Registration No. 33-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
HON INDUSTRIES INC.
(Exact Name of Registrant as Specified in Its Charter)
Iowa 42-0617510
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
414 East Third Street
P.O. Box 1109
Muscatine, Iowa 52761-0071
(Address of Principal Executive Offices Including Zip Code)
HON INDUSTRIES Inc. Profit-Sharing Retirement Plan
(Full Title of the Plan)
James I. Johnson, Esq.
Vice President, General Counsel and Secretary
HON INDUSTRIES Inc.
414 East Third Street
P.O. Box 1109
Muscatine, Iowa 52761-0071
(Name and Address of Agent For Service)
(319) 264-7400
(Telephone Number, Including Area Code, of Agent For Service)
With a copy to:
Elizabeth C. Kitslaar, Esq.
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 60601-1692
(312) 269-4114
CALCULATION OF REGISTRATION FEE
Title Of Securities Amount To Proposed Proposed Amount Of
To Be Registered Be Maximum Maximum Registra-
Registered Offering Aggregate tion Fee
(1) Price Offering
Per Price(2)
Share(2)
Common Stock, $1.00 3,000,000 $17.84 $53,520,000 $14,130
par value (including
Preferred Share
Purchase Rights to
purchase shares of
Series A Junior
Participating
Preferred Stock,
$1.00 par value)
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement
also covers an indeterminate amount of interests to be
offered or sold pursuant to the HON INDUSTRIES Inc. Profit-
Sharing Retirement Plan, as amended (the "Plan"), as
described herein.
(2) Estimated solely for the purpose of calculating the amount
of the registration fee pursuant to paragraphs (c) and (h)
of Rule 457 under the Securities Act, on the basis of the
average of high and low sale prices of the shares of Common
Stock, $1.00 par value (the "Common Stock"), of HON
INDUSTRIES Inc. (the "Company"), on the New York Stock
Exchange, Inc. on February 25, 2000.
PART I
Information Required in the Section 10(a) Prospectus
The documents containing the information specified in Part I
of Form S-8 will be sent or given to participating employees as
specified by Rule 428(b)(1) of the Securities Act, but are not
filed with the Securities and Exchange Commission either as part
of this Registration Statement or as a prospectus or prospectus
supplement pursuant to Rule 424. These documents and the
documents incorporated by reference into this Registration
Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II
Information Required in the Registration Statement
Item 3. Incorporation of Documents by Reference
The following documents filed by HON INDUSTRIES Inc. (the
"Company" or the "Registrant") with the Commission are
incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year
ended January 2, 1999, filed with the Commission on
March 29, 1999;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended April 3, 1999, filed with the Commission
on May 14, 1999;
(c) The Company's Quarterly Report on Form 10-Q for the
quarter ended July 3, 1999, filed with the Commission on
August 5, 1999;
(d) The Company's Quarterly Report on Form 10-Q for the
quarter ended October 2, 1999, filed with the Commission
on November 12, 1999;
(e) The description of the Company's Common Stock contained
in the Company's Registration Statement on Form 8-A
filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (File No. 001-14225) on
June 12, 1998; and
(f) The description of the Company's Preferred Share
Purchase Rights contained in the Company's Registration
Statement on Form 8-A/A filed under the Exchange Act
(File No. 001-14225) on September 14, 1998.
All other documents filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment indicating that
all securities offered under this Registration Statement have
been sold, or deregistering all securities then remaining unsold,
are also incorporated by reference and shall be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superceded for purposes of this Registration
Statement to the extent that a statement contained herein or in
any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supercedes such
statement. Any such statement so modified or superceded shall
not be deemed, except as so modified or superceded, to constitute
a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
As permitted by the Iowa Business Corporation Act ("IBCA"),
the Company's Articles of Incorporation, as amended (the
"Articles") provide that no director shall be personally liable
to the Company or any shareholder for monetary damages for breach
of fiduciary duty as a director, except for: (i) a breach of the
director's duty of loyalty to the Company or its shareholders;
(ii) acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of the law; (iii) a
transaction from which the director derived an improper personal
benefit; or (iv) an improper act related to the payment of
dividends or approval of a stock purchase in violation of Section
833 of the IBCA. While the Articles provide protection from
awards for monetary damages for breaches of the duty of care,
they do not eliminate the director's duty of care. Accordingly,
the Articles will not affect the availability of equitable
remedies, such as an injunction, based on a director's breach of
the duty of care.
In addition, the Company's By-laws provide that (i) no
director of the Company shall be liable to the Company or any
shareholder except as provided in the Articles or by the
applicable law; (ii) the liability of directors shall be limited
or removed to the maximum extent provided by the Articles or
applicable law; (iii) no officer of the Company shall be liable
to any shareholder for any act, omission or negligence, except
for loss directly resulting from his or her willful or reckless
misconduct; and (iv) the liability of officers shall be limited
or removed to the maximum extent provided by the By-laws, the
Articles or applicable law.
The By-laws also provide that the Company may advance
expenses and indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding (whether civil, criminal,
administrative, or investigative including, without limitation,
an action or suit by or in the right of the Company
(collectively, "Action")) by reason of the fact that he or she is
or was a director, officer, employee, member, if any, volunteer
or agent of the Company, or is or was serving at the request of
the Company as a director, officer, partner, trustee, employee,
member, if any, volunteer or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise
or employee benefit plan (each a "Qualified Person"). The
indemnification, which may be made in any manner not prohibited
by Iowa law, may be against expenses (including attorneys' fees),
judgments, fines and amounts paid or incurred in settlement which
the Qualified Person actually and reasonably incurred in
connection with the Action. Indemnification shall not be
provided in any case for (i) a breach of a person's duty of
loyalty to the Company; (ii) acts or omissions not in good faith
or which involve intentional misconduct or knowing violation of
the law; (iii) a transaction from which the person derives an
improper personal benefit; or (iv) proceedings by or in the right
of the Company unless permitted by the IBCA. The By-laws also
provide that a Qualified Person shall be indemnified against
actually and reasonably incurred expenses in connection with any
Action to the extent such Qualified Person has been successful on
the merits or otherwise in defense of such Action or in the
defense of any claim, issue or matter therein.
The Company has director and officer liability insurance in
the amount of $30,000,000, under which each director and each of
certain officers of the Company is insured against certain
liabilities. The Company has also entered into agreements with
its directors and officers agreeing to indemnify them against
certain liabilities to the fullest extent permitted under Iowa
law.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits
Exhibit Number Description
4.1 Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.i to the
Registrant's Quarterly Report on Form 10-Q for
the quarter ended October 3, 1998).
4.2 By-laws of the Registrant (incorporated by
reference to Exhibit 3.ii to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended October 3, 1998).
4.3 Rights Agreement, dated as of August 13, 1998, by
and between the Registrant and Harris Trust and
Savings Bank, as Rights Agent (incorporated by
reference to Exhibit 4.1 to Registration
Statement on Form 8-A/A filed September 14,
1998).
4.4 HON INDUSTRIES Inc. Profit-Sharing Retirement
Plan, as amended and restated as of January 1,
1998.
Registrant shall submit the Plan and any
amendments thereto to the Internal Revenue
Service (the "IRS") in a timely manner and will
make all changes required by the IRS in order to
qualify the Plan.
23.2 Consent of Independent Public Accountants.
24.1 Power of Attorney.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar amount would not exceed that which is
registered) and any deviation from the low or high and
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
Registration Statement.
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement
is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-
effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(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, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Muscatine, State of Iowa, on February 29, 2000.
HON INDUSTRIES Inc.
By: /s/ Jack D. Michaels
Jack D. Michaels
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act,
this Registration Statement has been signed by the following
persons in the capacities and on the date indicated:
Signature Title Date
/s/Jack D. Michaels Chairman, President February 29, 2000
Jack D. Michaels and Chief Executive
Officer (principal
executive officer)
/s/Melvin L. McMains Vice President and February 29, 2000
Melvin L. McMains Controller(princi-
pal accounting
officer)
/s/David C. Stuebe Vice President and February 29, 2000
David C. Stuebe Chief Financial
Officer (principal
financial officer)
/s/Robert W. Cox* Director February 29, 2000
Robert W. Cox
/s/Cheryl A. Francis* Director February 29, 2000
Cheryl A. Francis
/s/W August Hillenbrand* Director February 29, 2000
August W. Hillenbrand
/s/Stanley M. Howe* Director February 29, 2000
Stanley M. Howe
/s/Robert L. Katz* Director February 29, 2000
Robert L. Katz
/s/Moe S. Nozari* Director February 29, 2000
Moe S. Nozari
/s/Richard H. Stanley* Director February 29, 2000
Richard H. Stanley
/s/Brian E. Stern* Director February 29, 2000
Brian E. Stern
/s/Lorne R. Waxlax* Director February 29, 2000
Lorne R. Waxlax
* James I. Johnson, the undersigned attorney-in-fact, by signing
his name hereto, does hereby sign and execute this Registration
Statement on behalf of the above indicated directors of the
Registrant (constituting a majority of the directors) pursuant to
a Power of Attorney filed with the Commission as Exhibit 24.1
hereto.
February 29, 2000 By:/s/James I. Johnson
Name: James I. Johnson
Title: Vice President, General
Counsel and Secretary
Pursuant to the requirements of the Securities Act, the
trustees (or other persons who administer the Plan) have duly
caused this Registration Statement to be signed on behalf of the
undersigned, thereunto duly authorized, in the City of Muscatine,
State of Iowa, on February 29, 2000.
HON INDUSTRIES INC. PROFIT-SHARING
RETIREMENT PLAN
By:/s/Jeffrey D. Fick
Name: Jeffrey D. Fick
Title: Chairman of the Administrative
Committee
EXHIBIT INDEX
Exhibit Description Sequentially
Number Numbered Page
4.1 Articles of Incorporation of the --
Registrant (incorporated by
reference to Exhibit 3.i to the
Registrant's Quarterly Report on
Form 10-Q for the quarter ended
October 3, 1998).
4.2 By-laws of the Registrant --
(incorporated by reference to
Exhibit 3.ii to the Registrant's
Quarterly Report on Form 10-Q for
the quarter ended October 3,
1998).
4.3 Rights Agreement, dated as of --
August 13, 1998, by and between
the Registrant and Harris Trust
and Savings Bank, as Rights Agent
(incorporated by reference to
Exhibit 4.1 to Registration
Statement on Form 8-A/A filed
September 14, 1998).
4.4 HON INDUSTRIES Inc. Profit-Sharing 11
Retirement Plan, as amended and
restated as of January 1, 1998.
23.2 Consent of Independent Public 89
Accountants.
24.1 Power of Attorney. 90
EXHIBIT 4.4
HON INDUSTRIES INC.
PROFIT-SHARING RETIREMENT PLAN
(As Amended and Restated Effective as of January 1, 1998)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 The Plan 1
1.1 The Plan 1
1.2 Applicable Law 2
1.3 Severability 2
ARTICLE 2 Definitions 2
2.1 Account 2
2.2 Active Participant 2
2.3 Administrative Committee 2
2.4 Affiliate 2
2.5 After Tax Contributions 3
2.6 After Tax Contributions Account 3
2.7 Before Tax Contributions 3
2.8 Before Tax Contributions Account 3
2.9 Beneficiary 3
2.10 Board of Directors 3
2.11 Code 3
2.12 Company 3
2.13 Company Ownership Contributions 3
2.14 Company Ownership Contributions Account 3
2.15 Compensation 3
2.16 Disabled or Disability 4
2.17 Early Retirement Age 4
2.18 Eligibility Service 4
2.19 Employer 4
2.20 Employer Contributions 4
2.21 ERISA 4
2.22 ESOP Account 4
2.23 ESOP Contributions 4
2.24 Fund 5
2.25 Fund Committee 5
2.26 Highly Compensated Member 5
2.27 Hour of Service 5
2.28 Leased Employee 6
2.29 Member 7
2.30 Normal Retirement Age 7
2.31 One-Year Break in Service 7
2.32 Participant 7
2.33 Plan 7
2.34 Plan Administrator 7
2.35 Plan Year 7
2.36 Profit Sharing Contributions 7
2.37 Profit Sharing Contributions Account 7
2.38 Prior Plan Account 7
2.39 Qualified Nonelective Contributions 8
2.40 Qualified Nonelective Contributions Account 8
2.41 Retirement Contributions 8
2.42 Retirement Contributions Account 8
2.43 Rollover Contributions 8
2.44 Rollover Contributions Account 8
2.45 Termination of Employment or Terminates
Employment 8
2.46 Trust Agreement 8
2.47 Trustee 8
2.48 Trust Fund 8
2.49 Valuation Date 9
2.50 Vesting Service 9
ARTICLE 3 Participation 9
3.1 Eligible Members 9
3.2 Commencement of Participation 9
3.3 Eligibility Service 9
3.4 Enrollment 10
3.5 Duration of Participation 10
3.6 Participation by Acquired Companies 11
ARTICLE 4 Contributions 11
4.1 Employer Contributions 11
4.1.1 Retirement Contribution 11
4.1.2 Profit Sharing Contribution 11
4.1.3 Company Ownership Contribution 12
4.1.4 Qualified Nonelective Contributions 12
4.1.5 Transferred Members 12
4.1.6 Profits 13
4.1.7 Insufficient Profits 13
4.1.8 Time of Employer Contribution 13
4.1.9 Reduction of Employer Contributions 13
4.1.10 ESOP Allocation 13
4.2 Before Tax Contributions 14
4.2.1 Percentage Limitation 14
4.2.2 Timing of Contributions 14
4.3 After Tax Contributions 14
4.4 Rollover Contributions 15
4.4.1 Direct Rollovers 15
4.4.2 Rollover Contributions Accounts 15
4.5 Transfers from HON Members Company Ownership
Plan 15
4.6 Dividends 16
ARTICLE 5 Limitations on Contributions 16
5.1 Excess Before-Tax Contributions 16
5.2 ADP Test 17
5.3 ACP Test 19
5.4 Multiple Use of Alternative Limitation 20
5.5 Monitoring Procedures 21
5.6 Testing Procedures 22
5.7 Return of Contributions to Employers 23
5.8 Maximum Additions 23
5.9 Maximum Benefits 24
5.10 Definitions 26
5.11 Funding Policy 27
ARTICLE 6 Vesting Rules 27
6.1 Nonforfeitable Accounts 27
6.2 Forfeitable Accounts 27
6.3 Time of Forfeiture 27
6.4 Vesting Service 28
6.5 Vesting Upon Change in Control 29
6.6 Vesting Upon the Disposition or Cessation of
a Business 31
6.7 Vesting Upon Acquisition of a Business 31
ARTICLE 7 Investments and Accounting 31
7.1 Investments 31
7.2 Accounting 32
7.3 Allocation of Forfeitures 33
7.4 Expenses 33
7.5 Allocation of Contributions 34
7.6 Limited Transfers to Rollover Account 34
(a) Elections 34
(b) Amount Subject to Election 34
(c) Qualified Participants 35
(d) Revocation of Elections 35
(e) De Minimis Amounts 35
(f) Time of Distribution 35
ARTICLE 8 Distributions 35
8.1 In-Service and Hardship Withdrawals 35
8.2 Entitlement to Distribution upon Termination
of Employment 37
8.2.1 Termination of Employment 37
8.2.2 Disable Participants 38
8.2.3 Limitaion on Duration of Payout 38
8.2.4 Distributions in Excess of $5,000 39
8.2.5 Distributions Not in Excess of $5,000 39
8.2.6 Distributions Upon a Disposition of
Certain Assets or Sale of a Subsidiary 39
8.3 Distribution After Disposition 40
8.4 Acceleration of Installment Payments to a
Beneficiary who is a Surviving Spouse 40
8.5 Due Date For Benefit Payments 41
8.6 Designation of Beneficiary 42
8.7 Facility of Distribution 43
8.8 Nonassignability 43
8.9 Tax Withholding 44
8.10 Direct Rollovers 44
8.11 Military Service 45
ARTICLE 9 Plan Loans 45
9.1 Eligibility 45
9.2 Loan Amounts 46
9.3 Source of Loan 46
9.4 Loan Terms 47
9.5 Security 48
9.6 Additional Terms 49
9.7 Suspension of Payments During Military
Service 49
ARTICLE 10 Top-Heavy Provisions 49
10.1 Application of Top-Heavy Provisions 49
10.2 Definitions 50
10.2.1 Aggregation Group 50
10.2.2 Determination Date 50
10.2.3 Key Employee 50
10.2.4 Section 416 Account 51
10.2.5 Compensation 52
10.2.6 A Year of Top-Heavy Service 52
10.3 Vesting Requirements 52
10.4 Minimum Contribution 53
10.5 Limit on Annual Additions: Combined Plan
Limit 53
ARTICLE 11 Administration 53
11.1 Plan Administrator 53
11.2 Committees: In General 53
11.3 Fund Committee 54
11.4 Administrative Committee 55
11.5 Interested Member 57
11.6 Individual Statement 57
11.7 Application for Benefits 57
11.8 Review of Claims 57
11.8.1 Initial Review 57
11.8.2 Appeal Procedure 58
11.9 Employer-Employee Relationship 58
11.10 Expenses of Administration 59
11.11 Indemnification 59
11.12 Disclaimer of Employer Liability 59
11.13 Notice of Address 59
ARTICLE 12 Stock Rights and Restrictions 60
12.1 Voting Rights 60
12.2 Rights on Tender or Exchange Offer 61
ARTICLE 13 Financing 62
13.1 Financing 62
13.2 Contributions 62
13.3 Nonreversion 62
ARTICLE 14 Amendment, Termination or Merger 62
14.1 Amendment to Conform with Laws and
Regulations 62
14.2 Other Amendments; Termination 63
14.3 Adoption and Form of Amendment or
Termination 63
14.4 Limitations on Power to Amend 63
14.5 Continuance of Powers 64
14.6 Merger or Consolidation or Transfer 64
14.7 Action by Company 64
ARTICLE 15 Adoption by Affiliates 64
15.1 Procedure for Becoming an Employer 64
APPENDIX A Prior Plan Accounts 65
A-1.1 Introduction 65
A-1.2 Separate Accounts 65
A-1.3 Vesting 66
A-1.4 Investments 66
A-1.5 Distributions 66
A-1.6 Death Benefits 67
(a) Pre-Retirement Death Benefit 67
(b) Post-Retirement Death Benefit 68
A-1.7 Definitions 68
(a) "Annuity Starting Date" 68
(b) "Qualified Election" 68
(c) "Qualified Joint and Survivor Annuity
Notice" 69
(d) "Qualified Joint and Survivor Annuity" 69
(e) "Qualified Survivor Annuity" 69
A-1.8 In-Service Withdrawals 69
A-1.9 Participant Loans 69
APPENDIX B Service Crediting Acquired Businesses 70
B-1.1 AHC Inc. 70
B-1.2 Allsteel Inc. 70
B-1.3 Aladdin Steel Products, Inc. 70
<PAGE>
HON INDUSTRIES INC.
