Registration No.
_______________________________________________________________________________
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
___________
M. A. HANNA COMPANY
(Exact name of Registrant as Specified in its Charter)
Delaware 34-0232435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
___________
Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114-2304
(Address of Principal Executive Office Including Zip Code)
__________
401K Savings and Retirement Plan for Polymer Associates
(Full title of plan)
___________
John S. Pyke, Jr., Esq.
Vice President, General Counsel and Secretary
M. A. Hanna Company
Suite 36-5000, 200 Public Square, Cleveland, Ohio 44114-2304
(216) 589-4000
<TABLE>
<CAPTION>
(Name, address and telephone number including area code of agent for service)
____________
CALCULATION OF REGISTRATION FEE
_______________________________________________________________________________
<S> <C> <C> <C> <C>
Title of Securities Amount Price per Maximum aggregate Amount of
to be Registered Registered(1) share(2) Offering Price(2) Registration
Fee (2)
________________________________________________________________________________
Common Stock, 200,000 $23.438 $4,687,600 $1,616
Par Value $1.00
________________________________________________________________________________
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, this Registration
Statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(2) Based upon the average of the high and low sales prices of the Common
Stock in the consolidated reporting system on December 20, 1994; determined in
accordance with Rule 457(c) solely for the purposes of determining the amount
of the registration fee.
</TABLE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents and reports filed by M. A. Hanna Company
(File No. 1-5222) (the "Company") with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) Annual Report of the Company on Form 10-K for the fiscal year
ended December 31, 1993, as amended;
(b) Quarterly Reports of the Company on Form 10-Q for the
quarters ended March 31, 1994, June 30, 1994 and September 30, 1994;
(c) Current Report of the Company on Form 8-K dated December
20, 1994;
(d) The description of the Company's Common Stock contained in
the registration statement filed under Section 12 of the Securities
Exchange Act of 1934, including any amendment or report filed for the
purpose of updating such description;
(e) The description of the Company's Stock Purchase Rights
contained in the Registration Statement on Form 8-A dated December 4,
1991, as amended.
All documents filed after the date of the filing of this
registration statement by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, 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 herein by reference
and to be a part hereof from the date of filing of such documents.
Item 6. Indemnification of Directors and Officers
Subsection (b)(7) of Section 102 of the Delaware Law empowers a
corporation in its original certificate of incorporation or an amendment
thereto validly approved by stockholders to eliminate or limit the
personal liability of a director to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director,
provided that such provision cannot eliminate or limit the liability of
a director for (i) breach of his duty or loyalty, (ii) acts or omissions
not in good faith or which involve intentional misconduct or knowing
violation of law, (iii) payment of a stock dividend or approval of a
stock repurchase which was illegal under Section 174 of the Delaware
Law, or (iv) any transaction from which an improper personal benefit was
derived. Articles Thirteenth and Fourteenth of the Registrant's
Restated Certificate of Incorporation were approved at the Company's
annual meeting of stockholders held in May 1987 to provide for
limitation of liability of directors, and indemnification of directors,
officers and others as follows:
"THIRTEENTH: To the full extent permitted by the General
Corporation law of the State of Delaware or any other
applicable laws as presently or hereafter in effect, no
Director of the Corporation shall be personally liable to
the Corporation or its stockholders for or with respect to
any acts or omissions in the performance of his or her
duties as a Director of the Corporation. No amendment to or
repeal of this Article THIRTEENTH shall apply to or have any
effect on the liability or alleged liability of any Director
of the Corporation for or with respect to any acts or
omissions of such Director occurring prior to such
amendment."
"FOURTEENTH: Each person who is or was or had agreed to
become a Director or officer of the Corporation, or each
such person who is or was serving or had agreed to serve at
the request of the Board of Directors or an officer of the
Corporation as an employee or agent of the Corporation or as
a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise (including the heirs, executors, administrators
or estate of such person), shall be indemnified by the
Corporation to the full extent permitted by the General
Corporation Law of the State of Delaware or any other
applicable laws as presently or hereafter in effect.
Without limiting the generality or effect of the foregoing,
the Corporation may enter into one or more agreements with
any person which provide for indemnification greater or
different than that provided in this Article. No amendment
to or repeal of this Article FOURTEENTH shall apply to or
have any effect on the right to indemnity permitted or
authorized hereunder for or with respect to or have any
effect on the right to indemnity permitted or authorized
hereunder for or with respect to claims asserted before or
after such amendment or repeal arising from acts or
omissions occurring in whole or in part before the effective
date of such amendment or repeal."
Reference is made to Section 145 of the Delaware General
Corporation law relating the indemnification of directors and officers
of a Delaware corporation.
The Company has entered into Indemnification Agreements with all
of the Company's directors except Mr. Eyton and all of the Company's
executive officers (the "Indemnitees") to specify the extent to which
Indemnitees may receive indemnification under circumstances in which
indemnity would not otherwise be provided by the Delaware Law. Pursuant
to the Indemnification Agreements, an Indemnitee will be entitled to
indemnification as provided by Section 145 of the Delaware Law and to
indemnification for any amount which the Indemnitee is or becomes
legally obligated to pay relating to or arising out of any claim made
against such person because of any act, failure to act or neglect or
breach of duty, including any actual or alleged error, misstatement or
misleading statement, which such person commits, suffers, permits or
acquiesces in while acting in the Indemnitee's position with the
Company. The Indemnification Agreements provide specific procedures for
securing indemnification and the Company is required to make payments in
connection with any claim against the Indemnitee only to the extent
expressly provided by law.
The Company has purchased directors and officers liability
insurance which provides for indemnification of directors and officers
against certain liabilities.
Item 8. Exhibits
4.1 Amended Certificate of Incorporation of the Company (filed
as Exhibit 3(b) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989) incorporated
herein by reference.
4.2 By-laws of the Company (filed as Exhibit 3(d) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987, File No. 1-5222) incorporated
herein by reference.
4.3 Indenture dated September 15, 1991 between the Company and
Ameritrust Company, National Association (now known as
Society National Bank), Trustee, relating to Registrant's
$100,000,000 aggregate principal amount of 9% Senior Notes
due 1998 and $150,000,000 aggregate principal amount of 9
3/8% Senior Notes due 2003, (filed as Exhibit 4 to the Form
S-3 of the Company on September 18, 1991) incorporated
herein by reference.
4.4 Indenture dated September 26, 1991 between the Company and
Ameritrust Texas, National Association, Trustee, relating to
Registrant's $50,000,000 aggregate principal amount of 9%
Notes due 1998, (filed as Exhibit 4 to the Form S-3 of the
Company on October 24, 1991) incorporated herein by
reference.
4.5 Credit Agreement dated June 30, 1994 between the Company,
Citibank, N.A. and the other banks signatory thereto.
4.6 Rights Agreement dated December 4, 1991 between the Company
and Ameritrust Company National Association (filed as
Exhibit 2 to Form 8-A of M. A. Hanna Company on December 5,
1991, as amended and as Exhibit 8 to Form 8 of the Company
filed on December 24, 1991) incorporated herein by
reference.
23 Consent of Ernst & Young LLP.
24 Powers of Attorney.
99 401K Savings and Retirement Plan for Polymer Associates.
The undersigned Registrant hereby undertakes that it will submit or has
submitted the Plan and any amendment thereto to the Internal Revenue
Service (the "IRS") in a timely manner and has made or will make all
changes required by the IRS in order to qualify the Plan.
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being
made a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement; (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; provided, however, the
paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the registration
statement is on Form S-3 or on Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in 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 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 the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
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 the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed, on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State
of Ohio on this 22nd day of December, 1994.
M. A. HANNA COMPANY
By: /S/ John S. Pyke, Jr.
John S. Pyke, Jr.
Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated as of December 22, 1994.
Signatures Titles Date
Martin D. Walker* Chairman, Chief Executive Officer
Martin D. Walker (principal executive officer)
and Director
Douglas J. McGregor* President, Chief Operating Officer
Douglas J. McGregor and Director
/S/ Douglas R. Schrank Vice President, Chief Financial
Douglas R. Schrank Officer (principal financial
officer)
/s/ Thomas E. Lindsey Controller (principal accounting
Thomas E. Lindsey officer)
B. Charles Ames* Director
B. Charles Ames
Carol A. Cartwright* Director
Carol Cartwright
Wayne R. Embry* Director
Wayne R. Embry
J. Trevor Eyton* Director
J. Trevor Eyton
George D. Kirkham* Director
George D. Kirkham
Marvin L. Mann* Director
Marvin L. Mann
Richard W. Pogue* Director
Richard W. Pogue
* John S. Pyke, Jr., theundersigned attorney-in-fact, by signing his
name below, does hereby sign this registration statement on behalf of
the above indicated directors and officers of M. A. Hanna Company
(constituting a majority of the directors) pursuant to a power of
attorney executed by such persons and filed with the Securities and
Exchange Commission contemporaneously herewith.
By: /s/ John S. Pyke, Jr. as attorney-in-fact
John S. Pyke, Jr.
The Plan
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan)
have duly cause this registration statement to be filed on its behalf by
the undersigned, thereunto duly authorized, in the City of Cleveland,
State of Ohio, on December 22, 1994.
401K Savings and Retirement Plan for Polymer
Associates
By: /s/ Douglas R. Schrank
Name: Douglas R. Schrank
Title: Committee for Employee Benefits
Administration
EXHIBITS
________________________________________________________________________
Pagination by
Exhibit sequential
Number Exhibit numbering
________________________________________________________________________
3 Restated Certificate of Incorporation of Registrant (filed as
Exhibit 4(a) to the Form S-8 of Registrant dated June 29, 1988)
incorporated herein by reference and made a part hereof.
4.1 Amended Certificate of Incorporation of the Company (filed as
Exhibit 3(b) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989) incorporated herein by
reference.
4.2 By-laws of the Company (filed as Exhibit 3(d) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, File No. 1-5222) incorporated herein by
reference.
4.3 Indenture dated September 15, 1991 between the Company and
Ameritrust Company, National Association, Trustee, relating to
Registrant's $100,000,000 aggregate principal amount of 9% Senior
Notes due 1998 and $150,000,000 aggregate principal amount
of 9 3/8% Senior Notes due 2003 (filed as Exhibit 4 to the Form S-3
of the Company on October 24, 1991) incorporated herein by
reference.
4.4 Indenture dated September 26, 1991 between the Company and
Ameritrust Texas, National Association, Trustee, relating to
Registrant's $50,000,000 aggregate principal amount of 9% Notes
due 1998, (filed as Exhibit 4 to the Form S-3 of the Company on
October 24, 1991) incorporated herein by reference.
4.5 Credit Agreement dated June 30, 1994 between the Company,
Citibank, N.A. and the other banks signatory thereto.
4.6 Rights Agreement dated December 4, 1991 between the Company
and Ameritrust Company National Association (filed as Exhibit 2 to
Form 8-A of M. A. Hanna Company on December 5, 1991, as
amended and as Exhibit 8 to Form 8 of the Company filed on
December 24, 1991) incorporated herein by reference.
23 Consent of Ernst & Young LLP.
24 Powers of Attorney.
99 401K Savings and Retirement Plan for Polymer Associates.
EXHIBIT 4
EXECUTION COPY
U.S. $200,000,000
CREDIT AGREEMENT
Dated as of June 30, 1994
Among
M.A. HANNA COMPANY
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A.
as Agent
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms...................... 1
1.02 Computation of Time Periods................ 15
1.03 Accounting Terms........................... 15
1.04 Other Definitional Provisions.............. 15
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01 Promise to Repay; Evidence of Debt......... 15
2.02 The Revolving Advances..................... 16
2.03 Making the Revolving Advances.............. 17
2.04 The Competitive Bid Advances............... 19
2.05 Facility Fee............................... 23
2.06 Reduction of the Commitments............... 24
2.07 Repayment of Revolving Advances............ 24
2.08 Interest on Advances....................... 24
2.09 Interest Rate Determination................ 25
2.10 Prepayments of Revolving Advances.......... 25
2.11 Increased Costs............................ 26
2.12 Payments and Computations.................. 27
2.13 Taxes...................................... 28
2.14 Sharing of Payments, Etc................... 30
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial Advances... 31
3.02 Conditions Precedent to Each Borrowing..... 32
3.03 Conditions Precedent to Each Competitive...
Bid Borrowing............................ 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the
Borrower................................. 33
<PAGE>
Section Page
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants...................... 36
5.02 Negative Covenants......................... 40
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default.......................... 43
ARTICLE VII
THE AGENT
7.01 Authorization and Action................... 46
7.02 Agent's Reliance, Etc...................... 46
7.03 Citibank and Affiliates.................... 47
7.04 Lender Credit Decision..................... 47
7.05 Indemnification............................ 47
7.06 Successor Agent............................ 48
7.07 Agent's Fee................................ 48
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc............................ 48
8.02 Notices, Etc............................... 49
8.03 No Waiver; Remedies........................ 50
8.04 Costs, Expenses and Taxes.................. 50
8.05 Right of Set-off........................... 51
8.06 Binding Effect............................. 51
8.07 Assignments, Designations and
Participations........................... 51
8.08 Governing Law.............................. 56
8.09 Execution in Counterparts.................. 56
8.10 Collateral................................. 56
8.11 Survival of Warranties and Agreements...... 57
8.12 Limitation of Liability.................... 57
8.13 Confidentiality............................ 57
8.14 Certain Consents and Waivers of the
Borrower................................. 58
8.15 Waiver of Jury Trial....................... 58
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<PAGE>
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Notice of Revolving Borrowing
Exhibit B-2 - Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Designation Agreement
Exhibit E - Form of Opinion of Jones, Day, Reavis & Pogue,
Counsel for the Borrower
Exhibit F - Form of Opinion of Sidley & Austin,
Counsel for the Agent
Schedule I - List of Applicable Lending Offices
Schedule II - Existing Liens
-iii-
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 30, 1994 (as amended,
supplemented or otherwise modified from time to time, this
"Agreement") among M.A. HANNA COMPANY, a Delaware corporation
(the "Borrower"), the financial institutions (the "Banks") listed
on the signature pages hereof and CITIBANK, N.A. ("Citibank"), as
agent (together with any successor Agent appointed hereunder, the
"Agent") for the Lenders hereunder. The parties hereto agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. In addition to
the terms defined above, as used in this Agreement, the following
terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the
terms defined):
"Adjusted Eurodollar Rate" means, for any Interest
Period for each Adjusted Eurodollar Rate Advance comprising
part of the same Revolving Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a)
the rate of interest determined by the Agent to be the
average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period
in an amount substantially equal to such Reference Bank's
Adjusted Eurodollar Rate Advance comprising part of such
Revolving Borrowing and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the Adjusted
Eurodollar Rate Reserve Percentage for such Interest Period.
The Adjusted Eurodollar Rate for any Interest Period for
each Adjusted Eurodollar Rate Advance comprising part of the
same Revolving Borrowing shall be determined by the Agent on
the basis of applicable rates furnished to and received by
the Agent from the Reference Banks two Business Days before
the first day of such Interest Period, subject, however, to
the provisions of Section 2.09.
"Adjusted Eurodollar Rate Advance" means a Revolving
Advance which bears interest as provided in Section
2.08(a)(ii).
"Adjusted Eurodollar Rate Reserve Percentage" of any
Lender for any Interest Period for any Adjusted Eurodollar
<PAGE>
Rate Advance means the reserve percentage applicable two
Business Days before the first day of such Interest Period
under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such
Lender with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities having a term equal to
such Interest Period.
"Adjusted Net Worth" means at any date (i) the
Consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries, determined as of such date in
accordance with GAAP, plus (ii) to the extent shown as a
reduction in determining such Consolidated stockholders'
equity, (x) all write-downs resulting from foreign currency
translations and (y) the minimum pension liability
adjustment shown as a reduction of stockholders' equity in
accordance with Financial Accounting Statement No. 87,
"Employers' Accounting for Pensions".
"Advance" means a Revolving Advance or a Competitive
Bid Advance.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or
is under common control with such Person or is a director or
officer of such Person.
"Applicable Eurodollar Rate Margin" shall mean
(i) a rate equal to 0.225% per annum for any day on
which each of Majority Usage and Level I Status exists,
(ii) a rate equal to 0.125% per annum for any day on
which Level I Status, but not Majority Usage, exists,
(iii) a rate equal to 0.325% per annum for any day on
which each of Majority Usage and Level II Status exists,
(iv) a rate equal to 0.225% per annum for any day on
which Level II Status, but not Majority Usage, exists,
(v) a rate equal to 0.375% per annum for any day on
which each of Majority Usage and Level III Status exists,
(vi) a rate equal to 0.275% per annum for any day on
which Level III Status, but not Majority Usage, exists,
(vii) a rate equal to 0.475% per annum for any day on
which each of Majority Usage and Level IV Status exists,
-2-
<PAGE>
(viii) a rate equal to 0.375% per annum for any day on
which Level IV Status, but not Majority Usage, exists,
(ix) a rate equal to 0.60% per annum for any day on
which each of Majority Usage and Level V Status exists and
(x) a rate equal to 0.50% per annum with respect to any
Interest Period during which Level V Status, but not
Majority Usage, exists.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of
a Base Rate Advance and such Lender's Eurodollar Lending
Office in the case of an Adjusted Eurodollar Rate Advance
and, in the case of a Competitive Bid Advance, the office of
such Lender notified by such Lender to the Agent as its
Applicable Lending Office with respect to such Competitive
Bid Advance.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Agent, in substantially the
form of Exhibit C hereto.
"Base Rate" means, for any period, a fluctuating
interest rate per annum as shall be in effect from time to
time which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of one
percent or, if there is no nearest 1/4 of one percent,
to the next higher 1/4 of one percent) of (i) 1/2 of
one percent per annum plus (ii) the rate obtained by
dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United
States for three-month certificates of deposit of major
United States money market banks, such three-week
moving average being determined weekly on each Monday
(or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period
ending on the previous Friday by the Agent on the basis
of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of
New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates
received by the Agent from three New York certificate
of deposit dealers of recognized standing selected by
the Agent, by (B) a percentage equal to 100% minus the
average of the daily percentages specified during such
-3-
<PAGE>
three-week period by the Federal Reserve Board for
determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or
other marginal reserve requirement) for Citibank in
respect of liabilities consisting of or including
(among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus
(iii) the average during such three-week period of the
daily net annual assessment rates estimated by Citibank
for determining the current annual assessment payable
by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank in the United States; or
(c) for any day 1/2 of one percent per annum
above the Federal Funds Rate.
"Base Rate Advance" means a Revolving Advance which
bears interest as provided in Section 2.08(a)(i).
"Borrowing" means a Revolving Borrowing or a
Competitive Bid Borrowing.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City
and, if the applicable Business Day relates to any Adjusted
Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
"Claim" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and
Costs, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"Closing Date" shall mean the date on which the initial
Borrowing is made hereunder.
"Competitive Bid Advance" means an advance by a Lender
to the Borrower as part of a Competitive Bid Borrowing
resulting from the auction bidding procedure described in
Section 2.04.
"Competitive Bid Borrowing" means a borrowing
consisting of simultaneous Competitive Bid Advances from
each of the Lenders whose offer to make one or more
Competitive Bid Advances as part of such borrowing has been
accepted by the Borrower under the auction bidding procedure
described in Section 2.04.
"Competitive Bid Note" means a promissory note of the
Borrower payable to the order of any Lender, in
substantially the form of Exhibit A-2 hereto (with such
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<PAGE>
formal changes as are appropriate in the judgment of such
Lender to reflect the terms of a Competitive Bid Advance
that bears interest at other than a fixed rate), evidencing
the indebtedness of the Borrower to such Lender resulting
from a Competitive Bid Advance made by such Lender.
"Competitive Bid Reduction" has the meaning specified
in Section 2.02.
"Commitment" has the meaning specified in Section 2.02.
"Consolidated" refers to the consolidation of accounts
in accordance with GAAP, including principles of
consolidation, consistent with those applied in the
preparation of the Consolidated financial statements
referred to in Section 4.01(e).
"Consolidated Interest Expense" means, for any period,
with respect to the Borrower and its Subsidiaries on a
Consolidated basis, total interest expense, whether paid or
accrued (without duplication), including the interest
component of obligations in respect of capital leases.
"Contaminant" means any pollutant, hazardous substance,
radioactive substance, toxic substance, hazardous waste,
radioactive waste, special waste, petroleum or petroleum-
derived substance or waste, asbestos, polychlorinated
biphenyls (PCBs), or any hazardous or toxic constituent
thereof and includes, but is not limited to, these terms as
defined in Environmental, Health or Safety Requirements of
Law.
"Debt" of any Person means at any date (i) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all obligations
of such Person as lessee under leases which shall have been
or should be, in accordance with GAAP, recorded as capital
leases, (v) all obligations of such Person under direct or
indirect guaranties in respect of, and all obligations
(contingent or otherwise) of such Person to purchase or
otherwise acquire, or otherwise to assure a creditor against
loss in respect of, Debt of others and (vi) all Debt secured
by a lien, mortgage or security interest on any asset of
such Person, whether or not such Debt is otherwise an
obligation of such Person.
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"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Designated Bidder" means (i) an Eligible Assignee or
(ii) a special purpose corporation which is engaged in
making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and that issues
(or the parent of which issues) commercial paper rated at
least Prime-1 (or the then equivalent grade) by Moody's or
A-1 (or the then equivalent grade) by S&P, that, in either
case, (A) is organized under the laws of the United States
or any State thereof, (B) shall have become a party hereto
pursuant to Section 8.07(d) through (f) and (C) is not
otherwise a Lender.
"Designation Agreement" means a designation agreement
entered into by a Lender (other than a Designated Bidder)
and a Designated Bidder, and accepted by the Agent, in
substantially the form of Exhibit D hereto.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"EBIT" means, for any period on a Consolidated basis
for the Borrower and its Consolidated Subsidiaries, (i) the
sum of the amounts for such period of (A) Consolidated net
income (or loss), (B) Consolidated Interest Expense,
(C) charges for federal, state, local and foreign income
taxes and (D) extraordinary and non-operating losses (in
each case on a pre-tax basis) which have been deducted in
the calculation of Consolidated net income (or loss), minus
(ii) extraordinary and non-operating income (in each case on
a pre-tax basis).
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any State
thereof, and having total assets in excess of $3,000,000,000
and a combined capital and surplus of at least $150,000,000;
(ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at
least $300,000,000; (iii) a commercial bank organized under
the laws of any other country which is a member of the OECD,
or a political subdivision of any such country, and that
either (x) has total assets in excess of $3,000,000,000 and
a combined capital and surplus of at least $150,000,000 or
(y) is acceptable to the Borrower and the Agent, provided in
each case that such bank is acting through a branch or
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agency located in the country in which it is organized or
another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD;
and (v) a finance company, insurance company or other
financial institution or fund (whether a corporation,
partnership or other entity) which is engaged in making,
purchasing or otherwise investing in commercial loans in the
ordinary course of its business, and having total assets in
excess of $3,000,000,000.
"Environmental, Health or Safety Requirements of Law"
means all valid and enforceable Requirements of Law derived
from or relating to federal, state and local laws or
regulations relating to or addressing the environment,
health or safety, including but not limited to any law,
regulation, or order relating to the use, handling, or
disposal of any Contaminant, any law, regulation, or order
relating to Remedial Action and any law, regulation, or
order relating to workplace or worker safety and health, and
such Requirements of Law as are promulgated by the
specifically authorized agent responsible for administering
such requirements.
"Environmental Lien" means a Lien in favor of any
Governmental Authority for any (i) liabilities under any
Environmental, Health or Safety Requirements of Law or
(ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or
threatened Release of a Contaminant into the environment.
"ERISA" means the Employee Retirement Income Security
Act of 1974 and the rules and regulations thereunder,
collectively, as the same may from time to time be
supplemented or amended and remain in effect.
"ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the Borrower's controlled
group, or under common control with the Borrower, within the
meaning of Section 414 of the Internal Revenue Code and the
regulations promulgated and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice
requirement with respect thereto has been waived by the
PBGC; (b) the imposition of an obligation on the Borrower or
any ERISA Affiliate to provide affected parties with written
notice of intent to terminate a Plan in a distress
termination described in Section 4041(c) of ERISA; (c) the
partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan; (d) the withdrawal by
the Borrower or an ERISA Affiliate from a Plan during a plan
year for which the Borrower or any ERISA Affiliate was a
substantial employer, as defined in Section 4001(a)(2) of
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ERISA; (e) the failure by the Borrower or any ERISA
Affiliate to make a payment to a plan required under Section
302(f)(1) of ERISA; (f) the adoption of an amendment to a
Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution by
the PBGC of proceedings to terminate a Plan, pursuant to
Section 4042 of ERISA, or the occurrence of any event or
condition that reasonably could constitute grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Plan.
"ERISA Group" means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Federal Reserve Board, as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Events of Default" has the meaning specified in
Section 6.01.
"Existing Agreement" means the Credit Agreement dated
as of September 15, 1989 among the Borrower, the banks named
therein and Citibank, as agent, as amended, modified and
supplemented prior to the date hereof.
"Existing Liens" means the Liens existing on the date
hereof upon or with respect to Property owned by the
Borrower and its Subsidiaries and specified on Schedule II
hereto.
"Facility Fee" has the meaning specified in
Section 2.05.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
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Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Agent from three Federal funds brokers of recognized
standing selected by it.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System or any successor thereto.
"Fee Anticipation Letter" means the letter dated
May 17, 1994 from Citibank addressed to and acknowledged by
the Borrower relating to the anticipated amounts of certain
fees and expenses payable by the Borrower.
"Fee Letter" means the letter dated May 17, 1994 from
Citibank addressed to and acknowledged by the Borrower
relating to certain fees payable to Citibank.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or govern-
ment, any federal, state, local or other political sub-
division thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Insufficiency" means, with respect to any Plan, the
amount, if any, by which the present value of the vested
accrued benefits under such Plan, as determined using the
actuarial assumptions then used for the purpose of
determining the contributions to be made to such Plan,
exceeds the fair market value of the assets of such Plan
allocable to such benefits, provided that, with respect to
any Multiple Employer plan with respect to which an election
under Section 412(c)(4)(A) of the Internal Revenue Code has
been made, Insufficiency shall mean the portion of any such
excess that is allocable to the Borrower or any ERISA
Affiliate pursuant to the procedures in effect from time to
time with respect to such Multiple Employer Plan for the
allocation of such excess among the employers with respect
to such Multiple Employer Plan.
"Interest Period" means, for each Revolving Advance
comprising part of the same Revolving Borrowing, the period
commencing on the date of such Revolving Advance and ending
on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such
Interest Period shall be (a) in the case of a Base Rate
Advance, any number of days up to 30 days or 1,2,3 or 6
months and (b) in the case of an Adjusted Eurodollar Rate
Advance, 1, 2, 3, 6 or, subject to availability, 12 months,
in each case as the Borrower may select in the Notice of
Borrowing for such Advance; provided, however, that:
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(i) the duration of any Interest Period which
commences before the Termination Date and would
otherwise end after the Termination Date shall end on
the Termination Date;
(ii) Interest Periods commencing on the same date
for Revolving Advances comprising part of the same
Revolving Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day,
provided, in the case of any Interest Period for an
Adjusted Eurodollar Rate Advance, that if such
extension would cause the last day of such Interest
Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the
next preceding Business Day.
"Internal Revenue Code" means the United States
Internal Revenue Code of 1986, as amended, or any successor
statute.
"Lenders" means the Banks listed on the signature pages
hereof, each Eligible Assignee that shall become a party
hereto pursuant to Section 8.07(a), (b) and (c) and, except
when used in reference to a Revolving Advance, a Revolving
Borrowing, a Revolving Note, a Commitment or a related term,
each Designated Bidder.
"Level I Status" exists at any date if, at such date,
the Borrower's outstanding senior unsecured long-term debt
(without third-party credit enhancement) is rated either A-
(or the then equivalent grade) or higher by S&P or A3 (or
the then equivalent grade) or higher by Moody's.
