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10-Q
EAGLE MATERIALS INC · Jan 29, 4:34 PM ET
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EAGLE MATERIALS INC 10-Q
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Contents
148
ARTICLE IDEFINITIONS
ARTICLE IIADMINISTRATION OF THE PLAN
2.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust Administration. The Board, the Committee and the Trustee (hereinafter collectively referred to as the “Fiduciaries”) shall serve as fiduciaries for purposes of ERISA only to the extent of those specific powers, duties, responsibilities and obligations as are specifically given them under the Plan or the Trust Agreement. The Board, in its capacity as a Fiduciary, shall only have responsibility for appointment and removal of the Trustee and the members of the Committee. The Committee, in its capacity as a Fiduciary, shall have the sole responsibility (i) to establish and carry out the investment policy and method of the Plan insofar as such investment policy and method involves the investment of Plan assets, to appoint and remove any investment manager which may be provided for under the Trust Agreement and to monitor the performance of the Trustee and any such investment manager, if any, as such term is defined by ERISA Section 3(38), which responsibilities are specifically described in the Trust Agreement; and (ii) to administer the Plan, which responsibilities are more specifically described in the Plan and the Trust Agreement. The Trustee, in its capacity as a Fiduciary, shall have the sole responsibility for the administration of the Trust Fund and shall have exclusive authority and discretion to manage and control the Trust Fund, except to the extent that the authority to manage, acquire and dispose of assets of the Trust Fund is delegated to an investment manager, all as more specifically provided in the Trust Agreement. Neither the Board nor any committee of the Board shall have any discretionary authority, control or responsibility with respect to the administration or management of the Plan or the disposition of the Plan’s assets. Each Fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan or the Trust Agreement, as the case may be, authorizing or providing for such direction, information or action. Furthermore, each Fiduciary may rely upon any such direction, information or action of another Fiduciary as being proper under the Plan or the Trust Agreement and is not required under the Plan or the Trust Agreement to inquire into the propriety of any such direction, information or action. It is intended under the Plan and the Trust Agreement that each Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under the Plan and the Trust Agreement and shall not be responsible for any act or failure to act of another Fiduciary. No Fiduciary guarantees the Trust Fund in any manner against investment loss or depreciation in asset value.
2.2 Committee. The Plan shall be administered by the Administrative Committee (the “Committee”), which members shall consist of at least three but not more than nine persons who shall be appointed by and serve at the pleasure of the Board, which Committee shall serve in the capacity of the “plan administrator” within the meaning of Section 404 of ERISA and which shall be a “named fiduciary” for purposes of ERISA. The members of the Committee shall not receive compensation with respect to their services for the Committee. All usual and reasonable expenses of the Committee may be paid in whole or in part by the Company, and any expenses not paid by the Company shall be paid by the Trustee out of the Trust Fund. The Company shall pay the premiums on any bond secured for the performance of the duties of the Committee members
described hereunder. The Company shall be entitled to reimbursement by other Employers for their proportionate shares of any such costs paid in whole or in part by the Company.
2.3 Records and Reports. The Committee shall exercise such authority and responsibility as it deems appropriate in order to comply with ERISA and any governmental regulations issued thereunder relating to records of Participants’ Service, Account balances, the percentage of such Account balances which are non‑forfeitable under the Plan, and notifications to Participants. The Committee shall file or cause to be filed with the appropriate office of the Internal Revenue Service and the Department of Labor all reports, returns, notices and other information required of plan administrators under ERISA, including, but not limited to, the summary plan description, annual reports and amendments thereof. The Committee shall make available to Participants and their Beneficiaries for examination, during business hours, such records of the Plan as pertain to the examining person and such documents relating to the Plan as are required by ERISA.
2.4 Other Committee Powers and Duties. The Committee shall have such powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following powers and duties:
2.5 Rules and Decisions. The Committee may adopt such rules for the administration of the Plan as it deems necessary, desirable or appropriate. All rules and decisions of the Committee shall be uniformly and consistently applied to all Employees in similar circumstances. The judgment of the Committee and each member thereof on any question arising hereunder shall be binding, final and conclusive on all parties concerned. When making a determination or calculation, the Committee shall be entitled to rely upon information furnished by a Participant or Beneficiary, the Employer, the legal counsel of the Employer or the Trustee.
2.6 Committee Procedure. The Committee may act at a meeting or in writing without a meeting. The Committee shall elect one of its members as chairman, appoint a secretary, who may or may not be a member of the Committee, and shall advise the Trustee of such actions in writing. The secretary of the Committee shall keep a record of all meetings and forward all necessary communications to the Employer or the Trustee. The Committee may adopt such bylaws and regulations as it deems desirable for the conduct of its affairs. All decisions of the Committee shall be made by the vote of the majority including actions taken in writing without a meeting. A dissenting Committee member who, within a reasonable time after he has knowledge of any action or failure to act by the majority, registers his dissent in writing delivered to the other Committee members, the Employer and the Trustee shall not be responsible for any such action or failure to act. The Committee shall designate one of its members as agent of the Plan and of the Committee for service of legal process at the principal office of the Company.
2.7 Authorization of Benefit Payments. The Committee shall issue directions to the Trustee concerning all benefits which are to be paid from the Trust Fund pursuant to the provisions of the Plan. Alternatively, the Committee, in its sole discretion, may authorize that in‑service withdrawals, as further described in Article VI, may be made upon request of the Participant through a voice response system, internet, intranet or such other manner and procedures prescribed
by the Committee. The Committee shall keep on file, in such manner as it may deem convenient or proper, all reports from the Trustee.
2.8 Payment of Expenses. Expenses incident to the administration, termination or protection of the Plan and Trust Fund, including, but not limited to, legal, accounting, investment manager and Trustee fees shall be paid by the Trust, except where required by law or regulation to be paid by the Company or where the Company elects to pay such expenses. Further, to the extent applicable, expenses as approved by the Committee (or by a designee of the Committee) that are attributable to Plan administration may be paid from an excess revenue credit account under the Plan.
2.9 Application and Forms for Benefits. The Committee may require an Employee or Participant to complete and file with the Committee an application for a benefit and all other forms approved by the Committee, and to furnish all pertinent information requested by the Committee. The Committee may rely on such information so furnished it, including the Employee’s or Participant’s current mailing address.
2.10 Committee Liability. Except to the extent that such liability is created by ERISA, no member of the Committee, or any designee thereof, shall be liable for any act or omission of any other member of the Committee, nor for any act or omission on his own part except for his own gross negligence or willful misconduct, nor for the exercise of any power or discretion in the performance of any duty assumed by him hereunder. The Company shall indemnify and hold harmless each member of the Committee, and any designee thereof, from any and all claims, losses, damages, expenses (including counsel fees approved by the Committee), and liabilities (including any amounts paid in settlement with the Committee’s approval but excluding any excise tax assessed against any member or members of the Committee pursuant to the provisions of Section 4975 of the Code) arising from any act or omission of such member in connection with duties and responsibilities under the Plan, except when the same is judicially determined to be due to the gross negligence or willful misconduct of such member.
2.11 Statements. No less frequently than annually, the Committee (or its delegate) shall prepare and deliver to each Participant a statement reflecting as of the Valuation Date provided in the statement:
2.12 Annual Audit. The Committee shall engage, on behalf of all Participants, an independent Certified Public Accountant who shall conduct an annual examination of any financial statements of the Plan and Trust Fund and of other books and records of the Plan and Trust Fund as the Certified Public Accountant may deem necessary to enable him to form and provide a written opinion as to whether the financial statements and related schedules required to be filed with the Department of Labor or furnished to each Participant are presented fairly and in conformity with
generally accepted accounting principles applied on a basis consistent with that of the preceding Plan Year. If, however, the statements required to be submitted as part of the reports to the Department of Labor are prepared by a bank or similar institution or insurance carrier regulated and supervised and subject to periodic examination by a state or federal agency and if such statements are certified by the preparer as accurate and if such statements are, in fact, made a part of the annual report to the Department of Labor and no such audit is required by ERISA, then the audit required by the foregoing provisions of this Section shall be optional with the Committee.
2.13 Investment Policy. The Committee shall, at a meeting duly called for such purpose, establish and maintain an investment policy and method consistent with the objectives of the Plan. The Committee shall meet at least annually to review such investment policy and method. In establishing and reviewing such investment policy and method, the Committee shall endeavor to determine the Plan’s short‑term and long‑term objectives and financial needs, taking into account the need for liquidity to pay benefits and the need for investment growth.
2.14 Allocation and Delegation of Committee Responsibilities. Upon the approval of a majority of the members of the Committee, the Committee may (i) allocate among any of the members of the Committee any of the responsibilities of the Committee under the Plan and Trust Agreement and/or (ii) designate any person, firm or corporation that is not a member of the Committee to carry out any of the responsibilities of the Committee under the Plan and Trust Agreement. Any such allocation or designation shall be made pursuant to a written instrument executed by a majority of the members of the Committee.