PROFIT-SHARING RETIREMENT PLAN
ARTICLE 1
The Plan
1.1 The Plan. The HON INDUSTRIES Inc. Profit-Sharing
Retirement Plan is hereby amended and restated, effective
January 1, 1998.
The Plan was established, effective January 6, 1960, as
the "HON Employees' Profit-Sharing and Retirement Plan and Trust
Agreement." The Plan was amended and restated, effective
January 4, 1976, in order to comply with the provisions of ERISA,
and was further amended and restated, effective December 15,
1978. Effective January 2, 1983, Plan was amended and restated
as the "HON INDUSTRIES INC. PROFIT-SHARING RETIREMENT PLAN,"
effective January 2, 1983. The Plan was thereafter amended and
restated effective as of January 4, 1987, and effective as of
January 2, 1989 (except where a different date was expressly
provided), to embody operational changes adopted to conform with
the Tax Reform Act of 1986 and subsequent legislation.
This amendment and restatement supersedes and replaces
all prior amendments and restatements of the Plan and amendments
thereto, which are effective on or after January 1, 1989, and
prior to January 1, 1998. In addition, this amendment and
restatement reflects the merger of the HON Members Company Stock
Ownership Plan ("ESOP") into the Plan, effective as of the date
on which the Internal Revenue Service issues a favorable
determination letter with respect to the ESOP, as amended.
Participants who retired or terminated their employment
prior to January 1, 1998, shall look solely to the prior versions
of the Plan for their benefits, if any, payable in accordance
with the applicable prior version, except as such provisions may
be modified by a provision of this Plan with an earlier effective
date.
The Plan is a single plan (within the meaning of Code
section 414(l)) and is intended to be (a) a profit sharing plan
under Code section 401(a) with a cash or deferred arrangement
under Code section 401(k), and (b) with respect to the Company
Ownership Contributions Account and ESOP Account, an "employee
stock ownership plan" under Code section 4975(e).
1.2 Applicable Law. To the extent not preempted by the
laws of the United States, the laws of the State of Iowa shall be
the controlling law in all matters relating to the Plan.
1.3 Severability. If a provision of this Plan shall be
held illegal or invalid, the illegality or invalidity shall not
affect the remaining parts of the Plan and the Plan shall be
construed and enforced as if the illegal or invalid provision had
not been included in this Plan.
ARTICLE 2
Definitions
Whenever used in the Plan the following terms shall have
the respective meanings set forth below, unless otherwise expressly
provided. Except when otherwise indicated by the context, any
masculine terminology shall include the feminine, and the
definition of any term in the singular shall include the plural.
2.1 Account means a Participant's After Tax Contributions
Account, Before Tax Contributions Account, Retirement
Contributions Account, Company Ownership Contributions Account,
Profit Sharing Contributions Account, Eligible Loan Account,
Rollover Contributions Account, ESOP Account, Qualified
Nonelective Contributions Account, Prior Plan Account and such
other accounts as the Administrative Committee may establish,
collectively or individually, as the context indicates.
2.2 Active Participant means a Participant who is a Member
and who currently satisfies the eligibility requirements set
forth in Section 3.1 for participation in the Plan.
2.3 Administrative Committee means the committee described
in Section 11.4.
2.4 Affiliate means any corporation which is a member of
the same controlled group of corporations (within the meaning of
Code Section 414(b)) as an Employer, any other trade or business
(whether or not incorporated) which is under common control with
an Employer (within the meaning of Code Section 414(c)), any
organization which is a member of an affiliated service group
(within the meaning of Code Section 414(m)) of which an Employer
is a member, and any other entity required to be aggregated with
an Employer pursuant to regulations under Code Section 414(o),
but only to the extent of the application aggregation
requirement.
2.5 After Tax Contributions means those contributions
made by a Participant under Section 4.3.
2.6 After Tax Contributions Account means the account
to which After Tax Contributions are credited.
2.7 Before Tax Contributions means those contributions
made by an Employer on behalf of a Participant pursuant to a
salary reduction agreement under Section 4.2.
2.8 Before Tax Contributions Account means the account
to which Before Tax Contributions are credited.
2.9 Beneficiary means the person or entity specified
under Section 8.6.
2.10 Board of Directors means the Board of Directors of
the Company.
2.11 Code means the Internal Revenue Code of 1986 and
the regulations thereunder.
2.12 Company means HON INDUSTRIES Inc. or any successor.
2.13 Company Ownership Contributions means those
contributions made by an Employer under Section 4.1.3.
2.14 Company Ownership Contributions Account means the
account to which Company Ownership Contributions are credited.
2.15 Compensation means, with respect to any Member, total
compensation reportable by the Employer for the calendar year on
the Member's Wage and Tax Statement (Form W-2) as remuneration
for the personal service of the Member. Notwithstanding the
preceding sentence, however, Compensation shall not include any
of the following items (even if includible in gross income):
reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation, and welfare
benefits, except that amounts not currently includible in income
by reason of the application of Code Sections 125 or 402(e)(3)
shall be included. In no event shall the Plan take into account
a Member's annual Compensation in excess of $160,000 (in 1998, as
adjusted pursuant to Code Section 401(a)(17)(B)).
2.16 Disabled or Disability means, as determined by the
Administrative Committee in its sole discretion, a Member's
inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment,
provided that (a) such impairment (i) is expected to result in
death, or (ii) is expected to last for a continuous period of not
less than 12 months, (b) such impairment has existed for a period
of at least three month, and (c) the Member is eligible for and
actually receiving disability benefits under the Social Security
Act. The Administrative Committee shall determine the date as of
which the Disability commenced.
2.17 Early Retirement Age means a Member's 55th birthday.
2.18 Eligibility Service means the service described in
Section 3.3.
2.19 Employer means the Company and any Affiliate which
adopts the Plan pursuant to Article 15.
2.20 Employer Contributions means Company Ownership
Contributions, Profit Sharing Contributions, Qualified
Nonelective Contributions and Retirement Contributions.
2.21 ERISA means the Employee Retirement Income Security
Act of 1974, as amended, and the regulations thereunder.
2.22 ESOP Account means, with respect to a Participant, the
account to which is credited amounts formerly maintained for such
Participant pursuant to the HON Members Company Ownership Plan.
2.23 ESOP Contributions means amounts transferred from the
HON Members Company Ownership Plan pursuant to Section 4.5.
2.24 Fund means the Investment Funds established under
Section 7.1, collectively or individually as the context
indicates.
2.25 Fund Committee means the committee described in
Section 11.3.
2.26 Highly Compensated Member means, effective January 1,
1997, for any Plan Year, any Member who (a) at any time during
the immediately preceding Plan Year received compensation (as
defined in Code Section 414(q)(7)) from the Employer or an
Affiliate in excess of $80,000, as adjusted by the Secretary of
the Treasury; or (b) at any time during the Plan year or
preceding Plan year was a 5-percent owner.
"Highly Compensated Member" shall include a former Member
whose Termination of Employment occurred prior to the Plan Year
and who was a Highly Compensated Member for the Plan Year in
which his Termination of Employment occurred or for any Plan Year
ending on or after his 55th birthday.
2.27 Hour of Service means
(a) an hour for which a Member is paid, or entitled to
payment, by the Employer or an Affiliate for the performance of
duties during the applicable computation period for which his
Hours of Service are being determined under the Plan;
(b) an hour for which he is directly or indirectly
paid, or entitled to payment, by the Employer or an Affiliate, on
account of a period of time during which no duties are performed
due to vacation, holiday, illness, disability, layoff, jury duty,
military duty, or leave of absence. Not more than 501 hours shall
be credited under this paragraph on account of any single continuous
period during which he performs no duties. An Hour of Service shall
not be credited on account of a payment made under a plan maintained
solely for the purpose of complying with worker's compensation,
unemployment compensation, or disability insurance laws, or on
account of a payment which solely reimburses a Member for
medically-related expenses;
(c) an hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer or an Affiliate, with no duplication of credit for
hours; and
(d) an hour for which he would normally be directly or
indirectly paid, or entitled to payment, by the Employer or
an Affiliate, on account of a period of time during which no
duties are performed due to an authorized leave of absence
for reason of the pregnancy of the Member, the birth of a
child of the Member, the placement of a child in connection
with the adoption of the child by the Member, or the caring
for the child during the period immediately following the
birth or placement for adoption. No more than 501 hours
shall be credited under this paragraph on account of any
single continuous period during which the Member performs no
duties on account of the above reasons. Such Hours of
Service shall be credited solely to prevent a One-Year Break
in Service in the computation period such absence occurs, or
in the event the Member already is credited with 501 or more
Hours of Service in such computation period, the following
computation period.
Hours of Service shall be credited to the appropriate
computation period as determined under Department of Labor
regulation 2530.200(b)-2(c) and shall be computed according
to Labor regulation 2530.200(b)-2(b). Hours of Service
shall be credited under this Section on the basis of months
of employment. In this regard, a Member shall be credited
with 190 Hours of Service for each month for which the
Member would be credited with at least one Hour of Service
under the provisions of this Section which precede this
paragraph. Pursuant to uniform, nondiscriminatory rules, an
Employer may also award Hours of Service for a period while
a Member is on an authorized leave of absence.
2.28 Leased Employee means a person who is not a common-law
employee of an Employer or Affiliate and who provides services to
an Employer or Affiliate as a "leased employee" within the
meaning of Code Section 414(n).
2.29 Member means (a) a person employed as a common-law
employee on the payroll of an Employer or an Affiliate, and (b) a
Leased Employee, but (c) does not include a person during the
period that such person was treated by an Employer or an
Affiliate as an independent contractor for federal income tax
purposes, regardless of whether such person is subsequently
reclassified as a common-law employee for such period.
2.30 Normal Retirement Age means a Member's 65th birthday.
2.31 One-Year Break in Service means a twelve-month
computation period in which a Member is credited with less than
501 Hours of Service.
2.32 Participant means (a) a Member who has satisfied the
eligibility requirements and attained the entry date specified by
Section 3.2, and (b) a person who no longer satisfies such
requirements but retains an interest in the Trust Fund.
2.33 Plan means the HON INDUSTRIES Inc. Profit-Sharing
Retirement Plan.
2.34 Plan Administrator means the person or entity
described in Section 11.1.
2.35 Plan Year means the calendar year.
2.36 Profit Sharing Contributions means those contributions
made by an Employer under Section 4.1.2.
2.37 Profit Sharing Contributions Account means the account
to which are credited: (a) all Employer Contributions made prior
to December 29, 1991, (b) Profit Sharing Contributions made after
December 28, 1991, (c) Retirement Contributions in excess of 2%
of the Member's Compensation made after December 28, 1991, and
before December 31, 1994, and (d) forfeitures.
2.38 Prior Plan Account means those accounts transferred to
and merged into the Plan from another tax-qualified plan in a
trustee-to-trustee transfer, as specified in Appendix A to the
Plan.
2.39 Qualified Nonelective Contributions means those
contributions made by an Employer under Section 4.1.4.
2.40 Qualified Nonelective Contributions Account means the
account to which Qualified Nonelective Contributions are
credited.
2.41 Retirement Contributions means those contributions
made by an Employer under Section 4.1.1.
2.42 Retirement Contributions Account means the account to
which Employer Retirement Contributions made after December 28,
1991 are credited, except that prior to December 31, 1994, the
Retirement Contribution in excess of 2% of a Member's
Compensation was credited to the Profit-Sharing Contribution
Account.
2.43 Rollover Contributions means those contributions
contributed by a Participant pursuant to Section 4.4.
2.44 Rollover Contributions Account means the account to
which Rollover and ESOP Contributions are credited.
2.45 Termination of Employment or Terminates Employment
means a termination of employment with an Employer and all
Affiliates, including:
(a) a resignation or discharge (regardless of whether the
Member is on an authorized leave of absence at the time
of such resignation or discharge), or
(b) a failure to return to active service with the Employer
or an Affiliate at the conclusion of an authorized
leave of absence without notice, which shall be deemed
to be a Termination of Employment as of the date on
which such leave of absence or layoff commenced.
2.46 Trust Agreement means the agreement establishing a
trust, which forms part of the Plan, to receive, hold, invest,
and dispose of the Trust Fund.
2.47 Trustee means the corporation, or person acting as
trustee under the Trust Agreement.
2.48 Trust Fund means the assets held under the Trust
Agreement forming a part of the Plan.
2.49 Valuation Date means the daily, monthly, quarterly or
annual date determined by the Fund Committee.
2.50 Vesting Service means the service described in
Section 6.4.
ARTICLE 3
Participation
3.1 Eligible Members. Any Member who is employed by an
Employer and who has attained age 18 shall become an Active
Participant on the entry date specified in Section 3.2, provided
such Member is employed by an Employer on such date.
Notwithstanding the foregoing, no Member shall become an Active
Participant who is (a) covered by a collective bargaining
agreement that does not expressly provide for participation in
the Plan, (b) a nonresident alien, (c) a Leased Employee, or (d)
a Member of an Affiliate which has not adopted the Plan as an
Employer. A Participant shall cease to be an Active Participant
when such Participant no longer satisfies the requirements of
this Section.
3.2 Commencement of Participation. The first day of a
Member's payroll period shall be an entry date.
(a) A Member shall become an Active Participant solely with
respect to Company Ownership Contributions, Retirement
Contributions, and Profit Sharing Contributions on the entry date
that coincides with or next follows the date that such Member is
credited with a year of Eligibility Service.
(b) A Member shall become an Active Participant solely for
the purposes of being eligible to make Before Tax Contributions,
After Tax Contributions and Rollover Contributions and to receive
Qualified Nonelective Contributions on the first entry date that
follows such Member's date of hire by at least fourteen (14)
days, provided that, with respect to Before Tax Contributions and
After Tax Contributions, such Member enrolls in the Plan pursuant
to Section 3.4.
3.3 Eligibility Service. A Member shall be credited with
one year of Eligibility Service on the last day of an eligibility
computation period in which he is credited with at least 1,000
Hours of Service. An eligibility computation period means a one-
year period commencing on the date the Member is credited with
his first Hour of Service with the Employer or an Affiliate, or
the anniversary of such date. If the Member resigns or is
dismissed from employment, his Eligibility Service shall not be
canceled.
If a Member employed by an Employer is not scheduled to be
credited with at least 1,000 Hours of Service during an
eligibility computation period, but is actually credited with
1,000 Hours of Service during such period, such Member shall (a)
be eligible to enroll for After Tax Contributions and Before Tax
Contributions on the first entry date following the end of such
period, and (b) automatically become a Participant with respect
to Employer Contributions on the entry date following such
period.
3.4 Enrollment. Any Member described in Section 3.1 may
enroll as an Active Participant in the Plan with respect to After
Tax Contributions and Before Tax Contributions as of the entry
date on which he is initially eligible or as of any subsequent
entry date by filing with the Administrative Committee a written
or telephonic enrollment authorization, as prescribed by the
Administrative Committee, which shall include (a) the effective
date on which the Member is to become an Active Participant, (b)
such Member's election, commencing on or after such effective
date, to have any After Tax Contributions and Before Tax
Contributions made by or for him to the Trust, and (c)
such Member's authorization, if any, to the Employer to withhold
from his Compensation for each pay period, commencing on or after
such effective date, any designated After Tax Contributions and
Before Tax Contributions and to pay such contributions to the
Trust.
3.5 Duration of Participation. An Active Participant who
ceases to satisfy the requirements of Section 3.1 shall again
become an Active Participant upon satisfying the requirements of
Section 3.1. If an Account continues to be maintained for a
person who is no longer an Active Participant, such person shall
remain a Participant for all purposes of the Plan except for the
purposes of making, or having his Employer make, any After Tax
Contributions, Before Tax Contributions, Rollover Contributions
or Employer Contributions to the Plan.
