RETIREMENT SAVINGS PLAN
OF
TYSON FOODS, INC.
THIS INDENTURE is made as of the 13th day of December, 1999, by TYSON
FOODS, INC, a corporation duly organized and existing under the laws of the
State of Delaware.
W I T N E S S E T H:
WHEREAS, the Primary Sponsor established by indenture originally
effective as of October 1, 1987, the Retirement Savings Plan of Tyson
Foods, Inc. (the "Plan"), which was last amended by indenture dated January
1, 1993; and
WHEREAS, the Primary Sponsor now wishes to amend and restate the Plan
primarily to comply with and make changes permitted by the provisions of
the Small Business Job Protection Act of 1996 and the Taxpayer Relief Act
of 1997; and
WHEREAS, the Plan is intended to be a profit sharing plan within the
meaning of Treasury Regulations Section 1.401-1(b)(1)(ii) and also contains
a cash or deferred arrangement as described in Section 401(k) of the
Internal Revenue Code of 1986; and
WHEREAS, the provisions of the Plan, as amended and restated herein,
shall apply to Plan Years beginning after January 1, 1997, except to the
extent the provisions are required to apply at an earlier date or to any
other members to comply with applicable law;
NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the
Plan in its entirety, generally effective as of January 1, 1997, except as
otherwise provided herein, to read as follows:
48
RETIREMENT SAVINGS PLAN
OF
TYSON FOODS, INC.
Page
SECTION 1 DEFINITIONS 1
SECTION 2 ELIGIBILITY 10
SECTION 3 CONTRIBUTIONS 10
SECTION 4 ALLOCATIONS 12
SECTION 5 PLAN LOANS 13
SECTION 6 IN-SERVICE WITHDRAWALS 15
SECTION 7 PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT 17
SECTION 8 PAYMENT OF BENEFITS OF RETIREMENT 18
SECTION 9 DEATH BENEFITS 19
SECTION 10 GENERAL RULES ON DISTRIBUTIONS 19
SECTION 11 ADMINISTRATION OF THE PLAN 21
SECTION 12 CLAIM REVIEW PROCEDURE 24
SECTION 13 INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS 25
SECTION 14 PROHIBITION AGAINST DIVERSION 27
SECTION 15 LIMITATION OF RIGHTS 27
SECTION 16 AMENDMENT TO OR TERMINATION OF THE PLAN AND THE TRUST 27
SECTION 17 ADOPTION OF PLAN BY AFFILIATES 29
SECTION 18 QUALIFICATION AND RETURN OF CONTRIBUTIONS 29
SECTION 19 SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934 30
SECTION 20 INCORPORATION OF SPECIAL LIMITATIONS 30
APPENDIX A LIMITATION ON ALLOCATIONS 1
APPENDIX B TOP-HEAVY PROVISIONS 1
APPENDIX C SPECIAL NONDISCRIMINATION RULES 1
APPENDIX D FROZEN BENEFIT DISTRIBUTION RULES 1
49
SECTION 1
DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include
the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise and the following words and phrases shall, when
used herein, have the meanings set forth below:
1.1 "Account" means a Participant's aggregate balance in the following
accounts, as adjusted pursuant to the Plan as of any given date:
(a) "Salary Deferral Contribution Account" which shall reflect a
Participant's interest in contributions made by a Plan Sponsor under Plan
Section 3. 1.
(b) "Employer Contribution Account" which shall reflect a Participant's
interest in matching contributions made by a Plan Sponsor under Plan
Section 3.2.
(c) "Stock Match Account" which shall reflect a Participant's interest in
contributions made by a Plan Sponsor under Plan Section 3.3.
(d) "After-Tax Contribution Account" which shall reflect a Participant's
interest in after-tax contributions previously made by a Participant to the
Fund or transferred to the Plan in a trust-to-trust transfer.
(e) "Rollover Account" which shall reflect a Participant's interest in
Rollover Amounts.
The Plan Administrator shall also maintain such additional subaccounts as
it determines necessary or desirable to reflect trust-to-trust transfers
(other than Rollover Amounts), including, but not limited to, the mergers
of other tax-qualified retirement plans with and into the Plan. In
addition, the Plan Administrator may allocate the interest of a Participant
in any funds transferred to the Plan in any trust-to-trust transfer (other
than Rollover Amounts) among the above accounts as the Plan Administrator
determines best reflects the interest of the Participant.
1.2 "Affiliate" means (a) any corporation which is a member of the same
controlled group of corporations (within the meaning of Code Section
414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or
not incorporated) under common control (within the meaning of Code Section
414(c)) with a Plan Sponsor, (c) any other corporation, partnership or
other organization which is a member of an affiliated service group (within
the meaning of Code Section 414(m)) with a Plan Sponsor, and (d) any other
entity required to be aggregated with a Plan Sponsor pursuant to
regulations under Code Section 414(o). Notwithstanding the foregoing, for
purposes of applying the limitations set forth in Appendix A and for
purposes of determining Annual Compensation under Appendix A, the
references to Code Sections 414(b) and (c) above shall be as modified by
Code Section 415(h).
50
1.3 "Annual Compensation" means wages within the meaning of Code Section
3401(a) (for purposes of income tax withholding at the source) and all
other payments of compensation to an Employee by a Plan Sponsor and
Affiliates (in the course of the entity's trade or business) during a Plan
Year for which the Plan Sponsor or Affiliate, as applicable, is required to
furnish the Employee a written statement as required to be reported under
Code Sections 6041(d), 6051(a)(3) and 6052 (but 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, such as the exception
for agricultural labor in Code Section 3401(a)(2)). Annual Compensation in
excess of the Annual Compensation Limit shall be disregarded for all
purposes under the Plan except for purposes of determining who are Highly
Compensated Employees. Notwithstanding the above, Annual Compensation
shall be determined as follows:
(a) (1) for purposes of determining, with respect to each Plan Sponsor,
the amount of contributions made by or on behalf of an Employee under Plan
Section 3 and allocations under Plan Section 4, and
(2) for purposes of applying the provisions of Appendix C hereto for such
Plan Years as the Secretary of the Treasury may allow, Annual Compensation
shall only include amounts received for the portion of the Plan Year during
which the Employee was a Participant;
(b) for all purposes under the Plan, Annual Compensation shall not include
reimbursements or other expense allowances, cash and noncash fringe
benefits, moving expense allowances, deferred compensation, and welfare
benefits;
(c) in determining the amount of contributions under Plan Section 3 and
allocations under Plan Section 4 made by or on behalf of an Employee,
Annual Compensation shall not include bonus compensation and amounts
realized from the exercise of non-qualified stock options or when
restricted stock (or property) held by an employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(d) (1) for all purposes under the Plan, except as provided in Subsection
(d)(2) of this Section, Annual Compensation shall include any amount which
would have been paid during a Plan Year, but was contributed by a Plan
Sponsor on behalf of an Employee pursuant to a salary reduction agreement
which is not includable in the gross income of the Employee under Section
125, 402(g)(3) or 457 of the Code; and
(2) effective until December 31, 1997, for purposes of
applying the annual addition limits in Appendix A, Annual
Compensation shall not include the amounts described in
Subsection (d)(1); and
(e) Notwithstanding the provisions of Subsection (c), if for any Plan Year
the compensation percentage for Highly Compensated Employees exceeds by
more than a de minimis amount the compensation percentage for Participants
who are not Highly Compensated Employees, then the items of Annual
Compensation described in Subsection (c) above shall be included as part of
Annual Compensation for purposes of determining Plan Sponsor contributions
made to Stock Match Accounts.
51
1.4 "Annual Compensation Limit" means $150,000, which amount may be
adjusted in subsequent Plan Years based on changes in the cost of living as
announced by the Secretary of the Treasury. If a determination period
consists of fewer than twelve months, the Annual Compensation Limit shall
be multiplied by a fraction, the numerator of which is the number of months
in the determination period and the denominator of which is twelve.
1.5 "Beneficiary" means the person or trust that a Participant designated
most recently in writing to the Plan Administrator; provided, however, that
if the Participant has failed to make a designation, no person designated
is alive, no trust has been established, or no successor Beneficiary has
been designated who is alive, the term "Beneficiary" means (a) the
Participant's spouse or (b) if no spouse is alive, the deceased
Participant's estate. Notwithstanding the preceding sentence, the spouse
of a married Participant shall be his Beneficiary unless that spouse has
consented in writing to the designation by the Participant of some other
person or trust and the spouse's consent acknowledges the effect of the
designation and is witnessed by a notary public or a Plan representative.
A Participant may change his designation at any time. However, a
Participant may not change his designation without further consent of his
spouse under the terms of the preceding sentence unless the spouse's
consent permits designation of another person or trust without further
spousal consent and acknowledges that the spouse has the right to limit
consent to a specific beneficiary and that the spouse voluntarily
relinquishes this right. Notwithstanding the above, the spouse's consent
shall not be required if the Participant establishes to the satisfaction of
the Plan Administrator that the spouse cannot be located, if the
Participant has a court order indicating that he is legally separated or
has been abandoned (within the meaning of local law) unless a "qualified
domestic relations order" (as defined in Code Section 414(p)) provides
otherwise, or if there are other circumstances as the Secretary of the
Treasury prescribes. If the spouse is legally incompetent to give consent,
consent by the spouse's legal guardian shall be deemed to be consent by the
spouse. If, subsequent to the death of a Participant, the Participant's
Beneficiary dies while entitled to receive benefits under the Plan, the
successor Beneficiary, if any, or the Beneficiary listed under Subsection
(a) or, if no spouse is alive, Subsection (b) shall be the Beneficiary.
1.6 "Board of Directors" means the Board of Directors of the Primary
Sponsor.
1.7 "Break in Service" means the failure of an Employee, in connection
with a Termination of Employment, to complete a twelve-consecutive-month
period beginning on a Severance Date or anniversary thereof during which
the Employee fails to perform an Hour of Service. Notwithstanding the
foregoing, the absence from employment at anytime during a Plan Year by
reason of service in the armed forces of the United States shall not cause
a Break in Service during a Plan Year if such Employee is reemployed by the
Plan Sponsor within four months after his discharge or release from such
service in the armed forces.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Deferral Amount" means a contribution of a Plan Sponsor on behalf of
a Participant pursuant to Plan Section 3.1.
52
1.10 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.11 "Disability" means a disability of a Participant which, in the opinion
of the Plan Administrator, causes a Participant to be totally and
permanently disabled due to sickness or injury so as to be completely
unable to perform any and every duty pertaining to his occupation from a
cause other than as specified below:
(a) excessive and habitual use by the Participant of drugs,
intoxicants or narcotics;
(b) injury or disease sustained by the Participant while
willfully and illegally participating in fights, riots, civil
insurrections or while committing a felony;
(c) injury or disease sustained by the Participant while serving
in any armed forces;
(d) injury or disease sustained by the Participant diagnosed or
discovered subsequent to the date of his termination of employment;
(e) injury or disease sustained by the Participant while working
for anyone other than the Plan Sponsor or any Affiliate and arising
out of such employment; and
(f) injury or disease sustained by the Participant as a result
of an act of war, whether or not such act arises from a formally
declared state of war.
The determination of whether or not a Disability exists shall be determined
by the Plan Administrator and shall be substantiated by competent medical
evidence.
1.12 "Distributee" means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee under
a qualified domestic relations order (as defined in Code Section 414(p)),
are Distributees with regard to the interest of the spouse or former
spouse.
1.13 "Elective Deferrals" means, with respect to any taxable year of the
Participant, the sum of
(a) any Deferral Amounts;
(b) any contributions made by or on behalf of a Participant under any
other qualified cash or deferred arrangement as defined in Code Section
401(k), whether or not maintained by a Plan Sponsor, to the extent such
contributions are not or would not, but for Code Section 402(g)(1), be
included in the Participant's gross income for the taxable year; and
(c) any other contributions made by or on behalf of a Participant
pursuant to Code Section 402(g)(3).
53
1.14 "Eligibility Service" means the completion of a twelve-consecutive-
month period beginning on the date on which the Employee first performs an
Hour of Service upon his employment or reemployment or any anniversary
thereof without reaching a Severance Date; provided, however, if an
Employee quits, retires or is discharged and then performs an Hour of
Service within twelve months of his Severance Date, then such period of
severance shall be taken into account in calculating Eligibility Service.
1.15 "Eligible Employee" means any Employee of a Plan Sponsor other than an
Employee who is (a) covered by a collective bargaining agreement between a
union and a Plan Sponsor, provided that retirement benefits were the
subject of good faith bargaining, unless the collective bargaining
agreement provides for participation in the Plan, (b) a leased employee
within the meaning of Code Section 414(n)(2), (c) deemed to be an Employee
of a Plan Sponsor pursuant to regulations under Code Section 414(o), or (d)
a non-resident alien. In addition, no person who is initially classified
by a Plan Sponsor as an independent contractor for federal income tax
purposes shall be regarded as an Eligible Employee for that period,
regardless of any subsequent determination that any such person should have
been characterized as a common law employee of the Plan Sponsor for the
period in question.
1.16 "Eligible Retirement Plan" means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code Section
403(a) or a qualified trust described in Code Section 401(a) that accepts
the Distributee's Eligible Rollover Distribution. However, in the case of
an Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual
retirement annuity.
1.17 "Eligible Rollover Distribution" means any distribution of all or any
portion of the Distributee's Account, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code Section
401(a)(9); the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); and, effective for
distributions made after December 31, 1999, any distribution made under
Section 6.1 of the Plan.
1.18 "Employee" means any person who is (a) a common law employee of a Plan
Sponsor or an Affiliate, (b) a leased employee within the meaning of Code
Section 414(n)(2) with respect to a Plan Sponsor, or (c) deemed to be an
employee of a Plan Sponsor pursuant to regulations under Code Section
414(o).
1.19 "Entry Date" means the first day of each payroll period.
1.20 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
54
1.21 "Fiduciary" means each Named Fiduciary and any other person who
exercises or has any discretionary authority or control regarding
management or administration of the Plan, any other person who renders
investment advice for a fee or has any authority or responsibility to do so
with respect to any assets of the Plan, or any other person who exercises
or has any authority or control respecting management or disposition of
assets of the Plan.
1.22 "Fund" means the amount at any given time of cash and other property
held by the Trustee pursuant to the Plan.
