As filed with the Securities and Exchange Commission on August 7, 1997
Registration No. ________________
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
_______________________________
AEROQUIP-VICKERS, INC.
(Exact Name of Registrant as Specified in Its Charter)
OHIO 34-4288310
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
3000 Strayer, Maumee, Ohio 43537-0050
(Address of Principal Executive Offices Including Zip Code)
AEROQUIP INOAC COMPANY RETIREMENT
SAVINGS AND PROFIT-SHARING PLAN
(Full Title of the Plan)
James E. Kline
Vice President and General Counsel
Aeroquip-Vickers, Inc.
3000 Strayer
Maumee, Ohio 43537-0050
(Name and Address of Agent For Service)
(419) 867-2200
(Telephone Number, Including Area Code, of Agent For Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================
<S> <C> <C> <C> <C>
Proposed Proposed
Title of Maximum Maximum Aggregate Amount of
Securities to Amount to be Offering Price Offering Registration
be Registered Registered (1) Per Share (2) Price (2) Fee
______________________________________________________________________________
Common Shares, 75,000 $54.41 $54.41 $1,236.59
$5 par value
per share
==============================================================================
<FN>
(1) Pursuant to Rule 416(c) of the Securities Act of 1933 ("Securities Act"), this Registration
Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the
Aeroquip Inoac Company Retirement Savings and Profit-Sharing Plan (the "Plan").
(2) Estimated solely for calculating the amount of the registration fee, pursuant to paragraphs (c) and
(h) of Rule 457 of the General Rules and Regulations under the Securities Act, on the basis of the
average of the high and low sale prices of such securities on the New York Stock Exchange on July
31, 1997, within five business days prior to filing.
</FN>
</TABLE>
Exhibit Index Appears on Page 7
<PAGE>
Part II
Item 3. Incorporation of Documents by Reference
The following documents previously filed by Aeroquip-Vickers, Inc.,
formerly named TRINOVA Corporation (the "Registrant"), or the Plan with the
Securities and Exchange Commission (the "Commission") are incorporated herein
by reference: (1) the Annual Report on Form 10-K for the fiscal year ended
December 31, 1996; (2) the Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997; (3) the Current Report on Form 8-K filed by the
Registrant on April 25, 1997; (4) the description of the Registrant's Common
Shares, par value $5 per share (the "Common Shares") contained in the
Registration Statement filed with the Commission pursuant to Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act") for purposes of
registering such securities thereunder, and any amendments and reports filed
for the purpose of updating that description; (5) description of the
Registrant's Common Share Rights contained in the Registration Statement on
Form 8-A filed January 27, 1989; and (6) the Plan's Annual Report on Form 11-K
for the year ended December 31, 1996 filed simultaneously (in paper format)
with this Registration Statement.
All documents subsequently filed by the Registrant and the Plan pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which de-registers all securities then remaining unsold shall be
deemed to be incorporated herein by reference and to be part hereof from the
date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Under Article IV of the Registrant's Amended Code of Regulations, by
authority of Section 1701.13(E) of the Ohio Revised Code, the Registrant is
obligated to indemnify directors, officers and salaried employees against
liabilities, fines, penalties or amounts paid in settlement actually and
reasonably incurred in connection with the defense of any pending or
threatened action, suit or proceeding to which they are or may be a party by
reason of service to or at the request of the Registrant provided that they
acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Registrant and, for certain claims, that
certain other determinations have been made. A copy of the Amended Code of
Regulations was filed as an Exhibit 3 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 and is incorporated herein by
reference. Section 1701.13(E) of the Ohio Revised Code itself provides for
mandatory indemnification of directors and officers of an Ohio corporation
under certain circumstances.
The Registrant also maintains directors' and officers' liability
insurance which pays, subject to policy limitations and retentions, for loss
arising from any claim against a director or officer of the Registrant or any
of its wholly-owned subsidiaries by reason of a wrongful act done in his or
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<PAGE>
her respective capacity, including breaches of a wrongful act done in his or
her respective capacity, including breaches of duty, neglect, errors,
misstatements, misleading statements and omissions. An act brought about or
contributed to by dishonesty is excluded, as is an accounting for profits made
from the purchase or sale of the Registrant's securities within the meaning of
Section 16(b) of the Securities Exchange Act of 1934.
Item 7. Exemption from Registration Claims
Not Applicable.
Item 8. Exhibits
4(a) Amended Articles of Incorporation (amended April 17, 1997) of the
Registrant (filed as Exhibit 3 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997 and
incorporated herein by reference).
4(b) Amended Code of Regulations (amended April 21, 1988) of the
Registrant (filed as Exhibit 3 to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1993 and incorporated
herein by reference).
4(c) The Plan.
4(d) First Amendment to the Plan.
4(e) Second Amendment to the Plan.
4(f) Third Amendment to the Plan.
4(g) Rights Agreement, dated January 26, 1980, by and between the
Registrant (formerly named TRINOVA Corporation) and First Chicago
Trust Company of New York (filed as Exhibit 2 to Form 8-A filed
January 27, 1989 and incorporated herein by reference), as amended
by the First Amendment to Rights Agreement (filed as Exhibit 5 to
Form 8 filed on July 1, 1992 and incorporated herein by
reference).
5 Internal Revenue Service Determination Letter
23 Consent of Independent Auditors.
24 Power of Attorney.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
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<PAGE>
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 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or
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 in the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Maumee, State of Ohio, on August 7,
1997.
AEROQUIP-VICKERS, INC.
By: /S/ DARRYL F. ALLEN
Darryl F. Allen, Chairman of the
Board, President
and Chief Executive Officer
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 date indicated.
Signature Title Date
/S/DARRYL F. ALLEN Director, Chairman of the Board, August 7, 1997
Darryl F. Allen President and Chief Executive
Officer
(Principal Executive Officer)
/S/ DAVID M. RISLEY Vice President-Finance and August 7, 1997
David M. Risley Chief Financial Officer
(Principal Financial Officer)
/S/ GREGORY R. PAPP Corporate Controller August 7, 1997
Gregory R. Papp (Principal Accounting Officer)
Purdy Crawford, Director; Joseph C. Farrell, Director; David R. Goode,
Director; Paul A. Ormond, Director; John P. Reilly, Director; William R.
Timken, Jr., Director.
August 7, 1997 By: /S/ JAMES E. KLINE
James E. Kline
Attorney-in-Fact
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<PAGE>
The Plan. Pursuant to the requirement of the Securities Act of 1933,
the Plan has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Maumee,
State of Ohio, on the 7th day of August, 1997.
AEROQUIP INOAC COMPANY RETIREMENT
SAVINGS AND PROFIT SHARING PLAN
By: Administrative Committee
By: /S/ ED BROWNLEE
Ed Brownlee
Committee Member
By: /S/ JAN HUGHETT
Jan Hughett
Committee Member
By: /S/ MIKE BEEBE
Mike Beebe
Committee Member
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE NO.
4(a) Amended Articles of Incorporation (amended Incorporated
April 17, 1997) of the Registrant (filed as herein by
Exhibit 3 to the Registrant's Quarterly Report reference
on Form 10-Q for the quarter ended March 31,
1997 and incorporated herein by reference).
4(b) Amended Code of Regulations (amended April 21, Incorporated
1988) of the Registrant (filed as Exhibit 3 herein by
to the Registrant's Annual Report on Form 10-K reference
for the year ended December 31, 1993 and
incorporated herein by reference).
4(c) The Plan. 8
4(d) First Amendment to the Plan. 89
4(e) Second Amendment to the Plan. 93
4(f) Third Amendment to the Plan. 100
4(g) Rights Agreement, dated January 26, 1980, by Incorporated
and between the Registrant (formerly named herein by
TRINOVA Corporation) and First Chicago Trust reference
Company of New York (filed as Exhibit 2 to
Form 8-A filed January 27, 1989 and
incorporated herein by reference), as amended
by the First Amendment to Rights Agreement
(filed as Exhibit 5 to Form 8 filed on July 1,
1992 and incorporated herein by reference).
5 Internal Revenue Service Determination Letter. 101
23 Consent of Independent Auditors. 103
24 Power of Attorney. 104
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EXHIBIT 4(c)
AEROQUIP INOAC COMPANY
RETIREMENT SAVINGS AND
PROFIT SHARING PLAN AND TRUST
(formerly known as Sterling Inoac
Company Retirement Savings and Profit
Sharing Plan and Trust)
As amended and restated
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS 2
1.01 Account............................................. 2
1.02 Accounting Date..................................... 2
1.03 Act................................................. 2
1.04 Administrative Committee............................ 2
1.05 Anniversary Date.................................... 2
1.06 Annual Compensation................................. 2
1.07 Base Compensation................................... 4
1.08 Base Contribution Percentage........................ 4
1.09 Break in Service.................................... 4
1.10 Code................................................ 5
1.11 Company............................................. 5
1.12 Defined Contribution Plan........................... 5
1.13 Employee............................................ 5
1.14 Employer............................................ 6
1.15 Employment Commencement Date........................ 6
1.16 Entry Date.......................................... 6
1.17 Excess Aggregate Contributions...................... 6
1.18 Excess Compensation................................. 6
1.19 Excess Contribution Percentage...................... 6
1.20 Excess Tax Deferred Contributions................... 6
1.21 Former Participant.................................. 7
1.22 Full-Time Employee.................................. 7
1.23 Fund................................................ 7
1.24 Highly Compensated Employee......................... 7
1.25 Hour of Service..................................... 9
1.26 Limitation Year..................................... 10
1.27 Named Fiduciary..................................... 10
1.28 Nonhighly Compensated Employee...................... 10
1.29 Normal Retirement Age............................... 10
1.30 Normal Retirement Date.............................. 10
1.31 Participant......................................... 10
1.32 Partnership Committee............................... 11
1.33 Part-Time Employee.................................. 11
1.34 Period of Service................................... 11
1.35 Period of Severance................................. 12
1.36 Plan................................................ 12
1.37 Plan Year........................................... 12
1.38 Qualified Election.................................. 12
1.39 Reemployment Commencement Date...................... 12
1.40 Transfer Date....................................... 13
1.41 Trustee............................................. 13
1.42 Trust Agreement..................................... 13
1.43 Trust Fund.......................................... 13
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ARTICLE II - ADMINISTRATION...................................... 14
2.01 Allocation of Responsibility for Plan
Administration................................ 14
2.02 Administrative Committee............................ 15
2.03 Investment of Plan Assets........................... 18
2.04 Plan Fiduciaries and Fiduciary Obligations.......... 19
ARTICLE III -
CONTRIBUTIONS.............................................. 21
3.01 Contributions by Employer........................... 21
(a) Profit Sharing Contributions................. 21
(b) Tax Deferred Contributions......... ......... 21
(c) Matching Contributions....................... 21
3.02 Tax Deferred Contributions.......................... 22
3.03 Rollover Contributions and Direct Transfers......... 23
3.04 Time for Payment of Contributions................... 24
3.05 Reversion of Funds to Employer...................... 24
3.06 Limitations on Annual Additions..................... 25
3.07 Limitation of Benefits Under All Plans.............. 28
ARTICLE IV - ELIGIBILITY......................................... 30
4.01 Eligibility......................................... 30
4.02 Transfer of Employment.............................. 31
4.03 Cessation of Participation.......................... 31
4.04 Eligibility Upon Reemployment....................... 31
ARTICLE V - PARTICIPANT ACCOUNTS................................. 32
Separate Accounts.......................................... 32
(a) Employer Contributions Account............... 32
(b) Tax Deferred Contributions Account........... 32
(c) Matching Contributions Account............... 32
(d) Roll-In Contributions Account................ 32
ARTICLE VI - ALLOCATION.......................................... 33
6.01 Annual Allocations.................................. 33
6.02 Nondiscrimination Requirements for Tax Deferred
Contributions................................. 34
6.03 Nondiscrimination Requirements for Matching
Contributions................................. 36
6.04 Reports............................................. 38
ARTICLE VII - INVESTMENT OF THE TRUST FUND....................... 39
7.01 Investment Funds.................................... 39
(a) Equity Fund.................................. 39
(b) Fixed Income Fund............................ 39
(c) Capital Preservation Fund.................... 39
(d) Money Market Fund............................ 39
ARTICLE VIII - VALUATION OF TRUST FUND........................... 41
ARTICLE IX - RETIREMENT.......................................... 42
9.01 Normal Retirement................................... 42
9.02 Late Retirement..................................... 42
ARTICLE X - DISTRIBUTIONS AND BENEFITS TO
PARTICIPANTS............................................... 43
10.01 Upon Normal Retirement or Disability................ 43
10.02 Upon Death.......................................... 43
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10.03 Upon Termination of Employment...................... 44
10.04 Forfeiture.......................................... 46
10.05 Certification by Administrative Committee........... 48
10.06 Method and Medium of Payment........................ 48
10.07 Distribution Requirements........................... 49
(a) Limits on Distribution Periods............... 49
(b) Determination of Amount to be Distributed
Each Year.............................. 50
(i) Individual Account..................... 50
(c) Death Distribution Provisions................ 51
(i) Distribution Beginning Before Death.... 51
(ii) Distribution Beginning After Death..... 52
(d) Definitions.................................. 53
(i) Applicable Life Expectancy............. 54
(ii) Designated Beneficiary................. 54
(iii) Distribution Calendar Year............. 54
(iv) Life Expectancy........................ 55
(v) Former Participant's Benefit........... 55
(A) Valuation Date.................. 55
(B) Exception for Second Distribution
Calendar Year............. 55
(vi) Required Beginning Date................ 56
(A) General Rule.................... 56
(B) Transitional Rules.............. 56
(C) 5 Percent Owner................. 56
(D) Change in
Ownership........................ 57
10.08 Latest Date for Distribution of Benefits............ 57
10.09 Transfer of Accounts................................ 57
10.10 Withdrawals......................................... 58
10.11 Loans to Participants............................... 61
10.12 Distribution of Excess Tax Deferred
Contributions................................. 63
10.13 Restrictions on Distributions of Tax Deferred
Contributions and Matching Contributions...... 64
ARTICLE XI - TRUST............................................... 66
11.01 Acknowledgment of Fiduciary Status.................. 66
11.02 Terms of the Indenture to Govern.................... 66
11.03 Allocation of Funds................................. 66
11.04 Investment of Funds................................. 66
11.05 Valuation of Assets................................. 68
11.06 Distributions by Trustee............................ 69
11.07 Powers of Trustee................................... 69
11.08 Resignation and Replacement......................... 70
11.09 Bond and Expenses................................... 71
11.10 Liability........................................... 71
11.11 Fiduciary Duty...................................... 71
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11.12 Taxes............................................... 72
11.13 Termination......................................... 72
11.14 Statement of Accounts............................... 72
ARTICLE XII - AMENDMENT AND TERMINATION OF THE PLAN.............. 73
12.01 Amendment........................................... 73
12.02 Plan Termination or Discontinuance of
Contributions................................. 74
ARTICLE XIII -
MISCELLANEOUS.............................................. 75
13.01 Participants' Rights................................ 75
13.02 Prohibition Against Reversion....................... 75
13.03 Assignment or Alienation of Benefits................ 75
13.04 Third Party Immunity................................ 76
13.05 Delegation of Authority by Employer................. 76
13.06 Construction of Plan................................ 76
13.07 Gender and Number....................................77
13.08 Claims Procedure.................................... 77
13.09 Plan Contingent Upon Commissioner's Approval........ 78
13.10 Merger, Consolidation, or Transfer of Assets........ 79
13.11 Allocation of Responsibilities...................... 79
13.12 Headings............................................ 80
ARTICLE XIV - TOP-HEAVY
PROVISIONS................................................. 81
14.01 Determination of Top-Heavy Status................... 81
14.02 Consequences of Top-Heavy Status.................... 81
(a) Vesting...................................... 81
(b) Benefits..................................... 82
(c) Compensation Limitation...................... 83
14.03 Definitions......................................... 83
(a) Account Balance.............................. 83
(b) Aggregation Group............................ 84
(c) Compensation................................. 84
(d) Determination Date........................... 85
(e) Key Employee................................. 85
(f) Non-Key Employee............................. 86
(g) Permissive Aggregation Group................. 86
(h) Present Value of the Accrued Benefit......... 86
(i) Required Aggregation Group................... 86
(j) Top-Heavy Group.............................. 87
14.04 Miscellaneous....................................... 87
14.05 Super Top-Heavy..................................... 87
14.06 Consequences of Super Top-Heavy Status.............. 88
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AEROQUIP INOAC COMPANY
RETIREMENT SAVINGS AND
PROFIT SHARING PLAN AND TRUST
The Sterling Inoac Company Retirement Savings and Profit Sharing
Plan (now known as the Aeroquip Inoac Company Retirement Savings and Profit
Sharing Plan) was established by Sterling Inoac Company (now known as Aeroquip
Inoac Company) effective July 1, 1989, to enable eligible employees to build
security for their financial needs and to give additional incentive to such
employees to do so by providing for distribution of a share of the profits of
the sponsor.
