Document/Exhibit Description Pages Size
1: 10-K Annual Report 33 146K
2: EX-3 Exhibit 3.2 9 35K
3: EX-4 Exhibit 4.16E 10 31K
4: EX-4 Exhibit 4.17C 12 29K
5: EX-10 Exhibit 10.10 67 222K
6: EX-10 Exhibit 10.15 96 292K
7: EX-10 Exhibit 10.26 3 16K
8: EX-10 Exhibit 10.60 6 28K
9: EX-10 Exhibit 10.61 21 70K
10: EX-10 Exhibit 10.62 21 70K
11: EX-10 Exhibit 10.63 21 70K
12: EX-10 Exhibit 10.64 21 70K
13: EX-10 Exhibit 10.65 21 70K
14: EX-10 Exhibit 10.66 21 70K
15: EX-10 Exhibit 10.67 51 214K
16: EX-10 Exhibit 10.68 8 23K
17: EX-10 Exhibit 10.69 1 7K
18: EX-13 Annual or Quarterly Report to Security Holders 29 115K
19: EX-21 Subsidiaries of the Registrant 1 7K
20: EX-27 Financial Data Schedule (Pre-XBRL) 1 11K
22: EX-99 Exhibit 99.1 2 10K
21: EX-99 Miscellaneous Exhibit 2 9K
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
(called
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
until May 5, 1994)
As Amended and Restated
Effective January 1, 1989
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
As Amended and Restated Effective January 1, 1989
(called
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
until May 5, 1994)
INDEX
Page
Section 1. Establishment and Name . . . . . . . . . . . . . 1
1.1 Establishment and Name of the Plan . . . . . . . 1
Section 2. Definitions . . . . . . . . . . . . . . . . . . . 2
2.1 "Accounting Date" . . . . . . . . . . . . . . . . 2
2.2 "Actuarial Equivalent" . . . . . . . . . . . . . 2
2.3 "Affiliated Service Group" . . . . . . . . . . . 2
2.4 "Authorized Leave of Absence" . . . . . . . . . . 3
2.5 "Beneficiary" . . . . . . . . . . . . . . . . . . 4
2.6 "Board of Directors" . . . . . . . . . . . . . . 4
2.7 "Break In Service" . . . . . . . . . . . . . . . 4
2.8 "Code" . . . . . . . . . . . . . . . . . . . . . 4
2.9 "Committee" . . . . . . . . . . . . . . . . . . . 4
2.10 "Commonly Controlled Entity" . . . . . . . . . . 4
2.11 "Company" . . . . . . . . . . . . . . . . . . . . 4
2.12 "Company Contribution Base" . . . . . . . . . . . 5
2.13 "Credited Service" . . . . . . . . . . . . . . . 5
2.14 "Disability" . . . . . . . . . . . . . . . . . . 5
2.15 "Effective Date" . . . . . . . . . . . . . . . . 5
2.16 "Eligibility Computation Period" . . . . . . . . 5
2.17 "Employee" . . . . . . . . . . . . . . . . . . . 5
2.18 "Employee Elected Matched Contribution Account" . 6
2.19 "Employee Elected Unmatched Contribution
Account" . . . . . . . . . . . . . . . . . . . . 6
2.20 "Employee Matched Contribution Account" . . . . . 6
2.21 "Employee Unmatched Contribution Account" . . . . 6
2.22 "Employer" . . . . . . . . . . . . . . . . . . . 7
2.23 "Employer Contribution" . . . . . . . . . . . . . 7
2.24 "Employer Contribution General Account" . . . . . 7
2.25 "Employer Matching Contribution Account" . . . . 7
2.26 "Family Member" . . . . . . . . . . . . . . . . . 7
2.27 "Five-Percent Owner" . . . . . . . . . . . . . . 7
2.28 "Former Participant" . . . . . . . . . . . . . . 7
2.29 "Hardship" . . . . . . . . . . . . . . . . . . . 7
2.30 "Highly Compensated Employee" . . . . . . . . . . 8
2.31 "Hour of Service" . . . . . . . . . . . . . . . . 9
2.32 "Inactive Participant" . . . . . . . . . . . . . 10
2.33 "Investment Committee" . . . . . . . . . . . . . 10
-i-
INDEX
(continued)
Page
2.34 "Member" . . . . . . . . . . . . . . . . . . . . 11
2.35 "Member's Net Balance Account" . . . . . . . . . 11
2.36 "Non-highly Compensated Employee" . . . . . . . . 11
2.37 "Normal Retirement Age" . . . . . . . . . . . . . 11
2.38 "OAI Rate" . . . . . . . . . . . . . . . . . . . 11
2.39 "Parental Leave" . . . . . . . . . . . . . . . . 12
2.40 "Participant" . . . . . . . . . . . . . . . . . . 12
2.41 "Pay" . . . . . . . . . . . . . . . . . . . . . . 12
2.42 "Plan Year" . . . . . . . . . . . . . . . . . . . 14
2.43 "Post-1986 Employee Matched Contribution
Account" . . . . . . . . . . . . . . . . . . . . 14
2.44 "Post-1986 Employee Unmatched Contribution
Account" . . . . . . . . . . . . . . . . . . . . 14
2.45 "Qualified Domestic Relations Order" . . . . . . 14
2.46 "Qualified Joint and Survivor Pension" . . . . . 14
2.47 "Railroad Retirement Excess Pay" . . . . . . . . 14
2.48 "Railroad Retirement Taxable Wage Base" . . . . . 14
2.49 "Related Plan" . . . . . . . . . . . . . . . . . 15
2.50 "Remainder" . . . . . . . . . . . . . . . . . . . 15
2.51 "Required Beginning Date" . . . . . . . . . . . . 15
2.52 "Social Security Excess Pay" . . . . . . . . . . 16
2.53 "Social Security Taxable Wage Base" . . . . . . . 16
2.54 "Surviving Spouse's Pension" . . . . . . . . . . 16
2.55 "Termination of Employment" . . . . . . . . . . . 16
2.56 "Top Paid Group" . . . . . . . . . . . . . . . . 16
2.57 "Trust" . . . . . . . . . . . . . . . . . . . . . 17
2.58 "Trustee" . . . . . . . . . . . . . . . . . . . . 17
2.59 "Trust Fund" . . . . . . . . . . . . . . . . . . 18
2.60 "Valuation Date" . . . . . . . . . . . . . . . . 18
2.61 "Vesting Service" . . . . . . . . . . . . . . . . 18
2.62 "Year of Eligibility Service" . . . . . . . . . . 18
2.63 "Year of Vesting Service" . . . . . . . . . . . . 18
Section 3. Eligibility and Participation . . . . . . . . . . 20
3.1 Eligibility and Participation . . . . . . . . . . 20
3.2 Eligibility and Participation by Employees of
Employers Other Than The Company . . . . . . . . 20
3.3 Military Service . . . . . . . . . . . . . . . . 20
Section 4. Employee Elected Contributions
and Employer Contributions . . . . . . . 21
4.1 Participants' Elections and Contributions . . . . 21
4.2 Employer Contributions and Allocations . . . . . 25
4.3 Employer Special Section 401(k) Contributions . . 29
4.4 Deadline for Employer Special Section 401(k)
Contributions . . . . . . . . . . . . . . . . . . 29
-ii-
INDEX
(continued)
Page
4.5 Restrictions on Employee Elected Contributions,
Post-1986 Employee Contributions and Employer
Matching Profit Sharing Contributions . . . . . . 29
4.6 Multiple Use of Alternative Limitations . . . . . 33
4.7 Allocation of Income . . . . . . . . . . . . . . 34
4.8 Limitations on Contributions . . . . . . . . . . 35
4.9 Deadline for Contributions . . . . . . . . . . . 40
4.10 Order of Application of the Limitations of
Subsections 4.1(c), 4.5(b), 4.5(d), 4.6 and 4.8 . 40
Section 5. Benefits . . . . . . . . . . . . . . . . . . . . 41
5.1 Payment of Benefits in General . . . . . . . . . 41
5.2 Payment of the Vested Portion of the Member's
Net Balance Account on Termination of Employment 41
5.3 Payment of Vested Member's Net Balance Account
on Death . . . . . . . . . . . . . . . . . . . . 45
5.4 Withdrawals . . . . . . . . . . . . . . . . . . . 49
5.5 Payment of Life Annuities . . . . . . . . . . . . 52
5.6 Qualified Joint and Survivor Pension and
Surviving Spouse's Pension . . . . . . . . . . . 52
5.7 Spousal Consent to Waiver of Life Annuity or to
the Naming of Another Beneficiary . . . . . . . . 53
5.8 Lump Sum Payment without Election . . . . . . . . 54
5.9 Vested Interests . . . . . . . . . . . . . . . . 54
5.10 Incompetency . . . . . . . . . . . . . . . . . . 56
5.11 Deduction of Taxes from Amounts Payable . . . . . 56
5.12 Deadline for Payment of Benefits . . . . . . . . 57
5.13 Application for Distribution . . . . . . . . . . 57
5.14 Deferred Payments . . . . . . . . . . . . . . . . 58
5.15 Unclaimed Amounts . . . . . . . . . . . . . . . . 58
5.16 Eligible Rollover Distributions . . . . . . . . . 58
Section 6. Investment Funds, Accounts and Trust . . . . . . 60
6.1 Investment Funds . . . . . . . . . . . . . . . . 60
6.2 Investment Directions . . . . . . . . . . . . . . 60
6.3 Transfers Among Investment Funds . . . . . . . . 61
6.4 Investment Income to be Accumulated . . . . . . . 62
6.5 Accounts and Records . . . . . . . . . . . . . . 62
6.6 Adjustments to Reflect Net Worth of the Trust
Fund . . . . . . . . . . . . . . . . . . . . . . 63
6.7 Trust . . . . . . . . . . . . . . . . . . . . . . 65
Section 7. Top Heavy Provisions . . . . . . . . . . . . . . 66
7.1 Application . . . . . . . . . . . . . . . . . . . 66
7.2 Special Top Heavy Definitions . . . . . . . . . . 66
7.3 Special Top Heavy Provisions . . . . . . . . . . 74
-iii-
INDEX
(continued)
Page
Section 8. Administration . . . . . . . . . . . . . . . . . 78
8.1 Committee . . . . . . . . . . . . . . . . . . . . 78
8.2 Administration . . . . . . . . . . . . . . . . . 78
8.3 Initial Claim for Benefits . . . . . . . . . . . 79
8.4 Review of Claim Denial . . . . . . . . . . . . . 79
8.5 Fiduciary Responsibility . . . . . . . . . . . . 80
8.6 Fiduciary as Member . . . . . . . . . . . . . . . 80
Section 9. Subsidiary or Affiliated Corporations . . . . . . 81
9.1 Subsidiary or Affiliated Corporations . . . . . . 81
Section 10. Amendment and Termination . . . . . . . . . . . . 82
10.1 Amendment and Termination . . . . . . . . . . . . 82
10.2 Termination of the Plan . . . . . . . . . . . . . 82
Section 11. Mergers . . . . . . . . . . . . . . . . . . . . . 84
11.1 Mergers . . . . . . . . . . . . . . . . . . . . . 84
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . . 85
12.1 Nonalienation of Benefits . . . . . . . . . . . . 85
12.2 Qualified Domestic Relations Order . . . . . . . 85
12.3 Maximum Age Condition . . . . . . . . . . . . . . 87
12.4 Litigation . . . . . . . . . . . . . . . . . . . 88
12.5 Rights Against Employer . . . . . . . . . . . . . 88
12.6 Illegality of Particular Provision . . . . . . . 88
12.7 Effect of Mistake . . . . . . . . . . . . . . . . 88
12.8 Indemnification . . . . . . . . . . . . . . . . . 88
12.9 Applicable Laws . . . . . . . . . . . . . . . . . 89
12.10 Gender and Number . . . . . . . . . . . . . . . . 89
-iv-
CHICAGO AND NORTH WESTERN RAILWAY COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
(called the
CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY
PROFIT SHARING AND RETIREMENT SAVINGS PROGRAM
until May 5, 1994)
Section 1. Establishment and Name
1.1 Establishment and Name of the Plan. Chicago and North
Western Transportation Company Profit Sharing and Retirement
Savings Program and the CNW Corporation Profit Sharing and
Retirement Savings Program were amended and restated as the
Chicago and North Western Transportation Company Profit Sharing
and Retirement Savings Program (hereinafter referred to as the
"Plan") effective January 1, 1989. The Plan, as amended and
restated effective January 1, 1989, is hereby reamended and
restated effective January 1, 1989 to incorporate into one
document the revisions complying with the Tax Reform Act of 1986
and subsequent legislation and regulations implementing the
foregoing. Except as otherwise specifically stated herein, the
provisions of the Chicago and North Western Transportation
Company Profit Sharing and Retirement Savings Program, as amended
and restated herein, shall apply to persons who are employees of
an Employer and who are credited with One Hour of Service on or
after January 1, 1989. Eligibility, benefits, payment of
benefits and the amount of benefits, if any, of a person whose
employment with an Employer terminated before January 1, 1989,
and who is not rehired by an Employer on or after January 1,
1989, shall, except as otherwise specifically provided herein, be
determined in accordance with the provisions of Chicago and North
Western Transportation Company Profit Sharing and Retirement
Savings Program or CNW Corporation Profit Sharing and Retirement
Savings Program, as applicable, as in effect on the date of the
Employee's Termination of Employment. Effective May 6, 1994 the
Plan shall be called the Chicago and North Western Railway
Company Profit Sharing and Retirement Savings Program.
Section 2. Definitions
Whenever used in the Plan, the following terms shall have
the respective meanings set forth below unless otherwise
expressly provided herein, and when the defined meaning is
intended, the term is capitalized:
2.1 "Accounting Date" means the last day of each Plan
Year.
2.2 "Actuarial Equivalent" means a benefit having the same
value as the vested Member's Net Balance Account or the portion
thereof which it replaces, as determined by or with the advice of
the actuary of the Chicago and North Western Railway Company
Supplemental Pension Plan (called the Chicago and North Western
Transportation Company Supplemental Pension Plan through May 5,
1994) using generally accepted actuarial methods and the
assumptions as provided in Appendix I. Actuarial Equivalent is
used to convert a Member's Net Balance Account into an equivalent
in an annuity form which will be paid from the Chicago and North
Western Railway Company Supplemental Pension Plan (called the
Chicago and North Western Transportation Company Supplemental
Pension Plan through May 5, 1994) at the time the vested Member's
Net Balance Account or portion thereof is transferred thereto to
provide for the payment of the life annuity form of benefit as
provided in subsection 5.5.
2.3 "Affiliated Service Group" means one or more of the
following groups if it includes an Employer:
(a) a group which consists of an organization the
principal business of which is the performance of services
("first service organization") and one or more of the
organizations described in (1) or (2):
(1) any other organization the principal
business of which is the performance of services which
(A) is a shareholder or partner in the
first service organization (as determined in
accordance with applicable Treasury
Regulations); and
(B) regularly performs services for the
first service organization or is regularly
associated with the first service organization
in performing services for third persons, or
(2) any other organization if
(A) a significant portion of the
business of such organization is the performance
-2-
of services for the first service organization
or for one or more organizations identified in
subsection 2.3(a)(1), or for both and the
services are of a type historically performed in
the service field of the first service
organization or an organization identified in
subsection 2.3(a)(1) by employees, and
(B) 10 percent or more of the interests
in such organization is held by persons who are
highly compensated employees (within the meaning
of section 414(q)) of the first service
organization or an organization described in
subsection 2.3(a)(1); or
(b) a group which consists of
(1) an organization;
(2) all organizations aggregated in accordance
with Code Sections 414(b), 414(c), 414(m) and 414(o)
with the organization identified in subsection
2.3(b)(1) the principal business of which is to
perform on a regular and continuing basis management
functions for an organization identified in subsection
2.3(b)(3), 2.3(b)(4) or 2.3(b)(5);
(3) an organization for which management
functions are performed;
(4) all organizations aggregated in accordance
with Code Sections 414(b), 414(c), 414(m) or 414(o)
with the organization identified in subsection
2.3(b)(3); and
(5) all organizations ("first organizations")
related to any organization identified in subsection
2.3(b)(3) or 2.3(b)(4) if the organization identified
in subsection 2.3(b)(3) or 2.3(b)(4) and the first
organizations would be related persons pursuant to
Code Section 144(a)(3) and the organization identified
in subsection 2.3(b)(3) or 2.3(b)(4) performs
management functions for the first organizations.
2.4 "Authorized Leave of Absence" means any absence
authorized by an Employer under the Employer's standard personnel
practices. An absence due to service in the Armed Forces of the
United States shall be considered an Authorized Leave of Absence
provided that the Employee returns to employment with the
Employer with reemployment rights provided by law.
-3-
2.5 "Beneficiary" means the person or persons designated
by a Participant or the Plan, as applicable, in accordance with
the provisions of subsection 5.1, 5.2 or 5.3 to receive any
benefits which shall be distributable under the Plan on account
of the Participant's death.
2.6 "Board of Directors" means the board of directors of
the Company.
2.7 "Break In Service" means a twelve consecutive month
period during which a person has less than 500 Hours of Service
and a Termination of Employment. For the purpose of determining
Credited Service before completion of a Year of Eligibility
Service, such twelve consecutive month period shall be the
Eligibility Computation Period. For all other purposes, such
twelve consecutive month period shall be the Plan Year.
Notwithstanding the foregoing, for the purpose of determining
Vesting Service for Plan Years commencing before January 1, 1987,
each Plan Year in which the Member was not performing services
for an Employer, Commonly Controlled Entity or member of an
Affiliated Service Group on the last day of the Plan Year shall
be a Break In Service.
2.8 "Code" means the Internal Revenue Code of 1986 as now
in effect or hereafter amended. References to any section of the
Code shall be deemed to include similar sections of the Code as
renumbered or amended.
2.9 "Committee" means the individuals serving under the
Plan from time to time pursuant to appointment by the Board of
Directors of the Company in accordance with the provisions of the
Plan, which Committee shall be responsible for the general
administration of the Plan as set forth in the provisions of the
Plan.
2.10 "Commonly Controlled Entity" means a corporation,
trade or business if it and an Employer are members of a
controlled group of corporations as defined in Section 414(b) of
the Code, under common control as defined in Section 414(c) of
the Code or required to be aggregated with an Employer under
Section 414(o) of the Code; provided, however, that solely for
purposes of subsection 4.8 and of subsection 2.49 when used in
subsection 4.8, the standard of control under Sections 414(b) and
414(c) of the Code shall be deemed to be "more than 50%" rather
than "at least 80%."
2.11 "Company" means Chicago and North Western Railway
Company, a Delaware corporation, called the Chicago and North
Western Transportation Company, through May 5, 1994, or any
successor thereto that adopts the Plan.
-4-
2.12 "Company Contribution Base" means consolidated net
income of the Company before Employer contributions under the
Plan, expenses of the incentive compensation plan for executives
or management, and income taxes, payable and deferred, excluding
prior period and extraordinary items and unusual or infrequent
items as determined by the Company in accordance with generally
accepted accounting principles and as reported on the Company's
financial statements to its stockholders and excluding or
including such items as the Board of Directors of the Company on
or before the date the contribution is made, may designate to be
other items which do not reflect ordinary, normal and recurring
items of the Company during the Plan Year; provided, however, if
the Board of Directors of the Company fails to make such
designation before the date the contribution is made, then such
items shall not be excluded or included.
2.13 "Credited Service" means all Years of Eligibility
Service; provided that, in the event a person has a Break In
Service his Years of Eligibility Service prior to the Break In
Service will not be credited until such person has completed a
Year of Eligibility Service after the Break In Service.
2.14 "Disability" means a physical or mental incapacity
resulting from personal injury or sickness which, in the opinion
of the Committee, prevents a Participant or an Inactive
Participant from performing the duties assigned to him by the
Employer, will be permanent or of long and continued duration,
and causes the Participant's or Inactive Participant's employment
with Employer to terminate.
2.15 "Effective Date" means January 1, 1989.
2.16 "Eligibility Computation Period" means a twelve
consecutive month period beginning on the date on which a person
performs his first Hour of Service for the Employer, any Commonly
Controlled Entity or Affiliated Service Group provided, however,
that if a person has a Break In Service, the Eligibility
Computation Period shall be a twelve consecutive month period
beginning on the date a person performs his first Hour of Service
after such Break In Service.
2.17 "Employee" means any employee of Employer -
(i) whose rate of pay is not negotiated under a
collective bargaining agreement, or
(ii) whose fringe benefits are not negotiated under a
collective bargaining agreement;
excluding non-resident aliens employed by Employer and rendering
service to an Employer outside of the United States. An employee
who is receiving benefits under or who is placed on Employer's
-5-
long-term disability plan on or after January 1, 1984 shall not
be treated as an Employee until he returns as a full time
employee. A person who is a "leased employee" of an Employer, as
determined under Code Section 414(n)(2), shall not be an
Employee.
2.18 "Employee Elected Matched Contribution Account" means
that portion of the Member's Net Balance Account which evidences
the value of a Participant's Employee Elected Matched
Contributions, which are contributions elected by the Participant
in accordance with the provisions of subsection 4.1(a)(1) to be
made on the Employee's behalf by the Employer pursuant to the
Employee's election to have his compensation reduced and Code
Section 401(k) salary reduction contributions which were matched
under the CNW Corporation Profit Sharing and Retirement Savings
Plan before January 1, 1989 (and which shall be separately
accounted for), and which are matched by Employer Contributions
under the provisions of subsections 4.2(b)(1) and 4.2(b)(3),
including increases to (or decreases in) the net worth of the
Trust Fund attributable thereto.
2.19 "Employee Elected Unmatched Contribution Account"
means that portion of a Member's Net Balance Account which
evidences the value of a Participant's Employee Elected Unmatched
Contributions, which are contributions elected by the Participant
in accordance with the provisions of subsection 4.1(a)(2) to be
made on the Employee's behalf by the Employer pursuant to the
Employee's election to have his compensation reduced and which
are not matched by Employer contributions and Code Section 401(k)
salary reduction contributions which were made under the CNW
Corporation Profit Sharing and Retirement Savings Plan before
January 1, 1989 (and which shall be separately accounted for),
including increases to (or decreases in) the net worth of the
Trust Fund attributable thereto.
2.20 "Employee Matched Contribution Account" means that
portion of the Member's Net Balance Account which evidences the
value of a Participant's own contributions which were permitted
under the Plan before January 1, 1983 and which were matched by
Employer Contributions under the Plan before January 1, 1983,
including increases to (or decreases in) the net worth of the
Trust Fund attributable thereto.
