AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ON DECEMBER 23, 1999
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933
------------------
AGWAY INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 15-0277720
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
333 BUTTERNUT DRIVE, DEWITT, NEW YORK 13214
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
AGWAY INC. EMPLOYEES' THRIFT INVESTMENT PLAN
(FULL TITLE OF THE PLAN)
DAVID M. HAYES, ESQ.
AGWAY INC.
P.O. BOX 4933
Syracuse, New York 13221-4933
(NAME AND ADDRESS OF AGENT FOR SERVICE)
315-449-6436
(TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (1) PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Participations in Agway Inc.
Employees' Thrift Investment Plan $ 25,000,000 $ 1.00 $ 25,000,000 $ 6,950.00
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Amounts contributed by employees are invested in a pool of the registrant's
securities; accordingly, each participation has been assigned a value of $1.00,
and each dollar invested is deemed to purchase one participation interest.
<PAGE>
The purpose of this Registration Statement is to register additional
participations in the Agway Inc. Employees' Thrift Investment Plan.
PART 1
The documents constituting Part I of this Registration Statement are provided to
participants in the Agway Inc. Employees' Thrift Investment Plan as provided by
Rule 428(b)(1) under the Securities Act of 1933, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Agway and the Plan with the Securities and
Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 are incorporated herein by reference:
a) The Annual Report on Form 10-K of Agway Inc. and consolidated
subsidiaries for the year ended June 30, 1999.
b) The Plan's Annual Report on Form 11-K filed as an Exhibit to the
Annual Report of Agway Inc. on Form 10-K for the fiscal year ended
June 30, 1999.
c) All other reports filed by Agway or the Plan pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934 subsequent
to June 30, 1999.
All documents filed by Agway or the Plan pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 from the date hereof and prior
to the filing of a post-effective amendment, which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Legal matters in connection with the securities offered by the Plan have been
passed upon for Agway by David M. Hayes, Esq., Senior Vice President, General
Counsel and Secretary of the Company; Mr. Hayes is also a Director of Agway
Financial Corporation.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS:
Article 12 of Agway's By-Laws outlines the right to indemnification, prepayment
of expenses incurred and claims for indemnification by directors and officers.
The full text of Article 12 of Agway's By-Laws is filed by reference to Item 15
of Registration Statement on Form S-3, File No. 333-34781 dated September 2,
1997.
Section 145 of the Delaware General Corporation Law permits a corporation to
indemnify its officers and directors against liabilities as provided for in
Agway's By-Laws. Under the terms of a Directors and Officers Liability and
Corporation Reimbursement Policy purchased by Agway, each of the directors and
officers of Agway is insured against loss arising from any claim or claims which
may be made during the policy period by reason of any wrongful act (as defined
in the policy) in their capacities as directors or officers. In addition, Agway
is insured against loss arising from any claim or claims which may be made
during the policy period against any director or officer of Agway by reason of
any wrongful act (as defined in the policy) in their capacities as directors or
officers, but only when the directors or officers shall have been entitled to
indemnification by Agway.
2
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4 Agway Inc. Employees' Thrift Investment Plan, as amended.
5 Opinion of Counsel, David M. Hayes, Esq.
5.2 Internal Revenue Service Determination Letter
23.1 Consent of Counsel, David M. Hayes, Esq. (Included in Exhibit
5)
23.2 Consent of Independent Accountants, PricewaterhouseCoopers LLP
3
<PAGE>
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
A. 1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
a. To include any Prospectus required by Section 10 (a) (3) of the
Securities Act of 1933;
b. To reflect in the Prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospects filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the volume
and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
c. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement,
including (but not limited to) any addition or deletion of a managing
underwriter;
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
B. That, for purposes of determining liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, and each
filing of the plan's annual report pursuant to 15(d) of the Securities
Exchange Act of 1934, that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by either of the registrant of expenses incurred or paid
by a director, officer or controlling person of such registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the questions whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
D. To remove from registration by means of a post-effective amendment any of
the securities which remain unsold at the termination of the offering.
E. To submit the plan or amendment to the plan to the Internal Revenue
Service (IRS) in a timely manner and to make all changes required by the
IRS in order to qualify the plan.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of DeWitt, and the State of New York, on December 21,
1999.
AGWAY INC.
(Registrant)
By /s/ Donald P. Cardarelli
-------------------------------------
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Cardarelli President and Chief Executive Officer Dec. 21,1999
(DONALD P. CARDARELLI) (Principal Executive Officer)
/s/ Peter J. O'Neill Senior Vice President, Finance & Control Dec. 21, 1999
(PETER J. O'NEILL) (Principal Financial Officer and
Principal Accounting Officer)
/s/ Gary K. Van Slyke Chairman of the Dec. 21, 1999
(GARY K. VAN SLYKE) Board and Director
/s/ Andrew J. Gilbert Vice Chairman of the Dec. 21, 1999
(ANDREW J. GILBERT) Board and Director
/s/ Kevin B. Barrett Director Dec. 21, 1999
(KEVIN B. BARRETT)
/s/ Keith H. Carlisle Director Dec. 21, 1999
(KEITH H. CARLISLE)
/s/ D. Gilbert Couser Director Dec. 21, 1999
(D. GILBERT COUSER)
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Ralph H. Heffner Director Dec. 21, 1999
(RALPH H. HEFFNER)
/s/ Robert L. Marshman Director Dec. 21, 1999
(ROBERT L. MARSHMAN)
/s/ Jeffrey B. Martin Director Dec. 21, 1999
(JEFFREY B. MARTIN)
/s/ Samuel F. Minor Director Dec. 21, 1999
(SAMUEL F. MINOR)
/s/ Richard K. Skellie Director Dec. 21, 1999
(RICHARD K. SKELLIE)
/s/ Carl D. Smith Director Dec. 21, 1999
(CARL D. SMITH)
/s/ Thomas E. Smith Director Dec. 21, 1999
(THOMAS E. SMITH)
/s/ Joel L. Wenger Director Dec. 21, 1999
(JOEL L. WENGER)
/s/ Edwin C. Whitehead Director Dec. 21, 1999
(EDWIN C. WHITEHEAD)
/s/ William W. Young Director Dec. 21, 1999
(WILLIAM W. YOUNG)
</TABLE>
6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the Plan) duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of DeWitt, and State of New York, on the
AGWAY INC. EMPLOYEES' THRIFT INVESTMENT PLAN
By /s/ Nels G. Magnuson
CHAIRMAN, EBPAC
7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
EXHIBITS
FILED WITH
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AGWAY INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT INDEX
EXHIBIT NUMBER
(4) Agway Inc. Employees' Thrift Investment Plan, as amended
(5) Opinion of counsel, David M. Hayes, Esq.
(5.2) Internal Revenue Service Determination Letter
(23.1) Consent of Counsel, David M. Hayes, Esq. (Including in Exhibit 5)
(23.2) Consent of Independent Accountants, Pricewaterhouse Coopers, LLP
EXHIBIT 4
<PAGE>
AGWAY, INC.
EMPLOYEES' THRIFT INVESTMENT PLAN
Amended and Restated as of May 17, 1999
<PAGE>
AGWAY, INC.
EMPLOYEES' THRIFT INVESTMENT PLAN
<TABLE>
<CAPTION>
TABLE OF CONTENTS
----------------- Page
----
<S> <C>
Section 1 - Definitions........................................................................................ 1
- -----------------------
Section 2 - Participation and Enrollment....................................................................... 8
- ----------------------------------------
2.01 Continued Participation...................................................................... 8
2.02 Eligibility.................................................................................. 8
2.03 Enrollment Procedures........................................................................ 9
2.04 Termination of Participation and Reemployment................................................ 9
2.05 Effect of Leave of Absence................................................................... 10
2.06 Change of Employment Status.................................................................. 10
Section 3 - Participants' Investments.......................................................................... 10
- -------------------------------------
3.01 Regular Investments.......................................................................... 10
3.02 Additional Pre-Tax Investments............................................................... 11
3.03 Additional After-Tax Contributions........................................................... 11
3.04 Change of Participant Investments............................................................ 11
3.05 Payment to Trustee........................................................................... 11
3.06 Rollover Investments......................................................................... 12
3.07 Transferred Investments...................................................................... 12
Section 4 - Company Contributions.............................................................................. 12
- ---------------------------------
4.01 Guaranteed Contributions and Bonus Contributions............................................. 12
4.02 Contributions in Stock....................................................................... 13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Con't)
------------------------- Page
----
<S> <C>
Section 5 - Limitations on Contributions....................................................................... 14
- ----------------------------------------
5.01 Limitation on Pre-Tax and Additional Pre-Tax Investments..................................... 14
5.02 Application of Actual Deferral Percentage Test............................................... 16
5.03 Adjustments to Comply with the Actual Deferral Percentage Test............................... 19
5.04 Application of Average Contribution Percentage Test.......................................... 21
5.05 Adjustments to Comply with the Average Contribution Percentage
Test......................................................................................... 25
5.06 Limit on Annual Addition..................................................................... 27
Section 6 - Investment of Participants' Investments and Company Contributions.................................. 30
- -----------------------------------------------------------------------------
6.01 Allocation of Investments.................................................................... 30
6.02 Change of Investment Election................................................................ 30
6.03 Participant Responsible for Investments...................................................... 30
6.04 Transfers of Investments..................................................................... 30
6.05 Valuation of Investments..................................................................... 31
6.06 Company Contributions Ineligible for Transfer................................................ 31
Section 7 - Investment Funds................................................................................... 31
- ----------------------------
7.01 Company Security Fund........................................................................ 31
7.02 Stock Fund................................................................................... 32
7.03 Bond Fund.................................................................................... 32
7.04 Cash Fund.................................................................................... 32
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Con't)
-------------------------
Page
----
<S> <C>
Section 8 - Maintenance and Valuation of Participants' Accounts................................................ 32
- ---------------------------------------------------------------
8.01 Participant Accounts......................................................................... 32
8.02 Valuation.................................................................................... 32
8.03 Special Valuation July 1, 1984............................................................... 33
8.04 Rollover and Transferred Investments......................................................... 33
Section 9 - Vesting of Participants' Investments and Company Contributions..................................... 33
- --------------------------------------------------------------------------
9.01 Vesting of Participant Investments........................................................... 33
9.02 Vesting of Company Contributions after May 17, 1999.......................................... 33
9.03 Vesting of Company Contributions before May 17, 1999......................................... 33
Section 10 - Withdrawal or Suspension of Participants' Investments and Company
- --------------------------------------------------------------------------------
Contributions While Employed........................................................................... 34
----------------------------
10.01 Withdrawals of Rollover and Transferred Investments.......................................... 34
10.02 Withdrawals While Employed................................................................... 34
10.03 Withdrawals After Age 59 1/2................................................................. 35
10.04 Hardship Withdrawals......................................................................... 35
10.05 Notification Requirement..................................................................... 37
Section 11 - Loans to Participants............................................................................. 37
- ----------------------------------
11.01 Authorization................................................................................ 37
11.02 Application Requirement...................................................................... 37
11.03 Criteria for Approval........................................................................ 38
11.04 Maximum Loan................................................................................. 38
11.05 Minimum Loan................................................................................. 38
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Con't)
-------------------------
Page
----
<S> <C>
Section 12 - Withdrawal of Participants' Investments & Company Contributions
- --------------------------------------------------------------------------------
Upon Termination of Employment.......................................................................... 39
------------------------------
12.01 Single Sum Payment........................................................................... 39
12.02 Installment Payments Following Retirement.................................................... 39
12.03 Cash-Outs.................................................................................... 40
12.04 Random, Non-Periodic Withdrawals............................................................. 40
12.05 Effect of Plan Termination or Sale of Company................................................ 40
12.06 Effect of Participant's Death Prior to Election.............................................. 41
12.07 Required Beginning Date...................................................................... 41
12.08 Eligible Rollover Distributions.............................................................. 42
12.09 Beneficiary Designations..................................................................... 42
12.10 Payments on Behalf of Participants........................................................... 43
12.11 Compliance with Code Section 401(a)(9)....................................................... 43
12.12 Distribution of Midstate and Seedway Assets.................................................. 43
Section 13 - Disbursements From Funds.......................................................................... 44
- -------------------------------------
13.01 Company Security Fund........................................................................ 44
13.02 Stock, Bond and Cash Funds................................................................... 44
13.03 Time of Distribution......................................................................... 44
Section 14 - Trust Fund........................................................................................ 45
- -----------------------
14.01 Appointment of Trustees; Execution of Trust Agreements....................................... 45
14.02 Investments by the Trustee................................................................... 45
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Con't)
-------------------------
Page
----
<S> <C>
Section 15 - Administration.................................................................................... 45
- ---------------------------
15.01 Administration Committee..................................................................... 45
15.02 Investment Committee......................................................................... 45
15.03 Named Fiduciaries............................................................................ 45
15.04 Committee Action and Compensation............................................................ 46
15.05 Committee Authority and Delegation........................................................... 46
15.06 Asset Management Authority of Investment Committee........................................... 46
15.07 Discretionary Authority of Administration Committee.......................................... 47
15.08 Standard of Committee Conduct................................................................ 48
15.09 Claims Procedures............................................................................ 48
Section 16 - General Provisions................................................................................ 48
- -------------------------------
16.01 Exclusive Benefit............................................................................ 48
16.02 No Alienation or Assignment.................................................................. 48
16.03 Risk Assumed by Participant.................................................................. 49
16.04 Plan Amendment or Termination................................................................ 49
16.05 Plan Expenses................................................................................ 49
16.06 Effect of Plan on Employment Rights.......................................................... 49
16.07 Participant Information...................................................................... 50
16.08 Plan Merger, Consolidation or Transfer....................................................... 50
Section 17 - Qualified Domestic Relations Orders............................................................... 50
- ------------------------------------------------
17.01 General...................................................................................... 50
17.02 Required Provisions.......................................................................... 50
17.03 Prohibited Provisions........................................................................ 51
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Con't)
-------------------------
Page
----
<S> <C> <C>
17.04 Payments after Earliest Retirement Age....................................................... 51
17.05 Plan Procedures.............................................................................. 52
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Section 18 - Top-Heavy Requirements............................................................................ 53
- -----------------------------------
18.01 General Rules................................................................................ 53
18.02 Determination of Top-Heaviness............................................................... 54
18.03 Top-Heavy Vesting Schedule................................................................... 58
18.04 Minimum Required Contribution................................................................ 59
18.05 Maximum Annual Addition under Super Top-Heavy Plan........................................... 60
</TABLE>
Appendix AA-1
Appendix BB-1
-vi-
<PAGE>
AGWAY, INC.
EMPLOYEES' THRIFT INVESTMENT PLAN
Originally effective as of October 1, 1965, Agway, Inc.
established a savings plan for Employees known as the Agway Employees' Incentive
Thrift Plan. The name of the plan was changed in 1984 to the Agway, Inc.
Employees' Thrift Investment Plan (the Plan). The purposes of the Plan are to
stimulate personal savings on the part of the employees by furnishing them with
an incentive through contributions by the Company matching a portion of their
savings, to give employees an opportunity to acquire securities of the Company
and become more interested in Company affairs, to provide additional funds at
retirement to supplement the benefits provided under any Agway retirement plan
and to provide an additional source of funds prior to retirement in the event of
need. Agway, Inc. hereby amends and restates the Plan, effective as of May 17,
1999, unless otherwise stated, in accordance with the following terms and
conditions. The Plan is intended to qualify as a profit sharing plan that
includes a cash or deferred arrangement within the meaning of Code Section
401(k).
Section 1 - Definitions
-----------------------
1.01 "Additional After-Tax Contributions" shall mean that portion of a
Participant's Investments made on a Compensation deduction basis prior
to July 1, 1984, which were in excess of 6% of the Participant's
Compensation and which were not matched by Company Contributions.
Effective July 1, 1987, Additional After-Tax Contributions also shall
include that portion of a Participant's Investments made on a
Compensation deduction basis on and after July 1, 1987, which are in
excess of 6% of the Participant's Compensation and which are not
matched by Company Contributions. Additional After- Tax Contributions
are described further in Section 3.03.
1.02 "Additional Pre-Tax Investments" shall mean that portion of a
Participant's Investments made on a Compensation reduction basis on and
after July 1, 1984, which are in excess of 6% of the Participant's
Compensation and which are not matched by Company Contributions.
Additional Pre-Tax Investments are described further in Section 3.02.
1.03 "Administration Committee" means the Employee Benefit Plans
Administration Committee of Agway, Inc., which is the committee
responsible for the general administration of the Plan as provided in
Section 15.
1.04 "After-Tax Investments" means the contributions made by a Participant
to the Plan on a Compensation deduction basis pursuant to Section
3.01(a).
<PAGE>
1.05 "Board of Directors" means the Board of Directors of Agway, Inc.
1.06 "Bond Fund" means the Investment Fund described in Section 7.03.
1.07 "Bonus Contribution" means the discretionary Company Contribution in
excess of 10% of a Participant's Regular Investments that may be made
pursuant to Section 4.01.
1.08 "Cash Fund" means the Investment Fund described in Section 7.04.
1.09 "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and applicable implementing regulations and rulings. References
to any section of the Code shall include any applicable successor
section or provision.
1.10 "Company" means Agway, Inc. and any successor by purchase, merger or
otherwise; and any such of its subsidiaries and affiliates (or
divisions thereof) as shall, from time to time, be authorized by the
Board of Directors to participate in the Plan, provided such subsidiary
or affiliate (or division) is authorized by its board of directors to
participate and makes or causes to be made contributions as provided
herein with respect to each Participant in the Plan who is its
employee. Entities participating in the Plan shall be identified on
Appendix A to the Plan.
1.11 "Company Contributions" means the amount of Guaranteed Contributions
and Bonus Contributions which the Company pays into the Plan in
accordance with the terms of Section 4.
1.12 "Company Security Fund" means the Investment Fund described in Section
7.01.
1.13 "Compensation"
(a) Compensation means the basic wages, salaries and other amounts
received by a Participant in cash for personal services
actually rendered in the course of employment with the Company
to the extent that the amounts are includable in gross income
(including,but not limited to, commissions paid sales persons,
variable compensation, and compensation for services on the
basis of a percentage of profits), excluding amounts paid as
awards,incentives, bonuses, overtime and Company contributions
to a plan of deferred compensation which are not includable in
the Employee's gross income for the taxable year in which
contributed. Compensation of a Participant also shall include
elective deferrals made by the Participant pursuant to Code
Sections 125, 401(k) or 402. Notwithstanding the foregoing, in
the case of a Participant who is employed by Telmark LLC, and
who is not a Highly Compensated Employee, Compensation also
shall include overtime.
-2-
<PAGE>
(b) The annual Compensation of each Employee taken into account
under the Plan shall not exceed the "OBRA '93 annual
compensation limit." The "OBRA '93 annual compensation limit"
is $150,000, as adjusted by the Commissioner of the Internal
Revenue Service for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Code. The cost
-of-living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which Compensation
is determined(determination period) beginning in such calendar
year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number
of months in the determination period, and the denominator of
which is 12.
1.14 "Current Market Value" of securities held by the Trustee under the Plan
shall be determined by the Trustee at their last published sale price
on the New York Stock Exchange or any other stock exchange or
exchanges, or, if no sale shall have been recorded in the case of
over-the-counter quotations, the last bid price at the close of
business on the day as of which the valuation is made or, if it be a
holiday, on the last business day preceding or as reported by a report
of such transactions in common use. If a security is listed on two or
more exchanges, the Trustee shall determine from time to time the
particular exchange which shall be used for purposes of this paragraph.
The value of any security which is not listed or dealt in on any
exchange shall be determined from any published quotations of sale
price or bid price which may be available to the Trustee, or, in the
discretion of the Trustee, quotations by a reputable broker dealing in
such securities may be used. Investments which are not currently quoted
shall be appraised at their fair market value in the opinion of the
Trustee. Any valuation made by the Trustee as herein provided shall be
conclusive as to the value of the trust (subject to deduction of
expenses or other obligations of the trust fund) and shall be binding
upon all persons interested in the Plan.
