AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 8, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PENTACON, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0531585
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10375 RICHMOND AVENUE, SUITE 700
HOUSTON, TEXAS 77042
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PENTACON, INC.
PENTACON, INC. 401(K) PLAN
(FULL TITLE OF THE PLAN)
BRUCE M. TATEN
SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
CORPORATE SECRETARY AND GENERAL COUNSEL
PENTACON, INC.
10375 RICHMOND AVENUE, SUITE 700
HOUSTON, TEXAS 77042
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(713) 860-1000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
CHRISTOPHER S. COLLINS
MICHAEL C. BLANEY
ANDREWS & KURTH, L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4200
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER SHARE PRICE FEE(3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per share 100,000 shares $ 3.81 $ 381,000 $ 106
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</TABLE>
(1) The number of shares of Common Stock registered herein is subject to
adjustment to prevent dilution resulting from stock splits, stock dividends
or similar transactions.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of plan interests to be offered or sold pursuant to the
Plan. In accordance with Rule 457(h)(2), no separate fee calculations are
made for plan interests.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h), based on the average of the high and low prices of
the Common Stock as reported on the New York Stock Exchange on September 2,
1999 (which is within 5 days of the filing of this Registration Statement).
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
This Registration Statement on Form S-8 hereby incorporates by reference
the contents of the following documents filed by Pentacon, Inc. (the "Company")
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act").
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1998;
(b) The Company's Transition Report on Form 10-Q for the fiscal period
ended December 31, 1998;
(c) The Company's Quarterly Report on Form 10-Q for the fiscal period
ended March 31, 1999;
(d) The Company's Quarterly Report on Form 10-Q for the fiscal period
ended June 30, 1999;
(e) The Company's Current Report on Form 8-K filed November 2, 1998;
(f) The Company's Current Report on Form 8-K/A filed November 17, 1998;
(g) The Company's Current Report on Form 8-K filed May 6, 1999; and
(h) The description of the Company's Common Stock, $.01 par value,
contained in the Company's Registration Statement on Form 8-A, as filed with the
Commission on March 5, 1998.
All documents filed by the Company and by the Plan pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the registration statement and to be a part
thereof from the date of filing of such documents. Statements contained in the
foregoing documents incorporated by reference shall be deemed to be modified or
superseded hereby to the extent that statements contained in this Prospectus, or
in any subsequently filed documents, that are amendments hereto or that are
incorporated herein by reference, shall modify or replace such statements. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
the Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES
The information required by Item 4 is not applicable to this Registration
Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The information required by Item 5 is not applicable to this Registration
Statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed
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to the best interests of the corporation, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall have
been made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
Article 7 of the Company's Amended and Restated Certificate of
Incorporation states that:
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal benefit. If the
DGCL is amended to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended. Any repeal or modification of this Section by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
The Company has entered into indemnification agreements with each of its
executive officers and directors.
In November 1997, Cary Grossman became an officer of Alatec in order to
assist in, facilitate and expedite the audit process in connection with the
initial public offering. Alatec agreed to indemnify Mr. Grossman against various
claims, damages, costs and expenses that might be incurred by him as an officer
of Alatec, including his execution of representation letters to Alatec's
accountants.
The limitations on liability in Article 7 described above would apply to
violations of the federal securities laws. However, the registrant has been
advised that in the opinion of the SEC, indemnification for liabilities under
the Securities Act of 1933 is against public policy and therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
The information required by Item 7 is not applicable to this Registration
Statement.
ITEM 8. LIST OF EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Ernst & Young LLP.
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23.2 Consent of McGladrey & Pullen, LLP.
23.3 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
24.1 Power of attorney (included in the signature pages hereto).
99.1 Pentacon, Inc. 401(k) Plan.
ITEM 9. UNDERTAKINGS
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;
(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 (1)(i) and (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 with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 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.
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 Section 15(d) of the
Securities Exchange Act of 1934 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.
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 provisions described in Item 6 of this
Registration Statement, 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 Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
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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 of 1993 and will be governed by the
final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 amendment to
its registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas, on the 7th
day of September, 1999.
Pentacon, Inc.
(Registrant)
By: /s/ MARK E. BALDWIN
Mark E. Baldwin
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Pentacon, Inc., hereby constitutes and appoints Brian Fontana, and
Bruce M. Taten (with full power to each of them to act alone) his true and
lawful attorney-in-fact and agent, with full power of sustitution, for him and
on his behalf and in his name, place and stead, in any and all capacities, to
sign, execute and file this registration statement under the Securities Act of
1933, as amended, and any or all amendments (including, without limitation,
post-effective amendments), with all exhibits and any and all documents required
to be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them, 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 in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do, if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on September 7, 1999.
SIGNATURE TITLE
/s/ MARK E. BALDWIN Chairman of the Board
Mark E. Baldwin and Chief Executive Officer (Principal
Executive Officer)
/s/ JACK L. FATICA President, Chief Operating Officer
Jack L. Fatica and Director
/s/ BRIAN FONTANA Senior Vice President and Chief
Brian Fontana Financial Officer
/s/ BRUCE M. TATEN Senior Vice President, Chief Administrative
Bruce M. Taten Officer, Corporate Secretary and
General Counsel
/s/ ROBERT M. CHISTE Director
Robert M. Chiste
/s/ CARY M. GROSSMAN Director
Cary M. Grossman
/s/ DONALD B. LIST Director
Donald B. List
Mary E. McClure Director
/s/ MICHAEL W. PETERS Director
Michael W. Peters
/s/ BENJAMIN E. SPENCE, JR. Director
Benjamin E. Spence, Jr.
Nishan Teshoian Director
/s/ CLAYTON K. TRIER Director
Clayton K. Trier
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of McGladrey & Pullen, LLP.
23.3 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
24.1 Power of attorney (included in the signature pages hereto).
99.1 Pentacon, Inc. 401(k) Plan.
EXHIBIT 5.1
[Letterhead of Andrews & Kurth L.L.P.]
[Houston, Texas 77002]
September 7, 1999
Board of Directors
Pentacon, Inc.
10375 Richmond Avenue, Suite 700
Houston, Texas 77042
Ladies and Gentlemen:
We have acted as counsel to Pentacon, Inc., a Delaware corporation
(the "Company"), in connection with the Company's Registration Statement on Form
S-8 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of the issuance of
100,000 shares of the Company's common stock (the "Shares"), par value $0.01 per
share ("Common Stock") pursuant to the Pentacon, Inc. 401(k) Plan (the "Plan").
As the basis for the opinions hereinafter expressed, we have
examined such statutes, regulations, corporate records and documents and such
other instruments as we have deemed necessary for the purposes of the opinions
contained herein. As to all matters of fact material to such opinions, we have
relied upon the representations of officers of the Company and certificates of
public officials. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
with the original documents of all documents submitted to us as copies.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized and, upon issuance by the Company and payment therefor
pursuant to the Plan, will be legally issued and will constitute fully paid and
nonassessable shares of Common Stock.
This opinion is limited in all respects to the General Corporation
Law of the State of Delaware and the laws of the United States of America
insofar as such laws are applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm name under the caption
"Exhibits" therein. In giving this consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
Andrews & Kurth L.L.P.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to Pentacon, Inc's 401(k) Plan of our report dated
December 24, 1998 with respect to the financial statements of Pentacon, Inc.
included in its Annual Report (Form 10-K) for the year ended September 30, 1998,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Houston, Texas
September 3, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use in this Registration Statement and related
prospectus on Form S-8 and incorporation by reference from the Annual Report on
Form 10-K of Pentacon, Inc. for the fiscal year ended September 30, 1998 of our
report, dated November 21, 1997, relating to the consolidated financial
statements of Alatec Products, Inc. as of December 31, 1996 and for the year
then ended, and consent to use in this Registration Statement and related
prospectus referred to above of our report dated February 20, 1998 (except for
Note 13 as to which the date is August 14, 1998), relating to the consolidated
financial statements of ASI Aerospace Group, Inc. as of December 31, 1996 and
1997 and for the years ended December 31, 1995, 1996 and 1997.
/s/ McGLADREY & PULLEN, LLP
McGLADREY & PULLEN, LLP
Pasadena, California
September 7, 1999
EXHIBIT 99.1
PENTACON, INC.
401(k) PLAN
<PAGE>
PENTACON, INC. 401(K) PLAN
TABLE OF CONTENTS
SECTION PAGE
SECTION I: INTRODUCTION
1.1 PURPOSE OF THE PLAN....................................................1
1.2 EXCLUSIVE BENEFIT OF PARTICIPANTS......................................1
1.3 RIGHTS UNDER PLAN......................................................1
1.4 PLAN MERGERS...........................................................1
1.5 PLAN A VOLUNTARY UNDERTAKING BY EMPLOYERS..............................2
1.6 AMENDMENT OF MERGED PLANS..............................................2
SECTION II: DEFINITIONS AND CONSTRUCTION OF TERMS
2.1 DEFINITIONS............................................................3
2.2 CONSTRUCTION OF TERMS.................................................11
SECTION III: PLAN ADMINISTRATION
3.1 PLAN ADMINISTRATOR....................................................12
3.2 NO BOND REQUIRED......................................................12
3.3 GENERAL POWERS AND DUTIES.............................................12
3.4 CLAIMS FOR BENEFITS...................................................13
3.5 MAINTENANCE OF ACCOUNTS AND REPORTS...................................13
3.6 INFORMATION TO BE FURNISHED...........................................14
3.7 RELIANCE ON DATA AND OPINIONS.........................................14
3.8 ACTION NON-DISCRIMINATORY.............................................14
3.9 LIABILITY OF AND INDEMNITY TO MEMBERS.................................14
3.10 INVESTMENT MANAGER....................................................15
3.11 TRUSTEE...............................................................15
SECTION IV: ELIGIBILITY AND PARTICIPATION
4.1 PLAN PARTICIPATION....................................................16
4.2 CONTINUING PARTICIPANTS...............................................16
4.3 FUTURE PARTICIPANTS...................................................16
4.4 REEMPLOYMENT..........................................................16
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SECTION V: PARTICIPANT CONTRIBUTIONS
5.1 PARTICIPANT CONTRIBUTIONS.............................................17
5.2 CHANGE IN PARTICIPANT CONTRIBUTIONS...................................17
5.3 SUSPENSION OF PARTICIPANT CONTRIBUTIONS...............................18
5.4 LIMITS ON PARTICIPANT CONTRIBUTIONS...................................18
5.5 ACTUAL DEFERRAL PERCENTAGE............................................20
5.6 ACTUAL DEFERRAL PERCENTAGE TEST.......................................20
5.7 ADJUSTMENTS AS A RESULT OF ACTUAL DEFERRAL PERCENTAGE TEST............21
5.8 MAXIMUM CONTRIBUTION PERCENTAGE.......................................22
5.9 ADJUSTMENTS FOR EXCESSIVE CONTRIBUTION PERCENTAGE.....................24
5.10 ROLLOVER CONTRIBUTIONS................................................25
SECTION VI: EMPLOYER CONTRIBUTIONS AND PLAN EXPENSES
6.1 SOURCE OF CONTRIBUTIONS...............................................26
6.2 EMPLOYER CONTRIBUTIONS................................................26
6.3 PAYMENT OF EMPLOYER CONTRIBUTIONS.....................................27
6.4 CONTRIBUTIONS BY AFFILIATED EMPLOYER..................................27
6.5 EXPENSES OF PLAN AND TRUST............................................28
6.6 RETURN OF CONTRIBUTIONS...............................................28
6.7 INITIAL MERGED PLANS..................................................28
SECTION VII: ACCOUNTS
7.1 401(K) ACCOUNTS.......................................................30
7.2 EMPLOYER ACCOUNTS.....................................................30
7.3 MONEY PURCHASE ACCOUNTS...............................................30
7.4 ROLLOVER ACCOUNTS.....................................................30
7.5 ACCOUNT INFORMATION...................................................30
SECTION VIII: INVESTMENT PROVISIONS AND ACCOUNT BALANCES
8.1 INVESTMENT FUNDS......................................................31
8.2 INVESTMENT OPTIONS....................................................31
8.3 CHANGE IN INVESTMENT OPTION...........................................32
8.4 CALCULATION OF ACCOUNT BALANCES.......................................32
8.5 VOTING COMPANY STOCK..................................................33
SECTION IX: LIMITS ON BENEFITS AND TOP-HEAVY RULES
9.1 APPLICABILITY OF SECTION..............................................34
9.2 DEFINED CONTRIBUTION LIMIT............................................34
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9.3 LIMITATION FOR TWO TYPES OF PLANS.....................................35
9.4 COMBINING OF PLANS....................................................35
9.5 SUSPENSE ACCOUNTS.....................................................35
9.6 TOP HEAVY PROVISIONS..................................................36
SECTION X: VESTING OF ACCOUNTS
10.1 401(K) AND ROLLOVER ACCOUNTS..........................................39
10.2 EMPLOYER ACCOUNTS.....................................................39
10.3 TERMINATION OF PLAN OR EMPLOYER CONTRIBUTIONS.........................40
SECTION XI: DISTRIBUTIONS, FORFEITURES, WITHDRAWALS AND LOANS
11.1 DISTRIBUTIONS.........................................................41
11.2 FORFEITURES...........................................................43
11.3 AUTOMATIC CASHOUTS....................................................44
11.4 LOANS.................................................................45
11.5 ROLLOVER ACCOUNT WITHDRAWALS..........................................47
11.6 HARDSHIP WITHDRAWALS..................................................47
11.7 AGE 59 1/2 WITHDRAWALS................................................49
11.8 DIRECT ROLLOVER DISTRIBUTIONS.........................................50
11.9 30-DAY WAIVER.........................................................51
11.10 PRERETIREMENT SURVIVOR ANNUITY........................................51
SECTION XII: BENEFICIARY DESIGNATIONS
12.1 DESIGNATION OF BENEFICIARIES..........................................54
SECTION XIII: SPECIAL PAYMENT PROVISIONS
13.1 PAYMENTS TO MINORS AND INCOMPETENTS...................................55
13.2 NON-ASSIGNABILITY OF RIGHTS...........................................55
SECTION XIV: AFFILIATED COMPANIES
14.1 ADOPTION OF PLAN......................................................56
14.2 WITHDRAWAL FROM PLAN..................................................56
14.3 TERMINATION OF EMPLOYER PARTICIPATION BY BOARD........................57
SECTION XV: AMENDMENT AND TERMINATION
15.1 RIGHT TO AMEND OR TERMINATE...........................................58
15.2 RESTRICTIONS ON AMENDMENT.............................................59
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15.3 EFFECT OF DISSOLUTION OR EMPLOYER MERGER..............................59
15.4 EFFECT OF PLAN MERGER, CONSOLIDATION OR TRANSFER OF ASSETS............59
15.5 DISTRIBUTION UPON TERMINATION OF PLAN.................................60
SECTION XVI: GENERAL PROVISIONS
16.1 EMPLOYER'S RIGHTS.....................................................61
16.2 NOTICE OF ADDRESS.....................................................61
16.3 COPIES OF PLAN AVAILABLE..............................................61
16.4 TITLES AND HEADINGS...................................................61
16.5 COUNTERPARTS..........................................................62
16.6 USERRA CREDIT.........................................................62
16.7 APPLICABLE LAW........................................................62
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PENTACON, INC.