"Level II Status" exists at any date if, at such date,
(i) the Borrower's outstanding senior unsecured long-term
debt (without third-party credit enhancement) is rated
either BBB+ (or the then equivalent grade) or higher by S&P
or Baa1 (or the then equivalent grade) or higher by Moody's
and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date,
(i) the Borrower's outstanding senior unsecured long-term
debt (without third-party credit enhancement) is rated
either BBB (or the then equivalent grade) or higher by S&P
or Baa2 (or the then equivalent grade) or higher by Moody's
and (ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date,
(i) the Borrower's outstanding senior unsecured long-term
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debt (without third-party credit enhancement) is rated
either BBB- (or the then equivalent grade) or higher by S&P
or Baa3 (or the then equivalent grade) or higher by Moody's
and (ii) none of Level I Status, Level II Status or Level
III Status exists.
"Level V Status" exists at any date if, at such date,
none of Level I Status, Level II Status, Level III Status or
Level IV Status exists.
"Liabilities and Costs" means all direct or indirect,
known or unknown, absolute or contingent, past, present or
future liabilities, costs, expenses, obligations,
responsibilities, damages (including, without limitation,
punitive, economic, consequential and treble damages) and
losses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or
Remedial Action studies, and fines, penalties and monetary
sanctions and interest) with respect to or arising out of
any of the following: personal injury, death, intentional,
willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement,
deposit arrangement, security interest, encumbrance, lien
(statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever in respect of any property of a Person, whether
granted voluntarily or imposed by law, and includes the
interest of a lessor under a lease which shall have been or
should be, in accordance with GAAP, recorded as a capital
lease, or under any financing lease having substantially the
same economic effect as any of the foregoing and the filing
of any financing statement or similar notice (other than a
financing statement filed by a "true" lessor pursuant to
S 9-408 of the Uniform Commercial Code), naming the owner of
such property as debtor, under the Uniform Commercial Code
or other comparable law of any jurisdiction.
"Loan Account" has the meaning specified in
Section 2.01(b).
"Loan Documents" means this Agreement, the Notes, the
Fee Letter, the Fee Anticipation Letter and all other
written agreements between the Borrower and the Agent or any
Lender delivered to the Agent or such Lender pursuant to or
in connection with this Agreement.
"Majority Lenders" means at any time Lenders holding at
least 51% of the then aggregate unpaid principal amount of
the Revolving Notes held by Lenders, or, if no such
principal amount is then outstanding, Lenders having at
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least 51% of the Commitments (provided that, for purposes
hereof, neither the Borrower, nor any of its Affiliates, if
a Lender, shall be included in (i) the Lenders holding such
amount of the Revolving Advances or having such amount of
the Commitments or (ii) determining the aggregate unpaid
principal amount of the Revolving Advances or the total
Commitments).
"Majority Usage" exists at any date if, at such date,
the outstanding principal amount of the Advances is greater
than 50% of the then existing Commitments.
"Margin Stock" shall have the meaning assigned to that
term in Regulation G and Regulation U.
"Material Adverse Effect" means a material adverse
effect upon (i) the condition (financial or otherwise),
operations or Property of the Borrower, individually, or of
the Borrower and its Subsidiaries, taken as a whole or (ii)
the legality, validity or enforceability of this Agreement,
any Note or any of the other Loan Documents.
"Moody's" means Moody's Investors Service, Inc., and
its successors.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower
or any ERISA Affiliate is making or accruing an obligation
to make contributions or has within any of the preceding
three plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means an employee benefit
plan, other than a Multiemployer Plan, subject to Title IV
of ERISA to which the Borrower or any ERISA Affiliate, and
one or more employers other than the Borrower or an ERISA
Affiliate, is making or accruing an obligation to make
contributions or, in the event that any such plan has been
terminated, to which the Borrower or any ERISA Affiliate
made or accrued an obligation to make contributions during
any of the five plan years preceding the date of termination
of such plan.
"Note" means a Revolving Note or a Competitive Bid
Note.
"Notice of Competitive Bid Borrowing" has the meaning
specified in Section 2.04(a).
"Notice of Revolving Borrowing" has the meaning
specified in Section 2.03(a).
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"OECD" means the Organization for Economic Cooperation
and Development.
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions
under ERISA.
"Permits" means any permit, approval, authorization
license, variance, or permission required from a
Governmental Authority under an applicable Requirement of
Law.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency
thereof.
"Plan" means a pension plan (other than a Multiemployer
Plan) which is covered by Title IV of ERISA and (i) with
respect to which the Borrower or any ERISA Affiliate is or
has been accruing or is or has been obligated to accrue
contributions or (ii) which is providing benefits for
employees (including former employees) of the Borrower or
any ERISA Affiliate in respect of such employees' or former
employees' employment with the Borrower or an ERISA
Affiliate.
"Property" means any real or personal property, plant,
building, facility, structure, underground storage tank or
unit, equipment, inventory, general intangible, or other
asset owned, leased or operated by the Borrower or any of
its Subsidiaries, as applicable (including any surface water
thereon or adjacent thereto, and soil and groundwater
thereunder).
"Reference Banks" means Citibank, NBD Bank, N.A. and
PNC Bank, National Association.
"Register" has the meaning specified in
Section 8.07(g).
"Regulation G" means Regulation G of the Federal
Reserve Board, as in effect from time to time.
"Regulation T" means Regulation T of the Federal
Reserve Board, as in effect from time to time.
"Regulation U" means Regulation U of the Federal
Reserve Board, as in effect from time to time.
"Regulation X" means Regulation X of the Federal
Reserve Board, as in effect from time to time.
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"Release" means release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment
or into or out of any Property, including the movement of
Contaminants through or in the air, soil, surface water,
groundwater or Property.
"Remedial Action" means actions required to (i) clean
up, remove, treat or in any other way address Contaminants
in the indoor or outdoor environment; (ii) prevent the
Release or threat of Release or minimize the further Release
of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response
and post-remedial investigation, monitoring, operation and
maintenance and care.
"Requirements of Law" means, as to any Person, the
charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation,
or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which
such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the
Securities Exchange Act of 1934, as amended, Regulation G,
Regulation T, Regulation U and Regulation X, ERISA, the Fair
Labor Standards Act and any certificate of occupancy, zoning
ordinance, building, or land use requirement or Permit or
labor or employment rule or regulation, including Environ-
mental, Health or Safety Requirements of Law.
"Revolving Advance" means an advance by a Lender to the
Borrower as part of a Revolving Borrowing and refers to a
Base Rate Advance or an Adjusted Eurodollar Rate Advance,
each of which shall be a "Type" of Revolving Advance.
"Revolving Borrowing" means a borrowing consisting of
simultaneous Revolving Advances of the same Type made by
each of the Lenders pursuant to Section 2.02.
"Revolving Note" means a promissory note of the
Borrower payable to the order of any Lender, in
substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Advances made by such Lender.
"S&P" means Standard and Poor's Corporation, and its
successors.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in
which) more than 50% of
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(a) the outstanding capital stock having ordinary
voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether
or not at the time capital stock of any other class or
classes of such corporation shall or might have voting
power upon the occurrence of any contingency),
(b) the interest in the capital or profits of
such partnership or joint venture, or
(c) the beneficial interest of such trust or
estate,
is at the time directly or indirectly (through one or more
other Subsidiaries of such Person) owned or controlled by
such Person.
"Termination Date" means June 29, 1998 or the earlier
date of termination in whole of the Commitments pursuant to
Section 2.06 or 6.01.
"Withdrawal Liability" means a liability in respect of
a complete withdrawal or partial withdrawal from a
Multiemployer Plan, as described in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but
excluding".
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 4.01(e) ("GAAP").
1.04. Other Definitional Provisions. References to
"Articles", "Sections", "subsections", "Schedules" and "Exhibits"
shall be to Articles, Sections, subsections, Schedules and
Exhibits, respectively, of this Agreement unless otherwise
specifically provided. The words "hereof", "herein", and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. Promise to Repay; Evidence of Debt. (a)
The Borrower hereby agrees to pay when due the principal amount
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of each Advance, and further agrees to pay all unpaid interest
accrued thereon, in accordance with the terms of this Agreement
and the Notes applicable to such Advance. The Borrower shall
execute and deliver to each Lender a Revolving Note on the
Closing Date and a Competitive Bid Note in connection with any
Competitive Bid Advance made pursuant to Section 2.04 and,
thereafter, shall execute and deliver such other Revolving Notes
and Competitive Bid Notes as are necessary to evidence the
Revolving Advances or the Competitive Bid Advances, as the case
may be, owing to the Lenders after giving effect to any
assignment thereof pursuant to Section 8.07.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "Loan Account")
evidencing the amounts due with respect to each Revolving Advance
and Competitive Bid Advance made by such Lender from time to
time, including the amount of principal and interest payable and
paid to such Lender from time to time hereunder.
(c) Control Account. The Register maintained by the
Agent pursuant to Section 8.07(g) shall include a control
account, and a subsidiary account for each Lender, which accounts
(taken together) shall record (i) the date and amount of each
Revolving Advance and Competitive Bid Advance made hereunder, the
Type of Advance comprising each Revolving Advance and the
Interest Period applicable thereto and the terms of each
Competitive Bid Advance, (ii) the terms of each Assignment and
Acceptance and Designation Agreement delivered to and accepted by
the Agent, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each
Lender hereunder and (iv) the amount of any sum received by the
Agent from the Borrower hereunder and each Lender's share
thereof.
(d) Entries Binding. The entries made in the Register
and each Loan Account shall be conclusive and binding for all
purposes, in the absence of manifest error.
SECTION 2.02. The Revolving Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set
forth, to make Revolving Advances to the Borrower from time to
time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate amount not to exceed
at any time outstanding the amount set opposite such Lender's
name on the signature pages hereof or, if such Lender has entered
into any Assignment and Acceptance, set forth for such Lender in
the Register maintained by the Agent pursuant to Section 8.07(g),
in either case, as such amount may be reduced or modified
pursuant to the terms of this Agreement (such Lender's
"Commitment"), provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time
to the extent of the aggregate amount of the Competitive Bid
Advances then outstanding and such deemed usage of the aggregate
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amount of the Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed usage of
the aggregate amount of the Commitments being a "Competitive
Bid Reduction"). Each Revolving Borrowing shall be in an
aggregate amount not less than $10,000,000 or an integral
multiple of $1,000,000 in excess thereof, and shall consist of
Revolving Advances of the same Type made on the same day by the
Lenders ratably according to their respective Commitments.
Within the limits of each Lender's Commitment, the Borrower may
from time to time borrow, repay pursuant to Section 2.07, prepay
pursuant to Section 2.10(b) and reborrow under this Section 2.02.
SECTION 2.03. Making the Revolving Advances. (a)
Each Revolving Borrowing shall be made on notice, given not later
than (i) 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Revolving Borrowing in the
case of Adjusted Eurodollar Rate Advances and
(ii) 11:00 A.M. (New York City time) on the date of the proposed
Revolving Borrowing in the case of Base Rate Advances, by the
Borrower to the Agent, which shall give to each Lender prompt
notice thereof by telecopier, telex or cable. Each such notice
of a Revolving Borrowing (a "Notice of Revolving Borrowing")
shall be by telecopier, telex or cable, confirmed immediately in
writing, in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Revolving
Borrowing, (ii) Type of Revolving Advances comprising such
Revolving Borrowing, (iii) aggregate amount of such Revolving
Borrowing and (iv) in the case of a Revolving Borrowing comprised
of Adjusted Eurodollar Rate Advances, the initial Interest Period
for each such Revolving Advance. Each Lender shall, before
(i) 11:00 A.M. (New York City time) on the date of such Revolving
Borrowing in the case of a Revolving Borrowing consisting of
Adjusted Eurodollar Rate Advances and (ii) 2:00 P.M. (New York
City time) on the date of such Revolving Borrowing in the case of
a Revolving Borrowing consisting of Base Rate Advances, make
available for the account of its Applicable Lending Office to the
Agent at its address referred to in Section 8.02, in same day
funds, such Lender's ratable portion of such Revolving Borrowing.
After the Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Agent
will make such funds available to the Borrower at the Agent's
aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) if any Lender shall, at least one Business Day
before the date of any requested Revolving Borrowing, notify
the Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it
unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or
its Eurodollar Lending Office to perform its obligations
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hereunder to make Adjusted Eurodollar Rate Advances or to
fund or maintain Adjusted Eurodollar Rate Advances
hereunder, (x) the right of the Borrower to select Adjusted
Eurodollar Rate Advances for such Revolving Borrowing or any
subsequent Revolving Borrowing shall be suspended until such
Lender shall notify the Agent that the circumstances causing
such suspension no longer exist, and each Revolving Advance
comprising such Revolving Borrowing shall be a Base Rate
Advance, and (y) the Borrower shall forthwith prepay in full
all Adjusted Eurodollar Rate Advances of all Lenders then
outstanding, together with accrued interest thereon;
(ii) if fewer than two Reference Banks furnish timely
information to the Agent for determining the Adjusted
Eurodollar Rate for any Adjusted Eurodollar Rate Advances
comprising any requested Revolving Borrowing, the right of
the Borrower to select Adjusted Eurodollar Rate Advances for
such Revolving Borrowing or any subsequent Revolving
Borrowing shall be suspended until the Agent shall notify
the Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and each Revolving Advance
comprising such Revolving Borrowing shall be a Base Rate
Advance;
(iii) if the Majority Lenders shall, at least one
Business Day before the date of any requested Revolving
Borrowing, notify the Agent that the Adjusted Eurodollar
Rate for Adjusted Eurodollar Rate Advances comprising such
Revolving Borrowing will not adequately reflect the cost to
such Majority Lenders of making, funding or maintaining
their respective Adjusted Eurodollar Rate Advances for such
Revolving Borrowing, the right of the Borrower to select
Adjusted Eurodollar Rate Advances for such Revolving
Borrowing or any subsequent Revolving Borrowing shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no
longer exist, and each Revolving Advance comprising such
Revolving Borrowing shall be a Base Rate Advance; and
(iv) at least three Business Days prior to the delivery
to the Agent pursuant to Section 2.03(a) of a Notice of
Revolving Borrowing requesting any Revolving Borrowing
consisting of Adjusted Eurodollar Rate Advances with an
Interest Period of 12 months, the Borrower shall notify the
Agent of such proposed Revolving Borrowing and set forth the
information required by Section 2.03(a) with respect
thereto. The Agent shall promptly notify each Lender of the
Borrower's intention to select such 12 month Interest
Period. If, at least one Business Day prior to the day on
which such Notice of Revolving Borrowing is otherwise
required to be delivered to the Agent pursuant to Section
2.03(a), a Lender notifies the Agent that such Lender is not
willing to fund its Revolving Advance for such 12 month
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Interest Period, the Agent shall so advise the Borrower and
the Borrower shall select an alternative Interest Period
with a duration of less than 12 months for such Revolving
Borrowing.
(c) Each Notice of Revolving Borrowing shall be
irrevocable and binding on the Borrower. In the case of any
Revolving Borrowing which the related Notice of Revolving
Borrowing specifies is to be comprised of Adjusted Eurodollar
Rate Advances, the Borrower shall indemnify each Lender against
any loss, cost or expense incurred by such Lender as a result of
any failure to fulfill on or before the date specified in such
Notice of Revolving Borrowing for such Revolving Borrowing the
applicable conditions set forth in Article III, including,
without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such
Lender to fund the Revolving Advance to be made by such Lender as
part of such Revolving Borrowing when such Revolving Advance, as
a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a
Lender prior to the time of any Revolving Borrowing that such
Lender will not make available to the Agent such Lender's ratable
portion of such Revolving Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the
date of such Revolving Borrowing in accordance with subsection
(a) of this Section 2.03 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to Revolving Advances
comprising such Revolving Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall repay to
the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Revolving Advance as part of such
Revolving Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving
Advance to be made by it as part of any Revolving Borrowing shall
not relieve any other Lender of its obligation, if any, hereunder
to make its Revolving Advance on the date of such Revolving
Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Revolving Advance to be made by such
other Lender on the date of any Revolving Borrowing.
SECTION 2.04. The Competitive Bid Advances. (a) Each
Lender severally agrees that the Borrower may make Competitive
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Bid Borrowings under this Section 2.04 from time to time on any
Business Day during the period from the date hereof until the
date occurring 30 days prior to the Termination Date in the
manner set forth below; provided that, following the making of
each Competitive Bid Borrowing, the aggregate amount of the
Advances then outstanding shall not exceed the aggregate amount
of the Commitments of the Lenders (computed without regard to any
Competitive Bid Reduction).
(i) The Borrower may request a Competitive Bid
Borrowing under this Section 2.04 by delivering to the
Agent, by telecopier, telex or cable, confirmed immediately
in writing, a notice of a Competitive Bid Borrowing (a
"Notice of Competitive Bid Borrowing"), in substantially the
form of Exhibit B-2 hereto, specifying the date and
aggregate amount of the proposed Competitive Bid Borrowing,
the maturity date for repayment of each Competitive Bid
Advance to be made as part of such Competitive Bid Borrowing
(which maturity date may not be earlier than the date
occurring 30 days after the date of such Competitive Bid
Borrowing or later than the Termination Date), the interest
payment date or dates relating thereto, and any other terms
to be applicable to such Competitive Bid Borrowing, not
later than 10:00 A.M. (New York City time) (A) at least one
Business Day prior to the date of the proposed Competitive
Bid Borrowing, if the Borrower shall specify in the Notice
of Competitive Bid Borrowing that the rates of interest to
be offered by the Lenders shall be fixed rates per annum and
(B) at least four Business Days prior to the date of the
proposed Competitive Bid Borrowing, if the Borrower shall
instead specify in the Notice of Competitive Bid Borrowing
the basis to be used by the Lenders in determining the rates
of interest to be offered by them. The Borrower shall pay
to the Agent in connection with each request for a
Competitive Bid Borrowing, promptly after receipt of an
invoice therefor, a competitive bid administrative fee in
the amount specified in the Fee Letter. The Agent shall in
turn promptly notify each Lender of each request for a
Competitive Bid Borrowing received by it from the Borrower
by sending such Lender a copy of the related Notice of
Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more
Competitive Bid Advances to the Borrower as part of such
proposed Competitive Bid Borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by
notifying the Agent (which shall give prompt notice thereof
to the Borrower), before 10:00 A.M. (New York City time) (A)
on the date of such proposed Competitive Bid Borrowing, in
the case of a Notice of Competitive Bid Borrowing delivered
pursuant to clause (A) of paragraph (i) above and (B) three
Business Days before the date of such proposed Competitive
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Bid Borrowing, in the case of a Notice of Competitive Bid
Borrowing delivered pursuant to clause (B) of paragraph (i)
above, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing
to make as part of such proposed Competitive Bid Borrowing
(which amounts may, subject to the proviso to the first
sentence of this Section 2.04(a), exceed such Lender's
Commitment), the rate or rates of interest therefor
(specified to the nearest 1/10,000th of 1%) and such
Lender's Applicable Lending Office with respect to such
Competitive Bid Advance; provided that if the Agent in its
capacity as a Lender shall, in its sole discretion, elect to
make any such offer, it shall notify the Borrower of such
offer before 9:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the Agent by
the other Lenders. If any Lender shall elect not to make
such an offer, such Lender shall so notify the Agent, before
10:00 A.M. (New York City time) on the date on which notice
of such election is to be given to the Agent by the other
Lenders, and such Lender shall not be obligated to, and
shall not, make any Competitive Bid Advance as part of such
Competitive Bid Borrowing; provided that the failure by any
Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Advance as part of
such proposed Competitive Bid Borrowing. It is understood
and agreed that the Borrower may not accept any offer to
make a Competitive Bid Advance if such offer is not made on
a timely basis or otherwise fails to comply with the
requirements of this Agreement.
(iii) The Borrower shall, in turn, (A) before 11:00 A.M.
(New York City time) on the date of such proposed
Competitive Bid Borrowing, in the case of a Notice of
Competitive Bid Borrowing delivered pursuant to clause (A)
of paragraph (i) above and (B) before 1:00 P.M. (New York
City time) three Business Days before the date of such
proposed Competitive Bid Borrowing, in the case of a Notice
of Competitive Bid Borrowing delivered pursuant to clause
(B) of paragraph (i) above, either
(x) cancel such Competitive Bid Borrowing by
giving the Agent notice to that effect, or
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in
ascending order, from the lowest cost to the highest
cost acceptable to the Borrower in its sole discretion
(subject, if necessary, to ratable allocation between
or among Lenders offering the same interest rates), by
giving notice to the Agent of the amount of each
Competitive Bid Advance (which amount shall be equal to
or greater than the minimum amount, and equal to or
less than the maximum amount, notified to the Borrower
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by the Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (ii)
above) to be made by each Lender as part of such
Competitive Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above
by giving the Agent notice to that effect, provided
that the aggregate principal amount of each Competitive
Bid Borrowing may not exceed the applicable amount
requested in the relevant Notice of Competitive Bid
Borrowing.
(iv) If the Borrower notifies the Agent that such
Competitive Bid Borrowing is cancelled pursuant to paragraph
(iii)(x) above, the Agent shall give prompt notice thereof
to the Lenders and such Competitive Bid Borrowing shall not
be made.
(v) If the Borrower accepts one or more of the offers
made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, the Agent shall in turn promptly notify (A) each
Lender that has made an offer as described in paragraph (ii)
above, of the date and aggregate amount of such Competitive
Bid Borrowing and whether or not any offer or offers made by
such Lender pursuant to paragraph (ii) above have been
accepted by the Borrower, (B) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid
Borrowing, of the amount of each Competitive Bid Advance to
be made by such Lender as part of such Competitive Bid
Borrowing and (C) each Lender that is to make a Competitive
Bid Advance as part of such Competitive Bid Borrowing, upon
receipt, that the Agent has received forms of documents
appearing to fulfill the applicable conditions set forth in
Article III. Each Lender that is to make a Competitive Bid
Advance as part of such Competitive Bid Borrowing shall,
before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the notice received
from the Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have
received notice from the Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its
Applicable Lending Office to the Agent at its address
referred to in Section 8.02 such Lender's portion of such
Competitive Bid Borrowing, in same day funds. Upon
fulfillment of the applicable conditions set forth in
Article III and after receipt by the Agent of such funds,
the Agent will make such funds available to the Borrower at
the Agent's aforesaid address. Promptly after each
Competitive Bid Borrowing the Agent will notify each Lender
of the amount of the Competitive Bid Borrowing, the
consequent Competitive Bid Reduction and the dates upon
which such Competitive Bid Reduction commenced and will
terminate.
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(b) Each Competitive Bid Borrowing shall be in an
aggregate amount not less than $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and, following the
making of each Competitive Bid Borrowing, the Borrower shall be
in compliance with the limitation set forth in the proviso to the
first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth
in this Section 2.04, the Borrower may from time to time borrow
under this Section 2.04, repay or prepay pursuant to subsection
(d) below, and reborrow under this Section 2.04, provided that a
Competitive Bid Borrowing shall not be made within three Business
Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower shall repay to the Agent for the
account of each Lender which has made a Competitive Bid Advance,
or each other holder of a Competitive Bid Note, on the maturity
date of each Competitive Bid Advance (such maturity date being
that specified by the Borrower for repayment of such Competitive
Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and provided in the
Competitive Bid Note evidencing such Competitive Bid Advance),
the then unpaid principal amount of such Competitive Bid Advance.
The Borrower shall have no right to prepay any principal amount
of any Competitive Bid Advance unless, and then only on the
terms, specified by the Borrower for such Competitive Bid Advance
in the related Notice of Competitive Bid Borrowing delivered
pursuant to subsection (a)(i) above and set forth in the
Competitive Bid Note evidencing such Competitive Bid Advance.
(e) The Borrower shall pay interest on the unpaid
principal amount of each Competitive Bid Advance from the date of
such Competitive Bid Advance to the date the principal amount of
such Competitive Bid Advance is repaid in full, at the rate of
interest for such Competitive Bid Advance specified by the Lender
making such Competitive Bid Advance in its notice with respect
thereto delivered pursuant to subsection (a)(ii) above, payable
on the interest payment date or dates specified by the Borrower
for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above, as provided in the Competitive Bid Note evidencing such
Competitive Bid Advance.
(f) The indebtedness of the Borrower resulting from
each Competitive Bid Advance made to the Borrower as part of a
Competitive Bid Borrowing shall be evidenced by a separate
Competitive Bid Note of the Borrower payable to the order of the
Lender making such Competitive Bid Advance.
SECTION 2.05. Facility Fee. The Borrower agrees to
pay to the Agent for the account of each Lender (other than the
Designated Bidders) a facility fee (the "Facility Fee") on the
maximum amount of such Lender's Commitment (regardless of
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utilization) from the date hereof in the case of each Bank and
from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date at a rate of (i)
0.125% per annum during any period in which the Borrower has
maintained Level I Status, (ii) 0.15% per annum during any period
in which the Borrower has maintained Level II Status, (iii)
0.175% per annum during any period in which the Borrower has
maintained Level III Status, (iv) 0.225% per annum during any
period in which the Borrower has maintained Level IV Status and
(v) 0.50% per annum during any period in which the Borrower has
maintained Level V Status, payable on the last day of each
calendar quarter, commencing September 30, 1994, and on the
Termination Date.
SECTION 2.06. Reduction of the Commitments. The
Borrower shall have the right, upon at least three Business Days'
notice to the Agent, irrevocably to terminate in whole or reduce
ratably in part the respective Commitments of the Lenders,
provided that the aggregate amount of the Commitments of the
Lenders shall not be reduced to an amount which is less than the
aggregate principal amount of the Advances then outstanding and
provided, further, that each partial reduction shall be in the
aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof.
SECTION 2.07. Repayment of Revolving Advances. The
Borrower shall repay the principal amount of each Revolving
Advance made by each Lender on the last day of the Interest
Period for such Advance.
SECTION 2.08. Interest on Advances. (a) Ordinary
Interest. The Borrower shall pay interest on the unpaid
principal amount of each Revolving Advance made by each Lender
from the date of such Revolving Advance until such principal
amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. If such Revolving Advance is
a Base Rate Advance, a rate per annum equal at all times to
the Base Rate in effect from time to time, payable quarterly
on the last day of each calendar quarter and on the date
such Base Rate Advance shall be paid in full.
(ii) Adjusted Eurodollar Rate Advances. If such
Revolving Advance is a Adjusted Eurodollar Rate Advance, a
rate per annum equal at all times during the Interest Period
for such Revolving Advance to the sum of the Adjusted
Eurodollar Rate for such Interest Period plus the Applicable
Eurodollar Rate Margin in effect from time to time, payable
on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on
each day which occurs during such Interest Period every
three months from the first day of such Interest Period.
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(b) Default Interest. If any amount of principal of
an Advance is not paid when due (whether at stated maturity, by
acceleration or otherwise), then
(x) the principal amount of each Advance shall bear
interest, from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate
per annum equal at all times to the greater of (1) 2% per
annum above the rate per annum required to be paid on such
Advance immediately prior to the date on which such amount
became due and (2) 2% per annum above the Base Rate in
effect from time to time and
(y) all interest, fees and other amounts payable
hereunder which are not paid when due shall bear interest,
from the date on which any such amount referred to in this
clause (y) is due until such amount is paid in full, payable
on demand, at a rate per annum equal at all times to 2% per
annum above the Base Rate in effect from time to time.
SECTION 2.09. Interest Rate Determination. (a) Each
Reference Bank agrees to furnish to the Agent timely information
for the purpose of determining each Adjusted Eurodollar Rate. If
any one of the Reference Banks shall not furnish such timely
information to the Agent for the purpose of determining any such
interest rate, but subject to Section 2.03(b)(ii), the Agent
shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
(b) The Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the
Agent for purposes of Section 2.08(a)(ii), and the applicable
rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section
2.08(a)(ii).
SECTION 2.10. Prepayments of Revolving Advances. (a)
The Borrower shall have no right to prepay any principal amount
of any Advances other than as provided in subsection (b) below.
(b) The Borrower may, upon at least three Business
Days' notice to the Agent (in the case of Adjusted Eurodollar
Rate Advances), and upon one Business Day's notice to the Agent
(in the case of Base Rate Advances), in each case stating the
proposed date and aggregate principal amount of the prepayment,
and if such notice is given the Borrower shall, prepay the
outstanding principal amounts of the Advances comprising part of
the same Revolving Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on
the principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount not
less than $5,000,000 and (y) in the case of any such prepayment
of an Adjusted Eurodollar Rate Advance, the Borrower shall be
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obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(b).
