AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 1996
REGISTRATION NO. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
Crompton & Knowles Corporation
(Exact name of Corporation as Specified in Its Charter)
Massachusetts 04-1218720
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Station Place, Metro Center
Stamford, Connecticut 06902
(203) 353-5400
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Corporation's Principal Executive Offices)
Uniroyal Chemical Company, Inc.
Retirement Reserve Fund Plan
(Full Title of Plan)
John T. Ferguson II
Vice President, General Counsel and Secretary
Crompton & Knowles Corporation
One Station Place, Metro Center
Stamford, Connecticut 06902
(203) 353-5400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
-----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price per Share Aggregate Offering Price Registration Fee
- -----------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Common Stock,
$.10 par value(1) 360,000 16.88 $6,075,000 $1,841
- -----------------------------------------------------------------------------------------------------------
Plan Interests(2)
===========================================================================================================
</TABLE>
(1) Includes one attached Preferred Share Purchase Right per share of common
stock, par value $.10 per share (together, the "Common Stock") of Crompton &
Knowles Corporation (the "Corporation"). The number of shares covered by this
Registration Statement is the estimate of the Corporation of the number of
shares of Common Stock that will be purchased by the Uniroyal Chemical Company,
Inc. Retirement Reserve Fund Plan (the "Plan"). The price of the Common Stock is
estimated in accordance with Rule 457(c) under the Securities Act of 1933 (the
"Securities Act") solely for the purpose of calculating the registration fee on
the basis of the average of the high and low sale prices of the Common Stock on
the New York Stock Exchange on October 15, 1996.
(2) 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 Plan described herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
The documents containing the information specified in Part I will be sent
or given to employees as specfied by Rule 428(b)(1). In accordance with the
instructions to Part I of Form S-8, such documents are not being filed and will
not be filed with the Securities and Exchange Commission (the "Commission"),
either as part of this registration statement or as a prospectus or prospectus
supplement pursuant to Rule 424.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 3. Incorporation of Documents By Reference
There are incorporated herein by reference the following documents of the
Corporation or the Plan filed with the Securities and Exchange Commission (the
"Commission"):
(a) Annual Report of the Corporation on Form 10-K/A for the fiscal year
ended December 30, 1995 (which incorporates by reference certain
portions of the Corporation's 1995 Annual Report to Stockholders);
(b) Quarterly Reports of the Corporation on Form 10-Q for the quarter
ended June 29, 1996, and on Form 10-Q/A for the quarter ended March
30, 1996;
(c) Current Report of the Corporation on Form 8K dated August 21, 1996;
(d) The description of the Corporation's Common Stock contained in any
report or document filed under the Securities Exchange Act of 1934
(the "Exchange Act"), including any amendment or report filed for the
purpose of updating such description; and
(e) The description of the Corporation's Preferred Share Purchase Rights
(which are currently transferred with the Corporation's Common Stock)
contained in the Registration Statement of the Corporation on Exhibit
1 to Form 8-A dated July 29, 1988.
All documents filed by the Corporation or the Plan pursuant to Section
13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of securities made
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Expert and Counsel
John T. Ferguson II, Vice President, General Counsel and Secretary of the
Corporation, beneficially owns 174,852 shares of Common Stock. Additional
information concerning Mr. Ferguson is hereby incorporated herein by reference
to the Registration Statement on Form S-4 of the Corporation (Registration No.
333-08539).
II-2
<PAGE>
Item 6. Indemnification Of Directors And Officers
Section 67 of the Business Corporation Law of the Commonwealth of
Massachusetts (the "B.C.L.") sets forth conditions and limitations governing the
indemnification of officers, directors, and other persons of the Corporation.
The Corporation's By-laws provide that the Corporation shall, to the full
extent permitted by law, indemnify each of its directors and officers (including
persons who serve at its request as directors, officers, or trustees of another
organization in which it has any interest, direct or indirect, as a shareholder,
creditor, or otherwise or who serve at its request in any capacity with respect
to any employee benefit plan) against all liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise, or as fines and
penalties, and counsel fees, reasonably incurred by him in connection with the
defense or disposition of any action, suit, or other proceeding, whether civil
or criminal, in which he may be involved or with which he may be threatened,
while in office or thereafter, by reason of his being or having been such a
director, officer, or trustee, except with respect to any matter as to which he
shall have been adjudicated in any proceeding not to have acted in good faith in
the reasonable belief that his action was in the best interests of the
Corporation or, to the extent that such matter relates to service with respect
to an employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan; provided, however, that as to any
matter disposed of by a compromise payment by such director or officer, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless such compromise shall be
approved as in the best interests of the Corporation, after notice that it
involves such indemnification: (a) by a disinterested majority of the directors
then in office; or (b) by a majority of the disinterested directors then in
office, provided that there has been obtained an opinion in writing of
independent legal counsel to the effect that such director or officer appears to
have acted in good faith in the reasonable belief that his action was in the
best interests of the Corporation; or (c) by the holders of a majority of the
outstanding stock at the time entitled to vote for directors, voting as a single
class, exclusive of any stock owned by any interested director or officer.
Expenses, including counsel fees, reasonably incurred by any director or
officer in connection with the defense or disposition of any such action, suit,
or other proceeding may be paid from time to time by the Corporation, at the
discretion of a majority of the disinterested directors then in office, in
advance of the final disposition thereof upon receipt of an undertaking by such
director or officer to repay the amount so paid to the Corporation if it is
ultimately determined that indemnification for such expenses is not authorized
pursuant to the By-laws, which undertaking may be accepted without reference to
the financial ability of such director or officer to make repayment.
The Corporation's Amended and Restated Articles of Organization provide
that a director shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director;
provided, however, that this shall not eliminate or limit the liability of a
director to the extent provided by applicable law (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 61 or 62 of the B.C.L. (such
sections relate generally to the liability of directors for authorizing
distributions to shareholders at a time when the Corporation is insolvent or
bankrupt and the liability of directors for approving loans to officers or
directors of the Corporation which are not repaid and which were not approved or
ratified by a majority of disinterested directors or shareholders), or (iv) for
any transactions from which the director derived an improper personal benefit.
No amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
II-3
<PAGE>
The Corporation has insurance to indemnify its directors and officers,
within the limits of the Corporation's insurance policies, for those liabilities
in respect of which such indemnification insurance is permitted under the laws
of the Commonwealth of Massachusetts.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
The Exhibits to this Registration Statement are listed on the Index to the
Exhibits on page II-8 of this Registration Statement which Index is hereby
incorporated by reference herein. The undersigned registrant undertakes that it
will submit the Plan and any amendments thereto to the Internal Revenue Service
in a timely manner and will make all changes required by the Internal Revenue
Service in order to qualify the Plan.
Item 9. Undertakings
(a) The Corporation hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Corporation pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post- effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Corporation hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Corporation's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Corporation pursuant to the foregoing provision, or otherwise, the Corporation
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
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by
II-4
<PAGE>
the Corporation of expenses incurred or paid by a director, officer or
controlling person of the Corporation 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 Corporation will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
The Company
Pursuant to the requirements of the Securities Act of 1933, the Corporation
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 Stamford, State of Connecticut, on the 17th day of
October, 1996.
CROMPTON & KNOWLES CORPORATION
By: *
-------------------------------------
Vincent A. Calarco
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 17, 1996.
SIGNATURE TITLE
--------- -----
* Chairman, President and Chief Executive
--------------------------- Officer (principal executive officer)
Vincent A. Calarco
* Vice President-Finance, Chief Financial
--------------------------- Officer and Director (principal financial
Charles J. Marsden officer)
* Treasurer (principal accounting officer)
---------------------------
Peter Barna
* Director
---------------------------
James A. Bitonti
* Director
---------------------------
Robert A. Fox
* Director
---------------------------
Roger L. Headrick
* Director
---------------------------
Leo I. Higdon, Jr.
* Director
---------------------------
Michael W. Huber
* Director
---------------------------
C.A. Piccolo
II-6
<PAGE>
* Director
---------------------------
Patricia K. Woolf, Ph.D
*By: /s/ John T. Ferguson II
------------------------
John T. Ferguson II Attorney-in-Fact
The Plan
Pursuant to the requirements of the Securities Act of 1933, the Retirement
Board has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Middlebury,
Connecticut, on the 17th day of October, 1996.
UNIROYAL CHEMICAL COMPANY, INC.
RETIREMENT RESERVE FUND PLAN
By: /s/ Gene C. Holmes
-----------------------------------
Gene C. Holmes
Retirement Board
II-7
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Uniroyal Chemical Company, Inc. Retirement Reserve Fund Plan
(Restatement Effective November 1, 1996).
5.1 Opinion of the General Counsel of the Corporation dated October
17, 1996.
23.1 Consent of Independent Auditors, KPMG Peat Marwick LLP, dated
October 17, 1996.
23.2 Consent of the General Counsel of the Corporation (included in
Exhibit 5.1).
24.1 Power of Attorney.
II-8
Uniroyal Chemical Company, Inc.
Retirement Reserve Fund Plan
(Restatement Effective November 1, 1996)
September 27, 1996
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1 Definitions.................................................... 1
2 Eligibility and Participation.................................. 12
3 Employer Contributions......................................... 14
4 Investment of Contributions.................................... 39
5 Vesting........................................................ 47
6 Accounts....................................................... 49
7 Withdrawals During Employment.................................. 52
8 Payment of Benefits............................................ 57
9 Reemployment................................................... 77
10 Administration of the Plan..................................... 80
11 The Trust Fund................................................. 84
12 Amendment of the Plan.......................................... 85
13 Discontinuance of the Plan..................................... 86
14 Participation in the Plan by Affiliates........................ 88
15 Top-Heavy Provisions........................................... 90
16 Loans.......................................................... 93
17 Construction of Plan...........................................101
Appendix A........................................................... 1
Appendix B........................................................... 1
<PAGE>
INTRODUCTION
The Uniroyal Chemical Company Capital Accumulation Plan for Salaried
Employees (the "CAP") and the Uniroyal Chemical Company Retirement Savings Plan
(the "Retirement Savings Plan") were both adopted by Uniroyal Chemical Company,
Inc., effective as of October 15, 1986. Effective as of January 1, 1989, the CAP
was merged into the Retirement Savings Plan, with the continuing Plan being
known as the Uniroyal Chemical Capital Accumulation and Retirement Savings Plan
(the "Plan"). Effective November 1, 1996 (except that any election made in
accordance with this restated Plan may be made as of October 1, 1996), the Plan
(which was renamed the Uniroyal Chemical Company Retirement Reserve Fund Plan as
of January 1, 1990) is hereby amended and restated, as set forth below.
<PAGE>
SECTION 1
Definitions
As used herein, the following terms shall have the following respective
meanings, unless a different meaning is required by the context:
1.1 "Account" or "Accounts" means, singly or collectively (as the case may
be), a Participant's Basic Contributions Account, Participant Contributions
Account, Matching Contributions Account and Supplemental Contributions Account.
1.2 "Affiliate" means any corporation or other trade or business that
together with any participating Employer is deemed a single employer under
section 414(b), 414(c) or 414(m) of the Code. Any such entity will be considered
an Affiliate under the Plan (i) during any such period of affiliated status, and
(ii) to the extent specifically provided elsewhere in the Plan, during any
period preceding a period of such affiliated status.
1.3 "Appropriate Form" means the form provided or prescribed by the
Retirement Board for the particular purpose.
1.4 "Associate" means a person who is employed by an Employer as a salaried
or wage management associate, and who is not covered by the terms of a
collective bargaining agreement (unless such agreement expressly provides for
participation in the Plan), subject to the
<PAGE>
provisions of Section 1.27; provided, however, that if any such person is
employed outside the United States and is not a U.S. citizen, such person shall
not be an Associate unless the location at which such person is employed has
been designated by the Chairman of the Retirement Board as an "Included
Location".
1.5 "Basic Contributions" means the contributions made on behalf of a
Participant under Section 3.2, and any additional contributions made on behalf
of a Participant under Section 3.6.
1.6 "Basic Contributions Account" means the separate account maintained on
the books of the Plan with respect to the Participant's interest in the Fixed
Income Fund attributable to Basic Contributions made on his behalf. There shall
also be credited to each Participant's Basic Contributions Account, as of
January 1, 1990, the amount (if any) credited to his Capital Accumulation
Contributions Account under the Plan on December 31, 1989, in respect of Capital
Accumulations Contributions made on his behalf under the Plan as in effect prior
to January 1, 1990.
1.7 "Beneficiary" means the person or persons (including a fiduciary,
whether individual or corporate) who, under Section 8, are to receive any death
benefits payable in respect of a Participant under the Plan.
1.8 "Board" means the Board of Directors of the Company.
2
<PAGE>
1.9 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
1.10 "Common Stock" means the common stock, par value $.10, of Crompton &
Knowles Corporation, the parent of the Company.
1.11 "Company" means Uniroyal Chemical Company, Inc.
1.12 "Earnings" means wages as defined in section 3401(a) of the Code for
purposes of income tax withholding at the source, but determined without regard
to any rules that limit the remuneration included in wages based on the nature
or location of the employment or the services performed. Notwithstanding the
foregoing, "Earnings" shall include any amount which is not includable in the
gross income of the Participant under section 125, 402(a)(8), 402(h) or 403(b)
of the Code pursuant to an Earnings reduction election. However, "Earnings"
shall not include any amounts paid after termination of employment (other than
base salary for the associate's final pay period paid in the normal course).
Effective January 1, 1989, a Participant's Earnings for any Year that may be
taken into account under the Plan shall not exceed $200,000 ($150,000 for Years
after 1993) or such greater amount as is permissible under section 401(a)(17) of
the Code. In determining the compensation of a Participant for purposes of this
limitation and any similar dollar limitation
3
<PAGE>
elsewhere in the Plan, the rules of section 414(q)(6) of the Code shall apply,
except that 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. If, as a result of the
application of such rules, the adjusted dollar limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's compensation as determined prior to the application of
this limitation.
1.13 "Employer" or "Employers" means, singly or collectively (as the case
may be), (i) the Company and (ii) any Affiliate which is designated as a
participating Employer by the Board and which adopts the Plan as provided in
Section 14.
1.14 "Employer Contributions" means Basic Contributions, Supplemental
Contributions and Matching Contributions.
1.15 "ERISA" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.16 "Family of Mutual Funds" means, as to (i) the Scudder Family of Funds
and (ii) the Vanguard Group of Investment Companies, respectively, all of the
mutual funds sponsored by Scudder or Vanguard (as the case may be) that are
available for investment under the Plan.
4
<PAGE>
1.17 "Insurance Contract" means any contract entered into by the Trustee,
as contract holder, and an insurance company designated by the Investment Review
Committee in accordance with Section 4.2.
1.18 "Matching Contributions" means the contributions made on behalf of a
Participant under Section 3.1.
1.19 "Matching Contributions Account" means the separate account maintained
on the books of the Plan with respect to the Participant's interest in the Fixed
Income Fund attributable to Matching Contributions made on his behalf.
1.20 "Normal Retirement Date" means the date on which the Participant
attains age 65.
1.21 "Participant" means a person who has become covered by the Plan as
provided in Section 2 hereof and whose participation has not terminated
thereunder.
1.22 "Participant Contributions Account" means the separate account
maintained on the books of the Plan with respect to the Participant's interest
in the Fixed Income Fund attributable to his participant contributions to the
Uniroyal Capital Accumulation Plan for Salaried Employees as in effect prior to
January 1, 1983 and contributions to the Uniroyal Capital Accumulation Plan for
Salaried Employees in lieu of the Uniroyal Savings Plan for Salaried Employees
as in effect prior to January 1, 1983.