2.21 "Employee Unmatched Contribution Account" means that
portion of the Member's Net Balance Account which evidences the
value of a Participant's own contributions which were permitted
under the Plan or the CNW Corporation Profit Sharing and
Retirement Savings Program before January 1, 1987 and which were
not matched by Employer Contributions, including increases to (or
decreases in) the net worth of the Trust Fund attributable
thereto.
-6-
2.22 "Employer" means the Company and any Commonly
Controlled Entity which pursuant to Section 9 elects to adopt the
Plan and the Trust.
2.23 "Employer Contribution" means contributions to the
Plan by Employers pursuant to subsection 4.2(a) or 4.3.
2.24 "Employer Contribution General Account" means all the
Member's Employer Contributions allocated to Participant's
accounts pursuant to subsections 4.2(b) under the Plan or under
the CNW Corporation Profit Sharing and Retirement Savings Program
(excluding Employer Matching Contributions allocated to the
Participant's accounts pursuant to subsections 4.2(b)(1) and
4.2(b)(3) or 4.3 for Plan Years beginning after December 31,
1982, Employee Elected Matched Contributions and Employee Elected
Unmatched Contributions) and increases or decreases in the net
worth of the Trust Fund attributable thereto.
2.25 "Employer Matching Contribution Account" means the
portion of the Member's Net Balance Account which evidences the
value of his Employer Contributions (excluding Employee Elected
Matched Contributions and Employee Elected Unmatched
Contributions) and Remainders which have been credited to the
Member's Net Balance Account under the Plan pursuant to
subsections 4.2(b)(1), 4.2(b)(3) and 4.3 for Plan Years beginning
after December 31, 1982 and increases or decreases in the net
worth of the Trust Fund attributable thereto.
2.26 "Family Member" means an individual's spouse, lineal
ascendant or lineal descendant and the spouses of such lineal
ascendants and descendants including such relationships created
by legal adoption. An individual who is a Family Member on any
day of the Plan Year shall be a Family Member for the entire
year.
2.27 "Five-Percent Owner" means an employee who owns (or is
considered as owning within the meaning of Section 318 of the
Code) more than five percent of the outstanding stock or stock
possessing more than 5 percent of the total combined voting power
of the Employer, a Commonly Controlled Entity or a member of an
Affiliated Service Group as provided in Section 416(i)(1)(B)(i)
of the Code.
2.28 "Former Participant" means a Participant or Inactive
Participant who has a Termination of Employment but continues to
have an account in the Plan.
2.29 "Hardship" means an immediate and heavy financial need
of a Participant which may not be met by other resources
reasonably available to the Member as determined by the Committee
and applied to all Members in a nondiscriminatory manner.
-7-
2.30 "Highly Compensated Employee" means, for a Plan Year,
a Participant who performs services for an Employer, Commonly
Controlled Entity or member of an Affiliated Service Group during
such Plan Year and who
(a) during the Plan Year preceding the Plan Year for
which the determination is being made ("Preceding Plan
Year"):
(1) was at any time a Five-Percent Owner;
(2) received Pay in excess of $81,720 (for
1989 and increased for cost of living adjustments in
future years as provided in Code Section 414(q)(1));
(3) receives Pay in excess of $54,480 (for
1989 and increased for cost of living adjustments in
future years as provided in Code Section 414(q)(1))
and is a member of the Top Paid Group;
(4) was at any time an officer of an Employer,
a Commonly Controlled Entity or a member of an
Affiliated Service Group and received Pay in excess of
50 percent of the amount in effect under Code Section
415(b)(1)(A) ($98,064 in 1989, as adjusted in
accordance with Section 415(d) of the Internal Revenue
Code); provided that, notwithstanding anything to the
contrary in this subsection 2.30, no more than 50
employees shall be treated as officers for any Plan
Year; or
(b) during the Plan Year for which the determination
is being made:
(1) is described in subsections 2.30(a)(1),
(2) or (4); and
(2) is one of the 100 employees of the group
consisting of the Employers, Commonly Controlled
Entities or members of an Affiliated Service Group who
received the most compensation from such entities; or
(c) for purposes of this subsection 2.30, the Pay of
any Highly Compensated Employee who is one of the ten (10)
most highly paid employees of the Employer, its Commonly
Controlled Entities or member of an Affiliated Service Group
determined (without regard to this subsection 2.30(c)) or of
any employee described in Section 2.30(a) or (b) with
respect to such group of entities shall include any Pay of a
Family Member of such Highly Compensated Employee and such
Family Member shall not be treated as an employee for
purposes of this subsection 2.30.
-8-
The Plan Administrator may elect for any Plan Year to determine
the Highly Compensated Employees for such year by substituting
"$54,480" (in 1989, adjusted in subsequent years as determined in
accordance with regulations issued by the Secretary of the
Treasury or his delegate) for "$81,720" (in 1989, adjusted in
subsequent years as determined in accordance with regulations
issued by the Secretary of the Treasury or his delegate) in
subsection 2.30(a)(2) and ignoring subsection 2.30(a)(3).
2.31 "Hour of Service" means
(a) each hour for which a person is paid directly or
indirectly, or entitled to payment, by the Employer,
Commonly Controlled Entity or member of an Affiliated
Service Group,
(1) for performance of duties;
(2) on account of a period of time during
which no duties were performed, provided that, except
as herein otherwise expressly provided, no more than
501 Hours of Service shall be credited for any single
continuous period during which a person performs no
duty, and provided that no hours of service shall be
credited for payments made or due under a plan
maintained solely for the purpose of complying with
applicable workmen's compensation, unemployment
compensation or disability insurance laws, or for
reimbursement of medical expenses; and
(3) for which back pay, irrespective of
mitigation of damages, is awarded or agreed to by the
Employer or Commonly Controlled Entity, provided that
no more than 501 Hours of Service shall be credited
any single continuous period of time during which a
person did not or would not have performed duties.
(b) The determination of Hours of Service for
reasons other than the performance of duties shall be in
accordance with the provisions of Labor Department
Regulations Section 2530.200b-2(b), and Hours of Service
shall be credited to computation periods in accordance with
the provisions of Labor Department Regulations Section
2530.200b-2(c).
(c) To the extent not credited above, for each
calendar month during which an Employee is receiving pay
under Employer's salary continuance plan, for the purposes
of the Plan, such Employee shall be deemed to have the
number of Hours of Service equal to such Employee's Hours of
Service for the month immediately preceding the date such
Employee was placed on Employer's salary continuance plan.
-9-
(d) To the extent not credited above, for periods of
absence from work on account of Parental Leave, an Employee
shall be credited with:
(1) the Hours of Service which normally would
have been credited to such individual but for the
Parental Leave, or
(2) eight (8) Hours of Service per day of such
absence if the Plan is unable to determine the Hours
of Service which would have been credited to such
individual but for the Parental Leave.
An Employee's Hours of Service for absence on account
of Parental Leave shall not exceed the lesser of 501 Hours
of Service or the number of Hours of Service as shall be
needed to prevent a Break In Service in the Eligibility
Computation Period (for purposes of determining Credited
Service) or in the Plan Year (for other purposes) in which
the Parental Leave commenced; provided that if such Hours of
Service are not needed to prevent a Break In Service in the
Eligibility Computation Period or in the Plan Year in which
absence because of a Parental Leave commenced, and the
Parental Leave continues into the next following Eligibility
Computation Period or Plan Year, then such Hours of Service
shall be credited in the Eligibility Computation Period or
Plan Year next following the Eligibility Computation Period
or Plan Year in which such absence commenced if needed to
prevent a Break In Service therein.
(e) Notwithstanding the foregoing, for the purpose
of determining Participant's Years of Vesting Service, Hours
of Service shall include hours of service determined as if
each Affiliated Service Group were a Commonly Controlled
Entity.
(f) Each Employee who is paid on a salaried basis
shall be credited with 95 Hours of Service for each
semi-monthly payroll period during which such Employee has
any Hours of Service.
2.32 "Inactive Participant" means a person who has been a
Participant but currently does not qualify as an Employee and who
continues to be Employed by an Employer or a Commonly Controlled
Entity.
2.33 "Investment Committee" means the committee appointed
by the board of directors of the Company to carry out the duties
of the Investment Committee under the CNW Corporation Master
Trust.
-10-
2.34 "Member" means a Participant, an Inactive Participant
or a Former Participant.
2.35 "Member's Net Balance Account" means the separate
account maintained in the Plan in accordance with the provisions
of the Plan for each Member which represents his total
proportionate interest in the Trust Fund as of any Accounting
Date or Valuation Date, and which consists of the sum of his
Employee Matched Contribution Account, his Employee Elected
Matched Contribution Account, his Employee Elected Unmatched
Contribution Account, his Employee Unmatched Contribution
Account, his Post-1986 Employee Matched Contribution Account, his
Post-1986 Employee Unmatched Contribution Account, his Employer
Contribution General Account and his Employer Matching
Contribution Account accumulated under the Plan or the CNW
Corporation Profit Sharing and Retirement Savings Program
("Accounts"). A Member's Net Balance Account at any time during
a Plan Year (except on a Valuation Date or Accounting Date) shall
be the value of such Participant's Accounts as adjusted in
accordance with Section 6.6 as of the immediately preceding
Valuation Date or, if later, Accounting Date and on a Valuation
Date or Accounting Date it shall be the value of such Accounts as
adjusted in accordance with Section 6.6 on that Valuation Date or
Accounting Date.
2.36 "Non-highly Compensated Employee" means an employee of
an Employer, Commonly Controlled Entity or Affiliated Service
Group who is not a Highly Compensated Employee or a Family Member
of a Highly Compensated Employee.
2.37 "Normal Retirement Age" means a person's:
(1) 65th birthday; or
(2) age as of the date of his involuntary
termination without cause as determined by the Committee in
accordance with established Employer personnel policies, if
such termination occurs on or after his 60th birthday;
(3) solely for the purpose of the Plan, 60th
birthday if such person has at least 5 years of service; or
(4) age as of the date of his voluntary termination
with eligibility to receive a pension pursuant to the
Chicago and North Western Railway Company Supplemental
Pension Plan (called the Chicago and North Western
Transportation Company Supplemental Pension Plan until
May 5, 1994).
2.38 "OAI Rate" means the greater of 5.7 percent or the
percentage equal to the portion of the rate of tax under Code
-11-
Section 3111(a) as in effect at the beginning of the Plan Year
which is attributable to old-age insurance.
2.39 "Parental Leave" means a period during which an
individual is absent from work for any period:
(1) by reason of the pregnancy of the individual;
(2) by reason of the birth of a child of the
individual;
(3) by reason of the placement of a child with the
individual in connection with the adoption of such child by
such individual, or
(4) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
An absence from work shall not be a Parental Leave unless
the individual furnished the Committee such timely information as
may reasonably be required to establish that the absence from
work was for one of the reasons specified above and the number of
days for which there was such an absence. Nothing contained
herein shall be construed to establish an Employer policy of
treating a Parental Leave as an Authorized Leave of Absence for
any purposes other than the crediting of Hours of Service as
provided in subsection 2.31.
2.40 "Participant" means any person who has met the
eligibility requirements of the Plan.
2.41 "Pay" means
(a) the total amount of compensation paid to an
Employee while a Participant by an Employer in each Plan
Year as reportable on federal income tax withholding
Form W-2 (including pay under an Employer's salary
continuance plan) increased by the Employee Elected Matched
Contributions and Employee Elected Unmatched Contributions,
if any, but reduced by any cash compensation paid in lieu of
vacation pay in a Plan Year to the extent such cash
compensation causes the Participant to receive annual cash
compensation (excluding bonus and incentive compensation) in
excess of the amount of annual cash compensation such
Participant would have received in such year if he were paid
one twenty-fourth of his annual compensation for each pay
period for which pay would normally have been paid in the
year, any income from stock options or stock appreciation
rights benefits including any buyout of option rights by the
Company or any Commonly Controlled Entity, any relocation
expenses, any non-cash compensation reportable on Form W-2
-12-
or any bonus or incentive compensation received in a Plan
Year after the Plan Year in which the Participant has a
Termination of Employment. If a Participant is transferred
from a Commonly Controlled Entity or member of an Affiliated
Service Group which is not an Employer to an Employer, the
Pay of the participant for the year of transfer shall not
include his pay from the Commonly Controlled Entity or
member of an Affiliated Service Group which is not an
Employer for the portion of the year prior to such transfer.
(b) Notwithstanding subsection 2.41(a), for the
purposes of subsection 4.8 and Section 7, (i) Pay shall
include a Participant's total compensation paid to an
Employee by the Employer, any Commonly Controlled Entity and
member of an Affiliated Service Group in the Plan Year
including any income on the Member's Form W-2 attributable
to stock appreciation rights benefits paid in cash to such
Member and excluding Employee Elected Matched Contributions,
Employee Elected Unmatched Contributions, any other elected
contributions under Code Section 401(k) to a Related Plan or
other contributions to a Related Plan which are not included
in a Participant's taxable income in the year in which
contributed, amounts realized from the exercise of a
non-qualified stock option, compensation taxable under
Section 83 of the Code, amounts realized from the sale,
exchange or other disposition of stock acquired under a
qualified stock option and other amounts which receive a
special tax benefit.
(c) Notwithstanding subsections 2.41(a) and 2.41(b)
for purposes of subsections 2.30, 4.1(c), 4.1(d), 4.1(e) and
4.5, Pay shall mean Pay as defined in subsection 2.41(b)
increased by a Participant's Employee Elected Contributions,
and any elected deferred contributions made for the
Participant under any other Related Plan which provides for
deferrals under Code Section 401(k) or elected contributions
excluded from gross income pursuant to a cafeteria plan
under Code Section 125 maintained by an Employer, a Commonly
Controlled Entity or a member of an Affiliated Service
Group.
(d) Effective for Plan Years commencing on or after
January 1, 1989, and before January 1, 1994, Pay shall not
exceed $200,000, adjusted for the cost of living as provided
in Code Section 401(a)(17). Effective for Plan Years
beginning on or after January 1, 1994, Pay shall not exceed
$150,000, adjusted for cost of living as provided in Code
Section 401(a)(17). In determining whether a Participant's
Pay exceeds the applicable amount above, the Pay of each
Five-Percent Owner and of each Participant who is one of the
ten Highly Compensated Employees paid the greatest
compensation (determined before the aggregation of the Pay
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of any family member pursuant to Code section 414(q)(6))
shall include the Pay of such Participant's spouse and
lineal descendants who have not attained age 19 before the
end of the Plan year.
2.42 "Plan Year" means the calendar year.
2.43 "Post-1986 Employee Matched Contribution Account"
means that portion of the Member's Net Balance Account which
evidences the value of a Participant's own contributions which
are permitted under subsection 4.1(b)(1) or were permitted under
the CNW Corporation Profit Sharing Program before January 1,
1989, including increases to (or decreases in) the net worth of
the Trust Fund attributable thereto.
2.44 "Post-1986 Employee Unmatched Contribution Account"
means that portion of the Member's Net Balance Account which
evidences the value of a Participant's own contributions which
are permitted under subsection 4.1(b)(2) or under the CNW
Corporation Profit Sharing and Retirement Savings Program before
January 1, 1989 including increases to (or decreases in) the net
worth of the Trust Fund attributable thereto.
2.45 "Qualified Domestic Relations Order" means a Qualified
Domestic Relations Order as defined in subsection 12.2.
2.46 "Qualified Joint and Survivor Pension" means an
immediate monthly pension payable for life to a Member who is
married at the annuity commencement date and, upon the Member's
death, if the Member's spouse survives the Member, a monthly
pension payable to the Member's spouse for life equal to 50
percent of the pension previously payable to the Member. The
amount of such Qualified Joint and Survivor Pension shall be the
Actuarial Equivalent of the vested Member's Net Balance Account
which shall be transferred to the Chicago and North Western
Railway Company Supplemental Pension Trust (called the Chicago
and North Western Transportation Company Supplemental Pension
Trust until May 5, 1994) and the Member's Qualified Joint and
Survivor Pension shall be paid therefrom in accordance with the
Chicago and North Western Railway Company Supplemental Pension
Plan (called the Chicago and North Western Transportation Company
Supplemental Pension Plan until May 5, 1994). If a Member is not
married at the annuity commencement date, "Qualified Joint and
Survivor Pension" means an immediate monthly pension payable to
the Member for life.
2.47 "Railroad Retirement Excess Pay" means, with respect
to each Plan Year, the Participant's Pay in excess of the
Railroad Retirement Taxable Wage Base.
2.48 "Railroad Retirement Taxable Wage Base" means, for any
Plan Year, (a) the maximum amount of compensation which may be
-14-
considered wages subject to an employer tax for such year under
the Federal Railroad Retirement Act as defined in Section 3221(b)
of the Code as in effect at the beginning of the Plan Year
("Railroad Retirement Tier II Tax"), and (b) with respect to
periods during which a Participant is receiving benefits under
the Employer's salary continuance plan, the maximum amount of
compensation of such Participant which is subject to an employer
tax for such year under the Railroad Retirement Tier II Tax.
2.49 "Related Plan" means any other qualified defined
contribution plan or qualified defined benefit plan (as defined
in Section 415(k) of the Code) maintained by an Employer, a
Commonly Controlled Entity or an Affiliated Service Group,
respectively called a "Related Defined Contribution Plan" and
"Related Defined Benefit Plan."
2.50 "Remainder" means the amount that remains in the
Employer Contribution Account of a Participant who has a
Termination of Employment before he is entitled to one hundred
percent thereof, after determining the distribution to which he
is entitled, and which is forfeited by the Member in accordance
with subsection 5.9 hereof. Remainders are reallocated to
accounts of Members as provided in subsections 4.2(b), 5.9 and
5.15 hereof.
2.51 "Required Beginning Date" means April 1 of the
calendar year following:
(a) for a Member who reaches age 70-1/2 prior to
January 1, 1988, the later of:
(1) the calendar year in which he reaches age
70-1/2, or
(2) if the Member is not a Five-Percent Owner
at any time during the Plan Year ending with or within
the calendar year in which he attains age 70-1/2 or
any of the four (4) prior Plan Years, the calendar
year in which he has a Termination of Employment;
provided that if any such Member becomes a
Five-Percent Owner during any Plan Year after he
attains age 70-1/2, the "Required Beginning Date" for
such Member shall be the April 1 of the calendar year
following the calendar year in which such Plan Year
ends, and
(b) for a Member who reaches age 70-1/2 on or after
January 1, 1988, the calendar year in which the Member
reaches age 70-1/2.
-15-
2.52 "Social Security Excess Pay" means, with respect to
each Plan Year, the Participant's Pay in excess of the Social
Security Taxable Wage Base.
2.53 "Social Security Taxable Wage Base" means, for any
Plan Year, the maximum amount of compensation which may be
considered wages subject to an employer tax for purposes of
determining F.I.C.A. tax liability as defined in Section 3121(a)
of the Code as determined for the calendar year which includes
the first day of the Plan Year.
2.54 "Surviving Spouse's Pension" means an immediate
monthly pension payable in accordance with subsection 5.5 to the
surviving spouse of a Member who dies before the commencement of
benefits hereunder in accordance with subsection 5.3. The amount
of such Surviving Spouse's Pension shall be the Actuarial
Equivalent of the vested portion of the Member's Net Balance
Account which shall be transferred to the Chicago and North
Western Railway Company Supplemental Pension Plan (called the
Chicago and North Western Transportation Company Supplemental
Pension Plan until May 5, 1994) and paid to the Surviving Spouse
therefrom.
2.55 "Termination of Employment" means upon the occurrence
of the following: (i) resignation, (ii) discharge,
(iii) Disability, (iv) death, (v) retirement or (vi) the last day
of the Plan Year, in the case of a person who ceases to be
actively employed during a Plan Year and who is not actively
employed as of the last day of the Plan Year (except in the case
of a person on sick leave, on a period of Authorized Leave of
Absence, receiving benefits under an Employer's salary
continuance plan or is placed on Employer's long-term disability
plan unless it is determined that such person has a Disability).
The transfer of an Employee from the employment of one Employer
(or a Commonly Controlled Entity or member of an Affiliated
Service Group) to another Employer (or a Commonly Controlled
Entity or member of an Affiliated Service Group) shall not be a
Termination of Employment.
2.56 "Top Paid Group" means
(a) For purposes of subsection 2.30(a)(3), the Top
Paid Group in a Plan Year is the top 20%, ranked by Pay, of
all employees of the Employer, Commonly Controlled Entity or
member of an Affiliated Service Group who provide services
for the Employer, Commonly Controlled Entity or member of an
Affiliated Service Group during the Plan Year determined by
excluding:
(1) employees who are described in either (A)
or (B):
-16-
(A) (I) employees who have completed
less than six (6) consecutive months of
service for an Employer;
(II) employees who normally work
less than 17-1/2 hours per week for at
least 50% of the total weeks worked by
such Employee during the year; or
(III) employees who normally work
less than one day during six (6) calendar
months during any year; and
(B) employees who have failed to
complete age or service requirements established
by the Employer that are shorter or lower than
those described in (A)(I), (II), or (III)
respectively, such requirements to be applied on
a consistent and uniform basis;
(2) employees who are nonresident aliens and
who receive no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer that
constitutes U.S. source income (as described in Code
Section 861(a)(3)); and
(3) employees who are included in a unit of
employees covered by a collective bargaining agreement
if (i) 90% (or such lesser percent as the Secretary of
the Treasury shall by applicable Regulations or
rulings permit) of the employees of the Employer are
included in units of employees covered by collective
bargaining agreements and (ii) the Plan covers only
employees not covered by such collective bargaining
agreements unless the Company elects not to exclude
such Employees.
(b) An individual who is excluded under subsection
2.56(a)(1)(A) and (B) for purposes of determining the number
of employees in the Top Paid Group, shall nonetheless be
included in such Top Paid Group if he is in the top 20% of
the employees of all Employers, Commonly Controlled Entities
and members of any Affiliated Service Group who provided
services for the Employer or Commonly Controlled Entity for
the Plan Year.
2.57 "Trust" means the CNW Corporation Master Trust and any
amendment thereto.
2.58 "Trustee" means the trustee or trustees selected for
the Trust to hold and administer the Trust Fund, or any successor
thereto.
-17-
2.59 "Trust Fund" means all securities, money and other
property held by the Trustee under the Trust for the Plan.
2.60 "Valuation Date" means the last day of each quarter of
each Plan Year (i.e., the last day of March, June and September)
other than an Accounting Date and such additional dates as the
Committee shall from time to time specify, and, with respect to
Funds D and E and such subsequently designated Funds as are
invested primarily in mutual funds, such additional dates as may
be provided by such Fund.
2.61 "Vesting Service" means the total Years of Vesting
Service.
2.62 "Year of Eligibility Service" means an Eligibility
Computation Period during which a person is employed by an
Employer, a Commonly Controlled Entity or an Affiliated Service
Group and during which such person has not less than 1000 Hours
of Service.
