Registration No. 333-______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________
Hein-Werner Corporation
(Exact name of registrant as specified in its charter)
Wisconsin 39-0340430
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2120 Pewaukee Road
Waukesha, Wisconsin 53188-2404
(Address of principal executive offices) (Zip Code)
Hein-Werner Retirement and Savings Plan and Trust
(Full title of the plan)
Joseph L. Dindorf Copy to:
President and Chief Executive Officer Maurice J. McSweeney
Hein-Werner Corporation Foley & Lardner
2120 Pewaukee Road 777 East Wisconsin Avenue
Waukesha, Wisconsin 53188 Milwaukee, Wisconsin 53202
(414) 542-6611 (414) 271-2400
(Name, address and telephone number,
including area code, of agent for service)
__________________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be to be Price Offering Registration
Registered Registered(1) Per Share Price Fee
------------------------------------------------------------------------
Common Stock,
$1.00 par value,
with attached 100,000
Common Stock shares and
Purchase Rights rights $7.375 (2) $737,500 (2) $217.57
------------------------------------------------------------------------
(1) Each share of Hein-Werner Corporation Common Stock issued will have
attached thereto one Common Stock Purchase Right.
(2) Estimated pursuant to Rule 457(c) and (h) under the Securities Act
of 1933 solely for the purpose of calculating the registration fee
based on the average of the high and low prices for Hein-Werner
Corporation Common Stock on the American Stock Exchange on March
23, 1998. The value attributable to the Common Stock Purchase
Rights is reflected in the price of the Common Stock.
_________________________________
In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified in
Part I are not required to be filed with the Securities and Exchange
Commission (the "Commission") as part of this Form S-8 Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Hein-Werner Corporation (the
"Company") or the Hein-Werner Retirement and Savings Plan and Trust (the
"Plan") with the Commission are hereby incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, filed on March 25, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 29, June 28 and September 27, 1997, filed on May 13, August 12
and November 12, 1997, respectively.
3. The Company's Current Reports on Form 8-K dated April 9, May
29 and August 28, 1997.
4. The description of the Company's Common Stock contained in
Item 1 of the Company's Registration Statement on Form 8-A, dated July 31,
1978, including any amendment or report filed for the purpose of updating
such description.
5. The description of the Company's Common Stock Purchase Rights
contained in Item 1 of the Company's Registration Statement on Form 8-A,
dated May 19, 1989, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, after the date of filing of this Registration
Statement and prior to such time as the Company files a post-effective
amendment to this Registration Statement which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Pursuant to the Wisconsin Business Corporation Law and the
Company's By-laws, directors and officers of the Company are entitled to
mandatory indemnification from the Company against certain liabilities and
expenses (i) to the extent such officers or directors are successful in
the defense of a proceeding and (ii) in proceedings in which the director
or officer is not successful in defense thereof, unless it is determined
that the director or officer breached or failed to perform his or her
duties to the Company and such breach or failure constituted: (a) a
willful failure to deal fairly with the Company or its shareowners in
connection with a matter in which the director or officer had a material
conflict of interest; (b) a violation of the criminal law unless the
director or officer had reasonable cause to believe his or her conduct was
lawful or had no reasonable cause to believe his or her conduct was
unlawful; (c) a transaction from which the director or officer derived an
improper personal profit; or (d) willful misconduct. It should be noted
that the Wisconsin Business Corporation Law specifically states that it is
the public policy of Wisconsin to require or permit indemnification in
connection with a proceeding involving securities regulation, as described
therein, to the extent required or permitted as described above.
Additionally, under the Wisconsin Business Corporation Law, directors of
the Company are not subject to personal liability to the Company, its
shareowners or any person asserting rights on behalf thereof for certain
breaches or failures to perform any duty resulting solely from their
status as directors except in circumstances paralleling those in
subparagraphs (a) through (d) outlined above.
The indemnification provided by the Wisconsin Business Corporation
Law and the Company's By-laws is not exclusive of any other rights to
which a director or officer may be entitled. The general effect of the
foregoing provisions may be to reduce the circumstances under which an
officer or director may be required to bear the economic burden of the
foregoing liabilities and expenses.
The Company maintains a liability insurance policy for its
directors and officers as permitted by Wisconsin law which may extend to,
among other things, liability arising under the Securities Act of 1933, as
amended.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits have been filed as part of this Registration
Statement:
Exhibit No. Exhibit
(4) Hein-Werner Retirement and Savings Plan and Trust, as amended
to date
(5) Opinion of Foley & Lardner
(23.1) Consent of KPMG Peat Marwick LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit (5) hereto)
The undersigned Registrant hereby undertakes to submit the Plan, as
amended, to the Internal Revenue Service ("IRS") in a timely manner and
will make all changes required by the IRS in order to continue the
qualification of the Plan under Section 401 of the Internal Revenue Code
of 1986, as amended.
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 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.
(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
herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(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
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by 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.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act
of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Waukesha, State
of Wisconsin, on this 25th day of March, 1998.
HEIN-WERNER CORPORATION
By: /s/ Joseph L. Dindorf
Joseph L. Dindorf
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signatures Title Date
/s/ J.L. Dindorf President, Chief Executive
J.L. Dindorf Officer and Director
(Principal Executive March 25, 1998
Officer)
/s/ M.L. Kielich Corporate Controller,
M.L. Kielich Assistant Treasurer and
Assistant Secretary
(Principal Financial and March 25, 1998
Accounting Officer)
/s/ D.J. Schuetz
D.J. Schuetz Director March 25, 1998
/s/ J.S. Jones
J.S. Jones Director March 25, 1998
/s/ M.J. McSweeney
M.J. McSweeney Director March 25, 1998
O.A. Friend Director March 25, 1998
/s/ D.L. Krause
D.L. Krause Director March 25, 1998
The Plan. Pursuant to the requirements of the Securities Act of
1933, the Administrative Committee of Hein-Werner Corporation, which
administers the Plan, has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Waukesha and State of Wisconsin, on this 25th day of March, 1998.
HEIN-WERNER RETIREMENT AND
SAVINGS PLAN AND TRUST
/s/ J.L. Dindorf
J.L. Dindorf
/s/ M.J. Koons
M.J. Koons
/s/ M.L. Kielich
M.L. Kielich
The foregoing persons are all of the members of the
Administrative Committee of Hein-Werner Corporation
which is the current administrator of the Hein-
Werner Retirement and Savings Plan and Trust
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(4) Hein-Werner Retirement and Savings Plan and Trust, as
amended to date
(5) Opinion of Foley & Lardner
(23.1) Consent of KPMG Peat Marwick LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit (5)
hereto)
Exhibit (4)
WPC2501 12/09/97 GWR/MCW/meo
HEIN-WERNER RETIREMENT AND SAVINGS PLAN AND TRUST
(As Amended and Restated January 1, 1998)
<PAGE>
HEIN-WERNER RETIREMENT AND SAVINGS PLAN AND TRUST
(As Amended and Restated January 1, 1998)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Construction. . . . . . . . . . . . . . . . . . . . 4
ARTICLE II. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.01. Participation Requirements. . . . . . . . . . . . . 5
Section 2.02. Vesting Service. . . . . . . . . . . . . . . . . . . 6
Section 2.03. Transfer. . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III. CONTRIBUTIONS TO THE TRUST FUND . . . . . . . . . . . . . 8
Section 3.01. Contributions by Companies. . . . . . . . . . . . . 8
Section 3.02. Participant Deposits. . . . . . . . . . . . . . . . 9
Section 3.03. No Liability for Future Company Contributions. . . . 12
Section 3.04. Time Period for Payment of Company Contributions. . 12
Section 3.05. Funding Policy. . . . . . . . . . . . . . . . . . . 12
Section 3.06. Contribution Amounts Returnable to the Company. . . 12
Section 3.07. Special Rules Applicable to Returning Veterans. . . 13
Section 3.08. Rollovers. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV. PARTICIPANT ACCOUNTS . . . . . . . . . . . . . . . . . . . 15
Section 4.01. Establishment and Nature Thereof. . . . . . . . . . 15
Section 4.02. Allocation of Company Contributions. . . . . . . . . 15
Section 4.03. Allocation of Participant Deposits. . . . . . . . . 16
Section 4.04. Allocation of Forfeitures. . . . . . . . . . . . . . 16
Section 4.05. Allocation of Changes in Values. . . . . . . . . . . 16
Section 4.06. Direction of Investment. . . . . . . . . . . . . . . 16
Section 4.07. Annual Statement for Participants. . . . . . . . . . 17
Section 4.08. Maximum Allocation Limitations. . . . . . . . . . . 17
ARTICLE V. BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.01. Benefits Payable to Participant. . . . . . . . . . . 18
Section 5.02. Death Benefits. . . . . . . . . . . . . . . . . . . 19
Section 5.03. Form and Time of Payment. . . . . . . . . . . . . . 19
Section 5.04. Hardship Withdrawals. . . . . . . . . . . . . . . . 20
Section 5.05. Payments to Minor or Incompetent Person. . . . . . . 21
Section 5.06. Erroneous Overpayments. . . . . . . . . . . . . . . 21
ARTICLE VI. PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 22
Section 6.01. Appointment of Members. . . . . . . . . . . . . . . 22
Section 6.02. Responsibility and Authority of the Administrator. . 22
Section 6.03. Use of Professional Services. . . . . . . . . . . . 23
Section 6.04. Fees and Expenses. . . . . . . . . . . . . . . . . . 23
Section 6.05. Organization and Procedure. . . . . . . . . . . . . 23
Section 6.06. Delegation of Authority and Responsibility. . . . . 23
Section 6.07. Requirement to Furnish Information and to Use
Administrator's Forms.23
Section 6.08. Claims Procedure. . . . . . . . . . . . . . . . . . 23
Section 6.09. Agent for Service of Process. . . . . . . . . . . . 24
ARTICLE VII. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.01. Trustee Removal and/or Resignation. . . . . . . . . 25
Section 7.02. Trustee's General Powers. . . . . . . . . . . . . . 25
Section 7.03. Payments from the Trust Fund. . . . . . . . . . . . 26
Section 7.04. Trustee Accounting. . . . . . . . . . . . . . . . . 26
Section 7.05. Settlement of Trustee Accounts. . . . . . . . . . . 26
Section 7.06. Reliance on Written Communications. . . . . . . . . 27
Section 7.07. Trustee Fees and Expenses. . . . . . . . . . . . . . 27
ARTICLE VIII. INVESTMENT OF TRUST FUND . . . . . . . . . . . . . . . . 28
Section 8.01. Trustee Investment of Trust Fund. . . . . . . . . . 28
Section 8.02. Use of Trustee's Commingled Investment Funds. . . . 28
Section 8.03. Investment of Accounts. . . . . . . . . . . . . . . 28