5
<PAGE>
1.23 "Period of Severance" means a period beginning on the date a
Participant terminates Service, pursuant to the provisions of Section 1.27 and
ending on his next date of employment with the Company.
l.24 "Plan" means the Uniroyal Chemical Company, Inc. Retirement Reserve
Fund Plan as in effect from time to time. The Plan is hereby designated as a
profit sharing plan (but Employer Contributions due under the Plan shall be made
without regard to the Employers' current or accumulated profits).
1.25 "Retirement" means termination of employment by a Participant (other
than by death) (a) on or after his Normal Retirement Date, (b) on or after the
date on which he attains age 55 and has completed 10 years of Service, (c) by
reason of the permanent closing of a plant or a section thereof when the sum of
his age plus his years of Service equals 75 or more, or when the sum of his age
plus his years of Service equals at least 74, after sufficient time has passed
so that his added age brings such sum to 75, or (d) when the sum of his age plus
his years of Service equals 80 or more.
1.26 "Retirement Board" means the committee des- cribed in Section 10.1.
1.27 "Service" means employment as an Associate, subject to the following:
(a) An Associate's Service shall include the period from the later of
January 1, 1979 and the date of
6
<PAGE>
commencement of his employment as an Associate (treating any period of
employment with Uniroyal, Inc. prior to October 30, 1986 as employment as an
Associate) to the date of his termination of such employment, subject to the
provisions of this Section 1.27.
(b) An Associate shall not be treated as having terminated Service during
any period he is (i) on a leave of absence approved by the Employer, (ii) is
absent on account of illness but has not yet terminated employment on account of
Total and Permanent Disability, or (iii) is absent on account of service in the
United States Armed Forces, to the extent that service credit for such period is
required by applicable law; provided, however, that an Associate who is absent
under (i) above shall be considered to terminate Service on the first
anniversary of the date such absence begins or, if earlier, on such date as he
quits, is discharged, retires or dies. Unless the terms and conditions of the
absence provide otherwise, during a period of unpaid absence described above, an
Associate may not become a Participant of the Plan, nor may contributions be
made on his behalf to the Plan. During any period of paid leave of absence not
in excess of two years, an Associate shall be treated for purposes of the Plan
as though he were actively employed.
(c) Any Associate shall receive Service credit for any period of employment
with a predecessor to an Employer to the extent required by section 414(a)(1) of
the Code or under regulations prescribed pursuant to section 414(a)(2) of the
Code.
(d) Any period during which an individual is employed by an Affiliate that
is not an Employer (either before or after employment covered by the Plan) shall
be treated as employment as an Associate for all purposes of the Plan, except
that no person may become a Participant during any such period or have
contributions made on his behalf for any such period. If an Associate transfers
from employment with the Employer to employment with an Affiliate, his
employment hereunder will not be deemed terminated until such time as he shall
cease to be employed by any Affiliate. In the event that an Associate shall
during any period be employed at the same time by an Employer and one or more
Affiliates that are not Employers, he shall be treated for all purposes of the
Plan as though his employment during such period were entirely with the Employer
except that any compensation from the Affiliate shall be taken into account for
Plan purposes only to the extent specifically provided in the Plan.
7
<PAGE>
(e) Any period during which an individual is employed by a participating
Employer in a non-covered position (i.e., other than as an Associate), either
before or after employment covered by the Plan, shall be treated as employment
as an Associate for all purposes of the Plan, except that no person may become a
Participant or have contributions made on his behalf during any such period.
(f) Effective January 1, 1987, in the case of any person who is a "leased
employee" of an Employer or an Affiliate, the entire period (whether before or
after January 1, 1984) during which the individual performed services for the
Employer or an Affiliate shall be treated in the same manner as a period of
employment with an Affiliate other than an Employer, assuming such period is not
being taken into account under any other provision of the Plan.
A person who is performing services for an Employer (and is not a
common-law employee of the Employer or an Affiliate) shall be considered a
"leased employee" if:
(i) such services are provided pursuant to an agreement between the
Employer and any other entity (hereinafter referred to as the "leasing
organization"),
(ii) such person has performed the services for the Employer or an
Affiliate (or a related company within the meaning of section 144(a)(3) of
the Code) on a substantially full-time basis for a period of at least one
year,
(iii) such services are of a type historically performed, in the
business field of the Employer, by employees.
Notwithstanding the foregoing, a person shall not be considered a leased
employee if (A) he is covered by a plan maintained by the leasing organization
that constitutes a safe harbor plan under section 414(n)(5) of the Code and (B)
leased employees do not constitute more than 20 percent of the Employer's
non-highly compensated work force. In applying the provision of this
subparagraph (f), the Employer may rely upon a written certification by the
leasing organization as to whether an individual is covered by a plan of the
type described.
(g) A Participant's number of years of Service shall equal the total number
of calendar months during which he has any Service divided by 12.
8
<PAGE>
1.28 "Supplemental Contributions" means contributions made by an Employer
on behalf of a Participant under Section 3.3.
1.29 "Supplemental Contributions Account" means the separate account
maintained for a Participant on the books of the Plan with respect to the
Participant's interest in the Plan attributable to Supplemental Contributions
made on his behalf. Records shall be maintained as to the portion of a
Participant's Supplemental Contributions Account invested in mutual fund shares
and the portion invested in the Common Stock Fund.
1.30 "Total and Permanent Disability" means a physical or mental injury or
disorder as a result of which a Participant becomes entitled to long-term
disability benefits under a long-term disability benefits program maintained by
his Employer, with any such Participant's employment being considered to
terminate on account of Total and Permanent Disability on the first day of the
month next following the completion of 24 months of long-term disability benefit
payments to him.
1.31 "Trust Agreement" means the agreement entered into between the Company
and the Trustee, as provided for in Section 4.4, as the same may be amended from
time to time.
1.32 "Trust" or "Trust Fund" means all the assets held under the Plan by
the Trustee.
9
<PAGE>
1.33 "Trustee" means the trustee or trustees selected by the Investment
Review Committee which may at any time be acting as Trustee under the Trust
Agreement.
1.34 "Valuation Date" means the close of business on the last business day
of each month.
Notwithstanding anything to the contrary elsewhere in the Plan, the
following rules shall apply:
(i) Where an amount is to be credited to a Participant's Supplemental
Contributions Account as of a specified Valuation Date, such credit shall
occur upon the actual investment of such amount in the applicable mutual
fund or the Common Stock Fund, as the case may be, in accordance with the
regularly established accounting procedures of such investment fund.
(ii) Where a distribution or withdrawal is to be made from a
Participant's Supplemental Contributions Account as of a specified
Valuation Date, the Participant's Supplemental Contributions Account shall
be adjusted upon the actual payment of such amount in accordance with the
regularly established accounting procedures of the investment fund or funds
involved, and if a distribution or withdrawal is to be based on a value of
a Participant's Supplemental Contributions Account as of a specified
Valuation
10
<PAGE>
Date, the amount of such distribution or withdrawal from the Participant's
Supplemental Contributions Account shall be based on the actual value of
such Account on the date of such distribution or withdrawal.
1.35 "Year" means the Plan year, which shall be the calendar year.
11
<PAGE>
SECTION 2
Eligibility and Participation
2.1 Participation. Each person who on December 31, 1994, was a participant
in the Uniroyal Chemical Company Retirement Reserve Fund Plan shall continue as
Participant hereunder.
Each other person who is or becomes an Associate on or after January 1,
1995, shall become a Participant in the Plan as of the later of (a) January 1,
1995, and (b) the first day of the month coincident with or next following his
completion of one complete calendar month of service (except that (i) each
person who becomes an Associate of Gustafson, Inc. after January 1, 1995 shall
become a Participant in the Plan as of the first day of the month coincident
with or next following his completion of one year of service, (ii) the rules of
Appendix B shall apply with respect to Associates (including Gustafson
associates) who are not regularly employed on a full-time basis and (iii) by
written action, the Chairman of the Retirement Board may provide for a shorter
service requirement than would otherwise apply, or eliminate any service
requirement, as to any group of persons who become Associates in connection with
an acquisition by an Employer, but such written action shall not apply to
persons described in (ii) above unless it shall explicitly so provide).
12
<PAGE>
2.2 Resumption of Participation after Suspension. If a Participant whose
active participation in the Plan has been suspended in accordance with Section
1.27 during a period of employment in a non-covered status or with an Affiliate
again becomes an Associate, he may resume active participation in the Plan as of
the date of his resumption of Associate status.
2.3 Termination of Participation. The participation of a Participant shall
cease at such time as neither he nor his Beneficiary is entitled to any benefits
under the Plan.
If a person retires or otherwise terminates employment and is not
reemployed by an Employer thereafter, the rights of such person, and his
beneficiaries and others claiming rights under the Plan in respect of him, to
retirement or other benefits under the Plan shall be governed by the applicable
provisions of the Plan as in effect on or before the date such person retired or
terminated employment, except (i) as otherwise required by law, (ii) to the
extent the provisions of the Plan specifically provide otherwise or (iii) to the
extent the provisions relate to the investment of Plan assets.
13
<PAGE>
SECTION 3
Employer Contributions
3.1 Matching Contributions. Each Employer (other than Gustafson, Inc.)
shall contribute as a Matching Contribution to the Plan, on behalf of each
Participant who is an Associate of such Employer, an amount equal to 33-1/3% of
the Supplemental Contributions made on behalf of the Participant in each pay
period that are not in excess of 6% of his Earnings.
3.2 Basic Contributions. Each Employer shall contribute as a Basic
Contribution to the Plan, on behalf of each Participant who is an Associate of
such Employer, an amount equal to 4% (2%, if such Associate is a participant in
the Uniroyal Chemical Company, Inc. Retirement Plan B) of the Participant's
Earnings in each pay period; provided, however, that Basic Contributions made on
behalf of a Participant who is an Associate of Gustafson, Inc. shall be an
amount equal to 5% of such Participant's earnings in each pay period.
3.3 Supplemental Contributions. A Participant may elect to have his
Earnings for each pay period reduced by a whole percentage thereof, in order to
have Supplemental Contributions made on his behalf by his Employer. The maximum
amount of Supplemental Contributions permitted under the Plan shall be
established from time to time by the Retirement Board; such amount shall be a
uniform percentage
14
<PAGE>
for all Participants except that a lower percentage may be designated for
Associates who are highly compensated employees (as defined in Part B of Section
3.9). Each Employer shall make a Supplemental Contribution for each pay period,
on behalf of each of its Associates who has elected an Earnings reduction
hereunder, in the same amount as the Associate's reduction in Earnings for such
pay period.
An Earnings reduction election shall be made by written notice filed with
the Retirement Board during the annual election period in the final quarter of
each Year (which period shall be determined by the Retirement Board) and shall
be effective January 1 of the following Year; provided, however, that an
Associate who becomes a Participant at any time may file such notice with the
Retirement Board during the first month in which he is a Participant in the
Plan, to be effective as of the first day of the month coincident with or next
following the date of such notice is filed. Any such reduction shall be
accomplished through a ratable reduction in the Associate's Earnings for each
payroll period the election is in effect.
In the event that, for administrative reasons, actual Earnings reductions
for any Year cannot be commenced in the payroll period in which an election is
to become effective, any reductions missed shall be made up through a pro rata
increase in the remaining reductions to be made during the Year. The amount of
such increase shall be based on the
15
<PAGE>
assumption that the Associate will continue to be employed as an Associate
during the remainder of the Year; if such employment in fact terminates during
the Year, there will be no further make-up of such missed reductions.
3.4 Change in Amount of Supplemental Contributions. A Participant may
increase or decrease the rate of his Supplemental Contributions (within the
limits set forth by the Retirement Board pursuant to Section 3.3), effective as
of the beginning of any calendar quarter, by written notice filed with the
Retirement Board on the Appropriate Form no later than the 15th day of the next
preceding month. Except as provided herein and in Section 3.5, no change in the
rate of Supplemental Contributions may be made.
3.5 Suspension of Supplemental Contributions. A Participant may elect to
suspend his Supplemental Contribu- tions by written notice filed with the
Retirement Board on the Appropriate Form at least 30 days (or such shorter
period as the Retirement Board may permit by uniform rule) prior to the first
day of the payroll period in which such suspension is to be effective. Such
Participant may thereafter resume making Supplemental Contributions as of the
beginning of any calendar quarter by filing written notice with the Retirement
Board on the Appropriate Form no later than the 15th day of the next preceding
month.
3.6 Additional Basic Contributions. In the case of a Participant (other
than an Associate of Gustafson,
16
<PAGE>
Inc.) who was employed by Uniroyal, Inc. before January 1, 1979 and who (i) has
not had a one year Period of Severance since such date and (ii) is not (and has
not been since January 1, 1984) in the Highly-Paid Group (as defined in Section
3.9(B)), each Employer shall contribute, as an additional Basic Contribution to
the Plan on behalf of each such Participant who is an Associate of such
Employer, an amount equal to his Earnings in each pay period multiplied by a
percentage based upon the number of years of "credited service" (with partial
years of at least 6 months treated as a whole year) the Participant had under
the Uniroyal, Inc. Retirement Plan B as of December 31, 1978 or would have had
if he had been a participant in such plan from the date of his employment by
Uniroyal, Inc. to December 31, 1978, determined in accordance with the following
table:
Years of Additional
Credited Service under Basic Contributions
Uniroyal, Inc. Retirement Plan B Percentage
-------------------------------- -------------------
1 .1%
2 .2%
3 .3%
4 .4%
5 .5%
6 .6%
7 .7%
8 .8%
9 .9%
10 1.0%
11 1.2%
12 1.4%
13 1.6%
14 1.8%
15 2.0%
16 2.2%
17 2.4%
18 2.6%
19 2.8%
17
<PAGE>
20 3.0%
21 3.2%
22 3.4%
23 3.6%
24 3.8%
25 4.0%
26 4.2%
27 4.4%
28 4.6%
29 4.8%
30 or more 5.0%
3.7 Payment and Crediting of Contributions under Sections 3.1, 3.2, 3.3 and
3.6. Amounts due as Employer Contributions under Sections 3.1, 3.2, 3.3 and 3.6
for any pay period shall be remitted to the Trustee as soon as practicable after
the end of the calendar month in which the paycheck is issued for such pay
period. Amounts due under Sections 3.2 and 3.6 shall be credited to the Basic
Contributions Account of the Participant, and amounts due under Section 3.1
shall be credited to the Matching Contributions Account of the Participant, as
of the Valuation Date for such month, and amounts due as Supplemental
Contributions on behalf of a Participant shall be credited to his Supplemental
Contributions Account upon their investment in mutual fund shares or Common
Stock in accordance with his investment election.
3.8 Limitation on Employer Contributions. Notwithstanding the foregoing
provisions of this Section 3, the contributions made by any Employer hereunder
for any Year shall in no event exceed the amount deductible by it for Federal
income tax purposes for such Year.
3.9 Limitations with Respect to Supplemental Contributions. Notwithstanding
the foregoing provisions of
18
<PAGE>
this Section 3, the following limits shall apply to Supplemental Contributions
under the Plan.
