As filed with the Securities and Exchange Commission on September 24, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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WHX CORPORATION
DELAWARE 13-3768097
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 EAST 59TH STREET 10022
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive offices)
WHX CORPORATION 1997 DIRECTORS STOCK OPTION PLAN
1991 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
OF WHEELING-PITTSBURGH CORPORATION
HANDY & HARMAN 401(K) RETIREMENT PLAN
(Full title of the plan)
RONALD LABOW
CHAIRMAN OF THE BOARD
WHX CORPORATION
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
(Name and address of agent for service)
(212)355-5200
(Telephone number, including area code, of agent for service)
WITH A COPY TO:
STEVEN WOLOSKY, ESQ., OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 PARK AVENUE, NEW YORK, NEW YORK 10022 (212) 753-7200
Approximate date of proposed sales pursuant to the plan:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered(1) per share price fee
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<S> <C> <C> <C> <C>
Common Stock par
value, .01 per
share.................... 400,000(2) $12.30(2) $4,920,000(2) $1,451.40(2)
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock par
value, $.01 per
share.................... 1,000,000(3) $14.03(3) $14,030,000(3) $4,138.85(3)
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock par
value, $.01 per
share.................... 500,000(4) $12.50(4) $6,250,000(4) $1,843.75(4)
================================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit
plan(s) described herein. There are also registered hereby such
indeterminate number of shares of Common Stock as may become issuable
by reason of the operation of the anti-dilution provisions of the plans
and the options.
<PAGE>
(2) Includes 150,000 shares with respect to which options were granted at
an exercise price of $11.8125 and 30,000 shares with respect to which
options were granted at an exercise price of $13.25. An additional
220,000 shares are to be offered at prices not presently determined.
Pursuant to Rule 457(h), the offering price for these additional shares
is estimated solely for the purpose of determining the registration fee
and is based on the $12.50 per share average high and low prices of the
Common Stock on the New York Stock Exchange on September 21, 1998.
(3) Includes 349,708 shares with respect to which options were granted at
an exercise price of $16.625, 57,607 shares with respect to which
options were granted at an exercise price of $13.8125 and 10,000 shares
with respect to which options were granted at an exercise price of
$13.3125. An additional 582,685 shares are to be offered at prices not
presently determined. Pursuant to Rule 457(h), the offering price for
these additional shares is estimated solely for the purpose of
determining the registration fee and is based on the $12.50 per share
average high and low prices of the Common Stock on the New York Stock
Exchange on September 21, 1998.
(4) Estimated pursuant to Rule 457(h) solely for purposes of computing the
registration fee and is based on the $12.50 per share average high and
low prices of the Common Stock on the New York Stock Exchange on
September 21, 1998.
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<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1998
PROSPECTUS
1,900,000 SHARES
WHX CORPORATION
Common Stock ($.01 par value)
This Prospectus relates to the reoffer and resale by certain selling
shareholders (the "Selling Shareholders") of shares (the "Shares") of the Common
Stock, $.01 par value (the "Common Stock"), of WHX Corporation (the "Company")
that may be issued by the Company to the Selling Shareholders upon the exercise
of outstanding stock options granted pursuant to the 1997 Directors Stock Option
Plan (the "Directors Plan"), the 1991 Incentive and Non-Qualified Stock Option
Plan (the "1991 Plan") of the Company or pursuant to the Handy & Harman 401(k)
Retirement Plan (the "401(k) Plan"). The offer and sale of the Shares to the
Selling Shareholders were previously registered under the Securities Act of
1933, as amended (the "Securities Act"). With respect to the Shares that may be
issued to any of the Selling Shareholders or additional persons who may be
deemed affiliates under the Directors Plan, the 1991 Plan and the 401(k) Plan,
this Prospectus also relates to certain Shares underlying options which have not
as of this date been granted. If and when such options are granted, the Company
will distribute a Prospectus Supplement as required by the Act. The Shares are
being reoffered and resold for the account of the Selling Shareholders and the
Company will not receive any of the proceeds from the resale of the Shares.
The Selling Shareholders have advised the Company that the resale of
their Shares may be effected from time to time in one or more transactions on
the New York Stock Exchange, in negotiated transactions or otherwise at market
prices prevailing at the time of the sale or at prices otherwise negotiated. See
"Plan of Distribution." The Company will bear all expenses in connection with
the preparation of this Prospectus.
The Common Stock of the Company is traded on the New York Stock
Exchange under the symbol "WHX." On September 21, 1998, the closing price for
the Common Stock, as reported by the New York Stock Exchange, was $12.625.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _______, 1998.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; Northwest Atrium Center, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661; and Seven World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
TABLE OF CONTENTS
AVAILABLE INFORMATION........................................................4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................5
GENERAL INFORMATION..........................................................6
RISK FACTORS.................................................................6
USE OF PROCEEDS.............................................................12
SELLING SHAREHOLDERS........................................................12
PLAN OF DISTRIBUTION........................................................13
LEGAL MATTERS...............................................................13
EXPERTS.....................................................................13
ADDITIONAL INFORMATION......................................................13
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December
31, 1997 and Form 10-Q for the quarters ended March 31, 1998 and June 30, 1998
are incorporated by reference in this Prospectus and shall be deemed to be a
part hereof. All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination
of this offering, are deemed to be incorporated by reference in this Prospectus
and shall be deemed to be a part hereof from the date of filing of such
documents.
The description of the Company's Common Stock is contained in the
Company's Registration Statement on Form 8-B filed June 24, 1994.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents. Written requests for such copies should
be directed to Marvin Olshan, Secretary, WHX Corporation, 110 East 59th Street,
New York, New York 10022. Oral requests should be directed to such officer
(telephone number (212) 355-5200).
------------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any Selling Shareholder. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the securities offered
hereby to any person in any state or other jurisdiction in which such offer or
solicitation is unlawful. The delivery of this Prospectus at any time does not
imply that information contained herein is correct as of any time subsequent to
its date.
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<PAGE>
GENERAL INFORMATION
The Company is a holding company that has been structured to acquire
and operate a diverse group of businesses on a decentralized basis, with a
corporate staff providing strategic direction and support. The Company's primary
businesses currently are Handy & Harman ("H&H"), a diversified manufacturing
company whose strategic business segments encompass, among others, specialty
wire and tubing, and precious metals plating, stamping and fabrication, and
Wheeling-Pittsburgh Corporation ("WPC"), a vertically integrated manufacturer of
value-added and flat rolled steel products. The Company's other businesses
include Unimast Incorporated ("Unimast"), a leading manufacturer of steel
framing and other products for commercial and residential construction and WHX
Entertainment Corp., a co-owner of a racetrack and video lottery facility
located in Wheeling, West Virginia. The Company believes that its businesses are
characterized by leading positions in their respective niches resulting from low
cost structures, strong managements, high quality and service, and extensive
offerings of value-added products. The Company's principal executive offices are
located at 110 East 59th Street, New York, New York 10022. The Company's
telephone number at such location is (212) 355-5200.
The Shares offered hereby were or will be purchased by the Selling
Shareholders upon exercise of options granted to them or are issued by the
Company pursuant to the 401(k) Plan and will be sold for the account of the
Selling Shareholders.
RISK FACTORS
SIGNIFICANT OUTSTANDING INDEBTEDNESS OF THE COMPANY
The Company has substantial indebtedness and debt service requirements.
At June 30, 1998, the Company's total consolidated indebtedness was $987.3
million (excluding margin borrowings). Additionally, the Company's subsidiaries
have significant additional borrowing capacity under their respective
outstanding credit facilities.
The Company's level of indebtedness will have several important effects
on its future operations, including the following: (a) a significant portion of
the Company's cash flow from operations will be dedicated to the payment of
interest on and principal of its indebtedness and will not be available for
other purposes; (b) the financial covenants and other restrictions contained in
the $350.0 million of 10 1/2% Senior Notes issued by the Company on April 7,
1998, the $275.0 million of 9 1/4% Senior Notes issued by WPC on November 26,
1997 (the "WPC 9 1/4 Notes"), the WPSC Revolving Credit Facility with Citibank,
N.A. which provides for borrowing for general corporate purposes of up to $150.0
million, and with a $35.0 million sublimit for letters of credit (the "WPSC
Revolving Credit Facility"), a $50.0 million letter of credit facility with
Citibank, N.A. and a revolving credit facility between H&H and several financial
institutions as lenders and Citibank, N.A. as administrative agent(the "H&H
Revolving Credit Facility"), require the Company's subsidiaries and H&H, as the
case may be, to meet certain financial tests and limit its or their ability to
borrow additional funds or to dispose of assets; and (c) the Company's ability
to obtain additional financing in the future for working capital, postretirement
health care and pension funding, capital expenditures, acquisitions, general
corporate purposes or other purposes may be impaired. The Company's ability to
make scheduled payments or to refinance its debt obligations will depend upon
its future financial and operating performance, which will be affected by
prevailing economic conditions and financial, business and other factors,
certain of which are beyond its control. There can be no assurance that the
Company's operating results, cash flow and capital resources will be sufficient
for payment of its indebtedness in the future. In the absence of such operating
results and resources, the Company could face substantial liquidity problems and
might be required to dispose of material assets or operations to meet its debt
service and
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<PAGE>
other obligations, and there can be no assurance as to the timing of such sales
or the proceeds that the Company could realize therefrom. If the Company has
difficulty in servicing its indebtedness, it may be forced to take actions such
as reducing or delaying planned expansion and capital expenditures, selling
assets, restructuring or refinancing its indebtedness or seeking additional
equity capital. There can be no assurance that any of these strategies could be
effected on satisfactory terms, if at all.
An inability of the Company's subsidiaries to meet the financial
covenants contained in their indebtedness instruments could result in an
acceleration of amounts due thereunder. In the event the Company's subsidiaries
are unable to make required payments or otherwise comply with the terms of its
indebtedness, the holders of such indebtedness could accelerate the obligations
of the Company thereunder, which could result in the Company being forced to
seek protection under applicable bankruptcy laws or in an involuntary bankruptcy
proceeding being brought against the Company. If it becomes necessary for the
Company to refinance all or a portion of its indebtedness on or prior to
maturity there can be no assurance that the Company will be able to effect such
refinancing on commercially reasonable terms or at all.
A portion of the Company's outstanding indebtedness, including all
borrowings under the WPSC Revolving Credit Facility, the H&H Revolving Credit
Facility and the WPC Term Loan Agreement, bears interest at floating rates. As a
result, the Company's results of operations and ability to service its
indebtedness will be affected by future fluctuations in interest rates.
IMPACT OF STRIKE; RESUMPTION OF OPERATIONS
WPC's ten-month strike, which ended in August 1997 (the "Strike"), has
had a material adverse effect on WPC's and the Company's results of operations
and may continue to adversely affect WPC and the Company for the near future.
The Company reported losses for the fourth quarter of 1996 and each of the
quarters of 1997 of $34.6 million, $40.7 million, $31.1 million, $91.4 million
and $36.5 million, respectively. Included in the losses for the third and fourth
quarters of 1997 are pre-tax charges of $88.9 and $3.8 million, respectively,
primarily associated with the costs attributable to the New Labor Agreement. The
Company reported net income for the first two quarters of 1998 of $1.1 million
and $14.1 million, respectively, and net income of $8.9 million for the second
quarter of 1998. Although WPC is currently producing and shipping near its
pre-Strike production levels and shipping close to its historical mix of
products, there can be no assurance that such levels will be maintained.
SENSITIVITY OF RESULTS OF OPERATIONS TO REALIZED STEEL PRICES
The Company's results of operations are significantly affected by
relatively small variations (on a percentage basis) in the realized sales prices
of WPC's products, which, in turn, depend upon both the prevailing prices for
steel and the demand for particular products. During the first nine months of
1996, WPC shipped approximately 1.9 million tons, and realized an average sales
price per ton of approximately $514. A one percent decrease in this average
realized price would have resulted in a decrease in net sales and operating
income of approximately $9.8 million. WPC sells approximately 75% of its
products at spot prices (including shipments to joint ventures Wheeling-Nisshin,
Inc. ("W- N") and Ohio Coatings Company ("OCC") under supply contracts at prices
approximating spot prices). WPC believes its percentage of sales at spot prices
is higher than that of many of its domestic integrated competitors. WPC
therefore may be affected by steel price decreases more quickly than many of
WPC's competitors.
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<PAGE>
POSSIBILITY OF MONETARY AND INJUNCTIVE PENALTIES IN CONNECTION WITH SEC
ENFORCEMENT ACTION
On March 31, 1997, the Company through SB Acquisition Corp. ("SB
Acquisition"), a wholly-owned subsidiary, commenced a tender offer for shares of
Dynamics Corporation of America, Inc. ("DCA"), a NYSE-listed company. On April
14, 1997, DCA commenced an action against the Company in the United States
District Court for the District of Connecticut, alleging, among other things,
that the Company's tender offer violated Section 14(d) of the Exchange Act and
the rules thereunder (the "DCA Action"). The Company denied all allegations and
contested the action. On April 29, 1997, Judge Gerard L. Goettel of the United
States District Court, District of Connecticut, issued an order granting a
motion for a preliminary injunction filed by DCA against the Company and SB
Acquisition. The District Court found that the disclosure contained in the
Company's tender offer materials to DCA shareholders was improper because (i) it
stated that under certain circumstances the Company "may be required" to comply
with Section 912(b) of the New York Business Corporation Law and a provision in
DCA's charter, instead of disclosing that the Company "will be required" to do
so and (ii) it failed to disclose the Company's future plans in the event that
it was prohibited from merging with DCA for five years. The Court (i) directed
the Company and SB Acquisition to make "further and complete disclosures"
pertaining to those subjects described above and (ii) specified that such tender
offer be extended for an additional twenty days. This order was promptly
complied with in all respects by WHX and SB Acquisition. The DCA Action was
later discontinued by stipulation between the parties.
On April 8, 1997, the Commission entered an Order Directing Private
Investigation concerning possible violations of Sections 14(d) and 14(e) of the
Exchange Act and Rules 14d-10(a)(1) and 14e-1(b) thereunder in connection with
the Company's tender offer for DCA. The Company fully cooperated with this
investigation. The Staff of the Division of Enforcement of the Commission (the
"SEC Enforcement Staff") has advised the Company's counsel that the Commission
has authorized the initiation of administrative proceedings seeking a cease and
desist order pertaining to alleged violations of Section 14(d)(4) of the
Exchange Act and Rule 14d-10(a)(1) based on the Company's inclusion of a "record
holder condition" in the DCA tender offer. This condition was removed by the
Company shortly after the tender offer began and after the Commission had
granted authority to the SEC Enforcement Staff to seek injunctive relief. The
SEC Enforcement Staff also has advised the Company's counsel that the Commission
authorized the initiation of administrative proceedings seeking a cease and
desist order and disgorgement of profits, pertaining to alleged violations of
Section 14(d)(4) of the Exchange Act and Rules 14d-6(d) and 14d-4(c) in
connection with the Company's closing of the DCA tender offer on June 13, 1997.
The SEC Enforcement Staff has asserted that the decision to close the DCA tender
offer and purchase approximately 10% of DCA's outstanding shares was a material
change in the conditions of such offer, including its "poison pill condition,"
"New York Business Corporation Law condition" (NY BCL Section912(b)) and
"interfering transaction condition," each of which was effected without adequate
notice to DCA shareholders. According to the SEC Enforcement Staff, the tender
offer's conditions precluded the Company from closing as long as (i) DCA's
"poison pill" remained in place, even if the Company acquired shares
insufficient to trigger the "poison pill", (ii) the New York Business
Corporation Law condition could affect the intended merger with DCA, and (iii)
DCA's merger agreement with another company, CTS Corporation, remained in place.
On June 25, 1998, the Commission instituted an administrative
proceeding against the Company alleging that it had violated certain Commission
rules in connection with the tender offer for DCA commenced on March 31, 1997
through SB Acquisition Corp. (the "Offer"). Specifically, the Order instituting
Proceedings (the "Order") alleges that, in its initial form, the Offer violated
the "All Holders Rule," Rule 14d-10(a)(1) under the Exchange Act, based on the
Company's inclusion of a "record holder condition" in the Offer. No shareholder
had
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<PAGE>
tendered any shares at the time the condition was removed. The Order further
alleges that the Company violated Rules 14d-4(c) and 14d-6(d) under the Exchange
Act upon expiration of the Offer, by allegedly waiving material conditions to
the Offer without prior notice to shareholders and purchasing the approximately
10.6% of DCA's outstanding shares tendered pursuant to the offer. The SEC does
not claim that the Offer was intended to or in fact defrauded any investor.
The Order institutes proceedings to determine whether the Commission
should enter an order requiring the Company (a) to cease and desist from
committing or causing any future violation of the rules alleged to have been
violated and (b) to pay approximately $1.3 million in disgorgement of profits.
The Company has filed an Answer denying any violations and seeking dismissal of
the proceeding. Although there can be no assurance that an adverse decision will
not be rendered, the Company intends to vigorously defend against the SEC's
charges.
JOINT VENTURE OBLIGATIONS
WPC has certain commitments and contingent obligations with respect to
the OCC joint venture including the following: (i) WPC is required, along with
Dong Yang Tinplate Ltd. ("Dong Yang"), to contribute additional funds to OCC to
cover its pro rata share of any cost overruns and working capital needs of OCC
to the extent that OCC is unable to otherwise finance such amounts (the Company
anticipates that its pro rata share of such funding obligations will be between
$5.0 million and $10.0 million through December 31, 1998) and (ii) WPC is
jointly and severally liable, together with Dong Yang, to contribute to OCC,
either as a loan or a capital contribution, amounts sufficient to cure certain
defaults and violations of certain financial covenants of OCC under OCC's
borrowing facility if such violations should occur. The facility currently has a
maximum availability of $17.0 million. OCC is negotiating to increase such
borrowing facility from $17.0 million to $20.0 million and in connection
therewith Dong Yang and WPC may agree to jointly and severally guarantee all of
such obligations.
SUBSTANTIAL CAPITAL EXPENDITURE REQUIREMENTS
WPC operates in a capital intensive industry. From 1993 through 1997,
WPC's capital expenditures totalled approximately $289.3 million. This level of
capital expenditures was used to maintain productive capacity, improve
productivity and upgrade selected facilities to meet competitive requirements
and maintain compliance with environmental laws and regulations, including the
Clean Air Act Amendments of 1990. The Company anticipates that WPC will fund its
capital expenditures in 1998 from cash on hand, funds available from an
agreement to sell, up to $75.0 million on a revolving basis, an undivided
percentage ownership in a designated pool of accounts receivable generated by
WPC (the "Receivables Facility") and the WPSC Revolving Credit Facility and
funds generated by operations. Prior to the resolution of the Strike, WPC had
delayed most capital expenditures at the Strike-affected plants. The Company
anticipates that WPC's capital expenditures will approximate depreciation, on
average, over the next few years. There can be no assurance that the Company or
WPC will have adequate funds from operations to make all required capital
expenditures or that the amount of future capital expenditures will be
commensurate with historical averages.
UNCERTAINTY OF IMPACT OF FUTURE COLLECTIVE BARGAINING AGREEMENTS; POSSIBILITY OF
STRIKES
As of December 31, 1997, the United Steelworkers of America (the
"USWA") represented approximately 73% of the Company's employees. In August
1997, WPC and the USWA entered into the New Labor Agreement, which expires on
September 1, 2002. There can be no assurance as to the results of negotiations
of future collective bargaining agreements, whether future collective bargaining
agreements will be negotiated without production interruptions or the possible
impact of future collective bargaining agreements, or the negotiations thereof,
on the
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Company's financial condition and results of operations. In addition, there can
be no assurance that strikes will not occur in the future in connection with
labor negotiations or otherwise.
TRANSACTIONS WITH SUBSIDIARIES
WHX and WPC are jointly and severally obligated to make certain
payments to WPSC pursuant to the terms of a keepwell agreement entered into in
connection with the WPSC Revolving Credit Facility to maintain certain financial
ratios of WPSC. WPC has agreed to indemnify WHX with respect to any payments
made by WHX on account of WHX's obligations under such keepwell agreement. From
time to time, there may be intercompany indebtedness between WHX and WPC,
resulting from, among other things, the Tax Sharing Agreement between WPC and
WHX (the "Tax Sharing Agreement"), providing for the manner of determining
payments with respect to federal income tax liabilities and benefits arising
during all periods in which it has been or will be a wholly-owned subsidiary of
WHX. To the extent WHX has net liabilities due WPC, it may ultimately be
required to satisfy such obligations. If WPC is obligated to reimburse WHX for
keepwell payments, WPC's obligation to repay such advances is subordinated to
the repayment obligations on the WPC 9 1/4% Notes.
CYCLICALITY
Historically, steel industry performance has been cyclical in nature,
reflecting changes in industry capacity as well as the cyclicality of many of
the principal markets it serves, including the automotive, appliance and
construction industries. Although total domestic steel industry capacity was
substantially reduced during the 1980s through extensive restructuring, and
demand has been particularly strong since 1993, with domestic steel industry
earnings strong during the 1994-1997 period, there can be no assurance that
demand will continue at current levels or that the addition of new minimills and
recent restarts of previously idled domestic facilities will not adversely
impact pricing and margins.
Additionally, the business operations and profitability of H&H are also
affected by general economic conditions, including the cyclicality of many of
the principal markets H&H serves, including the automotive, appliance and
construction industries. A significant economic downturn could have a material
adverse impact on the profitability of H&H.
POSSIBLE FLUCTUATIONS IN THE COST OF RAW MATERIALS
WPC's operations require substantial amounts of raw materials,
including various types of iron ore pellets, steel scrap, coal, zinc, oxygen,
natural gas and electricity. The price and availability of these raw materials
are subject to steel industry and general market conditions affecting supply and
demand. Furthermore, worldwide competition in the steel industry has frequently
limited the ability of steel producers to raise finished product prices to
recover higher raw material costs. WPC's future profitability may be adversely
affected to the extent it is unable to pass on higher raw material costs to its
customers. In addition, the Company owns a substantial inventory of precious
metals, including gold, silver and palladium group metals, the prices of which
fluctuate on a daily basis. A significant decline in the prices of some or all
of these metals could have an adverse impact on the financial results of the
Company.
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COMPETITION
The domestic steel industry is highly competitive. Despite significant
reductions in raw steel production capacity by major domestic producers in the
1980s, partially offset by the recent minimill capacity additions and joint
ventures, the domestic industry continues to be threatened by excess world
capacity.
WPC faces increasing competitive pressures from other domestic
integrated producers, minimills and processors. Processors compete with WPC in
the areas of slitting, cold rolling and coating. Minimills are generally smaller
volume steel producers that use ferrous scrap metals as their basic raw
material. Compared to integrated producers, minimills, which rely on less labor
and capital intensive steel production methods, have certain advantages. Since
minimills typically are not unionized, they have more flexible work rules that
have resulted in lower employment costs per net ton shipped. Since 1989,
significant flat rolled minimill capacity has been constructed and these
minimills now compete with integrated producers in product areas that
traditionally have not faced significant competition from minimills. In
addition, there is significant additional flat rolled minimill capacity under
construction or announced with various planned commissioning dates in 1998 and
1999. Near term, these minimills and processors are expected to compete with WPC
primarily in the commodity flat rolled steel market. In the long-term, such
minimills and processors may also compete with WPC in producing value-added
products. In addition, the increased competition in commodity product markets
may influence certain integrated producers to increase product offerings to
compete with WPC's custom products.
During the early 1990s, the domestic steel market experienced
significant increases in imports of foreign produced flat rolled products. The
level of imports, however, after declining somewhat in late 1995 and early 1996,
increased in 1997. The strength of the U.S. dollar and economy, as well as the
strength of foreign economies, can significantly affect the import/export trade
balance for flat rolled steel products. The status of the trade balance may
significantly affect the ability of the new minimill capacity to come on-line
without disrupting the domestic flat rolled steel market.
Wheeling Corrugating and WPC's other fabricating operations compete in
a large number of regional markets with numerous other fabricating operations,
most of which are independent of the major integrated manufacturers. Independent
fabricators generally are able to acquire flat rolled steel products, their
basic raw material, at prevailing market prices. There are few barriers to entry
into the manufacture of fabricated products in certain individual markets
currently served by Wheeling Corrugating (although the geographic breadth of the
markets served by Wheeling Corrugating would be hard to replicate). Other
competitors, including domestic integrated producers and minimills, may decide
to manufacture fabricated products and compete with Wheeling Corrugating in its
markets. Such competition may negatively affect prices that may be obtained in
certain markets by WPC for its fabricated products. Many of Wheeling
Corrugating's competitors do not have a unionized workforce and, therefore, may
have lower operating costs than Wheeling Corrugating.
Materials such as aluminum, cement, composites, glass and plastics
compete as substitutes for steel in many markets.
COSTS OF COMPLYING WITH ENVIRONMENTAL STANDARDS
The Company, including WPC, and other steel producers have become
subject to increasingly stringent environmental standards imposed by Federal,
state and local environmental laws and regulations. WPC has expended, and can be
expected to be required to expend in the future, significant amounts for
installation of environmental control facilities, remediation of environmental
conditions and other similar matters. The costs of complying with such stringent
environmental
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standards as the new ambient air quality standards for ozone and PM2.5 as well
as the climate change treaty negotiations may cause WPC and other domestic steel
producers to be competitively disadvantaged vis-a-vis foreign steel producers
and producers of steel substitutes, who may be subject to less stringent
standards. WPC has also been identified as a potentially responsible party at
five "Superfund" sites and has been alleged to be a potentially responsible
party at two other "Superfund" sites. The Superfund law imposes strict, joint
and several liability upon potentially responsible parties.
USE OF PROCEEDS
The Company will receive the exercise price of the options when
exercised by the holders thereof or the issuance of shares under the 401(k)
Plan. Such proceeds will be used for working capital purposes by the Company.
The Company will not receive any of the proceeds from the reoffer and resale of
the Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
This Prospectus relates to the reoffer and resale of Shares issued or
that may be issued to the Selling Shareholders under the 1997 Plan, the 1991
Plan or the 401(K) Plan.
The following table sets forth (i) the number of shares of Common Stock
owned by each Selling Shareholder at September 1, 1998, (ii) the number of
Shares to be offered for resale by each Selling Shareholder and (iii) the number
and percentage of shares of Common Stock to be held by each Selling Shareholder
after completion of the offering.
<TABLE>
<CAPTION>
Number of shares of
Common Stock/
Number of shares of Number of Percentage of Class to
Common Stock Owned at Shares to be be Owned After
Offered for Completion of the
Name September 1, 1998 Resale Offering(1)
- ----------------------------------- -------------------------- ----------------- --------------------------
<S> <C> <C> <C>
Neil D. Arnold (2) 26,666(3) 30,000(10) 26,666/*
Paul W. Bucha(5) 26,666(3) 30,000(10) 26,666/*
Robert A. Davidow(5) 126,737(7) 30,000(10) 126,737/*
William Goldsmith(6) 37,333(3) 30,000(10) 37,333/*
Marvin L. Olshan(5) 38,333(7) 30,000(10) 38,333/*
Raymond S. Troubh(2) 34,666(8) 30,000(10) 34,666/*
James G. Bradley(9) 0 260,000(10) 0/0
</TABLE>
* Less than 1%.
(1) Assumes that all Common Stock offered by the Selling Stockholders is
sold and that no other shares of Common Stock owned by the Selling
Stockholders are sold.
(2) Has been a Director of the Company since 1992.
(3) Consists of shares issuable upon the exercise of options presently
exercisable or exercisable within 60 days hereof.
(4) Has been a Director of the Company since 1993. (5) Has been a Director
of the Company since 1991. (6) Has been a Director of the Company since
1987.
(7) Consists of shares issuable upon the exercise of options presently
exercisable or exercisable within 60 days hereof.
(8) Consists of shares issuable upon the exercise of options presently
exercisable or exercisable within 60 days hereof.
(9) Has been Executive Vice President of the Company and President and
Chief Executive Officer of WPSC since April 1998.
(10) Includes shares issuable upon the exercise of options which are not
presently exercisable within 60 days hereof.
-12-
<PAGE>
PLAN OF DISTRIBUTION
It is anticipated that all of the Shares will be offered by the Selling
Shareholders from time to time in the open market, either directly or through
brokers or agents, or in privately negotiated transactions. The Selling
Shareholders have advised the Company that they are not parties to any
agreement, arrangement or understanding as to such sales.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the Shares
offered hereby have been passed upon for the Company by Olshan Grundman Frome &
Rosenzweig LLP, New York, New York 10022. Marvin L. Olshan, a member of Olshan
Grundman Frome & Rosenzweig LLP, is a director and secretary of the Company.
Marvin L. Olshan and other members of Olshan Grundman Frome & Rosenzweig LLP own
shares of Common Stock and hold options to purchase Common Stock of the Company.
EXPERTS
The financial statements incorporated in this Registration Statement on
Form S-8 by reference to the Annual Report on Form 10-K of WHX Corporation for
the year ended December 31, 1997, and the audited historical financial
statements included within Item 7(a) of WHX Corporation's Form 8-K dated April
14, 1998, have been audited by various independent accountants. The companies
and periods covered by these audits are indicated in the individual accountants'
reports. Such financial statements have been so included in reliance on the
reports of the various independent accountants given on the authority of such
firms as experts in auditing and accounting.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission three
Registration Statements on Form S-8 under the Securities Act with respect to the
Shares offered hereby. For further information with respect to the Company and
the securities offered hereby, reference is made to the Registration Statements.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance, reference is
made to the copy of such contract or document filed as an exhibit to the
Registration Statements, each such statement being qualified in all respects by
such reference.
-13-
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference and made a
part hereof:
(a) The Company's annual report on Form 10-K for the fiscal
year ended December 31, 1997, as amended;
(b) The Company's quarterly reports on Form 10-Q for the three
months ended March 31, 1998 and June 30, 1998; and
(c) The Company's current reports on Form 8-K dated June 22,
1998, June 10, 1998, April 14, 1998 and March 31, 1998.
The description of the Common Stock contained in the Company's
Registration Statement on Form 8-B filed June 24, 1994.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Marvin Olshan, a member of Olshan Grundman Frome & Rosenzweig LLP, is a
director and Secretary of the Company and owns 1,000 shares of Common Stock of
the Company and options to purchase 70,000 shares of Common Stock. Steven
Wolosky, also a member of Olshan Grundman Frome & Rosenzweig LLP, is Assistant
Secretary of the Company and holds options to purchase 23,500 shares of Common
Stock.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company was incorporated in Delaware. Article NINTH, Section A of
the Certificate of Incorporation of the Company provides as follows:
NINTH: A. A director of the Corporation shall not 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 Delaware General Corporation Law
(the "GCL"), or (iv) for any transaction from which the director
derived an improper personal benefit. If the GCL 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 GCL, as so amended. Any repeal or modification of this
Section A by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the
II-1
<PAGE>
Corporation with respect to events occurring prior to the time of such
repeal or modification.
Article NINTH, Section B of the Certificate of Incorporation of the
Company provides as follows:
B. (1) Each person who was or is made a party or is threatened
to be made a party to or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she or a person of whom
he or she is the legal representative is or was a director, officer or
employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans,
whether the basis of such proceedings is alleged action in an official
capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall
be indemnified and held harmless by the Corporation to the fullest
extent authorized by the GCL as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability and
loss (including attorney's fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that
except as provided in paragraph (2) of this Section B with respect to
proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person
only if such proceeding (or part thereof) was authorized by the Board
of Directors of the Corporation. The right to indemnification conferred
in this Section B shall be a contract right and shall include the right
to be paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however,
that if the GCL requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or officer
(and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only under delivery to the
Corporation of an undertaking by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be
indemnified under this Section B or otherwise.
