<PAGE> 1
As filed with the Securities and Exchange Commission on April 16, 1999
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
MEADE INSTRUMENTS CORP.
(Exact name of registrant as specified in its charter)
-------------------
Delaware 95-2988062
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6001 Oak Canyon
Irvine, California 92620-4205
(949) 451-1450
(Address of principal executive offices)
-------------------
MEADE INSTRUMENTS CORP. EMPLOYEE STOCK OWNERSHIP PLAN
(Full title of the plan)
-------------------
John C. Diebel
Chairman of the Board and
Chief Executive Officer
Meade Instruments Corp.
6001 Oak Canyon
Irvine, California 92620-4205
(Name and address of agent for service)
-------------------
Telephone number, including area code, of agent for service: (949) 451-1450
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per unit price fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,465,532(1) $10.9375(2) $16,029,256(2) $4,457(2)
$.01 par value shares
- -------------------- ----------------- ---------------- ------------------------- ----------------
</TABLE>
(1) This Registration Statement covers, in addition to the number of shares
of Meade Instruments Corp. Common Stock, $.01 par value (the "Common
Stock"), stated above, other rights to purchase or acquire the shares of
Common Stock covered by the Prospectus and, pursuant to Rule 416(c)
under the Securities Act of 1933, as amended (the "Securities Act"), an
indeterminate number of shares which by reason of certain events
specified in the Meade Instruments Corp. Employee Stock Ownership Plan
(the "Plan") may become subject to the Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per share and in
the aggregate, and the registration fee were calculated based upon the
average of the high and low prices of the Common Stock on April 14,
1999, as reported on the Nasdaq National Market and published in the
Western Edition of The Wall Street Journal.
The Exhibit Index for this Registration Statement is at page 9.
================================================================================
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PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of
Form S-8 (plan information and registrant information) will be sent or given to
employees as specified by Rule 428(b)(1) of the Securities Act. Such documents
need not be filed with the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 of the Securities Act. These documents, which
include the statement of availability required by Item 2 of Form S-8, and the
documents incorporated by reference in this Registration Statement pursuant to
Item 3 of Form S-8 (Part II hereof), taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
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PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of Meade Instruments Corp. (the
"Company") filed with the Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the Company's
fiscal year ended February 28, 1998, filed with the Commission
on May 29, 1998;
(b) The Company's Quarterly Reports on Forms 10-Q for the quarterly
periods ended May 31, 1998, August 31, 1998, and November 30,
1998, filed with the Commission on July 2, 1998, October 13,
1998, and December 22, 1998, respectively; and
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, filed with the Commission on
February 27, 1997.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), 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 into the prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document, all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or amended, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Common Stock is registered pursuant to Section 12 of the
Exchange Act. Therefore, the description of the securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the original issuance of Common Stock registered
hereby is passed on for the Company by Mark D. Peterson. Mr. Peterson is the
Vice President and General Counsel of the Company, is compensated as an employee
of the Company, is a holder of options to acquire Common Stock and is a
participant in the Plan.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
LIMITATION OF LIABILITY
The Company's Certificate of Incorporation (the "Certificate")
provides that a director of the Company will not be personally liable for
monetary damages to the Company or its stockholders for breach of fiduciary duty
as a director, except to the extent such exemption for liability or limitation
thereof is not permitted under the Delaware General Corporation Law (the "Law")
(i.e., liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of Section 174 of
the Law, or (iv) for any transaction from which the director derived an improper
personal benefit).
While the Certificate provides directors with protection from
awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate will have no effect on the
availability of equitable remedies, such as an injunction or rescission based on
a director's breach of such director's duty of care.
INDEMNIFICATION
The Certificate provides that each person (and the heirs,
executors, or administrators of such person) who was or is a party or is
threatened to be made a party to, or is involved in any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative, by reason of the fact that such person is or was a director or
officer of the Company or is or was serving at the request of the Company as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, will be indemnified and held harmless by the Company to the
fullest extent permitted by the Law. The Certificate further provides that the
right to indemnification includes the right to be paid by the Company for
expenses incurred in connection with any such proceeding in advance of its final
disposition to the fullest extent permitted by the Law, and that the right to
indemnification conferred thereunder is deemed a contract right.
The Certificate further provides that the Company may, by action
of its Board of Directors (the "Board"), provide indemnification to such of the
employees and agents of the Company and such other persons serving at the
request of the Company as employees or agents of another corporation,
partnership, joint venture, trust or other enterprise to such extent and to such
effect as is permitted by the Law and the Board.
Pursuant to the Certificate, the Company has the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss incurred by such person in any such capacity or
arising out of his or her status as such, whether or not the Company would have
the power to indemnify such person against such liability under the Law.
The Certificate provides that (i) the rights and authority
described above are not exclusive of any other right that any person otherwise
may have or acquire and (ii) no amendment, modification or repeal of the
Certificate, or adoption of any additional provision of the Certificate or
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<PAGE> 5
the Company's Bylaws, or, to the fullest extent permitted by the Law, any
amendment, modification or repeal of law will eliminate or reduce the effect of
the provisions in the Certificate limiting liability or indemnifying certain
persons or adversely affect any right or protection then existing thereunder in
respect of any acts or omissions occurring prior to such amendments,
modifications, repeal or adoption.
The Company has entered into indemnification agreements with its
directors and officers that require the Company to indemnify the directors and
officers to the fullest extent permitted by applicable provisions of the Law
and, to the extent necessary, the California General Corporation Law.
The Company also maintains directors' and officers' liability
insurance policies insuring directors and officers of the Company for certain
covered losses as defined in the policies.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index on page 9.
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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
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 this Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(1)(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 with or
furnished to
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the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, 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; and
(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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this 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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, 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 the City of Irvine, State of California, on April 16, 1999.
By: /s/ John C. Diebel
-------------------------------------
John C. Diebel,
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints John C. Diebel and Mark D. Peterson, or each of them individually, his
true and lawful attorney-in-fact and agent, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the 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 either of them individually, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, 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/ John C. Diebel Chairman of the Board and April 16, 1999
-------------------------- Chief Executive Officer
John C. Diebel (Principal Executive Officer)
/s/ Steven G. Murdock President, Chief Operating April 16, 1999
-------------------------- Officer, Secretary and Director
Steven G. Murdock
</TABLE>
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<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Joseph A. Gordon, Jr. Senior Vice President-- April 16, 1999
-------------------------- North American Sales and
Joseph A. Gordon, Jr. Director
/s/ Brent W. Christensen Vice President--Finance and April 16, 1999
-------------------------- Chief Financial Officer
Brent W. Christensen (Principal Financial and
Accounting Officer)
/s/ Timothy C. McQuay Director April 16, 1999
------------------------
Timothy C. McQuay
/s/ Harry L. Casari Director April 16, 1999
------------------------
Harry L. Casari
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Incorporation
Number Description of Exhibit Reference
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<S> <C> <C>
4.1 Meade Instruments Corp. Employee Stock Ownership Plan (the
"Plan"), as Amended and Restated effective as of January 1,
1999.
4.2 Employee Stock Ownership Trust Agreement, as Amended and (a)
Restated as of April 9, 1997, between the Company and Wells
Fargo Bank N.A..............................................
5. Opinion of Counsel (opinion re legality).
23.1 Consent of PricewaterhouseCoopers LLP (consent of independent
auditors).
23.2 Consent of Counsel (included in Exhibit 5).
24. Power of Attorney (included in this Registration Statement under
"Signatures").
</TABLE>
- ----------
(a) Filed as part of the Company's Annual Report on Form 10-K for the fiscal
year ended February 28, 1998, filed with the Commission on May 29, 1998,
incorporated herein by this reference.
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EXHIBIT 4.1
MEADE INSTRUMENTS CORP.