Amendment of the Plan by restatement is now deemed desirable.
Accordingly, the Plan is hereby amended and restated to provide as follows:
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ARTICLE I
DEFINITIONS
1.01 "Account" means any or all (as required by the context of
the accounts described in article V.
1.02 "Accounting Date" means March 31, June 30, September 30,
December 31, and any other date declared by the Administrative Committee. Any
date so declared shall be applied for all purposes the same as the Accounting
Dates specified herein, including, but not limited to, the valuation of the
Trust Fund.
1.03 "Act" means the Employee Retirement Income Security Act of
1974, as amended.
1.04 "Administrative Committee" means the Administrative
Committee established pursuant to article II hereof, including any person or
persons to whom responsibility is delegated by such committee.
1.05 "Anniversary Date" means the last day of each Plan Year.
1.06 "Annual Compensation" means a Participant's wages, salaries
and fees for professional services, and other amounts received for personal
service actually rendered in the course of employment with the Employer
(including, but not limited to, commissions paid to salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses), but excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not included in 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 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;
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(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).
For years beginning after December 31, 1988, the Annual
Compensation of each Participant taken into account under this Plan for any
year for the purposes of determining contributions or benefits shall not
exceed $200,000. This limitation shall be adjusted by the Secretary of the
Treasury at the same time and in the same manner as under section 415(d) of
the Code, except that the dollar increase in effect on January 1 of any
calendar year is effective for Plan Years beginning in such calendar year and
the first adjustment to the $200,000 limitation is effective on January 1,
1990. If the Plan determines Annual Compensation over a period of time that
contains fewer than 12 calendar months, the Annual Compensation limit shall be
an amount equal to the Annual Compensation limit for the calendar year in
which the compensation period begins multiplied by the ratio obtained by
dividing the number of full months in the period by 12.
For purposes of applying the $200,000 limit (as adjusted), the
family unit of a Highly Compensated Employee will be treated as a single
Employee with one compensation, and the $200,000 limit will be allocated among
the members of the family unit in proportion to each member's compensation
(except for the purpose of determining Annual Compensation below the Plan's
integration level). For this purpose, a family unit is the Highly Compensated
Employee, such person's spouse and lineal descendants who have not attained
age 19 before the close of the year.
1.07 "Base Compensation" means that portion of a Participant's
Annual Compensation which is not in excess of the Social Security Taxable Wage
Base in effect as of the beginning of the Plan Year.
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1.08 "Base Contribution Percentage" means the percentage of
Annual Compensation contributed under the Plan with respect to each
Participant's Base Compensation.
1.09 "Break in Service" means a Period of Severance of at least
12 months. However, if an individual is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a Break in
Service. For purposes hereof, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the individual,
(2) by reason of the birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring for such child
for a period beginning immediately following such birth or placement..
1.10 "Code" means the Internal Revenue Code of 1986, as amended.
1.11 "Company" means any corporation which is a member of a
controlled group of corporations [as defined in section 414(b) of the Code]
which includes the Employer; any trade or business (whether or not
incorporated) which is under common control [as defined in section 414(c) of
the Code] with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group [as defined in section 414(m)
of the Code] which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to regulations under section 414(o) of
the Code.
1.12 "Defined Contribution Plan" means a pension plan or profit
sharing plan which provides for an individual account for each Participant and
for benefits based solely upon the amount contributed to each individual
account, and any income, expenses, gains and losses, and any forfeitures of
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individual accounts which may be allocated to such Participant's individual
account.
1.13 "Employee" means any person whose legal status is that of a
common-law employee, including leased employees within the meaning of section
414(n)(2) of the Code. However, notwithstanding the foregoing, if leased
employees constitute less than 20 percent of the Employer's nonhighly compen-
sated work force within the meaning of section 414(n)(1)(C)(ii) of the Code,
the term "Employee" shall not include those leased employees covered by a plan
described in section 414(n)(5) of the Code.
1.14 "Employer" means Aeroquip Inoac Company (formerly known as
Sterling Inoac Company) and any other entity adopting this Plan with the
approval of Aeroquip Inoac Company.
1.15 "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer.
1.16 "Entry Date" means the date the Employee becomes a
Participant, pursuant to the eligibility requirements of section 4.01.
1.17 "Excess Aggregate Contributions" means the amount described
in section 401(m)(6)(B) of the Code.
1.18 "Excess Compensation" means that portion of a Participant's
Annual Compensation which is in excess of the Social Security Taxable Wage
Base in effect as of the beginning of the Plan Year.
1.19 "Excess Contribution Percentage" means the percentage of the
Employer contribution described in section 3.01(a) which is contributed under
the Plan with respect to each Participant's Excess Compensation.
1.20 "Excess Tax Deferred Contributions" shall mean the amount of
a Participant's Tax Deferred Contributions to the Plan which the Participant
claims, pursuant to the procedure outlined in section 10.12, to be in excess
of the amount allowable under section 402(g) of the Code.
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1.21 "Former Participant" means a person (other than a
beneficiary) whose participation in the Plan has ceased pursuant to
section 4.03, but who has a balance in at least one of the Accounts described
in article V.
1.22 "Full-Time Employee" means an Employee who is scheduled to
complete at least 1,000 Hours of Service in a 12 consecutive month period.
1.23 "Fund" means any of the investment funds described in
section 7.01.
1.24 "Highly Compensated Employee" means any Employee who
performs service for the Employer during the determination year and who,
during the look-back year:
(a) received compensation from the Employer in excess of
$75,000,
(b) received compensation from the Employer in excess of
$50,000 and was a member of the top-paid group for such year, or
(c) was an officer of the Employer and received
compensation during such year greater than 50 percent of the
section 415(b)(1)(A) dollar limit.
An Employee will also be a Highly Compensated Employee if such
person is described in the prior paragraph if the term "determination year" is
substituted for the term "look-back year" and if the Employee is among the top
100 Employees by pay during the determination year. In addition, an Employee
will be a Highly Compensated Employee if he or she is a 5 percent owner of the
Employer at any time during the look-back year or the determination year.
If no officer has satisfied the compensation requirement of
subparagraph (c) during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly Compensated
Employee.
In addition to the foregoing, a Highly Compensated Employee
includes any Employee who separated from service (or was deemed to have
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separated from service) prior to the determination year, performs no service
for the Employer during the determination year and was a Highly Compensated
Employee who was an active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year,
a family member of either a 5 percent owner who is inactive or former Employee
or a Highly Compensated Employee who was one of the ten most Highly
Compensated Employees ranked on the basis of compensation paid by the Employer
during such year, the family member and the 5 percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the family member and
5 percent owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving compensation and contributions equal to the sum of
such compensation and contributions of the family member and 5 percent owner
or top-ten Highly Compensated Employee. For purposes of this paragraph, a
family member includes the spouse, lineal ascendants and descendants of the
Employee or former Employee, and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated as
officers and the compensation that is considered, will be made in accordance
with section 414(q) of the Code and the regulations thereunder.
For purposes of this section, the determination year shall be the
Plan Year. The look-back year shall be the 12-month period immediately
preceding the determination year.
The dollar amounts in subparagraphs (a) and (b) of this section
shall be adjusted automatically for changes in the cost of living, as
announced by the Internal Revenue Service.
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For purposes of this section, "compensation" has the meaning given
such term by section 415(c)(3) of the Code.
1.25 "Hour of Service" means each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for the Employer.
These hours shall be credited to the Employee for the computation period in
which the duties are performed.
Hours of Service shall also be credited for employment with other
members of an affiliated service group [under section 414(m) of the Code], a
controlled group of corporations [under section 414(b) of the Code], or a
group of trades or businesses under common control [under section 414(c) of
the Code] of which the Employer is a member, and any other entity required to
be aggregated with the Employer pursuant to section 414(o) of the Code and the
regulations thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of the Plan under section 414(n) of the
Code.
If the Employer maintains a plan of a predecessor, Hours of
Service with the predecessor shall be treated as Hours of Service with the
Employer.
Notwithstanding the foregoing, service with TRINOVA Corporation
and any of its subsidiaries, as well as with Inoac USA, Inc., shall be deemed
service with the Employer for purposes of vesting hereunder.
1.26 "Limitation Year" means the calendar year.
1.27 "Named Fiduciary" means a fiduciary named in this document,
or who, pursuant to a procedure specified in the Plan, is identified as a
Named Fiduciary.
1.28 "Nonhighly Compensated Employee" means any Employee who is
not a Highly Compensated Employee.
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1.29 "Normal Retirement Age" means age 65.
1.30 "Normal Retirement Date" means the first day of the month
following the Normal Retirement Age.
1.31 "Participant" means an Employee who has satisfied the
eligibility requirements in article IV for participation in the Plan and who
has not terminated participation pursuant to section 4.03.
1.32 "Partnership Committee" means the committee established by
the parties to the Aeroquip Inoac Company joint venture.
1.33 "Part-Time Employee" means an Employee who is scheduled to
complete less than 1,000 Hours of Service in a 12 consecutive month period.
1.34 "Period of Service" means all periods of time commencing
with the Employee's Employment Commencement Date or Reemployment Commencement
Date and ending on the date a Break in Service begins, but including a Period
of Severance of less than 12 consecutive months. However, notwithstanding the
foregoing, if a Participant or Former Participant has at least five
consecutive Breaks in Service, the Period of Service prior thereto shall be
disregarded unless
(a) such person has any nonforfeitable interest in his or
her Employer Contributions Account at the time of separation from
service, or
(b) upon returning to service, the number of consecutive
Breaks in Service is less than the Period of Service.
1.35 "Period of Severance" means a continuous period of time
during which the Employee is not employed by the Employer or the Company.
Such period shall begin on the date the Employee retires, quits or is
discharged or, if earlier, the 12-month anniversary of the date on which the
Employee was otherwise absent from service such as, for example, vacation,
holiday, sickness, disability, leave or absence or layoff.
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1.36 "Plan" means the Sterling Inoac Company Retirement Savings
and Profit Sharing Plan which became the Aeroquip Inoac Company Profit Sharing
Plan effective January 1, 1992.
1.37 "Plan Year" means (a) the six-month period beginning July 1,
1989, and ending December 31, 1989, and, thereafter, (b) the calendar year.
1.38 "Qualified Election" means a waiver of the death benefit
payment to the spouse in the event of death of the Participant or Former
Participant. The waiver must be in writing and must be consented to by the
Participant's or Former Participant's spouse. The spouse's consent to a
waiver must be witnessed by a representative of the Plan or by a or notary
public. Notwithstanding this consent requirement, if the Participant or
Former Participant establishes to the satisfaction of a representative of the
Plan that such written consent may not be obtained because there is no spouse
or the spouse cannot be located, a waiver will be deemed a Qualified Election.
Any consent necessary under this provision will be valid only with respect to
the spouse who signs the consent, or in the event of a deemed Qualified
Election, the designated spouse. Additionally, a revocation of a prior waiver
may be made by a Participant without the consent of the spouse at any time
before the commencement of benefits. The number of revocations shall not be
limited.
1.39 "Reemployment Commencement Date" means the date an Employee
performs an Hour of Service for the Employer after incurring a Break in
Service.
1.40 "Transfer Date" means January 1, April 1, July 1, October 1,
and any other date declared by the Administrative Committee. Any date so
declared shall be applied for all purposes the same as the Transfer Dates
specified herein.
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1.41 "Trustee" means the trustee or trustees appointed to hold
and administer the Trust Fund.
1.42 "Trust Agreement" means the provisions hereof under which
assets of the Plan are held in trust as required by the Act.
1.43 "Trust Fund" means all assets of whatever kind or nature
held by the Trustee.
* * *
Unless a different construction and interpretation are cleared
required by the context:
(a) The masculine pronoun, wherever used, includes the
feminine pronoun.
(b) The singular includes the plural, and vice versa.
(c) The word "or" is employed both in the disjunctive and
conjunctive sense.
(d) The words "hereby," "herein," "hereof," "hereto" and
"hereunder" and any compounds thereof, shall be construed as
referring to the Plan generally and not merely to the particular
article, paragraph or subparagraph in which they occur.
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ARTICLE II
ADMINISTRATION
2.01 Allocation of Responsibility for Plan Administration. The
fiduciaries shall have only those specific powers, duties, responsibilities
and obligations as are specifically given them hereunder. The Employer shall
have the sole responsibility for making the contributions provided for in
section 3.01. The Partnership Committee shall have the sole authority to
appoint and remove (with or without cause) any member of the Administrative
Committee. The Partnership Committee shall also have the sole authority to
appoint and remove the Trustee and any investment manager and to establish the
investment media. The Administrative Committee shall have the specific
delegated powers and duties described in the further provisions of this
article II, and such further powers and duties as hereinafter may be delegated
to it by the Partnership Committee. The Trustee shall have the responsibility
for the management of the Trust, as provided in this document. Each fiduciary
warrants that any directions given, information furnished, or action taken by
it shall be in accordance with the provisions of this document, as the case
may be, authorizing or providing for such direction, information or action.
Furthermore, each fiduciary may rely upon any such direction, information or
action of another fiduciary as being proper under the provisions of this
document, and is not required to inquire into the propriety of any such
direction, information or action. It is intended that each fiduciary shall be
responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under this document and shall not be
responsible for any act or failure to act of another fiduciary. No fiduciary
guarantees the Trust Fund in any manner against investment loss or
depreciation in asset value.
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2.02 Administrative Committee. The Partnership Committee shall
appoint an Administrative Committee to administer the Plan. The
Administrative Committee may consist of officers or other employees of the
Employer, or any other individual. No member of the Administrative Committee
shall be disqualified from exercising the powers and discretion herein
conferred by reason of the fact that such member is or may thereafter be a
Participant or entitled to benefits hereunder. The members of the
Administrative Committee shall serve at the pleasure of the Partnership
Committee. Any member of the Administrative Committee may resign by
delivering a written resignation to the Partnership Committee and to the
Administrative Committee. Vacancies on the Administrative Committee arising
by resignation, death, removal or otherwise, shall be filled by the
Partnership Committee.
The Administrative Committee shall be charged with and all have
authority for control of the administration of the Plan, other than authority
or control respecting management or disposition of Plan assets. The
Administrative Committee shall have all the powers necessary to enable it to
carry out its duties. Not in limitation but in amplification of the
foregoing, the Administrative Committee shall have the duty and discretionary
authority to interpret and construe the Plan, determine eligibility for
benefits, approve procedures and policies required to ensure adequacy of
administrative and financial controls, maintain all records and determine all
questions that may arise hereunder (including all questions relating to the
eligibility of Employees to become Participants, the eligibility of
Participants for benefits hereunder and the amount of those benefits), assure
the Plan's compliance with applicable statues and regulations [including
discrimination tests under section 401 of the Code], administer any Plan
provisions regarding loans (including the applicable interest rate), hardship
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withdrawals and transferred contributions. All disbursements by the Trustee
of benefits under the Plan shall be made upon, and in accordance with, the
written instructions of the Administrative Committee. The decision of the
Administrative Committee upon all matters within the scope of its authority
shall be final, to the fullest extent permitted by law.
To enable the Administrative Committee to perform its functions,
the Employer shall make available full and timely information to the
Administrative Committee concerning all matters within the scope of the Plan
relating to Employees, their compensation and length of service, their
retirement or other termination of employment, and such other pertinent facts
as the Administrative Committee may require.
The Partnership Committee may employ or appoint (or may authorize
the Administrative Committee to employ or appoint) agents, legal counsel,
accountants, actuaries and such other experts as may be necessary or
convenient in the administration of the Plan. Neither the Administrative
Committee, the Partnership Committee nor any fiduciary shall be liable for the
directions, actions or omissions of any such expert who has agreed to the
performance of administrative duties in connection with the Plan, but shall be
entitled to rely upon all certificates, reports and opinions which may be made
by such experts and shall be fully protected in respect of any action taken or
suffered by them in good faith in reliance upon the advice or opinion of any
such expert.
The Administrative Committee shall maintain records of its
decisions. Its records shall contain all relevant data pertaining to
individuals and their rights under the Plan. It shall maintain convenient
means of conference at reasonable hours and places to assure a full
understanding of rights and benefits. Such of its records as may pertain
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solely to a particular individual shall be made available by reports or
presentation for examination by such person.