401(K) PLAN
The Pentacon, Inc. 401(k) Plan is hereby established effective as of
September 1, 1999, by the merger and restatement of the various plans of the
Company's subsidiaries. The terms and provisions of the Plan are as follows:
SECTION I
INTRODUCTION
1.1 PURPOSE OF THE PLAN. The purpose of this Plan is to provide a
retirement benefit for eligible Employees through a systematic matching 401(k)
savings program.
1.2 EXCLUSIVE BENEFIT OF PARTICIPANTS. This Plan has been adopted for the
exclusive benefit of the Participants and their Beneficiaries. So far as
possible, this Plan shall be interpreted in a manner consistent with this intent
and with the intention of the Company that this Plan shall satisfy those
provisions of ERISA and the Code relating to qualified employee profit sharing
plans with a Section 401(k) feature.
1.3 RIGHTS UNDER PLAN. The Plan shall not give any Employee or any other
person any legal or equitable right as against any Employer, the Plan
Administrator or the Trustee, or in the assets of the Plan, except and to the
extent that such right is specifically provided for in this Plan or by
applicable law.
1.4 PLAN MERGERS. The plans of one or more of Affiliates may be merged
into the Plan from time to time. Following such merger all rights and benefits
under the Merged Plans shall be determined under the terms and provisions of the
Plan; however, nothing herein shall operate or be construed to deprive any
Participant of any protected benefit, within the meaning of Code Section
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411(d)(6) and the regulations thereunder, he may have had under a Merged Plan as
in effect immediately prior to its merger, except as permitted by applicable
law.
Unless and until changed by the Participant under this Plan, all
contribution elections, distribution elections and beneficiary designations made
by a Participant under a Merged Plan shall continue without interruption or
change under this Plan.
The list of Merged Plans and the effective date of their mergers is
set forth on Attachment B, as it may be amended from time to time by the
Committee.
1.5 PLAN A VOLUNTARY UNDERTAKING BY EMPLOYERS. This Plan is strictly a
voluntary undertaking on the part of each Employer and shall not be deemed or
construed to constitute a contract between any Employer and any Employee or
other person or to be a consideration for or inducement to, or a condition of,
the employment of any Employee. Nothing contained in this Plan shall be deemed
to give any Employee the right to be retained in the service of any Employer or
interfere in any way with the right of any Employer to discharge any Employee at
any time.
1.6 AMENDMENT OF MERGED PLANS. Unless a Merged Plan document has already
been amended (or is a prototype document that is subsequently amended with an
earlier effective date) the provisions of this Plan which are required by the
Code, Treasury Regulations or other applicable law to have an effective date
prior to the date a Merged Plan is merged into this Plan, are hereby deemed to
be also made with respect to such Merged Plan document, effective for all
purposes as of the earlier date such change is required to be effective or, if
elected by operation of the Merged Plan to have an earlier effective date, as of
such earlier operational effective date.
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SECTION II
DEFINITIONS AND CONSTRUCTION OF TERMS
2.1 DEFINITIONS. For purposes of the Plan, the following words and phrases
shall have the meanings stated below unless a different meaning is clearly
required by the context or otherwise specified in the instruments executed by an
Affiliate in adopting the Plan and the Trust Agreement pursuant to Section XIV:
(a) ACCOUNT means an Employer, 401(k), Money Purchase, and/or Rollover
Account, as the case may be, as provided in Section VII.
(b) AFFILIATE means any corporation which is a member of a "controlled
group" of corporations with an Employer, any trade or business under "common
control" with any Employer and any member of an "affiliated service group" with
an Employer as determined under Code Sections 414(b), (c) and (m), respectively,
or as required by regulations under Code Section 414(o). For purposes of Section
IX only, said determinations shall be modified where necessary in accordance
with Code Section 415(h).
(c) ANNUITY STARTING DATE means the first day of the first period for
which an amount is payable as an annuity, or in the case of a benefit not
payable in the form of an annuity, the first day on which all events have
occurred which entitle the Participant to such benefit.
(d) BENEFICIARY means the person designated by a Participant or by the
Plan pursuant to Section 12.1 to receive any amounts payable under the Plan upon
his death.
(e) BOARD means the Board of Directors of the Company.
(f) BREAK IN SERVICE means an eligibility or vesting Year of Service
during which the Employee is credited with less than 501 Hours of Service. For
purposes of determining a Break
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in Service only, an Employee shall be deemed to have completed Hours of Service
for periods of absence from work (1) by reason of the pregnancy of the Employee,
(2) by reason of the birth of a child of the Employee, (3) by reason of the
placement of a child in connection with the adoption of the child by the
Employee, or (4) for purposes of caring for the child during the period
immediately following the birth or placement for adoption. During the period of
such absence, the Employee shall be treated as having completed (1) the number
of Hours of Service that normally would have been credited but for the absence,
or (2) if the normal Hours of Service worked are unknown, eight Hours of Service
for each normal workday during the absence. The total number of Hours of Service
required to be treated as completed for any such period of absence shall not
exceed 501 hours and those Hours of Service shall be credited only (1) in the
year in which the absence begins for one of the permitted reasons, if the
crediting is necessary to prevent a Break in Service in that year, or (2) in the
following year. In addition, the Employers shall comply with the Family and
Medical Leave Act of 1993 in determining Breaks in Service and terminations of
employment.
(g) CODE means the Federal Internal Revenue Code of 1986 as amended
from time to time and any subsequently adopted Federal Internal Revenue Code.
References in the Plan to sections of the Code shall include corresponding
sections in any subsequently adopted Federal Internal Revenue Code.
(h) COMPANY means Pentacon, Inc.
(i) COMPANY STOCK means the common stock of the Company.
(j) COMPENSATION means, with respect to an Employee, the total
compensation of the Employee for Form W-2 purposes for the applicable payroll
period and while in the Eligible
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Class, including any elective salary reduction contributions excluded from the
Employee's gross income pursuant to Code Section 125 or 402.
In no event, however, shall the Compensation of a Participant
considered for Plan purposes for any Plan Year exceed $160,000, as such amount
may be adjusted by Code Sections 401(a)(17) and 415(d). In the event of a Plan
Year of less than 12 months, the annual maximum for such year shall equal the
product of the annual maximum for a full year and the fraction, the numerator of
which is the number of months during the Plan Year and the denominator of which
is 12.
(k) DISABILITY means a total and permanent disability suffered by a
Participant which, in the opinion of the Plan Administrator (which opinion shall
be conclusive for purposes of the Plan) prevents such Participant from
continuing his work with the Employers.
(l) ELIGIBLE CLASS means, with respect to an Employee, that
(1) he is employed by an Employer; and
(2) he is not (i) a member of or represented by a collective
bargaining unit that has a bargaining agreement with the Employer,
unless such bargaining agreement provides for the participation of its
members in the Plan, (ii) a nonresident alien with no U.S. source
income, or (iii) a Leased Employee.
(m) EMPLOYEE means any individual who is an employee of an Employer or
Affiliate for purposes of Section 3121(d) of the Code and shall also include any
Leased Employee unless, and to the extent, regulations under Code 414(m) permit
otherwise.
(n) EMPLOYER means the Company and each Affiliate which has adopted
and is participating in the Plan pursuant to Section XV.
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(o) EMPLOYER ACCOUNT means an account described in Section 7.2.
(p) ENTRY DATE means the first day of each month on or following the
date an Employee satisfies the eligibility requirements of the Plan.
(q) ERISA means Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(r) 401(K) ACCOUNT means an account described in Section 7.1.
(s) HIGHLY COMPENSATED EMPLOYEE means an Employee or former Employee
who is a highly compensated employee as defined in Code Section 414(q).
Generally, any Employee or former Employee is considered a Highly Compensated
Employee if during the Plan Year or the preceding Plan Year such Employee or
former Employee:
(i) was at any time a "5% owner." "5% owner" means any person who
owns (or is considered as owning within the meaning of Code Section
318) more than 5% of the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated business,
any person who owns more than 5% of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Section 414(b), (c), and
(m) shall be treated as separate employers; or
(ii) received ss.415 Compensation from the Employer in excess of
$80,000 (as adjusted by Code Section 415(d)); and if elected by the
Employer for such preceding year, was in the top 20% of the Employees
when ranked on the basis of ss.415 Compensation paid during the
previous year,
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In determining who is a Highly Compensated Employee the Company hereby makes a
top paid group election and also a calendar year data election. The effect of
these elections is that an Employee (who is not a 5-percent owner at any time
during the determination year or the look-back year) with compensation in excess
of $80,000 (as adjusted) for the look-back year is a Highly Compensated Employee
only if the Employee was in the top-paid group for the look-back year and that
the look-back year is the calendar year beginning with or within the look-back
year.
(t) HOUR OF SERVICE means each hour for which an Employee is paid, or
entitled to payment, by an Employer or an Affiliate by reason of: (1) the
performance of duties; and (2) the non-performance of duties due to vacation,
holiday, Leave of Absence, etc., (however, no more than 501 Hours of Service
shall be required to be credited to an Employee under this subparagraph (2) as a
result of any single continuous period during which such Employee performs no
duties); and (3) a back pay award or agreement with the Employer or an Affiliate
irrespective of mitigation of damages.