A. Dollar Limit. The total amount of Supplemental Contributions contributed
on behalf of any Participant for any calendar year shall not exceed $9,240 (or
such other amount as may be the maximum annual amount permitted under section
402(g) of the Code or other applicable law for such calendar year), less any
amount previously contributed or to be contributed during such calendar year as
elective deferrals pursuant to section 401(k) of the Code to another profit
sharing or stock bonus plan maintained by an Employer or an Affiliate during
such calendar year. Any Earnings reduction election made by a Participant shall
be cancelled to the extent necessary to conform to such limit on the maximum
amount of Supplemental Contributions. The amount as to which such reduction
election is cancelled shall be paid to the Participant in cash.
If, despite the foregoing, the aggregate elective deferrals pursuant to
section 401(k) of the Code contributed during any calendar year for any
Participant under the Plan and under other profit sharing or stock bonus plans
maintained by an Employer or an Affiliate nevertheless exceed the maximum dollar
amount permitted under section 402(g) of the Code, the amount of any such excess
for the calendar year shall be distributed to the Participant from such plans no
later than April 15 of the next following
19
<PAGE>
calendar year. If the Participant shall have made such contributions to more
than one such plan, such distribution shall be made on a pro rata basis from the
Plan and each such other plan, unless the Participant notifies the Retirement
Board, in a notarized writing not later than March 1 following the close of the
calendar year, that such distribution should be made from the Plan and each such
other plan in some other proportion. In any case of excess deferrals as
described above, the Participant shall be deemed to have notified the Plan that
excess deferrals have been contributed on his behalf and shall be deemed to have
designated such deferrals as excess deferrals.
In addition, if a Participant notifies the Retirement Board in a notarized
writing not later than March 1 following the close of the calendar year, that
more than the maximum dollar amount permitted under section 402(g) has been
contributed as Supplemental Contributions on his behalf for such year as a
result of his participation in a qualified retirement plan of another employer
and he designates the amount which constitutes an excess deferral under the
Plan, the amount of any such excess Supplemental Contributions to the Plan for
the calendar year shall be distributed to the Participant from his Accounts not
later than April 15 of the next following calendar year.
Any amount to be distributed from the Plan for any calendar year in
accordance with the foregoing provisions of this Part A shall be adjusted to
reflect gain or loss during
20
<PAGE>
such calendar year considered allocable to the excess Supplemental Contribution,
but not gain or loss since the end of such calendar year. For this purpose, the
gain or loss considered allocable to an excess Supplemental Contribution shall
equal the total net gain or loss for the calendar year in the Participant's
Supplemental Contributions Account, multiplied by a fraction the numerator of
which is the amount of the Participant's excess Supplemental Contributions for
the calendar year and the denominator of which is the sum of the aggregate
balance in such Account at the beginning of such calendar year plus the
aggregate of all Supplemental Contributions made to the Participant's Accounts
for such calendar year.
The amount of excess Supplemental Contributions that is to be distributed
hereunder to a Participant from his Supplemental Contributions Account with
respect to any calendar year shall be reduced by the amount of any excess
contributions previously distributed to such Participant under Part B of this
Section 3.9 for such calendar year. In the event any such reduction shall be
applicable, to the extent required by Treasury Regulations issued under section
402(g) or 401(k) of the Code, such prior distribution of excess Supplemental
Contributions under Part B shall be treated as though it had been a distribution
of excess Supplemental Contributions under this Part A.
Any Matching Contributions that are made with respect to any Supplemental
Contributions distributed
21
<PAGE>
hereunder shall be forfeited as of December 31 of the calendar year for which
they were made. Such Matching Contributions shall be adjusted to reflect gain or
loss in a manner comparable to the procedure described above. For purposes of
determining whether Matching Contributions must be forfeited, in connection with
a distribution of Supplemental Contributions for any period under this Section
3.9(A) or under Section 3.9(B), it shall be assumed that Matching Contributions
for such period related to Supplemental Contributions for the Participant
remaining in the Plan, to the extent thereof.
B. Deferral Percentage Limit. In no event shall an Employer make
Supplemental Contributions for Participants for any Year that would result in a
violation of the deferral percentage limitation set forth below. The deferral
percentage for eligible Associates who are "highly compensated employees" (the
"Highly-Paid Group") shall not exceed the greater of (a) or (b) below:
(a) the deferral percentage for the eligible Associates who are not in
the Highly-Paid Group, times 1.25, or
(b) the deferral percentage for the eligible Associates who are not in
the Highly-Paid Group, times 2.0, but only if the deferral percentage for
the eligible Associates who are in the Highly-Paid Group does not exceed
the deferral percentage for
22
<PAGE>
eligible Associates who are not in the Highly-Paid Group by more than 2.0
percentage points.
The deferral percentage for each of the above groups of eligible Associates
for any Year shall be the average of the ratios, calculated separately for each
eligible Associate in the particular group, of:
(i) the aggregate amount of Basic Contributions under Section 3.2 (so
long as such Contributions satisfy the requirements of section
1.401(k)-1(b)(5) of the Treasury Regulations) and Supplemental
Contributions paid to the Plan on his behalf for such Year, to
(ii) the eligible Associate's "compensation" paid by the Employer and
its Affiliates for such Year (for those periods during which he is an
eligible Associate).
In applying the foregoing limitation at any time with regard to a
particular Year, to the extent required by applicable Treasury Regulations
issued under section 402(g) or 401(k) of the Code, Supplemental Contributions
for such Year previously distributed to a Participant pursuant to Part A of this
Section 3.9, including Supplemental Contributions considered to have been thus
distributed pursuant to the terms of such Part A, shall nevertheless be taken
into account without regard to the fact that they have been distributed, except
that Supplemental Contributions thus distributed pursuant to Part A to a
Participant who is
23
<PAGE>
not in the Highly-Paid Group in order to conform to the requirements of section
401(a)(30), i.e., excess deferrals pursuant to section 401(k) of the Code
contributed to plans maintained by an Employer or an Affiliate, shall not be
taken into account for purposes of the foregoing limitation.
Notwithstanding the foregoing, if an Employer aggregates two or more plans
for the purpose of satisfying section 410(b) of the Code (other than section
410(b)(2)(A)(ii)), such plans shall be treated as one plan for purposes of the
deferral percentage limitation described above.
For purposes of this Part B, "compensation" shall mean Earnings as defined
in Section 1.12. For purposes of this Section, the term "highly compensated
employee" shall be defined as provided in section 414(q)(1) through (11) of the
Code. Notwithstanding the foregoing, if elected by the Company for any Year, the
term "highly compensated employee" shall be defined for such Year by
substituting $50,000 for $75,000 in section 414(q)(1)(B) and by disregarding
section 414(q)(1)(C); provided, however, that the foregoing election shall not
be available for a Year unless the Company, itself or through its Affiliates,
maintained significant business activities and employed associates in at least
two significantly separate geographic areas at all times during such Year.
24
<PAGE>
The following special rules shall apply in calculating the deferral ratio
for any eligible Associate who is a "highly compensated employee":
(i) If any such Associate is eligible to have contributions under
section 401(k) of the Code made on his behalf under any other plan
maintained by an Employer or an Affiliate for any Year, such deferral ratio
shall be calculated for him for such Year as though such contributions made
on his behalf under any such other plan (and any other employer
contributions required to be taken into account under such other plan in
applying the deferral rate requirement under section 401(k)(3) of the Code)
were made under this Plan. In addition, such deferral ratio shall be
calculated for such Year as though any compensation required to be taken
into account in applying the test under section 401(k)(3) of the Code under
such other plan that is not otherwise taken into account under this Part B
were paid by the Employer to such Associate.
(ii) In determining the above ratio for any Associate in the Highly
Paid Group, the Basic Contributions under Section 3.2, Supplemental
Contributions and compensation of such Associate shall include such
Contributions and compensation of all of the Associate's "family members"
covered
25
<PAGE>
under Code section 414(q)(6), with such family group to be considered a
single highly compensated employee for purposes hereof. Such family members
shall be disregarded in determining the deferral percentage for the
eligible Associates who are not in the Highly-Paid Group. For purposes of
the foregoing, (i) Contributions shall include contributions required to be
taken into account in applying the deferral rate requirement under Code
section 401(k)(3) under any other plan of the Employer or its Affiliates
and (ii) compensation shall include compensation paid by an Affiliate of an
Employer.
The Retirement Board shall reduce, on a prospective basis, the maximum rate
of Supplemental Contributions that may be elected by Participants who are in the
Highly-Paid Group to the extent necessary to ensure that the foregoing
limitations set forth in this Section 3.9 are not exceeded. In the event that as
a result of any such decrease in the maximum permissible rate of Supplemental
Contributions, an Earnings reduction election made by a Participant cannot be
fully effectuated during any Year, the Participant's Earnings reduction election
shall be cancelled to the extent necessary to conform to such decrease and the
amount as to which such reduction election is cancelled shall be paid to him in
cash.
26
<PAGE>
No Participant may elect a rate of Earnings reduction for any Year which
the Retirement Board determines is likely to result in a deferral percentage
that exceeds the limitations of this Section 3.9. To enforce this requirement,
at the beginning of the first quarter and the beginning of the fourth quarter of
each Year (or more frequently), the Retirement Board shall review the Earnings
reduction elections made for such Year to determine whether the deferral
percentage limitations of this Section 3.9 will be satisfied.
To the extent that despite the foregoing, any Supplemental Contribution is
made for a Participant in violation of the deferral percentage limit set forth
above, such excess contributions, determined in accordance with section
1.401(k)-1(f)(2) of the Treasury Regulations, and taking into account any
applicable rules relating to family aggregation (in accordance with section
1.401(k)-1(f)(5)(ii) of the Treasury Regulations), shall be distributed by the
Plan to the Participants to the extent practicable by March 15th of the Year
next following the Year in which such excess contributions were made, and in no
event later than December 31st of the Year next following the Year for which
such excess contributions were made; provided, however, that to the extent
required under applicable Treasury Regulations issued under section 401(k) of
the Code, any distribution required to be made to a Participant under this
paragraph shall be reduced by any excess Supplemental Contributions
27
<PAGE>
previously distributed, including Supplemental Contributions considered to have
been previously distributed, to the Participant pursuant to Part A of this
Section 3.9.
The amount distributed to any Participant pursuant to the foregoing with
regard to excess contributions for any Year shall be adjusted to reflect gain or
loss during such Year considered allocable to such excess Supplemental
Contributions, but not gain or loss since the end of such Year. For this
purpose, the gain or loss considered allocable to such excess Supplemental
Contributions shall equal the total net gain or loss for the Year in the
Participant's Supplemental Contributions Account, multiplied by a fraction the
numerator of which is the amount of the Participant's excess Supplemental
Contributions for the Year and the denominator of which is the sum of the
aggregate balance in such Account at the beginning of such Year plus the
aggregate of all Supplemental Contributions made to the Participant's Account
for such Year. Any amounts distributed to a Participant pursuant to this Section
3.9, including Part A hereof, shall be taken pro rata from a Participant's
investment funds under the Plan. Any Matching Contributions that were made in
respect of any Supplemental Contributions required to be thus distributed,
adjusted for gain or loss in a manner comparable to the procedure described
above, shall be forfeited as of December 31 of the Year for which they were
made.
28
<PAGE>
The deferral percentages for eligible Associates in the Highly-Paid Group
and for eligible Associates who are not in the Highly-Paid Group shall be
determined in accordance with any requirements established by applicable
Treasury Regulations; and the foregoing provisions of this Part B shall be
interpreted and administered in accordance with such Treasury Regulations.
3.10 Contribution Percentage Limitation for Matching Contributions.
Notwithstanding the foregoing, in no event shall Matching Contributions be made
on behalf of Participants for any Year in violation of the special limitations
regarding contribution percentages set forth below.
The contribution percentage for eligible Associates in the Highly-Paid
Group shall not exceed the greater of (a) or (b) below:
(a) the contribution percentage for eligible Associates who are not in
the Highly-Paid Group, times 1.25, or
(b) the contribution percentage for eligible Associates who are not in
the Highly-Paid Group, times 2.0, but only if the percentage for eligible
Associates in the Highly-Paid Group does not exceed the contribution
percentage for eligible Associates who are not in the Highly-Paid Group by
more than 2.0 percentage points.
29
<PAGE>
Notwithstanding the foregoing, if the deferral percentage for eligible
Associates in the Highly-Paid Group under Part B of Section 3.9 satisfies the
alternative set forth in clause (b) in the first paragraph of such Part B but
does not satisfy clause (a) set forth therein, and the contribution percentage
for eligible Associates in the Highly-Paid Group satisfies clause (b) above but
does not satisfy clause (a), a special limitation shall apply. Under this
limitation, the sum of the deferral percentages under Part B of Section 3.9 for
the eligible Associates who are in the Highly-Paid Group plus the contribution
percentages for such eligible Associates under this Section 3.10 may not exceed
the greater of:
(i) the maximum deferral percentage permissible for such Associates
under clause (a) in such Part B plus the maximum contribution percentage
permissible for such Associates under clause (b) above, and
(ii) the maximum deferral percentage permissible for such Associates
under clause (b) in such Part B plus the maximum contribution percentage
permissible for such Associates under clause (a) above.
Any restriction in contributions required to comply with the foregoing special
limitation, or to make such special limitation inapplicable, shall be applied
under Part B of Section 3.9 (rather than under this Section 3.10) and shall
30
<PAGE>
be applied only to Associates who are eligible under the Plan for both Matching
Contributions under Section 3.1 and Supplemental Contributions under Section
3.3.
The contribution percentage for a specified group of Associates for a Year
shall be the average of the ratios, calculated separately, for each Associate in
such group of:
(i) the aggregate amount of Matching Contributions made on his behalf
for such Year, to
(ii) the Associate's compensation paid by the Employer and its
Affiliates for such Year, for periods during which he is an eligible
Associate.
Notwithstanding the foregoing, if an Employer aggregates two or more plans
for the purpose of satisfying section 410(b) of the Code, other than section
410(b)(2)(A)(ii), such plans shall be treated as one plan for purposes of the
contribution percentage limitation described above.
The following special rules shall apply in calculating the contribution
ratio for any eligible Associate who is a "highly compensated employee":
(i) If any such Associate is eligible to make participant
contributions or have matching employer contributions made for him under
any other plan maintained by the Employer or an Affiliate for any Year,
such ratio shall be calculated for him for such Year as though the
participant contributions made by him and matching
31
<PAGE>
employer contributions made on his behalf under any such other plan were
made under this Plan. In addition, such ratio shall be calculated for such
Year as though any compensation required to be taken into account in
applying the test under section 401(m) of the Code by such other plan that
is not otherwise taken into account under this Section 3.10 were paid by
the Employer to such Associate.
(ii) In determining the above ratio for any Associate in the
Highly-Paid Group, the Matching Contributions and the compensation of such
Associate shall include the Matching Contributions and compensation of all
of the Associate's "family members" covered under Code section 414(q)(6),
with such family group to be considered a single highly compensated
employee for purposes hereof. Such family members shall be disregarded in
determining the contribution percentage for eligible Associates who are not
in the Highly-Paid Group. For purposes of the foregoing, (i) Matching
Contributions shall include participant contributions and matching employer
contributions under any other plan of the Employer or its Affiliates and
(ii) compensation shall include compensation paid by any Affiliate of an
Employer.
32
<PAGE>
In determining the above ratios, Supplemental Contributions for all
Participants shall be taken into account, to the extent permissible under
section 401(m) of the Code and applicable Treasury Regulations, if this will
reduce the extent of any failure to satisfy the above contribution percentage
requirements, including the special limitation set forth above.
If the contribution percentage for eligible Associates in the Highly-Paid
Group would otherwise be more than the amount permitted under the above
restrictions, the level of Matching Contributions on behalf of such Associates
shall be reduced accordingly on a prospective basis.