(2) If a claim under paragraph (1) of this Section B is not
paid in full by the Corporation within thirty days after a written
claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation)
that the Claimant has not met the standards of conduct which make it
permissible under the GCL for the Corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel
II-2
<PAGE>
or stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of
conduct set forth in the GCL, nor an actual determination by the
Corporation (including its Board of Directors, independent legal
counsel or stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of
conduct.
(3) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition
conferred in this Section B shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, By-Law, agreement, vote
of stockholders or disinterested directors or otherwise.
(4) The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the General Corporation
Law of the State of Delaware.
(5) The Corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification, and
rights to be paid by the Corporation the expenses incurred in defending
any proceeding in advance of its final disposition, to any agent of the
Corporation to the fullest extent of the provisions of this Section B
with respect to the indemnification and advancement of expenses of
directors, officers and employees of the Corporation.
See Item 9(c) below for information regarding the position of the
Commission with respect to the effect of any indemnification for liabilities
arising under the Securities Act of 1933, as amended.
Section 145 of the Delaware General Corporation Law provides as
follows:
(a) A corporation shall have power 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 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 the person in connection with such action, suit
or proceeding if the person acted in good faith and in a manner the
person 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 the person's conduct
was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which the person 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 reasonable cause to believe that the person's
conduct was unlawful.
II-3
<PAGE>
(b) A corporation shall have power 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 the person 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) actually and reasonably
incurred by the person in connection with the defense or settlement of
such action or suit if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged 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.
(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in 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.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by a majority vote of the directors who
are not parties to such action, suit or proceeding, even though less
than a quorum, or (2) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion
or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorneys' fees) incurred by
other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request
II-4
<PAGE>
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
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
liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the corporation" as
referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section 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 the heirs, executors and administrators of such a
person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligation to advance expenses (including attorneys'
fees).
The Company maintains a directors and officers insurance and company
reimbursement policy. The policy insures directors and officers against
unindemnified loss arising from certain wrongful acts in their capacities and
reimburses the Company for such loss for which the Company has lawfully
indemnified the directors and officers. The policy contains various exclusions,
none of which relate to the offering hereunder. The Company also has agreements
with its directors and officers providing for the indemnification thereof under
certain circumstances.
II-5
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
*4(a) - Certificate of Incorporation of the Company (Exhibit 3.2
to Registrant's Registration Statement on Form S-4 filed
May 12, 1994) (Reg. No. 33-53591) (the "Merger Proxy")).
*4(b) - Bylaws of the Company (Exhibit 3.4 to the Merger Proxy).
4(c) - Handy & Harman's 401(k) Retirement and Savings Plan.
*4(d) - The Company's 1991 Incentive and Nonqualified Stock Option
Plan (Exhibit 4(c)) to the Company's Registration
Statement on Form S-8 filed with the Commission (Reg. No.
33-53037).
4(e) - Amendment No. 3 to the Company's 1991 Incentive and
Nonqualified Stock Option Plan.
4(f) - The Company's 1997 Directors Stock Option Plan.
5 - Opinion of Olshan Grundman Frome & Rosenzweig LLP.
23(a) - Consent of PricewaterhouseCoopers LLP, independent public
accountants.
23(b) - Consent of KPMG Peat Marwick LLP, independent public
accountants.
*24(b) - Consent of Olshan Grundman Frome & Rosenzweig LLP
(included in its opinion filed as Exhibit 5).
25 - Powers of Attorney (included on page II-11).
- ------------------
* Indicates exhibits incorporated by reference herein.
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(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;
II-6
<PAGE>
provided, however, that paragraphs (i) and (ii) above
do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement;
(2) That, for the purposes 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; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered that remain unsold at the termination of
the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to 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.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the 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 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 a
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
1933 and will be governed by the final adjudication of such
issue.
D. The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, a copy of the
registrant's latest annual report to stockholders that is
incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each
person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
II-7
<PAGE>
E. The undersigned registrant hereby undertakes that it has
submitted the plan and any amendments thereto to the Internal
Revenue Service ("IRS") in a timely manner and has made or
will make all changes required by the IRS in order to qualify
the plan.
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 21st day of
September, 1998.
WHX CORPORATION
/S/ RONALD LABOW
-----------------------------------------
Ronald LaBow, Principal Executive Officer
POWER OF ATTORNEYS AND SIGNATORIES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each of the undersigned officers and
directors of the Registrant hereby constitutes and appoints Ronald LaBow and
Marvin Olshan, and each of them singly, as true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him in his name
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and to prepare any and all exhibits thereto,
and other documents in connection therewith, and to make any applicable state
securities law or blue sky filings, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or necessary to be done to enable the Registrant to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ RONALD LABOW Director (Principal Executive September 21, 1998
- ---------------------- Officer)
Ronald LaBow
/S/ ARNOLD NANCE (Principal Financial Officer September 21, 1998
- ---------------------- and Principal Accounting
Arnold Nance Officer)
/S/ NEIL D. ARNOLD Director September 21, 1998
- ----------------------
Neil D. Arnold
/S/ PAUL W. BUCHA Director September 21, 1998
- ----------------------
Paul W. Bucha
II-8
<PAGE>
/S/ ROBERT A. DAVIDOW Director September 21, 1998
- ----------------------
Robert A. Davidow
/S/ WILLIAM GOLDSMITH Director September 21, 1998
- ----------------------
William Goldsmith
/S/ MARVIN OLSHAN Director September 21, 1998
- ----------------------
Marvin Olshan
/S/ RAYMOND S. TROUBH Director September 21, 1998
- ----------------------
Raymond S. Troubh
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
members of the Handy & Harman Savings Plan Administrative Committee have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on this 23rd day of September, 1998.
/S/ PAUL E. DIXON
-----------------
Paul E. Dixon
================================================================================
T. ROWE PRICE TRUST COMPANY
401(K) RETIREMENT PLAN
ADOPTION AGREEMENT
- --------------------------------------------------------------------------------
This Handy & Harman Savings Plan is the
continuation of the Handy & Harman Employee
Stock Purchase Plan as heretofore amended and
restated effective January 1, 1987 and now as
amended and restated effective May 1, 1991.
- --------------------------------------------------------------------------------
1. PLAN DATA. NA (a) New Plan.
(Fill out (a) or (b)
and (c), (d), (e) and (f) (1) The name of the Plan and Trust
shall be ___________________
(2) The Effective Date of the Plan and
Trust is: (Should be the first day
of the Plan Year in which the Plan
is adopted).
(3) The Plan Year End is ____________,
the Limitation Year End is
__________
- --------------------------------------------------------------------------------
(b) Amended and Restated Plan.
(1) Name of Plan: HANDY & HARMAN
SAVINGS PLAN
(2) Date Adopted: DECEMBER 22, 1983
Effective Date: JANUARY 1, 1983
(3) Effective Date of Amended Plan:
MAY 1, 1991
(4) The Plan Year End is 12/31, the
Limitation Year End is 12/31
- --------------------------------------------------------------------------------
(c) Employer shall mean:
Employer shall also mean the following
Employer(s) associated under sections
414(b), 414(c) or 414(m) of the Code:
HANDY & HARMAN, EACH CORPORATION AS TO
WHICH HANDY & HARMAN IS THE SUCCESSOR,
AND ANY OTHER CORPORATION MORE THAN
50% OF WHOSE OUTSTANDING VOTING STOCK
IS OWNED, DIRECTLY OR INDIRECTLY, BY
HANDY & HARMAN.
- --------------------------------------------------------------------------------
(d) Employer's Taxable Year End:
DECEMBER 31, ___________________
- --------------------------------------------------------------------------------
(e) Employer's Tax ID#: 13-5129420
- --------------------------------------------------------------------------------
(f) The Employer is: /X/ a corporate
entity / /a non-corporate entity / /a
corporation electing Subchapter S
treatment.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
2. ELIGIBILITY. NOTE: If the year(s) of service selected is or
(Plan Section 2.2) includes a fractional (Plan Section 2.2)
year, an employee will not be required
to complete any specified number of
hours of service to receive credit for
such fractional year.
(a) All Employees shall be eligible to
participate in this Plan in accordance
with the provisions of Article II of the
Plan, except the following:
/ / Employees who have not attained age
21;
/X/ Employees who have not completed 3
months (not to exceed 12 months) of
service;
/ / Employees who have not completed
one (1) Year of Service.
/X/ Employees included in a unit of
Employees covered by a collective
bargaining agreement, if retirement
benefits were the subject of good
faith bargaining between the
Employer and Employee
representatives. Employee
representatives do not include any
organization more than half of
whose members are Employees who are
owners, officers, or executives of
the Employer;
/X/ Employees who are nonresident
aliens and who receive no earned
income from the Employer which
constitutes income from sources
within the United States.
/ / Employees included in the following
job classifications:
/ / Hourly Employees
/ / Salaried Employees
/X/ Employees of the following
Employers under sections 414(b),
414(c) or 414(m) of the Code:
BIGELOW COMPONENTS CORPORATION
(#22-1599735)
Note: If no entries are made above, all
Employees shall be eligible to
participate in the Plan on the earlier
of the Effective Date or the Entry Date
coincident with or next following date
of employment.
- --------------------------------------------------------------------------------
-2-
<PAGE>
- --------------------------------------------------------------------------------
(b) The Entry Dates shall be: (Plan Section
1.21)
(1) /X/ The first day of the Plan Year
and the first day of the seventh
(7th) month in the Plan Year;
(2) / / The first day of the Plan Year
and the first day of each month
thereafter.
(3) / / The first day of each Plan Year
and the first day of each month
thereafter.
- --------------------------------------------------------------------------------
3. CREDITING OF (a) Service shall be credited based on the
SERVICE. following method (Choose(1) or (2)):
(Plan Section 2.3)
(1) / / HOURS OF SERVICE - Under this
method, a "Year of Service" is a
12 consecutive month period
during which the employee
completes at least 1,000 hours.
Hours of Service will be
determined on the basis of the
method selected below. Only one
method may be selected. The
method selected will be applied
to all employees covered under
the plan.
(i) / / On the basis of actual
hours for which an
employee is unpaid or
entitled to payment.
(ii) / / On the basis of days
worked. An employee will
be credited with ten (10)
hours of service if under
Section 1.25 of the Plan
such employee would be
credited with at least
one (1) hour of service
during the day.
(iii / / On the basis of weeks
worked. An employee will
be credited with
forty-five (45) hours of
service if under Section
1.25 of the Plan such
employee would be
credited with at least
one (1) hour of service
during the week.
(iv) / / On the basis of
semimonthly payroll
periods. An employee will
be credited with
ninety-five (95) hours of
service if under Section
1.25 of the Plan such
employee would be
credited with at least
one (1) hour of service
during the semimonthly
payroll period.
(v) / / On the basis of months
worked. An employee will
be credited with one
hundred ninety (190)
hours of service if under
Section 1.25 of the Plan
such employee would be
credited with at least
one (1) hour of service
during the month.
- --------------------------------------------------------------------------------
-3-
<PAGE>
- --------------------------------------------------------------------------------
(2) /X/ Elapsed Time. Under this method,
Service is measured from --- -
date of employment to date of
termination and a Period of
Service shall include any Period
of Severance of less than 12
consecutive months. (Plan
Section 1.15)
(b) Service with Predecessor
Employer. (Plan Section 2.3)
(1) /X/ No credit will be given
for services with a
predecessor Employer; or
(2) / / Credit will be given for
service with the
following predecessor
Employer:
Note: The plan provides that if this
is a continuation of a
Predecessor Plan, Service under
the Predecessor Plan must be
counted.
- --------------------------------------------------------------------------------
4. COMPENSATION. (a) Compensation will mean all of
(Plan Section 1.9) each Participant's
/X/ W-2 earnings
/ / compensation (as that term is
defined in section 415(c)(3) of
the Code) which is actually paid
to the Participant during
/X/ the Plan Year
/ / the taxable year ending with or
within the Plan Year
/ / the limitation year ending with
or within the Plan Year,
(b) Compensation
/X/ shall include
/ / shall not include
Employer Contributions made pursuant to a
salary reduction agreement which are not
includible in the gross income of the
Employee under sections 125, 402(a)(8),
402(h) or 403(b) of the Code.
- --------------------------------------------------------------------------------
-4-
<PAGE>
- --------------------------------------------------------------------------------
5. CALENDAR YEAR The Employer may elect to use the calendar
ELECTION FOR year to determine whether an Employee is a
DETERMINING Highly Compensated Employee in the look-back
HIGHLY year (as determined in Treasury Regulations
COMPENSATED under section 414(q) of the Code) calculation.
EMPLOYEE. The calendar year used will be the calendar
(Plan Section 1.24) year ending with or within the determination
year (as defined in the regulations under
section 414(q) of the Code). The determination
year shall be the months (if any) in the
current Plan Year which end of the calendar
look-back year. If the Employer elects to make
the calendar year calculation election with
respect to any Plan, entity or arrangement,
such election must apply with respect to all
plans, entities and arrangements of the
Employer.
/X/ Employer elects to use the calendar year
to determine whether an Employee is a
Highly Compensated Employee in the
look-back year.
- --------------------------------------------------------------------------------
6. CONTRIBUTIONS. Note: Employer Contributions, Elective
(Choose (a), (b), Deferrals and Matching Contributions
(c), (d) and/or (e)): in the aggregate may not exceed 15% of
all Participants' Compensation.
(a) /X/ Discretionary Employer Contributions.
(Plan Section 3.2(b))
The Employer may contribute to the
Plan each year such amount as
determined by Employer resolution. If
no resolution is adopted, then 0% of
Participants' Compensation.
- --------------------------------------------------------------------------------
(b) /X/ Qualified Non-Elective Contributions.
(1) The Employer (Choose one): /X/ will
make / / will not make Qualified
Non-Elective Contributions to the
Plan. If the Employer does make such
contributions to the Plan, then the
amount of such contributions for each
Plan Year shall be (Choose one):
(i) / / ____% (not to exceed 15%)
of the Compensation of all
Participants eligible to
share in the allocation.
(ii) / / ____% of the net profits,
but in no event more than
[$______] for any Plan
Year.
(iii) /X/ An amount determined by the
Employer.
- --------------------------------------------------------------------------------
(2) Allocation of Qualified Non-Elective
Contributions shall be made to the
accounts of (Choose one):
(i) / / All Participants.
(ii) /X/ Only Non-Highly Compensated
Participants.
- --------------------------------------------------------------------------------
-5-
<PAGE>
- --------------------------------------------------------------------------------
(3) Allocation of Qualified Non-Elective
Contributions shall be made (Choose
one):
(i) /X/ In the ratio which each
Participant's Compensation
for the Plan Year bears to
the total Compensation of
all Participants for such
Plan Year.
(ii) / / In the ratio which each
Participant's Compensation
not in excess of [$_____]
for the Plan Year bears to
the total Compensation of
all Participants not in
excess of [$____] for such
Plan year.
- --------------------------------------------------------------------------------
(c) /X/ Elective Deferrals. (Choose (1) and/or
(2):
NA (1) CASH OR DEFERRED OPTION. (Plan Section
3.1(b)) Choose (i) and/or (ii)):
(i) / / The Employer may make
Discretionary Employer
Contributions to the Plan
in such amount as
determined by Employer
Resolution. If no
resolution is adopted, then
___% of a Participant's
Compensation. A Participant
may elect to receive __% of
his allocable share of such
contributions in cash or
defer such amount under the
Plan.
(ii) / / A Participant may base
Elective Deferrals on cash
bonuses that, at the
Participant's election, may
be received in cash or
deferred under the Plan.
- --------------------------------------------------------------------------------
(2) Salary Deferrals. (Plan Section
3.1(a)) (Choose (i), and/or (ii) or
(iii)):
(i) /X/ A Participant may elect to
defer an amount not in
excess of 10% of his or her
compensation in accordance
with a salary reduction
agreement signed by such
Participant.
(ii) / / A Participant may elect to
defer an amount not in
excess of $_____ of his or
her compensation in
accordance with a salary
reduction agreement signed
by such Participant.
(iii) / / A Participant may elect to
defer an amount not in
excess of $7,000, as
adjusted for cost of living
increases pursuant to
regulations prescribed by
the Secretary of the
Treasury under section
415(d) of the Code, of his
or her compensation in
accordance with a salary
reduction agreement signed
by such Participant.
NOTE: A Participant's total Elective
Deferrals during any calendar year
shall not exceed $7,000 (as adjusted
for cost-of-living increases as defined
in Plan Section 1.10).
- --------------------------------------------------------------------------------
-6-
<PAGE>
- --------------------------------------------------------------------------------
(d) /X/ Employer Matching Contributions.
(Plan Section 3.2(a))
(1) The Employer shall make Matching
Contributions to the Plan on behalf of
(Choose (i) or (ii), and/or (iii)):
(i) /X/ All Participants who make
Elective Deferrals;
(ii) / / All Participants who are
Non-Highly Compensated
Employees and who make
Elective Deferrals;
(iii / / All Participants who make
Voluntary Employee
Contributions (after-tax
contributions).
- --------------------------------------------------------------------------------
(2) Matching Contributions will be (Choose
(i) or (ii)):
(i) /X/ Nonforfeitable when made;
(ii) / / Subject to the vesting
schedule applicable to
Employer Contributions
other than Elective
Deferrals and Qualified
Non-Elective Contributions.
(3) The Employer shall contribute and
allocate to each Participant's
Matching Contributions Account an
amount equal to (Choose (i) and/or
(ii)):
(i) /X/ 50% of the Participant's
Elective Deferrals.
(ii) / / __% of the Participant's
Employee Contributions.
The Employer shall not match amounts
provided above in excess of [$N/A], or
in excess of [2]% of the Participant's
Compensation.
- --------------------------------------------------------------------------------
N/A (e) Qualified Matching Contributions.
(1) The Employer will make Qualified
Matching Contributions to the
Plan on behalf of (Choose one):
(i) / / all Participants
(ii) / / all Participants who
are Non-Highly
Compensated Employees
who make (Choose one or
both):
(i) / / Elective Deferrals;
(ii) / / Voluntary Employee
Contributions to the
Plan.
-7-
<PAGE>
- --------------------------------------------------------------------------------
(2) The Employer shall contribute
and allocate to each
Participant's Qualified Matching
Contributions Account an amount
equal to (Choose one (i) and/or
(ii)):
(i) / / ___% of the
Participant's Elective
Deferrals;
(ii) / / ___% of the
Voluntary Employee
Contributions.
The Employer shall not match amounts
provided above in excess of [$____],
or in excess of [____]% of the
Participant's Compensation.
- --------------------------------------------------------------------------------
(f) Voluntary Employee Contributions
(Plan Section 3.3) (Choose (1)
or (2)):
(1) / / A Participant may make
Voluntary Employee
Contributions to the
Plan for a Plan Year
not in excess of ___%
of Compensation.
(2) /X/ Voluntary Employee
Contributions shall
not be permitted.
NOTE: If the Employer wishes to
utilize Recharacterization
(3.7(e)), he must choose option
(1).
- --------------------------------------------------------------------------------
(g) Contributions Made Out of Net
Profits (Plan Section 3.4)
(Choose (1) or (2)):
(1) /X/ The Employer shall make
all contributions to
the Plan without regard
to current or
accumulated earnings
and profits for the
taxable year ending
with or within the Plan
Year.
(2) / / The Employer shall make
all contributions to
the Plan to the extent
such Employer has
current or accumulated
earnings and profits
for the taxable year
ending with or within
the Plan Year.
N/A (h) Pursuant to Section 13.1(b) of
the Plan, an Employer may amend
the Plan to add such language as
is necessary to satisfy Code
sections 415 and 416.
- --------------------------------------------------------------------------------
-8-
<PAGE>
- --------------------------------------------------------------------------------
(i) Actual Deferral Percentage Test.
(Plan Section 3.7)
(1) Qualified Matching
Contributions and Qualified
Non-Elective Contributions
may be taken into account as
Elective Deferrals for
purposes of calculating the
Actual Deferral Percentages.
In determining Elective
Deferrals for the purpose of
the ADP test, the Employer
shall include (Choose, as
appropriate):
(i) /X/ Qualified Matching
Contributions;
(ii)/X/ Qualified Non-
Elective
Contributions
under this Plan or any other
plan of the Employer, as
provided by regulations
under the Code.
(2) The amount of Qualified
Matching Contributions made
under Section 3.2(d) of the
Plan and taken into account
as Elective Deferrals for
purposes of calculating the
Actual Deferral Percentage,
subject to such other
requirements as may be
prescribed by the Secretary
of the Treasury, shall be:
(i) / / all such Qualified
Matching
Contributions.
(ii)/X/ such Qualified
Matching
Contributions that
are needed to meet
the Actual Deferral
Percentage test
stated in Section
3.7 of the Plan.
- --------------------------------------------------------------------------------
(3) The amount of Qualified
Non-Elective Contributions
made under Section 3.7(f) of
this Plan and taken into
account as Elective
Deferrals for purposes
calculating the Actual
Deferral Percentage, subject
to such other requirements
as may be prescribed by the
Secretary of the Treasury,
shall be:
(i) / / all such Qualified
Non-Elective
Contributions.
(ii)/X/ Such Qualified
Non-Elective
Contributions that
are needed to meet
the Actual Deferral
Percentage test
stated in Section
3.7 of the Plan.
- --------------------------------------------------------------------------------
-9-
<PAGE>
- --------------------------------------------------------------------------------
(j) Actual Contribution Percentage
Test. (Plan Section 3.8)
(1) In computing the Average
Contribution Percentage, the
Employer shall take into
account and include as
Contribution Percentage
Amounts:
(i) /X/ Elective Deferrals;
(ii) /X/ Qualified
Non-Elective
Contributions
under this Plan or any other plan
of the Employer, as provided by
regulations.
(2) The amount of Qualified
Non-Elective Contributions
that are made under Section
3.7(f) of this Plan and
taken into account as
Contribution Percentage
Amounts for purposes of
calculating the Average
Contribution Percentage,
subject to such other
requirements as may be
prescribed by the Secretary
of the Treasury, shall be:
(i) / / All such Qualified
Non-Elective
Contributions.
(ii)/X/ Such Qualified
Non-Elective
Contributions that
are needed to meet
the Average
Contribution
Percentage test
stated in Section
3.8 of the Plan.
- --------------------------------------------------------------------------------
(3) The amount of Elective
Deferrals made under Section
3.1 of the Plan and taken
into account as Contribution
Percentage Amounts for
purposes of calculating the
Average Contribution
Percentage, subject to such
other requirements as may be
prescribed by the Secretary
of the Treasury, shall be:
(i) / / All such Elective
Deferrals.
(ii) /X/ Such Elective
Deferrals that are
needed to meet the
Average Contribution
Percentage test
stated in Section
3.8 of the Plan.
- --------------------------------------------------------------------------------
-10-
<PAGE>
- --------------------------------------------------------------------------------
7. ALLOCATION OF NOTE: Discretionary Employer Contributions
EMPLOYER shall be allocated to a Participant's
CONTRIBUTIONS account in the same proportion as such
Participant's Compensation bears to the
Compensation of all participants. (Plan
Section 3.2(b) (Choose (a), (b) or
(c)):
(a) / / A Participant shall be eligible
to share in Discretionary
Employer Contributions for the
Plan Year only if he:
(1) retires, dies, or becomes
totally and permanently
disabled; or
(2) completes 1,000 Hours of
Service and is employed on
the last day of the Plan
Year.
(b) / / A Participant shall share in
Discretionary Employer
Contributions for the Plan Year
in which he terminates
employment prior to the last
day of the Plan Year provided
such Participant has completed
1,000 Hours of Service.
(c)/X/ If the Employer has elected to
credit service under elapsed
time, a Participant shall share
in Discretionary Contributions
if such Participant is employed
on the last day of the Plan
Year.
- --------------------------------------------------------------------------------
8. FORFEITURES. (a) Forfeiture of Discretionary Employer
Contributions under Section 6.4(c) of the
Plan shall be (Choose (1) or (2)):
NA (1) / / Used to reduce Employer
Contributions.
(2) / / Allocated among other Participants
in the same proportion that each
Participant's Compensation for the
Plan Year bears to the
Compensation of all Participants
for such Plan Year.
(b) Excess Aggregate Contributions under
Section 3.8(d) of the Plan shall be
(Choose (1) or (2)):
(1) / / Forfeited and used to reduce
Employer Contributions.
(2) / / Forfeited and allocated, after
all other forfeitures under the
Plan, to each Participant's
Matching Contribution Account in
the same proportion that each
Participant's Compensation for
the Plan Year bears to the total
Compensation of all Participants
for such Plan Year. Such
forfeitures SHALL NOT be
allocated to the account of any
Highly Compensated Employee.
NOTE: If Matching Contributions are
nonforfeitable when made, this
provision (b) shall not apply and
Excess Aggregate Contributions will be
distributed in accordance with Section
3.8(d) of the Plan.
- --------------------------------------------------------------------------------
-11-
<PAGE>
- --------------------------------------------------------------------------------
9. ROLLOVERS AND PLAN- (a) Rollovers
TO-PLAN TRANSFERS.
(Plan Section 3.6) (1) /X/ The Plan permits rollovers.
(Choose (a) and/or (b)):
(2) // The Plan does not permit rollovers.
(b) Plan-to-Plan Transfers
(1) /X/ The Plan permits plan-to-plan
transfers.
(2) / / The Plan does not permit plan-to-
plan transfers.
- --------------------------------------------------------------------------------
-12-
<PAGE>
- --------------------------------------------------------------------------------
10. BENEFITS. A Participant shall be 100% vested in his
Accrued Benefit upon satisfying the Normal or
Early retirement age under the Plan.
(a) Normal Retirement Age/Date (Plan Section
1.32; 1.33) (Choose (1) or (2)):
(1) /X/ The date on which a Participant
reaches age 65 (not more than 65
or less than 55). If no age is
indicated, normal retirement age
shall be 65.
(2) / / The later of the date Participant
reaches age _____ (not more than
65) or ________ (not more than
5th) anniversary of the day the
Participant commenced
participation in the Plan. (The
participation commencement date is
the first day of the first Plan
Year in which the Participant
commenced participation in the
Plan.)
(b) Early Retirement Date. (Plan Section
6.1(b)) (Choose (1) or (2)): ---
(1) /X/ The date on which a Participant
reaches age 60 (not less than 55)
and completes 10 years of service
(not more than 15).
(2) / / Early Retirement will not be
permitted under the Plan.
(c) Method of Distribution. (Plan Section 7.2)
Subject to Section 7.4 of the Plan,
Benefits under the Plan shall be paid
under the following method, or methods
(Chose (1), (2), and/or (3)):
(1) /X/ Lump sum;
(2) / / Periodic Installments;
(3) / / A paid-up annuity contract.
NOTE: If this is a continuation of an
existing plan, you MAY NOT
eliminate a form of benefit
previously offered under the prior
plan.
- --------------------------------------------------------------------------------
-13-
<PAGE>
- --------------------------------------------------------------------------------
(d) Special Distributions. (Plan Section 6.5)
In addition to distributions made upon
separation from service, death or
disability, distributions shall be
permitted upon (Choose any or all
options):
(1) /X/ Termination of the Plan without
the establishment of a successor
plan;
(2) /X/ As soon as administratively
feasible after the sale, to an
entity that is not an Affiliated
Employer, of substantially all of
the assets used by the Employer in
the trade or business in which the
Participant is employed;
(3) /X/ As soon as administratively
feasible after the sale, to an
entity that is not an Affiliate
Employer, of an incorporated
Affiliated Employer's interest in
a subsidiary;
(4) / / Attainment of age 59 1/2 by the
Participant;
(5) /X/ Hardship of the Participant.
- --------------------------------------------------------------------------------
11. LOANS TO With the consent of the Trustee, loans
PARTICIPANTS (Choose (a) or (b)):
(Article 10)
(a) /X/ will be permitted not exceeding 50%
(not more than 50%) of the present
value of the Participant's vested
accrued benefit.
(b) / / will not be permitted.
- --------------------------------------------------------------------------------
-14-
<PAGE>
- --------------------------------------------------------------------------------
12. VESTING. If a Participant terminates employment for
(Plan Section 6.4) reasons other than retirement, death or
disability, the vested portion of his Employer
Contributions Accounts (and Matching
Contributions Account to the extent applicable
to Section 6(d) of this Adoption Agreement)
shall be determined in accordance with the
following schedule (Choose (a), (b) or (c)):
(a) / / YEARS OF SERVICE VESTED PERCENTAGE
1 year _____%
2 years _____%
3 years _____%
4 years _____%
5 or more years 100 %
(b) / / YEARS OF SERVICE VESTED PERCENTAGE
1 year _____%
2 years _____%
3 years(at least 20%) _____%
4 years(at least 40%) _____%
5 years(at least 60%) _____%
6 years(at least 80%) _____%
7 or more years 100 %
(c) /X/ 100% full and immediate Vesting
- --------------------------------------------------------------------------------
-15-
<PAGE>
- --------------------------------------------------------------------------------
13. EMPLOYER SECURITIES. (a) The Plan may invest in Qualifying Employer
Securities, within the meaning of Section
407(d)(5) of ERISA, in accordance with the
following (Choose (1) and/or (2) or (3)
below):
(1) /X/ Up to 100% of the following
accounts may be invested in
Qualifying Employer Securities in
accordance with directions of the
Administrator, and subject to the
terms of the Plan and the Trust
Agreement (Choose one or more as
applicable):
(i) /X/ Discretionary Employer
Contributions Account;
(ii) /X/ Employer Matching
Contributions
Accounts;
(iii) /X/ Qualified Non-Elective
Contributions Account.
NA (2) / / Participants may direct that up
to 100% of the following accounts
be invested in Qualifying
Employer Securities, subject to
rules and regulations established
by the Administrator, the Trustee
and/or the Sponsor (Choose one or
more as applicable):
(i) / / Discretionary Employer
Contributions Account;
(ii) / / Elective Deferral
Account;
(iii) / / Employer Matching
Contributions Account;
(iv) / / Rollover/Transfer
Account;
(v) / / Voluntary Employee
Contributions Account;
(vi) / / Qualified Non-Elective
Contributions Account.
(3) / / Investment in Qualifying Employer
Securities will not be allowed.
- --------------------------------------------------------------------------------
-16-
<PAGE>
- --------------------------------------------------------------------------------
(b) If the Employer selects (1) or (2) in
paragraph (a) above, then voting and
tender offer rights with respect to
Qualifying Employer Securities shall be
delegated and exercised as follows (Choose
one):
(1) / / The Administrator shall direct
the Trustee as to the voting of
all Qualifying Employer
Securities and as to all rights
in the event of a tender offer
involving such Qualifying
Employer Securities. The Trustee
shall have no responsibility to
exercise voting or tender offer
rights in the absence of
directions from the
Administrator.
(2) /X/ Each Participant shall be
entitled to direct the
Administrator as to the voting
and tender offer rights
involving Qualifying Employer
Securities held in such
Participant's Plan Account, and
the Administrator shall follow
or cause the Trustee to follow
such Participant directions. If
a Participant fails to provide
the Administrator with
directions as to voting or
tender offer rights, the
Administrator shall exercise
those rights as it determines in
its discretion and shall direct
the Trustee accordingly. The
Administrator shall provide to
Participants copies of all
notices, prospectuses, financial
statements, proxies and
proxy-soliciting materials
relating to Qualifying Employer
Securities held in such
Participant's Plan Account and
shall establish reasonable
procedures and rules for the
exercise by Participants of
voting and tender offer rights
referred to herein. Under no
circumstances shall the Trustee
have any responsibility in
respect of voting or tender
offer rights involving
Qualifying Employer Securities
except the responsibility to
deliver to the Administrator
notices, prospectuses, financial
statements, proxies and proxy-
soliciting materials as provided
in the Trust Agreement.
