<PAGE>
As filed with the Securities and Exchange Commission on September 15, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SUNSOURCE INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-2874736
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3000 One Logan Square
Philadelphia, Pennsylvania 19103
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(Address of Principal Executive Offices) (Zip Code)
SunSource Inc. Deferred Compensation Plan for Key Employees
-----------------------------------------------------------
(Full title of the plan)
Joseph M. Corvino
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
SunSource Inc.
3000 One Logan Square
Philadelphia, Pennsylvania 19103
---------------------------------------
(Name and address of agent for service)
(215) 282-1290
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copies to:
Donald A. Scott, Esquire
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103-6993
(215) 963-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities to be price per offering registration
to be registered registered share price(2) fee
- -------------------- ---------- --------- ---------- -------------
<S> <C> <C> <C> <C>
Deferred Compensation $18,000,000 100% $18,000,000 $5,310
Obligations (1)
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Deferred Compensation Obligations are unsecured obligations of
SunSource Inc. to pay deferred compensation in the future in accordance
with the terms of the SunSource Inc. Deferred Compensation Plan for Key
Employees.
(2) Estimated solely for the purpose of determining the registration fee.
<PAGE>
PART II
-------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by SunSource Inc. (the "Registrant" or
the "Company") with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 are incorporated in this registration
statement by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997.
2. The Registrant's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1998 and June 30, 1998.
All documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this registration
statement and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except
as so modified or superseded.
Item 4. Description of Securities.
-------------------------
Under the SunSource Inc. Deferred Compensation Plan for Key
Employees (the "Plan"), the Company will provide eligible employees the
opportunity to enter into agreements for the deferral of all or a portion of
their future base salary and all or a portion of their future bonus payments.
In addition, pursuant to the terms of the Plan, the Company will provide
supplemental benefits under the Plan to make up for any loss of benefits by a
participating employee under the tax-qualified retirement plans of the Company
and its affiliates as a result such participant's deferral of compensation
under the Plan. The obligations of the Company under the Plan (the
"Obligations") will be unsecured general obligations of the Company to pay
deferred compensation in the future in accordance with the terms of the Plan,
and will rank pari passu with other unsecured and unsubordinated indebtedness
of the Company from time to time outstanding. The Company has established an
irrevocable grantor trust, commonly referred to as a "rabbi trust," for
purposes of funding the Obligations. The trust assets are treated as assets of
the Company for tax purposes and are subject to the claims of the Company's
creditors in the event of insolvency.
<PAGE>
The amount of compensation to be deferred by each participating
employee will be determined in accordance with the Plan based on elections by
the employee. Each Obligation will be payable during employment or upon or
following termination of employment or retirement in accordance with the terms
of the Plan. The Obligations will be indexed to one or more options
individually chosen by each employee participant from the list of investments
available from time to time (the "Earnings Crediting Options"). Each employee
participant's Obligation will be adjusted to reflect the investment experience
of the selected Earnings Crediting Options, including any appreciation or
depreciation. The Obligations will be denominated and payable in United States
dollars.
An employee participant's right or the right of any other person to
the Obligations cannot be assigned, alienated, sold, garnished, transferred,
pledged, or encumbered except by a written designation of a beneficiary under
the Plan, by the terms of the Plan in the event there is no designated
beneficiary or by court order in the case of marital dispute.
The Obligations are not subject to redemption, in whole or in part,
at the option of the Company prior to termination of employment, retirement or
the individual payment dates specified by the participating employees. Each
employee participant may elect to receive a distribution under the Plan in
such manner as is acceptable to the committee appointed by the Board of
Directors of the Company to administer the Plan (the "Committee"). In
addition, the Committee may, in its discretion, direct that a participant be
paid an amount (not to exceed his Obligation) sufficient to meet a financial
hardship as defined in the Plan. The Company reserves the right to amend or
terminate the Plan at any time, except that no such amendment or termination
shall reduce the amount of previous deferrals.
The Obligations are not convertible into another security of the
Company. The obligations will not have the benefit of a negative pledge or any
other affirmative or negative covenant on the part of the Company. No trustee
has been appointed having the authority to take action with respect to the
Obligations and each employee participant will be responsible for acting
independently with respect to, among other things, the giving of notices,
responding to any requests for consents, waivers or amendments pertaining to
the Obligations, enforcing covenants and taking action upon a default.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Donald A. Scott, a partner in Morgan, Lewis & Bockius LLP which is
passing upon the validity of the Deferred Compensation Obligations, is a
director of the Registrant and beneficially owns 2,462 Common Shares.
<PAGE>
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The Company's By-laws contain provisions permitted by the Delaware
General Corporation Law (under which the Company is organized) that provide
that directors and officers will be indemnified by the Company to the fullest
extent permitted by law for all losses that may be incurred by them in
connection with any action, suit or proceeding in which they may become
involved by reason of their service as a director or officer of the Company.
In addition, the Company's Certificate of Incorporation contains provisions
permitted by the Delaware General Corporation Law that limit the monetary
liability of directors of the Company for certain breaches of their fiduciary
duty, and its By-laws provide for the advancement by the Company to directors
and officers of expenses incurred by them in connection with a proceeding of a
type to which the duty of indemnification applies. The Company maintains
directors' and officers' liability insurance to insure its directors and
officers against certain liabilities incurred in their capacity as such,
including claims based on breaches of duty, negligence, error and other
wrongful acts. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers,
or persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in that
Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The following Exhibits are filed as part of this Registration
Statement:
4 SunSource Inc. Deferred Compensation Plan for Key Employees
5 Opinion of Morgan, Lewis & Bockius LLP.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5).
24 Power of Attorney (contained on signature page of this
Registration Statement).
Item 9. Undertakings.
------------
(a) The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
<PAGE>
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(l)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Philadelphia, Pennsylvania on September 15,
1998.
SUNSOURCE INC.
By: /s/ Joseph M. Corvino
-------------------------------
Joseph M. Corvino
Vice President - Finance
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph M. Corvino and John J.