SECTION 2.11. Increased Costs. (a) If, due to either
(i) the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements included in
the Adjusted Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining Adjusted Eurodollar
Rate Advances, then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Agent),
pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased
cost; provided that, before making any such demand, each Lender
agrees to use its best efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a
different Applicable Lending office if the making of such a
designation would avoid the need for, or reduce the amount of,
such increased cost and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender. A
certificate as to the amount of such increased cost, submitted to
the Borrower and the Agent by such Lender, shall be conclusive
and binding for all purposes, in the absence of manifest error.
(b) If any Lender (other than the Designated Bidders)
determines that compliance with any law or regulation or any
guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such
Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, upon demand
by such Lender (with a copy of such demand to the Agent), the
Borrower shall immediately pay to the Agent for the account of
such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital
to be allocable to the existence of such Lender's commitment to
lend hereunder. A certificate as to such amounts submitted to
the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, in the absence of manifest error.
(c) Except as provided in this subsection (c), failure
on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's right to demand
compensation with respect to any other period. The protection of
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this Section 2.11 shall be available to each Lender regardless of
any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition
which shall have occurred or been imposed so long as it shall be
customary for Lenders affected thereby to comply therewith. No
Lender shall be entitled to compensation under this Section 2.11
for any costs incurred or reductions suffered with respect to any
date unless it shall have notified the Borrower that it will
demand compensation for such costs or reductions not more than 90
days after the later of (i) such date and (ii) the date on which
it shall have become aware of such costs or reductions. In the
event the Borrower shall reimburse any Lender pursuant to this
Section 2.11 for any cost and the Lender shall subsequently
receive a refund in respect thereof, the Lender shall so notify
the Borrower and, upon the Borrower's request, will pay to the
Borrower the portion of such refund which it shall determine in
good faith to be allocable to the cost so reimbursed.
SECTION 2.12. Payments and Computations. (a) The
Borrower shall make each payment hereunder and under the Notes
not later than 11:00 A.M. (New York City time) on the day when
due in U.S. dollars to the Agent at its address referred to in
Section 8.02 in immediately available funds. The Agent will
promptly thereafter cause to be distributed like funds relating
to the payment of principal or interest or the Facility Fee
ratably (other than amounts payable pursuant to Section 2.04,
2.11, 2.13 or 8.04(b)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to
the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the
Register pursuant to Section 8.07(g), from and after the
effective date specified in such Assignment and Acceptance, the
Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and
to the extent payment owed to such Lender is not made when due
hereunder or under any Note held by such Lender, to charge from
time to time against any or all of the Borrower's general deposit
accounts with such Lender any amount so due.
(c) All computations of interest pursuant to clauses
(i) or (ii) of the definition of Base Rate shall be made by the
Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Adjusted
Eurodollar Rate or the Federal Funds Rate and of the Facility Fee
shall be made by the Agent on the basis of a year of 360 days, in
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each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which
such interest or Facility Fee is payable. Each determination by
the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, in the absence of manifest error.
(d) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
computation of payment of interest or the Facility Fee, as the
case may be; provided, however, if such extension would cause
payment of interest on or principal of Adjusted Eurodollar Rate
Advances to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent that the Borrower shall not
have so made such payment in full to the Agent, each Lender shall
repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date
such Lender repays such amount to the Agent, at the Federal Funds
Rate.
SECTION 2.13. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.12, free and clear of and without
deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, in the case of each Lender and
the Agent, taxes imposed on its net income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender,
taxes imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under
any Note to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have
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received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies which arise from any
payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender and the
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.13) paid by
such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Agent, at its address
referred to in Section 8.02, the original or a certified copy of
a receipt evidencing payment thereof. If no Taxes are payable in
respect of any payment hereunder or under the Notes, the Borrower
will furnish to the Agent, at such address, a certificate from
each appropriate taxing authority, or an opinion of counsel
acceptable to the Agent, in either case stating that such payment
is exempt from or not subject to Taxes.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the date
of its execution and delivery of this Agreement in the case of
each initial Lender and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if requested
in writing by the Borrower (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower with
Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement
is effectively connected with the conduct of a trade or business
in the United States. If the form provided by a Lender at the
time such Lender first becomes a party to this Agreement
indicates a United States interest withholding tax rate in excess
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of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 2.13(a).
(f) For any period with respect to which a Lender has
failed to provide the Borrower with the appropriate form
described in Section 2.13(e) (other than if such failure is due
to a change in law occurring subsequent to the date on which a
form originally was required to be provided, or if such form
otherwise is not required under the first sentence of subsection
(e) above), such Lender shall not be entitled to indemnification
under Section 2.13(a) with respect to Taxes imposed by the United
States; provided, however, that should a Lender become subject to
Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(g) Notwithstanding any contrary provisions of this
Agreement, in the event that a Lender that originally provided
such form as may be required under Section 2.13(e) thereafter
ceases to qualify for complete exemption from United States
withholding tax, such Lender may assign its interest under this
Agreement to any assignee and such assignee shall be entitled to
the same benefits under this Section 2.13 as the assignor
provided that the rate of United States withholding tax
applicable to such assignee shall not exceed the rate then
applicable to the assignor.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.13 shall
survive the payment in full of principal and interest hereunder
and under the Notes.
(i) Any Lender claiming any additional amounts payable
pursuant to this Section 2.13 shall use its best efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate of any Lender claiming compensation under
this Section 2.13 shall be conclusive and binding for all
purposes, in the absence of manifest error.
SECTION 2.14. Sharing of Payments, Etc. If any Lender
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of
the Revolving Advances made by it (other than pursuant to Section
2.11 or 2.13) in excess of its ratable share of payments on
account of the Revolving Advances obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Advances made by them as shall be
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necessary to cause such purchasing Lender to share the excess
payment ratably with each of them, provided, however, that if all
or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each Lender shall
be rescinded and such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery together with
an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.14 may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Advances. The obligation of each Lender (other than the
Designated Bidders) to make its initial Advance is subject to the
conditions precedent that (a) the Closing Date shall have
occurred on or prior to June 29, 1994, (b) all fees and expenses
payable to the Agent pursuant to the Fee Letter or to the Agent
and the Lenders pursuant to this Agreement on or prior to the
Closing Date shall have been paid in full, (c) the Borrower shall
have repaid or prepaid or cause to be repaid or prepaid all
Advances (as defined in the Existing Agreement) and the interest
thereon and all fees, expenses and other amounts payable by the
Borrower under the Existing Agreement, and the unused Commitments
(as defined in the Existing Agreement) of the Lenders (as defined
in the Existing Agreement), determined after giving effect to the
repayment of all such Advances, shall have been reduced to zero
and (d) the Agent shall have received on or before the day of
such initial Borrowing the following, each dated as of the
Closing Date, in form and substance satisfactory to the Agent and
(except for the Revolving Notes) in sufficient copies for each
Lender:
(a) A Revolving Note payable to the order of each
Lender in the principal amount of such Lender's Commitment.
(b) Certified copies of the resolutions of the Board
of Directors of the Borrower approving this Agreement and
the Notes, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement and the Notes.
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(c) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to
sign this Agreement and the Notes and the other documents to
be delivered hereunder.
(d) A favorable opinion of Jones, Day, Reavis & Pogue,
counsel for the Borrower, substantially in the form of
Exhibit E hereto and as to such other matters as any Lender
through the Agent may reasonably request.
(e) A favorable opinion of Sidley & Austin, counsel
for the Agent, substantially in the form of Exhibit F
hereto.
SECTION 3.02. Conditions Precedent to Each Borrowing.
The obligation of each Lender to make a Revolving Advance on the
occasion of each Revolving Borrowing (including the initial
Revolving Borrowing) shall be subject to the further conditions
precedent that the Agent shall have received the Notice of
Revolving Borrowing with respect thereto and that on the date of
such Borrowing (a) the following statements shall be true (and
each of the giving of the applicable Notice of Revolving
Borrowing and the acceptance by the Borrower of the proceeds of
such Revolving Borrowing shall constitute a representation and
warranty by the Borrower that on the date of such Revolving
Borrowing such statements are true):
(i) the representations and warranties contained in
Section 4.01 (excluding (except with respect to the initial
Advance hereunder) those contained in subsections (f), (g)
and (k) thereof) are correct on and as of the date of such
Revolving Borrowing, before and after giving effect to such
Revolving Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
(ii) no Default has occurred and is continuing, or
would result from such Revolving Borrowing or from the
application of the proceeds therefrom;
and (b) the Agent shall have received such other approvals,
opinions or documents as any Lender (other than the Designated
Bidders) through the Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive
Bid Borrowing. The obligation of each Lender which is to make a
Competitive Bid Advance on the occasion of a Competitive Bid
Borrowing (including the initial Competitive Bid Borrowing) to
make such Competitive Bid Advance as part of such Competitive Bid
Borrowing is subject to the conditions precedent that (i) the
Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, (ii) on or before
the date of such Competitive Bid Borrowing, but prior to such
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Competitive Bid Borrowing, the Agent shall have received a
Competitive Bid Note payable to the order of such Lender for each
of the one or more Competitive Bid Advances to be made by such
Lender as part of such Competitive Bid Borrowing, in a principal
amount equal to the principal amount of the Competitive Bid
Advance to be evidenced thereby and otherwise on such terms as
were agreed to for such Competitive Bid Advance in accordance
with Section 2.04 and (iii) on the date of such Competitive Bid
Borrowing the following statements shall be true (and each of the
giving of the applicable Notice of Competitive Bid Borrowing and
the acceptance by the Borrower of the proceeds of such
Competitive Bid Borrowing shall constitute a representation and
warranty by the Borrower that on the date of such Competitive Bid
Borrowing such statements are true):
(a) the representations and warranties contained in
Section 4.01 (excluding (except with respect to any
Competitive Bid Advance to be made on the Closing Date)
those contained in subsections (f), (g) and (k) thereof) are
correct on and as of the date of such Competitive Bid
Borrowing, before and after giving effect to such
Competitive Bid Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date,
(b) no Default has occurred and is continuing, or
would result from such Competitive Bid Borrowing or from the
application of the proceeds therefrom and
(c) no event has occurred and no circumstance exists
as a result of which the information concerning the Borrower
that has been provided to the Agent and each Lender by the
Borrower in connection herewith would include an untrue
statement of a material fact or omit to state any material
fact or any fact necessary to make the statements contained
therein, in the light of the circumstances under which they
were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Corporate Existence. The Borrower is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Corporate Authorization. The execution, delivery
and performance by the Borrower of this Agreement, the Notes
and the other Loan Documents are within the Borrower's
corporate powers, have been duly authorized by all necessary
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corporate action, and do not contravene, or constitute a
default under, (i) the Borrower's charter or by-laws, or
(ii) any other Requirement of Law or (iii) any agreement,
contractual restriction or other instrument binding on or,
to the Borrower's knowledge, affecting the Borrower or
result in the creation or imposition of any Lien on any
material asset of the Borrower or any of its Subsidiaries.
(c) Governmental Authorization. No authorization or
approval or other action by, and no notice to or filing
with, any Governmental Authority is required for the due
execution, delivery and performance by the Borrower of this
Agreement, the Notes or any other Loan Document.
(d) Binding Effect. This Agreement is, and the Notes
and the other Loan Documents when delivered hereunder will
be, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their
respective terms.
(e) Financial Information. The balance sheets of the
Borrower and its Consolidated Subsidiaries as at
December 31, 1993 and March 31, 1994, respectively, and the
related statements of income, cash flows and (in the case of
such fiscal year only) stockholders' equity of the Borrower
and its Consolidated Subsidiaries for the fiscal year ended
December 31, 1993 and the fiscal quarter ended March 31,
1994, copies of which have been furnished to each Bank,
fairly present the financial condition of the Borrower and
its Consolidated Subsidiaries as at each such date and the
results of the operations and cash flows of the Borrower and
its Consolidated Subsidiaries for the period ended on each
such date, all in accordance with generally accepted
accounting principles consistently applied.
(f) No Changes, etc. Since December 31, 1993, except
for possible changes relating to the Borrower's roofing
business segment, which appears in the financial statements
of the Borrower and its Consolidated Subsidiaries for the
fiscal year ended December 31, 1993 as a discontinued
operation, there has occurred no event which has had or is
reasonably likely to have a Material Adverse Effect.
(g) Litigation. There is no pending or threatened
action or proceeding affecting the Borrower or any of its
Subsidiaries before any Governmental Authority or
arbitrator, which has had or is reasonably likely to have a
Material Adverse Effect.
(h) Compliance with Margin Regulations. The Borrower
is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance have been used in violation of any
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Requirement of Law (including, without limitation,
Regulation G, Regulation T, Regulation U and Regulation X).
At no time would more than 25% of the value of the assets of
the Borrower or the Borrower and its Consolidated
Subsidiaries that are subject to any "arrangement" (as such
term is used in Section 221.2(g) of Regulation U) hereunder
be represented by Margin Stock.
(i) Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(j) ERISA Matters. (i) Each member of the ERISA
Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code
with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code, and has not incurred
any liability to the PBGC or a Plan under Title IV of ERISA
that has not been paid in full other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
(ii) No ERISA Event which might result in
liability to the PBGC (other than for premiums payable under
Title IV of ERISA) has occurred or is reasonably expected to
occur with respect to any Plan.
(iii) Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Plan
whose liabilities are in excess of its assets by an amount
greater than $100,000, copies of which have been filed with
the Internal Revenue Service prior to the date hereof and
furnished to the Agent and the Lenders listed on the
signature pages hereof, is complete and accurate and fairly
presents the funding status and financial condition of such
Plan, and since the date of such Schedule B there has been
no material adverse change in such funding status or
financial condition.
(iv) As of the date of this Agreement, neither
the Borrower nor any ERISA Affiliate has incurred, or is
reasonably expected to incur, any Withdrawal Liability which
has not been paid in full to any Multiemployer Plan (other
than Withdrawal Liabilities, if any, which in the aggregate
are immaterial or nominal).
(v) As of the date of this Agreement, neither the
Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in
reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated within
the meaning of Title IV of ERISA, which reorganization or
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termination would result in any liability of the Borrower or
any ERISA Affiliate (other than liabilities, if any, which
in the aggregate are immaterial or nominal).
(k) Environmental Matters. Neither the Borrower nor
any of its Subsidiaries has received notice or otherwise
obtained knowledge of any Claim, demand, action, event,
condition, report or investigation indicating or concerning
any potential or actual liability which individually or in
the aggregate has had or is reasonably likely to have a
Material Adverse Effect arising in connection with (i) any
non-compliance with or violation of any Environmental,
Health or Safety Requirements of Law or (ii) the Release or
threatened Release of any Contaminant into the environment.
None of the Borrower or its Subsidiaries or any of their
respective operations or present or past Property are
subject to any investigation by, or any judicial or
administrative proceeding, order, judgment, decree or
settlement alleging or addressing (i) a violation of any
Environmental, Health or Safety Requirement of Law; (ii) any
Remedial Action; or (iii) any Claims or Liabilities and
Costs arising from the Release or threatened Release of a
Contaminant into the environment, which (in any such case
referred to in the preceding clauses (i), (ii) or (iii)) has
had or is reasonably likely to have a Material Adverse
Effect, nor has the Borrower or any of its Subsidiaries
received any notice of any of the foregoing which the
Borrower in good faith believes is reasonably likely to have
a Material Adverse Effect. No Environmental Lien has
attached to any Property of the Borrower or any of its
Subsidiaries which has had or is reasonably likely to have a
Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Note shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower agrees that, unless the Majority Lenders
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. The Borrower will
comply, and cause each of its Subsidiaries to comply, in all
material respects with all applicable Requirements of Law.
(b) Preservation of Corporate Existence. The Borrower
will preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate
existence, corporate rights (charter and statutory), and
corporate franchises; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to
preserve any right or franchise if the Board of Directors of
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the Borrower or such Subsidiary shall determine that the
preservation thereof is no longer necessary or desirable in
the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to the Borrower,
such Subsidiary or the Lenders. Nothing in this
Section 5.01(b) shall be deemed to prohibit any merger or
consolidation involving the Borrower or any of its
Subsidiaries which is permitted by Section 5.02(b).
(c) Accuracy of Information Given to Lenders. The
Borrower will use its best efforts to ensure that (i) all
written information, exhibits or reports furnished by the
Borrower or any of its Subsidiaries to the Agent or any
Lender in connection herewith (other than financial
projections) will at the time so furnished contain no untrue
statement of a material fact and will not at such time omit
to state any material fact or any fact necessary to make the
statements contained therein not misleading, and (ii) all
financial projections, if any, prepared by the Borrower and
furnished by the Borrower to the Agent or any Lender in
connection herewith will be prepared in good faith based
upon reasonable assumptions (it being understood that any
such projections will be subject to significant
uncertainties and contingencies, and that no assurance can
be given that any such projections will be realized).
(d) Insurance. The Borrower will maintain, and cause
each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
(e) Books and Records. The Borrower will keep proper
books of record and account in which entries in conformity
with generally accepted accounting principles (and all legal
requirements) shall be made of all dealings and transactions
in relation to their businesses and activities.
(f) Use of Proceeds. The proceeds of the Advances
made under this Agreement will be used by the Borrower for
any lawful purposes not prohibited by the terms of this
Agreement, including, without limitation, acquisitions of
companies and fees and expenses related to such
acquisitions. None of such proceeds will be used in
violation of any applicable Requirement of Law, including,
without limitation, Regulation G, Regulation T, Regulation U
and Regulation X.
(g) Payment of Taxes, Etc. The Borrower will pay and
discharge, and will cause each Subsidiary of the Borrower to
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pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or
levies imposed upon it or upon it or upon its Property, and
(ii) all lawful claims which, if unpaid, (x) might by law
become a Lien upon its Property or (y) would otherwise be
reasonably likely to have a Material Adverse Effect;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge, levy or claim which is being
contested in good faith by proper proceedings and as to
which appropriate reserves are being maintained in
accordance with GAAP.
(h) Reporting Requirements. The Borrower will furnish
to the Lenders:
(i) as soon as available and in any event within
45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower,
Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and
Consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with
the end of such quarter, certified by the chief
financial or accounting officer of the Borrower,
together with (A) a certificate of said officer stating
that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower
has taken or proposes to take with respect thereto, and
(B) a schedule in form satisfactory to the Agent of the
computations used by the Borrower in determining
compliance with the requirements and covenants
contained in Section 5.02(c) and 5.02(d);
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of the
Borrower, a copy of the annual report for such year for
the Borrower and its Subsidiaries, containing financial
statements for such year certified in a manner
acceptable to the Majority Lenders by Ernst & Young or
other independent public accountants acceptable to the
Majority Lenders, together with (A) a certificate of
such accounting firm stating that in the course of the
regular audit of the business of the Borrower, which
audit was conducted by such accounting firm in
accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or, if, in the
opinion of such accounting firm, a Default has occurred
and is continuing, a statement as to the nature thereof
and (B) a schedule in form satisfactory to the Agent of
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the computations used by such accountants in
determining, as of the end of such fiscal year,
compliance with the requirements and covenants
contained in Section 5.02(c) and 5.02(d);
(iii) as soon as possible and in any event within
two days after the occurrence of each Default
continuing on the date of such statement, a statement
of the chief financial or accounting officer of the
Borrower setting forth details of such Default and the
action which the Borrower has taken and proposes to
take with respect thereto;
(iv) as soon as possible and in any event (i)
within thirty days after the Borrower or any ERISA
Affiliate knows or has reason to know that any ERISA
Event described in clause (a) of the definition of
ERISA Event with respect to any Plan has occurred which
reasonably could result in liability to the PBGC (other
than liabilities, if any, which are immaterial or
nominal in the aggregate) and (ii) within 10 days after
the Borrower or any ERISA Affiliate knows or has reason
to know that any other ERISA Event with respect to any
Plan has occurred which reasonably could result in
liability to the PBGC (other than liabilities, if any,
which are immaterial or nominal in the aggregate), a
statement of the chief financial or accounting officer
of the Borrower describing such ERISA Event and the
action, if any, that the Borrower or such ERISA
Affiliate has taken or proposes to take with respect
thereto;
(v) promptly after the receipt thereof by the
Borrower or any ERISA Affiliate, (A) copies of all
reports and notices which could result in an adverse
financial effect on the Borrower or any of its
Subsidiaries which the Borrower or any ERISA Affiliate
receives from the PBGC, the Internal Revenue Service or
the U.S. Department of Labor with respect to any Plan,
Multiemployer Plan or Multiple Employer Plan, (B)
copies of each notice from the PBGC received by the
Borrower or any ERISA Affiliate of the PBGC's intention
to terminate any Plan or to have a trustee appointed to
administer any Plan and (C) a copy of each notice from
the sponsor of a Multiemployer Plan received by the
Borrower or any ERISA Affiliate concerning (I) the
imposition of Withdrawal Liability by a Multiemployer
Plan, (II) the determination that a Multiemployer Plan
is, or is expected to be, in reorganization within the
meaning of Title IV of ERISA, (III) the termination of
a Multiemployer Plan within the meaning of Title IV of
ERISA or (IV) the amount of liability incurred, or
expected to be incurred, by the Borrower or any ERISA
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Affiliate in connection with any event described in
clause (I), (II) or (III) above;
(vi) promptly after the commencement thereof,
notice of all actions, suits and proceedings before any
domestic or foreign court or Governmental Authority
affecting the Borrower or any of its Subsidiaries, of
the type described in Section 4.01(g);
(vii) promptly after the sending or filing
thereof, copies of all proxy statements, financial
statements and reports that the Borrower or any of its
Subsidiaries sends to its stockholders generally, and
copies of all regular, periodic and special reports,
and all registration statements (other than any
registration statement on Form S-8 or any successor
form thereto), that the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission or any Governmental Authority that may be
substituted therefor, or with any national securities
exchange; and
(viii) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Lender
through the Agent may from time to time reasonably
request.
SECTION 5.02. Negative Covenants. So long as any Note
or any amount due hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any
Lien upon or with respect to any of its Property, whether
now owned or hereafter acquired, or assign, or permit any of
its Subsidiaries to assign, any right to receive income in
each case to secure or provide for the payment of any Debt
of any Person; excluding, however, from the operation of the
foregoing restrictions, (i) Existing Liens (including the
replacement, extension or renewal of any such Existing Lien
upon the same Property theretofore subject thereto and the
replacement, extension or renewal (without increase of
principal amount) of the Debt secured thereby), (ii) Liens
for taxes, assessments or governmental charges or levies,
not yet due and payable, or being contested in good faith
and against which reserves have been established by the
Borrower to the extent required under GAAP, (iii) Liens
imposed by law, such as materialmen's, mechanics',
carriers', workmen's, and repairmen's Liens and other
similar Liens arising in the ordinary course of business
securing obligations (other than Debt) which are not overdue
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for a period of more than 30 days, (iv) pledges or deposits
to secure obligations under workmen's compensation laws or
similar legislation or to secure statutory obligations of
the Borrower or any of its Subsidiaries which do not
interfere with or adversely affect in any material respect
the ordinary conduct of the business of the Borrower or any
of its Subsidiaries, (v) Liens of landlords arising by
operation of law or pursuant to leases entered into in the
ordinary course of business securing rental obligations
which are not overdue for a period of more than 30 days,
(vi) Liens on property (including, without limitation,
shares of capital stock) of a corporation existing at the
time such corporation is merged with or into or consolidated
with the Borrower or any of its Subsidiaries or at the time
of a sale, lease or other disposition of the properties of
such corporation as an entirety or substantially as an
entirety to the Borrower or any of its Subsidiaries,
provided, that (i) such Liens are not incurred in
anticipation of such merger, consolidation or sale, lease or
other disposition with or into the Borrower or any of its
Subsidiaries and (ii) such Liens do not extend to any other
Property of the Borrower or any of its Subsidiaries,
(vii) Liens created in the ordinary course of business in
favor of the United States of America or any State thereof,
or any department, agency or political subdivision of the
United States of America or any State thereof, to secure
partial, progress, advance or other payments pursuant to any
contract (other than for borrowed money) or statute,
(viii) Liens created in the ordinary course of business by
or resulting from any litigation or proceedings which are
being contested in good faith, Liens arising in the ordinary
course of business out of judgments or awards against the
Borrower or any of its Subsidiaries with respect to which
the Borrower or such Subsidiary is in good faith prosecuting
an appeal or proceedings for review, or Liens incurred in
the ordinary course of business by the Borrower or any of
its Subsidiaries for the purpose of obtaining a stay or
discharge in the course of any legal proceeding to which the
Borrower or such Subsidiary is a party, (ix) easements,
rights of way and other encumbrances on title to real
property that do not render title to the Property encumbered
thereby unmarketable or materially adversely affect the use
of such Property for its intended purposes, (x) purchase
money Liens upon or in Property acquired or held by the
Borrower or any of its Subsidiaries in the ordinary course
of business to secure the purchase price of such Property or
to secure Debt incurred solely for the purpose of financing
the acquisition, construction or improvement of any such
Property to be subject to such Liens, or Liens existing on
any such Property at the time of acquisition, or extensions,
renewals or replacements of any of the foregoing for the
same or a lesser amount, provided that no such Lien shall
extend to or cover any Property other than the Property
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being acquired, constructed or improved, and no such
extension, renewal or replacement shall extend to or cover
any Property not theretofore subject to the Lien being
extended, renewed or replaced, and provided, further, that
the aggregate principal amount of the Debt at any one time
outstanding secured by Liens permitted by this clause (x)
shall not exceed $10,000,000 at any one time outstanding and
that any such Debt shall not otherwise be prohibited by the
terms of this Agreement, and (xi) Liens not otherwise
permitted hereunder securing Debt in an aggregate amount not
to exceed at any time an amount equal to $35,000,000.
(b) Mergers, Etc. Merge or consolidate with or into
(unless the Borrower is the surviving corporation of such
merger or consolidation), or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to, any
Person, or permit any of its Subsidiaries to do so, except
that (i) any Person may merge with and into the Borrower,
(ii) any Subsidiary of the Borrower may merge with or into
any other Person and (iii) any Subsidiary of the Borrower
may sell or otherwise dispose of all or substantially all of
its assets, provided that (w) immediately after giving
effect to any such merger or sale or other disposition of
assets referred to in clause (i), (ii) or (iii), no Default
would exist, (x) the surviving corporation of any such
merger referred to in clause (i) is, immediately after
giving effect to such merger, the Borrower, (y) if the
surviving corporation of any merger referred to in clause
(ii) is not, immediately after giving effect to such merger,
a Subsidiary of the Borrower, the Borrower and/or its
Subsidiaries shall have received as consideration for such
merger cash, property or securities representing the fair
market value of the Borrower's and its Subsidiaries'
interest in such Subsidiary immediately prior to such merger
(as determined by the Board of Directors of the Borrower),
and (z) in the case of any sale or other disposition
referred to in clause (iii), the Borrower and/or its
Subsidiaries shall have received as consideration for such
sale or other disposition cash, property or securities
representing the fair market value of such assets
immediately prior to such sale or other disposition (as
determined by the Board of Directors of the Borrower).
(c) Interest Service Coverage. Permit, on the last
day of March, June, September and December in each year,
commencing September 30, 1994, the ratio of (i) Consolidated
EBIT of the Borrower and its Consolidated Subsidiaries
during the twelve-month period ending on such date to (ii)
Consolidated Interest Expense of the Borrower and its
Consolidated Subsidiaries for such twelve-month period to be
less than 2.0 to 1.0.
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(d) Adjusted Net Worth Ratio. Permit the ratio of
(i) Consolidated Debt to (ii) the sum of (A) Consolidated
Debt plus (B) Adjusted Net Worth of the Borrower and its
Consolidated Subsidiaries to exceed 0.55 to 1.0 at any time.
(e) Plan Terminations. Terminate, or permit any ERISA
Affiliate to terminate, any Plan or Plans so as to result in
liability of the Borrower or any ERISA Affiliate to the PBGC
in excess of $5,000,000 in the aggregate, or permit to exist
one or more events or conditions which reasonably present a
material risk of a termination by the PBGC of any Plan or
Plans with respect to which the Borrower or any ERISA
Affiliate would, in the event of such termination, incur
liability to the PBGC in excess of $5,000,000 in the
aggregate.