1.15 "Employee" means any person who has applied for and been hired in an
employment position as a common law employee of the Company; provided,
however, that an Employee shall not include any individual who is not
so recorded on the payroll records of the Company, including any such
person who is subsequently reclassified by a court of law or regulatory
body as a common law employee of the Company. For purposes of
clarification only and not to imply that the preceding sentence would
otherwise cover such person, the term Employee does not include any
individual who performs services for the Company as an independent
contractor, or under any other non-employee classification, nor does it
include any non-resident alien who receives no earned income (within
the meaning of Code Section 911(d)(2)) from the Company that
constitutes income from sources in the United States (within the
meaning of Code Section 861(a)(3)). The term Employee shall not include
any individual included in a collective bargaining unit unless the
collective bargaining agent for that unit has agreed to coverage
-3-
<PAGE>
under the Plan for one or more persons in that unit. In the case of any
person who is a "leased employee" of the Company, as that term is
defined under Code Section 414(n), the entire period during which such
person has performed services for the Company, a Subsidiary or an
Affiliate in such capacity shall be treated as continuous service
hereunder for purposes of determining eligibility for participation and
vesting under the Plan, except that such person shall not by reason of
such status become a Participant under the Plan.
1.16 "Enrollment Date" means the first day of any pay period of the Company
during which a Compensation deduction and/or reduction is made on
behalf of a Participant.
1.17 "Guaranteed Contribution" means the Company Contribution of 10% of a
Participant's Regular Investments that will be made pursuant to Section
4.01.
1.18 "Highly Compensated Employee" shall mean a highly compensated employee
within the meaning of Code Section 414(q). As set forth below, the term
"Highly Compensated Employee" includes highly compensated active
employees and highly compensated former employees. In the following
subsections, the term "determination year" means the current Plan Year.
(a) Highly Compensated Active Employee: For Plan Years that begin
before January 1, 1997, a highly compensated active employee
includes any Employee who performs service for the Company
during the determination year and who:
(i) Received compensation in excess of $75,000, as
indexed pursuant to Code Section 414(q), during the
determination year;
(ii) Received compensation in excess of $50,000, as
indexed pursuant to Code Section 414(q), during the
determination year, and was a member of the top-paid
group for such year (generally, the top 20 percent of
employees ranked on the basis of compensation);
(iii) Was an officer (as defined in Code Section 416(i)) of
the Company and received compensation during the
determination year that is greater than 50 percent of
the dollar limitation in effect under Code Section
415(b)(1)(A) during the year (if no officer has
satisfied this compensation requirement, the
highest-paid officer shall be treated as a Highly
Compensated Employee); or
(iv) Was a five-percent owner (as defined in Code Section
416(i)(1)) of the Company at any time during the
determination year.
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<PAGE>
For Plan Years that begin after December 31, 1996, a highly
compensated active employee includes any Employee who performs
service for the Company during the Plan Year and who (I) for
the preceding determination year, received compensation from
the Company in excess of $80,000 (as adjusted by the Secretary
of the Treasury), or (II) was a five-percent owner (as defined
in Code Section 416(i)(1)) of the Company at any time during
the determination year or the preceding determination year.
(b) Highly Compensated Former Employee: A highly compensated
former employee includes any Employee who separated from
service (or was deemed to have separated) prior to the
determination year, performs no service for the Company during
the determination year and was a highly compensated active
employee for either the separation year or any determination
year ending on or after the Employee's 55th birthday.
(c) Family Member Aggregation Rule: For Plan Years that begin
before January 1, 1997, if an Employee is, during a
determination year, a family member of either: (i) a five-
percent owner who is an active or former Employee or (ii)
a Highly Compensated Employee who is one of the ten most
highly-paid Highly Compensated Employees ranked on the basis
of compensation paid by the Company during such year, then the
family member and the five-percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the
family member and five-percent owner or top - ten Highly
Compensated Employee shall be treated as a single Employee
receiving compensation and Plan contributions or benefits
equal to the sum of such compensation and contributions or
benefits of the family member and five-percent owner or top-
ten Highly Compensated Employee.
(d) Incorporation of Section 414(q): The determination of who is a
Highly Compensated Employee under the above rules, including
the determinations of the number and identity of employees in
the top-paid group, the top 100 employees, the number of
employees treated as officers, the number and identity of
family members, and the compensation that is considered, shall
be made in accordance with the terms of Code Section 414(q),
which are hereby incorporated by reference.
(e) Calendar Year Election: The Company has elected to apply the
above definition of Highly Compensated Employee by using
calendar year data pursuant to Treasury Regulation Section
1.414(q)-1T, Q&A-14.
1.19 "Hour of Service" shall mean, with respect to any applicable
computation period, (i) each hour for which the Employee is paid or
entitled to payment for the performance of duties for the Company, a
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<PAGE>
Subsidiary or an Affiliate, (ii) each hour for which the Employee is
paid or entitled to payment by the Company, a Subsidiary or an
Affiliate on account of a period during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence; provided that not
more than 501 hours shall be credited for any such single continuous
period, and (iii) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Company, a
Subsidiary or an Affiliate, excluding any hour credited under (i) or
(ii). No hours shall be credited on account of any period during which
the Employee performs no duties and receives payment solely for the
purpose of complying with worker's compensation or unemployment
compensation laws. Hours of Service also shall include hours credited
during an approved but unpaid leave of absence and qualified military
service to the extent required by Code Section 414(u).
The Hours of Service to be so credited shall be determined pursuant to
29 Code of Federal Regulations Section 2530.200b-2(b) and (c) as
promulgated by the United States Department of Labor.
1.20 "Investment Committee" means the Employee Benefit Plans Investment
Committee of Agway, Inc., which is the committee responsible for the
management of the assets of the Plan as provided in Section 15.
1.21 "Investment Fund" means the Company Security Fund, the Stock Fund, the
Bond Fund, and/or the Cash Fund, as the context may require.
1.22 "Job Disability" or "Job Disabled" means a disability from bodily
injury or disease by reason of which the Employee is totally
incapacitated, mentally or physically, for the further performance of
the Employee's duty with the Company, provided that a physician or
physicians as may be designated by the Administration Committee
shall certify, and the Administration Committee shall find, that such
incapacity is likely to be permanent.
1.23 "Notification"
(a) For purposes of changing the amount of Participant Investments
pursuant to Section 3.04, changing the Investment Fund into
which Participant Investments are directed pursuant to Section
6.02, and making transfers between Investment Funds pursuant
to Sections 6.04 and 6.05, Notification means receipt by the
Administration Committee or its designee of a properly
completed instruction pursuant to the telephone, electronic or
other instruction system established by the Administration
Committee.
(b) For purposes of benefit withdrawals and distributions pursuant
to Section 10 and Section 12, Notification means (i)
Administration Committee receipt of a properly completed form
(provided by the Administration Committee) prior to the date
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<PAGE>
the withdrawal or distribution will be paid, or (ii) receipt
by the Administration Committee or its designee of a properly
completed instruction pursuant to the telephone, electronic or
other instruction system established by the Administration
Committee.
1.24 "Participant" means any Employee or former Employee who has elected to
participate in the Plan as provided in Section 2, and who (as of the
date of determination) has not withdrawn, or received a distribution
of, the Participant's entire interest in the Plan. In addition to
individuals described in the preceding sentence, with respect to
Rollover Investments, the term Participant shall include a former
employee of the Company, or of a Subsidiary or Affiliate, who is
eligible to receive an eligible rollover distribution (as defined in
Code Section 402(c)(4)) from the Employees' Retirement Plan of Agway,
Inc.; provided, however, that such former employee shall be a
Participant in the Plan with respect to these rollover amounts only if
and to the extent such eligible rollover distribution is rolled over,
or directed, to this Plan.
1.25 "Participant's Investments" shall mean a Participant's Regular
Investments, Additional Pre- Tax Investments, Additional After-Tax
Contributions, Rollover Investments, and Transferred Investments, if
any; provided, however, that Rollover Investments and Transferred
Investments shall not be taken into account in determining the
Guaranteed Contribution or Bonus Contribution to be made on behalf of
the Participant.
1.26 "Plan Year" means a twelve (12) month period from July 1 through June
30.
1.27 "Pre-Tax Investments" means the contributions made by a Participant on
a Compensation reduction basis pursuant to Section 3.01(b).
1.28 "Regular Employee" means any Employee who, on the basis of his or her
regular, stated work schedule is classified as a "Regular Employee" by
the Company in accordance with Agway, Inc. Personnel Policy No. 104 (or
any applicable successor policy).
1.29 "Regular Investments" shall mean that portion of the Participant's
contributions as provided in Section 3.01, which are matched by Company
Contributions as provided in Section 4.01.
1.30 "Retirement" means a Participant's separation from service with the
Company upon or after the Participant's attainment of age 55 and the
completion of twelve months of employment with the Company and/or a
Subsidiary or Affiliate.
1.31 "Rollover Investments" shall mean that portion of a Participant's
Investments which were transferred to this Plan either from another
qualified plan or from a rollover individual retirement account
pursuant to Section 3.06.
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<PAGE>
1.32 "Severance from Service Date" shall mean the earlier of (i) the date on
which an Employee quits, retires, is discharged, or dies, or (ii) the
first anniversary of the first date of an Employee's absence from
service with the Company, a Subsidiary or an Affiliate for any reason
other than (i) above.
1.33 "Spousal Consent" shall mean written consent given by a Participant's
spouse to a designation by the Participant of a specified person as
beneficiary, other than the Participant's spouse, to receive a benefit
under the Plan following the Participant's death. Such consent must be
duly witnessed by a Plan representative or notary public and shall
acknowledge the effect on the spouse of the Participant's election. A
spouse may not waive the right to consent to future changes in a
Participant's designation of another beneficiary with respect to which
the spouse's consent was obtained initially. A valid consent with
respect to a specified beneficiary cannot be revoked. The requirement
for Spousal Consent may be waived by the Administration Committee in
accordance with applicable law.
1.34 "Stock Fund" means the Investment Fund described in Section 7.02.
1.35 "Subsidiary" or "Affiliate" means any company not participating in the
Plan which is (a) a member of a controlled group of corporations or a
group of trades or businesses under common control (as defined in Code
Sections 414(b) and (c)) of which the Company is a member, (b) a member
of an affiliated service group (as defined in Code Section 414(m))
which includes the Company, and (c) any other entity that must be
aggregated with the Company under Code Section 414(o). The term
controlled group of corporations has the meaning given in Code Section
1563(a), determined without regard to subsections (a)(4) and (e)(3)(C).
1.36 "Transferred Investments" shall mean that portion of a Participant's
Investments which were transferred to this Plan from another qualified
plan of the Company pursuant to Section 3.07. Transferred Investments
shall include amounts received by the Plan from (a) the Retirement Plan
for Salaried Employees of Eastern States Farmers' Exchange
Incorporated, (b) the Midstate Potato Distributors Employees' Profit
Sharing and Savings Plan, and (c) the Seedway Employees' Profit Sharing
and Savings Plan.
1.37 "Trustee" means the Trustee provided for in Section 14.
1.38 "Valuation Date" means each business day on which the New York Stock
Exchange is open for the public trading of securities. For Plan
transactions, values shall be determined as of the end of the
applicable Valuation Date.
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<PAGE>
1.39 "Year of Eligibility Service" shall mean a 12-month "computation
period" during which the Employee has completed 1,000 Hours of Service.
The first computation period for any Employee is the
12-consecutive-month period that begins on the date the Employee first
performs an Hour of Service ("employment commencement date").
Succeeding 12- month computation periods begin on the first day of each
Plan Year, starting with the first Plan Year that begins after the
employment commencement date.
Section 2 - Participation and Enrollment
----------------------------------------
2.01 Continued Participation
-----------------------
Any Employee who was a Participant in the Plan on May 16, 1999 shall
continue to be a Participant on and after May 17, 1999, subject to the
other terms and conditions of the Plan.
2.02 Eligibility
-----------
(a) After May 16, 1999, any Regular Employee may become a
Participant on any Enrollment Date following the Employee's
date of employment with the Company and the Employee's
completion of the enrollment procedures established by the
Administration Committee in accordance with Section 2.03.
(b) Any Employee who is not a Regular Employee may become a
Participant on any Enrollment Date following the date the
Employee completes a Year of Eligibility Service and completes
the enrollment procedures established by the Administration
Committee in accordance with Section 2.03.
(c) In applying the above requirements, an Employee's service with
any Subsidiary or Affiliate shall be taken into account.
(d) Any person included in a unit of employees covered by a
collective bargaining agreement (as defined in Code Section
7701)) between Employee representatives and the Company or a
Subsidiary or Affiliate shall not be eligible to participate
in the Plan, unless such collective bargaining agreement
expressly provides for the inclusion of such persons as
Participants in the Plan.
(e) Notwithstanding the foregoing of this Section 2.02, an
Employee who is eligible to make or receive a contribution
under a separate tax-qualified retirement plan maintained for
the benefit of Employees employed at a specified division,
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<PAGE>
operation or subsidiary of the Company shall not be eligible
to participate in this Plan. The preceding exclusion from
participation in this Plan also shall apply to Employees who
may become covered by the separate plan maintained for
division employees after satisfying that plan's age and
service requirements for eligibility. Notwithstanding the
foregoing of this Section 2.02(e), an Employee employed at
the Country Best Florida division of Agway Consumer Products,
Inc. or at the Seedway division of the Company shall be
eligible to participate in this Plan effective as of the later
of (i) the date the Employee satisfies the other eligibility
and participation requirements of this Plan, or (ii) January
1, 1998.
2.03 Enrollment Procedures
---------------------
The Administration Committee shall establish (and, in its discretion,
may modify) telephone, electronic or other procedures pursuant to which
an eligible Employee may (a) enroll or re-enroll in the Plan, and (b)
authorize the reduction or deduction of Regular Investments, Additional
Pre- Tax Investments and Additional After-Tax Investments from the
Employee's Compensation.
2.04 Termination of Participation and Reemployment
---------------------------------------------
A Participant shall cease to be a Participant on the date the
Participant terminates employment with the Company, a Subsidiary or an
Affiliate unless the Participant is entitled to benefits under the
Plan, in which event the Participant's participation shall terminate
when those benefits are distributed to him. A Participant who
terminates employment and subsequently becomes an Employee, shall be
eligible to re-enroll in the Plan immediately upon again becoming an
Employee and satisfying the requirements of Section 2.03.
2.05
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Effect of Leave of Absence
- --------------------------
(a) An Employee shall retain the status of a Participant in the
Plan, even though not contributing to the Plan, while on an
approved leave of absence as defined in Agway, Inc. Personnel
Policy No. 600 (or any applicable successor policy).
(b) Upon return from such an approved leave of absence, the
Participant's Investments shall be resumed immediately without
election on the Participant's part, subject to the suspension
provisions of Section 10.
(c) Notwithstanding any contrary term or provision of the Plan,
the Plan shall be administered in accordance with the Family
and Medical Leave Act and the Uniformed Services Employment
and Reemployment Rights Act.
2.06 Change of Employment Status
---------------------------
A Participant who remains in the employ of the Company, a Subsidiary,
or an Affiliate but who ceases to be an Employee shall continue to be a
Participant in the Plan but shall not be eligible to make any
Participant Investments or receive allocations of Company Contributions
while the Participant's employment status is other than as an Employee.
Section 3 - Participants' Investments
-------------------------------------
3.01 Regular Investments
-------------------
Subject to the limitations of Section 5, a Participant may elect to
make Regular Investments to the Plan of 1% to 6%, in multiples of 1%,
of the Participant's Compensation. A Participant's Regular Investments
shall be made to the Plan in one, or a combination, of the following
methods as shall be elected by the Participant:
(a) After-Tax Investments. Under this method, the Participant's
----------------------
Regular Investments shall be made by way of Compensation
deductions in a manner to be determined by the Administration
Committee.
(b) Pre-Tax Investments. Under this method, a Participant may, in
-------------------
lieu of making all or a percentage of the Participant's
Regular Investments as After-Tax Investments under paragraph
(a) above, elect to have the Participant's subsequent
Compensation reduced, and have that amount contributed to the
Plan by the Company.
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<PAGE>
3.02 Additional Pre-Tax Investments
------------------------------
Subject to the limitations of Section 5, a Participant who has
elected to make the maximum amount of Regular Investments under Section
3.01 may elect to make Additional Pre-Tax Investments of not less than
1% and not more than 9%, in multiples of 1%, of the Participant's
Compensation, as elected by the Participant, or in such additional
amounts above 9% as allowed under rules adopted by the Administration
Committee and uniformly applicable to all Participants similarly
situated, provided that the Additional Pre-Tax Investments so elected,
when added to the Regular Investments elected under Section 3.01 and
the Additional After-Tax Contributions elected under Section 3.03 do
not exceed 15% of the Participant's Compensation, in the aggregate.
Such Additional Pre-Tax Investments shall be made by Compensation
reduction and shall be contributed to the Plan by the Company. A
Participant may not make Additional Pre-Tax Investments during a
payroll period unless the Participant also is making the maximum amount
of Regular Investments under Section 3.01.
3.03 Additional After-Tax Contributions
----------------------------------
Subject to the limitations of Section 5, a Participant who has
elected to make the full amount of Regular Investments under Section
3.01 may elect to make Additional After-Tax Contributions of not less
than 1% and not more than 9%, in multiples of 1%, of the Participant's
Compensation, as elected by the Participant, or in such additional
amounts above 9% as allowed under rules adopted by the Administration
Committee and uniformly applicable to all Participants similarly
situated, provided that the Additional After-Tax Contributions so
elected, when added to the Regular Investments elected under Section
3.01 and the Additional Pre-Tax Investments elected under Section 3.02
do not exceed 15% of the Participant's Compensation, in the aggregate.
Such Additional After-Tax Contributions shall be made by Compensation
deduction and shall be contributed to the Plan by the Company. A
Participant may not make Additional After-Tax Contributions during a
payroll period unless the Participant also is making the maximum amount
of Regular Investments under Section 3.01.
3.04 Change of Participant Investments
---------------------------------
A Participant may change the amount of the Participant's Investments
by providing the Administration Committee (or its designee) with
Notification. The effective date for a change in a Participant's
Investments shall be the beginning of the pay period immediately
following the Administration Committee's (or its designee's) receipt of
Notification. A change in a Participant's Investments pursuant to this
Section 3.04 shall not affect any Compensation deduction required to
repay a Plan loan.
3.05 Payment to Trustee
-------------------
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<PAGE>
Participant Investments for any month will be paid by or in respect
of the Company to the Trustee as soon as reasonably feasible, but in no
event later than the 15th business day of the month that follows the
month during which the Compensation deduction or reduction is made.
3.06 Rollover Investments
--------------------
. With the permission of the Administration Committee granted under
rules adopted by said Committee and uniformly applicable to all
Participants similarly situated, and without regard to any limitations
on contributions set forth in Section 5, the Plan may receive from or
on behalf of a Participant, in cash, any amount distributable to or
previously received by the Participant from a qualified plan, either
directly from such qualified plan, directly from the Participant within
60 days after such receipt, or indirectly from a rollover individual
retirement account within the time prescribed by applicable law,
provided that (i) such amount includes no assets other than those
attributable to employer contributions and earnings on employee
contributions under plans qualified under Section 401(a) of the Code,
(ii) such amount includes no assets which are attributable to
contributions made while the Participant was a key employee in a
top-heavy plan, as those terms are defined in Section 416 of the Code;
and (iii) such amount is not subject to the joint and survivor annuity
or pre-retirement survivor annuity requirements of Code Section
401(a)(11).
3.07 Transferred Investments
-----------------------
(a) With the permission of the Administration Committee granted
under rules adopted by said Committee and uniformly applicable
to all Participants similarly situated, and without regard to
any limitations on contributions set forth in Section 5, the
Plan may accept from another qualified plan of the Company an
amount which either is transferred to this Plan for the
account of the Participant or which the Participant elects to
have transferred for the Participant's account.
(b) As of September 1, 1998, assets of the Midstate Potato
Distributors Employees' Profit Sharing and Savings Plan
("Midstate Plan") and assets of the Seedway Employees' Profit
Sharing and Savings Plan ("Seedway Plan") were transferred to
this Plan pursuant to a merger of the Midstate Plan and the
Seedway Plan into this Plan. The benefits of affected
Participants that were merged into this Plan from the Midstate
Plan and/or the Seedway Plan (i)shall be fully vested and non-
forfeitable by Participants, (ii) shall be accounted for
separately for each affected Participant,(iii) may be invested
in any of the Investment Funds as directed by the Participant
in accordance with Section 6, and (iv) shall be distributed in
accordance with Section 12.12.