Dabrowski, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Donald T. Marshall Chairman and Chief Executive Officer September 15, 1998
- ------------------------------------ (Principal Executive Officer) and
Donald T. Marshall Director
/s/ Joseph M. Corvino Vice President-Finance, Chief Financial September 15, 1998
- ------------------------------------ Officer, Treasurer and Secretary
Joseph M. Corvino (Principal Financial Officer)
/s/ John J. Dabrowski Controller (Principal Accounting Officer) September 15, 1998
- ------------------------------------
John J. Dabrowski
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ O. Gordon Brewer, Jr. Director September 15, 1998
- ------------------------------------
O. Gordon Brewer, Jr.
/s/ Norman V. Edmonson Director September 15, 1998
- ------------------------------------
Norman V. Edmonson
/s/ Arnold S. Hoffman Director September 15, 1998
- ------------------------------------
Arnold S. Hoffman
/s/ Robert E. Keith, Jr. Director September 15, 1998
- ------------------------------------
Robert E. Keith, Jr.
/s/ John P. McDonnell Director September 15, 1998
- ------------------------------------
John P. McDonnell
/s/ Donald A. Scott Director September 15, 1998
- ------------------------------------
Donald A. Scott
/s/ Geoffrey C. Shepard Director September 15, 1998
- ------------------------------------
Geoffrey C. Shepard
/s/ Francis G. Ziegler Director September 15, 1998
- ------------------------------------
Francis G. Ziegler
</TABLE>
<PAGE>
SUNSOURCE INC.
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT INDEX
-------------
Exhibit No.
- -----------
4 SunSource Inc. Deferred Compensation Plan for Key Employees
5 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5)
24 Power of Attorney (contained on signature page of this Registration
Statement)
<PAGE>
Exhibit 4
SUNSOURCE INC.
DEFERRED COMPENSATION PLAN
FOR KEY EMPLOYEES
(As Amended and Restated
Effective as of October 1, 1998)
<PAGE>
SUNSOURCE INC.
DEFERRED COMPENSATION PLAN
FOR KEY EMPLOYEES
-----------------
PURPOSE
SunSource Inc. (the "Company") sponsors the SunSource Inc. Deferred
Compensation Plan for Key Employees (the "Plan") which provides its eligible
employees and the eligible employees of its affiliates with the opportunity to
defer all or a portion of their future compensation as permitted herein to
enhance their retirement benefits on a tax-favored basis.
The Plan initially provided the means for senior executives of SDI
Operating Partners, L.P. to defer payment of benefits under certain incentive
and supplemental compensation programs and was named the "Deferred
Compensation Plan for Key Employees of SDI Operating Partners, L.P." Effective
as of October 1, 1998, the Plan was amended and restated to provide eligible
employees of SunSource and its affiliates the opportunity to defer receipt of
all or a portion of their salary and bonuses. The Plan, as amended and
restated, has been renamed the "SunSource Inc. Deferred Compensation Plan for
Key Employees."
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 - DEFINITIONS AND CONSTRUCTION....................................1
ARTICLE 2 - BENEFITS........................................................4
ARTICLE 3 - DISTRIBUTIONS TO PARTICIPANTS...................................7
ARTICLE 4 - EMERGENCY BENEFITS..............................................9
ARTICLE 5 - ACCELERATED DISTRIBUTION.......................................10
ARTICLE 6 - VESTING........................................................11
ARTICLE 7 - FUNDING........................................................11
ARTICLE 8 - ADMINISTRATION.................................................11
ARTICLE 9 - AMENDMENT AND TERMINATION......................................13
ARTICLE 10 - MISCELLANEOUS..................................................13
<PAGE>
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
Sec. 1.01 Definitions. Whenever used in this Plan:
"Account" means a Participant's In-Service Distribution
Account or a Retirement Distribution Account, whichever is applicable.
"Accounts" refers collectively to a Participant's In-Service Distribution
Account(s) and Retirement Distribution Account.
"Affiliate" means any firm, partnership, or corporation that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the Company; provided that an
"Affiliate" shall only be considered as such for the period that such
relationship with the Company shall exist. "Affiliate" also includes any other
organization similarly related to the Company that is designated as such by
the Board.
"Board" means the Board of Directors of the Company.
"Change of Control" shall be deemed to have occurred if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) other than Lehman Brothers Holdings Inc. or the
management group of Norman V. Edmonson, Donald T. Marshall, John P. McDonnell,
Harold J. Cornelius, Max W. Hillman and Joseph M. Corvino, becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of the
voting power of the then outstanding securities of the Company;
(b) The Company ceases to own, directly or indirectly, all of the
general and limited partnership interests in SDI and SDI Partners I, L.P.;
(c) The shareholders of the Company, SunSub A Inc. or SunSub B Inc.
approve (or, if shareholder approval is not required, the respective board of
directors approves) an agreement providing for (i) the merger or consolidation
of the Company, SunSub A Inc. or SunSub B Inc. with another corporation where
the shareholders of the Company, SunSub A Inc. or SunSub B Inc., immediately
prior to the merger or consolidation, shall not beneficially own, immediately
after the merger or consolidation, shares entitling such shareholders to 75%
or more of all votes to which all shareholders of the surviving corporation
would be entitled in the election of directors (without consideration of the
rights of any class of stock to elect directors by a separate class vote), or
where the members of the respective board of directors, immediately prior to
the merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the
surviving corporation, (ii) the sale or other disposition of all or
substantially all of the assets of the Company, SunSub A Inc. or SunSub B Inc.
or (iii) a liquidation or dissolution of the Company, SunSub A Inc. or SunSub
B Inc.;
<PAGE>
(d) The partners of SDI or SDI Partners I, L.P. approve an agreement
providing for (i) the merger or consolidation of the SDI or SDI Partners I,
L.P. with another entity where the partners of SDI or SDI Partners I, L.P.,
immediately prior to the merger or consolidation, shall not beneficially own,
immediately after the merger or consolidation, 75% or more of the capital,
voting and profits interests of the surviving entity, (ii) the sale or other
disposition in a single or related series of transactions, of more than 75% of
the assets of SDI or SDI Partners I, L.P., or (iii) a liquidation or
dissolution of the SDI or SDI Partners I, L.P.;
(e) Any person has commenced a tender offer or exchange offer for 20%
or more of the voting power of the then outstanding shares of the Company; or
(f) A majority of the Board shall cease for any reason to consist of
(1) individuals who on the Restatement Effective Date are serving as directors
of the Company, except for Henri I. Talerman and Eliot M. Fried, or (2)
individuals who subsequently become members of the Board and whose nomination
for election or election to the Board is recommended or approved by a majority
of the Board.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means the persons appointed by the Board to
administer the Plan pursuant to Article 8.