ARTICLE IX. FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES . . . . . . 29
Section 9.01. Fiduciaries. . . . . . . . . . . . . . . . . . . . . 29
Section 9.02. Allocation of Fiduciary Responsibilities. . . . . . 29
Section 9.03. General Limitation on Liability. . . . . . . . . . . 29
Section 9.04. Responsibility for Co-Fiduciaries. . . . . . . . . . 29
Section 9.05. Multiple Fiduciary Capacities. . . . . . . . . . . . 29
ARTICLE X. AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . 30
Section 10.01. Amendment. . . . . . . . . . . . . . . . . . . . . 30
Section 10.02. Termination. . . . . . . . . . . . . . . . . . . . 30
ARTICLE XI. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 31
Section 11.01. Non-Guarantee of Continued Association or Other
Benefits. . . . . . . . . . . . . . . . . . . . . . 31
Section 11.02. Mergers, Consolidations and Transfers of
Plan Assets . . . . . . . . . . . . . . . . . . . . 31
Section 11.03. Spendthrift Clause. . . . . . . . . . . . . . . . . 31
Section 11.04. Exclusive Benefit. . . . . . . . . . . . . . . . . 31
Section 11.05. Full Satisfaction of Claims. . . . . . . . . . . . 32
Section 11.06. General Limitation on Liability. . . . . . . . . . 32
Section 11.07. Indemnification. . . . . . . . . . . . . . . . . . 32
Section 11.08. Counterparts. . . . . . . . . . . . . . . . . . . . 32
Section 11.09. Successors and Assigns. . . . . . . . . . . . . . . 32
Section 11.10. IRS Approval. . . . . . . . . . . . . . . . . . . . 32
Section 11.11. Top-Heavy Restrictions. . . . . . . . . . . . . . . 32
Section 11.12. Retroactive Effective Date. . . . . . . . . . . . . 34
Section 11.13. Direct Transfer of Eligible Rollover Distributions. 34
ARTICLE XII. TRUSTEE ACCEPTANCE . . . . . . . . . . . . . . . . . . . . 36
Section 12.01. Effective Date of Acceptance. . . . . . . . . . . . 36
<PAGE>
HEIN-WERNER RETIREMENT AND SAVINGS PLAN AND TRUST
THIS AGREEMENT, made and entered into this ____ day of December,
1997, by and between Hein-Werner Corporation, a Wisconsin corporation
(hereinafter called "Company"), and First Bank (N.A.), as Trustee of the
trust hereby continued (hereinafter called "Trustee");
W I T N E S S E T H :
WHEREAS, the Hein-Werner Retirement and Savings Plan and Trust
(hereinafter called "Plan") is currently maintained by the Company
pursuant to a document effective January 1, 1989 between the Company and
the predecessor to the Trustee; and
WHEREAS, the Company desires to amend and restate the Plan and
Trust to incorporate all amendments since its last restatement, to reflect
the appointment of the Trustee and the use of daily valuation, and to
comply with the Small Business Job Protection Act of 1996, the Taxpayer
Relief Act of 1997, and various other statutory and regulatory changes;
NOW, THEREFORE, in consideration of the promises and of the
mutual covenants herein contained, it is agreed between the Company and
the Trustee as follows:
<PAGE>
ARTICLE I. DEFINITIONS
Section 1.01. Definitions. Unless the context clearly indicates
otherwise, the following words and phrases when used herein shall have the
following respective meanings:
(a) "Affiliate" means each Company and any other corporation
which is a member of a controlled group of corporations, a group of trades
or businesses under common control or an affiliated service group, as
defined in Code Section 414(b), (c), (m) or (o), that includes a Company.
(b) "Administrator" means the Committee established and
operating pursuant to Article VI hereof.
(c) "Beneficiary" means the person, trust and/or other entity
entitled to receive benefits in the event of the Participant's death. A
Participant shall designate his Beneficiary on the form and in the manner
prescribed by the Administrator and such designation may be changed or
withdrawn by the Participant at any time. The most recent valid
designation on file with the Administrator at the time of the
Participant's death shall be the Beneficiary. Notwithstanding the
foregoing, in the event the Participant is married at the time of his
death, the Beneficiary shall be the Participant's spouse at such time
unless such spouse consented in writing to the designation of an
alternative Beneficiary after notice of the spouse's rights and such
consent was witnessed (i) by a Plan representative appointed by the
Administrator or (ii) by a notary public. In the event no valid
designation of a Beneficiary is on file with the Administrator at the date
of death or no designated Beneficiary survives him, the Participant's
spouse shall be deemed the Beneficiary; in the further event the
Participant is unmarried or his spouse does not survive him, the
Participant's estate shall be deemed to be his Beneficiary.
(d) "Board" means the Board of Directors of Hein-Werner.
(e) "Code" means the Internal Revenue Code of 1986, as
interpreted and applied by regulations and rulings issued pursuant
thereto, all as amended and in effect from time to time.
(f) "Companies" means (i) Hein-Werner, (ii) Blackhawk Collision
Repair, Inc., and (iii) any other Affiliate which is designated by the
Board and adopts the Plan by action of its board of directors.
(g) "Compensation" means the sum of the amount reflected in
Box 1 of Form W-2 (or its successor) as compensation paid by the Companies
to a Participant for a Plan Year, plus any salary reduction pursuant to
Code Sections 125 or 401(k) minus any and all reimbursements or other
expense allowances, fringe benefits (cash or noncash), deferred
compensation, and welfare benefits. Compensation earned while in an
excluded category under Section 2.01(c) hereof shall not be included as
Compensation under this Plan. The maximum annual compensation taken into
account hereunder for purposes of calculating any Participant's accrued
benefit (including the right to any optional benefit) and for all other
purposes under the Plan shall be $160,000 or such higher amount permitted
pursuant to Code 401(a)(17).
(h) "Deposits" means amounts designated by Participants
pursuant to Section 3.02 hereof which are contributed by the Companies in
lieu of payment of an equal amount to the Participants as compensation.
(i) "ERISA" means the Employee Retirement Income Security Act
of 1974, as interpreted and applied under regulations and rulings issued
pursuant thereto, all as in effect from time to time.
(j) "Hein-Werner" means Hein-Werner Corporation, a Wisconsin
corporation.
(k) "Net Income" means the worldwide, consolidated net income
of Hein-Werner determined from its books in accordance with generally
accepted accounting principles, but before any deduction for state and
federal net income taxes, surtaxes and excess profit taxes and before any
deduction for contributions made to this Plan. Net Income shall also be
exclusive of any profit the Companies derive from extraordinary items such
as the sale of capital assets, fixed assets and securities, refunds of
taxes or any other items not arising from usual business operations.
(l) "Normal Retirement Date" means the Participant's sixty-
fifth (65th) birthday.
(m) "Participant" means any individual classified by a Company
as a common law employee of a Company (regardless of a final
determination of such status by a governmental entity) who becomes
eligible to participate under the Plan pursuant to Section 2.01 hereof.
(n) "Plan" means the profit sharing plan herein continued and
contained, as amended and in effect from time to time, which shall be
known as the "Hein-Werner Retirement and Savings Plan and Trust" and was
formerly known as the "Hein-Werner Corporation Employees' Profit Sharing
and Retirement Plan and Trust". The governing documents for the Plan
shall include this Agreement, any amendments thereto, Board resolutions
and any uniformly applicable rules, regulations and standards promulgated
by the Administrator consistent and in accordance with the terms hereof.
(o) "Plan Year" means any twelve (12) month period ending on
December 31.
(p) "Total and Permanent Disability" means the Participant's
inability to further perform his usual and customary duties with a Company
or to engage in other gainful occupation or employment of a reasonably
commensurate nature by reason of any medically determinable physical or
mental impairment as determined by the Administrator pursuant to uniform
rules consistently applied for purposes of the Plan to all Participants in
like circumstances.
(q) "Trust Fund" means all sums of money and other property,
together with all earnings, income and increment thereon, held in trust
under the Plan pursuant to the terms hereof.
(r) "Trustee" means First Bank (N.A.) or any successor thereto
designated by the Board pursuant to Section 7.01 hereof.
(s) "Vesting Service" means a Participant's service which is
credited under Section 2.02 hereof.
Section 1.02 Construction. (a) Whenever any words are used
herein in the masculine, they shall be construed as though they were used
in the feminine in all cases where they would so apply; and wherever any
words are used herein in the singular or the plural, they shall be
construed as though they were used in the plural or the singular, as the
case may be, in all cases where they would so apply. The words "hereof",
"herein", "hereunder" and other similar compounds of the word "here" shall
mean and refer to this entire Agreement and not to any particular article
or section. Titles or articles and sections hereof are for general
information only, and this Agreement and the Plan are not to be construed
by reference thereto.
(b) This Agreement and the Plan shall be construed and their
validity determined according to the laws of the State of Wisconsin to the
extent such laws are not preempted by federal law. In case any provision
of this Agreement and/or the Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
of this Agreement and/or the Plan, but this Agreement and/or the Plan
shall be construed and enforced as if said illegal and invalid provisions
had never been inserted therein.
ARTICLE II. PARTICIPATION
Section 2.01. Participation Requirements. (a) An employee of
a Company shall become a Participant subject to subsection (c) below, on
his participation date, which date shall be the earlier to occur of
January 1, 1989 or any subsequent January 1 or July 1 coincidental with or
next following the completion of the requirements in subsection (b) below.
If a former employee of the Company returns to employment and (i) has
completed the requirements in subsection (b), but is not employed on the
relevant January 1 or July 1, or (ii) has terminated employment after
becoming a Participant, he shall become a Participant on his date of
rehire.
(b) Subject to subsection (c) below, an employee shall be
eligible to become a Participant upon completion of the following
requirements:
(i) attainment of age twenty-one (21); and
(ii) completion of the twelve (12) month period commencing
on his employment commencement date or anniversary
thereof, during which period he completes at least one
thousand (1,000) hours of employment.
(c) It is expressly provided that only employees of United
States operations shall be eligible and that any employee who is in a unit
of employees covered by a collective bargaining agreement shall become or
continue as a Participant only if such bargaining agreement specifically
provides that employees in such unit shall be covered by the Plan. A
person who is a "leased employee" within the meaning of Code Section
414(n) or (o) shall not be eligible to participate in the Plan, but in the
event such a person was participating or subsequently becomes eligible to
participate herein, credit shall be given for the person's service as a
leased employee toward completion of the Plan's eligibility and vesting
requirements. Notwithstanding the foregoing, the Administrator may
designate as a Participant herein any non-resident alien who is employed
by one of the Companies or any wholly owned subsidiary thereof; provided,
however, that any such non-resident alien shall not be entitled to make
any Deposits pursuant to Section 3.02 hereof.