- --------------------------------------------------------------------------------
14. INVESTMENT (a) /X/ The plan permits Participants to
DIRECTION designate what percentage of all
(Plan Section 4.6(c)) contributions made on their behalf
(Choose (a) or (b)): (including any voluntary employee
contributions, any plan-to-plan
transfers ------ (Choose (a) or (b)):
or rollover amounts) will be invested
in the various ------ Investment
Options as defined in Section 1.27 of
the Plan. Participants may make or
change such designations by giving
written notice to the Employer.
Reasonable restrictions may be imposed
on this privilege by the Employer or
the Sponsor for purposes of
administrative convenience.
(b) / / The Plan does not permit Participants
to select their Investment Options.
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<PAGE>
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15. TOP HEAVY If for any year the Plan is determined to
PROVISIONS. be Top Heavy, the following provisions shall
(Plan Section 11) become effective.
(a) Participants who are eligible to receive
the minimum allocation provided by
Section 11.4 of the Plan shall receive a
minimum allocation of contributions and
forfeitures under this Plan equal to
three percent (3%) of Compensation, or if
lesser, the largest percentage of
Compensation allocated on behalf of any
Key Employee for the Plan Year.
(b) If the Participant also participates in
another qualified defined contribution
plan maintained by the Employer, the
required minimum allocation shall be
provided (Choose (1) or (2)):
(1) /X/ under this Plan.
(2) / / under another qualified plan
maintained by the Employer.
Specify name of the Plan:
(c) If employees are covered under both a Top
Heavy defined benefit plan and defined
contribution plan of the Employer, the
denominators of the defined benefit and
defined contribution fractions (as
described in Section 5.4 of the Plan)
shall be computed by substituting a
factor of 1.0 for 1.25.
However, if the Top Heavy ratio (as
described in Section 11.2 of the Plan)
does not exceed 90%, the Employer may use
a factor of 1.25 in the fractions
provided a minimum contribution of 4% is
provided to Participants participating
only in the defined contribution plan,
and a minimum of 3% (up to 30%) is
provided to Participants participating
only in the defined benefit plan, and
provided one of the following is used to
satisfy the minimum contribution
requirements for Participants
participating in both the defined
contribution and defined benefit plans
(Choose (1), (2) or (3)):
(1) /X/ a minimum benefit of 3% per year
of service (up to 30%) is
provided in the defined benefit
plan;
(2) / / a minimum contribution of 71/2%
is provided in the defined
contribution plan;
(3) / / a minimum contribution of 4% is
provided in the defined
contribution plan and a minimum
benefit of 3% per year of service
(up to 30%) is provided in the
defined benefit plan.
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<PAGE>
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In the event that the Top Heavy ratio exceeds
90%, a factor of 1.0 shall always be applied
when computing the defined benefit and defined
contribution fractions.
The minimum contribution requirements for
Participants participating in both the defined
contribution and defined benefit plans would
be as follows (Choose (1), (2) or (3)):
(1) /X/ a minimum benefit of 2% per year of
service (up to 20%) is provided in
the defined benefit plan;
(2) / / a minimum contribution of 5% is
provided in the defined contribution
plan;
(3) / / a minimum contribution of 3% is
provided in the defined contribution
plan and a minimum benefit of 2% per
year of service (up to 20%) is
provided in the defined benefit plan.
NA (d) For any Plan Year in which this Plan is
Top Heavy, the following vesting schedule
will automatically apply to the Plan
(Plan Section 11.5) (Choose (1) or (2)):
(1) / / PERIOD OF SERVICE VESTED PERCENTAGE
1 year.....................0%
2 years...................20%
3 years...................40%
4 years...................60%
5 years...................80%
6 years..................100%
(2) / / PERIOD OF SERVICE VESTED PERCENTAGE
1 year.....................0%
2 years....................0%
3 years..................100%
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<PAGE>
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If the vesting schedule under the
Plan shifts in or out of the above
schedule for any Plan Year because of
the Plan's Top Heavy status, such
shift is an amendment to the vesting
schedule and the election in Section
6.4(e) of the Plan applies.
(e) Valuation Date: For purposes of computing
the Top Heavy Ratio, the valuation date
shall be 12/31 of each year.
(f) The present value: For purposes of
establishing present value of defined
benefit plans' accrued benefits required
to be aggregated with this Plan to
compute the Top Heavy Ratio, any benefit
shall be discounted only for mortality
and interest based on the following:
Interest rate 8% Mortality table UP-84
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<PAGE>
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16. ALLOCATION If you maintain or ever maintained another
LIMITATION qualified Plan in which any Participant in
this Plan is (or was) a Participant or could
become a Participant, the Employer must also
complete this section if it maintains a
welfare benefit fund, as defined in section
419(e) of the Code, or an individual medical
account, as defined in section 415(1)(2) of
the Code, under which amounts are treated as
annual additions with respect to any
Participant in this Plan.
(a) If the Participant is covered under
another qualified defined contribution
plan maintained by the Employer, other
than a master or prototype plan (Choose
one):
/ / The provisions of (a) through (f) of
Section 5.2 of the Plan will apply
as if the other plan were a master
or prototype plan.
/X/ Provide on an attachment, the method
under which the plans will limit
total annual additions to the
maximum permissible amount, and will
properly reduce any excess amounts,
in a manner that precludes Employer
discretion.
(b) If the Participant is or has ever been a
Participant in a defined benefit plan
maintained by the Employer (Plan Section
5.3) (Choose (1) or (2)):
(1) / / In any Limitation Year, the
Annual Addition credited to the
Participant under this Plan may
not cause the sum of the defined
benefit plan fraction and the
defined contribution plan
fraction to exceed 1.0. If the
Employer Contributions that
otherwise would be allocated to
the Participant's Account during
such year would cause the 1.0
limitation to be exceeded, the
allocation will be reduced so
that the sum of the fractions
equals 1.0. Any contributions
not allocated because of the
preceding sentence will be
allocated to the remaining
Participants under the
allocation formula under the
Plan. If the 1.0 limitation is
exceeded, such excess amount
will be reduced in accordance
with Section 5.1 of the Plan.
(2) /X/ On an attachment, provide the
method under which the plan
involved will satisfy the 1.0
limitation in a manner that
precludes Employer discretion.
(c) The limitation year is the following 12
consecutive month period:
JANUARY 1 to DECEMBER 31.
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17. ADMINISTRATIVE (a) /X/ Administrative expenses shall be paid
EXPENSE. by the Employer
(Plan Section 12.5)
(Choose (a) or (b)): (b) / / Administrative expenses shall be
charged against the accounts of all
Participants unless allocable to the
accounts of a specific Participant.
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<PAGE>
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18. PLAN ADMINISTRATION. The administrator of the Plan shall be
(Plan Section 12.4) (Choose (a), (b), (c) or (d)):
NOTE: T. Rowe Price Trust Company may not be
appointed Plan Administrator.
(a) / / The Trustee;
(b) / / The Employer;
(c) / / Retirement Plan Committee;
(d) /X/ Other (complete the following).
Name: HANDY&HARMAN SAVINGS PLAN
ADMINISTRATIVE COMMITTEE
Address: 850 THIRD AVENUE,
NEW YORK, NEW YORK 10022
NOTE: If no Plan Administrator is indicated
above, the Employer shall be deemed the
Plan Administrator.
If additional space is required to specify an
elective feature under the Plan, please attach
additional pages as needed and use the format
set forth below. Each supplementary page
should be numbered, and the total number of
pages indicated on the last page of the
Adoption Agreement
The following is hereby made part of Provision
____ of the Adoption Agreement.
Initials of Employer's Authorized
Representative:_____________
Initials of Trustee(s):______________
Supplementary page number:_____________
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19. THE TRUSTEES. The Employer hereby appoints the following to
serve as Trustee(s) (Plan Section 1.46):
Name: T. ROWE PRICE TRUST COMPANY
Address: 100 EAST PRATT STREET
BALTIMORE, MD 21202
/S/ AILENE ZEIGLER /S/ ILLEGIBLE
Witness [Signature of] Trustee
Dated: 7-23-91
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<PAGE>
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Name: ___________________________________
Address: ___________________________________
___________________________________
___________ _____________________
Witness [Signature of] Trustee
Dated:
- --------------------------------------------------------------------------------
Name: ___________________________________
Address: ___________________________________
___________________________________
____________ _____________________
Witness [Signature of] Trustee
Dated:
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<PAGE>
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20. EMPLOYER SIGNATURE. The Employer acknowledges receipt of the
current prospectus of the --- Investment
Options designated by the Employer for its
initial investments under the Plan and
represents that it has delivered a copy
thereof to each Participant in the Plan, and
that it will deliver to each Participant
making contributions and each new Participant,
a copy of the then current prospectus of such
Investment Options. The Employer further
represents that the information in this
Adoption Agreement shall become effective only
when approved and countersigned by the
Trustee. The right to reject this Adoption
Agreement for any reason is reserved.
Note: An Employer who adopts this Plan may
not rely on the Opinion Letter issued
by the National Office of the Internal
Revenue Service as evidenced that this
Plan is qualified under section 401 of
the Code. Such adopting Employer should
apply to the appropriate Key District
Director of Internal Revenue for a
determination letter in order to obtain
reliance.
This Adoption Agreement may be used
only in conjunction with basic plan
document #01.
Failure to properly fill out this
Adoption Agreement may result in
disqualification of the Plan
The sponsoring organization will inform
the Employer of any amendments to the
Plan or the discontinuance or
abandonment of the Plan.
Employees with inquiries regarding the
adoption of the Plan, the sponsoring
organization's intended meaning of any
Plan provisions, or the effect of the
Opinion Letter should call:
Sponsoring Organization/Authorized
Representative:
Name: T. Rowe Price Trust Company, Inc.
Address: 100 East Pratt Street
Baltimore, Maryland 21202
Telephone Number:
This Adoption Agreement consists of 16
pages.
IN WITNESS WHEREOF, the Employer
has caused this Adoption
Agreement to be executed by its
duly authorized officers this
29TH day of APRIL , 1991
Attest:HANDY & HARMAN
[Name of] Employer
- --------------------------------------------------------------------------------
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<PAGE>
- --------------------------------------------------------------------------------
By: /S/ STEPHEN B. MUDD
Title: VICE PRESIDENT & TREASURER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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<PAGE>
- --------------------------------------------------------------------------------
The following is hereby made part of Provision 16 of the Adoption
Agreement.
Initials of Employer's Authorized Representative: Illegible
Initials of Trustee(s): SJZ
Supplementary page number: 16
Handy & Harman maintains other qualified defined contribution plans. To
the extent that the annual additions to all defined contribution plans would
exceed the maximum permissible amount, the annual addition to the other defined
contribution plans, not this Plan, will be limited so the maximum amount will
not be exceeded.
Handy & Harman maintains qualified defined benefit plans. To the extent
that the 1.0 limitation would otherwise be exceeded, the benefit under the
defined benefit plans will be limited so that the 1.0 limitation will not be
exceeded.
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<PAGE>
This document incorporates the first and second amendments with provisions
effective January 1, 1993 and January 1, 1994, respectively.
ARTICLE I. DEFINITIONS
1.1 ACCRUED BENEFIT.
The balance in a Participant's or Beneficiary's account, including
contributions, forfeitures, income, expenses, gains and losses (whether
or not realized) allocated or attributable thereto, which account shall
consist of its pro rata proportion of all commingled Trust assets or
any Trust assets separately earmarked therefore. Said account balance
shall be determined as of the most recent Valuation Date. Each Accrued
Benefit shall be divided into one or more of the following subaccounts,
to the extent applicable:
(a) Discretionary Employer Contributions Account;
(b) Elective Deferral Account;
(c) Employer Matching Contributions Account;
(d) Rollover/Transfer Account;
(e) Voluntary Employee Contributions Account;
(f) Qualified Non-Elective Contributions Account;
(g) Qualified Matching Contributions.
The foregoing accounts, which are designated as functional accounts,
are derived from the source of the funds contributed thereto, whereas
the accounts referred to as Segregated Accounts are investment
accounts, derived from the investment of the functional account.
1.2 ACTIVE PARTICIPANT.
Any Participant on whose behalf contributions are being made to the
Plan.
1.3 ADMINISTRATOR OR PLAN ADMINISTRATOR.
The person, persons or entity designated by the Employer pursuant to
Article XII to administer and operate the Plan.
<PAGE>
1.4 ADOPTION AGREEMENT.
The document executed by the Employer and Trustee by which the Employer
adopts this Plan and the Trust Agreement forming a part thereof and
wherein the Employer selects from the options contained therein certain
provisions relating to the operation of the Plan. The Adoption
Agreement shall be incorporated into and form an integral part of the
Plan and the Trust Agreement.
1.5 AFFILIATED EMPLOYER.
The Employer and any corporation which is a member of a controlled
group of corporations (as defined in section 414(b) of the Code) which
includes the Employer, any trade or business (whether or not
incorporated) which is under common control (as defined in section
414(c) of the Code) with the Employer, any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in section 414(m) of the Code) which includes the Employer, and
any other entity required to be aggregated with the Employer pursuant
to regulations under section 414(o) of the Code.
1.6 BENEFICIARY.
The person or persons so designated by the Participant to receive his
benefits under the Plan in the event of his death.
1.7 BREAK IN SERVICE.
An Eligibility Computation Period or Vesting Computation Period in
which an Employee fails to complete more than 500 Hours of Service with
the Employer.
1.8 CODE.
The Internal Revenue Code of 1986, as amended.
1.9 COMPENSATION.
As elected by the Employer in the Adoption Agreement, Compensation will
mean all of each Participant's (a) W-2 earnings or (b) Compensation (as
that term is defined in section 415(c)(3) of the Code). For any
Self-Employed Individual covered under the Plan, Compensation will mean
Earned Income. Compensation shall include only that Compensation which
is actually paid to the Participant during the applicable period.
Except as provided elsewhere in this Plan, the applicable period shall
be the period elected by the Employer in the Adoption Agreement. If the
Employer makes no election, the applicable period shall be the Plan
Year.
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<PAGE>
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement and which is
not includible in the gross income of the Employee under section 125,
402(e)(3), 402(h) or 403(b) of the Code.
The annual Compensation of each Participant taken into account under
the Plan for any year shall not exceed $200,000, as adjusted by the
Secretary of Treasury at the same time and in the same manner as under
section 415(d) of the Code. If, as a result of the application of such
rules, the adjusted $200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity) the
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under
this Section prior to the application of this limitation. In
determining the Compensation of a Participant for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant
who have not attained age 19 before the close of the year.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall
not exceed the OBRA '93 annual Compensation limit. The OBRA '93 annual
Compensation limit is $ 150,000 as adjusted by the Commissioner for
increases in the cost of living in accordance with section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer that 12
months, the OBRA '93 annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA '93 annual Compensation limit set forth in this
provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is
subject to the OBRA '93 annual Compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual Compensation limit is
$150,000.
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<PAGE>
1.10 COST OF LIVING INCREASE.
An automatic increase (without necessity of Plan amendment) in a dollar
value set forth or described in the Plan, for the purpose of reflecting
increases in the cost of living to the extent prescribed in or pursuant
to regulations under section 415(d) of the Code.
1.11 COVERED EMPLOYEE.
Any Employee eligible to participate in the Plan pursuant to the
Adoption Agreement.
1.12 DISTRIBUTION DATE.
The date on which a Participant reaches retirement, dies while in the
active employ of the Employer, becomes totally and permanently
disabled, or otherwise terminates employment at a time when he is 100%
vested in his Accrued Benefit. In the case of a Participant who
terminates employment for reasons other than retirement, death or
disability, at a time when he is less than 100% vested in his Accrued
Benefit, his Distribution Date shall be the first to occur of his death
following termination or the last day of the Plan Year in which he
incurs five consecutive one-year Breaks in Service.
1.13 EARNED INCOME.
The annual net earnings from self-employment in the trade or business
with respect to which the Plan is established, provided that personal
services of the individual are a material income-producing factor. Net
earnings will be determined without regard to items not included in
gross income and the deductions allocable to such items. Net earnings
are reduced by contributions by the Employer to a qualified plan to the
extent deductible under section 404 of the Code. Earned Income will in
all events be defined in a way which complies with section 401(c)(2) of
the Code and other applicable provisions of the Code.
Net earnings shall be determined with regard to the deduction allowed
to the Employer by section 164(f) of the Code for taxable years
beginning after December 31, 1989.
1.14 EFFECTIVE DATE.
The effective date shall be the Effective Date provided in the Adoption
Agreement.
1.15 ELAPSED TIME.
If an Employer elects to use Elapsed Time in the Adoption Agreement,
the following definitions shall replace the otherwise required Year of
Service and Break in Service definitions. For purposes of this Section,
Hour of Service shall mean each hour for which
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<PAGE>
an Employee is paid or entitled to payment for the performance of
duties for the Employer.
(a) Break in Service is a Period of Severance of at least 12
consecutive months.
(b) Period of Severance is a continuous period of time during
which the Employee is not employed by the Employer. Such
period begins on the date the Employee retires, quits or is
discharged, or if earlier, the 12 month anniversary of the
date on which the Employee was otherwise first absent from
Service.
(c) For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the nonforfeitable
interest in the Participant's account balance derived from
Employer contribution (except for periods of Service which may
be disregarded on account of the "rule of parity" described in
Section 2.4(b)), an Employee will receive credit for the
aggregate of all time period(s) commencing with the Employee's
first day of employment or reemployment and ending on the date
a Break in Service begins. The first day of employment is the
first day the Employee performs an Hour of Service. An
Employee will also receive credit for any Period of Severance
of less than 12 consecutive months. Fractional periods of a
year will be expressed in terms of days.
(d) In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month
period beginning on the first anniversary of the first date of
such absence shall not constitute a Break in Service. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (i) by reason of the
pregnancy of the individual, (ii) by reason of the birth of a
child of the individual, (iii) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (iv) for purposes of caring
for such child for a period beginning immediately following
such birth or placement.
(e) Each employee will share in Employer contributions for the
period beginning on the date the Employee commences
participation under the Plan and ending on the date on which
such Employee severs employment with the Employer or is no
longer a member of an eligible class of Employees.
(f) If the Employer is a member of an affiliated service group
(under section 414(m) of the Code), a controlled group of
corporations (under section 414(b) of the Code), or a group of
trades or businesses under common control (under section
414(c) of the Code) or any other entity required to be
aggregated with the Employer pursuant to section 414(o) of the
Code and the regulations thereunder, Service will be credited
for any employment for any period of time for any other member
of such group. Service will also be credited for any
individual required under section 414(n) or (o) of the Code
and the regulations thereunder to be
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<PAGE>
considered an Employee of any Employer aggregated under
section 414(b), (c) or (m) of the Code.
1.16 ELECTIVE DEFERRAL ACCOUNT.
The portion of a Participant's Accrued Benefit which consists of
contributions made to the Plan during the Plan Year by the Employer at
the election of the Participant, in lieu of cash Compensation and shall
include contributions made pursuant to a salary reduction agreement.
1.17 ELIGIBILITY COMPUTATION PERIOD.
The 12 consecutive month period used for purposes of determining Years
of Service and Breaks in Service for eligibility to participate. An
Employee's initial Eligibility Computation Period shall be the 12
consecutive month period beginning with the day the Employee first
performs an Hour of Service. Subsequent Eligibility Computation
Periods, if needed, will coincide with the 12 month anniversary of that
day.
1.18 EMPLOYEE.
Any person, including a Self-Employed Individual, employed by the
Employer maintaining the Plan or of any other Employer required to be
aggregated with such Employer under section 414(b), (c), (m) or (o) of
the Code and shall include Leased Employees within the meaning of
section 414(n)(2) or (o) of the Code. Notwithstanding the foregoing, if
such Leased Employees constitute less than twenty percent of the
Employer's non-highly compensated work force within the meaning of
section 414(n)(5)(C)(ii) of the Code, the term "Employee" shall not
include those Leased Employees covered by a plan described in section
414(n)(5) of the Code unless otherwise provided by the terms of the
Plan.
1.19 EMPLOYER.
The entity that establishes or maintains the Plan, any successor to
such entity and any Affiliated Employer.
1.20 EMPLOYER CONTRIBUTION ACCOUNTS.
The portion of a Participant's Accrued Benefit consisting of his
Employer Matching Contributions Account and his Discretionary Employer
Contributions Account.
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<PAGE>
1.21 ENTRY DATE.
The Effective Date shall be the first Entry Date, thereafter the first
day of each Plan Year and the first day of the seventh month of each
Plan Year unless the Employer elects in the Adoption Agreement such
dates which are more frequent.
1.22 ERISA.
The Employee Retirement Income Security Act of 1974, as amended.
1.23 FAMILY MEMBER.
An Employee's spouse and lineal ascendants or descendants and the
spouses of such lineal ascendants or descendants.
1.24 HIGHLY COMPENSATED EMPLOYEE.
The term Highly Compensated Employee includes active Highly Compensated
Employees and former Highly Compensated Employees.
An active Highly Compensated Employee includes any Employee who
performs Service for the Employer during the determination year and
who, during the look-back year: (i) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to section 415(d)
of the Code); (ii) received Compensation from the Employer in excess of
$50,000 (as adjusted pursuant to section 415(d) of the Code) and was a
member of the top-paid group for such year; or (iii) was an officer of
the Employer and received Compensation during such year that is greater
than 50% of the dollar limitation in effect under section 415(b)(1)(A)
of the Code. The term Highly Compensated Employee also includes: (i)
Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and
the Employee is one of the 100 Employees who received the most
Compensation from the Employer during the determination year; and (ii)
Employees who are 5 percent owners at any time during the look-back
year or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated
Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve month period immediately preceding
the determination year.
A former Highly Compensated Employee includes any Employee who
separated from Service (or was deemed to have separated) prior to the
determination year, performs no Service for the Employer during the
determination year and was a highly compensated
-7-
<PAGE>
active Employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
Family Member of either a 5-percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation paid
by the Employer during such year, then the Family Member and the
5-percent owner or top ten Highly Compensated Employee shall be
aggregated. In such case, the Family Member and 5-percent owner or top
ten Highly Compensated Employee shall be treated as a single Employee
receiving Compensation and Plan contributions or benefits equal to the
sum of such Compensation and contributions or benefits of the Family
Member and 5 percent owner or top ten Highly Compensated Employee. For
purposes of this Section, Family Member includes the spouse, lineal
ascendants and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated
as officers and the Compensation that is considered, will be made in
accordance with section 414(q) of the Code and the regulations
thereunder.
The Employer may elect to use the calendar year to determine whether an
Employee is a Highly Compensated Employee in the look-back year (as
defined in Treasury Regulations under section 414(q) of the Code)
calculation. The calendar year used will be the calendar year ending
with or within the determination year (as defined in the regulations
under section 414(q) of the Code). The determination year shall be the
months (if any) in the current Plan Year which follow the end of the
calendar look-back year. If the Employer elects to make the calendar
year calculation election with respect to any plan, entity or
arrangement, such election must apply with respect to all plans,
entities and arrangements of the Employer.
1.25 HOUR OF SERVICE.
(a) An Hour of Service shall mean and include each hour for which
an Employee is compensated by the Employer, or is entitled to
be so compensated, for Services rendered by him to the
Employer. These hours will be credited to the Employee for the
computation period in which the duties are performed.
(b) An Hour of Service shall also mean and include each hour for
which an Employee is compensated by the Employer, or is
entitled to be so compensated, on account of a period of time
during which no Services are rendered by him to the Employer
(regardless of whether the Employee shall have ceased to be an
Employee) due to
-8-
<PAGE>
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence. No more
than five hundred and one (501) Hours of Service shall be
credited pursuant to this subparagraph (b) on account of any
single continuous period during which an Employee renders no
Services to the Employer (whether or not such period occurs in
a single computation period). Hours under this paragraph will
be calculated and credited pursuant to section 2530.200b-2 of
the Department of Labor Regulations which are incorporated
herein by this reference.
(c) An Hour of Service shall also mean and include each hour for
which back pay, without regard to mitigation of damages, has
been awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under subparagraph (a) or
subparagraph (b), whichever shall be applicable, and also
under this subparagraph (c). The hours will be credited to the
Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period
in which the award, agreement or payment is made.
Hours of Service will be credited for employment with other
members of an affiliated service group (under section 414(m)
of the Code), a controlled group of corporations (under
section 414(b) of the Code), or a group of trades or
businesses under common control (under section 414(c) of the
Code), of which the adopting Employer is a member, and any
other entity required to be aggregated with the Employer
pursuant to section 414(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any individual
considered an Employee under section 414(n) or (o) of the
Code, and regulations thereunder.
Solely for purposes of determining whether a Break in Service
for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, eight (8) Hours of Service
per day of such absence. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an
absence (i) by reason of the pregnancy of the individual, (ii)
by reason of a birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such individual,
or (iv) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The
Hours of Service credited under this paragraph shall be
credited only (i) in the computation period in which the
absence begins if the crediting is necessary to prevent a
Break in Service in that period, or (ii) in all other cases,
in the following computation period.
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Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
1.26 INACTIVE PARTICIPANT.
Any Employee or former Employee who has ceased to be an Active
Participant and on whose behalf an account is maintained under
the Plan.
1.27 INVESTMENT OPTIONS.
Any regulated investment companies registered under the Investment
Company Act of 1940 whose investment adviser is T. Rowe Price
Associates, Inc. or any successor thereto, any common trust funds or
collective investment fund of the Sponsor qualified under sections 401
and 501 of the Code, and any other funding vehicle (including, but not
limited to, limited partnership interests which receives investment
advice from T. Rowe Price Associates, Inc. or an affiliate) made
available to the Plan by T. Rowe Price Associates, Inc. or any of its
affiliates which the Employer permits under the terms of the Plan.
1.28 LEASED EMPLOYEE.
Any person (other than an Employee of the recipient) who, pursuant to
an agreement between the recipient and any other person ("leasing
organization"), has performed Services for the recipient (or for the
recipient 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 (1) year and such Services are of a type historically
performed by Employees in the business field of the recipient Employer.
Any Leased Employee shall be treated as an Employee of the recipient
Employer. However, contributions or benefits provided by the leasing
organization which are attributable to Service performed for the
recipient Employer shall be treated as provided by the recipient
Employer. The preceding sentence shall not apply to any Leased Employee
if Leased Employees do not constitute more than twenty percent (20%) of
the Employer's non-highly compensated force and, if such Employee is
covered by a money purchase pension plan providing: (a) a nonintegrated
Employer contribution rate of at least ten percent (10%) of
Compensation as defined in section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the Employee's gross income under
section 125, 402(e)(3), 402(h) or 403(b) of the Code, (b) full and
immediate vesting, and (c) each Employee of the leasing organization
(other than Employees who perform substantially all of their Services
for the leasing organization) immediately participate in the Plan. Item
(c) shall not apply to any individual whose Compensation from the
leasing organization in each Plan Year during the 4-year period ending
with the Plan Year is less than $1,000.
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1.29 MATCHING CONTRIBUTIONS.
The portion of a Participant's Accrued Benefit consisting of
contributions to the Plan made by the Employer and allocated to a
Participant's account by reason of the Participant's Elective Deferrals
or Voluntary Employee Contributions.
1.30 NET PROFITS.
Current and accumulated earnings of the Employer, before federal and
state taxes and contributions to this Plan or any other qualified plan.
1.31 NON-HIGHLY COMPENSATED EMPLOYEE.
An Employee of the Employer who is neither a Highly Compensated
Employee nor a Family Member.
1.32 NORMAL RETIREMENT AGE.
The age selected in the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of
that mandatory age or the age specified in the Adoption Agreement.
1.33 NORMAL RETIREMENT DATE.
The date on which a Participant attains age 65 unless otherwise
specified in the Adoption Agreement.
1.34 OWNER-EMPLOYEE.
A sole proprietor, if the Employer is a sole proprietorship, or a
partner who owns either more than ten percent (10%) of the capital
interests or more than ten percent (10%) of the profits interests, if
the Employer is a partnership.
1.35 PARTICIPANT.
Any Covered Employee of the Employer who has met the eligibility
requirements as specified in the Adoption Agreement.
1.36 PERIOD OF SERVICE.
Under Elapsed Time, the period of time commencing on the date on which
an Employee is first credited with an Hour of Service or, if
applicable, the first date following a Period of Severance on which an
Employee is credited with an Hour of Service and ending on the next
following Severance Date.
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1.37 PLAN.
The retirement plan set forth herein and the Adoption Agreement as
amended from time to time.
1.38 PLAN YEAR.
The twelve (12) consecutive month period designated by the Employer in
the Adoption Agreement.
1.39 QUALIFIED NON-ELECTIVE CONTRIBUTIONS.
Contributions (other than Matching Contributions) made by the Employer
and allocated to the Participant's account that the Participant may not
elect to receive in cash until distributed from the Plan and which are
subject to the distribution restrictions as provided in Article VI of
said Plan.
1.40 ROLLOVER/TRANSFER ACCOUNT.
The portion of a Participant's Accrued Benefit established in
accordance with Section 3.6 of the Plan.
1.41 SEGREGATED ACCOUNT.
That portion of a Participant's Accrued Benefit which, pending
distribution, is segregated from the remainder of the Trust and placed
in a money market fund sponsored by T. Rowe Price Associates, Inc. All
income earned by the Segregated Account shall be deemed to be part
thereof and distributable therewith and there may be charged thereto in
addition to any directly attributable fees and expenses, a pro rata
portion of total Trust fees and expenses.
1.42 SELF-EMPLOYED INDIVIDUAL.
An individual who has Earned Income for the taxable year from the
trade, business or partnership with respect to which the Plan is
established; also, an individual who would have had Earned Income but
for the fact the trade, business or partnership had no Net Profits for
the taxable year.
1.43 SERVICE.
Under Elapsed Time, the sum of an Employee's Periods of Service
beginning with the Employee's employment or re-employment date. Service
shall be measured in years where three hundred sixty-five (365) days of
Service equals one whole Year of Service. Service for purposes of
eligibility to participate in the Plan shall be determined in
accordance with
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Section 2.3 of the Plan. Service for purposes of determining
nonforfeitable rights under the Plan shall be determined in accordance
with Section 6.4 of the Plan.
1.44 SEVERANCE DATE.
Under Elapsed Time the earlier of (a) the date an Employee terminates,
is discharged, retires or dies, or (b) the first anniversary of the
date an Employee is absent from the employ of the Employer for any
reason other than an approved leave of absence granted in writing by
the Employer, according to a uniform rule applied without
discrimination, provided the Employee returns to the employ of the
Employer upon completion of the leave. Notwithstanding the foregoing,
an Employee who terminates Service to enter the military service of the
United States shall not suffer a Severance Date as of such date
provided (a) such Employee's employment rights are protected by Federal
law and (b) such Employee returns to employment with the Employer
within the period required by law for preservation of his rights. Under
such circumstances, an Employee shall receive credit for Service for
his earlier period of absence. If the Employee does not return to
Service within the time prescribed by law, then the date he terminated
employment shall be his Severance Date.
1.45 SPONSOR.
The Sponsor of this Plan shall be T. Rowe Price Trust Company.
1.46 TRUST AGREEMENT.
The agreement between the Employer and the Trustees under which the
assets of the Plan are held, administered and managed.
1.47 TRUSTEE.
The individual or corporate Trustee or Trustees under the Trust
Agreement as they may be constituted from time to time. Such Trustee or
Trustees shall be named in the Adoption Agreement.
1.48 VALUATION DATE.
The last day of each Plan Year and such other dates as may be necessary
for the proper administration of the Plan.