3.6 Participation by Acquired Companies. The eligibility
provisions applicable to a Member employed or formerly employed
by a business acquired by an Employer is set forth in the
applicable Appendices to the Plan.
ARTICLE 4
Contributions
4.1 Employer Contributions.
4.1.1 Retirement Contribution. (a) With respect
to each Participant who is an Active Participant employed
by an Employer on the last day of the Plan Year, such
Employer shall contribute to the Retirement Contributions
Account of such Participant an amount equal to 2.5% of his
Compensation earned while an Active Participant during the
first three quarters of the Plan Year and the last quarter
of the prior Plan Year. A Participant who is an Active
Participant and who retires from employment during the Plan
Year on or after his Normal or Early Retirement Age, dies,
or becomes Disabled, shall be considered to be an Active
Participant employed by such Employer on the last day of
the Plan Year in which such retirement, death, Disability
occurred.
(b) Notwithstanding anything in the Plan to the
contrary, with respect to any Active Participant employed
by The Gunlocke Company, (1) 2% shall be substituted for
2.5% with respect to Retirement Contributions; (2) any such
Retirement Contributions shall be subject to the vesting
requirements of Section 6.2 and the requirements of Section
4.1.6 as if they were Profit Sharing Contributions; and
(3) neither Before nor After Tax Contributions shall be
permitted.
4.1.2 Profit Sharing Contribution. (a) Each
Employer shall make a Profit Sharing Contribution to the
Profit Sharing Contributions Accounts of each Participant
who is an Active Participant employed by such Employer who
is entitled to an allocation under Subsection 4.1.1(a) and
(b). The amount of the Profit Sharing Contribution shall
be equal to such percentage, as is determined by the Board
of Directors at its sole discretion, of such Participant's
Compensation earned during the first three quarters of the
Plan Year and the last quarter of the prior Plan Year,
except that no Employer's Profit-Sharing Contribution for
any Plan Year, when combined with other Employer
Contributions by such Employer for the Plan Year, shall
exceed the Profits of such Employer for such Plan Year.
(b) Notwithstanding anything in the Plan to the
contrary, with respect to any Active Participant employed
by AHC Inc., no Profit Sharing Contributions shall be made.
4.1.3 Company Ownership Contribution. With
respect to each Participant who is an Active Participant
employed by an Employer on the last day of the Plan Year,
such Employer shall contribute to the Company Ownership
Contributions Account of such Participant in the form of
Company Stock a number of shares with a fair market value,
determined as of the last day of the Plan Year, equal to 2%
of his Compensation earned while an Active Participant
during the first three quarters of the Plan Year and the
last quarter of the prior Plan Year. A Participant who is
an Active Participant who retires from employment during
the Plan Year on or after his Normal or Early Retirement
Age, his death, or his becoming Disabled, shall be
considered to be an Active Participant employed by such
Employer on the last day of the Plan Year in which such
retirement, death, Disability occurred.
4.1.4 Qualified Nonelective Contributions. For
any Plan Year, the Employers may make Qualified Nonelective
Contributions (a) in such amount, (b) in cash or in other
property, (c) for such Active Participants who are not
Highly Compensated Member for such Plan Year, and (d) in
such proportions among such Active Participants as such
Employer shall deem necessary to cause Section 5.2, 5.3 or
5.4 to be satisfied for such Plan Year, provided that such
proportions shall be determined in a uniform and
nondiscriminatory manner. Each Employer shall designate to
the Trustee the Plan Year for which and the Participants
for whom any Qualified Nonelective Contribution is made.
Qualified Nonelective Contributions shall be allocated to
the Accounts of Active Participants who are designated by
an Employer as eligible to share therein in such amounts as
such Employer directs.
4.1.5 Transferred Members. If an Active
Participant is employed by more than one Employer during
the time period set forth in Subsections 4.1., 4.1.2, or
4.1.3, the Employer Contribution under Subsections 4.1.1,
4.1.2, and 4.1.3 shall be based on the Compensation paid by
such Employer to the Participant during the time period set
forth in those Sections.
4.1.6 Profits. Profits shall mean the sum of
(a) the Employer's net profit for the fiscal year, and
(b) the Employer's accumulated profits as of the beginning
of the fiscal year. Profits shall be determined in
accordance with generally accepted accounting principles.
In determining the amount of Profits, reasonable estimates
of all amounts, rates, limitations, and contributions may
be made. An Employer's determination of its Profits and
the Company's determination of its Profits shall be final
and conclusive.
4.1.7 Insufficient Profits. If an Employer
cannot make the amount of any contribution required by
Section 4.1.2 because of insufficient Profits, another
Employer may make a contribution equal to the amount that
could not be made, but not to exceed the amount of its own
Profits. Such contribution shall not exceed the amount
deductible under Code Section 404(a)(3)(B). Any
contribution made under this Section shall be allocated to
the Profit Sharing Contributions Account of those
Participants who would have been entitled to an allocation
of contributions for the Plan Year if their Employer had
sufficient Profits, and the allocation shall be made in the
same manner as though such Employer had made the
contribution.
4.1.8 Time of Employer Contribution. Employer
Contributions shall be paid to the Trustee not later than
the due date (including extensions) for the Employer's
federal income tax return for the Employer's fiscal year
which coincides with the Plan Year for which the Employer
Contribution is made.
4.1.9 Reduction of Employer Contributions. The
amount of Employer Contributions determined to be payable
to the Trust shall be reduced by amounts which have been
forfeited or held in a suspense account in accordance with
the terms of the Plan.
4.1.10 ESOP Allocation. Notwithstanding anything
In the Plan to the contrary, with respect to each
Participant who received an allocation as of December 31,
1997, under the ESOP based on his Compensation earned
during the last quarter of 1997, each Employer for the 1998
Plan Year shall contribute to the Retirement Contributions
Account of such Participant who is employed on December 31,
1998, an amount equal to 2% of his Compensation earned
while an Active Participant during the first three quarters
of the 1998, provided that each such Participant who during
the 1998 Plan Year retires from employment on or after his
Normal or Early Retirement Age, dies, or becomes Disabled,
shall be considered to be an Active Participant employed by
such Employer on December 31, 1998.
4.2 Before Tax Contributions.
4.2.1 Percentage Limitation. Each Active
Participant may elect to reduce his Compensation by any
whole percentage from 1 percent to 12 percent, and to have
the amount contributed on his behalf by the Employer on a
pre-tax basis as a Before Tax Contribution to the Plan,
subject to the limitations set forth in Subsections 5.2.2
and 5.2.3 and Section 5.4. Such election shall be made
effective by a written or telephonic authorization
prescribed by the Administrative Committee and shall become
effective on a date determined under the rules of the
Administrative Committee. Changes in the rate of Before
Tax Contributions may be made pursuant to rules and
regulations prescribed by the Administrative Committee.
Such elections shall be effective only with respect to
Compensation that has not yet been paid to and is not
otherwise currently available to the Participant.
4.2.2 Timing of Contributions. Before Tax
Contributions made on behalf of each Participant shall be
paid to the Trustee and allocated to such Participant's
Before Tax Contributions Account as soon as practical after
the end of every pay period, but in no event later than 15
business days after the end of the month that such amounts
would otherwise have been payable to the Participant.
4.3 After Tax Contributions. Each Active Participant may
contribute on an after-tax basis to the Trust Fund as an After
Tax Contribution, through payroll deductions, a percentage of his
Compensation equal to the difference between twelve percent (12%)
and the percentage contributed as a Before Tax Contribution,
subject to the limitations described in Subsection 5.3.2 and
Section 5.4. No Participant shall be required to make an After-
Tax Contribution pursuant to this Section. An election to make
an After-Tax Contribution under this Section shall be made by a
written or telephonic authorization in a form prescribed by the
Administrative Committee, including an authorization of payroll
deductions, and shall become effective on a date determined under
the rules of the Administrative Committee. Changes in the rate
of contributions may be made pursuant to rules and regulations
prescribed by the Administrative Committee. After Tax
Contributions shall be credited to the After Tax Contributions
Account as they are received by the Trustees and reported by the
Administrative Committee, but not later than the last day of the
Plan Year for which they are made.
4.4 Rollover Contributions.
4.4.1 Direct Rollovers. The Trustee, at the
direction of the Administrative Committee, shall receive
and thereafter hold and administer as part of the Trust
Fund for an Active Participant cash which shall have been
distributed to the Active Participant, from a trust held
under another plan in which the Active Participant
participated, or an individual retirement account described
in Code Section 408(d) (3) (A) (ii), in a distribution
which constitutes an "eligible rollover distribution" under
Code Section 401(a) (31) or Code Section 402(c) (4) (a
"Rollover Contribution"); provided that, effective January
1, 1999, in no event shall the Trustee at any time receive
any such amount which is less than $500. The
Administrative Committee shall adopt and may amend from
time to time general rules of uniform application which
shall govern the administration of Rollover Contributions.
4.4.2 Rollover Contributions Accounts. Rollover
Contributions transferred to the Trustee pursuant to
Section 4.4.1 shall be individually accounted for as a
Subaccount of the Rollover Contribution Account.
4.5 Transfers from HON Members Company Ownership Plan. A
qualified Participant under the HON Members Company Ownership
Plan prior to April 1, 1998, and a Qualified Participant under
Section 7.6 may transfer certain amounts from his account in such
plan to a Subaccount of his Rollover Contribution Account under
the Plan. Amounts credited to a Participant's Rollover
Contribution Account which are attributable to ESOP Contributions
transferred from the HON Members Company Stock Ownership Plan
pursuant to a diversification election prior to April 1, 1998, or
are transferred from the Company Ownership Contributions Accounts
and ESOP Accounts pursuant to Section 7.6 shall be credited to an
ESOP Contribution Subaccount thereunder and shall be
nonforfeitable.
4.6 Dividends. Any dividends received with respect to
Company Stock allocated to a Participant's Account shall be
allocated and credited to such Account or, at the discretion of
the Fund Committee, shall be distributed to the Participants.
The portion of such dividends to be so allocated and credited to
each such Account, or to be so distributed to such Participant,
shall be determined on the basis of the number of share units of
Company Stock held in such Participant's Account as compared to
the total number of share units held in all Participants'
Accounts. Any cash dividends allocated and credited to such
Participant's Accounts shall be transferred to the Trustee for
investment in a Fund pursuant to Article 7. If any dividends are
to be distributed to Members, such distribution shall be
distributed in cash to such Participants not later than 90 days
after the close of the plan Year for which such dividends are
paid.
ARTICLE 5
Limitations on Contributions
5.1 Excess Before-Tax Contributions. (a) Notwithstanding
the provisions of Article 4, a Participant's Before-Tax
Contributions for any taxable year of such Participant shall not
exceed $7,000, as adjusted from year to year by the Secretary of
the Treasury or his delegate for the cost-of-living (in 1998,
$10,000). Except as otherwise provided in this Section, a
Participant's Before-Tax Contributions for purposes of this
Section shall include (1) any employer contribution made under
any qualified cash or deferred arrangement as defined in Code
Section 401(k) to the extent not includible in gross income for
the taxable year under Code Section 402(a)(8) (determined without
regard to Code Section 402(g)), (2) any employer contribution to
the extent not includible in gross income for the taxable year
under Code Section 402(h)(1)(B) (determined without regard to
section Code Section 402(g)) and (3) any employer contribution to
purchase an annuity contract under Code Section 403(b) under a
salary reduction agreement within the meaning of Code Section
3121(a)(5)(D).
(b) In the event that a Participant's Before-Tax
Contributions exceed the amount described in Subsection (a) of
this Section (hereinafter called the "excess deferrals"), such
excess deferrals (and any income allocable thereto) shall be
distributed to the Participant by April 15 following the close of
the taxable year in which such excess deferrals occurred if (and
only if), by April 15 of such taxable year the Participant
allocates the amount of such excess deferrals among the plans
under which the excess deferrals were made and notifies the
Administrative Committee of the portion allocated to this Plan.
(c) Notwithstanding the foregoing, any excess deferrals to
be distributed hereunder shall be reduced by any excess
contributions previously distributed under Section 5.2(d) for the
Plan Year.
5.2 ADP Test.
(a) Effective January 1, 1997, notwithstanding any
provision of the Plan to the contrary, for any Plan Year,
(1) the actual deferral percentage (as defined in
Subsection (b) of this Section) for the group of Highly
Compensated Eligible Members for such Plan Year shall not
exceed the actual deferral percentage for all other Active
Participants for the preceding Plan Year multiplied by 1.25,
or
(2) the excess of the actual deferral percentage for
the group of Highly Compensated Eligible Members for such
Plan Year over the actual deferral percentage for all other
Active Participants for the preceding Plan Year shall not
exceed 2 percentage points, and the actual deferral
percentage for the group of Highly Compensated Eligible
Members for such Plan Year shall not exceed the actual
deferral percentage for all other Eligible Employees for
the preceding Plan Year multiplied by 2. If two or more
plans which include cash or deferred arrangements are
considered as one plan for purposes of Code Sections
401(a)(4) or 410(b), such arrangements included in such
plans shall be treated as one arrangement for the purposes
of this Subsection; and if any Highly Compensated Eligible
Member is a participant under two or more cash or deferred
arrangements of the Employer or an Affiliate, all such
arrangements shall be treated as one cash or deferred
arrangement for purposes of determining the deferral
percentage with respect to such Highly Compensated Eligible
Member.
(b) For the purposes of this Section, the actual deferral
percentage for a specified group of Active Participants for a
Plan Year shall be the average of the ratios (calculated
separately for each Active Participant in such group) of (1) the
amount of Before-Tax Contributions and, at the election of an
Employer, any Qualified Nonelective Contributions actually paid
to the Trust for each such Active Participant for such Plan Year
(including any "excess deferrals" described in Section 5.1) to
(2) the Active Participant's compensation for such Plan Year.
For the purposes of this Section and Section 5.3, the term
"compensation" shall mean an Active Participant's compensation
under Section 5.8(6) (subject to the limitations described in
Section 2.13).
(c) For the purposes of this Section and Section 5.3, the
term "Highly Compensated Eligible Member" for a particular Plan
Year shall mean any Highly Compensated Member who is an Active
Participant.
(d) In the event that excess contributions (as such term is
hereinafter defined) are made to the Trust for any Plan Year,
then, prior to December 31 of the following Plan Year, such
excess contributions (and any income allocable thereto) shall be
distributed to the Highly Compensated Eligible Members on the
basis of the respective portions of the excess contributions
attributable to each such Active Participant. Effective January
1, 1997, for the purposes of this Subsection, the term "excess
contributions" shall mean, for any Plan Year, the excess of
(1) the aggregate amount of Before-Tax Contributions actually
paid to the Trust on behalf of Highly Compensated Eligible
Members for such Plan Year over (2) the maximum amount of such
Before-Tax Contributions permitted for such Plan Year under
Subsection (a) of this Section, determined by reducing
Before-Tax Contributions made on behalf of Highly Compensated
Eligible Members beginning with the Highly Compensated Eligible
Member with the highest dollar amount of Before-Tax
Contributions.
(e) Notwithstanding the foregoing, any excess contributions
to be distributed hereunder shall be reduced by any excess
deferrals previously distributed under Section 5.1(b) for the
Plan Year.
5.3 ACP Test.
(a) Effective January 1, 1997, notwithstanding any
provision of the Plan to the contrary, for any Plan Year, the
contribution percentage (as defined in Subsection (b) of this
Section) for the group of Highly Compensated Eligible Members (as
defined in Section 5.2(c)) for such Plan Year shall not exceed
the greater of (1) 125 percent of the contribution percentage for
all other Active Participants for the preceding Plan Year or (2)
the lesser of (i) 200 percent of the contribution percentage for
all other Active Participants for the preceding Plan Year, or
(ii) the contribution percentage for the preceding Plan Year for
all other Active Participants plus 2 percentage points. If two
or more plans of the Affiliates to which matching contributions,
employee after-tax contributions or before-tax contributions (as
defined in Section 5.1(a)) are made are treated as one plan for
purposes of Code Section 410(b), such plans shall be treated as
one plan for purposes of this Subsection; and if a Highly
Compensated Eligible Member participates in two or more plans of
the Employer or an Affiliate to which such contributions are
made, all such contributions shall be aggregated for purposes of
this Subsection.
(b) For the purposes of this Section, the contribution
percentage for a specified group of Active Participants for a
Plan Year shall be the average of the ratios (calculated
separately for each Active Participant in such group) of (1) the
sum of the After-Tax Contributions for the preceding Plan Year
and, at the election of an Employer, any Before-Tax Contributions
or Qualified Nonelective Contributions paid under the Plan by or
on behalf of each such Active Participant for the preceding Plan
Year and not taken into account under Section 5.2(b) to the
Active Participant's compensation (as defined in Section 5.2(b))
for such preceding Plan Year to (2) the Active Participant's
compensation for such Plan Year.