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Section 4 - Company Contributions
---------------------------------
4.01 Guaranteed Contributions and Bonus Contributions
------------------------------------------------
(a) The Company shall contribute to the Plan on behalf of each
of its participating Employees an amount equal to at least
10%, but not more than 50% of the Regular Investments, not in
excess of 6% of the Participant's Compensation, made for each
payroll period by or on behalf of each such Participant. The
Guaranteed Contribution of 10% of Regular Investments for each
payroll period shall be paid to the Trustee promptly after the
payment of the Participant's Investments for such payroll
period, and shall be allocated to the Participant's Company
Security Fund. The discretionary Bonus Contribution, if any,
above 10% of the Regular Investments shall be paid in
accordance with the terms and conditions described in
subsections (b) and (c) below and shall be paid no later than
the time prescribed by law for filing the federal income tax
return for the Company for the applicable tax year (including
extensions thereof). The discretionary percentage contribution
may be paid without regard to current or accumulated earnings
and profits, as determined by the Board of Directors.
(b) Bonus Contributions, if any, shall be allocated to the Company
Security Fund of each Participant who made Participant
Investments during the Plan Year to which the Bonus
Contribution relates and who has not withdrawn (or received a
distribution of) the Participant's entire interest in the Plan
as of the last day of the month during which the Bonus
Contribution was authorized by the Board of Directors;
provided, however, that a vested former Employee who has
withdrawn (or received a distribution of) his or her entire
interest in the Plan as of the last day of the month during
which the Bonus Contribution was authorized shall receive an
allocation of the Bonus Contribution, based upon his or her
Participant Investments made during the Plan Year to which the
Bonus Contribution relates.
(c) In the event that the Board of Directors authorizes a Bonus
Contribution to be applied prospectively during any Plan Year,
the Bonus Contribution rate is to become effective beginning
with the pay period immediately following the first of the
next ensuing calendar month.
(d) Notwithstanding the foregoing of this Section 4.01, the amount
or percentage of any Bonus Contribution to be made on behalf
of Participants employed at the Country Best Florida division
of Agway Consumer Products, Inc. shall be
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determined by the board of directors of Agway Consumer
Products, Inc. Any Bonus Contribution authorized pursuant to
this subsection (d) shall be allocated in the manner described
in subsections (b) and (c) above.
4.02 Contributions in Stock
----------------------
In satisfaction of its obligations under Section 4.01, the Company
may, at its option, deliver treasury stock or authorized and unissued
shares of cumulative preferred stock of the Company at the aggregate
Current Market Value of the stock so delivered on the date of delivery.
Section 5 - Limitations on Contributions
----------------------------------------
5.01 Limitation on Pre-Tax and Additional Pre-Tax Investments
--------------------------------------------------------
.
(a) Compensation Deferral Cap: This Plan shall not accept Pre-Tax
Investments or Additional Pre-Tax Investments in excess of the
"Compensation Deferral Cap" for each Participant for the
Participant's taxable year.
"Compensation Deferral Cap" means the limit on Pre-Tax
Investments, Additional Pre-Tax Investments and other elective
deferrals that can be made for a Participant for the
Participant's taxable year. The Compensation Deferral Cap is a
base amount of $7,000, adjusted as of each January 1 in
accordance with Code Section 402(g)(5).
As further set forth in Code Section 402(g), the Compensation
Deferral Cap applies to a Participant's total elective
deferrals, not only Pre-Tax Investments and Additional Pre-Tax
Investments. For this purpose, the term "elective deferrals"
means:
(i) Elective contributions under any qualified cash or
deferred arrangement within the meaning of Code
Section 401(k);
(ii) Company contributions to any simplified employee
pension plan within the meaning of Code Sections
408(k) or 402(h)(1)(B);
(iii) Company contributions, pursuant to a salary reduction
agreement, to any annuity contract within the meaning
of Code Section 403(b);
(iv) Deductible employee contributions to any trust
described in Code Section 501(c)(18); and
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<PAGE>
(v) Compensation deferred under any deferred compensation
plan within the meaning of Code Section 457(b).
The Compensation Deferral Cap applies to such arrangements of
all employers, not only to arrangements of the Company and its
Subsidiaries and Affiliates. To the extent provided in
proposed Treasury regulation Section 1.402(g)-1, the
Compensation Deferral Cap may be increased for certain
Employees who make elective deferrals to an annuity within the
meaning of Code Section 403(b).
(b) Distribution of Excess Deferrals: Although the Plan will not
accept Pre-Tax Investments or Additional Pre-Tax Investments
above the Compensation Deferral Cap, a Participant may have
excess deferrals when the Participant's elective deferrals
under all the above arrangements are added together at the end
of the Participant's taxable year. (Any excess amounts
returned pursuant to comply with Code Section 415 are not
counted as elective deferrals.) If this situation arises, the
excess deferrals shall be deemed to have been distributed to
the Participant and reinvested in the Plan as After-Tax
Investments to the extent required to obtain any Company
matching contributions pursuant to Section 4.01. If there are
remaining excess deferrals, the Participant may request the
Administration Committee to distribute all or part of the
excess deferrals from this Plan. Any such request shall be
made and complied with in accordance with the following terms
and conditions:
(i) The Participant must request the distribution in
writing, after the Participant's taxable year has
ended, but no later than the following March 1.
However, to the extent the Participant has excess
deferrals when only deferrals under this Plan and any
other plans of the Company (and its Subsidiaries and
Affiliates) are taken into account, the Participant
will be deemed to have requested a distribution of
such excess deferrals. The Administration Committee
shall determine the amount of excess deferrals to be
distributed from each plan.
(ii) Any written request must specify the amount of the
Pre-Tax Investments and Additional Pre-Tax
Investments that are being designated as excess
deferrals for distribution. The designated amount
cannot be greater than the Pre-Tax Investments and
Additional Pre-Tax Investments that were made for the
taxable year in question.
(iii) Following a request that satisfies the above
requirements (including a deemed request under
subsection (i) above), the Administration Committee
shall distribute the excess deferrals, and allocable
income, to the Participant by the first April 15
after the Participant's taxable year ends.
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<PAGE>
(iv) For purposes of subsection (iii) above, the income
allocable to excess deferrals is equal to the sum of
the allocable gain or loss for the taxable year of
the Participant plus the allocable gain or loss for
the period between the end of the taxable year and
the date of the distribution. The Plan may use any
reasonable method for computing the income allocable
to excess deferrals provided that the method (A) does
not violate Code Section 401(a) (4), (B) is used
consistently for all Participants and for all
corrective distributions under the Plan for a Plan
Year, and (C) is used by the Plan for allocating
income to Participants' accounts. Alternatively, the
Plan may use any method for computing income
allocable to excess deferrals which is specified in
Treasury regulation Section 1.402(g)-1(e)(5) or other
guidance issued by the Internal Revenue Service. Any
distribution of less than the Participant's full
excess deferrals and allocable income will be treated
as a pro rata distribution of excess deferrals and
--------
income.
(c) Coordination with Distribution of Excess Contributions:
Notwithstanding the above provisions of this Section, the
amount of excess deferrals that may be distributed to a
Participant shall be reduced by any Excess Contributions
previously distributed to the Participant or recharacterized
pursuant to Section 5.03.
(d) Incorporation of Section 402(g) by Reference: In addition to
the specific provisions set forth above, the terms of Code
Section 402(g), and implementing regulations are hereby
incorporated by reference into this Plan.
5.02 Application of Actual Deferral Percentage Test
----------------------------------------------
(a) Actual Deferral Percentage Test: For each Plan Year, the
Actual Deferral Percentage (see subsection (b) below) for the
---
group of Participants who are Highly Compensated Employees and
the Actual Deferral Percentage for the group of Participants
who are not Highly Compensated Employees shall satisfy one of
the following two tests.
(i) General Rule: The Actual Deferral Percentage for the
group of Participants who are Highly Compensated
Employees shall not be more than 1.25 times the
Actual Deferral Percentage for the group of
Participants who are not Highly Compensated
Employees.
(ii) Alternative Test: The Actual Deferral Percentage for
the group of Participants who are Highly Compensated
Employees shall not be more than two percentage
points greater than the Actual Deferral Percentage
for
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<PAGE>
the group of Participants who are not Highly
Compensated Employees. In order to use this
alternative test, the Actual Deferral Percentage for
the group of Participants who are Highly Compensated
Employees must not be more than twice the Actual
Deferral Percentage for the group of Participants who
are not Highly Compensated Employees.
(iii) Testing Period: For purposes of applying the General
--------------
Rule and Alternative Test described above, (A) for
Plan Years that began before January 1, 1997, the
Actual Deferral Percentage for the group of
Participants who are Highly Compensated Employees is
compared to the Actual Deferral Percentage for the
group of Participants who are not Highly Compensated
Employees in the same Plan Year, and (B) for Plan
Years that begin after January 1, 1997, the Actual
Deferral Percentage for the group of Participants who
are Highly Compensated Employees for the current Plan
Year is compared to the Actual Deferral Percentage
for the group of Participants who were not Highly
Compensated Employees for the prior Plan Year.
Notwithstanding the above provisions, the terms of Treasury
regulation Section 1.401(m)-2 shall be applied to prevent
multiple use of the alternative test in subsection (ii) above
and Section 5.04(a)(ii) below to satisfy both the Actual
Deferral Percentage Test and Average Contribution Percentage
Test.
(b) Actual Deferral Percentage: For both the above tests, the
Actual Deferral Percentage for the group of Participants who
are Highly Compensated Employees and the Actual Deferral
Percentage for the group of Participants who are not Highly
Compensated Employees shall be the average of the following
actual deferral ratios, calculated separately for each
Participant in the respective group:
(i) The amount of "Company contributions" (as explained
below) actually paid over to the Plan on behalf of
such Participant for the Plan Year, to
(ii) The Participant's "Statutory Compensation" for the
Plan Year.
In making the foregoing calculations, "Company contributions"
on behalf of any Participant shall include Pre-Tax Investments
and Additional Pre-Tax Investments made pursuant to the
Participant's deferral election (including excess deferrals of
Highly Compensated Employees), but exclude (A) excess
deferrals of Participants who are not Highly Compensated
Employees that arise solely from Pre-Tax Investments and
Additional Pre-Tax Investments and any elective deferrals made
under any other plans of the Company, and (B) any Pre-Tax
Investments and Additional Pre-Tax Investments that are taken
into account in the contribution
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<PAGE>
percentage test described in Section 5.04 if it needs to be
performed (provided the Actual Deferral Test is satisfied both
with and without excluding the Pre-Tax Investments and
Additional Pre-Tax Investments).
"Statutory Compensation" means a Participant's compensation,
determined under any definition that satisfies Code Section
414(s), and shall be used in performing the actual deferral
percentage test and the average contribution percentage test.
For any given year, the same definition of Statutory
Compensation shall be applied to all Participants in
performing the tests.
In determining Actual Deferral Percentages, the actual
deferral ratio is zero for an Employee who is eligible to
elect, but who does not elect, Pre-Tax Investments and
Additional Pre-Tax Investments for a Plan Year. Statutory
Compensation shall be taken into account only for the part of
a Plan Year in which the Employee is eligible to participate
in the Plan. If the Actual Deferral Percentage Test is not
satisfied initially, corrective actions shall be taken
pursuant to Section 5.03 until the test is satisfied.
(c) Applying the Actual Deferral Percentage Test:
(i) Calculation: The actual deferral ratio for each
Participant and the Actual Deferral Percentage for
each group shall be calculated to the nearest
one-hundredth percent.
(ii) Family Member Aggregation Rule: For Plan Years that
begin before January 1, 1997, for purposes of
determining the actual deferral ratio of a
Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees,
the Pre - Tax Investments, Additional Pre - Tax
Investments and Compensation of such Participant
shall include the Pre-Tax Investments, Additional
Pre - Tax Investments and Compensation for the Plan
Year of the Participant's family members (as defined
in Code Section 414(q)(6)). Family members with
respect to such Highly Compensated Employees shall
be disregarded as separate Employees in determining
the Actual Deferral Percentage both for Participants
who are not Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(iii) Aggregation of Plans: In the event that this Plan
satisfies the requirements of Code Sections 401(k),
401(a)(4) or 410(b) only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such Code Sections only
if aggregated with this Plan, then this Section 5
shall be applied by determining the Actual Deferral
Percentage of
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<PAGE>
Employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year
and employ the same Actual Deferral Percentage
testing method. All cash or deferred arrangements
included in a plan are treated as a single cash or
deferred arrangement, except as otherwise provided
under Treasury regulations.
(iv) Aggregation of Highly Compensated Participant
Contributions: The actual deferral ratio for any
Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have salary
reduction contributions allocated to the
Participant's account under two or more arrangements
described in Code Section 401(k), that are maintained
by the Company (or Subsidiary or an Affiliate), shall
be determined as if such salary reduction
contributions were made under a single arrangement.
If a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have
different plan years, all cash or deferred
arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated
under Treasury regulations promulgated under Code
Section 401(k).
(v) Plan Year to which Contributions Relate: For purpose
of determining the Actual Deferral Percentage test,
salary reduction contributions must be made before
the last day of the twelve-month period immediately
following the Plan Year to which the contributions
relate.
(vi) Company Records: The Company shall maintain records
sufficient to demonstrate satisfaction of the Actual
Deferral Percentage test.
(vii) Other Requirements: The determination and treatment
of Actual Deferral Percentage amounts of any
Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(d) Incorporation of Section 401(k) by Reference: In addition to
the specific provisions set forth above, the terms of Code
Section 401(k) are hereby incorporated by reference.
5.03 Adjustments to Comply with the Actual Deferral Percentage Test
--------------------------------------------------------------
The Administration Committee shall exercise one or more of the
following options, at its discretion, to assure the Plan's compliance
with the Actual Deferral Percentage test. All such actions shall be
taken in a uniform and nondiscriminatory manner.
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<PAGE>
(a) Modification of Elections: The Administration Committee may
suspend or reduce Pre-Tax Investments and/or Additional Pre-
Tax Investments of Highly Compensated Employees, despite their
elections.
(b) Distribution of Excess Contributions: Pre-Tax Investments and
Additional Pre-Tax Investments that exceed the Actual Deferral
Percentage allowable for Participants who are Highly
Compensated Employees shall be referred to as "Excess
Contributions." The Administration Committee may distribute
Excess Contributions, and allocable income, to Participants
who are Highly Compensated Employees. The Administration
Committee shall designate any such distribution as a
distribution of Excess Contributions (and income). The
distribution shall be done as follows:
(i) For Plan Years that begin before January 1, 1997, the
actual deferral ratio of the Participant (who also is
a Highly Compensated Employee) with the highest ratio
shall be reduced until the Actual Deferral Percentage
test is satisfied, or until the Participant's ratio
equals that of the Participant (who also is a Highly
Compensated Employee) with the next highest ratio,
whichever occurs first. The process is repeated until
the Actual Deferral Percentage test is satisfied.
(ii) For Plan Years that begin after January 1, 1997, the
total amount of Excess Contributions to be
distributed shall be calculated in the manner
described in (i) above. However, rather than
distributing Excess Contributions to the Participant
who is the Highly Compensated Employee with the
highest Actual Deferral Percentage, the Actual
Deferral Percentage amounts of the Participant who
is the Highly Compensated Employee with the highest
dollar amount of Actual Deferral Percentage amounts
will be reduced by the dollar amount required to
cause the Participant's Actual Deferral Percentage
amounts to equal the dollar amount of the Actual
Deferral Percentage amounts of the Participant who is
the Highly Compensated Employee with the next highest
dollar amount of Actual Deferral Percentage amounts.
This amount is then distributed to the Participant
who is the Highly Compensated Employee with the
highest dollar amount. However,if a lesser reduction,
when added to the total dollar amount already
distributed under this paragraph, would equal the
total Excess Contributions, the lesser reduction
amount is distributed. If the total amount
distributed is less than the total Excess
Contributions, the procedure described in this
paragraph is repeated.
(iii) For Plan Years that begin before January 1, 1997, if
the actual deferral ratio for a Participant who is a
Highly Compensated Employee was
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<PAGE>
determined under the family member aggregation rule
in Section 5.02, Excess Contributions shall be
allocated among the group (the Participant and family
members) in proportion to the Pre-Tax Investments and
Additional Pre-Tax Investments (and any other amounts
treated as elective deferrals under Section 5.02)
that were combined to determine the ratio.
(iv) In determining Excess Contributions under subsection
(i), the amount shall be reduced by any excess
deferrals previously distributed to the Highly
Compensated Participant for the Participant's taxable
year ending with or within the Plan Year of the
Excess Contribution.
(v) The Administration Committee shall return the Excess
Contributions, including allocable income, to the
Company solely for the purpose of enabling the
Company to withhold federal, state and local taxes
due on the amounts. The Company will then pay all
remaining amounts to the Participant by the fifteenth
day of the third month following the close of the
Plan Year to which the distribution relates, if
administratively feasible. In no event shall the
distribution be made later than twelve months after
the close of that Plan Year. If the distribution is
made after the fifteenth day of the third month
following the close of the Plan Year to which the
distribution relates a ten percent excise tax will be
imposed on the Company with respect to the
distribution.
(vi) For purposes of subsection (v) above, the income
allocable to Excess Contributions is the sum of the
allocable gain or loss for the Plan Year, plus the
allocable gain or loss for the period between the end
of the Plan Year and the date of the distribution.
The Plan may use any reasonable method for computing
the income allocable to Excess Contributions,
provided that the method (A) does not violate Code
Section 401(a)(4), (B) is used consistently for all
Participants and for all corrective distributions
under the Plan for the Plan year, and (C) is used by
the Plan for allocating income to Participants'
accounts. Alternatively, the Plan may use any method
for computing income allocable to Excess
Contributions which is specified in Treasury
regulation Section 1.401 (k)-1 (f) (4) or other
guidance issued by the Internal Revenue Service.
(vii) Any distribution of less than the full amount of
Excess Contributions and allocable income shall be
treated as a pro rata distribution of Excess
---------
Contributions and income.
(viii) Excess Contributions continue to count as Annual
Additions in applying the Code Section 415
limitations under Section 5.06.
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<PAGE>
(ix) In the event any Pre-Tax Investments returned to the
Participant were matched by Company Contributions,
then Company Contributions, together with earnings
attributable thereto, shall be returned to the
Participant.
5.04 Application of Average Contribution Percentage Test
---------------------------------------------------
(a) Average Contribution Percentage Test: For each Plan Year, the
"Average Contribution Percentage" for the group of
Participants who are Highly Compensated Employees and the
"Average Contribution Percentage" for the group of
Participants who are not Highly Compensated Employees shall
satisfy one of the two tests described in this subsection (a).
The term "Average Contribution Percentage" and other defined
terms used in performing the tests are defined in subsection
(b) below. All applicable rules in subsection (c) below shall
be followed in performing the Average Contribution Percentage
test.
(i) General Rule: The Average Contribution Percentage for
Participants who are Highly Compensated Employees
shall not be more than 1.25 times the Average
Contribution Percentage for the group of Participants
who are not Highly Compensated Employees for the same
Plan Year.
(ii) Alternative Test: The Average Contribution Percentage
for the group of Participants who are Highly
Compensated Employees shall not be more than two
percentage points greater than the Average
Contribution Percentage for the group of Participants
who are not Highly Compensated Employees. In order
to use this alternative test,the Average Contribution
Percentage for the group of Participants who are
Highly Compensated Employees must not be more than
twice the Average Contribution Percentage for the
group of Participants who are not Highly Compensated
Employees.
(iii) Testing Period: For purposes of applying the General
------- ------
Rule and Alternative Test described above, (A) for
Plan Years that begin before January 1, 1997, the
Average Contribution Percentage for the group of
Participants who are Highly Compensated Employees is
compared to the Average Contribution Percentage for
the group of Participants who are not Highly
Compensated Employees in the same Plan Year, and (B)
for Plan Years that begin after January 1, 1997, the
Average Contribution Percentage for the group of
Participants who are Highly Compensated Employees for
the current Plan Year is compared to the Average
Contribution Percentage for the group of Participants
who were not Highly Compensated Employees for the
prior Plan Year.