"Company" means SunSource Inc.
"Compensation" means, for any Plan Year, the total amount of
cash remuneration paid by the Company or an Affiliate to an Eligible Employee
as base salary and commissions and the total amount of cash remuneration
earned by an Eligible Employee as bonus (including amounts payable in the
following Plan Year), including any Compensation Deferrals under this Plan or
any 401(k) plan or section 125 plan maintained by the Company or an Affiliate.
"Compensation Deferral" means the amount or amounts of a
Participant's Compensation deferred under the provisions of Article 2.
"Distribution Option Period" means a period of five
consecutive Plan Years for which an Eligible Employee elects, on an Enrollment
Agreement, the time and manner of payment of his In-Service Distribution
Account for such Plan Years.
"Earnings Crediting Options" means the options selected by
the Participant from time to time pursuant to which earnings or losses are
credited to the Participant's Accounts.
"Effective Date" means December 1, 1996. "Restatement
Effective Date" means October 1, 1998, the effective date of this amended and
restated Plan.
"Eligible Employee" means an Employee who is eligible to
participate in the Plan for a particular Plan Year as designated by the
Company in its sole discretion; provided, however, that to qualify as an
"Eligible Employee" for purposes of the Plan, the individual must be a member
of a "select group of management or highly compensated employees" within the
meaning of Sections 201, 301 and 401 of ERISA, as determined by the Committee.
<PAGE>
"Employee" means any individual employed by the Company or
an Affiliate on a regular, full-time basis (determined in accordance with the
personnel policies and practices of the Company).
"Enrollment Agreement" means the authorization form
prescribed by the Committee which an Eligible Employee files with the Company
to participate in the Plan.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means Securities Exchange Act of 1934, as
amended.
"In-Service Distribution Account" means the Account
maintained for a Participant for each Distribution Option Period to which
Compensation Deferrals are credited pursuant to the in-service distribution
option described in Section 7.3, adjusted by earnings or losses attributable
to the Earnings Crediting Options selected by the Participant for such Account
from time to time, and distributions and withdrawals from such Account.
"Participant" means (a) any Eligible Employee who makes a
Compensation Deferral pursuant to Section 2.01, or (b) any other current or
former Eligible Employee who has a balance in an Account greater than zero.
"Plan" means the SunSource Inc. Deferred Compensation Plan
for Key Employees, as set forth herein and as the same may be amended from
time to time.
"Plan Year" means the calendar year.
"Retirement" means the termination of the Participant's
Service with the Company and the Affiliates (for reasons other than death or
cause) at or after age 55. For purposes hereof, the term "cause" shall mean
termination by the Company or an Affiliate for failure of the Participant to
perform his duties (other than by reason of illness, injury or incapacity),
dishonesty, willful misconduct or conviction of a crime involving moral
turpitude, as determined by the Company or the applicable Affiliate.
"Retirement Distribution Account" means the Account
maintained for a Participant to which Compensation Deferrals are credited
pursuant to the retirement distribution option described in Section 7.2,
adjusted by deemed earnings or losses attributable to the Earnings Crediting
Options selected by the Participant for such Account from time to time, and
distributions and withdrawals from such Account.
"SDI" means SDI Operating Partners, L.P.
<PAGE>
"Service" means service as an employee of the Company or an
Affiliate.
"Social Security Wage Base" means the applicable
contribution base for Old Age, Survivors and Disability Insurance (OASDI) as
determined under section 3121(x) of the Code.
"Termination Date" means the date of termination of a
Participant's Service with the Company and the Affiliates. Notwithstanding the
foregoing, a Participant's Service shall not be considered terminated as long
as he is receiving benefits under the terms of any long-term disability plan
maintained by the Company or an Affiliate.
"Valuation Date" means the last day of each calendar quarter
and such other time or times as the Committee shall determine.
Sec. 1.02 Gender and Number. The masculine pronoun shall
include the feminine, the singular shall include the plural, and vice versa.
ARTICLE 2
BENEFITS
--------
Sec. 2.01 Participant Compensation Deferral Amounts.
(a) For such Plan Years as the Company shall determine, each
Eligible Employee may irrevocably elect in writing to defer all or a portion
of his Compensation for the Plan Year, subject to such rules and procedures as
the Committee deems appropriate. In all events, each such election shall be
made prior to the last day of the Plan Year preceding the Plan Year in which
such Compensation is earned. Notwithstanding the foregoing, with respect to
the Plan Year during which the Company first permits Eligible Employees to
make elections hereunder or during which an individual first becomes an
Eligible Employee, the affected Eligible Employee may make an irrevocable
written election within thirty (30) days of the date as of which such
elections may first be made or within thirty (30) days of becoming an Eligible
Employee, as the case may be, to defer all or a portion of his Compensation
for the remainder of such Plan Year (including any bonus thereafter payable
with respect to such Plan Year); provided, in the latter case, the Company has
determined to permit Compensation Deferrals for such Plan Year.
(b) An Eligible Employee shall enroll in the Plan effective
as of the first day of a Plan Year by filing a completed and fully executed
Enrollment Agreement with the Committee by a date set by the Committee.
Pursuant to such Enrollment Agreement and such procedures as the Committee
shall establish, the Eligible Employee shall irrevocably elect an amount of
his Compensation to be deferred through payroll deductions, which deductions
shall be made after any required payroll tax deductions, and (b) the Accounts
to which such Compensation Deferrals shall be credited. An Eligible Employee
shall provide such other information as the Committee shall require.