(c) In the event that excess aggregate contributions (as
such term is hereinafter defined) are made to the Trust for any
Plan Year, then, prior to December 31 of the following Plan Year,
such excess contributions shall be distributed to the Highly
Compensated Member who is an Active Participant on the basis of
the respective portions of the excess contributions attributable
to each such Active Participant. Effective January 1, 1997, for
the purposes of this Subsection, the term "excess aggregate
contributions" shall mean, for any Plan Year, the excess (1) of
the aggregate amount of the After-Tax Contributions actually paid
to the Trust by or on behalf of Highly Compensated Eligible
Members for such Plan Year over (2) the maximum amount of such
After-Tax Contributions permitted for such Plan Year under
Subsection (a) of this Section, determined by reducing After-Tax
Contributions made by or on behalf of Highly Compensated Member
who is are Active Participants beginning with the Highly
Compensated Eligible Member with the highest of dollar amount of
After-Tax Contributions.
(d) The determination of excess aggregate contributions
under this Section shall be made after first determining the
excess deferrals under Section 5.1 and then determining the
excess contributions under Section 5.2.
5.4 Multiple Use of the Alternative Limitation.
(a) Notwithstanding the provisions of Article 4 or the
foregoing provisions of this Article 5, if, after the application
of Sections 5.1, 5.2 and 5.3, the sum of the actual deferral
percentage and the contribution percentage for the group of
Highly Compensated Eligible Members (as defined in Section
5.2(c)) exceeds the aggregate limit (as defined in Subsection (b)
of this Section), then the contributions made for such Plan Year
for Highly Compensated Eligible Members will be reduced so that
the aggregate limit is not exceeded. Such reductions shall be
made first in After-Tax Contributions, and then in Before-Tax
Contributions. Reductions in contributions shall be made in the
manner provided in Section 5.2 or 5.3, as applicable. The amount
by which each such Highly Compensated Eligible Member's
contribution dollar amount is reduced shall be treated as an
excess contribution or an excess aggregate contribution under
Section 5.2 or 5.3, as applicable. For the purposes of this
Section, the actual deferral percentage and contribution
percentage of the Highly Compensated Eligible Members are
determined after any reductions required to meet those tests
under Sections 5.2 and 5.3. Notwithstanding the foregoing
provisions of this Section, no reduction shall be required by
this Subsection if either the actual deferral percentage of the
Highly Compensated Eligible Members for the current Plan Year
does not exceed 1.25 multiplied by the actual deferral percentage
of the non-Highly Compensated Eligible Members for the preceding
Plan Year, or the contribution percentage of the Highly
Compensated Eligible Members for the current Plan Year does not
exceed 1.25 multiplied by the contribution percentage of the
non-Highly Compensated Eligible Members for the preceding Plan
Year.
(b) For purposes of this Section, the term "aggregate
limit" means the sum of (1) 125% of the greater of the actual
deferral percentage or the contribution percentage of the
non-Highly Compensated Eligible Members for the preceding Plan
Year and (2) the lesser of (i) 200% of, or (ii) two (2) plus, the
lesser of such actual deferral percentage or contribution
percentage. If it would result in a larger aggregate limit, the
word "lesser" is substituted for the word "greater" in Paragraph
(i) of this Subsection, and the word "greater" is substituted for
the word "lesser" the second place such word appears in Paragraph
(ii) of this Subsection.
5.5 Monitoring Procedures. (a) In order to ensure that
at least one of the actual deferral percentages specified in
Section 5.2(a) and at least one of the contribution percentages
specified in Section 5.3(a) and the aggregate limit specified in
Section 5.4(b) are satisfied for each Plan Year, the
Administrative Committee shall monitor (or cause to be monitored)
the amount of Before-Tax Contributions, and After-Tax
Contributions being made to the Plan by or for each Active
Participant during each Plan Year. In the event that the
Administrative Committee determines that neither of such actual
deferral percentages, neither of such contribution percentages or
such aggregate limit will be satisfied for a Plan Year, and if
the Administrative Committee in its sole discretion determines
that it is necessary or desirable, the Before-Tax Contributions
and After-Tax Contributions made thereafter by or for each Highly
Compensated Member who is an Active Participant (as defined in
Section 4.2(c)) may be reduced (pursuant to non-discriminatory
rules adopted by the Administrative Committee) to the extent
necessary to decrease the actual deferral percentage and/or the
contribution percentage for Highly Compensated Member who is an
Active Participants for such Plan Year to a level which satisfies
either of the actual deferral percentages, either of the
contribution percentages and/or the aggregate limit. In the case
of Sections 5.3 and 5.4, such reductions shall be made first in
the After-Tax Contributions, if any, to be made by the Highly
Compensated Eligible Members.
(b) In order to ensure that excess deferrals (as such term
is defined in Section 5.1(b)) shall not be made to the Plan for
any taxable year for any Participant, the Administrative
Committee shall monitor (or cause to be monitored) the amount of
Before-Tax Contributions being made to the Plan for each
Participant during each taxable year and may take such action
(pursuant to non-discriminatory rules adopted by the
Administrative Committee) to prevent Before-Tax Contributions
made for any Participant under the Plan for any taxable year from
exceeding the maximum amount applicable under Section 5.1(a).
(c) The actions permitted by this Section are in addition
to, and not in lieu of, any other actions that may be taken
pursuant to other Sections of the Plan or that may be permitted
by applicable law or regulation in order to ensure that the
limitations described in Sections 5.1, 5.2, 5.3 and 5.4 are met.
5.6 Testing Procedures. In applying the limitations set
forth in Sections 5.2, 5.3 and 5.4, the Administrative Committee
may, at its option, utilize such testing procedures as may be
permitted under Code Sections 401(a)(4), 401(k), 401(m) or
410(b), including, without limitation, (a) aggregation of the
Plan with one or more other qualified plans of Affiliates, (b)
inclusion of qualified matching contributions, qualified
nonelective contributions or elective deferrals described in, and
meeting the requirements of, Treasury Regulations under Code
Sections 401(k) and 401(m) to any other qualified plan of the
Affiliates in applying the limitations set forth in Sections 5.2,
5.3 and 5.4, or (c) any permissible combination thereof.
5.7 Return of Contributions to Employers.
(a) Except as specifically provided in this Section or in
the other Sections of the Plan, the Trust Fund shall never inure
to the benefit of the Employers and shall be held for the
exclusive purposes of providing benefits to Members, Participants
and their Beneficiaries and defraying reasonable expenses of
administering the Plan.
(b) If an Employer Contribution to the Trust Fund is made
by an Employer by a mistake of fact, the excess of the amount
contributed over the amount that would have been contributed had
there not occurred a mistake of fact shall be returned to such
Employer within one year after the payment of such Contribution.
If an Employer Contribution to the Trust Fund made by an Employer
which is conditioned upon the deductibility of the Contribution
under Code Section 404 is not fully deductible under such Code
Section, such Contribution, to the extent the deduction therefor
is disallowed, shall be returned to the Employer within one year
after the disallowance of the deduction. Earnings attributable
to Employer Contributions returned to an Employer pursuant to
this Subsection may not be returned, but losses attributable
thereto shall reduce the amount to be returned; provided,
however, that if the withdrawal of the amount attributable to the
mistaken or non-deductible contribution would cause the balance
of the individual Account of any Participant to be reduced to
less than the balance which would have been in such Account had
the mistaken or non-deductible amount not have been contributed,
the amount to be returned to the Employer pursuant to this
Section shall be limited so as to avoid such reduction. All
Employer Contributions hereunder for any Plan Year shall in no
event exceed the amount that would be deductible by the Employer
for such Plan Year for federal income tax purposes and each
Employer Contribution to the Trust Fund made by any Employer is
hereby specifically conditioned upon such deductibility.
5.8 Maximum Additions. (a) Notwithstanding any provision
of the Plan to the contrary, the maximum annual addition (as
defined in Subsection (b) of this Section) to a Participant's
account for any Plan Year (which shall be the limitation year)
shall in no event exceed the lesser of (1) $30,000 (as adjusted
pursuant to Code Section 415(d)) or (2) 25% of his compensation
for such Plan Year.
(b) For the purpose of this Section, the term "annual
additions" means the sum for any Plan Year of:
(1) all contributions (including, without limitation,
Before-Tax Contributions made pursuant to Section 4.1) made
by the Affiliates which are allocated to the Participant's
account pursuant to a defined contribution plan maintained
by an Affiliate,
(2) all employee contributions (including, without
limitation, After-Tax Contributions made pursuant to
Section 4.2) made by the Participant to a defined
contribution plan maintained by an Affiliate,
(3) all forfeitures allocated to the Participant's account
pursuant to a defined contribution plan maintained by an
Affiliate,
(4) any amount allocated to an individual medical
benefit account (as defined in section 415(1)(2) of the
Code) of the Participant which is part of a pension or
annuity plan, and
(5) any amount attributable to medical benefits
allocated to the Participant's account established under
Code Section 419A(d)(1) if the Participant is or was a
key-employee (as such term is defined in Code Section
416(i)) during such Plan Year or any preceding Plan Year.
(c) For the purposes of this Section, the term
"compensation" shall mean compensation within the meaning of Code
Section 415(c)(3) and regulations thereunder.
(d) If a Participant's annual additions would exceed the
limitations of Subsection (a) of this Section for a Plan Year as
a result of the allocation of forfeitures, a reasonable error in
estimating the Participant's compensation, or a reasonable error
in determining the amount of Before-Tax Contributions that may be
made with respect to the Participant under the limitations of
this Section (or other facts and circumstances which the
Commissioner of Internal Revenue finds justify application of the
following rules of this Subsection), After-Tax Contributions (if
any) made by the Participant for such Plan Year (together with
any gains attributable thereto) shall be returned to him to the
extent necessary. In the event a reduction is necessary to avoid
exceeding the limitations set forth in this Section, and the
individual is a participant in two defined contribution plans
maintained by the Affiliates, the affected individual's benefits
under this Plan shall be reduced first to the extent necessary to
avoid exceeding such limitations. To the extent there remains an
amount which cannot be allocated, the remaining amount shall be
held in a suspense account as if a forfeiture. The amount in the
suspense account shall be allocated to the extent possible as of
the next succeeding allocation date. The amount remaining in the
suspense account as of each succeeding allocation date shall be
allocated until the full amount in the suspense account has been
allocated. In the event the Plan terminates before the Company
has fully allocated, or is able to allocate on the date of Plan
termination, to any Participant's Account an amount in the
suspense account, the Trustee shall distribute the balance of the
suspense account to the Employer.
5.9 Maximum Benefits. (a) Prior to January 1, 2000,
except as otherwise provided in Code Section 415(e), in any case
in which an individual is a participant in both a defined benefit
plan and a defined contribution plan maintained by an Affiliate,
the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Plan Year shall not exceed 1.
In the event a reduction is necessary to avoid exceeding the
limitation set forth in this Section, the affected Participant
shall not be permitted to make After-Tax Contributions and his
benefits under the defined benefit plan shall be reduced to the
extent necessary to avoid exceeding such limitation. For
purposes hereof:
(1) the defined benefit plan fraction for any Plan
Year is a fraction, (i) the numerator of which is the
projected annual benefit of the participant under the plan
(determined as of the close of the Year), and (ii) the
denominator of which is the lesser of (A) the product of
1.25, multiplied by the dollar limitation in effect under
Code Section 415(b)(1)(A) for such Year or (B) the
product of 1.4, multiplied by the amount which may be taken into
account under Code Section 415(b)(1)(B) with respect to such
participant under the plan for such Year; and
(2) the defined contribution plan fraction for any
Plan Year is a fraction, (i) the numerator of which is the
sum of the annual additions to the participant's account as
of the close of the Year and for all prior Years, and
(ii) the denominator of which is the sum of the lesser of
the following amounts determined for such Year and for each
prior year of service with an Affiliate (regardless of
whether a plan was in existence during such Year):
(A) the product of 1.25, multiplied by the
dollar limitation in effect under Code Section
415(c)(1)(A) for such Year and each such prior year of
service, or
(B) the product of 1.4, multiplied by the amount
which may be taken into account under Code Section
415(c)(1)(B) with respect to such participant under
such plan for such Year and each such prior year of
service.
(b) A participant's projected annual benefit for purposes
of Subsection (a) of this Section is equal to the annual benefit
to which he would be entitled under the terms of the defined
benefit plan, assuming he will continue employment until reaching
normal retirement age as determined under the terms of such plan
(or current age, if later), his compensation for the Plan Year
under consideration will remain the same until the date he
attains such age, and all other relevant factors used to
determine benefits under the plan for the Plan Year under
consideration will remain constant for all future Plan Years.
5.10 Definitions. (a) For purposes of applying the
limitations set forth in Sections 5.8 and 5.9, all qualified
defined benefit plans (whether or not terminated) ever maintained
by one or more Affiliates shall be treated as one defined benefit
plan, and all qualified defined contribution plans (whether or
not terminated) ever maintained by one or more Affiliates shall
be treated as one defined contribution plan.
(b) For purposes of this Section and Sections 5.8 and 5.9,
the term "Affiliate" shall be construed in the light of Code
Section 415(h).
5.11 Funding Policy. The Fund Committee shall (a)
determine, establish and carry out a funding policy and method
consistent with the objectives of the Plan and the requirements
of applicable law, and (b) furnish from time to time to the
person responsible for the investment of the assets held in the
Trust Fund information the Fund Committee may have relative to
the Plan's probable short-term and long-term financial needs,
including any probable need for short-term liquidity, and such
Fund Committee's opinion (if any) with respect thereto.
ARTICLE 6
Vesting Rules
6.1 Nonforfeitable Accounts. A Participant shall have a
nonforfeitable interest in the amounts credited to his Retirement
Contributions Account, Company Ownership Contributions Account,
Before Tax Contributions Account, After Tax Contributions
Account, Rollover Contributions Account, ESOP Contribution
Account, Qualified Nonelective Contributions Account and Prior
Plan Account.
6.2 Forfeitable Accounts. Upon completion of five (5)
Years of Vesting Service, a Participant shall have a
nonforfeitable interest in the entire value of his Profit Sharing
Contributions Account. A Participant also shall have a
nonforfeitable interest in the entire value credited to his
Profit Sharing Contributions Account if, while a Member of an
Employer or Affiliate, he dies, becomes Disabled, attains Normal
Retirement Age, attains Early Retirement Age and the sum of his
age and his years of Vesting Service equals at least 65,
contributions to the Plan are completely discontinued, the Plan
is completely terminated, or the Plan is partially terminated
with respect to the Participant.
6.3 Time of Forfeiture. A Participant who Terminates
Employment with all Employers and Affiliates shall forfeit the
nonvested portion of his Profit Sharing Contributions Account as
of the earlier of (a) the date that the Participant incurs five
consecutive One-Year Breaks in Service, or (b) the Participant
receives a distribution of the vested portion of his Account
after a Termination of Employment. A Participant who receives
a distribution of his vested Account after a Termination of
Employment and who again becomes an Active Participant before
incurring five consecutive One-Year Breaks in Service will have
the nonvested portion of his Account restored (unadjusted for any
gains or losses subsequent to such forfeiture) upon such
Participant's repayment in cash of the amount so distributed
(without interest) to the Trustee for inclusion in his Account
prior to the earlier of (i) five years after the date of rehire,
or (ii) five consecutive One-Year Breaks in Service. The source
for restoring forfeitures shall be first, current forfeiture, and
if insufficient, an additional Employer contribution (without
regard to the existence of profits). A Participant who
Terminates Employment with the Employer and all Affiliates and
who has no vested interest in any Employer Contribution Account
shall be deemed as of the date of such termination to have
received a distribution of a vested interest equal to zero, and,
if such Participant again becomes a Member before incurring five
consecutive One-Year Breaks in Service, such deemed distribution
shall be deemed to be repaid by the Participant, and such
forfeited amount shall be deemed to be restored, upon the date
that such Participant is credited with an Hour of Service after
reemployment.
6.4 Vesting Service. (a) A Member shall be credited
with one year of Vesting Service for each vesting computation
period during which he is credited with 1,000 or more Hours of
Service after being employed by (or reemployed by) an Employer or
an Affiliate. The vesting computation period shall be the
one-year periods commencing on the date the Member is credited
with his first Hour of Service with an Employer or an Affiliate
and on the anniversaries of such date.
(b) All service with the Company or any Affiliate shall be
counted in determining a Member's years of Vesting Service with
respect to Profit Sharing Contributions, except that (1) in the
case of a Participant who receives (or is deemed to receive) a
distribution of the vested portion of his Account after a
Termination of Employment, credited Vesting Service shall be
restored, regardless of whether the Participant repays (or is
deemed to have repaid) the distributed amount as provided in
Section 6.3, and (2) in the case of a Participant who has a
vested interest in his Account at the time of terminating
employment and who incurs five (5) consecutive One-Year Breaks in
Service, service after such One-Year Breaks In Service shall not
be counted for the purpose of determining the Participant's
nonforfeitable interest in amounts that may have been credited to
his Profit Sharing Contributions Account prior to the
termination.
6.5 Vesting upon Change in Control. Notwithstanding any
other provision of the Plan, a Participant shall have a
nonforfeitable interest in his entire Account upon a "change in
control" of the Company. For this purpose, "change of control"
shall mean:
(a) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more
of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this paragraph (a), the
following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, on (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of paragraph (c) of
this Section; or
(b) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute
at least two-thirds of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least three-quarters
of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(c) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
Notwithstanding any other provision of this Plan, any Participant
who has a nonforfeitable interest in his entire Account following
a "change in control" pursuant to this Section shall be
immediately entitled to make a direct rollover, as defined in
Section 8.10, of his entire Account into an individual retirement
account or another tax-qualified retirement plan upon a
Termination of Employment.