1.23 "Highly Compensated Employee" means, with respect to a Plan Year, each
Employee who:
(a) was at any time during the Plan Year or the immediately
preceding Plan Year an owner of more than five percent (5%) of the
outstanding stock of a Plan Sponsor or Affiliate or more than five
percent (5%) of the total combined voting power of all stock of a Plan
Sponsor or Affiliate;
(b) received Annual Compensation in excess of $80,000 (for the
Plan Year beginning in 1997) during the immediately preceding Plan
Year; or
(c) is a former Employee who met the requirements of Subsection
(a)(1) or (a)(2) at the time the former Employee separated from
service with the Plan Sponsor or an Affiliate or at any time after the
former Employee attained age 55.
1.24 "Hour of Service" means:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for a Plan Sponsor or any Affiliate
during the applicable computation period, and such hours shall be
credited to the computation period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to payment,
by a Plan Sponsor or any Affiliate on account of a period of time
during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence;
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by a Plan Sponsor or any
Affiliate, and such hours shall be credited to the computation period
or periods to which the award or agreement for back pay pertains
rather than to the computation period in which the award, agreement
or payment is made; provided, that the crediting of Hours of
Service for back pay awarded or agreed to with respect to periods
described in Subsection (b) of this Section shall be subject to the
limitations set forth in Subsection (f);
55
(d) Solely for purposes of determining whether a Break in Service has
occurred, each hour during any period that the Employee is absent from work
(1) by reason of the pregnancy of the Employee, (2) by reason of the birth
of a child of the Employee, (3) by reason of the placement of a child with
the Employee in connection with the adoption of the child by the Employee,
or (4) for purposes of caring for such child for a period immediately
following its birth or placement. The hours described in this Subsection
(d) shall be credited (A) only in the computation period in which the
absence from work begins, if the Employee would be prevented from incurring
a Break in Service in that year solely because of that credit, or (B), in
any other case, in the next following computation period;
(e) Without duplication of the Hours of Service counted pursuant to
Subsection (d) hereof and solely for such purposes as required pursuant to
the Family and Medical Leave Act of 1993 and the regulations thereunder
(the "Act"), each hour (as determined pursuant to the Act) for which an
Employee is granted leave under the Act (1) for the birth of a child, (2)
for placement with the Employee of a child for adoption or foster care, (3)
to care for the Employee's spouse, child or parent with a serious health
condition, or (4) for a serious health condition that makes the Employee
unable to perform the functions of the Employee's job;
(f) The Plan Administrator shall credit Hours of Service in
accordance with the provisions of Section 2530.200b-2(b) and (c) of
the U.S. Department of Labor Regulations or such other federal
regulations as may from time to time be applicable and determine Hours
of Service from the employment records of a Plan Sponsor or in any other
manner consistent with regulations promulgated by the Secretary of
Labor, and shall construe any ambiguities in favor of crediting
Employees with Hours of Service. Notwithstanding any other provision
of this Section, in no event shall an Employee be credited with more
than 501 Hours of Service during any single continuous period during
which he performs no duties for the Plan Sponsor or Affiliate; and
(g) In the event that a Plan Sponsor or an Affiliate acquires
substantially all of the assets of another corporation or entity or a
controlling interest of the stock of another corporation or merges with
another corporation or entity and is the surviving entity, then service of
an Employee who was employed by the prior corporation or entity and who is
employed by the Plan Sponsor or an Affiliate at the time of the acquisition
or merger shall be counted in the manner provided, with the consent of the
Primary Sponsor, in resolutions adopted by the Plan Sponsor which
authorizes the counting of such service.
1.25 "Individual Fund" means individual subfunds of the Fund as may be
established by the Plan Administrator from time to time for the investment
of the Fund.
1.26 "Investment Committee" means a committee, which may be established to
direct the Trustee with respect to investments of the Fund.
1.27 "Investment Manager" means a Fiduciary, other than the Trustee, the
Plan Administrator, or a Plan Sponsor, who may be appointed by the Primary
Sponsor:
(a) who has the power to manage, acquire, or dispose of any assets
of the Fund or a portion thereof; and
56
(b) who
(1) is registered as an investment adviser under the Investment Advisers
Act of 1940;
(2) is a bank as defined in that Act; or
(3) is an insurance company qualified to perform services described in
Subsection (a) above under the laws of more than one state; and
(c) who has acknowledged in writing that he is a Fiduciary with respect to
the Plan.
1.28 "Named Fiduciary" means only the following:
(a) the Plan Administrator;
(b) the Trustee;
(c) the Investment Committee; and
(d) the Investment Manager.
1.29 "Normal Retirement Age" means age 65.
1.30 "Participant" means any Employee or former Employee who has become a
participant in the Plan for so long as his Account has not been fully
distributed pursuant to the Plan.
1.31 "Plan Administrator" means the organization or person designated to
administer the Plan by the Primary Sponsor and, in lieu of any such
designation, means the Primary Sponsor.
1.32 "Plan Sponsor" means individually the Primary Sponsor and any
Affiliate or other entity which has adopted the Plan and Trust; provided,
however, if the Plan is adopted on behalf of Employees of one or more, but
less than all, divisions or facilities of any Affiliate, then the term
"Plan Sponsor", as applied to that Affiliate, shall only apply to the
divisions or facilities on behalf of whose Employees the Plan has been
adopted.
1.33 "Plan Year" means the calendar year.
1.34 "Primary Sponsor" means Tyson Foods, Inc. and each successor thereto.
1.35 "Retirement Date" means the date on which the Participant
(a) experiences a termination of employment on or after attaining Normal
Retirement Age, or (b) becomes subject to a Disability.
1.36 "Rollover Amount" means any amount transferred to the Fund by a
Participant, which amount qualifies as an eligible rollover distribution
under Code Section 402(c)(4), or for rollover treatment under Code Sections
403(a)(4) or 408(d)(3)(A)(ii), and any regulations issued thereunder.
57
1.37 "Severance Date" means the earlier of (a) the date on which an
Employee quits, is discharged, retires or dies, and (b) the first
anniversary of the first date of a period in which an Employee remains
absent from work (with or without pay) with the Plan Sponsor or any
Affiliate for any reason. Notwithstanding the foregoing, the Severance
Date of an Employee who is absent from work beyond the first anniversary of
the first date of absence (1) by reason of the pregnancy of the Employee,
(2) by reason of the birth of a child of the Employee, (3) by reason of the
placement of a child with the Employee, or (4) for purposes of caring for
the child for a period immediately following its birth or placement, means
the second anniversary of the first date of absence from work. The Plan
Administrator may require an Employee to provide to it timely information
to establish the reason for any such absence hereunder and the number of
days for which there was such an absence.
1.38 "Termination of Employment" means the termination of employment of an
Employee from all Plan Sponsors and Affiliates for any reason other than
death or attainment of a Retirement Date. Any absence from active
employment of the Plan Sponsor and Affiliates by reason of an approved
leave of absence shall not be deemed for any purpose under the Plan to be a
Termination of Employment. Transfer from an Employee from one Plan Sponsor
to another Plan Sponsor or to an Affiliate shall not be deemed for any
purpose under the Plan to be a Termination of Employment. In addition,
transfer of an Employee to another employer in connection with a corporate
transaction involving a sale of assets, merger or sale of stock, shall not
be deemed to be a Termination of Employment, for purposes of the timing of
distributions under Plan Section 7.1, if the employer to which such
Employee is transferred agrees with the Plan Sponsor to accept a transfer
of assets from the Plan to its tax-qualified plan in a trust-to-trust
transfer meeting the requirements of Code Section 414(l). If the employer
to which such Employee is transferred does not agree to accept a transfer
of assets from the Plan to its tax-qualified Plan, Plan Section 7.5 is
applicable in the event that such Termination of Employment is not a
distributable event under Code Section 401(k)(10)(A).
1.39 "Trust" means the trust established under an agreement between the
Primary Sponsor and the Trustee to hold the Fund or any successor
agreement.
1.40 "Trustee" means the trustee under the Trust.
1.41 "Valuation Date" means each regular business day.
SECTION 2
ELIGIBILITY
2.1 Each Eligible Employee shall become a Participant as of the Entry Date
coinciding with or next following the date he completes his Eligibility
Service.
2.2 Except as provided in Section 2.4, each former Participant who is
reemployed by a Plan Sponsor shall become a Participant as of the date of
his reemployment as an Eligible Employee.
58
2.3 Except as provided in Section 2.4, each former Employee who completes
his Eligibility Service but terminates employment with a Plan Sponsor
before becoming a Participant shall become a Participant as of the latest
of the date he (a) is reemployed, (b) would have become a Participant if he
had not incurred a termination of employment, or (c) becomes an Eligible
Employee.
2.4 If a former Employee incurs a Break in Service, he shall become a
Participant as of the Entry Date coinciding with or next following the date
he completes a period of Eligibility Service following the date of his
reemployment, regardless of whether the former Employee previously was a
Participant.
2.5 Effective January 1, 2000, solely for the purpose of contributing
Deferral Amounts to the Plan, an Eligible Employee who has not yet
completed his Eligibility Service may become a Participant as of the first
day of the month following the completion of two full calendar months of
service.
2.6 Solely for the purpose of contributing a Rollover Amount to the Plan,
an Eligible Employee who has not yet become a Participant pursuant to any
other provision of this Section 2 shall become a Participant as of the date
on which the Rollover Amount is contributed to the Plan only with respect
to that Rollover Amount.
SECTION 3
CONTRIBUTIONS
3.1 (a) Deferral Amounts. The Plan Sponsor shall make a contribution to
the Fund on behalf of each Participant who is an Eligible Employee and has
elected to defer a portion of Annual Compensation otherwise payable to him
for the Plan Year and to have such portion contributed to the Fund. The
election must be made before the Annual Compensation is payable and may
only be made pursuant to an agreement between the Participant and the Plan
Sponsor which shall be in such form and subject to such rules and
limitations as the Plan Administrator may prescribe and shall specify the
percentage of Annual Compensation that the Participant desires to defer and
to have contributed to the Fund. Once a Participant has made an election
for a Plan Year, the Participant may revoke or modify his election to
increase or reduce the rate of future deferrals, as provided in the
administrative procedures provided by the Plan Administrator. The
contribution made by a Plan Sponsor on behalf of a Participant under this
Section 3.1 shall be in an amount equal to the amount specified in the
Participant's deferral agreement, but not less than two percent (2%) and
not greater than fifteen percent (15%) of the Participant's Annual
Compensation. Pursuant to Section 4 of Appendix C, the Plan Administrator
may restrict the amount which Highly Compensated Employees, or any subgroup
thereof, may defer under this Section 3.1.
(b) Limits of Deferral Amounts. Elective Deferrals shall in no event
exceed $10,000 (for 1999) in any one taxable year of the Participant, which
amount shall be adjusted for changes in the cost of living as provided by
the Secretary of the Treasury. In the event the amount of Elective
Deferrals exceeds $10,000 (for 1999) as adjusted, in any one taxable year
then, (1) not later than the immediately following March 1, the Participant
may designate to the Plan the portion of the Participant's Deferral Amount
59
which consists of excess Elective Deferrals, and (2) not later than the
immediately following April 15, the Plan may distribute the amount
designated to it under Paragraph (1) above, as adjusted to reflect income,
gain, or loss attributable to it through the end of the Plan Year, and
reduced by any "Excess Deferral Amounts," as defined in Appendix C hereto,
previously distributed or recharacterized with respect to the Participant
for the Plan Year beginning with or within that taxable year. The payment
of the excess Elective Deferrals, as adjusted and reduced, from the Plan
shall be made to the Participant without regard to any other provision in
the Plan. In the event that a Participant's Elective Deferrals exceed
$10,000, as adjusted, in any one taxable year under the Plan and other
plans of the Plan Sponsor and its Affiliates, the Participant shall be
deemed to have designated for distribution under the Plan the amount of
excess Elective Deferrals, as adjusted and reduced, by taking into account
only Elective Deferral amounts under the Plan and other plans of the Plan
Sponsor and its Affiliates.
3.2 Matching Contributions. The Plan Sponsor shall make contributions to
the Fund with respect to each Plan Year on behalf of each Participant who
is an Eligible Employee and who has completed his Eligibility Service in an
amount equal to (a) one hundred percent (100%) of the Participant's Annual
Compensation deferred by the Participant pursuant to Section 3.1, to the
extent the contribution under Section 3.1 does not exceed three percent
(3%) of his Annual Compensation, and (b) fifty percent (50%) of the
Participant's Annual Compensation deferred by the Participant pursuant to
Section 3.1, to the extent the contribution under Section 3.1 exceeds three
percent (3%) of his Annual Compensation but does not exceed five percent
(5%) of his Annual Compensation.
3.3 Stock Match Contributions. The Plan Sponsor proposes to make
contributions to the Fund on behalf of those Participants who are entitled
to matching contributions pursuant to the terms of Section 4.1(d) of the
"Tyson Foods, Inc. Employee Stock Purchase Plan" (or any successor
provisions) (the "Stock Match Provisions") in the amounts and at such times
as required thereby. Effective April 1, 1998, any contributions mistakenly
made pursuant to this Section 3.3 on behalf of a Participant who is a
Highly Compensated Employee shall be returned to the Plan Sponsor;
provided, such amount is returned no later than one year after the date of
its contribution.
3.4 Rollover Contributions. Any Eligible Employee may, with the consent
of the Plan Administrator and subject to such rules and conditions as the
Plan Administrator may prescribe, transfer a Rollover Amount to the Fund;
provided, however, that the Plan Administrator shall not administer this
provision in a manner which is discriminatory in favor of Highly
Compensated Employees.
3.5 Forfeitures. Forfeitures contemplated by Section 13.5 shall be used
to reduce Plan expenses and not to increase benefits.
3.6 Form of Contributions. Contributions may be made only in cash or
other property which is acceptable to the Trustee. In no event will the
sum of contributions under Sections 3.1, 3.2 and 3.3 exceed the deductible
limits under Code Section 404.
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3.7 Contributions Related to Military Service. Effective December 12,
1994, notwithstanding any provision of the Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the
Code.
3.8 Corrective Contributions. Notwithstanding any provision of the Plan
to the contrary, the Plan Sponsor may make corrective distributions or
allocations as required to comply with any program provided pursuant to
Revenue Procedure 98-22 or any successor guidance.