1.49 VESTING COMPUTATION PERIOD.
For purpose of computing an Employee's nonforfeitable right to the
account balance derived from Employer contributions, Years of Service
and Breaks in Service will be measured by the Plan Year.
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1.50 VOLUNTARY EMPLOYEE CONTRIBUTIONS ACCOUNT.
That portion of a Participant's Accrued Benefit derived from voluntary
nondeductible Employee contributions to the Plan.
1.51 YEAR OF SERVICE.
An Eligibility Computation Period, Vesting Computation Period or Plan
Year, whichever is applicable, during which an Employee completes at
least one thousand (1,000) Hours of Service (whether or not
continuous).
ARTICLE II. ELIGIBILITY AND PARTICIPATION
2.1 ACTIVE PARTICIPATION.
Each Covered Employee shall be eligible to participate in the Plan on
the Entry Date coincident with or next following the date on which such
Covered Employee satisfies the eligibility requirements set forth in
the Adoption Agreement.
2.2 EXCLUSION OF CERTAIN EMPLOYEES.
To the extent provided in the Adoption Agreement, the following
Employees may be excluded from participation in the Plan;
(a) Employees not meeting the age and Service requirements,
(b) Employees who are included in a unit of Employees covered by a
collective bargaining agreement between Employee
representatives and one or more Employers, if there is
evidence that retirement benefits were the subject of good
faith bargaining between such Employee representatives and
such Employer or Employers. For this purpose, the term
"Employee representatives" does not include any organization
where more than one half of the membership is comprised of
owners, officers and executives of the Employer,
(c) Employees who are nonresident aliens and who receive no Earned
Income from the Employer which constitutes income from sources
within the United States, and
(d) Employees included in certain ineligible job classifications.
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age
and Service requirements as provided in the Adoption Agreement.
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In the event a Participant is no longer a member of an eligible class
of Employees and becomes ineligible to participate, but has not
incurred a Break in Service, such Employee shall participate
immediately upon returning to an eligible class of Employees. If such
Participant incurs a Break in Service, eligibility to participate will
be determined under Section 2.4 of the Plan.
2.3 CREDITING SERVICE FOR INITIAL ELIGIBILITY.
(a) If the Employer has elected in the Adoption Agreement to
credit Service based on the Elapsed Time method, then, for
purposes of initial eligibility, Service shall be measured
from the date on which the Employee is first credited with an
Hour of Service and ending with the anniversary of such date.
A Period of Service shall include any Period of Severance of
less than 12 consecutive months.
(b) If the Employer has elected in the Adoption Agreement to
credit Service based on Hours of Service, then, for purposes
of initial eligibility, a Year of Service is a 12 consecutive
month period, beginning with the day on which the Employee
first performs an Hour of Service and anniversaries thereof,
during which the Employee completes at least 1,000 Hours of
Service.
To the extent provided in the Adoption Agreement, Service with a
predecessor Employer shall be deemed Service with the Employer for
purposes of this Plan. If this Plan is a continuation of a predecessor
Employer's plan, Service with the predecessor Employer may not be
disregarded for purposes of this Plan.
2.4 RE-EMPLOYMENT.
(a) A former Participant shall become a Participant immediately
upon returning to the employ of the Employer if such former
Participant has a nonforfeitable right to all or a portion of
the account balance derived from Employer contributions at the
time of termination from Service.
(b) A former Participant who did not have a nonforfeitable right
to any portion of the account balance derived from Employer
contributions at the time of termination from Service shall be
considered a new Employee for eligibility purposes if the
number of consecutive 1- year Breaks in Service, or Periods of
Severance if the Employer has elected Elapsed Time, equals or
exceeds the greater of five (5) or the aggregate number of
Years of Service before such Breaks in Service or Periods of
Severance. If such former Participant's Years of Service prior
to termination from Service may not be disregarded pursuant to
the preceding sentence, such former Participant shall
participate immediately upon re-employment.
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2.5 RESTORATION OF FORFEITURE.
If the re-employed Participant: (a) was less than 100% vested in his
Employer Contribution Accounts when he terminated employment, (b)
received a distribution of the vested portion, if any, of his Employer
Contribution Accounts pursuant to Section 7.6(b) of the Plan, and (c)
resumed his status as a Covered Employee before having incurred five
(5) consecutive 1-year Breaks in Service the full amount of the
forfeiture which occurred (unadjusted for gains or losses in the
interim) pursuant to Section 7.7 of the Plan shall be restored to his
Accrued Benefit. If the Participant had no vested interest in the
portion of his Employer Contribution Accounts, the restoration shall be
made as of the date of resumption of status as a Covered Employee.
Notwithstanding any other Plan provisions regarding utilization of
forfeitures, the restored forfeiture shall be derived from forfeitures
arising in the Plan Year in which the restoration occurs. However, the
Employer may, and in the absence of available forfeitures shall, make a
separate contribution to the Plan for the purpose of restoring the
forfeiture, which separate contribution may be made without regard to
the availability of current and/or accumulated earnings and profits,
and shall be made not later than the end of the Plan Year following the
Plan Year in which the resumption of employment by the Participant
occurred. The restoration shall not be deemed to be Annual Additions
for purposes of Article V of the Plan.
2.6 WAIVER OF PARTICIPATION.
The Employer may grant a waiver of participation to any Employee who so
requests. Whether or not such waiver shall be granted, and the terms
and conditions (including duration) thereof, shall be made in
accordance with written and objective rules and shall be applied in a
uniform and nondiscriminatory manner. Notwithstanding the foregoing,
any Employee who has met the Plan's eligibility requirements shall be
considered an "Eligible Participant" for purposes of Sections 3.7 and
3.8 of the Plan.
ARTICLE III. CONTRIBUTIONS
3.1 ELECTIVE DEFERRAL CONTRIBUTIONS.
To the extent provided in the Adoption Agreement and subject to the
limitation on Annual Additions as described in Article V of the Plan,
for any Plan Year:
(a) PARTICIPANT ELECTION. Participant may elect to defer, in the
form of Employer contributions to the Plan on his behalf,
Compensation that would otherwise be paid to him, but for the
deferral of such Compensation, an amount expressed as a
percentage (within the limits provided in the Adoption
Agreement) of his Compensation as he shall elect in writing on
a form prescribed by the Employer. Such salary deferral
contributions shall be accomplished through the direct
reduction of Compensation in each payroll period during which
the election is in
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effect. A Participant may elect to increase, decrease or
discontinue his salary deferral contributions by submitting a
written request to the Employer on a form prescribed by such
Employer.
The Employer shall pay to the Trustee all salary deferral
contributions no later than thirty (30) days after the payroll
period for which such contributions were deducted. A separate
account shall be established for each Participant and such
Participant's salary deferral contributions, as adjusted for
withdrawals thereof, investment gain and losses, and income or
expenses, shall constitute such Participant's Elective
Deferral Account. A Participant shall at all times have a
nonforfeitable interest in his Elective Deferral Account.
(b) ELECTIVE DEFERRALS. Any Employer contributions made to the
Plan at the election of the Participant, in lieu of cash
Compensation, and shall include contributions made pursuant to
a salary reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Elective Deferral
is the sum of all Employer contributions made on behalf of
such Participant pursuant to an election to defer under any
qualified CODA as described in section 401 (k) of the Code,
and simplified Employer pension or cash deferred arrangement
as described in section 402(h)(1)(B) of the Code, any eligible
deferred compensation plan under section 457 of the Code, any
plan described under section 501(c)(18) of the Code, and any
Employer contributions made on the behalf of Participant for
the purchase of an annuity contract under section 403(b) of
the Code pursuant to a salary reduction agreement.
Elective Deferrals shall not include any deferrals properly
distributed as excess Annual Additions.
(c) LIMITATION ON ELECTIVE DEFERRALS. No Participant shall be
permitted to have Elective Deferrals made under this Plan, or
any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained
in section 402(g) of the Code in effect at the beginning of
such taxable year. Notwithstanding any other provisions of the
Plan, the Employer may distribute to the Participant, not
later than April 15 following the calendar year to which the
deferral is attributable, any deferral in excess of the
aforesaid limit together with any income (or minus any loss)
allocable thereto. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferrals made to this
Plan and any other plans of this Employer. Excess Deferrals
that are distributed after April 15 are includible in the
Participant's gross income in both the taxable year in which
deferred and the taxable year in which distributed. The
Employer may also distribute to Participant any deferrals,
together with any income allocable thereto which the
Participant has advised the Employer (in writing by March 1)
represent excess deferrals because of amounts deferred by the
Participant during the preceding
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calendar year under any other plans or arrangements described
in section 401(k), 408(k) or 403(b) of the Code.
For purposes of the above, "Excess Elective Deferrals" shall
mean those Elective Deferrals that are includible in a
Participant's gross income under section 402(g) of the Code to
the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as Annual Additions
under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of Participant's
taxable year.
Determination of income or loss: Excess Elective Deferrals
shall be adjusted for any income or loss. The income or loss
allocable to Excess Elective Deferrals is the income or loss
allocable to the Participant's Elective Deferral Account for
the taxable year multiplied by a fraction, the numerator of
which is such Participant's Excess Elective Deferrals for the
year and the denominator is the Participant's account balance
attributable to Elective Deferrals without regard to any
income or loss occurring during such taxable year.
3.2 EMPLOYER CONTRIBUTIONS.
(a) EMPLOYER MATCHING. To the extent provided in the Adoption
Agreement, and subject to the limitation on Annual Additions
as described in Article V of the Plan, for any Plan Year, the
Employer shall contribute to the Plan on behalf of each
eligible Participant an amount, in the form of "Matching
Contributions", equal to a percentage of such Participant's
Elective Deferral Contributions and/or Voluntary Employee
Contributions. Separate subaccounts shall be established to
account for and distinguish Matching Contributions made on
account of Elective Deferral Contributions and Voluntary
Employee Contributions. Matching Contributions made to such
subaccount on behalf of a Participant, as adjusted for
withdrawals thereof, investment gain and losses, and income or
expenses, shall constitute such Participant's Employer
Matching Contributions Account. A Participant's eligibility to
share in Employer Matching Contributions for a Plan Year shall
be determined in accordance with the Adoption Agreement. To
the extent provided in the Adoption Agreement, any Matching
Contributions made under this Section 3.2(a) on behalf of such
Participant during the Plan Year, which are attributable to
Excess Deferrals, shall be deemed forfeited.
Matching Contributions shall be vested in accordance with
Section 6(d)(2) of the Adoption Agreement. In any event,
Matching Contributions shall be fully vested at Normal
Retirement Age, upon the complete or partial termination of
the profit sharing plan, or upon the complete discontinuance
of Employer contributions.
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Matching Contributions attributable to excess deferrals will
be forfeited and applied in the same manner as forfeitures
under Section 8(b) of the Adoption Agreement.
(b) OTHER EMPLOYER CONTRIBUTIONS. To the extent provided in the
Adoption Agreement, and subject to the limitation on Annual
Additions as described in Article V of the Plan, for any Plan
Year, the Employer may make a discretionary contribution to
the Plan in such amount as the Employer may determine. Any
such Employer contribution shall be allocated to each eligible
Participant's Discretionary Employer Contributions Account in
the same proportion as such Participant's Compensation bears
to the Compensation of all Participants. Discretionary
Employer Contributions made on behalf of a Participant, as
adjusted for withdrawals thereof, investment gain and losses,
and income or expenses, shall constitute such Participant's
Discretionary Employer Contributions Account. A Participant's
eligibility to share in Employer Discretionary contributions
shall be determined in accordance with the Adoption Agreement.
(c) PAYMENT. All Employer contributions made pursuant to this
Section 3.2 of the Plan shall become due on the last day in
such Plan Year, unless actually paid prior thereto. The
Employer shall pay to the Trustee all Employer contributions
not later than the due date (including extensions) of the
Employer's federal income tax return for the taxable year
ending with or within the Plan Year.
(d) QUALIFIED MATCHING CONTRIBUTIONS. If elected by the Employer
in the Adoption Agreement, the Employer will make Qualified
Matching Contributions to the Plan. "Qualified Matching
Contributions" shall mean Matching Contributions which are
subject to the distribution and nonforfeitability requirements
under 401(k) of the Code when made. A separate account shall
be established for that portion of a Participant's Accrued
Benefit attributable to such Qualified Matching Contributions
and each separate account, as adjusted for withdrawals
thereof, investment gain and losses and income or expenses
shall constitute such Participant's Qualified Matching
Contributions Account. A Participant shall at all times have a
nonforfeitable interest in his Qualified Matching
Contributions Account.
The Employer shall pay to the Trustee all Qualified Matching
Contributions no later than thirty (30) days after the close
of the Plan Year for which such contributions are deemed to be
made, or such other time as provided in applicable regulations
under the Code.
3.3 VOLUNTARY EMPLOYEE CONTRIBUTIONS.
To the extent provided in the Adoption Agreement and subject to the
limitation on Annual Additions as described in Article V of the Plan,
for any Plan Year, a Participant shall be
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permitted to make voluntary nondeductible Employee contributions to the
Plan. Such Participant's voluntary nondeductible Employee
contributions, as adjusted for withdrawals thereof, investment gain and
losses and income or expenses shall constitute such Participant's
Voluntary Employee Contributions Account. A Participant's Voluntary
Employee Contributions may be made through payroll deduction or in any
other manner acceptable to the Employer. A Participant shall at all
times have a nonforfeitable interest in his Voluntary Employee
Contributions Account.
3.4 CONTRIBUTION LIMITATION.
To the extent provided in the Adoption Agreement, the Employer shall
make all contributions to the Plan without regard to current or
accumulated earnings and profits for the taxable year or years ending
with or within such Plan Year. Not withstanding the foregoing, the Plan
shall continue to be designed to qualify as a profit sharing plan for
purposes of sections 401(a), 402 and 417 of the Code. In no event shall
Employer contributions in the aggregate exceed fifteen percent (15%) of
all Participants' Compensation or such greater amount deductible for
federal income tax purposes under section 404 of the Code.
3.5 PAYROLL TAXES.
The Employer shall withhold from the Compensation of each Participant,
any FICA or other payroll taxes as the Employer determines necessary
with respect to salary deferral contributions.
3.6 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS.
To the extent provided in the Adoption Agreement, a Covered Employee
may pay over to the Trust an amount which constitutes a qualified
rollover contribution under section 402(a)(5) or 408(d)(3) of the Code.
Also, to the extent provided in the Adoption Agreement, the Trustee may
accept a direct transfer of funds, which meets the requirements of
1.411(d)-(6), from, or make a direct transfer of funds to, a plan which
the Trustee reasonably believes to be qualified under section 401(a) of
the Code in which a Covered Employee was, is or will become, as the
case may be, a Participant. Any such rollover or transfer to the Plan
shall constitute a part of the Covered Employee's Accrued Benefit under
the Plan, shall be accounted for separately and shall be fully vested
at all times.
If a rollover or transfer is made by or on behalf of a Covered Employee
who has not yet become a Participant, his Rollover or Transfer Account
shall constitute his entire Accrued Benefit (and his sole interest in
the Plan) and he shall not be considered to be a Participant for any
other purpose of the Plan until he meets the eligibility requirements
specified in the Adoption Agreement.
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3.7 AVERAGE ACTUAL DEFERRAL PERCENTAGE TEST UNDER SECTION401(K) OF THE
CODE.
(a) GENERAL TESTS. Notwithstanding any other provisions in the
Plan, for any Plan Year, the Employer shall be permitted to
limit the amount which may be deferred by any Highly
Compensated Employee (as defined in Article I of the Plan) to
the extent necessary to ensure that the Plan satisfies one of
the following tests:
(i) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Actual
Deferral Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(ii) the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Actual
Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the Plan Year
multiplied by two (2), provided that the Average
Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees does not exceed
the Average Actual Deferral Percentage for Eligible
Participants who are Non-Highly Compensated Employees
by more than two (2) percentage points.
(b) DEFINITIONS. For purposes of this Section 3.7 of the Plan, the
following definitions shall apply:
(i) ACTUAL DEFERRAL PERCENTAGE (ADP) shall mean, for a
specified group of --------------------------
Participants for a Plan Year, the average of the
ratio (calculated separated for each Participant in
such group) of (1) the amount of Employer
contributions actually paid over to the Trust on
behalf of such Participant for the Plan Year to (2)
Participant's Compensation for such Plan Year
(whether or not the Employee was a Participant for
the entire Plan Year). Employer contributions on
behalf of any Participant shall include: (1) any
Elective Deferrals made pursuant to the Participant's
deferral election (including Excess Elective
Deferrals of Highly Compensated Employees), but
excluding (a) Excess Elective Deferrals of Non-Highly
Compensated Employees that arise solely from Elective
Deferrals made under the Plan or plans of this
Employer, and (b) Elective Deferrals that are taken
into account in the Contribution Percentage test
(provided the ADP test is satisfied both with and
without exclusion of these Elective Deferrals); and
(2) at the election of the Employer, Qualified Non-
Elective Contributions and Qualified Matching
Contributions. For purposes of computing Actual
Deferral Percentages, an Employee who would be a
Participant but for the failure to make Elective
Deferrals shall be treated as a Participant on whose
behalf no Elective Deferrals are made.
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(ii) AVERAGE ACTUAL DEFERRAL PERCENTAGE shall mean the
average (expressed as a percentage) of the Actual
Deferral Percentages of the Eligible Participants in
a group of either Highly Compensated Employees or
Non- Highly Compensated Employees.
(iii) Eligible Participant shall mean any Employee of the
Employer who is otherwise eligible under the Adoption
Agreement to have Elective Deferrals or Qualified
Non-Elective Contributions allocated to his account
for the Plan Year.
(c) SPECIAL RULES. The following special rules shall apply for purposes
of Section 3.7:
(i) For purposes of this Section 3.7 of the Plan, the
Actual Deferral Percentage for any Eligible
Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Elective
Deferrals or Qualified Non-Elective Contributions or
Qualified Matching Contributions allocated to his
account under two or more plans, or arrangements,
described in section 401(k) of the Code that are
maintained by the Employer or an Affiliated Employer
shall be determined as if all such Elective
Deferrals, Qualified Non-Elective Contributions and
Qualified Matching Contributions were made under a
single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
or deferred arrangements ending with or within the
same calendar year shall be treated as a single
arrangement.
(ii) For purposes of determining the Actual Deferral
Percentage of a Participant who is a 5-percent owner
or one of the ten most highly paid Highly Compensated
Employees, the Elective Deferrals (and Qualified
Non-Elective Contributions or Qualified Matching
Contributions or both, if treated as Elective
Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the
Elective Deferrals (and if applicable, Qualified
Non-Elective Contributions and Qualified Matching
Contributions or both) and Compensation for the Plan
Year of Family Members (as defined in section
414(q)(6) of the Code). Family Members, with respect
to such Highly Compensated Employees, shall be
disregarded as separate Employees in determining the
Actual Deferral Percentage both for Participants who
are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(iii) For purposes of determining the ADP test, Elective
Deferrals, Qualified Non-Elective Contributions and
Qualified Matching Contributions must be made before
the last day of the twelve-month period immediately
following the Plan Year to which contributions
relate.
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(iv) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the
amount of Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, used in
such test.
(v) The determination and treatment of the Elective
Deferrals, Qualified Non-Elective Contributions,
Qualified Matching Contributions and Actual Deferral
Percentage of any Participant shall satisfy such
other requirements as may be prescribed by the
Secretary of the Treasury.
(vi) In the event that this Plan satisfies the
requirements of section 401(k), 401(a)(4) or 410(b)
of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if
aggregated with this Plan, then this Section shall be
applied by determining the ADP of Employees as if all
such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(k) of the
Code only if they have the same Plan Year.
(d) DISTRIBUTION OF EXCESS CONTRIBUTIONS. Notwithstanding any
other provisions of this ------------------------------------
Plan, Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants to whose accounts such
Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more that 2
1/2months after the last day of the Plan Year in which such
excess amounts arose, a ten percent (10%) excise tax will be
imposed on the Employer maintaining the Plan with respect to
such amounts. Such distributions shall be made to Highly
Compensation Employees on the basis of the respective portions
of the Excess Contributions attributable to each of such
Employees. Excess Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of section 414(q)(6) of the Code in the manner
prescribed by the regulations. Excess Contributions of
Participants who are subject to the Family Member aggregation
rules shall be allocated among the Family Members in
proportion to the Elective Deferrals (and amounts treated as
Elective Deferrals) of each Family Member that is combined to
determine the combined ADP.
Excess Contributions (including the amounts recharacterized)
shall be treated as Annual Additions under the Plan.
Determination of Income or Loss: Excess Contributions shall be
adjusted for any income or loss. The income or loss allocable
to Excess Contributions is the income or loss allocable to the
Participant's Elective Deferral Account (and, if applicable,
the Qualified Non-Elective Contributions Account or the
Qualified Matching Contributions Account or both) for the Plan
Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the
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denominator is the Participant's account balance attributable
to Elective Deferrals (and Qualified Non- Elective
Contributions or Qualified Matching Contributions, or both, if
any of such contributions are included in the ADP test)
without regard to any income or loss occurring during such
Plan Year.
Accounting for Excess Contributions: Excess Contributions
shall be distributed from the Participant's Elective Deferral
Account and Qualified Matching Contributions Account (if
applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the extent
used in the ADP test) for the Plan Year. Excess Contributions
shall be distributed from the Participant's Qualified
Non-Elective Contributions Account only to the extent that
such Excess Contributions exceed the balance in the
Participant's Elective Deferral Account and Qualified Matching
Contributions Account.
Definition:
"Excess Contributions" shall mean, with respect to
any Plan Year, the excess of:
(i) The aggregate amount of Employer contributions
actually taken into account in computing the ADP of
Highly Compensated Employees for such Plan Year, over
(ii) The maximum amount of such contributions permitted by
the ADP test (determined by reducing contributions
made on behalf of Highly Compensated Employees in
order of the ADPs, beginning with the highest of such
percentages).
(e) RECHARACTERIZATION. If the Employer elects to allow Voluntary
Employee ------------------ Contributions in the Adoption
Agreement Section 6(e)(1), a Participant may treat his or her
Excess Contributions as an amount distributed to the
Participant and then contributed by the Participant to the
Plan. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other Employee Contributions made by that
Employee would exceed any stated limit under the Plan on
Employee Contributions.
Recharacterization must occur no later than 2 1/2 months after
the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the
date the last Highly Compensated Employee is informed in
writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the
Participant would have received them in cash.
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(f) QUALIFIED NON-ELECTIVE CONTRIBUTIONS. In lieu of distributing
Excess Contributions ------------------------------------ as
provided in Section 3.7(d) above, and to the extent provided
in the Adoption Agreement, the Employer may make Qualified
Non-Elective Contributions on behalf of Employees as provided
in the Adoption Agreement. In addition, in lieu of
distributing Excess Aggregate Contributions as provided in
Section 3.8 of the Plan, and to the extent elected by the
Employer in the Adoption Agreement, the Employer may make
Qualified Non-Elective Contributions on behalf of Non-Highly
Compensated Employees that are sufficient to satisfy either
the Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to regulations
under the Code.
Definition:
"Qualified Non-Elective Contributions" shall mean
contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the
Employer and allocated to Participant's accounts that
the Participant may not elect to receive in cash
until distributed from the Plan, that are
nonforfeitable when made and that are distributable
only in accordance with the distribution provisions
that are applicable to Elective Deferrals and
Qualified Matching Contributions.
3.8 LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND EMPLOYER MATCHING
CONTRIBUTIONS.
(a) GENERAL TESTS. Notwithstanding any other provisions in the
Plan, for any Plan Year, the Employer shall be permitted to
limit the contributions, as described in Sections 3.2(a) and
3.3 of the Plan, for any Highly Compensated Employee to the
extent necessary to ensure that the Plan satisfies one of the
following tests:
(i) the Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who
are Non-Highly Compensated Employees for the Plan
Year multiplied by 1.25; or
(ii) the Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who
are Non-Highly Compensated Employees for the Plan
Year multiplied by 2, provided that the Average
Contribution Percentage for Eligible Participants who
are Highly Compensated Employees does not exceed the
Average Contribution Percentage for Eligible
Participants who are Non-Highly Compensated Employees
by more than two (2) percentage points.
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(b) DEFINITIONS. For purposes of this Section 3.8 of the Plan, the
following definitions shall apply:
(i) AVERAGE CONTRIBUTION PERCENTAGE (ACP) shall mean the
average (expressed as a percentage) of the
Contribution Percentages of the Eligible Participants
in a group.
(ii) CONTRIBUTION PERCENTAGE shall mean the ratio
(expressed as a percentage) of the Participant's
Contribution Percentage Amounts to the Participant's
Compensation for the Plan Year (whether or not the
Employee was a Participant for the entire Plan Year).
(iii) ELIGIBLE PARTICIPANT shall mean any Employee who is
eligible to make -------------------- Employee
Contributions or an Elective Deferral (if the
Employer takes such contributions into account in the
calculation of the Contribution Percentage) or to
receive a Matching Contribution (including
forfeitures) or a Qualified Matching Contribution. If
an Employee Contribution is required as a condition
of participation in the Plan, any Employee who would
be a Participant in the Plan if such Employee made
such a contribution shall be treated as an Eligible
Participant on behalf of whom no Employee
Contributions are made.
(iv) AGGREGATE LIMIT shall mean the sum of (1) 125% of the
greater of the Average Deferral Percentage of the
Non-Highly Compensated Employees for the Plan Year or
the Average Contribution Percentage of Non-Highly
Compensated Employees under the Plan subject to
section 401(m) of the Code for the Plan Year
beginning with or within the Plan Year of the CODA
and (2) the lesser of 200% or two plus the lesser of
such Average Deferral Percentage or Average
Contribution Percentage.
(v) CONTRIBUTIONS PERCENTAGE AMOUNTS shall mean the sum
of the Employee --------------------------------
Contributions, Matching Contributions and Qualified
Matching Contributions (to the extent not taken into
account for purposes of the Average Deferral
Percentage test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct
Excess Aggregate Contributions or because the
contributions to which they relate are Excess
Deferrals, Excess Contributions or Excess Aggregate
Contributions. If so elected in the Adoption
Agreement, the Employer may include Qualified
Non-Elective Contributions in the Contribution
Percentage Amounts. The Employer also may elect to
use Elective Deferrals in the Contribution Percentage
Amounts so long as the Average Deferral Percentage
test is met before the Elective Deferrals are used in
the Actual Deferral Percentage test and continues to
be met following the
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<PAGE>
exclusion of those Elective Deferrals that are used
to meet the Actual Deferral Percentage test.
(vi) EMPLOYEE CONTRIBUTION shall mean any contribution
made to the Plan by or on behalf of a Participant
that is included in the Participant's gross income in
the year in which made and that is maintained under a
separate account to which earnings and losses are
allocated.
(vii) MATCHING CONTRIBUTION shall mean an Employer
contribution made to this or any other defined
contribution plan on behalf of a Participant on
account of an Employee Contribution made by such
Participant, or on account of a Participant's
Elective Deferral, under a plan maintained by the
Employer.
(c) SPECIAL RULES. The following special rules shall apply for purposes
of Section 3.8:
(i) For purposes of this Section 3.8 of the Plan, the
Contribution Percentage for any Eligible Participant
who is a Highly Compensated Employee for the Plan
Year and who is eligible to make Employee
Contributions, or to receive Matching Employer
Contributions, allocated to his account under two or
more plans described in section 401(a) of the Code or
arrangements described in section 401(k) of the Code
that are maintained by the Employer or an Affiliated
Employer shall be determined as if all such
contributions were made under a single plan. If a
Highly Compensated Employee participates in two or
more cash or deferred arrangements that have
different Plan Years, all cash or deferred
arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(ii) In the event that this Plan satisfies the
requirements of section 401(m), 401(a)(4) or 410(b)
of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of section 410(b) of the Code only if
aggregated with this Plan, then this Section 3.8 of
the Plan shall be applied by determining the
contribution percentages of Eligible Participants as
if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(m) of the
Code only if they have the same Plan Year.
(iii) For purposes of determining the Contribution
Percentage of a Participant who is a 5-percent owner
or one of the ten most highly paid Highly Compensated
Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation for
the Plan Year of Family Members, as defined in
section 414(q)(6) of the Code. Family Members with
respect to Highly Compensated Employees, shall be
disregarded as separate
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<PAGE>
Employees in determining the Contribution Percentage
for Participants who are Non-Highly Compensated
Employees and for Participants who are Highly
Compensated Employees.
(iv) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such
other requirements as may be prescribed by the
Secretary of the Treasury.
(v) Multiple Use: If one or more Highly Compensated
Employees participate in both a CODA and a plan
subject to the Average Contribution Percentage test
maintained by the Employer and the sum of the Average
Deferral Percentage and Average Contribution
Percentage of those Highly Compensated Employees
subject to either or both test exceeds the Aggregate
Limit, then the Average Contribution Percentage of
those Highly Compensated Employees who also
participate in a CODA will be reduced (beginning with
such Highly Compensated Employee whose Average
Contribution Percentage is the highest) so that the
limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage
Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The Average Deferral
Percentage and Average Contribution Percentage of the
Highly Compensated Employees are determined after any
corrections required to meet the Average Deferral
Percentage and Average Contribution Percentage tests.
Multiple use does not occur if both the Average
Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees does
not exceed 1.25 multiplied by the Average Deferral
Percentage and Average Contribution Percentage of the
Non-Highly Compensated Employees.
(vi) For purposes of determining the Contribution
Percentage test, Employee Contributions are
considered to have been made in the Plan Year in
which contributed to the Trust. Matching
Contributions and Qualified NonElective Contributions
will be considered made for a Plan Year if made no
later than the end of the twelve-month period
beginning on the day after the close of the Plan
Year.
(vii) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the
amount of Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, used in
such test.
(d) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if
not forfeitable, distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the
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preceding Plan Year. Excess Aggregate Contributions shall be
allocated to Participants who are subject to the Family Member
aggregation rules of section 414(q)(6) of the Code in the
manner prescribed by the regulations. Excess Aggregate
Contributions of Participants who are subject to the Family
Member aggregation rules shall be allocated among Family
Members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions)
of each Family Member that is combined to determine the
combined ACP. If such Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a ten percent
(10%) excess tax will be imposed on the Employer maintaining
the Plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions under the
Plan.
Determination of Income or Loss: Excess Aggregate
Contributions shall be adjusted for any income or loss. The
income or loss allocable to Excess Aggregate Contributions is
the income or loss allocable to the Voluntary Qualified
Employee Contribution Account, Matching Contribution Account
(if any, and if all amounts therein are not used in the ADP
test) and, if applicable, Qualified Non-Elective Contributions
Account and Elective Deferral Account for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year and
the denominator is the Participant's account balance(s)
attributable to Contribution Percentage Amounts without regard
to any income or loss occurring during such Plan Year.
Forfeitures of Excess Aggregate Contributions: Forfeitures of
Excess Aggregate Contributions may either be reallocated to
the accounts of Non-Highly Compensated Employees or applied to
reduce Employer contributions, as elected by the Employer in
Section 8(b) of the Adoption Agreement.
Accounting for Excess Aggregate Contributions: Excess
Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a pro rata basis from the Voluntary Employee
Contributions Account, Matching Contribution Account and
Qualified Matching Contributions Account (and, if applicable,
the Participant's Qualified Non-Elective Contributions Account
or Elective Deferral Account, or
both).
Definitions:
"Excess Aggregate Contributions" shall mean, with respect to
any Plan Year, the excess of:
(i) The aggregate Contribution Percentage Amounts taken
into account in computing the numerator of the
Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
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(ii) The maximum Contribution Percentage Amounts permitted
by the ACP test (determined by reducing contributions
made on behalf of Highly Compensated Employees in
order of their Contribution Percentages beginning
with the highest of such percentages).