(d) For all purposes of the Plan, an hour of employment is an
hour for which a person is directly or indirectly paid by an Affiliate,
including any hour for which back pay is awarded; provided, however, that
no credit shall be given for payments pursuant to applicable workers'
compensation or unemployment compensation laws nor for any hours in excess
of five hundred and one (501) during a single, continuous period during
which no work is performed. Non-worked hours shall be calculated pursuant
to Department of Labor regulations Section 2530.200b-2(b) and (c). If the
Affiliate does not maintain sufficient records regarding actual hours of
employment, an employee shall be credited with forty-five (45) hours of
employment for each week during which he is credited with at least one (1)
hour of employment.
Section 2.02. Vesting Service. (a) An employee shall receive
Vesting Service calculated in years and daily fractions thereof equal to
the following:
(i) for employees of Hein-Werner or Kansas Jack, Inc. on
or before December 31, 1982, the Vesting Service
credited to the employee as of December 31, 1982 as
provided by the terms of the Plan as then in effect;
plus
(ii) for employees of Great Bend Industries, Inc. on or
before December 31, 1982, the Vesting Service credited
to the employee as of December 31, 1982 as provided by
the terms of the Great Bend Industries, Inc. Profit-
Sharing Plan as then in effect; plus
(iii) any periods of employment with an Affiliate
commencing on or after January 1, 1983 and ending
with a severance date as defined in
subsection (b) below; plus
(iv) any periods of severance after December 31, 1982 which
are less than twelve (12) months in length.
Notwithstanding the foregoing, all employees of Blackhawk Automotive, Inc.
on April 1, 1987 shall receive credit for service with the predecessor
company on and after January 1, 1987 through the date of acquisition.
(b) An employee's severance date is the earlier to occur of the
following:
(i) the date the employee quits, is discharged, retires or
dies; or
(ii) the first anniversary of the date the employee is
absent from service due to disability, layoff or other
reason.
(c) For purposes of Section 5.01 hereof, an employee shall be
deemed to incur a break in service if he fails to complete an hour of
employment within the twelve (12) month period following a severance date.
A break in service shall continue for each twelve (12) month period
thereafter in which the person fails to complete an hour of employment.
Any former Participant who terminates employment with the Affiliates shall
be reinstated as a Participant as of the date of reemployment with a
Company. Solely for purposes of determining whether an employee incurs a
break in service, an employee shall not be treated as incurring a break in
service during the twelve (12) month period following his severance date
if the employee is absent from work due to the employee's pregnancy, the
birth of a child of the employee, the placement of a child with the
employee for adoption by the employee, or the care of such a child
immediately after birth or placement.
Section 2.03. Transfer. (a) In the event an employee of a
Company completes the participation requirements of Section 2.01(b)(i) and
(ii) but has not become a Plan Participant on account of the restriction
in Section 2.01(c), such employee shall automatically become a Participant
in the Plan as of the day such restriction is no longer applicable to him.
(b) A Participant who is transferred to employment with an
Affiliate which is not eligible for participation hereunder remains a
Participant in the Plan so long as he continues in employment with any
Affiliate and does not incur a break in service; provided that he shall
not be eligible to make Deposits or for allocations of Company
contributions and forfeitures for any such period of employment.
ARTICLE III. CONTRIBUTIONS TO THE TRUST FUND
Section 3.01. Contributions by Companies. Subject to the
Board's right to alter, amend or terminate the Plan as herein provided,
each Company shall contribute to the Trust Fund for a Plan Year an amount
determined by the Administrator as follows:
(i) The Administrator shall calculate the Net Income for
the Plan Year;
(ii) The Administrator shall determine the Applicable
Percentage under the following table:
Net Income Applicable
(Rounded to Nearest Dollar) Percentage
Under $250,000 0%
250,000 - 500,000 5%
500,001 - 750,000 7%
750,001 - 1,250,000 9%
1,250,001 - 2,000,000 10%
2,000,001 - 3,000,000 12%
3,000,001 - 4,500,000 14%
Over $4,500,000 16%
(iii) The Administrator shall determine the product of
the Net Income and the Applicable Percentage
((i) x (ii)). The total contribution for all
Companies for the Plan Year ("Total Contribution")
shall be the resulting product or, if less, an
amount equal to fifteen percent (15%) of the
total Compensation of all Participants eligible
to receive allocations of Company contributions
hereunder (as specified in Section 4.02(c) hereof);
(iv) Each Company's contribution to the Plan shall equal
the Total Contribution multiplied by a fraction of
which the numerator is the total Compensation of its
eligible Participants for the Plan Year and the
denominator is the total Compensation for all eligible
Participants for the Plan Year. For purposes of this
subsection (iv), a Company's "eligible Participant" is
an eligible Participant for the Plan Year under
Section 4.02(c) who has earned Compensation from the
Company during the Plan Year.
In addition, the board of directors of a Company may elect within the time
specified in Section 3.04 hereof to contribute an additional amount
hereunder.
Section 3.02. Participant Deposits. (a) Election. A
Participant may make an election in the manner prescribed by the
Administrator to make Deposits under the Plan to be effective on the
participation date in Section 2.01 hereof. A Participant is not required
to elect to make Deposits immediately upon completion of the participation
requirements but may, subject to any rules the Administrator may adopt,
make the election at a later date effective as of any subsequent January 1
or July 1. The election shall be effective as of the first day of the
Employee's payroll period coincidental with or next following the
applicable January 1 or July 1 and shall continue in effect until
suspended or terminated pursuant to the terms of the Plan.
(b) Amount. At the time of the election under subsection (a)
above, the Participant shall select the rate of Deposits, which may be any
whole percentage of Compensation paid for applicable payroll periods up to
a maximum of ten percent (10%). Deposits shall be made by payroll
deduction and shall commence with the payroll period in which the election
is effective.
(c) Change in Rate. The rate of a Participant's Deposits shall
remain in effect and may be changed only as of the January l or July l
following the timely completion of an appropriate election with the
Administrator pursuant to such rules as are prescribed by the
Administrator.
(d) Payment. Deposits received by the Companies through
payroll deduction shall be remitted to the Trustee on a monthly or more
frequent basis as determined by the Administrator.
(e) Maximum Deferral. (i) No Participant shall contribute
deposits in excess of $10,000 in any calendar year (or such higher amount
permitted pursuant to Code Section 402(g)) less the amount of any elective
deferrals under all other plans, contracts or arrangements maintained by
the Companies. In order to ensure compliance with Code Section 402(g),
the Administrator in its discretion may prospectively decrease the rate of
Deposits of any Participant at any time, and to the extent permitted by
applicable regulations, may direct the Trustee to refund Deposits to any
Participant.
(ii) The Plan is subject to the limitations of Code
Section 401(k), which are incorporated herein by this
reference. Accordingly, and except as provided in
Section 3.02(e)(v)) and (vi), the average deferral
percentage for any Plan Year for the group of highly
compensated employees (as defined in Code Section
414(q)) who are eligible to participate ("Highly
Compensated Participants") in the Plan shall not
exceed the greater of:
(A) 125 percent of the average deferral percentage
for the preceding Plan Year for all employees who
are eligible to participate in the Plan other
than Highly Compensated Participants ("Non-Highly
Compensated Participants"); or
(B) the lesser of (A) the average deferral percentage
for the group of Non-Highly Compensated
Participants for the preceding Plan Year plus two
percent; or (B) two times the average deferral
percentage for the group of Non-Highly
Compensated Participants for the preceding Plan
Year.
(iii) The deferral percentage for any Non-Highly
Compensated Participant is calculated by dividing
the amount of the Non-Highly Compensated
Participant's Deposits for preceding Plan Year
by such Participant's compensation (as defined
in Section 414(q)(4) and 415(c)(3) of the Code)
for such preceding Plan Year. The deferral
percentage for any Highly Compensated Participant
is calculated by dividing the amount of the Highly
Compensated Participant's Deposits for the Plan
Year by such Participant's compensation (as defined
in Section 414(q)(4) and 415(c)(3) of the Code)
for the Plan Year. The average deferral percentage
for the group of Highly Compensated Participants
and the group of Non-Highly Compensated Participants
is the average of the deferral percentages
calculated for each member of the applicable group.
In accordance with rules promulgated by the Internal
Revenue Service, the Administrator, in calculating a
Participant's deferral percentage, may elect to
treat qualified elective contributions and qualified
non-elective contributions (if any) as if they were
Deposits.
(iv) The Administrator may from time to time establish
limits (and as appropriate, modify any such limit) on
the amount or percentage of Deposits that may be made
by or on behalf of Highly Compensated Participants for
the Plan Year. In addition, Administrator may
prospectively decrease the rate of Deposits of any
Participant at any time (or to the extent permitted by
applicable regulations, may direct the Trustee to
refund Deposits to any Participant), if the
Administrator determines that such action is necessary
or desirable to enable the Plan to comply or to ensure
compliance with the average deferral percentage and
the requirements of Sections 401(k).
(v) For the Plan Year beginning January 1, 1997 ("1997
Plan Year"), the Administrator may elect to calculate
the maximum deferral percentage for Highly Compensated
Participants based upon either (A) the average
deferral percentage of Non-Highly Compensated
Participants for the 1997 Plan Year, or (B) the
average deferral percentage of Non-Highly Compensated
Participants for the 1996 Plan Year (determined using
the definition of highly compensated employee as in
effect under Section 414(q) of the Code as in effect
for the 1996 Plan Year prior to the amendment of
Section 414(q) by the Small Business Job Protection
Act of 1996).
(vi) For Plan Years beginning on or after January 1, 1998,
the maximum deferral percentage for Highly Compensated
Participants for a Plan Year shall be calculated in
accordance with Section 3.02(e)(ii) using the average
deferral percentage for Non-Highly Compensated
Participants for the preceding Plan Year ("Prior Year
Method") unless the Administrator has elected to
determine the maximum deferral percentage of Highly
Compensated Participants based upon the average
deferral percentage of Non-Highly Compensated
Participants for the current Plan Year ("Current Year
Method"). If the Administrator elects to use the
Current Year Method, the election shall apply to all
subsequent Plan Years unless the Internal Revenue
Service has authorized the Plan to again utilize the
Prior Year Method.
