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RETIREMENT SAVINGS PLAN OF TYSON FOODS, INC

Employee Benefits Plan Agreement

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TYSON FOODS, INC

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Title: RETIREMENT SAVINGS PLAN OF TYSON FOODS, INC
Governing Law: Delaware     Date: 11/20/2008
Industry: Food Processing     Sector: Consumer/Non-Cyclical

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EXHIBIT 10.48

 

 

RETIREMENT SAVINGS PLAN

OF

TYSON FOODS, INC.

 

 

THIS INDENTURE is made as of the 3rd day of November, 2008, by TYSON FOODS, INC, a corporation duly organized and existing under the laws of the State of Delaware.

 

W I T N E S S E T H :

 

WHEREAS, the Primary Sponsor established by indenture originally effective as of October 1, 1987, the Retirement Savings Plan of Tyson Foods, Inc. (the “Plan”), which was last amended by indenture dated January 1, 1993; and

 

WHEREAS, the Primary Sponsor previously amended and restated the Plan primarily to comply with and make changes permitted by the provisions of the Small Business Job Protection Act of 1996 and the Taxpayer Relief Act of 1997 by indenture dated December 13, 1999, generally effective as of January 1, 1997; and

 

WHEREAS, the Primary Sponsor wishes to amend and restate the Plan primarily to consolidate amendments made subsequent to the last amendment and restatement of the Plan; to comply with and make other changes permitted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”); to reflect final regulations issued under Section 415 of the Code and other regulatory developments; to make certain changes required or permitted by the Pension Protection Act of 2006 (“PPA”); and to make certain other miscellaneous changes; and

 

WHEREAS, the Plan is intended to be a profit sharing plan within the meaning of Treasury Regulations Section 1.401-1(b)(1)(ii) and also contains a cash or deferred arrangement as described in Section 401(k) of the Internal Revenue Code of 1986; and

 

WHEREAS, the Plan is intended to satisfy the safe harbor requirements of Code Section 401(k)(12) and Code Section 401(m)(11); and

 

WHEREAS, the provisions of the Plan, as amended and restated herein, shall apply to Plan Years beginning after January 1, 2008, except to the extent the provisions are required to apply at an earlier date or to any other participants to comply with applicable law;

 

NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the Plan in its entirety, generally effective as of January 1, 2008, except as otherwise provided herein, to read as follows:

 

 

 

RETIREMENT SAVINGS PLAN

OF

TYSON FOODS, INC.

 

                                    Page

SECTION 1 DEFINITIONS

1

 

SECTION 2 ELIGIBILITY

13

 

SECTION 3 CONTRIBUTIONS

14

 

SECTION 4 ALLOCATIONS AND INVESTMENT OF TRUST ASSETS

18

 

SECTION 5 PLAN LOANS

20

 

SECTION 6 IN-SERVICE WITHDRAWALS

22

 

SECTION 7 PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT

24

 

SECTION 8 PAYMENT OF BENEFITS OF RETIREMENT

26

 

SECTION 9 DEATH BENEFITS

27

 

SECTION 10 GENERAL RULES ON DISTRIBUTIONS

27

 

SECTION 11 ADMINISTRATION OF THE PLAN

28

 

SECTION 12 CLAIM REVIEW PROCEDURE

31

 

SECTION 13 INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS

34

 

SECTION 14 PROHIBITION AGAINST DIVERSION

36

 

SECTION 15 LIMITATION OF RIGHTS

36

 

SECTION 16 AMENDMENT TO OR TERMINATION OF THE PLAN AND THE TRUST

36

 

SECTION 17 ADOPTION OF PLAN BY AFFILIATES

38

 

SECTION 18 QUALIFICATION AND RETURN OF CONTRIBUTIONS

38

 

SECTION 19 INCORPORATION OF SPECIAL LIMITATIONS

39

 

APPENDIX A LIMITATION ON ALLOCATIONS

A-1

 

APPENDIX B TOP-HEAVY PROVISIONS

B-1

 

APPENDIX C SPECIAL NONDISCRIMINATION RULES

C-1

 

APPENDIX D FROZEN BENEFIT DISTRIBUTION RULES

D-1

 

APPENDIX E MINIMUM DISTRIBUTION REQUIREMENTS

E-1

 

 

 

SECTION 1             

DEFINITIONS

 

Wherever used herein, the masculine pronoun shall be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise and the following words and phrases shall, when used herein, have the meanings set forth below:

 

1.1       “ Account ” means a Participant’s aggregate balance in the following accounts, as adjusted pursuant to the Plan as of any given date:

 

(a)       “ Salary Deferral Contribution Account ” which shall reflect a Participant’s interest in contributions made by a Plan Sponsor under Plan Section 3.1.

 

(b)       “ Employer Contribution Account ” which shall reflect a Participant’s interest in matching contributions made by a Plan Sponsor under Plan Section 3.2.

 

(c)       “ Stock Match Account ” which shall reflect a Participant’s interest in contributions made by a Plan Sponsor under Plan Section 3.3.

 

(d)       “ After-Tax Contribution Account ” which shall reflect a Participant’s interest in after-tax contributions previously made by a Participant to the Fund or transferred to the Plan in a trust-to-trust transfer.

 

(e)       “ Rollover Account ” which shall reflect a Participant’s interest in Rollover Amounts. Notwithstanding the foregoing, if the Plan accepts any Rollover Amounts that are not includable in the gross income of the Participant (determined without regard to the rollover) and are transferred to the Plan in a direct trustee-to-trustee transfer, it shall separately account for such amounts and earnings and losses thereon.

 

The Plan Administrator shall also maintain such additional subaccounts as it determines necessary or desirable to reflect trust-to-trust transfers (other than Rollover Amounts), including, but not limited to, the mergers of other tax-qualified retirement plans with and into the Plan. In addition, the Plan Administrator may allocate the interest of a Participant in any funds transferred to the Plan in any trust-to-trust transfer (other than Rollover Amounts) among the above accounts as the Plan Administrator determines best reflects the interest of the Participant.

 

1.2       “ Affiliate ” means (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Code Section 414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or not incorporated) under common control (within the meaning of Code Section 414(c)) with a Plan Sponsor, (c) any other corporation, partnership or other organization which is a member of an affiliated service group (within the meaning of Code Section 414(m)) with a Plan Sponsor, and (d) any other entity required to be aggregated with a Plan Sponsor pursuant to regulations under Code Section 414(o). Notwithstanding the foregoing, for purposes of applying the limitations set forth in Appendix A and for purposes of determining Annual Compensation under Appendix A, the references to Code Sections 414(b) and (c) above shall be as modified by Code Section 415(h).