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated Effective as of January 1, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C> <C>
1. Nature of the Plan.....................................................................1
2. Definitions............................................................................2
3. Eligibility and Participation..........................................................7
4. Employer Contributions.................................................................9
5. Investment of Trust Assets............................................................11
6. Allocations to Participants' Accounts.................................................14
7. Allocation Limitations................................................................18
8. Voting Company Stock..................................................................21
9. Vesting and Forfeitures...............................................................21
10. Credited Service and Break in Service................................................22
11. When Capital Accumulation Will Be Distributed........................................24
12. Diversification Election and In-Service Distributions. ..............................26
13. How Capital Accumulation Will Be Distributed.........................................28
14. Rights, Options and Restrictions on Company Stock....................................30
15. No Assignment of Benefits............................................................31
16. Administration.......................................................................31
17. Claims Procedure.....................................................................35
18. Limitation on Participants' Rights...................................................36
19. Future of the Plan...................................................................37
20. "Top-Heavy" Contingency Provisions...................................................38
21. Governing Law........................................................................39
22. Execution............................................................................39
</TABLE>
<PAGE> 3
MEADE INSTRUMENTS CORP.
EMPLOYEE STOCK OWNERSHIP PLAN
Section 1. Nature of the Plan.
The purpose of this Plan is to enable participating Employees to share
in the growth and prosperity of Meade Instruments Corp. (the "Company") and to
provide Participants with an opportunity to accumulate capital for their future
economic security. The Plan is intended to do this without any deductions from
Participants' paychecks and without requiring them to invest their personal
savings. The primary purpose of the Plan is to enable Participants to acquire
stock ownership interests in the Company. Therefore, the Trust established under
the Plan is designed to invest primarily in Company Stock.
The Plan is also designed to be available as a technique of corporate
finance to the Company. Accordingly, it may be used to accomplish the following
objectives:
(a) To meet general financing requirements of the Company, including
capital growth and transfers in the ownership of Company Stock;
(b) To provide Participants with beneficial ownership of Company
Stock substantially in proportion to their relative
Compensation, without requiring any cash outlay, any reduction
in pay or other personal investment on the part of Participants;
and
(c) To receive loans (or other extensions of credit) to finance the
acquisition of Company Stock, with such loans to be repaid by
Employer Contributions to the Trust and dividends received on
such Company Stock.
<PAGE> 4
The Plan , originally adopted effective as of March 1, 1996, is hereby
amended and restated effective as of January 1, 1999. The Plan is a stock bonus
plan under Section 401(a) of the Internal Revenue Code (the "Code") and an
employee stock ownership plan under Section 4975(e)(7) of the Code.
In order to satisfy applicable requirements of the Code, as amended by
the Small Business Job Protection Act of 1996, the second sentence of the second
paragraph of Section 4(b) is amended effective as of January 1, 1997. All Trust
Assets held under the Plan will be administered, distributed, forfeited and
otherwise governed by the provisions of this Plan and the related Trust
Agreement. The Plan is administered by an Administrative Committee for the
exclusive benefit of Participants (and their Beneficiaries).
Section 2. Definitions.
In this Plan, whenever the context so indicates, the singular or plural
number and the masculine, feminine or neuter gender shall be deemed to include
the other, the terms "he," "his" and "him" shall refer to a Participant, and the
capitalized terms shall have the following meanings:
Account .............. One of two accounts maintained to record the
interest of a Participant under the Plan. See
Section 6.
Acquisition Loan ..... A loan (or other extension of credit) used by
the Trust to finance the acquisition of Company
Stock, which loan may constitute an extension of
credit to the Trust from a party in interest (as
defined in ERISA). See Section 5(b).
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Affiliate ............ Any corporation which is a member of a
controlled group of corporations (within the
meaning of Section 414(b) of the Code) of which
the Company is also a member or any trade or
business (whether or not incorporated) which is
under common control with the Company (within
the meaning of Section 414(c) of the Code).
Allocation Date ...... The December 31st of each year (the last day of
each Plan Year).
Approved Absence ..... A leave of absence from work granted to an
Employee by the Company under its established
leave policy, including unpaid leave under the
Family and Medical Leave Act of 1993. See
Section 3(c).
Beneficiary .......... The person (or persons) entitled to receive any
benefit under the Plan in the event of a
Participant's death. See Section 13(c).
Board of Directors ... The Board of Directors of the Company.
Break in Service ..... A period of time commencing with the date on
which an Employee's Service terminates and
ending on the date he resumes service. See
Section 10(b).
Capital Accumulation.. A Participant's vested, nonforfeitable interest
in his Accounts under the Plan. Each
Participant's Capital Accumulation shall be
determined in accordance with the provisions of
Section 9 and distributed as provided in
Sections 11, 12 and 13.
Code ................. The Internal Revenue Code of 1986, as amended.
Committee ............ The Administrative Committee appointed by the
Board of Directors to administer the Plan. See
Section 16.
Company............... Meade Instruments Corp., a Delaware corporation.
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Company Stock ........ Shares of Common Stock issued by the Company,
which stock is readily tradable on an
established securities market and constitutes
"employer securities" under Section 409(l)(1) of
the Code.
Company Stock Account. The Account which reflects each Participant's
interest in Company Stock held under the Plan.
See Section 6.
Compensation ......... The total wages and other compensation paid to
an Employee by the Company during each Plan
Year, as reported on the Employee's Tax and Wage
Statement (Form W-2), including any Elective
Deferrals made on his behalf to the 401(k) Plan
and any amounts withheld pursuant to the
Company's Cafeteria Plan (under Section 125 of
the Code), but excluding any amount in excess of
$160,000 (as adjusted after 1999 for increases
in the cost of living pursuant to Section
401(a)(17) of the Code).
Credited Service...... The elapsed period of an Employee's Service,
including Service prior to March 1, 1996. See
Section 10.
Disability ........... A physical or mental impairment which
constitutes a total and permanent disability
entitling the Participant to disability benefits
under the Social Security Act.
Discretionary
Contributions ........ Employer Contributions made in amounts
determined by the Board of Directors. See
Section 4(a).
Elective Deferrals ... Contributions made to the 401(k) Plan at the
election of an Employee.
Employee ............. Any individual who is treated as a common-law
employee by the Company; provided, however, that
an independent contractor (or other
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individual) who is reclassified as a common law
employee on a retroactive basis shall not be
treated as having been an Employee for purposes
of the Plan for any period prior to the date
that he is so reclassified. A leased employee,
as described in Section 414(n) of the Code, is
not an Employee for purposes of this Plan.
Employer Contributions Payments made to the Trust by the Company. See
Section 4.
ERISA ................ The Employee Retirement Income Security Act of
1974, as amended.
Fair Market Value .... The fair market value of Company Stock, as
determined for all purposes under the Plan by
reference to prevailing market prices.
Financed Shares ...... Shares of Company Stock acquired by the Trust
with the proceeds of an Acquisition Loan.
Forfeiture ........... A Participant's Accounts which are not vested
and which are forfeited under Section 9(b)
following his termination of Service.
401(k) Plan .......... The Meade Instruments Corporation 401(k) Plan, a
profit sharing plan qualified under Section
401(a) of the Code that includes a "cash or
deferred arrangement" under Section 401(k) of
the Code.
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<PAGE> 8
Highly Compensated
Employee ............. An Employee who (1) was a 5% owner at any time
during the Plan Year or the preceding Plan Year,
or (2) had Compensation in excess of $80,000 in
the preceding Plan Year and, if so elected by
the Company, was in the top-paid 20% group of
Employees for such preceding Plan Year;
provided, however, that is such "top-paid group"
election is made by the Company for any Plan
Year, the "top-paid group" election must also be
applied to all employee benefit plans maintained
by the Company or an Affiliate. The $80,000
amount shall be adjusted after 1999 for
increases in the cost of living pursuant to
Section 414(q)(1) of the Code.
Hour of Service ...... Each hour of Service for which an Employee is
credited under the Plan, as described in Section
3(d).
Matching Contributions Employer Contributions made in amounts related
to Participants' Elective Deferrals. See Section
4(b).
Other Investments
Account .............. The Account which reflects each Participant's
interest under the Plan attributable to any
Trust Assets other than Company Stock. See
Section 6.
Participant .......... Any Employee or former Employee who has met the
applicable eligibility requirements of Section
3(a) and who has not yet received a complete
distribution of his Capital Accumulation.
Plan ................. The Meade Instruments Corp. Employee Stock
Ownership Plan, which includes this Plan and the
related Trust Agreement.
Plan Year ............ The 12-month period ending on each Allocation
Date (and coinciding with each calendar year),
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which period shall also be the "limitation year"
for purposes of Section 415 of the Code.