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<PAGE>
(b) Definitions: In performing the Average Contribution Percentage
test, the following terms shall have the following meanings:
(i) Aggregate Limit shall mean the sum of: (A) 125
percent of the greater of the Actual Deferral
Percentage of the Participants who are not Highly
Compensated Employees for the prior Plan Year or the
Average Contribution Percentage of Participants who
are not Highly Compensated Employees under the Plan
subject to Code Section 401(m) for the Plan Year
beginning with or within the prior Plan Year of the
cash or deferred arrangement; and (B) the lesser of
200 percent or two plus the lesser of such Actual
Deferral Percentage or Average Contribution
Percentage. "Lesser" is substituted for "greater" in
"(A)"above, and "greater" is substituted for "lesser"
after "two plus the" in "(B)" if it would result in a
larger Aggregate Limit.
(ii) Average Contribution Percentage shall mean the
average of the Contribution Percentages of the
Eligible Participants in a group of Highly
Compensated Employees or a group of Employees who are
not Highly Compensated Employees.
(iii) Contribution Percentage shall mean the ratio
(expressed as a percentage) of the Participant's
Contribution Percentage Amounts to the Participant's
Statutory Compensation for the Plan Year.
(iv) Contribution Percentage Amounts shall mean the sum
of any After-Tax Investments, Additional After-Tax
Contributions and Company Contributions that are made
under the Plan on behalf of the Participant for
the Plan Year, subject to the following limitation.
Such Contribution Percentage Amounts shall not
include Company Contributions that are forfeited
either to correct Excess Aggregate Contributions or
because the contributions to which they relate are
excess deferrals, Excess Contributions, or Excess
Aggregate Contributions. The Company also may elect
to use Pre-Tax Investments and Additional Pre-Tax
Investments in the Contribution Percentage Amounts so
long as the Actual Deferral Percentage test is met
before the Pre-Tax Investments and Additional Pre-
Tax Investments are used in the Average Contribution
Percentage test and continues to be met following the
exclusion of those Pre-Tax Investments and Additional
Pre-Tax Investments that are used to meet the Average
Contribution Percentage test.
-24-
<PAGE>
(v) Eligible Participant shall mean any Employee who is
eligible to make After- Tax Investments or Pre-Tax
Investments (if such contributions are taken into
account in the calculation of the Contribution
Percentage), or to receive a Company Contribution.
Any Employee who would be a Participant in the Plan
if such Employee made Pre-Tax Investments shall be
treated as an Eligible Participant on behalf of whom
no Pre-Tax Investments are made.
(vi) Excess Aggregate Contributions shall mean amounts
that exceed the Average Contribution Percentage
allowable for Participants who are Highly Compensated
Employees.
In performing the Average Contribution Percentage test using
the foregoing definitions and the rules in subsection (c), (A)
Statutory Compensation shall be taken into account only for
the part of the Plan Year in which the Employee is eligible to
participate in the Plan, and (B) an Employee shall be included
in the appropriate Eligible Participant group regardless of
whether the Employee waives participation in the Plan.
If the Average Contribution Percentage is not satisfied
initially, corrective actions shall be taken pursuant to
Section 5.05 until the test is satisfied.
(c) Applying the Average Contribution Percentage Test:
(i) Calculation: The Contribution Percentage for each
Participant shall be calculated to the nearest
one-hundredth percent.
(ii) Multiple Use: If one or more Highly Compensated
Employees participates in both a cash or deferred
arrangement and a plan subject to the Average
Contribution Percentage test maintained by the
Company, a Subsidiary or an Affiliate and the sum of
the Actual Deferral Percentage and Average
Contribution Percentage of those Highly Compensated
Employees subject to either or both tests exceeds the
Aggregate Limit, then the Average Contribution
Percentage of those Highly Compensated Employees who
also participate in a cash or deferred arrangement
will be reduced (in the manner described in Section
5.05) so that the limit is not exceeded. The amount
by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be
treated as an Excess Aggregate Contribution. The
Actual Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the
Actual Deferral Percentage and Average
Contribution Percentage tests and are deemed to be
the maximum
-25-
<PAGE>
permitted under such tests for the Plan Year.
Multiple use does not occur if either the Actual
Deferral Percentage or Average Contribution
Percentage of the Highly Compensated Employees does
not exceed 1.25 multiplied by the Actual Deferral
Percentage and Average Contribution Percentage of the
Employees who are not Highly Compensated Employees.
(iii) Aggregation of Highly Compensated Participant
Contributions: For purposes of this Section, the
Contribution Percentage for any Participant who is
a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to the
Participant's account under two or more plans
described in Code Section 401(a), or arrangements
described in Code Section 401(k) that are maintained
by the Company, a Subsidiary or an Affiliate shall be
determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or
more cash or deferred arrangements that have
different plan years, all cash or deferred
arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated
under regulations promulgated under Code Section 401
(m).
(iv) Aggregation of Plans: In the event that this Plan
satisfies the requirements of Code Sections 401(m),
401 (a) (4) or 410 (b) only if aggregated with one
or more other plans, or if one or more other plans
satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section
shall be applied by determining the Contribution
Percentage of Employees as if all such plans were a
single plan. Plans may be aggregated in order to
satisfy Code Section 401(m) only if they have the
same plan year and use the same Average Contribution
Percentage testing method.
(v) Family Member Aggregation Rules: For Plan Years that
begin before January 1, 1997, for purposes of
determining the Contribution Percentage of a
Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees,
the Contribution Percentage Amounts and Compensation
of such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year
of the Participant's family members (as defined in
Code Section 414(q)(6)). Family members, with respect
to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the
Contribution Percentage both for Participants who are
not Highly Compensated Employees and for Participants
who are Highly Compensated Employees.
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<PAGE>
(vi) Recharacterized Contributions: Any excess deferrals
that were recharacterized as After-Tax Investments
under Section 5.01(b) must be included in the
numerator of a Participant's percentage, like other
After- Tax Investments.
(vii) Plan Year to which Contributions Relate: For purposes
of determining the Average Contribution Percentage
test, After-Tax Investments and Additional After-Tax
Contributions are considered to have been made in the
Plan Year in which contributed to the trust for the
Plan. Company Contributions will be considered made
for a Plan Year if made no later than the end of the
twelve-month period beginning on the day after the
close of the Plan Year.
(viii) Company Records: The Company shall maintain records
sufficient to demonstrate satisfaction of the Average
Contribution Percentage test.
(ix) Other Requirements: The determination and treatment
of the Contribution Percentage of any Participant
shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(d) Incorporation of Section 401(m) by Reference: In addition to
the specific provisions set forth above, the terms of Code
Section 401(m) are hereby incorporated by reference.
5.05 Adjustments to Comply with the Average Contribution Percentage Test
-------------------------------------------------------------------
. The Administration Committee shall take actions in accordance with
this Section to assure the Plan's compliance with the Average
Contribution Percentage test.
(a) Distribution of Excess Aggregate Contributions: If there are
Excess Aggregate Contributions, each Participant who is a
Highly Compensated Employee shall receive a distribution of
the Participant's share, plus allocable income, as follows:
(i) The Contribution Percentage of the Participant (who
is a Highly Compensated Employee) with the highest
percentage shall be reduced until the Average
Contribution Percentage test is satisfied, or until
the Participant's percentage equals that of the
Participant (who is a Highly Compensated Employee)
with the next highest percentage, whichever occurs
first. The process is repeated until the Average
Contribution Percentage test is satisfied.
(ii) For Plan Years that begin after January 1, 1997, the
total amount of Excess
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<PAGE>
Aggregate Contributions to be distributed shall be
calculated in the manner described in (i) above.
However, rather than distributing Excess Aggregate
Contributions to the Participant who is the Highly
Compensated Employee with the highest Contribution
Percentage, the Contribution Percentage Amounts of
the Participant who is the Highly Compensated
Employee with the highest dollar amount of
Contribution Percentage Amounts will be reduced by
the dollar amount required to cause the Participant's
Contribution Percentage Amounts to equal the dollar
amount of the Contribution Percentage Amounts of the
Participant who is the Highly Compensated Employee
with the next highest dollar amount of Contribution
Percentage Amounts. This amount is then distributed
to the Participant who is the Highly Compensated
Employee with the highest dollar amount. However, if
a lesser reduction, when added to the total dollar
amount already distributed under this paragraph,
would equal the total Excess Aggregate Contributions,
the lesser reduction amount is distributed. If the
total amount distributed is less than the total
Excess Aggregate Contributions, the procedure
described in this paragraph is repeated.
(iii) For Plan Years that begin before January 1, 1997, if
the Contribution Percentage for a Participant who is
a Highly Compensated Employee was determined under
the family member aggregation rules in Section 5.04,
Excess Aggregate Contributions shall be allocated
among the group (the Participant and family members)
in proportion to the contributions of each that were
combined to determine the percentage.
(iv) The Administration Committee shall direct the Trustee
to return the Excess Aggregate Contributions,
including allocable income, to the Company solely for
purposes of enabling the Company to withhold federal,
state and local taxes due on the amounts (when the
distribution includes contributions other than After-
Tax Investments or Additional After - Tax
Contributions). The Company will then pay all
remaining amounts to the Participant by the fifteenth
day of the third month following the close of the
Plan Year to which the distribution relates, if
administratively feasible. In no event shall any
distribution be made later than twelve months after
the close of that Plan Year. If the distribution is
made after the fifteenth day of the third month
following the close of the Plan Year to which the
distribution relates, a ten percent excise tax will
be imposed on the Company with respect to the
distribution.
(v) For purposes of subsection (iii) above, the income
allocable to Excess Aggregate Contributions is the
sum of the allocable gain or loss for the
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<PAGE>
Plan Year, plus the allocable gain or loss for the
period between the end of the Plan Year and the date
of the distribution. The Plan may use any reasonable
method for computing the income allocable to Excess
Aggregate Contributions, provided that the method (A)
does not violate Code Section 401(a)(4), (B) is used
consistently for all Participants and for all
corrective distributions under the Plan for the Plan
Year, and (C) is used by the Plan for allocating
income to Participants' accounts. Alternatively, the
Plan may use any method for computing income
allocable to Excess Aggregate Contributions which is
specified in Treasury regulation Section
1.401(m)-1(e)(3) or other guidance issued by the
Internal Revenue Service.
(vi) Any distribution of less than the full amount of
Excess Aggregate Contributions and income to a
Participant shall be considered a pro rata
distribution of contributions and income.
(vii) To the extent possible, the distribution shall be
made first from Additional After-Tax Contributions
and then from After-Tax Investments and corresponding
Company Contributions.
(b) Limitation of After-Tax Investments and Additional After-Tax
Contributions: The Administration Committee may suspend or
reduce After-Tax Investments and/or Additional After-Tax
Contributions by Highly Compensated Employees during the
course of a Plan Year, below the level otherwise allowed by
the Plan, to further comply with the Average Contribution
Percentage test.
5.06 Limit on Annual Additions
-------------------------
.
(a) Code Section 415 Limitations: The Annual Additions for a
Participant shall not exceed the Maximum Annual Addition for
any Plan Year, as these terms are explained below. The Maximum
Annual Addition for a Plan Year is the lesser of:
(i) 25 percent of the Participant's wages, salaries, fees
and other amounts received for personal services
actually rendered in the course of employment with
the Company to the extent that the amounts are
includible in gross income, plus, for Plan Years that
begin after December 31, 1997, (A) elective deferrals
as defined in Code Section 402(g)(3), and (B) pre-tax
salary reduction contributions made by the Company to
an arrangement described in Code Section 125 pursuant
to a salary reduction agreement between the
Participant and the Company; or
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<PAGE>
(ii) $30,000, as adjusted in accordance with Code Section 415.
In applying the above formula, the limitation in subsection
(i) above shall not apply to any allocation for medical
benefits (within the meaning of Code Section 401(h) or Code
Section 419A(f)(2)) which is otherwise treated as an Annual
Addition under Code Section 415(l)(1) or Code Section
419A(d)(2).
(b) Annual Additions: The Annual Additions of a Participant are
the sum of the following amounts credited to the account of
the Participant for the Plan Year:
(i) Company contributions (including contributions
described in Section 4.02);
(ii) Employee contributions;
(iii) Forfeitures that may be allocated to Participants
under other plans;
(iv) Amounts allocated after March 31, 1984 to an
individual medical account, as defined in Code
Section 415(l)(2) which is part of a pension or
annuity plan maintained by the Company; and
(v) Amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending
after such date, which are attributable to
post-retirement medical benefits, allocated to the
separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit fund
(as defined in Code Section 419(e)) maintained by the
Company.
In determining Annual Additions under the above definition,
any mandatory employee contributions to a defined benefit plan
shall be treated as Annual Additions to a defined contribution
plan. (However, Annual Additions for Plan Years beginning
before January 1, 1987 shall not be recomputed to treat all
such employee contributions as Annual Additions.)
Contributions do not fail to be Annual Additions merely
because they are excess deferrals, Excess Contributions or
Excess Aggregate Contributions. Further, Excess Contributions
and Excess Aggregate Contributions do not fail to be Annual
Additions because corrected through distribution or
recharacterization. Excess deferrals that are distributed in
accordance with Treasury regulation Section 1.402(g)-1(e)(2)
or (3) are not Annual Additions.
(c) Incorporation of Code Section 415: In addition to the specific
provisions of this Section, the terms of Code Section 415 are
hereby incorporated by reference and shall govern in
determining the allocations that can be made to the account of
a Participant.
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<PAGE>
(d) Aggregation of Employers and Plans: To the extent required by
the Code, the Maximum Annual Addition is an aggregate
limitation that applies to this Plan and any other plans,
described below, that are maintained by the Company or any
Subsidiary or Affiliate. Therefore, for this Section:
(i) The term "Company" includes any affiliated employers,
using the Code Section 415 definition of an
affiliated employer.
(ii) All defined benefit plans ever maintained by the
Company shall be treated as one defined benefit plan,
whether or not terminated. The same rule applies to
all defined contribution plans ever maintained by the
Company.
(iii) The term "contribution," standing alone, refers both
to all employee nondeductible contributions and all
Company contributions, including any forfeitures, to
the above plans.
(e) If the Annual Additions to a Participant's account for any
Plan Year, prior to the application of the limitations set
forth in this Section 5.06, exceed those limitations, the
amount of contributions credited to the Participant's account
in that Plan Year shall be adjusted to the extent necessary to
satisfy that limitation in accordance with the following order
of priority:
(i) Company Contributions under Section 4.01 shall be
reduced with respect to such Participant and the
amount of the reduction shall be used to reduce
future Company Contributions.
(ii) The Participant's Pre-Tax and Additional Pre-Tax
Investments under Sections 3.01(b) and 3.02 shall be
reduced and held in a suspense account for the
Participant and shall be allocated to the
Participant's account as Pre- Tax Investments in the
next Plan Year and succeeding years, as necessary,
provided that if a Participant's employment
terminates, any amount remaining in the suspense
account for the Participant's benefit after all
permitted allocations to the Participant's account as
Pre-Tax and Additional Pre-Tax Investments have been
made shall be reallocated to other eligible
Participants based on the ratio of each other
eligible Participant's Compensation during the Plan
Year to the total Compensation during that Plan Year
for all other eligible Participants.
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<PAGE>
Section 6 - Investment of Participants' Investments
---------------------------------------------------
and Company Contributions
-------------------------
6.01 Allocation of Investments
-------------------------
. All of a Participant's Investments shall be invested, at the option
of the Participant, (a) 100% in the Company Security Fund, or (b) 100%
in the Stock Fund, or (c) 100% in the Bond Fund, or (d) 100% in the
Cash Fund, or (e) in a combination, as selected by the Participant, of
the Company Security Fund, Stock Fund, Bond Fund, and/or Cash Fund
allocated in 1% increments, or such other increments as may be
established from time to time by the Administration Committee.
6.02 Change of Investment Election
-----------------------------
. A Participant may change the Participant's election made pursuant to
Section 6.01 effective on the next business day following the date the
Administration Committee (or its designee) receives Notification.
Except as provided in Section 6.04, such change in election shall be
effective only with respect to subsequent Participant Investments.
6.03 Participant Responsible for Investments
---------------------------------------
. The selection of an available investment option is the sole
responsibility of each Participant. Neither the Trustee, the
Administration Committee, the Investment Committee, the Company, a
Subsidiary, an Affiliate, nor any officer or supervisor of the Company,
a Subsidiary or an Affiliate, is empowered to advise a Participant as
to the manner in which the Participant's account shall be invested. The
fact that a security is available to Participants for investment under
the Plan shall not be construed as a recommendation for the purchase of
that security, nor shall the designation of any investment option
impose any liability on the Company, a Subsidiary, an Affiliate, its
directors, officers or employees, the Trustee, the Administration
Committee, the Investment Committee or any Participant in the Plan.
6.04 Transfers of Investments
------------------------
. Except as provided in Section 6.06, a Participant may elect to
transfer all or any part of the Participant's account balance in one
Investment Fund to one or more other Investment Fund(s). A Participant
shall make such election by providing the Administration Committee (or
its designee) with Notification. The minimum amount which may be
transferred from one Investment Fund to the other shall be 1% of the
total value of the Investment Fund from which the transfer is to be
made. Transfers in excess of 1% may be made in any whole percentage.
6.05 Valuation of Investments
------------------------
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<PAGE>
. The value of the account to be transferred under Section 6.04 will be
computed, and the transfer shall be effective, as of the Valuation Date
of the Administration Committee's (or its designee's) receipt of
Notification, provided that Notification is received prior to 4:00 p.m.
Eastern Standard Time on the Valuation Date. If Notification is
received on a day that is not a Valuation Date, or is received after
4:00 p.m. Eastern Standard Time on a Valuation Date, the value of the
account to be transferred will be computed, and the transfer shall be
effective, as of the next Valuation Date.
6.06 Company Contributions Ineligible for Transfer
---------------------------------------------
. All Company Contributions and earnings thereon shall be invested in
the Company Security Fund and may not be transferred among the Plan's
other Investment Funds.
Section 7 - Investment Funds
----------------------------
7.01 Company Security Fund
---------------------
. The Company Security Fund, including earnings thereon, shall be
invested by the Trustee in securities of the Company, other than common
stock or membership debentures of the Company, which shall be
qualifying employer securities as defined in Section 407(d) of the
Employee Retirement Income Security Act, provided, however, that if at
any time when the Trustee has funds available for such investment and
such prescribed securities cannot be purchased, the Trustee is
authorized to hold such funds in an interest bearing account or to
invest such funds in one or more securities of other corporations
which, in the Trustee's opinion, are comparable to the prescribed
securities of the Company. It is explicitly provided that up to 100% of
Plan assets may be invested in qualifying employer securities.
Effective with respect to dividends on Company securities declared by
the Company after July 1, 1999, dividends received by the Trustee with
respect to any such Company securities held in the Company Security
Fund shall be allocated to a Participant's account, as of such date
designated by the Company or determined by the Trustee, in the same
ratio that the Participant's average daily account balance in the
Company Security Fund during the applicable allocation period bears to
the total of all Participants' average daily account balances in the
Company Security Fund during the applicable allocation period. For
purposes of this paragraph, "average daily account balances" will be
determined by taking into account the amount allocated to a
Participant's account in the Company Security Fund on each day during
the applicable allocation period. The term "allocation period" shall
mean the period that begins on the day after a dividend "record date"
established by the Company and that ends on the following dividend
"record date" established by the Company. The first allocation period
under this paragraph, which shall apply to the
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<PAGE>
allocation of the first dividend declared by the Company after July 1,
1999, shall begin on the day after the June 1999 dividend "record date"
established by the Company and shall end on the next dividend "record
date" established by the Company. Subsequent allocation periods shall
be determined and applied in a similar manner.
7.02 Stock Fund
----------
. The Stock Fund, including earnings thereon, shall be invested and
reinvested in common or capital stocks or bonds, debentures or
preferred stocks convertible into common or capital stocks, or in other
types of equity investments. Short-term obligations of the U.S.
government or other investments of a short-term nature may be purchased
and held pending the selection and purchase of suitable investments
under the preceding sentence. Under the terms of this Section 7.02, the
Trustee may not invest in shares of stock or other securities of the
Company or any of its Subsidiaries or Affiliates.
Additionally, assets in the Stock Fund may be invested in a portfolio
of stock index futures contracts whose return, in the aggregate, will
closely approximate the return of the index to which the Stock Fund is
benchmarked. The purpose of investment in such future contracts is to
facilitate daily liquidity.