ARTICLE IIIPARTICIPATION AND SERVICE
3.1 Eligibility for Participation.
3.2 Merged Plans. A participant in a Merged Plan shall become a Participant in the Plan as of the date such plan is merged with and into and becomes a part of the Plan (such date, the “merger date”) with respect to benefits accrued under the Merged Plan immediate prior to the merger date. Neither the merger of a Merged Plans into the Plan nor the amendment and restatement of the Plan shall operate to exclude, diminish, limit, or restrict the payments or continuation of payments of benefits accrued under the Merged Plan to such participant as of the merger date. Except to the extent otherwise expressly provided in the Plan or as required to reflect the fact that benefits accrued under the merged plan immediately prior the merger date is provided under the Plan based on the terms of the Merged Plan immediately prior to the merger date, the provisions of the Plan shall not apply to determine the amount or timing or form of distribution of such benefits and the amount and timing and form of distribution of all such benefits payable to a
participant in a Merged Plan shall be determined according to the terms of the Merged Plan as in effect immediately prior to the merger date or, if earlier, the Participant’s latest date of participation therein.
3.3 Notification of Eligible Employees. The Committee, which shall be the sole judge of the eligibility of an Employee to participate under the Plan, shall notify each Employee of his initial eligibility to participate in the Plan.
3.4 Applications by Employees. Each Eligible Employee who desires to make Pre-Tax Contributions, Roth Contributions and/or After-Tax Contributions to the Plan shall, in such form and in the manner designated by the Committee, (i) elect to make and designate the amount of his Pre-Tax Contributions, Roth Contributions and/or After-Tax Contributions to the Plan, (ii) elect the Investment Funds and/or Company Stock Fund pursuant to Section 9.3 in which to invest the amounts in his Account under the Plan, (iii) authorize payroll deductions for his Pre-Tax Contributions, Roth Contributions and/or After-Tax Contributions, and (iv) provide any other information the Committee considers necessary or desirable to administer the Plan.
3.5 Years of Service for Participation. For purposes of determining an Employee's Service for eligibility to receive an Employer Profit Sharing Contribution under Section 3.1(c) of the Plan, the Employee shall (i) with respect to periods of time prior to the Effective Date, be given credit for a Year of Service for each “year of service” with which he was credited pursuant to the Prior Plan, and (ii) with respect to periods of time on and after the Effective Date, be given credit for a Year of Service.
3.6 Years of Vesting Service. For purposes of determining an Employee’s vesting under Section 7.4, an Employee shall (i) with respect to periods of time prior to the Effective Date, be credited with a Year of Vesting Service for each “year of service” with which he was credited for vesting purposes pursuant to the Prior Plan and Salaried Plan, as applicable, and (ii) with respect to periods of time on and after the Effective Date, be given credit for a Year of Vesting Service for any Plan Year during which he is continuously employed by the Employer or during which the Employee completes not less than 1,000 Hours of Service.
3.7 Transferred Participants. If a Participant is transferred to an Affiliate, or to an employment classification with an Employer which is not covered by the Plan, his participation shall be suspended until he is subsequently re‑employed by an Employer in an employment classification covered by the Plan; provided, however, that during such suspension period (i) such Participant shall be credited with Service in accordance with Section 3.5 and 3.6, (ii) he shall not be entitled or required to make contributions under Section 4.1 or 4.4, (iii) his Employer Profit Sharing Account shall receive no Employer Contribution allocations except to the extent provided in Sections 4.2 and 5.2 and (iv) his Account shall continue to share proportionately in Income of the Trust Fund as provided in Article V. If an Employee is transferred from an employment classification with an Employer that is not covered by the Plan to an employment classification that is so covered, or from an Affiliate to an employment classification with an Employer that is
so covered, his period of Service prior to the date of transfer shall be considered for purposes of determining his eligibility to become a Participant under Sections 3.1 and 3.5 and for purposes of vesting under Section 7.4.
3.8 Beneficiary Upon Death. Upon the death of a Participant, the Participant’s Account shall be distributed to the Participant’s surviving Spouse, but if there is no surviving Spouse, or if the surviving Spouse has consented by a qualified election prior to the Participant’s death pursuant to Section 3.9, to the Beneficiary or Beneficiaries designated by the Participant in a written designation filed with the Plan, or if no such designation shall have been so filed, such designation is determined by the Committee to not be effective, or if a designated Beneficiary death occurs prior that the date of death of the Participant, then to the Participant’s estate (provided that if there are multiple Beneficiaries on a valid designation, and one or more of the Beneficiaries survive the Participant, then only the portion of the Account directed to be paid to the Beneficiary or Beneficiaries who predecease the Participant shall be paid to the Participant’s estate). No designation of any Beneficiary other than the Participant’s surviving Spouse shall be effective unless in writing and received by the Participant’s Employer, and in no event shall it be effective as of a date prior to such receipt. The former Spouse of a Participant shall be treated as a surviving Spouse to the extent provided under a qualified domestic relations order as described in Section 414(p) of the Code. As soon as possible after an Employee has become a Participant he shall file with the Committee a designation, in the form and manner as prescribed by the Committee, of the Beneficiary to receive benefits payable hereunder upon his death. The Participant may at any time change or cancel any such designation on a form, and in the manner, prescribed by the Committee. The last such designation received by the Committee shall be controlling over any testamentary or other disposition; provided, however, that no designation or change or cancellation thereof shall be effective prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. If the Committee shall be in doubt as to the right of any Beneficiary designated
by a deceased Participant to take the interest of such decedent, the Committee may direct the Trustee to take any action it deems appropriate under the circumstances, including, but not limited to, filing an interpleader action or paying the amount in question to the estate of such Participant, in which event the Trustee, the Employer, the Committee and any other person in any manner connected with the Plan shall have no further liability in respect of the amount so paid. Notwithstanding any provision in this Section 3.8 or the Plan to the contrary, if a Participant is divorced from his Spouse and at the time of his death is not remarried to the person from whom he was divorced, any designation of such divorced Spouse as his Beneficiary under the Plan filed prior to the divorce shall be null and void unless the contrary is expressly stated in a new Beneficiary designation form filed with the Committee.
3.9 Qualified Election. The Participant’s Spouse may waive the right to receive the Participant’s full vested Account balance. The election to waive the Participant’s full vested Account balance must designate a Beneficiary which may not be changed without spousal consent (or the consent of the Spouse must expressly permit designation by the Participant without any requirement of further consent of the Spouse). A consent that permits designations by the Participant without any requirement of further consent by the Spouse must acknowledge that the Spouse has the right to limit consent to a specific beneficiary and that the Spouse voluntarily elects to relinquish such right. The waiver must be in writing and the Participant’s Spouse must acknowledge the effect of the waiver. The Spouse’s consent to a waiver must be witnessed by a Plan representative or a notary public. The Participant may file a waiver without the Spouse’s consent if it is established to the satisfaction of the Committee that such written consent may not be obtained because there is no Spouse, or the Spouse cannot be located. Any consent under this Section will be valid only with respect to the Spouse who signs the consent. Additionally, a revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the distribution of the Account. The number of revocations shall not be limited.
3.10 Qualified Military Service.
ARTICLE IVCONTRIBUTIONS AND FORFEITURES
4.1 Pre-Tax Contributions.
4.2 Employer Profit Sharing Contributions.
4.3 Roth Contributions. A Participant may irrevocably elect, in the form and manner prescribed by the Committee, to treat any whole percentage of his Compensation for a payroll period that the Participant would otherwise be eligible to defer as Pre-Tax Contributions under Section 4.1, as designated Roth contributions, as defined in Section 402A(c)(1) of the Code, with such contributions referred to as “Roth Contributions.” This Section 4.3 is intended to meet the requirements of a Qualified Roth Contribution Program under Section 402A of the Code and the applicable regulations and guidance issued thereunder. A Participant’s Roth Contributions shall be in lieu of (and not in addition to) all or a portion of the Participant’s Pre-Tax Contributions for a payroll period and when combined with the Participant’s Pre-Tax Contributions shall not exceed Section 402(g) of the Code. Roth Contributions shall be paid to the Trustee as soon as practicable after the end of the applicable payroll period. Unless otherwise expressly provided in the Plan with respect to Roth Contributions, for purposes of the Plan, Roth Contributions shall be considered, treated and subject to the same requirements as Pre-Tax Contributions, including, but not limited to, the requirements in Section 4.1 and for purposes of Employer Matching Contributions, except that:
4.4 After-Tax Contributions. Eligible Employees may elect to make After-Tax Contributions under the Plan for any Plan Year, subject to the limitations of this Section 4.4 and in other provisions of the Plan. Eligible Employees may elect to so contribute each pay period a portion of the Participant’s Compensation in the form of After-Tax Contributions in whole percentages of not less than 1% nor more than 10% of the Compensation paid to the Participant
during such pay period and, unless otherwise provided by the Committee, an additional contribution from the last pay check of any calendar quarter; provided, however, that the total After-Tax Contributions under this Section 4.4 for any Plan Year shall not exceed 10% of the Participant’s Compensation for the Plan Year. None of the After-Tax Contributions will be deemed deductible for federal income tax purposes.
