SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
JUSTIN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Texas 75-0102185
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2821 W. Seventh Street, Fort Worth, Texas 76107
(Address of Principal Executive Offices) (Zip Code)
JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
(Full Title of the Plan)
Richard J. Savitz
Vice President-Finance
Justin Industries, Inc.
2821 W. Seventh Street
Fort Worth, Texas 76107
(Name and address of agent for service)
(817) 336-5125
(Telephone number, including area code, of agent for service)
____________________
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
maximum maximum
Amount to be offering aggregate Amount of
Title of securities registered price per offering registration
to be registered (1)(2) share (3) price (3) fee (3)
------------------- -------------- ------------ -------------- ------------
Common Stock, par 6,000,000 $15.125 $90,750,000 $31,293.10
value $2.50
------------------- -------------- ------------ -------------- ------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
(2) The shares of Common Stock being registered consist of shares to be
acquired by the plan for the account of participants.
(3) Calculated pursuant to rule 457(c) and (h), based on the average of the
high and low prices for the Common Stock as reported on the NASDAQ National
Market System for March 17, 1994.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents, which are on file with the Securities and Exchange
Commission, are incorporated by reference in this registration statement:
(a) the Registrant's annual report on Form 10-K, dated March 24, 1993, for
the fiscal year ended December 31, 1992;
(b) the Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1993, June 30, 1993, and September 30, 1993;
(c) the description of the Registrant's Common Stock as contained in the
Company's registration statement on Form 10 dated April 24, 1968, as amended by
Amendment No. 1 to Form 10 on Form 8 dated April 27, 1993; and
(d) the description of the Registrant's Common Stock Purchase Rights
contained in the Company's registration statement on Form 8-A dated October 6,
1989, as amended by Amendment No. 1 to Form 8-A dated October 4, 1990.
All documents subsequently filed by the Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective amendment
to the registration statement which indicates that all of the securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be 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 superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this registration statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Legal matters in connection with the Common Stock being offered hereunder
have been passed upon for the Registrant by Kelly, Hart & Hallman, a
professional corporation. Dee J. Kelly, a director of the Company, is a
shareholder and director of such law firm. Mr. Kelly owns 115,665 shares of the
Company's Common Stock of record and beneficially; 88,277 shares are owned by
the Dee Kelly Corporation with respect to which Mr. Kelly disclaims beneficial
ownership of 30% or 26,483 shares by virtue of the equity interest of Mr.
Kelly's three children in this corporation; and 17,900 shares are owned by Kelly
Group Investors (a partnership) of which Mr. Kelly disclaims beneficial
ownership of approximately 58% or 10,341 shares because of the percentage of
this partnership owned by his three children.
Item 6. Indemnification of Directors and Officers.
Article 2.02A(16) of the Texas Business Corporation Act, as amended (the
"TBCA"), empowers the Registrant to indemnify its directors, officers, employees
and agents in a variety of circumstances and to purchase and maintain liability
insurance for those persons, but only to the extent permitted by Article 2.02-1
of the TBCA. Article 2.02-1 of the TBCA, in turn, provides that a corporation
may indemnify any person who was, is or is threatened to be made a party to any
suit or proceeding, whether civil, criminal, administrative, arbitrative or
investigative because the person is or was a director of the Registrant or is or
was serving at its request in the same or another capacity in another
corporation or business association against judgments, penalties, fines,
settlements and reasonable expenses actually incurred if it is determined: (i)
that the person conducted himself in good faith, (ii) that the person reasonably
believed his conduct, with respect to his official capacity, was in the best
interests of the Registrant and (iii) in the case of any criminal proceeding,
that the person had no reasonable cause to believe his conduct was unlawful.
The Registrant's Articles of Incorporation, as amended, contain a provision
that limits directors' liability. The provision eliminates, to the fullest
extent permitted by the TBCA, the Texas Miscellaneous Corporation Laws Act or
other applicable laws, a director's liability to the Registrant or its
shareholders for monetary damages for an act or omission in the director's
capacity as a director. The TBCA provides that this provision may not eliminate
a director's liability to the extent the director is found liable for (i) a
breach of the director's duty or loyalty to the Registrant or its shareholders,
(ii) an act or omission not in good faith that constitutes a breach of duty of
the director to the Registrant or an act or omission that involves intentional
misconduct or a knowing violation of the law, (iii) a transaction from which the
director received an improper benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office or (iv) an act or
omission for which the liability of a director is expressly provided by
applicable statute. The provision of the Articles of Incorporation does not
limit liability of officers or of directors acting in their capacities as
officers.
The Registrant's bylaws provide that the Registrant must indemnify
directors and officers against liabilities incurred in their capacities as such.
These provisions (i) require that such indemnification be provided, making
indemnification mandatory where, under the TBCA, it would otherwise be
discretionary and (ii) require advancement of expenses incurred in defending a
proceeding if the director or officer seeking such advances provides an
undertaking to repay all amounts so advanced if it ultimately is determined that
he is not entitled to be indemnified.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Articles of Incorporation of the Registrant, as amended on April 27,
1993
4.2 By-Laws of the Registrant, as amended (incorporated by reference to
the Registrant's Current Report on Form 8-K dated September 7, 1990)
4.3 Rights Agreement dated as of October 6, 1989 between the Registrant
and Team Bank, N.A., as Rights Agent (incorporated by reference to
the Registrant's Registration Statement on Form 8-A dated October 6,
1989)
4.4 First Amendment to Rights Agreement dated as of October 4, 1990
between the Registrant and Society National Bank, as successor
Rights Agent (incorporated by reference to the Registrant's
Amendment No. 1 on Form 8 to Registration Statement on Form 8-A
dated October 4, 1990)
5 Opinion of Kelly, Hart & Hallman
23.1 Consent of Ernst & Young
23.2 Consent of Kelly, Hart & Hallman (included in their opinion filed as
Exhibit 5)
24 Powers of Attorney (included on the signature page of this
registration statement)
99.1 Justin Industries, Inc. Employee Stock Ownership Plan, Restated as
of January 1, 1989
99.2 Trust Agreement dated as of September 23, 1987 between the
Registrant and Texas Commerce Bank-Fort Worth, as Trustee
In lieu of the opinion of counsel or determination letter contemplated by
Item 601(b)(5) of Regulation S-K, the registrant hereby confirms that it has
submitted the plan being registered and undertakes that it will submit all
amendments thereto to the Internal Revenue Service (IRS) in a timely manner, and
that it has made or will make all changes required by the IRS in order to
qualify such plan under Section 401 of the Internal Revenue Code.
Item 9. Undertakings
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (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;
(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 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 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.
The undersigned Registrant hereby further 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 Section 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.
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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by 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 Securities Act and will be governed by the final
adjudication of such issue.
EXPERTS
The consolidated financial statements and financial statement schedules of
the Company appearing (or incorporated by reference) in the Company's Annual
Report (Form 10-K) for the year ended December 31, 1992, have been audited by
Ernst & Young, independent auditors, as set forth in their reports thereon
included therein (or incorporated by reference) and incorporated herein by
reference. Such financial statements and financial statement schedules are, and
audited financial statements to be included in subsequently filed documents will
be, incorporated herein in reliance upon the reports of Ernst & Young pertaining
to such financial statements (to the extent covered by consents filed with the
Securities and Exchange Commission) given upon the authority of such firm as
experts in accounting and auditing.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Fort Worth, State of Texas, on March 18, 1994.
JUSTIN INDUSTRIES, INC.
By: /S/ JOHN JUSTIN
John Justin
Chairman of the Board and
Chief Executive Officer
March 18, 1994
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby authorizes and appoints John Justin, J. T. Dickenson and Richard J.
Savitz, and each of them, any one of whom may act without the joinder of the
others, as his attorney-in-fact to sign on his behalf individually and in the
capacity stated below all amendments to this registration statement as such
attorney-in-fact may deem necessary or appropriate.
/S/ JOHN JUSTIN /S/ ROBERT E. GLAZE
John Justin Robert E. Glaze
Chairman of the Board and Chief Director, March 18, 1994
Executive Officer
March 18, 1994
/S/ J. T. DICKENSON /S/ DEE J. KELLY
J. T. Dickenson Dee J. Kelly
Director, President and Chief Director, March 18, 1994
Operating Officer
March 18, 1994
/S/ RICHARD J. SAVITZ /S/ JOSEPH R. MUSOLINO
Richard J. Savitz Joseph R. Musolino
Vice President-Finance, Principal Director, March 18, 1994
Financial and Accounting Officer
March 18, 1994
/S/ BAYARD H. FRIEDMAN /S/ JOHN V. ROACH
Bayard H. Friedman John V. Roach
Director, March 18, 1994 Director, March 18, 1994
/S/ MARVIN GEARHART /S/ WILLIAM E. TUCKER
Marvin Gearhart William E. Tucker
Director, March 18, 1994 Director, March 18, 1994
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
plan being registered has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Fort
Worth, State of Texas, on March 18, 1994. The person whose signature appears
below hereby authorizes and appoints John Justin, J. T. Dickenson and Richard J.
Savitz, and each of them, any one of whom may act without the joinder of the
other, as his attorney-in-fact to sign on his behalf individually and in the
capacity stated below all amendments to this registration statement as such
attorney-in-fact may deem necessary or appropriate.
JUSTIN INDUSTRIES, INC. EMPLOYEE
STOCK OWNERSHIP PLAN
By: /S/ JON BENNETT
Jon Bennett, Plan Administrator
JUSTIN INDUSTRIES, INC.
INDEX TO EXHIBITS
Exhibit
No. Description Page
4.1 Articles of Incorporation of the Registrant, as amended on
April 27, 1993
4.2 By-Laws of the Registrant, as amended (incorporated by
reference to the Registrant's Current Report on Form 8-K
dated September 7, 1990)
4.3 Rights Agreement dated as of October 6, 1989 between the
Registrant and Team Bank, N.A., as Rights Agent
(incorporated by reference to the Registrant's registration
statement on Form 8-A dated October 10, 1989)
4.4 First Amendment to Rights Agreement dated as of October 4,
1990 between the Registrant and Society National Bank, as
successor Rights Agent (incorporated by reference to the
Registrant's Amendment No. 1 on Form 8 to Registration
Statement on Form 8-A dated October 4, 1990)
5 Opinion of Kelly, Hart & Hallman
23.1 Consent of Ernst & Young
23.2 Consent of Kelly, Hart & Hallman (included in their opinion
filed as Exhibit 5)
24 Powers of Attorney (included on the signature page of this
registration statement)
99.1 Justin Industries, Inc. Employee Stock Ownership Plan,
Restated as of January 1, 1989
99.2 Trust Agreement dated as of September 23, 1987 between the
Registrant and Texas Commerce Bank-Fort Worth, as Trustee
ARTICLES OF INCORPORATION
OF
JUSTIN INDUSTRIES, INC.
AS AMENDED THROUGH APRIL 27, 1993
SUMMARY OF CONTENTS
Page Article
---- --------------------------------------
1 One: Name of the Corporation
1 Two: Purposes
3 Three: Principal Office
4 Four: Period of Duration
4 Five: Number of Directors
4 Six: Stock
11 Seven: Shareholders' Rights
11 Eight: Address; Registered Agent
11 Nine: Liability of Directors
================================================================================
ARTICLES OF INCORPORATION
OF
JUSTIN INDUSTRIES, INC.
AS AMENDED THROUGH APRIL 27, 1993
ARTICLE ONE
The name of the corporation is JUSTIN INDUSTRIES, INC.
(September 29, 1972)
ARTICLE TWO
The purposes for which the corporation is organized are:
1. HOLDING COMPANY. The general nature of the business of said corporation
shall be to buy or otherwise acquire, own, hold, manage, and control
personal property of every description, including its own stock and stock
in any other corporations, and to sell and convey, mortgage, pledge, lease
or otherwise dispose of such property or any part thereof.
2. MANUFACTURE AND MERCANTILE. To manufacture, distribute, buy, sell, deal in
and with goods, wares and merchandise, and personal property of every kind
and description, and to contract with others for their manufacture or
distribution.
3. CONSTRUCTION. To conduct and carry on the business of general contractors
and builders; to design, plan, erect, construct, equip, alter, rebuild,
remodel, improve and repair all kinds of houses, buildings and other
structures or parts thereof and works and excavations therefor; to employ
mechanics, laborers, artisans and workmen, and to make contracts and
subcontracts for work and materials; to manufacture, buy, sell and deal in
the materials necessary in connection with the business of the corporation;
to own, manage, operate, lease, purchase and sell buildings and generally
to transact all business of a similar nature necessary or incidental to the
purposes aforesaid, and to do all things necessary or incidental thereto or
connected with the business of contractors and builders.
4. REAL ESTATE DEVELOPMENT. Subject to the provisions of Part Four of the
Texas Miscellaneous Corporation Laws Act, to engage in and carry on the
business of buying, leasing and otherwise acquiring lands and interests in
lands of every kind and description and wheresoever situated, buying,
leasing and otherwise acquiring and constructing and erecting, or
contracting for the construction and erection of buildings and structures
in and on such lands for any uses or purposes; holding, owning, improving,
developing, maintaining, operating, letting, leasing, mortgaging, selling
or otherwise disposing of such property or any part thereof; equipping,
furnishing, and operating apartments, apartment houses, hotels, apartment
hotels, restaurants, office buildings, shopping centers, warehouses, or any
other buildings or structures of whatsoever kind.
5. INVENTIONS, ETC. To acquire by purchase, assignment, grant, license or
otherwise, to apply for, secure, lease or in any manner obtain, to develop,
hold, own, use, exploit, operate, enjoy and introduce, to sell, assign,
lease, mortgage, pledge, grant licenses and rights of all kinds in respect
of, or otherwise dispose of, and generally to deal in and with and turn to
account for any or all purposes, either for itself or as nominee or agent
for others:
(1) Any and all inventions, devices, processes, discoveries and formulae,
and improvements and modifications thereof and rights and interests
therein;
(2) Any and all letters patent or applications for letters patent of the
United States of America or of any other country, state, locality or
authority, and any and all rights, interests and privileges connected
therewith or incidental or appertaining thereto;
(3) Any and all copyrights granted by the United States of America or any
other country, state, locality or authority, and any and all rights,
interests and privileges connected therewith or incidental or
appertaining thereto; and
(4) Any and all trade-marks, trade names, trade symbols, labels, designs
and other indications or origin and ownership granted by or recognized
under the laws of the United States of America or any other country,
state, locality or authority, and any and all rights, interests and
privileges connected therewith or incidental or appertaining thereto.
To manufacture, purchase, sell and generally trade and deal in and with any
article, product or commodity produced as the result of or through the use
of any such inventions, devices, processes, discoveries, formulae and
improvements and modifications thereof, or the like, or any articles,
products, commodities, supplies and materials used or suitable to be used
in connection therewith or in any manner applicable or incidental thereto;
to grant licenses, sub-licenses, rights, interests and privileges in
respect of any of the foregoing, and to supervise or otherwise exercise
such control over its licensees or grantees and the business conducted by
them, as may be agreed upon in its contracts or agreements with such
licensees or grantees for the protection of its rights and interest
therein, and to secure to it the payment of agreed royalties or other
considerations.
(September 6, 1968)
ARTICLE THREE
Its principal office shall be at Fort Worth, Tarrant County, Texas.
(September 6, 1968)
ARTICLE FOUR
The period of its duration is perpetual.
(September 6, 1968)
ARTICLE FIVE
The number of its directors shall not be less than three (3), the exact number
to be fixed from time to time by its Bylaws. Cumulative voting of stock in an
election of directors is expressly prohibited.