 

 

 

1.3       “ Annual Compensation ” means wages within the meaning of Code Section 3401(a) (for purposes of income tax withholding at the source) and all other payments of compensation to an Employee by a Plan Sponsor and Affiliates (in the course of the entity’s trade or business) during a Plan Year for which the Plan Sponsor or Affiliate, as applicable, is required to furnish the Employee a written statement as required to be reported under Code Sections 6041(d), 6051(a)(3) and 6052 (but without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed, such as the exception for agricultural labor in Code Section 3401(a)(2)). Annual Compensation in excess of the Annual Compensation Limit shall be disregarded for all purposes under the Plan except for purposes of determining who are Highly Compensated Employees. Notwithstanding the above, Annual Compensation shall be determined as follows:

 

(a)       (1)        for purposes of determining, with respect to each Plan Sponsor, the amount of contributions made by or on behalf of an Employee under Plan Section 3 and allocations under Plan Section 4, and

 

(2)       for purposes of applying the provisions of Appendix C hereto for such Plan Years as the Secretary of the Treasury may allow,

 

Annual Compensation shall only include amounts received for the portion of the Plan Year during which the Employee was a Participant;

 

(b)       for all purposes under the Plan, Annual Compensation shall not include reimbursements or other expense allowances, cash and noncash fringe benefits, moving expense allowances, deferred compensation, welfare benefits, and amounts realized from the exercise of non-qualified stock options or when restricted stock (or property) held by an employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;

 

(c)       in determining the amount of contributions under Plan Section 3 (other than Section 3.3) and allocations under Plan Section 4 (other than Section 4.1(b)) made by or on behalf of an Employee, Annual Compensation shall not include (1) bonus compensation, except annual bonus compensation of only those Participants who are not eligible to participate in the Executive Savings Plan of Tyson Foods, Inc. (or any successor plan) and other regularly scheduled bonus payments, (2) special non-recurring forms of remuneration; and (3) employer contributions under the Tyson Foods, Inc. Employee Stock Purchase Plan;

 

(d)       for all purposes under the Plan, Annual Compensation shall include any amount which would have been paid during a Plan Year, but was contributed by a Plan Sponsor on behalf of an Employee pursuant to a salary reduction agreement which is not includable in the gross income of the Employee under Section 125, 132(f)(4), 402(g)(3), or 457 of the Code;

 

 

 

(e)       notwithstanding the provisions of Subsection (c), if for any Plan Year the compensation percentage for Highly Compensated Employees exceeds by more than a de minimis amount the compensation percentage for Participants who are not Highly Compensated Employees, then the items of Annual Compensation described in Subsection (c) above shall be included as part of Annual Compensation for purposes of determining Plan Sponsor contributions made to Stock Match Accounts; and

 

(f)        for purposes of applying the annual addition limits in Appendix A, Annual Compensation:

 

 

(1)

shall be measured by the limitation year;

(2)       shall include compensation paid following a severance from employment if such compensation is for services during or outside the Employee’s regular working hours, commissions, bonuses, or other similar payments and the compensation would have been paid to the Employee prior to severance from employment if the Employee had continued in employment with the Plan Sponsor or an Affiliate, in accordance with Treasury Regulations Section 1.415(c)-2(e)(3)(ii);

(3)       shall include payments for unused accrued bona fide sick, vacation, or other leave, but only if the employee would have been able to use the leave if employment had continued;

(4)       shall include compensation received by an Employee pursuant to a nonqualified unfunded deferred compensation plan, but only if the payment would have been paid to the Employee at the same time if the Employee had continued in employment with a Plan Sponsor and only to the extent that the payment is includable in the Employee’s gross income;

(5)       shall not include any other post-severance from employment compensation;

(6)       shall include payments to an individual who does not currently perform services for a Plan Sponsor by reason of qualified military service (within the meaning of Code Section 414(u)(1)) to the extent those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for a Plan Sponsor rather than entering qualified military service; and

(7)       shall include compensation paid to a Participant who is permanently and totally disabled (as defined in Code Section 22(e)(3)).

1.4       “ Annual Compensation Limit ” means $230,000 (for the 2008 Plan Year), which amount may be adjusted in subsequent Plan Years based on changes in the cost of living as announced by the Secretary of the Treasury. If a determination period consists of fewer than twelve months, the Annual Compensation Limit shall be multiplied by a fraction, the numerator

 

 

 

of which is the number of months in the determination period and the denominator of which is twelve.

 

1.5       “ Appeals Fiduciary ” means an individual or group of individuals appointed to review appeals of claims for benefits payable due to a Participant’s Disability made pursuant to Plan Section 12.4.

 

1.6       “ Beneficiary ” means the person or trust that a Participant designated most recently in a manner acceptable to the Plan Administrator; provided, however, that if the Participant has failed to make a designation, no person designated is alive, no trust has been established, or no successor Beneficiary has been designated who is alive, the term “Beneficiary” means (a) the Participant’s spouse or (b) if no spouse is alive, the deceased Participant’s estate. Notwithstanding the preceding sentence, the spouse of a married Participant shall be his Beneficiary unless that spouse has consented in writing to the designation by the Participant of some other person or trust and the spouse’s consent acknowledges the effect of the designation and is witnessed by a notary public or a Plan representative. A Participant may change his designation at any time. However, a Participant may not change his designation without further consent of his spouse under the terms of the preceding sentence unless the spouse’s consent permits designation of another person or trust without further spousal consent and acknowledges that the spouse has the right to limit consent to a specific beneficiary and that the spouse voluntarily relinquishes this right. Notwithstanding the above, the spouse’s consent shall not be required if the Participant establishes to the satisfaction of the Plan Administrator that the spouse cannot be located, if the Participant has a court order indicating that he is legally separated or has been abandoned (within the meaning of local law) unless a “qualified domestic relations order” (as defined in Code Section 414(p)) provides otherwise, or if there are other circumstances as the Secretary of the Treasury prescribes. If the spouse is legally incompetent to give consent, consent by the spouse’s legal guardian shall be deemed to be consent by the spouse. If, subsequent to the death of a Participant, the Participant’s Beneficiary dies while entitled to receive benefits under the Plan, the successor Beneficiary, if any, or the Beneficiary listed under Subsection (a) or, if no spouse is alive, Subsection (b) shall be the Beneficiary.

 

1.7       “ Board of Directors ” means the Board of Directors or other governing body of the Primary Sponsor.

 

1.8       “ Break in Service ” means the failure of an Employee, in connection with a termination of employment, to complete a twelve-consecutive-month period beginning on a Severance Date or anniversary thereof during which the Employee fails to perform an Hour of Service. Notwithstanding the foregoing, the absence from employment at anytime during a Plan Year by reason of service in the armed forces of the United States shall not cause a Break in Service during a Plan Year if such Employee is reemployed by the Plan Sponsor within four months after his discharge or release from such service in the armed forces.

 

 

1.9

Code ” means the Internal Revenue Code of 1986, as amended.

 

1.10     “ Deferral Amount ” means a contribution of a Plan Sponsor on behalf of a Participant pursuant to Plan Section 3.1.

 

 

 

 

1.11     “ Direct Rollover ” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

 

1.12     “ Disability ” means a disability of a Participant which, in the opinion of the Plan Administrator, causes a Participant to be totally and permanently disabled due to sickness or injury so as to be completely unable to perform any and every duty pertaining to his occupation from a cause other than as specified below:

 

(a)       excessive and habitual use by the Participant of drugs, intoxicants or narcotics;

 

(b)       injury or disease sustained by the Participant while willfully and illegally participating in fights, riots, civil insurrections or while committing a felony;

 

(c)       injury or disease sustained by the Participant while serving in any armed forces;

 

(d)       injury or disease sustained by the Participant diagnosed or discovered subsequent to the date of his termination of employment;

 

(e)       injury or disease sustained by the Participant while working for anyone other than the Plan Sponsor or any Affiliate and arising out of such employment; and

 

(f)        injury or disease sustained by the Participant as a result of an act of war, whether or not such act arises from a formally declared state of war.

