<PAGE> 1
Registration No. ________________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
THE LINCOLN ELECTRIC COMPANY
(Exact Name of Registrant as Specified in Its Charter)
OHIO 34-0359955
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
22801 St. Clair Avenue, Cleveland, Ohio 44117
(Address of Principal Executive Offices Including Zip Code)
THE LINCOLN ELECTRIC COMPANY EMPLOYEE SAVINGS PLAN
(Full Title of the Plan)
---------
Frederick G. Stueber, Esq., Vice President, General Counsel and Secretary
The Lincoln Electric Company
22801 St. Clair Avenue, Cleveland, Ohio 44117-1199
(Name and Address of Agent For Service)
---------
(216) 481-8100
(Telephone Number, Including Area Code, of Agent For Service)
---------
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
Title of Proposed Maxi- Proposed Maxi- Amount of
Securities to Amount to be mum Offering mum Aggregate Registration
be Registered Registered (1) Price Per Share (2) Offering Price (2) Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(I) Common Shares, |
without par value | 150,000 $24.75 $3,712,500 $1,280.17
|
(II) Class A Common |
Shares, without par |
value | 150,000 $25.00 $3,750,000 $1,293.10
===================================================================================================================================
<FN>
(1) Pursuant to Rule 416(c) of the Securities Act of 1933 (the "Securities
Act"), an indeterminate amount of interests in The Lincoln Electric Company
Employee Savings Plan (the "Plan") are deemed to be registered hereby.
(2) Estimated solely for the purpose of 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 the Class A Common Shares, without par value
and Common Shares, without par value (the "Common Shares") on the NASDAQ
National Market on November 8, 1995, within five business days prior to filing.
</TABLE>
<PAGE> 2
Part II
Item 3. Incorporation of Documents by Reference
---------------------------------------
The following documents previously filed by The Lincoln Electric
Company (the "Registrant") with the Securities and Exchange Commission (the
"Commission") are incorporated herein by reference: the Prospectus dated June
29, 1995 filed pursuant to Rule 424(b) as a supplement to the Registrant's
Registration Statement on Form S-3 (No. 33-58881), as amended; Registrant's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30,
1995 and September 30, 1995; Registrant's Form 8-K dated May 26, 1995; and the
descriptions of the Registrant's Common Shares contained in the registration
statements filed under Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), and all amendments and reports filed for the purpose of
updating those descriptions.
All documents subsequently filed by the Registrant 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 deregisters 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. (Classes of securities to be offered are registered
under Section 12 of the Exchange Act.)
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Registrant's Restated Articles of Incorporation and Article IV of
Registrant's Restated Code of Regulations are incorporated herein by reference
to Exhibit 4.1 to the Form S-3 Registration Statement, No. 33-58881 (the
"Registration Statement") and Exhibit 2 to the Registration Statement on Form
8-A ("Form 8-A"), respectively, both filed with the Commission, which allow
indemnification of officers and directors to the fullest extent permitted for
an Ohio company, pursuant to Section 1701.13 of the Ohio Revised Code.
The Registrant maintains insurance on behalf of directors and certain
officers against any loss arising from any claim asserted against him in any
such capacity, subject to certain exclusions.
Registrant has entered into indemnity agreements with its directors and
expects to enter into similar agreements with any director elected or appointed
in the future. Item 15, Part II of the Registration Statement is incorporated
herein by reference.
Item 7. Exemption from Registration Claims
----------------------------------
Not applicable.
<PAGE> 3
Item 8. Exhibits
--------
4(a) Restated Articles of Incorporation are incorporated by reference to
Exhibit 4.1 to Registrant's Registration Statement.
4(b) Restated Code of Regulations are incorporated by reference to Exhibit 2
to Registrant's Form 8-A.
4(c) The Lincoln Electric Company Employee Savings Plan.
Registrant will submit the Plan and any amendments thereto to
the Internal Revenue Service (the "IRS") in a timely manner and will
make all changes required by the IRS in order to qualify the Plan.
23(a) Consent of Ernst & Young LLP, Independent Auditors.
23(b) Consent of Price Waterhouse, Independent Accountants.
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 this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in
this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this 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 this 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
<PAGE> 4
reference in this 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) The undersigned Registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the 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.
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 Cleveland, State of Ohio, on November 9, 1995.
THE LINCOLN ELECTRIC COMPANY
By: /s/ Frederick G. Stueber
--------------------------------------
Frederick G. Stueber, Vice President,
General Counsel and Secretary
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald F. Hastings * Chairman of the Board and Chief November 9, 1995
------------------------------------ Executive Officer (Principal
Donald F. Hastings Executive Officer)
/s/ Frederick W. Mackenbach * President, Chief Operating November 9, 1995
------------------------------------ Officer and Director
Frederick W. Mackenbach
/s/ H. Jay Elliott * Vice President, Chief Financial November 9, 1995
------------------------------------ Officer and Treasurer (Principal
H. Jay Elliott Financial and Accounting Officer)
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
/s/ Harry Carlson * Director November 9, 1995
------------------------------------
Harry Carlson
/s/ David H. Gunning * Director November 9, 1995
------------------------------------
David H. Gunning
/s/ G. Russell Lincoln * Director November 9, 1995
------------------------------------
G. Russell Lincoln
/s/ Henry L. Meyer III * Director November 9, 1995
------------------------------------
Henry L. Meyer III
/s/ Craig R. Smith * Director November 9, 1995
------------------------------------
Craig R. Smith
/s/ Edward E. Hood, Jr. * Director November 9, 1995
------------------------------------
Edward E. Hood, Jr.
/s/ Paul E. Lego * Director November 9, 1995
------------------------------------
Paul E. Lego
/s/ Hugh L. Libby * Director November 9, 1995
------------------------------------
Hugh L. Libby
/s/ David C. Lincoln * Director November 9, 1995
------------------------------------
David C. Lincoln
/s/ Emma S. Lincoln * Director November 9, 1995
------------------------------------
Emma S. Lincoln
/s/ Kathryn Jo Lincoln * Director November 9, 1995
------------------------------------
Kathryn Jo Lincoln
/s/ Lawrence O. Selhorst * Director November 9, 1995
------------------------------------
Lawrence O. Selhorst
/s/ Frank L. Steingass * Director November 9, 1995
------------------------------------
Frank L. Steingass
<FN>
* Frederick G. Stueber, the undersigned attorney-in-fact, by signing his
name hereto, does hereby sign and execute this Registration Statement on behalf
of the above indicated Registrant and officers and directors thereof
(constituting a majority of the directors) pursuant to a power of attorney filed
with the Securities and Exchange Commission.
</TABLE>
November 9, 1995 By: /s/ Frederick G. Stueber
----------------------------------------
Frederick G. Stueber, Vice President,
General Counsel and Secretary
<PAGE> 6
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Exhibit
Number Description
------ -----------
<S> <C>
4(a) Restated Articles of Incorporation are incorporated by reference to Exhibit 4.1
to Registrant's Registration Statement.
4(b) Restated Code of Regulations are incorporated by reference to Exhibit 2 to
Registrant's Form 8-A.
4(c) The Lincoln Electric Company Employee Savings Plan.
Registrant will submit the Plan and any amendments thereto to the Internal
Revenue Service (the "IRS") in a timely manner and will make all changes
required by the IRS in order to qualify the Plan.
23(a) Consent of Ernst & Young LLP, Independent Auditors.
23(b) Consent of Price Waterhouse, Independent Accountants.
24 Power of Attorney.
</TABLE>
<PAGE> 1
Exhibit 4(c)
THE LINCOLN ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
<PAGE> 2
<TABLE>
THE LINCOLN ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
Table of Contents
-----------------
<CAPTION>
Page
----
<S> <C>
ARTICLE I - DEFINITIONS AND CONSTRUCTION . . . . . .. . . . . . . . . . . . . . . . . 1
1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(1) ACCOUNT AND SUB-ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(2) ADMINISTRATIVE COMMITTEE OR COMMITTEE . . . . . . . . . . . . . . . . . . . . . 1
(3) ADMINISTRATOR OR PLAN ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . 1
(4) BASE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(5) BEFORE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(6) BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(7) BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(8) BONUS COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(9) BREAK IN SERVICE AND 1-YEAR BREAK IN
SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(10) CODE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(11) COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(12) COMPANY STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(13) COMPANY STOCK FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(14) COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(15) CONTROLLED GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(16) CONTROLLED GROUP MEMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(17) COVERED EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(18) DEATH BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(19) EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(20) ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(21) ELIGIBLE ROLLOVER DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . 6
(22) EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(23) EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(24) EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(25) EMPLOYMENT COMMENCEMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(26) EMPLOYMENT SEVERANCE AND EMPLOYMENT
SEVERANCE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(27) ENROLLMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(28) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(29) FIDUCIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(30) HARDSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(31) HIGHLY COMPENSATED EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(32) HOUR OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(33) INVESTMENT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(34) INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(35) MATCHING EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 11
(36) MATCHING EMPLOYER CONTRIBUTION PERCENTAGE . . . . . . . . . . . . . . . . . . . 11
(37) MEMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(38) NAMED FIDUCIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(39) NORMAL RETIREMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(40) PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(41) PLAN YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(42) PROFIT SHARING CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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<TABLE>
<CAPTION>
Page
----
<S> <C>
(43) QUALIFIED NONELECTIVE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 12
(44) REEMPLOYMENT COMMENCEMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . 13
(45) ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(46) SALARY REDUCTION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(47) SPOUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(48) TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(49) TRUST AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(50) TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(51) TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(52) VALUATION DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(53) VESTED INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(54) VESTING SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(55) YEAR OF VESTING SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.2 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II - ELIGIBILITY AND MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1 ELIGIBLE EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2 COMMENCEMENT OF MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3 DURATION OF MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III - BEFORE-TAX AND ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1 AMOUNT OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2 PAYMENTS TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3 CHANGES IN CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.4 SUSPENSION AND RESUMPTION OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 21
3.5 EXCESS DEFERRALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.6 EXCESS BEFORE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.7 EXCESS MATCHING EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.8 MULTIPLE USE OF ALTERNATIVE LIMITATION . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.9 MONITORING PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.10 ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IV - EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.1 AMOUNT OF MATCHING EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2 TIME OF MATCHING EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3 ALLOCATION OF MATCHING EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 34
4.4 QUALIFIED NONELECTIVE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5 ALLOCATION OF QUALIFIED NONELECTIVE
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.6 PROFIT SHARING CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.7 ALLOCATION OF PROFIT SHARING CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 35
4.8 RETURN OF CONTRIBUTIONS TO EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.9 MAXIMUM ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.10 MAXIMUM BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.11 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V - INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.1 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2 ACCOUNT; SUB-ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.3 REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.4 VALUATION OF INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.6 DIRECTIONS TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.7 LOANS TO MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI - DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.1 VESTING AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.2 DISTRIBUTIONS ON DEATH WHILE AN EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.3 DISTRIBUTIONS ON EMPLOYMENT SEVERANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
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<TABLE>
<S> <C>
6.4 DISTRIBUTIONS ON DEATH AFTER EMPLOYMENT SEVERANCE . . . . . . . . . . . . . . . . . . . . 55
6.5 DISTRIBUTIONS PURSUANT TO A QDRO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.6 LATEST TIME OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.7 WITHDRAWALS ON ACCOUNT OF HARDSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.8 EFFECT OF FIVE CONSECUTIVE 1-YEAR BREAKS IN
SERVICE ON VESTING SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.9 DISTRIBUTION ON SALE OF ASSETS OR DISPOSITION
OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.10 TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VII - ADMINISTRATION OF THE TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.1 THE TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.2 NO GUARANTEE AGAINST LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.3 PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.4 NO DIVERSION OF TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VIII - COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.1 COMPOSITION OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.2 CERTIFICATION OF MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.3 FORMALITIES OF COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.4 ADOPTION OF RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.5 FUNCTION AND DUTIES OF ADMINISTRATIVE COMMITTEE . . . . . . . . . . . . . . . . . . . . . 66
8.6 RELIANCE ON RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.7 REVOCABILITY OF ADMINISTRATIVE COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . . . 68
8.8 RESPONSIBILITIES OF INVESTMENT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.9 COMPENSATION AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.10 UNIFORM ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE IX - CLAIMS PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.1 METHOD OF FILING CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.2 NOTIFICATION TO CLAIMANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.3 REVIEW PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE X - ADMINISTRATION OF THE PLAN
AND FIDUCIARY RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.1 RESPONSIBILITY FOR ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.2 NAMED FIDUCIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.3 DELEGATION OF FIDUCIARY RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.4 IMMUNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.5 LIMITATION ON EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE XI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.1 SPENDTHRIFT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.2 FACILITY OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.3 NO ENLARGEMENT OF EMPLOYMENT RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.4 MERGER OR TRANSFER OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.5 ACTION BY COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.6 SEVERABILITY PROVISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE XII - OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.1 ADOPTION BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.2 COSTS AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.3 WITHDRAWAL OF EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE XIII - AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.1 RIGHT TO AMEND OR TERMINATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.2 PROCEDURE FOR TERMINATION OR AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 81
</TABLE>
- iii -
<PAGE> 5
<TABLE>
<S> <C>
13.3 DISTRIBUTION UPON TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.4 AMENDMENT CHANGING VESTING SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
13.5 NONFORFEITABLE AMOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
13.6 PROHIBITION ON DECREASING ACCRUED BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE XIV - RULES REGARDING COMPANY STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
14.1 VOTING COMPANY STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
14.2 SALE OF COMPANY STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.3 TENDER OFFER FOR COMPANY STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE XV - TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
15.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(1) AGGREGATION GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(2) COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(3) DEFINED BENEFIT PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(4) DEFINED CONTRIBUTION PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(5) DETERMINATION DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(6) EXTRA TOP-HEAVY GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(7) EXTRA TOP-HEAVY PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(8) FORMER KEY EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
(9) KEY EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
(10) NON-KEY EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
(11) PERMISSIVE AGGREGATION GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . 90
(12) REQUIRED AGGREGATION GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
(13) TOP-HEAVY ACCOUNT BALANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
(14) TOP-HEAVY GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
(15) TOP-HEAVY PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
15.2 DETERMINATION OF TOP-HEAVY STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
15.3 DETERMINATION OF EXTRA TOP-HEAVY STATUS . . . . . . . . . . . . . . . . . . . . . . . . . 92
15.4 TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
15.5 MINIMUM VESTING REQUIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
15.6 MINIMUM CONTRIBUTION REQUIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
15.7 ADJUSTMENT TO MINIMUM BENEFITS AND ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . 95
15.8 COORDINATION WITH OTHER PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
</TABLE>
- iv -
<PAGE> 6
THE LINCOLN ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
The Lincoln Electric Company, an Ohio corporation, hereby adopts this profit
sharing plan known as The Lincoln Electric Company Employee Savings Plan,
effective as of November 1, 1994.
ARTICLE I - DEFINITIONS AND CONSTRUCTION
----------------------------------------
1.1 DEFINITIONS. The following terms when used in the Plan and the Trust
Agreement with initial capital letters, unless the context clearly indicates
otherwise, shall have the following respective meanings:
(1) ACCOUNT AND SUB-ACCOUNT: See Section 5.2.
(2) ADMINISTRATIVE COMMITTEE OR COMMITTEE: The committee provided for in
Section 8.1, which shall have the function and duties specified in Section 8.5.
(3) ADMINISTRATOR OR PLAN ADMINISTRATOR: The Administrator of the Plan, as
defined in section 3(16)(A) of ERISA and section 414(g) of the Code, shall be
the Company, which may delegate all or any part of its powers, duties and
authorities in such capacity (without ceasing to be the Administrator of the
Plan) as hereinafter provided.
(4) BASE COMPENSATION: The regular salary and/or wages and overtime,
vacation pay, shift and incentive premiums and regular pay adjustments paid to
an Employee by the Employers, specifically excluding, however, Bonus
Compensation, reimbursed expenses and other special payments. Unless otherwise
indicated herein an Employee's Base Compensation shall be calculated prior
<PAGE> 7
2
to any reduction thereof made pursuant to a Salary Reduction Agreement under
the Plan or pursuant to any agreement under section 125 of the Code.
(5) BEFORE-TAX CONTRIBUTIONS: The contributions described in Section 3.1.
(6) BENEFICIARY: A Member's Death Beneficiary or any other person who,
after the death of a Member, is entitled to receive any benefit payable with
respect to such Member.
(7) BOARD: The Board of Directors of the Company.
(8) BONUS COMPENSATION: Bonuses paid to an Employee by the Employers.
Unless otherwise indicated herein an Employee's Bonus Compensation shall be
calculated prior to any reduction thereof pursuant to a Salary Reduction
Agreement under the Plan or pursuant to any agreement made under section 125 of
the Code.
(9) BREAK IN SERVICE AND 1-YEAR BREAK IN SERVICE: An Employee incurs a
Break in Service on his Employment Severance Date and a 1-Year Break in Service
if he fails to perform an Hour of Service for a Controlled Group Member during
the 12-month period beginning on such Employment Severance Date; provided,
however, that an Employee whose Employment Severance occurs by reason of his
resignation, retirement or discharge shall not incur a Break in Service (or a
1-Year Break in Service) if during the 12-month period commencing with his
Employment Severance Date (or, if such Employment Severance occurs during a
period of absence referred to in Section 1.1(26)(b), during the 12 month period
commencing with the first day of such period of absence)
<PAGE> 8
3
he performs an Hour of Service for a Controlled Group Member. If an Employee
is absent from work (a) by reason of the pregnancy of the Employee, (b) by
reason of the birth of a child of the Employee, (c) by reason of the placement
of a child with the Employee in connection with the adoption of such child by
the Employee, or (d) for purposes of caring for a child for a period beginning
immediately following the birth or placement of such child, such Employee shall
not, solely by reason of such absence, be considered to have incurred a Break
in Service until the expiration of the consecutive 24-month period commencing
on the first day of such absence and shall incur a 1-Year Break in Service if
he does not perform an Hour of Service during the 12-month period immediately
following such 24-month period.