6.6 Vesting Upon the Disposition or Cessation of a
Business. Notwithstanding any other provision of the Plan, each
Participant who ceases to be employed by the Company and its
Affiliates as a result of the Company's disposition of all or a
portion of its interest in, or the cessation of business with
respect to, any of the Company's subsidiaries, divisions,
facilities or operating companies may have, in the sole
discretion of the Administrative Committee as of a date specified
by the Administrative Committee, a nonforfeitable interest in his
entire Account.
6.7 Vesting Upon Acquisition of a Business. The Vesting
Service of a Member employed or formerly employed by a business
acquired by an Employer is set forth in the applicable Appendices
to the Plan.
ARTICLE 7
Investments and Accounting
7.1 Investments. The Trust shall be divided into such
Funds as the Fund Committee may in its discretion select or
establish. Each such Fund shall comply with applicable law,
including ERISA. The Trustee shall hold, manage, administer,
invest, reinvest, account for, and otherwise deal with the Trust
and each separate Fund as provided in the Trust Agreement.
Upon becoming an Active Participant or at any time
thereafter, each Participant may elect, pursuant to rules and
procedures adopted by the Fund Committee, and effective at such
time as prescribed by the Fund Committee, that contributions to
such Participant's Before Tax Contributions Account, After Tax
Contributions Account, Retirement Contributions Account, Profit
Sharing Contributions Account, Rollover Contributions, Qualified
Nonelective Contributions Account and Prior Plan Account and
repayments of a loan made pursuant to Article 9, shall be
invested in any proportion in any one or more Funds. Subject to
rules established by the Fund Committee, a Participant may change
his investment directions with respect to any such future
contributions and also may direct that any portion of such
Accounts be transferred to another Fund or reallocated among the
Funds. In no case may any Participant change investment
directions with respect to future contributions or direct a
reallocation if the direction would cause the investment in any
securities of an Employer ("Company Stock") to exceed twenty-five
percent (25%) of the current value of the total of his Before Tax
Contribution Account, After Tax Contribution Account, Profit
Sharing Contributions Account, Retirement Contributions Account,
Rollover Account and Prior Plan Account. The Company Ownership
Contributions Account and ESOP Account of each Participant shall
remain invested in Company Stock and shall not be invested in any
Fund, except to the extent provided in Sections 4.5 and 7.6, and
such Accounts shall not be counted for purposes of the 25%
limitation in the preceding sentence. In no event may the Plan
hold more than 1% of the outstanding Company Stock.
The Plan is intended to constitute a plan described in
Section 404(c) of ERISA, so that neither the Fund Committee nor
any other Plan fiduciary shall have any liability for losses
which are the direct and necessary result of a Participant's
investment instructions. In furtherance of this intent, the Fund
Committee (or its delegate) shall be responsible for ensuring
that adequate procedures are installed and utilized for the
safeguarding of confidential information as to the ownership of,
and the exercise of ownership rights with respect to, any Company
Stock. In addition, the Fund Committee (or its delegate) shall
appoint an independent fiduciary to carry out those activities
which the Fund Committee determines involve a potential for undue
Employer influence on Participants with regard to the direct or
indirect exercise of shareholder rights with respect to Company
Stock.
7.2 Accounting. The Administrative Committee shall cause
separate Accounts to be maintained for each Participant.
Accounts shall also be maintained with respect to each Fund
selected by a Participant. Except as specifically provided in
this Plan, the Administrative Committee shall prescribe rules for
accounting for contributions, allocations, forfeitures, and
expenses. Such rules shall conform to generally accepted
accounting principles.
The Administrative Committee shall cause to be maintained as
a separate account, for tax calculation purposes, the portion of
a Participant's After Tax Contributions Account that is
attributable to such Participant's After Tax Contributions made
after December 31, 1986. Such account shall be treated as a
separate tax contract under Code Section 72(e) to calculate the
taxable amount of a distribution.
The net earnings, losses and unrealized appreciation of the
Trust Fund shall be determined and allocated to the Account of
Participants in accordance with the provisions of the Trust
Agreement.
7.3 Allocation of Forfeitures. Forfeitures shall be
allocated to the Profit Sharing Contributions Account of
Participants who are Active Participants employed by an Employer
as of the last day of a Plan Year. Prior to January 1, 1999, for
the purpose of this Section, a Participant who, during the Plan
Year, retires from employment on or after his Normal or Early
Retirement Age, dies, or becomes Disabled shall be considered to
be an Active Participant employed by an Employer on the last day
of the Plan Year in which he retired, died, or became Disabled.
Forfeitures shall be allocated to a Participant's Profit
Sharing Contributions Account in the same proportion that his
Compensation for the first three quarters of the Plan Year and
the last quarter of the prior Plan Year bears to the aggregate of
such Compensation paid to Participants who are entitled to an
allocation of forfeitures for the Plan Year.
7.4 Expenses. To the extent not paid by the Employers in
their discretion, brokerage fees, transfer taxes, and other
expenses incident to the purchase or sale of securities and other
investments by the Trustee shall be deemed to be part of the cost
of such securities and investments, or deducted in computing the
proceeds of a sale, as the case may be. To the extent not paid
by the Employer, other expenses of administering the Plan and the
Trust, including (a) the fees and expenses of any Member and of
the Trustee for the performance of their duties under the Plan
and Trust, (b) the expenses incurred by authorized persons in the
performance of their duties (including reasonable compensation
for legal counsel, certified public accountants, consultants, and
agents), and (c) all other proper charges and disbursements with
respect to the Plan (including settlement of claims or legal
actions approved by the Plan) shall be netted against current
earnings. Expenses in excess of such earnings shall be paid out
of the Trust Fund and allocated to and deducted from the
Participants' Accounts.
7.5 Allocation of Contributions. Contributions shall be
allocated to Participants' Accounts in the manner specified in
Article 4.
7.6 Limited Transfers to Rollover Account.
(a) Elections. "Qualified participants" (as defined in
Subsection (c) below) shall be permitted to make an election to
transfer certain amounts from the Company Ownership Contributions
Account and ESOP Account to the ESOP Contributions Subaccount of
his Rollover Contributions Account. Such an election may be
made in writing during the 90-day period after the close of each
Plan Year (the "election period").
(b) Amount Subject to Election. During his initial five
election periods, a qualified participant may elect to transfer a
portion of the Company Ownership Contributions Account and ESOP
Account equal to no more than the difference of (1) over (2) as
follows:
(1) 25 percent of the sum of (A) the Participant's
Company Ownership Contributions Account and ESOP Account,
determined as of the Valuation Date immediately preceding
the election period and (B) any prior transfers which have
been made by the Participant under this Section, less
(2) the amount of all prior transfers which have
been made by the Participant under this Section.
During his sixth (and subsequent) periods, a qualified
participant may elect to transfer a portion of the Company
Ownership Contributions Account and ESOP Account equal to
no more than the amount determined by the above formula,
except that the term "50 percent" shall be substituted for
the term "25 percent" in (1).
(c) Qualified Participants. A Participant shall become a
"qualified participant" during the Plan Year in which occurs the
later of his (1) fifty-fifth birthday or (2) completion of five
years of participation in the Plan.
(d) Revocation of Elections. A qualified participant who
has made the election described in Subsection (a) above may
revoke or modify such election, and may thereafter make a
subsequent election, at any time during the election period.
(e) De Minimis Amounts. Notwithstanding Subsection (a)
above, the Administrative Committee need not permit a Participant
to elect to make a transfer if the amount described in Subsection
(b) is $500 or less.
(f) Time of Distribution. If a Participant elects to cause
a transfer within the appropriate election period, pursuant to
Subsection (a) above, such transfer shall be made within the 90-
day period immediately following the close of the election
period.
ARTICLE 8
Distributions
8.1 In-Service and Hardship Withdrawals. Except as
provided in this Article, there shall be no distributions from a
Participant's Account prior to his termination from the
employment from his Employer and all Affiliates. Notwithstanding
the preceding sentence, in accordance with procedures established
by the Administrative Committee, a Member shall be entitled to
withdraw amounts at any time from his After Tax Contributions
Account, and at any time after his attainment of age 59-1/2 from
his Before Tax Contributions Account. The distribution shall be
made in a lump sum as soon as reasonably practicable after the
Member makes application for the distribution in accordance with
procedures established by the Administrative Committee.
Subject to the approval of the Administrative Committee, an
Active Participant may make a hardship withdrawal from the
Participant's Before Tax Contributions (but not from any earnings
on such amounts). A hardship withdrawal shall only be made in
the event of a financial hardship, which shall be limited to the
following situations:
(a) medical expenses, as described in Code Section 213(d),
previously incurred by the Participant, the Participant's spouse,
or any dependents of the Participant, or necessary for these
persons to obtain medical care described in Section 213(d) of the
Code;
(b) purchase (excluding mortgage payments) of a principal
residence of the Participant;
(c) payment of tuition for the next twelve months of
post-secondary education for the Participant, or the
Participant's spouse, children, or dependents;
(d) the need to prevent the eviction of the Participant
from the principal residence or foreclosure on the mortgage of
the Participant's principal residence; and
(e) any other situations deemed to constitute an immediate
and heavy financial hardship under the final Code Section 401(k)
regulations.
A hardship withdrawal shall be deemed necessary to satisfy
an immediate and heavy financial need described above, if the
following requirements are met:
(a) the distribution does not exceed the amount of the
Participant's immediate and heavy financial need (including the
need to pay taxes or penalties on the distribution);
(b) the Participant has previously obtained all other
distributions and nontaxable loans currently available from the
Employer's plans;
(c) all qualified and nonqualified plans maintained by the
Employer prohibit the Participant from making Before Tax
Contributions or other employee contributions for the 12-month
period following receipt of the hardship distribution; and
(d) contributions (if any) made by the Participant for the
taxable year during which the suspension in (c) above ends shall
not, when aggregated with contributions made with respect to the
taxable year in which the suspension begins, exceed the
limitation imposed under Section 402(g) of the Code.
A Participant shall not fail to be treated as an Active
Participant for the purpose of Section 4.1 merely because the
Participant's contributions are suspended pursuant to
subparagraphs (c) or (d) above.
8.2 Entitlement to Distribution upon Termination of
Employment.
8.2.1 Termination of Employment. A Participant
who Terminates Employment with an Employer and all
Affiliates (or who incurred such a Termination of
Employment prior to the Effective Date) shall be entitled
to a distribution of the vested portion of his Account,
determined as of the Valuation Date coinciding with or
immediately preceding the date as of which such
distribution is made, as soon as practicable after the
Participant elects a distribution (but in no event less
than 60 days after such election), in the following manner:
(a) With respect to all Accounts other than the
Accounts (and Subaccounts) specified in subsections (b) and
(c) below:
(1) a lump sum, provided the Participant has
attained (or, if deceased, would have attained) age
62; or
(2) in substantially equal annual, semiannual,
or monthly installments, or, prior to January 1, 1999,
quarterly installments, plus net income (or loss)
over, effective January 1, 1999, a period of not less
than fifteen years (prior to January 1, 1999, a period
of fifteen years), provided the Participant has
attained (or, if deceased, would have attained) age
55; provided that, not more than once per Plan Year, a
Participant may elect to (i) change the amount and
duration of his installment payments, or (ii) reduce
the duration of the installment payments elected under
this Section by receiving a distribution of a single
sum payment of any amount specified by the
Participant; or
(3) a one-time direct rollover under Section
8.10 of all amounts in his Before Tax Contributions
Account, Retirement Contributions Account, Rollover
Contributions Account (other than the ESOP
Contributions Subaccount) and, effective January 1,
1999, Profit Sharing Contributions Account (prior
to January 1, 1999, up to $25,000 of the amounts in
his Profit Sharing Contributions Account).
(b) With respect to the Participant's Company
Ownership Contributions Account, and, effective January 1,
1997, ESOP Account and the ESOP Contributions Subaccount of
the Rollover Contributions Account, a lump sum in cash or,
at the Participant's election, shares of Company Stock.
(c) With respect to Prior Plan Accounts, as provided
in Appendix A.
8.2.2 Disabled Participants. Notwithstanding
Section 8.2.1, a Disabled Participant may withdraw up to
ten percent (10%) of the value of his Account at any time
without regard to any requirement regarding his age or
years of Vesting Service.
8.2.3 Limitation on Duration of Payout.
Notwithstanding any other provisions of the Plan,
distribution of the Account of each Participant shall
comply with Code Section 401(a)(9) and any regulations
promulgated thereunder by the Secretary of the Treasury,
which are incorporated into the Plan by reference. No
later than the date a distribution first is required to
begin pursuant to such requirements, the affected
participant and his or her spouse (if applicable) may elect
not to redetermine his or her life expectancy annually,
pursuant to the permissive recalculation rule of Code
Section 401(a)(9)(D). The election in effect at the time
of the first required distribution under Code Section
401(a)(9)(D) shall be irrevocable and apply to all
subsequent years. Absent such an election, life expectancy
will be redetermined annually.
8.2.4 Distributions in Excess of $5,000. In the
event that the Participant's nonforfeitable interest in his
Account exceeds $5,000 ($3,500 prior to 1998), or exceeded
such amount at the time of a prior distribution, no
distributions prior to Normal Retirement Age shall be made
from such Account without the consent of the Participant.
Such consent must be given no more than 90 nor less than 30
days prior to the date the distribution is to begin.
However, such distribution may commence less than 30 days
after such consent is given, provided that (1) the
Administrative Committee clearly informs the Participant
that the Participant has a right to a period of at least 30
days after receiving notice of his rights to defer the
distribution to consider whether or not to elect a
distribution, and (2) the Participant, after receiving the
notice, affirmatively elects a distribution.
8.2.5 Distributions Not in Excess of $5,000.
Notwithstanding any other provision of the Plan, in the
event that the Participant's nonforfeitable interest in his
Account does not exceed $5,000 ($3,500 prior to 1998), and
never exceeded such amount at the time of a prior
distribution, distributions prior to Normal Retirement Age
shall be made from such Account as soon as practicable
after a Participant's Termination of Employment without the
consent of the Participant.
8.2.6 Distributions Upon a Disposition of Certain
Assets or Sale of a Subsidiary. Upon a disposition by the
Company of at least 85% of the assets (within the meaning
of Section 409(d)(2) of the Code) used by the Company in a
trade or business or upon the disposition by the Company of
its interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code), the Before-Tax Contribution Account
of each Participant who continues in employment with the
employer acquiring such assets or with such subsidiary may
be distributed, provided that:
(a) the Company continues to maintain the Plan after
such sale or disposition,
(b) the employer of such Participants after such sale
or disposition is not an Affiliate, does not adopt the Plan
or otherwise become an Employer, and does not accept any
transfer of assets or liabilities from the Plan to a plan
it maintains in a transaction subject to Section 414(l) of
the Code,
(c) payment is made in the form of a lump-sum
distribution (as defined in Section 402(d)(4) of the Code,
without regard to subsections (i) through (iv) of
subparagraph (A), subparagraph (B), or subparagraph (F)
thereof), and
(d) such distribution is made by the end of the
second calendar year following such sale or disposition.
8.3 Distribution After Disposition. Notwithstanding any
other provision of the Plan, in the event of a sale or other
disposition by the Company or any Employer to a purchaser other
than a Controlled Group Member of (a) all or substantially all of
the assets used by the Company or by an Employer in a trade or
business, or (b) an Employer's stock, a Participant's termination
of employment for purposes of Article 8 will occur on the date of
such sale or disposition with respect to a Participant who
continues in employment with the purchaser, unless the purchaser
agrees in connection with the sale or other disposition to be
substituted for the Company as the sponsor of the Plan or to
establish a defined contribution plan that is qualified under
Section 401(a) of the Code to which Plan assets in the amount of
the Participant's benefit (as determined under Section 414 of the
Code) under the Plan will be transferred.
8.4 Acceleration of Installment Payments to a Beneficiary
who is a Surviving Spouse. Pursuant to administrative procedures
established by the Administrative Committee, a Beneficiary who is
the surviving spouse of a Participant, has at least 25 years of
service with the Company, and who is receiving distribution of
such Participant's Account in installment payments pursuant to
Section 8.2.1(a)(2) may elect in writing at any time, in lieu of
receiving further installment payments, to receive in a single
sum payment the remainder of the Participant's Account,
determined as of the Valuation Date coincident with the date as
of which such single sum distribution is made. Such single sum
distribution shall be made as soon as practicable after such
election is submitted to the Administrative Committee, provided
that the installment payments shall continue until the Valuation
Date as of which such single sum distribution is made.
8.5 Due Date for Benefit Payments. Payments to a
Participant or Beneficiary shall be made as soon as practicable
following the completion of the valuation and accounting process
which determines the amount of the payment. However, except as
provided in the following paragraph, payment of benefits to a
Participant shall be made not later than the sixtieth day after
the close of the Plan Year in which the latest of the following
events occur:
(a) the attainment by the Participant of age 65;
(b) the tenth anniversary of the date on which the
Participant commenced active participation in the Plan;
(c) the date of the Participant's resignation or dismissal
from the employment of his Employer and all Affiliates; or
(d) the date elected by a Participant for a deferred
distribution pursuant to the final paragraph of this Section.