 

The determination of whether or not a Disability exists shall be determined by the Plan Administrator and shall be substantiated by competent medical evidence.

 

1.13     “ Distributee ” means an Employee or former Employee. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order (as defined in Code Section 414(p)), are Distributees with regard to the interest of the spouse or former spouse. Effective for distributions made on and after January 1, 2008, a non-spouse Beneficiary of a deceased Participant who is either an individual or an irrevocable trust, where the beneficiaries of such trust are identifiable and the trustee provides the Plan Administrator with a final list of trust beneficiaries or a copy of the trust document by October 31 of the year following the Participant’s death, shall be a Distributee with regard to the interest of the deceased Participant, but only if the Eligible Rollover Distribution is transferred in a direct trustee-to-trustee transfer to an Eligible Retirement Plan which is an individual retirement account described in Code Section 408(a) or an individual retirement account described in Code Section 408(b) (other than an endowment contract).

 

1.14     “ Elective Deferrals ” means, with respect to any taxable year of the Participant, the sum of

 

 

 

 

 

(a)

any Deferral Amounts;

 

(b)       any contributions made by or on behalf of a Participant under any other qualified cash or deferred arrangement as defined in Code Section 401(k), whether or not maintained by a Plan Sponsor, to the extent such contributions are not or would not, but for Code Section 402(g)(1), be included in the Participant’s gross income for the taxable year; and

 

(c)       any other contributions made by or on behalf of a Participant pursuant to Code Section 402(g)(3).

 

1.15     “ Eligibility Service ” means the completion of a twelve-consecutive-month period beginning on the date on which the Employee first performs an Hour of Service upon his employment or reemployment or any anniversary thereof without reaching a Severance Date; provided, however, if an Employee quits, retires or is discharged and then performs an Hour of Service within twelve months of his Severance Date, then such period of severance shall be taken into account in calculating Eligibility Service.

 

1.16     “ Eligible Employee ” means any Employee of a Plan Sponsor other than an Employee who is (a) covered by a collective bargaining agreement between a union and a Plan Sponsor, provided that retirement benefits were the subject of good faith bargaining, unless the collective bargaining agreement provides for participation in the Plan, (b) a leased employee within the meaning of Code Section 414(n)(2), (c) deemed to be an Employee of a Plan Sponsor pursuant to regulations under Code Section 414(o), or (d) a non-resident alien. In addition, no person who is initially classified by a Plan Sponsor as an independent contractor for federal income tax purposes shall be regarded as an Eligible Employee for that period, regardless of any subsequent determination that any such person should have been characterized as a common law employee of the Plan Sponsor for the period in question. For purposes of this Section 1.16 and Section 1.19 below, an Employee shall be deemed to be a “leased employee within the meaning of Code Section 414(n)(2)” if the individual is a person (other than an Employee of the recipient) who, pursuant to an agreement between the recipient and any other person, has performed services for the recipient (or for the recipient and related persons determined in accordance with Code Section 414(n)(6)), on a substantially full-time basis for a period of at least one year, and such services are performed under the primary direction or control of the service recipient.

 

1.17     “ Eligible Retirement Plan ” means any of the following that will accept a Distributee’s Eligible Rollover Distribution:

 

 

(a)

an individual retirement account described in Code Section 408(a);

 

(b)       an individual retirement annuity described in Code Section 408(b) (other than an endowment contract);

 

 

 

(c)       an annuity plan described in Code Section 403(a) or an annuity contract described in Code Section 403(b), unless the Distributee is a non-spouse Beneficiary of a deceased Participant;

 

(d)       a qualified trust described in Code Section 401(a), unless the Distributee is a non-spouse Beneficiary of a deceased Participant; or

 

(e)       an eligible plan under Code Section 457(b) which is maintained by a state or political subdivision of a state, or any agency or instrumentality of a state or political subdivision and which agrees to separately account for amounts transferred into such plan from this Plan, unless the Distributee is a non-spouse Beneficiary of a deceased Participant.

 

Effective for distributions after December 31, 2005, If any portion of an Eligible Rollover Distribution is attributable to payments or distributions from a designated Roth account (as defined in Code Section 402A), an Eligible Retirement Plan with respect to such portion shall include only another designated Roth account and a Roth IRA.

 

1.18     “ Eligible Rollover Distribution ” means any distribution of all or any portion of the Distributee’s Account:

 

(a)       including any portion of the distribution that is not includable in gross income provided such amount is distributed directly to one of the following:

(i)        an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (other than an endowment contract); or

(ii)       a qualified trust as described in Code Section 401(a) or an annuity contract described in Code Section 403(b) but only to the extent that            

(A)      the distribution is made in a direct trustee-to-trustee transfer; and

(B)      the transferee plan or contract agrees to separately account for amounts transferred (and earnings thereon), including a separate accounting for the portion of the distribution which is includable in income and the portion which is not includable in income; and

 

(b)

excluding:

(i)        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 (10) years or more;

 

 

 

(ii)       any distribution to the extent such distribution is required under Code Section 401(a)(9);

(iii)      except as otherwise provided in this Section, the portion of any distribution that is not includable in gross income (determined without regard to the exclusions for net unrealized appreciation with respect to employer securities);

(iv)      a distribution due to the hardship of an Employee, his spouse, his dependent, or his Beneficiary; or

(v)       if the Distributee is a non-spouse Beneficiary of a deceased Participant, any distribution other than a direct trustee-to-trustee transfer to an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (other than an endowment contract).

1.19     “ Employee ” means any person who is (a) a common law employee of a Plan Sponsor or an Affiliate, (b) a leased employee within the meaning of Code Section 414(n)(2) with respect to a Plan Sponsor, or (c) deemed to be an employee of a Plan Sponsor pursuant to regulations under Code Section 414(o).

 

 

1.20

Entry Date ” means the first day of each payroll period.

 

1.21     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

 

1.22     “ Fiduciary ” means each Named Fiduciary and any other person who exercises or has any discretionary authority or control regarding management or administration of the Plan, any other person who renders investment advice for a fee or has any authority or responsibility to do so with respect to any assets of the Plan, or any other person who exercises or has any authority or control respecting management or disposition of assets of the Plan.

 

1.23     “ Fund ” means the amount at any given time of cash and other property held by the Trustee pursuant to the Plan.

 

1.24     “ Highly Compensated Employee ” means, with respect to a Plan Year, each Employee who:

 

(a)       was at any time during the Plan Year or the immediately preceding Plan Year an owner of more than five percent (5%) of the outstanding stock of a Plan Sponsor or Affiliate or more than five percent (5%) of the total combined voting power of all stock of a Plan Sponsor or Affiliate;

 

(b)       received Annual Compensation in excess of $105,000 (which amount may be adjusted in subsequent Plan Years based on changes in the cost of living as announced by the Secretary of the Treasury)during the immediately preceding Plan Year; or

 

 

 

(c)       is a former Employee who met the requirements of Subsection (a)(1) or (a)(2) at the time the former Employee separated from service with the Plan Sponsor or an Affiliate or at any time after the former Employee attained age 55. The determination of who is a former Highly Compensated Employee is based on the rules applicable to determining Highly Compensated Employee status as in effect for that determination year in accordance with Treasury Regulation Section 1.414(q)-1T, Q&A-4 and Notice 97-45 or later guidance under the Code.