(10) CODE: The Internal Revenue Code of 1986, as it has been and may be
amended from time to time.
(11) COMPANY: The Lincoln Electric Company, an Ohio corporation.
(12) COMPANY STOCK: Any class of voting or non-voting common stock of
the Company.
(13) COMPANY STOCK FUND: An Investment Fund invested primarily in
Company Stock.
(14) COMPENSATION: (a) The total Base Compensation and Bonus Compensation
paid to an Employee by the Employers. (b) Notwithstanding the foregoing,
Compensation of an Employee taken into account for any purpose for any Plan
Year shall not exceed $150,000 (as such amount shall be increased by the
cost-of-living adjustment under section 415(d) of the Code).
<PAGE> 9
4
For purposes of the preceding sentence, in the case of a Highly Compensated
Employee who is a 5-percent owner (as such term is defined in section 416(i)(1)
of the Code) or one of the ten most Highly Compensated Employees, (i) such
Highly Compensated Employee and his family members (which, for this purpose
shall mean an Employee's Spouse and lineal descendants who have not attained
age 19 before the close of the year in question) shall be treated as a single
Employee and the Compensation of such family member shall be aggregated with
the Compensation of such Highly Compensated Employee, and (ii) the limitation
on Compensation shall be allocated among such Highly Compensated Employee and
his family members in proportion to each individual's Compensation.
(15) CONTROLLED GROUP: The Employers and any and all other corporations,
trades and/or businesses, the employees of which together with Employees of an
Employer are required by section 414 of the Code to be treated as if they were
employed by a single employer.
(16) CONTROLLED GROUP MEMBER: Each corporation or unincorporated trade or
business that is or was a member of the Controlled Group, but only during such
period as it is or was such a member of the Controlled Group.
(17) COVERED EMPLOYEE: An Employee of an Employer who is categorized as a
full-time or provisional employee, excluding, however, (a) any "leased
employee" (as defined in Section 1.1(22)) of such Employer and (b) any
Employees of the Harris Calorific Division of the Company.
<PAGE> 10
5
(18) DEATH BENEFICIARY: A Member's Spouse or, if he has no Spouse or if
his Spouse consents (in the manner hereinafter described in this Subsection) to
the designation hereinafter provided for in this Subsection, such person or
persons other than, or in addition to, his Spouse as may be designated by a
Member as his Death Beneficiary under the Plan. Such a designation may be
made, revoked or changed only by an instrument (in form acceptable to the
Committee) which is signed by the Member, which, if he has a Spouse, includes
his Spouse's written consent to the action to be taken pursuant to such
instrument (unless such action results in the Spouse being named as the
Member's sole Death Beneficiary), and which is filed with the Committee before
the Member's death. A Spouse's consent required by this Subsection shall be
signed by the Spouse, shall acknowledge the effect of such consent, shall be
witnessed by any person designated by the Committee as a Plan representative or
by a notary public and shall be effective only with respect to such Spouse. At
any time when all the persons designated by the Member as his Death Beneficiary
have ceased to exist or if the Member has not made an effective Death
Beneficiary designation pursuant to this Subsection, his Death Beneficiary
shall be his Spouse or, if he does not then have a Spouse, his estate.
(19) EFFECTIVE DATE: November 1, 1994 for the Company and Members who
enter the Plan as Covered Employees of the Company, and, for any other Employer
and Members who enter the Plan as Covered Employees of such Employer, the
effective date specified by such Employer upon its adoption of the Plan.
<PAGE> 11
6
(20) ELIGIBLE EMPLOYEE: An Employee who is eligible for membership in the
Plan in accordance with the provisions of Article II.
(21) ELIGIBLE ROLLOVER DISTRIBUTION: Any distribution of all or any
portion of the balance to the credit of the distributee from a qualified trust
(as hereinafter defined), except (a) 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, (b) any
distribution to the extent the distribution is required under section 401(a)(9)
of the Code, (c) the portion of any distribution that is not includible in
gross income, and (d) such other amounts specified in Treasury regulations or
Internal Revenue Service rulings, notices or announcements issued under section
402(c) of the Code. For purposes of this Subsection, the term "qualified
trust" shall mean an employees' trust described in section 401(a) of the
Code which is exempt from tax under section 501(a) of the Code.
(22) EMPLOYEE: An employee of a Controlled Group Member and, to the extent
required by section 414(n) of the Code, any person who is a "leased employee"
of a Controlled Group Member. For purposes of this Subsection, a "leased
employee" means any person who, pursuant to an agreement between a Controlled
Group Member and any other person ("leasing
<PAGE> 12
7
organization"), has performed services for the Controlled Group Member on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business
field of the Controlled Group Member. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to services
performed for a Controlled Group Member will be treated as provided by the
Controlled Group Member. A leased employee will not be considered an Employee
of a Controlled Group Member, however, if (a) leased employees do not
constitute more than 20 percent of the Controlled Group Member's nonhighly
compensated work force (within the meaning of section 414(n)(5)(C)(ii) of the
Code) and (b) such leased employee is covered by a money purchase pension plan
maintained by the leasing organization that provides (i) a nonintegrated
employer contribution rate of at least 10 percent of compensation (including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the leased employee's gross income under section 125, section
402(a)(8), section 402(h) or section 403(b) of the Code), (ii) immediate
participation, and (iii) full and immediate vesting.
(23) EMPLOYER: The Company and any other corporation adopting the Plan
pursuant to Article XII.
(24) EMPLOYER CONTRIBUTIONS: Matching Employer Contributions as described
in Section 4.1, Qualified Nonelective Contributions as described in Section 4.4
and Profit Sharing Contributions as described in Section 4.6.
<PAGE> 13
8
(25) EMPLOYMENT COMMENCEMENT DATE: The date on which an Employee first
performs an Hour of Service for a Controlled Group Member.
(26) EMPLOYMENT SEVERANCE AND EMPLOYMENT SEVERANCE DATE: An Employment
Severance occurs on the earlier of (a) the date on which an Employee's
employment with the Controlled Group is terminated because of death,
resignation, retirement or discharge or (b) the first anniversary of the
first day of a period in which the Employee remains absent from employment
(with or without pay) with the Controlled Group for any reason other than
death, resignation, retirement or discharge; and the date on which an
Employee's Employment Severance occurs shall be referred to as his
Employment Severance Date.
(27) ENROLLMENT DATE: November 16, 1994 and the first day of each January,
April, July and October thereafter.
(28) ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
(29) FIDUCIARY: Any person who (a) exercises any discretionary authority
or discretionary control respecting management of the Plan or exercises any
authority or control respecting management or disposition of the Trust Fund,
(b) renders investment advice for fee or other compensation, direct or
indirect, with respect to the Trust Fund, or has authority or responsibility
to do so, or (c) has any discretionary authority or discretionary
responsibility in the administration of the Plan or the Trust Fund. The
term "Fiduciary" shall also include any person to whom a Named
<PAGE> 14
9
Fiduciary delegates any of its or his fiduciary responsibilities hereunder in
accordance with the provisions of the Plan or Trust Agreement.
(30) HARDSHIP: Financial need on the part of a Member on account of:
(a) expenses for medical care described in section 213(d) of the Code
incurred by the Member, the Member's Spouse, or any dependents of the Member
(as defined in section 152 of the Code) or necessary for those persons to
obtain medical care described in section 213(d);
(b) the purchase (excluding mortgage payments) of a principal residence
for the Member;
(c) the payment of tuition and related educational fees for the next 12
months of post-secondary education for the Member, his Spouse, children, or
dependents;
(d) the need to prevent the eviction of the Member from his principal
residence or foreclosure on the mortgage of the Member's principal residence;
or
(e) any other financial need which the Commissioner of Internal
Revenue, through the publication of revenue rulings, notices and other
documents of general applicability, may from time to time designate as a deemed
immediate and heavy financial need as provided in Treasury Regulations Section
1.401(k)-l(d)(2).
(31) HIGHLY COMPENSATED EMPLOYEE: (a) Unless the Company elects one
of the simplified methods contained in section 414(q)(12) of the Code or
Revenue Procedure 93-42, for a
<PAGE> 15
10
particular Plan Year, any Employee (i) who, during the preceding Plan Year,
(A) was at any time a 5-percent owner (as such term is defined in section
416(i)(1) of the Code), (B) received compensation from the Controlled Group
in excess of $75,000 (as such amount may be adjusted for increases in the
cost of living pursuant to regulations prescribed by the Secretary of the
Treasury), (C) received compensation from the Controlled Group in excess of
$50,000 (as such amount may be adjusted for increases in the cost of living
pursuant to regulations prescribed by the Secretary of the Treasury) and was
in the top-paid group of Employees for such Year, or (D) was at any time an
officer (limited to no more than 50 Employees or, if lesser, the greater of 3
Employees or 10 percent (10%) of the Employees) and received compensation,
effective January 1, 1988, greater than 50 percent (50%) of the amount in
effect under section 415(b)(1)(A) of the Code for such Year, or (ii) who
during the particular Plan Year (but not the prior Plan Year) (A) was at any
time a 5-percent owner (as such term is defined in section 416(i)(1) of the
Code) or (B) was included in the foregoing clauses (B), (C) or (D) and was in
the group consisting of the 100 Employees paid the greatest compensation by
the Controlled Group during such Plan Year.
(b) "Highly Compensated Employee" shall include a former Employee whose
employment with the Controlled Group terminated prior to the Plan Year and who
was a Highly Compensated Employee for the Plan Year in which his employment
<PAGE> 16
11
terminated or for any Plan Year ending on or after his 55th birthday.
(c) For the purposes of this Subsection, (i) the term "compensation" shall
mean an Employee's compensation under Section 4.9(3) and the Employee's
Before-Tax Contributions (subject to the limitation described in Section
1.1(14)(b)) and (ii) the term "top-paid group of Employees" shall mean that
group of Employees of the Controlled Group consisting of the top 20 percent of
such Employees when ranked on the basis of compensation paid by the Controlled
Group during the Plan Year.
(32) HOUR OF SERVICE: An hour for which an Employee is paid, or entitled
to payment, by one or more Controlled Group Members for the performance of
duties as an Employee.
(33) INVESTMENT COMMITTEE: The committee provided for in Section 8.1 which
shall have the responsibilities specified in Section 8.8.
(34) INVESTMENT FUNDS: Any of the investment funds established by the
Investment Committee under Section 5.1.
(35) MATCHING EMPLOYER CONTRIBUTIONS: The contributions described in
Section 4.1.
(36) MATCHING EMPLOYER CONTRIBUTION PERCENTAGE: Such percentage as the
Company shall establish for a Plan Year, on or before the date or dates on
which Matching Employer Contributions, if any, are made for such Plan Year,
to apply against Members' Before-Tax Contributions to determine the Matching
Employer Contributions for such Plan Year.
<PAGE> 17
12
(37) MEMBER: An Employee who has become and continues to be a Member of
the Plan in accordance with the provisions of Article II.
(38) NAMED FIDUCIARIES: The persons designated in or pursuant to Section
10.2.
(39) NORMAL RETIREMENT DATE: The date on which a Member attains age 60.
(40) PLAN: The Lincoln Electric Company Employee Savings Plan, the terms
and provisions of which are herein set forth, as the same may be amended,
supplemented or restated from time to time.
(41) PLAN YEAR: November 1, 1994 through December 31, 1994 and
thereafter, a calendar year.
(42) PROFIT SHARING CONTRIBUTIONS: Employer contributions as specified
in Section 4.6.
(43) QUALIFIED NONELECTIVE CONTRIBUTIONS: A contribution made by an
Employer pursuant to Section 4.4 that (a) Members eligible to share therein
may not elect to receive in cash until distribution from the Plan, (b) are
nonforfeitable when made, (c) are distributable only in accordance with the
distribution rules applicable to Before-Tax Contributions and (d) are paid to
the Trust Fund during the Plan Year for which made or within the time following
the close of such Plan Year which is prescribed by law for the filing by an
Employer of its federal income tax return (including extensions thereof).
<PAGE> 18
13
(44) REEMPLOYMENT COMMENCEMENT DATE: The date following an Employee's
Break in Service on which he again performs an Hour of Service for a Controlled
Group Member.
(45) ROLLOVER CONTRIBUTIONS: Cash or cash equivalents received and held by
the Trustee pursuant to the provisions of Section 3.10.
(46) SALARY REDUCTION AGREEMENT: An arrangement made under the Plan
pursuant to which an Employee agrees to reduce, or to forego an increase in,
his Compensation and his Employer agrees to contribute to the Trust the amount
so reduced or foregone as a Before-Tax Contribution.
(47) SPOUSE: The person to whom a Member is legally married at the
specified time; provided, however, that a former Spouse may be treated as a
Spouse or surviving Spouse to the extent required under the terms of a
qualified domestic relations order (as defined in section 414(p) of the Code).
(48) TRUST: The trust created by the Trust Agreement and known as The
Lincoln Electric Company Savings Plan Trust.
(49) TRUST AGREEMENT: The Trust Agreement between the Company and the
Trustee providing among other things for the Trust and the investment of the
Trust Fund, as such Trust Agreement may be amended or restated from time to
time, or any trust agreement superseding the same. The Trust Agreement is
hereby incorporated in the Plan by reference.
(50) TRUSTEE: The trustee or trustees under the Trust Agreement or its or
their successor or successors in trust under such Trust Agreement.
<PAGE> 19
14
(51) TRUST FUND: The trust estate held by the Trustee under the provisions
of the Plan and the Trust Agreement, without distinction as to principal or
income.
(52) VALUATION DATE: The last business day of each calendar quarter and
such other date or dates as designated by the Investment Committee.
(53) VESTED INTEREST: The entire amount of a Member's Account which has
not previously been withdrawn by him or distributed to or for him and which (a)
is derived from his Before-Tax Contributions, Rollover Contributions and
Qualified Nonelective Contributions and (b) is (i) derived from Matching
Employer Contributions and Profit Sharing Contributions and (ii) nonforfeitable
after his completion of three Years of Vesting Service. A Member's Vested
Interest shall extend to his entire Account, and he shall have a nonforfeitable
interest in his entire Account, upon his death while an Employee and upon his
attainment of age 60 while an Employee. A Member's Vested Interest shall be
100% vested and nonforfeitable at all times.
(54) VESTING SERVICE: (a) An Employee's Vesting Service shall equal the
total of his periods of employment with the Controlled Group beginning with his
Employment Commencement Date or his Reemployment Commencement Date, if
applicable, and ending on his next following Employment Severance Date, except
that if an Employee whose Employment Severance occurs by reason of his
resignation, retirement or discharge performs an Hour of Service for a
Controlled Group Member during the 12 consecutive month period beginning on his
Employment Severance Date, the
<PAGE> 20
15
period beginning on such Employment Severance Date and ending on the date on
which he performs such Hour of Service shall be deemed to be employment with
the Controlled Group; provided, however, that if such Employee's Employment
Severance occurs by reason of his resignation, retirement or discharge during a
period of absence referred to in Section 1.1(26)(b), the period beginning on
his Employment Severance Date and ending on the date on which he performs such
Hour of Service shall not be deemed to be employment with the Controlled Group
unless such Hour of Service is performed within 12 months of the date on which
such period of absence commenced.
(b) Notwithstanding the foregoing paragraph (a), (i) in the case of any
Employee who has a Break in Service and who does not have a nonforfeitable
right to a benefit under the Plan, Years of Vesting Service before his Break in
Service shall not be taken into account only if the number of his consecutive
1-Year Breaks in Service equals or exceeds the greater of five or the aggregate
number of his Years of Vesting Service before his Break in Service; and such
aggregate number of his Years of Vesting Service before his Break in Service
shall not include any Years of Vesting Service not required to be taken into
account under this paragraph by reason of any prior Break in Service, and (ii)
an Employee shall not be credited with Vesting service for any period after the
termination of the Plan as to him.
(c) In determining the number of an Employee's Years of Vesting Service,
all periods of his employment with the Controlled Group (whether or not
consecutive) counted as Vesting
<PAGE> 21
16
Service pursuant to this Subsection shall (subject to the provisions of
Sections 6.3(6) and 6.8) be aggregated on the basis that 365 days of such
employment shall equal a Year of Vesting Service and that each additional 30
days of such employment shall equal one-twelfth of a Year of Vesting Service.
(d) Anything in the Plan to the contrary notwithstanding, an Employee shall
be credited with such Vesting Service not otherwise credited to him under the
Plan as may be required by applicable law.
(55) YEAR OF VESTING SERVICE: As defined in section 1.1(54).
1.2 CONSTRUCTION. (1) Unless the context otherwise indicates, the
masculine wherever used in the Plan or Trust Agreement shall include the
feminine and neuter.
(2) Where headings have been supplied to portions of the Plan and the Trust
Agreement (other than the headings to the Subsections in Section 1.1), they
have been supplied for convenience only and are not to be taken as limiting or
extending the meaning of any of such portions of such documents.
(3) Wherever the word "person" appears in the Plan, it shall refer to both
natural and legal persons.
(4) A number of the provisions hereof and of the Trust Agreement are
designed to contain provisions required or contemplated by certain federal laws
and/or regulations thereunder. All such provisions herein and in the Trust
Agreement are intended to have the meaning required or contemplated by such
provisions of such law or regulations and
<PAGE> 22
17
shall be construed in accordance with valid regulations and valid published
governmental rulings and interpretations of such provisions. In applying such
provisions hereof or of the Trust Agreement, each Fiduciary may rely (and shall
be protected in relying) on any determination or ruling made by any agency of
the United States Government that has authority to issue regulations, rulings
or determinations with respect to the federal law thus involved.
(5) Except to the extent federal law controls, the Plan and Trust Agreement
shall be governed, construed and administered according to the laws of the
State of Ohio. All persons accepting or claiming benefits under the Plan or
Trust Agreement shall be bound by and deemed to consent to their provisions.