(c) The Enrollment Agreement filed by an Eligible Employee
for any Distribution Option Period must also set forth the Participant's
election as to the time and manner of distribution of amounts attributable to
such Distribution Option Period that are credited to the Participant's
In-Service Distribution Account.
<PAGE>
(d) Coincident with the Effective Date, certain current and
former Eligible Employees irrevocably elected to defer under this Plan amounts
previously deferred or credited to an account on the books of SDI on behalf of
such Eligible Employees which otherwise may become due and payable to such
Eligible Employees on or after January 1, 1997 under certain incentive
compensation or deferred compensation plan maintained by the Company or a
predecessor in interest thereto. Any such amounts remaining as of the
Restatement Effective Date shall continue to be deferred after the Restatement
Effective Date and shall be distributed in accordance with the elections of
the applicable Eligible Employees subject to such rules and procedures as the
Committee shall prescribe regarding the coordination of such prior elections
with any elections hereunder.
(e) A Participant's Compensation Deferral amount to be
deferred and credited to the Participant's Account under the Plan, for a Plan
Year, shall not exceed such percentage or amount of the Participant's base
salary, commissions or bonus components of his Compensation for such Plan Year
as the Committee shall determine.
Sec. 2.02 Investment of Accounts. Each Account shall be
credited quarterly with earnings or losses attributable to the Earnings
Crediting Options offered by the Committee and selected by the Participant in
the following manner:
(a) A Participant's Account shall be credited with earnings
in accordance with the Earnings Crediting Option selected by the Participant
from time to time. Participants may allocate their Accounts among the Earnings
Crediting Options available under the Plan in accordance with such rules and
procedures as the Committee shall prescribe. The rate of return, positive or
negative, credited under each Earnings Crediting Option is based upon the
actual investment performance of such investment fund as the Committee may
designate from time to time as specified in Exhibit A, and shall equal the
total return of such investment fund net of asset based charges, including,
without limitation, money management fees, fund expenses and mortality and
expense risk insurance contract charges as determined by the Committee. The
Committee reserves the right, on a prospective basis, to add or delete
Earnings Crediting Options, provided, however, that any such change in the
Earnings Crediting Options available under the Plan shall only affect the rate
at which earnings shall be credited to Participants' Accounts on a prospective
basis, and shall not affect the value of Participants' existing Accounts,
including any earnings credited under the Plan up to the date of such change.
(b) A Participant may change the Earnings Crediting Options
among which his Accounts are allocated at any time during the Plan Year,
subject to such rules and procedures the Committee deems appropriate. Each
such change may include (i) reallocation of the Participant's existing
Account, and/or (ii) changes in investment allocation of amounts to be
credited to the Participant's Account in the future, as the Participant may
elect. In the event the Committee deletes an Earnings Crediting Option, a
Participant whose Account is allocated to such Earnings Crediting Option, in
whole or in part, shall be entitled to reallocate such Account and/or any
amounts to be credited in the future to such Account among the remaining
Earnings Crediting Options.
<PAGE>
(c) Notwithstanding that the rates of return credited to
Participants' Accounts under the Earnings Crediting Options are based upon the
actual performance of the investment funds selected by the Participant from
among the options designated by the Committee and specified in Exhibit A, the
Company shall not be obligated to invest any amounts deferred by a Participant
under this Plan, or any other amounts, in such portfolios or in any other
investment funds and no Participant shall have any right, title or interest in
any such investment fund or other specific asset of the Company.
(d) The Committee or its delegate shall provide to each
Participant, not less frequently than quarterly, a statement in such form as
the Committee deems desirable setting forth the balance standing to the credit
of such Participant in each of his Accounts.
(e) Except as otherwise determined by the Committee, any
distribution made to or on behalf of a Participant from an Account in an
amount which is less than the entire balance of such Account shall be made pro
rata from each of the Earnings Crediting Options to which such Account is then
allocated.
Sec. 2.03. Accounting and Valuation of Account.
(a) The Company shall establish a bookkeeping account for
each Participant who allocates Compensation Deferrals to a Retirement
Distribution Account, to which shall be credited an amount equal to the
Compensation Deferrals elected by the Participant to be allocated to such an
Account for any Plan Year. The Company shall establish a separate bookkeeping
account for each Participant who allocates Compensation Deferrals to an
In-Service Distribution Account, to which shall be credited an amount equal to
the Compensation Deferrals elected by the Participant to be credited to such
an Account for the applicable Distribution Option Period. In the event a
Participant who elected to defer an amount described in Section 2.01(d)
elected to receive such amount at (i) his Retirement or Termination Date or
(ii) the later of his Retirement or Termination Date or age 65, the Company
shall credit such amount to the Participant's Retirement Distribution Account.
In the event a Participant who elected to defer an amount described in Section
2.01(d) elected to receive such amount on a specified date, the Company shall
credit such amount to a separate In-Service Distribution Account.
(b) Compensation Deferral amounts shall be credited to an
Account on the first business day following the date such amounts otherwise
would have been payable to the Participant. An Account shall be reduced to
reflect any distributions or withdrawals from such Account. Such reductions
shall be allocated to the Account as of the date such distributions or
withdrawals are made. The funds applicable to the Accounts shall be subject to
claims by the Company's general creditors in the event of the Company's
insolvency.
(c) As of each Valuation Date, income, gain and loss
equivalents (determined as if the Account is invested in the manner set forth
under Section 2.02 hereof) attributable to the period following the next
preceding Valuation Date shall be credited to and/or deducted from the
Participant's Account, as applicable.
<PAGE>
(d) Anything contained herein to the contrary
notwithstanding, amounts credited to a Participant's Account shall commence to
be credited with interest or earnings under Section 2.02 within thirty (30)
days of the date such amounts are credited to the Participant's Account, as
determined by the Committee.