 

 

1.25

Hour of Service ” means:

 

(a)       Each hour for which an Employee is paid, or entitled to payment, for the performance of duties for a Plan Sponsor or any Affiliate during the applicable computation period, and such hours shall be credited to the computation period in which the duties are performed;

 

(b)       Each hour for which an Employee is paid, or entitled to payment, by a Plan Sponsor or any Affiliate on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence;

 

(c)       Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by a Plan Sponsor or any Affiliate, and such hours shall be credited to the computation period or periods to which the award or agreement for back pay pertains rather than to the computation period in which the award, agreement or payment is made; provided, that the crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in Subsection (b) of this Section shall be subject to the limitations set forth in Subsection (f);

 

(d)       Solely for purposes of determining whether a Break in Service has occurred, each hour during any period that the Employee is absent from work (1) by reason of the pregnancy of the Employee, (2) by reason of the birth of a child of the Employee, (3) by reason of the placement of a child with the Employee in connection with the adoption of the child by the Employee, or (4) for purposes of caring for such child for a period immediately following its birth or placement. The hours described in this Subsection (d) shall be credited (A) only in the computation period in which the absence from work begins, if the Employee would be prevented from incurring a Break in Service in that year solely because of that credit, or (B), in any other case, in the next following computation period;

 

(e)       Without duplication of the Hours of Service counted pursuant to Subsection (d) hereof and solely for such purposes as required pursuant to the Family and Medical Leave Act of 1993 and the regulations thereunder (the “Act”), each hour (as determined pursuant to the Act) for which an Employee is granted leave under the Act (1) for the birth of a child, (2) for placement with the Employee of a child for adoption or foster care, (3) to care for the Employee’s spouse, child or parent with a serious health

 

 

 

condition, or (4) for a serious health condition that makes the Employee unable to perform the functions of the Employee’s job;

 

(f)        The Plan Administrator shall credit Hours of Service in accordance with the provisions of Section 2530.200b-2(b) and (c) of the U.S. Department of Labor Regulations or such other federal regulations as may from time to time be applicable and determine Hours of Service from the employment records of a Plan Sponsor or in any other manner consistent with regulations promulgated by the Secretary of Labor, and shall construe any ambiguities in favor of crediting Employees with Hours of Service. Notwithstanding any other provision of this Section, in no event shall an Employee be credited with more than 501 Hours of Service during any single continuous period during which he performs no duties for the Plan Sponsor or Affiliate; and

 

(g)       In the event that a Plan Sponsor or an Affiliate acquires substantially all of the assets of another corporation or entity or a controlling interest of the stock of another corporation or merges with another corporation or entity and is the surviving entity, then service of an Employee who was employed by the prior corporation or entity and who is employed by the Plan Sponsor or an Affiliate at the time of the acquisition or merger shall be counted in the manner provided, with the consent of the Primary Sponsor, in resolutions adopted by the Plan Sponsor which authorizes the counting of such service.

 

(h)       Notwithstanding any other provision in the Plan, Hours of Service will be provided in accordance with Code Section 414(u) with respect to qualified military service to the extent required.

 

1.26     “ Individual Fund ” means individual subfunds of the Fund as may be established by the Plan Administrator from time to time for the investment of the Fund.

 

1.27     “ Investment Committee ” means a committee, which may be established to direct the Trustee with respect to investments of the Fund.

 

1.28     “ Investment Manager ” means a Fiduciary, other than the Trustee, the Plan Administrator, or a Plan Sponsor, who may be appointed by the Primary Sponsor:

 

(a)       who has the power to manage, acquire, or dispose of any assets of the Fund or a portion thereof; and

 

 

(b)

who

 

(1)       is registered as an investment adviser under the Investment Advisers Act of 1940;

 

(2)       is not registered as an investment adviser under such Act by reason of Paragraph (1) of Section 203A(a) of such Act, is registered as an investment adviser under the laws of the State (referred to in such Paragraph (1)) in which it maintains its principal office and place of business, and, at the time the fiduciary

 

 

 

last filed the registration form most recently filed by the fiduciary with such State in order to maintain the fiduciary’s registration under the laws of such State, also filed a copy of such form with the Secretary;

 

 

(3)

is a bank as defined in such Act; or

 

(4)       is an insurance company qualified to perform services described in Subsection (a) above under the laws of more than one state; and

 

(c)       who has acknowledged in writing that he is a Fiduciary with respect to the Plan.

 

 

1.29

Named Fiduciary ” means only the following:

 

 

(a)

the Plan Administrator;

 

 

(b)

the Trustee;

 

 

(c)

the Investment Committee;

 

 

(d)

the Investment Manager; and

 

 

(e)

the Appeals Fiduciary.

 

 

1.30

Normal Retirement Age ” means age 65.

 

1.31     “ Participant ” means any Employee or former Employee who has become a participant in the Plan for so long as his Account has not been fully distributed pursuant to the Plan.

 

1.32     “ Plan Administrator ” means the organization or person designated to administer the Plan by the Primary Sponsor and, in lieu of any such designation, means the Primary Sponsor.

 

1.33     “ Plan Sponsor ” means individually the Primary Sponsor and any Affiliate or other entity which has adopted the Plan and Trust; provided, however, if the Plan is adopted on behalf of Employees of one or more, but less than all, divisions or facilities of any Affiliate, then the term “Plan Sponsor”, as applied to that Affiliate, shall only apply to the divisions or facilities on behalf of whose Employees the Plan has been adopted.

 

 

1.34

Plan Year ” means the calendar year.

 

 

1.35

Primary Sponsor ” means Tyson Foods, Inc. and each successor thereto.

 

 

 

 

1.36     “ Retirement Date ” means the date on which the Participant experiences a termination of employment on or after (a) attaining Normal Retirement Age, or (b) becomes subject to a Disability.

 

1.37     “ Rollover Amount ” means any amount transferred to the Fund by a Participant, which amount qualifies as an Eligible Rollover Distribution under Code Sections 401(a)(31), 402(c)(4), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), and any regulations issued thereunder.

 

1.38     “ Severance Date ” means the earlier of (a) the date on which an Employee quits, is discharged, retires or dies, and (b) the first anniversary of the first date of a period in which an Employee remains absent from work (with or without pay) with the Plan Sponsor or any Affiliate for any reason. Notwithstanding the foregoing, the Severance Date of an Employee who is absent from work beyond the first anniversary of the first date of absence (1) by reason of the pregnancy of the Employee, (2) by reason of the birth of a child of the Employee, (3) by reason of the placement of a child with the Employee, or (4) for purposes of caring for the child for a period immediately following its birth or placement, means the second anniversary of the first date of absence from work. The Plan Administrator may require an Employee to provide to it timely information to establish the reason for any such absence hereunder and the number of days for which there was such an absence.

 

1.39     “ Termination Completion Date ” means the last day of the fifth consecutive Break in Service computation period, determined under the Section which defines Break in Service, in which a Participant completes a Break in Service.