<PAGE> 23
18
ARTICLE II - ELIGIBILITY AND MEMBERSHIP
---------------------------------------
2.1 ELIGIBLE EMPLOYEES. An Employee shall become an Eligible Employee
under the Plan on the first Enrollment Date on which he meets the following
requirements:
(1) he is a Covered Employee, and
(2) he has been credited with at least one Year of Vesting Service.
2.2 COMMENCEMENT OF MEMBERSHIP. (1) Any Eligible Employee may enroll as a
Member in the Plan on the Enrollment Date on which he is initially eligible or
on any subsequent Enrollment Date by filing with the Administrative Committee
at least 30 days (or such shorter period as the Committee shall determine)
before such Date an enrollment form prescribed by the Committee, which form
shall include (a) the desired effective date of the Eligible Employee's
membership in the Plan, (b) his agreement, commencing on or after the effective
date of his membership in the Plan, to have his Employer make Before-Tax
Contributions for him to the Trust, (c) his authorization to his Employer to
withhold from his Base Compensation for each pay period and/or his Bonus
Compensation for the Plan Year, commencing on or after the effective date of
his membership in the Plan, any designated Before-Tax Contributions and to pay
the same to the Trust, and (d) his direction that the Before-Tax Contributions
and Employer Contributions, if any, made by or for him be invested (to the
extent permitted under the Plan) in any one of the investment options permitted
by Section 5.5.
<PAGE> 24
19
(2) Notwithstanding the preceding provisions of this Section, an Eligible
Employee who does not enroll as a Member pursuant to Subsection (1) of this
Section shall become a Member on the Enrollment Date on which he is initially
eligible pursuant to Section 2.1, but only for the purposes of being eligible
to have Qualified Nonelective Contributions or Profit Sharing Contributions,
if any, made on his behalf.
2.3 DURATION OF MEMBERSHIP. An Employee shall cease to be a Member when he
ceases to be an Eligible Employee; provided, however, that if after he ceases
to be an Eligible Employee, an Account continues to be maintained for him, he
shall (subject to Section 13.1) remain a Member for all purposes of the Plan
other than for the purposes of making, or having his Employer make, Before-Tax,
Rollover or Employer Contributions pursuant to Article III and Article IV. If
such an Employee (or former Employee) again becomes an Eligible Employee, he
may again enroll as a Member on the first Enrollment Date following the date he
so again becomes an Eligible Employee by filing with the Administrative
Committee at least 30 days (or such shorter period as the Committee shall
determine) before such Enrollment Date an enrollment form prescribed in Section
2.2.
<PAGE> 25
20
ARTICLE III - BEFORE-TAX AND ROLLOVER CONTRIBUTIONS
---------------------------------------------------
3.1 AMOUNT OF CONTRIBUTIONS. Upon enrollment pursuant to Section 2.2, a
Member shall agree pursuant to a Salary Reduction Agreement to have his
Employer make Before-Tax Contributions for him to the Trust of (1) a specified
percentage of his Base Compensation (in 1% increments) through equal percentage
pay period reductions and/or (2) a specified percentage of his Bonus
Compensation (in 1% increments) through payroll reduction. If a Member's
Before-Tax Contributions must be reduced pursuant to Sections 3.5 through 3.9
or the requirements of applicable law, his Before-Tax Contributions as so
reduced shall be the maximum percentage of his Base Compensation and Bonus
Compensation permitted by such Sections or law notwithstanding the foregoing
provisions of this Section requiring that Before-Tax Contributions be made in
specified increments of his Base Compensation and Bonus Compensation.
3.2 PAYMENTS TO TRUSTEE. Before-Tax Contributions shall be transmitted to
the Trustee as soon as practicable, but in any event not later than 30 days
after the end of the calendar month in which such Contributions would otherwise
have been paid to the Members.
3.3 CHANGES IN CONTRIBUTIONS. The percentages designated by a Member
pursuant to Section 3.1 shall continue in effect, notwithstanding any changes
in the Member's Compensation. A Member may, however, in accordance with the
percentages permitted by Sections 3.1, change the percentages of his Base
Compensation and/or Bonus Compensation to be made as Before-Tax
<PAGE> 26
21
Contributions effective as of the next applicable payroll date upon such prior
written notice filed with the Administrative Committee as the Committee may
require, provided that a Member may not make such a change more frequently than
once each calendar quarter.
3.4 SUSPENSION AND RESUMPTION OF CONTRIBUTIONS. A Member may suspend his
Before-Tax Contributions effective as of any date upon such prior written
notice filed with the Administrative Committee as the Committee may require. A
Member who has suspended his Before-Tax Contributions may, upon such prior
written notice filed with the Administrative Committee as the Committee may
require, resume making such Before-Tax Contributions as of any Enrollment Date
if he is then an Eligible Employee and he has again enrolled pursuant to
Sections 2.2 and 3.1.
3.5 EXCESS DEFERRALS. (1) Notwithstanding the foregoing provisions of
this Article III, a Member's Before-Tax Contributions for any taxable year of
such Member shall not exceed the limitation in effect under section 402(g) of
the Code. Except as otherwise provided in this Section, a Member's Before-Tax
Contributions for purposes of this Section shall include (a) any employer
contribution made under any qualified cash or deferred arrangement as defined
in section 401(k) of the Code to the extent not includible in gross income for
the taxable year under section 402(a)(8) of the Code (determined without regard
to section 402(g) of the Code), (b) any employer contribution to the extent not
includible in gross income for the
<PAGE> 27
22
taxable year under section 402(h)(1)(B) of the Code (determined without regard
to section 402(g) of the Code) and (c) any employer contribution to purchase an
annuity contract under section 403(b) of the Code under a salary reduction
agreement within the meaning of section 3121(A)(5)(D) of the Code.
(2) In the event that a Member's Before-Tax Contributions exceed the amount
described in Subsection (1) of this Section (hereinafter called the "excess
deferrals"), such excess deferrals (and any income allocable thereto) shall be
distributed to the Member by April 15 following the close of the taxable year
in which such excess deferrals occurred if (and only if), by April 15
following the close of such taxable year the Member (a) allocates the amount of
such excess deferrals among the plans under which the excess deferrals were
made and (b) notifies the Administrative Committee of the portion allocated to
this Plan.
(3) In the event that a Member's Before-Tax Contributions under this Plan
exceed the amount described in Subsection (1) of this Section, or in the event
that a Member's Before-Tax Contributions made under this Plan do not exceed
such amount but he allocates a portion of his excess deferrals to his
Before-Tax Contributions made to this Plan, Matching Employer Contributions, if
any, made with respect to such Before-Tax Contributions (and any income
applicable thereto) shall be applied to reduce subsequent Matching Employer
Contributions made under the Plan.
<PAGE> 28
23
3.6 EXCESS BEFORE-TAX CONTRIBUTIONS. (1) Notwithstanding the foregoing
provisions of this Article III, for any Plan Year,
(a) the actual deferral percentage (as defined in Subsection (2) of this
Section) for the group of Highly Compensated Eligible Employees (as defined in
Subsection (3) of this Section) for such Plan Year shall not exceed the actual
deferral percentage for all other Eligible Employees for such Plan Year
multiplied by 1.25, or
(b) the excess of the actual deferral percentage for the group of Highly
Compensated Eligible Employees for such Plan Year over the actual deferral
percentage for all other Eligible Employees for such Plan Year shall not
exceed 2 percentage points, and the actual deferral percentage for the group
of Highly Compensated Eligible Employees for such Plan Year shall not exceed
the actual deferral percentage for all other Eligible Employees for such Plan
Year multiplied by 2.
If two or more plans which include cash or deferred arrangements are considered
as one plan for purposes of section 401(a)(4) or 410(b) of the Code, such
arrangements included in such plans shall be treated as one arrangement for the
purposes of this Subsection; and if any Highly Compensated Eligible Employee is
a participant under two or more cash or deferred arrangements of the Controlled
Group, all such arrangements shall be treated as one cash or deferred
arrangement for purposes of determining the deferral percentage with respect to
such Eligible Employee.
<PAGE> 29
24
(2) For the purposes of this Section, the actual deferral percentage for
a specified group of Eligible Employees for a Plan Year shall be the average
of the ratios (calculated separately for each Eligible Employee in such
group) of (a) the amount of Before-Tax Contributions and, at the election of
an Employer, any Qualified Nonelective Contributions, actually paid to the
Trust for each such Eligible Employee for such Plan Year (including any
"excess deferrals" described in Section 3.5) to (b) the Eligible Employee's
compensation for such Plan Year. For the purposes of this Subsection (2),
the term "compensation" shall mean the sum of an Eligible Employee's
compensation under Section 4.9(3) and his Before-Tax Contributions (subject
to the limitations described in Section 1.1(14)(b)). In the case of a Highly
Compensated Eligible Employee who is either a 5-percent owner (as defined in
section 416(i)(1) of the Code) or one of the ten most Highly Compensated
Employees, the combined actual deferral ratio for the family group (as such
term is hereinafter defined), which shall be treated as one Highly
Compensated Eligible Employee, shall be determined by combining the
Before-Tax Contributions (and Qualified Nonelective Contributions, if any)
and compensation of all members of the family group who are Eligible
Employees. For purposes of this Subsection, the term "family group" shall
mean any Highly Compensated Eligible Employee described in the preceding
sentence and such Employee's Spouse and lineal ascendants or descendants and
the spouses of such lineal ascendants or descendants. For the purposes of
determining "the actual deferral percentage for
<PAGE> 30
25
all other Eligible Employees" as referred to in Subsection (1) of this Section,
the Before-Tax Contributions (and Qualified Nonelective Contributions, if
applicable) and compensation of all members of the family group shall be
disregarded.
(3) For the purposes of this Section, the term "Highly Compensated Eligible
Employee" for a particular Plan Year shall mean any Highly Compensated Employee
who is an Eligible Employee.
(4) In the event that excess contributions (as such term is hereinafter
defined) are made to the Trust for any Plan Year, then, prior to March 15 of
the following Plan Year, such excess contributions (and any income allocable
thereto) shall be distributed to the Highly Compensated Eligible Employees on
the basis of the respective portions of the excess contributions attributable
to each such Eligible Employee. For the purposes of this Subsection (4), the
term "excess contributions" shall mean, for any Plan Year, the excess of (i)
the aggregate amount of Before-Tax Contributions actually paid to the Trust on
behalf of Highly Compensated Eligible Employees for such Plan Year over (ii)
the maximum amount of such Before-Tax Contributions permitted for such Plan
Year under Subsection (1) of this Section, determined by reducing Before-Tax
Contributions made on behalf of Highly Compensated Eligible Employees in order
of the actual deferral percentages (as defined in Subsection (2) of this
Section) beginning with the highest of such percentages. Notwithstanding the
foregoing provisions of this Subsection, in the case of a Highly Compensated
Eligible Employee whose actual deferral ratio is determined under the family
aggregation rules
<PAGE> 31
26
set forth in Subsection (2) of this Section, the determination and correction
of the amount of excess contributions shall be made by reducing the actual
deferral ratio in accordance with the "leveling" method described in Treasury
Regulations Section 1.401(k)-1(f)(2) and allocating the excess contributions
for the family group among its members in proportion to the Before-Tax
Contributions of each member of the family group that is combined to determine
the actual deferral ratio.
(5) Matching Employer Contributions, if any, made with respect to a
Member's excess contributions (and any income applicable thereto) shall be
applied to reduce subsequent Matching Employer Contributions made under the
Plan.
3.7 EXCESS MATCHING EMPLOYER CONTRIBUTIONS. (1) Notwithstanding the
foregoing provisions of this Article III or the provisions of Article IV, for
any Plan Year the contribution percentage (as defined in Subsection (2) of this
Section) for the group of Highly Compensated Eligible Employees (as defined in
Section 3.6(3)) for such Plan Year shall not exceed the greater of (a) 125
percent of the contribution percentage for all other Eligible Employees or (b)
the lesser of 200 percent of the contribution percentage for all other Eligible
Employees, or the contribution percentage for all other Eligible Employees plus
2 percentage points. If two or more plans of the Controlled Group to which
matching contributions, Employee after-tax contributions or Before-Tax
Contributions (as defined in Section 3.5(1)) are made are treated as one plan
for purposes of section 410(b) of the Code, such plans shall be treated as one
<PAGE> 32
27
plan for purposes of this Subsection (1); and if a Highly Compensated Eligible
Employee participates in two or more plans of the Controlled Group to which
such contributions are made, all such contributions shall be aggregated for
purposes of this Subsection (1).
(2) For the purposes of this Section, the contribution percentage for a
specified group of Eligible Employees for a Plan Year shall be the average of
the ratios (calculated separately for each Eligible Employee in such group) of
(a) the sum of the Matching Employer Contributions and, at the election of an
Employer, any Before-Tax Contributions or Qualified Nonelective Contributions
paid under the Plan by or on behalf of each such Eligible Employee for such
Plan Year and not taken into account for such Plan Year under Section 3.6(2),
to (b) the Eligible Employee's compensation (as defined in Section 3.6(2)) for
such Plan Year. In the case of a Highly Compensated Eligible Employee who is
either a 5-percent owner (as defined in section 416(i)(1) of the Code) or one
of the ten most Highly Compensated Employees, the combined contribution ratio
for the family group (as such term is defined in Section 3.6(2)), which shall
be treated as one Highly Compensated Employee, shall be determined by combining
the Matching Employer Contributions (and Before-Tax Contributions or Qualified
Nonelective Contributions, if applicable) and compensation of all members of
the family group who are Eligible Employees. For the purposes of determining
"the contribution percentage for all other Eligible Employees" as referred to
in Subsection (1) of this Section, the Matching Employer
<PAGE> 33
28
Contributions (and Before-Tax Contributions or Qualified Nonelective
Contributions, if applicable) compensation of all members of the family group
shall be disregarded.
(3) In the event that excess aggregate contributions (as such term is
hereinafter defined) are made to the Trust for any Plan Year, then, prior to
March 15 of the following Plan Year, such excess contributions (and any income
allocable thereto) shall be forfeited (if forfeitable) and applied as provided
in Section 6.3(5) or (if not forfeitable) shall be distributed to the Highly
Compensated Eligible Employees on the basis of the respective portions of the
excess contributions attributable to each such Eligible Employee. For the
purposes of this Subsection (3), the term "excess aggregate contributions"
shall mean, for any Plan Year, the excess of (a) the aggregate amount of the
Matching Employer Contributions actually paid to the Trust by or on behalf of
Highly Compensated Eligible Employees for such Plan Year over (b) the maximum
amount of such Matching Employer Contributions permitted for such Plan Year
under Subsection (1) of this Section, determined by reducing Matching Employer
Contributions made by or on behalf of Highly Compensated Eligible Employees in
order of their contribution percentages (as defined in Subsection (2) of this
Section) beginning with the highest of such percentages. Notwithstanding the
foregoing provisions of this Subsection, in the case of a Highly Compensated
Eligible Employee whose contribution ratio is determined under the family
aggregation rules set forth in Subsection (2) of this Section, the
determination and correction
<PAGE> 34
29
of the amount of excess aggregate contributions shall be made by reducing the
contribution ratio in accordance with the "leveling" method described in
Treasury Regulations Section 1.401(m)-1(e)(2) and allocating the excess
aggregate contributions for the family group among its members in proportion to
the Matching Employer Contributions of each member of the family group that is
combined to determine the contribution ratio.
(4) The determination of excess aggregate contributions under this Section
shall be made after (a) first determining the excess deferrals under Section
3.5 and (b) then determining the excess contributions under Section 3.6.
3.8 MULTIPLE USE OF ALTERNATIVE LIMITATION. (1) Notwithstanding the
foregoing provisions of this Article III or the provisions of Article IV, if,
after the application of Sections 3.5, 3.6 and 3.7, the sum of the actual
deferral percentage and the contribution percentage for the group of Highly
Compensated Eligible Employees (as defined in Section 3.6(3)) exceeds the
aggregate limit (as defined in Subsection (2) of this Section), then the
contributions made for such Plan Year for Highly Compensated Eligible Employees
will be reduced so that the aggregate limit is not exceeded. Such reductions
shall be made in Before-Tax Contributions (but only to the extent that they are
not matched by Matching Employer Contributions), and then in Matching Employer
Contributions. Reductions in contributions shall be made in the manner
provided in Section 3.6 or 3.7, as applicable. The amount by which each such
Highly Compensated Eligible Employee's contributions are
<PAGE> 35
30
reduced shall be treated as excess contributions or excess aggregate
contributions under Section 3.6 or 3.7, as applicable. For the purposes of
this Section, the actual deferral percentage and contribution percentage of the
Highly Compensated Eligible Employees are determined after any reductions
required to meet those tests under Sections 3.6 and 3.7. Notwithstanding the
foregoing provisions of this Section, no reduction shall be required by this
Subsection if either (a) the actual deferral percentage of the Highly
Compensated Eligible Employees does not exceed 1.25 multiplied by the actual
deferral percentage of the non-Highly Compensated Eligible Employees, or (b)
the contribution percentage of the Highly Compensated Eligible Employees does
not exceed 1.25 multiplied by the contribution percentage of the non-Highly
Compensated Eligible Employees.
(2) For purposes of this Section, the term "aggregate limit" means the sum
of (a) 125% of the greater of (i) the actual deferral percentage of the
non-Highly Compensated Eligible Employees for the Plan Year, or (ii) the
contribution percentage of the non-Highly Compensated Eligible Employees for
the Plan Year, and (b) the lesser of (A) 200% of, or (B) two (2) plus, the
lesser of such actual deferral percentage or contribution percentage. If it
would result in a larger aggregate limit, the word "lesser" is substituted for
the word "greater" in part (a) of this Subsection, and the word "greater" is
substituted for the word "lesser" the second place such word appears in part
(b) of this Subsection.