SECTION 4
ALLOCATIONS
4.1 (a) As soon as reasonably practicable following the date of
withholding by the Plan Sponsor, if applicable, and receipt by the Trustee,
Plan Sponsor contributions made on behalf of each Participant under
Sections 3.1 and 3.2, and Rollover Amounts contributed by the Participant,
shall be allocated to the Salary Deferral Contribution Account, Employer
Contribution Account and Rollover Account, respectively, of the Participant
on behalf of whom the contributions were made.
(b) As soon as reasonably practicable after the date indicated
by the Stock Match Provisions, Plan Sponsor contributions made under
Section 3.3 shall be allocated to the Stock Match Account of each
eligible Participant.
4.2 As of each Valuation Date, the Trustee shall allocate the net income
or net loss of each Individual Fund to each Account in the proportion that
the value of the Account as of the Valuation Date bears to the value of all
Accounts invested in that Individual Fund as of the Valuation Date.
SECTION 5
PLAN LOANS
5.1 Subject to the provisions of the Plan and the Trust, each Participant
who is an Employee shall have the right, subject to prior approval by the
Plan Administrator, to borrow from the Fund. In addition, each "party in
interest," as defined in ERISA Section 3(14), who is (a) a Participant but
no longer an Employee, (b) the Beneficiary of a deceased Participant, or
(c) an alternate payee of a Participant pursuant to the provisions of a
"qualified domestic relations order," as defined in Code Section 414(p),
shall also have the right, subject to prior approval by the Plan
Administrator, to borrow from the Fund; provided, however, that loans to
such parties in interest may not discriminate in favor of Highly
Compensated Employees.
5.2 In order to apply for a loan, a borrower must complete and submit to
the Plan Administrator documents or information required by the Plan
Administrator for this purpose.
5.3 Loans shall be available to all eligible borrowers on a reasonably
equivalent basis which may take into account the borrower's
creditworthiness, ability to repay and ability to provide adequate
security. Loans shall not be made available to Highly Compensated
Employees, officers or shareholders of a Plan Sponsor in an amount greater
61
than the amount made available to other borrowers. This provision shall be
deemed to be satisfied if all borrowers have the right to borrow the same
percentage of their interest in the Participant's vested Account,
notwithstanding that the dollar amount of such loans may differ as a result
of differing values of Participants' vested Accounts.
5.4 Each loan shall bear a "reasonable rate of interest" and provide that
the loan be amortized in substantially level payments, made no less
frequently than quarterly, over a specified period of time. A "reasonable
rate of interest" shall be that rate that provides the Plan with a return
commensurate with the interest rates charged by persons in the business of
lending money for loans which would be made under similar circumstances.
5.5 Each loan shall be adequately secured, with the security for the
outstanding balance of all loans to the borrower to consist of one-half (1/2)
of the borrower's interest in the Participant's vested Account, or such
other security as the Plan Administrator deems acceptable. No portion of
the Participant's Salary Deferral Contribution Account shall be used as
security for any loan hereunder unless and until such time as the loan
amount exceeds the value of the borrower's interest in the Participant's
vested amounts in all other Accounts.
5.6 Each loan, when added to the outstanding balance of all other loans to
the borrower from all retirement plans of the Plan Sponsor and its
Affiliates which are qualified under Section 401 of the Code, shall not
exceed the lesser of:
(a) $50,000, reduced by the excess, if any, of
(1) the highest outstanding balance of loans made to the borrower from all
retirement plans qualified under Code Section 401 of the Plan Sponsor and
its Affiliates during the one (1) year period immediately preceding the day
prior to the date on which such loan was made, over
(2) the outstanding balance of loans made to the borrower from all
retirement plans qualified under Code Section 401 of the Plan Sponsor and
its Affiliates on the date on which such loan was made, or
(b) one-half (1/2) of the value of the borrower's interest in the vested
Account attributable to the Participant's Account.
For purposes of this Section, the value of the vested Account attributable
to a Participant's Account shall be established as of the latest preceding
Valuation Date, or any later date on which an available valuation was made,
and shall be adjusted for any distributions or contributions made through
the date of the origination of the loan.
5.7 Each loan, by its terms, shall be repaid within five (5) years.
5.8 Each loan shall be made in an amount of no less than $1,000.
5.9 A borrower is permitted to have only two loans existing under this
Plan at any one time.
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5.10 The entire unpaid principal sum and accrued interest shall, at the
option of the Plan Administrator, become due and payable if (a) a borrower
fails to make any loan payment when due (including the expiration of any
applicable grace period), (b) a borrower ceases to be a "party in
interest", as defined in ERISA Section 3(14), (c) the vested Account held
as security under the Plan for the borrower will, as a result of an
impending distribution or withdrawal, be reduced to an amount less than the
amount of all unpaid principal and accrued interest then outstanding under
the loan, or (d) a borrower makes any untrue representations or warranties
in connection with the obtaining of the loan. In that event, the Plan
Administrator may take such steps as it deems necessary to preserve the
assets of the Plan, including, but not limited to, the following: (1)
direct the Trustee to deduct the unpaid principal sum, accrued interest,
and any other applicable charge under the note evidencing the loan from any
benefits that may become payable out of the Plan to the borrower, (2)
direct the Plan Sponsor to deduct and transfer to the Trustee the unpaid
principal balance, accrued interest, and any other applicable charge under
the note evidencing the loan from any amounts owed by the Plan Sponsor to
the borrower, or (3) liquidate the security given by the borrower, other
than amounts attributable to a Participant's Salary Deferral Contribution
Account, and deduct from the proceeds the unpaid principal balance, accrued
interest, and any other applicable charge under the note evidencing the
loan. If any part of the indebtedness under the note evidencing the loan
is collected by law or through an attorney, the borrower shall be liable
for attorneys' fees in an amount equal to ten percent of the amount then
due and all costs of collection. Notwithstanding the foregoing, a loan may
be satisfied upon a Participant's termination of employment by distributing
the note evidencing the debt as part of an Eligible Rollover Distribution;
provided, however, that the trustee, custodian or administrator for the
Eligible Retirement Plan indicates its willingness to accept such property.
5.11 Each loan shall be made only in accordance with regulations and
rulings of the Internal Revenue Service and the Department of Labor. The
Plan Administrator shall be authorized to administer the loan program of
this Section and shall act in his sole discretion to ascertain whether the
requirements of such regulations and rulings and this Section have been
met. Any loan shall be funded from a Participant's Account pursuant to
uniform procedures prescribed by the Plan Administrator.
5.12 Effective September 1, 1999, Spousal consent for a loan shall be
obtained if, at the time any portion of the Participant's Account is to be
used as security for any such loan, the Participant has elected an annuity
form of payment under Appendix D. Notwithstanding the foregoing, spousal
consent need not be obtained if, at the time the Participant's Account is
used as security for any such loan, the Participant's Account has a value
of $5,000 or less.
SECTION 6
IN-SERVICE WITHDRAWALS
6.1 Hardship Distributions.
(a) The Trustee shall, upon the direction of the Plan
Administrator, withdraw all or a portion of a Participant's Salary
Deferral Contribution Account consisting of Deferral Amounts (but not
earnings thereon credited after December 31, 1988) plus, to the extent
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applicable, that portion of the Employer Contribution Account (as
described in Appendix D) attributable to Thrift Plan (as defined in
Appendix D) participation and that portion of the Rollover Account
attributable to Thrift Plan participation prior to the time such
account(s) are otherwise distributable in accordance with the other
provisions of the Plan; provided, however, that any such withdrawal
shall be made only if the Participant is an Employee and demonstrates
that he is suffering from "hardship" as determined herein. For
purposes of this Section, a withdrawal will be deemed to be an account
of hardship if the withdrawal is on account of:
(1) expenses for medical care described in Section 213(d)
of the Code incurred by the Participant, his spouse, or any
dependents of the Participant (as defined in Section 152 of the
Code) or necessary for these persons to obtain medical care
described in Code Section 213(d);
(2) purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) payment of tuition and related educational fees for the
next twelve (12) months of post-secondary education for the
Participant, his spouse, children, or dependents;
(4) 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
(5) any other contingency determined by the Internal
Revenue Service to constitute an "immediate and heavy financial
need" within the meaning of Treasury Regulations Section 1.401(k)-
l(d).
(b) In addition to the requirements set forth in Subsection
6.1(a) above, any withdrawal pursuant to Section 6.1 shall not be in
excess of the amount necessary to satisfy the need determined under
Section 6.1 and shall also be subject to the requirements of this
Subsection (b).
(1) The Participant shall first obtain all withdrawals,
other than hardship withdrawals, and all nontaxable loans
currently available under all plans maintained by the Plan
Sponsor;
(2) the Plan Sponsor shall not permit Elective Deferrals or
after-tax employee contributions to be made to the Plan or any
other plan maintained by the Plan Sponsor, for a period of twelve
(12) months after the Participant receives the withdrawal
pursuant to this Section; and
(3) the Plan Sponsor shall not permit Elective Deferrals to
be made to the Plan or any other plan maintained by the Plan
Sponsor for the Participant's taxable year immediately following
the taxable year of the hardship withdrawal in excess of the
limit under Section 3.1 (b) for the taxable year, less the amount
of the Elective Deferrals made to the Plan or any other plan
maintained by the Plan Sponsor for the taxable year in which the
withdrawal under this Section occurs.
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Any determination of the existence of hardship and the amount to be
withdrawn on account thereof shall be made by the Plan Administrator
(or such other person as may be required to make such decisions) in
accordance with the foregoing rules as applied in a uniform and
nondiscriminatory manner; provided that, unless the Participant
requests otherwise, any such withdrawal shall include the amount
necessary to pay any federal, state and local income taxes and
penalties reasonably anticipated to result from the withdrawal.
(c) Any hardship withdrawal amounts originally credited to a
Participant under the Culinary Plan (as defined in Appendix D) or the
Prior Retirement Account (as described in Appendix D) under the Hudson
Plan (as defined in Appendix D) will be distributed only with the
consent of the Participant's spouse.
6.2 Age 59 1/2. Effective April 1, 1998, a Member who has attained at
least age 59 1/2 may elect to receive a distribution of all or any portion of
his Account; provided, however, any such amounts to be withdrawn originally
credited to a Participant under the Culinary Plan or the Prior Retirement
Account under the Hudson Plan will be distributed only with the consent of
the Participant's spouse.
6.3 After-Tax and Rollover Amounts. Effective April 1, 1998, a
Member may elect to receive a distribution of all or any portion of his
After-Tax Contribution Account or Rollover Account; provided, however, any
such amounts to be withdrawn originally credited to a Participant under the
Culinary Plan or the Prior Retirement Account under the Hudson Plan will be
distributed only with the consent of the Participant's spouse.
6.4 Disability. A Member who becomes subject to a Disability may
elect to receive a distribution of all or any portion of his Account;
provided, however, any such amounts to be withdrawn originally credited to
a Participant under the Culinary Plan or the Prior Retirement Account under
the Hudson Plan will be distributed only with the consent of the
Participant's spouse.
6.5 Corporate Transactions. Elective Deferrals may be withdrawn by a
Participant in any one of the following events: (a) the sale or other
disposition by a corporation of at least eighty-five percent (85%) of all
of the assets of the trade or business of the Plan Sponsor; (b) the sale or
other disposition by a corporation of its interests in a subsidiary to an
unrelated entity but only with respect to a Participant who continues in
the employ of the subsidiary; or (c) the termination of the Plan without
the establishment or maintenance of a successor defined contribution plan
within one year of the Plan termination date; all as contemplated by Code
Section 401(k)(10).
6.6 General In-Service Distribution Rules. Any withdrawal under this
Section shall be made in a lump sum and all such withdrawals shall be made
only in accordance with such other rules, policies, procedures,
restrictions and conditions as the Plan Administrator may from time to time
adopt.
65
SECTION 7
PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT
7.1 (a) In the event of Termination of Employment, a Participant whose
vested Account exceeds $5,000, effective April 1, 1998, may request that
payment of his vested Account be made. Payment of a Participant's Account
shall be in the form elected by such Participant under Section 7.1(b). All
payments will be made (or commence) as soon as administratively feasible
following a Participant's request. No distribution of the Participant's
Account will be made without his request prior to the first to occur of the
following: (1) April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2, or (2) becoming subject to a
Disability.
(b) Payment of a Participant's Account may be made in the form of:
(1) a lump sum payment in cash of the entire Account, except in kind to
the extent of amounts allocated to the Stock Match Account;
(2) payment in annual installments over a period to be determined by the
Participant or his Beneficiary but not to exceed the life expectancy of the
Participant or the joint lives of the Participant and his Beneficiary; or
(3) any combination of the foregoing.
In addition, to the extent applicable, a Participant or
Beneficiary may elect such additional forms of distribution with
respect to certain portions of the Participant's Account in the
manner, and to the extent, provided in Appendix D.
(c) In the event of Termination of Employment, a Participant whose vested
Account is $5,000, effective April 1, 1998, or less shall be paid in a lump
sum payment in cash as soon as administratively feasible after the
Participant's Termination of Employment.
(d) If a Participant who has a Termination of Employment has not
previously received a distribution of his Account under Subsection (a) or
(b), payment of his Account will be made (or commence) in any event as of
April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2 or the date the Participant becomes subject to
a Disability, whichever is the first to occur.
7.2 A Participant shall be fully vested in all portions of his Account at
all times.
7.3 If a Plan amendment directly or indirectly changes the vesting
schedule, the vesting percentage for each Participant in his Account
accumulated to the date when the amendment is adopted shall not be reduced
as a result of the amendment. In addition, any Participant with at least
three (3) years of vesting service may irrevocably elect to remain under
the pre-amendment vesting schedule with respect to all of his benefits
accrued both before and after the amendment.
7.4 If a Participant has a Termination of Employment and is subsequently
reemployed by a Plan Sponsor or an Affiliate prior to receiving a
distribution of his Account under the Plan, such Participant shall not be
entitled to a distribution under this Section while he is an Employee.
66
7.5 If a Participant has a Termination of Employment which is not a
distributable event as provided under Code Section 401(k)(10)(A), the Plan
Sponsor is not required to distribute such Participant's Account to the
Participant prior to the time for distribution as otherwise provided under
the Plan.