Sec 2.04 Additional Credits. A Participant's Accounts shall
be credited with an amount, determined in the Committee's sole discretion,
that is designed to make such Participant whole for losses or reductions in
contributions or benefits suffered by the Participant under the tax-qualified
retirement plans maintained by the Company or the Affiliates as a result of
the Participant's Compensation Deferrals. Any amount credited with respect to
a defined contribution plan shall be made without regard to any lost earnings
or to a delay in timing of contributions under such plan and shall be credited
at the end of the Plan Year in which the loss or reduction occurs. Any amount
credited with respect to a defined benefit plan shall be based on the
actuarial assumptions and methodologies determined in the discretion of the
Committee, with the assistance of the Company's actuaries, and shall be
credited at the time the Participant receives a distribution of his benefit
from such plan.
ARTICLE 3
DISTRIBUTIONS TO PARTICIPANTS
-----------------------------
Sec. 3.01 Election of Distribution Option. On a completed
and fully executed Enrollment Agreement filed with the Committee, an Eligible
Employee shall elect the time and manner of payment pursuant to which his
Accounts shall be distributed. With respect to any Participant who has elected
more than one distribution option pursuant to this Section 3.01, all
references to the Participant's Account in this Article 3 (and other
references in the Plan to the Participant's Account pertaining to
distributions) shall refer to the portion of such Participant's Account with
respect to which the distribution option has been elected.
Sec. 3.02 Retirement Distribution Account. Subject to the
provisions of this Article 3, distribution of the Participant's Retirement
Distribution Account shall commence, as elected by the Participant in
accordance with Section 3.01, upon (a) the Participant's Retirement or his
attainment of age 65, if later, or (b) the Participant's Termination Date or
his attainment of age 65, if later.
Sec. 3.03 In-Service Distribution Account. Unless otherwise
permitted by the Committee, an election to allocate Compensation Deferrals to
an In-Service Distribution Account and to receive distributions from such
Account (a) shall be effective for all Compensation Deferrals made for the
five year period subsequent to such election and thereafter unless changed by
the Participant, (b) may be changed only once every five years, and (c) any
change shall be prospective only and shall apply to all Compensation Deferrals
made during the following five year period. Distribution of the Participant's
In-Service Distribution Account shall commence, as elected by the Participant
in accordance with Section 3.01 on the specified date which shall not be less
than two (2) years from the last day of the last Plan Year in the Distribution
Option Period in which a Compensation Deferral was made to such Account.
Sec. 3.04 Benefits Upon Retirement. In the case of a
Participant whose Service terminates on account of his Retirement, the
Participant's Retirement Distribution Account shall be distributed in one of
the following methods, as elected by the Participant in accordance with
Section 3.01: (i) in a lump sum; (ii) in five (5), ten (10), fifteen (15) or
twenty (20) annual installments, or (iii) by any other formula that is
mathematically derived, as long as it does not exceed the Participant's
projected mortality. Any lump-sum benefit payable in accordance with this
Section shall be paid between January 1 and February 28 of the Plan Year
following the Plan Year in which occurs the Participant's Retirement or, his
attainment of age 65, if later and elected as the distribution date by the
Participant in accordance with Section 3.01, in an amount equal to the value
<PAGE>
of such Account as of the last business day of the month preceding the date of
payment. Annual installment payments, if any, shall commence between January 1
and February 28 of the Plan Year following the Plan Year in which occurs the
Participant's Retirement, or his attainment of age 65, if later and elected as
the distribution date by the Participant in accordance with Section 3.01, in
an amount equal to (i) the value of such Account as of the last business day
of the month preceding the date of payment, divided by (ii) the number of
annual installment payments elected by the Participant in accordance with
Section 3.01. The remaining annual installments shall be paid not later than
February 28 of each succeeding year in an amount equal to (i) the value of
such Account as of the last business day of the month preceding the date of
payment of the installment, divided by (ii) the number of installments
remaining. A Participant may change his election regarding the manner of
payment as described in this Section 3.01 of his Account at any time prior to
the beginning of the Plan Year in which occurs the Participant's Retirement or
his attainment of age 65, if later and elected as the distribution date by the
Participant in accordance with Section 3.01.
Sec. 3.05 Benefits Upon a Specified Distribution Date. The
value of a Participant's In-Service Distribution Account for which the
Participant has elected a specified distribution date under Section 3.03 shall
be distributed, as elected by the Participant in accordance with Section 3.01:
(i) in a lump sum; or (ii) in two (2), three (3), four (4) or five (5) annual
installments. Any lump-sum benefit payable in accordance with this Section
shall be paid as soon as practicable following the specified distribution date
elected by the Participant in an amount equal to the value of such Account as
of the last business day of the month preceding the date of payment. Annual
installment payments, if any, shall commence as soon as practicable following
the specified distribution date elected by the Participant, in an amount equal
to (i) the value of such Account as of the last business day of the month
preceding the date of payment, divided by (ii) the number of annual
installment payments elected by the Participant in accordance with Section
3.01. The remaining annual installments shall be paid not later than February
28 of each succeeding year in an amount equal to (i) the value of such Account
as of the last business day of the month preceding the date of payment of the
installment, divided by (ii) the number of installments remaining.
Sec. 3.06 Benefits Upon Termination of Employment. In the
case of a Participant whose Service terminates, other than on account of his
death, prior to the earliest date on which he is eligible for Retirement or
the specified distribution date, the value of the Participant's Accounts as of
the last business day of the month preceding the date of payment shall be
distributed as elected by the Participant (i) in a lump sum as soon as
practicable following the Participant's Termination Date, or (ii) following
the Participant's attainment of age 65 or the specified distribution date,
whichever is applicable, if later and as elected by the Participant in
accordance with Section 3.01. Anything contained in this Plan and any election
by any Participant to the contrary notwithstanding, the Company reserves the
right in its sole discretion, to cause one or more of a Participant's Accounts
to be distributed in a lump sum as soon as practicable following such
Participant's Termination Date.
Sec. 3.07 Benefits Upon Death. In the event of a
Participant's death prior to the complete distribution of his Accounts
pursuant to Article 3, the value of the Participant's remaining Accounts as of
the last business day of the month preceding the date of payment under the
Plan shall be paid to the Participant's designated beneficiary or, if none, to
the Participant's surviving spouse or, if none, to the Participant's estate in
cash in a single sum as soon as administratively practicable following the
completion of the first valuation of the Participant's Accounts which
coincides with or next follows the Participant's death.