(vii) If the average deferral percentage of Highly
Compensated Participants for any Plan Year exceeds
the applicable deferral percentage limitation for
such year, each affected Highly Compensated
Participant shall receive a distribution of the
amount of his excess Deposits, together with
income on such Deposits for the Plan Year in which
the contributions were made). Such distribution
shall be made on or before the last day of the
Plan Year following the Plan Year to which the
excess Deposits relate. The aggregate amount
of Deposits to be refunded shall be determined
by reducing (or leveling) the maximum allowable
level of Deposits to a percentage determined by
the Administrator that, if applied to all Highly
Compensated Participants with a deferral
percentage above that level, would result in
the average deferral percentage test being
satisfied. The aggregate amount required to be
refunded shall be allocated among (and distributed
to) Highly Compensated Participants by reducing
(or leveling) the maximum dollar amount of
Deposits for the Plan Year to an amount determined
by the Administrator that, if applied to all
Highly Compensated Participants with Deposits
above that level, would result in a refund of
Deposits equal to the aggregate amount of
excess Deposits calculated in accordance with
the preceding sentence. The amount required to
be distributed to any Highly Compensated
Participant shall be reduced by the amount of
excess Deposits (if any) previously distributed
to the Participant in order to comply with
Section 402(g)(5) of the Code.
(viii) In the event that the Administrator determines
that Section 401(k) of the Code (including the
regulations thereunder) may be applied in a
manner different than that prescribed in this
Section 3.02, the Administrator, in its
discretion, may make appropriate adjustments.
In addition, the Administrator may promulgate
such further rules and procedures as it may
deem necessary for the proper application
of this Section 3.02.
(f) Suspension. Notwithstanding subsection (c) above, a
Participant may elect in the manner prescribed by the Administrator to
suspend making Deposits effective with the payroll period commencing after
the making of his election, provided that any such suspension of Deposits
shall be effective for a minimum period of one (1) year. A Participant's
Deposits shall be automatically suspended for any payroll period which
ends with a day on which the Participant is not an eligible employee.
Participants shall not be permitted to make up suspended Deposits or to
make retroactive Deposits except where the Administrator determines that
an administrative or clerical error has occurred in determining or
deducting from Compensation the amount of Deposits elected by the
Participant. A Participant whose Deposits are suspended may, in the
manner prescribed by the Administrator, resume making Deposits effective
with the first day of the Participant's payroll period coincidental with
or next following the first January 1 or July l next following the period
of suspension.
Section 3.03. No Liability for Future Company Contributions.
The benefits under the Plan shall be only such as can be provided by the
assets of the Plan, and there shall be no liability or obligation on the
part of any Company to make future contributions hereunder or to make any
further contributions in the event of termination of the Plan.
Section 3.04. Time Period for Payment of Company Contributions.
Each Company's contribution for any Plan Year shall be paid to the Trustee
not later than the time prescribed by law, including any extensions
thereof, for filing such Company's federal income tax return for such
year.
Section 3.05. Funding Policy. The funding policy for the Plan
is that each Company's contributions allocated to the Plan shall be
managed in a manner consistent with ERISA and the general investment
objectives for the Plan assets and for the purpose of defraying the
reasonable expenses of administering the Plan. The Trustee shall have the
responsibility for carrying out the funding policy and shall annually
review the funding status of the Plan with the Administrator.
Section 3.06. Contribution Amounts Returnable to the Company.
(a) In no event shall the Companies receive any amount from the Trust
Fund, except as provided in this Section and Section 4.08 hereof. In the
case of a contribution to the Plan that is made by the Companies by a
mistake of fact, as determined by the Companies' independent public
accountants and/or legal counsel, such contribution shall, upon written
direction of the Administrator, be returned to the Companies within one
(1) year after the payment of such contribution.
(b) Company contributions hereunder are conditioned upon their
deductibility under Code Section 404. Notwithstanding any provision
herein to the contrary, to the extent a deduction is disallowed,
contributions shall, upon the written direction of the Administrator, be
returned to the Companies within one (1) year after such disallowance.
Section 3.07. Special Rules Applicable to Returning Veterans.
The following provisions shall apply to a Participant who is absent from
active employment with any Company on account of military service and who
returns from such military service to active employment with any Employer
under terms and conditions that entitle the Participant to the protections
of the Uniformed Services Employment and Reemployment Rights Act of 1994,
as amended:
(a) The Company shall contribute to the Trust as a Company
contribution an amount equal to the Company contribution that the
Participant would have had allocated to his account had he remained
continuously employed with the Company during the period of military
service.
(b) The Participant may elect (either in lieu of or in addition
to the Deposits that the Participant may elect to make under Section 3.02
with respect to Compensation earned on and after his reemployment) to make
Deposits with respect to his period of eligible military service ("Make-up
Contributions"). The Participant may elect Make-up Contributions during
the period that begins on the date of the Participant's reemployment from
covered military service and extends for the lesser of (i) five years from
the date of reemployment, or (ii) a period equal to three times the
Participant's period of covered military service. The Make-up
Contributions may not exceed the maximum amount of Deposits that would
have been permitted under the Plan and applicable Code provisions had the
Participant been continuously employed by the Employer during the period
of military service, reduced by the amount of Deposits (if any) actually
made by the Participant during the period of military service.
(c) For purposes of determining the amount of the Company
contribution under Section 3.07(a) or the maximum amount of Make-up
Contributions permissible under Section 3.07(b), the Participant's
compensation during the period of eligible military service shall be
deemed to equal the rate of pay that the Participant would have received
from the Company but for the military service; provided that if such
compensation cannot be determined with reasonable certainty, the
Participant's compensation for the period of military service shall be
deemed to equal the Participant's average compensation from the Company
for the twelve (12) month period immediately preceding the Participant's
military service (or if the Participant was employed for less than the
full twelve (12) month period immediately preceding his military service,
the Participant's average compensation from the Company for the
Participant's entire period of employment with the Company preceding the
Participant's military service).
(d) No adjustment shall be made to an Participant's account to
reflect the gain or loss that would have been credited (charged) to the
Participant's account had the Company contributions and Make-up
Contributions described in this Section 3.07 been made during the period
of military service rather than following the Participant's return to
active employment.
(e) The Company shall credit such Participant with Vesting
Service for purposes of Section 2.02 equal to the amount of Vesting
Service such Participant would have been credited with had he remained
continuously employed with the Company during the period of military
service.
Section 3.08. Rollovers. The Administrator may, in its
discretion, direct the Trustee to accept benefits (in the form of cash) of
any Participant arising out of participation in an employee pension
benefit plan maintained by an employer or a former employer of such
person, as a qualified plan under Section 401 or 403 of the Code to the
extent such benefits constitute a "qualifying rollover distribution" under
Section 402(a)(5) of the Code or the proceeds from a rollover individual
retirement account under Section 408(d)(3) of the Code. In no event shall
amounts representing nondeductible employee contributions be transferred
to this Plan pursuant to this Section. Any amount so transferred shall be
treated for all purposes of the Plan as fully vested, shall be given
special designation by the Trustee in order to provide for the proper
administration of the Plan, and shall be subject to such rules and
regulations as shall be determined by the Administrator.
ARTICLE IV. PARTICIPANT ACCOUNTS
Section 4.01. Establishment and Nature Thereof. The Trustee
shall maintain an account in the name of each Participant for his
allocated share of Deposits, contributions by the Companies and
forfeitures. As necessary, investment subaccounts shall be established to
reflect the investment of the portions of each Participant's account held
in the various investment funds provided in Section 4.06 hereof, and the
portion of each Participant's account held in the form of Company stock
(if any).
Section 4.02. Allocation of Company Contributions. (a) As
soon as practicable following the close of each Plan Year, the Trustee
shall allocate the contributions of the Companies for the Plan Year among
the eligible Participants for that Plan Year pursuant to subsection (b)
below based on each Participant's participation units and Compensation.
Each Participant shall be credited with one (1) participation unit for
each $100 (or fraction thereof equal to $50 or more) of his Compensation
for the Plan Year from the Companies and an additional unit for each year
of Vesting Service credited to him as of the end of such Plan Year.
(b) Each Participant's share of the contributions of the
Companies shall be determined in the following manner and order:
(i) an amount equal to the applicable percentage of the
Participant's Compensation in excess of the maximum
taxable wage base in effect on the first day of the
Plan Year under the Federal Insurance Contributions
Act; plus
(ii) an additional amount equal to the portion of the
contribution of the Companies not credited under (i)
above multiplied by a fraction, the numerator of which
shall be the Participant's participation units for the
Plan Year and the denominator of which shall be the
aggregate participation units for such year for all
Participants eligible for a contribution.
The applicable percentage under (i) above shall be the lesser of (1)
greater of (A) five and seven-tenths percent (5.7%) or (B) the rate of tax
pursuant to Code Section 3111(a) in effect on the first day of the Plan
Year attributable to old-age insurance, or (2) the percentage of
Compensation allocable under (ii) above for Participants with only one
year of Vesting Service.
(c) For purposes of Sections 4.02 and 4.04 hereof, the
Participants eligible for allocations of Company contributions and
forfeitures for a given Plan Year shall include all Participants who were
employed with a Company on the last day of such Plan Year and any
Participant whose employment with a Company was severed during such Plan
Year for retirement after age sixty-five (65), death or disability, but
not for any other reason.
(d) Subject to the limitations in Section 4.08 hereof, the
Trustee shall credit Company contributions (other than in-kind
contributions of Company stock) to the appropriate accounts and investment
subaccounts as received and in accordance with the Participant's
directions given pursuant to Section 4.06 hereof. The Trustee shall
credit in-kind contributions of Company stock to the appropriate accounts
and subaccounts as received.
Section 4.03. Allocation of Participant Deposits. Subject to
the limitations in Section 4.08 hereof, each business day, the Trustee
shall credit the Participant's Deposits to the appropriate accounts and
investment subaccounts as received and in accordance with the
Participant's directions given pursuant to Section 4.06 hereof.
Section 4.04. Allocation of Forfeitures. The Trustee shall
establish a special account known as the "suspense account" and shall
enter into such account all amounts forfeited by any Participants under
Section 5.01 hereof during the Plan Year. Amounts in the suspense account
shall be allocated by the Trustee at the end of such Plan Year among the
remaining eligible Participants as defined in Section 4.02 in an amount
for each Participant as determined pursuant to Section 4.02(b)(ii).
Section 4.05. Allocation of Changes in Values. As of each
business day, the Trustee shall value the Trust Fund and proportionately
adjust each Participant's account to reflect the effect of income
received, any change in fair market value (whether realized or
unrealized), expenses and all other transactions since the previous
business day respecting the Trust Fund. Such valuation and adjustment
shall be accomplished prior to any allocation provided in Sections 4.02,
4.03 and 4.04 hereof. Accounts other than amounts invested in Company
stock shall be valued in accordance with the investment funds designated
pursuant to Section 4.06.
Section 4.06. Direction of Investment. (a) Each Participant
shall direct, in the manner the Administrator prescribes, the percentage
of contributions (other than amounts held in the form of Company stock) to
his account which shall be invested in the investment funds specified in
subsection (c) below. In the event a Participant fails to direct
investment of any part of the account, such amount shall be invested on
the Participant's behalf in the First American Prime Obligations Fund (or
other available investment option designated by the Administrator from
time to time).