No Matching Contributions shall be made which the Retirement Board
determines would result in the limitations of this Section 3.10 being exceeded.
To enforce these requirements, at the beginning of the first quarter and the
beginning of the fourth quarter of each Year (or more frequently), the
Retirement Board shall review the levels of Supplemental Contributions being
matched for such Year to determine whether the special limitations regarding
contribution percentages will be satisfied.
To the extent that despite the foregoing a violation of this Section 3.10
occurs, to the extent necessary to correct such violation, Matching
Contributions that were made with regard to Supplemental Contributions, adjusted
for gain or loss in the manner described below, shall be distributed to
Participants, in accordance with
33
<PAGE>
section 1.401(m)-1(e)(2) of the Treasury Regulations and taking into account
applicable rules relating to family aggregation, to the extent vested and shall
be forfeited to the extent not vested by March 15 of the Year next following the
Year for which such Contributions were made, to the extent practicable, and in
no event later than December 31 of the Year next following the Year for which
such Contributions were made.
The amount distributed to a Participant under the next preceding paragraph
with regard to excess contributions for any Year shall be adjusted to reflect
the gain or loss during such Year considered allocable to such excess Matching
Contributions, but not the gain or loss since the end of such Year. For this
purpose, the gain or loss considered allocable to excess Matching Contributions
shall equal the total net gain or loss for the Year in the Participant's
Matching Contributions Account, multiplied by a fraction the numerator of which
is the amount of the Participant's excess Matching Contributions for the Year
and the denominator of which is the sum of the aggregate balance in such Account
at the beginning of such Year plus the aggregate of all Matching Contributions
made to the Participant's Account for such Year.
The contribution percentages for eligible Associates in the Highly-Paid
Group and for eligible Associates who are not in the Highly-Paid Group shall be
determined in accordance with any requirements established
34
<PAGE>
by applicable Treasury Regulations. The foregoing provisions of this Section
3.10 shall be interpreted and administered in accordance with such Treasury
Regulations.
3.11 Statutory Limitations. Notwithstanding any provision of the Plan to
the contrary, the maximum "Annual Addition", as hereinafter defined, to a
Participant's Accounts during any Year shall not exceed the lesser of:
(i) 25% of the Participant's "gross compensation" for the Year; or
(ii) $30,000 (or such greater amount as is permissible under section
415(c)(1)(A) of the Code).
The Annual Addition for a Participant shall be the sum of:
(1) Employer Contributions allocated to the Accounts of such
Participant for the Year, and
(2) for purposes only of the dollar limitation specified in clause
(ii) above, amounts allocated to an individual medical account (as defined
in section 415(1)(2) of the Code) which is part of a defined benefit plan
maintained by an Employer, and amounts attributable to post-retirement
medical benefits that are allocated to the separate account of a key
employee (as defined in section 419A(d)(3)) under a welfare benefit fund
(as defined in section 419(e)) maintained by an Employer or an Affiliate.
35
<PAGE>
If any Participant hereunder is also a participant in another retirement
plan which (a) is a "defined contribution" plan within the meaning of section
414(i) of the Code and (b) is maintained by an Employer or an Affiliate, the
foregoing limitations shall be applied on an aggregate basis. The term
"Affiliate" shall be modified for purposes of this Section 3.11 in accordance
with section 415(h) of the Code. Any reduction in contributions under this Plan
and any such other plan that is required to satisfy such limitations shall first
be made in such other plan, to the extent possible.
If any Participant hereunder is also a member of another employee
retirement plan which is a "defined benefit" plan within the meaning of section
414(j) of the Code maintained by an Employer or an Affiliate, any reduction in
benefits required to conform to the limits imposed by section 415(e) of the Code
shall be made in such defined benefit plan.
Notwithstanding anything elsewhere in the Plan to the contrary, any
contributions distributed to a Participant in accordance with Part A of Section
3.9 in order to comply with the limitations imposed by such Section shall not be
taken into account as an Annual Addition for the purposes of this Section 3.11.
The Retirement Board shall adopt such uniform rules as it shall deem necessary,
in accordance with applicable Treasury Regulations, with regard to coordination
of the provisions concerning distribution of Supplemental
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Contributions under Part B of Section 3.9 and Matching Contributions under
Section 3.10 with the provisions of this Section 3.11.
For purposes of this Section 3.11, the term "gross compensation" for any
Year shall mean Earnings as defined in Section 1.12, except that "gross
compensation" shall not include any amounts excludable from gross income under
sections 125, 402(a)(8), 402(h) or 403(b) of the Code.
If as of the end of any pay period the Annual Addition for the Year for any
Participant would otherwise exceed the maximum permitted under this Section
3.11, the Supplemental Contributions which would otherwise be made on behalf of
the Participant for the pay period in which the applicable maximum would be
exceeded shall be decreased to the extent necessary, as determined by the
Retirement Board, to conform to such limitations. Any amount of Supplemental
Contributions which cannot be contributed to the Plan as a result of any such
reduction or cancellation shall be paid to the Participant directly in cash. If
any of such Supplemental Contributions would have been matched, the Matching
Contributions made on behalf of the Participant shall be reduced accordingly.
Any Basic or Additional Basic Contributions for the Year shall be allocated
to a Participant's Accounts only to the extent such allocation will not result
in an Annual Addition in excess of the amount permitted under this Section 3.11.
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Subject to applicable Treasury Regulations, distributions of Supplemental
Contributions may be made to the extent determined by the Retirement Board to be
necessary to conform to the limitations imposed under this Section 3.11.
3.12 Return of Employer Contributions. Notwithstanding the foregoing or any
provision of the Plan to the contrary, to the extent permitted by applicable
government regulations, upon the Employer's request, (a) a contribution made
under the Plan by the Employer which was made by a mistake of fact shall be
returned to the Employer within one year after the payment of the contribution,
and (b) a contribution made under the Plan by the Employer as to which a
deduction under section 404 of the Code is disallowed shall be returned to the
Employer within one year after such disallowance (to the extent disallowed). Any
contribution made under the Plan by the Employer is hereby specifically
conditioned upon the current deductibility of the contribution under section 404
of the Code and that, in accordance with Section 3.8, no contribution shall be
made under the Plan by the Employer that is not currently deductible under such
section 404. Any contribution to be returned to the Employer in accordance with
clause (a) or (b) above shall be adjusted before return to the Employer to
reflect investment losses, but not investment gains.
38
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SECTION 4
Investment of Contributions
4.1 Investment Funds. The Trust Fund shall con- sist of (a) an investment
fund to be known as the Fixed Income Fund which shall be invested as described
in Section 4.2; (b) investments in mutual fund shares made in accordance with
Section 4.3A; and (c) investments in Common Stock made in accordance with
Section 4.3B (the "Common Stock Fund").
4.2 Investment in the Fixed Income Fund. Basic Contributions and Matching
Contributions made on behalf of a Participant (and amounts credited to a
Participant's Basic Contributions Account as of January 1, 1990, pursuant to
Section 1.6) shall automatically be invested in the Fixed Income Fund. A
Participant's Participant Contributions Account shall also be invested in the
Fixed Income Fund. The assets of the Fixed Income Fund shall be invested in
Insurance Contracts that contain provisions for a guaranteed repayment of
principal to Participants (or on their behalf) plus interest at a specified
annual rate for a specified period (subject, in each case, to such restrictions
as may be provided in such Contracts), and contain such other provisions (not
inconsistent with the forgoing) as the Investment Review Committee and insurance
company shall consider appropriate. In addition, the assets of the Fixed Income
Fund may be invested in any group trust fund maintained by a bank, and managed
by the Trustee or an
39
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Investment Manager appointed by the Investment Review Committee in accordance
with Section 4.6, for the investment of assets of qualified retirement plans in
insurance contracts that contain provisions for guaranteed repayment of
principal plus interest at a specified period (and contain such other terms as
the Trustee or Investment Manager shall consider appropriate). Any such group
trust is hereby adopted as a part of this Plan to the extent that any such
assets of the Plan are invested therein.
Effective January 1, 1990, the assets of the Fixed Income Fund shall be
held and invested as a single fund including those assets held prior to January
1, 1990, in separate subfunds of the Fixed Income Fund.
Notwithstanding anything herein to the contrary, the Trustee in its
discretion may temporarily transfer from time to time, pending investment in
accordance with the foregoing provisions of this Section 4.2, any or all of the
cash assets of the Fixed Income Fund to any common or collective trust fund or
pooled investment fund maintained by the Trustee for the investment of assets of
qualified retirement plans; provided, however, that any cash assets thus
transferred shall be invested only in one or more special purpose investment
funds established from time to time for the purpose of providing a vehicle for
temporary investments of cash balances of participating trusts.
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4.3 Investment of Supplemental Contributions in Mutual Funds and the Common
Stock Fund.
Supplemental Contributions made on behalf of a Participant shall be
invested, at the election of the Participant, in shares of mutual funds or in
the Common Stock Fund. Each Participant shall direct the investment of
Supplemental Contributions made on his behalf in one or more of the mutual funds
determined by the Investment Review Committee to be available under the Plan or
in the Common Stock Fund, provided that, within a Family of Mutual Funds, a
Participant's Supplemental Contributions shall be invested in multiples of 25%.
A Participant may change his investment directions as to future contributions,
or may transfer his accumulated balances between investment funds within a
Family of Mutual Funds, at any time, in accordance with the procedures of the
applicable Family of Mutual Funds. A Participant may transfer his accumulated
balances between the Families of Mutual Funds in April and September of each
Year. The Common Stock Fund shall be deemed to be an investment fund (but not a
mutual fund) in the Family of Mutual Funds available for investment through the
Vanguard Group of Investment Companies, for purposes of the procedures
applicable to such Family of Mutual Funds, relating to investment directions,
changing investment directions for future contributions and transfers between
funds. Notwithstanding the foregoing, (i) no more than one transfer involving
the Common Stock Fund may be made within
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any 90-day period and (ii) transfers from any of the mutual funds into the
Common Stock Fund shall be permitted during the month of November, 1996.
A. Mutual Funds: From time to time, the Investment Review Committee will
designate which mutual funds within each Family of Mutual Funds are available.
B. Common Stock Fund: The Common Stock Fund will be invested entirely in
Common Stock of Crompton & Knowles Corporation. To the extent that contributions
to the Common Stock Fund are not made in shares of Common Stock, shares of
Common Stock shall be purchased by the Trustee from time to time out of funds
held by the Trustee under the Plan, to the extent and in such manner as shall be
permitted by ERISA, (i) on the open market at prevailing market prices, or (ii)
directly from Crompton & Knowles Corporation, if either treasury shares or
authorized but unissued shares are available for sale to the Trustee at no more
than the current market value. For purposes of this subsection, the current
market value of Common Stock shall mean, with respect to any day, the last
reported sales price of such stock on the New York Stock Exchange or, if Common
Stock is not listed on such exchange, on the principal national securities
exchange on which Common Stock is listed. Any purchase in accordance with (ii)
above shall be made only at the close of business on a day on which the current
market value of such stock can be determined. The Trustee may, at its
discretion, maintain a portion of the
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Common Stock Fund in cash or short-term investments to provide liquidity for
distributions, transfers or other plan activity.
Each Participant shall have the right to instruct the Trustee how to vote a
number of full shares of Common Stock equivalent to the entire interest held by
such Participant's Account in the Common Stock Fund as of the Valuation Date
next preceding the record date for any meeting of stockholders of Crompton &
Knowles Corporation. Upon timely receipt of instructions from the Participant as
to the manner of voting shares allocable to his Account, the Trustee shall vote
such shares in accordance therewith. All of the shares of such stock for which
no instructions are received shall be voted by the Trustee in a uniform manner
as a single block in accordance with the instructions received with respect to a
majority of such shares for which instructions are received.
In the event a tender or exchange offer shall be made for the outstanding
common stock of Crompton & Knowles Corporation, there shall be distributed to
each Participant a copy of any information to be distributed to shareholders of
Crompton & Knowles Corporation in connection with such offer, and each
Participant shall have the right to provide confidential instructions to the
Trustee as to the manner in which to respond to such offer with respect to a
number of full shares of Common Stock equivalent to the entire interest of such
Participant's Account in the Common Stock
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Fund as of the Valuation Date next preceding the date of such offer. Upon timely
receipt of such instructions, the Trustee shall tender such shares as and to the
extent so instructed. The Trustee shall not tender shares for which no
instructions are received. The Trustee shall allocate the proceeds from any
shares of Common Stock sold or exchanged in any tender or exchange offer to the
Accounts of those Participants who directed the Trustee to sell or exchange such
shares and shall invest such proceeds in accordance with the directions of each
such Participant.
The Company may suspend the purchase of Crompton & Knowles Corporation
Common Stock to comply with applicable Federal securities laws and, in this
event, amounts which would otherwise be used under the Common Stock Fund to
purchase Crompton & Knowles Corporation stock shall be invested in short-term
investments which the Trustee deems appropriate until the Company authorizes the
resumption of purchase of such stock.
C. General: The selection of a mutual fund or funds, or the Common Stock
Fund, for investment is the sole responsibility of each Participant. The fact
that various mutual funds and the Common Stock Fund are available to
Participants for investment under the Plan is not to be construed as a
recommendation for the allocation of amounts to a particular mutual fund or the
Common Stock Fund, nor shall the designation of any mutual fund or the Common
Stock Fund impose any liability on an Employer, its directors,
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officers or associates, the Trustee, the Retirement Board, the Investment Review
Committee or any Participant in the Plan. Subject to any applicable provisions
of law, each Participant assumes all risks connected with any decrease in the
market value of shares in the mutual funds he has selected for investment or in
the Common Stock Fund.
4.4 Establishment of Trust. For the purpose of funding the Plan, the
Company has entered into a Trust Agreement with the Trustee establishing a
Trust. Under the Trust Agreement, the Trustee is to take and keep custody of all
Plan assets held in the Trust, but is to have no discretionary responsibility
for or control over the investment or management of such assets (other than the
right to invest amounts allocated to the Fixed Income Fund within the provisions
of Section 4.2).
The Trustee may be removed at any time by the Board, in accordance with the
provisions of the Trust Agreement, and a new Trustee appointed.
The assets of the Trust shall be the sole source of payments to be made
under the Plan.
4.5 Investment Review Committee. The Investment Review Committee appointed
by the Board of Directors of the Company shall be responsible for reviewing the
investment performance of the Fixed Income Fund, the mutual funds and the Common
Stock Fund. In addition to any other duties allocated to it elsewhere in the
Plan, the Investment Review Committee shall receive and review all reports of
the
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Trustee, all insurance companies with which Fixed Income Fund assets are
invested and all mutual funds in which Participants' Supplemental Contributions
are invested, and shall report thereon to the Board.
The Investment Review Committee shall act by a majority of its members at
the time in office and such action may be taken either by a vote at a meeting or
in writing without a meeting. The Investment Review Committee may appoint or
employ such advisers or assistants as it deems necessary. The members of the
Investment Review Committee shall serve without compensation for their services
as such but the Company shall pay all expenses reasonably incurred by members of
such Committee in discharge of their duties and shall indemnify such Committee
and each member thereof to the full extent permitted by law and the by-laws of
the Company. Vacancies in the Investment Review Committee arising by
resignation, death, removal or otherwise shall be filled by the Board.
4.6 Investment Manager(s) for Fixed Income Fund. The Investment Review
Committee may appoint, as an Investment Manager for all or a portion of the
Fixed Income Fund, any person who is either (1) a bank, (2) an insurance company
or (3) an investment adviser, and who qualifies under section 3(38)(B) of ERISA.