If payment cannot be made on a date it is required to be
made because the Administrative Committee, after making
reasonable efforts, cannot locate the payee or the amount of the
payment cannot be ascertained, a payment retroactive to the
required date shall be made no later than 60 days after the
earliest date on which the amount of the payment can be
ascertained or the date on which the payee is located.
If the Administrative Committee is unable to locate a proper
Payee within one year after an Account becomes payable, it may
treat the balance credited to the Account as a forfeiture.
However, if a claim for benefits is subsequently presented by a
person entitled to a payment, the forfeited amount shall be
recredited to the Account upon verification of the claim.
Forfeitures restored under this Section shall be paid from
current forfeitures, and if insufficient, from an additional
Employer contribution (without regard to the existence of
Profits).
Notwithstanding the foregoing, a Participant with a
nonforfeitable interest in his Account in excess of $5,000
($3,500 prior to 1998) may elect to defer the distribution of
benefits under the Plan to a date later than that prescribed
under the first paragraph of this Section, but not later than the
later of (a) the April 1 following the Plan Year in which the
Participant attains age 70-1/2 or (b) incurs a Termination of
Employment. If the Participant's interest is retained in the
Trust Fund, the amount to be distributed shall be the amount
credited to the Account as of the Valuation Date coincident with
or immediately preceding the date elected for the commencement of
benefit payments.
8.6 Designation of Beneficiary. Each Participant shall
have the right to designate a Beneficiary or Beneficiaries (who
may be designated contingently or successively, and which may be
an entity other than a natural person) to receive any
distribution to be made upon the death of the Participant. A
Participant may, from time to time, change or cancel any such
designation. Such designation, change, or cancellation shall be
made on the form prescribed by the Administrative Committee,
shall be effective upon filing with the Administrative Committee
and shall supersede all prior Beneficiary designations. If no
designated Beneficiary is alive at the time of the Participant's
death, the deceased Participant's Account shall be distributed
(a) to the surviving spouse of the deceased Participant, if any,
or (b) if there shall be no surviving spouse, to the surviving
children of the Participant (including a legally adopted child),
if any, in equal shares, or (c) if there shall be no surviving
spouse or surviving children, to the executors or administrators
of the estate of the Participant, or (d) if no executor or
administrator shall have been appointed for the estate of the
Participant within six months from the date of the Participant's
death, to the person or persons who would be entitled under the
intestate succession laws of the state of the Participant's
domicile to receive the Participant's personal estate. The
marriage of a Participant shall be deemed to revoke any prior
designation of Beneficiary made by him, and a divorce or judgment
of legal separation shall be deemed to revoke any prior
designation of the Participant's divorced or separated spouse, if
written evidence of such marriage, legal separation, or divorce
shall be received by the Administrative Committee before
distribution shall have been made in accordance with such
designation. The Administrative Committee may require such proof
of death and such evidence of the existence, identity, and rights
of any beneficiary or person claiming to be a beneficiary as the
Administrative Committee may deem advisable.
Notwithstanding the above, the Beneficiary of a married
Participant shall be the Participant's spouse, unless the
Participant has designated another person as Beneficiary, the
spouse has consented in writing to the designation of the
specific nonspouse Beneficiary (including any class of
Beneficiaries or any contingent Beneficiaries), the consent
acknowledges the effect of such election, and it is witnessed by
a Plan representative or a notary public. The spouse's consent
shall not be required if the spouse cannot be located or because
of other circumstances specified by Treasury regulations.
8.7 Facility of Distribution. If the Administrative
Committee determines that a Participant or any other person
entitled to any distribution under the Plan is unable to care for
his affairs because of illness or accident or any other reason,
or is a minor, any such distributions due may, to the extent
permitted by law (unless claim shall have been made therefor by a
duly appointed guardian, conservator, or other legal
representative), be made at the discretion of the Administrative
Committee to the spouse, child, parent or other blood relative,
or to any person deemed by it to have incurred expenses for such
Participant or other person entitled to distributions under the
Plan, and such distribution so made shall be a complete discharge
of the liabilities of the Plan therefor.
8.8 Nonassignability. Except to the extent permissible
under Code Section 401(a)(13), no Account or benefit under this
Plan shall be anticipated, assigned (either at law or in equity),
alienated or subject to attachment, garnishment, levy, execution,
or other legal or equitable process (whether voluntary or
involuntary). Notwithstanding the foregoing, the Plan shall make
all payments required by a qualified domestic relations order
within the meaning of Code Section 414(p). The Administrative
Committee shall establish a procedure to determine the qualified
status of a domestic relations order and to administer the
distribution under a qualified order. To the extent provided by
the terms of a qualified domestic relations order, an alternate
payee may at any time request distribution from the Plan, payable
as soon as practicable after the close of any Plan Year following
the Plan Year in which such domestic relations order is
determined by the Administrative Committee to be "qualified" in
the form of a direct rollover under Section 8.10 (as applicable
to an alternate payee) of all amounts in his Before Tax
Contributions Account, Rollover Account, Retirement Contribution
Account, and Company Ownership Contributions Account and up to
$25,000 of his Profit Sharing Contributions Account; provided
that, if such alternate payee's interest in the Plan does not
exceed $5,000 ($3,500 prior to 1998) at the close of such Plan
Year, such amounts shall be distributed as soon as practicable
regardless of whether the alternate payee makes such a request.
8.9 Tax Withholding. The Employer or the Trustee (as
appropriate) may withhold from payments under the Plan or other
compensation of a Member any taxes required by law to be withheld
with respect to benefit payments or contributions under this Plan
and such sum as the Employer or the Trustee may reasonably
estimate as necessary to cover any taxes for which the Employer
or the Trustee may be liable and which may be assessed with
respect to benefit payments or contributions under the Plan.
8.10 Direct Rollovers. A Participant who is entitled to a
distribution under the Plan, his surviving spouse, or his former
spouse who is the alternate payee under a qualified domestic
relations order (a "distributee"), may elect, at the time and in
the manner prescribed by the Administrative Committee, to have
any portion of an "eligible rollover distribution" paid directly
to an "eligible retirement plan" specified by the distributee in
a "direct rollover."
For purposes of this Section, 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 to the
extent such distribution is required under Code
section 401(a)(9); any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary, or
for a specified period of ten years or more; and the portion of
any distribution that is not includible in gross income. An
"eligible retirement plan" is an individual retirement account
described in Code section 408(a), an individual retirement
annuity described in Code section 408 (b), an annuity plan
described in Code section 403(a), or a qualified trust described
in Code section 401(a), that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible
rollover distribution to a surviving spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity. A "direct rollover" is a payment by the Plan
to the eligible retirement plan specified by the distributee.
8.11 Military Service. Notwithstanding any provisions of
this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the code.
"Qualified military service" means any service in uniformed
services (as defined in chapter 43 of title 38 of the United
States Code) by any individual if such individual is entitled to
reemployment rights under such chapter with respect to such
service.
ARTICLE 9
Plan Loans
9.1 Eligibility. Any former Member who is a Participant
and a "party in interest," within the meaning of ERISA
Section 3(14), or any Active Participant may apply by written or
telephonic means as provided by the Administrative Committee for
a loan from his Before Tax Contributions Account, After Tax
Contribution Account, Rollover Contributions Account and Prior
Plan Account (to the extent provided in Appendix A to the Plan)
(collectively "Eligible Loan Accounts"). Such application may be
made no more frequently than once per calendar quarter. If the
Administrative Committee determines that the Participant is
entitled to a loan in accordance with the provisions of this
Section, the Administrative Committee shall direct the Trustee to
make a loan to the Participant from such Eligible Loan Accounts.
Each loan shall be charged against the Participant's Eligible
Loan Accounts in the following order: Rollover Contributions
Account, After Tax Contributions Account, and Before Tax
Contributions Account.
9.2 Loan Amounts. Each loan shall be in an amount which
is not less than $1000 and shall be expressed in increments of
$25. A Participant may have outstanding at any one time not more
than three (3) loans. The maximum loan to any Participant (when
added to the outstanding balance of all other loans to the
Participant from all qualified employer plans (as defined in
section 72 (p)(4) of the Code) of the Employer and any Affiliate)
shall be an amount which does not exceed the lesser of:
(a) $50,000, reduced by the excess (if any) of (i) the
highest outstanding balance of such other loans during the
one-year period ending on the day before the date on which such
loan is made, over (ii) the outstanding balance of such other
loans on the date on which such loan is made; or
(b) 50% of the value of such Participant's vested interest
in his Eligible Loan Accounts on the date on which such loan is
made.
9.3 Source of Loan. For each Participant for whom a loan
is authorized pursuant to this Section, the Administrative
Committee shall (a) direct the Trustee to liquidate the
Participant's interests in Funds to the extent necessary to
provide funds for the loan and in such order as the
Administrative Committee may prescribe, (b) direct the Trustee to
disburse such funds to the Participant upon the Participant's
execution of the Note referred to Section 9.4, (c) transmit to
the Administrative Committee the executed Note, and (d) establish
and maintain a separate fund (the "Loan Fund") as a separate
record keeping account within the Participant's Account (1) which
initially shall be in the amount of the loan, (2) to which the
funds for the loan shall be deemed to have been allocated and
then disbursed to the Participant, (3) to which the Note shall be
allocated, and (4) which shall show the unpaid principal of and
interest on the Note from time to time. All payments of
principal and interest by a Participant shall be credited
initially to his Loan Fund and applied against the Participant's
Note, and then invested in the Funds pursuant to the
Participant's direction under Section 7.1. The Trustee shall
value each Participant's Loan Fund as of each Valuation Date.
Notwithstanding any other provision of the Plan, a Participant's
Loan Fund shall constitute a part of his Account under the Plan.
9.4 Loan Terms. Loans made pursuant to this Section:
(a) shall be made available to all Participants on a
reasonably equivalent basis;
(b) shall not be made available to Highly Compensated
Members in a percentage amount greater than the percentage amount
made available to other Participants;
(c) shall be secured by the Participant's Loan Fund;
(d) shall be evidenced by a promissory note and security
agreement (the "Note") executed by the Participant which provides
for:
(1) the security referred to in paragraph (c);
(2) a reasonable rate of interest, determined by the
Administrative Committee, which provides the Plan with a
return commensurate with the prevailing interest rate
charged by persons in the business of lending money for
loans which would be made under similar circumstances;
(3) repayment within a specified period of time, which
shall not extend beyond five years from the date the loan is
made (fifteen years in the case of a loan used to acquire a
dwelling unit which is used or which will, within a
reasonable time; be used as the Participant's principal
residence);
(4) repayment in equal payments over the term of the
loan, with payments not less frequently than quarterly; and
(5) for such other terms and conditions as the
Administrative Committee shall determine, which shall
include provision that:
(i) with respect to a Participant who is a
Member, the loan will be repaid pursuant to
authorization by the Participant of equal payroll
deductions over the repayment period sufficient to
amortize fully the loan within the repayment period;
(ii) the loan shall be prepayable in whole at any
time without penalty; and
(iii) the loan shall be in default and become
immediately due and payable upon the first to occur of
the following events: (A) ninety (90) days after the
Participant's failure to make a required payment on
the promissory note; (B) in the case of a Participant
who is a Member, revocation of the authorization
referred to in clause (i) of this sentence; (C) in
the case of a Participant who is not a Member,
commencement of distribution of his Account; or
(D) the filing of a petition, the entry of an order or
the appointment of a receiver, liquidator, trustee or
other person in a similar capacity, with respect to
the Participant, pursuant to any state or federal law
relating to bankruptcy, moratorium, reorganization,
insolvency or liquidation, or any assignment by the
Participant for the benefit of his creditors.
9.5 Security. Notwithstanding any other provision of the
Plan, a loan made pursuant to this Section shall be a first lien
against the Participant's Loan Fund. Any amount of principal or
interest due and unpaid on the loan at the time of any default on
the loan, and any interest accruing thereafter, shall be
satisfied by deduction from the Participant's Loan Fund, and
shall be deemed to have been distributed to the Participant, as
follows:
(a) in the case of a Participant who, at the time of the
default, is a Participant and is not eligible (without regard to
the required filing of an application) to receive distribution of
his Account under the provisions of Article 7 (other than a
hardship withdrawal), at such time as he first becomes eligible
(without regard to the required filing of an application) to
receive distribution of his Account under the provisions of
Article 7 (other than a Hardship Withdrawal); or
(b) in the case of any other Participant, immediately upon
such default.
If, as a result of the application of the preceding
sentence, an amount of principal or interest on a loan remains
outstanding after default, interest at the rate specified in the
Note shall continue to accrue on such outstanding amount until
fully satisfied by deduction from the Participant's Loan Fund as
hereinabove provided or by payment by or on behalf of such
Participant.
9.6 Additional Terms. Each loan shall be made only in
accordance with regulations and rulings of the Internal Revenue
Service and the Department of Labor. The Administrative
Committee shall be authorized to administer the loan program of
this Section and shall act in its sole discretion to ascertain
whether the requirements of such regulations and rulings and this
Section have been met.
9.7 Suspension of Payments During Military Service.
Notwithstanding any other provision of the Plan, loan repayments
will be suspended under the Plan as permitted under Section
414(u)(4) of the Code (for Participants on a leave of absence for
"qualified military service", as defined in Section 8.11 of the
Plan).
ARTICLE 10
Top-Heavy Provisions
10.1 Application of Top-Heavy Provisions. Except as
otherwise provided in this Section, if as of a Determination
Date, the sum of the amount of the Section 416 Accounts of Key
Employees and the Beneficiaries of deceased Key Employees exceeds
60 percent of the amount of the Section 416 Accounts of all
Participants and Beneficiaries, the Plan is top-heavy and the
provisions of this Article shall become applicable.
If as of a Determination Date this Plan is part of an
Aggregation Group which is top-heavy, the provisions of this
Article shall become applicable. Top heaviness for the purpose of
this Section shall be determined with respect to the Aggregation
Group in the same manner as described in the preceding paragraph,
except that if the Aggregation Group includes a defined benefit
plan, the Section 416 Account shall include the present value of
the accrued benefit of a Participant or a beneficiary under such
plan. If this Plan is top-heavy under the preceding paragraph,
but the Aggregation group is not top-heavy, this Article shall
not be applicable.
The Fund Committee shall have responsibility to make all
calculations to determine whether this Plan is top-heavy.
10.2 Definitions.
10.2.1 Aggregation Group means this Plan and all
other plans maintained by the Employer and its Affiliates
which cover a Key Employee and any other plan which enables
a plan covering a Key Employee to meet the requirements of
Code Sections 401(a)(4) or 410. In addition, at the
election of the Administrative Committee, the Aggregation
Group may be expanded to include any other qualified plan
maintained by an Employer or an Affiliate if such expanded
Aggregation Group meets the requirements of Code Sections
401(a)(4) and 410.
10.2.2 Determination Date means the last day of the
Plan Year immediately preceding the Plan Year for which top-
January 2, 1998 heaviness is to be determined.
10.2.3 Key Employee means a Participant who, for
the Plan Year containing the Determination Date or any of
the four preceding Plan Years, is:
(a) an officer of an Employer or an Affiliate having
annual compensation greater than 150 percent of the dollar
limitation under Code Section 415(c)(1)(A) for the Plan
Year; provided, however, that no more than the lesser of
(A) 50 Members, or (B) the greater of (i) three Members, or
(ii) 10 percent of all Members shall be treated as
officers, and such officers shall be those with the
highest annual compensation in the five-year period;
(b) one of the ten Members who owns (or is considered
to own within the meaning of Code Section 318) both a
one-half of one percent interest and one of the largest
interests in the Employer and who earns an amount equal to
or more than the dollar limit specified in Code
Section 415(c)(l)(A);
(c) a 5 percent owner of an Employer; or
(d) a 1 percent owner of an Employer having an annual
compensation of more than $150,000.
For purposes of this Subsection the term Key Employee
shall also include the Beneficiary of a deceased Key
Employee. For purposes of subparagraph (b), if two Members
have the same ownership interest in an Employer, then the
Member having the greater annual compensation from
Employers and Affiliates shall be treated as having the
larger interest. Ownership shall be determined in
accordance with Code Section 416(i)(1)(B) and (C).
10.2.4 Section 416 Account means
(a) the amount credited to a Participant's or
Beneficiary's Account as of a Determination Date (including
amounts to be credited as of the Determination Date but
which have not yet been contributed), decreased by
(b) the amount credited to the Rollover Contributions
Account as of a Determination Date attributable to Rollover
Contributions initiated by the Participant after December
31, 1983 and derived from plans not maintained by an
Employer or an Affiliate, and increased by
(c) the amount of distributions to the Participant or
Beneficiary during the five-year period ending on a
Determination Date other than a distribution which is a
tax-free rollover contribution that is not initiated by the
Participant or that is contributed to a plan which is
maintained by an Employer or an Affiliate.
The Account of a Participant who was a Key Employee and who
subsequently meets none of the conditions of that definition for
the Plan Year containing the Determination Date and the preceding
four Plan Years and the Account of a Participant who has provided
no services to an Employer or an Affiliate during the five-year
period ending on the Determination Date are not Section 416
Accounts and shall be excluded from all computations under this
Article.
10.2.5 Compensation for purposes of this Article
shall have the same meaning as for purposes of Section 5.8,
but shall exclude amounts paid during a period which is not
included within a year of Top-Heavy Service.
10.2.6 A year of Top-Heavy Service shall be
credited for each year of Vesting Service with respect to a
Plan Year in which the Plan is top-heavy.