4.5 Qualified Non‑Elective Contributions. The Employer may, in its sole discretion, make qualified non‑elective contributions, as defined in Treasury Regulation Sections 1.401(k) and 1.401(m) (“QNECs”), for a Plan Year in any amount necessary to satisfy or help to satisfy the Actual Deferral Percentage limit in Section 13.2 of the Plan or the Contribution Percentage limit in Section 13.5 of the Plan. QNECs may be used in lieu of, or in conjunction with, the reductions described in Sections 13.4 and 13.6 of the Plan. QNECs shall be allocated in a manner determined by the Employer among the Accounts of non‑Highly Compensated Employees who were eligible to make Pre‑Tax Contributions during the Plan Year for which the QNECs are made at any time during the Plan Year or no later than 12 months after the end of the Plan Year. QNECs shall be considered Pre‑Tax Contributions and shall be subject to the same limitations as to withdrawal and distribution as Pre‑Tax Contributions. QNECs shall be nonforfeitable and 100% vested at all times. For any portion of a QNEC taken into account for purposes of the Actual Contribution Percentage limit, such portion may not be taken into account for purposes of the Actual Deferral Percentage limit.
4.6 Payment and Deductions of Pre‑Tax, Roth and After-Tax Contributions. A Participant’s deferrals and contributions under Sections 4.1, 4.3 and 4.4 shall be deducted by his Employer on each pay period from the Compensation paid to such Participant for that period and paid to the Trustee as soon as administratively feasible after the end of the pay period for which the deferral or contribution relates.
4.7 Contributions to be Tax Deductible. Contributions to the Plan shall not be made in excess of the amount deductible under applicable federal law now or hereafter in effect limiting the allowable deduction for contributions to profit‑sharing plans. Contributions to the Plan, when taken together with all other contributions made by the Employer to other qualified retirement plans, shall not exceed the maximum amount deductible under Section 404 of the Code.
4.8 Change of Elections and Suspension of Allotments. Any Participant may increase or decrease the percentage of his Compensation designated as Pre‑Tax Contributions, Roth Contributions and/or After-Tax Contributions, or suspend such contributions entirely, with any such change to be effective as soon as reasonably practicable following receipt of the change of elections, in the manner prescribed by the Committee in its sole discretion. In the case of total suspension of Pre‑Tax Contributions and Roth Contributions, the Employer Matching Contribution will automatically cease. Pre‑Tax, Roth or After-Tax Contributions which are not made during a period of suspension shall not be made retroactively.
4.9 Application of Funds. The Trustee shall hold or apply the Contributions so received by it subject to the provisions of the Plan; and no part thereof (except as otherwise provided in the Trust Agreement) shall be used for any purpose other than the exclusive benefit of the Participants or their Beneficiaries.
4.10 Disposition of Forfeitures. In any case in which a Participant is not entitled to the full amount in his Employer Profit Sharing Account or Employer Matching Contribution Account, the amount to which he is not entitled shall be forfeited, and shall be allocated in the following order:
4.11 Rollover Contributions. An Eligible Employee may file with the Committee a written request that the Trustee accept a Rollover Contribution from such Employee. The acceptance of a Rollover Contribution under this Section shall be subject to the following conditions:
4.12 Refunds to Employer. Once Contributions are made to the Plan by the Employer on behalf of the Participants, they are not refundable to the Employer unless a Contribution:
ARTICLE VPARTICIPANT ACCOUNTS
5.1 Individual Accounts. The Committee shall create and maintain adequate records to disclose the interest in the Trust Fund and in its component Investment Funds and the Company Stock Fund of each Participant, former Participant and Beneficiary. Such records shall be in the form of individual Accounts and credits and charges shall be made to such Accounts in the manner herein described. Except as provided below, a Participant may have the following separate categories of Accounts: (i) a Pre‑Tax Contribution Account; (ii) an After-Tax Contribution Account; (iii) an Employer Profit Sharing Account; (iv) a Frozen Matching Contribution Account; (v) a Roth Contribution Account; (vi) a Pre-Tax Rollover Account; and (vii) a Roth Rollover Account. The maintenance of individual Accounts is only for accounting purposes, and a segregation of the assets of the Trust Fund to each Account shall not be required. Distribution and withdrawals made from an Account shall be charged to the Account as of the date paid. A Participant who is a Wildcat Participant (as defined in Appendix B of the Plan) may also have a frozen Wildcat Employer Matching Contribution Account (as defined in Appendix B of the Plan).
5.2 Account Allocations and Adjustments.
5.3 Limitations on Contributions. Notwithstanding any provision of the Plan to the contrary, except as otherwise provided in this Section, total Annual Additions made to the Account of a Participant for a Limitation Year shall not exceed the “Maximum Permissible Amount, “which is the lesser of:
5.4 Valuation of Trust Fund. A valuation of the Trust Fund shall be made as of each Valuation Date and on any other date during the Plan Year that the Committee deems a valuation to be advisable. Any such interim valuation shall be exercised on a uniform and non‑discriminatory basis. For the purposes of each valuation, the assets of the Trust Fund shall be valued at the respective current market values, and the amount of any obligations for which the
Trust Fund may be liable, as shown on the books of the Trustee, shall be deducted from the total value of the assets. For the purposes of maintenance of books of account in respect of properties constituting the Trust Fund, and of making any such valuation, the Trustee shall account for the transactions of the Trust Fund on a modified cash basis.
5.5 Recognition of Different Funds. As provided in Article IX, Investment Funds and the Company Stock Fund shall be established, and each Participant shall direct, within the limitations set forth in Sections 9.3 and 9.4, what portion of the balance in his Accounts shall be deposited in each Investment Fund and the Company Stock Fund. Consequently, when appropriate, a Participant shall have a Pre‑Tax Contribution Account, Roth Contribution Account, an After-Tax Contribution Account, an Employer Profit Sharing Account and a Rollover Account in each such Investment Fund and the Company Stock Fund and the allocations described in Section 5.2 shall be adjusted in such manner as is appropriate to recognize the existence of the Investment Funds and the Company Stock Fund. Because Participants have a choice of Investment Funds and the Company Stock Fund, any reference in the Plan to a Pre‑Tax Contribution Account, a Roth Contribution Account, an After-Tax Contribution Account, an Employer Profit Sharing Account or a Rollover Account shall be deemed to mean and include all accounts of a like nature which are maintained for the Participant under each Investment Fund and the Company Stock Fund.
ARTICLE VIVOLUNTARY WITHDRAWALS
6.1 Withdrawal from After-Tax Contribution Account. A Participant who has not terminated Service, in accordance with such administrative procedures adopted by the Committee in its sole discretion, shall be entitled to withdraw from his After-Tax Contribution Account (valued as of the Valuation Date next preceding the withdrawal), any amount up to but not to exceed the balance of such Account as of such date.
6.2 Withdrawal from Pre‑Tax Contribution Account and Roth Contribution Account. Any Participant who has attained age 59½ and who has not terminated Service, in accordance with such administrative procedures adopted by the Committee in its sole discretion, shall be entitled to withdraw from his Pre‑Tax Contribution Account and Roth Contribution Account (valued as of the Valuation Date next preceding the withdrawal), any amount up to but not to exceed the balance of such Account as of such date. A withdrawal from the Pre‑Tax Contribution Account and Roth Contribution Account under this Section shall not affect the Participant’s remaining rights hereunder.