An Employee shall be credited with each Hour of Service he is paid
or entitled to a payment; however, an Employee for whom actual records of hours
worked are not maintained shall be credited with 45 Hours of Service for each
week during which such Employee is paid or entitled to payment.
Crediting Hours of Service to the applicable computation period as
well as calculating Hours of Service for the non-performance of duties shall be
done pursuant to Department of Labor Regulations ss.2530.200b-2(b) and (c) (as
presently constituted and as amended from time to time), which are herein
incorporated by reference.
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(u) LEASED EMPLOYEE shall mean any person who (1) is not a common-law
employee of an Employer and (2) pursuant to an agreement between the Employer
and any other person, has performed services for the Employer (or for the
Employer and related persons determined in accordance with Section 414(n)(6) of
the Code) on a substantially full time basis for a period of at least one year,
and such services are performed under the primary direction or control of the
recipient.
(v) LEAVE OF ABSENCE means a temporary absence from service due to
sickness, accident, military service, pregnancy, birth of a child, adoption of a
child, caring for a child during the period immediately following the birth or
adoption of a child or any other temporary absence authorized by the Employer or
an Affiliate or required by applicable law, including the Family and Medical
Leave Act; provided, however, all Leaves of Absence shall be granted on a non
discriminatory basis to Employees similarly situated.
(w) MERGED PLAN means a plan merged to form this Plan or subsequently
merged into the Plan pursuant to Section 1.4.
(x) MONEY PURCHASE PLAN ACCOUNT means an account described in Section
7.3.
(y) NET PROFITS means, with respect to the Employers, the current
and/or accumulated earnings of the Employers as shown by their books and
accounts for general corporate purposes in accordance with generally accepted
accounting principles.
(z) NON-HIGHLY COMPENSATED EMPLOYEE means an Employee or former
Employee who is not a Highly Compensated Member.
(aa) NORMAL RETIREMENT AGE means, with respect to a Participant, the
date he reaches age 65.
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(bb) PARTICIPANT means a person who has an Account under the Plan.
(cc) PLAN means the "Pentacon, Inc. 401(k) Plan" as set forth herein
and as it may hereafter be amended.
(dd) PLAN ADMINISTRATOR means such corporation and/or individual(s) as
may from time to time be designated by the Chief Executive Officer of the
Company to serve as administrator of the Plan.
(ee) PLAN YEAR means the calendar year; provided, however, each Merged
Plan shall have a short plan year ending on the day immediately preceding the
effective date of its merger into this Plan.
(ff) ROLLOVER ACCOUNT means an Account described in Section 7.4.
(gg) TRUST means a trust established to hold assets of the Plan.
(hh) TRUSTEE means the trustee of a trust established pursuant to the
Plan.
(ii) VALUATION DATE means each business day of the Plan Year on which
the principal securities exchanges are open. For purposes of effecting Account
transactions, the applicable Valuation Date shall be the date the mutual fund
units, shares of Company Stock, or other property, as the case may be, is
debited or credited to the Account of the affected Participant.
(jj) YEAR OF SERVICE means, for vesting purposes, a Plan Year during
which the Employee is credited with at least 1,000 Hours of Service, and, for
eligibility purposes, the period of 12 consecutive months commencing on the date
on which such Employee first completes (or, following a Break in Service, again
completes) an Hour of Service; provided, however, if the Employee does not incur
a Break in Service as of the end of such initial 12-month period, the
eligibility computation period for such Employee shall thereafter be the Plan
Year which includes
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the first anniversary of the initial eligibility computation period and each
succeeding Plan Year thereafter until the Plan Year such Employee incurs a Break
in Service. An Employee who completes 1,000 Hours of Service in his initial
eligibility computation period and the Plan Year in which such initial period
began shall be credited with two Years of Service for eligibility purposes.
Individuals who become Employees of the Company or an Affiliate in
conjunction with a business acquisition shall be given credit for their years of
service with such prior employer; provided, however, (i) no more than five such
years of service shall be credited and (ii) such Employees shall not be in the
Eligible Class until such date the Plan Administrator determines it is
administratively practical for them to enter the Plan, which shall not be later
than one year after the acquisition date.
Years of Service completed before a Break in Service shall be
excluded if the Employee did not have any vested right to his Employer Account
at the time of such Break in Service and the number of consecutive one-year
Breaks in Service equals or exceeds the greater of five or his aggregate Years
of Service credited before such Breaks in Service.
Any Employee who terminates employment and is reemployed by an
Employer or Affiliate shall be credited with his pre-termination Years of
Service on the date of his reemployment, unless such prior service is excluded
in accordance with this section, and such prior Years of Service shall be
aggregated with his Years of Service completed after his reemployment for all
purposes under the Plan.
Notwithstanding the foregoing however, if upon the merger of a
Merged Plan into the Plan the plan year of the Merged Plan is changed to the
calendar year, an employee under the Merged Plan who is credited with the 1,000
Hour of Service in both the vesting computation of the
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Merged Plan as in effect before the merger, and the first full vesting
computation under the Plan following the merger, shall receive two Years of
Service.
2.2 CONSTRUCTION OF TERMS. Whenever appropriate herein, words used in
the singular shall be construed to include the plural and the plural to include
the singular and the use of any one gender to include any other.
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SECTION III
PLAN ADMINISTRATION
3.1 PLAN ADMINISTRATOR. The Company shall be the named fiduciary and
administrator of the Plan and the Company's duties as the administrator shall be
performed by a committee appointed by the Chief Executive Officer of the Company
(the "Plan Administrator"). A member of the Plan Administrator may resign by
giving written notice to the Chief Executive Officer of the Company, and the
Chief Executive Officer may remove a member of the Plan Administrator upon
written notice. The Chief Executive Officer shall appoint a successor to any
Plan Administrator that resigns or is removed if it intends to continue the
Plan. The Company shall furnish to the Trustee a copy of its resolution
appointing the Plan Administrator or any successor Plan Administrator. The
Trustee shall be entitled to rely upon the identity and authority of the Plan
Administrator as disclosed by such resolution until receipt by it from the
Company of written revocation of such authorization.
3.2 NO BOND REQUIRED. The Plan Administrator shall serve without bond or
other security, except as otherwise provided by law.
3.3 GENERAL POWERS AND DUTIES. The Plan Administrator shall have complete
control of the administration of this Plan, with all powers necessary to enable
it to carry out its duties in that respect. Not in limitation but in
amplification of the foregoing, the Plan Administrator shall have the power to
interpret or construe this Plan, to determine all questions that may arise
hereunder as to the eligibility of employees and the status and rights of
Participants and others, adopt by-laws for the conduct of its affairs and make
rules and regulations for the administration of the Plan which are not
inconsistent with the terms and provisions hereof, to give directions to the
Trustee in regard to the investment of the Trust and such other powers and
duties relating to the administration of the
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Plan as are conferred or imposed upon it hereunder and under the Trust. The Plan
Administrator shall at all times comply with the provisions of ERISA and the
Code relating to fiduciaries.
3.4 CLAIMS FOR BENEFITS. Unless waived by the Plan Administrator, persons
claiming benefits under the Plan shall be required to file a written application
for the same with the Plan Administrator. The Plan Administrator shall make all
determinations as to the identity and right of any person to a benefit, and the
proper amount thereof, under this Plan. Any denial by the Plan Administrator of
the claim for benefits under the Plan by a Participant or other person shall be
stated in writing by the Plan Administrator and delivered or mailed to the
Participant or other person, and such notice shall set forth the specific
reasons for the denial, written to the best of the Plan Administrator's ability
in a manner calculated to be understood by such Participant or other person. In
addition, the Plan Administrator shall afford a reasonable opportunity to any
Participant or other person whose claim for benefits has been denied for a
review of the decision denying the claim. The payment of any benefit in
accordance with the Plan Administrator's determination shall constitute a
complete discharge of all obligations on account thereof. No payment shall be
made under this Plan until it has been authorized by the Plan Administrator. The
Plan Administrator may require any payee, as a condition to making such payment,
to execute a receipt and release in such form as the Plan Administrator shall
determine.
3.5 MAINTENANCE OF ACCOUNTS AND REPORTS. The Plan Administrator shall
cause to be kept accounts showing the fiscal transactions of the Plan. The Plan
Administrator shall, upon request, render a report showing in reasonable detail
the assets and liabilities of the Plan and giving a brief account of the
operation of the Plan for the past year to the Board. Such report shall be filed
in the office of the Plan Administrator where it shall be open to inspection of
any Participant.
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3.6 INFORMATION TO BE FURNISHED. To enable the Plan Administrator to
perform its functions, each Employer shall supply full and timely information to
the Plan Administrator on all matters relating to the compensation of each of
its Employees who are Participants, their death or other cause for termination
of employment, and such other pertinent facts as the Plan Administrator may
require.
Each person claiming a benefit under the Plan shall furnish the
Plan Administrator and/or Trustee information and proof as to all facts which
the Plan Administrator and Trustee may require.
3.7 RELIANCE ON DATA AND OPINIONS. The Plan Administrator shall be
entitled to rely on all data and information furnished to it by any Employer,
the Participants and any other person entitled to receive benefits under the
Plan. Each Employer and the Plan Administrator shall be entitled to rely upon
all certificates and reports furnished by any accountant designated by the Plan
Administrator, and upon all reports, certificates and opinions furnished by any
physician selected by the Employer, and upon all opinions given by any attorney
selected by the Plan Administrator.
3.8 ACTION NON-DISCRIMINATORY. The Plan Administrator shall not take any
action whatsoever which would result in benefiting one Participant or group of
Participants at the expense of another or in discrimination as between
Participants similarly situated, nor shall it apply different rules to
substantially similar sets of facts.
3.9 LIABILITY OF AND INDEMNITY TO MEMBERS. The Company shall protect,
indemnify and defend each Employee who is serving as the Plan Administrator (and
each former Employee who previously served as the Plan Administrator) from and
against all claims, liabilities, costs and expenses, including attorneys' fees,
which may be asserted against him, arising out of or resulting
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from his action or omission to act in his capacity as a member of the Plan
Administrator, except for his own gross negligence or willful misconduct.
However, nothing herein shall be construed or interpreted as constituting an
indemnification by the Company to any Plan Administrator who is not an Employee.
3.10 INVESTMENT MANAGER. The Plan Administrator may appoint (and remove)
one or more Investment Managers, within the meaning of ERISA Section 3(38), to
manage any or all of the assets of the Trust.
3.11 TRUSTEE. The Plan Administrator and/or Chief Executive Officer of the
Company may appoint (and remove) one or more Trustees to hold any or all of the
assets of the Plan and to enter into such trust agreements on behalf of the
Company, which shall be deemed a part of the Plan.
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SECTION IV
ELIGIBILITY AND PARTICIPATION
4.1 PLAN PARTICIPATION. Participation in the 401(k) feature of the Plan
shall be entirely voluntary for each eligible Employee. Participation in the
Employer's nonmatching, discretionary profit sharing contributions, if any,
shall be automatic.
4.2 CONTINUING PARTICIPANTS. Each person who was a Participant in a Merged
Plan shall automatically continue as a Participant in the Plan.
4.3 FUTURE PARTICIPANTS. Each other Employee may become a Participant in
the Plan on any Entry Date on which he is in the Eligible Class, age 18 or
older, and has completed either a Year of Service or been an Employee for a
continuous period of three months, whichever occurs first, by filing a salary
reduction election form with his Employer prior to the payroll period as of
which he desires such election to become effective. The election form shall
contain such information as the Plan Administrator shall deem necessary or
desirable in the operation and administration of the Plan.
Notwithstanding the foregoing, each Employee who is eligible to
make 401(k) contributions (whether or not he chooses to do so) shall be a
Participant, subject to the provisions of Section 6.2, with respect to any
Employer discretionary profit sharing contributions.
4.4 REEMPLOYMENT. A former Employee shall automatically again be eligible
to participate in the Plan on his reemployment date if he is in the Eligible
Class. Each other reemployed Employee shall again be eligible for participation
in accordance with Section 4.3.
