beneficiary will be made as soon as
practicable after the Participant's death. A Participant's surviving spouse
(but no other Beneficiary) may elect to defer distribution until the date the
Participant would have attained age 70-1/2. The Participant's vested Account
balances will be distributed to the Beneficiary in a single lump sum payment, or
if elected by the Beneficiary, in a series of equal cash installments over a
fixed period of years, and will be in the same form as provided for Participant
distributions in Section 6.1(b). The Participant's Account balances will be
valued as of the latest Valuation Date prior to distribution of the Accounts.
If a loan is outstanding from the Trust Fund to the Participant on the date of
his death, the amount distributed to his Beneficiary will be reduced by any
security interest in the Participant's Accounts held by the Plan by reason of
the loan.
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7.5 Restrictions on Distributions. Article 11 sets forth certain
rules under various provisions of the Code relating to restrictions on
distributions to Beneficiaries, to which distributions under this Article 7 are
subject.
7.6 Special Effective Date. The provisions of this Article (other
than Section 7.5) are effective with respect to distributions made on or after
the Merger Date. Prior to the Merger Date, distributions were governed under
the respective provisions of the Thrift Plan and StockPlus Plan.
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ARTICLE 8
PROVISIONS REGARDING COMPANY STOCK AND OTHER SECURITIES
8.1 Named Fiduciaries.
(a) Committee as Named Fiduciary. The Committee will be the named
fiduciary within the meaning of ERISA section 402(a)(2) for purposes of
directing the Trustee (i) with respect to the voting of all shares of Company
Stock for which voting instructions are not timely furnished by Participants and
Beneficiaries pursuant to the provisions of Section 8.2 or which have not been
allocated to Participant Accounts; (ii) exercising any options, warrants or
other rights in connection with shares of Company Stock held in the Trust Fund;
and (iii) exercising any appraisal rights, dissenters' rights or similar rights
granted by applicable law to the registered or beneficial holders of Company
Stock. The Committee will adopt from time to time whatever procedures it
determines to be appropriate in order to exercise its powers and duties under
this subsection (a) and may retain advisors and consultants (including, without
limitation, legal counsel and financial advisors) who are independent of the
Company, the Board and the Trustee to the extent the Committee determines such
independent advice to be necessary or appropriate.
(b) Delegation of Powers and Duties. The Committee may, in its
discretion, delegate any power or duty allocated to it pursuant to subsection
(a) above to another person or entity, who will act as an independent fiduciary
and will exercise such power or duty to the same extent as it could have been
exercised by the Committee. The persons or entities to which such powers and
duties may be delegated will include, without limitation, the Board or any
committee of the Board, the Trustee, any other person or entity that meets the
requirements of an investment manager under ERISA section 3(38), or any other
person or entity that the Committee determines in good faith has the requisite
knowledge and experience concerning the matter with respect to which the
delegation is made. The Committee may also remove any fiduciary to whom it has
delegated any power or duty and exercise such power or duty itself or appoint a
successor fiduciary. For purposes of Sections 8.2 and 8.3, the term "Committee"
will also mean any fiduciary to which the Committee has delegated any power or
duty pursuant to this subsection (b).
(c) Participants and Beneficiaries as Named Fiduciaries. Each
Participant and Beneficiary who furnishes instructions to the Trustee on any
matter relating to Company Stock held in the Trust Fund in accordance with the
provisions of Section 8.2 or Section 8.3 will be a named fiduciary within the
meaning of ERISA section 402(a)(2) with respect to such matter.
8.2 Voting of Company Stock by Participants and Beneficiaries.
Before each annual or special meeting of the Company's shareholders, the
Committee will cause to be sent to each Participant and Beneficiary who has
Company Stock allocated to his Accounts on the record date of such meeting a
copy of the proxy solicitation material for the meeting, together with a form
requesting confidential instructions to the Trustee on how to vote the shares of
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Company Stock allocated to his Accounts. Upon receipt of such instructions, the
Trustee will vote the shares allocated to such Participant's or Beneficiary's
Accounts as instructed. The Trustee will vote allocated shares of Company Stock
for which it does not receive timely instructions from Participants or
Beneficiaries and any shares of Company Stock that have not been allocated to
Participants' Accounts in accordance with the Committee's instructions. A
Participant's or Beneficiary's right to instruct the Trustee with respect to
voting shares of Company Stock will not include rights concerning the exercise
of any appraisal rights, dissenters' rights or similar rights granted by
applicable law to the registered or beneficial holders of Company Stock. These
matters will be exercised by the Trustee in accordance with the Committee's
instructions.
8.3 Tender Offer for Company Stock. In the event of a tender offer
for shares of Company Stock subject to Section 14(d)(1) of the Securities
Exchange Act of 1934 or subject to Rule 13e-4 promulgated under that Act (as
those provisions may from time to time be amended or replaced by successor
provisions of federal securities laws), the Committee will advise each
Participant and Beneficiary who has shares of Company Stock allocated to his
Accounts in writing of the terms of the tender offer as soon as practicable
after its commencement and will furnish each Participant and Beneficiary with a
form by which he may instruct the Trustee confidentially to tender shares
allocated to his Accounts. The Trustee will tender those shares it has been
properly instructed to tender, and will not tender those shares which it has
been properly instructed not to tender or for which it has not received timely
instructions. The Committee will also advise Participants and Beneficiaries
that the terms of the Plan provide that the Trustee will not tender allocated
shares for which no instructions are received from Participants and
Beneficiaries and will furnish such related documents as are prepared by any
person and provided to the shareholders of the Company pursuant to the
Securities Exchange Act of 1934. The Committee may also provide Participants
with such other material concerning the tender offer as the Committee in its
discretion determines to be appropriate. The number of shares to which a
Participant's instructions apply will be the total number of shares allocated to
his Accounts as of the latest date for which Participant statements were
prepared, or as of any later date for which Account information is available in
the normal course of Plan administration. The Committee will advise the Trustee
of the commencement date of any tender offer and, until receipt of that advice,
the Trustee will not be obligated to take any action under this Section. Funds
received in exchange for tendered stock will be credited to the Accounts of the
Participant or Beneficiary whose stock was tendered and will be invested as
directed by the Participant or Beneficiary in investment funds permitted under
the Trust Agreement, or if no investment directions are furnished to the
Trustee, as directed by the Committee.
8.4 Voting and Tender Decisions for Other Securities. Voting, tender
and similar decisions which are incidental to a Participant's or Beneficiary's
ownership interest in any investment fund under the Plan (other than the Company
Stock fund) will be exercised by the Trustee only in accordance with
instructions received from the Participant or Beneficiary, who are named
fiduciaries for such purposes within the meaning of ERISA section 402(a)(2).
The Trustee will not exercise any such voting, tender or similar rights for
which no instructions are received from the Participant or Beneficiary. The
Committee will cause to be sent to each such
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Participant and Beneficiary any materials provided to the Plan with respect to
such voting, tender and similar rights within a reasonable time before such
rights must be exercised.
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ARTICLE 9
ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT
9.1 Appointment of Committee Members. The Employee Benefits
Committee appointed by the Board will administer the Plan in accordance with the
provisions of this Article 9. The Committee will consist of at least three
members, who will hold office at the pleasure of the Board. Members of the
Committee are not required to be Employees or Participants. Any member may
resign by giving notice, in writing, filed with the Board.
9.2 Officers and Employees of the Committee. The Committee will
choose from its members a Chairman and a Secretary. The Secretary will keep a
record of the Committee's proceedings and all dates, records and documents
pertaining to the Committee's administration of the Plan. The Committee may
employ and suitably compensate such persons or organizations to render advice
with respect to the duties of the Committee under the Plan as the Committee
determines to be necessary or desirable.
9.3 Action of the Committee. Action of the Committee may be taken
with or without a meeting of Committee members, provided that action will be
taken only upon the vote or other affirmative expression of a majority of the
Committee's members qualified to vote with respect to such action. The Chairman
or the Secretary of the Committee may execute any certificate or other written
direction on behalf of the Committee. In the event the Committee members
qualified to vote on any question are unable to determine such question by a
majority vote or other affirmative expression of a majority of the Committee
members qualified to vote on such question, such question will be determined by
the Board. A member of the Committee who is a Participant may not vote on any
question relating specifically to himself unless he is the sole member of the
Committee.
9.4 Expenses and Compensation. The expenses of administering the
Plan, including without limitation the expenses of the Committee properly
incurred in the performance of its duties under the Plan, will be paid from the
Trust Fund, and all such expenses paid by the Participating Employers on behalf
of the Plan will be reimbursed from the Trust Fund, unless the Participating
Employers in their own discretion elect not to submit such expenses to the
Trustee for reimbursement. In addition, all fees charged by the Trustee or any
administrator that are directly related to a Participant's loan pursuant to
Section 6.5 will be paid from the Accounts of the Participant requesting the
loan. Notwithstanding the foregoing, the members of the Committee will not be
compensated by the Plan for their services as Committee members.
9.5 General Powers and Duties of the Committee. The Committee will
have the full power and responsibility to administer the Plan and the Trust
Agreement and to construe and apply their provisions. For purposes of ERISA,
the Committee will be the named fiduciary with respect to the operation and
administration of the Plan and the Trust Agreement. In addition, the Committee
will have the powers and duties granted by the terms of the Trust Agreement.
The Committee, and all other persons with discretionary control respecting the
operation, administration, control, and/or management of the Plan, the Trust
Agreement, and/or
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the Trust Fund, will perform their duties under the Plan and the Trust Agreement
solely in the interests of Participants and their Beneficiaries.
9.6 Specific Powers and Duties of the Committee.
(a) Administrative Discretion. The Committee will administer the
Plan and the Trust Agreement and have all powers necessary to accomplish that
purpose, including without limitation the authority and discretion to (i)
resolve all questions relating to the eligibility of Employees to become
Participants, (ii) determine the amount of benefits payable to Participants or
their Beneficiaries, and determine the time and manner in which such benefits
are to be paid, (iii) authorize and direct all disbursements by the Trustee from
the Trust Fund, (iv) construe and interpret the Plan and the Trust Agreement,
supply omissions from, correct deficiencies in, and resolve ambiguities in the
language of the Plan and the Trust Agreement and adopt rules for the
administration of the Plan and the Trust Agreement which are not inconsistent
with the terms of such documents, (v) compile and maintain all records it
determines to be necessary, appropriate or convenient in connection with the
administration of the Plan and the Trust Agreement, (vi) determine the
disposition of assets in the Trust Fund in the event the Plan is terminated,
(vii) review the performance of the Trustee with respect to the Trustee's
administrative duties, responsibilities and obligations under the Plan and the
Trust Agreement, report to the Board regarding such administrative performance
of the Trustee, and recommend to the Board, if necessary, the removal of the
Trustee and the appointment of a successor Trustee, and (viii) resolve all
questions of fact relating to any matter for which it has administrative
responsibility.
(b) Appointment of Administrative Delegate. The Committee will
also have the authority and discretion to engage any administrative, legal,
medical, accounting, clerical, or other services it deems appropriate, including
the appointment of one or more persons or institutions to whom the Committee has
delegated certain administrative functions pursuant to a written agreement
(hereinafter referred to as an "Administrative Delegate"). The Administrative
Delegate will perform, without discretionary authority or control,
administrative functions within the framework of policies, interpretations,
rules, practices and procedures made by the Comittee. Any action taken by the
Administrative Delegate may be appealed by an affected Participant to the
Committee in accordance with the claims review procedures provided in Section
9.10. Any decisions which call for interpretations of Plan provisions not
previously made by the Committee will be made only by the Committee. The
Administrative Delegate will not be considered a named fiduciary with respect to
the services it provides.
9.7 Allocation of Fiduciary Responsibility. The Committee from time
to time may allocate to one or more of its members and may delegate to any other
persons or organizations any of its rights, powers, duties and responsibilities
with respect to the operation and administration of the Plan and the Trust
Agreement that are permitted to be delegated under ERISA. Any such allocation
or delegation will be made in writing, will be reviewed periodically by the
Committee, and will be terminable upon such notice as the Committee in its
discretion deems reasonable and proper under the circumstances. Whenever a
person or organization has the power and authority under the Plan or the Trust
Agreement to delegate discretionary authority respecting the administration of
the Plan or the Trust Fund to another person or
-27-
organization, the delegating party's responsibility with respect to such
delegation is limited to the selection of the person to whom authority is
delegated and the periodic review of such person's performance and compliance
with applicable law and regulations. Any breach of fiduciary responsibility by
the person to whom authority has been delegated which is not proximately caused
by the delegating party's failure to properly select or supervise, and in which
breach the delegating party does not otherwise participate, will not be
considered a breach by the delegating party.
9.8 Information to be Submitted to the Committee. To enable the
Committee to perform its functions, the Participating Employers will supply full
and timely information to the Committee on all matters relating to Employees and
Participants as the Committee may require and will maintain such other records
required by the Committee to determine the benefits due to Participants or their
Beneficiaries under the Plan.
9.9 Notices, Statements and Reports. The Company will be the
"administrator" of the Plan as defined in ERISA section 3(16)(A) for purposes of
the reporting and disclosure requirements imposed by ERISA and the Code. The
Committee will assist the Company, as requested, in complying with such
reporting and disclosure requirements.
9.10 Claims Procedure.
(a) Filing Claim for Benefits. If a Participant or Beneficiary
does not receive the benefits which he believes he is entitled to receive under
the Plan, he may file a claim for benefits with the Committee. All claims will
be made in writing and will be signed by the claimant. If the claimant does not
furnish sufficient information to determine the validity of the claim, the
Committee will indicate to the claimant any additional information which is
required.
(b) Notification by the Committee. Each claim will be approved or
disapproved by the Committee within 90 days following the receipt of the
information necessary to process the claim. In the event the Committee denies a
claim for benefits in whole or in part, the Committee will notify the claimant
in writing of the denial of the claim. Such notice by the Committee will also
set forth, in a manner calculated to be understood by the claimant, the specific
reason for such denial, the specific Plan provisions on which the denial is
based, a description of any additional material or information necessary to
perfect the claim with an explanation of why such material or information is
necessary, and an explanation of the Plan's claim review procedure as set forth
in subsection (c). If no action is taken by the Committee on a claim within 90
days, the claim will be deemed to be denied for purposes of the review
procedure.
(c) Review Procedure. A claimant may appeal a denial of his claim
by requesting a review of the decision by the Committee or a person designated
by the Committee, which person will be a named fiduciary under ERISA section
402(a)(2) for purposes of this Section. An appeal must be submitted in writing
within 90 days after the denial and must (i) request a review of the claim for
benefits under the Plan, (ii) set forth all of the grounds upon which the
claimant's request for review is based and any facts in support thereof, and
(iii) set
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forth any issues or comments which the claimant deems pertinent to the
appeal. The Committee or the named fiduciary designated by the Committee will
make a full and fair review of each appeal and any written materials submitted
in connection with the appeal. The Committee or the named fiduciary designated
by the Committee will act upon each appeal within 60 days after receipt thereof
unless special circumstances require an extension of the time for processing, in
which case a decision will be rendered as soon as possible but not later than
120 days after the appeal is received. The claimant will be given the
opportunity to review pertinent documents or materials upon submission of a
written request to the Committee or named fiduciary, provided the Committee or
named fiduciary finds the requested documents or materials are pertinent to the
appeal. On the basis of its review, the Committee or named fiduciary will make
an independent determination of the claimant's eligibility for benefits under
the Plan. The decision of the Committee or named fiduciary on any claim for
benefits will be final and conclusive upon all parties thereto. In the event the
Committee or named fiduciary denies an appeal in whole or in part, it will give
written notice of the decision to the claimant, which notice will set forth in a
manner calculated to be understood by the claimant the specific reasons for such
denial and which will make specific reference to the pertinent Plan provisions
on which the decision was based.
9.11 Service of Process. The Committee may from time to time
designate an agent of the Plan for the service of legal process. The Committee
will cause such agent to be identified in materials it distributes or causes to
be distributed when such identification is required under applicable law. In
the absence of such a designation, the Company will be the agent of the Plan for
the service of legal process.
9.12 Correction of Participants' Accounts. If an error or omission is
discovered in the Accounts of a Participant, or in the amount distributed to a
Participant, the Committee will make such equitable adjustments in the records
of the Plan as may be necessary or appropriate to correct such error or omission
as of the Plan Year in which such error or omission is discovered. Further, a
Participating Employer may, in its discretion, make a special contribution to
the Plan which will be allocated by the Committee only to the Account of one or
more Participants to correct such error or omission.
9.13 Payment to Minors or Persons Under Legal Disability. If any
benefit becomes payable to a minor or to a person under a legal disability,
payment of such benefit will be made only to the guardian of the person or the
estate of such minor, provided the guardian acknowledges in writing, in a form
acceptable to the Committee, receipt of the payment on behalf of the minor. If
any benefit becomes payable to any other person under a legal disability,
payment of such benefit will be made only to the conservator or the guardian of
the estate of such person appointed by a court of competent jurisdiction. Any
payment made in accordance with the provisions of this Section on behalf of a
minor or other person under a legal disability will fully discharge the Plan's
obligation to such person.