Any person dissatisfied with the Administrative Committee's
determination of a claim for benefits hereunder shall be entitled to a written
explanation setting forth the specific reasons for such determination. Such
person shall be given a reasonable time within which to comment, in writing,
to the Administrative Committee with respect to such explanation. The
Administrative Committee shall review its determination promptly and render a
written decision with respect to the claim. Such decision upon matters within
the scope of the authority of the Administrative Committee shall be final.
2.03 Investment of Plan Assets. The Partnership Committee may
employ or appoint one or more investment managers to manage all or any portion
of the Trust Fund. Such investment manager shall be an investment adviser
registered under the Investment Advisers Act of 1940, a bank, as defined in
the Investment Advisers Act of 1940, or an insurance company qualified to
manage, acquire and dispose of the assets of employee benefit plans. An
investment manager shall acknowledge in writing its appointment as a fiduciary
of the Trust Fund and shall serve until a proper resignation is received by
the Partnership Committee or until it is removed or replaced by the
Partnership Committee.
Other fiduciaries shall be under no duty to question any direction
or lack of direction of any investment manager, but may act, and shall be
fully protected in acting in accordance with each such direction. An
investment manager shall have the sole investment responsibility for the
portion of the Trust Fund which it is appointed to manage, and no other
fiduciary including the Partnership Committee or the Trustee shall have any
responsibility for the investment of any asset of the Trust Fund, the
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management of which has been delegated to an investment manager, or liability
for any loss to or diminution of the value of the trust resulting from any
action directed, taken or omitted by an investment manager.
2.04 Plan Fiduciaries and Fiduciary Obligations. The fiduciaries
shall be the Partnership Committee, the Administrative Committee, the Trustee,
any investment manager appointed under the provisions of section 2.03 and any
other person who is a fiduciary under the terms of the Act, but only with
respect to the duties assigned to each in this document. A person may act in
more than one fiduciary capacity.
Each person who is a fiduciary shall discharge his duties with the
care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims, and in accordance with the provisions of this document. A fiduciary who
complies with the foregoing standards shall not be liable for any loss, action
or omission hereunder. A fiduciary not charged with a specific responsibility
under the provisions of this document shall be under no duty to question any
action or lack of action of another fiduciary with respect to such
responsibility, and shall not be liable for a breach of such fiduciary
responsibility by another fiduciary unless such person participates knowingly
in, or knowingly undertakes to conceal, an act or omission of such other
fiduciary knowing such act is a breach, or if such person has knowledge of a
breach by such fiduciary and fails to make reasonable efforts under the
circumstances to remedy the breach.
Any Named Fiduciary and any fiduciary may use, employ, discharge
or consult with one or more individuals, corporations or other entities with
respect to advice regarding any responsibility, obligation or duty of such
fiduciary in connection with the Plan. Any Named Fiduciary may designate
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other individuals, corporations or other entities who are not Named
Fiduciaries, to carry out such Named Fiduciary's responsibilities, obligations
and duties with respect to the Plan, except to the extent the Act prohibits
delegation of authority and discretion to manage and control the assets of the
Trust Fund. Such delegations may be revoked or modified at any time and any
such delegation, revocation or modification shall be made written instruments
signed by the Named Fiduciary, if an individual, or, in the case of other
entities who are Named Fiduciaries in accordance with the procedures governing
the functions of such entity, and a written record shall be kept thereof. No
fiduciary shall be liable for the directions, actions, or omissions of any
individual, corporation, or other entity who has been designated to carry out
any responsibilities,obligations or duties in connection with the Plan, but
shall be fully protected by any action taken or suffered by them in good faith
in reliance upon the advice or opinion of any such individual, corporation or
other entity.
Notwithstanding any other provision of this Plan, the Partnership
Committee may to the extent permitted by law, cause the Employer to indemnify
any fiduciary for any liability incurred in his or her capacity as such
fiduciary.
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ARTICLE III
CONTRIBUTIONS
3.01 Contributions by Employer.
(a) Profit Sharing Contributions. Each year the Employer will
make a contribution to the Trust Fund in an amount based upon the guidelines
established by the Partnership Committee, to be held and administered in trust
by the Trustee according to the terms hereof. In no event, however, shall the
contribution of the Employer for any Plan Year be less than an amount equal to
the following:
(i) 1 percent of the Base Compensation of all Participants
entitled to receive an allocation pursuant to section 6.01(a)
hereof, plus
(ii) 1 1/2 percent of the Excess Compensation of all
Participants entitled to receive an allocation pursuant to section
6.01(a) hereof.
(b) Tax Deferred Contributions. Subject to section 3.02, the
Employer shall contribute to the Trust Fund on behalf of each Participant the
full amount of Tax Deferred Contributions authorized by said Participant
pursuant to such section.
(c) Matching Contributions. The Employer shall contribute to
the Trust Fund on behalf of each Participant an amount equal to the following:
(1) 100 percent of the amount of a Participant's Tax
Deferred Contributions, to a maximum of 2 percent of the
Participant's Annual Compensation, plus
(2) 50 percent of the amount of the Participant's Tax
Deferred Contributions in excess of 2 percent of the Participant's
Annual Compensation, to a maximum of 1 percent of such
Participant's Annual Compensation.
The maximum Matching Contribution made on behalf of any Participant shall be 3
percent of the Participant's Annual Compensation.
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Contributions to a Participant's Matching Contributions Account
shall meet the nondiscrimination requirements of section 401(m) of the Code
pursuant to section 6.03.
The Plan is designed to qualify as a profit sharing plan for
purposes of sections 401(a), 402, 412 and 417 of the Code. However, the
Employer may make contributions to the Plan without regard to current or
accumulated earnings and profits for any taxable year or years ending with or
within the Plan Year.
3.02 Tax Deferred Contributions. In accordance with procedures
established by the Administrative Committee, each eligible Participant may
elect to defer up to 10 percent of his or her Annual Compensation (in 1
percent increments) for each pay period that such person remains a
Participant. The Participant's election shall be made at such time and in
such manner as the Administrative Committee shall determine. Said election
shall remain in effect until revoked or superseded by a subsequent election
pursuant to procedures established by the Administrative Committee. A
Participant who does not elect to make Tax Deferred Contributions upon entry
into the Plan may submit an election form to be effective on any Transfer Date
thereafter in accordance with procedures established by the Administrative
Committee.
Except as otherwise provided herein, the Employer shall contribute
to the Plan on behalf of the Participant the full amount of the Tax Deferred
Contributions authorized by the Participant. In no event, however, shall a
Participant's Tax Deferred Contributions to this Plan, plus any amounts
deferred under any plans or arrangements described in sections 401(k), 408(k)
or 403(b) of the Code, for any calendar year exceed $7,000 [adjusted
automatically for changes in the cost of living announced by the Internal
Revenue Service]. The Employer shall automatically discontinue a
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Participant's Tax Deferred Contributions for the remainder of the calendar
year in the event said Participant reaches the foregoing dollar limitation. A
Participant may request a distribution of the amount of any Excess Tax
Deferred Contributions in accordance with the provisions of section 10.12.
It is intended that contributions made pursuant to this section
3.02 shall not be considered income to the Participant for purposes of section
61 of the Code and shall be treated as those made by the Employer.
Contributions to a Participant's Tax Deferred Contributions
Account shall meet the nondiscrimination requirements of section 401(k) of the
Code pursuant to section 6.02 hereof.
3.03 Rollover Contributions and Direct Transfers. The Trustee,
upon authorization from the Administrative Committee, may accept transfers on
behalf of a Participant from a "rollover" individual retirement account, as
defined in section 408(d)(3)(A)(ii) of the Code.
In addition, the Trustee, upon authorization from the Administrative
Committee, may also accept all or any portion of a qualified total
distribution [as defined in section 402 of the Code] transferred within 60
days of the date of the check representing the distribution.
Finally, the Trustee, upon authorization from the Administrative
Committee, may accept direct transfers on behalf of Participants who formerly
participated in another qualified plan, provided such transfer satisfies those
provisions of the Code relating to the maintenance and elimination of optional
forms of benefits.
Contributions made pursuant to this section 3.04 shall be credited
to the Participant's Roll-In Contributions Account and shall be at all times
nonforfeitable.
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3.04 Time for Payment of Contributions. The annual contribution
of the Employer pursuant to section 3.01(a) hereof shall be made to the
Trustee at such time and in such manner as deemed appropriate by the Employer.
Contributions to be made to the Plan pursuant to sections 3.01(b)
and 3.01(c) shall be periodically contributed by the Employer in accordance
with the Employer's established payroll procedures in a manner uniformly
applied to all similarly situated Participants.
3.05 Reversion of Funds to Employer. All Employer contributions
are conditioned upon their deductibility under section 404 of the Code.
Except as provided herein, the Employer shall not directly or indirectly
receive any refund of contributions made to the Trust Fund except in any of
the following circumstances:
(a) The contribution was made by reason of a mistake of
fact.
(b) The deduction for such contribution is disallowed.
(c) The initial qualification of the Plan is denied under
the Code, but only if the application for the determination is
made by the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan was adopted, or such
later date as the Secretary of the Treasury may prescribe.
Earnings attributable to any contribution subject to refund shall not be
refunded. The amount subject to refund shall be reduced by any loss
attributable thereto, and by any amount which would cause the individual
account of any Participant to be reduced to less than the balance which would
have been in the account had the contribution subject to refund not been made.
The return of the contribution shall be made within one year of the mistaken
payment, the disallowance of deduction (to the extent disallowed), or the
denial of qualification, as the case may be.
3.06 Limitations on Annual Additions. Any other provision of
this Plan to the contrary notwithstanding, the maximum "Annual Addition"
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allocated to the Accounts of any Participant under this Plan and any other
Defined Contribution Plan maintained by Employer or any Company may not exceed
the lesser of:
(a) $30,000 or, if greater, 25 percent of the defined
benefit dollar limitation set forth in section 415(b)(1) of the
Code as in effect for the Limitation Year, or
(b) 25 percent of the Participant's Earnings.
"Annual Addition" means, for each Limitation Year, the sum of:
(a) Employer and Company contributions,
(b) the amount of the Participant's pre-tax and after-tax
contributions,
(c) forfeitures allocated to a Participant's account in a
Defined Contribution Plan sponsored by the Employer or any
Company, and
(d) any amounts allocated to an individual medical
account, as defined in section 415(l)(1) of the Code, which is
part of any pension or annuity plan maintained by the Employer are
treated as Annual Additions to a defined contribution plan.
Amounts derived from contributions paid or accrued after December
31, 1985 in taxable years ending after such date, which are
attributable to post retirement medical benefits allocated to the
separate account of a key employee, as defined in section
419(A)(d)(3), under a welfare benefit fund, as defined in section
419(e), maintained by the Employer are treated as Annual Additions
to a Defined Contribution Plan. These amounts treated as Annual
Additions are not subject to the limit of 25 percent of Earnings.
The Annual Addition for any Limitation Year beginning prior to January 1,
1987, shall not be recomputed to treat all Employee after-tax contributions as
an Annual Addition.
Contributions made or received pursuant to section 3.03, the
restoration of the Employer Contributions Account pursuant to section 10.04(c)
and any payments of interest and principal on loans made pursuant to section
10.11 shall not be taken into account in computing the Annual Addition.
If as the result of a reasonable error in estimating a
Participant's Earnings or under other limited facts and circumstances as may
be provided under the regulations to section 415 of the Code, the Annual
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Addition exceeds the maximum under this and any other Defined Contribution
Plan maintained by the Employer or any Company, an amount attributable to the
Participant's contributions (and earnings thereon) for the current Limitation
Year shall be returned to the extent necessary to reduce the Annual Addition
to the maximum Annual Addition. To the extent such return does not reduce the
Annual Addition to the maximum Annual Addition, that amount of the Employer's
contribution for the current Limitation Year necessary to reduce the Annual
Addition to the maximum Annual Addition shall be held in a separate account,
shall be utilized to reduce the contribution of the Employer for the next
succeeding Limitation Year, and shall be accounted for accordingly by the
Trustee. Any such sums shall not share in the gains or losses of the Trust
Fund.
"Earnings," for purposes of this section, shall mean a
Participant'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 maintaining the Plan (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), but excluding the following:
(a) 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 plan of deferred compensation;
(b) 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;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
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(d) 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).
3.07 Limitation of Benefits Under All Plans. If an Employee is a
Participant in the Plan and in a defined benefit plan maintained by the
Employer or any Company, the sum of the fraction attributable under the Plan
and the defined benefit plan for any Limitation Year may not exceed 1.0 as
computed under the terms and conditions as set forth under section 415(e) of
the Code.
For purposes of computing the fraction for any Limitation Year
attributable to the Plan (defined contribution fraction), the numerator shall
be the sum of the Annual Additions to the Participant's Accounts during such
Limitation Year and for all prior Limitation Years, and the denominator shall
be the lesser of:
(a) the product of 1.25 multiplied by the maximum
permissible dollar amount under section 415(c)(1)(A) of the Code
for such year and for all prior years, or
(b) the product of 1.4 multiplied by the maximum
permissible percentage of compensation contributed under section
415(c)(1)(B) of the Code for such year and for all prior years.
For purposes of computing the defined benefit plan fraction for
any Limitation Year, the numerator shall be the Participant's projected annual
benefit under the defined benefit plan as of the end of the Limitation Year
and the denominator shall be the lesser of:
(a) the product of 1.25 multiplied by the maximum
permissible dollar amount of benefit in effect under section
415(b)(1)(A) of the Code for such year, or
(b) the product of 1.4 multiplied by the maximum
permissible percentage of compensation limitation of the amount of
benefit in effect under section 415(b)(1)(B) of the Code for such
year.
If the preceding limitations are exceeded for any person, the
Administrative Committee shall notify the administrator of each defined
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benefit plan in which such person has accrued a benefit and request that such
accrual be adjusted to comply with the limitations of this section so that
contributions to the defined contribution plan shall not be affected.
If the Plan and the defined benefit plan in which an Employee is a
Participant satisfy the requirements of section 415 of the Code in effect for
all Limitation Years beginning prior to January 1, 1987, where necessary, an
amount shall be subtracted from the numerator of the defined contribution plan
fraction (not to exceed such numerator) as prescribed by the Secretary of the
Treasury so that the sum of the defined benefit plan fraction and the defined
contribution plan fraction computed under section 415(e)(1) of the Code does
not exceed 1.0 for such Limitation Year.
Contributions made or received pursuant to section 3.03, the
restoration of the Employer Contributions Account pursuant to section 10.04(c)
and any payments of interest and principal on loans made pursuant to section
10.11 shall not be taken into account for purposes of this section.
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ARTICLE IV
ELIGIBILITY
4.01 Eligibility. Each Full-Time Employee who is employed on
July 1, 1989, or on the first day of any subsequent calendar quarter shall
become a Participant on the first day of the month following the completion of
his or her orientation period. However, in no event shall a Full-Time
Employee begin participation later than the first day of the month coinciding
with or next following the date he or she is credited with at least 1,000
Hours of Service during any 12 consecutive month period starting on the
Employment Commencement Date (the "eligibility computation period").
A Part-Time Employee who is employed on July 1, 1989, or on the
first day of any subsequent calendar quarter shall become a Participant on the
first day of the month coinciding with or next following the date he or she is
credited with at least 1,000 Hours of Service during any 12 consecutive month
period starting on the Employment Commencement Date (the "eligibility
computation period").
Notwithstanding the foregoing, however, (1) an Employee who is a
member of a collective bargaining unit shall not be eligible to participate in
the Plan unless the collective bargaining agreement between the Employer and
the union provides for such participation, (2) no person whose employment
classification is that of an intern shall be eligible to participate in the
Plan, (3) no nonresident aliens shall be eligible to participate in the Plan,
and (4) a leased employee [as defined in section 414(n)(2) of the Code] shall
not become a participant in, nor accrue benefits under, the Plan based on
service as a leased employee.
4.02 Transfer of Employment. In the event that a Participant
transfers employment to another unit of the Employer or the Company to which
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the Plan is not in effect, such transfer shall not constitute a separation
from service. The balance in such person's Accounts shall be held until such
time as it is distributed or until is transferred pursuant to article X.
4.03 Cessation of Participation. A Participant shall cease
participation in the Plan when he or she retires, dies, becomes totally and
permanently disabled pursuant to section 10.01, incurs a Break in Service or
otherwise becomes a member of a classification or group of Employees which is
ineligible to participate, whichever occurs first.
4.04 Eligibility Upon Reemployment. A Former Participant who is
subsequently rehired by, or who transfers employment to, a unit of the
Employer shall be immediately eligible for participation, subject to the
exclusions on participation in section 4.01.
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ARTICLE V
PARTICIPANT ACCOUNTS
Separate Accounts. Separate Accounts shall be maintained for each
Participant and Former Participant as follows:
(a) Employer Contributions Account. The amount of the
Employer's contribution to the Trust Fund pursuant to section 3.01(a) and
allocated pursuant to section 6.01(a), together with such person's share of
all earnings and losses therefrom, shall be credited to his or her Employer
Contributions Account.