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SECTION V
PARTICIPANT CONTRIBUTIONS
5.1 PARTICIPANT CONTRIBUTIONS. Subject to the further provisions of the
Plan, a Participant may make contributions to the Plan by salary reduction for
each payroll period during which he is in the Eligible Class in an amount equal
to not less than 1% nor more than 15% of his Compensation as designated (in
whole percentages only) by the Participant.
Participant contributions shall be paid by the Employer to the
Trustee as soon as reasonably practicable, and in no event later than 15
business days following the month in which they were withheld. Participant
contributions are intended to qualify under Code Section 401(k) as salary
reduction contributions deemed to have been made by the Employer for federal
income tax purposes.
5.2 CHANGE IN PARTICIPANT CONTRIBUTIONS. Within the limitations of Section
5.1, a Participant may increase or decrease the designated percentage of his
Compensation to be contributed to the Plan as a 401(k) contribution effective as
of the first day of the payroll period that is administratively practical
following the receipt of proper notice by his Employer of such change. In
addition, the Plan Administrator may prospectively reduce the contribution
percentage for the Highly Compensated Employee group (on a uniform basis)
effective as of any future payroll period, whenever it believes such reduction
will be necessary for such group to meet the nondiscrimination testing
requirements of Section 401(k). Unless changed in accordance with the terms of
this Plan, the percentage designated by a Participant shall continue in effect
notwithstanding any change in his Compensation and the amount of his
contribution shall automatically be adjusted to reflect changes in his
Compensation.
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5.3 SUSPENSION OF PARTICIPANT CONTRIBUTIONS. A Participant may suspend his
401(k) contributions effective as of the first day of the payroll period that is
administratively practical following the receipt of proper notice by his
Employer of such suspension. A Participant who has voluntarily suspended his
contributions may, if he is still in the Eligible Class, resume such suspended
contributions to the Plan as of the first Entry Date that is at least six months
after the effective date of such suspension by giving proper notice of such
resumption to his Employer prior to the payroll period such resumption of
contributions is to become effective.
A Participant's contributions shall be automatically suspended
whenever such Participant is not in the Eligible Class.
5.4 LIMITS ON PARTICIPANT CONTRIBUTIONS. The following provisions in
Sections 5.4 through 5.9 shall control over any other provisions in the Plan in
conflict with the same:
(a) A Participant's 401(k) contributions shall in no event exceed
$10,000 for the taxable year of the Participant. This dollar limitation shall be
adjusted annually as provided in Code Section 415(d) pursuant to regulations.
The adjusted limitation shall be effective as of January 1 of each calendar
year.
(b) In the event that the dollar limitation provided for in (a) is
exceeded, the Plan Administrator shall direct the Trustee to distribute such
excess amount, and any income (or loss) allocable to such amount (as provided in
(d) below), to the Participant not later than the April 15 following the close
of the Participant's taxable year.
(c) In the event that a Participant is also a participant in (1)
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), (2) a simplified employee pension (as defined in Code Section 408(k)),
or (3) a salary reduction arrangement (within the meaning of Code
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Section 3121(a)(5)(D)) and the elective deferrals, as defined in Code Section
402(g)(3), made under such other arrangement(s) and this Plan cumulatively
exceed $10,000 (or such amount adjusted annually as provided in Code Section
415(d) pursuant to regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of his taxable year,
notify the Plan Administrator in writing of such excess and request that his
401(k) contributions under this Plan be reduced by an amount specified by the
Participant. Such amount shall then be distributed in the same manner as
provided in (b). And, to the extent Employer matching contributions have been
made with respect to an excess deferral, such matching amount (and income or
loss) shall be forfeited, notwithstanding anything in the Plan to the contrary.
(d) The income (or loss) allocable to returnable contributions
shall equal the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss for the period between the end of the Plan Year and the
date of distribution. Income includes all earnings and appreciation, including
such items as interest, dividends, rent, royalties, gains from the sale of
property, appreciation in the value of stocks, bonds, annuity and life insurance
contracts, and other property, without regard to whether such appreciation has
been realized.
The income (or loss) allocable to returnable contributions for the
Plan Year is determined by multiplying the income (or loss) for the Plan Year
allocable to employee contributions, if any, Employer matching contributions,
and amounts treated as matching contributions (whichever is applicable) by a
fraction. The numerator of the fraction is the amount of returnable
contributions made on behalf of the employee for the Plan Year. The denominator
of the fraction is the total account balance of the employee attributable to
employee contributions, matching contributions and amounts treated as matching
contributions as of the end of the Plan Year,
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reduced by the gain allocable to such total amount for the Plan Year and
increased by the loss allocable to such total amount for the Plan Year.
5.5 ACTUAL DEFERRAL PERCENTAGE. For purposes of this Section, "Actual
Deferral Percentage" means, with respect to the Highly Compensated Employee
group and Non-Highly Compensated Employee group for a Plan Year, the average of
the ratios, calculated separately for each member in such group, of the amount
of 401(k) contributions allocated to each member's 401(k) Account (unreduced by
distributions made pursuant to Sections 5.4(b) and 5.4(d)) for such Plan Year,
to such Participant's Compensation for such Plan Year.
5.6 ACTUAL DEFERRAL PERCENTAGE TEST.
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from 401(k) contributions to a Participant's 401(k) Account
shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Employee group shall not be more than the "Actual
Deferral Percentage" of the Non- Highly Compensated Employee group
for the prior Plan Year multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Employee group over the "Actual Deferral
Percentage" for the Non Highly Compensated Employee group for the
prior Plan Year shall not be more than two percentage points.
Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Employee group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Employee group
multiplied by two. This alternative limitation test cannot be used
to satisfy the Actual Deferral Percentage test and the
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Contribution Percentage Test of Section 5.8 except as otherwise
provided by regulations.
If the Company has elected to use the Current Year Testing
method, then, in calculating the aggregate limit for a particular
Plan Year, the Non-Highly Compensated Employees' ADP and ACP for
that Plan Year, instead of for the prior Plan Year, is used.
(b) For the purposes of Sections 5.6(a) and 5.7, a Highly Compensated
Employee and a Non-Highly Compensated Employee shall include any Employee
eligible to make a deferral election pursuant to Section 5.1, whether or not
such deferral election was made.
(c) For the purposes of this Section, if two or more plans which
include cash or deferred arrangements are considered one plan for the purposes
of Code Section 401(a)(4) or 410(b), the cash or deferred arrangements included
in such plans shall be treated as one arrangement.
(d) For the purposes of this Section, if a Highly Compensated Employee
is a member under two or more cash or deferred arrangements of the Employer, all
such cash or deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the deferral percentage with respect
to such Highly Compensated Employee.
(e) Notwithstanding the above, the determination and treatment of
401(k) contributions and "Actual Deferral Percentage" of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
5.7 ADJUSTMENTS AS A RESULT OF ACTUAL DEFERRAL PERCENTAGE TEST. In the
event that the initial allocations of the contributions made pursuant to the
Plan do not satisfy one of the tests set forth in Section 5.6(a), then on or
before the 15th day of the third month following the end of the
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Plan Year, but in no event later than the close of the following Plan Year, the
Plan Administrator shall direct the Trustee to distribute to the Highly
Compensated Employee group the aggregate amount of excess 401(k) contributions
(and any income allocable to such contributions as provided in (d) of Section
5.4), beginning with the Participants having the highest dollar amount of 401(k)
contributions (after reduction for any excess 401(k) contributions), reducing
such Participants' contributions pro rata to the next highest dollar amount of
401(k) contributions (and continuing with the next highest group and so on)
until the aggregate excess amount is distributed.
The amount of excess deferrals to be distributed with respect to a
Highly Compensated Employee for a taxable year will be reduced by any excess
contributions previously distributed or recharacterized for the Plan Year
beginning with or within such taxable year.
5.8 MAXIMUM CONTRIBUTION PERCENTAGE.
(a) The "Contribution Percentage" for the Highly Compensated
Employee group shall not exceed the greater of:
(1) 125% of such percentage for the Non-Highly Compensated
Employee group for the prior Plan Year; or
(2) the lesser of 200% of such percentage for the Non-Highly
Compensated Employee group for the prior Plan Year, or such
percentage for the Non-Highly Compensated Employee group for the
prior Plan Year plus two percentage points, or such lesser amount
determined pursuant to Regulations to prevent the multiple use of
this alternative limitation with respect to any Highly Compensated
Employee.
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If the Company has elected to use the Current Year Testing
method, then, in calculating the aggregate limit for a particular
Plan Year, the Non-Highly Compensated Employees' ADP and ACP for
that Plan Year, instead of for the prior Plan Year, is used.
(b) For the purposes of this Section and Section 5.9, "Contribution
Percentage"
for a Plan Year means, with respect to the Highly Compensated Employee group and
Non-Highly Compensated Employee group, the average of the ratios (calculated
separately for each member in each group) of:
(1) the sum of the Employer matching contributions and employee
after tax contributions (if any) contributed under the Plan on
behalf of each such member for such Plan Year; to
(2) the Participant's Compensation for such Plan Year.
(c) For purposes of this Section, if two or more plans of the
Employer to which matching contributions, Employee contributions, or elective
deferrals are made are treated as one plan for purposes of Code Section 410(b),
such plans shall be treated as one plan for purposes of this Section 5.8. In
addition, if a Highly Compensated Employee participates in two or more plans
described in Code Section 401(a) or arrangements described in Code Section
401(k) which are maintained by the Employer to which such contributions are
made, all such contributions shall be aggregated for purposes of this Section
5.8.
(d) For purposes of Section 5.8(a) and 5.9, a Highly Compensated
Employee and Non-Highly Compensated Employee shall include any Employee eligible
to have matching contributions allocated to his account for the Plan Year.
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5.9 ADJUSTMENTS FOR EXCESSIVE CONTRIBUTION PERCENTAGE.
(a) In the event that the "Contribution Percentage" for the Highly
Compensated Employee group exceeds the "Contribution Percentage" for the
Non-Highly Compensated Employee group pursuant to Section 5.8(a), the Plan
Administrator (on or before the 15th day of the third month following the end of
the Plan Year, but in no event later than the close of the following Plan Year)
shall direct the Trustee to distribute to the Highly Compensated Employee group
the amount of "Excess Aggregate Contributions" (and any income or loss allocable
to such contributions as provided in (d) of Section 5.4), beginning with the
Participant(s) with the highest dollar amount of such contributions (after
distribution of any Excess Aggregate Contributions), reducing such Participants'
contributions pro rata to the next highest dollar amount of contributions (and
continuing with the next highest group and so on) until the aggregate amount of
such excess is distributed. However, no forfeiture may be allocated to a Highly
Compensated Employee whose contributions are reduced pursuant to this Section.
(b) For the purposes of this Section, "Excess Aggregate
Contributions" means, with respect to any Plan Year, the excess of:
(1) the aggregate amount of contributions pursuant to Sections
5.8(b)(1) and 5.8(c) actually made on behalf of the Highly
Compensated Employee group for such Plan Year, over
(2) the maximum amount of such contributions permitted under
the limitations of Section 5.8(a).
(c) The determination of the amount of "Excess Aggregate
Contributions" with respect to any Plan Year shall be made after:
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(1) first determining the excess contributions pursuant to
Section 5.4(a), and
(2) then determining the excess annual allocations pursuant to
Section 5.6 (a).
5.10 ROLLOVER CONTRIBUTIONS. An Employee in the Eligible Class who has
received a distribution from a plan that is qualified under Code Section 401(a)
may rollover (including a direct rollover within the meaning of the Code Section
401(a)(31)) in the form of check or by wire transfer, and if approved by the
Plan Administrator, in the form of a plan note) all or part of the taxable
portion of such distribution into the Plan provided that (1) such rollover meets
the requirements of Code Section 402(a) concerning qualified rollover treatment
and (2) the Employee completes the administrative forms necessary to effectuate
such rollover as determined by the Plan Administrator.