9.14 Uniform Application of Rules and Policies. The Committee in
exercising its discretion granted under any of the provisions of the Plan or the
Trust Agreement will do so only in
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accordance with rules and policies established by it which will be uniformly
applicable to all Participants and Beneficiaries.
9.15 Funding Policy. The Plan is to be funded through Participating
Employer contributions and earnings on such contributions; and benefits will be
paid to Participants and Beneficiaries as provided in the Plan.
9.16 The Trust Fund. The Trust Fund will be held by the Trustee for
the exclusive benefit of Participants and Beneficiaries. The assets held in the
Trust Fund will be invested and reinvested in accordance with the terms of the
Trust Agreement, which is hereby incorporated into and made a part of the Plan.
All benefits will be paid solely out of the Trust Fund, and no Participating
Employer will be otherwise liable for benefits payable under the Plan.
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ARTICLE 10
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS TO
PARTICIPANTS' ACCOUNTS
10.1 Priority over Other Contribution and Allocation Provisions. The
provisions set forth in this Article will supersede any conflicting provisions
of Articles 3 and 4.
10.2 Definitions Used in this Article. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "Annual Addition" means the sum of the following amounts with
respect to all Qualified Plans and Welfare Benefit Funds maintained by the
Controlled Group Members:
(i) the amount of Controlled Group Member contributions
with respect to the Limitation Year allocated to the Participant's account;
(ii) the amount of any forfeitures for the Limitation Year
allocated to the Participant's account;
(iii) the amount, if any, carried forward pursuant to
Section 10.4 or a similar provision in another Qualified Plan and allocated to
the Participant's account;
(iv) the amount of a Participant's voluntary nondeductible
contributions for the Limitation Year, provided, however, that the Annual
Addition for any Limitation Year beginning before January 1, 1987 will not be
recomputed to treat all of the Participant's nondeductible voluntary
contributions as part of the Annual Addition;
(v) the amount allocated after March 31, 1984 to an
individual medical benefit account (as defined in Code section 415(1)(2)) which
is part of a Defined Benefit Plan or an annuity plan; and
(vi) the amount derived from contributions paid or accrued
after December 31, 1985 in taxable years ending after such date that are
attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code section 4l9A(d)(3)) under a
Welfare Benefit Fund. A Participant's Annual Addition will not include any
nonvested amounts restored to his account following his reemployment before
incurring five consecutive One Year Breaks in Service, and a corrective
allocation pursuant to Section 9.12 will be considered an Annual Addition for
the Limitation Year to which it relates.
(b) "Average Contribution Percentage" means the average of the
Contribution Percentages of each Participant in a group of Participants.
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(c) "Average Deferral Percentage" means the average of the
Deferral Percentages of each Participant in a group of Participants.
(d) "Compensation" means the wages (as defined in Code section
3401(a) for purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed) paid to
an Employee by the Participating Employers during the Plan Year. In addition,
Compensation includes any contributions made by the Participating Employers on
behalf of an Employee pursuant to a deferral election under the Plan or under
any other employee benefit plan that are not includable in income under Code
section 402(a)(8) and any contributions made by the Participating Employers on
behalf of an Employee to a cafeteria plan that are not includable in income
under Code section 125. The Compensation of an Employee taken into account for
any purpose for any Plan Year will not exceed $200,000, as that amount may be
adjusted by the Secretary of the Treasury. For purposes of applying the $200,000
limit set forth in the preceding sentence, if an Employee is a Highly
Compensated Employee (as defined in Section 10.2(n)) who is either (i) a 5-
percent owner, determined in accordance with Code section 414(q) and the
Treasury Regulations promulgated thereunder, or (ii) one of the ten most highly
compensated Employees ranked on the basis of Compensation paid by the Controlled
Group during the year, such Highly Compensated Employee and the members of his
family (as hereafter defined) will be treated as a single employee and the
Compensation of each member of the family will be aggregated with the
Compensation of the Highly Compensated Employee. The limitation on Compensation
will be allocated among such Highly Compensated Employee and his family members
in proportion to each individual's Compensation. For purposes of this Section,
the term "family" means an Employee's spouse and any lineal descendants who are
under age 19 at the end of the Plan Year in question.
(e) "Contribution Percentage" means the ratio (expressed as a
percentage) determined by dividing the Matching Contributions made to the Plan
on behalf of a Participant who is eligible to receive Matching Contributions for
a Plan Year (but only to the extent such Matching Contributions are not taken
into account in determining the Participant's Deferral Percentage for the Plan
Year) by the Participant's Compensation for the Plan Year. A Participant is
eligible for purposes of determining his Contribution Percentage even though no
Matching Contributions are made to the Plan on his behalf because of the
suspension of his Deferral Contributions under the terms of the Plan, because of
an election not to participate, or because of the limitations contained in
Sections 10.3 through 10.5 of the Plan.
(f) "Deferral Percentage" means the ratio (expressed as a
percentage) determined by dividing the Deferral Contributions made to the Plan
on behalf of a Participant who is eligible to make Deferral Contributions for
all or a portion of a Plan Year by the Participant's Compensation for the Plan
Year. In addition, if the Matching Contributions to the Plan for any Plan Year
satisfy the requirements of Code section 401(k)(2)(B) and (C), a Participant's
Deferral Percentage will be determined by aggregating the Deferral Contributions
and Matching Contributions made to the Plan on his behalf for such Plan Year. A
Participant is eligible to make Deferral Contributions for purposes of
determining his Deferral Percentage even though he may not make Deferral
Contributions because of the suspension of his Deferral Contributions under the
terms of the Plan, because of an election not to participate, or because of
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the limitations contained in Sections 10.3 through 10.5 of the Plan. A Deferral
Contribution will be taken into account for a Plan Year only if (i) the
allocation of such contribution is not contingent on participation in the Plan
or the performance of services after the Plan Year, (ii) such contribution is
paid to the Trustee within 12 months after the end of the Plan Year, and (iii)
such contribution relates to Compensation that either would have been received
by the Participant in the Plan Year, or that is attributable to services
performed during the Plan Year and that would have been received within two and
one-half months after the Plan Year, but for the election to defer.
(g) "Defined Benefit Dollar Limitation" means for any Limitation
Year, $90,000 or such amount as determined by the Commissioner of Internal
Revenue under Code section 415(d)(1) as of the January 1 falling within such
Limitation Year.
(h) "Defined Benefit Fraction" means a fraction, the numerator of
which is the Projected Annual Benefit of a Participant under all Defined Benefit
Plans maintained by a Controlled Group Member determined as of the close of the
Limitation Year and the denominator of which is the lesser of (i) 140% of the
Participant's average Includable Compensation that may be taken into account for
the Limitation Year under Code section 415(b)(1)(B), or (ii) 125% of the Defined
Benefit Dollar Limitation, determined as of the close of the Limitation Year.
If the Participant was a participant in a Defined Benefit Plan maintained by a
Controlled Group Member in existence on July 1, 1982, or on May 6, 1986, the
denominator of the Defined Benefit Fraction will not be less than 125% of the
greater of the Participant's accrued Projected Annual Benefit under such plan as
of the end of the last Limitation Year beginning before January 1, 1983, or his
accrued Projected Annual Benefit of the end of the last Limitation Year
beginning January 1, 1987. The preceding sentence applies only if the Defined
Benefit Plan satisfied the requirements of Code section 415 as in effect at the
end of such Limitation Year.
(i) "Defined Benefit Plan" means a Qualified Plan other
than a Defined Contribution Plan.
(j) "Defined Contribution Dollar Limitation" means for any
Limitation Year, $30,000 or, if greater, 25% of the Defined Benefit Dollar
Limitation for the same Limitation Year. If a short Limitation Year is created
because of a Plan amendment changing the Limitation Year to a different 12-
consecutive month period, the Defined Contribution Dollar Limitation for the
short Limitation Year will not exceed the amount determined in the preceding
sentences multiplied by a fraction, the numerator of which is the number of
months in the short Limitation Year and the denominator of which is 12.
(k) "Defined Contribution Fraction" means a fraction, the
numerator of which is the sum of the Annual Additions allocated to the
Participant's accounts for the applicable Limitation Year and each prior
Limitation Year, and the denominator of which is the sum of the lesser of the
following products for each Limitation Year in which the Participant was an
Employee (regardless of whether a Defined Contribution Plan was in existence for
such Limitation Year) (i) the Defined Contribution Dollar Limitation (determined
for this purpose without regard to the provisions of Code section 415(c)(6))
effective for the Limitation Year
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multiplied by 125%, or (ii) 35% of the Participant's Includable Compensation for
such Limitation Year.
(l) "Defined Contribution Plan" means a Qualified Plan described
in Code section 414(i).
(m) "Family Member" means, with respect to an Employee, the
Employee's spouse and lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants.
(n) "Highly Compensated Employee" means any Employee who performs
services for a Controlled Group Member during the determination year (as
hereinafter defined) and who, during the look-back year (as hereinafter
defined): (i) received Compensation from a Controlled Group Member in excess of
$75,000 (as adjusted pursuant to Code section 415(d)); (ii) received
Compensation from a Controlled Group Member in excess of $50,000 (as adjusted
pursuant to Code section 415(d)) and was a member of the top-paid group (as
hereinafter defined) for such year; or (iii) was an officer of a Controlled
Group Member and received Compensation during such year that is greater than 50%
of the dollar limitation in effect under Code section 415(b)(1)(A) (but limited
to no more than 50 Employee or, if lesser, the greater of three Employees or 10%
of the Employees). The term Highly Compensated Employee also includes: (i) an
Employee who is both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most Compensation from the
Controlled Group during the determination year; and (ii) an Employee who is a 5-
percent owner at any time during the look-back year or determination year. If no
officer has satisfied the Compensation requirement of (ii) above during either a
determination year or look-back year, the officer with the highest Compensation
for such year will be treated as a Highly Compensated Employee. For purposes of
this definition, the determination year is the Plan Year. The look-back year is
the 12-month period immediately preceding the determination year. A Highly
Compensated Employee also includes any Employee who separated from service (or
was deemed to have separated) prior to the determination year, performs no
services for a Controlled Group Member during the determination year, and was a
Highly Compensated Employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday. The term "top-paid group"
means that group of Employees consisting of the top 20% of such Employees ranked
on the basis of Compensation received during the Plan Year. All determinations
under this definition will be made in accordance with Code section 414(q) and
the regulations thereunder.
(o) "Includable Compensation" means the wages paid to an Employee
(as defined in Code section 3401(a) for purposes of income tax withholding at
the source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed) by the Participating Employers during the Plan Year.
(p) "Limitation Year" means the 12-consecutive-month period used
by a Qualified Plan for purposes of computing the limitations on benefits and
annual additions under Code section 415. The Limitation Year for this Plan is
the Plan Year.
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(q) "Maximum Annual Addition" means with respect to a Participant
for any Limitation Year an amount equal to the lesser of (i) the Defined
Contribution Dollar Limitation or (ii) 25% of the Participant's Includable
Compensation.
(r) "Nonhighly Compensated Employee" means an Employee who is
neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
(s) "Projected Annual Benefit" means the annual benefit (as
defined in Code section 415(b)(2)) to which a Participant would be entitled
under the terms of a Defined Benefit Plan maintained by a Controlled Group
Member, assuming that the Participant will continue employment until his normal
retirement age under the Defined Benefit Plan (or current age, if later) and
that the Participant's Includable Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the Defined
Benefit Plan will remain constant for all future Limitation Years.
(t) "Welfare Benefit Fund" means an organization described in
paragraph (7), (9), (17) or (20) of Code section 501(c), a trust, corporation or
other organization not exempt from federal income tax, or to the extent provided
in regulations, any account held for an employer by any person, which is part of
a plan of an employer through which the employer provides benefits to employees
or their beneficiaries, other than a benefit to which Code sections 83(h), 404
(determined without regard to Section 404(b)(2)) or 404A applies, or to which an
election under Code section 463 applies.
10.3 General Allocation Limitation. The Annual Addition of a
Participant for any Limitation Year will not exceed the Maximum Annual Addition.
If, except for the application of this Section, the Annual Addition of a
Participant for any Limitation Year would exceed the Maximum Annual Addition,
the excess Annual Addition attributable to this Plan will not be allocated to
the Participant's Account for the Plan Year included in such Limitation Year,
but will be subject to the provisions of Section 10.4. The limitations contained
in this Article will apply on an aggregate basis to all Defined Contribution
Plans and all Defined Benefit Plans (whether or not any of such plans have
terminated) established by the Controlled Group Members.
10.4 Excess Allocations.
(a) Participants Covered by One Defined Contribution Plan. If the
Participant is not covered under another Defined Contribution Plan or a Welfare
Benefit Fund maintained by a Controlled Group Member during the Limitation Year
and the amount otherwise allocable to his Account would exceed the Maximum
Annual Addition, the Participating Employer contributions and forfeitures which
would cause the Participant's Annual Addition to exceed the Maximum Annual
Addition will be successively allocated in the manner described in Section 4.2
among the Accounts of eligible Participants whose Annual Additions do not exceed
the Maximum Annual Addition. If, after such allocations have been made, there
remain Participating Employer contributions or forfeitures which cannot be
allocated without causing the Annual Addition of a Participant to exceed the
Maximum Annual Addition, the forfeitures
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which cause the Annual Addition to exceed the Maximum Annual Addition and the
Participating Employer contributions which result from a reasonable error in
estimating the Participant's Includable Compensation or from any other limited
facts and circumstances which the Commissioner of Internal Revenue finds
justifiable under Section 1.415-6(b)(6) of the regulations and which cause the
Participant's Annual Addition to exceed the Maximum Annual Addition will be held
in a suspense account in the Trust Fund to be carried forward and used in
subsequent Limitation Years to reduce Participating Employer contributions to
the Plan. If a suspense account is in existence at any time during a Limitation
Year, all amounts in the suspense account must be allocated before any
contributions which would constitute Annual Additions will be made to the Plan
for that Limitation Year.
(b) Participants Covered by Two or More Defined Contribution
Plans. If, in addition to this Plan, the Participant is covered under another
Defined Contribution Plan or a Welfare Benefit Fund maintained by a Controlled
Group Member during the Limitation Year, the following provisions will apply.
The Annual Addition which may be credited to a Participant's Account under this
Plan for any such Limitation Year will not exceed the Maximum Annual Addition
reduced by the Annual Addition credited to a Participant's accounts under the
other Defined Contribution Plans and Welfare Benefit Funds for the same
Limitation Year. If the Annual Addition with respect to the Participant under
the other Defined Contribution Plans and Welfare Benefit Funds maintained by a
Controlled Group Member is less than the Maximum Annual Addition and the
Participating Employer contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan would cause the Annual
Addition for the Limitation Year to exceed the Maximum Annual Addition, the
amount to be contributed or allocated to the Participant's Account under this
Plan will be reduced so that the Annual Addition under all such Defined
Contribution Plans and Welfare Benefit Funds for the Limitation Year will equal
the Maximum Annual Addition. If the aggregate Annual Addition with respect to
the Participant under such other Defined Contribution Plans and Welfare Benefit
Funds is equal to or greater than the Maximum Annual Addition, no amount will be
contributed or allocated to the Participant's Account under this Plan for the
Limitation Year. An excess Annual Addition will be reduced in the manner
described in subsection (c).
(c) Reduction of Excess Allocations. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Annual Addition for the Limitation Year will be determined on the basis of the
Participant's Includable Compensation for the Limitation Year. If a
Participant's Annual Addition under this Plan and the other Defined Contribution
Plans and Welfare Benefit Funds maintained by Controlled Group Members would
result in the Annual Addition exceeding the Maximum Annual Addition for the
Limitation Year, the excess amount will be deemed to consist of the Annual
Addition last allocated. In making this determination, the Annual Addition
attributable to a Welfare Benefit Fund will be deemed to have been allocated
first regardless of the actual date of allocation. If an excess amount was
allocated to a Participant on an allocation date of this Plan that coincides
with an allocation date of another plan, the excess amount attributed to this
Plan will be the product of (i) the total excess amount allocated as of such
date and (ii) the ratio of the Annual Addition allocated to the Participant for
the Limitation Year as of such date under this Plan to the total Annual Addition
allocated to the Participant for the Limitation Year as of such date under this
and all the other
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Defined Contribution Plans. Any excess amount attributed to this Plan will be
disposed of in the manner described in subsection (a).