A person who, on or after January 1, 1985 becomes an
Employee by virtue of an Employer acquiring personnel and/or
operations of any other corporation, trade or business shall
receive credit for Years of Eligibility Service prior to the date
of such acquisition only if, and to the extent, the Board of
Directors of the Company so provides.
2.63 "Year of Vesting Service" means a Plan Year during
which a person is employed by the Employer (or any Commonly
Controlled Entity or member of an Affiliated Service Group)
during which such person has not less than 1000 Hours of Service,
excluding:
(a) for Participants who have one or more
consecutive Breaks In Service none of which occurred before
January 1, 1985, each Year of Vesting Service before the
Break In Service, if no portion of the Member's Employer
Contribution General Account was vested before the Break In
Service and if the number of consecutive Breaks In Service
equals or exceeds five consecutive Breaks In Service and for
Participants who have one or more consecutive Breaks In
Service at least one of which occurred before January 1,
1985, each Year of Vesting Service before the Break In
Service, if no portion of the Member's Employer Contribution
General Account was vested before the Break In Service and
if the number of consecutive Breaks In Service equals or
exceeds the number of Years of Vesting Service before the
Break In Service; and
(b) for purposes of determining the vested portion
of the Participant's Employer Contribution General Account
-18-
accrued before five consecutive Breaks In Service, Vesting
Service after such Breaks In Service.
-19-
Section 3. Eligibility and Participation
3.1 Eligibility and Participation. Each Employee who was
a Participant in the Chicago and North Western Transportation
Company Profit Sharing and Retirement Savings Program or the CNW
Corporation Profit Sharing and Retirement Savings Program on the
day before the Effective Date shall continue to be a Participant
under the Plan. Each Employee who transfers from the employment
of a Commonly Controlled Entity to the employment of an Employer
shall immediately become a Participant on the day he becomes an
Employee; provided that such Employee shall not become a
Participant before the January 1 or July 1 coincident with or
next following his completion of one year of Credited Service.
Each other Employee shall become a Participant as of the
January 1 or the July 1 (or such additional dates as the
Committee may from time-to-time permit) coincident with or next
following his completion of one year of Credited Service.
A person who becomes a Participant shall continue to
be a Participant as long as he remains an Employee. In the event
a Participant's employment conditions change so that he continues
to be employed by a Commonly Controlled Entity or a member of an
Affiliated Service Group but no longer qualifies as an Employee,
he shall become an Inactive Participant as of the date such
change occurs. A person who has an account under the Plan but is
no longer employed by an Employer, a Commonly Controlled Entity
or a member of an Affiliated Service Group shall be a Former
Participant. In the event an Inactive Participant's employment
conditions change, or a Former Participant who has not had a
Break In Service is reemployed, so that he again qualifies as an
Employee, he shall again become a Participant as of the date such
change or reemployment occurs. Notwithstanding any of the
foregoing, any person who has a Break In Service shall, on the
day following his completion of one Year of Credited Service
following such Break In Service, become a Participant
retroactively to the day such Participant resumes employment.
3.2 Eligibility and Participation by Employees of
Employers Other Than The Company. In the event that an Employer
other than the Company adopts the Plan and the Trust, as of the
effective date of such adoption, the Plan shall be applicable to
each Employee of such Employer who, as of such date has completed
at least one year of Credited Service.
3.3 Military Service. If, after the performance of an
Hour of Service, a person enters the military services of the
United States and subsequently reenters the service of the
Employer under any statute granting reemployment rights to
persons in the armed forces, such person shall be deemed to have
been on an Authorized Leave of Absence.
-20-
Section 4. Employee Elected Contributions
and Employer Contributions
4.1 Participants' Elections and Contributions.
Participants may elect (i) Employee Elected Contributions,
including, as defined in subsection 4.1(a), Employee Elected
Matched Contributions and Employee Elected Unmatched
Contributions, and/or (ii) Post-1986 Employee Contributions,
including, as defined in subsection 4.1(b), Post-1986 Employee
Matched Contributions and Post-1986 Employee Unmatched
Contributions as follows:
(a) Employee Elected Contributions. Employee
Elected Contributions may be elected by any Participant in
accordance with this subsection 4.1 with respect to Pay,
including Pay (other than bonus and incentive compensation
received in the Plan Year following the Plan Year in which
the Participant has a Termination of Employment) received
after the Participant's Termination of Employment. A
Participant may elect to have the Employer make Employee
Elected Contributions commencing on the January 1 or July 1
on which he first becomes a Participant or on any January 1
thereafter or on such other dates as the Committee shall
from time to time permit, by filing with Employer a form
(furnished by the Committee) therefor at least 30 days, or
such lesser period as the Committee may from time to time
permit, before such date, if at such time he is an Employee.
The Participant's election shall be an election to reduce
the amount of his Pay from 2% to 15% in increments of 1%
which shall be treated as Employee Elected Matched
Contributions and Employee Elected Unmatched Contributions
as follows:
(1) Employee Elected Contributions of 2%, 3%,
4% or 5% of Pay shall be treated as Employee Elected
Matched Contributions and shall be matched by Employer
Matching Profit Sharing Contributions; and
(2) Employee Elected Contributions in excess
of 5% of Pay shall be treated as Employee Elected
Unmatched Contributions.
(b) Post-1986 Employee Contributions. Post-1986
Employee Contributions may be made by any Participant in
accordance with this subsection 4.1 with respect to Pay
including Pay (other than bonus and incentive compensation
received in the Plan Year following the Plan Year in which
the Participant has a Termination of Employment) received
after the Participant's Termination of Employment. A
Participant may make Post-1986 Employee Contributions
commencing on the January 1 or July 1 on which he first
becomes a Participant or on any January 1 thereafter or on
-21-
such other dates as the Committee shall from time to time
permit, by filing with the Employer a form (furnished by the
Committee) therefor at least 30 days, or such lesser period
as the Committee may from time to time permit before such
date, if at such time he is an Employee. The Participant's
contribution choice shall be to have an amount from 2% to
15% of Pay withheld from Pay in increments of 1% which shall
be treated as Post-1986 Employee Matched Contributions and
Post-1986 Employee Unmatched Contributions as follows:
(1) Post-1986 Employee Contributions of 2%,
3%, 4% or 5% of Pay shall be treated as Post-1986
Employee Matched Contributions and shall be matched by
Employer Matching Profit Sharing Contributions;
(2) Post-1986 Employee Contributions in excess
of 5% of Pay shall be treated as Post-1986 Employee
Unmatched Contributions.
In no event shall the total of the amounts (i) elected
under subsection 4.1(a)(1) and (ii) contributed under
subsection 4.1(b)(1) which are matched by Employer Matching
Profit Sharing Contributions exceed 5% of a Participant's
Pay. In no event shall the total of Employee Elected
Contributions and Post-1986 Employee Contributions exceed
15% of a Participant's Pay.
For purposes of making the Employer Matching Profit
Sharing Contribution, Employee Elected Matched Contributions
shall be matched first and, to the extent permitted by the
limits of this subsection 4.1, then Post-1986 Employee
Matched Contributions shall be matched.
(c) Limit on Employee Elected Contributions.
Notwithstanding anything to the contrary herein, the sum of
the amount of a Participant's Employee Elected Contributions
and of his elected deferrals under any Related Defined
Contribution Plan for a Plan Year shall not exceed $7,627,
in 1989 (as adjusted in accordance with Code Section
402(g)(5) ("Limit on Employee Elected Contributions")). Any
Employee Elected Contributions over the Limit on Employee
Elected Contributions elected by a Participant shall be
treated as Post-1986 Employee Contributions. The Committee
may apply the Limit on Employee Elected Contributions by
permitting elections of any permissible percentage of Pay
until the limit is met during a given taxable year or may
apply the limit pro rata on a monthly or other periodic
basis permitting Employee Elected Contributions only up to
the ratable portion of the Limit on Employee Elected
Contributions in each period.
-22-
(d) Changes in Elections and Payment of
Contributions. Adjustments in the amount of any
Participant's Employee Elected Contributions or Post-1986
Employee Contributions may be made by the Participant
effective as of any January 1 or such additional dates as
the Committee shall from time to time permit by filing with
his Employer a form (furnished by the Committee) therefor at
least 30 days, or such lesser period as the Committee may
from time to time permit, before the date on which such
adjustment is effective. The Employee Elected Contributions
shall be paid by the Employer to the Trustee for deposit in
the Trust Fund at such time as the Company shall from time
to time determine but not later than 30 days after the last
day of the Plan Year.
A Participant's Employee Elected Matched
Contributions, Employee Elected Unmatched Contributions,
Post-1986 Employee Matched Contributions and Post-1986
Employee Unmatched Contributions shall be credited to his
Employee Elected Matched Contribution Account, Employee
Elected Unmatched Contribution Account, Post-1986 Employee
Matched Contribution Account and Post-1986 Employee
Unmatched Contribution Account, respectively, in the Plan at
such times as the Committee shall deem advisable or
necessary; provided however, as of each Accounting Date and
Valuation Date on which a distribution to which a Member
becomes entitled is to be determined, a Member's account
shall reflect all Employee Elected Matched Contributions,
Employee Elected Unmatched Contributions, Post-1986 Employee
Matched Contributions and Post-1986 Employee Unmatched
Contributions with respect to Pay which he has received as
of the date of such distribution.
(e) Discontinuance, Reduction or Withdrawal of
Employee Elected and Post-1986 Employee Contributions.
(1) A Participant may elect to discontinue his
Employee Elected Contribution election and his
Post-1986 Employee Contribution election at any time
prospectively, by filing with his Employer a form
(furnished by the Committee) therefor at least thirty
days or such lesser period as the Committee in a
uniform and nondiscriminatory manner may from time to
time permit, before the date as of which he desires
such discontinuance to become effective.
(2) A Participant who ceases to qualify as an
Employee, but who continues to be employed by an
Employer, shall become an Inactive Participant, and
have his Employee Elected Contributions and Post-1986
Employee Contributions discontinued, effective as of
the date of such change of employment status.
-23-
(3) A person whose Employee Elected
Contributions and Post-1986 Employee Contributions, if
any, are discontinued under paragraph (1) above may
elect to have the total of his Employee Elected
Contributions or Post-1986 Employee Contributions
resumed, effective as of any January 1 or July 1
following 6 months after the date such contributions
were discontinued by filing with Employer a form
(furnished by the Committee) therefor at least 30
days, or such lesser period as the Committee in a
uniform and nondiscriminatory manner from time to time
permits, before such date, if at that time he
qualifies as an Employee.
A person whose Employee Elected Contributions or
Post-1986 Employee Contributions are discontinued
under subsection 4.1(e)(2) shall have his Employee
Elected Contributions or Post-1986 Employee
Contributions resumed in the first pay period next
following the date on which he again becomes a
Participant under subsection 3.1.
(4) A Participant who files application for a
withdrawal distribution under subsection 5.4(a), (b),
(c) or (d) shall have his Employee Elected
Contributions and his Post-1986 Employee Contributions
discontinued as of the date of such distribution;
provided however that the aforementioned contributions
shall not be discontinued on account of a distribution
to an alternate payee made in accordance with a
Qualified Domestic Relations Order. Any Member who
receives a withdrawal distribution under subsection
5.4 may elect to have his Employee Elected
Contributions and his Post-1986 Employee Contributions
resumed effective as of any January 1 or July 1
following 12 months after such distribution, by filing
with the Employer a form (furnished by the Committee)
therefor at least 30 days, or such lesser period as
the Committee may from time to time permit, before
such date, if at that time he qualifies as a
Participant.
(f) Former Participants. A Former Participant shall
have any Employee Elected Contributions and Post-1986
Employee Contributions he is making as a Participant
discontinued, effective as of the date of his Termination of
Employment.
A Former Participant who does not have a Break In
Service and who is reemployed by Employer shall have his
Employee Elected Contributions and Post-1986 Employee
Contributions resumed in the first pay period next following
-24-
the date on which he becomes a Participant under subsection
3.1.
(g) Notwithstanding the provisions of subsection
4.1(a) and (b), the following restrictions shall apply:
(1) If any amounts of Employee Elected
Contributions, Post-1986 Employee Contributions or the
elections with respect thereto for any Participant or
group of Participants are reasonably believed by the
Committee to be in excess of the amounts permitted
under subsection 4.5 or 4.6, the Committee shall, in
accordance with uniform and non-discriminatory rules
from time to time established by the Committee, reduce
the amount of such contributions and elections.
(2) The Committee may, in accordance with
uniform and nondiscriminatory rules it establishes
from time to time, require that Participants who are
Highly Compensated Employees for the Plan Year make
elections with respect to Employee Elected
Contributions or Post-1986 Employee Contributions
following and/or preceding the completion of such
elections by the Participants who are not Highly
Compensated Employees and the Committee may (A) limit
the amount by which each Participant who is a Highly
Compensated Employee may elect to reduce his Pay or
contribute and (B) permit each Participant who is not
a Highly Compensated Employee to elect to reduce his
Pay or contribute within higher limits than those for
Highly Compensated Employees, to the extent the
Committee determines it is helpful to satisfy the
requirements of subsection 4.5 or 4.6.
(3) For purposes of administering subsections
4.1(g)(1) and 4.1(g)(2), the Committee may treat the
Plan and any Related Plan which contains a cash or
deferred arrangement as one plan.
(h) Employee Unmatched Contributions. No Employee
Unmatched Contributions may be made after December 31, 1986.
Any Employee Unmatched Contributions made to the Plan before
January 1, 1987 shall remain credited to the Participant's
Employee Unmatched Contribution Account and shall be
invested and distributed in the manner provided for Employee
Unmatched Contribution Accounts hereunder.
4.2 Employer Contributions and Allocations.
(a) Contributions of Employers. For each Plan Year
each of the Employers shall contribute to the Plan, in
addition to the amount of contributions elected by
-25-
Participants who are Employees of the Employer in accordance
with subsection 4.1 for the Plan Year, an amount equal to
the difference between (i) the greater of (1) or (2) plus
(ii) any amount designated in (3) minus (iii) the amount
specified in (4) below:
(1) An amount equal to the lesser of the
amount specified in (A) and (B) below:
(A) 5% of the Company Contribution
Base for the Plan Year; or
(B) $2,500,000, or, if greater, an
amount equal to $2,500,000 times a
fraction, the numerator of which is the
Bureau of Labor Statistics Consumer Price
Index for April of the Plan Year and the
denominator of which is the Bureau of
Labor Statistics Consumer price Index for
April, 1975. For purposes of determining
the numerator of the fraction for Plan
Years 1980 and subsequent years the Bureau
of Labor Statistics Consumer Price Index
shall be 'CPI-W', or if such index is
changed, replaced or eliminated, the
Bureau of Labor Statistics Consumer Price
Index which the Committee in its sole
discretion determines to be most similar
in characteristics to the Consumer Price
Index used for the immediately preceding
Plan Year.
(2) An amount equal to 20% of the
Employee Elected Matched Contributions and the
Post-1986 Employee Matched Contributions of each
Eligible Member who is an Employee of the
Company for purposes of subsection 4.2(b)(1)
below for that Plan Year.
(3) An amount equal to such amount of
discretionary profit sharing contributions as
the Board of Directors shall in its discretion
determine.
(4) An amount equal to the sum of
(i) the estimated aggregate amount of reductions
which would be made, in accordance with
subsection 4.8 with respect to Eligible Members,
as defined in subsection 4.2(b), who are
Employees of the Company, to Employer
Contributions (excluding Employee Elected
Matched Contributions and Employee Elected
-26-
Unmatched Contributions) and Remainders if the
full amount determined under subsection
4.2(a)(1) or (2) were contributed to the Plan
and (ii) the estimated aggregate amount of
reductions which would be made because of
subsection 2.41(d) with respect to Eligible
Members, as defined in subsection 4.2(b), who
are Employees of the Company, to Employer
Contributions (excluding Employee Elected
Matched Contributions and Employee Elected
Unmatched Contributions) and Remainders if the
full amount determined under subsection
4.2(a)(1) or (2) were contributed to the Plan.
Such amount shall be a reasonable estimate of
the amount of such Employer Contribution
reductions based on the information available on
the date Employer Contributions are made to the
Trustee.
(b) Allocation of Contributions and Remainders
of Employers. The Employer Contributions specified
under subsection 4.2(a)(1) or (2), whichever is
greater, increased by any contributions made to the
Trust pursuant to Section 4.2(a)(3), reduced by the
amount specified in subsection 4.2(a)(4) and any
Remainders with respect to Member's Net Balance
Accounts of Participants who were Employees of the
Company that are to be reallocated under subsections
5.9 and 5.15, shall be allocated, subject to the
provisions of subsection 4.8, as of the last day of
the Plan Year for which such contributions are to be
made and in which such Remainders occur to each Member
who is an Employee of the Company and who is a
Participant or Inactive Participant as of that date, a
Former Participant who has a Termination of Employment
during the Plan Year on or after his Normal Retirement
Age or because of Disability or death or on account of
a Force Reduction, as defined in subsection 5.9(a), a
Participant who during such Plan Year transferred from
the employment of the Company or Employer to the
employment of a Commonly Controlled Entity which is
not an Employer (such persons to be referred to
collectively for purposes of this subsection 4.2(b) as
"Eligible Members") and for purposes of subsections
4.2(b)(1) and (3), "Eligible Member" shall also
include each Former Participant who had a Termination
of Employment during the Plan Year who had Employee
Elected Matched Contributions or Post-1986 Employee
Matched Contributions for the Plan Year, in the
following manner:
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(1) First Matching Allocation. An
amount equal to the amount of Employer Matching
Profit Sharing Contributions determined under
subsection 4.2(a)(2) shall be allocated and
credited as of the last day of such Plan Year to
the Employer Matching Contribution Accounts of
Eligible Members who made Employee Elected
Matched Contributions or Post-1986 Employee
Matched Contributions during such Plan Year.
Such amount shall be credited to such accounts
of such Members in the proportion that the sum
of the Employee Elected Matched Contributions
and Post-1986 Employee Matched Contributions of
each such Member for such Plan Year bears to the
sum of such Employee Elected Matched
Contributions and Post-1986 Employee Matched
Contributions of all such Members for such Plan
Year.
(2) Integrated Allocation. An amount
shall be allocated and credited to the
Participant's Employer Contribution General
Account of each Eligible Member who received
Railroad Retirement Excess Pay for the Plan
Year, equal to the lesser of (i) the amount of
Employer Contributions and Forfeitures for the
Plan Year remaining to be allocated after the
allocations made in accordance with subsection
4.2(b)(1) multiplied by a fraction the numerator
of which is the amount of the Eligible Member's
Railroad Retirement Excess Pay and the
denominator of which is the total amount of all
Eligible Member's Railroad Retirement Excess Pay
or (ii) an amount equal to 11.4 percent of the
Railroad Retirement Excess Pay of each such
Eligible Member.
(3) Second Matching Allocation. An
amount equal to the amount determined under the
formula in subsections 4.2(a)(2) or such lesser
amount as may be available after subsections
4.2(b)(1) and 4.2(b)(2) are applied shall be
allocated and credited as of the last day of
such Plan Year to the Employer Matching
Contribution Accounts of Eligible Members who
made Employee Elected Matched Contributions or
Post-1986 Employee Matched Contributions during
the Plan Year. Such amount shall be credited to
such accounts of such Members in the proportion
that the sum of the Employee Elected Matched
Contribution and Post-1986 Employee Matched
Contribution of each such Member for such Plan
-28-
Year bears to the sum of such Employee Elected
Matched Contributions and Post-1986 Employee
Matched Contributions of all such Members for
such Plan Year.
(4) Residual Allocation. Any remaining
amount contributed under subsection 4.2(a) shall
be allocated and credited as of the last day of
such Plan Year to the Employer Contribution
General Accounts of Eligible Members, in the
proportion that the Pay of each such Member for
such Plan Year bears to the Pay of all such
Members for such Plan Year.
(c) Employer Contributions Limited by Deductibility.
In no event shall the annual Employer Contribution exceed
the maximum amount which is deductible for federal tax
purposes for a contribution to the Plan for such Plan Year.
4.3 Employer Special Section 401(k) Contributions. For
each Plan Year, the Company, by action of its Board of Directors,
may elect to have the Company and the other Employers make a
contribution to the Plan on or before the last day of the next
Plan Year, in such amounts (if any) as the Board of Directors may
determine, which shall be allocated to the Employer Matching
Contribution Account of those Participants who for the Plan Year
are Non-highly Compensated Employees in proportion to the amount
of each such Participant's Employee Elected Matched Contributions
and Employee Elected Unmatched Contributions for the Plan Year.
If the Company elects to make such a contribution, each Employer
shall contribute a fractional portion thereof, the numerator of
which is the sum of the Employee Elected Matched Contributions
and the Employee Elected Unmatched Contributions for such Plan
Year of the Eligible Members employed by the Employer, and the
denominator of which is the sum of the Employee Elected Matched
Contribution and Employee Elected Unmatched Contributions for the
Plan Year of all such Eligible Members.
4.4 Deadline for Employer Special Section 401(k)
Contributions. Employer Special Section 401(k) Contributions for
each Plan Year shall be delivered to the Trustee on or before the
last day of the next Plan Year.
4.5 Restrictions on Employee Elected Contributions,
Post-1986 Employee Contributions and Employer Matching Profit
Sharing Contributions.
(a) Actual Deferral Percentage. The Actual Deferral
Percentage ("ADP") for a specified group of Participants for
a Plan Year shall be the average of 100 times the result
(calculated separately for each Participant in such group)
obtained by dividing the amount of Employee Elected
-29-
Contributions and, to the extent that the Committee in its
discretion so determines, Employer Special Section 401(k)
Contributions and Employer Matching Contributions, actually
allocated to each such Participant for such Plan Year by the
Employee's Pay for the Plan Year. As soon as practicable
after the end of the Plan Year, the Committee shall
calculate the ADPs for the Plan Year for the group of
Participants who are eligible to make elections under
subsection 4.1 for the Plan Year and who are Highly
Compensated Employees and for the group of such Participants
who are Non-highly Compensated Employees. If a Related Plan
which contains a cash or deferred arrangement and the Plan
are treated as one plan for purposes of Sections 401(a)(4)
or 410(b) of the Code, such plans shall be treated as one
arrangement under subsections 4.5(a) and 4.5(b). If a
Highly Compensated Employee is a participant under a cash or
deferred arrangement under the Plan and a Related Plan, such
plans shall be treated as one arrangement for purposes of
determining the actual deferral percentage for such
Participant.