Such determination shall be made after first
determining Excess Elective Deferrals pursuant to
Section 3.1 and then determining Excess Contributions
pursuant to Section 3.7.
ARTICLE IV. ALLOCATION OF FUNDS
4.1 ALLOCATION OF EMPLOYER CONTRIBUTIONS.
Employer Contributions made pursuant to Section 3.2 of the Plan shall
be allocated in accordance with the Adoption Agreement.
4.2 ALLOCATION OF NET EARNINGS OR LOSSES OF THE TRUST.
Subject to the provisions of Section 3.1 of the Trust Agreement, as of
each Valuation Date, the net earnings or losses of the Trust including
capital gains and losses whether or not realized, since the preceding
Valuation Date shall be allocated to the Accrued Benefit of all
Participants (or Beneficiaries) in accordance with the ratio which the
Accrued Benefit of each Participant bears to the aggregate of all such
Accrued Benefits.
Segregated Accounts shall be valued separately and earnings and losses
of each Segregated Account shall be determined through separate annual
valuations.
4.3 VALUATIONS.
In determining the earnings or losses of the Trust, as of each
Valuation Date the Trust shall be valued at fair market value.
4.4 ACCOUNTING FOR DISTRIBUTIONS.
All withdrawals of Participant contributions, all distributions made to
a Participant or his Beneficiary, and any transfers to another
qualified plan shall be charged to the appropriate subaccount of the
Participant's Accrued Benefit.
4.5 SEPARATE ACCOUNTS.
A separate account shall be established and maintained to reflect the
Accrued Benefit for each Participant, with subaccounts to separately
show the division described in Section 1.1 of the Plan.
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4.6 INVESTMENT OF FUNDS.
(a) INVESTMENT CONTROL.
Subject to the provisions of subsections (b) and (c)below and
only to the extent accepted by the Trustee, the management and
control of the Trust shall be vested in the Trustee.
(b) INVESTMENT LIMITATIONS.
The Trustee shall invest all funds received from the Employer
and all Fund earnings in the Investment Options in the manner
from time to time directed in writing by the Employer,
provided that (i) if the T. Rowe Price Trust Company is
Trustee, one hundred percent (100%) of the total contributions
and any earnings thereon must be invested in the Investment
Options, or (ii) if the Trustee is other than the T. Rowe
Price Trust Company, no more than fifty percent (50%) of the
total contributions received by the Trustee and earnings
thereon may be invested in assets, as described in the Trust
Agreement, other than the Investment Options.
(c) PARTICIPANT DIRECTED INVESTMENTS.
If provided in the Adoption Agreement, Participants, subject
to such reasonable restrictions as the Employer or Sponsor may
impose for administrative convenience, may designate what
percentage of all contributions will be invested in the
Investment Options provided that (i) if the T. Rowe Price
Trust Company is the Trustee, one hundred percent (100%) of
the total contributions and any earnings thereon must be
invested in the Investment Options, or (ii) if the Trustee is
other than the T. Rowe Price Trust Company, no more than fifty
percent (50%) of the total contributions received by the
Trustee and earnings thereon may be invested in assets as
described in the Trust Agreement, other than the Investment
Options. The Employer must complete a schedule of Participant
designations.
(d) PARTICIPANT ELECTION.
If the Adoption Agreement provides for Participant directed
investments, and if a Participant does not make a written
designation of an Investment Option, the Employer shall direct
the Trustee to invest all amounts held or received on account
of such Participant in the Investment Option which in the
opinion of the Employer best protects principal.
(e) EMPLOYER SECURITIES.
If provided in the Adoption Agreement, the Employer and/or
Participants may direct that contributions will be invested in
Qualifying Employer Securities (within
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the meaning of section 407(d)(5) of ERISA), subject to such
restrictions as the Employer, the Trustee or the Sponsor may
impose for administrative convenience or legal compliance. The
Employer and/or Participants, as the case may be, must provide
such directions in a form satisfactory to the Sponsor. If
agreed to in writing between the Sponsor and the Employer,
contributions invested in Qualifying Employer Securities shall
not be considered in applying the limits on investments set
forth in subsections (b) and (c) above.
(f) FACILITATION.
Notwithstanding any instruction from any Participant for
investment of funds in an Investment Option as provided for
herein, the Trustee shall have the right to hold uninvested
any amounts intended for investment until such time as
investment may be made in accordance with subsection (b), (c)
or (e) above and the Trust Agreement.
ARTICLE V. LIMITATION ON ALLOCATIONS
5.1 PARTICIPANTS NOT COVERED UNDER OTHER PLANS.
(a) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer, or a welfare benefit fund (as defined in section
419(e) of the Code) maintained by the Employer, or an
individual medical account (as defined in section 415(1)(2) of
the Code), maintained by the Employer, which provides an
Annual Addition (as defined in Section 5.4 below), the amount
of Annual Additions which may be credited to the Accrued
Benefit of the Participant for any Limitation Year shall not
exceed the lesser of the Maximum Permissible Amount or any
other limitation contained in this Plan. If contributions for
and/or allocations to the Accrued Benefit of the Participant
would cause the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount contributed
or allocated will be reduced to the extent that the Annual
Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(b) Prior to determining a Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for the Participant on the basis of a
reasonable estimation of the Participant's Compensation for
the Limitation Year, uniformly determined for all Participants
similarly situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
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(d) If, for any Limitation Year the maximum Annual Additions is
exceeded by reason of allocation of forfeitures, a reasonable
error in estimating a Participant's Compensation, a reasonable
error in determining the amount of Elective Deferrals or under
other limited facts and circumstances approved by the Internal
Revenue Service, then, any such excess shall be disposed of in
the following order:
(i) any Voluntary Employee Contributions, and any income
attributable thereto, to the extent they would reduce
the excess amount, shall be returned to the
Participant;
(ii) any deferrals, and any income attributable thereto,
to the extent they would reduce the excess amount,
shall be returned to the Participant;
(iii) if after the application of paragraph (i) an excess
amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the
excess amount in the Participant's account shall be
used to reduce Employer contributions (including any
allocation of forfeitures) for such Participant in
the next Limitation Year, and each succeeding
Limitation Year, if necessary;
(iv) if after the application of paragraph (i) an excess
amount still exists, and the Participant is not
covered by the Plan at the end of the Limitation
Year, the excess amount shall be held unallocated in
a suspense account. The suspense account shall be
used to reduce future Employer contribution
(including allocation of any forfeitures) for all
remaining Participants in the next Limitation Year,
and each succeeding Limitation Year if necessary;
(v) if a suspense account is in existence at any time
during the Limitation Year pursuant to this Section,
no investment gains or losses or other income may be
allocated to such suspense account, and amounts held
in the account may not be distributed to the
Participants or Beneficiaries. Any balance which may
be in the account upon termination of the Plan shall
revert to the Employer. If a suspense account is in
existence at any time during a particular Limitation
Year, all amounts in the suspense account must be
allocated and reallocated to Participants' accounts
before any Employer or any Employee contributions may
be made to the Plan for that Limitation Year. Excess
amounts may not be distributed to Participants or
former Participants.
5.2 PARTICIPANTS COVERED UNDER OTHER DEFINED CONTRIBUTION PLANS.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified master or
prototype defined contribution plan maintained by the
Employer, a welfare benefit fund (as defined in section 419(e)
of the Code)
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maintained by the Employer, or an individual medical account
(as defined in section 415(1)(2) of the Code) maintained by
the Employer, which provides an Annual Addition as defined in
Section 5.4(a), during any Limitation Year. The Annual
Additions which may be credited to the Accrued Benefit of a
Participant under this Plan for any such Limitation Year shall
not exceed the Maximum Permissible Amount reduced by the
Annual Additions credited to the Accrued Benefit of a
Participant under the other plans and welfare benefit funds
for the same Limitation Year. If the Annual Additions with
respect to the Participant under other defined contribution
plans and welfare funds maintained by the Employer are less
than the Maximum Permissible Amount and the Employer
contributions that would otherwise be contributed or allocated
to the Accrued Benefit of the Participant under this Plan
would cause the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount contributed
or allocated will be reduced so that the Annual Additions
under all plans and funds for the Limitation Year shall equal
the Maximum Permissible Amount. If Annual Additions with
respect to the Participant under such other defined
contribution plans and welfare benefit funds in the aggregate
are equal to or greater than the Maximum Permissible Amount,
no amount will be contributed or allocated to the Accrued
Benefit of the Participant under this Plan for the Limitation
Year.
(b) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described
in Section 5.1(b).
(c) As soon as administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(d) If pursuant to Section 5.2(c) or as a result of the allocation
of forfeitures, a Participant's Annual Additions under this
Plan and such other plans would result in an excess amount for
a Limitation Year, the excess amount shall be deemed to
consist of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been
allocated first regardless of the actual allocation date.
(e) If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the excess amount attributed
to this Plan will be the product of:
(i) the total excess amount allocated as of such date,
(ii) the ratio of (1) the Annual Additions allocated to
the Participant for the Limitation Year as of such
date under this Plan to (2) the total Annual
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Additions allocated to the Participant for the
Limitation Year as of such date under this and all
the other qualified master or prototype defined
contribution plans.
(f) Any excess amount attributed to this Plan shall be disposed of
in the manner described in Section 5.1(d).
(g) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
master or prototype plan, Annual Additions which may be
credited to the Participant's account under this Plan for any
Limitation Year will be limited in accordance with Sections
(a) through (f) above as though the other plan were a master
or prototype plan unless the Employer provides other
limitations in Section 16 of the Adoption Agreement.
5.3 PARTICIPANTS COVERED UNDER BOTH DEFINED BENEFIT AND DEFINED
CONTRIBUTION PLANS.
If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of
the Participant's Defined Benefit Fraction and Defined Contribution
Fraction shall not exceed 1.0 in any Limitation Year. The Annual
Additions which may be credited to the Accrued Benefit of a Participant
under this Plan for any Limitation Year will be limited in accordance
with Section 16 of the Adoption Agreement.
5.4 DEFINITIONS.
For purposes of Section 5.1 through 5.3, the following definitions
shall apply:
(a) ANNUAL ADDITIONS for a Limitation Year shall mean the sum of;
(i) Employer Contributions,
(ii) Employee Contributions,
(iii) forfeitures, and
(iv) amounts allocated, after March 31, 1984, to an
individual medical account, as defined in section
415(1)(2) of the Code, which is part of a pension or
annuity plan maintained by the Employer, are treated
as Annual Additions to a defined contribution plan.
Also amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
post-retirement medical benefits, allocated to the
separate account of a Key Employee, as defined in
section 419A(d)(3) of the Code, under a welfare
benefit fund,
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as defined in section 419(e) of the Code, maintained
by the Employer are treated as Annual Additions to a
defined contribution plan.
For this purpose, any excess amount applied under
Section 5.1 or 5.2 in the Limitation Year to reduce
Employer contributions will be considered Annual
Additions for such Limitation Year.
(b) COMPENSATION shall mean a Participant's Earned Income, wages,
salaries and fees for professional services and other amounts
received for personal services actually rendered in the course
of employment with the Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen,
Compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses),
and excluding the following:
(i) Employer contributions to a plan of deferred
Compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
simplified Employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred Compensation;
(ii) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(iv) other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity described in section 403(b) of
the Code (whether or not the amounts are actually
excludible from the gross income of the Employee).
For purposes of applying the limitations of this Article,
Compensation for a Limitation Year is the Compensation
actually paid or includible in gross income during such year.
Notwithstanding the above, Compensation for a Participant who
is permanently and totally disabled (as defined in section
22(e)(3) of the Code) is the Compensation such Participant
would have received for the Limitation Year if the Participant
had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled; such imputed
Compensation for the disabled Participant may be taken into
account only if the Participant is not a
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Highly Compensated Employee (as defined in section 414(q) of
the Code) and contributions made on behalf of such Participant
are nonforfeitable when made.
(c) DEFINED BENEFIT FRACTION shall mean a fraction, the numerator
of which is the sum of the Participant's projected annual
benefit under all defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of
which is the lesser of one hundred twenty-five percent (125%)
of the dollar limitation in effect for the Limitation Year
under section 415(b) and (d) of the Code or one hundred forty
percent (140%) of the Highest Average Compensation including
any adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125% of the sum of the annual benefits
under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of
the Plan after May 5, 1986. The preceding sentence applies
only if the defined benefit plans individually and in the
aggregate satisfied the requirements of section 415 of the
Code for all Limitation Years beginning before January 1,
1987.
(d) DEFINED CONTRIBUTION DOLLAR LIMITATION shall mean $30,000 or
if greater, one fourth of the defined benefit dollar
limitation set forth in section 415(b)(1) of the Code as in
effect for the Limitation Year.
(e) DEFINED CONTRIBUTION FRACTION shall mean a fraction, the
numerator of which is the ----------------------------- sum of
the Annual Additions to the Participant's account under all
defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior
Limitation Years (including the Annual Additions attributable
to the Participant's nondeductible Employee Contributions to
all defined benefit plans, whether or not terminated,
maintained by the Employer and the Annual Additions
attributable to all welfare benefit funds, as defined in
section 419(e) of the Code, and individual medical accounts,
as defined in section 415(1)(2) of the Code, maintained by the
Employer), and the denominator of which is the sum of the
maximum aggregate amount for the current and all prior
Limitation Years of Service with the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any Limitation Year
is the lesser of one hundred twenty-five percent (125%) of the
dollar limitation determined under section 415(b) and (d) of
the Code in effect under section 415(c)(1)(A) of the Code or
thirty-five percent (35%) of the Participant's Compensation
for such year.
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If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
Contributions as an Annual Addition.
(f) EMPLOYER shall mean the Employer that adopts this Plan, and
all members of a -------- controlled group of corporations (as
defined in section 414(b) of the Code as modified by section
415(h) of the Code), all commonly controlled trades or
businesses (as defined in section 414(c) of the Code as
modified by section 415(h) of the Code) or affiliated service
groups (as defined in section 414(m) of the Code) of which the
adopting Employer is a part and any other entity required to
be aggregated with the Employer pursuant to regulations under
section 414(o) of the Code.
(g) EXCESS AMOUNT shall mean the excess of the Participant's
Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(h) HIGHEST AVERAGE COMPENSATION shall mean the average
Compensation for the three consecutive Years of Service (as
measured by the Limitation Year) with the Employer that
produces the highest average.
(i) LIMITATION YEAR shall mean a calendar year, or the 12
consecutive month period elected by the Employer in the
Adoption Agreement. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12 consecutive month period,
the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(j) MASTER OR PROTOTYPE PLAN shall mean a plan the form of which
is the subject of a favorable opinion letter from the Internal
Revenue Service.
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(k) MAXIMUM PERMISSIBLE AMOUNT shall mean the maximum Annual
Additions that may be contributed or allocated to a
Participant's account under this Plan for any Limitation Year
shall not exceed the lesser of:
(i) the defined contribution dollar limitation, or
(ii) twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year.
The Compensation limitation referred to in (ii) above shall
not apply to any contribution for medical benefits (within the
meaning of section 401(h) or 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under section
415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive
month period, the Maximum Permissible Amount shall not exceed
the defined contribution dollar limitation, multiplied by the
following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
12
(l) Projected Annual Benefit shall mean the annual retirement
benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a
straight life annuity or qualified joint and survivor annuity)
to which a Participant would be entitled under the terms of
the Plan assuming:
(i) the Participant will continue employment until the
Normal Retirement Age under the Plan (or current age
if later), and
(ii) the Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the Plan remain constant
for all future Limitation Years.
5.5 CONTROL OF TRADES OR BUSINESSES BY OWNER-EMPLOYEE.
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and
the plan established for other trades or businesses must, when looked
at as a single plan, satisfy section 401(a) and (d) of the Code for the
Employees of this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
Employees of the other trades or
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businesses must be included in a plan which satisfies section 401(a)
and (d) of the Code and which provides contributions and benefits not
less favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the Employees under the plan of the trades or businesses
which are controlled must be as favorable as those provided for him
under the most favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an Owner Employee, or two or
more Owner-Employees, will be considered to control a trade or business
if the Owner Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such Owner-Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding sentence.
ARTICLE VI. ENTITLEMENT TO BENEFITS
6.1 RETIREMENT.
A Participant shall be deemed to have reached retirement upon his
termination of employment on or after the first to occur of the
following events:
(a) NORMAL RETIREMENT. Upon reaching his Normal Retirement Date as
determined in accordance with the Adoption Agreement.
(b) EARLY RETIREMENT. To the extent provided in the Adoption
Agreement, upon reaching his Early Retirement Date as
determined in accordance with the Adoption Agreement.
As of his Distribution Date, a retired Participant shall be entitled to
the full value of his Accrued Benefit, which shall be deemed to be one
hundred percent (100%) vested and nonforfeitable upon reaching his
Normal Retirement Date (or Early Retirement Date if
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provided in the Adoption Agreement) whether or not the Participant
continues his employment with the Employer beyond such date.
6.2 DISABILITY.
In the event that a Participant, at any time prior to his retirement or
other termination of employment with the Employer, shall become totally
and permanently disabled, and if proof of such disability satisfactory
to the Employer is furnished (which proof shall include a written
statement of a licensed physician appointed or approved by the
Employer), then, as of his Distribution Date, such Participant shall be
entitled to the full value of his Accrued Benefit which shall be deemed
to be one hundred percent (100%) vested and nonforfeitable. For
purposes of this Section 6.2, total and permanent disability shall mean
the inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be
expected to result in death or to last for a continuous period of at
least twelve (12) months.
6.3 DEATH.
In the event of the death of a Participant prior to his retirement,
disability or other termination of employment with the Employer, the
full value of his Accrued Benefit, which shall be deemed to be one
hundred percent (100%) vested and nonforfeitable shall become payable
(according to the provisions of Article VII of the Plan), to his
designated Beneficiary, upon submission of proof of death satisfactory
to the Employer.
6.4 TERMINATION OF EMPLOYMENT.
In the event a Participant terminates employment with the Employer for
any reason other than retirement, disability or death, such Participant
shall become entitled to the vested portion of his Accrued Benefit,
payable according to the provisions of Article VII of the Plan, which
shall be determined as follows:
(a) A Participant shall at all times be one hundred percent (100%)
vested in the portion of his Accrued Benefit derived from his
Elective Deferral Account, Voluntary Employee Contributions
Account, Qualified Non-Elective Contributions Account,
Qualified Matching Contributions Account and Rollover or
Transfer
Account.
(b) A Participant's vested and nonforfeitable interest in the
portion of his Accrued Benefit derived from his Employer
Contribution Accounts shall be determined in accordance with
the vesting schedule selected by the Employer in the Adoption
Agreement. If no vesting schedule is selected in the Adoption
Agreement, a Participant shall be considered 100% vested in
all portions of his Accrued Benefit.
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(c) In the event of a termination of employment as described in
this Section 6.4 at a time when a Participant's vested
interest in his Employer Contribution Account is less than
100%, then, as of the forfeiture date set forth in Section 7.7
of the Plan, that portion which shall not have been vested
shall be forfeited and used either to reduce Employer
Contributions or reallocated among the accounts of other
Participants as determined in the Adoption Agreement.
(d) In order to determine the vested interest of a Participant
after a Break in Service, the following shall apply:
(i) If the Employer has elected in the Adoption Agreement
to credit Service based on Elapsed Time, then, for
purposes of the vesting schedule selected in the
Adoption Agreement, the crediting of Service shall be
subject to the following:
(1) If a Participant who has voluntarily
terminated employment or has been discharged
by the Employer returns to employment and is
credited with an Hour of Service on or
before incurring a Period of Severance
(consisting of less than 12 consecutive
months), the Participant will receive credit
for the time elapsed during such absence;
(2) If a Participant is absent for a reason
other than termination or discharge and then
voluntarily terminates or is discharged, the
date on which the Participant must first be
credited with an Hour of Service to receive
credit for the time elapsed during such
absence is the first anniversary of the
first day of absence;
(3) If a Participant has a Period of Severance
of five (5) years or more, then Service
after such Period of Severance shall not be
taken into account for purposes of
determining the nonforfeitable percentage of
the Participant's Accrued Benefit derived
from Employer contributions which accrued
prior to such Period of Severance.
(ii) If the Employer has elected in the Adoption Agreement
to credit Service based on Hours of Service and Years
of Service, then, for purposes of the vesting
schedule selected in the Adoption Agreement, the
crediting of Service shall be determined as follows:
(1) In the case of a Participant who has five
(5) consecutive 1-year Breaks in Service,
all Years of Service after such Breaks in
Service shall be disregarded for purposes of
determining the Participant's vested Accrued
Benefit derived from Employer contributions
which
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accrued before such breaks, but both
pre-break and post-break Service shall count
for purposes of determining the
Participant's vested Accrued Benefit derived
from Employer contributions accruing after
such breaks. Both accounts shall share in
the earnings and losses of the Trust;
(2) In the case of a Participant who does not
have five (5) consecutive 1-year Breaks in
Service, both the pre-break and post-break
Service shall count in determining both the
Participant's pre-break and post-break
vested Accrued Benefit derived from Employer
contributions.
(e) If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or
if the Plan is deemed amended by an automatic change to or
from a Top Heavy vesting schedule, each Participant with at
least 3 Years of Service with the Employer may elect to have
the nonforfeitable percentage computed under the Plan without
regard to such amendment or change.
The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to
be made and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written
notice of the amendment by the Employer or Plan
Administrator.
6.5 OTHER PERMITTED DISTRIBUTIONS.
(a) HARDSHIP.
In addition to the in-service withdrawals described in Section
7.8 and subject to the provisions of Section 8.4 of the Plan,
where applicable, to the extent provided in the Adoption
Agreement, distributions of Elective Deferrals or the vested
portion of Employer Contribution Accounts may be made on
account of financial hardship if the distribution is necessary
in light of the immediate and heavy financial needs of the
Participant. Notwithstanding the preceding, for Plan Years
beginning after December 31, 1988, amounts attributable to
Qualified Non-Elective Contributions and Qualified Matching
Contributions may not be distributed merely on account of
hardship. Also, income allocated to Elective Deferrals after
December 31, 1988 may not be distributed on account of
hardship. Distribution of Elective Deferrals (and earnings
thereon accrued as of December
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31, 1988) may be made to a Participant in the event of
hardship. For purposes of this Section, hardship is defined as
an immediate and heavy financial need of the Employee where
such Employee lacks other available resources. Hardship
distributions are subject to the spousal consent requirements
contained in sections 401(a)(11) and 417 of the Code.
(i) The following are the only financial needs considered
immediate and heavy: deductible medical expenses
(within the meaning of section 213(d) of the Code) of
the Employee, the Employee's spouse, children or
dependents; the purchase (excluding mortgage
payments) of a principal residence of the Employee;
payment of tuition and related educational fees for
the next twelve months of post-secondary education
for the Employee, the Employee's spouse, children or
dependents; or the need to prevent the eviction of
the Employee from, or a foreclosure on the mort gage
of, the Employee's principal residence.
(ii) A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the
Employee only if:
(1) The Employee has obtained all distributions,
other than hardship distributions, and all
nontaxable loans under all plans maintained
by the Employer;
(2) All plans maintained by the Employer provide
that the Employee's Elective Deferrals (and
Employee Contributions) will be suspended
for twelve months after the receipt of the
hardship distribution;
(3) The distribution is not in excess of the
amount of an immediate and heavy financial
need (including amounts necessary to pay any
federal, state or local income taxes or
penalties reasonably anticipated to result
from the distribution); and
(4) All plans maintained by the Employer provide
that the Employee may not make Elective
Deferrals for the Employee's taxable year
immediately following the taxable year of
the hardship distribution in excess of the
applicable limit under section 402(g) of the
Code for such taxable year less the amount
of such Employee's Elective Deferrals for
the taxable year of the hardship
distribution.
(iii) Processing of applications and distributions
of amounts under this Section, on account of
a bona fide financial hardship, must be made
as soon as administratively feasible.
(b) ATTAINMENT OF AGE 59 1/2.
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To the extent provided in the Adoption Agreement, a
Participant shall be permitted to withdraw all or a portion of
his vested Accrued Benefit under the Plan, on or after the
attainment of age 59 1/2.
(c) DISTRIBUTION UPON PLAN TERMINATION.
To the extent provided in the Adoption Agreement the full
value of a Participant's Accrued Benefit shall be distributed
to the Participant (or his Beneficiary) as soon as
administratively feasible after the termination of the Plan,
provided that neither the Employer nor an Affiliated Employer
maintains a successor plan. If the Employer does not elect
this option in the Adoption Agreement, the provisions under
Section 13.2 of the Plan shall apply.
(d) DISTRIBUTION UPON SALE OF ASSETS.
To the extent provided in the Adoption Agreement Section
10(d), the full value of a Participant's Accrued Benefit may
at Participant's discretion be distributed to the Participant
as soon as administratively feasible after the sale, to an
entity that is not an Affiliated Employer, of substantially
all of the assets used by the Employer in the trade or
business in which the Participant is employed. If such entity
continues to maintain this Plan, this provision shall apply
with respect to Employees who continue employment with the
entity acquiring such assets.
(e) DISTRIBUTION UPON SALE OF SUBSIDIARY.
To the extent provided in the Adoption Agreement Section
10(d), the full value of a Participant's Accrued Benefit may
at the Participant's discretion be distributed to the
Participant as soon as administratively feasible after the
sale, to an entity that is not an Affiliated Employer, of an
incorporated Affiliated Employer's interest in a subsidiary of
which the Participant is employed. If such entity continues to
maintain this Plan, this provision shall apply with respect to
Employees who continue employment with such subsidiary.
ARTICLE VII. DISTRIBUTION OF BENEFITS
7.1 GENERAL.
Except as otherwise provided in Article VIII, Joint and Survivor
Annuity Requirements, the requirements of this Article shall apply to
any distribution of a Participant's interest and will take precedence
over any inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this Article apply to calendar years
beginning after December 31, 1984.
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All distributions required under this Article shall be determined and
made in accordance with the Income Tax Regulations under section
401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the regulations.
7.2 METHOD OF DISTRIBUTION.
To the extent provided in the Adoption Agreement, and subject to the
provisions of Article VIII of the Plan, a Participant may elect to have
his Accrued Benefit distributed in the following manner;
(a) lump sum;
(b) monthly, quarterly or annual installments;
(c) a paid-up annuity contract for the Participant and/or his
Beneficiary (any annuity contract distributed under the Plan
shall be issued so as to be nontransferable).
Payment of benefits may be made in cash or in kind at the
Participant's discretion.
In the absence of an election by the Participant, distribution will be
made in a lump sum payment. The Plan Administrator will instruct the
Trustee as to the insurer and the form of any annuity contract to be
purchased and the terms of any annuity contract purchased and
distributed by the Plan to a Participant or spouse shall comply with
the requirements of this Plan.
7.3 INSTALLMENT PAYMENTS.
If all or any portion of a Participant's Accrued Benefit is to be paid
in installments, the Participant shall determine the period over which
such installments shall be paid. In the discretion of the Employer, the
total amount to be so distributed shall either: (a) continue to be
invested in those assets currently retained in the Trust, in which case
any income, gain or loss attributable thereto (but not Employer
contributions or forfeitures) shall be reflected in the installment
distributions, or (b) be transferred to a Segregated Account.
7.4 DISTRIBUTION REQUIREMENTS.
(a) COMMENCEMENT OF BENEFITS.
(i) Unless the Participant elects otherwise, distribution
of benefits will begin no later than the 60th day
after the latest of the close of the Plan Year in
which:
(1) the Participant attains age 65 (or the
Normal Retirement Age specified in the Plan,
if earlier);
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(2) occurs the 10th anniversary of the year in
which the Participant commenced
participation in the Plan; or
(3) the Participant terminates Service with the
Employer.
(ii) Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution
while a benefit is immediately distributable within
the meaning of Section 7.6 of the Plan, shall be
deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this
Section.
(b) LIMITS ON SETTLEMENT OPTIONS.
As of the first distribution calendar year, distributions, if
not made in a single sum, may only be made over one of the
following periods (or a combination thereof);
(i) the life of the Participant,
(ii) the life of the Participant and a designated
Beneficiary,
(iii) a period certain not extending beyond the life
expectancy of the Participant, or
(iv) a period certain not extending beyond the joint life
and last survivor expectancy of the Participant and a
designated Beneficiary.
(c) MINIMUM AMOUNTS TO BE DISTRIBUTED.
If the Participant's interest is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the required beginning date:
(i) INDIVIDUAL ACCOUNT.
(1) If a Participant's benefit is to be
distributed over (a) a period not extending
beyond the life expectancy of the
Participant or the joint life and last
survivor expectancy of the Participant and
the Participant's designated Beneficiary or
(b) a period not extending beyond the life
expectancy of the designated Beneficiary,
the amount required to be distributed for
each calendar year, beginning with
distributions for the first distribution
calendar year, must at least equal the
quotient obtained by dividing the
Participant's benefit by the applicable life
expectancy.
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(2) For calendar years beginning before January
1, 1989, if the Participant's spouse is not
the designated Beneficiary, the method of
distribution selected must assure that at
least 50% of the present value of the amount
available for distribution is paid within
the life expectancy of the Participant.
(3) For calendar years beginning after December
31, 1988, the amount to be distributed each
year, beginning with distributions for the
first distribution calendar year shall not
be less than the quotient obtained by
dividing the Participant's benefit by the
lesser of (a) the applicable life expectancy
or (b) if the Participant's spouse is not
the designated Beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of section 1.401(a)(9)-2 of the
Income Tax Regulations. Distributions after
the death of the Participant shall be
distributed using the applicable life
expectancy in Section 7.4(c)(i) above as the
relevant divisor without regard to
regulations section 1.401(a)(9)-2.
(4) The minimum distribution required for the
Participant's first distribution calendar
year must be made on or before the
Participant's required beginning date. The
minimum distribution for other calendar
years, including the minimum distribution
for the distribution calendar year in which
the Employee's required beginning date
occurs, must be made on or before December
31 of that distribution calendar year.
(ii) Other forms.
If the Participant's benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of section 401(a)(9)
of the Code and the regulations thereunder.
7.5 DISTRIBUTION OF DEATH BENEFITS.
(a) METHOD OF DISTRIBUTIONS.
(i) If the Participant dies after distribution of his or
her interest has begun, the remaining portion of such
interest will continue to be distributed at least as
rapidly as under the method of distribution being
used prior to the Participant's death.
(ii) If the Participant dies before distribution of his or
her interest begins, distribution of the
Participant's entire interest shall be completed by
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December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the
extent that an election is made to receive
distributions in accordance with (1) or (2) below:
(1) if any portion of the Participant's interest
is payable to a designated Beneficiary,
distributions may be made over the life or
over a period certain not greater than the
life expectancy of the designated
Beneficiary commencing on or before December
31 of the calendar year immediately
following the calendar year in which the
Participant died;
(2) if the designated Beneficiary is the
Participant's surviving spouse, the date
distributions are required to begin in
accordance with (1) above shall not be
earlier than the later of (a) December 31 of
the calendar year immediately following the
calendar year in which the Participant died
and (b) December 31 of the calendar year in
which the Participant would have attained
age 70 1/2.
If the Participant has not made an election
pursuant to this Section (ii) by the time of
his or her death, the Participant's
designated Beneficiary must elect the method
of distribution no later than the earlier of
(a) December 31 of the calendar year in
which distributions would be required to
begin under this Section, or (b) December 31
of the calendar year which contains the
fifth anniversary of the date of death of
the Participant. If the Participant has no
designated Beneficiary, or if the designated
Beneficiary does not elect a method of
distribution, distribution of the
Participant's entire interest must be
completed by December 31 of the calendar
year containing the fifth anniversary of the
Participant's death.