 

1.40     “ Termination of Employment ” means a severance from employment (within the meaning of Code Section 401(k)(2)(B)(i)(I)) of an Employee from all Plan Sponsors and Affiliates for any reason other than death, Disability, or attainment of a Retirement Date. Any absence from active employment of the Plan Sponsor and Affiliates by reason of an approved leave of absence shall not be deemed for any purpose under the Plan to be a Termination of Employment. Transfer of an Employee from one Plan Sponsor to another Plan Sponsor or to an Affiliate shall not be deemed for any purpose under the Plan to be a Termination of Employment. In addition, transfer of an Employee to another employer (other than a Plan Sponsor or an Affiliate) in connection with a corporate transaction involving a sale of assets, merger, or sale of stock, shall not be deemed to be a Termination of Employment, for purposes of the timing of distributions under Section 7.1 or 7.2, if the employer to which such Employee is transferred agrees with the Plan Sponsor to accept a transfer of assets from the Plan to its tax-qualified plan in a trust-to-trust transfer meeting the requirements of Code Section 414(l).

 

1.41     “ Trust ” means the trust established under an agreement between the Primary Sponsor and the Trustee to hold the Fund or any successor agreement.

 

 

1.42

Trustee ” means the trustee under the Trust.

 

 

1.43

Valuation Date ” means each regular business day.

 

 

 

 

SECTION 2             

ELIGIBILITY

 

2.1        Existing Participants . Each individual who was a Participant on the date immediately preceding the effective date of this amendment and restatement shall continue to be a Participant as of the effective date of this amendment and restatement.

2.2        Eligible Employees .   Each Eligible Employee shall become a Participant as of the Entry Date coinciding with or next following the date he completes his Eligibility Service.

 

2.3        Former Participants .   Except as provided in Section 2.5, each former Participant who is reemployed by a Plan Sponsor shall become a Participant as of the date of his reemployment as an Eligible Employee.

 

2.4        Former Employees Who Completed Their Eligibility Service .         Except as provided in Section 2.5, each former Employee who completes his Eligibility Service but terminates employment with a Plan Sponsor before becoming a Participant shall become a Participant as of the latest of the date he (a) is reemployed, (b) would have become a Participant if he had not incurred a termination of employment, or (c) becomes an Eligible Employee.

 

2.5        Former Employees Who Incur a Break in Service .   If a former Employee incurs a Break in Service, he shall become a Participant as of the Entry Date coinciding with or next following the date he completes a period of Eligibility Service following the date of his reemployment, regardless of whether the former Employee previously was a Participant.

 

2.6        Eligible Employees Who Have Not Completed Their Eligibility Service .   Solely for the purpose of contributing Deferral Amounts to the Plan, an Eligible Employee who has not yet completed his Eligibility Service may become a Participant as of the first day of the month following the completion of three full calendar months of service. Notwithstanding the foregoing, any Participant who is a Highly Compensated Employee who has not attained at least age 21 and has not completed his Eligibility Service shall not be permitted to contribute Deferral Amounts to the Plan following the Plan Year in which such a Participant is first eligible to contribute such Deferral Amounts until the Participant has attained at least age 21 and completed his Eligibility Service.

 

2.7        Eligibility to Contribute Rollover Amounts . Solely for the purpose of contributing a Rollover Amount to the Plan, an Eligible Employee who has not yet become a Participant pursuant to any other provision of this Section 2 shall become a Participant as of the date on which the Rollover Amount is contributed to the Plan only with respect to that Rollover Amount.

 

2.8        Stock Match Contribution Eligibility .            One or more classes of Eligible Employees of a Plan Sponsor may be designated as Participants solely for purposes of receiving contributions made pursuant to Section 3.3.

 

 

 

SECTION 3             

CONTRIBUTIONS

 

3.1       (a)        Deferral Amounts . The Plan Sponsor shall make a contribution to the Fund on behalf of each Participant who is an Eligible Employee and has elected to defer a portion of his Annual Compensation otherwise payable to him for the Plan Year and to have such portion contributed to the Fund. Except to the extent permitted under Section 3.1(c) and Code Section 414(v), the contribution made by a Plan Sponsor on behalf of a Participant under this Section 3.1(a) shall be in an amount equal to the amount specified in the Participant’s deferral election, but not greater than sixty percent (60%), but not less than two percent (2%) of the Participant’s Annual Compensation. Pursuant to Section 4 of Appendix C, the Plan Administrator may restrict the amount which Highly Compensated Employees may defer under this Section 3.1(a).

 

(b)        Limit on Deferral Amounts . Except to the extent permitted under Section 3.1(c) and Code Section 414(v), Elective Deferrals shall in no event exceed the limit set forth in Code Section 402(g) in any one taxable year of the Participant. In the event the amount of Elective Deferrals exceeds Code Section 402(g) limit, in any one taxable year then,

 

(1)       not later than the immediately following March 1, the Participant may designate to the Plan the portion of the Participant’s Deferral Amounts which consist of excess Elective Deferrals,

(2)       not later than the immediately following April 15, the Plan may distribute the amount designated to it under Paragraph (1) above, as adjusted to reflect income, gain, or loss attributable to it through the date of distribution, and reduced by any “Excess Deferral Amounts,” as defined in Appendix C hereto, previously distributed or recharacterized with respect to the Participant for the Plan Year beginning with or within that taxable year; and

(3)       that portion of the contributions allocated to the Participant pursuant to Section 3.2 on account of the Deferral Amounts attributable to excess Elective Deferrals shall be forfeited.

 

The payment of the excess Elective Deferrals, as adjusted and reduced, from the Plan shall be made to the Participant without regard to any other provision in the Plan. In the event that a Participant’s Elective Deferrals exceed the Code Section 402(g) limit, as adjusted, in any one taxable year under the Plan and other plans of the Plan Sponsor and its Affiliates, the Participant shall be deemed to have designated for distribution under the Plan the amount of excess Elective Deferrals, as adjusted and reduced, by taking into account only Elective Deferral amounts under the Plan and other plans of the Plan Sponsor and its Affiliates.

 

 

 

 

 

(c)

Catch-Up Contributions .

 

(1)       A Participant who is eligible to contribute Deferral Amounts to the Plan and who has attained or will attain age 50 on or before the last day of the Plan Year shall be eligible to elect to defer a portion of his Annual Compensation otherwise payable to him for the Plan Year and have such portion contributed to the Fund on his behalf as catch-up contributions (“Catch-Up Contributions”) in excess of the limits on Deferral Amounts set forth in Section 3.1(a) or 3.1(b) or any limit otherwise established by the Plan Administrator with respect to Highly Compensated Employees under Section 3.1(a). In addition, amounts contributed pursuant to Section 3.1(a) or this Section 3.1(c) may be treated as Catch-Up Contributions to the extent such amounts exceed any limit on Deferral Amounts that may be determined pursuant to Section 3 of Appendix C hereto (this limit and the limits in the preceding sentence being collectively referred to as the “Applicable Deferral Limits”).