10.5 Aggregate Benefit Limitation. If a Controlled Group Member
maintains, or at any time maintained, one or more Defined Benefit Plans covering
any Participant in this Plan, the sum of the Defined Benefit Fraction and the
Defined Contribution Fraction for any Limitation Year will equal no more than
one (1.0). The provisions of the Defined Benefit Plans will govern the order of
reduction of Annual Additions or benefit accruals necessary to meet this
limitation. If the provisions of the Defined Benefit Plans are silent, the
current Annual Addition under this Plan will be reduced first, and then the rate
of accrual under the Defined Benefit Plans will be reduced, if necessary to meet
this limitation. If the Defined Contribution Plans taken into account in
determining the Participant's Annual Addition under this Article satisfied the
requirements of Code section 415 as in effect for all Limitation Years beginning
before January 1, 1987, an amount will be subtracted from the numerator of the
Defined Contribution Fraction (not exceeding such numerator) as prescribed in
regulations so that the sum of the Defined Contribution Fraction and the Defined
Benefit Fraction does not exceed 1.0. For purposes of this Section, a
Participant's voluntary nondeductible contributions to a Defined Benefit Plan
will be treated as being part of a separate Defined Contribution Plan.
10.6 Limitation on Deferral Contributions.
(a) Average Deferral Percentage Test. Notwithstanding any other
provision of the Plan, the Average Deferral Percentage for a Plan Year for
Participants who are Highly Compensated Employees will not exceed the greater
of: (i) the Average Deferral Percentage for Participants who are Nonhighly
Compensated Employees multiplied by 1.25; or (ii) the lesser of (A) the Average
Deferral Percentage for Participants who are Nonhighly Compensated Employees
plus two percentage points or (B) the Average Deferral Percentage for
Participants who are Nonhighly Compensated Employees multiplied by 2.0. The
multiple use of the alternative test contained in clause (ii) of this subsection
will be restricted as provided in regulations.
(b) Suspension of Deferral Contributions. If at any time during a
Plan Year the Committee determines, on the basis of estimates made from
information then available, that the limitation described in subsection (a)
above will not be met for the Plan Year, the Committee in its discretion may
reduce or suspend the Deferral Contributions of one or more Participants who are
Highly Compensated Employees to the extent necessary (i) to enable the Plan to
meet such limitation or (ii) to reduce the amount of excess Deferral
Contributions that would otherwise be distributed pursuant to subsection (c)
below.
(c) Reduction of Excess Deferral Contributions. If, for any Plan
Year, the Average Deferral Percentage for Participants who are Highly
Compensated Employees exceeds the limitation described in subsection (a) above,
the Deferral Percentage for each such Participant will be reduced (in the order
of Deferral Percentages, beginning with the highest of such percentages as
provided below) until the limitation in subsection (a) is satisfied. The
highest Deferral Percentage will be reduced first until the limitation in
subsection (a) is satisfied or the percentage equals the next highest
percentage, and the process will be repeated until such
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limitation is satisfied. In order to reduce a Participant's Deferral Percentage,
the Participant's excess Deferral Contributions will be distributed to him. If
Matching Contributions are taken into account in determining Deferral
Percentages, a Participant's Deferral Percentage will be reduced by distributing
first Deferral Contributions in excess of 6% of Compensation and by distributing
next the remaining Deferral Contributions and Matching Contributions, in
proportion to the amount of such contributions for the Plan Year. All
distributions under this subsection will be increased by Trust Fund earnings and
decreased by Trust Fund losses for the Plan Year and for the period between the
end of the Plan Year and the date of distribution and will be made within two
and one-half months following the close of the Plan Year, if practicable, but in
no event later than the last day of the immediately following Plan Year. The
amount of excess Deferral Contributions distributed pursuant to this Section
with respect to a Participant for the Plan Year will be reduced by any Deferral
Contributions previously distributed to the Participant for the same Plan Year
pursuant to Section 3.1(c). The excess Deferral Contributions of participants
who are subject to the family aggregation rules of Section 10.8(d) will be
allocated among the family members in proportion to the Deferral Contributions
(and amounts treated as Deferral Contributions) of the family members.
(d) Determination of Earnings and Losses. The earnings and losses
of the Trust Fund for the Plan Year allocable to the portion of a Participant's
Deferral Contributions that are distributed pursuant to subsection (c) above
will be determined by multiplying the Trust Fund earnings or losses for the Plan
Year allocable to the Participant's Deferral Contribution Account by a fraction,
the numerator of which is the amount of Deferral Contributions to be distributed
to the Participant and the denominator of which is the balance of the
Participant's Deferral Contribution Account on the last day of the Plan Year,
reduced by the earnings and increased by the losses allocable to such Account
for the Plan Year. The earnings and losses of the Trust Fund allocable to the
Participant's Deferral Contributions that are distributed pursuant to subsection
(c) for the period between the end of the Plan Year and the date of such
distribution will be determined in accordance with regulations under Code
section 401(k). The earnings and losses of the Trust Fund allocable to the
portion of a Participant's Matching Contributions that are distributed pursuant
to subsection (c) above will be determined in the manner described in Section
10.7(c).
10.7 Limitation on Matching Contributions.
(a) Average Contribution Percentage Test. Notwithstanding any
other provision of the Plan, the Average Contribution Percentage for a Plan Year
for Participants who are Highly Compensated Employees will not exceed the
greater of: (i) the Average Contribution Percentage for Participants who are
Nonhighly Compensated Employees multiplied by 1.25; or (ii) the lesser of (A)
the Average Contribution Percentage Test for Participants who are Nonhighly
Compensated Employees plus two percentage points or (B) the Average Contribution
Percentage for Participants who are Nonhighly Compensated Employees multiplied
by 2.0. The multiple use of the alternative test contained in clause (ii) of
this subsection will be restricted as provided in regulations.
(b) Reduction of Excess Matching Contributions. If, for any Plan
Year, the Average Contribution Percentage for Participants who are Highly
Compensated Employees
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exceeds the limitation described in subsection (a) above, the Contribution
Percentage for each such Participant will be reduced (in the order of
Contribution Percentages, beginning with the highest of such percentages as
provided below) until the limitation in subsection (a) is satisfied. The highest
Contribution Percentage will be reduced first until the limitation in subsection
(a) is satisfied or the percentage equals the next highest percentage, and the
process will be repeated if necessary until such limitation is satisfied. The
excess Matching Contributions of participants who are subject to the family
aggregation rules of Section 10.8(d) will be allocated among the family members
in proportion to the Matching Contributions made on behalf of the family
members.
(c) Determination of Earnings and Losses. The earnings and losses
of the Trust Fund for the Plan Year allocable to the portion of a Participant's
Matching Contributions that are distributed pursuant to Section 10.6 or
subsection (b) above will be determined by multiplying the Trust Fund earnings
or losses for the Plan Year allocable to the Participant's Matching Contribution
Account by a fraction, the numerator of which is the amount of Matching
Contributions to be distributed and the denominator of which is the balance of
the Participant's Matching Contribution Account on the last day of the Plan
Year, reduced by the earnings and increased by the losses allocable to such
Account for the Plan Year. The earnings and losses of the Trust Fund allocable
to a Participant's Matching Contributions that are distributed pursuant to
Section 10.6 or subsection (b) above for the period between the end of the Plan
Year and the date of such distribution will be determined in accordance with
regulations under Code sections 401(k) and 401(m).
10.8 Aggregation Rules.
(a) Code Section 415. For purposes of the allocation limitations
under Code section 415 set forth in this Article, (i) all Defined Benefit Plans
ever maintained by a Controlled Group Member will be treated as one Defined
Benefit Plan, and all Defined Contribution Plans ever maintained by a Controlled
Group Member will be treated as one Defined Contribution Plan, and (ii)
Controlled Group Members will be determined in accordance with the 50% control
rule of Code section 415(h).
(b) Code Section 401(k). For purposes of the limitation on
Deferral Contributions set forth in this Article, the Average Deferral
Percentage for any Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to have deferral contributions allocated to his account
under two or more plans or arrangements described in Code section 401(k) that
are maintained by the Company or any Controlled Group Member will be determined
as if all such deferral contributions were made under a single arrangement
(unless such plans or arrangements may not be permissively aggregated under
applicable regulations). Plans that are aggregated for purposes of satisfying
the minimum coverage rules of Code section 410(b) (other than for purposes of
the average benefits percentage test) will be treated as a single plan for such
purposes.
(c) Code Section 401(m). The Contribution Percentage of a
Participant who is a Highly Compensated Employee for a Plan Year and who is
eligible to make voluntary Employee contributions or receive deferral
contributions or matching employer contributions
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allocated to his account under two or more Defined Contribution Plans maintained
by the Company or a Controlled Group Member will be determined as if all such
contributions were made to a single plan (unless such plans may not be
permissively aggregated under applicable regulations). Plans that are aggregated
for purposes of satisfying the minimum coverage rules of Code section 410(b)
(other than for purposes of the average benefits percentage test) will be
treated as a single plan for such purposes.
(d) Family Members. For purposes of determining the Contribution
Percentage or the Deferral Percentage of a Participant who is both a Highly
Compensated Employee and either (i) a 5-percent owner, determined in accordance
with Code section 414(q) and the regulations thereunder or (ii) one of the 10
most highly compensated Employees ranked on the basis of Compensation paid by
the Controlled Group during the year, determined in accordance with Code section
414(q) and the regulations thereunder, the Matching Contributions, Deferral
Contributions, and Compensation of such Participant will include the Matching
Contributions, Deferral Contributions and Compensation of Family Members, and
Family Members will be disregarded in determining the Contribution Percentage or
the Deferral Percentage of all other Participants.
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ARTICLE 11
RESTRICTIONS ON DISTRIBUTIONS TO
PARTICIPANTS AND BENEFICIARIES
11.1 Priority over Other Distribution Provisions. The provisions set
forth in this Article will supersede any conflicting provisions of Article 6 or
Article 7.
11.2 General Restrictions.
(a) Distributions Prior to a Separation from Service. Except for
distributions permitted under Sections 6.2 and 6.3, a Participant's interest in
the Plan will not be distributed before the Participant's separation from
service, disability or death unless: (i) the Plan is terminated without the
establishment or maintenance by the Participating Employers of another defined
contribution plan (other than an employee stock ownership plan as defined in
Code section 4975(e)(7)) (ii) a Participating Employer that is a corporation
disposes of all or substantially all of the assets used by the Participating
Employer in a trade or business to a person other than a Controlled Group Member
but only if the Participant continues employment with the acquiring employer; or
(iii) a Participating Employer that is a corporation disposes of its interest in
a subsidiary to a person other than a Controlled Group Member but only if the
Participant continues employment with the subsidiary. An event will not be
treated as described in clause (ii) or (iii) above unless the Participating
Employer continues to maintain the Plan after the disposition.
(b) Lump Sum Distribution Required. An event described in
subparagraph (a) that would otherwise permit distribution of a Participant's
interest in the Plan will not be treated as described in subparagraph (a) unless
the Participant receives a lump sum distribution by reason of the event. A lump
sum distribution for this purpose will be a distribution described in Code
section 402(e)(4), without regard to clauses (i), (ii), (iii), and (iv) of
subparagraph (A), subparagraph (B), or subparagraph (H) thereof.
11.3 Restrictions on Commencement of Distributions. The provisions of
this Section will apply to restrict the Committee's ability to delay the
commencement of distributions. Unless a Participant elects otherwise in writing,
distribution of the Participant's vested interest in his Account will begin no
later than the 60th day after the close of the Plan Year in which occurs the
latest of (i) the date on which the Participant attains age 65, (ii) the tenth
anniversary of the Plan Year in which the Participant began participation in the
Plan, or (iii) the Participant's termination of employment.
11.4 Restrictions on Delay of Distributions. The distribution of a
Participant's entire vested and nonforfeitable interest in the Plan will be made
in a lump sum not later than April 1 following the calendar year in which he
attains age 70-1/2 unless the Participant makes a withdrawal under Section
6.3(c) that is sufficient to satisfy the minimum distribution requirements of
Code section 401(a)(9) and the regulations thereunder. On or before December 31
of such calendar year and of each
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succeeding calendar year, distribution of the entire amount of any additional
balances in the Participant's Accounts (determined as of the latest Valuation
Date prior to the date of distribution) will be made in a lump sum unless the
Participant makes a withdrawal under Section 6.3(c) that is sufficient to
satisfy the minimum distribution requirements of Code section 401(a)(9) and the
regulations thereunder.
11.5 Limitation to Assure Benefits Payable to Beneficiaries are
Incidental. In the event that any payments under this Plan are to be made to
someone other than the Participant or jointly to the Participant and his spouse
or other payee, such payments must conform to the "incidental benefit" rules of
Code section 401(a)(9)(G) and the regulations thereunder.
11.6 Restrictions in the Event of Death. Upon the death of a
Participant, the following distribution provisions will apply to limit the
Beneficiary's ability to delay distributions. If the Participant dies after
distribution of his benefit has begun, the remaining portion of his benefit will
continue to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death; but if he dies before
distribution of his benefit commences, his entire benefit will be distributed no
later than five years after his death, unless an individual who is a designated
Beneficiary elects to receive distributions in substantially equal installments
over the Beneficiary's life or life expectancy beginning no later than one year
after the Participant's death. If the designated Beneficiary is the
Participant's surviving spouse, the date distributions are required to begin
will not be earlier than the date on which the Participant would have attained
age 70-1/2, and, if the spouse dies before payments begin, subsequent
distributions will be made as if the spouse had been the Participant. Any
amount paid to a child of the Participant will be treated as if it had been paid
to the surviving spouse if the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
11.7 Compliance with Regulations. Distributions under the Plan to
Participants or Beneficiaries will be made in accordance with the regulations
issued under Code section 401(a)(9).
11.8 Delayed Payments. If the amount of a distribution required to
begin on a date determined under the applicable provisions of the Plan cannot be
ascertained by such date, or if it is not possible to make such payment on such
date because the Committee has been unable to locate a Participant or
Beneficiary after making reasonable efforts to do so, a payment retroactive to
such date may be made no later than 60 days after the earliest date on which the
amount of such payment can be ascertained or the date on which the Participant
or Beneficiary is located (whichever is applicable).
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ARTICLE 12
TOP-HEAVY PROVISIONS
12.1 Priority over Other Plan Provisions. If the Plan is or becomes a
Top-Heavy Plan in any Plan Year, the provisions of this Article will supersede
any conflicting provisions of the Plan. However, the provisions of this Article
will not operate to increase the rights or benefits of Participants under the
Plan except to the extent required by Code section 416 and other provisions of
law applicable to Top-Heavy Plans.
12.2 Definitions Used in this Article. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "Defined Benefit Dollar Limitation" means the limitation
described in Section 10.2(g).
(b) "Defined Benefit Plan" means the Qualified Plan described in
Section 10.2(i).
(c) "Defined Contribution Dollar Limitation" means the limitation
described in Section 10.2(j).
(d) "Defined Contribution Plan" means the Qualified Plan
described in Section 10.2(l).
(e) "Determination Date" means for the first Plan Year of the
Plan the last day of the Plan Year and for any subsequent Plan Year the last day
of the preceding Plan Year.
(f) "Determination Period" means the Plan Year containing the
Determination Date and the four preceding Plan Years.
(g) "Includable Compensation" means the compensation described in
Section 10.2(o).
(h) "Key Employee" means any Employee or former Employee (and the
Beneficiary of a deceased Employee) who at any time during the Determination
Period was (i) an officer of a Controlled Group Member, if such individual's
Includable Compensation (modified as described below) exceeds 50% of the Defined
Benefit Dollar Limitation, (ii) an owner (or considered an owner under Code
section 318) of one of the ten largest interests in a Controlled Group Member,
if such individual's Includable Compensation exceeds the Defined Contribution
Dollar Limitation, (iii) a 5-percent owner of a Controlled Group Member, or (iv)
a 1-percent owner of a Controlled Group Member who has annual Includable
Compensation of more than $150,000. The determination of who is a Key Employee
will be made in accordance with Code section 416(i). For purposes of this
subsection only, Includable Compensation will include
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salary reduction contributions pursuant to a cash or deferred arrangement under
Code section 401(k) or a cafeteria plan meeting the requirements of Code section
125.
(i) "Minimum Allocation" means the allocation described in
the first sentence of Section 12.3(a).
(j) "Permissive Aggregation Group" means the Required Aggregation
Group of Qualified Plans plus any other Qualified Plan or Qualified Plans of a
Controlled Group Member which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of Code sections
401(a)(4) and 410 (including simplified employee pension plans).
(k) "Present Value" means present value based only on the
interest and mortality rates specified in a Defined Benefit Plan.
(l) "Required Aggregation Group" means the group of plans
consisting of (i) each Qualified Plan (including simplified employee pension
plans) of a Controlled Group Member in which at least one Key Employee
participates, and (ii) any other Qualified Plan (including simplified employee
pension plans) of a Controlled Group Member which enables a Qualified Plan to
meet the requirements of Code sections 401(a)(4) or 410.