(f) Employee Benefit Costs and Liabilities. Fail to
comply, or permit any ERISA Affiliate to fail to comply,
with the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) the Borrower shall fail to pay any principal of
any Note when the same becomes due and payable, or shall
fail to pay any interest on any Note or any other amount
payable under this Agreement within five days of the due
date thereof; or
(b) any representation or warranty made (or deemed
made in accordance with Section 3.02 or Section 3.03) by the
Borrower herein or by the Borrower (or any of its officers)
in connection with this Agreement shall prove to have been
incorrect in any material respect when made (or deemed
made); or
(c) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in this Agreement on
its part to be performed or observed, if such failure shall
remain unremedied for 10 Business Days after written notice
thereof shall have been given to the Borrower by the Agent
or any Lender; or
(d) the Borrower or any of its Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt
which is outstanding in a principal amount of at least
$10,000,000 in the aggregate (but excluding Debt evidenced
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by the Notes) of the Borrower or such Subsidiary (as the
case may be), when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after
the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall
continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt
shall be declared to be due and payable, or required to be
prepaid or redeemed (other than by a regularly scheduled
required prepayment or required sinking fund redemption
payment), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof;
or
(e) the Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted
by or against the Borrower or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its Property; or the Borrower or any of
its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this
subsection (e); or
(f) any judgment or order for the payment of money in
excess of $10,000,000 shall be rendered against the Borrower
or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of
10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(g) Any ERISA Event with respect to a Plan shall have
occurred and, thirty days after notice thereof shall have
been given to the Borrower by the Agent, (i) such ERISA
Event shall still exist, (ii) such ERISA Event shall have
caused or shall have created a material risk of the
termination of or the appointment of a trustee with respect
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to the affected Plan by or at the request of the PBGC and
(iii) the sum (determined as of the date of occurrence of
such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to
which the events or circumstances described in the preceding
clauses (i) and (ii) shall have occurred and then exist (or
in the case of a Plan with respect to which an ERISA Event
described in clauses (c) through (f) of the definition of
ERISA Event shall have occurred and then exist, the
liability related thereto) is equal to or greater than
$5,000,000; or
(h) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multiemployer Plan
in an amount that, when aggregated with all other amounts
then required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the
date of such notification), exceeds $10,000,000; or
(i) The Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a
result of such reorganization or termination the aggregate
annual contributions of the Borrower and the ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer
Plans for the plan years that include the date hereof by an
amount exceeding $10,000,000; or
(j) Any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934,
as amended) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) or control of 35% or
more of the outstanding shares of common stock of the
Borrower; or, during any period of twelve consecutive
calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the
Borrower;
then, and in any such event, the Agent (i) shall at the request,
or may with the consent, of the Majority Lenders, by notice to
the Borrower, declare the obligation of each Lender to make
Advances to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall
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become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided, however, that
in the event of an actual or deemed entry of an order for relief
with respect to the Borrower or any of its Subsidiaries under the
Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the
Notes, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender
hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority
Lenders or all Lenders if required by Section 8.01, as
applicable, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that the
Agent shall not be required to take any action which exposes the
Agent to personal liability or which is contrary to this
Agreement or applicable law. The Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the
Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement, except for
its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i)
may treat the payee of any Note as the holder thereof until the
Agent receives and accepts an Assignment and Acceptance entered
into by the Lender which is the payee of such Note, as assignor,
and an Eligible Assignee, as assignee, as provided in Section
8.07; (ii) may consult with legal counsel (including counsel for
the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no
warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or
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representations (whether written or oral) made in or in
connection with this Agreement; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on
the part of the Borrower or to inspect the Property (including
the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent,
certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect
to its Commitment, the Advances made by it and the Notes issued
to it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though
it were not the Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of,
and generally engage in any kind of business with, the Borrower,
any of its subsidiaries and any Person who may do business with
or own securities of the Borrower or any such subsidiary, all as
if Citibank were not the Agent and without any duty to account
therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
the Agent or any other Lender and based on the financial
statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without
reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders (other
than the Designated Bidders) agree to indemnify the Agent (to the
extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Revolving Notes then held by
each of them (or if no Revolving Notes are at the time
outstanding or if any Revolving Notes are held by Persons which
are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this
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Agreement or any action taken or omitted by the Agent under this
Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Lender (other than the Designated Bidders) agrees to reimburse
the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the
Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this
Agreement, to the extent that the Agent is not reimbursed for
such expenses by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign
at any time by giving written notice thereof to the Lenders and
the Borrower and may be removed at any time with or without cause
by the Majority Lenders. Upon any such resignation or removal,
the Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of
any State thereof and having total assets in excess of
$3,000,000,000 and a combined capital and surplus of at least
$150,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this
Agreement.
SECTION 7.07. Agent's Fee. The Borrower shall pay to
Citibank for its own account the administrative agent fee
referred to in the Fee Letter.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement or the Revolving Notes, nor
consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed
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by the Majority Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the
Lenders (other than the Designated Bidders), do any of the
following: (a) waive any of the conditions specified in Section
3.01, 3.02 (if and to the extent that the Borrowing which is the
subject of such waiver would involve an increase in the aggregate
outstanding amount of Advances over the aggregate amount of
Advances outstanding immediately prior to such Borrowing) or
3.03, (b) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (c) reduce the principal
of, or interest on, the Revolving Notes or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Revolving Notes or
any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Revolving Notes, or the number of
Lenders, which shall be required for the Lenders or any of them
to take any action hereunder or (f) amend the definition of
Majority Lenders or this Section 8.01; and provided, further,
that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Agent under
this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at M.A. Hanna
Company, 1301 East Ninth Street, Suite 3600, Cleveland,
Ohio 44114, Attention: Treasury Department, with a copy marked to
the attention of the Borrower's Corporate Secretary, at the same
address; if to any Bank, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender,
at its Domestic Lending Office specified in the Assignment and
Acceptance or Designation Agreement pursuant to which it became a
Lender; and if to the Agent, at its address at Bank Loan
Syndications, 1 Court Square, 7th Floor, Long Island City, New
York 11120, Attention: Mr. Philip F. Green, telephone - (718)
248-4529, telecopier - (718) 248-4844, with a copy to each of
Ms. Judith E. Goldkrand, Citibank, N.A., 399 Park Avenue, New
York, New York 10043, telephone - (212) 559-4649, telecopier -
(212) 793-3053, and Daniel S. Dokos, Esq., Sidley & Austin, 875
Third Avenue, New York, New York 10022; or, as to each party, at
such other address as shall be designated by such party in a
written notice to the other parties. All such notices and
communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Agent pursuant to
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Article II or VII shall not be effective until received by the
Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses and Taxes. (a) Subject
to the terms of the Fee Anticipation Letter, the Borrower agrees
to pay promptly upon request all costs and expenses in connection
with the preparation, execution, delivery, administration,
interpretation, modification and amendment of this Agreement, the
Notes and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights
and responsibilities under this Agreement. The Borrower further
agrees to pay promptly upon request all costs and expenses, if
any, of the Agent and each Lender (including, without limitation,
reasonable counsel fees and expenses) in connection with the
enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Notes, the other Loan Documents
and the other documents to be delivered hereunder and thereunder,
(ii) in connection with any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding,
(iii) in commencing, defending or intervening in any litigation
or in filing a petition, complaint, answer, motion or other
pleadings in any legal proceeding relating to this Agreement, the
Notes, the other Loan Documents, the Property, the Borrower or
any of the Borrower's Subsidiaries and related to or arising out
of the transactions contemplated hereby or by any of the other
Loan Documents and (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise)
described in clauses (i) through (iii) above.
(b) If any payment of principal of any Adjusted
Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Revolving Advance, as a result of a
payment pursuant to Section 2.10(b) or acceleration of the
maturity of the Notes pursuant to Section 6.01 or for any other
reason, the Borrower shall, promptly upon request by any Lender
(with a copy of such request to the Agent), pay to the Agent for
the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation
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or reemployment of deposits or other funds acquired by any Lender
to fund or maintain such Revolving Advance.
(c) The Borrower agrees to indemnify and hold harmless
the Agent and each Lender and their respective Affiliates, and
each of their respective directors, officers, employees and
agents, from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, fees and
disbursements of counsel) which may be incurred by or asserted
against the Agent or such Lender or Affiliate or any such
director, officer, employee or agent in connection with or
arising out of any investigation, litigation, or proceeding,
whether or not the Agent or such Lender or Affiliate or any such
director, officer, employee or agent is a party thereto, related
to this Agreement or any transaction or proposed transaction
(whether or not consummated) in which any proceeds of any
Borrowing are applied or proposed to be applied, directly or
indirectly, by the Borrower or any of its Subsidiaries, unless
such loss, claim, damage, liability or expense is found in a
final judgment of a court of competent jurisdiction to have
resulted from such indemnified party's gross negligence or wilful
misconduct. The obligations of the Borrower under this Section
8.04 shall survive the Termination Date.
SECTION 8.05. Right of Set-off. Nothing herein shall
derogate any Lender's right, if any, if and to the extent payment
owed to such Lender is not made when due hereunder or under any
Competitive Bid Note held by such Lender, to set off from time to
time against any or all of the Borrower's general deposit
accounts with such Lender any amount so due. Each Lender agrees
promptly to notify the Borrower after any such set-off and
application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off
and application. The rights of each Lender under this Section
8.05 are in addition to other rights and remedies which such
Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall
become effective when it shall have been executed by the
Borrower and the Agent and when the Agent shall have been
notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.
SECTION 8.07. Assignments, Designations and
Participations. (a) Each Lender (other than the Designated
Bidders) may and, if demanded by the Borrower (following a demand
by such Lender pursuant to Section 2.13) upon at least three
Business Days' notice to such Lender and the Agent, will, assign,
with (except in the case of any assignment to an Affiliate of
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such Lender) the consent of the Agent and the Borrower (which
consent shall not be unreasonably withheld or delayed), to one or
more banks or other entities all or a proportionate part of all
of its rights and obligations under this Agreement (including,
without limitation, all or a proportionate part of all of its
Commitment, the Revolving Advances owing to it and the Revolving
Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage
of all rights and obligations under this Agreement (other than
any right to make Competitive Bid Advances, Competitive Bid
Advances owing to it or Competitive Bid Notes), (ii) the amount
of the Commitment of the assigning Lender being assigned pursuant
to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall
in no event be less than $5,000,000 and shall (unless such amount
constitutes the entire remaining amount of the assigning Lender's
Commitment) be an integral multiple of $1,000,000, (iii) each
such assignment shall be to an Eligible Assignee, (iv) each such
assignment made as a to result of a demand by the Borrower
pursuant to this Section 8.07(a) shall be arranged by the
Borrower after consultation with the Agent and shall be either an
assignment of all of the rights and obligations of the assigning
Lender under this Agreement (other than any Competitive Bid
Advances or Competitive Bid Notes) or an assignment of a portion
of such rights and obligations (other than any Competitive Bid
Advances or Competitive Bid Notes) made concurrently with another
such assignment or other such assignments which together cover
all of the rights and obligations of the assigning Lender under
this Agreement (other than any Competitive Bid Advances or
Competitive Bid Notes), (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower
pursuant to this Section 8.07(a) unless and until such Lender
shall have received one or more payments from either the Borrower
or one or more Eligible Assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the
Revolving Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount
and all other amounts payable to such Lender under this
Agreement, and (vi) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together
with any Revolving Note or Notes subject to such assignment and a
processing and recordation fee of $3,000. Upon such execution,
delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
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<PAGE>
Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed
by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that
it is an Eligible Assignee, together with any Revolving Note or
Notes subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Revolving
Note or Notes a new Revolving Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning
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<PAGE>
Lender has retained a Commitment hereunder, a new Revolving Note
to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Revolving Note or
Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Revolving Note or
Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of
Exhibit A-1 hereto.
(d) Each Lender may assign to one or more banks or
other entities any Competitive Bid Note or Notes held by it. In
addition, each Lender (other than the Designated Bidders) may
designate one or more banks or other entities to have a right to
make Competitive Bid Advances as a Lender pursuant to Section
2.04; provided, however, that (i) no such Lender shall be
entitled to make more than three such designations, (ii) each
such Lender making one or more of such designations shall retain
the right to make Competitive Bid Advances as a Lender pursuant
to Section 2.04, (iii) each such designation shall be to a
Designated Bidder and (iv) the parties to each such designation
shall execute and deliver to the Agent, for its acceptance and
recording in the Register, a Designation Agreement. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Designation Agreement, the
designee thereunder shall be a party hereto with a right to make
Competitive Bid Advances as a Lender pursuant to Section 2.04 and
the obligations related thereto.
(e) By executing and delivering a Designation
Agreement, the Lender making the designation thereunder and its
designee thereunder confirm and agree with each other and the
other parties hereto as follows: (i) such Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such Lender makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or
observance by the Borrower or any of its obligations under this
Agreement or any other instrument or document furnished pursuant
hereto; (iii) such designee confirms that it has received a copy
of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into the Designation
Agreement; (iv) such designee will, independently and without
reliance upon the Agent, such designating Lender or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;
(v) such designee confirms that it is a Designated Bidder; (vi)
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<PAGE>
such designee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto;
and (vii) such designee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(f) Upon its receipt of a Designation Agreement
executed by a designating Lender and a designee representing that
it is a Designated Bidder, the Agent shall, if such Designation
Agreement has been completed and is substantially in the form of
Exhibit D hereto, (i) accept such Designation Agreement, (ii)
record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
(g) The Agent shall maintain at its address referred
to in Section 8.02 a copy of each Assignment and Acceptance and
each Designation Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of each
of the Lenders and, with respect to Lenders other than Designated
Bidders, the Commitment of, and principal amount of the Revolving
Advances owing to, each such Lender from time to time (the
"Register"). The Register shall contain the information
specified in Section 2.01(c), and the entries in the Register
shall be conclusive and binding for the purposes of this
Agreement, in the absence of manifest error, and the Borrower,
the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for the purposes
of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(h) Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances
owing to it and the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement,
and (iv) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement. Any participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce
the obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification or
waiver of any provision of this Agreement; provided that any
participation agreement may provide that the relevant Lender will
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<PAGE>
not agree to any modification, amendment or waiver of this
Agreement which (i) increases or decreases the Commitment of such
Lender, (ii) reduces the principal of or rate of interest on any
Advance or fees hereunder in which the participant has an
interest or (iii) postpones the date fixed for any payment of
principal of or interest on any Advance or any fees hereunder in
which the participant has an interest without the consent of the
participant. The Borrower agrees that each participant shall, to
the extent provided in its participation agreement, be entitled
to the benefits of Sections 2.11, 2.13 and 8.04(b) hereof with
respect to its participating interest. No participant or other
transferee of such Lender's rights shall be entitled to receive
any greater payment under Sections 2.11, 2.13 and 8.04(b) hereof
than such Lender would have been entitled to receive with respect
to the rights transferred.
(i) Subject to Section 8.13, any Lender may, in
connection with any assignment, designation or participation or
proposed assignment, designation or participation pursuant to
this Section 8.07, disclose to the assignee, designee or
participant or proposed assignee, designee or participant, any
information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower in connection with this Agreement;
provided that, prior to any such disclosure, the assignee,
designee or participant or proposed assignee, designee or
participant shall agree to preserve the confidentiality of any
confidential information relating to the Borrower received by it
from such Lender.
(j) Anything in this Section 8.07 to the contrary
notwithstanding, any Lender may, upon notice to the Agent and the
Borrower, assign and pledge all or any portion of the Advances
owing to it to a Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the
Federal Reserve Board and any Operating Circular issued by such
Federal Reserve Bank.
SECTION 8.08. Governing Law. This Agreement and the
Notes shall be governed by, and construed in accordance with, the
laws of the State of New York.
SECTION 8.09. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
SECTION 8.10. Collateral. Each of the Lenders
represents to the Agent and each of the other Lenders that it in
good faith is not relying upon any Margin Stock as collateral in
the extension or maintenance of the credit provided for in this
Agreement.
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<PAGE>
SECTION 8.11. Survival of Warranties and Agreements.
All representations and warranties made herein and all
obligations of the Borrower in respect of taxes, indemnification
and expense reimbursements shall survive the execution and
delivery of this Agreement and the other Loan Documents, the
making and repayment of the Advances and the termination of this
Agreement and shall not be limited in any way by the passage of
time or occurrence of any event and shall expressly cover time
periods when the Agent or any of the Lenders may have come into
possession or control of any of the Borrower's or its
Subsidiaries' Property.
SECTION 8.12. Limitation of Liability. No claim may
be made by the Borrower, any Lender, the Agent or any other
Person against the Agent or any other Lender or the Affiliates,
directors, officers, employees, attorneys or agents of any of
them for any special, consequential or punitive damages in
respect of any claim for breach of contract or any other theory
of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each of the Borrower, each
Lender and the Agent hereby waives, releases and agrees not to
sue upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its
favor.
SECTION 8.13. Confidentiality. Each Lender agrees
that during the period through and including the Termination Date
it will take normal and reasonable precautions to hold and treat
in confidence any information delivered or made available by the
Borrower to it which is expressly designated in writing to be
confidential; provided, however that nothing herein shall prevent
any Lender from disclosing such information (i) to any Affiliate
of such Lender, (ii) to any other Lender, (iii) upon the order of
any court or administrative agency, (iv) upon the request or
demand of any regulatory agency or authority having jurisdiction
over such Lender, (v) which has been publicly disclosed, (vi) to
the extent reasonably required in connection with any litigation
to which the Agent, any Lender or their respective Affiliates may
be a party, (vii) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (viii) to such
Lender's legal counsel, independent auditors and other
professional advisors, (ix) to any actual or proposed
participant, assignee or other transferee of all or part of its
rights hereunder which has agreed in writing to be bound by the
provisions of this Section 8.13, or (x) that is also provided to
such Lender by a Person other than the Borrower not in violation,
to the actual knowledge of such Lender, of any duty of
confidentiality; provided that any Lender's failure to comply
with the provisions of this Section 8.13 shall not affect the
obligations of the Borrower hereunder.
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SECTION 8.14. Certain Consents and Waivers of the
Borrower.
(a) Personal Jurisdiction. (i) THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY
COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH
COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED
WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT,
WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. THE BORROWER WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
(ii) THE BORROWER AGREES THAT THE AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE THE AGENT AND THE LENDERS TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR
ANY LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY LENDER MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
BORROWER'S NOTICE ADDRESS SPECIFIED PURSUANT TO
SECTION 8.02, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS
AFTER SUCH MAILING. THE BORROWER IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS)
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO
BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
SECTION 8.15. Waiver of Jury Trial. EACH OF THE
BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OF
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THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
M.A. HANNA COMPANY
By /s/ Douglas R. Schrank
Title: Vice President
CITIBANK, N.A.,
as Agent
By /s/ Mary Corkran
Vice President
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Banks
Commitment
$25,000,000 CITIBANK, N.A.
By /s/ Mary Corkran
Vice President
$25,000,000 COMERICA BANK
By /s/ Ian Hogan
Title: Vice President
$25,000,000 NBD BANK, N.A.
By /s/ Winfred S. Pinet
Title: Vice President
$25,000,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Chris D. Thornton
Title: Assistant Vice President
$25,000,000 SOCIETY NATIONAL BANK
By /s/ Marianne Neil
Title: Assistant Vice President
$17,000,000 NATIONAL CITY BANK
By /s/ Robert E. Little
Title: Vice President/Senior
Lending Officer
<PAGE>
$17,000,000 THE NORTHERN TRUST COMPANY
By /s/ Robert Jones
Title: Vice President
$16,000,000 COMMERZBANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH
By /s/ Mark D. Monson
Title: Assistant Vice President
$12,500,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ David B. Straut
Title: Vice President
$12,500,000 CONTINENTAL BANK N.A.
By /s/ Carl W. Jordan
Title: Vice President
$200,000,000 Total of the Commitments
-62-
EXHIBIT A-1
FORM OF REVOLVING NOTE
U.S.$ Dated: June , 1994
FOR VALUE RECEIVED, the undersigned,
M.A. Hanna Company, a Delaware corporation (the "Borrower"),
HEREBY PROMISES TO PAY to the order of (the
"Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below) the principal
amount of each Revolving Advance (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement (as
defined below) on the last day of the Interest Period (as defined
in the Credit Agreement) for such Advance.
The Borrower promises to pay interest on the unpaid
principal amount of each Revolving Advance from the date of such
Revolving Advance until such principal amount is paid in full, at
such interest rates, and payable at such times, as are specified
in the Credit Agreement.
Both principal and interest are payable in lawful money
of the United States of America to Citibank, N.A., as Agent, at
399 Park Avenue, New York, New York 10043, in same day funds.
Each Revolving Advance made by the Lender to the Borrower
pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached
hereto which is part of this Promissory Note.
This Promissory Note is one of the Revolving Notes
referred to in, and is entitled to the benefits of, the Credit
Agreement dated as of June 30, 1994 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement")
among the Borrower, the Lender and certain other banks parties
thereto, and Citibank, N.A., as Agent for the Lender and such
other banks. The Credit Agreement, among other things, (i)
provides for the making of advances (the "Revolving Advances") by
the Lenders to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar
amount first above mentioned, the indebtedness of the Borrower
resulting from each such Revolving Advance being evidenced by
this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions
therein specified.
The Borrower hereby waives presentment, demand, protest
and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
<PAGE>
This Promissory Note shall be governed by, and
construed in accordance with, the laws of the State of New York,
United States.
M.A. HANNA COMPANY
By
Title:
2
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid of
Date Amount of Principal Paid Principal Notation
Advance or Prepaid Balance Made By
3
<PAGE>
EXHIBIT A-2
FORM OF COMPETITIVE BID NOTE
U.S.$ Dated: __, 19
FOR VALUE RECEIVED, the undersigned, M.A. Hanna
Company, a Delaware corporation (the "Borrower"), HEREBY PROMISES
TO PAY to the order of ____________ (the "Lender") for the
account of its Applicable Lending Office (as defined in the
Credit Agreement referred to below), on , 19 , the
principal amount of Dollars ($ ).
The Borrower promises to pay interest on the unpaid
principal amount hereof from the date hereof until such principal
amount is paid in full, at the interest rate and payable on the
interest payment date or dates provided below:
Interest Rate: % per annum (calculated on the basis of a
year of days for the actual number of days elapsed).
Interest Payment Date or Dates:
Both principal and interest are payable in lawful money
of the United States of America to Citibank, N.A. for the account
of the Lender at the office of Citibank, N.A., at 399 Park
Avenue, New York, New York 10043, in same day funds.
This Promissory Note is one of the Competitive Bid
Notes referred to in, and is entitled to the benefits of, the
Credit Agreement dated as of June 30, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among the Borrower, the Lender and certain other
banks parties thereto, and Citibank, N.A., as Agent for the
Lender and such other banks. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest
and notice of any kind. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
<PAGE>
This Promissory Note shall be governed by, and
construed in accordance with, the laws of the State of New York,
United States.
M.A. HANNA COMPANY
By
Title:
2
<PAGE>
EXHIBIT B-1
NOTICE OF REVOLVING BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention:
Gentlemen:
The undersigned, M.A. Hanna Company, refers to the
Credit Agreement, dated as of June 30, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby
gives you notice, irrevocably, pursuant to Section 2.03 of the
Credit Agreement that the undersigned hereby requests a Revolving
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Revolving Borrowing
(the "Proposed Revolving Borrowing") as required by Section
2.03(a) of the Credit Agreement (the terms defined in the Credit
Agreement are used herein as therein defined):
(i) The Business Day of the Proposed Revolving
Borrowing is , 19 .
(ii) The Type of Revolving Advances comprising the
Proposed Revolving Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving
Borrowing is $ .
(iv) The Interest Period for each Revolving Advance
made as part of the Proposed Revolving Borrowing is [
days] [ month[s]].
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Revolving Borrowing:
(A) the representations and warranties contained in
Section 4.01 (excluding those contained in subsections (f),
(g) and (k) of such section 4.01) are correct, before and
after giving effect to the Proposed Revolving Borrowing and
<PAGE>
to the application of the proceeds therefrom, as though made
on and as of such date; and
(B) no Default has occurred and is continuing, or
would result from such Proposed Revolving Borrowing or from
the application of the proceeds therefrom.
Very truly yours,
M.A. HANNA COMPANY
By
Title:
2
<PAGE>
EXHIBIT B-2
NOTICE OF COMPETITIVE BID BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention:
Gentlemen:
The undersigned, M.A. Hanna Company, refers to the
Credit Agreement, dated as of June 30, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby
gives you notice pursuant to Section 2.04 of the Credit Agreement
that the undersigned hereby requests a Competitive Bid Borrowing
under the Credit Agreement, and in that connection sets forth the
terms on which such Competitive Bid Borrowing (the "Proposed
Competitive Bid Borrowing") is requested to be made:
(A) Date of Competitive Bid Borrowing
(B) Amount of Competitive Bid Borrowing
(C) Maturity Date
(D) Interest Rate Basis
(E) Interest Payment Date(s)
(F)
(G)
(H)
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Competitive Bid Borrowing:
(a) the representations and warranties contained in
Section 4.01 (excluding those contained in subsections (f),
(g) and (k) of such Section 4.01) are correct, before and
after giving effect to the Proposed Competitive Bid
Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date;
(b) no Default has occurred and is continuing, or
would result from the Proposed Competitive Bid Borrowing or
from the application of the proceeds therefrom;
<PAGE>
(c) no event has occurred and no circumstance exists
as a result of which the information concerning the
undersigned that has been provided to the Agent and each
Lender by the undersigned in connection with the Credit
Agreement would include an untrue statement of a material
fact or omit to state any material fact or any fact
necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not
misleading; and
(d) the aggregate amount of the Proposed Competitive
Bid Borrowing and all other Borrowings to be made on the
same day under the Credit Agreement is within the aggregate
amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed
Competitive Bid Borrowing is to be made available to it in
accordance with Section 2.04(a)(v) of the Credit Agreement.
Very truly yours,
M.A. HANNA COMPANY
By:
2
<PAGE>
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated , 19
Reference is made to the Credit Agreement dated as of
June 30, 1994 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement") among M.A. Hanna
Company, a Delaware corporation (the "Borrower"), the Lenders (as
defined in the Credit Agreement) and Citibank, N.A., as Agent for
the Lenders (the "Agent"). Terms defined in the Credit Agreement
are used herein with the same meaning.
(the "Assignor") and (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the
Assignor, a ____1% interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances owing
to the Assignor or any Competitive Bid Notes held by it),
including, without limitation, (x) such percentage interest in
the Assignor's Commitment, which (after giving effect to any
other assignments thereof made prior to the date hereof, whether
or not such assignments have become effective, but without giving
effect to any other assignments thereof also made on the date
hereof) is $________, (y) the aggregate principal outstanding
principal amount of Revolving Advances owing to the Assignor,
which (after giving effect to any other assignments thereof made
prior to the date hereof, whether or not such assignments have
become effective, but without giving effect to any other
assignments thereof also made on the date hereof) is $________,
and (z) the Revolving Note held by the Assignor.
2. The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any
adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any
of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and
1 Specify percentage to no more than four decimal points.
<PAGE>
(iv) attaches the Revolving Note referred to in paragraph 1 above
and requests that the Agent exchange such Revolving Note for [a
new Revolving Note dated __________ __, 19__ in the principal
amount of $_________ payable to the order of the Assignee] [new
Revolving Notes as follows: a Revolving Note dated ________ __,
19__ in the principal amount of $__________ payable to the order
of the Assignee and a Revolving Note dated _________ __, 19__
payable to the order of the Assignor].
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.01 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance and, if the Assignee is an insurance
company, represents and warrants that the assignment hereunder
shall not constitute or otherwise result in any prohibited
transaction under Section 406 of ERISA or Section 4975 of the
Internal Revenue Code; (ii) agrees that it will, independently
and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement
as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender; [and] (vi) specifies
as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name
on the signature pages hereof [and (vii) attaches the forms
prescribed by the Internal Revenue Service of the United States
certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the
Credit Agreement and the Notes or such other documents as are
necessary to indicate that all such payments are subject to such
rates at a rate reduced by an applicable tax treaty].2
4. Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, it will be delivered
to the Agent for acceptance and recording by the Agent. The
effective date of this Assignment and Acceptance shall be the
date of acceptance thereof by the Agent (the "Effective Date").