7.03 Bond Fund
---------
. The Bond Fund shall consist primarily of fixed-income obligations,
including but not limited to government and private bonds, debentures,
notes, certificates of deposit, participation in money market funds and
other similar fixed-income investments (which may include investment in
any commingled trust fund which meets the requirements of Code Section
401(a) and is exempt from taxation under Code Section 501(a), and which
is invested primarily in fixed income securities or fixed income
investments). Pending the selection and purchase of suitable
investments, this fund may be invested in short-term obligations of the
United States government and other short-term investments.
7.04 Cash Fund
---------
. The Cash Fund shall consist of short-term obligations of the United
States government, bank certificates of deposit, commercial paper,
bankers' acceptances, shares of money market mutual funds and other
similar types of short-term investments (which may include investment
in any commingled trust fund which meets the requirements of Code
Section 401(a) and is exempt from taxation under Code Section 501(a),
and which is invested primarily in similar types of securities).
Section 8 - Maintenance and Valuation of Participants' Accounts
---------------------------------------------------------------
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<PAGE>
8.01 Participant Accounts
--------------------
. Each Participant shall have established for the Participant an
account in each of the Investment Funds in which the Participant
participates which shall reflect separately the Participant's After-
Tax Investments, Pre-Tax Investments, Additional Pre-Tax Investments,
Additional After-Tax Contributions, Rollover Investments, Transferred
Investments, Company Contributions made on the Participant's behalf,
and the allocable share of earnings thereon.
8.02 Valuation
---------
. On each Valuation Date, the account of a Participant in each
Investment Fund shall equal:
(a) the Participant's account balance in the applicable account as
of the immediately preceding Valuation Date; plus
(b) the net earnings thereon, after adjusting for expenses and
losses, if any, since the immediately preceding Valuation
Date; plus
(c) the amount of the Investments or contributions, as the case
may be, made to that fund on the Participant's behalf and
credited to the applicable account since the immediately
preceding Valuation Date.
8.03 Special Valuation July 1, 1984
------------------------------
. On the first Valuation Date after July 1, 1984, the account of a
Participant in each Investment Fund credited with Pre-Tax Investments,
shall be equal to the amount of the Pre-Tax Investments, if any, made
on the Participant's behalf to that account in that fund during the
period from July 1, 1984, through the first Valuation Date.
8.04 Rollover and Transferred Investments
------------------------------------
. Notwithstanding the foregoing of this Section 8, Rollover Investments
and Transferred Investments shall be credited with earnings beginning
as of the Valuation Date that follows the date the Rollover Investment
or Transferred Investment is received by the Trustee.
Section 9 - Vesting of Participants' Investments
------------------------------------------------
and Company Contributions
-------------------------
9.01 Vesting of Participant Investments
----------------------------------
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<PAGE>
. A Participant shall at all times be 100% vested in the Participant's
Participant Investments.
9.02 Vesting of Company Contributions after May 17, 1999
---------------------------------------------------
. An Employee who becomes a Participant on or after May 17, 1999 shall
at all times be 100% vested in that part of the Company
Security Fund representing Company Contributions (and earnings thereon)
made on behalf of the Participant.
9.03 Vesting of Company Contributions before May 17, 1999
------------------------------------------------------
. An Employee or former Employee who ceased to be a
Participant prior to May 17, 1999 shall be vested in that part of the
Company Security Fund representing Company Contributions (and earnings
thereon) made on behalf of the Employee or former Employee according to
the vesting provisions set forth in the Plan immediately prior to May
17, 1999.
-36-
<PAGE>
Section 10 - Withdrawal or Suspension of Participants'
------------------------------------------------------
Investments and Company Contributions While Employed
----------------------------------------------------
10.01 Withdrawals of Rollover and Transferred Investments
---------------------------------------------------
. A Participant may at any time withdraw a portion, or all, stated
in a fixed amount, as elected by the Participant, but not less than
$200 unless the balance is less than that amount, of the total
value of the Participant's Rollover Investments and/or Transferred
Investments, if any; provided, however, that Transferred
Investments attributable to the Midstate Plan and the Seedway Plan
(described in Section 3.07(b)) shall be distributed only in
accordance with Section 12.12.
10.02 Withdrawals While Employed
--------------------------
. A Participant may, while employed, withdraw portions of the
Participant's accounts. Such withdrawals shall be made in the
following order of priority:
(a) Pre-1987 Additional After - Tax Contributions and After-Tax
--------------------------------------------------------------
Investments. A Participant may withdraw a portion or all of
------------
the Participant's pre-1987 Additional After-Tax Contributions
and/or After-Tax Investments and in such event shall not
be permitted to make Additional After-Tax Contributions or
After-Tax Investments to the Plan until six months from the
next Enrollment Date, provided, however, that the minimum
withdrawal under this paragraph (a) shall be $200 or the
Participant's pre-1987 Additional After-Tax Contributions and
After-Tax Investments without earnings thereon, if less;
(b) Post-1986 Additional After-Tax Contributions and After-Tax
--------------------------------------------------------------
Investments and Earnings. Any Participant who has withdrawn
---------------------------
all of the Participant's pre-1987 Additional After - Tax
Contributions and After-Tax Investments, may then withdraw a
portion or all of the Participant's post-1986 Additional After
-Tax Contributions and/or After-Tax Investments and the
earnings thereon, and in such event shall not be permitted to
make Additional After - Tax Contributions or After - Tax
Investments to the Plan until six months from the next
Enrollment Date,provided, however, that the minimum withdrawal
at any one time under this paragraph (b) and paragraph (a)
shall be $200 or the Participant's post-1986 Additional After-
Tax Contributions and After - Tax Investments and earnings
thereon, if less;
(c) Earnings on Pre-1987 Additional After-Tax Contributions and
--------------------------------------------------------------
After-Tax Investments. Any Participant who has withdrawn all
-----------------------
of the Participant's Additional After-Tax Contributions and
After-Tax Investments under paragraphs (a) and (b)
-37-
<PAGE>
and the earnings on the post-1986 Additional After-Tax
Contributions and After- Tax Investments under paragraph (b),
may then withdraw a portion or all of the earnings on the
Participant's pre-1987 Additional After-Tax Contributions and
After-Tax Investments, and in such event shall not be
permitted to make Additional After-Tax Contributions or
After-Tax Investments to the Plan until six months from the
next Enrollment Date, provided, however, that the minimum
withdrawal at any time under this paragraph (c) and paragraphs
(a) and (b) shall be $200 or the earnings on the Participant's
pre-1987 Additional After-Tax Contributions and After-Tax
Investments, if less;
(d) Company Contributions. Any Participant who has withdrawn all
----------------------
of the Participant's Additional After-Tax Contributions and
After - Tax Investments and the earnings thereon under
paragraphs (a), (b), and (c), may then withdraw 100% of the
Participant's interest in the Company Security Fund
represented by Company Contributions and in such event shall
receive all earnings thereon and shall not be permitted to
elect to make Additional After-Tax Contributions, After-Tax
Investments, Pre - Tax Investments, or Additional Pre-Tax
Investments to the Plan until 12 months from the next
Enrollment Date, and shall not be eligible to withdraw any
amount from the Plan under this Section 10.02 until 12 months
from the Enrollment Date on which he or she again is eligible
to make Additional After - Tax Contributions, After - Tax
Investments, Pre - Tax Investments, and Additional Pre-Tax
Investments to the Plan.
(e) Except to the extent permitted pursuant to Section 10.03 or
Section 10.04, no Participant may withdraw Pre-Tax Investments
or earnings thereon prior to the termination of the
Participant's employment with the Company.
10.03 Withdrawals After Age 59 1/2
----------------------------
. A Participant who has attained age 59-1/2 as of the effective
date of any withdrawal may without penalty at any time, as may be
permitted by the Administration Committee under rules uniformly
applicable to all Participants similarly situated, elect to
withdraw a portion or all, stated in a fixed amount, as elected by
the Participant, but not less than $200, or the total value, if
less, of the sum of the Participant's Pre-Tax Investments and
Additional Pre-Tax Investments and all earnings thereon.
10.04 Hardship Withdrawals
---------------------
.
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<PAGE>
(a) A Participant who has withdrawn the total amount available for
withdrawal under Sections 10.01 through 10.03 may elect to
withdraw all or part of the Participant's Pre-Tax Investments
and Additional Pre-Tax Investments and earnings thereon upon
furnishing proof of financial hardship satisfactory to the
Administration Committee. The amount to be withdrawn shall not
exceed the amount required to meet the immediate and heavy
financial need created by the hardship and not reasonably
available from other resources of the Participant, as
determined by the Administration Committee.
(b) Immediate and Heavy Financial Need: The Administration
Committee shall authorize a withdrawal under this Section only
if the Administration Committee determines that the
Participant has an immediate and heavy financial need for the
withdrawal. The Administration Committee shall make this
determination on the basis of all relevant facts and
circumstances in each case.
(c) Necessity for Distribution: The Administration Committee shall
authorize a withdrawal under this Section, only if the
Administration Committee determines that the amount is
necessary to relieve the Participant's immediate and heavy
financial need, and that the need cannot be satisfied from
other sources that are reasonably available to the
Participant. The Administration Committee shall make this
determination on the basis of all relevant facts and
circumstances in each case. In general, a withdrawal will be
treated as necessary to satisfy the Participant's need if the
Administration Committee reasonably relies on the
Participant's written statement that the Participant's need
cannot be relieved:
(i) Through reimbursement or compensation by insurance or
otherwise;
(ii) By a reasonable liquidation of the Participant's
assets that would not itself cause an immediate and
heavy financial need;
(iii) By cessation of Participant Investments to the Plan;
or
(iv) By other distributions or nontaxable (at the time of
the loan) loans from this Plan, any other plans of
the Company, plans of another employer, or commercial
sources on reasonable commercial terms.
For purposes of this subsection, the Participant's resources
shall be deemed to include assets of the Participant's spouse
and minor children that are reasonably available to him. In
this regard, property held for a child under an irrevocable
trust or under the Uniform Gifts to Minors Act shall not be
treated as a resource of the Participant.
-39-
<PAGE>
(d) A Participant receiving a hardship withdrawal may only
withdraw that portion of the Participant's Pre-Tax Investment
and Additional Investment accounts attributable to Pre-Tax
Investments and Additional Pre-Tax Investments made on the
Participant's behalf and pre-1989 earnings thereon.
Participants receiving hardship withdrawals may not withdraw
earnings on Pre-Tax Investments or Additional Pre-Tax
Investments credited after December 31, 1988.
(e) Procedures: The Administration Committee shall require the
Participant to certify compliance with the preceding
requirements before authorizing a hardship withdrawal, and
shall determine whether to allow a withdrawal in a uniform and
nondiscriminatory manner for all Participants. Further,
notwithstanding any provisions of this Section, all
determinations shall be made in accordance with Treasury
regulation Section 1.401(k)-1(d), and any further guidance
regarding hardship distributions that is promulgated by the
Internal Revenue Service.
(f) Notwithstanding any other provision to the contrary, the
Participant's right to make Pre-Tax Investments, After-Tax
Investments, Additional Pre-Tax Investments and Additional
After-Tax Investments to this Plan shall be suspended for
twelve months following the Participant's receipt of the
hardship distribution. This restriction shall also apply to
elective deferrals or after-tax employee contributions under
any other plans of the Company, a Subsidiary or Affiliate that
allow such deferrals or contributions. The restriction must be
stated in those plans or in an otherwise legally enforceable
agreement. Subject to (g) below, and subject to the
Participant's right to elect otherwise, immediately following
the twelve-month period described above, the Participant's Pre
-Tax Investments, After-Tax Investments, Additional Pre-Tax
Investments and/or Additional After-Tax Investments shall
resume automatically at the levels in effect prior to the
twelve-month period.
(g) For the taxable year immediately following the taxable year of
the hardship distribution, the Participant's Pre-Tax
Investments will be limited to the amount (if any) by which
the Compensation Deferral Cap (defined in Section 5.01) in the
taxable year exceeds the Participant's Pre-Tax Investments for
the taxable year in which the Participant received the
hardship distribution. This restriction shall also apply to
elective deferrals under any other plans of the Company that
allow elective deferrals.
10.05 Notification Requirement
-------------------------
. Except as provided in Section 10.04, Participants may request
withdrawals pursuant to this Section 10 by providing the
Administration Committee (or its designee) with Notification.
Amounts withdrawn shall be distributed in accordance with Section
13.03.
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<PAGE>
Section 11 - Loans to Participants
----------------------------------
11.01 Authorization
-------------
. The Trustee is authorized by the Company to establish a loan
program in accordance with Section 408(b)(1) of the Employee
Retirement Income Security Act. The loan program shall be
administered by the Administration Committee, which has adopted
separate procedures to implement the loan program.
11.02 Application Requirement
-----------------------
. The Administration Committee may direct the Trustee to make a
loan in accordance with the provisions of this Section, only upon
the proper application of a Participant. Applications for loans may
be made pursuant to the loan procedures adopted by the
Administration Committee. Action by the Administration Committee in
approving or denying a loan application shall be final.
11.03 Criteria for Approval
---------------------
. The Administration Committee shall approve or disapprove a loan
application in accordance with the following principles:
(a) Loans shall be available to all Participants on a reasonably
equivalent basis. In applying this requirement:
(i) Loans shall be made available without regard to the
Participant's race, color, religion, sex, age,
national origin, or disability; and
(ii) Consideration shall be given only to those factors
that would be considered in a normal commercial
setting by an entity in the business of making
similar loans, including the Participant's financial
need and creditworthiness.
(b) Loans shall not be made available to Participants who are
Highly Compensated Employees in an amount (when expressed as a
percentage of the amount in their account) greater than the
amount made available to other Participants (also expressed as
a percentage of the amount in their account).
(c) Loans shall bear a reasonable rate of interest.
(d) Loans shall be adequately secured, provided that not more than
50 percent of the
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<PAGE>
Participant's benefit under the Plan may be used as security
for a loan.
(e) Loans shall be made only in accordance with the terms of this
Section and the terms of the loan program procedures adopted
by the Administration Committee.
11.04 Maximum Loan
------------
. The amount of any loan to a Participant (when added to the
outstanding balance of all other loans from the Plan to the
Participant) may not exceed, at any time, the lesser of:
(a) $50,000, reduced by the excess (if any) of (i) the highest
outstanding balance of loans during the 12-month period ending
on the day before the date on which the loan was made, over
(ii) the outstanding balance of loans from the Plan on the
date on which the loan is made; or
(b) 50 percent of the Participant's accrued benefit. For purposes
of this limitation, all loans from all plans of the Company
and any Subsidiary or Affiliate are aggregated.
11.05 Minimum Loan
------------
. Subject to Section 11.04, the minimum amount of any loan to a
Participant shall be $500. Loans in excess of $500 shall be made in
increments of $1.00.
Section 12 - Withdrawal of Participants' Investments & Company
--------------------------------------------------------------------
Contributions Upon Termination of Employment
--------------------------------------------
12.01 Single Sum Payment
------------------
.
(a) To the Participant. Subject to the provisions of Section
-------------------
12.03, a Participant whose employment with the Company
terminates may elect to receive, in a single payment, the
Participant's entire interest in the funds represented by the
Participant's Investments and earnings thereon and Company
Contributions and earnings thereon. Such payment shall be made
to the Participant as soon as practicable following the
Participant's termination and the Administration Committee's
(or its designee's) receipt of Notification.
(b) Effect of Participant's Death After Election. In the event of
--------------------------------------------
the death of a
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<PAGE>
Participant who has requested and is eligible to receive a
single payment under Section 12.01(a) prior to receipt of such
single payment, the Participant's entire interest shall be
paid in a single payment to the Participant's beneficiary as
determined pursuant to Section 12.09.
12.02 Installment Payments Following Retirement
-----------------------------------------
.
(a) To the Participant. Subject to the provisions of Section
-------------------
12.03, a Participant whose employment terminates by reason of
Retirement may elect, by providing the Administration
Committee with Notification, to receive the Participant's
entire interest commencing as soon as practicable following
Administration Committee receipt of Notification in annual or
monthly installments over a 5, 10, 15 or 20 year period (at
the Participant's election), in accordance with the terms of a
trust agreement to be entered into by the Company in
conjunction with the Plan under the provisions of Section 14,
provided that (i) the installment period elected may not be
greater than the life expectancy of the Participant as
determined under Code Section 72, and (ii) the installment
period (once elected) may be changed only once, provided the
change is to extend the installment period, (iii) the
frequency of installments (i.e., annual or monthly), once
elected, may be changed only once, and (iv) any installment
selected must provide for installments of at least $50.
(b) Effect of the Participant's Death After Election. If a
-------------------------------------------------------
Participant who has elected to receive installment payments
pursuant to Section 12.02(a) shall die prior to receiving all
installments, any amounts remaining shall be paid in a lump
sum to the Participant's beneficiary as determined pursuant to
Section 12.09; provided, however, that if the beneficiary is
the Participant's spouse and the distribution is made in
installment payments, the surviving spouse may elect to
continue installments elected by the Participant during the
Participant's life.
12.03 Cash-Outs
---------
. A Participant whose employment terminates for any reason shall
receive the Participant's entire interest in the Plan represented
by the Participant's Investments and earnings thereon and Company
Contributions and earnings thereon in a single sum, if, at the time
of the Participant's termination of employment, the Participant has
a balance not in excess of $5,000 in all the Participant's Plan
accounts.
12.04 Random, Non-Periodic Withdrawals
. --------------------------------
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<PAGE>
(a) To the Participant. A Participant may, if the Participant has
------------------
a balance of more than $5,000 in all the Participant's Plan
accounts at the time of termination of employment, elect
random, non-periodic withdrawals subject to the requirements
of this subsection (a). The Participant may receive a specific
dollar amount, upon written request, once during a calendar
year. Withdrawals may not be for less than $1,000 (or the
Participant's entire Plan interest, if less) and shall be
distributed from the Participant's Investment Funds following
the same withdrawal priority sequence as is described in
Section 10.02. Payments of random non - periodic withdrawals
shall be made as soon as practicable following the
Administration Committee's (or its designee's) receipt of
Notification.
(b) Effect of Participant's Death Following Election. In the event
------------------------------------------------
of the death of such a Participant before receipt of all the
payment(s) described in subsection 12.04(a), remaining amounts
shall be paid in a single payment to the Participant's
beneficiary as determined pursuant to Section 12.09; provided,
however, that, if the beneficiary is the Participant's spouse,
the surviving spouse may elect to make random non-periodic
withdrawals pursuant to this Section 12.04.
12.05 Effect of Plan Termination or Sale of Company
---------------------------------------------
. Pre-Tax Investments and Additional Pre-Tax Investments may be
distributed in a single sum in the event of (a) the termination of
the Plan without establishment or maintenance of a successor plan,
(b) the sale by the Company of substantially all of the assets used
by the Company in a trade or business to an unrelated corporation,
or (c) the sale of a subsidiary of the Company to an unrelated
entity or individual; provided that, in the case of a sale
described in (b) or (c), the buyer does not maintain the Plan, the
Participant continues employment with the buyer, and the
distribution is made in connection with the disposition of assets
or the subsidiary. Such distribution will be in an amount equal to
the Participant's entire interest in the Plan. In the event the
Participant's entire interest in the Plan exceeds $5,000, the
distribution will not be made without the consent of the
Participant.
-44-
<PAGE>
12.06 Effect of Participant's Death Prior to Election
-----------------------------------------------
. In the event of the death of a Participant prior to the
Administration Committee's receipt of the Participant's election of
a form of payment provided in this Section 12, the Participant's
Plan benefit shall be paid in a single payment to the Participant's
beneficiary as determined pursuant to Section 12.09; provided,
however, that, if the Participant's beneficiary is the
Participant's spouse, the surviving spouse may elect any form of
payment under this Section 12 that was available to the Participant
as of the date the Participant's employment terminated.
Distributions to a surviving spouse under this Section: (a) must
commence on or before the later of (i) December 31 of the calendar
year immediately following the calendar year during which the
Participant died, or (ii) December 31 of the calendar year during
which the Participant would have attained age 70- 1/2; and (b) may
not be made over a period that exceeds the spouse's life
expectancy.