(m) "Top-Heavy Plan" means the Plan for any Plan Year in which
any of the following conditions exists: (i) if the Top-Heavy Ratio for the Plan
exceeds 60% and the Plan is not a part of any Required Aggregation Group or
Permissive Aggregation Group of Qualified Plans; (ii) if the Plan is a part of a
Required Aggregation Group but not part of a Permissive Aggregation Group of
Qualified Plans and the Top-Heavy Ratio for the Required Aggregation Group
exceeds 60%; or (iii) if the Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of Qualified Plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60%.
(n) "Top-Heavy Ratio" means a fraction, the numerator of which is
the sum of the Present Value of accrued benefits and the account balances (as
required by Code section 416)) of all Key Employees with respect to such
Qualified Plans as of the Determination Date (including any part of any accrued
benefit or account balance distributed during the five-year period ending on the
Determination Date), and the denominator of which is the sum of the Present
Value of the accrued benefits and the account balances (including any part of
any accrued benefit or account balance distributed in the five-year period
ending on the Determination Date) of all Employees with respect to such
Qualified Plans as of the Determination Date. The value of account balances and
the Present Value of accrued benefits will be determined as of the most recent
Top-Heavy Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Code section 416 for the
first and second Plan Years of a Defined Benefit Plan. The account balances and
accrued benefits of a participant who is not a Key Employee but who was a Key
Employee in a prior year will be disregarded. The calculation of the Top-Heavy
Ratio, and the extent to which distributions, rollovers, transfers and
contributions unpaid as of the Determination Date are taken into account will be
made in accordance with Code section 416. Employee contributions
-44-
described in Code section 219(e)(2) will not be taken into account for purposes
of computing the Top-Heavy Ratio. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year. The accrued benefit
of any Employee other than a Key Employee will be determined under the method,
if any, that uniformly applies for accrual purposes under all Qualified Plans
maintained by all Controlled Group Members and included in a Required
Aggregation Group or a Permissive Aggregation Group or, if there is no such
method, as if the benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Code section 411(b)(1)(C).
Notwithstanding the foregoing, the account balances and accrued benefits of any
Employee who has not performed services for an employer maintaining any of the
aggregated plans during the five-year period ending on the Determination Date
will not be taken into account for purposes of this subsection.
(o) "Top-Heavy Valuation Date" means the last day of each Plan
Year.
12.3 Minimum Allocation.
(a) Calculation of Minimum Allocation. For any Plan Year in which
the Plan is a Top-Heavy Plan, each Participant who is not a Key Employee will
receive an allocation of Participating Employer contributions and forfeitures of
not less than the lesser of 3% of his Includable Compensation for such Plan Year
or the percentage of Includable Compensation that equals the largest percentage
of Participating Employer contributions (including Deferral Contributions) and
forfeitures allocated to a Key Employee. The Minimum Allocation is determined
without regard to any Social Security contribution. Deferral Contributions made
on behalf of Participants who are not Key Employees will not be treated as
Participating Employer contributions for purposes of the Minimum Allocation in
Plan Years beginning after December 31, 1988. Matching Contributions that are
allocated to Participants who are not Key Employees and that are taken into
account in determining a Participant's Deferral Percentage or Contribution
Percentage for a Plan Year beginning after December 31, 1988 will not be treated
as Participating Employer contributions for such Plan Year for purposes of the
Minimum Allocation. The Minimum Allocation applies even though under other Plan
provisions the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the Plan Year because
(i) the non-Key Employee fails to make mandatory contributions to the Plan, (ii)
the non-Key Employee's Includable Compensation is less than a stated amount, or
(iii) the non-Key Employee fails to complete 1,000 Hours of Service in the Plan
Year.
(b) Limitation on Minimum Allocation. No Minimum Allocation will
be provided pursuant to subsection (a) to a Participant who is not employed by a
Controlled Group Member on the last day of the Plan Year.
(c) Minimum Allocation When Participant is Covered by Another
Qualified Plan. If a Controlled Group Member maintains one or more other
Defined Contribution Plans covering Employees who are Participants in this Plan,
the Minimum Allocation will be provided
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under this Plan, unless such other Defined Contribution Plans make explicit
reference to this Plan and provide that the Minimum Allocation will not be
provided under this Plan, in which case the provisions of subsection (a) will
not apply to any Participant covered under such other Defined Contribution
Plans. If a Controlled Group Member maintains one or more Defined Benefit Plans
covering Employees who are Participants in this Plan, and such Defined Benefit
Plans provide that Employees who are participants therein will accrue the
minimum benefit applicable to top-heavy Defined Benefit Plans notwithstanding
their participation in this Plan then the provisions of subsection (a) will not
apply to any Participant covered under such Defined Benefit Plans. If a
Controlled Group Member maintains one or more Defined Benefit Plans covering
Employees who are Participants in this Plan, and the provisions of the preceding
sentence do not apply, then each Participant who is not a Key Employee and who
is covered by such Defined Benefit Plans will receive a Minimum Allocation
determined by applying the provisions of subsection (a) with the substitution of
"5%" in each place that "3%" occurs therein.
(d) Nonforfeitability. The Participant's Minimum Allocation, to
the extent required to be nonforfeitable under Code section 416(b) and the
special vesting schedule provided in this Article, may not be forfeited under
Code section 411(a)(3)(B) (relating to suspension of benefits on reemployment)
or 411(a)(3)(D) (relating to withdrawal of mandatory contributions).
12.4 Modification of Aggregate Benefit Limit.
(a) Modification. Subject to the provisions of subsection (b), in
any Plan Year in which the Top-Heavy Ratio exceeds 60%, the aggregate benefit
limit described in Article 10 will be modified by substituting "100%" for "125%"
in Sections 10.2(h) and (k).
(b) Exception. The modification of the aggregate benefit limit
described in subsection (a) will not be required if the Top-Heavy Ratio does not
exceed 90% and one of the following conditions is met: (i) Employees who are
not Key Employees do not participate in both a Defined Benefit Plan and a
Defined Contribution Plan which are in the Required Aggregation Group, and the
Minimum Allocation requirements of Section 12.3(a) are met when such
requirements are applied with the substitution of "4%" for "3%"; (ii) the
Minimum Allocation requirements of Section 12.3(c) are met when such
requirements are applied with the substitution of "7 1/2%" for "5%"; or (iii)
Employees who are not Key Employees have an accrued benefit of not less than 3%
of their average Includable Compensation for the five consecutive Plan Years in
which they had the highest Includable Compensation multiplied by their Years of
Service in the which the Plan is a Top-Heavy Plan (not to exceed a total such
benefit of 30%), expressed as a life annuity commencing at the Participant's
normal retirement age in a Defined Benefit Plan which is in the Required
Aggregation Group.
12.5 Minimum Vesting.
(a) Required Vesting. For any Plan Year in which this Plan is a
Top-Heavy Plan, the minimum vesting schedule set forth in subsection (b) will
automatically apply to the Plan to the extent it provides a higher vested
percentage than the vesting provisions of Article 5. The minimum vesting
schedule applies to all Account balances including amounts attributable to Plan
Years before the effective date of Code section 416 and amounts attributable
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to Plan Years before the Plan became a Top-Heavy Plan. Further, no reduction in
vested Account balances may occur in the event the Plan's status as a Top-Heavy
Plan changes for any Plan Year, and any change in the effective vesting schedule
from the schedule set forth in subsection (b) to the regular schedule set forth
in Article 5 will be treated as an amendment subject to Section 14.1(iii).
However, this subsection does not apply to the Account balances of any Employee
who does not have an Hour of Service after the Plan has initially become a Top-
Heavy Plan, and such Employee's Account balances will be determined without
regard to this Section.
(b) Minimum Vesting Schedule.
Percentage Vested
Years of Service and Nonforfeitable
---------------- ------------------
Less than 2 0
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
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ARTICLE 13
ADOPTION OF PLAN BY CONTROLLED GROUP MEMBERS
13.1 Adoption Procedure. Any Controlled Group Member may become a
Participating Employer under the Plan provided that (i) the Board approves the
adoption of the Plan by the Controlled Group Member and designates the
Controlled Group Member as a Participating Employer; (ii) the Controlled Group
Member adopts the Plan and Trust Agreement together with all amendments then in
effect by appropriate resolutions of the board of directors of the Controlled
Group Member; and (iii) the Controlled Group Member by appropriate resolutions
of its board of directors agrees to be bound by any other terms and conditions
which may be required by the Board, provided that such terms and conditions are
not inconsistent with the purposes of the Plan.
13.2 Effect of Adoption by Controlled Group Member. A Controlled Group
Member that adopts the Plan pursuant to this Article will be deemed to be a
Participating Employer for all purposes hereunder, unless otherwise specified in
the resolutions of the Board designating the Controlled Group Member as a
Participating Employer. In addition, the Board may provide, in its discretion
and by appropriate resolutions, that the Employees of the Controlled Group
Member will receive credit for their employment with the Controlled Group Member
prior to the date it became a Controlled Group Member for purposes of
determining either or both the eligibility of such Employees to participate in
the Plan and the vested and nonforfeitable interest of such Employees in their
Account balances, provided that such credit will be applied in a uniform and
nondiscriminatory manner with respect to all such Employees.
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ARTICLE 14
AMENDMENT OF THE PLAN
14.1 Right of Company to Amend Plan. The Company reserves the right to
amend the Plan at any time and from time to time to the extent it may deem
advisable or appropriate, provided that (i) no amendment will increase the
duties or liabilities of the Trustee without its written consent; (ii) no
amendment will cause a reversion of Plan assets to the Participating Employers
not otherwise permitted under the Plan; (iii) no amendment will have the effect
of reducing the percentage of the vested and nonforfeitable interest of any
Participant in his Account nor will the vesting provisions of the Plan be
amended unless each Participant with at least three Years of Service (including
Years of Service disregarded pursuant to the reemployment provisions (if any) of
Article 5) is permitted to elect to continue to have the prior vesting
provisions apply to him, within 60 days after the latest of the date on which
the amendment is adopted, the date on which the amendment is effective, or the
date on which the Participant is issued written notice of the amendment; and
(iv) no amendment will be effective to the extent that it has the effect of
decreasing a Participant's Account balance or eliminating an optional form of
distribution as it applies to an existing Account balance.
14.2 Amendment Procedure. Any amendment to the Plan will be made only
pursuant to action of the Board. A certified copy of the resolutions adopting
any amendment and a copy of the adopted amendment as executed by the Company
will be delivered to the Committee and to the Trustee. Upon such action by the
Board, the Plan will be deemed amended as of the date specified as the effective
date by such Board action or in the instrument of amendment. The effective date
of any amendment may be before, on or after the date of such action by the
Board.
14.3 Effect on Participating Employers. Unless an amendment expressly
provides otherwise, all Participating Employers will be bound by any amendment
to the Plan.
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ARTICLE 15
TERMINATION, PARTIAL TERMINATION AND
COMPLETE DISCONTINUANCE OF CONTRIBUTIONS
15.1 Continuance of Plan. The Participating Employers expect to
continue the Plan indefinitely, but they do not assume an individual or
collective contractual obligation to do so, and the right is reserved to the
Company, by action of the Board, to terminate the Plan or to completely
discontinue contributions thereto at any time. In addition, subject to remaining
provisions of this Article, any Participating Employer at any time may
discontinue its participation in the Plan with respect to its Employees.
15.2 Complete Vesting. If the Plan is terminated, or if there is a
complete discontinuance of contributions to the Plan by the Participating
Employers, the amounts allocated or to be allocated to the Accounts of all
affected Participants will become 100% vested and nonforfeitable without regard
to their Years of Service. For purposes of this Section, a Participant who has
terminated employment and is not again an Employee at the time the Plan is
terminated or there is a complete discontinuance of Participating Employer
contributions will not be an affected Participant entitled to full vesting if
the Participant had no vested interest in his Account balance attributable to
Participating Employer contributions at his termination of employment. In the
event of a partial termination of the Plan, the amounts allocable to the
Accounts of those Participants who cease to participate on account of the facts
and circumstances which result in the partial termination will become 100%
vested and nonforfeitable without regard to their Years of Service.
15.3 Disposition of the Trust Fund. If the Plan is terminated, or if
there is a complete discontinuance of contributions to the Plan, the Committee
will instruct the Trustee either (i) to continue to administer the Plan and pay
benefits in accordance with the Plan until the Trust Fund has been depleted, or
(ii) to distribute the assets remaining in the Trust Fund, unless distribution
is prohibited by Section 11.2. If the Trust Fund is to be distributed, the
Committee will make, after deducting estimated expenses for termination of the
Trust Fund and distribution of its assets, the allocations required under the
Plan as though the date of completion of the Trust Fund termination were a
Valuation Date. The Trustee will distribute to each Participant the amount
credited to his Account as of the date of completion of the Trust Fund
termination.
15.4 Withdrawal by a Participating Employer. A Participating Employer
may withdraw from participation in the Plan or completely discontinue
contributions to the Plan only with the approval of the Board. If any
Participating Employer withdraws from the Plan or completely discontinues
contributions to the Plan, a copy of the resolutions of the board of directors
of the Participating Employer adopting such action, certified by the secretary
of such board of directors and reflecting approval by the Board, will be
delivered to the Retirement Committee as soon as it is administratively feasible
to do so, and the Retirement Committee will communicate such action to the
Trustee and to the Employees of the Participating Employer.
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ARTICLE 16
MISCELLANEOUS
16.1 Reversion Prohibited.
(a) General Rule. Except as provided in subsections (b), (c) and
(d), it will be impossible for any part of the Trust Fund either (i) to be used
for or diverted to purposes other than those which are for the exclusive benefit
of Participants and their Beneficiaries (except for the payment of taxes and
administrative expenses), or (ii) to revert to a Controlled Group Member.
(b) Disallowed Contributions. Each contribution of the
Participating Employers under the Plan is expressly conditioned upon the
deductibility of the contribution under Code section 404. If all or part of a
Participating Employer's contribution is disallowed as a deduction under Code
section 404, such disallowed amount (reduced by any Trust Fund losses
attributable thereto) may be returned by the Trustee to the Participating
Employer with respect to which the deduction was disallowed (upon the direction
of the Committee) within one year after the disallowance.
(c) Mistaken Contributions. If a contribution is made by a
Participating Employer by reason of a mistake of fact, then so much of the
contribution as was made as a result of the mistake (reduced by any Trust Fund
losses attributable thereto) may be returned by the Trustee to the Participating
Employer (upon direction of the Committee) within one year after the mistaken
contribution was made.
(d) Failure to Qualify. In the event the Internal Revenue Service
determines that the Plan and the Trust Agreement, as amended by amendment
acceptable to the Company, initially fail to constitute a qualified plan and
establish a tax-exempt trust under the Code, then notwithstanding any other
provisions of the Plan or the Trust Agreement, the contributions made by the
Participating Employers prior to the date of such determination will be returned
to the Participating Employers within one year after such determination and the
Plan and Trust Agreement will terminate, but only if the application for
determination is made within the time prescribed by law for filing the Company's
income tax return for the taxable year in which the Plan and the Trust Agreement
were adopted, or such later date as the Secretary of the Treasury may prescribe.
16.2 Bonding, Insurance and Indemnity.
(a) Bonding. To the extent required under ERISA, the
Participating Employers will obtain, pay for and keep current a bond or bonds
with respect to each Committee member and each Employee who receives, handles,
disburses, or otherwise exercises custody or control of, any of the assets of
the Plan.
-51-
(b) Insurance. The Participating Employers, in their discretion,
may obtain, pay for and keep current a policy or policies of insurance, insuring
the Committee members, the members of the board of directors of each
Participating Employer and other Employees to whom any fiduciary responsibility
with respect to the administration of the Plan has been delegated against any
and all costs, expenses and liabilities (including attorneys' fees) incurred by
such persons as a result of any act, or omission to act, in connection with the
performance of their duties, responsibilities and obligations under the Plan and
any applicable law.
(c) Indemnity. If the Participating Employers do not obtain, pay
for and keep current the type of insurance policy or policies referred to in
subsection (b), or if such insurance is provided but any of the parties referred
to in subsection (b) incur any costs or expenses which are not covered under
such policies, then the Participating Employers will indemnify and hold
harmless, to the extent permitted by law, such parties against any and all
costs, expenses and liabilities (including attorneys' fees) incurred by such
parties in performing their duties and responsibilities under this Plan,
provided that such party or parties were acting in good faith within what was
reasonably believed to have been the best interests of the Plan and its
Participants.
16.3 Merger, Consolidation or Transfer of Assets. There will be no
merger or consolidation of all or any part of the Plan with, or transfer of the
assets or liabilities of all or any part of the Plan to, any other Qualified
Plan unless each Participant who remains a Participant hereunder and each
Participant who becomes a participant in the other Qualified Plan would receive
a benefit immediately after the merger, consolidation or transfer (determined as
if the other Qualified Plan and the Plan were then terminated) which is equal to
or greater than the benefit they would have been entitled to receive under the
Plan immediately before the merger, consolidation or transfer if the Plan had
then terminated.