(iii) For purposes of Section 7.5(a)(ii) above, if the
surviving spouse dies after the Participant, but
before payments to such spouse begin, the provisions
of Section 7.5(a)(ii), with the exception of
paragraph (2) therein, shall be applied as if the
surviving spouse were the Participant.
(iv) For purposes of this Section 7.5, any amount paid to
a child of the Participant will be treated as if it
had been paid to the surviving spouse if the amount
becomes payable to the surviving spouse when the
child reaches the age of majority.
(v) For the purposes of this Section 7.5, distribution of
a Participant's interest is considered to begin on
the Participant's required beginning date (or, if
Section 7.5(a)(iii) above is applicable, the date
distribution is required to begin to the surviving
spouse pursuant to Section 7.5(a)(ii) above). If
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distribution in the form of an annuity described in
Section 7.4(c)(i)(2) above irrevocably commences to
the Participant before the required beginning date,
the date distribution is considered to begin is the
date distribution actually commences.
(b) DEFINITIONS.
(i) APPLICABLE LIFE EXPECTANCY. The life expectancy (or
joint life and last ---------------------------
survivor expectancy) is calculated using the attained
age of the Participant (or designated Beneficiary) as
of the Participant's (or designated Beneficiary's)
birthday in the applicable calendar year reduced by
one for each calendar year which has elapsed since
the date life expectancy was first calculated. If
life expectancy is being recalculated, the applicable
life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be
the first distribution calendar year, and if life
expectancy is being recalculated, such succeeding
calendar year. If annuity payments commence in
accordance with Section 7.4(c)(i)(2) before the
required beginning date, the applicable calendar year
is the year such payments commence. If distribution
is in the form of an immediate annuity purchased
after the Participant's death with the Participant's
remaining interest, the applicable calendar year is
the year of purchase.
(ii) DESIGNATED BENEFICIARY. The individual who is
designated as the Beneficiary under the Plan in
accordance with section 401(a)(9) of the Code and the
regulations thereunder.
(iii) DISTRIBUTION CALENDAR YEAR. A calendar year for which
a minimum --------------------------- distribution is
required. For distributions beginning before the
Participant's death, the first distribution calendar
year is the calendar year immediately preceding the
calendar year which contains the Participant's
required beginning date. For distributions beginning
after the Participant's death, the first distribution
calendar year is the calendar year in which
distributions are required to begin pursuant to
Section 7.5(a) above.
(iv) LIFE EXPECTANCY. Life expectancy and joint life and
last survivor ---------------- expectancy are
computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the Income Tax
Regulations. Unless otherwise elected by the
Participant (or spouse, in the case of distributions
described in Section 7.5(a)(ii)(2) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant
(or spouse) and shall apply to all subsequent years.
The life expectancy of a nonspouse Beneficiary may
not be recalculated.
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(v) PARTICIPANT'S BENEFIT.
(1) The account balance as of the last Valuation
Date in the calendar year immediately
preceding the distribution calendar year
(valuation calendar year) increased by the
amount of any contributions or forfeitures
allocated to the account balance as of dates
in the valuation calendar year after the
Valuation Date and decreased by
distributions made in the valuation calendar
year after the Valuation Date.
(2) Exception for second distribution calendar
year. For purposes of paragraph (1) above,
if any portion of the minimum distribution
for the first distribution calendar year is
made in the second distribution calendar
year on or before the required beginning
date, the amount of the minimum distribution
made in the second distribution calendar
year shall be treated as if it has been made
in the immediately preceding distribution
calendar year.
(vi) REQUIRED BEGINNING DATE.
(1) GENERAL RULE. The required beginning date of
a Participant is the first day of April of
the calendar year following the calendar
year in which the Participant attains age 70
1/2.
(2) TRANSITIONAL RULES. The required beginning
date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined
in accordance with (a) or (b) below:
(A) NON-5-PERCENT OWNERS. The required
beginning date of a Participant who
is not a 5-percent owner is the
first day of April of the calendar
year following the calendar year in
which the later of retirement or
attainment of age 70 1/2 occurs.
(B) 5-PERCENT OWNERS. The required
beginning date of a Participant who
is a 5-percent owner during any year
beginning after December 31, 1979,
is the first day of April following
the later of:
i) the calendar year in which
the Participant attains age
70 1/2 or
ii) the earlier of the calendar
year with or within which
ends the Plan Year in which
the Participant becomes
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a 5-percent owner, or the
calendar year in which the
Participant retires.
The required beginning date
of a Participant who is not
a 5-percent owner who
attains age 70 1/2 during
1988 and who has not
retired as of January 1,
1989, is April 1, 1990.
(3) 5-PERCENT OWNER. A Participant is treated as
a 5-percent owner for purposes of this
Section if such Participant is a 5- percent
owner as defined in section 416(i) of the
Code (determined in accordance with section
416 of the Code but without regard to
whether the Plan is Top Heavy) at any time
during the Plan Year ending with or within
the calendar year in which such owner
attains age 66 1/2 or any subsequent Plan
Year.
(4) DISTRIBUTIONS BEGUN. Once distributions have
begun to a 5-percent owner under this
Section, they must continue to be
distributed, even if the Participant ceases
to be a 5-percent owner in a subsequent
year.
(c) TRANSITIONAL RULE.
(i) Notwithstanding the other requirements of this
Article and subject to the requirements of Article
VIII of the Plan, distribution on behalf of any
Employee, including a 5-percent owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
(1) The distribution by the Trust is one which
would not have disqualified such Trust under
section 401(a)(9) of the Code as in effect
prior to amendment by the Deficit Reduction
Act of 1984;
(2) The distribution is in accordance with a
method of distribution designated by the
Employee whose interest in the Trust is
being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee;
(3) Such designation was in writing, was signed
by the Employee or the Beneficiary, and was
made before January 1, 1984;
(4) The Employee had accrued a benefit under the
Plan as of December 31, 1983;
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(5) The method of distribution designated by the
Employee or the Beneficiary specifies the
time at which distribution will commence,
the period over which distributions will be
made, and in the case of Employee listed in
order of priority.
(ii) A distribution upon death will not be covered by this
transitional rule unless the information in the
designation contains the required information
described above with respect to the distributions to
be made upon the death of the Employee.
(iii) For any distribution which commences before January
1, 1984, but continues after December 31, 1983, the
Employee, or the Beneficiary, to whom such
distribution is being made, will be presumed to have
designated the method of distribution under which the
distribution is being made if the method of
distribution was specified in writing and the
distribution satisfies the requirements in
7.5(c)(i)(1) and (5).
(iv) If a designation is revoked, any subsequent
distribution must satisfy the requirements of section
401(a)(9) of the Code and the regulations thereunder.
If a designation is revoked subsequent to the date
distributions are required to begin, the Trust must
distribute by the end of the calendar year following
the calendar year in which the revocation occurs the
total amount not yet distributed which would have
been required to have been distributed to satisfy
section 401(a)(9) of the Code and the regulations
thereunder, but for the section 242(b)(2) election.
For calendar years beginning after December 31, 1988,
such distributions must meet the minimum distribution
incidental benefit requirements in section
1.401(a)(9)-2 of the Income Tax Regulations. Any
changes in the designation will be considered to be a
revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one
not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition
does not alter the period over which distributions
are to be made under the designation, directly or
indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is
transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
7.6 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT AND RESTRICTIONS ON
IMMEDIATE DISTRIBUTION.
If the value of a Participant's vested account balance derived from
Employer and Employee Contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the account balance is
immediately distributable, the Participant and the
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Participant's spouse (or where either the Participant or the spouse has
died, the survivor) must consent to any distribution of such account
balance. The consent of the Participant and the Participant's spouse
shall be obtained in writing within the 90-day period ending on the
annuity starting date. The annuity starting date is the first day of
the first period for which an amount is paid as an annuity or any other
form. The Plan Administrator shall notify the Participant and the
Participant's spouse of the right to defer any distribution until the
Participant's account balance is no longer immediately distributable.
Such notification shall include a general description of the material
features, and an explanation of the relative values of the optional
forms of benefit available under the Plan, in a manner that would
satisfy the notice requirements of section 417(a)(3) of the Code, and
shall be provided no less than 30 days and no more than 90 days prior
to the annuity starting date.
Notwithstanding the foregoing, only the Participant needs consent to
the commencement of a distribution in the form of a qualified joint and
survivor annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a qualified
joint and survivor annuity is not required with respect to the
Participant pursuant to Section 8.6 of the Plan, only the Participant
needs consent to the distribution of an account balance that is
immediately distributable.) Neither the consent of the Participant nor
the Participant's spouse shall be required to the extent that a
distribution is required to satisfy section 401(a)(9) or 415 of the
Code. In addition, upon termination of this Plan, if the Plan does not
offer an annuity option (purchased from a commercial provider), the
Participant's account balance may, without the Participant's consent,
be distributed to the Participant or transferred to another defined
contribution plan (other than an employee stock ownership plan as
defined in section 4975(e)(7) of the Code) within the same controlled
group.
An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains (or would have attained if not
deceased) the later of Normal Retirement Age or age 62.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to accumulated
deductible Employee Contributions within the meaning of section
72(o)(5)(B) of the Code.
In the absence of an election to receive an immediate distribution, the
Participant's Accrued Benefit shall, in the discretion of the Employer,
remain invested in the commingled Trust assets or be transferred to a
Segregated Account. The following provisions shall apply to termination
benefits:
(a) The distribution of benefits to a Participant who has reached
his Distribution Date by reason of a termination of employment
other than retirement, disability or death
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shall be deferred until the first date the Participant would
have been eligible for retirement under the Plan unless the
Participant elects to commence distribution of such benefits
at an earlier date. Prior to the commencement of benefits, the
deferred benefits shall, in the discretion of the Employer,
remain invested in the commingled Trust assets or be
transferred to a Segregated Account.
(b) If the vested portion of the Accrued Benefit of a Participant
who terminates employment for reasons other than retirement,
disability or death is less than 100%, so that his
Distribution Date does not coincide with the date on which he
ceases to be an Employee, such Accrued Benefit shall, in the
discretion of the Employer, remain invested in the commingled
assets of the Trust or be transferred to a Segregated Account
pending distribution. The Participant may elect to receive the
vested portion of his Accrued Benefit at any time prior to the
Distribution Date.
(c) If a Participant separates from service before satisfying the
age requirement for early retirement, but has satisfied the
Service requirement, the Participant will be entitled to elect
an early retirement benefit upon satisfaction of such age
requirement.
7.7 FORFEITURE AND SPECIAL VESTING FORMULA.
If the vested portion of the Accrued Benefit of a Participant who
terminates employment for reasons other than retirement, disability or
death, as described in Article VI of the Plan, is less than 100% and
such Participant receives a distribution of the vested portion of his
Accrued Benefit, forfeiture of the nonvested portion of his Accrued
Benefit shall occur (subject to restoration pursuant to Section 2.5 of
the Plan) as of the date on which the distribution is made. If upon
termination of employment, a Participant has no vested interest in his
Accrued Benefit, forfeiture of his entire Accrued Benefit shall occur
(subject to restoration pursuant to Section 2.5 of the Plan) as of the
date of termination of employment. In any other case involving a
termination described in Section 7.5(a), forfeiture of the nonvested
portion of the terminated Participant's Accrued Benefit shall occur as
of the earliest of: (a) his date of death following termination of
employment, or (b) the last day of the Plan Year in which he incurs
5-consecutive 1-year Breaks in Service.
If a Participant terminates Service, and the value of the Participant's
vested account balance derived from Employer and Participant
contributions is not greater than $3,500, the Participant will receive
a distribution of the value of the entire vested portion of such
account balance and the nonvested portion will be treated as a
forfeiture.
For purposes of Section 6.5, if a distribution is made at a time when a
Participant has a nonforfeitable right to less than 100% of the account
balance derived from Employer contributions and the Participant may
increase the nonforfeitable percentage in the
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account, a separate account shall be established for the Participant's
Employer Contributions Accounts as of the time of the distribution, and
at any relevant time the vested portion of the separate account shall
be equal to an amount determined by the formula:
P(AB+(RXD))-(RXD)
For purposes of applying the formula, P is the vested percentage at the
relevant time, AB is the separate account balance at the relevant time,
D is the amount of the distribution, R is the ratio of the separate
account balance at the relevant time to the separate account balance
after distribution, and the relevant time is the Participant's
Distribution Date.
7.8 DISTRIBUTION FROM EMPLOYEE CONTRIBUTIONS ACCOUNTS.
(a) VOLUNTARY EMPLOYEE CONTRIBUTIONS.
A Participant who has made Voluntary Employee Contributions to
the Plan may withdraw such contributions at such times as
permitted by the Employer by submitting a written request to
the Employer specifying the amount to be withdrawn. A
distribution from the Participant's Voluntary Employee
Contributions Account shall be calculated on a pro rata basis;
thus, such distribution shall be considered in part a return
of contributions and in part earnings on such contributions.
However, if on May 5, 1986, Voluntary Employee Contributions
were available for distribution, under the terms of the Plan,
prior to separation of Service, then the pro rata rules will
not apply to Voluntary Employee Contributions made prior to
January 1, 1987. The Participant may designate whether the
distribution is to be made from pre-1987 or post-1986
contributions.
(b) ROLLOVER/TRANSFER ACCOUNTS.
A Participant may withdraw any amount from his
Rollover/Transfer Account, not in excess of the value of his
account, at such times as permitted by the Employer by
submitting a written request to the Employer specifying the
amount to be withdrawn.
Subject to the provisions of this Section 7.8 and Section 6.5(a) of the
Plan, the Participant's Voluntary Employee Contributions Account and
Rollover/Transfer Account shall be payable at the same time, in the
same manner, and, in the event of death, to the same Beneficiary as is
his Elective Deferral and Employer Contributions Accounts.
7.9 DIRECT ROLLOVER.
(a) APPLICABILITY.
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This Section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election
under this Article, a distributee may elect, at the time and
in the manner prescribed by the Plan Administrator, to have
any portion of an eligible rollover distribution paid directly
to an eligible retirement plan specified by the distributee in
a direct rollover.
(b) DEFINITIONS.
(i) 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 distributee and the
distributee's designated Beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to Employer securities).
(ii) ELIGIBLE RETIREMENT PLAN. An eligible retirement plan
is an individual ------------------------- retirement
account described in section 408(a) of the Code, an
individual retirement annuity described in section
408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account
or individual retirement annuity.
(iii) DISTRIBUTEE. A distributed 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
retirement order, as described in section 414(p) of
the Code, are distributees with regard to the
interest of the spouse or former spouse.
(iv) DIRECT ROLLOVER. A direct rollover is a payment by
the plan to the eligible retirement plan specified by
the distributee.
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ARTICLE VIII. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
The provisions of this Article shall take precedence over any
conflicting provisions of the Plan.
8.1 APPLICABILITY.
Except as provided with respect to certain profit sharing plans in
Section 8.6 of this Article, the provisions of this Article shall apply
to any Participant who is credited with at least one Hour of Service
with the Employer on or after August 23, 1984, and such other
Participants as provided in Section 8.7.
8.2 QUALIFIED JOINT SURVIVOR ANNUITY.
Unless an optional form of benefit is selected pursuant to a qualified
election within the 90-day period ending on the annuity starting date,
a married Participant's vested account balance will be paid in the form
of a Qualified Joint and Survivor Annuity and an unmarried
Participant's vested account balance will be paid in the form of a life
annuity. The Participant may elect to have such annuity distributed
upon attainment of the earliest retirement age under the Plan.
8.3 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.
Unless an optional form of benefit has been selected within the
election period pursuant to a qualified election, if a Participant dies
before his annuity starting date, then the Participant's vested account
balance shall be applied toward the purchase of an annuity for the life
of the surviving spouse. The surviving spouse may elect to have such
annuity distributed immediately after the Participant's death.
8.4 DEFINITIONS.
(a) ELECTION PERIOD. The period which begins on the first day of
the Plan Year in which the Participant attains age 35 and ends
on the date of the Participant's death. If a Participant
separates from Service prior to the first day of the Plan Year
in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period
shall begin on the date of separation.
(b) EARLIEST RETIREMENT AGE. The earliest date on which, under the
Plan, the Participant could elect to receive retirement
benefits.
(c) QUALIFIED ELECTION. A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity shall not be
effective unless: (i) the Participant's spouse consents in
writing to the election; (ii)
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the election designates a specific Beneficiary, including any
class of Beneficiaries or any contingent Beneficiaries, which
may not be changed without spousal consent (or the spouse
expressly permits designations by the Participant without any
further spousal consent); (iii) the spouse's consent
acknowledges the effect of the election; and (iv) the spouse's
consent is witnessed by a Plan representative or notary
public. Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective unless the
election designates a form of benefit payment which may not be
changed without spousal consent (or the spouse expressly
permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of
a Plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a qualified
election.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such spouse.
A consent that permits designations by the Participant without
any requirement of further consent by such spouse must
acknowledge that the spouse has the right to limit consent to
a specific Beneficiary, and a specific form of benefit where
applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent
of the spouse at any time before the commencement of benefits.
The number of revocations shall not be limited. No consent
obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 8.5
below.
(d) QUALIFIED JOINT AND SURVIVOR ANNUITY. An immediate annuity for
the life of the Participant with a survivor annuity for the
life of the spouse which is not less than 50% and not more
than 100% of the amount of the annuity which is payable during
the joint lives of the Participant and the spouse and which is
the amount of benefit which can be purchased with the
Participant's vested account balance. The percentage of the
survivor annuity under the Plan shall be 50%.
(e) SPOUSE (SURVIVING SPOUSE). The spouse or surviving spouse of
the Participant, provided that a former spouse will be treated
as the spouse or surviving spouse (and a current spouse will
not be treated as the spouse or surviving spouse to the extent
provided) under a qualified domestic relations order as
described in section 414(p) of the Code.
(f) ANNUITY STARTING DATE. The first day of the first period for
which an amount is paid as an annuity or any other form.
(g) VESTED ACCOUNT BALANCE. The aggregate value of the
Participant's vested account balances derived from Employer
and Employee contributions (including rollovers), whether
vested before or upon death, including the proceeds of
insurance
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contracts, if any, on the Participant's life. The provisions
of this Article shall apply to a Participant who is vested in
amounts attributable to Employer contributions, Employee
contributions or both at the time of death or distribution.
8.5 NOTICE REQUIREMENTS.
(a) In the case of a Qualified Joint and Survivor Annuity as
described in Section 8.4(d) of this Article, the Plan
Administrator shall no less than 30 days and no more than 90
days prior to the annuity starting date provide each
Participant a written explanation of: (i) the terms and
conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of
benefit; (iii) the rights of a Participant's spouse; and (iv)
the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
(b) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 8.3 of this Article, the Plan
Administrator shall provide each Participant within the
applicable notice period a written explanation of the
Qualified Preretirement Survivor Annuity in such terms and in
such manner as would be comparable to the explanation provided
for meeting the requirements of Section 8.5(a) applicable to a
Qualified Joint and Survivor Annuity.
The applicable notice period means with respect to a
Participant, whichever of the following periods ends last:
(i) the period beginning with 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,
(ii) a reasonable period ending after the individual
becomes a Participant,
(iii) a reasonable period ending after notice is required
because of the cessation of a benefit subsidy as
described in subsection (c) below,
(iv) a reasonable period ending after this Article first
applies to the Participant,
(v) a reasonable period after separation from Service in
the case of a Participant who separates before
attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events
described in (ii), (iii) and (iv) is the end of the
two-year period beginning one year prior to the date
the applicable event occurs, and ending one year
after that date. In the case of a Participant who
separates from Service before the Plan Year in which
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age 35 is attained, notice shall be provided within
the two-year period beginning one year prior to
separation and ending one year after separation. If
such a Participant thereafter returns to employment
with the Employer, the applicable period for such
Participant shall be redetermined.
(c) Notwithstanding the other requirements of this Section 8.5,
the respective notices prescribed by this Section need not be
given to a Participant if (i) the Plan "fully subsidizes" the
costs of a Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity and (ii) the Plan does not
allow the Participant to waive the Qualified Joint and
Survivor Annuity or Qualified Preretirement Annuity and does
not allow a married Participant to designate a nonspouse
Beneficiary. For purposes of this Section 8.5(c), a plan fully
subsidizes the costs of a benefit if no increase in cost or
decrease in benefits to the Participant may result from the
Participant's failure to elect another benefit.
(d) If a distribution is one to which sections 401(a)(11) and 417
of the Internal Revenue Code 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 (i) 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 (ii) the
Participant, after receiving the notice, affirmatively elects
a distribution.
8.6 SPECIAL RULE FOR PROFIT SHARING PLANS.
(a) This Section shall apply to a Participant in a profit sharing
plan, and to any distribution, made on or after the first day
of the first Plan Year beginning after December 31, 1988, from
or under a separate account attributable solely to accumulated
deductible Employee Contributions, as defined in section
72(o)(5) of the Code, and maintained on behalf of a
Participant in a money purchase pension plan (including a
target benefit plan) if the following conditions are
satisfied: (i) the Participant cannot or does not elect
payments in the form of a life annuity, and (ii) on the death
of the Participant, the Participant's vested account balance
will be paid to the Participant's surviving spouse, but if
there is no surviving spouse, or, if the surviving spouse has
already consented in a manner conforming to a qualified
election, then to the Participant's designated Beneficiary.
The surviving spouse may elect to have distribution of the
vested account balance commence within the 90-day period
following the date of the Participant's death. The account
balance shall be adjusted for gains or losses occurring after
the Participant's death in accordance with the provisions of
the Plan governing the adjustment of account balances for
other types of distributions. However, this Section 8.6 shall
not be operative with respect to the Participant if it is
determined that this profit sharing plan is a direct or
indirect transferee of a defined benefit plan, money purchase
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pension plan (including a target benefit plan), stock bonus or
profit sharing plan which is subject to the survivor annuity
requirement of sections 401(a)(11) and 417 of the Code. The
preceding sentence shall apply only with respect to asset
transfers completed after December 31, 1984, and if the
transferred assets and income thereon are accounted for
separately, then such sentence shall apply only with respect
to the transferred assets (and income thereon). If this
Section is operative, then except to the extent otherwise
provided in Section 8.7 the other provisions of this Article
shall be inoperative.
(b) The Participant may waive the spousal death benefit described
in this Section at any time provided that no such waiver shall
be effective unless it satisfies the conditions (described in
Section 8.4(c)) that would apply to the Participant's waiver
of the Qualified Preretirement Survivor Annuity.
(c) For purposes of this Section 8.6, vested account balances
shall mean, in the case of a money purchase pension plan or a
target benefit plan, the participant's separate account
balance attributable solely to accumulated deductible Employee
contributions within the meaning of section 72(o)(5)(B) of the
Code. In the case of a profit sharing plan, vested account
balance shall have the same meaning as provided in Section
8.4(g).
8.7 TRANSITIONAL RULES.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous Sections of this Article must be given the
opportunity to elect to have the prior Sections of this
Article apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such
Participant had at least 10 years of vesting Service when he
or she separated from Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance
with Section 8.7(d) of this Article.
(c) The respective opportunities to elect (as described in Section
8.7(a) and 8.7(b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise commence to
said Participants.
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(d) Any Participant who has elected pursuant to Section 8.7(b) of
this Article and any Participant who does not elect under
Section 8.7(a) or who meets the requirements of Section 8.7(a)
except that such Participant does not have at least 10 years
of vesting Service when he or she separates from Service,
shall have his or her benefits distributed in accordance with
all of the following requirements if benefits would have been
payable in the form of a life annuity.
(i) AUTOMATIC JOINT AND SURVIVOR ANNUITY. If benefits in
the form of a life annuity become payable to a
married Participant who:
(1) begins to receive payments under the Plan on
or after Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while
still working for the Employer; or
(3) begins to receive payments on or after the
qualified early retirement age; or
(4) separates from Service on or after attaining
Normal Retirement Age (or the qualified
early retirement age) and after satisfying
the eligibility requirements for the payment
of benefits under the Plan and thereafter
dies before beginning to receive such
benefits; then such benefits will be
received under this Plan in the form of a
Qualified Joint and Survivor Annuity, unless
the Participant has elected otherwise during
the election period. The election period
must begin at least 6 months before the
Participant attains qualified early
retirement age and end not more than 90 days
before the commencement of benefits. Any
election hereunder will be in writing and
may be changed by the Participant at any
time.
(ii) ELECTION OR EARLY SURVIVOR ANNUITY. A Participant who
is employed after -----------------------------------
attaining the qualified early retirement age will be
given the opportunity to elect, during the election
period, to have a survivor annuity payable on death.
If the Participant elects the survivor annuity,
payments under such annuity must not be less than the
payments which would have been made to the spouse
under the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her
death. Any election under this provision will be in
writing and may be changed by the Participant at any
time. The election period begins on the later of (1)
the 90th day before the Participant attains the
qualified early retirement age, or (2) the date on
which Participation begins, and ends on the date the
Participant terminates employment.
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(iii) DEFINITIONS. For purposes of this Section 8.7(d) of
the Plan, ------------
(1) Qualified early retirement age is the latest
of:
(a) the earliest date, under the Plan,
on which the Participant may elect
to receive retirement benefits,
(b) first day of the 120th month
beginning before the Participant
reaches Normal Retirement Age, or
(c) the date the Participant begins
participation.
(2) Qualified Joint and Survivor Annuity is an
annuity for the life of the Participant with
a survivor annuity for the life of the
spouse as described in Section 8.4 of this
Article.
ARTICLE IX. BENEFICIARY AND PARTICIPANT INFORMATION
9.1 DESIGNATION OF BENEFICIARY.
Each Participant from time to time may designate any person or persons
(who may be named contingently or successively) to receive any benefits
payable under the Plan upon or after his death, and any such
designation may be changed from time to time by the Participant by
filing a new designation. Each designation will revoke all prior
designations made by the Participant, shall be in writing in the form
prescribed by the Employer and shall be effective only when the written
designation is filed with the Employer during his lifetime.
In the absence of a valid Beneficiary designation (except in
conjunction with the election of a form of benefit payment which does
not require the designation of a specific Beneficiary) or if, at the
time any benefit becomes payable to a Beneficiary, there is no living
Beneficiary so designated by the Participant to receive the benefit,
the Employer shall direct the Trustee to distribute such benefit to the
Participant's spouse, if then living. If there is no surviving spouse,
then the benefit shall be paid to the Participant's then living
descendants, if any, per stirpes, otherwise to the Participant's then
living parents or parents, equally, otherwise to the Participant's
estate.
9.2 INFORMATION TO BE FURNISHED BY PARTICIPANT AND BENEFICIARIES.
Any communications, addressed to a Participant or Beneficiary at his
last post office address filed with the Employer, shall be binding on
the Participant or Beneficiary for all purposes of the Plan. Except for
the Employer's sending of a registered letter to the last known
address, neither the Trustees nor the Employer shall be obliged to
search for any Participant or Beneficiary.
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If a benefit is forfeited because the Participant or Beneficiary cannot
be found, such benefit will be reinstated if a claim is made by the
Participant or Beneficiary.
ARTICLE X. LOANS TO PARTICIPANTS
To the extent provided in the Adoption Agreement, and subject to the
consent of the Trustee, the Plan Administrator shall establish a loan
program under which:
(1) Loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis.
(2) Loans shall not be made available to Highly Compensated
Employees (as defined in section 414(q) of the Code) in an
amount greater than the amount made available to other
Employees.
(3) Loans must be adequately secured and bear a reasonable
interest rate.
(4) No Participant loan shall exceed 50% of the present value of
the Participant's vested Accrued Benefit if T. Rowe Price
Trust Company is the Trustee. If T. Rowe Price Trust Company
is not the Trustee, no Participant loan shall exceed the
present value of the Participant's vested Accrued Benefit.
(5) A Participant must obtain the consent of his or her spouse, if
any, to use of the account balance as security for the loan.
Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which
the loan is to be so secured. The consent must be in writing,
must acknowledge the effect of the loan and must be witnessed
by a plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting spouse or
any subsequent spouse with respect to that loan. A new consent
shall be required if the account balance is used for
renegotiation, extension, renewal or other revision of the
loan.
(6) In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan.
(7) No loans will be made to any shareholder-Employee or
Owner-Employee. For purposes of this requirement, a
shareholder-Employee means an Employee or officer of an
electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of section
318(a)(1) of the Code), on any day during the taxable year of
such corporation, more than 5% of the outstanding stock of the
corporation.
If a valid spousal consent has been obtained in accordance
with (5), then, notwithstanding any other provision of this
Plan, the portion of the Participant's
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vested account balance used as a security interest held by the
Plan by reason of a loan outstanding to the Participant shall
be taken into account for purposes of determining the amount
of the account balance payable at the time of death or
distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's vested
account balance (determined without regard to the preceding
sentence) is payable to the surviving spouse, then the account
balance shall be adjusted by first reducing the vested account
balance by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the
surviving spouse.
No loan to any Participant or Beneficiary can be made to the
extent that such loan when added to the outstanding balance of
all other loans to the Participant or Beneficiary would exceed
the lesser of (a) $50,000 reduced by the excess (if any) of
the highest outstanding balance of loans during the one year
period ending on the day before the loan is made, over the
outstanding balance of loans from the Plan on the date the
loan is made, or (b) one-half the present value of the
nonforfeitable Accrued Benefit of the Participant. For the
purpose of the above limitation, all loans from all plans of
the Employer and other members of a group of Employers
described in section 414(b), (c), (m) and (o) of the Code are
aggregated. Furthermore, any loan shall by its terms require
that repayment (principal and interest) be amortized in level
payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan,
unless such loan is used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is
made) will be used as the principal residence of the
Participant. An assignment or pledge of any portion of the
Participant's interest in the Plan and a loan, pledge or
assignment with respect to any insurance contract purchased
under the Plan, will be treated as a loan under this
paragraph.
ARTICLE XI. TOP HEAVY PROVISIONS
11.1 APPLICABILITY.
Notwithstanding any other provisions of the Plan or Adoption Agreement
to the contrary, if for any Plan Year the Plan becomes a Top Heavy
Plan, the requirements of this Article XI of the Plan shall be applied
for such Plan Year.
11.2 DEFINITIONS.
The following terms shall have the following meanings in the
determination of whether or not the Plan is a Top Heavy Plan:
(a) DETERMINATION DATE. For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the last day of that year.
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(b) EMPLOYER. The Employer who adopted this Plan and any other
Employer some or all of whose Employees participate in this
Plan or in a retirement plan which is aggregated with this
Plan as part of a permissive or required aggregation group.
(c) EMPLOYER GROUP. A group of Employers who, for purposes of
section 416 of the Code, are treated as a single Employer
under section 414(b), (c) or (m) of the Code.
(d) KEY EMPLOYEE. Any Employee or former Employee (and the
Beneficiaries of such ------------- Employee) who, at any time
during the determination period, was an officer of the
Employer if such individual's annual Compensation exceeds 50%
of the dollar limitation under section 415(b)(1)(A) of the
Code, an owner (or considered an owner under section 318 of
the Code) of one of the ten largest interests in the Employer
if such individual's Compensation exceeds 100% of the dollar
limitation under section 415(c)(1)(A) of the Code, a 5-percent
owner of the Employer, or a l-percent owner of the Employer
who has annual Compensation of more than $150,000. Annual
Compensation means Compensation as defined in section
415(c)(3) of the Code, but including amounts contributed by
the Employer pursuant to a salary reduction agreement which
are excludible from the Employee's gross income under section
125, 402(e)(3), 402(h) or 403(b) of the Code. The
determination period is the Plan Year containing the
Determination Date and the 4 preceding Plan Years.