Each such person shall become an Investment Manager for the Plan upon its
acknowledgment in writing that it is a fiduciary with respect to the Plan. If
any Investment Manager is appointed
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under this Section, such Investment Manager shall have exclusive responsibility
for the investment and management of such portion of the assets of the Fixed
Income Fund as shall be determined from time to time by the Investment Review
Committee (including the power to acquire and dispose of such assets). Each
Investment Manager shall exercise its fiduciary responsibilities with respect to
assets allocated to it, including without limitation any responsibility of
diversification imposed by ERISA, as if such assets allocated to it constituted
the entirety of the assets of the Fixed Income Fund; provided, however, that if
the Investment Review Committee shall establish restrictions and guidelines for
the investment and management of such assets that it shall be responsible for
insuring such restrictions and guidelines complying with diversification
requirements.
The Investment Review Committee may at any time remove any person serving
as an Investment Manager upon written notice to such person.
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SECTION 5
Vesting
5.1 Vesting. Except for his Matching Contributions Account, a Participant
who is an Associate on or after January 1, 1990 shall have fully vested rights
at all times to the value of his Accounts (including the value of his Basic
Contributions Account attributable to amounts transferred from his Capital
Accumulation Contributions Account as of January 1, 1990, if any).
A Participant's rights to the value of his Matching Contributions Accounts
shall vest in accordance with the following schedule:
================================================================================
Years of Service Vested Percent
- --------------------------------------------------------------------------------
Less than 2 0%
- --------------------------------------------------------------------------------
At least 2 but less than 3 33-1/3%
- --------------------------------------------------------------------------------
At least 3 but less than 4 66-2/3%
- --------------------------------------------------------------------------------
4 or more 100%
- --------------------------------------------------------------------------------
================================================================================
Notwithstanding the foregoing, a Participant's rights to his Matching
Contributions Accounts shall be fully vested upon (i) his reaching age 65 while
employed by the Employer, (ii) his termination of employment by reason of death,
(iii) his termination of employment on account of Total and Permanent
Disability, (iv) termination of the Plan or complete discontinuance of
contributions to the Plan, or
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(v) partial termination of the Plan, if such partial termination is applicable
to the Participant.
5.2 Forfeitures. If a Participant terminates employment other than by
reason of retirement, Total and Permanent Disability or death and he does not
have a fully vested interest under Section 5.1 above in his Matching
Contributions Account, the nonvested portion of such Account shall be forfeited.
Such forfeiture shall occur as of the fifth anniversary of his termination of
Service or, if earlier, as of the date his vested interest in the Plan is paid
to him.
The value of any amounts thus forfeited, or forfeited under Section 8.14,
by Participants shall be used as promptly as practicable to reduce future
Employer Contributions to be made by the Employers.
Notwithstanding the foregoing, if the Plan is terminated, or contributions
thereunder permanently discontinued, any amount not previously applied to reduce
Employer Contributions shall be allocated among all Participants in proportion
to their Earnings for the Year in which such termination or permanent
discontinuance occurs.
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SECTION 6
Accounts
6.1 Separate Accounts. The Retirement Board shall maintain for each
Participant the following separate accounts:
(a) a Participant Contributions Account,
(b) a Basic Contributions Account,
(c) a Supplemental Contributions Account,
(d) a Matching Contributions Account.
The Retirement Board shall also maintain any other accounts and/or records it
shall consider necessary for administration of the Plan, including a record of
additional Basic Contributions made in accordance with Section 3.6.
6.2 Valuation of Investment Funds and Account Balances. A Participant's
Supplemental Contributions Account interest in the Common Stock Fund shall be
represented by units in such Fund. The initial value of a unit at the time of
the initial payment of amounts into the Common Stock Fund shall be $10.00.
Thereafter, the value of a unit shall be redetermined on each date on which the
value of the mutual funds is determined, based upon the value of the Common
Stock Fund on such date and the number of outstanding units on such date. A
Participant's number of units shall be adjusted, in accordance with the rules
set forth in Section 1.34, to reflect contributions, withdrawals, distributions,
loans or loan repayments.
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Subject to the foregoing and the provisions of Section 1.34 in the case of
a Participant's Supplemental Contributions Account, the Accounts of each
Participant shall be adjusted to reflect contributions, withdrawals,
distributions, loans or loan repayments, income earned or accrued, expenses
payable from the Trust Fund and any increase or decrease in the value of Trust
Fund assets since the preceding Valuation Date.
The value of the Fixed Income Fund shall be determined by the Trustee on
the basis of market values as of each Valuation Date. Income earned or accrued,
expenses and any increase or decrease in the value of the Fixed Income Fund
since the preceding Valuation Date shall be proportionately credited to
Participant's Account balances in the Fixed Income Fund, based on the Account
balances in such investment fund as of the next preceding Valuation Date (after
all adjustments required as of such Valuation Date).
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SECTION 7
Withdrawals During Employment
7.1 Withdrawals After Age 59-1/2. A Participant who has reached age 59-1/2
may elect to withdraw, without a suspension penalty, all or any portion of the
vested value of his Accounts as of any Valuation Date that is at least 30 days
(or such shorter period as the Retirement Board may permit by uniform rule)
after the date the Appropriate Form is filed with the Retirement Board (or
within such other time as the Retirement Board determines in its sole discretion
is appropriate). Any withdrawal of a specific dollar amount elected by a
Participant under this Section 7.1 shall be made in the following order: (i)
from the value of his Participant Contributions Account, if any, (ii) from the
value of the Participant's Supplemental Contributions Account, (iii) from the
value of his Basic Contributions Account and (iv) from the vested value of his
Matching Contributions Account.
7.2 Hardship Withdrawals. Subject to the restrictions set forth below, a
hardship withdrawal may be made by a Participant from his Supplemental
Contributions Account by filing the Appropriate Form with the Retirement Board.
Any such withdrawal shall be permitted only on account of an immediate and heavy
financial need of the Participant and only in an amount necessary to satisfy
such financial need.
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The existence of an immediate and heavy financial need, and the amount
necessary to meet such need, will be determined by the Retirement Board in
accordance with the standards set forth below.
For purposes hereof, an immediate and heavy financial need shall be limited
to a need for funds for any of the following purposes:
(1) Unreimbursed medical expenses described in section 213(d) of the
Code incurred by the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in section 152 of the Code);
(2) Purchase (excluding mortgage payments) of a principal residence
for the Participant;
(3) Payment of tuition and related educational fees, and room and
board expenses, for the next 12 months of post-secondary education for the
Participant or his spouse, children or dependents;
(4) Prevention of the eviction of the Participant from his principal
residence or foreclosure on the mortgage on his principal residence; and
(5) Payment of funeral and other expenses incurred in connection with
the death of a member of the Participant's family, and similar emergency
expenses.
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A hardship withdrawal shall be considered to be necessary to meet such an
immediate and heavy financial need only under the following circumstances:
(1) the distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant (that cannot be satisfied by
distributions and/or non-taxable loans of the types described in clause (2)
below); and
(2) the Participant has obtained (or requested) all distributions
other than hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer or any Affiliate.
In the event of any hardship distribution to a Participant hereunder, such
Participant may not make Supplemental Contributions to the Plan, or after-tax or
salary reduction contributions to any other qualified or nonqualified plans of
deferred compensation maintained by the Employer or its Affiliates, during the
twelve calendar months immediately following the effective date of such hardship
withdrawal, and may not make Supplemental Contributions to the Plan, or salary
reduction contributions to any other tax-qualified plans maintained by the
Employer or its Affiliates, for the Participant's taxable year immediately
following the taxable year of the hardship withdrawal, in excess of the
applicable limit under section 402(g) of the Code for such next taxable year
less the
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amount of such Participant's Supplemental Contributions to the Plan and any
salary reduction contributions under any other tax-qualified plans maintained by
the Employer or its Affiliates for the taxable year of the hardship
distribution. A similar suspension shall apply if the Participant receives a
hardship withdrawal under any other tax-qualified plan maintained by an Employer
or any Affiliate in respect of which such suspension penalty applies under such
other plan.
The foregoing provisions shall be applied on a uniform and
nondiscriminatory basis and shall be subject to such changes as the Retirement
Board may deem to be necessary at any time to comply with Treasury Regulations
or other rules issued under section 401(k) of the Code.
The total amount withdrawn under this Section 7.2 may not exceed an amount
equal to the sum of (i) the value of his Supplemental Contributions Account on
December 31, 1988, plus (ii) the dollar amount of his Supplemental Contributions
for periods on and after January 1, 1989 under the Plan.
Any withdrawal under this Section 7.2 shall be made as of the Valuation
Date that is coincident with or next following the date the Retirement Board
determines that a hardship exists, with actual payment of the amount withdrawn
to be made as promptly as practicable after such Valuation Date.
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<PAGE>
7.3 General Rules. Notwithstanding anything to the contrary in this Section
7, all withdrawals by Participants shall be subject to the following conditions:
(i) A Participant may not replace any amounts withdrawn under this
Section 7.
(ii) Any suspension periods hereunder shall run concurrently.
(iii) Any amounts withdrawn under this Section 7 shall be paid to the
Participant in cash (except that, at the Participant's election,
distributions from the Common Stock Fund may be made in kind).
(iv) Any withdrawal of a portion of a Participant's Supplemental
Contributions Account shall be made from the Common Stock Fund and/or the
mutual fund or funds specified by the Participant.
(v) A Participant may not withdraw from his Accounts any amount that
is invested in a loan as described in Section 16, except in the case of a
Participant who is making a withdrawal of his entire interest in the Plan.
(vi) In the event a Participant shall make a withdrawal under Section
7.1 from Accounts that are only partially vested, his remaining interest in
such Accounts for purposes of any subsequent
56
<PAGE>
withdrawal, distribution or loan shall be adjusted, in accordance with
applicable regulations under section 411 of the Code, to reflect such
earlier withdrawal.
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<PAGE>
SECTION 8
Payment of Benefits
8.1 General. In the event of the termination of employment of a Participant
for reasons other than death, subject to the provisions of Section 8.7, the
vested value of his Accounts as of the Valuation Date coincident with or next
following his Normal Retirement Date (or, if later, the date he actually
terminates employment) shall be paid to him in a lump sum as of such date (with
actual payment to be made as soon as practicable thereafter, but in no event
later than the 60th day after the close of (i) the Year in which the Participant
attains his Normal Retirement Date or, if later, (ii) the year in which he
actually terminates employment).
Notwithstanding the foregoing, any Participant who terminates employment
before his Normal Retirement Date may elect, by written notice to the Retirement
Board on the Appropriate Form prior to his termination of employment, to have
the vested value of his Accounts distributed to him in a lump sum (or have
annuity payments commence under Section 8.2, if applicable) as of the Valuation
Date coincident with or next following his termination of employment, with
actual payment to be made as soon as practicable thereafter.
Any Participant who does not make such an election to receive an
accelerated benefit may thereafter elect, by at least 30 but not more than 90
days' advance
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notice, to be paid his retirement benefits as of any subsequent Valuation Date
preceding his Normal Retirement Date by filing with the Retirement Board the
Appropriate Form.
Notwithstanding the foregoing, any Participant who terminates employment by
reason of Retirement may elect prior to his termination of employment to defer
payment of the value of his Accounts until any Valuation Date after his Normal
Retirement Date but not later than the last Valuation Date of the Year in which
he attains age 70-1/2, in which case his Accounts will be valued as of such
date, with such payment as soon as practicable thereafter. If a Participant
makes a deferral election pursuant to this paragraph, he may later elect by at
least 30 but not more than 90 days' prior written notice to the Retirement Board
on the Appropriate Form, to receive the value of his Accounts as of any earlier
Valuation Date occurring after his termination of employment.
Notwithstanding the foregoing provisions of this Section 8, if any
Participant continues employment after age 70-1/2, his Accounts shall be
distributed to him or used to purchase an annuity (if applicable) commencing as
of the last Valuation Date of the calendar year in which he attains age 70-1/2
(or, if earlier, as of the Valuation Date coincident with or next following his
termination of employment), with actual payment to be made as promptly as
practicable
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<PAGE>
thereafter; provided, however, that payments to any Participant who attained age
70-1/2 during 1988 and is not a 5% or greater owner of an Employer shall be
distributed commencing as of the last Valuation Date in 1989 (or such earlier
date as may apply if he terminates employment before such Valuation Date). Any
such Participant who continues employment after age 70-1/2 shall continue to be
eligible to have Employer Contributions made on his behalf while employed, with
the value of his Accounts as of the last Valuation Date in each subsequent year
to be distributed to him (or to his Beneficiary, in the event of his death) in a
lump sum as promptly as practicable thereafter. The foregoing shall not apply in
the case of any Participant who attained age 70-1/2 prior to January 1, 1988,
other than a Participant who is a 5% or greater owner (as defined in section
416(i)(1) of the Code) of an Employer.
If a contribution is made for a Participant who has terminated employment,
after the vested value of his Accounts has been distributed to him (or to his
Beneficiary in the case of his death) under the Plan, he (or his Beneficiary)
shall receive a supplemental payment equal to such contribution (with such
payment to be made as soon as practicable after the date the contribution is
made).
8.2 Optional Forms of Payment. Subject to the provisions of Section 8.3 and
8.7, in lieu of a lump sum payment, a Participant who was a Participant in the
Plan on December 31, 1989 and terminates employment may elect, by
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<PAGE>
written notice to the Retirement Board on the Appropriate Form filed not later
than the date as of which his benefits are to commence (and not more than 90
days prior to such date), to have an amount equal to the vested value of his
Accounts (as of the Valuation Date coincident with or next following the date as
of which his benefits are to commence) paid through the purchase and
distribution to the Participant (as of such date) of a nontransferable
commercial annuity contract providing a straight life annuity, a joint and
survivor annuity or any other form of annuity involving a life annuity that is
available under an Insurance Contract.
Notwithstanding the foregoing, the following restrictions shall apply to
any form of benefit under this Section or Section 8.3:
(A) such benefit must be payable (1) over a period not exceeding the
life of the Participant or lives of the Participant and his designated
Beneficiary, (2) over a period not in excess of the Participant's life
expectancy or the life expectancy of the Participant and his designated
Beneficiary (determined as of the date his benefits commence,
notwithstanding any change in the Participant's Beneficiary thereafter) or
(3) in a combination of (1) and (2) above; and
(B) no annuity payment may be selected under which benefits would be
payable over a period that
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exceeds the greater of (i) the life of the Participant or the lives of the
Participant and his spouse, or the Participant's life expectancy or the
joint and survivor's life expectancy of the Participant and his spouse
(whether or not, in any such case, his spouse is his designated joint
annuitant) or (ii) the longest period whereby the actuarial value of the
payments to made to the Participant exceeds 50% of the aggregate amount in
the Participant's Accounts, determined in any such case as of the date his
benefits commence.
Any optional form of payment election shall also comply with the proposed
regulations under section 401(a)(9) (including the minimum distribution
incidental benefit requirement of section 1.401(a)(9)-2 of such proposed
regulations) or any successor regulations.