SECTION 8
PAYMENT OF BENEFITS ON RETIREMENT
8.1 A retired Participant whose Account exceeds $5,000, effective
April 1, 1998, shall be paid (or payment shall commence), with the consent
of the Participant, as soon as administratively feasible following the
Participant's Retirement Date. If a Participant who has retired has not
previously received a distribution of his Account under this Section,
payment of his Account will be made (or commence) in any event as of April
1 of the calendar year following the calendar year in which the Participant
attains age 70 1/2 or the date the Participant becomes subject to a
Disability, whichever is the first to occur
8.2 Payment of a Participant's Account pursuant to this Section 8 may
be made in one of the forms as described in Section 7.1(b) elected by such
Participant.
8.3 A retired Participant whose Account is $5,000, effective April 1,
1998, or less shall be paid in a lump sum payment as soon as
administratively feasible following the date the Participant attains a
Retirement Date.
SECTION 9
DEATH BENEFITS
If a Participant dies before receiving a distribution of his vested
Account, his Beneficiary shall receive the Participant's vested Account in
any one of the forms described in Section 7.1(b) as soon as
administratively feasible following the death of the Participant or, if the
Beneficiary so elects, at any later date permitted under Section 10.3(b).
If a Participant dies after beginning to receive a distribution of his
vested Account, his Beneficiary shall continue to receive the undistributed
portion of his vested Account in the form selected by the Participant
before his death, except as may be provided in Appendix D.
SECTION 10
GENERAL RULES ON DISTRIBUTIONS
10.1 Except for installment distributions, Accounts shall not be adjusted
for earnings or losses incurred after the Valuation Date with respect to
which the Account is valued for imminent payout purposes. Prior to
distribution of an Account, the Account shall be reduced by the amount
necessary to satisfy the unpaid principal, accrued interest and penalties
on any loan made to the Participant.
10.2 Notwithstanding any provisions of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section 10, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of a distribution pursuant to this
67
Section which is an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover
so long as all Eligible Rollover Distributions to a Distributee for a
calendar year total or are expected to total at least $200 and, in the case
of a Distributee who elects to directly receive a portion of an Eligible
Rollover Distribution and directly roll the balance over to an Eligible
Retirement Plan, the portion that is to be directly rolled over totals at
least $500. If the Eligible Rollover Distribution is one to which Code
Sections 401(a)(11) and 417 do not apply, such Eligible Rollover
Distribution may commence less than thirty (30) days after the notice
required under Treasury Regulations section 1.411(a)-11(c) is given,
provided that:
(a) the Plan Administrator clearly informs the Distributee that the
Distributee has a right to a period of at least thirty (30) days after
receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and
(b) the Distributee, after receiving the notice, affirmatively elects a
distribution.
10.3 Notwithstanding any other provisions of the Plan,
(a) Prior to the death of a Participant, all retirement payments hereunder
shall
(1) be distributed to the Participant not later than the required
beginning date (as defined below) or,
(2) be distributed, commencing not later than the required beginning date
(as defined below) -
(A) in accordance with regulations prescribed by the Secretary of the
Treasury, over the life of the Participant or over the lives of the
Participant and his designated individual Beneficiary, if any, or
(B) in accordance with regulations prescribed by the Secretary of the
Treasury, over a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy of
the Participant and his designated individual Beneficiary, if any.
(b) (1) If -
(A) the distribution of a Participant's retirement payments have begun in
accordance with Subsection (a)(2) of this Section, and
(B) the Participant dies before his entire vested Account has been
distributed to him,
then the remaining portion of his vested Account shall be
distributed at least as rapidly as under the method of
distribution being used under Subsection (a)(2) of this Section
as of the date of his death.
(2) If a Participant dies before the commencement of retirement payments
hereunder, the entire interest of the Participant shall be distributed
within five (5) years after his death.
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(3) If -
(A) any portion of a Participant's vested Account is
payable to or for the benefit of the Participant's
designated individual Beneficiary, if any,
(B) that portion is to be distributed, in accordance
with regulations prescribed by the Secretary of the
Treasury, over the life of the designated individual
Beneficiary or over a period not extending beyond the life
expectancy of the designated individual Beneficiary, and
(C) the distributions begin not later than one (1)
year after the date of the Participant's death or such later
date as the Secretary of the Treasury may by regulations
prescribe,
then, for purposes of Paragraph (2) of this Subsection (b), the
portion referred to in Subparagraph (A) of this Paragraph (3)
shall be treated as distributed on the date on which the
distributions to the designated individual Beneficiary begin.
(4) If the designated individual Beneficiary referred to in Paragraph
(3)(A) of this Subsection (b) is the surviving spouse of the Participant,
then -
(A) the date on which the distributions are required
to begin under Paragraph (3)(C) of this Subsection (b) shall
not be earlier than the date on which the Participant would
have attained age 65, and
(B) if the surviving spouse dies before the
distributions to such spouse begin, this Subsection (b)
shall be applied as if the surviving spouse were the
Participant.
(c) For purposes of this Section, the term "required beginning date" means
April 1 of the calendar year following the later of the calendar year in
which the Participant attains age 70 1/2 or the calendar year in which the
Participant retires, except that in the case of a person described in
Section l(b)(3) of Appendix B the "required beginning date" shall be
April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2. Notwithstanding the foregoing, with
respect to a Participant who attains age 70 1/2 prior to January 1, 1999,
such Participant may elect to receive minimum required distributions as
a form of distribution under the withdrawal provisions of Section 6.2.
(d) Distributions will be made in accordance with the regulations under
Code Section 401(a)(9), including the minimum distribution incidental
benefit requirement of Treas. Reg. Section 1.401(a)(9)-2.
SECTION 11
ADMINISTRATION OF THE PLAN
11.1 Trust Agreement. The Primary Sponsor shall establish a Trust with the
Trustee designated by the Board of Directors for the management of the
Fund, which Trust shall form a part of the Plan and is incorporated herein
by reference.
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11.2 Operation of the Plan Administrator. The Primary Sponsor shall
appoint a Plan Administrator. If an organization is appointed to serve as
the Plan Administrator, then the Plan Administrator may designate in
writing one or more persons who may act on behalf of the Plan
Administrator. If more than one person is so designated with respect to
the same administrative function, a majority of such persons shall
constitute a quorum for the transaction of business and shall have the full
power to act on behalf of the Plan Administrator. The Primary Sponsor
shall have the right to remove the Plan Administrator at any time by notice
in writing. The Plan Administrator may resign at any time by written
notice of resignation to the Trustee and the Primary Sponsor. Upon removal
or resignation of the Plan Administrator, or in the event of the
dissolution of the Plan Administrator, the Primary Sponsor shall appoint a
successor. An organization serving as Plan Administrator shall have the
right to remove any person designated to act on behalf of the Plan
Administrator at any time by notice in writing. Any such designee may
resign at any time by written notice of resignation to the Plan
Administrator. Upon removal or resignation of any such designee, the Plan
Administrator may appoint a successor.
11.3 Fiduciary Responsibility.
(a) The Plan Administrator, as a Named Fiduciary, may allocate its
fiduciary responsibilities among Fiduciaries other than the Trustee,
designated in writing by the Plan Administrator and may designate in
writing persons other than the Trustee to carry out its fiduciary
responsibilities under the Plan. The Plan Administrator may remove any
person designated to carry out its fiduciary responsibilities under the
Plan by notice in writing to such person.
(b) The Plan Administrator and each other Fiduciary may employ persons to
perform services and to render advice with regard to any of the Fiduciary's
responsibilities under the Plan. Charges for all such services performed
and advice rendered may be paid by the Fund to the extent permitted by
ERISA.
(c) Each Plan Sponsor shall indemnify and hold harmless each person
constituting the Plan Administrator or the Investment Committee, except
those individuals who are not a Plan Sponsor or an employee of a Plan
Sponsor, if any, from and against any and all claims, losses, costs,
expenses (including, without limitation, attorney's fees and court costs),
damages, actions or causes of action arising from, on account of or in
connection with the performance by such person of his duties in such
capacity, other than such of the foregoing arising from, on account of or
in connection with the willful neglect or willful misconduct of such
person.
11.4 Duties of the Plan Administrator.
(a) The Plan Administrator shall advise the Trustee with respect to all
payments under the terms of the Plan and shall direct the Trustee in
writing to make such payments from the Fund; provided, however, in no event
shall the Trustee be required to make such payments if the Trustee has
actual knowledge that such payments are contrary to the terms of the Plan
and the Trust.
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(b) The Plan Administrator shall from time to time establish rules, not
contrary to the provisions of the Plan and the Trust, for the
administration of the Plan and the transaction of its business. All
elections and designations under the Plan by a Participant or Beneficiary
shall be made on forms prescribed by the Plan Administrator. The Plan
Administrator shall have discretionary authority to construe the terms of
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan, including, but not limited to,
those concerning eligibility for benefits and it shall not act so as to
discriminate in favor of any person. All determinations of the Plan
Administrator shall be conclusive and binding on all Employees,
Participants, Beneficiaries and Fiduciaries, subject to the provisions of
the Plan and the Trust and subject to applicable law.
(c) The Plan Administrator shall furnish Participants and Beneficiaries
with all disclosures now or hereafter required by ERISA or the Code. The
Plan Administrator shall file, as required, the various reports and
disclosures concerning the Plan and its operations as required by ERISA and
by the Code, and shall be solely responsible for establishing and
maintaining all records of the Plan and the Trust.
(d) The statement of specific duties for a Plan Administrator in this
Section is not in derogation of any other duties which a Plan Administrator
has under the provisions of the Plan or the Trust or under applicable law.
11.5 Investment Manager. The Primary Sponsor may, by action in writing
certified by notice to the Trustee, appoint an Investment Manager. Any
Investment Manager may be removed in the same manner in which appointed,
and in the event of any removal, the Investment Manager shall, as soon as
possible, but in no event more than thirty (30) days after notice of
removal, turn over all assets managed by it to the Trustee or to any
successor Investment Manager appointed, and shall make a full accounting to
the Primary Sponsor with respect to all assets managed by it since its
appointment as an Investment Manager.
11.6 Investment Committee. The Primary Sponsor may, by action in writing
certified by notice to the Trustee, appoint an Investment Committee. The
Primary Sponsor shall have the right to remove any person on the Investment
Committee at any time by notice in writing to such person. A person on the
Investment Committee may resign at any time by written notice of
resignation to the Primary Sponsor. Upon such removal or resignation, or
in the event of the death of a person on the Investment Committee, the
Primary Sponsor may appoint a successor. Until a successor has been
appointed, the remaining persons on the Investment Committee may continue
to act as the Investment Committee.
11.7 Action by a Plan Sponsor. Any action to be taken by a Plan Sponsor
shall be taken by resolution or written direction duly adopted by its board
of directors or appropriate governing body, as the case may be; provided,
however, that by such resolution or written direction, the board of
directors or appropriate governing body, as the case may be, may delegate
to any officer or other appropriate person of a Plan Sponsor the authority
to take any such actions as may be specified in such resolution or written
direction, other than the power to amend, modify or terminate the Plan or
the Trust or to determine the basis of any Plan Sponsor contributions.
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SECTION 12
CLAIM REVIEW PROCEDURE
12.1 If a Participant or Beneficiary is denied a claim for benefits under a
Plan, the Plan Administrator shall provide to the claimant written notice
of the denial within ninety (90) days after the Plan Administrator receives
the claim, unless special circumstances require an extension of time for
processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the
claimant prior to the termination of the initial ninety (90) day period.
In no event shall the extension exceed a period of ninety (90) days from
the end of such initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which
the Plan Administrator expects to render the final decision.
12.2 If the claimant is denied a claim for benefits, the Plan Administrator
shall provide, within the time frame set forth in Plan Section 12.1,
written notice of the denial which shall set forth:
(a) the specific reasons for the denial;
(b) specific references to the pertinent provisions of the Plan on which
the denial is based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why the material or
information is necessary; and
(d) an explanation of the Plan's claim review procedure.
12.3 After receiving written notice of the denial of a claim or that a
domestic relations order is a qualified domestic relations order, a
claimant or his representative may:
(a) request a full and fair review of the denial or determination that a
domestic relations order is a qualified domestic relations order by written
application to the Plan Administrator;
(b) review pertinent documents; and
(c) submit issues and comments in writing to the Plan Administrator.
12.4 If the claimant wishes a review of the decision denying his claim to
benefits under the Plan or if a claimant wishes to appeal a decision that a
domestic relations order is a qualified domestic relations order, the
claimant must deliver the written application to the Plan Administrator
within sixty (60) days after receiving written notice of the denial or
notice that the domestic relations order is a qualified domestic relations
order. Delivery shall be considered effected only upon actual receipt by
the Plan Administrator.
12.5 Upon receiving the written application for review, the Plan
Administrator may schedule a hearing for purposes of reviewing the
claimant's claim, which hearing shall take place not more than thirty (30)
days from the date on which the Plan Administrator received the written
application for review.
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12.6 At least ten (10) days prior to the scheduled hearing, the claimant
and his representative designated in writing by him, if any, shall receive
written notice of the date, time, and place of the scheduled hearing. The
claimant or his representative may request that the hearing be rescheduled
for his convenience on another reasonable date or at another reasonable
time or place.
12.7 All claimants requesting a review of the decision denying their claim
for benefits may employ counsel for purposes of the hearing.
12.8 No later than sixty (60) days following the receipt of the written
application for review, the Plan Administrator shall submit its decision on
the review in writing to the claimant involved and to his representative,
if any; provided, however, a decision on the written application for review
may be extended, in the event special circumstances such as the need to
hold a hearing require an extension of time, to a day no later than one
hundred twenty (120) days after the date of receipt of the written
application for review. The decision shall include specific reasons for
the decision and specific references to the pertinent provisions of the
Plan on which the decision is based.
SECTION 13
INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS
13.1 No benefit which shall be payable under the Plan to any person shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall
be void; and no such benefit shall in any manner be liable for, or subject
to, the debts, contracts, liabilities, engagements or torts of any person,
nor shall it be subject to attachment or legal process for, or against,
such person, and the same shall not be recognized under the Plan, except to
such extent as may be required by law. Notwithstanding the above, this
Section shall not apply to a "qualified domestic relations order" (as
defined in Code Section 414(p)), and benefits may be paid pursuant to the
provisions of such an order. The Plan Administrator shall develop
procedures (in accordance with applicable federal regulations) to determine
whether a domestic relations order is qualified, and, if so, the method and
the procedures for complying therewith. In addition, a distribution to an
"alternate payee" (as defined in Code Section 414(p)) shall be permitted if
such distribution is authorized by a qualified domestic relations order,
even if the affected Participant has not yet separated from service and has
not yet reached the "earliest retirement age" (as defined in Code Section
414(p)).