(b) Required ADP Test and Adjustment. The ADP for
the group of Participants who are eligible to make elections
under subsection 4.1 and who are Highly Compensated
Employees for the Plan Year shall not exceed both (1) and
(2) ("Required ADP Test") below:
(1) the ADP for the Non-highly Compensated
Employees who are eligible to make elections under
subsection 4.1 for the Plan Year multiplied by 1.25,
or
(2) the lesser of (A) the ADP for the
Non-highly Compensated Employees who are eligible to
make elections under subsection 4.1 for the Plan Year
multiplied by 2 or (B) the ADP for the Non-highly
Compensated Employees plus 2%.
If the Required ADP Test for a Plan Year is not met, and if
the Company does not elect to have Special Section 401(k)
Contributions with respect to the Plan Year sufficient to
result in the ADP of the Highly Compensated Employees not
exceeding both the amounts in subsections 4.5(b)(1) and (2),
then the Committee shall reduce Employee Elected
Contributions (first Employee Elected Unmatched
Contributions and, then, Employee Elected Matched
Contributions) that Participants who are Highly Compensated
Employees have deferred (by reducing first the Employee
Elected Contributions of the Participant with the highest
Actual Deferral Percentage to equal that of the Highly
Compensated Employee with the next highest Actual Deferral
Percentage and repeating such reductions until the ADP for
-30-
the Highly Compensated Employees does not exceed the amount
in both subsections 4.5(b)(1) and 4.5(b)(2)).
Employee Elected Contributions of those Participants
who are Highly Compensated Employees which are reduced in
accordance with the foregoing in order for the Plan to
comply with the Required ADP test shall be recharacterized
as Post-1986 Employee Contributions. Such excess
contributions and any income allocable to such contributions
shall be recharacterized as the Participant's Post-1986
Employee Contributions and credited to the Participant's
Post-1986 Employee Matched Contribution Account to the
extent the limits on such contributions under subsection
4.1(b)(1) would not be exceeded and, any additional amounts
shall be placed in his Post-1986 Employee Unmatched
Contribution Account to the extent the limits on such
contributions under subsection 4.1(b)(2) would not be
exceeded; provided that such recharacterized contributions
are not required to be reduced pursuant to
subsection 4.5(d). If such excess Employee Elected
Contributions cannot be recharacterized within the limits of
subsection 4.5(d), such excess Employee Elected
Contributions and any income allocable to such contributions
in accordance with subsection 4.7 shall be distributed to
the Participant as soon as reasonably possible but not later
than the end of the Plan Year following the Plan Year for
which such contributions were made.
(c) Actual Contribution Percentage. The Actual
Contribution Percentage ("ACP") for a specified group of
Participants for a Plan Year shall be the average of 100
times the result (calculated separately for each Participant
in such group) obtained by dividing (1) the sum of Post-1986
Employee Matched Contributions, Post-1986 Employee Unmatched
Contributions, Employer Matching Contributions, Employer
Special Section 401(k) Contributions (the latter two to the
extent elected by the Committee and to the extent not used
in the calculation of the Required ADP Test) and, to the
extent that the Committee in its discretion so elects,
Employee Elected Contributions actually paid to the Plan for
each such Participant for such Plan Year by (2) the
Employee's Pay for the Plan Year. As soon as practicable
after the end of the Plan Year, the Committee shall
calculate the ACPs for the Plan Year for the group of
Participants who are eligible to make elections under
subsection 4.1 for the Plan Year and who are Highly
Compensated Employees and for the group of Participants who
are Non-highly Compensated Employees. If a Related Plan to
which employee contributions or matching contributions are
made and the Plan are treated as one plan for purposes of
Sections 401(a)(4) or 410(b) of the Code, such plans shall
be treated as one plan under subsections 4.5(c) and 4.5(d).
-31-
If a Highly Compensated Employee is eligible to participate
in a Related Plan to which matching contributions or
employee contributions are made, all such plans shall be
treated as one plan for purposes of determining the actual
contribution percentage for such Participant.
(d) Required Actual Contribution Percentage Test and
Adjustment. The ACP for the group of Highly Compensated
Employees, as defined in paragraph (f), for any Plan Year
shall not exceed both (1) and (2) ("Required ACP Test"),
below:
(1) the ACP for the Non-highly Compensated
Employees multiplied by 1.25, and
(2) the lesser of (A) the ACP for the
Non-highly Compensated Employees multiplied by 2 or
(B) the Contribution Percentage for the Non-highly
Compensated Employees plus 2%.
If the Required ACP Test for a Plan Year is not met, and if
the Company does not elect to have Special Section 401(k)
Contributions with respect to the Plan Year sufficient to
result in the ACP of the Highly Compensated Employees not
exceeding both the amounts in subsections 4.5(b)(1) and (2),
then the Committee shall reduce Post-1986 Employee
Contributions that Participants who are Highly Compensated
Employees may defer (by reducing first the Post-1986
Employee Contributions of the Participant with the highest
Actual Contribution Percentage to equal that of the Highly
Compensated Employee with the next highest Actual
Contribution Percentage and repeating such reductions until
the ACP for the Highly Compensated Employees does not exceed
the amount in both subsections 4.5(d)(1) and 4.5(d)(2)).
Such excess and any income allocable thereto as determined
in accordance with subsection 4.7 shall be distributed to
the Participant not later than the December 31 of the Plan
Year after the Plan Year with respect to which such
contributions were made.
(e) Excess Deferrals. If the sum of a Participant's
Employee Elected Contributions under the Plan and his
elected deferrals under any other 401(k) plan exceed the
Limit on Employee Elected Contributions as defined in
subsection 4.1(c) for a taxable year, ("Excess Deferrals")
the Participant may not later than March 1 following the
close of such taxable year (or, such later date as may be
permitted by the Committee) allocate such Excess Deferrals
among the plans to which they were made and not later than
April 15 following the close of such taxable year, any
amount so allocated to the Plan shall be distributed to the
Participant. If a Participant is a participant in any plan
-32-
described in Code Section 403(b) under which the Participant
makes elective deferrals, the limit on Employee Elected
Contributions shall be determined for purposes of this
subsection 4.5(e) in accordance with the provisions of Code
Sections 402(g)(4) and 402(g)(8) with respect to any
Participant who participates in a plan described in Section
403(b) or who is a qualified employee in a plan of a
qualified organization (as defined in Code Section
402(g)(8)) for a calendar year.
(f) Reductions of Employer Matching Contributions.
If Employee Elected Matched Contributions for a Plan Year
are reduced in accordance with subsection 4.5(b) or 4.5(e)
or if Post-1986 Employee Matched Contributions are reduced
in accordance with subsection 4.5(d) and such contributions
are distributed to the Participant, any Employer Matching
Contributions allocated with respect thereto (and any income
allocable thereto in accordance with subsection 4.7) shall
be reduced and distributed to the Participant not later than
the last day of the following Plan Year.
4.6 Multiple Use of Alternative Limitations. If after any
reduction provided for in subsection 4.5 is made, the average ADP
of Highly Compensated Employees exceeds the amount in subsection
4.5(b)(1) but does not exceed the lesser of the amounts in
subsection 4.5(b)(2) and the average ACP of Highly Compensated
Employees exceeds the amount in subsection 4.5(d)(1) but does not
exceed the lesser of the amounts in subsection 4.5(d)(2), the sum
of the average ADP and the average ACP for a Plan Year, of the
Highly Compensated Employees who are Participants (i) shall not
exceed the greater of (a) or (b), where:
(a) is the sum of (1) plus (2), where:
(1) is one hundred and twenty-five percent
(125%) of the greater of (A) the ADP for such Plan
Year of the Non-highly Compensated Employees who are
Participants, or (B) the ACP for such Plan Year of
such Non-highly Compensated Employees; and
(2) is two (2) plus the lesser of the amount
determined under subsection 4.6(a)(1)(A) or the amount
determined under subsection 4.6(a)(1)(B), but in no
event shall this amount exceed two hundred percent
(200%) of the lesser of the amount determined under
subsection 4.6(a)(1)(A) or the amount determined under
subsection 4.6(a)(1)(B).
(b) is the sum of (1) plus (2), where:
(1) is one hundred and twenty-five percent
(125%) of the lesser of (A) the ADP for such Plan Year
-33-
of the Non-highly Compensated Employees who are
Participants, or (B) the ACP for such Plan Year of
such Non-highly Compensated Employees; and
(2) is two (2) plus the greater of the amount
determined under subsection 4.6(b)(1)(A) or the amount
determined under subsection 4.6(b)(1)(B), but in no
event shall this amount exceed two hundred percent
(200%) of the greater of the amount determined under
section 4.6(b)(1)(A) or the amount determined under
subsection 4.6(b)(1)(B).
The Committee may establish, from time to time, such rules,
restrictions and limitations as it may deem appropriate to insure
that the greater of (a) and (b) is not exceeded. If the
Committee determines that the reduction or disallowance of Member
elections or Employee Elected Contributions is necessary with
respect to Highly Compensated Employees, the Committee may reduce
or disallow Employee Elected Contributions and the income thereon
as determined pursuant to subsection 4.7 for such Highly
Compensated Employees, including elections for Employee Elected
Contributions already made for the Plan Year, as provided in
subsection 4.5(b) or 4.5(d).
4.7 Allocation of Income. Income equal to the sum of the
amounts determined under (a) and (b) below shall be allocated to
and distributed with any amounts distributed to a Member pursuant
to subsections 4.5(b), 4.5(d) or 4.6 as follows:
(a) Income for Plan Year. Income for a completed
Plan Year with respect to contributions distributed in
accordance with subsection 4.1(c), 4.5(b), 4.5(d) or 4.6
shall equal the income for the Plan Year allocable to a
Member's Net Balance Account for such contributions (taking
the contributions allocated to each different type of
Account, separately) multiplied by a fraction the numerator
of which is the amount of such Contributions so distributed
and the denominator of which is the total of such account
balance as of the last day of the Plan Year reduced by all
earnings and gains and increased by all losses allocable to
such accounts for the Plan Year.
(b) Income for Period Between End of Plan Year and
Distribution. Income for the period between the end of a
Plan Year and the date of a distribution pursuant to
subsection 4.1(c), 4.5(b), 4.5(d) or 4.6 shall equal the
product of the number of calendar months which have elapsed
since the end of the preceding Plan Year and the date of the
distribution multiplied by 10 percent multiplied by the
income allocated to such distributed amounts under
subsection 4.7(a). For the purpose of determining the
number of calendar months which have elapsed, a distribution
-34-
occurring on or before the fifteenth day of the month will
be treated as having been made on the last day of the
preceding month, and a distribution occurring after such
fifteenth day will be treated as having been made on the
first day of the next month.
(c) Allocation of Distributed Income to Accounts.
Income distributed with any amounts distributed to a
Participant pursuant to subsection, 4.5(b), 4.5(d) or 4.6
shall reduce the income allocated to a Member's Employee
Elected Contribution Account or Employer Matching
Contribution Account, in accordance with subsection 6.6, in
an amount equal to the total amount of such income
distributed.
4.8 Limitations on Contributions.
(a) Notwithstanding the provisions of subsections
4.1, 4.2 and 4.3 hereof, for any Plan Year the "Annual
Additions" of any Member shall not exceed the lesser of
(1) 25 percent of the Member's Pay or (2) the greater of
$30,000 or 25 percent of the dollar limitation in effect
under Code Section 415(b)(1)(A) for the Plan Year ($98,064
in 1989, adjusted in subsequent years for cost of living
adjustments determined in accordance with regulations
prescribed by the Secretary of Treasury or his delegate
pursuant to the provisions of Code Section 415(d)) ("Maximum
Annual Addition").
(b) "Annual Additions" means the sum of:
(1) Employer Contributions and Remainders
allocated to the Member's accounts pursuant to the
provisions of subsection 4.2 or 4.3.
(2) Employee Elected Matched Contributions.
(3) Employee Elected Unmatched Contributions.
(4) All Employer contributions and forfeitures
allocated to such Member under any other defined
contribution plan of the Employer (or of a Commonly
Controlled Entity or member of an Affiliated Service
Group).
(5) Solely with respect to the limitation
under subsection 4.8(a)(2) contributions allocated to
any individual medical account (as defined in Code
Section 401(h)) which is part of a defined benefit
plan maintained by an employer as provided in Code
Section 415(l) and any amount attributable to
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post-retirement medical benefits allocated to an
account established under Code Section 419(e)(1).
(6) Post-1986 Employee Matched Contributions.
(7) Post-1986 Employee Unmatched Contributions
and the Member's employee contributions under any
other plan of the Employer (or Commonly Controlled
Entity).
(8) Employer Special Section 401(k)
Contributions.
Notwithstanding the foregoing, if a Member
participates in any Related Defined Benefit Plan of the
Employer (or Commonly Controlled Entity or member of an
Affiliated Service Group), the sum of the "Defined Benefit
Plan Fraction" (as defined in subsection 4.8(d)) and the
"Defined Contribution Plan Fraction" (as defined in
subsection 4.8(d)(1)) for such Member shall not exceed 1.0
(called the "Combined Fraction"). If for any Plan Year the
Combined Fraction of a Member exceeds 1.0 after applying any
applicable limits on benefits of any such Related Defined
Benefit Plans, the Maximum Annual Addition of such Member
shall be reduced to the extent necessary to reduce the
Combined Fraction of such Member to 1.0.
(c) Application of Limitations. If for any Plan
Year a Member's actual Annual Additions exceed his Maximum
Annual Additions for such Plan Year, such excess (called the
"Annual Excess") shall not be contributed to the Trust or,
if contributed, shall not be allocated to such Member's
accounts, but shall be treated in the following manner:
(1) The Member's share of Employer
Contributions and Remainders, if any, allocated under
subsection 4.2(b)(4) shall be reduced up to the amount
of the Annual Excess.
(2) If any Annual Excess remains after
application of paragraph (1), the Member's share of
Employer Matching Profit Sharing Contributions and
Remainders, if any, allocated under subsection
4.2(b)(3) shall be reduced by the balance of his
Annual Excess.
(3) If any Annual Excess remains after
application of paragraph (2), the Member's share of
Employer Contributions and Remainders, if any,
allocated under subsection 4.2(b)(2) shall be reduced
by the balance of his Annual Excess.
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(4) If any Annual Excess remains after
application of paragraph (3), the Member's share of
Employer Matching Profit Sharing Contributions and
Remainders, if any, allocated under subsection
4.2(b)(1), shall be reduced by the balance of his
Annual Excess.
(5) If any Annual Excess remains after
application of paragraph (4), the Member's share of
Employer Special Section 401(k) Contributions
allocated to the Member's account under subsection 4.3
shall be reduced by the balance of his Annual Excess.
(6) If any Annual Excess remains after
application of paragraph (5), the Member's Post-1986
Employee Unmatched Contributions shall be reduced by
the balance of his Annual Excess. Any reductions in a
Member's Post-1986 Employee Unmatched Contributions
contributed to the Trust and any earnings thereon
shall be refunded to the Member as soon as
administratively convenient.
(7) If any Annual Excess remains after
application of paragraph (6), the Member's Post-1986
Employee Matched Contributions shall be reduced by the
balance of his Annual Excess. Any reductions in a
Member's Post-1986 Employee Matched Contributions
contributed to the Trust and any earnings thereon
shall be refunded to the Member as soon as
administratively convenient.
(8) If any Annual Excess remains after
application of paragraph (7), the Member's Employee
Elected Unmatched Contributions shall be reduced by
the balance of his Annual Excess. Any reductions in a
Member's Employee Elected Unmatched Contributions
contributed to the Trust and any earnings thereon
shall be refunded to the Member as soon as
administratively convenient.
(9) If any Annual Excess remains after
application of paragraph (8), the Member's share of
Employee Elected Matched Contributions shall be
reduced by the balance of his Annual Excess. Any
reductions in a Member's Employee Elected Matched
Contributions contributed to the Trust and any
earnings thereon shall be refunded to the Member.
(10) If a Member's allocations of Employer
Contributions and Remainders are reduced under
paragraphs (1) through (5) of subsection 4.8(c), the
amount shall be provided to the Member under the
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Chicago and North Western Railway Company Excess
Benefit Retirement Plan (called the Chicago and North
Western Transportation Company Excess Benefit
Retirement Plan until May 5, 1994) to the extent
therein provided.
(d) The "Defined Benefit Plan Fraction" applicable
to a Participant for any Plan Year is a fraction, the
numerator of which is the sum of the Projected Annual
Benefit of the Member under all the defined benefit plans of
the Employer (and Commonly Controlled Entity or member of an
Affiliated Service Group) in which he participates
(determined as of the close of the Plan Year) and the
denominator of which is the lesser of (i) the product of
1.25 multiplied by the maximum dollar limitation on a
Member's Projected Annual Benefit if the Plan provided the
maximum benefit allowable under Code Section 415(b) for such
Plan Year, or (ii) the product of 1.4 multiplied by 100% of
the Member's Highest Average Compensation.
Notwithstanding the above, if the Member was a
participant in one or more defined benefits plans of the
Employer or a Commonly Controlled Entity or member of an
Affiliated Service Group which were in existence on July 1,
1982, the denominator of this fraction will not be less than
1.25 multiplied by the sum of the annual benefits under such
plans which the Member has accrued as of December 31, 1982.
The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code as in effect at the
end of the 1982 limitation year.
Notwithstanding the above, if the Participant was a
participant in one or more defined benefit plans maintained
by an Employer which were in existence on May 6, 1986, the
Participant's maximum annual retirement benefit will not be
less than the sum of the annual benefits under such plans
which the Participant had accrued as of the last day of the
plan year commencing before January 1, 1987, without regard
to changes in the terms and conditions of the plans after
May 5, 1986 or in the cost of living adjustments occurring
after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements under Section 415 of the Internal
Revenue Code as in effect at the end of the 1986 limitation
year.
(1) The "Defined Contribution Plan Fraction"
applicable to a member for any Plan Year is a
fraction, the numerator of which is the sum of the
Member's Annual Additions as of the close of such Plan
Year for that Plan Year and for all prior Plan Years
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under all of the Related Plans in which he
participates, and the denominator of which is the sum
of the lesser of the following amounts (determined for
such Plan Year and for each prior Plan Year of service
with the Employer, any Commonly Controlled Entity or
member of an Affiliated Service Group regardless of
whether a plan was in existence during those years):
(i) the product of 1.25 multiplied by the dollar
limitation in effect under Code Section 415(c)(1)(A)
for the Plan Year (determined without regard to the
special dollar limitation for employee stock ownership
plans), or (ii) the product of 1.4 multiplied by
twenty-five percent of the Member's Pay for the Plan
Year.
Notwithstanding the foregoing, at the election of the
Committee made in accordance with Code Section 415(e)(6) in
determining the Defined Contribution Plan Fraction for any
Plan Year ending after December 31, 1982, the denominator of
the Defined Contribution Plan Fraction with respect to each
Member for all Plan Years ending before January 1, 1983
shall be changed to an amount equal to the product of
(i) the denominator determined as described above for the
Plan Year ending in 1982, multiplied by (ii) a fraction,
(the "Transition Fraction") the numerator of which is the
lesser of (A) $51,875 or (B) 1.4 multiplied by twenty-five
percent of the Pay of the Member for the Plan Year ending in
1981, and the denominator of which is the lesser of
(A) $41,500 or (B) twenty-five percent of the Pay of the
Member in the Plan Year ending in 1981.
For the purpose of determining the Member's Defined
Contribution Fraction, any employee contributions made to
the Plan or to a Related Plan before January 1, 1987, shall
be considered Annual Additions only to the extent that they
were counted under the Plan as then in effect. In
calculating the Defined Contribution Fraction for Plan Years
before January 1, 1989, the $200,000 limit on Pay which
became effective on that date shall be ignored.
(2) Definitions
(A) "Highest Average Compensation" means the
average of a Member's highest Pay for three
consecutive Plan Years (determined as of the close of
the Plan Year) of employment with the employer (or the
actual number of years of employment for those Members
who are employed for less than three consecutive years
with the employer).
(B) "Projected Annual Benefit" means the
annual benefit a Member would receive from employer
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contributions under a defined benefit plan, adjusted,
in the case of any benefit payable in a form other
than a single life annuity or a qualified joint and
survivor annuity, to the actuarial equivalent of a
single life annuity, assuming (i) the Member continued
employment until reaching the plan's normal retirement
age (or his current age, if later), (ii) his
compensation remained unchanged and (iii) all other
relevant factors used to determine benefits under the
plan remained constant in the future.
4.9 Deadline for Contributions. Each Employer shall
contribute on behalf of each Participant the Employee Elected
Contributions and Post-1986 Employee Contributions for each Plan
Year to the Trustee, at such time as the Company shall from time
to time determine, as of the earliest date on which such
contributions can reasonably be segregated from the Employer's
general assets but not later than the earlier of (1) 90 days from
the date on which such amounts would otherwise have been payable
to the Active Participant in cash or (2) 30 days after the last
day of the Plan Year. Employer Contributions for each Plan Year
shall be paid to the Trustee not later than the due date of the
Employer's federal income tax return, including any extensions
thereof, for the calendar year with which the Plan Year ends.
4.10 Order of Application of the Limitations of Subsections
4.1(c), 4.5(b), 4.5(d), 4.6 and 4.8. Subsection 4.1(c) shall be
first applied to contributions under the Plan, second, subsection
4.5(b) shall be applied to contributions under the Plan, third,
subsection 4.5(d) shall be applied to contributions under the
Plan, fourth, subsection 4.6 shall be applied to contributions
under the Plan and, last, subsection 4.8 shall be applied to
contributions under the Plan.
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Section 5. Benefits
5.1 Payment of Benefits in General. A Participant's
benefits under this Plan shall be payable in accordance with the
provisions of this Article.
(a) If a Member has a Termination of Employment
because of retirement on or after his Normal Retirement Age,
Disability, or for any other reason other than death, the
vested portion of the Member's Net Balance Account shall be
payable in accordance with and subject to the limitations of
subsection 5.2.
(b) If a Member dies, his vested Member's Net
Balance Account shall be payable to his surviving spouse if
he is married; or to his other Beneficiary or Beneficiaries
if he is not married, or if he is married and names a
Beneficiary other than his surviving spouse in accordance
with subsection 5.3(e) in accordance with and subject to the
limitations of subsection 5.3.
(c) A Member may elect to receive a withdrawal of
all or part of the vested portion of his Member's Net
Balance Account in accordance with and subject to the
limitations of subsection 5.7.
(d) If a Member is otherwise entitled to a
distribution on account of retirement on or after Normal
Retirement Age, Disability, death or other Termination of
Employment, the Committee shall distribute Member's Net
Balance Accounts with small vested balances in accordance
with and subject to the limitations of subsection 5.8,
notwithstanding the provisions of subsections 5.2 and 5.3.