8.3 Statutory Joint and Survivor Annuity. Notwithstanding the foregoing,
and subject to the provisions of Section 8.7, any Participant who (a) is married
on the date as of which his benefits are to commence under Section 8.1 and (b)
elects a life annuity under Section 8.2 shall automatically be deemed to have
elected a joint and survivor annuity benefit as of such date in respect of the
portion of his interest in the Plan payable pursuant to such annuity benefit
election, with 50% of the Participant's annuity benefit to be paid to his spouse
after his death (hereinafter sometimes referred to as the "Statutory Joint
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and Survivor Annuity"), unless he shall have filed a written notice with the
Retirement Board, within 90 days before the date as of which his benefits are to
commence, effectively waiving such Statutory Joint and Survivor Annuity and
electing payment in another form of annuity under Section 8.2. Any subsequent
change (by a Participant who previously elected payment under Section 8.2 and
filed a waiver) to a different form of annuity or in the person designated (as
Beneficiary or otherwise) to receive any amounts due under a form of annuity on
the death of the Participant under Section 8.2 shall not be effective unless a
new waiver of the Statutory Joint and Survivor Annuity (containing the notarized
consent of the Participant's spouse, as described below) is filed with the
Retirement Board.
Any waiver of the Statutory Joint and Survivor Annuity filed by a
Participant shall be effective only if the consent of the Participant's spouse
to such waiver (and election of an alternative form of benefit, including the
designation of any person or persons entitled (or contingently entitled) to
receive benefits upon the death of the Participant) shall be indicated thereon
in writing; provided, however, that no such consent shall be necessary if the
alternative form of payment elected is a joint and survivor annuity, with the
Participant's spouse to receive, as the joint annuitant, a benefit equal to more
than 50% of the Participant's annuity benefit or if no such consent is required
because (i) such spouse could not be lo-
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cated, (ii) the Participant and such spouse are legally separated, (iii) the
Participant has been abandoned by such spouse (within the meaning of local law)
and has a court order to such effect or (iv) of such other circumstances as may
be prescribed by Treasury Regulations. Any such consent shall be irrevocable and
must explicitly acknowledge the effect of the waiver and must be notarized.
Any election made by a Participant waiving the Statutory Joint and Survivor
Annuity provided hereunder may itself be revoked in writing not later than the
date as of which his benefits are to commence, effective as of the date of such
revocation. If a waiver is thus revoked, another waiver may be made in
accordance with the foregoing provisions of this Section 8.3.
In the case of any Participant who elects a form of annuity involving a
life annuity, the Retirement Board shall prepare a notice which shall describe
in general terms (i) the form of Statutory Joint and Survivor Annuity provided
under this Section 8.3, (ii) the Participant's right to waive such Annuity and
to revoke any such waiver, (iii) the rights of the Participant's spouse with
respect to such Annuity, (iv) the general financial effect of waiving the
Annuity and of revoking any such waiver and (v) the other optional forms of
benefit available. Such notice shall also describe the Participant's right to
request further financial information concerning the effect of waiving such
Annuity, as described below. Such notice shall
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be furnished by mail or personal delivery to each Participant no earlier than 90
days and no later than 30 days prior to the date on which his benefits are to
commence (or such other time as shall be permitted by applicable Treasury
Regulations) or by such other means as the Retirement Board shall select that
conforms to the requirements of ERISA (including permanent posting at a location
or locations customarily used for Employer notices to associates). If a
Participant shall so request in writing at least 30 days prior to the date as of
which his benefits are to commence, the Retirement Board shall furnish to the
Participant (by mail or personal delivery), within 30 days after the
Participant's request, the additional information required by applicable
Treasury Regulations; provided, however, that the Retirement Board need not
comply with more than one such request. Notwithstanding anything elsewhere in
the Plan to the contrary, if the Retirement Board is thus required to furnish
such additional information, a Participant's benefit shall not begin until the
91st day after such additional information is furnished.
The Retirement Board shall interpret the provisions of this Section 8.3 in
such manner, and shall take such administrative actions hereunder, as shall be
necessary to comply with applicable provisions of ERISA.
For purposes of this Section 8.3, a Participant's "spouse" shall mean the
person to whom the Participant is married on the date as of which his benefits
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are to commence (without regard to whether the marriage terminates at some later
date). In connection with the commencement of his benefits, each Participant who
elects a benefit involving a life annuity shall file a written statement with
the Retirement Board indicating whether he is married (and shall notify the
Retirement Board of any subsequent change in his marital status occurring on or
before the date as of which his benefits commence).
The Retirement Board may delay the commencement of the benefits of a
Participant or any other person until such Participant or other person shall
have furnished the Retirement Board with such information as it may reasonably
require to provide benefits payable in accordance with the terms of the Plan,
including such information as it may require to administer the provisions of the
Plan relating to the Statutory Joint and Survivor Annuity.
If a married Participant shall elect a form of annuity under Section 8.2
and thereafter elects a lump sum payment, any such election shall require
spousal consent as described above. If any such election shall be effective, the
provisions of this Section 8.3 shall not thereafter be applicable to such
Participant (unless he again elects a form of annuity under Section 8.2) and any
benefits due on his death shall be payable in accordance with Section 8.5.
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8.4 Death Prior to Commencement of Benefits. If a Participant's death
occurs prior to the payment of his benefits, subject to the provisions of
Section 16.6 in the event of a Participant's death with a loan outstanding, the
vested value of the Participant's interest in the Plan (as of the Valuation Date
coincident with or next following the date of the Participant's death) shall be
paid to his Beneficiary in a lump sum as promptly as practicable after such
Valuation Date.
8.5 Death After Commencement of Benefits. If a Participant dies after
commencement of his benefits but prior to the distribution of his full interest
in the Plan, the value of his remaining interest in the Plan shall be paid to
his Beneficiary, at the same time and in the same manner as distributions would
have been paid to the Participant had he not died.
8.6 Beneficiary. Each Participant may designate a Beneficiary (along with
contingent and alternate Beneficiaries, if desired) to whom, in the event of his
death, any benefit due hereunder shall be payable. Any such Beneficiary
designation may be changed by a Participant at any time. A designation or change
of Beneficiary shall be made by a notice in writing filed with the Retirement
Board prior to the Participant's death. If a Participant dies without a
surviving designated Beneficiary, his Beneficiary shall be the person or persons
in the first surviving of the
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following classes of beneficiaries then surviving: (a) his spouse, (b) his
children (per stirpes), (c) his parents, (d) his brothers and sisters and (e)
the Participant's estate.
Notwithstanding the foregoing, if a Participant dies with a surviving
spouse, such spouse shall be the Participant's Beneficiary (subject to the
provisions of Section 16.6 in the event of a Participant's death with a loan
outstanding) and any designation of another person (or persons) as the
Participant's Beneficiary in accordance with the foregoing provisions shall not
be effective unless (i) the spouse consented to such designation in the manner
provided below or (ii) no such consent was necessary because (a) such spouse
could not be located, (b) the Participant and such spouse were legally
separated, (c) the Participant had been abandoned by such spouse (within the
meaning of local law) and a court order had been issued to such effect or (d)
because of such other circumstances as may be prescribed in Treasury
Regulations; provided, however, that a spouse's rights hereunder shall, in
accordance with the provisions of Section 8.9, be subject to the requirements of
any "qualified domestic relations order" (as defined therein); and provided,
further, that this Section 8.6 shall not apply to benefits payable under Section
8.2 on the death of any Participant who prior to his death shall have commenced
to receive benefits pursuant to Section 8.2.
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Any spousal consent to a designation of Beneficiary hereunder must be given
in writing at the time of such designation, must acknowledge the effect of such
Beneficiary designation and must be witnessed by a notary public. Any such
spousal consent shall be irrevocable.
If any payment is made under the Plan to any Beneficiary, in reasonable
reliance on (i) a written statement by the Participant that he was unmarried,
(ii) a spousal consent that on its face conformed to the requirements set forth
above or (iii) evidence establishing to the Retirement Board's satisfaction that
a Participant's spouse could not be located at the time of a Beneficiary
designation (or that the spouse's consent was unnecessary because of other
circumstances), the Plan's liability for death benefits shall be satisfied to
the extent of such payment (and the Plan shall have no liability to any spouse
to such extent).
The Retirement Board may require and rely upon such proof of death and such
evidence of the right of any Beneficiary or other person to receive the value of
the Account of a deceased Participant as the Retirement Board may deem proper
and its determination of death and of the right of such Beneficiary or other
person to receive payment shall be conclusive (subject to applicable provisions
of law).
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8.7 Small Benefits. Notwithstanding anything in the Plan to the contrary,
in the event that the total vested value of a Participant's Accounts does not
exceed $3,500 as of the Valuation Date coincident with or next following the
date he terminates employment for any reason (including death), and such total
vested value did not exceed $3,500 as of any prior Valuation Date that was the
effective date of any prior distribution (including any withdrawal), such total
vested value shall be paid to the Participant (or his Beneficiary) in a lump sum
as soon as practicable after such Valuation Date.
8.8 Form of Payment. Any distribution to or on behalf of a Participant
shall be in the form of cash (except that, at the Participant's election,
distributions from the Common Stock Fund may be made in kind).
8.9 Limitation of Assignment. It is a condition of the Plan, and all rights
of each Participant, Beneficiary and joint annuitant shall be subject thereto,
that except as specifically permitted by applicable Treasury Regulations no
right or interest of any Participant, Beneficiary or joint annuitant in the Plan
and no benefit payable under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any action by way of anticipating, alienating, selling,
transferring, assigning, pledging, encumbering, or charging the same shall be
void
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and of no effect; nor shall any such right, interest or benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements, or
torts of the person entitled to such right, interest or benefit, except as
specifically provided in the Plan. Notwithstanding the foregoing or anything
elsewhere in the Plan to the contrary, all benefits shall be paid under the Plan
which are required to be paid under the terms of any domestic relations order
constituting a "qualified domestic relations order" under ERISA, in such manner
and to such person or persons as such order shall specify. The Retirement Board
shall establish reasonable procedures for determining the qualified status of
any domestic relations order and for administering distributions under any such
order.
8.10 Associates' Right to Employment. The establishment of the Plan shall
not be construed as conferring any rights upon any Associate or any person to a
continuation of employment, nor shall it be construed as limiting in any way the
right of an Employer to discharge any Associate or to treat him without regard
to the effect which such treatment might have upon him as a Participant under
the Plan.
8.11 Distributions on Behalf of Incapacitated Persons. If any person
entitled to receive any benefits hereunder is, in the judgment of the Retirement
Board, legally, physically or mentally incapable of
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personally receiving and giving a receipt for any distribution, the Retirement
Board may direct that any distribution due him, unless claim has been made
therefor by a duly appointed legal representative, be made to his spouse,
children or other dependents, or to a person with whom he resides, and any
distribution so made shall be a complete discharge of the liabilities of the
Plan therefor.
8.12 Determination as to Payment of Benefits by Retirement Board. Subject
to the provisions of applicable law, the determination of the Retirement Board
as to the identity of the proper payee of any benefit payment from the Trust
Fund and the amount properly payable shall be conclusive, and payments in
accordance with such determination shall constitute a complete discharge of all
obligations on account thereof.
8.13 Income Tax Withholding. Any retirement benefit payment made under the
Plan will be subject to any applicable income tax withholding requirements. For
this purpose, the Retirement Board shall provide the Trustee with any
information that the Trustee needs to satisfy such withholding obligations and
with any other information that may be required by regulations promulgated under
the Code.
8.14 Inability to Locate Payee. If the Retirement Board is unable, after
making reasonable efforts, to locate the Participant or Beneficiary to whom the
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benefits are payable, the Accounts of such Participant or Beneficiary in all
investment funds shall be forfeited as of the last day of the Year next
following the Year in which such benefits first become payable. For this
purpose, the Retirement Board will be deemed to have been unable, after making
reasonable efforts, to locate a payee if (i) a written notice has been sent to
such person's last known address, by first class or certified mail, notifying
him of his eligibility to receive a benefit under the Plan, and the payee has
not responded to such written notice within 90 days and (ii) a notification has
been sent to the Pension Benefit Guaranty Corporation or the Social Security
Administration, under their respective programs to identify payees under
retirement plans, and to the Internal Revenue Service, under its program to
contact persons for humanitarian purposes, and the payee has not responded
within six months thereafter. The benefit of any person whom the Retirement
Board is unable after the foregoing or other reasonable efforts to locate shall
in any event be forfeited no later than the date by which distributions are
required to have commenced under section 401(a)(9) of the Code.
If such Participant or Beneficiary subsequently makes proper claim to the
Retirement Board for such forfeited amount, the amount of each such Account
shall be restored to the appropriate investment fund, as of the
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Valuation Date next following the Retirement Board's determination that such
claim is correct. Such recrediting shall in no event be taken into account in
applying any contribution limitations under the Plan. Any amounts that are to be
thus recredited shall be provided by a special Employer contribution equal to
such amount, and shall be payable to such Participant or Beneficiary in
accordance with the terms of the Plan, commencing as promptly as practicable
thereafter.
Any amounts forfeited under this Section 8.14 as of the last day of any
Plan Year shall be applied as promptly as practicable to the obligations of the
forfeiting Participant's Employer to make Employer Contributions.
8.15 Limitations on Certain Distributions. Notwithstanding anything
contained elsewhere in the Plan, no amounts shall be distributed from a
Participant's Supplemental Contributions Account earlier than the time permitted
under section 401(k)(2)(B) of the Code.
8.16 Direct Rollover Distributions From the Plan. This Section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision in
any other Section of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, a Participant or other distributee
under the Plan may elect to have any portion of an eligible rollover
distribution
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paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.
Any such election shall be made at the time and in the manner prescribed by
the Retirement Board and shall be subject to any uniform restrictions or
limitations (permissible under section 401(a)(31) and other applicable Code
provisions) that the Retirement Board may impose under rules adopted by it.
Any benefit payment made under the Plan that is not in the form of a direct
rollover as described above shall be subject to any applicable income tax
withholding requirements. To the extent and in the manner required by section
402(f) of the Code, each distributee who is to receive an eligible rollover
distribution from the Plan shall be notified of the special Federal income tax
provisions applicable to such distribution.
For purposes of this Section, the following definitions shall apply:
(a) An "eligible rollover distribution" is any lump-sum payment or other
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: (i)
any life annuity or other 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
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joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of 10 years or more; (ii) any
distribution to the extent such distribution is required under section 401(a)(9)
of the Code; and (iii) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) 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 a surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.
(c) A "distributee" includes a Participant (whether or not he has
terminated employment). In addition, the Participant's surviving spouse and the
Participant's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the Code,
are distributees with regard to the interest of the spouse or former spouse.
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(d) A "direct rollover" is a payment by the Plan to the eligible retirement
plan specified by the distributee.
8.17 Termination of Employment as a Result of the Sale of Assets or Stock.
If, as the result of the sale of assets or stock, a Participant shall no longer
be employed by either an Employer or an Affiliate but shall not have incurred a
"separation from service" for purposes of section 401(k) of the Code, such
Participant shall not be considered to have terminated employment for purposes
of the Plan; provided, however, that the following special rules shall apply to
such Participant if such sale is of a type described in section 401(k)(10) of
the Code;
(i) he may receive a lump sum distribution of the vested value of his
Accounts if such distribution occurs by the end of the second calendar year
after the calendar year in which the sale occurs, but he shall not be
eligible for any withdrawals under Section 7 during such period;
(ii) he shall be treated as having terminated employment for purposes
of repayment of any outstanding loan; and
(iii) after the expiration of the period described in clause (i)
above, and assuming he has not taken a distribution in accordance with such
clause, he shall be eligible for withdrawals under
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Section 7 but he shall not be eligible for other distributions under the
Plan until he has incurred a separation from service.