13.2 Notwithstanding any other provision of the Plan, effective August 5,
1997, the benefit of a Participant shall be subject to legal process and
may be assigned, alienated or attached pursuant to a court judgment or
settlement provided:
(a) such Participant is ordered or required to pay the Plan in accordance
with the following:
(1) a judgment or conviction for a crime involving the Plan;
(2) a civil judgment entered by a court in an action brought in connection
with a violation of part 4 of subtitle B of Title I of ERISA; or
73
(3) a settlement agreement between such Participant and the Secretary of
Labor, in connection with a violation (or alleged violation) of part 4 of
subtitle B of Title I of ERISA by a fiduciary or any other person; and
(b) the judgment, order, decree, or settlement agreement shall expressly
provide for the offset of all or part of the amount ordered or required to
be paid to the Plan against such Participant's benefits under the Plan.
13.3 If any person who shall be entitled to any benefit under the Plan
shall become bankrupt or shall attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge such benefit under the Plan,
then the payment of any such benefit in the event a Participant or
Beneficiary is entitled to payment shall, in the discretion of the Plan
Administrator, cease and terminate and in that event the Trustee shall hold
or apply the same for the benefit of such person, his spouse, children,
other dependents or any of them in such manner and in such proportion as
the Plan Administrator shall determine.
13.4 Whenever any benefit which shall be payable under the Plan is to be
paid to or for the benefit of any person who is then a minor or determined
to be incompetent by qualified medical advice, the Plan Administrator need
not require the appointment of a guardian or custodian, but shall be
authorized to cause the same to be paid over to the person having custody
of such minor or incompetent, or to cause the same to be paid to such minor
or incompetent without the intervention of a guardian or custodian, or to
cause the same to be paid to a legal guardian or custodian of such minor or
incompetent if one has been appointed or to cause the same to be used for
the benefit of such minor or incompetent.
13.5 If the Plan Administrator cannot ascertain the whereabouts of any
Participant to whom a payment is due under the Plan, the Plan Administrator
may direct that the payment and all remaining payments otherwise due to the
Participant be cancelled on the records of the Plan and the amount thereof
applied as a forfeiture in accordance with Section 3.5, except that, in the
event the Participant later notifies the Plan Administrator of his
whereabouts and requests the payments due to him under the Plan, the
forfeited amount shall be restored either from Trust income or by a special
contribution by the Plan Sponsor to the Plan, as determined by the Plan
Administrator, in an amount equal to the payment to be paid to the
Participant.
SECTION 14
PROHIBITION AGAINST DIVERSION
At no time shall any part of the Fund be used for or diverted to
purposes other than the exclusive benefit of the Participants or their
Beneficiaries, subject, however, to the payment of all taxes and
administrative expenses and subject to the provisions of the Plan with
respect to returns of contributions. Expenses incurred in the
administration of the Plan shall be paid from the Trust, to the extent
permitted by ERISA, unless such expenses are paid by a Plan Sponsor;
provided, further, that a Plan Sponsor may be reimbursed by the Fund, to
the extent permitted by ERISA, for Plan expenses originally paid by the
Plan Sponsor.
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SECTION 15
LIMITATION OF RIGHTS
Participation in the Plan shall not give any Employee any right or
claim except to the extent that such right is specifically fixed under the
terms of the Plan. The adoption of the Plan and the Trust by any Plan
Sponsor shall not be construed to give any Employee a right to be continued
in the employ of a Plan Sponsor or as interfering with the right of a Plan
Sponsor to terminate the employment of any Employee at any time.
SECTION 16
AMENDMENT TO OR TERMINATION OF THE
PLAN AND THE TRUST
16.1 The Primary Sponsor reserves the right at any time to modify or amend
or terminate the Plan or the Trust in whole or in part; provided, however,
that the Primary Sponsor shall have no power to modify or amend the Plan in
such manner as would cause or permit any portion of the funds held under a
Plan to be used for, or diverted to, purposes other than for the exclusive
benefit of Participants or their Beneficiaries, or as would cause or permit
any portion of a fund held under the Plan to become the property of a Plan
Sponsor; and provided further, that the duties or liabilities of the
Trustee shall not be increased without its written consent. No such
modifications or amendments shall have the effect of retroactively changing
or depriving Participants or Beneficiaries of rights already accrued under
the Plan. No Plan Sponsor other than the Primary Sponsor shall have the
right to so modify, amend or terminate the Plan or the Trust.
Notwithstanding the foregoing, each Plan Sponsor may terminate its own
participation in the Plan and Trust pursuant to the Plan.
16.2 Each Plan Sponsor other than the Primary Sponsor shall have the right
to terminate its participation in the Plan and Trust by resolution of its
board of directors or other appropriate governing body and notice in
writing to the Primary Sponsor and the Trustee unless such termination
would result in the disqualification of the Plan or the Trust or would
adversely affect the exempt status of the Plan or the Trust as to any other
Plan Sponsor. If contributions by or on behalf of a Plan Sponsor are
completely terminated, the Plan and Trust shall be deemed terminated as to
such Plan Sponsor. Any termination by a Plan Sponsor, shall not be a
termination as to any other Plan Sponsor. The Primary Sponsor may, in its
absolute discretion, terminate the participation of any other Plan Sponsor
at any time.
16.3 (a) If the Plan is terminated by the Primary Sponsor or if
contributions to the Trust should be permanently discontinued, it shall
terminate as to all Plan Sponsors and the Fund shall be used, subject to
the payment of expenses and taxes, for the benefit of Participants and
Beneficiaries, and for no other purposes, and the Account of each affected
Participant shall be fully vested and nonforfeitable, notwithstanding the
provisions of the Section of the Plan which sets forth the vesting
schedule.
(b) In the event of the partial termination of the Plan, each
affected Participant's Account shall be fully vested and
nonforfeitable.
75
16.4 In the event of the termination of the Plan or the Trust with respect
to a Plan Sponsor, the Accounts of the Participants with respect to the
Plan as adopted by such Plan Sponsor shall be distributed in accordance
with the applicable distribution provisions of the Plan pursuant to the
instructions of the Plan Administrator; provided that the Trustee shall not
be required to make any distribution until it receives a copy of an
Internal Revenue Service determination letter to the effect that the
termination does not affect the qualified status of the Plan or the exempt
status of the Trust or, in the event that such letter is applied for and is
not issued, until the Trustee is reasonably satisfied that adequate
provision has been made for the payment of all taxes which may be due and
owing by the Trust.
16.5 In the case of any merger or consolidation of the Plan with, or any
transfer of the assets or liabilities of the Plan to, any other plan
qualified under Code Section 401, the terms of the merger, consolidation or
transfer shall be such that each Participant would receive (in the event of
termination of the Plan or its successor immediately thereafter) a benefit
which is no less than the benefit which the Participant would have received
in the event of termination of the Plan immediately before the merger,
consolidation or transfer.
16.6 Notwithstanding any other provision of the Plan, an amendment to the
Plan -
(a) which eliminates or reduces an early retirement benefit, if any, or
which eliminates or reduces a retirement-type subsidy (as defined in
regulations issued by the Department of the Treasury), if any, or
(b) which eliminates an optional form of benefit
shall not be effective with respect to benefits attributable to service
before the amendment is adopted. In the case of a retirement-type subsidy
described in Subsection (a) above, this Section shall be applicable only to
a Participant who satisfies, either before or after the amendment, the
preamendment conditions for the subsidy.
SECTION 17
ADOPTION OF PLAN BY AFFILIATES
Any corporation or other business entity related to the Primary
Sponsor by function or operation and any Affiliate, if the corporation,
business entity or Affiliate is authorized to do so by written direction
adopted by the Board of Directors, may adopt the Plan and the related Trust
by action of the board of directors or other appropriate governing body of
such corporation, business entity or Affiliate. Any adoption shall be
evidenced by certified copies of the resolutions of the foregoing board of
directors or governing body indicating the adoption and by the execution of
the Trust by the adopting corporation, or business entity or Affiliate.
The resolution shall state and define the effective date of the adoption of
the Plan by the Plan Sponsor and, for the purpose of Code Section 415, the
"limitation year" as to such Plan Sponsor. Notwithstanding the foregoing,
however, if the Plan and Trust as adopted by an Affiliate or other
corporation or business entity under the foregoing provisions shall fail to
receive the initial approval of the Internal Revenue Service as a qualified
Plan and Trust under Code Sections 401(a) and 501(a), any contributions by
the Affiliate or other corporation or business entity after payment of all
76
expenses will be returned to such Plan Sponsor free of any trust, and the
Plan and Trust shall terminate, as to the adopting Affiliate or other
corporation or business entity.
SECTION 18
QUALIFICATION AND RETURN OF CONTRIBUTIONS
18.1 If the Plan and the related Trust fail to receive the initial approval
of the Internal Revenue Service as a qualified plan and trust within one
(1) year after the date of denial of qualification (a) the contribution of
a Plan Sponsor after payment of all expenses will be returned to a Plan
Sponsor free of the Plan and Trust, (b) contributions made by a Participant
shall be returned to the Participant who made the contributions, and (c)
the Plan and Trust shall thereupon terminate.
18.2 All Plan Sponsor contributions to the Plan are contingent upon
deductibility. To the extent permitted by the Code and other applicable
laws and regulations thereunder, upon a Plan Sponsor's request, a
contribution which was made by reason of a mistake of fact or which was
nondeductible under Code Section 404, shall be returned to a Plan Sponsor
within one (1) year after the payment of the contribution, or the
disallowance of the deduction (to the extent disallowed), whichever is
applicable.
In the event of a contribution which was made by reason of a mistake
of fact or which was nondeductible, the amount to be returned to the Plan
Sponsor shall be the excess of the contribution above the amount that would
have been contributed had the mistake of fact or the mistake in determining
the deduction not occurred, less any net loss attributable to the excess.
Any net income attributable to the excess shall not be returned to the Plan
Sponsor. No return of any portion of the excess shall be made to the Plan
Sponsor if the return would cause the balance in a Participant's Account to
be less than the balance would have been had the mistaken contribution not
been made.
SECTION 19
SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934
Notwithstanding any other provision of this Plan, the provisions of
this Plan set forth the formula or formulas that determine the amount,
price or timing of awards to persons subject to the reporting requirements
of Section 16 of the Securities Exchange Act of 1934 (the "Act") and any
other provisions of the Plan of the type referred to in Section 16b-
3(c)(2)(ii) of the Act shall not be amended more than once every six
months, other than to comport with changes in the Code, ERISA or the rules
thereunder. Further, to the extent required, the persons described in the
preceding sentence shall be subject to such withdrawal, investment and
other restrictions necessary to satisfy Rule 16b-3 under the Act. This
Section 19 is intended to comply with Rule 16b-3 under the Act and shall be
effective only to the extent required by such rule and shall be interpreted
and administered in accordance with such rule.
77
SECTION 20
INCORPORATION OF SPECIAL LIMITATIONS
Appendices A, B, C and D to the Plan, attached hereto, are
incorporated by reference and the provisions of the same shall apply
notwithstanding anything to the contrary contained herein.
IN WITNESS WHEREOF, the Primary Sponsor has caused this indenture to
be executed as of the date first above written.
TYSON FOODS, INC.
By: /s/ Carl Johnson
---------------------------
Title: Executive Vice President,
Administrative Services
ATTEST:
/s/ R. Read Hudson
------------------
Title: Secretary
78
APPENDIX A
LIMITATION ON ALLOCATIONS
SECTION 1
The "annual addition" for any Participant for any one limitation year
may not exceed the lesser of:
(a) $30,000, as adjusted for changes in the cost of living as
provided in regulations issued by the Secretary of the Treasury; or
(b) 25% of the Participant's Annual Compensation.
SECTION 2
For the purposes of this Appendix A, the term "annual addition" for
any Participant means for any limitation year, the sum of certain Plan
Sponsor, Affiliate, and Participant contributions, forfeitures, and other
amounts as determined in Code Section 415(c)(2) in effect for that
limitation year.
SECTION 3
Effective until December 31, 1999, in the event that a Plan Sponsor or
an Affiliate maintains a defined benefit plan under which a Participant
also participates, the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any limitation year for any
Participant may not exceed 1.0.
(a) The defined benefit plan fraction for any limitation year is a
fraction:
(1) the numerator of which is the projected annual benefit of the
Participant under the defined benefit plan (determined as of the close of
such year); and
(2) the denominator of which is the lesser of
(A) the product of 1.25, multiplied by the maximum annual benefit
allowable under Code Section 415(b)(1)(A), or
(B) the product of
(i) 1.4, multiplied by
(ii) the maximum amount which may be taken into account under Section
415(b)(1)(B) of the Code with respect to the Participant under
the defined benefit plan for the limitation year (determined as
of the close of the limitation year).
(b) The defined contribution plan fraction for any limitation year
is a fraction:
(1) the numerator of which is the sum of a Participant's
annual additions as of the close of the year; and
79
(2) the denominator of which is the sum of the lesser of
the following amounts determined for the year and for all prior
limitation years during which the Participant was employed by a
Plan Sponsor or an Affiliate:
(A) the product of 1.25, multiplied by the dollar
limitation in effect under Code Section 415(c)(1)(A) for the
limitation year (determined without regard to Section
415(c)(6) of the Code); or
(B) the product of
(i) 1.4, multiplied by
(ii) the amount which may be taken into account
under Code Section 415(c)(1)(B) (or Code Section
415(c)(7), if applicable) with respect to the
Participant for the limitation year.
SECTION 4
For purposes of this Appendix A, the term "limitation year" shall mean
a Plan Year unless a Plan Sponsor elects, by adoption of a written
resolution, to use any other twelve month period adopted in accordance with
regulations issued by the Secretary of the Treasury.