<PAGE>
Each Participant may designate a beneficiary or
beneficiaries (which beneficiary may be an entity other than a natural person)
to receive any payments which may be made following the Participant's death.
Such designation may be changed or canceled at any time without the consent of
any such beneficiary. Any such designation, change or cancellation must be
made in a form approved by the Committee and shall not be effective until
received by the Committee or its designee. If a Participant designates more
than one beneficiary, the interests of such beneficiaries shall be paid in
equal shares, unless the Participant has specifically designated otherwise.
Sec. 3.08 Benefits Upon a Change of Control. In the event of
a Change of Control, the value of a Participant's vested Accounts shall be
paid to the Participant in a lump sum within sixty (60) days of the Change of
Control.
ARTICLE 4
EMERGENCY BENEFITS
------------------
Sec. 4.01 Emergency Benefit. In the event that the
Committee, upon written request of a Participant, determines, in its sole
discretion, that the Participant has suffered an unforeseeable financial
emergency, the Company shall pay to the Participant from his Account, as soon
as practicable following such determination, an amount necessary to meet the
emergency, after deduction of any and all taxes as may be required pursuant to
Section 10.10. For purposes of this Plan, an unforeseeable financial emergency
is an unexpected need for cash arising from an illness, casualty loss, sudden
financial reversal, or other such unforeseeable occurrence. Cash needs arising
from foreseeable events such as the purchase of a house or education expenses
for children shall not be considered to be the result of an unforeseeable
financial emergency. With respect to that portion of an Account which is
distributed to a Participant as an emergency benefit, in accordance with this
Section 4.01, no further benefit shall be payable to the Participant under
this Plan. Notwithstanding anything in this Plan to the contrary, a
Participant who receives an emergency benefit in any Plan Year shall have his
then current elections with respect to Compensation Deferrals automatically
revoked for the remainder of such Plan Year. It is intended that the
Committee's determination as to whether a Participant has suffered an
"unforeseeable financial emergency" shall be made consistent with the
requirements under section 457 (d) of the Code.
ARTICLE 5
ACCELERATED DISTRIBUTION
------------------------
Sec. 5.01 Availability of Withdrawal Prior to Retirement.
Upon his written election, a Participant may elect to withdraw all or a
portion of an Account at any time prior to the time such Account otherwise
becomes payable under the Plan, provided the conditions specified in Section
5.03, Section 5.04 and Section 5.05 are satisfied.
<PAGE>
Sec. 5.02 Acceleration of Periodic Distributions. Upon his
written election, a Participant or Participant's beneficiary who is receiving
installment payments under the Plan may elect to have the remaining
installments distributed in the form of an immediately payable lump sum,
provided the condition specified in Section 5.03 is satisfied.
Sec. 5.03 Forfeiture Penalty. In the event of a withdrawal
pursuant to Section 5.01, or an accelerated distribution pursuant to Section
5.02, the Participant or beneficiary shall forfeit from the Account from which
the withdrawal is made an amount equal to 10% of the amount of the withdrawal
or accelerated distribution, as the case may be. The forfeited amount shall be
deducted from the applicable Account prior to giving effect to the requested
withdrawal or acceleration. The Participant and his beneficiary shall not have
any right or claim to the forfeited amount, and the Company shall have no
obligation whatsoever to the Participant, his beneficiary or any other person
with regard to the forfeited amount.
Sec. 5.04 Minimum Withdrawal. In no event shall the amount
withdrawn in accordance with Section 5.01, be less than 25% of the amount
credited to the Participant's Account immediately prior to the withdrawal.
Sec. 5.05 Suspension from Deferrals. In the event of a
withdrawal pursuant to Section 5.01, a Participant who is otherwise eligible
to make Compensation Deferrals under Article 2 shall be prohibited from making
Compensation Deferrals with respect to the Plan Year immediately following the
Plan Year during which the withdrawal is made, and any election previously
made by the Participant with respect to Compensation Deferrals during the Plan
Year in which the withdrawal is made shall be void and of no effect.
Sec. 5.06 Acceleration by Committee. The Committee, in its
sole discretion, may accelerate the distribution of one or more of a
Participant's Accounts if it determines that such acceleration is in the best
interests of the Company.
ARTICLE 6
VESTING
-------
Sec. 6.01 Vesting of Account. Except as provided in Section
6.02, a Participant shall be fully vested in his Account at all times.
Sec. 6.02 Deferrals From Other Incentive Plans. Any
Participant who made a Compensation Deferral election in accordance with
Section 2.01(d) with respect to amounts previously deferred or otherwise
credited to the account of the Participant on the books of the Company under
other incentive compensation or deferred compensation plans of the Company or
any predecessor in interest thereto shall vest in the amounts attributable to
such Compensation Deferral election in accordance with the terms and
conditions pertaining to such amounts under such other plans. Anything
contained herein to the contrary notwithstanding, no Participant shall be
entitled to a distribution hereunder of any amounts that had not become vested
under such other plans.
<PAGE>
ARTICLE 7
FUNDING
-------
The Plan is intended to constitute an "unfunded" plan of
deferred compensation for Participants. Benefits payable hereunder shall be
payable out of the general assets of the Company and no segregation of any
assets whatsoever for such benefits shall be made. The obligation of the
Company hereunder shall constitute a general, unsecured obligation, payable
solely out of general assets, and no Participant or beneficiary shall have any
right to any specific assets of the Company. Notwithstanding the foregoing,
the Company shall establish a "rabbi trust" to serve as a funding vehicle for
the benefits described in the Plan.
ARTICLE 8
ADMINISTRATION
--------------
Sec. 8.01 Committee. The Plan shall be administered by a
committee consisting of two or more senior officers of the Company appointed
by the Board. For purposes of this Plan, references to the Committee shall be
deemed to be references to the Board to the extent that the Board has not
delegated its authority to administer the Plan to the Committee.