6.3 Withdrawal from Employer Profit Sharing Account for Salaried Participants.
6.4 Hardship Withdrawals. A Participant who has not terminated Service may, in accordance with such administrative procedures as may be adopted by the Committee in its sole discretion, at any time file with the Committee an appropriate written request for a hardship withdrawal from his Pre‑Tax Contribution Account and Roth Contribution Account, including for a hardship withdrawal made on or after January 1, 2019, including any Income of the Trust Fund allocated to his Pre‑Tax Contribution Account and Roth Contribution Account under the Plan or the Prior Plan, as applicable (but excluding any such Income for such distributions made on or after January 1, 1989 but prior to January 1, 2019). The approval or disapproval of such request shall be within the sole discretion of the Committee. A Participant must first withdraw any available amount credited to his Employer Profit Sharing Account, After-Tax Contribution Account, and Rollover Account, if any, in order to be permitted to make a hardship withdrawal from his Pre‑Tax Contribution Account or Roth Contribution Account and must also have taken all distributions and, for withdrawals prior to January 1, 2019, loans otherwise available under the Plan and all employee plans maintained by the Participant’s Employer to the extent such loans would not themselves cause an immediate and substantial financial need. For hardship withdrawals on and after January 1, 2019, the Participant must represent in writing or electronic medium, in the form prescribed by the Committee, that the Participant insufficient cash or other liquid assets to satisfy the need (and for such withdrawals prior to January 1, 2019, the Participant must certify that he is facing a hardship creating an immediate and substantial financial need and that the resources necessary to satisfy that financial need are not reasonably available from other
sources available to the Participant). The amount of the hardship withdrawal shall be limited to that amount which the Committee determines to be required to meet the immediate financial need created by the hardship including anticipated federal and state income taxes and penalties resulting from the distribution. The hardship withdrawal distribution shall be made in cash as soon as practicable after the Participant submits the hardship request and the dollar amount withdrawn shall be determined by reference to the Pre‑Tax Contribution Account and Roth Contribution Account as of the Valuation Date immediately preceding the date of withdrawal. A Participant who receives a hardship withdrawal prior to January 1, 2019, shall be prohibited from making pre‑tax contributions, Roth contributions and employee contributions to the Plan and any other plan maintained by the Employer (except “welfare plans” as defined in Section 3(1) of ERISA) until the end of the 6‑month period following the date of distribution or, if earlier, January 1, 2019. The following standards (or such other standards as may be acceptable under Treasury Regulations issued pursuant to Section 401(k) of the Code) shall be applied by the Committee on a uniform and non‑discriminatory basis in determining the existence of such a hardship:
6.5 Rollover Account. As of any Valuation Date, a Participant may withdraw an amount not in excess of the balance in his Rollover Account by requesting such a withdrawal in accordance with administrative procedures adopted by the Committee in its sole discretion. The actual payment of the amount to be withdrawn shall occur as soon as administratively practicable following the filing of the request with the Committee. The Valuation Date on which the withdrawal is processed shall determine the Participant’s balance in his Rollover Account.
6.6 In‑Service Withdrawal of Vested Account Balance. A Participant who has not terminated Service and who has attained age 70½ may withdraw any or all of his vested Account balance, determined as of the Valuation Date on which the withdrawal is made, by requesting such a withdrawal in accordance with the administrative procedures adopted by the Committee in its sole discretion.
6.7 Loans to Participants. Any Participant who is an Employee (including any such Participant on a Leave of Absence) may make application to borrow from his vested Accounts in the Trust Fund. In addition to Participants who are Employees (including any such Participant on Leave of Absence), loans shall be available to any “alternate payee” with respect to a Participant, but, if and only if, such person is a “party in interest” with respect to the Plan within the meaning of ERISA Section 3(14) and who must be eligible to obtain a Plan loan in order for exemptions set forth in Department of Labor Regulation Section 2550.408b-1 to apply to the Plan (herein, together with Participants who are Employees and those on Leave of Absence, collectively referred to as “Borrower”). Upon receipt of a loan application from a Borrower, the Committee may in its discretion direct the Trustee to make a loan to such Borrower. Such loans shall be granted in a uniform and non-discriminatory manner pursuant to the terms and conditions of a written loan procedure that shall be established by the Committee and subject to amendment from time to time and at any time by the Committee, with such written procedure hereby incorporated by reference as a part of the Plan. The amount of the loan when added to the amount of any outstanding loan or loans to the Borrower from any other plan of the Employer or an Affiliate which is qualified under Code Section 401(a) shall not exceed the lesser of (i) $50,000, reduced by the excess, if any, of the highest outstanding balance of loans from all such plans during the one year period ending
on the day before the date on which such loan was made over the outstanding balance of loans from the Plan on the date on which such loan was made, and further reduced by the amount of any prior loan that is deemed distributed under Code Section 72(p) and Treasury Regulation § 1.72(p)-1 and that has not been repaid (such as by a plan loan offset), or (ii) 50% of the present value of Borrower's vested Account balances under the Plan. Notwithstanding the foregoing, during the period March 27, 2020 through June 8, 2020, as permitted under Section 2202(b) of Coronavirus Aid, Relief and Economic Security Act, Pub. L. 116–136, with respect to a Participant who qualifies as a Qualified Individual, as defined in Section 6.9 of the Plan, the limit in clause (i) for the foregoing sentence shall be $100,000 (in lieu of $50,000) and the limit in clause (ii) of the foregoing sentence shall be 100 percent (in lieu of 50 percent).
6.8 Qualified Reservists Withdrawal. Notwithstanding any other provision of the Plan to the contrary, a Participant who is a member of a reserve component (as defined in Section 101 of Title 37 of the United States Code) who is ordered or called to active duty for a period in excess of 179 days, or for an indefinite period, may elect to receive a cash withdrawal of all or any portion of his Pre-Tax Contribution Account and, if applicable, Roth Contribution account. Any distribution made to a Participant pursuant to this Section must be made during the period beginning on the date of his order or call to active duty and ending on the close of his active duty period.
6.9 Coronavirus-Related Distribution. Pursuant to Section 2202(a) of the Coronavirus Aid, Relief and Economic Security Act, Pub. L. 116-136 (the “CARES Act”) and guidance issued by the Internal Revenue Service, during the period March 27, 2020 through December 30, 2020, a Participant who is a Qualified Individual, as defined below, may elect to withdraw up to $100,000 (or, if less, his vested Account balance) from his vested Account balance in the Trust Fund (or such lesser amount provided under Section 2202(a) of the CARES Act, with such amount to be determined solely by the Participant), determined as of the Valuation Date on which the withdrawal was made, by requesting such a withdrawal in accordance with the administrative procedures adopted by the Committee, in its sole discretion (“Coronavirus-Related Distribution”). A Participant may repay all or part of the amount of a Coronavirus-Related Distribution to the Plan within three years after the date that such distribution was received by the Participant, with such repayment deemed to be a Rollover Contribution and reflected in the Participant’s Rollover
Account; provided, however, that the Participant is an active Employee at the date of such repayment. For purposes of this Section 6.9, a “Qualified Individual” under CARES Act and guidance issued by the Internal Revenue Service, is defined as an individual:
ARTICLE VIIPARTICIPANTS’ BENEFITS
7.1 Normal Retirement Date. Any Participant who terminates his Service on or after his Normal Retirement Date shall be vested in and entitled to receive the entire amount of his Account balance under the Plan. Upon termination of Service on or after his Normal Retirement Date for any reason, the Committee shall direct the Trustee to make payment of the entire balance of the Participant’s Account to him at such time and in such manner as provided in Article VIII.
7.2 Disability of Participants. If a Participant satisfies the definition of “Disability” under the Company’s or an Employer’s long‑term disability plan (as applicable, the “LTD Plan”) and commences to receive disability benefits thereunder, such Participant (a) to the extent not vested, shall be fully vested in the entire amount of his Account as of the date of the Disability and (b) shall be entitled to receive such amount at such time and in such manner as provided in Article VIII. The determination of whether a Participant has become “Disabled” under the LTD Plan by such disability plan’s administrator shall be final and binding on all parties concerned.
7.3 Death of Participants. In the event of the termination of Service of any Participant by death, and after receipt by the Committee of acceptable proof of death, in the form and manner determined by the Committee in its sole discretion, his Beneficiary shall be entitled to receive the entire amount in the Participant’s Account balance under the Plan, with such Account balance fully vested as of the date of the Participant’s death. Payment of benefits due under this Section shall be made at such time and in such manner as provided in Article VIII.
7.4 Other Termination of Service.
7.5 Valuation Dates Determinative of Participant’s Rights. In the case of any Participant whose Service is terminated for any reason, the amount to which such Participant or his Beneficiary is entitled upon such termination of Service shall be determined as of the Valuation Date coinciding with or next following his termination of Service.
7.6 In‑Service Distributions. Except as provided in Section 6.2, no distribution or withdrawal of any portion of a Pre‑Tax Contribution Account or Roth Contribution Account under the Plan shall be permitted prior to the Participant’s “separation from employment, death or disability” within the meaning of Code Section 401(k) and the regulations thereunder other than a distribution authorized under the Plan upon the occurrence of an event described in, and made in accordance with, Code Section 401(k)(10), any successor provision of the Code or any regulations thereunder. Notwithstanding the foregoing, if there is a transfer of Plan assets and liabilities relating to any portion of a Participant’s Account under the Plan to a plan being maintained or created by such Participant’s new employer (other than a rollover or elective transfer), then such Participant has not experienced a “severance from employment” for purposes of the Plan.