SECTION 5
For purposes of applying the limitations of this Appendix A, all
defined contribution plans maintained or deemed to be maintained by a Plan
Sponsor shall be treated as one defined contribution plan, and all defined
benefit plans now or previously maintained or deemed to be maintained by a
Plan Sponsor shall be treated as one defined benefit plan. In the event
any of the actions to be taken pursuant to Section 6 of this Appendix A or
pursuant to any language of similar import in another defined contribution
plan are required to be taken as a result of the annual additions of a
Participant exceeding the limitations set forth in Section 1 of this
Appendix A, because of the Participant's participation in more than one
defined contribution plan, the actions shall be taken first with regard to
this Plan.
SECTION 6
In the event that as a result of the allocation of forfeitures to the
Account of a Participant, a reasonable error in estimating the
Participant's Annual Compensation or other similar circumstances, the
annual addition allocated to the Account of a Participant exceeds the
limitations set forth in Section 1 of this Appendix A or in the event that
the aggregate contributions made on behalf of a Participant under both a
defined benefit plan and a defined contribution plan, subject to the
reduction of allocations in other defined contribution plans required by
Section 5 of this Appendix A, cause the aggregate limitation fraction set
forth in Section 3 of this Appendix A to be exceeded, effective April 1,
1998, the Plan Administrator shall, in writing, direct the Trustee to take
such of the following actions as the Plan Administrator shall deem
appropriate, specifying in each case the amount or amounts of contributions
involved:
80
(a) Contributions made by the Plan Sponsor on behalf of the
Participant pursuant to Plan Section 3.1 shall be reduced in the
amount of the excess, together with any gains attributable thereto,
and distributed to the Participant.
(b) If further reduction is necessary, to the extent necessary,
all other contributions made by the Plan Sponsor on behalf of the
Participant pursuant to Plan Section 3 for the Plan Year shall be held
in an unallocated suspense. While the suspense account is maintained,
(1) no Plan Sponsor contributions under the Plan shall be made which
would be precluded by this Appendix A, (2) income, gains and loses of
the Fund shall not be allocated to such suspense account and (3)
amounts in the suspense account shall be allocated in subsequent
limitation years as Plan Sponsor contributions for each such
limitation year until the suspense account is exhausted. In the event
of the termination of the Plan, the amounts in the suspense account
shall be returned to the Plan Sponsor to the extent that such amounts
may not then be allocated to Participants' Accounts.
APPENDIX B
TOP-HEAVY PROVISIONS
SECTION 1
As used in this Appendix B, the following words shall have the
following meanings:
(a) "Determination Date" means, with respect to any Plan Year,
the last day of the preceding Plan Year, or, in the case of the first
Plan Year, means the last day of the first Plan Year.
(b) "Key Employee" means an Employee or former Employee
(including a Beneficiary of a Key Employee or former Key Employee) who
at any time during the Plan Year containing the Determination Date or
any of the four (4) preceding Plan Years is:
(1) Was at any time an officer of the Plan Sponsor or of
any Affiliate whose Annual Compensation was greater than fifty
percent (50%) of the amount in effect under Code Section
415(b)(1)(A) for the calendar year in which the Plan Year ends,
where the term "officer" means an administrative executive in
regular and continual service to the Plan Sponsor or Affiliate;
provided, however, that in no event shall the number of officers
exceed the lesser of Clause (A) or (B) of this Subparagraph (1),
where:
(A) equals fifty (50) Employees; and
(B) equals the greater of (I) three (3) Employees or
(II) ten percent (10%) of the number of Employees during the
Plan Year, with any non-integer being increased to the next
integer.
If for any year no officer of the Plan Sponsor meets the
requirements of this Subparagraph (b), the highest paid officer
of the Plan Sponsor for the Plan Year shall be considered an
officer for purposes of this Subparagraph (b)(1);
81
(2) One of the ten (10) Employees owning both (A) more than
one-half percent (1/2%) of the outstanding stock of the Plan
Sponsor or an Affiliate, more than one-half percent (1/2%) of the
total combined voting power of all stock of the Plan Sponsor or
an Affiliate, or more than one-half percent (1/2%) of the capital
or profits interest in the Plan Sponsor or an Affiliate, and (B)
the largest percentage ownership interests in the Plan Sponsor or
any of its Affiliates, and whose Annual Compensation is equal to
or greater than the amount in effect under Section l(a) of
Appendix A to the Plan for the calendar year in which the
Determination Date falls; or
(3) An owner of more than five percent (5%) of the
outstanding stock of the Plan Sponsor or an Affiliate or more
than five percent (5%) of the total combined voting power of all
stock of the Plan Sponsor or an Affiliate; or
(4) An owner of more than one percent (1%) of the
outstanding stock of the Plan Sponsor or an Affiliate or more
than one percent (1%) of the total combined voting power of all
stock of the Plan Sponsor or an Affiliate, and who in such Plan
Year had Annual Compensation from the Plan Sponsor and all of its
Affiliates of more than $150,000.
Employees other than Key Employees are sometimes referred to in this
Appendix B, as "non-key employees."
(c) "Required Aggregation Group" means:
(1) each plan of the Plan Sponsor and its Affiliates which
qualifies under Code Section 401 (a) in which a Key Employee is a
participant, and
(2) each other plan of the Plan Sponsor and its Affiliates
which qualifies under Code Section 401 (a) and which enables any
plan described in Subsection (a) of this Section to meet the
requirements of Section 401(a)(4) or 410 of the Code.
(d) (1) "Top-Heavy" means:
(A) if the Plan is not included in a Required
Aggregation Group, the Plan's condition in a Plan Year for
which, as of the Determination Date:
(i) the present value of the cumulative Accounts
under the Plan for all Key Employees exceeds sixty
percent (60%) of the present value of the cumulative
Accounts under the Plan for all Participants; and
(ii) the Plan, when included in every potential
combination, if any, with any or all of:
(I) any Required Aggregation Group, and
(II) any plan of the Plan Sponsor which is
not part of any Required Aggregation Group and
which qualifies under Code Section 401 (a)
82
is part of a Top-Heavy Group (as defined in Paragraph
(2) of this Subsection); and
(B) if the Plan is included in a Required Aggregation
Group, the Plan's condition in a Plan Year for which, as of
the Determination Date:
(i) the Required Aggregation Group is a Top-Heavy
Group (as defined in Paragraph (2) of this Subsection);
and
(ii) the Required Aggregation Group, when included
in every potential combination, if any, with any or all
of the plans of the Plan Sponsor and its Affiliates
which are not part of the Required Aggregation Group
and which qualify under Code Section 401(a), is part of
a Top-Heavy Group (as defined in Paragraph (2) of this
Subsection).
(C) For purposes of Subparagraphs (A)(ii) and (B)(ii)
of this Paragraph (1), any combination of plans must satisfy
the requirements of Sections 401(a)(4) and 410 of the Code.
(2) A group shall be deemed to be a Top-Heavy Group if:
(A) the sum, as of the Determination Date, of the
present value of the cumulative accrued benefits for all Key
Employees under all plans included in such group exceeds
(B) sixty percent (60%) of a similar sum determined
for all participants in such plans.
(3) (A) For purposes of this Section, the present value of
the accrued benefit for any participant in a defined
contribution plan as of any Determination Date or last day
of a plan year shall be the sum of:
(i) as to any defined contribution plan other
than a simplified employee pension, the account balance
as of the most recent valuation date occurring within
the plan year ending on the Determination Date or last
day of a plan year, and
(ii) as to any simplified employee pension, the
aggregate employer contributions, and
(iii) an adjustment for contributions due as
of the Determination Date or last day of a plan year.
In the case of a plan that is not subject to the minimum
funding requirements of Code Section 412, the adjustment in
Clause (iii) of this Subparagraph (A) shall be the amount of
any contributions actually made after the valuation date but
on or before the Determination Date or last day of the plan
year to the extent not included under Clause (i) or (ii) of
this Subparagraph (A); provided, however, that in the first
plan year of the plan, the adjustment in Clause (iii) of
83
this Subparagraph (A) shall also reflect the amount of any
contributions made thereafter that are allocated as of a
date in such first plan year. In the case of a plan that is
subject to the minimum funding requirements, the account
balance in Clause (i) and the aggregate contributions in
Clause (ii) of this Subparagraph (A) shall include
contributions that would be allocated as of a date not later
than the Determination Date or last day of a plan year, even
though those amounts are not yet required to be contributed,
and the adjustment in Clause (iii) of this Subparagraph (A)
shall be the amount of any contribution actually made (or
due to be made) after the valuation date but before the
expiration of the extended payment period in Code Section
412(c)(10) to the extent not included under Clause (i) or
(ii) of this Subparagraph (A).
(B) For purposes of this Subsection, the present value
of the accrued benefit for any participant in a defined
benefit plan as of any Determination Date or last day of a
plan year must be determined as of the most recent valuation
date which is within a twelve (12) month period ending on
the Determination Date or last day of a plan year as if such
participant terminated as of such valuation date; provided,
however, that in the first plan year of a plan, the present
value of the accrued benefit for a current participant must
be determined either (i) as if the participant terminated
service as of the Determination Date or last day of a plan
year or (ii) as if the participant terminated service as of
such valuation date, but taking into account the estimated
accrued benefit as of the Determination Date or last day of
a plan year. For purposes of this Subparagraph (B), the
valuation date must be the same valuation date used for
computing plan costs for minimum funding, regardless of
whether a valuation is performed that year. The actuarial
assumptions utilized in calculating the present value of the
accrued benefit for any participant in a defined benefit
plan for purposes of this Subparagraph (B) shall be
established by the Plan Administrator after consultation
with the actuary for the plan, and shall be reasonable in
the aggregate and shall comport with the requirements set
forth by the Internal Revenue Service in Q&A T-26 and T-27
of Regulation Section 1.416-1.
(C) For purposes of determining the present value of
the cumulative accrued benefit under a plan for any
participant in accordance with this Subsection, the present
value shall be increased by the aggregate distributions made
with respect to the participant (including distributions
paid on account of death to the extent they do not exceed
the present value of the cumulative accrued benefit existing
immediately prior to death) under each plan being
considered, and under any terminated plan which if it had
not been terminated would have been in a Required
Aggregation Group with the Plan, during the five (5) year
period ending on the Determination Date or last day of the
plan year that falls within the calendar year in which the
Determination Date falls.
84
(D) For purposes of this Paragraph (3), participant
contributions which are deductible as "qualified retirement
contributions" within the meaning of Code Section 219 or any
successor, as adjusted to reflect income, gains, losses, and
other credits or charges attributable thereto, shall not be
considered to be part of the accrued benefits under any
plan.
(E) For purposes of this Paragraph (3), if any
employee is not a Key Employee with respect to any plan for
any plan year, but such employee was a Key Employee with
respect to such plan for any prior plan year, any accrued
benefit for such employee shall not be taken into account.
(F) For purposes of this Paragraph (3), if any
employee has not performed any service for any Plan Sponsor
or Affiliate maintaining the plan during the five-year
period ending on the Determination Date, any accrued benefit
for that employee shall not be taken into account.
(G) (i) In the case of an "unrelated rollover" (as
defined below) between plans which qualify under Code
Section 401(a), (a) the plan providing the distribution
shall count the distribution as a distribution under
Subparagraph (C) of this Paragraph (3), and (b) the
plan accepting the distribution shall not consider the
distribution part of the accrued benefit under this
Section; and
(ii) in the case of a "related rollover" (as
defined below) between plans which qualify under Code
Section 401(a), (a) the plan providing the distribution
shall not count the distribution as a distribution
under Subparagraph (C) of this Paragraph (3), and
(b) the plan accepting the distribution shall consider
the distribution part of the accrued benefit under this
Section.
For purposes of this Subparagraph (G), an "unrelated
rollover" is a rollover as defined in Code Section
402(c)(4) or 408(d)(3) or a plan-to-plan transfer which
is both initiated by the participant and made from a
plan maintained by one employer to a plan maintained by
another employer where the employers are not
Affiliates. For purposes of this Subparagraph (G), a
"related rollover" is a rollover as defined in Code
Section 402(c)(4) or 408(d)(3) or a plan-to-plan
transfer which is either not initiated by the
participant or made to a plan maintained by the
employer or an Affiliate.
SECTION 2
(a) Notwithstanding anything contained in the Plan to the
contrary, except as otherwise provided in Subsection (b) of this
Section, in any Plan Year during which the Plan is Top-Heavy,
85
allocations of Plan Sponsor contributions and forfeitures for the Plan
Year for the Account of each Participant who is not a Key Employee and
who has not separated from service with the Plan Sponsor prior to the
end of the Plan Year shall not be less than three percent (3%) percent
of the Participant's Annual Compensation. For purposes of this
Subsection, an allocation to a Participant's Account resulting from
any Plan Sponsor contribution attributable to a salary reduction or
similar arrangement shall not be taken into account.
(b) (1) The percentage referred to in Subsection (a) of this
Section for any Plan Year shall not exceed the percentage at
which allocations are made or required to be made under the Plan
for the Plan Year for the Key Employee for whom the percentage is
highest for the Plan Year. For purposes of this Paragraph, an
allocation to the Account of a Key Employee resulting from any
Plan Sponsor contribution attributable to a salary reduction or
similar agreement shall be taken into account.
(2) For purposes of this Subsection (b), all defined
contribution plans which are members of a Required Aggregation
Group shall be treated as part of the Plan.
(3) This Subsection (b) shall not apply to any plan which
is a member of a Required Aggregation Group if the plan enables a
defined benefit plan which is a member of the Required
Aggregation Group to meet the requirements of Code Section
401(a)(4) or 410.
SECTION 3
Effective until December 31, 1999, in any limitation year (as defined
in Section 4 of Appendix A to the Plan) which contains any portion of a
Plan Year in which the Plan is Top-Heavy, the number "1.0" shall be
substituted for the number "1.25" in Section 3 of Appendix A to the Plan.
SECTION 4
Notwithstanding anything contained in the Plan to the contrary, in any
Plan Year during which the Plan is Top-Heavy, a Participant's interest in
his Account shall not vest at any rate which is slower than the following
schedule, effective as of the first day of that Plan Year:
Full Years of Percentage
Vesting Service Vested
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
The Schedule set forth above in this Section 4 shall be inapplicable to a
Participant who has failed to perform an Hour of Service after the
Determination Date on which the Plan has become Top-Heavy. When the Plan
ceases to be Top-Heavy, the Schedule set forth above in this Section 4
shall cease to apply; provided however, that the provisions of the Plan
Section dealing with changes in the vesting schedule shall apply.