<PAGE> 36
31
3.9 MONITORING PROCEDURES. (1) In order to ensure that at least one of
the actual deferral percentages specified in Section 3.6(1) and at least one
of the contribution percentages specified in Section 3.7(1) and the aggregate
limit specified in Section 3.8(2) are satisfied for each Plan Year, the Company
shall monitor (or cause to be monitored) the amount of Before-Tax Contributions
and Matching Employer Contributions, if any, being made to the Plan for each
Eligible Employee during each Plan Year. In the event that the Company
determines that neither of such actual deferral percentages, neither of such
contribution percentages or the aggregate limit will be satisfied for a Plan
Year, the Before-Tax Contributions and/or the Matching Employer Contributions
made thereafter for each Highly Compensated Eligible Employee (as defined in
Section 3.6(3)) shall be reduced (pursuant to non-discriminatory rules adopted
by the Company) to the extent necessary to decrease the actual deferral
percentage and/or the contribution percentage for Highly Compensated Eligible
Employees for such Plan Year to a level which satisfies either of the actual
deferral percentages, either of the contribution percentages and/or the
aggregate limit.
(2) In order to ensure that excess deferrals (as such term is defined in
Section 3.5(2)) shall not be made to the Plan for any taxable year for any
Member, the Company shall monitor (or cause to be monitored) the amount of
Before-Tax Contributions being made to the Plan for each Member during each
taxable year and shall take such action (pursuant to non-discriminatory rules
adopted by the Company) to prevent
<PAGE> 37
32
Before-Tax Contributions made for any Member under the Plan for any taxable
year from exceeding the maximum amount applicable under Section 3.5(1).
(3) The actions permitted by this Section are in addition to, and not in
lieu of, any other actions that may be taken pursuant to other Sections of the
Plan or that may be permitted by applicable law or regulation in order to
ensure that the limitations described in Sections 3.5, 3.6, 3.7 and 3.8 are
met.
3.10 ROLLOVER CONTRIBUTIONS. (1) The Trustee shall, at the direction of
the Company, receive and thereafter hold and administer as Rollover
Contributions and part of the Trust Fund for a Covered Employee (a) all or any
portion of an Eligible Rollover Distribution that was distributed to a Covered
Employee, or is transferred at the request of a Covered Employee, from a
qualified trust (as defined in Section 1.1(21)), provided that the requirements
of section 402(c) or 401(a)(31) of the Code are met; or (b) the entire amount
of a distribution that satisfies the requirements of section 408(d)(3)(A)(ii)
of the Code. The Trustee may accept cash or cash equivalents that constitute
all or a portion of any such distribution.
(2) A Covered Employee who transfers cash or cash equivalents to the Trust
Fund pursuant to Subsection (1) of this Section and who is otherwise not a
Member shall be deemed to be a Member on and after the date of such transfer
for all purposes of the Plan other than Articles III and IV.
<PAGE> 38
33
ARTICLE IV - EMPLOYER CONTRIBUTIONS
-----------------------------------
4.1 AMOUNT OF MATCHING EMPLOYER CONTRIBUTIONS. Subject to the provisions
of the Plan and Trust Agreement, each Employer may, in its discretion,
contribute to the Trust on account of each Plan Year an amount (the "Matching
Employer Contributions") equal to the Matching Employer Contribution Percentage
multiplied by the Before-Tax Contributions (not in excess of a percentage of
Compensation specified by the Employer) made during such Plan Year pursuant to
Section 3.1 for its Employees who are entitled to participate in the Employer's
Matching Employer Contributions for such Year pursuant to Section 4.3.
Notwithstanding any provision of the Plan to the contrary, an Employer's
Matching Employer Contributions to the Trust on account of any Plan Year shall
in no event exceed the amount that would be deductible for such Year for
purposes of federal taxes on income under applicable provisions of the Code and
shall be made on the condition that such Contributions are deductible under
applicable provisions of the Code. The amount of Matching Employer
Contributions determined to be payable to the Trust shall be reduced by amounts
which have been forfeited or held in a suspense account in accordance with the
terms of the Plan.
4.2 TIME OF MATCHING EMPLOYER CONTRIBUTIONS. Matching Employer
Contributions may be made in cash or Company Stock. An Employer may make its
Matching Employer Contributions on account of any Plan Year, or partial
payments of such Matching Employer Contributions, at any time during such Year
or within the time following the close of such Year which is prescribed by law
for
<PAGE> 39
34
filing its federal income tax return (including extensions thereof).
4.3 ALLOCATION OF MATCHING EMPLOYER CONTRIBUTIONS. Each Employer's
Matching Employer Contributions made for a Plan Year shall, subject to the
provisions of Sections 3.5(3), 3.6(5) and 3.7(3), be allocated and credited to
the Account of each Employee of the Employer who is entitled to receive a
Matching Employer Contribution and for whom Before-Tax Contributions were made
during such Plan Year, with each such Employee being credited with a portion of
such Employer's Matching Employer Contribution equal to that percentage of the
Before-Tax Contributions (not in excess of a specified percentage of
Compensation) determined by the Employer pursuant to Section 3.1. An Employee
shall be entitled to receive a Matching Employer Contribution if he either (1)
is both a Member and an Eligible Employee on the last day of the Plan Year or
(2) terminated his employment with the Controlled Group during such Plan Year
after reaching age 60 or by reason of death or disability.
4.4 QUALIFIED NONELECTIVE CONTRIBUTIONS. For any Plan Year, an Employer,
in its discretion, may make a Qualified Nonelective Contribution (1) in such
amount, (2) for such Members and (3) in such proportions among such Members as
such Employer shall determine. Qualified Nonelective Contributions may be made
in cash or Company Stock and shall be made within the time prescribed by law
for making Qualified Nonelective Contributions. Each Employer shall designate
to the Trustee the Plan Year for
<PAGE> 40
35
which and the Members for whom any Qualified Nonelective Contribution is made.
4.5 ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS. Qualified
Nonelective Contributions shall be allocated to the Accounts of Members who are
designated by an Employer as eligible to share therein in such amounts as such
Employer directs.
4.6 PROFIT SHARING CONTRIBUTIONS. Subject to the provisions of the Plan
and Trust Agreement and to the extent it lawfully may, each Employer may, in
its discretion, contribute to the Trust on account of each Plan Year an amount
determined by such Employer as its Profit Sharing Contribution for such year.
The Profit Sharing Contribution of each Employer may be made in cash or Company
Stock and shall be made within the time following the close of the Plan Year
for which made which is prescribed by law for the filing by each such Employer
of its federal income tax return (including extensions thereof).
4.7 ALLOCATION OF PROFIT SHARING CONTRIBUTIONS. Each Employer's Profit
Sharing Contributions made for a Plan Year shall be allocated and credited to
the Accounts of those Employees of the Employer who either (1) are both Members
and Eligible Employees on the last day of such Plan Year or (2) terminated
employment with the Controlled Group during such Plan Year after reaching age
60 or by reason of death or disability. There shall be credited to the Account
of each such Employee as of the last day of each Plan Year a portion of the
Profit Sharing Contribution (if any) of such Employee's Employer for such Plan
Year equal to the amount of such Profit Sharing
<PAGE> 41
36
Contribution multiplied by a fraction, the numerator of which is the Employee's
Compensation for such Plan Year and the denominator of which is the total
Compensation for such Plan Year of all Employees of such Employer described in
the preceding sentence.
4.8 RETURN OF CONTRIBUTIONS TO EMPLOYERS. (1) Except as specifically
provided in this Section or in the other Sections of the Plan, the Trust Fund
shall never inure to the benefit of the Employers and shall be held for the
exclusive purposes of providing benefits to Employees, Members and their
Beneficiaries and defraying reasonable expenses of administering the Plan.
(2) If an Employer Contribution to the Trust is made by an Employer by a
mistake of fact, the excess of the amount contributed over the amount that
would have been contributed had there not occurred a mistake of fact shall be
returned to such Employer within one year after the payment of such
Contribution. If an Employer Contribution to the Trust made by an Employer is
not fully deductible under section 404 of the Code (or any successor thereto),
such Contribution, to the extent the deduction therefor is disallowed, shall be
returned to the Employer within one year after the disallowance of the
deduction. Earnings attributable to Employer Contributions returned to an
Employer pursuant to this Subsection may not be returned, but losses
attributable thereto shall reduce the amount to be returned; provided, however,
that if the withdrawal of the amount attributable to the mistaken or
non-deductible contribution would cause the balance of the individual Account
of any Member to be
<PAGE> 42
37
reduced to less than the balance which would have been in such Account had the
mistaken or non-deductible amount not have been contributed, the amount to be
returned to the Employer pursuant to this Section shall be limited so as to
avoid such reduction.
4.9 MAXIMUM ADDITIONS. (1) Notwithstanding the foregoing provisions of
this Article IV, the maximum annual addition (as defined in Subsection (2) of
this Section) to a Member's account for any limitation year (which shall be the
Plan Year) shall in no event exceed the lesser of (a) $30,000 (or, if greater,
one-fourth of the dollar limitation in effect under section 415(b)(1)(A) of the
Code) or (b) 25% of his compensation for such Plan Year.
(2) For the purpose of this Section, the term "annual additions" means the
sum for any limitation year of:
(a) all contributions (including, without limitation, Before-Tax
Contributions made pursuant to Section 3.1) made by the Controlled Group
which are allocated to the Member's account pursuant to a defined
contribution plan maintained by a Controlled Group Member,
(b) all employee contributions made by the Member to a defined
contribution plan maintained by a Controlled Group Member,
(c) all forfeitures allocated to the Member's account pursuant to a
defined contribution plan maintained by a Controlled Group Member, and
(d) any amount attributable to medical benefits allocated to the
Member's account established under
<PAGE> 43
38
section 419A(d)(1) of the Code if the Member is or was a key-employee (as
such term is defined in section 416(i) of the Code) during such limitation
year or any preceding limitation year.
(3) For the purposes of this Section, the term "compensation" shall include
only those items specified in Internal Revenue Service Regulations Section
1.415-2(d)(2) and shall exclude all those items specified in Internal Revenue
Service Regulations Section 1.415-2(d)(3), which excluded items shall include,
without limitation, Before-Tax Contributions made pursuant to Section 3.1.
(4) If a Member's annual additions would exceed the limitations of
Subsection (1) of this Section for a limitation year as a result of the
allocation of forfeitures, a reasonable error in estimating the Member's
compensation, or a reasonable error in determining the amount of Before-Tax
Contributions that may be made with respect to the Member under the limitations
of this Section (or other facts and circumstances which the Commissioner of
Internal Revenue finds justify application of the following rules of this
Subsection), Before-Tax Contributions made for him for such limitation year
which constitute part of the annual additions (together with any gains
attributable thereto) shall be returned to him to the extent necessary to
effectuate such reduction. If the return of all such Before-Tax Contributions
is not sufficient to effectuate such reduction, Matching Employer Contributions
allocable to such Member's Account and for such limitation year shall, to the
extent
<PAGE> 44
39
necessary to effectuate such reduction, be held by the Trustee in a suspense
account and shall be used to reduce Matching Employer Contributions for the
next year (and succeeding years, as necessary) for such Member if such Member
is covered by the Plan at the end of any such year; and if he is not covered by
the Plan at the end of any such year, such Matching Employer Contributions held
by the Trustee in such suspense account shall be allocated and reallocated to
the accounts of other Members, except that no such allocation or reallocation
shall cause the limitations of Subsection (1) of this Section to be exceeded
for any such other Member for such year. Investment gains and losses shall not
be allocated to the suspense account during the period such suspense account is
required to be maintained pursuant to this Subsection (4). In the event of a
termination of the Plan, any then remaining balance of the suspense account, to
the extent it may not then be allocated to Members, shall revert to the
Employers.
4.10 MAXIMUM BENEFITS. (1) Except as otherwise provided in section 415(e)
of the Code, in any case in which an individual is a participant in both a
defined benefit plan and a defined contribution plan maintained by the
Controlled Group, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any limitation year shall not exceed 1. For
purposes of the preceding sentence,
(a) the defined benefit plan fraction for any limitation year is a
fraction, (i) the numerator of which is the projected annual benefit of the
participant under the plan (determined as of the close of the year), and (ii)
the
<PAGE> 45
40
denominator of which is the lesser of (A) the product of 1.25, multiplied by
the dollar limitation in effect under section 415(b)(1)(A) of the Code for
such year or (B) the product of 1.4, multiplied by the amount which may be
taken into account under section 415(b)(1)(B) of the Code with respect to
such participant under the plan for such year; and
(b) the defined contribution plan fraction for any limitation
year is a fraction, (i) the numerator of which is the sum of the annual
additions to the participant's account as of the close of the year and for
all prior years, and (ii) the denominator of which is the sum of the lesser
of the following amounts determined for such year and for each prior year
of service with the Controlled Group (regardless of whether a plan was in
existence during such year):
(A) the product of 1.25, multiplied by the dollar limitation
in effect under section 415(c)(1)(A) of the Code for such year and each
such prior year of service, or
(B) the product of 1.4, multiplied by the amount
which may be taken into account under section 415(c)(1)(B) of the Code
with respect to such participant under such plan for such year and each
such prior year of service.
(2) Such reductions as are necessary to comply with the limitations of
this Section with respect to a Member in this Plan shall be made first
in any defined benefit plan which is
<PAGE> 46
41
material to the limitations stated in this Section and then in the Member's
annual additions to this Plan in accordance with Section 4.9(4).
4.11 DEFINITIONS. (1) For purposes of applying the limitations set forth in
Sections 4.9 and 4.10, all qualified defined benefit plans (whether or not
terminated) ever maintained by one or more Controlled Group Members shall be
treated as one defined benefit plan, and all qualified defined contribution
plans (whether or not terminated) ever maintained by one or more Controlled
Group Members shall be treated as one defined contribution plan.
(2) For purposes of this Section 4.11 and Sections 4.9 and 4.10, the term
"Controlled Group Member" shall be construed in the light of section 415(h) of
the Code.
<PAGE> 47
42
ARTICLE V - INVESTMENTS
-----------------------
5.1 INVESTMENT FUNDS. (1) The Trust Fund shall be divided into such
Investment Funds as the Investment Committee shall from time to time determine,
and all Before-Tax Contributions, Rollover Contributions and Employer
Contributions shall be invested therein as provided in Section 5.5.
Notwithstanding the foregoing, if any Employer Contributions are made in the
form of Company Stock, the Investment Committee shall direct the Trustee to
establish and maintain a Company Stock Fund as one of the Investment Funds.
Subject to the provisions of the Plan and Trust Agreement, the Trustee shall
hold, manage, administer, value, invest, reinvest, account for and otherwise
deal with each Investment Fund separately. The Trustee shall invest and
reinvest the principal and income of each such Fund and shall keep each such
Fund invested, without distinction between principal and income, as required
under the terms of the Plan and Trust Agreement. Dividends, interest and other
distributions received by the Trustee in respect of each Investment Fund shall
be reinvested in the same Fund.
(2) The Administrative Committee shall adopt, and may amend, from time to
time general rules of uniform application which shall provide for the
administration of each Investment Fund, including, but not limited to, rules
providing for (a) procedures pursuant to which a Member may elect to have his
Account invested in any such Fund (if more than one such Fund is established)
in accordance with Section 5.5, (b) the method of changing any such election
pursuant to Section 5.5 by either the
<PAGE> 48
43
Member or his Beneficiary and the frequency of any such election, (c) the Fund
in which a Member's Account shall be invested in the absence of an effective
election, and (d) any other matters which the Administrative Committee deems
necessary or advisable in the administration of any such Fund.
5.2 ACCOUNT; SUB-ACCOUNT. The Company shall establish and maintain, or
cause to be established and maintained, an Account for each Member, which
Account shall reflect, pursuant to Sub-Accounts established and maintained
thereunder, the amount, if any, of the Member's (a) Before-Tax Contributions,
(b) Rollover Contributions, (c) Matching Employer Contributions, if any, (d)
Qualified Nonelective Contributions, if any, and (e) Profit Sharing
Contributions, if any. The Company shall also maintain, or cause to be
maintained, separate records which shall show (i) the portion of each such
Sub-Account invested in each Investment Fund and (ii) the amount of
contributions thereto, payments and withdrawals therefrom and the amount of
income, expenses, gains and losses attributable thereto. The interest of each
Member in the Trust Fund at any time shall consist of his Account balance (as
determined pursuant to Section 5.4) as of the last preceding Valuation Date
plus credits and minus debits to such Account since that Date.
5.3 REPORTS. The Company shall cause reports to be made at least annually
to each Member and to the Beneficiary of each deceased Member as to the value
of his Account and the amount of his Vested Interest.
<PAGE> 49
44
5.4 VALUATION OF INVESTMENT FUNDS. (1) The Trustee shall, as of the close
of business on each Valuation Date, determine the value of each Investment
Fund. Each such valuation shall be made on the basis of the market value (as
determined by the Trustee) of the assets of each Fund, except that property
which the Trustee determines does not have a readily determinable market value,
and bonds and notes issued or guaranteed by the United States, shall be valued
at fair market value as determined by the Trustee in such manner as it deems
appropriate, and the Trustee's determination of such value shall be conclusive
on all interested persons for all purposes of the Plan. A similar valuation
shall be made at any other time upon the written direction of the
Administrative or the Investment Committee to the Trustee or when the Trustee
deems it appropriate to make such a valuation.
(2) The Trustee shall determine, from the change in value of each
Investment Fund between the current Valuation Date and the then last preceding
Valuation Date, the net gain or loss of each such Fund during such period
resulting from expenses and realized and unrealized earnings, profits and
losses of the Fund during such period. For this purpose, the transfer of funds
to or from an Investment Fund pursuant to Section 5.5, Before-Tax
Contributions, Rollover Contributions and Employer Contributions allocated to
an Investment Fund, and payments, distributions and withdrawals from an
Investment Fund to provide benefits under the Plan for Members or Beneficiaries
shall not be deemed to be earnings, profits, expenses or losses of the
Investment Fund.