5.2 Payment of the Vested Portion of the Member's Net
Balance Account on Termination of Employment.
(a) Automatic Form of Distribution. If a Member has
a Termination of Employment for any reason other than the
Member's death and
(1) if any portion of the Member's Net Balance
Account is used to offset benefits in a Related
Defined Benefit Plan, unless the Member with his
spouse's consent as provided in subsections 5.6 and
5.7, elects to waive the Qualified Joint and Survivor
Pension and to receive a lump sum payment or
installment payments, as provided in subsection
5.2(b), the vested portion of the Member's Net Balance
Account shall be paid in the form of a Qualified Joint
and Survivor Pension in accordance with
subsection 5.5. Any Member's election to waive the
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Qualified Joint and Survivor Pension as provided in
this subsection 5.2(a)(1) shall apply to his entire
Member's Net Balance Account.
(2) if no portion of the Member's Net Balance
Account is used to offset benefits in a Related
Defined Benefit Plan, unless the Member elects in
accordance with subsection 5.2(b) to receive benefits
in a lump sum or installments, the vested portion of
the Member's Net Balance Account shall be distributed
to the Member in a lump sum within a reasonable time
after the last Accounting Date preceding the Member's
Required Beginning Date but before the Required
Beginning Date.
(b) Optional Forms of Distribution. If a Member has
a Termination of Employment for any reason other than the
Member's death, he may elect subject to subsection 5.2(a) to
have his vested Member's Net Balance Account (determined in
accordance with subsection 6.6) and any contributions with
respect thereto made to the Trust since the immediately
preceding Valuation Date or Accounting Date reduced by any
distributions made since such Valuation Date distributed at
such time as the Member shall elect in one lump sum, in
installment payments or in a combination of both; provided
that if a Member elects to receive such distribution before
the date of his Termination of Employment, the vested
portion of his Member's Net Balance Account will be valued
for purposes of a single sum distribution or the first
installment distribution as of the Valuation Date or
Accounting Date immediately preceding the date of his
Termination of Employment and if a Member does not elect
before the date of his Termination of Employment to receive
a distribution within a reasonable time thereafter, the
vested portion of his Member's Net Balance Account will be
valued for the purpose of such distribution as of the
Valuation Date or Accounting Date which next follows (by at
least 30 days or such lesser period as the Committee shall
from time to time permit) the date such distribution is
requested and will be distributed or commence to be
distributed within a reasonable time after such Valuation
Date or Accounting Date.
(c) Installment Payments. If a Member elects
installment payments in accordance with subsection 5.2(b),
such installments shall be paid annually, over a period
certain, not in excess of the life expectancy of the Member
or the joint and last survivor life expectancy of the Member
and his Beneficiary determined as provided in subsection
5.2(e), if such Beneficiary is an individual, in an amount
at least equal to the vested portion of the Member's Net
Balance Account as of the Accounting Date for the Plan Year
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preceding the Plan Year in which distributions commence
divided by the applicable life expectancy.
Notwithstanding the foregoing, commencing with the
Required Beginning Date each installment payment shall be an
amount not less than the amount determined by dividing the
Member's Net Balance Account as of the Accounting Date
immediately preceding the Plan Year for which the payment is
being made by the Member's life expectancy or the joint and
last survivor life expectancy of the Member and his
Beneficiary, as applicable, determined as provided in this
subsection; provided that if the Member's Beneficiary is not
his spouse:
(1) effective for Plan Years commencing before
January 1, 1989 the period over which installments are
paid shall not be longer than the period which would
result in the Member being expected, as of the date
benefit payments commence, to receive more than 50
percent (50%) of the value of the vested portion of
the Member's Net Balance Account; and
(2) effective for Plan Years commencing on or
after December 31, 1988, a distribution shall be made
for the Plan Year in which the Member attains the age
of 70-1/2 by the Required Beginning Date and for each
Plan Year thereafter by December 31 of the Plan Year
and the distribution shall not be less than the vested
portion of the Member's Net Balance Account as of
preceding Accounting Date divided by the following
applicable divisor:
Attained
Age of Member on
Birthday in Calendar Year Applicable Divisor
70 26.2
71 25.3
72 24.4
73 23.5
74 22.7
75 21.8
76 20.9
77 20.1
78 19.2
79 18.4
80 17.6
81 16.8
82 16.0
83 15.3
84 14.5
85 13.8
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86 13.1
87 12.4
88 11.8
89 11.1
90 10.5
91 9.9
92 9.4
93 8.8
94 8.3
95 7.8
96 7.3
97 6.9
98 6.5
99 6.1
100 5.7
101 5.3
102 5.0
103 4.7
104 4.4
105 4.1
106 3.8
107 3.6
108 3.3
109 3.1
110 2.8
111 2.6
112 2.4
113 2.2
114 2.0
115 and older 1.8
In no event shall annual installment payments be permitted
if the first annual installment payment would be less than
$500.
(d) Distributions to Disabled Members. If a Member
entitled to receive distributions under this subsection 5.2
receives payments under Employer's long term disability
plan, distributions shall not commence under this
subsection 5.2 until the earlier of the date such Member's
payments cease under the Employer's long term disability
plan or the date such Member attains age 65; provided
however, that, if such Member receives payment under
Employer's long term disability plan, prior to the date such
Member attains age 65 and if the Member consents, the
Committee may distribute from time to time to such Member
such portions (or all) of such Member's Net Balance Account
as the Committee determines to be necessary for the health,
support or maintenance of such Member.
(e) Determination of Life Expectancy. The life
expectancy of a Member and of his Beneficiary and the joint
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and last survivor life expectancy of the Member and his
Beneficiary shall be determined on the person's birthday in
the year in which the Member attains the age of 70-1/2 or
for which distributions are otherwise required to commence
as of the date installment payments commence pursuant to
Section 5.2(c) and shall be reduced by one for each calendar
year which has elapsed since the date on which such life
expectancy or joint and last survivor life expectancy was
determined. Except for such annual reductions, a Member's
life expectancy or the joint and last survivor life
expectancy of the Member and his Beneficiary shall not be
subject to subsequent redetermination.
(f) Changing Benefit Elections. A Member (with the
consent of his spouse as provided in subsection 5.7 if any
portion of his vested Member's Account is used to offset
benefits in a Related Defined Benefit Plan) may elect to
change the method and timing of payments; however, payments
shall be made not less rapidly than otherwise permitted in
this subsection 5.2.
5.3 Payment of Vested Member's Net Balance Account on
Death.
(a) Death of Member before Annuity Starting Date.
(1) Member's Net Balance Account Is Offset
Under a Related Defined Benefit Plan. If any portion
of the Member's Net Balance Account is used to offset
benefits in a Related Defined Benefit Plan and if the
Member dies before his vested Member's Net Balance
Account has been transferred to the Chicago and North
Western Railway Company Supplemental Pension Plan
(called the Chicago and North Western Transportation
Company Supplemental Pension Plan until May 5, 1994)
in accordance with subsection 5.5 and before the
vested portion of his Member's Net Balance Account has
been paid or commenced to be paid hereunder, unless
the Member elects, with his surviving spouse's consent
in accordance with subsection 5.7, or the surviving
spouse elects in accordance with subsection 5.6(b) to
waive the Surviving Spouse's Pension and to receive
the entire vested portion of the Member's Net Balance
Account in a lump sum or installments as provided in
subsections 5.3(b) or (c), the vested portion of the
Member's Net Balance Account shall be paid in the form
of a Surviving Spouse's Pension in accordance with
subsection 5.5.
(2) Member's Net Balance Account is Not Offset
Under a Related Defined Benefit Plan. If no portion
of the Member's Net Balance Account is used to offset
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benefits in a Related Defined Benefit Plan and if the
Member dies before his vested Member's Net Balance
Account has been distributed or has commenced to be
distributed and before the Member's Required Beginning
Date, the vested portion of the Member's Net Balance
Account shall be paid as elected by the Member or his
Beneficiary (designated in accordance with subsection
5.3(e)) as provided in subsection 5.3(b) or 5.3(c).
(b) Death of Member After Required Beginning Date.
Notwithstanding any other provisions of this Plan, or any
elections made by the Member or his Beneficiary if a Member
dies after his Required Beginning Date, but before the
entire vested portion of his Member's Net Balance Account is
distributed or transferred to the Chicago and North Western
Railway Company Supplemental Pension Plan (called the
Chicago and North Western Transportation Company
Supplemental Pension Plan until May 5, 1994), the balance of
the vested portion of his Member's Net Balance Account shall
be distributed to his surviving spouse or other Beneficiary
designated with his spouse's consent in accordance with
subsection 5.7 at least as rapidly as under the method of
distribution in effect on the date of the Member's death.
(c) Death of Member Before Required Beginning Date.
Notwithstanding any other provisions of this Plan but
subject to subsection 5.3(a)(1) or (2), as applicable, if a
Member dies at a time when his benefits are not being paid
in the form of a Qualified Joint and Survivor Pension,
before the entire vested portion of his Member's Net Balance
Account has been distributed and before his Required
Beginning Date, the vested portions of his Member's Net
Balance Account shall be paid to his Beneficiary within five
(5) years of the Member's death; except that any part of the
vested portion of his Member's Net Balance Account may be
paid in installments (i) to his Beneficiary, if his
Beneficiary is an individual, over a period not exceeding
such individual's life expectancy, (ii) to the extent
permitted under applicable regulations or rulings, to a
Trust for the benefit of an individual Beneficiary over a
period not exceeding such individual's life expectancy or
(iii) to the extent permitted by applicable regulations or
rulings to a trust for the benefit of more than one
individual Beneficiary over a period not exceeding the
shortest life expectancy of any such individual Beneficiary
beginning no later than:
(1) the last day of the Plan Year after the
Plan Year of the Member's death, or
(2) if later and if the Beneficiary is the
Member's surviving spouse, not later than the date on
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which the Member would have attained the age of 70-1/2
years.
The period over which the foregoing installment payments may
be paid shall be determined based upon the applicable life
expectancy of the Beneficiary as determined on his birthday
in the year in which benefit payments are required to
commence in accordance with this subsection 5.3(c). The
amount of each annual installment payment shall be at least
as large as the Member's Net Balance Account as of the
Accounting Date for the Plan Year preceding the Plan Year of
distribution divided by the life expectancy of the
Beneficiary determined in accordance with subsection 5.2(e).
If the surviving spouse of a Member is the
Beneficiary, and dies before distributions have begun to the
surviving spouse, distributions shall be made not later than
nor over a longer period than would be permitted in
accordance with the preceding portions of subsection 5.3(c)
if the date of the spouse's death were the date of the
Member's death.
If a Beneficiary has commenced to receive a
distribution under this subsection 5.3(c), and such
Beneficiary dies before the entire vested portion of the
Member's Net Balance Account has been distributed, the
remainder of the vested portion of the Member's Net Balance
Account shall be distributed to the Beneficiary's estate.
(d) Payment to Beneficiary. On the death of a
Member, the vested portion of the Member's Net Balance
Account shall be paid (1) in the form of a Surviving
Spouse's Pension, if the Member's Net Balance Account is
offset under a Related Defined Benefit Plan, as provided in
subsection 5.2(a)(1), or in the form of one lump sum or
annual installments as elected by the Member to the Member's
surviving spouse, if the Member's Net Balance Account is not
so offset, as provided in subsection 5.2(a)(2), or (2) to
another Beneficiary or Beneficiaries designated by the
Member in accordance with subsection 5.3(e) with his
surviving spouse's consent in accordance with subsection
5.7, unless such Beneficiary or Beneficiaries elect (and
they are not prohibited by an election of the Member from so
electing) to defer or otherwise change the timing or form of
the receipt of the vested portion of the Member's Net
Balance Account. If the Member's Net Balance Account is not
required to be paid in the form of a Surviving Spouse's
Pension in accordance with subsection 5.2(a)(1) and if the
Member fails to elect a form of payment and his Beneficiary
fails to elect a form of payment within a reasonable time
after the Member's death, the vested portion of the Member's
-47-
Net Balance Account shall be paid in one lump sum to the
Member's Beneficiary.
(e) Designation of Beneficiary.
(1) On the death of a Member, whose Member's
Net Balance Account is not required to be paid in the
form of a Surviving Spouse's Pension in accordance
with subsection 5.2(a)(l), after payment of the vested
portion of his Member's Net Balance Account has
commenced to be paid and before the entire vested
portion of his Member's Net Balance Account has been
paid from the Plan, if the Member has a surviving
spouse, the Trustee shall pay the vested portion of
the Member's Net Balance Account (or remaining
Member's Net Balance Account, if any) to the Member's
surviving spouse, unless the Member (with his spouse's
consent in accordance with subsection 5.7) has named
another Beneficiary. If the Member does not have a
surviving spouse or if the member (with his spouse's
consent in accordance with subsection 5.7), has named
a Beneficiary other than his surviving spouse the
Trustee shall pay the vested portion of the Member's
Net Balance Account (or the remaining vested portion
of the Member's Net Balance account if any) to his
Beneficiary. To the extent the vested portion of the
Member's Net Balance Account is payable to his
surviving spouse, such spouse shall be treated as the
Member's Beneficiary under this Plan.
(2) On the death of a Member, whose Member's
Net Balance Account is not required to be paid in the
form of a Surviving Spouse's Pension in accordance
with subsection 5.2(a)(1), before payment of the
vested portion of his Member's Net Balance Account has
commenced to be paid, has been paid or has been
transferred to the Supplemental Pension Plan for
payment in the form of a life annuity, in accordance
with subsection 5.5, if the Member with his spouse's
consent in accordance with subsection 5.7 has waived
the Surviving Spouse's Pension, the Member's
Beneficiary shall be his surviving spouse unless the
Member with the consent of his spouse in accordance
with subsection 5.7, designates another Beneficiary or
Beneficiaries and the form in which the benefit is to
be paid on a Beneficiary Designation Form provided by
the Committee which may be changed from time to time
by filing a new Beneficiary Designation Form with the
Committee. No designation of Beneficiary or change of
Beneficiary shall be effective until it has been
delivered by the Member to the Committee and a copy of
such designation acknowledged by the Committee has
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been returned to the Member. If a Member is not
married or is married but designates, with his
spouse's consent in accordance with subsection 5.7, a
Beneficiary or Beneficiaries other than his surviving
spouse, and if such Member shall fail to file a valid
Beneficiary Designation Form, or if all persons
designated on the Beneficiary Designation Form shall
have predeceased the Member (or, in the case of a
Beneficiary other than an individual, shall have
ceased to exist prior to the Member's death), the
Trustee shall distribute the part of such vested
portion of the Member's Net Balance Account which is
subject to the Beneficiary Designation Form in one
lump sum to the Member's surviving spouse, if any,
and, if not, to the Member's estate.
(f) Payments to a Minor Child. Any amount paid to a
child, in accordance with regulations prescribed by the
Secretary of the Treasury, shall be treated as if it had
been paid to the Member's surviving spouse if such amount
will become payable to the surviving spouse upon such child
reaching majority (or such other events as the Secretary of
the Treasury may by regulations prescribe).
5.4 Withdrawals. Withdrawals from the accounts of a
Member may be made prior to his Termination of Employment in
accordance with this subsection 5.4; provided that if a portion
of the Member's Net Balance Account is used to offset benefits in
a Related Defined Benefit Plan, such withdrawal shall be
distributed in the form of a Qualified Joint and Survivor Pension
as provided in subsection 5.5, unless the Member with his
spouse's consent in accordance with subsection 5.7 elects to
waive the Qualified Joint and Survivor Annuity and to receive
such withdrawal in a single payment.
(a) Elective Withdrawals of Contributions from the
Employee Matched Contribution Account. A Member may at any
time file application for a withdrawal distribution of all
or any part of his Employee Matched Contributions credited
to his Employee Matched Contribution Account, or the value
of such withdrawable contributions, if lower, provided
that -
(1) such withdrawal shall not include any
Employee Matched Contributions that have not been
credited to such account for at least 60 months, nor
any earnings and gains on Employee Matched
Contributions; and
(2) the minimum withdrawal under this
paragraph (a) shall be an amount equal to the smaller
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of (i) 50% of the amount otherwise withdrawable
hereunder or (ii) $1,000.
In no event shall any Member be permitted to
make more than one such withdrawal in any Plan Year, unless
the Member has incurred a Hardship as determined by the
Committee under rules adopted by the Committee and applied
to all such Members in a nondiscriminatory manner.
(b) Hardship Withdrawal of Contributions from the
Employee Matched Contribution Account. A Member who has
withdrawn (or who is concurrently applying to withdraw) the
maximum amount permitted under paragraph (a) above may at
any time file application for a withdrawal distribution of
all or any part of his Employee Matched Contributions which
have been credited to his Employee Matched Contribution
Account for less than 60 months, or the value of such
withdrawable contributions, if lower. Such application
shall not be approved by the Committee unless the Member has
incurred a Hardship as determined by the Committee under
rules adopted by the Committee and applied to all such
Members in a nondiscriminatory manner. The amount of such
withdrawal distribution shall not exceed the amount required
to meet the immediate financial need created by Hardship as
determined by the Committee, and if approved, shall be paid
from the Member's Employee Matched Contribution Account.
(c) Withdrawal of Earnings and Gains on Employee
Matched Contributions. A Member who has withdrawn (or who
is concurrently applying to withdraw) the maximum amount
permitted under paragraphs (a) and (b) above may at any time
file application for a withdrawal distribution of an amount
not more than the net earnings and gains, if any, of the
Trust Fund attributable to his Employee Matched
Contributions that are then withdrawable under
paragraphs (a) and (b) above. Such application shall not be
approved by the Committee unless the Member has incurred a
Hardship as determined by the Committee under rules adopted
by the Committee and applied to all such Members in a
nondiscriminatory manner. The amount of such withdrawal
distribution shall not exceed the amount required to meet
the immediate financial need created by the Hardship, and if
approved shall be paid from the Member's Employee Matched
Contribution Account.
(d) Hardship Withdrawals from Employee Elected
Matched Contribution Account, Employee Elected Unmatched
Contribution Account, Post-1986 Employee Matched
Contribution Account, Post-1986 Employee Unmatched
Contribution Account and Employer Contribution Account. A
Member who has withdrawn (or who is concurrently applying to
withdraw) the maximum amount permitted under paragraphs (a),
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(b), (c) and (f) of this subsection 5.4, if any, may at any
time file application for a withdrawal on account of
Hardship of all or any part of his Post-1986 Employee
Unmatched Contribution Account, Post-1986 Employee Matched
Contribution Account, Employee Elected Unmatched
Contribution Account, Employee Elected Matched Contribution
Account, and the vested portion of his Employer Contribution
Account; provided that withdrawals shall be made from the
aforementioned accounts in the order listed above and
further provided that:
(1) No withdrawal on account of Hardship shall
be permitted of any portion of a Participant's
Employer Contribution Account that is attributable to
Employer Contributions and Remainders allocated to him
pursuant to subsection 4.2(b)(2) (or an Integrated
Allocation made under the CNW Corporation Profit
Sharing and Retirement Savings Program for periods
before January 1, 1989) (relating to Railroad
Retirement Excess Pay or Social Security Excess Pay).
(2) The maximum amount withdrawable on account
of Hardship shall not exceed the amount required to
meet the immediate financial need created by Hardship.
(3) Employer Matching Profit Sharing
Contributions (and the earnings and appreciation
thereon) and the earnings and appreciation credited to
Participants' Employee Elected Matched Contributions
and to Employee Elected Unmatched Contributions with
respect to periods commencing on or after January 1,
1989, allocated with respect thereto shall not be
withdrawn on account of Hardship.
(e) Effect of Withdrawals. A Member who receives a
withdrawal distribution pursuant to any of subsections
5.4(a), (b), (c) and (d) above shall have any Employee
Elected Matched Contributions, Employee Elected Unmatched
Contributions, Post-1986 Employee Matched Contributions and
Post-1986 Employee Unmatched Contributions he is making
discontinued as provided in subsection 4.1(e)(4) effective
as of the date of such distribution, but may resume such
contributions subject to the provisions of subsection
4.1(e)(4); provided, however, that the aforementioned
contributions shall not be discontinued on account of a
distribution from a Member's Net Balance Account to an
alternate payee in accordance with a Qualified Domestic
Relations Order.
(f) Withdrawals from the Employee Unmatched
Contribution Account. A Member may file application for a
withdrawal distribution of all or any part of the credit
-51-
balance in his Employee Unmatched Contribution Account, at
such times and in accordance with such rules as the
Committee may establish.
(g) Withdrawal at or After Age 60. Any Member who
has attained age sixty (60), may file application for a
withdrawal distribution of all or any portion of his vested
Net Balance Account attributable to Employee Elected
Unmatched Contributions and Post-1986 Employee Unmatched
Contributions at such times and in accordance with such
rules as the Committee may establish.
5.5 Payment of Life Annuities. If a vested Member's Net
Balance Account or a portion thereof is paid in the form of a
Qualified Joint and Survivor Pension or if a benefit is paid to a
surviving spouse in the form of a Surviving Spouse's Pension,
such benefit shall be the Actuarial Equivalent on the annuity
commencement date of the vested Member's Net Balance Account or
the portion thereof to be paid in such life annuity form. The
vested Member's Net Balance Account or the portion thereof to be
paid in such life annuity form shall be transferred to the
Chicago and North Western Railway Company Supplemental Pension
Plan (called the Chicago and North Western Transportation Company
Supplemental Pension Plan until May 5, 1994) as of the annuity
starting date and the life annuity form of benefit shall be paid
to the Member or his surviving spouse therefrom. Once a Member's
Net Balance Account or portion thereof has been transferred to
the Chicago and North Western Railway Company Supplemental
Pension Plan (called the Chicago and North Western Transportation
Company Supplemental Pension Plan until May 5, 1994), the Member
and his Beneficiary shall have no further entitlement to benefits
under the Plan with respect to the Member's Net Balance Account
or portion thereof so transferred.
5.6 Qualified Joint and Survivor Pension and Surviving
Spouse's Pension. A Member or Surviving Spouse who is to receive
benefits in the form of a life annuity in accordance with
subsection 5.2(a)(1) or 5.3(a)(1) shall have the right to waive a
Qualified Joint and Survivor Pension (such waiver by the Member
shall be consented to by the Member's spouse in writing in
accordance with subsection 5.7) or Surviving Spouse's Pension,
respectively, by delivering written notice to the Committee, at
any time within the Applicable Election Period to receive all of
such benefits in another form of benefit. If a Member or his
Surviving Spouse is to receive benefits in the form of a
Qualified Joint and Survivor Pension or Surviving Spouse's
Pension as provided in subsection 5.2(a) or 5.3(a) the Committee
shall no less than 30 days and no more than 90 days before the
annuity starting date provide the Member or his Surviving Spouse,
by personal delivery or first class mail, with a written
explanation of:
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(a) the terms and conditions of the Qualified Joint
and Survivor Pension or Surviving Spouse's Pension;
(b) the Member's or Surviving Spouse's right to
make, and the effect of, an election to waive the Qualified
Joint and Survivor Pension or Surviving Spouse's Pension;
(c) the rights of the Member's spouse to consent to
the Member's election to waive the Qualified Joint and
Survivor Pension and the effect of consenting to such
waiver; and
(d) the Member's right to make, and the effect of, a
revocation of an election to waive the Qualified Joint and
Survivor Pension.