Retirement ........... Termination of Service on or after attaining age
60.
Service .............. Employment with the Company or with any
Affiliate; provided, however, that periods of
employment with an employer during which the
employer was not an Affiliate shall not be
included as Service.
Trust ................ The Meade Instruments Corp. Employee Stock
Ownership Trust, which is governed by the Trust
Agreement entered into between the Company and
the Trustee.
Trust Agreement ...... The Agreement between the Company and the
Trustee which specifies the duties of the
Trustee.
Trust Assets ......... The Company Stock and any other assets held in
the Trust for the benefit of Participants. See
Section 5.
Trustee .............. The Trustee (and any successor Trustee)
appointed by the Board of Directors to hold the
Trust Assets.
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Section 3. Eligibility and Participation.
(a) Each Employee who was not already a Participant in the Plan on
December 31, 1998, shall become a Participant in the Plan on the June 30th or
December 31st coinciding with or next following the date on which he has
attained age 21 and completed at least six months of Service in which he is
credited with at least 500 Hours of Service. The eligibility computation period
for determining six months of Service under this Section 3(a) shall initially be
the period of six-consecutive months beginning on the Employee's initial date of
Service, then the six-consecutive month period beginning on the semi-anniversary
of his initial date of Service, and thereafter shall be each six-consecutive
month period beginning on the January 1st and July 1st after the anniversary of
his initial date of Service.
In the event that the terms of Service of any Employee are covered by a
collective bargaining agreement, the Employee shall not be eligible to
participate in the Plan unless the terms of such agreement specifically provide
for participation in this Plan.
(b) A Participant is entitled to share in the allocations of Employer
Contributions and Forfeitures under Section 6(a) and (b) for each Plan Year in
which he is credited with at least 1000 Hours of Service and is an Employee (or
on Approved Absence) on the Allocation Date. A Participant is also entitled to
share in the allocations of Employer Contributions and Forfeitures for the Plan
Year of his Retirement, Disability or death.
(c) A former Participant who is reemployed by the Company shall become a
Participant as of the date of his reemployment. An Employee who is on an
Approved Absence shall not become a Participant until the end of his Approved
Absence, but a
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Participant who is on an Approved Absence shall continue as a Participant during
the period of his Approved Absence. Notwithstanding any provision of this 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.
(d) Hours of Service - For purposes of determining the Hours of Service
to be credited to an Employee under the Plan, the following rules shall be
applied:
(1) Hours of Service shall include each hour of Service for which an
Employee is paid (or entitled to payment) for the performance of
duties; each hour of Service for which an Employee is paid (or
entitled to payment) for a period during which no duties are
performed due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or paid
leave of absence; and each additional hour of Service for which
back pay is either awarded or agreed to (irrespective of
mitigation of damages); provided, however, that not more than
501 Hours of Service shall be credited for a single continuous
period during which an Employee does not perform any duties.
(2) The crediting of Hours of Service shall be determined in
accordance with the rules set forth in paragraphs (b) and (c) of
Section 2530.200b-2 of the regulations prescribed by the
Department of Labor, which rules shall be consistently applied
with respect to all Employees within the same job
classification.
(3) Hours of Service shall not be credited to an Employee for a
period during which no duties are performed if payment is made
or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment
compensation or disability insurance laws, and Hours of Service
shall not be credited on account of any payment made or due an
Employee solely in reimbursement of medical or medically-related
expenses.
(4) Each Employee for whom the Company does not maintain records of
actual Hours of Service shall be credited with 45 Hours of
Service for each weekly payroll period in which he completes at
least one Hour of Service.
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Section 4. Employer Contributions.
(a) Discretionary Contributions - Discretionary Contributions shall be
paid to the Trustee in such amounts (or under such formula) as may be determined
by the Board of Directors.
(b) Matching Contributions - Matching Contributions shall be paid by the
Company to the Trustee for each Participant who is entitled to share in the
allocation of Matching Contributions under Section 3(b) for each Plan Year in an
amount equal to 100% of the Elective Deferrals made to the 401(k) Plan on his
behalf for the Plan Year, but only to the extent such Elective Deferrals do not
exceed 4% of his Compensation. The allocations of Financed Shares made as a
result of Matching Contributions shall be based upon the purchase price paid by
the Trustee to acquire such Company Stock.
Matching Contributions for Highly Compensated Employees shall be limited
for any Plan Year to the extent necessary to satisfy one of the contribution
percentage requirements described in Section 401(m)(2) of the Code and Section
1.401(m)-1(b) of the regulations thereunder, as computed separately (if
necessary) for the Plan and the 401(k) Plan. For the 1997 and 1998 Plan Years,
such contribution percentage requirements shall be satisfied based upon the
"current Plan Year testing method," as described in Internal Revenue Notice
98-1. For Plan Years beginning on or after January 1, 1999, such contribution
percentage requirements shall be satisfied based upon the "prior Plan Year
testing method," as described in Internal Revenue Notice 98-1. Any reduction
under this Section 4(b) that is necessary to satisfy one of the contribution
percentage requirements shall be made with respect to amounts
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that are determined to be "excess aggregate contributions" (within the meaning
of Section 1.401(m)-1(f)(8) of the regulations). Such excess aggregate
contributions are determined by reducing the Matching Contributions made on
behalf of Highly Compensated Employees in order of the actual contribution
percentage beginning with the highest of such percentages. The actual
contribution percentage of the Highly Compensated Employee with the highest such
percentage shall be reduced until it equals that of the Highly Compensated
Employee with the next highest percentage. This process shall be repeated until
one of the above tests is passed. Matching Contributions shall not be payable
with respect to any Elective Deferrals under the 401(k) Plan which are
distributed to Participants pursuant to the provisions of the 401(k) Plan in
order to satisfy Sections 401(k)(3)(A)(ii) or 402(g) of the Code.
(c) Payment of Employer Contributions - Employer Contributions shall be
paid to the Trustee not later than the due date (including extensions) for
filing the Company's Federal income tax return for the applicable taxable year
of the Company. Employer Contributions may be paid in cash and/or in shares of
Company Stock, as determined by the Board of Directors; provided, however, that
the Board of Directors may determine that Employer Contributions made for the
purpose of enabling the Trustee to make Acquisition Loan payments may be paid as
provided in Section 5(c) with written notice to the Committee and the Trustee.
Employer Contributions paid in shares of Company Stock shall be valued based
upon Fair Market Value on the date the shares are issued to the Trustee.
(d) Additional Provisions - Employer Contributions shall not be made in
amounts which can be allocated to no Participant's Accounts by reason of the
allocation limitations described in Section 7(a) or in amounts which are not
deductible under Section 404(a) of the
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Code. Any Employer Contributions which are not deductible under Section 404(a)
of the Code may be returned to the Company by the Trustee (upon the direction of
the Company) within one year after the deduction is disallowed or after it is
determined that the deduction is not available. In the event that Employer
Contributions are paid to the Trust by reason of a mistake of fact, such
Employer Contributions may be returned to the Company by the Trustee (upon the
direction of the Company) within one year after the payment to the Trust.
(e) No Participant Contributions - No Participant shall be required or
permitted to make contributions to the Trust.
Section 5. Investment of Trust Assets.
(a) In General - Trust Assets will be invested by the Trustee primarily
(or exclusively) in Company Stock in accordance with directions from the
Committee, except as otherwise provided in Section 5(d). Employer Contributions
(and other Trust Assets) may be used to acquire shares of Company Stock from any
Company shareholder or from the Company. All purchases of Company Stock by the
Trustee shall be made only as directed by the Committee and only at prices which
do not exceed Fair Market Value as of the date of the purchase. The Committee
may direct the Trustee to invest and hold up to 100% of the Trust Assets in
Company Stock. Pending the investment of Trust Assets in Company Stock, the
Trustee may also invest Trust Assets in such other prudent investments as the
Committee deems to be desirable for the Trust, or Trust Assets may be held
temporarily in cash.