 

(2)       Any election under this Section 3.1(c) must be made before the portion of Annual Compensation that the Participant desires to defer is payable and may only be made or be deemed to have been made in such manner and subject to such rules and limitations as the Plan Administrator may prescribe and shall specify the amount of Annual Compensation that the Participant desires to defer and to have contributed to the Fund. Catch-Up Contributions made pursuant to this Section 3.1(c) by a Participant shall be in an amount equal to the amount specified in the Participant’s deferral agreement and may be made on a payroll period basis or an annual basis in accordance with the administrative procedures provided by the Plan Administrator, but shall in no event shall the contributions exceed the limit on Catch-Up Contributions under Code Section 414(v) in any calendar year ($5,000 for 2008), as adjusted in future years by the Secretary of the Treasury (the “Code Section 414(v) limit”).

 

(3)       Contributions made pursuant to this Section 3.1(c) shall not be taken into account for purposes of implementing the limitations set forth in Section 3.1(a), 3.1(b) and Appendix A hereto. The Plan shall not be treated as failing to satisfy the provisions of Appendix B, Appendix C or Code Section 410(b), as applicable, by reason of the making of the Catch-Up Contributions as described in this Section 3.1(c).

 

(4)       The portion of the contribution made by a Plan Sponsor under this Section 3.1(c) that will be treated as Catch-Up Contributions will be determined as of the last day of the Plan Year. Amounts contributed by a Plan Sponsor pursuant to this Section 3.1(c) or recharacterized pursuant to Section 3 of Appendix C that do not exceed the Applicable Deferral Limits will not be treated as Catch-Up Contributions but will be treated as Deferral Amounts. Amounts contributed by a Plan Sponsor pursuant to this Section 3.1(c) or recharacterized pursuant to Section 3 of Appendix C that exceed the Applicable Deferral Limits will be treated as Contributions; provided, however, that the contribution under

 

 

 

this Section 3.1(c) or any amounts recharacterized under Section 3 of Appendix C for any Participant shall not be treated as a Catch-Up Contributions to the extent that those amounts and all other Elective Deferrals of the Participant under the Plan and other plans of the Plan Sponsor and its Affiliates for the taxable year exceed the Participant’s Annual Compensation.

 

(5)       The excess of the amounts treated as Catch-Up Contributions for a Participant under the Plan and other plans of the Plan Sponsor and its Affiliates over the Code Section 414(v) limit and amounts that are not treated as Catch-Up Contributions solely because they exceed the Participant’s Annual Compensation, will be distributed to the Participant in the same manner as Deferral Amounts are distributed pursuant to Section 3.1(b).

 

(d)        Deferral Elections . The elections under this Section 3.1 must be made before the Annual Compensation is payable and may only be made in such manner and subject to such rules and limitations as the Plan Administrator may prescribe and shall specify the percentage or, if permitted, dollar amount of Annual Compensation that the Participant desires to defer pursuant to Section 3.1(a) and/or 3.1(c) and to have contributed to the Fund. Once a Participant has made an election for a Plan Year, the Participant may revoke or modify his election to increase or reduce the rate of future deferrals, as provided in the administrative procedures established by the Plan Administrator.

 

3.2        Matching Contributions . The Plan Sponsor shall make contributions to the Fund with respect to each pay period during the Plan Year on behalf of each Participant who is an Eligible Employee and who has completed his Eligibility Service in an amount equal to (a) one hundred percent (100%) of the Participant’s Annual Compensation deferred by the Participant pursuant to Section 3.1 for the pay period, to the extent the contribution under Section 3.1 does not exceed three percent (3%) of his Annual Compensation for the pay period, and (b) fifty percent (50%) of the Participant’s Annual Compensation deferred by the Participant pursuant to Section 3.1 for the pay period, to the extent the contribution under Section 3.1 exceeds three percent (3%) of his Annual Compensation for the pay period but does not exceed five percent (5%) of such Annual Compensation. Contributions made pursuant to this Section 3.2 shall be determined without regard to the timing of when a Participant exceeds the limitation under Code 402(g), subject to the non-discrimination provisions of Code Section 401(a)(4).

 

 

3.3

Stock Match Contributions .

 

(a)       The Plan Sponsor proposes to make contributions to the Fund with respect to each Plan Year on behalf of those eligible Participants who have completed at least one year of Service (as defined below) in the amount and manner as determined in this Section 3.3.

 

(b)       Contributions made pursuant to this Section 3.3 on behalf of each eligible Participant shall be equal to a percentage, not to exceed fifty percent (50%), of the first ten percent (10%) of Base Earnings (as defined below) allocated by such eligible

 

 

 

Participant to the purchase of the Primary Sponsor’s common stock under the Tyson Foods, Inc. Employee Stock Purchase Plan (the “ESPP”) during such Participant’s period of participation in the ESPP following completion of his or her one-year period of Service. The Board of Directors (or any committee of the Board of Directors) shall determine from time to time on a prospective basis the level of contributions to be made pursuant to this Section 3.3, consistent with the general parameters set forth in the immediately preceding sentence. The Plan Administrator shall advise eligible Participants of any change in the level of matching contributions as soon as administratively practicable.

 

(c)       Contributions generally will be made at or about the same time as the payroll deductions for the Participant contributions under the ESPP to which they relate.

 

(d)       For purposes of this Section 3.3, an eligible Participant shall be an Employee of the Primary Sponsor (or any Plan Sponsor also maintaining the ESPP) who is determined not to be a Highly Compensated Employee for the applicable Plan Year.

 

(e)       The Primary Sponsor retains the discretion to suspend for any specific or indefinite periods of time the making of contributions pursuant to this Section 3.3 to otherwise eligible Participants as may from time to time be determined to be in the best interests of the Primary Sponsor. Such determinations shall be made by the Board of Directors (or any committee of the Board of Directors). Any such suspension of contributions may be applied to all eligible Participants or to one or more identifiable classes of eligible Participants and may be implemented at any time. Otherwise eligible Participants affected by any such suspension shall be provided with prior written notice of the implementation, and lifting, of the suspension.

 

(f)        For purposes of this Section 3.3, the following terms shall have the meanings ascribed to them below:

 

(1)       “Base Earnings” means the amount of regular salary or wages, including overtime payments and commission payments, but does not include discretionary and non-discretionary bonuses or other irregular payments made by a Plan Sponsor to a Participant.

 

(2)       “Service” means that period of continuous uninterrupted employment with the Primary Sponsor or any related entity designated by the Primary Sponsor under the ESPP (a “Related Entity”) from an eligible Participant’s most recent date of hire until his date of termination of employment with the Primary Sponsor and all such Related Entities. However, in the case of a Related Entity which has been acquired by the Primary Sponsor through the acquisition of substantially all of the assets or all of the stock of the Related Entity, Service shall include employment prior to the date of such acquisition only on such terms as the Board of Directors may expressly provide.

 

 

 

3.4        Rollover Contributions . Any Eligible Employee may, with the consent of the Plan Administrator and subject to such rules and conditions as the Plan Administrator may prescribe, transfer a Rollover Amount to the Fund (which may include without limitation prohibitions against transferring certain categories of Rollover Amounts to the Plan); provided, however, that the Plan Administrator shall not administer this provision in a manner which is discriminatory in favor of Highly Compensated Employees.

 

3.5        Forfeitures . Forfeitures contemplated by Section 13.5 or received in a plan-to-plan transfer of funds contemplated by Section 16.5 may be used at the discretion of the Plan Administrator to reduce Plan expenses, to reduce Plan Sponsor contribution obligations or to apply towards the restoration of the forfeited portion of a reemployed Participant’s Account and shall not be used to increase benefits.