Sec. 8.02 Committee Authority. The Committee shall have full
power and authority to construe, interpret and administer the Plan, and may,
to the extent permitted by law, make factual determinations, correct defects,
supply omissions and reconcile inconsistencies to the extent necessary,
prescribe, amend and rescind any rules, forms and procedures as it deems
necessary or appropriate for the proper administration of the Plan and make
any other determinations and take any other such actions as it deems necessary
or advisable in carrying out its duties under the Plan. All action taken by
the Committee arising out of, or in connection with, the administration of the
Plan or any rules adopted thereunder, shall, in each case, lie within its sole
discretion, and shall be final, conclusive and binding upon the Board, the
Company, the Affiliates, the Employees, the beneficiaries and all other
persons and entities having an interest therein. The Committee may employ and
rely on such legal counsel, such actuaries, such accountants and such agents
as it may deem advisable to assist in the administration of the Plan.
Sec. 8.03 Compensation. Members of the Committee shall serve
without compensation for their services unless otherwise determined by the
Board. Unless otherwise determined by the Committee, all expenses of
administering the Plan shall be paid by the Company.
Sec. 8.04 Indemnification. The Company shall indemnify and
hold harmless each member of the Committee from any and all claims, losses,
damages, expenses (including counsel fees) and liability (including any
amounts paid in settlement of any claim or any other matter with the consent
of the Board) arising from any act or omission of such member, except when the
same is due to gross negligence or willful misconduct.
Sec. 8.05 Committee Determinations. Any decisions, actions
or interpretations to be made under the Plan by the Company, the Board or the
Committee shall be made in its respective sole discretion, not as a fiduciary
and need not be uniformly applied to similarly situated individuals and shall
be final, binding and conclusive on all persons interested in the Plan.
<PAGE>
Sec. 8.06 Plan Administrator. The Committee shall be the
"plan administrator" for purposes of ERISA.
Sec. 8.07 Claims Procedure.
(a) The Committee shall advise each Participant and
beneficiary of any benefits to which he is entitled under the Plan. If any
person believes that the Committee has failed to advise him of any benefit to
which he is entitled, he may file a written claim with the Committee. The
claim shall be reviewed, and a response provided, within a reasonable time
after receiving the claim. Any claimant who is denied a claim for benefits
shall be provided with written notice setting forth:
(1) the specific reasons or reasons for the denial;
(2) specific reference to pertinent Plan provisions on
which denial is based;
(3) a description of any additional material or
information necessary for the claimant to perfect the claim; and
(4) an explanation of the claim review procedure set
forth in paragraph (b) below.
(b) Within 60 days of receipt by a claimant of a notice
denying a claim under the Plan under paragraph (a), the claimant or his duly
authorized representative may request in writing a full and fair review of the
claim by the Committee. The Committee may extend the 60-day period where the
nature of the benefit involved or other attendant circumstances make such
extension appropriate. In connection with such review, the claimant or his
duly authorized representative may review pertinent documents and may submit
issues and comments in writing. The Committee shall make a decision promptly,
and not later than 60 days after the Committee's receipt of a request for
review, unless special circumstances (such as the need to hold a hearing, if
the Committee deems one necessary) require an extension of time for
processing, in which case a decision shall be rendered as soon as possible,
but not later than 120 days after receipt of a request for review. The
decision on review shall be in writing and shall include specific reasons for
the decision, written in a manner calculated to be understood by the claimant,
and specific references to the pertinent Plan provisions on which the decision
is based.
ARTICLE 9
AMENDMENT AND TERMINATION
-------------------------
Sec. 9.01 Authority to Amend. The Board may amend the Plan
at any time and in any manner whatsoever. Notwithstanding the above, no
amendment shall operate to reduce the benefit amount accrued on behalf of a
Participant on the effective date of the amendment.
<PAGE>
Sec. 9.02 Right to Terminate. Continuance of the Plan is
completely voluntary and is not assumed as a contractual obligation of the
Company. The Board shall have the right at any time for any reason to
terminate the Plan; provided, however, that the Plan termination shall not
operate to reduce the amount accrued on behalf of a Participant on the
effective date of the Plan's termination.
ARTICLE 10
MISCELLANEOUS
-------------
Sec. 10.01 Limitation of Participant's Right. Nothing in
this Plan shall be construed as conferring upon any Participant any right to
continue in the employment of the Company or an Affiliate, nor shall it
interfere with the rights of the Company or an Affiliate to terminate the
employment of any Participant and/or to take any personnel action affecting
any Participant without regard to the effect such action may have upon such
Participant as a recipient or prospective recipient of benefits under the
Plan.
Sec. 10.02 No Compensation for Other Benefits. Any amounts
paid hereunder shall not be deemed salary or other compensation to a
Participant for the purposes of computing benefits to which he may be entitled
under any other arrangement established by the Company or an Affiliate for the
benefit of its employees.
Sec. 10.03 No Limitation on Company's Actions. Nothing
contained in the Plan shall be construed to prevent the Company or an
Affiliate from taking any action which is deemed by it to be appropriate or in
its best interest. No Participant, beneficiary or other person shall have any
claim against the Company or an Affiliate as a result of such action.
Sec. 10.04 Rights and Obligations. If a Participant becomes
entitled to a distribution under the Plan and if at such time the Participant
has outstanding any debt, obligation, or other liability representing an
amount owing to the Company or an Affiliate, the Company may offset such
amount owed to it against the amount of benefits otherwise distributable. The
rights and obligations created hereunder shall be binding on a Participant's
heirs, executors and administrators and on the successors and assigns of the
Company.
Sec. 10.05 Payments to Representatives. If any Participant
or beneficiary entitled to receive any benefits hereunder is determined by the
Committee, or is adjudged to be, legally incapable of giving valid receipt and
discharge for such benefits, the benefits shall be paid to a duly appointed
and acting conservator or guardian, or other legal representative of such
Participant or beneficiary, if any, and if no such legal representative is
appointed and acting, to such person or persons as the Committee may
designate. Such payments shall, to the extent made, be deemed a complete
discharge for such payments under this Plan.