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SECTION VI
EMPLOYER CONTRIBUTIONS AND PLAN EXPENSES
6.1 SOURCE OF CONTRIBUTIONS. All Employer and Participant 401(k)
contributions to the Plan shall be made only out of the Employer's Net Profits
(the intent being that the Plan qualify as a profit sharing plan); however, if
there are no Net Profits, then in accordance with Code Section 401(a)(27) the
Board, in its sole discretion, may authorize all or part of such contributions
to be made notwithstanding the lack of Net Profits, provided the Plan still
qualifies as a profit sharing plan.
6.2 EMPLOYER CONTRIBUTIONS. Subject to the further provisions of the Plan,
the Employers shall contribute to the Plan on behalf of each Participant who
made 401(k) contributions to the Plan with respect to a payroll period an amount
equal to 50% of such Participant's 401(k) contributions for such payroll period,
but, except as provided below, excluding any 401(k) contributions made in excess
of 6% of his Compensation for such payroll period. Notwithstanding the
foregoing, a Participant who is an Employee in the Eligible Class at the end of
the Plan Year, or who terminated from the Eligible Class during the Plan Year
due to death or Disability, shall receive an Employer matching contribution at
the end of the Plan Year equal to (i) 50% of the Participant's aggregate 401(k)
contributions for the Plan Year not in excess of 6% of his Compensation for the
payroll periods during the Plan Year he was eligible to participate, minus (ii)
the amount of Employer matching contributions already made for the Participant
that Plan Year.
Subject to the further provisions of the Plan, the Employers shall
contribute out of their Net Profits on behalf of each Participant who is in the
Eligible Class at the end of the applicable Plan Year (or terminated from the
Eligible Class during such Plan Year due to death, Disability or
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after attaining his Normal Retirement Age) an amount equal to such percentage,
if any, of the Participant's Compensation received while in the Eligible Class
and eligible to contribute for the applicable Plan Year as may be determined by
the Board in its sole discretion for that Plan Year. The Board may direct that
all or a portion of any such discretionary profit sharing contribution must be
invested in the Company Stock Fund on such terms and conditions as it may
establish.
The amount of Employer contributions otherwise to be made at any
specified time shall be reduced by the amount of forfeitures then existing under
the Plan, which shall be applied and treated as if they were Employer
contributions for Plan purposes.
6.3 PAYMENT OF EMPLOYER CONTRIBUTIONS. Payments of Employer contributions
with respect to any Plan Year shall be made in cash, wire transfer or, to the
extent such contribution is a discretionary Employer contribution to be invested
in the Company Stock Fund (as defined in Attachment A), in shares of Company
Stock, or in any combination thereof, as determined in the discretion of the
Company, and shall be paid over to the Trustee at such times as directed by the
Company but in all events on or before the due date, including any extensions
thereof, for filing the Company's federal income tax return for the taxable year
which ends coincident with the end of such Plan Year.
6.4 CONTRIBUTIONS BY AFFILIATED EMPLOYER. If any Employer which is part of
an affiliated group, as defined in Code Section 1504, is prevented from making a
contribution which it would otherwise have made under the Plan, by reason of
having insufficient Net Profits, then so much of the contribution which such
Employer was so prevented from making may be made, for the benefit of the
Employees of such Employer, by the other affiliated Employer(s) in accordance
with the provisions of Code Section 404(a)(3)(B).
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6.5 EXPENSES OF PLAN AND TRUST. All expenses reasonably incurred in
connection with the administration of the Plan and Trust (including without
limitation bonding costs, attorneys' and Trustee's fees, and accounting fees and
charges) shall, unless paid by the Employers, be a charge against and be paid
out of the Trust by the Trustee.
6.6 RETURN OF CONTRIBUTIONS. An Employer contribution made based on a good
faith mistake of fact or good faith mistake in determining the deductibility of
the contribution or conditioned upon the initial qualification of the Plan shall
be returned to the Employer within one year of the mistaken payment or
disallowance of the deduction or denial of qualification, as the case may be.
The amount returnable is the excess of the amount contributed over the amount
that would have been contributed had there not occurred such mistake. However,
earnings on the excess amount may not be so returned and any losses attributable
to such amount shall reduce the amount returnable. Further, the amount
returnable cannot cause the individual account of any Participant to be reduced
to less than it would have been had the mistaken amount not been contributed.
6.7 INITIAL MERGED PLANS. With respect to each plan merged to form the
Plan on September 1, 1999 (an "Initial Merged Plan"), its Employer, in its
discretion, may make a discretionary profit sharing contribution with respect to
such Initial Merged Plan for its plan year that ends August 31, 1999, with such
contribution being made after the merger date. The contribution for such short
plan year shall be allocated to the participants of the Initial Merged Plan for
that short plan year in accordance with the then terms of such Initial Merged
Plan, including without limitation, the allocation formula in effect for
allocating employer discretionary profit sharing contributions under such
Initial Merged Plan; provided, however, any compensation earned after the merger
date shall not be included. The Code Section 415, ADP, ACP and other required
tests shall be made for
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each Initial Merged Plan on the basis of their respective short plan years and
any contributions, distributions or other corrective actions necessary to be
taken after the end of the short plan year, but with respect to that short plan
year or an earlier plan year shall be taken under the terms of such Initial
Merged Plan.
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SECTION VII
ACCOUNTS
7.1 401(K) ACCOUNTS. The Plan Administrator shall cause to be maintained
for each Participant who makes 401(k) contributions to the Plan a separate
401(k) Account which shall reflect the portion of his interest in the Trust
which is attributable to his own 401(k) contributions.
7.2 EMPLOYER ACCOUNTS. The Plan Administrator shall cause to be maintained
for each Participant a separate Employer Account which shall reflect the portion
of his interest in the Trust which is attributable to the Employer's matching
contributions made on his behalf and any Employer discretionary nonmatching
contribution made on his behalf.
7.3 MONEY PURCHASE ACCOUNTS. The Plan Administrator shall cause to be
maintained for each Participant who had an account under the Maumee Industries,
Inc. Money Purchase Pension Plan and Trust (and any other Merged Plan that is a
money purchase plan) on the date it was merged into this Plan a separate Money
Purchase Account which shall reflect the portion of his interest in the Trust
which is attributable to such merged Maumee plan account.
7.4 ROLLOVER ACCOUNTS. The Plan Administrator shall cause to be maintained
for each Participant who makes a rollover contribution to the Plan a separate
Rollover Account which shall reflect the portion of his interest in the Trust
which is attributable to his rollover contributions.
7.5 ACCOUNT INFORMATION. The Plan Administrator shall deliver or cause to
be delivered to each Participant after the end of each calendar quarter, or at
such other times as determined by the Plan Administrator, a statement, in such
form as the Plan Administrator shall determine, setting forth pertinent
information relative to such Participant's Accounts.
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SECTION VIII
INVESTMENT PROVISIONS AND ACCOUNT BALANCES
8.1 INVESTMENT FUNDS. The Trustee shall maintain, for amounts contributed
to the Plan, those investment funds set forth on Attachment A, as it may be
amended from time to time and which is made a part of the Plan for all purposes.
The Plan Administrator may direct the Trustee to invest one or more of such
funds with a specified insurance company, mutual fund or appoint one or more
Investment Managers to manage the same and may also direct the Trustee to
maintain new and/or delete existing funds from time to time.
8.2 INVESTMENT OPTIONS. Each Participant's 401(k) contributions and
rollover contributions, if any, and the Employer matching contributions made on
behalf of such Participant shall be invested by the Trustee in one or more of
the funds as specified by the Participant in increments (whole percentages only)
totaling 100%. Subject to Section 8.3, the Employer's discretionary nonmatching
contribution, if any, shall be invested in the Company Stock Fund, unless the
Employer directs the Trustee otherwise. At the time an Employee becomes a
Participant, he shall complete and file a Plan form (or by electronic means)
designating the investment option(s) in which his 401(k) contributions and/or
rollover contributions, if any, and the Employer matching contributions on his
behalf are to be initially invested. Separate elections may not be made with
respect to different types of contributions. If no designation is filed by a
Participant, he shall be deemed to have elected the most conservative interest
rate or money market type of fund then being offered under the Plan.
Notwithstanding the foregoing, any Participant in a Merged Plan who
has not made a timely new investment election under the Plan shall have his
Accounts invested in the applicable
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"mapping" fund or, if none, the most conservative investment fund then offered,
until such time thereafter as the Participant makes a proper investment election
under the Plan.
8.3 CHANGE IN INVESTMENT OPTION. An investment option designated by a
Participant shall be deemed to be a continuing one until changed in accordance
with this Section 8.3. Subject to any applicable transfer restrictions in an
insurance company group investment contract of a fund concerning the maximum
amounts that may be transferred following the occurrence of certain contingent
events as set forth in the contract, a Participant may change his investment
option with respect to the current balance of his Accounts (other than
discretionary Employer nonmatching contributions that the Board has directed be
invested in Company Stock, unless the Participant is age 55 or older) and/or his
and the Employer's future matching contributions to be made on his behalf by
properly notifying the Plan Administrator or its designee. However,
notwithstanding anything in the Plan to the contrary, a Participant who is age
55 or older may direct, from time to time, that all or any portion of the
discretionary Employer profit sharing contributions made on his behalf and
directed by the Board to be invested in Company Stock, if any, be reinvested in
one or more of the other investment funds.
8.4 CALCULATION OF ACCOUNT BALANCES. The value of a Participant's Accounts
shall be determined as of any Valuation Date (i) to the extent invested in a
mutual fund, based on the published per unit value of the units of that mutual
fund as of the applicable Valuation Date, (ii) to the extent invested in the
Company Stock Fund, in units as determined by the recordkeeper, and (iii) to the
extent invested in any insurance investment contract or similar product, the
book value of such contract as reported by the issuer, subject to any "market
value" adjustments applicable under such contract.
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8.5 VOTING COMPANY STOCK. The Trustee shall notify each Participant who
has Company Stock allocated to his Account of each matter on which such shares
are to be voted and each tender or exchange offer and utilize its best efforts
to distribute or cause to be distributed to such Participant in a timely manner
all information received by the Trustee as a recordholder of shares of Company
Stock in connection with any such vote, tender or exchange offer. Each
Participant shall have the right from time to time with respect to the shares of
Company Stock allocated to his Account, to instruct the Trustee in writing as to
the manner in which to vote such shares and how to respond to any tender or
exchange offer which shall be pending or which may be made in the future for all
shares of Company Stock or any portion thereof. A Participant's instructions
shall remain in force until superseded in writing by the Participant. The
Trustee shall vote or tender or exchange such shares of Company Stock as and to
the extent so instructed. The Trustee shall not vote, sell, convey or transfer
any allocated shares of Company Stock for which no directions are timely
received from Participants pursuant to the immediately preceding paragraph.
Unless and until shares of Company Stock are tendered or exchanged, the
individual instructions received by the Trustee from Participant shall be held
in strict confidence by the Trustee and shall not be divulged or released to any
person, including, but not limited to officers or Employees of the Company, or
of any other Employer; provided, however, that the Trustee shall advise the
Company, at any time upon request, of the total number of shares not subject to
instructions to tender or exchange. The Trustee shall not make recommendations
to Participants on whether to instruct the Trustee to vote, tender or exchange
shares of Company Stock.
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SECTION IX
LIMITS ON BENEFITS AND TOP-HEAVY RULES
9.1 APPLICABILITY OF SECTION. The special provisions contained in this
Section IX supersede and control any other provisions of the Plan in conflict
therewith and the provisions of Code Section 415 that may not be applied in more
than one manner are hereby incorporated by reference and shall control over any
provision in the Plan in conflict therewith.
9.2 DEFINED CONTRIBUTION LIMIT. In no event shall the Annual Addition (as
defined below) with respect to a Participant for a Plan Year, which shall be the
limitation year for purposes of Code Section 415, exceed the lesser of
(a) $30,000.00; or
(b) 25% of the Participant's annual compensation (as defined in
Treas. Reg. ss.1.415-2(d), I.e., the ss.415 Compensation), which shall include
any elective deferrals made pursuant to Code Sections 125 or 401(k), for such
Limitation Year.