86
APPENDIX C
SPECIAL NONDISCRIMINATION RULES
SECTION 1
As used in this Appendix, the following words shall have the following
meanings:
(a) "Eligible Participant" means a Participant who is an
Employee during any particular Plan Year.
(b) "Highly Compensated Eligible Participant" means any Eligible
Participant who is a Highly Compensated Employee.
(c) "Matching Contribution" means any contribution made by a
Plan Sponsor to a Matching Account and any other contribution made to
a plan by a Plan Sponsor or an Affiliate on behalf of an Employee on
account of a contribution made by an Employee or on account of an
Elective Deferral.
(d) "Qualified Matching Contributions" means Matching
Contributions which are immediately nonforfeitable when made, and
which would be nonforfeitable, regardless of the age or service of the
Employee or whether the Employee is employed on a certain date, and
which may not be distributed, except upon one of the events described
under Section 401(k)(2)(B) of the Code and the regulations thereunder.
(e) "Qualified Nonelective Contributions" means contributions of
the Plan Sponsor or an Affiliate, other than Matching Contributions or
Elective Deferrals, which are nonforfeitable when made, and which
would be nonforfeitable regardless of the age or service of the
Employee or whether the Employee is employed on a certain date, and
which may not be distributed, except upon one of the events described
under Code Section 401(k)(2)(B) and the regulations thereunder.
SECTION 2
In addition to any other limitations set forth in the Plan, for each
Plan Year one of the following tests must be satisfied:
(a) the actual deferral percentage for the Highly Compensated
Eligible Participants for the Plan Year must not be more than the
actual deferral percentage of all other Eligible Participants for the
Plan Year multiplied by 1.25; or
(b) the excess of the actual deferral percentage for the Highly
Compensated Eligible Participants for the Plan Year over that of all
other Eligible Participants for the preceding Plan Year must not be
more than two (2) percentage points, and the actual deferral
percentage for the Highly Compensated Eligible Participants for the
Plan Year must not be more than the actual deferral percentage of all
other Eligible Participants for the Plan Year multiplied by two (2).
87
The "actual deferral percentage" for the Highly Compensated Eligible
Participants and all other Eligible Participants for a Plan Year is the
average in each group of the ratios, calculated separately for each
Employee, of the Deferral Amounts contributed by the Plan Sponsor on behalf
of an Employee for the Plan Year to the Annual Compensation of the Employee
in the Plan Year. In addition, for purposes of calculating the "actual
deferral percentage" as described above, Deferral Amounts of Employees who
are not Highly Compensated Employees which are prohibited by Code Section
401(a)(30) shall not be taken into consideration. Except to the extent
limited by Treasury Regulation section 1.401(k)-l(b)(5) and any other
applicable regulations promulgated by the Secretary of the Treasury, all or
part of the Qualified Matching Contributions and Qualified Nonelective
Contributions made pursuant to the Plan may be treated as Deferral Amounts
for purposes of determining the "actual deferral percentage."
SECTION 3
If the Deferral Amounts contributed on behalf of any Highly
Compensated Eligible Participant exceeds the amount permitted under the
"actual deferral percentage" test described in Section 2 of this Appendix C
for any given Plan Year, then before the end of the Plan Year following the
Plan Year for which the Excess Deferral Amount was contributed, the portion
of the Excess Deferral Amount for the Plan Year attributable to a Highly
Compensated Participant, as adjusted to reflect income, gain, or loss
attributable to it through the date the end of the Plan Year for which the
test is being performed and reduced by any excess Elective Deferrals as
determined pursuant to Plan Section 3.1 previously distributed to a
Participant for the Participant's taxable year ending with or within the
Plan Year, may be distributed to the Highly Compensated Eligible
Participant. The income allocable to such Excess Deferral Amount shall be
determined in a similar manner as described in Section 4.2 of the Plan.
The Excess Deferral Amount to be distributed shall be reduced by Deferral
Amounts previously distributed for the taxable year ending in the same Plan
Year, and shall also be reduced by Deferral Amounts previously distributed
for the Plan Year beginning in such taxable year. In the event the
multiple use of limitations contained in Sections 2(b) and 5(b) of this
Appendix C, pursuant to Treasury Regulations section 1.401(m)-2 as
promulgated by the Secretary of the Treasury, requires a corrective
distribution, such distribution shall be made pursuant to this Section 3,
and not Section 6 of Appendix C. The portion of the Matching Contribution
on which such Excess Deferral Amount was based shall be forfeited upon the
distribution of such Excess Deferral Amount.
(a) For purposes of this Section 3, "Excess Deferral Amount"
means, with respect to a Plan Year, the excess of:
(1) the aggregate amount of Deferral Amounts
contributed by a Plan Sponsor on behalf of Highly Compensated
Eligible Participants for the Plan Year, over
(2) the maximum amount of Deferral Amounts permitted
under Section 2 of this Appendix C for the Plan Year, which shall
be determined by reducing the Deferral Amounts contributed on
behalf of Highly Compensated Eligible Participants in order of
the actual deferral percentages beginning with the highest of
such percentages.
88
(b) Distribution of the Excess Deferral Amount for any Plan Year
shall be made to Highly Compensated Eligible Participants on the basis
of the dollar amount of Deferral Amounts attributable to each Highly
Compensated Eligible Participant. The Plan Sponsor shall determine
the amount of Excess Deferral Amounts which shall be distributed to
each Highly Compensated Eligible Participant as follows.
(1) The Deferral Amounts allocated to the Highly
Compensated Eligible Participant with the highest dollar amount
of Deferral Amounts for the Plan Year shall be reduced by the
amount required to cause that Highly Compensated Eligible
Participant's remaining Deferral Amounts for the Plan Year to be
equal to the dollar amount of the Deferral Amounts allocated to
the Highly Compensated Eligible Participant with the next highest
dollar amount of Deferral Amounts for the Plan Year. This amount
is then distributed to the Highly Compensated Eligible
Participant with the highest dollar amount of Deferral Amounts,
unless a smaller reduction, when added to the total dollar amount
already distributed pursuant to this Paragraph (1), equals the
total Excess Deferral Amounts.
(2) If the total amount distributed under Paragraph
(1) of this Section 3(b) is less than the total Excess Deferral
Amounts, the procedure in Paragraph (1) shall be successively
repeated until the total dollar amount distributed is equal to
the total Excess Deferral Amounts attributable to Highly
Compensated Eligible Participants.
If a distribution of the Excess Deferral Amounts attributable to
the Highly Compensated Eligible Participants is made in accordance
with Paragraphs (1) and (2) of this Section 3(b), the limitations in
Section 2 of this Appendix C shall be treated as being met regardless
of whether the actual deferral percentage, if recalculated after such
distributions, would have satisfied the requirements of Section 2.
SECTION 4
The Plan Administrator shall have the responsibility of monitoring the
Plan's compliance with the limitations of this Appendix C and shall have
the power to take all steps it deems necessary or appropriate to ensure
compliance, including, without limitation, restricting the amount which
Highly Compensated Eligible Participants can elect to have contributed
pursuant to Plan Section 3.1. Any actions taken by the Plan Administrator
pursuant to this Section 4 shall be pursuant to non-discriminatory
procedures consistently applied.
SECTION 5
In addition to any other limitations set forth in the Plan, Matching
Contributions under the Plan and the amount of nondeductible employee
contributions under the Plan, for each Plan Year must satisfy one of the
following tests:
(a) The contribution percentage for Highly Compensated Eligible
Participants for the Plan Year must not exceed 125% of the
contribution percentage for all other Eligible Participants for the
Plan Year; or
89
(b) The contribution percentage for Highly Compensated Eligible
Participants for the Plan Year must not exceed the lesser of (1) 200 %
of the contribution percentage for all other Eligible Participants for
the Plan Year, and (2) the contribution percentage for all other
Eligible Participants for the Plan Year plus two (2) percentage
points.
Notwithstanding the foregoing, for purposes of this Section 5, the terms
Highly Compensated Eligible Participant and Eligible Participant shall not
include any Participant who is not eligible to receive a Matching
Contribution under the provisions of the Plan, other than as a result of
the Participant failing to contribute to the Plan or failing to have an
Elective Deferral contributed to the Plan on the Participant's behalf.
Notwithstanding the foregoing, if Qualified Matching Contributions are
taken into account for purposes of applying the test contained in Section 2
of this Appendix C, they shall not be taken into account under this Section
5. In applying the above tests, the Plan Administrator shall comply with
any regulations promulgated by the Secretary of the Treasury which prevent
or restrict the use of the test contained in Section 2(b) of this Appendix
C and the test contained in Section 5(b) of this Appendix C. The
"contribution percentage" for Highly Compensated Eligible Participants and
for all other Eligible Participants for a Plan Year shall be the average of
the ratios, calculated separately for each Participant, of (A) to (B),
where (A) is the amount of Matching Contributions under the Plan (excluding
Qualified Matching Contributions which are used to apply the test set forth
in Section 2 of this Appendix C or Matching Contributions which are used to
satisfy the minimum required contributions to the Accounts of Eligible
Participants who are not Key Employees pursuant to Section 2 of Appendix B
to the Plan) and nondeductible employee contributions made under the Plan
for the Eligible Participant for the Plan Year, and where (B) is the Annual
Compensation of the Eligible Participant for the Plan Year. Except to the
extent limited by Treasury Regulation Section 1.401(m)-l(b)(5) and any
other applicable regulations promulgated by the Secretary of the Treasury,
a Plan Sponsor may elect to treat Deferral Amounts and Qualified
Nonelective Contributions as Matching Contributions for purpose of
determining the "contribution percentage," provided the Deferral Amounts,
excluding those treated as Matching Contributions, satisfy the test set
forth in Section 2 of Appendix C.
SECTION 6
If either (a) the Matching Contributions and, if taken into account
under Section 5 of this Appendix C, the Deferral Amounts, Qualified
Nonelective Contributions and/or Qualified Matching Contributions made on
behalf of Highly Compensated Eligible Participants, or (b) the
nondeductible employee contributions made by Highly Compensated Eligible
Participants exceed the amount permitted under the "contribution percentage
test" for any given Plan Year, then, before the close of the Plan Year
following the Plan Year for which the Excess Aggregate Contributions were
made, the amount of the Excess Aggregate Contributions attributable to the
Plan for the Plan Year under either Section (6)(a)(1) or (2), or both, as
adjusted to reflect any income, gain or loss attributable to such
contributions through the date the Excess Aggregate Contributions are
distributed shall be distributed or, if the Excess Aggregate Contributions
are forfeitable, forfeited. The income allocable to such contributions
shall be determined in a similar manner as described in Section 4.2 of the
90
Plan. As to any Highly Compensated Employee, any distribution or
forfeiture of his allocable portion of the Excess Aggregate Contributions
for a Plan Year shall first be attributed to any nondeductible employee
contributions made by the Participant during the Plan Year for which no
corresponding Plan Sponsor contribution is made and then to any remaining
nondeductible employee contributions made by the Participant during the
Plan Year and any Matching Contributions thereon. As between the Plan and
any other plan or plans maintained by the Plan Sponsor in which Excess
Aggregate Contributions for a Plan Year are held, each such plan shall
distribute or forfeit a pro-rata share of each class of contribution based
on the respective amounts of a class of contribution made to each plan
during the Plan Year. The payment of the Excess Aggregate Contributions
shall be made without regard to any other provision in the Plan. In the
event the multiple use of limitations contained in Sections 2(b) and 5(b)
of this Appendix C, pursuant to Treasury Regulation section 1.401(m)-2 as
promulgated by the Secretary of the Treasury, requires a corrective
distribution, such distribution shall be made pursuant to Section 3 of
Appendix C, and not this Section 6.
For purposes of this Section 6, with respect to any Plan Year, "Excess
Aggregate Contributions" means the excess of:
(a) the aggregate amount of the Matching Contributions and
nondeductible employee contributions (and any Qualified Nonelective
Contributions or Qualified Matching Contributions) and, it taken into
account under Section 5 of this Appendix C, the Deferral Amounts
actually made on behalf of Highly Compensated Eligible Participants
for the Plan Year, over
(b) the maximum amount of contributions permitted under the
limitations of Section 5 of this Appendix C, determined by reducing
contributions made on behalf of Highly Compensated Eligible
Participants in order of their contribution percentages beginning with
the highest of such percentages.
The determination of the amount of Excess Aggregate Contributions
under this Section 6 shall be made after (1) first determining the
excess Elective Deferrals under Section 3.1(b) of the Plan and (2)
then determining the Excess Deferral Amounts under Section 3 of this
Appendix C.
(c) Distribution or forfeiture of nondeductible employee
contributions or Matching Contributions in the amount of the Excess
Aggregate Contributions for any Plan Year shall be made with respect
to Highly Compensated Eligible Participants on the basis of the dollar
amount of the Excess Aggregate Contributions attributable to each
Highly Compensated Eligible Participant. Forfeitures of Excess
Aggregate Contributions may not be allocated to Participants whose
contributions are reduced under this Section 6. The Plan Sponsor
shall determine the amount of Excess Aggregate Contributions which
shall be distributed to each Highly Compensated Eligible Participant
as follows.
(1) The Matching Contributions and nondeductible
contributions allocated to the Highly Compensated Eligible
Participant with the highest dollar amount of such contributions
91
for the Plan Year shall be reduced by the amount required to
cause that Highly Compensated Eligible Participant's remaining
Matching Contributions and nondeductible contributions for the
Plan Year to be equal to the dollar amount of such contributions
allocated to the Highly Compensated Eligible Participant with the
next highest dollar amount of Matching contributions and
nondeductible contributions for the Plan Year. This amount is
then distributed to the Highly Compensated Eligible Participant
with the highest dollar amount of Matching Contributions and
nondeductible contributions, unless a smaller reduction, when
added to the total dollar amount already distributed pursuant to
this Paragraph (1), equals the total Excess Aggregate
Contributions.
(2) If the total amount distributed under Paragraph (1) is
less than the total Excess Aggregate Contributions, the procedure
in Paragraph (1) shall be repeated until the total dollar amount
of Matching Contributions and nondeductible contributions
distributed is equal to the total Excess Aggregate Contributions
attributable to Highly Compensated Eligible Participants.