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SECTION 9
Reemployment
If a person shall resume his employment with an Employer after having
previously terminated employment for any reason, (i) any benefit payment due to
him under the Plan shall be suspended (unless he has attained age 70-1/2 at the
time he resumes employment), (ii) his Service credit at the time of his prior
termination shall be reinstated as though such termination had not occurred,
(iii) he shall immediately be eligible to resume active participation in the
Plan if he was a Participant at the time of his prior termination, and may
resume having Supplemental Contributions made for him as of the first day of any
month, upon 30 days' advance notice (or such shorter notice period as the
Retirement Board may permit by uniform rule) to the Retirement Board on the
Appropriate Form, (iv) if he was not a Participant at the time of his prior
termination, he shall become a Participant in accordance with Section 2.1 of the
Plan, taking into account any Service reinstated pursuant to clause (ii) above,
and (v) if he is reemployed on or before the first anniversary of the date of
his prior termination (and within 12 months of his last day of active work with
an Employer), the period between his prior termination and his reemployment
shall be treated as a period of Service for all purposes of the Plan (other than
determining contributions). Notwithstanding the foregoing, there shall be no
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reinstatement of amounts forfeited by the Participant on account of a prior
termination of Service, except that if (a) on account of any such prior
termination of Service he forfeited his interest in his Capital Accumulation
Contributions Account (as a result of a termination of Service occurring before
January 1, 1990) or his interest in his Matching Contributions Account in
accordance with Section 5.2, (b) he resumes Service hereunder on or before the
fifth anniversary of the date of his prior termination and (iii) he repays in
cash, within five years after the date he resumes Service, the full distribution
he received at his prior termination of Service, then an amount equal to the
amount he forfeited shall be recredited to his Accounts (but such recrediting
shall in no event be subject to, or included in applying, the limitations
imposed under Section 3), as of the Valuation Date coincident with or next
following the date such repaid amount is remitted to the Trustee. Any amounts
which are to be recredited as herein provided shall be taken first from any
forfeitures pursuant to Sections 5.2 and 8.14, and, if any amounts remain to be
recredited, they shall be provided through a special contribution by his
Employer. Any amounts repaid by a Participant hereunder shall be recredited to
the Accounts from which they were previously distributed and shall be invested
in the investment funds in which new contributions to such Accounts are being
invested at such time.
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For purposes of determining the date of a Participant's prior termination
of Service under this Section, a Participant who is absent from work on account
of maternity or paternity shall not be treated as having terminated Service
before the second anniversary of the date such absence commenced. For purposes
hereof, an absence on account of maternity or paternity shall mean an absence
from work (i) by reason of the Participant's pregnancy or the birth of the
Participant's child, (ii) by reason of the placement of a child with the
Participant in connection with the Participant's adoption of such child or (iii)
for purposes of caring for such child for a period beginning immediately after
such birth or placement; provided, however, that no credit shall be given under
this Section 9 for such maternity or paternity absence unless the Participant
furnishes to the Retirement Board (within 90 days after the commencement of such
maternity or paternity absence or within such other period as the Retirement
Board may specify) such information as the Retirement Board shall require to
establish that such Participant's absence was on account of a birth or placement
described in this paragraph.
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SECTION 10
Administration of the Plan
10.1 Retirement Board. The Plan shall be administered by a committee of at
least three persons, to be known as the Retirement Board, the members of which
shall be appointed from time to time by the Board and shall serve at the
pleasure of the Board. Vacancies in the Retirement Board arising by resignation,
death, removal or otherwise shall be filled by the Board.
The Retirement Board shall be the plan administrator and shall have
fiduciary responsibility for the general operation of the Plan; provided,
however, that the Retirement Board shall have no responsibility for or control
over the investment or management of Plan assets.
10.2 Powers and Duties. Subject to the foregoing, the Retirement Board
shall have the power and the duty to take all action and to make all decisions
that shall be necessary or proper in order to carry out the provisions of the
Plan and, without limiting the generality of the foregoing (subject as
aforesaid), the Retirement Board shall have the following fiduciary powers and
duties:
(a) to make and enforce such rules and regulations as it shall deem
necessary or proper for the efficient administration of the Plan and the
transaction of the Retirement Board's business;
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(b) to construe the Plan and to determine all questions of fact that
may arise hereunder, including the discretionary fiduciary authority to
interpret the terms of the Plan and to decide all questions concerning the
eligibility of any person to participate in the Plan, the right to and the
amount of any benefit payable under the Plan to or on behalf of any
individual and the date on which any individual ceases to be a Participant,
and any such construction or determination shall be conclusively binding
and final, to the extent permitted by applicable law, upon all persons
interested or claiming an interest in the Plan; and
(c) to establish and maintain a claims procedure pursuant to which any
Participant or Beneficiary whose claim for benefits under the Plan has been
denied shall be given (i) notice in writing of such denial (including the
reasons therefor) and (ii) a reasonable opportunity to have full review of
such denial by the Retirement Board.
The Retirement Board, in making any determinations or constructions
required hereunder and in exercising any discretionary power, shall treat
Participants in like circumstances in like manner.
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In addition to the foregoing, the Retirement Board shall have all the
rights, powers, duties and obligations granted or imposed upon it elsewhere in
the Plan.
10.3 Action of Retirement Board. The Retirement Board shall act by a
majority vote at a meeting of its members at which a quorum is present or by
action in writing of a majority of its members at the time in office without a
meeting. The number of members constituting a quorum shall be determined from
time to time by the Board. The Retirement Board may by such majority action
allocate to any one or more of its members any responsibility it may have under
the Plan or designate any other person or persons to carry out any
responsibility of the Retirement Board under the Plan. The Retirement Board may
appoint or employ such advisers or assistants as it deems necessary. The members
of the Retirement Board shall serve without compensation for their services as
such but the Company shall pay all expenses reasonably incurred by members of
the Retirement Board in discharge of their duties and the Company shall
indemnify the Retirement Board and each member thereof to the full extent
permitted by law and the by-laws of the Company.
10.4 Restrictions on Members. Members of the Retirement Board (and other
persons who are fiduciaries
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with regard to the Plan) may serve in more than one fiduciary capacity with
respect to the Plan.
A member of the Retirement Board who is also a Participant shall not vote
or act upon any matter relating solely or primarily to himself.
10.5 Expenses. All expenses reasonably incurred in the administration of
the Plan, including the expenses of the Retirement Board, the Trustee's fee and
other proper expenses of the Trust, shall be paid by the Trustee out of the
appropriate investment fund's assets (either directly or through reimbursement
of an Employer for any expenses paid by the Employer), except to the extent that
the Employers shall otherwise provide for such payment directly. The Employers
may not reimburse the Trustee for expenses of administering the Plan that have
been paid from the Trust Fund.
10.6 Special Section 16(b) Restrictions. The Retirement Board shall have
the right to adopt and enforce such special Plan restrictions with respect to
Participants who are subject to Section 16 of the Securities Exchange Act of
1934 as the Retirement Board shall deem are necessary or appropriate to exempt
certain Plan transactions from the requirements of Section 16.
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SECTION 11
The Trust Fund
All assets of the Plan shall be held as a Trust Fund under the Trust
Agreement with the Trustee (in accordance with Section 4 hereof) for the
exclusive benefit of Participants and their Beneficiaries under the Plan and for
paying the expenses of the Plan. No part of the corpus or income of the Trust
Fund shall be used for or diverted to purposes other than for the exclusive
benefit of Participants and their Beneficiaries (including the payment of Plan
expenses). No person shall have any interest in or right to any part of the
earnings of the Trust Fund, or any rights in, to, or under the Trust Fund or any
part of its assets, except to the extent expressly provided in the Plan.
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SECTION 12
Amendment of the Plan
The Plan may be amended at any time by resolution or other written action
of the Board (or by written action of the Retirement Board, to the extent it is
authorized by resolution of the Board to amend the Plan, with any such Board
resolution to be considered to be incorporated in the terms of the Plan, in all
respects as though it were fully set forth herein); provided, however, that:
(a) No amendment or modification can be made which would permit any
part of the corpus or income of the Trust Fund to be used for or diverted
to purposes other than for the exclusive benefit of Participants and their
Beneficiaries under the Plan or for the payment of the expenses of the
Plan; and
(b) No amendment or modification may be made which shall increase the
duties or liabilities of the Trustee without its written consent.
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SECTION 13
Discontinuance of the Plan
13.1 Termination of the Plan. The Plan may be terminated at any time, in
whole or in part, by resolution of the Board. Written notice of any such
termination shall be given promptly to the Employers, the Retirement Board and
the Trustee. In the event of any such termination or complete discontinuance of
contributions under the Plan, no further contributions shall be made by the
Employers and the value of the Accounts of all Participants shall be fully
vested, but the Plan shall otherwise be administered as though it were in full
force and effect. If the Trust Fund subsequently is terminated, the provisions
of Section 13.2 shall then apply.
13.2 Termination of the Trust. If the Plan is terminated pursuant to
Section 13.1 and the Board determines that the Trust should be terminated,
written notice of such determination shall be given to the Employers, the
Retirement Board and the Trustee, and the value of all Accounts of Participants
shall be distributed through lump-sum payments (which shall be paid as promptly
as practicable, to the extent permitted by law).
13.3 Partial Termination of the Plan. If at any time the Plan is terminated
with respect to any group of Associates under such circumstances as to
constitute a partial termination of the Plan within the meaning of
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section 411(d)(3) of the Code, no further contributions shall be made by or on
behalf of the Participants affected by the partial termination, and the value of
such Participants' Accounts shall be fully vested and nonforfeitable but the
Plan shall otherwise be administered as though such partial termination had not
occurred; provided, however, that the Board, in its discretion, may direct that
an amount equal to the portion of each investment fund under the Plan that is
allocable to the Participants as to whom such termination occurred be segregated
by the Trustee as a separate plan and trust and that the funds thus allocated to
such separate trust be applied for the benefit of such Participants in the
manner described in this Section 13.
13.4 Mergers, Consolidations and Transfers. No merger or consolidation
with, or transfer of assets or liabilities to, any other pension or retirement
plan shall be made unless the benefit each Participant in this Plan would
receive if the Plan were terminated immediately after such merger or
consolidation, or transfer of assets and liabilities, would be at least as great
as the benefit he would have received had the Plan terminated immediately before
such merger, consolidation or transfer.
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SECTION 14
Participation in the Plan by Affiliates
14.1 Adoption of Plan by Participating Employers. Any Affiliate of the
Company and any other entity may, with the consent of the Board, become a
participating Employer under the Plan by adopting the Plan for some or all of
its Associates. Such Affiliate, or other entity shall thereupon be included in
the Plan as an Employer, and shall be bound by all the terms thereof as they
relate to its Associates. Any contributions provided for in the Plan and made by
such Employer shall become a part of the Trust Fund and shall be held by the
Trustee subject to the terms and provisions of the Trust Agreement. With the
approval of the Company, a participating Employer may elect to have special
provisions apply with respect to its eligible Associates. Such special
provisions, which may differ from the provisions of the Plan applicable to
Associates of other Employers, shall be stated in the Plan text or in an Exhibit
to the Plan.
14.2 Withdrawal by Participating Employer. In the event that an Affiliate
of the Company which has become an Employer pursuant to the provisions of
Section 14.1 shall cease to be an Affiliate, such entity shall forthwith be
deemed to have withdrawn from the Plan and the Trust Agreement (unless the Board
and the board of directors of such entity shall otherwise provide).
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Any one or more of the Employers (other than the Company) may voluntarily
withdraw from the Plan by giving prior notice in writing of such intention to
withdraw to the Board and to the Retirement Board.
Upon any withdrawal by an Employer, the amounts standing to the credit of
Participants employed by such Employer shall be set aside as a separate trust
fund, to be held pursuant to a plan whose initial terms shall be the same as the
terms of the Plan on the date of such withdrawal, except that such Employer
shall become the "Company" thereunder and such separate plan shall cover only
employees of such Employer.
Notwithstanding the foregoing provisions of this Section 14.2, if
Associates of an Employer cease to be eligible to have contributions made on
their behalf to the Plan by reason of any such withdrawal by an Employer, the
Retirement Board may elect to continue to hold under the Plan the Trust assets
allocable to the withdrawing Employer (in lieu of segregation of such assets)
and to apply the same in accordance with otherwise applicable provisions of the
Plan so that Associates of the withdrawing Employer shall be treated as
terminated Associates if they are no longer employed by a continuing Employer or
an Affiliate and shall be considered to have transferred to noncovered status if
they are employed after such withdrawal by a continuing Employer or an
Affiliate.
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SECTION 15
Top-Heavy Provisions
15.1 General. If the Plan is or becomes a Top-Heavy Plan in any Year (as
determined on the last day of the preceding Year, based on the value of Plan
benefits on such date), the provisions of this Section 15 shall supersede any
conflicting provisions of the Plan. The provisions of this Section 15 shall be
applied separately with respect to each Employer and its Affiliates.
15.2 Definitions. For purposes of this Section 15, the following
definitions shall apply:
(a) "Key Associate" shall mean any Associate who is a key employee
within the meaning of section 416(i) of the Code, and any Associate who is
not a Key Associate (including Associates who are former Key Associates)
shall be a Non-Key Associate.
(b) "Top-Heavy Plan" shall mean the Plan for any calendar year in
which the Top-Heavy Ratio for the Plan's Aggregation Group exceeds 60%.
(c) "Top-Heavy Ratio" shall mean the ratio of (i) the account balances
(in the case of a defined contribution plan) and present value of accrued
benefits (in the case of a defined benefit plan) for Key Associates under
all plans in the Aggregation Group to (ii) the account balances and
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present value of accrued benefits for all Associates in all plans in the
Aggregation Group, calculated in accordance with section 416 of the Code
and regulations thereunder.
(d) "Aggregation Group" means the Plan and any other plan of the
Company or an Affiliate which either (i) covers a Key Associate or (ii) is
required to be aggregated with the Plan or any such other plan in order for
any such plan to satisfy the requirements of section 401(a)(4) or 410(b) of
the Code, together with any other plan of the Company or any Affiliate but
only if such inclusion would cause the Plan to not be a Top-Heavy Plan and
the resulting Aggregation Group would satisfy the requirements of sections
401(a)(4) and 410(b) of the Code.
15.3 Minimum Allocation. Except as provided below, for any Year in which
the Plan is a Top-Heavy Plan, an additional Employer contribution shall be
allocated on behalf of any Participant who is a Non-Key Associate to the extent
that the aggregate Employer contributions made on his behalf (not taking into
account for this purpose Supplemental Contributions made on his behalf) would
otherwise be less than the lesser of (i) three percent of compensation (defined
for purposes of this Section 15 in accordance with section 415 of the Code) or
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(ii) the largest Employer contribution, as a percentage of the maximum amount of
the Key Associate's compensation that may be taken into account under section
401(a)(17) of the Code (as described in Section 1.12 of the Plan) allocated on
behalf of any Key Associate for that Year. Such additional allocation shall be
made even though the Participant would not otherwise be entitled to receive an
allocation or would have received a lesser allocation because of the
Participant's failure to have Supplemental Contributions made on his behalf to
the Plan.
The provisions of the preceding paragraph shall not apply to any
Participant who was not employed by an Employer on the last day of the Year.
The minimum allocation under this Section 15.3 shall not apply to any
Participant who is covered by any other plan or plans of an Employer to the
extent such plan or plans provide that the minimum allocation or retirement
benefit applicable to Top-Heavy Plans shall be met in such plan or plans.