2 If the Assignee is organized under the laws of a jurisdiction
outside the United States.
2
<PAGE>
5. Upon such acceptance and recording by the Agent, as
of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent,
from and after the Effective Date, the Agent shall make all
payments under the Credit Agreement and the Revolving Notes in
respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment
fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Revolving Notes for periods prior to
the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of
New York.
8. This Assignment and Acceptance may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective
officers thereunto duly authorized, as of the date first above
written.
[NAME OF ASSIGNOR]
By:____________________
Title:
[NAME OF ASSIGNEE]
By:____________________
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
3
<PAGE>
Consented to3 this ___ day
of _____________, 19__
M.A. HANNA COMPANY
By:______________________
Title:
Consented to4 [and] [a]ccepted this ___ day
of _____________, 19__
CITIBANK, N.A., as Agent
By:______________________
3 Pursuant to Section 8.07 of the Credit Agreement, the
Borrower's consent is not required for an assignment to an
Affiliate of the Assignor.
4 Pursuant to Section 8.07 of the Credit Agreement, the Agent's
consent is not required for an assignment to an Affiliate of the
Assignor.
4
<PAGE>
EXHIBIT D
DESIGNATION AGREEMENT
Dated , 19
Reference is made to the Credit Agreement dated as of
June 30, 1994 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement") among M.A. Hanna
Company, a Delaware corporation (the "Borrower"), the Lenders (as
defined in the Credit Agreement) and Citibank, N.A., as Agent for
the Lenders (the "Agent"). Terms defined in the Credit Agreement
are used herein with the same meaning.
(the "Designator") and
(the "Designee") agree as follows:
1. The Designator hereby designates the Designee, and
the Designee hereby accepts such designation, to have a right to
make Competitive Bid Advances pursuant to Section 2.04 of the
Credit Agreement.
2. The Designator makes no representation or warranty
and assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto and (ii) the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.01 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Designation Agreement and, if the Designee is an insurance
company, represents and warrants that the designation hereunder
shall not constitute or otherwise result in any prohibited
transaction under Section 406 of ERISA or Section 4975 of the
Internal Revenue Code; (ii) agrees that it will, independently
and without reliance upon the Agent, the Designator or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is a Designated Bidder;
(iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto;
<PAGE>
(v) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender; and
(vi) specifies as its Applicable Lending Office with respect to
Competitive Bid Advances (and address for notices) the offices
set forth beneath its name on the signature pages hereof.
4. Following the execution of this Designation
Agreement by the Designator and its Designee, it will be
delivered to the Agent for acceptance and recording by the Agent.
The effective date of this Designation Agreement shall be the
date of acceptance thereof by the Agent (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as
of the Effective Date, the Designee shall be a party to the
Credit Agreement with a right to make Competitive Bid Advances as
a Lender pursuant to Section 2.04 of the Credit Agreement and the
rights and obligations of a Lender related thereto.
6. This Designation Agreement shall be governed by,
and construed in accordance with, the laws of the State of New
York.
7. This Designation Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Designation Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
[NAME OF DESIGNATOR]
By:
Title:
[NAME OF DESIGNEE]
By:
Title:
Applicable Lending Office (and
address for notices):
[Address]
2
<PAGE>
Accepted this day
of , 19
CITIBANK, N.A., as Agent
By:______________________
Title:
3
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in the
Registration Statement (Form S-8) pertaining to the 401K
Savings and Retirement Plan for Polymer Associates, of our
report dated January 31, 1994, with respect to the
consolidated financial statements of M.A. Hanna Company and
subsidiaries incorporated by reference in its Annual Report
(From 10-K, as amended) for the year ended December 31, 1993
and the related financial statement schedules included
therein, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Cleveland, Ohio
December 21, 1994
EXHIBIT 24
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ B. Charles Ames
B. Charles Ames
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ Wayne R. Embry
Wayne R. Embry
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ J. Trevor Eyton
J. Trevor Eyton
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ George D. Kirkham
George D. Kirkham
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ Marvin L. Mann
Marvin L. Mann
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ Douglas J. McGregor
Douglas J. McGregor
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ Richrd W. Pogue
Richard W. Pogue
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ Martin D. Walker
Martin D. Walker
401K Savings and Retirment Plan for Polymer Associates
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that M. A. Hanna
Company, a Delaware corporation (the "Company"), which
anticipates filing with the Securities and Exchange
Commission, Washington, D.C. ("SEC"), under the Securities
Act of 1933, as amended ("Act"), a registration statement or
registration statements on Form S-8 or such other form as the
officers of the Company may determine to be appropriate with
respect to shares of Common Stock, par value $1.00 per share,
of the Company which may be issued in connection with the
401K Savings and Retirement Plan for Polymer Associates and
each of the undersigned officers and directors of the Company
hereby constitutes and appoints John S. Pyke, Jr., Valerie A.
Gentile and Lyle G. Ganske, and each of them (with full power
of substitution and resubstitution) his or her true and
lawful attorney-in-fact and agent for each of such persons
and on his or her behalf and in his or her name, place and
stead, in any and all capacities, to sign, execute and file
with the SEC such registration statement(s) aforesaid under
the Act, including any amendments relating thereto with all
exhibits, and any and all documents required to be filed with
any federal or state regulatory authority including any state
securities regulatory board or commission, pertaining to the
securities subject to such registration, granting unto said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as
each of them might or could do if personally present, hereby
ratifying and confirming all that said attorney-in-fact and
agents, or any of them, or any of their substitutes, may do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
or her hand as of the 7th day of December, 1994
/s/ Carol A. Cartwright
Carol A. Cartwright
EXHIBIT 99
401(k) SAVINGS AND RETIREMENT PLAN
FOR POLYMER ASSOCIATES
Plan and Trust Agreement
Effective January 1, 1995
401(k) Savings and Retirement Plan for Polymer Associates and
Trust
Effective January 1, 1995
M.A. Hanna Company hereby establishes the 401(k) Savings and
Retirement Plan for Polymer Associates for the benefit of
eligible associates of the Company and its participating
affiliates. The Plan is intended to constitute a qualified
profit sharing plan, as described in Code section 401(a), which
includes a qualified cash or deferred arrangement, as described
in Code section 401(k).
The provisions of this Plan and Trust relating to the Trustee
constitute the trust agreement which is entered into by and
between M.A. Hanna Company and Wells Fargo Bank, National
Association. The Trust is intended to be tax exempt as described
under Code section 501(a).
The 401(k) Savings and Retirement Plan for Polymer Associates and
Trust, as set forth in this document, is hereby effective as of
January 1, 1995.
Date: December 21, 1994 M.A. Hanna Company
By: /s/ John S. Pyke, Jr.
Title: Vice President, General Counsel
and Secretary
The trust agreement set forth in those provisions of this Plan
and Trust which relate to the Trustee is hereby executed.
Date: December 20, 1994 Wells Fargo Bank, National Association
By: /s/ Dolores Upton
Title: Vice President
Date: December 20, 1994 Wells Fargo Bank, National Association
By: /s/ Gwyn E. Slack
Title: Vice President
TABLE OF CONTENTS
1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
2 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . 8
2.1 Eligibility . . . . . . . . . . . . . . . . . . . 8
2.2 Ineligible Associates . . . . . . . . . . . . . . 8
2.3 Ineligible or Former Participants . . . . . . . . 8
3 PARTICIPANT CONTRIBUTIONS . . . . . . . . . . . . . . . 9
3.1 Associate Pre-Tax Contribution Election . . . . . 9
3.2 Changing a Contribution Election . . . . . . . . . 9
3.3 Revoking and Resuming a Contribution Election . . 9
3.4 Contribution Percentage Limits . . . . . . . . . . 9
3.5 Refunds When Contribution Dollar Limit Exceeded . 10
3.6 Timing, Posting and Tax Considerations . . . . . . 10
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS . . . . . . . . . . 11
4.1 Rollovers . . . . . . . . . . . . . . . . . . . . 11
4.2 Transfers From Other Qualified Plans . . . . . . . 11
5 EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . 12
5.1 Company Matching Contributions . . . . . . . . . . 12
5.2 Retirement Contributions . . . . . . . . . . . . . 12
5.3 Supplemental Retirement Contributions . . . . . . 13
6 ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Individual Participant Accounting . . . . . . . . 14
6.2 Sweep Account is Transaction Account . . . . . . . 14
6.3 Trade Date Accounting and Investment Cycle . . . . 14
6.4 Accounting for Investment Funds . . . . . . . . . 14
6.5 Payment of Fees and Expenses . . . . . . . . . . . 14
6.6 Accounting for Participant Loans . . . . . . . . . 15
6.7 Error Correction . . . . . . . . . . . . . . . . . 15
6.8 Participant Statements . . . . . . . . . . . . . . 16
6.9 Special Accounting During Conversion Period . . . 16
6.10 Accounts for QDRO Beneficiaries . . . . . . . . . 16
7 INVESTMENT FUNDS AND ELECTIONS . . . . . . . . . . . . . 17
7.1 Investment Funds . . . . . . . . . . . . . . . . . 17
7.2 Investment Fund Elections . . . . . . . . . . . . 17
7.3 Responsibility for Investment Choice . . . . . . . 17
7.4 Default if No Election . . . . . . . . . . . . . . 18
7.5 Timing . . . . . . . . . . . . . . . . . . . . . . 18
7.6 Investment Fund Election Change Fees . . . . . . . 18
8 VESTING & FORFEITURES . . . . . . . . . . . . . . . . . 19
8.1 Fully Vested Contribution Accounts . . . . . . . . 19
8.2 Full Vesting upon Certain Events . . . . . . . . . 19
8.3 Vesting Schedule . . . . . . . . . . . . . . . . . 19
8.4 Forfeitures . . . . . . . . . . . . . . . . . . . 19
8.5 Rehired Associates . . . . . . . . . . . . . . . . 20
9 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . 21
9.1 Participant Loans Permitted . . . . . . . . . . . 21
9.2 Loan Application, Note and Security . . . . . . . 21
9.3 Spousal Consent . . . . . . . . . . . . . . . . . 21
9.4 Loan Approval . . . . . . . . . . . . . . . . . . 21
9.5 Loan Funding Limits . . . . . . . . . . . . . . . 21
9.6 Maximum Number of Loans . . . . . . . . . . . . . 22
9.7 Source and Timing of Loan Funding . . . . . . . . 22
9.8 Interest Rate . . . . . . . . . . . . . . . . . . 22
9.9 Repayment . . . . . . . . . . . . . . . . . . . . 22
9.10 Repayment Hierarchy . . . . . . . . . . . . . . . 23
9.11 Repayment Suspension . . . . . . . . . . . . . . . 23
9.12 Loan Default . . . . . . . . . . . . . . . . . . . 23
9.13 Call Feature . . . . . . . . . . . . . . . . . . . 23
10 IN-SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . 24
10.1 In-Service Withdrawals Permitted . . . . . . . . . 24
10.2 In-Service Withdrawal Application and Notice . . . 24
10.3 Spousal Consent . . . . . . . . . . . . . . . . . 24
10.4 In-Service Withdrawal Approval . . . . . . . . . . 24
10.5 Minimum Amount, Payment Form and Medium . . . . . 24
10.6 Source and Timing of In-Service Withdrawal
Funding . . . . . . . . . . . . . . . . . . . . . 25
10.7 Hardship Withdrawals . . . . . . . . . . . . . . . 25
10.8 Rollover Account Withdrawals . . . . . . . . . . . 26
10.9 Over Age 59 1/2 Withdrawals . . . . . . . . . . . 27
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY
LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.1 Benefit Information, Notices and Election . . . . 28
11.2 Spousal Consent . . . . . . . . . . . . . . . . . 28
11.3 Payment Form and Medium . . . . . . . . . . . . . 28
11.4 Distribution of Small Amounts . . . . . . . . . . 29
11.5 Source and Timing of Distribution Funding . . . . 29
11.6 Deemed Distribution . . . . . . . . . . . . . . . 29
11.7 Latest Commencement Permitted . . . . . . . . . . 29
11.8 Payment Within Life Expectancy . . . . . . . . . . 30
11.9 Incidental Benefit Rule . . . . . . . . . . . . . 30
11.10 Payment to Beneficiary . . . . . . . . . . . . . 30
11.11 Beneficiary Designation . . . . . . . . . . . . . 31
12 ADP AND ACP TESTS . . . . . . . . . . . . . . . . . . . 32
12.1 Contribution Limitation Definitions . . . . . . . 32
12.2 ADP and ACP Tests . . . . . . . . . . . . . . . . 35
12.3 Correction of ADP and ACP Tests . . . . . . . . . 35
12.4 Multiple Use Test . . . . . . . . . . . . . . . . 36
12.5 Correction of Multiple Use Test . . . . . . . . . 36
12.6 Adjustment for Investment Gain or Loss . . . . . . 36
12.7 Testing Responsibilities and Required Records . . 37
12.8 Separate Testing . . . . . . . . . . . . . . . . . 37
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS . . . . . . 38
13.1 "Annual Addition" Defined . . . . . . . . . . . . 38
13.2 Maximum Annual Addition . . . . . . . . . . . . . 38
13.3 Avoiding an Excess Annual Addition . . . . . . . . 38
13.4 Correcting an Excess Annual Addition . . . . . . . 38
13.5 Correcting a Multiple Plan Excess . . . . . . . . 39
13.6 "Defined Benefit Fraction" Defined . . . . . . . . 39
13.7 "Defined Contribution Fraction" Defined . . . . . 39
13.8 Combined Plan Limits and Correction . . . . . . . 39
14 TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . 40
14.1 Top Heavy Definitions . . . . . . . . . . . . . . 40
14.2 Special Contributions . . . . . . . . . . . . . . 41
14.3 Adjustment to Combined Limits for Different Plans 42
15 PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . 43
15.1 Plan Delineates Authority and Responsibility . . . 43
15.2 Fiduciary Standards . . . . . . . . . . . . . . . 43
15.3 Company is ERISA Plan Administrator . . . . . . . 43
15.4 Administrator Duties . . . . . . . . . . . . . . . 44
15.5 Advisors May be Retained . . . . . . . . . . . . . 44
15.6 Delegation of Administrator Duties . . . . . . . . 45
15.7 Committee Operating Rules . . . . . . . . . . . . 45
16 MANAGEMENT OF INVESTMENTS . . . . . . . . . . . . . . . 46
16.1 Trust Agreement . . . . . . . . . . . . . . . . . 46
16.2 Investment Funds . . . . . . . . . . . . . . . . . 46
16.3 Authority to Hold Cash . . . . . . . . . . . . . . 47
16.4 Trustee to Act Upon Instructions . . . . . . . . . 47
16.5 Administrator Has Right to
Vote Registered Investment Company Shares . . . . 47
16.6 Custom Fund Investment Management . . . . . . . . 47
16.7 Authority to Segregate Assets . . . . . . . . . . 48
16.8 Maximum Permitted Investment in Company Stock . . 48
16.9 Participants Have Right to Vote and Tender
Company Stock . . . . . . . . . . . . . . . . . . 48
16.10 Registration and Disclosure for Company
Stock . . . . . . . . . . . . . . . . . . . . . . 49
16.11 Master Company Stock Fund . . . . . . . . . . . . 49
17 TRUST ADMINISTRATION . . . . . . . . . . . . . . . . . . 50
17.1 Trustee to Construe Trust . . . . . . . . . . . . 50
17.2 Trustee To Act As Owner of Trust Assets . . . . . 50
17.3 United States Indicia of Ownership . . . . . . . . 50
17.4 Tax Withholding and Payment . . . . . . . . . . . 51
17.5 Trustee Duties and Limitations . . . . . . . . . . 51
17.6 Trust Accounting . . . . . . . . . . . . . . . . . 51
17.7 Valuation of Certain Assets . . . . . . . . . . . 52
17.8 Legal Counsel . . . . . . . . . . . . . . . . . . 52
17.9 Fees and Expenses . . . . . . . . . . . . . . . . 52
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION . . . 53
18.1 Plan Does Not Affect Employment Rights . . . . . . 53
18.2 Limited Return of Contributions . . . . . . . . . 53
18.3 Assignment and Alienation . . . . . . . . . . . . 53
18.4 Facility of Payment . . . . . . . . . . . . . . . 54
18.5 Reallocation of Lost Participant's Accounts . . . 54
18.6 Claims Procedure . . . . . . . . . . . . . . . . . 54
18.7 Construction . . . . . . . . . . . . . . . . . . . 55
18.8 Jurisdiction and Severability . . . . . . . . . . 55
18.9 Indemnification by Employer . . . . . . . . . . . 55
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION . . . . 57
19.1 Amendment . . . . . . . . . . . . . . . . . . . . 57
19.2 Merger . . . . . . . . . . . . . . . . . . . . . . 57
19.3 Divestitures . . . . . . . . . . . . . . . . . . . 57
19.4 Plan Termination . . . . . . . . . . . . . . . . . 58
19.5 Amendment and Termination Procedures . . . . . . . 58
19.6 Termination of Employer's Participation . . . . . 59
19.7 Replacement of the Trustee . . . . . . . . . . . . 59
19.8 Final Settlement and Accounting of Trustee . . . . 59
APPENDIX A - INVESTMENT FUNDS . . . . . . . . . . . . . . . . 61
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES . . . . . . . 62
APPENDIX C - LOAN INTEREST RATE . . . . . . . . . . . . . . . 63
1 DEFINITIONS
When capitalized, the words and phrases below have the
following meanings unless different meanings are clearly
required by the context:
1.1 "Account". The records maintained for purposes of
accounting for a Participant's interest in the Plan.
"Account" may refer to one or all of the following
accounts which have been created on behalf of a
Participant to hold specific types of Contributions
under the Plan:
(a) "Associate Pre-Tax Account". An account created
to hold Associate Pre-Tax Contributions.
(b) "Rollover Account". An account created to hold
Rollover Contributions.
(c) "Company Matching Account". An account created
to hold Company Matching Contributions.
(d) "Retirement Account". An account created to hold
Retirement Contributions.
(e) "Supplemental Retirement Account". An account
created to hold Supplemental Retirement
Contributions.
1.2 "ACP" or "Average Contribution Percentage". The
percentage calculated in accordance with Section 12.1.
1.3 "Administrator". The Company, which may delegate all
or a portion of the duties of the Administrator under
the Plan to a Committee in accordance with Section
15.6.
1.4 "ADP" or "Average Deferral Percentage". The
percentage calculated in accordance with Section 12.1.
1.5 "Associate". An individual who is:
(a) directly employed by any Related Company and for
whom any income for such employment is subject to
withholding of income or social security taxes,
or
(b) a Leased Associate.
1.6 "Beneficiary". The person or persons who is to
receive benefits after the death of the Participant
pursuant to the "Beneficiary Designation" paragraph in
Section 11, or as a result of a QDRO.
1.7 "Break in Service". The fifth anniversary (or sixth
anniversary if absence from employment was due to a
Parental Leave) of the date on which a Participant's
employment ends.
1.8 "Code". The Internal Revenue Code of 1986, as
amended. Reference to any specific Code section shall
include such section, any valid regulation promulgated
thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding
such section.
1.9 "Committee". If applicable, the committee which has
been appointed by the Company to administer the Plan
in accordance with Section 15.6.
1.10 "Company". M.A. Hanna Company or any successor by
merger, purchase or otherwise.
1.11 "Company Stock". Shares of common stock of the
Company, its predecessor(s), or its successors or
assigns, or any corporation with or into which said
corporation may be merged, consolidated or
reorganized, or to which a majority of its assets may
be sold.
1.12 "Compensation". The sum of a Participant's Taxable
Income and salary reductions, if any, pursuant to Code
sections 125, 402(e)(3), 402(h), 403(b), 414(h)(2) or
457.
For purposes of determining benefits under this Plan,
Compensation is limited to $150,000 (as indexed for
the cost of living pursuant to Code sections
401(a)(17) and 415(d)) per Plan Year. For purposes of
the preceding sentence, in the case of an HCE who is a
5% Owner or one of the 10 most highly compensated
Employees, (i) such HCE and such HCE's family group
(as defined below) shall be treated as a single
associate and the Compensation of each family group
member shall be aggregated with the Compensation of
such HCE, and (ii) the limitation on Compensation
shall be allocated among such HCE and his or her
family group members in proportion to each
individual's Compensation before the application of
this sentence. For purposes of this Section, the term
"family group" shall mean an Associate's spouse and
lineal descendants who have not attained age 19 before
the close of the year in question.
For the purpose of determining HCEs and key employees,
Compensation for the entire Plan Year shall be used.
For the purpose of determining ADP and ACP,
Compensation shall be limited to amounts paid to an
Eligible Associate while a Participant.
1.13 "Contribution". An amount contributed to the Plan by
the Employer or an Eligible Associate, and allocated
by contribution type to Participants' Accounts, as
described in Section 1.1. Specific types of
contribution include:
(a) "Associate Pre-Tax Contribution". An amount
contributed by the Employer on an eligible
Participant's behalf in conjunction with a
Participant's Code section 401(k) salary deferral
election.
(b) "Rollover Contribution". An amount contributed
by an Eligible Associate which originated from
another employer's qualified plan or an
Employer's qualified plan.
(c) "Company Matching Contribution". An amount
contributed by the Employer on an eligible
Participant's behalf based upon the amount
contributed by the eligible Participant.
(d) "Retirement Contribution". An amount contributed
by the Employer on an eligible Participant's
behalf and allocated on a pay based formula to
the Participant.
(e) "Supplemental Retirement Contribution". An
amount contributed by the Employer on an eligible
Participant's behalf and allocated on a pay based
formula to the Participant.
1.14 "Contribution Dollar Limit". The annual limit placed
on each Participant's Associate Pre-Tax Contributions,
which shall be $7,000 per calendar year (as indexed
for the cost of living pursuant to Code sections
402(g)(5) and 415(d)). For purposes of this Section,
a Participant's Associate Pre-Tax Contributions shall
include (i) any employer contribution made under any
qualified cash or deferred arrangement as defined in
Code section 401(k) to the extent not includible in
gross income for the taxable year under Code section
402(e)(3) or 402(h)(1)(B) (determined without regard
to Code section 402(g)), and (ii) any employer
contribution to purchase an annuity contract under
Code section 403(b) under a salary reduction agreement
(within the meaning of Code section 3121(a)(5)(D)).
1.15 "Conversion Period". The period of converting the
prior accounting system of the Plan and Trust, if such
Plan and Trust were in existence prior to the
Effective Date, or the prior accounting system of any
plan and trust which is merged into this Plan and
Trust subsequent to the Effective Date, to the
accounting system described in Section 6.
1.16 "Direct Rollover". A payment from the Plan to an
Eligible Retirement Plan specified by a Distributee.
1.17 "Disability". A Participant's total and permanent,
mental or physical disability resulting in termination
of employment as evidenced by presentation of medical
evidence satisfactory to the Administrator.
1.18 "Distributee". An Associate or former Associate, the
surviving spouse of an Associate or former Associate
and a spouse or former spouse of an Associate or
under a QDRO.
1.19 "Effective Date". January 1, 1995, unless stated
otherwise. The date upon which the provisions of this
document become effective. In general, the provisions
of this document only apply to Participants who are
Associates on or after the Effective Date. However,
investment and distribution provisions apply to all
Participants with Account balances to be invested or
distributed after the Effective Date.
1.20 "Eligible Associate". A production Associate of an
Employer at Colonial Rubber Works, Inc., a division of
the Company, and an Associate of an Employer at PDC-
Texas, except any Associate whose compensation and
conditions of employment are covered by a collective
bargaining agreement to which an Employer is a party
unless the agreement calls for the Associate's
participation in the Plan.
1.21 "Eligible Retirement Plan". An individual retirement
account described in Code section 408(a), an
individual retirement annuity described in Code
section 408(b), an annuity plan described in Code
section 403(a), or a qualified trust described in Code
section 401(a), that accepts a Distributee's Eligible
Rollover Distribution, except that with regard to an
Eligible Rollover Distribution to a surviving spouse,
an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
1.22 "Eligible Rollover Distribution". A distribution of
all or any portion of the balance to the credit of a
Distributee, excluding a 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 a Distributee or the joint lives
(or joint life expectancies) of a Distributee and the
Distributee's designated Beneficiary, or for a
specified period of ten years or more; a distribution
to the extent such distribution is required under Code
section 401(a)(9); and the portion of a distribution
that is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to Employer securities).
1.23 "Employer". The Company and any Subsidiary or other
Related Company of either the Company or a Subsidiary
which adopts this Plan with the approval of the
Company.
1.24 "ERISA". The Employee Retirement Income Security Act
of 1974, as amended. Reference to any specific
section shall include such section, any valid
regulation promulgated thereunder, and any comparable
provision of any future legislation amending,
supplementing or superseding such section.
1.25 "Forfeiture Account". An account holding amounts
forfeited by Participants who have left the Employer,
invested in interest bearing deposits of the Trustee,
pending disposition as provided in this Plan and Trust
and as directed by the Administrator.
1.26 "HCE" or "Highly Compensated Employee". An Associate
described as a Highly Compensated Employee in Section
12.
1.27 "Ineligible". The Plan status of an individual during
the period in which he or she is (1) an Associate of a
Related Company which is not then an Employer, (2) an
Associate, but not an Eligible Associate, or (3) not
an Associate.
1.28 "Investment Fund" or "Fund". An investment fund as
described in Section 16.2. The Investment Funds
authorized by the Administrator to be offered as of
the Effective Date to Participants and Beneficiaries
are as set forth in Appendix A.
1.29 "Leased Associate". An individual who is deemed to be
an associate of any Related Company as provided in
Code section 414(n) or (o).
1.30 "Leave of Absence". A period during which an
individual is deemed to be an Associate, but is absent
from active employment, provided that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States
armed forces and the individual returns to active
employment within the period during which he or
she retains employment rights under federal law.
1.31 "NHCE" or "Non-Highly Compensated Employee". An
Associate described as a Non-Highly Compensated
Employee in Section 12.
1.32 "Normal Retirement Date". The date of a Participant's
55th birthday.
1.33 "Owner". A person with an ownership interest in the
capital, profits, outstanding stock or voting power of
a Related Company within the meaning of Code section
318 or 416 (which exclude indirect ownership through a
qualified plan).
1.34 "Parental Leave". The period of absence from work by
reason of pregnancy, the birth of an Associate's
child, the placement of a child with the Associate in
connection with the child's adoption, or caring for
such child immediately after birth or placement as
described in Code section 410(a)(5)(E).
1.35 "Participant". An Eligible Associate who begins to
participate in the Plan after completing the
eligibility requirements as described in Section 2.1.
An Eligible Associate who makes a Rollover
Contribution prior to completing the eligibility
requirements as described in Section 2.1 shall also be
considered a Participant except for purposes of
provisions related to Contributions (other than a
Rollover Contribution). A Participant's participation
continues until his or her employment with all Related
Companies ends and his or her Account is distributed
or forfeited.
1.36 "Pay". All cash compensation paid to an Eligible
Associate by an Employer while a Participant during
the current period. Pay excludes reimbursements or
other expense allowances, cash and non-cash fringe
benefits, moving expenses, deferred compensation and
welfare benefits.
Pay is neither increased nor decreased by any salary
credit or reduction pursuant to Code sections 125 or
402(e)(3). Pay is limited to $150,000 (as indexed for
the cost of living pursuant to Code sections
401(a)(17) and 415(d)) per Plan Year.
For purposes of the Contributions described in Section
5.2, the limitations as described in the second
paragraph of Section 1.11 shall also apply.
1.37 "Period of Employment". The period beginning on the
date an Associate first performs an hour of service
and ending on the date his or her employment ends.
Employment ends on the date the Associate quits,
retires, is discharged, dies or (if earlier) the first
anniversary of his or her absence for any other
reason. The period of absence starting with the date
an Associate's employment temporarily ends and ending
on the date he or she is subsequently reemployed is
(1) included in his or her Period of Employment if the
period of absence does not exceed one year, and (2)
excluded if such period exceeds one year.