Annual Addition means, with respect to a Participant, the sum for
any Limitation Year, of
(1) Employer contributions, including Participant 401(k)
contributions;
(2) employee contributions (except as provided in Code Section
415(c)(2)); and
(3) forfeitures
allocated to such Participant's accounts in a defined contribution plan of an
Employer or Affiliate and any other amounts required to be treated as an annual
addition by Code Sections 415(1)(2), 419A(d)(3) or 419(e).
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9.3 LIMITATION FOR TWO TYPES OF PLANS. In the event a Participant in this
Plan is also (or has been) a Participant in a defined benefit plan maintained by
an Employer or Affiliate, the sum of the defined benefit fraction and the
defined contribution fraction for any Limitation Year may not exceed 1.0 and if
the initial sum exceeds 1.0, the Annual Additions to this Plan shall be reduced
as necessary to meet such fraction. The defined contribution fraction for any
Limitation Year is (1) divided by (2) where (1) is the sum of the actual Annual
Additions to the Participant's account at the close of the Limitation Year, and
(2) is the sum of the lesser of the following amounts determined for such year
and for each prior year of service of the employee: (a) 1.25 times the dollar
limitation in effect for each such year (without regard to the special dollar
limitations for employee stock ownership plans), or (b) 1.4 times 25% of the
Participant's compensation for each year. The defined benefit plan fraction for
any Limitation Year is (1) divided by (2), where: (1) is the projected annual
benefit of the Participant under the plan (determined as of the close of the
Limitation Year), and (2) Is the lesser of (a) 1.25 times the dollar limitation
(adjusted, if necessary) for such year, or (b) 1.4 times 100% of the
Participant's average compensation for the high 3 years (adjusted, if
necessary). The provisions of Code Section 415(e) shall not be applicable for
limitation years that begin after December 31, 1999.
9.4 COMBINING OF PLANS. For the purposes of applying the foregoing
limitations, all defined benefit plans and all defined contribution plans,
whether or not terminated, of an Employer and Affiliate are to be treated as one
defined benefit plan and one defined contribution plan, respectively.
9.5 SUSPENSE ACCOUNTS. If, as a result of the allocation of forfeitures, a
reasonable error in estimating a Participant's compensation, a reasonable error
in determining the amount of 401(k)
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contributions that may be made by a Participant, or such other facts and
circumstances as the Commissioner approves, the annual additions exceed the
applicable limitations set forth above, the unmatched 401(k) contributions of
the Participant (plus any income thereon) shall first be returned to the extent
necessary and if an excess remains, the excess amount attributable to Employer
contributions shall be reallocated among the Profit Sharing Accounts of the
other Participants entitled to an allocation for the year in proportion to the
Employer profit sharing contribution allocated to each such Participant for that
Limitation Year, subject to the limitations of this Section XI.
9.6 TOP HEAVY PROVISIONS. The following provisions are to be applied to
determine if the Plan is top-heavy with the meaning of Code Section 416 and the
consequences if it is.
(a) DETERMINATION OF WHETHER THE PLAN IS TOP-HEAVY.
1. TOP-HEAVY RATIO. The Plan shall be top-heavy for a Plan Year if
the current balance of the Accounts under the Plan for "key employees" (as
defined below) exceeds 60% of the current balance of the Accounts of all
Participants as of a Determination Date (as defined below). The "top-heavy
ratio" shall be determined in accordance with Code Section 416(g). In
determining the current balance under the Plan, all distributions made during
the Plan Year of the determination plus the four preceding Plan Years shall be
included. Further, the accounts of any Participant who has not performed any
services for the Employers during the 5-year test period shall be ignored.
2. PLANS TO BE AGGREGATED. For purposes of determining whether the
Plan is top-heavy, plans of the Employers and Affiliates in which a key employee
participates and each other plan of the Employers and Affiliates which enables
any such plan to meet the requirements of Code Section 401(a)(4) or 410 shall be
aggregated ("Required Aggregation Group") in determining
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whether the Plan and such plan(s) are top-heavy. However, the Employer may treat
any other plan as part of such group if such group would continue to meet the
requirements of Code Section 401(a)(4) and 410 ("Permissive Aggregation Group").
3. KEY EMPLOYEES. A Participant or former Participant (including
beneficiaries of such participants) in the Plan shall be a "key employee" if at
any time during the Plan Year or any of the four preceding Plan Years he is an
officer of the Employer whose Compensation exceeds 50% of the Code Section
415(b)(1)(A) dollar limit, one of the 10 employees owning both the largest
interests in the Employer and a greater than 1/2% interest, if such employee's
Compensation exceeds the Code Section 415(c)(1)(A) dollar limit, a 5% owner of
the Employer, or a 1% owner of the Employer having an annual Compensation from
the Employer of more than $150,000, subject to the limitations in Code Section
416(i) on the number of key employees. Any employee who is not a key-employee
shall be a "non-key employee."
4. DETERMINATION DATE. The Determination Date shall be the last day of
the preceding Plan Year, except for the initial Plan Year the Determination Date
shall be the last day of such year.
(b) MINIMUM CONTRIBUTION IF THE PLAN IS TOP-HEAVY. For each year the
Plan is top-heavy each non-key Employee in the Eligible Class (regardless of his
Period of Service) shall, if he is employed by the Employer on the last day of
the Plan Year, receive an Employer contribution (plus forfeitures) equal to the
greater of (i) his Employer contribution for that Plan Year under the Plan or
(ii) the lesser of (a) 3% of the Participant's Compensation or (b) the
percentage at which Employer contributions are made for the key employee with
the highest percentage. If the highest rate contributed on behalf of a key
employee is less than 3%, amounts contributed as a result of a
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salary reduction agreement must be included in determining contributions made on
behalf of key employees. Such minimum Employer contribution shall be made
regardless of whether the Employee makes any contributions to the Plan in such
Plan Year. Further, in the event the Participant also participates in a defined
benefit plan of the Employer or Affiliates that is top-heavy, the Participant
shall not receive the minimum top-heavy contribution provided above but shall
accrue the minimum top-heavy benefit required under such other plan.
(c) SS.415 LIMITS. If the Plan is top-heavy for any Plan Year, a factor
of 1.0 shall be used instead of 1.25 in the denominators of the defined benefit
plan and defined contribution plan fractions under Code Section 415(e).
(d) VESTING. If the Plan is top-heavy for any Plan Year, the vesting
schedule shall be Schedule B as set forth in Section 10.2, except for those who
continue to be covered by Schedule A.
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SECTION X
VESTING OF ACCOUNTS
10.1 401(K) AND ROLLOVER ACCOUNTS. A Participant shall at all times,
regardless of his Years of Service, be 100% vested (i.e., possess a
nonforfeitable interest) in his 401(k) Account and Rollover Account, if any.
10.2 EMPLOYER ACCOUNTS. Subject to the following provisions of this
Section 10.2 and Section 10.3, the portion of a Participant's Employer Account
(and, if applicable, Money Purchase Account) that is vested on any specified
date shall be determined on the basis of his Years of Service in accordance with
the following schedule:
A. For those who are Employees on the Plan's effective date:
YEARS OF SERVICE VESTED PERCENTAGE
less than 1 0%
1 20%
2 40%
3 or more 100%
B. For those who become Employees after the Plan's effective date:
YEARS OF SERVICE VESTED PERCENTAGE
less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
Regardless of his Years of Service, however, a Participant who is an Employee on
or after reaching his Normal Retirement Age shall be 100% vested in his Employer
Account (and, if applicable, Money Purchase Account). Further, in the event a
Participant's employment with the Employers
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and Affiliates is terminated by reason of Disability or death, he shall also be
deemed to be 100% vested in the balance of his Employer Account (and, if
applicable, Money Purchase Account).
Notwithstanding the above vesting schedule, a Participant in a
Merged Plan shall not at any time have a vested percentage less than that
provided under the Merged Plan's vesting schedule.
If a distribution is made to a Participant from his Employer
Account (and, if applicable, Money Purchase Account) pursuant to Section XI when
he is partially vested therein and he again becomes an Employee prior to
incurring 5-consecutive Breaks in Service, the vested portion of his Employer
Account (and, if applicable, Money Purchase Account) shall thereafter, until
such time as he may become 100% vested or such Account is forfeited, be an
amount ("X") determined by the formula: X = P (AB+D) - D. For purposes of
applying the formula: P is the vested percentage at the relevant times; AB is
the account balance at the relevant time; and D is the amount of the
distribution.
10.3 TERMINATION OF PLAN OR EMPLOYER CONTRIBUTIONS. In the event the Plan
is terminated or partially terminated or the Employers' contributions under the
Plan are completely discontinued, the vesting provisions contained in Section
10.2 shall be inapplicable to the affected Participants and each such
Participant shall thereupon be 100% vested in his Employer Account (and Money
Purchase Account, if any) as of the date of such discontinuance or termination
and in any amount thereafter credited or allocated to such Account.
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SECTION XI
DISTRIBUTIONS, FORFEITURES, WITHDRAWALS AND LOANS
11.1 DISTRIBUTIONS. Upon the Participant's separation from service (within
the meaning of Section 401(k) of the Code), the Participant shall be entitled to
receive a distribution of the vested value of his Accounts. Unless the
Participant elects to receive his Accounts in one of the optional forms of
payment as provided below, payment shall be effected by purchasing with the
Participant's vested Account balances an annuity contract which provides for a
straight life annuity, if the Participant is not married, or, if the Participant
is married, a joint and 50% survivor annuity with the Participant's spouse as
the contingent annuitant from an insurance company selected by the Plan
Administrator. Any annuity contract distributed pursuant to the Plan shall be
nontransferable.
The optional forms of payment available under the Plan are:
Option 1: Life Annuity -- a level monthly benefit payable to the
Participant for life.
Option 2: Joint and Survivor Annuity -- a level monthly benefit
payable to the Participant for life and, following the Participant's
death, 50% (or, if elected by the Participant 75% or 100%) of such monthly
benefit payable to his designated contingent annuitant, if then living,
for life.
Option 3: Installments -- substantially equal monthly, quarterly,
semi-annual or annual benefits paid to the Participant for a specified
period not exceeding the Participant's life expectancy or the joint life
expectancy of the Participant and his Beneficiary (redetermined annually,
if elected by the Participant), all as elected by the Participant with
payments stopping at the end of the designated period certain; if the
Participant dies prior to
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the end of the designated period, such benefits shall continue to be paid
to the Participant's Beneficiary for the balance of such period certain.
Option 4: Lump Sum -- all of the Participant's vested Account
balances paid in a single lump sum payment in cash; however, an Account
invested in the Company Stock Fund may be paid all in Company Stock or
part in Company Stock (whole shares only) and part in cash at the election
of the Participant.
The Plan Administrator shall furnish the Participants with general information
concerning the forms of payments available within a reasonable period prior to
their Annuity Starting Date. All optional forms shall be the actuarial
equivalent of the single life annuity for the Participant.
The Plan Administrator shall furnish the following information to
the Participant within a reasonable period prior to the Annuity Starting Date:
(a) a description or explanation, written in non-technical language,
of the terms and conditions of the qualified joint and survivor annuity,
if married, or the straight life annuity if not married,
(b) the Participant's right to make, and the effect of, an election
to waive the automatic annuity form of payment,
(c) the rights of the Participant's spouse concerning the consent to
any such election, and
(d) the right to make, and the effect of a revocation of an election
not to receive the automatic form.
If a Participant fails to make an election during the election period, such
Participant shall be deemed to have elected the qualified joint and survivor
annuity, if he is married, or the straight life annuity,
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if he is not married. The election period shall be the period of not more than
90 days and not less than 30 days prior to the Participant's Annuity Starting
Date. A Participant may revoke and remake his election any number of times
during the election period.
No election to waive the joint and 50% survivor annuity made by a
married Participant, other than an election of Option 2 with his spouse as his
contingent annuitant, shall be effective unless the Participant's spouse
consents in writing to such election, such election designates a beneficiary (or
a form of benefits) which may not be changed without a new spousal consent and
the spouse's consent acknowledges the effect of such election on the spouse's
right to benefits under the Plan and is witnessed by a Plan representative or a
notary public. The spousal consent requirement shall not apply if it is
established to the satisfaction of the Plan Administrator that there is no
spouse, the spouse cannot be located or due to such other circumstances as may
be permitted by Treasury regulations.