16.4 Spendthrift Clause. The rights of any Participant or Beneficiary
to and in any benefits under the Plan will not be subject to assignment or
alienation, and no Participant or Beneficiary will have the power to assign,
transfer or dispose of such rights, nor will any such rights to benefits be
subject to attachment, execution, garnishment, sequestration, the laws of
bankruptcy or any other legal or equitable process. This Section will not apply
to a "qualified domestic relations order". A "qualified domestic relations
order" means a judgment, decree or order made pursuant to a state domestic
relations law which satisfies the requirements of Code section 414(p). Payment
to an alternate payee pursuant to a qualified domestic relations order will be
made in an immediate lump sum payment, if the order so provides.
16.5 Rights of Participants. Participation in the Plan will not give
any Participant the right to be retained in the employ of a Controlled Group
Member or any right or interest in the Plan or the Trust Fund except as
expressly provided herein.
16.6 Gender, Tense and Headings. Whenever any words are used herein in
the masculine gender, they will be construed as though they were also used in
the feminine gender in all cases where they would so apply. Whenever any words
used herein are in the singular form, they will be construed as though they were
also used in the plural form in all cases where they
-52-
would so apply. Headings of Articles, Sections and subsections as used herein
are inserted solely for convenience and reference and constitute no part of the
Plan.
16.7 GOVERNING LAW. THE PLAN WILL BE CONSTRUED AND GOVERNED IN ALL
RESPECTS IN ACCORDANCE WITH APPLICABLE FEDERAL LAW AND, TO THE EXTENT NOT
PREEMPTED BY SUCH FEDERAL LAW, IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MINNESOTA.
Executed this 30th day of March, 1993.
ARKLA, INC.
By /s/ Rick L. Spurlock
___________________________________
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APPENDIX A
PARTICIPATING EMPLOYERS
ARKLA, INC.
(other than the Minnegasco Division)
ARKLA ENERGY RESOURCES COMPANY
LOUISIANA INTRASTATE GAS CORPORATION
(and its subsidiaries)
AER - ARKANSAS GAS TRANSIT COMPANY
(and its subsidiaries)
ARKLA CHEMICAL CORPORATION
ARKLA ENERGY MARKETING COMPANY
MISSISSIPPI RIVER TRANSMISSION CORPORATION
(and its subsidiaries)
-54-
EXHIBIT 4.11
FIRST AMENDMENT
TO
ARKLA EMPLOYEE SAVINGS & INVESTMENT PLAN
NorAm Energy Corp., a Delaware corporation, adopts the following amendment
to the Arkla Employee Savings & Investment Plan (the "Plan").
1. Section 5.2 of the Plan is amended in its entirety to read as follows:
5.2 Forfeiture of Nonvested Amounts.
(a) Break in Service. Any nonvested portion of a
Participant's Matching Contribution Account will be forfeited on the
last day of the Plan Year in which the Participant incurs five
consecutive One Year Breaks in Service. If a distribution is made to a
Participant when the Participant's vested interest in his Matching
Contribution Account is less than 100% and he is reemployed prior to
incurring a forfeiture, the portion of his Matching Contribution
Account which was not vested will be maintained in a separate
subaccount until he becomes 100% vested. His vested interest in such
subaccount, at any relevant time prior to the time he is fully vested
in his Matching Contribution Account, will be equal to an amount
determined by the formula X = P(AB&D) - D, where P is the vested
percentage at the relevant time, AB is the subaccount balance at the
relevant time and D is the amount of the distribution.
(b) Discriminatory Matching Contributions. If the allocation
of a Participating Employer matching contribution to a Participant's
Matching Contribution Account results in a discriminatory matching
contribution (as determined under regulations under Code Section
401(a)(4) or Code Section 401(m)) for such Participant because the
matching contribution relates to a Deferral Contribution that exceeds
the limitations described in Section 3.2 or Section 10.6, or because
of any other reason, and such discriminatory matching contribution
cannot be distributed as an excess Matching Contribution pursuant to
Section 10.7, such matching contribution, or the portion thereof that
results in prohibited discrimination, will be forfeited
notwithstanding any other provision of the Plan to the contrary.
2. Section 10.2(d) of the Plan is amended in its entirety to read as
follows:
(d) "Compensation" means the wages (as defined in Code
section 3401(a) for purposes of income tax withholding at the source
but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or
the services performed) paid to an Employee by the Participating
Employers during the Plan Year. In addition, Compensation includes any
contributions made by the Participating Employers on behalf of an
Employee pursuant to a deferral election under the Plan or under any
other employee benefit plan that are not includable in income under
Code section 402(a)(8) and any contributions made by the Participating
Employers on behalf of an Employee to a cafeteria plan that are not
includable in income under Code section 125. The Compensation of an
Employee taken into account for any purpose for any Plan Year ending
before January 1, 1994, will not exceed $200,000, and will not exceed
$150,000 for any Plan Year beginning after December 31, 1993, as such
amounts may be adjusted by the Secretary of the Treasury. For purposes
of applying the applicable dollar limit set forth in the preceding
sentence, if an Employee is a Highly Compensated Employee (as defined
in Section 10.2(n)) who is either (i) a 5-percent owner, determined in
accordance with Code section 414(q) and the Treasury Regulations
promulgated thereunder, or (ii) one of the ten most highly compensated
Employees ranked on the basis of Compensation paid by the Controlled
Group during the year, such Highly Compensated Employee and the
members of his family (as hereafter defined) will be treated as a
single employee and the Compensation of each member of the family will
be aggregated with the Compensation of the Highly Compensated
Employee. The limitation on Compensation will be allocated among such
Highly Compensated Employee and his family members in proportion to
each individual's Compensation. For purposes of this Section, the term
"family" means an Employee's spouse and any lineal descendants who are
under age 19 at the end of the Plan Year in question.
3. Sections 10.7(b) and (c) are amended in their entirety to read as
follows:
(b) Reduction of Excess Matching Contributions. If, for any
Plan Year, the Average Contribution Percentage for Participants who
are Highly Compensated Employees exceeds the limitation described in
subsection (a) above, the Contribution Percentage for each such
Participant will be reduced (in the order of Contribution Percentages,
beginning with the highest of such percentages as provided below)
until the limitation in subsection (a) is satisfied. The highest
Contribution Percentage will be reduced first until the limitation in
subsection (a) is satisfied or the percentage equals the next highest
percentage, and the process will be repeated if necessary until such
limitation is satisfied. In order to reduce a Participant's
Contribution Percentage, the Participant's excess Matching
Contributions (increased by Trust Fund earnings and decreased by Trust
Fund losses for the Plan Year and for the period between the end of
the Plan Year and the date of correction) will be forfeited, to the
extent such Matching Contributions are not vested, and to the extent
vested, will be distributed to the Participant within two and
-2-
one-half months following the close of the Plan Year, if practicable,
but in no event later than the last day of the immediately following
Plan Year. The excess Matching Contributions of Participants who are
subject to the family aggregation rules of Section 10.8(d) will be
allocated among the family members in proportion to the Matching
Contributions made on behalf of the family members.
(c) Determination of Earnings and Losses. The earnings and
losses of the Trust Fund for the Plan Year allocable to the portion of
a Participant's Matching Contributions that are distributed pursuant
to Section 10.6 or forfeited or distributed pursuant to subsection (b)
above will be determined by multiplying the Trust Fund earnings or
losses for the Plan Year allocable to the Participant's Matching
Contribution Account by a fraction, the numerator of which is the
amount of Matching Contributions to be forfeited or distributed and
the denominator of which is the balance of the Participant's Matching
Contribution Account on the last day of the Plan Year, reduced by the
earnings and increased by the losses allocable to such Account for the
Plan Year. The earnings and losses of the Trust Fund allocable to a
Participant's Matching Contributions that are distributed pursuant to
Section 10.6 or forfeited or distributed pursuant to subsection (b)
above for the period between the end of the Plan Year and the date of
such forfeiture or distribution will be determined in accordance with
regulations prescribed by the Secretary of the Treasury interpreting
Code sections 401(k) and 401(m).
4. The foregoing amendments will be effective as of January 1, 1989.
Executed at Houston, Texas, this 28th of June, 1995.
NORAM ENERGY CORP.
By /s/ Rick L. Spurlock
------------------------------
Rick L. Spurlock, Senior Vice
President, Human Resources
-3-
EXHIBIT 4.12
SECOND AMENDMENT
TO
ARKLA EMPLOYEE SAVINGS & INVESTMENT PLAN
NorAm Energy Corp., a Delaware corporation, pursuant to authorization of
its Board of Directors, adopts the following amendments to the Arkla Employee
Savings & Investment Plan (the "Plan").
1. The Plan is hereby redesignated as the "NorAm Employee Savings &
Investment Plan".
2. All references in the Plan to "Arkla, Inc., a Delaware corporation,"
and "Arkla" are hereby amended to refer to "NorAm Energy Corp., a Delaware
corporation," and "NorAm", respectively.
3. The foregoing amendments will be effective as of September 13, 1995.
Executed at Houston, Texas, this 30th of September, 1995.
NORAM ENERGY CORP.
By /s/ Rick L. Spurlock
-------------------------------
Rick L. Spurlock, Senior Vice
President, Human Resources
EXHIBIT 4.13
THIRD AMENDMENT
TO
NORAM EMPLOYEE SAVINGS & INVESTMENT PLAN
NorAm Energy Corp., a Delaware corporation (the "Company"), pursuant to
authorization of the Company's Employee Benefits Administrative Committee,
adopts the following amendments to the Arkla Employee Savings & Investment Plan
(the "Plan").
1. Section 3.5 of the Plan ("Rollover and Transfer Contributions") is
amended by the addition of the following sentence:
Notwithstanding any other provision of the Plan, if an Employee
participating in the Minnegasco Division Employees' Retirement Savings
Plan (the "Minnegasco Plan") transfers employment to a Participating
Employer, (i) the Employee's interest in employer matching
contributions that are transferred to the Plan from the Minnegasco
Plan will continue to vest at the same rate as under the terms of the
Minnegasco Plan in effect on the date of his benefits are transferred
to the Plan and (ii) the Plan will provide to such Employee all
optional forms of benefit and other benefits that were available to
him under the Minnegasco Plan and that may not be reduced or
eliminated under Code section 411(d)(6) and the regulations
thereunder.
2. The foregoing amendments will be effective as of April 1, 1996.
Executed at Houston, Texas, this ___ of May, 1996.
NORAM ENERGY CORP.
By /s/ Rick L. Spurlock
-------------------------------
Rick L. Spurlock, Senior Vice
President, Human Resources
EXHIBIT 4.14
FOURTH AMENDMENT
TO
NORAM EMPLOYEE SAVINGS & INVESTMENT PLAN
NorAm Energy Corp., a Delaware corporation (the "Company"),
hereby amends the NorAm Employee Savings & Investment Plan, effective as of
November 1, 1996, as follows:
1. Section 8.2 of the Plan is hereby amended to read as follows:
"8.2 Voting of Company Stock by Participants and Beneficiaries.
Before each annual or special meeting of the Company's
shareholders, the Committee will cause to be sent to each Participant
and Beneficiary who has Company Stock allocated to his Accounts on the
record date of such meeting a copy of the proxy solicitation material
for the meeting, as well as a form requesting confidential instructions
to the Trustee on how to vote the shares of Company Stock allocated to
his Accounts. Upon receipt of such instructions, the Trustee will vote
the shares allocated to such Participant's or Beneficiary's Accounts as
instructed. The Trustee will vote allocated shares of Company Stock for
which it does not receive timely instructions from Participants or
Beneficiaries and any shares of Company Stock that have not been
allocated to Participants' Accounts in the same proportion as it votes
the shares for which it receives timely instructions under this Plan. A
Participant's or Beneficiary's right to instruct the Trustee with
respect to voting shares of Company Stock will not include rights
concerning the exercise of any appraisal rights, dissenters' rights or
similar rights granted by applicable law to the registered or beneficial
holders of Company Stock. These matters will be exercised by the Trustee
in accordance with the Committee's instructions."
2. Article 8 of the Plan is hereby amended to add the following Section 8.5
to the end thereof:
"8.5 Merger Transaction. By Agreement and Plan of Merger, dated
as of August 11, 1996, as amended, by and among the Company, Houston
Industries Incorporated ("HI"), Houston Lighting & Power Company
(HL&P"), and HI Merger, Inc. (the "Merger Agreement"), the Company has
agreed to merge into HI Merger, Inc. and become a wholly owned
subsidiary of Houston (the corporation to be formed by the merger of HI
and HL&P) (the "Transaction"). The Merger Agreement provides that each
record holder of shares of Company Stock outstanding immediately prior
to the effective time of the Transaction shall be entitled to elect to
receive in respect of each such share either cash consideration or
shares of HI common stock. The Trustee will, in accordance with the
procedures established by the Committee for that purpose request each
Participant and Beneficiary who has Company Stock allocated to his
Accounts as of the date established by the Committee to instruct the
Trustee as to the percentage of his interest in the Common
-1-
Stock fund for which he wishes to receive cash and the percentage for which he
wishes to receive HI common stock. The Trustee will make elections as to shares
of Company Stock for which instructions are not timely received in the same
proportion as the elections it makes for shares for which it receives timely
instructions under this Plan. Elections shall be subject to adjustment as
provided in the Merger Agreement.
Cash consideration received in the Transaction by a Participant
or Beneficiary will be invested as soon as administratively practicable in the
investment funds (including the Company Stock fund) in which the Participant has
elected to invest contributions to the Plan on the date the cash consideration
is received by the Trustee or, in the case of a Participant or Beneficiary for
whom contributions are not being made on such date, in the investment funds in
which the Participant's or Beneficiary's account balances are invested on such
date. The cash consideration will be allocated among the investment funds in the
same proportion as contributions or account balances, as the case may be, are
allocated. Notwithstanding the foregoing, any amounts that would be invested in
the NorAm Pooled GIC Fund pursuant to the provisions of this paragraph shall
instead be invested in the IDS Trust U.S. Government Securities Fund.
The Committee may adopt such other rules and procedures with
respect to the administration of the Plan as are necessary or appropriate, in
its sole discretion, as a consequence of the pending Transaction,
notwithstanding any provision of this Plan to the contrary. Such rules and
procedures shall be applied on a uniform and nondiscriminatory basis."
Executed at Houston, Texas, this 17 of December, 1996.
NORAM ENERGY CORP.
By /s/ Rick L. Spurlock
---------------------------------------
Rick L. Spurlock, Senior Vice President
Human Resources
-2-
EXHIBIT 4.15
ARKLA EMPLOYEE SAVINGS & INVESTMENT PLAN
TRUST AGREEMENT
ARKLA EMPLOYEE SAVINGS & INVESTMENT PLAN
TRUST AGREEMENT
Arkla, Inc., a Delaware corporation (hereinafter referred to as the
"Company"), and IDS Trust, a Division of IDS Bank & Trust (hereinafter referred
to as the "Trustee") by execution of this Trust Agreement establish a trust fund
for the purpose of holding and investing assets of the Arkla Employee Savings &
Investment Plan (hereinafter referred to as the "Plan"), effective as of April
1, 1993. The Plan and this Trust Agreement will be deemed to be and will be
construed as a single document.
TABLE OF CONTENTS
Page
----
Article 1 Definitions 1
Article 2 Establishment of Trust
and Certain Primary Conditions of Its
Operation 2
Article 3 Investment of the Trust Fund 3
Article 4 Powers of the Trustee 10
Article 5 Duties and Obligations of the Trustee 13
Article 6 Compensation, Rights and Indemnities
of the Trustee 16
Article 7 Resignation or Removal of the Trustee 20
Article 8 Amendment of the Trust Agreement
or Termination of the Plan 22
Article 9 Miscellaneous 24
(ii)
ARTICLE 1
DEFINITIONS
1.1 Incorporation of Definitions Used in Plan. The definitions stated
in Article 1 of the Plan are hereby incorporated by reference into this Trust
Agreement.
1.2 Definitions of Terms Used Exclusively in Trust Agreement.
(a) "Bank" means (i) a banking institution organized under the laws
of the United States; (ii) a member bank of the Federal Reserve System; or (iii)
any other banking institution, whether or not incorporated, doing business under
the laws of any state or the United States, a substantial portion of the
business of which consists of receiving deposits or exercising fiduciary powers
similar to those permitted to national banks under the authority of the
Comptroller of the Currency, and which is supervised and examined by state or
federal authority having supervision over banks.
(b) "Fiduciary" means a person or organization that is a fiduciary
with respect to the Plan or the Trust Fund within the meaning of Section 3(21)
of ERISA.
(c) "Guaranteed Benefit Policy" means a guaranteed benefit policy as
defined in Section 401(b)(2)(B) of ERISA.