<PAGE> 50
45
(3) After each Valuation Date, the net gain or loss of each Investment Fund
determined pursuant to Subsections (1) and (2) of this Section shall be
allocated as of such Valuation Date to the Accounts of Members and
Beneficiaries of deceased Members in proportion to the amounts of such Accounts
invested in each Fund on such Valuation Date. In determining the amounts of
Accounts on a Valuation Date for the purposes of this Subsection (3), the
Investment Committee shall adopt rules to the effect that in determining the
allocation of the net gain or loss of each Investment Fund for any such period
there shall be counted, on a proportionate basis, contributions to or
distributions from, or other credits or debits to, the Accounts of Members and
Beneficiaries since the beginning of such period to the extent the amounts so
distributed or debited were in such Fund during such period. Such rules shall
be uniform in their application to all persons who are similarly situated.
5.5 INVESTMENT OF CONTRIBUTIONS. Each Member may, pursuant to rules and
procedures adopted by the Administrative Committee, direct that Before-Tax,
Rollover and Employer Contributions made by or for him shall be invested in any
or all of the Investment Funds, provided that any Employer Contributions made
in the form of Company Stock shall be invested in the Company Stock Fund and
shall not be subject to the Members' investment directions. An investment
option selected by a Member shall remain in effect and be applicable to all
subsequent such Contributions made by or for him unless and until an investment
change is made by him and becomes effective pursuant to rules and
<PAGE> 51
46
procedures adopted by the Administrative Committee. In the absence of an
effective investment direction, Before-Tax, Rollover and Employer Contributions
made to the Trust by or for a Member shall be invested in such Investment Fund
or Funds, and in such proportions, as is designated by the Investment Committee
from time to time for such purpose.
5.6 DIRECTIONS TO TRUSTEE. The Administrative Committee shall give
appropriate and timely directions to the Trustee in order to permit the Trustee
to give effect to the investment choice and investment change elections made
under Section 5.5 and to provide funds for distributions and withdrawals
pursuant to Article VI.
5.7 LOANS TO MEMBERS. (1) A Member who is an Employee or a "party in
interest" within the meaning of Section 3(14) of ERISA may apply on the form
provided by the Administrative Committee for a loan from his Vested Interest in
his Account. If the Committee determines that the Member is not in bankruptcy
or similar proceedings and is entitled to a loan in accordance with the
following provisions of this Section, the Committee shall direct the Trustee to
make a loan to the Member from his Account. Each loan shall be charged against
the Member's Vested Interest in his Sub-Accounts as follows: first, against
the Member's Rollover Contribution Sub-Account, if any; second, to the extent
necessary, against the Member's Qualified Nonelective Contributions, if any;
third, to the extent necessary, against the Member's Matching Employer
Contributions Sub-Account, if any; fourth, to the extent necessary, against the
<PAGE> 52
47
Member's Profit Sharing Contributions Sub-Account, if any; and fifth, to the
extent necessary, against the Member's Before-Tax Contributions Sub-Account.
(2) A Member shall not be entitled to a loan under this Section unless the
Member consents to (a) the use of the Member's Account as security as provided
in Subsection (5)(c) of this Section and (b) the possible reduction of the
Member's Account as provided in Subsection (6) of this Section.
(3) Each loan shall be in an amount which is not less than $1,000 and shall
be expressed in a multiple of $100. A Member may have only one loan
outstanding at any one time. The maximum loan to any Member (when added to the
outstanding balance of all other loans to the Member from all qualified
employer plans (as defined in section 72(p)(4) of the Code) of the Controlled
Group) shall be an amount which does not exceed the lesser of
(a) $50,000, reduced by the excess (if any) of (i) the highest outstanding
balance of such other loans during the one-year period ending on the day
before the date on which such loan is made, over (ii) the outstanding balance
of such other loans on the date on which such loan is made, or
(b) 50% of the value of such Member's Vested Interest in his Account on the
date on which such loan is made. (4) For each Member for whom a loan is
authorized pursuant to this Section, the Committee shall (a) direct the
Trustee to liquidate the Member's interest in the Investment Funds as
<PAGE> 53
48
directed in writing by the Member or, in the absence of such written
direction, on a default basis determined by the Committee, to the extent
necessary to provide funds for the loan, (b) direct the Trustee to disburse
such funds to the Member upon the Member's execution of the promissory note
and security agreement referred to in Subsection (5)(d) of this Section, (c)
transmit to the Trustee the executed promissory note and security agreement
referred to in Subsection (5)(d) of this Section, and (d) establish and
maintain a separate recordkeeping account within the Member's Account (the
"Loan Account") (i) which initially shall be in the amount of the loan, (ii)
to which the funds for the loan shall be deemed to have been allocated and
then disbursed to the Member, (iii) to which the promissory note shall be
allocated and (iv) which shall show the unpaid principal of and interest on
the promissory note from time to time. All payments of principal and
interest by a Member shall be credited initially to his Loan Account and
applied against the Member's promissory note, and then invested in the
Investment Funds pursuant to the Member's direction under Section 5.5.
(5) Loans made pursuant to this Section:
(a) shall be made available to all Members on a reasonable equivalent
basis;
(b) shall not be made available to Highly Compensated Employees in a
percentage amount greater than the percentage amount made available to other
Members;
(c) shall be secured by the Member's Loan Account; and
(d) shall be evidenced by a promissory note and
<PAGE> 54
49
security agreement executed by the Member which provides for:
(i) the security referred to in paragraph (c) of this Subsection;
(ii) a rate of interest determined by the Committee in accordance with
applicable law;
(iii) repayment within a specified period of time, which shall not extend
beyond five years;
(iv) repayment in equal payments over the term of the loan, with payments
not less frequently than quarterly; and
(v) for such other terms and conditions as the Committee shall
determine, which shall include provision that:
(A) with respect to a Member who is an Employee, the loan will be repaid
pursuant to authorization by the Member of equal payroll deductions over
the repayment period sufficient to amortize fully the loan within the
repayment period, provided, however, the Committee may waive the
requirement of equal payroll deductions if the Company payroll through
which the Member is paid cannot accommodate such deductions;
(B) the loan shall be prepayable in whole at any time without penalty;
and
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50
(C) the loan shall be in default and become immediately due and
payable upon the first to occur of the following events:
(I) the Member's failure to make required payments on the
promissory note;
(II) in the case of a Member who is not an Employee,
distribution of his Account; or
(III) the filing of a petition, the entry of an order
or the appointment of a receiver, liquidator, trustee or other person
in a similar capacity, with respect to the Member, pursuant to any
state or federal law relating to bankruptcy, moratorium,
reorganization, insolvency or liquidation, or any assignment by the
Member for the benefit of his creditors.
(6) Notwithstanding any other provision of the Plan, a loan made pursuant
to this Section shall be a first lien against the Member's Loan Account. Any
amount of principal or interest due and unpaid on the loan at the time of any
default on the loan, and any interest accruing thereafter, shall be satisfied
by deduction from the Member's Loan Account, and shall be deemed to have been
distributed to the Member, as follows:
(a) in the case of a Member who is an Employee and who is not, at the
time of the default, eligible to receive distribution of his Account under
the
<PAGE> 56
51
provisions of Article VI, other than Section 6.7, or by order of a court, at
such time as he first becomes eligible to receive distribution of his Account
under the provisions of Article VI, other than Section 6.7, or by order of a
court; or
(b) in the case of any other Member, immediately upon such default.
If, as a result of the application of the preceding sentence, an amount of
principal or interest on a loan remains outstanding after default, interest
at the rate specified in the promissory note executed by the Member in
respect of such loan shall continue to accrue on such outstanding amount
until fully satisfied by deduction from the Member's Loan Account as
hereinabove provided or by payment by or on behalf of such Member.
<PAGE> 57
52
ARTICLE VI - DISTRIBUTIONS
--------------------------
6.1 VESTING AND DISTRIBUTIONS. A Member's interest in the Trust Fund shall
only be distributable as provided in this and the following Sections of this
Article. A Member or Beneficiary who is eligible to receive a distribution
under applicable Sections of this Article shall obtain an application for that
purpose from the Administrative Committee and file with the Administrative
Committee his application in writing on such form, furnishing such information
as the Administrative Committee may reasonably require, including satisfactory
proof of his age and that of his Spouse (if applicable) and any authority in
writing that the Administrative Committee may request authorizing it to obtain
pertinent information, certificates, transcripts and/or other records from any
public office.
6.2 DISTRIBUTIONS ON DEATH WHILE AN EMPLOYEE. If a Member dies while in
the employ of a Controlled Group Member, his entire Account, valued as of the
Valuation Date coinciding with or next following the date on which the Death
Beneficiary's application for distribution is received by the Administrative
Committee, shall be paid to the Member's Death Beneficiary in a lump sum in
cash within 60 days after such Valuation Date.
6.3 DISTRIBUTIONS ON EMPLOYMENT SEVERANCE. (1) Upon a Member's Employment
Severance, the Member shall be eligible to elect the distribution of his entire
Vested Interest, valued as of the Valuation Date specified in Subsection (3) of
this Section, and it shall be paid to him pursuant to one of the following
methods as the Member shall elect:
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53
(a) such amount shall be paid to him in a lump sum in cash, or
(b) such amount shall be paid to him in cash in not more than 10 annual
installments, as elected by the Member, with each annual installment being
based on the value of the Member's Vested Interest in his Account on the
Valuation Date immediately preceding the date such installment is to be paid
and being a fraction of such value, in which the numerator is one and the
denominator is the total number of remaining annual installments to be made.
(2) An election by a Member pursuant to Subsection (1) of this Section may
be made by the Member in writing on an application prescribed by the
Administrative Committee pursuant to Section 6.1, signed by the Member and
filed with the Administrative Committee and may be changed or revoked at any
time before the date on which the Member's Account is to be paid or commence to
be paid pursuant to Subsection (3) of this Section.
(3) Distributions to a Member pursuant to this Section shall be based on
the value of the Member's Vested Interest in his Account on the Valuation Date
coinciding with or next following the later of (a) the date on which he files
his application with the Administrative Committee pursuant to Section 6.1 or
(b) his Employment Severance Date, and shall be paid or commence to be paid to
the Member within 60 days after such Valuation Date.
<PAGE> 59
54
(4) Notwithstanding any other provision of the Plan, if the value of a
Member's Vested Interest on the Valuation Date coinciding with or next
following his Employment Severance Date does not exceed $3,500, such Vested
Interest shall be paid to him in a lump sum in cash (or, if the value of
the Member's Vested Interest on such Valuation Date is zero, shall be
deemed to have been paid to him in a lump sum) within 60 days after such
Valuation Date.
(5) In the case of a Member who incurs an Employment Severance, if any
portion of the Member's Account is not nonforfeitable under Section
1.1(53), that portion shall be forfeited as of the earlier of (a) the
Valuation Date specified in Subsection (3) (if payment is made in the form
of a lump sum) or Subsection (4) of this Section, as applicable and (b) the
Valuation Date coinciding with or next following the date on which he
incurs five consecutive 1-Year Breaks in Service. Amounts, if any,
forfeited pursuant to this Subsection shall be used to reduce subsequent
Employer Contributions. In the event of the termination of the Plan, any
forfeitures not so applied at the time of such termination shall be
returned to the Employers.
(6) If the Vested Interest of a Member who incurs an Employment
Severance is paid (or deemed to be paid) to him in a lump sum, such
Member's Years of Vesting Service to which such lump sum payment relates
shall thereafter be disregarded for the purpose of determining his Vested
Interest in the amount attributable to Employer Contributions included in
such payment. Notwithstanding the provisions of the immediately preceding
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55
sentence, however, if (a) such Member's Vested Interest is less than 100% of
his Account, (b) he is rehired as an Employee before he incurs five consecutive
1-Year Breaks in Service and (c) he repays to the Trust Fund, not later than
the earlier of (i) the end of the five-year period beginning with his date of
rehire or (ii) the close of the first period of five consecutive 1-Year Breaks
in Service incurred by him after such payment of his Vested Interest, an amount
equal to such payment (including the amount attributable to his Member
contributions included in such payment), (A) his said Years of Vesting Service
to which such payment related shall be reinstated for all purposes of the Plan
and (B) the amount of his Account shall be restored, as of the date of such
repayment, to an amount equal to the sum of the amount paid to him and the
amount forfeited under the preceding Subsections of this Section. For purposes
of the preceding sentence, a Member whose Vested Interest was deemed to have
been distributed to him at the time of his Employment Severance shall be deemed
to have repaid such distribution upon his rehire as an Employee.
6.4 DISTRIBUTIONS ON DEATH AFTER EMPLOYMENT SEVERANCE. If a Member dies
after his Employment Severance and before his entire Vested Interest has been
paid to him, the undistributed portion of his Vested Interest, valued as of the
Valuation Date described in Section 6.2, shall be paid to his Death Beneficiary
in a lump sum in cash within 60 days after the applicable date described in
Section 6.2. That portion of such Member's Account which is not nonforfeitable
under Section 1.1(53) shall be
<PAGE> 61
56
forfeited as of the date of his death and such forfeited amount shall be
applied as provided in Section 6.3(5).
6.5 DISTRIBUTIONS PURSUANT TO A QDRO. If a qualified domestic relations
order (as defined in section 414(p) of the Code) so provides, the portion of
a Member's Account payable to the alternate payee(s) may be distributed to the
alternate payee(s) at the time specified in such order, regardless of whether
the Member is entitled to a distribution from the Plan at such time. The
portion of the Account so payable shall be valued as of the Valuation Date
coincident with or next following the date specified in such order.
6.6 LATEST TIME OF DISTRIBUTION. (1) The distribution of a Member's
Vested Interest shall occur, or if such distribution is to take place over a
period of time, such distribution shall begin, as provided in the preceding
Sections of this Article, but (subject to the application requirements of
Section 6.1) in no event later than 60 days after the close of the Plan Year in
which the latest of the following events occur: (a) the date on which the
Member attains age 60, (b) the l0th anniversary of the year in which the Member
commenced membership in the Plan, or (c) the Member's termination of employment
with the Controlled Group.
(2)(a) Notwithstanding the preceding provisions of this Article, (i) the
entire Vested Interest of each Member under the Plan who has not commenced
receiving a distribution hereunder shall be distributed to him not later than
April 1 of the calendar year following the calendar year in which he attains
age
<PAGE> 62
57
70-1/2 and, with respect to Members who are Employees, on December 31 of each
succeeding year, and (ii) the entire interest of a Death Beneficiary under the
Plan shall be distributed to him within 5 years after such Member's death. The
distributions required by this Subsection shall be made in lump sum payments in
cash of the entire amount allocated to the Member's Account on the Valuation
Date coinciding with or immediately preceding the date on which any
distribution is required to be made pursuant to this Subsection.
(b) Distributions under the Plan shall be made in accordance with the
provisions of section 401(a)(9) of the Code and Treasury Regulations issued
thereunder, (including Treasury Regulations Section 1.401(a)(9)-2), which
provisions and Regulations are hereby incorporated by reference, provided that
such provisions and Regulations shall override the other distribution
provisions of the Plan (including the provisions of paragraph (a) of this
Subsection) only to the extent that such other Plan provisions are inconsistent
with the provisions of section 401(a)(9) of the Code and the Treasury
Regulations.
6.7 WITHDRAWALS ON ACCOUNT OF HARDSHIP. (1) Upon not less than 30 days
prior written notice filed with the Administrative Committee, effective as of
any Valuation Date, a Member who is an Employee and who has obtained all
distributions and withdrawals (other than for Hardship) and all nontaxable
loans then available under all plans maintained by the Controlled Group, may
request, on a form provided by and filed with the Committee, a withdrawal on
account of Hardship of all or a part
<PAGE> 63
58
of his Before-Tax Contributions Sub-Account (excluding any earnings allocated
thereto). Upon making a determination that the Member is entitled to a
withdrawal on account of Hardship, the Committee shall direct the Trustee to
distribute to such Member all or a portion of his Before-Tax Contribution
Sub-Account (excluding any net earnings allocable thereto), provided that the
amount of the withdrawal shall not be in excess of the amount necessary to
alleviate such Hardship. If a withdrawal on account of Hardship is made by a
Member pursuant to this Subsection, the following rules shall apply
notwithstanding any other provision of the Plan (or any other plan maintained
by the Controlled Group) to the contrary: (a) the Member's Before-Tax
Contributions to the Plan (or any comparable contributions to any other plan
maintained by the Controlled Group) shall be suspended for a period of 12
months following receipt of the Hardship withdrawal; and (b) the amount of the
Member's Before-Tax Contributions (and any comparable contributions to any
other plan maintained by the Controlled Group) for the Member's taxable year
immediately following the taxable year of the Hardship withdrawal shall not be
in excess of the applicable limit under section 402(g) of the Code for such
next taxable year less the amount of such Member's Before-Tax Contributions
(and any comparable contributions to any other plan maintained by the
Controlled Group) for the taxable year of the Hardship withdrawal. A Member
who has made a withdrawal pursuant to this Section and who desires to resume
having Before-Tax Contributions made for him may do so, as of any Valuation
Date
<PAGE> 64
59
after the expiration of the suspension period specified in this Section, if he
is then an Eligible Employee and he again enrolls as a contributing Member
pursuant to Sections 2.2 and 3.1.
(2) Withdrawals from a Member's Account made pursuant to this Section shall
be allocated among the Investment Funds in the same proportion as the value
(determined as of the Valuation Date which is the effective date of such
withdrawal) of such Member's Before-Tax Contributions Sub-Account invested in
each such Investment Fund bears to the total value (determined as of such
Valuation Date) of his Before-Tax Contributions Sub-Account.
6.8 EFFECT OF FIVE CONSECUTIVE 1-YEAR BREAKS IN SERVICE ON VESTING SERVICE.
If a Member's Employment Severance occurs and he is subsequently rehired as an
Employee after incurring five consecutive 1-Year Breaks in Service, Years of
Vesting Service after such five-year period shall not be taken into account for
the purpose of determining his Vested Interest in the amount attributable to
Employer Contributions allocated to his Account before such five-year period.