(September 6, 1968)
ARTICLE SIX
The aggregate number of shares which the corporation shall have authority to
issue is One Hundred Million (100,000,000) shares of Common Stock of the par
value of $2.50 per share (hereinafter sometimes called the "Common Stock"), and
One Million (1,000,000) shares of voting Preferred Stock of the par value of
$2.50 per share (hereinafter sometimes called "Preferred Stock").
(April 27, 1993)
At such time as this amendment becomes effective in accordance with the
applicable provisions of the Texas Business Corporation Act (such date and time
being hereinafter called the "effective date"), the shares of Common Stock, par
value $5.00, then issued and outstanding or held in treasury of the corporation
shall be converted, without any action on the part of the holders thereof, into
fully paid and non-assessable shares of Common Stock, par value $2.50, on the
basis of two shares of Common Stock, par value $2.50, for each one share of
Common Stock, par value of $5.00. Except as provided herein, the aforesaid
change shall not affect the preferences, rights or privileges of issued and
outstanding shares of Common Stock. Certificates representing outstanding
shares of Common Stock, par value $5.00, shall be deemed to represent, from and
after the effective date, the number of shares of Common Stock, par value $2.50,
into which the shares of Common Stock, par value $5.00, theretofore represented
by such certificates, shall have been converted, as aforesaid. As promptly as
practicable after the effective date, the Company shall issue and deliver to
each holder of a certificate or certificates theretofore representing Common
Stock, par value $5.00, a certificate or certificates for the number of shares
of Common Stock, par value $2.50, to which such shareholder may be entitled
pursuant to the foregoing, upon surrender of such certificate or certificates
for Common Stock, par value $5.00. Certificates representing outstanding shares
of Series One Preferred Stock, par value $5.00, shall be deemed, from and after
the effective date, to represent the same number of shares of Series One
Preferred Stock, par value $2.50.
The preferences, limitations, and relative rights in respect of the shares of
each class of the corporation's capital stock, and the authority vested in the
Board of Directors to divide the Preferred Stock into series and to fix and
determine the relative rights and preferences of the shares of any series so
established are as follows:
PART A
PREFERRED STOCK
1. ISSUANCE OF PREFERRED STOCK IN SERIES. The shares of Preferred Stock
may be divided into and issued in series, and each series shall be so
designated as to distinguish the shares thereof from the shares of all
other series. All shares of Preferred Stock shall be of equal rank
and identical except to the extent that variations in the relative
rights and preferences enumerated in subparagraphs (a) through (g)
inclusive of this paragraph 1 may be fixed and determined from time to
time, by the Board of Directors between series hereafter established;
and each share of a series shall be identical in all respects with all
other shares of such series, except that shares of any one series
issued at different times may differ as to the dates from which
dividends thereon shall be payable and cumulative. Shares of any
series which have been retired or canceled in any manner, including
shares redeemed or treasury shares retired and shares which have been
converted into Common Stock or exchanged for shares of Preferred Stock
of any other series, shall have the status of authorized but unissued
shares.
Authority is expressly granted to the Board of Directors, within the
limitations and restrictions stated herein, to divide the shares of
Preferred Stock into one or more series, and with respect to each
series, to fix and determine by resolution or resolutions providing
for the issue of such series the following relative rights and
preferences as to which there may be variations between the series so
established:
(a) the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be
increased (except where otherwise provided by the Board of
Directors in creating such series) or decreased (but not below
the number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(b) the rate of dividends payable on shares of such series, the
conditions upon which and the dates when such dividends shall be
payable;
(c) the price or prices at, and the terms and conditions on, which
shares of such series may be redeemed;
(d) the amount payable on shares of such series in the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the corporation;
(e) the terms and conditions and the date or dates on which the
shares of such series, if convertible, may be converted into
shares of Common Stock;
(f) subject to the limitations contained in Article 2.12B(5) of the
Texas Business Corporation Act, the rights, if any, of the
holders of shares of such series to convert such shares into, or
exchange shares for, shares of any other series of Preferred
Stock, and the terms and conditions of such conversion or
exchange; and
(g) whether or not the shares of such series shall be subject to the
operation of a retirement or sinking fund, and, if so, the manner
in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for
retirement and the terms and provisions relative to the operation
thereof.
2. PREFERENCE AS TO DIVIDENDS. The holders of Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors,
but only out of funds legally available for the payment of dividends,
cumulative cash dividends at the annual rate for each particular
series theretofore fixed by the Board of Directors as hereinbefore
authorized, and no more, payable quarter-yearly on the dates fixed
therefor by the Board of Directors, to shareholders of record on the
respective dates, not exceeding fifty (50) days preceding such
dividend payment dates, fixed for the purpose by the Board of
Directors in advance of payment of each particular dividend. Such
dividends shall accrue on each such share of Preferred Stock from the
date of its original issuance. Such dividends shall be cumulative so
that if such dividends in respect of any previous dividend period (at
the rate or rates fixed by the Board of Directors as herein provided)
shall not have been paid on or declared and set apart for all
Preferred Stock at the time outstanding, the deficiency shall be fully
paid on or declared and set apart for such Preferred Stock before any
dividend shall be paid on or declared or set apart for the Common
Stock. Accumulated dividends shall not bear interest. No dividends
shall be declared on any series of Preferred Stock in respect of any
quarter-year dividend period unless there shall likewise be or have
been declared on all shares of Preferred Stock of each series at the
time outstanding like dividends in proportion to the respective
aggregate dividends payable per annum on each series computed on the
basis of the number of shares outstanding in, and the dividend rate
of, each series.
3. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of
any liquidation, dissolution or winding up of the corporation, before
any payment or distribution of the assets of the corporation (whether
capital or surplus) shall be made to or set apart for the holders of
Common Stock, the holders of the shares of each series of Preferred
Stock shall be entitled to receive payment at the rate fixed in the
resolution or resolutions adopted by the Board of Directors providing
for the issue of such series, plus an amount equal to all dividends
(whether or not earned or declared) accumulated to the date of final
distribution to such holders, and, in addition thereto, if such
liquidation, dissolution or winding up be voluntary, the amount of the
premium, if any, payable upon such liquidation, dissolution or winding
up as fixed for the shares of the respective series; but they shall be
entitled to no further payment. If, upon any liquidation, dissolution
or winding up of the corporation, the assets of the corporation, or
proceeds thereof, distributable among the holders of the shares of
Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof, shall be
distributed among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all
amounts payable thereon were paid in full. For the purposes of this
paragraph 3, neither the merger or consolidation of the corporation
into or with any other corporation, nor the voluntary sale,
conveyance, exchange or transfer (for cash, shares of stock,
securities, or other consideration) of all or substantially all the
property or assets of the corporation, shall be deemed a liquidation
of the corporation.
4. REDEMPTION OF PREFERRED STOCK. The corporation, at the option of the
Board of Directors, may redeem the Preferred Stock of any series at
the time outstanding at the times, in the amounts, in the manner and
at the price or prices fixed in the resolution or resolutions adopted
by the Board of Directors providing for the issue of such series, plus
in every case an amount equal to all accumulated dividends with
respect to each share so to be redeemed and, in addition thereto, the
amount of the premium, if any, payable upon such redemption fixed in
said resolution or resolutions of the Board of Directors. In case of
the redemption of a part only of any series of Preferred Stock at the
time outstanding, the shares of such series so to be redeemed shall be
selected by lot or in such other manner as the Board of Directors may
determine. The Board of Directors shall have full power and authority
to prescribe the terms and conditions upon which the Preferred Stock
shall be redeemed from time to time; provided, however, that if the
corporation is in default with respect to any dividend payable on or
any sinking or purchase fund requirement relating to shares of
Preferred Stock, it shall not redeem any shares of Preferred Stock
except pro rata pursuant to offers of sale made by holders of the
Preferred Stock in response to an invitation for tenders given
simultaneously by the corporation by mail to the holders of record of
all shares of the Preferred Stock then outstanding.
5. CONVERSION. The shares of Preferred Stock of each series shall be
convertible into or exchangeable for shares of Common Stock or shares
of any other series of Preferred Stock, upon such terms and
conditions, as may be fixed and determined by the Board of Directors
in any resolution providing for the issuance of such series of
Preferred Stock. The corporation shall make no payment or adjustment
on account of any dividends accrued on the shares of Preferred Stock
of any series surrendered for conversion or exchange except that all
dividends accrued and unpaid on such shares up to the dividend payment
date immediately preceding such surrender for conversion shall
constitute a debt of the corporation payable without interest to the
converting shareholder, and no dividend shall be declared or paid in
respect of shares of Common Stock until such debt shall be fully paid
or sufficient funds set apart for the payment thereof.
PART B
COMMON STOCK
1. JUNIOR TO PREFERRED STOCK. The Common Stock is junior to the
Preferred Stock and is subject to all rights, privileges, preferences
and priorities of the Preferred Stock as herein set forth or as may be
stated in any resolution or resolutions of the Board of Directors
providing for the issue of a series of Preferred Stock.
2. DIVIDENDS. Subject to the prior and superior rights of the Preferred
Stock and subject to the provisions and on the conditions set forth in
Part A hereof, or in any resolution or resolutions providing for the
issue of a series of Preferred Stock, such dividends (payable in cash,
stock, or otherwise) as may be determined by the Board of Directors,
may be declared and paid on the Common Stock from time to time out of
any funds legally available therefor.
3. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of any
liquidation, dissolution or winding up of the affairs of the
corporation, after payment to the holders of Preferred Stock of the
amounts to which they are entitled pursuant to the resolution or
resolutions of the Board of Directors providing for the issue of a
series or Preferred Stock, the holders of Common Stock shall be
entitled to share ratably in all assets then remaining subject to
distribution to the shareholders.
PART C
VOTING RIGHTS APPLICABLE TO
PREFERRED STOCK AND COMMON STOCK
1. VOTING RIGHTS. In the exercise of voting powers, each holder of a
share of Preferred Stock and each holder of a share of Common Stock
shall be entitled to one vote for each of the shares held by him on
record on the books of the corporation at the time for determining
holders thereof entitled to vote. The holders of Common Stock shall
vote together, share for share, with the holders of Preferred Stock as
one class except as to those matters which by express statutory
provision are required to be determined by class voting.
2. DENIAL OF CUMULATIVE VOTING. As provided in Article Five hereof, no
shareholder of the corporation shall have the right to cumulate his
votes for the election of directors.
(October 16, 1972)
ARTICLE SEVEN
Shareholders shall not have the pre-emptive right to subscribe for, purchase or
acquire additional or treasury shares of the corporation, whether now or
hereafter authorized, except such rights, if any, as the Board of Directors in
its discretion may grant from time to time, and at such price and terms as the
Board of Directors in its discretion may fix; and this denial shall be set forth
at length or in summary form on the face or back of each stock certificate
hereafter issued whether in connection with an original issue, a transfer of
shares, or otherwise; and the Board of Directors may sell treasury stock and
authorize the sale and issuance of authorized unissued stock, or any notes,
debentures, bonds or other securities convertible into or carrying options or
warrants to purchase such available shares of stock, at such price and under
such terms as the Board of Directors may from time to time fix, without the
necessity of offering such shares or securities, either in whole or in part, to
existing stockholders.
(September 6, 1968)
ARTICLE EIGHT
The post office address of its present registered office is 2821 West 7th
Street, P. 0. Box 425, Fort Worth, Texas and the name of its initial registered
agent at such address is Richard J. Savitz.
(March 20, 1987)
ARTICLE NINE
A Director of the corporation shall not be liable to the corporation or its
Shareholders for monetary damages for an act or omission in the Director's
capacity as a Director, except with respect to liability for:
1. a breach of the Director's duty of loyalty to the corporation or its
Shareholders;
2. an act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law;
3. a transaction from which the Director received an improper benefit, whether
or not the benefit resulted from an action taken within the scope of the
Director's office;
4. an act or omission for which the liability of a Director is expressly
provided for by statute; or
5. an act related to an unlawful stock repurchase or payment of a dividend.
If the Texas Business Corporation Act, the Texas Miscellaneous Corporation Laws
Act or any other similar statute is amended after approval by the Shareholders
of this provision to authorize corporate action further eliminating or limiting
the personal liability of Directors, then the liability of a Director of the
corporation shall be eliminated or limited to the fullest extent permitted by
such statutes, as so amended.
(March 18, 1988)
KELLY, HART & HALLMAN
(A PROFESSIONAL CORPORATION)
ATTORNEYS AT LAW
201 MAIN STREET, SUITE 2500
FORT WORTH, TEXAS 76102
TELEPHONE (817) 332-2500 301 CONGRESS, SUITE 2000
TELECOPY (817) 870-0371 AUSTIN, TEXAS 78701
WRITER'S DIRECT DIAL NUMBER TELEPHONE (512)495-6400
TELECOPY (512)495-6401
March 22,1994
Justin Industries, Inc.
2821 West Seventh Street
Fort Worth, Texas 76101
Re: Registration Statement on Form S-8
Justin Industries, Inc. Employee Stock Ownership Plan
Gentlemen:
The opinion set forth below is given pursuant to Item 601(b)(5) of
Regulation S-K for inclusion as Exhibit 5 to the Registration Statement on Form
S-8 of Justin Industries, Inc., a Texas corporation (the "Company"), pertaining
to the offering of 6,000,000 shares of common stock, par value $2.50 per share,
of the Company (the "Shares") in connection with the Company's Employee Stock
Ownership Plan (the "Plan").
We have examined such matters of law and such certificates, documents and
records of public officials and of officers of the Company as we have deemed
necessary for the purposes of rendering this opinion.
In rendering this opinion, we have made the following assumptions: (i) all
documents submitted to or reviewed by us are accurate and complete and if not
originals are true and correct copies of the originals; (ii) the signatures on
each of such documents by the parties thereto are genuine; (iii) each individual
who signed the documents had the legal capacity of do so; and (iv) all persons
who signed such documents on behalf of a corporation were duly authorized to do
so.
Based upon and subject to the foregoing, and the other limitations and
qualifications set forth herein, we are of the opinion that:
1. The Plan has been duly authorized by the Company, and the
interests to be acquired by the participants under the Plan, when issued in
accordance with the terms of the Plan and the resolutions authorizing the
issuance of such shares, will be duly and validly created.
2. Under the terms of the Plan, the Company's Shares may be
acquired by the trustee under the Plan (the "Trustee") either through
contributions from the Company or through purchase. Any Shares newly
issued by the Company to the Trustee pursuant to the Plan, when duly
authorized and issued in accordance with the terms of the Plan and the
resolutions authorizing the issuance of such shares, will be validly
issued, fully paid and non-assessable.
This opinion is further limited and qualified in all respects as follows:
The law covered by the opinions expressed herein is limited to the law of
the State of Texas. We express no opinion as to the applicability of the laws
of any other particular jurisdiction to the transactions described in this
opinion.
This opinion is limited to the specific opinions stated herein, and no
other opinion is implied or may be inferred beyond the specific opinions
expressly stated herein.
This opinion is intended solely for your benefit. It is not to be quoted
in whole or in part, disclosed, made available to or relied upon by any other
person, firm or entity without our express prior written consent.
This opinion is based on our knowledge of the law and facts as of the date
hereof. We assume no duty to update or supplement this opinion to reflect any
facts or circumstances that may hereafter come to our attention or to reflect
any changes in any law that may hereafter occur or become effective.
We hereby consent to the use of this opinion in the above referenced
Registration Statement. In giving such consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Respectfully submitted,
/S/ KELLY, HART & HALLMAN
KELLY, HART & HALLMAN
(a professional corporation)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-8 pertaining to the Justin Industries, Inc.