The determination of who is a Key Employee will be made in
accordance with section 416(i)(1) of the Code and the
regulations thereunder.
(e) NON-KEY EMPLOYEE. Any Employee or former Employee (or
Beneficiaries of such Employee) who is not considered to be a
Key Employee.
(f) PERMISSIVE AGGREGATION GROUP. The required aggregation group
of plans plus any other plan or plans of the Employer which,
when considered as a group with the required aggregation
group, would continue to satisfy the requirements of sections
401(a)(4) and 410 of the Code.
(g) PRESENT VALUE. Present value shall be based only on the
interest and mortality rates specified in the Adoption
Agreement.
(h) REQUIRED AGGREGATION GROUP. (i) Each qualified plan of the
Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the plan has terminated), and (ii) any
other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of section 401(a)(4)
or 410 of the Code.
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(i) TOP HEAVY PLAN. For any Plan Year beginning after December 31,
1983, this Plan is Top Heavy if any of the following
conditions exist:
(i) If the Top Heavy Ratio for this Plan exceeds 60% and
this Plan is not pan of any required aggregation
group or permissive aggregation group of plans.
(ii) If this Plan is a pan of a required aggregation group
of plans but not part of a permissive aggregation
group and the Top Heavy Ratio for the group of plans
exceeds 60%.
(iii) If this Plan is a part of a required aggregation
group and part of a permissive aggregation group of
plans and the Top Heavy Ratio for the permissive
aggregation group exceeds 60%.
(j) TOP HEAVY RATIO.
(i) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan) and the Employer has not maintained any
defined benefit plan which during the 5-year period
ending on the determination date(s) has or has had
Accrued Benefits, the Top Heavy Ratio for this Plan
alone or for the required or permissible aggregation
group as appropriate is a fraction, the numerator of
which is the sum of the account balances of all Key
Employees as of the determination date(s) (including
any part of any account balance distributed in the
5-year period ending on the determination date(s)),
and the denominator of which is the sum of all
account balances (including any part of any account
balance distributed in the 5-year period ending on
the determination date(s)), both computed in
accordance with section 416 of the Code and the
regulations thereunder. Both the numerator and
denominator of the Top Heavy Ratio are increased to
reflect any contribution not actually made as of the
determination date, but which is required to be taken
into account on that date under section 416 of the
Code and the regulations thereunder.
(ii) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan) and the Employer maintains or has
maintained one or more defined benefit plans which
during the 5-year period ending on the determination
date(s) has or has had any Accrued Benefits, the Top
Heavy Ratio for any required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances
under the aggregated defined contribution plan or
plans for all Key Employees, determined in accordance
with (a) above, and the present value of Accrued
Benefits under the aggregated defined
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benefit plan or plans for all Key Employees as of the
determination date(s), and the denominator of which
is the sum of the account balances under the
aggregated defined contribution plan or plans for all
Participants, determined in accordance with (a)
above, and the present value of Accrued Benefits
under the defined benefit plan or plans for all
Participants as of the determination date(s), all
determined in accordance with section 416 of the Code
and the regulations thereunder. The Accrued Benefits
under a defined benefit plan in both the numerator
and denominator of the Top Heavy Ratio are increased
for any distribution of an Accrued Benefit made in
the five-year period ending on the determination
date.
(iii) For purposes of (i) and (ii) above, the value of
account balances and the present value of Accrued
Benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12
month period ending on the determination date, except
as provided in section 416 of the Code and the
regulations thereunder for the first and second Plan
Years of a defined benefit plan. The account balances
and Accrued Benefits of a Participant (1) who is not
a Key Employee but who was a Key Employee in a prior
year, or (2) who has not been credited with at least
one Hour of Service with any Employer maintaining the
Plan at any time during the 5-year period ending on
the determination date will be disregarded. The
calculation of the Top Heavy Ratio, and the extent to
which distributions, rollovers, nondeductible
Employee contributions and transfers are taken into
account will be made in accordance with section
416(g) of the Code and the regulations thereunder.
When aggregating plans, the value of account balances
and Accrued Benefits will be calculated with
reference to the determination dates that fall within
the same calendar year.
The Accrued Benefit of a Participant other than a Key
Employee shall be determined under (1) the method, if
any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the
Employer, or (2) if there is no such method, as if
such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional
rule of section 411(b)(1)(C) of the Code.
(k) VALUATION DATE. The date elected by the Employer in Section
15(e) of the Adoption Agreement as of which account balances
or Accrued Benefits are valued for purposes of calculating the
Top Heavy Ratio.
11.3 MINIMUM COMPENSATION.
For any Plan Year in which the Plan is Top Heavy, only the first
$200,000 (or such larger amount as may be prescribed by the Secretary
of Treasury or his delegate) of a
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Participant's annual Compensation shall be taken into account for
purposes of determining Employer contributions under the Plan.
11.4 MINIMUM ALLOCATION.
(a) Except as otherwise provided in (c) and (d) below, the
Employer contributions and forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less
than the lesser of three percent of such Participant's
Compensation or in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy section 401
of the Code, the largest percentage of Employer contributions
(including any salary deferral contribution) and forfeitures,
as a percentage of the first $200,000 of the Key Employee's
Compensation, allocated on behalf of any Key Employee for that
year. The minimum allocation is determined without regard to
any Social Security contribution. This minimum allocation
shall be made even though, under other plan provisions, the
Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the
year because of (i) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in the
Plan), (ii) the Participant's failure to make mandatory
Employee contributions (including elective deferral
contributions) to the Plan, or (iii) Compensation less than a
stated amount. Neither Elective Deferrals nor Matching
Contributions may be taken into account for the purpose of
satisfying the minimum Top Heavy contribution requirements.
(b) For purposes of computing the minimum allocation, Compensation
will mean Compensation as defined in Section 1.9 of the Plan.
(c) The provision in (a) above shall not apply to any Participant
who was not employed by the Employer on the last day of the
Plan Year.
(d) The provision in (a) above shall not apply to any Participant
to the extent the Participant is covered under any other plan
or plans of the Employer and the Employer has provided in
Section 15 of the Adoption Agreement that the minimum
allocation or benefit requirement applicable to Top Heavy
plans will be met in the other plan or plans.
(e) The minimum allocation or benefit requirement applicable to
Top Heavy plans (to the extent required to be nonforfeitable
under section 416(b) of the Code) may not be forfeited under
section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
If Employees are covered under both a Top Heavy defined benefit plan
and defined contribution plan of the Employer, the denominators of the
defined benefit and defined contribution fractions (as described in
Section 5.4 of the Plan) shall be computed by substituting a factor of
1.0 for 1.25.
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However, if the Top Heavy Ratio (as described in Section 11.2 of this
Article) does not exceed 90%, the Employer may use a factor of 1.25 in
the fractions provided one of the following is used to satisfy the
minimum contribution requirements:
(i) a minimum benefit of 3% per Year of Service (up to
30%) is provided in the defined benefit plan;
(ii) a minimum contribution of 7 1/2% is provided in the
defined contribution plan; or
(iii) a minimum contribution of 4% is provided in the
defined contribution plan and a minimum benefit of 3%
per Year of Service (up to 30%) is provided in the
defined benefit plan.
In the event that the Top Heavy Ratio exceeds 90%, a factor of
1.0 shall always be applied when computing the defined benefit
and defined contribution fractions.
11.5 VESTING.
For any Plan Year in which this Plan is Top Heavy, one of the minimum
vesting schedules as elected by the Employer in the Adoption Agreement
will automatically apply to the Plan. The minimum vesting schedule
applies to all benefits within the meaning of section 411(a)(7) of the
Code except those attributable to Employee contributions, including
benefits accrued before the Effective Date of section 416 of the Code
and benefits accrued before the Plan became Top Heavy. Further, no
decrease in a Participant's nonforfeitable percentage may occur in the
event the Plan's status as Top Heavy changes for any Plan Year.
However, this Section does not apply to the account balances of any
Employee who does not have an Hour of Service after the Plan has
initially become Top Heavy and such Employee's account balance
attributable to Employer contributions and forfeitures will be
determined without regard to this Section.
ARTICLE XII. ADMINISTRATION OF THE PLAN
12.1 DUTIES AND RESPONSIBILITY OF FIDUCIARIES: ALLOCATION OF FIDUCIARY
RESPONSIBILITY.
A fiduciary to the Plan shall have only those specific powers, duties,
responsibilities and obligations as are explicitly given him under the
Plan and Trust Agreement. In general, the Employer shall have the sole
responsibility for making contributions to the Plan required under
Article III of the Plan, appointing the Trustee and the Plan
Administrator, and determining the funds available for investment under
the Plan. The Plan Administrator shall have the sole responsibility for
the administration of the Plan, as more fully described in Section
12.2. It is intended that each fiduciary shall be responsible only for
the proper exercise of his own powers, duties, responsibilities and
obligations under the Plan and Trust Agreement, and shall not be
responsible for any act or failure to act of
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another fiduciary. A fiduciary may serve in more than one fiduciary
capacity with respect to the Plan.
12.2 POWERS AND RESPONSIBILITIES OF THE PLAN ADMINISTRATOR.
(a) ADMINISTRATION OF THE PLAN. The Plan Administrator shall have
all powers --------------------------- necessary to administer
the Plan, including the power to construe and interpret the
Plan documents; to decide all questions relating to an
individual's eligibility to participate in the Plan; to
determine the amount, manner and timing of any distribution of
benefits or withdrawal under the Plan; to approve and insure
the repayment of any loan to a Participant under the Plan; to
resolve any claim for benefits in accordance with Section
12.7; and to appoint or employ advisors, including legal
counsel, to render advice with respect to any of the Plan
Administrator's responsibilities under the Plan. Any
construction interpretation or application of the Plan by the
Plan Administrator shall be final, conclusive and binding. All
actions by the Plan Administrator shall be taken pursuant to
uniform standards applied to all persons similarly situated.
The Plan Administrator shall have no power to add to, subtract
from or modify any of the terms of the Plan, or to change or
add to any benefits provided by the Plan, or to waive or fail
to apply any requirements of eligibility for a benefit under
the Plan.
(b) RECORDS AND REPORTS. The Plan Administrator shall be
responsible for maintaining -------------------- sufficient
records to reflect the Eligibility Computation Periods in
which an Employee is credited with one or more Years of
Service for purposes of determining his eligibility to
participate in the Plan, and the Compensation of each
Participant for purposes of determining the amount of
contributions that may be made by or on behalf of the
Participant under the Plan. The Plan Administrator shall be
responsible for submitting all required reports and
notifications relating to the Plan to Participants or their
Beneficiaries, the Internal Revenue Service and the Department
of Labor.
(c) FURNISHING TRUSTEE WITH INSTRUCTIONS. The Plan Administrator
shall be responsible for furnishing the Trustee with written
instructions regarding all contributions to the Trust, all
distributions to Participants and all loans to Participants.
In addition, the Plan Administrator shall be responsible for
furnishing the Trustee with any further information respecting
the Plan which the Trustee may request for the performance of
its duties or for the purpose of making any returns to the
Internal Revenue Service or Department of Labor as may be
required of the Trustee.
(d) RULES AND DECISIONS. The Plan Administrator may adopt such
rules as it deems necessary, desirable or appropriate in the
administration of the Plan. All rules and decisions of the
Plan Administrator shall be applied uniformly and consistently
to all Participants in similar circumstances. When making a
determination or calculation, the Plan Administrator shall be
entitled to rely upon information
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furnished by a Participant or Beneficiary, the Employer, the
legal counsel of the Employer or the Trustee.
(e) APPLICATION AND FORMS FOR BENEFITS. The Plan Administrator may
require a Participant or Beneficiary to complete and file with
it an application for a benefit, and to furnish all pertinent
information requested by it. The Plan Administrator may rely
upon all such information so furnished to it, including the
Participant's or Beneficiary's current mailing address.
12.3 ALLOCATION OF DUTIES AND RESPONSIBILITIES.
The Plan Administrator may by written instrument allocate among its
members or Employees any of its duties and responsibilities not already
allocated under the Plan or may designate persons other than members or
Employees to carry out any of the Plan Administrator's duties and
responsibilities under the Plan. Any such duties or responsibilities
thus allocated must be described in the written instrument. If a person
other than an Employee of the Employer is so designated, such person
must acknowledge in writing his acceptance of the duties and
responsibilities allocated to him.
12.4 APPOINTMENT OF THE PLAN ADMINISTRATOR.
The Employer shall designate in the Adoption Agreement the Plan
Administrator who shall administer the Employer's Plan. Such Plan
Administrator may consist of an individual, a committee of two or more
individuals, whether or not, in either such case, the individual or any
of such individuals are Employees of the Employer, a consulting firm or
other independent agent, the Trustee (with its consent) or the Employer
itself. Except as the Employer shall otherwise expressly determine, the
Plan Administrator shall be charged with the full power and the
responsibility for administering the Plan in all its details. If no
Plan Administrator has been appointed by the Employer, or if the person
designated as Plan Administrator by the Employer is not serving as such
for any reason, the Employer shall be deemed to be the Plan
Administrator of the Plan. The Plan Administrator may be removed by the
Employer, or may resign by giving notice in writing to the Employer,
and in the event of the removal, resignation or death, or other
termination of Service by the Plan Administrator, the Employer shall,
as soon as practicable, appoint a successor Plan Administrator, such
successor thereafter to have all of the rights, privileges, duties and
obligations of the predecessor Plan Administrator.
12.5 EXPENSES.
The Employer shall pay all expenses authorized and incurred by the Plan
in the administration of the Plan (including Trustee's fees) except to
the extent such expenses are paid from the Trust.
12.6 LIABILITIES.
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The Plan Administrator and each person to whom duties and
responsibilities have been allocated pursuant to Section 12.3 may be
indemnified and held harmless by the Employer with respect to any
alleged breach of responsibilities performed or to be performed
hereunder. The Employer and each Affiliated Employer shall indemnify
and hold harmless the Sponsor against all claims, liabilities, fines
and penalties and all expenses reasonably incurred by or imposed upon
him (including, but not limited to, reasonable attorney's fees) which
arise as a result of actions or failure to act in connection with the
operation and administration of the Plan.
12.7 CLAIMS PROCEDURE.
(a) FILING A CLAIM.
Any Participant or Beneficiary under the Plan may file a
written claim for a Plan benefit with the Plan Administrator
or with a person named by the Plan Administrator to receive
claims under the Plan.
(b) NOTICE OF DENIAL OF CLAIM.
In the event of a denial or limitation of any benefit or
payment due to or requested by any Participant or Beneficiary
under the Plan ("claimant"), claimant shall be given a written
notification containing specific reasons for the denial or
limitation of his benefit. The written notification shall
contain specific reference to the pertinent Plan provisions on
which the denial or limitation of his benefit is based. In
addition, it shall contain a description of any other material
or information necessary for the claimant to perfect a claim,
and an explanation of why such material or information is
necessary. The notification shall further provide appropriate
information as to the steps to be taken if the claimant wishes
to submit his claim for review. This written notification
shall be given to a claimant within 90 days after receipt of
his claim by the Plan Administrator unless special
circumstances require an extension of time for processing the
claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished
to the claimant prior to the termination of said 90-day
period, and such notice shall indicate the special
circumstances which make the postponement appropriate.
(c) RIGHT OF REVIEW.
In the event of a denial or limitation of his benefit, the
claimant or his duly authorized representative shall be
permitted to review pertinent documents and to submit to the
Plan Administrator issues and comments in writing. In
addition, the claimant or his duly authorized representative
may make a written request for a full and fair review of his
claim and its denial by the Plan Administrator; provided,
however, that such written request must be received by the
Plan
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Administrator (or its delegate to receive such requests)
within 60 days after receipt by the claimant of written
notification of the denial or limitation of the claim. The
60-day requirement may be waived by the Plan Administrator in
appropriate cases.
(d) DECISION ON REVIEW.
A decision shall be rendered by the Plan Administrator within
60 days after the receipt of the request for review, provided
that where special circumstances require an extension of time
for processing the decision, it may be postponed on written
notice to the claimant (prior to the expiration of the initial
60-day period) for an additional 60 days after the receipt of
such request for review. Any decision by the Plan
Administrator shall be furnished to the claimant in writing
and shall set forth the specific reasons for the decision and
the specific Plan provisions on which the decision is based.
(e) COURT ACTION.
No Participant or Beneficiary shall have the right to seek
judicial review of a denial of benefits, or to bring any
action in any court to enforce a claim for benefits prior to
filing a claim for benefits or exhausting his rights to review
under this Section 12.7.
ARTICLE XIII. AMENDMENT, TERMINATION AND MERGER
13.1 AMENDMENTS.
(a) The Employer expressly recognizes the authority of the Sponsor
to amend this Plan and Trust from time to time, except with
respect to elections of the Employer in the Adoption
Agreement, and the Employer shall be deemed to have consented
to any such amendment. The Employer shall receive a written
instrument indicating the amendment of the Plan and Trust and
such amendment shall become effective as of the Effective Date
of such instrument. No such amendment shall in any way impair,
reduce or affect any Participant's vested and nonforfeitable
rights in the Trust.
(b) The Employer may (i) change the choice of options in the
Adoption Agreement, (ii) add overriding language in the
Adoption Agreement when such language is necessary to satisfy
section 415 or 416 of the Code because of the required
aggregation of multiple plans, and (iii) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the
Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of
the minimum funding requirement under section 412(d) of the
Code, will no longer participate in this
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master or prototype plan and will be considered to have an
individually designed plan.
The sponsoring organization may amend any part of the Plan. In
the case of a mass submitter plan, the mass submitter shall
amend the plan on behalf of the sponsoring organization. If
the sponsoring organization does not adopt the amendment made
by the mass submitter, it will no longer be identical to or a
minor modifier of the mass submitter plan.
(c) No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's Accrued
Benefit. Notwithstanding the preceding sentence, a
Participant's account balance may be reduced to the extent
permitted under section 412(c)(8) of the Code. For purposes of
this paragraph, a plan amendment which has the effect of
decreasing a Participant's account balance or eliminating an
optional form of benefit, with respect to benefits
attributable to Service before the amendment shall be treated
as reducing an Accrued Benefit. Furthermore, if the vesting
schedule of a plan is amended, in the case of an Employee who
is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's
right to his Employer-derived Accrued Benefit will not be less
than his percentage computed under the Plan without regard to
such amendment.
13.2 PLAN TERMINATION: DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS.
(a) The Employer may terminate the Plan at any time in whole or in
part. In the event of the dissolution, merger, consolidation
or reorganization of the Employer, the Plan shall
automatically terminate and the Trust shall be liquidated as
provided in paragraph (b) below unless the Plan is continued
by a successor Employer in accordance with Section 13.3.
(b) Upon the complete or partial termination of the Plan or the
complete discontinuance of Employer contributions under the
Plan, the Accrued Benefit of all Participants affected thereby
shall become fully vested and nonforfeitable, and the Plan
Administrator shall direct the Trustee to distribute assets
remaining in the Trust, after payment of any expenses properly
chargeable thereto, to Participants or their Beneficiaries.
The sponsoring organization may amend any part of the Plan.
For purposes of sponsoring organization amendment, the mass
submitter shall be recognized as the agent of the sponsoring
organization. If the sponsoring organization does not adopt
the amendment made by the mass submitter, it will no longer be
identical to or a minor modifier of the mass submitter plan.
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13.3 SUCCESSOR EMPLOYER.
In the event of the dissolution, merger, consolidation or
reorganization of the Employer, provision may be made by which the Plan
and Trust shall be continued by the successor Employer, in which case
such successor Employer shall be substituted for the Employer under the
Plan. The substitution of the successor Employer shall constitute an
assumption of Plan liabilities by the successor Employer, and the
successor Employer shall have all powers, duties and responsibilities
of the Employer under the Plan.
13.4 MERGER, CONSOLIDATION OR TRANSFER.
In the event of a merger or consolidation of the Plan with, or transfer
of assets or liabilities of the Plan to, any other plan of deferred
compensation maintained or to be established for the benefit of all or
some of the Participants of the Plan, the transaction shall be
structured so that each Participant would (if the Plan then terminated)
receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit the Participant
would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated).
ARTICLE XIV. MISCELLANEOUS PROVISIONS
14.1 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES.
(a) All assets of the Trust shall be retained for the exclusive
benefit of Participants and their Beneficiaries, and shall be
used only to pay benefits to such persons or to pay reasonable
fees and expenses of the Trust and of the administration of
the Plan. The assets of the Trust shall not revert to the
benefit of the Employer, except as otherwise specifically
provided in Section 14.1(b).
(b) Contributions to the Trust under this Plan are subject to the
following conditions:
(i) If a contribution or any part thereof is made to the
Trust by the Employer under a mistake of fact, such
contribution or part thereof shall be returned to the
Employer within one year after the date the
contribution is made;
(ii) In the event that the Commissioner of Internal
Revenue determines that the Plan is not initially
qualified under the Internal Revenue Code, any
contribution made incident to that initial
qualification by the Employer must be returned to the
Employer within one year after the date the initial
qualification is denied, but only if the application
for the qualification is made by the time prescribed
by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may
prescribe; and
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(iii) Contributions to the Trust are specifically
conditioned on their deductibility under the Code
and, to the extent a deduction is disallowed for any
such contribution, such amount shall be returned to
the Employer within one year after the date of the
disallowance of the deduction.
14.2 NONGUARANTEE OF EMPLOYMENT.
Nothing contained in this Plan shall be construed as a contract of
employment between the Employer and any Employee, or as a right of any
Employee to be continued in the employment of the Employer, or as a
limitation of the right of the Employer to discharge any of its
Employees, with or without cause.
14.3 RIGHTS TO TRUST ASSETS.
No Employee, Participant or Beneficiary shall have any right to, or
interest in, any assets of the Trust upon termination of employment or
otherwise, except as provided under the Plan. All payments of benefits
under the Plan shall be made solely out of the assets of the Trust.
14.4 NONALIENATION OF BENEFITS.
Except as provided under Article X of the Plan, with respect to Plan
loans, benefits payable under the Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind,
voluntary or involuntary; provided, however, that the Trustee shall not
be hereby precluded from complying with a qualified domestic relations
order described in section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985, requiring deduction
from distributions to a recipient in pay status for alimony or support
payments. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to benefits
payable hereunder shall be void. The Trust shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to benefits hereunder.
14.5 GENDER.
The use of the masculine pronoun shall extend to and include the
feminine gender wherever appropriate, the use of the singular shall
include the plural and the use of the plural shall include the singular
wherever appropriate.
14.6 TITLES AND HEADINGS.
The titles or headings of the respective Articles and Sections are
inserted merely for convenience and shall be given no legal effect.
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14.7 FAILURE OF EMPLOYER'S PLAN TO QUALIFY.
If the Employer's Plan fails to attain or retain qualification, such
Plan will no longer participate in this Prototype Plan and will be
considered an individually designed plan.
14.8 COMPLIANCE WITH LAWS, RULES AND REGULATIONS.
If any of the provisions of this Plan or of the Trust Agreement are at
any time in any way inconsistent with any laws of the United States of
America or the laws of any state if not preempted by ERISA, or any
regulations of the Internal Revenue Service, U.S. Department of Labor,
or any other Federal or state regulatory authority, in a manner that
adversely affects the qualified status of the Plan under section 401(a)
of the Code or the tax-exempt status of the Trust under section 501(a)
of the Code, or may result in any civil penalties under ERISA or any
other law, then the Employer, the Administrator and the Trustee shall
comply with the requirements of such laws or regulations, rather than
with the provisions of the Plan and Trust which are inconsistent
therewith. The Employer, Administrator and Trustee shall incur no
liability for following such laws, rules or regulations.
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401(K) RETIREMENT PLAN
TRUST AGREEMENT
The Employer has established a Plan to provide retirement, death and
disability benefits for eligible Employees and their Beneficiaries
pursuant to section 401 of the Internal Revenue Code of 1986, as
amended. As part of the Plan, the Employer has requested such person or
persons (individual, corporate or other entity), as may be designated
in the Adoption Agreement, to serve as Trustee pursuant to the Trust
established for the investment of contributions under the Plan upon the
terms and conditions set forth in this Agreement.
Unless the context of this Trust Agreement clearly indicates otherwise,
the terms defined in Article I of the Plan entered into by the
Employer, of which this Trust Agreement forms a part, shall, when used
herein, have the same meaning as in said Plan.
ARTICLE I.
ACCOUNTS
1.1 ESTABLISHING ACCOUNTS.
The Trustee shall open and maintain a trust account for the Plan and,
as part thereof, Participant's accounts for such individuals as the
Administrator shall, from time to time, give written notice to the
Trustee as being Participants in the Plan. The Trustee shall also open
and maintain such other accounts as may be appropriate or desirable to
aid in the administration of the Plan. A separate account shall be
maintained for each Participant and shall be credited with the
contributions made and any forfeitures allocated to each such
Participant pursuant to the Plan (and all earnings thereon). The
Trustee shall open and maintain as a part of the Trust a separate
account for each Participant who makes required or voluntary
contributions, each such account to be credited with the Participant's
required or voluntary contributions (and all earnings attributable to
such contributions).
1.2 CHARGES AGAINST ACCOUNTS.
Upon receipt of written instructions from the Administrator, the
Trustee shall charge the appropriate account of the Participant for any
withdrawals or distributions made under the Plan and any forfeiture of
unvested interests attributable to Employer contributions which may be
required under the Plan. The Administrator will give written
instructions to the Trustee specifying the manner in which Employer
contributions and any forfeiture of the nonvested portion of accounts,
as allocated by the Administrator in accordance with the provisions of
the Plan, are to be credited to the various accounts maintained for
Participants.
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1.3 PROSPECTUS TO BE PROVIDED.
The Administrator shall ensure that a Participant who makes a required
or voluntary contribution has previously received or receives a copy of
the then current prospectus relating to the Investment Options.
Delivery of such a required or voluntary contribution, pursuant to the
provisions of the Plan by the Administrator to the Trustee, shall
entitle the Trustee to assume that the Participant has received such a
prospectus.
ARTICLE II.
RECEIPT OF CONTRIBUTIONS
The Trustee shall accept and hold in the trust contributions made by
the Employer and Participants under the Plan. The Administrator shall
give written instructions to the Trustee specifying the specific
Participants' accounts to which contributions are to be credited, the
amount of each such credit which is attributable to Employer
contributions and the amount, if any, which is attributable to the
Participants required or voluntary contributions. If written
instructions are not received by the Trustee, or if such instructions
are received but are deemed by the Trustee to be unclear, upon notice
to the Employer, the Trustee may elect to hold all or part of any such
contribution in cash, without liability for rising security prices or
distributions made, pending receipt by it from the Administrator of
written instructions or other clarification. If any contributions or
earnings are less than any minimum which the then current prospectus
for the Investment Options require, the Trustee may hold the specified
portion of contribution or earnings in cash, without interest, until
such time as the proper amount has been contributed or earned so that
the investment in the Investment Options required under the Plan may be
made.
ARTICLE III.
INVESTMENT POWERS OF THE TRUSTEE
3.1 INVESTMENT OF TRUST ASSETS.
The Trustee shall invest the amount of each contribution made hereunder
and all earnings thereon in full and fractional shares of the
Investment Options in accordance with the current prospectus for such
Investment Option, in such amounts and proportions as shall from time
to time be designated by the Administrator, or the Participant if the
Plan so permits, on forms provided by T. Rowe Price Associates, Inc. or
a subsidiary thereof, and shall credit such Investment Options to the
accounts of each Participant on whose behalf or by whom the
contributions are made and any forfeitures are allocated. All dividends
and capital gain distributions received on the Investment Options held
by the Trustee in each account, shall, if received in cash, be
reinvested in such Investment Options in accordance with the current
prospectus for such Investment Option and shall in any event be
credited to such account. The Trustee shall deliver, or cause to be
executed and
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delivered, to the Administrator all notices, prospectuses, financial
statements, proxies and proxy soliciting materials relating to the
Investment Options held hereunder. The Trustee shall not vote any of
the shares of the Investment Options held hereunder, except in
accordance with the written instructions of the Administrator. If no
such written instructions are received, such shares shall not be voted.
The obligations of the Trustee hereunder may be delegated by it as
provided in Sections 9.1 and 9.2 hereof.
The Trustee shall sell shares and purchase shares in the Investment
Options to accomplish any change in investments desired by the Employer
as indicated on any amended Plan or other instruction in accordance
with the terms of the Plan.
3.2 DIRECTED INVESTMENTS.
With respect to any directions received by the Trustee with regard to
the investment of Employer and Participant contributions, designating
the investments to be made in the Investment Options by Participants,
the Trustee is authorized and empowered to make and deal with such
investments as provided in such direction and shall have in connection
with such investments all powers herein provided.
3.3 GENERAL INVESTMENT POWERS.
To the extent that the Trustee is not given appropriate directions with
respect to investments, then, the Trustee shall be authorized and
empowered to invest and reinvest all of the funds in any of the
Investment Options which, in the opinion of the Trustee, offers
reasonable possibilities for preservation of capital.
3.4 OTHER POWERS OF THE TRUSTEE.
The Trustee is authorized and empowered with respect to the Trust:
(a) subject to the requirement of investment in shares of the
Investment Options, the Trustee may sell, exchange, convey,
transfer or otherwise dispose of, either at public or private
sale, any property, any time held by it, for such
consideration and on such terms and conditions as to credit or
otherwise as the Trustee may deem best;
(b) subject to the provisions of Section 3.1 hereof to vote in
person or by proxy any shares of the Investment Options held
by it and to join in, or to dissent from, and to oppose, the
reorganization, consolidation, liquidation, sale or merger of
corporation or properties in which it may be interested as
Trustee, upon such terms and conditions as it may deem wise;
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(c) to make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out
the powers herein granted;
(d) to register any investment held in the Trust in its own name,
in the name of the Trust or in the name of a nominee, and to
hold any investment in bearer form, but the books and records
of the Trustee shall at all times show that all such
investments are part of the Trust;
(e) to employ suitable agents and counsel (who may also be counsel
for the Employer) and to pay their reasonable expenses and
Compensation;
(f) to borrow or raise monies for the purpose of the Trust from
any source and for any sum so borrowed, to issue its
promissory note as Trustee, and to secure the repayment
thereof by pledging all or any part of the Trust, but nothing
herein contained shall obligate the Trustee to render itself
liable individually for the amount of any such borrowing; and
no person loaning money to the Trustee shall be bound to see
to the application of money loaned or to inquire into the
validity, expedience or propriety of any such borrowing; and
(g) if any dispute shall arise as to the persons to whom payments
and the delivery of any monies or property shall be made by
the Trustee or the amounts thereof, to retain such payments
and/or postpone such delivery until actual adjudication of
such dispute shall have been made in a court of competent
jurisdiction or until the Trustee shall be indemnified against
loss to his satisfaction.
Each and all of the foregoing powers may be exercised without court
order or approval. No one dealing with the Trustee need inquire
concerning the validity or propriety of anything that is done or need
see to the application of any money paid or property transferred to or
upon the order of the Trustee.
3.5 GENERAL POWERS.
The Trustee shall have all of the powers necessary or desirable to do
all acts, take all such proceedings and exercise all such rights and
privileges, whether or not expressly authorized herein, which it may
deem necessary or proper for the administration and protection of the
property of the Trust and to accomplish any action provided for in the
Plan.
3.6 EMPLOYER SECURITIES.
If provided in the Adoption Agreement, the Administrator and/or
Participants in the Plan may direct that all or a portion of the Fund
be invested in Qualifying Employer Securities within the meaning of
section 407(d)(5) of the Employee Retirement Income Security Act
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of 1974, as amended, and the Trustees shall follow the proper
directions of the Administrator and/or Participants as to such
investment.