Period of Employment includes the period prior to a
Break in Service.
An Associate's service with a predecessor or acquired
company shall only be counted in the determination of
his or her Period of Employment for eligibility and/or
vesting purposes if (1) the Company directs that
credit for such service be granted, or (2) a qualified
plan of the predecessor or acquired company is
subsequently maintained by any Employer or Related
Company.
1.38 "Plan". The 401(k) Savings and Retirement Plan for
Polymer Associates set forth in this document, as from
time to time amended.
1.39 "Plan Administrator". If applicable, the third party
administrator which has been retained by the Company
or the Committee, on the Company's behalf, to
administer the Plan in accordance with Section 15.6.
1.40 "Plan Year". The annual accounting period of the Plan
and Trust which ends on each December 31.
1.41 "QDRO". A domestic relations order which the
Administrator has determined to be a qualified
domestic relations order within the meaning of Code
section 414(p).
1.42 "Reduction in Force". An Employer sponsored program
developed to reduce force on a permanent basis.
1.43 "Related Company". With respect to any Employer, that
Employer and any corporation, trade or business which
is, together with that Employer, a member of the same
controlled group of corporations, a trade or business
under common control, or an affiliated service group
within the meaning of Code section 414(b), (c), (m) or
(o).
1.44 "Settlement Date". For each Trade Date, the Trustee's
next business day.
1.45 "Spousal Consent". The written consent given by a
spouse to a Participant's election or waiver of a
specified form of benefit, including a loan or in-
service withdrawal, or Beneficiary designation. The
spouse's consent must acknowledge the effect on the
spouse of the Participant's election, waiver or
designation and be duly witnessed by a notary public.
Spousal Consent shall be valid only with respect to
the spouse who signs the Spousal Consent and only for
the particular choice made by the Participant which
requires Spousal Consent. A Participant may revoke
(without Spousal Consent) a prior election, waiver or
designation that required Spousal Consent at any time
before payments begin. Spousal Consent also means a
determination by the Administrator that there is no
spouse, the spouse cannot be located, or such other
circumstances as may be established by applicable law.
1.46 "Subsidiary". A company which is more than 50% owned,
directly or indirectly, by the Company.
1.47 "Sweep Account". The subsidiary Account for each
Participant through which all transactions are
processed, which is invested in interest bearing
deposits of the Trustee.
1.48 "Sweep Date". The cut off date and time for receiving
instructions for transactions to be processed on the
next Trade Date.
1.49 "Taxable Income". Compensation in the amount reported
by the Employer as "Wages, tips, other compensation"
on Form W-2, or any successor method of reporting
under Code section 6041(d).
1.50 "Trade Date". Each day the Investment Funds are
valued, which is normally every day the assets of such
Funds are traded.
1.51 "Trust". The legal entity created by those provisions
of this document which relate to the Trustee. The
Trust is part of the Plan and holds the Plan assets
which are comprised of the aggregate of Participants'
Accounts, any unallocated funds invested in deposit or
money market type assets pending allocation to
Participants' Accounts or disbursement to pay Plan
fees and expenses and the Forfeiture Account.
1.52 "Trustee". Wells Fargo Bank, National Association.
1.53 "Year of Vesting Service". A 12 month Period of
Employment.
Years of Vesting Service shall include service
credited prior to January 1, 1995.
2 ELIGIBILITY
2.1 Eligibility
Each Eligible Associate shall become a Participant on
January 1, 1995 or thereafter, on the first day of the
next month after the date he or she completes a 6-
month Period of Employment. The eligibility period
begins on the date an Associate's Period of Employment
commences.
2.2 Ineligible Associates
If an Associate completes the above eligibility
requirements, but is Ineligible at the time
participation would otherwise begin (if he or she were
not Ineligible), he or she shall become a Participant
on the first subsequent date on which he or she is an
Eligible Associate.
2.3 Ineligible or Former Participants
A Participant may not make or share in Plan
Contributions, nor generally be eligible for a new
Plan loan, during the period he or she is Ineligible,
but he or she shall continue to participate for all
other purposes. An Ineligible Participant or former
Participant shall automatically become an active
Participant on the date he or she again becomes an
Eligible Associate.
3 PARTICIPANT CONTRIBUTIONS
3.1 Associate Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Associate may
elect to reduce his or her Pay by an amount which does
not exceed the Contribution Dollar Limit, within the
limits described in the Contribution Percentage Limits
paragraph of this Section 3, and have such amount
contributed to the Plan by the Employer as an
Associate Pre-Tax Contribution. The election shall be
made as a whole percentage of Pay in such manner and
with such advance notice as prescribed by the
Administrator. In no event shall an Associate's
Associate Pre-Tax Contributions under the Plan and
comparable contributions to all other plans, contracts
or arrangements of all Related Companies exceed the
Contribution Dollar Limit for the Associate's taxable
year beginning in the Plan Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Associate may change
his or her Associate Pre-Tax Contribution election as
of any January 1, April 1, July 1 or October 1 in such
manner and with such advance notice as prescribed by
the Administrator, and such election shall be
effective with the first payroll paid after such date.
Participants' Contribution election percentages shall
automatically apply to Pay increases or decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution
election at any time in such manner and with such
advance notice as prescribed by the Administrator, and
such election shall be effective with the first
payroll paid after such date.
A Participant may resume Contributions by making a new
Contribution election at the same time in which a
Participant may change his or her election in such
manner and with such advance notice as prescribed by
the Administrator, and such election shall be
effective with the first payroll paid after such date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time
to time, in writing, without the necessity of amending
this Plan and Trust document, the minimum, if
applicable, and maximum Associate Pre-Tax Contribution
percentages, prospectively or retrospectively (for the
current Plan Year), for all Participants. In
addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as
it deems necessary. As of the Effective Date, the
Associate Pre-Tax Contribution maximum percentage is
11%.
Irrespective of the limits that may be established by
the Administrator in accordance with this paragraph,
in no event shall the contributions made by or on
behalf of a Participant for a Plan Year exceed the
maximum allowable under Code section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Associate Pre-Tax
Contributions for a calendar year to this Plan and
comparable contributions to any other qualified
defined contribution plan in excess of the
Contribution Dollar Limit may notify the Administrator
in writing by the following March 1 (or as late as
April 14 if allowed by the Administrator) that an
excess has occurred. In this event, the amount of the
excess specified by the Participant, adjusted for
investment gain or loss, shall be refunded to him or
her by April 15 and shall not be included as an Annual
Addition under Code section 415 for the year
contributed. Refunds shall not include investment
gain or loss for the period between the end of the
applicable Plan Year and the date of distribution.
Excess amounts shall first be taken from unmatched
Associate Pre-Tax Contributions and then from matched
Associate Pre-Tax Contributions. Any Company Matching
Contributions attributable to refunded excess
Associate Pre-Tax Contributions as described in this
Section shall be deemed a Contribution made by reason
of a mistake of fact and removed from the
Participant's Account.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover
Contributions, may only be made through payroll
deduction. Such amounts shall be paid to the Trustee
in cash and posted to each Participant's Account(s) as
soon as such amounts can reasonably be separated from
the Employer's general assets and balanced against the
specific amount made on behalf of each Participant.
In no event, however, shall such amounts be paid to
the Trustee more than 90 days after the date amounts
are deducted from a Participant's Pay. Associate Pre-
Tax Contributions shall be treated as Employer
Contributions in determining tax deductions under Code
section 404(a).
4 ROLLOVERS & TRUST-TO-TRUST TRANSFERS
4.1 Rollovers
The Administrator may authorize the Trustee to accept
a rollover contribution in cash, within the meaning of
Code section 402(c) or 408(d)(3)(A)(ii), directly from
an Eligible Associate or as a Direct Rollover from
another qualified plan on behalf of the Eligible
Associate, even if he or she is not yet a Participant.
The Associate shall be responsible for furnishing
satisfactory evidence, in such manner as prescribed by
the Administrator, that the amount is eligible for
rollover treatment. A rollover contribution received
directly from an Eligible Associate must be paid to
the Trustee in cash within 60 days after the date
received by the Eligible Associate from a qualified
plan or conduit individual retirement account.
Contributions described in this paragraph shall be
posted to the applicable Associate's Rollover Account
as of the date received by the Trustee.
If it is later determined that an amount contributed
pursuant to the above paragraph did not in fact
qualify as a rollover contribution under Code section
402(c) or 408(d)(3)(A)(ii), the balance credited to
the Associate's Rollover Account shall immediately be
(1) segregated from all other Plan assets, (2) treated
as a nonqualified trust established by and for the
benefit of the Associate, and (3) distributed to the
Associate. Any such nonqualifying rollover shall be
deemed never to have been a part of the Plan.
4.2 Transfers From Other Qualified Plans
The Administrator may instruct the Trustee to receive
assets in cash or in kind directly from another
qualified plan; provided that a transfer should not be
directed if:
(a) any amounts are not exempted by Code section
401(a)(11)(B) from the annuity requirements of
Code section 417, unless the Plan complies with
such requirements; or
(b) any amounts include benefits protected by Code
section 411(d)(6) which would not be preserved
under applicable Plan provisions.
The Trustee may refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets
unacceptable; or
(b) instructions for posting amounts to Participants'
Accounts are incomplete.
Such amounts shall be posted to the appropriate
Accounts of Participants as of the date received by
the Trustee.
5 EMPLOYER CONTRIBUTIONS
5.1 Company Matching Contributions
(a) Frequency and Eligibility. For each Plan Year,
the Employer shall make Company Matching
Contributions, as described in the following
Allocation Method paragraph, on behalf of each
Participant who contributed during the period and
was an Eligible Associate on the last day of the
period.
In addition, such Contributions shall be made on
behalf of each Participant who ceased being an
Associate during the period after having attained
age 55, or by reason of Reduction in Force or his
or her Disability or death.
(b) Allocation Method. The Company Matching
Contributions (including any Forfeiture Account
amounts applied as Company Matching Contributions
in accordance with Section 8.4) for each period
shall total 25% to 100%, based on the percentage
attainment of annual targeted Company Stock
earnings per share, of each eligible
Participant's Associate Pre-Tax Contributions for
the period, provided that no Company Matching
Contributions (and Forfeiture Account amounts)
shall be made based upon a Participant's
Contributions in excess of 6% of his or her Pay
while contributing Associate Pre-Tax
Contributions. The Employer may elect at any
time before the Employer's federal tax filing
date, including extensions, to change the
matching rate or the 6% of considered Pay to any
other percentages, including 0%.
(c) Timing, Medium and Posting. The Employer shall
make each period's Company Matching Contribution
in cash, or in Company Stock or a combination
thereof, as soon as is feasible, and not later
than the Employer's federal tax filing date,
including extensions, for deducting such
Contribution. The Trustee shall post such amount
to each Participant's Company Matching Account
once the total Contribution received has been
balanced against the specific amount to be
credited to each Participant's Company Matching
Account.
5.2 Retirement Contributions
(a) Frequency and Eligibility. For each Plan Year,
the Employer may make a Retirement Contribution
on behalf of each Participant who was an Eligible
Associate on the last day of the period and each
Participant who is otherwise eligible but who
ceased being an Associate during the period after
having attained age 55, or by reason of Reduction
in Force or his or her Disability or death.
(b) Allocation Method. The Retirement Contribution
(including any Forfeiture Account amounts applied
as Retirement Contributions in accordance with
Section 8.4) for each period, shall be in an
amount determined by the Employer and allocated
among eligible Participants in direct proportion
to their Compensation while a Participant and
Eligible Associate.
(c) Timing, Medium and Posting. The Employer shall
make each period's Retirement Contribution in
cash, or in Company Stock or a combination
thereof, as soon as is feasible, and not later
than the Employer's federal tax filing date,
including extensions, for deducting such
Contribution. The Trustee shall post such amount
to each Participant's Retirement Account once the
total Contribution received has been balanced
against the specific amount to be credited to
each Participant's Retirement Account.
5.3 Supplemental Retirement Contributions
(a) Frequency and Eligibility. For each Plan Year,
the Employer may make a Supplemental Retirement
Contribution on behalf of Non-Highly Compensated
Employee Participants who were Eligible
Associates at any time during the period.
(b) Allocation Method. The Supplemental Retirement
Contribution for each period shall be allocated
to eligible Participants in order of each
Participant's Taxable Income for the Plan Year
beginning with the Participant with the lowest
Taxable Income, in an amount so that the Annual
Addition, as defined in Section 13.1, to each
Participant's Account equals but does not exceed
the Maximum Annual Addition, as defined in
Section 13.2. Notwithstanding no Supplemental
Retirement Contributions will be made in an
amount in excess of the amount necessary to
satisfy the tests described in Sections 12.2 and
12.4.
(c) Timing, Medium and Posting. The Employer shall
make each period's Supplemental Retirement
Contribution in cash, or in Company Stock or a
combination thereof, as soon as is feasible, and
not later than the Employer's federal tax filing
date, including extensions, for deducting such
contribution. Notwithstanding, for purposes of
satisfying the tests described in Sections 12.2
and 12.4 Supplemental Retirement Contributions
must be made before the end of the Plan Year
following the Plan Year being tested. The
Trustee shall post such amount to each
Participant's Supplemental Retirement Account
once the total Contribution received has been
balanced against the specific amount to be
credited to each Participant's Supplemental
Retirement Account.
6 ACCOUNTING
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of
Accounts for each Participant in order to reflect
transactions both by type of Contribution and
investment medium. Financial transactions shall be
accounted for at the individual Account level by
posting each transaction to the appropriate Account of
each affected Participant. Participant Account values
shall be maintained in shares for the Investment Funds
and in dollars for their Sweep and Participant loan
Accounts. At any point in time, the Account value
shall be determined using the most recent Trade Date
values provided by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed
to or distributed from the Trust shall be posted to
each affected Participant's Sweep Account. Any amount
held in the Sweep Account will be credited with
interest up until the date on which it is removed from
the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of
each Trade Date. For any transaction to be processed
as of a Trade Date, the Trustee must receive
instructions for the transaction by the Sweep Date.
Such instructions shall apply to amounts held in the
Account on that Sweep Date. Financial transactions of
the Investment Funds shall be posted to Participants'
Accounts as of the Trade Date, based upon the Trade
Date values provided by the Trustee, and settled on
the Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be
maintained in shares. The Trustee is responsible for
determining the share values of each Investment Fund
as of each Trade Date. To the extent an Investment
Fund is comprised of collective investment funds of
the Trustee, or any other fiduciary to the Plan, the
share values shall be determined in accordance with
the rules governing such collective investment funds,
which are incorporated herein by reference. All other
share values shall be determined by the Trustee. The
share value of each Investment Fund shall be based on
the fair market value of its underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to
Account maintenance, transaction and Investment Fund
management and maintenance, as set forth below, are
paid by the Employer directly, or indirectly, through
the Forfeiture Account as directed by the
Administrator, such fees and expenses shall be paid as
set forth below. The Employer may pay a lower portion
of the fees and expenses allocable to the Accounts of
Participants who are no longer Associates or who are
not Beneficiaries, unless doing so would result in
discrimination.
(a) Account Maintenance: Account maintenance fees
and expenses, may include but are not limited to,
administrative, Trustee, government annual report
preparation, audit, legal, nondiscrimination
testing, and fees for any other special services.
Account maintenance fees shall be charged to
Participants on a per Participant basis provided
that no fee shall reduce a Participant's Account
balance below zero.
(b) Transaction: Transaction fees and expenses, may
include but are not limited to, recurring
payment, Investment Fund election change and loan
fees. Transaction fees shall be charged to the
Participant's Account involved in the transaction
provided that no fee shall reduce a Participant's
Account balance below zero.
(c) Investment Fund Management and Maintenance:
Management and maintenance fees and expenses
related to the Investment Funds shall be charged
at the Investment Fund level and reflected in the
net gain or loss of each Fund.
As of the Effective Date, a breakdown of which Plan
fees and expenses shall generally be borne by the
Trust (and charged to individual Participants'
Accounts) and those that shall be paid by the
Employer, directly or indirectly, is set forth in
Appendix B and may be changed by the Administrator
from time to time, in writing, without the necessity
of amending this Plan and Trust document.
The Trustee shall have the authority to pay any such
fees and expenses, which remain unpaid by the Employer
for 60 days, from the Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Account
of the Participant and accounted for in dollars as an
earmarked asset of the borrowing Participant's
Account.
6.7 Error Correction
The Administrator may correct any errors or omissions
in the administration of the Plan by restoring any
Participant's Account balance with the amount that
would be credited to the Account had no error or
omission been made. Funds necessary for any such
restoration shall be provided through payment made by
the Employer, or by the Trustee to the extent the
error or omission is attributable to actions or
inactions of the Trustee, or if the restoration
involves an Employer Contribution Account, the
Administrator may direct the Trustee to use amounts
from the Forfeiture Account.
6.8 Participant Statements
The Administrator shall provide Participants with
statements of their Accounts as soon after the end of
each quarter of the Plan Year as is administratively
feasible.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable
accounting methods in performing their respective
duties during any Conversion Period. This includes,
but is not limited to, the method for allocating net
investment gains or losses and the extent, if any, to
which contributions received by and distributions paid
from the Trust during this period share in such
allocation.
6.10 Accounts for QDRO Beneficiaries
A separate Account shall be established for an
alternate payee entitled to any portion of a
Participant's Account under a QDRO as of the date and
in accordance with the directions specified in the
QDRO. In addition, a separate Account may be
established during the period of time the
Administrator, a court of competent jurisdiction or
other appropriate person is determining whether a
domestic relations order qualifies as a QDRO. Such a
separate Account shall be valued and accounted for in
the same manner as any other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so
provides, the portion of a Participant's Account
payable to an alternate payee may be distributed,
in a form as permissible under the Distributions
Once Employment Ends Section, to the alternate
payee at the time specified in the QDRO,
regardless of whether the Participant is entitled
to a distribution from the Plan at such time.
(b) Participant Loans. Except to the extent required
by law, an alternate payee, on whose behalf a
separate Account has been established, shall not
be entitled to borrow from such Account. If a
QDRO specifies that the alternate payee is
entitled to any portion of the Account of a
Participant who has an outstanding loan balance,
all outstanding loans shall generally continue to
be held in the Participant's Account and shall
not be divided between the Participant's and
alternate payee's Accounts.
(c) Investment Direction. Where a separate Account
has been established on behalf of an alternate
payee and has not yet been distributed, the
alternate payee may direct the investment of such
Account in the same manner as if he or she were a
Participant.
7 INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
Except for Participants' Sweep and loan Accounts, the
Trust shall be maintained in various Investment Funds.
The Administrator shall select the Investment Funds
offered to Participants and may change the number or
composition of the Investment Funds, subject to the
terms and conditions agreed to with the Trustee. As
of the Effective Date, a list of the Investment Funds
offered to Participants is set forth in Appendix A,
and may be changed by the Administrator from time to
time, in writing, without the necessity of amending
this Plan and Trust document.
7.2 Investment Fund Elections
Each Participant shall direct the investment of all of
his or her Contribution Accounts except for these
Accounts:
Company Matching Account
which shall be entirely invested in the Investment
Fund specified by the Administrator, which Investment
Fund as of the Effective Date is set forth in Appendix
A.
A Participant shall make his or her investment
election in any combination of one or any number of
the Investment Funds offered in accordance with the
procedures established by the Administrator and
Trustee. However, during any Conversion Period, Trust
assets may be held in any investment vehicle permitted
by the Plan, as directed by the Administrator,
irrespective of Participant investment elections.
The Administrator may set a maximum percentage of the
total election that a Participant may direct into any
specific Investment Fund, which maximum, if any, as of
the Effective Date, is set forth in Appendix A, and
may be changed from by the Administrator time to time,
in writing, without the necessity of amending this
Plan and Trust document.
7.3 Responsibility for Investment Choice
Each Participant shall be solely responsible for the
selection of his or her Investment Fund choices. No
fiduciary with respect to the Plan is empowered to
advise a Participant as to the manner in which his or
her Accounts are to be invested, and the fact that an
Investment Fund is offered shall not be construed to
be a recommendation for investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for
the investment of that portion of a Participant's
Account which is not yet held in an Investment Fund
and for which no valid investment election is on file.
The Investment Fund specified as of the Effective Date
is set forth in Appendix A, and may be changed by the
Administrator from time to time, in writing, without
the necessity of amending this Plan and Trust
document.
7.5 Timing
A Participant shall make his or her initial investment
election upon becoming a Participant and may change
his or her election at any time in accordance with the
procedures established by the Administrator and
Trustee. Investment elections received by the Trustee
by the Sweep Date will be effective on the following
Trade Date.
7.6 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to
a Participant's Account for Investment Fund election
changes in excess of a specified number per year as
determined by the Administrator.
8 VESTING & FORFEITURES
8.1 Fully Vested Contribution Accounts
A Participant shall be fully vested in these Accounts
at all times:
Associate Pre-Tax Account
Rollover Account
Company Matching Account
Supplemental Retirement Account
8.2 Full Vesting upon Certain Events
A Participant's entire Account shall become fully
vested once he or she has attained his or her Normal
Retirement Date as an Associate or upon his or her
leaving the Employer due to a Reduction in Force or
his or her Disability or death.
8.3 Vesting Schedule
In addition to the vesting provided above, a
Participant's Retirement Account shall become vested
in accordance with the following schedule:
Years of Vesting Vested
Service Percentage
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
If this vesting schedule is changed, the vested
percentage for each Participant shall not be less than
his or her vested percentage determined as of the last
day prior to this change, and for any Participant with
at least three Years of Vesting Service when the
schedule is changed, vesting shall be determined using
the more favorable vesting schedule.
8.4 Forfeitures
A Participant's non-vested Account balance shall be
forfeited as of the Settlement Date following the
Sweep Date on which the Administrator has reported to
the Trustee that the Participant's employment has
terminated with all Related Companies. Forfeitures
from all Employer Contribution Accounts shall be
transferred to and maintained in a single Forfeiture
Account, which shall be invested in interest bearing
deposits of the Trustee. Forfeiture Account amounts
shall be utilized to restore Accounts, to pay Plan
fees and expenses, and to reduce Company Matching and
Retirement Contributions as directed by the
Administrator.
8.5 Rehired Associates
(a) Service. If a former Associate is rehired,all
Periods of Employment credited prior to his or
her termination of employment shall be counted in
determining his or her vested interest.
(b) Account Restoration. If a former Associate is
rehired before he or she has a Break in Service,
the amount forfeited when his or her employment
last terminated shall be restored to his or her
Account. The restoration shall include the
interest which would have been credited had such
forfeiture been invested in the Sweep Account
from the date forfeited until the date the
restoration amount is determined. The amount
shall come from the Forfeiture Account to the
extent possible, and any additional amount needed
shall be contributed by the Employer. The vested
interest in his or her restored Account shall
then be equal to:
V% times (AB + D) - D
where:
V% = current vested percentage
AB = current account balance
D = amount previously distributed
9 PARTICIPANT LOANS
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the
terms and conditions set forth in this Section.
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner
and with such advance notice as prescribed by the
Administrator. All loans shall be evidenced by a
promissory note, secured only by the portion of the
Participant's Account from which the loan is made, and
the Plan shall have a lien on this portion of his or
her Account.
9.3 Spousal Consent
A Participant is required to obtain Spousal Consent in
order to take out a loan under the Plan.
9.4 Loan Approval
The Administrator, or the Trustee if otherwise
authorized by the Administrator and agreed to by the
Trustee, is responsible for determining that a loan
request conforms to the requirements described in this
Section and granting such request.
9.5 Loan Funding Limits
The loan amount must meet all of the following limits
as determined as of the Sweep Date the loan is
processed:
(a) Plan Minimum Limit. The minimum amount for any
loan is $1,000.
(b) Plan Maximum Limit. Subject to the legal limit
described in (c) below, the maximum a Participant
may borrow, including the outstanding balance of
existing Plan loans, is 100% of the following
Accounts which are fully vested:
Associate Pre-Tax Account
Rollover Account
(c) Legal Maximum Limit. The maximum a Participant
may borrow, including the outstanding balance of
existing Plan loans, is 50% of his or her vested
Account balance, not to exceed $50,000. However,
the $50,000 maximum is reduced by the
Participant's highest outstanding loan balance
during the 12 month period ending on the day
before the Sweep Date as of which the loan is
made. For purposes of this paragraph, the
qualified plans of all Related Companies shall be
treated as though they are part of this Plan to
the extent it would decrease the maximum loan
amount.
9.6 Maximum Number of Loans
A Participant may have a maximum of two loans
outstanding at any given time.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the
assets of his or her own Accounts. The available
assets shall be determined first by Account type and
then by investment type within each type of Account.
The hierarchy for loan funding by type of Account
shall be the order listed in the preceding Plan
Maximum Limit paragraph. Within each Account used for
funding a loan, amounts shall first be taken from the
Sweep Account and then taken by type of investment in
direct proportion to the market value of the
Participant's interest in each Investment Fund as of
the Trade Date on which the loan is processed.
Loans will be funded on the Settlement Date following
the Trade Date as of which the loan is processed. The
Trustee shall make payment to the Participant as soon
thereafter as administratively feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall
be a fixed reasonable rate of interest, determined
from time to time by the Administrator, which provides
the Plan with a return commensurate with the
prevailing interest rate charged by persons in the
business of lending money for loans which would be
made under similar circumstances. As of the Effective
Date, the interest rate is determined as set forth in
Appendix C, and may be changed by the Administrator
from time to time, in writing, without the necessity
of amending this Plan and Trust document.
9.9 Repayment
Substantially level amortization shall be required of
each loan with payments made at least monthly,
generally through payroll deduction. Loans may be
prepaid in full or in part at any time. The
Participant may choose the loan repayment period, not
to exceed 5 years. However, the term may be for any
period not to exceed 15 years if the purpose of the
loan is to acquire the Participant's principal
residence.
9.10 Repayment Hierarchy
Loan principal repayments shall be credited to the
Participant's Accounts in the inverse of the order
used to fund the loan. Loan interest shall be
credited to the Participant's Accounts in direct
proportion to the principal payment. Loan payments
are credited by investment type based upon the
Participant's current investment election for new
Contributions.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan
payments for up to 12 months for a Participant who is
on a Leave of Absence without pay. During the
suspension period interest shall continue to accrue on
the outstanding loan balance. At the expiration of
the suspension period all outstanding loan payments
and accrued interest thereon shall be due unless
otherwise agreed upon by the Administrator.
9.12 Loan Default
A loan is treated as a default if scheduled loan
payments are more than 90 days late. A Participant
shall then have 30 days from the time he or she
receives written notice of the default and a demand
for past due amounts to cure the default before it
becomes final.
In the event of default, the Administrator may direct
the Trustee to report the default as a taxable
distribution. As soon as a Plan withdrawal or
distribution to such Participant would otherwise be
permitted, the Administrator may instruct the Trustee
to execute upon its security interest in the
Participant's Account by distributing the note to the
Participant.
9.13 Call Feature
The Administrator shall have the right to call any
Participant loan once a Participant's employment with
all Related Companies has terminated or if the Plan is
terminated.
10 IN-SERVICE WITHDRAWALS
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an
Associate are permitted pursuant to the terms and
conditions set forth in this Section and as required
by law as set forth in Section 11.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service
withdrawal in such manner and with such advance notice
as prescribed by the Administrator. The Participant
shall be provided the notice prescribed by Code
section 402(f).
If an in-service withdrawal is one to which Code
sections 401(a)(11) and 417 do not apply, such in-
service withdrawal may commence less than 30 days
after the aforementioned notice is provided, if:
(a) the Participant is clearly informed that he or
she has the right to a period of at least 30 days
after receipt of such notice to consider his or
her option to elect or not elect a Direct
Rollover for all or a portion, if any, of his or
her in-service withdrawal which will constitute
an Eligible Rollover Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a Direct Rollover for all or
a portion, if any, of his or her in-service
withdrawal which will constitute an Eligible
Rollover Distribution or alternatively elects to
have all or a portion made payable directly to
him or her, thereby not electing a Direct
Rollover for all or a portion thereof.