6.9 DISTRIBUTION ON SALE OF ASSETS OR DISPOSITION OF BUSINESS.
Notwithstanding the preceding provisions of this Article, in the event that a
Member's termination of employment with the Controlled Group is caused by the
disposition by an Employer of substantially all of the assets of a trade or
business, or its interest in a subsidiary, and such Member continues employment
with the corporation acquiring such assets or such subsidiary, the Member, if
he so elects on an application
<PAGE> 65
60
filed with the Administrative Committee pursuant to Section 6.1, shall be
entitled to a distribution of his Account valued as of the Valuation Date
specified in Section 6.3(3) or 6.3(4), as applicable; provided, however, that
such Account may only be distributed in the form of a lump sum.
6.10 TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS. (1) If a Member or
Spouse is eligible to receive a distribution from the Plan that constitutes an
Eligible Rollover Distribution and the Member or Spouse elects to have all or a
portion of such distribution paid directly to an "eligible retirement plan" (as
defined in Subsection (3) of this Section) and specifies the eligible
retirement plan to which the distribution is to be paid, such distribution (or
portion thereof) shall be made in the form of a direct rollover to the eligible
retirement plan so specified. A Member or Spouse may not elect a direct
rollover of a portion of an Eligible Rollover Distribution unless the amount to
be rolled over is at least $500. A direct rollover is a payment made by the
Plan to the eligible retirement plan so specified for the benefit of the Member
or Spouse. Notwithstanding the preceding provisions of this Section, a direct
rollover of an Eligible Rollover Distribution shall not be made if a Member's
or Spouse's Eligible Rollover Distributions for a Plan Year are reasonably
expected to total less than $200.
(2) The Company shall prescribe reasonable procedures for elections to be
made pursuant to this Section. Within a reasonable period of time (as
prescribed by Treasury regulations or rulings) before the payment of an
Eligible Rollover
<PAGE> 66
61
Distribution, the Company shall provide a written notice to the Member or
Spouse describing his or her rights under this Section and such other
information required to be provided under section 402(f) of the Code. Unless
otherwise specifically provided herein, for purposes of this Section, the term
"Spouse" shall include a former spouse who is an alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the Code.
(3) For purposes of this Section, the term "eligible retirement plan" means
an individual retirement account or annuity described in section 408 of the
Code, a defined contribution plan that meets the requirements of section 401(a)
of the Code and accepts rollovers, an annuity plan described in section 403(a)
of the Code, or any other type of plan that is included within the definition
of "eligible retirement plan" under section 401(a)(31)(D) of the Code;
provided, however, that with respect to a Spouse (but not a former spouse who
is an alternate payee) who receives a distribution after a Member's death an
"eligible retirement plan" shall mean only an individual retirement account or
annuity described in section 408 of the Code.
<PAGE> 67
62
ARTICLE VII - ADMINISTRATION OF THE TRUST FUND
----------------------------------------------
7.1 THE TRUST FUND. The Trust Fund shall be held by the Trustee for the
exclusive benefit of the Members and their Beneficiaries and shall be invested
by the Trustee upon such terms and in such property as is provided in the Plan
and in the Trust Agreement. The Trustee shall, from time to time, make
payments, distributions and deliveries from the Trust Fund as provided in the
Plan. The Trustee in its relation to the Plan shall be entitled to all of the
rights, privileges, immunities and benefits conferred upon it and shall be
subject to all of the duties imposed upon it under the Plan and Trust
Agreement. The Trust Agreement is hereby incorporated in the Plan by
reference, and each Employer, by adopting the Plan, affirms the authority of
the Company to execute the Trust Agreement (including any amendment or
supplement thereto) in its behalf with respect to the Plan.
7.2 NO GUARANTEE AGAINST LOSS. Neither the Trustee, the Administrative
Committee, the Investment Committee nor any Employer in any manner guarantees
the Trust Fund or any part thereof against loss or depreciation. All persons
having any interest in the Trust Fund shall look solely to the Trust Fund for
payment with respect to such interest.
7.3 PAYMENT OF BENEFITS. All payments of benefits provided for by the Plan
shall be made solely out of the Trust Fund in accordance with instructions
given to the Trustee by the Administrative Committee pursuant to the terms of
the Plan, and neither any Employer, the Administrative Committee, the
<PAGE> 68
63
Investment Committee nor the Trustee shall be otherwise liable for any benefits
payable under the Plan.
7.4 NO DIVERSION OF TRUST FUND. Except as specifically provided in other
Sections of the Plan, it shall be and is hereby made impossible, at any time
prior to the satisfaction of all liabilities with respect to Employees and
their Beneficiaries under the Plan, for any part of the corpus or income of
the Trust Fund to be (within the taxable year or thereafter) used for, or
diverted to, purposes other than the exclusive benefit of Employees or
their Beneficiaries.
<PAGE> 69
64
ARTICLE VIII - COMMITTEES
-------------------------
8.1 COMPOSITION OF COMMITTEES. The Administrative Committee and the
Investment Committee shall each consist of three or more members who may be,
but are not required to be, Members, Employees or directors of an Employer.
The members of the Administrative Committee and the Investment Committee and
their successors shall be appointed by the Board to serve for such terms as the
Board may fix. Any member of the Administrative or Investment Committee may be
removed at any time by the Board, which may also increase, or decrease to not
less than three, the number of Committee members. Any member of the
Administrative or Investment Committee may resign by delivering his written
resignation to the Board. Upon the existence of any vacancy in the membership
of the Administrative or Investment Committee, the Board shall appoint a
successor, unless the number of Committee members is decreased as provided in
this Section.
8.2 CERTIFICATION OF MEMBERS. The Company shall certify the number and
names of the members of the Administrative Committee and the Investment
Committee to the Trustee. The Trustee may rely upon such certification until
it receives written notice from the Company as to a change in the membership of
the Administrative or Investment Committee.
8.3 FORMALITIES OF COMMITTEE ACTION. The Administrative Committee and the
Investment Committee may adopt, and amend from time to time, such rules for its
government and the conduct of its business as it deems advisable, including a
rule authorizing one or more of its members or its officers to
<PAGE> 70
65
execute instruments on its behalf evidencing its action and the Trustee and any
other persons may rely on any instrument signed by such a person or persons so
authorized as properly evidencing the action of the Committee. The
Administrative or Investment Committee may from time to time, by resolution
adopted by it, delegate to one or more of its members or officers, to a
sub-committee or sub-committees or to an agent or agents of the Committee, such
of the Committee's functions and duties as the Committee deems advisable. The
Administrative or Investment Committee shall each elect its Chairman from its
membership, and may elect other officers who need not be Committee members.
Except as may otherwise be provided by rules or procedures adopted by the
Committee, the Administrative and Investment Committees may each act by
majority action either at a meeting or in writing without a meeting and any
action which purports to be an action of the Committee and which is evidenced
by the signatures of a majority of the members of the Committee shall be deemed
to be the action of the Committee.
8.4 ADOPTION OF RULES. The Administrative Committee may from time to time
adopt rules for the administration of the Plan. Such rules may be amended by
the Administrative Committee from time to time, but such rules, as the same may
be amended, (a) insofar as they apply to the rights of Members, shall be
uniform in their application to all Members who are similarly situated and (b)
shall not be inconsistent with the terms of the Plan or Trust Agreement.
<PAGE> 71
66
8.5 FUNCTION AND DUTIES OF ADMINISTRATIVE COMMITTEE. (1) The
Administrative Committee shall have such functions and duties and only such
functions and duties as are specifically conferred upon it by the Plan or the
Trust Agreement or as may be delegated to it pursuant to Section 10.3. A
member of the Administrative Committee shall not be disqualified from acting
because of any interest, benefit or advantage, inasmuch as Committee members
may be directors of an Employer, Employees or Members, but no Committee member
shall vote or act in connection with the Committee's action relating solely to
himself. Except as may be required by law, no bond or other security need be
required of any member of the Administrative Committee in such capacity in any
jurisdiction.
(2) The Administrative Committee shall have sole and absolute discretion to
interpret the provisions of the Plan (including, without limitation, by
supplying omissions from, correcting deficiencies in, or resolving
inconsistencies or ambiguities in, the language of the Plan), to determine the
rights and status under the Plan of Members or other persons, to decide
disputes arising under the Plan and to make any determinations and findings
with respect to the benefits payable thereunder and the persons entitled
thereto as may be required for the purposes of the Plan. In furtherance of,
but without limiting, the foregoing, the Administrative Committee is hereby
granted the following specific authorities, which it shall discharge in its
sole and absolute discretion in accordance with
<PAGE> 72
67
the terms of the Plan (as interpreted, to the extent necessary, by the
Administrative Committee):
(a) To resolve all questions arising under the provisions of the Plan as to
any individual's entitlement to become a Member;
(b) To determine the amount of an Employee's Compensation; and
(c) To conduct the review procedure specified in Section 9.3.
All decisions of the Administrative Committee as to the facts of any case, as
to the interpretation of any provision of the Plan or its application to any
case, and as to any other interpretation, matter or other determination or
question under the Plan shall be final and binding on all parties affected
thereby, subject to the provisions of Sections 8.7 and 9.3. The Administrative
Committee shall instruct the Trustee as to the benefits to be paid under the
Plan and shall furnish the Trustee with any information reasonably required by
it for the purpose of the payment of such benefits.
(3) The Administrative Committee may employ such clerical, legal,
accounting or other assistance as it deems necessary or advisable for the
proper performance of its functions and duties under the Plan.
8.6 RELIANCE ON RECORDS. The Administrative Committee may rely upon the
records of a Controlled Group Member or upon any certificate, statement or
other representation made to it by an Employee, a Member, a Beneficiary, a
Controlled Group Member,
<PAGE> 73
68
an auditor or the Trustee concerning any fact required to be determined under
any of the provisions of the Plan and shall not be required to make inquiry
into the propriety of any action by an Employer, an auditor or the Trustee.
8.7 REVOCABILITY OF ADMINISTRATIVE COMMITTEE ACTION. Any action taken by
the Administrative Committee with respect to the rights or benefits of any
person under the Plan shall be revocable by the Administrative Committee as to
payments or distributions not theretofore made, pursuant to such action, from
the Trust Fund; and appropriate adjustments may be made in future payments or
distributions to a Member or his Beneficiary to offset any excess payment or
underpayment theretofore made to such Member or his Beneficiary from the Trust
Fund.
8.8 RESPONSIBILITIES OF INVESTMENT COMMITTEE. (1) The Investment
Committee shall have such responsibilities and authority and only such
responsibilities and authority as are specifically conferred upon it by the
Plan or Trust Agreement or as may be delegated to it pursuant to Section 10.3.
Except as may be required by law, no bond or other security need be required of
any member of the Investment Committee in such capacity in any jurisdiction.
(2) The Investment Committee shall have the responsibilities and authority
set forth in the Plan and the Trust Agreement, including, but not limited to,
the responsibility and authority to:
(a) monitor the performance of the Trustee,
<PAGE> 74
69
(b) select the Investment Funds to be made available pursuant to Section
5.1,
(c) pursuant to Section 5.5, to select the Investment Fund or Funds that
will apply in the absence of a Member's direction,
(d) designate the person or persons (including the Investment Committee
or the Trustee) who will have discretionary investment authority
regarding the assets of the Investment Funds, and
(e) to perform the duties specified in Article XIV with respect to Company
Stock.
8.9 COMPENSATION AND EXPENSES. The members of the Administrative and
Investment Committees shall serve without compensation for their services as
Committee members unless the Company shall provide for compensation for such
services. The reasonable expenses of the Administrative and Investment
Committees shall be paid as provided in Section 12.2.
8.10 UNIFORM ADMINISTRATION. All action taken by the Administrative
Committee under the Plan shall treat all persons similarly situated in a
uniform and consistent manner.
<PAGE> 75
70
ARTICLE IX - CLAIMS PROCEDURES
------------------------------
9.1 METHOD OF FILING CLAIM. Any Member or Beneficiary who believes that he
is entitled to receive a benefit under the Plan which he has not received may
file with the Administrative Committee a written claim specifying the basis for
his claim and the facts upon which he relies in making such claim. Such a
claim must be signed by the claimant or his authorized representative and shall
be deemed filed when delivered to any member of the Administrative Committee.
9.2 NOTIFICATION TO CLAIMANT. Unless such claim is allowed in full by the
Administrative Committee, the Committee shall (within 90 days after such claim
was filed, plus an additional period of 90 days if required for processing and
if notice of the 90-day extension of time indicating the specific circumstances
requiring the extension and the date by which a decision shall be rendered is
given to the claimant within the first 90-day period) cause written notice to
be mailed to the claimant of the total or partial denial of such claim. Such
notice shall be written in a manner calculated to be understood by the claimant
and shall state (a) the specific reason(s) for the denial of the claim, (b)
specific reference(s) to pertinent provisions of the Plan and/or Trust
Agreement on which the denial of the claim was based, (c) a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary, and
(d) an explanation of the review procedure specified in Section 9.3. If a
claimant does not receive any
<PAGE> 76
71
notice from the Administrative Committee within 90 days after his claim is
filed with the Committee, his claim shall be deemed to have been denied.
9.3 REVIEW PROCEDURE. Within six months after the denial of his claim, the
claimant may appeal such denial by filing with the Administrative Committee his
written request for a review of his said claim. If the claimant does not file
such request with the Committee within such six month period, the claimant
shall be conclusively presumed to have accepted as final and binding the
initial decision of the Committee on his claim. If such an appeal is so filed
within such six months, a Named Fiduciary designated by the Company shall (a)
conduct a full and fair review of such claim and (b) mail or deliver to the
claimant a written decision on the matter based on the facts and pertinent
provisions of the Plan and/or Trust Agreement within a period of 60 days after
the receipt of the request for review unless special circumstances require an
extension of time, in which case such decision shall be rendered not later than
120 days after receipt of such request. If an extension of time for review is
required, written notice of the extension shall be furnished to the claimant
prior to the commencement of the extension. Such decision (i) shall be written
in a manner calculated to be understood by the claimant, (ii) shall state the
specific reason(s) for the decision, (iii) shall make specific reference(s) to
pertinent provisions of the Plan and/or Trust Agreement on which the decision
is based and (iv) shall, to the extent permitted by applicable law, be final
and binding on all
<PAGE> 77
72
interested persons. During such full review, the claimant or his duly
authorized representative shall be given an opportunity to review documents
that are pertinent to the claimant's claim and to submit issues and comments in
writing. If the decision on review is not furnished within such 60-day or
120-day period, as the case may be, the claim shall be deemed denied on review.
<PAGE> 78
73
ARTICLE X - ADMINISTRATION OF THE PLAN
AND FIDUCIARY RESPONSIBILITIES
--------------------------------------
10.1 RESPONSIBILITY FOR ADMINISTRATION. Except to the extent that
particular responsibilities are assigned or delegated to other Fiduciaries
pursuant to the Trust Agreement, other Articles of the Plan or Section 10.3,
the Company (as the Administrator) shall be responsible for the administration
of the Plan. Each other Fiduciary shall have only such powers, duties,
responsibilities and authorities as are specifically conferred upon him or it
pursuant to provisions of the Plan or Trust Agreement.
10.2 NAMED FIDUCIARIES. For the purposes of the Plan, the Named
Fiduciaries shall be the Company, the Administrative Committee, the Investment
Committee and the Trustee. The Company may designate any other person or
persons as a Named Fiduciary or Named Fiduciaries to perform functions
specified in such instrument (or in a delegation pursuant to Section 10.3)
which relate to the administration of the Plan, provided such designee accepts
such designation. Such a designation may be terminated at any time by notice
from the Company to the designee or by notice from the designee to the Company.
10.3 DELEGATION OF FIDUCIARY RESPONSIBILITIES. (1) The Company, the
Administrative Committee and the Investment Committee may each delegate to any
person or persons any one or more powers, functions, duties and/or
responsibilities with respect to the Plan or the Trust Fund.
(2) Any delegation pursuant to Subsection (1) of this Section, (a) shall be
signed on behalf of the delegator, be
<PAGE> 79
74
delivered to and accepted in writing by the delegatee, (b) shall contain such
provisions and conditions relating to such delegation as the delegator deems
appropriate, (c) shall specify the powers, functions, duties and/or
responsibilities therein delegated, (d) may be amended from time to time by
written agreement signed on behalf of the delegator and by the delegatee and
(e) may be revoked (in whole or in part) at any time by written notice from one
party to the other. A fully executed copy of any instrument relating to any
delegation (or revocation of any delegation) under the Plan shall be filed with
each of the Named Fiduciaries.
10.4 IMMUNITIES. Except as otherwise provided in Section 10.5 or by
applicable law, (a) no Fiduciary shall have the duty to discharge any duty,
function or responsibility which is specifically assigned exclusively to
another Fiduciary or Fiduciaries by the terms of the Plan or Trust Agreement or
is delegated exclusively to another Fiduciary or Fiduciaries pursuant to
procedures for such delegation provided for in the Plan or Trust Agreement; (b)
no Fiduciary shall be liable for any action taken or not taken with respect to
the Plan or Trust Fund except for his own negligence or willful misconduct; (c)
no Fiduciary shall be personally liable upon any contract or other instrument
made or executed by him or on his behalf in the administration of the Plan or
Trust Fund; (d) no Fiduciary shall be liable for the neglect, omission or
wrongdoing of another Fiduciary; and (e) any Fiduciary may rely and shall be
fully protected in acting upon the advice of counsel, who may be
<PAGE> 80
75
counsel for any Controlled Group Member, upon the records of a Controlled Group
Member, upon the opinion, certificate, valuation, report, recommendation or
determination of the Auditor of a Controlled Group Member, or upon any
certificate, statement or other representation made by an Employee, a Member, a
Beneficiary or the Trustee concerning any fact required to be determined under
any of the provisions of the Plan.