(d) "Investment Manager" means a person or organization (other than
the Committee or the Trustee) (i) which the Committee has appointed to manage,
invest and reinvest all or a portion of the assets of the Trust Fund pursuant to
Section 3.2; (ii) which is (A) registered as an investment adviser under the
Investment Advisers Act of 1940, (B) a bank as defined in said Act, or (C) an
insurance company qualified to manage, acquire or dispose of the assets of a
pension plan under the laws of more than one state; and (iii) which has
acknowledged in writing to the Committee and the Trustee that such person or
organization is a Fiduciary with respect to the assets of the Trust Fund under
its management and control.
ARTICLE 2
ESTABLISHMENT OF TRUST AND CERTAIN
PRIMARY CONDITIONS OF ITS OPERATIONS
2.1 Establishment of Trust. This Trust Agreement establishes an
employees' trust pursuant to the Plan that is intended to be a tax-exempt
organization under Section 501(a) of the Code. The Company and the Trustee
hereby agree that the Trust Fund will be held in trust and administered,
invested and distributed for the benefit of Participants and their Beneficiaries
under the terms and conditions of this Trust Agreement.
2.2 Designation of Trust. The employees' trust established hereunder
will be known as the Arkla Employee Savings & Investment Plan Trust.
2.3 Trust Fund. The Trust Fund will consist of the contributions made
by the Participants and Participating Employers under the provisions of the
Plan, as such contributions are invested and reinvested by the Trustee in
accordance with the provisions of this Trust Agreement, plus the earnings and
less the losses thereupon, without distinction between principal and income,
less the payments and distributions which at the time of reference have been
made by the Trustee as authorized herein.
2.4 Exclusive Benefit Rule. The employees' trust established by this
Trust Agreement is expressly declared to be irrevocable, subject to the
provisions of Article 8. It will be impossible, at any time prior to the
satisfaction of all liabilities with respect to Participants and their
Beneficiaries, for any part of the principal or income of the Trust Fund to be
used for, or diverted to, any purpose which is not for the exclusive benefit of
Participants and their Beneficiaries. The preceding sentence will not be
construed in such a way as to prohibit the use of assets of the Trust Fund to
pay fees and other expenses incurred in the maintenance, administration and
investment of the Trust Fund in accordance with the provisions of this Trust
Agreement.
2.5 Reversion Prohibited. Except as permitted in the Plan, it will be
impossible for any part of the Trust Fund to revert to a Controlled Group
Member.
2.6 Spendthrift Clause. The rights of any Participant or Beneficiary to
and in any benefits under the Plan will not be subject to assignment or
alienation, and no Participant or Beneficiary will have the power to assign,
transfer or dispose of such rights, nor will any such rights to benefits be
subject to attachment, execution, garnishment, sequestration, the laws of
bankruptcy or any other legal or equitable process. This Section will not apply
with respect to qualified domestic relations orders as defined in Section 414(p)
of the Code and Section 206(d)(3) of ERISA.
-2-
ARTICLE 3
INVESTMENT OF THE TRUST FUND
3.1 Administrator and Participant Direction. The assets of the Trust
Fund will be invested and reinvested by the Trustee as directed by the Committee
or Participants in accordance with the provisions of the Plan, unless the
Committee delegates investment responsibility and authority for all or a portion
of the Trust Fund to an Investment Manager pursuant to the provisions of Section
3.2 or to the Trustee. The Committee will direct the Trustee as to the
investment funds to be established for investment of Trust Fund assets in
accordance with the provisions of the Plan. All directions by the Committee or
Participants to the Trustee concerning the investment, reinvestment or
management of assets of the Trust Fund will be made in writing or in such other
manner as is acceptable to the Trustee. Directions by the Committee to the
Trustee will be made by the member or members of the Committee that have been
designated by the Committee in writing to the Trustee from time to time.
Directions given by Participants pursuant to the Plan directly to an Investment
Manager or to an insurance company that has issued an insurance contract to the
Trustee will be deemed to be directions to the Trustee for purposes of this
Section.
3.2 Investment Managers. (a) The Committee has the power and authority
to appoint one or more Investment Managers. Each Investment Manager so
appointed will have the power and authority to invest, acquire, manage or
dispose of the assets of the Trust Fund under its management and control, and to
direct the Trustee with respect to the investment and reinvestment of such
assets.
(b) If the Committee elects to delegate investment authority for the
assets of all or any portion of the Trust Fund to an Investment Manager pursuant
to subsection (a), the Committee will deliver a written resolution to such
effect to the Trustee, which resolution will specify the portion of the Trust
Fund affected. Upon receipt of such resolution, the Trustee will be obligated
to follow the investment directions of the Investment Manager with respect to
the assets of the specified portion of the Trust Fund until such Investment
Manager resigns or is removed or replaced by the Committee. The Trustee will
not be a party to any agreement between the Committee and an Investment Manager,
and will have no responsibility respecting the terms and conditions of such
agreement.
(c) In exercising its authority to delegate investment authority to
an Investment Manager, the Committee has the duty, responsibility and power to
(i) examine and analyze the performance of prospective Investment Managers; (ii)
select an Investment Manager or Managers; (iii) determine the portion of the
Trust Fund that will be under the management and control of each Investment
Manager; (iv) issue appropriate instructions to the Trustee and to each
Investment Manager regarding the allocation of investment authority; (v) review
the performance of each Investment Manager at periodic intervals; and (vi)
remove any Investment Manager when the Committee deems such removal to be
necessary or appropriate.
-3-
(d) All directions by an Investment Manager to the Trustee
concerning the investment, reinvestment or management of assets of the Trust
Fund will be made, in writing or in such other manner as is acceptable to the
Trustee, by such person or persons as the Investment Manager designates in
writing to the Trustee from time to time.
(e) An Investment Manager may engage any investment adviser or
investment counselor that it deems necessary or appropriate, and may provide for
directions concerning the investment and reinvestment of the assets of the Trust
Fund under its management and control to be made directly to the Trustee by such
adviser or counselor as its agent, provided however that the Investment Manager
acknowledges in writing to the Trustee that the directions of such agent will be
considered the directions of the Investment Manager and that the Investment
Manager will be responsible for the directions of such agent.
(f) If an Investment Manager resigns or is removed by the Committee,
the Committee will notify the Trustee in writing of such resignation or removal.
Upon receipt of such notice, the power and authority to invest and reinvest the
assets of the Trust Fund formerly under the control and management of the
Investment Manager will return to the Committee unless the Committee indicates
that a successor Investment Manager has been appointed.
(g) Each Investment Manager will receive for its services reasonable
compensation as agreed upon in writing between the Committee and the Investment
Manager from time to time.
3.3 Fiduciary Responsibility. (a) For purposes of ERISA, the Board, the
Committee, and each Participant will be the "Named Fiduciaries" with respect to
the Plan and the Trust Fund, but only to the extent that the Board, Committee,
or Participant exercises any discretionary authority or discretionary control
with respect to the management or disposition of assets of the Trust Fund, or
otherwise is a Fiduciary.
(b) The Board's responsibilities as a Named Fiduciary are to appoint
the Trustee and the Committee and to establish a funding policy and method for
the Plan, in accordance with the provisions of the Plan.
(c) Except as provided in Sections 3.2(e) and 4.3(c), whenever a
person or organization (the "Delegating Party") has the power and authority
under the Plan or this Trust Agreement to delegate discretionary power and
authority respecting the control, management, operation or administration of the
Plan or any portion of the Trust Fund to another person or organization (the
"Appointee"), the Delegating Party's responsibility with respect to such
delegation is limited to the selection of the Appointee and a periodic review of
the Appointee's performance and compliance with applicable law or regulations.
Any breach of fiduciary responsibility by the Appointee which is not proximately
caused by the Delegating Party's failure to properly select or supervise the
Appointee, and in which breach the Delegating Party does not otherwise
participate, will not be considered to be a breach of fiduciary responsibility
by the Delegating Party.
-4-
(d) Where the Committee, a Participant or an Investment Manager has
the power and authority to direct the investment of any assets of the Trust
Fund, the Trustee does not have any duty to question any direction, to review
any securities or other property, or to make any suggestions in connection
therewith. The Trustee will as promptly as possible comply with any direction
given by the Committee, a Participant or Investment Manager. The Trustee will
neither be liable in any manner and for any reason for any losses or other
unfavorable investment results arising from its compliance with such direction,
nor be liable for failing to invest any assets of the Trust Fund under the
management and control of the Committee, a Participant or an Investment Manager
in the absence of written investment directions regarding such assets.
(e) Subject to the provisions of Sections 3.3(c), 3.6(a) and 7.2,
neither the Company nor the Committee will have any discretion, direction or
control over the investment decisions of a Participant, the Trustee or any
Investment Manager with respect to the assets of the Trust Fund for which a
Participant, the Trustee or Investment Manager has investment responsibility.
(f) Subject only to the provision of Section 3.3(c), neither the
Participating Employers nor the Committee will be responsible or liable for any
losses or other unfavorable investment results arising from the Investment,
reinvestment and management of any assets of the Trust Fund by any Investment
Manager.
(g) In the event that a Fiduciary succeeds to the management and
control of assets of the Trust Fund which were previously under the management
and control of another Fiduciary, the successor Fiduciary (i) will not be liable
for losses of the Trust Fund which result from the disposition of an investment
made by the other Fiduciary or from the holding of any illiquid or unmarketable
investment made by the other Fiduciary, and (ii) will not be liable for any
failure to adequately diversify Trust Fund investments under its management and
control if the lack of diversification stems from the investments made by the
other Fiduciary. The provisions of this subsection (g) will not be deemed to
relieve the successor Fiduciary in any way of its own fiduciary responsibility
with respect to the Plan or the Trust Fund. In addition, with respect to the
assets transferred to the Trustee from a prior trustee upon the initial
establishment of the Trust Fund, the Trustee will not be responsible for any
actions or inactions of any prior trustee or other fiduciary, including the
review of the propriety of any investment under any prior trust agreement, and
the Trustee will not be required to examine or question in any way the
administration of the assets of the Trust Fund prior to its appointment.
(h) It is the intent of the parties to this Trust Agreement that
each Fiduciary will be solely responsible for his or its own acts or omissions.
Except to the extent imposed by ERISA, no Fiduciary has a duty to question
whether any other Fiduciary is fulfilling all of the responsibilities imposed
upon such other Fiduciary by ERISA or any regulations, rulings or other
administrative promulgations thereunder, and no Fiduciary will have any
liability for another Fiduciary's breach of fiduciary responsibility with
respect to the Plan or the Trust Fund unless such Fiduciary (i) participates
knowingly in such breach, (ii) has actual knowledge of such breach and fails to
make efforts reasonable under the circumstances to remedy such breach, or (iii)
through his or its failure to comply with Section 404(a)(1) of ERISA in
performing his or its own specific fiduciary responsibilities with respect to
the Plan or the Trust Fund, has enabled
-5-
such other Fiduciary to commit a breach of the latter's fiduciary
responsibilities with respect to the Plan or the Trust Fund.
3.4 ERISA Requirements. (a) In investing and managing the assets of the
Trust Fund, each Fiduciary who has investment responsibility and authority will
exercise the care, skill, prudence and diligence, under the circumstances then
prevailing, which prudent men, acting in like capacity and familiar with such
matters, would use in the conduct of an enterprise of like character and with
like aims.
(b) The investment of the assets of the Trust Fund will be
diversified so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so. In the event that the
responsibility and authority for the investment of said assets is held by one
person or entity, that person or entity will be responsible for determining the
proper diversification policy with respect to such assets. In the event that the
responsibility and authority for the investment of said assets is allocated
among more than one person or entity (other than the Participants), the
Committee will be responsible for determining the proper diversification policy
with respect to such assets, and will advise each such party with investment
responsibility and authority of such policy. Each Participant who directs the
investment of his Accounts pursuant to the provisions of the Plan will be solely
responsible for the diversification of the investments of his Accounts.
(c) Except as authorized by regulations promulgated by the
Department of Labor, no Fiduciary may maintain the indicia of ownership of any
assets of the Trust Fund outside the jurisdiction of the district courts of the
United States.
(d) In investing and managing the assets of the Trust Fund, each
Fiduciary who has investment responsibility and authority will take into
consideration any funding policy and method adopted by the Board with respect to
the Plan, and will be subject to any specific written instructions from the
Board relating to the implementation of any such funding policy and method.
3.5 Generally Permitted Investments. (a) Subject to the other
provisions of this Article 3 and the limitations of ERISA, the Trustee may
invest assets of the Trust Fund in any property, real or personal, tangible or
intangible, and without regard to the law of any state regarding permissible
investments of trust fund assets, including (but not limited to) (i) investments
providing a return which is fixed, limited or determinable in advance by the
terms of the contract or instrument creating or evidencing such investment,
including without limitation obligations of the United States Government or any
instrumentality thereof, obligations of any State, city, municipality or any
instrumentality thereof, corporate bonds, corporate notes or corporate
debentures, and commercial paper, banker's acceptances and certificates of
deposit available through, and savings or other interest-bearing accounts in, a
Bank (including the Trustee, if the Trustee is a Bank, or any Bank affiliated
with the Trustee); (ii) common and preferred stock; other securities, rights,
obligations or property (real or personal, and including certificates of
participation) issued by investment companies or investment trusts; equipment
trust certificates; mutual funds; and limited partnership interests; (iii)
bonds, notes, debentures, or preferred stock which are convertible into common
or preferred stock; (iv) mortgages, deeds of
-6-
trust and leaseholds with respect to real property; and (v) any other similar
securities or evidences of indebtedness, whether domestic or foreign.
(b) The Trustee may purchase from an insurance company (including,
to the extent permitted by law, an insurance company which is an Investment
Manager) an interest in a pooled investment fund or an annuity or similar
contract (including, but not limited to, any individual annuity contract,
deposit administration contract, group annuity contract, guaranteed interest
contract, immediate participation contract or any similar contract), or, subject
to the provisions of Section 3.3, a Guaranteed Benefit Policy.
(c) The Trustee may sell any securities or other property at any
time held by it for cash or on credit; transfer, dispose of or convert any
securities or other property at any time held by it; or exchange such securities
or property for other securities or property in which the Trustee has the power
to invest assets of the Trust Fund. Any such sale, transfer, disposition,
conversion or exchange may be made publicly or by private arrangement and no
person dealing with the Trustee will be bound to see to the application of the
purchase money or to inquire into the validity, expediency or propriety of any
such sale or other disposition.
(d) The Trustee may exercise any conversion privilege or
subscription right available in connection with any securities or property
constituting a part of the Trust Fund; may consent to the reorganization,
consolidation, merger or readjustment of the finances of any corporation,
company or association of which any of the securities are at any time held
hereunder, and exercise any option or options and make any agreement or
subscription and pay expenses, assessments or subscriptions in connection
therewith; and hold and retain any property so acquired.
(e) The Trustee may lease property to third parties (other than
"parties-in-interest," as defined in Section 3(14) of ERISA, unless such
property is "qualifying employer real property," as defined in Section 407(d)(4)
of ERISA).
(f) The Trustee may buy put and call options for the purchase or
sale of securities, or sell such put and call options when the Trust Fund holds
securities which are the subject of such options, if such options are traded on
a recognized exchange or are otherwise reasonably liquid.
(g) The Trustee may acquire and dispose of promissory notes of
individuals or corporations, including promissory notes secured by first or
junior liens of trust deeds upon real property.
(h) Any declaration of trust executed by the Trustee (if the Trustee
is a Bank or a trust company supervised by the United States or any State)
creating a common or collective trust fund for investment by qualified employee
benefit plans is hereby made, in its entirety, a part of this Trust Agreement.
The Trustee may cause all or any portion of the assets of this Trust Fund to be
commingled with the assets of similar trust funds created by others by causing
such assets to be invested as a part of any such common or collective trust
fund, provided that such assets will be subject to all the provisions of the
applicable declaration of
-7-
trust, as amended, and provided that the Trustee receives not more than
reasonable compensation from such transaction. The Trustee may also purchase for
or sell from the Trust Fund interests in any such common or collective trust
fund maintained by the Trustee (if the Trustee is a Bank or a trust company
described above), a pooled investment fund maintained by the Trustee (if the
Trustee is an insurance company qualified to do business in any state), or any
other investment vehicle sponsored by the Trustee if permitted under ERISA or an
exemption issued by the Department of Labor, provided that the Trustee receives
not more than reasonable compensation from such transaction. Without limiting
the generality of the foregoing provisions, the Trustee may cause any part or
all of the moneys of the Trust Fund, without limitation as to amount, to be
commingled with the moneys of employee benefit trusts of other employers, by
causing such moneys to be invested as a part of any one or more of the
collective funds established and maintained under the 1992 Amended and Restated
Declaration of Trust - IDS Trust Collective Investment Funds for Employee
Benefit Trusts. Moneys of the Trust Fund so invested in any of said collective
funds at any time will be subject to all of the provisions of said Declaration
of Trust as it is amended from time to time, and said Declaration of Trust is
hereby made a part of this Agreement.