 

3.6        Deduction Limit . Contributions may be made only in cash or other property which is acceptable to the Trustee. In no event will the sum of contributions under Sections 3.1, 3.2, 3.3 and Appendix C exceed the deductible limits under Code Section 404.

 

3.7        Contributions Related to Military Service . Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code to the extent required.

 

SECTION 4             

ALLOCATIONS AND INVESTMENT OF TRUST ASSETS

 

 

4.1

Allocation of Contributions .

 

(a)       As soon as reasonably practicable following the date of withholding by the Plan Sponsor, if applicable, and receipt by the Trustee, Plan Sponsor contributions made on behalf of each Participant under Sections 3.1 and 3.2, and Rollover Amounts contributed by the Participant, shall be allocated to the Salary Deferral Contribution Account, Employer Contribution Account and Rollover Account, respectively, of the Participant on behalf of whom the contributions were made.

 

(b)       As soon as reasonably practicable following the date of the payroll deductions described in Section 3.3(c), Plan Sponsor contributions made under Section 3.3 shall be allocated to the Stock Match Account of each eligible Participant.

 

4.2        Allocation of Income or Loss .           As of each Valuation Date, the Trustee shall allocate the net income or net loss of each Individual Fund to each Account in the proportion that the value of the Account as of the Valuation Date bears to the value of all Accounts invested in that Individual Fund as of the Valuation Date.

4.3        Loan Fund . A Loan Fund shall be established by the Trustee on behalf of each Participant for whom a loan is made pursuant to Article 5. The Loan Fund shall be credited with the amount of any loan made by the Plan to the Participant and shall be debited with all principal and interest repayments of any such loans. Under rules established by the Plan Administrator, a Participant’s Account shall be debited by the amount credited to the Participant’s Loan Fund.

 

 

 

All principal and interest repayments debited to the Loan Fund shall be invested as contributions to the Participant’s Account pursuant to this Section 4. Each Loan Fund shall be invested in a note or notes made by the Participant evidencing the promised repayment of monies loaned to the Participant from the Fund.

 

4.4        Participant Direction of Contributions . Subject to a determination by the Plan Administrator that investment options and direction will be given to Participants and Beneficiaries, each Participant and each Beneficiary of a deceased Participant may direct the Plan Administrator to invest contributions to the Participant’s Account in one or more Individual Funds as the Participant shall designate by providing notice to the Plan Administrator according to the procedures and rules established by the Plan Administrator for that purpose.

 

(a)       All investment directions, or changes in investment directions, of contributions shall be made in accordance with the procedures established by the Plan Administrator, subject to administrative practicalities. New investment directions shall be effective as of the date that such directions are processed by the Plan Administrator in accordance with the procedures established for such purpose and subject to administrative practicalities.

 

(b)       An investment direction, once given, shall be deemed to be a continuing direction until changed as otherwise provided herein. If no direction is effective for the date a contribution is to be made, all contributions which are to be made for such date shall be invested in such Individual Fund as the Plan Administrator, the Investment Manager, the Investment Committee, or the Trustee, as applicable, may determine, which may include the “qualified default investment alternative” (as described in Section 4.6). To the extent permissible by law, no Fiduciary shall be liable for any loss, which results from a Participant’s exercise or failure to exercise the Participant’s investment election.

 

4.5        Participant Directions to Transfer Between Individual Funds . A Participant may elect according to the procedures and rules established by the Plan Administrator, to transfer the investment of the Participant’s Account among Individual Funds. An election under this Section shall be effective as of the date that such directions are processed by the Plan Administrator in accordance with the procedures established for such purpose, subject to administrative practicalities.

 

4.6        Qualified Default Investment Alternative . The Plan Administrator may establish a qualified default investment alternative. A “qualified default investment alternative” shall mean a qualified default investment alternative as defined in regulations issued by the Department of Labor pursuant to ERISA Section 404(c)(5), or any successor thereto, that is designated by the Plan Administrator. If all or a portion of the Account of a Participant or Beneficiary who fails to make an affirmative investment election as to such portion of the Participant’s Account is to be invested in the qualified default investment alternative, the Plan Administrator shall provide to such Participant or Beneficiary a notice explaining the Participant’s or Beneficiary’s right to designate how contributions and earnings will be invested and explaining how, in the absence of any investment election, such contributions will be invested and give the Participant or Beneficiary a reasonable period of time after receipt of such

 

 

 

notice to make such designation, all in accordance with regulations issued by the U.S. Department of Labor pursuant to ERISA Section 404(c)(5) and shall provide such other information to the Participant or Beneficiary as may be required by such regulations.

 

SECTION 5             

PLAN LOANS

 

5.1        Eligible Individuals . Subject to the provisions of the Plan and the Trust, each Participant who is an Employee shall have the right, subject to prior approval by the Plan Administrator, to borrow from the Fund. In addition, each “party in interest,” as defined in ERISA Section 3(14), who is (a) a Participant but no longer an Employee, (b) the Beneficiary of a deceased Participant, or (c) an alternate payee of a Participant pursuant to the provisions of a “qualified domestic relations order,” as defined in Code Section 414(p), shall also have the right, subject to prior approval by the Plan Administrator, to borrow from the Fund; provided, however, that loans to such parties in interest may not discriminate in favor of Highly Compensated Employees.

 

5.2        Application . In order to apply for a loan, a borrower must complete and submit to the Plan Administrator documents or information required by the Plan Administrator for this purpose and must pay all application fees and associated loan processing fees, if any.

 

5.3        Equivalent Basis . Loans shall be available to all eligible borrowers on a reasonably equivalent basis which may take into account the borrower’s creditworthiness, ability to repay and ability to provide adequate security. Loans shall not be made available to Highly Compensated Employees, officers or shareholders of a Plan Sponsor in an amount greater than the amount made available to other borrowers. This provision shall be deemed to be satisfied if all borrowers have the right to borrow the same percentage of their interest in their vested Accounts, notwithstanding that the dollar amount of such loans may differ as a result of differing values of Participants’ vested Accounts. The Plan Administrator may limit Participants’ rights to borrow from one or more categories of subaccounts which, taken together, comprise the Accounts of Participants.

 

5.4        Interest Rate . Each loan shall bear a “reasonable rate of interest” and provide that the loan be amortized in substantially level payments, made no less frequently than quarterly, over a specified period of time. A “reasonable rate of interest” shall be that rate that provides the Plan with a return commensurate with the interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances; provided, however, that in setting such interest rate, the Plan Administrator may take into account the provisions of the Servicemembers Civil Relief Act of 2003 which requires that the rate of interest for such a loan subject to the provisions of such Act shall not exceed six percent (6%) per annum.

 

5.5        Security . Each loan shall be adequately secured, with the security for the outstanding balance of all loans to the borrower to consist of one-half (½) of the borrower’s interest in the Participant’s vested Account, or such other security as the Plan Administrator deems acceptable. No portion of the Participant’s Salary Deferral Contribution Account shall be

 

 

 

used as security for any loan hereunder unless and until such time as the loan amount exceeds the value of the borrower’s interest in the Participant’s vested amounts in all other Accounts.