(b) Tax Deferred Contributions Account. Tax Deferred
Contributions authorized by a Participant pursuant to section 3.02 and
contributed by the Employer pursuant to section 3.01(b), together with such
person's share of all earnings and losses therefrom, shall be credited to his
or her Tax Deferred Contributions Account.
(c) Matching Contributions Account. Amounts contributed by the
Employer on behalf of a Participant pursuant to section 3.01(c), together with
such person's share of all earnings and losses therefrom, shall be credited to
his or her Matching Contributions Account.
(d) Roll-In Contributions Account. Any contributions made by,
or transferred on behalf of, a Participant pursuant to section 3.03, together
with such person's share of all earnings and losses therefrom, shall be
credited to his or her Roll-In Contributions Account.
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ARTICLE VI
ALLOCATION
6.01 Annual Allocations. Employer contributions pursuant to
section 3.01 shall be allocated and credited to the applicable Accounts of
Participants entitled to receive an allocation, as follows:
(a) Effective as of the last day of each Plan Year, any
amount contributed by the Employer pursuant to section 3.01(a)
shall be allocated and credited to the Employer Contributions
Account of each Participant who continues to be employed on such
date as a member of a classification of Employees which is
eligible to participate (pursuant to section 4.01), except that an
allocation shall be made to such Account of any Participant who
became totally and permanently disabled, died, or retired during
such Plan Year. Such allocation shall be made as follows:
FIRST, the contribution will be allocated such that the
Excess Contribution Percentage is equal to one and one-half times
the Base Contribution Percentage. The Excess Contribution
Percentage will be limited such that the Excess Contribution
Percentage does not exceed the Base Contribution Percentage by
more than the greater of:
(1) 5.7 percentage points; or
(2) the percentage equal to the portion of the rate of tax
under section 3111(a) of the Code in effect as of the beginning of
the Plan Year which is attributable to old-age insurance.
SECOND, any portion of the Employer contribution described
in section 3.01(a) remaining after the foregoing allocation will
be allocated and credited to the Employer Contributions Account of
each Participant described in (a) in the same proportion that his
or her Annual Compensation bears to the total Annual Compensation
of all such Participants.
(b) Amounts contributed by the Employer on behalf of each
Participant pursuant to section 3.01(b) shall be credited to such
Participant's Tax Deferred Contributions Account.
(c) Amounts contributed by the Employer on behalf of each
Participant pursuant to section 3.01(c) shall be credited to such
Participant's Matching Contributions Account.
For purposes of the foregoing, Annual Compensation during a period
the Employee is ineligible for participation (pursuant to section 4.01) shall
be disregarded.
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6.02 Nondiscrimination Requirements for Tax Deferred
Contributions. Contributions to a Participant's Tax Deferred Contributions
Account shall meet the nondiscrimination requirements of section 401(k) of the
Code.
In no event shall the actual deferral percentage of Participants
who are Highly Compensated Employees exceed the actual deferral percentage of
Participants who are Nonhighly Compensated Employees by more than the greater
of
(a) 125 percent of the actual deferral percentage for
Participants who are Nonhighly Compensated Employees, or
(b) the lesser of 200 percent of the actual deferral
percentage for Participants who are Nonhighly Compensated
Employees or two percentage points higher than the actual deferral
percentage for Participants who are Nonhighly Compensated
Employees.
The actual deferral percentage for Participants who are Highly Compensated
Employees and Participants who are Nonhighly Compensated Employees is the
average of the ratios (calculated separately for each Participant in such
group) of the amount of the Tax Deferred Contributions contributed to the Plan
on behalf of each such Participant for such Plan Year to the Participant's
Annual Compensation for such Plan Year. In determining the actual deferral
percentage, Employer contributions which satisfy the limitations of section
401(k) of the Code may be used.
To the extent necessary to comply with the nondiscrimination
requirements of section 401(a) or section 401(k) of the Code as described in
this section 6.02, the Employer shall distribute the amount of the Excess Tax
Deferred Contributions, plus any income and less any losses attributable
thereto, to Participants who are Highly Compensated employees no later than
two and one-half months after the last day of the Plan Year for which said
excess contributions were allocated. Total Excess Tax Deferred Contributions
shall be the amount necessary to bring the Plan into compliance with said
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nondiscrimination requirements of the Code. Tax Deferred Contributions of
Participants who are Highly Compensated Employees shall be reduced, and excess
contributions distributed, in accordance with the following:
(a) Tax Deferred Contributions made on behalf of
Participants who are Highly Compensated Employees and who are
deferring the largest percentages of Annual Compensation shall be
reduced beginning with the highest of such percentages until the
actual deferral percentage of each such Highly Compensated
Employee is equal.
(b) If any excess contributions remain after the above
reduction, then Tax Deferred Contributions made on behalf of all
Participants who are Highly Compensated Employees shall be reduced
on a pro rata basis.
Income attributable to said excess contributions shall be determined in the
same proportion that each Highly Compensated Employee's excess contributions
bear to the balance of his or her Tax Deferred Contributions Account. If
there is a loss allocable to the excess contributions, the distribution to the
Participant shall be in an amount which shall be no less than the lesser of:
(a) the balance of the Participant's Tax Deferred
Contributions Account, or
(b) the amount of the Participant's Tax Deferred
Contributions for the Plan Year.
The distribution of said excess contributions and income may be made without
the consent of the Participant, and shall be considered income to the
Participant.
6.03 Nondiscrimination Requirements for Matching Contributions.
Contributions to a Participant's Matching Contributions Account shall meet the
nondiscrimination requirements of section 401(m) of the Code.
In no event shall the contribution percentage of Participants who
are Highly Compensated Employees exceed the contribution percentage of
Participants who are Nonhighly Compensated Employees by more than the greater
of
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(a) 125 percent of the contribution percentage for
Participants who are Nonhighly Compensated Employees, or
(b) the lesser of 200 percent of the contribution
percentage for Participants who are Nonhighly Compensated
Employees or two percentage points higher than the contribution
percentage for Participants who are Nonhighly Compensated
Employees.
The contribution percentage for the Participants who are Highly Compensated
Employees and the Participants who are Nonhighly Compensated Employees is the
average of the ratios (calculated separately for each Participant in such
group) of the total amount of the Matching Contributions contributed to the
Plan by or on behalf of each such Participant for such Plan Year to the
Participant's Annual Compensation for such Plan Year.
To the extent necessary to comply with the nondiscrimination
requirements of section 401(m) of the Code, the Employer shall distribute the
amount of the Excess Aggregate Contributions as well as income less any losses
attributable thereto, to Participants who are Highly Compensated Employees no
later than two and one-half months after the close of the Plan Year for which
said Excess Aggregate Contributions were made.
Excess Aggregate Contributions shall be reduced and distributed to
Participants who are Highly Compensated Employees in accordance with the
following:
(a) Matching contributions made on behalf of Participants
who are Highly Compensated Employees and who are receiving the
highest percentages of matching contributions as a percentage of
Annual Compensation shall be reduced beginning with the highest of
such percentages until the percentage of matching contributions of
each such Highly Compensated Employee is equal.
(b) If any Excess Aggregate Contributions remain after the
above reduction, matching contributions made on behalf of all
Participants who are Highly Compensated Employees shall be reduced
on a pro rata basis.
Income attributable to Excess Aggregate Contributions shall be determined in
accordance with the following:
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If matching contributions are distributed, the attributable
income shall be in the same proportion that the amount of the
matching contributions distributed bears to the balance of his or
her matching contributions Account.
If there is a loss allocable to the Excess Aggregate Contributions, any
distribution to the Participant shall be in an amount which shall be no less
than the lesser of:
(a) the balance of the Participant's Matching
Contributions Account, or
(b) the amount of the Matching Contributions made by or on
behalf of the Participant for the Plan Year.
The distribution of Excess Aggregate Contributions and income may
be made without the consent of the Participant and shall be considered income
to the Participant.
6.04 Reports. The Administrative Committee shall notify in
writing each individual who has a balance in his or her Account of the
financial status of such Account at least annually, as of the last day of each
Plan Year.
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ARTICLE VII
INVESTMENT OF THE TRUST FUND
7.01 Investment Funds. The Trust Fund shall consist of four
separate investment funds, as follows:
(a) Equity Fund. The Equity Fund shall consist of a
collective investment fund of high quality common stocks of medium
and large capitalized companies. Cash may also be held in such
Fund.
(b) Fixed Income Fund. The Fixed Income Fund shall
consist of a collective investment fund of high quality fixed-
income securities. Cash may also be held in such Fund.
(c) Capital Preservation Fund. The Capital Preservation
Fund shall consist of a collective investment fund of insurance
company and bank investment contracts. Cash may also be held in
such Fund.
(d) Money Market Fund. The Money Market Fund shall
consist of a collective investment fund of short-term investments,
such as certificates of deposit, repurchase agreements and
treasury bills.
Except as otherwise provided herein, each Participant and Former
Participant may direct the investment of the balance of the amount credited to
his or her Employer Contributions Account for each Plan Year (in increments of
5 percent with a minimum investment of 10 percent) in one or more of the
Funds.
As of any Transfer Date, each Participant may elect to have the
Trustee allocate a percentage (in increments of 5 percent with a minimum
investment of 10 percent) of the value of one or more of his or her Fund
balances immediately preceding the Transfer Date, transferred to an equivalent
value in any one or more of such Funds. The election shall be made at such
time and in such manner as the Administrative Committee may from time to time
determine and shall be effective after the first Transfer Date following the
election. Such election shall remain effective until revoked or superseded by
a subsequent election pursuant to procedures established by the Administrative
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Committee. If a Participant fails to make an election upon first becoming
eligible to do so, he or she shall be deemed to have elected to invest 100
percent of his or her Accounts in the Fixed Income Fund.
If a Participant or Former Participant does not elect to receive
the nonforfeitable interest in his or her Accounts upon termination of
employment, he or she shall no longer be entitled to direct the investment of
his or her Accounts and the nonforfeitable interest in such Accounts shall be
transferred to the Capital Preservation Fund until such time as the monies are
to be distributed in accordance with the provisions hereof.
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ARTICLE VIII
VALUATION OF TRUST FUND
As of each Accounting Date, the Trustee shall determine the net
income or net loss for each Fund since the preceding Accounting Date,
including any unrealized appreciation or depreciation in the value of such
Fund as well as any realized income, gain, expenses and losses. Any such
determinations of net income or net loss made by the Trustee shall be
conclusive and binding upon all Participants, Former Participants and
beneficiaries. If an investment manager has been appointed to handle a
specific Fund, the Trustee shall be entitled to rely upon the information
supplied by the investment manager as to the value of such Fund on the
Accounting Date.
After determining the value of each Fund, the Accounts of each
Participant and Former Participant in each Fund shall be credited or debited
with his or her share of the net income or net loss of such Fund in the
proportion that the value of the Account as of the preceding Accounting Date,
plus one-half of all contributions made on a Participant's behalf since the
preceding Accounting Date, bears to the total value of all Accounts in such
Fund as so adjusted. The Account of each Participant and Former Participant
in each Fund shall then be credited with any contributions to such Fund since
the immediately preceding Accounting Date.
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ARTICLE IX
RETIREMENT
9.01 Normal Retirement. Each Participant's Accounts shall be
nonforfeitable upon the attainment of his or her Normal Retirement Age.
9.02 Late Retirement. A Participant who remains in the
employment of the Employer after the Normal Retirement Date shall continue to
share in allocations in accordance with section 6.01, and no distribution need
be made to the Participant until actual retirement, subject to section 10.06.
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ARTICLE X
DISTRIBUTIONS AND BENEFITS TO PARTICIPANTS
10.01 Upon Normal Retirement or Disability. When a Participant
retires at or after his or her Normal Retirement Date or incurs a total and
permanent disability, the entire interest in his or her Accounts, including
the amount of any additional credit, as finally determined, representing
participation and contributions for the year in which disability or normal
retirement occurred, shall become nonforfeitable. The distribution of such
person's Accounts shall be made in accordance with section 10.06. The
distribution of the Accounts of a Former Participant who incurs a total and
permanent disability shall be governed by the provisions of section 10.03
For purposes hereof, "total and permanent disability" means a
physical or mental condition of a Participant resulting from a bodily injury
or disease or mental disorder which renders such person incapable of
continuing in the employment of the Employer. Total and permanent disability
shall be determined by the Administrative Committee in accordance with uniform
principles consistently applied, upon the basis of such evidence as the
Administrative Committee deems necessary or advisable.
10.02 Upon Death. Upon the death of a Participant, the entire
interest in the Accounts of such Participant, including the amount of any
additional credit, as finally determined, representing participation and
contributions for the year in which death occurs, shall become nonforfeitable.
Upon the death of a Former Participant, the nonforfeitable portion of such
person's Accounts (determined pursuant to section 10.03) shall become payable.
The distribution of the decedent's Accounts to such person's designated
beneficiary or beneficiaries (or, if none, as provided in this section 10.02)
shall be made in accordance with section 10.06. The Administrative Committee
may require such proper proof of death and such evidence of the right of any
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person to receive payment of the entire interest in the Accounts of such
decedent as the Administrative Committee deems desirable. The Administrative
Committee's determination shall be conclusive.
Each Participant and Former Participant, by written instrument
delivered to the Administrative Committee, shall have the unqualified right to
designate and from time to time change the beneficiary or beneficiaries to
receive in the event of death the nonforfeitable interest in his or her
Accounts. The beneficiary shall be the spouse to whom the Participant or
Former Participant is married at death, subject to a Qualified Election.
In the event of the failure to designate a beneficiary or
beneficiaries (or if no designated beneficiary has survived the Participant or
Former Participant), the entire interest in the decedent's Accounts shall be
distributed in the following order of priority:
(a) First, to his or her spouse if then living; or
(b) Second, to his or her estate.
10.03 Upon Termination of Employment. Upon termination of a
Participant's employment for any reason other than normal retirement, total
and permanent disability, or death, such person shall become entitled to
receive the entire interest then constituting his or her Tax Deferred
Contributions Account, Matching Contributions Account and Roll-In
Contributions Account (all of which shall be nonforfeitable at all times), as
well as the nonforfeitable percentage in his or her Employer Contributions
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Account based on his or her Period of Service, determined in accordance with
the following:
Period of Service Nonforfeitable Percentage
Less than 1 year 0%
1 but less than 2 years 25%
2 but less than 3 years 50%
3 but less than 4 years 75%
4 or more years 100%
Normal Retirement Age 100%
If the foregoing vesting schedule is hereafter amended, or if the
vesting schedule of an existing plan is amended by the Plan, any Participant
who has completed a Period of Service of at least three years on the later of:
(a) the date the amendment is adopted, or
(b) the date the amendment is effective,
may elect beginning on the date the Plan amendment is adopted and ending on
the later of:
(a) his or her termination of employment, or
(b) the date which is 60 days after the day the Plan
amendment is adopted, or
(c) the date which is 60 days after the day the Plan
amendment becomes effective, or
(d) the date which is 60 days after the day the
Participant is issued written notice of the Plan amendment by the
Administrative Committee,
to have the nonforfeitable interest in his or her Employer Contributions
Account determined without regard to such amendment if his or her non-
forfeitable percentage under the Plan, as amended, is at any time less than
the percentage determined without regard to such amendment. Such election
shall be made by notifying the Administrative Committee.
10.04 Forfeiture.
(a) If a Participant terminates service, and the nonforfeitable
value of his or her Accounts is not greater than $3,500, the Participant shall
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receive a distribution of the value of the entire nonforfeitable portion of
his or her Accounts and the remaining portion will be treated as a forfeiture.
(b) If a Participant terminates service and elects to receive
the nonforfeitable portion of his or her Accounts pursuant to section 10.06,
the remaining portion will be treated as a forfeiture. If the Participant
elects to have less than the entire nonforfeitable portion of his or her
Accounts distributed, the part of the nonforfeitable portion to be treated as
a forfeiture shall be the total nonvested portion multiplied by a fraction,
the numerator of which is the amount of the distribution and the denominator
of which is the total value of the nonforfeitable Accounts.
(c) If a Participant receives a distribution from his or her
Employer Contribution Account which is less than the value of the
Participant's Employer Contributions Account and resumes employment with the
Employer or with a Company within the next five Plan Years following the Plan
Year in which termination of employment occurs, the Participant's Employer
Contributions Account will be restored to the amount on the date of
distribution if the Participant repays to the Plan the full amount of the
distribution from such Account, provided such repayment occurs before the
earlier of (i) five years after the termination of employment or (ii) the
occurrence of five consecutive Breaks in Service. (For purposes of this
subparagraph, if the nonforfeitable portion of any of a Participant's Accounts
is zero, the Participant shall be deemed to have received a distribution of
such nonforfeitable Account, and if such person resumes employment with the
Employer or the Company within the next five Plan Years following the Plan
Year in which the termination of employment occurs, such Account shall be
restored to the amount on the date of such deemed distribution.)