If a distribution of the total Excess Aggregate Contributions is made
in accordance with Paragraphs (1) and (2) of this Section 6(c), the
limitations in Section 5 of this Appendix C shall be treated as being met
regardless of whether the actual contribution percentage, if recalculated
after such distributions, would have satisfied the requirements of Section
5.
SECTION 7
Except to the extent limited by rules promulgated by the Secretary of
the Treasury, if a Highly Compensated Eligible Participant is a participant
in any other plan of the Plan Sponsor or any Affiliate which includes
Matching Contributions, deferrals under a cash or deferred arrangement
pursuant to Code Section 401(k), or nondeductible employee contributions,
any contributions made by or on behalf of the Participant to the other plan
shall be allocated with the same class of contributions under the Plan for
purposes of determining the "actual deferral percentage" and "contribution
percentage" under the Plan; provided, however, contributions that are made
under an "employee stock ownership plan" (within the meaning of Code
Section 4975(e)(7)) shall not be combined with contributions under any plan
which is not an employee stock ownership plan (within the meaning of Code
Section 4975(e)(7)).
Except to the extent limited by rules promulgated by the Secretary of
the Treasury, if the Plan and any other plans which include Matching
Contributions, deferrals under a cash or deferred arrangement pursuant to
Code Section 401(k), or nondeductible employee contributions are considered
as one plan for purposes of Code Section 401(a)(4) and 410(b)(1), any
contributions under the other plans shall be allocated with the same class
of contributions under the Plan for purposes of determining the
"contribution percentage" and "actual deferral percentage" under the Plan;
provided, however, contributions that are made under an "employee stock
ownership plan" (within the meaning of Code Section 4975(e)(7)) shall not
be combined with contributions under any plan which is not an employee
stock ownership plan (within the meaning of Code Section 4975(e)(7)).
92
SECTION 8
Effective January 1, 1999, notwithstanding any other provision in this
Appendix C to the contrary, the Primary Sponsor intends to satisfy the
requirements of Code Section 401(k)(12) with respect to contributions made
pursuant to Section 3.1 by those Participants who have completed their
Eligibility Service and the requirements of Code Section 401(m)(11) with
respect to those matching contributions made pursuant to Section 3.2.
APPENDIX D
FROZEN BENEFIT DISTRIBUTION RULES
SECTION 1
DEFINITIONS
For purposes of this Appendix D, the following terms shall have the
following meanings:
(a) "Annuity Starting Date" means the date on which a
distribution is deemed to commence for purposes of calculating the
benefit to be distributed.
(b) "Qualified Joint and Survivor Annuity" means an annuity for
the life of the Participant with a survivor annuity for the life of
his/her spouse which is one-half of the amount of the annuity payable
during the joint lives of the Participant and his/her spouse and which
is the actuarial equivalent of a single life annuity for the life of
the Participant.
(c) "Preretirement Survivor Annuity" means an annuity for the
life of the surviving spouse of a deceased Participant that has an
actuarial present value that is equal to 100% of the balance in the
Participant's account as of the date of the Participant's death.
For purposes of this Appendix D, the following election rules shall
apply:
The Plan Administrator shall furnish to the Participant a written
explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor
Annuity and a Qualified Preretirement Survivor Annuity;
(b) the Participant's right to make, and the effect of, an
election not to receive the Qualified Joint and Survivor Annuity or
the Qualified Preretirement Survivor Annuity;
(c) the rights of the Participant's spouse as described below;
and
(d) the right to make and the effect of such an election.
In the case of a Qualified Joint and Survivor Annuity, the
written explanation shall be provided to the Participant no less than
thirty (30) days and no more than ninety (90) days prior to the first
93
date on which he is entitled to commencement of payments from the
Fund. Notwithstanding the foregoing, a Participant may elect to waive
the requirement that the written explanation be provided at least
thirty (30) days prior to commencement of payments, provided that the
first payment from the Fund occurs more than seven (7) days from the
date the explanation is received by the Participant. In the case of
the Qualified Preretirement Survivor Annuity, the written explanation
shall be provided to the Participant in whichever of the following
periods ends last:
(i) the period beginning with the first day of the Plan
Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(ii) the period beginning one year before and ending one
year after the Employee first becomes a Participant;
(iii) the period beginning one year before and ending
one year after these rules apply to the Participant; or
(iv) a reasonable period of time after separation from
service in the case of a Participant who separates from service
before attaining age 35.
The Participant may elect during the "applicable election period"
not to Qualified Joint and Survivor Annuity or Qualified Preretirement
Survivor Annuity by execution and delivery to the Plan Administrator
of a form that purpose by the Plan Administrator. The term
"applicable election period" shall mean, with respect to a Qualified
Joint and Survivor Annuity, the 90-day period ending on the first date
on which the Participant is entitled to commencement of payment from
the Fund. In the event the Participant waives the minimum thirty (30)
day requirement for the written explanation, the "applicable election
period" shall not end before the period ending thirty (30)-days after
the Participant receives the written explanation. Notwithstanding the
foregoing, if the Participant receives the written explanation of the
Qualified Joint and Survivor Annuity and affirmatively elects a form
of distribution, the payments from the Fund may commence less than
thirty (30) days after the Participant receives the written
explanation provided that the Participant may revoke the affirmative
distribution election until the later of the time payments from the
Fund are to begin or the expiration of the seven (7) day period which
begins on the day after the Participant receives the written
explanation. With respect to a Qualified Preretirement Survivor
Annuity, the "applicable election period" shall mean the period which
begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death.
94
In the case of a married Participant, no election shall be
effective unless:
(A) the spouse of the Participant consents in writing to
the election and the consent acknowledges the effect of the
election (including, if applicable, the identity of any
Beneficiary other than the Participant's spouse and the alternate
form of payment) and is witnessed by a notary public, or
(B) it is established to the satisfaction of the Plan
Administrator that the consent required pursuant to subparagraph
(A) above may not be obtained because there is no spouse, the
spouse cannot be located, the Participant has a court order
indicating that he is legally separated or has been abandoned
(within the meaning of local law) unless a qualified domestic
relations order provides otherwise, or of any other circumstances
as permitted by regulations promulgated by the Department of the
Treasury. If the spouse is legally incompetent to give consent,
consent by the spouse's legal guardian shall be deemed to be
consent by the spouse.
Any consent by a spouse (or establishment that the consent of a
spouse may not be obtained) shall be effective only with respect to
that spouse. If an election is made, the Participant's Account may be
paid in any alternate form of payment permitted by the Plan. Any
waiver of a Qualified Preretirement Survivor Annuity made prior to the
first day of the Plan Year in which the Participant attains age 35
shall become invalid as of the first day of the Plan Year in which the
Participant attains age 35 and a Qualified Preretirement Annuity shall
be provided, unless a new waiver is obtained. The Participant may
revoke any election not to receive payment in the form of a Qualified
Joint and Survivor Annuity at any time prior to commencement of
payments from the Fund, and may make a new election at any time prior
to the commencement of payments from the Fund
If a Participant is married and has in effect an annuity form of
payment for the payment of his Account and the Participant wishes to
obtain a loan from the Plan in accordance with Plan Section 5, the
Participant's spouse must, within the ninety (90) day period preceding
the date the loan is made, consent to the loan and the possibility of
a reduction in the Participant's Account resulting in its nonpayment.
SECTION 2
ARCTIC PLAN
Except as may be required or permitted by Plan Sections 7 through 10,
effective December 30, 1994, all distributions made to a Participant or
beneficiaries attributable to amounts transferred to this Plan from the
Alaska Fisheries Corporation Profit Sharing/Savings Plan (the "Arctic
Plan") shall be made by the Trustee in one of the three following methods:
(a) Automatic Qualified Joint and Survivor Annuity (or Life
Annuity). A Participant who is married and begins to receive payments
under the Plan shall receive payments in the form of a Qualified Joint
and Survivor Annuity, unless the Participant, with the consent of his
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spouse, has properly elected otherwise. An unmarried Participant
shall receive his benefits in the form of a life annuity, with monthly
payments payable for 120 months certain and thereafter during his
lifetime, unless the Participant properly elects otherwise.
(b) Automatic Preretirement Survivor Annuity. If a Participant
who is married and at least partially vested dies before the date upon
which his retirement benefits were to commence, the Participant's
surviving spouse shall receive payments in the form of a Preretirement
Survivor Annuity, unless the Participant, with the consent of his
spouse has properly elected otherwise. The surviving spouse may elect
to have such annuity distributed immediately or at a later date not
later than the date the Participant would have attained his Normal
Retirement Age.
(c) In the event a Participant (or surviving spouse) elects
pursuant to Subsections (a) or (b) above not to receive retirement or
death benefits in the forms described therein, such distributions may
be made by the Trustee as an immediate or deferred nontransferable
annuity providing fixed or variable income (i) for the life of the
Participant, with or without a specified period certain, or (ii) over
the lives of the Participant and his designated beneficiary, with or
without a specified period certain.
SECTION 3
CULINARY PLAN
Except as may be required or permitted by Plan Sections 7 through 10,
effective April 1, 1996, all distributions made to a Participant or his
beneficiaries attributable to amounts transferred to this Plan from the
Savings Plan for Employees of Culinary Foods, Inc. (the "Culinary Plan")
shall be made by the Trustee in one of the following methods:
(a) Qualified-Joint and Survivor Annuity or Life Annuity. A
Participant who is married and begins to receive payments under the
Plan shall receive payments in the form of a Qualified Joint and
Survivor Annuity, unless the Participant, with the consent of his
spouse, has properly elected otherwise. An unmarried Participant
shall receive his benefits in the form of a single life annuity,
unless the Participant properly elects otherwise.
(b) Preretirement Survivor Annuity. If a Participant who is
married dies before the date upon which benefit payments are to
commence, the Participant's surviving spouse shall receive payments,
commencing immediately, in the form of a Preretirement Survivor
Annuity, unless the Participant, with the consent of his spouse has
properly elected otherwise.
(c) Optional Forms. In the event a Participant elects not to
receive benefits in the form described in Subsection (a) above, the
distribution of benefits may be made by the Trustee in one of the
methods elected by the Participant described below:
(i) an actuarially equivalent life annuity, with or without
payments guaranteed for a period of no less than 120 monthly
payment; or
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(ii) if the Participant is married, an actuarially
equivalent life annuity with a survivor annuity payable to the
Participant's spouse equal to 100% or 66 and 2/3 % of the
payments made to the Participant during his life.
SECTION 4
HUDSON PLAN
Except as may be required or permitted by Plan Sections 7 through 10,
effective April 1, 1998, all distributions made to a Participant or his
beneficiaries attributable to amounts transferred to this Plan from the
Prior Retirement Account under the Hudson Foods, Inc. 401(k) Retirement
Plan (the "Hudson Plan") shall be made by the Trustee in one of the
following methods:
(a) Qualified Joint and Survivor Annuity or Life Annuity. A
Participant who is married and begins to receive payments under the
Plan shall receive payments in the form of a Qualified Joint and
Survivor Annuity, unless the Participant, with the consent of his
spouse, has properly elected otherwise. An unmarried Participant
shall receive his benefits in the form of a single life annuity,
unless the Participant elects properly otherwise.
(b) Preretirement Survivor Annuity. If a Participant who is
married dies before the date upon which benefit payments are to
commence, the Participant's surviving spouse shall receive payments,
commencing immediately, in the form of a Preretirement Survivor
Annuity, unless the Participant, with the consent of his spouse has
properly elected otherwise.
(c) Optional Forms. In the event a Participant elects not to
receive benefits in the form described in Subsection (a) above, the
distribution of benefits may be made by the Trustee in one of the
methods elected by the Participant described below:
(i) single life annuity, a single life annuity with a five-
or ten-year certain term, or
(ii) an actuarially equivalent life annuity with a survivor
annuity payable to the Participant's spouse equal to 100%, 66 and
2/3% or 50% of the payments made to the Participant during his
life.
SECTION 5
COBB PLAN
Except as may be required or permitted by Plan Sections 7 through 10,
all distributions attributable to amounts transferred to this Plan from the
Member Contribution Account and that corresponding portion of his Employer
Matching Contribution Account under the Retirement Savings Plan of Cobb-
Vantress, Inc. (the "Cobb Plan") may be made by the Trustee in one of the
following methods:
(a) Qualified Joint and Survivor Annuity or Life Annuity. A
Participant who is married and elects to receive payments from the
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Member Contribution Account and that corresponding portion of his
Employer Matching Contribution Account under the Cobb Plan in the form
of an annuity shall receive payment in the form of a Qualified Joint
and Survivor Annuity, unless the Participant, with the consent of his
spouse, has properly elected otherwise. An unmarried Participant
shall receive his benefits in the form of a single life annuity,
unless the Participant properly elects otherwise.
(b) Preretirement Survivor Annuity. If a Participant who is
married dies before the date upon which benefit payments are to
commence, the Participant's surviving spouse shall receive payments,
commencing immediately, in the form of a Preretirement Survivor
Annuity, unless the surviving spouse elects to have payments commence
at a later date (but not later than the date the Participant would
have attained Normal Retirement Age).
SECTION 6
THRIFT PLAN
Except as may be required or permitted by Plan Sections 7 through 10,
effective December 30, 1994, all distributions of any amounts from a
Participant's After-Tax Contribution Account and Employer Contribution
Account attributable to such accounts transferred from the Tyson Foods,
Inc. Employee Retirement Income Savings Plan (the "Thrift Plan") shall be
made by the Trustee in one of the following methods:
(a) Annuity Option. A Participant shall have the right to elect
to receive payment from such account in the form of a life annuity
(or, if married, in the form of a Qualified Joint and Survivor
Annuity). The Participant (and, if married, with the consent of his
spouse) also may elect during the election period to receive payments
from such account in the form of a straight life annuity or a straight
life annuity with a ten-year guarantee.
(b) Preretirement Survivor Annuity. If a Participant who is
married dies before the date upon which his retirement benefits were
to commence, such Participant's surviving, spouse shall have the right
to elect to receive payment from such account in the form of a
Preretirement Survivor Annuity. The spouse also may properly elect to
receive payments from such account in the form of a straight life
annuity or a straight life annuity with a ten-year guarantee. The
surviving spouse may elect to have such annuity distributed
immediately or at a later date not later than the date the Participant
would have attained Normal Retirement Age.
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Retirement Savings Plan - Tyson Foods Inc.
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