Employee Stock Ownership Plan and to the incorporation by reference therein of
our reports (a) dated January 28, 1993, with respect to the consolidated
financial statements of Justin Industries, Inc. incorporated by reference in its
Annual Report (Form 10-K) and the related financial statement schedules included
therein, and (b) dated February 26, 1993, with respect to the financial
statements of the Justin Industries, Inc. Employee Stock Ownership Plan included
as Exhibit 28 to the Annual Report (Form 10-K), both for the year ended December
31, 1992, filed with the Securities and Exchange Commission.
/S/ ERNST & YOUNG
Fort Worth, Texas
March 21, 1994
113093
JUSTIN INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(As Restated January 1, 1989)
Effective: January 1, 1989
Justin Industries, Inc.
Employee Stock Ownership Plan
(As Restated January 1, 1989)
TABLE OF CONTENTS
Page No.
--------
PREAMBLE
ARTICLE I Purpose And Definitions I-1
1.1 - Purpose I-1
1.2 - Definitions I-1
1.3 - Construction I-5
ARTICLE II Service Credit II-1
2.1 - Hour Of Service II-1
2.2 - Participation Service II-3
2.3 - Break In Service II-3
2.4 - Loss Of Service II-3
ARTICLE III Participation Requirements III-1
3.1 - Participation Originating Under
The Previous Plan III-1
3.2 - Participation Originating Under This Plan III-1
3.3 - Cessation Of Participation And Reentry III-1
3.4 - Participation Of Employees Of New Employers III-2
ARTICLE IV Contributions and ESOP Loans IV-1
4.1 - ESOP Employer Contributions
and ESOP Loans IV-1
4.2 - Member (Pre-Tax) Salary Deferral
Contributions IV-2
4.3 - Discontinuance of Member
(After-Tax) Contributions IV-3
4.4 - Seven Thousand Dollar ($7,000) Test IV-3
4.5 - Deferral And Contribution Percentage Tests IV-3
ARTICLE V Maintenance Of Individual Accounts V-1
5.1 - Establishment Of Individual Accounts V-1
5.2 - Allocation Of Contributions V-1
5.3 - Allocation Of Gains and Losses V-2
5.4 - Notification To Members V-3
ARTICLE VI Retirement or Earlier Termination of Employment VI-1
6.1 - Benefit VI-1
ARTICLE VII Death VII-1
7.1 - Designation Of Beneficiary VII-1
7.2 - Benefit VII-1
7.3 - No Beneficiary VII-2
ARTICLE VIII Code Section 415 Limits VIII-1
8.1 - Limit On Annual Additions Under
Code Section 415 VIII-1
ARTICLE IX Voting Employer Stock and Dividends on Employer Stock IX-1
9.1 - Voting Employer Stock IX-1
9.2 - Actions Relating to a Tender Offer IX-1
9.3 - No Pass-Through Of Cash Dividends
On Employer Stock IX-2
ARTICLE X In-Service Withdrawals X-1
10.1 - Withdrawals X-1
ARTICLE XI Time And Methods Of Payment XI-1
11.1 - Time of Payment XI-1
11.2 - Method Of Payment XI-1
11.3 - Balance of $3,500 or Less XI-2
11.4 - Limitations of Payment XI-3
11.5 - Minority Or Incompetency XI-3
11.6 - Put Options XI-3
11.7 - Continued Application XI-4
ARTICLE XII Top-Heavy Restrictions XII-1
12.1 - Top-Heavy Restrictions XII-1
ARTICLE XIII Administration XIII-1
13.1 - Appointment Of Committee XIII-1
13.2 - Committee Powers And Duties XIII-1
13.3 - Claims Procedure XIII-3
13.4 - Committee Procedures XIII-4
13.5 - Authorization Of Benefit Payments XIII-4
13.6 - Payment Of Expenses XIII-4
13.7 - Unclaimed Benefits XIII-4
13.8 - Indemnity XIII-5
ARTICLE XIV Trust Fund XIV-1
14.1 - Establishment Of Trust Fund XIV-1
14.2 - Payment Of Contributions To Trust Fund XIV-1
14.3 - Bonding Of Trustee XIV-1
ARTICLE XV Adoption And Withdrawal By Other Organizations XV-1
15.1 - Procedure For Adoption XV-1
15.2 - Withdrawal XV-2
ARTICLE XVI Amendments XVI-1
16.1 - Right To Amend XVI-1
ARTICLE XVII Withdrawal And Termination XVII-1
17.1 - Employer Withdrawal XVII-1
17.2 - Transfers Of Plan Assets And Plan Mergers XVII-1
17.3 - Plan Termination XVII-2
17.4 - Distribution On Termination XVII-2
ARTICLE XVIII General Provisions XVIII-1
18.1 - Nonguarantee Of Employment XVIII-1
18.2 - Manner Of Payment XVIII-1
18.3 - Nonalienation Of Benefits XVIII-1
18.4 - Amounts Returnable To An Employer XVIII-2
18.5 - Governing Law XVIII-2
PREAMBLE
WHEREAS, effective January 1, 1978, Justin Industries, Inc. organized and
existing under the laws of State of Texas, established the Employee Stock
Ownership Plan for its eligible Employees (hereinafter referred to as the
"Previous Plan") which was restated January 1, 1985 and amended thereafter; and
WHEREAS, said organization now desires to amend and continue the Previous
Plan by a separate restatement in its entirety and the right to so amend is
reserved to said organization under the provisions of the Previous Plan;
NOW, THEREFORE, the Previous Plan is hereby restated, and amended in its
entirety, superseded and replaced by this separate restated Plan.
There will be no termination and no gap or lapse in time or effect between
such Plans, and the existence of a qualified Plan shall be continuous and
uninterrupted.
This restated Plan is conditioned upon its qualification under Sections
401(a), 401(k), 401(m) and 4975(e)(7) of the Internal Revenue Code of 1986, as
amended from time to time, with employer contributions being deductible under
Section 404 of said Code or any other applicable sections thereof, as amended
from time to time.
The terms and conditions of this restated Plan are as follows:
ARTICLE I
PURPOSE AND DEFINITIONS
1.1 PURPOSE: The purpose of this Plan is to give Employees capital
ownership in the Corporation (in the form of Employer Stock) and to encourage
Employees to save and invest, systematically, a portion of their current
Compensation in order that they may have a source of additional income upon
their retirement, or for their family in the event of death. The benefits
provided by this Plan will be paid from the Trust Fund and will be in addition
to the benefits Employees are entitled to receive under any other programs of
the Employer.
This Plan and the separate related Trust forming a part hereof are
established and shall be maintained for the exclusive benefit of the eligible
Employees of the Employer and their Beneficiaries. No part of the Trust Fund
can ever revert to the Employer or be used for or diverted to any other purpose
other than for the exclusive benefit of the Employees of the Employer and their
Beneficiaries, except as provided in Section 18.4 hereof.
1.2 DEFINITIONS: Where the following words and phrases appear in this
Plan, they shall have the respective meanings set forth below, unless the
context clearly indicates otherwise:
(a) AFFILIATED EMPLOYER: Any business entity (including an
Employer hereunder) that, together with an Employer hereunder,
constitutes a controlled group of corporations, a group of trades
or businesses under common control, or an affiliated service group,
all as defined in Code Section 414 (subject, however, to the
provisions of Code Section 415(h) when applying the benefit
limitations of Code Section 415).
(b) ALLOCATION DATE: The date as of which contributions
are allocated hereunder, which shall be
(1) the last day of December as to ESOP
Employer Contributions, and
(2) as soon as practicable after the end of
each payroll period as to Salary Deferral
Contributions.
The Committee may use more frequent Allocation Dates if it
so desires.
(c) BENEFICIARY: A person designated by a Member to
receive benefits hereunder upon the death of such Member.
(d) CODE: The Internal Revenue Code of 1986, as amended
from time to time.
(e) COMMITTEE: The persons appointed to administer the
Plan in accordance with Article XIII hereof.
(f) COMPENSATION: Base Pay plus piece-rate earnings,
overtime, bonuses, and 75% of commissions paid to an Employee
during a Plan Year by the Employer (or predecessor company) for
personal services. Compensation will be determined by excluding,
after December 31, 1988, any amount in excess of the dollar limit
allowed under Code Section 401(a)(17)).
If during a year any Employee ("family member") is the
spouse or lineal descendant, below age 19, of another Employee
("HCE") who either is a five percent (5%) owner (as defined in Code
Section 416(i) or is a highly compensated employee (as defined in
Code Section 414(q) in the group consisting of the ten (10) such
highly compensated employees with the greatest compensation during
such year, then, for purposes of the above dollar limitation, such
"family member's" compensation for such year will be aggregated
with such "HCE's" compensation for such year. The dollar limit
applicable to each such Employee's compensation for such year will
be the dollar limit applicable for such year multiplied by a
fraction, the numerator of which is such Employee's unlimited
compensation for such year and the denominator of which is the sum
of the unlimited compensation for such year for all Employees with
whom such Employee is a family member, as defined above.
For purposes of determining an Employee's compensation, any
election by such Employee to reduce his regular cash remuneration
under Code Section 125 or 401(k) shall be treated as if the
Employee did not make such election.
(g) CONTRIBUTIONS: Amounts contributed hereunder on and
after January 1, 1989 for allocation to Members as follows:
(1) ESOP EMPLOYER CONTRIBUTIONS: The
contributions made by the Employer, under Section
4.1 hereof, which are determined at the discretion
of the Employer.
(2) SALARY DEFERRAL CONTRIBUTIONS: The pre-tax
contributions made under Section 4.2 hereof through
salary deferral pursuant to Code Section 401(k).
(3) EMPLOYEE CONTRIBUTIONS: The after-tax
contributions made by Members prior to January 1,
1988, under the Previous Plan.
(h) CORPORATION: Justin Industries, Inc., a corporation
organized and existing under the laws of the State of Texas or its
successor or successors.
(i) COVERED EMPLOYMENT: The employment category for which
the Plan is maintained, which includes any employment with the
Employer, excluding:
(1) Persons who are employed as sales representatives of
Justin Boot Company, division of Footwear Management
Company, Inc. who are compensated solely on the basis of
sales commissions and who were first employed on or
after November 1, 1992.
(2) Persons who are employed by Tony Lama
Company, a division of Footwear Management
Company, Inc.
(3) Employment as a "leased employee" (as such term is
defined within the definition of Employee below).
(4) Employment covered by a collective bargaining agreement
unless such agreement provides for participation in this
Plan.
(j) DISABILITY: A physical or mental condition which, in
the judgment of the Committee, totally and presumably permanently
prevents an Employee from engaging in any gainful employment,
provided that a finding of Disability shall not be made unless the
Employee has been determined eligible to receive a disability
benefit under the Federal Social Security Act as amended.
(k) EFFECTIVE DATE: January 1, 1989, except as otherwise
provided herein. Any provision hereunder effective prior to
January 1, 1989 will be applicable under the Previous Plan.
(l) EMPLOYEE: Any person who, on or after the Effective
Date, is receiving remuneration for personal services rendered as a
common law employee of the Employer or Affiliated Employer, or
would be receiving such remuneration except for an authorized
absence. A "leased employee" will also be deemed an Employee. A
"leased employee" is any leased employee within the meaning of Code
Section 414(n)(2), except that if such leased employees constitute
less than twenty percent (20%) of the Employer's nonhighly
compensated workforce within the meaning of Code Section
414(n)(5)(C)(ii), then the term "Employee" will not include those
leased employees covered by a plan described in Code Section
414(n)(5) unless otherwise provided by the terms of such plan (or
this Plan).
(m) EMPLOYER: The Corporation and any other organization
which adopts the Plan in accordance with Article XV hereof.
(n) EMPLOYER STOCK: Common stock of the Corporation, with
$2.50 par value.
(o) ERISA: The Employee Retirement Income Security Act of
1974, as amended from time to time.
(p) INDIVIDUAL ACCOUNT: Each of the accounts maintained by
the Committee showing the individual interests in the Trust Fund of
each Member, former Member, and Beneficiary, as described in
Section 5.1 hereof. If so provided for in a qualified domestic
relations order (as defined in Code Section 414(p)), an account
will be maintained for an alternate payee representing such
alternate payee's interest hereunder.
(q) LEAVE OF ABSENCE: Any absence from service authorized
by an Employer under such Employer's standard personnel practices
for reasons other than termination of employment, death, discharge
or Retirement, provided that all persons under similar
circumstances must be treated alike in the granting of such Leaves
of Absence, and provided further that the Employee returns, or is
physically unable to return as determined by the Employer, or
retires within the period specified in the authorized Leave of
Absence.
(r) LIMITATION YEAR: The year used in applying Code
Section 415, which year is the calendar year. Notwithstanding the
Effective Date hereof, such limitations, as set forth in Section
8.1 hereof, apply beginning with the first Limitation Year
beginning after 1986.
(s) MEMBER: An Employee who has met the eligibility
requirements for participation set forth in Article III hereof.
(t) PLAN: Justin Industries, Inc. Employee Stock Ownership
Plan (As Restated January 1, 1989), the Plan set forth herein as
amended from time to time.
(u) PLAN ADMINISTRATOR: The Committee.
(v) PLAN YEAR: Each annual period beginning on January 1st
and ending on December 31st.
(w) PREVIOUS PLAN: Justin Industries, Inc. Employee Stock
Ownership Plan (As Restated Effective January 1, 1985) and any
predecessor thereto, in force and effect for the period prior to
the Effective Date, the Plan hereby being amended and restated.
Any reference herein to the Previous Plan as of a certain date or
for a certain period shall be deemed a reference to the Previous
Plan as then in effect.
(x) RETIREMENT (OR RETIRED): Termination of employment
with all Affiliated Employers after a Member has reached his normal
retirement age or early retirement age under a qualified defined
benefit pension plan of the Employer. Such retirement shall be
considered as commencing on the day immediately following a
Member's last day of employment (or authorized Leave of Absence, if
later).
(y) SERVICE: A period or periods of employment of an
Employee as described in Article II hereof.
(z) TRUST AGREEMENT: Justin Industries, Inc. Employee
Stock Ownership Trust.
(aa) TRUST OR TRUST FUND: The fund maintained in
accordance with the terms of the Trust Agreement.
(bb) TRUSTEE: The corporation or individuals appointed by
the Employer to administer the Trust in accordance with the Trust
Agreement.
(cc) VALUATION DATE: The date as of which the Trust Fund
is valued and gains or losses allocated, which shall be as of the
last day of each calendar quarter, or such other date as the
Committee may specify; however, such date shall be at least once
each year.
1.3 CONSTRUCTION: The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender, unless the context indicates to
the contrary.
ARTICLE II
SERVICE CREDIT
2.1 HOUR OF SERVICE:
a. HOURS OF SERVICE CREDIT USED FOR ALL PURPOSES: An Hour of Service is
any hour for which an Employee is directly or indirectly paid or entitled to
payment for the performance of duties (irrespective of whether the employment
relationship has terminated) or for certain reasons other than the performance
of duties, including any hour for which back pay (irrespective of mitigation of
damages) is due, by the Employer or Affiliated Employer.