10.3 Vesting Requirements. If this Plan is determined to
be top-heavy with respect to a Plan Year under the provisions of
Section 10.1, then a Participant's nonforfeitable interest in the
Profit Sharing Contributions Account shall vest in accordance
with the following table, but only to the extent it would result
in faster vesting than under Section 6.2.
Years of Vesting Vesting
Service Percentage
1 10%
2 20%
3 40%
4 60%
5 or more 100%
If in a subsequent Plan Year the Plan is no longer
top-heavy, the vesting schedule of Section 6.2 shall be
reinstated, but in no case shall the vesting percentage with
respect to amounts credited to the Profit Sharing Contributions
Account as of the date of the reinstatement be less than the
vesting percentage on such date under this Section, and a
Participant with three years of Vesting Service may elect to
remain under the Top-Heavy schedule.
10.4 Minimum Contribution. If this Plan is determined to
be top-heavy under the provisions of Section 10.1 with respect to
a Plan Year, the sum of Employer contributions (excluding
contributions made to a qualified plan on or before December 29,
1985 pursuant to a salary reduction agreement) and forfeitures
under all qualified defined contribution plans allocated to the
accounts of each Participant in the Aggregation Group who is not
a Key Employee and who is a Member on the last day of the Plan
Year shall not be less than 3 percent of such Participant's
compensation. This Section shall not be applicable with respect
to a Participant who is also covered under a top-heavy defined
benefit plan maintained by an Employer or an Affiliate.
The contribution rate specified in the preceding paragraph
shall not exceed the percentage at which Employer contributions
and forfeitures are allocated under the plans of the Aggregation
Group to the account of the Key Employee for whom such percentage
is the highest for the Plan Year.
10.5 Limit on Annual Additions: Combined Plan Limit. If
this Plan is determined to be top-heavy under Section 10.1, the
limitations of Code Section 415, as set forth in Section 5.8.
shall be applied by substituting 1.0 for 1.25, and the
transitional rule of Code Section 415(e)(6)(B)(i) shall be
applied by substituting "$41,500" for "$51,075," but not if
(A) Section 10.4 is applied by substituting "4 percent" for "3
percent," and (B) this Plan would not be top-heavy if "90
percent" is substituted for "60 percent" in Section 10.1.
If, but for this paragraph, the preceding paragraph would
begin to apply with respect to the Plan, the application of the
preceding paragraph shall be suspended with respect to a
Participant so long as there are no (A) Employer Contributions,
forfeitures, or voluntary nondeductible contributions allocated
to such Participant, and (B) accruals under a qualified defined
benefit plan for such Participant.
ARTICLE 11
Administration
11.1 Plan Administrator. The Plan Administrator, within
the meaning of ERISA Section 3(16)(A), shall mean the Company.
11.2 Committees: In General. The Company shall have two
committees to administer the Plan, the members of which may or
may not be Participants in the Plan. The committees shall be the
Pension and Retirement Fund Committee ("Fund Committee"), and the
Pension and Retirement Administrative Committee ("Administrative
Committee"). The following rules and procedures shall apply to
each committee:
(a) Each member of a committee shall serve until a
successor is appointed. In case of a vacancy in the membership
of a committee, the remaining members may exercise any and all
the powers, duties, authority, and discretion conferred upon the
committee pending the filling of the vacancy.
(b) Any member of a committee may resign at any time by
giving written notice of resignation to the President or
Secretary of the Company. Such resignation shall take effect
immediately upon receipt of such notice by the President or
Secretary of the Company, unless a later effective date is stated
therein.
(c) A secretary shall be selected, who need not be a member
of the committee.
(d) A majority of the members of a committee in office at
the time shall constitute a quorum for the transaction of
business. All resolutions adopted, and other actions taken by a
committee at any meeting shall be by vote of a majority of those
present at any such meeting and constitute a quorum. Upon
concurrence in writing of a majority of the members at the time
in office, action of a committee may be taken without a meeting.
(e) Rules of procedure and regulations necessary for the
proper and efficient administration of the Plan shall be adopted,
providing the rules are not inconsistent with the terms of the
Plan.
11.3 Fund Committee. The members of the Fund Committee
shall be appointed by the Board of Directors. Members may be
chosen from among the Members of the Company or a wholly-owned
subsidiary of the Company or from the Board of Directors. The
Fund Committee shall not be considered a committee of the Board
of Directors. The number of Fund Committee members shall be the
number appointed by the Board of Directors from time to time, but
in no event shall be less than three. All vacancies shall be
filled by the Board of Directors. The Board of Directors shall
designate a member of the Fund Committee as Chairperson.
The Fund Committee shall have the power and duty to:
(a) appoint the Trustee or Trustees from time to time of
the Trust Fund;
(b) engage the services of an Investment Manager or
Managers (as defined in ERISA Section 3(38)), each of whom shall
have full power and authority to manage, acquire, or dispose (or
direct the Trustee with respect to acquisition or disposition) of
any Plan asset under its control;
(c) employ or appoint legal counsel, actuaries, or others
as may be necessary or convenient to aid in the function of the
Fund Committee.
(d) appoint the independent certified public accountants
serving as auditors of the Company to audit the Plan and Trust,
and the report of such audit shall be submitted to the Company,
the Trustee, the Fund Committee, and the Administrative Committee
(e) monitor the performance of the Investment Managers of
the Trust Fund and report to the Board of Directors concerning
such performance and its recommendations;
(f) employ investment evaluation services including those
that direct commissions as a method of payment;
(g) review, not less often than annually, all pertinent
Member information and Plan data in order to establish the
funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives;
(h) communicate annually to the Trustee and to any
Investment Manager the Plan's short-term and long-term financial
needs, so investment policy can be coordinated with the Plan's
financial requirements.
(i) amend the Plan from time to time as the Fund Committee
deems necessary or advisable except that any amendment which
would terminate the Plan or modify its formula for contributions
shall require advance approval of the Board of Directors.
11.4 Administrative Committee. The members of the
Administrative Committee shall be appointed by the Board of
Directors. The Administrative Committee membership will consist
of at least three members, who may be Participants in the Plan.
The Committee members will be appointed for a term of one year
with no limit on the number of terms they may serve. All
vacancies shall be filled by the Board of Directors. The Board
of Directors shall designate a member of the Administrative
Committee as Chairperson.
The Administrative Committee shall cause the Plan to be
administered in accordance with the provisions of this
instrument, shall maintain all accounts and records required by
this Plan, and shall possess full discretionary authority to
construe and interpret this Plan, to supply omissions, to resolve
inconsistences and ambiguities in the language of the Plan, and
to determine all questions arising in the administration,
interpretation, and application of this Plan, including without
limitation determining factual questions. The Administrative
Committee shall have all powers which may be necessary or
convenient to carry out the provisions of this Plan including
without limitation, the following:
(a) determining the eligibility of a Member to participate
in the Plan, the value of a Participant's Account, and the
nonforfeitable percentage of each Participant's Account;
(b) directing the Fund Committee concerning the crediting
and distribution of Participants' Accounts;
(c) reviewing and rendering decisions respecting a claim
for (or denial of a claim for) a benefit under the Plan;
(d) furnishing the Company with information which the
Company may require for tax or other purposes;
(e) engaging the services of any agent whom it may deem
desirable to assist with the performance of its duties; and
(f) authorizing one or more of its members, or a Member
employed by the Company, to act on its behalf in the day-to-day
administration of the Plan, and to sign on its behalf any
notices, directions, applications, certificates, consents,
approvals, waivers, letters, or other documents with such
authority evidenced by instruments signed by all members and
filed with the Trustee.
The Trustee may request the Administrative Committee in writing
to give the Trustee instructions with respect to any specific
matter relating to the administration, interpretation,
or application of this Plan. Notwithstanding the foregoing, the
Trustee shall have the duties and powers expressly granted to it,
and the Administrative Committee may make recommendations to the
Trustee with respect to any of the duties and powers of the
Trustee, but such recommendations shall not bind the Trustee.
11.5 Interested Member. No member of the Administrative or
Fund Committee may decide or determine any matter concerning the
distribution, nature, or method of settlement of his own benefits
under the Plan.
11.6 Individual Statement. As soon as practicable after
the end of each Plan Year, but within the time prescribed by
ERISA and the regulations under ERISA, the Plan Administrator
will deliver to each Participant (and to each Beneficiary) a
statement reflecting the condition of his Account in the Trust as
of that date and such other information ERISA requires to be
furnished the Participant or Beneficiary. No Participant, except
a member or a delegate of either the Administrative or the Fund
Committee, shall have the right to inspect the records reflecting
the Account of any other Participant.
11.7 Application for Benefits. Each person eligible for a
benefit under the Plan shall apply for such benefit by signing an
application form to be furnished by the Administrative Committee.
Each such person shall also furnish the Administrative Committee
with such documents, evidence, data, or information in support of
such application as it considers necessary or desirable.
11.8 Review of Claims.
11.8.1 Initial Review. The Company shall appoint
an individual or entity to make an initial determination
with respect to a disputed claim for benefits (the "Claims
Coordinator"). If any claim for benefits is wholly or
partially denied, the Claims Coordinator shall furnish a
written notice to a claimant of the adverse decision within
90 days after receipt of the claim, unless special
circumstances require on extension of time for the
processing of the claim. If such an extension is required,
a written notice of the extension shall be furnished to the
claimant before the termination of the initial 90-day
period. In no event shall the extension exceed a period of
90 days after the expiration of the initial period. The
extension notice shall indicate the special circumstances
requiring the extension and the date by which the Claims
Coordinator expects to render a decision.
The notice of an adverse decision shall state in a
manner calculated to be understood by the claimant
(a) the specific reasons for the denial;
(b) a specific reference to pertinent Plan provisions
on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the claim
and an explanation of why such material or information is
necessary; and
(d) appropriate information as to the steps to be
taken if the Participant or Beneficiary wishes to submit
his claim for review.
11.8.2 Appeal Procedure. Within 75 days after
the receipt by the claimant of the written notification of
a denial of a claim, the claimant may file with the
Administrative Committee a written request to review the
denial of the claim, request pertinent documents, and
submit issues and comments in writing. A final decision by
the Administrative Committee on the claim shall be made no
later than 60 days after the receipt of the request for
review, unless special circumstances require an extension.
Such extension shall not exceed 60 additional days. The
decision shall be in writing, shall include reasons for the
decision (including specific references to pertinent Plan
provisions), and shall be written in a manner calculated to
be understood by the claimant.
11.9 Employer-Employee Relationship. The establishment of
this Plan shall not be construed as conferring any legal or other
rights upon a Member or any other person to continue in
employment or as interfering with or affecting in any manner the
right of an Employer to discharge a Member or otherwise act with
relation to him. Each Employer may take any action (including
discharge) with respect to a Member or other person and may treat
him without regard to the effect which such action or treatment
might have upon him as a Participant in this Plan.
11.10 Expenses of Administration. The compensation of
the Trustee, any reasonable and proper attorneys' or management
fee incurred in the administration of the Trust Fund or other
reasonable and proper Plan expenses shall be paid by the Trust,
unless and to the extent that an Employer, in its sole
discretion, elects to pay them.
11.11 Indemnification. To the extent permitted by law
and Employer bylaws, the Employer shall indemnify each member of
the Fund Committee and the Administrative Committee, as well as
other Members and directors involved in the administration of the
Plan against all costs, losses, expenses, and liabilities,
including attorney's fees, incurred in connection with any
action, suit, or proceeding instituted against them alleging any
act of omission or commission in discharging duties with respect
to the Plan, provided such act is determined to have been in good
faith and does not constitute gross negligence or willful
misconduct. This indemnification is limited to the extent that
such costs and expenses are not covered under insurance.
Promptly after receipt by an indemnified party under this
Section of a notice of the commencement of an action, such
indemnified party shall notify the Company of the action. The
Company shall be entitled to participate at its own expense in
the defense or to assume the defense of an action brought against
any party. In the event the Company elects to assume the defense
of a suit, the defense shall be conducted by counsel chosen by
the Company, and the indemnified party shall bear the fees and
expenses of any additional counsel retained by him.
11.12 Disclaimer of Employer Liability. No liability
shall attach to an Employer for payment of a benefit or claim
under this Plan. Participants and their Beneficiaries, and all
persons claiming under or through them, shall have recourse only
to the Trust Fund for payment of a benefit under this Plan. The
rights of the Participants, their Beneficiaries, and other
persons are hereby expressly limited and shall be only in
accordance with the provisions of the Plan.
11.13 Notice of Address. Each person entitled to
benefits from the Plan must file with the Administrative
Committee, in writing, his post office address and each change of
post office address. A communication, statement, or notice
addressed to such a person at his latest reported post office
address will be binding upon him for all purposes of the Plan and
neither the Fund Committee nor the Administrative Committee, the
Employer or Trustee shall be obliged to search for, or ascertain
his whereabouts.
ARTICLE 12
Stock Rights and Restrictions
12.1 Voting Rights. Each Participant (or, in the event of
the Participant's death, the Participant's Beneficiary) is, for
purposes of this Section, hereby designated a "named fiduciary"
within the meaning of Section 402(a)(2) of ERISA and shall have
the right to direct the Trustee as to the manner in which shares
of Company Stock allocated to such Participant's Accounts are to
be voted on each matter brought before an annual or special
stockholders' meeting of the Company. Before each such
stockholders' meeting, the Company shall cause to be furnished to
each Participant (or Beneficiary) a copy of the proxy
solicitation material, together with a form requesting
confidential direction on how such shares of Company Stock
allocated to such Participant's Accounts shall be voted on each
such matter. Upon timely receipt of such directions, the Trustee
shall on each such matter vote as directed the number of shares
(including fractional shares) of Company Stock allocated to such
Participant's Accounts, and the Trustee shall have no discretion
in such matter. The instructions received by the Trustee shall
be held by the Trustee in strict confidence and shall not be
divulged or released to any person, including Members, officers
or directors of the Company or any Affiliate; provided, however,
that, to the extent necessary for the operation of the Plan, such
instructions may be relayed by the Trustee to a recordkeeper,
auditor, or other person providing services to the Plan if such
person (a) is not the Company, an Affiliate, or a Member, officer
or director thereof, and (b) agrees not to divulge such
directions to any other person, including Members, officers or
directors of the Company and its Affiliates. Each Participant
(or Beneficiary), as a "named fiduciary" within the meaning of
Section 402(a)(1) of ERISA, shall also direct the vote of a
portion of any shares of Company Stock for which a signed voting
direction instrument is not timely received from the Participants
("Undirected Shares"). Such direction shall be with respect to a
number of Undirected Shares of Company Stock multiplied by a
fraction, the numerator of which is the total number of shares of
Company Stock allocated to each Participant's Accounts for which
the Trustee has received voting instructions and the denominator
of which is the total number of shares of the Company Stock
allocated to the Accounts of all Participants who have given the
Trustee voting instructions with respect to Undirected Shares.
12.2 Rights on Tender or Exchange Offer. Each Participant
(or, in the event of the Participant's death, the Participant's
Beneficiary) is, for purposes of this Section, hereby designated
a "named fiduciary" within the meaning of Section 402(a)(2) of
ERISA and shall have the right in accordance with Section
403(a)(1) of ERISA, to the extent of the number of shares of
Company Stock allocated to such Participant's Accounts, to direct
the Trustee in writing as to the manner in which to respond to a
tender or a tender exchange offer with respect to shares of
Company Stock. The Company shall use its best efforts to timely
distribute or cause to be distributed to each Participant (or
Beneficiary) such information as will be distributed to
stockholders of the Company in connection with any such tender or
exchange offer. Upon timely receipt of such instructions, the
Trustee shall respond as instructed with respect to shares
(including fractional shares) of Company Stock allocated to such
Participant's Accounts. The instructions received by the Trustee
shall be held by the Trustee in strict confidence and shall not
be divulged or released to any person, including officers,
directors or Members of the Company or any Affiliate; provided,
however, that, to the extent necessary for the operation of the
Plan, such instructions may be relayed by the Trustee to a
recordkeeper, auditor, or other person providing services to the
Plan if such person (a) is not the Company, an Affiliate, or any
officer, director or Member thereof and (b) agrees not to divulge
such instructions to any other person, including Members,
officers or directors of the Company and its Affiliates. If the
Trustee shall not receive timely instruction from a Participant
or Beneficiary as to the manner in which to respond to such a
tender or exchange offer, such Participant or Beneficiary shall
be deemed to have timely instructed the Trustee not to tender or
exchange shares of Company Stock and the Trustee shall not tender
or exchange any shares of Company Stock with respect to which
such Participant has the right of direction, and the Trustee
shall have no discretion in such matter.
ARTICLE 13
Financing
13.1 Financing. The Company shall maintain a Trust Fund as
a part of the Plan in order to implement and carry out the
provisions of the Plan and to finance the benefits under the
Plan. Any Trust Agreement shall constitute a part of this Plan,
and all rights which may accrue to any person under this Plan
shall be subject to all the terms and provisions of such Trust
Agreement. The Company may modify any Trust Agreement at any
time to accomplish the purposes of the Plan. The assets of the
Trust Fund shall not be used for or diverted to purposes other
than the exclusive benefit of Participants and Beneficiaries.