10.5 LIMITATION ON EXCULPATORY PROVISIONS. Notwithstanding any other
provision of the Plan or Trust Agreement, no provision of the Plan or Trust
Agreement shall be construed to relieve (or have the effect of relieving) any
Fiduciary from any responsibility or liability for any obligation,
responsibility or duty imposed on such Fiduciary by Part 4 of Title 1 of ERISA.
<PAGE> 81
76
ARTICLE XI - MISCELLANEOUS
--------------------------
11.1 SPENDTHRIFT PROVISIONS. No right or interest of any kind of a Member
or Beneficiary in the Trust Fund shall be anticipated, assigned (either in law
or equity), alienated or be subject to encumbrance, garnishment, attachment,
execution or levy of any kind, voluntary or involuntary, or any other legal or
equitable process, except in accordance with a qualified domestic relations
order as defined in section 414(p) of the Code. The Administrative Committee
shall establish procedures to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders in
accordance with section 414(p) of the Code.
11.2 FACILITY OF PAYMENT. In the event the Committee finds that any Member
or Beneficiary to whom a benefit is payable under the Plan is (at the time such
benefit is payable) unable to care for his affairs because of physical, mental
or legal incompetence, the Committee, in its sole discretion, may cause any
payment due to him hereunder, for which prior claim has not been made by a duly
qualified guardian or other legal representative, to be paid to the person or
institution deemed by the Committee to be maintaining or responsible for the
maintenance of such Member or Beneficiary; and any such payment shall be deemed
a payment for the account of such Member or Beneficiary and shall constitute a
complete discharge of any liability therefor under the Plan.
11.3 NO ENLARGEMENT OF EMPLOYMENT RIGHTS. Nothing herein contained shall
constitute or be construed as a contract
<PAGE> 82
77
of employment between any Employer and any Employee or Member and all Employees
shall remain subject to discipline, discharge and layoff to the same extent as
if the Plan had never gone into effect. An Employer by adopting the Plan,
making contributions to the Trust Fund or taking any other action with respect
to the Plan does not obligate itself to continue the employment of any Member
or Employee for any period or, except as expressly provided in the Plan, to
make any payments into the Trust Fund.
11.4 MERGER OR TRANSFER OF ASSETS. There shall not be any merger or
consolidation of the Plan with, or the transfer of assets or liabilities of the
Plan to, any other plan, unless each Member of the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).
11.5 ACTION BY COMPANY. Wherever the Company is authorized to act under
the Plan (including but not limited to any delegation of its fiduciary powers
and responsibilities under the Plan), such action shall be taken, unless
otherwise provided in the Plan, by written instrument executed by an officer of
the Company. The Trustee may rely on any instrument so executed as being
validly authorized and as properly evidencing the action of the Company.
11.6 SEVERABILITY PROVISION. If any provision of the Plan or Trust
Agreement or the application thereof to any circumstance or person is invalid,
the remainder of the Plan or
<PAGE> 83
78
Trust Agreement and the application of such provision to other circumstances or
persons shall not be affected thereby.
<PAGE> 84
79
ARTICLE XII - OTHER EMPLOYERS
-----------------------------
12.1 ADOPTION BY OTHER EMPLOYERS. The Employers under the Plan are the
Company and those Employers listed on Exhibit A to the Plan. Any other
corporation may, with the consent of the Company, adopt the Plan and thereby
become an Employer hereunder by executing an instrument of adoption evidencing
such adoption and filing a copy thereof with the Company and the Trustee, and
such instrument of adoption shall (subject to such terms and conditions as the
Company may require) become incorporated in the Plan by reference. Such
adoption may be subject to such terms and conditions as the Company requires or
approves. By their adoption of the Plan, Employers other than the Company
shall be deemed to consent to actions taken by the Company in entering into the
Trust Agreement and any other arrangements for the purpose of providing
benefits under the Plan, and to authorize the Company to take any actions
within the authority of the Company under the terms of the Plan.
12.2 COSTS AND EXPENSES. The costs and expenses incurred in connection
with the administration of the Plan and Trust Fund shall be paid by the
Employers or, at the option of the Company, from the Trust Fund.
12.3 WITHDRAWAL OF EMPLOYER. Any Employer (other than the Company) which
adopts the Plan may elect separately to withdraw from the Plan. Any such
withdrawal shall be expressed in an instrument executed by the withdrawing
Employer and filed with the Company and the Trustee. In the event of such a
withdrawal of an Employer, or in the event the Plan is terminated
<PAGE> 85
80
as to an Employer (but not all the Employers) pursuant to Subsection 13.1, such
Employer (herein called "former Employer") shall cease to be an Employer,
Employer Contributions of such former Employer and Before-Tax Contributions,
and Rollover Contributions of or for Employees of such former Employer shall
cease.
<PAGE> 86
81
ARTICLE XIII - AMENDMENT OR TERMINATION
---------------------------------------
13.1 RIGHT TO AMEND OR TERMINATE. Subject to the limitations of Sections
4.5(1) and 7.4 of the Plan, the Company has reserved, and does hereby reserve,
the right at any time, without the consent of any other Employer or of the
Members, Beneficiaries or any other person, (a) to terminate the Plan, in whole
or in part or as to any or all of the Employers or as to any designated group
of Employees, Members and their Beneficiaries, or (b) to amend the Plan, in
whole or in part. The Plan may be amended only by the Company.
13.2 PROCEDURE FOR TERMINATION OR AMENDMENT. Any termination or amendment
of the Plan pursuant to Section 13.1 shall be expressed in an instrument
executed by an officer of the Company and shall become effective as of the date
designated in such instrument or, if no date is so designated, on the date of
its execution.
13.3 DISTRIBUTION UPON TERMINATION. If the Plan shall be terminated by the
Company pursuant to Section 13.1, Contributions, Before-Tax Contributions, and
Rollover Contributions to the Plan shall cease, but the Trust Fund shall be
distributed as if the Plan had not been terminated.
13.4 AMENDMENT CHANGING VESTING SCHEDULE. (1) If any Plan amendment
changes any vesting schedule under the Plan, each Member having not less than
three years of service shall be permitted to elect, during the election period
described in Subsection (2) of this Section, to have his nonforfeitable
<PAGE> 87
82
percentage computed under the Plan without regard to such amendment.
(2) Such election period shall begin on the date the Plan amendment is
adopted and shall end no earlier than the latest of the following dates: (a)
the date which is 60 days after the day the Plan amendment is adopted, (b) the
date which is 60 days after the day the Plan amendment becomes effective, or
(c) the date which is 60 days after the day the Member is issued written notice
of the Plan amendment by the Company.
(3) For purposes of Subsection (1) of this Section, a Member shall be
considered to have completed three years of service if such Member has
completed three years of service, whether or not consecutive, without regard to
the exceptions of section 411(a)(4) of the Code, prior to the expiration of the
election period described in Subsection (2) of this Section.
13.5 NONFORFEITABLE AMOUNTS. Notwithstanding any other provision of the
Plan, upon the termination or partial termination of the Plan or upon complete
discontinuance of contributions under the Plan, the rights of all Employees to
benefits accrued to the date of such termination or partial termination or
discontinuance, to the extent then funded, or the amounts credited to the
Employees' Accounts, shall be nonforfeitable.
13.6 PROHIBITION ON DECREASING ACCRUED BENEFITS. No amendment to the Plan
(other than an amendment described in section 412(c)(8) of the Code) shall have
the effect of decreasing the accrued benefit of any Member. For purposes of
<PAGE> 88
83
the preceding sentence, a Plan amendment which has the effect of (a)
eliminating or reducing an early retirement benefit or a retirement-type
subsidy (as defined in regulations of the Secretary of the Treasury) or (b)
eliminating an optional form of benefit (except as permitted by any such
regulations) with respect to benefits attributable to service before the
amendment, shall be treated as decreasing accrued benefits, provided, however,
that in the case of a retirement-type subsidy this sentence shall apply only
with respect to a Member who satisfies (either before or after the amendment)
the preamendment conditions for the subsidy.
<PAGE> 89
84
ARTICLE XIV - RULES REGARDING COMPANY STOCK
-------------------------------------------
14.1 VOTING COMPANY STOCK. Before each annual or special meeting of the
shareholders of the Company, the Administrative Committee shall cause to be
sent to each Member and Beneficiary who has voting shares of Company Stock
allocated to his Account on the record date of such meeting a copy of the proxy
solicitation material therefor, together with a form requesting confidential
instructions on how to vote the voting shares of Company Stock allocated to his
Account. Upon receipt of such instructions, the Trustee shall vote the voting
shares allocated to such Member's or Beneficiary's Accounts as instructed. The
Trustee shall not vote shares allocated to a Member's or Beneficiary's Account
for which no instructions are received. The Trustee shall vote all voting
shares of Company Stock which represent forfeited Account values that have not
been reallocated at the time of any such proxy solicitation in the same
proportion as it exercises voting rights as directed by Members and
Beneficiaries. A Member's right to instruct the Trustee with respect to voting
shares of Company Stock will not include rights concerning (1) the exercise of
any appraisal rights, dissenters' rights or similar rights granted by
applicable law to the registered or beneficial holders of Company Stock or (2)
the choice of consideration to be received by shareholders in any transaction
involving Company Stock. These matters will be decided by the Investment
Committee in its discretion.
<PAGE> 90
85
14.2 SALE OF COMPANY STOCK. Subject to the rights of Members in a tender
offer as described in Section 14.3, the Investment Committee may direct the
Trustee to sell shares of Company Stock to any person, including the Company,
provided that any sale to the Company or other "disqualified person" within the
meaning of Code section 4975 or "party in interest" within the meaning of ERISA
section 3(14) is made at a price which is not less than adequate consideration
as defined in ERISA section 3(18) and no commission is charged with respect to
the sale.
14.3 TENDER OFFER FOR COMPANY STOCK. In the event of a tender offer for
shares of Company Stock subject to Section 14(d)(1) of the Securities Exchange
Act of 1934 or subject to Rule 13e-4 promulgated under that Act (as those
provisions may from time to time be amended or replaced by successor provisions
of federal securities laws), the Administrative Committee will advise each
Member who has shares of Company Stock credited to his Account in writing of
the terms of the tender offer as soon as practicable after its commencement and
will furnish each Member with a form by which he may instruct the Trustee
confidentially to tender shares credited to his Account. The Trustee shall
tender those shares it has been properly instructed to tender, and shall not
tender those shares which it has been properly instructed not to tender or for
which no instructions are properly received. The Administrative Committee's
advice to Members will include notice that allocated shares for which no
instructions are received shall not be tendered and such related documents as
are prepared by any person and provided to the
<PAGE> 91
86
shareholders of the Company pursuant to the Securities Exchange Act of 1934.
The Administrative Committee may also provide Members with such other material
concerning the tender offer as the Committee in its discretion determines to be
appropriate. A Member's instructions to the Trustee to tender shares will not
be deemed a withdrawal or suspension from the Plan or a forfeiture of any
portion of the Member's interest in the Plan. The number of shares to which a
Member's instructions apply will be the total number of shares credited to his
Account, whether or not the shares are vested, as of the close of business on
the day preceding the date on which the tender offer commences. The Investment
Committee will advise the Trustee of the commencement date of any tender offer
and, until receipt of that advice, the Trustee will not be obligated to take
any action under this section. Funds received in exchange for tendered stock
will be credited to the Account of the Member whose stock was tendered and
shall, at the direction of the Investment Committee, be used by the Trustee to
purchase Company Stock, if available on a national securities exchange or in
the over-the-counter market, commencing on the earlier of the following dates:
(1) the trading day following the first date on which the closing price of the
Company Stock on a national securities exchange or in the over-the-counter
market on which the Company Stock is then traded is within 20% of the closing
price on the tenth trading day preceding the commencement date of the tender
offer or (2) the thirtieth trading day after the expiration date of the tender
offer, of which date the Investment Committee will advise the
<PAGE> 92
87
Trustee. In the interim, the Trustee shall invest such funds in short term
investments permitted under the Trust Agreement.
<PAGE> 93
88
ARTICLE XV - TOP-HEAVY PLAN REQUIREMENTS
----------------------------------------
15.1 DEFINITIONS. For the purposes of this Article, the following terms,
when used with initial capital letters, shall have the following respective
meanings:
(1) AGGREGATION GROUP: Permissive Aggregation Group or Required
Aggregation Group, as the context shall require.
(2) COMPENSATION: "Compensation" as defined in Section 4.9(3) (subject to
the limitations described in Section 1.1(14)(b)).
(3) DEFINED BENEFIT PLAN: A qualified plan as defined in section 414(j) of
the Code.
(4) DEFINED CONTRIBUTION PLAN: A qualified plan as defined in section
414(i) of the Code.
(5) DETERMINATION DATE: For any Plan Year, the last day of the immediately
preceding Plan Year, except that in the case of the first Plan Year of the
Plan, the Determination Date shall be the last day of such first Plan Year.
(6) EXTRA TOP-HEAVY GROUP: An Aggregation Group if, as of a Determination
Date, the aggregate present value of accrued benefits for Key Employees in all
plans in the Aggregation Group (whether Defined Benefit Plans or Defined
Contribution Plans) is more than ninety percent (90%) of the aggregate present
value of all accrued benefits for all employees in such plans.
(7) EXTRA TOP-HEAVY PLAN: See Section 15.3.
(8) FORMER KEY EMPLOYEE: A Non-Key Employee with respect to a Plan Year
who was a Key Employee in a prior Plan
<PAGE> 94
89
Year. Such term shall also include his Beneficiary in the event of his death.
(9) KEY EMPLOYEE: An Employee or former Employee who is or was a Member
and who, at any time during the current Plan Year or any of the four preceding
Plan Years, is (a) an officer of an Employer (limited to no more than 50
Employees or, if lesser, the greater of 3 Employees or 10 percent of the
Employees) having an annual Compensation greater than 50% of the dollar amount
in effect under section 415(b)(1)(A) of the Code for any such Plan Year, (b)
one of the 10 Employees owning (or considered as owning within the meaning of
section 318 of the Code) the largest interests in an Employer and having annual
Compensation of more than the dollar amount in effect under section
415(c)(1)(A) of the Code, (c) a 5-percent owner (as such term is defined in
section 416(i)(1)(B)(i) of the Code) or (d) a 1-percent owner (as such term is
defined in section 416(i)(1)(B)(ii) of the Code) having an annual Compensation
of more than $150,000. For purposes of clause (b) of this Subsection (9), if
two Employees have the same interest in an Employer, the Employee having
greater annual Compensation shall be treated as having a larger interest. The
term "Key Employee" shall also include such Employee's Beneficiary in the event
of his death. For purposes of this Subsection, "Compensation" has the meaning
given such term by section 414(q)(7) of the Code.
(10) NON-KEY EMPLOYEE: An Employee or former Employee who is or was a
Member and who is not a Key Employee. Such term shall also include his
Beneficiary in the event of his death.
<PAGE> 95
90
(11) PERMISSIVE AGGREGATION GROUP: The group of qualified plans of an
Employer consisting of:
(a) the plans in the Required Aggregation Group; plus
(b) one (1) or more plans designated from time to time by the
Administrative Committee that are not part of the Required Aggregation Group
but that satisfy the requirements of sections 401(a)(4) and 410 of the Code
when considered with the Required Aggregation Group.
(12) REQUIRED AGGREGATION GROUP: The group of qualified plans of an
Employer consisting of:
(a) each plan in which a Key Employee participates; plus
(b) each other plan which enables a plan in which a Key Employee
participates to meet the requirements of section 401(a)(4) or 410 of the
Code.
(13) TOP-HEAVY ACCOUNT BALANCE: A Member's (including a Member who has
received a total distribution from this Plan) or a Beneficiary's aggregate
balance standing to his account as of the Valuation Date coinciding with or
immediately preceding the Determination Date (as adjusted by the amount of any
Employer Contributions made or due to be made after such Valuation Date but
before the expiration of the extended payment period in section 412(c)(10) of
the Code), provided, however, that such balance shall include the aggregate
distributions made to such Member or Beneficiary during the five (5)
consecutive Plan Years ending with the Plan Year that includes the
Determination Date (including distributions under a terminated plan which if it
had
<PAGE> 96
91
not been terminated would have been included in a Required Aggregation Group),
and provided further that if an Employee or former Employee has not performed
services for any Employer maintaining the Plan at any time during the 5-year
period ending on the Determination Date, his Account (and/or the Account of
his Beneficiary) shall not be taken into account.
(14) TOP-HEAVY GROUP: An Aggregation Group if, as of a Determination Date,
the aggregate present value of accrued benefits for Key Employees in all plans
in the Aggregation Group (whether Defined Benefit Plans or Defined Contribution
Plans) is more than sixty percent (60%) of the aggregate present value of
accrued benefits for all employees in such plans.
(15) TOP-HEAVY PLAN: See Section 15.2.
15.2 DETERMINATION OF TOP-HEAVY STATUS. (1) Except as provided by
Subsections (2) and (3) of this Section, the Plan shall be a Top-Heavy Plan if,
as of a Determination Date:
(a) the aggregate of Top-Heavy Account Balances for Key Employees is more
than sixty percent (60%) of the aggregate of all Top-Heavy Account Balances,
excluding for this purpose the aggregate Top-Heavy Account Balances of Former
Key Employees; or
(b) if the Plan is included in a Required Aggregation Group which is a
Top-Heavy Group.
(2) If the Plan is included in a Required Aggregation Group which is not a
Top-Heavy Group, the Plan shall not be a Top-Heavy Plan notwithstanding the
fact that the Plan would
<PAGE> 97
92
otherwise be a Top-Heavy Plan under paragraph (a) of Subsection (1) of this
Section.
(3) If the Plan is included in a Permissive Aggregation Group which is not
a Top-Heavy Group, the Plan shall not be a Top-Heavy Plan notwithstanding the
fact that the Plan would otherwise be a Top-Heavy Plan under Subsection (1) of
this Section.