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(d) If a Participant does not receive a distribution pursuant to
section 10.06 hereof, no forfeiture will occur until five consecutive Breaks
in Service have occurred.
(e) Notwithstanding the foregoing provisions of this section
10.04, if the Administrative Committee is unable to locate a Former
Participant or beneficiary to whom a benefit is payable after making a good
faith effort to do so, such benefit shall be forfeited but shall be
immediately reinstated if a claim is made by the Former Participant or
beneficiary for the forfeited benefit.
Forfeitures shall be used to reduce the contribution due from the
Employer for the current Plan Year or the Plan Year following the Plan Year in
which the forfeiture occurs.
10.05 Certification by Administrative Committee. The
Administrative Committee shall certify to the Trustee all pertinent facts and
information required to determine its proper action in connection with normal
retirement, total and permanent disability, death and termination of
employment. The Trustee may rely fully upon information so certified and
shall be fully protected in so doing.
10.06 Method and Medium of Payment. Subject to the remaining
provisions of this section, the distribution of the nonforfeitable interest of
a Participant or Former Participant in his or her Accounts shall be made in
cash by the Trustee to such Participant, Former Participant or his or her
beneficiaries upon normal retirement, total and permanent disability, death or
termination of employment, as the case may be, in one or a combination of the
following methods as such Participant, Former Participant or beneficiary may
request:
(a) In one sum.
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(b) For distributions greater than $3,500, in monthly
installments (equal to at least $100 per month) of substantially
equal amounts for a specified period of time not to exceed the
life expectancy of the Former Participant or that of the Former
Participant and his or her designated beneficiary.
If the nonforfeitable value of the Participant's or Former
Participant's Accounts is not greater than $3,500 in the aggregate, the
Administrative Committee shall direct the Trustee to distribute the value of
the nonforfeitable portion of such Accounts in a lump sum. Other than at the
Normal Retirement Date or the later actual retirement date of a Participant,
no distribution of an amount greater than $3,500 may be made without the
consent of the Participant or Former Participant.
If a Participant does not elect to receive the nonforfeitable
interest in his or her Accounts upon termination of employment, such Accounts
shall be retained under the Plan and such person may not elect to receive the
nonforfeitable interest until after an Accounting Date following such
election.
10.07 Distribution Requirements. The requirements of this
section shall apply to any distribution of a Participant's interest and will
take precedence over any inconsistent provisions of the Plan. All
distributions required under this section shall be determined and made in
accordance with the proposed regulations under section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Participant or Former Participant must be
distributed in a lump sum or begin to be distributed in periodic installments
no later than such person's required beginning date.
(a) Limits on Distribution Periods. As of the first dis-
tribution calendar year, distributions, if not made in a lump sum, may only be
made over one of the following periods (or a combination thereof):
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(i) the life of the Former Participant,
(ii) the life of the Former Participant and a designated
beneficiary,
(iii) a period certain not extending beyond the life
expectancy of the Former Participant, or
(iv) a period certain not extending beyond the joint and
last survivor expectancy of the Former Participant and a
designated beneficiary.
(b) Determination of Amount to be Distributed Each Year. If the
Former Participant's interest is to be distributed in other than a lump sum,
the following minimum distribution rules shall apply on or after the required
beginning date.
(i) Individual Account.
(A) If a Former Participant's benefit is to be distributed over
(1) a period not extending beyond the life expectancy of the Former
Participant or the joint life and last survivor expectancy of the Former
Participant and the Former Participant's designated beneficiary or (2) a
period not extending beyond the life expectancy of the designated beneficiary,
the amount required to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must at least equal
the quotient obtained by dividing the Former Participant's benefit by the
applicable life expectancy.
(B) For calendar years beginning before January 1, 1989, if the
Former Participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least 50 percent of the present
value of the amount available for distribution is paid within the life
expectancy of the Former Participant.
(C) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the first
distribution calendar year, shall not be less than the quotient obtained by
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dividing the Former Participant's benefit by the lesser of (1) the applicable
life expectancy or (2) if the Former Participant's spouse is not the
designated beneficiary, the applicable divisor determined from the table set
forth in Q & A-4 of section 1.401(a)(9)-2 of the proposed regulations.
Distributions after the death of the Former Participant shall be distributed
using the applicable life expectancy in subparagraph (b)(i)(A) above as the
relevant divisor without regard to proposed regulations section 1.401(a)(9)-2.
(D) The minimum distribution required for the Former
Participant's first distribution calendar year must be made on or before the
Former Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the distribution
calendar year in which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar year.
(c) Death Distribution Provisions.
(i) Distribution Beginning Before Death. If the Former
Participant dies after distribution of his or her interest has begun, the
remaining portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the Former
Participant's death.
(ii) Distribution Beginning After Death. If the Former
Participant dies before distribution of his or her interest begins,
distribution of the Former Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of the
Former Participant's death except to the extent that an election is made to
receive distributions in accordance with (A) or (B) below:
(A) If any portion of the Former Participant's interest is
payable to a designated beneficiary, distributions may be made over the life
or over a period certain not greater than the life expectancy of the
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designated beneficiary commencing on or before December 31 of the calendar
year immediately following the calendar year in which the Former Participant
died.
(B) If the designated beneficiary is the Former Participant's
surviving spouse, the date distributions are required to begin in accordance
with (A) above shall not be earlier than the later of (1) December 31 of the
calendar year immediately following the calendar year in which the Former
Participant died and (2) December 31 of the calendar year in which the Former
Participant would have attained age 70 1/2.
If the Former Participant has not made an election pursuant to
this subparagraph (ii) by the time of his or her death, the Former
Participant's designated beneficiary must elect the method of distribution no
later than the earlier of (1) December 31 of the calendar year in which
distributions would be required to begin under this section, or (2) December
31 of the calendar year which contains the fifth anniversary of the date of
death of the Former Participant. If the Former Participant has no designated
beneficiary, or if the designated beneficiary does not elect a method of
distribution, distribution of the Former Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Former Participant's death.
For purposes of subparagraph (ii) above, if the surviving spouse
dies after the Former Participant, but before payments to such spouse begin,
the provisions of subparagraph (ii), with the exception of subparagraph (B)
therein, shall be applied as if the surviving spouse were the Former
Participant.
For purposes of this subparagraph (c), any amount paid to a child
of the Former Participant will be treated as if it had been paid to the
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surviving spouse if the amount becomes payable he surviving spouse when the
child reaches the age of majority.
For the purposes of this subparagraph (c), distribution of a
Former Participant's interest is considered to begin on the Former
Participant's required beginning date [or, if the second paragraph preceding
this paragraph is applicable, the date distribution is required to begin to
the surviving spouse pursuant to subparagraph (c)(ii) hereof].
(d) Definitions.
(i) Applicable Life Expectancy. Applicable life expectancy
means the life expectancy (or joint and last survivor expectancy) calculated
using the attained age of the Former Participant (or designated beneficiary)
as of the Former Participant's (or designated beneficiary's) birthday in the
applicable calendar year, reduced by one for each calendar year which has
elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy shall be the
life expectancy as so recalculated. The applicable calendar year shall be the
first distribution calendar year, and if life expectancy is being recalculated
such succeeding calendar year.
(ii) Designated Beneficiary. Designated beneficiary means the
individual who is designated as the beneficiary under the Plan in accordance
with section 401(a)(9) of the Code and the proposed regulations thereunder.
(iii) Distribution Calendar Year. Distribution calendar year
means a calendar year for which a minimum distribution is required. For
distributions beginning before the Former Participant's death, the first
distribution calendar year is the calendar year immediately preceding the
calendar year which contains the Former Participant's required beginning date.
For distributions beginning after the Former Participant's death, the first
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distribution calendar year is the calendar year in which distributions are
required to begin pursuant to subparagraph (c) above.
(iv) Life Expectancy. Life expectancy and joint and last
survivor expectancy are computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the income tax regulations.
Unless otherwise elected by the Former Participant [or spouse, in
the case of distributions described in section (c)(ii)(B) above] by the time
distributions are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Former Participant (or
spouse) and shall apply to all subsequent years. The life expectancy of a
nonspouse beneficiary may not be recalculated.
(v) Former Participant's Benefit.
(A) Valuation Date. For purposes hereof, the Former
Participant's Account shall be determined as of the last valuation date in the
calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions or forfeitures
allocated to the account balance as of dates in the valuation calendar year
after the valuation date and decreased by distributions made in the valuation
calendar year after the valuation date.
(B) Exception for Second Distribution Calendar Year. For
purposes of subparagraph (A) above, if any portion of the minimum distribution
for the first distribution calendar year is made in the second distribution
calendar year on or before the required beginning date, the amount of the
minimum distribution made in the second distribution calendar year shall be
treated as if it had been made in the immediately preceding distribution
calendar year.
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(vi) Required Beginning Date.
(A) General Rule. The required beginning date of a Former
Participant is the first day of April of the calendar year following the
calendar year in which the Former Participant attains age 70 1/2.
(B) Transitional Rules. The required beginning date of a Former
Participant who attains age 70 1/2 before January 1, 1988, shall be determined
in accordance with (1) or (2) below:
(1) Non-5 percent Owners. The required beginning date of
a Former Participant who is not a 5 percent owner is the first day
of April of the calendar year following the calendar year in which
the later of retirement or attainment of age 70 1/2 occurs.
(2) 5 Percent Owners. The required beginning date of a
Former Participant who is a 5 percent owner during any year
beginning after December 31, 1979, is the first day of April
following the later of:
(i) the calendar year in which the Former
Participant attains age 70 1/2, or
(ii) the earlier of the calendar year with or
within which ends the Plan Year in which the Former
Participant becomes a 5 percent owner, or the calendar
year in which the Former Participant retires.
The required beginning date of a Former Participant who is not a
5 percent owner who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
(C) 5 Percent Owner. A Former Participant is treated as a
5 percent owner for purposes of this section if such Former Participant is a 5
percent owner as defined in section 416(i) of the Code (determined in
accordance with section 416 but without regard to whether the Plan is top-
heavy) at any time during the Plan Year ending with or within the calendar
year in which such owner attains age 66 1/2 or any subsequent Plan Year.
(D) Change in Ownership. Once distributions have begun to a 5
percent owner under this section, they must continue to be distributed, even
if the Participant ceases to be a 5 percent owner in a subsequent year.
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10.08 Latest Date for Distribution of Benefits. Unless the
Participant or Former Participant elects otherwise, distribution hereunder
shall commence not later than the 60th day after the end of the Plan Year in
which the latest of the following events occurs:
(a) The Participant or Former Participant attains the
Normal Retirement Age.
(b) The 10th anniversary of the year in which the
Participant or Former Participant commences participation in the
Plan.
(c) The Participant or Former Participant terminates
employment with the Employer.
Subject to section 10.07, a Participant or Former Participant may elect to
defer the commencement of a distribution hereunder to a date later than set
forth above by submitting to the Administrative Committee a written statement,
signed by the Participant or Former Participant, describing the method and
medium of distribution and the date on which such distribution is to commence.
10.09 Transfer of Accounts. By notice to the Administrative
Committee, a Participant or Former Participant who is entitled to a
distribution shall have the right to have the nonforfeitable portion of his or
her Accounts transferred to another plan and trust which is qualified under
section 401(a) of the Code and is tax-exempt under the provisions of section
501(a) of the Code or to an individual retirement account described in section
408 of the Code.
If the employment of a Participant is transferred to a Company as
to which the Plan is not in effect, his or her Accounts shall remain in the
Plan until they have become totally nonforfeitable. When such Accounts have
become totally nonforfeitable,
(a) the Participant, by notice to the Administrative
Committee, shall have the right to have the value of such Accounts
transferred directly to the qualified plan of such Company,
provided such plan permits receipt of such direct transfer and
provided the employment of such Participant was transferred to
such Company prior to June 1, 1992, or
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(b) such Accounts shall be transferred directly to the
qualified plan of such Company, provided such plan permits receipt
of such direct transfers and provided the employment of such
Participant was transferred to such Company on or after June 1,
1992.
10.10 Withdrawals. A Participant may request a withdrawal from
his or her Accounts as of any subsequent Accounting Date. Such a request must
be submitted to the Administrative Committee in writing. Withdrawals shall be
made in the following order of priority:
1. If the Participant can demonstrate the existence of a
financial hardship, the amount of his or her Tax Deferred
Contributions, excluding any earnings thereon, which amount is
necessary to satisfy the financial hardship.
2. If the Participant has attained age 59 1/2, up to
100 percent of the amount in the Tax Deferred Contributions
Account and Matching Contributions Account.
The minimum withdrawal from a Participant's Account shall be
$1,000 or, in the case of a financial hardship, the amount necessary to
satisfy the financial hardship, whichever is less. Participants will not be
permitted to make more than one withdrawal in any six-month period.
For purposes of this section, a withdrawal is on account of a
financial hardship only if the withdrawal is made on account of an immediate
and heavy financial need of the Participant and is necessary to satisfy such
financial need. A withdrawal is on account of an immediate and heavy
financial need of the Participant only if the withdrawal is on account of one
of the following:
(1) Medical expenses described in section 213(d) of the
Code which are incurred by the Participant, the Participant's
spouse or any of the Participant's dependents (as defined in
section 152 of the Code) or which are necessary for these persons
to obtain such medical care.
(2) Costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments).
(3) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Participant, his or her spouse, children or dependents.
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(4) Payments necessary to prevent the eviction of the
Participant from his or her principal residence, or foreclosure on the
mortgage of the Participant's principal residence.
The foregoing shall not be all-inclusive and the Administrative Committee
shall have the authority to make a binding decision as to whether any other
event for which a Participant has requested a hardship withdrawal is based on
an immediate and heavy financial need of the Participant.
A withdrawal shall be deemed necessary to satisfy an immediate and
heavy financial need only if the distribution is not in excess of the amount
of the immediate and heavy financial need of the Participant and only if the
Participant has obtained all distributions (other than hardship withdrawals)
and all nontaxable loans currently available under all plans maintained by the
Employer and all Companies. Once a Participant has received a hardship
withdrawal pursuant hereto, he or she shall be ineligible to make pre-tax
elective deferrals and all other types of Employee contributions to the Plan
for 12 months following the receipt of the hardship withdrawal. In addition,
the maximum amount of pre-tax elective deferrals [as permitted by section
402(g) of the Code] which a Participant may make to the Plan and to all other
plans permitting pre-tax elective deferrals maintained by the Employer and any
Company during the Participant's taxable year which follows his or her
hardship withdrawal shall be reduced by the amount of the Participant's pre-
tax elective deferrals during the taxable year of the hardship withdrawal.
The Administrative Committee shall determine the existence of a
financial hardship based on nondiscriminatory procedures, taking into account
any then applicable rulings or regulations of the Internal Revenue Service.
The standards established by the Administrative Committee for determining the
existence of a financial hardship shall be uniformly applied to all
Participants who make application for such a withdrawal, and the
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Administrative Committee's decision of the existence or nonexistence of a
financial hardship shall be final.
Once the Administrative Committee has approved the Participant's
request for a hardship withdrawal, the amount to be withdrawn shall be paid to
the Participant as soon as practicable after the Accounting Date. Upon
request, however, the Administrative Committee shall authorize an advance
payment of a portion of such withdrawal, with the balance to be paid as soon
as practicable after the Accounting Date.
10.11 Loans to Participants. The Administrative Committee shall
grant a loan to a Participant who is a current Employee or to a person who is
a party in interest [as defined in section 3(14) of the Act] from his or her
Tax Deferred Contributions Account, Roll-In Contributions Account, or both,
upon the terms and conditions which follow. However, the total amount which
may be borrowed shall not exceed the lesser of (i) $50,000, reduced by the
excess (if any) of the highest outstanding balance of loans during the one-
year period ending on the day before the date on which such loan was made,
over the outstanding balance of loans on the date on which such loan was made,
or (ii) one-half of the amount of such person's Tax Deferred Contributions
Account and Roll-In Contributions Account which is vested. These limits apply
as if all qualified plans maintained by the Employer and the Company were one
plan.
The Administrative Committee shall establish uniform rules and
procedures pertaining to loans (which may include the imposition of an
administrative fee), which shall be consistently applied. In addition to such
rules and regulations as the Administrative Committee may adopt, all loans
shall comply with the following terms and conditions:
(a) An application for a loan by a Participant shall be
made in writing to the Administrative Committee whose action
thereon shall be final.