12.07 Required Beginning Date
------------------------
. Notwithstanding any contrary Plan provision, the entire interest
of a Participant must be distributed, or begin to be distributed,
no later than the Participant's required beginning date, as defined
below.
(a) For a Participant who is not a five percent owner of the
Company, the required beginning date is April 1 of the
calendar year following the later of (i) the calendar year
during which the Participant retires, or (ii) the calendar
year during which the Participant attains age 70 1/2.
(b) For a Participant who is a five percent owner of the Company,
the required beginning date is April 1 following the calendar
year in which the Participant attains age 70-1/2. For purposes
of this Section, a Participant shall be treated as a five
percent owner if the Participant is a five percent owner at
any time during the Plan Year ending with or within the
calendar year in which the Participant attains age 66-1/2 or
any subsequent Plan Year. Once distributions have begun to
a five percent owner, they must continue even if the
Participant ceases to be a five percent owner in a subsequent
year.
Notwithstanding the foregoing, a Participant who was actively employed
by the Company at the time the Participant attained age 70-1/2 and who
commenced receipt of Plan benefits pursuant to the predecessor of this
Section 12.07 may, if still actively employed by the Company, may make
one election to stop receipt of Plan benefits and recommence receipt by
April 1 of the calendar year following the calendar year during which
the Participant retires. In the case of an election pursuant to the
preceding sentence, the Participant may elect any form of distribution
for the Participant's benefit; the form of distribution previously
elected shall be disregarded, unless otherwise required by law.
-45-
<PAGE>
12.08 Eligible Rollover Distributions
-------------------------------
. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by
the Administration Committee, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(a) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series
of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the
extent such distribution is required under Section 401(a)
(9) of the Code; any hardship distribution described in
Code Section 401(k) (2)(B)(i); and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
(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 the surviving spouse of
a Participant, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(c) A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or
former spouse who is the Alternate Payee under a Qualified
Domestic Relations Order, as defined in Section 414(p) of
the Code, are distributees with regard to the interest of
the spouse or former spouse.
(d) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
12.09 Beneficiary Designations. A Participant's beneficiary shall be the
person or persons designated by the Participant as the beneficiary
or beneficiaries on the form provided by
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<PAGE>
and filed with the Administration Committee. The written
designation of beneficiary filed with the Administration Committee
may be changed or revoked by the Participant provided such change
or revocation is filed with the Administration Committee in writing
on a form to be provided by it. Unless otherwise indicated in
writing by the Participant, if the Participant designates multiple
beneficiaries, the surviving beneficiaries shall share equally in
benefits payable following the Participant's death. If the
Participant fails to designate a beneficiary or beneficiaries, or
if the designated beneficiaries fail to survive the Participant,
then the beneficiary shall be deemed to be the Participant's
estate. Notwithstanding the foregoing, the beneficiary of a married
Participant shall be deemed to be the Participant's spouse, unless
a written designation of another beneficiary is filed with the
Administration Committee together with Spousal Consent thereto.
12.10 Payments on Behalf of Participants
----------------------------------
. In the event that the Administration Committee shall find that a
Participant or any other person entitled to any payment under the
Plan is unable to care for his or her affairs because of illness or
accident or any other reason, any such payments due may, unless
claim shall have been made therefor by a duly appointed guardian,
conservator, committee, or other legal representative, be paid by
the Administration Committee to the spouse, child, parent, or other
blood relative or to any person deemed by the Administration
Committee to have incurred expenses for such Participant or other
person entitled to payments under the Plan, and any such payment so
made by the Administration Committee shall be a complete discharge
of the liabilities of the Plan therefor.
12.11 Compliance with Code Section 401(a)(9)
--------------------------------------
(a) Notwithstanding any other Plan provisions, all distributions
shall be made in compliance with Code Section 401(a)(9) and
implementing regulations, including the minimum distribution
incidental benefit requirement of proposed Treasury regulation
Section 1.401(a)(9)-2. These Code and regulatory provisions
are hereby incorporated by reference.
(b) In applying Code Section 401(a) (9) and implementing
regulations:
(i) Life expectancies of Participants and beneficiaries
shall be calculated using the expected return
multiplies in Tables V and VI of Treasury regulation
Section 1.72-9.
(ii) Life expectancies shall be redetermined pursuant to
Code Section 401(a)(9)(D).
12.12 Distribution of Midstate and Seedway Assets. Notwithstanding any other
-------------------------------------------
term or
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provision in the Plan to the contrary, Transferred Investments
attributable to the Midstate Plan and the Seedway Plan (described in
Section 3.07(b)) shall be distributed as follows:
(a) Except as provided in Section 10.04, Transferred Investments
attributable to the Midstate Plan and/or the Seedway Plan may
not be distributed to a Participant prior to the termination
of the Participant's employment with the Company. For purposes
of Section 10.04, Transferred Investments attributable to the
Midstate Plan and the Seedway Plan, and attributable to a
Participant's pre-tax elective deferrals to those plans, shall
be treated as if made to this Plan as Additional Pre- Tax
Investments.
(b) A Participant whose employment with the Company terminates
shall receive the Participant's interest in Transferred
Investments attributable to the Midstate Plan and the Seedway
Plan in accordance with the provisions set forth in Appendix B
to this Plan.
Section 13 - Disbursements From Funds
-------------------------------------
13.01 Company Security Fund
---------------------
. Disbursements from the Company Security Fund shall be made in
money by check. The amount to be distributed shall be determined on
the Valuation Date coinciding with or immediately following the
date the disbursement is requested, or, in the case of scheduled
disbursements, the Valuation Date coinciding with or next preceding
the date of disbursement. A Participant may, with respect to
securities allocated to the Company Security Fund prior to July 1,
1993, elect to receive in lieu of all cash a specified number of
such securities in the fund. The specified number of such
securities shall not be greater than the number of full shares of
stock or the number of bonds which could be purchased at the
Current Market Value by the total amount of cash both determined on
the Valuation Date coinciding with or immediately following the
date the disbursement is requested, or, in the case of scheduled
disbursements, the Valuation Date coinciding with or next preceding
the date of disbursement. The amount, if any, by which such total
amount of cash exceeds the total Current Market Value of the
specified number of securities shall be distributed in money by
check to the Participant.
13.02 Stock, Bond and Cash Funds
--------------------------
. Disbursements from the Stock Fund, Bond Fund and Cash Fund shall
be made in money by check. The amount to be distributed shall be
determined on the Valuation Date coinciding with or immediately
following the date the disbursement is requested, or, in the case
of scheduled disbursements, the Valuation Date coinciding with or
next preceding the date of disbursement.
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13.03 Time of Distribution
--------------------
. Where withdrawal of contributions is requested by the
Participant, such withdrawal shall be paid as soon as
administratively feasible after the Administration Committee (or
its designee) receives Notification.
Section 14 - Trust Fund
-----------------------
14.01 Appointment of Trustees; Execution of Trust Agreements
------------------------------------------------------
. The Board of Directors of the Company shall appoint one or more
individuals and/or corporations to act as Trustee under the Plan,
and at any time may remove and appoint a successor to any such
person or corporation. The Company may, without reference to any
Participant or other party in interest, enter into such trust
agreement with the Trustee and make such amendments to such trust
agreement or such further agreements as the Company in its sole
discretion may deem necessary or desirable to carry out the Plan.
14.02 Investments by the Trustee
--------------------------
. The Trustee shall invest Participants' Investments and Company
Contributions paid to it and earnings thereon in accordance with
the trust agreement or agreements. The securities acquired and any
uninvested cash shall be held by the Trustee.
Section 15 - Administration
---------------------------
15.01 Administration Committee
------------------------
. The responsibility for carrying out all phases of the
administration of the Plan, except those phases connected with the
management of assets, shall be placed with the Administration
Committee, which shall consist of not less than four persons
appointed from time to time by the Board of Directors to serve at
the pleasure of the Board of Directors. The Board of Directors may
also designate alternate members to act in the absence of the
regular members. The Board of Directors shall designate a Chairman
of the Administration Committee from among the regular members and
such members shall elect a Secretary who may be, but need not be,
one of the members of the Administration Committee. Any member of
the Administration Committee may resign by delivering his or her
written resignation to the Secretary of the Administration
Committee.
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15.02 Investment Committee
--------------------
. The responsibility for the management of the assets of the Plan
shall be placed with the Investment Committee, which shall consist
of not less than four persons appointed from time to time by the
Board of Directors to serve at the pleasure of the Board of
Directors. The Board of Directors may also designate alternate
members to act in the absence of the regular members. The Board of
Directors shall designate a Chairman of the Investment Committee
from among the regular members and such members shall elect a
Secretary who may be, but need not be, one of the members of the
Investment Committee. Any member of the Investment Committee may
resign by delivering his or her written resignation to the
Secretary of the Investment Committee.
15.03 Named Fiduciaries
-----------------
. The Administration Committee and the Investment Committee
(hereinafter collectively referred to as the "Committees"), and the
Board of Directors are designated as named fiduciaries within the
meaning of Section 402(a) of the Employee Retirement Income
Security Act.
15.04 Committee Action and Compensation
---------------------------------
. The Committees shall hold meetings upon such notice, at such
place or places, and at such time or times as each may respectively
determine. The action of at least a majority of the members, or
alternate members, or a committee expressed from time to time by a
vote at a meeting or in writing without a meeting, shall constitute
the action of that Committee and shall have the same effect for all
purposes as if assented to by all members of such Committee at the
time in office.
No member of either Committee shall receive any compensation for his or
her service as such. However, Committee members may be reimbursed for
any expenses incurred by them in the performance of their
responsibilities to the extent that such reimbursement is permitted by
law.
To the extent not insured against by an applicable insurance policy,
the Company shall indemnify, defend and hold harmless each of the
Committees, and their members, assistants and representatives, from any
and all claims, demands, suits or proceedings in connection with the
Plan that may be brought against them. This includes such actions by
Eligible Employees, Participants, beneficiaries, or any other persons,
corporations, entities, governments or governmental agencies (or legal
representatives of the foregoing). However, indemnification shall not
apply to any person for acts of willful or grossly negligent misconduct
in connection with the Plan, or for willful breaches of fiduciary
obligations or duties under ERISA.
15.05 Committee Authority and Delegation
----------------------------------
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<PAGE>
. Each Committee may authorize one or more of its number or any agent to execute
or deliver any instrument or make any payment on its behalf; may retain counsel,
employ agents and such clerical, accounting and actuarial services as it may
require in carrying out the provisions of the Plan for which it has
responsibility; may allocate among its members or to other persons, including
Employees, all or such portion of its duties hereunder as it, in its sole
discretion, shall decide.
15.06 Asset Management Authority of Investment Committee
--------------------------------------------------
. Subject to Section 6.03, the Investment Committee shall be
responsible for managing the assets under the Plan. If it deems
such actions to be advisable, the Committee, subject to the
provisions of the trust instruments adopted for use in implementing
the Plan pursuant to Section 14.01 hereof, may
(a) provide direction to the Trustees including thereunder, but
not by way of limitation, the direction of investment of all
or part of the Plan assets and the establishment of investment
criteria, and
(b) appoint and provide for use of investment advisors and
investment managers. In discharging its responsibility, the
Investment Committee shall evaluate and monitor the investment
performance of the Trustees and investment managers, if any.
15.07 Discretionary Authority of Administration Committee
---------------------------------------------------
.
(a) Notwithstanding any other provision in the Plan, and to the
full extent permitted by law, the Administration Committee
shall have exclusive authority and discretion to interpret,
construe and apply all the terms of the Plan, including any
uncertain or disputed term or provision in the Plan. The
Administration Committee's authority and discretion shall
include, but shall not be limited to, the following:
(i) determining and deciding all questions of law and/or
fact that arise under the Plan;
(ii) determining whether any individual is eligible for
benefits under this Plan; and
(iii) determining the amount of benefits, if any, an
individual is entitled to under this Plan.
(b) The Administration Committee's exercise of discretionary
authority to interpret,
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construe and apply the terms of the Plan, and all its
determinations, interpretations and applications shall:
(i) be binding upon any individual claiming benefits
under this Plan, including, but not limited to, an
employee, former employee, the estate of an employee
or former employee, any beneficiary of an employee or
former employee, and any alternate payee;
(ii) be given deference in all courts of law to the
greatest extent allowable by applicable law; and
(iii) not be overturned or set aside by any court of law
unless found to be arbitrary and capricious, or made
in bad faith.
(c) If the discretionary authority in this section is exercised
with respect to an individual who is a member of the
Administration Committee, the authority shall be exercised
solely and exclusively by the other members.
(d) Any discretionary actions of the Administration Committee or
Board of Directors shall be taken in a manner that does not
discriminate in favor of Highly Compensated Employees.
15.08 Standard of Committee Conduct
-----------------------------
. The members of the Committees shall use that degree of care,
skill, prudence, and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims in accordance
with the documents and instruments governing the Plan and Title I
of the Employee Retirement Income Security Act.
15.09 Claims Procedures
-----------------
Claims for benefits by a Participant or beneficiary shall be made in
writing to the Administration Committee. In accordance with regulations
established by the United States Department of Labor, the
Administration Committee shall establish procedures for full and fair
review of claims. The procedures shall:
(a) provide adequate notice in writing to any Participant or
beneficiary whose claim for benefits is denied with the
specific reason for the denial, and
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<PAGE>
(b) afford a reasonable opportunity for a full and fair review by
the Administration Committee to any Participant or beneficiary
whose claim is denied.
Section 16 - General Provisions
-------------------------------
16.01 Exclusive Benefit
-----------------
. No part of the Trust Funds shall be used for or diverted for
purposes other than for the exclusive benefit of Participants or
their beneficiaries.
16.02 No Alienation or Assignment
---------------------------
. No right or interest of any Participant in the Plan, or in the
Participant's account, shall be assignable or transferable, or subject
to any lien, in whole or in part, either directly or by operation of
law, or otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy, or in any other
manner, and no right or interest of any Participant in the Plan or in
the Participant's account shall be liable for, or be subject to, any
obligation or liability of such Participant. Notwithstanding the
foregoing, in the event that a qualified domestic relations order, as
defined in Section 414(p) of the Code and Section 206(d) of ERISA
("QDRO"), is received by the Administration Committee, benefits shall
be payable in accordance with such order. Payments may be made prior to
the Participant's "earliest retirement age" (as defined in Section 414
(p) of the Code and Section 206(d) of ERISA) pursuant to a QDRO. The
amount payable to the Participant and to any other person, other than
the alternate payee named in the order, shall be adjusted accordingly.
The Administration Committee is authorized to issue procedures to
effectuate the requirements for administering a QDRO. If the
Administration Committee is in receipt of a domestic relations order,
or if the Administration Committee is otherwise aware in writing that
a QDRO affecting a Participant's account is being sought, the
Administration Committee may take such action as necessary (including,
without limitation, restricting the Participant's ability to withdraw,
borrow, or direct the investment of funds in the Participant's account)
in order to administer the Plan consistently with the terms of any such
QDRO. The provisions of this section may be applied retroactively.
16.03 Risk Assumed by Participant
---------------------------
. Each Participant assumes all risk connected with any decrease in
the market price of any securities in the respective Investment
Funds, and such funds shall be the sole source of payments to be
made under this Plan. Further, Participants who request access to
the telephone instruction
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<PAGE>
("voice mail") system for the Plan shall be responsible for
maintaining the confidentiality of their "personal identification
numbers" by which Participants gain access to account information
and initiate Plan transactions.
16.04 Plan Amendment or Termination
-----------------------------
. The Company reserves the right to amend, modify, suspend, or
terminate the Plan, pursuant to written resolutions and written
Plan amendments adopted or authorized by the Board of Directors;
provided no amendment, modification, suspension, or termination of
the Plan shall have the effect of providing that the funds held in
trust by the Trustee or the earnings thereof may be used for or
devoted to purposes other than the Plan. In addition, and subject
to the foregoing limitation, the Administration Committee shall
have the authority to amend the Plan pursuant to written Plan
amendments (a) to comply with changes required by law, or (b) to
make any other change to the Plan, provided that any such change
has no adverse financial impact on the Company and no adverse
impact on the rights of Participants. In case the Plan is
terminated, or in the event of a partial termination or a
discontinuance of Company Contributions having the effect of such
termination, the interest of each Participant, so affected, in all
amounts allocated to the Participant shall vest immediately.
16.05 Plan Expenses
-------------
. Brokerage commissions, investment manager fees, transfer taxes and
other charges and expenses in connection with the purchase or sale of
securities shall be added to the cost of such securities or deducted
from the proceeds therefrom as the case may be. All other costs and
expenses incurred in administering the Plan shall be paid by the
Company; provided, however, that, effective July 1, 1991, all expenses
of administration of the Plan may be paid out of the funds held in
trust by the Trustee or the earnings thereof unless paid by the
Company. Such expenses shall include any expenses incident to the
functioning of the Committees, including, but not limited to, fees for
accountants,actuaries, counsel, and other specialists and their agents,
and other costs of administering the Plan. Until paid, the expenses
shall constitute a liability of the Plan. However, the Company may
reimburse the Plan for any administration expense incurred. Any
administration expense paid to the Plan as a reimbursement shall not be
considered a Company Contribution.
16.06 Effect of Plan on Employment Rights
-----------------------------------
. The establishment of the Plan shall not be construed as conferring any
legal rights upon any Employee or any person for a continuation of
employment nor shall it interfere with the rights of the Company to
discharge any Participant and to treat the Participant without regard
to the effect which such treatment might have upon the Participant as a
Participant.
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16.07 Participant Information
-----------------------
. Each Participant shall be required to furnish the Administration
Committee with such information and data as may be considered necessary
by the Administration Committee for the proper administration of the
Plan. Evidence and data submitted in connection with the retirement
program of the Company may be accepted and used by the Administration
Committee under the Plan.
16.08 Plan Merger, Consolidation or Transfer
--------------------------------------
. The Plan may not be merged or consolidated with, nor may its assets or
liabilities be transferred to, any other plan unless each Participant
or beneficiary would if the resulting plan were then terminated receive
a benefit immediately after the merger, consolidation, or transfer
which is equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.
Section 17 - Qualified Domestic Relations Orders
------------------------------------------------
17.01 General
-------
. Notwithstanding the restriction against alienation and assignment
stated in Section 16.02, the Administration Committee shall comply
with the terms of any Qualified Domestic Relations Order.
(a) For purposes of this Plan, a "Qualified Domestic Relations
Order" means a Domestic Relations Order that creates or
recognizes the existence of an Alternate
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<PAGE>
Payee's right to, or assigns to an Alternate Payee the right
to, receive all or a portion of the benefits that would
otherwise be payable with respect to a Participant under the
Plan.
(b) For purposes of this Plan, a "Domestic Relations Order" shall
mean any judgment, decree or order (including approval of a
property settlement agreement) which: (i) relates to the
provision of child support, alimony payments or marital
property rights to a spouse, child or other dependant of a
Participant; and (ii) is made pursuant to a state domestic
relations law (including a community property law).
(c) For purposes of this Plan, the term "Alternate Payee" shall
mean any spouse, former spouse, child or other dependant of a
Participant who is recognized by a Domestic Relations Order as
having a right to receive all, or a portion of, the benefits
payable under the Plan with respect to such Participant.
17.02 Required Provisions
-------------------
. A Domestic Relations Order is a Qualified Domestic Relations
Order only if it clearly specifies:
(a) The name and the last known mailing address (if any) of the
Participant and the name and mailing address of each Alternate
Payee covered by the order;
(b) The amount or percentage of the Participant's benefits the
Plan shall pay to each Alternate Payee, or the manner in which
the amount or percentage is to be determined;
(c) The number of payments or period to which the order applies;
and
(d) Each Plan to which the order applies.
Notwithstanding the preceding provisions, a Domestic Relations Order
that does not provide the specified address information can be a
Qualified Domestic Relations order, if the Administration Committee has
the necessary information from other sources.
17.03 Prohibited Provisions
---------------------
. A Domestic Relations Order is a Qualified Domestic Relations
order only if it:
(a) Does not require the Plan to provide any type or form of
benefit, or any option, not otherwise provided under the Plan,
except as stated in Section 17.04 below;
(b) Does not require the Plan to provide increased benefits
determined on the basis of
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actuarial value; and
(c) Does not require the payment of benefits to an Alternate Payee
that are required to be paid to another Alternate Payee under
an order previously determined to be a Qualified Domestic
Relations Order.