ARTICLE VIIIPAYMENT OF BENEFITS
8.1 Time of Payment.
8.2 Method of Payment. After any and all required adjustments, the Trustee, in accordance with the direction of the Committee, shall make payments due under Section 8.1(a) or Section 8.1(c) of a Participant’s vested Account balance as elected by the Participant, in the form and manner prescribed by the Committee, as follows:
8.3 Deferral of Payments in the Case of Non‑Employee and Non‑Eligible Employee Participants. If a Participant’s Accounts are retained in the Trust after the date on which he ceases to be an Employee or an Eligible Employee, such Accounts shall continue to be treated as a part of the Trust Fund. The Accounts of such a non‑Employee and non‑Eligible Employee Participant will be credited (or debited) with their share of the net income (or loss) attributable to the investments of such Accounts but shall not be credited with any further (i) Employer contributions or (ii) Participant contributions.
8.4 Cash Out or Automatic Rollover of Vested Account Balance. Notwithstanding any other provision of this Article VIII, if upon termination of a Participant’s Service or thereafter the value of the Participant’s vested Account balance does not exceed $1,000, the Committee shall direct the Trustee to (i) distribute the value of the Participant’s vested Account balance to the Participant or the Participant’s Beneficiary in a lump sum cash payment or (ii) if the Participant or Beneficiary so timely elects, rollover such amount to an Eligible Retirement Plan (as defined in Section 8.5(b)). In the event that a Participant’s vested Account balance exceeds $1,000, but does not exceed $7,000, if the Participant does not timely elect to have such benefit paid directly to an Eligible Retirement Plan specified by the Participant or to receive the distribution directly, then the Committee will pay the distribution to an individual retirement account designated by the Committee.
8.5 Direct Rollover Distributions. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under Section 8.2, a Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution greater than $200 paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover. For the purposes of this Section the following definitions shall apply:
8.6 Non‑Spouse Beneficiary Rollovers. Notwithstanding any provision of the Plan to the contrary, to the extent provided in Section 829 of the Pension Protection Act of 2006, in the case of a designated Beneficiary (within the meaning of Section 401(a)(9) of the Code) who is a person or trust other than the Participant’s Spouse, the Beneficiary may elect to have all or part of the Participant’s Account distributed in a direct trustee‑to‑trustee transfer to an inherited individual retirement account described in Section 408(a) or (b) Section 408A of the Code (an “Inherited IRA”) if the following requirements are satisfied:
8.7 Required Minimum Distributions.
8.8 Election to Commence Benefits. Prior to or upon becoming entitled to receive a benefit hereunder, a Participant or Beneficiary shall file a claim for such benefit with the Committee at the time and in the manner prescribed by the Committee in its sole discretion.
8.9 Claims for Benefits. Any Participant or the Beneficiary of any deceased Participant may submit written application to the Committee for the payment of any benefit asserted to be due him under the Plan, including, but not limited to, claims related to administrative and statement errors. Such application shall set forth the nature of the claim and such other information as the Committee may reasonably request. Promptly upon the receipt of any application required by this Section, the Committee shall determine whether or not the Participant or Beneficiary involved is entitled to a benefit hereunder and, if so, the amount thereof and shall notify the claimant of its findings. Benefits under the Plan will be paid only if the Committee decides in its discretion that the applicant is entitled to them. The Committee, in its sole discretion, may establish reasonable time periods within which any claim for benefits or other cause of action must be submitted to the Committee.
8.10 Claims Review Procedure. If an application filed by a Participant or Beneficiary under Section 8.9 above shall result in a denial by the Committee of the benefit applied for, either in whole or in part, such applicant shall have the right, to be exercised by written application filed with the Committee within 60 days after receipt of notice of the denial of his application to request the review of his application and of his entitlement to the benefit applied for. Such request for review may contain such additional information and comments as the applicant may wish to present. Within 60 days after receipt of any such request for review, the Committee shall reconsider the application for the benefit in light of such additional information and comments as
the applicant may have presented, and if the applicant shall have so requested, shall afford the applicant or his designated representative a hearing before the Committee. The Committee shall also permit the applicant or his designated representative to review pertinent documents in its possession, including copies of the Plan document and information provided by the Employer relating to the applicant’s entitlement to such benefit. The Committee shall make a final determination with respect to the applicant’s application for review as soon as practicable, and in any event not later than 60 days after receipt of the aforesaid request for review, except that under special circumstances, such as the necessity for holding a hearing, such 60‑day period may be extended to the extent necessary, but in no event beyond the expiration of 120 days after receipt by the Committee of such request for review. If such an extension of time for review is required because of special circumstances, written notice of the extension shall be furnished to the applicant prior to the commencement of the extension. Notice of such final determination of the Committee shall be furnished to the applicant in writing, in a manner calculated to be understood by him, and shall set forth the specific reasons for the decision and specific references to the pertinent provisions of the Plan upon which the decision is based. Notwithstanding the foregoing or any provision of the Plan to the contrary, an Applicant must exhaust all of his administrative remedies set forth in Section 8.9 and this Section with respect to any claim or cause of action related to the Plan before he may bring any action at law or equity.
8.11 Disputed Benefits. If any dispute still exists between a Participant or a Beneficiary and the Committee after a review of the claim or in the event any uncertainty shall develop as to the person to whom payment of any benefit hereunder shall be made, the Trustee may withhold the payment of all or any part of the benefits payable hereunder to the Participant or Beneficiary until such dispute has been resolved by a court of competent jurisdiction or settled by the parties involved.
8.12 Legal Actions. An individual shall have no right to bring any action at law or in equity regarding a claim for benefits, unless and until he exhausts his rights to review under this Article VIII in accordance with the time frames set forth therein.
8.13 Optional Forms of Benefits. Notwithstanding anything in the Plan to the contrary, all optional forms of benefits which are “Section 411(d)(6) protected benefits,” as described in Treasury Regulations Section 1.411(d)‑4, shall continue to be optional forms of benefits for Participants to whom the optional forms apply, notwithstanding any subsequent amendment of the Plan purporting to revise or delete any such optional form of benefit and notwithstanding any contrary provision of Article VI or this Article VIII, unless otherwise permitted by applicable law.
ARTICLE IXTRUST AGREEMENT; INVESTMENT FUNDS;COMPANY STOCK FUND; INVESTMENT DIRECTIONS
9.1 Trust Agreement. The Company has entered into a Trust Agreement governing the administration of the Trust with the Trustee, the provisions of which are herein incorporated by reference as fully as if set out herein. The assets held under said Trust Agreement on behalf of the Plan shall constitute the Trust Fund.
9.2 Investment Funds and Company Stock Fund. The Trustee shall divide the Trust Fund into the Company Stock Fund and such Investment Funds as may be selected from time to time by the Committee. Contributions shall be paid into the Investment Fund or Funds and/or Company Stock Fund (collectively, for purposes of this Article IX, the “Funds”), pursuant to the directions of the Participants given in accordance with the provisions of Sections 9.3 and 9.4 as certified to the Trustee by the Committee. Except as otherwise provided herein, interest, dividends and other income and all profits and gains produced by each such Fund shall be paid into such Fund, and such interest, dividends and other income or profits and gains, without distinction between principal and income, may be invested and reinvested but only in the property hereinabove specified for the particular Fund. Subject to Section 9.3, the Committee shall have the right to add and/or delete Investment Funds from time to time and at any time.
9.3 Investment Directions of Participants. Each Participant may direct the investment of the amounts credited to his Account among the Investment Funds available under the Plan; provided that a Participant may direct the investment of Contributions, including Rollover Contributions, to his Account in the Company Stock Fund only in an amount equal to between 1% and 15% (in whole percentages) of such Contributions and Rollover Contributions credited to his Account. The Participant shall file such direction with the Committee in accordance with procedures adopted by the Committee, in its sole direction, which shall specify the allocation of Contributions among such Funds.
9.4 Change of Investment Directions. Except as provided in Section 9.3, a Participant or former Participant may modify his investment direction among the various Funds in increments of 1% (in whole percentages totaling in the aggregate 100% among the Funds (subject to the 15% limitation for the Company Stock Fund described in Section 9.3 with respect to Contributions and Rollover Contributions)) with respect to (i) future Contributions and Rollover Contributions (ii) the future investment of prior Contributions and Rollover Contributions, or (iii) both, by providing notice of the new investment direction to the Committee, in accordance with applicable procedures. With respect to any portion of the Accounts of a Participant is invested in the Company Stock Fund, the Participant may elect to direct the Plan to divest any such securities, and to reinvest an equivalent amount among the Investment Funds in accordance with Code Section 401(a)(35). Changes in investment direction shall become effective as soon as administratively practicable. The Committee shall establish an administrative procedure to allow for prompt communication of the investment directions and changes thereto of each Participant to the Trustee. In the event a
Participant fails to direct the manner of investing his Account as provided in Sections 9.3 and 9.4, such Account shall be invested by the Trustee in the Default Investment Fund.