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(b) Each loan shall be made against collateral being the
assignment of no more than one-half of the borrower's entire
right, title and interest in and to his or her Tax Deferred
Contributions Account and Roll-In Contributions Account and shall
be evidenced by the borrower's promissory note for the amount of
the loan, including interest, payable to the order of the Trustee.
(c) Interest shall be charged at a reasonable rate, to be
determined by the Administrative Committee.
(d) All loans shall provide for payment by payroll
deduction of principal and interest in installments over a period
not to exceed five years, subject to subsection (e).
(e) Home loans may provide for payment over a period not
to exceed 30 years. For purposes of this subsection, "home loan"
means any loan, the proceeds of which are to acquire a dwelling
unit which within a reasonable time is to be used as a principal
residence of the Participant.
(f) Loans shall be amortized with level payments over the
term of the loan, and payments must occur not less frequently than
quarterly.
(g) A loan may be prepaid at any time after the loan has
been in existence for at least one year.
(h) A Participant may apply for a general purpose loan
only once in any 36-month period. In addition, a Participant must
wait 12 months after repaying a loan before receiving a new loan.
(i) A Participant may have only one home loan and one
general purpose loan outstanding at any time.
(j) The minimum amount of any loan shall be $1,000 and
must be in multiples of $100.
The Trustee shall maintain a separate account for each Participant
loan as granted pursuant to this section. The Loan Account shall consist of a
principal subaccount and an interest subaccount. The principal subaccount
shall be reduced, from time to time as received, by the Participant's payment
of principal. There shall be added to the interest subaccount, from time to
time as received, all interest paid by the Participant. There shall be
deducted from the interest subaccount, from time to time as incurred, all
expenses of the administration of the Loan Account. Payments by the
Participant shall be applied first to the payment of interest and then to
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principal, and following the above accounting, shall be invested in the
various Funds in accordance with the Participant's then current directions.
If procedures have been established by the Administrative
Committee, collateral to secure repayment of a loan may include real or
personal property. If real property is given as collateral, it shall be
pledged by a mortgage which shall be properly recorded. If a loan is not
repaid when due, the Administrative Committee shall take all such actions as
are appropriate to collect the debt and such actions shall include in each
case in which real property has been pledged, first foreclosing on the
mortgage or taking the property given as security and only secondarily shall
the Administrative Committee seek recovery from the Participant's Loan
Account.
10.12 Distribution of Excess Tax Deferred Contributions.
Notwithstanding any other provision of this Plan, Excess Tax Deferred
Contributions and income attributable thereto shall be distributed no later
than the April 15 following the calendar year for which the Participant claims
Excess Tax Deferred Contributions. The Participant's claim must be in
writing; must be submitted to the Administrative Committee no later than March
1 of the calendar year following the calendar year of the Excess Tax Deferred
Contributions; must specify the amount of the Participant's Excess Tax
Deferred Contributions for the preceding calendar year; and must be
accompanied by a written statement of the Participant that if such amounts are
not distributed, the Excess Tax Deferred Contributions, when added to amounts
deferred under other plans or arrangements described in sections 401(k),
408(k) or 403(b) of the Code, exceed the limit imposed on the Participant by
section 402(g) of the Code for the calendar year in which the contributions
were made.
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The Excess Tax Deferred Contributions distributed to a Participant
with respect to a calendar year shall be adjusted for income and, if there is
a loss allocable to the Excess Tax Deferred Contributions, shall in no event
be less than the lesser of the Participant's Tax Deferred Contributions
Account under the Plan or the Participant's Tax Deferred Contributions for the
calendar year.
10.13 Restrictions on Distributions of Tax Deferred Contributions
and Matching Contributions. Amounts from a Participant's Tax Deferred
Contributions Account and Employer Matching Contributions Account may not be
distributed from the Plan earlier than the earliest of:
(a) retirement, separation from service, death or
disability of the Participant;
(b) attainment of age 59 1/2 by the Participant;
(c) termination of the Plan without establishment or
maintenance of another Defined Contribution Plan [other than an
employee stock ownership plan, as defined in section 4975(e)(7) of
the Code];
(d) disposition of substantially all of the assets of the
Employer to an entity that is not an affiliated employer but only
with respect to a Participant who continues employment with the
purchaser of such assets; or
(e) the sale of a subsidiary of the Employer to an entity
that is not an affiliated employer, but only with respect to a
Participant who continues employment with such subsidiary.
A distribution pursuant to subparagraph (c), subparagraph (d) or subparagraph
(e) shall be permissible only if made in a lump sum, pursuant to section
401(k)(10)(B) of the Code.
In addition, tax deferred contributions (excluding any earnings
thereon) may be distributed upon hardship of the Participant determined in
accordance with section 401(k) of the Code.
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ARTICLE XI
TRUST
11.01 Acknowledgment of Fiduciary Status. By executing this
instrument, the Trustee agrees to be a Named Fiduciary within the meaning of
ERISA.
11.02 Terms of the Indenture to Govern. The Trustee shall hold
and administer the Trust Fund according to the terms of this document. The
Trustee shall make payments from the Trust Fund only upon and according to the
written directions of the Administrative Committee. The Trustee shall have no
duty to inquire as to any application of the payments unless specifically
stated herein.
11.03 Allocation of Funds. The Trustee shall credit (a) to the
Employer Contributions Account of each Participant the amount of Employer
contributions made pursuant to section 3.01(a) and allocated to such person in
accordance with section 6.01; (b) to the Tax Deferred Contributions Account of
each Participant the amount contributed by the Employer for such person
pursuant to section 3.01(b); (c) to the Matching Contributions Account of each
Participant the amount contributed by the Employer for such person pursuant to
section 3.01(c); and (d) to the Roll-In Contributions Account of each
Participant the amount of any contributions made by or on behalf of such
person pursuant to section 3.03, all as shown on a statement provided by the
Administrative Committee.
11.04 Investment of Funds. Subject to section 7.01, the Trustee
shall invest and reinvest the principal and income of the Trust Fund, without
distinction between principal and income, in bonds; notes; debentures; shares
of stock; shares of a registered investment company; mortgages; mutual funds;
annuity contracts or investment contracts issued by an insurance company
authorized to do business in the State of Michigan; and/or collective
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investment trust which then provides for the pooling of the assets of plans
described in section 401(a) of the Code and exempt from taxation under section
501(a) thereof, provided such collective investment trust is exempt from tax
under the Code, regulations or rulings issued by the Internal Revenue Service
and is then maintained by the Trustee or any other bank or trust company which
is affiliated with the Trustee. (The provisions of the document governing any
such collective investment trust, as amended from time to time, shall govern
any investment therein and are hereby made a part of this Plan as fully as if
set forth herein.) In addition, the Trustee is authorized to commingle the
assets of the Trust Fund in any common trust fund which is qualified for tax
exemption pursuant to section 584 of the Code, maintained by a bank which is
the Trustee or a co-Trustee, or any bank which is affiliated with the Trustee
or co-Trustee in accordance with the requirements of section 584 of the Code.
The Trustee may also keep such portions of the Trust Fund in cash
or cash balances as it determines to be in the best interests of Participants,
Former Participants and beneficiaries.
If an investment manager is appointed pursuant to section 2.03,
the Trustee shall invest the assets of the Trust Fund (or that portion of the
Trust Fund over which the investment manager has investment authority) in
accordance with the instructions which may from time to time be given by the
investment manager, provided the instructions are consistent with the
investment authority in this section. Subject to the foregoing, the Trustee
shall not be obligated to inquire into the competency of the person so
designated as investment manager, nor shall the Trustee be obligated to review
the desirability, prudence, reasonableness or soundness of any instructions
rendered by such investment manager. The Trustee shall not be responsible nor
shall the Trustee incur any liability for any depreciation or loss which may
be realized by the Trust Fund as a result of investments made pursuant to the
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instructions of such investment manager, and the Trustee shall have no duty to
review or to make recommendations with respect thereto. The fees of the
investment manager shall be paid from the Trust Fund or by the Company, as
directed by the Administrator.
The Trustee shall not make any investment which would be a
prohibited transaction under the Act or the Code, unless a statutory or
administrative exemption exists covering that investment.
11.05 Valuation of Assets. The Trustee shall value the assets of
the Trust Fund at least annually (as of the last day of the Plan Year) and
more frequently if so directed by the Administrative Committee at their fair
market values. The Accounts of each person shall then be adjusted by
apportioning the Trust Fund among the affected Accounts in the manner
described in article VIII.
11.06 Distributions by Trustee. The Trustee shall make dis-
tributions from the Trust Fund to Participants, Former Participants and
beneficiaries, as directed by the Administrative Committee.
11.07 Powers of Trustee. Subject to the limitations in section
11.04, the Trustee is authorized and empowered:
(a) To sell, convey, exchange, mortgage, pledge, option, lease
for any term of years irrespective of the period of the Trust Fund hereunder
and with or without privilege or option to purchase (including 99-year leases
renewable forever), or otherwise deal in and dispose of all or any part of the
trust property, without order of court, at public or private sale, for cash or
on credit, for such considerations and on such terms and conditions as the
Trustee, in its uncontrolled discretion, may deem either necessary, advisable
or expedient; and no purchaser, mortgagee, pledgee, optionee, lessee, or any
other person or persons dealing with the Trustee shall be required or
permitted to see to the application of any purchase money or trust funds, or
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be required or permitted to inquire into the power or authority of the Trustee
or into the validity, necessity, advisability or expediency of any act of the
Trustee;
(b) To vote upon any stocks, bonds or other securities; to give
general or special proxies or powers of attorney, with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options and to make any payments incidental thereto; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities or other property held by the Trustee;
(c) To make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to carry out the powers herein granted;
(d) To carry any investment held in the Trust Fund in bearer
form; to cause such investments to be registered and carried in its own name
or in the name of a nominee, with or without disclosing any fiduciary
relationship; to permit investments of the Trust Fund to be held in a
depository, with such holding permitted to be in bearer form or registered and
carried in the name of the depository or the depository's nominee provided
that the records of the Trust Fund clearly show the ownership of such
investments to be in the Trustee;
(e) To invest funds in time deposits or savings accounts bearing
a reasonable rate of interest in the Trustee's bank; and
(f) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation from the Trust Fund.
11.08 Resignation and Replacement. The Trustee may resign by
giving 30 days' written notice to the Administrative Committee. The
Partnership Committee may remove the Trustee by giving 30 days' written notice
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to the Trustee. A successor trustee shall be appointed by the Partnership
Committee. The successor trustee shall have the same rights and duties as its
predecessor.
11.09 Bond and Expenses. The Trustee shall be bonded in the
amount required by the Act, provided, however, no bond shall be required of
the Trustee if the Trustee is not required to be bonded by the Act. The cost
of any such bond shall be paid by the Trustee. The Trustee's compensation
shall be an amount agreed to in writing by the Partnership Committee and the
Trustee. The Trustee shall also be reimbursed for any reasonable expenses it
incurs in the administration of the Trust Fund. Compensation and expenses of
the Trustee shall be paid by the Employer or shall be charged against the
Trust Fund, as directed by the Administrative Committee.
11.10 Liability. The Trustee shall not be liable for following
directions of the Administrative Committee.
11.11 Fiduciary Duty. The Trustee shall discharge its duties to
the Plan solely in the interest of the Participants, Former Participants, and
Beneficiaries, and for the exclusive purpose of providing benefits and
defraying reasonable expenses of administering the Plan and Trust Fund. The
Trustee shall discharge its duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man, acting
in a like capacity and familiar with such matters, would use in the conduct of
a trust of a like character and with like aims, and shall diversify the assets
of the Trust Fund to minimize risk of large losses, unless under the
circumstances it is clearly prudent not to do so. The Trustee shall discharge
its duties in accordance with the provisions of this instrument, to the extent
they are consistent with applicable law.
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11.12 Taxes. All taxes assessed against the Trust Fund shall be
a lien against the Trust Fund until paid by the Trustee, as directed by the
Administrative Committee.
11.13 Termination. If the Plan is terminated, the Trustee shall
dispose of the Trust Fund in accordance with the provisions of the Plan.
11.14 Statement of Accounts. The Trustee shall provide the
Administrative Committee with an annual statement of the Trustee's accounts
and proceedings during the previous Plan Year. Unless any objections to the
statement are filed in writing with the Trustee within 60 days after delivery
of the statement to the Administrative Committee, the statement shall be a
final accounting by and discharge of the Trustee for the Plan Year, and shall
be binding on the Employer, the Participants, Former Participants,
beneficiaries, Partnership Committee, Administrative Committee, and all other
persons having an interest in the Trust Fund. No Employee, Participant,
Former Participant, beneficiary, or other person having an interest in the
Trust Fund shall have the right to demand, or be entitled to, any further
accounting by the Trustee.
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ARTICLE XII
AMENDMENT AND TERMINATION OF THE PLAN
12.01 Amendment. The Employer reserves the right, at any time
and from time to time by action of its Partnership Committee, to amend in
whole or part either retroactively or prospectively any or all of the
provisions of the Plan without the consent of any Participant or his or her
beneficiaries hereunder, except as so limited by article II. Such amendment
shall be stated in an instrument executed on behalf of the Employer in the
same manner and form as the Plan and upon the execution thereof, the Plan
shall be deemed to have been amended in the manner therein set forth and the
Employer, the Trustee, all Participants and their beneficiaries hereunder
shall be bound thereby. However, that no amendment shall:
(a) authorize, cause or permit any part of the Trust Fund
(other than such part as is required to pay taxes and
administration expenses) to be used or diverted to purposes other
than the exclusive benefit of the Participants, Former
Participants or their beneficiaries or estates (subject to section
3.05, section 13.02 and section 13.09),
(b) have the effect of vesting in the Employer any
interest in or control over any policies of insurance purchased
hereunder or over any part of the Trust Fund subject to the terms
of the Plan, or
(c) have any retroactive effect so as to deprive any
Participant of his or her nonforfeitable interest already accrued,
or eliminate an optional form of benefit to the extent not
permitted by regulations issued by the Internal Revenue Service,
provided, however, any amendment may be made retroactive which is
necessary to conform the Plan to mandatory provisions of Federal
or State law, regulations or rulings.
12.02 Plan Termination or Discontinuance of Contributions. The
Employer shall have the right, at any time, to terminate the Plan. Upon such
termination, or any partial termination, the entire interest of each
Participant's Accounts shall become nonforfeitable. Upon the discontinuance of
the Employer's contributions or suspension thereof on other than a temporary
basis, the entire interest of each Participant's Accounts shall become
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nonforfeitable. Any unallocated funds existing at the time of such
termination or discontinuance shall be allocated to the then Participants in
the same manner as Employer contributions under section 6.01. No termination
of the Plan shall have the effect of vesting in the Employer any interest in
or control over any part of the Trust Fund.
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ARTICLE XIII
MISCELLANEOUS
13.01 Participants' Rights. Neither the establishment of the
Plan and the Trust, nor any modification thereof, nor the creation of any fund
or account, nor any distributions hereunder, shall be construed as giving to
any Participant, Former Participant, beneficiary or other person any legal or
equitable right against the Employer, or any officer or Employee thereof, or
the Trustee, or the Administrative Committee except as herein provided. Under
no circumstances shall the terms of employment of any Participant be modified
or in any way affected thereby.
13.02 Prohibition Against Reversion. Except as provided in
section 3.05, no principal or income of the Trust Fund shall be used for or
diverted to the Employer or be used for or diverted to purposes other than the
exclusive benefit of Participants, Former Participants, and their
beneficiaries. The use of forfeitures to reduce Employer contributions to the
Plan shall not be deemed a reversion.
13.03 Assignment or Alienation of Benefits. No benefit or
interest available hereunder will be subject to assignment or alienation,
either voluntarily or involuntarily. The preceding sentence shall also apply
to the creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant or Former Participant pursuant to a domestic
relations order, unless such order is a qualified domestic relations order as
defined in section 414(p) of the Code.
13.04 Third Party Immunity. No third party including but not
limited to life insurance companies and regulated investment companies shall
be deemed to be a party to this Plan for any purpose or to be responsible for
the validity of this Plan; nor shall such third party be required to take
cognizance of the Trustee, the Partnership Committee or the Administrative
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Committee nor shall such third party be responsible to see that any action of
the Trustee, the Partnership Committee or the Administrative Committee is
authorized by the terms of this document. Any such third party shall be fully
discharged from any and all liability for any amount paid to the Trustee or
paid in accordance with the direction of the Trustee, the Partnership
Committee or the Administrative Committee, as the case may be, or for any
change made or action taken by such third party upon such direction; and no
such third party shall be obligated to see to the distribution or further
application of any monies so paid by such third party.