 

5.6        Loan Limit .     Each loan, when added to the outstanding balance of all other loans to the borrower from all retirement plans of the Plan Sponsor and its Affiliates which are qualified under Section 401 of the Code, shall not exceed the lesser of:

 

 

(a)

$50,000, reduced by the excess, if any, of

 

(1)       the highest outstanding balance of loans made to the borrower from all retirement plans qualified under Code Section 401 of the Plan Sponsor and its Affiliates during the one (1) year period immediately preceding the day prior to the date on which such loan was made, over

 

(2)       the outstanding balance of loans made to the borrower from all retirement plans qualified under Code Section 401 of the Plan Sponsor and its Affiliates on the date on which such loan was made, or

 

(b)       one-half (½) of the value of the borrower’s interest in the vested Account attributable to the Participant’s Account.

 

For purposes of this Section, the value of the vested Account attributable to a Participant’s Account shall be established as of the latest preceding Valuation Date, or any later date on which an available valuation was made, and shall be adjusted for any distributions or contributions made through the date of the origination of the loan.

 

5.7        Loan Term . Each loan, by its terms, shall be repaid within five (5) years. The Plan Sponsor may require Employees to repay loans through payroll deductions and prepayments will be allowed to the extent allowed under the note.

 

 

5.8

Loan Minimum . Each loan shall be made in an amount of no less than $1,000.

 

5.9        Maximum Number of Loans . A borrower is permitted to have only two loans existing under this Plan at any one time.

 

5.10      Default . The entire unpaid principal sum and accrued interest shall, at the option of the Plan Administrator, become due and payable if (a) a borrower fails to make any loan payment when due (including the expiration of any applicable grace period), (b) a borrower ceases to be a “party in interest”, as defined in ERISA Section 3(14), (c) the vested Account held as security under the Plan for the borrower will, as a result of an impending distribution or withdrawal, be reduced to an amount less than the amount of all unpaid principal and accrued interest then outstanding under the loan, or (d) a borrower makes any untrue representations or warranties in connection with the obtaining of the loan. In that event, the Plan Administrator may take such steps as it deems necessary to preserve the assets of the Plan, including, but not limited to, the following: (1) direct the Trustee to deduct the unpaid principal sum, accrued interest, and any other applicable charge under the note evidencing the loan from any benefits

 

 

 

that may become payable out of the Plan to the borrower, (2) direct the Plan Sponsor to deduct and transfer to the Trustee the unpaid principal balance, accrued interest, and any other applicable charge under the note evidencing the loan from any amounts owed by the Plan Sponsor to the borrower, or (3) liquidate the security given by the borrower, other than amounts attributable to a Participant’s Salary Deferral Contribution Account, and deduct from the proceeds the unpaid principal balance, accrued interest, and any other applicable charge under the note evidencing the loan. To the extent that such distribution of an offset amount in the case of Subsection (a) would violate the requirements of Section 401(a) or 401(k) (because for example, the deduction would have to be made from the Participant’s Salary Deferral Contribution Account while the Participant is an Employee), the entire outstanding balance of the loan (including accrued interest) shall be a deemed distribution as provided in Treasury Regulations under Code Section 72(p), and thereafter a distribution of an offset amount may be made at the earliest date legally permissible or deferred, at the Plan Administrator’s discretion applied on a basis not discriminatory in favor of Highly Compensated Employees, until the borrower receives another distribution from the Plan. If any part of the indebtedness under the note evidencing the loan is collected by law or through an attorney, the borrower shall be liable for attorneys’ fees in an amount equal to ten percent of the amount then due and all costs of collection. Notwithstanding the foregoing, a loan may be satisfied upon a Participant’s termination of employment by distributing the note evidencing the debt as part of an Eligible Rollover Distribution; provided, however, that the trustee, custodian or administrator for the Eligible Retirement Plan indicates its willingness to accept such property.

 

5.11      Plan Loan Policy and Regulations . Each loan shall be made only in accordance with a separate loan policy which may be established by the Plan Administrator and regulations and rulings of the Internal Revenue Service and the Department of Labor. The Plan Administrator shall be authorized to administer the loan program of this Section and shall act in his sole discretion to ascertain whether the requirements of such regulations and rulings and this Section have been met. Any loan shall be funded from a Participant’s Account pursuant to uniform procedures prescribed by the Plan Administrator.

 

SECTION 6             

IN-SERVICE WITHDRAWALS

 

 

6.1

Hardship Distributions .

 

(a)       The Trustee shall, upon the direction of the Plan Administrator, withdraw all or a portion of a Participant’s Salary Deferral Contribution Account consisting of Deferral Amounts (but not earnings thereon), including Catch-Up Contributions made pursuant to Section 3.1(c), prior to the time such account is otherwise distributable in accordance with the other provisions of the Plan; provided, however, that any such withdrawal shall be made only if the Participant is an Employee and demonstrates that he is suffering from “hardship” as determined herein. For purposes of this Section, a withdrawal will be deemed to be an account of hardship if the withdrawal is on account of:

 

 

 

(1)       expenses for (or necessary to obtain) medical care that would be deductible by the Participant under Code Section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income);

 

(2)       purchase (excluding mortgage payments) of a principal residence for the Participant;

 

(3)       payment of tuition, related educational fees, and room and board expenses, for up to the next 12 months of post-secondary education for the Participant, or for his spouse, children or dependents (as defined in Code Section 152 and, for taxable years beginning or after January 1, 2005, without regard to Code Sections 152(b)(1), (b)(2) and (d)(1)(B));

 

(4)       payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage on the Participant’s principal residence;

 

(5)       payments for burial or funeral expenses for the Participant’s deceased parent, spouse, children or dependents (as defined in Code Section 152 and, for taxable years beginning or after January 1, 2005, without regard to Code Section 152(d)(1)(B));

 

(6)       expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income); or

 

(7)       if permitted by the Plan Administrator, any other contingency determined by the Internal Revenue Service to constitute an “immediate and heavy financial need” within the meaning of Treasury Regulations Section 1.401(k)-l(d).

 

(b)       In addition to the requirements set forth in Subsection 6.1(a) above,any withdrawal pursuant to Section 6.1 shall not be in excess of the amount necessary to satisfy the need determined under Section 6.1and shall also be subject to the requirements of this Subsection (b).

 

(1)       The Participant shall first obtain all withdrawals, other than hardship withdrawals, and all nontaxable loans currently available under all plans maintained by the Plan Sponsor; and

 

(2)       the Plan Sponsor shall not permit Elective Deferrals, including catch-up contributions as described in Code Section 414(v), or after-tax employee contributions to be made to the Plan or any other plan maintained by the Plan Sponsor, for a period of six (6) months after the Participant receives the withdrawal pursuant to this Section.

 

 

 

 

Any determination of the existence of hardship and the amount to be withdrawn on account thereof shall be made by the Plan Administrator (or such other person as may be required to make such decisions) in accordance with the foregoing rules as applied in a uniform and nondiscriminatory manner; provided that, unless the Participant requests otherwise, any such withdrawal shall include the amount necessary to pay any federal, state and local income taxes and penalties reasonably anticipated to result from the withdrawal.

 

(c)       Effective J


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