(i) The Trustee may hold any portion of the Trust Fund in cash,
uninvested and nonproductive of income to the extent necessary to satisfy
current expenses of the Plan or the Trust Fund. The Trustee will not be
required to pay interest on any cash so held uninvested. The Trustee may
deposit cash in an interest-bearing account in any Bank (including the Trustee,
if the Trustee is a Bank, or any Bank affiliated with the Trustee).
(j) The Trustee may invest and reinvest all or any portion of the
Trust Fund in mutual funds, annuities and insurance contracts, including those
managed and distributed by IDS Financial Corporation and its affiliated
companies.
(k) The Trustee may invest and reinvest all or any portion of the
Trust Fund pursuant to an agreement between the Company and the Trustee that
authorizes the Trustee to establish a special designated pooled investment fund
primarily for the purpose of valuing certain assets of the Trust Fund. the
terms and conditions of such an agreement specifically creating such a pooled
investment fund will be incorporated by reference into this Trust Agreement.
(l) For purposes of this Section, reference to the Trustee means (i)
the Trustee acting in its own discretion, with respect to the assets of the
Trust Fund for which it has investment management and control, and (ii) the
Trustee acting pursuant to the direction of the Committee or an Investment
Manager, with respect to the assets of the Trust Fund for which the Committee or
Investment Manager has investment management and control.
3.6 Investment in Insurance. (a) At the direction of the Committee, the
Trustee will apply for, purchase and/or hold life insurance contracts from an
insurance company. The purchase of life insurance contracts with assets of the
Trust Fund pursuant to this Section 3.4 will be in accordance with the terms of
the Plan and rules and policies established by the Committee, uniformly
applicable to all Participants, respecting the form, value, optional methods of
settlement and other provisions of such contracts.
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(b) The Trustee will be the sole owner of any life insurance
contract purchased; will have the sole option to exercise all rights, privileges
and options thereunder; and will pay the premiums thereon when due, provided
that it holds funds which are available and sufficient for such purpose.
(c) If a beneficiary of a Participant's death benefit is to be
designated under any life insurance contract, the Trustee will designate the
Beneficiary designated by the Participant pursuant to the Plan.
3.7 Investment in Qualifying Employer Securities or Qualifying Employer
Real Property. Subject to the rules for investment set forth in this Article,
the Trust Fund may be invested in qualifying employer securities (as defined in
Section 407(d)(5) of ERISA) or qualifying employer real property (as defined in
Section 407(d)(4) of ERISA), not to exceed the limits stated with respect to
such investments in Section 407 of ERISA.
3.8 Segregation of Trust Fund Assets. (a) Subject to the other
provisions of this Section and any funding policy and method for the Plan which
is transmitted in writing by the Committee to the Trustee and each Investment
Manager, the assets of the Trust Fund will be managed, invested and reinvested
as a single fund without distinction between principal and income, and the
Trustee will not be required to earmark or keep separate the assets specifically
attributable to contributions by or on behalf of each Participating Employer.
(b) If requested to do so by the Committee, the Trustee will
establish a separate subtrust segregating the assets of the Trust Fund that are
attributable to each Participating Employer.
(c) The Trustee, in its own discretion with respect to assets of the
Trust Fund for which it has been delegated investment responsibility and
authority or upon the direction of the Committee or an Investment Manager with
respect to assets of the Trust Fund for which the Committee or Investment
Manager has investment responsibility and authority, may establish one or more
subtrusts segregating the assets of the Trust Fund that are attributable to
each Participating Employer.
3.9 Commingling of Trusts. If the Trustee is trustee of one or more
other trusts forming part of other qualified employee benefit plans maintained
by a Controlled Group Member, the Trustee may, at the request of the Committee,
commingle all or a portion of the assets of the Trust Fund with assets of such
other trusts for investment purposes, provided that the Trustee will maintain
records enabling it to account separately for the assets of this Trust Fund and
the assets of such other trusts.
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ARTICLE 4
POWERS OF THE TRUSTEE
4.1 Scope of Powers. The Trustee has whatever powers are required to
discharge its obligations and exercise its rights under this Trust Agreement,
including (but not limited to) the powers specified in the following Sections of
this Article, and the powers and authority granted to the Trustee under other
provisions of this Trust Agreement.
4.2 Powers Exercisable by the Trustee In Its Sole Discretion. The
Trustee is authorized and empowered to exercise the following powers in its sole
discretion:
(a) To register any investment held in the Trust Fund in its own
name or in the name of a nominee and to hold any investment in bearer form. The
books and records of the Trustee will show that all such investments are part of
the Trust Fund. The Trustee will be liable for all acts of its nominee.
(b) To employ suitable agents and depositories (domestic or
foreign), public accountants, enrolled actuaries, and legal counsel (which may
be counsel for a Controlled Group Member) as will be necessary and appropriate,
and to pay their reasonable expenses and compensation.
(c) To execute all necessary receipts and releases to any insurance
companies with respect to any life insurance contracts held in the Trust Fund.
(d) To organize corporations under the laws of any state for the
purpose of acquiring or holding title to any property for the Trust Fund, or to
request the Company to appoint another Trustee for such purpose.
(e) To participate in voting trusts, pooling agreements,
foreclosures, reorganizations, consolidations, mergers and liquidations, and in
connection therewith to deposit securities with and transfer title to any
protective or other committee under such terms as the Trustee may deem
advisable.
4.3 Powers Exercisable by the Trustee, Subject to the Direction of the
Administrator, a Participant or an Investment Manager. The Trustee is
authorized and empowered to exercise the following powers in its sole discretion
with respect to the assets of the Trust Fund for which it has investment
management and control. With respect to assets of the Trust Fund for which the
Committee, a Participant or an Investment Manager has investment management and
control, the Trustee will exercise the following powers upon the direction of
the Committee, a Participant or Investment Manager.
(a) To receive, hold, invest and reinvest Trust Fund assets and
income under provisions of law from time to time existing.
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(b) To manage, control, sell, convey, exchange, partition, divide,
subdivide, improve or repair; to grant options and to sell upon deferred
payments; to lease for terms within or extending beyond the duration of this
Trust Agreement for any purpose (including exploration for and removal of gas,
oil or other minerals); to enter into community oil leases; and to create
restrictions, easements and other servitudes.
(c) To delegate, to a manager or the holder or holders of a majority
interest therein, the management and operation of any real property in which the
Trust Fund has an interest and the authority to sell or otherwise carry out
decisions with respect to such real property or mortgage (provided however that
for purposes of determining the fiduciary responsibility of the parties to this
Trust Agreement, and notwithstanding the provisions of Section 3.3(c), the
delegating party will be responsible for the acts of such manager or holder(s)).
(d) To borrow or loan money upon such terms and conditions as may be
deemed proper, and to obligate the Trust Fund for repayment; to encumber the
Trust Fund or any of its property by mortgage, deed of trust, pledge or
otherwise; and to use such procedure to consummate the transaction as may be
deemed advisable.
(e) To sell, exchange, convey, transfer or otherwise dispose of any
assets of the Trust Fund, by private contract or at public auction.
(f) To make commitments either alone or in company with others to
purchase at any future date any property, investments or securities authorized
by this Agreement.
(g) To purchase part interests in real property in mortgages on real
property, wherever such real property may be situated, with the right to take
title in its name individually or as Trustee or in the name of a nominee either
alone or jointly with the holders of other part interests therein or their
nominees.
(h) Subject to the provisions of Article 8 of the Plan, to vote upon
any stocks, bonds or other securities in the Trust Fund and to give general or
special proxies or powers of attorney with or without power of substitution; to
exercise any conversion privileges, subscription rights or other options, and to
make any payments incidental thereto; to consent to or otherwise participate in
corporate reorganizations or other changes affecting corporate securities; and
to delegate discretionary powers and to pay any assessments or charges in
connection with the foregoing.
(i) To exercise any withdrawal option, termination provisions or
other rights of a contract holder with respect to any Guaranteed Benefit Policy
held in the Trust Fund.
(j) To exercise all right of ownership in connection with any life
insurance contract covering a Participant held in the Trust Fund, including the
right to borrow on or surrender such contract, in whole or in part, and to
receive any monies due thereunder.
4.4 Powers Exercisable by the Trustee Only Upon the Direction of the
Administrator. The Trustee will exercise the following power only upon the
direction of the
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Committee: to accept, compromise or otherwise settle any claims by or against
the Trust Fund or disputed liabilities due to or from the Trustee with respect
to the Trust Fund, including any claim that may be asserted for taxes under
present or future laws, or to enforce or contest the same by appropriate legal
proceedings.
4.5 Provisions Relating to Company Stock and Other Securities. The
provisions of Article 8 of the Plan are incorporated into this Trust Agreement
by reference and supersede any conflicting provision of this Trust Agreement
with respect to the voting or tender of shares of Company Stock or other
securities held in the Plan's investment funds.
4.6 Documents, Instruments and Facilities. (a) In order to effectuate
the specific powers and authority herein granted to the Trustee, the Trustee may
make, execute, acknowledge and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate.
(b) The Trustee may use its own facilities in effecting any
transaction involving assets of the Trust Fund, unless such use is prohibited by
Section 406 of ERISA.
4.7 Co-Trustees. When the Trustee consists of two or more co-trustees,
any one co-trustee may exercise the powers of the Trustee described herein.
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ARTICLE 5
DUTIES AND OBLIGATIONS OF THE TRUSTEE
5.1 Scope of Duties and Obligations. The Trustee agrees to perform the
duties and obligations imposed by this Trust Agreement. No duties or
obligations will be imposed upon the Trustee with respect to the Trust Fund
unless undertaken by the Trustee under the express terms of this Trust Agreement
or unless imposed upon the Trustee by statute or at common law.
5.2 General Duties and Obligations. (a) The Trustee will hold all
property received by it and any income and gains thereupon. The Trustee will
manage, invest and reinvest the Trust Fund, following the directions of the
Committee, the Participants or an Investment Manager with respect to assets of
the Trust Fund which the Committee, the Participants or Investment Manager has
responsibility for the investment thereof, will collect the income therefrom,
and will make payments as provided in the Plan and in this Trust Agreement. The
Trustee may utilize depositories to hold assets of the Trust Fund, provided
however that the Trustee will not be relieved of any fiduciary responsibilities
with respect to the assets so held.
(b) The Trustee is responsible only for money or assets that it
actually receives. The Trustee has no duty to compute amounts to be paid to it
by a Participating Employer or to enforce collection of any contribution due
from a Participating Employer. The Trustee is not responsible for the
correctness of the computation of the amount of any contribution made or to be
made by a Participating Employer. The Trustee may, but will not be required to,
accept contributions of property.
(c) If Participating Employer contributions paid to the Trustee
would in turn be paid by the Trustee pursuant to directions of the Committee to
an Investment Manager or to an insurance company that has issued an insurance
contract to the Trustee, such contributions may be paid directly by the
Participating Employers to the Investment Manager or the insurance company and
will be treated as if paid to the Trustee and then disbursed from the Trust Fund
to the Investment Manager or insurance company pursuant to directions of the
Committee.
(d) The Trustee will make payments and disbursements from the Trust
Fund to or on the order of the Committee, including, when the Committee will so
order, distributions to Participants or their Beneficiaries as provided in the
Plan. Orders of the Committee with respect to disbursements from the Trust Fund
will specify the application to be made of such funds, and the Trustee may (to
the extent permitted by law) rely on the Committee's instructions regarding
disbursements from the Trust Fund.
(e) Subject to the provisions of Section 8.2(c), the Trustee will
comply with any directive issued by the Committee to withdraw and transfer all
or any part of the Trust Fund to another trustee or another successor funding
agent.
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(f) The Trustee will use ordinary care and reasonable diligence in
the exercise of its powers and the performance of its duties and obligations
under this Trust Agreement.
5.3 Valuation. (a) The Trustee will determine, and report to the
Committee, the current fair market value of the assets and liabilities of the
Trust Fund as of the regular Valuation Date and as of any interim Valuation Date
that may be fixed by the Committee.
(b) The fair market value of assets of the Trust Fund will be
determined by the Trustee on the basis of such sources of information as it may
deem reliable, including (but not limited to) information reported in (i)
newspapers of general circulation, (ii) standard financial periodicals or
publications, (iii) statistical and valuation services, (iv) records of
securities exchanges, (v) reports of any Investment Manager, insurance company
that has issued an insurance contract to the Trustee or brokerage firm deemed
reliable by the Trustee, or (vi) any combination of the foregoing. If the
Trustee is unable to value assets from such sources, it may rely on information
from any Participating Employer, the Committee, appraisers or other sources, and
will not be liable for inaccurate valuation based in good faith on such
information. The Committee may retain an independent appraiser to value employer
securities held in the Trust Fund if such appraiser is acceptable to the
Trustee, and the Trustee may retain an independent appraiser to value employer
securities held in the Trust Fund if the Committee does not retain an appraiser
acceptable to the Trustee.
(c) Reasonable costs incurred in valuing the Trust Fund will be a
charge against the Trust Fund.
5.4 Records. The Trustee will keep complete accounts of all
investments, receipts and disbursements, other transactions hereunder, and gains
and losses resulting from same. Such accounts will be sufficiently detailed to
meet the Trustee's duties of reporting and disclosure required under applicable
federal or state law as will exist from time to time. All accounts, books,
contracts and records relating to the Trust Fund will be open to inspection and
audit at all reasonable times by any person designated by the Board.
5.5 Reports. (a) Within 90 days following the close of each Plan Year,
and as otherwise directed by the Committee, and within 30 days following the
Trustee's resignation or removal under Article 7 of this Trust Agreement, the
Trustee will furnish the Committee with a written report setting forth the
transactions effected by the Trustee during the period since it last furnished
such a report and any gains or losses resulting from same, any payments or
disbursements made by the Trustee during such period, the assets of the Trust
Fund as of the last day of such period (at cost and at fair market value), and
any other information about the Trust Fund that the Committee may request. The
Trustee will certify the accuracy of the report if such certification is
required by any applicable federal or state law or regulation.
(b) Each report submitted pursuant to subsection (a) will be
promptly examined by the Committee. If the Committee approves of such report,
the Trustee will be forever released from any liability of accountability with
respect to the propriety of any of its accounts or transactions so reported, as
if such account had been settled by judgment or decree of
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a court of competent jurisdiction in which the Trustee, the Committee, the
Company, and all persons having or claiming any interest in the Trust Fund were
made parties. The foregoing, however, is not to be construed to deprive the
Trustee of the right to have its account judicially settled if it so desires.
(c) The Committee may approve of any report furnished by the Trustee
under subsection (a) either by written statement of approval furnished to the
Trustee or by failure to file a written objection to the report with the Trustee
within 90 days of the date on which the Committee receives such report. The
Committee will not be liable to any person for its approval, disapproval or
failure to approve any such report rendered by the Trustee.
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ARTICLE 6
COMPENSATION, RIGHTS AND INDEMNITIES
OF THE TRUSTEE
6.1 Compensation and Reimbursement. (a) The Trustee will receive for
its services reasonable compensation as agreed upon in writing from time to time
between the Committee and the Trustee, unless the Trustee is an Employee, in
which case the Trustee will serve without compensation.
(b) The Trustee will be reimbursed for all reasonable expenses it
incurs in the performance of its duties as under this Trust Agreement. In this
regard, reasonable expenses include (but are not limited to) accounting,
consulting, actuarial and, subject to Section 6.3, legal fees for professional
services related to the administration of the Plan and this Trust Agreement, and
the compensation of any Investment Manager as agreed upon in writing between the
Investment Manager and the Committee.
(c) Compensation and expenses payable under this Section 6.1 will be
paid from the Trust Fund (and may be charged, if applicable, to an appropriate
subaccount or subtrust), unless the Participating Employers pay such
compensation and expenses. In addition, the Participating Employers in their
discretion may reimburse the Trust Fund for any such compensation and expenses
paid from the Trust Fund.
6.2 Rights of the Trustee. (a) Whenever in the administration of the
Plan a certification or direction is required to be given to the Trustee, or the
Trustee deems it necessary that a matter be proved prior to taking, suffering or
omitting any action hereunder, such certification or direction will be fully
made, or such matter may be deemed to be conclusively proved, by delivery to the
Trustee of an instrument signed either (i) in the name of a Participating
Employer, under its corporate seal and by its Secretary or Assistant Secretary
if the Participating Employer is a corporation; or (ii) unless the matter
concerns the authority of the Committee, in the name of the Committee by the
Chairman or Secretary of the Committee; and the Trustee may rely upon such
instrument to the extent permitted by law. Notwithstanding the foregoing, the
Trustee may in its sole discretion accept such other evidence of a matter or
require such further evidence as may seem reasonable to it, in lieu of such
instrument. Generally, the Trustee will be protected in acting upon any notice,
resolution, order, certificate, opinion, telegram, letter or other document
believed by the Trustee to be genuine and to have been signed by the proper
party or parties, and may act thereon without notice to a Participant or
Beneficiary and without considering the rights of any Participant or
Beneficiary.