11.2 FORFEITURES. If the Participant's employment with all Affiliates is
terminated prior to his being 100% vested in his Employer Account (or Money
Purchase Account), the nonvested portion of his Employer Account (or Money
Purchase Account) shall be forfeited as of the next Valuation Date; however, if
a Participant who incurs a forfeiture again becomes an Employee prior to
incurring five consecutive Breaks in Service, he may reinstate the earlier
forfeited amount (unadjusted for any subsequent Trust earnings or losses) by
repaying to the Plan in cash an amount equal to the distribution received (if
any) prior to the earlier of incurring five consecutive Breaks in Service or the
fifth anniversary of the date he again becomes an Employee. Any reinstated
forfeited amounts shall be taken from current forfeitures or special Employer
contributions. Any amounts
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forfeited not used to reinstate prior forfeitures shall be used to offset future
Employer contributions under this Plan.
11.3 AUTOMATIC CASHOUTS. In the event a terminated Participant's vested
Account balances do not exceed $5,000 at any time prior to the commencement of
payment of such Accounts, such vested Accounts shall be automatically paid in a
lump sum as soon as reasonably practicable after such termination of employment
or Valuation Date the vested Account does not exceed $5,000, if later,
notwithstanding any election to the contrary. In the event a terminated
Participant's vested Account balances exceed $5,000, such distribution shall not
be made unless the Participant consents in writing to such distribution;
provided, however, such distribution shall be made in all events as soon as
reasonable practical on or next following the earliest of the date the
Participant (i) dies, (ii) reaches age 65 or (iii) consents in writing to the
distribution. Benefit payments to any Participant who reaches age 70-1/2 prior
to 2000 (and to any 5% or more owner) must begin by April 1 of the calendar year
following the year in which the individual attains age 70-1/2, whether or not
the person has terminated service, unless such Participant (excluding any 5% or
more owner) elects to defer distribution until his termination of employment.
All distributions shall be made or commence not later than 60 days
after the end of the Plan Year in which (i) the Participant terminates his
service with the Employers and its Affiliates or (ii) reaches his Normal
Retirement Age, whichever occurs last; provided, however, (x) in the event of
the Participant's death prior to his Annuity Starting Date, such distribution
shall in all events be made within five years of his date of death (or such
longer period permitted by applicable regulations). The provisions of Code
Section 401(a)(9), including Treas. Reg. ss.1.401(a)(9)-2, are hereby
incorporated by reference and shall control over any Plan provision in conflict
therewith.
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Notwithstanding anything in the Plan to the contrary, except as
provided in Section 11.6, amounts held in a Participant's 401(k) Account may not
be distributable prior to the earlier of:
(a) his separation from service, total and permanent disability, or
death;
(b) his attainment of age 59 1/2;
(c) termination of the Plan without establishment of a successor
plan;
(d) the date of the sale or other disposition by the Employer to a
corporation that is not an Employer of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) used by such corporation in a trade or
business of such corporation with respect to a Participant who continues
employment with the corporation acquiring such assets, provided the Employer
continues to maintain the Plan; or
(e) the date of the sale or other disposition by the Employer of
its interest in a subsidiary (within the meaning of Code Section 409(d)(3)) to a
corporation which is not an Affiliate with respect to a Participant who
continues employment with such subsidiary, provided the Employer continues to
maintain the Plan.
11.4 LOANS. Loans shall be available to all Participants (and
Beneficiaries) who are "parties in interest" to the Plan, within the meaning of
ERISA, on a uniform and nondiscriminatory basis; provided, however, only two
loans may be outstanding at any time during any Plan Year. A Participant (or
Beneficiary) shall make his application for a loan to the Plan Administrator or
its delegate. If married, the Participant's spouse must consent to such loan on
a form approved by the Plan Administrator.
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Each loan shall be evidenced by a promissory note and shall be in
an amount not exceeding the lesser of (i) $50,000 reduced by the excess (if any)
of the highest outstanding balance of loans from the Plan to the Participant
during the one-year period ending on the day before the date on which the loan
is made, over the outstanding balance of loans from the Plan to the Participant
on the date on which such loan was made or (ii) one-half of the present value of
Participant's vested Account balances under the Plan; however, in no event may a
loan be taken from a Participant's Money Purchase Account nor shall the Money
Purchase Account be considered in determining the amount available to be
borrowed by a Participant. The minimum amount for which a loan can be made shall
be $500. For purposes of the above limits in (i) and (ii) above, all plans of
the Employer and its Affiliates shall be considered one plan. All loans shall be
secured by one-half of the Participant's vested Accounts. Each loan shall be
automatically segregated from the general investments of the Plan and shall be
allocated solely to a separate loan account established for such borrowing
Participant until the loan is repaid in full. All loans shall be payable in
substantially equal installments (based on payroll periods) over a period not to
exceed five years (unless used to purchase the principal residence of the
Participant, in which event the maximum loan term shall not exceed 15 years) and
shall bear interest at a reasonably commercially equivalent rate as established
by the Plan Administrator and shall have such other terms as the Plan
Administrator determines, which may include a charge for the Plan's estimated
cost of establishing and maintaining the loan. Only two loans may be outstanding
at any time to a Participant (only one of which may be a principal residence
purchase loan).
As a pre-condition to any loan, the Participant must, in writing,
authorize his Employer to withhold from his Compensation each pay period the
amount of the periodic installment
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payments which become due on the loan and to remit the same to the Trustee who
shall apply such amount in reduction of the loan.
Notwithstanding anything herein to the contrary, loan repayments
will be suspended under this Plan as permitted under Code Section 414(u).
11.5 ROLLOVER ACCOUNT WITHDRAWALS. A Participant who is an Employee may,
subject to any applicable restrictions in a group insurance company investment
contract of a fund concerning maximum amounts that may be withdrawn under the
contract following the occurrence of certain contingent events, withdraw all or
a designated portion of the current balance of his Rollover Account, if any, as
of any Valuation Date by filing the appropriate form therefor with his Employer;
provided, however, the amount of such withdrawal must be for at least $500 or
the entire balance of such Rollover Account, whichever is less. In no event may
more than two such withdrawals be made with respect to any Plan Year. A
withdrawal shall be made in the automatic form of annuity provided in Section
11.1, unless the Participant elects a lump sum withdrawal with, if applicable,
his spouse's consent as required by Section 11.1
11.6 HARDSHIP WITHDRAWALS. By making a request with the Plan Administrator
a Participant who is an Employee may make a hardship withdrawal from his 401(k)
Account and, to the extent vested, his Employer Account, subject to the
following. The Plan Administrator shall not approve any such request unless it
finds that the Participant is facing a hardship creating an "immediate and heavy
financial need" (as defined below) and the Participant has obtained all
distributions, other than 401(k) hardship distributions, and all nontaxable
loans currently available under the Plan and all other plans of the Employer and
its Affiliates. The amount of the hardship withdrawal shall be limited to an
amount that does not exceed the lesser of: (1) that amount which
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the Plan Administrator determines to be required to meet the immediate financial
needs created by the hardship, including any amounts necessary to pay any taxes
or penalties reasonably anticipated to result from the distribution, or (2) the
amount of the 401(k) Account, but excluding all earnings credited to such 401(k)
Account. Hardship withdrawals shall be taken first from the Participant's vested
Employer Account. If a hardship distribution is made under the Plan, the
restrictions set forth in subparagraph (b) below shall apply. The hardship
withdrawal shall be made in cash as soon as practical after the date on which
the Participant submitted the hardship request. The following standards shall be
applied on a uniform and non-discriminatory basis in determining the existence
of hardship:
(a) A financial need shall be deemed to be an "immediate and heavy
financial need" if it is on account of:
(1) Medical expenses described in Section 213(d) of the Code
incurred or to be incurred by the Participant, the Participant's
spouse or any dependents of the Participant (as defined in Section
152 of the Code) or necessary for such persons to obtain such
medical care;
(2) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition, room and board and related educational
fees for the next 12 months of post-secondary education for the
Participant, his or her spouse, children, or dependents;
(4) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
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(5) Any other "safe harbor" event set forth in the Treasury
Regulations or other IRS announcements concerning hardships.
(b) Upon a hardship withdrawal,
(1) the Participant's contributions under the Plan, and all
other plans (other than welfare benefit plans) maintained by the
Employer and its Affiliates, will be suspended for 12 months, and
(2) the Participant may not make 401(k) contributions under
the Plan, or contributions under all other plans (other than welfare
benefit plans) maintained by the Employer and its Affiliates, for
the Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable limit
under Code Section 402(g) for such next taxable year less the amount
of the Participant's elective 401(k) contributions for the taxable
year of the hardship distribution.
A withdrawal shall be made in the automatic form of annuity provided in Section
11.1, unless the Participant elects a lump sum withdrawal with, if applicable,
his spouse's consent as required by Section 11.1
11.7 AGE 59 1/2 WITHDRAWALS. A Participant who is an Employee and age 59
1/2 or older may, subject to any applicable restrictions in a group insurance
company investment contract of an investment fund concerning maximum amounts
that may be withdrawn under the contract following the occurrence of certain
contingent events, withdraw all or any designated portion of the current balance
of his 401(k) Account and, to the extent vested, Employer Account; provided,
however, the amount of such withdrawal must be for at least $500 or the entire
balance of such Account,
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whichever is less, and in no event may more than one withdrawal be made pursuant
to this Section 11.5 with respect to any Plan Year. A withdrawal shall be made
in the automatic form of annuity provided in Section 11.1, unless the
Participant elects a lump sum withdrawal with, if applicable, his spouse's
consent as required by Section 11.1
11.8 DIRECT ROLLOVER DISTRIBUTIONS. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner prescribed
by the plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributes in a direct rollover.
Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributes and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; any hardship withdrawal from a
401(k) Account; and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover
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distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
Distributee: A distributee includes an employee or former employee.
In addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributes.
11.9 30-DAY WAIVER. If a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such distribution may commence less than 30
days after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
11.10 PRERETIREMENT SURVIVOR ANNUITY. In the event of the death of a
married Participant prior to the Annuity Starting Date, the vested balance(s) of
his Accounts shall be applied as soon as reasonably practicable to purchase an
immediate single life annuity contract from an insurance company selected by the
Plan Administrator for his spouse (the "preretirement survivor annuity");
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however, the spouse may elect to receive an optional form of distribution (other
than Option 2) in lieu of this life annuity. An annuity contract distributed
under the Plan, must be nontransferable and must comply with the terms of this
Plan. In the event of the death of an unmarried Participant (or a Participant
who has designated someone other than his spouse as his Beneficiary, with the
requisite consent of the spouse) prior to the Annuity Starting Date, his
Accounts shall be distributed as soon as practicable in a lump sum payment to
his Beneficiary.
A married Participant may elect, by executing the election form prescribed
by the Plan Administrator, not to be covered by the preretirement survivor
annuity. Such election must be made during the election period described below.
Any election may be revoked and subsequent elections may be made or revoked at
any time during such election period. Any such election and any revocation of
such election must be signed by the Participant's spouse and acknowledge the
effect of such election on the spouse's right to benefits and further, the
spouse's signature must be notarized, designate a specific beneficiary and
specific form of payment that cannot be changed without a new spousal consent.
The Plan Administrator shall furnish certain general information pertinent
to this election to each Participant within the period beginning on the first
day of the Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the Participant attains
age 35. With respect to an employee who becomes a Participant of the Plan after
the date the general information is required to be furnished, such information
shall be furnished on or about the date that such Participant begins
participation in the Plan. The furnished information shall be written in
accordance with such regulations as the Secretary of Treasury may prescribe and
shall contain a general explanation of (i) the terms and conditions of
preretirement
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survivor annuity (ii) the Participant's right to make and the effect of, an
election or revocation of an election to waive the preretirement survivor
annuity, and (iii) the rights of the Participant's spouse with respect to the
preretirement survivor annuity. The Participant may make or revoke the election
described in this Section 11.10 upon termination of employment or at any time
beginning on the first day of the Plan Year in which the Participant attains age
35 and ending on the date of the Participant's death.