(b) Acquisition Loans - With the approval of the Board of Directors, the
Committee may direct the Trustee to incur Acquisition Loans from time to time to
finance the
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acquisition of Company Stock ("Financed Shares") or to repay a prior Acquisition
Loan. An installment obligation incurred in connection with the purchase of
Company Stock shall be treated as an Acquisition Loan, and all indebtedness
incurred to acquire Company Stock in a single transaction shall be treated as
one Acquisition Loan for purposes of the Plan. An Acquisition Loan shall be for
a specific term, shall bear a reasonable rate of interest and shall not be
payable on demand except in the event of default. An Acquisition Loan may be
secured by a pledge of the Financed Shares so acquired (or acquired with the
proceeds of a prior Acquisition Loan which is being refinanced). No other Trust
Assets may be pledged as collateral for an Acquisition Loan, and no lender shall
have recourse against Trust Assets except as provided in Section 54.4975-7(b)(5)
of the Regulations under the Code. Any pledge of Financed Shares must provide
for the release of the shares so pledged as payments on the Acquisition Loan are
made by the Trustee and such Financed Shares are allocated to Participants'
Company Stock Accounts under Section 6(c). If the lender is a party in interest
(as defined in ERISA), the Acquisition Loan must provide for a transfer of Trust
Assets to the lender on default only upon and to the extent of the failure of
the Trust to meet the payment schedule of the Acquisition Loan.
(c) Acquisition Loan Payments - Payments of principal and/or interest on
any Acquisition Loan shall be made by the Trustee (as directed by the Committee)
only from Employer Contributions paid to enable the Trust to repay such
Acquisition Loan, from earnings attributable to such Employer Contributions and
from any cash dividends received by the Trust on the Financed Shares (whether
allocated or unallocated) purchased with the proceeds of such Acquisition Loan;
and the payments made with respect to an Acquisition
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Loan for a Plan Year must not exceed the sum of such Employer Contributions,
earnings and dividends for that Plan Year (and prior Plan Years), less the
amount of such payments for prior Plan Years. If the Company is the lender with
respect to an Acquisition Loan, Employer Contributions may be paid in the form
of cancellation of indebtedness under the Acquisition Loan. If the Company is
not the lender with respect to an Acquisition Loan, payments on the Acquisition
Loan may be made by the Company directly to the lender, with such payments
treated as Employer Contributions.
(d) Sales of Company Stock - The Committee may direct the Trustee to
sell shares of Company Stock to any person (including the Company); provided
that any such sale shall be effected by the Trustee at a price not less than
Fair Market Value on the sale date. Notwithstanding the provisions of Section
5(c), the Committee may direct the Trustee to apply the proceeds from the sale
of unallocated Financed Shares to repay the Acquisition Loan (incurred to
finance the purchase of such Financed Shares) in the event of a merger,
consolidation or sale of all or substantially all of the assets of the Company,
or the sale of all or substantially all of the stock of the Company or the
termination of the Plan or if the Plan ceases to be an employee stock ownership
plan under Section 4975(e)(7) of the Code. Any sale of Company Stock under this
Section 5(d) must comply with the fiduciary duties applicable under Section
404(a)(1) of ERISA and with the primary benefit rule of Section 408(b)(3)(A) of
ERISA and Section 4975(d)(3)(A) of the Code, if applicable.
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Section 6. Allocations to Participants' Accounts.
A Company Stock Account and an Other Investments Account shall be
maintained to reflect the interest of each Participant under the Plan.
Company Stock Account - The Company Stock Account maintained for each
Participant will be credited annually with his allocable share of Company Stock
(including fractional shares) purchased and paid for by the Trust or contributed
in kind to the Trust as a Discretionary Contribution or Matching Contribution,
with any Forfeitures from Company Stock Accounts and with any stock dividends on
Company Stock allocated to his Company Stock Account.
Other Investments Account - The Other Investments Account maintained for
each Participant will be credited annually with his allocable share of
Discretionary Contributions and Matching Contributions that are not in the form
of Company Stock, with any Forfeitures from Other Investments Accounts, with any
cash dividends on Company Stock allocated to his Company Stock Account (other
than currently distributed dividends) and any net income (or loss) of the Trust.
Such Account will be debited for the Participant's share of any cash payments
made by the Trustee for the acquisition of Company Stock or for the payment of
any principal and/or interest on an Acquisition Loan.
The allocations to Participants' Accounts for each Plan Year will be
made as follows:
(a) Discretionary Contributions and Forfeitures - Discretionary
Contributions under Section 4(a) and Forfeitures under Section 9(b) for each
Plan Year will be allocated as of the Allocation Date among the Accounts of
Participants so entitled under Section 3(b) in
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the ratio that the Compensation of each such Participant bears to the total
Compensation of all such Participants, subject to the allocation limitations
described in Section 7.
(b) Matching Contributions - Matching Contributions for each Plan Year
will be allocated as of the Allocation Date to the Accounts of the Participants
in accordance with the rules outlined in Section 4(b).
(c) Financed Shares - Any Financed Shares acquired by the Trust shall
initially be credited to a "Loan Suspense Account" and will be allocated to
Company Stock Accounts of Participants only as payments on the Acquisition Loan
are made by the Trustee. The number of Financed Shares to be released from the
Loan Suspense Account for allocation to Participants' Company Stock Accounts
shall be determined by the Committee as follows:
(1) Principal/Interest Method - The number of Financed Shares
held in the Loan Suspense Account immediately before the current release shall
be multiplied by a fraction. The numerator of the fraction shall be the current
payments of principal and/or interest on the Acquisition Loan. The denominator
of the fraction shall be the sum of the numerator plus the total payments of
principal and interest on that Acquisition Loan projected to be paid in the
future years. For this purpose, the interest to be paid in future years is to be
computed by using the interest rate in effect as of the current release date.
(2) Principal Only Method - The Committee may elect (as to each
Acquisition Loan) or the provisions of the Acquisition Loan may provide for the
release of Financed Shares from the Loan Suspense Account based solely on the
ratio that the current payments of principal bear to the total principal amount
of the Acquisition Loan. This method may be used only to the extent that: (A)
the Acquisition Loan provides for annual payments
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of principal and interest at a cumulative rate that is not less rapid at any
time than level annual payments of such amounts for ten years; (B) interest
included in any payment on the Acquisition Loan is disregarded only to the
extent that it would be determined to be interest under standard loan
amortization tables; and (C) the entire duration of the Acquisition Loan
repayment period does not exceed ten years, even in the event of a renewal,
extension or refinancing of the Acquisition Loan.
(3) Allocation of Released Shares - When Trust Assets are
applied to make payments on an Acquisition Loan, the Financed Shares released
from the Loan Suspense Account in accordance with the provisions of this Section
6(c) shall be allocated among Company Stock Accounts of Participants in the
manner determined by the Committee based upon the source of funds (Discretionary
Contributions, Matching Contributions, earnings attributable to such Employer
Contributions and cash dividends on Financed Shares) used to make the payments
on the Acquisition Loan. If cash dividends on Financed Shares allocated to a
Participant's Company Stock Account are used to make payments on an Acquisition
Loan, Financed Shares (representing that portion of such payments and whose Fair
Market Value is at least equal to the amount of such dividends) released from
the Loan Suspense Account shall be allocated to that Participant's Company Stock
Account.
(d) Net Income (or Loss) of the Trust - The net income (or loss) of the
Trust for each Plan Year will be determined as of the Allocation Date. Prior to
the allocation of Employer Contributions and Forfeitures for the Plan Year, each
Participant's share of any net income (or loss) will be allocated to his Other
Investments Account in the ratio that the total balances of both his Accounts on
the preceding Allocation Date (reduced by any distribution
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of Capital Accumulation from such Account during the Plan Year) bears to the sum
of such Account balances for all Participants as of that date. The net income
(or loss) of the Trust includes the increase (or decrease) in the fair market
value of Trust Assets (other than Company Stock), interest income, dividends and
other income and gains (or losses) attributable to Trust Assets (other than any
dividends on allocated Company Stock) since the preceding Allocation Date,
reduced by any expenses charged to the Trust Assets for that Plan Year. The
determination of the net income (or loss) of the Trust shall not take into
account any interest paid by the Trust under an Acquisition Loan.
(e) Dividends on Company Stock - Any cash dividends received on shares
of Company Stock allocated to Participants' Company Stock Accounts will be
allocated to the respective Other Investments Accounts of such Participants. Any
cash dividends received on unallocated shares of Company Stock (including any
Financed Shares credited to the Loan Suspense Account) shall be included in the
computation of the net income (or loss) of the Trust. Any stock dividends
received on Company Stock shall be credited to the Accounts (including the Loan
Suspense Account) to which such Company Stock was allocated.