13.2 Contributions. The Employers shall make such
contributions to the Trust Fund as are required by the provisions
of the Plan, subject to right of the Company to discontinue the
Plan and the right of an Employer to discontinue participation in
the Plan.
13.3 Nonreversion. Subject to Section 4.6, the Employers
shall have no right, title, or interest in the contributions made
to the Trust Fund under the Plan and no part of the Trust Fund
shall revert to an Employer. However, if an Employer
contribution is made to the Trust Fund by a mistake of fact, then
such contribution may be returned to the Employer within one year
after the payment of the contribution, and if any part or all of
an Employer contribution is disallowed as a deduction under Code
Section 404, then to the extent a contribution is disallowed as a
deduction it may be returned to the Employer within one year
after the disallowance. Each such contribution is expressly
conditioned on its being currently deductible.
ARTICLE 14
Amendment, Termination, or Merger
14.1 Amendment to Conform with Laws and Regulations. The
Company reserves the right at any time to make by amendment any
changes in, additions to, and substitutions for the provisions of
this instrument, to take effect retroactively or otherwise, which
the Company deems necessary or advisable for the purpose of
conforming this Plan and Trust to the requirements and provisions
of the Code and regulations thereunder, or any other present or
future federal or state law or regulation applicable to this Plan
and Trust.
14.2 Other Amendments; Termination. Subject to the
provisions of Section 14.4, the Company also reserves the right
at any time to make by amendment any other changes in, additions
to, and substitutions for the provisions of this instrument which
the Company deems advisable, including, without limiting the
generality of the foregoing, any amendment which shall change the
method of any allocation, change any provision relating to the
distribution of shares in the Trust Fund, change any provision
relating to the administration of this Plan and Trust, increase
or diminish contributions to the Trust Fund, discontinue the
obligation of the Employers to make contributions to the Trust
Fund, or terminate this Plan. Any Employer which has adopted the
Plan in accordance with Article 15 may terminate participation in
the Plan by action of its board of directors with the Company's
consent. Such Employer shall execute and deliver to the Trustees
a copy of the resolution of its board of directors specifying the
date as of which its participation terminated.
14.3 Adoption and Form of Amendment or Termination. Each
amendment (including any termination of this Plan) shall be
adopted by the Fund Committee, pursuant to the authority granted
to it by the Board of Directors. Each other Employer and its
board of directors shall be deemed to have adopted such amendment
on the date of its adoption by the Fund Committee. Such
amendment shall become effective on the effective date stated in
such amendment (or if none, on the date such amendment is adopted
by the Fund Committee).
14.4 Limitations on Power to Amend. Except to the extent
necessary to conform the Plan to laws and regulations as provided
in Section 14.1, no amendment shall operate directly or
indirectly to deprive any Participant of his or her vested
interest in his share in the Trust Fund immediately prior to the
effective date of such amendment. If the Company makes a
permissible amendment to the vesting schedule, each Participant
having at least three years of Vesting Service with the Company
may elect to have the percentage of his nonforfeitable benefit
computed under the Plan without regard to the amendment, unless
the amendment could not disadvantage such Participant. The
Administrative Committee, as soon as practicable, shall forward a
copy of any amendment to the vesting schedule to each affected
Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which Participant may make
an election to remain under the vesting schedule provided under
the Plan prior to the amendment, and notice of the time within
which the Participant must make an election to remain under the
prior vesting schedule. The Participant must file such election
with the Administrative Committee within 60 days of receipt of
such notice.
14.5 Continuance of Powers. From and after any termination
of this Plan, and until the final distribution of the Trust Fund
has been completed, the Trustees and the Administrative Committee
shall continue to have all of the rights, powers, discretions,
duties, privileges, and immunities conferred by this instrument
as shall be necessary or convenient for the orderly termination
of this Plan and distribution of the Trust Fund.
14.6 Merger or Consolidation or Transfer. No merger or
consolidation of the Plan with, or any transfer of assets or
liabilities of the Plan to or from, any other plan shall occur
unless each Participant in the Plan would be entitled to receive
a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) 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 had then terminated).
14.7 Action by Company. Whenever the Company is authorized
to act under the Plan (including, but not limited to, any
delegation of its fiduciary powers and responsibilities under the
Plan), such action shall be taken, unless otherwise provided in
the Plan, by written instrument executed by an officer of the
Company. The Trustee may rely on any instrument so executed as
being validly authorized and as properly evidencing the action of
the Company.
ARTICLE 15
Adoption by Affiliates
15.1 Procedure for Becoming an Employer. Any corporation,
whether or not now in existence, which is or becomes an
Affiliate, may become an Employer pursuant to the Plan and the
Trust Agreement upon compliance with the following procedure:
(a) The Board of Directors of such Affiliate shall adopt a
resolution stating in substance that such Affiliate adopts this
Plan for its Members with respect to a specified group of its
Members as of a specified date.
(b) The Company, by action of its Board of Directors, shall
consent to such Affiliate becoming an Employer pursuant to the
Plan with respect to a specified group of its Members as of such
specified date.
IN WITNESS WHEREOF, the Company has executed this amendment
and restatement of the Plan on December 30, 1998.
HON INDUSTRIES INC.
By /s/ James I. Johnson
James I. Johnson
Vice President, General
Counsel and Secretary
<PAGE>
APPENDIX A
PRIOR PLAN ACCOUNTS
A-1.1 Introduction. Part A-1 of this Appendix A
applies only to the portion of a Participant's Prior Plan
Account, if any, that is attributable to amounts transferred to
the Plan, effective April 1, 1998, from the Heat-N-Glo 401(k)
Profit Sharing Plan, effective January 1, 1984 ("Transferred
Amounts"). All new participation in and contributions to the
Heat-N-Glo 401(k) Profit Sharing Plan ceased as of December 31,
1996.
A-1.2 Separate Accounts. The Transferred Amounts
thereon shall be credited to a separate account under the Plan
called the Heat-N-Glo Matching Contributions Account. The
Transferred Amounts consisting of discretionary employer profit
sharing contributions and earnings thereon shall be credited to a
separate account under the Plan called the Heat-N-Glo Profit
Sharing Contributions Account. Collectively, such Accounts shall
be referred to as the "Prior Plan Accounts" or the "Heat-N-Glo
Accounts".
A-1.3. Vesting. The Heat-N-Glo Accounts are fully vested
and nonforfeitable.
A-1.4 Investments. Except for the portion of any
Heat-N-Glo Account invested in the Mutual Benefit Life Insurance
Company General Account Fund prior to December 31, 1999, the Heat-
N-Glo Accounts shall be invested in the Funds pursuant to Section
7.1.
A-1.5 Distributions.
(a) Notwithstanding any other provision of the Plan,
each Participant shall be entitled to receive a
distribution from his Heat-N-Glo Accounts, if any, in the
form of a lump sum payment in cash as soon as practicable
after a Termination of Employment. In lieu of a lump sum,
such Participant with an Account exceeding $5,000 (or an
Account which exceeded $5,000 at the time of any prior
distribution) may elect to receive a distribution in the
following forms: (1) installment payments (annually,
quarterly or monthly) over a specified period of time, not
exceeding the Participant's life expectancy or the joint
life expectancy of the Participant and the designated
Beneficiary, (2) part lump sum, part installments as
described in Section A-1.5(a)(1), or (3) in the form of an
annuity payable at least annually over the joint life
expectancy of the participant and spouse.
(b) Notwithstanding the provisions of Section A-
1.5(a), if a Participant elects to receive his Heat-N-Glo
Account balance in the form of an annuity, the Heat-N-Glo
Account balance will be paid in the form of a Qualified
Joint and Survivor Annuity, unless the Participant's
spouse consents to the election of a different annuity.
The spouse's election must satisfy the requirements of a
Qualified Election and will be effective only if it is made
following receipt from the Administrator of a notice that
satisfies the requirements of a Qualified Joint and
Survivor Annuity Notice.
(c) Notwithstanding any other provision of the Plan,
no distribution shall be made prior to December 31, 1999,
with respect to any portion of a Participant's Heat-N-Glo
Accounts which are invested in the Mutual Benefit Life
Insurance Company General Account Fund.
A-1.6 Death Benefits.
(a) Pre-Retirement Death Benefit.
(1) In the event of the death of a Participant
who has not, prior to his death, elected payment in
the annuity form, the Participant's Heat-N-Glo Account
shall be paid to his designated Beneficiary, as set
forth in the Plan, except that such designated
Beneficiary may elect payment in any form permitted by
Section A-1.5(a). In the event of the death of a
Participant who has elected payment of his Heat-N-Glo
Accounts in the annuity form and who dies prior to his
Annuity Starting Date, the Participant's spouse will
be entitled to receive a Qualified Survivor Annuity,
commencing as soon as practicable after the
Participant's death.
(2) Distribution of the Participant's Account
shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death except to the extent that an election is made to
receive distributions in accordance with (i) or (ii)
below:
(i) If any portion of the Participant's
interest is payable to a designated Beneficiary,
distributions may be made over the life or over a
period certain not greater than the life
expectancy of the designated Beneficiary
commencing on or before December 31 of the
calendar year immediately following the calendar
year in which the Participant died;
(ii) If the designated Beneficiary is
the Participant's surviving spouse, the date
distributions are required to begin in accordance
with (i) above shall not be earlier than the
later of (A) December 31 of the calendar year
immediately following the calendar year in which
the Participant died and (B) December 31 of the
calendar year in which the Participant would have
attained age 70 1/2.
For purposes of this Section, if the surviving spouse
dies after the Participant, but before payments to such
spouse begin, the provisions of this Section, with the
exception of subsection (ii), shall be applied as if the
surviving spouse were the Participant.
(b) Post-Retirement Death Benefit. In the event of
the death of a retired Participant or a disabled
Participant receiving a benefit, the Participant's Heat-N-
Glo Account will be paid to the Participant's Beneficiary
in accordance with the form of benefit payment elected
under the Plan if such a death benefit is provided by that
form of benefit payment.
A-1.7 Definitions.
(a) "Annuity Starting Date" means (1) the first day
of the first period for which an amount is payable as an
annuity, or (2) in the case of a benefit not payable in the
form of an annuity, the first day on which all events have
occurred that entitle a Participant to such benefit.
(b) "Qualified Election" means a written waiver of a
Qualified Joint and Survivor Annuity or a Qualified
Survivor Annuity. The waiver must be consented to by the
Participant's spouse with such written consent witnessed by
a representative of the Administrator or a notary public.
The spouse's consent must include the designation of a
specific Beneficiary and the form of payment, which cannot
be changed without the consent of the spouse. Such consent
will not be required if the Participant establishes to the
satisfaction of the Administrator that such written consent
may not be obtained because there is no spouse, the spouse
cannot be located or other circumstances that may be
prescribed by the Regulations. Any consent required under
this subsection will be valid only with respect to the
spouse who signs the consent. Additionally, any revocation
of a prior waiver may be made by a Participant without the
consent of the spouse at any time before the Annuity
Starting Date; provided, however, that any waiver of a
Qualified Joint and Survivor Annuity or a Qualified
Survivor Annuity that follows such revocation must be in
writing and must be consented to by the Participant's
spouse. The number of waivers or revocations of such
waivers will not be limited.
(c) "Qualified Joint and Survivor Annuity Notice"
means a written explanation provided to the Participant not
more than 90 days nor less than 30 days before a
Participant's Annuity Starting Date of the following: (1)
the terms and conditions of a Qualified Joint and Survivor
Annuity form of benefit; (2) the Participant's right to
elect, and the effect of a Qualified Election, to waive the
Qualified Joint and Survivor Annuity form of benefit; (3) a
general description of the eligibility conditions and other
material features of the optional forms of benefit and
sufficient additional information to explain the relative
values of the optional forms of benefit available; (4) the
rights of the Participant's spouse; and (5) the right to
make, and the effect of, a revocation of a previous
Qualified Election to waive the Qualified Joint and
Survivor Annuity.
(d) "Qualified Joint and Survivor Annuity" means an
annuity that is purchased from an insurer and that is
payable for the life of the Participant with a survivor
annuity for the life of his spouse in an amount equal to
50% of the amount payable during the joint lives of the
Participant and his spouse. The amount of the Qualified
Joint and Survivor Annuity will be the amount of benefit
that can be purchased from an insurer with the balance of a
Participant's Prior Plan Account.
(e) "Qualified Survivor Annuity" means a monthly
benefit payable to a surviving spouse after a Participant's
death for the remaining life of the spouse. The amount of
the Qualified Survivor Annuity benefit will the amount of
benefit that can be purchased from an insurer with the
balance of a Participant's Prior Plan Account.
A-1.8 In-Service Withdrawals. A Participant who is
employed by the Employer or an Affiliate may elect a distribution
of (a) all or a portion of his Heat-N-Glo Accounts at any time
after attaining age 59-1/2, and (b) a distribution of his Heat-N-
Glo Before Tax Contribution Account in the event of hardship, as
provided in the applicable provisions of the Plan.
A-1.9 Participant Loans. Effective April 1, 1998, a
loan account shall be established under the Plan for each
Participant who maintains an outstanding loan under the Heat-N-
Glo 401(k) Profit Sharing Plan, subject to the following terms:
(a) the Participant shall execute an Assignment of
Note, as provided by the Administrative Committee to permit
the assignment of such outstanding loan note to the Plan as
successor to the Heat-N-Glo 401(k) Profit Sharing Plan; and
(b) the loan shall be administered in accordance with
its terms, the terms of the Plan and the requirements of
the Code.
In no event may a Participant who has elected distribution in the
annuity form receive a loan without the prior written consent of
the Participant's spouse pursuant to a Qualified Election.
APPENDIX B
SERVICE CREDITING
ACQUIRED BUSINESSES
B-1.1 AHC Inc. Each employee of Bevis Custom Furniture,
Inc. ("Bevis") employed by AHC Inc. ("Transferred Bevis
Employee") as of November 13, 1997 incident to AHC Inc.'s
acquisition of certain assets of Bevis shall be credited with
eligibility and vesting service under the Plan for such
employee's period of employment by Bevis. AHC Inc. became a
participating employer in the Plan, effective November 13, 1997.
B-1.2 Allsteel Inc. Each employee of Allsteel Inc.
("Allsteel") employed by the Company ("Allsteel Employee") as of
September 30, 1997, incident to the Company's acquisition of
Allsteel shall be credited with eligibility and vesting service
under the Plan for such employee's period of employment by
Allsteel. Allsteel became a participating employer in the Plan,
effective October 1, 1997.
B-1.3 Aladdin Steel Products, Inc. Each employee of
Aladdin Steel Products, Inc. employed by the Hearth Technologies
("Aladdin Employee") as of February 19, 1998, incident to Hearth
Technology Inc.'s acquisition of certain assets of Aladdin shall
be credited with eligibility and vesting service under the Plan
for such employee's period of employment by Aladdin. Each
Aladdin Employee became a participant in the Plan, effective
April 1, 1998, provided such Aladdin Employee was employed by an
Employer on such date.
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
HON INDUSTRIES Inc.
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement number
333-_____ of our report dated February 1, 1999 included in HON
INDUSTRIES Inc.'s Form 10-K for the year ended January 2, 1999.
ARTHUR ANDERSEN LLP
February 25, 2000
EXHIBIT 24.1
POWER OF ATTORNEY
Know all men by these presents, that each person whose
signature appears below constitutes and appoints Jack D. Michaels,
David C. Stuebe and James I. Johnson, and each of them, his or her
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his
or her name, place and stead, in any and all capacities, to
sign a Registration Statement or Registration Statements on
Form S-8 pursuant to the Securities Act of 1933, as amended,
concerning certain shares of the Common Stock, $1.00 par
value, of HON INDUSTRIES Inc., an Iowa corporation (the
"Company") and related Preferred Share Purchase Rights and
interests offered in connection with the HON INDUSTRIES Inc.
Profit-Sharing Retirement Plan and any and all amendments
(including post-effective amendments) to such Registration
Statement(s) and to file the same with all exhibits thereto,
and other documents in connection therewith, with the
Securities and Exchange Commission or any state regulatory
authority, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be
done, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them
or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple
counterparts, each of which shall be deemed an original and
all of which, when taken together, shall constitute one and
the same document.
IN WITNESS WHEREOF, the undersigned have hereunto
set their hands as of the date set forth below.
Signature Title Date
/s/Jack D. Michaels Chairman, President February 29, 2000
Jack D. Michaels and Chief Executive
Officer (principal
executive officer)
/s/ Melvin L. McMains Vice President and February 29, 2000
Melvin L. McMains Controller
(principal
accounting officer)
/s/ David C. Stuebe Vice President and February 29, 2000
David C. Stuebe Chief Financial
Officer (principal
financial officer)
/s/ Robert W. Cox Director February 29, 2000
Robert W. Cox
/s/ Cheryl A. Francis Director February 29, 2000
Cheryl A. Francis
/s/ W August Hillenbrand Director February 29, 2000
W August Hillenbrand
/s/ Stanley M. Howe Director February 29, 2000
Stanley M. Howe
/s/ Robert L. Katz Director February 29, 2000
Robert L. Katz
/s/ Moe S. Nozari Director February 29, 2000
Moe S. Nozari
/s/ Richard H. Stanley Director February 29, 2000
Richard H. Stanley
/s/ Brian E. Stern Director February 29, 2000
Brian E. Stern
/s/ Lorne R. Waxlax Director February 29, 2000
Lorne R. Waxlax