(b) A Participant's direction of investment for future
contributions shall remain in effect until changed in such manner as the
Administrator may prescribe. In addition, each Participant may direct the
Trustee, in the manner the Administrator prescribes, to reallocate the
Participant's existing accounts.
(c) There shall be eight investment funds: First American
Prime Obligations, First American Equity Index C, First American Stock C,
First American Special Equity C, First American Regional Equity C, Janus
Worldwide, Janus Short-Term Bond, and Putnam Income A. Each fund shall
have the investment characteristics determined by the Administrator and
communicated to the Participants from time to time. The Administrator
shall have the authority to add or subtract investment funds at any time.
(d) Any Company contributions made in the form of Company stock
shall be held in a separate subaccount for each Participant. No additions
may be made to this subaccount except additional Company contributions in
the form of Company stock and cash or stock dividends related to the
balance in such subaccount. A Participant may, in the manner prescribed
by the Administrator, direct the transfer of amounts held in this
subaccount to his subaccount for other Company contributions and such
amounts shall be invested in accordance with this Section 4.06.
Section 4.07. Annual Statement for Participants. As soon as
practicable following each Plan Year, the Trustee shall prepare for each
Participant, in a form approved by the Administrator, an annual statement
reflecting the status of the Participant's account as of the end of the
Plan Year.
Section 4.08. Maximum Allocation Limitations. The Plan is
subject to the limitations on benefits and contributions imposed by Code
Section 415 which are incorporated herein by this reference. The
limitation year shall be the Plan Year. In the event that there are
multiple plans, benefits under this Plan shall be restricted last. Any
amounts not allocable to a Participant by reason of the limitations
incorporated herein shall be allocated and reallocated during the
limitation year among all other eligible Participants to the extent
permitted by the limitations. Any amounts which cannot be allocated or
reallocated due to the limitations shall be credited to a suspense account
subject to the following conditions: (i) amounts in the suspense account
shall be allocated as a forfeiture among all eligible Participants
hereunder at such time, including termination of the Plan or complete
discontinuance of Company contributions, as the foregoing limitations
permit, (ii) no investment gains or losses shall be allocated to the
suspense account, (iii) no further Company contributions shall be
permitted until the foregoing limitations permit their allocation to
Participants' accounts, and (iv) upon termination of the Plan any
unallocable amounts in the suspense account shall revert to the Companies.
ARTICLE V. BENEFITS
Section 5.01. Benefits Payable to Participant. (a) If a
Participant severs employment with the Companies (i) on account of Total
and Permanent Disability or retirement on or after his Normal Retirement
Date or attainment of age sixty (60) or (ii) at any time after attaining
six (6) years of Vesting Service, he shall be entitled pursuant to Section
5.03 hereof to receive the total amount credited to his account. If a
Participant's employment is severed under any other circumstances (except
by reason of death which is provided for in Section 5.02 hereof), he shall
be entitled to receive pursuant to Section 5.03 hereof the total
subaccount balances of Deposits and rollovers, plus that percentage of his
subaccount balance of Company contributions and forfeitures as of the date
of such severance which represents his nonforfeitable interest and the
remainder of such subaccount balance of Company contributions and
forfeitures shall be subject to forfeiture pursuant to subsection (b) of
this Section. A Participant who completes at least one (1) hour of
employment, as defined in Section 2.01(d) hereof, on or after January 1,
1989 has a nonforfeitable interest equal to the following:
Full Years of Percentage of Account
Vesting Service Balance Representing
At Date of Severance Nonforfeitable Interest
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
(b) Any amounts in a Participant's account which are not
payable under subsection (a) above when his employment with the Affiliates
is terminated shall remain in such account and shall continue to share in
allocations under Section 4.05 hereof until such former Participant incurs
a break in service, as defined in Section 2.02(c) hereof, which lasts for
sixty (60) consecutive months, whereupon they shall be forfeited and
administered pursuant to Section 4.04 hereof. Notwithstanding the
foregoing, if a Participant whose employment with the Affiliates
terminates prior to his becoming one hundred percent (100%) vested in the
portion of his account balance attributable to Company contributions
receives a distribution or distributions of his entire vested interest in
his account, such Participant's nonvested interest in the Company
contributions credited to his account shall be forfeited; provided,
however, that if such Participant is reemployed prior to incurring a break
in service which lasts for sixty (60) consecutive months, any forfeited
amounts shall be reinstated from current forfeitures or a special Company
contribution as determined by the Administrator. Any amounts that are
reinstated pursuant to the previous sentence shall continue to vest
according to the schedule in subsection (a) above taking into
consideration any distributed amount. In any such event, the
Participant's vested portion of his remaining account shall not be less
than an amount "X" determined by the formula X=P(AB+D)-D, where P is the
vested percentage at the relevant time, AB is the account balance at the
relevant time, and D is the amount of the distribution.
Section 5.02. Death Benefits. Upon the death of the
Participant while employed by the Affiliates, the total amount credited to
his account, adjusted pursuant to Sections 4.02 and 4.05 hereof, shall be
fully vested and payable in a single sum to such Participant's
Beneficiary. Upon the death of a Participant following his termination of
employment with the Affiliates, the vested portion of his account which
has not been distributed shall be payable to such Participant's
Beneficiary.
Section 5.03. Form and Time of Payment. (a) Form. All amounts
payable to a Participant or Beneficiary shall be distributed in a lump
sum.
(b) Timing. Payment shall commence as soon as is reasonably
practicable after the Participant's employment with the Affiliates is
terminated. Notwithstanding the foregoing, the following rules shall
apply:
(i) Except with respect to death benefits, no distribution
from a Participant's account, the vested balance of
which has ever exceeded $5,000 (or such other amount
provided in Code Section 411(a)(11)(A)), shall be made
without the consent of the Participant to the extent
required by law; but
(ii) Benefits shall not commence later than sixty (60) days
after the end of the Plan Year in which the
Participant attains age sixty-five (65) or incurs a
termination of employment, whichever shall last occur;
but
(iii) In general, benefits shall be paid or commence
no later than the April 1 after the end of the
calendar year in which the Participant attains
age seventy and one-half (70 1/2), even if the
Participant is still employed. However, in the
case of any Participant who is not a "five percent
owner" (as defined in Code Section 416) for the
calendar year in which he attains age 70 1/2, and
who attains age 70 1/2 in 1996, 1997, or 1998,
such Participant may elect to defer distribution
until a date not later than April 1 following the
calendar year in which occurs the Participant's
retirement. In the case of any Participant who
is not a "five percent owner" and who attains
age 70 1/2 after 1998, benefits shall not be paid
or commence until the Participant's retirement.
(iv) Any death benefits shall be distributed within five
(5) years of the Participant's death, and if
installment payments had previously commenced to the
Participant, at least as rapidly as under the method
of distribution being used as of the Participant's
death.
(c) The provisions of the Plan are intended to comply with Code
Section 401(a)(9) which prescribes certain rules regarding minimum
distributions and requires that death benefits be incidental to retirement
benefits. All distributions under the Plan shall be made in conformance
with Code Section 401(a)(9) and the regulations thereunder which are
incorporated herein by reference. The provisions of the Plan governing
distributions are intended to apply in lieu of any default provisions
prescribed in regulations; provided, however, that Code Section 401(a)(9)
and the regulations thereunder override any Plan provisions inconsistent
with such Code Section and regulations.
Section 5.04. Hardship Withdrawals. (a) Upon a showing of
substantial hardship, once during a Plan Year a Participant may withdraw
any portion of the balance in his account which is attributable to his
Deposits or earnings thereon upon written request to and approval of the
Administrator. For purposes of this Section, substantial hardship shall
mean:
(i) unreimbursed medical expenses described in Code
Section 213(d) incurred by the Participant, the
Participant's spouse or any dependents of the
Participant (as defined in Code Section 152) or
necessary for these individuals to obtain medical
care;
(ii) costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant;
(iii) payment of tuition and related educational fees
for the next 12 months of post-secondary education
for the Participant or the Participant's spouse,
children or dependents; or
(iv) payments necessary to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) The hardship withdrawal (i) shall be limited to the amount
of the immediate and heavy financial need, (ii) shall be made only after
the Participant takes all permitted loans and distributions hereunder and
pursuant to any other plan maintained by an Affiliate, and (iii) shall not
include any net earnings credited after December 31, 1988 to the balance
in the Participant's account derived from Deposits.
(c) Any Participant who makes a withdrawal under this Section,
shall have his Deposits and any other elective contributions or employee
contributions under this Plan or any other plan maintained by the
Companies (both qualified and nonqualified) automatically suspended for a
period of twelve (12) months following such withdrawal. The amount which
such a Participant may contribute as Deposits for the calendar year
following such withdrawal shall not exceed the amount described in Code
Section 402(g) for such year, reduced by the amount of such Participant's
actual Deposits for the calendar year in which the withdrawal occurred.
(d) The Administrator shall have the authority to amend this
Section in the Administrator's discretion to permit hardship withdrawals
pursuant to any rules which satisfy the applicable regulations and rulings
of the Internal Revenue Service from time to time.
Section 5.05. Payments to Minor or Incompetent Person. In the
event that any amount is payable under the Plan to any person who is a
minor or is deemed by the Administrator to be incompetent, either mentally
or physically, or for any other reason incapable of receiving such
payment, the Administrator may, in its sole discretion, make such payment
for the benefit of such person in any of the following ways that the
Administrator may select: (i) to such person's legal representative
appointed by proceedings satisfactory to the Administrator; (ii) directly
to such person even though he is not then able to exercise control over
such payment; and/or (iii) to any custodian under the Uniform Gifts to
Minors Act or similar statutes or guardian of such person or of his
property with whom such person is making his home. The Administrator
shall not be required to see to the proper application of any such payment
made for such person's benefit pursuant to the provisions of this Section,
and any such payment shall satisfy in full such person's entitlement to
that payment.
Section 5.06. Erroneous Overpayments. In the event any
payments hereunder to a Participant, former Participant, surviving spouse
or any other Beneficiary hereunder exceed the amounts to which such person
was entitled, the Administrator may withhold or reduce subsequent
payments, or may take such other action as it deems necessary or
appropriate.
ARTICLE VI. PLAN ADMINISTRATION
Section 6.01. Appointment of Members. The Administrator shall
be a committee consisting of three (3) persons from time to time appointed
by the Board and serving at the pleasure of the Board. Members may, but
need not, be officers, directors or employees of a Company. Any vacancies
on the committee, whether caused by death, resignation, removal or other
cause, shall be filled by the Board but shall not affect the authority or
responsibility of the committee to act until such vacancy is filled.