The Trustee shall be fully entitled to rely upon the directions of the
Administrator and/or Participants as to investment in Qualifying
Employer Securities and the Employer shall indemnify and hold harmless
the Trustee against any and all claims, liabilities and expenses
arising out of or related to such directions and the acquisition and
retention of Qualifying Employer Securities pursuant thereto.
As a condition of acquiring or retaining Qualifying Employer Securities
pursuant to this Section 3.6, the Trustee may, in its discretion,
require assurances satisfactory to it that the acquisition and holding
of such Qualifying Employer Securities will not constitute prohibited
transactions under section 406 of ERISA, or under section 4975 of the
Code.
The Trustee shall have no responsibility to exercise voting rights, or
rights in the event of a tender offer, with respect to Qualifying
Employer Securities held by it. All such rights shall be exercised by
the Administrator, as a "named fiduciary" of the Plan or, if the
Adoption Agreement so provides, by Plan Participants. The Trustee shall
deliver, or cause to be executed and delivered to the Administrator,
all notices, prospectuses, financial statements, proxies and
proxy-soliciting materials relating to Qualifying Employer Securities
held by it.
ARTICLE IV.
DISTRIBUTIONS FROM A PARTICIPANT'S ACCOUNT
Distributions from the Trust shall be made by the Trustee in accordance
with proper written directions of the Administrator in accordance with
the provisions of Articles VII and VIII of the Plan, and the
Administrator shall have the sole responsibility for determining that
the directions given conform to provisions of the Plan and applicable
law, including (without limitation) responsibility for calculating the
vested interests of the Participants, for calculating the amounts
payable to a Participant pursuant to Article VII of the Plan, and for
determining the proper person to whom benefits are payable under the
Plan.
ARTICLE V.
REPORTS OF THE TRUSTEE AND THE ADMINISTRATOR
The Trustee shall keep accurate and detailed records of all receipts,
investments, disbursements and other transactions required to be
performed hereunder with respect to the Trust. Not later than ninety
(90) days after the close of each Plan Year (or after the Trustee's
resignation or removal pursuant to Article XI hereof), the Trustee
shall file with
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the Administrator a written report reports reflecting the receipts,
disbursements and other transactions effected by it with respect to the
Trust during such Plan Year (or period ending with such resignation or
removal) and the assets and liabilities of the Trust at the close of
such Plan Year. Such report or reports shall be open to inspection by
any Participant for a period of one hundred eighty (180) days
immediately following the date on which it is filed with the
Administrator. Except as otherwise prescribed by ERISA, upon the
expiration of such one hundred eighty (180) day period, the Trustee
shall be forever released and discharged from all liability and
accountability to anyone with respect to its acts, transactions,
duties, obligations or responsibilities as shown in or reflected by
such report, except with respect to any such acts or transactions as to
which the Administrator shall have filed written objections with the
Trustee within such one hundred eighty (180) day period, and except for
willful misconduct or lack of good faith on the part of the Trustee.
ARTICLE VI.
TRUSTEE'S FEES AND EXPENSES OF THE TRUST
The Trustee's fees for performing its duties hereunder shall be such
reasonable amounts as shall be established by it from time to time. The
Trustee will furnish the Administrator with its current schedule of
fees and shall give written notice to the Administrator whenever its
fees are changed or revised. Such fees, any taxes of any kind
whatsoever which may be levied or assessed upon or in respect of the
Trust, and any and all expenses incurred by the Trustee in the
performance of its duties, including fees for legal services rendered
to the Trustee, shall, unless paid by the Employer, be paid from the
Trust in the manner provided for in the Plan.
All fees of the Trustee and taxes and other expenses charged to a
Participant's account will be collected by the Trustee from the amount
of any contribution to be credited or distribution to be charged to
such account or, if there are no such contributions or distributions,
shall be paid by redeeming or selling assets credited to such accounts.
ARTICLE VII.
DUTIES OF THE EMPLOYER AND THE ADMINISTRATOR
7.1 INFORMATION AND DATA TO BE FURNISHED THE TRUSTEE.
In addition to making the contributions called for in Article II
hereof, the Employer, through the Administrator, agrees to furnish the
Trustee with such information and data relative to the Plan as is
necessary for the proper administration of the Trust established
hereunder.
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7.2 LIMITATION OF DUTIES.
Neither the Employer nor any of its officers, directors or partners nor
the Administrator shall have any duties or obligations with respect to
this Trust Agreement, except those expressly set forth herein and in
the Plan.
ARTICLE VIII.
LIABILITY OF THE TRUST
(a) The Trustee shall not be responsible in any way for the
collection of contributions provided for under the Plan, the
adequacy of the assets of the Plan to meet the Plan's
obligation, the propriety of any contribution, the purpose or
the propriety of any distribution made pursuant to Article VII
thereof or of any allocation of contributions or forfeitures,
or any other action or nonaction taken pursuant to the
Administrator's request. The Trustee shall not be responsible
for the administration of the Plan, its validity or effect, or
the qualification of the Plan under the Code. The Trustee
shall be under no duty to take any action other than as herein
specified with respect to the Trust unless the Administrator
shall furnish the Trustee with instructions in proper form and
such instructions shall have been specifically agreed to by
the Trustee in writing; or to defend or engage in any suit
with respect to the Trust unless the Trustee shall have first
agreed in writing to do so and shall have been fully
indemnified to the satisfaction of the Trustee. The Trustee,
unless it knows that the instruction constitutes a breach of
the Administrator's duties or responsibilities under the Plan,
may conclusively rely upon and shall be protected in acting
upon any written order from the Administrator or any other
notice, request, consent, certificate or other instrument or
paper believed by it to be genuine and to have been properly
executed and, so long as it acts in good faith, in taking or
omitting to take any other action.
(b) The Employer shall indemnify and save the Trustee (including
its affiliates, representatives and agents) harmless from and
against any liability, cost or other expense, including, but
not limited to, the payment of attorneys' fees that the
Trustee may incur in connection with this Agreement or the
Plan unless such liability, cost or other expenses (whether
direct or indirect) arises from the Trustee's own willful
misconduct or gross negligence. The Employer recognizes that a
burden of litigation may be imposed upon the Trustee as a
result of some act or transaction for which it has no
responsibility or over which it has no control under this
Agreement. Therefore, the Employer agrees to indemnify and
hold harmless and, if requested, defend the Trustee (including
its affiliates, representatives and agents) from any expenses
(including counsel fees, liabilities, claims, damages,
actions, suits or other charges) incurred by the Trustee in
prosecuting or defending against any such litigation.
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(c) The Trustee shall not be liable for, and the Employer will
indemnify and hold harmless the Trustee (including its
affiliates, representatives and agents) from and against all
liability or expense (including counsel fees) because of (i)
any investment action taken or omitted by the Trustee in
accordance with any direction of the Employer or Participant,
or investment inaction in the absence of directions from the
Employer or a Participant or (ii) any investment action taken
by the Trustee pursuant to an order to purchase or sell
securities placed by the Employer or a Participant directly
with a broker, dealer or issuer. It is understood that
although, when the Trustee is subject to the direction of the
Employer or a Participant, the Trustee will perform certain
ministerial duties with respect to the opinion of the Trust
subject to such direction (the "Directed Fund"). Such duties
do not involve the exercise of any discretionary authority or
other authority to manage and control assets of the Directed
Fund and will be performed in the normal course of business by
officers and Employees of the Trustee or its affiliates,
representatives or agents who may be unfamiliar with
investment management. It is agreed that the Trustee is not
undertaking any duty or obligation, express or implied, to
review, and will not be deemed to have any knowledge of or
responsibility with respect to, any transaction involving the
investment of the Directed Fund as a result of the performance
of its ministerial duties. Therefore, in the event that
"knowledge" of the Trustee shall be a prerequisite of imposing
a duty upon or determining liability of the Trustee under the
Plan or this Trust or any law or regulation regulating the
conduct of the Trustee, with respect to the Directed Fund, as
a result of any act or omission of the Employer of any
Participant, or as a result of any transaction engaged in by
any of them, then the receipt and processing of investment
orders or other documents relating to Plan assets by an
officer or other Employee of the Trustee or its affiliates,
representatives or agents engaged in the performance of purely
ministerial functions shall not constitute "knowledge" of the
Trustee.
ARTICLE IX.
DELEGATION OF POWERS
9.1 DELEGATION BY THE TRUSTEE.
The Trustee may delegate, by instrument in writing, to a
person(individual, corporate or other entity) appointed as agent or
custodian by it, any of the powers or functions of the Trustee
hereunder other than the investment of the Trust assets,
including(without limitation):
(a) custodianship of all or any part of the assets of the Trust;
(b) maintaining and accounting for the Trust and for Participants
and other accounts as a part thereof;
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(c) distribution of benefits as directed by the Administrator; and
(d) preparation of the annual report on the status of the Trust.
The agent or custodian so appointed may act as agent for the Trustee,
without investment responsibility, for fees to be mutually agreed upon
by the Employer and the agent or custodian and paid in the same manner
as Trustees' fees. The Trustee shall not be responsible for any act or
omission of the agent or custodian arising from any such delegation,
except to the extent provided in Article VIII hereof.
If the Plan has more than one (1) Trustee, then fiduciary duties may be
allocated among such Trustees.
9.2 DELEGATION WITH EMPLOYER APPROVAL.
The Trustee and the Employer may, by mutual agreement, arrange for the
delegation by the Trustee to the Administrator or any agent of the
Employer of any powers or functions of the Trustee hereunder other than
the investment and custody of the Trust assets. The Trustee shall not
be responsible for any act or omission of such person or persons
arising from any such delegation, except to the extent provided in
Article VIII hereof.
ARTICLE X.
AMENDMENT
As provided in Article XIII of the Plan, and subject to the limitations
set forth therein, the Plan and Trust Agreement may be amended at any
time, in whole or in part, by the Employer. No amendment to the Plan or
Trust Agreement shall place any greater burden on the Trustee without
the Trustee's written consent.
ARTICLE XI.
RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time upon thirty (30) days' notice in
writing to the Employer, and may be removed by the Employer at any time
upon thirty (30) days' notice in writing to the Trustee. Upon such
resignation or removal, the Employer shall appoint a successor Trustee
or Trustees. Upon receipt by the Trustee of written acceptance of such
appointment by the successor Trustee, the Trustee shall transfer and
pay over to such successor the assets of the Trust and all records
pertaining thereto, provided that any successor Trustee shall agree not
to dispose of any such records without the Trustee's consent. The
successor Trustee shall be entitled to rely on all accounts, records
and other documents received by it from the Trustee, and shall not
incur any liability whatsoever for such reliance. The Trustee is
authorized, however, to reserve such sum of money or
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property as it may deem advisable for payment of all its fees,
Compensation, costs and expenses, or for payment of any other
liabilities constituting a charge on or against the assets of the Trust
or on or against the Trustee, with any balance or of such reserve
remaining after the payment of all such items to be paid over to the
successor Trustee. Upon the assignment, transfer and payment over of
the assets of the Trust, and obtaining a receipt thereof from the
successor Trustee, the Trustee shall be released and discharged for any
and all claims, demands, duties and obligations arising out of the
Trust and its management thereof, excepting only claims based upon the
Trustee's willful misconduct or lack of good faith. The successor
Trustee shall hold the assets paid over to it under terms similar to
those of an agreement that qualifies under section 401 of the Code. If
within thirty (30) days after the Trustee's resignation or removal, the
Employer has not appointed a successor Trustee which has accepted such
appointment, the Trustee shall, unless it elects to terminate the Trust
pursuant to Article XII hereof, appoint such successor itself.
ARTICLE XII.
TERMINATION OF THE TRUST AGREEMENT
12.1 TERM OF THE TRUST AGREEMENT.
This Trust Agreement shall continue so long as the Plan is in full
force and effect. If the Plan ceases to be in full force and effect,
this Trust Agreement shall thereupon terminate unless expressly
extended by the Employer.
12.2 TERMINATION BY THE TRUSTEE.
The Trustee may elect to terminate the Agreement if within thirty (30)
days after its resignation or removal pursuant to Article XI the
Employer has not appointed a successor Trustee which has accepted such
appointment. Termination of the Agreement shall be effected by
distributing all assets thereof to the Participants or other persons
entitled thereto pursuant to the direction of the Administrator (or in
the absence of such direction, as determined by the Trustee) as
provided in Article VII of the Plan, subject to the Trustee's right to
reserve Trusts as provided in Article XI hereof. Upon the completion of
such distribution, the Trustee shall be relieved from all further
liability with respect to all amounts so paid, other than any liability
arising out of the Trustee's willful misconduct or lack of good faith.
12.3 FAILURE OF INITIAL QUALIFICATION.
Anything herein to the contrary notwithstanding, if a final
determination letter is received from the Internal Revenue Service that
the Plan as herein set forth or as amended prior to the receipt of such
ruling does not qualify under sections 401 and 501 of the Code as to
the Employer for the first taxable year for which it has been adopted
by the Employer,
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the Employer, at its option, may withdraw all contributions theretofore
made by it and any income earned thereon, less all expenses incurred,
at the then current value thereof, and the Plan shall thereupon
terminate and all rights of each Participant or his Beneficiary in the
contributions made on his behalf by the Employer shall cease and come
to an end. In the event of termination of the Plan pursuant to this
Article there shall also be forthwith paid to each Participant the then
value, if any, of his salary reduction, Rollover/Transfer and Voluntary
Employee Contributions Accounts. In the event of the receipt of such an
adverse determination letter and the termination of the Plan as to an
Employer, no Participant or Beneficiary of a Participant shall have a
right or claim against the Trust or to any benefit under the Plan, and
no benefits shall be paid to any Participant former Participant or his
Beneficiary.
ARTICLE XIII.
MISCELLANEOUS
13.1 NO DIVERSION OF ASSETS.
At no time shall it be possible for any part of the assets of the Trust
to be used for or diverted to purposes other than for the exclusive
benefit of Participants and their Beneficiaries or revert to the
Employer, except as specifically provided in the Plan or this Trust
Agreement.
13.2 NOTICES.
Any notice from the Trustee to the Employer or from the Employer to the
Trustee provided for in this Plan and Trust Agreement shall be
effective if sent by first class mail at their respective last address
of record.
13.3 MULTIPLE TRUSTEES.
In the event that there shall be two (2) or more Trustees serving
hereunder, any action taken or decision made by any such Trustees may
be taken or made by a majority of them with the same effect as if all
had joined therein, if there be more than two (2), or unanimously if
there be two (2).
13.4 CONFLICT WITH PLAN.
In the event of any conflict between the provisions of the Plan and
those of this Trust Agreement, the former shall prevail.
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<PAGE>
13.5 APPLICABLE LAW.
This Trust Agreement shall be construed in accordance with the laws of
the state where the Trustee has its principal place of business.
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AMENDMENT NO.3 TO
THE 1991 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN OF
WHEELING-PITTSBURGH CORPORATION
(as adopted by WHX Corporation)
1. The 1991 Incentive and Nonqualified Stock Option Plan (the "Plan")
is hereby amended, subject to stockholder approval of this Agreement within one
(1) year of the date hereof, as follows:
Section 4 of the Plan is hereby amended in its entirety to read as
follows:
"4. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 7 hereof, a total of three
and one-half million (3,500,000) shares of common stock, $.01 par value
("Stock"), of the Company shall be subject to the Plan. The shares of
Stock subject to the Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company or any
Subsidiary of the Company, and such amount of shares of Stock shall be
and is hereby reserved for such purpose. Any of such shares of Stock
which may remain unsold and which are not subject to outstanding
Options at the termination of the Plan shall cease to be reserved for
the purpose of the Plan, but until termination of the Plan the Company
shall at all times reserve a sufficient number of shares of Stock to
meet the requirements of the Plan. Should any Option expire or be
cancelled prior to its exercise in full or should the number of shares
of Stock to be delivered upon the exercise in full of an Option be
reduced for any reason, the shares of Stock theretofore subject to such
Option may again be subject to an Option under the Plan."
2. Except as amended hereby, the Plan shall remain in full force and
effect.
Dated as of April 23, 1998
WHX CORPORATION
1997 DIRECTORS STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of the WHX Corporation 1997 Directors Stock Option
Plan (the "Plan") is to secure for WHX Corporation and its stockholders the
benefits arising from stock ownership by its directors. The Plan will provide a
means whereby such directors may purchase shares of the common stock, $.01 par
value, of WHX Corporation pursuant to options granted in accordance with the
Plan.
ARTICLE II
DEFINITIONS
The following capitalized terms used in the Plan shall have
the respective meanings set forth in this Article:
2.1 "Board" shall mean the Board of Directors of WHX
Corporation.
2.2 "Chairman" shall mean the duly appointed Chairman of any
standing Committee of the Board.
2.3 "Committee" shall mean a duly appointed standing committee
of the Board.
2.4 "Company" shall mean WHX Corporation.
2.5 "Director" shall mean any person who is a member of the
Board of Directors of the Company.
2.6 "Eligible Person" shall be any Director who is not a full
or part-time Employee of the Company, except the Chairman of the Board shall not
be an Eligible Person.
2.7 "Exercise Price" shall mean the price per Share at which
an Option may be exercised.
2.8 "Fair Market Value" shall mean the closing sale price of a
Share as reported on the New York Stock Exchange Composite Tape on the day
preceding the Grant Date or on the preceding such date if no Shares were traded
on such Grant Date. If the Shares are not reported on the New York Stock
Exchange or
<PAGE>
on another national securities exchange, Fair Market Value shall be deemed to be
the average of the high bid and asked prices of the Shares on the
over-the-counter market on the Grant Date, or the next preceding date on which
the last prices were recorded.
2.9 "Grant Date" shall mean the Initial Grant Date or any
other date that an Option shall be granted pursuant to the Plan as appropriate.
2.10 "Initial Grant Date" shall mean the date of the 1997
Annual Meeting of Stockholders.
2.11 "Option" shall mean an Option to purchase Shares granted
pursuant to the Plan.
2.12 "Option Agreement" shall mean the written agreement
described in Article VI herein.
2.13 "Permanent Disability" shall mean the condition of an
Eligible Person who is unable to participate as a member of the Board by reason
of any medically determined physical or mental impairment which can be expected
to result in death or which can be expected to last for a continuous period of
not less than twelve (12) months.
2.14 "Purchase Price" shall be the Exercise Price multiplied
by the number of whole Shares with respect to which an Option may be exercised.
2.15 "Shares" shall mean shares of common stock $.01 par value
of the Company.
2.16 "Subsequent Grant Date" shall mean the date of each
annual meeting of the stockholders of the Company following the Initial Grant
Date, provided that the Eligible Person served as a Director during the period
between the Initial Grant Date and Subsequent Grant Date and between Subsequent
Grant Dates, as the case may be.
ARTICLE III
ADMINISTRATION
3.1 GENERAL. This Plan shall be administered by the Board in
accordance with the express provisions of this Plan.
3.2 POWERS OF THE BOARD. The Board shall have full and
complete authority to adopt such rules and regulations and to make all such
other determinations not inconsistent with the Plan as may be necessary for the
administration of the Plan.
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<PAGE>
ARTICLE IV
SHARES SUBJECT TO PLAN
Subject to adjustment in accordance with Article IX an
aggregate of 400,000 Shares is reserved for issuance under this Plan. Shares
sold under this Plan may be either authorized, but unissued Shares or reacquired
Shares. If an Option, or any portion thereof, shall expire or terminate for any
reason without having been exercised in full, the unpurchased Shares covered by
such Option shall be available for future grants of Options.
ARTICLE V
GRANTS
5.1 INITIAL GRANTS. On the Initial Grant Date, each Eligible
Person shall receive the grant of an Option to purchase 25,000 Shares.
5.2 SUBSEQUENT GRANTS TO DIRECTORS. On each Subsequent Grant
Date, each Eligible Person shall receive the grant of an Option to purchase
5,000 Shares, provided that the grant of Options hereunder to an Eligible Person
who is a Director shall not exceed 40,000 Shares.
5.3 COMPLIANCE WITH RULE 16B-3. The terms for the grant of
Options to an Eligible Person may only be changed if permitted under Rule 16b-3
of the Securities Exchange Act of 1934, as amended, and accordingly the formula
for the grant of Options may not be changed or otherwise modified more than once
in any six month period.
ARTICLE VI
TERMS OF OPTION
Each Option shall be evidenced by a written Option Agreement
executed by the Company and the Eligible Person which shall specify the Grant
Date, the number of Shares subject to the Option, the Exercise Price which shall
be the Fair Market Value on the day preceding the Grant Date and shall also
include or incorporate by reference the substance of all of the following
provisions and such other provisions consistent with this Plan as the Board may
determine.
6.1 TERM. The term of the Option shall be ten (10) years from
the Grant Date of each Option, subject to earlier termination in accordance with
Articles VI and X.
6.2 RESTRICTION ON EXERCISE. Options shall be exercisable at
such time or times and subject to such terms and
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<PAGE>
conditions as shall be determined by the Board at grant, provided, however, that
except in the case of the Eligible Person's death, Permanent Disability or
removal as a Director without cause, or failure to stand for reelection, upon
which events the Option will become immediately exercisable, unless a longer
vesting period is otherwise determined by the Board at grant; Options shall be
exercisable as follows: up to one-third of the aggregate Shares purchasable
under an Option shall be exercisable commencing one year after the Grant Date,
an additional one-third of the Shares purchasable under an Option shall be
exercisable commencing two years after the Grant Date and the balance commencing
on the third anniversary from the Grant Date. The Board may waive such
installment exercise provision at any time in whole or in part based on
performance and/or such other factors as the Board may determine in its sole
discretion, provided, however, that no Option shall be exercisable until more
than six months have elapsed from the Grant Date.
6.3 EXERCISE PRICE. The Exercise Price for each Share subject
to an Option shall be the Fair Market Value of the Share as determined in
Section 2.8 herein.
6.4 MANNER OF EXERCISE. An Option shall be exercised in
accordance with its terms, by delivery of a written notice of exercise to the
Company and payment of the full purchase price of the Shares being purchased. An
Eligible Person may exercise an Option with respect to all or less than all of
the Shares for which the Option may then be exercised, but an Eligible Person
must exercise the Option in full Shares.
6.5 PAYMENT. The Purchase Price of Shares purchased pursuant
to an Option or portion thereof, may be paid:
(a) in United States Dollars, in cash or by check,
bank draft or money order payable to the Company;
(b) by delivery of Shares already owned by an
Eligible Person with an aggregate Fair Market Value on the date of exercise
equal to the Purchase Price, subject to the provisions of Section 16(b) of the
Securities Exchange Act of 1934;
(c) through the written election of the Eligible
Person to have Shares withheld by the Company from the Shares otherwise to be
received with such withheld Shares having an aggregate Fair Market Value on the
date of exercise equal to the Purchase Price.
6.6 TRANSFERABILITY. No Option shall be transferable otherwise
than by will or the laws of descent and distribution; PROVIDED HOWEVER, that to
the extent the option agreement
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<PAGE>
provisions do not disqualify such option for exemption under Rule 16b-3 under
the Securities Exchange Act of 1934, as amended, Options may be transferable
during an Optionee's lifetime to immediate family members of an Optionee,
partnerships in which the only partners are members of the Optionee's immediate
family, and trusts established solely for the benefit of such immediate family
members. An Option shall be exercisable during the Eligible Person's lifetime
only by the Eligible Person, his guardian, legal representative or permitted
transferee.
6.7 TERMINATION OF SERVICE. If an Eligible Person's service as
a Director terminates for any reason, an Option held on the date of termination
may be exercised in whole or in part at any time within one (1) year after the
date of such termination (but in no event after the term of the Option expires)
and shall thereafter terminate.
ARTICLE VII
GOVERNMENT AND OTHER REGULATIONS
7.1 DELIVERY OF SHARES. The obligation of the Company to issue
or transfer and deliver Shares for exercised Options under the Plan shall be
subject to all applicable laws, regulations, rules, orders and approvals which
shall then be in effect.
7.2 HOLDING OF STOCK AFTER EXERCISE OF OPTION. The Option
Agreement shall provide that the Eligible Person, by accepting such Option,
represents and agrees, for the Eligible Person and his permitted transferees
hereunder that none of the Shares purchased upon exercise of the Option shall be
acquired with a view to any sale, transfer or distribution of the Shares in
violation of the Securities Act of 1933, as amended (the "Act") and the person
exercising an Option shall furnish evidence satisfactory to that Company to that
effect, including an indemnification of the Company in the event of any
violation of the Act by such person. Notwithstanding the foregoing, the Company
in its sole discretion may register under the Act the Shares issuable upon
exercise of the Options under the Plan.
ARTICLE VIII
WITHHOLDING TAX
The Company may in its discretion, require an Eligible Person
to pay to the Company, at the time of exercise of an Option an amount that the
Company deems necessary to satisfy its obligations to withhold federal, state or
local income or other taxes (which for purposes of this Article includes an
Eligible Person's FICA obligation) incurred by reason of such exercise. When the
exercise of an Option does not give rise to the
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<PAGE>
obligation to withhold federal income taxes on the date of exercise, the Company
may, in its discretion, require an Eligible Person to place Shares purchased
under the Option in escrow for the benefit of the Company until such time as
federal income tax withholding is required on amounts included in the Eligible
Person's gross income as a result of the exercise of an Option. At such time,
the Company, in its discretion, may require an Eligible Person to pay to the
Company an amount that the Company deems necessary to satisfy its obligation to
withhold federal, state or local taxes incurred by reason of the exercise of the
Option, in which case the Shares will be released from escrow upon such payment
by an Eligible Person.
ARTICLE IX
ADJUSTMENTS
9.1 PROPORTIONATE ADJUSTMENTS. If the outstanding Shares are
increased, decreased, changed into or exchanged into a different number or kind
of Shares or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
to the maximum number and kind of Shares as to which Options may be granted
under this Plan. A corresponding adjustment changing the number or kind of
Shares allocated to unexercised Options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in the outstanding Options shall be made without change in the
Purchase Price applicable to the unexercised portion of the Option with a
corresponding adjustment in the Exercise Price of the Shares covered by the
Option. Notwithstanding the foregoing, there shall be no adjustment for the
issuance of Shares on conversion of notes, preferred stock or exercise of
warrants or Shares issued by the Board for such consideration as the Board deems
appropriate.
9.2 DISSOLUTION OR LIQUIDATION. Upon the dissolution or
liquidation of the Company, or upon a reorganization, merger or consolidation of
the Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon a sale of substantially all of the
property or more than 80% of the then outstanding Shares of the Company to
another corporation, the Company shall give to each Eligible Person at the time
of adoption of the plan for liquidation, dissolution, merger or sale either (1)
a reasonable time thereafter within which to exercise the Option prior to the
effective date of such liquidation or dissolution, merger or sale, or (2) the
right to exercise the Option as to an equivalent number of Shares of stock of
the corporation succeeding the Company or acquiring its
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<PAGE>
business by reason of such liquidation, dissolution, merger, consolidation or
reorganization.
ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
10.1 AMENDMENTS. The Board may at any time amend or revise the
terms of the Plan, provided no such amendment or revision shall, unless
appropriate stockholder approval of such amendment or revision is obtained:
(a) increase the maximum number of Shares which may
be sold pursuant to Options granted under the Plan, except as permitted under
the provisions of Article IX;
(b) change the minimum Exercise Price set forth in
Article VI;
(c) increase the maximum term of Options provided for
in Article VI; or
(d) permit the granting of Options to any one other
than as provided in Article V.
10.2 TERMINATION. The Board at any time may suspend or
terminate this Plan. This Plan, unless sooner terminated, shall terminate on the
tenth (10th) anniversary of its adoption by the Board. No Option may be granted
under this Plan while this Plan is suspended or after it is terminated.
10.3 HOLDER OF CONSENT. No amendment, suspension or
termination of the Plan shall, without the consent of the holder of Options,
alter or impair any rights or obligations under any Option theretofore granted
under the Plan.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 PRIVILEGE OF STOCK OWNERSHIP. No Eligible Person entitled
to exercise any Option granted under the Plan shall have any of the rights or
privileges of a stockholder of the Company with respect to any Shares issuable
upon exercise of an Option until certificates representing the Shares shall have
been issued and delivered.
11.2 PLAN EXPENSES. Any expenses incurred in the
administration of the Plan shall be borne by the Company.
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<PAGE>
11.3 USE OF PROCEEDS. Payments received from an Eligible
Person upon the exercise of Options shall be used for general corporate purposes
of the Company.
11.4 GOVERNING LAW. The Plan has been adopted under the laws
of the State of Delaware. The Plan and all Options which may be granted
hereunder and all matters related thereto, shall be governed by and construed
and enforceable in accordance with the laws of the State of Delaware as it then
exists.
ARTICLE XII
STOCKHOLDER APPROVAL
This Plan is subject to approval, at a duly held stockholders'
meeting within twelve (12) months after the date the Board approves this Plan,
by the affirmative vote of holders of a majority of the voting Shares of the
Company represented in person or by proxy and entitled to vote at the meeting.
Options may be granted, but not exercised, before such stockholder approval. If
the shareholders fail to approve the Plan within the required time period, any
Options granted under this Plan shall be void, and no additional Options may
thereafter be granted.
-8-
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
September 23, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: WHX Corporation
REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
Reference is made to the Registration Statement on Form S-8
dated the date hereof (the "Registration Statement"), filed with the Securities
and Exchange Commission by WHX Corporation, a Delaware corporation (the
"Company"). The Registration Statement relates to an aggregate of 1,500,000
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"). The Shares will be issued and sold by the Company in accordance with
Handy & Harman's 401(K) Retirement Plan, the Company's 1997 Directors Stock
Option Plan and the Company's 1991 Incentive and Nonqualified Stock Option Plan
(the "Plans").
We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Certificate of
Incorporation and By-laws of the Company, minutes of meetings of the Board of
Directors and stockholders of the Company, the Plans, the documents to be sent
or given to participants in the Plans (the "Prospectuses") and such other
documents, instruments and certificates of officers and representatives of the
Company and public officials, and we have made such examination of the law, as
we have deemed appropriate as the basis for the opinion hereinafter expressed.
In making such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to original documents of documents submitted to us as certified or
photostatic copies.
<PAGE>
Based upon the foregoing, we are of the opinion that the
Shares, when issued and paid for in accordance with the terms and conditions set
forth in the Prospectuses, will be duly and validly issued, fully paid and
non-assessable.
We are members of the bar of the State of New York.
Accordingly, this opinion is limited to the federal laws of the United States,
the laws of the State of New York and the General Corporation Law of the State
of Delaware.
We advise you that Marvin L. Olshan, a member of this firm, is a
Director and Secretary of the Company and owns 1,000 shares, and options to
purchase 70,000 shares, of Common Stock of the Company. Steven Wolosky, also a
member of this firm, is Assistant Secretary of the Company and holds, directly
or indirectly, options to purchase 23,500 shares of Common Stock of the Company.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement.
Very truly yours,
/S/ OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
------------------------------------------
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 10, 1998, except as to Note
R, which is as of March 1, 1998, and our report dated February 12, 1998, which
appear on pages 25 and 52, respectively, of WHX Corporation's Annual Report on
Form 10-K for the year ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Pittsburgh, PA
September 23, 1998
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
WHX Corporation:
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of WHX Corporation of our report relating to the consolidated balance
sheets of Handy & Harman and Subsidiaries as of December 31, 1997 and 1996, and
the related consolidated statements of income, shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1997,
dated February 9, 1998, except as to Note 11, which is as of March 1, 1998,
which report appears in the December 31, 1997 annual report on Form 10-K of
Handy & Harman.
/s/ KPMG Peat Marwick LLP
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KPMG Peat Marwick LLP
New York, New York
September 24, 1998