Sec. 10.06 Protective Provisions. Each Participant and
beneficiary shall cooperate with the Committee by furnishing any and all
information requested by the Committee in order to facilitate the payment of
benefits hereunder. If a Participant or beneficiary refuses to cooperate with
the Committee, the Company shall have no further obligation to the Participant
or beneficiary under the Plan, other than payment of the then-current balance
of the Participant's Accounts in accordance with prior elections.
<PAGE>
Sec. 10.07 Governing Law. Except to the extent superseded by
federal law, the Plan shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Sec. 10.08 Nonalienation. Except as hereinafter provided
with respect to family disputes, the rights of any Participant under this Plan
are personal and may not be assigned, transferred, pledged or encumbered. Any
attempt to do so shall be void. In cases of family disputes, the Committee
shall observe the terms of the Plan unless and until ordered to do otherwise
by a state or federal court. As a condition of participation, a Participant
agrees to hold the Committee harmless from any claim that arises out of the
Committee's obeying the final order of any state or federal court, whether
such order effects a judgment of such court or is issued to enforce a judgment
or order of another court. For purposes of this Section 10.08, "family
dispute" means a dispute relating to provision of child support, alimony
payments, or marital property rights to a spouse, former spouse or other
dependent of the Participant.
Sec. 10.09 Limitations on Obligations. Neither the Company
nor any officer, director or employee thereof shall be responsible or liable
in any manner to any Participant, beneficiary or any person claiming through
them for any benefit or action taken or omitted in connection with the
granting of benefits, the continuation of benefits, or the interpretation and
administration of this Plan.
Sec. 10.10 Withholding. The Committee may make such
provisions and take such action as it may deem necessary or appropriate for
the withholding of any taxes which the Company is required by any law or
regulation of any governmental authority, whether Federal, state or local, to
withhold in connection with any benefits under the Plan, including, but not
limited to, the withholding of appropriate sums from any amount otherwise
payable to the Participant or his beneficiary. Each Participant, however,
shall be responsible for the payment of all individual tax liabilities
relating to any such benefits.
Sec. 10.11 Lost Payees. Any benefit payable under the Plan
shall be deemed forfeited if the Committee is unable to locate the Participant
or beneficiary to whom payment is due; provided, however, that such benefit
shall be reinstated if a claim is made by the Participant or beneficiary for
the forfeited benefit.
Sec. 10.12 Severability. If any provision of this Plan is
held unenforceable, the remainder of the Plan shall continue in full force and
effect without regard to such unenforceable provision and shall be applied as
though the unenforceable provision were not contained in the Plan.
Sec. 10.13 Headings. Headings are inserted in this Plan for
convenience of reference only and are to be ignored in the construction of the
provisions of the Plan.
<PAGE>
Sec. 10.14 Notice. Any notice or filing required or
permitted to be given to the Committee shall be sufficient if in writing and
hand delivered, or sent by registered or certified mail, to the Human
Resources Department of the Company or to such other entity as the Committee
may designate from time to time. Such notice shall be deemed given as to the
date of delivery, or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
in its name and behalf this _____ day of September, 1998, by its officer
thereunto duly authorized.
SunSource Inc.
By:
---------------------------------
<PAGE>
EXHIBIT A
Effective October 1, 1998, the Plan shall offer the
following Earnings Crediting Options for determining the rate of return to be
credited to Accounts. The investment options are:
<TABLE>
<CAPTION>
<S> <C>
o Company Fixed Interest International Equity
o Alliance Global
Domestic Fixed Income o Alliance International
o Alliance Money Market o T. Rowe Price International Stock
o Alliance Intermediate Gov't Securities o Morgan Stanley Emerging Markets
Equity
o Alliance Quality Bond
Aggressive Equity
Aggressive Fixed Income o Alliance Aggressive Stock
o Alliance High Yield o Warburg Pincus Small Company Value
o Alliance Small Cap Growth
Domestic Equity o MFS Emerging Growth Companies
o T. Rowe Price Equity Income
o EQ/Putnam Growth & Income Value Asset Allocation Series
o Alliance Growth & Income o Alliance Conservative Investors
o Alliance Equity Index o EQ/Putnam Balanced
o Merrill Lynch Basic Value Equity o Alliance Balanced
o Alliance Common Stock o Alliance Growth Investors
o MFS Research o Merrill Lynch World Strategy
</TABLE>
<PAGE>
Exhibit 5
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103-6993
Telephone: (215) 963-5000
Fax: (215) 963-5299
September 14, 1998
SunSource Inc.
3000 One Logan Square
Philadelphia, PA 19103
Re: SunSource Inc.
Registration Statement on Form S-8 Relating
to the SunSource Inc. Executive Deferral Plan
---------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to SunSource Inc., a Delaware corporation (the
"Company"), in connection with the preparation of a registration statement on
Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
relating to $6,500,000 of Deferred Compensation Obligations which represent
unsecured obligations of the Company to pay deferred compensation in
accordance with the terms of the SunSource Inc. Executive Deferral Plan (the
"Plan"). We have examined such certificates, records, statutes and other
documents as we have deemed relevant in rendering this opinion. As to matters
of fact, we have relied on representations of officers of the Company. In our
examination, we have assumed the genuineness of documents submitted to us as
originals and the conformity with the original of all documents submitted to
us as copies thereof.
Based on the foregoing, it is our opinion that the Deferred Compensation
Obligations, when issued in accordance with the Plan, will be valid and
binding obligations of the Company, enforceable in accordance with their terms
except as enforcement thereof may be limited by bankruptcy, insolvency or
other laws of general applicability relating to or affecting enforcement of
creditors' rights or general equity principles.
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of
the Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
- -------------------------------
<PAGE>
Exhibit 23.1
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated January 29, 1998, except for Note 22 as to which
the date is February 5, 1998, on our audits of the consolidated financial
statements of SunSource Inc. as of December 31, 1997 and 1996 and for the
years ended December 31, 1997, 1996 and 1995, which report is included in
SunSource's 1997 Annual Report on Form 10-K.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
September 14, 1998