Such payment for reasons other than the performance of duties must be due
to vacation, holiday, illness, incapacity (including disability), lay off, jury
duty, military duty or Leave of Absence; provided, however, that no Hour of
Service need be credited for payments received solely for the purpose of
complying with applicable workers' compensation or unemployment or disability
insurance laws or for payments received solely for reimbursing the Employee for
medical or medically related expenses. It is further provided that no more than
five hundred one (501) Hours of Service credit need be given for each single
continuous period for which an Employee is paid for reasons other than the
performance of duties. The determination of such Hours of Service for the
nonperformance of duties shall be in accordance with Section 2530.200b-2(b) of
the Minimum Standards Regulations prescribed by the Secretary of Labor.
Hours of Service credit at the rate of forty (40) hours per week shall
also be granted for any nonpaid period of absence authorized by the Employer in
accordance with its uniform Leave of Absence policy for granting such credit or
for military duty to the extent required under federal law.
Each Hour of Service earned by an Employee shall be credited to him as of
the time when he actually earned such Hour except as otherwise permissible or
required under Section 2530.200b-2(c) of the Minimum Standards Regulations
prescribed by the Secretary of Labor. In no event will an Employee receive
credit for the same Hours of Service more than once.
b. HOURS OF SERVICE CREDIT USED ONLY FOR PURPOSES OF DETERMINING BREAKS
IN SERVICE: Solely for purposes of determining whether an Employee has incurred
a one (1) year Break in Service, Hours of Service credit shall be given (if not
already given under a. above in this Section) for any absence, beginning after
December 31, 1984, by reason of pregnancy of the Employee, birth of the
Employee's child, placement of a child with the Employee in connection with the
adoption of such child by said Employee, and absence for purposes of caring for
such child for a period beginning immediately following such birth or placement.
No more than five hundred one (501) Hours of Service credit need be given
for such periods of absence, and the credit given shall be the Hours of Service
which otherwise would normally have been credited to such Employee but for such
absence. In any case in which hourly records are not maintained, Hours of
Service credit shall be given at the rate of eight (8) hours for each day of
such absence.
Said Hours of Service shall be credited in the Plan Year during which said
absence began only if the Employee would be prevented from incurring a Break in
Service in said year by treating said periods of absence as Hours of Service;
however, if said Employee would not incur a Break in Service during said year,
such Hours of Service shall be credited in the immediately following year.
2.2 PARTICIPATION SERVICE: Participation Service is the period of
employment used in determining eligibility for participation in this Plan.
Subject to the loss of service rules below in this Article, a year of
Participation Service is the completion of one thousand (1,000) Hours of Service
in the twelve (12) month period beginning with the date of the Employee's first
Hour of Service or in any Plan Year following such date.
2.3 BREAK IN SERVICE: For purposes of determining Participation Service,
an Employee shall have a year of Break in Service for the twelve (12) month
period beginning with the date of his first Hour of Service and for any Plan
Year following such date if during such twelve (12) month period or such Plan
Year he completes five hundred (500) or fewer Hours of Service. Authorized
Leaves of Absence, however, shall not constitute a Break in Service provided the
Employee returns within the authorized absence.
2.4 LOSS OF SERVICE: If an Employee who has not become a Member
hereunder has a termination of employment that results in at least five (5)
consecutive years of Breaks in Service that are equal to or greater than the
total years of Participation Service, then he shall lose all such prior
Participation Service previously accrued hereunder.
ARTICLE III
PARTICIPATION REQUIREMENTS
3.1 PARTICIPATION ORIGINATING UNDER THE PREVIOUS PLAN: Employees in
Covered Employment who were participants in the Previous Plan immediately prior
to the Effective Date, or would have become participants on the Effective Date,
shall automatically become Members in this restated Plan as of the Effective
Date.
3.2 PARTICIPATION ORIGINATING UNDER THIS PLAN: Each Employee who does
not become a Member in this Plan in accordance with Section 3.1 hereof shall
become a Member in this Plan on the first January 1st or July 1st (i.e., "entry
date") on which he:
a. is in Covered Employment;
b. has attained his twenty-first (21st)
birthday;
c. has completed a year of Participation
Service; and
d. has agreed to participation hereunder in
writing on a form prescribed by the Committee.
3.3 CESSATION OF PARTICIPATION AND REENTRY: If an Employee has a year or
more of Breaks in Service, or if he leaves Covered Employment, before he has
become a Member hereunder, he will, following such Break in Service or
interruption of Covered Employment, become a Member on the first entry date
specified in Section 3.2 hereof after he meets the requirements for
participation specified in Section 3.2 hereof. For purposes of determining
whether an Employee's prior Participation Service is to be counted toward such
requirements, the provisions of Section 2.5 hereof shall be applicable.
If, however, an Employee leaves Covered Employment after having met the
participation requirements of Section 3.2 hereof but before his entry date, he
will, if he reenters Covered Employment after such entry date but before having
a one (1) year Break in Service, become a Member immediately upon such reentry
into Covered Employment.
If an Employee has a year or more of Breaks in Service, or if he leaves
Covered Employment, after he has a vested benefit hereunder, he will cease his
participation in this Plan, but will, immediately following such Break in
Service or interruption of Covered Employment, again become a Member hereunder,
provided he is in Covered Employment.
3.4 PARTICIPATION OF EMPLOYEES OF NEW EMPLOYERS: If, after the Effective
Date hereof, any organization adopts the Plan and Trust as a new Employer as
herein provided, it shall specify in its adoption resolution or decision an
initial date for the application and enrollment of its eligible Employees under
the Plan and shall thereafter be governed by the provisions of this Article III.
ARTICLE IV
CONTRIBUTIONS AND ESOP LOANS
4.1 ESOP EMPLOYER CONTRIBUTIONS AND ESOP LOANS: The Employer shall, for
any Plan Year, contribute an ESOP Employer Contribution, determined at the
discretion of the Employer's Board of Directors, which shall be at least
sufficient to discharge any obligations of the Trust as to a loan obtained by
the Trustee for purposes of acquiring Employer Stock.
An Employer's contribution shall be made in cash, shares of Employer Stock
or such other property as the Employer's Board of Directors may determine.
Shares of Employer Stock and any other property made as an ESOP Employer
Contribution shall be valued at fair market value as of the date of
contribution. Employer Contributions in cash shall be used to pay any
outstanding obligations of the Trust incurred for the purchase of Employer
Stock, or may be applied to purchase additional shares of Employer Stock.
The Committee may direct the Trustee to incur debt obligations from time
to time to finance the acquisition of Employer Stock for the Trust. The
Employer Stock so acquired shall be held in a loan suspense account. Any such
debt obligation shall bear a reasonable rate of interest and may be secured by a
collateral pledge of the Employer Stock so acquired. No other Trust assets may
be pledged as collateral by the Trustee, and no lender shall have recourse
against the Trust Fund other than any shares of Employer Stock remaining subject
to pledge. Any pledge of Employer Stock must provide for the release of shares
so pledged as the debt obligation is repaid by the Trustee and such shares are
released from the loan suspense account and allocated to Members' Individual
Accounts; provided that the number of shares pledged to be released from the
loan suspense account for allocation to the Members' Individual Accounts for
each Plan Year shall be the number of shares pledged held in the loan suspense
account prior to the release, multiplied by a fraction the numerator of which is
the amount of principal and/or interest paid on the loan obtained to acquire the
shares and the denominator of which is the sum of the numerator plus the total
payments of principal and interest to be paid on the loan. Repayments of
principal and interest on any debt obligations shall be made by the Trustee (as
directed by the Committee) only from ESOP Employer Contributions in cash to the
Trust. The proceeds of any such loan may be used only to acquire Employer
Stock, to repay such loan, or to repay a prior loan.
4.2 MEMBER (PRE-TAX) SALARY DEFERRAL CONTRIBUTIONS: Before he becomes a
Member hereunder and prior to each January 1 or July 1 thereafter, a Member may
enter into a written salary deferral agreement with his Employer which shall
provide that the Member elects to defer (on a pre-tax basis) a portion of his
Compensation; provided, however:
(1) The Committee may require such contributions to be a
whole dollar or a whole percentage of his Compensation.
(2) Such deferral must meet the deferral percentage test in
Section 4.5 hereof, and the Committee may require modifications in
order to meet such test.
(3) Such deferral cannot exceed the dollar limit in Section
4.4 hereof.
(4) Such deferral cannot exceed fifteen percent (15%) of
the Member's Compensation for the Plan Year.
A salary deferral agreement shall be entered into on such forms as the
Committee may prescribe, provided that changes, suspensions or discontinuance of
salary deferrals may be made by the Member as of any January 1 or July 1 in
accordance with Committee guidelines, and may be made by the Committee if called
for under Section 4.4 or 4.5 hereof or if the Employer's deduction limits under
Code Section 404(a) would otherwise be exceeded, or if the annual addition
limitations under Code Section 415 would otherwise be exceeded as to any
Employee. If any Member fails to make a new election as to salary deferral for
any Plan Year, the Committee shall deem his election to be the same as for the
prior year.
4.3 DISCONTINUANCE OF MEMBER (AFTER-TAX) CONTRIBUTIONS: Member (after-
tax) Contributions were discontinued effective January 1, 1988.
4.4 SEVEN THOUSAND DOLLAR ($7,000) TEST: If a Member's Salary Deferral
Contributions hereunder after 1986 should exceed Seven Thousand Dollars
($7,000), (subject to the cost-of-living adjustment set forth in Code Section
402(g)(5)), in any taxable year of the Member, the excess (adjusted for earnings
or losses thereon) shall be distributed to the Member. If the Member also
participates in another elective deferral program (within the meaning of Code
Section 402(g)(3)) and if, when aggregating his elective deferrals under all
such programs, an excess of deferral contributions arises under the dollar
limitation in Code Section 402(g) with respect to such Member, the Member shall,
no later than March 1st following the close of the Member's taxable year, notify
the Committee as to the portion of such excess deferrals to be allocated to this
Plan and such excess so allocated to this Plan (adjusted for earnings or losses
thereon) shall be distributed to the Member after reduction by any excess
contribution already distributed for such year under Section 4.5b hereof. Any
distribution under this Section shall be made to the Member no later than the
April 15th immediately following the close of the Member's taxable year for
which such contributions were made.
4.5 DEFERRAL AND CONTRIBUTION PERCENTAGE TESTS:
a. HIGHLY COMPENSATED EMPLOYEE: For purposes of this Section, after
1986, the term Highly Compensated Employee shall mean any Employee who, during
the Plan Year of determination or the immediately preceding Plan Year:
(i) was at any time during such year(s) a five
percent (5%) owner (as defined in Code Section
416(i)(1));
(ii) received compensation (as defined below) from
the Affiliated Employers in excess of Seventy-Five
Thousand Dollars ($75,000);
(iii) received compensation (as defined below) from
the Affiliated Employers in excess of Fifty Thousand
Dollars ($50,000) and was in the top twenty percent
(20%) of the Employees of all Affiliated Employers
(when ranked on the basis of compensation paid
during such year); excluding, however, for purposes
of determining the top twenty percent (20%):
(A) Employees who have not completed at
least six (6) months of service;
(B) Employees who normally work less than
seventeen and one-half (17 1/2) hours per
week;
(C) Employees who normally work during not
more than six (6) months during any Plan
Year;
(D) Employees who have not attained age
twenty-one (21);
(E) Employees covered under a collective
bargaining agreement (to the extent
permitted in appropriate regulations); and
(F) Employees who are nonresident aliens
and who receive no earned income (as
defined in Code Section 911(d)(2) which
constitutes income from sources within the
United States (within the meaning of Code
Section 861(a)(3)); or
(iv) was at any time an officer and received
compensation (as defined below) greater than fifty
percent (50%) of the dollar limitation in effect
under Code Section 415(b)(1)(A) for such Plan Year;
provided that, for purposes of this subparagraph
(iv):
(A) no more than fifty (50) Employees (or
if lesser, the greater of three (3)
Employees or ten percent (10%) of the
Employees) of the Affiliated Employers
shall be considered as officers, and
(B) if in such Plan Year, no officer
satisfied the requirements set forth in
this subparagraph (iv) above, the highest
paid officer of the Affiliated Employers
during such Plan Year shall be considered
an officer.
(1) For purposes of this Section, the term "compensation"
shall have the same meaning as in Code Section 415(c)(3), without
regard to (A) Code Sections 125, 402(a)(8), and 402(h)(1)(B), and
(B) Code Section 403(b) in the case of contributions made by an
Affiliated Employer under a salary reduction agreement.
(2) For purposes of determining whether an Employee is
highly compensated in the Plan Year for which the determination is
being made, any Employee not described in subparagraphs (ii),
(iii), or (iv) above for the preceding year (disregarding this
paragraph (2)), shall not be treated as described in subparagraphs
(ii), (iii), or (iv) above unless such Employee is a member of the
group consisting of the one hundred (100) Employees of the Employer
who were paid the highest compensation during the Plan Year for
which such determination is being made. Notwithstanding the
preceding sentence nor the first sentence in paragraph (a) above in
this Section, if the Employer so elects, the determination
described in said paragraph (a) above will be made only for the
Plan Year of determination if such Plan Year is a calendar year and
no such determination will be made for the immediately preceding
Plan Year, in which event the preceding sentence in this such
paragraph (2) will not apply; provided, however, the Employer may
only make such election if the same election is made as to all
plans, entities and arrangements of the Employer with respect to
which a determination of Highly Compensated Employees is necessary.
(3) For purposes of this Section, if any individual is a
member of the family (spouse, and lineal ascendants or descendants
and the spouses of such lineal ascendants or descendants) of a five-
percent (5%) owner or of a Highly Compensated Employee in the group
consisting of the ten (10) highly compensated Employees paid the
greatest compensation during such Plan Year, then the following
provisions shall be applicable:
(A) such family member shall not be
considered a separate Employee,
(B) any compensation paid to such family
member (as well as any applicable
contribution (or benefit) paid to or on
behalf of such person) shall be treated as
if it were paid to (or on behalf of) said
five-percent (5%) owner or Highly
Compensated Employee, and
(C) any excess as to such aggregated
family members under the following
provisions of this Section shall be
allocated among such family members on the
basis of their respective contributions
combined for purposes of determining such
excess.
(4) For purposes of this Section, former Employees shall be
treated as Highly Compensated Employees, if:
(A) such an Employee was a highly
compensated Employee upon termination of
employment with the Affiliated Employers;
or
(B) such an Employee was a highly
compensated Employee at any time after
attaining age fifty-five (55).
However, former Employees are disregarded when determining
the top twenty-percent (20%), the top one-hundred (100) or the
includible officers group above.
b. DEFERRAL PERCENTAGE TEST: Each Plan Year, after 1986, the Committee
shall determine:
(1) The "deferral percentage" for each Employee who is then
eligible for salary deferrals, which shall be the ratio of the
amount of such Employee's salary deferral for such Plan year to the
Employee's compensation (as defined in a manner meeting the
requirements of Code Section 414(s), subject to the dollar
limitation set forth in Section 1.2(f) hereof), while a Member, for
such Plan Year.
(2) The "highly compensated deferral percentage", which
shall be the average of the "deferral percentages" for all Highly
Compensated Employees then eligible for salary deferrals.
(3) The "nonhighly compensated deferral percentage", which
shall be the average of the "deferral percentages" for all
Employees then eligible for salary deferrals who were not included
in the "highly compensated deferral percentage" in (2) above.
In no event shall the "highly compensated deferral percentage" exceed the
greater of:
(A) a deferral percentage equal to one and
one-fourth (1 1/4) times the "nonhighly
compensated deferral percentage"; and
(B) a deferral percentage equal to two (2)
times the "nonhighly compensated deferral
percentage" but not more than two (2)
percentage points greater than the
"nonhighly compensated deferral
percentage".