10.3 Spousal Consent
A Participant is required to obtain Spousal Consent in
order to make an in-service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee if otherwise
authorized by the Administrator and agreed to by the
Trustee, is responsible for determining that an in-
service withdrawal request conforms to the
requirements described in this Section and granting
such request.
10.5 Minimum Amount, Payment Form and Medium
There is no minimum amount for any type of withdrawal.
With regard to the portion of a withdrawal
representing an Eligible Rollover Distribution, a
Participant may elect a Direct Rollover for all or a
portion of such amount. The form of payment for an
in-service withdrawal shall be a single lump sum and
payment shall be made in cash.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be
made solely from the assets of his or her own Accounts
and will be based on the Account values as of the
Trade Date the in-service withdrawal is processed.
The available assets shall be determined first by
Account type and then by investment type within each
type of Account. Within each Account used for funding
an in-service withdrawal, amounts shall first be taken
from the Sweep Account and then taken by type of
investment in direct proportion to the market value of
the Participant's interest in each Investment Fund
(which excludes Participant loans) as of the Trade
Date on which the in-service withdrawal is processed.
In-Service withdrawals will be funded on the
Settlement Date following the Trade Date as of which
the in-service withdrawal is processed. The Trustee
shall make payment as soon thereafter as
administratively feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Associate
may request the withdrawal of up to the amount
necessary to satisfy a financial need including
amounts necessary to pay any federal, state or
local income taxes or penalties reasonably
anticipated to result from the withdrawal. Only
requests for withdrawals (1) on account of a
Participant's "Deemed Financial Need", and (2)
which are "Deemed Necessary" to satisfy the
financial need will be approved.
(b) "Deemed Financial Need". Financial commitments
relating to:
(1) the payment of unreimbursable medical
expenses described under Code section 213(d)
incurred (or to be incurred) by the
Associate, his or her spouse or dependents;
(2) the purchase (excluding mortgage payments)
of the Associate's principal residence;
(3) the payment of unreimbursable tuition and
related educational fees for up to the next
12 months of post-secondary education for
the Associate, his or her spouse or
dependents;
(4) the payment of funeral expenses of an
Associate's family member;
(5) the payment of amounts necessary for the
Associate to prevent losing his or her
principal residence through eviction or
foreclosure on the mortgage; or
(6) any other circumstance specifically
permitted under Code section
401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "deemed
necessary" to satisfy the financial need only if
the withdrawal amount does not exceed the
financial need and all of these conditions are
met:
(1) the Associate has obtained all other
possible withdrawals and nontaxable loans
available from all plans maintained by
Related Companies;
(2) the Administrator shall suspend the
Associate from making any contributions to
this Plan, all other qualified and
nonqualified plans of deferred compensation
and all stock option or stock purchase plans
maintained by Related Companies for 12
months from the date the withdrawal payment
is made; and
(3) the Administrator shall reduce the
Contribution Dollar Limit for the Associate
for the calendar year next following the
calendar year of the withdrawal by the
amount of the Associate's Associate Pre-Tax
Contributions for the calendar year of the
withdrawal.
(d) Account Sources for Withdrawal. The withdrawal
amount shall come from the following of the
Participant's fully vested Accounts, in the
priority order as follows:
Rollover Account
Associate Pre-Tax Account
The amount that may be withdrawn from a
Participant's Associate Pre-Tax Account shall not
include any earnings credited to his or her
Associate Pre-Tax Account.
(e) Permitted Frequency. There is no restriction on
the number of Hardship withdrawals permitted to a
Participant.
10.8 Rollover Account Withdrawals
No in-service withdrawals are permitted from a
Participant's Rollover Account except as provided
elsewhere in this Section.
10.9 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Associate
and over age 59 1/2 may withdraw from the Accounts
listed in paragraph (b) below.
(b) Account Sources for Withdrawal. The withdrawal
amount shall come from the following of the
Participant's fully vested Accounts, in the
priority order as follows:
Rollover Account
Associate Pre-Tax Account
A Participant's Company Matching, Retirement and
Supplemental Retirement Accounts may also be
included as Account sources for withdrawal for a
Participant who is an Associate and over age 70 1/2.
(c) Permitted Frequency. There is no restriction on
the number of Over Age 59 1/2 withdrawals permitted
to a Participant.
(d) Suspension from Further Contributions. An Over
Age 59 1/2 withdrawal shall not affect a
Participant's ability to make or be eligible to
receive further Contributions.
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case
of his or her death, shall be provided with
information regarding all optional times and forms of
distribution available, to include the notices
prescribed by Code section 402(f) and Code section
411(a)(11). Subject to the other requirements of this
Section, a Participant, or his or her Beneficiary in
the case of his or her death, may elect, in such
manner and with such advance notice as prescribed by
the Administrator, to have his or her vested Account
balance paid to him or her beginning upon any
Settlement Date following the Participant's
termination of employment with all Related Companies
or, if earlier, at the time required by law as set
forth in Section 11.7.
If a distribution is one to which Code sections
401(a)(11) and 417 do not apply, such distribution may
commence less than 30 days after the aforementioned
notices are provided, if:
(a) the Participant is clearly informed that he or
she has the right to a period of at least 30 days
after receipt of such notices to consider the
decision as to whether to elect a distribution
and if so to elect a particular form of
distribution and to elect or not elect a Direct
Rollover for all or a portion, if any, of his or
her distribution which will constitute an
Eligible Rollover Distribution; and
(b) the Participant after receiving such notices,
affirmatively elects a distribution and a Direct
Rollover for all or a portion, if any, of his or
her distribution which will constitute an
Eligible Rollover Distribution or alternatively
elects to have all or a portion made payable
directly to him or her, thereby not electing a
Direct Rollover for all or a portion thereof.
11.2 Spousal Consent
A Participant is required to obtain Spousal Consent in
order to receive a distribution under the Plan.
11.3 Payment Form and Medium
A Participant may elect to be paid in any of these
forms:
(a) a single lump sum, or
(b) a portion paid in a lump sum, and the remainder
paid later, or
(c) periodic installments over a period not to exceed
the life expectancy of the Participant and his or
her Beneficiary.
Distributions shall be made in cash, except to the
extent a distribution consists of a distribution of an
offset amount as described in Section 9.13. With
regard to the portion of a distribution representing
an Eligible Rollover Distribution, a Distributee may
elect a Direct Rollover for all or a portion of such
amount.
11.4 Distribution of Small Amounts
If, at the time a Participant's employment with all
Related Companies ends, the Participant's vested
Account balance is $3,500 or less, the Participant's
benefit may be paid as a single lump sum, without his
or her consent, and if married, his or her spouse's
consent, after his or her employment with all Related
Companies ends in accordance with procedures
prescribed by the Administrator.
11.5 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely
from the assets of his or her own Accounts and will be
based on the Account values as of the Trade Date the
distribution is processed. The available assets shall
be determined first by Account type and then by
investment type within each type of Account. Within
each Account used for funding a distribution, amounts
shall first be taken from the Sweep Account and then
taken by type of investment in direct proportion to
the market value of the Participant's interest in each
Investment Fund as of the Trade Date on which the
distribution is processed.
Distributions will be funded on the Settlement Date
following the Trade Date as of which the distribution
is processed. The Trustee shall make payment as soon
thereafter as administratively feasible.
11.6 Deemed Distribution
For purposes of Section 8.4, vested Account balances
will be deemed distributed as of the Settlement Date
following the Sweep Date on which the Administrator
has reported to the Trustee that the Participant's
employment with all Related Companies has terminated.
11.7 Latest Commencement Permitted
In addition to any other Plan requirements and unless
a Participant elects otherwise, his or her benefit
payments will begin not later than 60 days after the
end of the Plan Year in which the Participant attains
his or her Normal Retirement Date or retires,
whichever is later. However, if the amount of the
payment or the location of the Participant (after a
reasonable search) cannot be ascertained by that
deadline, payment shall be made no later than 60 days
after the earliest date on which such amount or
location is ascertained but in no event later than as
described below. A Participant's failure to elect in
such manner as prescribed by the Administrator to have
his or her vested Account balance paid to him or her,
shall be deemed to be an election by the Participant
to defer his or her distribution.
Benefit payments shall begin by the April 1
immediately following the end of the calendar year in
which the Participant attains age 70 1/2 (whether or not
he or she is an Associate).
11.8 Payment Within Life Expectancy
The Participant's payment election must be consistent
with the requirement of Code section 401(a)(9) that
all payments are to be completed within a period not
to exceed the lives or the joint and last survivor
life expectancy of the Participant and his or her
Beneficiary. The life expectancies of a Participant
and his or her Beneficiary may not be recomputed
annually.
11.9 Incidental Benefit Rule
The Participant's payment election must be consistent
with the requirement that, if the Participant's spouse
is not his or her sole primary Beneficiary, the
minimum annual distribution for each calendar year,
beginning with the year in which the Participant
attains age 70 1/2 shall not be less than the quotient
obtained by dividing (a) the Participant's vested
Account balance as of the last Trade Date of the
preceding year by (b) the applicable divisor as
determined under the incidental benefit requirements
of Code section 401(a)(9).
11.10 Payment to Beneficiary
Payment to a Beneficiary must either: (1) be completed
by the end of the calendar year that contains the
fifth anniversary of the Participant's death or (2)
begin by the end of the calendar year that contains
the first anniversary of the Participant's death and
be completed within the period of the Beneficiary's
life or life expectancy, except that:
(a) If the Participant dies after the April 1
immediately following the end of the calendar
year in which he or she attains age 70 1/2, payment
to his or her Beneficiary must be made at least
as rapidly as provided in the Participant's
distribution election;
(b) If the surviving spouse is the Beneficiary,
payments need not begin until the end of the
calendar year in which the Participant would have
attained age 70 1/2 and must be completed within the
spouse's life or life expectancy; and
(c) If the Participant and the surviving spouse who
is the Beneficiary die (1) before the April 1
immediately following the end of the calendar
year in which the Participant would have attained
age 70 1/2 and (2) before payments have begun to the
spouse, the spouse will be treated as the
Participant in applying these rules.
11.11 Beneficiary Designation
Each Participant may complete a beneficiary
designation form indicating the Beneficiary who is to
receive the Participant's remaining Plan interest at
the time of his or her death. The designation may be
changed at any time. However, a Participant's spouse
shall be the sole primary Beneficiary unless the
designation includes Spousal Consent for another
Beneficiary. If no proper designation is in effect at
the time of a Participant's death or if the
Beneficiary does not survive the Participant, the
Beneficiary shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, per
stirpes (by right of representation), or
(c) Participant's estate.
12 ADP AND ACP TESTS
12.1 Contribution Limitation Definitions
The following definitions are applicable to this
Section 12 (where a definition is contained in both
Sections 1 and 12, for purposes of Section 12 the
Section 12 definition shall be controlling):
(a) "ACP" or "Average Contribution Percentage". The
Average Percentage calculated using Contributions
allocated to Participants as of a date within the
Plan Year.
(b) "ACP Test". The determination of whether the ACP
is in compliance with the Basic or Alternative
Limitation for a Plan Year (as provided in
Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The
Average Percentage calculated using Deferrals
allocated to Participants as of a date within the
Plan Year.
(d) "ADP Test". The determination of whether the ADP
is in compliance with the Basic or Alternative
Limitation for a Plan Year (as provided in
Section 12.2).
(e) "Average Percentage". The average of the
calculated percentages for Participants within
the specified group. The calculated percentage
refers to either the "Deferrals" or
"Contributions" (as defined in this Section) made
on each Participant's behalf for the Plan Year,
divided by his or her Compensation for the
portion of the Plan Year in which he or she was
an Eligible Associate while a Participant.
(Associate Pre-Tax Contributions to this Plan or
comparable contributions to plans of Related
Companies which will be refunded solely because
they exceed the Contribution Dollar Limit are
included in the percentage for the HCE Group but
not for the NHCE Group.)
(f) "Contributions" shall include Company Matching
Contributions. In addition, Contributions may
include Associate Pre-Tax and Supplemental
Retirement Contributions, but only to the extent
that (1) the Employer elects to use them, (2)
they are not used or counted in the ADP Test, (3)
Supplemental Retirement Contributions are fully
vested when made and not withdrawable by an
Associate before he or she attains age 59 1/2, and
(4) Associate Pre-Tax Contributions are necessary
to meet the ACP Test Alternative Limitation
(defined in Section 12.2 (b)) or the Multiple Use
Test.
(g) "Deferrals" shall include Associate Pre-Tax
Contributions. In addition, Deferrals may
include Company Matching and Supplemental
Retirement Contributions, but only to the extent
that (1) the Employer elects to use them, (2)
they are not used or counted in the ACP Test, and
(3) such Contributions are fully vested when made
and not withdrawable by an Associate before he or
she attains age 59 1/2.
(h) "Family Member". An Associate who is, at any
time during the Plan Year or Lookback Year, a
spouse, lineal ascendant or descendant, or spouse
of a lineal ascendant or descendant of (1) an
active or former Associate who at any time during
Plan Year or Lookback Year is a more than 5%
Owner (within the meaning of Code section
414(q)(3)), or (2) an HCE who is among the 10
Associates with the highest Compensation for such
Year.
(i) "HCE" or "Highly Compensated Employee". With
respect to each Employer and its Related
Companies, an Associate during the Plan Year or
Lookback Year who (in accordance with Code
section 414(q)):
(1) Was a more than 5% Owner at any time during
the Lookback Year or Plan Year;
(2) Received Compensation during the Lookback
Year (or in the Plan Year if among the 100
Associates with the highest Compensation for
such Year) in excess of (i) $75,000 (as
adjusted for such Year pursuant to Code
sections 414(q)(1) and 415(d)), or (ii)
$50,000 (as adjusted for such Year pursuant
to Code sections 414(q)(1) and 415(d)) in
the case of a member of the "top-paid group"
(within the meaning of Code section
414(q)(4)) for such Year), provided,
however, that if the conditions of Code
section 414(q)(12)(B)(ii) are met, the
Company may elect for any Plan Year to apply
clause (i) by substituting $50,000 for
$75,000 and not to apply clause (ii);
(3) Was an officer of a Related Company and
received Compensation during the Lookback
Year (or in the Plan Year if among the 100
Associates with the highest Compensation for
such Year) that is greater than 50% of the
dollar limitation in effect under Code
section 415(b)(1)(A) and (d) for such Year
(or if no officer has Compensation in excess
of the threshold, the officer with the
highest Compensation), provided that the
number of officers shall be limited to 50
Associates (or, if less, the greater of
three Associates or 10% of the Associates);
or
(4) Was a Family Member at any time during the
Lookback Year or Plan Year, in which case
the Contributions and Compensation of the
HCE and his or her Family Members shall be
aggregated and they shall be treated as a
single HCE.
A former Associate shall be treated as an HCE if
(1) such former Associate was an HCE when he
separated from service, or (2) such former
Associate was an HCE in service at any time after
attaining age 55.
The determination of who is an HCE, including the
determinations of the number and identity of
Associates in the top-paid group, the top 100
Associates and the number of Associates treated
as officers shall be made in accordance with Code
section 414(q).
(j) "HCE Group" and "NHCE Group". With respect to
each Employer and its Related Companies, the
respective group of HCEs and NHCEs who are
eligible to have amounts contributed on their
behalf for the Plan Year, including Associates
who would be eligible but for their election not
to participate or to contribute, or because their
Pay is greater than zero but does not exceed a
stated minimum.
(1) If the Related Companies maintain two or
more plans which are subject to the ADP or
ACP Test and are considered as one plan for
purposes of Code sections 401(a)(4) or
410(b), all such plans shall be aggregated
and treated as one plan for purposes of
meeting the ADP and ACP Tests, provided
that, for Plan Years beginning after
December 31, 1989, plans may only be
aggregated if they have the same Plan Year.
(2) If an HCE, who is one of the top 10 paid
Associates or a more than 5% Owner, has any
Family Members, the Deferrals, Contributions
and Compensation of such HCE and his or her
Family Members shall be combined and treated
as a single HCE. Such amounts for all other
Family Members shall be removed from the
NHCE Group percentage calculation and be
combined with the HCE's.
(3) If an HCE is covered by more than one cash
or deferred arrangement maintained by the
Related Companies, all such plans shall be
aggregated and treated as one plan for
purposes of calculating the separate
percentage for the HCE which is used in the
determination of the Average Percentage.
(k) "Lookback Year". Pursuant to Code section
414(q), the Company elects as the Lookback Year
the 12 months ending immediately prior to the
start of the Plan Year.
(l) "Multiple Use Test". The test described in
Section 12.4 which a Plan must meet where the
Alternative Limitation (described in Section
12.2(b)) is used to meet both the ADP and ACP
Tests.
(m) "NHCE" or "Non-Highly Compensated Employee". An
Associate who is not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group
must meet either the Basic or Alternative Limitation
when compared to the respective ADP and ACP for the
NHCE Group, determined as follows:
(a) Basic Limitation. The HCE Group Average
Percentage may not exceed 1.25 times the NHCE
Group Average Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE
Group Average Percentage as follows:
If the NHCE Group Then the Maximum HCE
Average Group Average Percentage
Percentage is: is:
Less than 2% 2 times NHCE Group
Average %
2% to 8% NHCE Group Average %
plus 2%
More than 8% NA - Basic Limitation
applies
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator
shall determine, no later than the end of the next
Plan Year, a maximum percentage to be used in place of
the calculated percentage for all HCEs that would
reduce the ADP and/or ACP for the HCE group by a
sufficient amount to meet the ADP and ACP Tests.
(a) ADP Correction. Associate Pre-Tax Contributions
shall, by the end of the next Plan Year, be
refunded (including amounts previously refunded
because they exceeded the Contribution Dollar
Limit) to the Participant in an amount equal to
the actual Deferrals minus the product of the
maximum percentage and the HCE's Compensation.
Excess amounts shall first be taken from
unmatched Associate Pre-Tax Contributions and
then from matched Associate Pre-Tax
Contributions. Any Company Matching
Contributions attributable to refunded excess
Associate Pre-Tax Contributions as described in
this Section shall be deemed a Contribution made
by reason of a mistake of fact and removed from
the Participant's Account.
(b) ACP Correction. Company Matching Contributions
shall, by the end of the next Plan Year, be
refunded to the Participant in an amount equal to
the actual Contributions minus the product of the
maximum percentage and the HCE's Compensation.
(c) Investment Fund Sources. Once the amount of
excess Deferrals and/or Contributions is
determined amounts shall then be taken by type of
investment in direct proportion to the market
value of the Participant's interest in each
Investment Fund (which excludes Participant
loans) at the time the correction is made.
(d) Family Member Correction. To the extent any
reduction is necessary with respect to an HCE and
his or her Family Members that have been combined
and treated for testing purposes as a single
Associate, the excess Deferrals and Contributions
from the ADP and/or ACP Test shall be prorated
among each such Participant in direct proportion
to his or her Deferrals or Contributions included
in each Test.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section
12.2) is used to meet both the ADP and ACP Tests, the
ADP and ACP for the HCE Group must also comply with
the requirements of Code section 401(m)(9). Such Code
section requires that the sum of the ADP and ACP for
the HCE Group (as determined after any corrections
needed to meet the ADP and ACP Tests have been made)
not exceed the sum (which produces the most favorable
result) of:
(a) the Basic Limitation (defined in Section 12.2)
applied to either the ADP or ACP for the NHCE
Group, and
(b) the Alternative Limitation applied to the other
NHCE Group percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the
Administrator shall determine a maximum percentage to
be used in place of the calculated percentage for all
HCEs that would reduce either or both the ADP or ACP
for the HCE Group by a sufficient amount to meet the
multiple use limit. Any excess shall be handled in
the same manner that the distribution of excess
Deferrals or Contributions are handled.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded
to a Participant or forfeited in accordance with
Section 12.3 or 12.5 shall be adjusted for investment
gain or loss. Refunds shall not include investment
gain or loss for the period between the end of the
applicable Plan Year and the date of distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring
that the Plan meets the ADP Test, the ACP Test and the
Multiple Use Test, and that the Contribution Dollar
Limit is not exceeded. In carrying out its
responsibilities, the Administrator shall have sole
discretion to limit or reduce Deferrals or
Contributions at any time. The Administrator shall
maintain records which are sufficient to demonstrate
that the ADP Test, the ACP Test and the Multiple Use
Test, have been met for each Plan Year for at least as
long as the Employer's corresponding tax year is open
to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs,
NHCEs, and the performance of the testing and any
corrective action resulting therefrom shall be
made separately with regard to the Associates of
each Employer (and its Related Companies) that is
not a Related Company with the other Employer(s).
(b) Collective Bargaining Units: The performance of
the ADP Test, and if applicable, the ACP Test and
Multiple Use Test, and any corrective action
resulting therefrom shall be applied separately
to Associates who are eligible to participate in
the Plan as a result of a collective bargaining
agreement.
In addition, separate testing may be applied, at the
discretion of the Administrator and to the extent
permitted under Treasury regulations, to any group of
Associates for whom separate testing is permissible.
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
13.1 "Annual Addition" Defined
The sum of all amounts allocated to the Participant's
Account for a Plan Year. Amounts include
contributions (except for rollovers or transfers from
another qualified plan), forfeitures and, if the
Participant is a Key Employee (pursuant to Section 14)
for the applicable or any prior Plan Year, medical
benefits provided pursuant to Code section 419A(d)(1).
For purposes of this Section 13.1, "Account" also
includes a Participant's account in all other defined
contribution plans currently or previously maintained
by any Related Company. The Plan Year refers to the
year to which the allocation pertains, regardless of
when it was allocated. The Plan Year shall be the
Code section 415 limitation year.
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under
this Plan and any other defined contribution plan
maintained by any Related Company for any Plan Year
shall not exceed the lesser of (1) 25% of his or her
Taxable Income or (2) the greater of $30,000 or one-
quarter of the dollar limitation in effect under Code
section 415(b)(1)(A).
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of
any additional Contributions would produce an excess
Annual Addition for such year, Contributions to be
made for the remainder of the Plan Year shall be
limited to the amount needed for each affected
Participant to receive the maximum Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a
Participant's Account (resulting from forfeitures,
allocations, reasonable error in determining
Participant compensation or the amount of elective
contributions, or other facts and circumstances
acceptable to the Internal Revenue Service) the excess
amount (adjusted to reflect investment gains) shall
first be returned to the Participant to the extent of
his or her unmatched Associate Pre-Tax Contributions
and then to the extent of his or her matched Associate
Pre-Tax Contributions (however to the extent Associate
Pre-Tax Contributions were matched, the applicable
Company Matching Contributions shall be forfeited in
proportion to the returned matched Associate Pre-Tax
Contributions) and the remaining excess, if any, shall
be forfeited by the Participant and together with
forfeited Company Matching Contributions used to
reduce subsequent Contributions as soon as is
administratively feasible.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an
excess Annual Addition, received allocations to more
than one defined contribution plan, the excess shall
be corrected by reducing the Annual Addition to this
Plan only after all possible reductions have been made
to the other defined contribution plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator
is the "projected annual benefit" and the denominator
is the greater of 125% of the "protected current
accrued benefit" or the normal limit which is the
lesser of (1) 125% of the maximum dollar limitation
provided under Code section 415(b)(1)(A) for the Plan
Year or (2) 140% of the amount which may be taken into
account under Code section 415(b)(1)(B) for the Plan
Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit
provided by the Plan determined pursuant to Code
section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined
benefit plan in existence (1) on July 1, 1982,
shall be the accrued annual benefit provided for
under Public Law 97-248, section 235(g)(4), as
amended, or (2) on May 6, 1986, shall be the
accrued annual benefit provided for under Public
Law 99-514, section 1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the
Participant's Annual Addition for each Plan Year to
date and the denominator is the sum of the "annual
amounts" for each year in which the Participant has
performed service with a Related Company. The "annual
amount" for any Plan Year is the lesser of (1) 125% of
the Code section 415(c)(1)(A) dollar limitation
(determined without regard to subsection (c)(6)) in
effect for the Plan Year and (2) 140% of the Code
section 415(c)(1)(B) amount in effect for the Plan
Year, where:
(a) each Annual Addition is determined pursuant to
the Code section 415(c) rules in effect for such
Plan Year, and
(b) the numerator is adjusted pursuant to Public Law
97-248, section 235(g)(3), as amended, or Public
Law 99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
If a Participant has also participated in a defined
benefit plan maintained by a Related Company, the sum
of the Defined Benefit Fraction and the Defined
Contribution Fraction for any Plan Year may not exceed
1.0. If the combined fraction exceeds 1.0 for any
Plan Year, the Participant's benefit under any defined
benefit plan (to the extent it has not been
distributed or used to purchase an annuity contract)
shall be limited so that the combined fraction does
not exceed 1.0 before any defined contribution limits
will be enforced.
14 TOP HEAVY RULES
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have
the following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of
each qualified plan of an Employer (and its
Related Companies) (1) in which a Key Employee is
a participant or was a participant during the
determination period (regardless of whether such
plan has terminated), or (2) which enables
another plan in the group to meet the
requirements of Code sections 401(a)(4) or
410(b). The Employer may also treat any other
qualified plan as part of the group if the group
would continue to meet the requirements of Code
sections 401(a)(4) and 410(b) with such plan
being taken into account.
(b) "Determination Date". The last Trade Date of the
preceding Plan Year or, in the case of the Plan's
first year, the last Trade Date of the first Plan
Year.
(c) "Key Employee". A current or former Associate
(or his or her Beneficiary) who at any time
during the five year period ending on the
Determination Date was:
(1) an officer of a Related Company whose
Compensation (i) exceeds 50% of the amount
in effect under Code section 415(b)(1)(A)
and (ii) places him within the following
highest paid group of officers:
Number of
Associates
not Excluded Under Number of
Code Highest Paid
Section 414(q)(8) Officers Included
Less than 30 3
30 to 500 10% of the number
of
Associates not
excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation
exceeds $150,000, or
(4) a more than 0.5% Owner who is among the 10
Associates owning the largest interest in a
Related Company and whose Compensation
exceeds the amount in effect under Code
section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination
Date of (1) an Associate's Account, (2) the
present value of his or her other accrued
benefits provided by all qualified plans within
the Aggregation Group, and (3) the aggregate
distributions made within the five year period
ending on such date. Plan Benefits shall exclude
rollover contributions and plan to plan transfers
made after December 31, 1983 which are both
associate initiated and from a plan maintained by
a non-related employer.
(e) "Top Heavy". The Plan's status when the Plan
Benefits of Key Employees account for more than
60% of the Plan Benefits of all Associates who
have performed services at any time during the
five year period ending on the Determination
Date. The Plan Benefits of Associates who were,
but are no longer, Key Employees (because they
have not been an officer or Owner during the five
year period), are excluded in the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan
Year in which the Plan is Top Heavy, the Employer
shall not allow any contributions (other than a
Rollover Contribution) to be made by or on behalf
of any Key Employee unless the Employer makes a
contribution (other than Associate Pre-Tax and
Company Matching Contributions) on behalf of all
Participants who were Eligible Associates as of
the last day of the Plan Year in an amount equal
to at least 3% of each such Participant's Taxable
Income. The Administrator shall remove any such
contributions (including applicable investment
gain or loss) credited to a Key Employee's
Account in violation of the foregoing rule and
return them to the Employer or Associate to the
extent permitted by the Limited Return of
Contributions paragraph of Section 18.
(b) Overriding Minimum Benefit. Notwithstanding,
contributions shall be permitted on behalf of Key
Employees if the Employer also maintains a
defined benefit plan which automatically provides
a benefit which satisfies the Code section
416(c)(1) minimum benefit requirements, including
the adjustment provided in Code section
416(h)(2)(A), if applicable. If this Plan is
part of an aggregation group in which a Key
Associate is receiving a benefit and no minimum
is provided in any other plan, a minimum
contribution of at least 3% of Taxable Income
shall be provided to the Participants specified
in the preceding paragraph. In addition, the
Employer may offset a defined benefit minimum by
contributions (other than Associate Pre-Tax and
Company Matching Contributions) made to this
Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy,
100% shall be substituted for 125% in determining the
Defined Benefit Fraction and the Defined Contribution
Fraction.