Any election made by a Member to receive a life
annuity form of benefit pursuant to this subsection 5.6 may
be revoked by such Member (with his spouse's consent in
accordance with subsection 5.7) by delivering written notice
to the Committee at any time prior to the Member's annuity
starting date and, once revoked, may be made again at any
time by delivering written notice to the Committee prior to
the Member's annuity starting date.
"Applicable Election Period" means, with respect to a Qualified
Joint and Survivor Pension, the 90 day period prior to the
annuity starting date and, with respect to the Surviving Spouse's
Pension, the period (i) beginning with the first day of the Plan
Year in which the Participant attains the age of 35, or, if
earlier, the date of the Participant's Termination of Employment,
but in no event before the Effective Date and (ii) ending on the
earlier of the annuity starting date or the date following the
Member's Termination of Employment on which benefits commence to
be paid in any form.
5.7 Spousal Consent to Waiver of Life Annuity or to the
Naming of Another Beneficiary.
(a) A valid spousal waiver of or consent to the
Member's waiver of a life annuity or to the naming of a
Beneficiary other than his spouse shall be designated:
(1) in writing acknowledging the effect of the
consent;
(2) witnessed by a notary public;
(3) effective only with respect to the
Beneficiary designated in the waiver or the
beneficiary designation unless such consent expressly
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permits subsequent designations of beneficiaries
without further spousal consent; and
(4) effective only for the spouse who
exercises the consent;
provided that notwithstanding the provisions of
subsection 5.2, 5.3, 5.4 or 5.6, the consent of a Member's
spouse shall not be required if it is established to the
satisfaction of the Committee that such consent may not be
obtained because there is no spouse, because the spouse
cannot be located or because of such other circumstances as
the Secretary of the Treasury may by regulations prescribe.
(b) To the extent provided in any Qualified Domestic
Relations Order (as defined in subsection 12.2), the former
spouse of a Member shall be treated as the surviving spouse
of such Member for purposes of this subsection 5.7 and
providing consent in accordance with this subsection 5.7.
5.8 Lump Sum Payment without Election. Notwithstanding
any provisions of this Section 5 to the contrary, if the Member
or Beneficiary is entitled to a distribution due to Member's
retirement on or after his Normal Retirement Age, death,
Disability or other Termination of Employment, and if the value
of the vested portion of a Member's Net Balance Account does not
exceed $3,500 at the time of a distribution, the Committee shall,
in accordance with uniform and non-discriminatory rules, direct
the distribution of such benefit, if any, within a reasonable
time following the Valuation Date or Accounting Date coinciding
with or next following the date such person is entitled to the
distribution regardless of any election or consent of the Member,
his spouse or other Beneficiary.
5.9 Vested Interests.
(a) Notwithstanding subsection 5.9(b), a Member
shall be 100% vested in his Member's Net Balance Account as
of the quarterly Valuation Date or annual Accounting Date
coinciding with or immediately preceding his Termination of
Employment, if before or on the date of his Termination of
Employment he attains his Normal Retirement Age, has a
Disability or dies or, for periods before January 1, 1995,
if such Member's Termination of Employment was on account of
a Force Reduction, as defined in the following sentence. A
Participant's Termination is on account of a "Force
Reduction" if the Participant voluntarily or involuntarily
has a Termination of Employment on account of a reduction of
the work force of the Employer as determined and applied by
the Employer in accordance with its personnel policies
applied in a uniform and non-discriminatory manner.
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(b) If subsection 5.9(a) does not apply, the vested
portion of a Member's Net Balance Account is the sum of:
(1) The full adjusted amount (as determined
under subsection 6.6) of his Employee Matched
Contribution Account, his Employee Elected Matched
Contribution Account, his Employee Elected Unmatched
Contribution Account, his Post-1986 Employee Matched
Contribution Account, his Post-1986 Employee Unmatched
Contribution Account and his Employer Matching
Contribution Account.
(2) The vested portion of the Member's
Employer Contribution General Account shall be
determined in accordance with the following table
based on his Vesting Service as of the date of such
Termination of Employment:
Vesting Service Vested Portion
Less than 5 years 0%
5 years or more 100%
(3) An amount equal to the full adjusted
amount (as determined under subsections 4.1(h) and
6.6) credited to his Employee Unmatched Contribution
Account valued as of the Valuation Date or Accounting
Date coinciding with or next following Termination of
Employment.
(c) Any part of a Member's General Employer
Contribution Account which is not distributable under this
subsection 5.9 because he is not entitled to 100% thereof as
above provided, shall be deemed a Remainder as of the last
day of the Plan Year in which occurs five consecutive Breaks
In Service. Until the unvested portion of the Former
Participant's Employer Contribution General Account becomes
a Remainder, it shall be held in a separate account for the
Participant. Remainders arising during a Plan Year shall be
added to the Employer Contributions for such Plan Year and
shall be allocated to Members entitled to share in the
Employer Contributions at the end of the Plan Year during
which the Remainders arose, as provided under subsection
4.2(b). If a Member who had a Termination of Employment on
or after January 1, 1987 is reemployed by an Employer,
Commonly Controlled Entity or member of an Affiliated
Service Group before the occurrence of five consecutive
Breaks In Service, that portion of the Member's Employer
Contribution General Account, if any, which was not vested
at the time of his Termination of Employment shall be
reinstated ("Reinstated Amount") to the Member's Employer
Contribution General Account as of the last day of the Plan
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Year of reemployment. For amounts which became Remainders
in Plan Years commencing in 1985 and 1986, such Reinstated
Amounts shall be taken out of Remainders for the Plan Year
of reemployment or, if such Remainders are insufficient, out
of the earnings of the Trust for the Plan Year of
reemployment provided that he is an employee of an Employer,
Commonly Controlled Entity or member of an Affiliated
Service Group as of the last day of the Plan Year of
reinstatement. Thereafter, the vested portion of such
Member's Employer Contribution General Account shall be
equal to the Reinstated Amount multiplied by the Member's
Vested Service.
(d) Notwithstanding the foregoing provisions of this
subsection 5.9, if a Member is transferred from the
employment of an Employer to the employment of another
Employer, or to a Commonly Controlled Entity or member of an
Affiliated Service Group which is not an Employer, his
Employer Contribution Account shall remain in the Plan and
the Member shall continue to vest therein based on his
employment with such Employer, Commonly Controlled Entity or
Affiliated Service Group.
5.10 Incompetency. Every person receiving or claiming
benefits under the Plan shall be conclusively presumed to be
mentally competent until the date on which the Committee receives
a written notice, in a form and manner acceptable to the
Committee that such person is incompetent and that a guardian,
conservator or other person legally vested with the care of his
estate has been appointed for him; provided, however, that if the
Committee shall find that any person to whom a benefit is payable
under the Plan is unable to care for his affairs because of
incompetency, any payment due (unless a prior claim therefor
shall have been made by a duly appointed legal representative)
may be paid to the spouse, a child, a parent, a brother or
sister, of said person, or the Committee may reimburse any person
or institution deemed by the Committee to have incurred expenses
for such person otherwise entitled to payment. In the event a
guardian or conservator of the estate of any person receiving or
claiming benefits under the Plan shall be appointed by a court of
competent jurisdiction, payments shall be made to such guardian
or conservator provided that proper proof of appointment and
continuing qualification is furnished in a form and manner
acceptable to the Committee. Any payment made in accordance with
this subsection 5.10 shall be a complete discharge of any
liability therefor under the Plan.
5.11 Deduction of Taxes from Amounts Payable.
(a) The Trustee may deduct from the amount to be
distributed such amount as the Trustee, in its sole
discretion, deems proper to protect the Trustee and the
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Trust against liability for the payment of death,
succession, inheritance, income, or other taxes, and out of
the money so deducted, the Trustee may discharge any such
liability and pay the amount remaining to the Member, the
Beneficiary or the deceased Member's estate, as the case may
be.
(b) In the case of an Eligible Rollover Distribution
that is subject to the income tax withholding of Section
3405(c) of the Code, if property (other than employer
securities) is distributed and the cash in the distribution
is not sufficient to satisfy the withholding obligation, the
Plan Administrator can sell the property or receive cash
from the Participant in amounts sufficient to pay the
withholding.
(c) The Administrator will not be liable for failing
to withhold on an Eligible Rollover Distribution that is not
in fact paid to an Eligible Retirement Plan if the
Administrator reasonably relied on adequate information
provided by the Participant who elected the direct rollover.
For purposes of the foregoing provision, adequate
information includes the name of the recipient plan, a
representation that the recipient plan is an Eligible
Retirement Plan, and any other information necessary to
accomplish the direct rollover by the means selected for
delivery.
5.12 Deadline for Payment of Benefits. Any provision
herein to the contrary notwithstanding, payment of benefits shall
commence (unless the Member elects otherwise) not later than the
60th day after the latest of the close of the Plan Year in which
(1) the Member attains age 65, (2) occurs the 10th anniversary of
the date on which the member commenced participation in the Plan,
or (3) the Member has a Termination of Employment; provided that
in no event shall payment of benefits commence after a Member's
Required Beginning Date.
5.13 Application for Distribution. Each person applying
for a distribution under the Plan shall furnish the Committee
with such documents, evidence, data or information in support of
his eligibility as the Committee considers necessary or
desirable. In the event any question or dispute shall arise as
to the proper person or persons to whom any payment shall be
made, the Committee may authorize the Trustee to withhold such
payment until a determination of such question or dispute shall
have been made, or until persons seeking such a distribution have
provided indemnification in such form, manner and amount as the
Committee in its sole discretion shall deem acceptable. The
Committee may determine the proper person or persons to whom any
benefit hereunder shall be paid, and, in so doing, may act upon
such information as on reasonable inquiry it may deem reliable,
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with respect to heirship, relationship, death, survivorship,
identity, financial hardship, or any other fact relative to such
determination. The Committee may rely upon any affidavit,
certificate, letter or other paper or document believed by it to
be genuine, and upon any evidence believed by it to be
sufficient; and shall have no liability for distribution made
hereunder, if made in good faith.
5.14 Deferred Payments. The unpaid balance of any part of
the Member's Net Balance Account which has not been distributed
or transferred to the Chicago and North Western Railway Company
Supplemental Pension Plan (called the Chicago and North Western
Transportation Company Supplemental Pension Plan until May 5,
1994) shall share in the adjustments to reflect the net worth of
the Trust Fund on each Accounting Date and Valuation Date as
provided in subsection 6.6.
5.15 Unclaimed Amounts. Unclaimed amounts shall consist of
the amounts of the accounts of Former Participants which are not
distributed because of the Plan Administrator's inability, after
reasonable search, to locate a Former Participant or Beneficiary
within a period of two years after the payment of benefits
becomes due. Unclaimed amounts shall be considered as
Remainders, shall be allocated as provided in subsection 4.2(b),
and shall be deemed to occur as of the end of said two year
period. If after such Remainder has been allocated in accordance
with subsection 4.2(b), an unclaimed amount is properly claimed
by the Former Participant or Beneficiary, the amount necessary to
make the payment(s) to the Former Participant or Beneficiary
shall be charged against either Remainders or the income and
expenses of the Trust for the Plan Year in which such payment(s)
are made, as determined by the Plan Administrator. Except as
provided above, the accounts of other Participants shall not be
re-adjusted on account of such payment(s).
5.16 Eligible Rollover Distributions.
(a) This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover; provided,
however, that an eligible rollover distribution of less than
$200 shall not be eligible for a direct rollover.
(b) Definitions.
(i) "Eligible rollover distribution":
An eligible rollover distribution is any distribution
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of all or any portion of the balance to the credit of
the distributee, 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 Section 401(a)(9) of the Code; and
the portion of any distribution that is not includible
in gross income.
(ii) "Eligible retirement plan": An
eligible retirement plan is an individual retirement
account described in Section 408(a) of the Code, an
individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described
in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, 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.
(iii) "Distributee": A distributee
includes 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
Section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
(iv) "Direct rollover": A direct
rollover is a distribution by the Plan made payable to
the trustee of the eligible retirement plan specified
by the distributee.
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Section 6. Investment Funds, Accounts and Trust
6.1 Investment Funds. As of the Effective Date,
Investment Funds will be maintained by the Trustee for investment
purposes, as follows:
(a) An Equity Fund, or Fund B, which shall be
invested in common stocks, similar equity securities, or
other like property including, but not limited to, bank
pooled or common funds, mutual funds or insurance company
separate accounts invested in such securities.
(b) An Insurance Contract Fund, or Fund C, which
shall be invested in such contracts issued by an insurance
company as shall from time to time be determined by the
Board of Directors, including, but not limited to,
guaranteed income contracts, group annuity contracts,
immediate participation guarantee contracts, or deposit
administration contracts.
(c) Fund D, which shall be invested primarily in the
Windsor Fund maintained by the Vanguard Group of Investment
Companies, and which shall consist of separate subaccounts
for each Participant any portion of whose Employee Unmatched
Contribution Account is invested therein.
(d) Fund E, which shall be invested primarily in the
Vanguard Money Market Trust - Prime Portfolio maintained by
the Vanguard Group of Investment Companies, and which shall
consist of separate subaccounts for each Participant any
portion of whose Employee Unmatched Contribution Account is
invested therein.
(e) Such other subsequently-lettered funds as may be
established by the Investment Committee each of which shall
be invested primarily in one of the mutual funds offered by
the Vanguard Group of Investment Companies and shall consist
of separate subaccounts for each Participant any portion of
whose Employee Unmatched Contribution Account is invested
therein, provided such fund records the Trust Fund's
investment therein in the form of such separate accounts.
6.2 Investment Directions. When an Employee becomes a
Participant he shall specify, by written notice to the Committee,
to which of Funds B and/or C, his Employee Matched Contributions,
Employee Elected Matched Contributions, Employee Elected
Unmatched Contributions, Post-1986 Employee Matched
Contributions, Post-1986 Employee Unmatched Contributions and
Employer Contributions will be credited; he may specify such
percentages thereof (in increments of 10%) in any one or
combination of such Funds. If he fails to so specify, his
Employee Matched Contributions, Employee Elected Matched
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Contributions, Employee Elected Unmatched Contributions,
Post-1986 Employee Matched Contributions, Post-1986 Employee
Unmatched Contributions and Employer contributions shall be
credited to Fund C. He may change a direction with respect to
his Employee Matched Contributions, Employee Elected Matched
Contributions, Employee Elected Unmatched Contributions,
Post-1986 Employee Matched Contributions, Post-1986 Employee
Unmatched Contributions and Employer Contributions no more
frequently than two times per year, as specified by the
Committee, and subject to rules imposed by the Committee. A
Participant may also specify, by written notice to the Committee,
to which of Fund D and/or E and/or such other Fund as may be
established by the Committee and designated for such investment,
his Employee Unmatched Contributions (made in accordance with the
Plan prior to January 1, 1987) will be credited; he may specify
the portion of such Employee Unmatched Contributions which will
be invested in each of such Funds. If he fails to so specify,
his Employee Unmatched Contributions shall be invested in Fund E.
A Participant may change his investment direction with respect to
his Employee Unmatched Contributions at any time and from time to
time by filing a written election with the Committee, subject to
such rules and restrictions as the Committee may from time to
time impose.
6.3 Transfers Among Investment Funds.
(a) A Participant, Inactive Participant or Former
Participant may elect to transfer his balances (excluding
his Employee Unmatched Contribution Account balance) among
Fund B and Fund C. He may elect that 100% of his balance in
his Employer Contribution General Account, Employer Matching
Contribution Account, Employee Matched Contribution Account,
his Employee Elected Matched Contribution Account, Employee
Elected Unmatched Contribution Account, Post-1986 Employee
Matched Contribution Account and Post-1986 Employee
Unmatched Contribution Account, or any percentage (in
increments of 10%) thereof, be invested in any one or
combination of Fund B or Fund C. Such transfer may be made
no more frequently than two times per year, as specified by
the Committee, and subject to rules imposed by the
Committee.
(b) A Participant, Inactive Participant or Former
Participant may elect to transfer his balances among Fund D,
Fund E and such other Funds as may be designated by the
Committee for investment of Employee Unmatched
Contributions. He may elect that 100% of his balance in his
Employee Unmatched Contribution Account or any percentage
thereof, be invested in any one or combination of Fund D,
Fund E, or other Fund designated by the Committee for
investment of Employee Unmatched Contributions. Such
transfers may be made at any time and from time to time,
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subject to such rules and restrictions as the Committee may
from time to time impose.
6.4 Investment Income to be Accumulated. The income of
each Investment Fund shall be added to that Investment Fund and
each Investment Fund shall be invested without distinction
between principal and income.
6.5 Accounts and Records.
(a) The Accounts and Records of the Plan shall be
maintained by the Committee and shall accurately disclose
the status of the accounts of each Member or beneficiary in
the Plan. The Trust Fund shall be divided into separate
funds designated by letter, which shall respectively be
invested as set forth in the Trust.
(1) Each Participant shall have the following
accounts:
(A) Employee Elected Matched Contribution
Account to which shall be credited his Employee
Elected Matched Contributions;
(B) Employee Elected Unmatched Contribution
Account to which shall be credited his Employee
Elected Unmatched Contributions;
(C) Post-1986 Employee Matched Contribution
Account to which shall be credited his Post-1986
Employee Matched Contributions;
(D) Post-1986 Employee Unmatched Contribution
Account to which shall be credited his Post-1986
Employee Unmatched Contributions;
(E) Employer Contribution Account to which
shall be credited and separately accounted for
his Employer Matching Contribution Account and
Employer Contribution General Account, as
defined in subsections 2.25 and 2.24,
respectively;
(F) Employee Unmatched Contribution Account to
which shall be credited his Employee Unmatched
Contributions made before January 1, 1987; and
(G) Employee Matched Contribution Account to
which shall be credited his Employee Matched
Contributions made to the Plan before January 1,
1983.
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The sum of all such accounts shall be identified
as his Member's Net Balance Account.
(b) Each Member will be advised from time to time,
at least once each Plan Year, as to the status of his
Member's Net Balance Account.
(c) The total of Members' Employee Matched
Contribution Accounts, Employee Elected Matched Contribution
Accounts, Employee Elected Unmatched Contribution Accounts,
Post-1986 Employee Matched Contribution Accounts, Post-1986
Employee Unmatched Contribution Accounts, Employer Matching
Contribution Accounts and Employer Contribution General
Accounts shall be invested in Fund B and/or Fund C of the
Trust Fund or any one or combination thereof. The Employee
Unmatched Contribution Account shall be invested in Fund D,
Fund E and/or any other Fund established by the Committee
for investment of Employee Unmatched Contributions, or any
one or combination thereof. The Trust fund shall consist of
the separate funds, and each Member shall have an undivided
proportionate interest in Fund B and Fund C. Each Member's
undivided proportionate interest in each of Fund B and
Fund C of the Trust Fund shall be measured by the proportion
that his account or accounts in such fund bears to the total
accounts of all Members in that fund as of the dates that
such interest is being determined. Each Member shall have a
separate account in each Fund in which his Employee
Unmatched Contribution Account is invested, if the mutual
fund in which such Fund is invested maintains its records on
an individual account basis (including records maintained by
the mutual fund at the request of the Plan Administrator).
Each such separate account shall be separately credited with
contributions, earnings and gains and charged with losses,
expenses and distributions as of each Accounting Date,
Valuation Date, and each Additional Valuation Date provided
by the mutual fund in which such Fund is invested. If such
mutual fund does not maintain its accounts on such basis,
then each Member shall have an undivided proportionate
interest in such Fund, which interest shall be measured by
the proportion that his Employee Unmatched Contribution
Account invested in such Fund bears to the total accounts of
all Members in that Fund as of the dates that such interest
is being determined.
6.6 Adjustments to Reflect Net Worth of the Trust Fund.
(a) Adjustments as of Each Quarterly Valuation Date,
Each Annual Accounting Date and Additional Valuation Date.
As of each quarterly Valuation Date and Accounting Date, the
Committee, before crediting each Member's Employee Matched
Contribution Account, Employee Elected Matched Contribution
Account, Employee Elected Unmatched Contribution Account,
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Employee Unmatched Contribution Account, Post-1986 Employee
Matched Contribution Account and Post-1986 Employee
Unmatched Contribution Account, with contributions made
before that date and deposited after the immediately
preceding Valuation Date, Additional Valuation Date or
Accounting Date in Funds B, C, D and E (and such other Funds
as may from time to time be established hereunder) and, in
the case of an Accounting Date, before crediting the
Employer Matching Contribution Account or Employer
Contribution General Account with Employer Contributions and
Remainders for that Plan Year, shall adjust the net credit
balances in the Members' (or their Beneficiaries') accounts,
including those accounts not yet fully distributed, in the
respective Fund B, Fund C, Fund D, Fund E (or any other
Fund) upward or downward, pro rata, so that such net credit
balances in the accounts will equal the net worth (excluding
amounts described herein, then not credited to such account)
of the respective Funds of the Trust Fund as of that date,
using fair market values as determined by the Trustee and
reported to the Committee, after such net worth for the
appropriate Fund has been reduced by:
(1) Remainders, if any, which have occurred
for that Plan Year and which have thus not yet been
reallocated and credited to accounts; and
(2) any expenses chargeable to the appropriate
Fund B, Fund C, Fund D, Fund E (or any other Fund) of
the Trust Fund or any Participant's separate account
within any of such Funds, which have been incurred but
not yet paid from each respective fund of the Trust
Fund (or account therein).
After this adjustment, Employee Matched Contributions,
Post-1986 Employee Matched Contributions, Post-1986 Employee
Unmatched Contributions, Employee Elected Matched
Contributions or Employee Elected Unmatched Contributions
made after the immediately preceding Valuation Date, shall
be credited to the Members' Employee Matched Contribution
Accounts, Employee Elected Matched Contribution Accounts,
Employee Elected Unmatched Contribution Accounts, Employee
Unmatched Contribution Accounts, Post-1986 Employee Matched
Contribution Accounts and Post-1986 Employee Unmatched
Contribution Accounts as appropriate, and, in the case of
the Accounting Date, the Employer Contributions and
Remainders for such Plan Year shall be credited to the
Members' Employer Contribution Accounts, provided that
Employer Contributions shall not be included in a Member's
Employer Contribution Account for purposes of sharing in
adjustments described above until the Valuation Date or
Accounting Date next following a date not less than three
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calendar months following the date such Employer
Contribution is made.