If the above deferral percentage test would otherwise be violated as of
the end of the Plan Year, then notwithstanding any other provision hereof, every
contribution included in the "highly compensated deferral percentage" for a
Member whose deferral percentage is greater than the permitted maximum shall
automatically be revoked to the extent necessary to comply with such deferral
percentage test and the amount of such contribution, to the extent revoked,
shall constitute an "excess contribution" to be distributed to such Member
(adjusted for earnings and losses thereon) within two and one-half (2 1/2)
months following the close of the Plan Year for which such contribution was
made. Such excess shall first be reduced by any excess deferral for such
Plan Year already distributed to the Member under Section 4.4 hereof. To
determine the amount of the excess contribution and the Members to whom the
excess contributions are to be distributed, the Salary Deferral Contributions
of Highly Compensated Employees shall be reduced in order of the deferral
percentages beginning with the Highly Compensated Employee with the highest
of the deferral percentages. The actual deferral percentage of the Highly
Compensated Employee with the highest actual deferral percentage is reduced
by the amount required to cause the Employee's actual deferral percentage to
equal the percentage of the Highly Compensated Employee with the next highest
actual deferral percentage. If a lesser reduction would satisfy the actual
deferral percentage test, only this lesser reduction shall be made. This
process will be repeated until the deferrals satisfy the actual deferral
percentage test. The highest actual deferral percentage remaining under the
Plan after completion of the above leveling procedure is the highest
permitted actual deferral percentage. In no case may the amount of excess
contributions to be distributed for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Salary Deferral Contributions made
on behalf of the Highly Compensated Employee for the Plan Year.
If a Highly Compensated Employee participates in two or more plans
maintained by the Employer or Affiliated Employer, that are subject to the
deferral percentage test, then such Employee's deferral percentage shall be
determined by aggregating his participation in all such plans.
c. CONTRIBUTION PERCENTAGE TEST: Each Plan Year, after 1986, the
Committee shall determine:
(1) The "contribution percentage" for each Employee who is
then eligible to receive matching Employer contributions, which
shall be the ratio of the amount of such Employee's matching
Employer contribution to the Employee's compensation (as defined in
a manner meeting the requirements of Code Section 414(s), subject
to the dollar limitation set forth in Section 1.2(f) hereof), while
a Member, for such Plan Year.
(2) The "highly compensated contribution percentage", which
shall be the average of the "contribution percentages" for all
eligible Highly Compensated Employees.
(3) The "nonhighly compensated contribution percentage",
which shall be the average of the "contribution percentages" for
all Employees then eligible who were not included in the "highly
compensated contributions percentage" in (2) above.
In no event shall the "highly compensated contribution percentage" exceed
the greater of:
(A) a contribution percentage equal to one
and one-fourth (1 1/4) times the "nonhighly
compensated contribution percentage"; and
(B) a contribution percentage equal to two
(2) times the "nonhighly compensated
contribution percentage" but not more than
two (2) percentage points greater than the
"nonhighly compensated contribution
percentage".
If the above contribution percentage test would otherwise be violated as
of the end of the Plan Year, then notwithstanding any other provision hereof
every contribution included in the "highly compensated contribution percentage"
for a Member whose contribution percentage is greater than the permitted maximum
shall automatically be revoked to the extent necessary to comply with such
contribution percentages test and the amount of such contribution, to the extent
revoked, shall constitute an "aggregate excess contribution" to be distributed
to such Member (adjusted for earnings or losses thereon) or forfeited, if
applicable, within two and one-half (2 1/2) months following the close of the
Plan Year for which such contribution was made. To determine the amount of
aggregate excess contributions and the Members to whom the aggregate excess
contributions are to be distributed, the applicable contributions of Highly
Compensated Employees are reduced in the order of their contribution percentage
beginning with the Highly Compensated Employee with the highest contribution
percentage. The actual contribution percentage of the Highly Compensated
Employee with the highest actual contribution percentage is reduced by the
amount required to cause the Employee's actual contribution percentage to equal
the percentage of the Highly Compensated Employee with the next highest actual
contribution percentage. If a lesser reduction would satisfy the actual
contribution percentage test, only this lesser reduction shall be made. This
process will be repeated until the Plan satisfies the actual contribution
percentage test. The highest actual contribution percentage remaining under the
Plan after completion of the above leveling procedure is the highest permitted
actual contribution percentage. In no case may the amount of excess aggregate
contributions with respect to any Highly Compensated Employee exceed the amount
of Employee and matching Employer contributions made on behalf of the Highly
Compensated Employee for the Plan Year.
If a Highly Compensated Employee participates in two (2) or more plans
maintained by the Employer or Affiliated Employer that are subject to the
contribution percentage test, then such Employee's contribution percentage shall
be determined by aggregating his participation in all such plans. In addition,
if the Employer maintains two (2) or more plans subject to the contribution
percentage test and such plans are treated as a single plan for purposes of the
coverage requirements for qualified plans under Code Section 410(b), then such
plans are treated as a single plan for purposes of the contribution percentage
test.
d. NO MULTIPLE USE OF ALTERNATIVE LIMITATION: As to Members subject to
both of the limits in b. and c. above, additional reductions of the otherwise
applicable limits shall be made as necessary to prevent multiple use of the
alternative limitation (i.e., the two times or two percentage point limitation)
in accordance with Treas. Reg. 1.401(m)-2.
e. COLLECTIVE BARGAINING EMPLOYEES: Any collective bargaining unit
Employees hereunder hereof shall be disregarded when the above deferral and
contribution percentage tests are applied to nonbargaining Employees. The
deferral percentage test shall be applied separately to the Employees in each
collective bargaining unit who are eligible to make salary deferral elections
hereunder, or, if there is more than one collective bargaining unit with
Employees eligible to make salary deferrals hereunder, applied in the aggregate
to all collective bargaining unit Employees who are eligible to make salary
deferral elections hereunder, as determined each year by the Committee. The
above contribution percentage test is deemed to be automatically met by any
collective bargaining unit Employees otherwise subject to such test.
ARTICLE V
MAINTENANCE OF INDIVIDUAL ACCOUNTS
5.1 ESTABLISHMENT OF INDIVIDUAL ACCOUNTS: The Committee shall create and
maintain adequate records to reflect at all times the interest in the Trust Fund
of each Member. Such records shall be in the form of separate Individual
Accounts for each Member who has an interest in the Trust Fund, such accounts to
be referred to as follows:
a. ESOP ACCOUNT: An individual ESOP Account to which shall
be credited a Member's applicable share of ESOP Employer
Contributions and gains or losses allocable thereto.
b. SALARY DEFERRAL ACCOUNT: The account representing
Salary Deferral Contributions and gains or losses allocable
thereto.
c. EMPLOYEE CONTRIBUTION ACCOUNT: The account representing
Employee Contributions and gains or losses allocable thereto.
d. PAYSOP ACCOUNT: An individual PAYSOP Account to which
shall be credited a Member's applicable share of Employer
contributions, made for the PAYSOP Accounts of the Previous Plan,
and gains or losses allocable thereto.
Credits and charges shall be made to such accounts in the manner herein
described. The Individual Accounts are primarily for accounting purposes, and a
segregation of the assets of the Trust Fund to each account by the Trustee shall
not be required. Distributions and withdrawals made from an account shall be
charged to the account as of the date when paid.
Account balances from the Previous Plan shall be carried forward into the
above-referenced accounts, as applicable.
5.2 ALLOCATION OF CONTRIBUTIONS: Each contribution for eligible Members
shall be allocated as follows:
a. ESOP EMPLOYER CONTRIBUTION: As the Trustee makes each
annual payment on the balance due on any loan that has been
obtained by the Trustee in accordance with the terms of this Plan
for the purchase of Employer Stock, each annual payment shall be
considered a purchase of Employer Stock, and shall be deemed to be
an ESOP Employer Contribution. On the Allocation Date, the ESOP
Account of each Member eligible to receive an allocation will be
credited with the allocable share of Employer Stock having been
purchased and paid for by the Trust, or contributed in kind by the
Employer. The amount of the annual allocation to the ESOP Account
of each such Member shall be an amount equal to fifty percent
(50%), or such other lesser or greater percentage as the Board may
determine annually in its sole discretion, of the Salary Deferral
Contributions made by a Member during the Plan Year but
disregarding any such Salary Deferral Contributions in excess of
five percent (5%) of the Member's Compensation for the Plan Year.
Prior to allocation hereunder, any Employer Stock purchased with
the proceeds of a loan as permitted under Section 4.1 hereof shall be
held in a suspense account which shall be an asset of the Plan.
b. SALARY DEFERRAL CONTRIBUTIONS: Any Salary Deferral
Contribution received hereunder on behalf of a Member shall be
allocated to this Salary Deferral Contribution Account as of the
Allocation Date applicable to such contribution.
5.3 ALLOCATION OF GAINS AND LOSSES: The Trust Fund's gains or losses
shall be allocated as of each Valuation Date as follows:
a. The Committee shall, before taking into account the
contributions for the period since the last preceding Valuation
Date, determine the then market value of the Trust Fund and the net
gain or loss of the Trust Fund from the preceding valuation, taking
into account expenses of administration and charges against such
Trust Fund, including payment of outstanding obligations of the
Trust incurred in the purchase of Employer Stock.
b. The Committee shall determine the total aggregate value
of all Individual Accounts as shown in its records for the
preceding Valuation Date, reduced by any distributions therefrom.
This balance shall be the value used in c. below.
c. The Committee shall then adjust the value of each
Individual Account by crediting each such Individual Account with
its proportion of the net gain if there is a gain or charging it
with its proportion of the net loss if there is a loss; the
proportion to be so credited or charged to each Individual Account
shall be calculated by multiplying such gain or loss by a fraction,
the numerator of which is the then value of said Individual Account
and the denominator of which is the then aggregate value of all
Individual Accounts.
5.4 NOTIFICATION TO MEMBERS: At least once annually the Committee shall
advise each Member for whom an Individual Account is held hereunder the amount
held in such account.
ARTICLE VI
RETIREMENT OR EARLIER
TERMINATION OF EMPLOYMENT
6.1 BENEFIT: A Member shall at all times have a fully vested and
nonforfeitable interest in his Individual Accounts hereunder. Distribution will
be made upon his termination of employment, subject, however, to the post age
70 1/2 distribution provisions of Section 11.4 hereof. The amount of his
Individual Accounts shall be the balance as of the Valuation Date concurrent
with or next preceding the date of his Retirement, plus any contributions
allocated to, and minus any payments from, his Individual Accounts since such
Valuation Date, except that, if a Retired or Disabled Member who terminated
employment other than on a year-end Allocation Date so elects, in writing and in
advance, his balance shall be determined as of the year-end Allocation Date next
following the date of his Retirement or Disability, including allocation of any
contribution then being allocated hereunder, taking into account the Member's
Compensation and Salary Deferral Contributions made up to his Retirement or
Disability. Payment shall be made at the time and in the manner provided in
Article XI hereof.
ARTICLE VII
DEATH
7.1 DESIGNATION OF BENEFICIARY: Each Member and former Member may, from
time to time, designate one (1) or more primary Beneficiaries and contingent
Beneficiaries to receive benefits payable hereunder in the event of the death of
such Member or former Member. If a married Employee wishes to designate someone
other than his spouse to be a primary Beneficiary (or wishes to continue such a
designation made prior to January 1, 1985), such designation will not become (or
continue) effective unless his spouse (if his spouse can be located) consents in
writing to such designation, acknowledges the effect of such designation and has
such consent and acknowledgment witnessed by a Plan representative or a notary
public. Such designation shall be made in writing upon a form provided by the
Committee and shall be filed with the Committee. The last such designation
filed with the Committee shall control. If the spouse duly consents to the
designation of another beneficiary and to future changes in such designation,
then spousal consent is not needed for any such future changes.
7.2 BENEFIT: Upon the death of a Member or former Member, his designated
Beneficiary, or Beneficiaries, shall be fully vested with respect to the balance
of his Individual Accounts as of the Valuation Date concurrent with or next
preceding the date of his death, plus any contributions allocated to, and minus
any payments from, the Member's Individual Accounts since such Valuation Date,
except that, if the Beneficiary of an Employee who died other than on a year-end
Allocation Date so elects in writing and in advance, such balance shall be
determined as of the year-end Allocation Date next following the date of death,
including allocation of any contribution then being allocated hereunder, taking
into account the Member's Compensation and Salary Deferral Contributions made up
to the Member's death. Payment shall be made at the time and in the manner
provided in Article XI hereof.
7.3 NO BENEFICIARY: If a Member or former Member dies without a
Beneficiary surviving him, or if all his Beneficiaries die before receiving the
payment to which they are entitled, then the amount, if any, remaining in such
Member's Individual Account shall be paid to the following, with priority as
follows:
a. the Member's surviving spouse;
b. the Member's children and children of
deceased children, per stirpes;
c. The Member's parents;
d. The Member's brothers and sisters, or if
deceased, the children of such brothers and
sisters, per stirpes;
e. The Member's estate.
A certified copy of a death certificate shall be sufficient evidence of
death and the Committee shall be fully protected in relying thereon. The
Committee may accept other evidence of death at its own discretion.
ARTICLE VIII
CODE SECTION 415 LIMITS
8.1 LIMIT ON ANNUAL ADDITIONS UNDER CODE SECTION 415: Contributions
hereunder shall be subject to the limitations of Code Section 415, as provided
in this Section.
a. DEFINITIONS: For purposes of this Section the following
definitions shall apply:
(1) "ANNUAL ADDITION" shall mean the sum of the
following additions to a Member's Individual Account
for the Limitation Year:
(a) Employer contributions (including salary
reduction contributions);
(b) His own (after-tax) contributions, if any;
(c) Forfeitures, if any.
Annual Additions to other Employer defined
contribution plans (also taken into account when
applying the limitations described below) shall
include any voluntary employee contributions to an
account in a defined benefit plan and any employer
contributions to an individual retirement account or
annuity under Code Section 408 or to a medical
account for a key employee under Code Section 401(h)
or 419A(d), except that the 25%-of-pay limit below
shall not apply to employer contributions to a key
employee's medical account after his separation from
service.
(2) "EARNINGS" for any Limitation Year shall be
the Employee's earned income, wages, salaries, and
fees for professional services, and other amounts
received for personal services actually rendered in
the course of employment with the Employer
(including, but not limited to, commissions paid
salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance
premiums, tips and bonuses), provided such amounts
are actually paid or includible in gross income
during such year. Earnings shall exclude the
following:
(i) Employer contributions to a plan of
deferred compensation which are not
included in the Employee's gross income for
the taxable year in which contributed or
Employer contributions under a simplified
employee pension plan to the extent such
contributions are deductible by the
Employee or any distributions from a funded
plan of deferred compensation;
(ii) Amounts realized from the exercise
of a nonqualified stock option, or when
restricted stock (or property) held by the
Employee either becomes freely transferable
or is no longer subject to a substantial
risk of forfeiture;
(iii) Amounts realized from the sale,
exchange or other disposition of stock
acquired under a qualified stock option;
and
(iv) Other amounts which received special
tax benefits, or contributions made by the
Employer (whether or not under a salary
reduction agreement) towards the purchase
of an annuity described in Section 403(b)
of the Code (whether or not the amounts are
actually excludable from the gross income
of the Employee).
b. DEFINED CONTRIBUTION PLAN(S) ONLY: The Annual Addition
to a Member's Individual Account hereunder (together with the
Annual Additions to the Member's account(s) under any other
qualified defined contribution plan(s) maintained by an Affiliated
Employer) for any Limitation Year may not exceed the lesser of:
(1) Thirty Thousand Dollars ($30,000.00), and
for each year thereafter the dollar amount
prescribed by the Secretary of the Treasury, to
take into account any cost-of-living adjustment
under Section 415(d) of the Code, or, if greater,
twenty-five percent (25%) of the dollar limitation
under Code Section 415(b)(1)(A); or
(2) Twenty-five percent (25%) of the Member's
Earnings for the Limitation Year.
c. DEFINED CONTRIBUTION AND DEFINED BENEFIT PLANS: If, in
any Limitation Year, a Member also participates in one (1) or more
qualified defined benefit plans maintained by any Affiliated
Employer (whether or not terminated), then for such Limitation
Year, the sum of the Defined Benefit Plan Fraction (as defined
below) for such Limitation Year and Defined Contribution Plan
Fraction (as defined below) for such Limitation Year shall not
exceed one (1.0).