15.4 Change in Section 415 Limitations. If the Plan becomes a Top-Heavy
Plan, the reduction in benefits set forth in the Plan to comply with section
415(e) of the Code shall be made in accordance with section 416(h) of the Code.
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SECTION 16
Loans
16.1 Amount of Loans. Effective January 1, 1994, upon the request of a
Participant who is employed by the Company (and to the extent required by
Department of Labor Regulations, any former associate of the Company who is a
Participant), the Retirement Board (or such other persons as may be designated
by the Retirement Board) shall direct that a loan be made to a participant in an
amount from the Participant's Supplemental Contributions Account, subject to the
restrictions set forth herein.
A Participant may not have more than one loan outstanding at any time. The
amount of any loan made under this Section 16 shall not be less than $1,000.
No loan to a Participant hereunder may exceed the lesser of:
(i) $50,000, reduced by the greater of (a) the outstanding balance of
loans considered to have been made from the Plan to the Participant on
the date the loan is made, or (b) the highest outstanding balance of
loans from the Plan to the Participant during the one- year period
ending on the day before the date the loan is made (not taking into
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account any payments made during such one-year period);
(ii) one-half of the value (on the date the loan is applied for) of the
Participant's Supplemental Contributions Account balance reduced by
the outstanding balance of loans considered to have been made from the
Plan to the Participant on such date; or
(iii) the amount of the Participant's Supplemental Contributions Account
that is not invested in the Common Stock Fund.
For purposes of the restrictions set forth in the next preceding paragraph,
any loan from any other tax-qualified plan maintained by the Company or any
Affiliate shall be treated as if it were a loan made from the Plan and the
Participant's vested interest under any such other plan shall be considered a
vested interest under this Plan; provided, however, that the provisions of this
paragraph shall not be applied so as to allow the amount of a loan under this
Section to exceed the amount that would otherwise be permitted in the absence of
this paragraph.
For purposes of this subsection, a loan shall be considered to be made as
of the Valuation Date for the calendar month in which the loan is approved by
the
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Retirement Board (or such other persons as may be designated by the Retirement
Board).
16.2 Security for Loan. Any loan to a Participant under the Plan shall be
secured by the pledge of the portion of the Participant's interest in the Plan
invested in such loan.
16.3 Interest Rate Charged. Each loan shall bear interest at a rate equal
to one percentage point above the prime rate (rounded up, in the case of a rate
that is not a multiple of .5%, to the nearest .5%), as published in The Wall
Street Journal, on the first business day of the calendar month in which the
loan is approved by the Retirement Board (or such other persons as may be
designated by the Retirement Board).
16.4 Spousal Consent Requirement. In the case of a Participant who is
married on the date on which he executes a promissory note in respect of a loan,
such loan shall not be effective unless the Participant obtains the notarized
consent of his spouse (in the form and manner, and subject to the exceptions,
described in Section 8.3) to such loan.
16.5 Repayment of Loans. The total term of any loan shall be a multiple of
six months; provided, however, that the term of any loan hereunder shall not be
less than six months and shall not be greater than five years, except that any
loan to a Participant the proceeds of
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which are to be used to acquire a principal residence of the Participant within
a reasonable time of the granting of the loan may be for a term of up to fifteen
years. The foregoing proviso shall apply only if the Retirement Board (or such
other persons as may be designated by the Retirement Board), receives evidence
satisfactory to it, within such period as the Retirement Board shall prescribe,
that the proceeds of the loan are being used for the purpose specified therein.
Repayments of loans shall be made by payroll deduction of equal amounts
(comprised of both principal and interest) from each paycheck, with the first
such deduction to be made as promptly as practicable following the date loan
funds are disbursed; provided, however, that a Participant may prepay the entire
outstanding balance of his loan at any time (but may not make a partial
prepayment). In the event that a payroll deduction cannot be made in full
because the Participant is on an unpaid leave of absence or for any other
reason, the Participant shall pay directly to the Plan the amount that would
have been deducted from the Participant's paycheck (if it had been sufficient),
with such payment to be made on the last business day of the month in which the
amount would have been deducted.
Notwithstanding the foregoing, if the Participant is no longer employed on
the date the loan proceeds are disbursed, the principal and interest on the
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loan will be paid in equal consecutive installments, with the first payment to
be due and payable on the last business day of the month in which the loan funds
are disbursed and subsequent payments to be due and payable on the last business
day of each month thereafter.
In the event that prior to full payment of a loan under this Section 16 a
distribution becomes payable to or on account of a Participant by reason of his
termination of employment for any reason (including death) or the Participant
becomes entitled to a distribution of benefits on account of attaining age
70-1/2, the loan (or an appropriate portion thereof) shall be distributed, to
the extent that the Participant's remaining interest in the Plan is insufficient
to provide the required distribution.
Notwithstanding anything above to the contrary, except to the extent
prohibited under applicable Department of Labor regulations, in the event that
prior to full repayment of a loan under this Section 16 a Participant terminates
employment for any reason (including death), such loan shall become due and
immediately payable in full.
16.6 Default on Loan. In the event a Participant fails to make four
consecutive loan repayments or in the event a Participant fails to make at least
one payment within each ninety-day period, a default on the loan shall occur. In
the event of such a default, all remaining payments on the loan shall be
immediately due and payable.
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Effective as of the first day of the calendar month next following the month in
which any such loan default occurs, the interest rate for such loan shall be (if
higher than the rate otherwise applicable) the rate being charged on loans from
the Plan that are approved by the Retirement Board (or such other persons as may
be designated by the Retirement Board) in the month in which such default
occurs.
In the case of any default on a loan to a Participant, the Retirement Board
shall apply the portion of the Participant's interest in the Plan held as
security for the loan in satisfaction of the loan on the earliest possible date.
In addition, the Retirement Board shall take any and all legal action it shall
consider necessary or appropriate to enforce collection of the unpaid loan, with
the costs of any legal proceeding or collection procedure to be charged to the
Accounts of the Participant.
Notwithstanding anything else in the Plan to the contrary, in the event a
loan is outstanding hereunder on the date of a Participant's death, his estate
shall be his Beneficiary as to the portion of his interest in the Plan invested
in such loan (with his Beneficiary or Beneficiaries as to the remainder of his
interest in the Plan to be determined in accordance with otherwise applicable
provisions of the Plan).
16.7 Manner of Making Loans. A request by a Participant for a loan shall be
made in writing to the
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Retirement Board (or such other persons as may be designated by the Retirement
Board) within the first fifteen days of any calendar month and shall specify the
amount and term of the requested loan, and if the term of the loan requested
exceeds five years, such request shall include a statement confirming that the
loan proceeds will be used for the purpose of acquiring a principal residence
for the Participant. Any loan made under this Section 16 shall be taken solely
from a Participant's Supplemental Contributions Account, and loan amounts shall
not be taken from a Participant's interest in the Common Stock Fund.
The terms and conditions on which the Retirement Board (or such other
persons as may be designated by the Retirement Board) shall approve loans under
the Plan shall be applied on a uniform and nondiscriminatory basis with respect
to all Participants. If a Participant's request for a loan is approved by the
Retirement Board (or such other persons as may be designated by the Retirement
Board), the Retirement Board shall furnish the applicable mutual funds with
written instructions directing that the loan be made in cash to the Participant.
Subject to the foregoing, such payment shall be made from the amounts in the
Trust Fund credited to the Supplemental Contributions Account of the Participant
(and the amounts credited to the Participant in such Account shall be
appropriately reduced). In making any loan under this Section 16, the mutual
funds
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shall be fully entitled to rely on the instructions furnished by the Retirement
Board, and shall be under no duty to make any inquiry or investigation with
respect thereto.
Notwithstanding anything herein to the contrary, if a Participant shall not
execute all the documents required in connection with a loan within twenty days
after such documents are furnished to him, his loan application shall be
considered to have been withdrawn and shall be of no further effect.
Any loans under this Section 16 shall be taken pro rata from the mutual
funds (but not the Common Stock Fund) in which a Participant's Supplemental
Contributions Account is invested, except as may be otherwise provided by
uniform and nondiscriminatory rules adopted by the Retirement Board. In its
discretion, the Retirement Board may direct that a Participant's Supplemental
Contributions Account be charged reasonable fees for the processing and
administration of loans, provided that such fees are applied to Participants on
a uniform and nondiscriminatory basis.
16.8 Accounting for Loans. A loan to a Participant shall be considered an
investment of a segregated sub-account of the Participant's Supplemental
Contributions Account. All loan repayments to such separate account shall be
allocated to a Participant's Supplemental
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Contributions Account. All loan repayments shall be reinvested in the Common
Stock Fund and the mutual funds available under the Plan in the same manner as
current contributions to a Participant's Supplemental Contributions Account.
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SECTION 17
Construction of Plan
The validity of the Plan or of any of the provisions thereof shall be
determined under and shall be construed according to the laws of the State of
New York and ERISA.
Titles to Sections are for general information only and the Plan is not to
be construed by reference thereto.
The masculine pronoun includes the feminine and the singular form includes
the plural wherever such usage would apply.
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Appendix A
Special Provisions Applicable to Former Employees
of BP Performance Polymers, Inc.
Any employee of BP Performance Polymers, Inc. who becomes an Associate on
February 10, 1994 shall receive credit for his service with BP Performance
Polymers, Inc. for purposes of determining the date of his commencement of
participation in the Plan pursuant to Section 2.1, but not for any other
purpose.
A-1
<PAGE>
Appendix B
Special Provisions Applicable to Persons
Employed on other than a Regular Full-Time Basis
Notwithstanding anything else in the Plan to the contrary, the following
special provisions shall apply to any Associate who is not regularly employed on
a full-time basis including any Associate employed on a seasonal or temporary
basis ("Part-Time Associates").
A Part-Time Associate who is not a Participant on December 31, 1994, shall
become a Participant in the Plan on the first day of the calendar month (after
December 31, 1994) coincident with or next following the close of either (a) the
twelve months beginning on the date his employment commences, if he renders at
least 1,000 Hours of Service during such twelve months or (b) a calendar year
(beginning after the date his employment commences) during which he renders at
least 1,000 Hours of Service.
"Hour of Service" means each hour for which an Associate is paid, or
entitled to payment, by an Employer, for the performance of services. An
Associate shall also be credited with Hours of Service for (i) any non-work
period (occurring prior to termination of employment) for which he is paid, or
entitled to payment, by an Employer on account of vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or leave of
absence, and (ii) all periods of compulsory service in the Armed Forces of the
United States
B-1
<PAGE>
of America, provided the Associate returns to employment within three months
following the date upon which he becomes eligible for separation from active
duty in the Armed Forces (or such longer period during which his employment
rights are protected by law). Hours of Service credited for a period described
under (ii) shall be based on the Participant's customarily scheduled working
hours.
Notwithstanding the foregoing, to the extent required by ERISA, if an
Associate terminates employment and is paid (or entitled to payment), for a
period beginning immediately thereafter, by an Employer for one of the reasons
listed in (i) above (and would not otherwise be entitled to credit for such
period), he shall continue to be credited with Hours of Service, for purposes of
paragraph 1 of this Appendix B until the earlier of (a) the cessation of such
payments or (b) the date he has been credited with 501 Hours of Service since
his last day of active work.
For purposes of this Appendix the following rules shall apply:
(1) A payment shall be deemed to be made by, or due from, an Employer
whether such payment is made by the Employer directly, or is made
indirectly through a trust fund or an insurer (or other entity) to which
the Employer contributes or pays premiums (regardless of whether such
contributions or premiums are for the benefit of
B-2
<PAGE>
particular Associates or are on behalf of a group of Associates in the
aggregate); provided, however, that any payment made or due (a) under a
plan maintained solely to comply with applicable unemployment compensation,
workmen's compensation or disability insurance laws (or any similar law),
or (b) solely to reimburse an Associate for medical or medically related
expenses incurred by the Associate (or a member of his family) shall not be
considered to be direct or indirect compensation paid or due from the
Employer;
(2) An Associate shall be considered to be entitled to pay for any
hour during any of the periods described above in respect of which back pay
is either awarded or agreed to by an Employer (irrespective of mitigation
of damages); and
(3) With respect to a Part-Time Associate who is employed full-time on
a seasonal or temporary basis, his Hours of Service credit for any such
seasonal or temporary period of full-time employment shall be calculated by
crediting him with 45 Hours of Service in respect of each calendar week in
such period for which he is entitled to be credited with at least one Hour
of Service.
B-3
<PAGE>
The number of Hours of Service to be credited in accordance with the
foregoing, and the calendar year (or other applicable computation period) to
which such Hours are credited, shall be determined by the Retirement Board in
accordance with the rules set forth in Labor Department Regulations
2530.200b-2(b) and (c).
B-4
EXHIBIT 5.1
October 17, 1996
Crompton & Knowles Corporation
One Station Place, Metro Center
Stamford, Connecticut 06902
Gentlemen:
I have acted as counsel to Crompton & Knowles Corporation, a Massachusetts
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-8 (the "Registration Statement") filed under the Securities
Act of 1933 (the "Act") relating to the issuance of up to 360,000 Common Shares,
without par value (the "Common Shares"), of the Company pursuant to the Uniroyal
Chemical Company, Inc. Retirement Reserve Fund Plan (the "Plan").
In connection with the foregoing, I have examined: (a) the Amended and
Restated Articles of Incorporation, and the By-Laws, as amended, of the Company,
(b) the Plan, and (c) such records of the corporate proceedings of the Company
and such other documents as I deemed necessary to render this opinion.
Based on such examination, I am of the opinion that the Common Shares
available for issuance under the Plan, when issued, delivered and paid for in
accordance with the terms and conditions of the Plan, will be legally issued,
fully paid and nonassessable.
I hereby consent to the filing of this Opinion as Exhibit 5.1 to the
Registration Statement and the reference to me in Item 5 of Part II of the
Registration Statement.
Very truly yours,
/s/ John T. Ferguson II
---------------------------------------
John T. Ferguson II
Exhibit 23.1
The Board of Directors
Crompton & Knowles Corporation
One Station Place, Metro Center
Stamford, CT 06902
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Registration
Statement/Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Stamford, Connecticut
October 17, 1996
Exhibit 24.1
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Vincent A. Calarco and John T. Ferguson II, and
each of them, severally, as his/her attorney-in-fact and agent, with full power
of substitution and resubstitution, for him/her and in his/her name, place, and
stead, in any and all capacities, to sign any and all pre- or post-effective
amendments to this Registration Statement, and to file the same with all
exhibits hereto, and other documents with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he/she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his/her substitutes, may lawfully do or cause to be done by virtue hereof.
SIGNATURE TITLE
--------- -----
/s/ Vincent A. Calarco Chairman, President and Chief Executive
------------------------- Officer (principal executive officer)
Vincent A. Calarco
/s/ Charles J. Marsden Vice President-Finance, Chief Financial
------------------------- Officer and Director (principal financial
Charles J. Marsden officer)
/s/ Peter Barna Treasurer (principal accounting officer)
-------------------------
Peter Barna
/s/ James A. Bitonti Director
-------------------------
James A. Bitonti
/s/ Robert A. Fox Director
-------------------------
Robert A. Fox
/s/ Roger L. Headrick Director
-------------------------
Roger L. Headrick
/s/ Leo I. Higdon, Jr. Director
-------------------------
Leo I. Higdon, Jr.
/s/ Michael W. Huber Director
-------------------------
Michael W. Huber
/s/ C.A. Piccolo Director
-------------------------
C.A. Piccolo
/s/ Patricia K. Woolf Director
-------------------------
Patricia K. Woolf, Ph.D