13.05 Delegation of Authority by Employer. Whenever the
Employer, under the terms of this Plan, is permitted or required to do or
perform any act or matter or thing, it shall be done and performed by any
officer thereunto duly authorized by its Partnership Committee.
13.06 Construction of Plan. To the extent not in conflict with
the provisions of the Act, all questions of interpretation of this instrument
shall be governed by the laws of the State of Michigan.
13.07 Gender and Number. Wherever any words are used herein in
the masculine gender, they shall be construed as though they were also used in
the feminine gender in all cases where they would so apply, and wherever any
words are used herein in the singular form, they shall be construed as though
they were also used in the plural form in all cases where they would so apply.
13.08 Claims Procedure. A claim for a Plan benefit shall be
deemed filed when a written communication is made by a Participant or
beneficiary, or the authorized representative of either, which is reasonably
calculated to bring the claim to the attention of the Administrative
Committee.
If a claim is wholly or partially denied, notice of such decision
shall be furnished to the claimant in writing within 90 days after receipt of
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the claim by the Administrative Committee. Such notice shall set forth, in a
manner calculated to be understood by the claimant: (1) the specific reason
or reasons for the denial; (2) specific reference to pertinent Plan provisions
on which the denial is based; (3) a description of any additional material or
information necessary 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.
Within 90 days from the receipt of the notice of denial, a
claimant may appeal such denial to the Administrative Committee for a full and
fair review. The review shall be instituted by the filing of a written
request for review by the claimant or his authorized representative within the
90-day period stated above. A request for review shall be deemed filed as of
the date of receipt of such written request by the Administrative Committee.
The claimant or his authorized representative shall have the right to review
all pertinent documents, may submit issues and comments in writing and may do
such other appropriate things as the Administrative Committee may allow. The
decision of the Administrative Committee shall be made not later than 60 days
after the receipt of the request for review; unless special circumstances,
such as the need to hold a hearing, requires an extension of time, in which
case, a decision shall be rendered not later than 120 days after the receipt
of a request for review which decision shall be final and binding on such
claimant.
13.09 Plan Contingent Upon Commissioner's Approval.
(a) This Plan is contingent upon and subject to obtaining such
initial approval, or subsequent approval resulting from an amendment or
restatement of this Plan, of the Commissioner of Internal Revenue as may be
necessary to establish the deductibility for income tax purposes of any and
all contributions made by the Employer under this Plan as being qualified for
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tax exemption under the provisions of section 401(a) or other applicable
provisions of the Internal Revenue Code. If such approval is not obtained all
contributions made by the Employer shall be returned to the Employer by the
Trustee. Any modification or amendment of the Plan may be made retroactively,
if necessary or appropriate, to qualify or maintain the Plan as a plan and
trust meeting the requirements of section 401 and 404(a) of the Internal
Revenue Code now in effect or hereafter amended or adopted, and the
regulations issued thereunder.
(b) Notwithstanding any provision in this Plan to the contrary,
no Participant or beneficiary shall have any right or claim to any assets of
the Trust or to any benefit under the plan before the Internal Revenue Service
determines that the Plan and Trust qualify under the provisions of section
401(a) of the Code or any statute of similar import.
(c) Upon the return of all contributions to the Employer, as
provided in (a) hereof, the Trust shall terminate and the Trustee shall be
discharged from all obligations under the Trust.
13.10 Merger, Consolidation, or Transfer of Assets. This Plan
may be merged, consolidated, or its assets or liabilities transferred to any
other plan provided each Participant would receive a benefit immediately after
such merger, consolidation, or transfer, if the Plan then terminated, which is
equal to or greater than the benefit he would have received immediately prior
to such merger, consolidation, or transfer if the Plan were to have terminated
on such date.
13.11 Allocation of Responsibilities. None of the allocated
responsibilities or any other responsibilities shall be shared by any two or
more Named Fiduciaries unless such sharing is provided by a specific provision
of this document. Whenever one Named Fiduciary is required to follow the
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directions of another Named Fiduciary, the responsibility shall be that of the
Named Fiduciary giving the directions.
13.12 Headings. Headings of sections are for general information
only, and this document is not to be construed by reference thereto.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14.01 Determination of Top-Heavy Status. The Plan will be top-
heavy for a Plan Year if the sum of (i) the cumulative Present Value of the
Accrued Benefits of Key Employees (excluding former Key Employees) in all
defined benefit plans comprising the Aggregation Group, and (ii) the aggregate
of the Account Balances of Key Employees (excluding former Key Employees) in
all defined contribution plans comprising the Aggregation Group, exceeds 60
percent of such sums for all Participants. Notwithstanding the foregoing, if
the Permissive Aggregation Group is top-heavy, the provisions of section 14.02
shall apply only to the qualified plans comprising the Required Aggregation
Group.
The Account Balances and the Present Value of the Accrued Benefits
of a Former Participant who has not received earnings from the Company or an
Employer during the five-year period ending on the Determination Date will be
disregarded. However, should such person later become a Participant, the
Account Balance and the Present Value of the Accrued Benefit shall be
recognized for purposes of determining the Plan's top-heavy status unless the
prior sentence applies.
14.02 Consequences of Top-Heavy Status.
(a) Vesting. If the Plan is top-heavy for any Plan Year
pursuant to section 14.01, the nonforfeitability of the Accrued Benefit of
each Participant shall be determined in accordance with the schedule in
section 10.03.
(b) Benefits. If the Plan is top-heavy for any Plan Year
pursuant to section 14.01, the minimum allocation (including forfeitures) for
each Participant shall be equal to at least 3 percent of such Participant's
Compensation during the Plan Year. However, if during such Plan Year the
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amount allocated to the accounts of Key Employees is less than 3 percent of
such persons' Compensation, the allocation to the account of a Participant who
is a Non-Key Employee shall be the same percentage as that allocated to the
account of that Participant who was the highest paid Key Employee.
The foregoing allocation requirements shall apply only to a person
who
(1) is a Participant in the Plan during the Plan Year it is
top-heavy,
(2) has not separated from service at the end of the Plan
Year, (regardless of how many Hours of Service such person
completed during the Plan Year),
(3) is a Non-Key Employee, and
(4) participates only in a defined contribution plan.
If an Employee is participating in a defined benefit plan and a
defined contribution plan maintained by the Company during a Plan Year both
plans are top-heavy, the three percent minimum allocation in this subsection
shall be increased to 5 percent for Participants described in the prior
paragraph, and the dollar limitation in section 3.07 shall be reduced to 1.0
from 1.25 (as indicated in such section) for the Plan Year in which the plans
are top-heavy. In the alternative, however, if an Employee is participating
in a defined benefit plan and a defined contribution plan maintained by the
Company during a Plan Year both plans are top-heavy, the 3 percent minimum
allocation in the prior paragraph shall be increased to 7 1/2 percent for
Participants described in the prior paragraph, and the dollar limitation in
section 3.07 shall remain unchanged at 1.25 for such Plan Year. (The
preceding sentence, however, shall be subject to section 14.06.)
Contributions made pursuant to a salary or wage deferral shall be
taken into account when determining if the minimum contribution required by
this subparagraph has been made.
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(c) Compensation Limitation. If the Plan is top-heavy during a
Plan Year, the Compensation of each Participant during such year shall be the
lesser of such Participant's Compensation, or $200,000 (adjusted automatically
for changes in the cost of living, as announced by the Secretary of the
Treasury). Compensation before an Employee became a Participant shall be
disregarded.
14.03 Definitions. The following definitions shall apply for
purposes of this article:
(a) Account Balance. Subject to section 14.01, Account Balance
means the sum of (i) the Participant's account balance in a Defined
Contribution Plan (including contributions made pursuant to a wage or salary
reduction arrangement) as of the most recent valuation date occurring within a
12-month period ending on the Determination Date, and (ii) an adjustment for
contributions due on behalf of the Participant as of the Determination Date,
as more fully described in the regulations to section 416 of the Code.
(b) Aggregation Group. Aggregation Group means the Required
Aggregation Group or the Permissive Aggregation Group, as determined by the
Administrator.
(c) Compensation. Subject to section 14.02(c), Compensation
means a Participant's wages, salaries and fees for professional services, and
other amounts received for personal service actually rendered in the course of
employment with the Employer while a Participant (including, but not limited
to, commissions paid to salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses),
but excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not included in 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 plan of deferred compensation;
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(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).
(d) Determination Date. Determination Date means the last day
of the preceding Plan Year, or in the case of the first Plan Year, the last
day of such Plan Year.
(e) Key Employee. Key Employee means any Participant or Former
Participant (and the beneficiaries of such person) who at any time during the
determination period was (1) an officer of the Employer having compensation
greater than 50 percent of the amount in effect under section 415(b)(1)(A) of
the Code for any such Plan Year, (2) one of the ten Employees whose
Compensation is greater than the limit in effect under section 415(c)(1)(A) of
the Code and owning or considered as owning (within the meaning of section 318
of the Code) both more than 1/2 percent interest and the largest interests in
the Employer, (3) a 5 percent owner of the Company, or (4) a 1 percent owner
of the Employer whose Compensation exceeds $150,000. The determination period
is the Plan Year containing the Determination Date and the four preceding Plan
Years. For purposes of clause (1), no more than 50 Employees (or, if lesser,
the greater of 3 or 10 percent of the number of Employees) shall be treated as
officers. For purposes of clause (2), if two Employees have the same
ownership interest in the Employer, the Employee having the greater
Compensation shall be treated as having the larger interest.
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The determination of who is a Key Employee will be made (1) in
accordance with section 416(i) of the Code and the regulations thereunder, and
(2) without regard to the aggregation rules in section 414(b), section 414(c)
and section 414(m) of the Code.
(f) Non-Key Employee. Non-Key Employee means an Employee who is
not a Key Employee.
(g) Permissive Aggregation Group. Permissive Aggregation Group
means the Required Aggregation Group, and one or more qualified plans main-
tained by the Company which, together with the Required Aggregation Group,
satisfy the provisions of section 401(a)(4) and section 410 of the Code.
(h) Present Value of the Accrued Benefit. Subject to
section 14.01, Present Value of the Accrued Benefit means the value of a
Participant's benefit under a defined benefit plan, determined as of the most
recent valuation date within the 12-month period ending on the Determination
Date, and determined as if the Participant terminated service at that
valuation date. Notwithstanding the foregoing, during a Plan's first Plan
Year, the value shall be determined as if the Participant terminated service
as of the Determination Date, or as if the Participant terminated service as
of the valuation date, but taking into account the estimated Accrued Benefit
as of the Determination Date. The valuation date shall be the valuation date
used for computing costs for purposes of the minimum funding provisions of the
Code.
(i) Required Aggregation Group. Required Aggregation Group
means (1) any qualified plan maintained by the Company in which a Key Employee
participates, and (2) any other plan maintained by the Employer which enables
any qualified plan in which a Key Employee participates to satisfy the
provisions of section 401(a)(4) or section 410 of the Code.
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(j) Top-Heavy Group. Top-Heavy Group means any Aggregation
Group, if the provisions of section 14.01 apply.
14.04 Miscellaneous. For purposes of this article, the determi-
nation of the Present Value of the Accrued Benefit and the Account Balance
shall include any voluntary and mandatory contributions (excluding voluntary
deductible contributions, if otherwise permitted), and distributions to the
former Participant and such person's beneficiary made within the Plan Year
which includes the Determination Date, as well as within the four preceding
Plan Years. Rollovers and plan-to-plan transfers which are not initiated by
the Participant or which are made to a plan maintained by the Company shall be
counted by the receiving plan in determining the Present Value of the Accrued
Benefit and the Account Balance. Rollovers and plan-to-plan transfers which
are initiated by the Participant and which are transferred to another
company's plan shall be counted by the distributing plan when determining the
Present Value of the Accrued Benefit and the Account Balance.
14.05 Super Top-Heavy. The Plan will be super top-heavy for a
Plan Year if the sum of (i) the cumulative Present Value of the Accrued
Benefit of Key Employees (excluding former Key Employees) in all defined
benefit plans comprising the Aggregation Group, and (ii) the aggregate of the
Account Balances of Key Employees (excluding former Key Employees) in all
defined contribution plans comprising the Aggregation Group, exceeds 90
percent of such sums for all Participants. Notwithstanding the foregoing, if
the Permissive Aggregation Group is top-heavy, the provisions of section 14.02
shall apply only to the qualified plans comprising the Required Aggregation
Group.
14.06 Consequences of Super Top-Heavy Status. If the Plan is
super top-heavy for any Plan Year, the dollar limitation in section 3.08 shall
be multiplied by 1.0, rather than 1.25 (as indicated in such section) for such
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Plan Year, and the 5 percent minimum contribution described in section 14.02
shall apply. However, the preceding provisions shall apply only if a Key
Employee is a Participant in both a defined benefit plan and a defined
contribution plan maintained by the Employer.
IN WITNESS WHEREOF, the Employer and the Trustee have caused this
document to be executed by duly authorized officers on this _____ day of
_______________, 1992, but effective as of July 1, 1989.
AEROQUIP INOAC COMPANY
By _________________________________
Peng-Li Liu, Vice President -
Planning and Control
NATIONAL CITY BANK, NORTHWEST
(formerly Ohio Citizens Bank),
TRUSTEE
By _________________________________
Vice President
By _________________________________
Assistant Vice President
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EXHIBIT 4(d)
FIRST AMENDMENT TO AEROQUIP INOAC COMPANY
RETIREMENT SAVINGS AND PROFIT SHARING PLAN
WHEREAS, the Aeroquip Inoac Company Retirement Savings and Profit
Sharing Plan (formerly known as the Sterling Inoac Company Retirement Savings
and Profit Sharing Plan) ("Plan") was established effective July 1, 1989; and
WHEREAS, the Plan was subsequently amended and restated by a
document executed on March 8, 1993, effective July 1, 1989; and
WHEREAS, in order to obtain a favorable determination letter from
the Internal Revenue Service as to the tax-exempt status of the Plan, it is
necessary to make certain changes in the Plan as submitted to the Internal
Revenue Service.
WHEREAS, section 12.01 of the Plan permits amendment thereof under
certain circumstances.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 1.06 entitled "Annual Compensation" shall be, and
the same hereby is, amended by adding the following three paragraphs at the
end thereof:
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994,
the Annual Compensation of each Employee taken into account under
the Plan shall not exceed the Omnibus Budget Reconciliation Act of
1993 ("OBRA'93") Annual Compensation limit. The OBRA'93 Annual
Compensation limit is $150,000, as adjusted by the Commissioner
for increases in the cost of living in accordance with sec-
tion 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA'93 Annual
Compensation limit will be multiplied by a fraction, the numerator
of which is the number of months in the determination period, and
the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in the Plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA'93 Annual Compensation limit set
forth in this provision.
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If compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in the
current Plan Year, the compensation for that prior determination
period is subject to the OBRA'93 Annual Compensation limit in
effect for that prior determination period. For this purpose, for
determination periods before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA'93 Annual
Compensation limit is $150,000
2. The first paragraph of section 10.09 entitled "Transfer of
Accounts" shall be, and the same hereby is, deleted in its entirety.
3. A new section to be designated section 10.14 and to be
entitled "Eligible Rollover Distributions" shall be, and the same hereby is,
added effective January 1, 1993:
10.14. Eligible Rollover Distributions.
(a) This Section 10.14 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's
election under this Section 10.14, a distributee may elect, at the
time and in the manner prescribed by the Administrative Committee,
to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) Definitions.
(i) Eligible Rollover Distribution. 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).
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(ii) Eligible Retirement Plan. 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 distri-
bution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(iii) Distributee. 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.
(iv) Direct Rollover. A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
(v) Waiver of 30-Day Notice. If a distribution
is one to which sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice
required under section 1.411(a)-11(c) of the Income
Tax Regulations is given, provided that:
(1) the Administrative Committee clearly
informs the Participant that the Participant has
a right to a period of at least 30 days after
receiving the notice to consider the decision of
whether or not to elect a distribution (and,if
applicable, a particular distribution option),
and
(2) the Participant, after receiving the
notice, affirmatively elects a distribution.
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IN WITNESS WHEREOF, the Partnership Committee has caused this
First Amendment to be executed by a duly authorized individual on this _____
day of May, 1994, but effective as of July 1, 1989, except as otherwise noted.