(f) Accounting for Allocations - The Committee shall establish
accounting procedures for the purpose of making the allocations to Participants'
Accounts provided for in this Section 6. The Committee shall maintain adequate
records of the aggregate cost basis of Company Stock allocated to each
Participant's Company Stock Account. The Committee shall also keep separate
records of Financed Shares and of Employer Contributions (and any earnings
thereon) made for the purpose of enabling the Trust to repay any Acquisition
Loan. From time to time, the Committee may modify the accounting procedures for
the purposes of
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achieving equitable and nondiscriminatory allocations among the Accounts of
Participants in accordance with the general concepts of the Plan, the provisions
of this Section 6 and the requirements of the Code and ERISA.
Section 7. Allocation Limitations.
(a) Limitations on Annual Additions - The Annual Additions for each Plan
Year with respect to any Participant may not exceed the lesser of:
(1) 25% of his Compensation; or
(2) $30,000, as adjusted for increases in the cost of living
pursuant to Section 415(d)(1)(C) of the Code.
For this purpose, "Annual Additions" shall be the total of the Employer
Contributions and Forfeitures (including any income attributable to Forfeitures)
allocated to the Accounts of a Participant for the Plan Year, except as provided
in Section 7(b), plus any contributions (including Elective Deferrals) or
forfeitures allocated to his accounts under the 401(k) Plan for the Plan Year.
In determining such Annual Additions, Forfeitures of Company Stock shall be
included at Fair Market Value as of the Allocation Date and Employer
Contributions in the form of Company Stock shall be included at Fair Market
Value as of the date such shares are issued to the Trust.
If the aggregate amount that would be allocated to the Accounts of a
Participant in the absence of these limitations would exceed the amount set
forth in these limitations, the allocation of Discretionary Contributions and
Forfeitures under this Plan shall be reduced
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prior to reducing the allocations to his accounts under the 401(k) Plan. Any
Forfeitures which can be allocated to no Participant's Accounts by reason of
these limitations shall be credited to a "Forfeiture Suspense Account" and
allocated as Forfeitures under Section 6(a) for the next succeeding Plan Year
(prior to the allocation of Employer Contributions for such succeeding Plan
Year).
(b) Special Acquisition Loan Rules - Any Employer Contributions which
are used by the Trust (not later than the due date, including extensions, for
filing the Company's Federal income tax return for the applicable taxable year)
to pay interest on an Acquisition Loan, and any Financed Shares which are
allocated as Forfeitures, shall not be included as Annual Additions under
Section 7(a); provided, however, that the provisions of this paragraph shall be
applicable only if not more than one-third of any Employer Contributions applied
to pay principal and/or interest on an Acquisition Loan are allocated to
Participants who are Highly Compensated Employees; and the Committee shall
reallocate such Employer Contributions to the extent it deems it to be
appropriate to satisfy this special rule.
The Annual Additions under Section 7(a) with respect to Financed Shares
released from the Loan Suspense Account (by reason of Employer Contributions
used for payments on an Acquisition Loan) and allocated to Participants' Company
Stock Accounts shall be the lesser of (A) the amount of such Employer
Contributions (as determined after application of the preceding paragraph); or
(B) the Fair Market Value of Company Stock. Annual Additions shall not include
any allocation attributable to any proceeds from the sale of Financed Shares by
the Trust or to appreciation (realized or unrealized) in the Fair Market Value
of Company Stock.
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(c) Limitation on Electing Shareholder - If a Company shareholder sold
Company Stock to the Trust in the transaction described in Section 5(c) and
elected (with the consent of the Company) nonrecognition of gain under Section
1042 of the Code, no portion of the Company Stock purchased in that transaction
(or any dividends or other income attributable thereto) may be allocated prior
to the later of the tenth anniversary of the purchase or the Plan Year following
the Plan Year for which shares are released from the Loan Suspense Account as a
result of the final payment on the Acquisition Loan incurred in connection with
such purchase to the Accounts of:
(1) any Participant who has made an election under Section 1042 of
the Code; or
(2) the selling shareholder's spouse, brothers or sisters (whether
by the whole or half blood), ancestors or lineal descendants
(except as to certain lineal descendants, to the extent provided
in Section 409(n)(3)(A) of the Code), or any other person who
bears a relationship to him that is described in Section 267(b)
of the Code.
In addition, no portion of the Company Stock purchased by the Trust in
the 1996 transaction (or any dividends or other income attributable thereto) may
thereafter be allocated to the Accounts of any Participant owning (as determined
under Section 318(a) of the Code, without regard to Section 318(a)(2)(B)(i) of
the Code), during the entire one-year period preceding the purchase or on any
Allocation Date, more than 25% of any class of outstanding Company Stock or of
the total value of any class of outstanding Company Stock.
To the extent that a Participant is subject to the allocation limitation
described in this Section 7(c) for an Plan Year, he shall not share in the
allocation of Employer Contributions and Forfeitures.
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Section 8. Voting Company Stock.
Each Participant (or Beneficiary) will be entitled to give directions to
the Trustee as to the voting of shares of Company Stock allocated to his Company
Stock Account on all matters presented for a vote of stockholders. Each
Participant (or Beneficiary) having shares allocated to his Company Stock
Account as of the record date for voting at a stockholder meeting shall be
provided with the proxy statement and other materials provided to Company
stockholders in connection with such meeting, together with a form upon which
confidential voting directions may be given to the Trustee. The Trustee shall
not disclose the voting directions of any individual Participant (or
Beneficiary) to the Committee or the Company. Any allocated Company Stock with
respect to which voting directions are not received from Participants (or
Beneficiaries) and any shares of Company Stock which are not then allocated to
Participants' Company Stock Accounts shall be voted by the Trustee in the manner
directed by the Committee.
Section 9. Vesting and Forfeitures.
(a) Vesting - A Participant's interest in his Accounts shall become 100%
vested and nonforfeitable if he (1) is employed by the Company or an Affiliate
on or after his 60th birthday, (2) incurs a Disability while employed by the
Company or an Affiliate, (3) dies while employed by the Company or an Affiliate,
or (4) completes at least three years of Credited Service.
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(b) Forfeitures - If a Participant who is not vested terminates Service,
he will be deemed to have received a distribution of his Capital Accumulation on
the date his Service terminated, and his entire Account balances shall be
forfeited as of that date. All Forfeitures will be reallocated to the Accounts
of remaining Participants, as provided in Section 6(a), as of the Allocation
Date coinciding with or next following the date on which the Forfeiture occurs.
(c) Restoration of Forfeited Amounts - In the event that a non-vested
former Participant is reemployed prior to the occurrence of a five-year Break in
Service, his Account balances (attributable to the prior period of Service) that
were forfeited under Section 9(b) shall be restored as if there had been no
Forfeiture. Such restoration shall be made out of Forfeitures occurring in the
Plan Year of his reemployment (prior to the allocation of Forfeitures under
Section 6(a)). To the extent that such Forfeitures are not sufficient, the
Company shall make a special contribution to restore the Participant's Accounts.
Any amount so restored to a Participant shall not constitute an Annual Addition
under Section 7(a).
Section 10. Credited Service and Break in Service.
(a) Credited Service - An Employee's Credited Service shall include each
period of his Service computed (in full years and days) from the date he is
first credited with an Hour of Service (including Service prior to March 1,
1996) until the date on which his Service terminates. A Break in Service that
does not exceed one year shall be included in an Employee's Credited Service.
Credited Service shall also include periods of Service with an Affiliate.
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(b) Break in Service - A one-year Break in Service shall occur one year
after the date of an Employee's termination of Service. A five-consecutive-year
Break in Service shall occur five years after the date of an Employee's
termination of Service (if he has not been reemployed). For purposes of
determining the period of an Employee's Break in Service, the period of a
maternity/paternity absence, described in Section 411(a)(6)(E)(i) of the Code,
or any unpaid leave covered under the Family and Medical Leave Act of 1993, not
exceeding one year shall not be treated as a Break in Service. For purposes of
this Section 10(b), a "maturity/paternity absence" means an Employee's absence
(A) by reason of the (i) pregnancy of an Employee, (ii) birth of a child of an
Employee or (iii) placement of a child with an Employee in connection with the
adoption of such child by such Employee, or (B) for purposes of caring for a
child described in clause (A) for a period immediately following such birth or
placement.