17.04 Payments after Earliest Retirement Age
--------------------------------------
(a) A Domestic Relations order shall not be treated as failing to
meet the requirements of Section 17.03(a), solely because the
order requires payment to an Alternate Payee:
(i) In the case of any payment before a Participant has
separated from service, on or after the date on which
the Participant attains (or would have attained) the
"earliest retirement age" as defined in subsection
(b) below;
(ii) As if the Participant had retired on the date on
which payment is to begin under the order; and
(iii) In any form in which benefits may be paid under the
Plan to the Participant.
(b) For purposes of this Section, the term "earliest retirement
age" means the earlier of:
(i) The date on which the Participant is entitled to a
distribution under the Plan; or
(ii) The later of: (A) the date the Participant attains
age 50; or (B) the earliest date on which the
Participant could receive Plan benefits if the
Participant had separated from service with the
Company.
(c) Notwithstanding any provisions of this Section 17.04 to the
contrary, a Domestic Relations Order shall not be treated as
failing to meet the requirements of Section 17.03(a), solely
because the order requires payment to the Alternate Payee
prior to the Participant's "earliest retirement age" as
defined in subsection (b) above.
17.05 Plan Procedures
---------------
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<PAGE>
(a) The Administration Committee shall apply the procedures in
this Section, and may adopt additional appropriate procedures,
to determine the qualified status of Domestic Relations Orders
it receives and to administer distributions under Qualified
Domestic Relations Orders.
(b) The Administration Committee shall promptly notify the
Participant and each Alternate Payee of the receipt of the
Domestic Relations Order, and provide them with copies of the
procedures the Plan will use in determining the qualified
status of the order. If addresses are not specified in the
order, the Administration Committee shall send notices to the
last known addresses of these parties. The Participant and any
Alternate Payee may designate a representative to receive
copies of future communications from the Administration
Committee regarding the order, by submitting a written request
to the Administration Committee.
(c) Within a reasonable period after receiving a Domestic
Relations Order, the Administration Committee shall determine
whether it is a Qualified Domestic Relations Order and shall
notify the Participant, each Alternate Payee and any
designated representatives of the determination.
(d) During the period in which the issue of qualified status is
being determined by the Administration Committee, by court of
competent jurisdiction or otherwise, the Administration
Committee shall separately account for the amounts which would
have been payable to the Alternate Payee during the period if
the order had been determined to be a Qualified Domestic
Relations Order. The separate accounting is for record keeping
and a segregation of fund assets is not required. The
separately accounted amounts shall be treated in the following
manner:
(i) If the Domestic Relations Order (or a modification of
it) is determined to be a Qualified Domestic
Relations Order within eighteen (18) months of the
date on which the first payment would be required to
be made under the order, the Administration Committee
shall pay the amounts (including any interest) to the
person or persons entitled to the payment.
(ii) If the Domestic Relations Order is determined not to
be a Qualified Domestic Relations Order, or the issue
is not resolved within the eighteen (18) month period
specified above, the Administration Committee shall
pay the amounts (including any interest) to the
person or persons who would have been entitled to the
amounts if there had been no order. In applying this
provision, the Administration Committee may delay
payments for the full eighteen (18) month period,
even if an earlier determination of non-qualified
status is made, if the Administration Committee has
notice that the parties are attempting to remedy the
order's deficiencies.
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<PAGE>
(iii) Any determination of qualified status that is made
after the close of the eighteen (18) month period
shall be applied prospectively only.
Section 18 - Top-Heavy Requirements
-----------------------------------
18.01 General Rules
-------------
(a) Notwithstanding any other Plan provisions to the contrary, the
Top-Heavy Rules of this Section shall become effective for any
Plan Year in which the Plan is a Top- Heavy Plan. The
provisions of Code Section 416 are hereby incorporated by
reference and control the application of this Section.
(b) As stated in Section 1 in defining "Compensation", not more
than $200,000 of Compensation (as adjusted) is taken into
account under the Plan for a Participant, for any Plan Year
beginning after December 31, 1988. This $200,000 limitation,
without any adjustment, shall also apply for any earlier Plan
Year in which the Plan is Top-Heavy.
(c) As further set forth in this Section (and the Code), the
Top-Heavy Rules mean that:
(i) Whether the Plan is Top-Heavy, or Super Top-Heavy,
shall be determined by finding the Top-Heavy Ratio in
accordance with Section 18.02.
(ii) If the Plan is Top-Heavy, or Super Top-Heavy, for a
Plan Year, Non-Key Employees must receive Minimum
Required Contributions and the Minimum Vesting
Schedule in Section 18.03 shall become applicable.
(iii) If the Plan is Super Top-Heavy for a Plan Year, the
provisions of Section 18.05 shall apply in
determining Maximum Annual Additions under Section 5
if the Employer also maintains a Defined Benefit
Plan.
(d) Notwithstanding the preceding provisions or any other
provisions of the Plan, any requirements regarding a Top-Heavy
vesting schedule and Minimum Required Contributions shall not
apply to Employees covered by a collective bargaining
agreement. However, the accounts of these Employees (if any)
are considered in determining the Top-Heavy Ratio under
Section 18.02.
18.02 Determination of Top-Heaviness
------------------------------
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.
(a) Top-Heavy Plan: The Plan shall be considered a Top-Heavy Plan
for a Plan Year if the Top-Heavy Ratio exceeds 60 percent,
applying the principles in subsection (d) below.
(b) Super Top-Heavy Plan: The Plan shall be considered a Super
Top-Heavy Plan for a Plan Year if the Top-Heavy Ratio exceeds
90 percent, applying the principles in subsection (d) below.
(c) Top-Heavy Ratio:
(i) If the Company maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Company has not maintained any
defined benefit plan which during the five year
period ending on the Determination Date(s) has or has
had accrued benefits, the Top-Heavy Ratio for this
Plan alone or for the Required or Permissive
Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of the account balances
of all Key Employees as of the Determination Date(s)
(including any part of any account balance
distributed in the five year period ending on the
Determination Date(s)), and the denominator of which
is the sum of all account balances (including any
part of any account balance distributed in the five
year period ending on the Determination Date(s)),
both computed in accordance with Code Section 416.
Both the numerator and denominator of the Top-Heavy
Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which
is required to be taken into account on that date
under Code Section 416.
(ii) If the Company maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Company maintains or has
maintained one or more defined benefit plans which
during the five year period ending on the
Determination Date (s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or
Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the
account balances under the aggregated defined
contribution plan or plans for all Key Employees,
determined in accordance with (i) above, and the
present value of accrued benefits under the
aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the
denominator of which is the sum of the account
balances under the aggregated defined contribution
plan or plans for all Participants, determined in
accordance with subsection (i) above, and the present
value
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of accrued benefits under the defined benefit plan or
plans for all Participants as of the Determination
Date(s), all determined in accordance with Code
Section 416. The accrued benefits under a defined
benefit plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any
distribution of an accrued benefit, made in the five
year period ending on the Determination Date.
(iii) For purposes of subsections (i) and (ii) above, the
value of account balances and the present value of
accrued benefits will be determined as of the most
recent valuation date that falls within or ends with
the twelve month period ending on the Determination
Date, except as provided in Code Section 416 for the
first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a
Participant: (i) who is not a Key Employee but who
was a Key Employee in a prior year, or (ii) who has
not been credited with at least one Hour of Service
with any employer maintaining the Plan at any time
during the five year period ending on the
Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to
which distributions, and any Rollover or Transferred
Investments are taken into account will be made in
accordance with Code Section 416. If any deductible
employee contributions were made to the Plan, they
will not be taken into account for purposes of
computing the Top - Heavy Ratio. When aggregating
plans, the value of account balances and accrued
benefits will be calculated with reference to the
Determination Dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (i) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the
Company; or (ii) if there is no such method, as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under the
fractional rule of Code Section 411(b)(1)(C).
(d) The Top-Heavy Ratio shall be determined in accordance with the
following principles:
(i) Accounts: Except as provided below in subsection
(viii) below, all of a Participant's accounts are
considered in determining the Top-Heavy Ratio.
(ii) Determination Date: The Top-Heavy Ratio is determined
as of the Determination Date, which is the last day
of the preceding Plan Year (except for the first Plan
Year). For example, if the Top-Heavy Ratio exceeds 60
percent on the last day of the 1998 Plan Year, the
Plan is Top- Heavy for the 1999 Plan Year.
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(iii) Valuation Date: Account balances shall be valued as
of the most recent Valuation Date during the
twelve-month period ending on the Determination Date.
(iv) Prior Distributions: Amounts in the accounts of a
Participant include any distribution with respect to
the Participant during the five-year period ending on
the Determination Date.
(v) Key Employee Status: The determination as to whether
an Employee is a Key Employee shall be made in
accordance with Code Section 416(i). If a Key
Employee ceases to be a Key Employee but continues to
be employed, he or she will be treated as a non-Key
Employee after the last year in which he or she must
be considered a Key Employee under the preceding
sentence. As of that date, or her accounts will be
disregarded in computing the numerator and
denominator of the Top-Heavy Ratio.
(vi) Required Aggregation of Plans: If the Plan is part of
a Required Aggregation Group, the Top-Heavy Ratio
must be determined by considering all plans in the
group. A Required Aggregation Group consists of all
qualified plans of the Company and any Subsidiary or
Affiliate that include a Key Employee, plus any other
plans that enable a Plan with a Key Employee to
satisfy the nondiscrimination rules of Code Sections
401(a)(4) or 410.
A. Except as may otherwise be allowed under
the permissive aggregation rules in
subsection (vii) below, each plan in a
Required Aggregation Group shall be
considered Top-Heavy if the Top-Heavy
Ratio for the group exceeds 60 percent.
Conversely, if the Top-Heavy Ratio is 60
percent or less, no plan in the Required
Aggregation Group shall be considered
Top- Heavy.
B. The Top-Heavy Ratio is determined by
adding the present value of the accrued
benefits under all defined benefit plans
and the account balances under all
defined contribution plans in both the
numerator and denominator of the Top-
Heavy Ratio. If plans have different
Determination Dates, the Determination
Dates within the same calendar year are
used in calculating the Top- Heavy Ratio.
The present value of the accrued benefits
under a Defined Benefit Plan shall be
based only on the interest and
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mortality rates specified in that plan.
(vii) Permissive Aggregation Group: The Company may, but
is not required to, determine the Top-Heavy Ratio
on the basis of a Permissive Aggregation Group.
A. A Permissive Aggregation Group consists
of all plans in a Required Aggregation
Group, plus other plans that satisfy the
nondiscrimination requirements of Code
Sections 401(a)(4) and 410, when
considered with the Required Aggregation
Group.
B. If the Top-Heavy Ratio for the Permissive
Aggregation Group is 60 percent or less,
no plan in the group is Top-Heavy. If the
Top-Heavy Ratio is greater than 60
percent, the Top-Heavy Rules apply to
those plans that are part of the Required
Aggregation Group, but not to the other
plans that were permissively aggregated.
(viii) Rollover amounts and any plan-to-plan transfer
amounts held under this Plan or any other plan,
shall be taken into account in determining the
Top-Heavy Ratio only if required by the following
rules:
A. If a transfer is initiated by the
Employee and made between plans
maintained by different employers, the
transferring plan continues to count the
transferred amount under the rules for
counting distributions.
B. If the transfer is not initiated by the
Employee or if it is made to a plan
maintained by the same employer, the
transferring plan shall no longer count
the amount transferred and the receiving
plan shall count the amount transferred.
C. For purposes of this subsection, the
Company, and any Subsidiary or Affiliate
shall be treated as the same employer.
18.03 Top-Heavy Vesting Schedule
---------------------------
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<PAGE>
(a) For any Plan Year that the Plan must be considered Top-Heavy,
a Participant's vested interest in Company Contributions shall
be determined in accordance with the following Minimum Vesting
Schedule or the vesting schedule in Section 9, whichever
provides the Participant with the greatest vested interest.
Any Minimum Required Contribution described in Section 18.04
(to the extent required to be nonforfeitable under the Minimum
Vesting Schedule below) may not be forfeited under Code
Sections 411(a)(3)(B) or 411(a)(3)(D).
(b) The Minimum Vesting Schedule is:
Years of Service Vested Percentage
----------------- -----------------
Less than 3 years 0%
3 years or more 100%
(c) Once applicable for a Plan Year, the Minimum Vesting Schedule
applies to Company Contributions accrued before or after the
Plan became Top-Heavy. This includes accruals before the 1984
Plan Year when the Top-Heavy Rules became effective.
Notwithstanding the preceding sentence:
(i) Accounts of a Participant who does not have an Hour
of Service after the Plan becomes Top-Heavy shall not
be subject to the Minimum Vesting Schedule; and
(ii) Account balances which were forfeited before the Plan
became Top-Heavy do not vest.
(d) The vesting provisions of Section 9 shall again become
applicable for Company Contributions that are made for Plan
Years after the Plan ceases to be Top-Heavy.
However, if this change in vesting schedule occurs:
(i) The vested percentage of a Participant in Company
Contributions before the Plan ceased to be Top-Heavy
shall not be reduced; and
(ii) To the extent required by the Code, Participants
shall be given the option to remain under the Minimum
Vesting Schedule, even for Plan Years after the Plan
is no longer Top-Heavy.
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18.04 Minimum Required Contribution
-----------------------------
(a) In General: If the Plan is Top-Heavy for a Plan Year, each
non-Key Employee described in subsection (b) below must
receive the Minimum Required Contribution described in
subsection (c) below. Further, such a minimum contribution
cannot be forfeited under Code Section 411(a)(3)(B)
(suspension of benefits to rehired retiree) or Code Section
411(a)(3)(D) (forfeiture upon withdrawal of mandatory Employee
contributions), even if the rules of those Code Sections would
otherwise be applicable under other provisions of the Plan.
(b) Non-Key Employees: The Minimum Required Contribution shall be
made for each non-Key Employee who has not separated from the
service of the Employer as of the last day of the Top-Heavy
Plan Year, provided he or she has satisfied the eligibility
requirements in Section 2. Such an Employee shall receive the
Minimum Required Contribution, without regard to or her Hours
of Service or Compensation, and whether or not he or she
elects to make Regular Investments for the Plan Year.
(c) Minimum Required Contribution:
(i) Except as otherwise provided in subsection (d) below,
the Minimum Required Contribution for each Top-Heavy
Plan Year shall be the lesser of:
A. Three percent of Compensation; or
B. The highest percentage of Compensation
that is provided to any Key Employee as
contributions by the Company.
The second alternative in the above formula cannot be used
if this Plan is used to enable a defined benefit plan of
the Company to satisfy Code Sections 401(a)(4) or 410(b).
(ii) All contributions by the Company to the accounts
of each Participant shall be considered in
determining the highest percentage that was
contributed for a Key Employee, and whether the
non-Key Employee has received the Minimum Required
Contribution. This includes Pre-tax Investments
and Additional Pre-Tax Investments.
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(iii) However, Pre-tax Investments and Additional
Pre-Tax Investments that are made for a non-Key
Employee are not considered in determining whether
the contributions for the non-Key Employee equal
the Minimum Required Contribution.
(iv) If the non-Key Employee also participates in
another defined contribution plan of the Company
or a Subsidiary or Affiliate that is Top-Heavy for
the Plan Year, only one plan must provide the
Minimum Required Contribution. In such a case, the
Minimum Required Contribution shall be made under
this Plan.
(d) Non-Key Employee in Defined Benefit Plan: If a non-Key
Employee participates in this Plan and a defined benefit
plan that is included in a Required Aggregation Group that
is Top-Heavy, the defined benefit plan shall provide the
minimum benefit required by Code Section 416. This shall
be done as set forth in the defined benefit plan. Based on
this action by the defined benefit plan, no Minimum
Required Contribution will be made to this Plan.
18.05 Maximum Annual Addition under Super Top-Heavy Plan
--------------------------------------------------
(a) For Plan Years that begin before January 1, 2000, if the Plan
is Super Top-Heavy for any Plan Year, then for purposes of the
Code Section 415 limitation described in Section 5, the dollar
limitations in the denominator of the defined benefit fraction
and the defined contribution Fraction shall each be multiplied
by 1.0, not 1.25.
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(b) If the reduction to 1.0 under subsection (a) above would cause
a Participant to exceed the combined limit on contributions
and benefits under Code Section 415, the application of
subsection (a) above will be suspended as to such Participant
until the Participant no longer exceeds the combined
limitation, as modified by subsection (a) above. During such
a suspension period, the Participant will not accrue benefits
under any defined benefit plan or receive contributions (or
forfeitures) under this or any other defined contribution plan
of the Company or a Subsidiary or Affiliate.
The Company has caused this Plan to be signed by a duly
authorized officer or member of the Administration Committee on this day of
---
, 1999.
- ----------------
AGWAY, INC.
By:
/s/
-------------------------
Title:
/s/
-------------------------
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<PAGE>
APPENDIX A
----------
AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN
Participating Employers
-----------------------
Agway, Inc.
Agway Energy Products LLC
Agway Insurance Company
Country Best Florida,
a division of Agway Consumer Products, Inc.
Telmark LLC
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B- PAGE 12
APPENDIX B
----------
AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN
Distribution of Transferred Investments from the Midstate and Seedway Plans
---------------------------------------------------------------------------
Pursuant to Section 12.12(b) of the Agway, Inc. Employees' Thrift
Investment Plan ("Plan"), this Appendix B describes the manner in which a Plan
Participant may elect to receive the Participant's Transferred Investments
attributable to the Midstate Plan and/or the Seedway Plan following the
Participant's termination of employment.
B.1 DETERMINATION OF BENEFITS UPON TERMINATION
(a) At the election of a Participant who has terminated
employment with the Company, the Administration Committee shall
direct that the Participant's Transferred Investment attributable
to the Midstate Plan and the Seedway Plan be distributed to the
Participant. Any distribution under this paragraph shall be made in
a manner which is consistent with and satisfies the provisions of
Section B.4, including but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
(b) Notwithstanding the above, if the total value of a
terminated Participant's benefit under the Plan does not exceed
$5,000, the Administration Committee shall direct that the entire
benefit be paid to such Participant in a single lump-sum without
regard to the consent of the Participant or the Participant's
spouse.
B.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before the
Participant's termination of employment with the Company, all
amounts credited as such Participant's Transferred Investments and
attributable to the Midstate Plan and/or the Seedway Plan shall be
distributed in accordance with the provisions of Sections B.5 and
B.6.
(b) Upon the death of a Participant after the
Participant's termination of employment with the Company, the
distribution of any remaining amounts credited as such
Participant's Transferred Investments attributable to the Midstate
Plan and the
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Seedway Plan shall be made in accordance with the provisions of
Sections B.4 and B.5.
(c) The Administration Committee may require such proper
proof of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant as the Administration Committee may deem desirable. The
Administration Committee's determination of death and of the right
of any person to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in
Section B.5, the Beneficiary of the Pre-Retirement Survivor Annuity
shall be the Participant's spouse. Except, however, the Participant
may designate a Beneficiary other than the Participant's spouse for
the Pre-Retirement Survivor Annuity if:
(1) the Participant and the Participant's spouse
have validly waived the Pre-Retirement Survivor Annuity in
the manner prescribed in Section B.5, and the spouse has
waived the Participant's or her right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there is
no "qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administration Committee. A Participant
may at any time revoke the Participant's designation of a Beneficiary or change
the Participant's Beneficiary by filing written notice of such revocation or
change with the Administration Committee. However, the Participant's spouse must
again consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected to relinquish such
right. The Participant may, at any time, designate a Beneficiary for death
benefits payable under the Plan that are in excess of the Pre- Retirement
Survivor Annuity. In the event no valid designation of Beneficiary exists at
the time of the Participant's death, the death benefit shall be payable to the
Participant's estate.
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<PAGE>
B.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to the
Participant's termination of employment with the Company, all amounts credited
as such Participant's Transferred Investments attributable to the Midstate Plan
and/or the Seedway Plan shall be distributed in accordance with the provisions
of Sections B.4 and B.6. For purposes of this Section B.3, "Total and Permanent
Disability" means the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The disability of a Participant
shall be determined by a licensed physician chosen by the Administration
Committee. However, if the condition constitutes total disability under the
federal Social Security Acts, the Administration Committee may rely upon such
determination that the Participant is Totally and Permanently disabled for the
purposes of this Plan.