15 PLAN ADMINISTRATION
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the
Administrator, the Committee and/or the Trustee, as
applicable, whose specific duties are delineated in
this Plan and Trust. In addition, Plan fiduciaries
also include any other person to whom fiduciary duties
or responsibility is delegated with respect to the
Plan. Any person or group may serve in more than one
fiduciary capacity with respect to the Plan. To the
extent permitted under ERISA section 405, no fiduciary
shall be liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with
this Plan and Trust to the extent they are
consistent with ERISA;
(b) use that degree of care, skill, prudence and
diligence 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;
(c) act with the exclusive purpose of providing
benefits to Participants and their Beneficiaries,
and defraying reasonable expenses of
administering the Plan;
(d) diversify Plan investments, to the extent such
fiduciary is responsible for directing the
investment of Plan assets, so as to minimize the
risk of large losses, unless under the
circumstances it is clearly prudent not to do so;
and
(e) treat similarly situated Participants and
Beneficiaries in a uniform and nondiscriminatory
manner.
15.3 Company is ERISA Plan Administrator
The Company is the plan administrator, within the
meaning of ERISA section 3(16), which is responsible
for compliance with all reporting and disclosure
requirements, except those that are explicitly the
responsibility of the Trustee under applicable law.
The Administrator and/or Committee shall have any
necessary authority to carry out such functions
through the actions of the Administrator, duly
appointed officers of the Company, and/or the
Committee.
15.4 Administrator Duties
The Administrator shall have the discretionary
authority to construe this Plan and Trust, other than
the provisions which relate to the Trustee, and to do
all things necessary or convenient to effect the
intent and purposes thereof, whether or not such
powers are specifically set forth in this Plan and
Trust. Actions taken in good faith by the
Administrator shall be conclusive and binding on all
interested parties, and shall be given the maximum
possible deference allowed by law. In addition to the
duties listed elsewhere in this Plan and Trust, the
Administrator's authority shall include, but not be
limited to, the discretionary authority to:
(a) determine who is eligible to participate, if a
contribution qualifies as a rollover
contribution, the allocation of Contributions,
and the eligibility for loans, withdrawals and
distributions;
(b) determine what fees are to be charged to each
Participant's Account including the fees
described in Appendix B;
(c) provide each Participant with a summary plan
description no later than 90 days after he or she
has become a Participant (or such other period
permitted under ERISA section 104(b)(1)), as well
as informing each Participant of any material
modification to the Plan in a timely manner;
(d) make a copy of the following documents available
to Participants during normal work hours: this
Plan and Trust (including subsequent amendments),
all annual and interim reports of the Trustee
related to the entire Plan, the latest annual
report and the summary plan description;
(e) determine the fact of a Participant's death and
of any Beneficiary's right to receive the
deceased Participant's interest based upon such
proof and evidence as it deems necessary;
(f) establish and review at least annually a funding
policy bearing in mind both the short-run and
long-run needs and goals of the Plan. To the
extent Participants may direct their own
investments, the funding policy shall focus on
which Investment Funds are available for
Participants to use; and
(g) adjudicate claims pursuant to the claims
procedure described in Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors
(including attorneys, accountants, actuaries,
consultants, record keepers, investment counsel and
administrative assistants) as it considers necessary
to assist it in the performance of its duties. The
Administrator shall also comply with the bonding
requirements of ERISA section 412.
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, may appoint
a Committee to administer the Plan on its behalf. The
Company or the Committee, on the Company's behalf, may
retain a Plan Administrator to assist it in
performance of some or all of the Committee's
administrative duties. The Plan Administrator shall
carry on such duties as directed by the Company or the
Committee.
The Company shall provide the Trustee with the names
and specimen signatures of any persons authorized to
serve as Committee members, or as Plan Administrator,
and act as or on its behalf. Any Committee member
appointed by the Company shall serve at the pleasure
of the Company, but may resign by written notice to
the Company. Committee members shall serve without
compensation from the Plan for such services. Except
to the extent that the Company otherwise provides, any
delegation of duties to a Committee shall carry with
it the full discretionary authority of the
Administrator to complete such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the
Company to the Committee may be done by a
majority of its members. The majority may be
expressed by a vote at a meeting or in writing
without a meeting, and a majority action shall be
equivalent to an action of all Committee members.
(b) Meetings. The Committee shall hold meetings upon
such notice, place and times as it determines
necessary to conduct its functions properly.
Meetings may be held by telephone conference call
so long as all persons participating in the
meeting can hear each other.
(c) Reliance by Trustee. The Committee may authorize
one or more of its members to execute documents
on its behalf and may authorize one or more of
its members or other individuals who are not
members to give written direction to the Trustee
in the performance of its duties. The Committee
shall provide such authorization in writing to
the Trustee with the name and specimen signatures
of any person authorized to act on its behalf.
The Trustee shall accept such direction and rely
upon it until notified in writing that the
Committee has revoked the authorization to give
such direction. The Trustee shall not be deemed
to be on notice of any change in the membership
of the Committee, parties authorized to direct
the Trustee in the performance of its duties, or
the duties delegated to and by the Committee
until notified in writing.
16 MANAGEMENT OF INVESTMENTS
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust,
in accordance with those provisions of this Plan and
Trust which relate to the Trustee, for use in
providing Plan benefits and paying Plan expenses not
paid directly by the Employer. Plan benefits will be
drawn solely from the Trust and paid by the Trustee as
directed by the Administrator. Notwithstanding, the
Administrator may appoint, with the approval of the
Trustee, another trustee to hold and administer Plan
assets which do not meet the requirements of Section
16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to
direct the Trustee to invest Trust assets in one or
more Investment Funds. The number and composition of
Investment Funds may be changed from time to time, in
writing, without the necessity of amending this Plan
and Trust document. The Trustee may establish
reasonable limits on the number of Investment Funds as
well as the acceptable assets for any such Investment
Fund. Each of the Investment Funds may be comprised
of any of the following:
(a) shares of a registered investment company,
whether or not the Trustee or any of its
affiliates is an advisor to, or other service
provider to, such company;
(b) collective investment funds maintained by the
Trustee, or any other fiduciary to the Plan,
which are available for investment by trusts
which are qualified under Code sections 401(a)
and 501(a);
(c) individual equity and fixed income securities
which are readily tradeable on the open market;
(d) guaranteed investment contracts issued by a bank
or insurance company;
(e) interest bearing deposits of the Trustee; and
(f) Company Stock.
Any Investment Fund assets invested in a collective
investment fund, shall be subject to all the
provisions of the instruments establishing and
governing such fund. These instruments, including any
subsequent amendments, are incorporated herein by
reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the
investment manager of each Investment Fund to maintain
sufficient deposit or money market type assets in each
Investment Fund to handle the Fund's liquidity and
disbursement needs. Each Participant's and
Beneficiary's Sweep Account, which is used to hold
assets pending investment or disbursement, shall
consist of interest bearing deposits of the Trustee.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest
assets in the Investment Funds as soon as practicable
after such instructions are received from the
Administrator, Participants, or Beneficiaries. Such
instructions shall remain in effect until changed by
the Administrator, Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment
Company Shares
The Administrator shall be entitled to vote proxies or
exercise any shareholder rights relating to shares
held on behalf of the Plan in a registered investment
company. Notwithstanding, the authority to vote
proxies and exercise shareholder rights related to
such shares held in a Custom Fund is governed by
Section 16.6 hereof.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of
the Trustee, an investment manager for any Investment
Fund established by the Trustee solely for
Participants of this Plan (a "Custom Fund"). The
investment manager may be the Administrator, Trustee
or an investment manager pursuant to ERISA section
3(38). The Administrator shall advise the Trustee in
writing of the appointment of an investment manager
and shall cause the investment manager to acknowledge
to the Trustee in writing that the investment manager
is a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to
the Trustee, shall be established for a Custom
Fund. If a Custom Fund consists solely of
collective investment funds or shares of a
registered investment company (and sufficient
deposit or money market type assets to handle the
Fund's liquidity and disbursement needs), its
underlying instruments shall constitute the
guidelines.
(b) Authority of Investment Manager. The investment
manager of a Custom Fund shall have the authority
to vote or execute proxies, exercise shareholder
rights, manage, acquire, and dispose of Trust
assets. Notwithstanding, the authority to vote
proxies and exercise shareholder rights related
to shares of Company Stock held in a Custom Fund
is governed by Section 16.9 hereof.
(c) Custody and Trade Settlement. Unless otherwise
agreed to by the Trustee, the Trustee shall
maintain custody of all Custom Fund assets and be
responsible for the settlement of all Custom Fund
trades. For purposes of this section, shares of
a collective investment fund, shares of a
registered investment company and guaranteed
investment contracts issued by a bank or
insurance company, shall be regarded as the
Custom Fund assets instead of the underlying
assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated
to invest or otherwise manage any Custom Fund
assets for which the Trustee or Administrator is
not the investment manager nor shall the
Administrator or Trustee be liable for acts or
omissions with regard to the investment of such
assets except to the extent required by ERISA.
16.7 Authority to Segregate Assets
The Company may direct the Trustee to split an
Investment Fund into two or more funds in the event
any assets in the Fund are illiquid or the value is
not readily determinable. In the event of such
segregation, the Company shall give instructions to
the Trustee on what value to use for the split-off
assets, and the Trustee shall not be responsible for
confirming such value.
16.8 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund
directly or through a Master Company Stock Fund the
Fund shall be comprised of Company Stock and
sufficient deposit or money market type assets to
handle the Fund's liquidity and disbursement needs.
The Fund may be as large as necessary to comply with
Participants' and Beneficiaries' investment elections
as well as the total investment of Participants' and
Beneficiaries' Company Matching Accounts.
16.9 Participants Have Right to Vote and Tender Company
Stock
Each Participant or Beneficiary shall be entitled to
instruct the Trustee as to the voting or tendering of
any full or partial shares of Company Stock held on
his or her behalf in the Company Stock Fund. Prior to
such voting or tendering of Company Stock, each
Participant or Beneficiary shall receive a copy of the
proxy solicitation or other material relating to such
vote or tender decision and a blank form for the
Participant or Beneficiary to complete which
confidentially instructs the Trustee to vote or tender
such shares in the manner indicated by the Participant
or Beneficiary. Upon receipt of such instructions,
the Trustee shall act with respect to such shares as
instructed. The Administrator shall instruct the
Trustee with respect to how to vote or tender any
shares for which instructions are not received from
Participants or Beneficiaries.
16.10 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining
the applicability (and, if applicable, complying with)
the requirements of the Securities Act of 1933, as
amended, the California Corporate Securities Law of
1968, as amended, and any other applicable blue sky
law. The Administrator shall also specify what
restrictive legend or transfer restriction, if any, is
required to be set forth on the certificates for the
securities and the procedure to be followed by the
Trustee to effectuate a resale of such securities.
16.11 Master Company Stock Fund
The Trustee may establish, at the direction of the
Company, a single Company Stock Investment Fund (the
"Master Company Stock Fund"), for the benefit of this
Plan and any other plan of a Related Company for which
the Trustee acts as trustee pursuant to a plan and
trust document that contains a provision substantially
identical to this Section 16.11. The assets of this
Plan, to the extent invested in the Master Company
Stock Fund, shall consist only of that percentage of
the assets of the Master Company Stock Fund
represented by the shares held by this Plan.
17 TRUST ADMINISTRATION
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to
construe those provisions of this Plan and Trust which
relate to the Trustee and to do all things necessary
or convenient to the administration of the Trust,
whether or not such powers are specifically set forth
in this Plan and Trust. Actions taken in good faith
by the Trustee shall be conclusive and binding on all
interested parties, and shall be given the maximum
possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set
forth in this Plan and Trust, the Trustee shall have
all the power, authority, rights and privileges of an
absolute owner of the Trust assets and, not in
limitation but in amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell,
tender, exchange, dispose of, encumber,
hypothecate, pledge, mortgage, lease, grant
options respecting, repair, alter, insure, or
distribute any and all property in the Trust;
(b) borrow money, participate in reorganizations, pay
calls and assessments, vote or execute proxies
(subject to Section 16), exercise subscription or
conversion privileges, exercise options and
register any securities in the Trust in the name
of the nominee, in federal book entry form or in
any other form as will permit title thereto to
pass by delivery;
(c) renew, extend the due date, compromise,
arbitrate, adjust, settle, enforce or foreclose,
by judicial proceedings or otherwise, or defend
against the same, any obligations or claims in
favor of or against the Trust; and
(d) lend, through a collective investment fund, any
securities held in such collective investment
fund to brokers, dealers or other borrowers and
to permit such securities to be transferred into
the name and custody and be voted by the borrower
or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of
ownership of any Trust assets outside the jurisdiction
of the United States, except as authorized by ERISA
section 404(b).
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and
withhold federal (and, if applicable, state)
income taxes with regard to any Eligible Rollover
Distribution that is not paid as a Direct
Rollover in accordance with the Participant's
withholding election or as required by law if no
election is made or the election is less than the
amount required by law. With regard to any
taxable distribution that is not an Eligible
Rollover Distribution, the Trustee shall
calculate and withhold federal (and, if
applicable, state) income taxes in accordance
with the Participant's withholding election or as
required by law if no election is made.
(b) Taxes Due From Investment Funds. The Trustee
shall pay from the Investment Fund any taxes or
assessments imposed by any taxing or governmental
authority on such Fund or its income, including
related interest and penalties.
17.5 Trustee Duties and Limitations
Unless otherwise agreed to by the Trustee, the
Trustee's duties shall be confined to construing the
terms of the Plan and Trust as they relate to the
Trustee, receiving funds on behalf of and making
payments from the Trust, safeguarding and valuing
Trust assets, and investing and reinvesting Trust
assets in the Investment Funds as directed by the
Administrator or Participants. The Trustee shall have
no duty or authority to ascertain whether
Contributions are in compliance with the Plan, to
enforce collection or to compute or verify the
accuracy or adequacy of any amount to be paid to it by
the Employer. The Trustee shall not be liable for the
proper application of any part of the Trust with
respect to any disbursement made at the direction of
the Administrator.
17.6 Trust Accounting
(a) Annual Report. Within 60 days (or other
reasonable period) following the close of the
Plan Year, the Trustee shall provide the
Administrator with an annual accounting of Trust
assets and information to assist the
Administrator in meeting ERISA's annual reporting
and audit requirements.
(b) Periodic Reports. The Trustee shall maintain
records and provide sufficient reporting to allow
the Administrator to properly monitor the Trust's
assets and activity.
(c) Administrator Approval. Approval of any Trustee
accounting will automatically occur 90 days after
such accounting has been received by the
Administrator, unless the Administrator files a
written objection with the Trustee within such
time period. Such approval shall be final as to
all matters and transactions stated or shown
therein and binding upon the Administrator.
17.7 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset
which is not readily tradable and listed on a national
securities and is exchange registered under the
Securities Exchange Act of 1934, as amended, the
Trustee may engage a qualified independent appraiser
to determine the fair market value of such property,
and the appraisal fees shall be paid from the
Investment Fund containing the asset.
17.8 Legal Counsel
The Trustee may consult with legal counsel of its
choice, including counsel for the Employer or counsel
of the Trustee, upon any question or matter arising
under this Plan and Trust. When relied upon by the
Trustee, the opinion of such counsel shall be evidence
that the Trustee has acted in good faith.
17.9 Fees and Expenses
The Trustee's fees for its services as Trustee shall
be such as may be mutually agreed upon by the Company
and the Trustee. Trustee fees and all reasonable
expenses of counsel and advisors retained by the
Trustee shall be paid in accordance with Section 6.
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any
Associate. The Employer expressly reserves the right
to discharge an Associate at any time, with or without
cause, without regard to the effect such discharge
would have upon the Associate's interest in the Plan.
18.2 Limited Return of Contributions
Except as provided in this paragraph, (1) Plan assets
shall not revert to the Employer nor be diverted for
any purpose other than the exclusive benefit of
Participants or their Beneficiaries; and (2) a
Participant's vested interest shall not be subject to
divestment. As provided in ERISA section 403(c)(2),
the actual amount of a Contribution made by the
Employer (or the current value of the Contribution if
a net loss has occurred) may revert to the Employer
if:
(a) such Contribution is made by reason of a mistake
of fact;
(b) initial qualification of the Plan under Code
section 401(a) is not received and a request for
such qualification is made within the time
prescribed under Code section 401(b) (the
existence of and Contributions under the Plan are
hereby conditioned upon such qualification); or
(c) such Contribution is not deductible under Code
section 404 (such Contributions are hereby
conditioned upon such deductibility) in the
taxable year of the Employer for which the
Contribution is made.
The reversion to the Employer must be made (if at all)
within one year of the mistaken payment of the
Contribution, the date of denial of qualification, or
the date of disallowance of deduction, as the case may
be. A Participant shall have no rights under the Plan
with respect to any such reversion.
18.3 Assignment and Alienation
As provided by Code section 401(a)(13) and to the
extent not otherwise required by law, no benefit
provided by the Plan may be anticipated, assigned or
alienated, except:
(a) to create, assign or recognize a right to any
benefit with respect to a Participant pursuant to
a QDRO, or
(b) to use a Participant's vested Account balance as
security for a loan from the Plan which is
permitted pursuant to Code section 4975.
18.4 Facility of Payment
If a Plan benefit is due to be paid to a minor or if
the Administrator reasonably believes that any payee
is legally incapable of giving a valid receipt and
discharge for any payment due him or her, the
Administrator shall have the payment of the benefit,
or any part thereof, made to the person (or persons or
institution) whom it reasonably believes is caring for
or supporting the payee, unless it has received due
notice of claim therefor from a duly appointed
guardian or conservator of the payee. Any payment
shall to the extent thereof, be a complete discharge
of any liability under the Plan to the payee.
18.5 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled
to payment of a Plan benefit after a reasonable
search, the Administrator may at any time thereafter
treat such person's Account as forfeited and use such
amount to reduce subsequent Contributions as soon as
administratively feasible or as otherwise provided in
Section 8. If such person subsequently presents the
Administrator with a valid claim for the benefit, such
person shall be paid the amount treated as forfeited,
plus the interest that would have been earned in the
Sweep Account to the date of determination. The
Administrator shall pay the amount through an
additional Employer Contribution or direct the Trustee
to pay the amount from the Forfeiture Account.
18.6 Claims Procedure
(a) Right to Make Claim. An interested party who
disagrees with the Administrator's determination
of his or her right to Plan benefits must submit
a written claim and exhaust this claim procedure
before legal recourse of any type is sought. The
claim must include the important issues the
interested party believes support the claim. The
Administrator, pursuant to the authority provided
in this Plan, shall either approve or deny the
claim.
(b) Process for Denying a Claim. The Administrator's
partial or complete denial of an initial claim
must include an understandable, written response
covering (1) the specific reasons why the claim
is being denied (with reference to the pertinent
Plan provisions) and (2) the steps necessary to
perfect the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The
interested party may make a written appeal of the
Administrator's initial decision, and the
Administrator shall respond in the same manner
and form as prescribed for denying a claim
initially.
If the interested party does not make an appeal
within a period of six months after the
Administrator's final decision, the interested
party shall be conclusively presumed to have
accepted as final and binding the final decision
of the Administrator on his or her claim.
(d) Time Frame. The initial claim, its review,
appeal and final review shall be made in a timely
fashion, subject to the following time table:
Days to Respond
Action From Last Action
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice
the maximum response time for its initial and
final review if it provides an explanation within
the normal period of why an extension is needed
and when its decision will be forthcoming.
18.7 Construction
Headings are included for reading convenience. The
text shall control if any ambiguity or inconsistency
exists between the headings and the text. The
singular and plural shall be interchanged wherever
appropriate. References to Participant shall include
Beneficiary when appropriate and even if not otherwise
already expressly stated.
18.8 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and
administered under ERISA and other applicable federal
laws and, where not otherwise preempted, by the laws
of the State of California. If any provision of this
Plan and Trust shall become invalid or unenforceable,
that fact shall not affect the validity or
enforceability of any other provision of this Plan and
Trust. All provisions of this Plan and Trust shall be
so construed as to render them valid and enforceable
in accordance with their intent.
18.9 Indemnification by Employer
The Employers hereby agree to indemnify all Plan
fiduciaries against any and all liabilities resulting
from any action or inaction, (including a Plan
termination in which the Company fails to apply for a
favorable determination from the Internal Revenue
Service with respect to the qualification of the Plan
upon its termination), in relation to the Plan or
Trust (1) including (without limitation) expenses
reasonably incurred in the defense of any claim
relating to the Plan or its assets, and amounts paid
in any settlement relating to the Plan or its assets,
but (2) excluding liability resulting from actions or
inactions made in bad faith, or resulting from the
negligence or willful misconduct of the Trustee. The
Company shall have the right, but not the obligation,
to conduct the defense of any action to which this
Section applies. The Plan fiduciaries are not
entitled to indemnity from the Plan assets relating to
any such action.
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
19.1 Amendment
The Company reserves the right to amend this Plan and
Trust at any time, to any extent and in any manner it
may deem necessary or appropriate. The Company (and
not the Trustee) shall be responsible for adopting any
amendments necessary to maintain the qualified status
of this Plan and Trust under Code sections 401(a) and
501(a). If the Committee is acting as the
Administrator in accordance with Section 15.6, it
shall have the authority to adopt Plan and Trust
amendments which have no substantial adverse financial
impact upon any Employer or the Plan. All interested
parties shall be bound by any amendment, provided that
no amendment shall:
(a) become effective unless it has been adopted in
accordance with the procedures set forth in
Section 19.5;
(b) except to the extent permissible under ERISA and
the Code, make it possible for any portion of the
Trust assets to revert to an Employer or to be
used for, or diverted to, any purpose other than
for the exclusive benefit of Participants and
Beneficiaries entitled to Plan benefits and to
defray reasonable expenses of administering the
Plan;
(c) decrease the rights of any Associate to benefits
accrued (including the elimination of optional
forms of benefits) to the date on which the
amendment is adopted, or if later, the date upon
which the amendment becomes effective, except to
the extent permitted under ERISA and the Code;
nor
(d) permit an Associate to be paid the balance of his
or her Associate Pre-Tax Account unless the
payment would otherwise be permitted under Code
section 401(k).
19.2 Merger
This Plan and Trust may not be merged or consolidated
with, nor may its assets or liabilities be transferred
to, another plan unless each Participant and
Beneficiary would, if the resulting plan were then
terminated, receive a benefit just after the merger,
consolidation or transfer which is at least equal to
the benefit which would be received if either plan had
terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a
corporation of: (1) substantially all of the
Employer's assets used in a trade or business to an
unrelated corporation, or (2) a sale of such
Employer's interest in a subsidiary to an unrelated
entity or individual, lump sum distributions shall be
permitted from the Plan, except as provided below, to
Participants with respect to Employees who continue
employment with the corporation acquiring such assets
or who continue employment with such subsidiary, as
applicable.
Notwithstanding, distributions shall not be permitted
if the purchaser agrees, in connection with the sale,
to be substituted as the Company as the sponsor of the
Plan or to accept a transfer of the assets and
liabilities representing the Participants' benefits
into a plan of the purchaser or a plan to be
established by the purchaser.
19.4 Plan Termination
The Company may, at any time and for any reason,
terminate the Plan in accordance with the procedures
set forth in Section 19.5, or completely discontinue
contributions. Upon either of these events, or in the
event of a partial termination of the Plan within the
meaning of Code section 411(d)(3), the Accounts of
each affected Associate who has not yet incurred a
Break in Service shall be fully vested. If no
successor plan is established or maintained, lump sum
distributions will be made in accordance with the
terms of the Plan as in effect at the time of the
Plan's termination or as thereafter amended provided
that a post-termination amendment will not be
effective to the extent that it violates Section 19.1
unless it is required in order to maintain the
qualified status of the Plan upon its termination.
The Trustee's and Employer's authority shall continue
beyond the Plan's termination date until all Trust
assets have been liquidated and distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the
adoption of any amendment or termination (a "Change")
of this Plan and Trust:
(a) The Company may adopt any Change by action of its
board of directors in accordance with its normal
procedures.
(b) The Committee, if acting as Administrator in
accordance with Section 15.6, may adopt any
amendment within the scope of its authority
provided under Section 19.1 and in the manner
specified in Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and
(2) signed and dated by an officer of the Company
or, in the case of an amendment adopted by the
Committee, at least one of its members.
(d) If the effective date of any Change is not
specified in the document setting forth the
Change, it shall be effective as of the date it
is signed by the last person whose signature is
required under clause (2) above, except to the
extent that another effective date is necessary
to maintain the qualified status of this Plan and
Trust under Code sections 401(a) and 501(a).
(e) No Change shall become effective until it is
accepted and signed by the Trustee (which
acceptance shall not unreasonably be withheld).
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason,
terminate its Plan participation by action of its
board of directors in accordance with its normal
procedures. Written notice of such action shall be
signed and dated by an officer of the Employer and
delivered to the Company. If the effective date of
such action is not specified, it shall be effective
on, or as soon as reasonably practicable, after the
date of delivery. Upon the Employer's request, the
Company may instruct the Trustee and Administrator to
spin off all affected Accounts and underlying assets
into a separate qualified plan under which the
Employer shall assume the powers and duties of the
Company. Alternatively, the Company may treat the
event as a partial termination described above or
continue to maintain the Accounts under the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and
Trust or may be removed by the Company at any time
upon at least 90 days written notice (or less if
agreed to by both parties). In such event, the
Company shall appoint a successor trustee by the end
of the notice period. The successor trustee shall
then succeed to all the powers and duties of the
Trustee under this Plan and Trust. If no successor
trustee has been named by the end of the notice
period, the Company's chief executive officer shall
become the trustee, or if he or she declines, the
Trustee may petition the court for the appointment of
a successor trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as is administratively
feasible after its resignation or removal as
Trustee, the Trustee shall transfer to the
successor trustee all property currently held by
the Trust. However, the Trustee is authorized to
reserve such sum of money as it may deem
advisable for payment of its accounts and
expenses in connection with the settlement of its
accounts or other fees or expenses payable by the
Trust. Any balance remaining after payment of
such fees and expenses shall be paid to the
successor trustee.
(b) Final Accounting. The Trustee shall provide a
final accounting to the Administrator within 90
days of the date Trust assets are transferred to
the successor trustee.
(c) Administrator Approval. Approval of the final
accounting will automatically occur 90 days after
such accounting has been received by the
Administrator, unless the Administrator files a
written objection with the Trustee within such
time period. Such approval shall be final as to
all matters and transactions stated or shown
therein and binding upon the Administrator.
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered to Participants and
Beneficiaries as of the Effective Date include this set of
daily valued funds:
Category Funds
Money Market Money Market
Income U.S. Treasury Allocation
Balanced Asset Allocation
Equity Company Stock
S&P 500 Stock
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the
Money Market Fund.
III. Contribution Accounts For Which Investment is Restricted
A Participant or Beneficiary may direct the investment of
his or her entire Account except for the following
Contribution Accounts, and except as otherwise provided in
Section 7, which shall be invested as of the Effective Date
as follows:
Company Matching Company Stock Fund
Balances in the Company Matching Account are not eligible
for transfer to other Investment Funds. However, every two
years on a date to be determined by the Administrator,
Participant balances in the Company Matching Account will be
released automatically from the transfer restrictions and
become eligible for transfer to other Investment Funds.
IV. Maximum Percentage Restrictions Applicable to Certain
Investment Funds
As of the Effective Date, there are no maximum percentage
restrictions applicable to any Investment Funds.
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall
be as follows:
1) Investment Management Fees: These are paid by Participants
in that management fees reduce the investment return
reported and credited to Participants, except that the
Employer shall pay the fees related to the Company Stock
Fund.
2) Recordkeeping Fees: These are paid by the Employer.
3) Loan Fees: A $3.50 per month fee is assessed and
billed/collected quarterly from the Account of each
Participant who has an outstanding loan balance.
4) Recurring Payment Fees: These are paid by the Employer on a
quarterly basis.
5) Additional Fees Paid by Employer: All other Plan related
fees and expenses, including the compensation of a Plan
Administrator, if applicable, shall be paid by the Employer.
To the extent that the Administrator later elects that any
such fees shall be borne by Participants, estimates of the
fees shall be determined and reconciled, at least annually,
and the fees will be assessed monthly and billed/collected
from Accounts quarterly.
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on
Participant loans shall be equal to the Trustee's prime rate,
plus 1%.