(c) Reemployment - If a former Employee is reemployed after a
five-consecutive-year Break in Service and had not attained a vested interest
under the Plan, Service prior to the Break in Service shall not be included in
determining his Credited Service. If a Participant is reemployed after a
one-year Break in Service but prior to the occurrence of a five-consecutive-year
Break in Service, his Credited Service shall not include Service prior to the
one-year Break in Service until he completes one year of Credited Service
following reemployment.
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Section 11. When Capital Accumulation Will Be Distributed.
(a) Except as otherwise provided in Sections 11(c) and 12, a
Participant's Capital Accumulation will be distributed following his termination
of Service, but only at the time and in the manner determined by the Committee.
The Committee shall establish a written benefit distribution policy (which may
be modified from time to time) and shall apply such policy to Participants in a
nondiscriminatory manner.
(b) In the event of a Participant's Retirement, Disability or death,
distribution of his Capital Accumulation shall commence not later than the Plan
Year following the Plan Year in which his Retirement, Disability or death
occurs. If a Participant's Service terminates for any other reason, distribution
of his Capital Accumulation shall commence not later than the sixth Plan Year
following the Plan Year in which his Service terminates (unless he is reemployed
by the Company or an Affiliate). Except as otherwise provided in Section 11(c),
if a Participant's Capital Accumulation includes Financed Shares, the Committee
may elect to defer the distribution of that portion of his Capital Accumulation
(attributable to such Financed Shares) until the Plan Year following the Plan
Year in which the Acquisition Loan (incurred to acquire such Financed Shares)
has been fully repaid. For this purpose, all indebtedness incurred by the
Trustee to acquire Company Stock in a single transaction shall be treated as one
Acquisition Loan.
The following alternative modes of distribution may be selected by the
Committee (after considering the available liquid assets of the Company and the
Trust):
(1) Distribution of a Participant's Capital Accumulation in a single
lump sum; or
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(2) Distribution of a Participant's Capital Accumulation in
substantially equal, annual installments over a period not
exceeding five years (provided that the period over which
installments may be distributed may be extended an additional
year (up to an additional five years) for each $145,000 or
fraction thereof by which his Capital Accumulation exceeds
$735,000 (as adjusted after 1999 for increases in the cost of
living pursuant to Section 409(o)(2) of the Code)); or
(3) Any combination of the foregoing.
If the value of a Participant's Capital Accumulation at the time a distribution
would otherwise commence under this Section 11 exceeds $5,000, no portion of his
Capital Accumulation may be distributed to him without his written consent
before he attains age 62.
(c) Distribution of a Participant's Capital Accumulation shall commence
not later than 60 days after the end of the Plan Year in which occurs the latest
of (1) his 65th birthday, (2) the tenth anniversary of the date he became a
Participant, or (3) his termination of Service. The distribution of the Capital
Accumulation of any Participant who attains age 70 1/2 in any calendar year and
either (i) has terminated Service or (ii) is a "5% owner" of Company Stock (as
defined in Section 416(i)(1)(B)(i) of the Code) must commence not later than
April 1st of the next calendar year and must be made in accordance with the
regulations under Section 401(a)(9) of the Code, including Section
1.401(a)(9)-2. If the amount of a Participant's Capital Accumulation cannot be
determined (by the Committee) by the date on which a distribution is to
commence, or if the Participant cannot be located, distribution of his Capital
Accumulation shall commence within 60 days after the date on which his Capital
Accumulation can be determined or after the date on which the Committee locates
the Participant.
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(d) If any part of a Participant's Capital Accumulation is retained in
the Trust after his Service ends, his Accounts will continue to be treated as
described in Section 6. However, except as provided in Section 3(b), such
Accounts shall not be credited with any additional Employer Contributions and
Forfeitures.
Section 12. Diversification Election and In-Service Distributions.
(a) Diversification - Effective January 1, 2006, a Participant who has
attained age 55 and completed at least ten Years of Participation shall be
notified of his right to elect to "diversify" a portion of the balance in his
Company Stock Account, as provided in Section 401(a)(28)(B) of the Code. An
election to "diversify" must be made on the prescribed form and filed with the
Committee within the 90-day period immediately following the last day of a Plan
Year in the Election Period. For purposes of this Section 12, "Years of
Participation" is the number of Plan Years in which the Participant is entitled
to receive an allocation of Employer Contributions or Forfeitures under Section
3(b), and the "Election Period" means the period of six consecutive Plan Years
beginning with the Plan Year in which the Participant first becomes eligible to
make an election.
For each of the first five Plan Years in the Election Period, the
Participant may elect to "diversify" an amount which does not exceed 25% of the
number of shares of Company Stock allocated to his Company Stock Account, less
all shares with respect to which an election under this Section 12(a) was
previously made. In the case of the sixth Plan Year in the Election Period, the
Participant may elect to "diversify" an amount which does not exceed 50% of the
number of shares of Company Stock allocated to his Company Stock Account,
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less all shares with respect to which an election under this Section 12(a) was
previously made. No "diversification" shall be permitted if the balance in a
Participant's Company Stock Account as of the last day of the first Plan Year in
the Election Period has a Fair Market Value of $500 or less, unless and until
the balance in his Company Stock Account as of a subsequent Plan Year in the
Election Period exceeds $500.
The Committee shall determine whether "diversification" will be effected
by permitting the Participant to direct the Trustee to transfer cash
representing that portion of his Company Stock Account with respect to which a
"diversification" election is made to the 401(k) Plan for his benefit (so long
as at least three investment funds (other than Company Stock) are made available
under the 401(k) Plan) or by distributing to the Participant shares of Company
Stock with respect to which a "diversification" election is made. Any transfer
to the 401(k) Plan under this Section 12(a) shall occur no earlier than 30 days
after Form 5310-A with respect to such transfer has been filed (if necessary)
with the Internal Revenue Service, but not later than the time when a
distribution under this Section 12(a) would have been required. Any distribution
under this Section 12(a) shall be made within 90 days after the 90-day period in
which the election may be made and shall be subject to the provisions of Section
13(c) and (d).
(b) In-Service Withdrawal - A Participant who has not terminated Service
and whose interest in his Accounts is 100% vested and nonforfeitable under
Section 9(a)(4) may request a distribution of up to 50% of the number of shares
of Company Stock allocated to his Company Stock Account, less any shares with
respect to which elections under Section 12(a) and this Section 12(b) were
previously made; provided, however, that if he has not completed
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at least five Years of Participation, as defined in Section 12(a), such
withdrawal shall be limited to shares which have been allocated to his Company
Stock Account for at least three Allocation Dates preceding the Plan Year of the
withdrawal. Such a withdrawal may only be made once each Plan Year and shall be
available only during annual withdrawal periods specified by the Committee. Any
distribution to a Participant under this Section 12(b) shall be subject to the
provisions of Section 13 and shall not be eligible for transfer by direct
rollover to the 401(k) Plan; provided, however, that the cash proceeds from a
Participant's sale of Company Stock withdrawn under this Section 12(b) are
eligible to be rolled over to the 401(k) Plan. All withdrawal requests must be
made in writing on forms prescribed by the Committee and shall be subject to
such administrative rules and procedures as may be established by the Committee.
Section 13. How Capital Accumulation Will Be Distributed.
(a) The Trustee will make distributions from the Trust only as directed
by the Committee. Distribution of a Participant's Capital Accumulation will be
made in whole shares of Company Stock, cash or a combination of both, as
determined by the Committee; provided, however, that the Committee shall notify
the Participant of his right to demand distribution of his Capital Accumulation
entirely in whole shares of Company Stock (with only the value of any fractional
share paid in cash). Shares of Company Stock distributed by the Trustee shall be
readily tradable on an established securities market.