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<PAGE>
B.4 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date"
and who does not die before the "annuity starting date"
shall receive the value of the Participant's Transferred
Investments attributable to the Midstate Plan and the
Seedway Plan in the form of a Joint and Survivor Annuity.
The Joint and Survivor Annuity is an annuity that
commences immediately and shall be equal in value to a
single life annuity. Such joint and survivor benefits
following the Participant's death shall continue to the
spouse during the spouse's lifetime at a rate equal to 50%
of the rate at which such benefits were payable to the
Participant. This Joint and Survivor Annuity shall be
considered the designated qualified Joint and Survivor
Annuity and automatic form of payment for the purposes of
distributions of a Participant's Transferred Investments
attributable to the Midstate Plan and the Seedway Plan.
However, the Participant may elect to receive a smaller
annuity benefit with continuation of payments to the
spouse at a rate of seventy-five percent (75%) or one
hundred percent (100%) of the rate payable to a
Participant during the Participant's lifetime which
alternative Joint and Survivor Annuity shall be equal in
value to the automatic Joint and 50% Survivor Annuity. An
unmarried Participant shall receive the value of the
Participant's Transferred Investments attributable to the
Midstate Plan and the Seedway Plan in the form of a life
annuity. Such unmarried Participant, however, may elect
in writing to waive the life annuity. The election must
comply with the provisions of this Section as if it were
an election to waive the Joint and Survivor Annuity by a
married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity
provided for in this Section distributed upon the
attainment of the "earliest retirement age" under the
Plan. The "earliest retirement age" is the earliest date
on which, under the Plan, the Participant could elect to
receive benefits.
(2) Any election to waive the Joint and Survivor Annuity
must be made by the Participant in writing during the
election period and must be consented to by the
Participant's spouse. If the spouse is legally incompetent
to give consent, the spouse's legal guardian, even if such
guardian is the Participant, may give consent. Such
election shall designate a Beneficiary (or a form of
benefits) that may not be changed without spousal consent
(unless the consent of the spouse expressly permits
designations by the Participant without the requirement of
further consent by the spouse). Such spouse's consent
shall be irrevocable and must acknowledge the effect of
such election and be witnessed by a Plan representative or
a notary public. Such consent shall not be required if it
is established to the satisfaction of the Administration
Committee that the required consent cannot be obtained
because there is no spouse, the spouse cannot be
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<PAGE>
located, or other circumstances that may be prescribed by
the Code. The election made by the Participant and
consented to by the Participant's spouse may be revoked by
the Participant in writing without the consent of the
spouse at any time during the election period. The number
of revocations shall not be limited. Any new election must
comply with the requirements of this paragraph. A former
spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor
Annuity shall be the 90 day period ending on the "annuity
starting date."
(4) For purposes of this Section and Section B.5, the
"annuity starting date" means the first day of the first
period for which an amount is paid as an annuity, or, in
the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred
which entitles the Participant to such benefit.
(5) With regard to the election, the Administration
Committee shall provide to the Participant no less than 30
days and no more than 90 days before the "annuity starting
date" a written explanation of:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the
effect of an election to waive the Joint and Survivor
Annuity, and
(iii) the right of the Participant's spouse to
consent to any election to waive the Joint and Survivor
Annuity, and
(iv) the right of the Participant to revoke
such election, and the effect of such revocation.
Notwithstanding the foregoing of this paragraph 5, the
annuity starting date for a distribution in a form other
than a qualified Joint and Survivor Annuity may be less
than 30 days after receipt of the written explanation
described above, provided: (A) the participant has been
provided with information that clearly indicates that the
Participant has at least 30 days to consider whether to
waive the qualified Joint and Survivor Annuity and elect
(with spousal consent) to a form of distribution other
than a qualified Joint and Survivor Annuity; (B) the
Participant is permitted to revoke any affirmative
distribution election at least until the annuity starting
date or, if later, at any time prior to the expiration of
the 7-day period that begins the day after the explanation
of the qualified joint and Survivor Annuity is provided to
the Participant; and (C) the annuity starting date is a
date after the date that the written explanation was
provided to the
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<PAGE>
Participant.
(b) In the event a married Participant duly elects
pursuant to paragraph (a)(2) above not to receive the Participant's
benefit in the form of a Joint and Survivor Annuity, or if such
Participant is not married, in the form of a life annuity, the
Administration Committee, pursuant to the election of the
Participant, shall direct the distribution to a Participant or the
Participant's Beneficiary any amount to which he or she is entitled
under the Plan in one or more of the following methods:
(1) One lump-sum payment in cash or in property; or
(2) Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for
payments over a period extending beyond either the life of
the Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or the life
expectancy of the Participant (or the life expectancy of
the Participant and the Participant's designated
Beneficiary).
(c) The present value of a Participant's Joint and
Survivor Annuity may not be paid without the Participant's written
consent if the value of the Participant's total Plan benefit
exceeds $5,000. Further, the spouse of a Participant must consent
in writing to any immediate distribution. If the value of the
Participant's total Plan benefit does not exceed $5,000, the
Administration Committee may immediately distribute such benefit
without such Participant's consent. No distribution may be made
under the preceding sentence after the "annuity starting date"
unless the Participant and the Participant's spouse consent in
writing to such distribution. Any written consent required under
this paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner
consistent with Section B.4(a)(2).
(d) Any distribution to a Participant who has a total Plan
benefit which exceeds $5,000 shall require such Participant's
consent. With regard to this required consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material features
and an explanation of the relative values of the optional
forms of benefit available under the Plan that would
satisfy the notice requirements of Code Section 417.
(2) The Participant must be informed of the Participant's
right to defer receipt of the distribution. If a
Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any
benefit. However, any
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<PAGE>
election to defer the receipt of benefits shall not apply
with respect to distributions which are required under
Section B.4(e).
(3) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more than 90
days before the "annuity starting date".
(4) Written consent of the Participant to the distribution
must not be made before the Participant receives the
notice and must not be made more than 90 days before the
"annuity starting date".
(5) No consent shall be valid if a significant detriment
is imposed under the Plan on any Participant who does not
consent to the distribution.
Notwithstanding the foregoing of this subsection (d), the annuity
starting date for a distribution in a form other than a qualified
Joint and Survivor Annuity may be less than 30 days after receipt
of the written explanation described above, provided: (A) the
participant has been provided with information that clearly
indicates that the Participant has at least 30 days to consider
whether to waive the qualified Joint and Survivor Annuity and elect
(with spousal consent) to a form of distribution other than a
qualified Joint and Survivor Annuity; (B) the Participant is
permitted to revoke any affirmative distribution election at least
until the annuity starting date or, if later, at any time prior to
the expiration of the 7-day period that begins the day after the
explanation of the qualified joint and Survivor Annuity is provided
to the Participant; and (C) the annuity starting date is a date
after the date that the written explanation was provided to the
Participant.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's Transferred
Investments attributable to the Midstate Plan and the Seedway Plan,
made on or after January 1, 1985, whether under the Plan or through
the purchase of an annuity Contract, shall be made in accordance
with the following requirements and shall otherwise comply with
Code Section 401(a)(9) and the Regulations thereunder (including
Regulation Section 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's Transferred Investments attributable
to the Midstate Plan and the Seedway Plan shall be
distributed to the Participant not later than April 1st of
the calendar year following the later of (i) the calendar
year in which the Participant attains age 70 1/2, or (ii)
the calendar year in which the Participant terminates
employment with the Company, provided, however, that this
clause (ii) shall not apply in the case of a Participant
who is a "five (5) percent owner" at any time during the
five (5) Plan Year period ending in the calendar year in
which the Participant attains age 70 1/2 or, in the case
of a Participant who
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<PAGE>
becomes a "five (5) percent owner" during any subsequent
Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be the April 1st of the
calendar year following the calendar year in which such
subsequent Plan Year ends. Alternatively, distributions to
a Participant must begin no later than the applicable
April 1st as determined under the preceding sentence and
must be made over the life of the Participant (or the
lives of the Participant and the Participant's designated
Beneficiary) or, if benefits are paid in the form of a
Joint and Survivor Annuity, the life expectancy of the
Participant (or the life expectancies of the Participant
and the Participant's designated Beneficiary). For Plan
Years beginning after December 31, 1988, clause (ii) above
shall not apply to any Participant unless the Participant
had attained age 70 1/2 before January 1, 1988 and was not
a "five (5) percent owner" at any time during the Plan
Year ending with or within the calendar year in which the
Participant attained age 66 1/2 or any subsequent Plan
Year.
(2) Distributions to a Participant and the Participant's
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G).
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall be redetermined annually in accordance with
Code Section 401(a)(9). Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V
and VI of Treasury Regulation Section 1.72-9.
(g) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a
written designation to have the Participant's retirement benefit
paid in an alternative method acceptable under Code Section 401(a)
as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
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B.5 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a
Participant who has Transferred Investments attributable to the
Midstate Plan or the Seedway Plan, who dies before the annuity
starting date, and who has a surviving spouse shall have the Pre-
Retirement Survivor Annuity paid to the Participant's surviving
spouse. The Participant's spouse may direct that payment of the
Pre-Retirement Survivor Annuity commence within a reasonable period
after the Participant's death. If the spouse does not so direct,
payment of such benefit will commence at the time the Participant
would have attained age 62. However, the spouse may elect a later
commencement date. Any distribution to the Participant's spouse
shall be subject to the rules specified in Section B.5(h). For
purposes of this Section, "Pre-Retirement Survivor Annuity" means
an immediate annuity for the life of the Participant's spouse, the
payments under which must be equal to the actuarial equivalent of
50% of the Participant's Transferred Investments attributable to
the Midstate Plan and the Seedway Plan as of the date of death.
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the
Participant in writing during the election period and shall require
the spouse's irrevocable consent in the same manner provided for in
Section B.4(a)(2). Further, the spouse's consent must acknowledge
the specific nonspouse Beneficiary. Notwithstanding the foregoing,
the nonspouse Beneficiary need not be acknowledged, provided the
consent of the spouse acknowledges that the spouse has the right to
limit consent only to a specific Beneficiary and that the spouse
voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year in
which the Participant attains age 35 and end on the date of the
Participant's death. An earlier waiver (with spousal consent) may
be made provided a written explanation of the Pre-Retirement
Survivor Annuity is given to the Participant and such waiver
becomes invalid at the beginning of the Plan Year in which the
Participant turns age 35. In the event a Participant separates from
service prior to the beginning of the election period, the election
period shall begin on the date of such separation from service.
(d) With regard to the election, the Administration
Committee shall provide each Participant within the applicable
period a written explanation of the Pre- Retirement Survivor
Annuity containing comparable information to that required pursuant
to Section B.4(a)(5). For the purposes of this paragraph, the term
"applicable period" means, with respect to a Participant, whichever
of the following periods ends last:
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<PAGE>
(1) The period beginning with the first day of the
Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age 35;
(2) A reasonable period after the individual
becomes a Participant. For this purpose, in the case of an
individual who becomes a Participant after age 32, the
explanation must be provided by the end of the three-year
period beginning with the first day of the first Plan Year
for which the individual is a Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidizes the cost of the Pre-Retirement
Survivor Annuity with respect to the Participant;
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant; or
(5) A reasonable period after separation from
service in the case of a Participant who separates before
attaining age 35. For this purpose, the Administration
Committee must provide the explanation beginning one year
before the separation from service and ending one year
after separation.
(e) The Pre-Retirement Survivor Annuity provided for in
this Section shall apply only to Participants who are credited with
an Hour of Service on or after August 23, 1984. Former Participants
who are not credited with an Hour of Service on or after August 23,
1984 shall be provided with rights to the Pre-Retirement Survivor
Annuity in accordance with Section 303(e)(2) of the Retirement
Equity Act of 1984.
(f) If the total value of the Participant's Plan benefit,
including the Pre- Retirement Survivor Annuity, does not exceed
$5,000, the Administration Committee shall direct the immediate
distribution of such amount to the Participant's spouse. No
distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the
value exceeds $5,000, an immediate distribution of the entire
amount may be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution. Any written
consent required under this paragraph must be obtained not more
than 90 days before commencement of the distribution and shall be
made in a manner consistent with Section B.4(a)(2).
(g) In the event there is an election to waive the
Pre-Retirement Survivor Annuity, for death benefits in excess of
the Pre-Retirement Survivor Annuity, and for death benefits for
unmarried Participants, such death benefits shall be paid to the
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<PAGE>
Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior
to the Participant's death, by the Participant's Beneficiary)
subject to the rules specified in Section B.5(h):
(1) One lump-sum payment in cash or in property;or
(2) If death benefits in excess of the
Pre-Retirement Survivor Annuity are to be paid to the
surviving spouse, such benefits may be paid pursuant to
(1) above, or used to purchase an annuity so as to
increase the payments made pursuant to the Pre-Retirement
Survivor Annuity.
(h) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9).
(1) If the distribution of a Participant's interest has
begun and the Participant dies before the Participant's
entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected
pursuant to Section B.4 as of the Participant's date of
death.
(2) If a Participant dies before the Participant has begun
to receive any distributions of the Participant's interest
in the Plan or before distributions are deemed to have
begun, then the Participant's death benefit shall be
distributed to the Participant's Beneficiaries in
accordance with the following rules, subject to
Subsections B.5(h)(3) and B.5(i) below:
(i) The entire death benefit shall be distributed to
the Participants beneficiaries by December 31st of the
calendar year in which the fifth anniversary of the
Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above
shall not apply to any portion of the deceased
Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event, such
portion shall be distributed over the life of such
designated Beneficiary (or over a period not extending
beyond the life expectancy of such designated Beneficiary)
provided such distribution begins not later than December
31st of the calendar year immediately following the
calendar year in which the Participant died;
(iii) However, in the event the Participant's spouse
(determined as of the date of the Participant's death) is
the Participant's designated Beneficiary, the provisions
of (ii) above shall apply except that the requirement that
A-11
<PAGE>
distributions commence within one year of the
Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following
the calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, if a
Participant's death benefits are to be paid in the form of
a Pre-Retirement Survivor Annuity, then distributions to
the Participant's surviving spouse must commence on or
before the later of: (1) December 31st of the calendar
year immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70
1/2.
(i) For purposes of Section B.5(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement must be made no later than December 31st of the
calendar year following the calendar year of the Participant's
death. Except, however, with respect to a designated Beneficiary
who is the Participant's surviving spouse, the election must be
made by the earlier of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant
died or, if later, the calendar year in which the Participant would
have attained age 70 1/2; or (2) December 31st of the calendar year
which contains the fifth anniversary, of the date of the
Participant's death. An election by a designated Beneficiary must
be in writing and shall be irrevocable as of the last day of the
election period stated herein. In the absence of an election by the
Participant or a designated Beneficiary, the 5-year distribution
requirement shall apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall be redetermined annually in accordance with the
Code. Life expectancy and joint and last survivor expectancy shall
be computed using the return multiples in Tables V and VI of
Treasury Regulation Section 1.72-9.
(k) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a
written designation to have the Participant's death benefits paid
in an alternative method acceptable under Code Section 401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
A-13
<PAGE>
B.6 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections B.4 and B.5, whenever a distribution is to be
made, or a series of payments are to commence, on or as of a particular date,
the distribution or series of payments may be made or begun on such date or as
soon thereafter as is practicable, but in no event later than 180 days after the
date. However, unless a Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occurs: (a) the date on which the Participant attains age 65; (b) the 10th
anniversary of the year in which the Participant commenced participation in the
Plan; or (c) the date the Participant terminates the Participant's service with
the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution pursuant to
Section B.4(d), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
B.7 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administration Committee may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible adult
with whom the Beneficiary maintains his or her residence, or to the custodian
for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act,
if such is permitted by the laws of the state in which said Beneficiary resides.
Such a payment to the legal guardian, custodian or parent of a minor Beneficiary
shall fully discharge the Company and the Plan from further liability.
B.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable
to a Participant or the Participant's beneficiary hereunder shall, at the
Participant's attainment of age 65 remain unpaid solely by reason of the
inability of the Administration Committee, after sending a registered letter,
return receipt requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or the Participant's
Beneficiary, the amount so distributable shall be forfeited. In the event a
Participant or Beneficiary is located subsequent to his or her benefit being
reallocated, such benefit shall be restored by the Company.
A-12
(logo)
Agway Inc., PO Box 4933, Syracuse, New York 13221-4933
(315) 449-6436
December 21, 1999
Agway Inc.
333 Butternut Drive
DeWitt, NY 13214
Dear Ladies and Gentlemen:
As General Counsel of Agway Inc. (the "Company"), I am acting as your legal
counsel for the Agway Inc. Employees' Thrift Investment Plan (the "Plan") in
connection with the registration of $25 million of participations in the Plan,
being registered with the Securities and Exchange Commission on Form S-8. I am
familiar with the relevant documents and materials used in preparing such
registration.
Based upon my review of the relevant documents and materials, it is my opinion
that:
(a) The Plan has been duly authorized for participation by
eligible employees of the Company in accordance with the terms
of the Plan;
(b) The interests in the Plan will be fully paid upon receipt of
employee contributions; and
(c) The Plan has recently been restated.
The Company intends to submit the Plan to the District
Director of the Internal Revenue Service's Ohio Key District
and to request from the District Director a favorable
determination letter as to the Plan's qualified status under
Internal Revenue Code Section 401(a). The Company may have to
make some modifications to the Plan at the request of the
Internal Revenue Service in order to obtain a favorable
determination letter, but I do not expect any of these
modifications to be material. The Company will make any
required modifications.
Because Agway will make any modifications required by the
Internal Revenue Service, it is my opinion that the Internal
Revenue Service will issue a favorable determination letter as
to the qualified status of the
<PAGE>
Agway Inc.
December 21, 1999
Page 2
Plan, as modified at the request of the Internal Revenue
Service, under Internal Revenue Code Section 401(a), subject
to the customary condition that continued qualification of the
Plan, as modified, will depend upon its effect and operation.
This letter is written to be used as an exhibit in the filing of the
Registration Statement. You may use my name under the caption "Legal Opinion" in
the Prospectus, which will be maintained by the Plan in accordance with the
rules in the filing of the Registration Statement on Form S-8.
Very truly yours,
/s/--------------------
David M. Hayes
General Counsel
bcc: N. G. Magnuson
T. A. Szuba
J. M. Cain, Esq., Sutherland, Asbill & Brennan (via Fax)
NTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
G.P.O. BOX 1680 Employer Identification Number:
BROOKLYN, NY 11202 15-0277720
File Folder Number:
Date: December 5, 1995 163001607
Person to Contract:
AGWAY, INC. David Hartstein
333 BUTTERNUT DRIVE Contact Telephone Number:
DEWITT, NY 13214-1879 (518)431-0372
Plan Name:
AGWAY INC EMPLOYEES THRIFT DEW
INVESTMENT PLAN
Plan Number: 009
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed
amendment submitted in your letter dated November 17, 1995. The proposed
amendments should be adopted on or before the date prescribed by the regulations
under Code section 401(b).
This determination letter is applicable for the amendment(s) adopted on
June 21, 1995.
This determination letter is also applicable for the amendment(s)
adopted on July 20, 1993.
This plan has been mandatorily disaggregated, permissively aggregated,
or restructured to satisfy the nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based
safe harbor described in the regulations.
<PAGE>
AGWAY INC.
This letter is issued under Rev. Proc.93-39 and considers the amendment
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401)(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Herbert J. Huff
----------------------
Herbert J. Huff
District Director
Enclosures:
Publication 794
Addendum
CONSENT OF COUNSEL
The consent of David M. Hayes, Esq., Senior Vice President General
Counsel and Secretary of the Company, is included in his opinion, a copy of
which is filed as Exhibit 5.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated September 2, 1999 relating to the
financial statements and financial statement schedules of Agway Inc., which
appears in Agway Inc.=s Annual Report on Form 10-K for the year ended June 30,
1999.
We also consent to the incorporation by reference in this Registration Statement
of our report dated August 20, 1999 relating to the financial statements, which
appears in the Annual Report of the Agway Inc. Employees= Thrift Investment Plan
on Form 11-K for the year ended June 30, 1999.
/s/--------------------------
PricewaterhouseCoopers LLP
Syracuse, New York
December 21, 1999