(b) Determination by the Trustee. All
determinations made by the Trustee with respect to fair
market values and net worth shall be made in accordance with
generally accepted principles of trust accounting, and such
determination when so made by the Trustee and any
determinations by the Committee based thereon, shall be
conclusive and binding upon all persons having an interest
in the Plan.
6.7 Trust. The Company will enter into a Trust with
Trustee to establish the Trust Fund. The Trust shall be deemed
to form a part of the Plan and any and all rights and benefits
which may accrue to any Member or his beneficiaries under the
Plan shall be subject to all of the terms and provisions of this
Trust.
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Section 7. Top Heavy Provisions
7.1 Application. The definitions in subsection 7.2 shall
apply under this Section 7 and the special rules in
subsection 7.3 shall apply, notwithstanding any other provisions
of the Plan, for any Plan Year in which the Plan is a Top Heavy
Plan and for such other Plan Years as may be specified herein.
7.2 Special Top Heavy Definitions. The following special
definitions shall apply under this Section 7.
(a) "Aggregate Employer Contributions" means the sum
of all Employer Contributions and Remainders under this Plan
allocated for a Participant to the Plan and employer
contributions and forfeitures allocated for the Participant
to all Related Defined Contribution Plans in the Aggregation
Group; provided, however, that for Plan Years beginning
before January 1, 1985, elected deferrals under this Plan
and employer contributions attributable to salary reduction
or similar arrangement under Related Defined Contribution
Plans shall not be included in Aggregate Employer
Contributions and provided further that, for Plan Years
which begin after December 31, 1988, Employee Elected
Contributions, Employer Contributions and Remainders
allocated pursuant to subsections 4.2(b)(1) and 4.2(b)(3)
and any Special Section 401(k) Contributions shall not be
included for Non-Key Employees.
(b) "Aggregation Group" means the group of plans in
a Mandatory Aggregation Group, if any, that includes the
Plan, unless inclusion of Related Plans in the Permissive
Aggregation Group in the Aggregation Group would prevent the
Plan from being a Top Heavy Plan, in which case "Aggregation
Group" means the group of plans consisting of the Plan and
each other Related Plan in a Permissive Aggregation Group
with the Plan.
(1) "Mandatory Aggregation Group" means each
plan (considering the Plan and Related Plans) that,
during the Plan Year that contains the Determination
Date or any of the four preceding Plan Years,
(A) had a participant who was a Key
Employee, or
(B) was necessary to be considered with
a plan in which a Key Employee participated in
order to enable the plan in which the Key
Employee participated to meet the requirements
of Code Sections 401(a)(4) and Section 410.
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If the Plan is not described in (A) or (B) above, it
shall not be part of a Mandatory Aggregation Group.
(2) "Permissive Aggregation Group" means the
group of plans consisting of (A) the plans, if any, in
a Mandatory Aggregation Group with the Plan, and
(B) any other Related Plan, that, when considered as a
part of the Aggregation Group, does not cause the
Aggregation Group to fail to satisfy the requirements
of Code Sections 401(a)(4) and Section 410. A Related
Plan in (B) of the preceding sentence may include a
simplified employee pension plan, as defined in Code
Section 408(k), and a collectively bargained plan, if
when considered as a part of the Aggregation Group
such plan does not cause the Aggregation Group to fail
to satisfy the requirements of Code Sections 401(a)(4)
and Section 410 considering, if the plan is a
multiemployer plan as described in Code Section 414(f)
or a multiple employer plan as described in Code
Section 413(c), benefits under the plan only to the
extent provided to employees of the employer because
of service with the employer and, if the plan is a
simplified employee pension plan, only the employer's
contribution to the plan.
(c) "Determination Date" means, with respect to a
plan year, the last day of the preceding plan year or, in
the case of the first plan year, the last day of such plan
year. If the Plan is aggregated with other plans in the
Aggregation Group, the Determination Date for each other
plan shall be, with respect to any plan year, the
Determination Date for each such other plan which falls in
the same calendar year as the Determination Date for the
Plan.
(d) "Key Employee" means, for the Plan Year
containing the Determination Date, any person or the
beneficiary of any person who is an employee or former
employee of an Employer, a Commonly Controlled Entity or
Affiliated Service Group as determined under Code Section
416(i) and who, at any time during the Plan Year containing
the Determination Date or any of the four (4) preceding Plan
Years (the "Measurement Period"), is a person described in
paragraph (1), (2), (3) or (4), subject to paragraph (5).
(1) An officer of the Employer, Commonly
Controlled Entity or Affiliated Service Group who:
(A) in any Measurement Period, in the
case of a Plan Year beginning after December 31,
1983, is an officer during the Plan Year and has
annual Compensation for the Plan Year in an
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amount greater than fifty percent (50%) of the
amount in effect under Section 415(b)(1)(A) of
the Code for the calendar year in which such
Plan Year ends ($98,064 in 1989, as adjusted in
subsequent years in accordance with regulations
prescribed by the Secretary of the Treasury or
his delegate pursuant to the provisions of Code
Section 415(d)).
(B) in any Measurement Period, in the
case of a Plan Year beginning before January 1,
1984, is an officer during the Plan Year,
regardless of his compensation (except to the
extent that applicable law, regulations and
rulings indicate that the compensation
requirement set forth in subparagraph (A) above
is applicable).
(C) Notwithstanding the foregoing
subparagraphs (A) and (B), no more than a total
of fifty (50) persons (or, if lesser, the
greater of three (3) persons or ten percent
(10%) of all persons or beneficiaries of persons
who are employees or former employees) shall be
treated as Key Employees under this
paragraph (i) for any Measurement Period. In
the case of an Employer, Commonly Controlled
Entity or member of an Affiliated Service Group
which is not a corporation:
(i) in any Measurement Period, in
the case of a Plan Year beginning on or
before February 28, 1985, no persons shall
be treated as Key Employees under this
paragraph (1); and
(ii) in any Measurement Period, in
the case of a Plan Year beginning after
February 28, 1985, the term "officer" as
used in this subsection (d) shall include
administrative executives as described in
Section 1.416-1(T-13) of the Treasury
Regulations.
(2) One (1) of the ten (10) persons who,
during a Plan Year in the Measurement Period:
(A) have annual compensation from the
Employer, Commonly Controlled Entity or member
of an Affiliated Service Group for such Plan
Year greater than the amount in effect under
Section 415(c)(1)(A) of the Code for the
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calendar year in which such Plan Year ends
($30,000 in 1989 or one-fourth of the dollar
limitation in effect under Section 415(b)(1)(A)
of the Internal Revenue Code, adjusted in
subsequent years as determined in accordance
with regulations prescribed by the Secretary of
the Treasury or his delegate pursuant to the
provisions of Section 415(d) of the Code); and
(B) own (or are considered as owning
within the meaning of Code Section 318) in such
Plan Year, the largest percentage interests in
the Employer, Commonly Controlled Entity or
member of an Affiliated Service Group, in such
Plan Year, provided that no person shall be
treated as a Key Employee under this paragraph
unless he owns more than one-half of one percent
(0.5%) interest in the Employer, Commonly
Controlled Entity or member of an Affiliated
Service Group.
No more than a total of ten (10) persons or
beneficiaries of persons who are employees or former
employees shall be treated as Key Employees under this
paragraph (2) for any Measurement Period.
(3) A person who, for a Plan Year in the
Measurement Period, is a more than five percent (5%)
owner (or is considered as owning more than five
percent (5%) within the meaning of Code Section 318)
of the Employer, a Commonly Controlled Entity or
member of an Affiliated Service Group.
(4) A person who, for a Plan Year in the
Measurement Period, is a more than one percent (1%)
owner (or is considered as owning more than one
percent (1%) within the meaning of Code Section 318)
of the Employer, a Commonly Controlled Entity or
member of an Affiliated Service Group and has an
annual compensation for such Plan Year from the
Employer, Commonly Controlled Entity or member of an
Affiliated Service Group of more than $150,000.
(5) If the number of persons who meet the
requirements to be treated as Key Employees under
paragraph (1) or (2) exceed the limitation on the
number of Key Employees to be counted under
paragraph (1) or (2), those persons with the highest
annual compensation in a Plan Year in the Measurement
Period for which the requirements are met and who are
within the limitation on the number of Key Employees
will be treated as Key Employees.
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If the requirements of paragraph (1) or (2) are met by a
person in more than one (1) Plan Year in the Measurement
Period, each person will be counted only once under
paragraph (1) or (2):
(A) under paragraph (1), the Plan Year
in the Measurement Period in which a person who
was an officer and had the highest annual
compensation shall be used to determine whether
the person will be treated as a Key Employee
under the preceding sentence;
(B) under paragraph (2), the Plan Year
in the Measurement Period in which the ownership
percentage interest is the greatest shall be
used to determine whether the person will be
treated as a Key Employee under the preceding
sentence.
Notwithstanding the above provisions of paragraph (5),
a person may be counted in determining the limitation
under both paragraphs (1) and (2). In determining the
sum of the Present Value of Accrued Benefits for Key
Employees under subsection (h) of this Section, the
Present Value of Accrued Benefits for any person shall
be counted only once.
(e) "Non-Key Employee" means (i) a person (or the
beneficiary of a person) with an account balance in the Plan
or an account balance or accrued benefit in any Related Plan
in the Aggregation Group or (ii) an employee or a former
employee (or the beneficiary of such a person) who has
received a distribution during the Measurement Period and
(iii) who during the Measurement Period is not a Key
Employee.
(f) "Present Value of Accrued Benefits" means, for
any Plan Year, an amount equal to the sum of (1), (2) and
(3) for each person who, in the Plan Year containing the
Determination Date, was a Key Employee or a Non-Key
Employee.
(1) Subject to (4) below, the value of a
person's Accrued Benefit under the Plan and each
Related Defined Contribution Plan in the Aggregation
Group, determined as of the valuation date coincident
with or immediately preceding the Determination Date,
adjusted for contributions due as of the Determination
Date, as follows:
(A) in the case of a plan not subject to
the minimum funding requirements of Section 412
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of the Code, by including the amount of any
contributions actually made after the valuation
date but on or before the Determination Date,
and, in the first plan year of a plan, by
including contributions made after the
Determination Date that are allocated as of a
date in that first plan year; and
(B) in the case of a plan that is
subject to the minimum funding requirements, by
including the amount of any contributions that
would be allocated as of a date not later than
the Determination Date, plus adjustments to
those amounts as required under applicable
rulings, even though those amounts are not yet
required to be contributed or allocated (e.g.,
because they have been waived) and by including
the amount of any contributions 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).
(2) Subject to (4) below, the sum of the
actuarial present values of a person's accrued
benefits under each Related Defined Benefit Plan in
the Aggregation Group, expressed as a benefit
commencing at Normal Retirement Date (or the person's
attained age, if later) determined based on the
following actuarial assumptions:
(A) Interest rate 5%; and
(B) Mortality: 1984 Unisex Pension
Table;
and determined in accordance with Code Section 416(g),
provided, however, that if a defined benefit plan in
the Aggregation Group provides for different or
additional actuarial assumptions to be used in
determining the present value of accrued benefits
thereunder for the purpose of determining the top
heavy status thereof, then such different or
additional actuarial assumptions shall apply with
respect to each defined benefit plan in the
Aggregation Group and, further provided that the
accrued benefit of any Non-Key Employee shall be
determined under the method which is used for accrual
purposes for all Related Defined Benefit Plans or, if
no single accrual method is used in all such plans,
such accrued benefit shall be determined as if such
benefit accrued not more rapidly than the slowest
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accrual rate permitted under Code Section
411(b)(1)(C).
The present value of an accrued benefit for any person
who is employed by an employer maintaining a plan on
the Determination Date is determined as of the most
recent valuation date which is within a 12-month
period ending on the Determination Date, provided
however that:
(A) for the first plan year of the plan,
the present value for an employee is determined
as if the employee had a Termination of
Employment (i) on the Determination Date or
(ii) on such valuation date but taking into
account the estimated accrued benefit as of the
Determination Date; and
(B) for the second and subsequent plan
years of the plan, the accrued benefit taken
into account for an employee is not less than
the accrued benefit taken into account for the
first plan year unless the difference is
attributable to using an estimate of the accrued
benefit as of the Determination Date for the
first plan year and using the actual accrued
benefit as of the Determination Date for the
second plan year.
For purposes of this paragraph (2), the valuation date
is the valuation date used by the plan for computing
plan costs for minimum funding, regardless of whether
a valuation is performed that year.
If the plan provides for a nonproportional
subsidy as described in Treasury Regulations Section
1.416-1 (T-26), the present value of accrued benefits
shall be determined taking into account the value of
nonproportional subsidized early retirement benefits
and nonproportional subsidized benefit options.
(3) Subject to (4) below, the aggregate value
of amounts distributed during the plan year that
includes the Determination Date or any of the four
preceding plan years including amounts distributed
under a terminated plan which, if it had not been
terminated, would have been in the Aggregation Group.
(4) The following rules shall apply in
determining the Present Value of Accrued Benefits:
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(A) Amounts attributable to qualified
voluntary employee contributions, as defined in
Code Section 219(e), shall be excluded.
(B) In computing the Present Value of
Accrued Benefits with respect to rollovers or
plan-to-plan transfers, the following rules
shall be applied to determine whether amounts
which have been distributed during the five (5)
year period ending on the Determination Date
from or accepted into this Plan or any plan in
the Aggregation Group shall be included in
determining the Present Value of Accrued
Benefits:
(i) Unrelated Transfers accepted
into the Plan or any plan in the
Aggregation Group after December 31, 1983
shall not be included.
(ii) Unrelated Transfers accepted
on or before December 31, 1983 and all
Related Transfers accepted at any time
into the Plan or any plan in the
Aggregation Group shall be included.
(iii) Unrelated Transfers made from
the Plan or any plan in the Aggregation
Group shall be included.
(iv) Related Transfers made from
the Plan or any plan in the Aggregation
Group shall not be included by the
transferor plan (but shall be counted by
the accepting plan).
The Accrued Benefit of any individual who has not
performed services for an Employer maintaining the Plan at
any time during the five (5) year period ending on the
Determination Date shall be excluded in computing the
Present Value of Accrued Benefit.
(g) "Related Transfer" means a rollover or a
plan-to-plan transfer which is either not initiated by the
Employee or is made between plans each of which is
maintained by a Commonly Controlled Entity or member of an
Affiliated Service Group.
(h) A "Top Heavy Aggregation Group" exists in any
Plan Year for which, as of the Determination Date, the sum
of the Present Value of Accrued Benefits for Key Employees
under all plans in the Aggregation Group exceeds sixty
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percent (60%) of the sum of the Present Value of Accrued
Benefits for all employees under all plans in the
Aggregation Group; provided that, for purposes of
determining the sum of Present Value of Accrued Benefits for
all employees, there shall be excluded the Present Value of
Accrued Benefits of any Non-Key Employee who was a Key
Employee for any Plan Year preceding the Plan Year that
contains the Determination Date. For purposes of applying
the special rules herein with respect to a Super Top Heavy
Plan, a Top Heavy Aggregation Group will also constitute a
"Super Top Heavy Aggregation Group" if in any Plan Year as
of the Determination Date, the sum of the Present Value of
Accrued Benefits for Key Employees under all plans in the
Aggregation Group exceeds ninety percent (90%) of the sum of
the Present Value of Accrued Benefits for all employees
under all plans in the Aggregation Group.
(i) "Top Heavy Plan" means the Plan in any Plan Year
in which it is a member of a Top Heavy Aggregation Group,
including a Top Heavy Aggregation Group consisting solely of
the Plan. For purposes of applying the rules herein with
respect to a Super Top Heavy Plan, a Top Heavy Plan will
also constitute a "Super Top Heavy Plan" if the Plan in any
Plan Year is a member of a Super Top Heavy Aggregation
Group, including a Super Top Heavy Aggregation Group
consisting solely of the Plan.
(j) "Unrelated Transfer" means a rollover or a
plan-to-plan transfer which is both initiated by the
Employee and (1) made from a plan maintained by a Commonly
Controlled Entity or member of an Affiliated Service Group
to a plan maintained by an employer which is not a Commonly
Controlled Entity or member of an Affiliated Service Group
or (2) made to a plan maintained by a Commonly Controlled
Entity or member of an Affiliated Service Group from a plan
maintained by an employer which is not a Commonly Controlled
Entity or member of an Affiliated Service Group.
7.3 Special Top Heavy Provisions. For each Plan Year in
which the Plan is a Top Heavy Plan, the following rules shall
apply, except that the special provisions of this subsection 7.3
shall not apply with respect to any employee included in a unit
of employees covered by an agreement which the Secretary of Labor
finds to be a collective-bargaining agreement between employee
representatives and one or more employees if there is evidence
that retirement benefits were the subject of good faith
bargaining between such employee representative and the Employer
or Employers:
(a) Minimum Employer Contributions. In any Plan
Year in which the Plan is a Top Heavy Plan, the Employers
shall make additional Employer Contributions to the Plan as
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necessary for each Active Participant who is employed on the
last day of the Plan Year and who is a Non-Key Employee to
bring the amount of his Aggregate Employer Contributions for
the Plan Year up to at least three percent (3%) of his Pay,
or if the Plan is not required to be included in an
aggregation group in order to permit a defined benefit plan
in the aggregation group to satisfy the requirements of Code
Section 401(a)(4) or Section 410, such lesser amount as is
equal to the largest percentage of a Key Employee's Pay
allocated to the Key Employee as Aggregate Contributions.
For purposes of determining whether a Non-Key Employee is an
Active Participant entitled to have minimum Employer
Contributions made on his behalf, a Non-Key Employee will be
treated as an Active Participant even if he is not otherwise
an Active Participant (or accrues no benefit) under the Plan
because:
(1) he has failed to complete the requisite
number of hours of service (if any) after becoming a
Participant in the Plan,
(2) he is excluded from participation in the
Plan (or accrues no benefit) merely because his
compensation is less than a stated amount, or
(3) he is excluded from participation in the
Plan (or accrues no benefit) merely because of a
failure to make mandatory employee contributions or,
if the Plan is a 401(k) plan, because of a failure to
make elective 401(k) contributions.
(b) Vesting. For each Plan Year in which the Plan
is a Top Heavy Plan and for each Plan Year thereafter, the
vesting schedule under the Plan shall be three (3) year
cliff vesting under which each Member shall be zero percent
vested in Employer contributions, Remainders credited to his
Regular Account portion of his General Employer Contribution
Account and the Appreciation Account portion attributable to
such Employer contributions and Remainders until he has
three years of Vested Service after which a Member shall be
100% vested in his Employer Contribution Account.
(c) Limitations. In computing the limitations under
subsection 4.8 hereof for years in which the Plan is a Top
Heavy Plan, the special rules of Code Section 416(h) shall
be applied in accordance with applicable regulations and
rulings so that, in determining the denominator of the
Defined Contribution Plan Fraction and the Defined Benefit
Plan Fraction, at each place at which "1.25" would have been
used, "1.00" shall be substituted, unless the special
requirements of Code Section 416(h)(2) have been satisfied
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and by substituting $41,500 for $51,875 in the numerator of
the transition fraction described in Code Section
415(e)(6)(B).
(d) Transition Rule for a Top Heavy Plan.
Notwithstanding the provisions of subsection 7.3(c), for
each Plan Year in which the Plan is a Top Heavy Plan and in
which the Plan does not meet the special requirements of
Code Section 416(h)(2) in order to use 1.25 in the
denominator of the Defined Contribution Plan Fraction and
the Defined Benefit Plan Fraction, if an Employee was a
participant in one or more defined benefit plans and in one
or more defined contribution plans maintained by the
employer before the plans became Top Heavy Plans and if such
Participant's Combined Fraction exceeds 1.00 because of
accruals and additions that were made before the plans
became Top Heavy Plans, a factor equal to the lesser of 1.25
or such lesser amount (but not less than 1.00) as shall be
needed to make the Employee's Combined Fraction equal to
1.00 shall be used in the denominator of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction if
there are no further accruals or annual additions under any
Top Heavy Plans until the Participant's Combined Fraction is
not greater than 1.00 when a factor of 1.00 is used in the
denominators of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction. Any provisions herein
to the contrary notwithstanding, if the Plan is a Top Heavy
Plan and the Plan does not meet the special requirements of
Code Section 416(h)(2) in order to use 1.25 in the
denominator of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction, there shall be no
further Annual Additions for a Participant whose Combined
Fraction is greater than 1.00 when a factor of 1.00 is used
in the denominator of the Defined Benefit Plan Fraction and
the Defined Contribution Plan Fraction, until such time as
the Participant's Combined Fraction is not greater than
1.00.
(e) Transition Rule for a Super Top Heavy Plan.
Notwithstanding the provisions of subsections 7.3(c) and
7.3(d), for each Plan Year in which the Plan is a Super Top
Heavy Plan, (1) if an Employee was a participant in one or
more defined benefit plans and in one or more defined
contribution plans maintained by the employer before the
plans became Super Top Heavy Plans, and (2) if such
Participant's Combined Fraction exceeds 1.00 because of
accruals and additions that were made before the plans
became Super Top Heavy Plans and if immediately before the
plans became Super Top Heavy Plans the Combined Fraction as
then computed did not exceed 1.00, then a factor equal to
the lesser of 1.25 or such lesser amount (but not less than
1.00) as shall be needed to make the Employee's Combined
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Fraction equal to 1.00 shall be used in the denominator of
the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction if there are no further accruals
or annual additions under any Super Top Heavy Plans until
the Participant's Combined Fraction is not greater than 1.00
when a factor of 1.00 is used in the denominators of the
Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction. Any provisions herein to the contrary
notwithstanding, if the Plan is a Super Top Heavy Plan,
there shall be no further Annual Additions for a Participant
whose Combined Fraction is greater than 1.00 when a factor
of 1.00 is used in the denominator of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction
until the Participant's Combined Fraction is not greater
than 1.00.
(f) Terminated Plan. If the Plan becomes a Top
Heavy Plan after it has formally been terminated, has ceased
crediting for benefit accruals and vesting and has been or
is distributing all plan assets to participants and their
beneficiaries as soon as administratively feasible or if a
terminated plan has distributed all benefits of participants
and their beneficiaries, the provisions of subsection 7.3
shall not apply to the Plan.
(g) Frozen Plans. If the Plan becomes a Top Heavy
Plan after contributions have ceased under the Plan but all
assets have not been distributed to participants or their
beneficiaries, the provisions of subsection 7.3 shall apply
to the Plan.