The Defined Benefit Fraction for any Limitation Year shall
mean a fraction (a) the numerator of which is the projected annual
benefit of the member under the qualified defined benefit plan(s)
(determined as of the close of the Limitation Year), and (b) the
denominator of which is the lesser of One Hundred Twenty-Five
Percent (125%) of the dollar limitation under Code Section
415(b)(1)(A) or One Hundred Forty Percent (140%) of the percentage
limitation under Code Section 415(b)(1)(B) for the year of
determination (taking into account the effect of Section 235(g)(4)
of the Tax Equity and Fiscal Responsibility Act of 1982).
The Defined Contribution Fraction for any Limitation Year
shall mean a fraction (a) the numerator of which is the sum of the
Annual Additions (as defined during each applicable Limitation
Year) to the Member's accounts under all qualified defined
contribution plans maintained by an Affiliated Employer as of the
close of the Limitation Year (subject to reduction to the extent
permitted under the transition rule in Section 235(g)(3) of the Tax
Equity and Fiscal Responsibility Act of 1982), and (b) the
denominator of which is the sum of the lesser of One Hundred Twenty-
Five Percent (125%) of the dollar limitation under Code Section
415(c)(1)(A) or One Hundred Forty Percent (140%) of the percentage
limitation under Code Section 415(c)(1)(B), for such Limitation
Year and for all prior Limitation Years during which the Employee
was employed by an Affiliated Employer (provided, however, at the
election of the Committee, the denominator shall be increased by
using for Limitation Years ending prior to January 1, 1983, an
amount equal to the denominator in effect for the Limitation Year
ending in 1982, multiplied by the transition fraction provided in
Code Section 415(e)(6)(B)).
If, in any Limitation Year, the sum of the Defined Benefit
Plan Fraction and Defined Contribution Plan Fraction for a Member
would exceed one (1.0) without adjustment of the amount of Annual
Additions that can be allocated to such Member under paragraph b.
of this Section, then the amount of maximum annual benefit that can
be paid to such Member under any qualified defined benefit plan(s)
maintained by an Affiliated Employer, shall be reduced to the
extent necessary to reduce the sum of the Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction for such Member to
one (1.0).
d. EXCESS ALLOCATION: If forfeitures available for
allocation or if a reasonable error in either estimating a Member's
Earnings or in determining the Member's elective deferrals (under
Code Section 402(g)(3)) would cause the limitation on Annual
Additions described above to be exceeded, then the amount of such
excess shall be allocated among all other Members' ESOP Accounts to
the extent possible without exceeding such limitation. Such
allocation will be made in the same manner as ESOP Employer
Contributions are allocated hereunder. Notwithstanding the above,
any such excess amount of after-tax contribution or elective pre-
tax contribution (under Code Section 402(g)(3)) may be refunded to
the Member. In the event of such a refund, each of the following
of a Member's contributions will be deemed to include a
proportionate part of the excess (i) after-tax contributions, if
any, (ii) elective pre-tax, contributions, if any, and
(iii) Employer matching contributions, if any.
To the extent that the Committee determines that
contributions not yet made to the Plan on behalf of Members would
cause an excess hereunder if actually made to the Plan, the
Committee may apply the above limitations prospectively to limit
the contribution amount actually receivable by the Plan for such
Member.
ARTICLE IX
VOTING EMPLOYER STOCK AND
DIVIDENDS ON EMPLOYER STOCK
9.1 VOTING EMPLOYER STOCK: Prior to the holding of each annual or
special meeting of holders of Employer Stock, the Trustee will send to all
Members who have any Employer Stock in their Individual Account, the proxy
statement for such meeting, together with a form to be returned to the Trustee.
This form, when completed by the Member, will set forth the Member's
instructions as to the manner of voting all Employer Stock allocated to the
Member's Individual Account. Upon receipt of the instructions from the Member,
the Trustee will vote (or exercise dissenter's rights when applicable) the
Employer Stock in accordance with the instructions of the Member. If, within
five days prior to such meeting, the Trustee does not receive instructions, the
Trustee will vote (or exercise dissenter's rights, where applicable) the
Employer Stock for which it has not received instructions, and will vote all
Employer Stock held by it in the suspense account under Section 4.1 hereof, in
the same proportion (based on the total number of shares allocated to Members'
Individual Accounts) that shares for which directions were received are voted.
The Trustee shall vote all other securities that it holds in such manner as the
Committee shall direct.
The Trustee shall vote (or exercise dissenter's rights, when applicable)
all Employer Stock held by it to the extent it is not allocated to any
Individual Accounts, as well as all other securities that it holds, in such
manner as the Committee shall direct.
9.2 ACTIONS RELATING TO A TENDER OFFER: In the event of a tender offer
for Employer Stock, the Trustee will send to all Members the tender offer
documents and other materials relating to such tender offer that are sent to
holders of Employer Stock, together with a form to be returned to the Trustee.
This form will set forth instructions as to whether the Trustee is directed to
tender into the tender offer the Employer Stock allocated to the Member's
Individual Account. Upon receipt of the instructions from the Member, the
Trustee will take such action as directed by the Member. In the case in which
valid instructions are not received from Members with respect to any shares of
Employer Stock allocated to Members' Individual Accounts, and in the case of
shares of Employer Stock held in the suspense account under Section 4.1 hereof,
the Trustee will tender into such tender offer only that number of shares that
bears the same ratio to the total of all such shares in each such case as the
number of shares for which the Trustee has received valid instructions to tender
into the tender offer bears to the total number of shares allocated to Members'
Individual Accounts.
9.3 NO PASS-THROUGH OF CASH DIVIDENDS ON EMPLOYER STOCK: Cash dividends
on shares of Employer Stock held in the Trust shall not be passed through to
Members, but shall be retained in the Trust until distribution under the normal
distribution provisions of this Plan.
ARTICLE X
IN-SERVICE WITHDRAWALS
10.1 WITHDRAWALS: Each Member, by filing a written request with the
Committee (on a form furnished by the Committee and in accordance with Committee
guidelines) may, once each year, withdraw amounts from any of his Individual
Accounts, while in the employment of the Employer, in accordance with the
following paragraphs.
a. WITHDRAWALS FROM ESOP ACCOUNT IN LIEU OF DIVERSIFICATION: Effective
with the 1987 Plan Year, in-service withdrawals from the ESOP Accounts in this
Plan in lieu of investment diversification, as provided for under Code Section
401(a)(28), will be in accordance with the following provisions:
(1) "Qualified Member" shall mean a Member who has attained age
fifty-five (55) and completed ten (10) years of participation in
the Plan.
(2) "Qualified Election Period" shall mean the six (6) Plan Year
period beginning with the later of (i) the first Plan Year after
December 31, 1986; or (ii) the first Plan Year in which the Member
first becomes a Qualified Member.
(3) "Post 86 Stock" shall mean Employer Stock, allocated to a
Member's ESOP Account, that was acquired by the Plan after December
31, 1986.
(4) Each Qualified Member may elect certain withdrawals from that
portion of his ESOP Account that represents his Post 86 Stock.
Such withdrawals must be elected by filing with the Committee a
written application on a form furnished by the Committee. The
Member may make one such withdrawal during each of the ninety (90)
day periods that follow the close of each of the six Plan years in
his Qualified Election Period. If, however, the value of his Post
86 Stock is less than Five Hundred Dollars ($500) as of the
December 31st immediately preceding the first such ninety day
period, then no such withdrawal will be allowed until such ninety
day period as follows a December 31st as of which his Post 86 Stock
had a value of at least Five Hundred Dollars ($500). Thereafter,
no such de minimis rule will apply to such Member. The total
withdrawals for all six such ninety day periods may not exceed, in
the aggregate, fifty percent (50%) of his Post 86 Stock; provided,
however, that the total of all such withdrawals for the first five
(5) of such ninety day periods may not exceed, in the aggregate,
twenty-five percent (25%) of his Post 86 Stock.
(5) Each such elected withdrawal shall be made within one hundred
eighty (180) days after the close of the Plan Year to which it
relates.
b. WITHDRAWALS FROM EMPLOYEE CONTRIBUTION ACCOUNTS: A Member may elect a
withdrawal from his Employee Contribution Account. Such withdrawal election
must be made by filing with the Committee a written application on a form
furnished by the Committee. Such withdrawal shall be paid as soon as
practicable after the Committee receives written application. After the total
of such Member's withdrawals from his Employee Contribution Account equals the
amount of his after-tax contributions credited thereto before 1987, then any
further withdrawal from such account will automatically consist partially of his
(after-tax) contributions and partially of (taxable) earnings and gains thereon.
The amount thereof consisting of the Member's contributions shall be the portion
of the further amount to be withdrawn from such account which bears the same
ratio to such further amount to be withdrawn as the balance of the Member's
after-tax contributions held therein bears to the balance of the Member's
Employee Contribution Account. The remaining amount of such further withdrawal
shall be earnings and gains.
c. WITHDRAWALS FROM SALARY DEFERRAL ACCOUNTS: A Member may, if he has
first withdrawn the maximum amount available under b. above, request a
withdrawal from his Salary Deferral Account, but only of Salary Deferral
Contributions that have been in his account for at least one year. Such request
must be made by filing with the Committee a written application on a form
furnished by the Committee. Any such request for a withdrawal must show that
(i) the Member has an immediate and heavy financial need, and (ii) the
withdrawal is necessary to satisfy such need. The following rules apply:
(1) IMMEDIATE AND HEAVY FINANCIAL NEED: An immediate heavy
financial need shall be deemed to exist with respect to a Member
only if the withdrawal request is on account of any of the
following:
(A) Expenses for medical care described in Code Section 213(d)
incurred by the Member, the Member's spouse, or any dependents
of the Member (as defined in Code Section 152), including
expenses necessary for any such person to obtain such medical
care.
(B) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Member.
(C) Payment of tuition and related educational fees for not more
than the next twelve months of post-secondary education for
the Member, his spouse, children, or dependents.
(D) The need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage on the
Member's principal residence.
(E) Such other events as may be acceptable to the Internal Revenue
Service.
(2) NECESSITY OF WITHDRAWAL TO SATISFY IMMEDIATE AND HEAVY
FINANCIAL NEED: A hardship withdrawal request shall be deemed to
be necessary to satisfy an immediate and heavy financial need only
if all of the following conditions are satisfied:
(A) The amount of the withdrawal request is not in excess of the
immediate and heavy financial need of the Member (including
any reasonably anticipated taxes on such withdrawal).
(B) The Member has obtained all distributions, other than hardship
distributions from his Salary Deferral Account, and all
nontaxable loans currently available from all plans maintained
by the Employer or Affiliated Employers.
(C) The Member's right to make elective contributions to this Plan
and all other plans (including nonqualified deferred
compensation plans) maintained by the Employer or Affiliated
Employers is (and shall be) suspended for twelve (12) months
after receipt of the hardship distribution. In the event more
than one (1) distribution is made hereunder within a twelve
(12) month period, the suspension period shall not be tacked
to the remaining portion of the prior suspension period but
rather shall start anew.
(D) The Member's right to make Salary Deferral Contributions to
this Plan and all other plans maintained by the Employer or
Affiliated Employers in the taxable year following the taxable
year of the hardship distribution is (and shall be) limited to
an amount equal to the applicable limit under Code Section
402(g) reduced by the Member's Salary Deferral Contributions
in the taxable year of the hardship distribution. The term
"taxable year" as used hereunder means the Member's taxable
year.
(3) SOURCE OF HARDSHIP WITHDRAWAL: In the event of a hardship
withdrawal, such withdrawal may only be made from Salary Deferral
Contributions, and from earnings on such Salary Deferrals
Contributions as of December 31, 1988. Hardship withdrawals shall
not be allowed hereunder with respect to any earnings credited
after December 31, 1988.
The Committee may establish procedures to be followed in making such
withdrawals, including minimum amounts of withdrawals. Upon Committee approval,
such withdrawal shall be paid as soon as practicable.
ARTICLE XI
TIME AND METHODS OF PAYMENT
11.1 TIME OF PAYMENT: Payment of any Member's Individual Account shall
be as soon as practicable after such account becomes distributable hereunder,
subject to the following:
a. In no event (subject to b. below) shall payment be later
than sixty (60) days after the close of the Plan Year in which the
Member's employment with all Affiliated Employers terminates (for
whatever reason).
b. A former Employee who has not attained age 65 may
(unless cashed out under Section 11.3 below) elect to delay his
distribution until age 65.
c. Notwithstanding the above, if, (i) at any time during
the Plan Year ending in the calendar year in which a Member attains
age seventy and one-half (70 1/2), such Member is a five percent (5%)
owner as described in Section 12.1a.(1)(iii) hereof, or (ii) any
other Member attains age seventy and one-half (70 1/2) after December
31, 1987, then in no event shall distribution of his Individual
Accounts be delayed beyond April 1st of the calendar year following
the calendar year in which such Member attains age seventy and one-
half (70 1/2), regardless of whether he has actually retired. Any
additional amounts subsequently credited to a Member's Individual
Account will be distributed in the calendar year following the
calendar year when credited.
11.2 METHOD OF PAYMENT: When benefits become payable, the distributee
may (subject to the following sections of this Article) elect that such benefits
shall be paid in one (1) of the following ways, or a combination thereof:
(i) Lump sum, payable in cash.
(ii) Lump sum, payable in shares of Employer Stock
(except fractional shares, which will be paid in cash).
(iii) A direct rollover, if the payment is an eligible
rollover distribution to an eligible retirement plan specified by
the distributee. An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of
the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee
or the joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities.) An
eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is only an individual retirement account
or individual retirement annuity. A distributee includes an
Employee or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of
the Code, are distributees with regard to the interest of the
spouse or former spouse. A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
In the event distribution is delayed, the allocation of gains or losses
described in Section 5.3 hereof shall continue to be applicable to the
Individual Accounts until distributed.
11.3 BALANCE OF $3,500 OR LESS: If, when first distributable under this
Article, the total nonforfeitable balance in a Member's Individual Accounts is
equal to or less than Three Thousand Five Hundred Dollars ($3,500), such balance
will automatically be distributed to him (or his beneficiary in the case of the
Member's death) in a lump sum, subject to the direct rollover option in Section
11.2 hereof.
11.4 MINORITY OR INCOMPETENCY: During the minority or incompetency of
any person entitled to receive benefits hereunder, the Committee may direct the
Trustee to make payments or distributions to the guardian of such person, or
other persons as may be directed by the Committee. Neither the Committee nor
the Trustee shall be required to see to the application of any payments so made,
and the receipt of the payee (including the endorsement of a check or checks)
shall be conclusive as to all interested parties.