9.5 Benefits Paid Solely from Trust Fund. All benefits under the Plan shall be paid exclusively from the Trust Fund.
9.6 Committee Directions to Trustee. The Trustee shall make only such distributions and payments out of the Trust Fund as may be directed by the Committee. The Trustee shall not be required to determine or make any investigation to determine the identity or mailing address of any person entitled to any distributions and payments out of the Trust Fund and shall have discharged its obligation in that respect when it shall have sent certificates and checks or other papers by ordinary mail to such persons and addresses as may be certified to it by the Committee.
9.7 Authority to Designate Investment Manager. The Committee may appoint an investment manager or managers to manage (including the power to acquire and dispose of) any assets of the Trust Fund in accordance with the terms of the Trust Agreement and ERISA.
9.8 Voting of Company Stock. Unless otherwise required by law and except as provided herein, the Trustee shall vote the Company Stock held in the Trust Fund for the respective Accounts of the Plan Participants. On issues where Participants are required to vote the Company Stock allocated to their Accounts or in connection with a tender offer, the Participants shall be entitled to direct the Trustee as to the manner in which the Company Stock shall be voted or whether the such Company Stock shall be tendered. Any such Participant directions may be certified to the Trustee by the Committee or any agent designated thereby in accordance with such administrative procedures as the Committee may, in its sole discretion, adopt. Company Stock with respect to which no such direction shall be received and fractional shares shall be voted by the Trustee in the same proportions as are shares of Company Stock as to which voting instructions have been received or shall be voted or tendered in accordance with the provisions of the Trust Agreement as then in effect. Voting, tender, and similar rights with respect to any other investment option provided under the Plan shall also be passed through to Participant to the extent that the Participant’s Account is invested in such option. Any Participant directions with respect to voting, tender or similar rights may be credited to Trustee by the Committee or any agent designated thereby in accordance with such administrative procedures as the Committee may, in its sole and absolute discretion, adopt. The portion of an investment option with respect to which the Trustee receives no Participant direction shall be voted or tendered, as applicable, in accordance with the provisions of the Trust Agreement as then in effect.
9.9 Voting of Investment Funds. Voting, tender, and similar rights with respect to any Investment Funds provided under the Plan shall be passed through to Participants to the extent that the Participant’s Account is invested in such Fund. Any Participant directions with respect to voting, tender or similar rights may be credited to the Trustee by the Committee or any agent designated thereby in accordance with such administrative procedures as the Committee may, in its sole and absolute discretion, adopt.
ARTICLE XADOPTION OF PLAN BY OTHER ORGANIZATIONS;SEPARATION OF THE TRUST FUND;AMENDMENT AND TERMINATION OF THE PLAN;DISCONTINUANCE OF CONTRIBUTIONS TO THE TRUST FUND
10.1 Adoptive Instrument. Any corporation or other organization with employees, now in existence or hereafter formed or acquired which is not already an Employer under the Plan and which is otherwise legally eligible, may, with the approval of the Committee acting on behalf of the Company, adopt and become an Employer under the Plan, and listed on Appendix C, by executing and delivering to the Company and the Trustee an adoptive instrument specifying the classification of its Employees who are to be eligible to participate in the Plan and by agreeing to be bound as an Employer by all the terms of the Plan with respect to its Eligible Employees. The adoptive instrument may contain such changes and variations in the terms of the Plan as may be acceptable to the Company by action of the Committee. Any such approved organizations which shall adopt the Plan shall designate the Company as its agent to act for it in all transactions affecting the administration of the Plan and shall designate the Committee to act for such Employer and its Participants in the same manner in which the Committee may act for the Company and its Participants hereunder. The adoptive instrument shall specify the effective date of such adoption of the Plan and shall become, as to such adopting Employer and its Employees, a part of the Plan. The Company may, in its absolute discretion, terminate an adopting Employer’s participation at any time when in its judgment such adopting Employer fails or refuses to discharge its obligations under the Plan.
10.2 Separation of the Trust Fund. A separation of the Trust Fund as to the interest therein of the Participants of any particular Employer may be requested by an Employer at any time pursuant to the procedures set forth in Section 10.3. In the event such a separation is approved, as provided in Section 10.3, the Trustee shall set apart that portion of the Trust Fund which shall be allocated to such Participants pursuant to a valuation and allocation of the Trust Fund made in accordance with the procedures set forth in Sections 5.2 and 5.4, but as of the date when such separation of the Trust Fund shall be effective. Such portion may in the Trustee’s discretion be set apart in cash or in kind out of the properties of the Trust Fund. That portion of
the Trust Fund so set apart shall continue to be held by the Trustee as though such Employer had entered into the Trust Agreement as a separate trust agreement with the Trustee. Such Employer may in such event designate a new trustee of its selection to act as trustee under such separate trust agreement. Such Employer shall thereupon be deemed to have adopted the Plan as its own separate plan and shall subsequently have all such powers of amendment or modification of such plan as are reserved herein to the Company.
10.3 Voluntary Separation. If any Employer shall desire to separate its interest in the Trust Fund under Section 10.2, it shall request such a separation in a notice in writing to the Company, the Committee and the Trustee. Any such separation shall not be permitted or effective unless and until consented to and approved by the Committee, in its sole discretion. If the Committee so consents to and approves of the separation, such separation shall then be made as of the date established by the Committee, and only then shall such separation be accomplished in the manner set forth in Section 10.2.
10.4 Amendment of the Plan. Except as otherwise expressly provided in this Section, (i) the Board, in its settlor capacity, shall have the exclusive right (except as provided below) to amend or modify the Plan and the Trust Agreement (with the consent of the Trustee, if required) at any time and from time to time to the extent that it may deem advisable and (ii) the Committee shall have the right to modify the administrative provisions of the Plan and to change the Investment Funds offered under the Plan. In addition, the Committee shall have the limited right (along with the Board) to amend or modify the Plan and the Trust Agreement (with consent of the Trustee, if required) for any changes required by applicable law or by the Internal Revenue Service to maintain the qualified status of the Plan and related Trust at any time and from time to time to the extent that it may deem advisable, so long as the change is consistent with the general compensation policies of the Company, to amend the Plan to provide past service credit to any group of Eligible Employees to the extent required by any adoptive instrument or purchase agreement entered into by an Employer, to amend Appendix A to reflect any Employer Matching Contributions required under a collective bargaining agreement to which any Employer is a party, and to amend Appendix C to reflect the addition and deletion of Employers. The Board alone, in its settlor capacity, shall have the sole and exclusive right and power to (i) amend, modify, restrict or limit investment in, or terminate the Company Stock Fund and (ii) amend, modify or terminate any provision of the Plan or Trust Agreement related to the administration of the Company Stock Fund. Any such amendment or modification shall be set out in an instrument in writing duly authorized by the Board or the Committee, as the case may be, and executed by an appropriate officer of the Company or member of the Committee. Upon delivery by the Company of such an instrument amending the Plan to the Trustee, the Plan shall be deemed to have been amended or modified in such manner and to such extent and effective as of the date therein set forth, and thereupon any and all Participants whether or not they shall have become such prior to such amendment or modification shall be bound thereby. No such amendment or modification shall, however, increase the duties or responsibilities of the Trustee without its consent thereto in writing, or have the effect of transferring to or vesting in any Employer any interest or ownership in any properties of the Trust Fund, or of permitting the same to be used for or diverted to purposes other than for the exclusive benefit of the Participants and their Beneficiaries. No such amendment shall decrease the Account of any Participant or shall decrease any Participant's vested interest in his
Account. No amendment shall directly or indirectly reduce a Participant's non-forfeitable vested percentage in his benefits under Section 7.4 of the Plan, unless each Participant having not less than three years of Service is permitted to elect to have his non-forfeitable vested percentage in his benefits computed under the provisions of Section 7.4 without regard to the amendment. Such election shall be available during an election period, which shall begin on the date such amendment is adopted, and shall end on the latest of (i) the date 60 days after such amendment is adopted, (ii) the date 60 days after such amendment is effective, or (iii) the date 60 days after such Participant is issued written notice of the amendment by the Committee or the Employer. Notwithstanding anything herein to the contrary, the Plan or the Trust Agreement may be amended in such manner as may be required at any time to make it conform to the requirements of the Code or of any United States statutes with respect to employees' trusts, or of any amendment thereto, or of any regulations or rulings issued pursuant thereto, and no such amendment shall be considered prejudicial to any then existing rights of any Participant or his Beneficiary under the Plan.
10.5 Acceptance of Amendment by Employers. The Company may deliver to each other Employer any amendment to the Plan or the Trust Agreement by the Company or the Committee. Each such Employer will be deemed to have consented to such amendment upon the Company’s execution thereof.