____________________________________
Member of the Partnership Committee
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EXHIBIT 4(e)
SECOND AMENDMENT TO AEROQUIP INOAC COMPANY
RETIREMENT SAVINGS AND PROFIT SHARING PLAN
WHEREAS, the Aeroquip Inoac Company Retirement Savings and Profit
Sharing Plan (formerly known as the Sterling Inoac Company Retirement Savings
and Profit Sharing Plan) ("Plan") was established effective July 1, 1989; and
WHEREAS, the Plan was subsequently amended and restated by a
document executed on March 8, 1993, effective July 1, 1989; and
WHEREAS, in order to obtain a favorable determination letter from
the Internal Revenue Service as to the tax-qualified status of the Plan, an
amendment to the Plan was adopted effective July 1, 1989; and
WHEREAS, certain additional changes to the Plan are deemed
necessary; and
WHEREAS, section 12.01 of the Plan permits amendment thereof under
certain circumstances.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 1.02, entitled "Accounting Date," shall be, and the
same hereby is, amended to state as follows:
1.02 "Accounting Date" means the end of each business day.
2. Section 1.40, entitled "Transfer Date," shall be, and the
same hereby is, amended to state as follows:
1.40 "Transfer Date" means any date as of which an Account
may be transferred to or from any of the Funds described in
Article VII, as established by the Administrative Committee.
3. Section 2.01, entitled "Allocation of Responsibility for
Plan Administration," shall be, and the same hereby is, amended to state as
follows:
2.01 Allocation of Responsibility for Plan Administration.
The fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them
hereunder. The Employer shall have the sole responsibility for
making the contributions provided for in section 3.01. The
Partnership Committee shall have the sole authority to appoint and
remove (with or without cause) any member of the Administrative
Committee. The Partnership Committee shall also have the sole
authority to appoint and remove the Trustee and any investment
manager and to establish the investment media. The Administrative
Committee shall have the specific delegated powers and duties
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described in the further provisions of this article II, and such further
powers and duties as hereinafter may be delegated to it by the
Partnership Committee. The Trustee shall have the responsibility for
the management of the Trust, as provided in the Trust Agreement. Each
fiduciary warrants that any directions given, information furnished, or
action taken by it shall be in accordance with the provisions of the
Plan or the Trust Agreement, as the case may be, authorizing or
providing for such direction, information or action. Furthermore, each
fiduciary may rely upon any such direction, information or action of
another fiduciary as being proper under the provisions of the Plan or
the Trust Agreement, and is not required to inquire into the propriety
of any such direction, information or action. It is intended that each
fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under the Plan and the
Trust Agreement and shall not be responsible for any act or failure to
act of another fiduciary. No fiduciary guarantees the Trust Fund in any
manner against investment loss or depreciation in asset value.
4. Section 2.04, entitled "Plan Fiduciaries and Fiduciary
Obligations," shall be, and the same hereby is, amended by deleting the second
paragraph therefrom and by substituting therefor the following:
Each person who is a fiduciary shall discharge his duties
with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims, and in
accordance with the provisions of the Plan and the Trust
Agreement. A fiduciary who complies with the foregoing standards
shall not be liable for any loss, action or omission hereunder. A
fiduciary not charged with a specific responsibility under the
provisions of the Plan or the Trust Agreement shall be under no
duty to question any action or lack of action of another fiduciary
with respect to such responsibility and shall not be liable for a
breach of such fiduciary responsibility by another fiduciary
unless such person participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other fiduciary
knowing such act is a breach, or if such person has knowledge of a
breach by such fiduciary and fails to make reasonable efforts
under the circumstances to remedy the breach.
5. Section 3.02, entitled "Tax Deferred Contributions," shall
be, and the same hereby is, amended by deleting the first paragraph thereof
and by substituting therefor the following:
In accordance with procedures established by the
Administrative Committee, each eligible Participant may elect to
defer the equivalent of no more than 15 percent of his or her
Annual Compensation (in 1 percent increments) for each pay period
that such person is a Participant. The Participant's election
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shall be made at such time and in such manner as the Administrative
Committee shall determine. Said election shall remain in effect until
revoked or superseded by a subsequent election pursuant to procedures
established by the Administrative Committee. A Participant may elect to
begin, or may change the amount of, his or her Tax Deferred
Contributions in accordance with procedures established by the
Administrative Committee.
6. Article VII, entitled "Investment of the Trust Fund," shall
be, and the same hereby is, amended to state as follows:
ARTICLE VII
INVESTMENT OF THE TRUST FUND
The Trust Fund shall consist of the following separate
investment funds:
(a) TRINOVA Stock Fund.
(b) Vanguard Investment Contract Trust.
(c) Vanguard Index Trust - 500 Portfolio Fund.
(d) Vanguard/Windsor II Fund.
(e) Vanguard/Morgan Growth Fund.
(f) Vanguard International Growth Portfolio Fund.
(g) Vanguard STAR Fund.
(h) Vanguard Money Market Reserves - U. S. Treasury
Portfolio.
(i) Vanguard Fixed Income Securities - Long Term Corporate
Portfolio.
As of any Transfer Date, each Participant, Former
Participant and Beneficiary may elect to have a percentage of the
value of one or more of his or her Fund balances immediately
preceding the Transfer Date transferred to an equivalent value in
any one or more of such Funds. The election shall be made at such
time and in such manner as the Administrative Committee may from
time to time determine and shall be effective as soon as
administratively practicable following the first Transfer Date
following the election. (To the extent an administrative delay
occurs in the transfer of an Account from one Fund to another,
such Account may be temporarily invested in a short term
investment vehicle pending such actual transfer.) Such election
shall remain effective until revoked or superseded by a subsequent
election pursuant to
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procedures established by the Administrative Committee. Notwithstanding
the foregoing, however, an election by a Participant, Former Participant
or Beneficiary to transfer all or any portion of his or her Account from
the Vanguard Investment Contract Trust to either the Vanguard Money
Market Reserves - U.S. Treasury Portfolio, the Vanguard Fixed Income
Securities - Long Term Corporate Portfolio, or both, shall not be
permitted and shall not be given effect. In addition, an election by a
Participant, Former Participant or Beneficiary to transfer all or any
portion of his or her Account from any of the investment funds other
than the Vanguard Money Market Reserves - U.S. Treasury Portfolio or the
Vanguard Fixed Income Securities - Long Term Corporate Portfolio (or
both) to either or both of such Portfolios shall not be permitted and
shall not be given effect unless the amount to be transferred has not
been invested in the Vanguard Investment Contract Trust during the
immediately preceding 90-day period.
If a Participant fails to make an election upon first
becoming eligible to do so, he or she shall be deemed to have
elected to place 100 percent of his or her Accounts in the
Vanguard Money Market Reserves - U. S. Treasury Portfolio.
7. Article VIII, entitled "Valuation of Trust Fund," shall be,
and the same hereby is, amended to state as follows:
ARTICLE VIII
VALUATION OF TRUST FUND
As of each Accounting Date, the Trustee shall determine the
net income or net loss for each Fund since the preceding
Accounting Date, including any unrealized appreciation or
depreciation in the value of such Fund as well as any realized
income, gain, expenses and losses. Such determination of net
income or net loss shall be conclusive and binding upon all
Participants, Former Participants and Beneficiaries. If an
investment manager has been appointed to handle a specific Fund,
the Trustee shall be entitled to rely upon the information
supplied by the investment manager as to the value of such Fund on
the Accounting Date.
After determining the value of each Fund, the Accounts
comprising each Fund shall be credited or debited with their share
of the net income or net loss of each such Fund in the proportion
that the value of the each Account as of the preceding Accounting
Date bears to the total value of all Accounts in such Fund as so
adjusted. The Account in each Fund shall then be credited with
any contributions since the immediately prior Accounting Date.
8. Section 10.11, entitled "Loans to Participants," shall be,
and the same hereby is, amended to state as follows:
10.11. Loans to Participants. A general purpose loan and a home
loan shall be available to a Participant who is an Employee from
his or her Accounts, upon the terms and conditions which follow.
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The maximum amount which may be borrowed is the lesser of
(i) 50 percent of the Participant's nonforfeitable interest in his or
her Accounts or (ii) 100 percent of the Participant's nonforfeitable
interest in his or her Tax Deferred Contributions Account, Matching
Contributions Account and Roll-In Contributions Account.
Notwithstanding the preceding paragraph, however, in no
event shall the total amount which may be borrowed exceed the
lesser of (i) $50,000, reduced by the excess (if any) of the
highest outstanding balance of loans during the one-year period
ending on the day before the date on which such loan was made,
over the outstanding balance of loans on the date on which such
loan was made, or (ii) one-half of the amount of such person's
Accounts which is nonforfeitable. These limits apply as if all
qualified plans maintained by the Employer and Company were one
plan.
Uniform rules and procedures pertaining to loans (which may
include the imposition of an administrative fee for processing
loans) shall be established, which shall be consistently applied.
In addition to such rules and procedures, however, all loans shall
comply with the following terms and conditions:
(a) An application for a loan shall be made in
writing to such entity as shall be designated by the
Administrative Committee to administer such loans.
(b) Each loan shall be made against collateral
being the assignment of no more than one-half of the
borrower's entire right, title and interest in his or
her Accounts and shall be evidenced by the borrower's
promissory note for the amount of the loan, including
interest, payable to the order of the Trustee.
(c) Interest shall be charged at a reasonable
rate, as determined by the Administrative Committee.
(d) All loans shall provide for payment by
payroll deduction of principal and interest in
installments over a period not to exceed five years.
Notwithstanding the foregoing, however, a home loan
shall provide for payment by payroll deduction of
principal and interest in installments over a period
not to exceed 10 years.
(e) Loans shall be amortized with level
payments over the term of the loan, and payments must
occur not less frequently than quarterly.
(f) A Participant may receive a general
purpose loan only once in any 12-month period.
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(g) A Participant may have only one general
purpose loan and one home loan outstanding at any
time.
(h) A loan may be prepaid at any time after
the loan has been outstanding for at least one year.
(i) The minimum amount of any loan shall be
$1,000.
Loan payments by the Participant shall be invested in the
various Funds in accordance with the Participant's then current
directions.
If a Participant who has an outstanding loan terminates
employment with the Employer and all Companies, such loan shall
thereupon become due and payable. The Administrative Committee
shall notify such Participant and afford him or her the
opportunity to pay the outstanding balance in full. However, if
the Participant fails or refuses to do so within such time period
specified by the Administrative Committee, such loan shall be in
default and the amount of the outstanding balance shall be offset
against the Participant's balance in the Plan.
If a Participant transfers employment from the Employer to a
Company, such person's obligations under the loan shall be the
same as if he or she were an Employee of the Employer.
For purposes hereof, a home loan is a loan used to acquire
any dwelling unit which within a reasonable time is to be used
(determined at the time the loan is made) as the principal
residence of the Participant. A general purpose loan is any other
type of loan.
9. Article XI, entitled "Trust," shall be, and the same hereby
is, amended to state as follows:
ARTICLE XI
TRUST
As a part of the Plan, the Employer has entered into a Trust
Agreement with the Trustee under which a Trust Fund has been
established and a Trustee appointed to receive Employer
contributions and Participant contributions to the Trust Fund and
to hold such funds and invest and reinvest the same. Compensation
and expenses of the Trustee shall be paid by the Employer, not
charged against the Trust Fund. However, any investment
management expenses relating to the Funds described in article VII
shall be charged against the particular Fund to which such
expenses are attributable.
10. Section 13.04, entitled "Third Party Immunity," shall be,
and the same hereby is, amended to state as follows:
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13.04 Third Party Immunity. No third party, including but
not limited to life insurance companies and regulated investment
companies, shall be deemed to be a party to this Plan for any
purpose or to be responsible for the validity of this Plan; nor
shall such third party be required to take cognizance of the
Trustee, the Partnership Committee or the Administrative Committee
nor shall such third party be responsible to see that any action
of the Trustee, the Partnership Committee or the Administrative
Committee is authorized by the terms of the Plan or the Trust
Agreement. Any such third party shall be fully discharged from
any and all liability for any amount paid to the Trustee or paid
in accordance with the direction of the Trustee, the Partnership
Committee or the Administrative Committee, as the case may be, or
for any change made or action taken by such third party upon such
direction; and no such third party shall be obligated to see to
the distribution or further application of any monies so paid by
such third party.
IN WITNESS WHEREOF, the Partnership Committee has caused this
Second Amendment to be executed by a duly authorized individual on this _____
day of June, 1996, but effective as of March 1, 1996.
Member of the Partnership Committee
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EXHIBIT 4(f)
THIRD AMENDMENT TO AEROQUIP INOAC COMPANY
RETIREMENT SAVINGS AND PROFIT SHARING PLAN
WHEREAS, the Aeroquip Inoac Company Retirement Savings and Profit
Sharing Plan (formerly known as the Sterling Inoac Company Retirement Savings
and Profit Sharing Plan) ("Plan") was established effective July 1, 1989; and
WHEREAS, the Plan was subsequently amended and restated by a document
executed on March 8, 1993, effective July 1, 1989 and thereafter by First and
Second Amendments thereto; and
WHEREAS, it is now desired to amend the Plan to add two additional
investment funds and to change the repayment period for home loans.
WHEREAS, section 12.01 of the Plan permits amendment thereof under
certain circumstances.
NOW, THEREFORE, the Plan is hereby amended as follows:
1. By adding the following subparagraphs to Article VII:
(j) Vanguard LIFEStrategy Fund - Conservative Growth
Portfolio.
(k) Vanguard LIFEStrategy Fund - Growth Portfolio.
2. By deleting subparagraph (d) from Section 10.11 and by substituting
therefor the following:
(d) All loans shall provide for payment by payroll
deduction of principal and interest in installments over a
period not to exceed five years. Notwithstanding the
foregoing, however, a home loan made after the date hereof
shall provide for payment by payroll deduction of principal
and interest in installments over a period not to exceed 20
years.
IN WITNESS WHEREOF, the Partnership Committee has caused this Third
Amendment to be executed by a duly authorized individual on this _____ day of
____________________, 1997, to be effective as of the date of execution.
Member of the Partnership Committee
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EXHIBIT 5
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P. O. BOX 2508
CINCINNATI, OH 45201
Employer Identification Number:
Date: MAR 18 1994 38-2788802
File Folder Number:
AEROQUIP INOAC COMPANY 380062612
C/O GARY R. DIESING, ESQUIRE Person to Contact:
1000 JACKSON JIM JENKINS
TOLEDO, OH 43624 Contact Telephone Number:
(513) 684-3079
Plan Name:
AEROQUIP INOAC COMPANY RETIREMENT
SAVINGS AND PROFIT SHARING PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation
periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
This determination is subject to your adoption of the proposed
amendments submitted in your letter dated March 4, 1994. The proposed
amendments should be adopted on or before the date prescribed by the
regulations under Code section 401(b).
This determination letter is applicable for the amendment(s) adopted on
March 8, 1993.
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based
safe harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise
specified in this letter.
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AEROQUIP INOAC COMPANY
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ C. ASHLEY BULLARD
C. Ashley Bullard
District Director
Enclosures:
Publication 794
Letter 835 (DO/CG)
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Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Aeroquip Inoac Retirement Savings and Profit
Sharing Plan of our reports (a) dated January 22, 1997, with respect to the
consolidated financial statements and schedules of Aeroquip-Vickers, Inc.
incorporated by reference in its Annual Report (Form 10-K) and (b) dated May
30, 1997, with respect to the financial statements and schedules of the
Aeroquip Inoac Company Retirement Savings and Profit Sharing Plan included in
the Plan's Annual Report (Form 11-K), both for the year ended December 31,
1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
/S/ ERNST & YOUNG LLP
Toledo, Ohio
July 31, 1997
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EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
of Aeroquip-Vickers, Inc., an Ohio corporation (the "Company"), hereby
constitutes and appoints Darryl F. Allen, James E. Kline and William R.
Ammann, and each of them, as true and lawful attorney or attorneys-in-fact for
the undersigned, with full power of substitution and revocation, for him and
in his name, place and stead, to sign on his behalf as a director of the
Company a Registration Statement or Registration Statements on Form S-8
pursuant to the Securities Act of 1933 concerning certain Common Shares of the
Company to be offered in connection with the Aeroquip Inoac Company Retirement
Savings and Profit-Sharing Plan, and all amendments or post-effective
amendments to such Registration Statement(s), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission or any state regulatory authority, granting
unto said attorney or attorneys-in-fact, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as they might or could do in person, hereby ratifying and confirming
all that said attorney or attorneys-in-fact or any of them or their substitute
or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of
which shall be deemed an original with respect to the person executing it.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the 24th day of July, 1997.
/S/ PURDY CRAWFORD /S/ PAUL A. ORMOND
Purdy Crawford Paul A. Ormond
Director Director
/S/ JOSEPH C. FARRELL /S/ JOHN P. REILLY
Joseph C. Farrell John P. Reilly
Director Director
/S/ DAVID R. GOODE /S/ WILLIAM R. TIMKEN, JR.
David R. Goode William R. Timken, Jr.
Director Director
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