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Section 8. Administration
8.1 Committee. The Committee shall consist of not less
than three or more than five members, each of whom, when
appointed by the Board of Directors of the Company, shall serve
until his death or his resignation from the Committee, or his
Termination of Employment, or his replacement by the Board of
Directors of the Company. The Committee shall act by a majority
of its members at any meeting including a telephonic meeting, or
by a written instrument signed by a majority of its members
without the necessity of a meeting. Except as provided by
federal law, no member of the Committee shall be personally
liable because of an act, or failure to act, of the Committee, or
for any of his acts done or omitted to be done in good faith.
The Company shall indemnify and hold harmless all members of the
Committee for any act, or failure to act, of the Committee, or
for any of his acts done or omitted to be done in good faith.
8.2 Administration. The Committee shall be responsible
for the general administration of the Plan and shall have all
such powers as may be necessary to carry out the provisions
hereof, including, but not limited to, the power to interpret the
Plan. The decisions of the Committee shall be conclusive on all
persons. The Committee shall be the Plan Administrator. The
Committee may from time to time establish rules for the
administration of the Plan. Expenses incurred by the Committee
(including such expenses which are advanced by the Company)
relative to the administration of the Plan shall be paid from the
Trust Fund, unless paid by the Company. The Committee may
appoint one or more persons ("Fiduciary(ies)") who jointly or
severally shall have authority to control and manage the
operation and administration of the Plan. The Committee shall
have the authority to allocate responsibilities among the
Fiduciaries (including the Trustee of the Trust Fund). Any
Fiduciary, upon receiving the written consent of the Committee,
may designate one or more other persons ("Designated
Fiduciary(ies)") to carry out the Fiduciary's responsibilities
under the Plan. The procedure the Committee shall follow in
making any appointment, allocation or consent to designate shall
be by filing with the minutes of the Committee an instrument in
writing consented to by a majority of the members of the
Committee setting forth the appointment, allocation or consent to
designate. Any person or group of persons may serve in more than
one fiduciary capacity with respect to the Plan. A fiduciary or
Designated Fiduciary may employ one or more persons to render
advice with regard to any responsibility such Fiduciary or
Designated Fiduciary has under the Plan.
The Committee shall exercise, or direct the Trustee with
respect to the exercise of, all rights, privileges and
obligations with respect to the investments of Fund C.
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8.3 Initial Claim for Benefits. Each Participant, or
other beneficiary (a "Claimant") may submit his claim for
benefits to the Committee (or to such other person or persons as
may be designated by the Committee) in writing in such form as is
provided or approved by the Committee. A Claimant shall have no
right to seek review of a denial of benefits, or to bring any
action in any court to enforce a claim for benefits prior to his
filing a claim for benefits and exhausting his rights to review
under subsections 8.3 and 8.4.
When a claim for benefits has been filed properly,
such claim for benefits shall be evaluated and the Claimant shall
be notified of the approval or the denial within ninety (90) days
after the receipt of such 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 which shall
specify the special circumstances requiring an extension and the
date by which a final decision will be reached (which date shall
not be later than one hundred and eighty (180) days after the
date on which the claim was filed). A Claimant shall be given a
written notice in which the Claimant shall be advised as to
whether the claim is granted or denied, in whole or in part. If
a claim is denied, in whole or in part, the Claimant shall be
given written notice which shall contain (1) the specific reasons
for the denial, (2) references to pertinent plan provisions upon
which the denial is based, (3) a description of any additional
material or information necessary to perfect the claim and an
explanation of why such material or information is necessary, and
(4) the Claimant's rights to seek review of the denial.
8.4 Review of Claim Denial. If a claim is denied, in
whole or in part, the Claimant shall have the right to request
that the Committee review the denial, provided that the Claimant
files a written request for review with the Committee within
sixty (60) days after the date on which the Claimant received
written notification of the denial. A Claimant (or his duly
authorized representative) may review pertinent documents and
submit issues and comments in writing to the Committee. Within
sixty (60) days after a request for review is received, the
review shall be made and the Claimant shall be advised in writing
of the decision on review, unless special circumstances require
an extension of time for processing the review, in which case the
Claimant shall be given a written notification within such
initial sixty (60) day period specifying the reasons for the
extension and when such review shall be completed (provided that
such review shall be completed within one hundred and twenty
(120) days after the date on which the request for review was
filed). The decision on review shall be forwarded to the
Claimant in writing and shall include specific reasons for the
decision and references to plan provisions upon which the
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decision is based. A decision on review shall be final and
binding on all persons for all purposes. If a Claimant shall
fail to file a request for review in accordance with the
procedures described in subsections 8.3 and 8.4 such Claimant
shall have no rights to review and shall have no right to bring
action in any court and the denial of the claim shall become
final and binding on all persons for all purposes.
8.5 Fiduciary Responsibility. If a Plan fiduciary acts in
accordance with ERISA, Title I, Subtitle B, Part 4:
(a) In determining that a Member's spouse has
consented to the naming of a Beneficiary other than the
spouse or that the consent of the Member's spouse may not be
obtained because there is no spouse, the spouse cannot be
located or other circumstances prescribed by the Secretary
of the Treasury by regulations, then to the extent of
payments made pursuant to such consent, or determination,
the Plan and its fiduciaries shall have no further
liability.
(b) In treating a domestic relations order as being
(or not being) a Qualified Domestic Relations Order, or,
during any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations Order is
being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), in separately accounting for
the amounts which would have been payable to the alternate
payee during such period if the order had been determined to
be a Qualified Domestic Relations Order ("Segregated
Amounts"), in paying such Segregated Amounts to the person
entitled thereto if within 18 months the domestic relations
order (or a modification thereof) is determined to be a
Qualified Domestic Relations Order, in paying such
Segregated Amounts to the person entitled thereto if there
had been no order if within 18 months the domestic relations
order is determined not to be qualified or if the issue is
not resolved within 18 months, and in prospectively applying
a domestic relations order which is determined to be
qualified after the close of the 18-month period, then the
obligation of the Plan and its fiduciaries to the Member and
each alternate payee shall be discharged to the extent of
any payment made pursuant to such acts.
8.6 Fiduciary as Member. A fiduciary who is also a Member
Participant or a Beneficiary shall receive any benefit to which
he may be entitled as a Participant, Member or Beneficiary in the
Plan so long as such benefit is computed and paid on a basis that
is consistent with the terms of the Plan as applied to all other
Participants, Members and Beneficiaries.
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Section 9. Subsidiary or Affiliated Corporations
9.1 Subsidiary or Affiliated Corporations. Any Commonly
Controlled Entity may become an Employer under the Plan and the
Trust or may withdraw therefrom (or, being a party, shall
withdraw) at such time, in such manner and upon such terms and
conditions as the Board of Directors of Company shall determine.
Any Employer, other than Company, shall become a party to the
Plan and the Trust, as co-settlor with Company, upon the filing
with the Trustee of:
(a) a certified copy of a resolution of such
Employer's Board of Directors adopting the Plan and the
Trust; and
(b) a certified copy of a resolution of Company's
Board of Directors authorizing such Employer to become a
party to the Plan and the Trust;
and thereafter the Trustee shall receive and hold, as part of the
Trust Fund, subject to the provisions of the Trust, any
contributions made by such Employer and by Members who are
Employees of such Employer. In the event of withdrawal of any
Employer from the Plan and the Trust, the Trustee shall determine
the share of such withdrawing Employer in the Trust Fund. The
Trustee shall thereupon segregate such share and make disposition
thereof in accordance with the direction of the withdrawing
Employer's Board of Directors; provided that a distribution shall
not be made to a Member who is not otherwise entitled to a
distribution in accordance with Section 5 unless there has been a
disposition of the Employer's interest in a subsidiary or of
substantially all the assets used by the Employer in a trade or
business and the Employee continues employment with the
subsidiary or the corporation acquiring such assets or the
Company has terminated the Plan without establishment or
maintenance of another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7))
and the distribution options provided under Section 5 shall be
available.
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Section 10. Amendment and Termination
10.1 Amendment and Termination. The Company expects the
Plan to be permanent, but since future conditions affecting the
Company cannot be anticipated or foreseen, the Company must
necessarily and does hereby reserve the right to amend, modify or
terminate the Plan at any time by action of its Board of
Directors. The Company may make such modifications or amendments
to the Plan that are necessary or appropriate to qualify or
maintain the Plan as a plan meeting the requirements of Code
Section 401(a) or 401(k) or any other applicable provisions of
the Code or the regulations issued thereunder. No part of the
corpus or income of the Trust Fund shall at any time be used for
or diverted to purposes other than for the exclusive benefit of
Members or their Beneficiaries, and no amendment shall divest any
Member of his interest herein, except as may be required by the
District Director of Internal Revenue or other governmental
authority. No amendment shall eliminate or reduce an optional
form of benefit with respect to benefits attributable to service
before the amendment was adopted except as may be permitted under
applicable regulations or rulings of the Treasury Department or
Department of Labor.
10.2 Termination of the Plan. Upon termination of the Plan
by the Company (after a favorable determination has been obtained
as specified in subsection 10.1), or upon complete discontinuance
of contributions to the Plan by the Company (after a favorable
determination has been obtained as specified in subsection 10.1),
the value of the proportionate interest of each Member having an
interest in the Trust Fund shall be determined as of the date of
such termination or discontinuance. The accounts of such Members
shall be one hundred percent vested and nonforfeitable, and
thereafter distribution shall be made to such Members as provided
in Section 5, except that there shall be no forfeitures of such
one hundred percent vested and nonforfeitable interests.
Upon the partial termination of the Plan by the
Company (after a favorable determination has been obtained as
specified in subsection 10.1), the value of the proportionate
interest of each Member having an interest in the Trust Fund, in
respect of whom the Plan shall have been partially terminated,
shall be determined as of the date of such partial termination.
The accounts of such Members, in respect of whom the partial
termination has occurred, shall be one hundred percent vested and
nonforfeitable, and thereafter distribution shall be made to such
Members as provided in Section 5, except that there shall be no
forfeitures of such one hundred percent vested and nonforfeitable
interests.
In the event of termination of the Plan, the Board of
Directors may direct that (a) the Trustee continue the Trust for
a specified period of time, or for such period of time as the
-82-
Trustee, in its sole discretion, may deem to be in the best
interest of Members or their Beneficiaries or (b) any Member who
does not consent to the distribution of a Member's Net Balance
Account the vested portion of which is in excess of $3,500 or who
is not eligible to receive a distribution of his Member's Net
Balance Account pursuant to the foregoing provisions of
subsection 10.2 shall receive a benefit in the form of an annuity
contract providing the benefit options available hereunder which
can be purchased with the amount of such benefit from an
insurance company.
-83-
Section 11. Mergers
11.1 Mergers. The Plan shall not merge or consolidate
with, or transfer any assets or liabilities to any other plan,
unless each Member would (if the Plan were then terminated)
receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would
have been entitled to immediately before the merger,
consolidation or transfer (if the Plan were then terminated).
-84-
Section 12. Miscellaneous
12.1 Nonalienation of Benefits.
(a) Benefits payable under this Plan shall not be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind, either voluntary
or involuntary, prior to actually being received by the
person entitled to the benefit under the terms of the Plan;
and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge, garnish, execute on, levy
or otherwise dispose of any right to benefits payable here
under, shall be void. The Trust Fund shall not in any
manner be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of any person entitled to
benefits hereunder. The foregoing subsection 12.1(a) shall
not preclude the (1) enforcement of a Federal tax levy made
pursuant to Code section 6331 or (2) collection by the
United States on a judgment resulting from an unpaid tax
assessment.
(b) Notwithstanding subsection 12.1(a), the Trustee
(1) shall comply with an order entered on or
after January 1, 1985 determined by the Committee to
be a Qualified Domestic Relations Order as provided in
subsection 12.2.
(2) shall comply with a domestic relations
order entered before January 1, 1985 if benefits are
already being paid under such order, and
(3) may treat an order entered before
January 1, 1985 as a Qualified Domestic Relations
order even if it does not meet the requirements of
subsection 12.2.
12.2 Qualified Domestic Relations Order.
(a) "Qualified Domestic Relations Order" means any
judgment, decree, or order (including approval of a property
settlement agreement):
(1) which is made pursuant to a state domestic
relations law (including a community property law),
(2) which relates to the provision of child
support, alimony payments, or marital property rights
to a spouse, former spouse, child, or other dependent
of a Member,
-85-
(3) which creates or recognizes the existence
of an alternate payee's right to receive all or a
portion of the Member's Net Balance Account under the
Plan, and
(4) with respect to which the requirements of
paragraphs (b) and (c) are met.
(b) A domestic relations order can be a Qualified
Domestic Relations Order only if such order clearly
specifies:
(1) The name and the last known mailing
address, if any, of the Member and the name and
mailing address of each alternate payee covered by the
order,
(2) the amount or percentage of the Member's
Net Balance Account to be paid by the Plan to each
such alternate payee, or the manner in which such
amount or percentage is to be determined,
(3) the number of payments or period to which
such order applies, and
(4) each Plan to which such order applies.
(c) A domestic relations order can be a Qualified
Domestic Relations Order only if such order does not:
(1) require the Plan to provide any type or
form of benefit, or any option not otherwise provided
under the Plan,
(2) require the Plan to provide increased
benefits (determined on the basis of actuarial value),
or
(3) require the payment of benefits to an
alternate payee which are required to be paid to
another alternate payee under another order previously
determined to be a Qualified Domestic Relations Order.
(d) In the case of any payment before a Member has
had a Termination of Employment, a domestic relations order
shall not be treated as failing to meet the requirements of
subsection 12.2(c)(1) solely because such order requires
that payment of benefits be made to an alternate payee:
(1) on or after the date on which the Member
attains (or would have attained) 50 years of age,
-86-
(2) as if the Member had retired on the date
on which such payment is to begin under such order
(but taking into account only the present value of the
benefits actually accrued and not taking into account
the present value of any employer subsidy for early
retirement), and
(3) in any form in which such benefits may be
paid under the Plan to the Member (other than in the
form of a qualified joint and survivor annuity with
respect to the alternate payee and his or her
subsequent spouse).
(e) To the extent provided in any Qualified Domestic
Relations Order the former spouse of a Member if married to
the Member for at least one year, shall be treated as the
surviving spouse of such Member for the purpose of
consenting to the waiver of a Qualified Joint and Survivor
Pension or Surviving Spouse's Pension and to the naming of
another Beneficiary as provided in subsection 5.3 with
respect to the portion of a Member's Net Balance Account
subject to such Qualified Domestic Relations Order.
(f) Notwithstanding anything to the contrary in
subsections 6.2 and 6.3, if, pursuant to an order determined
by the Committee or its delegate to be a Qualified Domestic
Relations Order, a segregated account is established
containing the interest of an alternate payee, the alternate
payee shall direct the manner in which such segregated
account shall be invested in accordance with the procedures
under subsections 6.2 or 6.3, as applicable; provided that
any such segregated account shall continue to be invested in
accordance with the investment elections last given by the
Member before the establishment of the segregated account
until the alternate payee provides new investment
instructions.
(g) Unless otherwise further restricted in a
Qualified Domestic Relations Order, the Alternate Payee may
elect to receive a distribution (1) within or commencing
within a reasonable time after a Valuation Date or
Accounting Date which follows the date on which the Member
attains the age of 50 and which is at least 30 days (or such
lesser period as the Committee may from time to time permit)
after the date on which the Committee receives the Alternate
Payee's distribution election and (2) in any form in which
benefits may be paid pursuant to subsection 5.2 to the
Member.
12.3 Maximum Age Condition. Anything to the contrary
herein notwithstanding, eligibility to participate in the Plan
and to elect or receive allocations of contributions to the Trust
-87-
shall not be subject to any restrictions on account of a maximum
age condition.
12.4 Litigation. In the event that any person may bring
any legal or equitable action arising under the Plan against the
Trustee or Employer or the Committee, or in the event that
Employer or the Committee or the Trustee may find it necessary to
bring any legal or equitable action arising under the Plan
against any person, Employer or the Committee shall have the
right to join the Trustee as a party defendant or party plaintiff
in any such actions, and all expenses of defending or bringing
such action shall be paid by the Trustee from the Trust Fund.
12.5 Rights Against Employer. Neither the establishment of
the Plan, nor of the Trust, nor any modification thereof, nor any
distributions hereunder shall be construed as giving to any
Member or any person whomsoever any legal or equitable rights
against the Committee, Employer, or the officers, directors or
shareholders as such of Employer, or as giving any Employee or
Member the right to be retained in the employ of Employer. All
benefits payable under the Plan shall be paid or provided for
solely from the Trust Fund, and Employer shall have no liability
or responsibility for benefit distributions other than to make
contributions to the Trust Fund as herein provided.
12.6 Illegality of Particular Provision. The illegality of
any particular provision of this Plan or portion thereof shall
not affect the other provisions hereof or portions of provisions,
but the Plan shall be construed in all respects as if such
invalid provision or invalid portion of a provision were omitted.
12.7 Effect of Mistake. In the event of a mistake or
misstatement as to the age, eligibility, Pay, Service or
participation of a Member, or the allocations made to the account
of any Member, or the amount of distributions made or to be made
to a Member or other person, the Committee shall, to the extent
it deems possible, cause to be allocated from future Employer
contributions or future Remainders, or cause to be withheld or
accelerated, or otherwise made adjustments of, such amounts as
will in its judgment accord to such Member or other person, the
credits to the account or distributions to which he is properly
entitled under the Plan.
12.8 Indemnification. Each member of the Committee, each
member of the Board of Directors, each individual serving as
Trustee without compensation, and each and every Employee to whom
are delegated duties, responsibilities and authority with respect
to the Plan and the Trust shall be indemnified and held harmless
by the Company against all claims, liabilities, fines and
penalties and all expenses (including, but not limited to,
attorney fees) reasonably incurred by or imposed upon such member
of the Board of Directors, individual or Employee which arise as
-88-
a result of his actions or failure to act in connection with the
operation and administration of the Plan and the Trust, to the
extent lawfully allowable and to the extent that such claim,
liability, fine, penalty or expense is not paid for by liability
insurance purchased by or paid for by the Company.
Notwithstanding the foregoing, the Company shall not indemnify
any person for any such amount incurred through any settlement or
compromise of any action unless the Company consents in writing
to such settlement or compromise. Expenses incurred in defending
a civil or criminal action, suit or proceeding may be paid by the
Company in advance of the final disposition of such action, suit
or proceeding as authorized by the Company in the specific case
upon receipt of an undertaking by or on behalf of the member of
the Committee, member of the Board of Directors, individual
Trustee or Employee to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by
the Company as authorized in this subsection 12.8.
12.9 Applicable Laws. Except as otherwise provided by
federal law, the Plan shall be governed by and construed
according to the laws of the State of Illinois, with the
exception of any Trust, which shall be governed by and construed
according to the laws of such State as may be agreed with the
Trustee, or in absence of such agreement the State in which the
principal office of the Trustee is located.
12.10 Gender and Number. Except when otherwise indicated by
the context, any masculine terminology herein shall also include
the feminine, and the definition of any term herein in the
singular shall also include the plural.
IN WITNESS WHEREOF, the Company has caused these presents to
be signed by its duly authorized officer and has caused its
corporate seal to be hereto affixed this 30th day of December,
1994.
CHICAGO AND NORTH WESTERN
RAILWAY COMPANY
/s/ R. F. Ard
By: R. F. Ard
ATTEST:
/s/ Robin Bourne-Caris
Secretary
(Corporate Seal)
-89-
APPENDIX I
For purposes of determining the Actuarial Equivalent under
subsection 2.2 of the Plan, the mortality basis and interest rate
used shall be the following:
(a) Mortality Basis: The mortality table used shall be
the UP-1984 Table without adjustment.
(b) Interest Rate: The interest rate used shall be
determined in accordance with (i) or (ii) below:
(i) For purposes of determining the Actuarial
Equivalent of a Member's Net Balance Account (or
portion thereof) converted to a single life
annuity (which shall be done regardless of
whether a Member's Net Balance Account or
portion thereof is paid as a single life annuity
or a Qualified Joint and Survivor Annuity) under
subsection 2.2 during a calendar year, the
interest rate used shall be the sum of the
November 30 yield to maturity for the Lehman
Brothers Kuhn Loeb, Long Term Government Agency
Bond Index (hereinafter called the "index") for
the three preceding calendar years divided by
three with the results rounded to the nearest
quarter of a percent. In the event that the
index is not in existence as of November 30 of
any calendar year, the November 30 twenty-year
yield series for the Treasury Constant Maturity
Yield Series shall be substituted for the index
for all years used in the determination of the
interest rate under this subparagraph (i). If
neither such index is or was in existence for a
sufficient period of time to permit a
determination of the above described three
preceding calendar year average rate of
interest, such average rate of interest shall be
based upon the United States Long Term Treasury
Bonds with more than a 10 year maturity. The
interest rate shall be determined and applied as
of the date on which the vested Member's Net
Balance Account or a portion thereof is
transferred to the Chicago and North Western
Railway Company Supplemental Pension Plan
(called the Chicago and North Western
Transportation Company Supplemental Pension Plan
until May 5, 1994) for the payment of benefits
in the form of a life annuity as provided in
subsection 5.5.
-90-
(ii) For all other purposes including converting a
single life annuity into a Qualified Joint and
Survivor Annuity, the interest rate with respect
to life annuity benefits paid by the Chicago and
North Western Railway Company Supplemental
Pension Plan (called the Chicago and North
Western Transportation Company Supplemental
Pension Plan until May 5, 1994) with respect to
the vested Member's Net Balance Account or
portion thereof in accordance with
subsection 5.5 shall be 8%.
Notwithstanding the above provisions, for purposes of determining
the life annuity benefit payable under the Chicago and North
Western Railway Company Supplemental Pension Plan (called the
Chicago and North Western Transportation Company Supplemental
Pension Plan until May 5, 1994) with respect to the vested
Member's Net Balance Account or portion thereof, the Actuarial
Equivalent shall be the Accrued Benefit reduced by 1/2 of 1% for
each full month that the benefit commencement date precedes
Normal Retirement Age to the first full month after the Member
attains age 55 and further reduced for each full month that the
benefit commencement date precedes the first full month after the
Member attains age 55 using the mortality assumptions specified
in (a) above and the interest rate assumption specified in
(b)(ii) above.
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Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 3/22/95 |
| | 1/1/95 | | 59 |
| For Period End: | | 12/31/94 | | | | | | | 10-K/A |
| | 5/6/94 | | 6 |
| | 5/5/94 | | 1 | | 96 |
| | 1/1/94 | | 18 |
| | 1/1/93 | | 63 |
| List all Filings |
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