(b) Distribution of a Participant's Capital Accumulation will be made to
the Participant if he is living, and if not, to his Beneficiary. In the event of
a Participant's death,
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his Beneficiary shall be his surviving spouse, or if none, his estate. A
Participant (with the written consent of his spouse, if any, acknowledging the
effect of the consent and witnessed by a notary public or Plan representative)
may designate a different Beneficiary or Beneficiaries from time to time by
filing a written designation with the Committee. A deceased Participant's entire
Capital Accumulation shall be distributed to his Beneficiary within five years
after his death, except to the extent that distribution has previously commenced
in accordance with Section 11(b)(2).
(c) The Company shall furnish the recipient of a distribution with the
tax consequences explanation required by Section 402(f) of the Code and shall
comply with the withholding requirements of Section 3405 of the Code and of any
applicable state law with respect to distributions from the Trust. If the
Committee so elects for a Plan Year, distributions to Participants may commence
less than 30 days after the notice required under Section 1.411(a)-11(c) of the
regulations under the Code is given; provided that no such distribution to a
Participant shall be made unless (1) the Participant is informed that he has the
right to a period of at least 30 days after receiving the notice to consider
whether or not to consent to a distribution (or a particular distribution
option) and (2) the Participant affirmatively elects to receive a distribution
after receiving the notice.
(d) If a distribution of a Participant's Capital Accumulation is neither
one of a series of annual installments over a period of ten years (or more) nor
the minimum amount required to be distributed pursuant to the second sentence of
Section 11(c) (an "eligible rollover distribution"), the Committee shall notify
the Participant (or any spouse or former spouse who is his alternate payee under
a "qualified domestic relations order" (as defined in
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Section 414(p) of the Code)) of his right to elect to have the "eligible
rollover distribution" paid directly to an "eligible retirement plan" (within
the meaning of Section 401(a)(31) of the Code) that is an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, a qualified trust described in
Section 401(a) of the Code or a qualified annuity plan described in Section
403(a) of the Code that accepts "eligible rollover distributions." If such an
"eligible rollover distribution" is to be made to the Participant's surviving
spouse, the Committee shall notify the surviving spouse of his right to elect to
have the distribution paid directly to an "eligible retirement plan" that is
either an individual retirement account described in Section 408(a) of the Code
or an individual retirement annuity described in Section 408(b) of the Code. Any
election under this Section 13(d) shall be made and effected in accordance with
such rules and procedures as may be established from time to time by the
Committee in order to comply with Section 401(a)(31) of the Code.
Section 14. Rights, Options and Restrictions on Company Stock.
Shares of Company Stock held or distributed by the Trustee may include
such legend restrictions on transferability as the Company may reasonably
require in order to assure compliance with applicable Federal and state
securities laws, but no shares of Company Stock held or distributed by the
Trustee may be subject to a put, call or other option, or buy-sell or similar
arrangement. The provisions of this Section 14 shall continue to be applicable
to Company Stock even if the Plan ceases to be an employee stock ownership plan
under Section 4975(e)(7) of the Code.
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Section 15. No Assignment of Benefits.
A Participant's Capital Accumulation may not be anticipated, assigned
(either at law or in equity), alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process, except in accordance with
(i) a "qualified domestic relations order" (as defined in Section 414(p) of the
Code); (ii) a federal tax levy or collection by the Internal Revenue Service on
a judgment resulting from an unpaid tax assessment; or (iii) a judgment or
settlement described in Section 401(a)(13)(C) of the Code. Distributions made to
an alternate payee in accordance with a qualified domestic relations order may
commence no earlier than the date on which the Participant attains his "earliest
retirement age" (as defined in Section 414(p)(4)(B) of the Code).
Section 16. Administration.
(a) Administrative Committee - The Plan will be administered by an
Administrative Committee composed of one or more individuals appointed by the
Board of Directors to serve at its pleasure and without compensation. The
members of the Committee shall be the named fiduciaries with authority to
control and manage the operation and administration of the Plan. Members of the
Committee need not be Employees or Participants. Any Committee member may resign
by giving notice, in writing, to the Board of Directors.
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(b) Committee Action - Committee action will be by vote of a majority of
the members at a meeting or by unanimous written consent without a meeting. A
Committee member shall not vote on any question relating specifically to
himself.
The Committee shall choose from its members a Chairman and a Secretary.
The Chairman or the Secretary of the Committee shall be authorized to execute
any certificate or other written direction on behalf of the Committee. The
Secretary shall keep a record of the Committee's proceedings and of all dates,
records and documents pertaining to the administration of the Plan.
(c) Powers and Duties of the Committee - The Committee shall have all
powers necessary to enable it to administer the Plan and the Trust Agreement in
accordance with their provisions, including without limitation the following:
(1) resolving all questions relating to the eligibility of Employees
to become Participants;
(2) determining the appropriate allocations to Participants'
Accounts pursuant to Section 6;
(3) determining the amount of benefits payable to a Participant (or
Beneficiary), and the time and manner in which such benefits are
to be paid;
(4) authorizing and directing all disbursements of Trust Assets by
the Trustee;
(5) establishing procedures in accordance with Section 414(p) of the
Code to determine the qualified status of domestic relations
orders and to administer distributions under such qualified
orders;
(6) engaging any administrative, legal, accounting, clerical or
other services that it may deem appropriate;
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(7) construing and interpreting the Plan and the Trust Agreement and
adopting rules for administration of the Plan that are
consistent with the terms of the Plan documents and of ERISA and
the Code;
(8) compiling and maintaining all records it determines to be
necessary, appropriate or convenient in connection with the
administration of the Plan;
(9) reviewing the performance of the Trustee with respect to the
Trustee's administrative duties, responsibilities and
obligations under the Plan and Trust Agreement;
(10) executing agreements and other documents on behalf of the Plan
and Trust.
The Committee shall be responsible for directing the Trustee as to the
investment of Trust Assets. The Committee may delegate to the Trustee the
responsibility for investing all or any portion of the Trust Assets. The
Committee shall establish a funding policy and method for directing the Trustee
to acquire Company Stock (and for otherwise investing the Trust Assets) in a
manner that is consistent with the objectives of the Plan and the requirements
of ERISA.
The Committee shall perform its duties under the Plan and the Trust
Agreement solely in the interests of the Participants (and their Beneficiaries).
Any discretion granted to the Committee under any of the provisions of the Plan
or the Trust Agreement shall be exercised only in accordance with rules and
policies established by the Committee which shall be applicable on a
nondiscriminatory basis. The Committee shall have sole and exclusive
discretionary authority to construe, interpret and apply the terms of the Plan.
The Committee shall be given the greatest possible deference permitted by law in
the exercise of such discretionary authority.
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(d) Expenses - All reasonable expenses of administering the Plan and
Trust shall be charged to and paid out of the Trust Assets. The Company may,
however, pay all or any portion of such expenses directly, and payment of
expenses by the Company shall not be deemed to be Employer Contributions.
(e) Information to be Submitted to the Committee - To enable the
Committee to perform its functions, the Company shall supply full and timely
information to the Committee on all matters as the Committee may require, and
shall maintain such other records as the Committee may determine are necessary
or appropriate in order to determine the benefits due or which may become due to
Participants (or Beneficiaries) under the Plan.
(f) Delegation of Fiduciary Responsibility - The Committee from time to
time may allocate to one or more of its members and/or may delegate to any other
persons or organizations any of its rights, powers, duties and responsibilities
with respect to the operation and administration of the Plan that are permitted
to be so delegated under ERISA; provided, however, that responsibility for
investment of the Trust Assets may not be allocated or delegated except as
provided in Section 16(c). Any such allocation or delegation shall be made in
writing, shall be reviewed periodically by the Committee and shall be terminable
upon such notice as the Committee in its discretion deems reasonable and proper
under the circumstances.
(g) Bonding, Insurance and Indemnity - To the extent required under
Section 412 of ERISA, the Company shall secure fidelity bonding for the
fiduciaries of the Plan.
The Company (in its discretion) or the Trustee (as directed by the
Committee) may obtain a policy or policies of insurance for the Committee (and
other fiduciaries of the Plan)
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to cover liability or loss occurring by reason of the act or omission of a
fiduciary. If such insurance is purchased with Trust Assets, the policy must
permit recourse by the insurer against the fiduciary in the case of a breach of
a fiduciary obligation by such fiduciary. The Company hereby agrees to indemnify
each member of the Committee (to the extent permitted by law) against any
personal liability or expense resulting from his service on the Committee,
except such liability or expense as may result from his own willful misconduct.