Members of the committee may serve in similar capacities under other
employee retirement and welfare benefit programs established and
maintained by the Companies. The Administrator shall be deemed the Plan's
Administrator for all purposes of ERISA.
Section 6.02. Responsibility and Authority of the
Administrator. (a) The Administrator shall have and exercise all
discretionary and other authority to control and manage the operation and
administration of the Plan as it may be amended by the Board from time to
time, except such authority as is specifically allocated otherwise by and
under the terms hereof. Without limiting the foregoing and in addition to
its authority and duties specified elsewhere herein, the Administrator
shall have exclusive authority to:
(i) interpret and apply all provisions hereof, including
without limitation, the power to determine who is a
Participant in the Plan, and the amount of Vesting
Service and Compensation to be recognized for each
such Participant;
(ii) formulate, issue and apply rules and regulations,
which are consistent with the terms and provisions
hereof and the requirements of applicable law;
(iii) make appropriate determinations and calculations
and direct the Trustee to pay benefits accordingly;
(iv) prescribe and require the use of appropriate forms;
(v) prepare all reports which may be required by law;
(vi) inform the Trustee and any qualified funding agent of
anticipated contributions and benefit payments in
order to aid in the establishment of an investment
policy with respect to the assets of the Plan; and
(vii) review periodically the performance of the Trustee
and report any recommendations to the Board.
Section 6.03. Use of Professional Services. The Administrator
may engage the services of and/or consult with legal counsel, independent
qualified public accountant or such other persons as it may deem
appropriate. Such persons may be employed for the purpose of rendering
advice to the Administrator concerning his responsibilities hereunder, and
may be persons who render services to the Companies and/or the Trustee.
In any case in which the Administrator utilizes such services, it shall
retain exclusive discretionary authority and control over the management
and administration of the Plan.
Section 6.04. Fees and Expenses. If the Administrator includes
an employee of a Company, such employee shall serve without compensation
but shall be reimbursed for all reasonable expenses incurred in its
capacity as Administrator. Where the Administrator utilizes services as
provided by Section 6.03 hereof, it shall review and approve fees and
other costs for these services. Such fees and costs and any other
expenses incurred in the administration of the Plan and Trust Fund shall
be paid by the Companies.
Section 6.05. Organization and Procedure. The Administrator
shall select from its members a chairman and such other officers as it
deems appropriate. Committee action may be taken on vote of at least two
(2) members present at any meeting or upon unanimous written consent of
all members without a meeting. Minutes of Administrator meetings shall be
kept and all action of the committee shall be recorded in such minutes or
other appropriate written form. The Administrator may establish such
other procedures and operating rules as it deems appropriate.
Section 6.06. Delegation of Authority and Responsibility.
Employees of a Company who are not committee members may perform such
duties and functions relating to the administration of the Plan as the
Administrator shall direct and supervise. It is expressly provided,
however, that in any such case, the Administrator retains full and
exclusive authority and responsibility for and respecting any such
activities by other employees; and nothing contained in this Section shall
be construed to confer upon such other employees any discretionary
authority or control in and respecting the management and administration
of the Plan.
Section 6.07. Requirement to Furnish Information and to Use
Administrator's Forms. Each person entitled to benefits under the Plan
shall furnish to the Administrator such evidence, data or information as
such Administrator considers necessary or desirable in order to properly
administer the Plan. Any designation of Beneficiary, benefit application,
notification or other writing to be submitted hereunder to the
Administrator must be filed pursuant to the procedure and on the
appropriate form prescribed, and its receipt acknowledged, by the
Administrator in order to be valid and effective.
Section 6.08. Claims Procedure. (a) A Participant or
Beneficiary who believes that he is then entitled to benefits hereunder in
an amount greater than he is receiving or has received may file a claim
for such benefits by writing directly to the Administrator at Hein-
Werner's office located in Waukesha, Wisconsin. The Administrator may
prescribe a form for filing such claims, and if it does so, claim shall
not be deemed properly filed unless such form is used, but the
Administrator shall provide a copy of such form to any person whose claim
for benefits is improper solely for this reason.
(b) Every claim which is properly filed shall be answered in
writing stating whether the claim is granted or denied. Such written
response shall be provided to the claim and within ninety (90) days of the
claim's receipt by the Administrator unless an extension of time is needed
to process the claim in which case the Administrator shall give the
claimant written notice of such need, the reason therefor and the length
of such extension, which shall not exceed an additional ninety (90) days.
If the claim is wholly or partially denied, the specific reasons for
denial and reference to the pertinent Plan provisions shall be set forth
in a written notice to the claimant. Such notice shall also describe any
information necessary for the claimant to perfect an approval and an
explanation of the Plan's claim appeal procedure as set forth in
subsection (c) of this Section.
(c) Within ninety (90) days of notice that a claim is denied,
the claimant may file a written appeal to the Administrator, including any
comments, statements or documents, the claimant may wish to provide.
Appeals shall be considered by the Administrator, who shall make his
decision with respect to such appeal no later than sixty (60) days after
such appeal is timely filed; provided, however, that, if an extension of
time is required to process such appeal, written notice thereof shall be
given to the claimant prior to the commencement of such extension which
shall not go beyond the one hundred twentieth (120th) day after the date
of such appeal was filed. In the event the claim is denied upon appeal,
the Administrator shall set forth the reasons for the denial and the
pertinent Plan provisions in a written decision. The Administrator shall
comply with any reasonable request from a claimant for documents or
information relevant to his claim prior to his filing an appeal.
(d) The Administrator shall have discretionary authority to
determine eligibility for benefits and to construe the terms of the Plan;
any such determination shall be final and binding on all parties unless
arbitrary and capricious.
Section 6.09. Agent for Service of Process. The Administrator
is hereby designated as the agent for service of legal process with
respect to all matters pertaining to the Plan and the Trust Fund.
ARTICLE VII. TRUSTEE
Section 7.01. Trustee Removal and/or Resignation. The Trustee
may be removed by majority vote of the Board at any time, with or without
cause, upon thirty (30) days' written notice. The Trustee may resign at
any time upon thirty (30) days' written notice to the Company. Upon such
removal or resignation of the Trustee, the Board by majority vote shall
appoint or designate a successor trustee or trustees, and the Trustee
shall assign and transfer and pay over to such successor trustee or
trustees, the monies and other property then constituting the Trust Fund.
Section 7.02. Trustee's General Powers. In addition to any
powers or authority otherwise granted to the Trustee hereunder, the
Trustee is authorized and empowered:
(a) to act as complete and absolute owner, and to exercise
maximum protection, of all assets in the Trust Fund;
(b) to sell, exchange, convey, transfer or dispose of, or to
grant options with respect to, any asset in the Trust Fund and to apply
the proceeds of any such transaction in any manner consistent with the
purposes of the Trust Fund;
(c) to borrow or raise monies for the purposes of the Trust
Fund in such amount and upon such terms and conditions as the Trustee in
its discretion may deem advisable;
(d) to make, execute, acknowledge and deliver any and all
assignments, documents of transfer or conveyance and any and all other
instruments or documents that may be necessary or appropriate to carry out
the powers herein granted;
(e) to cause any asset in the Trust Fund to be registered in,
or transferred to, its name as Trustee or the name of its nominee or
nominees or to retain same unregistered or in form permitting
transferability by delivery, but the books and records of the Trustee
shall at all times show that all such assets are part of the Trust Fund;
(f) to exercise any option, right or privilege appurtenant to
or respecting any asset of the Trust Fund or any contract with any
insurance company, including the right to vote in person or by proxy as to
any security in the Trust Fund (except to the extent such rights are
passed through to Participants);
(g) to employ such legal, accounting and other assistants as it
may deem necessary for administering the Trust Fund, which assistants may
be those consulted by a Company and/or the Administrator;
(h) to enforce, compromise or settle or abstain from same in
its discretion, any right, obligation or claim, whether asserted by or
against the Trustee, and in general to protect in any way the interests of
the Trust Fund;
(i) to employ or appoint investment advisors or managers to
manage any or all of the assets comprising the Trust including any advisor
or manager which is a member of an affiliated group of which the Trustee
is a member, and to effectuate such appointment, the Trustee shall have
the power to execute any documents as are necessary to appoint such
advisor or manager as a co-fiduciary; and
(j) to do all other acts which the Trustee may deem necessary
or proper and to exercise any and all powers of the Trustee upon such
terms and conditions as it deems to be for the best interests of the Trust
Fund.
Section 7.03. Payments from the Trust Fund. The Trustee shall
make payments from the Trust Fund to such persons, and in such manner and
amounts as may be specified in written directions to the Trustee from the
Administrator. Should any such payment be unclaimed, the Trustee shall
notify the Administrator thereof, and shall dispose of same in accordance
with the Administrator's further directions.
Section 7.04. Trustee Accounting. The Trustee shall keep
accurate and detailed accounts of all investments, receipts and
disbursements and other transactions hereunder, and all accounts, books
and records relating thereto shall be open to inspection and audit at
reasonable times and by any person or persons designated by the
Administrator or a Company. Within sixty (60) days following December 31,
1998, and within sixty (60) days following each December 31 thereafter, or
following the close of such other annual period as may be agreed upon
between the Trustee and Hein-Werner, and within sixty (60) days after the
removal or resignation of the Trustee, the Trustee shall file with the
Companies a written report setting forth all investments, receipts and
disbursements, and other transactions effected by it during the period
ending as of such December 31, or other annual period or to the date of
such removal or resignation, as the case may be, including a description
of all securities and investments purchased and sold with the cost or net
proceeds of such purchases or sales, and showing all cash, securities and
other property held at the end of such period.
Section 7.05. Settlement of Trustee Accounts. In case of any
disapproval of any statement of accounts of the Trustee, an audit of such
statement shall be made by an independent certified public accountant
appointed by Hein-Werner, unless a corrected statement shall have been
rendered to Hein-Werner and approved in writing by Hein-Werner. Upon
completion of such audit, the inaccuracies in such statement so audited,
if any, shall be corrected to conform to such audit and a corrected
statement shall be delivered by the Trustee to Hein-Werner. Any such
corrected statement shall stand approved as the statement of account of
the Trustee as to all matters embraced therein, without further approval.
An approved or corrected statement of account shall constitute an account
stated between the Trustee and Hein-Werner as to all matters embraced in
such statement, and shall be binding and conclusive upon all persons
interested in the Trust Fund to the same extent as if the account of the
Trustee had been settled and allowed in a proceeding for judicial
settlement of its accounts in any court of competent jurisdiction, to
which all such persons had been made parties; provided, however, that no
such statement of accounts nor Hein-Werner's approval thereof shall be
deemed to relieve the Trustee of any liability which may be imposed upon
it for violation of a specific provision of the Code or ERISA; provided
further, that nothing contained herein shall be deemed to deprive the
Trustee and/or Hein-Werner of the right to have a judicial settlement of
the Trustee's accounts.