15.3 DETERMINATION OF EXTRA TOP-HEAVY STATUS. (1) Except as provided by
Subsections (2) and (3) of this Section, the Plan shall be an Extra Top-Heavy
Plan if, as of the Determination Date:
(a) the aggregate of Top-Heavy Account Balances for Key Employees is more
than ninety percent (90%) of the aggregate of all Top-Heavy Account Balances,
excluding for this purpose the aggregate Top-Heavy Account Balances of Former
Key Employees; or
(b) if the Plan is included in a Required Aggregation Group which is an
Extra Top-Heavy Group.
(2) If the Plan is included in a Required Aggregation Group which is not an
Extra Top-Heavy Group, the Plan shall not be an Extra Top-Heavy Plan
notwithstanding the fact that the Plan would otherwise be an Extra Top-Heavy
Plan under paragraph (a) of Subsection (1) of this Section.
(3) If the Plan is included in a Permissive Aggregation Group which is not
an Extra Top-Heavy Group, the Plan shall not be an Extra Top-Heavy Plan
notwithstanding the fact
<PAGE> 98
93
that the Plan would otherwise be an Extra Top-Heavy Plan under Subsection (1)
of this Section.
15.4 TOP-HEAVY PLAN REQUIREMENTS. Notwithstanding any other provisions of
the Plan to the contrary, if the Plan is a Top-Heavy Plan for any Plan Year,
the Plan shall then satisfy the following requirements for such Plan Year:
(a) The minimum vesting requirements as set forth in Section 15.5.
(b) The minimum contribution requirement as set forth in Section 15.6.
(c) The adjustment to minimum benefits and allocations as set forth in
Section 15.7.
15.5 MINIMUM VESTING REQUIREMENT. If the Plan is a Top-Heavy Plan for any
Plan Year, each Employee who has completed at least three Years of Vesting
Service and who has an Hour of Service after the Plan becomes a Top-Heavy Plan
shall have a nonforfeitable right to 100 percent of his Matching Employer
Contributions Sub-Account. The vesting schedule described in the immediately
preceding sentence shall cease to be applicable when the Plan ceases to be a
Top-Heavy Plan, provided that an Employee's Matching Employer Contributions
that become nonforfeitable pursuant thereto before the Plan ceases to be a
Top-Heavy Plan shall remain nonforfeitable and the change in the vesting
schedule resulting from the inapplicability of the vesting schedule described
in the immediately preceding sentence shall be subject to the provisions of
Section 13.4.
<PAGE> 99
94
15.6 MINIMUM CONTRIBUTION REQUIREMENT. If the Plan is a Top-Heavy Plan
for any Plan Year:
(a) Each Non-Key Employee who is eligible to share in any Employer
Contribution for such Plan Year (or who would have been eligible to share in
any such Employer Contribution if a Before-Tax Contribution had been made for
him during such Plan Year) shall be entitled to receive an allocation of such
Employer Contribution, which is at least equal to three percent (3%) of his
Compensation for such Plan Year.
(b) The three percent (3%) minimum contribution requirement under paragraph
(a) above for a Non-Key Employee shall be increased to four percent (4%) if
the Employer maintains a Defined Benefit Plan which does not cover such
Non-Key Employee.
(c) The percentage minimum contribution requirement set forth in paragraphs
(a) and (b) above with respect to a Plan Year shall not exceed the percentage
at which Employer Contributions are made (or required to be made) under the
Plan for such Plan Year for the Key Employee for whom such percentage is the
highest for such Year.
(d) The percentage minimum contribution requirement set forth in paragraphs
(b) and (c) above may also be reduced or eliminated in accordance with
Section 15.8(2).
(e) For the purpose of paragraph (c) above, contributions taken into
account shall include like contributions under all other Defined Contribution
Plans in
<PAGE> 100
95
the Required Aggregation Group, excluding any such plan in the Required
Aggregation Group if that plan enables a Defined Benefit Plan in such
Required Aggregation Group to meet the requirements of section 401(a)(4) or
section 410 of the Code.
(f) For the purpose of this Section, the term "Employer Contributions"
shall include Before-Tax Contributions made for an Employee.
15.7 ADJUSTMENT TO MINIMUM BENEFITS AND ALLOCATIONS. If the Plan is a
Top-Heavy Plan for any Plan Year, and if the Employer maintains a Defined
Benefit Plan which could or does provide benefits to Members in this Plan:
(a) If the Plan is not an Extra Top-Heavy Plan (but is a Top-Heavy Plan),
then the percentage minimum contribution requirement in Section 15.6(a) shall
be seven and one-half percent (7-1/2%) for a Non-Key Employee who is covered
by this Plan and the Defined Benefit Plan.
(b) If the Plan is an Extra Top-Heavy Plan, then parts (a) and (b) of
Section 4.7(1) shall be calculated by substituting "1.0" for "1.25" for each
place such "1.25" figure appears, and section 415(e)(6)(B)(i)(I) of the Code
shall be calculated by substituting "$41,500" for "$51,875" for each place
such $51,875" amount appears.
15.8 COORDINATION WITH OTHER PLANS. (1) In applying this Article, an
Employer and all Controlled Group Members shall be treated as a single
employer, and the qualified plans maintained by such single employer shall be
taken into account.
<PAGE> 101
96
(2) In the event that another Defined Contribution Plan or Defined
Benefit Plan maintained by the Controlled Group provides contributions or
benefits on behalf of Members in this Plan, such other plan(s) shall be taken
into account in determining whether this Plan satisfies Section 15.4; and the
minimum contribution required for a Non-Key Employee in this Plan under
Section 15.6 will be reduced or eliminated, in accordance with the
requirements of section 416 of the Code and the Regulations thereunder, if a
minimum contribution or benefit is made or accrued in whole or in part in
respect of such other plan(s).
(3) Principles similar to those specifically applicable to this Plan under
this Article, and in general as provided for in section 416 of the Code and the
Regulations thereunder, shall be applied to the other plan(s) required to be
taken into account under this Article in determining whether this Plan and such
other plan(s) meet the requirements of such section 416 of the Code and the
Regulations thereunder.
DATED as of November 1, 1994, but actually executed at Cleveland,
Ohio, this 9th day of November, 1995.
THE LINCOLN ELECTRIC COMPANY
By /s/ Frederick G. Stueber
-------------------------------------
Title: Vice President, General
Counsel and Secretary
<PAGE> 102
EXHIBIT A
Participating Employers
as of November 1, 1994
The Lincoln Electric Company
<PAGE> 103
AMENDMENT NO. 1
TO
THE LINCOLN ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
(EFFECTIVE NOVEMBER 1, 1994)
-----------------------------
The Lincoln Electric Company, an Ohio corporation, hereby adopts this
Amendment No. 1 to The Lincoln Electric Company Employee Savings Plan
(Effective November 1, 1994). The provisions of this Amendment shall be
effective as of November 1, 1994.
I.
Section 1.1(22) and Section 3.5(1) of the Plan are hereby amended by
deleting the reference to "section 402(a)(8)" and substituting therefor
"section 402(e)(3)".
II.
Section 1.1(27) of the Plan is hereby amended in its entirety to read
as follows:
"(27) Enrollment Date: November 16, 1994, the first day of each
January, April, July and October thereafter, and the Wednesday immediately
preceding each Thanksgiving Day after 1994."
III.
Section 1.1(31)(a) of the Plan is hereby amended by deleting the words
"Unless the Company elects one of the simplified methods contained in section
414(q)(12) of the Code or Revenue Procedure 93-42," and substituting therefor
the following:
<PAGE> 104
"Unless the Company elects one of the simplified
methods contained in section 414(q)(12) of the Code
or Section 4 of Revenue Procedure 93-42 (including,
if elected, the use of a 'snapshot day' as provided
in such Procedure) the provisions of which are hereby
incorporated by reference,"
IV.
Section 6.6(2) of the Plan is hereby amended in its entirety to read as
follows:
"(2)(a) To the extent required under the Code, distributions under the
Plan shall be made in a manner which satisfies section 401(a)(9) of the Code
and Treasury Regulations issued thereunder (including the incidental death
benefit requirement of Prop. Treas. Reg. Section 1.401(a)(9)-2), which
provisions and Regulations are incorporated into the Plan by reference;
provided, however, that such provisions of the Code and Regulations shall
override the other distribution provisions of the Plan only to the extent that
such other Plan provisions provide for distribution that is less rapid than
required under the provisions of the Code and Regulations. Nothing contained
in this Section shall be construed as providing any optional forms of payment
that are not available under the other distribution provisions of the Plan.
(b) To the extent required by section 401(a)(9) of the Code, the
Vested Interest of a Member who has not
-2-
<PAGE> 105
commenced receiving a distribution under the Plan shall commence to be
distributed to such Member not later than April 1 of the calendar year
following the calendar year in which he attains age 70 1/2.
(c) The Vested Interest of a Member described in paragraph (b) of this
Subsection shall be distributed in the manner described in Section 6.3 (as if
the Member has incurred an Employment Severance, whether or not the Member has
in fact incurred an Employment Severance), provided that the amount distributed
in any year shall not be less than the amount required to be distributed under
section 401(a)(9) of the Code and the Regulations issued thereunder. For
purposes of determining the amount to be distributed in any year pursuant to
this paragraph, a Member's Vested Interest shall be based on the value of the
Member's Account on the Valuation Date immediately preceding the date of the
distribution.
(d) If distributions to a Member have commenced and the Member dies
before his entire Vested Interest has been distributed to him, the remaining
portion of such Interest shall be distributed at least as rapidly as under the
method of distribution being used as of the date of the Member's death.
(e) If a Member dies before the distribution of his Vested Interest
has commenced, his Vested Interest shall
-3-
<PAGE> 106
be distributed as provided in Section 6.2 or 6.4, as applicable."
EXECUTED at Cleveland, Ohio, this 1st day of December, 1994.
THE LINCOLN ELECTRIC COMPANY
By /s/ Frederick G. Stueber
--------------------------
Title: Vice President, General
Counsel and Secretary
-4-
<PAGE> 107
AMENDMENT NO. 2
TO
THE LINCOLN ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
(EFFECTIVE NOVEMBER 1, 1994)
----------------------------
The Lincoln Electric Company, an Ohio corporation, hereby adopts this
Amendment No. 2 to The Lincoln Electric Company Employee Savings Plan
(Effective November 1, 1994).
I.
Effective as of July 1, 1995, Section 1.1(17) of the Plan is hereby
amended by (i) deleting the words "or provisional" and (ii) restating clause
(b) thereof to read as follows:
"(b) prior to July 1, 1995, any Employees of the Harris Calorific
Division of the Company."
II.
Effective as of November 1, 1994, Section 12.2 of the Plan is hereby
amended in its entirety to read as follows:
"12.2 Costs and Expenses. The costs and expenses incurred in
connection with the administration of the Plan and Trust Fund shall be
paid from the Trust Fund; provided, however, that the Company, in its
absolute discretion, may elect at any time to pay part or all thereof
directly, but any such election shall not bind the Company as to its
right to elect with respect to
<PAGE> 108
the same or other expenses at any other time to have such expenses
reimbursed or paid from the Trust Fund."
EXECUTED at Cleveland, Ohio, this 9th day of November, 1995.
THE LINCOLN ELECTRIC COMPANY
By Frederick G. Stueber
-------------------------
Title: Vice President, General
Counsel and Secretary
-2-
<PAGE> 109
AMENDMENT NO. 3
TO
THE LINCOLN ELECTRIC COMPANY
EMPLOYEE SAVINGS PLAN
(Effective November 1, 1994)
----------------------------
The Lincoln Electric Company, an Ohio corporation, hereby adopts this
Amendment No. 3 to The Lincoln Electric Company Employee Savings Plan
(Effective November 1, 1994).
I.
Effective as of October 1, 1995, Section 5.7(3) of the Plan is hereby
amended by (i) deleting from the first sentence thereof the words "and shall be
expressed in a multiple of $100" and (ii) inserting immediately after the
second sentence thereof the following:
"Notwithstanding the preceding sentence, a Member who has a loan
outstanding and is otherwise entitled to a loan under this Section may
obtain (not more frequently than once in any calendar year) a new loan,
provided that (a) on the effective date of the new loan the
outstanding balance of the existing loan is paid in full with a
portion of the proceeds of the new loan, and (b) the repayment period
of the new loan does not extend beyond five years from the issuance
date of the existing loan, or the issuance date of the earliest
predecessor loan, whichever is earlier. For purposes of the preceding
sentence, a "predecessor loan" is any loan issued under this Section
which was paid in full with the proceeds of any other loan issued
under this Section that remains outstanding."
<PAGE> 110
II.
Effective as of November 1, 1994 clause (a) of Section 5.7(4) of the
Plan is hereby amended to read as follows:
"(a) direct the Trustee to liquidate the Member's interest in the
Investment Funds, on a pro rata basis, to the extent necessary to
provide funds for the loan,"
III.
Effective as of October 1, 1995, Section 5.7(5)(d)(iii) of the Plan is
hereby amended in its entirety to read as follows:
"(iii) repayment within a specified period of time, which shall not
extend beyond five years, unless the loan is 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 Member,
in which case the maximum repayment period shall not extend beyond
fifteen years."
IV.
Effective as of October 1, 1995, Article VI of the Plan is hereby
amended by adding the following new Section at the end thereof:
"6.11 DISTRIBUTION OF COMPANY STOCK. Notwithstanding the
preceding provisions of this Article, a Member or Beneficiary who is
eligible to receive a distribution pursuant to this Article 6 (other
than pursuant to Section 6.7) may elect to receive that portion of
his distribution which is attributable to his interest in the Company
Stock Fund in the form
<PAGE> 111
of whole shares of Company Stock with any fractional shares of Company
Stock in cash."
EXECUTED at Cleveland, Ohio, this 29th day of September, 1995.
THE LINCOLN ELECTRIC COMPANY
By /s/ Frederick G. Stueber
------------------------------------
Title: Vice President, General Counsel
and Secretary
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Form S-8 Registration
Statement and related Prospectus pertaining to The Lincoln Electric Company
Employee Savings Plan of our reports (a) dated March 3, 1995, except for Note M
as to which the date is June 5, 1995, with respect to the consolidated
financial statements of The Lincoln Electric Company included in Amendment No.
2 to Registration Statement (Form S-3 No. 33-58881) and (b) dated November 8,
1995 with respect to the financial statements and schedules of The Lincoln
Electric Company Employee Savings Plan included in the Plan's Annual Report
(Form 11-K) for the period from inception November 1, 1994 to December 31, 1994
filed with the Securities and Exchange Commission.
Our audits also included the financial statement schedule of The Lincoln
Electric Company listed in Item 14(a) of the Company's Annual Report (Form
10-K) for 1994 filed with the Securities and Exchange Commission. This schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
Ernst & Young LLP
Cleveland, Ohio
November 10, 1995
<PAGE> 1
EXHIBIT 23(b)
110 George Street Parramatta Telephone (02) 633 3555
Box 975 Parramatta NSW 2124 Fax (02) 633 2362
Telex 27486
DX 8217 Parramatta
- -------------------------------------------------------------------------------
PRICE WATERHOUSE [LOGO]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Form S-8
Registration Statement and related Prospectus pertaining to The Lincoln
Electric Company Employee Savings Plan of our report dated 27 March 1995
relating to the consolidated financial statements of The Lincoln Electric
Company (Australia) Proprietary Limited and subsidiaries (not presented
separately therein) included in Amendment No. 2 to Registration Statement
(Form S-3 No. 33-58881) filed with the Securities and Exchange Commission.
/s/ Price Waterhouse
Price Waterhouse
Parramatta, Australia
10 November 1995
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned
officers and directors of The Lincoln Electric Company, an Ohio corporation
(the "Company"), hereby constitutes and appoints Donald F. Hastings, H. Jay
Elliott and Frederick G. Stueber, and each of them, his or her true and lawful
attorney or attorneys-in-fact, with full power of substitution and revocation,
for him or her and in his or her name, place, and stead, to sign on his or her
behalf as an officer or director of the Company Registration Statements to be
filed pursuant to the Securities Act of 1933 on Form S-8 concerning certain
Class A Common Shares, without par value and Common Shares, without par value
(the "Common Shares") of the Company that are available for sale in connection
with the Company's 1995 Lincoln Stock Purchase Plan and The Lincoln Electric
Company Employee Savings Plan, and also any further Registration Statements
concerning such Common Shares, and to sign any and all amendments or post-
effective amendments to such Registration Statements, 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 and attorneys-in-fact or any of them or their substitute
or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the 9th day of November, 1995.
/s/ Donald F. Hastings /s/ G. Russell Lincoln
- ------------------------------- -----------------------------
Donald F. Hastings G. Russell Lincoln
Chairman of the Board and Director
Chief Executive Officer
/s/ Frederick W. Mackenbach /s/ Henry L. Meyer III
- ------------------------------- -----------------------------
Frederick W. Mackenbach Henry L. Meyer III
President, Chief Operating Officer and Director
Director
/s/ H. Jay Elliott /s/ Craig R. Smith
- ------------------------------- -----------------------------
H. Jay Elliott Craig R. Smith Vice
President, Chief Financial Officer and Director
Treasurer
/s/ Harry Carlson /s/ Edward E. Hood, Jr.
- ------------------------------- -----------------------------
Harry Carlson Edward E. Hood, Jr.
Director Director
/s/ David H. Gunning /s/ Paul E. Lego
- ------------------------------- -----------------------------
David H. Gunning Paul E. Lego
Director Director
<PAGE> 2
/s/ Hugh L. Libby /s/ Kathryn Jo Lincoln
- ------------------------------- -----------------------------
Hugh L. Libby Kathryn Jo Lincoln
Director Director
/s/ David C. Lincoln /s/ Lawrence O. Selhorst
- ------------------------------- -----------------------------
David C. Lincoln Lawrence O. Selhorst
Director Director
/s/ Emma S. Lincoln /s/ Frank L. Steingass
- ------------------------------- -----------------------------
Emma S. Lincoln Frank L. Steingass
Director Director