10.6 Termination of the Plan. The Plan may be terminated, in its entirety, pursuant to the provisions of, and as of any subsequent date specified in, an instrument in writing executed by the Company, and approved and authorized by the Board, and which said instrument shall be delivered to the Trustee. A termination of the Plan as to any particular Employer (and only as to any such particular Employer) shall occur under the following circumstances:
10.7 Liquidation and Distribution of Trust Fund Upon Termination. In the event a complete or partial termination of the Plan in respect of any Employer shall occur, a separation of the Trust Fund in respect of the affected Participants of such Employer shall be made as of the effective date of such termination of the Plan in accordance with the procedure set forth in Section 10.2. Following separation of the Trust Fund in respect of the Participants of any Employer as to whom the Plan has been terminated, the assets and properties of the Trust Fund so set apart, other than Company Stock, shall be reduced to cash as soon as may be expeditious under the circumstances. Any administrative costs or expenses incurred incident to the final liquidation of such separate trust funds shall be paid by the Employer, except that in the case of bankruptcy or insolvency of such Employer any such costs shall be charged against the Trust Fund. Following such partial reduction of such Trust Fund to cash, the Accounts of the Participants shall then be valued as provided in Sections 5.2 and 5.4 and shall be fully vested, whereupon each such Participant shall become entitled to receive the entire amount in his Account in cash and/or Company Stock, as directed by the Committee. The terminating Employer shall promptly advise the appropriate District Director of the Internal Revenue Service of such complete or partial termination. Any distribution due to the termination of the Plan will be made in accordance with the requirements of Code Sections 401(a)(11), 411(d)(6), and 417.
10.8 Effect of Termination or Discontinuance of Contributions. If any Employer shall terminate or partially terminate the Plan as to its Employees, then all amounts credited to the Accounts of the Participants of such Employer with respect to whom the Plan has terminated shall become fully vested and non‑forfeitable. If any Employer shall completely discontinue its Contributions to the Trust Fund or suspend its Contributions to the Trust Fund under such circumstances as to constitute a complete discontinuance of Contributions within the meaning of Section 1.401‑6(c) of the regulations under the Code, then all amounts credited to the Accounts of the Participants of such Employer shall become fully vested and non‑forfeitable, and throughout any such period of discontinuance of Contributions by an Employer all other provisions of the Plan shall continue in full force and effect with respect to such Employer other than the provisions for Contributions by such Employer.
10.9 Merger of Plan with Another Plan. In the event of any merger or consolidation of the Plan with, or transfer in whole or in part of the assets and liabilities of the Trust Fund to another trust fund held under, any other plan of deferred compensation maintained or to be established for the benefit of all or some of the Participants of the Plan, the assets of the Trust Fund applicable to such Participants shall be transferred to the other trust fund only if:
10.10 Consolidation or Merger with Another Employer. Notwithstanding any provision of this Article X to the contrary, upon the consolidation or merger of two or more Employers under the Plan with each other, the surviving Employer or organization shall automatically succeed to all the rights and duties under the Plan and Trust of the Employers involved, and their shares of the Trust Fund shall, subject to the provisions of Section 10.9, be merged and thereafter be allocable to the surviving Employer or organization for its Participants and their Beneficiaries.
ARTICLE XIMISCELLANEOUS PROVISIONS
11.1 Terms of Employment. The adoption and maintenance of the provisions of the Plan shall not be deemed to constitute a contract between any Employer and Employee, or to be a consideration for, or an inducement or condition of, the employment of any person. Nothing herein contained shall be deemed to give to any Employee the right to be retained in the employ of an Employer or to interfere with the right of an Employer to discharge an Employee at any time, nor shall it be deemed to give to an Employer the right to require any Employee to remain in its employ, nor shall it interfere with any Employee’s right to terminate his employment at any time.
11.2 Controlling Law. Subject to the provisions of ERISA, the Plan shall be construed, regulated and administered under the laws of the State of Texas.
11.3 Invalidity of Particular Provisions. In the event any provision of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of the Plan but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.
11.4 Non‑Alienation of Benefits. Except as otherwise provided below and with respect to certain judgments and settlements pursuant to Section 401(a)(13) of the Code, no benefit which shall be payable out of the Trust Fund to any person (including a Participant or Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or change, and any attempt to anticipate, alienate, sell, transfer assign, pledge, encumber or charge the same shall be voided and no such benefit shall in any manner be liable for, or subject to attachment or legal process for or against such person, and the same shall not be recognized by the Trustee, except to the extent as may be required by law.
11.5 Payments in Satisfaction of Claims of Participants. Any payment or distribution to any Participant or his legal representative or any Beneficiary in accordance with the provisions of the Plan shall be in full satisfaction of all claims under the Plan against the Trust Fund, the Trustee and the Employer. The Trustee may require that any distributee execute and deliver to the Trustee a receipt and a full and complete release as a condition precedent to any payment or distribution under the Plan.
11.6 Payments Due Minors and Incompetents. If the Committee determines that any person to whom a payment is due hereunder is a minor or is incompetent by reason of physical or mental disability, the Committee shall have the power to cause the payments becoming due such person to be made to another for the benefit of such minor or incompetent, without the Committee or the Trustee being responsible to see to the application of such payment. To the extent permitted by ERISA, payments made pursuant to such power shall operate as a complete discharge of the Committee, the Trustee and the Employer.
11.7 Impossibility of Diversion of Trust Fund. Notwithstanding any provision herein to the contrary, no part of the corpus or the income of the Trust Fund shall ever be used for or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries or for the payment of expenses of the Plan. No part of the Trust Fund shall ever directly or indirectly revert to any Employer.
11.8 Litigation Against the Trust. If any legal action filed against the Trustee, the board of directors of any Employer, the Committee, or against any member or members of the Committee or its designees, by or on behalf of any Participant or Beneficiary, has a result adverse to such Participant or to such Beneficiary, the Trustee shall reimburse itself, the applicable board(s) of directors, the Committee and any member or members of the Committee or its designees or the applicable board(s) of directors, all costs and fees expended by it or them by surcharging all costs and fees against the sums payable under the Plan to such Participant or Beneficiary, but only to the extent a court of competent jurisdiction specifically authorizes and directs any such surcharges and only to the extent permitted under Section 401(a)(13) of the Code.
11.9 Evidence Furnished Conclusive. The Employer, the Committee and any person involved in the administration of the Plan or management of the Trust Fund shall be entitled to rely upon any certification, statement or representation made or evidence furnished by a Participant or Beneficiary with respect to facts required to be determined under any of the provisions of the Plan, and shall not be liable on account of the payment of any monies or the doing of any act or failure to act in reliance thereon. Any such certification, statement, representation or evidence, upon being duly made or furnished, shall be conclusively binding upon such Participant or Beneficiary but not upon the Employer or the Committee or any other person involved in the administration of the Plan or management of the Trust Fund. Nothing herein contained shall be construed to prevent any of such parties from contesting any such certification, statement, representation or evidence or to relieve the Participant or Beneficiary from the duty of submitting satisfactory proof of such fact.
11.10 Copy Available to Participants. A copy of the Plan, and of any and all future amendments thereto, shall be provided to the Committee and shall be available to Participants and, in the event of the death of a Participant, to his Beneficiary, for inspection at the offices of the Company during its regular office hours.
11.11 Unclaimed Benefits. If at, after or during the time when a benefit hereunder is payable to any Participant, Beneficiary or other distributee, the Committee, upon request of the Trustee, or at its own instance, shall mail by registered or certified mail to such Participant, Beneficiary or other distributee at his last known address a written demand for his then address or
for satisfactory evidence of his continued life, or both, and if such Participant, Beneficiary or distributee shall fail to furnish the same to the Committee within a reasonable period of time not to exceed 2 years from the mailing of such demand, then the Committee may, in its sole discretion, determine that such Participant, Beneficiary or other distributee has forfeited his right to such benefit and may declare such benefit, or any unpaid portion thereof, terminated as if the death of the distributee (with no surviving Beneficiary) had occurred on the date of the last payment made thereon, or on the date such Participant, Beneficiary or distributee first became entitled to receive benefit payments, whichever is later; provided, however, that such forfeited benefit shall be reinstated if a claim for the same is made by the Participant, Beneficiary or other distributee at any time thereafter. Such reinstatement shall be made out of the Forfeitures for the Plan Year during which such claim was filed with the Committee (as provided in Section 4.10); and, if Forfeitures for the Plan Year are insufficient to reinstate such amounts, by the mandatory contribution by the Employer allocated solely to such reinstatement.
11.12 Headings for Convenience Only. The headings and subheadings herein are inserted for convenience of reference only and are not to be used in construing this instrument or any provision thereof.
11.13 Successors and Assigns. This agreement shall bind and inure to the benefit of the successors and assigns of the Employers.
ARTICLE XIITOP‑HEAVY PLAN REQUIREMENTS
12.1 General Rule. For any Plan Year for which the Plan is a Top‑Heavy Plan, as defined in Section 12.7, despite any other provisions of the Plan to the contrary, the Plan shall be subject to the provisions of this Article XII.