11.5 PUT OPTION: If at the time of distribution hereunder, or at any
time within the fifteen (15) month period following distribution, Employer Stock
is not publicly traded, or is subject to a trading limitation, the Employer
shall issue a put option to each Member or Beneficiary receiving a distribution
of Employer Stock from the Trust. The put option shall permit the Member to
sell such Employer Stock to the Employer, at any time during the fifteen (15)
month period following such distribution. The purchase price for such Employer
Stock shall be its fair market value as determined by a qualified independent
appraiser chosen by the Committee, as of the Valuation Date next preceding the
date of exercise of the option; provided that if the sale of the stock is
between the Plan and a disqualified person, the purchase price of the Employer
Stock shall be determined as of the date of the sale. Exercise of the put
option shall be made in writing to the Committee. The payment for Employer
Stock sold pursuant to a put option shall be made in a lump sum or in
substantially equal, annual installments over a period not exceeding five (5)
years, with interest payable at a reasonable rate on any unpaid installment
balance, as determined by the Committee. The Employer or the Committee (on
behalf of the Trust) may offer to purchase any shares of Employer Stock (which
are not sold pursuant to a put option) from any Former Member (or Beneficiary)
at any time in the future, at their then fair market value.
11.6 CONTINUED APPLICATION: The provisions of Section 11.5 hereof shall
continue to be applicable to shares of Employer Stock even if the Plan ceases to
be an employee stock ownership plan under Section 4975(e)(7) of the Code.
ARTICLE XII
TOP-HEAVY RESTRICTIONS
12.1 TOP-HEAVY RESTRICTIONS:
a. DETERMINATION OF TOP-HEAVINESS
Subject to b. of this Section, this Plan will be considered to be top-
heavy in any Plan Year if the aggregate value of the account balances of
key Employees hereunder is greater than sixty percent (60%) of the
aggregate value of all account balances hereunder. For purposes of
determining whether such top-heaviness exists in any such Plan Year the
following provisions shall be applicable:
(1) A key Employee is any individual (whether or not deceased) who, at
any time during the five (5) Plan Years immediately preceding the
current Plan Year, was:
(i) an officer of the Employer or Affiliated
Employer having an annual compensation
from the Employer and/or Affiliated
Employer (as reported on income tax form
W-2 or its equivalent) greater than One
Hundred Fifty Percent (150%) of the
defined contribution plan dollar
limitation in effect under Code Section
415(c)(1)(A) for any such Plan Year
(except that no more than fifty (50)
Employees or, if less, the greater of
three (3) and ten percent (10%) of the
Employees, shall be treated as
officers), or
(ii) one of the ten (10) Employees having an
annual compensation from the Employer
and/or Affiliated Employer (as reported
on income tax form W-2 or its
equivalent) greater than the defined
contribution plan dollar limitation in
effect under Code Section 415(c)(1)(A)
and owning (or considered as owning
under Code Section 416(i)(1)) both more
than a one-half percent (1/2%) interest
and the largest interests in the
Employer, or
(iii) a five percent (5%) owner of the Employer
(taking into account ownership he would
be considered to have under Code Section
416(i)(1)), or
(iv) a one percent (1%) owner of the Employer
(taking into account ownership he would
be considered to have under Code Section
416(i)(1)) having annual compensation
from the Employer and/or an Affiliated
Employer during any calendar year (as
reported on income tax Form W-2 or its
equivalent) of more than One Hundred
Fifty Thousand Dollars ($150,000).
The term "compensation" as used above in this paragraph (1) shall
have the same meaning as in Code Section 415(c)(3), without regard
to: (A) Code Sections 125, 402(a)(8), and 402(h)(1)(B), and (B)
Code Section 403(b) in the case of contributions made by an
Affiliated Employer under a salary reduction agreement.
Any Employee who is not a key Employee is a nonkey Employee.
(2) For purposes of this Section, if a former Employee has not
performed any services for the Employer at any time during the
five (5) Plan Years immediately preceding the current Plan Year,
any account balance remaining hereunder for such former Employee
shall not be taken into account. Also, any account balance
attributable to deductible employee contributions (under Code
Section 219) or attributable to a rollover initiated by an
Employee from the plan of an employer that is not an Affiliated
Employer shall not be taken into account under this Section.
(3) The value of any account balance shall be determined as of the
most recent Valuation Date within the preceding Plan Year,
except that in the first Plan Year hereunder such account
balance shall be determined as of the most recent Valuation Date
within such first Plan Year. Such value shall include any
contributions allocable as of such date.
(4) The value of any account balance shall be increased to include
any payment thereof made hereunder prior to the Valuation Date
as of which such value is being determined, provided any such
payment was made within the five (5) Plan Years immediately
preceding the current Plan Year. If an account balance has been
fully paid out prior to such Valuation Date, but within the five
(5) Plan Years immediately preceding the current Plan Year, the
amount thereof shall be taken into account, except that such
amount shall not be taken into account hereunder if the paid out
amount was either (i) rolled over or transferred to another
plan of the Employer or Affiliated Employer or (ii) rolled over
or transferred to any other plan but not at the direction of the
Employee who had accrued such account.
(5) If an Employee or former Employee for whom an account balance was
maintained hereunder died prior to such Valuation Date, the
value, if any, taken into account hereunder with respect to such
individual shall include the sum of any payments made to him
prior to such Valuation Date and within the five (5) Plan Years
immediately preceding the current Plan Year, together with the
amount, as of such Valuation Date, of any remaining account
balance payable hereunder to the Beneficiary of such individual
plus the sum of any payments made to such Beneficiary hereunder
prior to such Valuation Date and within the five (5) Plan Years
immediately preceding the current Plan Year.
(6) If an Employee or former Employee (whether or not deceased) with
respect to whom an account balance would be taken into account,
as described above, was previously a key Employee, but as of the
last day of the immediately preceding Plan Year was no longer a
key Employee, then no account balance or payments thereof with
respect to him or his Beneficiary shall be taken into account in
making the top-heavy determinations described in this Section.
(7) The top-heavy status of this Plan, including the identification
of key Employees, will be determined as of each Plan Year's
determination date, which shall be (i) as to the first Plan
Year, the last day of such year and (ii) as to each subsequent
Plan Year, the last day of the immediately preceding Plan Year.
b. AGGREGATION WITH OTHER PLANS: The aggregation of this Plan with other
plans for purposes of determining top-heavy status shall be in accordance
with the following:
(1) REQUIRED AGGREGATION: If a key Employee under this Plan also
participates in another plan of the Employer or Affiliated
Employer which is qualified under Code Section 401(a) or which
is a simplified employee pension plan under Code Section 408(k),
or if this Plan and another plan must be aggregated so that
either this Plan or the other plan will meet the
antidiscrimination and coverage requirements of Code Section
401(a)(4) or 410, then this Plan and any such other plan will be
aggregated for purposes of determining top heaviness. This Plan
will automatically be deemed top-heavy if such required
aggregation of plans is top-heavy as a group and will
automatically be deemed not top-heavy if such required aggregate
of plans is not top-heavy as a group.
(2) PERMISSIVE AGGREGATION: Any other plan of the Employer or
Affiliated Employer which is qualified under Code Section 401(a)
or which is a simplified employee pension plan under Code
Section 408(k), and which is not in the required aggregation
referenced in (1) above, may be aggregated with this Plan (and
with any other plan(s) in the required aggregation group in (1)
above) for purposes of determining top heaviness if such
aggregation would continue to meet the antidiscrimination and
coverage requirements of Code Sections 401(a)(4) and 410. This
Plan will automatically be deemed not top-heavy if such
permissive aggregation of plans is not top-heavy as a group.
(3) DETERMINING AGGREGATE TOP-HEAVY STATUS: The top-heavy status of
the plans as a group is determined by aggregating the plans'
respective top-heavy determinations that are made as of
determination dates that fall within the same calendar year.
c. EFFECTS OF TOP-HEAVINESS
If this Plan becomes top-heavy, the following special provisions shall
apply except (i) in the case of an Employee hereunder who is also
covered by another top-heavy qualified defined contribution plan of an
Affiliated Employer, the top-heavy minimum allocation in (1) below shall
not apply if the top-heavy minimum allocation under such other plan is
applied to such Employee thereunder, and (ii) in the case of an Employee
hereunder who is also covered by a top-heavy qualified defined benefit
plan of an Affiliated Employer, the top-heavy minimum allocation in (1)
below shall not apply if the top-heavy minimum benefit under such other
plan is applied to such Employee thereunder, but if such top-heavy
minimum benefit is not applied to such Employee, then the top-heavy
minimum allocation in (2) below shall be applied except that the
percentage shall be five percent (5%).
(1) MINIMUM ALLOCATION: If any Employee is covered under this Plan
during any Plan Year when the Plan is top-heavy, he shall, during
such Plan Year, receive an allocated Employer contribution (other
than an elective contribution under Code Section 401(k)) at least
equal to a percentage of his considered compensation (defined
below) for such Plan Year, which percentage shall be the lesser
of:
(i) three percent (3%), and
(ii) the actual percentage that the allocation of Employer
contributions and forfeitures, including elective
contributions under Code Section 401(k), received
for such Plan Year by the key Employee receiving
the largest such allocation, represented as a
percentage of such key Employee's considered
compensation (defined below).
An Employee's considered compensation is the amount of compensation
he received from the Employer for such Plan Year (not in excess of
the dollar limitation in Section 1.2(f) hereof) reportable on
income tax Form W-2 or its equivalent.
(2) ADJUSTMENTS TO CODE SECTION 415 LIMITS: If this Plan is top-heavy
during any Plan Year, the combined plan limitations of Code
Section 415, as described in Section 8.1 hereof, shall be applied
for such Plan Year by substituting "One Hundred Percent (100%)"
for "One Hundred Twenty-Five Percent (125%)" wherever the latter
term appears in said Section 8.1 hereof.
ARTICLE XIII
ADMINISTRATION
13.1 APPOINTMENT OF COMMITTEE: The Corporation shall appoint a Committee
consisting of at least three (3) persons who shall be responsible for the
administration of this Plan. All action taken by the Committee shall be deemed
actions taken by the Corporation and the Corporation shall, alone, have
fiduciary responsibility in connection with such actions, except with respect to
willful misconduct or gross negligence. All usual and reasonable expenses of
the Committee may be paid in whole or in part by the Corporation, and any
expenses not paid by the Corporation shall be paid by the Trustee out of the
principal or income of the Trust. The members of the Committee shall not
receive compensation with respect to their services for the Committee. The
members of the Committee shall serve without bond or security for the
performance of their duties hereunder unless the applicable law makes the
furnishing of such bond or security mandatory or unless required by the
Corporation. The Corporation may pay the premiums on any bond secured under
this Section including the purchase of fiduciary liability insurance for any
person who becomes a fiduciary under this Plan.
13.2 COMMITTEE POWERS AND DUTIES: The Committee shall have such powers as
may be necessary to discharge its duties hereunder, including, but not by way of
limitation, the following powers and duties:
a. to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of
any benefits hereunder;
b. to prescribe rules for the operation of the Plan, including
procedures to be followed to obtain benefits and to appeal any
unfavorable Committee determinations, as described in Section 13.3
hereof;
c. to receive from the Employer and from Employees such
information as shall be necessary for the proper administration of the
Plan;
d. to employ an independent qualified public accountant to
examine the books, records, and any financial statements and schedules
which are required to be included in the annual report;
e. to file with the appropriate government agency (or agencies)
the annual report, plan description, summary plan description, and
other pertinent documents which may be duly requested;
f. to file such terminal and supplementary reports as may be
necessary in the event of the termination of the Plan;
g. to furnish each Employee and each Beneficiary receiving
benefits hereunder a summary plan description explaining the Plan;
h. to furnish any Employee or Beneficiary, who requests in
writing, statements indicating such Employee's or Beneficiary's total
account balances and nonforfeitable benefits, if any;
i. to furnish to an Employee a statement containing information
contained in a registration statement required by Section 6057(a)(2)
of the Code prior to the time prescribed by law to file such
registration if such statement contains information regarding the
Employee;
j. to maintain all records necessary for verification of
information required to be filed with the appropriate government
agency (or agencies);
k. to report to the Trustee all available information regarding
the amount of benefits payable to each Employee, the computations with
respect to the allocation of assets, and any other information which
the Trustee may require in order to terminate the Plan;
l. to delegate to one or more of the members of the Committee the
right to act in its behalf in all matters connected with the
administration of the Plan and Trust;
m. to delegate to any individual(s) such of the above powers and
duties as the Committee deems appropriate; and
n. to appoint or employ for the Plan any agents it deems
advisable, including, but not limited to, legal counsel.
The Committee shall have no power to add to, subtract from or modify any of
the terms of the Plan, nor to change or add to any benefits provided by the
Plan, nor to waive or fail to apply any requirements of eligibility for benefits
under the Plan. All rules and decisions of the Committee shall be uniformly and
consistently applied to all Employees in similar circumstances.
A majority of the members of the Committee shall constitute a quorum for
the transaction of business. No action shall be taken except upon a majority
vote of the Committee members. An individual shall not vote or decide upon any
matter relating solely to himself or vote in any case in which his individual
right or claim to any benefit under the Plan is particularly involved. If, in
any case in which a Committee member is so disqualified to act, and the
remaining members cannot agree, the Board of Directors of the Corporation will
appoint a temporary substitute member to exercise all the powers of the
disqualified member concerning the matter in which he is disqualified.
13.3 CLAIMS PROCEDURE: The Committee may prescribe procedures for
obtaining benefits and is required to provide a notice in writing to any person
whose claim for benefits under this Plan has been denied, setting forth (1) the
specific reasons for such denial, (2) the specific reference to pertinent Plan
provisions on which the denial is based, (3) a description of any additional
material or information necessary to the claimant to perfect the claim and an
explanation of why such material or information is necessary, and (4) an
explanation of the Plan's claim review procedure as described below, including
the name and address of the party to whom an appeal should be sent.
A claimant has the right to appeal a denial of claim by written application
to the Committee within sixty (60) days of notice of denial or, if no such
notice has been given, at the end of the expiration of a reasonable period of
time after the claim was filed. The claimant, or a duly authorized
representative, may review pertinent documents and may submit issues and
comments in writing to the Committee.
After the Committee reviews the claims appeal, a final decision shall be
made and communicated to the claimant within sixty (60) days of receipt of the
appeal by the Committee, unless special circumstances require an extension.
Such extension cannot extend beyond one hundred twenty (120) days after receipt
of the appeal by the Committee. The communication shall be set forth in writing
in a manner calculated to be understood by the claimant and shall identify the
reasons for the denial and shall reference any pertinent Plan provisions upon
which the denial is based.
13.4 COMMITTEE PROCEDURES: The Committee shall adopt such bylaws as it
deems desirable. The Committee shall elect one of its members as chairman and
shall elect a secretary who may, but need not, be a member of the Committee.
The Committee shall advise the Trustee of such elections in writing. The
Secretary of the Committee shall keep a record of all meetings and forward all
necessary communications to the Trustee.
13.5 AUTHORIZATION OF BENEFIT PAYMENTS: The Committee shall issue
directions to the Trustee concerning all benefits which are to be paid from the
Trust Fund pursuant to the provisions of the Plan. The Committee shall keep on
file, in such manner, as it may deem convenient or proper, all reports from the
Trustee.
13.6 PAYMENT OF EXPENSES: All expenses incident to the administration,
termination or protection of the Plan and Trust, including but not limited to,
actuarial, legal, accounting, and Trustee's fees, shall be paid by the Employer,
or if not paid by the Employer, shall be paid by the Trustee from the Trust Fund
and, until paid, shall constitute a first and prior claim and lien against the
Trust Fund. Any expenses paid by the Corporation may be subject to
reimbursement by Employers for their proportionate shares.