Section 7.06. Reliance on Written Communications. The Trustee
shall be fully protected in relying upon any written notice, certification
or other document or writing received from a Company, the Board and/or the
Administrator and believed by it to be genuine and shall be under no duty
to make any investigation or inquiry as to statements contained in any
such notice, certification or other document or writing, and may accept
the same as conclusive. Except when otherwise expressly provided herein,
any instrument to be delivered or furnished by a Company or Board to the
Trustee shall be sufficiently executed if executed in the name of such
Company or Board by any appropriate officer thereof.
Section 7.07. Trustee Fees and Expenses. The Trustee shall be
entitled to reimbursement of any reasonable expenses properly incurred in
the performance of its duties hereunder and, if the Trustee is not an
employee of a Company or any Affiliate, to such reasonable compensation as
shall be mutually agreed upon with Hein-Werner. Such compensation, if
any, and expenses shall be paid by the Companies.
ARTICLE VIII. INVESTMENT OF TRUST FUND
Section 8.01. Trustee Investment of Trust Fund. The Trust Fund
shall be invested and reinvested without distinction between principal and
income in such manner as the Trustee shall determine to be consistent with
the protection of investment capital and preservation of sufficient
liquidity to make payments as required. Subject to the last sentence of
this Section, such investments and reinvestments shall not be restricted
to those of the character authorized for fiduciaries under any present or
future laws or administrative regulations or pursuant to any rule of
court, nor shall any investments be limited in any amount or type in
relation to the amount or type of investments of the Trust Fund as a
whole. The Trustee may hold all or any part of the Trust Fund in cash,
and shall not be liable for interest on monies so held. Such cash or cash
balances may be deposited in a savings account earning a reasonable rate
of interest with the Trustee or any other bank or similar financial
institution as the Trustee may in its discretion designate. The Trustee
may, from time to time, invest and reinvest any cash reserves in debt
securities payable on demand having maturities not exceeding one (1) year
or (in interests in common, pooled, diversified or consolidated funds
created and maintained by the Trustee from time to time for the collective
short-term investment of the cash reserves in trusts of employee
retirement plans qualified under the applicable provisions of the Code)
whereupon, during the effective period of such investment and
reinstatement in such a fund, any instrument governing such fund shall be
deemed to be incorporated in and made a part of this Agreement as fully
and to all intents and purposes as if set forth herein at length. The
Trustee may hold all or any part of the Trust Fund in qualifying employer
securities or qualifying employer real property. Notwithstanding anything
herein to the contrary, the Trust Fund shall at all times be invested and
reinvested in a manner which is consistent and in accordance with the
applicable requirements of ERISA and the Code.
Section 8.02. Use of Trustee's Commingled Investment Funds. At
its discretion, the Trustee may invest and reinvest the assets of the
Trust Fund, in whole or in part, in any common pooled, diversified or
consolidated funds qualified under Code Section 501(a) and maintained by
the Trustee, or any bank or trust company acting as agent of the Trustee,
for the purpose of investing assets held under plans qualified under Code
Section 401(a) and, during the effective period of such investment and
reinvestment, any instrument governing such fund shall be deemed to be
incorporated in and made a part of this Agreement as fully and to all
intents and purposes as if same were set forth herein at length.
Section 8.03. Investment of Accounts. At the direction of
Hein-Werner, the Trustee shall invest that part of the Trust Fund
representing amounts other than Company stock in mutual funds designated
by the Company. The particular funds and the terms and conditions of
investment therein shall be the sole responsibility of the Company. To
the extent that such control is asserted by Hein-Werner with respect to
the affected assets, the Trustee shall only be charged with the
responsibility to execute Hein-Werner's directions with reasonable
diligence and care.
ARTICLE IX. FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
Section 9.01. Fiduciaries. The Board, the Administrator and
the Trustee shall be deemed to be the only fiduciaries, named and
otherwise, of the Plan and Trust Fund for all purposes of ERISA. No named
fiduciary designated in this Section shall be required to give any bond or
other security for the faithful performance of its duties and
responsibilities with respect to the Plan and/or the Trust Fund, except as
may be required from time to time under ERISA.
Section 9.02. Allocation of Fiduciary Responsibilities. The
fiduciary responsibilities (within the meaning of ERISA) allocated to each
named fiduciary designated in Section 9.01 hereof shall consist of the
responsibilities, duties, authority and discretion of such named fiduciary
which are expressly provided herein and in any related documents,
including but not limited to any agreement or agreements entered into
between Hein-Werner and the Trustee. Each such named fiduciary may obtain
the services of such legal, actuarial, accounting, investment and other
assistants as it deems appropriate, any of whom may be assistants who also
render services to any other named fiduciary, the Plan and/or a Company;
provided, however, that where such services are obtained, the named
fiduciary shall not be deemed to have delegated any of its fiduciary
responsibilities to any such assistant but shall retain full and complete
authority over and responsibility for any activities of such assistant.
Section 9.03. General Limitation on Liability. Neither the
Board, the Administrator, nor any other person or entity, including a
Company and its shareholders, directors and employees, guarantees the
Trust Fund in any manner against loss or depreciation, and none of them
shall be jointly or severally liable for any act or failure to act or for
anything whatever in connection with the Plan and the Trust Fund, or the
administration thereof, except and only to the extent of liability imposed
because of a breach of fiduciary responsibility specifically prohibited
under ERISA.
Section 9.04. Responsibility for Co-Fiduciaries. The members
of the Board shall not be jointly or severally responsible for any act or
failure to act of the Administrator or the Trustee, except as may be
otherwise specifically provided under ERISA. The Administrator shall not
be responsible for any act or failure to act of the Board or the Trustee,
except as may be otherwise specifically provided under ERISA. The Trustee
shall not be responsible for any act or failure to act of the
Administrator or the Board, except as may be otherwise specifically
provided under ERISA.
Section 9.05. Multiple Fiduciary Capacities. Any person or
group of persons may serve in more than one fiduciary capacity with
respect to the Plan and/or the Trust Fund.
ARTICLE X. AMENDMENT AND TERMINATION
Section 10.01. Amendment. Hein-Werner shall have the right by
majority vote of the Board to amend this Agreement and/or the Plan at any
time and in any manner consistent with the Code and ERISA; provided,
however, that any amendment which increases the duties or responsibilities
of the Trustee shall be effective only with the Trustee's consent. The
Administrator shall have the authority to amend the Plan in any respect it
deems necessary to comply with the Code or ERISA or to obtain a
determination letter or ruling from the Internal Revenue Service with
respect to the Plan's compliance with the Code. Any amendment may be
retroactive to the extent permitted by applicable law. Notwithstanding
the foregoing, no amendment to the Plan shall decrease a Participant's
accrued benefit or vested percentage or eliminate an optional form of
distribution for a previously accrued benefit.
Section 10.02. Termination. Hein-Werner shall have the right to
terminate the Plan by a majority vote of the Board at any time and in such
event, upon any other termination or partial termination, or upon
termination due to permanent discontinuance of all Company contributions,
the Trust Fund shall be fully vested and nonforfeitable to the extent of
the termination. The Trustee in its discretion may first require Internal
Revenue Service approval of the termination before making a distribution
under this Section.
ARTICLE XI. GENERAL PROVISIONS
Section 11.01. Non-Guarantee of Continued Association or Other
Benefits. Neither the establishment of the Plan, nor any modification or
amendment thereof, nor the payment of benefits hereunder shall be
construed as giving any Participant, or other person whomsoever any legal
or equitable right against any Company, the individual officers and
employees of the Companies, the Board, its members, the Administrator, or
the Trustee, or the right to the payment of any benefits hereunder (unless
the same shall be specifically provided herein) or as giving any employee
the right to continue his employment with the Companies or as affecting
the Companies' right to sever such employment.
Section 11.02. Mergers, Consolidations and Transfers of Plan
Assets. In the case of any merger, consolidation with, or transfer of
assets or liabilities to any other plan, each Participant must be entitled
to receive a benefit immediately after the merger, consolidation, or
transfer (if the governing plan were then to terminate) which is equal to
or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan
then terminated).
Section 11.03. Spendthrift Clause. No Participant, former
Participant, Beneficiary, or other person entitled to benefits hereunder
shall have the right to transfer, assign, alienate, anticipate, pledge or
encumber any part of such benefits, nor shall such benefits, or any part
of the Trust Fund from which such benefits are payable, be subject to
seizure by legal process by any creditor of such Participant, former
Participant, Beneficiary, or other person. Any attempt to effect such a
diversion or seizure as aforedescribed shall be deemed null and void for
all purposes hereunder. Notwithstanding the foregoing, the Trustee may
recognize a qualified domestic relations order with respect to child
support, alimony payments or marital property rights if such order
contains sufficient information for the Administrator to determine that it
meets the applicable requirements of Code Section 414(p); if any such
order so directs, distribution of benefits to the alternate payee may be
made at a time not permitted for distributions to the Participant. The
Administrator shall establish written procedures concerning the
notification of interested parties and the determination of the validity
of such orders. The actuarial assumptions that may be needed from time to
time shall be the interest and mortality rates used by the Pension Benefit
Guaranty Corporation for the July 1 of the calendar year preceding the
year in which the calculation is necessary.
Section 11.04. Exclusive Benefit. Anything in the Plan which
might be construed to the contrary notwithstanding, it shall be impossible
at any time prior to the satisfaction of all liabilities with respect to
Participants or their Beneficiaries under the Plan for any part of the
Trust Fund assets to be used for, or diverted to, purposes other than the
exclusive benefit of such Participants or their Beneficiaries and
defraying the reasonable expenses of administering the Plan and the Trust
Fund. In no event shall a Company receive at any time any amounts from
such assets, except as provided in Sections 3.06 and 4.08 hereof.
Section 11.05. Full Satisfaction of Claims. Any payment or
distribution of any Participant, former Participant, or Beneficiary shall
be in full satisfaction of all claims against the Trust Fund, the Trustee,
the Administrator, and the Companies and shall give rise to no claim or
liability notwithstanding it shall later appear that such payment or
distribution was made under a mistake of fact or law, except as otherwise
specifically provided by the Code or ERISA. No payment shall be made
hereunder which would be in violation of any applicable law or
governmental regulation as determined by the Administrator.