12.2 Vesting Provisions. Each Participant who has completed an “hour of service” (within the meaning of Department of Labor Regulation Section 2530.200b‑2(a)(1)) after the Plan becomes top‑heavy and while the Plan is top‑heavy and who has completed the vesting service specified in the following table shall be vested in his Account under the Plan at least as rapidly as is provided in the following schedule; except that the vesting provisions set forth in Section 7.5 shall be used at any time in which it provides for more rapid vesting:
If an Account becomes vested by reason of the application of the preceding schedule, it may not thereafter be forfeited by reason of re‑employment after retirement pursuant to a suspension of benefits provision, by reason of withdrawal of any mandatory employee contributions to which Employer Contributions were keyed, or for any other reason. If the Plan subsequently ceases to be top‑heavy, the preceding schedule shall continue to apply with respect to any Participant who had at least three years of service (as defined in Treasury Regulation Section 1.411(a)‑8T(b)(3)) as of the close of the last year that the Plan was top‑heavy, except that each Participant whose vested percentage in his Account is determined under such amended schedule and who has completed at least three years of service with the Employer, may elect, during the election period, to have the vested percentage in his Account determined without regard to such amendment if his vested percentage under the Plan as amended is, at any time, less than such percentage determined without regard to such amendment. For all other Participants, the vested percentage of their Accounts prior to the date the Plan ceases to be top‑heavy shall not be reduced, but future increases in the vested percentage shall be made only in accordance with the vesting provisions set forth in Section 7.4.
12.3 Minimum Contribution Percentage. Each Participant who is (i) a Non‑Key Employee, as defined in Section 12.7, and (ii) employed on the last day of the Plan Year shall be entitled to have Contributions and Forfeitures (if applicable) allocated to his Account of not less than 3% (the “Minimum Contribution Percentage”) of the Participant’s Compensation. This minimum allocation percentage shall be provided without taking a Non‑Key Employee’s Pre‑Tax Contributions into account. Even a Non‑Key Employee who has completed less than 1,000 hours
of service shall receive a Minimum Contribution Percentage, provided that such Non‑Key Employee has not terminated Service by the last day of the Plan Year. A Non‑Key Employee may not fail to receive a Minimum Contribution Percentage because of a failure to receive a specified minimum amount of compensation or a failure to make mandatory employee or elective contributions. This Minimum Contribution Percentage will be reduced for any Plan Year to the percentage at which contributions (including Pre‑Tax Contributions and Forfeitures, if applicable) are made or are required to be made under the Plan for the Plan Year for the Key Employee for whom such percentage is the highest for such Plan Year. For this purpose, the percentage with respect to a Key Employee will be determined by dividing the Contributions (including Pre‑Tax Contributions and Forfeitures if applicable) made for such Key Employee by his total compensation (as defined in Section 415(c)(3) of the Code) not in excess of the compensation limit under Code Section 401(a)(17), with such amount automatically adjusted in the same manner as the amount set forth in Section 12.4 below.
12.4 Limitation on Compensation. The annual compensation of a Participant taken into account under this Section for purposes of computing benefits under the Plan shall not exceed the compensation limit in Code Section 401(a)(17), with such amount adjusted automatically for each Plan Year to the amount prescribed by the Secretary of the Treasury or his delegate pursuant to Section 401(a)(17)(B) of the Code and regulations for the calendar year in which such Plan Year commences.
12.5 Coordination with Other Plans. In the event that another defined contribution or defined benefit plan maintained a Considered Company provides contributions or benefits on behalf of Participants in the Plan, such other plan shall be treated as a part of the Plan pursuant to
principles prescribed by applicable Treasury Regulations or Internal Revenue Service rulings to determine whether the Plan satisfies the requirements of Sections 12.2, 12.3 and 12.4 and to avoid inappropriate omissions or inappropriate duplication. If a Participant is covered both by a top‑heavy defined benefit plan and a top‑heavy defined contribution plan, a comparability analysis (as prescribed by Revenue Ruling 81‑202 or any successor ruling) shall be performed in order to establish that the plans are providing benefits at least equal to the defined benefit minimum. Such determination shall be made upon the advice of counsel by the Committee which shall, if necessary, cause benefits or contributions to be made sufficient.
12.6 Distributions to Certain Key Employees. Notwithstanding any other provision of the Plan to the contrary, the entire interest in the Plan of each Participant who is a Key Employee and a “5% Owner” (as defined in Section 12.7(d)) in the calendar year in which such individual attains age 70½ shall be distributed to such Participant not later than April 1 following the calendar year in which such individual attains age 70½.
12.7 Determination of Top‑Heavy Status. The Plan shall be a Top‑Heavy Plan for any Plan Year if, as of the Determination Date, the aggregate of the accounts under the Plan (determined as of the Valuation Date) for Participants (including former Participants) who are Key Employees exceeds 60% of the aggregate of the accounts of all Participants, excluding former Key Employees, or if the Plan is required to be in an Aggregation Group, any such Plan Year in which such Group is a Top‑Heavy Group. In determining Top‑Heavy status, if an individual has not performed one hour of service for any Considered Company at any time during the 1‑year period ending on the Determination Date, any accrued benefit for such individual and the aggregate accounts of such individual shall not be taken into account.
ARTICLE XIIITESTING OF CONTRIBUTIONS
13.1 Definitions. For purposes of this Article XIII, the following terms, when capitalized, shall be defined as:
13.2 Actual Deferral Percentage Test. The ADP for the eligible Highly Compensated Employees for the Plan Year shall not exceed the greater of:
13.3 QNECs and QMACs. The Company, in its sole discretion, may elect to make QNECs or QMACs for any Plan Year in any amount it determines is necessary to satisfy or contribute to satisfying the Actual Deferral Percentage test or the Actual Contribution Percentage test. QNECs and QMACs may be used in lieu of, or in conjunction with, the distributions or recharacterizations described in Section 13.4 or the forfeitures or distributions described in Section 13.6 of the Plan. QNECs and QMACs shall be allocated in a manner determined by the Company, in accordance with Treasury Regulation Section 1.401(a)(4)‑2, among the Pre‑Tax Contribution Accounts of Non‑Highly Compensated Employees who were eligible to make Pre‑Tax Contributions during the Plan Year for which the QNECs are made at any time during the Plan Year or no later than 12 months after the end of the Plan Year. Any portion of the QNECs or QMACs taken into account for purposes of the Actual Contribution Percentage test in Section 13.5, may not be taken into account for purposes of the Actual Deferral Percentage test in Section 13.2. QNECs must satisfy the non‑disproportionate contributions requirements of Treasury Regulation Sections 1.401(k)‑2(a)(6)(iv) and 1.401(m)‑2(a)(6)(iv).
13.4 Excess Contributions. If neither of the tests described in (a) or (b) of Section 13.2 are satisfied, and the Company decides not to make QNECs or QMACs as a corrective measure, then Excess Contributions, plus any income and minus any loss attributable thereto, of certain Highly Compensated Employees will be recharacterized or distributed and shall be considered taxable income to such Highly Compensated Employees. Excess Contributions are allocated to the Highly Compensated Employees with the largest amount of Pre‑Tax Contributions taken into
account in calculating the ADP test for the year in which the excess arose, beginning with the Highly Compensated Employee with the largest amount of such Pre‑Tax Contributions and continuing in descending order until all of the Excess Contributions have been allocated. To the extent a Highly Compensated Employee has not reached his Catch‑Up Contribution limit under the Plan, Excess Contributions shall be allocated to such Highly Compensated Employee as Catch Up Contributions (not to exceed the Catch‑Up Contribution limit) and such contributions will not be treated as Excess Contributions. Excess Contributions shall be treated as Annual Additions under the Plan even if distributed.
13.5 Actual Contribution Percentage Test. The Contribution Percentage for the eligible Employees for any Plan Year who are Highly Compensated Employees shall not exceed the greater of:
13.6 Excess Aggregate Contributions. If neither of the tests described in (a) or (b) of Section 13.5 are satisfied, and the Company decides not to make QNECs or QMACs as a corrective measure, Excess Aggregate Contributions, plus any income and minus any loss attributable thereto, shall be forfeited, or if not forfeitable, shall be distributed no later than 12 months after the close of a Plan Year to Participants to whose accounts such Excess Aggregate Contributions were allocated. Excess Aggregate Contributions are allocated to the Highly Compensated Employees with the largest Aggregate Contributions taken into account in calculating the ACP test for the year in which the excess arose, beginning with the Highly Compensated Employee with the largest amount of such Aggregate Contributions and continuing in descending order until all the Excess Aggregate Contributions have been allocated. Excess Aggregate Contributions shall be treated as Annual Additions under the Plan even if distributed.
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