(h) Notices, Statements and Reports - The Company shall be the "Plan
Administrator" (as defined in Section 3(16)(A) of ERISA and Section 414(g) of
the Code) for purposes of the reporting and disclosure requirements of ERISA and
the Code. The Committee shall assist the Company, as requested, in complying
with such reporting and disclosure requirements. The Committee shall be the
designated agent of the Plan for the service of legal process.
Section 17. Claims Procedure.
A Participant (or Beneficiary) who does not receive a distribution of
benefits to which he believes he is entitled may present a claim to the
Committee. The claim for benefits must be in writing and addressed to the
Committee or to the Company. If the claim for benefits is denied, the Committee
shall notify the Participant (or Beneficiary) in writing within 90 days after
the Committee initially received the benefit claim, unless special circumstances
require an extension of time for processing the claim, in which case such period
may be extended for an additional 90 days; provided, that the Committee must
provide the Participant (or Beneficiary) with written notice of such extension
prior to the expiration of the initial 90-day
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period. Any notice of a denial of benefits shall advise the Participant (or
Beneficiary) of the basis for the denial, any additional material or information
necessary for the Participant (or Beneficiary) to perfect his claim and the
steps which the Participant (or Beneficiary) must take to have his claim for
benefits reviewed.
Each Participant (or Beneficiary) whose claim for benefits has been
denied may file a written request for a review of his claim by the Committee.
The request for review must be filed by the Participant (or Beneficiary) within
60 days after he receives the written notice denying his claim. The decision of
the Committee will be made within 60 days after receipt of a request for review
and shall be communicated in writing to the claimant. Such written notice shall
set forth the basis for the Committee's decision. If there are special
circumstances (such as the need to hold a hearing) which require an extension of
time for completing the review, the Committee's decision shall be rendered not
later than 120 days after receipt of a request for review. Nothing contained in
the Plan shall be deemed to give an Employee the right to be retained in the
Service of the Company or to interfere with the right of the Company to
discharge, with or without cause, any Employee at any time. All decisions and
interpretations of the Committee under this Section 17 shall be conclusive and
binding upon all persons with an interest in the Plan and shall be given the
greatest deference permitted by law.
Section 18. Limitation on Participants' Rights.
A Participant's Capital Accumulation will be based solely upon his
vested interest in his Accounts and will be paid only from the Trust Assets. The
Company, the Committee or
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the Trustee shall not have any duty or liability to furnish the Trust with any
funds, securities or other assets, except as expressly provided in the Plan.
The adoption and maintenance of the Plan shall not be deemed to
constitute a contract of employment or otherwise between the Company and any
Employee, or to be a consideration for, or an inducement or condition of, any
employment. Nothing contained in this Plan shall be deemed to give an Employee
the right to be retained in the Service of the Company or to interfere with the
right of the Company to discharge, with or without cause, any Employee at any
time.
Section 19. Future of the Plan.
The Company reserves the right to amend or terminate the Plan (in whole
or in part) and the Trust Agreement at any time, by action of the Board of
Directors. Neither amendment nor termination of the Plan shall retroactively
reduce the vested rights of Participants or permit any part of the Trust Assets
to be diverted to or used for any purpose other than for the exclusive benefit
of the Participants (and their Beneficiaries).
The Company specifically reserves the right to amend the Plan and the
Trust Agreement retroactively in order to satisfy any applicable requirements of
the Code and ERISA.
If the Plan is terminated (or partially terminated), participation of
Participants affected by the termination will end. If Employer Contributions are
not replaced by contributions to a comparable plan which satisfies the
requirements of Section 401(a) of the Code, the Accounts of all affected
Participants shall become nonforfeitable. A complete discontinuance of
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Employer Contributions shall be deemed to be a termination of the Plan for this
purpose.
After termination of the Plan, the Trust will be maintained until the
Capital Accumulations of all Participants have been distributed. Capital
Accumulations may be distributed following termination of the Plan or
distributions may be deferred as provided in Section 11, as the Company shall
determine. In the event that Company Stock is sold in connection with the
termination of the Plan or the amendment of the Plan to become a qualified
employee plan that is not a stock bonus plan, all Capital Accumulations may be
distributed in cash.
In the event of the merger or consolidation of this Plan with another
plan, or the transfer of Trust Assets (or liabilities) to another plan, the
Account balances of each Participant immediately after such merger,
consolidation or transfer must be at least as great as immediately before such
merger, consolidation or transfer (as if the Plan had then terminated).
Section 20. "Top-Heavy" Contingency Provisions.
(a) The provisions of this Section 20 are included in the Plan pursuant
to Section 401(a)(10)(B)(ii) of the Code and shall become applicable only if the
Plan becomes a "top-heavy plan" under Section 416(g) of the Code for any Plan
Year.
(b) The determination as to whether the Plan becomes "top-heavy" for any
Plan Year shall be made as of the Allocation Date of the immediately preceding
Plan Year by considering the Plan together with the 401(k) Plan. The Plan shall
be "top-heavy" only if the total of the account balances under the Plan and the
401(k) Plan for "key employees" as of the determination date exceeds 60% of the
total of the account balances for all Participants. For
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such purpose, account balances shall be computed and adjusted pursuant to
Section 416(g) of the Code. "Key employees" shall be certain Participants (who
are officers or shareholders of the Company) and Beneficiaries described in
Section 416(i)(1) or (5) of the Code.
(c) For any Plan Year in which the Plan is "top-heavy," each Participant
who is an Employee on the Allocation Date (and who is not a "key employee")
shall receive a minimum allocation of Employer Contributions and Forfeitures
which is equal to the lesser of:
(1) 3% of his Compensation; or
(2) the same percentage of his Compensation as the allocation to the
"key employee" for whom the percentage is the highest for that
Plan Year. For this purpose, the allocation to a "key employee"
shall include any Elective Deferrals made on his behalf for the
Plan Year to the 401(k) Plan.
Section 21. Governing Law.
The provisions of this Plan and the Trust Agreement shall be construed,
administered and enforced in accordance with the laws of the State of
California, to the extent such laws are not superseded by ERISA.
Section 22. Execution.
To record the amendment and restatement of the Plan, the Company has
caused it to be executed on this 15th day of April, 1999.
MEADE INSTRUMENTS CORP.
By /s/ STEVEN G. MURDOCK
-------------------------------------
Steven G. Murdock
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EXHIBIT 5.
MEADE INSTRUMENTS CORPORATION
6001 OAK CANYON, IRVINE, CALIFORNIA 92620-4205 U.S.A.
(949) 451-1450 FAX: (949) 654-2688 www.meade.com
- --------------------------------------------------------------------------------
April 16, 1999
Meade Instruments Corp.
6001 Oak Canyon
Irvine, CA 92620
Re: Registration Statement on Form S-8 of
Meade Instruments Corp.
Ladies and Gentlemen:
In my capacity as Vice President and General Counsel of Meade
Instruments Corp., a Delaware corporation (the "Company"), I have, at your
request, examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of 1,465,532 shares of Common Stock, $.01 par value, of the Company (the "Common
Stock"), and additional rights (together with the Common Stock, the "Shares"),
to be issued pursuant to the Meade Instruments Corp. Employee Stock Ownership
Plan (the "Plan"). I have examined the proceedings heretofore taken and to be
taken in connection with the authorization of the Plan and the Shares to be
issued pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and
law as I have deemed relevant, I am of the opinion that the Shares have been
duly authorized by all necessary corporate action on the part of the Company
and, when issued in accordance with such authorization and the provisions of the
Plan, will be validly issued, fully paid and nonassessable.
This opinion is furnished by me as counsel for the Company. I
consent to the use of this opinion as an exhibit to the Registration Statement.
Respectively submitted,
MEADE INSTRUMENTS CORP.
/s/ Mark D. Peterson
----------------------------------
Mark D. Peterson
Vice President and General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 2, 1998 appearing on page F-2 of
the Meade Instruments Corp. Annual Report on Form 10-K for the year ended
February 28, 1998.
/s/ PricewaterhouseCoopers LLP
Costa Mesa, California
April 15, 1999