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SECTION XII
BENEFICIARY DESIGNATIONS
12.1 DESIGNATION OF BENEFICIARIES. A Beneficiary designation and any
revocation or change thereof shall be made in writing in such form as the Plan
Administrator may from time to time prescribe and shall be effective when filed
with the Employer. If more than one person is named, the Participant must
indicate the share and/or precedence of each person and if the Participant's
spouse is not his designated Beneficiary, his spouse must consent to such other
beneficiary designation in writing, before a notary public, acknowledging the
effect of such designation and no change (other than a revocation) may be made
in such designation without a new spousal consent as provided herein. A
Participant may change his designated Beneficiaries from time to time without
notice to any Beneficiary but no such change shall be effective with respect to
a married Participant (except for a designation of his spouse) unless a new
spousal consent is obtained. Notwithstanding the above, a Participant's marriage
or divorce shall automatically revoke his prior designation (but in the event of
a divorce, only to the extent such designation is the Participant's former
spouse) except to the extent otherwise required by a qualified domestic
relations order.
If no Beneficiary designation is in effect upon the death of a
Participant, then any benefit payable under the Plan with respect to such
Participant shall be paid in the following order of priority, to: his surviving
spouse or, if none, the beneficiary designated by the Participant under the
Employer's group term life insurance programs provided such Participant is
covered by such program and has a beneficiary designation in effect thereunder,
or, if none, to the administrator or executor of the estate of such Participant.
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SECTION XIII
SPECIAL PAYMENT PROVISIONS
13.1 PAYMENTS TO MINORS AND INCOMPETENTS. If any person entitled to
receive any benefits hereunder is legally incompetent by reason of minority or
otherwise, the Plan Administrator may instruct the Trustee to make distribution
to the parent(s), legal guardians or custodians of such person, and such
distribution, whether in trust or not, shall constitute a complete discharge of
all liability with respect to such benefit.
13.2 NON-ASSIGNABILITY OF RIGHTS. Except for the right of a Participant
to name one or more Beneficiaries to receive distribution of benefits upon death
of a Participant or as otherwise provided by applicable law, none of the
benefits, payments, proceeds, claims or rights of any person is or may become
entitled to receive under the Plan, contingently or otherwise, shall be subject,
through legal or equitable proceedings or otherwise, to any claim of any
creditor of any such person prior to actual receipt thereof by such person, nor
shall any such person have any right to assign, anticipate, transfer or encumber
any of the benefits, payments, proceeds, claims or rights he may expect to
receive, contingently or otherwise, under this Plan, and any such attempted
assignment, anticipation, transfer or encumbrance shall be wholly and absolutely
void; however, nothing herein shall prevent the Plan from complying with a
qualified domestic relations order, within the meaning of Code Section 414(p).
In that regard, an alternate payee under a qualified domestic relations order
("QDRO") may receive a distribution pursuant to the QDRO at any time,
irrespective of whether the Participant has attained his earliest retirement age
(as defined under Code Section 414(p) under the Plan), provided the order
authorizes distribution at that time or permits an agreement between the Plan
and the alternate payee to authorize an earlier distribution.
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SECTION XIV
AFFILIATED COMPANIES
14.1 ADOPTION OF PLAN. Any Affiliate which the Board or Plan
Administrator shall declare eligible to adopt and participate in the Plan may
adopt and become a party to this Plan and the Trust provided for herein subject
to and upon such terms and conditions as the Board or Plan Administrator may
prescribe. The Plan shall be effective with respect to each adopting Affiliate
and its employees on such date as shall be approved by the Board or Plan
Administrator and specified in the instruments executed by such Affiliate
adopting the Plan.
Upon adoption of the Plan by an Affiliate in accordance with the
provisions of this Section 14.1, such Affiliate and its employees shall
thereupon be governed and bound by all the terms and provisions of the Plan
subject to the terms and conditions upon which such Affiliate adopted the Plan,
and, so long as such Affiliate shall continue its participation in the Plan, it
shall be an Employer hereunder.
14.2 WITHDRAWAL FROM PLAN. Any Affiliate shall have the right to withdraw
from the Plan by giving prior written notice to the Board and the Plan
Administrator. Upon any such withdrawal, it shall cease to be an Employer under
this Plan and shall not be eligible to again adopt and participate in this Plan
unless it is again designated a participating Affiliate pursuant to Section
14.1; however, all Accounts for its Employees shall continue to be held under
the Plan and Trust.
In the event an Employer shall cease to be an Affiliate with the
Company, unless provided otherwise by the Board and such Employer, such Employer
shall be deemed to have withdrawn from the Plan.
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14.3 TERMINATION OF EMPLOYER PARTICIPATION BY BOARD. The Board or Plan
Administrator may, in its absolute discretion, terminate the participation of
any other Employer in the Plan by giving prior written notice to such Employer
and the Trustee and the provisions of Section 14.2 shall be effective to such
termination.
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SECTION XV
AMENDMENT AND TERMINATION
15.1 RIGHT TO AMEND OR TERMINATE. It is the intention of the Company by
its adoption hereof to create a permanent plan and to continue to make
contributions hereunder indefinitely; nevertheless
(a) the Board reserves and shall have the right to amend the Plan
(including any funding agreement which forms a part hereof) in whole or in part
at any time and from time to time;
(b) the Board reserves and shall have the right to terminate the
Plan in its entirety at any time, and such action by the Board shall be binding
upon all Employers and their employees;
(c) the Chief Executive Officer of the Company may make any
amendments to the Plan or the funding agreement which do not materially increase
the Company's obligations under the Plan or funding agreement; and
(d) the Chief Executive Officer and/or the Plan Administrator may
approve the adoption of the Plan by Affiliates and the merger of plans of
Affiliates into the Plan, all on such terms as the Chief Executive Officer
and/or Plan Administrator determines to be appropriate.
Written notice of any such action shall be given to the Trustee and the
Participants affected thereby, specifying the effective date thereof, and any
such action shall be evidenced by an instrument in writing and shall be filed
with the Trustee. Each amendment of the Plan shall be binding on each other
Employer. To the extent permitted by the Code, any amendment of the Plan may be
made effective retroactively if it would be beneficial to the Participants to do
so or such amendment is
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necessary or advisable in order to comply with the provisions of the Code or any
rulings or regulations issued thereunder pertaining to employee profit sharing
plans.
15.2 RESTRICTIONS ON AMENDMENT. No amendment, change or modification
shall be made in the Plan (including any funding agreement which forms a part
hereof) which will adversely change the vesting schedule with respect to any
Participant credited with three or more years of service; which would eliminate
any "protected benefit" as defined in Code Section 411(d), except as permitted
by regulations; which would subject a protected benefit to any Employer consent
or discretion; or which will give any Employer any rights in funds contributed
to the Trust or in any assets of the Trust (except under the circumstances and
to the extent provided in Section 6.6).
15.3 EFFECT OF DISSOLUTION OR EMPLOYER MERGER. This Plan shall
automatically terminate upon the legal dissolution of the Company, upon the
making of a general assignment of its assets for the benefit of its creditors,
or upon expiration or forfeiture of its corporate charter. It shall likewise
terminate upon the merger, consolidation or reorganization of the Company with
any other corporation(s) or other business organization(s) unless the Company is
a surviving corporation or such other corporation(s) or business organization(s)
shall, by instrument in writing filed with the Plan Administrator and the
Trustee assume the obligations of the Company hereunder. Written notice of any
such automatic termination shall be given to the Trustee by the Plan
Administrator.
15.4 EFFECT OF PLAN MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. If this
Plan is merged or consolidated with any other plan, or its assets or liabilities
are transferred to any other plan, each Participant shall be entitled to a
benefit immediately after the merger, consolidation or transfer at least equal
to the benefit he would have received if he had been entitled to a benefit
immediately preceding the mergers consolidation or transfer and the Plan had
then terminated.
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15.5 DISTRIBUTION UPON TERMINATION OF PLAN. As of the date of full and
permanent termination of this Plan (other than by reason of the payment and
distribution of all funds held in the Trust), the Trust shall be revalued as if
such date were a Valuation Date and the balances of all Accounts shall be
calculated in accordance with Section VIII. Upon such event, and prior to making
any distributions from the Plan in connection therewith, the Company shall
notify the Internal Revenue Service that the Plan has been terminated and shall
obtain a ruling from the Internal Revenue Service as to the effect of such
termination. The Plan Administrator shall then instruct the Trustee, after all
obligations to and incurred by it have been paid and allocated to the
Participant's Accounts as provided in Section VIII, to distribute to each
Participant with respect to whom the Plan has been terminated, or his
Beneficiary or Beneficiaries, the full amount then standing to the credit of
such Participant's Accounts, such distribution to be made in accordance with
Section XII. If the Employer and Affiliates do not maintain any other qualified
plan, such distribution may be made without the consent of the Participant (even
if it exceeds $5,000), provided the Plan does not then provide for qualified
joint and survivor annuities.
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SECTION XVI
GENERAL PROVISIONS
16.1 EMPLOYER'S RIGHTS. The Employer's rights to discipline transfer,
discharge or terminate the employment of Employees or to exercise its rights as
to incidents and tenure of employment shall not be impaired or affected in any
manner by reason of the existence of the Plan or any action taken under the
Plan.
16.2 NOTICE OF ADDRESS. Each Participant and each other person receiving
or eligible to receive benefits under the Plan shall file with the Employer
notice in writing of his post office address and each change of post office
address. Any notice, statement or other communication addressed to any person at
his last post office address filed with the Employer, or if no post office
address was filed, then at last post office address of the Participant by reason
of whose employment such benefit is payable as shown by the Employer's records,
shall be binding upon such person for all purposes of the Plan. Neither the Plan
Administrator, the Employers nor the Trustee shall be required or obligated to
search for or ascertain the whereabouts of any person eligible to receive
benefits under the Plan.
16.3 COPIES OF PLAN AVAILABLE. Copies Of the Plan and any and all
amendments thereto shall be made available at all reasonable times to all
Employees of an Employer at such office(s) of the Employer as designated by the
Plan Administrator.
16.4 TITLES AND HEADINGS. The titles to and headings of Sections in the
Plan are for convenience and reference only, and, in the event of any conflict,
the text of the Plan rather than such titles or headings shall control.
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16.5 COUNTERPARTS. This Plan and all amendments thereto may be executed
in any number of counterparts, each of which shall be deemed an original, and
said counterparts shall constitute but one and the same instrument which may be
sufficiently evidenced by any one counterpart.
16.6 USERRA CREDIT. 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 Code Section 414(u).
16.7 APPLICABLE LAW. This Plan is created under and shall be governed,
construed and administered in accordance with the laws of the State of Texas to
the extent not preempted by ERISA or other applicable federal law.
IN WITNESS WHEREOF, the following Employers have caused their duly
authorized officers to execute this Plan on September 1, 1999, effective for all
purposes as provided above.
PENTACON, INC.
By: /s/BRUCE TATEN
Name: Bruce Taten
Title: Senior Vice President
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ATTACHMENT A
Pentacon, Inc. 401(k) Plan
(Investment funds as of September 1, 1999)
IRT Stable Value Fund
INVESCO Select Income Fund
Invesco Total Return Fund
IRT 500 Index Fund
INVESCO Value Equity Fund
AIM Blue Chip A IRT
International Equity Fund
AIM Small Cap Growth A
Company Stock Fund
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ATTACHMENT B
Pentacon 401(k) Plan
List of Merged Plans
PLAN DATE
- ---- ------
1. Maumee Industries, Inc. 401(k) Plan 9-1-99
2. Maumee Industries, Inc. Money Purchase Pension Plan and Trust 9-1-99
3. Hoyt Fastner Corp. 401(k) Plan 9-1-99
4. Champion Bolt Corporation Savings Plan 9-1-99
5. Champion Bolt 401(k) Plan 9-1-99
6. Sales Systems, Ltd. 401(k) Profit Sharing Plan 9-1-99
7. D-Bolt Company, Inc. Profit Sharing Plan 9-1-99
8. D-Bolt Company, Inc. 401(k) Plan 9-1-99
9. ASI Aerospace Group Incorporated 401(k) Savings Plan 9-1-99
10. Texas International Aviation 401(k) Plan 9-1-99
11. Alatec Products, Inc. 401(k) Plan
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