13.7 UNCLAIMED BENEFITS: During the time when a benefit hereunder is
payable to any distributee, the Committee, upon request by the Trustee, or at
its own instance, shall mail by registered or certified mail to such
distributee, at his last known address, a written demand for his then address,
or for satisfactory evidence of his continued life, or both. If such
information is not furnished to the Committee within one year from the mailing
of such demand, then the Committee may, in its sole discretion, after the proper
statutory period, allow such unclaimed benefits to escheat to the proper
governmental unit under the applicable escheat law.
13.8 INDEMNITY: The Employer indemnifies and saves harmless any member of
the Board of Directors of the Employer and any Employee of the Employer from and
against any and all loss resulting from liability to which any such person may
be subjected by reason of any conduct (except willful or reckless misconduct) in
a fiduciary capacity under this Plan or Trust, or both, including all expenses
reasonably incurred in such person's defense, in case the Employer fails to
provide such defense. The indemnification provisions of this Section shall not
relieve any such person of any liability he may have under ERISA for breach of a
fiduciary duty.
ARTICLE XIV
TRUST FUND
14.1 ESTABLISHMENT OF TRUST FUND: A Trust Fund shall be established for
the purpose of receiving contributions, and paying benefits, under this Plan. A
Trustee (or Trustees) shall be appointed under the terms of a trust agreement to
administer the Trust Fund in accordance with the terms of such trust agreement.
14.2 PAYMENT OF CONTRIBUTIONS TO TRUST FUND: All contributions under this
Plan shall be paid to the Trustee and shall be held, invested and reinvested by
the Trustee in accordance with the terms of the trust agreement. All property
and funds of the Trust Fund, including income from investments and from all
other sources, shall be retained for the exclusive benefit of Employees, as
provided in the Plan, and shall be used to pay benefits to Employees or their
beneficiaries, or to pay expenses of administration of the Plan and Trust Fund,
except as provided in Section 18.4 hereof.
14.3 BONDING OF TRUSTEE: No Trustee shall be required to furnish any bond
or security for the performance of its powers and duties hereunder unless the
applicable law makes the furnishing of such bond or security mandatory, in which
event the Corporation shall pay the premium on any bond secured hereunder.
ARTICLE XV
ADOPTION AND WITHDRAWAL
BY OTHER ORGANIZATIONS
15.1 PROCEDURE FOR ADOPTION: Any corporation or other organization with
employees, now in existence or hereafter formed or acquired, which is not
already an Employer under this Plan and which is otherwise legally eligible,
may, in the future, with the consent and approval of the Corporation, by formal
resolution of its own board or governing authority, adopt the Plan hereby
created and the related Trust, for all or any classification of persons in its
employment, and thereby, from and after the specified effective date become an
Employer under this Plan. Such adoption shall be effectuated by and evidenced
by a formal designation resolution of the Corporation, and by such formal
resolution of the adopting organization consented to by the Corporation. The
adoption resolution may contain such specific changes and variations in Plan or
Trust terms and provisions applicable to such adopting Employer and its
Employees, as may be acceptable to the Corporation and the Trustee. However,
the sole, exclusive right of any other amendment of whatever kind or extent, to
the Plan or Trust is reserved by the Corporation. The adoption resolution shall
become, as to such adopting organization and its employees, a part of this Plan,
as then amended or thereafter amended, and the related Trust. It shall not be
necessary for the adopting organization to sign or execute the original or the
amended Plan and Trust documents. The effective date of the Plan for any such
adopting organization shall be that stated in the resolution of adoption, and
from and after such effective date such adopting organization shall assume all
the rights, obligations and liabilities of an individual Employer entity
hereunder and under the Trust. The administrative powers and control of the
Corporation, as provided in the Plan and Trust, including the sole right to
amendment, and of appointment and removal of the Committee and the Trustee and
their successors, shall not be diminished by reason of the participation of any
such adopting organization in the Plan and Trust.
15.2 WITHDRAWAL: Any participating Employer by action of its Board of
Directors or other governing authority and notice to the Corporation and
Trustee, may withdraw from the Plan and Trust at any time without affecting
other Employers not withdrawing, by complying with the provisions of the Plan
and Trust. A withdrawing Employer may arrange for the continuation by itself or
its successor, of this Plan and Trust in separate form for its own Employees,
with such amendments, if any, as it may deem proper, and may arrange for
continuation of the Plan and Trust by merger with an existing plan and trust,
and transfer of Trust assets. The Corporation may, in its absolute discretion,
terminate an adopting Employer's participation at any time when in its judgment
such adopting Employer fails or refuses to discharge its obligations under the
Plan.
ARTICLE XVI
AMENDMENTS
16.1 RIGHT TO AMEND: The Board of Directors of the Corporation (or other
body duly authorized by such Board) reserves the right to make from time to time
any amendment or amendments to this Plan which do not permit reversion of any
part of the Trust Fund to the Employers except as provided in Section 18.4 and
which do not cause any part of the Trust Fund to be used for, or diverted to,
any purpose other than the exclusive benefit of Employees included in this Plan
and their Beneficiaries, other than with respect to allowances of expenses of
administration as provided herein, and which do not, directly or indirectly,
reduce any Member's account balance unless such amendment is required in order
to maintain the Plan's qualified status under Code Section 401(a).
The participation in the Plan by other Employers shall not limit the power
reserved to the Corporation to amend the Plan as set out in this Article XV.
Each such amendment shall be binding on all Employers to the extent accepted by
them. Acceptance of each such Employer shall be presumed, but each such
Employer may, as provided in Section 13.2 hereof, withdraw from participation.
ARTICLE XVII
WITHDRAWAL AND TERMINATION
17.1 EMPLOYER WITHDRAWAL: An Employer may at any time, by adoption of a
resolution, withdraw from the Plan with respect to any or all of the Employees
employed by said Employer.
Upon an Employer's liquidation, bankruptcy, insolvency, sale,
consolidation, or merger to or with another organization which is not an
Employer hereunder, or upon an adjudication or other official determination of a
court of competent jurisdiction or other public authority pursuant to which a
conservator, receiver, or other legal custodian is appointed for the purpose of
operation or liquidation of an Employer, such Employer (or its successor) will
automatically be withdrawn from this Plan with respect to all of its Employees,
unless the Corporation and such Employer (or its successor) agree to its
continued participation hereunder.
Any such withdrawal of an Employer from this Plan will be carried out in a
manner intended to meet the requirements of Section 401(a) of the Internal
Revenue Code. The Corporation may require that an advance determination letter
be obtained from the Internal Revenue Service approving the terms of any such
withdrawal.
Upon the consolidation or merger of two (2) or more of the Employers under
this Plan with each other, no such withdrawal will occur, but the surviving
Employer or organization shall succeed to all the rights and duties under the
plan and trust of the Employers involved.
17.2 TRANSFERS OF PLAN ASSETS AND PLAN MERGERS: The Plan and Trust shall
not be merged or consolidated with, nor shall any Plan assets or liabilities be
transferred to, any other plan, unless either (i) each Participant in the Plan
(if the Plan then terminated) receives a benefit immediately after such merger,
consolidation, or transfer, which is equal to or greater than the benefit he
would have been entitled to receive immediately before such merger,
consolidation, or transfer (if the Plan had then terminated) or (ii) the
conditions in (i) are deemed to be met due to compliance with the procedures
set forth in Treasury Regulation 1.414(1)-1 regarding plan mergers and
transfers.
17.3 PLAN TERMINATION: The Corporation may at any time, by adoption of a
resolution, terminate this Plan with respect to itself and all other Employers
hereunder. This Plan shall automatically terminate if all Employers cease to
exist and no successor continues the Plan.
A partial termination of this Plan will occur if required under the
qualification requirements of Section 401(a) of the Code.
17.4 DISTRIBUTION ON TERMINATION: Upon termination, or partial
termination, of the Plan, the proportionate interests of the affected Members
and their Beneficiaries shall be distributed after provision is made for the
expenses of administration, and termination, except that no PAYSOP Account
contribution may be distributed until such contribution has been held in the
Plan (including the Previous Plan) for at least 84 months.
ARTICLE XVIII
GENERAL PROVISIONS
18.1 NONGUARANTEE OF EMPLOYMENT: Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and Employee, or as a
right of any Employee to be continued in the employment of an Employer, or as a
limitation of the right of an Employer to discharge any of its Employees, with
or without cause.
18.2 MANNER OF PAYMENT: Wherever and whenever it is herein provided for
payments or distributions to be made, whether in money or otherwise, said
payments or distributions shall be made directly into the hands of the Member,
his Beneficiary, his administrator, executor or guardian, as the case may be.
Deposit to the credit of a Member in any bank or trust company selected by a
Member or Beneficiary hereunder shall be deemed payment into his hands, and
provided further, that in the event any person otherwise entitled to receive any
payment or distribution shall be a minor or an incompetent, such payment or
distribution may be made to his guardian or other person as may be determined by
the Committee.
18.3 NONALIENATION OF BENEFITS: Benefits payable under this Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, prior to being received by the person
entitled to the benefit under the terms of the Plan. Any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose
of any right to benefits payable hereunder shall be void. The Trust Fund shall
not in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any person entitled to benefits hereunder.
None of the unpaid Plan benefits or Trust assets shall be considered an asset of
the Member in the event of his insolvency or bankruptcy.
Notwithstanding the foregoing, the Committee may approve payment to an
alternate payee based upon any "qualified domestic relations order" as defined
in Code Section 414(p), and such payment shall not be deemed a prohibited
alienation of benefits.
18.4 AMOUNTS RETURNABLE TO AN EMPLOYER: In no event shall an Employer
receive any amounts from the Trust, except such amounts, if any, as set forth
below:
a. In the event of a contribution made by an Employer by a
mistake of fact, such contribution may be returned to such Employer
within one year after payment thereof.
b. If an Employer's determination letter issued by the District
Director of Internal Revenue is an initial determination letter as to
such Employer and is to the effect that the Plan and Trust herein set
forth or as amended prior to the receipt of such letter do not meet
the applicable requirements of the Internal Revenue Code of 1986, such
Employer shall be entitled at its option to withdraw, within one year
of the receipt of such letter, all contributions made on and after its
effective date, in which event the Plan and Trust shall then terminate
as to such Employer and all rights of the Employees shall be those as
if the Plan had never been adopted.
c. Each contribution hereunder is conditioned upon the
deductibility of such contribution under Section 404 of the Code and
shall be returned to an Employer within one year if such deduction is
disallowed (to the extent of the disallowance).
18.5 GOVERNING LAW: This Plan and each of its provisions shall be
construed and their validity determined by the application of the laws of the
State of Texas, except to the extent such law is preempted by Federal statute.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing instrument comprising Justin Industries, Inc. Employee Stock Ownership
Plan (As Restated January 1, 1989), JUSTIN INDUSTRIES, INC., the Corporation,
has caused its corporate seal to be affixed hereto and these presents to be duly
executed in its name and behalf by its proper officers thereunto authorized this
15 day of December, 1993.
ATTEST: JUSTIN INDUSTRIES, INC.
/S/ JON M. BENNETT By /S/ J. T. DICKENSON
Secretary Name: J. T. DICKENSON
Title: PRESIDENT
(CORPORATE SEAL)
JUSTIN INDUSTRIES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
TRUST AGREEMENT
EFFECTIVE: OCTOBER 1, 1987
PREAMBLE
THIS TRUST AGREEMENT (the "Agreement") is made between Justin Industries, Inc.,
a corporation organized and existing under the State of Texas (hereinafter
referred to as the "Corporation"), and Texas Commerce Bank-Fort Worth, a banking
association, acting in its fiduciary capacity as Trustee (hereinafter referred
to as the "Trustee");
WITNESSETH
WHEREAS, the Corporation has adopted under a separate instrument, "Justin
Industries, Inc. Employee Stock Ownership Plan" and the "Justin Industries, Inc.
Employee Ownership Trust" established thereunder, being hereinafter, as it may
be amended from time to time, referred to as the "Plan" and/or the "Trust",
WHEREAS, the Previous Trust Agreement in effect as the funding medium for such
Plan and Trust (or for the predecessor to such Plan and Trust) is to be replaced
in its entirety with this Trust Agreement; and
WHEREAS, the Trustee has been duly appointed by the Board of Directors of the
Corporation;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and contingent upon the continued qualification of the Plan
and Trust under Section 401(a) of the Code, it is mutually covenanted and agreed
as follows;
1. All contributions under this Plan and Trust shall be paid to the Trustee
and shall be held, invested and reinvested by the Trustee. All property
and funds of the Trust Fund, including income from investments and from all
other sources, shall be retained for the exclusive benefit of Participants
or their Beneficiaries, or to pay expenses of administration of the Plan
and Trust to the extent not paid by the Corporation. However, payment of
expenses of the Plan and Trust relating to the PAYSOP Contribution shall be
limited in accordance with Code Section 409(i).
2. The Trustee shall not be required to furnish any bond or security for the
performance of its powers and duties hereunder unless the applicable law
makes the furnishing of such bond or security mandatory, in which event the
Corporation shall pay the premium on any bond secured hereunder.
3. Prior to the holding of each annual or special meeting of holders of stock
of the Corporation, the Trustee will send to all Participants the proxy
statement for such meeting, together with a form to be returned to the
Trustee. This form will set forth instructions as to the manner of voting
the Corporation Stock in the Participant's Individual Account. Upon
receipt of the instructions from the Participant, the Trustee will vote (or
exercise dissenter's rights when applicable) such Corporation Stock in
accordance with the instructions of the Participant. If, within five days
prior to such meeting, the Trustee does not receive instructions, the
Trustee will vote (or exercise dissenter's rights, where applicable) the
Corporation Stock in such manner as the Committee shall direct.
The Trustee shall vote (or exercise dissenter's right, when applicable) all
Corporation stock held by it in the suspense account under Section 6.1(a)
of the Plan, as well as all other securities that it holds, in such manner
as the Committee shall direct.
4. This Agreement and each of its provisions shall be construed and their
validity determined by the application of the laws of the State of Texas,
except to the extent such law is preempted by Federal statute.
This Agreement may be executed in any number of counterparts, each of which
shall be considered an original, and no other counterpart need be produced.
IN WITNESS WHEREOF, and as conclusive evidence of their acceptance of this
Agreement, the parties hereunder have caused this Trust agreement to be duly
executed on this date September 23, 1987.
ATTEST: JUSTIN INDUSTRIES, INC.
/S/ ROGER ZIMMERMAN By /S/ ERNEST BLANK
Ernest Blank, President
A S T H E C O R P O R A T I O N
ATTEST: TEXAS COMMERCE BANK-FORT WORTH
/S/ JOE BENSON, JR. /S/ JIM PALMER
Vice President and Trust Officer
A S T H E T R U S T E E
(CORPORATE SEAL)
STATE OF TEXAS )
) ss.
COUNTY OF TARRANT )
BEFORE ME, the undersigned, a Notary Public in and for said County and State, on
this 23rd day of September, 1987, personally appeared Jim Palmer, to me known to
be the identical person who subscribed the name of Texas Commerce Bank-Fort
Worth, as Trustee, to the foregoing instrument as its Vice President and Trust
Officer, and acknowledged to me that he executed the same as his free and
voluntary act and deed and as the free and voluntary act and deed of such
corporation, for the uses and purposes therein set forth.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, the day and year last above written.
/S/ CYNTHIA R. JEANES
Notary Public
My Commission Expires:
5/11/91
(Notary Seal)