(b) The Trustee may make any payment which it is required to make
hereunder by mailing a check for the amount of such payment and any other
necessary papers by first class mail in a sealed envelope addressed to the
person to whom such payment is to be made, according to the certification of the
Committee. In this respect, the Trustee will recognize only instructions given
to it by the Committee and has the right to act thereon without notice to
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any person and without considering the rights of any Participant or Beneficiary.
The Trustee is not required to determine or to make any investigation to
determine, the identity or mailing address of any person entitled to benefits
under the Plan, and is entitled to withhold payment of benefits or directions to
issuing companies with respect to such payment until the identity and mailing
address of the Participant or Beneficiary entitled to receive such benefits is
certified by the Committee. The Trustee will not be responsible for the
determination or computation of any benefit due to a Participant or Beneficiary.
(c) In the event that any dispute arises as to the identity or
rights of any person or persons to whom the Trustee is to make payment or
delivery of any funds or property, the Trustee may withhold payment or delivery
of such funds or property without liability until the dispute is resolved by
arbitration, adjudicated by a court of competent jurisdiction, or settled by
written stipulation of the parties concerned. The Trustee will not be liable for
the payment of and interest or income on the cash or other property held by it
under such circumstances.
(d) The Trustee may consult with legal counsel (who may be counsel
for a Controlled Group Member) with respect to the construction of the Plan or
this Trust Agreement or its duties thereunder, or with respect to any legal
proceeding or any question of law, and will be fully protected (to the extent
permitted by law) with respect to any action it takes or omits in good faith
upon the advice of such counsel.
(e) The Trustee will be provided with specimen signatures of the
current members of the Committee and the current authorized signers of each
Investment Manager. The Trustee will be entitled to rely in good faith upon any
directions signed by the Committee or its appointed delegate, or by any
authorized signer of an Investment Manager, and will incur no liability for
following such directions.
(f) The Trustee may accept communications by photostatic
teletransmissions with duplicate or facsimile signatures as a delivery of such
communications in writing until notified in writing by the Committee or the
Investment manager that the use of such devices is no longer authorized.
(g) Notwithstanding any other provision of this Section, the Trustee
may settle securities trades effected by the Committee or an Investment Manager,
with respect to assets of the Trust Fund for which the Committee or Investment
Manager has investment responsibility and authority, through a securities
depository that utilizes an institutional delivery system, in which event the
Trustee may deliver or receive securities in accordance with appropriate trade
reports or statements given to the Trustee by such depository without having
received direct communication or instructions from the Committee or Investment
Manager.
(h) In the event that the Committee or an Investment Manager directs
the Trustee to invest any assets of the Trust Fund in real property, the Trustee
has the right to request, as a condition precedent to its execution of any
documents or payment of any amounts in connection with such transaction, (i) a
certified appraisal in writing, from a qualified appraiser selected by the
Trustee, which indicates that the value of the property is equal to or greater
than the transaction price and that the condition of the property conforms to
the condition described in
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such documents, and (ii) an opinion of counsel (who may be counsel for the
Committee or Investment Manager) that the documents either have been or will be
properly recorded under all applicable recording acts, and that appropriate
policies adequately insuring the Trust Fund against loss for any reason
(including a defect in title) have been procured in the name of the Trustee. In
addition, the Committee or Investment Manager will, upon request, provide the
Trustee with current written appraisals of such property by a qualified
appraiser selected by the Trustee which will be relied upon by the Trustee for
all valuation and accounting purposes under the Trust Agreement. The provisions
of this subsection will not be deemed to relieve the Trustee of any fiduciary
responsibility under Section 3.3.
(i) In the event that the Committee or an Investment Manager directs
the Trustee to purchase any contract or Guaranteed Benefit Policy issued by an
insurance company, the Committee or Investment Manager will notify the Trustee
in writing of any premium due on such contract or policy at least five business
days before the date on which such premium is due. In the absence of such
notification, the Trustee will have no duty or liability with respect to the
payment of such premiums.
(j) In the event that the Committee or an Investment Manager directs
the Trustee to purchase or acquire any securities or other obligations of a
foreign government or agency thereof or of a corporation domiciled outside of
the United States, the Committee or Investment Manager will notify the Trustee
in writing of any laws or regulations of any foreign country or of the United
States, its territories or its possessions which will apply to such securities
or obligations (including, but not limited to, the receipt of dividends or
interest from such securities or obligations).
(k) If the whole or any part of the Trust Fund, or the proceeds
thereof, becomes liable for the payment of any estate, inheritance, income or
other tax, charge or assessment which the Trustee is required to pay, the
Trustee will have full power and authority to pay such tax, charge or assessment
out of any money or other property in its hand for the account of the person
whose interests hereunder are so liable, but at least ten days prior to the
making of any such payment the Trustee must mail notice to the Committee of its
intention to make such payment. Prior to making any transfers or distributions
of any of the proceeds of the Trust Fund, the Trustee may require such releases
or other documents from any lawful taxing authority as it deems necessary.
(l) If it is determined by a final judicial decision or by agreement
with the Internal Revenue Service that the equitable share of the Trust Fund
attributable to a Participating Employer fails to satisfy the requirements of
Section 501(a) of the Code, the Trustee will be so notified by the Committee or
the Participating Employer. If such failure has not been corrected to the
satisfaction of the Internal Revenue Service within 30 days of such
determination, or within such longer time as the Internal Revenue Service may
allow, the Trustee, in its discretion, may segregate the assets allocable to the
equitable share of the Trust Fund attributable to such Participating Employer
and may distribute such assets to a successor trustee or funding agent.
6.3 Indemnification. The Company will indemnify and hold harmless the
Trustee from all loss or liability (including expenses and reasonable attorneys'
fees) to which the Trustee
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may be subject by reason of its execution of its duties under this Trust
Agreement, or by reason of any acts taken in good faith in accordance with
directions, or acts omitted in good faith due to absence of directions, from the
Board, the Committee or an Investment Manager unless such loss or liability is
due to the Trustee's negligence or willful misconduct. The Trustee is entitled
to collect on the indemnity provided by Section 6.3 only from the Company, and
is not entitled to any direct or indirect indemnity payment from assets of the
Trust Fund.
6.4 Limitation of Liability of Trustee. (a) If the Trustee makes a
written request for directions from the Board, the Committee or an Investment
Manager, the Trustee may await such directions without incurring liability. The
Trustee has no duty to act in the absence of such requested directions, but may
in its discretion take such action as it deems appropriate to carry out the
purposes of this Trust Agreement.
(b) The Trustee will not be liable to any person for making any
distribution, failing to make any distribution, or discontinuing any
distribution on the direction of the Committee, or for failing to make any
distribution by reason of the Committee's failure to direct that such
distribution be made. The Trustee has no duty to inquire whether any direction
or absence of direction is in conformity with the provisions of the Plan.
(c) The Trustee is not responsible for determining the adequacy of
the Trust Fund to meet liabilities under the Plan, and is not liable for any
obligations of the Plan or the Trust Fund in excess of the assets of the Trust
Fund.
(d) The Trustee will not be liable for the acts or omissions of any
other fiduciary or person with respect to the Plan or the Trust Fund except to
the extent required under Section 405(a) of ERISA.
(e) The Trustee is not responsible for any matter affecting the
administration of the Plan by the Company, the Committee, or any other person or
persons to whom responsibility for administration of the Plan is delegated
pursuant to the terms of the Plan.
6.5 Necessary Parties to Legal Actions. Except as required by Section
502(h) of ERISA, only the Company, the Committee and the Trustee will be
considered necessary parties in any legal action or proceeding with respect to
the Trust Fund, and no Participant, Beneficiary or other person having an
interest in the Trust Fund will be entitled to notice. Any judgment entered on
any such action or proceeding will be binding on all persons claiming under the
Trustee. Nothing in this Section 6.5 is intended to preclude a Participant or
Beneficiary from enforcing his legal rights.
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ARTICLE 7
RESIGNATION OR REMOVAL OF THE TRUSTEE
7.1 Resignation. The Trustee may resign at any time by delivering to
the Chairman of the Committee, or to the Secretary of the Board, a written
notice of resignation, to take effect not less than 60 days after delivery,
unless such notice is waived.
7.2 Removal. The Company may remove the Trustee at any time by
delivering to the Trustee a certified resolution by the Board to such effect and
a written notice of removal. Such removal will take effect no less than 60 days
after delivery of such notice to the Trustee, unless such notice is waived.
7.3 Successor Trustee. Upon the resignation or removal of the Trustee,
the Board will appoint a successor Trustee, which may accept such appointment by
execution of this Trust Agreement. In the event that no successor Trustee is
appointed, or accepts appointment, by the time that the resignation or removal
of the Trustee is effective, the Board will be the successor Trustee until
another successor trustee is appointed and accepts such appointment. In
addition, the Trustee may apply to a court of competent jurisdiction for the
appointment of a successor Trustee or for instructions. Any expenses incurred
by the Trustee in connection with said application will be paid from the Trust
Fund as an expense of administration.
7.4 Settlement. After delivery of notice of the Trustee's resignation
or removal, the Trustee is entitled to a settlement of its account, which may be
made at the option of the Trustee either: (a) by judicial settlement in an
action instituted by the Trustee in a court of competent jurisdiction, or (b) by
agreement of settlement between the Trustee, the Company and the Committee.
7.5 Transfer to Successor Trustee. Upon settlement of the Trustee's
account, the Trustee will transfer to the successor Trustee the Trust Fund as it
is then constituted and true copies of its records relating to the Trust Fund.
Upon the completion of this transfer, the Trustee's responsibilities under this
Trust Agreement will cease and the Trustee will be discharged from further
accountability for all matters embraced in its settlement, provided, however,
that the Trustee executes and delivers all documents and written instruments
which are necessary to transfer and convey the right, title and interest in the
Trust Fund assets, to the successor Trustee. Notwithstanding the foregoing, the
Trustee is authorized to reserve such amount as it may deem advisable for
payment of its fees and expenses in connection with the settlement of its
account. Any balance of such reserve remaining after the payment of such fees
and expenses will be paid over to the successor Trustee. Notwithstanding any
provision of Trust Agreement to the contrary, the Trustee may invest and
reinvest such reserves in any investment or investment vehicle appropriate for
the temporary investment of cash reserves of trusts.
7.6 Duties of the Trustee Prior to Transfer to Successor Trustee. The
Trustee's powers, duties, rights and responsibilities under this Trust Agreement
will continue until the date
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on which the transfer of the Trust Fund assets and delivery of the related
documents to the successor Trustee under Section 7.5 is completed. Nothing
contained herein will relieve the Trustee of its duties under Section 5.5. The
successor Trustee will neither be liable or responsible for any act or omission
to act with respect to the operation or administration of the Trust Fund under
this Trust Agreement prior to such date, nor be under any duty or obligation to
audit or otherwise inquire into or take any action concerning the acts or
omissions of the Trustee or any predecessor Trustee.
7.7 Powers, Duties and Rights of the Successor Trustee. Upon its
receipt of all the assets of the Trust Fund and all of the documents related
thereto, the successor Trustee will become vested with all the estate, powers,
duties, rights and discretion of the Trustee under this Trust Agreement with the
same effect as though the successor Trustee were originally named as Trustee
hereunder.
7.8 Merger or Consolidation Involving Corporate Trustee. Any
corporation into which a corporation acting as Trustee hereunder may be merged
or with which it may be consolidated, or any corporation resulting from any
merger, reorganization or consolidation to which such Trustee may be a party,
will be the successor of the Trustee hereunder without the necessity of any
appointment or other action, provided it does not resign and is not removed.
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ARTICLE 8
AMENDMENT OF THE TRUST AGREEMENT
OR TERMINATION OF THE PLAN
8.1 Amendment of the Trust Agreement. (a) The Company reserves the
right to amend this Trust Agreement in the manner set forth in subsection (b) at
any time and to any extent that it may deem advisable or appropriate, provided
however that (i) no amendment may affect the duties, rights, responsibilities or
liabilities of the Trustee or the Committee without their respective written
consent; (ii) no amendment may have the effect of vesting in a Controlled Group
Member any interest in or control over any property subject to the terms of this
Trust Agreement; and (iii) no amendment may contravene the provisions of
Section 2.4.
(b) Any amendment to this Trust Agreement will be made only pursuant
to action of the Board. A certified copy of the resolutions adopting any
amendment and a copy of the adopted amendment as executed by the Company will be
delivered to the Committee and the Trustee. Upon such action by the Board, the
Trust Agreement will be deemed amended as of the date specified as the effective
date by such Board action or in the instrument of the amendment. The effective
date of any amendment may be before, on or after the date of such Board action.
(c) Unless an amendment expressly provides otherwise, each
Participating Employer will be bound by any amendment adopted pursuant to this
Article 8.
8.2 Termination of the Plan. (a) In the event that the Plan is
terminated, the Committee will notify the Trustee as to whether the Trust Fund
is to be liquidated or is to be maintained by the Trustee in accordance with the
provisions of the Plan and this Trust Agreement. If the Committee directs that
the Trust Fund is to be liquidated, the Trustee will establish the fair market
value of the Trust Fund as of such interim Valuation Date as is designated by
the Committee, and, after paying the reasonable expenses involved in the
termination of the Plan, will dispose of all or a part of the assets of the
Trust Fund (converting the Trust Fund into cash, if necessary) in accordance
with the written directions of the Committee (including, without limitation, a
direct distribution to a Participating Employer of any excess assets of the
Trust Fund remaining after all liabilities of the Plan and the Trust Fund to the
Participants and Beneficiaries have been satisfied).
(b) In the event of the withdrawal of a Participating Employer from
the Plan, the Trustee will dispose of the assets of the Trust Fund attributable
to the Participants employed by the Participating Employer, and their
Beneficiaries, in accordance with the written directions of the Committee.
(c) Notwithstanding the provisions of subsections (a) and (b), (i)
the Trustee may pay from the assets of the Trust Fund the reasonable expenses
involved in the termination of the Trust Fund prior to disposing of the assets
of the Trust Fund as directed by the Committee; (ii) the Trustee will not comply
with any instruction to transfer assets of the Trust
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Fund to the funding agent of any other employee benefit plan unless the Trustee
determines that such transfer of assets will comply with the requirements of the
Code, and that any required actuarial statement of valuation has been properly
filed; and (iii) the Trustee may condition the delivery, transfer or
distribution of any or all assets of the Trust Fund upon its receipt of
assurance satisfactory to it that the approval of appropriate governmental or
other authorities has been secured (including, if the Trustee so requests, a
favorable determination letter issued by the Internal Revenue Service to the
effect that the termination of the Plan will not adversely affect the Plan's
qualified status, and, if applicable, a statement of sufficiency of assets from
the Pension Benefit Guaranty Corporation) and that there has been proper
compliance with all notices and other procedures required by applicable law.
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ARTICLE 9
MISCELLANEOUS
9.1 Gender, Tense and Headings. Whenever any words are used herein in
the masculine gender, they will be construed as though they were also used in
the feminine gender in all cases where they would so apply. Whenever any words
used herein are in the singular form, they will be construed as though they were
also used in the plural form in all cases where they would so apply.
Headings of Articles, Sections and subsections as used herein are
inserted solely for convenience and reference and constitute no part of this
Trust Agreement.
9.2 GOVERNING LAW. THIS TRUST AGREEMENT WILL BE CONSTRUED AND GOVERNED
IN ALL RESPECTS IN ACCORDANCE WITH APPLICABLE FEDERAL LAW, AND, TO THE EXTENT
NOT PREEMPTED BY SUCH FEDERAL LAW, IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MINNESOTA.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Trust Agreement on March 30 , 1993.
"Company"
ARKLA, INC.
By /s/ Rick L. Spurlock
_________________________________
"Trustee"
IDS TRUST, A DIVISION OF
IDS BANK & TRUST
By /s/ IDS Trust
_________________________________
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in the Registration
Statement of Houston Lighting & Power Company (the "Company") on Form S-8 of our
report dated February 21, 1997, appearing in the combined Annual Report on Form
10-K of Houston Industries Incorporated and the Company for the year ended
December 31, 1996.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Houston, Texas
July 30, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Houston Lighting & Power Company on Form S-8 (File No. 333- ) of our report
dated June 6, 1997, on our audits of the financial statements of the NorAm
Energy Corp. Employee Savings and Investment Plan as of December 31, 1996 and
1995, and for the years ended December 31, 1996 and 1995, which report is
included in the NorAm Energy Corp. Employee Savings and Investment Plan Annual
Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Houston, Texas
July 30, 1997