Section 11.06. General Limitation on Liability. Neither the
Companies, the Administrator, the Board, its respective past, present and
future members, the Trustee, nor any other person, future shareholders,
officers and employees, nor any agents of the foregoing, guarantees the
Trust Fund in any manner against loss or depreciation, and none of them
shall be jointly or severally liable for any act or failure to act or for
anything whatever in connection with the Plan and the Trust Fund, or the
administration thereof, except and only for the extent of liability
imposed because of willful misconduct or bad faith shown in the taking or
failure to take such action.
Section 11.07. Indemnification. Hein-Werner shall indemnify
any director and/or employee of the Companies who acts with respect to the
Plan as a member of the Board or the Administrator and shall hold any such
director and/or employee harmless from the consequences of his acts or
conduct in connection with the Plan except to the extent that such
consequences are the result of willful misconduct or bad faith shown on
the part of such director and/or employee.
Section 11.08. Counterparts. This Agreement may be executed in
a number of counterparts, each of which shall be deemed an original, and
such counterparts shall constitute but one and the same instrument and may
be sufficiently evidenced by any one counterpart.
Section 11.09. Successors and Assigns. This Agreement and the
Plan herein contained shall be binding upon the successors and assigns of
Hein-Werner and the Trustee.
Section 11.10. IRS Approval. Any other provision hereof to the
contrary notwithstanding, the effectiveness of this restatement is subject
to the condition subsequent that Hein-Werner obtain a determination from
the Internal Revenue Service that the Plan meets the requirements for
qualification contained in Code Section 401(a) and that the Trust Fund is
exempt under Code Section 501(a).
Section 11.11. Top-Heavy Restrictions. (a) Notwithstanding any
provision to the contrary herein, in accordance with Code Section 416, if
the Plan is a top-heavy plan for any Plan Year, then the provisions of
this Section shall be applicable. The Plan is "top-heavy" for a Plan Year
if as of its "determination date" (i.e. the last day of the preceding Plan
Year or the last day of the Plan's first Plan Year, whichever is
applicable), the total present value of the accrued benefits of key
employees (as defined in Code Section 416(i)(1) and applicable
regulations) exceeds sixty percent (60%) of the total present value of the
accrued benefits of all employees under the plan (excluding those of
former key employees and employees who have not performed any service
during the preceding five (5) year period) (as such amounts are computed
pursuant to Section 416(g) and applicable regulations using a five percent
(5%) interest assumption and a 1971 GAM mortality assumption) unless such
plan can be aggregated with other plans maintained by the applicable
controlled group in either a permissive or required aggregation group and
such group as a whole is not top-heavy. Any nonproportional subsidies for
early retirement and benefit options are counted assuming commencement at
the age at which they are most valuable. In addition, a plan is top-heavy
if it is part of a required aggregation group which is top-heavy. Any
plan of a controlled group may be included in a permissive aggregation
group as long as together they satisfy the Code Section 401(a)(4) and 410
discrimination requirements. Plans of a controlled group which must be
included in a required aggregation group include any plan in which a key
employee participates or participated at any time during the determination
period (regardless of whether the plan has terminated) and any plan which
enables such a plan to meet the Section 401(a)(4) or 410 discrimination
requirements. The present values of aggregated plans are determined
separately as of each plan's determination date and the results aggregated
for the determination dates which fall in the same calendar year. A
"controlled group" for purposes of this Section includes any group
employers aggregated pursuant to Code Sections 414(b), (c) or (m). The
calculation of the present value shall be done as of a valuation date
which for a defined contribution plan is the determination date and for a
defined benefit plan is the date as of which funding calculations are
generally made within the twelve month period ending on the determination
date. Solely for the purpose of determining if the Plan, or any other
plan included in a required aggregation group of which this Plan is a
part, is top-heavy (within the meaning of Code Section 416(g)), the
accrued benefit of an Employee other than a key employee within the
meaning of Code Section 416(i)(1)) shall be determined under (i) the
method, if any, that uniformly applies for accrual purposes under all
plans maintained by the Affiliates, or (ii) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Code Section 411(b)(1)(C).
(b) If a defined contribution plan is top-heavy in a Plan Year,
non-key employee participants who have not separated from service at the
end of such Plan Year will receive allocations of employer contributions
and forfeitures at least equal to the lesser of three percent (3%) of
compensation (as defined in Code Section 415) for such year or the
percentage of compensation allocated on behalf of the key employee for
whom such percentage was the highest for such year (including any salary
reduction contributions). If a defined benefit plan is top-heavy in a
Plan Year and no defined contribution plan is maintained, the employer-
derived accrued benefit on a life only basis commencing at the normal
retirement age of each non-key employee shall be at least equal to a
percentage of the highest average compensation for five consecutive years,
excluding any years after such Plan permanently ceases to be top-heavy,
such percentage being the lesser of (i) twenty percent (20%) or (ii) two
percent (2%) times the years of service after December 31, 1983 in which a
Plan Year ends in which the Plan is top-heavy. If the controlled group
maintains both a defined contribution plan and a defined benefit plan
which cover the same non-key employee, such employee will only be entitled
to the defined benefit plan minimum and not to the defined contribution
plan minimum.
(c) If the controlled group maintains a defined benefit plan
and a defined contribution plan which both cover one or more of the same
key employees, and if such plans are top-heavy, then the limitation stated
in a separate provision of this Plan with respect to the Code Section
415(e) maximum benefit limitations shall be amended so that a 1.0
adjustment on the dollar limitation applies rather than a 1.25 adjustment.
This provision shall not apply if the Plan is not "super top-heavy" and if
the minimum benefit requirements of this Section are met when two percent
(2%) is changed to three percent (3%) and twenty percent (20%) is changed
to an amount not greater than thirty percent (30%) which equals twenty
percent (20%) plus one percent (1%) for each year such plan is top-heavy.
A plan is "super top-heavy" if the ratio referred to in subsection (a)
above results in a percentage in excess of ninety percent (90%) rather
than a percentage in excess of sixty percent (60%).
Section 11.12. Retroactive Effective Date. Sections 1.01(g)
and 3.02(e)(ii) through (viii) shall apply retroactively from and after
January 1, 1997. Section 3.07 shall apply to reemployments on and after
December 12, 1994.
Section 11.13. Direct Transfer of Eligible Rollover
Distributions. i. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed
by the Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the distributee, except
that an eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten (10) years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) An eligible retirement plan is an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described
in Section 403(a) of the Code, or a qualified trust described in Section
401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution
to the surviving Spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(d) A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving Spouse and the
employee's or former employee's Spouse or former Spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest
of the Spouse or former Spouse.
(e) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
ARTICLE XII. TRUSTEE ACCEPTANCE
Section 12.01. Effective Date of Acceptance. Effective as of
the execution date hereof, the Trustee accepts the trust hereby contained
and agrees to be bound by all of the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and attested in duplicate originals by their
respective officers thereunder duly authorized, with their respective
corporate seals to be hereunto affixed, all as of the day and year first
above written.
HEIN-WERNER CORPORATION
By: /s/ Joseph L. Dindorf
Attest: /s/ Christopher B. Decker
(Corporate Seal)
FIRST BANK (N.A.)
as Trustee
By: /s/ Cheryl Ludtke
Attest: /s/
(Corporate Seal)
EXHIBIT (5)
F O L E Y & L A R D N E R
A T T O R N E Y S A T L A W
CHICAGO FIRSTAR CENTER SAN DIEGO
JACKSONVILLE 777 EAST WISCONSIN AVENUE SAN FRANCISCO
LOS ANGELES MILWAUKEE, WISCONSIN 53202-5367 TALLAHASSEE
MADISON TELEPHONE (414) 271-2400 TAMPA
ORLANDO FACSIMILE (414) 297-4900 WASHINGTON, D.C.
SACRAMENTO WEST PALM BEACH
WRITER'S DIRECT LINE
March 25, 1998
Hein-Werner Corporation
2120 Pewaukee Road
Waukesha, Wisconsin 53188-2404
Ladies and Gentlemen:
We have acted as counsel for Hein-Werner Corporation, a
Wisconsin corporation (the "Company"), in conjunction with the preparation
of a Form S-8 Registration Statement (the "Registration Statement") to be
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended ("Securities Act"), relating to 100,000
shares of the Company's common stock, $1.00 par value (the "Common
Stock"), the associated rights to purchase shares of Common Stock
accompanying each share of Common Stock ("Rights") and interests in the
Hein-Werner Corporation Retirement and Savings Plan and Trust, as amended
to date (the "Plan"), which may be issued or acquired pursuant to the
Plan. The terms of the Rights are as set forth in that certain Rights
Agreement, dated as of May 9, 1989, by and between the Company and Firstar
Trust Company (formerly First Wisconsin Trust Company) (the "Rights
Agreement").
As such counsel, we have examined: (i) the Plan; (ii) the
Registration Statement; (iii) the Company's Restated Articles of
Incorporation and Bylaws as amended to date; (iv) the Rights Agreement;
(v) resolutions of the Company's Board of Directors relating to the Plan
and the issuance of securities thereunder; and (vi) such other
proceedings, documents and records as we have deemed necessary to enable
us to render this opinion.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing under the
laws of the State of Wisconsin.
2. It is presently contemplated that the shares of Common
Stock to be acquired under the Plan will either be purchased in the open
market, acquired in privately negotiated transactions or acquired directly
from the Company. To the extent the shares of Common Stock to be acquired
under the Plan shall constitute shares newly issued by and acquired
directly from the Company, such shares of Common Stock, when issued
pursuant to the terms and conditions of the Plan, and as contemplated in
the Registration Statement, will be validly issued, fully paid and
nonassessable, except with respect to wage claims of, or other debts owing
to, employees of the Company for services performed, but not exceeding six
months' service in any one case, as provided in Section 180.0622(2)(b) of
the Wisconsin Business Corporation Law and judicial interpretations
thereof.
3. The Rights when issued pursuant to the terms of the Rights
Agreement will be validly issued.
We consent to the use of this opinion as an exhibit to the
Registration Statement. In giving our consent, we do not admit that we
are "experts" within the meaning of Section 11 of the Securities Act, or
within the category of persons whose consent is required by Section 7 of
said Act.
Maurice J. McSweeney, a partner of Foley & Lardner, is a
director and the Secretary of the Company.
Very truly yours,
/s/ Foley & Lardner
FOLEY & LARDNER
EXHIBIT 23.1
Consent of KPMG Peat Marwick LLP
The Board of Directors
Hein-Werner Corporation:
We consent to incorporation by reference in this registration statement on
Form S-8 of Hein-Werner Corporation of our reports dated February 14,
1997, relating to the consolidated balance sheets of Hein-Werner
Corporation and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of income and cash flows for each of the
years in the three-year period ended December 31, 1996, and related
financial statement schedule which reports appear in the December 31, 1996
Annual Report on Form 10-K of Hein-Werner Corporation.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
March 25, 1998
